Believe it or not, we're 3/4 through the year and with that Wall Street staged a rally Friday just to keep with the notion that the economy is at least strong enough (and well enough supported by the Federal Reserve) to warrant the buying of stocks with which to dress up tha many portfolios managed by multi-billion dollar funds.
Friday's economic data included numbers on personal income (up 0.2%), personal spending (flat... oops), core PCE prices (up 0.2%), Chicago PMI (54.2, ahead of forecasts) and the University of Michigan survey on consumer sentiment (91.2).
All right, then, everybody's content, including the Fed, which did not raise rates and won't until Decemebr at the earliest, if at all.
In this sweet spot economy, it's a numbers game and a day-trader's paradise. There's really no serious investment going on, just reshuffling of the deck of S&P 500 stocks to own.
The week was essentially flat, marginally to the upside, as the major averages just bounced between winning and losing all week long.
As Country Joe and the Fish might have said, "Whoopie! We're all gonna die."
Friday's Flash:
Dow Jones Industrial Average
18,308.15, +164.70 (0.91%)
NASDAQ
5,312.00, +42.85 (0.81%)
S&P 500
2,168.27, +17.14 (0.80%)
NYSE Composite
10,721.74, +78.22 (0.73%)
For the Week ended September 30:
Dow: +46.70 (+0.26%)
NASDAQ: +6.25 (+0.12%)
S&P 500: +3.58 (+0.17%)
NYSE Composite: +3.75 (+0.03%)
Showing posts with label 3rd quarter. Show all posts
Showing posts with label 3rd quarter. Show all posts
Sunday, October 2, 2016
Thursday, October 29, 2009
Positive GDP Growth Sends Stocks Soaring
All of the selling over the past three to four sessions based on fears that 3rd quarter GDP would come in lower than expected turned out to be dead wrong. even the high-and-mighty analysts at Goldman Sachs, who just yesterday downgraded their estimate to 2.7% growth, were well short of the true number, which came in at 3.5%, topping all but the most-optimistic estimates and sending shorts scrambling to cover and other investors cheering the solid results.
It was the first positive GDP report since in a year and the best quarter since the third quarter of 2007, when the recession actually began (though economists will tell you it was the 4th quarter of 2008, the slowdown was much earlier and was being felt in manufacturing especially. The result was the best one-day gain on the Dow Jones Industrial Average since July 23.
Perhaps more important than the nearly-200-point gain on the Dow were the levels at which the NASDAQ and S&P 500 averages closed, ahead of their 50-day moving averages, which were penetrated to the downside on Wednesday. With a solid base at those levels now intact (conceding that it must hold tomorrow), the major indices are aligned for another assault at the highs of the year, erasing all the bad karma from the meltdown of 2008.
On an even more fascinating historic note, the past two days marked the 80th anniversary of Black Monday and Black Tuesday, two of the worst performing days in the history of the stock market. On Monday, October 28, 1929, stocks fell 38.33 points (-12.82%). The Dow Jones Industrials closed that day at 260.64. The next day, Tuesday, October 29, 1929, the Industrial Average fell an additional 30.57 points (-11.73), closing at 230.07. We have come a long, long way since then, but it's intriguing that none of the financial press seemed willing to even mention the anniversary. To say that stock traders and those who report on such activity are superstitious may be putting it lightly.
Dow 9,962.58, +199.89 (2.05%)
NASDAQ 2,097.55, +37.94 (1.84%)
S&P 500 1,066.11, +23.48 (2.25%)
NYSE Composite 6,955.31, +189.62 (2.80%)
Today, thankfully, was nothing like those days of 80 years past. On this day, advancing issues solidly trounced decliners, 4934-1555. New highs rebounded to retake the upper position, beating new lows narrowly, 74-69, indicating that while we may have made a turn, the jury is still out. Stocks could actually vacillate over the next week or so, though most indications are that the rally is back on, using the solid GDP figure as a backstop.
Volume was not spectacular, but solid, in line with other days of the past two weeks.
NYSE Volume 6,477,558,500
NASDAQ Volume 2,251,900,500
What remains to be seen is where leadership is going to emerge. The 7-month-long rally has been fueled by banking, energy, technology and basic materials, correlating in inverse fashion with the dollar (which has been down precipitously and was priced lower today). At some point, the inverse correlation must come to an end, though the transition is not going to be smooth or particularly painless. Sooner or later, the regimen of easy money policy by the Fed is going to change, though that moment is likely 4-6 months in the future. For the time being, traders will look for new star stocks and other positive notes on the economy. With the holidays quickly approaching, consumer discretionary and retail stocks should receive much of the focus.
It's interesting to note the cross-over play with technology in companies such as Apple (AAPL) and Amazon (AMZN), which will likely benefit from strong sales of their leading products, the iPhone and Kindle, respectively.
Commodities also rallied as the dollar declined, snapping a week of dollar increases. Oil was up sharply, gaining $2.41, to $79.87. Gold was up $16.60, to $1,047.10. Silver gained 42 cents, to $16.66.
With no huge earnings news scheduled for Friday morning, investors will have to contend with readings on personal income and spending at 8:30 am, and a Michigan Sentiment revision at 10:00 am. That will probably be just fine with most. The market has covered a good deal of ground over the past four sessions and traders have to be just a little weary as the week draws to a close.
It was the first positive GDP report since in a year and the best quarter since the third quarter of 2007, when the recession actually began (though economists will tell you it was the 4th quarter of 2008, the slowdown was much earlier and was being felt in manufacturing especially. The result was the best one-day gain on the Dow Jones Industrial Average since July 23.
Perhaps more important than the nearly-200-point gain on the Dow were the levels at which the NASDAQ and S&P 500 averages closed, ahead of their 50-day moving averages, which were penetrated to the downside on Wednesday. With a solid base at those levels now intact (conceding that it must hold tomorrow), the major indices are aligned for another assault at the highs of the year, erasing all the bad karma from the meltdown of 2008.
On an even more fascinating historic note, the past two days marked the 80th anniversary of Black Monday and Black Tuesday, two of the worst performing days in the history of the stock market. On Monday, October 28, 1929, stocks fell 38.33 points (-12.82%). The Dow Jones Industrials closed that day at 260.64. The next day, Tuesday, October 29, 1929, the Industrial Average fell an additional 30.57 points (-11.73), closing at 230.07. We have come a long, long way since then, but it's intriguing that none of the financial press seemed willing to even mention the anniversary. To say that stock traders and those who report on such activity are superstitious may be putting it lightly.
Dow 9,962.58, +199.89 (2.05%)
NASDAQ 2,097.55, +37.94 (1.84%)
S&P 500 1,066.11, +23.48 (2.25%)
NYSE Composite 6,955.31, +189.62 (2.80%)
Today, thankfully, was nothing like those days of 80 years past. On this day, advancing issues solidly trounced decliners, 4934-1555. New highs rebounded to retake the upper position, beating new lows narrowly, 74-69, indicating that while we may have made a turn, the jury is still out. Stocks could actually vacillate over the next week or so, though most indications are that the rally is back on, using the solid GDP figure as a backstop.
Volume was not spectacular, but solid, in line with other days of the past two weeks.
NYSE Volume 6,477,558,500
NASDAQ Volume 2,251,900,500
What remains to be seen is where leadership is going to emerge. The 7-month-long rally has been fueled by banking, energy, technology and basic materials, correlating in inverse fashion with the dollar (which has been down precipitously and was priced lower today). At some point, the inverse correlation must come to an end, though the transition is not going to be smooth or particularly painless. Sooner or later, the regimen of easy money policy by the Fed is going to change, though that moment is likely 4-6 months in the future. For the time being, traders will look for new star stocks and other positive notes on the economy. With the holidays quickly approaching, consumer discretionary and retail stocks should receive much of the focus.
It's interesting to note the cross-over play with technology in companies such as Apple (AAPL) and Amazon (AMZN), which will likely benefit from strong sales of their leading products, the iPhone and Kindle, respectively.
Commodities also rallied as the dollar declined, snapping a week of dollar increases. Oil was up sharply, gaining $2.41, to $79.87. Gold was up $16.60, to $1,047.10. Silver gained 42 cents, to $16.66.
With no huge earnings news scheduled for Friday morning, investors will have to contend with readings on personal income and spending at 8:30 am, and a Michigan Sentiment revision at 10:00 am. That will probably be just fine with most. The market has covered a good deal of ground over the past four sessions and traders have to be just a little weary as the week draws to a close.
Wednesday, October 28, 2009
Fear of the Unknown GDP
There were some good reasons to get out of the market on Wednesday, but one of them was probably not fear of the nation's 3rd quarter GDP coming in at a level lower than expectations.
In the first case, nobody is really sure what the expectations really are, since there are estimates all over the place from a variety of sources, most of them in the 2.5-3.2% range of growth and that's likely where it's going to land. Early in the day, Goldman Sachs lowered their forecast for tomorrow's release, from 3.0% to 2.7%. It will be interesting to see whether Goldman's one-day crystal ball is effective or whether it was some kind of sly ruse to get people to sell on supposed weakness.
In any case, a positive number will no doubt be reported by the government, and that number will be revised twice before being finalized, but it is a very important figure. If the number turns out to be better-than-expected, the market will almost certainly gap up, making everybody who sold in order to get out of the way of the number - released at 8:30 am - look silly. Of course, if it's weak, those same people will appear brilliant.
It's a crap shoot, one way or the other.
In any case, stocks took severe declines into the close on Wednesday, fear of the GDP being the only plausible reason. Earnings for most stocks have been very good this quarter, but the market continues to sell off. A solid GDP reading on Thursday could change all of that. Durable goods orders came in at 1.0%, about what was expected, so that figure was a non-event this morning.
Dow 9,762.69, -119.48 (1.21%)
NASDAQ 2,059.61, -56.48 (2.67%)
S&P 500 1,042.63, -20.78 (1.95%)
NYSE Composite 6,765.69, -166.35 (2.40%)
Some very interesting data came out today from the simplest of simple indicators. Declining issues blasted advancers, 5676-891, a better than 6-1 ratio, and new lows actually outdid new highs, by a score of 94-73. Both of these numbers are more indicative of a market bottom rather than the continuation of a week-long decline, but there are other indicators and the overhang of tomorrow's GDP number with which to deal. Both the S&P and NASDAQ broke through their 50-day moving averages today, key support levels which normally should not be violated.
Volume was elevated today, indicating, again, more of a flushing action than middle-move reactions.
NYSE Volume 7,564,809,500
NASDAQ Volume 2,794,432,000
Of course, much of the selling was the result of a stronger dollar, which is traditionally good for stocks, but, now that so many US corporations do business around the globe, a stronger greenback may not be an advantage in terms of repatriating profits and denominating them in US dollars. Then again, costs will be lowered for labor in foreign countries, so, in a way, it's a wash for many companies.
What it's not a wash for is commodities. With the dollar up nicely again today, oil was lower by $2.09, to $77.46. Gold fell another $4.90, to $1,030.50, and silver dropped 30 cents, to $16.24. If the dollar move continues - and there are plenty of reasons why it should - over the short term (longer term, it's weaker), expect commodities and commodity-related companies and products to price lower. Once again, the ugly head of the severe contraction in credit is inducing a degree of deflation with which nobody wants to deal. However, it's there and it doesn't have to be a game-ender. Lower prices, after all, are good for consumers.
In any case, tomorrow's release of 3rd quarter GDP will be either a boon or a bane for the markets. I'll take a flyer and make a call, especially since Goldman Sachs decided to change their mind so close to the release. At least mine won't move any markets, unless you're foolish enough to trade after hours on my recommendation.
My call is 3rd quarter GDP comes in at +3.2%.
In the first case, nobody is really sure what the expectations really are, since there are estimates all over the place from a variety of sources, most of them in the 2.5-3.2% range of growth and that's likely where it's going to land. Early in the day, Goldman Sachs lowered their forecast for tomorrow's release, from 3.0% to 2.7%. It will be interesting to see whether Goldman's one-day crystal ball is effective or whether it was some kind of sly ruse to get people to sell on supposed weakness.
In any case, a positive number will no doubt be reported by the government, and that number will be revised twice before being finalized, but it is a very important figure. If the number turns out to be better-than-expected, the market will almost certainly gap up, making everybody who sold in order to get out of the way of the number - released at 8:30 am - look silly. Of course, if it's weak, those same people will appear brilliant.
It's a crap shoot, one way or the other.
In any case, stocks took severe declines into the close on Wednesday, fear of the GDP being the only plausible reason. Earnings for most stocks have been very good this quarter, but the market continues to sell off. A solid GDP reading on Thursday could change all of that. Durable goods orders came in at 1.0%, about what was expected, so that figure was a non-event this morning.
Dow 9,762.69, -119.48 (1.21%)
NASDAQ 2,059.61, -56.48 (2.67%)
S&P 500 1,042.63, -20.78 (1.95%)
NYSE Composite 6,765.69, -166.35 (2.40%)
Some very interesting data came out today from the simplest of simple indicators. Declining issues blasted advancers, 5676-891, a better than 6-1 ratio, and new lows actually outdid new highs, by a score of 94-73. Both of these numbers are more indicative of a market bottom rather than the continuation of a week-long decline, but there are other indicators and the overhang of tomorrow's GDP number with which to deal. Both the S&P and NASDAQ broke through their 50-day moving averages today, key support levels which normally should not be violated.
Volume was elevated today, indicating, again, more of a flushing action than middle-move reactions.
NYSE Volume 7,564,809,500
NASDAQ Volume 2,794,432,000
Of course, much of the selling was the result of a stronger dollar, which is traditionally good for stocks, but, now that so many US corporations do business around the globe, a stronger greenback may not be an advantage in terms of repatriating profits and denominating them in US dollars. Then again, costs will be lowered for labor in foreign countries, so, in a way, it's a wash for many companies.
What it's not a wash for is commodities. With the dollar up nicely again today, oil was lower by $2.09, to $77.46. Gold fell another $4.90, to $1,030.50, and silver dropped 30 cents, to $16.24. If the dollar move continues - and there are plenty of reasons why it should - over the short term (longer term, it's weaker), expect commodities and commodity-related companies and products to price lower. Once again, the ugly head of the severe contraction in credit is inducing a degree of deflation with which nobody wants to deal. However, it's there and it doesn't have to be a game-ender. Lower prices, after all, are good for consumers.
In any case, tomorrow's release of 3rd quarter GDP will be either a boon or a bane for the markets. I'll take a flyer and make a call, especially since Goldman Sachs decided to change their mind so close to the release. At least mine won't move any markets, unless you're foolish enough to trade after hours on my recommendation.
My call is 3rd quarter GDP comes in at +3.2%.
Monday, July 2, 2007
Stocks in Broad Rally as 3rd Quarter Ensues
After three weeks of see-saw trading which resulted in less than a 1.5-2% loss on the major exchanges (most of which was recovered today), investors took the beginning of the 3rd quarter as an opportunity to buy.
This was not an unexpected occurrence, as noted by the experts, there had been a significant amount of portfolio paring and clipping of losses, with only a small dose of outright profit-taking in winning positions.
The markets were up right out of the gate and the action was steady throughout the session even though volume was relatively light. This being an unusual trading week, with the Independence Day holiday smack in the middle of it, there are surely fewer active traders to be found.
Dow 13,535.43 Up 126.81; NASDAQ 2,632.30 +29.07; S&P 500 1,519.43 +16.08; NYSE Composite 9997.43 +124.41
There was no mistaking the direction of the market on Monday, as advancing issues trounced decliners by a better than 5-2 margin and there were 409 new highs to just 123 new lows.
Stocks weren't the only winners on the first trading day of the 2nd half of the economic year; oil jumped another 41 cents to close at another 2007 high of $71.09. With the biggest holiday of summer just another day away, the oil barons are making sure that American motorists pay through the nose at the pump (pardon the sloppy metaphor).
What may be driving the most recent rise in oil prices is the fact that the holiday will be in mid-week, somewhat limiting long-distance travel and forcing the hand of the oil cartel to jack prices to make up for slack demand. That's how the supply-demand logic works for the oil companies. If they sell less, they'll make up for it with higher prices, and make no doubt, there's price fixing at the very highest levels of industry.
Despite the troubling and potentially criminal behavior of the oil crowd, the US economy still seems to be humming along quite well. Interest rates are still historically low and GDP growth (or lack thereof) probably bottomed out in the 2nd quarter, though we won't know for sure for another 3-4 weeks. By that time, corporate earnings reports will be at full tap, so if news is not good on the overall economy, it could come as a shock. Regardless, corporate earnings are still on a buoyant tack and another rally to new all-time highs is likely to occur within the next 3-4 weeks.
It's prime time to put unused capital to work, shed losers and reinvest in companies that have been meeting or beating street estimates. Tomorrow, and over the next few days' posts, I'll offer some specific stocks and sectors.
Gold and silver posted gains of $8.30 and $0,27, but they look more like a dead cat bounce than anything indicative of a new direction in the metals markets.
This was not an unexpected occurrence, as noted by the experts, there had been a significant amount of portfolio paring and clipping of losses, with only a small dose of outright profit-taking in winning positions.
The markets were up right out of the gate and the action was steady throughout the session even though volume was relatively light. This being an unusual trading week, with the Independence Day holiday smack in the middle of it, there are surely fewer active traders to be found.
Dow 13,535.43 Up 126.81; NASDAQ 2,632.30 +29.07; S&P 500 1,519.43 +16.08; NYSE Composite 9997.43 +124.41
There was no mistaking the direction of the market on Monday, as advancing issues trounced decliners by a better than 5-2 margin and there were 409 new highs to just 123 new lows.
Stocks weren't the only winners on the first trading day of the 2nd half of the economic year; oil jumped another 41 cents to close at another 2007 high of $71.09. With the biggest holiday of summer just another day away, the oil barons are making sure that American motorists pay through the nose at the pump (pardon the sloppy metaphor).
What may be driving the most recent rise in oil prices is the fact that the holiday will be in mid-week, somewhat limiting long-distance travel and forcing the hand of the oil cartel to jack prices to make up for slack demand. That's how the supply-demand logic works for the oil companies. If they sell less, they'll make up for it with higher prices, and make no doubt, there's price fixing at the very highest levels of industry.
Despite the troubling and potentially criminal behavior of the oil crowd, the US economy still seems to be humming along quite well. Interest rates are still historically low and GDP growth (or lack thereof) probably bottomed out in the 2nd quarter, though we won't know for sure for another 3-4 weeks. By that time, corporate earnings reports will be at full tap, so if news is not good on the overall economy, it could come as a shock. Regardless, corporate earnings are still on a buoyant tack and another rally to new all-time highs is likely to occur within the next 3-4 weeks.
It's prime time to put unused capital to work, shed losers and reinvest in companies that have been meeting or beating street estimates. Tomorrow, and over the next few days' posts, I'll offer some specific stocks and sectors.
Gold and silver posted gains of $8.30 and $0,27, but they look more like a dead cat bounce than anything indicative of a new direction in the metals markets.
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