Maybe Tuesday's ramp-up was a little too much, or investors are actually a little concerned about events unfolding in Egypt, but whatever the case or cause, markets didn't do anything other than flatline on Wednesday.
The Dow traded in a 45-point range, while the S&P and NASDAQ were bound by 10 and 5-point ranges, respectively, proving that three's nothing like pushing already overvalued stocks even higher to stall out trading completely.
ADP released its monthly employment report, which suggested private payrolls grew by 187,000 in January, and revised December's report down 50,000, to 247,000. The revision means that the initial report was off by a factor of 16%, making it about as reliable an indicator as anything coming out of the Bureau of Labor Statistics (BLS), which, by the way, is the "official" measure of everything employment-related in the USA.
Market reaction to the number was a big yawn and the rest of the session more resembled churning of butter or grape-stomping rather than orderly markets. The day was a mash, and a dull one, at that.
Dow 12,041.97, +1.81 (0.02%)
NASDAQ 2,750.16, -1.03 (0.04%)
S&P 500 1,304.03, -3.56 (0.27%)
NYSE Composite 8,272.57, -17.52 (0.21%)
Losing issues took control over gainers on the day, 3569-2893. The NASDAQ recorded 158 new highs and 15 new lows, while the NYSE had 255 new highs and 6 new lows. This indicator has been stuck at roughly these levels for the past two months with no signal that they are going to change any time soon, thanks largely to the Fed's easy money policies of ZIRP and QE2. Volume was back at the usual moribund levels.
NASDAQ Volume 2,011,206,000
NYSE Volume 4,553,074,500
Commodities took the day off, especially crude futures, which registered a smallish gain of 9 cents, to $90.86. The precious metals continued to be depressed, with gold down $8.20, to $1,332.10 and silver off 23 cents, to $28.29.
Thursday will bring initial unemployment claims at 8:30 am and Friday will be the big number, the BLS' non-farm payroll report. Of course, none of these indicators really matter much with the Super Bowl on Sunday. As mentioned in previous posts, there won't be any real movement in markets (other than straight up) until after the big game.
Inflation remains a hot topic, with the official government CPI proclaiming it to be hovering in the 1 1/2-2% area, when everyone in the real world knows it's really 5-8% or higher, especially concerning food and fuel.
One area not experiencing inflation are payrolls, which haven't budged much in the last 10 years for most middle class jobs. How long the government can keep the Ponzi scheme of rising prices and stagnant wages going before the USA turns into either Ireland, Greece or Egypt is an open question, though considering the general stupidity and apathetic nature of the American public, it could carry on for some time, measured more in years than months.
But then again, nobody in the "official" world saw the Sub-prime or banking collapse coming, so the next Black Swan could be right around the corner, say, in Pakistan.
Leaders in Washington have been particularly silent of late, focused more on in-fighting than any meaningful, needed reforms, and that condition is unlikely to change. After all the next big congressional and presidential elections are only 21 months away. It's actually quite astounding that nobody from the Republican camp has declared themselves a candidate.
Maybe they're all scared of Sarah Palin, or something worse. But, is there anything worse than the former Alaska governor? Well, there is Michele Bachmann, the woman who keeps John Boehner in tears.
Showing posts with label ADP. Show all posts
Showing posts with label ADP. Show all posts
Wednesday, February 2, 2011
Tuesday, November 30, 2010
Dow Down 400+ Points Since QE2
Since the inception of the Fed's QE2 program, throwing billions of dollars at Primary Dealers in exchange for Treasuries - essentially monetizing the government's debt - stocks have suffered mightily, posting losses in 11 of the past 16 sessions and dropping a whopping 445 points since November 7.
Currently, the scapegoat is the dastardly Irish, who chose a most inopportune time for their banks to become wholly insolvent and in needs of rescue by the European Union. With debt contagion spreading across to the continent in rapid fashion, the Euro has declined against the greenback, taking the fun of a weak currency trade along with it. As the dollar has strengthened, US stocks have nose-dived, and the rout is clearly underway, whether Ben Bernanke wishes to admit it or not.
Action on the markets today was entirely below the 50-day moving average on the Dow, and ended, after a midday respite, to the downside for the third session in a row. Blaming the Irish may be good sport for Fed bankers, but problems in the Eurozone certainly don't bode well for the ailing US economy. The slow-motion train wreck of Western economies which began in 2007 with the sub--prime mortgage unwind, is, after a $20 trillion reprieve from 2008 to the present, set to gather momentum and careen off the tracks again.
What will eventually prove to be the US economic undoing is still debatable. An expose of Bank of America's immoral and despicable practices in the mortgage arena has been put on the table by Wikileaks' founder Julien Assange. Shares of the Charlotte, NC-based bank fell to a 2-year low, closing at 10.95, on fears of such an event.
Perhaps Ireland's Parliament will just say no to the bank bailout being shoved down their throats by the equally-corrupt European Union, which itself may be a forgotten relic of a failed experiment in a few year's time.
Closer to home, it appears that the lame-duck congress has its hands full in the dwindling time before they decide to do what they do best - go home and do nothing - tackling issues such as the Bush tax cuts and jobless benefits have seen little movement. Congress must also pass a continuing resolution to keep the government operating by December 4, which just happens to be this Friday.
Tomorrow, ADP releases its normal private sector employment report, this one for the month of November, as a precursor to the BLS non-farm payroll data on Friday, which could also sway markets. Consensus seems to be calling for the nation to have created 130-150,000 new jobs in the month. Any number less robust than that could set off investor alarms again.
For today, another $6 billion pumped from the Fed to Primary dealers did little to stem the tide of selling. Stocks rebounded off their morning lows, but suffered a setback in the final hour, all major indices finishing deep in red ink.
Dow 11,006.02, -46.47 (0.42%)
NASDAQ 2,498.23, -26.99 (1.07%)
S&P 500 1,180.55, -7.21 (0.61%)
NYSE Composite 7,430.94, -52.40 (0.70%)
Losses were widespread as losers outnumbered gainers, 4290-2137. New highs numbered 156, while new lows closed to gap, at 103. In an obvious sign of weakness, volume ramped up to numbers not seen since election day.
NASDAQ Volume 2,429,697,750
NYSE Volume 5,643,896,500
Oil took a solid hit, losing $1.62, to $84.11, though it remains at elevated levels. Gold was a star, shooting up $19.20, to $1,386.70 per ounce. Silver also posted a strong gain of 89 cents, to finish at $28.09 on the COMEX.
FUD (Fear, uncertainty and doubt) are on the rise again and the Fed seems powerless to do anything but print more money.
Currently, the scapegoat is the dastardly Irish, who chose a most inopportune time for their banks to become wholly insolvent and in needs of rescue by the European Union. With debt contagion spreading across to the continent in rapid fashion, the Euro has declined against the greenback, taking the fun of a weak currency trade along with it. As the dollar has strengthened, US stocks have nose-dived, and the rout is clearly underway, whether Ben Bernanke wishes to admit it or not.
Action on the markets today was entirely below the 50-day moving average on the Dow, and ended, after a midday respite, to the downside for the third session in a row. Blaming the Irish may be good sport for Fed bankers, but problems in the Eurozone certainly don't bode well for the ailing US economy. The slow-motion train wreck of Western economies which began in 2007 with the sub--prime mortgage unwind, is, after a $20 trillion reprieve from 2008 to the present, set to gather momentum and careen off the tracks again.
What will eventually prove to be the US economic undoing is still debatable. An expose of Bank of America's immoral and despicable practices in the mortgage arena has been put on the table by Wikileaks' founder Julien Assange. Shares of the Charlotte, NC-based bank fell to a 2-year low, closing at 10.95, on fears of such an event.
Perhaps Ireland's Parliament will just say no to the bank bailout being shoved down their throats by the equally-corrupt European Union, which itself may be a forgotten relic of a failed experiment in a few year's time.
Closer to home, it appears that the lame-duck congress has its hands full in the dwindling time before they decide to do what they do best - go home and do nothing - tackling issues such as the Bush tax cuts and jobless benefits have seen little movement. Congress must also pass a continuing resolution to keep the government operating by December 4, which just happens to be this Friday.
Tomorrow, ADP releases its normal private sector employment report, this one for the month of November, as a precursor to the BLS non-farm payroll data on Friday, which could also sway markets. Consensus seems to be calling for the nation to have created 130-150,000 new jobs in the month. Any number less robust than that could set off investor alarms again.
For today, another $6 billion pumped from the Fed to Primary dealers did little to stem the tide of selling. Stocks rebounded off their morning lows, but suffered a setback in the final hour, all major indices finishing deep in red ink.
Dow 11,006.02, -46.47 (0.42%)
NASDAQ 2,498.23, -26.99 (1.07%)
S&P 500 1,180.55, -7.21 (0.61%)
NYSE Composite 7,430.94, -52.40 (0.70%)
Losses were widespread as losers outnumbered gainers, 4290-2137. New highs numbered 156, while new lows closed to gap, at 103. In an obvious sign of weakness, volume ramped up to numbers not seen since election day.
NASDAQ Volume 2,429,697,750
NYSE Volume 5,643,896,500
Oil took a solid hit, losing $1.62, to $84.11, though it remains at elevated levels. Gold was a star, shooting up $19.20, to $1,386.70 per ounce. Silver also posted a strong gain of 89 cents, to finish at $28.09 on the COMEX.
FUD (Fear, uncertainty and doubt) are on the rise again and the Fed seems powerless to do anything but print more money.
Tuesday, November 2, 2010
The End (of the ruling elite) is Here for the Taking... but is anybody listening?
Today is election day, but, for most of us, it is meaningless. The new bodies elected with do about the same as the ones being replaced: nothing, or make matters worse. To buttress my argument, I direct you to reading a post by Jim Quinn, detailing precisely how the government, with a grand assist by the private Federal Reserve, has misspent our fortune and has destined us to a future of depression and depravity. His tome is somewhat inappropriately titled, Suicide is Painless, because most people simply do not see that they and their neighbors are being slowly starved and/or bled to death, so maybe "assisted suicide is painless" would be preferable.
Now, how do we (wait, you did read the article linked above, right?) go about the destruction of the ruling elite?
Dispensing with the final scene of Fight Club, which would be thrilling and decisive, aleit never possible in the real world, we must find other means to our end.
We can start today by not voting, or voting for anybody but the candidates on the ballots (actually, the machines will change our votes to whatever they like, so just avoiding the polling places may be the best tactic).
Next, we must starve the beast. Grow your own fruits and veggies and instruct others to do the same. Cut out the Monsantos and McDonald's.
Cut utility bills by using less. Install a small solar panel or two, maybe a wind turbine, get the wasters (I have a neighbor who insists on keeping lights on in every room and two more outdoors almost all night long) to stop their own madness by showing them the reality of lower utility bills. If they don't listen, ridicule them, make them feel shame for their waste.
Kill the big banks. Take all money out of the 15 largest banks and put it in local banks or credit unions.
Keep buying gold and silver.
Fight and avoid taxation at every opportunity.
If opportunity presents itself, harm the interests of corporations. Be creative.
Foster an environment in which everybody is encouraged to be more self-reliant, less wasteful and point out the true enemies: banks, corporations, government at all levels.
It's a small start, but we must begin to take back the nation.
As for the markets, same old story. More gains on low volume.
Dow 11,188.72, +64.10 (0.58%)
NASDAQ 2,533.52, +28.68 (1.14%)
S&P 500 1,193.57, +9.19 (0.78%)
NYSE Composite 7,582.14, +72.93 (0.97%)
Advancers ran roughshod over declining issues, 4795-1663. There were 615 new highs and just 72 new lows. Volume: no comment.
NASDAQ Volume 1,923,377,125
NYSE Volume 4,254,097,500
My data is showing no change for oil, at $82.95, though I know it traded higher than that. Gold popped by $6.60, to $1,356.90; silver was also higher, up 28 cents, to $24.84.
There is a slew of data coming through on Wednesday, but tonight everybody will be focused on the election results. Somehow, Wall Street and their ilk believe that change is good or that somehow, electing a large number of nutjob, Tea Party Republicans is going to change policy in Washington. At best, it will produce a stalemate, which is exactly what is not needed. Change is needed. Changes in regulations, taxes, rules, but mostly in how we are governed and how the federal government communicates with the public. But that won't happen; we know it won't.
Wall Street, the real control of politicians, is full of itself and some other stuff that's usually found on cow pastures.
The data stream for tomorrow begins at 7:30 AM with the Challenger Job Cuts for October. At 8:15 AM, the release of ADP Employment Change for October, followed by the 10:00 AM release of ISM Services and Factory Orders. After the 10:30 AM release of Crude Inventories, the market will hold its collective breath, awaiting the FOMC Rate Decision at 2:15 PM, which is not really a rate decision, as federal funds rates are permanently stuck at ZERO, but the world expects to hear details on just how quickly the Fed is going to finish off the US economy through inflation, otherwise known as QE2, or, printing gazillions of dollars with nothing backing them.
Best guess moving forward is the Republicans gain control of the House, nothing changes, but the Fed produces runaway inflation in food, fuel and utilities, further crushing the middle class. Stocks will go to the moon, but the economy will be dead with unemployment approaching 25%.
There's a way out, but it requires a thinking, functioning populace that isn't dependent on the government for anything. Considering the 47 million people already on food stamps and even more on some form of government assistance (along the lines of 50% of the population), hope is fading fast.
Every man for himself? Could be.
Now, how do we (wait, you did read the article linked above, right?) go about the destruction of the ruling elite?
Dispensing with the final scene of Fight Club, which would be thrilling and decisive, aleit never possible in the real world, we must find other means to our end.
We can start today by not voting, or voting for anybody but the candidates on the ballots (actually, the machines will change our votes to whatever they like, so just avoiding the polling places may be the best tactic).
Next, we must starve the beast. Grow your own fruits and veggies and instruct others to do the same. Cut out the Monsantos and McDonald's.
Cut utility bills by using less. Install a small solar panel or two, maybe a wind turbine, get the wasters (I have a neighbor who insists on keeping lights on in every room and two more outdoors almost all night long) to stop their own madness by showing them the reality of lower utility bills. If they don't listen, ridicule them, make them feel shame for their waste.
Kill the big banks. Take all money out of the 15 largest banks and put it in local banks or credit unions.
Keep buying gold and silver.
Fight and avoid taxation at every opportunity.
If opportunity presents itself, harm the interests of corporations. Be creative.
Foster an environment in which everybody is encouraged to be more self-reliant, less wasteful and point out the true enemies: banks, corporations, government at all levels.
It's a small start, but we must begin to take back the nation.
As for the markets, same old story. More gains on low volume.
Dow 11,188.72, +64.10 (0.58%)
NASDAQ 2,533.52, +28.68 (1.14%)
S&P 500 1,193.57, +9.19 (0.78%)
NYSE Composite 7,582.14, +72.93 (0.97%)
Advancers ran roughshod over declining issues, 4795-1663. There were 615 new highs and just 72 new lows. Volume: no comment.
NASDAQ Volume 1,923,377,125
NYSE Volume 4,254,097,500
My data is showing no change for oil, at $82.95, though I know it traded higher than that. Gold popped by $6.60, to $1,356.90; silver was also higher, up 28 cents, to $24.84.
There is a slew of data coming through on Wednesday, but tonight everybody will be focused on the election results. Somehow, Wall Street and their ilk believe that change is good or that somehow, electing a large number of nutjob, Tea Party Republicans is going to change policy in Washington. At best, it will produce a stalemate, which is exactly what is not needed. Change is needed. Changes in regulations, taxes, rules, but mostly in how we are governed and how the federal government communicates with the public. But that won't happen; we know it won't.
Wall Street, the real control of politicians, is full of itself and some other stuff that's usually found on cow pastures.
The data stream for tomorrow begins at 7:30 AM with the Challenger Job Cuts for October. At 8:15 AM, the release of ADP Employment Change for October, followed by the 10:00 AM release of ISM Services and Factory Orders. After the 10:30 AM release of Crude Inventories, the market will hold its collective breath, awaiting the FOMC Rate Decision at 2:15 PM, which is not really a rate decision, as federal funds rates are permanently stuck at ZERO, but the world expects to hear details on just how quickly the Fed is going to finish off the US economy through inflation, otherwise known as QE2, or, printing gazillions of dollars with nothing backing them.
Best guess moving forward is the Republicans gain control of the House, nothing changes, but the Fed produces runaway inflation in food, fuel and utilities, further crushing the middle class. Stocks will go to the moon, but the economy will be dead with unemployment approaching 25%.
There's a way out, but it requires a thinking, functioning populace that isn't dependent on the government for anything. Considering the 47 million people already on food stamps and even more on some form of government assistance (along the lines of 50% of the population), hope is fading fast.
Every man for himself? Could be.
Wednesday, June 30, 2010
A Rush to the Exits at Quarter's End
On the final day of trading for the second quarter - the midpoint of the year - traders and investors took a look back on what has gone before and peered into an uncertain future.
By the end of the day, their assessment was clear: this is no time to be heavily invested in equities. Thus, in the final hour of trading, all of the major US indices took a severe turn to the downside finishing the day - and the quarter - with what turned from a trickle into a complete rout.
Stocks had held their own through most of the session, trading slightly above the unchanged mark for the most part, but, when it came down to concrete buying or selling decisions, everybody hit the sell button nearly simultaneously. A delay of a few moments could cost thousands, or even millions, of dollars, so once the trend was in place after 3:15 pm, the volume increased and near panic ensued. Only a serious effort in the final fifteen minutes - most likely by the PPT and some delighted short-sellers covering positions for the day - kept the markets from melting down completely.
Even as rescuers came to aid at the close, the Dow finished with a new closing low for the year, finally coming to rest on a number it hasn't seen since November 3, 2009, nearly 8 months ago.
The consensus opinion for the first half of 2010: Not so good. Prospects for the second half: Disturbingly downbeat. It's as though both the soprano and tenor each caught a cold nearing intermission of an opera.
Dow 9,774.02, -96.28 (0.98%)
NASDAQ 2,109.24, -25.94 (1.21%)
S&P 500 1,030.71, -10.53 (1.01%)
NYSE Composite 6,469.66, -50.43 (0.77%)
By day's end decliners buried advancers under the avalanche of late selling, 4127-2385. New lows smashed new highs by a margin nearly equal to yesterday's, 295-103. Volume, which had been on the light side most of the day, was so concentrated in the final hour that it ended up being just about normal, evan a bit on the heavy side.
NASDAQ Volume 2,212,934,750
NYSE Volume 5,968,454,500
For the second straight session, oil was down while gold was up, this time joined by silver prices, which increased eight cents, to $18.67. Gold managed a gain of $3.50, to close at $1,245.50, while oil slipped back another 61 cents, to $75.63, the lowest level in two weeks.
Weighing on the market - in addition to the world of woes already known - was the ADP Private Employment report for June, which showed a gain of just 13,000 jobs in the month, a number so tiny and so vile as to engender groans of pain from the trading floors.
The report comes two days prior to the highly-anticipated "official" government non-farm payroll report, which had already been expected to be less-than-cheery, but now, with the ADP report in hand, is likely to come in as a complete stinker, just what the markets and the American public don't need.
As for the first half of the year, stocks saw and end to the bear market rally that began in March of '09 and the beginnings of a second leg down, the bottom of which is anybody's guess. Some are calling for markets to sink even further than they did through Fall of 2008 and Winter of 2009, while the more optimistic believe this is only a correction.
The numbers bear neither side any witness, as they are stuck between correction (10%) and primary trend (20%). That stocks would be lower here and for the year as a whole would fall in line with the January barometer, which accurately presages direction about 80% of the time.
Since the end of 2009, the Dow is down 652 points. From it's high of 11,205 (April 26), the drop is a spectacular 1431 points, or -12.75%. The NASDAQ is down 160 points for the year and, from its high of 2530 (April 23) , the decline is 421 points (-16.64%). Everybody's favorite index, the S&P 500, is down a seemingly tame 85 points since the start of the year, but has given up 187 points from the April 23 high of 1217 (-15.37%).
The broadest measure of all, the NYSE Composite, is on the record for being down 414 points on the year, with a drop of 1260 from its high of 7729 on April 14, or a near-bear-market downturn of 16.30%.
With the two broadest gauges - the NASDAQ and NYSE Comp. - taking the biggest percentage hits over a span of a little more than two months, it's no stretch to say that the decline has been both broad and swift. The past two weeks have been particularly brutal. Since June 17, the indices have registered just one gain and eight losing sessions.
The worst of it is that the week isn't yet over, and the economic which carries the most weight, the June non-farm payroll report, won't make an appearance until Friday, though the expectation of a poor showing may already be factored into many trades.
By the end of the day, their assessment was clear: this is no time to be heavily invested in equities. Thus, in the final hour of trading, all of the major US indices took a severe turn to the downside finishing the day - and the quarter - with what turned from a trickle into a complete rout.
Stocks had held their own through most of the session, trading slightly above the unchanged mark for the most part, but, when it came down to concrete buying or selling decisions, everybody hit the sell button nearly simultaneously. A delay of a few moments could cost thousands, or even millions, of dollars, so once the trend was in place after 3:15 pm, the volume increased and near panic ensued. Only a serious effort in the final fifteen minutes - most likely by the PPT and some delighted short-sellers covering positions for the day - kept the markets from melting down completely.
Even as rescuers came to aid at the close, the Dow finished with a new closing low for the year, finally coming to rest on a number it hasn't seen since November 3, 2009, nearly 8 months ago.
The consensus opinion for the first half of 2010: Not so good. Prospects for the second half: Disturbingly downbeat. It's as though both the soprano and tenor each caught a cold nearing intermission of an opera.
Dow 9,774.02, -96.28 (0.98%)
NASDAQ 2,109.24, -25.94 (1.21%)
S&P 500 1,030.71, -10.53 (1.01%)
NYSE Composite 6,469.66, -50.43 (0.77%)
By day's end decliners buried advancers under the avalanche of late selling, 4127-2385. New lows smashed new highs by a margin nearly equal to yesterday's, 295-103. Volume, which had been on the light side most of the day, was so concentrated in the final hour that it ended up being just about normal, evan a bit on the heavy side.
NASDAQ Volume 2,212,934,750
NYSE Volume 5,968,454,500
For the second straight session, oil was down while gold was up, this time joined by silver prices, which increased eight cents, to $18.67. Gold managed a gain of $3.50, to close at $1,245.50, while oil slipped back another 61 cents, to $75.63, the lowest level in two weeks.
Weighing on the market - in addition to the world of woes already known - was the ADP Private Employment report for June, which showed a gain of just 13,000 jobs in the month, a number so tiny and so vile as to engender groans of pain from the trading floors.
The report comes two days prior to the highly-anticipated "official" government non-farm payroll report, which had already been expected to be less-than-cheery, but now, with the ADP report in hand, is likely to come in as a complete stinker, just what the markets and the American public don't need.
As for the first half of the year, stocks saw and end to the bear market rally that began in March of '09 and the beginnings of a second leg down, the bottom of which is anybody's guess. Some are calling for markets to sink even further than they did through Fall of 2008 and Winter of 2009, while the more optimistic believe this is only a correction.
The numbers bear neither side any witness, as they are stuck between correction (10%) and primary trend (20%). That stocks would be lower here and for the year as a whole would fall in line with the January barometer, which accurately presages direction about 80% of the time.
Since the end of 2009, the Dow is down 652 points. From it's high of 11,205 (April 26), the drop is a spectacular 1431 points, or -12.75%. The NASDAQ is down 160 points for the year and, from its high of 2530 (April 23) , the decline is 421 points (-16.64%). Everybody's favorite index, the S&P 500, is down a seemingly tame 85 points since the start of the year, but has given up 187 points from the April 23 high of 1217 (-15.37%).
The broadest measure of all, the NYSE Composite, is on the record for being down 414 points on the year, with a drop of 1260 from its high of 7729 on April 14, or a near-bear-market downturn of 16.30%.
With the two broadest gauges - the NASDAQ and NYSE Comp. - taking the biggest percentage hits over a span of a little more than two months, it's no stretch to say that the decline has been both broad and swift. The past two weeks have been particularly brutal. Since June 17, the indices have registered just one gain and eight losing sessions.
The worst of it is that the week isn't yet over, and the economic which carries the most weight, the June non-farm payroll report, won't make an appearance until Friday, though the expectation of a poor showing may already be factored into many trades.
Thursday, June 3, 2010
Amidst Confusion, NASDAQ Gains; Jobs Data Looms
There are more than just a few trades riding on the release of tomorrow's BLS non farm payroll report for May. Estimates for the number of jobs created in the US economy during the month run the gamut from 250,000 to 600,000, the latter number suggested as a best guess by the intrepid mind of Jan Hatzius at Goldman Sachs, who has a history of being generally close, often far off, but almost always too optimistic.
The Hatzius estimate is anecdotally cute, in that he calls for private sector job growth of just 150,000, with the rest of the number comprised of temporary census hires.
A couple of hints as to how strong the job growth was during the month came from a few sources. On Wednesday, both President Obama and Vice President Biden hinted strongly in separate speeches that the figures would be substantial, but on Thursday, two real pieces of economic data, the ADP private sector report [PDF] and the weekly report of new and continuing unemployment claims, suggested something of the opposite.
The ADP report, which is generally reliable to be as accurate or even moreso than the overly-massaged government figures, pegged private sector job growth for May at a fairly tepid 55,000. Initial unemployment claims came in at 453,000, still stubbornly high, with continuing claims at 4.67 million, a staggering figure and suggestive that job creation simply isn't occurring in the private sector, or at least that permanent jobs are not being created.
Meanwhile, pesky problems such as the European debt crisis, the Gulf of Mexico oil slick, and China canceling a planned trip to the country by US Secretary of Defense Robert Gates, dogged investors throughout the session.
Stocks zig-zagged all over the map, with internals reflecting the rocky trading. The Dow was up 65 points early, down 75 points by midday, and rallied off the lows into the close for a fairly flat trade. The NASDAQ demonstrated leadership in energy and tech shares, the index positive throughout the session.
The NASDAQ is also the only one of the majors to show positive returns for the year.
Dow 10,255.28, +5.74 (0.06%)
NASDAQ 2,303.03, +21.96 (0.96%)
S&P 500 1,102.83, +4.45 (0.41%)
NYSE Composite 6,860.43, +20.82 (0.30%)
By the end of the session, advancers held a solid advantage over declining issues, 5015-2447, and new highs took back the edge over new lows, 154-70. Volume was light once again, as many traders have stepped away in advance of the non farm payroll report.
NYSE Volume 5,404,948,000.00
NASDAQ Volume 2,063,167,375.00
Commodities were mixed. Crude oil for July delivery gained $1.75, to $74.61, on a government report that showed a decrease in supply. The oddity of the oil market is its apparent one-way bias. During the winter, when the same weekly report as today's continually showed excess supply, the price advanced regardless. With supply down, it's logical for prices to rise, though the opposite should be true on oversupply, but it isn't.
Gold fell sharply, down one percent, or $12.30, to $1,208.30. Silver also lost ground, giving up 38 cents, to settle at $17.92.
As is usually the case the first week of any month, too much emphasis is being placed on the jobs data, especially considering that the numbers coming from government are often wildly off-the-mark and subject to massive revisions in future months.
After Wednesday's huge run-up and the flatness of Thursday's trade, it appears that a robust number has already been priced in, and traders could be in for a rout. The alternative, under consideration that the jobs numbers come in solid or surprisingly better than expected, is for investors and momentum players to swing sentiment to wildly optimistic and end the week with another mammoth gain.
Either scenario could emerge, though this may prove to be the economy's last stand before more realistic data confirms or denies the existence of any kind of recovery. From what's been shown thus far, the billions and trillions of dollars thrown into stimulus and for the sake of saving numerous financial institutions has produced at best a weak rebound.
The Hatzius estimate is anecdotally cute, in that he calls for private sector job growth of just 150,000, with the rest of the number comprised of temporary census hires.
A couple of hints as to how strong the job growth was during the month came from a few sources. On Wednesday, both President Obama and Vice President Biden hinted strongly in separate speeches that the figures would be substantial, but on Thursday, two real pieces of economic data, the ADP private sector report [PDF] and the weekly report of new and continuing unemployment claims, suggested something of the opposite.
The ADP report, which is generally reliable to be as accurate or even moreso than the overly-massaged government figures, pegged private sector job growth for May at a fairly tepid 55,000. Initial unemployment claims came in at 453,000, still stubbornly high, with continuing claims at 4.67 million, a staggering figure and suggestive that job creation simply isn't occurring in the private sector, or at least that permanent jobs are not being created.
Meanwhile, pesky problems such as the European debt crisis, the Gulf of Mexico oil slick, and China canceling a planned trip to the country by US Secretary of Defense Robert Gates, dogged investors throughout the session.
Stocks zig-zagged all over the map, with internals reflecting the rocky trading. The Dow was up 65 points early, down 75 points by midday, and rallied off the lows into the close for a fairly flat trade. The NASDAQ demonstrated leadership in energy and tech shares, the index positive throughout the session.
The NASDAQ is also the only one of the majors to show positive returns for the year.
Dow 10,255.28, +5.74 (0.06%)
NASDAQ 2,303.03, +21.96 (0.96%)
S&P 500 1,102.83, +4.45 (0.41%)
NYSE Composite 6,860.43, +20.82 (0.30%)
By the end of the session, advancers held a solid advantage over declining issues, 5015-2447, and new highs took back the edge over new lows, 154-70. Volume was light once again, as many traders have stepped away in advance of the non farm payroll report.
NYSE Volume 5,404,948,000.00
NASDAQ Volume 2,063,167,375.00
Commodities were mixed. Crude oil for July delivery gained $1.75, to $74.61, on a government report that showed a decrease in supply. The oddity of the oil market is its apparent one-way bias. During the winter, when the same weekly report as today's continually showed excess supply, the price advanced regardless. With supply down, it's logical for prices to rise, though the opposite should be true on oversupply, but it isn't.
Gold fell sharply, down one percent, or $12.30, to $1,208.30. Silver also lost ground, giving up 38 cents, to settle at $17.92.
As is usually the case the first week of any month, too much emphasis is being placed on the jobs data, especially considering that the numbers coming from government are often wildly off-the-mark and subject to massive revisions in future months.
After Wednesday's huge run-up and the flatness of Thursday's trade, it appears that a robust number has already been priced in, and traders could be in for a rout. The alternative, under consideration that the jobs numbers come in solid or surprisingly better than expected, is for investors and momentum players to swing sentiment to wildly optimistic and end the week with another mammoth gain.
Either scenario could emerge, though this may prove to be the economy's last stand before more realistic data confirms or denies the existence of any kind of recovery. From what's been shown thus far, the billions and trillions of dollars thrown into stimulus and for the sake of saving numerous financial institutions has produced at best a weak rebound.
Wednesday, June 2, 2010
Stocks Surging in Advance of Jobs, Retail Data
Apparently, market participants are of a mind that upcoming jobs reports, in the form of the May ADP private sector report, Thursday's usual unemployment claims and Friday's BLS non farm payroll report, will outweigh most of the other issues that have been dragging stocks lower recently.
Of course, it could all be a one-day burp in advance of Thursday's retail figures - expected to disappoint - for suckers, or be really nothing at all.
Stocks have been trading in a range, and the only key figure to keep a close eye upon is Dow 11,205.03. That's the most recent closing high, hit back on April 26. If the Dow cannot climb up to and surpass that mark, expect trading to become either range-bound or negative for an extended period. With earnings reports still 5-6 weeks in the future, there needs to be some kind of catalyst, and the gut feeling around here is that the negativity spewing out from the floor of the Gulf of Mexico - in addition to ongoing, overhanging debt fears globally - will be sufficient enough to keep investor optimism constrained.
Today's quick-hit rally, mostly occurring after 2:00 pm, has little meaning in the overall context, especially considering the oversold condition of the market. Another 300-400 points higher on the Dow would not be out of the question over the next two to three weeks, just as a continuation of the downdraft would surprise nobody.
Generally speaking, it's never a good idea to base very much on one day's trading. The remaining days of the week should provide more clarity.
Dow 10,249.54, +225.52 (2.25%)
NASDAQ 2,281.07, +58.74 (2.64%)
S&P 500 1,098.38, +27.67 (2.58%)
NYSE Composite 6,839.54, +178.44 (2.68%)
Advancers climbed all over decliners, 5353-1220, a 9:2 margin, though our tried and true indicator showed that new highs could not overwhelm new lows, which carried the day, 127-105. Though that margin is narrow, the trend of more new lows than new highs indicates that the market is meeting overhead resistance, and that the market is at least fully priced. Volume, low for the session for the fourth day in a row, indicates the lack of conviction, even in spite of today's outsized headline numbers.
NYSE Volume 5,837,430,000
NASDAQ Volume 2,171,016,000
Oil grabbed a negligible bid of 28 cents, gaining to $72.86. Gold sold off by $4.20, finishing in New York at $1,220.60. Silver was lower as well, losing 24 cents, to $18.30.
While today's gains were overall outstanding, they may be nothing more than an overreaction to a paucity of news, much of which has been bad of late. Bulls being what they are, the momentum could last until something comes along to derail it or send prices even higher, mostly a countertrend move inside overall bear market conditions.
There's also some divergence within the various indices. While the Dow and S&P still trade below their 200-day moving averages, the NASDAQ is poised above its 200 day MA. These conditions usually end up favoring the bearish camp in the long run, but the market being as unpredictable an animal as ever walked out of the jungle, anything is possible.
Of course, it could all be a one-day burp in advance of Thursday's retail figures - expected to disappoint - for suckers, or be really nothing at all.
Stocks have been trading in a range, and the only key figure to keep a close eye upon is Dow 11,205.03. That's the most recent closing high, hit back on April 26. If the Dow cannot climb up to and surpass that mark, expect trading to become either range-bound or negative for an extended period. With earnings reports still 5-6 weeks in the future, there needs to be some kind of catalyst, and the gut feeling around here is that the negativity spewing out from the floor of the Gulf of Mexico - in addition to ongoing, overhanging debt fears globally - will be sufficient enough to keep investor optimism constrained.
Today's quick-hit rally, mostly occurring after 2:00 pm, has little meaning in the overall context, especially considering the oversold condition of the market. Another 300-400 points higher on the Dow would not be out of the question over the next two to three weeks, just as a continuation of the downdraft would surprise nobody.
Generally speaking, it's never a good idea to base very much on one day's trading. The remaining days of the week should provide more clarity.
Dow 10,249.54, +225.52 (2.25%)
NASDAQ 2,281.07, +58.74 (2.64%)
S&P 500 1,098.38, +27.67 (2.58%)
NYSE Composite 6,839.54, +178.44 (2.68%)
Advancers climbed all over decliners, 5353-1220, a 9:2 margin, though our tried and true indicator showed that new highs could not overwhelm new lows, which carried the day, 127-105. Though that margin is narrow, the trend of more new lows than new highs indicates that the market is meeting overhead resistance, and that the market is at least fully priced. Volume, low for the session for the fourth day in a row, indicates the lack of conviction, even in spite of today's outsized headline numbers.
NYSE Volume 5,837,430,000
NASDAQ Volume 2,171,016,000
Oil grabbed a negligible bid of 28 cents, gaining to $72.86. Gold sold off by $4.20, finishing in New York at $1,220.60. Silver was lower as well, losing 24 cents, to $18.30.
While today's gains were overall outstanding, they may be nothing more than an overreaction to a paucity of news, much of which has been bad of late. Bulls being what they are, the momentum could last until something comes along to derail it or send prices even higher, mostly a countertrend move inside overall bear market conditions.
There's also some divergence within the various indices. While the Dow and S&P still trade below their 200-day moving averages, the NASDAQ is poised above its 200 day MA. These conditions usually end up favoring the bearish camp in the long run, but the market being as unpredictable an animal as ever walked out of the jungle, anything is possible.
Wednesday, May 5, 2010
Geithner, Bernanke, and PPT Swing into Action
Let's see if we can get this story right for a change.
When the markets opened at 9:30 am in New York, the flood of news could not have been more distressing. Three bank employees lost their lives in Greece, where government employees and other activists openly clashed with police (see video below). European markets were suffering intense losses, ranging between 1.28% (Great Britain) and 3.16% (Greece).
Here in the US, the precursor to the government's monthly non-farm payroll report (due out Friday morning), the monthly ADP private sector employment report [PDF] showed little progress for the month of April, with a mere 32,000 new jobs being created, hardly the kind of news investors are seeking. Hiring simply has not materialized, no matter how many times President Obama says, "we're making progress," or the news media hoists up another flag for economic recovery.
Stock futures trended deeply lower prior to the opening bell, with bond yields falling fast and the US dollar strengthening against the Euro, in particular. Once the trading was underway, stocks were slammed, with the Dow down 107 points in the opening minutes of trade and the NASDAQ falling 42 points, piercing its 50-day moving average.
Apparently, this kind of rational market reaction to bad news was too much for our intrepid clandestine market riggers - the Plunge Protection Team (PPT) - which swung into action less than 15 minutes after the open. Suddenly, markets around the globe began to turn. All of the major indices headed higher, with the Dow actually registering positive numbers by midday.
Eventually, all of the major indices closed at or below their respective 50-day MAs, but that was after the PPT made certain that small investors were skewered and the major banks and financial firms didn't suffer too badly. The government, the media and the Wall Street elite have a vested interest in glad-handing everybody and spreading as much cheer as possible, no matter how bad the economy is. Not only is there a great deal of money at risk, but for the politicians and financiers, their jobs might be lost if the truth be set loose upon the American public.
The downturn is in full force, whether the undercover lever-pullers like it or not. They've been throwing wads of money - in the billions and trillions of dollars - at the economy, with no discernible results. No new jobs are being created and, despite the glowing reports from Wall Street firms, the American middle class is going down the tubes in a very big hurry.
Residential real estate has experienced a momentary pause in its decline, but foreclosures are only being slowed because the banks have too many properties already in their greedy, little hands. They are taking massive losses on a daily basis, but accounting rules manage to hide most of the sins.
As with the slow grind down from October 2007 to September 2008, this stock market decline will not be sudden, thanks to the internal workings of the government agents. It will be slow, because, according to the powers that be, that's better for the American public. Everything must revolve around the election cycle, another crooked enterprise.
Dow 10,868.12, -58.65 (0.54%)
NASDAQ 2,402.29, -21.96 (0.91%)
S&P 500 1,165.87, -7.73 (0.66%)
NYSE Composite 7,258.02, -79.23 (1.08%)
Declining issues beat down advancers, 5100-1510, better than 3:1. New highs bettered new lows by the slimmest margin in over a year, 151-133. When that indicator rolls over, you will know that the rout is on. With the levels so close, now would be a good time to liquidate large portions of your portfolio, because there may little left if you think you can ride the market down or actually believe that "things are getting better."
Volume was at or near its highest level of the year, due, no doubt, to the incredible amount of shares which had to be bought and sold to bring the market back from its early depths.
NYSE Volume 7,701,488,000.00
NASDAQ Volume 2,980,217,000.00
Commodities also turned higher after an early sell-off, though nothing could save the crude oil futures from slipping another $2.77, to $79.97. Just a few days ago, crude was selling for $86/barrel. It's the one hopeful element from deflation at work - food and fuel should become much more affordable.
Gold got a bit of a boost, for reasons unknown, gaining $6.00, to $1,174.60. Silver was beaten down again, dropping 31 cents, to $17.51.
Markets may take a breather on Thursday, though there is the chance that many traders will opt to get out of the way of Friday's non-farm payroll report. Also, there are major elections in Europe over the weekend, so holding for Monday might not be the most-favored play.
Make no doubt about it. Europe is already in tatters. Great Britain is on the brink along with Portugal, Italy, Ireland, Spain, and, of course, Greece, the poster child for socialism's demise. US policy-makers continue down the European path in many regards, especially in terms of public entitlements, unfunded liabilities and rampant, unpayable debt.
Sooner or later, these issues must be addressed. Spending our way out of the mess we're has been already amply proven to be a failed element of Keynesian economics.
Almost forgot: there's a small problem off the southern US coast. Something about an oil leak...
When the markets opened at 9:30 am in New York, the flood of news could not have been more distressing. Three bank employees lost their lives in Greece, where government employees and other activists openly clashed with police (see video below). European markets were suffering intense losses, ranging between 1.28% (Great Britain) and 3.16% (Greece).
Here in the US, the precursor to the government's monthly non-farm payroll report (due out Friday morning), the monthly ADP private sector employment report [PDF] showed little progress for the month of April, with a mere 32,000 new jobs being created, hardly the kind of news investors are seeking. Hiring simply has not materialized, no matter how many times President Obama says, "we're making progress," or the news media hoists up another flag for economic recovery.
Stock futures trended deeply lower prior to the opening bell, with bond yields falling fast and the US dollar strengthening against the Euro, in particular. Once the trading was underway, stocks were slammed, with the Dow down 107 points in the opening minutes of trade and the NASDAQ falling 42 points, piercing its 50-day moving average.
Apparently, this kind of rational market reaction to bad news was too much for our intrepid clandestine market riggers - the Plunge Protection Team (PPT) - which swung into action less than 15 minutes after the open. Suddenly, markets around the globe began to turn. All of the major indices headed higher, with the Dow actually registering positive numbers by midday.
Eventually, all of the major indices closed at or below their respective 50-day MAs, but that was after the PPT made certain that small investors were skewered and the major banks and financial firms didn't suffer too badly. The government, the media and the Wall Street elite have a vested interest in glad-handing everybody and spreading as much cheer as possible, no matter how bad the economy is. Not only is there a great deal of money at risk, but for the politicians and financiers, their jobs might be lost if the truth be set loose upon the American public.
The downturn is in full force, whether the undercover lever-pullers like it or not. They've been throwing wads of money - in the billions and trillions of dollars - at the economy, with no discernible results. No new jobs are being created and, despite the glowing reports from Wall Street firms, the American middle class is going down the tubes in a very big hurry.
Residential real estate has experienced a momentary pause in its decline, but foreclosures are only being slowed because the banks have too many properties already in their greedy, little hands. They are taking massive losses on a daily basis, but accounting rules manage to hide most of the sins.
As with the slow grind down from October 2007 to September 2008, this stock market decline will not be sudden, thanks to the internal workings of the government agents. It will be slow, because, according to the powers that be, that's better for the American public. Everything must revolve around the election cycle, another crooked enterprise.
Dow 10,868.12, -58.65 (0.54%)
NASDAQ 2,402.29, -21.96 (0.91%)
S&P 500 1,165.87, -7.73 (0.66%)
NYSE Composite 7,258.02, -79.23 (1.08%)
Declining issues beat down advancers, 5100-1510, better than 3:1. New highs bettered new lows by the slimmest margin in over a year, 151-133. When that indicator rolls over, you will know that the rout is on. With the levels so close, now would be a good time to liquidate large portions of your portfolio, because there may little left if you think you can ride the market down or actually believe that "things are getting better."
Volume was at or near its highest level of the year, due, no doubt, to the incredible amount of shares which had to be bought and sold to bring the market back from its early depths.
NYSE Volume 7,701,488,000.00
NASDAQ Volume 2,980,217,000.00
Commodities also turned higher after an early sell-off, though nothing could save the crude oil futures from slipping another $2.77, to $79.97. Just a few days ago, crude was selling for $86/barrel. It's the one hopeful element from deflation at work - food and fuel should become much more affordable.
Gold got a bit of a boost, for reasons unknown, gaining $6.00, to $1,174.60. Silver was beaten down again, dropping 31 cents, to $17.51.
Markets may take a breather on Thursday, though there is the chance that many traders will opt to get out of the way of Friday's non-farm payroll report. Also, there are major elections in Europe over the weekend, so holding for Monday might not be the most-favored play.
Make no doubt about it. Europe is already in tatters. Great Britain is on the brink along with Portugal, Italy, Ireland, Spain, and, of course, Greece, the poster child for socialism's demise. US policy-makers continue down the European path in many regards, especially in terms of public entitlements, unfunded liabilities and rampant, unpayable debt.
Sooner or later, these issues must be addressed. Spending our way out of the mess we're has been already amply proven to be a failed element of Keynesian economics.
Almost forgot: there's a small problem off the southern US coast. Something about an oil leak...
Wednesday, March 31, 2010
Employment Data Bangs Stocks
People in the Bronx were probably wondering what that sound was right about 8:15 am, emanating from the financial district across the East River. It was the collective groans of investors heard upon the release of this morning's ADP Private Employment Report [PDF] for March.
The private data compiled by the experts at ADP should be held in much higher regard than the government's overworked and over-adjusted non farms payroll data, though it is not. Too many people have come to the erroneous conclusion that the government data is reliable, when nothing could be further from the truth. ADP, which, unlike the government, has no agenda to promote, offers a clear view of who's hiring, who isn't and in which sectors jobs are either gaining or losing.
This morning's report showed a decline of 23,000 jobs from February to March, and also revised February's loss from 20,000 to 24,000. So, the company has reported a total of 47,000 job losses in the private sector over the past two months.
And we're supposed to be in a recovery. The pundits and promoters on CNBC and in the financial press will tell you that employment is a lagging indicator, but believing in this kind of lag is getting a little bit old, so to speak. The economy "officially" turned the corner out of recession in the third quarter of 2009 (Remember "cash for clunkers?"), so, according to the usually suspect "experts", the US began growing again in July of 2009 and has continued to accelerate, or so we're led to believe.
Third Quarter 2009 GDP, according to the final estimate provided by the BLS, was up 2.2%, and the 4th quarter was up by even more, something on the order of 5.6%, again, according to official government estimates, which begs the question of how an "estimate" can ever be deemed "official."
In any case, it's now been 9 full months since the economy began to "recover,' but nowhere are there new jobs to be found, accentuated by today's ADP report. Many investors are still not going to be convinced that the economy isn't growing until the government data is released on Friday, which happens to be the Christian holiday of Good Friday, thus, the markets will be closed as is the tradition.
Now, when the government comes out with its data, expected to show an increase of anywhere from 75,000 to 300,000 jobs, the real story will be underneath the headline number and it will say that most of the new jobs were temporary Census jobs which will end in August. So, the big question for tomorrow is whether investors will come to their senses and realize that the March jobs number is, in reality, going to be pretty much a stinker, and get out of he way of the coming sell-a-thon, or will they stand fast, close ranks and defend their stakes in corporate America?
The answer will be provided within the next 24 hours, but I'm betting, based on today's down-up-down pattern, that stocks won't be affected too badly, only because our insider friends at Goldman Sachs, JP Morgan, Merrill Lynch and Citigroup will be there to backstop any precipitous decline, to say nothing of the clandestine work of the PPP.
It should be fun to watch, but, the truth of the matter is that jobs aren't gaining, and 9 months is an awful long LAG, somewhat unbelievable.
Dow 10,856.63, -50.79 (0.47%)
NASDAQ 2,397.96, -12.73 (0.53%)
S&P 500 1,169.43, -3.84 (0.33%)
NYSE Composite 7,447.80, -12.92 (0.17%)
Declining issues laid all over advancers, 3885-2575. New highs: 337; new lows: 52. Nothing unusual there, but volume was a bit higher than normal, an ominous sign for the Bulls.
NYSE Volume 5,221,368,500
NASDAQ Volume 2,398,859,000
Commodity traders may be in an even deeper state of denial than equity traders. Oil for May delivery rose another $1.39 today, to $83.76. Gold gained $8.80, to $1,113.30 and silver was up 20 cents, to $17.51.
This is where it gets tricky. The dollar index was down pretty sharply on the jobs report, which pushed commodity prices higher, though it's a fool's trade, because there's simply slack demand, no inflation and therefore, all asset classes should be discounted, not appreciated. The US dollar will rise and fall in the currency markets for a boatload of different reasons, most of them speculative, but the deflationary spiral continues unabated.
For a better perspective, US treasury bonds offer some clues, as they were driven higher today, pushing down yields, a natural occurrence following a weak economic report. The bond market is screaming double-dip, while the commodity and equity markets - which require much less discipline - are still lining up on the side of economic recovery. They both can't be right, and the smart money would side with the bond sellers, who must demand more in a weakened situation.
The US is in better shape than Europe, though not by much. Probably the best places outside the US to put money to work would be Brazil or India, whose economies at somewhat detached from the US-Europe-China triad.
The private data compiled by the experts at ADP should be held in much higher regard than the government's overworked and over-adjusted non farms payroll data, though it is not. Too many people have come to the erroneous conclusion that the government data is reliable, when nothing could be further from the truth. ADP, which, unlike the government, has no agenda to promote, offers a clear view of who's hiring, who isn't and in which sectors jobs are either gaining or losing.
This morning's report showed a decline of 23,000 jobs from February to March, and also revised February's loss from 20,000 to 24,000. So, the company has reported a total of 47,000 job losses in the private sector over the past two months.
And we're supposed to be in a recovery. The pundits and promoters on CNBC and in the financial press will tell you that employment is a lagging indicator, but believing in this kind of lag is getting a little bit old, so to speak. The economy "officially" turned the corner out of recession in the third quarter of 2009 (Remember "cash for clunkers?"), so, according to the usually suspect "experts", the US began growing again in July of 2009 and has continued to accelerate, or so we're led to believe.
Third Quarter 2009 GDP, according to the final estimate provided by the BLS, was up 2.2%, and the 4th quarter was up by even more, something on the order of 5.6%, again, according to official government estimates, which begs the question of how an "estimate" can ever be deemed "official."
In any case, it's now been 9 full months since the economy began to "recover,' but nowhere are there new jobs to be found, accentuated by today's ADP report. Many investors are still not going to be convinced that the economy isn't growing until the government data is released on Friday, which happens to be the Christian holiday of Good Friday, thus, the markets will be closed as is the tradition.
Now, when the government comes out with its data, expected to show an increase of anywhere from 75,000 to 300,000 jobs, the real story will be underneath the headline number and it will say that most of the new jobs were temporary Census jobs which will end in August. So, the big question for tomorrow is whether investors will come to their senses and realize that the March jobs number is, in reality, going to be pretty much a stinker, and get out of he way of the coming sell-a-thon, or will they stand fast, close ranks and defend their stakes in corporate America?
The answer will be provided within the next 24 hours, but I'm betting, based on today's down-up-down pattern, that stocks won't be affected too badly, only because our insider friends at Goldman Sachs, JP Morgan, Merrill Lynch and Citigroup will be there to backstop any precipitous decline, to say nothing of the clandestine work of the PPP.
It should be fun to watch, but, the truth of the matter is that jobs aren't gaining, and 9 months is an awful long LAG, somewhat unbelievable.
Dow 10,856.63, -50.79 (0.47%)
NASDAQ 2,397.96, -12.73 (0.53%)
S&P 500 1,169.43, -3.84 (0.33%)
NYSE Composite 7,447.80, -12.92 (0.17%)
Declining issues laid all over advancers, 3885-2575. New highs: 337; new lows: 52. Nothing unusual there, but volume was a bit higher than normal, an ominous sign for the Bulls.
NYSE Volume 5,221,368,500
NASDAQ Volume 2,398,859,000
Commodity traders may be in an even deeper state of denial than equity traders. Oil for May delivery rose another $1.39 today, to $83.76. Gold gained $8.80, to $1,113.30 and silver was up 20 cents, to $17.51.
This is where it gets tricky. The dollar index was down pretty sharply on the jobs report, which pushed commodity prices higher, though it's a fool's trade, because there's simply slack demand, no inflation and therefore, all asset classes should be discounted, not appreciated. The US dollar will rise and fall in the currency markets for a boatload of different reasons, most of them speculative, but the deflationary spiral continues unabated.
For a better perspective, US treasury bonds offer some clues, as they were driven higher today, pushing down yields, a natural occurrence following a weak economic report. The bond market is screaming double-dip, while the commodity and equity markets - which require much less discipline - are still lining up on the side of economic recovery. They both can't be right, and the smart money would side with the bond sellers, who must demand more in a weakened situation.
The US is in better shape than Europe, though not by much. Probably the best places outside the US to put money to work would be Brazil or India, whose economies at somewhat detached from the US-Europe-China triad.
Tuesday, March 2, 2010
Stuck In Neutral
By tomorrow morning's opening bell, there will be some sense of direction, and that sense is likely - based on observations from market sources - to be lower. The reason stocks may not be such good buys as of tomorrow morning is fear that Friday's non-farm payroll data for February will disappoint, and that tomorrow morning's 8:30 am ET release of ADP's private payroll figure will offer a sneak preview.
The Obama administration, rather than actually trying to mend the broken employment conditions in the US, has been resorting lately to downplaying expectations, which can only mean that Friday's numbers will be somewhere below estimates of the economy shedding 20-45,000 jobs. Some have actually suggested that the figure could fall into a range of 175-200,000 more job losses, of which the Obamanites will claim had much to do with recent snowstorms that plagued the Northeast through the month.
Well, if there's anything politicians can do well, it's disappoint, and blame it on the weather. Snowstorms, hurricanes, droughts, windy conditions do not affect a stable employment picture, and what we've got is an unstable one. Add to that the utter incompetence at the top - not only the administration, but congress as well, and there's a sure recipe for disaster.
In the meantime, investors and traders marked time in anticipation of the results. Wednesday's warm-up with the ADP report will surely shed some light; how much is unknown, though the gauge, issued at the beginning of each month two days prior to the government data, has proven highly reliable in its short life (less than a year).
Dow 10,405.98, +2.19 (0.02%)
NASDAQ 2,280.79, +7.22 (0.32%)
S&P 500 1,118.31, +2.60 (0.23%)
NYSE Compos 7,135.97, +35.22 (0.50%)
Making the tiny headline numbers appear understated, gainers outpaced losers on the day by a good spread, 4477-2023, better than 2:1. The number of new highs was once again elevated, at 624; there were only 48 new lows. Those number will change dramatically by the end of the month, more than likely in favor of new lows. Volume on the session was very strong on the NASDAQ, not so good on the NYSE.
NYSE Volume 4,788,700,000
NASDAQ Volume 2,683,460,000
Commodities are once again acting like demand is robust, though the current price regime is more about trading, seasonality and short-term profits rather than real supply-demand metrics. Oil was up $1.02, to $79.72. Gold gained $19.00, to $1,137.30, while silver shot up 59 cents, to $17.06. While pricing in the energy complex can be chalked up to seasonal conditions (doesn't fuel always go up when people drive more in the Spring?), the metals are retracing their gains from last year in a technical move that probably will end up pushing against new highs. At some point, gold investors will realize that their precious metal is in just another bubble, created by speculators and quick-buck artists. After rising for nine straight years, gold's price is reflective of two things: greed, and widespread distrust of current monetary and fiscal policies of countries using fiat currencies.
If the detractors of floating exchange rates, the Euro experiment and gobs of debt around the world are correct, the precious metals will be even more so in months and years ahead. The wild card in their calculations, however, is global deflation, which would undermine almost any asset, including gold, silver and platinum. Time will tell.
The Obama administration, rather than actually trying to mend the broken employment conditions in the US, has been resorting lately to downplaying expectations, which can only mean that Friday's numbers will be somewhere below estimates of the economy shedding 20-45,000 jobs. Some have actually suggested that the figure could fall into a range of 175-200,000 more job losses, of which the Obamanites will claim had much to do with recent snowstorms that plagued the Northeast through the month.
Well, if there's anything politicians can do well, it's disappoint, and blame it on the weather. Snowstorms, hurricanes, droughts, windy conditions do not affect a stable employment picture, and what we've got is an unstable one. Add to that the utter incompetence at the top - not only the administration, but congress as well, and there's a sure recipe for disaster.
In the meantime, investors and traders marked time in anticipation of the results. Wednesday's warm-up with the ADP report will surely shed some light; how much is unknown, though the gauge, issued at the beginning of each month two days prior to the government data, has proven highly reliable in its short life (less than a year).
Dow 10,405.98, +2.19 (0.02%)
NASDAQ 2,280.79, +7.22 (0.32%)
S&P 500 1,118.31, +2.60 (0.23%)
NYSE Compos 7,135.97, +35.22 (0.50%)
Making the tiny headline numbers appear understated, gainers outpaced losers on the day by a good spread, 4477-2023, better than 2:1. The number of new highs was once again elevated, at 624; there were only 48 new lows. Those number will change dramatically by the end of the month, more than likely in favor of new lows. Volume on the session was very strong on the NASDAQ, not so good on the NYSE.
NYSE Volume 4,788,700,000
NASDAQ Volume 2,683,460,000
Commodities are once again acting like demand is robust, though the current price regime is more about trading, seasonality and short-term profits rather than real supply-demand metrics. Oil was up $1.02, to $79.72. Gold gained $19.00, to $1,137.30, while silver shot up 59 cents, to $17.06. While pricing in the energy complex can be chalked up to seasonal conditions (doesn't fuel always go up when people drive more in the Spring?), the metals are retracing their gains from last year in a technical move that probably will end up pushing against new highs. At some point, gold investors will realize that their precious metal is in just another bubble, created by speculators and quick-buck artists. After rising for nine straight years, gold's price is reflective of two things: greed, and widespread distrust of current monetary and fiscal policies of countries using fiat currencies.
If the detractors of floating exchange rates, the Euro experiment and gobs of debt around the world are correct, the precious metals will be even more so in months and years ahead. The wild card in their calculations, however, is global deflation, which would undermine almost any asset, including gold, silver and platinum. Time will tell.
Wednesday, January 6, 2010
Investors Awaiting Friday Jobs Data; Markets Churn
Another day passed on Wall Street with little or no movement in the major indices. Topping the outlook was anticipation of December Non-farm Payroll data, due out Friday morning, January 8, prior to the opening bell. A glimpse of what the numbers may look like was provided by the monthly private payroll report by ADP, which showed employers shedding another 84,000 jobs during December, a figure much improved over November's -145,000.
Considering that November Non-farm payrolls came in at the best levels in 16 months, showing a loss of only 11,000 jobs, the ADP report should have been reassuring to anyone looking for a better employment picture on Friday. Expectations are that the government will show a loss of between 25,000 and 45,000 jobs, though estimates are ranging even into positive territory. Much depends on prior month revisions, and also the method by which the december figures are compiled.
Some private sources contend that the government figures are fudged for political purposes, which would not be beyond imagination, while others point out that the raw numbers do not include the hordes of workers who have exhausted unemployment benefits and are no longer counted. True unemployment, including distressed workers, is estimated to be closer to 18% than the 10% with which the government has been flirting.
In any case, traders seemed tenuous with stocks trading in narrow ranges for the second straight day. While the NASDAQ finished in the red, the other major indices all posted positive numbers, though their gains were marginal, at best.
Dow 10,573.68, +1.66 (0.02%)
Nasdaq 2,301.09, -7.62 (0.33%)
S&P 500 1,137.14, +0.62 (0.05%)
NYSE Composite 7,377.70, +22.83 (0.31%)
Gainers edged out losers on the day, by roughly the same margin as Tuesday, 3548-2965. Once more, new highs seemed to be topping out, with 798 stocks reaching 52-week highs, while only 73 made new lows. Volume was solid again, though considering how little movement there was, churning was the operative word to describe the session. People are still waiting for unemployment data and further out, earnings reports.
NYSE Volume 5,517,178,000
Nasdaq Volume 2,269,902,500
Commodity prices were sharply higher, as oil reached another 15-month peak, gaining $1.41, to $83.18 per barrel. Gold soared another $18.30, to $1,137.00, while silver bounded ahead another 38 cents, to $18.18.
The signal coming from commodity traders is that of recovery and inflation, though equity participants are being cautious on the same news, figuring that those two economic elements will force the Fed to raise rates sooner, rather than later. The widespread consensus is that any rate hikes before June will kill off the rally, now in it's 10th month.
Considering that November Non-farm payrolls came in at the best levels in 16 months, showing a loss of only 11,000 jobs, the ADP report should have been reassuring to anyone looking for a better employment picture on Friday. Expectations are that the government will show a loss of between 25,000 and 45,000 jobs, though estimates are ranging even into positive territory. Much depends on prior month revisions, and also the method by which the december figures are compiled.
Some private sources contend that the government figures are fudged for political purposes, which would not be beyond imagination, while others point out that the raw numbers do not include the hordes of workers who have exhausted unemployment benefits and are no longer counted. True unemployment, including distressed workers, is estimated to be closer to 18% than the 10% with which the government has been flirting.
In any case, traders seemed tenuous with stocks trading in narrow ranges for the second straight day. While the NASDAQ finished in the red, the other major indices all posted positive numbers, though their gains were marginal, at best.
Dow 10,573.68, +1.66 (0.02%)
Nasdaq 2,301.09, -7.62 (0.33%)
S&P 500 1,137.14, +0.62 (0.05%)
NYSE Composite 7,377.70, +22.83 (0.31%)
Gainers edged out losers on the day, by roughly the same margin as Tuesday, 3548-2965. Once more, new highs seemed to be topping out, with 798 stocks reaching 52-week highs, while only 73 made new lows. Volume was solid again, though considering how little movement there was, churning was the operative word to describe the session. People are still waiting for unemployment data and further out, earnings reports.
NYSE Volume 5,517,178,000
Nasdaq Volume 2,269,902,500
Commodity prices were sharply higher, as oil reached another 15-month peak, gaining $1.41, to $83.18 per barrel. Gold soared another $18.30, to $1,137.00, while silver bounded ahead another 38 cents, to $18.18.
The signal coming from commodity traders is that of recovery and inflation, though equity participants are being cautious on the same news, figuring that those two economic elements will force the Fed to raise rates sooner, rather than later. The widespread consensus is that any rate hikes before June will kill off the rally, now in it's 10th month.
Wednesday, July 1, 2009
Stocks Start 3rd Quarter with Modest Gains
After closing out what was a very good quarter with a final bummer of a day, investors toed the waters at the opening of the third quarter, nibbling at positions in a very slow session. Stocks finished with solid gains on low volume, after a slew of economic reports showed the economy remaining in the throes of recession, though clearly not in as rough shape as 3 to 6 months ago.
The Chicago Purchasing Manager's Index (PMI) was up sharply in June, to 39.9, after a reading of 34.9 in May. Still, the number was well below 50, which is the threshold for expansion. The report confirmed continued weakness in manufacturing, though slightly improved on a month-to-month basis.
The Institute for Supply Management (ISM) index was also up in June, with a reading of 44.8 following a 42.8 number in May.
Construction spending for May was off 0.9%, offsetting a gain of 0.6% in the prior month. Pending home sales were up a marginal 0.1% in May, after April's surprisingly good showing of a 7.1% gain.
Finally, the ADP Employment Report [PDF}, an unbiased snapshot of the private labor market, recorded a loss of 473,000 jobs in May, slightly better than the 485,000 jobs lost in May.
With all that to chew on, stocks were up sharply right out of the gate, but peaked early in the day. After 10:30 am, the major indices lost value for the remainder of the session.
Dow 8,504.06, +57.06 (0.68%)
NASDAQ 1,845.72, +10.68 (0.58%)
S&P 500 923.31, +3.99 (0.43%)
NYSE Composite 5,953.82, +48.67 (0.82%)
Advancing issues took back the initiative over decliners, beating them, 4476-1870. New highs outnumbered new lows, 74-62, but volume was depressingly low, not uncommon in a holiday-shortened week. The markets will be closed on Friday.
NYSE Volume 950,845,000
NASDAQ Volume 2,000,025,000
Crude oil futures fell 58 cents, to $69.31, after the government reported a build in gasoline inventory of as much as 2.3 million barrels. That kind of data could spark a real rout in oil futures, as prices traditionally peak nearing the 4th of july holiday. With that much of a glut on the market and the economy generally weak, demand for oil and gas may remain slack for months, cutting into prices. One would normally think that in a true open market, but the futures market is anything but, dominated by hedge funds and large traders who can exert enormous control over price movements.
Gold shot up $13.90, to $941.30, while silver tacked on 16 cents, to $13.76.
The Commerce Department releases June Non-farm payroll data tomorrow morning prior to the market open. With the ADP figures already in hand, the government's massaged figures may prove anti-climactic. Still, we're off and running in the quarter which was promised to be the one in which recovery really began. There are still signs that the recession is easing off, but actual recovery may still be as many as 6 months away, if not more. Investors may find themselves hoping for more than companies can deliver, though there have been reports of analysts raising estimates for a large number of companies. If they can meet those numbers, stocks could actually advance further. We are now in the 23rd month of the bear market, so a turn could actually occur at any time, though I'd hedge my bets against it. Another sharp decline, and possibly a retest of the March lows are probably more likely.
The Chicago Purchasing Manager's Index (PMI) was up sharply in June, to 39.9, after a reading of 34.9 in May. Still, the number was well below 50, which is the threshold for expansion. The report confirmed continued weakness in manufacturing, though slightly improved on a month-to-month basis.
The Institute for Supply Management (ISM) index was also up in June, with a reading of 44.8 following a 42.8 number in May.
Construction spending for May was off 0.9%, offsetting a gain of 0.6% in the prior month. Pending home sales were up a marginal 0.1% in May, after April's surprisingly good showing of a 7.1% gain.
Finally, the ADP Employment Report [PDF}, an unbiased snapshot of the private labor market, recorded a loss of 473,000 jobs in May, slightly better than the 485,000 jobs lost in May.
With all that to chew on, stocks were up sharply right out of the gate, but peaked early in the day. After 10:30 am, the major indices lost value for the remainder of the session.
Dow 8,504.06, +57.06 (0.68%)
NASDAQ 1,845.72, +10.68 (0.58%)
S&P 500 923.31, +3.99 (0.43%)
NYSE Composite 5,953.82, +48.67 (0.82%)
Advancing issues took back the initiative over decliners, beating them, 4476-1870. New highs outnumbered new lows, 74-62, but volume was depressingly low, not uncommon in a holiday-shortened week. The markets will be closed on Friday.
NYSE Volume 950,845,000
NASDAQ Volume 2,000,025,000
Crude oil futures fell 58 cents, to $69.31, after the government reported a build in gasoline inventory of as much as 2.3 million barrels. That kind of data could spark a real rout in oil futures, as prices traditionally peak nearing the 4th of july holiday. With that much of a glut on the market and the economy generally weak, demand for oil and gas may remain slack for months, cutting into prices. One would normally think that in a true open market, but the futures market is anything but, dominated by hedge funds and large traders who can exert enormous control over price movements.
Gold shot up $13.90, to $941.30, while silver tacked on 16 cents, to $13.76.
The Commerce Department releases June Non-farm payroll data tomorrow morning prior to the market open. With the ADP figures already in hand, the government's massaged figures may prove anti-climactic. Still, we're off and running in the quarter which was promised to be the one in which recovery really began. There are still signs that the recession is easing off, but actual recovery may still be as many as 6 months away, if not more. Investors may find themselves hoping for more than companies can deliver, though there have been reports of analysts raising estimates for a large number of companies. If they can meet those numbers, stocks could actually advance further. We are now in the 23rd month of the bear market, so a turn could actually occur at any time, though I'd hedge my bets against it. Another sharp decline, and possibly a retest of the March lows are probably more likely.
Wednesday, June 3, 2009
Critical Turn for US Markets
Today marked a potentially critical turn for US equity markets, from a strict interpretation of a key indicator, that being the new highs - new lows measure.
On Monday and Tuesday, new highs surpassed new lows on the daily tally for the first time in six months. New lows have held the edge every day since September of 2007, save for five or six occasions. On those occasions in which new highs surpassed new lows during this period, once new lows took back the lead, stocks fell for a time until the new lows were 25-100 times the number of new highs, at which point a bottom was reached in the market.
Today, there were 50 new lows to 48 new highs, a technical win for the lows, indicating that a market turn is at hand. This is the strongest selling indicator that has been seen in the past three months. While it's obvious that stocks are severely overbought and have been for weeks, this sole indicator is all that's needed to predict the immediate future for stocks. They are ready to roll over and die. The extend of the carnage cannot be known, but within the next 3-6 trading days, there will be dramatic movement to the downside.
Market action today was somewhat hidden, though the real damage was done on the NYSE Composite, the largest index, and the one least prone to manipulation. While losses on the three majors were limited, the Composite was down 2.41%, nearly twice that of the S&P, three times the decline of the Dow and triple the NASDAQ on a percentage basis.
Dow 8,675.24, -65.63 (0.75%)
NASDAQ 1,825.92, -10.88 (0.59%)
S&P 500 931.76, -12.98 (1.37%)
NYSE Composite 6,033.90, -148.97 (2.41)
Declining issues far outpaced advancing ones, 4346-2059. That is a significant number, much moreso than the feeble tape-painting attempt on the Dow, which had been down as much as 140 points at 3:30 pm. Of course, the manipulators in the market made sure to limit the damage with a 75-point rally in the final half hour. It should be disregarded, as should every index, as they are absurdly valued at present. Consider that the Dow is still more than 2000 points higher than it was less than three months ago. The game is nearly up. Savvy investors will be locking in profits very soon as waves of selling are set to hit the market. Volume was on the low side, but still meaningless. The warmer weather and shakiness of the markets have removed many participants.
NYSE Volume 1,323,971,000
NASDAQ Volume 2,320,685,000
Commodities may have telegraphed the next move in stocks. After weeks of rallying, nearly all commodities sold off on the day, indicating that speculators are scurrying for safer havens in bonds and money markets. The catalyst may have been the ADP Employment Change report, which showed a loss of 532,000 private sector jobs lost in May, and also revised April from a loss of 491,000 to a 545,000 job loss. With the official Labor Department Non-Farms Payroll report for May due out prior to the market open on Friday, there is every possibility that the report will show further deterioration in the US employment market, not "incremental improvement" as the media and government officials have been touting.
Oil dropped $2.43, to settle at $66.12. Gold dipped $18.80, falling to $965.60. Even silver, the strongest commodity over the past three weeks, fell 65 cents, to $15.31 per ounce. Almost every commodity, from energy-related to foodstuffs, fell hard on the day. The grip of deflation is unmistakable.
There's another tsunami dead ahead. Government efforts to revive the economy have been minimal at best, and potentially harmful, at worst. Investors are nervous and big money is heading for the hills. Despite the positive spin which the government and media have tried to put on the economic picture, the reality is that the US economy is not gong to recover any time soon.
Look for sideways-down movement over the coming weeks, peppered with a couple of major downside days, with the Dow registering 200-400 point losses. Once the selling begins, it will not be easily stopped. The banks and their TARP money are pulling out - they have to - before they are stuck with losing positions. Before that happens they will unload on retail investors.
Happy days? Not for bulls.
On Monday and Tuesday, new highs surpassed new lows on the daily tally for the first time in six months. New lows have held the edge every day since September of 2007, save for five or six occasions. On those occasions in which new highs surpassed new lows during this period, once new lows took back the lead, stocks fell for a time until the new lows were 25-100 times the number of new highs, at which point a bottom was reached in the market.
Today, there were 50 new lows to 48 new highs, a technical win for the lows, indicating that a market turn is at hand. This is the strongest selling indicator that has been seen in the past three months. While it's obvious that stocks are severely overbought and have been for weeks, this sole indicator is all that's needed to predict the immediate future for stocks. They are ready to roll over and die. The extend of the carnage cannot be known, but within the next 3-6 trading days, there will be dramatic movement to the downside.
Market action today was somewhat hidden, though the real damage was done on the NYSE Composite, the largest index, and the one least prone to manipulation. While losses on the three majors were limited, the Composite was down 2.41%, nearly twice that of the S&P, three times the decline of the Dow and triple the NASDAQ on a percentage basis.
Dow 8,675.24, -65.63 (0.75%)
NASDAQ 1,825.92, -10.88 (0.59%)
S&P 500 931.76, -12.98 (1.37%)
NYSE Composite 6,033.90, -148.97 (2.41)
Declining issues far outpaced advancing ones, 4346-2059. That is a significant number, much moreso than the feeble tape-painting attempt on the Dow, which had been down as much as 140 points at 3:30 pm. Of course, the manipulators in the market made sure to limit the damage with a 75-point rally in the final half hour. It should be disregarded, as should every index, as they are absurdly valued at present. Consider that the Dow is still more than 2000 points higher than it was less than three months ago. The game is nearly up. Savvy investors will be locking in profits very soon as waves of selling are set to hit the market. Volume was on the low side, but still meaningless. The warmer weather and shakiness of the markets have removed many participants.
NYSE Volume 1,323,971,000
NASDAQ Volume 2,320,685,000
Commodities may have telegraphed the next move in stocks. After weeks of rallying, nearly all commodities sold off on the day, indicating that speculators are scurrying for safer havens in bonds and money markets. The catalyst may have been the ADP Employment Change report, which showed a loss of 532,000 private sector jobs lost in May, and also revised April from a loss of 491,000 to a 545,000 job loss. With the official Labor Department Non-Farms Payroll report for May due out prior to the market open on Friday, there is every possibility that the report will show further deterioration in the US employment market, not "incremental improvement" as the media and government officials have been touting.
Oil dropped $2.43, to settle at $66.12. Gold dipped $18.80, falling to $965.60. Even silver, the strongest commodity over the past three weeks, fell 65 cents, to $15.31 per ounce. Almost every commodity, from energy-related to foodstuffs, fell hard on the day. The grip of deflation is unmistakable.
There's another tsunami dead ahead. Government efforts to revive the economy have been minimal at best, and potentially harmful, at worst. Investors are nervous and big money is heading for the hills. Despite the positive spin which the government and media have tried to put on the economic picture, the reality is that the US economy is not gong to recover any time soon.
Look for sideways-down movement over the coming weeks, peppered with a couple of major downside days, with the Dow registering 200-400 point losses. Once the selling begins, it will not be easily stopped. The banks and their TARP money are pulling out - they have to - before they are stuck with losing positions. Before that happens they will unload on retail investors.
Happy days? Not for bulls.
Wednesday, March 4, 2009
Bargain Hunters and Bottom Fishers
After a rocky start, US stock indices finally put in a day of solid gains, thanks in large part from the seemingly never-ending supply of optimists seeking bargains after stocks plunge to new lows.
By no means is the recession or the drumbeat of downbeat economic news subsiding. In fact, this latest round of selling - pushing to Dow, S&P and NYSE Comp. to 12-year lows - was possibly the most brutal and merciless yet. Even today, the news was decidedly bad. The ADP Employment Report for February showed that another 697,000 private sector jobs were lost in the month of February. In the good-producing sector, it was the 26th consecutive month of US job losses; manufacturing fell for the 36th straight month, according to the firm.
Inside ADP's numbers was an alarming revelation: that most of the losses were from medium and small firms employing less than 500 individuals. The takeaway was that job-chopping by major firms has peaked, but now the recession is spreading down to smaller firms, even to the very mom-and-pop type small businesses that are the backbone of the economy.
For Wall Street, those figures, coupled with an oversold condition in the market, provided enough of a green light to let the bargain hunters loose, boosting stocks in an overdue, broad rally. At 2:00 pm, the Fed released the Beige Book, an anecdotal accounting which showed economic conditions deteriorating across all 12 regions.
That didn't dampen the mood much, until late in the session, when the Dow shed nearly 100 points in the last 20 minutes of trading.
As the Dow goes, it came just short of the new psychological barrier at 7000, paused and then fell away. That late-day downturn is surely cause for concern going forward, though if the 7000 level is breached, there's not much in the way of resistance until the 8000 level, so the opportunity for a short-term rally exists over the next four to six weeks.
Of course, there are still hurdles to overcome, and the chance that another bank may blow up or some other circumstance contribute to the overall malaise is paramount.
Dow 6,875.84, +149.82 (2.23%)
NASDAQ 1,353.74, +32.73 (2.48%)
S&P 500 712.87, +16.54 (2.38%)
NYSE Composite 4,464.89, +130.19 (3.00%)
Twenty-five of thirty Dow components sported gains, but the five which suffered losses revealed quite a bit about the overall tone of trading. Bank of America (BAC), Citigroup (C), American Express (AXP), General Electric (GE) and JP Morgan Chase (JPM) all have one thing in common. They are either banks or substantially tied to finance in their business operations. JPM took the biggest hit of all, down 8.14%, closing at 19.30, -1.71. The major banks still have unresolved issues and most of them relate back to derivatives and credit default swaps in the black hole of AIG.
Market internals were largely in line with the closing numbers. Advancers clobbered losers for the first time in over a week, 4955-1639. New lows moderated back to 676, though only three (3) stocks reached new highs. Volume remained at the elevated levels of the past week.
NYSE Volume 1,796,873,000
NASDAQ Volume 2,349,450,000
Oil ramped up on news of a surprise drawdown in US supply. Crude futures for April delivery gained $3.73, to $45.38. Gold continued losing, down another $6.90, to $906.70. Gold has lost nearly $100 in just over a week's time. Silver fared better (somebody is obviously taking my advice), gaining 20 cents to $12.92, still bargain territory (under $13 per ounce).
Optimism was abundantly everywhere. All commodity prices were up sharply with the notable exception of gold. This is likely an aberration, as is the stock market move, though there is a technical set-up for a short term bounce.
Stay tuned.
By no means is the recession or the drumbeat of downbeat economic news subsiding. In fact, this latest round of selling - pushing to Dow, S&P and NYSE Comp. to 12-year lows - was possibly the most brutal and merciless yet. Even today, the news was decidedly bad. The ADP Employment Report for February showed that another 697,000 private sector jobs were lost in the month of February. In the good-producing sector, it was the 26th consecutive month of US job losses; manufacturing fell for the 36th straight month, according to the firm.
Inside ADP's numbers was an alarming revelation: that most of the losses were from medium and small firms employing less than 500 individuals. The takeaway was that job-chopping by major firms has peaked, but now the recession is spreading down to smaller firms, even to the very mom-and-pop type small businesses that are the backbone of the economy.
For Wall Street, those figures, coupled with an oversold condition in the market, provided enough of a green light to let the bargain hunters loose, boosting stocks in an overdue, broad rally. At 2:00 pm, the Fed released the Beige Book, an anecdotal accounting which showed economic conditions deteriorating across all 12 regions.
That didn't dampen the mood much, until late in the session, when the Dow shed nearly 100 points in the last 20 minutes of trading.
As the Dow goes, it came just short of the new psychological barrier at 7000, paused and then fell away. That late-day downturn is surely cause for concern going forward, though if the 7000 level is breached, there's not much in the way of resistance until the 8000 level, so the opportunity for a short-term rally exists over the next four to six weeks.
Of course, there are still hurdles to overcome, and the chance that another bank may blow up or some other circumstance contribute to the overall malaise is paramount.
Dow 6,875.84, +149.82 (2.23%)
NASDAQ 1,353.74, +32.73 (2.48%)
S&P 500 712.87, +16.54 (2.38%)
NYSE Composite 4,464.89, +130.19 (3.00%)
Twenty-five of thirty Dow components sported gains, but the five which suffered losses revealed quite a bit about the overall tone of trading. Bank of America (BAC), Citigroup (C), American Express (AXP), General Electric (GE) and JP Morgan Chase (JPM) all have one thing in common. They are either banks or substantially tied to finance in their business operations. JPM took the biggest hit of all, down 8.14%, closing at 19.30, -1.71. The major banks still have unresolved issues and most of them relate back to derivatives and credit default swaps in the black hole of AIG.
Market internals were largely in line with the closing numbers. Advancers clobbered losers for the first time in over a week, 4955-1639. New lows moderated back to 676, though only three (3) stocks reached new highs. Volume remained at the elevated levels of the past week.
NYSE Volume 1,796,873,000
NASDAQ Volume 2,349,450,000
Oil ramped up on news of a surprise drawdown in US supply. Crude futures for April delivery gained $3.73, to $45.38. Gold continued losing, down another $6.90, to $906.70. Gold has lost nearly $100 in just over a week's time. Silver fared better (somebody is obviously taking my advice), gaining 20 cents to $12.92, still bargain territory (under $13 per ounce).
Optimism was abundantly everywhere. All commodity prices were up sharply with the notable exception of gold. This is likely an aberration, as is the stock market move, though there is a technical set-up for a short term bounce.
Stay tuned.
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