Well, apparently whatever it was that Ben Bernanke said on Wednesday to the Senate Committee, spooking the markets into an immediate and swift pullback, was not all that important because prior to the opening bell three Dow components - 3M (MMM), AT&T (T) and Caterpillar (CAT) - released second quarter earnings above expectations and sent stocks off to a roaring start.
The enthusiasm for equities was not in the least tempered by higher initial unemployment claims, which came in at 464,000, well ahead of last week's 427,000. So long as companies were turning sizable profits, nothing was holding back investors from buying.
Even existing home sales being down 5.1% for June or the Index of Leading Indicators dipping 0.2% had no effect on the rush to buy into the good news from corporate earnings.
Dow 10,322.30, +201.77 (1.99%)
NASDAQ 2,245.89, +58.56 (2.68%)
S&P 500 1,093.67, +24.08 (2.25%)
NYSE Composite 6,901.91, +170.75 (2.54%)
Advancing issues reversed Wednesday's drubbing, leading decliners, 5498-1017, and new highs soared ahead of new lows, 278-82. On a day which held such unbridled enthusiasm, there were more new highs (46) on the NASDAQ than new highs (39), reversing a three-day counter-trend. Volume was roughly at the same level as the previous session, though for bulls, it was a positive sign.
NASDAQ Volume 2,264,130,750
NYSE Volume 5,504,649,500
Oil futures were really the big winner on the day, with the September contract rising $2.74, to $79.30, the basis for which was unknown. Gold and silver were ahead only slightly, with gold gaining $3.90, to $1,195.50, and silver up 32 cents, to $18.12.
Every sector showed positive results as earnings season finally produced some results on which traders could trust with their money.
Despite the high quality of earnings, the major indices have yet to break through their 200-day moving averages, which are providing fairly stiff resistance, though corporate earnings continue to defy economic indicators.
At some point, possibly as early as tomorrow, stocks should break out from their recent range, tossing aside the cockeyed government reports and focusing on profits and valuations, like today.
Anecdotally, valuations may be as rich as they may get. For instance, 3M, which reported earnings of $1.54 for the most recent quarter, is trading at a multiple of 16.5 times trailing earnings, fairly rich.
AT&T is trading at 11.5 times earnings, while Caterpillar sports an ultra-rich multiple of 25.75 times earnings.
Traditionally, stocks trade in a range of 12-15 times earnings. Considering the headwinds into which companies are running, the low end of that range may be more appropriate at the present. That kind of metric is keeping a lid on stocks currently.
Showing posts with label ATT. Show all posts
Showing posts with label ATT. Show all posts
Thursday, July 22, 2010
Monday, March 29, 2010
The Economy Sucks but Stocks Keep Going Up
Stocks were up again today, and, truth be told, it's beginning to become a little bit sick and perverted, to think that US corporations are healthy and making money because they've been able to cut costs to the bone, costing US employees their jobs, or cutting the pay of those employees in order to please their investors. Soon enough, it will become truly sick and perverted, when these multi-national corporations begin to raise prices because they can't cut any more payroll or, like AT&T and Catterpillar, take huge write-offs and blame it on the increased costs of "ObamaCare," as they call it.
AT&T quietly announced late Friday that they would take a $1 billion charge because of all the evil new costs included in the heath care reform bill. One has to ask why they didn't mention this while the bill was in committee or on the senate and house floors. No, they just sat back and watched a billion dollars evaporate without raising their corporate voice?
Tell you what: any company that is that reckless with investor money should not be in your portfolio. If you own any AT&T stock, or the stock of any company that takes a write-off due to increased costs associated with the recently-passed health care reform bill, SELL IT, SELL ALL OF IT, SELL ALL OF IT NOW. They don't deserve your business, and furthermore, they're a sick, twisted bunch of creeps. Remember, AT&T was one of the companies which allowed the government unfettered access to YOUR phone calls, violated your privacy and probably broke numerous laws, but got away scott free. Screw them. They only care about themselves, not you, your cell phone or your land line. Just your money, that's all.
Not that I am particularly enamored with the health care legislation - I'm not - but AT&T is just using it as a scapegoat to cut employee benefits and/or hide other losses. Face it folks, these people are about as honest as Bernie Madoff's accountant.
Dow 10,895.86, +45.50 (0.42%)
NASDAQ 2,404.36, +9.23 (0.39%)
S&P 500 1,173.32, +6.73 (0.58%)
NYSE Composite 7,464.90, +61.32 (0.83%)
As usual, advancing issues outdid decliners, 4212-2245. There were 369 new highs and 42 new lows. So, nothing else has changed, except that volume returned to mostly insider trading. Participation levels are dropping like stones off a high bridge. It is possible that average people are awakening to the scheming ways of Wall Street after all. Most of the trading is being done by big banks, brokerages, hedge funds and mutual funds. Eventually, after they've fleeced the American - and foreign - public enough, they'll begin to eat each other's lunches and the market will be exposed for the grossly overvalued, manipulated joke it has become over the past two decades.
NYSE Volume 4,827,693,500
NASDAQ Volume 1,897,280,250
Oil was up $2.17, to $82.17, based on nothing but naked speculation and greed. Gold was up $6.10, to $1,110.30; silver higher by 48 cents, to $17.37, same reasons. Once again, in the face of a dawdling global economy and slack demand, prices continue to rise in stark contradiction to the "laws" of supply and demand.
Wake up, people. You toil all day, and sometimes part of your night, to do what? Pay utility bills, car payments, fuel, insurance and taxes. When that's all done you can look at what's left and Wall Street brokerages expect you to invest for your "retirement" or your kid's college education.
Get real. If retirement was such a grand idea, we'd do it when we're in our 20s or 30s not in our 70s and 80s. It's only because we're worth less as employees at that age: slower, less controllable, wiser, that companies want us to move along. You keep writing those checks. I'll keep telling you why it's a no-win situation.
AT&T quietly announced late Friday that they would take a $1 billion charge because of all the evil new costs included in the heath care reform bill. One has to ask why they didn't mention this while the bill was in committee or on the senate and house floors. No, they just sat back and watched a billion dollars evaporate without raising their corporate voice?
Tell you what: any company that is that reckless with investor money should not be in your portfolio. If you own any AT&T stock, or the stock of any company that takes a write-off due to increased costs associated with the recently-passed health care reform bill, SELL IT, SELL ALL OF IT, SELL ALL OF IT NOW. They don't deserve your business, and furthermore, they're a sick, twisted bunch of creeps. Remember, AT&T was one of the companies which allowed the government unfettered access to YOUR phone calls, violated your privacy and probably broke numerous laws, but got away scott free. Screw them. They only care about themselves, not you, your cell phone or your land line. Just your money, that's all.
Not that I am particularly enamored with the health care legislation - I'm not - but AT&T is just using it as a scapegoat to cut employee benefits and/or hide other losses. Face it folks, these people are about as honest as Bernie Madoff's accountant.
Dow 10,895.86, +45.50 (0.42%)
NASDAQ 2,404.36, +9.23 (0.39%)
S&P 500 1,173.32, +6.73 (0.58%)
NYSE Composite 7,464.90, +61.32 (0.83%)
As usual, advancing issues outdid decliners, 4212-2245. There were 369 new highs and 42 new lows. So, nothing else has changed, except that volume returned to mostly insider trading. Participation levels are dropping like stones off a high bridge. It is possible that average people are awakening to the scheming ways of Wall Street after all. Most of the trading is being done by big banks, brokerages, hedge funds and mutual funds. Eventually, after they've fleeced the American - and foreign - public enough, they'll begin to eat each other's lunches and the market will be exposed for the grossly overvalued, manipulated joke it has become over the past two decades.
NYSE Volume 4,827,693,500
NASDAQ Volume 1,897,280,250
Oil was up $2.17, to $82.17, based on nothing but naked speculation and greed. Gold was up $6.10, to $1,110.30; silver higher by 48 cents, to $17.37, same reasons. Once again, in the face of a dawdling global economy and slack demand, prices continue to rise in stark contradiction to the "laws" of supply and demand.
Wake up, people. You toil all day, and sometimes part of your night, to do what? Pay utility bills, car payments, fuel, insurance and taxes. When that's all done you can look at what's left and Wall Street brokerages expect you to invest for your "retirement" or your kid's college education.
Get real. If retirement was such a grand idea, we'd do it when we're in our 20s or 30s not in our 70s and 80s. It's only because we're worth less as employees at that age: slower, less controllable, wiser, that companies want us to move along. You keep writing those checks. I'll keep telling you why it's a no-win situation.
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