US stock indices were up sharply early in the day on nothing in particular, though a more technical outlook might have foreseen the advance in the making after four days of sluggishness and little movement in US stocks.
The NASDAQ soared above 2000 for the first time since October, 2008, a span of ten months. The Dow and S&P reached 9-month highs during the session. Pent-up demand and an extension of the 5-month-long rally pushed stocks to their best levels of the year and had investors cheering despite contrary economic indicators and
Initial unemployment claims came in at 584,000, a touch higher than expected and a fairly sizable leap from the revised 559,000 of the prior week. Unemployment continues to be a key issue, though stocks don't seem to mind the unusually high levels of joblessness, probably a serious mistake.
In earnings news, markets were bolstered by positive developments in Avon Products (AVP), which saw profits plunge, but recruitment of sales representatives grow by 11%. Despite the poor quarter, the company actually bettered expectations and also announced layoffs of 1200 office staff. The stock trader up 2.41 (8.2%) on the news.
Other companies beating street estimates were Barrick Gold (ABX), health insurer Cigna (SI), Medifast (MED), Dow Chemical (DOW) and OfficeMax, which narrowed its quarterly loss by implementing a severe cost-cutting effort across the company.
Generally speaking, most public companies are weathering the recession better than the average consumer, though companies are narrowing losses or turning profits more from cost-cutting, labor force reductions, inventory depletion and other intra-company disciplines rather than increased sales. Most companies reporting this quarter have shown revenue declines from year-ago periods.
Those corporate results are what have many analysts baffled. With a healthy recovery nowhere in sight yet, stocks continue to gain in almost all sectors. While profits are still attainable, they have come on the heads of hourly or salaried workers or at the expense of organic growth. Profit expectations have been lowered nearly everywhere; still, the market gallops ahead as though the country were in a boom rather than at the mid-point of a major bust. There is likely to be a backlash and second leg down to price in the realities of a smaller overall economy in which companies are hardly flourishing but rather just hanging on.
Dow 9,154.46, -83.74 (0.92%)
NASDAQ 1,984.30, -16.54 (0.84%)
S&P 500 986.75, -11.60 (1.19%)
NYSE Composite 6,384.31, -103.74 (1.65%)
Late-day selling (after 3:30 pm) wiped out more than half of the gains on the major indices, however. The Dow, which had been up 175 points, finished higher by just 83. The NASDAQ drooped back below 2000 and the S&P failed to reach the magical 1000 mark. Advancers still beat decliners handily, 4784-1586. New highs skyrocketed to 267, versus just 106 new lows. A sign of the Wall Street mania could be seen in Starbucks (SBUX), which recorded a new 52-week high. Volume was improved over previous sessions, but was still not what would be seen in a serious bull market rally.
NYSE Volume 1,358,965,000
NASDAQ Volume 2,557,626,000
Commodities did an abrupt about-face in light of the positive tone on Wall Street. How much the street influences action in raw materials and other commodities is unknown, though today it seemed to be a major factor. Oil for September delivery rebounded $3.59, to $66.94. Gold spiked $7.60, to $937.30 and silver gained 23 cents, to $13.49. The sudden surge in prices may have had more to do with attitude than reality. Oil demand and gas usage is down, and unwinding upside-down positions may have influenced today's commodity action, though strong demand for a 7-year note auction by the Treasury was seen as a major positive. The debt machine continues to pump nearly non-stop, as though there is no limit to the unprecedented credit creation which is supposed to save us all.
The final numbers from Wall Street - especially considering the halving of gains in the final half-hour - were in anticipation of a major announcement tomorrow morning. At 8:30 am, the government announces preliminary second quarter GDP, the most relevant gauge of growth available, and it became obvious that there are some jangled nerves anticipating what many expect to be a very positive - though negative - number. The self-appointed "experts" say the economy shrank at the rate of 1.5% (annualized) in the three months ended June 30. That would be an enormous improvement over the average of 5.9% from the previous 6 months.
A negative growth rate ensures that the nation is still in recession, though the smaller number would indicate that conditions are improving. What that means as far as the second half of 2009 and all of 2010 are concerned is a matter of great conjecture. Nobody knows what the future holds, but most straight-thinking economists don't expect a very robust recovery. Of course, many of them have been wrong before, but tomorrow's opening bell should be a real loud clanger.
Showing posts with label Big Oil. Show all posts
Showing posts with label Big Oil. Show all posts
Thursday, July 30, 2009
Monday, June 8, 2009
A Market You Cannot Take Seriously
Foreign investors must look at the US stock markets as a major joke. Of course, theirs may or may not be any better, but the abnormal late-day trading patterns in US equity indices really should be held up for ridicule and scorn.
Today was just another in a series of predetermined outcomes. Stocks were down all day, until 3:15 pm, with the Dow index down as much as 130 points during the session. Naturally, the crooks and thieves controlling the trading have to keep up appearances - that America is still OK - so all of the losses were erased in the final 45 minutes.
That's become standard operating procedure on the Street. Whether or not anyone actually believes stocks should be levitating around their recent highs is another matter altogether. For most chartists and analysts, the evidence of manipulation is pretty clear, and has been for some time. Valuation means little anymore. It's all perception and innuendo, with the hope that people will forget that stocks are up some 35-40% since early March, haven't taken even a slight correction and may move even higher.
The feeling is that the insiders wish that everyone would just close their eyes for the next few weeks and wait for the inevitable push higher, which will, no doubt, be accompanied by some cockamamie economic report that purports to show the US economy on the mend. Should stocks take another step forward, one would be well advised to take profits, invest in oil, gold or silver and move out of stocks completely, because some day, sooner or later, there will be a hellish crash, something akin to the pounding stocks took last fall.
In the current case, it sure looks like the heavy hitters are firmly in control, taking profits as they please, bolstering their bottom lines with blatant disregard for retail investors, client money or anything even remotely resembling morals.
Dow 8,764.49, +1.36 (0.02%)
NASDAQ 1,842.40, -7.02 (0.38%)
S&P 500 939.14, -0.95 (0.10%)
NYSE Composite 6,068.56, -14.08 (0.23%)
Despite the narrowly mixed results in the headline numbers, decliners finished far ahead of advancing issues, 4013-2391. New highs finished just ahead of new lows, 59-58, but most telling was the light volume, far below even the reduced levels of the previous two weeks. The word best descriptive of this session's volume would be "feeble," though "feckless" also comes to mind.
NYSE Volume 1,077,228,000
NASDAQ Volume 1,993,720,000
Commodity prices were down nearly across the board, though the favored position of oil and energy-related raw materials was evident. Crude fell by a mere 35 cents, to $68.09, as though $68.00 is the magical fixed price for the slippery stuff. The metals took a more serious hit, with gold down $10.10, to $952.50, and silver off 43 cents, to $14.96.
Meanwhile, the crafty Chrysler bankruptcy, engineered by Washington bureaucrats, may be falling apart, as the Supreme Court issued a stay while justices mull over the appeal of a group of Indiana pension and construction funds who say their secured interests were unduly ignored in the original filing. Justice Ruth Bader Ginsburg issued the terse notice today, putting the entire matter on hold until Monday.
The American public is about to learn just who holds power in Washington. If the deal isn't done by Monday, June 15, Fiat, the purchaser of most of Chrysler's assets, has the right to walk away. Meanwhile, the court must take seriously the claims by the pension funds, which stand in stark opposition to the plan laid out by the Obama administration.
With the stock market and federal government appearing to be more "theatre of the absurd" than substantial operating mechanisms of capitalism and democracy, the recovery picture becomes more fuzzy and less believable every day. It should, because in more than just general terms, but specifically in instances ranging from the TARP "loans", to the bank stress tests to the pre-packaged bankruptcies of GM and Chrysler, the process has been deceptive, shady and unfair to the parties being harmed the most: the US taxpayers.
Today was just another in a series of predetermined outcomes. Stocks were down all day, until 3:15 pm, with the Dow index down as much as 130 points during the session. Naturally, the crooks and thieves controlling the trading have to keep up appearances - that America is still OK - so all of the losses were erased in the final 45 minutes.
That's become standard operating procedure on the Street. Whether or not anyone actually believes stocks should be levitating around their recent highs is another matter altogether. For most chartists and analysts, the evidence of manipulation is pretty clear, and has been for some time. Valuation means little anymore. It's all perception and innuendo, with the hope that people will forget that stocks are up some 35-40% since early March, haven't taken even a slight correction and may move even higher.
The feeling is that the insiders wish that everyone would just close their eyes for the next few weeks and wait for the inevitable push higher, which will, no doubt, be accompanied by some cockamamie economic report that purports to show the US economy on the mend. Should stocks take another step forward, one would be well advised to take profits, invest in oil, gold or silver and move out of stocks completely, because some day, sooner or later, there will be a hellish crash, something akin to the pounding stocks took last fall.
In the current case, it sure looks like the heavy hitters are firmly in control, taking profits as they please, bolstering their bottom lines with blatant disregard for retail investors, client money or anything even remotely resembling morals.
Dow 8,764.49, +1.36 (0.02%)
NASDAQ 1,842.40, -7.02 (0.38%)
S&P 500 939.14, -0.95 (0.10%)
NYSE Composite 6,068.56, -14.08 (0.23%)
Despite the narrowly mixed results in the headline numbers, decliners finished far ahead of advancing issues, 4013-2391. New highs finished just ahead of new lows, 59-58, but most telling was the light volume, far below even the reduced levels of the previous two weeks. The word best descriptive of this session's volume would be "feeble," though "feckless" also comes to mind.
NYSE Volume 1,077,228,000
NASDAQ Volume 1,993,720,000
Commodity prices were down nearly across the board, though the favored position of oil and energy-related raw materials was evident. Crude fell by a mere 35 cents, to $68.09, as though $68.00 is the magical fixed price for the slippery stuff. The metals took a more serious hit, with gold down $10.10, to $952.50, and silver off 43 cents, to $14.96.
Meanwhile, the crafty Chrysler bankruptcy, engineered by Washington bureaucrats, may be falling apart, as the Supreme Court issued a stay while justices mull over the appeal of a group of Indiana pension and construction funds who say their secured interests were unduly ignored in the original filing. Justice Ruth Bader Ginsburg issued the terse notice today, putting the entire matter on hold until Monday.
The American public is about to learn just who holds power in Washington. If the deal isn't done by Monday, June 15, Fiat, the purchaser of most of Chrysler's assets, has the right to walk away. Meanwhile, the court must take seriously the claims by the pension funds, which stand in stark opposition to the plan laid out by the Obama administration.
With the stock market and federal government appearing to be more "theatre of the absurd" than substantial operating mechanisms of capitalism and democracy, the recovery picture becomes more fuzzy and less believable every day. It should, because in more than just general terms, but specifically in instances ranging from the TARP "loans", to the bank stress tests to the pre-packaged bankruptcies of GM and Chrysler, the process has been deceptive, shady and unfair to the parties being harmed the most: the US taxpayers.
Thursday, January 18, 2007
House Puts Kibosh on Big Oil
In the final legislative action of Nancy Pelosi's much-publicized first 100 hours of the 110th Congress, House members voted 264-163 in favor of a sweeping bill that cut tax breaks to oil companies and imposed sanctions that would recoup royalties that the government says it is owed.
In total, the bill could salvage as much as $15 billion from the pockets of the big US-based oil companies, particularly, Exxon-Mobil, Chevron and ConocoPhillips. The bill was debated in a highly partisan session, with Republicans claiming that the measure would cause gas prices to rise and Democrats heralding a new direction in energy policy.
Whether the Senate will follow suit is yet unknown, but the majority vote in the House was not enough to override a near-certain presidential veto.
Earlier in the day, Wall Street continued its assault on all things tech, sending the Nasdaq lower by 36 points, the largest point drop since November 27, 2006. The Nasdaq has lost nearly 60 points over the last three sessions, a trend that has been tied to disappointing projections from companies such as Intel, Cisco and Apple.
Next up on the earnings parade is Motorola, anticipated to announce quarterly earnings of 25 cents per share before markets open. Around the same time, Dow component General Electric will report. 64 cents is the anticipated per share figure.
The Dow was off a marginal 9.22, with the S&P losing 4.25. Light sweet crude for February delivery was pounded lower again, briefly dipping below $50/bbl. on the NYMerc before closing at $50.48.
In total, the bill could salvage as much as $15 billion from the pockets of the big US-based oil companies, particularly, Exxon-Mobil, Chevron and ConocoPhillips. The bill was debated in a highly partisan session, with Republicans claiming that the measure would cause gas prices to rise and Democrats heralding a new direction in energy policy.
Whether the Senate will follow suit is yet unknown, but the majority vote in the House was not enough to override a near-certain presidential veto.
Earlier in the day, Wall Street continued its assault on all things tech, sending the Nasdaq lower by 36 points, the largest point drop since November 27, 2006. The Nasdaq has lost nearly 60 points over the last three sessions, a trend that has been tied to disappointing projections from companies such as Intel, Cisco and Apple.
Next up on the earnings parade is Motorola, anticipated to announce quarterly earnings of 25 cents per share before markets open. Around the same time, Dow component General Electric will report. 64 cents is the anticipated per share figure.
The Dow was off a marginal 9.22, with the S&P losing 4.25. Light sweet crude for February delivery was pounded lower again, briefly dipping below $50/bbl. on the NYMerc before closing at $50.48.
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