Eerily similar to Thursday's trading pattern, stocks rode early gains until 10:00 am EDT, then quickly sold off, spent the rest of the session in the red and finished flat.
The drop in equities coincided neatly with the release of the University of Michigan's October Consumer Sentiment survey, which showed a reading of 83.1, after posting a 783 figure in September. Either the respondents to the survey have been enjoying some good life, or, like other economic data releases over the past month or so, the data is being rigged in advance of the November elections.
Such conspiracy theories have been gaining traction in recent days, and barely anyone would be surprised, at this point, if some of them were proven valid.
While the indices ended flat, the advance-decline line experienced serious deterioration, suggesting that there were few buyers in the market and those were very selective.
Otherwise, it was a lackluster day for equities. JP Morgan (JPM) and Wells Fargo (WFC) both reported third quarter earnings prior to the opening bell and both beat on the earnings side, though Wells missed revenue projections. Both stocks sold off during the trading session, due, in part, to one of the unexpected consequences of ZIRP and QEternity by the Federal Reserve: with borrowing and lending rates so low, banks are finding it difficult to make money.
Put that in the Keynesian "I told you so" file and have a happy weekend.
Dow 13,328.85, +2.46 (0.02%)
NASDAQ 3,044.11, -5.30 (0.17%)
S&P 500 1,428.59, -4.25 (0.30%)
NYSE Composite 8,227.08, -29.51 (0.36%)
NASDAQ Volume 1,545,540,250
NYSE Volume 3,132,356,750
Combined NYSE & NASDAQ Advance - Decline: 1930-3489
Combined NYSE & NASDAQ New highs - New lows: 109-61
WTI crude oil: 91.86, -0.21
Gold: 1,759.70, -10.90
Silver: 33.67, -0.413
Showing posts with label Consumer Confidence Index. Show all posts
Showing posts with label Consumer Confidence Index. Show all posts
Friday, October 12, 2012
Friday, June 17, 2011
Desperate Late Rally Bumps Dow to First Gain in Seven Weeks
What an absolute mockery the US stock markets are.
With stocks deteriorating late in the day, synchronized buying in the final 4 minutes brought the Dow Jones Industrial average back over 12,000, and to the first positive close in seven weeks.
The S&P move, similar in time frame, was even sillier, getting the widely-watched average to close exactly 0.52 higher than it ended last week. The Dow was up 52 points for the week, while the NASDAQ finished up the week a loser, down 27 points. Apparently, the genius brain trust on Wall Street missed that one.
In a few words, stocks are still very weak and the issues causing the weakness have yet to be resolved.
Dow 12,004.36, +42.84 (0.36%)
NASDAQ 2,616.48, -7.22 (0.28%)
S&P 500 1,271.50, +3.86 (0.30%)
NYSE Composite 8,000.11, +36.51 (0.46%)
For the first time in a while, advancers carried the day, unconvincingly beating declining issues, 3857-2774. On the NASDAQ, there were only 28 new highs and 113 new lows. The NYSE saw 25 new highs, but 48 new lows, making the combined totals favor the new lows for the 11th straight session, 161-76. Volume was healthy, having much to do, as did the general gains, with quadruple witching on options expiration. Beginning next week, with the options play out of the way, stocks can get right back to falling off the table again.
NASDAQ Volume 2,491,541,250
NYSE Volume 4,925,850,000
Crude oil was hammered down again, losing another $1.94, to close out the week at $93.01. Gold finished up $10.80, at $1540.00, while silver added 31 cents, to $35.90.
Economic data was muted, with the Conference Board's Index of leading Indicators up 0.8% for May, while the University of Michigan's consumer sentiment index backtracked from 74.3 in May to 71.8 in June.
It was a wild week for everyone, even those of us who only report on the madness.
With stocks deteriorating late in the day, synchronized buying in the final 4 minutes brought the Dow Jones Industrial average back over 12,000, and to the first positive close in seven weeks.
The S&P move, similar in time frame, was even sillier, getting the widely-watched average to close exactly 0.52 higher than it ended last week. The Dow was up 52 points for the week, while the NASDAQ finished up the week a loser, down 27 points. Apparently, the genius brain trust on Wall Street missed that one.
In a few words, stocks are still very weak and the issues causing the weakness have yet to be resolved.
Dow 12,004.36, +42.84 (0.36%)
NASDAQ 2,616.48, -7.22 (0.28%)
S&P 500 1,271.50, +3.86 (0.30%)
NYSE Composite 8,000.11, +36.51 (0.46%)
For the first time in a while, advancers carried the day, unconvincingly beating declining issues, 3857-2774. On the NASDAQ, there were only 28 new highs and 113 new lows. The NYSE saw 25 new highs, but 48 new lows, making the combined totals favor the new lows for the 11th straight session, 161-76. Volume was healthy, having much to do, as did the general gains, with quadruple witching on options expiration. Beginning next week, with the options play out of the way, stocks can get right back to falling off the table again.
NASDAQ Volume 2,491,541,250
NYSE Volume 4,925,850,000
Crude oil was hammered down again, losing another $1.94, to close out the week at $93.01. Gold finished up $10.80, at $1540.00, while silver added 31 cents, to $35.90.
Economic data was muted, with the Conference Board's Index of leading Indicators up 0.8% for May, while the University of Michigan's consumer sentiment index backtracked from 74.3 in May to 71.8 in June.
It was a wild week for everyone, even those of us who only report on the madness.
Tuesday, June 29, 2010
Markets Plunge on Data, Fear; False Bottom in Place
There are so many negative issues plaguing equity investments at this juncture one can only hope to keep abreast of daily developments. Investors and traders should simply assume that all prior data was poor and that future data will continue in the same poor fashion for the foreseeable future - and maybe beyond.
As the global deflationary death (and debt) spiral persists, there's little any single entity can do to prevent major dislocations and value deterioration. The stock market is only a proxy for the general US economy, though it serves as a very solid guide to global conditions. What seems to be a major stumbling block for the overall health or decay of a global economic system is that it is made up of many smaller, moving parts - equity markets, bond markets, governments, nations, derivatives, commodities, etc. - and without coordination (virtually impossible) from these moving parts, stemming the deflationary tide is next to impossible.
Tuesday's decline was not confined to, nor was it a result of, US interests. It was global, begun with a revision to China's April Leading Economic Indicators (LEI) by the Conference Board, from a gain of 1.7% to a much smaller - and much more significant - 0.3% gain. The pain felt in bourses around the globe was exacerbated by the same Conference Board's US Consumer Confidence reading for June, which tumbled to 52.9 from May's 62.7 mark.
Other than the China revision and one sentiment gauge, overall data and news flow has been nothing but sad. There hasn't been a positive economic data release since the June non-farms payroll data, itself a complete flop. Plaguing markets are a myriad of touchy, intertwined forces, including unemployment, residential housing, commercial real estate, slumping bond yields, government debt, household debt, shrinking money supply, tight credit conditions and currency fluctuations.
It's almost too much to expect from any market individually, so all markets are collectively sharing the pain. Oversimplifying the matter to the extreme, an oversupply of assets on a base of faulty investments funded with massive amounts of unsecured debt (in the Trillions of dollars) is collapsing at a rapid rate. That's why gold and silver have risen, or, at least lately held up much better than most assets - there's a finite, limited supply of them.
The selling began early and accelerated through the afternoon, with indices closing very near their lows of the day. The final, closing price of the S&P 500 was the lowest since October 30, 2009, an 8-month low, breaking through previous double-bottom support.
Dow 9,870.30, -268.22 (2.65%)
NASDAQ 2,135.18, -85.47 (3.85%)
S&P 500 1,041.24, -33.33 (3.10%)
NYSE Composite 6,520.09, -216.51 (3.21%)
Decliners decimated advancers, 5837-752 (nearly 8:1); new lows bounded past new highs, 324-93, finally confirming the roll-over of that indicator and sending the strongest sell signal possible. The daily high-low ratio has been mixed for the past four weeks and has now finally founded direction. Additionally, volume, which was non-existent on Monday, absolutely exploded to near-panic levels today.
NYSE Volume 7,193,685,000
NASDAQ Volume 2,783,303,750
Crude oil tumbled on demand concerns, losing $2.31, to $75.94. Gold saw a little bit of a bid, up $3.80, to $1,242.00, though silver fell 8 cents, to $18.59.
It was one of Wall Street's worst days of this or any year and the general consensus is that it's far from over. With three days remaining to the week and more sensitive data due out, there's no hope for the bullish case.
There is a small amount of support around Dow 9800, though it is very tentative, and likely to be broken without much fuss. The next leg down in the still-unfolding global de-leveraging process is likely to be the steepest from peak to trough and we are only at the beginning of it.
As the global deflationary death (and debt) spiral persists, there's little any single entity can do to prevent major dislocations and value deterioration. The stock market is only a proxy for the general US economy, though it serves as a very solid guide to global conditions. What seems to be a major stumbling block for the overall health or decay of a global economic system is that it is made up of many smaller, moving parts - equity markets, bond markets, governments, nations, derivatives, commodities, etc. - and without coordination (virtually impossible) from these moving parts, stemming the deflationary tide is next to impossible.
Tuesday's decline was not confined to, nor was it a result of, US interests. It was global, begun with a revision to China's April Leading Economic Indicators (LEI) by the Conference Board, from a gain of 1.7% to a much smaller - and much more significant - 0.3% gain. The pain felt in bourses around the globe was exacerbated by the same Conference Board's US Consumer Confidence reading for June, which tumbled to 52.9 from May's 62.7 mark.
Other than the China revision and one sentiment gauge, overall data and news flow has been nothing but sad. There hasn't been a positive economic data release since the June non-farms payroll data, itself a complete flop. Plaguing markets are a myriad of touchy, intertwined forces, including unemployment, residential housing, commercial real estate, slumping bond yields, government debt, household debt, shrinking money supply, tight credit conditions and currency fluctuations.
It's almost too much to expect from any market individually, so all markets are collectively sharing the pain. Oversimplifying the matter to the extreme, an oversupply of assets on a base of faulty investments funded with massive amounts of unsecured debt (in the Trillions of dollars) is collapsing at a rapid rate. That's why gold and silver have risen, or, at least lately held up much better than most assets - there's a finite, limited supply of them.
The selling began early and accelerated through the afternoon, with indices closing very near their lows of the day. The final, closing price of the S&P 500 was the lowest since October 30, 2009, an 8-month low, breaking through previous double-bottom support.
Dow 9,870.30, -268.22 (2.65%)
NASDAQ 2,135.18, -85.47 (3.85%)
S&P 500 1,041.24, -33.33 (3.10%)
NYSE Composite 6,520.09, -216.51 (3.21%)
Decliners decimated advancers, 5837-752 (nearly 8:1); new lows bounded past new highs, 324-93, finally confirming the roll-over of that indicator and sending the strongest sell signal possible. The daily high-low ratio has been mixed for the past four weeks and has now finally founded direction. Additionally, volume, which was non-existent on Monday, absolutely exploded to near-panic levels today.
NYSE Volume 7,193,685,000
NASDAQ Volume 2,783,303,750
Crude oil tumbled on demand concerns, losing $2.31, to $75.94. Gold saw a little bit of a bid, up $3.80, to $1,242.00, though silver fell 8 cents, to $18.59.
It was one of Wall Street's worst days of this or any year and the general consensus is that it's far from over. With three days remaining to the week and more sensitive data due out, there's no hope for the bullish case.
There is a small amount of support around Dow 9800, though it is very tentative, and likely to be broken without much fuss. The next leg down in the still-unfolding global de-leveraging process is likely to be the steepest from peak to trough and we are only at the beginning of it.
Tuesday, February 23, 2010
Real Estate, Low Confidence Crush Stocks
It didn't take long for the market to re-establish some sense of direction after drifting sideways the past two sessions.
Hopes for an economic recovery were dashed with the release of two separate reports. First, at 9:00 am, the monthly S&P/Case-Shiller 20-city index showed an overall 3.2% decline from a year ago. While several cities - San Francisco, San Diego, Denver, Washington, DC and Dallas - showed home prices improving modestly, most of the cities in the survey displayed continued carnage, with the worst being Las Vegas (-20.6%), followed by Tampa (-11.0%), Detroit (-10.3%), Miami (-9.9%) and Seattle, Washington (-7.8%).
Widespread continuing weakness in the real estate market has been attributed to poor underwriting standards during the boom years, 2000-2006, though more and more declining property values are being cited as an effect of worsening unemployment conditions. Foreclosures keep rising without abating in most large cities and even more so in smaller communities which have a less-robust employer base. Even though delinquencies are reported, banks have been reluctant to foreclose, and there's widespread belief that a so-called "shadow inventory" of non-foreclosed and bank owned property still awaits to hit the market with a deadening thud.
Even a small addition of unsold properties reaching various markets over the next six to eighteen months would send real estate prices down even lower, but the quantities may be more of a torrent rather than a trickle. With Fannie Mae and Freddie Mac already in deep trouble, the residential real estate market is looking more and more like a wasteland and less like a "recovering" market.
That report alone was not enough to dampen spirits on Wall Street, as stocks, after opening slightly lower, were up steadily in the early going, until the second blast of negative news reached. When the Conference Board's Consumer Confidence Index for February came in at 46.0, down from 56.5 in January, all hope for a continuation of any rally was lost. Commentators on CNBC and elsewhere were aghast at the "unexpected" decline, mostly by the size of it. The one-month drop of more than 10 points was the most anyone could remember.
Ancillary indices, such as the present situation, also dropped sharply, from 25.2 to 19.4, its lowest level in 27 years. The expectations index declined to 63.8, from 77.3 in January. That was more than enough to send the Dow to a 100-point loss, with the other major indices in tow.
Those two reports brought the bears and bearish analysts out from the woodwork. The sheer number of people expressing negative viewpoints - on TV, radio, the internet and in print - was stunning.
Dow 10,282.41, -100.97 (0.97%)
NASDAQ 2,213.44, -28.59 (1.28%)
S&P 500 1,094.60, -13.41 (1.21%)
NYSE Composite 6,974.60, -103.93 (1.47%)
Declining issues took the edge over advancers, 4457-2057. New highs came back to earth at 202, with only 31 new lows, though, it must be pointed out that these figures are going to be skewed wildly by comparisons to stocks at market bottoms from last year. It won't be until late March or later that the high-low metric will offer much of a reliable glimpse. Volume was a bit better than yesterday's no-show, but there is now likely much more downside risk than in recent days.
NYSE Volume 4,971,602,500
NASDAQ Volume 2,139,569,750
Commodities took it on the chin as well. Crude oil for April delivery, in just the second day of the contract, fell $1.45, to $78.86. Gold lost $10.10, to close at $1,103.00. Silver fell 34 cents, to $15.91.
The onslaught of data today may be just the beginning of poor economic news heading to kill off the incipient rally in equities. While Wall Street may be reveling, most of Main Street is reeling. The persistent and deep declines in prices and markets will leave no asset class untouched, equities and commodities included.
Be aware that stocks could tumble off another cliff at any time without warning. The US and global markets have not made enough real, structural changes and are not yet strong enough to offset the overwhelming deflationary spiral that continues to plague economies from households to cities and states, to entire nations.
In the meantime, could somebody please tell the programming executives at CNBC that curling has to be the most uninteresting, boring, exasperatingly dull event to ever be afforded significant air time? Enough, already!
Hopes for an economic recovery were dashed with the release of two separate reports. First, at 9:00 am, the monthly S&P/Case-Shiller 20-city index showed an overall 3.2% decline from a year ago. While several cities - San Francisco, San Diego, Denver, Washington, DC and Dallas - showed home prices improving modestly, most of the cities in the survey displayed continued carnage, with the worst being Las Vegas (-20.6%), followed by Tampa (-11.0%), Detroit (-10.3%), Miami (-9.9%) and Seattle, Washington (-7.8%).
Widespread continuing weakness in the real estate market has been attributed to poor underwriting standards during the boom years, 2000-2006, though more and more declining property values are being cited as an effect of worsening unemployment conditions. Foreclosures keep rising without abating in most large cities and even more so in smaller communities which have a less-robust employer base. Even though delinquencies are reported, banks have been reluctant to foreclose, and there's widespread belief that a so-called "shadow inventory" of non-foreclosed and bank owned property still awaits to hit the market with a deadening thud.
Even a small addition of unsold properties reaching various markets over the next six to eighteen months would send real estate prices down even lower, but the quantities may be more of a torrent rather than a trickle. With Fannie Mae and Freddie Mac already in deep trouble, the residential real estate market is looking more and more like a wasteland and less like a "recovering" market.
That report alone was not enough to dampen spirits on Wall Street, as stocks, after opening slightly lower, were up steadily in the early going, until the second blast of negative news reached. When the Conference Board's Consumer Confidence Index for February came in at 46.0, down from 56.5 in January, all hope for a continuation of any rally was lost. Commentators on CNBC and elsewhere were aghast at the "unexpected" decline, mostly by the size of it. The one-month drop of more than 10 points was the most anyone could remember.
Ancillary indices, such as the present situation, also dropped sharply, from 25.2 to 19.4, its lowest level in 27 years. The expectations index declined to 63.8, from 77.3 in January. That was more than enough to send the Dow to a 100-point loss, with the other major indices in tow.
Those two reports brought the bears and bearish analysts out from the woodwork. The sheer number of people expressing negative viewpoints - on TV, radio, the internet and in print - was stunning.
Dow 10,282.41, -100.97 (0.97%)
NASDAQ 2,213.44, -28.59 (1.28%)
S&P 500 1,094.60, -13.41 (1.21%)
NYSE Composite 6,974.60, -103.93 (1.47%)
Declining issues took the edge over advancers, 4457-2057. New highs came back to earth at 202, with only 31 new lows, though, it must be pointed out that these figures are going to be skewed wildly by comparisons to stocks at market bottoms from last year. It won't be until late March or later that the high-low metric will offer much of a reliable glimpse. Volume was a bit better than yesterday's no-show, but there is now likely much more downside risk than in recent days.
NYSE Volume 4,971,602,500
NASDAQ Volume 2,139,569,750
Commodities took it on the chin as well. Crude oil for April delivery, in just the second day of the contract, fell $1.45, to $78.86. Gold lost $10.10, to close at $1,103.00. Silver fell 34 cents, to $15.91.
The onslaught of data today may be just the beginning of poor economic news heading to kill off the incipient rally in equities. While Wall Street may be reveling, most of Main Street is reeling. The persistent and deep declines in prices and markets will leave no asset class untouched, equities and commodities included.
Be aware that stocks could tumble off another cliff at any time without warning. The US and global markets have not made enough real, structural changes and are not yet strong enough to offset the overwhelming deflationary spiral that continues to plague economies from households to cities and states, to entire nations.
In the meantime, could somebody please tell the programming executives at CNBC that curling has to be the most uninteresting, boring, exasperatingly dull event to ever be afforded significant air time? Enough, already!
Tuesday, June 30, 2009
Consumer Confidence and the Second American Revolution
Proof that I'm not a pessimist, but rather a realist, comes from The Conference Board's latest Consumer Confidence reading. As it turns out, pessimism may turn out to be a new national pastime if the 5000 households surveyed are any indication.
Check out these figures:
The overall index stands at 49.3 in June, down from 54.8. That number is much worse than it would appear on the surface. Consider that the index is calibrated to conform to a 1985 reading of 100. Well, life certainly wasn't perfect in 1985, so the index being more than halved in the subsequent 24 years means what? People are only half as satisfied or confident as they were then? In any case, it's not good.
Here's the really terrifying stuff. though. The percentage of people claiming that business conditions were "good" fell to 8.0%, from 8.8%. 8 percent! Now that's what I call pessimistic. There's more: People who thought jobs were plentiful: 4.7%; people who thought their incomes would increase in the next six months: 9.8%. Less than one in ten people expect a raise by December. That's pretty gloomy, no? Or maybe, just maybe, the people in this survey, which we assume is a nice cross-section of America, are not pessimists, but realists, who have seen the government's attempts at stimulus fall flat, who maybe don't believe all the lies from the controlled media, and who may have been around long enough and been through enough to lose faith in the federal government and its promises to fix everything.
America has always been an optimistic nation, but considering the current crop of politicians (largely failures) in the power structure of Washington, it is conceivable that many people have lost their patience and are losing faith in the "system," which is clearly broken and not about to be fixed by the people who broke it.
This is not to say that Americans are becoming pessimists, it's just saying that they're fed up with the status quo, and actually have been for quite some time. Americans may also be sending a message to Washington which goes something like this:
"We don't want more debt. We don't want a $1.75 trillion deficit. We want you (the government) to tighten your belts, cut spending and trim some of the fat. We are not on board with tax-and-spend, cap-and-trade, more expensive health care and the rest of your proposed plans for us. We are not standing with you, because you don't stand for us. If you continue, we shall stand against you."
That's pretty much it, isn't it? Americans are pretty tired of the US government, their state government and their local government sticking their noses into every last aspect of their lives and taxing them into oblivion. Nobody in Washington is currently listening to the American people and there's pretty good evidence that nobody's been listening for the past 10 years. Since they're not going to listen, then why pay them tribute? We owe them nothing. In fact, they owe us plenty.
Change will come, and mostly by the actions of government. Voting obviously hasn't made an impact, so the natural progression is for people to vote with their wallets and purses, and that's already occurring. Less and less revenue is flowing into government coffers and the flow will continue to slacken until it is just a trickle. This device, known as "starving the government" will produce change because the government will be unable to fund anything but the most rudimentary programs, and maybe not even those.
Americans, realists all, will not pay taxes and government will fall. That is our history, that is our right. The second American revolution has begun.
Noting that confidence is waning, Wall Streeters quickly abandoned their "window dressing" strategy in favor of a "jump ship" approach. After the Conference Board's report, stocks turned from narrowly positive to grossly negative in a hurry and stayed down for the remainder of the session. Coupled with yesterday's gains, the Dow is up a mind-boggling 8 points this week.
Dow 8,447.00, -82.38 (0.97%)
NASDAQ 1,835.04, -9.02 (0.49%)
S&P 500 919.33, -7.90 (0.85%)
NYSE Composite 5,905.14, -57.36 (0.96%)
Internals confirmed that the turnaround was no fluke. Declining issues outpaced advancers, 3653-2712. New lows surpassed new highs, breaking a three-day trend, 64-59. Volume was very light, as has been the case for most of the past month.
NYSE Volume 1,296,750,000
NASDAQ Volume 2,064,647,000
Like stocks, oil turned around on Tuesday, shedding $1.60, to close at $69.89. Gold also beat a steady retreat, losing $13.30, to $927.40. There was some dumping of silver as well, down 38 cents, to $13.60.
Americans are neither happy nor optimistic, a fairly obvious condition after being promised change but receiving more of the same. The time for real change has been at hand for some time. Whether Americans actually have the nerve and fortitude of their forefathers, only time will tell. Unheeded citizen complaints can only take one of two paths: reformation or tyranny.
Check out these figures:
The overall index stands at 49.3 in June, down from 54.8. That number is much worse than it would appear on the surface. Consider that the index is calibrated to conform to a 1985 reading of 100. Well, life certainly wasn't perfect in 1985, so the index being more than halved in the subsequent 24 years means what? People are only half as satisfied or confident as they were then? In any case, it's not good.
Here's the really terrifying stuff. though. The percentage of people claiming that business conditions were "good" fell to 8.0%, from 8.8%. 8 percent! Now that's what I call pessimistic. There's more: People who thought jobs were plentiful: 4.7%; people who thought their incomes would increase in the next six months: 9.8%. Less than one in ten people expect a raise by December. That's pretty gloomy, no? Or maybe, just maybe, the people in this survey, which we assume is a nice cross-section of America, are not pessimists, but realists, who have seen the government's attempts at stimulus fall flat, who maybe don't believe all the lies from the controlled media, and who may have been around long enough and been through enough to lose faith in the federal government and its promises to fix everything.
America has always been an optimistic nation, but considering the current crop of politicians (largely failures) in the power structure of Washington, it is conceivable that many people have lost their patience and are losing faith in the "system," which is clearly broken and not about to be fixed by the people who broke it.
This is not to say that Americans are becoming pessimists, it's just saying that they're fed up with the status quo, and actually have been for quite some time. Americans may also be sending a message to Washington which goes something like this:
"We don't want more debt. We don't want a $1.75 trillion deficit. We want you (the government) to tighten your belts, cut spending and trim some of the fat. We are not on board with tax-and-spend, cap-and-trade, more expensive health care and the rest of your proposed plans for us. We are not standing with you, because you don't stand for us. If you continue, we shall stand against you."
That's pretty much it, isn't it? Americans are pretty tired of the US government, their state government and their local government sticking their noses into every last aspect of their lives and taxing them into oblivion. Nobody in Washington is currently listening to the American people and there's pretty good evidence that nobody's been listening for the past 10 years. Since they're not going to listen, then why pay them tribute? We owe them nothing. In fact, they owe us plenty.
Change will come, and mostly by the actions of government. Voting obviously hasn't made an impact, so the natural progression is for people to vote with their wallets and purses, and that's already occurring. Less and less revenue is flowing into government coffers and the flow will continue to slacken until it is just a trickle. This device, known as "starving the government" will produce change because the government will be unable to fund anything but the most rudimentary programs, and maybe not even those.
Americans, realists all, will not pay taxes and government will fall. That is our history, that is our right. The second American revolution has begun.
Noting that confidence is waning, Wall Streeters quickly abandoned their "window dressing" strategy in favor of a "jump ship" approach. After the Conference Board's report, stocks turned from narrowly positive to grossly negative in a hurry and stayed down for the remainder of the session. Coupled with yesterday's gains, the Dow is up a mind-boggling 8 points this week.
Dow 8,447.00, -82.38 (0.97%)
NASDAQ 1,835.04, -9.02 (0.49%)
S&P 500 919.33, -7.90 (0.85%)
NYSE Composite 5,905.14, -57.36 (0.96%)
Internals confirmed that the turnaround was no fluke. Declining issues outpaced advancers, 3653-2712. New lows surpassed new highs, breaking a three-day trend, 64-59. Volume was very light, as has been the case for most of the past month.
NYSE Volume 1,296,750,000
NASDAQ Volume 2,064,647,000
Like stocks, oil turned around on Tuesday, shedding $1.60, to close at $69.89. Gold also beat a steady retreat, losing $13.30, to $927.40. There was some dumping of silver as well, down 38 cents, to $13.60.
Americans are neither happy nor optimistic, a fairly obvious condition after being promised change but receiving more of the same. The time for real change has been at hand for some time. Whether Americans actually have the nerve and fortitude of their forefathers, only time will tell. Unheeded citizen complaints can only take one of two paths: reformation or tyranny.
Tuesday, January 30, 2007
Confidence Boost
The markets surely needed a lift and they got one today from the Conference Board, which reported their Consumer Confidence Index for December at 110.3 , the highest level since May of 2002.
The mostly upbeat report was tempered by the coincident Expectations Index, which declined to 94.5 from 96.3. Included in the report was the statement:
Wall Street responded on cue, with the three major indices jumping well into positive territory around 11:00. Highs for the day were reached at that early point, with trading for the rest of the session vacillating in a narrow range.
The Dow gained 32.53 points; the NASDAQ was up 7.55; the S&P 500 added 8.20.
High among the anxiety points were corporate earnings, which for the most part had been lackluster. The prevailing mood wasn't helped much by Dow component 3M (MMM), which reported 4th quarter profits of $1.57 per share, including 47 cents from the sale of its drug business and 4 cents a share of stock option expenses.
With the quarter essentially in line, what spooked investors was the outlook from the conglomerate, calling for 2007 earnings between 4.60 and 4.75 per share, well below Wall Street's outlook of 4.99. Shares of 3M took a 5% hit on the day.
Drug maker Merck (MRK) also disappointed, posting 4th quarter earnings of just 22 cents, as opposed to 51 cents in the year-ago period. The company included charges of 7 cents for restructuring and 21 cents for the purchase of a small biotech company, Sirna Therapeutics. Shares lost 60 cents, or 1.6% on the day.
What had to have been the biggest move of the day was in the energy sector. Continued cold weather and an announcement of production cuts from an OPEC minister sent oil higher by $2.96 to close at $56.97. Natural gas rose 80 cents, or 12% to $7.74 per 1000 btu.
Not surprisingly, stocks in the energy sector led all others on the day. Breadth was solidly on the plus side, with gainers swamping losers nearly 2-1.
The Federal Open Market Committee (FOMC) releases guidance tomorrow after 2:30 and is widely expected to announce no change in interest rates, a stance they have held since August of 2006.
The mostly upbeat report was tempered by the coincident Expectations Index, which declined to 94.5 from 96.3. Included in the report was the statement:
"This month's slight increase in confidence was solely the result of an improvement in the Present Situation Index, fueled primarily by a more favorable job market," says Lynn Franco, Director of The Conference Board Consumer Research Center. "Looking ahead, however, consumers are not as optimistic as they were in December. All in all, the Index suggests a moderate improvement in the pace of growth in early 2007."
Wall Street responded on cue, with the three major indices jumping well into positive territory around 11:00. Highs for the day were reached at that early point, with trading for the rest of the session vacillating in a narrow range.
The Dow gained 32.53 points; the NASDAQ was up 7.55; the S&P 500 added 8.20.
High among the anxiety points were corporate earnings, which for the most part had been lackluster. The prevailing mood wasn't helped much by Dow component 3M (MMM), which reported 4th quarter profits of $1.57 per share, including 47 cents from the sale of its drug business and 4 cents a share of stock option expenses.
With the quarter essentially in line, what spooked investors was the outlook from the conglomerate, calling for 2007 earnings between 4.60 and 4.75 per share, well below Wall Street's outlook of 4.99. Shares of 3M took a 5% hit on the day.
Drug maker Merck (MRK) also disappointed, posting 4th quarter earnings of just 22 cents, as opposed to 51 cents in the year-ago period. The company included charges of 7 cents for restructuring and 21 cents for the purchase of a small biotech company, Sirna Therapeutics. Shares lost 60 cents, or 1.6% on the day.
What had to have been the biggest move of the day was in the energy sector. Continued cold weather and an announcement of production cuts from an OPEC minister sent oil higher by $2.96 to close at $56.97. Natural gas rose 80 cents, or 12% to $7.74 per 1000 btu.
Not surprisingly, stocks in the energy sector led all others on the day. Breadth was solidly on the plus side, with gainers swamping losers nearly 2-1.
The Federal Open Market Committee (FOMC) releases guidance tomorrow after 2:30 and is widely expected to announce no change in interest rates, a stance they have held since August of 2006.
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