Remember the big ramp-up in stocks yesterday, based upon the new, revised-metholdology ADP October jobs data?
Gone.
That is despite a big beat in the non-farm payroll data released prior to Friday's open. The BLS said that the US created 171,000 net new jobs in the month of October, and, initially, the stock jocks loved it, pushing futures higher and sending the Dow Jones Industrials up 57 points at the open.
Trouble was, however, that the positive jobs data had already been priced in, off of the ADP beat. So, sorry, Charlie, no profit for you if you're a dollar short and a day late, as is the case. By 10:00 am, the Dow was flat. It and the other indices crawled lower through out the day, with the losses accelerating in the final two hours of the session.
There were other factors to stocks - and commodities - giving back everything on the final day of trading for the week. Corporate reporting for the third quarter has been seminally sour. Today's miss was by Chevron (CVX), a Dow component, which saw third-quarter net income fall to $5.25 billion, or $2.69 per share, from $7.83 billion, or $3.92 per share, a year earlier.
Chevron earned $2.55 per share, compared with the analysts' average estimate of $2.83. Oops! Poor babies, their efforts to skin every last dollar from the pockets of US consumers weren't quite as good as last year. The price of oil is down and headed even lower today.
Somebody send a memo to the CEOs of the energy companies and other Fortune 500 CEOs: there's a global slowdown going on, mostly because you guys have overpriced everything from baby formula to burials, and people simply can't foot the bill any more.
Other than sliding corporate earnings (note: Most major corporations are still massively profitable, just not as profitable as last year, or, in some cases, last quarter, but some, like Sharp and Panasonic are close to bankruptcy, with more to follow), there's a litany of issues facing the global economy, like the fiscal cliff and mountains of debt and unfunded liabilities worldwide (no small matter), the continuing crisis in Europe (still unresolved and getting worse), the uncertainty of the presidential election in the US (hint: Obama's going to win easily, which is another reason Wall Street is unhappy), and this little inconvenient storm called Hurricane Sandy, which still has most of the New Jersey shoreline, Long Island, Staten Island and lower Manhattan still without power and people suffering in cold weather, without fuel, food, and gas lines extending for miles in Jersey and New York, not because there's no gas, but no electricity to power the pumps and stations, many of which remain closed.
Yep, things are not good overall, and, from the looks of things, they're not getting any better. The damages from Sandy will easily exceed those of Katrina. It doesnt take a genius to figure out that a massive storm which wreaked havoc on the most densely-populated area of the country is going to cost more than the laughable estimates of $20 billion that have been bandied about by so-called experts. Try $60 billion or more, maybe in excess of $100 billion, and that number is going to pt a serious dent in fourth quarter GDP.
The current wisdom being foisted upon the supposedly-knowledgeable investing community - that all the destruction from Hurricane Sandy will eventually be a net positive for the economy a la Frederic Bastiat's "broken window" parable - is complete media hogwash put forward by economist goon-whores like Moody's Mark Zandi, Mesirow's Diane Swonk and Deutsche Bank's Joe LaVorgna (yes, the Germans always like to have Italians do their dirty work), and are completely off base.
While NYC Mayor Bloomberg has been catching considerable flak - most of it well-deserved - for pushing ahead with the New York City Marathon this weekend, the long tail of Hurricane Sandy is likely to help push the US economy into recession in the fourth quarter of 2012 and beyond. Unlike Katrina, which concentrated its wrath upon New Orleans and the Southern shores, Sandy hit the highest income folks in the country, and that's not something that's going to be erased from the memory or the bottom line very easily. Just to make sure everybody's on the same page here, expect every fourth quarter profit miss to mention - at least in part - the effects of the hurricane on profits, whether real or imagined. Hurricanes and weather overall make for great scapegoats.
So, this week on Wall Street was more or less a wash. Two days closed, a flat day Wednesday, up Thursday and down Friday. The sharpie day-traders made a huge buck to be sure, but America and the global economy suffered terribly, NY marathon or not.
And, not to forget, Apple's iPad Mini was released for sale globally today. Lines were much shorter than for other Apple product launches, which goes to figure: you introduce a mini-tablet, you get mini-lines.
And, just to rub some salt into already open wounds, another storm is setting up to hit the Northeast next week.
Just what we all need.
Dow 13,093.16, -139.46 (1.05%)
NASDAQ 2,982.13, -37.93 (1.26%)
S&P 500 1,414.20, -13.39 (0.94%)
NYSE Composite 8,234.91, -76.45 (0.92%)
NASDAQ Volume 1,820,933,250
NYSE Volume 3,576,460,250
Combined NYSE & NASDAQ Advance - Decline: 1575-3880
Combined NYSE & NASDAQ New highs - New lows: 211-87
WTI crude oil: 84.86, -2.23
Gold: 1,675.20, -40.30
Silver: 30.86, -1.391
Showing posts with label Long Island. Show all posts
Showing posts with label Long Island. Show all posts
Friday, November 2, 2012
Wednesday, October 31, 2012
Wall Street Reacts to the Devastation of Hurricane Sandy with Flat Session
It's morally repugnant that Wall Street would profit from the human suffering of others, though, in reality, it happens all the time. Stocks go up and down on the fortunes and foibles of people, many integral parts of larger corporations.
Thus, it was a time of joyous celebration for the professionals trading at the New York Stock Exchange that, for the first time in two days, equity markets were actually up and functioning. But, that euphoria, which resulted in a wholly predictable, end-of-month window dressing rally at the open, soon turned an eye toward the reality of the devastation and destruction left behind by hurricane Sandy.
Most of lower Manhattan is still without power, the NYSE operating off backup generators, and most of the areas contiguous to Wall Street for many miles to the North, South, East and West, are just beginning to evaluate the extent of the losses.
Most of the New Jersey coast is either underwater, under piles of sand or otherwise devastated; Long Island is a crushed, mangled mess as is Connecticut and most of the other New York boroughs.
Many in the area are still without power, which is slowly returning to some areas, but the losses sustained by people and companies is only now beginning to be felt. Restoration and reconstruction will take months and billions of dollars, the hit to the economy unmistakable, as Wall Street fully understands and began coming to grips with as stocks began to slide shortly after the initial burst leveled off at about 80 points to the good on the Dow.
The rapid turnaround was classic Wall Street hustle, as fund managers snapped up shares at the open to close their books for the month - some for the year - while the sharpies were already shorting the very same shares. There's profit to be made on the downside, and the environment is target rich and ripe for plucking by short-sellers, call sellers and put buyers.
By 10:30 all of the major indices were trading in negative territory, led by the NASDAQ, which itself was brought down by particularly vicious selling in Apple (AAPL), in the aftermath of the firing of two top executives by CEO Tim Cook. It's becoming apparent to everyone that the loss of Steve Jobs was not only a human tragedy, but nobody is there to replace his unique genius and business acumen.
In Europe, which remained open for business as usual over the past two days of Wall Street's shutdown, stocks were mostly down on Monday, up on Tuesday and rallying early Wednesday until finally giving up the ghost late in the sessions, the major indices - England's FTSE, Germany's DAX and France's CAC - all closing lower.
Just about 12:30 pm EDT, a reminder of just how tenuous the entire situation around New York was came from Knight Capital, when the firm, operating under backup power in Jersey City, was forced to shut down for the day, citing that their generators were failing.
Volumes were moderate, considering that many traders were without proper equipment, cell phone service spotty and some traders actually functioning from alternate locations, at home or at satellite offices, though, by the close, the volume ramped up, and the day was one of the better recent volume sessions.
Midday, stocks balanced just above the lows of the session, but buying was timid. As has been the usual mode of operation around Wall Street, traders generally ignored the world around them, sending the S&P and Dow back into positive territory in the final hour, as if nothing at all had occurred, but the move proved unsustainable.
As it has for the past four sessions running, the major indices finished mostly flat, which is patently absurd, as there are corporations taking serious losses from the storm. Reality may set in as time carries onward, but there's no telling how the detached traders in lower Manhattan will treat what will eventually turn out to be one of the costliest natural disasters of all time.
Perhaps the psychology of the control crowd is to not panic, despite evidence to the contrary as pertains to investments, but there is a price to be paid, though, as usual, the analysts will simply lower their expectations for all, and when those are exceeded, will celebrate the great success of what are more and more becoming hollowed-out shells of companies.
There will be days if not weeks of lost productivity, wages and competitiveness across six states: Delaware, Maryland, Pennsylvania, New York, New Jersey and Connecticut. Smaller pockets of destruction have hit West Virginia (blizzard) and some New England states, such as Rhode Island, New Hampshire, Vermont, maine and Massachusetts.
Getting markets up and running is a fine accomplishment, but registering a slight decline is almost laughable, if the thought of it weren't so warped and disturbing.
Dow 13,096.46, -10.75 (0.08%)
NASDAQ 2,977.23, -10.72 (0.36%)
S&P 500 1,412.16, +0.22(0.02%)
NYSE Composite 8,221.40, +31.20(0.38%)
NASDAQ Volume 1,806,794,500
NYSE Volume 3,542,963,500
Combined NYSE & NASDAQ Advance - Decline: 3106-2429
Combined NYSE & NASDAQ New highs - New lows: 198-124
WTI crude oil: 86.24, +0.56
Gold: 1,719.10, +7.00
Silver: 32.32, +0.50
Thus, it was a time of joyous celebration for the professionals trading at the New York Stock Exchange that, for the first time in two days, equity markets were actually up and functioning. But, that euphoria, which resulted in a wholly predictable, end-of-month window dressing rally at the open, soon turned an eye toward the reality of the devastation and destruction left behind by hurricane Sandy.
Most of lower Manhattan is still without power, the NYSE operating off backup generators, and most of the areas contiguous to Wall Street for many miles to the North, South, East and West, are just beginning to evaluate the extent of the losses.
Most of the New Jersey coast is either underwater, under piles of sand or otherwise devastated; Long Island is a crushed, mangled mess as is Connecticut and most of the other New York boroughs.
Many in the area are still without power, which is slowly returning to some areas, but the losses sustained by people and companies is only now beginning to be felt. Restoration and reconstruction will take months and billions of dollars, the hit to the economy unmistakable, as Wall Street fully understands and began coming to grips with as stocks began to slide shortly after the initial burst leveled off at about 80 points to the good on the Dow.
The rapid turnaround was classic Wall Street hustle, as fund managers snapped up shares at the open to close their books for the month - some for the year - while the sharpies were already shorting the very same shares. There's profit to be made on the downside, and the environment is target rich and ripe for plucking by short-sellers, call sellers and put buyers.
By 10:30 all of the major indices were trading in negative territory, led by the NASDAQ, which itself was brought down by particularly vicious selling in Apple (AAPL), in the aftermath of the firing of two top executives by CEO Tim Cook. It's becoming apparent to everyone that the loss of Steve Jobs was not only a human tragedy, but nobody is there to replace his unique genius and business acumen.
In Europe, which remained open for business as usual over the past two days of Wall Street's shutdown, stocks were mostly down on Monday, up on Tuesday and rallying early Wednesday until finally giving up the ghost late in the sessions, the major indices - England's FTSE, Germany's DAX and France's CAC - all closing lower.
Just about 12:30 pm EDT, a reminder of just how tenuous the entire situation around New York was came from Knight Capital, when the firm, operating under backup power in Jersey City, was forced to shut down for the day, citing that their generators were failing.
Volumes were moderate, considering that many traders were without proper equipment, cell phone service spotty and some traders actually functioning from alternate locations, at home or at satellite offices, though, by the close, the volume ramped up, and the day was one of the better recent volume sessions.
Midday, stocks balanced just above the lows of the session, but buying was timid. As has been the usual mode of operation around Wall Street, traders generally ignored the world around them, sending the S&P and Dow back into positive territory in the final hour, as if nothing at all had occurred, but the move proved unsustainable.
As it has for the past four sessions running, the major indices finished mostly flat, which is patently absurd, as there are corporations taking serious losses from the storm. Reality may set in as time carries onward, but there's no telling how the detached traders in lower Manhattan will treat what will eventually turn out to be one of the costliest natural disasters of all time.
Perhaps the psychology of the control crowd is to not panic, despite evidence to the contrary as pertains to investments, but there is a price to be paid, though, as usual, the analysts will simply lower their expectations for all, and when those are exceeded, will celebrate the great success of what are more and more becoming hollowed-out shells of companies.
There will be days if not weeks of lost productivity, wages and competitiveness across six states: Delaware, Maryland, Pennsylvania, New York, New Jersey and Connecticut. Smaller pockets of destruction have hit West Virginia (blizzard) and some New England states, such as Rhode Island, New Hampshire, Vermont, maine and Massachusetts.
Getting markets up and running is a fine accomplishment, but registering a slight decline is almost laughable, if the thought of it weren't so warped and disturbing.
Dow 13,096.46, -10.75 (0.08%)
NASDAQ 2,977.23, -10.72 (0.36%)
S&P 500 1,412.16, +0.22(0.02%)
NYSE Composite 8,221.40, +31.20(0.38%)
NASDAQ Volume 1,806,794,500
NYSE Volume 3,542,963,500
Combined NYSE & NASDAQ Advance - Decline: 3106-2429
Combined NYSE & NASDAQ New highs - New lows: 198-124
WTI crude oil: 86.24, +0.56
Gold: 1,719.10, +7.00
Silver: 32.32, +0.50
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