The melt-up continues in equities as the dollar continues deteriorating, losing another 0.39% on the day, dipping to post-Lehman crash (fall 2008) level at 74.09 after briefly crossing below 74.
We're witnessing a rather non-virtuous cycle here which is roughly 200 Dow points for every percentage decline on the DXY, so, if what's intended is the Dow above 13,000, expect another 2.5% decline in the value of the good, old greenback. Also expect a similar rise in the cost of everything you need to buy from outside the US, i.e., imports, which would include almost everything, and especially everything sold in any Wal-Mart store, the nation's largest retailer.
So, good news on Wall Street translates into generally bad news for the public American, except that 5, 10, 20 or 30 years from now, that money you keep pumping into your 401k or retirement plan is just going to be a mountain of cash! Unfortunately, by that time - if the market hasn't already crashed or you haven't already kicked the bucket, everything will cost enormously more than it does today, except, of course, your home, which continues to fall in value.
Stocks got an able assist from both the declining dollar and Uncle Benji, who delivered another $1.5 billion in free cash flow for the Primary Dealers on Wednesday, so there might have been just a little overhang, since settlement was today.
Of course, the markets would normally have been lower considering the economic news. The weekly new unemployment claims came in at 403,000, well above estimates (bad!), and the Philadelphia Fed's monthly Business Outlook Survey took a tumble in April to 18.5, from 43.4 in March (very bad!)
Not to worry, the maestros of our destruction are taking Good Friday off to pray for all of us. HAHAHAHA!
Dow 12,505.99, +52.45 (0.42%)
NASDAQ 2,820.16, +17.65 (0.63%)
S&P 500 1,337.38, +7.02 (0.53%)
NYSE Composite 8,504.36, +46.71 (0.55%)
As expected, advancing issues outnumbered decliners, 4214-2301. NASDAQ new highs: 143; new lows: 20. NYSE new highs: 224; new lows: 10. Volume was an absolute embarrassment, making all other data virtually meaningless. The only traders are computers whirring at the big brokerages and a few hedge funds which are allowed to play. Individual investors have been permanently spooked out of the Ponzi-style, POMO-driven US stock market.
NASDAQ Volume 1,856,856,375
NYSE Volume 3,947,026,500
Crude oil futures gained 84 cents, to $112.29. Yes, if gas isn't $4.00 a gallon where you live, it soon will be, and $5.00 in California, New York, Chicago and Hawaii are soon to come.
Gold finally closed above $1500 on the COMEX, hitting $1,503.80, a gain on the day of $4.80. Silver was up more than 4.5%, gaining $1.60, to close at another 31-year high of $46.06. Unbelievable! Silver is up 145% in just the last year and is likely to double again within two years, if not sooner.
Happy Easter!
Showing posts with label gas. Show all posts
Showing posts with label gas. Show all posts
Thursday, April 21, 2011
Monday, April 4, 2011
No Volume, No Follow-through After Jobs Data
With the markets closing Friday in a state of ebullience and optimism, the Monday morning hangover was worse than expected.
Stocks got out of the gate well, with the averages hitting their highs of the day early on, but there was no catalyst and thus, no enthusiasm for either buying or selling, though tech stocks suffered more than most.
Stocks drifted in listless fashion on what will almost certainly turn out to be one of the five lowest trading volume sessions of the year thus far. Appetite for risk has been muted by world events, the least of which being the continuing saga of the nuclear reactors melting down at Fukushima Daiichi facility in Japan.
High levels of radiation have been found hither and fro, even in the United States, where air and water readings were above safe levels in communities from the West coast all the way east to Pennsylvania.
As for Japan itself, the situation appears even more out of control, as both the government and TEPCO, the utility company responsible for the failures, have run out of viable options for containment. If not for the "fear factor" the mainstream media would be full of horror stories, but the prevailing wisdom is not to alarm the populace over what looks to be already as bad as or worse than the disaster of Chernobyl, 25 years ago, a man-made calamity now estimated to have caused over a million deaths and multiple times that number in birth defects, miscarriages, and diseases.
With Japan's nuclear woes - where the "dead zone" is expected to eventually be 30 to 40 miles in all directions from the plant - the general mood of the people is a thinly-disguised panic and a heightened level of distrust of authorities. Said distrust is with good cause. The officials handling the situation are either incompetent, stupid, afraid or a combination of all three, and have yet to reassure the Japanese people of anything, other than the situation remains a catastrophe with potential to become even worse.
High gas prices have also put a damper on the proceedings worldwide, with both Brent crude and West Texas Intermediate (WTI) hitting 33-month highs on the day. Continued unrest in the oil-rich Middle East and North African countries - Libya, Bahrain, Kuwait, Yemen and now Ivory Coast - haven't helped slow down the oil rally and the onset of $4/gallon gas in the US.
So, little surprise that nothing is moving in the world of high finance.
Dow 12,400.03, +23.31 (0.19%)
NASDAQ 2,789.19, -0.41 (0.01%)
S&P 500 1,332.87, +0.46 (0.03%)
NYSE Composite 8,482.41, +13.07 (0.15%)
The level of disdain could be clearly seen in market internals. Advancing issues narrowly bettered decliners on the day, 3006-2630, though NASDAQ new highs soared against new lows, 222-30, while on the NYSE, the bias was the same, with new highs beating new lows, 259-15. As mentioned earlier, volume was extremely light.
NASDAQ Volume 1,679,897,000
NYSE Volume 3,273,874,500
WTI crude futures hit $108.47, a gain of 53 cents, the highest level since June of 2008. Prices above $4.00 per gallon for regular unleaded have been reported in New York, Chicago and various California locales.
Gold inched closer to all-time highs, gaining $4.10, to $1,433.00, while silver exploded to 31-year highs, ending the NY session on the COMEX at $38.49, on a gain of 76 cents (2%).
The stark comparisons between the economic climate today and that of 2008 could not be clearer. High oil and gas prices, a stagnating stock market close to multi-year highs nearing the end of a long bull run, ramping foreclosures and falling real estate values, and political uncertainty carry all the trademarks which eventually led to the great unwinding in Fall 2008.
Three years hence, after trillions of dollars in stimulus, the very same banks that caused the calamity before are still leveraged to the hilt, hiding liabilities off the books and still in denial over their true, illiquid conditions.
For mood to change so impressively from good to bad over the weekend is stunning. Americans and the world at large should be prepared for another round of asset-crushing deflation once the Fed decides to stop printing dollars into existence come June.
Stocks got out of the gate well, with the averages hitting their highs of the day early on, but there was no catalyst and thus, no enthusiasm for either buying or selling, though tech stocks suffered more than most.
Stocks drifted in listless fashion on what will almost certainly turn out to be one of the five lowest trading volume sessions of the year thus far. Appetite for risk has been muted by world events, the least of which being the continuing saga of the nuclear reactors melting down at Fukushima Daiichi facility in Japan.
High levels of radiation have been found hither and fro, even in the United States, where air and water readings were above safe levels in communities from the West coast all the way east to Pennsylvania.
As for Japan itself, the situation appears even more out of control, as both the government and TEPCO, the utility company responsible for the failures, have run out of viable options for containment. If not for the "fear factor" the mainstream media would be full of horror stories, but the prevailing wisdom is not to alarm the populace over what looks to be already as bad as or worse than the disaster of Chernobyl, 25 years ago, a man-made calamity now estimated to have caused over a million deaths and multiple times that number in birth defects, miscarriages, and diseases.
With Japan's nuclear woes - where the "dead zone" is expected to eventually be 30 to 40 miles in all directions from the plant - the general mood of the people is a thinly-disguised panic and a heightened level of distrust of authorities. Said distrust is with good cause. The officials handling the situation are either incompetent, stupid, afraid or a combination of all three, and have yet to reassure the Japanese people of anything, other than the situation remains a catastrophe with potential to become even worse.
High gas prices have also put a damper on the proceedings worldwide, with both Brent crude and West Texas Intermediate (WTI) hitting 33-month highs on the day. Continued unrest in the oil-rich Middle East and North African countries - Libya, Bahrain, Kuwait, Yemen and now Ivory Coast - haven't helped slow down the oil rally and the onset of $4/gallon gas in the US.
So, little surprise that nothing is moving in the world of high finance.
Dow 12,400.03, +23.31 (0.19%)
NASDAQ 2,789.19, -0.41 (0.01%)
S&P 500 1,332.87, +0.46 (0.03%)
NYSE Composite 8,482.41, +13.07 (0.15%)
The level of disdain could be clearly seen in market internals. Advancing issues narrowly bettered decliners on the day, 3006-2630, though NASDAQ new highs soared against new lows, 222-30, while on the NYSE, the bias was the same, with new highs beating new lows, 259-15. As mentioned earlier, volume was extremely light.
NASDAQ Volume 1,679,897,000
NYSE Volume 3,273,874,500
WTI crude futures hit $108.47, a gain of 53 cents, the highest level since June of 2008. Prices above $4.00 per gallon for regular unleaded have been reported in New York, Chicago and various California locales.
Gold inched closer to all-time highs, gaining $4.10, to $1,433.00, while silver exploded to 31-year highs, ending the NY session on the COMEX at $38.49, on a gain of 76 cents (2%).
The stark comparisons between the economic climate today and that of 2008 could not be clearer. High oil and gas prices, a stagnating stock market close to multi-year highs nearing the end of a long bull run, ramping foreclosures and falling real estate values, and political uncertainty carry all the trademarks which eventually led to the great unwinding in Fall 2008.
Three years hence, after trillions of dollars in stimulus, the very same banks that caused the calamity before are still leveraged to the hilt, hiding liabilities off the books and still in denial over their true, illiquid conditions.
For mood to change so impressively from good to bad over the weekend is stunning. Americans and the world at large should be prepared for another round of asset-crushing deflation once the Fed decides to stop printing dollars into existence come June.
Monday, April 21, 2008
Oil and Gas Killing Economy
Regardless of the causes, the recent spike in the prices of crude oil and gasoline are killing the US and other economies. Middle and lower class consumers are the hardest hit and also the least likely to continue spending on other goods and services, since the cost of transportation has risen more than 35% over the past year and has also caused the price of another basic element of life - food - to skyrocket in the past 3 months.
Higher energy prices overall are great for oil and utility companies, but they come at the expense of curtailed retail spending in nearly all other areas and also contribute to a vicious price spiral since almost all goods are transported. Similarly, most services have energy expenses they cannot absorb, and these are passed along to the consumer in the guide of higher prices.
Thus far, the stock markets and big business have been able to maintain profitability in the face of spiraling fuel costs, but a significant pullback by consumers will damage (and already have) some segments of the business community. It's difficult to cut back on fuel expenses for most individuals, so in this case, the Exxons and Chevrons of the world win, at the expense of everything else.
Dow 12,825.02 -24.34; NASDAQ 2,408.04 +5.07 (0.21%) S&P 500 1,388.17 -2.16; NYSE Composite 9,312.29 +2.05
The major indices finished mixed, with the Dow and S&P lower, while the NASDAQ and NYSE Composite posted marginal gains. Actually, all of the indices were lower for the better part of the day, but regained much of what they lost thanks to a late-day surge.
After all was said and done, declining issues outpaced advancers, 3521-2749. New highs outdid new lows for the second straight session, though only marginally, 183-177. All indications are that the market is searching for direction in the aftermath of 4-5% gains last week.
Oil closed at a new record of $117.48, up 79 cents on the day. Gold gained $2.40 to $917.60, while silver lost 46 cents to close at $17.36.
Companies reporting earnings were mostly in line with expectations, though Bank of America (BAC) experienced a 77% decline in earnings for the first quarter on a year-over-year basis.
Bank of America's shares dropped 95 cents, to $37.61.
NYSE Volume 3,379,862,250
NASDAQ Volume 1,636,458,250
Higher energy prices overall are great for oil and utility companies, but they come at the expense of curtailed retail spending in nearly all other areas and also contribute to a vicious price spiral since almost all goods are transported. Similarly, most services have energy expenses they cannot absorb, and these are passed along to the consumer in the guide of higher prices.
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The entire world is feeling the pain from the seemingly unending rise in the price of basic fuel, and with gas nationwide at $3.50 per gallon in the US, average people and businesses are having a hard time keeping pace, much less enjoying the fruits of their labors.Forex Foreign Currency Exchange Trading Beginner's Resource Center.
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Thus far, the stock markets and big business have been able to maintain profitability in the face of spiraling fuel costs, but a significant pullback by consumers will damage (and already have) some segments of the business community. It's difficult to cut back on fuel expenses for most individuals, so in this case, the Exxons and Chevrons of the world win, at the expense of everything else.
Dow 12,825.02 -24.34; NASDAQ 2,408.04 +5.07 (0.21%) S&P 500 1,388.17 -2.16; NYSE Composite 9,312.29 +2.05
The major indices finished mixed, with the Dow and S&P lower, while the NASDAQ and NYSE Composite posted marginal gains. Actually, all of the indices were lower for the better part of the day, but regained much of what they lost thanks to a late-day surge.
After all was said and done, declining issues outpaced advancers, 3521-2749. New highs outdid new lows for the second straight session, though only marginally, 183-177. All indications are that the market is searching for direction in the aftermath of 4-5% gains last week.
Oil closed at a new record of $117.48, up 79 cents on the day. Gold gained $2.40 to $917.60, while silver lost 46 cents to close at $17.36.
Companies reporting earnings were mostly in line with expectations, though Bank of America (BAC) experienced a 77% decline in earnings for the first quarter on a year-over-year basis.
Bank of America's shares dropped 95 cents, to $37.61.
NYSE Volume 3,379,862,250
NASDAQ Volume 1,636,458,250
Monday, July 23, 2007
Dwindling Gains and Is OPEC Friendly?
After barely surpassing the magical 14,000 mark last week, the Dow Jones Industrials struggled to get close again on Money Monday, but close was all they could do. The blue chip index got as close as 27 points from the mark, but that was all, and the index closed some 30 points below that level.
Dow 13,943.42 +92.34; NASDAQ 2,690.58 +2.98; S&P 500 1,545.90 +11.80; NYSE Composite 10,121.58 +41.65
While the Dow and S&P were up handily, the NASDAQ didn't fare quite so well, rising just less than 3 points on the session.
Earnings were still the driver, with Merck (MRK) and Schering-Plough (SGP) getting off first thing in the morning, prior to the open.
Decliners actually led advancing issues by a narrow ratio of roughly 16-15, while new highs narrowly beat new lows, 327-286. These numbers are in line with our own expectations that this earnings season is not as robust as Wall Street might like. With a preliminary reading on 2nd quarter GDP due out on Friday, this week could determine direction for the remainder of the summer, and it's not looking particularly encouraging.
Who's the best friend of the American motorist? Would you believe OPEC President and UAE Energy Minister Mohammed al-Hamli? How about Hasan Qabazard?
Concerned over high prices, al-Hamli said that the world economy was still expanding, despite the exorbitant price for crude. Analysts saw his comment as indicative that OPEC may announce a supply increase at their September meeting.
Qabazard, head of OPEC's global research division, stated separately that a price of between $60 and $65 per barrel would be advantageous for both producers and consumers.
Light crude settled 90 cents lower at $74.89 a barrel on the New York Mercantile Exchange. Kudos to our friends in the Arabian world! They actually may be more concerned - and effective - about lowering gas prices than our very own Congress or President. Ya gotta have friends...
Meanwhile, the rally in gold and silver was cut short, with both falling marginally on Monday.
With techs showing some weakness today and after-hours and readings on existing and new home sales due Wednesday and Thursday, respectively, Tuesday may be a good time to exit positions if the market doesn't respond well by mid-day.
Tomorrow's earnings calendar is reasonably heavy, with reports due from Amazon.com (AMZN), AT&T (T), DuPont (DD), Eli Lilly (LLY), JetBlue Airways (JBLU), McDonald's (MCD), Occidental Petroleum (OXY), PepsiCo (PEP), UPS (UPS), United States Steel (X), and many, many others.
Dow 13,943.42 +92.34; NASDAQ 2,690.58 +2.98; S&P 500 1,545.90 +11.80; NYSE Composite 10,121.58 +41.65
While the Dow and S&P were up handily, the NASDAQ didn't fare quite so well, rising just less than 3 points on the session.
Earnings were still the driver, with Merck (MRK) and Schering-Plough (SGP) getting off first thing in the morning, prior to the open.
- Merck (MRK) said second-quarter net income rose to $1.68 billion, or 77 cents a share, from $1.5 billion, or 69 cents a share, a year earlier. Excluding restructuring and other charges, official earnings rose to 82 cents a share from 73 cents a share a year ago, exceeding the widely-held forecast of 72 cents per share. Shares of Merck soared on the news, up 3.31 to 52.33.
- Schering-Plough (SGP): Net income climbed to $517 million, or 34 cents per share, after preferred dividends for the quarter ended June 30 from $237 million, or 16 cents per share, a year ago. The stock lost 19 cents, closing the session at 31.30.
- For Dick Cheney lovers (and who doesn't love Dick?), Halliburton (HAL) reported net income of $1.53 billion, or $1.62 a share, up from $591 million, or 55 cents, a year earlier. The most recent quarter's results include a gain of $933 million relating to the KBR split. Analysts were only looking for 56 cents, so the stock made a new 52-week high during the trading session before closing up 1.17 at $37.74.
- After the close, American Express (AXP) reported second quarter net income for the quarter also totaled $1.1 billion, up 12 percent from $945 million a year ago, and 0.88 per share, up 16 percent from 0.76. Analysts were seeking 0.86 and their solid quarter should help stocks on Tuesday.
- Texas Instruments (TXN) reported revenue of $3.42 billion for the second quarter of 2007. Earnings per share (EPS) were $0.42, down from 0.47 in the year-ago period. The results were in line with expectations, but the results will do little to excite tech investors.
Decliners actually led advancing issues by a narrow ratio of roughly 16-15, while new highs narrowly beat new lows, 327-286. These numbers are in line with our own expectations that this earnings season is not as robust as Wall Street might like. With a preliminary reading on 2nd quarter GDP due out on Friday, this week could determine direction for the remainder of the summer, and it's not looking particularly encouraging.
Who's the best friend of the American motorist? Would you believe OPEC President and UAE Energy Minister Mohammed al-Hamli? How about Hasan Qabazard?
Concerned over high prices, al-Hamli said that the world economy was still expanding, despite the exorbitant price for crude. Analysts saw his comment as indicative that OPEC may announce a supply increase at their September meeting.
Qabazard, head of OPEC's global research division, stated separately that a price of between $60 and $65 per barrel would be advantageous for both producers and consumers.
Light crude settled 90 cents lower at $74.89 a barrel on the New York Mercantile Exchange. Kudos to our friends in the Arabian world! They actually may be more concerned - and effective - about lowering gas prices than our very own Congress or President. Ya gotta have friends...
Meanwhile, the rally in gold and silver was cut short, with both falling marginally on Monday.
With techs showing some weakness today and after-hours and readings on existing and new home sales due Wednesday and Thursday, respectively, Tuesday may be a good time to exit positions if the market doesn't respond well by mid-day.
Tomorrow's earnings calendar is reasonably heavy, with reports due from Amazon.com (AMZN), AT&T (T), DuPont (DD), Eli Lilly (LLY), JetBlue Airways (JBLU), McDonald's (MCD), Occidental Petroleum (OXY), PepsiCo (PEP), UPS (UPS), United States Steel (X), and many, many others.
Tuesday, May 29, 2007
Another Nice NASDAQ Notion
Tech stocks are all the rage again, at least for today. The biggest gains were once again in the tech-heavy NASDAQ index, which was up better than a half percent on a day that the other indices barely budged.
Dow 13,521.34 +14.06; NASDAQ 2,572.06 +14.87; S&P 500 1,518.11 +2.38; NYSE Composite 9,892.49 +16.38
As mentioned here in previous posts, there are good reasons to like tech, especially internet or chip-related issues. Many businesses begun in the red-hot heyday of the 90's are now mature or maturing, solidifying their market positions and bringing down exceptional profits.
Tech fell somewhat out of favor after the dotcom bust of 2000 and it's yet to fully recover. The NASDAQ index is still only half way back from its all-time high, so there are undervalued companies with plenty of upside. Besides that, the blue chips are somewhat overbought and fund managers are looking to mid- and small-caps for more gains in the 2nd half of 2007.
The M&A hawks are also on the lookout for takeover or take private companies in tech. Many of the best have market caps of less than $30 billion. Tech takeovers could be de rigeur in the waning years of the 2000s decade.
Overall, advancing issues surpassed decliners by a nearly 2-1 margin on light volume. New highs checked in at 305, while there was nary a new low to be found - only 73 of them on the day.
The lack of volume was indicative of two matters: Summer and complacency. The nice weather is usually a harbinger of a prevailing slowdown in trading activity. There also was a paucity of economic and/or corporate news to digest, though the consumer confidence numbers released by the Conference Board were surprisingly upbeat and that set the tone for Tuesday.
And, shockingly, with the holiday driving done for now, the price of oil magically fell on the NY-MERC, as light, sweet crude dropped $1.90 to close at $63.30. Drivers should expect some - though not much - relief at the pump over the next three to four weeks. Of course, prices will go higher as the 4th of July holiday approaches due to (wink, wink) supply and demand, of course.
Gold and silver made modest gains but remain rangebound, depressed and somewhat overpriced.
It's a short work week, so expect the most volatility - if there is any at all - to occur on Wednesday and/or Thursday.
Dow 13,521.34 +14.06; NASDAQ 2,572.06 +14.87; S&P 500 1,518.11 +2.38; NYSE Composite 9,892.49 +16.38
As mentioned here in previous posts, there are good reasons to like tech, especially internet or chip-related issues. Many businesses begun in the red-hot heyday of the 90's are now mature or maturing, solidifying their market positions and bringing down exceptional profits.
Tech fell somewhat out of favor after the dotcom bust of 2000 and it's yet to fully recover. The NASDAQ index is still only half way back from its all-time high, so there are undervalued companies with plenty of upside. Besides that, the blue chips are somewhat overbought and fund managers are looking to mid- and small-caps for more gains in the 2nd half of 2007.
The M&A hawks are also on the lookout for takeover or take private companies in tech. Many of the best have market caps of less than $30 billion. Tech takeovers could be de rigeur in the waning years of the 2000s decade.
Overall, advancing issues surpassed decliners by a nearly 2-1 margin on light volume. New highs checked in at 305, while there was nary a new low to be found - only 73 of them on the day.
The lack of volume was indicative of two matters: Summer and complacency. The nice weather is usually a harbinger of a prevailing slowdown in trading activity. There also was a paucity of economic and/or corporate news to digest, though the consumer confidence numbers released by the Conference Board were surprisingly upbeat and that set the tone for Tuesday.
And, shockingly, with the holiday driving done for now, the price of oil magically fell on the NY-MERC, as light, sweet crude dropped $1.90 to close at $63.30. Drivers should expect some - though not much - relief at the pump over the next three to four weeks. Of course, prices will go higher as the 4th of July holiday approaches due to (wink, wink) supply and demand, of course.
Gold and silver made modest gains but remain rangebound, depressed and somewhat overpriced.
It's a short work week, so expect the most volatility - if there is any at all - to occur on Wednesday and/or Thursday.
Friday, May 25, 2007
Stocks Rebound From Greenspan's China Gambit
Shares of US equities rebounded on Friday ahead of the Memorial Day weekend, apparently shrugging off suggestions from former Fed chairman Alan Greenspan, who opined that China stocks were overvalued and needed "correcting." Well, that's his opinion and China is China, not the USA. Stocks in the US are still the "gold" standard by which all other markets are measured, as the US is seen by most as having the most stable and mature markets. Risk is spread out among multiple millions and billions of shares on many stocks, adding to the appeal.
Adios, Mr. Greenspan. Have a nice retirement.
Dow 13,507.28 +66.15; NASDAQ 2,557.19 +19.27; S&P 500 1,515.73 +8.22; NYSE Composite 9,876.11 +63.60
All major indices were up smartly on the day, with the NASDAQ once again getting the best percentage gain (0.76%). Techs truly rule in this environment and many companies have been growing by leaps and bounds since the meltdown of 2000.
Stocks overall were led by a better than 2-1 margin of advancing issues over decliners.
While stock traders were having a solid day, so too the players on the oil bourses, who pumped the price of crude up another $1.02 to $65.20. Gas prices are at an all-time high in the US - that's not news to anybody - and after this holiday weekend, something has to be done to ameliorate the heavy price consumers are paying. The gluttony of the oil companies still threatens to derail the entire US economy, though, sadly, the Congress and the president have not shown leadership on the issue of protecting the public well-being.
Gold and silver gained marginally, but are still at multi-month lows.
For the week, the Dow fell by 49 points, the NASDAQ was down 1 point and change, the S&P 500 lost 7 points. Better days are just ahead as the S&P hints towards an all-time high.
Adios, Mr. Greenspan. Have a nice retirement.
Dow 13,507.28 +66.15; NASDAQ 2,557.19 +19.27; S&P 500 1,515.73 +8.22; NYSE Composite 9,876.11 +63.60
All major indices were up smartly on the day, with the NASDAQ once again getting the best percentage gain (0.76%). Techs truly rule in this environment and many companies have been growing by leaps and bounds since the meltdown of 2000.
Stocks overall were led by a better than 2-1 margin of advancing issues over decliners.
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However, there were only 167 new highs and 98 new lows, the closest those two measures have been to each other in quite a while - well over a month. The lack of new highs - down significantly from the 400+ a week ago - may be due to profit-taking. There's no sin in taking profits on a stock that has made new highs and the end of May, in the midst of a long, long bull market is certainly not beyond reasonable trading etiquette.Choose your own colors, dates and message for maximum impact.
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While stock traders were having a solid day, so too the players on the oil bourses, who pumped the price of crude up another $1.02 to $65.20. Gas prices are at an all-time high in the US - that's not news to anybody - and after this holiday weekend, something has to be done to ameliorate the heavy price consumers are paying. The gluttony of the oil companies still threatens to derail the entire US economy, though, sadly, the Congress and the president have not shown leadership on the issue of protecting the public well-being.
Gold and silver gained marginally, but are still at multi-month lows.
For the week, the Dow fell by 49 points, the NASDAQ was down 1 point and change, the S&P 500 lost 7 points. Better days are just ahead as the S&P hints towards an all-time high.
Monday, May 14, 2007
New Top for Dow, Other Indices Fall Late; Gas at Record $3.10 per Gallon
The markets were cruising along in positive territory Monday until mid-day when everything began to slide. By the close, only the Dow remained on the plus side, setting another record high finish.
Dow 13,346.78 +20.56; NASDAQ 2,546.44 -15.78; S&P 500 1,503.15 -2.70; NYSE Composite 9,765.38 -21.65
It was a split decision in more ways than one. Declining issues beat advancers by a better than 2-1 margin, though new highs upticked to 386 against 116 new lows. There's a bit of churning going on as investors take profits, reassess and reinvest.
According to general assumptions, much of today's action was attributable to apprehension regarding the monthly release of the government's Consumer Price Index figures, the April numbers due out tomorrow morning prior to the market's open.
Dow 13,346.78 +20.56; NASDAQ 2,546.44 -15.78; S&P 500 1,503.15 -2.70; NYSE Composite 9,765.38 -21.65
It was a split decision in more ways than one. Declining issues beat advancers by a better than 2-1 margin, though new highs upticked to 386 against 116 new lows. There's a bit of churning going on as investors take profits, reassess and reinvest.
According to general assumptions, much of today's action was attributable to apprehension regarding the monthly release of the government's Consumer Price Index figures, the April numbers due out tomorrow morning prior to the market's open.
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Conventional wisdom seems to be that if the numbers are bad (i.e., they show an inflationary trend), the Fed may be influenced to do nothing, or worse, raise rates, when the markets are hoping for some easing. If the headline number comes in at 0.5% or less, with the core at 0.2%, that should allay investor fears, but anything over those figures will be cause for concern, especially at the Fed, which has vowed for years to keep inflation under control while failing miserably in the process.
Regardless of Fed performance, Bernanke and company has made reference to an "inflation target" of between 1 and 2 % (using the core number, of course, which excluded food and energy) and they will use the tried and true interest rate hike to cool off the economy should they determine inflationary risk to be at an intolerable level.
Whatever the Fed does has little to do with the fundamentals of individual stocks, though an interest rate increase would cast a significant pall over Wall Street. Most days are precarious for investors and speculators, though being in record territory does impart some peculiar thought processes. On the one hand, stocks are robust and the economic picture is rosy. Meanwhile, the pessimist sees this high-flying behavior an open invitation for everything to come crashing down.
In the long run, it's probably going to take an event more significant than a 25 basis point hike in the federal funds rate to stop the party.
Side notes: Sure enough, the only time I make a prediction on an individual stock, it goes the other way. On Wednesday of last week, I noted that Marvel Enterprises (MVL) may be considered for a long term hold. As of today, it has slipped nearly 3 points from where I called it a buy to 26.81. I called the stock with an 18-month upside in the 38-42 range. I suppose all I can do now is reiterate my position. At it's current level Marvel sports a forward P/E ratio around 17. It is shouting, "buy" now; any lower, it will be screaming. This is not a falling knife situation. Once options expire on Friday, expect a congenial rebound.
Lest I forget, oil grabbed a bid on a Saudi pledge not to increase production. It closed modestly higher, up 9 cents to $62.46, and every American must be grateful to our Vice President, Mr. Cheney, for all he did while in the Middle East last week. The Lundberg Survey quoted the national average for unleaded regular gas at an all-time high of $3.10 per gallon on Monday.
Tomorrow, May 15, is the date certain for the "American gas boycott" whereby we're not supposed to buy any gas. Nobody seriously expects the effort to have any effect at all, though the sentiment of millions will be with anyone who refrains for a day. A better solution would be to have a national no-driving day. That could be effective.
I have two suggestions. One is to stay home and drink Canadian beer. In most northern states, it can be had for about the same price per gallon as gas, and it goes into you, not your car. Plus, the effects on one's mental well being are far superior.
My second suggestion is for Big Oil to just skip $4/gallon and go straight to $5. They have shown no propensity to stop increasing the price, so why not just goose it up good? They can always lower it later on and look good by comparison.
Gold and silver were both off marginally. Somehow, their fates are tied to oil's, though the relationship has become tenuous at best.
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