Showing posts with label inventories. Show all posts
Showing posts with label inventories. Show all posts

Wednesday, April 13, 2016

Retail Sales, Inventory, PPI Fall; Stocks Full Steam Ahead

Events of the day no longer matter, as we are clearly in the final stages of a global financial catastrophe, one which few will see coming, though signs of malaise and deconstruction are everywhere.

On the day, March retail sales were reported to be off by 0.3%, that being a negative, as opposed to a positive, which was expected. Despite the obvious collapse of the consumer pocketbook, stocks disregarded the data - as per usual - and marched higher, with the Dow Jones Industrial Average arching towards the magic 18,000 mark, a number that has not been seen on Wall Street or anywhere since mid-July of last year.

PPI, an inaccurate guide to wholesale inflation, fell 0.1%, on expectations of a rise of 0.3%, another blow to the Fed's inflation targeting of two percent, and yet another arrow in the quiver of the punchy speculators who view all bad economic news as good.

Business inventories for February also fell, by 0.1%, a result of over-ramping holiday buying without the resultant sales. Businesses find themselves largely overstocked, and have no need to build inventories, especially at a time in which the global economy is either not growing at all or actually contracting.

Meanwhile, anecdotal reports of falling food prices are rafting throughout the US economy. One consumer reported a dozen eggs at $1.50, when they were $3.00 or more just six months ago, due largely to a 2015 bird flu which decimated the nation's chicken population.

Therein lies the conundrum: with gas prices low, food prices falling, consumers are still finding difficulty opening their wallets and spending. Primary culprits include excessive taxation, health care (Obamacare), college tuition, and high housing costs, be they either renting or owning, and, since making ends meet via interest on savings has become a relic of a bygone era, people are also paying down debt.

It doesn't matter to Wall Street. Main Street could shrivel up and die - which, in many smaller cities it already has - and stocks would still enjoy the speculative splendor of negligible interest rates.

Splurge, baby, splurge.

DJIA: 17,908.28, +187.03
S&P 500: 2,082.42, +20.70
NASDAQ: 4,947.42, +75.33

Crude Oil 41.55 -1.47% Gold 1,244.10 -1.33% EUR/USD 1.1277 -0.95% 10-Yr Bond 1.76 -1.07% Corn 373.75 +3.03% Copper 2.17 +1.14% Silver 16.24 +0.08% Natural Gas 2.04 +1.80% Russell 2000 1,129.93 +2.19% VIX 13.84 -6.80% BATS 1000 20,682.61 0.00% GBP/USD 1.4206 -0.43% USD/JPY 109.3075 +0.67%

Friday, March 12, 2010

Sellers Creeping into Market

Call it what you will, but today's action was indicative - as all of the past week has been - of uncertainty about further stock market advances and profit-taking.

Stocks have stalled on low volume, though with the steady supply of cheap money being fed into the system, the small, fractional gains could continue, though sharper players probably have already exited profitable positions.

Dow 10,624.69, +12.85 (0.12%)
NASDAQ 2,367.66, -0.80 (0.03%)
S&P 500 1,149.99, -0.25 (0.02%)
NYSE Composite 7,362.85, +9.61 (0.13%)

Internal indicators are still positive, however, with advancing issues eking out a win over decliners, 3378-3127. That was the closest margin in days, if not weeks. New highs came in explosively, at 805, but the number of new lows also climbed, to 69 on the day. Volume continues to be stuck in neutral; very low participation is indicated.

NYSE Volume 5,506,876,500
NASDAQ Volume 2,035,983,000

Commodities were flat, with oil dipping 6 cents, to $81.24. Gold lost $1.20, to $1,107.00, and silver fell 17 cents, to $17.03. An interesting indicator is the gold-silver ratio, which has been out of whack since 2003, but on pull-backs, silver, with more industrial uses than gold, usually gets hit harder. It's an interesting dynamic. Silver will follow gold to the upside, but generally underperform it. On the downside, it may be instructive as a predictor of future gold moves. Since silver is more closely tied to the real economy, it goes to reason that it would feel the pinch prior to its cousin gold, which is almost entirely an investment instrument.

A couple of data points should have moved the market, and might have been partially responsible for the poor showing on Friday. Retail sales were strong in February, up 0.3%, but january was revised sharply lower, from +0.5 to +0.1. That revision may have put a scare into investors, sensing that the current numbers were likely overstated. If so, that would jibe with the Michigan Sentiment survey, which fell to 72.5 from 73.6 in February.

Additionally, inventories were flat when the expectation was for a noticeable build. It didn't occur, thus, skepticism prevailed, and the market doesn't appreciate any kind of uncertainty, of which there is more than enough to go around.

At least the weather is improving and can't be blamed for anything.

Friday, September 11, 2009

Remembering 9/11; No Break for Bears; Gold Tops $1000

The trading day began with moments of silence... remembering the victims of the awful attacks on the World Trade Center 8 years earlier. At the close, strangely enough, the Dow Jones Industrials stood 0.10 lower than the close on September 10, 2001. It was a sombre session, within a tight trading range, the mood almost preoccupied with previous events.

While many market participants recalled 9/11, others were focused on more current disasters, namely the fall of Lehman Brothers, which occurred just one year prior. The US economy and the markets have been through a metaphorical wringer since last September, witnessing the near-collapse of the entire financial system, followed, thankfully, by a subsequent recovery.

Though all of the major indices closed lower on the day, ending a five-day winning streak for the bulls, the losses were barely noticeable. For the week, the Dow finished ahead by 164 points, the NASDAQ improved by 62, and the S&P added 26 points, all reinforcing the recovery wind that has swept over the financial landscape.

Dow 9,605.41. -22.07 (0.23%)
NASDAQ 2,080.90, -3.12 (0.15%)
S&P 500 1,042.73, -1.41 (0.14%)
NYSE Composite 6,843.82, -6.99 (0.10%)

Market internals ended on a mixed note, with decliners gaining a small, late advantage over advancing issues, 3223-3205. New highs continued to dominate new lows, however, 349-88, giving every indication that the rally will not wilt soon. Volume returned to its sluggish ways, with trading activity close to the lowest level of the week, though the NASDAQ still seems to be the place to which money is flowing.

NYSE Volume 1,388,797,000
NASDAQ Volume 2,347,513,000

Economic reports offered some vague insights. Consumer sentiment shot up to 70.2 for September, after a showing of 65.7 in August. Wholesale inventories dropped 1.4%, the 11th consecutive monthly decline. This shows that goods are still moving at a very sluggish pace and wholesalers are playing close to the vest, though eventually manufacturers will be called upon to replenish inventories. When that begins to happen, a strong reaction by the markets is almost assured.

Another positive sign came at 2:00, when the US Treasury announced a budget deficit for August of $111.4B, when analysts were expecting much worse, though the markets barely noticed.

Commodities finished in very mixed fashion. Oil was hammered down $2.65, to $69.29, on oversupply concerns, but gold finally topped the $1000 mark, ending with a gain of $9.60, at $1,006.40. Silver lagged, up only 3 cents, to $16.70.

From a chartist's perspective, the trading day was positive for bulls, as stocks advanced in the early going, fell to the lows of the day shortly after noon and then recovered into the close. With the slightly lower finish, it has set the classic bear trap for the opening session next week.