Showing posts with label jobs. Show all posts
Showing posts with label jobs. Show all posts

Friday, December 6, 2013

November Jobs: 203,000; So, Now Good News Is Good News?

Highly anticipated all week, the November Non-farm payroll report from the BLS showed 203,000 jobs created during the month. The official unemployment rate fell to 7.0%, which, for all intents and purposes, is pretty close to not just the Fed's 6.5% target for raising interest rates, but not too distant from what is regarded as full employment at five percent unemployed.

Initially thought to be a negative if the number came in anywhere above official estimates of 185,000, index futures got ramped higher and stocks were off to the races, opening with a huge gap higher and maintaining price levels throughout the final session of the first week of December.

For the week, the Dow was down just 66.21 points; the S&P missed closing positive by a mere 0.72; and, the NASDAQ actually closed in the green for the week by 2.63 points.

Opinions varied widely about what the movement in stocks meant, based upon the potential for tapering of the bond buying program by the Fed. In general terms, the Fed now has Wall Street's tacit approval to begin winding down the $85 billion a month program as early as this month. either that, or today's trading, and all the supposed "fearful profit taking" of the first four days of the week were simply short-term momentum trades, rooted in absolutely nothing.

In any case, those who were short the market for the better part of the first four days of the week and then went long at the close on Thursday (cue insider bankster types) were big winners. Anybody who waited for the number to be released prior to the opening on Friday, ate dust.

And that, my friends, is how the game is played. Good news may very well be perceived as bad news, until the size players decide that good news is good news, after all. Pure thievery at a high level is probably the most apt description of how this week played out. A telltale sign was the absurdly low volume, especially coming in anticipation, and, on the heels of a critically "important" number.

Thank goodness, Christmas is less than three weeks away and the retailers haven't had much to say, but that card will be turned shortly, and it could be a wild one.

DOW 16,020.20, +198.69 (+1.26%)
NASDAQ 4,062.52, +29.36 (+0.73%)
S&P 1,805.09, +20.06 (+1.12%)
10-Yr Note 99.03, +0.74 (+0.76%)
NASDAQ Volume 1.49 Bil
NYSE Volume 2.74 Bil
Combined NYSE & NASDAQ Advance - Decline: 3965-1711
Combined NYSE & NASDAQ New highs - New lows: 310-112
WTI crude oil: 97.65, +0.27
Gold: 1,229.00, -2.90
Silver: 19.52, -0.047
Corn: 434.25, +0.75

Friday, November 8, 2013

Green Arrows for Stocks as Non-Farm Payrolls Surprise

As the work-week ended, everything was up, except, of course, gold and silver, because we just can't have those ancient relics of real money ruining the fiat-fest currently underway.

After the government reported October non-farm payrolls up a shocking 204,000 in October and revised August and September reports upward as well, futures slid, in sympathy with the idea that the Fed would - due to the "strong" jobs figure - reconsider its $85 billion-a-month bond-buying binge and begin to taper such efforts.

However, once the markets opened, good news was once again good news, and stocks staged a massive rally, erasing all of the prior day's losses on the major indices, sending the Dow Industrials to another record close.

Mortgage rates rocketed higher on the news, as did treasuries, the 10-year note ripping upward by 13 bips.

The logic may be a bit twisted - then again, what, concerning Wall Street and our current "crisis management" economy isn't? - but here's the take: Sure, the effects of the government shutdown the first two weeks of October were minimized, and the economy was creating jobs, but the unemployment rate actually rose - from 7.2 to 7.3% - due to a decline in the labor force participation rate, which has steadily trended downward for the past decade, making what looked, on the surface, as good news, actually bad news for the economy, which is good news for stocks because the Fed will just keep buying up treasuries and MBS, sloshing even more cheap money into the already liquidity-bloated system.

As usual, bankers and their kindred traders, hedgies and speculators were the main beneficiaries, after selling yesterday on a move that suggests the payroll data was privately leaked, were able to buy on the cheap Friday morning.

That's about the only analysis that makes any sense, though rational, logical arguments aren't always adequate predictors of market economics and trading patterns.

The guys with the inside scoop always do better than Mr. and Mrs. Average Joe and Jane. And they do it every day, whether the market is up or down, because they own the data.

Dow 15,761.78, +167.80 (1.08%)
Nasdaq 3,919.23, +61.90 (1.60%)
S&P 500 1,770.61, +23.46 (1.34%)
10-Yr Bond 2.75%, +0.13
NYSE Volume 3,770,251,500
Nasdaq Volume 1,934,757,875
Combined NYSE & NASDAQ Advance - Decline: 3706-1971
Combined NYSE & NASDAQ New highs - New lows: 231-99
WTI crude oil: 94.60, +0.40
Gold: 1,284.60, -23.90
Silver: 21.32, -0.34
Corn: 426.75, +6.25

Friday, April 5, 2013

March Payrolls Huge Miss; Economy a Pack of Lies, Rolling Over

Let's just get one thing straight: there are lies, statistics and more lies in their interpretation, and even worse prevarication when it comes to market response.

When today's March Non-Farm Payroll data was rolled out at 8:30 am EDT - an hour prior to the opening bell - the response in the futures was automatic and immediate.

On expectations that the recovering US economy was to have produced 197,000 new jobs during the month, the actual number - 88,000 - was a miss of such enormous magnitude that it begs for perspective.

The miss was the worst since December 2009, when the economy was still taking baby steps toward said recovery and it was the lowest number of new jobs since June of last year. Incredibly, the unemployment rate fell to 7.6%, though this was due to 663,000 individuals dropping out of the labor force, sending the labor participation rate to 63.3%, the lowest level since 1979, with a record 90 million Americans (aged 16 and up) out of the labor force.

Surely with numbers like these, the United States is on a sustainable path... to complete disintegration, anarchy and poverty. There simply is no way to get around how poorly the economy is performing, a full five years and three months after it entered recession in December 2007, and four years after it supposedly exited that recession (June 2009).

Whether or not one believes we ever exited the Great Recession (or, as some call it, the Greater Depression) is merely a matter of semantics, the truth is that the economy has been and is going nowhere fast. Growth is a chimera, more statistical noise boosted by inflation; jobs have been hard to come by and those that are available are mostly of the entry-level, burger-flipping variety. Meanwhile, the Federal Reserve continues to pump $85 billion into the banking system each and every month, and still, nothing.

The talking heads on CNBC and Bloomberg tried to blame it on everything from the weather to the sequester to the tax increase imposed in January to, probably, the phase of the moon, but the reality is that we have structural issues that are generational, worldwide and widely the cause of the gross inequalities between rich and poor, with the crony capitalists - in cahoots with cheap, shiftless politicians - pushing more and more debt onto a system already overburdened with it.

Anyone who purports to tell you that the economy is improving, ask them how and why, and wait for the usual non-answers that housing is improving (it's not), that there are more jobs (marginally, there are, but not enough to keep up with population growth) or, the usual, "this is America, and we are great," complete failure response.

The stock market took a huge dive at the open, the Dow losing as many as 172 points, the S&P off by 21 and the NASDAQ down a whopping 58 points before the riggers came in and bid up the whole complex - especially ramping it in the final half hour - to close down with losses erased by roughly two-thirds.

We are in a sad, sorry state of affairs, when what used to be the most efficient, dynamic markets in the world are now nothing more than a crooked casino, run by oligarchs, bankers and unseen hands that are both out of control and above the law.

Significantly, gold and silver were both up sharply on the day, as the flight to safety finally made an appearance.

This economy is rolling over, like a sick patient who hasn't received the correct treatment. We're about to go into a tailspin that will make 2008 look like a casual stroll along the beach. The bankers, politicians and the media continues to spin the happy "recovery" meme, when all data shows the economy going in reverse. Data-wise, the US was a woeful 0-for-6 the past eight days, with the Chicago PMI missing the mark, along with the ISM index, the ISM services index, the ADP employment report, initial unemployment claims and finally, today's non-farm payrolls.

How many misses and bad data points will it take for the politicians to admit their policies are failures, the media to admit they are blind and the bankers admit they've been robbing common people blind since time immemorial?

Nobody should be holding their breath waiting, that's for sure.

Dow 14,565.25, -40.86 (0.28%)
NASDAQ 3,203.86, -21.12 (0.65%)
S&P 500 1,553.28, -6.70 (0.43%)
NYSE Composite 9,000.24, -27.59 (0.31%)
NASDAQ Volume 1,608,289,875
NYSE Volume 3,788,675,500
Combined NYSE & NASDAQ Advance - Decline: 2866-3582
Combined NYSE & NASDAQ New highs - New lows: 118-81
WTI crude oil: 92.70, -0.56
Gold: 1,575.90, +23.50
Silver: 27.22, +0.453

Friday, December 7, 2012

Dow Gets Big Bump from BLS Jobs Data

Stocks got a boost from better-than-expected non-farm payroll data from the BLS, though the labor participation rate continued to slide. There were 146,000 net new jobs created in November, so no reason to blame Hurricane Sandy for anything. October's number was revised drastically lower, from 171K to 138K.

There was no movement on the fiscal cliff non-negotiations, which was supposed to be what Wall Street feared, though, as we've seen throughout the past 4+ years, anything pertaining to the economics of ordinary people or what happens on Main Street, simply gets brushed aside by Wall Street.

The NASDAQ was dragged down and the S&P weighted down by the continuing slide in shares of Apple (AAPL), a stock that is just plain broken after huge speculative plays over the past two years.

Whistling past the grave, indeed.

Dow 13,155.13, +81.09 (0.62%)
Nasdaq 2,978.04, -11.23 (0.38%)
S&P 500 1,418.07, +4.13 (0.29%)
10-Yr Bond 1.63% +0.05
NYSE Volume 3,086,974,000
Nasdaq Volume 1,612,160,125
Combined NYSE & NASDAQ Advance - Decline: 2797-2656
Combined NYSE & NASDAQ New highs - New lows: 123-50
WTI crude oil: 85.93, -0.33
Gold: 1,705.50, +3.70
Silver: 33.13, +0.017

Friday, May 4, 2012

Payroll Number Slams Stocks to the Deck

Yesterday in this space, it was suggested that the immediate future for stocks was all tied to today's non-farm payroll number from the BLS, and, as the ADP figure from Wednesday foretold, the results were lower than expectations and on the whole, put a serious dent in the "road to recovery" theory.

The Bureau of Labor Statistics said 115,000 net new jobs were created in April, and the unemployment rate dipped to 8.1%, though the reason for the decline in unemployment were that more people ran to the end of their unemployment benefits and others left the workforce entirely. The US workforce participation rate shrank to 63.6% of the adult population, the lowest since 1981.

While the 115,000 new jobs are barely enough to keep pace with a growing workforce in normal times, in the abnormality of today, people are not entering the labor force, but leaving it, putting a very large question mark at the end of any discussion regarding jobs in the United State. It is obvious from this report and others before it that the country's businesses are simply not creating enough jobs to get back to anything even close to full employment. The reasons behind the non-hiring conditions are manifold, but are centered on lack of demand in a sluggish economy wracked by over-regulation and conflicting visions of the near future by legislators who have sat upon their hands and watched the economy deteriorate.

Stocks took a beating right at the start and continued their downward trajectory throughout the morning, finally bottoming out around the lunch hour. The remainder of the session was spent wringing hands, with no noticeable movement in either direction, as the major averages settled into a support range.

A variety of analysts took differing views on the NFP number, most making he point that this April number was a kind of "payback" for the strong numbers in January and February. However, those gains were - in a large part - due to accounting tinkering at the BLS with seasonal adjustments heading the suspect list of fudge-makers.

Governments shed 15,000 jobs, so the private sector growth was 130,000, which, after all, is still a gain, but the underlying trends of many marginally-employed people and those dropping out of the workforce remain problematic over the long haul. The 115,000 was well below consensus estimates for 162,000. whatever ways one wishes to spin it or slice it, a miss is still a miss and investors took note along with short term profits.

The results speak for themselves and put the country's economic future more or less on hold until the May numbers are released. That's a long time for uncertainty to fester and other events to take the situation to even worse levels. While a good portion of the labor condition is being led by political considerations, most of it is the pure stuff of economics textbooks. Slack demand and stagnancy, even in an era of absurdly low interest rates, makes hiring decisions problematic and possibly shelved for a future date. The decay of confidence at all levels of the business community continues to feed upon itself in a very non-virtuous loop, the most egregious effects being felt in the small and start-up areas, where most new jobs are created.

Analysts and pundits can make up all the excuses and white lies they like, but the numbers speak for themselves and they are not pretty.

Notably, new lows exceeded new highs for the first time in over a month, losing stocks were widespread, outnumbering winners by a 7:2 ratio. Oil took a severe downturn for the second straight day, closing below $99 per barrel for the first time since February. The $4.05 decline was the largest of 2012. Gas at the retail pump remains stubbornly high, despite recent pull-backs.

Gold and silver rebounded from recent declines, more in sympathy with unstable global economic conditions than any other factor.

Dow 13,038.27, -168.32 (1.27%)
NASDAQ 2,956.34, -67.96 (2.25%)
S&P 500 1,369.10, -22.47 (1.61%)
NYSE Composite 7,933.29, -116.59 (1.45%)
NASDAQ Volume 1,937,374,375
NYSE Volume 3,924,361,250
Combined NYSE & NASDAQ Advance - Decline: 1268-4345
Combined NYSE & NASDAQ New highs - New lows: 88-140
WTI crude oil: 98.49, -4.05
Gold: 1,645.20, 10.40
Silver: 30.43, +0.42

Friday, September 9, 2011

Obama Speech a Big Flop; Greece May Default Over Weekend

The Markets

The rhetoric in President Obama's address to a joint session of congress last night was so far over the top with his screeching, "Pass this jobs bill" over and over ad nauseam that the conclusion is that congress, though they may like some of it, will do everything in its power to delay, disrupt, debate and defeat Obama's American Jobs Act (AJA), and this time they would be doing everyone a favor.

Here's a Daily Kos blogger who lavishes on the praise for Obama's oratorial skill a bit too heavily (for our tastes), but basically has most of the details right.

Here's NPR's take:


The very last thing we need in this country is a bill wrapped in the flag (lest we forget the president advising congressional Republicans to put "country over party") which delivers little more than promises of tax credits to small business, but spends billions on teachers ($35 billion to be exact), repairing schools (the bulk of the $100 billion in infrastructure spending) and cuts the payroll tax contributions for both individuals and small businesses.

If this jobs bill is passed in any form, it's effect on unemployment will be minimal because businesses hire when they need work done, as in servicing more customers, and that just isn't happening in many small, medium and large American businesses. Consumers have been cutting back, and business cuts back to accommodate the slackening demand for their goods and/or services. Nobody hires because the government offers an incentive to do so, except those wishing to game the system, and there are plenty of those around.

No, the congress should delay and defeat any bill which proposes to spend more money we don't have. The first Obama stimulus - a much larger package - has already proven to be a failure, and this bill comes a number of months late and many dollars - and ideas - short.

The reaction from the markets on Friday was a collective sigh and a return to the "sell" button.

Obama's public bust was not the only item that rattled traders over the final session of the week. European markets were hammered down again, and that sent the dollar soaring against the Euro, which meant that the carry trade of shorting the dollar and buying stocks has gone up in smoke and the machines don't have an algo for that.

Persistent rumors that Greece was about to default, possibly over the weekend, sent European bourses down in droves and sent the US Treasury 10-year note to a record low yield of 1.92%. Also roiling markets was the abrupt resignation of ECB chief economist Juergen Stark, apparently over the continued buying of bonds by the ECB.

The combination of the European crisis escalating again and the failure of the president to offer any convincing plan to combat unemployment sent stocks back to levels not seen in nearly three weeks with the Dow closing below 11,000 for the first time since August 22nd.

The S&P 500 broke through several support levels and is only 31 points away from its August 8 closing low of 1119. The NASDAQ fared better, though not by much, finishing 126 points above its August 19 closing low of 2341.84.

If the rumors about Greece prove true, monday's markets could prove a bloodbath of monstrous proportions, but, even if the Greeks decide to play along, the European financial crisis won't simply fade away, nor will the sluggish environment in which the United States is currently embrolied.

Dow 10,992.13, -303.68 (2.69%)
NASDAQ 2,467.99, -61.15 (2.42%)
S&P 500 1,154.23, -31.67 (2.67%)
NYSE Composite 7,045.01, -212.35 (2.93%)
NASDAQ Volume 2,066,526,125
NYSE Volume 5,467,812,500
Combined NYSE & NASDAQ Advance - Decline: 1083-5459
Combined NYSE & NASDAQ New highs - New lows: 22-353
WTI crude oil futures: 87.24, -1.81
Gold: 1859.00, -10.60
Silver: 41.60, -0.74


The woes of Bank of America continue. They and other banks tied up in the robo-signing scandal may still face extensive civil and criminal charges after the 50-state Attorneys General reaches a "global solution" which has been rumored to be about $20 billion. New York AG Eric Schneiderman has been pursuing Bank of America through his own offices and is not participating in the investigation by the other 49 state AGs. Schneiderman is pushing to claim that BofA and others fraudulently transferred securities to investors, pledging the same notes to more than one group. His investigation continues.

Of all the bright guys out there who cover finance, bank analyst Chris Whalen, the founder and managing director of Institutional Risk Analytics, is among the very brightest of all, so when he says Bank of America (BAC) should file for bankruptcy, maybe CEO Brian Moynihan and others should listen. See Whalen make his case in the video below.

Thursday, September 8, 2011

Markets Down Without Cause; Bike Riding offers Solutions

The Markets

Stocks could not follow through - as expected - yesterday's momentum rally, despite there being a paucity of news - good or bad. The only actionable events were the pre-open release of weekly unemployment claims, which came in poorly again, at 414,000, up 2,000 from an upwardly-revised 412,000 in the prior week.

Other than that, the ECB and Bank of England kept key interest rates unchanged, so all there was to do was to sell those stocks which were profitable in yesterday's trading and sit in cash until after the president's 7:00 pm EDT speech in which he is supposed to unveil some sort of jobs program.

The Bernanke speech in Milwaukee was a disappointment to those who wished he would announce QE3 - it's not going to happen - and consisted mainly of the Fed chairman droning on about how weak the economy is and how the Fed stands vigilant to do whatever it can to fix it. The takeaway was that the fed really doesn't have much power any more, having used up all the bullets in their six-shooter. The speech, thus, was a big non-event.

While there's been a multitude of opinion surrounding what the president might say in his speech tonight, whatever his jobs program might be, it's proabably going to consist mainly of an extension of the payroll tax holiday, tax credits to businesses who hire new employees (a program that has great potential to be scammed heavily), some kind of infrastructure "bank" (read: borrow and spend, also great scam potential) to repair more highways, bridges and tunnels, and little else.

The president is relying on bad economic information, which he has since he took office. Mr. Obama neither understands the US economy nor the travails of the average American. If he truly wanted to fix things in this country, he'd force phone, cable and power companies to cut their exorbitant rates, put a nationwide cap of $3.00 per gallon on gasoline at retail, announce a larger and more-encompassing tax holiday, slash medicare and social security contributions and simultaneously cut the pay of every federal government employee by five to ten percent (the tax cuts would ease the pain completely), and repeal the monstrosity that is known as Obamacare.

That isn't going to happen, so expect the US economy to remain moribund for at least another year, probably 18 months, and quite possibly longer. Until the government gets it's act together and begins to understand that the problem is that there aren't enough real jobs in the country to re-employ the 14 million out of work and that borrowing more on band-aid programs aren't going to jump start anything any time soon. The time is right for fundamental changes to entitlements and the grotesque tax code. Whether there's the political will to make these changes is highly doubtful, especially when all the politicians are focused only on keeping their jobs and fighting for control of the White House. The election is still 14 months away, but that's all that occupies the minds of our beloved "leaders."

Dow 11,295.81, -119.05 (1.04%)
NASDAQ 2,529.14, -19.80 (0.78%)
S&P 500 1,185.90, -12.72 (1.06%)
NYSE Compos 7,257.36, -97.81 (1.33%)
NASDAQ Volume 1,951,654,250
NYSE Volume 4,277,785,000
Combined NYSE & NASDAQ Advance - Decline: 1603-4886
Combined NYSE & NASDAQ New highs - New lows: 58-56
WTI crude oil futures: 89.05, -0.29
Gold: 1865.80, +48.50
Silver: 42.34, +0.79


Idea: Ride a Bike Whenever Practical or Possible

It's been said that when you learn how to ride a bike, you never forget, and since most Americans grew up riding bikes as kids and teens, there's probably about 150-200,000 million of us who could get on one and ride without fear of falling off. For many, especially those whose diets have caused them to become grossly overweight or obese, a good, sturdy mountain bike and a two mile ride every day would go a long way toward reducing both their weight and future medical costs from everything from diabetes to heart disease.

The advantages of riding a bike are probably too numerous to mention, but beyond the obvious health benefits, bikes require no fuel at all, except that which comes from the furious pedaling of our little legs. With the price of gas hovering near $4.00 a gallon, every mile trekked on a bicycle is a savings in fuel use and expense. Not only does the savings accrue to the individual, but if enough people substituted driving their cars for trips of under two miles and instead rode a bike, it wouldn't be long before those ridiculous gas prices began coming down, providing a benefit to the whole country.

Economic change is usually accomplished at the fringes, and promoting bike riding as a health and financial benefit is right out there on the outer limits, where economists are generally blind.

Friday, May 6, 2011

Snow Job in May

It is difficult to express just how warped US markets have become, though, from the movements of the past two trading days, a case can be made that the markets are being guided by forces that are distinctively not based on free market ideology nor statistics that can be trusted within any degree of accuracy.

Taking a look first on the massive downdraft in commodities - mostly silver and crude oil - from Thursday's trading, one should look no further than the CME (Chicago Mercantile Exchange), the overarching body that controls trade in futures, options and various other derivatives.

The CME raised margin requirements - the cost to buy a futures contract - on silver four times in the past two weeks. That resulted in many speculators - generally honest traders working with leverage via margin - to reduce their exposure, thereby taking the price of silver from close to $50/ounce on Friday, April 29, to under $35/ounce by Thursday, May 5.

This really doesn't require much thought. If it costs more to buy something - in this case a silver futures contract - you either buy less of it or don't buy at all, waiting until the price is more reasonable. In the case of silver futures contract, a highly inelastic entity (You can't buy a fraction on one; you must buy a full contract.), one is either in or out. When margin requirements (cost) rise rapidly, many legitimate buyers head for the hills. This is exactly what happened all week, culminating in the final thrust downward on Thursday, May 5, as there were also fewer short contract holders which would have provided some support, having to cover as prices fell. Alas, the shorts were also out of the market due to exorbitant margin costs.

This makes a great deal of sense from a banker's perspective. Money flowing into either physical silver or gold is money out of circulation, and, more dangerously, into a competing currency. Precious metals compete with all fiat (paper) currencies, insofar as they are considered stores of wealth and mediums of exchange. Thus, when one buys Silver Eagles, silver bars, etc., bankers get worried because the buyer exchanged paper dollars (or Euros or Yen or Reals) for physical metal. And if the price of physical metal and the amount in circulation gets too high, the need for paper dollars is diminished.

Silver, being the "coin of gentlemen," as opposed to gold, "the coin of the realm (or, kings), is a very dangerous commodity to the banker line of thought. If more and more ordinary people - the "little guys" upon whom the banker depends - conduct transactions in silver - the utility of paper money declines, velocity decreases and all of a sudden there's a liquidity crisis.

This is exactly what the global (mostly in the USA) banking cartel feared as silver approached all-time highs, thus the need for margin hikes to kill the competing currency before it became a real threat.

The same is true for gold, to a lesser degree, as central banks hold gold as a final backstop to their paper currencies, though it is leased out, levered 100-1, and therefore, being a useful conduit for the bankers, not as volatile as silver.

As for oil, what caused Thursday's sell-off is a little less clear, but again, the CME, which owns the NYMEX, where West Texas Intermediate oil futures (the most popular and widely held) are traded, extended trading range limits from $10 to $20, exacerbating an already decisive decline.

In simple terms, the CME allowed oil to fall though the floor simply by changing the rules in the middle of the day. There's less concern in the price of oil declining, because lower oil prices are generally good for everybody outside of oil companies and Middle East sovereigns, so less attention was paid to the CMEs quick decision, but it still underscores the levels at which rules will be either broken or amended to accommodate the needs of the powers behind the money (read: the too big to fail banks, the Fed and Treasury Department).

Now to Friday's fiasco in the Bureau of labor Standards (BLS) non-farm payroll data for April (the establishment survey). While the consensus opinion had been trending toward lowered expectations, the BLS surprised everybody with the announcement of 244,000 new jobs created during the month, 268,000 in the private sector, offset by a loss of 24,000 public sector jobs - mostly municipal and state employees being furloughed.

What's intriguing about the non-farm payroll data is how the numbers are created, and the use of the word "created" is no accident, because the BLS employs such such extreme and convoluted data manipulation that pure statistics become rather murky. It's easy to say that our monthly "jobs data" is more a political process than an actual statistical survey with a margin of error in the low single digits. It's guided by a smallish sample and then amplified by what's known as the "birth/death model," a number created to reflect the number of businesses opening (birth) and closing down (death).

Does the BLS actually sample bankruptcy and new corporation filings in selected communities and states? No. Does the BLS ever adjust the number for seasonality. No. For accuracy, yes, but not in the month-to-month survey numbers.

So, from where did the 244,000 net new jobs in April come? 175,000 came from the birth/death model. And while some are contending that roughly 62,000 came from the widely-published McDonald's hiring, the Wall Street Journal begs to differ, stating that McDonald's hire date was April 19, a week after the BLS survey period.

Taking just the raw data, subtracting out the birth/death figures, the US economy consisting of existing businesses created 69,000 net new jobs - not so hot. If we can believe that a couple hundred thousand newly-minted entrepreneurs joined the business fray and 30 to 40,000 businesses went belly up in the same time frame, we could believe this figure. However, like the missing photo of a dead Osama bin Laden, there's no proof of these "births" and "deaths," only trust in the BLS, which, by the way, stretched credulity again by proclaiming the official unemployment rate to have risen, up to nine per cent (9%).

That rise correlated to the other side of the BLS coin, the household survey, which showed the number of employed persons to have fallen by 190,000 from the March reporting period to April.

Is it a gain of 244,000 jobs or a loss of 190,000? Who knows? The point is that many decisions are made based upon the BLS data, which, as shown, is more guesswork and massaging of data than trustworthy data, but one wonders if these decisions are based on reality, a perception of reality, or if the reality is being superimposed upon the American public to suit the current narrative of "recovery."

Whatever the case, it seems a shoddy way to run a country's economy, with dodgy data and questionable maneuvers by those running the exchanges.

It doesn't snow much in the USA in May, but that surely doesn't preclude a massive snow job by Wall Street and the federal government and their extensions.

Tuesday, September 7, 2010

Markets Slump on Abysmal Volume; Politics Plays the Market

Let's face it. The financial meltdown that occurred in the Fall of 2008 damaged Wall Street far beyond anyone's imagination. Whether the crisis was real, contrived or a true panic, the number of participants since then - and the fruitless bailouts that followed - have diminished greatly. While everyone wanted to believe that more players would show up after the Labor Day holiday, the expected rush of traders simply failed to materialize this Tuesday, a stark reminder of the lack of confidence spreading across US markets.

The continuing low-volume regime should surprise nobody. After shrinking from 4-6 per cent in August, the "marketeers" last week managed a roughly 4% rebound in just the first three days of September. Investors are not foolish people generally, and they can sense when something is not right. The consensus among individual investors is that the market is completely rigged in favor of the big brokerages, hedge funds and other not-so-visible participants and have thus departed, some for good.

There's also the question of overall liquidity which has affected the velocity or volume of trade. Smaller firms and individuals are strapped for cash, in addition to being wary of the market, and simply cannot play. This has been the resounding theme since mid-summer, and appears to be actually getting worse as the November elections near.

Indices and averages are being hoisted and levered down by the same parties in an attempt to lure in more suckers (investors), but nobody seems to want to play this game any more. It's pretty obvious that politics are going to play a huge role in the direction of stocks over the next few months, so, despite the market being an unsound place for money, there are two definite directional plays that could be made rather simply.

First, the powers that be are nearly certain to desire an end to the reign of Democrats. President Obama and his cohorts in congress haven't made many friends on Wall Street, so the big money is courting Republicans in the Fall. The first trade is to go short from now until the elections, with the best time to get out right at the end of October. After that, go long, presaging Republican victories in the House and maybe even taking a majority in the senate.

These moves have nothing to do with fundamentals, only with the perception Wall Street wishes to make. They and their Republican lackeys want the economy on its knees heading into November, showing the Democrats to be weak and ineffective, and they have the perfect vehicle with which to accomplish their goal, the thinly-traded, but highly-watched stock market. The Dow should fall below 9500 at some point in the next two months (should be there already), and then immediately after Republican wins on November 2, rally back above the magical 10,000 mark, probably going as high as 10,700 or thereabout.

Sad but probably true, the stock market is no longer a secure platform for trading stocks, but more a political vehicle of the controlling elite. Today's sorry volume figures - and all those of the past four weeks - give credence to this approach.

Stocks spent the entire day trading in a narrow range in the red, finishing at the lows of the day, indicating not only a lack of participation, but a lack of confidence. Not surprising, since the best the Obama administration can do these days to spur the economy is suggest another $50 billion be spent on roads, bridges and airport runways. While that's great for the concrete makers and construction workers, it has no meaning in the lives of average Americans who don't shovel, grind or gird.

Obama also outlined an estimated $200 billion in tax breaks for businesses that invest in new plants and equipment and a $100 billion extension of business tax credits for R&D and, as usual, absolutely nothing for small businesses, those with between one and ten employees, which are the backbone of the economy and entrepreneurship. The federal government would better serve the people by just handing out checks to everyone or doing nothing rather than trotting out the old "infrastructure" canard. It's been done and accomplished nothing already, so another crack at it is merely more grandstanding by a president and advisors without clues. Tax breaks for big business also won't serve to stimulate growth in the economy or create jobs.

Dow 10,340.69, -107.24 (1.03%)
NASDAQ 2,208.89, -24.86 (1.11%)
S&P 500 1,091.84, -12.67 (1.15%)
NYSE Composite 6,959.94, -95.09 (1.35%)


Declining issues took the measure of advancers, 4366-1388, though new highs remained to the high side of new lows, 259-50, though these figures are likely being influenced significantly to the upside by the number of stocks recently delisted (a big secret) and the usual pumping up of otherwise losing issues. As explained earlier, volume continued to be absurdly low, to a point that is increasingly difficult to describe.

NASDAQ Volume 1,566,149,625
NYSE Volume 3,036,956,000


Oil was down again, losing 51 cents, to $74.09. Gold traded in record territory, up $8.10, to $1,257.30 at the close, while silver slipped a little after an impressive weeks-long run, dropping just three cents, to $19.88.

Trading was so thin and reaction to Obama's new proposals so negative, it left many wondering just how long the economy can hold on without another significant decline in not only stocks, but in the overall quality of life. Being that we're only in the second or third inning of this particular baseball analogy, there are sure to be more foul balls than home runs in coming months and years. The market could spin out of control at any time, though the small number of players left on the field might prevent a real slide from happening with the ferocity witnessed in 2008 and 2009.

Thursday, June 3, 2010

Amidst Confusion, NASDAQ Gains; Jobs Data Looms

There are more than just a few trades riding on the release of tomorrow's BLS non farm payroll report for May. Estimates for the number of jobs created in the US economy during the month run the gamut from 250,000 to 600,000, the latter number suggested as a best guess by the intrepid mind of Jan Hatzius at Goldman Sachs, who has a history of being generally close, often far off, but almost always too optimistic.

The Hatzius estimate is anecdotally cute, in that he calls for private sector job growth of just 150,000, with the rest of the number comprised of temporary census hires.

A couple of hints as to how strong the job growth was during the month came from a few sources. On Wednesday, both President Obama and Vice President Biden hinted strongly in separate speeches that the figures would be substantial, but on Thursday, two real pieces of economic data, the ADP private sector report [PDF] and the weekly report of new and continuing unemployment claims, suggested something of the opposite.

The ADP report, which is generally reliable to be as accurate or even moreso than the overly-massaged government figures, pegged private sector job growth for May at a fairly tepid 55,000. Initial unemployment claims came in at 453,000, still stubbornly high, with continuing claims at 4.67 million, a staggering figure and suggestive that job creation simply isn't occurring in the private sector, or at least that permanent jobs are not being created.

Meanwhile, pesky problems such as the European debt crisis, the Gulf of Mexico oil slick, and China canceling a planned trip to the country by US Secretary of Defense Robert Gates, dogged investors throughout the session.

Stocks zig-zagged all over the map, with internals reflecting the rocky trading. The Dow was up 65 points early, down 75 points by midday, and rallied off the lows into the close for a fairly flat trade. The NASDAQ demonstrated leadership in energy and tech shares, the index positive throughout the session.

The NASDAQ is also the only one of the majors to show positive returns for the year.

Dow 10,255.28, +5.74 (0.06%)
NASDAQ 2,303.03, +21.96 (0.96%)
S&P 500 1,102.83, +4.45 (0.41%)
NYSE Composite 6,860.43, +20.82 (0.30%)


By the end of the session, advancers held a solid advantage over declining issues, 5015-2447, and new highs took back the edge over new lows, 154-70. Volume was light once again, as many traders have stepped away in advance of the non farm payroll report.

NYSE Volume 5,404,948,000.00
NASDAQ Volume 2,063,167,375.00


Commodities were mixed. Crude oil for July delivery gained $1.75, to $74.61, on a government report that showed a decrease in supply. The oddity of the oil market is its apparent one-way bias. During the winter, when the same weekly report as today's continually showed excess supply, the price advanced regardless. With supply down, it's logical for prices to rise, though the opposite should be true on oversupply, but it isn't.

Gold fell sharply, down one percent, or $12.30, to $1,208.30. Silver also lost ground, giving up 38 cents, to settle at $17.92.

As is usually the case the first week of any month, too much emphasis is being placed on the jobs data, especially considering that the numbers coming from government are often wildly off-the-mark and subject to massive revisions in future months.

After Wednesday's huge run-up and the flatness of Thursday's trade, it appears that a robust number has already been priced in, and traders could be in for a rout. The alternative, under consideration that the jobs numbers come in solid or surprisingly better than expected, is for investors and momentum players to swing sentiment to wildly optimistic and end the week with another mammoth gain.

Either scenario could emerge, though this may prove to be the economy's last stand before more realistic data confirms or denies the existence of any kind of recovery. From what's been shown thus far, the billions and trillions of dollars thrown into stimulus and for the sake of saving numerous financial institutions has produced at best a weak rebound.

Tuesday, April 13, 2010

Greece Gets Great Loans; Talbot's a Loser; Stocks Tack on More Gains

If anybody out there can offer advice on how to write the same story 33 different ways, I'll be your first subscriber, because that has been my primary task since February 8, the date of the last interim bottom on the Dow.

While the index hasn't been going straight up, it often seems that way, as, over the span of the past 44 trading days, the Dow has advanced 33 of them. That's a 3-1 ratio of up days over down, and a winning investing formula in anyone's book. I admit, due to my disbelief in the overall economic recovery that everyone keeps talking about but nobody sees, to have completely missed this 1100+ point rally.

That's my fault, but I'm also not about to jump in at these seemingly inflated levels, either. I remain steadfastly, stubbornly, in cash, and it's not a matter of wanting to catch the next low, because I probably won't be investing in stocks for the next few years, at least not US stocks.

Today was more of the broken record variety of days on the Street. Stocks were up, though not by much. Earnings are beginning to trickle into investor equations, with Alcoa (AA) announcing earnings in line with forecasts on Monday at 10 cents per share in the 1st quarter on revenue of $4.9 billion, lower than consensus estimates of $5.24 billion.

After the closing bell today, Intel (INTC) announced 1st quarter results of 43 cents per share, beating the street consensus of 38 cents. Revenue for the chip giant was $10.3 billion, on expectations of $9.84 billion.

Earnings season is off to a good start. Even a company like Talbot's showed a profit of 7 cents per share, even better if you exclude one-time items (Why not? It's a party!). The women's retailer then shows 13 cents per share.

The company had been on the brink of failure, but has redefined itself over the past two years. Still, it's profit was a mere $4.1 million for the quarter, but shares rose significantly due to the amount of short interest. Selling at nearly $15 per share, investors are taking a pretty heavy risk with Talbot's. The company shows negative return on equity, virtually no growth, a p/e of 27 and nearly a half billion dollars in debt. That debt burden alone is enough to keep heavy volume investors away and the shorts making their downside bets.

Talbot's looks a lot like the nation of Greece, which should be the subject of some focus due to the favorable loans it secured from the EU and IMF. Greece will be able to finance its debts at around 5%, or about 100-120 basis points below market rates. The unusually-generous terms have been applied because all of the European finance ministers understand that a Greek default would likely have a severe domino effect on countries like Portugal, Italy, Ireland and Spain. The stronger nations, especially Germany, would likewise be affected, either having to underwrite immense losses or suffer a collapse of its own economy or the Euro.

While a decoupling from the Euro might be the very best thing for the Germans and the continent as a whole, scrapping the entire Euro project has not been something widely anticipated, though it could very well happen within the next 2-3 years. The Southern countries aren't nearly as industrious as their Northern neighbors, and the German populace isn't taking kindly to the concept of bailing out countries which cannot manage their internal budgets. Giving Greece better terms than the very best borrowers, when they are, in fact, sub-prime, at best, reeks of the kind of unfair "picking winners" that was a hallmark of the infamous bank bailouts in the US.

With Greece, failure is being rewarded. With Talbot's, failure has only been delayed. The losers will be the investors who could not judge the risk, as it should be.

Dow 11,019.42, +13.45 (0.12%)
NASDAQ 2,465.99, +8.12 (0.33%)
S&P 500 1,197.30, +0.82 (0.07%)
NYSE Composite 7,638.35, -3.40 (0.04%)


Volume was a little bit perkier than normal, possibly owing to options expiration on Friday or the flood of earnings announcements due out over the next two weeks. Advancing issues outnumbered losers, though marginally, 3362-3108. New highs bettered new lows, 646-50.

NYSE Volume 5,806,878,000
NASDAQ Volume 2,557,582,750


As oil dropped for the fifth straight day, CNN Money ran this headline, Oil declines on oversupply worries. All we can say, after watching naked speculation take the price above $87 last week is, "no kidding?" Crude dropped another 29 cents, to $84.05 on the day, which is still $20-35 above where it should be. The oil speculators are so concerned about keeping the price this high due to imminent, continuing threats of production cuts by the oil-rich nations of the mid-East. Their economies are teetering on insolvency and a price of at least $80 per barrel is needed to keep them current on payments. Eventually, somebody's going to see the light and force the price lower, despite the economic realities facing the royal Suadis and other potentates in the region. Maybe Russia.

Gold dropped $8.80, to $1,152.80, while silver slid 16 cents to $18.24. Once again, the metals are unable to break out to new highs, for reasons that should, by now, be pretty obvious to everyone.

Where are the jobs, and how about that housing market?

Monday, February 1, 2010

My Open Letter to Senator Charles Schumer

I've been trying (in vain) to find the bill which helped me in 1983-84 hire a young woman as an advertising sales executive for what was then my fledgling newspaper, Downtown Magazine.

I was able to determine that it must have been part of the 1983 Emergency Employment Act, but little else, so, upon hearing that Senator Schumer and others were going to propose another "tax credit" type bill in coming days, I decided to query New York's senior Senator. The text of my message appears below:

------------------------------

Dear Senator Schumer,

Please have somebody on your staff research the 1983 Emergency Employment Act. I ask that you do this because I believe I was an employer who received great benefit from the implementation of one of the programs.

I had started up a newspaper in Rochester, NY in 1982 and it was just beginning to turn a small profit in '83. I don't recall the specific agency, but, if my memory serves correct, the deal was that if I hired an unemployed person - and I did - the government (it may have been NY State or the US) agreed to pay half of the wages for a period of time - I believe it was six months.

This was a great program and allowed me to hire a young woman to sell advertising for my newspaper. She and I both benefitted. She got a job and I got half of my money back over the first six months of her employment.

It was a pretty nice, simple arrangement. All I had to do was pay her on time, submit proof of payment (and all taxes and withholding was paid by me) once a month, and the agency cut me a check for half of her gross pay.

Now, I believe that this kind of program would get people back to work in a hurry, especially if targeted at small businesses with less than 10 employees, or some other similar threshold. It worked for me, and, incidentally, the woman worked for me for a few more years after that initial six months, so the job was not "make work," but real, productive employment.

It is my firm conviction that the federal government has not done enough for small business during this financial downturn, and that a jobs bill that actually puts money into the hands of employers, rather than shadowy tax breaks or credits, offers the true path to recovery.

My belief is that small businesses, which create 75-90% of all jobs in this country, can do what Wall Street, the Fed, Treasury and congress have been unable to do, but, we need some help and some time in which to do so.

I trust that you and your staff will give this matter serious consideration. I am going to publish this entire communication on my blog,
http://moneydaily.blogspot.com

so, I expect a positive response. Please, stop the pandering and posturing and propose a jobs bill that works from the bottom up.

Thank you,

Rick Gagliano
Publisher, Downtown Magazine (dtmagazine.com)
Money Daily

Friday, August 7, 2009

Jobs Data Sends US Equities Rocketing Higher

An hour prior to the opening bell, the first really strong message that the US economy might actually be entering a recovery appeared in the form of the US Labor Department's July Non-farm Payroll Report, which showed the loss of jobs declining to its lowest level since August 2008. The number of jobs gone begging in July was -247,000, well below the estimated 325-350,000 which had been predicted. The unemployment rate actually fell, due to shrinkage in the total labor pool, down to 9.4%, from 9.5% in June.

Investors cheered the news, at one point sending the Dow Jones Industrials up over 150 points. Afternoon trading trimmed some of the gains, but it was the best showing for stocks in two weeks and the 4th straight week of improvement on the major indices.

The NASDAQ surpassed the magic 2000 mark, while the S&P 500 leaped over 1000. The Dow closed at its highest point since November 4, 2008 (9625.28). Nothing more than continued improvement in employment was needed to send stocks on a tear. If payrolls continue to be slashed at ever-smaller rates, month-over-month, that will be absolutely the tonic the US economy needs to begin a growth path and for companies to eventually begin hiring. The creation of American jobs is the #1 issue facing the economy and the news of the day put a positive tint on the entire labor picture.

Dow 9,370.07, +113.81 (1.23%)
NASDAQ 2,000.25, +27.09 (1.37%)
S&P 500 1,010.48, +13.40 (1.34%)
NYSE Composite 6,586.71, +69.04 (1.06%)


Advancing issues finished well ahead of decliners in the broad-based rally, 4749-1729, while new highs continued to sprout up, numbering 210 on the day, as compared to just 79 new lows. The only small negative was volume, which tracked a bit slower than the previous two down sessions, though not considerably. With the amount of fund money still in hiding, there still seems to be a mood of caution, though Monday may prove to be a test of how long investors are willing to watch profits slip by before taking the plunge back into stocks.

NYSE Volume 1,484,737,000
NASDAQ Volume 2,345,724,000


Commodities were almost uniformly priced lower, with September light crude losing $1.01, to $70.93 and gold slipping $3.40, to $959.50. Silver bucked the trend, gaining 2 cents, to $14.67.

The jobs data was about as positive a sign investors have seen since the depths of the financial crisis in the Fall of 2008 and Winter of 2009. Credit for averting a major economic catastrophe must be awarded to Ben Bernanke and the Federal Reserve, for the unorthodox methods used to pump money into the US economy through a variety of means.

While the lasting affects of the Fed's many moves are still unknown, it's nearly certain that their actions helped keep the economy of not only the US, but the entire world, from falling off a cliff.

Thursday, February 5, 2009

Bad News Rally? Really?

Once the opening bell rang, investors knew what to do after seeing the latest round of initial unemployment claims coming in at a record number, 626,000. All of the major indices dropped right out of the gate, building losses until right around 10:30 am, with the usual suspects, banks and related financial firms, leading the way.

Adding to the early Thursday thumping was the 4th quarter report from Cisco (CSCO), along with a very disappointing outlook for Q1 of 2009.

Additionally, a slew of retailers reported same-store sales falling in the range of 15-25% in January. Overall, there wasn't much good news about.

But, then word hit the street that “mark-to-market” accounting rules might be suspended to provide additional relief to banks and financial institutions. In other words, banks would be able to hide bad debts deep in the bowels of their books. Fine. Dandy. More phony accounting should be just the elixir to pull the nation out of its deflationary tailspin.

I have a word for what the government has been doing and continues to do regarding the banks. It's called "manipulation."

Massaging the bank's books aren't going to magically make the bad paper go away. Toxic CDO and MBS are bad, plain and simple. Allowing the banks to put them into a tier of liabilities or assets that doesn't realistically reflect their market value only delays the eventual reckoning. It was the suggested "mark to model" accounting, by which the banks were able to conceal their liabilities in the gobbledegook of their accounting which was largely responsible for the entire mess to begin with. Now, the "change agents" in the federal government believe that a return to those failed and false standards will somehow turn the tide.

Rubbish. Absolute garbage and trash. The government has no silver bullet. The answer is to allow the market to function by bankrupting all of the major players (Bank of America, Citigroup, Goldman Sachs, JP Morgan, Morgan Stanley, et. al.) who are INSOLVENT. Instead, the government and Wall Street is conspiring to continue the rape of the American taxpayer by propping up these failed institutions. They are plotting nothing less than the destruction of the United States of America.

So, the market soars on the news. The Dow, in particular, turned a 110-point loss at 10:30 am to a 150-point gain just after noon. The other indices registered similar moves and finished at or near the highs of the day. Not surprisingly, the banking sector was up sharply.

Dow 8,063.07, +106.41 (1.34%)
NASDAQ 1,546.24, +31.19 (2.06%)
S&P 500 845.85, +13.62 (1.64%)
NYSE Composite 5,326.01, +83.26 (1.59%)


So, there you have it. Bad news almost all around, but because the feds offer easier accounting rules, everything is magically worth more today than yesterday. Not only is our government completely off the rails, they are taking all of the money with them through the corrupt, failed banking system. If Americans ever understand the truth rather than accepting the pablum spoon-fed to them daily by the equally-complicit mainstream media, there would be marches and sit-ins in Washington which would make the record crowds at Obama's inauguration look like a high-school picnic - that is, if the American people somehow rediscover their spines.

Of course, most of the American population has been placated by either poverty, the media, handouts (welfare and extended unemployment benefits) or a noxious combination of all three. Largely, the American public is a brain-dead, limp and nearly lifeless non-entity. They don't have a voice in their politics and those who actually understand what's happening are marginalized as kooks or conspirators. Our rights have been gradually stripped away (and not restored by the current administration) to the point at which we barely matter. Congress and the president do as they please. Wall Street openly steals billions of dollars. Americans pay their bills, struggle to make ends meet, try to get by, hundreds of thousands of Kentuckians are still in the dark and cold, recalling images of hurricane Katrina and the aftermath of New Orleans. Sick. Sick Sick.

Tracking the day's trends, advancing issues beat back losers, 4155-1308, but, new lows continued to hold a large edge over new highs, 288-12. Volume was very high, especially at the open (down) and into the close (flat) as the powers at work threw everything they had into the market to prevent the dissipation of the day's gains. The bull-bear struggle from 3:30 to 4:00 pm was monumental, even though the indices barely budged.

NYSE Volume 1,627,892,000
NASDAQ Volume 2,563,955,000


Commodity markets responded as would be expected. Oil rose by 85 cents, to $41.17. Gold was up $12.00, to $914.20; silver advanced another 28 cents, to $12.75.

Naturally, all the efforts of the pumpers and pimps of the market could not overcome the monumental resistance line set up at 8149 on the Dow... not even coming close. Friday morning will prove to be quite interesting. The Bureau of Labor Statistics releases their non-farms payroll report for January at 8:30 am. The consensus is for another loss of 525,000 jobs. ADP has already (on Wednesday) released their independent figure for January at -522,000 jobs for January. Whichever way the BLS decides to massage their figures will decide the line of the day's trade. Anything significantly over their "consensus" figure should cause a decline. Anything at or below the figure will trigger a monster rally. Either way, its the sucker trade of the week, or year, or... well, there have been so many sucker moves lately that it may just fall in line with the rest of them.

Suck it up, America. The oligarchs cannot be inconvenienced.

Monday, January 26, 2009

What the Market Knows (and Washington Doesn't)

Monday's attempted push into higher ground was cut short by the very same forces which pushed it down to these levels in the first place: jobs, bank failures and government deficits.

The key sticking point, which the market understands (as do most chartists, but not politicians) is the 8149 level on the Dow. Why that spot is so stubborn and steadfast, not allowing movement beyond it, now that it has been violated, is that it is the interim closing low (Dec. 1) following the devastating bottom of November 20 (7552.29). Since violating this level by closing at 7949.09 on January 20, the index has tried to break out every day since. On January 21, the Dow did manage to hold on, at the close, at 8228.10, but since has closed below 8149 three consecutive sessions.

This is a troubling scenario. Not even the unexpected rise in existing home sales (+6.5%, though the median home price continues to fall) and the Conference Board's rosier outcome in the Leading Indicators (+0.3%) could keep stocks sufficiently in the green to call today's effort a true rally.

As a matter of fact, the Dow finished more than 100 points off its high, which was achieved shortly after the pair of announcements at 10:00 am. It was only a late day surge that allowed the index to finish with any gain at all. Other indices were similarly in positive territory at the close, though with marginal gains.

Dow 8,116.03, +38.47 (0.48%)
NASDAQ 1,489.46, +12.17 (0.82%)
S&P 500 836.57, +4.62 (0.56%)
NYSE Composite 5,244.67, +49.12 (0.95%)


Perhaps equally troubling was the lack of commitment as measured by volume, off sharply from last week's somewhat more spirited efforts. On the day, advancing issues finished well ahead of decliners, 4207-2354, though the gap between new lows and highs remains troubling, with new lows ahead once more, 200-16.

NYSE Volume 1,269,394,000
NASDAQ Volume 1,841,378,000


Crude oil finished the day with a loss of 74 cents, easing to $45.73 at the close after trading as high as $48.05. Gold continued its own little winning streak, gaining $13.00, to $910.70. the first close above the $900 mark since early December. Silver tagged along with a gain of 17 cents, closing at $12.11. We are beginning to be convinced that the only safe place for your cash - besides in a mattress - is in precious metals.

What the politicians in Washington don't seem to understand at this juncture is twofold: first, that the stock market will not respond blindly to their grandstanding on economic issues and postures on bailouts, stimulus packages and the like, and second, that the number of Americans out of work or underemployed has now reached crisis proportions.

Just today, another 68,000+ layoffs were announced, by titans such as Caterpillar (20,000), Pfizer (merging with Wyeth, 26,000), Sprint Nextel (8000) and Home Depot (7000). Other companies, such as Dutch financial firm ING, and farm equipment maker Deere, also announced layoffs which slice across national borders.

The US economy shed 2.6 million jobs in 2008 - the most since 1945 - and there have already been 200,000 announced layoffs this year, though the real figures of unemployed and underemployed continue to spiral to nosebleed levels. Some estimates have the total of both groups already at 13-15% of the adult labor force.

In Washington, there's plenty of pomp and posture about how to correct the dilemma, but it surely seems that the worst is still ahead as the effects of multiple retail chain store closings and the consequent defaults in commercial loan portfolios begin to ripple through the economy.

Our political leaders have yet to either catch on or level with the American people about the depth of our economic crisis, preferring to "stick to their agenda" while offering little in the way of serious stimulative effort.

The stock market is just another ticking time bomb at this point. Anybody telling you to buy stocks here just doesn't understand the fix we're in and might as well instruct you to throw money down a well.

Friday, July 6, 2007

Benign Jobs Data Spurs Stocks

The Labor Department set the tone on Friday, with a report suggesting the US economy is growing at a moderate pace, creating 132,000 new jobs in June. On the news - released an hour prior to the opening bell, investors snatched up shares even as oil prices approached all-time highs.

Dow 13,611.68 +45.84; NASDAQ 2,666.51 +9.86; S&P 500 1,530.44 +5.04; NYSE Composite 10,075.39 +49.15

While the new jobs created were in line with expectations, the continuing rise in the price of oil - up a full $1 on the NYMERC to $72.81 - may be expected, though hardly welcome.

Advancing issues outpaced decliners by a 7-5 margin, There were 459 new highs to just 112 new lows. The numbers suggest the markets are ready for another upsurge, with the Dow poised just 65 points short of recent highs set on June 4.

Gold and silver fought back to levels seen on Tuesday. Overall, the week was more marking time for the metals than anything substantive.