Whatever happens in Europe over the next week or so apparently is going to be positive, if one reads the tea leaves of Wall Street correctly. Either that, or, a lot of people cashed in on some front-end options contracts, as today was October options expiration.
While a 200+ point gain on the Dow Jones Industrials is always a good way to end the week, in the current environment, there are still skeptics about, though caution has not been a solid strategy these past four weeks as the Dow put in its fourth consecutive weekly gain, amidst positive earnings news from a host of companies, including McDonald's (MCD), Honeywell (HON) and Verizon (VZ).
Thumbing their collective noses at naysayers and the protesters of the Occupy Wall Street movement, Wall Streeters pushed stocks to their highest levels since August 8th, and beyond the recent range that had kept the major indices bottled up for the past two-and-a-half months.
The Dow would have been down for the week without Friday's huge upswing, as Monday's 247-point decline took some getting past. For the week the Dow ended up 164 points, the S&P added 38, but the NASDAQ actually lost 30 points, mostly on the earnings miss by market leader Apple (AAPL).
Overall sentiment has turned bullish, though headwinds still prevail and caution is still advised by many. At least on this day, worries over the future of Greece, Italy and the Euro nations were out of focus and the market traded somewhat on fundamentals provided by strong earnings from a host of companies.
It was an odd day in that almost everything was up, including favored commodities, oil, gold and even silver.
Economic data continued to suggest sluggish growth as unemployment claims were down, though not by much, and leading indicators edged 0.2% higher. Existing home sales were disappointing, reported on Thursday at an annual rate of 4.91M for September. The US economy is still balanced on a precipice, buoyed on one side by smashing results from corporations, but weighed down by housing, employment and the European debt crisis.
For today, at least, the stock market shrugged off the negativity and moved ahead boldly. That will likely change in coming weeks as Europe continues to grapple with its over-leveraged conditions and US banks try to hide behind earnings manipulations. This is still not a bear market, though it could become one with more ease than most realize, though it is in everyone's best interests to keep the carousel turning.
Dow 11,808.79, +267.01 (2.31%)
NASDAQ 2,637.46, +38.84 (1.49%)
S&P 500 1,238.25, +22.86 (1.88%)
NYSE Composite 7,431.10, +157.20 (2.16%)
NASDAQ Volume 1,976,088,875
NYSE Volume 4,858,157,000
Combined NYSE & NASDAQ Advance - Decline: 5308-1180
Combined NYSE & NASDAQ New highs - New lows: 98-33
WTI crude oil: 87.40, +1.33
Gold: 1,636.10, +23.20
Silver: 31.19, +0.91
Friday, October 21, 2011
Thursday, October 20, 2011
Citi, Bank of America in Massive Fail Mode; Euro Leaders Diddle Over EFSF
The European mess got so badly confused it crashed this writer's browser and about half the post was washed into the ether. In any case, conflicting reports from the Eurozone make this weekend's EFSF-fest look something like this: Finance ministers of the various Euro nations will meet on Friday; German Chencellor Angela Merkel and French President Nicolas Sarkozy will meet on Saturday; the rest is somewhat hazy due to conflicting reports, but the whole she-band of the 2 trillion Euro bailout fund (which may include 5:1 leverage) should be wrapped up and delivered to the panting, waiting world on Sunday, or Wednesday, maybe.
That is the kind of music the Europeans are playing above the din of Wall Street's stressed markets, making them zig-zag with even more amplitude than under the normal rigging of the HFT computers. Stocks were down, then up, then sideways, then finally finished mostly flat.
What is on one hand frustrating and on the other wildly amusing is that all the nations of Europe don't have 2 trillion Euros to rub together, much less 10 trillion once the fund goes the leverage route. Get ready for massive currency devaluation and market disruptions as the Eurozone embarks on an experiment in quantitative easing (money printing) that makes Ben Bernanke's Federal Reserve look like amateurs.
While all the noise and fury from Europe was making trading something resembling a kindergarten face-painting class, a couple of items concerning a couple of US banks the media forgot to mention appeared on the web.
Apparently aiming for the honor of headline of the month, the New York Post reports, Citi fined $285M for selling dog$#!t paper.
It appears that the SEC stopped watching porn for a few minutes to slap a fine on Citigroup for selling mortgage-backed securities (MBS) to their clients they knew were dog$#!t and, a la Goldman Sachs, bet against them in the derivatives market. The fine amounts to a small fraction of the beating investors continue to take and a spec of dust compared to what Citi and the other TBTF banks did to the US and global financial and housing markets.
Good for those few non-porn-addicted officials at the SEC for finally waking up, albeit three years late, and doing somewhat of the right thing, though, as usual, Citi admits no wrongdoing and no executives have been fined, jailed or slaughtered for public delight... yet. That's why we have the Occupy Wall Street movement. They may not have defined demands, but, in general they hate the mega-banks and the people who run them.
Then there's Bank of America, which has been shuckin' and jivin' so much they seem to be shadowboxing with themselves in a mirror inside a kaleidoscope. Their recent maladies are summed up in an article by the erudite by barely comprehensible Chris Whalen of Risk Analytics, in an article entitled, Is Bank of America preparing for a Chapter 11? published by Reuters UK, because apparently the average reader in America probably won't understand a word of it, though we are pleased to give everyone a try.
Basically, BofA is getting rough press over their recent decision to charge debit card users a fee for the service and now, they're making it harder to avoid the $5/month fee.
Additionally, the $8.5 billion settlement the bank had worked out with various MBS trusts, including Pimco and the NY Fed, has unraveled and is being sent to a federal court. Boo-hoo.
And, completing the trifecta, Bank of America has moved Merrill Lynch derivatives into it's banking unit, putting over $1 trillion of deposits at imminent risk.
Nice.
Dow 11,541.78, +37.16 (0.32%)
NASDAQ 2,598.62, -5.42 (0.21%)
S&P 500 1,215.39, +5.51 (0.46%)
NYSE Composite 7,273.90, +33.64 (0.46%)
NASDAQ Volume 2,095,450,875
NYSE Volume 4,870,291,500
Combined NYSE & NASDAQ Advance - Decline: 3404-2984
Combined NYSE & NASDAQ New highs - New lows: 26-71 (finally, something that makes sense)
WTI crude oil: 85.30, -0.81
Gold: 1,612.90, -34.10
Silver: 30.28, -1.00
That is the kind of music the Europeans are playing above the din of Wall Street's stressed markets, making them zig-zag with even more amplitude than under the normal rigging of the HFT computers. Stocks were down, then up, then sideways, then finally finished mostly flat.
What is on one hand frustrating and on the other wildly amusing is that all the nations of Europe don't have 2 trillion Euros to rub together, much less 10 trillion once the fund goes the leverage route. Get ready for massive currency devaluation and market disruptions as the Eurozone embarks on an experiment in quantitative easing (money printing) that makes Ben Bernanke's Federal Reserve look like amateurs.
While all the noise and fury from Europe was making trading something resembling a kindergarten face-painting class, a couple of items concerning a couple of US banks the media forgot to mention appeared on the web.
Apparently aiming for the honor of headline of the month, the New York Post reports, Citi fined $285M for selling dog$#!t paper.
It appears that the SEC stopped watching porn for a few minutes to slap a fine on Citigroup for selling mortgage-backed securities (MBS) to their clients they knew were dog$#!t and, a la Goldman Sachs, bet against them in the derivatives market. The fine amounts to a small fraction of the beating investors continue to take and a spec of dust compared to what Citi and the other TBTF banks did to the US and global financial and housing markets.
Good for those few non-porn-addicted officials at the SEC for finally waking up, albeit three years late, and doing somewhat of the right thing, though, as usual, Citi admits no wrongdoing and no executives have been fined, jailed or slaughtered for public delight... yet. That's why we have the Occupy Wall Street movement. They may not have defined demands, but, in general they hate the mega-banks and the people who run them.
Then there's Bank of America, which has been shuckin' and jivin' so much they seem to be shadowboxing with themselves in a mirror inside a kaleidoscope. Their recent maladies are summed up in an article by the erudite by barely comprehensible Chris Whalen of Risk Analytics, in an article entitled, Is Bank of America preparing for a Chapter 11? published by Reuters UK, because apparently the average reader in America probably won't understand a word of it, though we are pleased to give everyone a try.
Basically, BofA is getting rough press over their recent decision to charge debit card users a fee for the service and now, they're making it harder to avoid the $5/month fee.
Additionally, the $8.5 billion settlement the bank had worked out with various MBS trusts, including Pimco and the NY Fed, has unraveled and is being sent to a federal court. Boo-hoo.
And, completing the trifecta, Bank of America has moved Merrill Lynch derivatives into it's banking unit, putting over $1 trillion of deposits at imminent risk.
Nice.
Dow 11,541.78, +37.16 (0.32%)
NASDAQ 2,598.62, -5.42 (0.21%)
S&P 500 1,215.39, +5.51 (0.46%)
NYSE Composite 7,273.90, +33.64 (0.46%)
NASDAQ Volume 2,095,450,875
NYSE Volume 4,870,291,500
Combined NYSE & NASDAQ Advance - Decline: 3404-2984
Combined NYSE & NASDAQ New highs - New lows: 26-71 (finally, something that makes sense)
WTI crude oil: 85.30, -0.81
Gold: 1,612.90, -34.10
Silver: 30.28, -1.00
Wednesday, October 19, 2011
No Rest for the Wicked (or Corrupt, or Criminal); Beige Book Sinks Stocks
No news out of Europe to goose or grouse the markets? No problem, the Fed's October Beige Book provided yet another dim view of current financial, business and economic conditions across the United States.
As one might expect, the reporting in the 12 Federal Reserve districts was mixed, with business conditions showing slight improvement in most, but housing and employment remaining weak across most. Here is a good summary of each of the districts, from Dow Jones Newswires.
That was about all that mattered. CPI showed a jump of 0.3% in consumer prices, while the housing market showed a mixed picture. The Mortgage Bankers Association saw a 14.9% decline in mortgage applications in the most recent week (ended October 14) for new purchases and refinancing combined. Housing starts shot up to 658K in September after reporting only 572K in August, the figures based on an annualized model.
However, building permits dropped from 625K in August to 594K in September, suggesting a slight contraction in new home construction.
A huge drawdown in crude inventories last week of 4.729M barrels caused oil prices to dive, citing weaker than normal demand as the cause.
In a best-case scenario, most economists believe that the US will not suffer another recession, though growth remains flat to slightly improved. That is why the banking and debt crisis in Europe moves the markets. If Europe cannot solve its problems, there would be enough of a contagion to effect the US economy negatively.
The NASDAQ took the biggest hit on the day, following Apple's (AAPL) earnings miss, reported after the closing bell on Tuesday.
Dow 11,504.62, -72.43 (0.63%)
NASDAQ 2,604.04, -53.39 (2.01%)
S&P 500 1,209.88, -15.50 (1.26%)
NYSE Composite 7,240.26, -101.47 (1.38%)
NASDAQ Volume 2,013,483,875.00
NYSE Volume 4,869,994,500
Combined NYSE & NASDAQ Advance - Decline: 1752-4763
Combined NYSE & NASDAQ New highs - New lows: 82-43
WTI crude oil: 86.11, -2.23
Gold: 1,647.00, -5.80
Silver: 31.28, -0.55
As one might expect, the reporting in the 12 Federal Reserve districts was mixed, with business conditions showing slight improvement in most, but housing and employment remaining weak across most. Here is a good summary of each of the districts, from Dow Jones Newswires.
That was about all that mattered. CPI showed a jump of 0.3% in consumer prices, while the housing market showed a mixed picture. The Mortgage Bankers Association saw a 14.9% decline in mortgage applications in the most recent week (ended October 14) for new purchases and refinancing combined. Housing starts shot up to 658K in September after reporting only 572K in August, the figures based on an annualized model.
However, building permits dropped from 625K in August to 594K in September, suggesting a slight contraction in new home construction.
A huge drawdown in crude inventories last week of 4.729M barrels caused oil prices to dive, citing weaker than normal demand as the cause.
In a best-case scenario, most economists believe that the US will not suffer another recession, though growth remains flat to slightly improved. That is why the banking and debt crisis in Europe moves the markets. If Europe cannot solve its problems, there would be enough of a contagion to effect the US economy negatively.
The NASDAQ took the biggest hit on the day, following Apple's (AAPL) earnings miss, reported after the closing bell on Tuesday.
Dow 11,504.62, -72.43 (0.63%)
NASDAQ 2,604.04, -53.39 (2.01%)
S&P 500 1,209.88, -15.50 (1.26%)
NYSE Composite 7,240.26, -101.47 (1.38%)
NASDAQ Volume 2,013,483,875.00
NYSE Volume 4,869,994,500
Combined NYSE & NASDAQ Advance - Decline: 1752-4763
Combined NYSE & NASDAQ New highs - New lows: 82-43
WTI crude oil: 86.11, -2.23
Gold: 1,647.00, -5.80
Silver: 31.28, -0.55
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