As expected, the FOMC of the Federal Reserve decided to leave rates unchanged on Wednesday, marking the 7th consecutive meeting the Fed has issued no change in the federal funds rate.
Immediately following the announcement, stocks gyrated, with the Dow zig-zagging in a 50 point range before finally heading higher into the close, setting yet another record. The S&P moved to within 15 points of its all-time high. Despite the Fed offering no surprises, markets reacted positively, as has been the norm of late.
Dow 13,362.87 +53.80; NASDAQ 2,576.34 +4.59; S&P 500 1,512.58 +4.86; NYSE Composite 9,827.93 +39.90
With all eyes on the Fed, there was little else to move markets and volume was moderate.
Advancing issues held sway, beating decliners by an 8-5 margin. New highs outdid new lows 449-71, evidence that investor appetites have not yet been sated.
Possibly the best of the day's news came from the US Department of Energy, which said that stocks of gasoline rose by 400,000 barrels in the week ending May 4. Analysts had forecast a rise of 150,000. The inventory increase was the first in 13 weeks. Crude sold into the news, losing 79 cents to end the day at a moderate $61.47. With heightened demand of the summer driving season looming, this comes as welcome news and could spark a bit of easing of the price at the pump for US drivers.
Keeping with the theme, gold lost $4.90 to $682.50, while silver continued to slide, down another 13 cents to $13.47.
With earnings mostly out of the way and the next Fed meeting not for another 7 weeks, investors will focus on fundamentals and economic news. In the interim, the pace of gains should moderate, as the markets have been red hot of late.
Wednesday, May 9, 2007
A Little Savings for a Rainy Day
Since the advent of widespread use of the internet circa 1997, individual investors have all but abandoned traditional savings in favor of online trading, which is quick, easy and cheap.
The trouble with investing is that sometimes capital can be tied up for years, borrowed against or outright lost. Therein lies the American dilemma: the lowest savings rate in more than 70 years.
The previous generation of savers and investors - many of whom lived through the rigors of the Great Depression - was more inclined to save rather than invest, but Baby Boomers have lived a life of relative comfort, absent large scale economic catastrophe. Various recessions and the stagflation of the 70s accounted for about the worst of times for the current generation.
Lately, however, there's been a push to devote funds to actual savings - as in savings accounts - as a barrage of banks and other financial institutions have begun offering attractive interest rates on savings.
SavingsAccounts.com affords consumers the opportunity to review the merits of some of the best savings account offers online. The recently launched site features short reviews with links to mostly online banks like FNBO Direct, Wells Fargo, HSBC, AmTrust, Emigrant Direct and others, offering interest rates ranging from 2.75 to as high as 6%.
It's a good place to start or expand your saving regimen as that rainy day seldom announces itself far in advance.
Sponsored Post
The trouble with investing is that sometimes capital can be tied up for years, borrowed against or outright lost. Therein lies the American dilemma: the lowest savings rate in more than 70 years.
The previous generation of savers and investors - many of whom lived through the rigors of the Great Depression - was more inclined to save rather than invest, but Baby Boomers have lived a life of relative comfort, absent large scale economic catastrophe. Various recessions and the stagflation of the 70s accounted for about the worst of times for the current generation.
Lately, however, there's been a push to devote funds to actual savings - as in savings accounts - as a barrage of banks and other financial institutions have begun offering attractive interest rates on savings.
SavingsAccounts.com affords consumers the opportunity to review the merits of some of the best savings account offers online. The recently launched site features short reviews with links to mostly online banks like FNBO Direct, Wells Fargo, HSBC, AmTrust, Emigrant Direct and others, offering interest rates ranging from 2.75 to as high as 6%.
It's a good place to start or expand your saving regimen as that rainy day seldom announces itself far in advance.
Sponsored Post
Tuesday, May 8, 2007
Best Job In America: Do-Nothing Fed Governor
How would you like to have the entire financial community hanging on your every word, meet with your buddies 8 times a years and generally be rewarded handsomely for doing just about nothing?
If that sounds like a sweet gig to you, maybe it's time to look into becoming a member of the Board of Governors of the Federal Reserve. Naturally, some background (make that a lot of background) in economics is a necessary part of the resume, but once you're in, the perks are substantial and the hours are better than those of even the best-paid banker.
For 6 consecutive meetings the Federal Open Market Committee (FOMC) has met and done nothing. Sure, under the guidance of new chief Ben Bernanke, they were supposed to keep the economy cruising and hold the line on inflation, and they've achieved one of those objectives... well, maybe not, but they've managed to get through the last 10 months without changing the federal funds rate (the interest rate at which depository institutions lend balances at the Federal Reserve to other depository institutions overnight) and they aren't expected to do anything about it when they meet tomorrow, May 9, so make it a 7 in a row and a year of doing nothing. Not bad.
While some self-proclaimed experts are calling for a rate decrease, the nearly unanimous opinion is that the Fed will - and should - do nothing. America is pretty stable with a 5.25% fed funds rate, though the first quarter GDP (+1.3%) was the weakest in four years. While lowering the rate may prevent a hard landing later in the year or in 2008, is anybody really prepared to offer the oil companies any incentive to raise gas prices any further?
If anything, America needs to tighten the old economic belt a little. We're still wallowing in the aftermath of former Chairman Greenspan's unprecedented credit creation cycle, epitomized by the bust-up in the mortgage markets and a generally ailing real estate market.
And while loose money isn't exactly sound monetary policy, Wall Street isn't exactly complaining - today's modest decline was only the 4th down day for the Dow in the past 28 sessions.
So, after 2:15 pm tomorrow, expect the stock markets to get back to business and go on another in a long series of shopping sprees. Corporate profits have seldom been as good as the past couple of years and the 1st quarter of 2007 has turned out to be nearly exceptional across almost all industries.
Dow 13,309.07 -3.90; NASDAQ 2,571.75 +0.80; S&P 500 1,507.72 -1.76; NYSE Composite 9,788.03 -37.06
Market Internals: Declining issues held sway over advancers by nearly a 3-2 margin. New highs: 303, new lows: 88, in line, considering the A-D showing.
Oil kicked up a bit after 6 consecutive sessions of declines, gaining 79 cents to end up at $62.26, a manageable level which could actually auger - dare I speak - lower, or only moderately higher prices come summer. Consumers have had about enough pain, especially those driving trucks or SUVs which routinely take $80-100 or more to fill up.
Gold, again tantalizingly close to the $700 mark, backed off $3 to close at $687.40. Silver finished the day down 4 cents at $13.60.
One to watch: Marvel Enterprises (MVL), the people behind Spider-Man, turned in blowout numbers Tuesday morning, though investors thought best to sell into the news. The stock was down as much as 0.84, but gained all day to close down just 0.20 at 29.40. There could have been some options and short shenanigans going on, but the future of the company is still somewhat cloudy as they continue to move parts around. Significant is that Marvel will be making most of their own movies in 2008, as opposed the current practice of licensing their character rights and receiving only a portion of box office receipts.
Analysts expected 35 cents per share, but Marvel shocked with 56. 2007 profits are expected to at least double last year's, so the good news is already partially baked in or the stock could continue to run. It's gone from below 20 to a peak just over 30 in the last 9 months and may be in a consolidation phase. Still, the stock looks like a keeper, a good bet to hit the 38-42 range by next summer.
If that sounds like a sweet gig to you, maybe it's time to look into becoming a member of the Board of Governors of the Federal Reserve. Naturally, some background (make that a lot of background) in economics is a necessary part of the resume, but once you're in, the perks are substantial and the hours are better than those of even the best-paid banker.
For 6 consecutive meetings the Federal Open Market Committee (FOMC) has met and done nothing. Sure, under the guidance of new chief Ben Bernanke, they were supposed to keep the economy cruising and hold the line on inflation, and they've achieved one of those objectives... well, maybe not, but they've managed to get through the last 10 months without changing the federal funds rate (the interest rate at which depository institutions lend balances at the Federal Reserve to other depository institutions overnight) and they aren't expected to do anything about it when they meet tomorrow, May 9, so make it a 7 in a row and a year of doing nothing. Not bad.
While some self-proclaimed experts are calling for a rate decrease, the nearly unanimous opinion is that the Fed will - and should - do nothing. America is pretty stable with a 5.25% fed funds rate, though the first quarter GDP (+1.3%) was the weakest in four years. While lowering the rate may prevent a hard landing later in the year or in 2008, is anybody really prepared to offer the oil companies any incentive to raise gas prices any further?
If anything, America needs to tighten the old economic belt a little. We're still wallowing in the aftermath of former Chairman Greenspan's unprecedented credit creation cycle, epitomized by the bust-up in the mortgage markets and a generally ailing real estate market.
And while loose money isn't exactly sound monetary policy, Wall Street isn't exactly complaining - today's modest decline was only the 4th down day for the Dow in the past 28 sessions.
So, after 2:15 pm tomorrow, expect the stock markets to get back to business and go on another in a long series of shopping sprees. Corporate profits have seldom been as good as the past couple of years and the 1st quarter of 2007 has turned out to be nearly exceptional across almost all industries.
Dow 13,309.07 -3.90; NASDAQ 2,571.75 +0.80; S&P 500 1,507.72 -1.76; NYSE Composite 9,788.03 -37.06
Market Internals: Declining issues held sway over advancers by nearly a 3-2 margin. New highs: 303, new lows: 88, in line, considering the A-D showing.
Oil kicked up a bit after 6 consecutive sessions of declines, gaining 79 cents to end up at $62.26, a manageable level which could actually auger - dare I speak - lower, or only moderately higher prices come summer. Consumers have had about enough pain, especially those driving trucks or SUVs which routinely take $80-100 or more to fill up.
Gold, again tantalizingly close to the $700 mark, backed off $3 to close at $687.40. Silver finished the day down 4 cents at $13.60.
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One to watch: Marvel Enterprises (MVL), the people behind Spider-Man, turned in blowout numbers Tuesday morning, though investors thought best to sell into the news. The stock was down as much as 0.84, but gained all day to close down just 0.20 at 29.40. There could have been some options and short shenanigans going on, but the future of the company is still somewhat cloudy as they continue to move parts around. Significant is that Marvel will be making most of their own movies in 2008, as opposed the current practice of licensing their character rights and receiving only a portion of box office receipts.
Analysts expected 35 cents per share, but Marvel shocked with 56. 2007 profits are expected to at least double last year's, so the good news is already partially baked in or the stock could continue to run. It's gone from below 20 to a peak just over 30 in the last 9 months and may be in a consolidation phase. Still, the stock looks like a keeper, a good bet to hit the 38-42 range by next summer.
Monday, May 7, 2007
No Stopping the Bull: Another New High for Dow
If you've missed the recent stock market explosion, take heart. The new highs will continue to come and stocks are poised to make impressive gains. The US economy - despite some persistent, nagging problems - continues to expand at a measured pace and corporations have never had it so good. This bull is getting a second wind. 15,000 on the Dow by the end of the year is looking more achievable every day.
Dow 13,312.97 +48.35; NASDAQ 2,570.95 -1.20; S&P 500 1,509.48 +3.86; NYSE Composite 9,825.09 +32.09
CNNMoney reports that today's Dow gain matches an 80-year-old record of 24 up sessions in the last 27. The previous run was in the summer of 1927.
While the Dow continues to awe and amaze, the NASDAQ dropped a little more than a point, though the S&P 500 moved to within 18 points of its all-time closing high. Once again, the if the S&P manages a new high, it could spark a significant break out, leading all indices higher.
The markets were buoyed by a confluence of forces today including Warren Buffet's suggestion that his Berkshire-Hathaway conglomerate would be pursuing an acquisition in the $40-60 billion range.
Alcoa (AA) management announced that it would be pursuing rival Alcan (AL) via a hostile bid. Both stocks were sharply higher, with Alcan gaining more than 21 points at the close - a nearly 35% increase - to 82.11.
Oil fell for the 6th straight session, a run of losses which has drivers cheering. The price of crude on the NY Mercantile Exchange fell 46 cents to $61.47. The losing streak was the longest in more than 7 months.
Advancers and decliners were nearly equal, with about 100 more issues gaining ground than losing. New highs checked in at 468, versus only 66 new lows. Anybody shorting this market or individual issues, is likely to be taking it on the chin. Our new highs-new lows metric continues to suggest the bull will run strong for some time and that there is no top in sight.
Gold again moved closer to the magic $700 mark, closing at $690.30, up 60 cents per ounce. Silver experienced a similar gain of 11 cents to close at $13.64. The metals continue to confound investors who see inflation everywhere, but no corresponding gains in the time-worn precious metal hedge.
Stocks are where it's at, and with everybody - including the Oracle of Omaha - thinking big, this rally could run for months more.
Dow 13,312.97 +48.35; NASDAQ 2,570.95 -1.20; S&P 500 1,509.48 +3.86; NYSE Composite 9,825.09 +32.09
CNNMoney reports that today's Dow gain matches an 80-year-old record of 24 up sessions in the last 27. The previous run was in the summer of 1927.
While the Dow continues to awe and amaze, the NASDAQ dropped a little more than a point, though the S&P 500 moved to within 18 points of its all-time closing high. Once again, the if the S&P manages a new high, it could spark a significant break out, leading all indices higher.
The markets were buoyed by a confluence of forces today including Warren Buffet's suggestion that his Berkshire-Hathaway conglomerate would be pursuing an acquisition in the $40-60 billion range.
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Speculation on what Buffett will be buying ranges from the outrageous (think Yahoo or Adobe Systems) to the marginally feasible - like Dow components Caterpillar (CAT), DuPont (DD) or McDonald's (MCD) - each of which are within his market cap range.Choose your own colors, dates and message for maximum impact.
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Alcoa (AA) management announced that it would be pursuing rival Alcan (AL) via a hostile bid. Both stocks were sharply higher, with Alcan gaining more than 21 points at the close - a nearly 35% increase - to 82.11.
Oil fell for the 6th straight session, a run of losses which has drivers cheering. The price of crude on the NY Mercantile Exchange fell 46 cents to $61.47. The losing streak was the longest in more than 7 months.
Advancers and decliners were nearly equal, with about 100 more issues gaining ground than losing. New highs checked in at 468, versus only 66 new lows. Anybody shorting this market or individual issues, is likely to be taking it on the chin. Our new highs-new lows metric continues to suggest the bull will run strong for some time and that there is no top in sight.
Gold again moved closer to the magic $700 mark, closing at $690.30, up 60 cents per ounce. Silver experienced a similar gain of 11 cents to close at $13.64. The metals continue to confound investors who see inflation everywhere, but no corresponding gains in the time-worn precious metal hedge.
Stocks are where it's at, and with everybody - including the Oracle of Omaha - thinking big, this rally could run for months more.
Saturday, May 5, 2007
Dow Sets Another New High; S&P Inches Closer
Stocks continued their progression higher on Friday amid merger news and a somewhat mellowing jobs number for April. The Dow set another record high close and the S&P 500 got to within 20 points of its all-time high.
Microsoft (MSFT) is rumored to be interested in buying up Yahoo (YHOO), a marriage that would give both companies some heft in the ongoing ad and search war with Google (GOOG). Yahoo would likely benefit from the programming mindset at Microsoft, while Gates' company would get proven online business savvy and a healthy roster of advertising accounts. Neither company would confirm or deny rumors.
Dow 13,264.62 +23.24; Nasdaq 2,572.15 +6.69; S&P 500 1,505.62 +3.23; NYSE Composite 9,793.00 +39.06
The Labor Dept. announced the creation of 88,000 jobs in April, the smallest gain in more than two years, though the figure was in line with expert expectations.
Advancers led declining issues by a 7-5 margin; There were 495 new highs, 73 new lows. The internal numbers suggest that the bull is running along at an even pace.
Light crude for June delivery fell to $61.93, losing $1.26 on the day, the fifth straight day of decline for oil and welcome news for anyone with a gas tank to fill.
Gold: 689.70 +5.30
Silver: 13.53 +0.02
Microsoft (MSFT) is rumored to be interested in buying up Yahoo (YHOO), a marriage that would give both companies some heft in the ongoing ad and search war with Google (GOOG). Yahoo would likely benefit from the programming mindset at Microsoft, while Gates' company would get proven online business savvy and a healthy roster of advertising accounts. Neither company would confirm or deny rumors.
Dow 13,264.62 +23.24; Nasdaq 2,572.15 +6.69; S&P 500 1,505.62 +3.23; NYSE Composite 9,793.00 +39.06
The Labor Dept. announced the creation of 88,000 jobs in April, the smallest gain in more than two years, though the figure was in line with expert expectations.
Advancers led declining issues by a 7-5 margin; There were 495 new highs, 73 new lows. The internal numbers suggest that the bull is running along at an even pace.
Light crude for June delivery fell to $61.93, losing $1.26 on the day, the fifth straight day of decline for oil and welcome news for anyone with a gas tank to fill.
Gold: 689.70 +5.30
Silver: 13.53 +0.02
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