Just a few days ago, earnings season looked like it was going to be an enormous flop, but after the best session on the Dow since October 2002, all is well again in the financial world.
The Dow Jones Industrials rocketed skyward by 283.86, shattering the old record of 13,676.32, set just over a month ago on June 4, by a mile and then some, more than 185 points better, in fact. The S&P also rose to a new all-time high while the NASDAQ closed at its best level since February 2001.
Dow 13,861.73 +283.86; NASDAQ 2,701.73 +49.94; S&P 500 1,547.70 +28.94; NYSE Composite 10,197.69
A single catalyst for the big move has yet to be unearthed, though the mainstream financial press is giving retailers - especially Wal-Mart which showed same-store sales up more than 2% in June - most of the credit. More to the point would be the considerably low interest rates which continue to persist at around 5% - an historically low level - feeding more money into stocks, mutual funds, hedge funds and ETFs.
US equities are currently awash in capital, with literally no end in sight. The credit expansion of the past 6 years has created an unimaginably robust bull market which has run longer than any in recent memory. Off the lows of October 2002, we are now well into this bull run's 58th month, and that's a long, long run.
The other major catalyst is the maturation of globalization. Companies are just now beginning to see the world as a whole, complete with outstanding opportunities in emerging markets and leveraging of entire economies. The world hasn't seen this kind of explosive growth - amid a somewhat stable environment - ever, and most of the global giant companies are listed on US indices.
On the day, advancing issued hammered decliners by nearly a 3-1 margin, while 577 new highs dwarfed 162 new lows.
Normally, any good market reporter would through a word of caution in on a day as spectacular as today, but the best this one can provide is a reminder that tomorrow is Friday the 13th. The boom continues, and there seems to be nothing in the way to slow it down.
The only price lower on the day was that of oil futures, which fell a paltry 6 cents to a still-ridiculous $72.50. Americans, hardy lot that we are, have adjusted to $3.00 per gallon gasoline, so even the mad oil barons are plotting new ways to make more money. Gold was up $6.20 to $668.30, while silver advanced 21 cents to $13.18, proving that even bad dogs have good days.
Thursday, July 12, 2007
Tuesday, July 10, 2007
Retail Swoon, Oil Boom Slams Stocks
I've been saying this for months - that the price of oil in the futures markets is unsustainable and may be sowing the seeds of catastrophe for the markets and world economy - and today, finally, that thinking has come home to roost.
While the oil monopolists were boosting the price of light sweet crude another 62 cents - to close at $72.81 - stocks in New York were taking a beating. Adding to the malaise were inconsequential comments from Ben Bernanke, who is beginning to look more and more like a one-term paper tiger, earnings warnings from Home Depot (no surprise there) and Sears, and some more sobering news on the sub-prime front, all of which added up to a big, fat bummer for US investors.
Dow 13,501.70 -148.27; NASDAQ 2,639.16 -30.86; S&P 500 1,510.12 -21.73; NYSE Composite 9,953.57
Get ready for a dramatic turn-around for stocks, if today's trading was any indication. Of course, the markets themselves may have sent a powerful message with the losses, and it just may wake up some people as to the potential for long-term damage by oil prices in the sky. The remaining days of this week should be telling.
The damage was widespread, affecting all sectors and industries, though retailers were hardest hit. Declining issues led advancers by a 3-1 margin, while new highs eked out a win over new lows, 260-220. Once again, this stumbling could be just the silver lining of the dark cloud suddenly settling over Wall Street. It's a bit premature to make predictions, and tomorrow's follow-through (or lack of one) will be telling.
This kind of sharp move, however, is indicative of turning points, and there have been no lack of them lately, though the markets always seem to find a way to survive and move ahead. It's going to be a very bumpy earnings season.
Gold and silver made minor moves to the plus side.
While the oil monopolists were boosting the price of light sweet crude another 62 cents - to close at $72.81 - stocks in New York were taking a beating. Adding to the malaise were inconsequential comments from Ben Bernanke, who is beginning to look more and more like a one-term paper tiger, earnings warnings from Home Depot (no surprise there) and Sears, and some more sobering news on the sub-prime front, all of which added up to a big, fat bummer for US investors.
Dow 13,501.70 -148.27; NASDAQ 2,639.16 -30.86; S&P 500 1,510.12 -21.73; NYSE Composite 9,953.57
Get ready for a dramatic turn-around for stocks, if today's trading was any indication. Of course, the markets themselves may have sent a powerful message with the losses, and it just may wake up some people as to the potential for long-term damage by oil prices in the sky. The remaining days of this week should be telling.
The damage was widespread, affecting all sectors and industries, though retailers were hardest hit. Declining issues led advancers by a 3-1 margin, while new highs eked out a win over new lows, 260-220. Once again, this stumbling could be just the silver lining of the dark cloud suddenly settling over Wall Street. It's a bit premature to make predictions, and tomorrow's follow-through (or lack of one) will be telling.
This kind of sharp move, however, is indicative of turning points, and there have been no lack of them lately, though the markets always seem to find a way to survive and move ahead. It's going to be a very bumpy earnings season.
Gold and silver made minor moves to the plus side.
Monday, July 9, 2007
Markets Move Forward in Cautious Session
With 2nd-quarter corporate earnings reports on the horizon this week (Alcoa announced after the close, posting earnings of 81 cents per share, in line with estimates, but down 4 cents from the same period in 2006), investors took a cautiously-positive tone in a session characterized by sluggish trade and squaring widely-held positions. There was little in the way of speculation, as most of the action over the next few weeks will have earnings as a catalyst.
Dow 13,649.97 +38.29; NASDAQ 2,670.02 +3.51; S&P 500 1,531.85 +1.41; NYSE Composite 10,099.60 +24.21
This is a very heady time for the market and one in which savvy players will make significant plays on stocks. The most animated of the trading will likely be next week, when the bulk of the S&P 500 stocks report and options expire (July 20).
New highs were again well ahead of new lows, 564-100, though advancers and decliners were virtually in a dead heat. Once again, these internals demonstrate that investors are buying stocks that are already showing gains, and shedding losers, though at a reduced rate. We're almost certain to see more of a leveling between the new highs and lows as the quarterlies flow to the market and the media.
With more than 5500 stocks on the NYSE and NASDAQ not represented in the daily high-low numbers, a smart strategy at this juncture would be to go long on companies approaching their 52-week high and either avoid, short-sell or buy puts on those nearing the bottoms of their ranges. You're likely to find winners on both sides of the trade, depending on how much risk you can maintain and how far you wish to spread your money. a few big winners could give the usually pedestrian month of July a bit of luster.
Oil actually fell back a bit today, down 72 cents to $72.19, though it is still extraordinarily high. Oil futures prices have yet to be reflected in pain at the pump, but it's certainly coming, probably right around the time of the Labor Day holiday weekend, which falls on September 1, 2 and 3 this year, coinciding with back-to-school, one of the busiest driving seasons of the year. It hopefully will be Big Oil's last gasp, as the political storm currently percolating in Washington, DC should be blowing its top at that time.
Naturally, politics don't make markets, but some swing in the consensus - especially concerning Iraq - could foment radical changes in corporate governance and oversight down the road. It may be wishful thinking by liberals and free-marketers alike, but change has been in the winds for months. Watch the month of August for signs that the bull is about to wind down or make a significant correction.
Gold and silver made gains today, though they're almost certain to give them back during the course of the week, if not tomorrow.
Dow 13,649.97 +38.29; NASDAQ 2,670.02 +3.51; S&P 500 1,531.85 +1.41; NYSE Composite 10,099.60 +24.21
This is a very heady time for the market and one in which savvy players will make significant plays on stocks. The most animated of the trading will likely be next week, when the bulk of the S&P 500 stocks report and options expire (July 20).
New highs were again well ahead of new lows, 564-100, though advancers and decliners were virtually in a dead heat. Once again, these internals demonstrate that investors are buying stocks that are already showing gains, and shedding losers, though at a reduced rate. We're almost certain to see more of a leveling between the new highs and lows as the quarterlies flow to the market and the media.
With more than 5500 stocks on the NYSE and NASDAQ not represented in the daily high-low numbers, a smart strategy at this juncture would be to go long on companies approaching their 52-week high and either avoid, short-sell or buy puts on those nearing the bottoms of their ranges. You're likely to find winners on both sides of the trade, depending on how much risk you can maintain and how far you wish to spread your money. a few big winners could give the usually pedestrian month of July a bit of luster.
Oil actually fell back a bit today, down 72 cents to $72.19, though it is still extraordinarily high. Oil futures prices have yet to be reflected in pain at the pump, but it's certainly coming, probably right around the time of the Labor Day holiday weekend, which falls on September 1, 2 and 3 this year, coinciding with back-to-school, one of the busiest driving seasons of the year. It hopefully will be Big Oil's last gasp, as the political storm currently percolating in Washington, DC should be blowing its top at that time.
Naturally, politics don't make markets, but some swing in the consensus - especially concerning Iraq - could foment radical changes in corporate governance and oversight down the road. It may be wishful thinking by liberals and free-marketers alike, but change has been in the winds for months. Watch the month of August for signs that the bull is about to wind down or make a significant correction.
Gold and silver made gains today, though they're almost certain to give them back during the course of the week, if not tomorrow.
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.
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.
Thursday, July 5, 2007
Oil or Jobs: Which Will Turn Markets?
Trading on Wall Street was less than dramatic today with a split decision among the majors, though there was little left to the imagination over on the oil futures pits.
Light crude for August delivery rose as high as $72.35/barrel before falling back to close up 40 cents at $71.81. The price was the highest of 2007 and close to the all-time high of $72.17 in April of 2006.
Dow 13,565.84 -11.46; NASDAQ 2,656.65 +11.70; S&P 500 1,525.40 +0.53; NYSE Composite 10,026.24 -6.37
Internally, the market displayed the nature of the day's trade. Decliners led advancers marginally, by a 10-9 margin, though new highs still held sway over new lows, 423-139.
This leaves the end of the week as an open question. Despite ample inventories, oil still remains a threat to take down the entire economy. Tomorrow, the June jobs report is due out at 8:30 am - prior to the market's opening - setting the stage for potential calm or calamity.
Judging by the tenor of today's trade, oil continues to be the elephant in the middle of the room, coloring all investment decisions. By now, it's apparent to most wizened investors that the big oil companies are operating under the guise of an illegal, price-fixing cartel, and that the government is in no case about to lift even a finger to curtail their activities. In fact, the Supreme Court ruled last week that producers and retailers could fix prices without penalty, in effect overturning a key provision of the Sherman Anti-Trust act. The court essentially gave a green light to oil companies and any other group of manufacturers to dictate prices at the retail level. It's a tremendous boon to corporate interests, and a severe blow to consumer protection.
As though the oil combine weren't enough about which to worry, tomorrow's jobs report may be a bombshell which sets off a major selling session. If the consensus is correct, it will be uninspiring to either side, but if the report shows less than 120,000 new jobs, investor reaction may be extremely negative. Recent economic reports have been less than favorable, and this would be another nail in the US fiscal coffin.
On the other hand, if there's a significant surprise in the aforementioned report along the lines of 150,000 new jobs, it would serve as a significant buy sign. The probability of an upside to the jobs report is low, however, at roughly 20%. In other words, don't bet on it. Coupled with the continuation of the oil rally, the jobs report has about a 40% chance that it will miss the already low bar. The other 40% probability is that the new jobs created will come in at a level of 120-135,000. The chance of oil selling off is practically nil.
Despite what occurs on Friday, any move may be short-lived, as second quarter earnings reports are now on the horizon and will serve as drivers for the indices through the first week of August. That jobs reports, though, may set some tone and give an indication of where the US economy and, to an uneven extent, the stock markets, are headed.
In related commodity news, gold lost $4.80 to end the day at $650.60; silver was off another 11 cents to $12.58. The metals are sinking under their own weight.
Light crude for August delivery rose as high as $72.35/barrel before falling back to close up 40 cents at $71.81. The price was the highest of 2007 and close to the all-time high of $72.17 in April of 2006.
Dow 13,565.84 -11.46; NASDAQ 2,656.65 +11.70; S&P 500 1,525.40 +0.53; NYSE Composite 10,026.24 -6.37
Internally, the market displayed the nature of the day's trade. Decliners led advancers marginally, by a 10-9 margin, though new highs still held sway over new lows, 423-139.
This leaves the end of the week as an open question. Despite ample inventories, oil still remains a threat to take down the entire economy. Tomorrow, the June jobs report is due out at 8:30 am - prior to the market's opening - setting the stage for potential calm or calamity.
Judging by the tenor of today's trade, oil continues to be the elephant in the middle of the room, coloring all investment decisions. By now, it's apparent to most wizened investors that the big oil companies are operating under the guise of an illegal, price-fixing cartel, and that the government is in no case about to lift even a finger to curtail their activities. In fact, the Supreme Court ruled last week that producers and retailers could fix prices without penalty, in effect overturning a key provision of the Sherman Anti-Trust act. The court essentially gave a green light to oil companies and any other group of manufacturers to dictate prices at the retail level. It's a tremendous boon to corporate interests, and a severe blow to consumer protection.
As though the oil combine weren't enough about which to worry, tomorrow's jobs report may be a bombshell which sets off a major selling session. If the consensus is correct, it will be uninspiring to either side, but if the report shows less than 120,000 new jobs, investor reaction may be extremely negative. Recent economic reports have been less than favorable, and this would be another nail in the US fiscal coffin.
On the other hand, if there's a significant surprise in the aforementioned report along the lines of 150,000 new jobs, it would serve as a significant buy sign. The probability of an upside to the jobs report is low, however, at roughly 20%. In other words, don't bet on it. Coupled with the continuation of the oil rally, the jobs report has about a 40% chance that it will miss the already low bar. The other 40% probability is that the new jobs created will come in at a level of 120-135,000. The chance of oil selling off is practically nil.
Despite what occurs on Friday, any move may be short-lived, as second quarter earnings reports are now on the horizon and will serve as drivers for the indices through the first week of August. That jobs reports, though, may set some tone and give an indication of where the US economy and, to an uneven extent, the stock markets, are headed.
In related commodity news, gold lost $4.80 to end the day at $650.60; silver was off another 11 cents to $12.58. The metals are sinking under their own weight.
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