The most significant event in terms of stocks came in the form of a labor/management agreement between General Motors and the United Auto Workers (UAW), ending a one-day-old strike of 73,000 union members. Nobody - not the company, the union, the government or the financial community - was in the mood for a protracted job action, and concessions from both sides lifted investor spirits.
Dow 13,878.15 +99.50; NASDAQ 2,699.03 +15.58; S&P 500 1,525.42 +8.21; NYSE Composite 9,980.12 +46.30
Advancing issues outpaced decliners by an 8-5 margin and new highs retook the lead over new lows, 304-187. The see-saw battle continues as the market seeks direction.
Oil gained 77 cents to close above the $80 mark again, at $80.30. Gold and silver took a brief respite from their recent heady advances.
While the housing and debt markets are still in a shambles, Tuesday was a day of gains built largely on the backs of labor and management negotiators. Tomorrow, reality may set in once again.
Wednesday, September 26, 2007
Tuesday, September 25, 2007
Paralysis
Consumer confidence for September dropped to 99.8, after registering a revised 105.6 in August; existing home sales dropped to a 5 year low according to the National Association of Realtors. The markets barely budged.
It is entirely possible that the news was expected or hardly damning enough to put a major dent in investor confidence. There's also the suggestion that if the economy continues to struggle, the Fed will simply rate cut its way out of any possible problems.
Then again, maybe the market is suffering from paralysis and inertia, manifestations of the deeper illiquid conditions in the credit markets. Apprehension and fear have the effect of freezing the target - deer in the headlights syndrome.
Dow 13,778.65 +19.59; NASDAQ 2,683.45 +15.50; S&P 500 1,517.21 -0.52; NYSE Composite 9,933.82 -12.60
Market internals show a much different and more bearish picture. Declining issues led advancers by better than a 3-2 margin for the second straight day. More importantly, new lows took the lead from new highs - flipping the previous short-term position - 244-163. That's significant because it's indicative of weakness at the bottom of the market, and weakness usually spreads itself upward. Once the worst positions are eviscerated, the sellers move up the ladder, inducing indecision on a more widespread platform. Without any catalyst to take markets higher (outside of an emergency rate cut) stocks should drift lower the rest of the week.
Intensifying the concept that markets are becoming more and more torpid, November crude contracts fell by a whopping $1.42 to $79.53, but gold and silver maintained their positions of strength. Gold dropped just 50 cents; silver lost 2 pennies.
There was little ambiguity in the Dow stocks, split right down the middle with 15 higher and 15 lower. Wal-Mart (WMT) and Home Depot (HD) led the decliners, while defense stocks, Honeywell (HON), United Technologies (UT) and Boeing (BA) paced the winners.
The rest of the week includes a modest economic calendar, with reports on Durable Orders on Wednesday; Final 2Q GDP, New Home Sales and initial unemployment claims on Thursday.
Ho-hum. We're going nowhere fast.
It is entirely possible that the news was expected or hardly damning enough to put a major dent in investor confidence. There's also the suggestion that if the economy continues to struggle, the Fed will simply rate cut its way out of any possible problems.
Then again, maybe the market is suffering from paralysis and inertia, manifestations of the deeper illiquid conditions in the credit markets. Apprehension and fear have the effect of freezing the target - deer in the headlights syndrome.
Dow 13,778.65 +19.59; NASDAQ 2,683.45 +15.50; S&P 500 1,517.21 -0.52; NYSE Composite 9,933.82 -12.60
Market internals show a much different and more bearish picture. Declining issues led advancers by better than a 3-2 margin for the second straight day. More importantly, new lows took the lead from new highs - flipping the previous short-term position - 244-163. That's significant because it's indicative of weakness at the bottom of the market, and weakness usually spreads itself upward. Once the worst positions are eviscerated, the sellers move up the ladder, inducing indecision on a more widespread platform. Without any catalyst to take markets higher (outside of an emergency rate cut) stocks should drift lower the rest of the week.
Intensifying the concept that markets are becoming more and more torpid, November crude contracts fell by a whopping $1.42 to $79.53, but gold and silver maintained their positions of strength. Gold dropped just 50 cents; silver lost 2 pennies.
There was little ambiguity in the Dow stocks, split right down the middle with 15 higher and 15 lower. Wal-Mart (WMT) and Home Depot (HD) led the decliners, while defense stocks, Honeywell (HON), United Technologies (UT) and Boeing (BA) paced the winners.
The rest of the week includes a modest economic calendar, with reports on Durable Orders on Wednesday; Final 2Q GDP, New Home Sales and initial unemployment claims on Thursday.
Ho-hum. We're going nowhere fast.
Monday, September 24, 2007
Let the selling begin!
Since the Fed sought to rescue markets and savage the US dollar with a 50 basis point cut in the federal funds rate last week, US indices have floundered, and Monday displayed in clear view, the handwriting on the wall. Stocks struggled between positive and negative most of the morning until finally succumbing to selling pressure in the afternoon.
Dow 13,759.06 -61.13; NASDAQ 2,667.95 -3.27; S&P 500 1,517.73 -8.02; NYSE Composite 9,946.42 -35.41
Once again, the financial sector was front and center in the selling front as banks, mortgage lenders and brokerages variously took hits in advance of Tuesday's key reading on new home sales (10:00 am).
The credit markets are still unstable, though a little improved since the calamitous days of July and August. Still, deals are not being done in the M&A departments of major brokerage houses, dampening third quarter profits. With earnings due out for the majority of the market in the coming 3-5 weeks, analysts are busy revising estimates accordingly.
While most stocks outside the housing, building and financial sectors may fare reasonably well, the overhang from the housing, mortgage and credit situations will not make for a pretty earnings season.
The walkout and strike of 73,000 UAW workers at GM plants also acted as a damper on Monday and may become to a considerable drag on the economy if the strike is not settled quickly.
Monday's trading saw declining issues take the lead over advancers by better than a 3-2 margin. New highs remained temporarily afloat over new lows, 266-171. That gap is narrowing, boding ill for bulls, again.
Oil eased 67 cents to $80.95, while gold and silver added negligible amounts. Gold is poised to break through multi-year highs should the markets (equity and/or credit) begin to rupture.
Tomorrow's reading on new home sales will likely send equities into a tailspin, along with the understanding that the UAW strike will be an extended experience lasting weeks and maybe months, instead of days.
Dow 13,759.06 -61.13; NASDAQ 2,667.95 -3.27; S&P 500 1,517.73 -8.02; NYSE Composite 9,946.42 -35.41
Once again, the financial sector was front and center in the selling front as banks, mortgage lenders and brokerages variously took hits in advance of Tuesday's key reading on new home sales (10:00 am).
The credit markets are still unstable, though a little improved since the calamitous days of July and August. Still, deals are not being done in the M&A departments of major brokerage houses, dampening third quarter profits. With earnings due out for the majority of the market in the coming 3-5 weeks, analysts are busy revising estimates accordingly.
While most stocks outside the housing, building and financial sectors may fare reasonably well, the overhang from the housing, mortgage and credit situations will not make for a pretty earnings season.
The walkout and strike of 73,000 UAW workers at GM plants also acted as a damper on Monday and may become to a considerable drag on the economy if the strike is not settled quickly.
Substantial Wealth and Riches Creation
The Path of Substantial Wealth and Riches: Your Parents' Influence on Your Finances
substantialincomes.com
That doesn't seem to be in the cards, as union leaders say they and GM negotiators (acting as the lead for Ford and Chrysler) are far apart on a number of considerations, not the least of them being how much GM and other automakers will contribute to a UAW-managed health care fund.The Path of Substantial Wealth and Riches: Your Parents' Influence on Your Finances
substantialincomes.com
Monday's trading saw declining issues take the lead over advancers by better than a 3-2 margin. New highs remained temporarily afloat over new lows, 266-171. That gap is narrowing, boding ill for bulls, again.
Oil eased 67 cents to $80.95, while gold and silver added negligible amounts. Gold is poised to break through multi-year highs should the markets (equity and/or credit) begin to rupture.
Tomorrow's reading on new home sales will likely send equities into a tailspin, along with the understanding that the UAW strike will be an extended experience lasting weeks and maybe months, instead of days.
Friday, September 21, 2007
Dead Money?
The US greenback has taken a major hit in the currency markets since the Fed rate cut on Tuesday. Incredibly, there's actually some debate over whether a weaker dollar is good for the US. It's not. Our currency is being devalued so rapidly that we risk becoming a third world economy. Since we import nearly everything, and have negative trade balances with just about every country in the world, expectations for inflation run rampant.
Dow 13,820.19 +53.49; NASDAQ 2,671.22 +16.93; S&P 500 1,525.75 +7.00; NYSE Composite 9,981.83 +45.36
That doesn't matter to Wall Street, or so it appears. The stock market, continues to cruise along as though nothing unforeseen is occurring. All the time, the value of the dollar is being eroded - and rapidly.
On Friday, there was some limited buying on solid volume, with advancers outpacing decliners by a 3-2 margin. New highs totaled 286, to 131 new lows.
Oil and gold eased modestly, while silver rose 15 cents to 13.62. With options expiring, a tumultuous week ended on a somewhat positive note, though many inefficiencies still need to be wrung out. Monday and Tuesday may offer more direction.
Dow 13,820.19 +53.49; NASDAQ 2,671.22 +16.93; S&P 500 1,525.75 +7.00; NYSE Composite 9,981.83 +45.36
That doesn't matter to Wall Street, or so it appears. The stock market, continues to cruise along as though nothing unforeseen is occurring. All the time, the value of the dollar is being eroded - and rapidly.
Forex Beginner's Resource Website
Forex Foreign Currency Exchange Trading Beginner's Resource Center.
forexforexforexforex.com
Bernanke's rate cuts may have been a potent tonic for stocks, but it's been toxic acid for the currency.Forex Foreign Currency Exchange Trading Beginner's Resource Center.
forexforexforexforex.com
On Friday, there was some limited buying on solid volume, with advancers outpacing decliners by a 3-2 margin. New highs totaled 286, to 131 new lows.
Oil and gold eased modestly, while silver rose 15 cents to 13.62. With options expiring, a tumultuous week ended on a somewhat positive note, though many inefficiencies still need to be wrung out. Monday and Tuesday may offer more direction.
Thursday, September 20, 2007
Working off Excess
One of the functions of an efficient market is to work off excesses. Though the US equity markets are far from perfectly efficient, that process began yesterday and continued, though somewhat fitfully, today.
Dow 13,766.70 -48.86; NASDAQ 2,654.29 -12.19; S&P 500 1,518.75 -10.28; NYSE Composite 9,936.47 -34.43
The excessive buying and short-covering from Tuesday and Wednesday morning were being dutifully expelled on Thursday. As soon as options expire on Friday, the market will regain its senses and continue back down. There simply isn't a meaningful catalyst to send the markets any higher. In fact, they are already overvalued.
Declining issues held a 5-2 edge over advancers, though new highs remained ahead of new lows for now, 221-122.
The absurdity in the oil business certainly isn't a positive. Crude for October delivery leapt to another all-time high of $83.32, gaining $1.39 on the day. Also showing signs that the economy is a serious mess, gold gained $10.40, approaching the interim high at $739.90. Silver was also up 37 cents to $13.47.
Credit markets are still in a shambles worldwide and many more homeowners will face foreclosure the rest of this year and through 2008. Stocks are being kept afloat by inflation and fear alone. Soon, the true direction will be found as the economy flounders into recession, despite the jawboning and rate cuts from the Fed.
The close of the week should bear witness to late-day selling as investors are still not convinced that US equities are all they're supposed to be. Earnings season is less than two weeks away. Get ready for some major movements.
Dow 13,766.70 -48.86; NASDAQ 2,654.29 -12.19; S&P 500 1,518.75 -10.28; NYSE Composite 9,936.47 -34.43
The excessive buying and short-covering from Tuesday and Wednesday morning were being dutifully expelled on Thursday. As soon as options expire on Friday, the market will regain its senses and continue back down. There simply isn't a meaningful catalyst to send the markets any higher. In fact, they are already overvalued.
Declining issues held a 5-2 edge over advancers, though new highs remained ahead of new lows for now, 221-122.
The absurdity in the oil business certainly isn't a positive. Crude for October delivery leapt to another all-time high of $83.32, gaining $1.39 on the day. Also showing signs that the economy is a serious mess, gold gained $10.40, approaching the interim high at $739.90. Silver was also up 37 cents to $13.47.
Credit markets are still in a shambles worldwide and many more homeowners will face foreclosure the rest of this year and through 2008. Stocks are being kept afloat by inflation and fear alone. Soon, the true direction will be found as the economy flounders into recession, despite the jawboning and rate cuts from the Fed.
The close of the week should bear witness to late-day selling as investors are still not convinced that US equities are all they're supposed to be. Earnings season is less than two weeks away. Get ready for some major movements.
Subscribe to:
Posts (Atom)
Posts
