The FOMC of the Federal Reserve lowered interest rates by 50 basis points - 0.5% - but it wasn't enough for the pampered, worthless lot of business morons on Wall Street.
Instead of greeting the rate cut (unnecessary and mostly inconsequential) with open arms, stocks took another loss. It was just another example of how overfed Wall Street has become. They can't even make good money with the federal funds rate at 1%, which, incidentally, was the rate at which the whole subprime mess began.
Thankfully, hopefully, there will be a change of administration in Washington which will begin to detach itself from the single-minded preoccupation with banks and the workings of Wall Street and begin to address the issues which will really matter to Americans: jobs, infrastructure, extricating ourselves from never-ending wars and solving global warming by instituting policy initiatives which promote conservation, alternative energy, reuse and recycling.
There are days which try one's will and one's nerves and this was surely one of them. With just three more working days before the election, the ongoing "crisis" mentality that pervades every aspect of the news, along with the long election coverage, is wearing extremely thin.
That investors can't see value in stocks at these levels and express themselves by torpedoing the markets is childish and churlish at the same time. One hopes and prays that the election will proceed without too many glitches and we, as a nation, can move on from the overwhelmingly loathsome conditions brought to bear by a madman president and a bunch of policy-makers who had their own way and still managed to make things worse for most of it.
Dow 8,990.96 -74.16; NASDAQ 1,657.21 +7.74 (0.47%) S&P 500 930.09 -10.42; NYSE Composite 5,774.8901 +41.43
Well, maybe it wasn't all that bad. At least the NASDAQ and the Comp. were higher.
Market internals also improved. Advancing issued outnumbered decliners, 3893-2381. New lows beat new highs, 319-8. Volume again was moderate.
NYSE Volume 1,619,567,000
NASDAQ Volume 2,771,578,000
One noticeable effect of the Fed's rate cut was in the price of crude oil, which gained $4.77, to $67.50. Gold was up $13.50, to $754.00, while silver added a massive $1.02, to $9.81.
Six days and counting until the election. These are times which try men's souls.
Wednesday, October 29, 2008
Tuesday, October 28, 2008
Wall Street's Huge Rally Not Unexpected
Economic news on Tuesday was not cheery. Not even close.
Standard & Poor's/Case-Shiller 20-city housing index dropped a record 16.6 % from a year ago, the largest year-over-year decline in the survey's 8-year history.
The Conference Board issued its monthly statement of consumer confidence at a previously-unseen level of 38. Analysts were expecting a drop to 51, from a reading of 59.8 in September.
Still, by 2:00 pm, all major indices were sporting healthy gains... and then they really took off, resulting in massive gains in all manner of equity investments. The Dow alone rose over 600 points in the final two hours of trading.
Dow 9,065.12 +889.35; NASDAQ 1,649.47 +143.57; S&P 500 940.51 +91.59; NYSE Composite 5,733.4399 +536.91
The most obvious cause for the outsized gains is anticipation of a 50-to-100 basis point (0.5-1.0%) reduction in the federal funds rate when the FOMC meets and issues a policy statement tomorrow.
While another rate cut may not seem like such a big deal in these turbulent times, investors seemed to be betting on improving conditions and made moves on stocks - and a general market - that has been exhibiting technical oversold signs. On Monday, the major indices registered new bear market lows, so a move upwards did not catch anyone by surprise, though the size of the gain may have stunned a few short-sellers, feeding into the rally.
So, instead of breaking below 8,000, the Dow ended the day surpassing the 9,000 mark. All but the NASDAQ saw gains of more than 10% for the day. The NASDAQ was up 9.5%.
Market internals confirmed much of the massive gain. Advancing issues outpaced decliners, 4699-1624. New lows remained persistent, however, beating down new highs, 1256-3. Volume was a little higher than Monday's, but not overwhelming, an indication that this rally will be short-lived and without legs as bargain hunters staked out positions and short sellers covered positions.
NYSE Volume 1,723,708,000
NASDAQ Volume 2,811,333,000
Commodity prices remained marginally in the red. Crude oil was down another 49 cents, closing at $62.73. Gold ended lower by $2.40, to $740.50, stopping a two-day winning streak. Silver crashed through the $9.00 level, losing 41 cents per ounce, to end the day at $8.79.
The Fed meeting tomorrow should help boost spirits, but another in a series of expected rate cuts has already been largely priced into the market. There is the distinct possibility that even though the Fed comes through on the rate cut, investors will "sell the news," being that it has been telegraphed to this skittish market.
More wild swings are a near-certainty, leading up to and beyond the November 4 Election day, given the volatility that has been the one constant through the wrenching downturn and sparkling rallies.
The market continues to attempt setting a bottom, though the pattern remains the same, with each successive low being superseded by a following test.
Standard & Poor's/Case-Shiller 20-city housing index dropped a record 16.6 % from a year ago, the largest year-over-year decline in the survey's 8-year history.
The Conference Board issued its monthly statement of consumer confidence at a previously-unseen level of 38. Analysts were expecting a drop to 51, from a reading of 59.8 in September.
Still, by 2:00 pm, all major indices were sporting healthy gains... and then they really took off, resulting in massive gains in all manner of equity investments. The Dow alone rose over 600 points in the final two hours of trading.
Dow 9,065.12 +889.35; NASDAQ 1,649.47 +143.57; S&P 500 940.51 +91.59; NYSE Composite 5,733.4399 +536.91
The most obvious cause for the outsized gains is anticipation of a 50-to-100 basis point (0.5-1.0%) reduction in the federal funds rate when the FOMC meets and issues a policy statement tomorrow.
While another rate cut may not seem like such a big deal in these turbulent times, investors seemed to be betting on improving conditions and made moves on stocks - and a general market - that has been exhibiting technical oversold signs. On Monday, the major indices registered new bear market lows, so a move upwards did not catch anyone by surprise, though the size of the gain may have stunned a few short-sellers, feeding into the rally.
So, instead of breaking below 8,000, the Dow ended the day surpassing the 9,000 mark. All but the NASDAQ saw gains of more than 10% for the day. The NASDAQ was up 9.5%.
Market internals confirmed much of the massive gain. Advancing issues outpaced decliners, 4699-1624. New lows remained persistent, however, beating down new highs, 1256-3. Volume was a little higher than Monday's, but not overwhelming, an indication that this rally will be short-lived and without legs as bargain hunters staked out positions and short sellers covered positions.
NYSE Volume 1,723,708,000
NASDAQ Volume 2,811,333,000
Commodity prices remained marginally in the red. Crude oil was down another 49 cents, closing at $62.73. Gold ended lower by $2.40, to $740.50, stopping a two-day winning streak. Silver crashed through the $9.00 level, losing 41 cents per ounce, to end the day at $8.79.
The Fed meeting tomorrow should help boost spirits, but another in a series of expected rate cuts has already been largely priced into the market. There is the distinct possibility that even though the Fed comes through on the rate cut, investors will "sell the news," being that it has been telegraphed to this skittish market.
More wild swings are a near-certainty, leading up to and beyond the November 4 Election day, given the volatility that has been the one constant through the wrenching downturn and sparkling rallies.
The market continues to attempt setting a bottom, though the pattern remains the same, with each successive low being superseded by a following test.
Monday, October 27, 2008
New Lows All Around
Stocks swung in a 400-point range on the Dow, but ended with sizable losses once more, sending all the major indices to fresh lows.
The markets opened to the downside, after news that Japan's NIKKEI index had suffered another 6% decline, hitting a 26-year low. US stocks shook that off and headed higher in the first hour, but vacillated throughout the session, finally giving way for good late in the day.
Investors still seem concerned that the fallout from the banking and credit issues still hasn't been fully reflected in stocks and across the general economy. Fear continues to grip investors with few grabbing for bargains despite stocks being down significantly over the past month and year.
Among companies posting losses or missing 3rd quarter estimates were hardware and home repair chain Lowes (L, 25.65 -5.66), which took a loss for the period of 31 cents a share, compared to a 77¢ profit a year ago, and health care provider Humana (HUM, 30.80 -5.47), which saw profits shaved by 40% from the same period a year ago due to higher operating costs.
Verizon (VZ, 27.61 +2.53) reported earnings in line with estimates, bucking the trend on a slow earnings news day.
Dow 8,175.77 -203.18; NASDAQ 1,505.90 -46.13; S&P 500 848.92 -27.85; NYSE Composite 5,196.53 -231.01
Market internals matched the headline numbers, with losers beating gainers by a score of 4948-1351. New lows once more finished far ahead of new highs, 1329-9. Clearly, there is no appetite for speculation at this juncture. With the critical US elections now just one week away, investors are clutching their cash close, making no forays into a severely troubled market. Volume was moderate, reflecting the overall lack of buying interest.
NYSE Volume 1,338,367,000
NASDAQ Volume 2,273,988,000
Commodity prices remained subdued. Oil lost another 93 cents, closing at $63.22. Gold gained for the second straight session, up $12.60, to $742.90, still more than 25% off recent highs. Silver lost another 10 cents, to $9.20.
Considering the timing dynamics involved, especially those concerning the potential massive shift of power in Washington, the declining trend should remain in place until at least Tuesday, November 4, election day in the USA. After that, there should be some kind of sober reassessment of Wall Street risk and reward, though the generally poor economic conditions - which should prevail for at least another two or three quarters - will likely keep a secure lid on equity prices.
The other factor at play is that of falling commodity prices, which should begin to manifest itself across a broad spectrum of commercial activity. While the most obvious price relief is at the gas pumps and in home heating bills, price pressure should become more evident in mainstream goods and services at the very worst of time: the Christmas season. The fallout will likely be the shuttering of marginal stores in malls across America, more retail job losses and possibly a number of bankruptcies. The Fed doesn't bail out retailers, only banks and cheating financial institutions.
On that note, more bank failures are almost sure to occur before Christmas causing even further deterioration to the banking/finance sector.
The markets opened to the downside, after news that Japan's NIKKEI index had suffered another 6% decline, hitting a 26-year low. US stocks shook that off and headed higher in the first hour, but vacillated throughout the session, finally giving way for good late in the day.
Investors still seem concerned that the fallout from the banking and credit issues still hasn't been fully reflected in stocks and across the general economy. Fear continues to grip investors with few grabbing for bargains despite stocks being down significantly over the past month and year.
Among companies posting losses or missing 3rd quarter estimates were hardware and home repair chain Lowes (L, 25.65 -5.66), which took a loss for the period of 31 cents a share, compared to a 77¢ profit a year ago, and health care provider Humana (HUM, 30.80 -5.47), which saw profits shaved by 40% from the same period a year ago due to higher operating costs.
Verizon (VZ, 27.61 +2.53) reported earnings in line with estimates, bucking the trend on a slow earnings news day.
Dow 8,175.77 -203.18; NASDAQ 1,505.90 -46.13; S&P 500 848.92 -27.85; NYSE Composite 5,196.53 -231.01
Market internals matched the headline numbers, with losers beating gainers by a score of 4948-1351. New lows once more finished far ahead of new highs, 1329-9. Clearly, there is no appetite for speculation at this juncture. With the critical US elections now just one week away, investors are clutching their cash close, making no forays into a severely troubled market. Volume was moderate, reflecting the overall lack of buying interest.
NYSE Volume 1,338,367,000
NASDAQ Volume 2,273,988,000
Commodity prices remained subdued. Oil lost another 93 cents, closing at $63.22. Gold gained for the second straight session, up $12.60, to $742.90, still more than 25% off recent highs. Silver lost another 10 cents, to $9.20.
Considering the timing dynamics involved, especially those concerning the potential massive shift of power in Washington, the declining trend should remain in place until at least Tuesday, November 4, election day in the USA. After that, there should be some kind of sober reassessment of Wall Street risk and reward, though the generally poor economic conditions - which should prevail for at least another two or three quarters - will likely keep a secure lid on equity prices.
The other factor at play is that of falling commodity prices, which should begin to manifest itself across a broad spectrum of commercial activity. While the most obvious price relief is at the gas pumps and in home heating bills, price pressure should become more evident in mainstream goods and services at the very worst of time: the Christmas season. The fallout will likely be the shuttering of marginal stores in malls across America, more retail job losses and possibly a number of bankruptcies. The Fed doesn't bail out retailers, only banks and cheating financial institutions.
On that note, more bank failures are almost sure to occur before Christmas causing even further deterioration to the banking/finance sector.
Friday, October 24, 2008
Severe Losses Again in Global Markets
Major indices across Europe and Asia fell anywhere from 5 to 9 percent on Friday, as the fear of global recession continued to plague markets.
US indices were not spared as all reached new lows, surpassing the bottoms reached on October 10. Clearly, we are nowhere near a bottom.
Dow 8,378.95 -312.30; NASDAQ 1,552.03 -51.88; S&P 500 876.77 -31.34; NYSE Composite 5,427.54 -276.59
Recent closing highs for US indices:
Dow Jones Industrials: 14,164.53, October 9, 2007
NASDAQ: 2859.12, October 31, 2007
S&P 500: 1565.15, October 9, 2007
NYSE Composite: 10,301.49, October 12, 2007
Today's (October 24, 2008) closing prices (all fresh lows):
Dow Jones Industrials: 8,378.95
NASDAQ: 1,552.03
S&P 500: 876.77
NYSE Composite: 5,427.54
Once more, market internals told the story of distress as declining issues far outpaced advancers, 5071-1286 (a 4-1 margin). New lows continued to expand dramatically over new highs, 2005-21. Volume was moderate to slightly higher than normal.
NYSE Volume 1,585,743,000
NASDAQ Volume 2,674,463,000
In the good news department, new home sales improved year-over-year by more than 5% and gas prices are significantly lower from mid-summer highs. The price of an average gallon of gas in America is well below $3.00 now.
The price of crude oil continues to collapse along with all other commodities.
Oil fell $3.69, to $64.15, (a 16-month low)despite a call by OPEC for production cuts of 1.5 million barrels per day. Gold reversed its recent downward trend with a gain of $15.60, to close at $730.30. Silver fell 21 cents, to $9.30.
More good news will continue to issue as conditions change. Bear in mind, that as the global "crisis" deepens and expands around the globe, the United States, being the first country to enter into recession, will likely be the first to emerge from the depths of despair. Something to ponder for the weekend other than the fact that US stocks are now completely in the pits.
US indices were not spared as all reached new lows, surpassing the bottoms reached on October 10. Clearly, we are nowhere near a bottom.
Dow 8,378.95 -312.30; NASDAQ 1,552.03 -51.88; S&P 500 876.77 -31.34; NYSE Composite 5,427.54 -276.59
Recent closing highs for US indices:
Dow Jones Industrials: 14,164.53, October 9, 2007
NASDAQ: 2859.12, October 31, 2007
S&P 500: 1565.15, October 9, 2007
NYSE Composite: 10,301.49, October 12, 2007
Today's (October 24, 2008) closing prices (all fresh lows):
Dow Jones Industrials: 8,378.95
NASDAQ: 1,552.03
S&P 500: 876.77
NYSE Composite: 5,427.54
Once more, market internals told the story of distress as declining issues far outpaced advancers, 5071-1286 (a 4-1 margin). New lows continued to expand dramatically over new highs, 2005-21. Volume was moderate to slightly higher than normal.
NYSE Volume 1,585,743,000
NASDAQ Volume 2,674,463,000
In the good news department, new home sales improved year-over-year by more than 5% and gas prices are significantly lower from mid-summer highs. The price of an average gallon of gas in America is well below $3.00 now.
The price of crude oil continues to collapse along with all other commodities.
Oil fell $3.69, to $64.15, (a 16-month low)despite a call by OPEC for production cuts of 1.5 million barrels per day. Gold reversed its recent downward trend with a gain of $15.60, to close at $730.30. Silver fell 21 cents, to $9.30.
More good news will continue to issue as conditions change. Bear in mind, that as the global "crisis" deepens and expands around the globe, the United States, being the first country to enter into recession, will likely be the first to emerge from the depths of despair. Something to ponder for the weekend other than the fact that US stocks are now completely in the pits.
Thursday, October 23, 2008
Markets Still Jittery
A 400-point, last hour rally sent the Dow Jones Industrials to a healthy gain today, though the NASDAQ finished at new multi-year lows and the S&P 500 was modestly higher. Once again, a high level of volatility was evident, as trade was more jumpy than choppy.
Large positions are changing in this explosive environment. The markets are in the process of retesting previous lows. By today's standard, we survived, barely, for a day.
That's how life is now measured on Wall Street: by the day, or hour, or even minutes. As far as a bottom is concerned, I'm fairly convinced we haven't seen it yet. A true bottoming out in value could still be 3-4 months out, or as soon as mid-November. From all indications, however, the holiday season is almost certainly going to disappoint. How much the market has already discounted the 4th quarter is an open question. A good guess would be, "probably not much."
One gets the definite impression that there are more than a few high rollers with cash in hand, waiting to pounce on some asset, but that they're waiting until after US election day, November 4. On that day, we may be witness to a transformational change in the way our country is run and in the administration of policy. Or we may elect a candidate who wishes to go very much further along the path recently traveled, and that doesn't seem to be working well at all.
In any case, there's surely enough action to keep one's attention, though the overall effect of trading the last two weeks has been nearly a stalemate against the lows of October 9 and 10.
Dow 8,691.25 +172.04; NASDAQ 1,603.91 -11.84; S&P 500 908.11 +11.33; NYSE Composite 5,671.93 +41.46
Oil gained a bit, up $1.09, to $67.84. It still seems to have further to fall. Likewise, gold extended its losses another $20.50, to $714.70. Silver bucked the trend, gaining four cents to $9.50. Gold seems determined to test support in the $600-650 range, and fairly soon. Warning: the precious metals may be in a falling asset zone, a message that's been reiterated right on this blog for months now.
The internals told an entirely different story for the day's trading. Declining issues led advancers, 4185-2115. There were 1390 new lows to just 14 new highs. The level of new lows has now become alarming once again, signaling another fresh round of selling and devaluation. It would not be surprising in the least.
Volume was higher than normal, especially on the NASDAQ, the only major index to show a loss on the day, where it was heavy.
NYSE Volume 1,543,673,000
NASDAQ Volume 3,158,630,000
Large positions are changing in this explosive environment. The markets are in the process of retesting previous lows. By today's standard, we survived, barely, for a day.
That's how life is now measured on Wall Street: by the day, or hour, or even minutes. As far as a bottom is concerned, I'm fairly convinced we haven't seen it yet. A true bottoming out in value could still be 3-4 months out, or as soon as mid-November. From all indications, however, the holiday season is almost certainly going to disappoint. How much the market has already discounted the 4th quarter is an open question. A good guess would be, "probably not much."
One gets the definite impression that there are more than a few high rollers with cash in hand, waiting to pounce on some asset, but that they're waiting until after US election day, November 4. On that day, we may be witness to a transformational change in the way our country is run and in the administration of policy. Or we may elect a candidate who wishes to go very much further along the path recently traveled, and that doesn't seem to be working well at all.
In any case, there's surely enough action to keep one's attention, though the overall effect of trading the last two weeks has been nearly a stalemate against the lows of October 9 and 10.
Dow 8,691.25 +172.04; NASDAQ 1,603.91 -11.84; S&P 500 908.11 +11.33; NYSE Composite 5,671.93 +41.46
Oil gained a bit, up $1.09, to $67.84. It still seems to have further to fall. Likewise, gold extended its losses another $20.50, to $714.70. Silver bucked the trend, gaining four cents to $9.50. Gold seems determined to test support in the $600-650 range, and fairly soon. Warning: the precious metals may be in a falling asset zone, a message that's been reiterated right on this blog for months now.
The internals told an entirely different story for the day's trading. Declining issues led advancers, 4185-2115. There were 1390 new lows to just 14 new highs. The level of new lows has now become alarming once again, signaling another fresh round of selling and devaluation. It would not be surprising in the least.
Volume was higher than normal, especially on the NASDAQ, the only major index to show a loss on the day, where it was heavy.
NYSE Volume 1,543,673,000
NASDAQ Volume 3,158,630,000
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