Hope springs eternal.
It was that kind of sentiment that typified trading in the final session of 2008. Stocks put a day of solid gains for the second straight day, though they finish the year with massive losses and an investment community dazed by insecurity and a failed economy. Stocks approached key resistance late in the day and retreated, with most participants happy to say goodbye to a truly horrible year.
The pain was equally shared amongst the indices.
The Dow ended 2008 with a loss of 4488.43, closing at 8776.39 from the Dec. 31, 2007 close of 13264.82, a 33.83% drop in overall value.
The NASDAQ fell 1075.25, from 2652.28 to 1577.03, a 41% loss.
The S&P 500 lost 565.11, from 1468.36 903.25, off 38%.
The NYSE Composite skidded 3983.27, from 9740.32 to 5757.05, a 39% decline.
On the day:
Dow 8,776.39, +108.00 (1.25%)
NASDAQ 1,577.03, +26.33 (1.70%)
S&P 500 903.25. +12.61 (1.42%)
NYSE Composite 5,757.05, +87.05 (1.54%)
Advancers 5476, Decliners 1345. New lows out finished new highs once more, 155-46. a trend that has now exceeded 14 months with only intermittent breaks. Volume was subdued.
NYSE Volume 1,308,103,000
NASDAQ Volume 1,557,348,000
Commodities soared at year end. Oil priced $5.57 higher, closing at $44.60. Gold gained $14.30, to $884.30. Silver added 32 cents at $11.30 per ounce.
Overall, the buying of the past two sessions shouldn't be considered any kind of a trend, as much of the purchases were tax or allocation induced. The real action begins with great levels of doubt, fear and faith on Friday.
Happy New Year!
Check this page tomorrow for annual predictions.
Wednesday, December 31, 2008
Tuesday, December 30, 2008
Consumer Confidence, Housing Collapse
While investors were busy buying up stocks (the only plausible reason would be a combination of short-covering and year-end window dressing by funds), a couple of economic reports sent shudders through the remainder of humanity.
First, the Conference Board's measure of consumer confidence sunk to an all-time low reading of 38 in December, from 44.7 in November. Somehow, the "experts" were expecting the reading to rise to 45. Apparently, the wizards of Wall Street weren't out shopping this Christmas season, or else they would have seen people shrugging off discounts of 50-60% or more and hanging on tightly to their purses and wallets.
The other report came in the housing arena, which hasn't had a dose of good news in well over a year now. The Case/Schiller 20-city index fell 18% in October, the worst decline since the index was launched in 2000. Prices are now said to be back to 2004 levels. While that may sound encouraging to some, anyone in the real estate business with half a brain realizes that prices began skyrocketing long before that, so there is likely to be a further decline ahead.
What most people fail to understand - beyond the government bailout money doing essentially nothing to alleviate the housing crisis - is that $2.2 trillion in ALT-A and ARM mortgages are due to re-set in 2009 and 2010. The number of foreclosures from this wave of defaults will extend the real estate and liquidity crisis to gigantic proportions. Subprime, in other words, was only the beginning.
But, stocks set sail higher from the outset and finished with strong gains.
Dow 8,668.39, +184.46 (2.17%)
NASDAQ 1,550.70, +40.38 (2.67%)
S&P 500 890.64, +21.22 (2.44%)
NYSE Composite 5,670.00, +135.36 (2.45%)
For the session (correction: tomorrow will be a full session, not a half session as I previously reported), advancers led decliners, 5134-1682, a very broad-based advance. New lows continued to dominate new highs, however, 240-25. Volume was light, and considerably better than Monday's pathetic no-show.
NYSE Volume 953,198,000
NASDAQ Volume 1,413,810,000
Crude oil futures for february took a 99-cent dip, closing at $39.03. Gold was also down slightly, losing $5.30, to $870.00. Silver (maybe the best investment of 2009) bucked the trend, gaining 17 cents, to $10.98.
Why silver for 2009? A couple of reasons are that all asset classes are going to get hit again in the coming year, but silver has already lost close to 50% from its high. There's also somewhat of a floor around $6, so prices, if they decline, should not go down much, whereas with gold, already inflated, could see $650. Also, silver is highly accessible to everybody. It's $10 or $11 per ounce, not $800. You can buy silver in multiple forms form multiple sources as well, so it may be the choice for small-time scroungers and fledgling investors, plus, it is readily liquidated. Those are some positive reasons beyond silver being well below the traditional gold-silver ratio.
If you can't buy gold, silver makes a nice substitute.
First, the Conference Board's measure of consumer confidence sunk to an all-time low reading of 38 in December, from 44.7 in November. Somehow, the "experts" were expecting the reading to rise to 45. Apparently, the wizards of Wall Street weren't out shopping this Christmas season, or else they would have seen people shrugging off discounts of 50-60% or more and hanging on tightly to their purses and wallets.
The other report came in the housing arena, which hasn't had a dose of good news in well over a year now. The Case/Schiller 20-city index fell 18% in October, the worst decline since the index was launched in 2000. Prices are now said to be back to 2004 levels. While that may sound encouraging to some, anyone in the real estate business with half a brain realizes that prices began skyrocketing long before that, so there is likely to be a further decline ahead.
What most people fail to understand - beyond the government bailout money doing essentially nothing to alleviate the housing crisis - is that $2.2 trillion in ALT-A and ARM mortgages are due to re-set in 2009 and 2010. The number of foreclosures from this wave of defaults will extend the real estate and liquidity crisis to gigantic proportions. Subprime, in other words, was only the beginning.
But, stocks set sail higher from the outset and finished with strong gains.
Dow 8,668.39, +184.46 (2.17%)
NASDAQ 1,550.70, +40.38 (2.67%)
S&P 500 890.64, +21.22 (2.44%)
NYSE Composite 5,670.00, +135.36 (2.45%)
For the session (correction: tomorrow will be a full session, not a half session as I previously reported), advancers led decliners, 5134-1682, a very broad-based advance. New lows continued to dominate new highs, however, 240-25. Volume was light, and considerably better than Monday's pathetic no-show.
NYSE Volume 953,198,000
NASDAQ Volume 1,413,810,000
Crude oil futures for february took a 99-cent dip, closing at $39.03. Gold was also down slightly, losing $5.30, to $870.00. Silver (maybe the best investment of 2009) bucked the trend, gaining 17 cents, to $10.98.
Why silver for 2009? A couple of reasons are that all asset classes are going to get hit again in the coming year, but silver has already lost close to 50% from its high. There's also somewhat of a floor around $6, so prices, if they decline, should not go down much, whereas with gold, already inflated, could see $650. Also, silver is highly accessible to everybody. It's $10 or $11 per ounce, not $800. You can buy silver in multiple forms form multiple sources as well, so it may be the choice for small-time scroungers and fledgling investors, plus, it is readily liquidated. Those are some positive reasons beyond silver being well below the traditional gold-silver ratio.
If you can't buy gold, silver makes a nice substitute.
Monday, December 29, 2008
Markets Creak, Don't Break
Monday's holiday hangover resulted in another poor performance for stocks, posting their 6th losing session of the last eight.
With little economic data due this final week of 2008, investors seem to be nitpicking over the remains of already-battered equities, sending the bulk lower and continuing the daily series of 150+ 52-week lows. Much of the focus was on Israel's full-on assault on the Gaza Strip, though that horrid little piece of Earth really has little to do with economics overall, it at least takes people's minds off the grotesque reality that is the global economy.
Dow 8,483.93, -31.62 (0.37%)
NASDAQ 1,510.32, -19.92 (1.30%)
S&P 500 869.42, -3.38 (0.39%)
NYSE Composite 5,534.64, -3.55 (0.06%)
Losers beat gainers, 4421-2303, and new lows expanded over new highs, 222-16. That ratio has been extremely stable over the past month, an indication that investors are playing a hybrid game of Chicken and Texas Hold 'em, with nobody seemingly capable of making the "all in" gambit. Slowly but surely, stocks keep descending in search of a bottom retracing, which apparently is going to occur next year rather than at the end of this one. Anyone who hasn't already done year-end tax selling is more than likely hoping for a rally in January, pinned on hopes that the Obama team can rescue the economy, or at least momentarily lift the spirits of market participants.
Volume was much less than ordinary, at roughly half that of a healthy day's figure.
NYSE Volume 877,202,000
NASDAQ Volume 1,182,510,000
Commodities finished higher, with oil posting a substantial $2.31 gain, closing at $40.02. Gold picked up $4.10, to finish at $875.30. Silver added 28 cents, to $10.81 the ounce.
As usual during the holidays, trading velocity was sluggish, at best. There is only one more full trading day (Tuesday; Wednesday the markets close at 1:00 pm) before investors gladly put 2008 behind them.
With little economic data due this final week of 2008, investors seem to be nitpicking over the remains of already-battered equities, sending the bulk lower and continuing the daily series of 150+ 52-week lows. Much of the focus was on Israel's full-on assault on the Gaza Strip, though that horrid little piece of Earth really has little to do with economics overall, it at least takes people's minds off the grotesque reality that is the global economy.
Dow 8,483.93, -31.62 (0.37%)
NASDAQ 1,510.32, -19.92 (1.30%)
S&P 500 869.42, -3.38 (0.39%)
NYSE Composite 5,534.64, -3.55 (0.06%)
Losers beat gainers, 4421-2303, and new lows expanded over new highs, 222-16. That ratio has been extremely stable over the past month, an indication that investors are playing a hybrid game of Chicken and Texas Hold 'em, with nobody seemingly capable of making the "all in" gambit. Slowly but surely, stocks keep descending in search of a bottom retracing, which apparently is going to occur next year rather than at the end of this one. Anyone who hasn't already done year-end tax selling is more than likely hoping for a rally in January, pinned on hopes that the Obama team can rescue the economy, or at least momentarily lift the spirits of market participants.
Volume was much less than ordinary, at roughly half that of a healthy day's figure.
NYSE Volume 877,202,000
NASDAQ Volume 1,182,510,000
Commodities finished higher, with oil posting a substantial $2.31 gain, closing at $40.02. Gold picked up $4.10, to finish at $875.30. Silver added 28 cents, to $10.81 the ounce.
As usual during the holidays, trading velocity was sluggish, at best. There is only one more full trading day (Tuesday; Wednesday the markets close at 1:00 pm) before investors gladly put 2008 behind them.
Friday, December 26, 2008
Stocks Gain Without Volume
To say that today's trading is insignificant would probably be a gross overstatement.
When two-thirds of the investment community is at Nordstrom's or J.C. Penny's returning unwanted Christmas gifts or trying to get cash back for credit purchases (a nifty trick, if only it could be done) we can fully appreciate the dysfunctional qualities of the decrepit financial system which has almost fully devolved over the past three months.
Actually, the deterioration took much longer, but it's only being understood for what it really is, now. The system, based on Wall Street's over-leveraged credit machine, is not only broken, it is defunct. There will need to be structural changes in finance unlike any we've ever before witnessed. Either the US Government will have to step to the plate to become the lender of last resort (which is happening now) along with the Fed, or the country is going to become more localized and fragmented - a lot less like Wal-Mart and a lot more like your local bagel shop.
As America wends through its second greatest depression (Americans love to organize things in grandiose terms), big companies are going to find it more difficult to borrow, raise capital via stock offerings and attract the best talent. In reality, Wall Street may think better of attracting the cream of the B-school breed as those same silver-spoon cretins are the ones who are primarily responsible for all the structured debt, risk management and business rationales that have produced the current big bust in all asset values.
Those companies which do find a way to borrow for capital projects will meet with less success on the other end of the ledger sheet. Their borrowing will be more costly, more scrutinized and their projects less successful. America is turning its back on the corporate culture, along with massive CEO salaries, income disparity and the relative virtue of greed in favor of a more basic, functional, and above-all local business climate. In coming years, you'll be more likely to find recent business school graduates managing community-based organizations than mingling with the corporate elite. In fact, being a member of the corporate elite is about to become so serially uncool that billionaires in bullet-proof limousines will become targets of ridicule and scorn. Some may have to fear for their very lives. Some, undeniably, will lose theirs, as already has been the case with Thierry de la Villehuchet, the French investor who apparently committed suicide last week. Some inner forces are telling me to not believe the "official" story as so often apparent suicide is merely a cover for a more grisly and gruesome crime.
Be that as it may, the investment world is turning a blind eye toward Wall Street as this worst year since the 30s comes crashing to conclusion. Wall Street's about to become a very lonely place, very soon.
Dow 8,515.55, +47.07 (0.56%)
NASDAQ 1,530.24, +5.34 (0.35%)
S&P 500 872.80, +7.38 (0.85%)
NYSE Composite 5,538.19, +50.86 (0.93%)
Advancing issues outweighed losers, 4442-2080, while new lows beat out new highs yet again, 167-17. Volume was the lightest of any full trading day this year.
NYSE Volume 516,782,000
NASDAQ Volume 595,498,000
Crude oil for February delivery gained $2.36, to $37.71. Gold caught a huge updraft, gaining $23.30, to $871.20. $900 seems like a watershed for gold, one which it cannot seem to overcome. Silver was likewise on the rise, up 18 cents, to $10.53, which oddly seems like a fair, albeit slightly undervalued, price.
With 2 1/2 days left in the 2008 market year, investors are hoarding cash and looking elsewhere for investment, or, alternatively, safe parking for the next 18-24 months. While treasuries may not offer the greatest of return (around 2.15% for 10-year notes), at least they seem safe.
Happy Holidays, again.
When two-thirds of the investment community is at Nordstrom's or J.C. Penny's returning unwanted Christmas gifts or trying to get cash back for credit purchases (a nifty trick, if only it could be done) we can fully appreciate the dysfunctional qualities of the decrepit financial system which has almost fully devolved over the past three months.
Actually, the deterioration took much longer, but it's only being understood for what it really is, now. The system, based on Wall Street's over-leveraged credit machine, is not only broken, it is defunct. There will need to be structural changes in finance unlike any we've ever before witnessed. Either the US Government will have to step to the plate to become the lender of last resort (which is happening now) along with the Fed, or the country is going to become more localized and fragmented - a lot less like Wal-Mart and a lot more like your local bagel shop.
As America wends through its second greatest depression (Americans love to organize things in grandiose terms), big companies are going to find it more difficult to borrow, raise capital via stock offerings and attract the best talent. In reality, Wall Street may think better of attracting the cream of the B-school breed as those same silver-spoon cretins are the ones who are primarily responsible for all the structured debt, risk management and business rationales that have produced the current big bust in all asset values.
Those companies which do find a way to borrow for capital projects will meet with less success on the other end of the ledger sheet. Their borrowing will be more costly, more scrutinized and their projects less successful. America is turning its back on the corporate culture, along with massive CEO salaries, income disparity and the relative virtue of greed in favor of a more basic, functional, and above-all local business climate. In coming years, you'll be more likely to find recent business school graduates managing community-based organizations than mingling with the corporate elite. In fact, being a member of the corporate elite is about to become so serially uncool that billionaires in bullet-proof limousines will become targets of ridicule and scorn. Some may have to fear for their very lives. Some, undeniably, will lose theirs, as already has been the case with Thierry de la Villehuchet, the French investor who apparently committed suicide last week. Some inner forces are telling me to not believe the "official" story as so often apparent suicide is merely a cover for a more grisly and gruesome crime.
Be that as it may, the investment world is turning a blind eye toward Wall Street as this worst year since the 30s comes crashing to conclusion. Wall Street's about to become a very lonely place, very soon.
Dow 8,515.55, +47.07 (0.56%)
NASDAQ 1,530.24, +5.34 (0.35%)
S&P 500 872.80, +7.38 (0.85%)
NYSE Composite 5,538.19, +50.86 (0.93%)
Advancing issues outweighed losers, 4442-2080, while new lows beat out new highs yet again, 167-17. Volume was the lightest of any full trading day this year.
NYSE Volume 516,782,000
NASDAQ Volume 595,498,000
Crude oil for February delivery gained $2.36, to $37.71. Gold caught a huge updraft, gaining $23.30, to $871.20. $900 seems like a watershed for gold, one which it cannot seem to overcome. Silver was likewise on the rise, up 18 cents, to $10.53, which oddly seems like a fair, albeit slightly undervalued, price.
With 2 1/2 days left in the 2008 market year, investors are hoarding cash and looking elsewhere for investment, or, alternatively, safe parking for the next 18-24 months. While treasuries may not offer the greatest of return (around 2.15% for 10-year notes), at least they seem safe.
Happy Holidays, again.
Wednesday, December 24, 2008
Short Session, Small Gains
US equity markets closed early (1:00 pm), ahead of Christmas Eve, but investors took the opportunity to make some small purchases despite more gloomy economic news.
Dow 8,468.48, +48.99 (0.58%)
NASDAQ 1,524.90, +3.36 (0.22%)
S&P 500 865.42, +2.26 (0.26%)
NYSE Composite 5,487.33, +19.05 (0.35%)
New unemployment claims ratcheted higher in the most recent week, adding 586,000 to the roles of the unemployed. In a related note, much later in the day, Hilary Kramer predicted on PBS's Nightly Business Report that while government data would show unemployment at 10% in 2009, though the "real" unemployment - including discouraged workers the government does not count - may go as high as 20%.
Folks, those are near-depression numbers. during the Great Depression of the 1930s, unemployment was as high as 25% at some of the worst depths of the downturn. One of of five workers idled in today's economy is going to have a huge ripple effect, some of which we're seeing even now. With the official rate at 6.7% (a trifling) today, the "real" rate is likely closer to 13 or 14% already with no end in sight.
January should prove interesting in the least, when retailers add up their paltry results from the worst Christmas shopping season since 1968. There could be wholesale shuttering of stores across vast swaths of the retail landscape, leaving malls with gaping holes and no new tenants.
Other economic figures weren't spreading much holiday cheer. Personal spending slowed by 0.6% in November, and durable goods orders slipped 1.0%, though that number is seasonally-adjusted, and just plain missed the mark. The drop in durables was probably closer to 2.5-3%.
On the day, advancers beat back decliners, 3591-2773. New lows retained their advantage over new highs, 181-19. Volume was slim due to the 1:00 pm closure.
NYSE Volume 403,769,000
NASDAQ Volume 517,176,281
Oil slipped another $3.63, to $35.35. The metals improved, however. Gold was higher by $9.90, to $848.00. Silver added 9 cents, to $10.35.
That's a wrap. The Santa Claus rally seems to have fallen victim to deflation. Merry Christmas.
Dow 8,468.48, +48.99 (0.58%)
NASDAQ 1,524.90, +3.36 (0.22%)
S&P 500 865.42, +2.26 (0.26%)
NYSE Composite 5,487.33, +19.05 (0.35%)
New unemployment claims ratcheted higher in the most recent week, adding 586,000 to the roles of the unemployed. In a related note, much later in the day, Hilary Kramer predicted on PBS's Nightly Business Report that while government data would show unemployment at 10% in 2009, though the "real" unemployment - including discouraged workers the government does not count - may go as high as 20%.
Folks, those are near-depression numbers. during the Great Depression of the 1930s, unemployment was as high as 25% at some of the worst depths of the downturn. One of of five workers idled in today's economy is going to have a huge ripple effect, some of which we're seeing even now. With the official rate at 6.7% (a trifling) today, the "real" rate is likely closer to 13 or 14% already with no end in sight.
January should prove interesting in the least, when retailers add up their paltry results from the worst Christmas shopping season since 1968. There could be wholesale shuttering of stores across vast swaths of the retail landscape, leaving malls with gaping holes and no new tenants.
Other economic figures weren't spreading much holiday cheer. Personal spending slowed by 0.6% in November, and durable goods orders slipped 1.0%, though that number is seasonally-adjusted, and just plain missed the mark. The drop in durables was probably closer to 2.5-3%.
On the day, advancers beat back decliners, 3591-2773. New lows retained their advantage over new highs, 181-19. Volume was slim due to the 1:00 pm closure.
NYSE Volume 403,769,000
NASDAQ Volume 517,176,281
Oil slipped another $3.63, to $35.35. The metals improved, however. Gold was higher by $9.90, to $848.00. Silver added 9 cents, to $10.35.
That's a wrap. The Santa Claus rally seems to have fallen victim to deflation. Merry Christmas.
Subscribe to:
Posts (Atom)
Posts
