There's a great degree of anxiety over the health of the US and world economies, and for good reason. Countries are experiencing contractions in trade that they have heretofore never before seen, such as Japan's 40% drop in exports and the mounting stockpiles of cars, trucks and other vehicles in US storage lots.
As expected, disruptions in the business cycle are everywhere, and Wall Street insiders are reeling from the pressure while putting on a game face as companies and their CEOs get set to face the music when 2nd quarter earnings are reported.
Meanwhile, beneath the veneer of stocks, bonds and assets, the banking crisis has not gone away, but has been merely submerged by the government and the compliant financial media.
James Grant, editor of Grant’s Interest Rate Observer recently said, “If the Fed examiners were set upon the Fed’s own documents - unlabeled documents - to pass judgment on the Fed’s capacity to survive the difficulties it faces in credit, it would shut this institution down. The Fed is undercapitalized in a way that Citicorp is undercapitalized.”
When I saw Grant's quotes, it reminded me of something I actually pondered a few months back, actually, January 23, 2009, in a post entitled Who Flipped the Switch? and, Is the Fed Busted?
Well, I guess we have our answer now. Thank you, Mr. Grant.
Actually, the plight of the Federal Reserve, though inexorably tied to that of the US government and eventually you and me, continues to deteriorate. There are only so many bad assets you can carry on your books before you start stinking up the place all by yourself. Confidence in the unofficial US central bank (a private institution, mind you) has fallen to new lows and congress, finally, reluctantly, is refusing to broaden its powers. Having the federal government and the Federal Reserve at loggerheads might actually be beneficial. Neither can point fingers for fiscal irresponsibility, for both are guilty. Should push actually come to shove, the government can simply legislate the Fed out of existence. That day may be coming sooner than anyone dares think. (Not a few people have suggested that severing ties to the Fed should have happened years ago.)
Bank of America is probably still insolvent, as is Citigroup (recently removed from the Dow Jones Industrials), JP Morgan Chase and Wells Fargo. After the next public stimulus, there will be another round of bank refinancing, as the last $700 billion will have proven to have fallen just a little - like $2.5 trillion - short of the mark.
Dow 8,178.41, +14.81 (0.18%)
NASDAQ 1,747.17, +1.00 (0.06%)
S&P 500 879.56, -1.47 (0.17%)
NYSE Composite 5,624.57, -30.07 (0.53%)
The various indices finished in mixed fashion once again, a fashion that's become a trend over the past three weeks. Overall, though, stocks were lower as declining issues far outpaced advancers, 4258-2118 (2:1) and new lows raced past new highs, 102-28, the largest margin in that metric in over a month. Volume was higher than recent days, indicating that stealth selling was being undertaken in a big way. Brokerages were likely unloading losers and ridding themselves of excess shares bought as window dressing at the close of the last quarter.
NYSE Volume 1,437,925,000
NASDAQ Volume 2,497,659,000
There is little doubt that investors are expecting the worst from the coming earnings seasons and have taken profits in a wide swath of securities. A major sell-off - something on the magnitude of 300-400 points on the Dow - could occur at any time while upside potential appears to be severely limited. Whatever the news or the government has been saying about the economy improving, Wall Street isn't buying it, and neither should the American public. The so-called "second shoe" is about to drop.
Even though stocks were spared somewhat during Wednesday's session, the economic currents have not been misread by commodity traders. Oil fell for the sixth straight session, losing $2.79, to close at $60.14, after US stockpiles were more robust than expected and an OPEC report suggested that production levels and therefore, the price of crude could be under pressure until 2013 due to a prolonged business downturn.
Gold fell by $19.80, to $909.30, getting precariously close to the $900 level, when most of the "gold bugs" have been screaming that gold will soar over $1000. That scenario looks to be more and more unlikely each passing day, as deflation continues to tighten its grip. Gold usually rises on fears of inflation, but in times like this, reacts like any other asset or commodity. If there's slack demand, there cannot be a rise in price. The same goes for silver, which lost another 37 cents on the day, closing at $12.85. Expect the metals to retrace prices from earlier this year or from last fall. For silver that would be $8.80-$11.60. For gold the range is from $712 to $880. If commodities as a whole continue to deteriorate along with world economies, expect gold and silver to decline along with them. Deflation is an all-inclusive club.
Wednesday, July 8, 2009
Tuesday, July 7, 2009
Bears Bag More Bulls
Those "green shoots" we heard so much about in April and May have apparently withered and died with the onset of summer. Fact of the matter is that the US economy is being kept afloat by a combination of stimulus money, bank accounting rules changes, gobs and gobs of fresh currency via the Federal Reserve and the burgeoning welfare-government state.
US consumers are alternately tapped out or scared, or both, and the tiny steps the federal government has employed thus far have done little to stimulate the economy. Trade flows are down, sales everywhere have redlined and state governments are on the verge of default. In California and New York, the two largest states by population, tax revenues have not kept pace with projections. Incomes are stagnant and tax increases have not filled the budget gaps which threaten to implode the entire apparatus of those two state governments.
With the economy in such desperate throes, stocks - and, for that matter, all other asset classes - cannot sustain current price levels, especially after the huge run-up from March through June. Stocks fell to their worst levels in two months as the Obama administration begins touting another round of stimulus, the latest trial balloon coming from presidential advisor Laura Tyson.
The problem with more stimulus is that it is exactly what won't work. Job creation programs for small business and fiscal restraint from Capitol Hill and state assemblies are the proper medicine. Government spending, the Keynesian solution, is simply piling up new debt that has to be repaid at some later date. The American people have had their fill of deficit spending, but the voices calling for restraint have been silenced and neutered by congress, the administration and the mainstream media. Instead of solving the crisis with spending cuts, the plain truth is that the government now is in a no-win position in which it has to keep spending to prevent the economy from falling even deeper into a deflationary spiral.
Government payments to welfare moms, disabled persons, and the aged are all that's keeping the US economy from complete collapse and taking down most of the rest of the world economies with it.
In all likelihood there will be another stimulus bill, aimed at selected, favored industry groups with their hands always out, instead of the rock-solid small business segment from which 2/3rds of all new jobs are created. We are entering an even more dangerous phase of the recession cycle: another retreat and round of job cuts is not far off. There simply has been no new job creation for more than 18 months, and with the recession by most accounts now stretching into month 20 or longer, it's time for the big wigs to admit that this one is different, longer, deeper and more serious than anyone has previously thought.
We're hurtling headlong into the most severe crisis in the history of our nation. Worse than the Great Depression and possibly even the Civil War. We are looking at the complete destruction of our financial system, fiat currency, Federal Reserve system and all the rest. The damage done by years of neglect, greed and horrible decisions by the Fed and Treasury is likely far beyond the understanding of even the brightest economists. We are in uncharted territory and the crowd which got us into it - the Larry Summers, Ben Bernankes, Tim Geithners, et. al., are uniquely unequipped to get us out of it.
By this time next year we could see vast segments of the economy completely wiped away, the currency (Federal Reserve Notes) unwanted by foreigners and US citizens alike, and a return to hard cash and barter. Nothing the government has done or will do (unless they have some miracle cure) will save us from currency debasement. It's going to be a long, hard time for many and not over in just a couple of months or years. This depression will last well into the next decade, probably until at least 2013.
On the day, stocks continued their descent back to the March lows. There's almost no doubt that we'll revisit the 6500 level on the Dow before year's end. The Dow has lost some 637 points since its close of 8799 on June 12.
Dow 8,163.60, -161.27 (1.94%)
Nasdaq 1,746.17, -41.23 (2.31%)
S&P 500 881.03, -17.69 (1.97%)
NYSE Composite 5,654.64, -115.36 (2.00%)
Today's trading was a continuation of Monday's downbeat tone, but with more participants on the selling side. Advancing issues were bludgeoned by losers, with declining issues ahead, 4879-1498. New lows continued their recent trend of outnumbering new highs, 76-43. Volume continued to be anemic, but these low trading levels are becoming a permanent feature of the market as many participants have either tapped out or left for either safer or more lucrative venues.
NYSE Volume 1,107,764,000
Nasdaq Volume 2,047,618,000
Oil took it on the chin again, losing $1.12, to $62.93. Other energy-related commodities registered similar declines. Gold bucked the trend with a gain of $4.80, finishing at $929.10. Silver lost 2 cents, to $13.22, just below the point at which old silver coins produce a melt value 10 times their face value.
Stocks and commodities should continue to fall over the next few weeks and continue their downward trajectory into the late summer and fall months. Second quarter earnings from US corporations are predicted to be marginally better than those from the first quarter, and how investors treat the news should provide direction for the overall market. The betting is that most will not be happy with "less bad" at this juncture. Investors with cash on the line will want to see actual improvement in reports. If not, profits will be quickly taken off the table, leading to another round of outright selling in which nobody wants to be left holding the bag. The final week of July and first two weeks of August could be quite disruptive to many portfolios, rivaling the declines seen last fall and earlier this year.
We are headed for a sizable shakeout. Alcoa (AA) starts the earnings parade on Wednesday.
US consumers are alternately tapped out or scared, or both, and the tiny steps the federal government has employed thus far have done little to stimulate the economy. Trade flows are down, sales everywhere have redlined and state governments are on the verge of default. In California and New York, the two largest states by population, tax revenues have not kept pace with projections. Incomes are stagnant and tax increases have not filled the budget gaps which threaten to implode the entire apparatus of those two state governments.
With the economy in such desperate throes, stocks - and, for that matter, all other asset classes - cannot sustain current price levels, especially after the huge run-up from March through June. Stocks fell to their worst levels in two months as the Obama administration begins touting another round of stimulus, the latest trial balloon coming from presidential advisor Laura Tyson.
The problem with more stimulus is that it is exactly what won't work. Job creation programs for small business and fiscal restraint from Capitol Hill and state assemblies are the proper medicine. Government spending, the Keynesian solution, is simply piling up new debt that has to be repaid at some later date. The American people have had their fill of deficit spending, but the voices calling for restraint have been silenced and neutered by congress, the administration and the mainstream media. Instead of solving the crisis with spending cuts, the plain truth is that the government now is in a no-win position in which it has to keep spending to prevent the economy from falling even deeper into a deflationary spiral.
Government payments to welfare moms, disabled persons, and the aged are all that's keeping the US economy from complete collapse and taking down most of the rest of the world economies with it.
In all likelihood there will be another stimulus bill, aimed at selected, favored industry groups with their hands always out, instead of the rock-solid small business segment from which 2/3rds of all new jobs are created. We are entering an even more dangerous phase of the recession cycle: another retreat and round of job cuts is not far off. There simply has been no new job creation for more than 18 months, and with the recession by most accounts now stretching into month 20 or longer, it's time for the big wigs to admit that this one is different, longer, deeper and more serious than anyone has previously thought.
We're hurtling headlong into the most severe crisis in the history of our nation. Worse than the Great Depression and possibly even the Civil War. We are looking at the complete destruction of our financial system, fiat currency, Federal Reserve system and all the rest. The damage done by years of neglect, greed and horrible decisions by the Fed and Treasury is likely far beyond the understanding of even the brightest economists. We are in uncharted territory and the crowd which got us into it - the Larry Summers, Ben Bernankes, Tim Geithners, et. al., are uniquely unequipped to get us out of it.
By this time next year we could see vast segments of the economy completely wiped away, the currency (Federal Reserve Notes) unwanted by foreigners and US citizens alike, and a return to hard cash and barter. Nothing the government has done or will do (unless they have some miracle cure) will save us from currency debasement. It's going to be a long, hard time for many and not over in just a couple of months or years. This depression will last well into the next decade, probably until at least 2013.
On the day, stocks continued their descent back to the March lows. There's almost no doubt that we'll revisit the 6500 level on the Dow before year's end. The Dow has lost some 637 points since its close of 8799 on June 12.
Dow 8,163.60, -161.27 (1.94%)
Nasdaq 1,746.17, -41.23 (2.31%)
S&P 500 881.03, -17.69 (1.97%)
NYSE Composite 5,654.64, -115.36 (2.00%)
Today's trading was a continuation of Monday's downbeat tone, but with more participants on the selling side. Advancing issues were bludgeoned by losers, with declining issues ahead, 4879-1498. New lows continued their recent trend of outnumbering new highs, 76-43. Volume continued to be anemic, but these low trading levels are becoming a permanent feature of the market as many participants have either tapped out or left for either safer or more lucrative venues.
NYSE Volume 1,107,764,000
Nasdaq Volume 2,047,618,000
Oil took it on the chin again, losing $1.12, to $62.93. Other energy-related commodities registered similar declines. Gold bucked the trend with a gain of $4.80, finishing at $929.10. Silver lost 2 cents, to $13.22, just below the point at which old silver coins produce a melt value 10 times their face value.
Stocks and commodities should continue to fall over the next few weeks and continue their downward trajectory into the late summer and fall months. Second quarter earnings from US corporations are predicted to be marginally better than those from the first quarter, and how investors treat the news should provide direction for the overall market. The betting is that most will not be happy with "less bad" at this juncture. Investors with cash on the line will want to see actual improvement in reports. If not, profits will be quickly taken off the table, leading to another round of outright selling in which nobody wants to be left holding the bag. The final week of July and first two weeks of August could be quite disruptive to many portfolios, rivaling the declines seen last fall and earlier this year.
We are headed for a sizable shakeout. Alcoa (AA) starts the earnings parade on Wednesday.
Monday, July 6, 2009
Deflating Away
Stocks traded in different directions on different exchanges, with the Dow and S&P up and the NASDAQ and NYSE Comp. lower. This has been a recurring theme of late due to the diversity of opinion on market direction and the relative benefits and deficiencies of various sectors in play.
The bottom line is that no sector has been a safe haven and that stocks as a whole have withered over the past month. With earnings reports coming out soon, stocks are sure to be under pressure for the next three to five weeks.
All of the major indices spent most of the day in the red, though there was noticeable buying effort in the afternoon, mostly among financials and health care-related issues.
Dow 8,324.87, +44.13 (0.53%)
NASDAQ 1,787.40, -9.12 (0.51%)
S&P 500 898.72, +2.30 (0.26%)
NYSE Composite 5,770.00, -5.24 (0.09%)
While the headline numbers may have been confusing, there was clarity in the internals, as declining issues raced past gainers, 3932-2446. New lows checked in at 83, with only 34 stocks making new highs. Volume remained at embarrassingly low levels.
NYSE Volume 1,140,635,000
NASDAQ Volume 1,996,618,000
Commodities continued to take on water, as they did at the end of last week. Oil sank to its lowest level in six weeks, closing down $2.68, at $64.05. Gold was down $6.70, to $924.30. Silver fell 17 cents to $13.24.
Deflationary pressure remains a key issue for economists world-wide.
The bottom line is that no sector has been a safe haven and that stocks as a whole have withered over the past month. With earnings reports coming out soon, stocks are sure to be under pressure for the next three to five weeks.
All of the major indices spent most of the day in the red, though there was noticeable buying effort in the afternoon, mostly among financials and health care-related issues.
Dow 8,324.87, +44.13 (0.53%)
NASDAQ 1,787.40, -9.12 (0.51%)
S&P 500 898.72, +2.30 (0.26%)
NYSE Composite 5,770.00, -5.24 (0.09%)
While the headline numbers may have been confusing, there was clarity in the internals, as declining issues raced past gainers, 3932-2446. New lows checked in at 83, with only 34 stocks making new highs. Volume remained at embarrassingly low levels.
NYSE Volume 1,140,635,000
NASDAQ Volume 1,996,618,000
Commodities continued to take on water, as they did at the end of last week. Oil sank to its lowest level in six weeks, closing down $2.68, at $64.05. Gold was down $6.70, to $924.30. Silver fell 17 cents to $13.24.
Deflationary pressure remains a key issue for economists world-wide.
Thursday, July 2, 2009
Stocks Hammered on Unemployment Data
Taking its queue from another back-sliding non-farms payroll report, stocks sold off right from the opening bell and finished with a loss rivaling the June 15 and June 22 losses of 28 and 22 points, respectively, the difference being that those prior losses occurred on Mondays, opening weeks, whereas this one ended a week, and was leading into a holiday weekend to boot, an ominous sign.
The data from the Bureau of Labor Statistics (BLS), released an hour prior to the market's opening bell, showed a worsening condition in the labor market, with a loss of 467,000 jobs for the month of June. Expectations were for many fewer job losses, in the range of 385,000. May job losses of were revised positively, to -322,000, from -345,000. The unemployment rate rose to 9.5%. True unemployment, including those whose unemployment insurance had expired without securing a new job, was estimated at 16.5%.
First time claims came in at 614,000 for the most recent week, another blow to the recovery crowd.
President Obama called the numbers, "sobering," while many others were calling the increased unemployment predictable and Obama's recovery plans ineffective. The administration is facing increased pressure to right the economy, as most average Americans are not seeing any improvement in their standards of living, better job prospects or assistance meeting mortgage and credit obligations.
Major indices fell for the third consecutive week, confirming beliefs that the market has made a short term negative turn. The Dow, NASDAQ and S&P all finished within support ranges - 8300, 1800 and 900, respectively.
Factory orders were up 1.2% in May after a revised gain of 0.5% in April, but the employment numbers overshadowed those marginally improved results.
Dow 8,284.21, -219.85 (2.59%)
NASDAQ 1,796.52, -49.20 (2.67%)
S&P 500 897.04, -26.29 (2.85%)
NYSE Composite 5,779.64, -174.37 (2.93%)
Losers beat gainers by a huge margin (5206-1155) and new lows overtook new highs, 59-29. Perhaps the most "sobering" figure was that of the day's volume of trade, which hit levels so low as to ring the liquidity alarm. Markets are so turgid and corrupted, that, in addition to the normal summer slowdown, trading volumes have hit multi-year lows. If US markets cannot be relied upon as providing some degree of flexibility and volatility, traders will seek out more pliant markets.
It is quite possible that the low volume levels are reflective of net outflows from US equities into other markets. This was the fear in Treasuries, though the poor liquidity scenario may have struck Wall Street instead. If that is the case, one could hardly blame an investor for seeking safer havens offering better returns. As the new high-new low indicator has been relevant throughout the market's decline, now volume is becoming more intriguing by the day.
NYSE Volume 626,027,000
NASDAQ Volume 1,955,272,000
Sentiment from the unemployment numbers spilled over into the commodity market, where crude oil stumbled badly, off $2.58, to $66.73. Gold slipped $10.30, to $931.00, with silver finishing lower by 35 cents, at $13.41.
Earnings reports will begin to fill the news hole next week. Judging by current data, some expectations may have to be lowered and the start date for recovery pushed back to a more realistic date, some time next year.
Enjoy the 4th, remembering that the holiday is all about FREEDOM.
The data from the Bureau of Labor Statistics (BLS), released an hour prior to the market's opening bell, showed a worsening condition in the labor market, with a loss of 467,000 jobs for the month of June. Expectations were for many fewer job losses, in the range of 385,000. May job losses of were revised positively, to -322,000, from -345,000. The unemployment rate rose to 9.5%. True unemployment, including those whose unemployment insurance had expired without securing a new job, was estimated at 16.5%.
First time claims came in at 614,000 for the most recent week, another blow to the recovery crowd.
President Obama called the numbers, "sobering," while many others were calling the increased unemployment predictable and Obama's recovery plans ineffective. The administration is facing increased pressure to right the economy, as most average Americans are not seeing any improvement in their standards of living, better job prospects or assistance meeting mortgage and credit obligations.
Major indices fell for the third consecutive week, confirming beliefs that the market has made a short term negative turn. The Dow, NASDAQ and S&P all finished within support ranges - 8300, 1800 and 900, respectively.
Factory orders were up 1.2% in May after a revised gain of 0.5% in April, but the employment numbers overshadowed those marginally improved results.
Dow 8,284.21, -219.85 (2.59%)
NASDAQ 1,796.52, -49.20 (2.67%)
S&P 500 897.04, -26.29 (2.85%)
NYSE Composite 5,779.64, -174.37 (2.93%)
Losers beat gainers by a huge margin (5206-1155) and new lows overtook new highs, 59-29. Perhaps the most "sobering" figure was that of the day's volume of trade, which hit levels so low as to ring the liquidity alarm. Markets are so turgid and corrupted, that, in addition to the normal summer slowdown, trading volumes have hit multi-year lows. If US markets cannot be relied upon as providing some degree of flexibility and volatility, traders will seek out more pliant markets.
It is quite possible that the low volume levels are reflective of net outflows from US equities into other markets. This was the fear in Treasuries, though the poor liquidity scenario may have struck Wall Street instead. If that is the case, one could hardly blame an investor for seeking safer havens offering better returns. As the new high-new low indicator has been relevant throughout the market's decline, now volume is becoming more intriguing by the day.
NYSE Volume 626,027,000
NASDAQ Volume 1,955,272,000
Sentiment from the unemployment numbers spilled over into the commodity market, where crude oil stumbled badly, off $2.58, to $66.73. Gold slipped $10.30, to $931.00, with silver finishing lower by 35 cents, at $13.41.
Earnings reports will begin to fill the news hole next week. Judging by current data, some expectations may have to be lowered and the start date for recovery pushed back to a more realistic date, some time next year.
Enjoy the 4th, remembering that the holiday is all about FREEDOM.
Wednesday, July 1, 2009
Stocks Start 3rd Quarter with Modest Gains
After closing out what was a very good quarter with a final bummer of a day, investors toed the waters at the opening of the third quarter, nibbling at positions in a very slow session. Stocks finished with solid gains on low volume, after a slew of economic reports showed the economy remaining in the throes of recession, though clearly not in as rough shape as 3 to 6 months ago.
The Chicago Purchasing Manager's Index (PMI) was up sharply in June, to 39.9, after a reading of 34.9 in May. Still, the number was well below 50, which is the threshold for expansion. The report confirmed continued weakness in manufacturing, though slightly improved on a month-to-month basis.
The Institute for Supply Management (ISM) index was also up in June, with a reading of 44.8 following a 42.8 number in May.
Construction spending for May was off 0.9%, offsetting a gain of 0.6% in the prior month. Pending home sales were up a marginal 0.1% in May, after April's surprisingly good showing of a 7.1% gain.
Finally, the ADP Employment Report [PDF}, an unbiased snapshot of the private labor market, recorded a loss of 473,000 jobs in May, slightly better than the 485,000 jobs lost in May.
With all that to chew on, stocks were up sharply right out of the gate, but peaked early in the day. After 10:30 am, the major indices lost value for the remainder of the session.
Dow 8,504.06, +57.06 (0.68%)
NASDAQ 1,845.72, +10.68 (0.58%)
S&P 500 923.31, +3.99 (0.43%)
NYSE Composite 5,953.82, +48.67 (0.82%)
Advancing issues took back the initiative over decliners, beating them, 4476-1870. New highs outnumbered new lows, 74-62, but volume was depressingly low, not uncommon in a holiday-shortened week. The markets will be closed on Friday.
NYSE Volume 950,845,000
NASDAQ Volume 2,000,025,000
Crude oil futures fell 58 cents, to $69.31, after the government reported a build in gasoline inventory of as much as 2.3 million barrels. That kind of data could spark a real rout in oil futures, as prices traditionally peak nearing the 4th of july holiday. With that much of a glut on the market and the economy generally weak, demand for oil and gas may remain slack for months, cutting into prices. One would normally think that in a true open market, but the futures market is anything but, dominated by hedge funds and large traders who can exert enormous control over price movements.
Gold shot up $13.90, to $941.30, while silver tacked on 16 cents, to $13.76.
The Commerce Department releases June Non-farm payroll data tomorrow morning prior to the market open. With the ADP figures already in hand, the government's massaged figures may prove anti-climactic. Still, we're off and running in the quarter which was promised to be the one in which recovery really began. There are still signs that the recession is easing off, but actual recovery may still be as many as 6 months away, if not more. Investors may find themselves hoping for more than companies can deliver, though there have been reports of analysts raising estimates for a large number of companies. If they can meet those numbers, stocks could actually advance further. We are now in the 23rd month of the bear market, so a turn could actually occur at any time, though I'd hedge my bets against it. Another sharp decline, and possibly a retest of the March lows are probably more likely.
The Chicago Purchasing Manager's Index (PMI) was up sharply in June, to 39.9, after a reading of 34.9 in May. Still, the number was well below 50, which is the threshold for expansion. The report confirmed continued weakness in manufacturing, though slightly improved on a month-to-month basis.
The Institute for Supply Management (ISM) index was also up in June, with a reading of 44.8 following a 42.8 number in May.
Construction spending for May was off 0.9%, offsetting a gain of 0.6% in the prior month. Pending home sales were up a marginal 0.1% in May, after April's surprisingly good showing of a 7.1% gain.
Finally, the ADP Employment Report [PDF}, an unbiased snapshot of the private labor market, recorded a loss of 473,000 jobs in May, slightly better than the 485,000 jobs lost in May.
With all that to chew on, stocks were up sharply right out of the gate, but peaked early in the day. After 10:30 am, the major indices lost value for the remainder of the session.
Dow 8,504.06, +57.06 (0.68%)
NASDAQ 1,845.72, +10.68 (0.58%)
S&P 500 923.31, +3.99 (0.43%)
NYSE Composite 5,953.82, +48.67 (0.82%)
Advancing issues took back the initiative over decliners, beating them, 4476-1870. New highs outnumbered new lows, 74-62, but volume was depressingly low, not uncommon in a holiday-shortened week. The markets will be closed on Friday.
NYSE Volume 950,845,000
NASDAQ Volume 2,000,025,000
Crude oil futures fell 58 cents, to $69.31, after the government reported a build in gasoline inventory of as much as 2.3 million barrels. That kind of data could spark a real rout in oil futures, as prices traditionally peak nearing the 4th of july holiday. With that much of a glut on the market and the economy generally weak, demand for oil and gas may remain slack for months, cutting into prices. One would normally think that in a true open market, but the futures market is anything but, dominated by hedge funds and large traders who can exert enormous control over price movements.
Gold shot up $13.90, to $941.30, while silver tacked on 16 cents, to $13.76.
The Commerce Department releases June Non-farm payroll data tomorrow morning prior to the market open. With the ADP figures already in hand, the government's massaged figures may prove anti-climactic. Still, we're off and running in the quarter which was promised to be the one in which recovery really began. There are still signs that the recession is easing off, but actual recovery may still be as many as 6 months away, if not more. Investors may find themselves hoping for more than companies can deliver, though there have been reports of analysts raising estimates for a large number of companies. If they can meet those numbers, stocks could actually advance further. We are now in the 23rd month of the bear market, so a turn could actually occur at any time, though I'd hedge my bets against it. Another sharp decline, and possibly a retest of the March lows are probably more likely.
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