Earnings results were just good enough - from Bank of America and Citigroup's weakness, to IBM and Google's strength - to push stocks modestly into positive territory for the day on two exchanges and marginally in the red on two others. The general ambivalence displayed by the day's trading is indicative of another topping out, or, at least a weekend resting point, as the Dow has rung up gains for 5 straight sessions, the NASDAQ, 6. It's a winning streak worthy of note and one that put an end to 4 consecutive losing weeks.
Over the past five sessions the Dow has tacked on an impressive 597 points, the NASDAQ perked up 130; the S&P gained 61 and the NYSE Composite added 411. For all the talk about there being no recovery in sight, the first wave of corporate earnings provided enough positive vibe to send the markets off on a nice upward run.
The question still remains as to whether the gains are sustainable, though given the early returns, the companies being traded seem to have adjusted to a new set of economic circumstances. While earnings are still down from what they were a year ago, so are stock prices. Investors are weighing the current results against an uncertain future, but remain positive, though skeptical. At least there seems to be little worry about a complete melt-down a la last fall.
Dow 8,743.94, +32.12 (0.37%)
NASDAQ 1,886.61, +1.58 (0.08%)
S&P 500 940.38, -0.36 (0.04%)
NYSE Composite 6,038.11, -4.94 (0.08%)
On the day, declining issues narrowly beat advancers, 3376-2936, but new highs bested new lows, 103-71. Volume remained down, though not down to levels of previous sessions, but close. The low level of trading velocity continues to be a topic overlooked by the mainstream financial press. Sluggish trading is a clear sign that investors ate still skittish and widely risk-averse. The vast majority of trades are of the short-term variety, more akin to gambling than traditional investing.
NYSE Volume 1,290,375,000
NASDAQ Volume 1,890,890,000
Commodity traders were also encouraged, sending crude futures higher again, up $1.48, to $63.50. Gold brought an additional $2.10 per ounce, at $937.50. Silver tacked on 17 cents, to close at $13.40.
The coming two weeks will be chock full of earnings hits and misses, though the general indications are that most companies have avoided all-out bust scenarios and may be looking to avoid returning to near-term bottoms from March. The US and world economies have stumbled badly, but they're still functioning, albeit at a decreased capacity.
Friday, July 17, 2009
Sorry for the Delay...
Stocks were up yesterday, but I was unable to report, as personal events took precedence over my work routine.
Nick Gagliano, my father, 84 years old, passed away overnight. I discovered him early Thursday morning, and, as any of you who have dealt with a family death know, spent the rest of the day consoling and being consoled by other family members, friends and neighbors.
My father was an investor, trader, and options player. It was he who introduced me to the world of finance and stocks. Not always the most prudent investor, he made some very savvy trades in his day. He was a survivor of the Great Depression, a WWII veteran, an attorney, a good and honest man. During the recent downturn in the fall of 2008, he, for once, had followed my advice and was out of the market. He will be missed by many, none more than this writer. He joins his wife of 55 years, Molly, who passed away in 2003.
I will try to keep up with events in the markets as much as possible over the next few days.
For the record, here are the results from Tuesday:
Dow 8,711.82, +95.61 (1.11%)
NASDAQ 1,885.03, +22.13 (1.30%)
S&P 500 940.74, +8.06 (0.84%)
NYSE Compos 6,043.05, +49.89 (0.78%)
Advancing issues did better than decliners, 4232-2045. There were 100 new highs to 74 new lows. Volume moderated back toward the low end, though the rally is now four days on the Dow and five for the NASDAQ.
NYSE Volume 1,144,284,500
NASDAQ Volume 1,908,150,750
Current commodity prices:
Crude oil: $62.02
Gold: $935.40
Silver: $13.24
One note on JP Morgan Chase (JPM) results, earning 28 cents per share in the second quarter, as analysts were seeking 4 cents per share profit, is that the estimate had been lowered dramatically over the past 30 days, from as high as 39 cents per share. Since the quarter was very robust, the bank received a good deal of government largess and the FASB allowed the banks to employ mark-to-market accounting in their reporting, it was no wonder that Morgan was gushing with fresh capital.
These bank earnings are more than just a little suspicious.
Nick Gagliano, my father, 84 years old, passed away overnight. I discovered him early Thursday morning, and, as any of you who have dealt with a family death know, spent the rest of the day consoling and being consoled by other family members, friends and neighbors.
My father was an investor, trader, and options player. It was he who introduced me to the world of finance and stocks. Not always the most prudent investor, he made some very savvy trades in his day. He was a survivor of the Great Depression, a WWII veteran, an attorney, a good and honest man. During the recent downturn in the fall of 2008, he, for once, had followed my advice and was out of the market. He will be missed by many, none more than this writer. He joins his wife of 55 years, Molly, who passed away in 2003.
I will try to keep up with events in the markets as much as possible over the next few days.
For the record, here are the results from Tuesday:
Dow 8,711.82, +95.61 (1.11%)
NASDAQ 1,885.03, +22.13 (1.30%)
S&P 500 940.74, +8.06 (0.84%)
NYSE Compos 6,043.05, +49.89 (0.78%)
Advancing issues did better than decliners, 4232-2045. There were 100 new highs to 74 new lows. Volume moderated back toward the low end, though the rally is now four days on the Dow and five for the NASDAQ.
NYSE Volume 1,144,284,500
NASDAQ Volume 1,908,150,750
Current commodity prices:
Crude oil: $62.02
Gold: $935.40
Silver: $13.24
One note on JP Morgan Chase (JPM) results, earning 28 cents per share in the second quarter, as analysts were seeking 4 cents per share profit, is that the estimate had been lowered dramatically over the past 30 days, from as high as 39 cents per share. Since the quarter was very robust, the bank received a good deal of government largess and the FASB allowed the banks to employ mark-to-market accounting in their reporting, it was no wonder that Morgan was gushing with fresh capital.
These bank earnings are more than just a little suspicious.
Wednesday, July 15, 2009
Intel Earnings Report Lifts Stocks
After the bell on Tuesday, chipmaker Intel reported second quarter earnings results far ahead of Wall Street expectations. That was enough to give investors confidence that the economy was continuing to mend - albeit slowly - and that stocks - especially tech companies with strong balance sheets - would weather the storm and produce solid results.
As a result, all the major indices gapped up at the open and continued to tack on impressive gains for the entire session.
There have been conflicting data and no consensus on the economy or the stock market of late, but as earnings roll out, opinions are beginning to shift to more positive tones, and nothing will light up a rally like a strong report from a solid company, such as Intel.
Intel reported a second-quarter loss of 7 cents a share, compared with a profit of $1.6 billion, or 28 cents a share, for the year-earlier period. The loss was attributable to a hefty fine imposed by the European Union. Excluding the charge, Intel posted profits of 18 cents a share, better than analyst's expectations for 8 cents per share.
Dow 8,616.21, +256.72 (3.07%)
NASDAQ 1,862.90, +63.17 (3.51%)
S&P 500 932.68, +26.84 (2.96%)
NYSE Composite 5,993.16, +187.58 (3.23%)
Gainers outnumbered losers by a wide margin, 5583-936. New highs took back the advantage over new lows, 87-70, and, in what was probably the most encouraging sign for market participants, volume was significantly higher than it had been over the past month, a sign that more money was in the market for gains on the day. Whether stocks can build on the momentum of the first three days of the week will be telling. The Dow has rung up gains in each of the three session, while the NASDAQ is on a four-day winning streak.
NYSE Volume 1,374,278,000
NASDAQ Volume 2,577,142,000
Taking their lead from the stock market, commodity traders pushed prices higher in a spasm of buying. Oil gained $2.02, to $61.54; gold picked up $16.60, to close at $939.40, while silver added 35 cents, to $13.21.
On the agenda for tomorrow, second quarter earnings report from JP Morgan, one of the banks which took a roller-coaster ride, price-wise, over the past 12 months. The company is expected to have turned a profit in the current quarter, and earnings are expected in the area of 4 cents per share, which is a number significantly lower than just a month ago, when analysts were looking for 37 cents a share. Depending on the size of the rally and Morgan's results, the snake oil could be flowing come tomorrow. Buyers of this current snort-term rally may get less than what they've bargained for.
As a result, all the major indices gapped up at the open and continued to tack on impressive gains for the entire session.
There have been conflicting data and no consensus on the economy or the stock market of late, but as earnings roll out, opinions are beginning to shift to more positive tones, and nothing will light up a rally like a strong report from a solid company, such as Intel.
Intel reported a second-quarter loss of 7 cents a share, compared with a profit of $1.6 billion, or 28 cents a share, for the year-earlier period. The loss was attributable to a hefty fine imposed by the European Union. Excluding the charge, Intel posted profits of 18 cents a share, better than analyst's expectations for 8 cents per share.
Dow 8,616.21, +256.72 (3.07%)
NASDAQ 1,862.90, +63.17 (3.51%)
S&P 500 932.68, +26.84 (2.96%)
NYSE Composite 5,993.16, +187.58 (3.23%)
Gainers outnumbered losers by a wide margin, 5583-936. New highs took back the advantage over new lows, 87-70, and, in what was probably the most encouraging sign for market participants, volume was significantly higher than it had been over the past month, a sign that more money was in the market for gains on the day. Whether stocks can build on the momentum of the first three days of the week will be telling. The Dow has rung up gains in each of the three session, while the NASDAQ is on a four-day winning streak.
NYSE Volume 1,374,278,000
NASDAQ Volume 2,577,142,000
Taking their lead from the stock market, commodity traders pushed prices higher in a spasm of buying. Oil gained $2.02, to $61.54; gold picked up $16.60, to close at $939.40, while silver added 35 cents, to $13.21.
On the agenda for tomorrow, second quarter earnings report from JP Morgan, one of the banks which took a roller-coaster ride, price-wise, over the past 12 months. The company is expected to have turned a profit in the current quarter, and earnings are expected in the area of 4 cents per share, which is a number significantly lower than just a month ago, when analysts were looking for 37 cents a share. Depending on the size of the rally and Morgan's results, the snake oil could be flowing come tomorrow. Buyers of this current snort-term rally may get less than what they've bargained for.
Tuesday, July 14, 2009
It Was Another Sucker Rally
Answering the question posed on Monday, the suckers are about to be reeled in.
After Meredith Whitney singlehandedly boosted the Dow by 185 points - the best performance in 6 weeks - with her call for an ever-higher, ever-growing Goldman Sachs, Tuesday's follow-through was nothing more than a gaping, loud yawn which could be heard booming down the canyons of Wall Street all the way to the beaches at Del Mar.
Action was spotty and choppy as the indices see-sawed across the break-even line. Eventually, some brave bulls hung in until the final bell, but the sentiment was far from universal. In fact, Goldman Sachs, which reported better-than-expected earnings for the second quarter, and was up 7 points Monday, finished the day up a very modest 22 cents.
Dow 8,359.49, +27.81 (0.33%)
Nasdaq 1,799.73, +6.52 (0.36%)
S&P 500 905.84, +4.79 (0.53%)
NYSE Composite 5,805.58, +44.21 (0.77%)
Although advances were broad-based with winners getting past losers, 4054-2274, new lows retained their edge over new highs, 59-56, and volume was pretty much confined to the boys at Goldman and JP Morgan plus a few hedge funds in New Canaan, CT. Everyone else, it seems, is where they should be: on vacation.
NYSE Volume 978,933,000
Nasdaq Volume 1,890,954,000
On a happier note, Bernie Madoff began serving his 150-year prison sentence at the Butner Federal Correctional Complex, in Durham, North Carolina, today. Bernie will be in good company. The prison also houses John Rigas, the Aldephia Communications scoundrel among other tax cheats, forgers and scammers. I case you want to check on Bernie's well-being, he can be found under prison number 61727-054, at the federal prison system's web site.
Commodity traders apparently aren't sold on either recovery or recession, as prices stalled out on Tuesday. Oil fell 17 cents, to $59.52, gold gained 30 cents, to $922.80, while silver tacked on 7 cents, to $12.86. Most other commodities were traded within small ranges.
The Bureau of Labor statistics released the Producer Price Index for June, showing a 1.8% seasonally-adjusted gain over May, which is a little bit misleading since the finished goods prices declined 4.6% over the past year. While the 1.6% gain in one month may be alarming to some, most of the veterans on Wall Street realize we're in a bit of deflation, so the number didn't engender more "inflation" talk.
After the close, Yum Brands (YUM) and Intel (INTC) both issued 2nd quarter results that beat the street. The rally could have been merely taking a breather, though investors may also be getting pickier with earnings increases slim.
After Meredith Whitney singlehandedly boosted the Dow by 185 points - the best performance in 6 weeks - with her call for an ever-higher, ever-growing Goldman Sachs, Tuesday's follow-through was nothing more than a gaping, loud yawn which could be heard booming down the canyons of Wall Street all the way to the beaches at Del Mar.
Action was spotty and choppy as the indices see-sawed across the break-even line. Eventually, some brave bulls hung in until the final bell, but the sentiment was far from universal. In fact, Goldman Sachs, which reported better-than-expected earnings for the second quarter, and was up 7 points Monday, finished the day up a very modest 22 cents.
Dow 8,359.49, +27.81 (0.33%)
Nasdaq 1,799.73, +6.52 (0.36%)
S&P 500 905.84, +4.79 (0.53%)
NYSE Composite 5,805.58, +44.21 (0.77%)
Although advances were broad-based with winners getting past losers, 4054-2274, new lows retained their edge over new highs, 59-56, and volume was pretty much confined to the boys at Goldman and JP Morgan plus a few hedge funds in New Canaan, CT. Everyone else, it seems, is where they should be: on vacation.
NYSE Volume 978,933,000
Nasdaq Volume 1,890,954,000
On a happier note, Bernie Madoff began serving his 150-year prison sentence at the Butner Federal Correctional Complex, in Durham, North Carolina, today. Bernie will be in good company. The prison also houses John Rigas, the Aldephia Communications scoundrel among other tax cheats, forgers and scammers. I case you want to check on Bernie's well-being, he can be found under prison number 61727-054, at the federal prison system's web site.
Commodity traders apparently aren't sold on either recovery or recession, as prices stalled out on Tuesday. Oil fell 17 cents, to $59.52, gold gained 30 cents, to $922.80, while silver tacked on 7 cents, to $12.86. Most other commodities were traded within small ranges.
The Bureau of Labor statistics released the Producer Price Index for June, showing a 1.8% seasonally-adjusted gain over May, which is a little bit misleading since the finished goods prices declined 4.6% over the past year. While the 1.6% gain in one month may be alarming to some, most of the veterans on Wall Street realize we're in a bit of deflation, so the number didn't engender more "inflation" talk.
After the close, Yum Brands (YUM) and Intel (INTC) both issued 2nd quarter results that beat the street. The rally could have been merely taking a breather, though investors may also be getting pickier with earnings increases slim.
Monday, July 13, 2009
Financials Fun or Another Sucker Rally?
With 2nd quarter earnings about to begin rolling out tomorrow, Monday's movement in the markets was something to ponder befor possibly jumping into the breach. Leading the way were financials, the very same banks that caused huge financial failures less than a year ago.
Are the banks fully rejuvenated? Can they be trusted as guardians of important capital - for mortgages, college, retirement, etc. - or have investors forgotten so soon how cavalier these same bankers were with other people's money. Sadly, I am of the camp that says they cannot be trusted. Every time financial stocks lead rallies, I see the same fraudulent faces, the same lying CEOs, none of whom have been rightfully indicted, prosecuted and jailed for their various crimes: collusion, delusion, evasion and deceit.
After falling for four straight weeks, maybe the market was prime for gains, but one must bear in mind where we are in the greater cycle. Stocks are just coming off highs, and, with the economy still struggling, one has to question the wisdom of jumping in at this particular juncture. Maybe for short term profits, this is the right move, but longer term, stocks could easily become cheaper in months ahead. If this is a short term timing rally and an in-and-out play, which is predominantly what our markets have become, this may be worthwhile, but waiting until the first few days' worth of earnings results come to the fore seems to be a more prudent position.
In any case, stocks were brought higher by the banks, which lifted every sector by at least 1%.
Dow 8,331.68, +185.16 (2.27%)
NASDAQ 1,793.21, +37.18 (2.12%)
S&P 500 901.05, +21.92 (2.49%)
NYSE Composite 5,761.37, +133.85 (2.38%)
The movement was broad based, with advancing issues beating out decliners, 4980-1400. New lows, however, maintained their edge over new highs, 79-40. Volume was nothing about which to get excited, another indication that not all hands are on board with this move. Weak volume has been an consistent feature marking the end of the rally and the beginning of the correction four weeks ago.
NYSE Volume 1,189,460,000
NASDAQ Volume 1,921,335,000
Commodities were all over the map. Those in the energy-related sector followed oil's downward draft of 20 cents, closing at $59.69. The metals were all up, with gold higher by $10.00, to $922.50, and silver up 14 cents, to $12.79. Livestock and foodstuffs finished in mixed fashion.
Banks will be in focus the rest of this week as a number of big names announce earnings. Goldman Sachs, a particularly important bellwether, reports tomorrow.
Are the banks fully rejuvenated? Can they be trusted as guardians of important capital - for mortgages, college, retirement, etc. - or have investors forgotten so soon how cavalier these same bankers were with other people's money. Sadly, I am of the camp that says they cannot be trusted. Every time financial stocks lead rallies, I see the same fraudulent faces, the same lying CEOs, none of whom have been rightfully indicted, prosecuted and jailed for their various crimes: collusion, delusion, evasion and deceit.
After falling for four straight weeks, maybe the market was prime for gains, but one must bear in mind where we are in the greater cycle. Stocks are just coming off highs, and, with the economy still struggling, one has to question the wisdom of jumping in at this particular juncture. Maybe for short term profits, this is the right move, but longer term, stocks could easily become cheaper in months ahead. If this is a short term timing rally and an in-and-out play, which is predominantly what our markets have become, this may be worthwhile, but waiting until the first few days' worth of earnings results come to the fore seems to be a more prudent position.
In any case, stocks were brought higher by the banks, which lifted every sector by at least 1%.
Dow 8,331.68, +185.16 (2.27%)
NASDAQ 1,793.21, +37.18 (2.12%)
S&P 500 901.05, +21.92 (2.49%)
NYSE Composite 5,761.37, +133.85 (2.38%)
The movement was broad based, with advancing issues beating out decliners, 4980-1400. New lows, however, maintained their edge over new highs, 79-40. Volume was nothing about which to get excited, another indication that not all hands are on board with this move. Weak volume has been an consistent feature marking the end of the rally and the beginning of the correction four weeks ago.
NYSE Volume 1,189,460,000
NASDAQ Volume 1,921,335,000
Commodities were all over the map. Those in the energy-related sector followed oil's downward draft of 20 cents, closing at $59.69. The metals were all up, with gold higher by $10.00, to $922.50, and silver up 14 cents, to $12.79. Livestock and foodstuffs finished in mixed fashion.
Banks will be in focus the rest of this week as a number of big names announce earnings. Goldman Sachs, a particularly important bellwether, reports tomorrow.
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