Does it take a genius to see where the market is headed and why the rally which began a year ago is probably the most overblown equity bubble of all time?
Probably. And you're probably not a genius, so you have to trust the talking (nodding) heads on CNBC and Fox Finance for direction. Or maybe your broker, or cabbie, or the shoeshine guy.
Stocks just keep going higher, and we all know that they shouldn't be where they are, especially when unemployment is still at 9.7% and the housing market is in the midst of a 10 year slump. Why complain? We're all getting richer.
Well, OK. Former VP Dick Cheney said "deficits don't matter." He also said the Iraqi resistance was in "their last throes." That was 2005. So, take your advice from him if you like, but many of us with just a little dose of common sense understand that deficits do matter and that Dick Cheney was - and is - a liar galore.
Dow 10,973.55, +46.48 (0.43%)
NASDAQ 2,429.53, +26.95 (1.12%)
S&P 500 1,187.44, +9.34 (0.79%)
NYSE Composite 7,600.93, +61.91 (0.82%)
Advancing issues socked it to decliners again, 4872-1690, almost a 3-1 margin; new highs beat new lows, 926-106. Volume, however, was so low that it now has become an embarrassment to any serious student of markets. The persistence of low volume in the market is indicative of one that is self-funded, and when the wheels come off, when the game is over, these very same self-funders will be rending each other's flesh, just like in 2008.
NYSE Volume 4,269,053,500
NASDAQ Volume 2,050,514,750
Crude oil broke through some key resistance and gained $1.75 on the day, closing at $86.62, the highest price in nearly 18 months. And it's done this in an environment full of surplus. We should expect Dick Cheney to come out of his crypt and declare that supply and demand doesn't matter, either.
Gold is closing in on its all-time high, gaining $7.80, to $1,132.90. Silver scored another 23 cents to finish at $18.10.
It's all just so perfect for a world full of suckers who don't want to feel any hardship.
Monday, April 5, 2010
Thursday, April 1, 2010
Gathering Momentum Prior to Payroll Data... April Fools?
First, an apology for yesterday's misinformation, in which I stated that the non-farm payroll data would appear within 24 hours of yesterday's post. I was mistaken, having jumbled Thursday and Friday. The government jobs data for March is due out Friday morning - tomorrow - at 8:30 am. Markets are closed, so the number can slip into the mainstream without much reaction, until Monday, that is.
Traders were tripping over each other today to buy stocks. Not that there was any particular rationale; stocks are overpriced right where they are. However, since it was the first trading day of a new quarter, there were probably a good number of funds with cash on hand, so, instead of just letting that money take up space, they put it to work. One can't really blame the traders, brokers and fund managers. They just don't know how to do anything else.
Dow 10,927.07, +70.44 (0.65%)
NASDAQ 2,402.58, +4.62 (0.19%)
S&P 500 1,178.10, +8.67 (0.74%)
NYSE Composite 7,539.02, +91.22 (1.22%)
Gainers beat back losers, 4348-2107. There were 593 new highs, and 73 new lows. Volume was better than average on the NASDAQ, but down in the dumps on the NYSE.
NYSE Volume 4,502,472,000
NASDAQ Volume 2,281,689,000
Oil gained $1.11, to a 17-month high, at $84.87 per barrel. Gold shot up $11.80, to $1,125.10, and silver was up 38 cents, at $17.88.
Most of the enthusiasm could be tied to this morning's initial unemployment claims figure, which came in at 439,000, which was a little better than the 450,000 expected, and slightly lower than last week's revised 445,000.
Call me skeptical, but the initial claims numbers sure seem more alarming than reassuring. If the investor class can get jazzed over beating expectations by 11,000, which works out to a 3% beat, then I suppose that the Dow could gain 1000 points if it were ever revealed that the US was actually creating jobs instead of losing them.
Unemployment remains stubbornly high at 9.7%, and these weekly unemployment claims should be falling into the neighborhood of 200-340,000 in a stable economy. From the looks of things, we're nowhere close to that.
Wall Street loves the numbers, though, as they seem to love every number, finding a silver lining in just about any data, no matter how horrific. It is rumored that many of those working on Wall Street also believe in the Easter Bunny. He looks a lot like Ben Bernanke.
Traders were tripping over each other today to buy stocks. Not that there was any particular rationale; stocks are overpriced right where they are. However, since it was the first trading day of a new quarter, there were probably a good number of funds with cash on hand, so, instead of just letting that money take up space, they put it to work. One can't really blame the traders, brokers and fund managers. They just don't know how to do anything else.
Dow 10,927.07, +70.44 (0.65%)
NASDAQ 2,402.58, +4.62 (0.19%)
S&P 500 1,178.10, +8.67 (0.74%)
NYSE Composite 7,539.02, +91.22 (1.22%)
Gainers beat back losers, 4348-2107. There were 593 new highs, and 73 new lows. Volume was better than average on the NASDAQ, but down in the dumps on the NYSE.
NYSE Volume 4,502,472,000
NASDAQ Volume 2,281,689,000
Oil gained $1.11, to a 17-month high, at $84.87 per barrel. Gold shot up $11.80, to $1,125.10, and silver was up 38 cents, at $17.88.
Most of the enthusiasm could be tied to this morning's initial unemployment claims figure, which came in at 439,000, which was a little better than the 450,000 expected, and slightly lower than last week's revised 445,000.
Call me skeptical, but the initial claims numbers sure seem more alarming than reassuring. If the investor class can get jazzed over beating expectations by 11,000, which works out to a 3% beat, then I suppose that the Dow could gain 1000 points if it were ever revealed that the US was actually creating jobs instead of losing them.
Unemployment remains stubbornly high at 9.7%, and these weekly unemployment claims should be falling into the neighborhood of 200-340,000 in a stable economy. From the looks of things, we're nowhere close to that.
Wall Street loves the numbers, though, as they seem to love every number, finding a silver lining in just about any data, no matter how horrific. It is rumored that many of those working on Wall Street also believe in the Easter Bunny. He looks a lot like Ben Bernanke.
Wednesday, March 31, 2010
Employment Data Bangs Stocks
People in the Bronx were probably wondering what that sound was right about 8:15 am, emanating from the financial district across the East River. It was the collective groans of investors heard upon the release of this morning's ADP Private Employment Report [PDF] for March.
The private data compiled by the experts at ADP should be held in much higher regard than the government's overworked and over-adjusted non farms payroll data, though it is not. Too many people have come to the erroneous conclusion that the government data is reliable, when nothing could be further from the truth. ADP, which, unlike the government, has no agenda to promote, offers a clear view of who's hiring, who isn't and in which sectors jobs are either gaining or losing.
This morning's report showed a decline of 23,000 jobs from February to March, and also revised February's loss from 20,000 to 24,000. So, the company has reported a total of 47,000 job losses in the private sector over the past two months.
And we're supposed to be in a recovery. The pundits and promoters on CNBC and in the financial press will tell you that employment is a lagging indicator, but believing in this kind of lag is getting a little bit old, so to speak. The economy "officially" turned the corner out of recession in the third quarter of 2009 (Remember "cash for clunkers?"), so, according to the usually suspect "experts", the US began growing again in July of 2009 and has continued to accelerate, or so we're led to believe.
Third Quarter 2009 GDP, according to the final estimate provided by the BLS, was up 2.2%, and the 4th quarter was up by even more, something on the order of 5.6%, again, according to official government estimates, which begs the question of how an "estimate" can ever be deemed "official."
In any case, it's now been 9 full months since the economy began to "recover,' but nowhere are there new jobs to be found, accentuated by today's ADP report. Many investors are still not going to be convinced that the economy isn't growing until the government data is released on Friday, which happens to be the Christian holiday of Good Friday, thus, the markets will be closed as is the tradition.
Now, when the government comes out with its data, expected to show an increase of anywhere from 75,000 to 300,000 jobs, the real story will be underneath the headline number and it will say that most of the new jobs were temporary Census jobs which will end in August. So, the big question for tomorrow is whether investors will come to their senses and realize that the March jobs number is, in reality, going to be pretty much a stinker, and get out of he way of the coming sell-a-thon, or will they stand fast, close ranks and defend their stakes in corporate America?
The answer will be provided within the next 24 hours, but I'm betting, based on today's down-up-down pattern, that stocks won't be affected too badly, only because our insider friends at Goldman Sachs, JP Morgan, Merrill Lynch and Citigroup will be there to backstop any precipitous decline, to say nothing of the clandestine work of the PPP.
It should be fun to watch, but, the truth of the matter is that jobs aren't gaining, and 9 months is an awful long LAG, somewhat unbelievable.
Dow 10,856.63, -50.79 (0.47%)
NASDAQ 2,397.96, -12.73 (0.53%)
S&P 500 1,169.43, -3.84 (0.33%)
NYSE Composite 7,447.80, -12.92 (0.17%)
Declining issues laid all over advancers, 3885-2575. New highs: 337; new lows: 52. Nothing unusual there, but volume was a bit higher than normal, an ominous sign for the Bulls.
NYSE Volume 5,221,368,500
NASDAQ Volume 2,398,859,000
Commodity traders may be in an even deeper state of denial than equity traders. Oil for May delivery rose another $1.39 today, to $83.76. Gold gained $8.80, to $1,113.30 and silver was up 20 cents, to $17.51.
This is where it gets tricky. The dollar index was down pretty sharply on the jobs report, which pushed commodity prices higher, though it's a fool's trade, because there's simply slack demand, no inflation and therefore, all asset classes should be discounted, not appreciated. The US dollar will rise and fall in the currency markets for a boatload of different reasons, most of them speculative, but the deflationary spiral continues unabated.
For a better perspective, US treasury bonds offer some clues, as they were driven higher today, pushing down yields, a natural occurrence following a weak economic report. The bond market is screaming double-dip, while the commodity and equity markets - which require much less discipline - are still lining up on the side of economic recovery. They both can't be right, and the smart money would side with the bond sellers, who must demand more in a weakened situation.
The US is in better shape than Europe, though not by much. Probably the best places outside the US to put money to work would be Brazil or India, whose economies at somewhat detached from the US-Europe-China triad.
The private data compiled by the experts at ADP should be held in much higher regard than the government's overworked and over-adjusted non farms payroll data, though it is not. Too many people have come to the erroneous conclusion that the government data is reliable, when nothing could be further from the truth. ADP, which, unlike the government, has no agenda to promote, offers a clear view of who's hiring, who isn't and in which sectors jobs are either gaining or losing.
This morning's report showed a decline of 23,000 jobs from February to March, and also revised February's loss from 20,000 to 24,000. So, the company has reported a total of 47,000 job losses in the private sector over the past two months.
And we're supposed to be in a recovery. The pundits and promoters on CNBC and in the financial press will tell you that employment is a lagging indicator, but believing in this kind of lag is getting a little bit old, so to speak. The economy "officially" turned the corner out of recession in the third quarter of 2009 (Remember "cash for clunkers?"), so, according to the usually suspect "experts", the US began growing again in July of 2009 and has continued to accelerate, or so we're led to believe.
Third Quarter 2009 GDP, according to the final estimate provided by the BLS, was up 2.2%, and the 4th quarter was up by even more, something on the order of 5.6%, again, according to official government estimates, which begs the question of how an "estimate" can ever be deemed "official."
In any case, it's now been 9 full months since the economy began to "recover,' but nowhere are there new jobs to be found, accentuated by today's ADP report. Many investors are still not going to be convinced that the economy isn't growing until the government data is released on Friday, which happens to be the Christian holiday of Good Friday, thus, the markets will be closed as is the tradition.
Now, when the government comes out with its data, expected to show an increase of anywhere from 75,000 to 300,000 jobs, the real story will be underneath the headline number and it will say that most of the new jobs were temporary Census jobs which will end in August. So, the big question for tomorrow is whether investors will come to their senses and realize that the March jobs number is, in reality, going to be pretty much a stinker, and get out of he way of the coming sell-a-thon, or will they stand fast, close ranks and defend their stakes in corporate America?
The answer will be provided within the next 24 hours, but I'm betting, based on today's down-up-down pattern, that stocks won't be affected too badly, only because our insider friends at Goldman Sachs, JP Morgan, Merrill Lynch and Citigroup will be there to backstop any precipitous decline, to say nothing of the clandestine work of the PPP.
It should be fun to watch, but, the truth of the matter is that jobs aren't gaining, and 9 months is an awful long LAG, somewhat unbelievable.
Dow 10,856.63, -50.79 (0.47%)
NASDAQ 2,397.96, -12.73 (0.53%)
S&P 500 1,169.43, -3.84 (0.33%)
NYSE Composite 7,447.80, -12.92 (0.17%)
Declining issues laid all over advancers, 3885-2575. New highs: 337; new lows: 52. Nothing unusual there, but volume was a bit higher than normal, an ominous sign for the Bulls.
NYSE Volume 5,221,368,500
NASDAQ Volume 2,398,859,000
Commodity traders may be in an even deeper state of denial than equity traders. Oil for May delivery rose another $1.39 today, to $83.76. Gold gained $8.80, to $1,113.30 and silver was up 20 cents, to $17.51.
This is where it gets tricky. The dollar index was down pretty sharply on the jobs report, which pushed commodity prices higher, though it's a fool's trade, because there's simply slack demand, no inflation and therefore, all asset classes should be discounted, not appreciated. The US dollar will rise and fall in the currency markets for a boatload of different reasons, most of them speculative, but the deflationary spiral continues unabated.
For a better perspective, US treasury bonds offer some clues, as they were driven higher today, pushing down yields, a natural occurrence following a weak economic report. The bond market is screaming double-dip, while the commodity and equity markets - which require much less discipline - are still lining up on the side of economic recovery. They both can't be right, and the smart money would side with the bond sellers, who must demand more in a weakened situation.
The US is in better shape than Europe, though not by much. Probably the best places outside the US to put money to work would be Brazil or India, whose economies at somewhat detached from the US-Europe-China triad.
Tuesday, March 30, 2010
Dow Breaks Above 10,900 and Nobody Throws a Party
It's a good thing that the stock market indices are not true gauges of the strength of the American economy - or maybe it's too bad - because, based upon recent performance, Americans would all be out dancing in the streets because our economic conditions appear so rosy.
Stocks were up again on Tuesday, and if you think this is beginning to sound like the proverbial broken record, it's because in the month of March, stock indices have posted gains on 17 of 21 trading days. With Wednesday being the close of the month and the quarter, be prepared for more of the same, as mutual fund managers perform the quadrennial rite of "window dressing" - buying stocks with good recent track records in a very slimy and lame attempt to lure more investors into their funds.
The managers buy shares of the good stocks at the end of the quarters, then prepare their prospectuses with the recently-purchased stocks highlighted, only they fail to mention that they've held positions in them for less than 30 days, often, much less, as in, a week or so.
It's just more of the same on Wall Street. The more one learns about the business of selling shares to largely unsuspecting, unsophisticated people with more money than they know what to do with, the more one gets the feeling that it's just one big scam designed to separate those people from their money, and, more often than not, it's very successful.
So, stocks were up today, but not much, because everyone is waiting for the monthly jobs report, delivered dutifully the first Friday of every month by Wall Street's main enabler, the government. On Friday, the markets will be closed, but the Bureau of Labor Statistics will release their widely-anticipated and heavily-massaged Non farm Payroll report for March, which will include upwards of 250,000 new, temporary Census jobs. Expectations are for an increase of 200,000 jobs, which, if it's only that many, will be a bust of sorts, considering the government is kicking in a quarter million all by themselves. Whisper numbers suggest something on the order of 300,000, which would be a blow-out figure.
Whatever number is released, it will surely be hailed as a sign that the economy is recovering, as is everything these days. A bird craps on a car: sign of economic recovery; LeBron James scores 40 points: sign of economic recovery; the world does not end: sign of economic recovery. You get the picture.
Dow 10,907.42, +11.56 (0.11%)
NASDAQ 2,410.69, +6.33 (0.26%)
S&P 500 1,173.27, -0.05 (0.00%)
NYSE Composite 7,460.72, -4.18 (0.06%)
Advancers beat decliners again, 3437-3109, ho-hum. New highs bettered new lows, 414-50. Volume continued to flatten out. Only those with nothing better to do were trading, as has been the case for months.
NYSE Volume 4,546,991,000
NASDAQ Volume 2,073,122,875
Oil was higher by 20 cents, to $82.37. Gold was lower by $5.80, to $1,104.50. Silver dipped 6 cents to $17.32.
It's all so tawdry and stupid. Invest for retirement, like you're going to actually be healthy enough to enjoy it, right?
Stocks were up again on Tuesday, and if you think this is beginning to sound like the proverbial broken record, it's because in the month of March, stock indices have posted gains on 17 of 21 trading days. With Wednesday being the close of the month and the quarter, be prepared for more of the same, as mutual fund managers perform the quadrennial rite of "window dressing" - buying stocks with good recent track records in a very slimy and lame attempt to lure more investors into their funds.
The managers buy shares of the good stocks at the end of the quarters, then prepare their prospectuses with the recently-purchased stocks highlighted, only they fail to mention that they've held positions in them for less than 30 days, often, much less, as in, a week or so.
It's just more of the same on Wall Street. The more one learns about the business of selling shares to largely unsuspecting, unsophisticated people with more money than they know what to do with, the more one gets the feeling that it's just one big scam designed to separate those people from their money, and, more often than not, it's very successful.
So, stocks were up today, but not much, because everyone is waiting for the monthly jobs report, delivered dutifully the first Friday of every month by Wall Street's main enabler, the government. On Friday, the markets will be closed, but the Bureau of Labor Statistics will release their widely-anticipated and heavily-massaged Non farm Payroll report for March, which will include upwards of 250,000 new, temporary Census jobs. Expectations are for an increase of 200,000 jobs, which, if it's only that many, will be a bust of sorts, considering the government is kicking in a quarter million all by themselves. Whisper numbers suggest something on the order of 300,000, which would be a blow-out figure.
Whatever number is released, it will surely be hailed as a sign that the economy is recovering, as is everything these days. A bird craps on a car: sign of economic recovery; LeBron James scores 40 points: sign of economic recovery; the world does not end: sign of economic recovery. You get the picture.
Dow 10,907.42, +11.56 (0.11%)
NASDAQ 2,410.69, +6.33 (0.26%)
S&P 500 1,173.27, -0.05 (0.00%)
NYSE Composite 7,460.72, -4.18 (0.06%)
Advancers beat decliners again, 3437-3109, ho-hum. New highs bettered new lows, 414-50. Volume continued to flatten out. Only those with nothing better to do were trading, as has been the case for months.
NYSE Volume 4,546,991,000
NASDAQ Volume 2,073,122,875
Oil was higher by 20 cents, to $82.37. Gold was lower by $5.80, to $1,104.50. Silver dipped 6 cents to $17.32.
It's all so tawdry and stupid. Invest for retirement, like you're going to actually be healthy enough to enjoy it, right?
Monday, March 29, 2010
The Economy Sucks but Stocks Keep Going Up
Stocks were up again today, and, truth be told, it's beginning to become a little bit sick and perverted, to think that US corporations are healthy and making money because they've been able to cut costs to the bone, costing US employees their jobs, or cutting the pay of those employees in order to please their investors. Soon enough, it will become truly sick and perverted, when these multi-national corporations begin to raise prices because they can't cut any more payroll or, like AT&T and Catterpillar, take huge write-offs and blame it on the increased costs of "ObamaCare," as they call it.
AT&T quietly announced late Friday that they would take a $1 billion charge because of all the evil new costs included in the heath care reform bill. One has to ask why they didn't mention this while the bill was in committee or on the senate and house floors. No, they just sat back and watched a billion dollars evaporate without raising their corporate voice?
Tell you what: any company that is that reckless with investor money should not be in your portfolio. If you own any AT&T stock, or the stock of any company that takes a write-off due to increased costs associated with the recently-passed health care reform bill, SELL IT, SELL ALL OF IT, SELL ALL OF IT NOW. They don't deserve your business, and furthermore, they're a sick, twisted bunch of creeps. Remember, AT&T was one of the companies which allowed the government unfettered access to YOUR phone calls, violated your privacy and probably broke numerous laws, but got away scott free. Screw them. They only care about themselves, not you, your cell phone or your land line. Just your money, that's all.
Not that I am particularly enamored with the health care legislation - I'm not - but AT&T is just using it as a scapegoat to cut employee benefits and/or hide other losses. Face it folks, these people are about as honest as Bernie Madoff's accountant.
Dow 10,895.86, +45.50 (0.42%)
NASDAQ 2,404.36, +9.23 (0.39%)
S&P 500 1,173.32, +6.73 (0.58%)
NYSE Composite 7,464.90, +61.32 (0.83%)
As usual, advancing issues outdid decliners, 4212-2245. There were 369 new highs and 42 new lows. So, nothing else has changed, except that volume returned to mostly insider trading. Participation levels are dropping like stones off a high bridge. It is possible that average people are awakening to the scheming ways of Wall Street after all. Most of the trading is being done by big banks, brokerages, hedge funds and mutual funds. Eventually, after they've fleeced the American - and foreign - public enough, they'll begin to eat each other's lunches and the market will be exposed for the grossly overvalued, manipulated joke it has become over the past two decades.
NYSE Volume 4,827,693,500
NASDAQ Volume 1,897,280,250
Oil was up $2.17, to $82.17, based on nothing but naked speculation and greed. Gold was up $6.10, to $1,110.30; silver higher by 48 cents, to $17.37, same reasons. Once again, in the face of a dawdling global economy and slack demand, prices continue to rise in stark contradiction to the "laws" of supply and demand.
Wake up, people. You toil all day, and sometimes part of your night, to do what? Pay utility bills, car payments, fuel, insurance and taxes. When that's all done you can look at what's left and Wall Street brokerages expect you to invest for your "retirement" or your kid's college education.
Get real. If retirement was such a grand idea, we'd do it when we're in our 20s or 30s not in our 70s and 80s. It's only because we're worth less as employees at that age: slower, less controllable, wiser, that companies want us to move along. You keep writing those checks. I'll keep telling you why it's a no-win situation.
AT&T quietly announced late Friday that they would take a $1 billion charge because of all the evil new costs included in the heath care reform bill. One has to ask why they didn't mention this while the bill was in committee or on the senate and house floors. No, they just sat back and watched a billion dollars evaporate without raising their corporate voice?
Tell you what: any company that is that reckless with investor money should not be in your portfolio. If you own any AT&T stock, or the stock of any company that takes a write-off due to increased costs associated with the recently-passed health care reform bill, SELL IT, SELL ALL OF IT, SELL ALL OF IT NOW. They don't deserve your business, and furthermore, they're a sick, twisted bunch of creeps. Remember, AT&T was one of the companies which allowed the government unfettered access to YOUR phone calls, violated your privacy and probably broke numerous laws, but got away scott free. Screw them. They only care about themselves, not you, your cell phone or your land line. Just your money, that's all.
Not that I am particularly enamored with the health care legislation - I'm not - but AT&T is just using it as a scapegoat to cut employee benefits and/or hide other losses. Face it folks, these people are about as honest as Bernie Madoff's accountant.
Dow 10,895.86, +45.50 (0.42%)
NASDAQ 2,404.36, +9.23 (0.39%)
S&P 500 1,173.32, +6.73 (0.58%)
NYSE Composite 7,464.90, +61.32 (0.83%)
As usual, advancing issues outdid decliners, 4212-2245. There were 369 new highs and 42 new lows. So, nothing else has changed, except that volume returned to mostly insider trading. Participation levels are dropping like stones off a high bridge. It is possible that average people are awakening to the scheming ways of Wall Street after all. Most of the trading is being done by big banks, brokerages, hedge funds and mutual funds. Eventually, after they've fleeced the American - and foreign - public enough, they'll begin to eat each other's lunches and the market will be exposed for the grossly overvalued, manipulated joke it has become over the past two decades.
NYSE Volume 4,827,693,500
NASDAQ Volume 1,897,280,250
Oil was up $2.17, to $82.17, based on nothing but naked speculation and greed. Gold was up $6.10, to $1,110.30; silver higher by 48 cents, to $17.37, same reasons. Once again, in the face of a dawdling global economy and slack demand, prices continue to rise in stark contradiction to the "laws" of supply and demand.
Wake up, people. You toil all day, and sometimes part of your night, to do what? Pay utility bills, car payments, fuel, insurance and taxes. When that's all done you can look at what's left and Wall Street brokerages expect you to invest for your "retirement" or your kid's college education.
Get real. If retirement was such a grand idea, we'd do it when we're in our 20s or 30s not in our 70s and 80s. It's only because we're worth less as employees at that age: slower, less controllable, wiser, that companies want us to move along. You keep writing those checks. I'll keep telling you why it's a no-win situation.
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