Sooner or later there was going to be some kind of rally and today was it, even though it wasn't anything to write home about.
After the Dow had been down for eight straight sessions and the S&P down seven in a row, the early morning trade looked to be more of the same with the major indices dropping to session lows around 10:45 am EDT. The Dow was down more than 160 points, officially touching down at 11,700, when the turnaround began. The S&P was sporting losses of nearly 20 points before heading higher and closing at the highs of the day.
It's not as though anything had changed at all. Italy is on the brink of default, following in the footsteps of neighboring EU nations, Ireland, Portugal and Greece. European-based banks are supposedly frozen with terror having exceeded all prudent boundaries for lending to highly-indebted nations.
And, here in the US, no change will come to the current jobs or housing situation as the congress has already embarked on a month-long vacation, after, of course, taking a few victory laps for their last-minute daring-do on raising the debt ceiling and putting forth a measure that cuts somewhere between $20 and $25 billion from the budget in 2012, less than 1/10th of one per cent of the entire budget, or, quite literally, a drop in the budget bucket.
The only thing moving stocks today - besides the obvious influence of the PPT - was the extremely oversold condition of the markets. The Dow is down 828 points since just July 21, exactly 10 trading sessions. There's a very realistic chance that this was only a knee-jerk reaction rally, based entirely upon the notion that stocks are cheap relative to where they were trading two weeks ago.
Dow 11,896.44, -29.82 (0.25%)
NASDAQ 2,693.07, -23.83 (0.89%)
S&P 500 1,260.34, -6.29 (0.50%)
NYSE Composite 7,853.20, -21.22 (0.27%)
Advancing issues finally took the edge over losers, 3737-2897. The NASDAQ posted 28 new highs, against 204 new lows, while the NYSE had just 14 new highs and 275 new lows, blowing the combined total up to 42 new highs and 479 new lows. This high gap indicates that stocks are on the verge of a severe, long-term breakdown, despite today's small gains. Volume was strong, but the buying seemed to be out of desperation and directed at short-term profit rather than long-term investment.
NASDAQ Volume 2,637,190,000
NYSE Volume 6,487,507,000
Two pieces of jobs-related data showed that the jobs market is still in quite the dodgy condition. The firm of Challenger, Gray and Christmas released their monthly survey of planned layoffs, which showed employers announcing 66,414 planned job cuts in July, up 60.3 percent from 41,432 in June. Meanwhile, the ADP monthly private payroll survey surged to 114,000 added jobs in July, a positive sign for Friday's non-farm payroll numbers from the BLS.
Commodities continued along their bifurcated path, with oil down $1.86, to $91.93, while gold surged to another record at $1,666.30, up a whopping $21.80 on the day. Silver rose $1.67, a gain of more than 4%, to $41.76, the highest close since May.
All of this sets up for an exciting end to the week. Thursday's initial unemployment claims will show the way on Thursday, while the non-farm payroll report - expected to show a gain of 100,000 jobs for July - should set the tone on Friday.
Wednesday, August 3, 2011
Tuesday, August 2, 2011
Congress Passes, President Signs Debt Ceiling Increase; Markets Tank
Passing with a bi-partisan majority of 74-26 in the Senate, the debt ceiling increase and associated debt reduction elements became law today as the President signed the bill this afternoon.
The bill, laden with policies and procedures for further debt reductions from an all-star panel of twelve senators and house members - not yet announced - has been panned by economists as well as by the same politicians who voted for or against the measure, saying the proposed cuts are too small and don't begin to take effect until 2013.
Once again, as congress heads off for a month-long vacation, the deficit and debt issues, along with Medicare, Medicade and Social Security reforms, have been kicked clear down the road until Thanksgiving, when the select panel will present its recommendations.
Wall Street, meanwhile, has other concerns, namely the continuing deterioration of the the US and global economies. Stocks were especially hard-hit at the end of the day, with losses cascading into the closing lows of the day, a more calamitous condition than has been seen in markets in nearly three years.
One would have thought that with the passage of the debt ceiling increase, stocks would rally, but the opposite turns out to be the case as economic data suggests the US is heading into another recession.
The S&P lost ground for the seventh straight session; the Dow made it eight down days in a row. Eash of those situations has not occurred since the disastrous month of October, 2008.
At the other end of the spectrum, gold and silver holders had a field day, with precious metals up sharply in response to a debt reduction bill that more or less satisfies the status quo, while doing little to address the structural issues presented.
Dow 11,866.62, -265.87 (2.19%)
NASDAQ 2,669.24, -75.37 (2.75%)
S&P 500 1,254.05, -32.89 (2.56%)
NYSE Composite 7,831.98, -208.95 (2.60%)
Declining issues buried advancers, 5276-1367. On the NASDAQ, 31 new highs were overwhelmed by 140 new lows. On the NYSE, only 20 stocks made new highs, while 160 reached new 52-week lows. The combined total of 51 new highs and 300 new lows puts further emphasis on the importance of the high-low indicator, which has been presaging a deep pull-back for weeks and is now sending out the strongest sell signal of all, with expanding numbers of stocks making new lows.
Volume was quite strong, yet another indicator that the trouble for equity investors is only beginning.
NASDAQ Volume 2,411,239,500
NYSE Volume 5,976,464,500
Crude oil finished to the downside as well, losing $1.10, to $93.79, the lowest price in over a month. As mentioned above, gold was a stellar performer, picking up $22.80, to a new record high of $1,644.50. Silver was also favored, gaining 78 cents, to $40.09 and higher in the after-hours.
An advance look at Friday's non-farm payroll for July will be made available Wednesday morning at 8:15 am, when ADP releases its monthly Employment Change report.
The bill, laden with policies and procedures for further debt reductions from an all-star panel of twelve senators and house members - not yet announced - has been panned by economists as well as by the same politicians who voted for or against the measure, saying the proposed cuts are too small and don't begin to take effect until 2013.
Once again, as congress heads off for a month-long vacation, the deficit and debt issues, along with Medicare, Medicade and Social Security reforms, have been kicked clear down the road until Thanksgiving, when the select panel will present its recommendations.
Wall Street, meanwhile, has other concerns, namely the continuing deterioration of the the US and global economies. Stocks were especially hard-hit at the end of the day, with losses cascading into the closing lows of the day, a more calamitous condition than has been seen in markets in nearly three years.
One would have thought that with the passage of the debt ceiling increase, stocks would rally, but the opposite turns out to be the case as economic data suggests the US is heading into another recession.
The S&P lost ground for the seventh straight session; the Dow made it eight down days in a row. Eash of those situations has not occurred since the disastrous month of October, 2008.
At the other end of the spectrum, gold and silver holders had a field day, with precious metals up sharply in response to a debt reduction bill that more or less satisfies the status quo, while doing little to address the structural issues presented.
Dow 11,866.62, -265.87 (2.19%)
NASDAQ 2,669.24, -75.37 (2.75%)
S&P 500 1,254.05, -32.89 (2.56%)
NYSE Composite 7,831.98, -208.95 (2.60%)
Declining issues buried advancers, 5276-1367. On the NASDAQ, 31 new highs were overwhelmed by 140 new lows. On the NYSE, only 20 stocks made new highs, while 160 reached new 52-week lows. The combined total of 51 new highs and 300 new lows puts further emphasis on the importance of the high-low indicator, which has been presaging a deep pull-back for weeks and is now sending out the strongest sell signal of all, with expanding numbers of stocks making new lows.
Volume was quite strong, yet another indicator that the trouble for equity investors is only beginning.
NASDAQ Volume 2,411,239,500
NYSE Volume 5,976,464,500
Crude oil finished to the downside as well, losing $1.10, to $93.79, the lowest price in over a month. As mentioned above, gold was a stellar performer, picking up $22.80, to a new record high of $1,644.50. Silver was also favored, gaining 78 cents, to $40.09 and higher in the after-hours.
An advance look at Friday's non-farm payroll for July will be made available Wednesday morning at 8:15 am, when ADP releases its monthly Employment Change report.
Getting By Without a Checking Account
According to a survey by the FDIC, roughly 7.7%, or 9 million adults in the United States do not have bank accounts, or, as the report states, are "unbanked."
The highest percentage is among Afro-Americans and Hispanics, at 21.7% and 19.3%, respectively, with Whites at the lower end of the unbanked population at a mere 3.3%.
Naturally, paying bills and doing everyday shopping is difficult these days without a debit or credit card, much less a checking account.
Into the fray jumps Green Dot Corporation, which provides retail based financial services for this largely underserved community with offerings such as My Green Dot, providing reloadable prepaid MasterCard or Visa cards that people can use for paying bills, shopping and other day-to-day needs or financial transactions.
My Green Dot is a web-based application site which can be accessed from any computer or mobile phone, where customers can check balances, add funds or have government checks directly deposited into their accounts.
Green Dot Corporation also operates domestic cash-acceptance networks that offer prepaid card reloading among other services to individuals, banks and financial service companies.
The company was founded in 1999 and is based in Monrovia, California.
Now, getting by without a checking account has become less of a chore and more of a technologically-driven benefit to those who opt for a less-traditional route.
The highest percentage is among Afro-Americans and Hispanics, at 21.7% and 19.3%, respectively, with Whites at the lower end of the unbanked population at a mere 3.3%.
Naturally, paying bills and doing everyday shopping is difficult these days without a debit or credit card, much less a checking account.
Into the fray jumps Green Dot Corporation, which provides retail based financial services for this largely underserved community with offerings such as My Green Dot, providing reloadable prepaid MasterCard or Visa cards that people can use for paying bills, shopping and other day-to-day needs or financial transactions.
My Green Dot is a web-based application site which can be accessed from any computer or mobile phone, where customers can check balances, add funds or have government checks directly deposited into their accounts.
Green Dot Corporation also operates domestic cash-acceptance networks that offer prepaid card reloading among other services to individuals, banks and financial service companies.
The company was founded in 1999 and is based in Monrovia, California.
Now, getting by without a checking account has become less of a chore and more of a technologically-driven benefit to those who opt for a less-traditional route.
Monday, August 1, 2011
House Passes Debt Ceiling Increase, 269-161
The theatrics could not have been any more pre-planned than to have Gabrielle Giffords make her first appearance in congress since her near-fatal shooting in Arizona on January 8 of this year.
Republicans votes overwhelmingly in favor of the measure, by a margin of 174-66. Democrats were split on the vote, with 95 voting for and 95 against.
The bill goes before the Senate, where passage is assured, on Tuesday, then on to the president for final signing into law.
Republicans votes overwhelmingly in favor of the measure, by a margin of 174-66. Democrats were split on the vote, with 95 voting for and 95 against.
The bill goes before the Senate, where passage is assured, on Tuesday, then on to the president for final signing into law.
Down to the Wire on Debt Ceiling Compromise
Over the weekend, House majority leader John Boehner genuflected to the Tea Party coalition of Republicans, put forth a bill that was sure to pass the House and die and the Senate, and that's exactly what happened.
By Monday morning, however, Senate majority leader Harry Reid had put together a compromise plan that has more chance of passing both bodies before the clock strikes midnight on the debt ceiling issue. Reid's plan calls for an initial $1 trillion in deficit reductions, all in the form of spending cuts, has a trigger for more cuts by Thanksgiving and puts the onus of delivering on mandatory cuts - should debate in congress not find suitable agreement - on a welve-member committee made up of six Republicans and six Democrats which would then make mandatory cuts to both Medicare and Defense spending among other programs.
While all this wrangling was going on the markets were closed over the weekend, but opened Monday morning in a very positive mood, with all major indices hitting their highs of the day within minutes after the opening bell.
The euphoric spirit was short-lived. At 10:00 am EDT, the ISM Index for July came in at 50.9, on expectations of a reading of 54.0. The sharp contraction - from 55.3 in June, reminded traders that whether or not the debt ceiling is raised, the US economy continues to stall out, sending all of the indices into free-fall. The Dow, which was up 139 points at the open, was lower by 100 points just 35 minutes later. Stocks continued to slide until the noon hour, bouncing off the bottom and finally rallying into the close, though all finished in negative territory.
For the Dow Jones Industrials, it was the seventh consecutive losing session, an event which has not occurred since 2002. And, as the market players took off their trading aprons and headed home, there still was no vote on the Reid plan, though indications were that both houses of congress would approve the measure and the president would sign it into law.
The debt ceiling, if the bill passes, will be raised to over $16.4 trillion, which should be enough to keep the Washington spendthrifts happy until after the 2012 elections. A vote is supposed to happen this afternoon or tonight, though no timetable has been announced.
What is annoying, or amusing, depending on your state of mind, is how the congress can waste so much time arguing, to only come up with a bill that satisfies nobody. The Tea Party faction held the public debt hostage, and likely will come out looking like winners in the end, though, typical of Washington, all will claim victory when actually nobody won a thing.
Meanwhile, we still await the vote, which is still somewhat in doubt.
Dow 12,132.49, -10.75 (0.09%)
NASDAQ 2,744.61, -11.77 (0.43%)
S&P 500 1,286.94, -5.34 (0.41%)
NYSE Composite 8,040.94, -38.50 (0.48%)
On the day, decliners beat advancers, 3416-3189. On the NASDAQ, 36 new highs were overshadowed by 99 new lows, while the NYSE registered 35 new highs and 93 new lows, making the combined total in favor of new lows, 192-71, continuing the sell signal. Volume was somewhat robust, as the kleptomaniacs behind the HFT (high frequency trading) computers shaved fractions from everyone on the way up, down and back up again.
NASDAQ Volume 2,176,811,750
NYSE Volume 4,948,650,500
Fortunately, crude oil, which was up sharply in the opening minutes of live trading, also reversed course and ended lower by 81 cents, at $94.89. Gold was also whipsawed, but ended down $9.50, at $1,621.70. Silver met a similar fate, losing 59 cents, to $39.31.
Whether or not the debt ceiling increase and debt reduction bill becomes law before the markets open tomorrow is in the hands of congress and president Obama, but the real test for markets will come later in the week, on Friday, when July non-farm payroll data is released. The market is expecting an increase of only 84,000 jobs, which would be bad enough to send stocks tumbling again. Many believe that number will not be met or even come close to, and that it's entirely possible that a number in the 20-30,000 range may be in store.
We'll get a preview on Wednesday, when ADP releases its private payroll report for the same period.
Money Daily will publish a special post, with more details, if and when the House and Senate approve the proposed legislation.
By Monday morning, however, Senate majority leader Harry Reid had put together a compromise plan that has more chance of passing both bodies before the clock strikes midnight on the debt ceiling issue. Reid's plan calls for an initial $1 trillion in deficit reductions, all in the form of spending cuts, has a trigger for more cuts by Thanksgiving and puts the onus of delivering on mandatory cuts - should debate in congress not find suitable agreement - on a welve-member committee made up of six Republicans and six Democrats which would then make mandatory cuts to both Medicare and Defense spending among other programs.
While all this wrangling was going on the markets were closed over the weekend, but opened Monday morning in a very positive mood, with all major indices hitting their highs of the day within minutes after the opening bell.
The euphoric spirit was short-lived. At 10:00 am EDT, the ISM Index for July came in at 50.9, on expectations of a reading of 54.0. The sharp contraction - from 55.3 in June, reminded traders that whether or not the debt ceiling is raised, the US economy continues to stall out, sending all of the indices into free-fall. The Dow, which was up 139 points at the open, was lower by 100 points just 35 minutes later. Stocks continued to slide until the noon hour, bouncing off the bottom and finally rallying into the close, though all finished in negative territory.
For the Dow Jones Industrials, it was the seventh consecutive losing session, an event which has not occurred since 2002. And, as the market players took off their trading aprons and headed home, there still was no vote on the Reid plan, though indications were that both houses of congress would approve the measure and the president would sign it into law.
The debt ceiling, if the bill passes, will be raised to over $16.4 trillion, which should be enough to keep the Washington spendthrifts happy until after the 2012 elections. A vote is supposed to happen this afternoon or tonight, though no timetable has been announced.
What is annoying, or amusing, depending on your state of mind, is how the congress can waste so much time arguing, to only come up with a bill that satisfies nobody. The Tea Party faction held the public debt hostage, and likely will come out looking like winners in the end, though, typical of Washington, all will claim victory when actually nobody won a thing.
Meanwhile, we still await the vote, which is still somewhat in doubt.
Dow 12,132.49, -10.75 (0.09%)
NASDAQ 2,744.61, -11.77 (0.43%)
S&P 500 1,286.94, -5.34 (0.41%)
NYSE Composite 8,040.94, -38.50 (0.48%)
On the day, decliners beat advancers, 3416-3189. On the NASDAQ, 36 new highs were overshadowed by 99 new lows, while the NYSE registered 35 new highs and 93 new lows, making the combined total in favor of new lows, 192-71, continuing the sell signal. Volume was somewhat robust, as the kleptomaniacs behind the HFT (high frequency trading) computers shaved fractions from everyone on the way up, down and back up again.
NASDAQ Volume 2,176,811,750
NYSE Volume 4,948,650,500
Fortunately, crude oil, which was up sharply in the opening minutes of live trading, also reversed course and ended lower by 81 cents, at $94.89. Gold was also whipsawed, but ended down $9.50, at $1,621.70. Silver met a similar fate, losing 59 cents, to $39.31.
Whether or not the debt ceiling increase and debt reduction bill becomes law before the markets open tomorrow is in the hands of congress and president Obama, but the real test for markets will come later in the week, on Friday, when July non-farm payroll data is released. The market is expecting an increase of only 84,000 jobs, which would be bad enough to send stocks tumbling again. Many believe that number will not be met or even come close to, and that it's entirely possible that a number in the 20-30,000 range may be in store.
We'll get a preview on Wednesday, when ADP releases its private payroll report for the same period.
Money Daily will publish a special post, with more details, if and when the House and Senate approve the proposed legislation.
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