Before getting to why the major indices were all over the map today, a couple of key economic data points:
The NAHB Housing Market Index fell for the first time in seven months, from 28 in March to 25 in April. A figure of 50 is considered "break even" wherein more builders are more confident. Obviously, this latest dip leasves new hoe builders nowhere close.
Regionally, the Northeast posted a four-point gain to 29 (its highest level since May of 2010), the West saw no change at 32, the South declined three poins to 24 and the Midwest was the weakest, posting an eight-point decline to 23.
With new home sales on tap for tomorrow, housing appears to be as weak as it ever has.
Retail sales for March posted an unexpected 0.8% gain on expectations of just a 0.3% rise, somewhat of a surprise considering high fuel costs and other issues facing consumers (no jobs, no homes, high debt, etc.).
On the downside, the Empire Manufacturing Index nose-dived from 20.21 in March to 6.56 in April. The collected wisdom of forecasters expected a decline - to 17.6. New orders and shipments were down, while the employment situation was mixed with more jobs, but for shorter durations.
Taken together, these data sets reveal a US economy that is crawling along and possibly sputtering to stall speed.
Investors in Apple (AAPL) took some long-overdue profits on Monday, sending the world's largest company by market cap down 25.10 points (4.15%), to close at 580.13, the worst decline for Apple in more than six months. Investors were buoyed by a 45% gain in the company stock since October, however.
The weight of Apple on the various indices was obvious, with the NASDAQ the most severely affected, the S&P less so. Meanwhile, the Dow registered a strong showing, with 24 of the 30 components sporting gains, led by Travelers (TRV), Proctor & Gamble (PG), Wal-Mart (WMT) and DuPont (DD).
Otherwise, it was a straightforward session, with much of the focus centered on Spain's 10-year note, which spiked back above 6% on the day and sent bond holders scrambling for the safety of the German Bund, which is nearing historic lows. The pressure on Spain's funding continues to fuel speculation that the country will need a Greek-style bailout soon.
Dow 12,921.41, +71.82 (0.56%)
NASDAQ 2,988.40, -22.93 (0.76%)
S&P 500 1,369.57, -0.69 (0.05%)
NYSE Composite 7,949.57, +18.47 (0.23%)
NASDAQ Volume 1,566,279,375
NYSE Volume 3,444,850,000
Combined NYSE & NASDAQ Advance - Decline: 3083-2500
Combined NYSE & NASDAQ New highs - New lows: 109-106
WTI crude oil: 102.93, +0.10
Gold: 1,649.70, -10.50
Silver: 31.37, -0.02
Monday, April 16, 2012
Saturday, April 14, 2012
Saturday Morning Financial Comedy
Three short takes to relieve the stress of fiat-induced financial instability:
Tim Hawkins:
Clarke and Dawe:
South Park:
Tim Hawkins:
Clarke and Dawe:
South Park:
Margaritaville
Get More: SOUTH
PARKmore...
Friday, April 13, 2012
China's Slowing GDP a Symptom of Faltering Global Economy
Yesterday's rumor that China would report first quarter GDP of upwards of 9% growth - which fueled the ramp-up in stocks on Thursday - turned into today's reality that China's economy is slowing, and quickly.
When the news that China's economy grew less than expected - by 8.1%, the slowest rate of growth in the world's most populous country in nearly three years - traders in Europe and the US could not sell shares of selected equities quickly enough. By the time US markets opened, futures had cratered to their lowest levels of the morning and the selling continued throughout the lackluster session.
By he close, Thursday's gains were all but eviscerated, leaving investors to wonder what comes next in terms of the global economic condition.
Also, prior to the open, two major banks, JP Morgan Chase (JPM) and Wells-Fargo (WFC) announced first quarter earnings. Both beat estimates, but the stocks sold off on the reports, many analysts citing bookkeeping chicanery for the better-than-expected returns.
By the end of the day, JPM dropped 3.64%, while WFC lost 3.47%. Both stocks are near 52-week highs and are currently looking like serious short-sell candidates.
The Chinese data should not have come as a surprise. Since most of China's recent growth has been tied to exports - mainly to the US and Europe - slack demand has crimped output and China's nascent middle class is not yet robost enough to fill in the growth gap. Concerns over the debt condition of the Eurozone have not abated, and, in fact, may be exacerbated as Spain's situation worsens.
Sooner or later, principals are going to have to come to terms with the global condition of faltering sovereign nations, an excessive overhang of debt and limited solutions from fiscal and monetary authorities. The search for yield has many investors scrambling again into dividend-paying stocks or the marginal returns of US treasuries, which rallied once more, the ten-year dipping to 1.99% at the close of trading.
In such an environment, there is no safe harbor except for hard assets, though even oil, gold and silver were pounded lower on the news.
The major averages finished the week with losses of around two percent. The idea that stocks sporting solid gains for the first quarter have been selling off nevertheless, portends more downside for equity investors.
Deflation is a cruel environment, for which most in the financial arena are ill-prepared. The global economy is close to stall speed, which, for most ordinary people, is bliss, though the highly-leveraged worldwide financial system is surely strained at present.
Dow 12,849.67, -136.91 (1.05%)
NASDAQ 3,011.33, -44.22 (1.45%)
S&P 500 1,370.27, -17.30 (1.25%)
NYSE Composite 7,937.65, -102.31 (1.27%)
NASDAQ Volume 1,437,334,625
NYSE Volume 3,433,928,000
Combined NYSE & NASDAQ Advance - Decline: 1332-4234
Combined NYSE & NASDAQ New highs - New lows: 95-69
WTI crude oil: 102.83, -0.81
Gold: 1,660.20, -20.40
Silver: 31.39, -1.14
When the news that China's economy grew less than expected - by 8.1%, the slowest rate of growth in the world's most populous country in nearly three years - traders in Europe and the US could not sell shares of selected equities quickly enough. By the time US markets opened, futures had cratered to their lowest levels of the morning and the selling continued throughout the lackluster session.
By he close, Thursday's gains were all but eviscerated, leaving investors to wonder what comes next in terms of the global economic condition.
Also, prior to the open, two major banks, JP Morgan Chase (JPM) and Wells-Fargo (WFC) announced first quarter earnings. Both beat estimates, but the stocks sold off on the reports, many analysts citing bookkeeping chicanery for the better-than-expected returns.
By the end of the day, JPM dropped 3.64%, while WFC lost 3.47%. Both stocks are near 52-week highs and are currently looking like serious short-sell candidates.
The Chinese data should not have come as a surprise. Since most of China's recent growth has been tied to exports - mainly to the US and Europe - slack demand has crimped output and China's nascent middle class is not yet robost enough to fill in the growth gap. Concerns over the debt condition of the Eurozone have not abated, and, in fact, may be exacerbated as Spain's situation worsens.
Sooner or later, principals are going to have to come to terms with the global condition of faltering sovereign nations, an excessive overhang of debt and limited solutions from fiscal and monetary authorities. The search for yield has many investors scrambling again into dividend-paying stocks or the marginal returns of US treasuries, which rallied once more, the ten-year dipping to 1.99% at the close of trading.
In such an environment, there is no safe harbor except for hard assets, though even oil, gold and silver were pounded lower on the news.
The major averages finished the week with losses of around two percent. The idea that stocks sporting solid gains for the first quarter have been selling off nevertheless, portends more downside for equity investors.
Deflation is a cruel environment, for which most in the financial arena are ill-prepared. The global economy is close to stall speed, which, for most ordinary people, is bliss, though the highly-leveraged worldwide financial system is surely strained at present.
Dow 12,849.67, -136.91 (1.05%)
NASDAQ 3,011.33, -44.22 (1.45%)
S&P 500 1,370.27, -17.30 (1.25%)
NYSE Composite 7,937.65, -102.31 (1.27%)
NASDAQ Volume 1,437,334,625
NYSE Volume 3,433,928,000
Combined NYSE & NASDAQ Advance - Decline: 1332-4234
Combined NYSE & NASDAQ New highs - New lows: 95-69
WTI crude oil: 102.83, -0.81
Gold: 1,660.20, -20.40
Silver: 31.39, -1.14
Thursday, April 12, 2012
Stocks Continue Roller Coaster Ride; Google Pops on Earnings
In this space a couple of days ago, it was theorized that stocks were not offering directional signs to investors, and that was on a nearly 200-point drop on the Dow.
Since then, just two days hence, the major indices have erased those ugly losses and added to the upside, with gusto.
Despite the highest number of initial unemployment claims since January (380,000) being announced prior to the opening bell stocks started a slow progression to the upside which lasted all session long, no doubt spurred on by the whirring computer algos which, as machines, only do as they are programmed.
The paucity of trades didn't slow the market in the least, as volume was, as per usual, non-existent for the most part. Somewhere in between the flat PPI reading (no kidding, PPI was unchanged for March) and Google's first quarter earnings announcement, somebody let slip a rumor of more QE from the Fed, or something like that, at the computer-traders lapped it up like so much cheery data, even though none of the recent spate of speeches by Fed governors included any mention of further easing, except on an iffy basis, that being a severe downturn in the economy.
The markets being more akin to a roller coaster rather than the usual casino-like environment of late, the day-trading brokerages and hedge funds had a field day skewering shorts until they screamed for mercy.
As for the aforementioned Google (GOOG) earnings report, the company - which reported after the bell - blew away estimates by earning $10.08 per share, well beyond the expected $9.66 offered by analysts. The company also announced a 2-for-1 stock split, though the proposal will not be voted on until June, though it is widely considered that it will meet with shareholder approval.
The beat goes on, despite occasional dissonance along the way.
Wells Fargo (WFC) and JP Morgan Chase (JPM) are next up on the earnings parade, reporting well before the bell on Friday morning.
Dow 12,986.58, +181.19 (1.41%)
NASDAQ 3,055.55, +39.09 (1.30%)
S&P 500 1,387.57, +18.86 (1.38%)
NYSE Composite 8,039.95, +127.10 (1.61%)
NASDAQ Volume 1,491,138,875
NYSE Volume 3,543,994,000
Combined NYSE & NASDAQ Advance - Decline: 4410-1193
Combined NYSE & NASDAQ New highs - New lows: 103-39
WTI crude oil: 103.64, +0.94
Gold: 1,680.60, +20.30
Silver: 32.52, +1.00
Since then, just two days hence, the major indices have erased those ugly losses and added to the upside, with gusto.
Despite the highest number of initial unemployment claims since January (380,000) being announced prior to the opening bell stocks started a slow progression to the upside which lasted all session long, no doubt spurred on by the whirring computer algos which, as machines, only do as they are programmed.
The paucity of trades didn't slow the market in the least, as volume was, as per usual, non-existent for the most part. Somewhere in between the flat PPI reading (no kidding, PPI was unchanged for March) and Google's first quarter earnings announcement, somebody let slip a rumor of more QE from the Fed, or something like that, at the computer-traders lapped it up like so much cheery data, even though none of the recent spate of speeches by Fed governors included any mention of further easing, except on an iffy basis, that being a severe downturn in the economy.
The markets being more akin to a roller coaster rather than the usual casino-like environment of late, the day-trading brokerages and hedge funds had a field day skewering shorts until they screamed for mercy.
As for the aforementioned Google (GOOG) earnings report, the company - which reported after the bell - blew away estimates by earning $10.08 per share, well beyond the expected $9.66 offered by analysts. The company also announced a 2-for-1 stock split, though the proposal will not be voted on until June, though it is widely considered that it will meet with shareholder approval.
The beat goes on, despite occasional dissonance along the way.
Wells Fargo (WFC) and JP Morgan Chase (JPM) are next up on the earnings parade, reporting well before the bell on Friday morning.
Dow 12,986.58, +181.19 (1.41%)
NASDAQ 3,055.55, +39.09 (1.30%)
S&P 500 1,387.57, +18.86 (1.38%)
NYSE Composite 8,039.95, +127.10 (1.61%)
NASDAQ Volume 1,491,138,875
NYSE Volume 3,543,994,000
Combined NYSE & NASDAQ Advance - Decline: 4410-1193
Combined NYSE & NASDAQ New highs - New lows: 103-39
WTI crude oil: 103.64, +0.94
Gold: 1,680.60, +20.30
Silver: 32.52, +1.00
Wednesday, April 11, 2012
US Stocks Bounce Back, But Close Flat on Weak Volume
Yesterday's deep decline was followed on Wednesday by the typical knee-jerk, snap-back, dead cat bounce rally, which occurred at the market open but quickly ran out of steam.
For the remainder of the session after 11:00 am EDT, stocks drifted about in a narrow range and volume was noticeably tepid, considering that Tuesday's volume was among the highest of the year. It was also confirmed that Monday's incredibly weak showing was the second lowest volume day of the year, yet another example of how, despite the best efforts of Wall Street hucksters and Federal Reserve pumping, individual investors and practically anybody who is not a fund manager or professional of some ilk simply does not want to be in this market for equities.
Today's lackluster showing was in spite of Alcoa's strong earnings report after the bell on Tuesday, a pleasant earnings kick-off surprise that was promptly disregarded.
For a day, at least, there was no imminent threat of currency or sovereign collapse coming from across the Atlantic where almost all European bourses registered modest gains.
There was little new with which to move markets, a condition which may change on Thursday, as initial unemployment claims and the March PPI figures are released prior to the opening bell. On Friday, JP Morgan Chase (JPM) and Wells-Fargo (WFC) announce first quarter earnings before the open.
In one of the more absurd wastes of taxpayer money, the nearly-invisible Attorney General, Eric Holder, unsheathed a his DOJ sword with a price- fixing antitrust lawsuit against Apple (AAPL) and five book publishers for colluding to fix prices of e-books sold on the iPad platform. Three of the named publishers have already agreed to a settlement, though several states are pursuing civil actions of their own. The suit seeks monetary damages. Apple had no comment.
Clearly, the Department of Justice is completely inept, pursuing nothing other than sure-win, low-hanging fruit variety lawsuits and the federal government is desperate for dough, though what they'll gain from this silly effort is akin to a teaspoon from a barrel of debt.
Dow 12,805.39, +89.46 (0.70%)
NASDAQ 3,016.46, +25.24 (0.84%)
S&P 500 1,368.71, +10.12 (0.74%)
NYSE Composite 7,905.74, +63.82 (0.81%)
NASDAQ Volume 1,504,835,625
NYSE Volume 3,724,551,250
Combined NYSE & NASDAQ Advance - Decline: 4435-1196
Combined NYSE & NASDAQ New highs - New lows: 58-59
WTI crude oil: 102.70, +1.68
Gold: 1,660.30, -0.40
Silver: 31.52, -0.16
For the remainder of the session after 11:00 am EDT, stocks drifted about in a narrow range and volume was noticeably tepid, considering that Tuesday's volume was among the highest of the year. It was also confirmed that Monday's incredibly weak showing was the second lowest volume day of the year, yet another example of how, despite the best efforts of Wall Street hucksters and Federal Reserve pumping, individual investors and practically anybody who is not a fund manager or professional of some ilk simply does not want to be in this market for equities.
Today's lackluster showing was in spite of Alcoa's strong earnings report after the bell on Tuesday, a pleasant earnings kick-off surprise that was promptly disregarded.
For a day, at least, there was no imminent threat of currency or sovereign collapse coming from across the Atlantic where almost all European bourses registered modest gains.
There was little new with which to move markets, a condition which may change on Thursday, as initial unemployment claims and the March PPI figures are released prior to the opening bell. On Friday, JP Morgan Chase (JPM) and Wells-Fargo (WFC) announce first quarter earnings before the open.
In one of the more absurd wastes of taxpayer money, the nearly-invisible Attorney General, Eric Holder, unsheathed a his DOJ sword with a price- fixing antitrust lawsuit against Apple (AAPL) and five book publishers for colluding to fix prices of e-books sold on the iPad platform. Three of the named publishers have already agreed to a settlement, though several states are pursuing civil actions of their own. The suit seeks monetary damages. Apple had no comment.
Clearly, the Department of Justice is completely inept, pursuing nothing other than sure-win, low-hanging fruit variety lawsuits and the federal government is desperate for dough, though what they'll gain from this silly effort is akin to a teaspoon from a barrel of debt.
Dow 12,805.39, +89.46 (0.70%)
NASDAQ 3,016.46, +25.24 (0.84%)
S&P 500 1,368.71, +10.12 (0.74%)
NYSE Composite 7,905.74, +63.82 (0.81%)
NASDAQ Volume 1,504,835,625
NYSE Volume 3,724,551,250
Combined NYSE & NASDAQ Advance - Decline: 4435-1196
Combined NYSE & NASDAQ New highs - New lows: 58-59
WTI crude oil: 102.70, +1.68
Gold: 1,660.30, -0.40
Silver: 31.52, -0.16
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