Calm Before the Storm; Markets Flat One Day Prior to Elections

Election Day is tomorrow, and markets mimicked the mood of the country, delivering a nothing session in the wake of the monumental event on the horizon.

Stocks were down hard in the morning, but buyers stepped in to stabilize the situation, eventually boosting stocks in the final half hour to close near the highs of the day.

That's about it, since there were scant earnings announcements of little importance, and everybody laying down - or not - bets on tomorrow's election outcome. All the major indices close positive, though only slightly, and trading volume was sub-standard.

Dow 13,112.44, +19.28 (0.15%)
NASDAQ 2,999.66, +17.53 (0.59%)
S&P 500 1,417.26, +3.06 (0.22%)
NYSE Composite 8,240.26, +5.34 (0.06%)
NASDAQ Volume 1,464,733,000
NYSE Volume 2,898,888,000
Combined NYSE & NASDAQ Advance - Decline: 3016-2454
Combined NYSE & NASDAQ New highs - New lows: 102-79
WTI crude oil: 85.65, +0.79
Gold: 1,683.20, +8.00
Silver: 31.13, +0.271

Wall Street Taketh Away: Jobs, Sandy Aftermath Not Pretty

Remember the big ramp-up in stocks yesterday, based upon the new, revised-metholdology ADP October jobs data?

Gone.

That is despite a big beat in the non-farm payroll data released prior to Friday's open. The BLS said that the US created 171,000 net new jobs in the month of October, and, initially, the stock jocks loved it, pushing futures higher and sending the Dow Jones Industrials up 57 points at the open.

Trouble was, however, that the positive jobs data had already been priced in, off of the ADP beat. So, sorry, Charlie, no profit for you if you're a dollar short and a day late, as is the case. By 10:00 am, the Dow was flat. It and the other indices crawled lower through out the day, with the losses accelerating in the final two hours of the session.

There were other factors to stocks - and commodities - giving back everything on the final day of trading for the week. Corporate reporting for the third quarter has been seminally sour. Today's miss was by Chevron (CVX), a Dow component, which saw third-quarter net income fall to $5.25 billion, or $2.69 per share, from $7.83 billion, or $3.92 per share, a year earlier.

Chevron earned $2.55 per share, compared with the analysts' average estimate of $2.83. Oops! Poor babies, their efforts to skin every last dollar from the pockets of US consumers weren't quite as good as last year. The price of oil is down and headed even lower today.

Somebody send a memo to the CEOs of the energy companies and other Fortune 500 CEOs: there's a global slowdown going on, mostly because you guys have overpriced everything from baby formula to burials, and people simply can't foot the bill any more.

Other than sliding corporate earnings (note: Most major corporations are still massively profitable, just not as profitable as last year, or, in some cases, last quarter, but some, like Sharp and Panasonic are close to bankruptcy, with more to follow), there's a litany of issues facing the global economy, like the fiscal cliff and mountains of debt and unfunded liabilities worldwide (no small matter), the continuing crisis in Europe (still unresolved and getting worse), the uncertainty of the presidential election in the US (hint: Obama's going to win easily, which is another reason Wall Street is unhappy), and this little inconvenient storm called Hurricane Sandy, which still has most of the New Jersey shoreline, Long Island, Staten Island and lower Manhattan still without power and people suffering in cold weather, without fuel, food, and gas lines extending for miles in Jersey and New York, not because there's no gas, but no electricity to power the pumps and stations, many of which remain closed.

Yep, things are not good overall, and, from the looks of things, they're not getting any better. The damages from Sandy will easily exceed those of Katrina. It doesnt take a genius to figure out that a massive storm which wreaked havoc on the most densely-populated area of the country is going to cost more than the laughable estimates of $20 billion that have been bandied about by so-called experts. Try $60 billion or more, maybe in excess of $100 billion, and that number is going to pt a serious dent in fourth quarter GDP.

The current wisdom being foisted upon the supposedly-knowledgeable investing community - that all the destruction from Hurricane Sandy will eventually be a net positive for the economy a la Frederic Bastiat's "broken window" parable - is complete media hogwash put forward by economist goon-whores like Moody's Mark Zandi, Mesirow's Diane Swonk and Deutsche Bank's Joe LaVorgna (yes, the Germans always like to have Italians do their dirty work), and are completely off base.

While NYC Mayor Bloomberg has been catching considerable flak - most of it well-deserved - for pushing ahead with the New York City Marathon this weekend, the long tail of Hurricane Sandy is likely to help push the US economy into recession in the fourth quarter of 2012 and beyond. Unlike Katrina, which concentrated its wrath upon New Orleans and the Southern shores, Sandy hit the highest income folks in the country, and that's not something that's going to be erased from the memory or the bottom line very easily. Just to make sure everybody's on the same page here, expect every fourth quarter profit miss to mention - at least in part - the effects of the hurricane on profits, whether real or imagined. Hurricanes and weather overall make for great scapegoats.

So, this week on Wall Street was more or less a wash. Two days closed, a flat day Wednesday, up Thursday and down Friday. The sharpie day-traders made a huge buck to be sure, but America and the global economy suffered terribly, NY marathon or not.

And, not to forget, Apple's iPad Mini was released for sale globally today. Lines were much shorter than for other Apple product launches, which goes to figure: you introduce a mini-tablet, you get mini-lines.

And, just to rub some salt into already open wounds, another storm is setting up to hit the Northeast next week.

Just what we all need.

Dow 13,093.16, -139.46 (1.05%)
NASDAQ 2,982.13, -37.93 (1.26%)
S&P 500 1,414.20, -13.39 (0.94%)
NYSE Composite 8,234.91, -76.45 (0.92%)
NASDAQ Volume 1,820,933,250
NYSE Volume 3,576,460,250
Combined NYSE & NASDAQ Advance - Decline: 1575-3880
Combined NYSE & NASDAQ New highs - New lows: 211-87
WTI crude oil: 84.86, -2.23
Gold: 1,675.20, -40.30
Silver: 30.86, -1.391

ADP Jobs Data Sends Stocks Soaring; Hurricane Sandy Forgotten by Wall Street

Apparently, if we use Wall Street as a proxy for the general economy (which has proven over and over again to NOT be the case), the damages from Hurricane Sandy will not cost corporations anything. In fact, today's gains all but forgot that most of the Eastern coastline of the United States - from Maryland and Delaware to Connecticut - are federal disaster areas.

All that mattered to Wall Street was getting stocks higher, putting on a good face, especially after the "new methodology" of the ADP private payroll survey - with an assist from Moody's (now there's a clean bunch) - is acceptable in advance of Friday's October non-farm payroll data.

The ADP report was hardly believable, showing that there were 158,000 new private sector jobs created in the month of October. This makes the estimates for NFP of 250,000 tomorrow a slam dunk and possibly already priced in.

Off the ADP news, which was released at 8:15 am EDT, stocks shot up at the open, ramped to highs between 10:00 and 11:00 am and held their gains well into the close.

Everything's great! Except that real unemployment is somewhere around 15%, the US borrows 40% of every dollar it spends and fraud and manipulation by banks and corporations continues to go unchecked. Not to worry, we're going to elect Mitt Romney, who will fix it all, because the fix is in, at least according to Wall Street and Fox news.

There's another scandal brewing, however, that will overshadow everything up to this point in the now-four-year-old financial crisis, involving gold, specifically, the gold stored in vaults in New York and London for other nations. Germany has been trying to get a peek at their gold, but has been continually rebuffed.

Jim Willie's latest salvo at the banking elite has a very good take on the matters at hand.

Here's what one of the commenters had to say about gold and bankers:

“Tiny Ghana demanded its gold return from London, but suddenly its leader (John Atta Mills) showed up dead.”

We’re supposed to be surprised by this? Consider that president Andrew Jackson messed with the banksters and had 5 unsuccessful attempts on his life. President Lincoln messed with the banksters via printing debt-free greenbacks and ended up dead. President James Garfield supported a bi-metallic money standard and ended up dead. President William McKinley was assassinated after publicly supporting sound money and a gold standard. President Kennedy authorized the US Treasury to print silver certificates, interfering with the Fed’s position of sole US money creator and ended up dead. Am I missing anyone who messed with the banksters honey pot and was killed? Probably. Murdering your opponents IS the routine behavior of a thugocracy.

Kind of says it all, doesn't it?

Dow 13,232.62, +136.16 (1.04%)
NASDAQ 3,020.06, +42.83 (1.44%)
S&P 500 1,427.59, +15.43 (1.09%)
NYSE Composite 8,311.36, +89.97 (1.09%)
NASDAQ Volume 1,884,510,500
NYSE Volume 3,925,129,250
Combined NYSE & NASDAQ Advance - Decline: 3949-1550
Combined NYSE & NASDAQ New highs - New lows: 291-77
WTI crude oil: 87.09, +0.85
Gold: 1,715.50, -3.60
Silver: 32.25, -0.068

Wall Street Reacts to the Devastation of Hurricane Sandy with Flat Session

It's morally repugnant that Wall Street would profit from the human suffering of others, though, in reality, it happens all the time. Stocks go up and down on the fortunes and foibles of people, many integral parts of larger corporations.

Thus, it was a time of joyous celebration for the professionals trading at the New York Stock Exchange that, for the first time in two days, equity markets were actually up and functioning. But, that euphoria, which resulted in a wholly predictable, end-of-month window dressing rally at the open, soon turned an eye toward the reality of the devastation and destruction left behind by hurricane Sandy.

Most of lower Manhattan is still without power, the NYSE operating off backup generators, and most of the areas contiguous to Wall Street for many miles to the North, South, East and West, are just beginning to evaluate the extent of the losses.

Most of the New Jersey coast is either underwater, under piles of sand or otherwise devastated; Long Island is a crushed, mangled mess as is Connecticut and most of the other New York boroughs.

Many in the area are still without power, which is slowly returning to some areas, but the losses sustained by people and companies is only now beginning to be felt. Restoration and reconstruction will take months and billions of dollars, the hit to the economy unmistakable, as Wall Street fully understands and began coming to grips with as stocks began to slide shortly after the initial burst leveled off at about 80 points to the good on the Dow.

The rapid turnaround was classic Wall Street hustle, as fund managers snapped up shares at the open to close their books for the month - some for the year - while the sharpies were already shorting the very same shares. There's profit to be made on the downside, and the environment is target rich and ripe for plucking by short-sellers, call sellers and put buyers.

By 10:30 all of the major indices were trading in negative territory, led by the NASDAQ, which itself was brought down by particularly vicious selling in Apple (AAPL), in the aftermath of the firing of two top executives by CEO Tim Cook. It's becoming apparent to everyone that the loss of Steve Jobs was not only a human tragedy, but nobody is there to replace his unique genius and business acumen.

In Europe, which remained open for business as usual over the past two days of Wall Street's shutdown, stocks were mostly down on Monday, up on Tuesday and rallying early Wednesday until finally giving up the ghost late in the sessions, the major indices - England's FTSE, Germany's DAX and France's CAC - all closing lower.

Just about 12:30 pm EDT, a reminder of just how tenuous the entire situation around New York was came from Knight Capital, when the firm, operating under backup power in Jersey City, was forced to shut down for the day, citing that their generators were failing.

Volumes were moderate, considering that many traders were without proper equipment, cell phone service spotty and some traders actually functioning from alternate locations, at home or at satellite offices, though, by the close, the volume ramped up, and the day was one of the better recent volume sessions.

Midday, stocks balanced just above the lows of the session, but buying was timid. As has been the usual mode of operation around Wall Street, traders generally ignored the world around them, sending the S&P and Dow back into positive territory in the final hour, as if nothing at all had occurred, but the move proved unsustainable.

As it has for the past four sessions running, the major indices finished mostly flat, which is patently absurd, as there are corporations taking serious losses from the storm. Reality may set in as time carries onward, but there's no telling how the detached traders in lower Manhattan will treat what will eventually turn out to be one of the costliest natural disasters of all time.

Perhaps the psychology of the control crowd is to not panic, despite evidence to the contrary as pertains to investments, but there is a price to be paid, though, as usual, the analysts will simply lower their expectations for all, and when those are exceeded, will celebrate the great success of what are more and more becoming hollowed-out shells of companies.

There will be days if not weeks of lost productivity, wages and competitiveness across six states: Delaware, Maryland, Pennsylvania, New York, New Jersey and Connecticut. Smaller pockets of destruction have hit West Virginia (blizzard) and some New England states, such as Rhode Island, New Hampshire, Vermont, maine and Massachusetts.

Getting markets up and running is a fine accomplishment, but registering a slight decline is almost laughable, if the thought of it weren't so warped and disturbing.

Dow 13,096.46, -10.75 (0.08%)
NASDAQ 2,977.23, -10.72 (0.36%)
S&P 500 1,412.16, +0.22(0.02%)
NYSE Composite 8,221.40, +31.20(0.38%)
NASDAQ Volume 1,806,794,500
NYSE Volume 3,542,963,500
Combined NYSE & NASDAQ Advance - Decline: 3106-2429
Combined NYSE & NASDAQ New highs - New lows: 198-124
WTI crude oil: 86.24, +0.56
Gold: 1,719.10, +7.00
Silver: 32.32, +0.50

Hurricane Sandy Shuts Down Equity Markets

It took the forces of nature to do what the SEC, government or any other "higher" power couldn't: shut down Wall Street.

Hurricane Sandy, a category 1 hurricane due to make landfall around Atlantic City New Jersey around 6:00 pm EDT, caused the NYSE and NASDAQ to shut down on Monday without even opening. Futures closed at 9:15 am EDT, with the major indices showing moderate, though not devastating, losses.

In New York, Mayor Bloomberg ordered the closure of all subway systems, and evacuated roughly 375,000 residents from lower Manhattan.

Though the storm did not reach landfall until markets would have already closed, high winds and storm surge were expected to cause damage in lower Manhattan, while most of the Eastern seaboard was inundated throughout the day with high surf and damaging winds.

Later in the day, the exchanges decided to remain closed on Tuesday. It is the first time since 1888 that stock markets were closed due to weather for more than one day in succession.

Also in question are various corporate earnings reports. Many which were due out on Monday have been rescheduled for release and there is a rumor circulating that Friday's non-farm payroll report for October would also be delayed. It is the final jobs report before the election next Tuesday.

Other exchanges, for bonds, Forex and commodities were open or closed or offered limited sessions and some plan to open on Tuesday while others will not. The situation is rather - pardon the pun - fluid.

WTI crude oil: 85.54, -0.74
Gold: 1,708.70, -3.20
Silver: 31.74, -0.291