As opposed to the risk on, risk off mantra so frequently used on up or down days, Thursday's markets could best be described as risk neutral.
Stocks criss-crossed the flat line in a narrow range, the Dow Jones Industrials never better than 17 points to the good in a range of less than 90 points.
Europe delivered no new information, though US data continued to roll in with some strength. The closely-watched ISM Index popped up to 52.7 in November after a reading of 50.8 in October.
Auto sales were strong in the month just ended, though General Motors (GM) lagged most rivals, showing a 6.9% increase from a year ago. Ford (F) said sales were up 13%, though all numbers reported paled by comparison to Chrysler's 45% increase from last November.
Recent sales and economic data continue to indicate that, despite the drag on the market from financial stocks and European worries, the US economy is rebounding quite strongly. Even though lawmakers in Washington are resembling the infamous "Gang That Couldn't Shoot Straight" with their continual posturing over tax and spending issues, Americans have taken matters into their own hands this holiday season and appear to be spending with gusto.
Whether the current momentum will be maintained is a matter to be worked out in the final three weeks of the holiday season and during January's traditional post-holiday discount period.
After Wednesday's hug upside move, traders seemed to have little interest in much of anything other than Friday's expected non-farm payroll data, due out one hour before the opening bell.
While ADP presaged the number with a solid 207,000 net private payroll increase on Wednesday, initial unemployment claims of 402,000 announced prior to Thursday's open threw a bit of cold water on investor optimism. Estimates range from 80,000 to 200,000 new jobs created in November, though the high end of the range is more an extrapolation from the ADP figures, which are often far afield from the BLS data.
Dow 12,020.03, -25.65 (0.21%)
NASDAQ 2,626.20, +5.86 (0.22%)
S&P 500 1,244.58, -2.38 (0.19%)
NYSE Composite 7,450.43, -34.07 (0.46%)
NASDAQ Volume 1,826,260,375
NYSE Volume 3,853,659,000
Combined NYSE & NASDAQ Advance - Decline: 2139-3481
Combined NYSE & NASDAQ New highs - New lows: 144-76
WTI crude oil: 100.20, -0.16
Gold: 1,739.80, -10.50
Silver: 32.76, -0.05
Thursday, December 1, 2011
Wednesday, November 30, 2011
Santa (Ben Bernanke) Arrives Early in Europe; Gold, Silver Surge
Stocks worldwide were up sharply Wednesday on the news that the Federal Reserve, in conjunction with the Central Banks of Canada, England, Japan, Switzerland and the European Central Bank (ECB) agreed to lower the pricing on the existing temporary U.S. dollar liquidity swap arrangements by 50 basis points.
It was an early Christmas gift that sparked a speculative rally and kept Europe from unraveling, again.
What we've repeatedly heard is that the current calamities of the Euro-zone are nothing like those encountered on American soil in 2008.
The plain fact that banks in Europe are under dire stress and in need of liquidity not only reprises 2008, but adds a crescendo affect that's akin to adding the NY Philharmonic, the Ohio State marching band and the Mormon Tabernacle Choir to the efforts of the Boston Pops.
Stresses on European banks, especially those in France, Belgium and Italy, have been exacerbating on a near-daily basis, with the potential for global contagion even greater than when Lehman Bros. was allowed to flail and fail.
Thus, as some unknown Europe-based bank was about to go under - rumors say $265 million in overnight borrowings from the ECB was the tip-off - the global elitist Central Bankers conspired to lift liquidity by lowering the borrowing rates on US Dollar swap arrangements by 50 basis points (1/2 percent).
Magically, not only was the global Ponzi financial system saved for the day, week or month, but the added benefit of having global equity markets spike 3-4% higher came along as an intended consequence. Yes, the globalists know what they're doing. Too bad for them that it doesn't work long term, as we know so well from recent history, circa September, 2008.
Here's a post, by none other than some character calling himself John Galt, that has both the 2008 and current Federal Reserve press releases. The similarities are striking, but also magnificent was the 2008 aftermath, the worst financial crisis of the last 70 or so years, and the resultant crash of the equity markets.
So, Santa came to town (Europe) dressed as Ben Bernanke, with his trusty elf, Tim Geithner, in tow, passing off presents to the good (and bad) bankers across the continent. While this constitutes Christmas and a Santa Claus Rally about a month prematurely, what can Europe and the global economy expect when the holiday actually arrives on December 25, lumps of coal, or perhaps soaring gold and silver prices?
The actual timing of the eventual collapse is still unknown, though this desperation move seems to indicate that the global financial structure is crumbling faster than the "unseen hands" of the central banks can prop it up. A dive in equities may not coincide with Christmas - that would be a shame - but rather sometime in early 2012, likely in the first quarter and quite possibly in January as profits are taken early in the year on stocks pumped to unwieldy heights in December. The net results being a relatively weaker dollar and higher prices for just about anything one consumes or needs. When the crash comes, of course, the Euro will descend and the dollar will rise, though the effect is probably short-term, until the Easter Bunny fills up those empty bank liquidity baskets again.
As the adage implies, this massive liquidity gift may indeed have a silver lining, encrusted with much-higher-priced gold.
Prior to the Fed's announcement, the People's Bank of China cut bank reserve requirements for the first time in three years, by 0.5%, amid signs that the Chinese economy is slowing due to slack demand for China's exports, particularly from Europe.
After the announcement, with futures up dramatically, ADP released its November Employment Change results, showing the creation of 206,000 private sector jobs during the month. The private survey is a regular precursor to Friday's BLS non-farm payroll data.
Third quarter productivity was measured as up 2.3%, while unit labor costs fell 2.5% as companies hunker down, doing more with fewer employees.
Fifteen minutes into the trading session, Chicago PMI reported a big jump, from 58.4 in October to 62.6 in November. It was an unnecessary boost to a market which had already spiked higher at the open.
There was no fade in this one-day rally, coming conveniently on the last day of the month, traditionally the day reserved for "window dressing" by fund managers. Stocks were up monstrously on the open and continued along a high, flat line for the rest of the session, until a final short-covering episode in the final fifteen minutes pushed indices even higher.
Just speculating, but it had to be one of the best market moves of the year, if not the best. Volume was sufficient, though not overwhelming. The late-day surge may be indicating that even more easy money will flow from the Fed to the hampered Eurozone.
As to whether the moves in stocks are sustainable and the even more important question of whether or not Europe is "fixed," the answers will only be known at some future date. The most cogent commentaries on Europe suggest that today's coordinated central bank motivation only covers over a dire condition in the European banking sector and is nothing more than a liquidity band-aid on a solvency open gash. Europe's funding problems remain unresolved, though any mention of default or collapse has probably been delayed by a few weeks or a month.
And just in case you're worried about food shortages or another recession, the Obama administration and congress actually did accomplish something, recently having lifted the five-year-old ban on slaughtering horses in America. Not to worry, though. Americans won't be eating Little Red Pony or Trigger any time soon (we hope). The meat will likely be shipped to Japan or Europe. However, if this is a trend-setter, cans of Lassie, Rin Tin Tin or Boo Boo Kitty may be in supermarkets soon. Dog food and cat food may take on newer, twisted meanings.
Dow 12,045.68, +490.05 (4.24%)
NASDAQ 2,620.34, +104.83 (4.17%)
S&P 500 1,246.96, +51.77 (4.33%)
NYSE Composite 7,484.49, +334.78 (4.68%)
NASDAQ Volume 2,386,048,000
NYSE Volume 5,808,163,500
Combined NYSE & NASDAQ Advance - Decline: 4913-861
Combined NYSE & NASDAQ New highs - New lows: 161-68 (this has rolled over)
WTI crude oil: 100.36. +0.56
Gold: 1,745.50, +32.10
Silver: 32.73, +0.88
It was an early Christmas gift that sparked a speculative rally and kept Europe from unraveling, again.
What we've repeatedly heard is that the current calamities of the Euro-zone are nothing like those encountered on American soil in 2008.
The plain fact that banks in Europe are under dire stress and in need of liquidity not only reprises 2008, but adds a crescendo affect that's akin to adding the NY Philharmonic, the Ohio State marching band and the Mormon Tabernacle Choir to the efforts of the Boston Pops.
Stresses on European banks, especially those in France, Belgium and Italy, have been exacerbating on a near-daily basis, with the potential for global contagion even greater than when Lehman Bros. was allowed to flail and fail.
Thus, as some unknown Europe-based bank was about to go under - rumors say $265 million in overnight borrowings from the ECB was the tip-off - the global elitist Central Bankers conspired to lift liquidity by lowering the borrowing rates on US Dollar swap arrangements by 50 basis points (1/2 percent).
Magically, not only was the global Ponzi financial system saved for the day, week or month, but the added benefit of having global equity markets spike 3-4% higher came along as an intended consequence. Yes, the globalists know what they're doing. Too bad for them that it doesn't work long term, as we know so well from recent history, circa September, 2008.
Here's a post, by none other than some character calling himself John Galt, that has both the 2008 and current Federal Reserve press releases. The similarities are striking, but also magnificent was the 2008 aftermath, the worst financial crisis of the last 70 or so years, and the resultant crash of the equity markets.
So, Santa came to town (Europe) dressed as Ben Bernanke, with his trusty elf, Tim Geithner, in tow, passing off presents to the good (and bad) bankers across the continent. While this constitutes Christmas and a Santa Claus Rally about a month prematurely, what can Europe and the global economy expect when the holiday actually arrives on December 25, lumps of coal, or perhaps soaring gold and silver prices?
The actual timing of the eventual collapse is still unknown, though this desperation move seems to indicate that the global financial structure is crumbling faster than the "unseen hands" of the central banks can prop it up. A dive in equities may not coincide with Christmas - that would be a shame - but rather sometime in early 2012, likely in the first quarter and quite possibly in January as profits are taken early in the year on stocks pumped to unwieldy heights in December. The net results being a relatively weaker dollar and higher prices for just about anything one consumes or needs. When the crash comes, of course, the Euro will descend and the dollar will rise, though the effect is probably short-term, until the Easter Bunny fills up those empty bank liquidity baskets again.
As the adage implies, this massive liquidity gift may indeed have a silver lining, encrusted with much-higher-priced gold.
Prior to the Fed's announcement, the People's Bank of China cut bank reserve requirements for the first time in three years, by 0.5%, amid signs that the Chinese economy is slowing due to slack demand for China's exports, particularly from Europe.
After the announcement, with futures up dramatically, ADP released its November Employment Change results, showing the creation of 206,000 private sector jobs during the month. The private survey is a regular precursor to Friday's BLS non-farm payroll data.
Third quarter productivity was measured as up 2.3%, while unit labor costs fell 2.5% as companies hunker down, doing more with fewer employees.
Fifteen minutes into the trading session, Chicago PMI reported a big jump, from 58.4 in October to 62.6 in November. It was an unnecessary boost to a market which had already spiked higher at the open.
There was no fade in this one-day rally, coming conveniently on the last day of the month, traditionally the day reserved for "window dressing" by fund managers. Stocks were up monstrously on the open and continued along a high, flat line for the rest of the session, until a final short-covering episode in the final fifteen minutes pushed indices even higher.
Just speculating, but it had to be one of the best market moves of the year, if not the best. Volume was sufficient, though not overwhelming. The late-day surge may be indicating that even more easy money will flow from the Fed to the hampered Eurozone.
As to whether the moves in stocks are sustainable and the even more important question of whether or not Europe is "fixed," the answers will only be known at some future date. The most cogent commentaries on Europe suggest that today's coordinated central bank motivation only covers over a dire condition in the European banking sector and is nothing more than a liquidity band-aid on a solvency open gash. Europe's funding problems remain unresolved, though any mention of default or collapse has probably been delayed by a few weeks or a month.
And just in case you're worried about food shortages or another recession, the Obama administration and congress actually did accomplish something, recently having lifted the five-year-old ban on slaughtering horses in America. Not to worry, though. Americans won't be eating Little Red Pony or Trigger any time soon (we hope). The meat will likely be shipped to Japan or Europe. However, if this is a trend-setter, cans of Lassie, Rin Tin Tin or Boo Boo Kitty may be in supermarkets soon. Dog food and cat food may take on newer, twisted meanings.
Dow 12,045.68, +490.05 (4.24%)
NASDAQ 2,620.34, +104.83 (4.17%)
S&P 500 1,246.96, +51.77 (4.33%)
NYSE Composite 7,484.49, +334.78 (4.68%)
NASDAQ Volume 2,386,048,000
NYSE Volume 5,808,163,500
Combined NYSE & NASDAQ Advance - Decline: 4913-861
Combined NYSE & NASDAQ New highs - New lows: 161-68 (this has rolled over)
WTI crude oil: 100.36. +0.56
Gold: 1,745.50, +32.10
Silver: 32.73, +0.88
Tuesday, November 29, 2011
American Airlines Goes Belly Up; Housing Slides, but Confidence is Up?
AMR, parent company of American Airlines, filed for Chapter 11 bankruptcy protection Tuesday morning in federal bankruptcy court in the Southern district of New York.
While it seems an inappropriate time for an airline to file for bankruptcy, the timing could prove beneficial to the airline, the last of the major carriers to undergo reorganization. The company, while it has over $4 bllion in unrestricted cash, has $9 to $12 billion in debts.
The company announced that flights would not be disrupted and no immediate layoffs were announced. AMR lost $162 million in the third quarter and has posted losses in 14 of the last 16 quarters.
A pre-packaged bankruptcy such as this sure sounds all bright and cheery on the surface, but these things have ripple effects, as some vendors and creditors are surely to get stiffed or be forced to take pennies or dimes on their dollars. American Airlines will survive, but unseen companies will be hurt down the line and many employees will likely lose their jobs. The American recovery lives on, but why didn't the government bail out AMR like they did General Motors? Maybe they've lost interest in business.
The current S&P/Case-Shiller 10-and-20-city indices both fell month-to-month and year-over-year, as housing continues to deteriorate Despite the lowest mortgage rates in decades, potential homeowners are largely shut out of the market by stringent underwriting standards and, more importantly, the lack of jobs needed to finance and support the payments on a home purchase.
Declining by 3.9% in the third quarter, the index showed a bit of relief from the second quarter's 5.8% decline, though there wasn't much hope in the report, which tracked sales through September. Only Detroit and Washington, DC reported gains during the period, of 3.7 and 1 percent, respectively. Home prices have fallen back to 2003 levels nationally.
Wall Street shrugged off the bad housing data and focused instead on the Conference Board's index of consumer confidence which rocketed up to 56 in October, from a revised 40.9 in September. It was the largest monthly gain in confidence since April 2003, though the current reading comes off a two-year low for the gauge.
Meanwhile, over in Euro-land, finance ministers kicked off a two-day summit designed to define a framework for the various entities - countries, the ECB and the ESFS - to deal with the ongoing debt crisis. Some of the ideas being floated around this time involve countries trading a bit of sovereignty for more bailout funding, and leveraging the ESFS roughly 2.5 times, to provide funding for stressed economies, mostly in the Southern part of the continent.
As usual, nothing concrete has - or will - come from these meetings, as European leaders inch closer to a complete currency collapse, which now, along with the breakup of the Euro currency partners, is rated by top economists as a 50/50 chance.
Here in America, the few traders still not completely scared away pushed stocks higher for a second straight day on the Dow and S&P, though the NASDAQ finished in the red. Trading volume was extremely thin. If there is to be a so-called Santa Claus Rally, it's not likely to awaken any sleeping children and will probably be sold off in a session or two, as the choppiness and extreme volatility is not likely to abate before the European crisis either is resolved or blows up completely.
Dow 11,555.63, +32.62 (0.28%)
NASDAQ 2,515.51, -11.83 (0.47%)
S&P 500 1,195.19, -2.64 (0.22%)
NYSE Composite 7,149.71, +29.16 (+0.41%)
NASDAQ Volume 1,621,070,500
NYSE Volume 3,951,292,750
Combined NYSE & NASDAQ Advance - Decline: 2486-3131
Combined NYSE & NASDAQ New highs - New lows: 65-166
WTI crude oil: 99.79, +1.58
Gold: 1,713.40, +2.60
Silver: 31.85, -0.31
While it seems an inappropriate time for an airline to file for bankruptcy, the timing could prove beneficial to the airline, the last of the major carriers to undergo reorganization. The company, while it has over $4 bllion in unrestricted cash, has $9 to $12 billion in debts.
The company announced that flights would not be disrupted and no immediate layoffs were announced. AMR lost $162 million in the third quarter and has posted losses in 14 of the last 16 quarters.
A pre-packaged bankruptcy such as this sure sounds all bright and cheery on the surface, but these things have ripple effects, as some vendors and creditors are surely to get stiffed or be forced to take pennies or dimes on their dollars. American Airlines will survive, but unseen companies will be hurt down the line and many employees will likely lose their jobs. The American recovery lives on, but why didn't the government bail out AMR like they did General Motors? Maybe they've lost interest in business.
The current S&P/Case-Shiller 10-and-20-city indices both fell month-to-month and year-over-year, as housing continues to deteriorate Despite the lowest mortgage rates in decades, potential homeowners are largely shut out of the market by stringent underwriting standards and, more importantly, the lack of jobs needed to finance and support the payments on a home purchase.
Declining by 3.9% in the third quarter, the index showed a bit of relief from the second quarter's 5.8% decline, though there wasn't much hope in the report, which tracked sales through September. Only Detroit and Washington, DC reported gains during the period, of 3.7 and 1 percent, respectively. Home prices have fallen back to 2003 levels nationally.
Wall Street shrugged off the bad housing data and focused instead on the Conference Board's index of consumer confidence which rocketed up to 56 in October, from a revised 40.9 in September. It was the largest monthly gain in confidence since April 2003, though the current reading comes off a two-year low for the gauge.
Meanwhile, over in Euro-land, finance ministers kicked off a two-day summit designed to define a framework for the various entities - countries, the ECB and the ESFS - to deal with the ongoing debt crisis. Some of the ideas being floated around this time involve countries trading a bit of sovereignty for more bailout funding, and leveraging the ESFS roughly 2.5 times, to provide funding for stressed economies, mostly in the Southern part of the continent.
As usual, nothing concrete has - or will - come from these meetings, as European leaders inch closer to a complete currency collapse, which now, along with the breakup of the Euro currency partners, is rated by top economists as a 50/50 chance.
Here in America, the few traders still not completely scared away pushed stocks higher for a second straight day on the Dow and S&P, though the NASDAQ finished in the red. Trading volume was extremely thin. If there is to be a so-called Santa Claus Rally, it's not likely to awaken any sleeping children and will probably be sold off in a session or two, as the choppiness and extreme volatility is not likely to abate before the European crisis either is resolved or blows up completely.
Dow 11,555.63, +32.62 (0.28%)
NASDAQ 2,515.51, -11.83 (0.47%)
S&P 500 1,195.19, -2.64 (0.22%)
NYSE Composite 7,149.71, +29.16 (+0.41%)
NASDAQ Volume 1,621,070,500
NYSE Volume 3,951,292,750
Combined NYSE & NASDAQ Advance - Decline: 2486-3131
Combined NYSE & NASDAQ New highs - New lows: 65-166
WTI crude oil: 99.79, +1.58
Gold: 1,713.40, +2.60
Silver: 31.85, -0.31
Monday, November 28, 2011
CYBER MONDAY DEALS
Contribution by Saul Martin
This morning I checked my e-mail using my CLEAR Denver Federal Center connection. I have been getting e-mails all week about Cyber Monday deals and Black FridayDeals. Some of the deals seem too good to be true, but not that good that I am going to get out in the thirty degree weather and sit outside of Best Buy, only to try and push other people down to get the one hundred and ninety-nine dollar forty-two inch flat screen television. I have gotten e-mails about deals that are good enough on Cyber Monday that I will wake up at five o’clock in the morning, sit on the couch, drink my coffee, and do my Christmas shopping. Amazon.com has a great deal, that if you spend fifty dollars that you get a choice a free gift. The best gift that they have to offer is a pair of pearl earrings! They are a gift in itself! Also, I am going to go to Toys-R-Us’ website. I was planning on buying my niece an Apple iTouch for Christmas. With the iTouch, they give you a fifty dollar gift card. I just can’t forget to set my alarm!
Following Friday's Flop, a Monday Pop; The Crisis Hasn't Ended
After Black Friday's classic pop and flop (the Dow was up 123 points, only to close down 26, and that was all in a half-session which lasted just 3 1/2 hours), stocks stormed back on rumors of a European fix-up engineered by the IMF and maybe the influence of the German economy, or maybe the Fed, or maybe... well, you get the point, it's all rumors and shadows, now that the extent of Europe's problems have been put to the light of day.
Estimates range to as high as $30 trillion dollars to fix what ails Europe, which is, after all, the same problems facing the United States, though in a longer timeline: un-payable debt brought on by years of overspending by governments, underfunded pension plans (think Social Security), flatlining government revenue and economies that cannot grow without artificial stimulus.
On Wall Street, the focus was on all the crazed morons shopping on Black Friday, which has been touted as one of the most successful single retail days ever. While that may be so, underlying the massive volumes of shoppers and sales the day after Thanksgiving are slim margins and now a three-week lull until the final week before Christmas, in which, traditionally, 40% of all holiday shopping takes place.
But Wall Street - and indeed, markets worldwide - celebrated Black Friday's success as if Gerald Ford had single-handedly beat inflation with his WIN (Whip Inflation Now) buttons. The truth - something seldom seen in the mainstream media these days - about Black Friday and how it translates into higher profits for the more than 5000 companies listed on the US stock markets is simply that it doesn't matter.
Warm weather across most of the country may have sent shoppers out in droves, but bottom lines are what's supposed to matter on Wall Street, and the results of the Christmas shopping season won't fully be known for another month-and-a-half.
As the markets have demonstrated quite convincingly over the past four months running, today's gains are tomorrow's profits taken or, for the long term holders (overnight, as opposed to outright day-trading), losses sustained. So, hold off on making any bold projections about Santa Claus rallies or long-term growth prospects until the remainder of the week and the month play out.
Not to pooh-pooh a solid ramp job on abysmally-low volume, but the charts are telling us that the circus of a crisis in Europe is simply the back end of what happened in America from 2007-2009. A good portion of the toxic debt bundled into MBS was sold into Europe, exacerbating an already bad situation. Unless the IMF, the Fed and the leaders of Europe really can fart flying unicorns on demand, the fix to the global economy is not going to happen this year, and probably not next.
The "recovery" which was supposed to have begun in 2009 is now more than 2 1/2 years old and unemployment is still "officially" over nine percent, though real economists put actual joblessness somewhere between 16 and 23%. The income gaps between rich and poor, elderly and young and across the spectrum of races and colors continue to expand. Congress continues to diddle over politics while only eight percent of the country believes they are doing a good job, proving that yes, you can fool some of the people some of the time.
National governments are imploding at an accelerating rate as financial instability threatens to topple the ruling elite. The crisis, begun in 2007 with the pop of the sub-prime bubble, is still in mid-flight (or descent, as the case may be). Europe's problems, while they may not be ours in America, sure have a familiar look to them and it may take some time, but they'll land here in America in due time, hopefully right about the time we're convinced Newt Gingrich (sounds a lot like Grinch, and that's not without irony) has the chops to save the nation.
Just for perspective, the Dow Jones Industrials peaked at 14,154 in November of 2007. Today they stand at 11,523, and, if a 20% decline defines a bear market, the current 18.6% drop from the peak had us right there in bear country over the past four months with a market - manipulated as it may be - that struggles with every gain, only to give it right back in a day or a week or so.
Confidence may be a fleeting emotion, but one necessary to keep a dynamic economy growing and strengthening. We don't have any, and there's little reason to believe there will be much coming around soon.
Dow 11,523.01, +291.23 (2.59%)
NASDAQ 2,527.34, +85.83 (3.52%)
S&P 500 1,192.55, +33.88 (2.92%)
NYSE Composite 7,120.55 +222.37 (3.22%)
NASDAQ Volume 1,623,548,125
NYSE Volume 3,839,968,500
Combined NYSE & NASDAQ Advance - Decline: 4783-968
Combined NYSE & NASDAQ New highs - New lows: 97-156
WTI crude oil: 98.21, +1.44
Gold: 1,710.80, +25.10
Silver: 32.16, 1.15
Estimates range to as high as $30 trillion dollars to fix what ails Europe, which is, after all, the same problems facing the United States, though in a longer timeline: un-payable debt brought on by years of overspending by governments, underfunded pension plans (think Social Security), flatlining government revenue and economies that cannot grow without artificial stimulus.
On Wall Street, the focus was on all the crazed morons shopping on Black Friday, which has been touted as one of the most successful single retail days ever. While that may be so, underlying the massive volumes of shoppers and sales the day after Thanksgiving are slim margins and now a three-week lull until the final week before Christmas, in which, traditionally, 40% of all holiday shopping takes place.
But Wall Street - and indeed, markets worldwide - celebrated Black Friday's success as if Gerald Ford had single-handedly beat inflation with his WIN (Whip Inflation Now) buttons. The truth - something seldom seen in the mainstream media these days - about Black Friday and how it translates into higher profits for the more than 5000 companies listed on the US stock markets is simply that it doesn't matter.
Warm weather across most of the country may have sent shoppers out in droves, but bottom lines are what's supposed to matter on Wall Street, and the results of the Christmas shopping season won't fully be known for another month-and-a-half.
As the markets have demonstrated quite convincingly over the past four months running, today's gains are tomorrow's profits taken or, for the long term holders (overnight, as opposed to outright day-trading), losses sustained. So, hold off on making any bold projections about Santa Claus rallies or long-term growth prospects until the remainder of the week and the month play out.
Not to pooh-pooh a solid ramp job on abysmally-low volume, but the charts are telling us that the circus of a crisis in Europe is simply the back end of what happened in America from 2007-2009. A good portion of the toxic debt bundled into MBS was sold into Europe, exacerbating an already bad situation. Unless the IMF, the Fed and the leaders of Europe really can fart flying unicorns on demand, the fix to the global economy is not going to happen this year, and probably not next.
The "recovery" which was supposed to have begun in 2009 is now more than 2 1/2 years old and unemployment is still "officially" over nine percent, though real economists put actual joblessness somewhere between 16 and 23%. The income gaps between rich and poor, elderly and young and across the spectrum of races and colors continue to expand. Congress continues to diddle over politics while only eight percent of the country believes they are doing a good job, proving that yes, you can fool some of the people some of the time.
National governments are imploding at an accelerating rate as financial instability threatens to topple the ruling elite. The crisis, begun in 2007 with the pop of the sub-prime bubble, is still in mid-flight (or descent, as the case may be). Europe's problems, while they may not be ours in America, sure have a familiar look to them and it may take some time, but they'll land here in America in due time, hopefully right about the time we're convinced Newt Gingrich (sounds a lot like Grinch, and that's not without irony) has the chops to save the nation.
Just for perspective, the Dow Jones Industrials peaked at 14,154 in November of 2007. Today they stand at 11,523, and, if a 20% decline defines a bear market, the current 18.6% drop from the peak had us right there in bear country over the past four months with a market - manipulated as it may be - that struggles with every gain, only to give it right back in a day or a week or so.
Confidence may be a fleeting emotion, but one necessary to keep a dynamic economy growing and strengthening. We don't have any, and there's little reason to believe there will be much coming around soon.
Dow 11,523.01, +291.23 (2.59%)
NASDAQ 2,527.34, +85.83 (3.52%)
S&P 500 1,192.55, +33.88 (2.92%)
NYSE Composite 7,120.55 +222.37 (3.22%)
NASDAQ Volume 1,623,548,125
NYSE Volume 3,839,968,500
Combined NYSE & NASDAQ Advance - Decline: 4783-968
Combined NYSE & NASDAQ New highs - New lows: 97-156
WTI crude oil: 98.21, +1.44
Gold: 1,710.80, +25.10
Silver: 32.16, 1.15
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