"Cars and girls are easy come by in this day and age,
Laughing, joking, drinking, smoking,
Till I've spent my wage."
-- The Yardbirds, Over, Under, Sideways, Down, 1966
The year was 1966. Gasoline was 35¢ a gallon. A new car would set you back around $1500. The Dow was trading in triple digits. The British rock invasion was well underway. Life was good; you could spend your paycheck on booze, cigarettes and loose women and not worry about next week.
How times change. Gas and cars are now 8-12 times more expensive. $1000 invested in the Dow in 1966 would be worth $18,000 today. No wonder we're not all millionaires. While the Dow and stocks in general have outpaced inflation, they barely did so. Which brings us to Friday's close...
Dow 12, 481.01 +19.87; NASDAQ 2,456.18 +4.44; S&P 500 1,436.11 +1.57; NYSE Composite 9,338.40 +24.58
The major indices showed nifty gains for the week, though they're still below the mid-February highs. It's the way this market has been for over a month now, a corrective phase that's yet to play out fully. Friday's volume was the weakest of the week, underscoring the relatively tame gains. Traders are still uncertain of the direction here and skeptical of future gains.
Somewhat depressing for traders - and everyone else for that matter - is the continuing high price of gasoline at the pump, and the recent one-day spike (from $56 to over $60) when the crude oil futures turned over from April to May. Apparently, those controlling the price of oil are afraid that Global Warming will kill us all, and are trying to beat the environment to the punch.
This market continues to bounce around: over, under, sideways, but mostly, down.
Monday, March 26, 2007
Thursday, March 22, 2007
Split Thursday as Oil Pumps Higher
There's just no turning the suckers away from the blue chips of the Dow it seems. While the other major indices were slightly lower, the Dow gained a little, just to keep hopes alive.
The major news came from the oil fields today, where crude for May delivery added 2.08 to end the day at $61.69. It seems that our beloved oil barons can't get enough of our greenbacks. Sooner or later, the price of oil and gasoline will cause a major implosion in the economy, unless, of course, it already has and nobody's admitting it yet.
Dow 12,461.14 +13.62; NASDAQ 2,451.74 -4.18; S & P 500 1,434.54 -0.50; NYSE Composite 9,313.82 -3.91
But whatever happens with the price of oil and the health of the economy still doesn't seem to be worth enough attention to slow down stocks. Naturally, interest rates staying in the same position they've been for nearly a year can spark a 150+ point rally.
Considering the folly of the people pushing stocks ever higher, one can only gawk at the valuations. Regardless of the relative health or malaise of the overall economy (it's OK, but not great), investors seem bent on buying no matter the cost. There's a problem there, in that folly is almost always followed by disaster, and that could just be looming with the spate of corporate earnings about to be announced.
We'll know more in about two weeks when corporations begin rolling out their 1st quarter results. There was a little taste of that today as Motorola warned investors that they would return results below estimates. Boo-hoo. More to come.
The major news came from the oil fields today, where crude for May delivery added 2.08 to end the day at $61.69. It seems that our beloved oil barons can't get enough of our greenbacks. Sooner or later, the price of oil and gasoline will cause a major implosion in the economy, unless, of course, it already has and nobody's admitting it yet.
Dow 12,461.14 +13.62; NASDAQ 2,451.74 -4.18; S & P 500 1,434.54 -0.50; NYSE Composite 9,313.82 -3.91
But whatever happens with the price of oil and the health of the economy still doesn't seem to be worth enough attention to slow down stocks. Naturally, interest rates staying in the same position they've been for nearly a year can spark a 150+ point rally.
Considering the folly of the people pushing stocks ever higher, one can only gawk at the valuations. Regardless of the relative health or malaise of the overall economy (it's OK, but not great), investors seem bent on buying no matter the cost. There's a problem there, in that folly is almost always followed by disaster, and that could just be looming with the spate of corporate earnings about to be announced.
We'll know more in about two weeks when corporations begin rolling out their 1st quarter results. There was a little taste of that today as Motorola warned investors that they would return results below estimates. Boo-hoo. More to come.
Wednesday, March 21, 2007
Fed Does Nothing, Stocks, Oil Skyrocket
The Federal Open Markets Committee, the arm of the Federal Reserve that regulates interest rates, decided to do nothing today, keeping the federal funds rate steady at 5.25%. Upon the release of the non-news announcement, every trader on Wall Street apparently began buying everything they could in the 1 1/2 hours remaining in the session.
The Dow shot up 175 points in the 45 minutes after the Fed non-movement. Never has there been so much ado about nothing. Shakespeare would have been proud!
If this is the reaction that the markets are going to display towards what is essentially a non-event (and they do it time and again), one wonders what some real news might produce.
Dow 12,447.52 +159.42; NASDAQ 2,455.92 +47.71; S&P 500 1,435.04 +24.10; NYSE Composite 9,317.73 +159.46
It was as though somebody (Ben Bernanke) waved a magic wand over Wall Street and all the problems of the past 6 months were magically wiped away. Maybe it's the nation's penchant for selective short term memory loss, but it was just four weeks ago that the Dow lost more than 400 points, and less than 2 weeks ago that the sub-prime mortgage lending blowup began (and hasn't ended). Why, it was less than a week ago that the Producer Price Index (PPI) rose by more than double what the experts had been predicting.
Maybe there are a lot of suckers out there. Maybe the correction is really over after just a 6-8% decline on the major indices. Maybe after 52 months of a steadily rising bull market, a one month respite is all this market can handle.
Maybe I'm wrong, but there certainly seems to be a great deal of really, really, stupid money out there. Stupid isn't even the right word to describe today's trade. Insane, criminally insane, might be closer to the truth.
Advancers trounced declining issues by nearly a 5-1 margin. New highs outpaced new lows 380 to 71. That's a pair of numbers which would normally have me shouting "turnaround" but the drama of today's metoric rise is lost on me. I'll call the end of the correction when it actually ends, not when some monstrosity of market mockery says it's over.
Amid all the late afternoon hoopla over the Fed's indecision, nobody noticed (or cared) that oil was up sharply, as the April contract expired yesterday at $56.60. Today's new May futures contract has oil at $59.61, only a $3/barrel increase in one day. Yes, sir, there certainly is a load of stupid, ignorant, moronic money out there, and most of it is in the form of Mr. and Mrs. Average Joe American's retirement plans.
Good luck with that!
The Dow shot up 175 points in the 45 minutes after the Fed non-movement. Never has there been so much ado about nothing. Shakespeare would have been proud!
If this is the reaction that the markets are going to display towards what is essentially a non-event (and they do it time and again), one wonders what some real news might produce.
Dow 12,447.52 +159.42; NASDAQ 2,455.92 +47.71; S&P 500 1,435.04 +24.10; NYSE Composite 9,317.73 +159.46
It was as though somebody (Ben Bernanke) waved a magic wand over Wall Street and all the problems of the past 6 months were magically wiped away. Maybe it's the nation's penchant for selective short term memory loss, but it was just four weeks ago that the Dow lost more than 400 points, and less than 2 weeks ago that the sub-prime mortgage lending blowup began (and hasn't ended). Why, it was less than a week ago that the Producer Price Index (PPI) rose by more than double what the experts had been predicting.
Maybe there are a lot of suckers out there. Maybe the correction is really over after just a 6-8% decline on the major indices. Maybe after 52 months of a steadily rising bull market, a one month respite is all this market can handle.
Maybe I'm wrong, but there certainly seems to be a great deal of really, really, stupid money out there. Stupid isn't even the right word to describe today's trade. Insane, criminally insane, might be closer to the truth.
Advancers trounced declining issues by nearly a 5-1 margin. New highs outpaced new lows 380 to 71. That's a pair of numbers which would normally have me shouting "turnaround" but the drama of today's metoric rise is lost on me. I'll call the end of the correction when it actually ends, not when some monstrosity of market mockery says it's over.
Amid all the late afternoon hoopla over the Fed's indecision, nobody noticed (or cared) that oil was up sharply, as the April contract expired yesterday at $56.60. Today's new May futures contract has oil at $59.61, only a $3/barrel increase in one day. Yes, sir, there certainly is a load of stupid, ignorant, moronic money out there, and most of it is in the form of Mr. and Mrs. Average Joe American's retirement plans.
Good luck with that!
Tuesday, March 20, 2007
More Gains for Stocks
US indices registered their second straight day of gains in anticipation of the FOMC policy statement Wednesday afternoon. Essentially, the market is celebrating the Fed doing nothing, so the adage, "no news is good news" is applicable to this market.
The Fed governors, as is their wont, will have a teleconference tomorrow and proudly announce that the economy is in good shape, nothing to see here, all's well, and traders will go back to doing what they do best, i.e., buying and selling stocks. It's a little like a Samuel Beckett play over three days, but with a lot less drama. Or, put another way, with nothing better to do, investors buy stocks. Would that it were always so easy.
Tuesday's gains were roughly half of Monday's and they were made on fairly modest volume, indicating that there's no big rush to snap up bargains here, as some of the more bullish analysts would have you believe. There's got to be more than a non-movement by the Fed to really incite buyers. At least that's what the charts and market internals are saying.
Dow 12,288.10 +61.93; NASDAQ 2,408.21 +13.80; S&P 500 1,410.94 +8.88; NYSE Composite 9,158.27 +67.27
All of the data lined up today in the bulls' favor. Advancing issues outflanked decliners by an 11-5 margin, and new highs overwhelmed new lows by an overall 247-82. Regarding that last reading, it's going to stay that way until there's another batch of selling and a retest of the 12,050-12,100 level on the Dow.
The correction that's now reached 5 weeks has run out of horror stories and selling scenarios. While the recent news and economic reports haven't been particularly stellar, neither have they been gloomy. Mostly, there's been a general dearth of news, positive or negative, giving most of the investors entertaining worrisome thoughts of closing positions pause.
With the Fed unlikely to do or say anything market-moving, the pause will likely continue, making this third full week of March one of the slowest of the young year.
Helping stocks regain some of their lost footing is the price of oil, which gained a mere 14 cents today, closing at $56.73, a relatively tame number. Another 3 or 4 dollar fall in crude could actually spark a rally, though nobody is basing any hopes on such an occurrence.
Gold gained 4.70 to $659.00 and silver added 0.14 to $13.37, but the precious metals remain stuck in what has become a ten-month old rut. Gold hit a multi-year high of $741 late last April. Since then, it's dropped below $600 briefly a couple of times, has yet to pierce the $700 mark and still isn't close. That's the problem with hedges such as metals. Sometimes there's nothing much to hedge.
The Fed governors, as is their wont, will have a teleconference tomorrow and proudly announce that the economy is in good shape, nothing to see here, all's well, and traders will go back to doing what they do best, i.e., buying and selling stocks. It's a little like a Samuel Beckett play over three days, but with a lot less drama. Or, put another way, with nothing better to do, investors buy stocks. Would that it were always so easy.
Tuesday's gains were roughly half of Monday's and they were made on fairly modest volume, indicating that there's no big rush to snap up bargains here, as some of the more bullish analysts would have you believe. There's got to be more than a non-movement by the Fed to really incite buyers. At least that's what the charts and market internals are saying.
Dow 12,288.10 +61.93; NASDAQ 2,408.21 +13.80; S&P 500 1,410.94 +8.88; NYSE Composite 9,158.27 +67.27
All of the data lined up today in the bulls' favor. Advancing issues outflanked decliners by an 11-5 margin, and new highs overwhelmed new lows by an overall 247-82. Regarding that last reading, it's going to stay that way until there's another batch of selling and a retest of the 12,050-12,100 level on the Dow.
The correction that's now reached 5 weeks has run out of horror stories and selling scenarios. While the recent news and economic reports haven't been particularly stellar, neither have they been gloomy. Mostly, there's been a general dearth of news, positive or negative, giving most of the investors entertaining worrisome thoughts of closing positions pause.
With the Fed unlikely to do or say anything market-moving, the pause will likely continue, making this third full week of March one of the slowest of the young year.
Helping stocks regain some of their lost footing is the price of oil, which gained a mere 14 cents today, closing at $56.73, a relatively tame number. Another 3 or 4 dollar fall in crude could actually spark a rally, though nobody is basing any hopes on such an occurrence.
Gold gained 4.70 to $659.00 and silver added 0.14 to $13.37, but the precious metals remain stuck in what has become a ten-month old rut. Gold hit a multi-year high of $741 late last April. Since then, it's dropped below $600 briefly a couple of times, has yet to pierce the $700 mark and still isn't close. That's the problem with hedges such as metals. Sometimes there's nothing much to hedge.
Monday, March 19, 2007
Another Big Monday for the Dow
After ending last week with modest losses, the Dow and other major US equity indices raged higher on Monday, with blue chips in the lead. The tenor of the trade was eerily similar to last Monday's in which the Dow headed higher before noon, leveled off and sold off slightly into the close.
The only difference was that there was no late afternoon selling. The Dow remained close to its highs for the day from 11:30 onward.
Dow 12,226.17 +115.76; NASDAQ 2,394.41 +21.75; S&P 500 1,402.06 +15.11; NYSE Composite 9,091.00 +107.99
Volume showed a less-than-enthusiastic buying crowd, though advancing issues swamped declining ones by a 5-2 margin. Last week's trend in the new highs-new lows metric has now completely reversed for the third time in four weeks, with new highs posting a 209-96 advantage on the day.
With the Fed set to issue a statement on interest rate policy on Wednesday, today's buyers seemed confident that last week's alarming PPI numbers were muted by the tame CPI reading and that inflation is still not a problem. That said, there's almost nobody on Wall Street who thinks the Fed will either raise or lower rates this week.
The market may have to search for a catalyst as the only other meaningful data out this week (beyond the scores of the NCCA tournament games) are in the housing sector, a market segment that's already seen more than its fair share of battering over the past month.
So, investors will have to do what every good investor must in times like these: wait for signals. The problem is that there may not be many signs being flashed on the exchanges until quarterly earnings begin rolling out in three weeks. It will be interesting to see what traders occupy themselves with, barring any meaningful news or earth-shaking announcements.
In what's possibly been the best news of all for this shaky market, the price of a barrel of crude oil continued to fall on Monday, closing down another 52 cents to $56.59. Gold and silver, the precious metals usually-referred to as the best defense against inflation, posted negligible gains.
If we continue to follow the recent market pattern, today's gain will become rather meaningless by mid-week. Monday's mirthful mood could turn into more frustration by Friday as the correction continues into week 5.
The only difference was that there was no late afternoon selling. The Dow remained close to its highs for the day from 11:30 onward.
Dow 12,226.17 +115.76; NASDAQ 2,394.41 +21.75; S&P 500 1,402.06 +15.11; NYSE Composite 9,091.00 +107.99
Volume showed a less-than-enthusiastic buying crowd, though advancing issues swamped declining ones by a 5-2 margin. Last week's trend in the new highs-new lows metric has now completely reversed for the third time in four weeks, with new highs posting a 209-96 advantage on the day.
With the Fed set to issue a statement on interest rate policy on Wednesday, today's buyers seemed confident that last week's alarming PPI numbers were muted by the tame CPI reading and that inflation is still not a problem. That said, there's almost nobody on Wall Street who thinks the Fed will either raise or lower rates this week.
The market may have to search for a catalyst as the only other meaningful data out this week (beyond the scores of the NCCA tournament games) are in the housing sector, a market segment that's already seen more than its fair share of battering over the past month.
So, investors will have to do what every good investor must in times like these: wait for signals. The problem is that there may not be many signs being flashed on the exchanges until quarterly earnings begin rolling out in three weeks. It will be interesting to see what traders occupy themselves with, barring any meaningful news or earth-shaking announcements.
In what's possibly been the best news of all for this shaky market, the price of a barrel of crude oil continued to fall on Monday, closing down another 52 cents to $56.59. Gold and silver, the precious metals usually-referred to as the best defense against inflation, posted negligible gains.
If we continue to follow the recent market pattern, today's gain will become rather meaningless by mid-week. Monday's mirthful mood could turn into more frustration by Friday as the correction continues into week 5.
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