Even though the Dow Jones Industrials finished with a gain, the other major indices suffered marginal losses to begin the last week of August and the unofficial end of summer. Compared to the drop last Monday, today's action was little more than profit-taking posturing and a pause prior to Tuesday's reading of durable goods orders.
There is still a good deal of trepidation in traders' hearts, and following such an impressive run last week, a break was surely in order. Along with the durable goods report for July, there's the Conference Board's consumer confidence index and the S&P/Case-Shiller Home Price Index with which to deal on Tuesday morning. That home price index has been a rally-killer in the past, though last month's data suggested that the housing market was beginning to turn around as the 10-City and 20-City Composites improved for the fourth consecutive month.
Investors, keenly aware that jobs and home-buying are two of the biggest factors in recession and recovery, will be keeping a close eye on that index as well.
Otherwise, Monday was moribund and listless, with traders going through the motions instead of staking out new positions. After a brief upsurge in the morning, stocks lost ground, tracing out the break-even line into the close. Some may have said it was hardly worth getting out of bed, though from the volume slant, most stock jockeys were at their desks bright and early.
Dow 9,509.28, +3.32 (0.03%)
NASDAQ 2,017.98, -2.92 (0.14%)
S&P 500 1,025.56, -0.57 (0.06%)
NYSE Composite 6,671.14, -5.12 (0.08%)
Declining issues held a narrow lead over advancing ones, 3276-3187, but new highs held a large edge over new lows, 227-88. Volume was solid, but uninspiring.
NYSE Volume 1,389,159,000
NASDAQ Volume 2,072,289,000
Oil continued to price higher in futures markets, up another 48 cents per barrel, to $74.37 on the NY Merc. Meanwhile, gold was taking another beating, losing $11, to close at $943.70. Silver responded positively, however slightly, up 3 cents, to $14.23 per ounce. Natural gas, trading at 7-year lows, caught a bit of a bid, though a gain to just $2.92 is still well below levels seen in recent years. The disparity between crude oil and natural gas prices is beginning to cause a stir, especially in US markets. Gas discovery and extraction has been aided by technology recently and the word is that the US is probably sitting on at least a 20 year supply - some estimates are as high as 100 years - of natural gas, causing the price to plummet.
If there is such an abundance of natural gas and crude prices remain high, it won't be long before those natural gas conversion kits for cars become all the rage. Of course, there still aren't many places where one could fill up on nat. gas., but with prices so low, don't be surprised if a number of new businesses aren't started up based on the assumption that oil will stay high and natural gas low. Maybe we should have listened to T. Boone Pickens last summer when he was saying that natural gas was the bridge between oil and renewable energy.
On the stock market, naturally, there was the usual chorus of caution from the punditry, with more than a few analysts saying the rally had run its course and it was time to take profits, take a break and get back in at lower levels in the fall. However, the camps between the naysayers and optimists were about evenly split, for varying reasons. Below, one of the more positive calls:
Monday, August 24, 2009
Friday, August 21, 2009
Existing Home Sales Gain Pushes Stocks Higher
Rising for the 4th day in a row, major US stock indices broke through resistance and above previous highs of a week ago, thanks to cheery news from the National Association of Realtors (NAR), who released their July existing homes sales data, showing the largest one month gain in the history of the series, dating back to 1999.
The 7.2% gain over June's figures was the 4th straight monthly gain for the measure. The NAR reported that distressed sales made up 31% of all sales and first time buyers were responsible for 30%. The 5.24 million units in July were well ahead of the 4.89 million in June, and are 5%t above the 4.99 million-unit pace in July 2008.
This is capitalism at work. The oversupply of homes on the market has lowered prices to a median of 178,000, though many of the distressed, foreclosed properties are going for well below that number. There are speculators, new buyers and even people upgrading within the context of historically-low interest rates and oversupply on the market forcing prices down.
Today's data was another in a lengthening string of positive economic reports and investors took action right upon the news. At 10:00 am, when the report was released, all of the major indices shot straight up, to near the closing levels. The Dow, which was already up 50 points at the open, immediately tacked on another 100, taking the average above 9500 for the first time since November 4, 2008, when the index closed at 9625.28.
The NASDAQ and S&P blew through their respective highs as well, with confidence in the US economy continuing to grow.
Dow 9,505.96, +155.91 (1.67%)
NASDAQ 2,020.90, +31.68 (1.59%)
S&P 500 1,026.13, +18.76 (1.86%)
NYSE Composite 6,676.26, +122.86 (1.87%)
Market internals confirmed that the rally was broad and deep, as 5027 stocks showed gains, to just 1467 on the losing side. There were 208 new highs to 93 new lows. Volume was solid, the best in weeks, indicating that this rally still has legs. Some analysts are calling for 1050 on the S&P and 10,000 on the Dow by the end of the year, and, while those estimates may seem trivial, there is a growing chorus of capitalist cheer-leading from corners as diverse as rural farming interests to chic fashion retailers. Even if there is another pullback, which will occur when everyone least expects it, as is the usual case, there's sufficient evidence to posit that even though various government entities (cities, states and federal) are running enormous deficits, it is that deficit spending money that kept people working and money flowing through the economy.
There will certainly come a time in which these debts must be dealt with, but nobody seems interested in dealing with those thorny issues at present. That day will come all too soon for investors and speculators, the wisest and craftiest of which have remade fortunes or made new ones during this six-month-long rally.
It was the seventh week out of the past eight that markets finished a week higher than the previous one, and gains have been substantial.
NYSE Volume 6,724,499,500
NASDAQ Volume 2,279,040,750
Oil was up again, but again only marginally, as on Thursday, gaining 12 cents, to $72.54. The metals were among the winners of the asset classes, with gold higher by $13.00, to close at $954.70. Silver had a nice reversal as well, picking up 28 cents, to $14.16 per ounce.
The day, and the week, were among the best seen for US business interests in more then 10 months. While the US may not be fully out of recession - though there are obvious signs that it is - the pathway of recovery is becoming more and more well-defined by the day.
The 7.2% gain over June's figures was the 4th straight monthly gain for the measure. The NAR reported that distressed sales made up 31% of all sales and first time buyers were responsible for 30%. The 5.24 million units in July were well ahead of the 4.89 million in June, and are 5%t above the 4.99 million-unit pace in July 2008.
This is capitalism at work. The oversupply of homes on the market has lowered prices to a median of 178,000, though many of the distressed, foreclosed properties are going for well below that number. There are speculators, new buyers and even people upgrading within the context of historically-low interest rates and oversupply on the market forcing prices down.
Today's data was another in a lengthening string of positive economic reports and investors took action right upon the news. At 10:00 am, when the report was released, all of the major indices shot straight up, to near the closing levels. The Dow, which was already up 50 points at the open, immediately tacked on another 100, taking the average above 9500 for the first time since November 4, 2008, when the index closed at 9625.28.
The NASDAQ and S&P blew through their respective highs as well, with confidence in the US economy continuing to grow.
Dow 9,505.96, +155.91 (1.67%)
NASDAQ 2,020.90, +31.68 (1.59%)
S&P 500 1,026.13, +18.76 (1.86%)
NYSE Composite 6,676.26, +122.86 (1.87%)
Market internals confirmed that the rally was broad and deep, as 5027 stocks showed gains, to just 1467 on the losing side. There were 208 new highs to 93 new lows. Volume was solid, the best in weeks, indicating that this rally still has legs. Some analysts are calling for 1050 on the S&P and 10,000 on the Dow by the end of the year, and, while those estimates may seem trivial, there is a growing chorus of capitalist cheer-leading from corners as diverse as rural farming interests to chic fashion retailers. Even if there is another pullback, which will occur when everyone least expects it, as is the usual case, there's sufficient evidence to posit that even though various government entities (cities, states and federal) are running enormous deficits, it is that deficit spending money that kept people working and money flowing through the economy.
There will certainly come a time in which these debts must be dealt with, but nobody seems interested in dealing with those thorny issues at present. That day will come all too soon for investors and speculators, the wisest and craftiest of which have remade fortunes or made new ones during this six-month-long rally.
It was the seventh week out of the past eight that markets finished a week higher than the previous one, and gains have been substantial.
NYSE Volume 6,724,499,500
NASDAQ Volume 2,279,040,750
Oil was up again, but again only marginally, as on Thursday, gaining 12 cents, to $72.54. The metals were among the winners of the asset classes, with gold higher by $13.00, to close at $954.70. Silver had a nice reversal as well, picking up 28 cents, to $14.16 per ounce.
The day, and the week, were among the best seen for US business interests in more then 10 months. While the US may not be fully out of recession - though there are obvious signs that it is - the pathway of recovery is becoming more and more well-defined by the day.
Thursday, August 20, 2009
Three Time's A Charm for US Stock Markets
Stocks rose for the third consecutive day, nearly erasing the declines from the previous Friday and this Monday, as investors shrugged off persistently high unemployment numbers and focused instead on economic data that showed a slow but steady pattern of recovery for US businesses.
The markets were somewhat blind-sided by new unemployment claims prior to the opening. At 576,000 for the most recent week, new claims were higher than expected and worse than the 561,000 reported the week earlier. That did not spoil the mood on Wall St., however, as stocks raced to early gains and added to them as a report on leading economic indicators registered a fourth straight monthly increase of 0.7% for July. As that report was passing the wires, the Philadelphia Fed Index came in above expectations, with an increase to 4.2, up sharply from -7.5 in July and well ahead of mostly dour expectations.
Without earnings driving the market currently, it has been a steady stream of economic data that has buoyed markets of late. Though the news hasn't been earth-shattering or jaw-dropping, it's about as good as it can get, considering the dire circumstances which investors faced in months prior.
Options expiration, which occurs on Friday, had some impact, as surely some of those with gains converted into actual shares as the strike date neared. Often the culprit for volatility, the options trade has been somewhat tame over the past six to eight months. Shying from the outright risk of losing everything, many options players have scaled back their efforts or employed straddles or other methodologies to ameliorate risk and eliminate losses.
Should there be nothing in the way of outright "bad" news on the morrow, all of the major indices are set to record another positive week. The key number to watch for on Friday is the July Existing Home Sales report, due out at 10:00 am. Expectations are for 5 million homes to have been sold in the month, which would be a modest, but sustained, increase from June's 4.89 million.
Dow 9,350.05, +70.89 (0.76%)
Nasdaq 1,989.22, +19.98 (1.01%)
S&P 500 1,007.37, +10.91 (1.09%)
NYSE Composite 6,553.40, +74.12 (1.14%)
Advancing issues once again led decliners, 4471-1937, while new highs registered an edge over new lows, 142-49. Volume was once more on the pathetic side, though it's been that way all spring and summer. Most of the pundits and analysts following money at work or at rest have reported that there is still much on the sidelines, but there are signs that more is flowing into stocks on each successive dip.
The markets have largely gathered back everything lost on Friday and Monday. The Dow is just 48 points short of where it closed on Thursday, August 13. The NASDAQ is 20 points below the close from the same date and the S&P is just 5 points below the magic number at 1012.
NYSE Volume 1,119,247,000
Nasdaq Volume 1,988,868,000
Crude oil was up again, though only by 12 cents, to $72.54. Gold continued to trade in a range, losing $3.10 to $941.70. Silver also seems stuck, up a penny, to $13.88. Commodity prices, especially oil, are eventually going to lose investor interest and take on water as stocks have been consistently solid performers for the past 6 months running, since the bottom of March 9. While many portend that the trend cannot continue without a meaningful correction, the economic forces of globalization and deflation are playing important and, as yet misunderstood, roles in business cycles.
Pricing power being non-existent, the push of late has been for market share and product diversification. Companies which pared their labor and other costs early on have thrived under the new regimen and should continue to do so as the economies of the world gradually improve.
The markets were somewhat blind-sided by new unemployment claims prior to the opening. At 576,000 for the most recent week, new claims were higher than expected and worse than the 561,000 reported the week earlier. That did not spoil the mood on Wall St., however, as stocks raced to early gains and added to them as a report on leading economic indicators registered a fourth straight monthly increase of 0.7% for July. As that report was passing the wires, the Philadelphia Fed Index came in above expectations, with an increase to 4.2, up sharply from -7.5 in July and well ahead of mostly dour expectations.
Without earnings driving the market currently, it has been a steady stream of economic data that has buoyed markets of late. Though the news hasn't been earth-shattering or jaw-dropping, it's about as good as it can get, considering the dire circumstances which investors faced in months prior.
Options expiration, which occurs on Friday, had some impact, as surely some of those with gains converted into actual shares as the strike date neared. Often the culprit for volatility, the options trade has been somewhat tame over the past six to eight months. Shying from the outright risk of losing everything, many options players have scaled back their efforts or employed straddles or other methodologies to ameliorate risk and eliminate losses.
Should there be nothing in the way of outright "bad" news on the morrow, all of the major indices are set to record another positive week. The key number to watch for on Friday is the July Existing Home Sales report, due out at 10:00 am. Expectations are for 5 million homes to have been sold in the month, which would be a modest, but sustained, increase from June's 4.89 million.
Dow 9,350.05, +70.89 (0.76%)
Nasdaq 1,989.22, +19.98 (1.01%)
S&P 500 1,007.37, +10.91 (1.09%)
NYSE Composite 6,553.40, +74.12 (1.14%)
Advancing issues once again led decliners, 4471-1937, while new highs registered an edge over new lows, 142-49. Volume was once more on the pathetic side, though it's been that way all spring and summer. Most of the pundits and analysts following money at work or at rest have reported that there is still much on the sidelines, but there are signs that more is flowing into stocks on each successive dip.
The markets have largely gathered back everything lost on Friday and Monday. The Dow is just 48 points short of where it closed on Thursday, August 13. The NASDAQ is 20 points below the close from the same date and the S&P is just 5 points below the magic number at 1012.
NYSE Volume 1,119,247,000
Nasdaq Volume 1,988,868,000
Crude oil was up again, though only by 12 cents, to $72.54. Gold continued to trade in a range, losing $3.10 to $941.70. Silver also seems stuck, up a penny, to $13.88. Commodity prices, especially oil, are eventually going to lose investor interest and take on water as stocks have been consistently solid performers for the past 6 months running, since the bottom of March 9. While many portend that the trend cannot continue without a meaningful correction, the economic forces of globalization and deflation are playing important and, as yet misunderstood, roles in business cycles.
Pricing power being non-existent, the push of late has been for market share and product diversification. Companies which pared their labor and other costs early on have thrived under the new regimen and should continue to do so as the economies of the world gradually improve.
Wednesday, August 19, 2009
Markets In Day-Long Rebound After Lower Open
The resiliency of this market cannot be overstated. The loser lines are crowded with traders - self included - who have called tops recently, and calls for a pullback can be heard from Wall Street to San Diego. The market, however, will have none of it. After falling on Friday and Monday, stocks have staged a remarkable turnaround, erasing most of the losses from the prior two sessions, when the Dow reached a 10-month high at 9398.
What had investors concerned at the open was a serious downdraft in the Shanghai (China) index, which has lost 20% of its value over recent days. The Dow was down 87 points in the opening minutes, but continued to climb from there, eventually turning positive just before noon and making the day's highs just after 1:00 pm. While the plight of Chinese stocks is usually not a market mover, that was the official line, until traders took a breath and reconsidered, especially in light of the fact that the Shanghai index was up more than 100% from recent lows prior to the pullback.
A little give-back was probably baked into the Chinese prices in the first place and profit-taking accounted for much of the selling.
Dow 9,279.16, +61.22 (0.66%)
NASDAQ 1,969.24, +13.32 (0.68%)
S&P 500 996.46, +6.79 (0.69%)
NYSE Composite 6,479.28, +42.21 (0.66%)
Today's internals were decidedly bullish, with advancing issues besting decliners, 3923-2456. New highs beat out new lows once again, notching a 77-51 advantage. Volume was actually a bit more agitated than the past few days.
NYSE Volume 1,026,465,000
NASDAQ Volume 1,995,397,000
Oil was a big winner, as energy stocks led the market after release of government data showed a shrinkage in supplies of some 8.40 million barrels in US stockpiles. Crude for September delivery rose a whopping $3.45, to $72.42, while the price of an ouce of gold gained $5.60, to $944.80. Silver continued to close lower, losing 9 cents to $13.88.
There will be some poorer people in the US after the IRS struck a deal with UBS to disclose the identities of more than 4400 people for whom the bank had managed private Swiss bank accounts.
Now, there's some news even the most stoic actuary can appreciate.
What had investors concerned at the open was a serious downdraft in the Shanghai (China) index, which has lost 20% of its value over recent days. The Dow was down 87 points in the opening minutes, but continued to climb from there, eventually turning positive just before noon and making the day's highs just after 1:00 pm. While the plight of Chinese stocks is usually not a market mover, that was the official line, until traders took a breath and reconsidered, especially in light of the fact that the Shanghai index was up more than 100% from recent lows prior to the pullback.
A little give-back was probably baked into the Chinese prices in the first place and profit-taking accounted for much of the selling.
Dow 9,279.16, +61.22 (0.66%)
NASDAQ 1,969.24, +13.32 (0.68%)
S&P 500 996.46, +6.79 (0.69%)
NYSE Composite 6,479.28, +42.21 (0.66%)
Today's internals were decidedly bullish, with advancing issues besting decliners, 3923-2456. New highs beat out new lows once again, notching a 77-51 advantage. Volume was actually a bit more agitated than the past few days.
NYSE Volume 1,026,465,000
NASDAQ Volume 1,995,397,000
Oil was a big winner, as energy stocks led the market after release of government data showed a shrinkage in supplies of some 8.40 million barrels in US stockpiles. Crude for September delivery rose a whopping $3.45, to $72.42, while the price of an ouce of gold gained $5.60, to $944.80. Silver continued to close lower, losing 9 cents to $13.88.
There will be some poorer people in the US after the IRS struck a deal with UBS to disclose the identities of more than 4400 people for whom the bank had managed private Swiss bank accounts.
Now, there's some news even the most stoic actuary can appreciate.
Tuesday, August 18, 2009
Monday's Fall Ushers in Tuesday's Rebound
My apologies for not posting the past couple of market days. I have been dealing with issues concerning my main site, dtmagazine.com. Mostly, these issues, from not having email or FTP access and various other problems were caused by the hosting company, x7hosting.com and their complete incompetence in migrating my site - and many others - from one set of servers to another. It is my intention to sue x7hosting.com for four days of lost revenue, aggravation and unnecessary interruption of my business. But that is another matter...
Over the past few days, US indices have taken a bit of a hit. Both Friday and Monday were down days, but Tuesday's mild recovery bodes well for the future of the stock markets. Tuesday's gain began to fill in the gap between Friday's close and Monday's open, and, if there's anything about markets for certain, it is that they always fill in gaps.
So, it is fairly safe to assume that the indices will bounce around current levels for at least the rest of this week. Another huge move to the downside seems unlikely, though a continuance of Tuesday's rally would be unsurprising.
Here are Tuesday's closing numbers:
Dow 9,217.94,+82.60 (0.90%)
NASDAQ 1,955.92, +25.08 (1.30%)
S&P 500 989.67, +9.94 (1.01%)
NYSE Composite 6,437.07, +84.96 (1.34%)
Advancing issues finished well ahead of decliners, 4879-1550. New highs outnumbered new lows, 78-48, a margin that has been narrowing recently, though it would not be a cause for alarm if the new lows took back the lead in coming days. The most significant issue facing the markets right now is how to read the abysmally low volume, though in light of the fact that volume has been off for most of the summer, it's best to attribute that to ongoing summer doldrums and some general investor trepidation about jumping back in at this time.
NYSE Volume 1,045,306,000
NASDAQ Volume 1,760,437,000
Commodities showed generalized strength on the day, with oil up $2.44, to $69.19; gold ahead by $3.40, to $939.20, though silver slipped 2 cents to $13.96 per ounce. Foodstuffs, grains and meats were mostly higher.
The biggest news of the day came prior to the opening bell, as July PPI was released, showing a massive 0.9% decline month-over-month, which has to come as a rejection for the inflationist camp and was met with so many "told you so's" by deflationists that the rancor was deafening.
Lower producer prices are usually the forecaster of tough times for retailers, who have thus far weathered the recession with particular aplomb and grace. Lower prices for all goods and services is in the cards for the next 6-18 months, regardless of the amount of money pumped into the nascent economy by the Fed and Treasury.
While the recession may be slowing, it is still far from over. Germany and Japan may have announced that they were recovering, but it's likely to be another 3-6 months before the US economy gets back on firm footing. Foreclosures are still running very high, as is unemployment. This recession - a surly and deep one that it is - wasn't created in a manner of a few months and it won't go away quickly either.
Look for more sideways trading in coming months and more than enough signs for both bulls and bears to be right occasionally. The US will bounce back, but it's going to take a while.
Over the past few days, US indices have taken a bit of a hit. Both Friday and Monday were down days, but Tuesday's mild recovery bodes well for the future of the stock markets. Tuesday's gain began to fill in the gap between Friday's close and Monday's open, and, if there's anything about markets for certain, it is that they always fill in gaps.
So, it is fairly safe to assume that the indices will bounce around current levels for at least the rest of this week. Another huge move to the downside seems unlikely, though a continuance of Tuesday's rally would be unsurprising.
Here are Tuesday's closing numbers:
Dow 9,217.94,+82.60 (0.90%)
NASDAQ 1,955.92, +25.08 (1.30%)
S&P 500 989.67, +9.94 (1.01%)
NYSE Composite 6,437.07, +84.96 (1.34%)
Advancing issues finished well ahead of decliners, 4879-1550. New highs outnumbered new lows, 78-48, a margin that has been narrowing recently, though it would not be a cause for alarm if the new lows took back the lead in coming days. The most significant issue facing the markets right now is how to read the abysmally low volume, though in light of the fact that volume has been off for most of the summer, it's best to attribute that to ongoing summer doldrums and some general investor trepidation about jumping back in at this time.
NYSE Volume 1,045,306,000
NASDAQ Volume 1,760,437,000
Commodities showed generalized strength on the day, with oil up $2.44, to $69.19; gold ahead by $3.40, to $939.20, though silver slipped 2 cents to $13.96 per ounce. Foodstuffs, grains and meats were mostly higher.
The biggest news of the day came prior to the opening bell, as July PPI was released, showing a massive 0.9% decline month-over-month, which has to come as a rejection for the inflationist camp and was met with so many "told you so's" by deflationists that the rancor was deafening.
Lower producer prices are usually the forecaster of tough times for retailers, who have thus far weathered the recession with particular aplomb and grace. Lower prices for all goods and services is in the cards for the next 6-18 months, regardless of the amount of money pumped into the nascent economy by the Fed and Treasury.
While the recession may be slowing, it is still far from over. Germany and Japan may have announced that they were recovering, but it's likely to be another 3-6 months before the US economy gets back on firm footing. Foreclosures are still running very high, as is unemployment. This recession - a surly and deep one that it is - wasn't created in a manner of a few months and it won't go away quickly either.
Look for more sideways trading in coming months and more than enough signs for both bulls and bears to be right occasionally. The US will bounce back, but it's going to take a while.
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