SUMMARY:
-Â Stocks hit their stride on the way to quarter end and the jobs report.
-Â ADP jobs survey is good enough at 201K private jobs.
-Â Mortgage applications fall as mortgage rates rise.
- Inflation expectations jumping as the fourth Fed official comes out  against  QE.
-Â Dollar LIBOR slips, indicating no real crisis is expected.
-Â History proved up again: Average GDP growth the past decade is 1.7% per year as regulations and government spending explode over that period.
-Â Nice moves abound as the run to the quarter end accelerates again.
(more…)
Stocks continued their recent advance yesterday as the path of least resistance once again appears to be to the upside. The bulls continue to make their presence felt despite the largely adverse macro headlines as the latest rally has now pushed the S&P 500 back to within a stone’s throw of its recent highs while the Midcap index closed at a new all-time high. (more…)
SUMMARY:
- Economic news misses targets again, but stocks don’t mind, resuming the end of quarter move.
- Case/Shiller provides no real hope for housing market.
-Â Consumer Confidence falls to the lowest in more than a year.
- End of quarter run looks to be back on: pick up a few more good buys, let positions run, take some gain at the week’s end.
(more…)
SUMMARY:
 - Stocks try a modest gain, run out of gas, sell in the last hour.
 - Some important data but stocks pay it no mind for now.
 - Income growth falls to 0.3% while spending doubles its rate, topping expectations.
 -Third Fed member talks down QE policy.
 - February pending home sales rise but drop significantly year/year.
 - Market takes a breather after a steady rise toward quarter end.
Stocks pulled back a bit into the closing bell on Monday as the battle over the next level of resistance appears to have taken hold. There were no obvious headlines cited for the retreat seen in the final 25 minutes of trading. However, our sources report that comments attributed to two Fed officials suggesting that QE2 should be halted in the near-term may have been related to the quick dive in the major indices. (more…)
SUMMARY:
 - Market makes it 6 out of 7, holding a gain despite some afternoon profit taking.
 - Older economic news (GDP) is fine, but the newer information is not asÂ
 - Second Fed member talks about inflation. Market may be assuming QE 3 but the Fed has started dropping bread crumbs.
 - A solid week, a bit extended, but more tape painting provides a path for gains up to . . . the Jobs Report.
(more…)
SUMMARY:
 - Market continues ignoring softening economic data and geopolitical events, rallies fifth day out of six.
 - Anticipation of QE3 or end of quarter tape painting?
 - Jobless claims trend continues to improve with a 30 month low on new claims.
 - February Durable Goods Orders post consecutive downside as capital investment stays negative.
 - NASDAQ rallies through its 50 day EMA, following SP500, SP600 upside.
 - Tape painting or not, the bid appears to be up toward quarter end.
(more…)
As traders reached for some caffeinated assistance in perusing the early morning headlines on Thursday, they probably were thinking that it might be best to play the game from the short side. Once again the news flow bordered on depressing as Moody’s had downgraded 30 Spanish banks, Portuguese 2-year bonds yields were soaring to their highest level since 1999, CDS spreads were blowing out, there were opposing tanks lined up in the streets of Yemen, there was steam coming out of a couple reactor buildings at Dai-ichi, and the mess in Libya continued unabated – this despite NATO forces announcing that the Libyan military had been all but destroyed. (more…)
Although I do my darndest to present a balanced view of the markets each morning (remember, our goal is to identify what is driving the markets on a daily basis and not to justify an opinion of what I think Ms. Market ‘should’ be doing), I have a warning for those finding themselves in the glass-is-half-empty camp this morning: Cover your ears, because what I’m about to say might be construed as being downright positive. (more…)
After dealing with four weeks of frenetic trading and vaulting more than 400 points higher in the prior three sessions, it appears that traders decided to step back and take a breath on Tuesday. While the bulls argue that Tuesday was merely a much needed rest after an impressive bounce from last week’s panic-low, the glass-is-half-empty crowd is saying there are just too many negatives/uncertainties present right now for stocks to move higher. (more…)
SUMMARY:
 - Market makes it three straight to the upside led by SP600 and the other NYSE indices as they break their 50 day EMA to the upside.
 - Volume drops off rather sharply following expiration.
 - M&A continues with T buying T-Mobile.
 - Libya intervention, some control over Japanese nukes calms investors . . a bit.
 - Existing home sales are still having a hard time existing.
 - Bonds, gold, and oil show the action in financial markets is just not about Libya and other geopolitical events.
 - Bifurcated market continues as chips look very much like a 1-2-3 rebound on light volume.
(more…)
As the saying goes, the more things change, the more they stay the same. Take for example, the current lingo used to describe the stock market’s schizophrenic behavior lately. I’m sure by now you’ve all heard the commentators talking about the “risk trade.” In short, when stocks are going down, we’re told that traders are “taking risk off” and that these same trigger-happy traders are then “putting risk back on” when we see a day like Monday. (more…)
SUMMARY:
 - Market continues a 2-day bounce as geopolitical events again intervene on its behalf.
 - G7 surprises, gets aggressive to weaken the yen.
 - UN finally does what it was designed to do as it sets up a no-fly over Libya.
 - China raises reserve requirements 50BP but with everything else happening no one paid any mind.
 - Consumer Sentiment takes a dip.
 - A bounce but the technical action was not convincing enough to start more upside.
(more…)
For nine days, all eyes were focused on Japan as traders and investors alike worried about the potential for a nuclear disaster. For more days than I care to count, the world has worried about what social unrest and armed uprisings in the Middle East/North Africa will mean to the price of oil, and, in turn, to the U.S. consumer. And for the past four weeks, the stock market has reflected the state of angst by correcting lower. (more…)
SUMMARY:
-Â Rubber band was stretched and with SP500 at a bounce point stocks put in a solid price bounce.
- Volume and breadth lag on the move, suggesting the strength was not quite what it needs to be.
- Jobless claims continue the improvement trend.
- CPI overall too hot though core is, according to the Fed, just right.
- Philly Fed shows manufacturing is still on fire even as service sector prices rise.
- If the market is going to bounce, this is where it should do so given the prior consolidations.
(more…)
One of the most interesting comments I received in my email inbox yesterday suggested that I was reading too much into the market’s volatility and that since there was no cloud of radiation wafting over Tokyo, the bulls should be good to go. The sender went on to opine that with the economy doing well here at home, we ought to see the market get past the emotion of the moment in relatively short order. (more…)
Although Tuesday was a wild ride at the corner of Broad and Wall, the action did actually seem to make sense. The market had basically held true to its news-driven moniker by falling on bad news relating to the risk of a nuclear catastrophe and then rising when those worries abated in the afternoon. As such, one might have expected more of the same on Wednesday. And with the news out of Japan appearing to be favorable in the early going, it looked like the worst of this corrective phase might be behind us. (more…)
SUMMARY:
 { Markets open with a dive on more Japan environmental/economic fears, Saudi trooper shooting, and the usual debt and inflation issues.
 { All sectors that benefitted from the liquidity flood had some of the gains taken from prices on Tuesday.
 { Inflation is, unfortunately, just one of the biggest problems facing the US, but it is inexorably tied to our currency woes.
 { New York PMI rises again, but prices are shooting higher.
 { Import prices show more inflation. Food prices show the greatest 12 month growth since 1977!
 { Indices take some major hits. SP500 is still a potential ABCD but the other indices have sustained damage and have to prove their merit.
 { Not the time for long term investing. Patience, smaller positions, watch risk/reward, and keep compiling the play lists.
(more…)
Coming into Tuesday morning, the market seemed simple enough to understand as stocks were being pummeled globally on fears of a nuclear disaster in Japan. There was no need to read between the lines; the news was bad and getting worse with each report as we heard about nuclear reactor fuel melting and radiation levels increasing in places as far away as Tokyo. Thus, it didn’t take much imagination to envision the already horrific situation continuing to worsen. (more…)
Stocks are falling around the globe as traders and investors are barraged with the horrific, disturbing scenes from Japan and the endless discussion of what the disaster means to the macro view. While it is difficult to focus on the financial aspects of this massive human tragedy, unfortunately the business of the markets marches on – regardless of how insignificant it may seem at times. As such, we will try to put the human element aside and continue to work toward determining the drivers of the market action. (more…)
SUMMARY:
 { Despite quake, tsunami, EU bond yield surge, weaker sentiment, and morning pundit predictions the market would selloff, it didn t.
 { January retail sales rise in line at 1%, but driven so to speak by gasoline price increases.
 { Michigan sentiment takes a hit on gasoline prices. Inflation expectations jump.
 { Business sales hit a 12 month high at 2%
 { SP500 looks just like November and SP600 as well. NASDAQ and SOX, however, have to make a comeback.Â
(more…)
Despite the overtly negative news backdrop of the last few weeks, the dip buyers have been fairly resolute in their plans to buy each and every decline in the stock market. However, given the horrific scenes from Japan, which was hit first by the largest earthquake in 140 years, then a massive tsunami, and is now dealing with the possibility of multiple nuclear reactor meltdowns, it would appear that it’s decision time for the bulls. (more…)
SUMMARY:
- The ‘end of the bull market?’Â That was the question of the day on the financial stations.
- The news was not great but was it really that different to warrant a stock market rollover?
- Jobless claims still below 400K, but that was not good enough for investors, at least on Thursday.
- China suffers a $7B trade deficit, sparking speculation of a global slowdown.
- Copper hits a 4 month low as Chinese imports fall 35%
- Saudi Arabia ‘hit’ with all of 200 protestors. Better break out the artillery.
- Technically does this action merit calls that the bull run is over?
- Take care of business as usual: protect positions, look for opportunity, be patient.
(more…)
A powerful earthquake in Japan overnight has triggered a massive tsunami and a wave of selling in overseas markets (the earthquake hit just 14 minutes before the close in Japan). While tragic from a human perspective, forces of Mother Nature usually don’t have long-lasting effects on the economies of the world. As such, it is important to recognize that the current selling being done appears to be a continuation of traders taking another look at the premise for recent rally. (more…)
SUMMARY:
Another solid day of work in the lateral consolidation, except for SOX.
Oil fell so according to the Tuesday logic stocks should have rallied, right?
Kuwait protests, Religious killings in Egypt, Libyan oil facilities burning, street riots in Greece. But, there is nothing to worry about.
Mortgage applications jump on rising rates, professional buying.
Gasoline demand already dropping.
January wholesale inventories rise but sales rising nicely as well.
Semiconductors cut out of the rally. Just taking a rest or a leading indicator?
(more…)
Although there is a sea of red numbers from the bourses across the pond this morning and the futures are pointing to a lower open, we would be remiss if we failed to point out that today marks the second anniversary of the end of the Credit Crisis Bear Market and/or the start of the current bull run. For those of you keeping score at home (and who isn’t in this business) our heroes in horns have been able to push the S&P 500 up a cool +95.1% over the past two years while the DJIA has improved +86.5% and the NASDAQ has put up a double with a gain of +116.9% since the current run for the roses began on March 10, 2009. (more…)
SUMMARY:
- Oil drops slightly, purportedly spurring a market rebound. In reality it is just another day in the same consolidation range.
- Extraordinary meeting or not? Rumors on both sides of OPEC swirl.
- Another small business survey shows improvement but as with just about everything in this recovery, lagging improvement.
- More mortgages fall underwater.
- Government’s own accounting shows how inefficient the current government-run healthcare plans are.
- Overall the market continues to set up rather nicely, but it is bothersome that techs are suddenly lagging.
(more…)
I have been saying for a week or so now that we’re smack in the middle of a news-driven market. This basically explains the volatility and the manic depressive behavior seen recently as stocks tend to be up one day and then down the next. However, the only problem with this assessment is that the news really didn’t drive the market on Tuesday. (more…)
SUMMARY:
- Futures were up, but stocks make no attempt to offset the Friday selling, at least not until the afternoon session when NASDAQ bounces off its 50 day EMA.
- Oil, gold surge on intensifying Libyan fighting, potential issues in Saudi Arabia, but they give back some gains as stocks recover late.
- Greece the forgotten crisis: Moody’s cuts its debt three steps, says debt reduction plans won’t work.
- The old anti-drilling arguments come out again. What if we had drilled the first time we heard the ‘it will take too long to matter’ whining?
- Plenty of volatility remains, indicating the correction continues for now until one side or the other takes over: it’s improving economic data versus geopolitical unrest, spiking oil, surging commodities, and, like it or not, rising inflation.
- Bulls and bears fighting it out but doing so while moving laterally in the range. Pretty good consolidation action.
(more…)
I believe there are two words that best sum up the current up-one-minute, down-the-next environment in the stock market: Fear and Momentum. Cutting to the chase, stock and oil traders alike seem to be fixated on the fear of what might happen to the world’s supply of crude, and in turn, the resulting impact on the global economy. And although the U.S. has a couple of barrels laying around in reserve and Saudi Arabia has the capacity to double Libya’s production in the blink of an eye, traders appear to be focused on only what can go wrong. (more…)
SUMMARY:
- Jobs report, even with its beat, could not live up to expectations, Chavez ‘peace’ overtures face harsh reality, market sells back.
- Late rally puts a better light on the session, and in the bigger picture this is still just a normal, albeit choppy, consolidation.
- Liquidity continues to trump overall, but keep a watch for oil spikes, spreading unrest, food shortages . . .
- Greenspan tells the feds to butt out with its regulations and taxes while Gross says Bernanke is way off regarding inflation.
- Jobs are being created, but the statistics are misleading as US labor participation rate is well below the historical average, making unemployment figures look better than they are.
- Friday may have been down, but it still suggests a November-like correction versus any major selloff. But, watch out for those hot points that could set off the old stagflation malaise.
(more…)
SUMMARY:
- Peace talks, Same Store Sales prime the market for a strong price gain.
- ECB to raise rates, US to keep on pushing liquidity.
- Jobless claims make it 3 of 4 below 400K. The trend is getting right.
- ISM services tops expectations.
- Indices clear interim peak as rubber match tilts in favor of bulls.
- Market expects jobs report to beat expectations. How the market reacts to the report, beat or miss, likely tells the story of any remaining correction.
(more…)
I am often asked why I get up so early every morning to write about something as mundane as the stock market. The answer is simple. My primary objective relating to the market is to stay in tune with the drivers of the action. And since those drivers are constantly changing (and at times more than a little difficult to find), getting an early start is the only way to keep up. Many times, the way the market reacts to the early morning news tells you more than the news itself. Thus, I’m of the mind that you’ve got to be there to witness the action and the accompanying reaction firsthand if you want to truly understand what is going on in the game. (more…)
Regardless of whether you look at charts, read the tape, or listen to the talking heads all day; the bottom line as it relates to the stock market is clear right now. Market participants are simply on the fence about whether to stick with the upbeat picture being painted by the economic data or to succumb to the enticing arguments of the dark side and assume that things are going to go slip-sliding away on the Middle East’s oil slick. (more…)
SUMMARY:
- Futures and new money pointed to an up morning and it was. Until the bell rang.
- Stocks sell and give no upside respite in a strictly downside day.
- Bernanke to keep the liquidity pipes running full.
- ISM hits a seven year high. Prices to follow?
- Liquidity being parked in commodities, financial markets.
- Indices reverse, key stocks showing downside engulfing patterns, suggesting more downside near term.
- More selling, but still anticipating just a correction versus a major end to the rally.
(more…)
Traders returned to panic mode on Tuesday in response to the rising price of oil and the growing uncertainty in what is now being referred to as MENA (Middle East, North Africa). I know what you’re thinking. Why on earth are we worried about oil again? Haven’t we done this already and didn’t the Saudi’s solve the problem by opening up the spigot a bit wider last week? (more…)
SUMMARY:
- Rebound continues, but the market is split in its enthusiasm.
- Late rally brings NASDAQ and growth back up to positive, barely.
- Buffett’s ‘itchy trigger finger’ helps market upside.
- Income jumps, wage growth modest: transfer payments (taxes) make the difference.
- Chicago PMI surges to 71.2. Impressive.
- Spending declines as consumers size up the inflation issues.
- Short sales decline to a 3 year low.
- Rebound continues but the rubber match is still on as new money hits for March and some window dressing to end February.
(more…)
While it is tempting to take Monday’s big gain for the DJIA in stride as just another day in the life of the current bull market, there was much more to it than that. In my humble opinion, Monday showed us that both teams are now ‘in it to win it’ and that the previous ‘it’s all good’ environment may be waning. (more…)
