SUMMARY:
- Stocks continue the rally, fending off an afternoon seller attack.
- Japanese industrial production rebound excites some that an economic recovery is coming.
- Spending more to reduce the deficit. No wonder we cannot strike a deal on the budget.
- Quarter end, QE 2 end could mark the end of the relief rally.
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SUMMARY:
- Second solid price session as relief/end of quarter rally pushes SP500, NASDAQ back into their former ranges.
- Case/Shiller has some seasonally adjusted positives.
- Consumer confidence, already at recession levels, heads lower.
- Some economic positives keeping this recovery limping along: retail sales gain, IPO’s highest since 2007
- Once again SP500 is back in its former range, and this time it looks to have a bit more momentum as NASDAQ strengthens as well.
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SUMMARY:
- Market bounces right back from Friday selling: will the tennis match continue or will quarter end window dressing prompt a 3 day rally?
- Personal Income and Spending disappointing. Seeing evidence in the real world.
- ECRI: Cyclical slowdown for at least 2 quarters, hiring may have hit its high for this part of the cycle.
- CNBC top business states: No way NBC will allow Texas to be back to back winner given Perry might enter the Presidential race.
- Is there a reason, this time, for more than one day of bouncing?
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SUMMARY:
- Better economic data should have aided the Thursday reversal . . . but it didn’t.
- Who cares category: GDP clicks up a tenth in its final revision
- Durable goods orders post a very decent showing with some good upside revisions.
- Geithner admonishes Congress that the budget agreement needs to include ‘revenue’ aspects, i.e. tax hikes. We have already bailed out their favored companies and now they want us to bail them out?
- Even with the selling the market is still in position to bounce, but there is just no upside follow through.
- Darn few earnings warnings as the warnings season draws toward its end. Lower energy could lead to surprises for Q2 results, and with the market set up for a bounce that could give us the fabled summertime rally.
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SUMMARY:
- Economic data, post-Bernanke blues, general market weakness lead to a renewed selloff, but then the indices post a rather impressive reversal.
- US and a few others pony up 60M bbl of oil from the reserves . . . right after oil broke its trend.
- Jobless claims continue their rise.
- May New Home sales fall 2.1%, but not as bad as expected.
- Bernanke, Part 2: What the Fed chairman doesn’t know can hurt you.
- Market reversal puts the upside back on, but until proved otherwise, any upside is still a relief move.
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SUMMARY:
- Market pauses ahead of FOMC, fades after Bernanke downgrades Fed’s economic outlook.
- Earnings start back up and show the dichotomy in the economy.
- Bernanke a bit more downbeat about the economy, but is hands are tied without some kind of spending reduction by Congress.
- ‘Transitory’ causes of the economic slowdown are not all transitory.
- Lick log session: will the indices rebound and continue the rally or was 1295 a rally killer once again?
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SUMMARY:
- Relief rally picks up steam, has some momentum, but watch SP500 1295, the completed Greek vote, the FOMC decision.
- May Existing home sales hit a six month low as inventories jump
- Bernanke finds reality, once again, does not fit the Princeton model.
- Time Magazine cover ponders the economic negatives. It and the other sentiment indicators helping push the rally.
- Relief move at a critical point. Good leadership showing solid recoveries, but the sellers are preparing to try their hand again.
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SUMMARY:
- Market tries yet another bounce, aided by some strong individual stock moves.
- EU and Greece again bicker over the bailout.
- Banks holding more in deposits than loans outstanding. Now THAT is a booming recovery indicator.
- More analysts are cutting estimates for 2011 and 2012
- Stocks start a new bounce attempt, but it is no rip higher.
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We often talk about the idea of watching the action of the market and trying to listen closely for any messages that may be being offered. To be sure, Ms. Market is not always “talking” and as such, oftentimes there is no message to be gleaned from a given session. However, when messages are available it generally pays to listen and listen good.
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SUMMARY:
- Market in great position to bounce, gets a continental push, then once again, cannot hold the move.
- Germany knuckles under and Greece gets a bailout. Question is, will Greek voters take it?
- June preliminary Michigan Sentiment falls more than expected.
- May LEI doubles expectations, but the LEI is not that leading.
- More China stats showing its economy is struggling.
- Selling appears pervasive, suggesting the economy is worse than many expect.
- Market still set to bounce but not expecting any upside breakout when it does.
(more…)
The vast majority of the time, the stock market tends to respond to news inputs in the short-term while moving to and fro within the primary trend. However, there are times, such as we are seeing now, when the primary trend is in question. And thus, how the market reacts to the news is oftentimes more important than the news itself. Friday’s market was a good example of this idea. Traders were treated to what appeared to be good news out of Germany and France and yet the bulls couldn’t seem to do much with it.
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SUMMARY:
- Stocks sell further to support and hold. Now can the market put in more than a single day bounce?
- Jobless claims ‘fall’ to 414K! Surely time to rejoice.
- Philly Fed manufacturing turns negative, the second region to do so.
- Housing starts rise in a wholly, for now, meaningless report given the other circumstances.
- SP500 doji at key support. NASDAQ doji at key support. You would think a bounce was coming . . .
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Traders dealt with an abundance of inputs on Thursday. And while the news was definitely not positive across the board, it appears that the end result was. Thus, the argument can be made that when a market stops going down on bad news it means that those who wanted to sell have likely already done so. And if this is the case, then the long awaited bottom to the current corrective phase may be close at hand and the tide to this fairly miserable environment might be turning.
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SUMMARY:
- A hint of better economic news on Tuesday trumped by overwhelming evidence Wednesday that the economic slide continues
- Stocks reverse Tuesday’s gain and more, racing toward the March lows.
- New York PMI marks the second region to show manufacturing contraction.
- Consumer prices showing the bleed from higher commodities prices.
- Chinese inflation, food issues, and slowing economy equal violent unrest, Brazil bond yield curve inverted. How does that export economy look now?
- Greece government opts to fold, start over again in the face of renewed violence.
- France put on review by Moody’s do to Greek exposure
- Many comparisons to the summer of 2010, but that was a bottom, not a top.
(more…)
I’ve been working under the assumption that the powers-that-be in Europe (the EU, ECB, the IMF, and the heads of the various PIGI states) would find a way to eventually “handle” the situation in Greece. Note that I did not say “fix” the situation in Greece, or Portugal, or Spain, or Ireland. No, I have merely been expecting the guys and gals in charge to find a way to avoid a “credit event” that, if not dealt with correctly, could threaten the global banking system all over again.
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SUMMARY:
- Just a hint of better news trips the oversold spring as the indices surge upside
- Impressive price moves but volume is lighter as SP500 bumps the bottom of its range and fades back.
- Lackluster Retail Sales, not too offensive PPI provide enough tender to spark up an upside rush.
- Bernanke wants fiscal policy ‘adjustments,’ but says debt ceiling wrangling is the ‘wrong tool.’
- A budget deal to give the Fed cover for QE3?
- Strong initial surge begs for some follow through this go round, but SP500 has to cross 1294 first.
(more…)
Anyone who has ever clicked the buy button or shouted orders into a phone (yea, I’m that old), knows that even during the ugliest of bear markets, stocks simply don’t go down every day. As such, most traders I know have been looking for a bounce. Sure, a couple were a day (or four) early in their attempt to play a brief countertrend move, but the bottom line is active investors knew that the market was oversold and due for a rebound.
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In listening to and reading various market commentaries from the big press outfits, what strikes me is how absolutely certain they are regarding the question of what comes next for the stock market. While traders everywhere have been talking about the oversold condition and how negative the sentiment has become for some time now, and how this combination usually leads to a bounce higher, the popular press continues to suggest that lower prices most certainly lay ahead.
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SUMMARY:
- Thursday just a blip as market suffers more relative carnage.
- VIX trying to break its range.
- Big Bank Tax may not be 3%. Time to celebrate?
- Exxon discovery should help our leaders discover we can wrest energy independence from our enemies versus taxing gas an extra dollar to make us buy cars we don’t want.
- Market again oversold, approaching next resistance. Another downside move to start the week sets the stage for a better relief bounce.
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Stocks fell on Friday, making it seven losing sessions out of the last eight and cementing the fact that the sentiment relating to stocks has become overtly negative. There didn’t appear to be any new negative catalysts during the day and in fact, there was actually some good news relating to the beleaguered banking sector. However, this didn’t keep traders from doing some additional selling into the close.
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SUMMARY:
- Market makes the expected bounce but it looks to be simply going through the motions
- Jobless claims continue to hold in above 400K.
- Trade Deficit shrinks unexpectedly as exports hit a record and imports shrink. That will raise GDP but again, that is illusory.
- Corn inventories revised sharply lower as a shortage looms.
- If the bounce does not show more spunk, be ready to exit upside positions and put some more downside positions to work.
(more…)
The popular press was all over the fact that yesterday’s bounce higher in the stock market put an end to the first six-day losing since the dark days of the Credit Crisis bear market. And while I may be interpreting the message wrong, it felt like several sources were implying that the rally also meant an end to the corrective phase was at hand. However, the key question after a day like Thursday is this: Did anything happen to change the environment?
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SUMMARY:
- Further selling takes the indices to next potential support.
- Beige Book shows most regions holding their ground, but we doubt it reflects reality: holding their ground as the economic data weakens from weakness?
- “Frustratingly slow” recovery for Bernanke is nothing to be surprised at.
- OPEC fails to agree to production hikes, but Saudi and three others say they will provide any oil that is needed. The ‘official’ OPEC is going through its death throes.
- March Japan low becomes a target in the new base, but likely a significant bounce before then.
- After hours news from TXN sparks further selling, and after six downside sessions another weak open could finally reverse to an oversold bounce.
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With the stock market having fallen six days in a row and now sporting a decline of -6.14% from the April 29th high, the question of the day is how much downside is enough to discount the current economic soft patch? Is -5% enough? How about -7.5%? Or is -10% the ultimate target the indices must reach before the value hunters start to step in?
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SUMMARY:
- Market bounces, SP500 tests trading range break, indices hold gains . . until the close.
- Dollar beating has resumed as China announces 97% of its short term T-Bill holdings are liquidated.
- Bonds recover modestly, aided by a positive 3 year auction.
- Bernanke lauds Fed’s actions taken ‘at no cost to the taxpayer,’ has to admit the Fed has not thought out the ramifications of the new regulations.
- Tuesday action looks like a test and failure all in one session.
(more…)
After four straight down days and a decline that was beginning to scare people, a bounce for the stock market was in order. You know; a rebound that makes investors believe that no matter how bad things get or how negative the outlook is, they may have seen the worst. So, after a decline of -5.7%, a rebound was to be expected. And after some decent economic news out of Germany, an encouraging comment from the ECB, and a couple of M&A deals, a bounce is exactly what we got yesterday morning.
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SUMMARY:
- Sellers trump again, take SP500 through the bottom of its range.
- No news, just no buyers.
- Portugal takes bailout funds as the EU bailout saga continues.
- Four sharp sessions lower leaves the market oversold and SP500 below its range: now watch for how the market tests.
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I have long been of the mind that managing money based on a macro view of the world is exceptionally difficult. First and foremost, stocks don’t always pay attention to the macro themes of the day. The most recent bout of stock market weakness is a perfect example of this. Although the economic reports had been coming in below expectations for some time, it wasn’t until just a few days ago that anybody cared about the data. But now the weaker-than-expected numbers are all anybody can talk about.
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SUMMARY:
- A week where the market tries to catch up with the 5 months of weaker economic data.
- Administration says the jobs report is just a bump on the road of recovery. Actually, jobs, already weak, are now just coming back into line with a double dipping economy.
- Indices closing in on bottom range support as individual leaders hold up just fine.
- Financial stocks suggest more financial woes ahead.
- Two big selloffs tip the balance toward the sellers, but even so the indices are still in their ranges.
- Focus is on the bottom of the range this week. A bounce from here? A further selloff and then a bounce? No bounce? There are only so many possibilities, right?
(more…)
Friday’s Jobs report confirmed that the fears over the current state of the economy may indeed be warranted. As we’ve been reporting, the data has been generally weaker than expected for more than a month now. However, Thursday’s PMI/ISM reports and the Nonfarm Payroll numbers on Friday provided an exclamation point to the thesis that something more than a speed bump may be occurring.
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SUMMARY:
- Stocks stem the heavy selling for the day, pausing ahead of the jobs report.
- More weak economic data offers no reason to change market character.
- Jobless claims rise again, Factory Orders fall, Same Store Sales soften further.
- Moody’s blackmailing US Congress, trying to influence a debt ceiling increase.
- A weak jobs report already built into Friday’s prices thanks to the ADP survey?
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One of the biggest difficulties in providing what I hope will be meaningful market commentary on a day like today is the fact that the session is likely to be all about the jobs report (or the ISM Non-Manufacturing data that comes out a little later this morning – for unlike the payroll numbers, the ISM report actually has a pretty decent correlation to the state of the economy). And since I do my darndest to try and avoid any and all predictions, especially when it comes to guesstimating economic data, it makes providing value in today’s column a little challenging.
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SUMMARY:
- No new money for June as market gives the ‘in your ear’ day.
- For all the strength Tuesday may have shown, Wednesday showed the buyers are not dominant at this juncture.
- Economic data makes the second ‘summer of recovery’ look like the ‘summer of relapse,’ and on Wednesday investors took notice.
- ADP employment survey dives.
- ISM hobbles in just above the breakeven point as China manufacturing slows the most in 9 months.
- Moody’s cuts Greece to junk. One of more than a few to come.
- Wednesday’s jobs related dive makes Friday and its report all the more important for the stock market’s outlook.
(more…)
It was a busy afternoon on the telephone yesterday as friends, colleagues, and acquaintances wanted to know why the stock market was suddenly and seemingly without warning, worried about the economy. A couple people even cited my own very-unscientific review of May’s economic reports (according to my count, 28 of the 35 reports in May had come in below consensus expectations) as evidence that weak data should not be news to Wall Streeters. To which, I responded repeatedly with a Wall Street-ism of my own, “Things don’t matter to the stock market until they do… And then they matter a lot!”
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SUMMARY:
- A double showing of strength as indices continue the rebound when an even stronger move. All for show to end the month?
- So much for light volume moves this week, at least for Monday.
- SP500 clears the February peak on the close, albeit by a whisker.
- Germany promises to lead a Greek bailout, again.
- Case/Shiller Index shows the housing double dip is here.
- Chicago PMI is the latest manufacturing report to stumble significantly.
- Consumer Confidence tumbles, hanging on just over 60.
- Dollar selloff continues, looking fairly serious as oil rebound now looks fairly serious.
- Bonds post a new rally high on more weak economic data.
- Stocks continue to build strength, refusing to let the rally fizzle out, at least for the end of the month.
- Watch the action at the top of the trading range, meaning watch SP500 because it is already there.
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Bad data, what bad data? PMI’s weak? Who cares. Consumer confidence falling? That doesn’t matter. Housing still a problem? Come on, that’s clearly old news. Twenty-eight out of thirty-five economic reports in May weaker than expected (yes, I counted)? Don’t look – just keep your eyes on the prize (i.e. the current “trade” on Wall Street) and walk on by.
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