The Dow Jones industrial average closed above 11,000 points on Monday for the first time since the start of the financial crisis.
The move above 11,000 was the latest milestone in a rally that has brought Wall Street back from the brink of economic collapse. It came as investors welcomed a long-awaited rescue plan for Greece and amid signs that American companies were poised to report strong first-quarter profit, with earnings season beginning in earnest this week.
The Dow ended the day at 11,006.19, rising about 9 points or 0.08 percent. It last closed about 11,000 in September 2008.
Index Close % Change
Dow 11005.97 +0.08
S&P 500 1196.48 +0.18
Nasdaq 2457.87 +0.16
Nasdaq 100 1995.65 +0.06
Russell 2000 705.05 +0.3
Sox Index 378.97 +0.85
Bank Index 55.97 +1.19
Dow Transports 4520.7 +0.29
Dow Utilities 386.14 +0.32
Nikkei 225 11251.9 +0.42
Gold - Front Month 1155.2 -0.58
Silver - Front Month 18.19 -0.88
Crude Oil 84.27 -0.77
Dollar Index 80.59 -0.36
Euro Spot 1.36 +0.64
Long Bond 20-year 116.22 +0.49
FOTM - Yen Spot 93.24 -0.06
4/12/2010 4:04 PM
poniedziałek, 12 kwietnia 2010
piątek, 9 kwietnia 2010
SPX Not Bearish
We're chugging along just fine.
I don't see anything bearish about the charts.
The breakout at SPX 1150 is similar to the one at SPX 950.
The target is SPX 1300.... then 1450, then 1600.... and eventually 3,000.
I don't see anything bearish about the charts.
The breakout at SPX 1150 is similar to the one at SPX 950.
The target is SPX 1300.... then 1450, then 1600.... and eventually 3,000.
Greek Banks: Problem Contained?
Overnight markets were weaker, especially in Europe, which was impacted by the nasty battle that has engulfed Greece. The country's interest rates continue to climb, as 2-year government debt now yields about 8.3%. Apparently, there's a good deal of difficulty within Greece's banking system, as the Lord of the Dark Matter noted in a couple of emails to me late yesterday:
"Yep. International banks cut off unsecured lending to Greek banks months ago, and some of them stopped anything other than overnight repo (secured) trades with Greek banks. Now even the overnight repo deals with Greek banks are being cut off. Basically the Greek private sector is being strangled to death when it comes to funding. If the ECB doesn't blink big time at their meeting tomorrow, then Greece could blow by the end of this week, causing significant ruptures in Europe."
Based on Trichet's comment this morning -- "that default not an issue for Greece" -- it doesn't appear as though the ECB has done much blinking, or that the ECB has broadened the collateral it accepts. Thus, it would appear, based on the Lord of the Dark Matter's vantage point, that things are liable to get quite ugly for the Greek banking system. Which will have knock-on effects for other banks in countries like Germany, for instance.
If You Can't Pay Your Union Dues Of course, the market will then turn its attention to other EU problem children. Greece, comprising roughly 2% of the euro community, isn't the problem -- it's the fear of future problems, i.e., the PII(G)S. Perhaps at some point, those countries (which probably should never have been in the euro to begin with) will be kicked out, and the euro will be a really strong piece of paper. Then again, maybe the ECB will blink, and it will be just like the dollar.
Due to all the moving parts in this exercise, it's not possible to know how it will turn out. But I think the entire world is realizing that paper currencies are problematic, as they continue to put a bid in the gold market -- thus breaking down the alleged correlations of markets that are supposed to "tell gold what to do."
As for the stock market, the early going saw a decline of about 0.5%, but by midafternoon the market was sporting a gain of 0.5%, before a late-day selloff trimmed the advances to what you see in the box scores.
Away from stocks, oil and the piggys were slightly lower, ditto the metals, along with the dollar.
In other currency-related news, the Chinese appear to be signaling that the yuan will be revalued higher in the not-too-distant future. Now obviously they didn't come out and say that, but to me their body language suggests that that will happen sometime in the next couple months. As to the ramifications, I really don't know, but the longer they indicate the move is coming before it actually occurs, the better-discounted it will be.
Index Close % Change
Dow 10927.07 +0.27
S&P 500 1186.44 +0.34
Nasdaq 2436.81 +0.23
Nasdaq 100 1980.73 +0.17
Russell 2000 699.63 +0.02
Sox Index 371.47 -1.44
Bank Index 55.06 +0.97
Dow Transports 4456.7 +1.38
Dow Utilities 382.65 -0.41
Nikkei 225 11168.2 -1.1
Gold - Front Month 1151.3 -0.15
Silver - Front Month 18.07 -0.74
Crude Oil 85.5 -0.44
Dollar Index 81.55 -0.08
Euro Spot 1.34 +0.04
Long Bond 20-year 115.47 -0.19
FOTM - Yen Spot 93.35 +0.01
4/8/2010 1:05:14 PM
"Yep. International banks cut off unsecured lending to Greek banks months ago, and some of them stopped anything other than overnight repo (secured) trades with Greek banks. Now even the overnight repo deals with Greek banks are being cut off. Basically the Greek private sector is being strangled to death when it comes to funding. If the ECB doesn't blink big time at their meeting tomorrow, then Greece could blow by the end of this week, causing significant ruptures in Europe."
Based on Trichet's comment this morning -- "that default not an issue for Greece" -- it doesn't appear as though the ECB has done much blinking, or that the ECB has broadened the collateral it accepts. Thus, it would appear, based on the Lord of the Dark Matter's vantage point, that things are liable to get quite ugly for the Greek banking system. Which will have knock-on effects for other banks in countries like Germany, for instance.
If You Can't Pay Your Union Dues Of course, the market will then turn its attention to other EU problem children. Greece, comprising roughly 2% of the euro community, isn't the problem -- it's the fear of future problems, i.e., the PII(G)S. Perhaps at some point, those countries (which probably should never have been in the euro to begin with) will be kicked out, and the euro will be a really strong piece of paper. Then again, maybe the ECB will blink, and it will be just like the dollar.
Due to all the moving parts in this exercise, it's not possible to know how it will turn out. But I think the entire world is realizing that paper currencies are problematic, as they continue to put a bid in the gold market -- thus breaking down the alleged correlations of markets that are supposed to "tell gold what to do."
As for the stock market, the early going saw a decline of about 0.5%, but by midafternoon the market was sporting a gain of 0.5%, before a late-day selloff trimmed the advances to what you see in the box scores.
Away from stocks, oil and the piggys were slightly lower, ditto the metals, along with the dollar.
In other currency-related news, the Chinese appear to be signaling that the yuan will be revalued higher in the not-too-distant future. Now obviously they didn't come out and say that, but to me their body language suggests that that will happen sometime in the next couple months. As to the ramifications, I really don't know, but the longer they indicate the move is coming before it actually occurs, the better-discounted it will be.
Index Close % Change
Dow 10927.07 +0.27
S&P 500 1186.44 +0.34
Nasdaq 2436.81 +0.23
Nasdaq 100 1980.73 +0.17
Russell 2000 699.63 +0.02
Sox Index 371.47 -1.44
Bank Index 55.06 +0.97
Dow Transports 4456.7 +1.38
Dow Utilities 382.65 -0.41
Nikkei 225 11168.2 -1.1
Gold - Front Month 1151.3 -0.15
Silver - Front Month 18.07 -0.74
Crude Oil 85.5 -0.44
Dollar Index 81.55 -0.08
Euro Spot 1.34 +0.04
Long Bond 20-year 115.47 -0.19
FOTM - Yen Spot 93.35 +0.01
4/8/2010 1:05:14 PM
środa, 7 kwietnia 2010
Stocks finish with losses
NEW YORK (CNNMoney.com) -- Stocks tumbled Wednesday following a report that consumer borrowing fell and General Motors said it lost billions of dollars during the second half of 2009.
The Dow Jones industrial average (INDU) lost 72 points, or about 0.7%, to end at 10,897.52. The S&P 500 index (SPX) fell 7 points, or 0.6% to 1,182.44. The Nasdaq composite (COMP) also fell 6 points, or 0.2% to 2,431.16.
The blue-chip Dow has bumped against the important mark lately. On Monday, the index rose to within 11 points of 11,000. The Dow last closed above that level on Sept. 26, 2008.
Trading on Wall Street was muted Tuesday, but the Nasdaq and S&P 500 edged higher to finish at 1-1/2 year highs.
"With such a strong runup, you're going to hit resistance eventually," said Alan Lancz, president at Alan B. Lancz & Associates. "The market needs a catalyst to get investors to buy at these levels."
Lancz said it would be difficult to break barriers at the 11,000 mark on the blue-chip Dow index and 1,200 for the S&P.
Companies: Shortly after the start of trade, General Motors posted a $4.3 billion loss for the July-December period of 2009, during which the company emerged from bankruptcy protection.
In its annual report released Wednesday, Goldman Sachs (GS, Fortune 500) defended employee bonuses and its multi-billion dollar relationship with AIG (AIG, Fortune 500) while downplaying its short-selling in the mortgage market.
The market is in a "wait-and-see" pattern, Lancz said, as investors look ahead to next week and the quarterly corporate results season.
Earnings reports have been generally upbeat recently, and the trend is still upward, but Lancz said he worries about upcoming quarters.
"Later in 2010, year-over-year comparisons will be difficult," Lancz explained. "We'll also have the headwinds of increased interest rates, and higher commodities costs. I think that's going to slow further progress."
Economy: With one hour left in the session, the Federal Reserve reported consumer credit fell at an annual rate of 5.6% in February to $2.448 trillion, after increasing for the first time in a year during the previous month.
That was much worse than expected, as analysts expected a drop of only $0.7 billion. The Dow fell more than 122 points immediately following the report's release then pared losses ahead of the market's close.
"That is definitely disappointing, as it shows a lack of confidence in buying," Lancz said. "Investors are going to be jumpy on any kind of negative data."
Lingering concerns about the debt woes brewing in Europe also weighed on stocks, Lancz said. Greece denied reports Tuesday that it was uncomfortable with accepting assistance from the International Monetary Fund.
The Financial Crisis Inquiry Commission began a three-day hearing, focusing on the causes behind the mortgage meltdown. Former Fed Chief Alan Greenspan testified at Wednesday's hearing, saying that while steps can be taken to limit the impact of another shock, regulators can't fully prevent another crisis from happening.
Outlook: Dave Hinnenkamp, chief executive of KDV Wealth Management, said mixed economic reports have left investors a bit nervous.
"Overall, depending on what you look at, there's good news and bad news," Hinnenkamp said. "But if you look at corporate balance sheets, companies are sitting on a lot of cash as they wait for recovery. That bodes well for down the road."
Beyond corporate earnings and the unemployment rate, investors are also looking at the impact of winding down federal purchase programs, Hinnenkamp said. Last week, the Federal Reserve stopped buying securities backed by pools of mortgages.
World markets: Britain's FTSE 100, France's CAC 40 and Germany's DAX all ended slightly lower.
In Asia, markets ended mixed. the Hang Seng in Hong Kong climbed 1.8%, and Japan's Nikkei posted slight gains. Shares in China, however, slipped 0.3%.
Other markets: U.S. Treasurys rose, with the yield on the benchmark 10-year note falling to 3.63%. Bond prices and yields move in opposite directions.
Earlier this week, the yield topped 4% for the first time in 18 months amid optimism about the economic recovery. Wednesday's auction of 10-year notes was part of an $82 billion offering this week of U.S. debt.
Oil prices dipped, with crude for May delivery settling down 96 cents to $85.88 a barrel. The government's weekly oil inventories report said crude oil supplies rose about 1.1 million barrels last week.
COMEX gold for June delivery settled at $1,153 an ounce, up $17 from the previous day.
The dollar managed gains against the euro and British pound, but it slipped against the yen.
Index Close % Change
Dow 10897.52 -0.66
S&P 500 1182.45 -0.59
Nasdaq 2431.16 -0.23
Nasdaq 100 1977.3 -0.23
Russell 2000 699.45 -0.29
Sox Index 376.89 +0.36
Bank Index 54.53 -0.38
Dow Transports 4395.99 -0.8
Dow Utilities 384.21 -0.9
Nikkei 225 11292.83 +0.09
Gold - Front Month 1149.6 +1.2
Silver - Front Month 18.15 +1.22
Crude Oil 85.72 -1.29
Dollar Index 81.56 +0.21
Euro Spot 1.34 -0.33
Long Bond 20-year 115.59 +1.04
FOTM - Yen Spot 93.33 +0.49
4/7/2010 4:05 PM
The Dow Jones industrial average (INDU) lost 72 points, or about 0.7%, to end at 10,897.52. The S&P 500 index (SPX) fell 7 points, or 0.6% to 1,182.44. The Nasdaq composite (COMP) also fell 6 points, or 0.2% to 2,431.16.
The blue-chip Dow has bumped against the important mark lately. On Monday, the index rose to within 11 points of 11,000. The Dow last closed above that level on Sept. 26, 2008.
Trading on Wall Street was muted Tuesday, but the Nasdaq and S&P 500 edged higher to finish at 1-1/2 year highs.
"With such a strong runup, you're going to hit resistance eventually," said Alan Lancz, president at Alan B. Lancz & Associates. "The market needs a catalyst to get investors to buy at these levels."
Lancz said it would be difficult to break barriers at the 11,000 mark on the blue-chip Dow index and 1,200 for the S&P.
Companies: Shortly after the start of trade, General Motors posted a $4.3 billion loss for the July-December period of 2009, during which the company emerged from bankruptcy protection.
In its annual report released Wednesday, Goldman Sachs (GS, Fortune 500) defended employee bonuses and its multi-billion dollar relationship with AIG (AIG, Fortune 500) while downplaying its short-selling in the mortgage market.
The market is in a "wait-and-see" pattern, Lancz said, as investors look ahead to next week and the quarterly corporate results season.
Earnings reports have been generally upbeat recently, and the trend is still upward, but Lancz said he worries about upcoming quarters.
"Later in 2010, year-over-year comparisons will be difficult," Lancz explained. "We'll also have the headwinds of increased interest rates, and higher commodities costs. I think that's going to slow further progress."
Economy: With one hour left in the session, the Federal Reserve reported consumer credit fell at an annual rate of 5.6% in February to $2.448 trillion, after increasing for the first time in a year during the previous month.
That was much worse than expected, as analysts expected a drop of only $0.7 billion. The Dow fell more than 122 points immediately following the report's release then pared losses ahead of the market's close.
"That is definitely disappointing, as it shows a lack of confidence in buying," Lancz said. "Investors are going to be jumpy on any kind of negative data."
Lingering concerns about the debt woes brewing in Europe also weighed on stocks, Lancz said. Greece denied reports Tuesday that it was uncomfortable with accepting assistance from the International Monetary Fund.
The Financial Crisis Inquiry Commission began a three-day hearing, focusing on the causes behind the mortgage meltdown. Former Fed Chief Alan Greenspan testified at Wednesday's hearing, saying that while steps can be taken to limit the impact of another shock, regulators can't fully prevent another crisis from happening.
Outlook: Dave Hinnenkamp, chief executive of KDV Wealth Management, said mixed economic reports have left investors a bit nervous.
"Overall, depending on what you look at, there's good news and bad news," Hinnenkamp said. "But if you look at corporate balance sheets, companies are sitting on a lot of cash as they wait for recovery. That bodes well for down the road."
Beyond corporate earnings and the unemployment rate, investors are also looking at the impact of winding down federal purchase programs, Hinnenkamp said. Last week, the Federal Reserve stopped buying securities backed by pools of mortgages.
World markets: Britain's FTSE 100, France's CAC 40 and Germany's DAX all ended slightly lower.
In Asia, markets ended mixed. the Hang Seng in Hong Kong climbed 1.8%, and Japan's Nikkei posted slight gains. Shares in China, however, slipped 0.3%.
Other markets: U.S. Treasurys rose, with the yield on the benchmark 10-year note falling to 3.63%. Bond prices and yields move in opposite directions.
Earlier this week, the yield topped 4% for the first time in 18 months amid optimism about the economic recovery. Wednesday's auction of 10-year notes was part of an $82 billion offering this week of U.S. debt.
Oil prices dipped, with crude for May delivery settling down 96 cents to $85.88 a barrel. The government's weekly oil inventories report said crude oil supplies rose about 1.1 million barrels last week.
COMEX gold for June delivery settled at $1,153 an ounce, up $17 from the previous day.
The dollar managed gains against the euro and British pound, but it slipped against the yen.
Index Close % Change
Dow 10897.52 -0.66
S&P 500 1182.45 -0.59
Nasdaq 2431.16 -0.23
Nasdaq 100 1977.3 -0.23
Russell 2000 699.45 -0.29
Sox Index 376.89 +0.36
Bank Index 54.53 -0.38
Dow Transports 4395.99 -0.8
Dow Utilities 384.21 -0.9
Nikkei 225 11292.83 +0.09
Gold - Front Month 1149.6 +1.2
Silver - Front Month 18.15 +1.22
Crude Oil 85.72 -1.29
Dollar Index 81.56 +0.21
Euro Spot 1.34 -0.33
Long Bond 20-year 115.59 +1.04
FOTM - Yen Spot 93.33 +0.49
4/7/2010 4:05 PM
Salesforce Breaks Out
CRM is one my favorite secular growth technology plays.
It looks like many companies are increasingly getting more comfortable with cloud computing.
CRM was upgraded this morning to $100.
Could this company be the next Oracle? Well, I think they have a decent shot.
It looks like many companies are increasingly getting more comfortable with cloud computing.
CRM was upgraded this morning to $100.
Could this company be the next Oracle? Well, I think they have a decent shot.
Plug MPG into the system
I recommended using a small amount of cash on a small cap stock.
Here is a decent stock to try: Maguire Properties (MPG).
With the economy turning around and the housing market stabilizing, the commercial property market should bounce back.
If the company doesn't go belly up, the stock is headed to $12-15.
Here is a decent stock to try: Maguire Properties (MPG).
With the economy turning around and the housing market stabilizing, the commercial property market should bounce back.
If the company doesn't go belly up, the stock is headed to $12-15.
Indeksy on Tuesday
Index Close % Change
Dow 10969.99 -0.03
S&P 500 1189.44 +0.17
Nasdaq 2436.81 +0.3
Nasdaq 100 1981.95 +0.21
Russell 2000 701.45 +0.54
Sox Index 375.52 -0.62
Bank Index 54.74 +2.43
Dow Transports 4431.42 +0.36
Dow Utilities 387.68 +0.72
Nikkei 225 11282.32 -0.5
Gold - Front Month 1135.3 +0.13
Silver - Front Month 17.98 -0.73
Crude Oil 86.75 +0.15
Dollar Index 81.33 +0.29
Euro Spot 1.34 -0.59
Long Bond 20-year 114.56 +0.16
FOTM - Yen Spot 93.73 +0.68
4/6/2010 4:05 PM
Dow 10969.99 -0.03
S&P 500 1189.44 +0.17
Nasdaq 2436.81 +0.3
Nasdaq 100 1981.95 +0.21
Russell 2000 701.45 +0.54
Sox Index 375.52 -0.62
Bank Index 54.74 +2.43
Dow Transports 4431.42 +0.36
Dow Utilities 387.68 +0.72
Nikkei 225 11282.32 -0.5
Gold - Front Month 1135.3 +0.13
Silver - Front Month 17.98 -0.73
Crude Oil 86.75 +0.15
Dollar Index 81.33 +0.29
Euro Spot 1.34 -0.59
Long Bond 20-year 114.56 +0.16
FOTM - Yen Spot 93.73 +0.68
4/6/2010 4:05 PM
poniedziałek, 5 kwietnia 2010
Get Ready: Tomorrow May Bring The End Of The Fed's Famous "Exceptionally And Extended" Language
Fresh Fed minutes are coming out tomorrow, and for the first time in a while, Bernanke may not simply cut & paste what he wrote last time.
Tomorrow the FOMC minutes from the March 16th meeting will be released. At the time of that meeting, we noted we expected now to be an appropriate time for the Fed to begin to lay the groundwork to change the “exceptionally and extended” language. In doing so, it will put the FOMC in a position to make a formal language change at this month’s meeting on April 28th. In altering the language, the FOMC will still not be expected to tighten monetary policy until October or November at the earliest. As economic data improves, if the members want to leave themselves the room to move in 2010 if necessary, the language will need to change soon. A very first gradual shift may have already occurred. Last Thursday, New York Fed President and FOMC Vice Chair Bill Dudley invoked the “exceptionally and extended” language in reference to the March minutes, but more importantly, he referred to the recovery as sustainable. “We have been very aggressive in providing support to the economy, and it now appears that a sustainable recovery is underway.” Dudley is squarely in the dove camp, and is quick to rattle off the litany of headwinds to the recovery. Therefore, such a notable statement could signal this early transition is occurring. We will be looking to tomorrow’s release for additional signs.
If this happens, there's a good chance the dollar will go nuts.Another reason to think Bernanke will get in the raising mood soon: All those industrial commodities going nuts >
Tomorrow the FOMC minutes from the March 16th meeting will be released. At the time of that meeting, we noted we expected now to be an appropriate time for the Fed to begin to lay the groundwork to change the “exceptionally and extended” language. In doing so, it will put the FOMC in a position to make a formal language change at this month’s meeting on April 28th. In altering the language, the FOMC will still not be expected to tighten monetary policy until October or November at the earliest. As economic data improves, if the members want to leave themselves the room to move in 2010 if necessary, the language will need to change soon. A very first gradual shift may have already occurred. Last Thursday, New York Fed President and FOMC Vice Chair Bill Dudley invoked the “exceptionally and extended” language in reference to the March minutes, but more importantly, he referred to the recovery as sustainable. “We have been very aggressive in providing support to the economy, and it now appears that a sustainable recovery is underway.” Dudley is squarely in the dove camp, and is quick to rattle off the litany of headwinds to the recovery. Therefore, such a notable statement could signal this early transition is occurring. We will be looking to tomorrow’s release for additional signs.
If this happens, there's a good chance the dollar will go nuts.Another reason to think Bernanke will get in the raising mood soon: All those industrial commodities going nuts >
WSJ: Inflation, Don't Worry, Be Happy
For once, the market's response to the nonfarm payroll number was exactly as it should have been, i.e., nothing happened. (Of course, that was because the market was closed.) Given its noise level and the regular revisions, far too much is made out of this particular statistic, and why it's such a favorite speculative catalyst I do not know. Thankfully (at least last Friday), the markets weren't roiled by what is essentially a nonevent.
There was absolutely nothing surprising in the data, as it was about as expected. On the other hand, beneath the surface the growth in jobs was less than expected: About one third came from census workers, another half contributed by the birth/death model, and only the remaining from actual job creation.
Turning to today's action, by midday the S&P and the Nasdaq had gained about 1% and the Dow about half that. From there the indices drifted sideways for the rest of the day.
Away from stocks, the piggys were weaker once again (as they're in desperate need of some QE from Bennie). The dollar was mixed. Oil gained 2%. The metals gained 1%.
Yellen: Barking Up the Wrong Tree
Regular readers know my view about inflation, and today the Wall Street Journal took pains to let us know why we needn't worry (which I'll get to in a minute). But first, in a column headlined "Inflation Fears Cut Two Ways at the Fed," Jon Hilsenrath explains a particular mindset:
"The Federal Reserve's decisions to keep interest rates near zero and to flood the financial system with credit are sparking fears of an eventual outbreak of inflation. But inside the Fed, an influential [my emphasis] band of policymakers is fretting over the opposite: that the already-low rate of inflation is slowing further." One Fed head who champions that view, Janet Yellen, is quoted as follows: "Underlying inflation pressures are already very low and trending downward."
This is what the Fed really thinks, in my opinion, regardless of its slightly more hawkish rhetoric occasionally. Bennie has one goal: He is committed to not making the mistakes he feels the Fed made in 1937-38, when he claims it tightened too soon and sent America back into depression. (He doesn't really understand the root cause of the Great Depression, but that isn't today's topic.) Thus, I believe that at some point he will feel compelled to try to stop the rise in interest rates -- being caused by an out-of-control Federal government budget deficit -- and ride to the rescue in some version of QE.
Hush-a-Bye, Don't You Cry About the CPI
The Journal's main story was aimed at letting folks know why they needn't worry: "Consumers Not Likely to Feel Commodity Costs Rise." Even though the paper notes that the prices of many commodities are heading higher, it adds that "little if any of this will filter through to the consumer in the form of higher prices for things such as cars and dishwashers." Their line of reasoning: We just aren't going to see higher prices because the raw materials component is so small and because demand is too weak. They believe that there is just too much excess capacity or "slack," as they call it. Therefore, any price increases will just be eaten by businesses.
While some businesses may be willing to absorb a portion of the price hikes for a little while, that won't last long. In fact, we're starting to see this in far too many areas. In Ask Fleck today, a longtime businessman within the hardwood industry notes that prices have leapt dramatically in the last year. One of the reasons why prices are being pushed higher is because so many mills have gone out of business. So, when moneyprinting meets industries that have been hammered, price increases do result.
I don't know when inflation will show up in the CPI, as I pointed out in my book, because it's so badly skewed by statistical manipulation, via hedonics and substitution. But an increase in inflation is coming our way. I think you can take that to the bank.
Index Close % Change
Dow 10973.55 +0.43
S&P 500 1187.44 +0.79
Nasdaq 2429.53 +1.12
Nasdaq 100 1977.83 +0.93
Russell 2000 697.65 +2
Sox Index 377.86 +2.98
Bank Index 53.44 +1.91
Dow Transports 4415.41 +0.52
Dow Utilities 384.92 +0.5
Nikkei 225 11339.3 +0.47
Gold - Front Month 1132.1 +0.53
Silver - Front Month 18.1 +1.2
Crude Oil 86.72 +2.18
Dollar Index 81.13 -0.06
Euro Spot 1.35 -0.19
Long Bond 20-year 114.38 -0.44
FOTM - Yen Spot 94.32 +0.31
4/5/2010 4:10 PM
There was absolutely nothing surprising in the data, as it was about as expected. On the other hand, beneath the surface the growth in jobs was less than expected: About one third came from census workers, another half contributed by the birth/death model, and only the remaining from actual job creation.
Turning to today's action, by midday the S&P and the Nasdaq had gained about 1% and the Dow about half that. From there the indices drifted sideways for the rest of the day.
Away from stocks, the piggys were weaker once again (as they're in desperate need of some QE from Bennie). The dollar was mixed. Oil gained 2%. The metals gained 1%.
Yellen: Barking Up the Wrong Tree
Regular readers know my view about inflation, and today the Wall Street Journal took pains to let us know why we needn't worry (which I'll get to in a minute). But first, in a column headlined "Inflation Fears Cut Two Ways at the Fed," Jon Hilsenrath explains a particular mindset:
"The Federal Reserve's decisions to keep interest rates near zero and to flood the financial system with credit are sparking fears of an eventual outbreak of inflation. But inside the Fed, an influential [my emphasis] band of policymakers is fretting over the opposite: that the already-low rate of inflation is slowing further." One Fed head who champions that view, Janet Yellen, is quoted as follows: "Underlying inflation pressures are already very low and trending downward."
This is what the Fed really thinks, in my opinion, regardless of its slightly more hawkish rhetoric occasionally. Bennie has one goal: He is committed to not making the mistakes he feels the Fed made in 1937-38, when he claims it tightened too soon and sent America back into depression. (He doesn't really understand the root cause of the Great Depression, but that isn't today's topic.) Thus, I believe that at some point he will feel compelled to try to stop the rise in interest rates -- being caused by an out-of-control Federal government budget deficit -- and ride to the rescue in some version of QE.
Hush-a-Bye, Don't You Cry About the CPI
The Journal's main story was aimed at letting folks know why they needn't worry: "Consumers Not Likely to Feel Commodity Costs Rise." Even though the paper notes that the prices of many commodities are heading higher, it adds that "little if any of this will filter through to the consumer in the form of higher prices for things such as cars and dishwashers." Their line of reasoning: We just aren't going to see higher prices because the raw materials component is so small and because demand is too weak. They believe that there is just too much excess capacity or "slack," as they call it. Therefore, any price increases will just be eaten by businesses.
While some businesses may be willing to absorb a portion of the price hikes for a little while, that won't last long. In fact, we're starting to see this in far too many areas. In Ask Fleck today, a longtime businessman within the hardwood industry notes that prices have leapt dramatically in the last year. One of the reasons why prices are being pushed higher is because so many mills have gone out of business. So, when moneyprinting meets industries that have been hammered, price increases do result.
I don't know when inflation will show up in the CPI, as I pointed out in my book, because it's so badly skewed by statistical manipulation, via hedonics and substitution. But an increase in inflation is coming our way. I think you can take that to the bank.
Index Close % Change
Dow 10973.55 +0.43
S&P 500 1187.44 +0.79
Nasdaq 2429.53 +1.12
Nasdaq 100 1977.83 +0.93
Russell 2000 697.65 +2
Sox Index 377.86 +2.98
Bank Index 53.44 +1.91
Dow Transports 4415.41 +0.52
Dow Utilities 384.92 +0.5
Nikkei 225 11339.3 +0.47
Gold - Front Month 1132.1 +0.53
Silver - Front Month 18.1 +1.2
Crude Oil 86.72 +2.18
Dollar Index 81.13 -0.06
Euro Spot 1.35 -0.19
Long Bond 20-year 114.38 -0.44
FOTM - Yen Spot 94.32 +0.31
4/5/2010 4:10 PM
Time to pick up some trash
Almost time to back up the truck on RSG, a waste management company that is growing at a quick pace.
Both Bill Gates and Warren Buffett own shares.
And here's a cup-and-handle (or inverted head-and-shoulders if you prefer) ready to breakout:
Both Bill Gates and Warren Buffett own shares.
And here's a cup-and-handle (or inverted head-and-shoulders if you prefer) ready to breakout:
niedziela, 4 kwietnia 2010
Poor RIMM set for reaming?
I dunno how RIMM is going to be able to defend its market position in the future, especially when the iPhone, and recently the Google Android phones, is gaining market share.
And who wants a physical keyboard anyway?
I got news for RIMM -- nobody wants a micro keyboard on a smartphone!
Once you go touchscreen, you never go back.
In the smartphone space, there will likely be only one to two eventual winners, and the rest will slowly bleed to death.
Right now, it seems like the momentum lies with the iPhone and the Androids.
Unfortunately for RIMM, I think it'll stay that way for a long time.
The Technology That Will Replace 148 Billion Barrels of Oil
Most investors didn’t notice when, in September 2008, Warren Buffet paid $230 million for a 10% stake in Hong Kong-based battery maker BYD Co. Ltd. (HKSE:1211.HK).
Now, of course, we all wish we’d been paying attention…
In the 18 months since, BYD share price has increased by upwards of 900%, from $8.01 before the announcement to $75.05 today. And the value of the investing icon’s portion of shares increased to $2 billion.
But Buffet’s interest in this little-known Chinese stock isn’t the main story here. He simply helped to focus a beam of light onto an industry that could serve as a major profit play for years to come.
The real story is a technology market that’s heating up in a big way: batteries. The market for rechargeable batteries alone is expected to zoom to $51 billion by 2013.
And yet the battery gets far less attention than solar and wind power, its higher-profile (but less technologically advanced) cousins.
Modern battery technology is the keystone of the global push to find an energy alternative to oil. In fact, one specific new category of rechargeable batteries is a breakthrough technology with the potential to replace as much as 148 billion barrels of oil over the next 50 years, a savings of $10.4 trillion – even at current prices.
And as supplies diminish, we’re certain to see oil prices blast well above the current level of $82.08 a barrel.
What these numbers don’t tell you is that there’s a powerful catalyst at work, one that’s behind the big push to achieve energy independence: the electric – or “hybrid” – car.
Billions Bet on “Third Element” Technology
The July 2008 record oil price of $147 a barrel served as a wake-up call for the car-driving consumer. But it was also the jolt that shifted the plug-in-auto industry into high gear.
In response to surging oil prices, U.S. President Barack Obama promised to invest at least $150 billion into alternative energy during his term of office. And a big chunk of the $787 billion stimulus bill will finance development of new, rechargeable battery technology for Plug-in Hybrid Electric Vehicles (PHEVs).
The technology in question is lithium-ion.
Sometimes referred to as the “Third Element” – because of its No. 3 position on the Periodic Table of Elements – lithium is the lightest metal in existence. Scientists believe it was one of the few elements synthesized in the “Big Bang” that created the universe.
Lithium carbonate is a very refined form that packs four times the energy punch of lead-acid batteries and twice that of nickel-metal hydride batteries. Until recently, it was a minor commodity used mostly in glass and mood-stabilizing drugs.
But not anymore.
Now it’s a key ingredient of the new class of rechargeable batteries needed to jump-start the plug-in car market. The other ingredient, of course, is capital.
President Obama’s American Reinvestment and Recovery Act allocates $2 billion to the development of battery systems, components and software for advanced lithium-ion batteries and for hybrid electric systems. Another $300 million will support a pilot program for Alternative Fueled Vehicles.
And that’s just a down payment.
The $25 billion Advanced Technology Vehicles Manufacturing Loan Program will make sure the industry itself continues to develop.
While these allocations will nurture the development of lithium-ion technologies, other programs will make the hybrid-vehicle market bloom.
You see, hybrid and electric vehicles currently cost more than gas-guzzlers, due to expensive and heavy batteries and multiple engines.
So starting this year, U.S. buyers of commercial PHEVs are eligible for a federal tax credit of up to $7,500, plus a separate $2,000 credit for installing a home charging unit.
There’s growing investment at the state level, too: The California Air Resources Board just announced $3.7 million in rebates for buyers of zero-emissions and hybrid auto purchasers.
That should help cut down fears about affordability... and just in time, too.
According to a report by Pike Research, the lithium-ion transportation battery industry will grow from $878 million in 2010 to nearly $8 billion by 2015.
Automakers have seized lithium-ion battery technology as the road to the future. Right now, nearly every automaker on the planet is gearing up to flood the market with some form of electric-powered car:
• Daimler AG (NYSE:DAI) launched a hybrid version of its S-Class sedan last year, and the entire Mercedes lineup soon will be available in hybrid. Daimler is teaming up with BYD to develop electric cars for the flourishing Chinese market.
• Nissan Motor Co. Ltd. (OTC:NSANY) retooled its Smyrna, Tennessee, factory to produce pure electric vehicles. Nissan expects to sell as many as 50,000 units of the hybrid 2010 Altima in its first year. But what’s got everyone talking is the Nissan Leaf, its first lithium-ion car. The hatchback will debut later this year in Japan, Europe, and the U.S.
• Ford Motor Co. (NYSE:F) is rolling out the all-electric Transit Connect commercial fleet van in 2010 and plans to invest $550 million to retool a Michigan truck plant to manufacture an electric Focus in 2011.
• General Motors Co. (OTC:MTLQQ) is counting on lithium-ion batteries to power the Chevy Volt, its revolutionary and much-hyped PHEV, set to debut in November 2010. The vehicle will cost about $40,000.
• Toyota Motor Corp. (NYSE:TM) plans to begin retailing a lithium-ion powered plug-in Prius in late 2011 and a short-distance all-electric car in 2010.
• Mitsubishi Motors Corp. (TYO:7211) has been developing EV technology since the 1970s. Its environmental-award-winning i-MiEV will be available in April for about $51,000.
• Honda Motor Co. Ltd. (NYSE:HMC) just announced plans to introduce a lithium-ion powered hybrid Civic within the next several years, as well as Acura luxury cars and other models. February 2010 sales of the Honda Insight and Civic Hybrid increased 54% and 37% over the previous month.
• Even Volkswagen AG (VOW.DE), which has stayed out of electric vehicles, plans to convert 3% of sales by 2018.
A Global Power (and Profit) Play
For further confirmation that PHEVs are more than just a passing fad, look at the dozens of governments across the globe pouring massive amounts of capital into related markets.
The British government just stated it will extend $581 million of grants and loan guarantees to Ford and Nissan for green auto plants and operations in Britain. Not to mention cash payments to consumers to offset the relatively high price of electric vehicles.
In France, Renault is partnering with a utility company to build a nationwide network of automobile charging stations. The French government pledged to contribute 400 million euros to the project.
Even the Middle East is getting involved. Aabar Investments PJSC, an investment company wholly owned by the Abu Dhabi government, recently became the largest shareholder in Daimler AG. With Abu Dhabi Water and Electric Authority, it plans to set up charging points for electric-powered cars.
And here’s the real kicker: Aabar Investments is using Abu Dhabi oil revenue to finance its foray into lithium-ion battery technologies.
Worldwide demand for batteries of all types – both standard and rechargeable – is projected to advance at roughly a 7% annual clip through 2010, reaching $73.6 billion, according to a study published by market research firm The Freedonia Group.
The “World Batteries” study, not surprisingly, predicts that China will post the largest gains, while also expecting strong sales increases in India, Indonesia, South Korea, Poland, South Africa, Brazil, and Russia.
But it’s the China market that promises to put a real charge into the global battery business.
On the home front, Beijing is pushing its assault on battery power through its “20% by 2020” campaign – in 10 years, 20% of China’s power needs will be served by renewable-energy technologies.
From a global standpoint, China is using its big advantage in labor costs to establish a leadership position in the worldwide battery market. It already has more than 50 factories cranking out product.
It’s an aggressive plan, to be sure, but it’s also cohesive and complete. And Beijing has the cash to make it happen.
By Horacio Marquez
Editor, Money Map Report
The 10 Best And Worst Regarded U.S. Companies
BOSTON (Reuters) - These are the 10 most admired U.S. companies, according to a Harris Interactive Inc survey of 29,963 people conducted from Dec. 29 though Feb. 15. The survey considers the 60 best-known companies:
MOST ADMIRED: prior rank
1. Berkshire Hathaway Inc 11
2. Johnson & Johnson 1
3. Google Inc 2
4. 3M Co 9
5. SC Johnson & Son Inc n/a
6. Intel Corp n/a
7. Microsoft Corp 7
8. Coca-Cola Co 4
9. Amazon.com Inc 6
10. General Mills Inc 8
LEAST ADMIRED:
1. Freddie Mac n/a
2. American International Group Inc 1
3. Fannie Mae n/a
4. Citigroup Inc 6
5. Goldman Sachs Group Inc n/a
6. Chrysler 4
7. General Motors 3
8. JPMorgan Chase 12
9. Bank of America Corp 14
10. Delta Air Lines Inc n/a
n/a = Company not rank among 60 most visible U.S. companies in last edition of survey
MOST ADMIRED: prior rank
1. Berkshire Hathaway Inc 11
2. Johnson & Johnson 1
3. Google Inc 2
4. 3M Co 9
5. SC Johnson & Son Inc n/a
6. Intel Corp n/a
7. Microsoft Corp 7
8. Coca-Cola Co 4
9. Amazon.com Inc 6
10. General Mills Inc 8
LEAST ADMIRED:
1. Freddie Mac n/a
2. American International Group Inc 1
3. Fannie Mae n/a
4. Citigroup Inc 6
5. Goldman Sachs Group Inc n/a
6. Chrysler 4
7. General Motors 3
8. JPMorgan Chase 12
9. Bank of America Corp 14
10. Delta Air Lines Inc n/a
n/a = Company not rank among 60 most visible U.S. companies in last edition of survey
sobota, 3 kwietnia 2010
The Luckiest Day Of My Life
Warren Buffett says that one of the luckiest days of his life was when he was 19-years-old and happened to have picked up Benjamin Graham's book, The Intelligent Investor.
That book changed his investment philosophy and his whole life. He says that had it not been for the book, he would've been a different person at a different place.
That book changed his investment philosophy and his whole life. He says that had it not been for the book, he would've been a different person at a different place.
Jobs turning the corner
So we have 162,000 jobs added in March.
Ain't that something?
Just when the bears are grasping for their last straw, the jobs number gives them another smackdown!
WASHINGTON (AP) -- The nation added jobs at the fastest pace in three years last month as factories, stores, hospitals and the census all brought workers on board -- the surest sign yet that the worst employment market in a generation has finally snapped back.
The unemployment rate stayed at 9.7 percent for the third month in a row, the Labor Department said Friday. Economists actually consider that a hopeful sign because it means more people are encouraged and starting to look for work.
"This recovery is for real," said Chris Rupkey, economist at the Bank of Tokyo-Mitsubishi.
Ain't that something?
Just when the bears are grasping for their last straw, the jobs number gives them another smackdown!
WASHINGTON (AP) -- The nation added jobs at the fastest pace in three years last month as factories, stores, hospitals and the census all brought workers on board -- the surest sign yet that the worst employment market in a generation has finally snapped back.
The unemployment rate stayed at 9.7 percent for the third month in a row, the Labor Department said Friday. Economists actually consider that a hopeful sign because it means more people are encouraged and starting to look for work.
"This recovery is for real," said Chris Rupkey, economist at the Bank of Tokyo-Mitsubishi.
piątek, 2 kwietnia 2010
RIMM Versus GOOG + AAPL
The land of Oz last night provided some fireworks for those of us who care about the goldmining sector when Newcrest made a hostile bid for Lihir Gold at a better-than 25% premium to the price it closed at the day before. (For what it's worth, PAAS paid over a 40% premium to acquire Aquiline.) Lihir rejected it and saw its stock price close about 4% higher than the Newcrest bid price.
I think that this is a harbinger of many more deals. That, as companies continue to turn to acquisitions because it's often a cheaper way to increase their reserves -- since it's so darned hard (and expensive) to find new deposits.
Continuing around the globe, I note that China was higher last night and has managed to climb back over its 200-day moving average. From an elementary technical basis, that market may be inclined to thwart the bubble bears, at least for the time being. Meantime, Europe was firmer last night as well, as were the Spooz, and in less than half an hour's time the indices had gained 1%, plus or minus, across the board.
Familiar Soundtrack from the Boise Boys
Turning to two corporate-earnings announcements that I was interested in, Micron indeed was successful at beat-the-number and the company waxed poetically as they made 38 cents vs. expectations of about 23 cents. And, the company did its usual shtick regarding how tight the DRAM market was going to be, etc., etc.
RIMM was unsuccessful at beat-the-number. It looks like they had to pull a few levers even to get to the number they reported. Revenues and earnings were on the light side, though margins expanded. Which led me to conclude that perhaps some reserves were reversed out and also confirmed my suspicions regarding last quarter, that they stuffed the channel to get to those numbers. They did manage to keep the guidance more or less in line, but I think that might prove to be a bridge too far this quarter.
Serial-Miss Mode
RIMM has been missing numbers on a regular basis and I believe that they're about to go into serial-miss mode. But for the most part, the dead-fish community drooled all over itself to try to rationalize the troubles for the quarter just reported as some sort of one-off problem, which of course it is not. The battle now shapes up as RIMM versus GOOG + AAPL -- which side would you like to bet on?
Turning back to the tape, the early afternoon saw sellers get the upper hand, and with 30 minutes to go the gains had mostly evaporated. But a late-day rally rescued the session, with the S&P gaining about 0.6% (though the Nasdaq was flattish).
On Jobs Data, Some Traders Will Hit Payday
Away from stocks, the piggys were heavy. Oil was higher. The dollar was weak, presumably as folks squared their positions in front of the holiday weekend and tomorrow's nonfarm payroll number. Dollar bulls have conjured up some pretty big estimates, and with the combination of weather, birth/death adjustments, and census workers, tomorrow's number will have a lot of moving parts.
But I find it interesting that the Liscio Report expects a print of just 95,000 workers, with 75,000 contributed by the census department. (For those who don't know, almost nobody is better on the small details of the economy than they are.) In any case, if their numbers are accurate, that will likely have ramifications in the FX market (and perhaps the metals market).
Today saw the metals higher as silver tacked on 2% to gold's 1%. Even gold stocks got into the act. Maybe the Newcrest bid will cause people to question their negative views on gold stocks generically. (The Rydex data I cited yesterday was incorrect. Rydex made the following fix to its own graph after I'd looked at it: Gold-stock assets are at a low level, but not below where they were during the fall of 2008.)
Lastly, in the inflation-watch department: While today's ISM survey beat the number (59.6 vs. expectations of 57), the prices-paid component really "crushed the number" (75 vs. 67.).
Index Close % Change
Dow 10927.07 +0.65
S&P 500 1178.1 +0.74
Nasdaq 2402.58 +0.19
Nasdaq 100 1959.56 +0.06
Russell 2000 683.98 +0.79
Sox Index 366.93 +0.1
Bank Index 52.44 +0.85
Dow Transports 4392.48 +0.41
Dow Utilities 383.02 +1.11
Nikkei 225 11244.4 +1.39
Gold - Front Month 1126.5 +1.08
Silver - Front Month 17.9 +2.11
Crude Oil 85.08 +1.58
Dollar Index 80.72 -0.44
Euro Spot 1.36 +0.56
Long Bond 20-year 115.88 -0.22
FOTM - Yen Spot 93.88 -0.44
4/1/2010 1:19:26 PM
I think that this is a harbinger of many more deals. That, as companies continue to turn to acquisitions because it's often a cheaper way to increase their reserves -- since it's so darned hard (and expensive) to find new deposits.
Continuing around the globe, I note that China was higher last night and has managed to climb back over its 200-day moving average. From an elementary technical basis, that market may be inclined to thwart the bubble bears, at least for the time being. Meantime, Europe was firmer last night as well, as were the Spooz, and in less than half an hour's time the indices had gained 1%, plus or minus, across the board.
Familiar Soundtrack from the Boise Boys
Turning to two corporate-earnings announcements that I was interested in, Micron indeed was successful at beat-the-number and the company waxed poetically as they made 38 cents vs. expectations of about 23 cents. And, the company did its usual shtick regarding how tight the DRAM market was going to be, etc., etc.
RIMM was unsuccessful at beat-the-number. It looks like they had to pull a few levers even to get to the number they reported. Revenues and earnings were on the light side, though margins expanded. Which led me to conclude that perhaps some reserves were reversed out and also confirmed my suspicions regarding last quarter, that they stuffed the channel to get to those numbers. They did manage to keep the guidance more or less in line, but I think that might prove to be a bridge too far this quarter.
Serial-Miss Mode
RIMM has been missing numbers on a regular basis and I believe that they're about to go into serial-miss mode. But for the most part, the dead-fish community drooled all over itself to try to rationalize the troubles for the quarter just reported as some sort of one-off problem, which of course it is not. The battle now shapes up as RIMM versus GOOG + AAPL -- which side would you like to bet on?
Turning back to the tape, the early afternoon saw sellers get the upper hand, and with 30 minutes to go the gains had mostly evaporated. But a late-day rally rescued the session, with the S&P gaining about 0.6% (though the Nasdaq was flattish).
On Jobs Data, Some Traders Will Hit Payday
Away from stocks, the piggys were heavy. Oil was higher. The dollar was weak, presumably as folks squared their positions in front of the holiday weekend and tomorrow's nonfarm payroll number. Dollar bulls have conjured up some pretty big estimates, and with the combination of weather, birth/death adjustments, and census workers, tomorrow's number will have a lot of moving parts.
But I find it interesting that the Liscio Report expects a print of just 95,000 workers, with 75,000 contributed by the census department. (For those who don't know, almost nobody is better on the small details of the economy than they are.) In any case, if their numbers are accurate, that will likely have ramifications in the FX market (and perhaps the metals market).
Today saw the metals higher as silver tacked on 2% to gold's 1%. Even gold stocks got into the act. Maybe the Newcrest bid will cause people to question their negative views on gold stocks generically. (The Rydex data I cited yesterday was incorrect. Rydex made the following fix to its own graph after I'd looked at it: Gold-stock assets are at a low level, but not below where they were during the fall of 2008.)
Lastly, in the inflation-watch department: While today's ISM survey beat the number (59.6 vs. expectations of 57), the prices-paid component really "crushed the number" (75 vs. 67.).
Index Close % Change
Dow 10927.07 +0.65
S&P 500 1178.1 +0.74
Nasdaq 2402.58 +0.19
Nasdaq 100 1959.56 +0.06
Russell 2000 683.98 +0.79
Sox Index 366.93 +0.1
Bank Index 52.44 +0.85
Dow Transports 4392.48 +0.41
Dow Utilities 383.02 +1.11
Nikkei 225 11244.4 +1.39
Gold - Front Month 1126.5 +1.08
Silver - Front Month 17.9 +2.11
Crude Oil 85.08 +1.58
Dollar Index 80.72 -0.44
Euro Spot 1.36 +0.56
Long Bond 20-year 115.88 -0.22
FOTM - Yen Spot 93.88 -0.44
4/1/2010 1:19:26 PM
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