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:
Subskrybuj:
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