We had to put Kate down a few months ago. I was thinking about her this week and realized I still (and probably will) always miss her. She was an extraordinary dog.We'll be back on Tuesd...
Friday, May 28, 2010
Weekly Indicators for Memorial Day weekend
First of all, apologies that I didn't get around to posting this last week. Sometimes real life intervenes, and last week it did. The monthly data last week almost univerally stunk, including the first decline in the LEI in over a year. This week there was evidence of continued recovery, but also more evidence that the pace of recovery may be slowing and possibly even stalling in some sectors. That the Chicago PMI's employment index fell all the way into contraction is particularly unwelcome news, suggesting that manufacturers are reacting to the...
Exports Helping With Growth
From Bloomberg:Intel Corp., the world’s largest maker of computer chips, is increasing production and commanding higher prices as an export boom puts American manufacturing at the forefront of the economic recovery. Santa Clara, California-based Intel’s factories are operating at 80 percent of capacity, up from a record low of about 50 percent last year in the midst of the recession. The average selling prices of personal computer processors have risen a total of 12 percent over the past two quarters. Overseas demand for...
Consumer Debt Picture Improving
From Bloomberg:Consumer delinquency rates are dropping at U.S. retailers and banks such as American Express Co. and Bank of America Corp., signaling an incipient lending thaw that may spur economic growth. Past-due loans at Bank of America, the second-largest card lender, fell for a fifth month in April and by the most in four years, while...
Decoupling Is Back
From the FT:Analysts said there was a heightened belief that Asian economies and the US could decouple from the problems in Europe.“The theory of a decoupling of the rest of the world from the problems in the eurozone seems to be taking hold, following the theory frequently heard in 2008 of the emerging markets decoupling themselves from the recession of the industrialised world,” said Ulrich Leuchtmann at Commerzbank.He said the reasoning was obvious: the exposure of the financial systems in Asia and the US to the stricken countries of...
Yesterday's Market
Let's start with an observation about where the markets are. Starting a few weeks ago, traders grew concerned about the EU situation. They sold risk assets (stocks and commodities) and moved into less risky assets (bonds and the dollar). This situation became more and more concerning as the movement continued. However, there are now signs of a...
Eurozone Faces Politcal Turmoil
As I have long predicted, the Eurozone's concept of "one size fits all" wrt interest rates is leading to political chaos.Eurozone countries, that are having to enact austerity measures in order to stay within the Euro, are facing growing domestic resistance to the cuts being imposed. At the very least Europe is set to be hit by wave after wave of strikes this summer coupled, most likely, with street demonstrations and chaos.The policy of "one size fits all" can never possibly be expected to work across 16 divergent economies unless, by some miracle,...
Thursday, May 27, 2010
Buy the Dip or Beginning a Bear Market?
From Bloomberg: U.S. stock markets are oversold and may rally strongly in the next few days, said investor Barton Biggs, who runs New York-based hedge fund Traxis Partners LP. “I think they’re going to stabilize in this general area, and then we’re going to have a significant move to the upside,” Biggs, whose flagship fund returned three times the industry average last year, said in a Bloomberg Television interview. Biggs recommended buying U.S. stocks last year when benchmark indexes sank to the lowest levels since the...
Jobless Claims Drop, GDP Revised Lower
From Bloomberg:Initial jobless claims fell in the May 22 week but not by much. Claims were down 14,000 to a higher-than-expected level of 460,000. In a partial offset, the prior week was revised 3,000 higher to 474,000. Improvement in the latest week fails to offset prior increases, reflected in the four-week average which rose for a second week,...
Biblical Plague Hits Greece
It would seem that the gods are sending Greece a warning today, by way of a plague of frogs that have managed to close a main road.I suspect that gods have seen that the wheels are already beginning to fall off the IMF/EU bailout wagon, sent to rescue Greece from its own self inflicted follies of fraud and living to excess.It is reported that Greece is trying to renegotiate the terms of the pension reform stipulated under the terms of the bailout.Greece wants the EU and IMF to agree that full pensions should be payable after 37 years of contributions...
Yesterday's Market
Yesterday, the market gapped higher at the open (a) but had a lot of downward pressure. first prices moved to the 50 minute EMA, then rallied, but fell again to the 200 day EMA (c). Then prices fell hard through all the EMAs (d) on heavy volume. Considering the technical damage done to the markets, yesterday's price action -- especially at the close...
Wednesday, May 26, 2010
Libor Continues to Move Higher
This is a big issue right now. From Barron's:THE STOCK MARKET STAGED an impressive recovery from steep early losses Tuesday, but was it a case of the symptoms being relieved while the underlying cause of the malady remains? Reports that North Korea had put its military on alert last week supposedly in preparation for a confrontation with the South...
Durable Goods Up, But
From Bloomberg:Orders for durable goods rose in April for the fourth time in five months, pointing to strength in U.S. manufacturing at the start of the second quarter. The 2.9 percent increase in bookings for goods meant to last at least three years was the biggest in three months and followed little change in March, figures from the Commerce Department...
Interest Rates
The OECD are calling for UK interest rates to be raised by the year end.What's the betting that, if they are raised, the rates for savers are not rais...
OECD Issues Debt Warning
From the OECD:Instability in sovereign debt markets poses another serious risk. It has highlighted the need for the euro area to strengthen its institutional and operational architecture. Bolder measures need to be taken to ensure fiscal discipline, says the Outlook.Several countries are already taking early action to enhance the credibility of...
Barry Ritholtz falls into the "year-over-year" trap
- by New Deal democratOne of the things I constantly harp on is the misuse of "year over year" comparisons. Sometimes we have to use them, due to seasonality (housing for example). When I use them, I am always careful to tease out the trend -- i.e., is the YoY comparison getting better or worse. If you don't, you make bad, bad mistakes like Mike Shedlock did when he unintentionally bottom ticked Rail traffic a year ago (when the 13 week trailing YoY average was at its worst, but the more contemporary 4 week YoY average had been improving).Well,...
Yesterday's Market
Considering the market's overall technical condition, we'll need a few days worth of price action in a variety of markets in order to say things are OK. However, yesterday was a good start in that direction.Let's start with the equity markets.Prices gapped lower at the open (a) but rallied throughout the day. Prices initially rallied to just below...
Tuesday, May 25, 2010
Case Shiller Down, Consumer Confidence Up
From Standard and Poor'sData through March 2010, released today by Standard & Poor's for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, show that the U.S. National Home Price Index fell 3.2% in the first quarter of 2010, but remains above its year-earlier level. In March, 13 of the 20 MSAs covered by S&P/Case-Shiller...
Libor Rising
From Marketwatch:The three-month U.S. dollar London interbank offered rate, or Libor, was fixed at 0.5363% Tuesday, up from 0.5097% on Monday. The rate is the highest since early July of last year and has been on the rise since the spring on growing worries over sovereign debt problems in the euro zone. The spread between Libor and overnight index swaps have also widened, a move that's viewed as a sign of banks growing more reluctant to lend to each otherThis is a key to watch. The higher it gets, the worse it will beco...
White House Calls for Second Stimulus
From the FT:The Obama administration made a strong plea to Congress on Monday to grit its teeth and pass a new set of spending measures – dubbed the “second stimulus” by some economists – in order to help dig the economy “out of a deep valley”.The call for action, which was made by Lawrence Summers, Barack Obama’s senior economic adviser, who urged Congress to pass up to $200bn (£138.9bn) in spending measures, came at the same time as Mr Obama asked Capitol Hill to grant him powers to cut “unnecessary spending”.The combined announcements...
Euro Heads For Parity
The Euro is heading for parity with the Dollar, as markets become increasingly unnerved by:1 The likelihood of Greece ever repaying its debt2 The severe austerity packages being introduced in Europe (Italy has just announced a 3 years Euro24BN austerity plan), and3 The rolling takeover by the Bank of Spain of certain small banks.Markets, once they build up sufficient momentum, are difficult to stop. The Euro's days may be number...
Yesterday's Market
let's start with a chart of the SPYs, because a close examination of price movements indicates some extreme negativity.a.) Prices rally throughout the day, but sell-off going into the close.b.) Prices gap down slightly at the open, but also sell-off late in the day.c.) Prices gap down hard at the open and never come close to recovering.d.) prices gap...
Monday, May 24, 2010
Welcome to Afraid to Trade Readers
For those of you who read Afraid to Trade, welcome. Corey is one of the best technical analysis on the web and we are pleased to have him mention our blog on his...
Storm Clouds on the Economic Horizon?
Starting sometime last summer the economic numbers started to turnaround, indicating an economic trough was forming. Since the end of last summer a variety of economic indicators have experienced improvement. Included in these numbers are initial unemployment claims, the ISM manufacturing and service index, various regional federal reserve manufacturing...
