Stock Market Update -Dec 21st

The market has been stuck in a range for the last two weeks around the 900 level on the S&P 500. Oil prices continue to drop, closing just under $34 per barrel. New unemployment claims surged past 500,000 again this week. The Fed basically dropped interest rates to zero this week, while mortgage rates also dropped significantly.




Next week is the Christmas holiday week, so expect light trading.

The 2008 market will go down in history
FedEx cuts employees' pay, suspends 401(k) payments
Drop in consumer prices is most since 1932
Bush throws lifeline to U.S. automakers
Auto makers to get more than $17 billion in loans
Paulson Seeks Second $350 Billion in Bailout Funds
Euro Makes a Comeback
The Next Big Bubble To Burst: U.S. Treasuries
If Fed mimics BOJ, Treasury yield drop could be big
What's next for America?
Dollar Staggers as U.S. Unleashes Cash Flood, Deficit
Don't destabilize Russia, Putin warns foes
California posts 8.4% jobless rate, third highest in U.S.
California's budget mess gets worse
Outlook Darkens as Recession Deepens

Stock Market Update -Dec 14th

In spite of all the bad news, the market continues to hold up well. The automakers failed to get a bailout package from the government this week. Oil closed higher, so did Gold, and so did many other commodities as the US Dollar fell, following its recent rally. New unemployment claims hit 573,000 this week (a 26 year high), and two more banks were shut down by regulators. People are now investing in Treasury Bills for a zero interest rate return (basically 'paying' the government to hold money for them)!


Next week we have the last Fed meeting for this year; more interest rate cuts are expected to be announced. Goldman Sachs and Morgan Stanley will be reporting earnings as well. It is also expiration week for Options & Futures, so we can expect some volatility as we close out the last month and quarter for 2008 for these derivatives. We could see the market continue with the recent rally.

Recession seen worsening, deflation a risk
Why Would Anyone Buy T-Bills at 0%?
Ex-Nasdaq chairman charged with perpetrating massive fraud
Hedge Funds Face Big Losses in Madoff Case
Bank of America to cut up to 35,000 jobs
Wells Fargo to write down $40 billion in Q4...
GM hires bankruptcy lawyers
Dow's rally may boost stocks next week
Fears rise over possible Ecuador default

8 really, really scary predictions

Stock Market Update -Dec 7th

More encouraging signs in the market as it rallies in the face of bad news. We got really bad manufacturing numbers in the middle of the week -but the market rallied! We saw over 500,000 jobs lost last month, and another 500,000+ new unemployment claims this week. Every week we see over 500,000 new unemployment claims, yet the market is rising! The total number of unemployed is now over 10 million.

The only sliver of good news is that Oil continues to fall, closing near $40 on Friday. All other commodity prices continue to sink as well.

(click to enlarge)

Next week we should get the final word on the bailout for the automakers. The market is showing signs of a small rally here, but with all the volatility, it may not last very long so be careful.

It's official: Recession since Dec. '07
U.S. job losses worst since 1974 as downturn deepens
Economy Loses 533,000 Jobs in November
Record 10% of U.S. homeowners in arrears or foreclosure
Retail sales dropping like a rock
Investor fear drives US Treasury yields to near zero

Tribune prepares for possible bankruptcy filing: WSJ
Price of gas hits lowest point in nearly 5 years
OPEC head: oil production likely to be cut soon
Merrill Lynch Says Oil Could Fall to $25

Stock Market Update -Nov 30th

Sorry, but I missed doing an update this week. We had a huge rally, with the market showing gains every day, following through from the previous Friday. More bad news though on the unemployment front with over 500,000 new unemployment claims again this week. Not a happy thanksgiving for many people.

(click to enlarge)

Here are a couple of news stories:

Bailouts hit $8.5 trillion
Fed adds $800bn to boost borrowing
Citigroup gets massive government bailout
U.S. Mortgage Rates Fall on $600 Billion Fed Plan
A Depression Coming? Not Likely

Stock Market Update -Nov 23rd

Another wild ride in the markets this week, as we saw the Auto makers and Citigroup in the headlines. Also this week, another 500,000+ joined the unemployment lines, same as the previous week (over 1 million in two weeks, over 4 million ongoing claims, and we are expecting close to 500,000 again in the coming week).

Treasury yields (Bonds) dropped to near zero (on the 3 month bills) as investors flocked to safety. In October, Consumer prices plunged by the largest amount in the past 61 years. Oil continued to fall, closing below $50 per barrel, while Gold closed back above $800. Also, three more banks were shut down this week. The saga continues...

(click to enlarge)

The Nasdaq is down 50% from its 'high' of 2800 last October. This 2800 'high' was down from the 5100 high in 2000, a double whammy for investors! Another blow to the 'long term, buy & hold strategy' crowd. In 10 years not only did you NOT make any profits, you actually lost money, even before counting annual inflation.

Next week we have a short week because of the Thanksgiving holiday. We got a nice rally on Friday, but we'll have to wait and see if it continues, or if it fizzles like the other big rallies we had on Nov 13th, Oct 28th, and Oct 13th! President-elect Barack Obama is expected to formally announce his economic team this week. The market rallied on Friday after the announcement of his pick for Treasury secretary.

"NEW YORK (CNNMoney.com) -- Wall Streeters returning to work Monday have at least one thing they can be thankful for: Thanksgiving is one less day the market is open."

***Breaking news: U.S. rescues Citi with $20 billion capital

As stock plummets, Citi on the brink
Will Citigroup Survive? Four Possible Scenarios
FDIC to guarantee $1.4 trillion in bank debt
The Auto Makers Are Already Bankrupt
Best housing 'bailout' may be no bailout
Trillions down and still bailing
30 reasons for Great Depression 2 by 2011

Obama Targets 2.5 Million Jobs With Stimulus Plan
How a Year-End Rally Could Materialize
The Death of Buy and Hold
The Global Economy's Big Fear Becomes Real: Deflation
Putin Pledges to Prevent Financial Collapse in Russia
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

Stock Market Update -Nov 16th

This was a week chock full of news. The $700 billion bailout plan got switched (it never even got off the ground; remember this is the one that had to be done 'immediately' to avoid a financial meltdown, over a month and a half ago!) , AIG got billions more from the government, and now insurance companies are converting to banks to get some of that government money too (also American Express!), GM is on the brink of bankruptcy, while Circuit City filed for bankruptcy. We saw more than 279,500 homes receive foreclosure notices in October, over 500,000 in new unemployment claims for the week, more job cuts announced (Sun, Citi, etc), and Oil settled lower at $57 per barrel. With all this news, the market dropped below the October 10th low, then bounced back on Thursday.


This coming week we have the CPI report on Wednesday, and earnings from Dell, Home Depot, and Lowe's. We also have options expiration on Friday.

This could be make or break week for the markets -I expect it to turn higher, but we could always get a downside surprise, so be careful. Unless you are a professional trader, I would still be on the sidelines at this time.

U.S. Economy: Retail Sales Drop by Most on Record
Cost of Living in U.S. Probably Dropped by the Most in Almost Sixty Years
12,000 retail stores to be shuttered next year
Are you an idiot to keep paying your mortgage?
The Big Three Are a National Disgrace
Chipmaker stocks fall as bad news snowballs
DHL express service centers in U.S. to be shut down

Citigroup Shares Tumble, Pressure on Pandit
How AIG got Uncle Sam over a barrel
Uncle Sam's Credit Line Running Out?
Your $3 trillion bailout
The United States of Bailouts
CNBC -Weekly market stats
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

Stock Market Update -Nov 9th

The market was trending up before the election, then fell for two days after the results were announced. Then with everyone expecting more selling on Friday from a horrible Jobs report, the market did the opposite of what everyone expected -it rallied on bad news! (240,000 more jobs were lost). If you are a technical trader, the charts indicate that this market wants to go up, regardless of the news.

This week England and Europe cut interest rates again, by 1.5% and .5% respectively -very aggressive. The auto makers all reported gloomy numbers this week. Two more banks were shut down on Friday, and Oil settled at $61 per barrel.


Next week we don't have much in the way of market moving events. As I've indicated before, I see the market trying to move up from these levels.

Side note: The effects of printing money irresponsibly, and subsequent runaway inflation: dinner for 1 in Zimbabwe can now cost $1.2 billion dollars (not including the tip)! The US debt clock stands at $10.65 trillion this week (see left panel).

Stocks higher despite bad news on jobs, automakers
GM grapples to avoid filing bankruptcy as cash vanishes
Jobless rate at 14-year high as losses continue
Jobs lost in 2008: 1.2 million
Consumer bankruptcies in October top 100,000
Berkshire Hathaway's profit falls 77%
Las Vegas Sands signals it may not survive downturn
Circuit City gets delisting notice from NYSE

Obama plans quick action on economy
Why it's (finally) time to buy stocks
How the Thundering Herd Faltered and Fell
China to launch $586B stimulus plan
South Korea Cuts Rate to 4% to Stave off Recession
USDA crop report first on the agenda for CBOT grains
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

Stock Market Update -Nov 2nd

October lived up to its reputation for being a bad month in the stock market, in spite of the 'up' week we just saw (chart below). According to CNBC, "For the first time in history,the Dow, S&P 500, and NASDAQ finished the week up over 10%." -maybe that's a good sign.
The Fed cut rates again this week, bringing the level to 1%.
Monumental profits were reported by the big oil companies this week.
The Yen continues to gain strength against most other currencies.
The US Dollar continues to gain strength too, though some say not for long.
Another bank was shut down on Friday.

(click to enlarge)

Next week we get more earnings reports, along with the election, and the important Jobs report on Friday. So far, we are getting the turning point in the markets that I mentioned last week. Lets see if the election results and the jobs report support this turning point.

"Worldwide, investors have lost $10 trillion in just the last month as share values collapsed."
For the buy and hold crowd, note that after more than 20 years, Japan's stock market still has not recovered! In the US, most sectors are now back to levels seen 10 years ago! Buy & Hold doesn't work; market timing DOES work, despite what you hear from the so called 'experts'!

Hopes are 'worst October' signals worst is past
Debt Markets in U.S., Europe Suffer Worst Month on Record
The Bet That Blew Up Wall Street
Global stocks suffer again
Fed Battles 'Big-Time' Economic Erosion With New Cuts
Fed Signals Door 'Open' for Cutting Rates to Lowest on Record
Bernanke makes it official. We are Japan
Beaten down, American consumers burrow deeper
US Home Prices Posts Record Annual Decline, Consumer Confidence Collapses
GDP falls 0.3% in third quarter on dive in spending
Chase to halt new foreclosures for 90 days

Fed currency initiative eases Asian jitters
Arab countries scramble to save their banks
Gordon Brown Asks Gulf Wealth Funds to Invest in U.K.
Barclays raises $12 billion from Middle East, others
Japan Pledges Fresh Crisis Action Measures
Bank of Japan Cuts Rate to 0.3% to Fend Off Prolonged Recession
China Cuts Interest Rates for Third Time in 2 Months
India Unexpectedly Cut Interest Rates to Spur Growth
Bank of Korea Cuts Rate by Record to Bolster Market
Iceland hikes lending rate to 18%

Ethanol maker VeraSun declares bankruptcy
Hartford Financial loses over half its market value
American Express to cut 10% of work force
Treasury sales could top $1 trillion to fund bailout
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.