Market Talk

Late selloff knocks stocks into the red, as Treasurys and the dollar get beaten down and crude rises amid a visible shift in investor sentiments.

DJIA slips 15 to 8277; up eight points on the week. S&P 500 eases 1 to 887, Nasdaq Comp dips 3 to 1692. Again volume’s low. Treasurys selloff for a second day, with the 10-year yield hitting a 2009 of  3.46% (actually, its highest point since November.) Dollar also gets whacked, with the euro crossing the $1.40 mark and near its year high.

S&P’s UK warning really shook up people, who extrapolated the warning to the US. But nobody should be shocked to discover there’s a price to be paid for all this government spending.

Crude rose more than 8% this week to nearly $62/barrel. GM inches closer to bankruptcy, after bondholders, as expected, reject the exchange offer.

So tell me Stella Mae, when will continuing claims stop rising?

Morgan Stanley today raised price targets on large-cap banks by an average of 33%, using what seems to be some hazy logic.

Firm says it sees “slowing deterioration in several of our leading indicators” for non-performing loans, and cites an essentially flat month-month reading in April capacity utilization; slower deterioration in industrial production; and “jobless claims appeared to stabilize.”

Well, let’s see. Capacity utilization sank to a historic low, and industrial production was down 12.5% in the 12 months ending in April. Meanwhile, the headline on jobless claims has shown some signs of stability, but the arguably more important continuing claims continue inexorably higher to fresh record levels. Continue reading…

For most people in America, Memorial Day weekend is a long party, getting away to the beach, barbecues, sitting with a beer in the backyard and listening to the ballgame.

It won’t be that way in Detroit, not this year.

Ford still endures, (as do the Tigers) but Chrysler’s slogging its way through bankruptcy court, and GM is about to land there as well. It’s safe to say that by Labor Day, the landscape of the American auto industry will look far different than it does on Memorial Day.

Continue reading…

It’s getaway day ahead of the holiday weekend, so US stocks likely face thin volume and spikey, erratic trading. Early bias leans a little higher, based on premarket futures, following another setback for bulls yesterday.

Important to note that while stocks sold off yesterday, Treasurys were also hammered and the US dollar was weaker, an ugly trifecta.

No economic data, though the calendar for next week is ladened with high-profile numbers, including readings on home prices, consumer confidence, April home sales, durable goods and another look at 1Q GDP.

S&P futures up 5.50; DJ futures up 55. Ten-year roughly flat, yield at 3.36%. Crude’s back around $62/barrel.