A relatively quiet day in the stock market, with indexes rising overall although the main action’s in the forex and crude markets.
DJIA slips 1 to 8763, while S&P 500 adds 3 (0.4%) to 942 and Nasdaq Comp gains 18 (1%) to 1860. Big Board volume’s weak. Materials, energy and tech drive gains, as crude hits $70/barrel mark and dollar continues slide, with euro hitting $1.41.
Call us crazy, but neither of those things sound good for the US consumer.
The Apple (AAPL) hype machine keeps getting stronger, possibly at Palm’s expense.
NYT’s Joe Nocera notes Apple didn’t have any dazzling product announcements yesterday at its annual developers conference; only faster and cheaper MacBooks and iPhones.
“Isn’t that what every other tech company in the world announces on a quasi-regular basis? How is this possibly news?” he ponders. “Yet here was half the free world live-blogging, it seemed, while Twitterers were tweeting like crazy.”
But with the hype now focused squarely on Apple, the timing on Palm Pre’s release last weekend is looking more and more dubious by the day.
Cross at the green, not in between.
Just because much of the economic data throughout the last three months have been characterized as “better than expected” doesn’t mean the economy’s improving.
For instance, take the May employment report. The fact that 345,000 jobs were lost last month was certainly better than economists expected. But make no mistake; an economy that’s losing 345,000 jobs a month is an economy that’s still in decline.
Despite the better-than-expected headline jobs number, Harvard economist Jeff Frankel, who sits on NBER’s recession-dating committee, says the labor market still hasn’t signaled a turning point.
“Speaking entirely for myself, I like to look at the rate of change of total hours worked in the economy,” he says, noting the length of the work week usually responds at turning points for the economy faster than the actual headline jobs number.
Any good deals left?
Stocks are mixed, with the blue chips lagging the broader market, and even the financials, usually reliable for some kind of short-covering rally, aren’t getting any juice out of news that some of the nation’s biggest banks will be allowed to pay back their TARP loans.
The DJIA is down a bit, while the Nasdaq Comp and Russell 2000 are up a bit. Financials are down, as are most sectors, while materials and tech are higher. Treasurys are higher, crude’s above $69 and the dollar’s sliding (euro’s back near $1.40.)
The market remains at a critical junction, and today could be a breakout day, although the pending sale of three-year Treasury notes this afternoon or 10-year notes tomorrow could keep traders at bay, UBS’ Art Cashin says.
“Ye Olde Traders Handbook sayeth that folklore claims that two volatile days that end little changed are often followed by a breakout of size,” he writes in his daily commentary. “The book fails to indicate direction.”
He sees support around 925 on the S&P 500 and resistance around 953. All in all, market’s at a “potential critical junction,” and neither the dollar, the bond market or crude prices are helping.
We don’t want to rile up the boys from the Times, so we’re going to state up front that this post will contain a good amount of speculation. But we’re big-picture types over here, and this morning we’re wondering if there will be a big-picture takeaway from the Supreme Court’s foray into the Chrysler bankruptcy.
Quick recount: after failed efforts by the Germans (Daimler) and private-equity (Cerberus), and amid the worst economic storm in a lifetime, Chrysler was forced into bankruptcy court, where it was quickly, very quickly, reconstituted and sold to the Italians (Fiat), the unions and the US government. Some pension funds in Indiana thought they got a raw deal, and appealed the sale. Supreme Court Justice Ruth Bader Ginsburg yesterday, minutes before a deadline for intervening in the matter, intervened, issuing a stay of the sale.
The court could clarify its intentions by today, the Journal reports, although it didn’t give any indication about what that would be.
It could just be that the Court, which doesn’t usually hear bankruptcy cases, needed more time to wade through the paperwork, Harvard Law professor David Zaring writes at The Conglomerate blog. Or it could be something else. “I am tempted to assume that the Taking Clause question is one that Ginsburg finds intriguing,” he writes.
Pulling victory from the jaws of defeat with a late-session rally has become a more common feature of trading in US stocks lately.
Plausible explanation suggested late last week by Art Cashin at UBS is the moves are being fueled by portfolio managers who’ve been skeptics of the rally since March and held back, but now face the rapidly approaching end to 2Q and can’t afford to miss anymore upside. They’re a careful bunch, which is why they wait till late in the day to cast their lot.
Thin-ish volume exaggerates the moves. April wholesale trade figures due at 10:00am. Yesterday was a draw, futures suggest today starts the same, S&P futures up 2.20; DJIA up 12. Ten-year higher, yield at 3.83%.
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