US stocks extend the rally, rising sharply again after investors get an encouraging report on industrial production and consumer prices.
DJIA rises 108 (1.1%) to 9792 (and 10000 seems squarely in the market’s sights,) S&P 500 rises 16 (1.5%) to 1069, Nasdaq Comp gains 31 (1.5%) to 2133. All represent fresh 2009 highs. Financials lead with sharp gains.
Industrial production and capacity utilization both rise, though the former is down nearly 11% from a year ago and the latter remains far closer to its record low in May than historical average.
Equities aren’t the only rising assets these days, either. Crude jumps above $72/bbl and gold hits $1,020, both at the expense of the dollar, which strikes a 12-month low against the euro.
And, hey, how’d Paul Volcker get out of the White House cooler?
Posted by Steven Russolilloon September 16, 2009 Economy, Recession /
Can we trust this guy?
The markets are cheering Fed chairman Ben Bernanke’s prediction that the recession’s “likely over,” but Big Picture blogger Barry Ritholtz brings up an interesting point. Considering Bernanke’s track record as a forecaster, why does anyone trust his latest economic forecast?
Bernanke originally described the subprime crisis as “contained,” didn’t believe the housing crisis would affect the broader economy and “thought the Bear Stearns situation was a one-off,” Ritholtz notes.
Still, investors should pay attention to what he says based on how it can be related to his interest-rate policies.
“The Fed has made it clear rates are staying low for the foreseeable future, so this becomes a non-issue in this context,” he says. “But his economic forecasts? Don’t bother.”
Industrial production rises for a second straight month, Wells Fargo and other banks are starting to warn about increasing numbers of bad or delinquent loans, and the gold bugs are squawking, but what exactly are they saying? It’s Tomorrow’s News Today.
Break out the party hats, but this isn't 1999 all over again.
US stocks trading around session highs as the latest catalyst seems to be a stronger-than-expected reading on industrial production.
But in reality, it seems nothing these days can prevent stocks from racing higher, prompting some of us in the newsroom to wonder when Dow industrials are going to hit 10000 again.
The market’s recorded gains in seven of the last eight trading sessions and seems poised to extend the winning streak today. As John wrote in his opener this morning, “It’s almost as if gains in equities have become self-perpetuating — the more they go up, the more they want to continuing going up.”
The Dow’s up 19% since early July and 48% overall since this six-month rally began in beginning of March. The gains have continued in September, even though this is historically the market’s weakest month of the year.
But the market pullback that everyone expected is still non-existent. “Once again, Mr. Market demonstrates that he doesn’t like to be told what to do,” Tom Petruno writes at LA Times’ Money & Co. blog.
Good morning, Mr. and Mrs. America and all the ships at sea (especially the freighters moored, and empty, off the coast of Singapore.) We bring you the following special report:
Consumer spending is not making a comeback.
Not yet at least.
Much was made of the August retail sales report, which showed consumer sales rose 2.7% from July. But that surge in demand certainly didn’t show up in consumer prices. This morning’s consumer price index was up 0.4%, mainly on the back of crude oil prices; the so-called core index was up a scant 0.068%.
To me, that shows there’s very little demand out there. In fact, retail sales through the first eight months of 2009 are down9.1% from eight months of 2008, even despite the purportedly “successful” cash-for-clunkers scheme. That reflects rising unemployment, and underemployment, rising savings rates concurrent with consumers cutting back on credit-card usage, and stagnant wages. Also, just the fact that consumers this year have been – in the aggregate, as they say on Wall Street - freaked out of their wits.
Positive tone in US stock markets yesterday carried into Asian markets overnight, and the upbeat vibe is continuing to float like a boomerang west through Europe and back to US shores. It’s almost as if gains in equities have become self-perpetuating — the more they go up, the more they want to continuing going up.
August CPI due at 8:30 a.m. ET. The more compelling data comes at 9:15 a.m., with August industrial production and capacity utilization. Homebuilders’ September sentiment index set for 1:00 p.m. Oracle reports fiscal 1Q results after the market closes.
S&P futures pare earlier premarket gains, now up 4, Dow futures up 45; 10-year higher, yield at 3.41%.
So the market really got a lot of juice out of an off the cuff comment Fed Chairman Bernanke made during the Q&A portion of a speech he gave yesterday at the Brookings Institute. The speech itself was essentially identical to the one he delivered in August at the Kansas City Fed’s Jackson Hole symposium.
The market ran off with two words Bernanke uttered: “likely over.” As in, the recession is likely over. But it totally missed the critical context that comes from reading the entire quote. Even though from a technical perspective the recession is very likely over at this point, it is still going to feel like a very weak economy for some time as many people still find their job security and their employment status is not what they wish it was.”
J.P. Morgan reported some strong earnings today. But what this bloggers eye were some of the sub-numbers in the earnings report. The bank booked $1.8 billion in investment banking fees. But don’t be fooled – that wasn’t from big M&A advising. But $429 million was in advisory fees. Instead, that $1.3 billion + remaining fees […]
David Oreck, founder of a well-known maker of vacuums and air purifiers, says he’s upset his namesake company is in bankruptcy. He says Nashville, Tenn.-based Oreck Corp. was a perfectly profitable company when he sold his stake in it to a private equity firm in 2004. He blames the firm, New York-based American Securities Capital […]