US stocks slip in a fitful session, after the ISM-Chicago report derails a lot of recovery talk. Still, the major indexes posted their sharpest quarterly gains in about a decade.
DJIA loses 30 (0.3%) to 9712, after falling as much as 133 early; but the index gained about 15% for the quarter. S&P loses 4 (0.4%) to 1057, Nasdaq Comp drops 2 to 2122.
The numbers are pretty eye-opening. For the Dow, it was the best quarter overall since the 4Q of 1998. It was also the index’s best 3Q since 1939, when it rose 16.8%. It’s the index’s second straight rising quarter, after falling for the previous six. For those two quarters, the index is up about 28%, its best two-quarter string since the two quarters than ended in March 1987, when it rose 30%.
Posted by Paul Vignaon September 30, 2009 Economy, Markets /
That ISM-Chicago report, which slipped back into recession territory, really threw the market for a loop, and while stocks will still close out the quarter with healthy gains, investors and policy makers alike are left to question just how firm the recovery is.
You got to know when to hold 'em, and know when to fold 'em.
The market’s shown more ebb and flow lately, and depending upon how far it ebbs, especially on a day like today, you’ll get a good idea of whether or not the bulls can keep it flowing.
The Dow dropped more than 100 points earlier today on surprisingly weak manufacturing data. But, as has been evident throughout this ferocious rally, stocks slowly drifted off their intraday lows and turned positive, suggesting investors are maintaining the “buy on the dip” mentality.
The action isn’t surprising, especially since this has been a recurring theme throughout the rally. But whether the rebound today is sustainable into the close will be the true test.
It seem like only a matter of time before the bulls will run out of steam and won’t be able to keep erasing intraday losses. The early dip today was also larger than usual compared to other dips over the last few months. And the further stocks keep falling at the open, the harder it’ll ultimately be to recover.
We have not yet rebuilt our economic engine, but that isn’t stopping some people from looking down the road.
There’s a lot of talk of revival and V-shaped recoveries these days. But so far, the only thing holding up the economy is still government support, and I have not yet heard one good explanation of what’s going to come along to replace Uncle Sam’s helping hand.
Essentially, the economy is like a car without an engine, and the government is driving the tow truck. What is going to drive consumer demand, which will drive inventory rebuilding, which will drive hiring and wages, which will drive consumer demand again?
It is very important to understand that the government’s gone far beyond what it usually does to combat recession. Trillions have been thrown into the economy in an all-out effort to stop the slide into depression and restore consumer spending patterns. Bailout schemes that involve hundreds of billions of (borrowed) taxpayer monies have become routine.
At some point, some thing in the private sector is going to have to replace those government supports. It hasn’t come along yet, but a lot of people aren’t waiting for it to appear.
Signals suggest some emphasis on the weak-dollar trade this morning, with oil, gold and premarket equity futures all moving higher. Bears had a minor edge yesterday after September consumer confidence disappointed, but still they’re still not wielding enough gusto to throw bulls off balance.
And for what it’s worth, today is the last day of the 3Q, a quarter that’s been pretty good for stocks, to say the least. The Dow has gained 15% through yesterday, in line for its best quarter since the 4Q of 1998. It’s the index’s best 3Q on a percentage basis since 1939.
But bulls aren’t getting much heft from economic data anymore, with any improvements already well-priced into stocks. Makes you wonder how much good news on 3Q earnings is already priced in, too.
ADP’s estimate on Sept private-sector job losses due at 8:15am; final look at 2Q GDP at 8:30am; and Sept Chicago PMI at 9:45am ET.
S&P futures up 4.50; DJ futures up 36. Ten-year lower, yield at 3.31%. Euro’s at $1.4641.
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 […]
President Reagan’s former budget director David Stockman says Edward Snowden performed a heroic act, the Patriot Act should be repealed, and this whole spying-on-U.S.-citizens thing is a symptom of an out-of-control military-industrial complex. Click here to watch him go on YahooFinance. The author of “The Great Deformation: The Corruption of Capitalism in A […]