Market Talk

With the S&P 500 crossing the 1150 mark, the bulls have been contending that for some reason, that’s the level that’s going to finally get the sideline money to concede and come flowing back in.

They may not quite be there yet, though. “The present levels are only modestly over-exposed to equities — nowhere near 2000, and still a good ways below 2007 peak,” Barry Ritholtz writes at The Big Picture. “I am not sure we can say the US household is ‘All In’ just yet. Somewhere in the 1200- to 1250 range should get us pretty close .”

The table at the right shows stocks as a percentage of financial assets; it was created by Ned David Research based on Federal Reserve data.

Of course, stocks have come back, while other household assets, like that Blockbuster account and, oh, say, house values, have not bounced back quite as much. Also, exchange volume has been average to anemic, so you’re certainly not seeing any rush to buy there. And don’t forget, the Fed is still out there buying up securities and pushing interest rates down, creating a ripe environment for the risk trade.

- A total of 130 companies in S&P 500, or 26% of the index, hit 52-week highs yesterday, while no companies hit fresh lows, Bespoke says. “While net new highs had been struggling to expand in recent months, today’s reading marks a new bull market high.”

- Sirius XM (SIRI) gets a delisting notice from Nasdaq. “An ominous threat, but one not likely to be carried out,” Digital Daily blogger John Paczkowski says, noting Sirius is appealing the notice and seeking an extension from Nasdaq. “Frankly, with over 3.7 billion shares outstanding, there’s little reason to fear Sirius will be booted from Nasdaq.”

- Can’t sugarcoat it: The aughts were awful. Atlanta Fed’s macroblog looks at trough-to-trough periods based on real GDP growth, and determines 2002-09 period was one of the worst since 1930s. “No other previous period comes close.”

- What exactly does the VIX tell us? FT Alphaville weighs in on the debate.

- Weekly jobless claims and consumer prices data suggest “the heavy lifting of rebuilding the economy is upon us,” James Picerno says.

- “Congress did not need to deregulate Wall Street – they only had to defund the SEC – which is what effectively happened,” Barry Ritholtz writes. “Hence, the chief cop on the Wall Street beat was outgunned, overmatched, undermanned and out-lawyered by the industry they were supposed to be regulating. How can that possibly have been any good for investors?”

- HTC has flimsy defense against Apple, John Paczkowski says. Its main argument: it’s been making smartphones longer than Apple. “While it’s certainly possible that might be the case, it’s hard to accept that argument without a list of patents to back it up. Harder still, when HTC says nothing about its legal strategy for dealing with Apple’s assault.”

- More bailed out banks failed to pay a quarterly dividend to the government in February. The number hit 82 last month, up from 55 in November 2009.

- Apple’s (AAPL) already pre-sold hundreds of thousands of iPads in anticipation of April’s official release, WSJ reports.

- First upset of the NCAA Tournament’s already in. No. 11 Old Dominion defeats No. 6 Notre Dame in the opening round.

US stocks mixed, with the blue chips rising for an eighth straight session, even after a morning burst of data painted a grey picture.

DJIA rises 45 to 10779, and Nasdaq Comp adds 2 to 2391, but S&P 500 slips less than one to 1166 (only its third losing session out of the past 15.) Dollar index rose sharply. Crude slipped, although it remains above $82/barrel; energy shares, however, slide. Industrials, healthcare rise, the latter as vote looms on healthcare-reform bill.

These steady rises, by the way, only make the market less balanced, and increase the odds that at some point they will reverse. It’s a truism, after all, that the market never travels in a straight line for a reason. “A near-term corrective phase would be totally natural at this point,” Gluskin Sheff’s David Rosenberg wrote, and even a good thing, really.

Jobless claims were flat, but remain at a high level, and the number of total continuing claims hit another record. That says people are still having a hard time finding jobs. Consumer prices were flat, and average wages fell, both indications that there is little real demand in the economy. It’s not exactly a picture that frames a robustly growing economy.

Philly Fed manufacturing report came out today also, showing a moderate rise while some of its subindexes slide back. That report, along with the Empire State report earlier this week, both add evidence that the ISM manufacturing index is likely to remain “broadly stable” in March, Capital Economics says. But it could be the first sign that the manufacturing recovery has peaked.

Firm also says the leading indicators report from the Conference Board may be showing the same kind of stall, and it’s possible the “5.9% increase in annualized GDP in the fourth quarter marked the peak of the economic recovery.”

Lastly, the Greek thing changes hourly, but it seems the Greeks are leaning toward seeking IMF aid if the Europeans won’t help out, and that may get the Europeans to pony up something, even if exactly what remains murky.

Does the American Banking Association really need John Boehner to tell it how to lobby Congress?

“Don’t let those little punk staffers take advantage of you and stand up for yourselves,” Boehner, the Ohio Representative who’s also a big shot in the GOP, told an “enthusiastic crowd” at the American Bankers Association “government-relations summit.”

I’ll bet they were enthusiastic!

I’m sorry, but that is an outrageous thing for a sitting Congressman to tell a group that already spends millions in Washington to make sure that it’s not “taken advantage” of “little punk staffers.” And why’s Boehner bashing staffers? Doesn’t he have staffers?

The ABA spent $3.2 million in the 2008 election cycle (with 57% going to Republicans) and has spent $1.3 million so far this cycle, according to opensecrets.org. Do they need cheerleading from a Congressman? Do they need a sitting Congressman giving them a roadmap for defeating a bill?

(Admittedly, they’ve given only $5,000 to Boehner this cycle, but then, he’s not on the banking committee. And besides, given his comments, it’s obvious they don’t need to ply him with anything.)

This is why the people aren’t going to get the kind of reform they need. This is why the banks are getting away with all manner of anti-social, nefarious behavior.  Boehner predicted getting any bill through the process and to the President’s desk could take another year. That’s a year for outfits like the ABA to do their dirty work and gut the thing before it even has a chance.

We been had, people, and we’re still being had.

A very worthwhile discussion today about what this morning’s data are telling us, what the Greeks are telling us, and what FedEx is telling us, even if the bulls didn’t seem to hear it.

Honestly, this is too complicated for me to follow.

Unless you’re in a Greek union, or you own a German bank, you’d be best off just letting the Greek drama play itself out. This thing is changing almost hourly, and you’re liable to end up like a character in one of Aeschylus’ plays trying to keep up. And none of them came to particularly happy ends.

Yesterday, everything was peachy. Resolution seemed at hand. Today, not so much.

A Greek official told Dow Jones today that the country may have to hit up the IMF for “support,” as it appears unlikely their European brethren would offer anything more concrete than the valueless words they’ve been offering these past weeks. So European stocks tumbled, the euro fell, and things looked grim. Again.

Mind you, the Greeks haven’t asked anybody for money.

Then, this morning, this report comes out that some EU members, like Finland and Italy, could back an IMF-led bailout of Greece. That was followed by another report that Germany was backing a joint EU-IMF bailout (a report that also stressed that the Greeks aren’t asking for money.)

Those were followed by yet another report that Germany now thinks if Greece need a bailout, the IMF should handle it (this report also pointed out that the IMF said it hasn’t been asked for money by Greece.)

This was followed by, you guessed it, yet another report. Now Greek PM George Papandreou (we’re getting good at spelling that name) stressed that Greece doesn’t want money from anybody, not the EU, not the IMF, not Bono or any assemblage of famous musicians. “We want to do it ourselves,” he said.

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Newswires’ Min Zeng and Michael Derby report:

Treasury prices are pushed lower amid chatter that the Fed could hike discount rates again, traders say.

Short-dated Treasurys, whose yields are sensitive to changes in official rate outlook, lead the selling. While the Fed has taken pains to assure markets that a surprise hike last month in the discount rate won’t lead to tightening of broader consumer credits, market participants still jump on any speculations that would lead the central bank a step closer to tightening monetary policy.

The two-year note is 2/32 lower to yield 0.960%, the 10-year note is down 7/32 to yield 3.670%. The 30-year bond is 7/32 lower to yield 4.585%.

Dow industrials clinging to gains, up 10. S&P 500 off 3.4. Dollar also strengthened against both the euro and the yen. US Dollar Index – which tracks the greenback against a basket of six other currencies – gained 0.9%.

Fed declined to comment.

Keep in mind, though, that as markets are buzzing with rumors, this is purely speculation, at the moment. And if it does happen it does not actually mean much, as it won’t be a tightening of monetary policy. Instead, it would represent a further normalization of emergency policy, for a facility that is very little used right now.

All right, I can get you a great deal of a piece of Irish real estate. If I scratch your back on this, you’ll scratch mine, right?

Wait, you’re not a U.S. Senator? Oh, I’m sorry, the deal’s off.

Okay, now, this really doesn’t have much to do with anything, but I saw a post on Henry Blodget’s Business Insider, about luxury Irish estates for sale. When I saw the picture for this the place, Kinnitty Castle, I recognized it immediately, because I’d actually been there.

And something tells me the story of Kinnitty Castle parallels the story of the great global real-estate bubble.

Let’s go back to 2002. I’m alone in Ireland on vacation (it was a great vacation, traveling alone, no itinerary, no plans, I’d bought a ticket on Aer Lingus and just flew into Shannon and winged it from there.) In Galway, I ran into two American girls, and one of them told me I had to try and stay at this great old castle out in the middle of nowhere, Kinnitty Castle. So after renting a car (and spending an hour literally going around the same block because I was so disoriented by driving on the other side of the road all I could do was make the same left-hand turn,) I headed east for my ancestral home of County Carlow. Kinnitty Castle was on the way.

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I'm glad the price hasn't gone up, but I still don't have a job.

Weekly jobless claims eased 5,000, slightly less than the boys on the Street expected, but at a total of 457,000, still at an elevated level that doesn’t suggest the monthly numbers are going to rise soon. Even more disturbing, the numbers for emergency compensation jumped again, up 360,000 to 5.9M.

That pushed total continuing claims to 11.6M, a fresh record, and a number that highlights once again, painfully, that employers are not hiring, despite the fact that some observers (and you know who you are) think all those folks on the dole are just sitting around waiting for their bennies to run out.

Then there’s consumer prices, which were flat in February, and up only 2.1% on the year. When you think about how much money the Fed’s been pumping into the system, to have this number flat is not a good sign. Where would we be if the Fed hadn’t put a trillion plus into the game? We’re thinking of a word here, begins with a “d.” What is it again?

“February’s US consumer prices figures show there is next to no inflationary pressure in the US economy,” Capital Economics’ Paul Dales writes. “Deflation may yet emerge as the real risk.”

That’s it!

And, despite the fact that there are no inflationary pressures whatsoever, wages are still sliding. BLS reported real average weekly earnings  fell 0.2%, as a decline in the workweek offset a slight rise in hourly wages. Real wages have been flat for six months now.

So, to sum up, nobody’s hiring, more people than ever are collecting, prices aren’t moving, wages are sliding for those who do have jobs. Oh, and the DJIA is at a nearly 18-month high.

That’s where things stand.

US stock futures pointing to a flat open, as the dollar and euro thrash about over the latest plot twist in the Greek story.

In the US, traders have a lot of data this morning, including the Philly Fed report, jobless claims, CPI, Conference Board’s leading indicators, as well as FedEx’s earnings. FedEx’s been in focus this week, given its business makes it one of those bellwether stocks that can show people what’s going on in the economy.

S&P futures down less than 1, DJ futures up 10. Ten-year up, yield down to 3.63%. Dollar index up about 0.3%.

I’ll tell you, Aeschylus couldn’t have come up with a more convoluted plot than the one playing out right now in Greece. Yesterday, S&P showered confidence on the Argives, and everything was peachy. Now, apparently, the EU really, actually isn’t going to help Greece sort out its money problems, despite all those kind words, and the Greeks are mulling hitting up the IMF, which for some reason the Europeans seem to think is worse than having Greece slide into the Aegean Sea. But even that’s changing, as some member states — Finland, the Netherlands and Italy — are warming to the idea of an IMF bailout. Beats doing it themselves.

Stay tuned, because this story changes by the day.

(I’m thinking here of the story of Agamemnon, who returned victorious from the 10-year Trojan War (with, incidentally, Cassandra, who knew what was going to happen if only anybody’d listen,) only to be killed by his wife, Clytemnestra, who’d taken a lover and wasn’t so keen on having her husband back in town (and was still sore about Agamemnon sacrificing their daughter to the gods before he left for Troy.) Then, their son, Orestes, avenges his father by killing his mother and her lover. But, in an all-timer guilt trip, he’s chased all over and terrorized by the Furies, who didn’t look kindly on matricide, until the gods intervene in his case. They left all that out of the movie version.)