- Gold hit a fresh record high yesterday just as the euro and stocks also gained, while the VIX fell to a six-week low. “Maybe the strange cross-currents were a sign that some market players were wrapping up their week a day early and heading for the beach,” Tom Petruno says. “In fact, Friday might be a good day to take off.” Spot on – Dow finishes up 16 in a sleepy session.
- Not much action out of Palm since word of acquisition by H-P (HPQ), but expect that to change in the near future, Digital Daily blogger John Paczkowski says. At a developer event yesterday, PALM developer liaison Josh Marinacci offered some of the company’s upcoming plans. “We are working on future devices. And a new version of the OS. So I think you’re going to find the next year very exciting.”
- It appears the White House may be changing its mind on reining in CEO pay, according to The Huffington Post. But the change doesn’t seem to be garnering the attention it deserves. “Well, the BP disaster, in particular the intense press coverage of this week, appears to have provided the Administration with some very useful air cover, by diverting public attention from the final rounds in the battle to reform Wall Street,” Yves Smith says.
- Investor sentiment readings this week were mixed. “Although far from extreme bearishness, this level of optimism is consistent with an oversold market, but does not necessarily signify that all is clear,” Pragmatic Capitalism notes. “The majority of the reliable short-term buy signals have coincided with lower levels of bullishness.”
- Ratings agencies played a prominent role in the financial crisis, but the big three agencies have “escaped much blame, liability and scrutiny for most of the post-crisis period,” FusionIQ CEO Barry Ritholtz writes. But that may be coming to an end.
- Enthusiasm for Apple’s (AAPL) iPad has been obscured by excitement over its new iPhone 4, but DigiTimes says the tablet computer is moving quickly. The Taiwanese technology publication says iPad monthly shipments reached a whopping 1.2M units and could balloon to 2.5M by year’s end.
- Nevada registers the highest monthly state unemployment rate in May, coming in at a staggering 14%, marking the first time in four years Michigan wasn’t awarded the dubious distinction, according to a new Labor Department report (via NYT’s Economix blog). By contrast Michigan’s rate was 13.6%.
- Twitter’s strong growth continues. ComScore reports the microblogging service registered 90.2M unique visitors last month, a 7.6% increase from 83.8M uniques in April. “After a lull in the winter, it’s clear that Twitter is back on track,” TechCrunch says.
- “No one will pay any heed to the now discredited Greenspan who ironically was worshiped for all the things he got wrong and ignored the few times he ever said anything that made any sense,” Mish opines.
- WSJ’s Jim Chairusm writes about why the lost US goal in the Slovenia game today shouldn’t matter.
US stocks inch ahead in a languid session, as most traders, it seems, are busier watching World Cup matches than trading.
DJIA gains 16 to 10451, up about 2.4% on the week; S&P 500 adds 1 to 1117, Nadaq Comp rises 3 to 2310. NYSE volume’s 4.5B shares, and considering it’s a “quadruple witching” day, that’s very low volume. Treasurys are mainly flat on the week. Gold climbs to another record close. Euro edges toward $1.24. ECRI’s
Weekly Leading Index comes in down again, further into negative territory and flashing a worrisome sign about economic growth.
Today was about as somnambulant as the market gets during a non-holiday session, and one that includes options expirations at that, which often at least drives a lot of volume. When the most exciting thing to happen is the U.S. teams 2-2 tie with Slovenia in the World Cup, you know it’s quiet out there. But I wonder how long it will stay that way.
Keep an eye on both the 50-day and 200-day moving averages for the major indexes, the S&P 500 especially. “The 50 DMA is moving down toward the 200 DMA,” UBS’ Art Cashin notes. “If the 50 crosses under the 200, it is called a dead cross, often viewed as a sell signal.”
The Economist’s Ryan Avent has a great comment in a recent blog post that really struck a chord when deciphering the market’s recent tone:
It’s difficult to see what news might kick off a big upward surge, but it’s easy to identify things that could send things down. As a result, few people will be making big bets on a surge while lots of people will be playing it cautious. Absent a real change in the economic picture, the market is set up bearish.
Well said, Mr. Avent. The labor market is still miserable, with yesterday’s report on jobless claims painting a less than rosy picture. The housing market has hit a speed bump amid the expiration of the home-buyer tax credit and may be poised for another leg lower.
As the chatter about a double-dip recession heats up, the ECRI weekly leading index fell further into negative territory last week. It has now dropped six straight weeks and, as Paul wrote earlier, now sits at levels “ominously consistent with a recession.”
David Beckworth, assistant economics professor at Texas State University, crunches numbers from the ECRI to help forecast GDP later this year and concludes real GDP will slow to about 0% growth in the second half of the year.
“This forecast is consistent with many observers who see a growth slowdown the second half, but not an outright contraction of the economy,” he writes. “Other developments such as a worsening of the Eurozone crisis or premature tightening of economic policy could further undermine US economic growth.”
Sorry to get all negative on this lazy Friday afternoon where the stock market’s extremely narrow trading range is nearly putting us to sleep. But it’s hard to ignore the warning signs flashing in the economy right now.
If a bullish leading indicator falls in the forest, does it make a sound?
If the forest is the U.S. stock market, apparently not. The ECRI dropped what could easily be called a “tape bomb” on the market this morning, as its Weekly Leading Index fell yet again, deeper into negative territory, and closer to numbers that are ominously consistent with a recession.
This thing’s throwing up more red flags than a Soviet military parade in Red Square on Lenin’s birthday. But the market hardly noticed it.
When this gauge was rising last year, the bulls were all over. It was the greatest thing since sliced bread, a can’t miss indicator that was pointing to some sublime V-shaped recovery. But this morning, with the ECRI flashing a gigantic “WARNING” sign, the market actually rose after the story hit the Tape.
Now, maybe the traders on the floor of the NYSE are too busy watching the U.S. in the World Cup. Maybe they just missed the ECRI report. There’s got to be some rational reason they’d ignore this, right?
On this morning’s Markets Hub, we’re looking at how the oil spill is becoming a growing problem for the energy sector, the growing doubts about the recovery and what it may mean for stocks, and the future of BP. Myself, Madeleine Lim and Steve Wisnefski break it down.
Premarket indications suggest US stocks are headed for a flat open. Mixed session for stocks in Asia overnight and European equities flat to a shade lower; euro is roughly unchanged, lingering around $1.238, and the dollar index nearly flat as well.
Economic data calendar empty today, so US markets are likely to continue their EUR/USD gazing for guidance on direction. Options and futures expirations should add to volume and perhaps volatility, but being a summer Friday with scant market-driving news so far, this session is shaping up to be a sleepy one.
Oil retreating below $76/bbl, gold up slightly. S&P futures down 0.70, DJ futures down 7. Ten-year flat, yield at 3.19%. Euro off a hair at $1.2375.
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 […]
