Market Talk

- “We have the specter of Greece’s finance minister insisting really, no really, it will never ever default, or default via restructuring,” Yves Smith quips at naked capitalism. “Now given the unfortunate accident of timing, these protests sound awfully Dick Fuld like, although the better parallel is probably Mexico, which kept insisting in 1994, no way, no how would it need to restructure, despite having a lot of dollar denominated obligations and an untenable currency peg,” she adds. “And it was OK, until it wasn’t.”

- As chatter ramps up about new stimulus plans, FusionIQ CEO Barry Ritholtz has his own ideas for what he would do if given $1T to stimulate the economy. “Some folks believe the government should do nothing, spend no money, focus on balancing the budget,” Ritholtz says. “But is the ideal time to begin a new diet and exercise regime when you have pneumonia? The time to reduce the government’s economic deficit and footprint is during a robust expansion, not during (or just after) a contraction.”

- S&P 500 still hasn’t eclipsed its August highs, but market breadth has indicated underlying strength in the September rally, Bespoke Investment Group says. About 80% of S&P 500 stocks are trading above their 50-day moving averages, which is higher than last month. “This isn’t quite to the highest levels seen over the last year, but it’s getting close.”

- “It takes jobs to create households, and usually housing is the key driver for employment growth in the early stages of a recovery,” Calculated Risk says. “So this is a trap: the excess supply means weak employment growth, leading to few new households, so the excess supply is absorbed slowly — putting off more robust employment growth.”

- JPMorgan Chase (JPM) finally issues a formal apology for the web problems that plagued its online banking service earlier this week. “We are sorry for the difficulties that recently affected Chase.com, and we apologize for not communicating better with you during this issue,” JPM says on its website. The apology is notable as many bloggers and folks on Twitter had criticized JPM for its failure to properly communicate this issue with its customers.

- Google Voice cofounder Craig Walker is leaving his role as a manager of real-time communications at Google (GOOG) and returning to his entrepreneurial roots. Walker, who was previously chief executive of Grand Central and renamed Google Voice after its acquisition by GOOG in 2007, will become Google Venture’s first resident entrepreneur, TechCrunch reports.

- “With two strong divergent opinions on gold and low implied volatility levels, this could be an excellent time to buy options in order to establish speculative long or short positions in the metal,” Bill Luby writes.

- All Things D blogger Kara Swisher doesn’t sugarcoat her thoughts on Yahoo (YHOO) CEO Carol Bartz. “Her actions in regards to the Internet giant’s Asian relationships are about as bad as it gets these days.”

- Poverty rate climbed to 14.3% last year, while those lacking health insurance rose to 50.7 million from 46.3 million. Incomes fell slightly as households relied on government and family aid to weather the recession.

- For the city that never sleeps, take a look at some of Central Park’s midnight runners.

Nothing can stop the September rally, right?

The September rally marches on.

US stocks mostly drift higher yet again as confidence mounts that the economy isn’t headed for a double-dip recession. Tech and materials pace today’s small gains.

DJIA rises 22 to 10595, its second-straight rise. The blue-chip index is up six of the past seven trading sessions, 10 of the last 12 and is up 5.8% in September. S&P 500 drops 0.4 to 1125 and Nasdaq Comp rises 1.9 to 2303.

Jobless claims post a small drop to 450,000, but still haven’t shown any meaningful progress all year, which is what really matters. FedEx, considered a bellwether for the broader economy, drops 3.8% on cautious outlook and will cut 1,700 employees.

Meanwhile, Geithner urges China to boost value of yuan. Treasurys fall and euro rises against the dollar. But keep an eye on gold: The precious metal registers another new high.

Don't hang your hat on a manufacturing "recovery," friend.

Another weak gauge on manufacturing today, another disinterested yawn from the US stock market.

Today it’s the Philly Fed September business outlook, with the headline reading (-0.7 vs -7.7 in August) failing to make it out of negative territory for the second month in a row. Again, like yesterday’s NY Fed Empire State survey, not an unmitigated disaster. But if it’s a report you were looking to for reassurance that the economy remains firmly in recovery mode, well, you might want to move along and search on, citizen.

There was a little improvement in the employment reading, but the average employee workweek softened rather sharply, with 30% of firms reporting declines in average work hours vs only 8% that reported increases. This fits with indications in the August jobs report that suggest people finding jobs were mainly only getting part-time work. Meanwhile, new orders, shipments and unfilled orders all worsened vs August. Prices paid moved lower, while prices received deteriorated in a bit of a wash.

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Universal Travel Group (UTA) shares meandered between positive and negative territory Thursday as investors digested a blogger’s claim of fraud against the tiny Chinese company.

Universal Travel dropped 19% on Wednesday and was the biggest decliner on the New York Stock Exchange, prompted by John Hempton, an Australian fund manager and blogger, who alleged that the online booking and travel company may be committing fraud. On Thursday, shares fell as much as 6.7% before bouncing back into positive territory. The stock, however, fell again recently, down 1.6% at $3.80.

In a 5,500-word blog post, Hempton described his troubles booking flights and hotels through the website and questioned the company’s accounting, suggesting its results are unsubstantiated. He also disclosed he’s shorting Universal Travel Group, a strategy investors use to profit from a declining stock price.

“It looks like this travel site is all front end, no-back end — there is no actual booking, no mechanism of collecting payment — no nothing really,” Hempton wrote on his “Bronte Capital” blog.

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A big bellwether reported earnings today, FedEx, and it wasn’t everything the market wanted (on the other hand, after two weeks of tacking an almost straight line higher, you think traders aren’t ready to execute the proverbial “profit taking” at the drop of a hat?) We also check in with currencies, Day Two after the Japanese intervened.

US stocks are lower overall, but the DJ Transports are taking it harder, with the index down nearly 1% (something I didn’t get a chance to mention on the video.)

The economy drags itself up the street, a flu-ridden wreck looking for a 24-hour pharmacy. Corporate profits cruise by in a refurbished convertible, all spiffy and new again, ascot blowing in the breeze. How’s this possible? Companies have become very good at the job of keeping their costs down. What’s their biggest cost? You, Jack.

People wonder how companies can keep this up with this game. How they could have any more costs left to cut after the past two years? They do. Look at this morning’s news out of FedEx. The company’s going to combine two divisions and can 1,700 people (in January; enjoy the holidays.) That’s how you manage costs. It also speaks to the demand thing. If the business was there, no way would FedEx be cutting that many people. But it isn’t, so they are. If the demand for shipping, which so many read as a bellwether for the economy, is weak, what are the prospects for those 1,700?

But, still, FedEx boosted its profit forecast. You wonder why.

So no matter what the Wall Street bulls and Washington partisans say, corporate America is not about to start scooping up large swaths of the unemployed. Which is bad news for the 99ers. In this morning’s weekly jobless claims report, the Department of Labor noted another 402,000 people fell off the emergency unemployment compensation rolls. Now, surely some of those people found jobs. But it’s a safe bet that the majority of them are 99ers now (whenever I see that term, I start hearing “My Darling Clementine” in my head; “…was a miner, 49er, and his daughter Clementine.” Can’t help it.)

I wonder how many of those 1,700 laid-off FedEx employees will become 99ers. Hope not many.

Update: Just another example: Rite Aid is closing a distribution center in Rome, N.Y., laying off 380 workers beginning in January (again, enjoy the holidays.) Local Utica paper has the news here. (Now, whenever I hear Rome, N.Y., which admittedly isn’t very often, I start hearing “Erie Canal” in my head; “…get up mule, here’s another lock. We’ll make Rome by six o’clock.”)

Muted tone ahead of some catchy US economic data, with Asian stock markets slightly lower overnight (with the exception of Shanghai, off nearly 2%), and mixed to lower currently in Europe.

Main standout premarket, the euro galloping higher, briefly breaking through $1.31, and renewed dollar weakness. USD index recently off 0.5% after climbing about 0.5% yesterday in wake of Japan’s yen intervention.

Weekly jobless claims, August PPI both due at 8:30 a.m.; Philly Fed’s Sept business index at 10:00 a.m. FedEx FY1Q results now hitting the tape; Oracle and Research In Motion due after the closing bell.

S&P futures down 3.50, DJ futures down 26. Ten-year note flat, yield at 2.72%.