Market Talk

US stocks finish a shaky week in shaky fashion, with the blue chips again holding up better than the market at large, after GE posted a big jump in 4Q profits.

If you looked only at the Dow, as indeed many do given its reputation, you might conclude the week was, all things considered, a pretty decent one. But if you look at the wider indexes, as well as the happenings in other assets classes, you get a different picture.

DJIA rises 49 (0.4%) today to 11872, S&P 500 adds 3 to 1283, but Nasdaq Comp drops 15 (0.6%) to 2690. GE is Dow’s best performer, easily outweighing the losses posted by Bank of America. For the week, Dow adds about 0.7%. But for the week, the S&P lost 0.8%, the Nasdaq lost 2.4%, and the Russell 2000 got hammered, down 4.3% on the week.

Can you smell what the Rock is cooking?

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Your zen koan of the day is this: if beef brisket costs more in Hangzhou than in Boston, whose central bank is full of bull?

I bring this pool of reflection your way after reading this food-for-thought piece (no pun intended) from The Wall Street’s China Real Time Report blog (h/t, Zero Hedge.)

The post relates the results of a study by Wang Pei, a blogger with the Beijing-based business news magazine Caixin, who teamed up with a friend in Boston to informally try and determine which city, Hangzhou or Boston, had a higher cost of living.

Wang Pei teamed up with a friend in Boston and set out on the streets with identical grocery lists, including 19 food items and two types of gasoline. The mission, to answer the question: “How expensive is China?”

While not exactly a scientific study, Wang admits, the exercise reveals that a surprising 10 of the food items, including green beans and bananas, were more expensive in China. In Hangzhou, a scenic coastal city near Shanghai, the price of beef brisket per 1.1 pound, or 500 grams, and the cost of a dozen eggs were both double the prices found in Boston. A liter of milk, meanwhile, was nearly triple.

Hangzhou’s premium gasoline was also 23% more expensive, and the overall price of the entire basket of goods purchased there was 8% higher.

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Interesting to hear GE CEO Jeff Immelt will chair a new White House jobs panel tasked with finding ways to grow private-sector jobs. He runs a big company, but Immelt has shown more skill at cutting jobs, frankly, than creating.

GE finished 2009 with 18,000 fewer US workers than it had at the end of 2008, and US headcount is down 31,000 since Immelt’s first full year in 2002. During his tenure, GE workers based in the US as a percentage of total employees has fallen to 44% from 52%.

Maybe the company’s 2010 10-K due in February will show GE actually added jobs last year. But then again, maybe that’s just our imagination at work.

Addendum:

Here’s a dead-on take (as usual) from market strategist Joan McCullough at East Shore Partners, on this Immelt appointment:

Why do we give a flyin’ fig about this announcement from the White House? Because it hits home once again that nothing has changed. That the crony capitalism is as alive and well at the hands of a community organizer as it was with the rest before him. That the best interests of the US taxpayer are the last consideration of our rainmakers.

Photo courtesy of GE

GE’s stronger-than-expected 4Q results help set a positive vibe for US stocks ahead of the open, though weaker-than-expected BofA report tempers the mood a bit. Mixed picture overseas as Asian markets were generally lower overnight, while European stocks bounce back from yesterday’s declines.

Euro looks sturdy, recently at $1.352, while the USD index gives ground, off 0.4% at 75.47.

Corporate America continues to deliver nice profits, but stock market action so far this week (Nasdaq, Russell 2000 post biggest declines since August) suggests it’s well priced in. GE up 3.4% premarket; BAC down 2%.

S&P futures up 6.50; 10-yr note higher, yield at 3.42%.