Posted by Paul Vignaon March 02, 2011 Markets /
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If you’re a trader, you can’t like what you saw today. In fact, if you’re just about anybody but a speculator in the oil market, you can’t like what you saw today.
US stocks essentially flat, as stock traders can’t push prices much higher while crude oil futures keep pushing new highs amid the swirl of revolt and history sweeping across North Africa and the Mideast. DJIA adds 9 to 12067, after rising as much as 57 during the day; S&P 500 rises 2 to 1308, Nasdaq Comp gains 11 to 2748.
ADP comes out with bullish take on jobs, but the market is fixated on crude. Nymex crude and Brent both hit 2011 record highs. There’s no doubt rising crude prices crimp the economy, and the higher they go, the bigger the crimp gets. This is a problem that’s getting more traction on the market’s radar.
We watched crude prices climb all day, and I just don’t like the direction they’re going. Nymex crude rose above $102/barrel, a fresh record for the year and the highest price since September 2008; Brent rose to a fresh high as well, $116.35/barrel. We’ve been watching for the $103-$104 level on Nymex; there’s technical resistance there that, if broken, will let the Vandals break through the walls and sack Rome. Or something like that. You get the picture.
If it crosses those levels, and I think somehow that’s inevitable, I see another sell-off in the stock market. The only question is how big a sell-off. A 10% correction wouldn’t surprise me at all, in fact corrections like that are often healthy. Is a 20% correction possible? It depends.
Posted by Paul Vignaon March 02, 2011 Markets /
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If you’re looking for a good source of Apple-free news, here’s your rodeo.
Seeing as it’s 3 p.m. and there’s only an hour of trading left, this video’s getting pretty stale. Hey, I’m an honest man. But still, there’s some good big-picture stuff in here for you about jobs and oil. Worth the four-minute investment.
I studiously avoid watching Jim Cramer. It’s not that he’s a stupid man, he’s a very smart man. It’s not that he isn’t a successful man, he a very successful. It’s not that he makes bad calls. Well, it’s not solely that he makes bad calls.
It’s that he’s an insufferable jackass.
So last night he’s on his show, trying to convince his viewers not to panic and to stay with stocks, and he rips Kelly Evans over her Ahead of the Tape column yesterday about auto-parts stores. Now, whether or not Kelly’s right or wrong can’t be decided in one day. Whether or not anybody who writes a column or hosts a show for a living can ever be 100% right isn’t the point either.
It’s not the shot at Kelly that got me. It was the shot at his viewers’ intelligence.
So, here’s Cramer, a guy who as you’ll see momentarily has been massively wrong in the past. Not just wrong, but spectacularly, historically wrong, and he’s on cable TV last night telling people to keep buying stocks:
Despite all the worry, staying in stocks has been the right move every step of the way, and not panicking out on the big down days. No one ever made a dime panicking.
Now, he’s right about the panicking bit. He’s also right about the staying in stocks bit…if the world started turning on its axis two years ago. But it didn’t. Stocks have been a bad, bad bet over the past 12 years, and they are very likely to be a bad bet for the next four or five years.
Look, somewhere, there is some genius who got out in October 2007 and got back in in March 2009 and made a killing. But most people “in the market” are just getting jerked around, and Cramer’s one of the hacks pulling the chain. Continue reading…
John pointed out yesterday how Ben Bernanke is actually insulting our intelligence with his arguments. If you want to really understand just how dumb the Fed chairman thinks you are, contrast what he’s saying with the following headlines, about a speech given today by Thomas Hoenig, president of the Kansas City Fed:
DJ Hoenig: Fed Needs To Move Away From Crisis Type Monetary Policy
DJ Hoenig: Mkts Would Benefit From Higher Fed Funds Rate
DJ Hoenig: 1% Fed Funds Rate Still Easy Policy
DJ Hoenig: Too-Big-To-Fail Banks Socialist, Not Capitalist
DJ Hoenig: Supports Return Of Modified Glass-Steagall Laws
DJ Hoenig: Fed Is Monetizing Debt Right Now
DJ Hoenig: Current Fed Policy Playing Role In Rising Commodity Prices
You can read the story for yourself here. Hoenig is one of the central bank’s well-known contrarians, and you expect him to say things like this. But still, how big of a contrast is that to what we’re hearing out of Bernanke this week? And who do you think is closer to the truth?
Bernanke has been adamant that the Fed is not monetizing debt, or driving up commodity prices. Think he’d even acknowledge that a 1% fed funds rate is still “easy” monetary policy?
Posted by Paul Vignaon March 02, 2011 Stocks /
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Hurry! These prices won’t last much longer!
God, it’s so typical.
We’ve been hearing more lately about how retail stock investors are finally coming back to stocks, shaking off their well-founded doubts in the face of an equities market that has been going up in a seemingly straight line for nearly two years.
Next week — March 9 — in fact marks the two-year anniversary of the 2009 low, and it seems like the little guy’s finally done waiting out the stock market.
At the same time, as Dennis Gartman informs us that (more below) insider selling has gone through the roof, as the people in the know are literally breaking for the exits.
Retail buying is always taken as a good sign, and indeed for Wall Street it is a good sign, because it means new customers, fresh meat. But it is not a good sign that broadly speaking, “things” are getting better. It is only a sign that once again the lambs are, as has been the sadly repeated pattern these past dozen years, being lined up for slaughter.
The Fed’s much ballyhooed “wealth effect” tends to have the effect of making the average guy a lot less wealthy.
Posted by John Shipmanon March 02, 2011 Markets /
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First-day-of-the-month magic for US stocks was a no-show yesterday, the spell broken for the first time since July. Angst over rising oil/geopolitical turmoil seemed to be the most influential force Tuesday, and selloff rippled into Asia overnight with Japan’s Nikkei down 2.4%, largest percentage drop since late August.
European stocks in the red, crude futures still motoring higher, but premarket US stock futures tilt higher, a posture similar to this time yesterday.
ADP’s estimate on Feb private payrolls due at 8:15 a.m. ET; Bernanke goes back to the Hill this morning; Fed’s Beige Book due at 2:00 p.m.
S&P futures up 2.70, DJ futures up 19. Ten-year slightly lower, yield at 3.44%. Nymex crude up slightly at $99.94, Brent down slightly at $115.16.
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 […]
Bernie Madoff tells CNNMoney he’s having trouble sleeping. Click here to read more about that from CNN. He doesn’t know how lucky he’s got it, living behind bars in America. In China this week, a 39-year old businesswoman received the death sentence for running a $70 million Ponzi scheme – pocket change next to the […]
