Here’s a link to the latest quarterly musings of Jeremy Grantham, always informative, thought-provoking and entertaining. Titled “Time to Wake Up: Days of Abundant Resources and Falling Prices Are Over Forever,” here’s a nice little taste:
Now no one, in round numbers, wants to buy into the implication that we must rescale our collective growth ambitions. I was once invited to a monthly discussion held by a very diverse, very smart group, at which it slowly dawned on my jet-lagged brain that I was expected to contribute. So finally, in desperation, I gave my first-ever “running out of everything” harangue (off topic as usual). Not one solitary soul agreed. What they did agree on was that the human mind is – unlike resources – infinite and, consequently, the intellectual cavalry would always ride to the rescue. I was too tired to argue that the infinite brains present in Mayan civilization after Mayan civilization could not stop them from imploding as weather (mainly) moved against them. Many other civilizations, despite being armed with the same brains as we have, bit the dust or just faded away after the misuse of their resources. This faith in the human brain is just human exceptionalism and is not justified either by our past disasters, the accumulated damage we have done to the planet, or the frozen-in-the-headlights response we are showing right now in the face of the distant locomotive quite rapidly approaching and, thoughtfully enough, whistling loudly.
It’s been called “the birthplace of the American industrial revolution,” but today Moody’s just calls it Baa2 instead of A1, outlook negative.
That’s Pawtucket, RI, and it’s just two steps above junk now after Moody’s cut its credit rating four notches.
There’s something symbolic about this downgrade happening to a city that held such exalted status in the American economy and its transformation from its agrarian roots to an industrial powerhouse.
The glory days of the USA’s industrial dominance are well behind us, and that’s reflected all too clearly in the the ratings agency’s action today.
Moody’s notes the downgrade “reflects our expectation that the city’s already narrow financial position will be further strained by a sizable fiscal 2011 operating deficit driven by the city’s inability to fully incorporate a reduction in state aid into its 2011 budget.” The rating reflects Pawtucket’s “limited tax base, below average wealth and income levels, and low debt burden.”
The agency pointed out Pawtucket’s unemployment rate was 12.5% as of October 2010. Its neighboring town, Central Falls, went into receivership last spring.
Tough times, but hang in there, Pawtucket. You still have the PawSox, and those awesome roast beef grinders at the House of Pizza.
Bulls once again are able to fend off a mortal gash by bears, erasing much of a sharp morning decline, but still limp away from this engagement.
Nasdaq, in particular, shows some damage as a few tech bellwethers — Google, eBay, Amazon — get hit with some earnest selling. Tech, health-care and financial stocks slide most; only telecom ekes out a small gain.
Euro-zone issues continue to be a drag, euro slides below $1.30, USD index rises 0.4%.
First negative month for the DJIA since August. DJIA down 46.47 to 11006.02, and Nasdaq Comp sheds 26.99 to 2498.23. S&P 500 ends 7.21 lower at 1180.55.
Are advisers investing too much of their client’s money in bonds? Plus, Brett Arends gives a tip on how to play the gold market. And, there’s plenty of money to be made in tech — investors just need to know where to look.
Dow Jones reporter Veronica Dagher offers all this and more in her latest installment of the Wealth Adviser video series.
Weak outlook from Cisco combines with renewed concerns about the sovereign debt situation in Europe to push US stocks lower. For at least today, fundamentals rise above boundless liquidity in terms of influencing stock prices.
Strong day for the dollar, euro sinks to a five-week low. Tech stocks and financials the hardest hit, while energy and materials produce some solid gains.
Considering the stock market’s close correlation to the euro during the past several months, nagging sovereign debt issues in the Euro zone could cause trouble for US stocks.
DJIA falls 73.94 to 11283.10, and Nasdaq Comp loses 23.26 to 2555.52. S&P 500 ends 5.17 lower at 1213.54.
The Dow dropped more than 100 within the first few minutes of trading and has basically lingered around that area all day long. Cisco’s the main driver after the tech bellwether offered a disappointing revenue outlook, citing lower spending from government agencies and weaker orders from U.S. cable operators. Whether this is selloff is a one-time thing or the start of a new trend remains to be seen. Kathleen Madigan, Joe Bel Bruno and I break it all down, and more, on The Markets Hub.
US stocks erase early losses and finish in positive territory despite continuing concerns about euro zone sovereign debt.
DJIA, which fell as much as 92 points, finishes up 10 (0.1%) at 11357, snapping two-day losing streak. S&P 500 rises 5 (0.4%) to 1219 and Nasdaq Comp jumps 16 (0.6%) to 2579.
Better-than-expected jobless claims and a sharp contraction in the US trade deficit did little to fuel stocks as worries across the pond persist. Bond markets in weaker European countries, such as Ireland, Portugal and Greece, were slammed as investors continued to demand higher yields. All this comes ahead of the highly-anticipated G-20 meeting, beginning tonight.
In after-hours trading, Cisco Systems dropped more than 4% despite solid FY1Q results. Dow Jones’ Roger Cheng reports investors were more interested in CEO John Chambers’ comments from the release, in which he said he is seeing capital spending moderate in some areas of the business. Wall Street had expected a more bullish tone after staying cautious with his macro comments last quarter.
It looks like the uncertainty is here to stay for a little while.
- More than 80% of companies that reported earnings have topped analysts’ estimates. But don’t get too giddy. “After all, ‘better than expected’ could simply reflect the low level of the underlying estimates and the strength of the actual data,” Pragmatic Capitalism says.
- Is fresh, massive stimulus via QE2 really necessary? The Reformed Broker blogger Josh Brown isn’t so sure. He notes companies continue to report decent earnings. And more disturbing is the fact that “outside of home prices, inflation is becoming more and more of a reality…The propping up of the dead and the dying via federal spending and zero percent rates is not warranted with markets and prices rebounding elsewhere.”
- On the other hand, the risks of not engaging in QE2 are too great, James Picerno writes at The Capital Spectator. “Calling on the Fed to stand pat risks repeating the mistakes of monetary history,” he says. “We have to deal with the pressing threats as they arrive, and worrying about runaway inflation today is
premature, and perhaps more than a little dangerous. The day for fighting that battle will come. But not now.”
- Credit Suisse notes much of the earnings season move for equities might be over, despite the fact that there’s plenty of reports still to come. “Our Portfolio Strategy team finds the bulk of the impact of earnings on market performance seems to occur in the first two weeks of earnings season, which ends today,” firm says, according to MarketBeat.
- As the reviews pour in regarding Windows Phone 7 devices, so far so good for Microsoft (MSFT). NYT’s Bits blog posts a roundup of reviews. The new lineup of phones are getting “overwhelmingly positive reactions,” blog says. “It’s still unclear if this will translate into sales or make it possible to attract customers away from existing platforms.”
- Hulu’s considering slashing price of Hulu Plus — its subscription service still in beta mode — to $4.95 per month from $9.95, MediaMemo blogger Peter Kafka reports, citing sources.
- Latest iPad rival hits the market. H-P releases its $800 touchscreen tablet computer.
- FCC weighs in on the Cablevision/News Corp dispute over Fox.
- Deal Journal’s Shira Ovide looks at the best and worst deal Apple ever made.
- WSJ profiles the state of Jay-Z’s empire, the rap monger who’s worth an estimated $450 million.
And you thought today would be all about earnings. Nope, it’s really all about the dollar (and am I nuts, or is the central bank in China coming to the rescue of the dollar, at the same time as the central bank in the U.S. is doing its best to cut it down to the size of a postage stamp. Strange days.)
We need a lot more of this, a lot more, but this is an encouraging bit of news this morning out of Intel:
Intel Corp. (INTC) said it plans to invest between $6 billion and $8 billion on upgrading its manufacturing technology in U.S. facilities, including building a new plant in Oregon.
The upgrades are set as Intel looks to produce its next-generation 22-nanometer microprocessors in four existing factories in Arizona and Oregon, along with the new facility that is scheduled for research-and-development startup in 2013. The new chips will enable sleeker device designs, higher performance and longer battery life at lower costs, Intel said.
“These investments will create capacity for innovation we haven’t yet imagined,” said Brian Krzanich, the general manager of Intel’s manufacturing and supply chain. The company said the upgrades will result in 800 to 1,000 permanent high-tech jobs as well as 6,000 to 8,000 construction jobs.
Did I just write this morning that companies aren’t expanding? Well, so I did. If the nation is going to get back to its former self, we’re going to need a lot more investment like this.
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 […]
The bridge that collapsed on Interstate 5 bridge over the Skagit River in Washington was listed as “functionally obsolete” and “fracture critical,” which means the whole sha-bang could come tumbling down if one major part fails. Click here to read the details from USAToday. This sort of thing shouldn’t be happening in a modern, developed nation. Barry LePatn […]
