At the end of last week, we joked that “if the troubling headlines keep up, we could be back at all-time highs before Earth Day.” So far, so good – the headlines are still dreary, and bulls are the ones laughing as stocks forge higher.
It remains a curious and impressive sight. An ugly March consumer confidence report, and another month of home-price declines indicating that even after prices started heading south nearly five years ago (and tens of billions of taxpayer money used for artificial support), housing still hasn’t found a bottom. And stocks rally.
Now, it’s true the downbeat numbers were in line with expectations, but that doesn’t mean they stink any less. And their implications for future activity, both for consumers and the housing industry, are grim.
Economists worked to minimize the consumer confidence tumble, saying it’s tied to high gas prices, events in the Mideast and market volatility, as if those troubles are set to disappear any day now. Consumers’ near-term outlook is considerably worse than a month ago, with fewer expecting business conditions to improve, fewer expecting their incomes to increase and fewer expecting to see more jobs. And those declines are all off of already low numbers. Continue reading…
Posted by John Shipmanon March 29, 2011 Markets, Stocks /
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Early tone for stocks suggests we’re in for another session with tepid volume and meandering equity averages. Markets in Asia were mixed overnight and stocks are mostly lower currently in Europe, setting up a flat to slightly higher open here in the US.
Concerns about the health of Italian banks seems to be spooking European markets a little. Oil’s retreating again, earlier moving back below $103/barrel but has since regained that level.
S&P/Case-Shiller January home price index due at 9:00am, and Conference Board’s March consumer confidence gauge set for 10:00am ET. S&P futures up 3.20; 10-yr note roughly flat, yield at 3.45%.
We hear consumer confidence hit a three-year high in February, at 70.4, according to the Conference Board. Guess this level looks a lot better coming up out of the basement than it did the last time it was visited in February 2008.
“”There is no evidence that the recent collapse in consumer confidence is going to turn around any time soon,” said Brian Bethune, senior economist at Global Insight, as quoted by the AP back then. Stories note at the time it was the worst confidence reading since the start of the Iraq War in 2003, and excluding that one, worst since 1993. So this level hasn’t been associated with “happy days” in the past.
Look, it’s better than heading lower, but it’s a bit of a stretch to suggest it’s a sign consumers are gearing up to unleash some wave of pent-up spending. Conference Board tries to put the best spin on it, but the overall damp mood can only be spruced up so much. The outfit says “consumers’ appraisal of present-day conditions improved moderately in February.” What’s “moderately” mean? Continue reading…
Plenty of economic data has been directionally positive lately, and with that we will not quibble. Improving data is always welcome, but at the same time, let’s be sure to maintain some perspective.
There’s been a sense today of hearty congratulations to the consumer for doing a fine job shopping during the holiday weekend and Cyber Monday, and for their brighter confidence during the month of November. Neither accomplishment is to be diminished, but let’s look at where we are.
Save some of the back-slapping over strong Black Friday and Cyber Monday sales because…they’re always strong, folks. Or at least that’s how they’re usually portrayed. “Holiday spenders had fast start; Sales rose 6.5% during Thanksgiving weekend, and Cyber Monday spurred a 21% increase,” blared a headline from November 2007, a month before the recession’s official beginning. “Shoppers opened their wallets; Strong start to holiday season,” sang one headline just after Thanksgiving 2008. Continue reading…
A bad batch of data, highlighted by a very weak reading on consumer sentiment, sends investors scrambling, with the dollar tumbling, Treasurys rallying, and stocks, interestingly enough, doing both.
This may be the silliest trading session Wall Street has seen in a while. Stocks are up when every piece of news out there is pretty awful, exemplifying how screwy market psychology can be.
Here’s a snip Vigna just published on the wire:
GDP gets revised down sharply, although not as sharply as feared. Intel cuts its revenue outlook, although apparently everybody expected it. Boeing delays the Dreamliner, again. Ben Bernanke says the Fed’s ready to go all in, although it’s not going all in now and doesn’t really expect to need to go all in. That all may sound confusing, but not to the market: to Wall Street that’s all positive. The major indexes are higher, Intel is higher, Boeing is higher. If you want to know just how, well, weird that all is, consider this: Boeing right now is actually the Dow’s top dollar gainer.
What’s worse, the consumer outlook regarding the economy remains pretty bleak. Reuters/University of Michigan consumer sentiment index for August dropped again and fell below economists’ expectations.
Not enough for you? Try this on for size: growth in the ECRI weekly leading index remained little changed, edging up to -9.9% from -10.1%.
Add it all up and, surprisingly, the stock market is significantly rallying. The Dow was recently up 115 at 10101, S&P 500 gains 11 at 1058 and Nasdaq Comp up 21 at 2139.
“What do you get when you flood the market with an Intel downward guidance update, a disappointing money printer dictate, and a drop on consumer confidence?” Zero Hedge ponders. “In a word — total market insanity.”
There’s a theme emerging here: corporate earnings still look good, but the consumer doesn’t look much better. That separation (Josh Brown characterizes it far more forcefully) is what we’re talking about on the Markets Hub today.
Also, we didn’t get into this on the video (only three minutes, don’tcha know) but it’s interesting to see that both the Dow and S&P 500 over the past week or so ran strongly right up to their 200-day moving averages – and are stuck there today. Given the very light volume that’s attended this rally, it’s a sign that what we’ve got here once again the traders are just having a bit of fun.
US stocks stage another late-day rally and finish near session-highs, as momentum mounts for the bulls hoping the correction will quickly become a thing of the past.
DJIA rises 121 to 10139, has gained 4.7% over its three-day winning streak. S&P 500 jumps 10 to 1070, all 10 sectors finish in positive territory. Nasdaq Comp gains 16 to 2175.
Stocks started the session strong amid better-than-expected jobless claims data, but the rally faded and stocks bounced around for a majority of the day. Nevertheless, the bulls charged into the close, largely ignoring a late-day Fed report showing consumer credit fell again in May.
The bulls may be gaining steam, but let’s not get ahead of ourselves — the economy’s problems that were being cited over the last few months as the market fell off its late-April highs haven’t disappeared into thin air. Retailers’ June sales offer further evidence: The data were mixed as heavy discounting and other promotions couldn’t offset tight consumer spending.
“Given the headwinds in this economy, the lack of jobs, the falling consumer confidence numbers, falling new home sales and falling leading indicators, today may be the last hurrah for retail sales for quite some time,” says Michael Shedlock, an investment adviser for Sitka Pacific Capital.
Just keep that hint of caution in mind when digesting the stock market’s 5% rally this week.
- Be sure to check the Journal’s live blog of the Goldman Sachs (GS) hearings.
- “I just thought — especially after hearing that the Goldman executives agreed to testify without being subpoenaed — that we might learn something useful in these hearings,” Barbara Kiviat writes. “That we might actually gain some insight instead of just another reason to want to bring these people down a peg. I was wrong.”
- Goldman Sachs (GS) hearings aren’t exactly painting a rosy picture of the firm, Felix Salmon says.
- Fear returns to the market as the VIX jumps 22%.
- But Eddy Elfenbein posts a chart that puts the Dow’s 213-point decline in perspective.
- S&P downgrades Greek debt three notches to junk and Portugal debt by two notches. With even more trouble looming, things aren’t looking so hot in Southern Europe right now, the Economist’s Free Exchange blog notes.
- Consumer confidence isn’t far from returning to pre-Lehman levels. Unfortunately, it still has a long ways to go before returning to levels before the recession.
- California police seized computers and storage devices from a Gizmodo blogger who had written about the new iPhone, intensifying the controversy over how he obtained the phone.
- Apple (AAPL) buys a chip maker behind the iPad brain.
- Gadget blog “Boy Genius Report” finds a buyer. BGR founder Jonathan Geller describes how the site has grown from “just a small passion project into a profitable, dominant online business.” He adds “with just a few great writers, and practically no infrastructure, we built something pretty mind blowing.”
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 […]
If ever a restaurant chain was growing the right way it’s Noodles & Co., a Broomfield, Colo.,-based chain that just announced an initial public stock offering. Noodles, founded in 1995, has grown steadily through booms and busts to 339 locations. It’s secret: Delicious healthy offerings, a diverse menu and great service for a fast casual […]
