While we of course have our own opinions and axes to grind, and gleefully grind them away here at the blog, we still publish a wide variety of viewpoints at Market Talk, the version that goes out on Dow Jones Newswires (subscription required for that link there.) The idea is to give our readers an idea of what’s being discussed out there, and we do just that, hitting as many angles on the issues of the day as we can reasonably and responsibly gather.
Why, just today we published this snippet that Steve wrote up, citing Todd Harrison over at Minyanville on the subject of rising interest rates:
Interest rates jumping to three-month highs “smack dab in the face of QE2″ suggest bond investors are merely selling the news or anticipated the Fed would flood the economy with even more than the $600B announced bond purchase plan, Todd Harrison writes at Minyanville. “Prepare yourself. There will be a large contingent of bulls coming out of the woodwork to opine that higher rates are a healthy and natural bi-product of a recovery,” he says. “That’s true; the question, of course, is how ‘healthy’ and ‘natural’ this recovery is given the steady stream of synthetic sweeteners being administered by the government.”
How prescient Harrison was, or is, since not two hours later, we published this snippet, written up by our Treasurys reporter Min Zeng, citing Morgan Stanley on the subject of rising interest rates:
Morgan Stanley is casting a positive light on the recent sharp rise in Treasury yields. In a research note Tuesday, market strategists at the firm says the sharp rise is due entirely to real rates as inflation expectations have declined. Add to that the US dollar rally, and the market may be expecting stronger real economic growth, a view shared by Morgan’s economists, they say. “This may also indicate that growth has taken over from QE as the main market driver,” they say. “In our view, this upside risk is enough to balance out the increased downside risks elsewhere,” namely euro zone debt problems and China tightening monetary policy.
So, what do you think is driving today’s rally, the dollar or earnings? The dollar has completely reversed yesterday’s gains, and as you can see by looking at the euro, stocks, gold, oil and commodities like corn and cotton, yesterday’s losses have also been erased. Interesting, huh?
In today’s video, we take a look at two big stories, earnings and the foreclosure mess, and how the latter may affect a still limping housing market.
There apparently is no halo effect extending from Apple to the market, at least not today, and frankly it’s not extending very far across Apple’s shares as well. Apple — again, as it always seems to do — blew Street views out of the water. But the shares are up only 2.5% this morning, and the broader market is flat to down; most surprisingly, the Nasdaq Comp is the weakest of the three major indexes.
So, earnings is the focus of today’s Markets Hub; we look at Apple and the banks, like Morgan Stanley and Wells Fargo.
- Prosecutors investigating Morgan Stanley’s (MS) CDO practices are going to have a hard time getting to the bottom of things. “It is likely going to take continued investigation by prosecutors and lawsuits from private parties to unearth a good bit of what happened in this market,” Yves Smith writes at naked capitalism.
- Verizon Wireless working with Google (GOOG) on an iPad rival “sounds sexy,” Dan Frommer says at Silicon Alley Insider. “But let’s take this for what it really is. This is just Verizon trying to get leverage in its negotiations with Apple for the iPad and iPhone.”
- It appears Apple (AAPL) has lost another next-generation iPhone prototype. Digital Daily blogger John Paczkowski reports photos of the purported device were posted to the Vietnamese forum Taoviet yesterday. “They look to be genuine, though obviously there’s no way of knowing for sure.”
- “Regardless of your directional bent, respect — but never defer to — the price action and define your risk as there are powerful players moving markets with deep-rooted agendas,” Todd Harrison says at Minyanville. “Financial stability is, in the words of global leaders, a matter of national security. As the war of words heats up and the monetary mortars fly overhead, we would be wise to keep some powder dry.”
- “Certainly, the cause of the recession was not the usual run of the mill factors,” Barry Ritholtz says at The Big Picture. “Nor was depth or duration. “However, it appears — at least according to the charts I see — that this recovery is following a fairly normal script.”
- This isn’t a ripe environment for the retail investor, Reuters blogger Felix Salmon says. “Volatility is good for traders, not
investors: just check out the spectacular trading results at the money-center banks last quarter.”
Wall Street’s looking great, but until the financial sector’s results illustrate strength in more than just trading revenue, the ultimate strength of the sector, and the consumers and businesses it’s supposed to be serving, remains suspect. Elsewhere, Greece continues to twist in the wind.
The banks didn’t look so bad, but China’s worried that it’s banks are looking just a bit too aggressive, and Greece, well, Greece is just a mess, aren’t they?
- Still too early for backslaps and handshakes. “I will be convinced that the crisis has been resolved at a profit when the Fed disgorges the $1.5T in Fannie Mae and Freddie Mac securities it has bought for us, and if the U.S. government does not end up having to bail those securities out because the cash flows from the underlying mortgages prove inadequate,” John Hussman says.
- Large caps have lagged amid broader sideways trade.
- Corporate insiders continue to show little faith in this rally.
- Goldman Sachs (GS) takes damage control to the Zero Hedge blog. Firm defends its actions on prop trading operations and risk, but more telling is the fact that Goldman took time to respond in detail to these questions and criticisms. Perhaps it realizes its image has taken a beating and needs to be repaired.
- ‘Arrogance’ behind Blackfein, Mack and Parsons’ no-shows at last week’s banker meeting? “They do not see the need to show deference or even respect,” former IMF chief economist Simon Johnson says. “They won big from the crisis and that is now behind them.” That “arrogance will eventually prove their undoing.”
- Labor data show surge in hiring of temp workers.
- Morgan Stanley’s new CEO exemplifies change. The rise of James Gorman shows how the firm is trying to change the restless, swing-for-the-fences culture personified by John Mack.
- Morgan Stanley’s (MS) plan to relinquish five San Francisco office buildings to its lender represents “a fascinating twist on the underwater homeowner walking away from their bad purchases,” FusionIQ CEO Barry Ritholtz says.
- In the aftermath of Citigroup’s (C) flop of a secondary offering, let the blame game begin.
- Beware of the “Iranian Cyber Army.” Twitter users should take caution after hacking. “It is suggested that if you use the same password on your Twitter account with other accounts, now would be a good time to change your password on those other accounts,” TechCrunch’s Michael Arrington says.
- Yahoo’s declining search trend certainly a cause for concern.
- Retailers turn to gift cards to entice last-minute shoppers.
- Obama reaches a “meaningful agreement” for combating climate change with leaders from China, India and South Africa that was described as “an important first step.”
- Reviving Depression-era laws may be a tough sell.
- Fed can help, but fiscal policy is key to job creation.
- ECRI’s leading indicators reach 17-month high, suggesting the recovery in 2010 will be smooth sailing. Right? Wait. “The last time the reading was this high was in the summer of 2008 – just before the market began to unravel,” the Pragmatic Capitalist notes.
Morgan Stanley finally returns to profitability, the Bank of England says enough on the bond-buying thing, and the euro crosses $1.50. It’s Tomorrow’s News Today.
Of course, we don’t talk about what will surely be the top news story tomorrow, the late stock selloff. That’s the perils of taping these segments early.
And what I find most interesting about that BofE statement is that they’re apparently saying, the UK economy’s gotten about as much out of the bank’s stimulus policies as it’s going to get, and they’re not inclined to do more. A bit of a contrast with our Federal Reserve, which is still retaining the option of keeping any or all of its stimulus spigots wide open.
So we now have quite a wide range of forecasts for Friday’s jobs report, ranging from numbers that will bring the bottom feeders out to numbers that will show a nation still struggling mightily through recession.
That shows how big a deal Friday’s jobs report is. Employment is really the single biggest factor in measuring the economy. If people are working, wages are rising, the economy will do well. If they’re not, the economy will drag along, no matter whether or not it’s technically in a recession.
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 […]
I am not going to apply online to be lululemon’s next CEO because I don’t want my application getting lost in the pile. The slightly troubled yoga clothing retailer is taking applications from anyone on its website. Click here if you would like to apply. And click here to read more details from The Associated […]
