Market Talk

Investors initially didn’t care much for what the ECB had to say and the jobless claims report. But retail and home sales really overshadowed everything else today and stocks soared for a second-straight day.

The recent string of better-than-expected economic reports is finally boosting investor sentiment, especially as Europe has really dominated market action over the last few weeks. But this shifting tide toward U.S. data is a welcome development as the government’s report on November nonfarm payrolls is due Friday morning. We discuss it all and more on The News Hub:

US stocks close down, but finish well off their session lows, as bank shares suffered amid concerns about a broad insider-trading probe.

DJIA, which dropped as much as 149 points, finished off 25 (0.2%) at 11179, its first decline in three days. S&P 500 falls 2 (0.2%) to 1198. Financials lead the drop, but tech and consumer discretionary finished in positive territory, muting the index’s overall losses. Nasdaq Comp gains 14 (0.6%) at 2532, its fourth-straight gain.

WSJ reports FBI raided three hedge funds amid its insider-trading investigation, which added to jitters surrounding financial sector. Ireland agrees to bailout package, but worries intensify about rest of euro-zone’s mounting debt.

Something else to consider — David Rosenberg offers his latest gloom-and-doom warning. Dow Jones’s Min Zeng reports:

US economic growth will be “extremely disappointing” in 2011, with risks of deflation. Rosenberg, chief economist at Gluskin Sheff, argues the US has passed the peaks of the economic cycle and fiscal stimulus and noted there are fresh headwinds ahead. He says safe-haven Treasury bonds provide better value than US stocks, and especially favors 30-year Treasurys. He highlights the spending cuts from state and municipal governments, the second-largest contributor to US gross domestic product after consumer spending. Rosenberg expects the 30-year bond’s yield to fall to 2.5% to 2.75% by the end of 2011.

Meanwhile, Dow Jones reporter Kristina Peterson explains why stocks ended mixed, with bank stocks dragging down the Dow, while the Nasdaq moved higher. Check her News Hub segment here:

Lots to discuss on this morning’s News Hub. I have a small markets segment where I mainly discuss GM’s $2 billion 3Q profit ahead of its IPO next week. Additionally, discussion surrounds the debate regarding a return to the gold standard. And there are several problems banks are having restarting the foreclosure process. Check it all out at The News Hub.

Heavy video day. In this News Hub Extra, we break down Bernanke’s speech with Societe General chief US economist Stephen Gallagher.

I did a co-host stint on the News Hub this morning, and it struck me during the show that the subjects we talked about, jobless claims, deflationary hedges and hi-tech gimmicks to lure shoppers, all can be strung together, they all play one off the other.

Sure there was some improvement in jobless claims, but they are still way too high, and indicate there’s precious little hiring going on. That’s exacerbating the spending habits of consumers, who are also somewhere inside a huge deleveraging process, and that’s exacerbating the inflation/deflation situation. That thought occurred to me while we were doing the show, but I didn’t get a chance to mention it.

Call it, oh, I don’t know, and extended pause.

If you watch CNBC enough, you’ll notice it. The persistent use of the word “we” when the reporters are describing the stock market. “We” are rallying, “we” are selling off, “we” are looking to climb here, “we” are concerned about a double-dip, or the price of tea in China, or whatever, you get the point.

Listen, “we” are not the market. We are reporters. “The market” is a place where buyers and sellers come together to, well, buy and sell. “We” report on the outcomes of that buying and selling. I’m certainly not the first person to suggest that CNBC is less than an objective observer, but this “we” thing is like nails on a chalkboard to me.

This is something you just don’t hear elsewhere. You don’t hear sports reporters referring to the teams they cover as “we.” You don’t hear political reporters referring to the politicians and parties they cover as “we.” You don’t hear reporters who cover the military refer to it as “we.” It’s The New York Football Giants, it’s the White House, it’s the military.

But on CNBC, the reporters on the network and the stock market are all one big “we.” It’s a subtle thing. But it points to an almost unconscious association in the speaker’s mind with the subject they’re covering.

It’s an easy thing to slip into it, and I’m sure somewhere along the line I’ve done it myself, but I consciously try to not do it. I was reminded of this yesterday, when talking about the rally on the New Hub. It would’ve been easy to say “we’ve got a rally on our hands.” But for me the only we is the Fourth Estate, and Simon, Bob and I don’t have anything going. The stock market has a rally going (and going nowhere today, incidentally.)

Just needed to get that off my chest. We appreciate your patience.

In case you were wondering: The headline quote, by the way, is from “Sudden Impact,” when Clint Eastwood, as Dirty Harry, standing solitary in a coffee shop that’s being held up, says to the gunmen, “well, we’re not just gonna let you walk out of here.” One robber laughs and says, “who’s we, sucka?”

Harry pulls out his big .357 and says “Smith, Wesson and me,” and proceeds to blow away the gunmen. It’s the last one standing, who grabs a hostage, to whom Harry says, “go ahead, make my day.”

That’s what I say to CNBC: Who’s we, sucka?

So we (the editorial we there, hiding the fact that I mean me,) forgot to post our opener, caught up in other matters. Apologies.

Anyhow, here’s the News Hub to catch you up. When the biggest news story is where LeBron James is going, you know it’s a slow news day (but keep an eye out for that ECRI index, Mousketeers.) And if you wanna see Evan Newmark give me a hard time, well, here’s your chance.

On the News Hub this morning, we discussed Sara Murray’s page one story in the Journal, about the debate over jobless benefits, and whether extending them leads people to stay unemployed. We’ve been here before with this on this blog, but I guess we’re going there again.

Let’s be clear about one thing: there is no concrete proof that jobless benefits lead people to stay unemployed. There are some studies, but it’s mainly a supposition.

But I’ll tell you what I do know: companies are not hiring. The weekly jobless claims numbers say that, and the monthly jobs reports say that. Oh, sure, there are some companies hiring out there. It’s not like the number is zero. But there are not enough jobs being created in America today, not near enough, to even start effectively absorbing all the people who have lost their jobs since the recession started.

This bit about the bennies turning people into lazy sloths sucking from the dole is beside the point. There is a business cycle that has not been restarted by all that money the government threw at the system. That’s the real problem here, not people collecting two years of unemployment benefits; I’m not saying that’s a good thing, it’s clearly not a good way to maintain an economy. The point is, it’s a symptom of something larger, not a problem in and of itself.

“The American political class will have to face up to the new reality of a semi-permanent slump for a decade or more that will blight a great number of lives,” Ambrose Evans-Pritchard writes in the Telegraph. “The cyclical recovery that normally makes it possible for most Americans to find a job if they want one is not going to happen this time because the overhang of debt, fiscal tightening, and a liquidity trap have combined to jam the mechanism.”

Continue reading…

It was strange trying to comment on the jobs report, as the numbers were coming out, but that’s what happens when your show goes live at 8:30 and the BLS’ jobs report comes out at 8:30. You can see us at the open starting at the laptop, reading the headlines crossing the Tape. (David, Reilly really jumped in a lot and kept the conversation going; I think I started getting too bogged down in trying to read the story.)

Kelly, David and myself break it down, but I’ll tell you, the more I mull this thing over, the more I think this report is worse than most people think.

This whole Markets Hub thing is evolving, so now our show is going to be coming out on WSJ.com around 11, and we’re also doing sort of in-show hits on the flagship News Hub shows at both 8:30 a.m. and 4 p.m. So this morning I was on with Kelly Evans, David Widener and Mark Hulbert discussing the outlook for the third quarter.

I’ll tell you, I’m not in the the Richard Russell “you won’t recognize America” camp, but I think we’re in for a pretty ugly swing down here. I’m at least in the “batten the hatches” camp.