Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks Bull Market Smoking Gun - 25th May 24
Congress Moves against Totalitarian Central Bank Digital Currency Schemes - 25th May 24
Government Tinkering With Prices Is Like Hiding All of the Street Signs - 25th May 24
Gold Mid Tier Mining Stocks Fundamentals - 25th May 24
Why US Interest Rates are a Nothing Burger - 24th May 24
Big Banks Are Pressuring The Fed To Losen Protection For Depositors - 24th May 24
Another Bank Failure: How to Tell if Your Bank is At Risk - 24th May 24
AI Stocks Portfolio and Tesla - 23rd May 24
All That Glitters Isn't Gold: Silver Has Outperformed Gold During This Gold Bull Run - 23rd May 24
Gold and Silver Expose Stock Market’s Phony Gains - 23rd May 24
S&P 500 Cyclical Relative Performance: Stocks Nearing Fully Valued - 23rd May 24
Nvidia NVDA Stock Earnings Rumble After Hours - 22nd May 24
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24
Micro Strategy Bubble Mania - 10th May 24
Biden's Bureau of Labor Statistics is Cooking Jobs Reports - 10th May 24
Bitcoin Price Swings Analysis - 9th May 24
Could Chinese Gold Be the Straw That Breaks the Dollar's Back? - 9th May 24
The Federal Reserve Is Broke! - 9th May 24
The Elliott Wave Crash Course - 9th May 24
Psychologically Prepared for Bitcoin Bull Market Bubble MANIA Rug Pull Corrections 2024 - 8th May 24
Why You Should Pay Attention to This Time-Tested Stock Market Indicator Now - 8th May 24
Copper: The India Factor - 8th May 24
Gold 2008 and 2022 All Over Again? Stocks, USDX - 8th May 24
Holocaust Survivor States Israel is Like Nazi Germany, The Fourth Reich - 8th May 24
Fourth Reich Invades Rafah Concentration Camp To Kill Palestinian Children - 8th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Markets Take a Break from the Decline

Stock-Markets / Financial Markets 2009 Jul 18, 2009 - 06:54 AM GMT

By: Anthony_Cherniawski

Stock-Markets

Best Financial Markets Analysis ArticleA long wait forecast for full employment to return. - The U.S. won’t see a return to “full” employment for another six years, helping to hold down inflation, according to former Federal Reserve Governor Laurence Meyer.   “I think there’s going to be a long legacy of the financial crisis and the deep recession,” Meyer said in an interview today on Bloomberg Radio. Meyer served at the Fed from 1996 to 2002.  He now is vice chairman of St. Louis-based Macroeconomic Advisers LLC.


More states see 10% unemployed.

Georgia and Alabama in June were the latest U.S. states to exceed 10 percent unemployment and Michigan’s rate topped 15 percent, as the worst job slump in the postwar era deepened.  The total number of states with at least 10 percent joblessness rose to 15, the Labor Department reported today in Washington. Six states reached their highest level of joblessness since records began in 1976.

Employers are trimming positions and delaying hiring even as reports show housing and manufacturing are stabilizing. The U.S. has lost about 6.5 million jobs since the recession began in December 2007. President Barack Obama and economists surveyed by Bloomberg News say national unemployment will reach 10 percent this year.

As GE goes, so goes the nation…

General Electric Co. declined the most in seven weeks in New York trading after second-quarter sales dropped more than analysts estimated in a global recession.   Investors wary of potential finance losses have cut GE’s market value by more than half in a year, adding urgency to Chief Executive Officer Jeffrey Immelt’s efforts to shrink GE Capital to about 30 percent of total profit by selling assets and pulling back on lending. GE Capital’s earnings fell 80 percent in the quarter.

A rare pattern in the S&P 500.

SPX.png --U.S. stocks declined today, trimming the best weekly gain since March for the Standard & Poor’s 500 Index, as lower profit at General Electric Co. and slowing sales growth at Google Inc. offset a jump in housing starts.  The mix of good news, then bad, is causing the S&P 500 to careen back and forth in an expanding pattern.  This is very emotional and unstable, according to the experts.  It is often viewed as a topping pattern, because of its volatility. 

 

 

 

Treasury bonds slipped back this week.

Bonds.png-- Treasuries fell, headed for their first weekly decline in six weeks, as housing starts in the U.S. unexpectedly rose in June, suggesting the market may be stabilizing and adding to signs the recession may be easing.      Lower borrowing costs and plunging prices are making houses more affordable, alleviating the worst housing slowdown since the Great Depression.   June’s increase in housing starts followed a 562,000 pace in May that was higher than previously estimated.

 

 

 Is this a rally…or a pause in the decline?

Gold.pngGold advanced on rising demand for the precious metal as a hedge against inflation after U.S. housing starts increased in June, adding to signs the world’s biggest economy is stabilizing.  Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, rose 0.3 metric ton to 1,094.85 tons as of yesterday, the company’s Web site showed.  

 

 

 

The Nikkei takes a break from the decline.

Nikkei.png-- Japanese stocks rose, led by property developers, after Barclays Plc gave the industry a “positive” recommendation. Companies that generate most of their revenue domestically climbed as investors shied away from global risk.  “Investors are not interested in taking on risk at the moment, which is why defensive, domestic stocks are getting a second look,” said Tomomi Yamashita, a Tokyo-based fund manager.

 

 

 

 China’s market still strong.

Shanghai Index.png-- China’s  stocks rose, driving the benchmark index to a fifth weekly gain, as signs of economic recovery spurred gains by raw-materials producers. Banks and automakers declined.     The Shanghai Composite Index added 6, or 0.2 percent, to 3,189.74 at the close, the highest in 13 months. It’s risen 2.4 percent this week. A 75 percent rally in 2009 has driven stock valuations to 33.1 times earnings, the most since March 2008 figures.

 

 

 

The dollar gets no respect.

US Dollar.png-- The dollar and the yen headed for the biggest weekly declines against the euro since May as U.S. housing starts rose and companies reported earnings that topped analysts’ estimates, boosting demand for higher-yielding assets.     The proclivity toward risk taking may be misguided at this point in the economy and the market.  Stocks are now heading into the three worst performing months of the year.  This may help the dollar regain some respect.

 

 

 

Housing starts are overwhelmed by foreclosures and defaults.

Housing Index.pngThe foreclosure plague is not going away -- it's only getting worse.  A record 1.53 million properties were in the foreclosure process -- default notices, auction sale notices and bank repossessions -- during the first six months of 2009. That was 9% more than the previous six months and 15% more than the same period of 2008, according to a report released Thursday by RealtyTrac.  This is happening despite a foreclosure moratorium!

 

 

 

 

Gasoline prices down for three weeks in a row!

Gasoline.pngEnergy Information Administration Weekly Report suggests that, “The U.S. average price for regular gasoline fell for the third week in a row, dropping eight cents to $2.53 per gallon. The price was $1.59 below last year. Prices decreased throughout the country, with the largest drop occurring in the Midwest. The price dipped seven cents on the East Coast to $2.53 per gallon. In the Midwest, the price plunged nearly 12 cents to $2.43 per gallon.”  Note:  The chart shows wholesale prices. 

 

 

 

Natural gas prices still modest.

Natural Gas.pngThe Energy Information Agency’s Natural Gas Weekly Update reports, “Though price gains this week reversed losses from the previous week, prices in all trading locations are still relatively low. Year-to-date, prices at the Henry Hub have fallen 40 percent from $5.63 per MMBtu. The current Henry Hub price of $3.37 per MMBtu has declined 70 percent from the year-ago closing price of $11.15 per MMBtu. The WTI crude oil contract has similarly declined, falling 52 percent from the closing price of $129.43 per barrel 1 year ago. Price declines in the past year are likely the result of the declining economy, reduced demand, and robust inventories.” 

 

 

Can you trust this man? 

Goldman Sachs chairman and CEO Lloyd Blankfein testifies before the House Financial Services Committee on Feb. 11, 2009In a clear departure from the historical norm, the White House is not cheering the return of huge profits to Wall Street. On the contrary, the recent windfalls at Goldman Sachs and JPMorgan, and the promise of giant year-end paydays for banking executives and traders, has caused a bit of consternation in the West Wing, coming as it does so soon after the taxpayer bailouts saved the entire financial system from total collapse.     

"If I were a Wall Street firm, I would perhaps be cognizant of the fact that the financial regulatory-reform process is only beginning in Congress," warns a senior White House official, speaking about the political problems that huge paydays at Wall Street firms could create later this year, when new laws to regulate the industry will be written on Capitol Hill. Officials have also begun to worry aloud whether the Wall Street firms learned anything from the catastrophic financial crisis that was largely of their making or whether they are now returning to the old business of making short-term profits that create long-term risks.

Our Investment Advisor Registration is on the Web

We are in the process of updating our website at www.thepracticalinvestor.com to have more information on our services. Log on and click on Advisor Registration to get more details.

If you are a client or wish to become one, please make an appointment to discuss our investment strategies by calling Connie or Tony at (517) 699-1554, ext 10 or 11. Or e-mail us at tpi@thepracticalinvestor.com .

Anthony M. Cherniawski,
President and CIO
http://www.thepracticalinvestor.com

As a State Registered Investment Advisor, The Practical Investor (TPI) manages private client investment portfolios using a proprietary investment strategy created by Chief Investment Officer Tony Cherniawski. Throughout 2000-01, when many investors felt the pain of double digit market losses, TPI successfully navigated the choppy investment waters, creating a profit for our private investment clients. With a focus on preserving assets and capitalizing on opportunities, TPI clients benefited greatly from the TPI strategies, allowing them to stay on track with their life goals

Disclaimer: The content in this article is written for educational and informational purposes only.  There is no offer or recommendation to buy or sell any security and no information contained here should be interpreted or construed as investment advice. Do you own due diligence as the information in this article is the opinion of Anthony M. Cherniawski and subject to change without notice.

Anthony M. Cherniawski Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in