The persistent pattern of sideways trade held sway one more day on Wall Street, despite the ADP private employment report offering a glimpse of Friday's government non-farm payroll data. The ADP report showed employers shedding 20,000 jobs in February, which was better than most analysts were seeking. Still, those numbers - and a rise in ISM service index from 50.5 to 53.0 from January to February - hardly moved the needle.
Naturally, there were a good share of both winners and losers, but the overall markets are about as stagnant as a Louisiana swamp. The problem is that these stocks represent real money, currently not working very hard for anybody.
Dow 10,396.76, -9.22 (0.09%)
NASDAQ 2,280.68, -0.11 (0.00%)
S&P 500 1,118.79, +0.48 (0.04%)
NYSE Composite 7,164.66, +28.69 (0.40%)
Advancing issues beat back decliners once again, 3575-2890, though the margin was not nearly as large as in recent days. New highs led new lows, 555-45. Volume was led by the NASDAQ. The NYSE continues to exhibit signs of flagging interest with low volume a daily occurrence.
NYSE Volume 4,475,734,000
NASDAQ Volume 2,474,973,500
Meanwhile, commodities, especially those in the energy sector, were spinning out of control. Oil shot up another $1.27, to $80.95, with April wholesale gas futures at multi-month highs of $2.25/gallon. Gold gained $6.60, to $1,144.00. Silver was up 25 cents, to $17.31.
The outlook for the February non-farm payroll data due out Friday morning continues to be clouded by forecasts that snow storms during the month may have skewed the data significantly. Also in play is the hiring of workers for the 2010 census. That was supposed to boost employment significantly over 2nd and 3rd quarters of the year, though the effect probably won't be felt until the march data is released a month from now.
Wednesday, March 03, 2010
Tuesday, March 02, 2010
Stuck In Neutral
By tomorrow morning's opening bell, there will be some sense of direction, and that sense is likely - based on observations from market sources - to be lower. The reason stocks may not be such good buys as of tomorrow morning is fear that Friday's non-farm payroll data for February will disappoint, and that tomorrow morning's 8:30 am ET release of ADP's private payroll figure will offer a sneak preview.
The Obama administration, rather than actually trying to mend the broken employment conditions in the US, has been resorting lately to downplaying expectations, which can only mean that Friday's numbers will be somewhere below estimates of the economy shedding 20-45,000 jobs. Some have actually suggested that the figure could fall into a range of 175-200,000 more job losses, of which the Obamanites will claim had much to do with recent snowstorms that plagued the Northeast through the month.
Well, if there's anything politicians can do well, it's disappoint, and blame it on the weather. Snowstorms, hurricanes, droughts, windy conditions do not affect a stable employment picture, and what we've got is an unstable one. Add to that the utter incompetence at the top - not only the administration, but congress as well, and there's a sure recipe for disaster.
In the meantime, investors and traders marked time in anticipation of the results. Wednesday's warm-up with the ADP report will surely shed some light; how much is unknown, though the gauge, issued at the beginning of each month two days prior to the government data, has proven highly reliable in its short life (less than a year).
Dow 10,405.98, +2.19 (0.02%)
NASDAQ 2,280.79, +7.22 (0.32%)
S&P 500 1,118.31, +2.60 (0.23%)
NYSE Compos 7,135.97, +35.22 (0.50%)
Making the tiny headline numbers appear understated, gainers outpaced losers on the day by a good spread, 4477-2023, better than 2:1. The number of new highs was once again elevated, at 624; there were only 48 new lows. Those number will change dramatically by the end of the month, more than likely in favor of new lows. Volume on the session was very strong on the NASDAQ, not so good on the NYSE.
NYSE Volume 4,788,700,000
NASDAQ Volume 2,683,460,000
Commodities are once again acting like demand is robust, though the current price regime is more about trading, seasonality and short-term profits rather than real supply-demand metrics. Oil was up $1.02, to $79.72. Gold gained $19.00, to $1,137.30, while silver shot up 59 cents, to $17.06. While pricing in the energy complex can be chalked up to seasonal conditions (doesn't fuel always go up when people drive more in the Spring?), the metals are retracing their gains from last year in a technical move that probably will end up pushing against new highs. At some point, gold investors will realize that their precious metal is in just another bubble, created by speculators and quick-buck artists. After rising for nine straight years, gold's price is reflective of two things: greed, and widespread distrust of current monetary and fiscal policies of countries using fiat currencies.
If the detractors of floating exchange rates, the Euro experiment and gobs of debt around the world are correct, the precious metals will be even more so in months and years ahead. The wild card in their calculations, however, is global deflation, which would undermine almost any asset, including gold, silver and platinum. Time will tell.
The Obama administration, rather than actually trying to mend the broken employment conditions in the US, has been resorting lately to downplaying expectations, which can only mean that Friday's numbers will be somewhere below estimates of the economy shedding 20-45,000 jobs. Some have actually suggested that the figure could fall into a range of 175-200,000 more job losses, of which the Obamanites will claim had much to do with recent snowstorms that plagued the Northeast through the month.
Well, if there's anything politicians can do well, it's disappoint, and blame it on the weather. Snowstorms, hurricanes, droughts, windy conditions do not affect a stable employment picture, and what we've got is an unstable one. Add to that the utter incompetence at the top - not only the administration, but congress as well, and there's a sure recipe for disaster.
In the meantime, investors and traders marked time in anticipation of the results. Wednesday's warm-up with the ADP report will surely shed some light; how much is unknown, though the gauge, issued at the beginning of each month two days prior to the government data, has proven highly reliable in its short life (less than a year).
Dow 10,405.98, +2.19 (0.02%)
NASDAQ 2,280.79, +7.22 (0.32%)
S&P 500 1,118.31, +2.60 (0.23%)
NYSE Compos 7,135.97, +35.22 (0.50%)
Making the tiny headline numbers appear understated, gainers outpaced losers on the day by a good spread, 4477-2023, better than 2:1. The number of new highs was once again elevated, at 624; there were only 48 new lows. Those number will change dramatically by the end of the month, more than likely in favor of new lows. Volume on the session was very strong on the NASDAQ, not so good on the NYSE.
NYSE Volume 4,788,700,000
NASDAQ Volume 2,683,460,000
Commodities are once again acting like demand is robust, though the current price regime is more about trading, seasonality and short-term profits rather than real supply-demand metrics. Oil was up $1.02, to $79.72. Gold gained $19.00, to $1,137.30, while silver shot up 59 cents, to $17.06. While pricing in the energy complex can be chalked up to seasonal conditions (doesn't fuel always go up when people drive more in the Spring?), the metals are retracing their gains from last year in a technical move that probably will end up pushing against new highs. At some point, gold investors will realize that their precious metal is in just another bubble, created by speculators and quick-buck artists. After rising for nine straight years, gold's price is reflective of two things: greed, and widespread distrust of current monetary and fiscal policies of countries using fiat currencies.
If the detractors of floating exchange rates, the Euro experiment and gobs of debt around the world are correct, the precious metals will be even more so in months and years ahead. The wild card in their calculations, however, is global deflation, which would undermine almost any asset, including gold, silver and platinum. Time will tell.
Label:
ADP,
gold,
non-farm payroll,
silver
Monday, March 01, 2010
March Comes in Like a Lion
Following weeks of seemingly-relentless snowstorms and market turmoil, investors looked forward (maybe) to new gains with the coming of Spring - now just 19 days away.
The NASDAQ was the clear winner on the day, breaking loose from its moorings at the 50-day moving average and powering ahead for a return of better than 1.5%. The Dow was the laggard of the group, though it may be more indicative of where stocks are really headed: nowhere fast. Both the Dow and S&P 500 indices are stuck at or near their 50-day moving averages in anticipation of Friday's key non farm payroll report for February.
Overall, market conditions are vastly improved from a year ago, though the overhang of debt - federal, state, Greek, household and otherwise - still remains prominent on investor minds. The question remains whether the recovery is actually providing progress or is still a mirage, a house of debt cards that eventually must tumble. Most investors - for today, at least - see the glass as half full. A positive employment report would likely send stocks through the recent January highs, setting off even more speculative market play. The chances for such an event seem very good, given the government's recent effort to manage both expectations and the massaging of key data.
Current expectations are for job losses in February to maintain their level of between 20 and 50,000, which would actually be not very good news, so the government and Wall Street could tag-team to new levels if the data can show an actual increase in the number of people working for a living in the USA. We'll all know by Friday morning, but a good indicator will be ADP's private payroll report on Wednesday, also looking for a decline, albeit, a smaller one.
Meanwhile, cash remains king of all assets, especially with the US dollar continuing to gain versus most other currencies. While the US may have a bad cold, the rest of the world (especially Europe) is suffering from anything ranging from common flu to the bubonic plague.
Notwithstanding the NASDAQ, stocks may be hard-pressed to reach beyond levels seen on February 19, the last interim high, still overhead. Many stocks are approaching p/e levels usually reserved for hot tech stocks in early stages of growth. When stocks such as Home Depot are trading at 20 times earnings, there should be cause for caution and requisite concern. The markets are still at inflection points, and the general trend lower has not been broken.
That stocks may be stuck should come as no surprise after last year's spectacular run-up off the crash. We stand just 6 trading days away from the 1-year anniversary of the market bottom, a notable event.
Dow 10,403.79, +78.53 (0.76%)
NASDAQ 2,273.57, +35.31 (1.58%)
S&P 500 1,115.71, +11.22 (1.02%)
NYSE Composite 7,100.75, +65.71 (0.93%)
Advancers dominated declining issues by a margin of better than 3:1, with 5009 stocks higher and 1528 lower. There were 534 new highs, owing to the comparisons to last year, against just 48 new lows. Volume was very solid on the NASDAQ, but below average on the NYSE.
NYSE Volume 4,388,033,000
NASDAQ Volume 2,373,148,500
For a change, oil actually traded lower, down 90 cents, to $78.76. The metals remained about even, with gold losing 60 cents, to $1,118.30, and silver down 6 cents, at $16.46. More than a few analysts are calling for higher commodity prices, though the deflationists will stick to their guns, expressing the unpopular belief that prices of assets cannot rise in an environment dominated by deficits, debt and destruction of wealth, still ongoing.
Stock traders made the best of the day, though there really is still no major catalyst for another move higher. In fact, housing continues to stagger along, with construction spending falling for the third straight month, down 0.6% in January.
According to the Associated General Contractors of America, construction hit a 6-year low in 2009, led by huge declines in lodging, retail and office building. While not attempting to argue with the facts, private construction spending can actually get worse in 2010, as there are still no signs that the flagging economy is doing anything other than simply bumping along the bottom.
The NASDAQ was the clear winner on the day, breaking loose from its moorings at the 50-day moving average and powering ahead for a return of better than 1.5%. The Dow was the laggard of the group, though it may be more indicative of where stocks are really headed: nowhere fast. Both the Dow and S&P 500 indices are stuck at or near their 50-day moving averages in anticipation of Friday's key non farm payroll report for February.
Overall, market conditions are vastly improved from a year ago, though the overhang of debt - federal, state, Greek, household and otherwise - still remains prominent on investor minds. The question remains whether the recovery is actually providing progress or is still a mirage, a house of debt cards that eventually must tumble. Most investors - for today, at least - see the glass as half full. A positive employment report would likely send stocks through the recent January highs, setting off even more speculative market play. The chances for such an event seem very good, given the government's recent effort to manage both expectations and the massaging of key data.
Current expectations are for job losses in February to maintain their level of between 20 and 50,000, which would actually be not very good news, so the government and Wall Street could tag-team to new levels if the data can show an actual increase in the number of people working for a living in the USA. We'll all know by Friday morning, but a good indicator will be ADP's private payroll report on Wednesday, also looking for a decline, albeit, a smaller one.
Meanwhile, cash remains king of all assets, especially with the US dollar continuing to gain versus most other currencies. While the US may have a bad cold, the rest of the world (especially Europe) is suffering from anything ranging from common flu to the bubonic plague.
Notwithstanding the NASDAQ, stocks may be hard-pressed to reach beyond levels seen on February 19, the last interim high, still overhead. Many stocks are approaching p/e levels usually reserved for hot tech stocks in early stages of growth. When stocks such as Home Depot are trading at 20 times earnings, there should be cause for caution and requisite concern. The markets are still at inflection points, and the general trend lower has not been broken.
That stocks may be stuck should come as no surprise after last year's spectacular run-up off the crash. We stand just 6 trading days away from the 1-year anniversary of the market bottom, a notable event.
Dow 10,403.79, +78.53 (0.76%)
NASDAQ 2,273.57, +35.31 (1.58%)
S&P 500 1,115.71, +11.22 (1.02%)
NYSE Composite 7,100.75, +65.71 (0.93%)
Advancers dominated declining issues by a margin of better than 3:1, with 5009 stocks higher and 1528 lower. There were 534 new highs, owing to the comparisons to last year, against just 48 new lows. Volume was very solid on the NASDAQ, but below average on the NYSE.
NYSE Volume 4,388,033,000
NASDAQ Volume 2,373,148,500
For a change, oil actually traded lower, down 90 cents, to $78.76. The metals remained about even, with gold losing 60 cents, to $1,118.30, and silver down 6 cents, at $16.46. More than a few analysts are calling for higher commodity prices, though the deflationists will stick to their guns, expressing the unpopular belief that prices of assets cannot rise in an environment dominated by deficits, debt and destruction of wealth, still ongoing.
Stock traders made the best of the day, though there really is still no major catalyst for another move higher. In fact, housing continues to stagger along, with construction spending falling for the third straight month, down 0.6% in January.
According to the Associated General Contractors of America, construction hit a 6-year low in 2009, led by huge declines in lodging, retail and office building. While not attempting to argue with the facts, private construction spending can actually get worse in 2010, as there are still no signs that the flagging economy is doing anything other than simply bumping along the bottom.
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