US stocks slip in a fitful session, after the ISM-Chicago report derails a lot of recovery talk. Still, the major indexes posted their sharpest quarterly gains in about a decade.
DJIA loses 30 (0.3%) to 9712, after falling as much as 133 early; but the index gained about 15% for the quarter. S&P loses 4 (0.4%) to 1057, Nasdaq Comp drops 2 to 2122.
The numbers are pretty eye-opening. For the Dow, it was the best quarter overall since the 4Q of 1998. It was also the index’s best 3Q since 1939, when it rose 16.8%. It’s the index’s second straight rising quarter, after falling for the previous six. For those two quarters, the index is up about 28%, its best two-quarter string since the two quarters than ended in March 1987, when it rose 30%.
Posted by Paul Vignaon September 30, 2009 Economy, Markets /
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That ISM-Chicago report, which slipped back into recession territory, really threw the market for a loop, and while stocks will still close out the quarter with healthy gains, investors and policy makers alike are left to question just how firm the recovery is.
You got to know when to hold 'em, and know when to fold 'em.
The market’s shown more ebb and flow lately, and depending upon how far it ebbs, especially on a day like today, you’ll get a good idea of whether or not the bulls can keep it flowing.
The Dow dropped more than 100 points earlier today on surprisingly weak manufacturing data. But, as has been evident throughout this ferocious rally, stocks slowly drifted off their intraday lows and turned positive, suggesting investors are maintaining the “buy on the dip” mentality.
The action isn’t surprising, especially since this has been a recurring theme throughout the rally. But whether the rebound today is sustainable into the close will be the true test.
It seem like only a matter of time before the bulls will run out of steam and won’t be able to keep erasing intraday losses. The early dip today was also larger than usual compared to other dips over the last few months. And the further stocks keep falling at the open, the harder it’ll ultimately be to recover.
We have not yet rebuilt our economic engine, but that isn’t stopping some people from looking down the road.
There’s a lot of talk of revival and V-shaped recoveries these days. But so far, the only thing holding up the economy is still government support, and I have not yet heard one good explanation of what’s going to come along to replace Uncle Sam’s helping hand.
Essentially, the economy is like a car without an engine, and the government is driving the tow truck. What is going to drive consumer demand, which will drive inventory rebuilding, which will drive hiring and wages, which will drive consumer demand again?
It is very important to understand that the government’s gone far beyond what it usually does to combat recession. Trillions have been thrown into the economy in an all-out effort to stop the slide into depression and restore consumer spending patterns. Bailout schemes that involve hundreds of billions of (borrowed) taxpayer monies have become routine.
At some point, some thing in the private sector is going to have to replace those government supports. It hasn’t come along yet, but a lot of people aren’t waiting for it to appear.
Signals suggest some emphasis on the weak-dollar trade this morning, with oil, gold and premarket equity futures all moving higher. Bears had a minor edge yesterday after September consumer confidence disappointed, but still they’re still not wielding enough gusto to throw bulls off balance.
And for what it’s worth, today is the last day of the 3Q, a quarter that’s been pretty good for stocks, to say the least. The Dow has gained 15% through yesterday, in line for its best quarter since the 4Q of 1998. It’s the index’s best 3Q on a percentage basis since 1939.
But bulls aren’t getting much heft from economic data anymore, with any improvements already well-priced into stocks. Makes you wonder how much good news on 3Q earnings is already priced in, too.
ADP’s estimate on Sept private-sector job losses due at 8:15am; final look at 2Q GDP at 8:30am; and Sept Chicago PMI at 9:45am ET.
S&P futures up 4.50; DJ futures up 36. Ten-year lower, yield at 3.31%. Euro’s at $1.4641.
US stocks slip in another light-volume session, after a disappointing report on consumer confidence and despite hopeful signs in latest Case-Shiller report.
DJIA drops 47 (0.5%) to 9742, S&P 500 eases 2 to 1061, Nasdaq Comp loses 7 to 2124. Volume’s higher than yesterday, but still below average. Selling picks up toward the closing bell.
Conference Board says consumer confidence slipped in September. Case-Shiller index shows home prices rose in July from June, although they remain sharply down from a year ago. FDIC hits the banks up for three years’ worth of funding, showing just how far and wide the credit crisis has reached. I mean, how often does a government agency run out of money?
US stocks are on pace for their best quarterly finish in more than 10 years, yet it’s still nearly impossible to determine whether this ferocious rally is the beginning of a sustainable bull market or just a cyclical run-up amid a much deeper bear market.
The Dow closed down 47 at 9742, cutting into yesterday’s 124-point gain, but the index is still on pace for its best quarterly performance since 4Q98. Despite the rally, treasury yields have dropped to levels last seen in the spring, prompting concern about the underlying reason for the increased demand.
“Investors’ appetite for long-term Treasuries could be a bad sign for the economy, if it’s based on buyers’ desire to lock in safe fixed returns because they believe the economic recovery will be cut short,” says LA Times’ Money & Co blogger Tom Petruno.
The 30-year Treasury bond at 4.03% is an important level to watch. He cites Tony Crescenzi, a bond portfolio manager at Pimco, who says a slide through the 4% level would suggest a “breakdown” of faith concerning the economic recovery.
Nevertheless, stocks have gained nearly 15% in 3Q, with the quarter officially coming to an end tomorrow. But even amid the rising stock market, many bearish indicators are still prevalent.
Posted by Steven Russolilloon September 29, 2009 Banks, Washington /
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Newswires’ Marshall Eckblad reports:
Bashing bailed-out banks is becoming a booming business for the nation’s small banks.
“Why should Texans bank with out-of-state carpetbaggers?” asks a new ad campaign by the Texas Dow Employees Credit Union. Another of the lender’s ads excoriates the U.S. mega-banks for “taking taxpayer money and paying themselves billions in bonuses.”
The ad continues, “We respectfully suggest they head on home and make their profits in their own backyard.”
There’s certainly no shortage of public rage being directed at large banks these days. And some Main Street banks think they can use that rage to poach some customers.
With the yen quickly falling through the Y90 level to the dollar (although currently it is just above the mark,) the new Japanese government, which noisily said it wouldn’t intervene in currency markets, is already being tested, and they may be forced to backtrack on that particular notion, as Dow Jones’ Nick Hastings explains.
Dallas Fed President Richard Fisher, who famously said back in 2005 the Fed was in the eighth inning in its fight with inflation, was back in the metaphor game yesterday, opining in the Journal that so-called “too big to fail” banks are like some all-consuming blob in a science fiction movie.
Fans of campy science fiction films know all too well that outsized monsters can wreak havoc on an otherwise peaceful and orderly society.
But what B-movie writer could have conjured up this scary scenario—Too Big To Fail (TBTF) banks as the Blob that ate monetary policy and crippled the global economy? That’s just about what we’ve seen in the financial crisis that began in 2007.
It’s an amusing analogy, but it’s missing a critical element: the mad scientist who created the deadly mass and loosed it upon the world.
The recent Bank for International Settlements FX market survey unvelied a number of trends. One that didn’t get much coverage was some of the reordering of the top ten trading centers around the world. Not huge shifts but interesting nonetheless. For example, Switzerland – home of two of the largest FX trading banks in UBS [...] […]
