Stocks keep waffling in what looks like it will be a day when little is decided. Dow is up 58, advancers ahead of decliners 3-2 while NAZ is up 31. The S&P 500 is up 6 but the FINANCIALS INDEX & other indices I follow are flattish.
This is a good time to look at stock performance. The S&P 500 has had one of its worst years, not to mention its worst Nov. These are rough times.
26 Nov 2008.....863 (midday)
31 Oct 2008......969
31 Dec 2007....1468
General Motors (GM) bonds are trading around 20¢ on the dollar. Bond holders such as Pimco may have to endure huge losses as part of a potential bailout plan for GM, one more huge headache to deal with.
•Pimco, Franklin GM Debt May Lose 75% of Face Value in Government Aid Deal
This week stocks have been absorbing very well the ugly economic news being reported. Dow is on a 3 day winning streak, trying to make it 4 in a row. However they are coming off extremely oversold markets. Markets close at 1PM EST on Fri, not a lot is expected then.
Showing posts with label SandP 500. Show all posts
Showing posts with label SandP 500. Show all posts
Wednesday, November 26, 2008
Friday, November 7, 2008
Markets hang on to early gains
Dow rose a couple hundred out of the gate & remained pretty much flat for the rest of the trading day. The negative unemployment report & threats of possible failures by the auto companies did not keep buyers away. With a 180 point rally in the last 30 minutes, Dow ended up 248, advancers led decliners by 2-1 & NAZ was up 38. The indices I follow posted gains, the best being 9.37 for the greatly oversold Dow Jones REIT Index. The S&P 500 FINANCIALS INDEX managed a gain of 3.69 after being flat much of the day. VIX declined 5.10 to 58½, probably due to the rising markets. Oil was up pennies, just under 61.
General Motors (GM), a Dow stock, reported a Q3 loss of 4.2B & said it may not have enough cash to stay alive THRU NEXT MONTH. The mighty auto industry is shaky & implications for the economy of the failure for any or all 3 auto companies boggles the mind. But markets were little concerned today.
•GM Says It May Not Have Enough Cash to Finish Year, Suspends Merger Talks
Goldman Sachs is cutting profit forecast for the S&P 500 by 10% in 2008 & 9% for next year. The are estimating this year, S&P will earn $65 & next year it should rise to $68. No big surprise.
•Goldman Cuts 2008, 2009 S&P 500 Profit Forecasts, Citing Economic Slowdown
Markets had another rough week but pulled into the lower half of the 8-10K trading range. The 11K level which used to be thought of as a floor, now is a level many would like to regain:
Dow Jones Industrials --- 2 months
John Chambers, head of Cisco (CSCO), after reporting earnings this week, said Cisco is gearing up for a very tough economic environment around the world. I think he expressed well what business people & investors are facing.
General Motors (GM), a Dow stock, reported a Q3 loss of 4.2B & said it may not have enough cash to stay alive THRU NEXT MONTH. The mighty auto industry is shaky & implications for the economy of the failure for any or all 3 auto companies boggles the mind. But markets were little concerned today.
•GM Says It May Not Have Enough Cash to Finish Year, Suspends Merger Talks
Goldman Sachs is cutting profit forecast for the S&P 500 by 10% in 2008 & 9% for next year. The are estimating this year, S&P will earn $65 & next year it should rise to $68. No big surprise.
•Goldman Cuts 2008, 2009 S&P 500 Profit Forecasts, Citing Economic Slowdown
Markets had another rough week but pulled into the lower half of the 8-10K trading range. The 11K level which used to be thought of as a floor, now is a level many would like to regain:
Dow Jones Industrials --- 2 months
John Chambers, head of Cisco (CSCO), after reporting earnings this week, said Cisco is gearing up for a very tough economic environment around the world. I think he expressed well what business people & investors are facing.
Wednesday, September 17, 2008
Controlled bankruptcy for AIG
These are historic times for financial markets. AIG had been one of the few (about 12) companies with AAA rated debt (probably downgraded one notch in the last few months) & a Dow stock. Their bonds are now a touch above default & their Dow history should only last for another day or 2. The gov assessed that letting them fail would do brutal damage to the world economies, so they stepped in to save them.
Gov involvement in financial markets has EXPLODED this year. The FED is actively providing credit to investment banks, etc. when they think it's in the national interest. Their lending is backed by collateral they would not have dreamed of accepting just a year ago. A band aid approach to monumental problems is about all that can be done, but it is unclear how long run implications will play out. Need evidence of active FED involvement with the financials:
•Treasury Plans Special Auctions of Debt to Help Fed Manage Balance Sheet
Below is a tiny glimpse based on the first news release of how this will play out:
Dow is down 253, decliners over advancers 7-1 & NAZ declined 61. The closely watched S&P 500 is back below the important 1200 line in the sand:
S&P 500 FINANCIALS INDEX is down 15 to 253, nearing the 252 low reached a couple of days ago & not far from 232 low on July 15. Not too bad a performance considering how the ugly the news has been!
Let's not forget about oil. After dropping 10 in 2 days (an eye popping decline), it's back on the rebound amidst all the confusion in financial markets. The Alerian MLP index after pulling back to lows last seen over 3 years ago is down 4 today to 288.
I'm a big fan of the long run. Below is S&P 500 since the 70s:
S&P 500
10 years ago it went through 1K, today's it's less than 20% higher. That's one rough decade.
By way of contrast, the MLP index is about double the value 10 years ago (not to mention getting through the awful 2000 era decline in much better shape):
Alerian MLP index
At times like these it's easy to think that Chicken Little got it right, The Sky is Falling. The long run track records reminded us that there have been big bumps along the way (i.e. 2000 era was an enormous one), but the economy & stock markets persevered, and, eventually, went up. This is the time for dull homework to plan for purchases at attractive, depressed prices.
Gov involvement in financial markets has EXPLODED this year. The FED is actively providing credit to investment banks, etc. when they think it's in the national interest. Their lending is backed by collateral they would not have dreamed of accepting just a year ago. A band aid approach to monumental problems is about all that can be done, but it is unclear how long run implications will play out. Need evidence of active FED involvement with the financials:
•Treasury Plans Special Auctions of Debt to Help Fed Manage Balance Sheet
Below is a tiny glimpse based on the first news release of how this will play out:
Dow is down 253, decliners over advancers 7-1 & NAZ declined 61. The closely watched S&P 500 is back below the important 1200 line in the sand:
| S&P 500 | ... 1,181.00 | ...-32.59 | ...-2.7% |
S&P 500 FINANCIALS INDEX is down 15 to 253, nearing the 252 low reached a couple of days ago & not far from 232 low on July 15. Not too bad a performance considering how the ugly the news has been!
Let's not forget about oil. After dropping 10 in 2 days (an eye popping decline), it's back on the rebound amidst all the confusion in financial markets. The Alerian MLP index after pulling back to lows last seen over 3 years ago is down 4 today to 288.
| CLV08.NYM | Crude Oil Oct 08 | __ 93.66 | __ 2.51 (2.75%) |
I'm a big fan of the long run. Below is S&P 500 since the 70s:
S&P 500
10 years ago it went through 1K, today's it's less than 20% higher. That's one rough decade.
By way of contrast, the MLP index is about double the value 10 years ago (not to mention getting through the awful 2000 era decline in much better shape):
Alerian MLP index
At times like these it's easy to think that Chicken Little got it right, The Sky is Falling. The long run track records reminded us that there have been big bumps along the way (i.e. 2000 era was an enormous one), but the economy & stock markets persevered, and, eventually, went up. This is the time for dull homework to plan for purchases at attractive, depressed prices.
Monday, September 15, 2008
One ugly day for financials
Last night, Bloomberg.Asia TV was all about Lehman going under & Merrilll Lynch being bought out. All kinds of experts gave lots of opinions, but they are just guesses. New rules are being written which will change markets & nobody knows how this will play out. Very scary!
Pre-trading Dow was down 300 overnight. This morning in pre-markets, Dow was down about 350 & S&P was down over over 40. Maybe that's not so bad given all the confusion in the markets. After the initial plunge, there has been some recovery (as noted on my widget from Bigcharts on the right). Indices have halved their losses, but Dow is still down 270 as the recovery suffered a setback. Decliners are over advancers 7-1, one rough market. The S&P 500 FINANCIALS INDEX is down 14 to 284, near the morning lows. A big drag is Bank of America down 5 on the Merrill Lynch buyout.
From Bloomberg, here are a ton of articles, this is a very bad day for news, all grim:
•Lehman Files for Record Bankruptcy, Victim of Meltdown Firm Helped Create
•Stocks in U.S. Drop as Lehman Bankruptcy Deepens Turmoil in Credit Markets
•AIG Slumps After Insurer Rejects Buyout Offers, Seeks $40 Billion Fed Loan
•Bank of America Will Buy Merrill for $50 Billion as Credit Crisis Broadens
•Oil, Gasoline Tumble as Lehman Fails, Hurricane Ike Spares U.S. Refineries
•Pimco, Vanguard, Franklin Are Biggest Bond Fund Losers in Lehman Collapse
•Emerging-Market `Panic' Masks Record Profits, May End With 20% Stock Rally
•Houston Struggles to Recover From Hurricane Ike as Midwest Hit by Flooding
The financials continue in center stage as Lehman is history & Merrill Lynch is being bought out by Bank of America (BAC). American International Group (AIG), Dow stock, is officially shaky as its stock plunged into the 6s. They used to be the largest insurance company in the world. Insurance companies own stocks, chances are they may be selling a lot to raise cash. Washington Mutual (WM) is also shaky, heading back down to the low 2's.
Oil is getting clobbered (down 4 to 97 after falling to 95) despite the infrastructure damage in east Texas. Prices at the pumps around the country are spiking up on ugly thoughts about their supplies. That's a punch the economy does not need. The Alerian MLP index, in sympathy to lower oil prices, sold off 5 remaining near levels last seen 3 years ago.
The S&P 500 at 1225, is holding above 1200, a key support level (the July 15 low). If that floor does not hold, look out below! At the FED meeting this week, all of a sudden it is now assumed that they will cut rates again. That's a short term reaction, but may haunt the economy in the longer term. Amidst the chaos, it is best to try to stay cool. Use these trying times to prepare for buying opportunities in oversold stocks.
Pre-trading Dow was down 300 overnight. This morning in pre-markets, Dow was down about 350 & S&P was down over over 40. Maybe that's not so bad given all the confusion in the markets. After the initial plunge, there has been some recovery (as noted on my widget from Bigcharts on the right). Indices have halved their losses, but Dow is still down 270 as the recovery suffered a setback. Decliners are over advancers 7-1, one rough market. The S&P 500 FINANCIALS INDEX is down 14 to 284, near the morning lows. A big drag is Bank of America down 5 on the Merrill Lynch buyout.
From Bloomberg, here are a ton of articles, this is a very bad day for news, all grim:
•Lehman Files for Record Bankruptcy, Victim of Meltdown Firm Helped Create
•Stocks in U.S. Drop as Lehman Bankruptcy Deepens Turmoil in Credit Markets
•AIG Slumps After Insurer Rejects Buyout Offers, Seeks $40 Billion Fed Loan
•Bank of America Will Buy Merrill for $50 Billion as Credit Crisis Broadens
•Oil, Gasoline Tumble as Lehman Fails, Hurricane Ike Spares U.S. Refineries
•Pimco, Vanguard, Franklin Are Biggest Bond Fund Losers in Lehman Collapse
•Emerging-Market `Panic' Masks Record Profits, May End With 20% Stock Rally
•Houston Struggles to Recover From Hurricane Ike as Midwest Hit by Flooding
The financials continue in center stage as Lehman is history & Merrill Lynch is being bought out by Bank of America (BAC). American International Group (AIG), Dow stock, is officially shaky as its stock plunged into the 6s. They used to be the largest insurance company in the world. Insurance companies own stocks, chances are they may be selling a lot to raise cash. Washington Mutual (WM) is also shaky, heading back down to the low 2's.
Oil is getting clobbered (down 4 to 97 after falling to 95) despite the infrastructure damage in east Texas. Prices at the pumps around the country are spiking up on ugly thoughts about their supplies. That's a punch the economy does not need. The Alerian MLP index, in sympathy to lower oil prices, sold off 5 remaining near levels last seen 3 years ago.
The S&P 500 at 1225, is holding above 1200, a key support level (the July 15 low). If that floor does not hold, look out below! At the FED meeting this week, all of a sudden it is now assumed that they will cut rates again. That's a short term reaction, but may haunt the economy in the longer term. Amidst the chaos, it is best to try to stay cool. Use these trying times to prepare for buying opportunities in oversold stocks.
Thursday, September 4, 2008
One ugly day
Dow tumbled 344, decliners over advancers 5-1 and NAZ was down 74, making for the kind of day that has become routine this year. NYSE volume continues modest at 1.3B. The S&P 500 FINANCIALS INDEX got slapped hard today, down 14 to 281, just above 277 reached 2 days after the 232 low set on Jul 15. Financials dropped 5% after bond's biggest investor, Bill Gross, warned of a "financial tsunami" (mentioned in my AM post & linked on his name here).
Crude oil for October fell to settle under $108. This was oil's 5th straight decline & the lowest settlement price since April 4. The Alerian MLP index dropped 3 to 264s approaching its 2 year low, 258, reached last month.
Demand destruction is a phrase used a lot by analysts in Asia, thanks to night time visits with them on Asia-CNBC. It is what it sounds like, high prices for commodities destroys demand. This is most visible with oil, but affects all commodities after their recent fall from their price peaks. They say this could be the fundamental cause for the fall in oil prices & the rest of the commodity group.
Earlier this year, analysts were talking about 1270 on the S&P 500 being an important support line. The graph below shows that it has held fairly well, allowing for limited minor dips below in the last couple of months. Today at 1236 it's testing the soggy floor (1200+) again. But this time the S&P 500 has declined for 4 consecutive days, worst performance since Jan.
With all the attention paid to oil & weather recently, don't forget about the mortgage mess & other problems with the large financial institutions. Lehman (LEH) is trying to wriggle out of its mortgage portfolio so as to get a better price for selling itself to an outsider. With the low quality of these assets, this could drag on for days or even weeks (not a help to other financials).
•Lehman Mulls Plan to Shift $32 Billion of Mortgage Assets to a `Bad Bank'
Crude oil for October fell to settle under $108. This was oil's 5th straight decline & the lowest settlement price since April 4. The Alerian MLP index dropped 3 to 264s approaching its 2 year low, 258, reached last month.
| CLV08.NYM | .. Crude Oil Oct 08 | ... 107.99 | ...  1.36 (1.2%) |
Demand destruction is a phrase used a lot by analysts in Asia, thanks to night time visits with them on Asia-CNBC. It is what it sounds like, high prices for commodities destroys demand. This is most visible with oil, but affects all commodities after their recent fall from their price peaks. They say this could be the fundamental cause for the fall in oil prices & the rest of the commodity group.
Earlier this year, analysts were talking about 1270 on the S&P 500 being an important support line. The graph below shows that it has held fairly well, allowing for limited minor dips below in the last couple of months. Today at 1236 it's testing the soggy floor (1200+) again. But this time the S&P 500 has declined for 4 consecutive days, worst performance since Jan.
S&P 500 --- YTD
With all the attention paid to oil & weather recently, don't forget about the mortgage mess & other problems with the large financial institutions. Lehman (LEH) is trying to wriggle out of its mortgage portfolio so as to get a better price for selling itself to an outsider. With the low quality of these assets, this could drag on for days or even weeks (not a help to other financials).
•Lehman Mulls Plan to Shift $32 Billion of Mortgage Assets to a `Bad Bank'
Monday, July 21, 2008
Indecisive attitude drags on
Asian & Australian markets are weak to slightly up, nothing dramatic. Bank stocks are down 2-4%, profit taking after yesterday's big gains. Big stories include LG Electronics, a huge company, reporting excellent earnings yesterday but selling off today on worries about the global market going forward. They are also concerned about dreary earnings reported after hours by Apple (AAPL), Texas Instruments (TXN) & American Express (AXP), a Dow stock. AXP is the most disturbing as they have a good "feel" for the economy, Tomorrow, Wachovia (WB) & Washington Mutual (WM) will report. Also, IBM sold more shares in Lenova taking its interest below 5% meaning they will not have to report future stock sales.
Dow Jones futures are trading down 100 with NAZ & S&P 500 each down about 1%. The negative tone comes from after hours trading for AAPL - down 16, TXN - down 3¼ & AXP - down 3.65. Hang on tomorrow.
Dow Jones futures are trading down 100 with NAZ & S&P 500 each down about 1%. The negative tone comes from after hours trading for AAPL - down 16, TXN - down 3¼ & AXP - down 3.65. Hang on tomorrow.
Tuesday, July 15, 2008
Choppy day, markets lower
This was a choppy day with markets ending lower. Dow had been down 250 early on followed by a big push up then down, ending down 92 with banks once again leading the charge down, but this time joined by energy (CVX & XOM). Decliners were ahead of advancers 3-1, NAZ eaked out a tiny gain & S&P 500 fell 13 to 1215 (for those who are looking at support levels). Volume on NYSE was higher at 1.85B (1½B used to be typical in the "old" days). The problem when compared with the past, nothing was decided today. More bleeding can be expected.
Banks & financials were front & center today. It's difficult to comprehend the damage done to bank stocks in recent days & weeks. Citigroup (C), a Dow stock, is 15. Bank of America (BAC), another Dow stock is 18½ with a yield of almost 14%, assuming you believe it will hold. By the end of next week, they should announce the Q3 div & the market is programming in an ugly cut. Many other banks are trading around 5. Fannie Mae (FNM) & Freddie Mac (FRE) made the list of biggest decliners on NYSE as news reports are flying, not to mention testimony given in congress today.
Oil fell 6½, the biggest decline in 17 years, but that gave little comfort to traders. Oil stocks were hit, along with MLPs as the Alerian MLP index fell more than 6 trying to go back to the 262 low. Intel (INTC) had a good Q2 earnings report after hours, the stock was up 24¢ during the regular day, but that may get lost with all the attention on financials. Hang on for another wild day tomorrow.
Banks & financials were front & center today. It's difficult to comprehend the damage done to bank stocks in recent days & weeks. Citigroup (C), a Dow stock, is 15. Bank of America (BAC), another Dow stock is 18½ with a yield of almost 14%, assuming you believe it will hold. By the end of next week, they should announce the Q3 div & the market is programming in an ugly cut. Many other banks are trading around 5. Fannie Mae (FNM) & Freddie Mac (FRE) made the list of biggest decliners on NYSE as news reports are flying, not to mention testimony given in congress today.
Oil fell 6½, the biggest decline in 17 years, but that gave little comfort to traders. Oil stocks were hit, along with MLPs as the Alerian MLP index fell more than 6 trying to go back to the 262 low. Intel (INTC) had a good Q2 earnings report after hours, the stock was up 24¢ during the regular day, but that may get lost with all the attention on financials. Hang on for another wild day tomorrow.
Worries, worries, worries!!
Worries are overwhelming the traders. It's difficult to keep track of all the banks, especially big ones, selling for 5 (that's $5 per share). The Bloomberg chart from yesterday (below) shows Dow is down 133 (off the lows of down more than 200), decliners ahead of advancers 9-1 (don't see that too often) while NAZ is down 21. S&P 500 is down to 1211, former important lines of support are now history! Banks & related financials are leading today's plunge. FED Chairman Bernanke is testifying trying to explain what's happening with banks & what to expect going forward. The FDIC said bank deposits are safe. They better be, but a nervous public needs reassurance. One tiny glimmer of optimism is First Horizon (FHN), now a $5 stock, was up today. For those who want to read more about bank worries, read on. This financial mess will just have to play out, keeping the powder dry seems to be a good tactic for the time being.
There is corp news. Retail sales inched up 0.1% in June, no great surprise. Going forward, help from tax rebates is pretty much over. JNJ (JNJ), a Dow stock & member of the S&P Dividend Aristocrat list, is up 1.28 on a favorable earnings report. But Kimberly Clark (KMB), another member of that elite div list, is down after cutting guidance which brought downgrades for the stock. General Motors (GM), another Dow stock, eliminated the div, is laying off workers & cutting truck production to help preserve cash.
On this gloomy day it's good to keep in mind investment ideas for buying beaten up stocks, better times are coming. We all need to be reminded.
Monday, July 14, 2008
Regional banks sink markets!!
Regional banks sank markets!! The negative news & thoughts on regional banks swamped markets today. Dow was down (only) 45, decliners ahead of advancers 3-1 (could have been worse!) & NAZ fell 26. S&P 500 is down to 1228, considered to be a ugly number by many. There were 500 new lows on NYSE, that was to be expected. NYSE volume was 1.4B, pretty much a routine kind of number.
Regional banks probably had their worst day in history, very tough to keep track of all their problems. Washington Mutual (WM & the biggest S&L in the US), along with National City Corp (NCC), First Horizon (FHN & former member of the S&P Aristocrat Dividend list), to mention just a few, were clobbered. Many of these stocks are selling at 20 years. These stocks was sold on fears following the failure of IndyMac on Fri which the FDIC has had to take over. Can you remember the last time the FDIC had to take over a failed bank? All this was in the middle of Fannie Mae (FNM) & Freddie Mac (FRE) getting help from the FED/gov leading to a very confusing mess, something not liked by markets. Oil remained near 145, but today it's like nobody cares. For what it's worth, Pres Bush lifted an executive ban on offshore drilling, putting that ball back in congress's court.
In the midst of all this confusion, junk bond funds & REITs pulled back as they're associated with financial products. The junk bond funds in particular should be getting some respect. They invest in junk bonds, not mortgages & with the latest sell-off have yields typically over 11%. For the very brave, a nice place with yields 700+ basis points over Treasuries.
Asian markets open in a few hours, they should give an early clue of how they're taking the financial news in the US. Earnings are coming in the next few days, bank reports will get the most attention. Stay tuned!!
Regional banks probably had their worst day in history, very tough to keep track of all their problems. Washington Mutual (WM & the biggest S&L in the US), along with National City Corp (NCC), First Horizon (FHN & former member of the S&P Aristocrat Dividend list), to mention just a few, were clobbered. Many of these stocks are selling at 20 years. These stocks was sold on fears following the failure of IndyMac on Fri which the FDIC has had to take over. Can you remember the last time the FDIC had to take over a failed bank? All this was in the middle of Fannie Mae (FNM) & Freddie Mac (FRE) getting help from the FED/gov leading to a very confusing mess, something not liked by markets. Oil remained near 145, but today it's like nobody cares. For what it's worth, Pres Bush lifted an executive ban on offshore drilling, putting that ball back in congress's court.
In the midst of all this confusion, junk bond funds & REITs pulled back as they're associated with financial products. The junk bond funds in particular should be getting some respect. They invest in junk bonds, not mortgages & with the latest sell-off have yields typically over 11%. For the very brave, a nice place with yields 700+ basis points over Treasuries.
Asian markets open in a few hours, they should give an early clue of how they're taking the financial news in the US. Earnings are coming in the next few days, bank reports will get the most attention. Stay tuned!!
Sunday, July 13, 2008
Asian markets trading mixed
Asian stocks are generally up (Mon morning) following the FED/Treasury news. Tokyo & Australia are are a little lower, while others are higher with bank equities doing well. The dollar is stronger sending oil down more than 1. The focus in the pre-trading period in Shanghai was on the FED moves because of their large investments in US securities & they sell more than $300B net yearly to the US. A $1T (that's trillion) of FNM & FRE bonds are held by foreigners (i.e. China among others), these problems are global.
Dow Jones futures are trading up 100 (very high at this hour) & S&P 500 is up 1%. Early in Asian trading, they were debating whether US gov moves to back up FNM & FRE debt plus possibly buy shares was a plus or minus. Either it is seen as demonstrating weakness or adding reassurance to investors. While writing this, they are debating on CNBC-Asia how these moves will be taken (up or down). Congress will have to approve any changes before going on break next month. There is CLEAR recognition in Asia that large financial problems continue, oil is at record levels & gloomy Q2 earnings reports are due starting next week.
Mon should be a fun day here!
Dow Jones futures are trading up 100 (very high at this hour) & S&P 500 is up 1%. Early in Asian trading, they were debating whether US gov moves to back up FNM & FRE debt plus possibly buy shares was a plus or minus. Either it is seen as demonstrating weakness or adding reassurance to investors. While writing this, they are debating on CNBC-Asia how these moves will be taken (up or down). Congress will have to approve any changes before going on break next month. There is CLEAR recognition in Asia that large financial problems continue, oil is at record levels & gloomy Q2 earnings reports are due starting next week.
Mon should be a fun day here!
Troubled Times
These are very troubled times. For those who had doubts, Fri was a very grim reminder. That message was spelled out clearly by the long list of new 52 week lows on NYSE. Below is a listing of JUST the first 20 stocks as determined by volume:
| Record Price Low : NYSE (1-20 of 554) sorted by Volume in descending order |
| 10.25 | -2.95 | -22.35% | 11.89 | 6.68 | 409,334,831 | 8,591.79% | 6.68 | 70.57 | 85.48 | ||
| 7.75 | -0.25 | -3.12% | 8.63 | 3.89 | 397,295,436 | 11,534.04% | 3.89 | 67.20 | 88.47 | ||
| 14.43 | -2.87 | -16.59% | 16.06 | 13.29 | 174,338,284 | 2,454.28% | 13.29 | 74.09 | 80.52 | ||
| 16.19 | -0.09 | -0.55% | 16.89 | 15.75 | 136,243,781 | 419.59% | 15.75 | 52.97 | 69.44 | ||
| 21.67 | -0.69 | -3.09% | 22.47 | 20.84 | 133,737,424 | 702.50% | 20.84 | 52.96 | 59.08 | ||
| 11.54 | -1.59 | -12.11% | 12.80 | 11.15 | 112,041,246 | 1,434.26% | 11.15 | 53.10 | 78.27 | ||
| 23.00 | -0.61 | -2.58% | 23.78 | 22.11 | 82,338,754 | 815.13% | 22.11 | 37.99 | 39.46 | ||
| 33.16 | -1.35 | -3.91% | 34.45 | 32.09 | 71,316,650 | 409.97% | 32.09 | 50.48 | 34.31 | ||
| 23.08 | -0.91 | -3.79% | 23.90 | 21.75 | 60,884,161 | 584.25% | 21.75 | 70.13 | 67.09 | ||
| 27.61 | -1.10 | -3.83% | 28.69 | 26.50 | 52,351,277 | 822.44% | 26.50 | 89.23 | 69.06 | ||
| 6.99 | 0.04 | 0.58% | 7.14 | 6.77 | 32,972,638 | 79.97% | 6.77 | 19.68 | 64.48 | ||
| 25.74 | -0.48 | -1.83% | 27.19 | 25.00 | 32,564,063 | 432.92% | 25.00 | 35.25 | 26.98 | ||
| 33.44 | -0.07 | -0.21% | 34.40 | 32.38 | 31,936,396 | 368.19% | 32.38 | 73.64 | 54.59 | ||
| 4.84 | -0.12 | -2.42% | 4.93 | 4.60 | 29,953,570 | 143.46% | 4.60 | 16.19 | 70.11 | ||
| 7.14 | -0.08 | -1.11% | 7.29 | 5.64 | 29,644,704 | 1,354.36% | 5.64 | 22.35 | 68.05 | ||
| 1.03 | -0.17 | -14.17% | 1.23 | 0.980 | 29,264,660 | 461.80% | 0.980 | 6.25 | 83.52 | ||
| 4.42 | -0.13 | -2.86% | 4.45 | 4.24 | 28,513,360 | 581.26% | 4.24 | 33.54 | 86.82 | ||
| 21.58 | -0.29 | -1.33% | 22.13 | 21.00 | 27,126,682 | 133.59% | 21.00 | 41.01 | 47.38 | ||
| 9.92 | 0.23 | 2.37% | 10.44 | 9.14 | 26,264,692 | 155.53% | 9.14 | 43.20 | 77.04 | ||
| 8.54 | -0.94 | -9.92% | 9.07 | 8.39 | 24,725,007 | 1,131.94% | 8.39 | 34.44 | 75.20 |
Source: www.allstocks.com/nyselows52.html
This is basically a list of the largest investment firms in the world, no wimps here! For many it's not just a 52 week low, but may represent the lowest levels in 5, 10, or even more years. Leading this group are Fannie Mae (FNM) & Freddie Mac (FRE) which have not seen these stock prices for 17 years.
FNM & FRE as GSEs have been considered elite investments because of implied gov backing. The track record for their stocks since early 1970s has been superb. In this decade their stocks prices flattened out with a bumpy ride followed by an enormous sell-off in the last year as their businesses have been caught up in the mortgage mess. Panic took over on Fri, the stocks made an attempt to fall to zero.
Their business continues. They own a few trillion (that's T as in trillions) in mortgages financed by their own debt. Underneath their debt (or bonds) is a very small amount of equity capital. There were worries that if their assets were written down to market value (from face value), that could easily wipe out all equity on the balance sheet & probably more. Being a gov related business, there was realization that big daddy gov has to keep their mortgage businesses going no matter what. But there was also a realization that any help would not be for stockholders (can you spell “Bear Stearns?”). Other major financials may need gov/FED help to keep going in these troubled times. All financial houses on the above list are in various degrees of shakiness & that ain't good!
Fraidy cat!!
This is a picture of the fraidy, cat resting comfortably, taken last night. Her son, even more of a fraidy cat, was not available for a picture, just poked his head out once from behind the futon. It may seem difficult, during these times it is best to be like mother cat - remain resting & at ease.
High yields will help investors weather this financial storm of difficult times. Junk bond funds sold off along with financial stocks, but aren't badly affected by the mortgage mess. They've generally stayed away from mortgages, a business they don't understand. For the brave, their yields around 11% are tempting. REITs have been selling off along with financials, but many should weather this storm in good shape. At the start of this decade, 10-12% yields were common for REITs & most of those investments worked out well. Currently, yields of 7%+ are available in REITs. MLPs are businesses owning pipelines that move oil & gas around the country, a national priority. Their Alerian MLP index last week bounced up 10 off the 262 low (also reached in Mar). It's been in a sideways trading range, this year mostly in the 280s - 290s. Some have sold off more than others, but again yields of 7%+ are common (a few even in double digits). These will do well because pipeline expansion is needed. The S&P Dividend Aristocrat list is taking lumps. The group of premier companies in the S&P 500 has diminished recently. Of the 7 banks included a few years ago, 2 are off, 2 are about to go & Bank of America (BAC) may not remain with a yield of 12%. Masco (MAS) should be having the 50th consecutive year of higher divs but may not remain as forecasted earnings are not expected to cover the div. But other members should keep their track records going forward such as: MMM, KO, JNJ, KMB, PG & WMT.
I have a feeling that the FED is meeting this PM (like they did in the Bear Stearns mess) trying to figure out how to help troubled financial markets, i.e. FNM & FRE. They can come up with measures to help fix companies in the mortgage mess & anything done will give confidence to markets, bringing out buyers. With markets so oversold, the rebound bounce could be very big (several hundred Dow points). But fundamental problems will remain (as with the failure of IndyMac on Fri) with bad mortgages not to mention regular bad loans out there. If nothing is announced, markets will continue to bleed with interruptions of buying based on temporary optimism.
Asian & Australian markets open in a few hours will give a first glimpse of trading for next week. Special announcements from the FED/gov aside, news this week will be highlighted by early Q2 earnings reports. They can be expected to repeat prior themes: declines in EPS but beating LOWERED estimates, domestic business off while foreign business is strong & cautious guidance for the balance of the year. Meanwhile the fraidy cat is still resting comfortably. We have to keep calm to tough out these times & do well when markets recover.
Wednesday, July 9, 2008
Dow plunges 236
After a nice rally late yesterday, Dow plunged 236 today (mostly in the PM). Advancers were ahead of decliners 2-1 & NAZ pulled back 59. S&P 500 dropped 29 to 1244, by all kinds of measures this index is bleeding badly! Volume on NYSE was 1.4B, below recent 1.6B on select days, but not exceptional. Even with the rally yesterday, NYSE had 215 new lows. Oil was about even after evaluating the weekly inventory report versus Iran flexing its military muscles (firing long range rockets!). Inventories fell almost 6MM barrels, better than forecasts, but that did not carry the day. The Alerian MLP index rose 4 to 269, but off its best levels. First Industrial Realty (FR), an REIT highlighted in my right column, rose 2.90 yesterday (1 point at the close). That gain was pretty much wiped out today.
Alcoa (AA), the first Dow stock to report earnings, reported down earnings yesterday but they beat forecasts. 24 hours later the realization that their news was not that great may have brought on PM selling.
These are getting to be brutal times with no end in sight. General Electric (GE), reports on Fri. Keep in mind, they have a lot of exposure to finance issues. Their earnings & guidance may signal more bleeding is ahead!
Alcoa (AA), the first Dow stock to report earnings, reported down earnings yesterday but they beat forecasts. 24 hours later the realization that their news was not that great may have brought on PM selling.
These are getting to be brutal times with no end in sight. General Electric (GE), reports on Fri. Keep in mind, they have a lot of exposure to finance issues. Their earnings & guidance may signal more bleeding is ahead!
Tuesday, July 8, 2008
Markets mixed up again
Markets are mixed up again, better than declining! Dow is down 21, decliners ahead of advancers 3-2 & NAZ is about even. S&P slipped to 1245, not pretty. Oil is down 8 in 2 days to the 136s, but that isn't moving markets.
Fannie Mae (FNM) & Freddie Mac (FRE) are down today, their problems weigh heavily on the markets. They said they should be able to raise capital. That's bleeding thru to financials (banks, etc.) which are expected to have tough times raising capital that they will probably need. Chairman Bernanke gave a speech proposing new rules to help protect home buyers. Pending home sales fell 4.7% in May after a rise in the prior month. This was not a surprise, in line with the housing slump.
The summer season has started with July 4 & summer driving is less in response to higher priced gas. At the retail level the end of July is very important, the back to school season. This season is second in importance to the Christmas season & it looks like retailers must be clenching their teeth in preparation.
Financial problems are front & center
Fannie Mae (FNM) & Freddie Mac (FRE) are down today, their problems weigh heavily on the markets. They said they should be able to raise capital. That's bleeding thru to financials (banks, etc.) which are expected to have tough times raising capital that they will probably need. Chairman Bernanke gave a speech proposing new rules to help protect home buyers. Pending home sales fell 4.7% in May after a rise in the prior month. This was not a surprise, in line with the housing slump.
The summer season has started with July 4 & summer driving is less in response to higher priced gas. At the retail level the end of July is very important, the back to school season. This season is second in importance to the Christmas season & it looks like retailers must be clenching their teeth in preparation.
Monday, July 7, 2008
Financials sink stocks
Markets were hammered hard by a major sell-off in financials, following financing problems at Fannie Mae (FNM) & Freddie Mac (FRE). Wow, that was a lot to say. FNM & FRE each fell about 3 on worries about an accounting change might require them to raise more capital (after raising capital last year). Financials sold off big once again, this time on worries that they could have similar problems trying to raise more capital. Dow had been up 100 early in the day but then sold off to down 100 a couple hours later. Dow ended down 56, decliners ahead of advancers 2¼ to 1 while NAZ was essentially even. The important S&P 500 declined 10 to 1252, below the 1270 line. However, some are saying 1235 is a more important test. No matter how the bread is sliced, the S&P 500 index is in big trouble. REITs sold off in sympathy with the financials. Oil pulled pack 3½ on the latest rumors that Israel might not have to attack Iran & on a stronger dollar. MLPs sold off in sympathy with lower oils (XOM, CVX, etc.). The Alerian MLP index closed in the 269s, nearing 262 low reached earlier this year.
These are troubling times, not for the feint of heart. The credit crisis will take a lot of time to work out, but homework done to separate the good ones from the bad will pay off!
These are troubling times, not for the feint of heart. The credit crisis will take a lot of time to work out, but homework done to separate the good ones from the bad will pay off!
Thursday, July 3, 2008
Weak week!!
This was a weak week, maybe it wasn't so bad being the first week in 3 when the Dow didn't decline more than 500 (due to a shortened time frame?). Today Dow was up 73 but I don't know how since there were only 2 (CVX & UTX) with gains of more than 1. Decliners led advancers 2-1, NAZ declined 6 while S&P 500 only gained 1 to 1263 (staying below the important 1270). Even with low volume, there were 500 new lows on NYSE. Oil was pushing 146, slipping back to the 145s at present. After the ECB raised its rate 25 basis points, it signalled not to hold your breath for the next rate hike. The Euro remains at a hefty $1.57.
Next week, the first 2 Dow stocks release earnings. Earnings for non-financials are expected to be OK, but guidance going forward will grab most of the attention. The same theme should continue: overseas business is strong while domestic is weak producing a cautious outlook for the balance of the year. I like banks, some interesting thoughts about problems they face. Overseas markets will generally be open on July 4 if you want to peak. Otherwise, have a good holiday!
Next week, the first 2 Dow stocks release earnings. Earnings for non-financials are expected to be OK, but guidance going forward will grab most of the attention. The same theme should continue: overseas business is strong while domestic is weak producing a cautious outlook for the balance of the year. I like banks, some interesting thoughts about problems they face. Overseas markets will generally be open on July 4 if you want to peak. Otherwise, have a good holiday!
Markets mixed
Markets were mixed, really down. Dow is up 74, but don't know how as none of the 30 are up as much as 1 & only 17 are in the green. Decliners are ahead of advancers 2-1, NAZ is about even & S&P 500 is under 1270, but up 5 to 1267. As expected, the ECB raised its interest rate 25 basis points sending the dollar a little higher. The Labor Dept reported employers laid off 62K, 6th straight month of losses, in line with expectations. The real number is 30K higher if gov hiring is excluded. In addition, the number of new applications for unemployment claims rose 16K to 404K (above 400K is considered bad). Oil is over 146 on some news about something (these days, who cares?). Remember the call about oil reaching 150 by July 4? We're essentially there on July 3.
Banks are getting punished again. Bank of America (BAC), in the Dow, at only 22 & yielding almost 12% is down 50% from just a couple of months ago. Increased attention to the problems of auto makers & talk about bankruptcies will weigh on the markets for awhile.
Banks are getting punished again. Bank of America (BAC), in the Dow, at only 22 & yielding almost 12% is down 50% from just a couple of months ago. Increased attention to the problems of auto makers & talk about bankruptcies will weigh on the markets for awhile.
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