Stocks rose modestly as sluggish retail sales did not bother the markets. Dow is up 46, advancers are 2-1 over decliners & NAZ is up 17. There is hope that another interest rate cut & a government plan to keep mortgage rates from spiking will help companies hurt by the housing crisis. They better get going soon with help for mortgages as foreclosures hit a record level of 0.78% in the third quarter.
The housing slump's impact on consumers adds to worries that the holiday shopping season is getting off to a shaky start. Target (TGT) is down 5 after announcing that Dec sales will come in below forecast. Walmart (WMT) is projecting same store sales up 1-3%. This sounds like uh-oh to me.
Thursday, December 6, 2007
Wednesday, December 5, 2007
Hard to miss today!!
Hard to miss today, you could have thrown darts! Dow was up about 200 while NAZ rose almost 50. I'm still trying to sort this out. I guess the idea is the economy is doing well, but not so well that it does not deserve a rate cut next week. Fannie Mae (FNM) was up 97¢ with their dividend cut. Oil pulled back to under 88. Maybe this is the start of the Dec rally widely expected.
The administration worked out an agreement with industry to freeze interest rates for certain sub prime mortgages for five years to combat soaring foreclosures. Details will be announced. In the old days, that would have been called government meddling, viewed as bad. In the mean time, enjoy the up market.
The administration worked out an agreement with industry to freeze interest rates for certain sub prime mortgages for five years to combat soaring foreclosures. Details will be announced. In the old days, that would have been called government meddling, viewed as bad. In the mean time, enjoy the up market.
Up on good economic news
Even with the Dow up 173 today, the chart below shows it's been pretty much sideways in the last 5 days after a big runup in the middle of last week. Economic data showing the economy is strong brought out the buyers today. But I'm not sure how to reconcile that with an interest rate cut next week because the economy needs help. Looks like today will be another major up day.
Fannie Mae (FNM) slipped after cutting the dividend and selling preferred stock to raise capital. OPEC met & decided not to increase oil production which generally would send oil prices down. Among other things, they are worried about sub prime problems. Oil remains around 89.
Fannie Mae (FNM) slipped after cutting the dividend and selling preferred stock to raise capital. OPEC met & decided not to increase oil production which generally would send oil prices down. Among other things, they are worried about sub prime problems. Oil remains around 89.
Tuesday, December 4, 2007
Pessimism prevails
Pessimism prevails about the stock market. The Dow closed down 66 (lows of the day) while NAZ dropped 17. Decliners beat advancers almost 2-1. Oil pulled back to "only" 88 and the Treasury bond interest rate remains at 3.89%. Nothing dramatic went on, although downgrading by JPMorgan of the financials was a kick in the head the market took seriously. Banks are giving up some of the gains from last week. Dec has been an "up" month but you wouldn't know it after the first 2 days.
Stocks slip as worries continue
Another mediocre day for stocks, Dow's down 32 while NAZ is down 8. Decliners outnumber advancers about 2-1 at NYSE. The Treasury bond is 3.89% and oil is near 88. Dow Chemical (DOW) announced it will cut 1000 jobs worldwide. Merck (MRK) reaffirmed it's optimistic outlook for next year but part of that is based on job cuts this year followed by more next year. The stock market is always waiting for more economic news but the FED meeting next week is probably drawing the most attention. The market assumes a rate cut is a given, the size is the only thing being debated. JPMorgan downgraded major Wall Street securities firms because of longer-term concerns about risk management hurting overall valuations. Big banks were included in this assessment. The market continues to drift (i.e. down).
Monday, December 3, 2007
Stocks pull back
Stocks give some of their big gains of the last few days, but nothing major. Dow was down 57 while NAZ pulled back 24. The decliners beat advancers 3-2. Traders were trying to figure out where the economy is going. GE (GE) gave a cautious outlook for next year. It looks like awaiting developments described the mood today. I watch banks closely, they gave up some of last week's gains.
This is tax selling month not to mention various funds adjusting for year end results. While Dec has been a good month, anything is possible. For the time being, next week's FED meeting on interest rates seems to be one of the big market movers. Oil is under 90 & the Treasury bond rate is under 3.90%. Who knows what's going on? On tax loss selling, financials, REITs & especially junk bond funds may decline. Watch your favorites to look for future bargains.
This is tax selling month not to mention various funds adjusting for year end results. While Dec has been a good month, anything is possible. For the time being, next week's FED meeting on interest rates seems to be one of the big market movers. Oil is under 90 & the Treasury bond rate is under 3.90%. Who knows what's going on? On tax loss selling, financials, REITs & especially junk bond funds may decline. Watch your favorites to look for future bargains.
Mixed day again
Today's turning out to be another mixed day. It looks like traders need a breather after excitement in the last 4 days. The NYSE recovered after early morning losses, taking the Dow above break even. Advancers equal decliners, not a lot going on so far. Henry Paulson, Treasury Secretary, expects an agreement to help thousands of homeowners avoid mortgage defaults by temporarily holding their interest rates steady. Paulson also said this is the worst housing pullback in more than 20 years. The Treasury bond's interest rate is 3.94% and oil pulled back to 87. Earlier, overseas markets were mixed. Enjoy the quiet day, I think more excitement lays ahead.
Sunday, December 2, 2007
Very good week
The last 4 days made for a very good week, one of the best in recent years. On Dec 11 the FED will meet to decide about interest rates. The betting is that they will cut the rate by 25 points, if not more. OK. The stock market should continue firm but...
Sub prime loans continue to be a major problem area. The Treasury plans to rescue home loan borrowers by freezing low introductory interest rates before they soar. But this "fix" may not solve fundamental loan problems which are far-reaching. It won't spare many borrowers & bankers from the pain of escalating foreclosures & defaults, borrowers will still be required to make monthly payments. The housing market's ongoing problems can drag on.
Sub prime loans continue to be a major problem area. The Treasury plans to rescue home loan borrowers by freezing low introductory interest rates before they soar. But this "fix" may not solve fundamental loan problems which are far-reaching. It won't spare many borrowers & bankers from the pain of escalating foreclosures & defaults, borrowers will still be required to make monthly payments. The housing market's ongoing problems can drag on.
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