Wolfram Alpha
Nice finance tools on Wolfram Alpha. Wolfram alpha blog link: Computing Stock Data in Real Time. Idea for this post came from one of my favorite blogs The Big Picture Blog by Barry Ritholtz.
Archive for the ‘Markets’ Category
Week Of Earnings Announcements
This week could definitively determine the route U.S. equities are going to take. Tuesday: Procter & Gamble and Intel; Wednesday: JP Morgan, Thursday: Goldman Sachs and Citigroup; Friday: Bank of America and General Electric. I suspect banks will report something similar to previous quarter; but the market impact would not be so profound. I still believe that the banking crisis will have round two, but not at this moment, probably in few quarters. Interesting Bloomberg article today on bank earnings composition. Bloomberg story: Writedowns on Mortgage Servicing Make Even JPMorgan Vulnerable . We will see when the reality catches up with accounting.
Valuations
Noting much on the news front today. Mr. Bernanke speech yesterday stirred up the markets sending U.S. dollar up, and treasuries down. The rhetoric is unchanged, the highlight is that the FED is ready to tighten the monetary policy when the economy starts to recover. Bloomberg link: Bernanke Ready to Tighten When Recovery Sufficient.
Declining Dollar
Lots of attention today to the declining dollar. Interesting article on that theme in the WSJ by David Malpass from the Encima Global LLC. WSJ link: The Weak-Dollar Threat to Prosperity.
Plain Vanilla”Better Than Expected”
As expected equity markets got a nice push up from Alcoa earnings. Looks like the earnings season will probably have similar “better than expected” flavor like the one preceding.The market looks bound to new highs.
The news flow on consumer and credit card credit continues to throw shadows on this equity rally. Consumer credit shrank for the seventh month in a row, contracting 12 billion USD in August to 2.46 trillion USD implying -5.8% annual growth rate. Credit-card debt fell for a record 11th straight month, down 9.9 billion USD. Shrinking at annualized rate of 13.1%. The credit outstanding ended at 899.4 billion USD. This could pose important set back to the recovery of U.S. economy as it shows the lenders are reluctant to extend credit to the economy and consumers are keen to reduce its debt. Consumer credit press release. I will post again the Meredith Whitney article explaining the issue in detail. WSJ story: The Credit Crunch Continues
Flashback – Earnings Season Starts
Alcoa reported its set of figures for the quarter ending on September 30. Press release: Alcoa Strengthens Cash Position and Returns to Profitability in Third Quarter.
Stimulus Stimulus
Looks like market optimism is not jet ready to vane. On the back of falling dollar the gold reached new highs, and equity followed. It looks that the speculation on extension of some stimulus measures played most important part in this mini rally. Looks like dollar, gold, crude oil and equity correlation have become a part of computer algorithms and almost perfect inverse relationship will continue. Not indefinitely, I’m sure. It looks artificial.
Back In The Saddle
It has been nice away from the computers, markets and problems last week spent at the sea. I’ve visited 5 countries, 7 towns and I was most impressed by Spain and Barcelona.
I was pretty pissed when a saw my SPY put options position being sold on the Monday market opening on the back of a stop loss order I left when I was leaving for vacation. I hate leaving my positions unattended but hate even more earning + 15% instead of +50%. Never mind, it looks at the moment I could have an opportunity to enter into same position at the approximately same costs.
Cruising In The Mediterranean
Will be back on October 6th. Didn’t have time to write a post about oil, will do that first when I come back.
No Real Catalyst
Despite some mayor bearishness coming through the media, blogosphere and market moving downwards, I see no strong enough catalyst to move markets significantly lower. As I’m writing this post European equities are trading flat after opening lower and US equity index futures marginally higher. Asia closed mostly negative. Looks like no action day today.
FED Meeting Aftermath
Returning to my screens after few days of vacation and couple of days of useless erins. Let me recap economic announcements in the last few days. Housing starts at consensus of 598k, building permits at 579k versus consensus of 583k. We have a 20% rise from the lows a few months ago. House prices rose 0.3% vs. consensus of 0.5%. Important indicator to watch, as seasonal effects ad government stimulus could fade into the winter. Mortgage applications up 12.8%.
Flash Trading Banned
Asian markets closed marginally lower on indications that credit crunch is returning. Nothing major jet, but worth of giving some thought on that, especially having in mind recent decrease in US bank lending and falling monetary aggregates. Indication how excess liquidity isn’t finding its way to real economy. Doubts on the strength of recovery still remain. Bloomberg story: Aiful to Seek Debt Reprieve as Refunds Roil Consumer Lender.
Correlations
The market just keeps on going on, you could think that it could go on even further. I would not be particularity surprised to see S&P 500 at 1200. We have equities rallying and at the same time declining US dollar and gold hitting nominally highest level ever.
Falling Volatility
A lot of economic data coming from the US today. Producer price index coming at 1.7% vs. 0.8% consensus on the monthly level and -4.3% vs. -5.3% consensus on year level. Surprise to the positive side. Retail sales were up 2.7% vs. 1.9% consensus in August, taking out Autos and Gas +0.6%. Also, positive, but definitely not breath taking.
New Highs
New highs everywhere, but the feeling, at least for me is unsettling. Setting aside my skeptical mind, looks we could fly even higher. Still waiting for the right point to initiate short SPY position.
Today’s news from China was taken by the media as a positive surprise. China’s industrial production rose 12.3% yoy. New lending was at 60.1 billion USD up 15.3% mom and 51.1% yoy. M2 rose 28.5% in August. Everything is blooming. On the other side. Exports on the other side fell 23.4% in August yoy. I wonder who is buying the stuff they are producing and how long can this last?