Succinct Summation of Week’s Events
Positives:
1) US equity markets power higher still
2) NFIB small business index rises to best since Dec ’07
3) Initial Claims fall below 400k but normalizing for bad weather as 4 week avg back in line with prior good trend
4) US exports rise to within $3b of record high
5) UoM confidence rises a touch to the highest since June
6) China hikes rates again to tame inflation pressures
Negatives:
1) Stock market volume pathetic
2) Egypt still a power keg? (markets certainly don’t think so)
3) Inflation figures in Germany, UK, Brazil, and South Korea all at multi yr highs (we get ours next week)
4) US short rates move higher, catching up to recent move in long end
5) Mortgage rates back above 5%
6) Portuguese 10 yr yield back above 7%
7) Emerging stock market correction continues
8) South Korea dragging its feet on raising rates
Tweet
Facebook
Reddit
Digg this!
February 11th, 2011 at 4:11 pm
some ripples are evident in the big pond .. an explanation of inner workings:
“How The Huffington Post Works (In Case You Were Wondering)” http://www.huffingtonpost.com/2011/02/10/huffington-post-bloggers_n_821446.html
“Hi! In the wake of the AOL acquisition, I’ve (ie Jason Linkins) been reading a lot about The Huffington Post from a lot of people who, as outsiders, don’t really have any idea about what we do here.”
February 11th, 2011 at 4:17 pm
VIX at 2007 lows. Which category does that go into?
February 11th, 2011 at 4:17 pm
Check that.. 2007 levels (certainly not the lows.)
February 11th, 2011 at 4:18 pm
My least favorite market is when it just goes up day after day like this. Even though this year I’ve been long about 85% of the time and have had really good timing with the dips (who hasn’t?) I’m underperforming the market because I end up selling after 20-30 S&P points and then watching the next 50 points from the sidelines or with small PUT positions (frequently left over hedges from when I’m long, but now I’m hanging on to some for longer periods).
It’s one thing or another — it’s taken me a lot of effort to learn to go long against the fundamentals. But I don’t think I’ll ever be able to stay long through virtually 20 consecutive days of gains.
February 11th, 2011 at 4:22 pm
“Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.”
Super anonymous no less!
February 11th, 2011 at 4:47 pm
Ongoing punk volume sure suggests a top except the last few times I paid attention to that I got squeezed so this time I’m just standing pat, hedged but mostly lower beta and a long, long way from net short.
The degree of QE has been one, huge confounding variable from my POV but I’d rather underperform the market than lose money so neither a Fed fighter nor a Fed friendly shall I be.
February 11th, 2011 at 4:55 pm
super-anon-
no doubt re the fundamentals- but the bull rages on. . .
we have the PPI and CPI coming out this week . . .other countries have shown sizeable cost pressures . .. it would seem to me we would have to see some ‘flation soon-
if the PPI/CPI are higher than expected . . .I wonder how the markets will react as this is what the Fed has been waiting for all along
February 11th, 2011 at 5:00 pm
Stock market volume low is a negative?????
February 11th, 2011 at 7:15 pm
Mubarak gone…that has to be a positive for the markets. No?
February 11th, 2011 at 7:15 pm
5) Mortgage rates back above 5%
Great news for all that inventory still to come.
February 11th, 2011 at 8:17 pm
…bonds been backin’ up for a while now
February 11th, 2011 at 11:41 pm
It’s time to party like it’s 2007 with the return of covenant lite loans.
The cotton futures spike is looking like the hard winter red wheat spike of early 2008. It probably needs to go a bit higher yet before the bell-curve reversal comes into play.
2013 global sugar futures are over 40% cheaper than front month futures. The best investment I see is a Delorean with a trailer package that can still hit 88 on the speedo to haul back unlimited supplies of that cheap sugar from the future.
February 12th, 2011 at 3:49 am
@rip,
low volume = rising with no conviction
@snapwizard
It is uncertainty which is usually counted as a negative for capital. With a political vacuum, you could end up with a peaceful regime or we could see another Iran develop politically. Sure, there is now a nation with a potential to become another emerging market. I am sure that is what everyone wants including their people but because they control an oil and goods choke point in the Suez canal it is as likely that some hostile-to-commerce group could seize power. Egypt is very strategic. We can’t look at the surface of this revolution until we know who is pulling the strings and catalyzing things from behind the scenes
February 12th, 2011 at 5:13 am
Expect Massive Chinese Gold Buying Using GLD
I don’t know if this will work but it is interesting that they are trying
http://www.kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/2/7_KWN_Source_-_Expect_Massive_Chinese_Gold_Buying_Using_GLD.html
February 12th, 2011 at 5:46 am
Bush’s Swiss visit off after complaints on torture
http://www.reuters.com/article/2011/02/05/us-bush-torture-idUSTRE7141CU20110205
Near Zero Contango in COMEX Silver Futures – Got Gold Report
http://www.gotgoldreport.com/2011/02/near-zero-contango-in-comex-silver-futures.html
movie clip:1984 – the reason for war
http://www.youtube.com/watch?v=7n4EDKUB9uo
LOL! Laugh of the week:
http://lib.store.yahoo.net/lib/realityzone/UFNdogatcomputerhumor.jpg
February 12th, 2011 at 6:24 am
Actually the Positive regarding China hiking rates is good for them but bad for the strength of our US dollar. Positive for them – Negative for us. :)
February 12th, 2011 at 6:31 am
Here’s a quick read for you on the 800 lb gorilla in the room that nobody wants to talk about:
http://climateprogress.org/
February 12th, 2011 at 7:49 am
Equities going higher is not a positive.
Lower prices for ANYTHING are preferable.
It means you can buy a greater % of a company. It means you get higher dividends.
It also means you bought value.
Bubbles are a waste of time as the first seller gets the good price and everyone else gets a weaker one.
February 12th, 2011 at 8:58 am
“@rip .. low volume = rising with no conviction”
and imho (I’m no expert) rise’g to locate the jump spot preferably of masses in the quickest fashion so the hoarded cash can buy the corporation private and be done with this game of hitting numbers to appease
trouble is – in the super-corp world that now exists – gonna be a good game needed to regain a fight against .. to feed or not to feed (the masses that is)
February 12th, 2011 at 9:01 am
@Mayor,
It depends on if you are holding or buying
If you are holding lower prices are a bad thing
February 12th, 2011 at 9:07 am
How-
You have it in reverse. Think long and hard about what happens in both scenarios and you will see that prices going down allows people to buy more over time eventually owning a greater % of a company.
February 12th, 2011 at 9:30 am
When you are holding (and looking to sell) all you care about is selling at the highest possible price. I don’t want to sell more at the lower price. I want to sell more at the higher price. When I’m accumulating shares I want the fluctuating price but when it comes time to sell it serves no purpose but to cost me the top dollar that I could get
February 12th, 2011 at 10:08 am
You’re missing the point. Who said anything about selling?
February 12th, 2011 at 11:42 am
You have to sell sometime :)
February 12th, 2011 at 5:04 pm
As long as things are running, you want to own. When things are in danger of collapsing, you sell. The top doesn’t try and trade stocks – they want to own companies.
February 12th, 2011 at 5:31 pm
[...] Peter Boockvar over at the Big Picture recaps the week’s events: http://www.ritholtz.com/blog/2011/02/succinct-summation-of-weeks-events-18/ [...]
February 13th, 2011 at 3:39 am
MayorQ @5:04p – “they want to own companies” .. agreed but never generalize – a few Tops wish to sell the news they found a dog – take that cash and after everyone joined in on the dump – buy the stuff that makes stuff at dimes on the dollar … what a web of entanglement – someone who worries of disaster capitalism – would suggest that a company should need to be dismantled to the ground and started over from scratch .. wouldn’t that be good for regular capitalism – and think of the real work for J6P .. I don’t know (just throw’g at the wall) .. because – that’d be such a waste of time and gasoline (both precious)
February 13th, 2011 at 11:46 am
@Mayor,
I buy stock to create cash flow and make money. The end is not to own a company. That is the means. The end is to put food on the table, pay bills and support charity. At some point I will need to sell stock to do that unless I am in dividend stocks. Ownership is a tool to be used, not a prize to cling to
February 13th, 2011 at 6:42 pm
MayorQ – your points are senseless.
There is not “buying” OR “selling” … Only “trading”.
Every buyer matches a seller.
The issue is one of transfer payments… Who is gaining? Who is losing? Will there be lots more future buyers from whom to extract a higher price? The answer is YES. Tons of cash earning zero… It’s 100% behind. It will fall much further behind.
Earning zero % for years is painful!
February 13th, 2011 at 6:45 pm
Economy clearly remains in a strengthening RECOVERY.
S&P500 looks set to do 100$ shr in eps this year…
Risk remains to tts upside.