U.S. Stock Market Report Period October 3-7, 2011

The last three months have been quite a ride where the international stock market is concerned. Interestingly, the first week of October ended on an optimistic note with stocks trending upwards. This increasing confidence by investors was no doubt caused by strong belief that European banks will be recapitalized.
Stock Market Activities – First Week of October
Most tech stocks showed an increase in the past week with the exception of Apple. The 0.023 percent decline saw Apple’s share closing at $377.37 after losing 88 cents in response to the death of founder, Steve Jobs. Gains of between 1.74 percent and 4.99 percent were recorded by top tech companies during the period. These included Google – 1.98 percent; Microsoft – 1.74 percent; Oracle – 1.90 percent and Nvidia Corporation – 3.97 percent and Hewlett-Packard (HP) – 4.99 percent.
The three main indicators, Dow Jones, Nasdaq and S&P all showed gains as follows:
1. Dow Jones Industrial Averages moved to 11,123.33 after gaining 183.38 points
2. Nasdaq moved to 2,506.82 points after gaining 46.31 points, and
3. Standard & Poor (S&P) moved up to 1,164.97 after a gain of 20.94

Job Reports for US Companies for October 1-7, 2011
All eyes continue to be on figures dealing with the unemployment rates. The number of new job created is a strong indicator of economic activity and potential growth. Projections for new jobs in September were 75, 000 but initial reports at the end of the month showed a decent increase in non-farm payroll workers of 103,000. Included in this number, however, are 45,000 telecommunication workers from Verizon who were on strike for two weeks. Despite this addition of jobs by US-based companies, the number of unemployed making claims increased by 6000 between the last week of September and the first week of October. The new jobless claim figure now stands at 401,000 which is still slightly below the projected figures of 410,000. The unemployment rate for the past three months remains at 9.1 percent.
European Debt Crisis Containment
The debt crisis in Europe is causing more than simple ripples in the stock and commodities markets. The European Central Bank is depending on two main strategies to keep the region from buckling under the current debt crisis. One is keeping interest rates at the current level despite the fact that this move may cause a slowdown in economic activity. On Thursday the European Central bank also opened an emergency loan facility for banks to help tide them over during the existing crisis. These loans will run from 12 to 13 months and will be unlimited to help banks avoid the issue of limited liquidity.
In an effort to bolster the UK economy, the Bank of England has already put a substantial US$423 billion (£275 billion) into the economy. Japan is also planning to pump lots of money into their economy if the European debt crisis explodes and starts derailing the global economy.
Commodities Market Responds Positively to European Banking News
With hopes high after the European Commission asked European banks to recapitalize and the expectation that they will do so, the commodities market is showing growth. One commodity in which this growth is evident is coffee beans. Reports online indicate that consumers may have to pay more for that caffeine buzz as prices start to show a positive upward trend after a period of negative growth. Oil prices have also responded positively to the US job report and the news out of Europe. West Texas Intermediate or light sweet crude is showing an increase for November from $80.65 to $82.82 based on information from the New York Mercantile Exchange.
When the market opens next week no one knows what will happen, but all eyes will once again be on activities in Europe. A worsening debt crisis there will negatively impact the financial sector in the USA and across the globe.

© 2011 Beating The Stock Market

Tags: Commodities, Economy, Stock Market, Stock market news, understanding the stock market

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U.S. Stock Market Report Period August 29-Septembe...

The entire month of August has been an interesting one where the global stock market is concerned. The see-sawing ride started from the end of July continued throughout August. Investors across the globe continue to be cautious as all eyes remain focused on the US economy as the beacon of light.

Sluggish Job Report Puts Damper on Stocks
The much awaited job report for August has only served to put an even bigger damper on a month of lackluster stock market performance. The new figures revealed that an estimated 14 million Americans are out of work. Of this number slightly less than eight million have been out of a job for up to six months, while another six million or more have not been able to find employment for over six months.
These kinds of statistics can’t promote any kind of confidence that the economy and the job market prospect are improving. When the figures were released on September 2, stocks fell more than anticipated. Investors are not comfortable with this sign of no or very little economic growth and the 9.1 unemployment rate is even more worrying. A report from US Department of Labor indicating that the farming sector had no new employment during the month of August only made things worse.
These dismal employment figures provided fodder for Republics to criticize President Barack Obama’s economic policies. Among those speaking out were Ron Paul, Michele Bachmann and Mitt Romney, pointing out that strategies to revive the stagnant economy are not working.

All Major Indices Closed on a Losing note on Friday, September 2
The major stock market indices all closed on a losing note on Friday. This was not a total surprise after the labor statistics were revealed. The Nasdaq Composite went to 2,480.3 after losing 65.71 points. A 253.31 points loss had the Dow Jones Industrial Average (DJIA) closing the day at 11,240.26, while the Standard & Poor 500 (S&P 500) closed at 1,173.97 after losing 30.45 points.
Of the 30 blue chip companies that make up the ratings for the Dow, Cisco was the only one showing some positive signs. The company’s stock inched upwards by one percent.

Commodities Market Upbeat
It is not all doom and gloom however as the commodities market is benefiting from the downswing in stocks. Gold and U.S treasuries remain strong, with gold prices reaching $1876.90 per ounce after an increase of $47.80, or 2.6 percent. Other commodities benefiting from falling stock market activity at the close of the week were wheat and corn. Wheat prices increased by 1.9 percent while corn increased by an impressive 2.9 percent.
Not unexpectedly, oil didn’t fare as well as the price dropped by almost 2.5 percent. This was spurred by fears that consumption would fall based on the minimal activity in the US industrial sector.

Banking Sector Also Slowing
The banking sector did not escape the negative impact of the past week. All major banks recorded losses in their stock over the period, with Bank of America’s stock falling by 3.2 percent, Citigroup, Inc. by 3.4 percent, JP Morgan Chase & Co by 3.4 percent and Morgan Stanley by 3.2 percent. The situation in the sector has not been helped by Litton Loan Servicing (a former subsidiary of Goldman Sachs Group, Inc.) coming under scrutiny concerning its ‘foreclosure practices’. This has resulted in the Goldman Sachs shares falling by 3.5 percent.
When the market opens on Tuesday after the US Labor Day weekend, stock market watchers will be keenly eyeing activities in a month historically known to be one of the slowest where stocks are concerned.

Fears Over The Economy Hit Wall Street

I’ve been saying for some time that the strength on Wall Street is only temporary. With the political game that Washington has been playing, our economy has not yet started to recover or in some cases, hold on to their current levels. The debt ceiling has been an issue for months and in the eleventh hour Congress finally gets their act together to pass an extension. What’s good about an extension for the long term? Nothing.

Standard & Poors along with Fitch and Moody’s are concerned about the true condition of America’s deficit and the ability to function within a budget. It’s been over 800 days since Congress has passed a budget and that’s because they’ve been spending money and if they had a budget in place, they wouldn’t be able to do as they’re doing for the last few years.

As you can see on Wall Street, investors are moving their money out of equities and moving them to saver havens like bonds, precious metals and in some cases, overseas. The DOW lost 266 points earlier this week and claimed back only 30 point the next day. As of this morning at 10:45am, the DOW is down another 208 points and who knows where it’s going to close at the bell. Since Monday morning the DOW has lost nearly 5%.

As for the NASDAQ, it too has taken a hit during this week thanks to the uncertainty of the actions going on in the Beltway. NASDAQ is down (so far) this week over 5% along with the S&P 500 dropping 6% during the same period. A sign of things to come in the near (and possibly long term) future.

Do what they smart money has been doing for quite some time and that is buying gold, silver and other precious metals. Gold has gained 10% since June and 4% in just the last few days. How can you sit by and watch as others, who have a better idea of the markets, as they move assets to other sectors to hedge against the inevitable pullback on Wall Street? I suggest you really look at your portfolio to see how diversified you are and make the appropriate moves to balance it. Remember to not put more than 20% into any one sector or individual stock. Doing so may cause you to lose more than you would have if you diversified.

As for me, I’ve moved out of most of my positions in equities. I’ve been building up positions in the commodity sector, mainly gold and silver, to get ahead of the currency issue plaguing our country as well as the world. You might want to do the same.

Tags: Diversified, Economy, NASDAQ, precious metals, wall street

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What’s Happening On Wall Street.

US Stock Market Report for the Period July 25 – August 1, 2011
Over the last week, the continuing debt discussions have had a major impact not only on US stocks, but also at the international level as well. Stock markets activities were cautious at best as the world waited on a debt deal to be finalized. The month ended with news that a deal had been reached which resulted in stocks rising in the US and international markets. The immediate increases following the deal were tempered by cautious selling as the full impact of the deal is not yet known.

At the start of business on August 1, traders were cautiously optimistic. Figures for the main markets started higher than Friday, but began showing slight decreases later in the day. The Dow Jones Industrial average was down to 12,063.77, a fall of 79.47 points, while Standard & Poor dropped 10.70 points to 1,281.58. The Nasdaq also fell a bit by 16.75 points to 2,739.63.
The week of August 1 to 6 will no doubt be an important one as it relates to the global as well as US stock market. This period will see the real reaction to the debt deal as markets adjust to the perceived impact for the immediate future. By the end of the week hopefully the Senate and the House of Representatives would have signed off on the package.

Impact of GDP on Stock Market Performance
As if the threat of the US losing its triple A rating was not enough, the stock market also took a hit due to poor GDP (gross domestic product) data. The projected increase for the 2nd quarter was a modest 1.6 percent, but in actuality there was only a 1.3 percent increase according to figures from the Commerce Department. This modest figure has dampened projections since GDP is used to track economic growth.

Moody’s Reports Cash Hoarding
There have been reports of cash hoarding among some companies in response to the instability in the market. Moody’s has revealed that between 2009 to the end of 2010, there was an 11 percent increase in cash held by companies. The report indicates that as much as $1.24 trillion dollars is being held. Over a half of this money is invested or banked in foreign countries to be used for various purposes.
Senior vice president of Moody’s, Steve Oman stated that among the reasons for these holdings are investments in operations the companies have overseas, acquiring overseas interest and to benefit from overseas tax breaks, which they then repatriate to the US. Overall, the combination of the poor GDP figures and the debt ceiling crisis has placed the US stock market in the worst position it has been in for over a year.

Tags: Investments, NASDAQ, Stock Market, us stock market, wall street

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U.S. Credit Rating Is In Danger

Unless you’ve been living under a rock for the last year or so, you are aware of the United States federal government has been trying to raise the debt ceiling to cover their cost of running the country. During that time, credit rating companies, Moody’s, Standard & Poors and Fitch have been debating whether or not to lower the credit rating of the U.S. from it’s current (and long time) rating of “AAA” to something else.

Congress and the Obama Administration have been wasting time of the last three months that has now left little chance of the country’s rating to stay the same. Last October, S&P wrote that they were keeping a stable outlook on the U.S. “AAA” rating on the ground of the current entitlement spending pressures wouldn’t really affect the country in any big way within the next three to five years. Then in April, S&P shocked Washington as well as Wall Street by changing their views and putting a negative outlook on the U.S. rating, saying that there was a one-in-three chance of a downgrade withing two years. It didn’t end there, last week Standard & Poors announced that there is a 50% chance that the credit rating could be downgraded within three months.

All three agencies agree that the U.S. must undertake a major deficit-reduction effort for the near term to stabilize debt levels and to preserve it’s credit rating. The reason for the quick deterioration of the agencies outlook is mainly because of the concern they have of Congress and the Administration not being able to work together. The federal government has forgotten how to work together. The political divide has grown too much to the point where the credit agencies wonder if they’ll be able to work together on other fiscal issues in the future. It doesn’t help that Congress hasn’t put forth a budget for over 800 days.

Even though Moody’s give the U.S. a little more room before they would lower the country’s rating, that’s because of the United States’s reserve currency status. S&P said that if the U.S. rating is downgraded, the country may see interest rates climb 25-50 basis points and reduce GDP by a similar amount.

For those of you who feel like I do about the stability of the country’s economic position, I’ve been increasing my position in the precious metal/commodities sector. I’m not sure if the federal government will ever do the right thing.

Tags: Commodities, Government spending, interest rate, Treasury Dept., wall street

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Stock Market – 1st Week of July 2011

The week ending July 1, saw the US stock market showing its best performance over the last two years. In fact, the DOW rose to a fairly decent 648 points. The showing for last week was partly attributed to steps by Greece to deal with the country’s financial crisis. Some industry experts also believe that the slight flickers of hope from the US manufacturing sector also helped. So far, this week seems to be maintaining the momentum, with reports that the DOW Jones and S&P have had a 5-day winning streak.

The DOW overcame slight hiccups earlier in the week to end on a rising note, registering 12,626.02 or a 56.12 point rise at the end of trading on Wednesday, July 6. There were increases on the other main indicators as well, with the Nasdaq rising by 8.25 points moving to 2, 834.02 and the S&P advancing by 1.34 to 1,339.22.
The weak service sector job market is partially responsible for the slower market this week. Interestingly, while showing slower than anticipated job growth, the service sector also registered 19 straight months of job growth in the sector.

US Stock Futures Continue to Fall
The activity of the leading international markets continues to have a negative impact on US stock market futures. The downgrading of Portugal’s debt rating to ‘junk status’ by Moody’s lead to lower European stock markets. The continuing financial tremors in Europe are having a less than desirable effect on other stock markets globally. The downgrading of Portugal’s debt rating resulted in Asian markets closing the day with mixed trading.

With China set to increase its interest rates by a quarter point there will be a negative impact on the market. There are expectations that the hike which is due to the country’s high inflation rate, is expected to happen by the end of the week at least.

With trading taking a day off due to the 4th of July celebrations, the reduced activities also helped to lower the stock market futures. Reports indicate that the DOW Industrial Average futures dropped 54 points, the Nasdaq 100 was down by 8.75 points and Standard & Poor’s 500 also fell 8 points. Investors the world over are being cautious as they watch to see what will happen in the Eurozone as well as in China.

Slowing Stock Market Derailing Takeovers
The continuing snail’s pace of activity in the global stock market is negatively impacting takeovers. Between May and the end of June 2011, there was a 22 percent fall in the value of takeovers according to Bloomberg.

Tags: asian markets, dow industrial average, NASDAQ, stock futures, Stock Market, us stock market

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Another Wild Ride On Wall Street

The day started like any other recent trading this month. The DOW opened flat and from there went on a slide which brought it down 116 points within the first ninety minutes of trading. The confidence in the economy has really put a lot of pressure on the strength of wall street. The DOW is heading for another losing week (7 out of the last 8). I not surprised since the economic data isn’t really looking so bright.

The S&P 500 is down 8% since it’s recent high even with all the bad news coming out. Today the S&P 500 is looking at a possible third day in a row for loses. It has shown to be able to hold on to some sort of strength through it all. Typically I would be getting ready for a decent rally in the markets, but this time I’m not too sure.

What about NASDAQ? well there have been quite a few disappointing numbers coming out from the tech sector, including Micron Technology Inc. (NASDAQ:MU) who has posted it’s less-than-expected quarter results. The street was expecting to see $0.16 on sales of $2.36 billion, but Micron has a $0.07 per share on $2.14 billion. Because of the poor performance, Micron Technology is down 13% for the day so far. What about Oracle? Oracle Corp. (NASDAQ:ORCL) even with it’s better than expected quarter, they are down over 4% for the day. Many analyst were expecting the technology sector to lead the markets out of the latest pullback, but it doesn’t look like it will be the case.

The gold and silver trading prices have fallen in the last two days because a stronger dollar, as well as the dollar being stronger against the Euro. Crude oil prices for today again dropped after oil took a nose dive yesterday after the news came out the there the International Energy Agency (IEU) would be releasing 60 million barrels of oil. Half of which is actually coming from the the strategical reserve of the United States.
My thoughts behind this move is that it’s a political/economic one to help the economy stay some what afloat. Seeing that oil prices is important when dealing with the economy since it will cause food and other prices to go up as well. We are looking at the beginning of inflation (if not already) and if fuel costs were to go up now, it would happen over night. Considering that in just the last year, when President Obama was asked about releasing some of the strategic reserve, his comment was some where along the way of saying…It would not be in our best interest to do it at this time, if ever.
Commodities prices have fallen across the board which is opposite when oil prices fall. So tell me what you think if you think I need to be corrected.
Be careful and happy trading.

Tags: american dollar, Commodities, currency markets, dow, NASDAQ

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So Where’s The Recovery?

Wall Street took a beating this week and from what I can see, it will only continue when the stock market opens on Monday. So where’s the recovery?

Let’s look how well the employment numbers looked for the month of May. According to the report, only 54,000 jobs were added to the private sector during the same period. The bad part about that is that for the employment rate to hold steady, it must add 150,000 jobs each month just to keep up with the population growth in the U.S. So obviously, there’s no recovery in the job market.

How about the housing market? Well from what I’ve seen coming out over this past week, it also doesn’t look good at all. In some areas of the United States, home prices have fallen to the levels of 2002. In other areas like Las Vagas, the home prices have fallen to the levels of 1999. Many feel that the average home price will continue to drop for the remainder of this year. So I guess we can rule out that industry for showing signs of recovery.

So why is it that the stock market has been climbing since it’s bottom back in March of 2009. We’ll I feel that there was some companies that had solid fundementals and balanced sheet to continue to grow in the trouble economy. Remember that the indicies really only show the strength of the markets, not necessarily the strength of the economy. Of course many investors and traders were not completely wiped out financially and were willing to keep buying and selling.

How long can this keep up? In my opinion, not for long. Congress isn’t doing what they need to do and the present Administration is spending like a drunken sailor (I know that’s not fair to say about drunken sailors since drunken sailors spend their own money). It was reported this week that if a decision isn’t made to raise the debt ceiling, Moody’s has stated that they will decide on how they are going to re-evaluate America’s credit rating. Figuring that both the democrats and the republicans can not agree on anything, we’re going to lose our current rating and that will send this country into an inflation tailspin.

So if you’re thinking of trading in the stock market, tread carefully and be aware of the day by day issues going on in Washington as well as on Wall Street.

Happy trading.

Tags: american dollar, beating the stock market, business sector, buying stocks, declining dollar, dow, Getting Started In The Stock Market, housing market, investor, investors, NASDAQ, stock exchange, Stock market for beginners, understanding the stock market, wall street

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March Madness On Wall Street

Over the past two years the DOW has gained 95% since it hit it’s bottom of 6,547. Overall the markets as well as the outlook on the economy has improved greatly, but have we really stabilized the decay which was known as the housing market crash?

In the last month the DOW gained 1% and nearly 5% since the new year. Unfortunately I feel we’ve haven’t really solved any of the problems in our economy or in Washington. Congress is out claiming to cut the deficit and balance the budget. If the government was a corporation that was traded on the stock exchange, I wouldn’t even think of investing in it. Before I invest into a company, I look at their statements, earnings report, listen to their conference calls. I dissect the entire company’s financial so I know what I’m buying into. The U.S. government is running in the red and has pretty much tapped out on any more borrowing. Soon Moody’s is going to lower the country’s rating.

In the meantime Wall Street is going on like the world is financially sound and everything is going to be OK. Even though the unemployment rate has dropped to 8.9%, it doesn’t mean that more people are back at work. What it means is the the people who were collecting unemployment over the past 26+ weeks (in many cases, 99 weeks) are no longer on the register since they’ve exhausted all their benefits.

Look what’s happening in the United States over the past two weeks. Oil is now at $104 per barrel and the average price of gas has gone up over $0.30+ per gallon. At the time of this writing, the average price per gallon is $3.47. With the price of gas rising, in turn the price of food, services as well as any other product has also gone up.
Look at the price of gold today. At the moment the price of gold is $1428.00 per oz. Which also makes me think about how weak the American dollar has become over the same time period.

Well since March is here, let’s see if it comes in like a lion and leaves like a lamb. I believe that this month is going to be one to remember and I don’t mean that because of good things coming down the pike. If you’re one of the ones who think that this trouble is all behind us, well then go ahead and buy all the stocks your can, but if one of the many who are thinking like me, then you should be buying gold and trade some foreign currency since our dollar is weakening as we speak.
Either way…Happy trading.

Tags: american dollar, dow, Economy, housing market, housing market crash, price per gallon, stock exchange

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The DOW Closes Above 12,000

With the DOW climbing 148 points today and closing at 12,040, many are wondering if it can sustain this level. The DOW hasn’t closed above the 12,00 level since June 2008. It’s been a long two and a half years to get back to this level, but are we out of the woods yet?

I’m no expert, but I will say that any average Joe can see that the economy has not recovered no matter what the “reports” say. I travel a lot and where ever I go, I see many establishments that closed in 2008 and to this day most of them are still vacant. I know in the county I live in, the unemployment rate is nearly 14% and the state’s level is “projected” at 10.1%. I say “projected” because who are they trying to fool with that report? How many people are no longer collecting benefits and are still unemployed? They’re no longer being counted which according to realistic estimates, puts the national rate some around 18%-19.5%.

What about the housing market? The average home prices are starting to stabilize, but no one is ready to get out there and start buying property again. A report was released this week showing that over 11% of the homes in America unoccupied and more people are looking to rent than to own.

One thing we can see from over the last two and a half years is which companies were strong enough to weather-out the storm. I’ve been able to see some small cap companies grow in value at a steady pace with expected pull-back from the profit takers, only to continue the climb up. There are others that I’ve recently discovered that look to be contenders in a couple of years.

For the last few months I’ve been sitting on the sidelines watching the market. I’m not confident with the markets, the economy or the government at this time. Yes I have missed some good gains in stocks that I was invested in, but I sleep better just sitting it out right now. I love the stock markets and will always be involved with it, so for now I’ve been looking at some short/long term (2-4years) small caps that I will be investing in soon enough. I’m just waiting for a healthy pull-back (6%-9%) at then I’ll make my trades.

Tags: beating the stock market, bull markets, dow, Economy, Getting Started In The Stock Market, housing market, individual retirement account, investment advice, investment decisions, Stock investments, stock market 101, Stock market for beginners, understanding the stock market

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