My computer world is not any better today than it was yesterday, but I feel better. I did what I could do for my laptop, but it is in a coma. It will require equipment and knowledge beyond my scope to bring it around. Given that I am away from my hometown, I will keep it on life-support until I return. No worries; it is stable enough to wait three more days.
In the meantime, I said I feel better. True, it seems we are “back to the future” with the current market. Instead of talking about a fourth down day, we are looking at a fourth up day and the powerful movement since the middle of last week is quite uplifting. Today, the S&P 500 is right around 1932, up from an intraday low of 1835 just five days ago on October 16th. That is just about a 100-point swing, which, for the S&P 500, is quite a powerful move.
As I have been writing, the S&P Mid Cap and Russell 2000 indices are still moving strongly, as are technology stocks. Earnings have aided the latter in their drive back to the future, where they once were, but the former are all about the future, where they might be. Risk-on still seems to be the market play.
I also feel better that oil prices have stabilized around the low $80 mark, although I don’t see an end to the downward slide just yet. If Iran actually falls into line, it will bring its massive oil machine back on line, which will produce more downward pressure on pricing. Right now, though, gasoline prices are tracking oil prices (does not always happen) and they are dropping sharply across the US.
- With oil prices sharply lower over the last several weeks, the national average pump price has followed suit and has now dropped on 25 consecutive days. This tumble has sent the national average to a low not seen since early 2011 and increased the likelihood that the national price at the pump could test the $3.00 per gallon mark for the first time since 2010.
How about that and how about this? Americans use about 370 million gallons of gas per day. So, for every ten-cent drop in gasoline prices, American consumers have $37 million more dollars to spend each and every day. Check my math on this, but I get an additional $13.5 billion dollars pumped into the US economy on an annual basis. Now, extrapolate the meaning of that number if gasoline prices drop, oh, say, a dollar per gallon, which they are on track to do. You get the picture.
This also makes me feel better – the US economy is getting better, earnings, are supporting the market, and the fundamental future is bright, even if Goldman Sachs says differently.
- Goldman Sachs’s economists on Wednesday downgraded their outlook on the U.S. economy in the second half of 2014 following disappointing data on domestic retail sales in September and business inventory in August.
So why is Goldman Sachs out there acting stupid? Here is a lesson for you. Goldman Sachs is not stupid, but they are manipulative. It is easily within their purview to make announcements that can move traders and investors.
I remember back in 2008 when oil was hitting close to $150 per barrel. The folks over at Goldman Sachs were screaming “get into oil now” as the price would soon hit $200. Were they stupid or was it that they wanted the price to go higher because of their investment strategy?
Anyway, for their analysts to suggest that the data referenced above is a reason to lower GDP estimates challenges analytic reason.
One more thing for today, other than to say, the market coming back to the future makes me feel better about my computer problems, yes, but, the European central bankers leaking that they might soon start a QE program for corporate bonds as soon as December, makes me feel good too. It will be a shot in the arm for the European economy and the market over all.
Here is that one more thing – Check out an economist named John Williams. He is a doomsayer starting to get a soapbox. He has found a spot on the hilltop and he is screaming, “The end is coming, the end is coming.” What is fun, and makes me feel good, is the fact his argument for the coming collapse is so weak, it is foolish.
One has to ask, “Is he stupid, or is he a snake-oil salesman?” After all, for several years now, he has been predicting hyperinflation is coming in 2014, you know, the kind of inflation that will kill the US economy and the market. It better hurry up and get here.
Trade in the day; Invest in your life
