Yawnnnnn …. Oh, uh, excuse me. I just woke up. What’s going on? Where is the market? Somebody get me some coffee quick. Make it strong. Oh! And I like lots of foam but no sugar. Somebody? Anybody? Oh, come on … nobody?
Well, that’s what happens when you oversleep – the world goes on about its day and you are left to fend for yourself. No wonder I slept in. The market is not giving me any reason to get up and get excited. Oh! Wait! OMG! The news is in!
- Indexes were on track for their worst week since June as investors found few reasons to buy with equity prices near record levels.
Hold on! I thought the market was in a holding pattern, you know, just piddling around on low volume, not getting too excited or too down about anything.
- It’s very quiet, and the market is just digesting and looking ahead. I don’t see anything dramatic coming up.
Yeh, that’s the ticket. Nothing dramatic is coming up and things are getting better in the world, economically speaking, and right here in the good ol’ USA, things are getting better too, economically speaking, right?
- With home prices rising, consumer confidence at levels not seen since 2008, and record high stock prices, what’s not to love about the economic comeback?
Oh, and what about all that other positive US economic data about manufacturing, services, retail sales, durable-goods orders, government debt declining, and what about China’s and Europe’s PMI numbers improving? Okay, so US inventories, fell a tad from May to June, so what?
- Barclays lowered its second-quarter GDP estimate to a 2.4 percent pace from 2.5 percent. JPMorgan now expects growth will be revised to a 2.2 percent rate instead of 2.3 percent.
That’s what. Those smarty-pants economists on Wall Street are so smart they can predict a drop in GDP when they see one, even if it is just one tenth of one percent on a GDP moving in the $16 trillion zone. Those Wall Street economists are so hot right now!
Oh, but wait! There is drama coming, and in a big way. With the “indexes on track for their worst week since June,” the sky must be just about ready to fall right on top of our heads, right?
- Warning signs are mounting that another, even worse, credit crisis is coming and a deep bear market will join it.
OMG! Now I wish I actually slept in more than I did. This is news I just don’t need right now. I don’t even have a cup of coffee to wake me up and I get slapped smack in the face with this news from Chicken Little.
- There’s an age-old cycle that happens, where you have periods of easy money, and certain sectors of our economy gorge on the easy credit, and then invariably, when rates start to rise and the economy slows, whoever has been gorging on that easy credit gets into trouble, the economy falters and markets go down.
Really? The cycle described above is “age old.” Again, OMG! This must really mean we are in trouble. Chicken Little (aka Dr. Doom of the Gloom, Boom, and Doom Report) must surely know, as Chicken Little is in the business of spreading gloom and pushing doom. All the research and stuff that really smart chicken does, surely he must be right?
- The only way this market can go up is if the 10 or 50 stocks that are very strong continue to drive the market higher, with the majority of stocks having actually peaked out,
Okay, well, that just about does it for me. I need to run and run fast from this market. Heck, if the only way it can go up is 10, no, wait, 50, very strong stocks continue to move up, then it is time to fly the coop. After all, with that kind of precision analysis from a star on financial TV, it is hard to doubt Chicken Little, aka Dr. Doom. My apologies if I appear presumptuous, though, but I have just one teeny and, I must say, a more than likely dumb question – what will happen if 11, 15, 17, 20, 22, 27, 30, 31, 39, 41, 47, or 42 very strong stocks move higher? Will the market go higher or lower? I anxiously await your answer when you next appear to warn us all that the sky will fall, again.
For now, though, I don’t exactly know what to do with the information below. I guess I can just chalk the numbers up to companies setting low bars, which they are prone to do.
- Of 442 companies in the S&P 500 that reported results through Thursday morning, Thomson Reuters data showed that 67 percent topped analysts’ expectations, matching the beat rate over the past four quarters. In terms of revenue, 53.6 percent exceeded estimates, more than the 48 percent rate over the past four quarters.
Low bars or not, numbers are numbers, and the fact that companies are still generating revenue and making money suggests maybe the sky is holding up. For how long, I don’t know, as other powerful forces are attempting to exercise dominance over the market. The market gods are not at peace right now. Before we know it, they just might be throwing lighting and thunder at one another, and then the sky will surely fall.
- The S&P has rallied 19 percent in 2013, which is impressive by any measure. But the market did far better in 1987, when stocks added more than 30 percent from the beginning of the year to Aug. 8. The problem? The market ended up tanking in the second half of that year-dropping 36 percent from the Aug. 25 peak to the October low, before closing out 1987 nearly exactly where it began.
Is anyone having fun yet?
Me? I guess I will have to go and get my own cup of coffee.
Trade in the day; Invest in your life …
