Anyone that tracks the market these days would probably tell you that there is little rhyme and no reason for many of the market moves, other than it is a trader’s market, which means higher volatility. The news is up and the market is down, or visa-versa. So what is on the mind of our collective consciousness? Well, let me see. How about this notion of a second round of quantitative easing, dangled in front of us like a carrot on a string.
- Last week, the Federal Reserve said that it was “prepared to provide additional accommodation if needed to support the economic recovery.” This was a signal about the potential for more quantitative easing (QE).
Has this “potential” now been baked into the market cake? Better yet, does the market really want another round of QE, and would it even make a difference in terms of the economy? And then there is the news today about how “worried” the almighty consumer is these days.
- U.S. consumer confidence ebbed in September to its lowest levels since February, driven by deteriorating labor market and business conditions, a private report showed.
What the heck are “business conditions?” Does this refer to the almost two trillion in cash “business” is hoarding, or does it refer to the trillions of dollars raised from the recent spate of corporate issuance (cheap money) to buy or merge with other companies?
- Continuing the spurt of recent M&A activity, Endo Pharmaceuticals Holdings Inc (ENDP.O) will buy private generics maker Qualitest Pharmaceuticals for about $1.2 billion, marking its second deal in as many months.
In any case, one could hardly infer in general that “business conditions” are deteriorating. Now, if you talk about small business (real small business, not the fake stuff huge corporations do to avoid taxes and accountability), a case can be made that “business conditions” are tough, but deteriorating? Are small businesses worse off than they were, say, six months ago?
Then there are the corporate earnings for this year. So far, they have been the support under the wobbly foundation of the U.S economy. Stellar earnings have kept the stock market afloat, for sure, and they have contributed to business confidence, which, by the way, is much higher than consumer confidence, which tells us what?
- Walgreen Co (WAG.N), the biggest U.S. drugstore chain, reported higher-than-expected quarterly earnings, helped by strong prescription drug sales.
I really don’t know what any of the above tells us regarding the market or the economy, other than within the earnings of Walgreen is a possible clue as to how a lot of folks are dealing with the constant drum beat of less than “happy” economic news and the non-stop roller coaster ride we have come to know as the “market.”
Trade in the day; invest in your life …
