Daily Investment Interpretations

October 7, 2009

2009-10-7:  Today, the markets caught their breath. The NASDAQ Composite closed up 6.76 points, (0.32%) to end at 2,110.33, the Dow dropped 5.67 points (-0.06%) to finish at 9,725.58 and the S&P 500 gained 2.86 points (0.27%) to end at 1,057.58. Oil ended down slightly at $69.82 a barrel, while gold again hit a new all-time high (up $4) of  $1,044. The VIX fell to 24.67.
     This is consistent with a market digesting its gains, although it's also consistent with a market that has peaked and is rolling over. Only time will tell. Supposedly, the markets are waiting to see what when happen when the quarter's first earnings report comes from Alcoa after today's close. Alcoa is expected to post a loss for the third quarter, but to return to profitability in the current (fourth) quarter.
Update:  Alcoa has just reported a surprise profit that "signals that key markets are stabilizing". Barring unexpected bad news, this should bode well for tomorrow's market openings. Meanwhile, Mark Hulbert writes: Gold and bonds can't both go up forever. 
Still Later: Market futures are up smartly tonight, presaging a higher opening tomorrow, although what comes next will depend upon whether market continues to outperform expectations. Of course, third quarter-2008 earnings provide a low bar for comparison.
    Commercial real estate may come around the bend as the next wave of financial crises to hit the fan. Paul Krugman is warning that the fiscal stimulus has been too small to lift the country out of its funk. Is this recovery sustainable? (I guess we'll find out.)