April 28, 2009
The indices dropped a trifle more today.
The NASDAQ Composite fell 5.60
to end the day at 1,674.
to close at 8,017,
and the S&P 500 dropped 2.35
points (-0.27%) to 858.
Oil fell slightly to $49.25, while gold gave up $14.60
to finish at $893.60. The VIX slipped 0.37
It's too early to know whether this epidemic of swine
flu that appears poised to become the first pandemic of the new century
will be a kitten or a tiger. In the meantime, suspected cases are being
wisely reported. At least six (1:00
a. m. Update:
U. S. patients have now been hospitalized.
Mexico's death toll has risen to 159, although only 7 of these have been
laboratory-confirmed per the World Health Organization. (1:00
A. m. update:
Mexican death toll appears to be stabilizing.)
One or two deaths
in California are suspected to be a consequence of swine flu. (1:00
a. m. update:
death is now suspected to be attributable to swine flu; the other has been
ordinary flu kills around 36,000 patients in the U. S. alone each year.
But the death rate in Mexico is running around 10% of those hospitalized,
and many of these deaths are arising from the patients' own immune
responses (as was the case with the 1918-1919 Spanish influenza): This
flu's danger is in its potential.
The newsworthiness of the swine flu epidemic appears to have declined, but
the number of swine flu cases in the U. S. has jumped now to 68, including
"a number of hospitalizations": U.
S. swine flu cases climb to 68. (The number hasn't been given.) These
hospitalizations probably involve pneumonia, and sound similar to the
Mexican cases. It also appears that U. S. patients are infecting others
around them. The World Health Organization is awaiting confirmation of
this person-to-person transmission. If confirmed within the United States
or Canada, the alert state would probably escalate to phase 5, virtually
insuring an imminent declaration of a global pandemic (phase 6).
One other point about this flu outbreak: it's occurring
after the usual flu season.
Roche pharmaceuticals, the manufacturer of Tamiflu (Oseltamivir
phosphate), has stated that it can produce up to 400 million doses a year,
and is prepared to license other drug manufacturers to also produce
Tamiflu if that should ever prove necessary.
Health Organization said today that this flu outbreak could be mild,
but also cautions that the 1918 flu pandemic also started out mild. An
official of the World Health Organization says a pandemic is not
inevitable, and is likely to be mild if it does occur: 100-plus
swine flu cases confirmed outside Mexico.
we have seen clearly as a result of these epidemiological investigations
is there have been probably three smaller waves of human-to-human
transmission and now there is an amplification among suspected cases,' he
said of Mexico."
In order to effect a pullback in the stock market, it
seems to me that the professional money managers who have bought stocks
during March and April in anticipation of an economic recovery would have
to confront economic news dire enough to change some of their minds, and
inspire them to part with some of the stocks they just bought.
Sigh of relief! I know it's too early to declare victory over a deadly
swine flu pandemic, but at least so far, the cases of swine flu that are
cropping up around the globe outside of Mexico are mostly mild. (Of
course, it would probably take a few days for a flu-induced pneumonia to
kill its victims so we may not be out of the woods yet, but as of Sunday
night, only one U.S. patient had been hospitalized: Newsweek:
Should We Panic?.) More than 150 deaths in Mexico have been attributed
to this new influenza virus, and more than 50 U. S. patients are suspected
to have the disease. It now appears likely that there will be a global
swine flu epidemic. What remains to be seen is how lethal it will be, but
the situation looks a lot less worrisome than it did this weekend when the
death toll in . Mexico rose from 68 on Saturday morning to 149 by Sunday
night. Now, a day-and-a-half later, the death toll has only risen by 3 to
the alarm, there was a spot of good news. The number of new cases reported
by Mexico's largest government hospitals has been declining the past three
days... from 141 on Saturday to 119 on Sunday and 110 on Monday." the
number of cases."
Turning back to investing, U.
S. consumer confidence soared in April, and Pace of decline in home prices slows, Case-Shiller data show.
A technical advisory service to which I subscribe is recommending a
holding strategy until the markets break out of their trading range. The
markets are ripe for a correction, but with everyone eagerly anticipating
a correction so they can "buy on the dip", the expected
correction is proving to be elusive. In the meantime, the NASDAQ Composite
(below) is approaching its 200-day moving average. The Dow and the S&P
500 have plateaued, and have settled into trading ranges.