Daily Investment Interpretations
August 12, 2010
Stocks fell again today on a disappointing weekly jobless claims report: U.S. initial weekly jobless claims rise to 484,000,
(but note that part of this increase is due to the extension of jobless benefits
to 99 weeks in the hardest-hit states). The NASDAQ
Composite lost 18.36
to finish at 2,190.27. The Dow dropped 58.88
at 10,319.95, and the S&P 500
to end at 1,083.61. Oil closed at $75.86 a barrel,
while Gold ratcheted up to $1,217. The VIX increased
0.3 to 25.69.
My investment advisory service noted that after an initial plunge, the dip buyers moved back in. My advisory service thinks this is another excursion within a range-bound market rather than a "game-changer".
The chorus of columnists sounding Paul Krugman's theme is swelling mightily lately: Gold rises as world spirals toward deflation. Still, not everyone believes in government intervention: Let the debt subside. Many still subscribe to the Little Bo Peep guidance: "Leave them alone and they'll come home, wagging their tails behind them."
Paul Krugman has pointed to Ireland as an example of a country that went down the austerity path several years ago. He argues that austerity hasn't helped them much.
Read story on ECB buying Irish bonds to calm volatility.
"Ireland has been the poster child for many optimists convinced that if a country has the necessary discipline and appetite then it can address major problems itself," said Jim Reid, strategist at Deutsche Bank. "While this may still be the case, there seems to be increasing headline risks from an economy that was a very early mover in terms of austerity." Read archived story on concerns about Ireland.
Fixed mortgage rates hit new lows
RealtyTrac: No foreclosure peak until 2011
Stock futures are mixed, but are basically down tonight.