Daily Investment Interpretations

November 15, 2011

2011-11-15: (Tuesday Night): Stock market indices rose today on better-than-expected domestic news: Investors re-examine data, Empire Manufacturing Index Rises in November; Ahead of Expectations, Retail Sales Rise +0.5% in October, Producer Price Index Shows No Inflation in October. The NASDAQ Composite marched back up 28.98 points (1.09%) to close at 2,686.20. The Dow added 17.18 points (0.14%) to 12,096.16; the S&P 500 increased 6.03 points (0.48%) to settle at 1,257.81. Oil rose to 99.38: Oil knocks at $100's door, Anadarko strikes it big in Rocky Mountains; gold ended the day unchanged at 1,782: Gold up as Italy, Spain worsen euro-zone fears. The VIX gained 0.09 points to 31.22.
    Stocks May Lack Direction, But Volume's Dried Up.
    State of the Markets' take on the recent market action is that the market is digesting the gains it made in October. It's trading within a range, and until it breaks decisively out of that range, there isn't a lot of news to report. Typically, though, indices break out of a trading range moving in the same direction they were moving when they entered the range... which, in the present case, would be higher. At the same time, these markets are headline-driven, and the situation in Europe is continuing to deteriorate: Italy's 10-year bond yield back above 7%, Chilly reception for Mario Monti, and Market Update: It's Looking Ugly Across the Pond, and Fog hangs heavy over Europe. Even France is experiencing rising bond spreads.
    Dr. Irwin Kellner has written an article entitled: Supercommittee: Deal or no deal? His opinion is that the supercommittee will remain deadlocked, and the supercommittee will either request additional time, or will allow the default solution which will lead to $1.12 in automatic  deficit-reduction steps over the next 10 years. 
    Michael Ashbaugh's weekly technical analysis is encapsulated in this article: Ashbaugh: Battle lines at major resistance
 U.S. to muddle along says one economist.
    Mark Hulbert's article is entitled: The euro is dead, long live the euro.    
    Fund managers expect another U.S. downgrade. I think this is a very important observation: it could lead to a temporary downdraft in the markets.  
    U.S. retail spending climbs, but it's because consumers are dipping into their savings... i. e., it's unsustainable.
Brett Arends' article today is: The stock market’s big lie revealed, and it's about the fact that the real money is made in private placements, not in the public stock market. 
    David Weidner has a good article today: What’s really ailing Wall Street.  
    Paul Farrell's daily article is: China vs. USA bout: 6 rounds to oblivion.  

   State of the Markets' articles include: 
    Technical Talk: Sound Set-Up, Little Movement    
    Stocks Gain; Euro Uncertainty Priced In?  
    Larry Fink's Current View on Europe and the Markets Larry Fink is the Chairman and CEO of Blackrock. Among his points: Europe is seeing a run on its banks and a "liquidity meltdown". He agrees with Angela Merkel "that we need to see closer Euro zone ties, not defections". He sees France as a "key linchpin". He sees the U. S. stock market as a good investment because 
    1. "1-2% fixed income returns simply not acceptable", (stocks are the only game in town.)
    2. "S&P valuations" (are) "very reasonable in terms of P/E ratio historically."
    3. There are "Some recent signs of improving U.S. economic data."
    4. "A lot of fear and uncertainty" (is) "priced in."
    5. "So much “deleveraging” has already occurred that unemployed cash is ready to jump into the market."
    Europe Economic Update: Q3 Flash GDP Reports
    Germany's ZEW Index Continues to Decline  
    Spain's Latest Bond Auction Not Well Received
    Market futures are down ¾ % tonight.