Daily Investment Interpretations

Wednesday, May 16, 2012

2012-5-16: (Wednesday Night): The markets sank again today on the news coming out of Europe: U.S. stocks lose steam; Dow loses ground; Greece worries weigh on U.S. stocks. The NASDAQ Composite slid another 19.72 points (-0.68%) to end at 2,893.76. The Dow sank another 33.45 points (-0.26%) to close at  12,598.55; the S&P 500 subtracted another 5.86 points (-0.44%) to settle at 1,324.80. Oil ended the day  at 92.79: Oil ends at lowest since November, under $93; gold logged off at 1540: Gold at 10-month low, holds to $1,500 an ounce. The VIX climbed 0.30 to 22.27. "Crude-oil prices keep sliding as energy-market bears feast on a strong dollar, a weak economy, and Saudi assurances on supply (First Take)."
    "Dow industrials suffer 10th loss in past 11 days as U.S. stocks lose grasp of day's gains."
    "Following a positive start, U.S. stocks struggled to hold on to gains Wednesday afternoon, as investors weighed strong U.S. economic data against ongoing uncertainty about Greece's political situation. More"

     Permanent Link to Eurodämmerung  What this Paul-Krugman article says is that he and some associates foresee:
1. Greek euro exit, very possibly next month.
2. Huge withdrawals from Spanish and Italian banks, as depositors try to move their money to Germany.
3a. Maybe, just possibly, de facto controls, with banks forbidden to transfer deposits out of country and limits on cash withdrawals.
3b. Alternatively, or maybe in tandem, huge draws on ECB credit to keep the banks from collapsing. 
4a. Germany has a choice. Accept huge indirect public claims on Italy and Spain, plus a drastic revision of strategy — basically, to give Spain in particular any hope you need both guarantees on its debt to hold borrowing costs down and a higher eurozone inflation target to make relative price adjustment possible; or:
4b. End of the euro."
This may possibly explain today's stock market malaise.
    Marketwatch says: 
Dollar adds to longest rally in two decades.
Housing market's most growth in four years.
    Industrial output rebounds
    Wary and watchful at Fed  "Central-bank policy makers not sufficiently confident in recent economic indicators to upgrade their description of the economy, as “several” say more easing could be needed if momentum slows."
    Thomas H. Kee's counsels Avoiding both sides of the bond market  
    Michael Gayed presents The most important question in the world.  
    Mark Hulbert enunciates The real 'Dimon Principle'  
    Dow’s bearish double top takes shape  
    Greece gets worst of worlds with no euro decision  
    Matthew Lynn predicts that Berlin will blink, and keep Greece in euro zone.  
    European Central Bank to continue support for Greek banks  
    Rex Nutting notes that Obama and Romney turn from economy  

    State of the Markets articles include:   
Greece Update: What's Next in the Political Circus and Fears of Bank Runs "It looks like a caretaker government is now the next course of action for Greece. Reports indicate that due to the inability of Greek political party leaders to reach a deal on either a unity or a technical government, the focus today shifts to the formation of a caretaker government. The Greek newspaper Kathimerini stated that if the party leaders fail to agree on a candidate to take over as caretaker prime minister, President Karolos Papoulias will then appoint one. In addition, June 17th still seems to be the most likely date for the next election. The article added that the constitution says that in ... Read More"         
    NAAIM (National Association of Active Investment Managers) Index Shows Active Managers Still Optimistic            
    Industrial Production and Capacity Utilization Above Expectations in April 
    Housing Starts Perk Up in April  
    Investors Intelligence: Bullish Sentiment Rebounds Slightly        
    Market futures are up 0.4% tonight.