Daily Investment Interpretations

Friday, June 1, 2012

2012-6-1: (Friday Night): The markets dove today on weaker-than- expected U. S. economic data: U.S. stocks sink as global growth view teeters; Stocks slammed as Dow erases 2012 gains; Stocks' worst day in 6 mos; S&P 500, down 10% since April, is in correction; . The NASDAQ Composite closed down 79.86 points (-2.82%) to end at 2,747.48. The Dow deflated 274.88 points (-2.22%) to close at  12,118.57; the S&P 500 declined 32.29 points (-2.46%) to settle at 1,310.33. Oil ended the day at 83.25: lOil ends well below $84, loses over 8% on week; gold logged off at 1561: Gold scores biggest single-day gain since August. The VIX jumped 2.60 to 26.66.
    "Stocks dive 2% or more, wiping out 2012 gains, as U.S. jobs data sparks fears of a slowdown."
"Wall Street suffered its bloodiest day of the year Friday as U.S. stocks sank more than 2% following an ugly jobs report. The Dow erased all its gains for the year, and the S&P 500 and Nasdaq moved into correction territory, down more than 10% from the year's highs. More"
    The S&P 500 index has closed below its two-week-ago lows and just below its 200-day moving average, and faces little resistance all the way down to the 1205 level. The intermediate term trend is no longer up.
An alternative scenario is presented in this article: Friday Fake Out: The Bear Trap Has Sprung. The author suggests that The Fed may try to reverse this market rout over the weekend. If so, today's action could turn out to be a final bear market washout, followed by a rebound. 
    If not, the author says he will be a lot more bearish on Monday morning. 

    Marketwatch says: 
S&P 500 in 10% correction  "The S&P 500 /quotes/zigman/3870025 SPX -2.47% fell 2.4% on Friday, taking the index of large-cap U.S. stocks more than 10% off its 52-week intraday high -- or what many analysts term a correction. The Nasdaq Composite /quotes/zigman/123127 COMP -2.83% had already met that definition ahead of Friday's stock retreat and is now 12% lower than its recent high. The Dow is 9% below its 52-week peak. A correction for stocks "doesn't mean we're in a bear market. But it does mean you have to recalibrate for a world where the U.S. is going to barely grow 2%, Europe is a chronic source of stress, and emerging markets at least for now, are not contributing much," said Russ Koesterich, global chief investment strategist at BlackRock iShares."
    U.S. 10-year yields fall under 1.50% after jobs  
    Employment, economic growth slow down  
    Dollar facing Fed pressure  "Greenback gives ground as traders anticipate the Federal Reserve will be driven to action by weak gains in U.S. job market"
    U.S. adds 69,000 jobs in May.  "The U.S. generates the fewest new jobs in a year as the unemployment rate ticks up."
    2012 gain gone  "Stocks skid on U.S. jobs report and data from China and Europe. Dow turns negative for year."
    The price of a do-nothing Congress  "The focus on austerity has forced the U.S. job market into a holding pattern, Heather Boushey says."
    Rex Nutting writes: Investments in the future have dried up  "During the Great Depression, we built roads and bridges and infrastructure we enjoy today. Now, Rex Nutting says, we're seeing spending tumble."
    Construction spending up.  
    Factory index declines a bit  
    Mark Hulbert notes that GDP growth 1% higher than month ago.  
    GDP: Reasons to be cheerful  
    Myra Saefong writes about Gold’s new identity crisis.  
    tFor Spaniards, there’s no going back to the peseta 
    Irish voters back fiscal treaty in referendum
    Euro-zone manufacturing downshifts in May.
    Peter Brimelow asks: Is your stock a tennis ball or an egg?  

    Friday Fake Out: The Bear Trap Has Sprung    
    State of the Markets articles include:   
    May Jobs Report a Big Disappointment  "The Big Kahuna of economic reports - aka Nonfarm Payrolls - showed that the economy created just 69,000 jobs during the month of May. This was a huge miss as expectations had been for ... Read More »"
    Are You Prepared for the Summer of Discontent III?  "Sell in May and go away. It appears that is just about everything an investor needs to know these days. You see, selling in May certainly worked well in 2006, it eventually saved you some pain in 2007, was prophetic in 2008, modestly profitable in 2009, very helpful in 2010, a life saver in 2011, and a darned good idea this year as the S&P 500 fell -6.27% last month. To be honest, I'm not completely sure why this old Wall Streetism works. But this year the reasons were pretty simple as it appears that investors are headed for yet ... Read More »
    ISM Report Shows Growth Slowing  
    Construction Spending Up Modestly in April   
    Personal Income and Spending Report No Help  
    Eurozone PMI's (Final) Show Contraction Continues  
    China's Official PMI Pulls Back in May    
    This week ended with the markets falling off a cliff. Let's see what happens this weekend.