Stocks have nothing to fear but uncertainty itself
What will it take to stop the downturn in U.S. stocks? Traders and investors stepping up to buy stocks. Whatever the reason—good earnings, some positive news on the economy, a reassuring statement from the Federal Reserve, whatever—stocks won’t go up unless more money...Deficit to shrink by $80 billion to just $1.3 trillion: Now don't you feel better?
This morning, January 26, the Congressional Budget Office (CBO) released new projections showing that–if current laws and policies remained unchanged–the federal budget would show a deficit of $1.3 trillion for fiscal year 2010. That’s what passes for good...For after the correction, think industrial stocks: Market history says this is their time
Are you in the right sectors of the stock market for this point in the economic recovery? (Yes, despite the stock market correction, we are still in an economic recovery.) Solid data stretching back to 1945 argues that certain industries and sectors outperform during...A week ahead with enough economic date to move stock markets
Get set for a week of economic news—and spin. And it’s how the numbers are spun that will determine if the recent stock market slide continues or shifts into a resumption of the rally. The big number, of course, is due on Friday when the U.S. government releases...2010–well, the first half anyway–looks good for stocks despite the current correction
The odds that the U.S. stock market will win its current bet look daunting. Especially with stocks currently threatening a good-sized correction. Investors are betting that the U.S. economy will produce a big enough increase in earnings to keep stock prices headed...Get your portfolio ready for the profitless global economic recovery
So what should investors do about it? What’s “it”? The global crisis in profits caused by excess supply over demand. Take a look at how “it” is at work across the global economy. The aluminum industry—awash in excess global capacity with more scheduled to come on...China isn't an asset bubble waiting to burst–it's worse
I think investors are worried about the wrong kind of crisis in China. Worry seems to focus on the possibility of an asset bubble and the change that it will burst sometime in the next two to three months. I’m more concerned about a slide into a crisis that will be an...Disappointing retail sales in December remind investors that growth trend for 2010 is uncertain
Ouch, falling retail sales in December are a real disappointment to all those betting that they know how fast the economy will grow in 2010. Time to put a little more humility back in all our projections and admit that we still don’t know what the real growth trend...Alcoa delivers bad news for global profits
After the close on Monday January 11, Alcoa (AA) reported a loss of $277 million for the fourth quarter of 2009. Excluding special items, Alcoa earned a penny a share. The company turned free cash flow positive for the first time since June 2008 Evidence that the...Looking for countries that have their financial acts together? Look to emerging markets like Peru and Indonesia
As far as I know, there’s no financial-markets law saying that if some countries get a credit-rating downgrade, then others must get a credit-rating upgrade to keep the system in balance. But right now it seems to be working that way. The past year has brought...The U.S.–and the rest of the developed world–is near the point where debt takes a big bite out of growth
So exactly when does a lot of debt for a country such as the United States, Japan, the United Kingdom, Greece or Italy become too much debt? The threshold is when government debt rises above 90% of national GDP, economists Carmen Reinhart and Kenneth Rogoff argue in a...The next financial crisis has a name and it's the United Kingdom
It’s one thing when it’s Greece or Portugal. A credit downgrade or warning for those two countries isn’t exactly headline news for most investors. For most of our portfolios these are peripheral markets. Ireland in trouble too? Yawn. Don’t own any Irish stocks. Italy?...Not much good news in today's unemployment numbers
Good news (well, a little) and bad news in the unemployment numbers from the U.S. Department of Labor this morning. Although the number of workers filing initial claims for unemployment climbed in the week ended January 2 to 434,000 from 433,000 in the previous week,...Another jobless "recovery"?
The U.S. government releases its jobs figures tomorrow and Friday, January 7 and 8. Lucky economists aren’t groundhogs or they’d be scaring themselves back into their burrows for well more than six more weeks of unemployment winter. I’d call the mood on jobs and...Another day, another GDP revision: I don't think new numbers on the 3rd quarter will tell investors much tomorrow
Stocks and the U.S. dollar rallied today, December 21, on a belief that U.S. economic growth will be so strong in 2010 that even a Federal Reserve interest rate hike around mid-year won’t be enough to derail a recovery. Tomorrow the market gets a little dose of...Nothing surprising in this morning's surprisingly bad unemployment numbers
As you read this morning’s bad news on unemployment, keep repeating: “Unemployment is a lagging indicator; Unemployment is a lagging indicator.” It should keep your blood pressure down , prevent you from climbing out on ledge, and from joining this morning’s knee-jerk...Right now a little inflation is good news
Inflation? Ever heard of it? It’s back. Or at least investors can smell the faint whiff of it amidst the seasonal tang of freshly cut Christmas trees. And that’s actually a good thing. On December 15 the Bureau of Labor Statistics announced that the Producer Price...Are we thriftier or have banks just cut up our credit cards?
Maybe U.S. consumers aren’t quite so virtuous after all. According to the flow of funds report from the Federal Reserve released last week, U.S. consumers had cut back on their use of credit in the third quarter of 2009. Outstanding credit card bills had dropped by...China's economy takes another step toward business as usual–and that's good news for the rest of the world
China moved another step toward normal, according to economic data for November released on December 11. Not close enough to normal, yet, for China to remove the dollar peg that has kept the renminbi at 6.8 to the dollar since July 2008. But the statistics show that...Household wealth rises and foreclosure rate hits a record–what kind of recovery is this?
Put these two headlines together from Bloomberg today and you’ve got a good snapshot of the U.S. economic “recovery” to date. “U.S. Foreclosures to Reach 3.9 Million in Second Record Year.” “Household Net Worth in U.S. Increases by $2.67 Trillion.” Let’s look at the...Initial claims number leaves jobs picture murky
I’m glad we cleared that up. Going into this morning’s 8:30 ET release of the numbers for initial claims for unemployment for the week ended on December 4, the big question was whether or not the data would support the big drop in November job losses—to just...Watch tomorrow's initial claims for unemployment number for signs that the economy is strong?/weaker? than expected
Time to torture the data! Wall Street will have the red-hot irons and the Spanish boots out in full force tomorrow morning trying to extract the last bit of information out of the initial claims for unemployment number that will be released at 8:30 a.m. ET. The hope...Mortgage deliquency rate projected to inch–and I mean inch–downward in 2010
Reassuring news on the home mortgage front: the tide of mortgage delinquencies will start to recede in 2010—unless you live in Arizona, California, Florida, New York or Virginia. Those states will see delinquencies continue to climb next year. That’s the forecast from...Good news on jobs hurts Treasuries, oil, stocks; crushes gold
All it took was an unexpectedly strong unemployment report. Following the Bureau of Labor Statistics release of numbers showing the economy lost just 11,000 jobs in November rather than the expected 125,000, the Dollar Index broke above its 2009 trend line and the...What does it say if today's good news on unemployment doesn't lead stocks higher?
Stocks should soar today. If they don’t, investors will need to rethink their explanation for recent market weakness. This morning the Bureau of Labor Statistics announced that the economy lost just 11,000 jobs in November. That was a huge surprise. Wall Street had...Not a double dip but a sputter for the economy in 2010
The economy is looking increasingly dicey for 2010. Oh, things are okay now. The most recent numbers are, in fact reassuring. The United States seems to be on track for something like 3% economic growth in the fourth quarter. That would be a slight acceleration from...Buy Ritchie Bros. Auctions (RBA)
The perfect stock for the current economic uncertainties probably doesn’t exist. These shares would have to shine if the economy recovers in 2010 as strongly as optimists now think and do well if the recovery is only tepid and even climb if the economy slid back...Pressed for cash, states go after pension pot of gold
Wonder how governments will close the huge budget gaps created by the Great Recession and the bailouts of the financial crisis? New York State’s recent budget move provides a pretty good road map. And you can sum it up concisely. Go after retirement programs. It’s...Job losses slow but still higher than expected
Another 169,000 jobs lost in November. About the best thing you can say about the report from ADP Employer Services released this morning is that the U.S. economy is shedding jobs at a slower rate. The 169,000 jobs lost in November is the smallest drop since July...Jim’s Daily Email Alerts:
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