Author Archive

  • AFLAC Soars
    , May 10th, 2010 at 11:02 am

    The stock market is having a very strong morning. We’ve basically closely the gap from everything we lost during last week’s panic. The Dow is currently up 360 points and our Buy List is doing even better. Thanks to the European bailout news, AFLAC (AFL) is doing especially well. The supplemental insurer is currently up $5.40 which is over 12%.
    I realize I’m beginning to sound like a broken record, but the cyclicals are the key stocks to watch. The Morgan Stanley Cyclical Index (^CYC) is up 5.22% which is well ahead of the S&P 500. This is clearly the “it” index of this market.

  • Economist Tells Truth, Apologizes
    , May 10th, 2010 at 10:45 am

    J.P. Morgan Economist Calls Senators ‘Ignorant’
    The hearings exposed an unnerving ignorance of fundamental principles of market economics by folks who have a hand in remapping rules of finance that will be with us for a while.

    We begin counting, now. Three…two…

    JP Morgan apologizes for memo trashing Senators

  • Order Your Federal Reserve Comics Today
    , May 7th, 2010 at 10:08 am

    No, I’m not making this up.

  • Decent Emplyoment Report
    , May 7th, 2010 at 8:38 am

    After yesterday’s turmoil, Wall Street was early anticipating today’s jobs report. The good news is that it was a good report. Good, not great. This is especially good because few people were expecting good news.
    The non-farm payroll report said that the U.S. economy created 290,000 jobs last month and another 230,000 in the month before that. So that’s 520,000 jobs over two months. Not bad.
    The problem, of course, is that in the 24 months prior to that, the economy shed 8.25 million jobs. In other words, we still have a long, long way to go.
    image940.png
    The unemployment rate rose to 9.9% after being stuck at 9.7% for the first three months of the year. This figure, however, is a bit misleading. Breaking out the decimal points, the unemployment rate for March was 9.749% and it rose to 9.863% last month. While this is being reported as a 0.2% rise, it was, in fact, an increase of 0.114%.

  • Watch the Market Tumble
    , May 7th, 2010 at 12:01 am


    (Via: TBI)

  • The Buy List Survives
    , May 6th, 2010 at 11:50 pm

    I’m happy to report that our Buy List survived today, bruised but still alive. The average of our 20 stocks was down -3.03% compared with 3.24% for the S&P 500.

    AFL -3.86%
    BAX 0.77%
    BDX -0.97%
    BBBY -4.36%
    EV -5.74%
    LLY -1.94%
    FISV 1.51%
    GILD -2.56%
    INTC -2.99%
    JNJ -2.67%
    JOSB -3.91%
    LUK -4.37%
    MDT -2.65%
    MOG-A -5.16%
    NICK -4.44%
    RAI -3.77%
    SEIC -3.24%
    SYK -1.70%
    SYY -3.74%
    WXS -2.02%

    The only one of our stocks that appeared to be impacted by the glitch was Reynolds American (RAI). Reynolds dropped from $53.55 to $36.35 and rallied to $51.53.

  • WTF!
    , May 6th, 2010 at 11:30 pm

    yahoo050610a.png
    So I head out for a meeting this afternoon and the market goes bananas. I trust you people to take care of these things when I’m not watching.
    Ok, let’s dissect what happened. The market had been drifting lower during the early afternoon. Then at around 2:30, all hell broke loose. At one point the Dow was down 1,000 points (or 998.5 to be exact). The market then staged a furious 650.7-point rally to close down “only” 347.80 points.
    Traders had been worried about Greece, the British election and tomorrow’s jobs report. However, something truly odd was going on. Accenture (ACN), for example, dropped from around $40 a share to a penny. Procter & Gamble (PG) and Philip Morris (PM) were also down sharply without explanation. Six companies traded at $0. Someone had clearly blundered
    As of now, nobody knows exactly what happened but it seems that the computers started to rise up against us. Or more specifically, someone with a fat finger hit the wrong button. There was a rumor that a guy at Citigroup dumped $16 billion worth of S&P futures, instead of the $16 million he was supposed to. Hey, these things happen. Billion…million. Tomay-to…tomah-to.
    What may have happened is that one series of program sells kicked in another serious of sells and it quickly snowballed. The Nasdaq has said that it will cancel hundreds of trades made between 2:40 p.m and 3 p.m. The quote of the day belongs to the WSJ’s Evan Newmark: “Today’s market was neither orderly nor efficient nor trustworthy. It was just a bunch of computers making ugly, messy love with each other. And your money hung in the balance.”
    Bear in mind that on any given day, roughly 50% to 75% of all trades are done through high-frequency trading. The hero of the day turned out to be Jim Cramer. He was on CNBC with Erin Burnett and told viewers, “That’s not a real price. Just go buy Procter & Gamble.”

  • Score One for Efficient Markets!
    , May 6th, 2010 at 1:56 pm

    You better sit down for this one.
    Earlier I mentioned that Fiserv (FISV) started spiking around noon.
    The reason seems to be that Blackstone (BX) and others are in talks to buy Fidelity National Information Services (FIS).
    Yes, they’re confusing the ticker symbols.
    yahoo050610.png
    Or possibly, folks are buying FISV because they think other people will mistake the ticker symbols which will lead to…even more people buying FISV!
    In other worlds, welcome to Wall Street.
    (I should add that the two companies are competitors so some reaction to the buyout should be expected.)

  • The Midday Market
    , May 6th, 2010 at 1:12 pm

    The market started the day with the cyclicals zooming out of the gate. I thought this was a typical reverse reaction day when everything that had been doing poorly suddenly catches fire. But that gave way and the cyclicals are now down with the rest of the market. The S&P 500 has been as low at 1150 today. It seems like only a few weeks ago when we passed through 1150, which, of course, it was.
    Our Buy List is showing a lot of resiliency. The S&P 500 lost -0.66% yesterday but the Buy List gained 0.15%. (Did anyone else jump up on their desk and do the Cabbage Patch when NICK hit $9.20? Um…good, me neither.) So far today we’re only down -0.56% compared with the S&P 500’s loss of -1.02%. So we’re sucking less but it shows you how our stocks can hold up when the cyclicals break down.
    Around noon, shares of Fiserv (FISV) suddenly sprung to life. The stock is up about 6% today. AFLAC (AFL) is back down again today. The stock has been as low as $47 which is a very attractive price.

  • Mark Haines for the Win
    , May 6th, 2010 at 11:12 am