Author Archive

• In Memoriam
  Eddy Elfenbein, November 11th, 2012 at 12:55 pm

  In Flanders fields the poppies blow
  Between the crosses, row on row,
  That mark our place; and in the sky
  The larks, still bravely singing, fly
  Scarce heard amid the guns below.

  We are the Dead. Short days ago
  We lived, felt dawn, saw sunset glow,
  Loved and were loved, and now we lie,
  In Flanders fields.

  Take up our quarrel with the foe:
  To you from failing hands we throw
  The torch; be yours to hold it high.
  If ye break faith with us who die
  We shall not sleep, though poppies grow
  In Flanders fields.

• Morning News: November 9, 2012
  Eddy Elfenbein, November 9th, 2012 at 7:37 am

  Heavy Lending Creates a Surge in Chinese Economy

  China Electricity-Output Growth Rebounds

  Diageo to Buy Stake in India’s United Spirits for $2 Billion

  Iberia To Axe 4,500 Jobs To Keep Airborne

  Soybeans Drop as Supply Concern May Ease in U.S. and Brazil

  Debt Ceiling Complicates a Tax Shift

  U.S. Jobless Claims Fall as Storm Starts to Affect Data

  Record Overseas Sales Boost U.S. Growth

  Wall Street Left To Rebuild Obama Ties After Backing Romney

  New York to Begin Gas Rationing as Storm Delays Recovery

  Priceline to Buy Kayak in $1.8 Billion Deal

  Mcdonald’s Monthly Sales Fall For First Time In Nine Years

  J.C. Penney Same-Store Sales Plummet 26.1 Percent

  Jeff Miller: Debunking the 100% Recession Chart

  Roger Nusbaum: 200 DMA Looms!

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• Yeah…About that Rally
  Eddy Elfenbein, November 8th, 2012 at 12:18 pm

  The market has lost all its gains today and just pierced the intra-day low from yesterday. Today’s low was 1,387.96 which is the S&P 500’s lowest point since early August.

  

  We’re now hovering just above the market’s 200-day moving average of 1,380.77.

• Oops
  Eddy Elfenbein, November 8th, 2012 at 11:39 am

  From yesterday’s New York Times:

  Correction: November 7, 2012

  An earlier version of this article misspelled the singer’s surname in a number of places. He is Bruce Springsteen, not Springstein.

• Earnings Projections Are Still Coming Down
  Eddy Elfenbein, November 8th, 2012 at 11:24 am

  Here’s a look at the S&P 500 along with its earnings. The black line is the S&P 500 and it follows the left scale. The yellow line is the earnings and it follows the right scale. The two lines are scaled at a ratio of 16-to-1. This means that whenever the two lines cross, the market’s P/E Ratio is exactly 16.

  

  The earnings line into the future represents the consensus from analysts. The problem is that earnings projections have been coming down. The analyst community now expects the S&P 500 to earn $113 next year. That’s still a good number but it will require earnings growth to ramp from the small earnings decline we saw with Q3.

  When I saw Barry Ritholtz’s investment conference last month, Barry posted a graph showing how poor analysts have been in getting earnings growth right. It seems to me that as long as the earnings growth trend continues, then analysts are pretty accurate in getting that right. Of course, that’s the least important information. Where they’re wrong is in targeting when earnings suddenly drop. That’s the most important information.

• The Day After the Day After
  Eddy Elfenbein, November 8th, 2012 at 10:34 am

  The market is weakly recovering today after the second-worst sell-off this year. Yesterday’s 2.37% loss for the S&P 500 was only exceeded by a 2.46% plunge on June 1st. Right now, we’re up by about two points.

  This morning we learned that weekly jobless claims fell 8,000 to 355,000 however this data set over the next few weeks will be impacted by the effects of Hurricane Sandy. We may see a bump up in jobless claims in another month, but for now, the numbers look good.

  The government also reported that the trade deficit fell by 5.1% in September. The trade deficit is now close to its lowest levels in two years. Of course, much of this isn’t due to strength here, but weakness there.

  Speaking of which, the biggest news today came from the Bernanke of Europe, Mario Draghi. The head of the European Central Bank said he’s ready to buy bonds as the European economy continues to get worse. The ECB met today and decided to leave interest rates at 0.75%.

  The concern now for the Europeans is that Germany is beginning to look weak. Until now, that country had been holding things together. Now some analysts think that an ECB rate cut will come before the end of the year.

  The big area of concern now is Spain. This is one of the reasons why I told investors to expect a difficult market this autumn. Spain needs to ask for a bailout but they haven’t done so yet. The problem is that the political leaders see what’s going on in Greece where folks are rioting over forced austerity. As a result, Spain wants the best deal it can get. The problem gets worse because the ECB can’t make any hard promises before the fact. An economy is a dynamic system and facts on the ground can change quickly.

  There at least was some good news for Americans today. Monthly sales at McDonald’s ($MCD) fell for the first time in nine years. We’re either getting healthier, or perhaps, going to Arby’s.

• Morning News: November 8, 2012
  Eddy Elfenbein, November 8th, 2012 at 6:56 am

  Molotov Cocktails Light Up Athens Ahead Of Austerity Vote As Draghi Admits German Slowdown

  Weidmann in Defeat Still Influences ECB Bond-Buying Plan

  Qualcomm Helped, Hurt By Close Apple Ties

  US Panel Affirms Tariffs On Chinese Solar Products

  How Quickly Do Stock Markets Lose Their Obama Bounce

  For Wall Street, Obama’s Reelection Means No Dismantling Of Dodd-Frank Law

  SocGen Quarterly Net Falls 86% on Debt Charge, Greek Sale

  Lenovo Profit Rises 13% as Share Overtakes Hewlett-Packard

  Deutsche Telekom In €6bn Loss On US Deal

  Qualcomm Helped, Hurt By Close Apple Ties

  Boeing Says Cuts Save $1.6 Billion

  EADS Cash Dwindles as Superjumbos Line Up for Deliveries

  Monster Posts Slowing Growth

  Walmart Moves “Black Friday” Earlier On Thanksgiving Night

  Joshua Brown: Fire in the Disco!

  Howard Lindzon: Four More Years for Obama…Will Apple go to Zero and What Does It Mean for the Stock Market?

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• Four More Years
  Eddy Elfenbein, November 7th, 2012 at 1:15 pm

  Not every stock is getting pounded today. News Corp ($NWSA), the parent of Fox News, is one of the few stocks that’s up. I guess Obama is good for ratings.

  

• The Dow Drops 330 Points
  Eddy Elfenbein, November 7th, 2012 at 11:30 am

  Wall Street, apparently, wasn’t thrilled with yesterday’s election. The stock market is taking a bit hit this morning. The S&P 500 has been down as much as 2.3% today which if it holds up would make it one of the worst days this year. I’m a little surprised the stock market is so surprised.

  Of course, there could be other factors at work. For example, there was a lousy report on German manufacturing today which comes on the heels of another bad one yesterday.

  There’s also a general strike in Greece as the legislature gets ready to vote on more austerity measures. I noticed that of the seven worst performing stocks in the S&P 100, five are major banks ($JPM $C $GS $JPM $BAC). Also, the defense contractors are having a rough day.

• Morning News: November 7, 2012
  Eddy Elfenbein, November 7th, 2012 at 6:48 am

  Stocks, Treasuries Rise on Obama’s Victory

  Greece Prepares to Vote on $23 Billion in New Cuts

  France Announces Cut in Payroll Taxes for Businesses

  Facing Protests, China’s Business Investment Slows

  Sinopec Said to Buy Nigeria Oil Blocks From French Total

  Don’t Worry Big Oil, President Obama Probably Doesn’t Hate You As Much As You Think

  Suzuki to Exit U.S. Car Market After Almost Three Decades

  ING Groep Cutting 2,350 Jobs as Quarterly Profit Slides 64%

  Munich Re Shrugs Off Sandy to Raise 2012 Profit Target

  AOL Climbs After Posting Profit on Higher Advertising Sales

  Morgan Stanley Selling Its Indian Private Bank

  Burberry Posts Profit That Exceeds Analysts’ Estimates

  What An Office-Supply Cabinet Says About The Future Of The Economy

  Jeff Carter: Financial Distress, Coming to A State or City Near You (Let’s Hope Not a Country)

  Cullen Roche: All Fiat Money Systems Fail, Right? Wrong.

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