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| Weekly Economic Review Economic Calendar About | ||
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Inside the Market |
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3/31/09 Yesterday’s Market Update It was some Obama action on GM that sent Stocks lower while Treasury prices did little to mention…again. Finally the Greenback maintained its gains via the EURO. Special Note You may be surprised but the Market Doctor applauds President Obama’s move on ousting GM CEO. This organization was poorly managed and its demise was largely a function of lack of innovative car production as the organization rested on financing for its financial performance. The worst part is that the blame was put on the cost of labor which is a farce. Stocks The uptrend has been neutralized as a host of skeletons continue to underpin this economy and government intervention is spooking big business. Absolutely no feel on direction except that underlying risk remains high. Fixed Income Yawn…hey the Fed better start getting more aggressive because 4.75% mortgage rates aint going to solve the housing problem. Currencies The EURO held the Doc’s 1.3100 support and the scenario remains that the US$ downtrend remains intact unless the 1.3100 gives way.
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3/30/09 Friday’s Market Update Stocks showed signs of reality as they posted a noteworthy setback on Friday, while the Greenback rallied hard via the EURO. Finally, Treasury prices did little to mention. Stocks Uncertainty over the extent of government policies regarding companies receiving bailout funds helped put a cap on the exuberant rally, pushing the major Indexes lower Friday. Asian markets in the early trade today have sold off as well. The technical picture remains positive and quarter end funds would love to minimize their losses. A break of S&P 800 would neutralize the recent exuberant uptrend in prices. Fixed Income The battle continues between lack of buying in auctions of Treasury paper and the Fed looking to push Yields lower. The Fed should probably win this one over the short term. Currencies Well, that EURO sticking point of 1.3600 was sure a sticker as the Buck made up serious ground last week following statements from a EUROZone official that their impending recession looks dire. Sounds like a little currency chatter to me. EURO support comes in at 1.3100, where a breach of this would negate the US$ downtrend.
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3/27/09 Yesterday’s Market Update The momentum managed to continue on the recent Stock bull move and Treasury prices rose as well. Finally the Greenback was quiet. Economic News No major surprises on the economic front. Stocks The positive trend to Stocks we have been mentioning is still intact as quarter end may just have some funds keeping the buying fresh. Still no reason to pick a top, however the underlying risk is rising for problems down the road. We’re now pretty far off solid support levels. Fixed Income Finally a small price gain after days of rising Yields. The trend for higher prices remains intact unless there is a breach of 10 Year Yields at 3%. Currencies Let’s play it again…the 1.3600 value zone remains the sticking point. Next excitement would be for a close above EURO 1.3800. US$ remains a wet taco. Weekend time and perhaps a scotch is in order.
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3/26/09 Yesterday’s Market Update It was a bumpy ride yesterday but the end result was Stocks ending in the green or is that black? Treasury prices did little to mention and the Greenback slipped back just a tad. Economic News Now didn’t the Doc mention that recently released economic data could produce anything? What’s happening is recent data is being compared to recent data that was horrible rendering the latest data not so horrible but still pathetic. Initial Claims and GDP data today…and anything can come out. Stocks The major support of S&P at 792 (just below the 800 level) held on the intra-day sell off and provided a bounce into the close yesterday. Latest positives? is the potential of some big banks not wanting TARP money. Now could this be because there’s strings attached to the money, e.g. no bonuses? (then not a positive). Price action still looks positive but starting to get a little tired. Keep an eye on nonsensical data today and support remains just below 800 on the S&P. Fixed Income Without fresh Fed buying, Treasuries will have trouble making substantial upside price gains, especially after a horrendous auction in the UK Gilt market and smelly one for US paper. Remember, that bailout plan needs lower Yields on treasuries to work. Currencies Let’s play it again…the 1.3600 value zone remains the sticking point. Next excitement would be for a close above EURO 1.3800. US$ remains a wet taco.
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3/25/09 Yesterday’s Market Update Stocks gave up a bit of the exuberant gains set on Monday while Treasury prices ended the day flat after posting losses for most of the session. Finally the Greenback came back to a bit of life via the EURO. Economic News We’ve got Housing data and Durable goods and anything can happen. In case you think the Doc may be off the mark on the weekly analysis, check this bit of news out: http://www.bloomberg.com/apps/news?pid=20601068&sid=aoTbWSDDY19Y&refer Stocks So far no reason to doubt the exuberance from Monday just yet as the major Indexes held support on yesterday’s retreat. A close significantly below the S&P 800 mark would provide a potential breaking point to the upside momentum. Fixed Income After a bumpy ride yesterday, price action is still maintaining a positive tone as the market has received outright support from a major player. Currencies As the Doc mentioned, the 1.3600 value zone remains the sticking point. Next excitement would be for a close above EURO 1.3800. US$ remains a wet taco.
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3/24/09 Yesterday’s Market Update It was up, up and away for US Stocks as the Fed support of Treasuries and the creation of a market for Toxic assets was warmly greeted by the market. Treasury prices remained quiet and the Greenback remained on its back. Economic News Housing data was a bit more positive than expectations and given the massive amounts of currency being printed, these economic reports may just be quite volatile over the next few quarters. Stocks The technicals looked good last week and the massive printing of currency to support the Treasury market and toxic asset market provided the exuberant boost. Upside remains the path of least resistance, however the underlying fundamentals to creating the higher stock price scenario is quite unstable for the long term. Haven’t you heard this before (e.g. when the Dow was at 13,000?). Fixed Income Mortgage rates have finally begun to follow the lower Yield move in the Treasury market and the path remains for yet higher prices and lower Yields for US longer dated Treasuries. 10 Year could get back to low 2% area before it’s over. Currencies The 1.3600 value zone remains the sticking point for the near term. However the long term looks quite bleak for the Greenback. A close above 1.3800 would get the ball rolling again.
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3/20/09 Yesterday’s Market Update Stocks just didn’t have it to move higher yesterday as the major Indexes ended in the red. Treasury prices backed up a smidge and the Greenback remained a wet taco. Oh, by the way, Gold was simply on fire. Economic News The big story is bonuses or no bonuses and if bonuses, 90 % tax rate? There simply appears to be a lot of anger around this and you can’t blame the average guy for being outraged. Stocks The exuberance from Wednesday just couldn’t hold out for another day. As the Doc mentioned yesterday, the underlying risk to this sector has grown dramatically, even at current lower levels. Technicians may try to push things higher but risk is mounting. Fixed Income Well, a lot of hub bub about the Fed driving rates down, however mortgage rates didn’t follow suit. Not much change from rates over the past few months. Uptrend in Treasury prices remains however. Currencies Well, the EURO poked its head just above the 1.3600 mark but had trouble making much more ground beyond it. Bottom line is the US$ has much farther to depreciate from here however the recent move was a bit fast and extreme where wild price swings can occur. The Doc is glad this week is over.
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3/19/09 Yesterday’s Market Update Oh my….the Doc hasn’t seen a day like yesterday since 1987 as Equities were buoyed by Fed support of the Treasury market. Treasuries posted a moon shot up in prices, the Greenback was simply decimated and Gold pulled a massive reversal higher. By the way…if you followed the Doc’s analysis, you’d be in pretty good shape. Market News You’ve probably heard it by now but the news of the day was Bernanke mentioning the Fed would support the Treasury market. The media quickly jumped on this as a positive, however the Doc sees a massive negative here in the form of currency destruction. Very disturbing turn of events. Stocks Stocks were buoyed by the lower interest rate/Treasury price rally. After hours very positive news by Oracle should be well received by the NASDAQ today. The Doc can’t comment on this market with any confidence as the underlying methods to buoy stock prices are simply disturbing. Perhaps more upside? The underlying risk is mounting quickly. Remember, the Doc used to post these warnings of underlying risk when the Dow was at 13,000. Fixed Income Well it looks like the Fed was reading the Doc’s comments yesterday as they came in to save the positive technical outlook for Treasury prices. Reality was that mortgage rates were not dropping, however given the massive rally in Treasuries, the mortgage bailout program has legs again. The long term ramifications of this scenario however are dire. 2.30% on 10 years is not out of the question. Currencies Now here is the market that is signally the economic reality behind the stimulus policies. The Doc mentioned the very bearish scenario for the Greenback and yesterday’s activity got the ball rolling. EURO 1.3600 should be a bit of resistance for the near term but the trend remains for a much lower US$.
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3/18/09 Yesterday’s Market Update Equities woke up after a day hiatus following some very odd economic data. Treasury prices sank back a bit and the Greenback remained soft. Economic News Housing starts posted a very odd extremely strong showing. The Doc says be very leery of this type of data especially when some people would love to somehow prop up the Stock market. PPI came in as a wash and CPI is out today. Stocks Interesting day yesterday as the Dow and S&P traded right back into resistance zone while the NASDAQ breached an initial threshold to turn mildly technically positive. Don’t know if it’s to be trusted just yet but as we mentioned in our weekly analysis…stocks had gotten extremely beaten where current levels really aren’t anything exuberant. Fixed Income All this nonsense about mortgage rates falling is simply nonsense. Fixed rates remain at levels seen a few months ago. 10 Year prices may be getting sensitive to a falling US$ as once again their Yields are right at the technical neutralizing level of 3%. The bailout plan probably doesn’t like price activity in this market over the past couple of days. Currencies Still playing with the high 1.2900 to 1.3050 value zone but the long term trend remains quite bearish for the Buck.
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3/17/09 Yesterday’s Market Update Equities finally ran out of short term steam which should be no surprise to you if you followed our analysis. Treasury prices sank aggressively and the Greenback got whacked via the EURO. Economic News We’ve got PPI and Housing data but the Doc is not impressed with data just yet. Stocks As we mentioned over the past couple of days, Stocks had another couple of percent upside before major resistance kicked in. This is exactly what transpired yesterday as Stocks posted losses on the day after gaining about 2%. Could be a short term bumpy ride here and the Doc has no feel for the time being. Fixed Income Well, 10 Years almost negated the positive price trend scenario by nearing the 3% mark. Lower mortgage rates by banks took the momentum from paper buying, however the scenario for higher prices remains intact until 3% is breached convincingly. Currencies Well, the EURO couldn’t quite close above the 1.3000 mark but got ever so close. It should have a little short term trouble getting through 1.3050 but once that’s breached the momentum should increase. Perhaps a little short term bumpiness between 1.29s and 1.3050 for now.
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3/16/09 Friday’s Market Update The Equity markets ended an exuberant week with mild gains while Treasury prices did little to nothing. Finally, the Greenback went out on a weak note via the EURO. (Hey, did you like the way the Doc used the words week and weak in the same intro), very tricky there. Obama Update The Doc has to admit that the last mini-speech given by President Obama was quite impressive. He made mention of the need to develop a new economy based on productivity and sound business principles rather than one reliant on asset bubbles to spur consumption. This is really what it’s all about…returning to sound business principles that enhance economic growth and productivity and this includes sound policies on SAVINGS and INVESTMENT and not just ULTRA CONSUMPTION. Stocks Stocks still have momentum behind them where more upside would not be surprising, but not a lot more. A couple a more percent is not out of the question. The bottom line remains however that there exist many skeletons in the closet in various industries and some turbulent economic times ahead given all the printing of money and massive deficits created. Fixed Income Nothing really exciting here and the path of least resistance remains for higher prices and lower Yields simply to support mortgage activity. Currencies The Greenback remains on its back via the EURO where a close above the 1.3000 level could provide more momentum to a continued move lower for the Buck. Keep an eye on this one…at some point it’s going to get real interesting.
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3/13/09 Yesterday’s Market Update A nice bout of follow through buying from the early week explosive up-trade in Stocks as positive economic news and a huge GM news flash got the engines cranking. Treasury prices posted a nice really and the Greenback got hammered via the EURO. Economic News An early morning surprise by a stronger than expected Retail Sales offered a jumpstart to the market. Stocks Well, it was Retail Sales and more importantly the announcement of GM that it didn’t need the near term government funds to stay afloat as massive cost cutting kicked in. This news simply provided the confidence this market needed to post solid gains. The momentum is probably worth another 1 to 2% on the upside but resistance will kick in for a few of the major Indexes at that point. Yes, rallies can happen in this beleaguered market which can quickly turn into set backs. For now, let’s ride the near term positive. Fixed Income As the Doc mentioned yesterday, the path of least resistance is for higher prices in 10 years and this will probably last for a couple of weeks. Some artificial demand should help keep Yields below 3%. Currencies The Doc is on fire on this one as the EURO continued to pop to the 1.2900 level. If the market can convincingly take out 1.3000 on a NY close, it may just be time for the sustained down-move in the Greenback. The Doc remains very bearish the Buck. Gold The squeeze was the event of the market yesterday as bearish technicals blew up the last two trading sessions. Still, Gold needs to get above about $960 to really get the up-move going again. Weekend time and the Doc beat the flu.
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3/12/09 Yesterday’s Market Update It was a quiet day in Stock land as investors are just plain scared of the uncertainty and the rash of bulls that have emerged as well. Treasury prices rallied hard and the Greenback lost solid ground to the EURO. A Market Doctor Kind of Guy Check out an interesting session with a guy that gets it (Peter Schiff) and Mr. GoldiLocks Larry Kudlow. Stocks Well, the amount of bulls that started running after the big rally on Monday is astonishing. One thing the Doc will mention is that perhaps purchasing stocks in the area of Dow 6000 may not be horrible for the long run (e.g. 15 Years) but there remains a lot of economic pain in the near future to plow through before considering corporate earnings posting consistently positive results. Be very careful out there. Fixed Income It was a nice rally for 10 Year prices as auction supply is ending. The Doc actually favors higher prices in this sector over the near term as the new focus will be to keep yields lower to manage the mortgage bailout plan. This positive price scenario would be neutralized with a 10 Year Yield rise above 3%. Currencies As the Doc mentioned a few days ago…we were looking for a pop in the EURO and pop it has via the Greenback. Still too early to tell if this is the start of the big US$ down-move. A trade of EURO above 1.3000 would provide the signal. Still bearish the buck here. Gold Be careful on this one. Technicians tried to break the $900 mark pushing prices down early in the week which triggered a bearish technical pattern on Tuesday. However yesterday’s move squeezed them, where another positive day could provide a very sizable squeeze and neutralize the bear pattern. Fundamentals remain quite bullish for this market.
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3/11/09 Yesterday’s Market Update Oh my…just when things look the darkest, along comes a massive short squeeze as Stocks screamed higher. Treasury prices got whacked again and the Greenback lost some ground to the EURO. Oh yes, Gold got hit by manipulative forces again. Economic Reports Not going there just yet….but this hype that CitiGroup has posted a profitable performance is pathetic. How many billion of printed stuff did they receive? Stocks Hey…I guess you gotta buy ‘em because some morons who were bullish at Dow 14,000 see the market appreciating 100% by years end. THE DOW IS BELOW 7000…do people realize how pathetic the US financial system is? Hey, better buy Citigroup because maybe all those billions could be calculated to some profitability !!! OK, major sarcasm from the Doc. Fixed Income It was hammer time yet again yesterday as the massive auction amounts are weighing on investors. This market is a mess. Currencies Forget about it for now.
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3/10/09 Yesterday’s Market Update Yes…simply another negative day in Stock land and the negativity spilled over to Treasury prices that sank as well and finally the Greenback just jerked back and forth. Economic Reports You know, this market commentator stuff is getting depressing as everything is in a down state. I guess that’s what you get for over a decade of bubble policy. Stocks Still in a negative mode and can you believe that even the mighty Warren Buffet is frustrated ? Hey, you want to feel good, just go out and get an ounce of gold, even if the price doesn’t go higher it’s just nice to hold. Fixed Income It’s time to see the price activity in response to major supply of paper hitting the markets. Currencies The Doc is getting the feel the EURO is about to make a sizable move up via the Greenback…just a feel.
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3/09/09 Friday’s Market Update Stocks managed to post a split performance as the broad market squeaked out a rally while Techs ended in the red. Treasury prices did little to mention and the Greenback slipped via the EURO. Economic Reports What do you know…Japan has now posted its first current account deficit in a decade. That’s just the tip of the iceberg for this smoke and mirrors economy. Stocks Nothing major to add at this juncture except that the horrible jobs report was probably priced into the major Indexes last Thursday. Regardless….there remains no reason to jump back into stocks. Things are just starting to slow down in the economy…plenty more to go. Fixed Income No major updates here either. Mortgage deals need to be done over the next month or so, therefore Yields may not move dramatically over that period. Currencies Tight range with the EURO, Yen and Greenback. It’s the hot potato scenario, which means, which currency backed by massive debt do you want to hold. Gold and Silver If Gold can manage to rally another 5% from here the market may have broken into a new higher paradigm but too early to make that call at current levels. Cash still remains incredibly tight.
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3/06/09 Yesterday’s Market Update Well Wednesday’s rally was short lived as the markets quickly maintained a state of reality and simply dumped overvalued Stocks. Treasury prices rallied hard and the Greenback was quiet. Economic Reports It’s the jobs report today….you may want to turn your radios and TVs off for a few hours…it’s going to get ugly. Stocks The China affect was short lived as investors focused on reality in the US which depicts just a pathetic situation for valuations for companies across industry sectors. The selling may have gotten a bit aggressive in expectation of horrible numbers today, but the bottom line is Stocks are not the place to be….Hey, who’s been saying that for the past few YEARS !! Fixed Income Reality is that yields need to stay lower for a while to facilitate the government mortgage bailout, but after a few months….ALL BETS ARE OFF FOR LOWER RATES ON US TREASURY PAPER. Currencies Same old story. Gold and Silver These markets should simply be about 50% higher….the Doc is hearing about possible manipulations again. More on this later.
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3/05/09 Yesterday’s Market Update It was the anticipated China stimulus plan that managed to finally put a stop to the downside bleeding for US Stocks. Treasury prices sank a bit and the Greenback gave back ground via the EURO. Economic Reports More jobs data coming out today and tomorrow. I don’t think you want me to remind you or update you on this. Stocks Well, it was China throwing money at their problems that managed to get global investors a bit positive. US Stocks are still far from out of the woods, but keep an eye on the US$, where a marked depreciation could spark a rally in Stocks. Fixed Income No reason to comment. Currencies Just as the Greenback looked as if it would make a new high via the EURO, it pulled a reversal and gave back a good chunk of ground. Still overvalued.
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3/04/09 Yesterday’s Market Update Just another depressing day in Stock land but at least the losses were minimal. Treasury prices did little to mention but the Greenback was on fire via the EURO and metals sank a bit further. Economic Reports There was some housing data recently…I don’t think you want me to let you know the results. Oh, by the way….AIG is trading below ½, (what kind of pathetic management managed to let that transpire…where is the accountability!!). Stocks Do I really need to talk about this today? No, but take particular note to my AIG comment above, because in another 2 to 3 months, many good old regular US citizens are going to get really pissed off about a major lack of accountability out there. Some good old accountability to those that helped develop this debacle would probably go a long way to restoring some confidence in the system. Fixed Income No reason to comment. Currencies Well…the Greenback continues to defy the Doc’s analysis but still isn’t making any dramatic new ground via the EURO either. Beginning to become perplexing, but still side on an overvalued US$.
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3/03/09 Yesterday’s Market Update Let the incredible well founded Stock meltdown continue, where Treasury prices gained a bit of ground off the collapsing state of Stock prices. Finally the Greenback strengthened for no fundamentally sound reason and Gold sold off. Economic Reports Still too pathetic to report on. Stocks We will reiterate our severe warning as to downside potential for US Stocks in general as policies that have nationalized CitiGroup will continue to send shockwaves through shareholder value in general. What about AIG? Then think about all the non-financial stocks that will begin to deteriorate as unemployed consumers shut down consumption. Want to fix the situation. BRING U.S. JOBS HOME
!! That means you IBM. No reason to comment. Currencies This could be the last hurrah of the Greenback. Some are calling for a continued rally for the US$ while the Doc calls it the last gasp up. Gold The shakeout we alluded to last week could actually continue a bit longer as some Central bank dumping and the idea that too many loud mouths are getting on board has the Doc leery over the near term. Neutral on the shiny stuff for now.
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| Stephan Kudyba (MBA, PhD) THE MARKET DOCTOR |
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Market Doctor Disclaimer All information contained herein is for informational purposes only and does not constitute an offer to sell nor the solicitation of an offer to buy any security. “The Market Doctor” or anyone affiliated with the production of the investment market information is not responsible for any activities conducted by viewers. This material is informational only and does not recommend investment activities for corresponding viewers. |
