July 31, 2008

Global Market Comments for July 31, 2008 1) Q2 GDP came in at 1.9%, miles away from a recessionary reading. Domestic weakness is being more than offset by international, energy and commodity profits. If you don't have income from any of these areas then you are toast. Weekly jobless claims soared again by 48,000 to 448,000, the highest since April, 2003. If this is not … [Read more...]

July 30, 2008

Global Market Comments for July 30, 2008 1) Panic buying of crude is back. Weekly gasoline inventories showed a shocking decline of 3.5 million barrels, so crude soared $7 to $127. The $120 level was a perfect bear trap. Goldman Sachs put out a report that current demand destruction is temporary and that crude will hit $149 by year end. I don't buy it. 2) The credit … [Read more...]

July 29, 2008

Global Market Comments for July 29, 2008 1) As crude dies, stocks fly. Oil down to $120.50, a new two month low. Alert! Alert! Regular gas at a bargain $3.99/gallon seen in the East bay! For $1 I'll tell you where. 2) Merrill Lynch (MER) is raising a staggering $8.5 billion in new equity. The more they say they don't need capital the more they raise. Existing … [Read more...]

July 28, 2008

Global Market Comments for July 28, 2008 1) Panic selling of stocks into the close as last week's short covering rally exhausts itself. Crude's back up to $125 didn't help. Dow down 240. 2) Fortune Brands (FO) reported Q2 net earnings down 41%. This hybrid company saw their alcoholic beverage sales hold up OK (Jim Beam, Ronrico Rum, Canadian Club), but were … [Read more...]

July 25, 2008

Global Market Comments for July 25, 2008 1) A new low for the move on crude, down to $122. All of the economic releases today came in better than expected. Stocks shrugged, bonds hated it. 2) June durable goods came in at +0.8%. The market had been expecting Armageddon. This is a great example of how noisy these monthly data releases can be. So is everyone running out … [Read more...]

July 24, 2008

Global Market Comments for July 24, 2008 1) A $3 pop in crude sent stocks down 200 points and bonds up a point. We are not out of the woods yet. 2) Want to get rid of that barbed wire around your bicep, or your ex wife's nickname? The tattoo removal business is booming, where laser treatments can run into the thousands of dollars. More than 50 million Americans have … [Read more...]

July 23, 2008

Global Market Comments for July 23, 2008 1) Gasoline inventories fell a surprisingly large 2.8 million barrels as cancelled summer vacations leave the system awash in excess product. Crude fell $4 to $124. Prices at the pump could fall 20 to 30 cents/gallon in the next week. If you believe crude has finally peaked, buy the refiners which have been hammered this year because … [Read more...]

July 22, 2008

Global Market Comments for July 22, 2008 1) Hurricane Dolly missed, so crude fell $4 to $126, while gas deflated $1 to $9.80. Bonds collapsed and stocks avoided a collapse. 2) American Express (AMP) reported Q2 profits down 38% as the consumer spending slowdown hits, taking the stock down 15% to $36. High end customers are reducing spending while formerly middle income … [Read more...]

July 21, 2008

Global Market Comments for July 21, 2008 1) Crude is dead. Traders are now gunning for $120. The general consensus for commodities is that we go down for the forseeable future, and then go back up again. 2) Internet users in China are expected to increase from 250 million to 900 million over the next 5-10 years. The majority will access the net via cell phones, where … [Read more...]

July 18, 2008

Global Market Comments for July 18, 2008 1) Crude was stable today. A big part of the selling this week has come from bank sales of crude holdings to shore up balance sheets. There was a major effort to make sure that the crude August $130 calls, where enormous positions had been built up, expired worthless yesterday, which they did. China's Olympic shut down is … [Read more...]

July 17, 2008

Global Market Comments for July 17, 2008 1) Crude broke down to $129, down $6  on the day and down $19 from a high a week ago. Stocks loved it, flying another 200 points. 2) Traders are still reeling from the explosiveness of yesterday's move in financials. Lehman (LEH) was up 37%, Bank of America (BAC) 24%, WAMU (WM) was up a mind boggling 54%. Short sellers … [Read more...]

July 16, 2008

Global Market Comments for July 16, 2008 1) Weekly Crude inventories jumped 3 million barrels on the back of rapid demand destruction, sending crude down $7 to $132. We have dropped $16 since last week's high. If we can break $129 look for another rapid $10 drop to $119. This bubble may have burst. The airline index had its largest up day ever. United Airlines (UAUA) … [Read more...]

July 15, 2008

Global Market Comments for July 15, 2008 1) Crude fell a breathtaking $10 to $136 on the Bush announcement lifting the ban on offshore drilling. Options expirations this week helped. 2) Apple sold one million new 3G IPhones in the first three days, more than double the most optimistic forecast. 3) Christopher Cox, chairman of the SEC, announced restrictions on the … [Read more...]

July 14, 2008

Global Market Comments for July 14, 2008 1) The government announced an impressive support package for Fannie and Freddie which includes direct access to the Fed window and Fed buying of their paper. The bad news is that they needed a bail out package. Fannie is launching a $3 billion private debt issue this week. The Treasury ordered the main brokers to buy the whole … [Read more...]

July 11, 2008

Global Market Comments for July 11, 2008 1) Crude lept to a new high, $147.50, even though one of the Iranian missiles fired yesterday was found to be a Photoshop creation. It then closed at $144.30. 2) Bernanke saved the day today, announcing that Fannie Mae (FNM) and Freddie Mac (FRE) would have access to the emergency discount window. The two were down 40% at their … [Read more...]

July 10, 2008

Global Market Comments for July 10, 2008 1) Walmart reported better than expected earnings as the rebate checks worked their way through the system, taking the stock market up 150. Also helping was Dow Chemical's (DOW) takeover of Rohm & Haas (ROH) for $15 billion, a massive 73% premium. 2) Lehman Brothers (LEH) continued its free fall today, down another 17% to … [Read more...]

July 9, 2008

Global Market Comments for July 9, 2008 1) Iran fired nine medium and long range missiles and crude did nothing. That says a lot. Last week this would have taken crude to $150. What a difference a week makes! Oil is now enjoying what economist call 'perverse elasticity'. The higher the price goes, the more people want to buy it, until demand collapses … [Read more...]

July 8, 2008

Global Market Comments for July 8, 2008 1) Crude fell another $6 to $135, taking it down $10 in two days. The sell off spread across the entire commodities sector, taking corn -8%, soybeans -8%, wheat -7%, and copper -4%. All frothy, market top type price action. Producing stocks, like Mosaic and US Steel, fell more. The long awaited commodities correction may finally be … [Read more...]

July 7, 2008

Global Market Comments for July 7, 2008 1) Crude fell $5.50 to $139.50 and the stock market fell. A great example of  heightened fears amplified by summer illiquidity where things don't make sense. Oil is now the holy grail of trading. The trader who calls the top on this one will make his year, decade, and century. 2) Janet Yellen of the San Francisco Fed said … [Read more...]