A helluva week in the market — The Dow is over 9,000, and the earnings are just fantastic (well, maybe they are better than lowered expectations) and things are looking, well if not up, then at least not down into the abyss.
REITs were the big winner, up 8.3% for the week (still off some 40% from their recent highs); The Russell 2000 gained 5.6%, which puts them a mere 23% from their 52 week highs. The S&P and Dow added just over 4%, which places them within just over 20% of their 52 week highs. The Nasdaq, which tacked no 4.2% is a mere 15% from 52 week tops. Of course, all of these indices are far far below their all time highs.
Taking a closer look at the rally off of the March lows, Barron’s Trader column notes:
HERE’S A SNAPSHOT OF JULY’S ROMP, courtesy of Bespoke Investment Group: From their July 10 low, the 50 smallest stocks in the S&P 500 had rebounded 17.2% through Thursday, outgunning the 50 biggest stocks’ 9.7% gain. The 50 most heavily shorted stocks have jumped 17.6%, versus just 8.8% for the 50 least-shorted names. Companies raking in foreign revenues outran domestic earners, a sign that traders are still uneasy about the dollar.
Besides short-covering, there are also ample signs of bargain-hunting and risk-guzzling. The 50 stocks with the lowest price/earnings ratios jumped 18.4%, the best performance of any decile. The 50 stocks with the worst analyst ratings are up 12.7%, versus 8.9% for the most beloved companies. And the 50 stocks that fell the furthest during the June correction have bounced back most resoundingly, their 17.4% rise trumping the 7.4% for the correction’s top performers.
Fascinating details.
Where to begin this week? The Dollar? Retail Sales? Yields? Housing? The 10 consecutive up day for the Nasdaq? No matter — we got it all covered
Enough Ben Steinery! On with the linkfest:
INVESTING & TRADING
• Dow Above 9,000 for the First Time Since January (NYT)
• Up 40%, but Still Feeling Down (NYT) The truth is that for most investors, it’s more important to avoid big losses than to rack up big gains. That may seem a milquetoast approach, but in the miserable market of 2008 and early 2009, minimizing losses was the best that most people could do. And because of the ugly math of investing, it has been extraordinarily difficult to recover from big declines.
• S&P 500 Short Interest Drops, Led by Banks, as AIG Bets Shrink (Bloomberg)
• The long-awaited Dow Theory bull market signal finally arrived (Investment PostCards)
• FIFTY WAYS TO KILL RECOVERY Nearly every state government is required to balance its budget. When times are bad, jobs vanish, sales plummet, investment declines, and tax revenues fall precipitously—states have to raise taxes or cut spending, or both, and that’s precisely what they’re doing: amplifying the effects of the downturn, instead of mitigating them. (New Yorker)
• Is the party over for Microsoft? JOHN DVORAK’S says Software giant’s too distracted by shiny objects (Marketwatch)
• Goldman and Morgan are a study in contrast To oversimplify, Goldman and Morgan are now a contrast of offense versus defense. Goldman (Barron’s)
• Great barrier grief Countries that clung fast to the gold standard in the early 1930s resorted most to protectionism (The Economist)
• Schumer Presses SEC for Ban on ‘Unfair’ High-Frequency Trades (Bloomberg)
• Visualizing One Trillion Dollars (Video)
• 1990s Tech Guru Michael Murphy is back, covering gold, currencies, and macro economic issues — at Seeking Alpha.
• The New Model for Financial Research? (Advisors for Advisors)
• Accountants Gain Courage to Stand Up to Bankers (Bloomberg)
• Warren Buffett to Teach Kids About Finance in Cartoon (Bloomberg) Video here
ECONOMYMarkets keep climbing a wall of worry:
• A long way to go: The global recession is coming to an end, but the ingredients of a lasting recovery are still missing (The Economist)
• Lasting recession works way into pop culture (MSNBC)
• Do We Need More Stimulus? (Delong)
• Job Cuts Outpace Economic Decline (If no WSJ, go here)
• When Debtors Decide to Default (NYT)
• Sales Fail to Keep Pace With Profits as Economy Stays Sluggish (Bloomberg)
• Dropping the shopping: Can America wean itself off consumption? The first of a series on how the world’s four biggest economies must change to ensure sustainable global growth (The Economist)
• Henry Kaufman, writing in Barron’s, discusses A Long Road to Recovery (Barron’s)
• Association of American Railroads has begun publishing “Rail Time Indicators,” their monthly look at Rail Transport related data.
HOUSING• The U.S. currently has enough vacant housing to put the entire population of the U.K., with room left over for Israel. (Infectious Greed)
• New Appraisal Code Raises a Row (WSJ)
• Seasonality factors in Existing Home Sales (Hanson)
• Lennar Signals Fleeting Builder Rally as Buyers Flee (Bloomberg)
• Foreclosure-relief program launched for Countrywide Financial customers (Denver Biz Journal)
FEDERAL RESERVE• Chairman Ben Bernanke confronts challenges to Federal Reserve’s record (LA Times)
• Light at the end of the Tunnel?
• The NYT Week in Review has dueling views on whether Ben Bernanke should be reappointed.
Nouriel Roubini votes yes: “Ben Bernanke … deserves to be reappointed. Both the conventional and unconventional decisions made by this scholar of the Great Depression prevented the Great Recession of 2008-2009 from turning into the Great Depression 2.0.
Anna Schwartz votes nay: As Federal Reserve chairman, Ben Bernanke has committed serious sins of commission and omission — and for those many sins, he does not deserve reappointment.
• Taylor Says Fed Gets Rule Right, Goldman Doesn’t (Bloomberg)
WAR/MEDIA/POLITICS/ENERGY• An Open Letter To The Financial Media (Zero Hedge)
• Build the Wall: Why Media Should Charge for Online Content (CJR)
• Obama leaves foxes in the Commodity Futures henhouse (True Slant)
• Inside Bush and Cheney’s Final Days (Time)
• Health Care: A Case of Getting What You Pay For (Washington Post)
TECHNOLOGY & SCIENCE• A Special Twitter Guide for Businesses
• Hubble image shows debris from Jupiter collision (USA Today)
• 100 Things Your Kids May Never Know About (Geekdad)
• Music Streams That Soothe an Industry: Many music industry observers now believe that there is a fundamental shift under way: from illegal downloads to licensed streaming services like MySpace Music, imeem and Spotify, where users can play any song, anytime and — coming soon — on any device (NYT) See also Pandora’s Back (The Big Money)
• Clouds in climate ‘vicious cycle’ (BBC)
• PowerPoint considered militarily harmful Writing in the Armed Forces Journal, retired Marine T.X. Hammes excoriates PowerPoint and its impact on decision-making in the military (boingboing)
• Amazon Apologizes For Kindle Flap (Info Week)
• Scientists Worry Machines May Outsmart Man (NYT)
• Get Me Rewrite: Microsoft Alters Laptop Hunter Ads (PC World)
MUSIC BOOKS MOVIES TV FUN!
• Monday’s WSJ reviews some good beach reads
• The I-Hate-My-Cellphone Film Festival (Video)
• CNBC’s New Home Page (Amusing!)
• What’s this? They’re making a new Tron movie!
• What you need to know about Cash for Clunkers
• Window on the body: CT scans become art (New Scientist)
That’s all from a sticky hazy hot humid weekend in the NorthEast, where Summer has finally arrived . . .
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