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The Global Bounce
Tweet Share on Facebook October 31, 2008 Comment (1)Take a look at how global markets are faring over the last few days, according to Investment Postcards:
The bounce may not last, but it's great to see a few good sessions as we close out October. A few green days could easily reverse, but the concerted gain across the globe is a sign that markets are at least starting to take notice of global rescue measures initiated recently to prop up the banking system.
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Explaining a Volatile Week in Stocks
Tweet Share on Facebook October 30, 2008 Comment (2)So far, it looks like we're holding above 9,000 on the Dow today, although I'll be the first to admit it doesn't mean much before the closing bell given the huge swings we've been seeing this week, especially late in the day.
Witness Wednesday: Even after the Fed cut rates by a half-point, stocks sank in the final few minutes of trade after an erroneous report that General Electric would miss earnings.
A quick explanation from Barron's:
Wednesday's trading session featured a wild and wooly finish, as the Dow Jones Industrial Average plunged from a nearly 300-point advance in the final minutes of the trading session to a loss of 74 points—apparently fueled by a misspoken news item from Dow Jones Newswires in the final minutes of the session suggesting a new—and downbeat—earnings forecast from General Electric (GE). The report, leveraged off some comments GE chief executive Jeffrey Immelt made at a business conference in Spain, was repudiated by the company, and the newswire eventually reprinted a clarification. (The Dow Jones Newswire, like Barron's, is a product of News Corp.)
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Carlos Slim: Still Not Buying
Tweet Share on Facebook October 30, 2008 Comment (2)Mexican billionaire Carlos Slim, the world's second-richest man, who made a fortune buying during bad times, is hedging his bets when it comes to moving back into stocks.
He told CNBC in this video that the coming months will still be challenging and called the current economic problems "the worst I have seen in my life."
Slim is also coy about when he might move back in, saying his funds that cut back on stocks when prices are high still hold low percentages of equities. As for the success of the global financial bailout, he says government efforts are still moving too slowly.
Contrast Slim with Warren Buffett, who is very publicly snapping up U.S. stocks. The Motley Fool recently took a quick look at billionaire investing styles. Link is here.
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What Matters to Stocks (Hint: It's Not the Fed)
Tweet Share on Facebook October 29, 2008 Comment (1)Yesterday's big rally in stocks left everyone scrambling for a reason behind the record gain, and lots of journalists and analysts wound up giving the credit to the prospect of a half-point rate cut by the Federal Reserve.
Well, today we got it, and stocks sold off. So what happened? The truth is the Fed's decision to cut rates for the second time in a month was already old news to traders. The effective federal funds rate has already fallen below 1 percent several times in recent weeks, so lowering the official target was really just confirming what the market already knows.
So what really matters for stocks today and in the coming weeks?
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Meet Your 2020 Treasury Secretary
Tweet Share on Facebook October 29, 2008 CommentHenry Paulson and Neel Kashkari make up the latest crop of Government Sach's alum to run Washington, so if you're looking for a quick reference guide to better know your future financial overlord, Clusterstock lists Goldman Sachs's newest partners:
GOLDMAN PARTNERSHIP MEMO
October 29, 2008 Goldman Sachs Announces the Partner Class of 2008
We are pleased to announce that the following individuals have been invited to become partners as of November 29, 2008, the start of our next fiscal year. These appointments recognize the contributions and potential of some of the firm's most valued senior professionals.
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Bjork Worries for Iceland
Tweet Share on Facebook October 28, 2008 Comment (1)Financial crisis soul-searching is coming from some unexpected corners lately:
Bjork, Iceland's rockingest pixie, blames big companies for bringing financial and environmental ruin to her beloved home, and she's making a tough argument for diversifying at a time when Iceland's economy is in tatters (it hiked interest rates to 18 percent today, as its currency plunges).
Writing in the Times of London, the artist, activist, and Matthew Barney consort calls on her homeland to turn away from overtures to build out its aluminum industry in favor of home-grown businesses. Her arguments sound sensible:
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Dow Jumps 889 Points on Bad News
Tweet Share on Facebook October 28, 2008 CommentHey, a good day!
It's not clear what caused the absolutely giant rally today, and I'll knock on wood rather than second-guess the tape for what tomorrow might bring. Whatever the reason, the Dow is up 889 points—almost 11 percent—for its second-best day ever, and the Nasdaq jumps almost 9 percent.
Beaten-up names like Home Depot (it rose 14 percent) and Boeing (up more than 15 percent), which made progress in its ongoing machinists strike, had great days.
At the same time, all the economic news was pretty dismal:
Consumer confidence hit its all-time low.
Home prices dropped for a 25th straight month.
Markets might be up today ahead of tomorrow's expected rate cut from the Federal Reserve, but whether expectations of a 50-basis-point cut are already priced in remain to be seen. Expect tomorrow afternoon to be another tense few hours.
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Did I Hear This Right?
Tweet Share on Facebook October 24, 2008 Comment (5)On CNBC a few minutes ago, Morgan Stanley strategist David Darst said we could get the Dow to jump 2,000 points if the government would just issue a bond for massive infrastructure projects at 5 to 6 percent yield. And Rich Bernstein of Merrill Lynch agreed with him!
So that's where we are now: Two of Wall Street's most respected strategists just said the way to get markets working again is massive public-works projects. Pretty depressing stuff...
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Foreign Stocks Fall Harder
Tweet Share on Facebook October 24, 2008 Comment (2)Floyd Norris is blogging on today's global market meltdown and adds this little tidbit to the mix: Global markets are worse off than America.
October Blues: Here are some October performances, through a few minutes ago. In each case, I took a major index from the country in question. All figures are in U.S. dollars.
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FIX IT!
Tweet Share on Facebook October 24, 2008 Comment
