Posted on 11/25/2007 8:46:03 PM PST by Professional
China up over 4%, Japan up 2.4%.
Pretty sure this was unexpected, looks like retail sales during the w/e were much higher than expected, up about 8%, with online purchases up 22%.
Back to the Bull!
Rumors of our demise have been greatly exaggerated.
praise the ford!
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:)
Dang, this is hughes and series, what a wonderful thanksging present!
What a relief eh?
This should serve as a catalyst for a nice big fat rally til Spring.
Sorry to rain on your parade a little bit but there are other things going on here as well:
“China May Invest Forex Reserves In Japan Stocks - Nikkei [USD]
11/25/2007 10:28:21 PM China Investment Corp is expected to invest a portion of its $1.4 trillion in foreign exchange reserves in Japanese stocks, according to published reports Monday in the Nikkei Newspaper.
On the heels of Chinese Forex comments earlier this month that sent the U.S. dollar plummeting, Monday’s news report sent the greenback down even more. The dollar fell by more than 30 sen against the Japanese yen within minutes of the report being made public.
CIC controls about $200 billion in assets, and company officials told The Nikkei that it would begin investing in Japanese shares “soon” without giving a firm time frame.”
http://www.rttnews.com/apps/deskalert/article.asp?date=11/25/2007&item=99
And pass the butter!
All this consumer optimism, maybe it’s contagious. I was going to be a real Scrooge, but now, maybe if everyone else is splurging...
people are going to shop no matter what, and what I noticed on my brief foray into Fridays’ onslaught was that people were HAPPY to be shopping....
You honestly think a one day short covering rally means the bull is back? This is exactly what a bear market rally looks like. Couldn’t be any clearer.
Revel, the US appears to have an 8% sales gain year over year, on a shopping year that has like 5 extra days to it. Considering the potential for a consumer worried about mortgages, etc, you’d have to admit this was an unexpected, by a long shot, number to the upside?
Wot, no breadlines?
Your right, a sure fire sign of losing money, is when the markets go up. Steve, you lost me there.
i was just celebrating rush limbaugh’s observation last week that
a world record for travel during thanksgiving was predicted, and
that this means things are NOT as bad as the liberal
media predicted
with a liberal friend, but she was not impressed.
she likes her tv set and doom and gloom!
Apparently we are not dead yet, the consumer manages again, to surprise everyone, myself include.
I guess you aren’t real familiar with the concept of bear market rallies. They take off like a Saturn V rocket. Build up confidence in the gullible retail speculator. Then the pros take profits. Come down just as fast.
I am gonna buy another 100 shares of my favorite x86 maker.
Ignore the Dow Theory bear market confirmation last week at your own peril.
I’ll shut up. Go ahead and lose your money.
Avoid walking by the DNC headquarters. You might be hit by a falling presidential candidate.
I am a pro investor, work at a professional firm, and even wear a professional suit and tie? If anything, it has been the speculator, that has taken to shorting the mkt?
Look, i'm not going to argue short term up, down moves with anyone, God only knows. But, being a person with a very vested stake in the market going up, very happy to see that a very serious sales gain has been made in retail, as it seems to reflect a consumer that is not down and out. This is big, big news, and should mean good things for the long side of the market, not just today, but serve as a catalyst to rally back, test the previous highs.
Will that happen, hope so, we will not know for a while. And that is what makes it so much "fun"!
I certainly would not want a "bet" out there, being short right now!
Not sure about you guys, but I was hoping for “bad news, but not as bad as expected...” This retail number is way up. Considering how negative sentiment numbers had become, we could be seeing a huge rally.
>>>Rumors of our demise have been greatly exaggerated.
Thanks for the upbeat article, but this concurrent post on FR (below) cites an article in CNN showing different, disappointing retail results for the weekend:
“Holiday Sales Fail to Get Shoppers to Splurge”
http://www.freerepublic.com/focus/f-news/1930443/posts
I don’t think anyone will know until near or after Christmas because of the effects of discounting, traffic and profitability.
I don’t believe those numbers. So many numbers are cooked now. Government numbers can’t be taken at face value at all, They are manipulated and cooked, and that is provable.(Such as the Job numbers, and inflation numbers). We could get a rally, and it could even last through Christmas. Hard to say. But The fact is that there are too many things wrong for it to last. The price of Energy is a real killer. Mortgage credit is drying up and then we have the ARMS resets and foreclosures coming. People are paying there mortgages with there credit cards. That kind of Credit is going to dry up as well. The only way out is to take a recession or to print money until the dollar is worth next to nothing. Two choices. Take your pick. When you run an economy on credit and debt then the day will come sooner or latter when the piper must be paid.
CNN got it wrong, wanted to parse words. You just need to look at what is going on in Asia right now. Money talks..
The big fear out there, was recession, and a consumer that could no longer carry the water of the economy. This retail report, granted only over a few days, and possibly inaccurate/incomplete, suggests that this BIG fear, is overblown, and maybe dead wrong?
Optimism is contagious too. If you see that others are spending, stock market is going up, this might help sales for the entire month of December. Anyway, color me surprised, thought retail numbers would be pretty weak. Of course, that is what everyone thought.
Around me there are people wondering how they are going to pay there heating bill this winter and not freeze to death. Along with how are they going fill there gas tank so that they can get to work. And buy that 5 dollar a gallon milk. There is a point where people get tapped out.
Less than 5% of our population is unemployed, and salaries/wages are at record highs.
Wait - I can pay my mortgage with my credit card? I’ll look into it - I can really use the miles.
Revel, sorry to hear that folks around you are struggling.
LOL!
My house has sucked as an investment really, but man I’ve seen the WORLD with it!
I’ve read books, studied charts etc til I’m blue in the face, and have never found any TA or other “method” to accurately tell me how to get in, and out of the market. Me thinks it’s a bit of voodoo...
I’m basically as bearish as you seem to be, but I will remind you of several factors. One, historically, this is a blazing, screaming bullish time of year. Two, the stock market has nothing whatsoever to do with “common folks” and their issues, being financial, not economic. Three, the market is already anticipating further rate cuts by BenZimbabwe; whether or not the prior two have done anything or not. Four, Wall St bonuses are seriously at stake. Five, earnings estimates have been brought down to such a low level that they should generally be easy to meet or beat.
I am not going to argue with you that any of the prior items are logical or make any kind of sense. But they are, IMO, very likely to be controlling for the very short term, like December.
Here you Go:
http://www.google.com/search?hl=en&q=consumers+paying+mortgage+by+credit+card&btnG=Search
Also:
The $915B bomb in consumers’ wallets
Americans have record credit-card debt and banks are starting to sweat an uptick in default rates, reports Fortune’s Peter Gumbel. Why some fear this could be the next subprime.
http://money.cnn.com/2007/10/29/magazines/fortune/consumer_debt.fortune/
And there was an article a little while back where I think it was Capital one admitted that there is a great increase in this happening.
Yes- I agree that we could get a rally through Christmas.
Thanks. What in 2000 it was like maybe $600 a year to heat and now it will be over $2000 That is quite a jump for seven years right there. Incomes don’t go up so quickly.
Depends on what you do, where you live. If you are blue collar, and work in the industrial heartland, things might not be so good, but in software/hardware, you have the best business climate in history, according to many of their recent earnings releases. Gee whiz, look at Steel right now though, stocks of those are FLYING, profit margins have gone through the roof. Bush got no credit for the regs he put into play there, and I don’t know all the details, but after he did, the industry is one of the best performing in all the financial markets over the last 3-4 years. I had positions in X and AKS, could not beleive what they did to the upside. In fact, the earnings grew so quick, they were bot trading only at 1 or 2 times forward 12 months earnings.
Expectation were low, the consensus was that this xmas was going to be along the lines of 2002. The weak dollar doesn’t hurt either.
We are being invaded right now, both borders, by mindless shopping zombies from Canada and Mexico. It is taking HOURS to get into the US, to spend their hard earned money, in our malls, not their own. I’m in Washington State, Vancouver BC Canada malls, and their store owners, must be suicidal about now.
Is there any way to determine the breakdown of outstanding consumer debt (i.e. credit cards) where a percentage is for the purchase amount, another percentage is for the interest on top of that and thirdly, what percentage is made up of all the other charges that is charged/carried and then interest is applied to that?
Well something else to consider also in retail. The expenses of running a business have increased a lot. There are energy costs, payroll, insurance, and others that have gone up. I guess they can raise prices to some extent, but if they do that too much then people won’t buy. So sales have to increase by more than a little in order for the merchants to actually make more than the year before. And the bottom line is all about profit.
I don’t know how to do it...Sorry.
Heartiest congrats on AKS, I was watching that around 12 really trying for a good entry, looked away for a few days and it was 17, a few days later had more than doubled, looked away again and it was over 50. Also SCHN, circa 35, though that was a while ago and it just got creamed, still a tad over 60. Same with X. There’s huge buyout interest on all these with the BHP and Rio Tinto thing going on. I don’t know what to do with these now, they seem to have run away. Oh yeah, and PCU at 62, FCX at 48. I’m big on the metals in case it’s not clear. I captured very few of these. FCX was 9 frickin dollars in 2001.
Loonie’s flight good for Canadian shoppers
The Canadian dollar is called the Loonie and its rise is setting off a migration of shoppers, causing a headache for policy makers. Pam Graham of NZPA reports.
When the New Zealand dollar rises exporters scream but when the Loonie, the Canadian dollar, takes flight Canadian retailers also hurt.
In September the Loonie, named after the Loon bird depicted on the one dollar coin, reached parity with the US dollar for the first time since 1976 and it has been high since because of the low US dollar and high oil prices.
As in New Zealand a soaring currency is a problem for exporters because it cuts their returns in local currency terms. But in Canada the rising currency also sets off a migration of shoppers because it is so easy for Canadians to shop across the border in the US on day trips. Three quarters of Canadians live within 150km of the US border.
The rush of Canadian bargain hunters to the US is reaching epic proportions. And they are not alone. Shoppers from Europe are also flocking to the US to take advantage of the low US dollar.
The influx of shoppers swelled on Black Friday, the day after the US Thanks Giving holiday last week when US stores ran “doorcrasher sales” in the same way that stores in New Zealand run Boxing Day sales after Christmas.
Many stores opened as early as 4am. Black Friday is traditionally the day that US retailer’s profits move into the black.
Even before this peak the Canadian media was reporting on the traffic problems at border crossings caused by day-tripping shoppers and a rise in internet shopping by Canadians on US sites.
Canadian commentators are imploring Canadians to “shop local” to support their own retailers and book stores are running full page advertisements attacking the perception that books are a lot cheaper in the US.
In October, Canada Post saw a 15 percent increase in the volume of mail or parcels coming into Canada from the US in the previous year.
Same-day car trips by Canadians to the United States in the month of September rose to their highest level in six years, surpassing two million, or about 70,000 per day, according to Statistics Canada.
Canada is more exposed than most other countries to the impact of a weak US dollar, according to economists.
Bank of Canada senior deputy governor Paul Jenkins said this month that the magnitude of the rise in the Canadian dollar was stronger than historical experience and that the weakening prospects for the US economy were also affecting Canada.
In the US, the strong dollar was for so long a sign of US economic dominance. Its weakness is eroding belief in that dominance.
The US media has given a lot of coverage to the decision by supermodel Gisele Bundchen to ask to be paid in the currency of a modelling job’s location rather than in US dollars and the flashing of euros rather than dollars by rap star Jay-Z in a video has also raised eyebrows.
For 31 years Canadians had to deal with the reality that the Loonie was weaker than the dollar. Now they are ribbing Americans about the weakness of their currency.
“When the home currency is weak, people just have this sense of inferiority in the world,” Kathleen Vohs, a University of Minnesota professor who has researched the psychology of money, said, the Associated Press reported.
BNZ chief economist Tony Alexander said currency trends always get extrapolated out by commentators and it was far too early to declare the US dollar dead.
He said markets would move back to equilibrium and the US dollar was likely to remain the main currency commodities are priced in.
Still, the contrast between Canada and the US is also being seen in the property market.
In the US the talk is of foreclosures, falling house prices and the issue of whether the crisis in the sub-prime lending market will spread to the prime lending market.
In Vancouver the media reported on a continuation of “condo mania.” A new tower block with 901 apartments build by a Chinese investor sold out in 30 hours this month. About 545 units sold on the Saturday but the mania was reported to be dying down because no one slept on the street overnight to be in a position to buy when sales opened. (Pam Graham visited Canada as a guest of Air New Zealand.)
My buy position in AKS and X, was complete around 02-03. So, i bought it for 12-6, and rode it all the way down to like 1 buck per share, then in 18 months it was at nearly 20. The share price was only being grown faster by the profits of the company. The entire steel industry was like this. X was from 10-20, down big, then holy smokes...
I’m just a contra guy, buy big things when I think they are at 30 cents on the dollar. Then I just sit on the stuff for years, until it gets the other way, grossly overvalued. For what it’s worth, I got out recently on that stuff. Was a fun party while it lasted, but that can’t go on forever. I am happy especially though, if the US steel industry can financial fix itself, in this great bull run, so they can weather the storm better next time.
Check out post 45. It is about the US retail, from Canadian dollars, got it from a yahoo site in New Zealand.
Wellll... I guess it’s all about how you define ‘accurate’, how well you do your trade management, and having a clear risk-management strategy.
If you can get a model to work 55% of the time, that’s a sizeable winner. All you have to do is leverage it 10-1. Or, you can be wrong 75% of the time taking small losses, but getting 5-1 on the 25% of the time. That you can’t really leverage all that far, but - hey, it’s still a winning strategy.
Personally I’m far more interested in the daily/weekly swing trade than the macro/quarterly positioning.
It is the end of the year. About that time to reflect on reallocations. I think I'll wait a week. A well respected investment type recently told me to expect a rally through Spring.
yitbos
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