Investment & Finance Thread (week July 13 - July 19 edition)

Weekly investment & finance thread ^ | July 13, 2014 | Freeper Investors

[expat_panama]

 

Condensed version:  this past week's metals 'n stock indexes saw a (imho) a flat decision making base --not sure how metals volume went but stocks had high volume for the dips & low for the rebounds --bearish, a situation IBD calls 'uptrend under pressure'.   fwiw, their distribution day count is running at 6 for the S&P and 4 for the NASDAQ.

Fortunately I can now say what the upcoming week's going to be; it'll be "interesting". 

 

This is the thread where folks swap ideas on savings and investment --here's a list of popular investing links that freepers have posted here and tomorrow morning we'll go on with our--

Open invitation continues always for idea-input for the thread, this being a joint effort works well.   Keywords: financial, WallStreet, stockmarket, economy.

[expat_panama]

So metals continuing gains yesterday are leading into more w/ today's futures traders, and what's interesting this time w/ stock indexes is yesterday's gains were in higher volume --but just the same we still got stock futures fairly negative anyway this morning.  Maybe it's all the reports coming out today--

 

Initial Claims
Continuing Claims
Housing Starts
Building Permits
Philadelphia Fed
Natural Gas Inventories
Mich Sentiment
Leading Indicators

 

--or the news:

• Parallels Between 1987 and Today - Should You Be Spooked? July 14, 2014 Chad Karnes. The latest pullback in the markets may have you a little spooked, especially if you own small cap stocks
• Uber v. Taxi Is Age-Old Battle Over Progress - Michael Rosen, The American
• Why Dems Can't Be Party of Business - Jonathan Chait, New York Magazine
• Do Not Short This Dull Stock Market - Lawrence McMillan, MarketWatch
• Here's Why Stocks Could Keep On Hitting New Highs - Patti Domm, CNBC
• What If Yellen's Wrong About the Economy? - Judy Shelton, New York Sun
• Gold Dreamers Are Living In Land of Fairy Tales - Noah Smith, Bloomberg

[Innovative]

Microsoft may announce its biggest layoffs ever on Thursday

http://www.computerworld.com/s/article/9249790/Microsoft_may_announce_its_biggest_layoffs_ever_on_Thursday

[expat_panama]

They’re a market leader, the layoffs may be part of the skittishness...

[Wyatt's Torch]

[Wyatt's Torch]

18,000 cuts

[Wyatt's Torch]

Housing starts plunge...

893K vs 1020K consensus est

Prior two months revised down as well.

Single family permits up.

[Wyatt's Torch]

[expat_panama]

sonovagun.

I usually try to be aware of big changes like that but some how that on snuck under the radar...

[Lurkina.n.Learnin]

Ukraine is back.

[Chgogal]

Fed Prez Richard Fisher's comments:
http://bizbeatblog.dallasnews.com/2014/07/dallas-fed-president-richard-fisher-is-increasingly-concerned-about-the-nations-monetary-policy-the-nation-must-dilute-the-punch.html/

[Chgogal]

Fed Prez, Richard Fisher's speech in L.A. July 16, 2014:
http://www.dallasfed.org/news/speeches/fisher/2014/fs140716.cfm

I spoke of this early in January, referencing various indicia of the effects on financial markets of “the intoxicating brew we (at the Fed) have been pouring.” In another speech, in March, I said that “market distortions and acting on bad incentives are becoming more pervasive” and noted that “we must monitor these indicators very carefully so as to ensure that the ghost of ‘irrational exuberance’ does not haunt us again.” Then again in April, in a speech in Hong Kong, I listed the following as possible signs of exuberance getting wilder still:

The price-to-earnings, or P/E, ratio for stocks was among the highest decile of reported values since 1881;

The market capitalization of U.S. stocks as a fraction of our economic output was at its highest since the record set in 2000;

Margin debt was setting historic highs;

Junk-bond yields were nearing record lows, and the spread between them and investment-grade yields, which were also near record low nominal levels, were ultra-narrow;

Covenant-lite lending was enjoying a dramatic renaissance;

The price of collectibles, always a sign of too much money chasing too few good investments, was arching skyward.

I concluded then that “the former funds manager in me sees these as yellow lights. The central banker in me is reminded of the mandate to safeguard financial stability.”

[expat_panama]

From the speech:

• The price-to-earnings, or P/E, ratio for stocks was among the highest decile of reported values since 1881;
• The market capitalization of U.S. stocks as a fraction of our economic output was at its highest since the record set in 2000;

Here are the PE ratios (along w/ dividend yields) for the S&P 500 from Princeton---

---and here's the total U.S. market cap divided by total US corp profits:

IMHO the numbers just don't support Fisher's claims. FWIW, the phrase "irrational exuberance" is how Sir Alan described stocks in the mid-'90's.   When the dot-com bubble finally did come up a half decade later, his big worry by then was (I swear I'm not making this up) Y2K!!

[Lurkina.n.Learnin]

Be nice to Greenspan he was blameless in any of the financial turmoil that ensued. He said so.

[Wyatt's Torch]

I skimmed the speech to see if he was referring to conditions in 2007-2008 because those comments have no bearing on the market today. I love Fisher but I just don’t see it at all.

[Lurkina.n.Learnin]

It wasn’t entirely George Bush’s fault after all. I thinks some liars are doing some creative figuring here.

Report: Labor force drop had pre-recession roots
http://finance.yahoo.com/news/report-labor-force-drop-had-pre-recession-roots-203848691—finance.html

[Lurkina.n.Learnin]

Some more govt looting.

FedEx Accused of Conspiracy to Distribute Prescription Drugs for Online Pharmacies
http://www.freerepublic.com/focus/f-news/3181814/posts

[expat_panama]

Yesterday's trading saw losses in both metals'n'stocks as futures markets see more this morning.  We'll see.  Despite all the hoopla (Stocks Fall Hard On Bad News ... most of the session in the red Thursday, and action became uglier as the day...) volume was mixed and the drop did not penetrate support levels that have been hanging tough for these past few weeks.  The good news its it's Friday; that and the only reports due today are Mich Sentiment and Leading Indicators.  The latest from Morning Blurb Central:

Fed Hawks: Start Draining the Punch Bowl! - Annalyn Kurtz, CNNMoney
Are Markets Poised for Taper Tantrum 2.0? - Saphir & Spicer, Reuters
The Tell of When to Sell - Jim Cramer, TheStreet
A China Crash Would Make 2008 Look Tame - William Pesek, Bloomberg
How Russian Hackers Stole the Nasdaq - Michael Riley, BusinessWeek
RUSSIA IS GETTING SLAMMED Markets are getting slammed in Russia. The... Business Insider
The Next Big Jobs Collapse: Higher Education - Chris Matthews, Fortune
Why Is Microsoft Firing 18K People During a Boom? - Ian Salisbury, TIME

[expat_panama]

A lot of news buzz about that this AM...

[Wyatt's Torch]

That’s just scary as hell for UPS and FDX. There is no way they can be liable on normal deliveries. Now if people inside the company were conspiring then that’s different. I used to work for UPS (8 years). UPS transports north of 20 million packages a day. There is no way they can no what is in each of those. There has to me more to this story.

[Wyatt's Torch]

Labor force participation rate for men has been declining for 50 years. Total labor force participation started declining in the late 90’s. A lot of it is structural. Not all of it though.

The White House (yeah...I know...) released a report yesterday on this exact issue. I posted an article in this thread: http://www.freerepublic.com/focus/f-news/3181433/posts#24