Kind of bizarre to say we “are in” a bear market AFTER it has dropped 20%. There are not enough observations to make a statistically significant statement, but what we have says BUY BUY BUY.
The dems are selling,time to buy.
Stocks are on sale! Time to buy, buy, buy!
I’m sure this has nothing to do with any of the smart money fleeing declining equities for skyrocketing oil and corn futures.
“There are some things that are up that don’t make sense. For example, the DJ Transport index is up YTD in spite of the being hostage to petroleum costs.”
I’ve said several times here that you could gather a bunch of 35+ year market veterans and ask that question/pose that quandary and I think you’d stump them all, to a man. (or woman) Absolutely incomprehensible.
Also the trucking companies that will survive, will be much stronger as midsize private players like JEVIC etc. go under - the freight rates will rise.
The DJIA has had significant losses due to the financial stocks therein, especially Citi, American Express, GE (significant finance exposure) and GM (again, exposure to finance).
At the same time, the heavy weighting of rails in the Tranny Index and the strong demand for coal and commodities has propped up the Transports. If you look at the results of FedEx and UPS, which are part of the index, you see that the consumer side of the economy *is* showing up in the transports.
As far as I can see, there’s only downside from here. The good news is faint, the bad news (especially the rocketing price of oil/fuel) just keeps getting worse, and the credit blow-ups aren’t remotely close to done.
bump
Is it just possible that the transport index is up because railroads, trucking companies and cargo shipping have raised prices faster than the rate of increase of their energy costs? Wouldn’t that be a logical explanation why trannys are up even though their business is down and costs are up?
For example, oil prices have skyrocketted, yet oil company profits have soared because they take advantage of the turmoil to add a profit premium to the increases. I’m wondering if transportation is doing the same thing. If it cost $4,000 more to ship a container by freighter but you charge $4,400 more to the customer, your profits go up. Ditto for trucks. They are getting killed on diesel but perhaps they are passing on all those costs plus a markup.
Just wondering...
Why?
Because the Economies driving the surge in oil usage are going to be hit big time by a massive turn down for goods and services over the next year.
This is already happening in some Asian countries and it looks like Europe is following suit.
China may be using lots of oil now but if the world stops buying their junk the citizenry will revert back to bicycles and ox carts.
I predicted high commodity prices two years ago when our government started to let the dollar weaken against other currencies.
Some wrote back saying I was absolutely bonkers.
The fed needs to raise interest rates on Democrats.
For shadowing an obama presidency and tax increases.
Obama’s faault.