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Into the breach with stocks

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It’s hard to ignore the momentum in the U.S. stock market.

Over the last week, solid second quarter earnings, the last-minute save of the troubled lender, CIT Group Inc, by bondholders and a rosier stock outlook from Goldman Sachs analysts have conspired to make investors feel good again about stocks. The benchmark Standard & Poor’s 500-stock index has responded in kind.

Up roughly eight percent over the last week, the index is moving further away from the most recent nadir hit earlier this month amid concerns that increased joblessness would stymie an economic recovery. On Monday, it also crossed through a key threshold, one that opens up the road to 1,060 by the end of the year, a forecast that Goldman Sachs analysts laid out in a research report Monday.

The level was 950. While this may seem just like another round number, 950 represented a threshold that when breached signals a significant turning point for the better in the stock market.

And it’s about time. The index’s sashaying between 850 and 940 for months made for a frustrating dance between bulls and bears who both wanted to take the lead on the market’s direction.

The debt nightmare is still with us

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Pouring trillions of dollars into the global financial system has done more than pull the world away from the abyss.

It has convinced many to look again to well-worn signposts like major stock exchanges, currencies and sovereign debt to gauge where things are headed, rather than keeping their eye on credit markets to figure out where and when it will end. Take the attention being given today’s stock market rally.

IPO.not

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The optimist will take this bit of IPO news as a sign the equity markets really are springing back to life.

FindItAll.com, a fledgling online shopping website with $8,540 in cash on hand, just filed a prospectus to sell shares. And what a bargain it is. The Nevada-based company, run by Corie Weisblum out of a location in suburban New Jersey, is registering to sell 100 million shares for 50 cents each.

Markets knocking the stuffing out of the optimists

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Treasurys are up after a stellar auction of $19 billion reopened 10-year notes, stocks are floundering as investors worry about the economy and earnings season. More and more it feels like the pessimists have decisively turned the tide.

David Gaffen over at the Reuters Global Investing blog, sums it up best:

Earnings are expected to fall about 36% once again, and investors in recent weeks have finally cottoned to the idea that vaulting over low bars really isn’t much to get optimistic about. If the market is truly going to turn higher, it will depend on the quality of earnings, and there, some aren’t so optimistic. Mike Lewitt, president of Harch Capital Management, said, “I don’t think there’s a lot of revenue growth, just shrinkage – basically everybody is shrinking across the board and that’s what we’re seeing.”

Financial markets fall into Monday rut

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If things continue like this, investors will have to start calling the start of the week “mopey Monday.”

Financial markets are once again heavy with worry as concerns that the U.S. economy will take longer to emerge from the current doldrums are front and center. Even the stronger-than-expected activity in the U.S. services sector couldn’t lift investor spirits. The terrible U.S. jobs report released last Thursday is most likely still contributing to the market blues as is the end of the July 4th holiday weekend in the U.S., but I have to think that there’s a deeper ennui afflicting investors.

Markets ending the first half with a whimper

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Stocks are on their back foot with the DJIA off by nearly 1% points at 8,449 and the S&P down nearly 0.8% at 919 as a gloomier than expected consumer reminded the few trading this week that a snapback in the U.S. economy is hardly a slam-dunk.

But this setback shouldn’t minimize the gains seen in riskier assets this year. Reuters has the stats:

World Bank, Moody’s fighting for hearts and minds of stocks

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Has it really come to this? Reuters is reporting that U.S. stock futures point to strong start to the day due to ratings firm Moody’s Investors Service affirmation of the U.S. AAA rating. This comes just one day after the World Bank’s call for a 2.9% decline in global output this year had stocks go splat around the world.

When the World Bank is the main catalyst for the downside and Moody’s affirming the US AAA rating – something few expect the three major ratings firms to change anytime soon – it’s safe to say that that something else is going on.

Wall Streets waits for Godot

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Stocks, for little over a week, have been stuck in neutral.

On June 4, the Dow Jones closed at 8,750. And with a little less then two hours to go in the current trading week, the Dow was trading at 8,759. Come on, we can do it. All we need is to drop another 9 points.

That said, it’s not as if there’s been no news over the past 8 days. Last Friday we had the mixed bag unemployment report. On Tuesday, Treasury announced that 10 banks would be able to payback $68 billion in federal bailout money. And today came news that consumer confidence rose to its highest level in nine months.

Oil off the charts, Treasury yields less of a conundrum

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Oil making a 7-month high overnight is getting markets into a twitter.  The a drop in crude stocks is the driver, adding fuel to hopes that an economic recovery is on the horizon.  A weakening U.S. dollar also doesn’t hurt. Blogger Macroman, however, makes an interesting point: the demand for crude doesn’t seem to be driven by China – the usual culprit behind sharp rises in commodities.

While crude hogs most of the headlines in the commodity space, on the basis of this study at least China’s behaviour has had relatively little impact on price. Unlike the other commodities, import volumes have yet to reach last year’s highs, and they have only now reached the trend of the salad days.

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