Wal Mart and Wall Street Stumbles; Gurus Grumble; China Gold; Behind Closed Doors
LATE ADD: i know the BRAIN DEAD ZOMBIES do not CARE! Surprise! Jobless Claims Up 78,000 Week After Election; PA, OH Worst Hit http://shar.es/GwHYr
Yesterday morning I warned that stocks could come in with the Obama news conference even if futures were looking positive and that’s exactly what happened. The rise in futures was actually very short lived thanks to strong Cisco numbers (Cisco gave the bulls about 5 minutes of glory) and then it was downhill from there and further south with each word spoken by Obama. Get used to it, folks. The fiscal cliff is real, it’s a serious threat to the economy, being handled by the world’s biggest bumblers and is bound to impact financial markets. The stock market is especially in the cross hairs of this mess, but all sorts of financial assets are likely to be caught in the maelstrom.
Again, futures are pointing higher, but with more than just our own U.S. based fiscal problems, it is hard to imagine who is committing fresh dollars to the markets. I don’t think the stock market has reached a selling climax yet. The bulls can only hope that the market limps into Thanksgiving next week in oversold condition, then pray that nothing blows up during the holiday weekend (the market is open on Black Friday). With a little luck perhaps a Santa Rally might develop in December. But why, I would ask, with the fiscal cliff looming at the end of the year and a likely no action Fed meeting in December would the stock market rise into to the end of the year? The status quo of present news is not sending positive feelings to Wall Streetm but Wall Street operates under its own delusions and so anything is possible. Just the usual chaos, bedlam and randomness.
UPDATE: Already futures have gone from being up to flat. Wal Mart revenue missed the market expectations. They engineered a profit beat, but did not satisfy on the revenue line. Same store sales were shabby at 1.5%. There’s real GDP for you – barely growing and that is helped along by prices that continually rise.
Wal Mart is under the gun to keep its prices low. It will be a Herculean effort. It makes me want to avoid Wal Mart as you know they will skimp on associates to keep prices low. The Wal Mart shopper can look forward to being herded on to ever longer lines at the register and less service on the store floor.
“Price will continue to be a major factor for U.S. customers over the holidays. Our strong price position and broad assortment are clear competitive advantages,” Mike Duke, Wal-Mart president and chief executive officer, said in a statement. “Across all of our markets, we are seeing the same price consciousness as we do in the United States.”
Gold continues to drift in the 1720 range. Jim Sinclair of JSMineset fame sent an email to his followers yesterday stating that short interest is low in gold. I’d add that interest in alternative investments is low as people wait and see if their fortunes are going to evaporate on Wall Street. To a gold bug this ought to mean that investors would be rotating at least some money out of stocks into the protection of precious metals (read not GLD). But silly me for thinking that would happen. lol.
CHINA GOLD IN A CHART… Behold:
Let’s hope the U.S. really has ownership of nearly the 9k tons of gold it claims to have, or is that just another lie?
There is one observation I’d like to make. The market gurus, many of them (anecdotally) don’t know what to do with themselves. I receive a variety of stock newsletters with picks and ideas. When the market gets into one of these funks, all the bullish guru ideas dry up. It’s as if they’ve never heard of shorting, or buying counter trend issues. Something as simple as playing $SPY puts has been rewarding (if you know what you are doing), looking for mispriced options, writing calls on no shortage of blue chip stocks that are breaking down to summer lows (and perhaps beyond), etc. My list of opportunities is longer than ever, but to not run afoul of SEC rules and for other reasons, I no longer sell a subscription service.
To belabor the point. Everyone and his brother and nephew can pick a stock and seemingly win in an up market. Once again, with market weakness, the men are being separated from the boys. Here in suburban NY there are more than a few people who I know who are beneficiaries of their great grandfather’s success in the stock market of the 1929 crash and Great Depression. That wealth is still around to this day. There are always opportunities in these kooky markets. While I’m not raking in millions, the topsy turvy markets have kept me from sinking into the abyss (or living in a refigerator box many details I leave out for another time).
Watch the growing uglier advance decline ratio on the NYSE for clues on whether a dead cat bounce is materializing.
Former CIA director Petraeus is going to testify behind closed doors to a House Committee today on the Libya Embassy attack. Hasn’t there already been enough activity behind closed doors, I wonder.
At the end of the day, Petraeus is just another guy who has frittered away years of reputation building, by being found out for who he is. When has that happened before? This is likely not to have a direct impact on markets, unless Betray-us were to throw Obama completely under the bus, but the scandal associated with Benghazi is another stark reminder government cover up and scandal which are a dime a dozen. The average Joe, or Jim comes away from looking at this stuff and realizing that everything connected to Washington is a ruse to protect someone high up on the food chain. Not that this is any sort of breaking news, but it does make one long for some standards and less relativism.
Have a Day! (as my good friend Bob H says).
Share this post
Author Jim Kingsland
Market commentator with focus on Gold and Silver after long broadcast career at FNN, Bloomberg, and Fox. #RandomHouse published author on PMs. Jim has also been involved in projects for CAC and Coinplex.
No comments yet.