Continue reading U.S. Consumer Prices Unexpectedly Fall

U.S. Consumer Prices Unexpectedly Fall originally appeared on BloggingStocks on Fri, 19 Feb 2010 10:00:00 EST. Please see our terms for use of feeds.

Continue reading Before the bell: Investors bullish ahead of new reports

Before the bell: Investors bullish ahead of new reports originally appeared on BloggingStocks on Mon, 28 Sep 2009 07:30:00 EST. Please see our terms for use of feeds.

According to the Labor Department, initial claims for state unemployment benefits increased 12,000 last week. Last week's advance pushed the total number of claims (669,000) to the highest level since October 1982.

Moreover, the 669,000 claims are up 72% from the same period last year. The four-week average of initial claims increased 6,500 to 656,750; hitting its highest point since October 1982.

For the week ending March 21, the number of people collecting state unemployment benefits increased 161,000 to 5.73 million. Not only is this level 96% higher than a year ago, but it is also a new record (should we sound bells and whistles?).

Continue reading New record for jobless claims

New record for jobless claims originally appeared on BloggingStocks on Thu, 02 Apr 2009 10:50:00 EST. Please see our terms for use of feeds.

Before the Bell: Stocks headed for a lower opening originally appeared on BloggingStocks on Thu, 22 Jan 2009 08:40:00 EST. Please see our terms for use of feeds.

Minyanville contributor Andrew Jeffery dares to share the kind of keen insight and actionable information you won't find in any prospectus. For more original thought, visit www.minyanville.com.

Put on those rose-colored glasses, it's time again for the Existing Home Sales data:

• September sales came in 5.5% higher than the previous month, at 5.18 million (annualized) compared to estimates of 4.95 million.
• Sales were 1.4% higher than last year -- the first year-over-year increase in three years.
• Inventory shrank to 9.9 months worth, from 10.6 months.
• Median home price dropped to $191,400, the lowest since April 2004.
• Distressed sales made up 35-40% of sales, with 80% of those going to owner-occupiers (higher than the usual 75%).

Per normal, the National Association of Realtors chief economist Lawrence Yun is as optimistic as ever. He gets paid to obfuscate the truth.

Per normal, the National Association of Homebuilders chief economist David Seiders is as pessimistic as ever. The worse it is, the better chance his group gets on the government dole.

It's messy out there in housing land, but that's not exactly news. Keep in mind that the year-over-year numbers line up against this time last year, when credit markets first seized up and home buying all but evaporated for a couple months. Easy comparisons make for premature bottom call.

Continue reading Existing home sales paint a false rosy picture

Existing home sales paint a false rosy picture originally appeared on BloggingStocks on Fri, 24 Oct 2008 13:10:00 EST. Please see our terms for use of feeds.

The U.S. market is driving the world -- whose stock indices plunged after yesterday's 345 Dow rout. But what does today bring? A chance for recovery or further devastation depending on whether reported economic statistics are better or worse than economists expect. Early reports are bad.

Here are the reports to watch, and what analysts had been expecting according to CNNMoney:

• Job cuts - Economists expected 75,000 lost jobs, but the 8:30am report was 84,000 lost jobs -- worse than expected.
• Unemployment rate - They had forecast the jobless rate to stay the same at 5.7%, but economists were wrong on this one too and unemployment rose to 6.1%.
• Hours worked - Economists anticipated the hour work week wouldn't change from July at 33.7, and they were right.
• Change in hourly earnings - Economists saw a 0.3% increase in the hourly wage, the same as July, but hourly wages rose 0.4%. Some may interpret this as inflationary pressure, but the increase is likely not enough to increase consumer spending either.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

Market to tumble on bad economic stats originally appeared on BloggingStocks on Fri, 05 Sep 2008 09:15:00 EST. Please see our terms for use of feeds.

Perhaps after feeling they had been conscientious spenders during the holiday season, shoppers have decided it was time to make up for it. True, there are concerns about the economy, but it seems consumers are either less worried about it or don't feel the effects yet. While the January jobs data has shown a slowdown, it was the first drop in four years and may not be felt overall yet.

So sure, some of the increase in the retail numbers was to be expected as consumers paid higher prices at the pump, but there was also strong demand for new cars as auto sales increased by 0.6% in January. And while sales excluding automobiles and gasoline were unchanged, clothing stores saw an increase of 1.4%, suggesting consumers are holding up.

Continue reading Strong retail sales surprise analysts -- will it last?

Strong retail sales surprise analysts -- will it last? originally appeared on BloggingStocks on Wed, 13 Feb 2008 11:28:00 EST. Please see our terms for use of feeds.

According to the National Retail Federation, there will be a buyer's strike this holiday season. Consumers are weary and low on cash. Fuel bills will be up and home values down. They want to buy those nice gifts for Christmas, but the cupboard is empty.

And so a survey of retailers says that holiday sales will only be up 3.7% this year, far short of the 7.2% improvement in 2006. "Shoppers will be a little more conservative with their spending as they become more aware of the softness in the economy," said NRF President and CEO Tracy Mullin in a statement, quoted by Reuters. That means that, if the consumer will be shopping at all, they will want a deal on price.

For the management at big retailers like Wal-Mart (NYSE: WMT), Best Buy (NYSE: BBY), and Target (NYSE: TGT), it is not exactly good news. After a generally weak year, they could have used some help.

Move over, Scrooge wants a place at the holiday table.

Douglas A. McIntyre is a partner at 24/7 Wall St.

National Retail Federation survey: coal in the stockings this Christmas originally appeared on BloggingStocks on Tue, 16 Oct 2007 09:30:00 EST. Please see our terms for use of feeds.

Bernanke's big test begins: Time to go long on dollar? originally appeared on BloggingStocks on Wed, 03 Oct 2007 15:05:00 EST. Please see our terms for use of feeds.

Several major pieces of economic news were released this morning, and all were good. Personal Spending rose more than expected, the fastest growth in two years. The Chicago PMI report rose more than expected as well. The Michigan Consumer Sentiment report seemed to hold its own. In addition, the core inflation number came in within the Fed's target range.

This is a major contrast to the numbers earlier in the week. Durable Goods and Consumer Confidence reports were terrible, and both Existing and New Home Sales indicated that there appears to be no end in sight for the housing slump. The only good number was Second-Quarter GDP. However, this was prior to the turmoil created in the markets by the credit crisis.

Then, why did the stock market rally on the bad news and is going down today on these positive economic reports? It's the liquidity. The stock market is driven by money and credit. As there is greater availability and lower cost, the market performs better. Who is the ultimate gatekeeper for this? You guessed it: the Federal Reserve.

Continue reading The economy and the Fed: When good news is bad!

The economy and the Fed: When good news is bad! originally appeared on BloggingStocks on Fri, 28 Sep 2007 12:25:00 EST. Please see our terms for use of feeds.

Bernanke's next target: The U.S. greenback originally appeared on BloggingStocks on Fri, 21 Sep 2007 13:57:00 EST. Please see our terms for use of feeds.

The unemployment report came in as a shock to the market today as employers cut payrolls by 4,000 in August, the first drop in U.S. jobs in 4 years. The forecast was a payroll gain of 110,000.

This is a dramatic unexpected shift with large implications. The Fed's Beige Book Report had indicated that the housing slowdown had been relatively contained. Today's employment report is the first real indication that the credit crisis and housing slowdown is spreading to the broader economy.

Although the Fed relies on multiple data points, this report is the equivalent of an economic earthquake. Although the job losses were limited to government employers and private employers actually added jobs, this should cause some concern for the Fed.

Employment is a key number for the health of the economy. This is especially true in the case of a weak housing market. People will do anything to keep their homes as long as they have jobs. If unemployment increases, then, the housing crisis can worsen substantially and quite quickly. This can have a much broader effect on the economy.

The Fed realizes this and has watched the employment situation closely. I believe that this changes the Fed outlook. It will probably cut the Fed Funds rate by at least 0.25% and possibly by 0.50% depending upon what additional data indicates. This is beginning to look more like 1998. The unemployment report has just changed the entire economic outlook overnight.

Doug Roberts is the Founder and Chief Investment Strategist for FollowtheFed.com, an independent research firm focusing on investment strategies using the Federal Reserve's impact on the stock prices.

The new Fed outlook: The housing / employment earthquake! originally appeared on BloggingStocks on Fri, 07 Sep 2007 13:18:00 EST. Please see our terms for use of feeds.

I can't believe that CNBC is seriously debating the question about whether Democrats are "rooting for a recession." This is what happens when pundits run amuck on a slow news day.

Most of this "discussion" consisted of cranky Republican pundit Lawrence Kudlow yelling at the other panelists who pointed out the stupidity of the premise.

Here's a sample of his remarks:

• "If the Democrats ever discover the benefits of the investor class, they might win a national race," he said in a typical remark.
• "George W. Bush is not on the ballot."
• "The problem is that they don't have any pro-growth policies."
• "The public will not elect a Walter Mondale type-canditate."

John Bogle, the founder of Vanguard, pointed out on CNBC that that Bush and his allies in Congress have take on "staggering" additional expenses that have to be paid with actual money. Good point.

Plus, the Democrats aren't as anti-business as conservatives suggest. Remember, times were pretty good during the Clinton administration for CNBC's parent General Electric Co. (NYSE: GE) and lots of other businesses during the 1990s.

Businesses aren't oblivious to the President Bush's staggering unpopularity. They are making nice with the Democrats such as Hillary Clinton in a way that would have been unthinkable back in 2001. Investors better wake up to the fact that chances are good that a Democrat will win the White House in 2008.

If that happens, the world won't end.

Democrats want a recession? CNBC seems to think so originally appeared on BloggingStocks on Wed, 29 Aug 2007 13:30:00 EST. Please see our terms for use of feeds.

The Fed along with the other central banks continued to infuse liquidity into the markets via the discount window and other means and has indicated that it will continue to do so until the credit situation stabilizes. Why the continuing concern in the financial markets?

The Fed has indicated the stability of the banking system and the health of the economy are its primary concerns. The survival of hedge funds, traders, and other financial players is only a problem if it affects these primary concerns. Through the Discount Window, the Fed has found a way to assist the banks only.

This has caused quite a panic among hedge funds who claim that this approach cannot work. In essence, they say that the hedge funds are too big to fail without ripple effects throughout the economy. This may not be quite the truth. In 1984, the Fed successfully took over and later sold the then seventh largest bank called Continental Illinois National Bank and Trust Company. It too was considered "too big to fail." The economy continued to prosper.

Remember the Fed has substantial reserves to implement monetary policy as they see fit. It does not pay to fight the Fed. It can persist in its course of action longer than you can remain solvent. Today, it appears determined that the non-bank players who took on too much risk bear the consequences of their actions. In its view, the downsizing of Wall Street bonuses does not constitute a valid reason for a rate cut.

For those financial market participants who believe that deterioration in the economy will force the Fed to cut the Federal Funds rate, I would not be so sure. The economic numbers thus far have held up. The initial unemployment claims numbers this morning were in line. The Fed will cut rates if the numbers deteriorate. However, those seeking a bailout like 1998 may be disappointed.

Doug Roberts is the Founder and Chief Investment Strategist for FollowtheFed.com, an independent research firm focusing on investment strategies using the Federal Reserve's impact on the stock prices.

Fed Relief: Hedge funds need not apply originally appeared on BloggingStocks on Thu, 23 Aug 2007 17:15:00 EST. Please see our terms for use of feeds.

Continue reading Market correction nearing a bottom

Market correction nearing a bottom originally appeared on BloggingStocks on Mon, 13 Aug 2007 12:20:00 EST. Please see our terms for use of feeds.

The real target for inflation is 2.5% originally appeared on BloggingStocks on Fri, 15 Jun 2007 11:00:00 EST. Please see our terms for use of feeds.

Big 3 sales continue to drop originally appeared on BloggingStocks on Tue, 03 Apr 2007 15:00:00 EST. Please see our terms for use of feeds.

The only way this market can get out of its funk is with a tough love pep talk from television's Dr. Phil. If he can convince self-involved narcissists of the errors of their ways, imagine what he could do to boost consumer confidence. Something needs to be done.

Consumer confidence is down from a 2 1/2 year high. Is anyone surprised? Gasoline prices are rising. Mortgage defaults are rising and there was that recent slump in the stock market. Wall Street is clearly on edge this morning as investors wait the February jobs report, an update on the trade deficit and speeches from officials from the Federal Reserve. Stock futures are trading down following a mixed day in Asia.

In corporate news:

AT&T Corp. (NYSE:T) wants to overhaul its partnership with Yahoo Inc. (NASDAQ:YHOO), according to the Wall Street Journal.

Applebees International Inc. (NASDAQ:APPB) said an activist investor group lead by former SEC head Richard Breeden rejected its off fer for two seats on the board of directors. Breeden Capital Management LLC wants four and some three-course combo meals to go.

China is forming a company to invest its $1 trillion in foreign currency reserves. According to the Associated Press, economists say Beijing might put as much as $200 to 400 billion to the new company, creating one of the world's largest investment funds. Wall Street bankers are chartering squadrons of private planes to Beijing as we speak.

Troubled subprime lender New Century Financial Corp. (NYSE:NEW) has stopped making loans and analysts are expecting the company to file for bankruptcy protection, according to Bloomberg News.

Before the bell 3-09-07: The market needs Dr. Phil's tough love originally appeared on BloggingStocks on Fri, 09 Mar 2007 07:44:00 EST. Please see our terms for use of feeds.

Payroll data was released at 8:30 AM with employers boosting payrolls by 132,000 in November. Unemployment rate edged up slightly to 4.5% from 4.4% in October. The payroll boost was an improvement from the October number of 79,000. Both S&P 500 and NASDAQ futures reacted positively to the data and are now posting gains.

This was also positive news for the Federal Reserve as the report is indicating the economy was behaving well; neither overheating nor weakening substantially, despite a weak housing sector. This offers additional support for Chairman Bernanke's current position of doing nothing with interest rates despite market expectations to the contrary. Don't Fight the Fed!

Doug Roberts is the Founder and Chief Investment Strategist for FollowtheFed.com, an independent research firm focusing on investment strategies using the Federal Reserve's impact on the stock prices. He previously held executive positions at Morgan Stanley Group and Sanford C. Bernstein & Co.

Payroll boost supports Fed position originally appeared on BloggingStocks on Fri, 08 Dec 2006 09:02:00 EST. Please see our terms for use of feeds.