Stock Market Update -May 25th

Looks like the caution I expressed last week was well warranted -the market pulled back hard this past week, and broke the recent uptrend from the March 17th low, taking us back below the 1400 level on the S&P 500! (see green trend line on the chart). Oil prices surged to $135, causing investors to pull back; airline, automobile, and financial stocks took a big hit, along with the US Dollar. We also got more bad housing numbers this week.


Next week the markets are closed for Memorial Day on Monday. On the calendar, we get 1st quarter GDP numbers, along with more housing data.

It looks like we may be starting a new down-trend, maybe a continuation of the bigger downtrend that started last October, which could take us below 1250 on the S&P 500.

News stories:
Bear Market Rally Fizzles Without Further Fed Boosts
Buffett sees "long, deep" U.S. recession
Four reasons big buildup in home inventories is ominous
Not (yet) the worst housing downturn
Bank failures to surge in coming years
China's newest export: Inflation
Booming Brazil: The new China
Latin America Going Strong

Moody's computer glitch led to incorrect rating of CPDO derivatives
When A Computer Glitch Mucks Up Bond Ratings
After Credit Computer Glitch, Credit-Rating Company Has Its Credit Rating Cut By Bigger Credit Rating Company
Moody's Faces Scrutiny of Error, Possible `Cover-Up'
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

Stock Market Update -May 18th

The market moved higher last week, putting us back above the 1400 level on the S&P 500. If it continues the uptrend, we will finally be in positive territory for the year. I'm still cautious though with $127 Oil, inflation still looming out there, and the consumer pulling back on spending.


Next week we get earnings from HP, Target, Home Depot and Lowe's.

News stories:

U.S. Consumer Sentiment Decreases to 28-Year Low
U.S. industrial output plunged in April
The dollar's short-lived comeback
Dollar's decline finally may have ended
Housing starts surge on condo construction
US foreclosure filings surge 65 percent in April
Credit Problems Spreading Beyond Mortgages: FDIC
Saudi Arabia rebuffs Bush on oil production

Other stories:
China quake toll about 30,000; new aftershock is felt
Microsoft should nuke Vista instead of Windows XP
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

Stock Market Update -May 11th

The market gave up some ground last week with bigger than expected losses from AIG and Fannie Mae, and oil prices topping $126 per barrel. The US Dollar pulled back a bit, but I expect it will move back up to test the 75-76 area.


Next week we have more earnings -some of the big names reporting include Walmart and Hewlett-Packard.

News stories:
Can Citi Find $400 Billion in Assets to Sell?
Oil prices at more than $126 a barrel
Some See Oil At $150 a Barrel This Year
Venezuela, China set to ink new oil deal

The dollar danger is not over yet
American housing -Map of misery
U.S. April Business Bankruptcy Filings Increase 49%
Ethanol Fantasy Fuels a Food-Price Nightmare

Other stories:
California man losing nine homes in mortgage mess
Clashes in northern and eastern Lebanon, outside Beirut
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

Stock Market Update -May 4th

The market continued its recent upward trend after the Fed and GDP announcements and the Jobs report. The DOW is now back over 13000, and the S&P has finally moved past the 1400 level. Maybe we'll see the Nasdaq 100 (QQQQ) take out the 50 level next week (that's where we started the year!)


MasterCard surged from the $240 level to almost $300 and Google traded past the $600 level for the first time since January. The China market (FXI) also continues to recover. Exxon fell after reporting over $10b in earnings! Sun (JAVA) was a big loser this week.

We did see a steady drop in Oil prices as I predicted last week (until it rallied again on Friday!) In general, Commodity prices dropped as the US Dollar continued its recent rally. Gold pulled back to the mid $800 level that I predicted earlier -many of the mining stocks have now pulled back to attractive levels. Brazil (EWZ) continued on its winning streak after an upgrade from Standard & Poor's.

Meanwhile Citi had to raise another $4.5 billion in capital this week, Bank of America said it may not guarantee $38 billion in Countrywide Financial debt, while S&P finally cut Countrywide's credit rating to Junk -the saga continues.

Next week we don't have much in the way of economic reports. Some of the big names reporting earnings include AIG, CSCO, DIS, and FNM.

News stories:
Countrywide Rating Cut to 'Junk' By Standard & Poor's
Homebuilders: No recovery until 2009
Housing prices post record declines
Home Vacancies Rise to Record 18.6 Million
Foreclosures spike 112% - no end in sight (Video)

Buffett Says Worst of Crisis Over for Wall Street, Individuals May Suffer
JPMorgan says no near end to financial crisis
Home Depot to close 15 underperforming US stores
Brazil's Bovespa Extends Record, Led by Retailers, After S&P Upgrade
Why we're stuck with insane prices
Forget gas: Get ready for $4 a gallon milk
Wall Street: Sell what in May and go away?

Other stories:
Crackdown on unfair credit card practices
US deep in debt and still digging
China to build 97 airports in 12 years
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.