I'm really impressed (Wednesday morning) with that move into the close as it looked like all the indices were down for the count even though they all finished in the red except the Dow (DIA), which closed as low as possible while still being in the green, thus pulling the S&P 500 (SPY) and NASDAQ (QQQ) composites out of disastrous sessions. Breadth wasn't good by any measure as decliners (1,981) almost doubled the amount of advancers on the New York Stock Exchange. Momentum stocks in general are taking it on the chin, but that's the nature of momentum stocks. The problem comes when they are leading the parade, which takes us back to the notion there has been a lack of leadership while everyone was sidetracked with the parabolic commodities rally.
There has been some puzzlement about the correlation of the death of Osama bin Laden and President Obama's ability to push his economic agenda. While the capture and killing of the monster is something we will never forget, the jubilation fades after filling the gas tank or sending off another batch of resumes to the same old websites that haven't replied. You know, I was watching a 2008 documentary on hurricane Katrina the other night and marveled at how so many people believe it's the government's role to pay them simply for existing. Yes, I felt sadness for the drug addict living in a church when Katrina hit New Orleans, but I don't think I should be taxed for his inconvenience of finding a new place to chill.
Along that line of thinking, one could understand if there was extra animosity for a President who shared similar views of government as the nanny with workers footing the bill for non-workers. But, there isn't any resentment from the crowd that has been looking for handouts since the inauguration. There isn't resentment about a sinking way of life, because I don't think welfare is adjusted for cost of living changes. There isn't resentment about the President playing 66 rounds of golf as their own lives are marginalized. I suspect there is faith that a second term will see that promised jubilee where debts to the government are forgiven and payments increased.
I'm sure there is the hope also that the war on the rich rises to another level that somehow achieves the notion of justice.
That is a small, but solid pool of Americans. But, as more people don't pay taxes and rely on government checks to live that number is sure to rise. In fact, the Administration is counting on it climbing because they'll stoke the flames. But, taking from the rich and giving to the poor isn't an economic strategy. Sure, Stalin's admirers loved the man of steel because he was another Robin Hood politician that soothed the lives of poor people by making others poor, too. So, on that note, the question is, will the fantastic and bold decision to go after bin Laden get people to in affect agree to be punished for their individual efforts and success? It might sound farfetched or rhetorical but that's what 2012 will be all about.
Everyone anticipated a bump in overall approval poll numbers for Barack Obama, and he should get a nice lift, as he earned it this week. But, the notion this lift can translate into votes on economic issues is bizarre and scary.
So far, people haven't become so giddy they've lost their minds when it comes to economic reality, at least not in results in a Washington Post-Pew Research poll.
> Satisfied with way things are going in this country today: 32% from 22% on March 14, 2011.
> Dissatisfied with way things are going in this country today: 60% from 73% on March 14, 2011.
Strong disapproval for Barack Obama's handling of his job dipped to 24% from 37% less than a month ago, while strongly approve edged up to 29% from 27%.
When it came to the economy, however, there wasn't much change in opinions.
> Net approval dipped to 40% from 42%, and strongly approved tumbled to 18% from 23%.
> Net disapproval edged down to 55% from 57%, while strong disapproval was sliced down to 39% from 46%.
(Click charts to expand)
I hope budget and debt negotiations aren't twisted or unreasonable because of that incredible news on Sunday. Since then, we've learned that more than half of Americans don't pay federal income tax, which is heartbreaking, but not as sad as the notion that many are willing to keep it that way.
It looks like a lame duck period in Finland will allow Portugal to get a $116.0 billion bailout just days ahead of meetings to assemble a new coalition government led by decided skeptics of the EU/Euro and bailouts. That's too bad, but the good news is the deal is being described as "severe", which it should be for a nation that has squandered so much. There is a big deal in the semiconductor space with Applied Materials (AMAT) acquiring Varian (VSEA) for a 55% premium.
There is also an investing lesson in this deal. Varian's share price was smacked around over the last couple of weeks, dropping $3.00 the day before the company reported, then another buck after posting results that generally beat the Street. I knew there was amazing value there, but dealing with short-term pressure can be difficult when individuals are worried and frantic. This is the challenge of modern investing. These short-term swings are powerful, and often mask underlying fundamentals and potential.
Speaking of value and potential, there is still a lot of it for the market despite obstacles from powerful sources and inflation that is as transitory as the brother-in-law that needs to crash at your crib for a couple nights and stays for months. Economic data out this morning is mixed at best. ADP jobs report came in at a disappointing 179,000.
Challenger, Gray & Christmas layoff report was good news in the sense that big businesses have announced fewer layoffs but not much less than the year before.
The market reacted indifferently to these economic releases, which is actually a good thing. It indicates to me that smart money isn't afraid of Friday's news. Cocky or just a smart calculated risk. I think the latter because we are more than a year due for steady increases of 200,000 plus and even that is well-behind, all things considered.