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Wall Street Breakfast
 » Today - Thursday, May 23, 2013 Wall Street Breakfast - daily dose of stock market news

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<p><b>Top Stories</b><br> <b><a href="http://www.cnbc.com/id/100760258" rel="nofollow">In Japan: Gravity.</a></b> Isaac Newton paid Japan's equity markets a visit Thursday and it turns out that even Japanese stocks are subject to the law of gravity (who knew?). A confluence of factors sent the Nikkei (<a href='http://seekingalpha.com/symbol/ewj' title='iShares MSCI Japan Index ETF'>EWJ</a>, <a href='http://seekingalpha.com/symbol/dxj' title='WisdomTree Japan Hedged Equity ETF'>DXJ</a>) <font color="red">plunging 7.3%</font> in a wild session where the swing from intraday high to low was ~9%. Yields on JGB 10s (<a href='http://seekingalpha.com/symbol/jgbl' title='PowerShares DB Japanese Government Bond Futures ETN'>JGBL</a>) spiked above 1% at one point, as an already skittish and volatile market was further rattled by what have generally been perceived as hawkish comments out of Ben Bernanke and other Fed officials on Wednesday. Yields pulled back in late trading. Compounding the problem for Japanese stocks was the yen (<a href='http://seekingalpha.com/symbol/fxy' title='CurrencyShares Japanese Yen Trust ETF'>FXY</a>), which was strong against the dollar throughout (the USD/JPY pair traded down to 101.8 during the Asian session), and a weak read on Chinese manufacturing courtesy of the HSBC flash PMI, which printed in contraction territory for the first time in seven months.</p> <p><b><a href="http://online.wsj.com/article/SB10001424127887324659404578498981449291750.html" rel="nofollow">Fed watchers claim hawk sightings.</a></b> A market conditioned to exhibit hyper-sensitivity to Fed officials' every utterance had a rough go of it Wednesday after Congressional testimony by Fed Chairman Ben Bernanke and minutes from the FOMC's latest policy meeting seemed to send conflicting messages. The readily observable ideological chasm developing between regional Fed presidents regarding the proper path forward notwithstanding, observers had reason to be a bit flummoxed yesterday as the Chairman predictably cited &quot;premature tightening&quot; as a risk to the recovery before saying later that the Fed could begin to dial-down purchases at &quot;one of the next few meetings.&quot; A few hours later, investors' mood soured markedly after the Fed minutes showed &quot;a number of participants&quot; are prepared to slow QE as soon as June.</p> <p><b>Top Stock News</b><br> <b><a href="http://www.cnbc.com/id/100751248" rel="nofollow">Absence of unexpected bad news lifts Hewlett-Packard.</a></b> A top line miss was indeed in the cards for Hewlett-Packard (<a href='http://seekingalpha.com/symbol/hpq' title='Hewlett-Packard Co.'>HPQ</a>) in FQ2, consistent with pre-earnings banter from some skeptics regarding the virtual impossibility of a revenue beat. The top line however, was where the bad news stopped and as one Synovus analyst told CNBC, &quot;no new bad news is good news&quot; when it comes to HPQ. The company posted EPS of $0.87, beating estimates by $0.05 and raised FY13 guidance to $3.50-3.60 versus consensus of $3.49. CEO Meg Whitman said she was &quot;encouraged&quot; by the company's performance. Shares <font color="green">rose 13%</font> AH.</p> <p><b><a href="http://online.wsj.com/article/SB10001424127887324659404578500400788754938.html" rel="nofollow">Lenovo tops estimates.</a></b> Lenovo (<a href='http://seekingalpha.com/symbol/lnvgy.pk' title='Lenovo Group Ltd Adr'>LNVGY.PK</a>) bucked a weak global PC market in its FQ4, reporting a quarterly net profit of $127M, up 90% from a year earlier and beating analysts' estimates by $20M. Revenue was up 4% Y/Y to $7.83B, shy of forecasts. For the full year, net profit came in at $635.15M on revenue of $33.87B (+15% Y/Y). The PC maker, whose results were helped by cost controls, said that although margins on its smartphones in China are less than is generally desirable, the business is profitable and the company's smartphone market share in the country has nearly tripled since 2011.</p> <p><b><a href="http://www.ft.com/intl/cms/s/0/21fd2034-c303-11e2-9bcb-00144feab7de.html" rel="nofollow">GE Capital spinoff mulled.</a></b> Jeff Immelt &mdash; speaking at a conference in Florida Wednesday &mdash; said General Electric (<a href='http://seekingalpha.com/symbol/ge' title='General Electric Company'>GE</a>) is considering spinning off parts of GE Capital through an IPO. &quot;In financial services, putting things up for sale with the assumption that a bank would buy it has been a fool's journey,&quot; Immelt said, &quot;(but) the capital markets are very receptive to IPOs.&quot; GE wants to pare down the assets of its finance arm by the end of the year and Immelt hinted that consumer finance operations (think credit cards) could be split off in a public offering. The proceeds from such a move would fund more buybacks as GE hopes to lower its share count to 9B-9.5B shares by 2015's end (from about 10.4B currently).</p> <p><b><a href="http://www.washingtonpost.com/business/ford-to-close-2-plants-end-production-in-australia-in-2016-due-to-high-costs-and-low-sales/2013/05/22/82f032c4-c348-11e2-9642-a56177f1cdf7_story.html" rel="nofollow">Ford ends production in Australia.</a></b> After nearly 88 years of making cars down under, Ford (<a href='http://seekingalpha.com/symbol/f' title='Ford Motor Company'>F</a>) said it will close its plants in Australia in 2016, as a strong aussie and high labor costs weigh heavily on the Australian manufacturing sector's ability to compete with cheap imports. The closures are expected to result in the loss of some 1,200 jobs.</p> <p><b><a href="http://www.nbcnews.com/id/51951817/ns/business-us_business/#.UZ3m6IL8EXw" rel="nofollow">Sears earnings on deck.</a></b> Sears (<a href='http://seekingalpha.com/symbol/shld' title='Sears Holdings Corporation'>SHLD</a>) is set to report Q1 earnings after the markets close with analysts expecting a loss of -$0.60 per share on revenue of $8.37B. Investors will be watching to see what, if any, effect the payroll tax increase had on the struggling retailer's quarter and will also be interested to know if J.C. Penney's (<a href='http://seekingalpha.com/symbol/jcp' title='J.C. Penney Company Inc.'>JCP</a>) return to discounting negatively affected sales. Wal-Mart (<a href='http://seekingalpha.com/symbol/wmt' title='Wal-Mart Stores, Inc.'>WMT</a>) recently blamed higher taxes and a delay in tax returns for tepid Q2 guidance and both Kohl's (<a href='http://seekingalpha.com/symbol/kss' title='Kohl&#39;s Corporation'>KSS</a>) and Macy's (<a href='http://seekingalpha.com/symbol/m' title='Macy&#39;s Inc.'>M</a>) cited tentative middle-income shoppers as a culprit for lower comps, trends which could affect SHLD.</p> <p><b><a href="http://www.chicagotribune.com/classified/automotive/sns-rt-us-nissan-recallbre94m06a-20130522,0,4756374.story" rel="nofollow">Nissan recalls vehicles due to steering wheel &quot;glitch.&quot;</a></b> Nissan (<a href='http://seekingalpha.com/symbol/nsanf.pk' title='Nissan Motors &#40;F&#41;'>NSANF.PK</a>) said it will recall 841K vehicles across the globe, citing a &quot;steering wheel glitch.&quot; The recall reportedly affects certain models of the Micra compact car and the Cube, produced in Japan and Britain. The statement filed with the Japanese transport ministry indicates that &quot;the bolt used in the steering wheel of these cars may not have been properly tightened and at worst the steering wheel may not function.&quot; No accidents, injuries, or deaths have been reported thus far.</p> <p><b>Top Economic &amp; Other News</b><br> <b><a href="http://www.markiteconomics.com/Survey/PressRelease.mvc/b9665c962d7c420095bb66b35eada8a9" rel="nofollow">Contraction: PMI dips below 50 in China.</a></b> Manufacturing activity is shrinking in China as the HSBC flash PMI fell into contraction territory for the first time in seven months in May, dropping to 49.6 from 50.4 in April, missing expectations. HSBC didn't mince words in an appeal to Beijing: &quot;The cooling manufacturing activities in May reflected slower domestic demand and ongoing external headwinds. A sequential slowdown is likely in the middle of Q2, casting downside risk to China's fragile growth recovery. Moreover, the further signs of labor market slackness call for more policy support. Beijing still has fiscal ammunition to do so.&quot;</p> <p><b><a href="http://blogs.marketwatch.com/thetell/2013/05/22/citi-economist-who-coined-grexit-no-longer-sees-greece-exit-next-year/" rel="nofollow">Score one for Draghi: &quot;Grexit&quot; 2014 no longer base case at Citi.</a></b> Citi's Willem Buiter has thrown in the towel on &quot;Grexit&quot; as a base case prediction for 2014, notable not only because Buiter has repeatedly predicted Greece will eventually bid the eurozone adieu (putting the odds at 90% within 12-18 months late last summer) but because he is credited with coining the term &quot;Grexit&quot; in the first place. Bears needn't despair too much though, as the term may not be relegated to the annals of market vernacular history anytime soon: &quot;There is [still] a fairly high risk of Grexit at some stage in coming years,&quot; Buiter said.</p> <p><b><a href="http://www.bloomberg.com/news/2013-05-23/singapore-economy-unexpectedly-expanded-last-quarter-on-services.html" rel="nofollow">Singapore Q1 GDP revision shows expansion.</a></b> Singapore revised Q1 GDP up to show a 1.8% Q/Q expansion (seasonally adjusted, annualized) versus an advance estimate of a 1.4% decline. On a Y/Y basis the economy expanded 0.2%. The Ministry of Trade and Industry said &quot;economic growth &hellip; is expected to improve gradually over the course of the year.&quot; The Singapore ETF (<a href='http://seekingalpha.com/symbol/ews' title='iShares MSCI Singapore Index ETF'>EWS</a>) is up <font color="green">19.8%</font> Y/Y.</p> <p><b><a href="http://www.markiteconomics.com/Survey/PressRelease.mvc/e5677351fe634282a0bfa8a3e134b9d9" rel="nofollow">Eurozone composite PMI hits three-month high.</a></b> The preliminary Markit composite PMI for the eurozone printed at 47.7 in May which, albeit still squarely in contraction territory, is still a three-month high. Both services and manufacturing &quot;saw an easing in the rate of decline&quot; but employment dropped for the seventeenth straight month. Ultimately, &quot;the eurozone's second recession in five years looks set to drag into a seventh successive quarter,&quot; Markit's chief economist Chris Williamson said. Individually, Germany's flash PMI came in at 49.9, showing weakness across the currency bloc continues to weigh on the region's largest economy.</p> <p><b>Editors' Picks</b><br> <b><a href="http://seekingalpha.com/article/1450961-seadrill-partners-a-stable-driller-with-growth-potential">SA Pro: Seadrill Partners: A Stable Driller With Growth Potential </a></b> <br> <b><a href="http://seekingalpha.com/article/1449641-why-i-m-buying-multiband-hand-over-fist">SA Pro: Why I'm Buying Multiband Hand Over Fist </a></b> <br> <b><a href="http://seekingalpha.com/article/1455631-when-and-why-you-should-short-arm"> When And Why You Should Short ARM </a></b></p> <p><b>Today's Markets:</b> <br> <b>In Asia</b>, Japan <font color="red">-7.32%</font> to 14483. Hong Kong <font color="red">-2.54%</font> to 22669. China <font color="red">-1.16%</font> to 2275. India <font color="red">-1.93%</font> to 19674. <br> <b>In Europe</b>, at midday, London <font color="red">-1.88%</font>. Paris <font color="red">-2.18%</font>. Frankfurt <font color="red">-2.53%</font>. <br> <b>Futures at 7:00:</b> Dow <font color="red">-0.72%</font>. S&amp;P <font color="red">-0.89%</font>. Nasdaq <font color="red">-1.06%</font>. Crude <font color="red">-0.67%</font> to $93.63. Gold <font color="green">+1.81%</font> to $1392.00.</p> <p><b>Today's economic calendar:</b><br> <b><font color="maroon">8:30</font></b> <a href="http://ows.doleta.gov/unemploy/claims_arch.asp" rel="nofollow">Initial Jobless Claims</a><br> <b><font color="maroon">9:00</font></b> <a href="http://www.markiteconomics.com/Survey/Page.mvc/MarkitEconomics" rel="nofollow">PMI Manufacturing Index Flash</a><br> <b><font color="maroon">9:00</font></b> <a href="http://www.fhfa.gov/Default.aspx?Page=85" rel="nofollow">FHFA House Price Index</a><br> <b><font color="maroon">9:45</font></b> <a href="http://www.bloomberg.com/consumer-comfort-index/" rel="nofollow">Bloomberg Consumer Comfort Index</a><br> <b><font color="maroon">10:00</font></b> <a href="http://www.census.gov/construction/nrs/" rel="nofollow">New Home Sales</a><br> <b><font color="maroon">10:30</font></b> <a href="http://www.eia.doe.gov/oil_gas/natural_gas/ngs/ngs.html" rel="nofollow">EIA Natural Gas Inventory</a><br> <b><font color="maroon">11:00</font></b> <a href="http://www.kansascityfed.org/research/indicatorsdata/mfg/index.cfm" rel="nofollow">Kansas City Fed Mfg Survey</a><br> <b><font color="maroon">4:30 PM</font></b> <a href="http://www.federalreserve.gov/releases/h6/" rel="nofollow">Money Supply</a><br> <b><font color="maroon">4:30 PM</font></b> <a href="http://www.federalreserve.gov/releases/h41/" rel="nofollow">Fed Balance Sheet</a></p> <p><b>Notable earnings before today's open:</b> <a href='http://seekingalpha.com/symbol/aap' title='Advance Auto Parts, Inc.'>AAP</a>, <a href='http://seekingalpha.com/symbol/ainv' title='Apollo Investment'>AINV</a>, <a href='http://seekingalpha.com/symbol/alks' title='Alkermes, Inc.'>ALKS</a>, <a href='http://seekingalpha.com/symbol/bke' title='The Buckle, Inc.'>BKE</a>, <a href='http://seekingalpha.com/symbol/bont' title='The Bon-Ton Stores, Inc.'>BONT</a>, <a href='http://seekingalpha.com/symbol/dltr' title='Dollar Tree, Inc.'>DLTR</a>, <a href='http://seekingalpha.com/symbol/gme' title='GameStop Corp.'>GME</a>, <a href='http://seekingalpha.com/symbol/hrl' title='Hormel Foods Corporation'>HRL</a>, <a href='http://seekingalpha.com/symbol/qsii' title='Quality Systems, Inc.'>QSII</a>, <a href='http://seekingalpha.com/symbol/rl' title='Polo Ralph Lauren Corporation'>RL</a>, <a href='http://seekingalpha.com/symbol/slf' title='Sun Life Financial, Inc.'>SLF</a>, <a href='http://seekingalpha.com/symbol/td' title='Toronto-Dominion Bank'>TD</a></p> <p><b>Notable earnings after today's close:</b> <a href='http://seekingalpha.com/symbol/aro' title='Aeropostale, Inc.'>ARO</a>, <a href='http://seekingalpha.com/symbol/blox' title='Infoblox Inc.'>BLOX</a>, <a href='http://seekingalpha.com/symbol/crm' title='salesforce.com, inc.'>CRM</a>, <a href='http://seekingalpha.com/symbol/gps' title='The Gap, Inc.'>GPS</a>, <a href='http://seekingalpha.com/symbol/ment' title='Mentor Graphics Corporation'>MENT</a>, <a href='http://seekingalpha.com/symbol/mrvl' title='Marvell Technology Group, Ltd.'>MRVL</a>, <a href='http://seekingalpha.com/symbol/p' title='Pandora Media'>P</a>, <a href='http://seekingalpha.com/symbol/rost' title='Ross Stores, Inc.'>ROST</a>, <a href='http://seekingalpha.com/symbol/shld' title='Sears Holdings Corporation'>SHLD</a>, <a href='http://seekingalpha.com/symbol/svm' title='Silvercorp Metals Inc.'>SVM</a>, <a href='http://seekingalpha.com/symbol/wsm' title='Williams-Sonoma Inc.'>WSM</a>, <a href='http://seekingalpha.com/symbol/zumz' title='Zumiez Inc.'>ZUMZ</a></p> <p>See full <a href="http://seekingalpha.com/currents/earnings">real-time earnings coverage &raquo;</a></p> <p>Wall Street Breakfast is sent out by email for free -- <a href="http://seekingalpha.com/page/email-preferences/?source=newsbriefbody">Get it now &raquo;</a> </p>
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Comments (46)
  • Well the pros are busy selling given yesterdays reversal. So his is the famed QE selloff, now the only question is how shallow will it be. Reality is that Uncle Ben mentioning the taper could start soon is a very bullish signal about the economy. So people need to weight the impact of removing stimulus versus the growth in the economy. I think the economy wins.

    On the oil front, growth rates are tapering off to only 1M bpd levels. If tis trend continues it would not be as bullish as I had hoped though estimates of 600k bpd Y-Y growth between 2012 and 2013 are already there due to the many months of 1.2+M bpd increases so far this year.
    23 May, 07:28 AM Reply Like
  • Problem, people like free money. If Ben can print it, that's good.

    "Reality is that Uncle Ben mentioning the taper could start soon is a very bullish signal about the economy. So people need to weight the impact of removing stimulus versus the growth in the economy. I think the economy wins."

    Same can be said about raising interest rates, which only rise to counter inflation, which typically happens in an economic expansion. But rising interest rates usually lead to a lower market. I know, doesn't make sense. But the market is irrational anyway.
    23 May, 08:49 AM Reply Like
  • Oil may be one of the better sectors to weather the inevitable storm once QE3 ends. If rising and sustainable economic growth does indeed justify an end to the easing, no reason to fret about oil demand.

    One characteristic of market tops is increased volatility, and a 9% intraday swing in the Nikkei hardly bodes well for stockholders. Anyone fully invested since Christmas must surely be tempted to take profits now. Methinks it's time to batten down the hatches, matey!

    MLP investors > Mitigate Losses Promptly.
    23 May, 08:50 AM Reply Like
  • "Same can be said about raising interest rates, which only rise to counter inflation"

    Michael : that's yesterday's theory. Since the 2008 crash, it's a good bet that central banks will raise rates to prevent bubbles, absent any inflation on the horizon.
    23 May, 08:58 AM Reply Like
  • [Fed watchers claim hawk sightings. A market conditioned to exhibit hyper-sensitivity to Fed officials' every utterance had a rough go of it Wednesday after Congressional testimony by Fed Chairman Ben Bernanke and minutes from the FOMC's latest policy meeting seemed to send conflicting messages.]

    Helicopter Ben's aircraft is apparently a drone.
    23 May, 09:16 AM Reply Like
  • GJ, why do you think the fed easing off of QE3 will be such an impact on the markets? Reality is the money is flowing into the market to harvest dividends not speculate on dot.bombs (well excluding Tesla). When the fed stops buying treasuries and mortgages that doesn't mean all of a sudden people need to liquidate stocks to buy mortgages and treasuries. Indeed, with a sudden massive shrinkage in our deficit, we might not even need to have the fed buy any as the market may be starving for more US treasuries given the demand.
    23 May, 10:36 AM Reply Like
  • The problem is that the FED is just about the only buyer for US paper.
    23 May, 02:06 PM Reply Like
  • A steering wheel "glitch?" If the steering wheel does not work, you may have more than a "glitch" on your hands.

    "No new bad news, is good news." Great way to run HP.
    Should be a commercial on TV. "Buy an HP computer. No new bad news, is good news."

    JPM picked up a $4M + fine in the UK yesterday. Market Currents did point out that it was a JPM "subsidiary," however.

    Still looking for any follow-up to the Apple/Senate "discussions." Quite a bit of bluster beforehand, then quiet once Tim Cook did not shrink and cower.

    Where is Jon Corzine and could he have stopped LeBron on his drive to the hoop?

    Have a great day everyone.
    23 May, 07:48 AM Reply Like
  • Gee do you think Tim Cook was able to show the Senators that when one actually complies with the law they are not breaking the Law ? Maybe the grandstanding Senators should have done their home work before coming to get schooled.
    23 May, 08:50 AM Reply Like
  • The whole fiasco should be a lesson for these Senate "committees."
    In my opinion, Apple was targeted because of the "Wow Factor."
    If current tax laws aren't what the esteemed Senators want, then change the laws!
    A slippery slope to go down, considering the campaign contributions that come from corporations to many Senators.

    Where is Mr. Smith when we need him?
    23 May, 08:56 AM Reply Like
  • Precisely why Apple was singled out. They don't make the right contributions.
    23 May, 09:14 AM Reply Like
  • > Precisely why Apple was singled out. They don't make the right
    > contributions.

    More like they're one of the biggest boys on the block. This used to happen to XOM all the time for the same reason. Congress needs someone big to point at as an example of Congress' own stupidity in law passing.
    23 May, 09:21 AM Reply Like
  • Hey Congress is great at passing laws that no one bothers to read they vote yea or nay based on what the lobbyist tell them, they don't havew the time to take away from the endless campaigning
    23 May, 09:34 AM Reply Like
  • Re the Apple/Senate "discussions." ---Just another shining example of the inane antics of the esteemed body called The United States Senate. No wonder the "people" have no faith in their government. As someone else posted, if they don't like the law, change it.
    23 May, 09:40 AM Reply Like
  • All the more reason to repeal the 17th Amendment
    23 May, 10:39 AM Reply Like
  • Google is huge. It got a huge tax refund all perfectly legal. Congress critters didn't bat an eye and no questions were asked. GE Capital Got government assistance yet paid no taxes. Where was the outrage? See what I mean?
    23 May, 02:09 PM Reply Like
  • deercreek
    You are in luck again. I read where the NY legislature is debating a new law that will legislate when you can and cannot wear bowling shoes. I didn't realize that New Yorkers were not smart enough to know this. You all should be thankful that the government is looking out for your welfare.
    23 May, 02:23 PM Reply Like
  • > Google is huge

    Not nearly as huge as AAPL. Just for kicks, let's look up some quick facts and data (I know, I know, facts and data are scary...):

    AAPL market cap = $416B
    XOM market cap = $408B
    GOOG market cap = $293B
    GE market cap = $244B

    XOM 2012 income before tax = $78B
    AAPL 2012 income before tax = $55B
    GE 2012 income before tax = $17B
    GOOG 2012 income before tax = $13B


    That said, AAPL /is/ fairly low on the lobbying food chain in terms of dollars spent (http://bit.ly/12Qo1uD), whereas GOOG and GE are pretty high (http://bit.ly/11ft752).

    However, XOM is a pretty big spender too (http://bit.ly/12QnZCP), so I'd still say the correlation has more to do with size (i.e., grandstanding) than donations or affiliation.

    Meh. Each to their own.
    23 May, 02:30 PM Reply Like
  • Oh to be a trader on the NIKKEI 225 floor.

    I happen to notice that early the index was up over 300 pts. It ended up down over 1000. The day's high was 15,943. The day's low (where it ended) was 14,484. You do the math.
    23 May, 07:49 AM Reply Like
  • Up 2% early down 7+% at the end. Gotta love those reversals. I was actually looking forward to a reality check in Japan, they are weakening their currency but their trade deficits keep growing. So getting the opposite effect. You know that isn't going to end well.
    23 May, 07:51 AM Reply Like
  • gggl... Yeah, I wouldn't expect the trade deficit to turn on a dime.

    From the small world dept, Guy in Tokyo drops into the Colorado Rockies blog and mentions how encouraged they all were. But that was yesterday and yesterday's gone (apparently).
    23 May, 08:01 AM Reply Like
  • Until Japan do what Germany did, admit WW2 was a huge mistake, S Korea and China will not accept a rapist as a lover.
    23 May, 09:26 AM Reply Like
  • I recently read a piece in a WW II magazine about Japan's conduct in Korea. (I truly love having a kid that loves history!) I then talked to my Korean neighbors about it. I was shocked at how truly brutal things were in their homeland during WW II. They just put their heads down and became very emotional. It is war, but, seems like they went above and beyond to impose their will on the populace. I have not read about China, but, suspect it was similar. After reading that piece and speaking to my neighbors, became clear to me why things have not been "forgotten" about WW II.
    23 May, 09:46 AM Reply Like
  • Trust me, it was nothing compared to the concentration camps and don't believe all of the propaganda about how noble all of the inmates were. It was a fight for survival and you definitely didn't see the best of mankind, you far to often saw the worst.
    23 May, 10:14 AM Reply Like
  • chudzikb
    Read The Rape of Nanking for a history of what Japan did in China during the war. Truly sickening. Also explains the feelings of China towards Japan today.
    23 May, 10:32 AM Reply Like
  • I have seen WWII shows on the Chinese war in WWII, not a pretty picture, it is no wonder that they have not forgotten. And I suspect it is good to remember your past.
    23 May, 10:55 AM Reply Like
  • Well, they do have to import all of their manufacturing inputs except for labor. Seems like they can't win with this strategy unless labor is their largest input as a percentage of cost for their export goods.
    23 May, 12:24 PM Reply Like
  • Many Chinese do not want to punish today's Japanese because what happened in WW2. But we will never accept that what Japanese did in WW2 was not wrong. I do not understand why or how some Japanese can think that what Japan did in WW2 was acceptable.
    23 May, 12:31 PM Reply Like
  • It seems the selloff/market correction is coming sooner rather than later, as people realize that printing money doesn't actually make any new value; it just devalues the existing worth.

    I'm glad that I've taken profits (and cashed in some losses before they got bigger, lol) over the past two to three weeks. You can't wait until the market tops out and then sell, 'cos you'll be caught in the crush of everyone else heading for the exits!
    23 May, 08:49 AM Reply Like
  • AB to assume a correction is being very premature. Right now we will see whether the pros have the ability to run the market down. I think they will fail because there is money on the sidelines and early fed tapering isn't a negative it is a signifcant positive because it means the economy is recovering faster than expected.
    23 May, 10:18 AM Reply Like
  • EZ recession continues at seven quarters and counting. Slowing noted in Asia as well and helicopter Ben threatening to take away the punch bowl. Fuel prices trending up along with other commodities doesn't bode well for a robust recovery. No wonder the much anticipated correction has arrived a little early. Watch for falling window dressing next week.
    23 May, 09:18 AM Reply Like
  • While I am reluctant to confuse people with facts and unpopular opinions, the cost of fuel is not going up. My measure, crack spreads, are down about 30% since February. The Fed is fighting deflation not inflation and will constitute to do so until somehow the country can get around the House Republicans who are a national disgrace, putting party ahead of country.
    23 May, 09:50 AM Reply Like
  • There is a spike in gasoline prices in the midwest, likely caused by some retrofitting of 3 refinieries in the midwest that are being retooled to use the Canadian tarsands crude.
    23 May, 10:19 AM Reply Like
  • Gasoline in OK has dropped 20 cents on a 70 cent runup. Today at $3.79
    23 May, 12:40 PM Reply Like
  • http://bit.ly/19830il
    23 May, 02:16 PM Reply Like
  • Could this be the "Sell in May.." moment?
    23 May, 09:52 AM Reply Like
  • No, I think it will be a headfake. For this really to be a correction we need to see the Russell 2000 break below 900. Instead what you are getting is a pro induced attempt at spooking the market that comes right when there is limited economic data to douse their attempts. Reality is that the employment situation is healing fastr than people think. That makes the payroll tax cut a non-event and cutting any government spending by making workers go home for a day without pay definitely has ZERO effect on the real economy.
    23 May, 10:21 AM Reply Like
  • Remember, new home starts much stronger than expected, vehicle sales are also growing robustly and finally drilling more oil in the USA. That doesn't spell a weak economy that spells a strengthening economy.
    23 May, 10:23 AM Reply Like
  • gggl
    Your points are well taken but the stock market has been disconnected from the reality of the economy for a long time.
    23 May, 10:34 AM Reply Like
  • wyostocks, what makes you say that? It seems to be that the markets are following earnings since the P/E's are not out of whack. Further, given that markets are forward looking the current price should reflect earnings for Q3/Q4 not Q1/Q2.
    23 May, 10:44 AM Reply Like
  • gggl

    Up 22% since November and up 8% in the last four weeks. The S&P has gone nearly parabolic in the last month.

    What is the market discounting in your opinion?
    23 May, 11:14 AM Reply Like
  • The market may simply be reacting to the fact that oil prices have peaked and we are producing a massive amount of new oil in the US. Oil really matters and the amount of oil we now produce here and thus recieve the residual economic impact is no longer small. Roughly 1M bpd equates to a 1% increase in GDP. Since last fall we have grown oil production at that level or more. That is a significant long term economic boost to our economy that no one likely was factoring in a year or two ago. Now the markets have to respect it because it has happened and it is just a matter of time for the people to spend their new found oil wealth.
    23 May, 11:40 AM Reply Like
  • GH, also it is pretty evident that the markets were getting ready to correct going into May, however a strong labor report for April reversed that and caused the latest rally. So people clearly think that the current policy environment is negative for growth because of the tax increases and spending growth reductions but that is simply clouding their perception because oil and more employment seem to be doing a good job of negating that.
    23 May, 02:44 PM Reply Like
  • There is a recovery, but it's not happening as fast as the markets have reacted, so there needs to be a pullback to more realistic levels, and it is happening. As holiday season is coming too, any bad news will have a bigger effect in thinner trading, whilst good news won't be so magnified because buy trading levels will be that much less: the market participants that matter will be sunning themselves in warmer climes (spending their not-so-hard-earned bonuses,lol).

    I'll put my cash, including profits, back in later in the year. Next week I'm on holiday (and again in July)!
    23 May, 10:55 AM Reply Like
  • AB, just a few months ago we were speculating about negative GDP growth in Q1 as a possibility. Then it comes in at 2.5%. I think the economy has bee seriously misjudged. Remember our current growth is coming despite the payroll tax increase AND the sequester. If we do 2% in H1 that is probably closer to 4% without those two impacts and you need to understand, they are done, factored into GDP and no longer play a role in future growth once we get past Q2.
    23 May, 11:42 AM Reply Like
  • Happily, you're not the only one. Schools out for the summer!
    23 May, 12:09 PM Reply Like
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