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HomeMay 15, 2010: Market Week in Review
Posted by Larry Doyle on May 15th, 2010 6:12 AM |
The European Union, the European Central Bank, and the International Monetary Fund (and the Fed, as well, although they don’t want to truly highlight it) provide $960 billion in backstops for the Euro-zone and what happens? The Euro ends the week lower by 3%!! Ladies and gentlemen, that is nothing more than a major “F&%@ Y#&“ on behalf of global investors to the aforementioned central banks and government entities.
Think there is tension in Euroland, and specifically between France and Germany? As The UK-based Telegraph reports, President Nicolas Sarkozy ‘Threatened to Pull France Out of Euro’:
President Nicolas Sarkozy slammed his fist on the table and threatened to pull France out of the euro at a meeting of European leaders deciding Greece’s aid package last Friday, according to Spain’s El Pais newspaper.
The last time there was this kind of tension between these countries, guess who was coming ashore at Normandy? (more…)
How Long Can Uncle Sam Rig the Game?
Posted by Larry Doyle on May 13th, 2010 5:32 PM |
Is the market rigged?
Actually, the question of whether our markets are rigged or not is becoming less and less a question and more widely accepted as fact. This reality is evidenced by the totally incredulous evidence that four major banks on Wall Street had perfect (not one negative trading day) first quarters.
Some may think this is good for our economy. I am not one of them. Why? (more…)
What We Learned from the May 6th Market Plunge
Posted by Larry Doyle on May 11th, 2010 7:55 AM |
Like leading sheep to the wolves, the manner in which high frequency trading activity has grown to dominate our equity markets is nothing more than a trap. How has that trap worked? Stay on message and continue to promote the premise that high frequency trading adds liquidity to the market. Time and time again, America would hear from quantitative traders and their analysts engaged in high frequency trading that these programs would provide consistent liquidity from which retail investors would benefit.
What a crock!! That said, the HFT activity itself is not to blame for the market plunge. The programs behaved as they were designed. That is, during periods of extreme volatility, those running the programs would simply shut down the machine. Is that liquidity? No, I don’t think so.
Never again should America have to listen to anybody engaged in high frequency trading and hear them say these systems provide liquidity to the market. They don’t. (more…)
May 8, 2010: Market Week in Review
Posted by Larry Doyle on May 8th, 2010 9:33 AM |
The bill comes due.
This week’s bill is in Greece. The bills right behind it are in other EU nations. The larger bills are in the UK and the US. How will they be paid?
A combination of fiscal austerity measures, debt restructuring, monetization through currency devaluations, and potentially defaults. The civil unrest playing out in Greece is likely a precursor to similar unrest in other nations. Unless and until real fiscal discipline is implemented and executed, this civil unrest will spread.
Fiscal discipline may stunt short term government stimulated economic growth, but that is the only remedy for a path to long term economic prosperity. Washington has shown no appetite nor inclination to write this prescription. Our future is and will continue to be very challenging until they write the prescription. As I wrote the other day, “Athens Today, London Tomorrow? Washington Next Week?”
Welcome to the Sense on Cents Week in Review where I provide a streamlined recap of month-to-date market returns. (more…)
May 6, 2010 Trading Was Crony Capitalism!!
Posted by Larry Doyle on May 7th, 2010 9:27 AM |
While the market is working to digest the better than expected Unemployment Report this morning, put the pom-poms away please. No, I am not negative on the report, I am calling bulls%*# on a crony capitalist system that allows for so-called market exchanges to develop and function as they did yesterday.
Fat finger (meaning a trade size was incorrectly entered)? I do not buy it. I think yesterday was nothing more than so-called liquidity providers engaging in high frequency trading, and taking investors to the hoop in a HUGE way. How so? (more…)
April 2010 Market Review
Posted by Larry Doyle on May 1st, 2010 9:30 AM |
Did spring, in the form of April’s market returns, just come in like a lamb? Will spring, in the form of 2nd quarter GDP, go out like a lion? Will that lion be robust and energized, or an angry beast?
April’s returns are now in the books. Many of the themes remain the same. Those include:
1. A trend toward disinflation helping the bond market primarily.
2. Easy money from the Fed supporting all markets.
3. Improved corporate earnings (be aware that earnings comparisons are year over year, and April 2009 was the economic abyss). (more…)
April 10, 2010: Month to Date Market Review
Posted by Larry Doyle on April 10th, 2010 8:30 AM |
I will spare you the fact that the drama playing out in Greece is likely to have a tragic ending. I will do the same in terms of housing and labor in our nation. Let’s focus on the positives which reside in the bubbling waters of a variety of market sectors. Are the bubbles intoxicating? You bet they are. Remember, though, do not drink and drive!!
Welcome to our Sense on Cents Week in Review where I provide a streamlined recap of the major economic data and news, along with month-to-date market returns. (more…)
Caution: The Market Looks Dangerously ‘Overbought’
Posted by Larry Doyle on April 6th, 2010 8:48 AM |
Is the equity market overbought? Am I supposed to be allocating capital to the equity market after this enormous runup? Is there value in the market, or is this simply one massive momentum trade? Why is overall equity volume so light? Is that an indicator that the market is operating on borrowed time?
All great questions. If I had the exact answers and told you so, I’d be a certifiable liar. These questions can only be addressed on a relative basis. On that note, one of the best measuring sticks that I’ve always used in assessing overall market strength and direction is known as Relative Strength Index, or RSI. What is that? (more…)
What if Nobody Shows to Wall Street’s Party?
Posted by Larry Doyle on March 5th, 2010 2:48 PM |
Did Wall Street forget to send out invitations to the party going on in the equity markets, or are people merely preoccupied with other affairs to truly care as to what is happening in lower Manhattan?
In any event, I referenced the other day during my appearance on CNBC’s Street Signs that the greatest risk for the financial industry is if people choose not to play the game. In fact, I very much believe that dynamic is playing out. Why? Look at today’s price action in the equity markets. (more…)
February 20, 2010: Market Week in Review
Posted by Larry Doyle on February 20th, 2010 7:54 AM |
Markets rebounded strongly this week. In the process, most of the major market equity averages, commodity indices, and bond ETFs recouped January’s declines and are now back close to their December 31, 2009 levels. What happened?
Welcome to our Sense on Cents Week in Review where I provide a streamlined recap of the major economic data and news, along with month-to-date market returns.
ECONOMIC DATA
A lot of news and data this week. Some good. Some not so good. Let’s dive right in. (more…)
