Wall Street ends lower as weak oil weighs

Q2 labor costs surprisingly saw their smallest increases in decades but this was not enough to lift the market with the hits the energy sector took today so the Dow slumped a modest 56 points.  The upside is that the trend in lower wages put the likelihood of a September rate hike much lower.  As more Q2 reports come in, the revenue forecasts have once again been adjusted from yesterday's minus 3.6% (minus 4.0% just a few weeks ago) to today's minus 3.3%.  They've been bumping it up daily so it'll be interesting to see where it is this time next week.  At 6.8 billion, volume was in line with recent averages.

Wall Street ends flat; Expedia flies after the bell

Quite the volatile day today with at times the Dow being down as much as 110 and at others up as much as 120 before settling in at a nominal 5 point loss.  The wild buying and selling was triggered by new reports that showed that growth in Q2 actually accelerated rather than contracted.  Forecasts have been changing on almost a daily basis and it happened again today.  Yesterday the Q2 earnings forecast was changed from a minus 0.3% to a plus 0.8% and today was upped again to an even plus 1.0%.  The revenue forecast has today also been changed from a minus 3.9% to a minus 3.6%; this is with 64% of the companies reporting.  Volume was in line with recent averages at 6.4 billion shares.

Wall Street ends higher after Fed leaves investors unruffled

Just two days ago, the forecast for Q2 was raised from a minus 0.5% to a minus 0.3% as more and more companies reported in with higher than expected profits.  Today, with about half of the S&P companies now reporting in, that forecast was again changed, this time into positive territory -- a plus 0.8%!  The forecast on revenues remains pessimistic but at least has been slightly raised from a minus 4.0% to a minus 3.9%.  All told, this created another flurry of buying pushing the Dow up 121 points.  It also didn't hurt that the Fed's report today contained no surprises, though no revelations either.  The expectation is still solid that the first rate hike in ten years is coming before the end of 2015, but whether it will be in September or December there is still no hint.  The Fed's consistently stated policy is that the hike will come when there is solid evidence of a sustained recovery.  Every report so far has been that the recovery is steady but modest.  Today the language they used was that a sustained recovery would mean the end of volatility.  Will there ever be an end to volatility?  Not until this uncertainty over rate hikes ends.  There's a real Catch-22 going here which was reflected in the higher than average volume of 7.2 billion shares.

Wall Street ends sharply higher as China jitters ebb

It seems that yesterday's big crash in China was triggered by a government announcement of pulling back on their stimulus program.  This was very similar to all the panic selling here in the U.S. that always followed even the slightest hint from the Fed of easing off our stimulus program.  So today when the Chinese government counter-announced that there would be no pullback for a while, a massive wave of buying ensued, a shock that went round the world and shot the Dow up 190 points.  This was further stimulated by more Q2 earnings reports coming in better than expected (though revenue is still expected to be down 4%) plus a refreshed sentiment that tomorrow's Fed meeting will end with the announcement of no rate hike now until December rather than September.  Once again, volume was above average at 7.3 billion.

Wall Street drops as China stock slump stokes growth fears

The Chinese markets dropped a whopping 8% in one day today, the steepest decline in eight years.  Thus, on fears that the world's #2 economy is about to tank, all global markets took a dive including the Dow to the tune of 128 points and the Nasdaq 49 or almost 1 percent.  With securities regulators in Beijing scrambling for damage control, investors rush to sell anything Chinese, including the former darling Alibaba.  On the plus side of the ledger, Q2 reporting continues to come in better than expected, earnings forecasts now upgraded to a minus 0.3 percent.  Recall that a month ago it was minus 3.0 percent, then a few weeks ago a minus 1.5%, and last week a minus 0.5%.  The same thing happened in Q1 and, like Q1, it will not be surprising if a month from now Q2 is actually in the black.  Now all eyes are on this week's Fed meeting and whether the long anticipated announcement of a September interest rate will finally take place.  Volume was above average at 7.3 billion.

Succinct Summations of Weeks Events 7.24.14 (+ bonuses)

I submit another Sunday summation of the week.  Isn't it amusing that Apple made it into the "negative" column despite the fact that its revenues were whopping and earnings even more so.  But they still did not meet Wall Street's expectations so the stock dropped like a rock.  Wall Street!

A Look at the Bottom 71%

For several years there has been much media attention paid to the subject of the growing gap between rich and poor in this country (and the world) with particularly intense focus placed on what has become popularly known as "The One Percenters!"  But the subject of yesterday's Bloomberg column by Barry Ritholtz seeks to put some perspective on this by suggesting that a far more telling story is revealed by studying the bottom 71% instead of the top 1%.  Since it is always my objective to present different perspectives on issues, today I present "A Look at the Bottom 71%."

Wall Street slides to end rough week on macro, earnings concerns

I'm sure most everyone on The Street is proclaiming tonight "TGIF" as one of the worst weeks of the year comes to an end, the Dow having dropped still another 163 points on still another round of bad Q2 reporting.  This week the Dow lost nearly 3%, its largest decline since January, the S&P & Nasdaq down 2.2 and 2.3% respectively, in both cases their largest since March.  But the most telling thing about today's bad news is also the most illustrative regarding the irrationality of the market.  According to the Wall Street Journal, the main impetus behind the Dow's drop today was Hillary Clinton's statement that she intends to double the capital gains tax if elected.  She's not even the nominee yet and, whatever happens, it's not happening for at least two years, but the mere mention of it caused panic today.  Another factor attributed to today's drop was weaker than expected economic data from China.  Hey, hasn't China been weakening for some time now?  You can understand why I can so easily take all the negativism with a gigantic grain of salt.  Volume was above average at 7.3 billion.

Wall Street falls for third day as earnings fall short

For the third consecutive day Q2 reports came in bad with 3M, Caterpillar, American Express, Union Pacific, Dow Chemical and Qualcomm among those disappointing, all sending the Dow down another 119 points.  Now the fact is that 75% of all companies have so far beaten profit expectations and 52% have beaten revenue forecasts, yet this is still being called "mixed."  Perhaps all of Wall Street needs to collectively be seeing a shrink to get a proper understanding of what "realistic" expectations are.  The good news was that today made history with unemployment claims hitting a 40 (yes, that FOUR-ZERO) year low.  Volume was modestly above average at 7 billion.

Wall Street ends lower as tech stocks weigh

The rout of tech stocks continued as such giants as Apple, Microsoft and Yahoo fell for the 2nd consecutive day leading the Dow down another 68 points, 37 of those points attributed to Apple alone.  Microsoft saw its biggest one-day drop since January.  So the pessimists are remaining insistent that Q2 will be worst for sales in six years due to the strong dollar.  But they said the same thing about Q1 and it ultimately turned out not to be true.  The prior forecast of a 3% dip in profits for Q2 has now been adjusted to 1.5%, and only 1/5 of the companies have reported so that's good news.  Two bad days don't make a quarter so I still say it ain't over 'til it's over.  Volume was above average at 6.8 billion.

IBM, United Tech drag Dow; Apple results weigh on futures

Q2 earnings finally took a beating today with three bellwether companies -- IBM, United Technologies and Apple -- all disappointing.  IBM took such a big hit that fully 118 of today's 181 point drop on the Dow was due to them alone.  Microsoft and Yahoo also had bad days.  But at 6.1 billion, volume was still quite light which means most investors continue to watch from the sidelines.

Wall Street ends flat as commodities weigh

There was plenty of good news to go around today.  The banks in Athens reopened and Greece is beginning the slow process of getting back to normal.  And despite all the pessimism of the past two weeks that Q2 earnings were going to be a disaster, in actual fact as of today 70% of all companies have reported earnings above expectations, considerably higher than the average from the past 21 years.  But all this good news was not enough to balance the crash in commodities, particularly oil and gold.  Oil of course has been getting ripped for months now.  Today gold took such a hit that it is now at a 5 year low.  Of course anyone who's been paying attention has been able to chart gold's decline for the past several years.  Still the pessimists who insist we're on the abyss have fled to it as a safe haven.  Today they got a painful lesson in reality.  Anyone who's been buying gold since '08 has lost more than 40% of their investment.  But at 5.8 billion, volume was light so most of the market remains cautiously optimistic.

Succinct Summation of Week’s Events (7/17/15) (+ bonus)

Finally we're back to our weekly summation, this time with 17 positives and 9 negatives.  From watching the news you wouldn't think there were so many positives out there.  Even most of the negatives were qualified and could just as easily have been argued as positives.  This week's bonus is an excellent article from yesterday's Washington Post explaining why those prognosticators who insist on timing the markets by watching the volatility of world events almost always end up losing their shirts.  Hope everyone had a great weekend.

Actual vs. Estimated Earnings Growth 2005-2015

It is time to put the doomsayers in their place.  For so many years I've been listening to all the pessimists and their alarmist rhetoric about how we're about to fall off the so-called fiscal cliff.  This graphic, published in yesterday's Ritholtz blog (& the Post & the Journal), is all the rebuttal anyone needs - a ten year history (yes, that means starting BEFORE the Great Recession) of all the dire predictions of where the economy was heading ... and then what actually happened.  There does seem to be a rather definable trend of going negative despite the consistent evidence to the contrary.  Is that because Wall Street by nature is cynical?  Or are the negative prognostications deliberate in the hopes that the real results will have to be better and therefore drive the prices up?  Judge for yourself ...

Google propels Nasdaq to another record high close

Well Tsipras got his deal but not without firing the dissenting members of his Syriza cabinet who had vowed to defeat it.  But the real story of what went on behind the scenes in Brussels this week is the stuff of great spy novels.  Something similar to this was said to have saved us from nuclear annihilation during the Cuban Missile Crisis.  These two articles will fill in the juicy details.

Wall St. rises; eBay, Netflix push Nasdaq to record high

The Greek people aren't terribly happy but the rest of the world is elated that the Grexit problem has at long last been put to rest when Greece's parliament today overwhelmingly voted for accept the EU's proposal for a 3rd bailout.  The irony is that the opposition parties that the PM campaigned against last January are the very forces that he allied with this time and without whose support the deal would never have passed.  And despite the protestations, 70% of the Greek people do support the move.  So onward to better things, notably Q2 which, despite the fact the first few companies are reporting earnings beyond expectations, sentiment remains strong that Q2 will be the worst in years.  But at 5.6 billion shares, volume remains exceedingly light indicating most investors remain on the sidelines.

Wall Street edges lower as energy weighs

Protesters march on Athens in an all but futile attempt to persuade the parliament to vote down the EU's austerity measures tonight, but the rest of the world, including of course Wall Street, knows there really is no choice.  That is why there are no longer any concerted worries about Europe and investors' focus is now on Q2 earnings with the expectation that they will not be good.  Energy stocks continued to take a hit over fears that the new deal with Iran will produce more oil in an already glutted global market but optimistic statements from Janet Yellen and for that matter the Fed's Beige Book that the U.S. economy continues to expand and head in a positive direction provided reassurances.  Thus the Dow, which had earlier been up, then later down, closed the day near even with a mere 3 point loss.  But the light 6 billion share volume would tend to indicate that most investors are still on the sidelines keeping a closer eye on Greece and China than the markets care to admit.

Wall St. notches fourth straight advance as energy gains

It seems the markets are sending a clear signal that "Gretigue" (the latest addition to our financial lexicon meaning "Greek fatigue") has set in and investors are now looking elsewhere for their ups and downs.  Even China is no longer registering as Wall Street focuses on a bounce back in oil (likely due to the assumed resolution of the Grexit problem) and a 0.8% advance in the S&P energy sector.  All eyes are now on Q2.  The Dow rose 76 points despite an overall expectation that Q2 sales will be the worst in years and that profits will be a minus 2.8%.  Will someone please read last week's news where the same forecast was stated as a minus 3.2%.  So with only the slimmest of companies reporting in, that dire forecast in less than a week has already changed nearly 1/2% for the better.  And let us not also forget that though Q1 initially came in very much in the red, by the time all had been said and done, the red ink had been erased.  The old saying is very true:  It ain't over 'til it's over!  But with volume being very light at 5.5 billion, my guess is that investors are still waiting for more developments on both Greece and China.

Wall Street rallies on Greek deal; tech stocks jump

Yesterday the EU said it would be another week before a deal could be finalized.  Today it looks like the deal has happened.  Greece is going to get its 95 billion to cover debt payments for three years and enough emergency funding to hold out until the bailout is ready.  The EU gets an agreement from Greece to accept more austerity, something the Greeks are not happy about but, after the hell they've been through the past few weeks, at least it will return them to the smaller hell they've been in the last few years.  Beyond that, hope remains.  For more specifics on that particular controversy, I submit the following:

Euro zone leaders: Greece must do more to earn rescue (& many bonuses)

It seems the EU leaders need to go back to school as the Greeks, as they have for six thousands years, seem to be the only ones who know how to construct a drama.  I mean how many final acts in this already thoroughly overwrought piece of theater does Europe expect to impose upon Greece before the whole world stops taking the whole play seriously?

Euro zone demands more from Greece, delays decision on aid

Well, the Greeks had submitted a proposal that met all of the EU's conditions and then, once again, the EU did a 180 and said it wasn't enough.  The Greek PM pulled off a small miracle this weekend by getting the parliament to support the proposal even though it meant accepting most of the same conditions the referendum was protesting.  It is now nearly 9 a.m. Sunday morning in Athens.  In the next 15 hours, there must a deal or else.  The Greek banks are now officially out of money.  The German Finance Minister had even casually remarked earlier that perhaps Greece should draw up a 5-year plan to back out of the euro, which was swiftly turned around to sound like it was Greece's idea, a distortion they quickly correctly.  Such misunderstandings, whether intended or not, are precisely the reason these negotiations have been taken away from the finance ministers and are now directly in the hands of the 18 other PMs.  Hopefully they have a better understanding of the political implications and will do better by Greece.  We will know in about 15 hours.

And for today's news from Europe:

Euro zone ministers demand more from Greece for loan talks | Reuters

And for a snapshot showing the entire six year history of the current Greek debt crisis:

The Unfolding Greek Crisis | The Big Picture

Wall St. ends sharply higher in broad rally

Expectations that a deal will be reached with Greece this weekend rose sharply in the last two days, mostly because Greece now looks like it's going to accept most of the austerity measures after all while trying to secure the $59 billion in aid it needs to cover its debt payments for the next two years.  Whether they can convince the Greek parliament and people to accept such large compromises is yet to be seen but it's largely viewed that there will likely be no choice in the matter.  These developments, plus the calming in the Chinese markets due to aggressive government actions to moderate the hysterical trading of late boosted the Dow 211 points.  There were also reassuring remarks from Janet Yellen today regarding interest rates.  The expected announcement that a rate hike is still coming later this year did come but there is still no hint being given as to whether the hike will be in September or December.  Q2 earnings reports also started coming in with most companies reporting increased sales but, at least in today's reports, no accounting for earnings yet.  The forecast for Q2 earnings is currently a minus 3.1 percent.  Sunday is the day the final decision is made concerning Greece.  If it's "no," there'll like be more turmoil in the markets on Monday.  If "yes," look for another rally.  Today's volume was a little below average at 5.6 billion.

China relief fuels Wall St. gains; Apple drops

After losing 30% of its index in three weeks ... and after yesterday's unprecedented panic, the Chinese government did something quite unheard of today.  The new rule is that no shareholders with major stakes in certain listed firms are allowed to sell for the next six months.  That's what it took to calm the markets down today.  That and the expectation that there will be a deal with Greece in the next few days stopped the panic and even bumped the Dow up a tad 33 points.  Apple was the day's big loser as the problems with China point to less demand for iPhones in Asia.  Tomorrow Janet Yellen makes still another statement about interest rates so that's where all eyes are now.  Volume was a tad above average at 6.6 billion (but a tad below this week's average of 7.1 billion.)

Wall St. sharply lower on China fears

So it seems that the NYSE did a software upgrade last night and at 11:30 a.m. the whole thing blew up in their faces, bringing the world's largest and most prestigious exchange down for nearly four hours, longer than ever before in history.  What with all the problems with China (Greece is not even on the table anymore), there was an absolute panic that investors could not get out of their China holdings.  Thus, when the computers came back online sometime after 3 p.m., there was a frenzy of selling that brought the Dow crashing down 261 points.  This was also despite the very good news the market is always happy to hear that the Fed issued its June statement today that they were indeed going to wait a while longer before doing an interest rate hike.  So if not for the computer glitch in New York this morning, the market have actually gone up some.  Eyes are next on Q2 profits which are expected to have fallen over 3%, so anything short of that from any company will probably make the markets continue their rise.  Volume was quite robust at 7.1 billion.  (Yup, investors really were nervous when for those few hours they were unable to sell their shares in China.  What a difference a downed computer can make!)

Wall Street ends stronger after volatile session

After a recent rather serious slump, oil came back big today which nicely modified concerns about China and Greece so the Dow rose 93 points.  In fact, today suddenly investors see the turmoil in Europe and China as a plus as it may trigger yet another delay in the Fed's plans to raise interest rates.  Meanwhile, fun and games continue in Brussels but the referendum seems to have now had the desired effect in moderating unwavering positions on both sides.  Expectations are that there will be a deal by Thursday, which Merkel hopes to approve on Friday to become official when the EU ministers to meet to vote on Sunday.  At 8.6 billion, volume was quite robust.

Energy leads Wall St. lower with eyes on Greece, China

After yesterday's disastrous (for the EU) election, the Greek PM went on TV to assure his people that today was a day that all Greeks could stand proud, that they now had a strong negotiating card for getting better terms from the EU.  Angela Merkel heard these comments and immediately declared that nothing could be further from the truth, that Greece's victory would be its undoing and that there were no plans to have further negotiations.

Greeks defy Europe with overwhelming referendum 'No'

Mr. Ritholtz did not publish a weekly roundup this weekend, as is usually his habit on a holiday.  'Tis no matter as the real action this week was in Greece and today was the day that the results came in.  As of noon Detroit time, the polls closed in Athens and they were going to project the winners by 2 p.m.  At 4 p.m. the news broke and verdict is a whopping 62% No!

The Broker Who Saved America

I've been looking all day for some inspirational Revolutionary War themed 4th of July article and finally found a wonderful one in, of all places, Barry Ritholtz's financial blog.  Here is the fascinating account of an untold tale in American history -- the Jewish financier who found the money for Washington and the Continental Congress to fight the revolution.  He was a financial genius ... and more!  His escapades and trickery against the British would make a good movie.  So in honor of Independence Day, I submit "The Broker Who Saved America."

Exclusive: Europeans tried to block IMF debt report on Greece: sources

The U.S. markets were closed today for the 4th of July holiday.  But Greece is still very much in the financial news.  Today's big scoop was that the EU members tried to block a very gloomy report from the IMF that basically said that without help Greece was heading for disaster.  The fact that the European nations did not want this published the Greek government is now offering as further evidence that the severe austerity measures being forced upon them are unreasonable and would only hurry along such disaster, thus being a sound reason to reject the proposal.  The conservative factions in Greece are now rallying the troops to turn the tide of Sunday's referendum with a great many wealthy global Greeks booking expensive trips back to their homeland so they can vote "Yes" on Sunday.  The leftist government continues to urge a "No" vote, hoping that will force the EU to moderate their demands.  If the election does motivate the EU to do so, there could be an agreement as early as Monday.  The EU, headed by Germany, is hoping for the same only with a slightly different result.  If it's "Yes," they will make the deal and hopefully also get the new PM booted out.  That appears to be the game that is being played.  According to the polls, the race is currently a dead heat. In addition to today's scoop, I am also offering a short video in which the Greek government briefly explains their position, and a good article speculating on what will happen either way.  Enjoy your holiday.

Wall St. edged down on Greece worries, tepid U.S. data

Yesterday the market was way up on new hopes for Greece, today the Dow just modestly down 28 points on new worries, even though really nothing has changed.  The PM is still calling for the Sunday referendum hoping that the Greek people will vote the EU down and that will force the creditors into mild concessions that he would accept.  And Germany is still rebuffing all further dialogue until after Sunday in the hopes that the leftist government will get the boot. Who's going to blink?  Whoever it is, the other EU countries seem to be more pro-Greek than anti as they too have been resentful of the austerity programs Germany has forced upon them.  Greece has sort of become a modern anti-hero in the annals of EU high finance.  Meanwhile, U.S. payrolls came in 7,000 fewer than expected, which isn't much but still called a drag responsible for today's dip.  Instead of taking this as bad news, investors should be lauding the extra 223,000 jobs and asking on what basis forecasters thought it should have been more.  Well, that's the way Wall Street works.  Regardless it doesn't mean much since everyone's blown town for the holiday weekend.  Volume was very light at 5.5 billion.

Wall St. ends higher but energy stocks fall and Greece hopes waver

As of 5 p.m. Detroit time Greece is now one full day in arrears, also known as default.  Earlier today, it looked very much like the crisis was ending when the Greek PM sent word to the EU that his government was now willing to accept their conditions.  Germany, which just yesterday said they were still open for negotiations, upon receiving this news quickly rejected the offer and declared there would be no further talks until after Sunday's referendum.  In reaction to that, the Greek PM instantly reversed course on his previous stance to recommend a "Yes" vote to accepting the EU on Sunday to a defiant "No" vote as it is clear now, at least to their government, that Germany is hoping the leftist party will lose on Sunday and be voted out.  It is equally clear that the other EU partners want Greece to stay and, regardless of Sunday's outcome, a Monday meeting has been scheduled to try to make that happen at long last.  Both sides are playing chicken and it is my feeling that both will end up paying a price considerably beyond what would have happened if they had just been negotiating in good faith last week.  In any event, Wall Street doesn't seem too worried about it as the Dow rocketed up 138 points today, not only on new optimism about Europe but also on a slew of positive U.S. reports including the biggest jobs gains since December and the biggest construction spending in over six years.  Volume was about average at 6.4 billion.