Posts tagged Market Update
The market is off to the races again as a rise in US exports turned on the cold water and created some shrinkage to the US trade deficit. The trade deficit dropped by 7% which was better than expectations of a rising deficit (and I know, it is hard to believe expectations were wrong much like it is hard to believe printing money will lead to inflation, but let’s all just take deep breaths and try to move on from this).
So basically, with a weakened dollar, the US is becoming China without the lead paint and bad drivers (As an aside, the Chinese are forecast to buy more cars in 2010 than Americans, so now would be a good time to buy that auto body shop in Shanghai) as we can make much cheaper crap that other countries want to purchase. This isn’t a bad thing as any sales are better than no sales, and if it can create demand and jobs then we’ll have some people no longer sucking on the teet of good ole Uncle Sam (and hopefully earning enough money to suck on the teet of good ole Aunt Sam). So as long as people don’t want to travel out of the country since the dollar can now only buy about fifteen minutes in an Amsterdam motel room and a half a croissant, this is decent news.
As far as jobs, the average number of Americans filing first-time jobless claims over the past four weeks fell to a one-year low and the number of newly laid-off workers seeking jobless benefits rose more than expected last week and were higher than expectations. So it fell to a one-year low and it rose in the same week. That’s a neat fucking trick. Next up, jobless claims will prove that 2+2 does not always equal 4 (in honor of the Underground Man), will walk and chew gum at the same time, and will create a building to scale based on MC Escher’s blueprints. The point is, depending on which news source you read (one is using an average 4 week number, and I assume one just using last week’s number), we’re either still fucked or a bit less fucked, yet definitely totally confused.
In the market, C thinks they are going to raise $15B-$20B to pay back their TARP funds (and honestly, I would rather burn money and dip my balls in the searing hot ashes than buy any securities offering from C, so good luck with that) and RIMM is creating jobs by launching in China which has the stock moving up.
There’s still a bunch of noise as the economy tries to figure out just how stimulated it is (it has had its GDP tickled and been shown pictures of some hot growing economies, but it may also need an insertion in it’s back door lending policies), so be careful out there.
No really, there’s not much to see today except for this and maybe this. The dollar started to decline again thus boosting commodities and reversing some of the downturn the stock market has taken over the last week. No new data, but traders have to make money somehow so banging the soft dollar is a reasonable enough way to play the market on a slow day (while banging Jessica Biel is a reasonable enough way to play any day).
In other news, Japan announced that their economy grew slower than first thought due to reduced capital spend. As a result, they are thinking of letting Godzilla out of his cage in order to rampage Tokyo again and thus have to increase capital spend to fix the destruction. It’s not the greatest strategy, but then again neither was allowing banks to keep issuing debt while not forcing them to write-down and declare their bad debts and half-assing government intervention, so it’s not like Japan has had a ton of great ideas (the Nintendo Wii and MarioKart excluded).
Also, British officials put down their bangers and mash, put out their fags, and put in their dentures just long enough to declare a one time 50% tax on all bank bonuses. Take that you greedy bankers who made loans to gullible people who faked their employment records to buy things they couldn’t afford and then sold them at higher prices to other people who couldn’t afford them all to make a quick Euro. But at least the government is going to use that money to cut their budget deficit and not to get drunk on a week long bender in Courchevel, France like other governments are prone to do.
The news driving the market down today comes from Ben Bernanke’s speech yesterday (apparently the joke about the rabbi, the priest, and the horse did not go over well) where he warned that there are still “formidable headwinds” to an economic recovery. And in an additional exercise of overstating the obvious, he also concluded that there are formidable headwinds to repairing Tiger Woods’ image, to getting a money shot into lesbian porn, and to figuring out why his chinese restaurant keeps putting pee pee in his coke (even if it is only a joke). Money Mcbags has been preaching it here all along, but he’ll do it again: The US economy is going to struggle for awhile (at best). 15MM+ million people are out of work and the government has printed so much money to stimulate the economy that we are actually in the midst of a tree shortage, which in turn is stimulating global warming, so we’ve got that going for us too.
In stock news, McDonalds (MCD) reported November same store sales marginally below the number that analysts bent over, reached up, and pulled out of their rectums. MCD had .7% same store sales growth off of an up 7.7% growth last year, so still growth on a tough comparison. They also continue to see benefits from FX, which is one big reason to consider this a core holding. As the US moves from being a world leader to a citizen of the world, having currency diversification is an easy strategy to play (though not as easy as playing dodgeball against Terri Schiavo, and not because Terri Schiavo was in a coma, but because she is dead).
RICK also reported a nice growth in sales (and this joke is too easy, so write your own) this month as the famous old adage rings true, “Tits sell.” Same club sales were up 9.5% as RICK continues to shake off the recession fears while slipping $20s into its balance sheet. Rick is inching up to $85MM in sales and $1.00 in earnings while trading at only about 1/3 the price of a lap dance ($7). The stock is cheap, the girls aren’t, but as always, they’re only one hummer in the champagne room away from giving investors blue balls.