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31 Ocak 2011 Pazartesi
On CNBC's Kudlow Report Tonight
On CNBC's Kudlow Report tonight at 7pm ET:MARKETS
- Keith McCullough, Founder of Hedgeye Risk Management
- Jim LaCamp, Macroportfolio Advisors Sr. VP, Portfolio Manager
- Phil Orlando, Federated Investors Chief Equity Market Strategist
COMMODITY RISE … EMERGING-WORLD TURMOIL … INFLATION: IS THE FED TO BLAME? CAN THEY FIX IT?
- Brett Arends, Columnist The Wall Street Journal
- David Riedel, Riedel Research Group President & Founder
EGYPT: WILL MUBARAK LAST? IMPACT ON REGION; HOW SHOULD OBAMA HANDLE?
- Lawrence Eagleburger, Fmr. Secretary of State; Baker, Donelson, Bearman & Caldwell Sr. Public Policy Advisor
- Gen. Montgomery Meigs, U.S. Army (Ret.)
- Daniel Kurtzer, Former U.S. ambassador to Egypt (1997-2001); Former U.S. ambassador to Israel (2001-2005)
WICKED WEATHER WATCH
- Todd Santos, The Weather Channel
FLORIDA FEDERAL JUDGE DEALS BLOW TO OBAMACARE
- CNBC’s Eamon Javers reports from the White House.
- Matt Miller, "Left, Right and Center" Host, Washington Post Online Edition Columnist
- Diana Furchtgott-Roth, Hudson Institute Director of the Center for Employment Policy
Please join us at 7pm ET on CNBC.
Monday Morning Musings
The markets are mixed in early trading, with the S&P 500 higher but the Nasdaq slightly lower. Concerns about the turmoil and political unrest out of Egypt have cooled some, even as Egypt's stock market remains closed.
The flight-to-safety trade from Friday is not being carried over today, as Treasuries are slightly lower, gold prices are down to $1329, and oil prices are off slightly also ($89.11). The dollar is also lower while the euro is getting a big boost.
In economic news, the Chicago PMI report out this morning came in at 68.8, which is a pretty strong reading.
In corporate news, Alpha Natural Resources (ANR) said it will buy Massey Energy (MEE) for roughly a 20% premium. Intel (INTC) announced that its latest chip has a design flaw, and they are halting shipments which will result in a large charge. But at the same time they raised revenue guidance. Nonetheless, the stock is lower right now.
Asian markets were lower overnight; the 10-year yield is up a bit to 3.34%; and the volatility index is down slightly to 19.86 after a big spike higher on Friday.
Trading comment: Friday's selloff was accompanied by a pickup in volume, such that the distribution days in the market are picking up a bit. Today's bounce looks a bit tepid so far, but it's still early. It would not surprise me to see a 1-2 day bounce, but then more of a pullback in the market. This would create a better buying opportunity, but as we have seen this market is anything but predictable.
If we close near here, the S&P 500 will achieve its first positive January since 2007. So those folks who put stock in the 'January effect' should be pleased. As of now, the SPX is up 1.9% for the month.
The flight-to-safety trade from Friday is not being carried over today, as Treasuries are slightly lower, gold prices are down to $1329, and oil prices are off slightly also ($89.11). The dollar is also lower while the euro is getting a big boost.
In economic news, the Chicago PMI report out this morning came in at 68.8, which is a pretty strong reading.
In corporate news, Alpha Natural Resources (ANR) said it will buy Massey Energy (MEE) for roughly a 20% premium. Intel (INTC) announced that its latest chip has a design flaw, and they are halting shipments which will result in a large charge. But at the same time they raised revenue guidance. Nonetheless, the stock is lower right now.
Asian markets were lower overnight; the 10-year yield is up a bit to 3.34%; and the volatility index is down slightly to 19.86 after a big spike higher on Friday.
Trading comment: Friday's selloff was accompanied by a pickup in volume, such that the distribution days in the market are picking up a bit. Today's bounce looks a bit tepid so far, but it's still early. It would not surprise me to see a 1-2 day bounce, but then more of a pullback in the market. This would create a better buying opportunity, but as we have seen this market is anything but predictable.
If we close near here, the S&P 500 will achieve its first positive January since 2007. So those folks who put stock in the 'January effect' should be pleased. As of now, the SPX is up 1.9% for the month.
29 Ocak 2011 Cumartesi
REGRESSION TO THE MEAN
All markets are subject to the forces of regression. Newton's basic laws of motion; Action and reaction.
At current levels both the S&P and Nasdaq 100 are stretched further above the 200 day moving average that virtually any other time in the last 10 years.
Not surprisingly the further a market stretches in one direction the harder it snaps back in the other once the forces of regression gets its hooks into the market.
The Fed is exacerbating this process with their constant meddling in the markets.
The flood of liquidity unleashed by Greenspan and Bernanke from 2002 to 2007 in the vain attempt to abort the bear market was directly responsible for creating the conditions that led to the market crash of 08/09.
The rally last April was pushed much higher than it would normally have risen by the forces unleashed during QE1. The end result; the correction when it finally came was much more severe than it would have been normally, even including a mini-crash in May.
QE2 has now driven the market even further above the mean than in April. Unless the law of action and reaction has been repealed we should soon see an extreme regression to the mean event .
I believe the Fed has put into place the conditions that will bring about the end of this cyclical bull market and usher in the next leg down in the secular bear.
During the next 3 months we should see the dollar begin to collapse down into the 3 year cycle low unleashing the currency crisis we've been expecting. This will drive a massive surge in inflationary pressure that will poison the fragile recovery and send the global economy back down into the next recession. A recession that should be much worse than the last one as it will begin with economic conditions much weaker than in `07.
The last time the Fed did this it produced a brief period of prosperity by creating a real estate and credit bubble. We all know how that ended. This time I expect the party to last two years tops, which means this cyclical bull should top by March. In their ill fated attempt to get something for nothing the Fed is going to cause a currency crisis and a massive surge in global inflation.
The price we will all pay when the house of cards comes crashing down again will be multiples more expensive than last time.
At current levels both the S&P and Nasdaq 100 are stretched further above the 200 day moving average that virtually any other time in the last 10 years.
Not surprisingly the further a market stretches in one direction the harder it snaps back in the other once the forces of regression gets its hooks into the market.
The Fed is exacerbating this process with their constant meddling in the markets.
The flood of liquidity unleashed by Greenspan and Bernanke from 2002 to 2007 in the vain attempt to abort the bear market was directly responsible for creating the conditions that led to the market crash of 08/09.
The rally last April was pushed much higher than it would normally have risen by the forces unleashed during QE1. The end result; the correction when it finally came was much more severe than it would have been normally, even including a mini-crash in May.
QE2 has now driven the market even further above the mean than in April. Unless the law of action and reaction has been repealed we should soon see an extreme regression to the mean event .
I believe the Fed has put into place the conditions that will bring about the end of this cyclical bull market and usher in the next leg down in the secular bear.
During the next 3 months we should see the dollar begin to collapse down into the 3 year cycle low unleashing the currency crisis we've been expecting. This will drive a massive surge in inflationary pressure that will poison the fragile recovery and send the global economy back down into the next recession. A recession that should be much worse than the last one as it will begin with economic conditions much weaker than in `07.
The last time the Fed did this it produced a brief period of prosperity by creating a real estate and credit bubble. We all know how that ended. This time I expect the party to last two years tops, which means this cyclical bull should top by March. In their ill fated attempt to get something for nothing the Fed is going to cause a currency crisis and a massive surge in global inflation.
The price we will all pay when the house of cards comes crashing down again will be multiples more expensive than last time.
Food Riots: Is Bernanke Partially to Blame?
As we know, massive popular unrest has broken out against autocratic governments in North Africa and the Arab world. Egypt is the biggest story. But to varying degrees, the people have taken to the streets in Algeria, Jordan, Libya, Morocco, and Yemen.But in addition to the apparent revolt against repressive governments, all the experts say the other main cause of unrest is record food prices. For example, former Bush advisor Dan Senor notes that Egypt is the world’s largest wheat importer. Because of skyrocketing prices, Egyptian inflation is now over 10 percent.
So I have to ask this tough question: Is Ben Bernanke’s ultra-easy QE2 money pump-priming partially to blame?
Commodities are priced in dollars, and the Fed has been overproducing dollars for more than two years. Consequently, emerging markets throughout the world — and the food sector in particular — are suffering from rising inflation.
The CRB food index is up an incredible 36 percent over the past year, including 8 percent year-to-date. Raw materials are up 23 percent over the past year. Inflation breakouts have occurred in China, various Asian Tigers, India, Brazil, and other Latin countries. Even Britain and Germany are registering higher inflation readings.
But food riots in the North Africa/Middle East area are bumping smack into long-time resentment over autocratic government.
If food is in fact the trigger for what may be a revolution in Egypt, then U.S. monetary policy has to shoulder at least some of the blame.
Ultimately, as Senor argues, a region-wide revolt against the autocrats may be healthy if it leads to greater democratization and liberalization. But the protests may spread to Saudi Arabia and Iran, with huge implications for global energy markets. And that’s where the hoped-for transition to political liberalization — with a potential backlash from radical Muslim groups — makes the story even more unpredictable.
28 Ocak 2011 Cuma
On CNBC's Kudlow Report Tonight
On CNBC's Kudlow Report tonight:MARKETS: EGYPT & THE FEAR COMMODITY TRADES: GOLD & OIL … DOES BERNANKE SHARE BLAME FOR FOOD RIOTS? CRB FOOD INDEX UP 36% OVER LAST 52 WEEKS
- Jim LaCamp, Macroportfolio Advisors Sr. VP, Portfolio Manager
- Jim Iuorio, Options Action Contributor; Director, TJM Institutional Services
- John Kilduff, Again Capital; CNBC Contributor
OVER THROW OF EGYPTIAN GOVT? -- MIDEAST CONTAGION TO SAUDIS, ETC?
- Dan Senor, Sr. Fellow for Middle East Studies Council on Foreign Relations
- Dan Goure, Vice President (fmr.Sr. Defense Analyst) Lexington Institute
MARKETS … WE SAW THE PROMISED LAND AT S&P 1300 & DOW 12,000- BUT COULDN'T GET TO IT … WHAT NEXT?
- Don Luskin, CNBC Contributor; Trend Macro Chief Investment Officer
- Tommy Belesis, Founder and CEO John Thomas Financial
- Jim LaCamp, Macroportfolio Advisors Sr. VP, Portfolio Manager
FREE MARKET FRIDAY: JOHN PAULSEN, THE $5 BILLION MAN! HOW DID HE DO IT?
- Daymond John, FUBU Founder
- Evan Newmark, "Mean Street" columnist for the online Wall Street Journal
Please join us at 7pm ET on CNBC.
U.S. GDP Rises to 3.2%, But Disappoints Some
The market is lower in early trading, on a wave of crosscurrents. There was another big round of earnings announcements last night, and most of the stocks that I follow are down on those announcements. Some of the ones giving me angst today include SNDK, F, AMZN, and MSFT.
We got a preliminary look at Q4 GDP this morning, which came in at +3.2%. That is an improvement in growth from the previous quarter's 2.6% rate, but it is below what many were looking for with a number in the 3.7% range. But this number will be subject to a couple more revisions, so it could get revised higher going forward.
The turmoil that is going on in Egypt the last couple of days is causing a bit of a flight to safety. To wit, global equities are lower while the dollar, Treasuries, oil, and gold are all higher. Oil is up to $87.15, while gold is getting a small bounce to $1327.
Asian markets were lower overnight following the news that S&P lower the debt rating for Japan. The 10-year yield is lower to 3.35%; and the volatility index (VIX) is seeing a really big spike so far, up 11% right now to the 18.0 level (right where its overhead 50-day average sits).
Trading comment: The market is very choppy right now, but we will have to see if the usual buying shows up this afternoon to mitigate the current declines. Right now, the S&P 500 is at 1287, which is down 1% on the day but would still leave it up for the week. Could this be the start of a correction? Too soon to say for sure, but anything is possible. That said, I am looking to add to some big-cap industrials that are pulling back from recent breakouts.
long F, SNDK, VIX calls
We got a preliminary look at Q4 GDP this morning, which came in at +3.2%. That is an improvement in growth from the previous quarter's 2.6% rate, but it is below what many were looking for with a number in the 3.7% range. But this number will be subject to a couple more revisions, so it could get revised higher going forward.
The turmoil that is going on in Egypt the last couple of days is causing a bit of a flight to safety. To wit, global equities are lower while the dollar, Treasuries, oil, and gold are all higher. Oil is up to $87.15, while gold is getting a small bounce to $1327.
Asian markets were lower overnight following the news that S&P lower the debt rating for Japan. The 10-year yield is lower to 3.35%; and the volatility index (VIX) is seeing a really big spike so far, up 11% right now to the 18.0 level (right where its overhead 50-day average sits).
Trading comment: The market is very choppy right now, but we will have to see if the usual buying shows up this afternoon to mitigate the current declines. Right now, the S&P 500 is at 1287, which is down 1% on the day but would still leave it up for the week. Could this be the start of a correction? Too soon to say for sure, but anything is possible. That said, I am looking to add to some big-cap industrials that are pulling back from recent breakouts.
long F, SNDK, VIX calls
27 Ocak 2011 Perşembe
On CNBC's Kudlow Report Tonight
On CNBC's Kudlow Report tonight:MARKETS: RISING PRICE PRESSURES; COMMODITIES CRACKUP; EARNINGS; S&P HITS 1300; DOW 12,000 - BRACE FOR CORRECTION OR BULL RUN?
- John Rutledge, Fmr. Reagan Economic Advisor; Chief Advisor to Governor of Haidian District in Beijing; Honorary Prof, Chinese Academy of Sciences
- David Dietze, Point View Financial Services; President and Chief Investment Strategist
- Todd Schoenberger, Managing Director LandColt Trading
SHOULD MICROSOFT BE BROKEN UP?
- CNBC’s Herb Greenberg
- Quentin Hardy, Forbes National Editor
- Roger Kay, Endpoint Technologies Associates President
GLOBAL DEBT THREAT … S&P downgrades Japanese debt; U.S. deficit outlook darkens; EU sovereign debt remains a threat
- David Goldman, Senior Editor First Things Magazine; Fmr. Wall St. Economist: Bear Stearns & Credit Suisse
- Michael Pento, Euro Pacific Capital Senior Economist; Euro Pacific Capital Vice President Managed Products
GLOBAL UNREST: ANTI-GOVERNMENT PROTESTS IN EGYPT
- Richard Engel, NBC News - Cairo, Egypt
CAN OBAMA DELIVER ON CORPORATE TAX REFORM?
- Scott Hodge, Tax Foundation President
- Ezra Klein, The Washington Post Writing Fellow
Please join us at 7pm ET on CNBC.
Earnings Reports Trump Economic Data in Early Trading
The market is higher again in early trading, with the S&P 500 briefly touching the 1300 level for the first time in more than two years.
Earnings reports continue to roll in. Some of the stocks rallying on their earnings reports include NFLX, QCOM, POT, and TSCO. Disappointing reactions to earnings can be seen in PG, T, and MUR.
For now, earnings reports are trumping any concerns about the economic data released this morning. Jobless claims for the week came in higher than expected, and durable goods orders for December fell 2.5%, far more than expected.
Asian markets were mixed overnight, with China higher. After the markets closed, Standard & Poor's downgraded Japan's debt rating to AA-. So I would expect Asian markets to selloff when they reopen.
The dollar is flat this morning. Oil prices are a bit weaker near $86.95, and gold prices are barely in positive territory at $1336.
The 10-year yield is up a little to 3.44%; and the volatility index is still low at 16.58, after trading lower yesterday.
Trading comment: I continue to see more and more breakouts, and from many different industries. Yesterday I saw big breakouts in Halliburton (HAL), Emerson (EMR), etc. And today the list is expanding. Despite any concerns about the market being extended, the strong price action can't be ignored. I want to continue to buy the leaders and avoid the laggards.
long EMR, HAL
Earnings reports continue to roll in. Some of the stocks rallying on their earnings reports include NFLX, QCOM, POT, and TSCO. Disappointing reactions to earnings can be seen in PG, T, and MUR.
For now, earnings reports are trumping any concerns about the economic data released this morning. Jobless claims for the week came in higher than expected, and durable goods orders for December fell 2.5%, far more than expected.
Asian markets were mixed overnight, with China higher. After the markets closed, Standard & Poor's downgraded Japan's debt rating to AA-. So I would expect Asian markets to selloff when they reopen.
The dollar is flat this morning. Oil prices are a bit weaker near $86.95, and gold prices are barely in positive territory at $1336.
The 10-year yield is up a little to 3.44%; and the volatility index is still low at 16.58, after trading lower yesterday.
Trading comment: I continue to see more and more breakouts, and from many different industries. Yesterday I saw big breakouts in Halliburton (HAL), Emerson (EMR), etc. And today the list is expanding. Despite any concerns about the market being extended, the strong price action can't be ignored. I want to continue to buy the leaders and avoid the laggards.
long EMR, HAL
26 Ocak 2011 Çarşamba
One-On-One with Gov. Chris Christie
Maverick New Jersey Governor Chris Christie gently whacks Obama on the budget, warns the GOP that they must deliver on spending, announces an across-the-board tax cut for New Jersey, and talks about the 2012 presidential race.
The "PLAN"
I've posted a trading "plan" for the precious metals sector in tonight's report for subscribers.
Christie: Showing Washington How to Get It Done
New Jersey Gov. Chris Christie expressed disappointment in President Obama’s failure to commit to aggressive budget cuts and entitlement reform in last night’s State of the Union speech. In a CNBC interview that will run tonight on my show, the governor contrasted his New Jersey efforts to slash spending and reform government-union pensions and health benefits with the president’s weak approach.While Mr. Christie would not reveal any specifics, he said he will unveil across-the-board tax cuts for New Jersey in his budget to be released in a few weeks. That’s a surprise.
Right now, Christie is in a slugfest with Gov. Pat Quinn of Illinois about businesses migrating to the Garden State and leaving the Land of Lincoln. While Christie acknowledged that his state ranks near the bottom of a business tax-climate index published by the Tax Foundation, he told me that the difference between New Jersey and Illinois is that Illinois is on a path of higher taxes and New Jersey is on a path of lower taxes.
The governor also continued his mantra that he is not ready to be president. I asked him if he might be ready for a draft in 12 months. He said it’s not in his heart, and added that he made a pledge to the voters of New Jersey to stay and get the job done. I mentioned that he was using the state as a laboratory of conservative reform on taxes, deficits, and entitlements -- areas that exactly mirror the federal problem. And he agreed, telling me that he’s showing them how to get it done.
The governor recently had dinner with Mitt Romney, but he cautioned that the meeting should in no way be seen as a presidential commitment. He also cited recent visits with Haley Barbour, Tim Pawlenty, and Mitch Daniels, saying they are all good governors.
On CNBC's Kudlow Report Tonight
On CNBC's Kudlow Report tonight:DOW FLIRTING WITH 12,000
- Dan Genter, RNC Genter Capital Mgmt. CEO
- Stephanie Link, TheStreet.com, Director of Research
- Brett Arends, The Wall Street Journal Columnist
WASHINGTON TO WALL STREET
BUDGET BOMB! DEFICIT EXPECTED TO HIT $1.5 TRILLION -- DID OBAMA MISS THE BOAT?
- Keith Boykin, Former Clinton White House Aide; Editor of The Daily Voice online news site; CNBC contributor
- Andy Busch, BMO Capital Markets Global Currency and Public Policy Strategist
WICKED WEATHER WATCH
- Eric Fisher, Weather Channel
EXCLUSIVE ONE-ON-ONE INTERVIEW WITH NJ GOV. CHRIS CHRISTIE
WHAT'S NEXT FOR COMMODITIES?
- Jim Rogers, Rogers Holdings Chairman
Please join us at 7pm ET on CNBC.
Sentiment Stays Bullish Ahead of FOMC Announcement
The market is higher again in early trading, following last night's State of the Union address by the President. Actually, I didn't really hear anything that was different that what we have heard before from the Administration, so I'm not sure how much weight I would put on last night's speech.
We got a solid housing report this morning, with new home sales spiking 17.5% in December, from 5.5% last month. That report likely boosted sentiment as much as anything else.
There was also another wave of earnings reports last night and this morning. Some of the positive reactions include JNPR, FTNT, and GILD, while BA saw a negative reactions in its stock.
The FOMC meets later today, but I think most investors are not expecting the message to change much. There is some debate about whether the Fed will complete its $600 billion asset purchase program, but I think this is a done deal.
Asian markets were mixed last night, with India and Australia closed. The dollar is flattish so far, while oil prices are up a bit to $86.30 and gold is lower again near $1331.
The 10-year yield is bouncing to 3.38%, within the range its been trading for the better part of the last six weeks. The VIX is down -4.5% today, back below the 17 level.
Trading comment: The S&P is back at new highs today, nearly touching the 1300 level. There is some data that shows the market sometimes tops coincident with the State of the Union Address, but that remains to be seen. The market bent a couple of times in the last few weeks, but sure hasn't broken. The stair-step market continues. I continue to be surprised by the lack of a bigger pullback, given how I think bullish sentiment has become stretched.
We got a solid housing report this morning, with new home sales spiking 17.5% in December, from 5.5% last month. That report likely boosted sentiment as much as anything else.
There was also another wave of earnings reports last night and this morning. Some of the positive reactions include JNPR, FTNT, and GILD, while BA saw a negative reactions in its stock.
The FOMC meets later today, but I think most investors are not expecting the message to change much. There is some debate about whether the Fed will complete its $600 billion asset purchase program, but I think this is a done deal.
Asian markets were mixed last night, with India and Australia closed. The dollar is flattish so far, while oil prices are up a bit to $86.30 and gold is lower again near $1331.
The 10-year yield is bouncing to 3.38%, within the range its been trading for the better part of the last six weeks. The VIX is down -4.5% today, back below the 17 level.
Trading comment: The S&P is back at new highs today, nearly touching the 1300 level. There is some data that shows the market sometimes tops coincident with the State of the Union Address, but that remains to be seen. The market bent a couple of times in the last few weeks, but sure hasn't broken. The stair-step market continues. I continue to be surprised by the lack of a bigger pullback, given how I think bullish sentiment has become stretched.
DIVERGENCES ARE BUILDING
Warning signs are starting to build. To start we have a Dow Theory non-confirmation. Usually this is a sign of distribution.
Breadth is diverging. This often happens at intermediate tops.
Emerging markets have failed to make new highs.
China, the driver of global growth appears to be in a bear market.
Oil has now broken the pattern of higher lows. The odds are high that the oil cycle has topped.
Throw in the fact that the current daily & intermediate cycles are stretching and the risks are very high on the long side at this point.
Breadth is diverging. This often happens at intermediate tops.
Emerging markets have failed to make new highs.
China, the driver of global growth appears to be in a bear market.
Oil has now broken the pattern of higher lows. The odds are high that the oil cycle has topped.
Throw in the fact that the current daily & intermediate cycles are stretching and the risks are very high on the long side at this point.
25 Ocak 2011 Salı
Mr. ‘Investment’
In his State of the Union message tonight, President Obama is likely to call for some kind of corporate tax reform. But don’t look for him to be a budget-cutter.As we know, in the name of “investment,” Mr. Obama is proposing spending increases for education, energy, and so-called infrastructure. By the way, in the last three years, education spending has gone up 209 percent, energy spending 150 percent, EPA spending 126 percent, transportation spending 71 percent, and science spending 47 percent. (Hat tip to Steve Moore of the WSJ.) Do we need more?
Centrist Democrats are not likely to agree with Obama’s new spending plans. Democratic Sen. Tom Carper of Delaware talked to me about the need for “a culture of thrift” in a recent CNBC interview. And Democratic Sen. Mark Warner of Virginia told me that he and Republican Sen. Saxby Chambliss of Georgia, along with more than 20 others, are going to co-sponsor the full spending and tax-reform plan presented by the president’s deficit commission headed by Erskine Bowles and Alan Simpson.
The best thing the president can do for competitiveness is to agree to Republican demands for much lower spending and a significant reduction in the corporate tax rate. And it will be interesting to see tonight if Obama continues to bash companies for their overseas revenues and profits — his usual mantra — or whether he accedes to territorial taxation and a repatriation tax holiday to bring foreign earnings back home where they can be invested and create jobs.
Tonight’s Republican response to Obama’s claims about the economy also will be interesting. Stocks have been surging and growth has been quickening. Fourth-quarter GDP to be reported Friday could come in around 4 percent. I would attribute this to a combination of strong private-sector corporate profits and ultra-easy Fed policy, although Obama surely will try to crow about the effectiveness of his spending-stimulus package.
Of course, the administration’s Achilles’ heel remains a sluggish employment recovery. Two years ago, when the $800 billion stimulus package was unveiled, the Obama economists predicted the unemployment rate would be 7 percent today. It’s actually 9.4 percent, even though there’s no question that the financial and economic crisis is long past.
In Rep. Paul Ryan’s Republican response tonight, and in other post-speech GOP congressional statements, it will be interesting to see the contrast between the economic plans of the two parties.
State of the Union...A Special Edition of The Kudlow Report Live from Capitol Hill
On CNBC's Kudlow Report tonight:MARKETS
- Michael Farr, Farr, Miller & Washington/CNBC Contributor
- Jim LaCamp, Macroportfolio Advisors Sr. VP, Portfolio Manager
- Keith McCullough, Founder & CEO of Hedgeye Risk Management
WILL OBAMA PROPOSE A CORPORATE TAX CUT?
- Gov. John Engler, Business Roundtable President
STATE OF SPENDING & TAXING
- Rep. Jeb Hensarling, (R) Texas; House Republican Conference Chair
- Rep. John Larson, (D) Connecticut; House Democratic Conference Chair
STATE OF THE UNION PREVIEW
- CNBC chief Washington correspondent John Harwood reports from Washington.
FEDERAL RESERVE FOCUS
Sen. Rand Paul, (R) Kentucky
MARKETS: REACT TO RAND PAUL ON FED
- Michael Farr, Farr, Miller & Washington/CNBC Contributor
- Jim LaCamp, Macroportfolio Advisors Sr. VP, Portfolio Manager
- Keith McCullough, Founder & CEO of Hedgeye Risk Management
STATE OF SPENDING & TAXING
Sen. John Thune (R) South Dakota
Please join us at 7pm ET on CNBC.
Is The Bloom Coming Off The Commodity Rose?
The market is slightly lower in early trading, as sentiment from overseas raised some yellow flags and commodity prices continue to trend lower.
There was a good economic report this morning, when the Conference Board said that consumer confidence in January spiked to an eight-month high at 60.6 (vs. expectations of 53.5). But the CaseShiller Home Price composite fell -1.6% in November as the housing market still struggles to find a bottom.
Overseas, Asian markets were mixed after India raised its key rate 25 basis points to 6.5%. In Europe, the UK's economy contracted 0.5% in Q4 after it was expected to grow. There is also concern that Spain's savings banks could need capital infusions.
The dollar is bouncing on these concerns, and that is weighing on commodities further. The CRB Commodity index is near a 3-week low, with oil prices down to $86.75 and gold all the way back near $1328. It certainly looks like the uptrend in gold is broken for the time being.
Earnings reports continue to roll in, and the reactions in stocks have been mixed. Some positive reactions today include TRV, BHI, and AMGN. But on the flip side we got some disappointing reactions in MMM and JNJ.
The 10-year yield is flat near 3.41%; and the volatility index is up +1.9% to 18.0, hovering just below its overhead 50-day average.
Trading comment: Tough juncture right here. There are several yellow flags on the horizon, with tightenings in Asia and commodity-related stocks rolling over. Also throw in the negative reactions we've seen in former market leading cloud computing and networking stocks. But other names like AAPL and GOOG have held in, and other sectors seem to be holding up as well, so the overall market is still barely off its recent highs. As such, I still think it is probably okay to buy the dips as well as those stocks who have already reported strong earnings.
long AAPL, GOOG
There was a good economic report this morning, when the Conference Board said that consumer confidence in January spiked to an eight-month high at 60.6 (vs. expectations of 53.5). But the CaseShiller Home Price composite fell -1.6% in November as the housing market still struggles to find a bottom.
Overseas, Asian markets were mixed after India raised its key rate 25 basis points to 6.5%. In Europe, the UK's economy contracted 0.5% in Q4 after it was expected to grow. There is also concern that Spain's savings banks could need capital infusions.
The dollar is bouncing on these concerns, and that is weighing on commodities further. The CRB Commodity index is near a 3-week low, with oil prices down to $86.75 and gold all the way back near $1328. It certainly looks like the uptrend in gold is broken for the time being.
Earnings reports continue to roll in, and the reactions in stocks have been mixed. Some positive reactions today include TRV, BHI, and AMGN. But on the flip side we got some disappointing reactions in MMM and JNJ.
The 10-year yield is flat near 3.41%; and the volatility index is up +1.9% to 18.0, hovering just below its overhead 50-day average.
Trading comment: Tough juncture right here. There are several yellow flags on the horizon, with tightenings in Asia and commodity-related stocks rolling over. Also throw in the negative reactions we've seen in former market leading cloud computing and networking stocks. But other names like AAPL and GOOG have held in, and other sectors seem to be holding up as well, so the overall market is still barely off its recent highs. As such, I still think it is probably okay to buy the dips as well as those stocks who have already reported strong earnings.
long AAPL, GOOG
24 Ocak 2011 Pazartesi
On CNBC's Kudlow Report Tonight
On CNBC's Kudlow Report tonight:MARKETS: WHAT'S NEXT - DOW 11,000 OR DOW 13,000?
- Barry Ritholtz, Fusion IQ; CEO, Director of Equity Research
- Mike Holland, Chairman of Holland & Company
- Harry Rady, CEO Rady Asset Management
GLOBAL INFLATION FEAR RISING
- Peter Schiff, President, Euro Pacific Capital
- Dan Greenhaus, Miller Tabak & Co Chief Economic Strategist
STATE OF THE UNION PREVIEW
- CNBC’s Eamon Javers reports.
OBAMA VS. GOP ON SPENDING; OBAMA TURNS LEFT ON SPENDING - CATERING TO AFL-CIO & TEACHER UNIONS?
- Robert Reich, Fmr. Labor Secretary; "Aftershock: The Next Economy & America's Future" author; CNBC Contributor; Univ. of CA., Berkeley, Prof.
- Steve Moore, Senior Economics Writer for WSJ Editorial Board; "Return to Prosperity" co-author
RUSSIAN TERROR ATTACK IMPLICATIONS
- Frank Gaffney, Center for Security Policy President; Former Asst Secy of Defense for International Security Policy Under Reagan
- Larry Korb, Ctr for American Progress Sr Fellow; Fmr. Asst. Defense Secy during Reagan Admin; Council on Foreign Relations member
Please join us at 7pm ET on CNBC.
Monday Morning Musings
The market is trading higher in early trading, despite some weakness overseas as well as in some areas of the tech market in the US.
Energy and materials stocks are leading the action so far, while networking and cloud computing stocks are lagging. The action in some leading stocks like FFIV, APKT, ARUN, RVBD, VMW, etc. lends itself to the notion that the market has more of a correction ahead of it.
Asian markets were mixed overnight, with some markets like Thailand down 4% overnight on fears of rising inflation.
The dollar is slightly lower, which is having a mixed effect on commodities. Cotton and lumber futures were both limit up this morning, while oil and gold prices were both lower to $87.70 and $1343, respectively.
There were a couple of earnings reports this morning worth noting. McDonalds (MCD) reported in-line results while Halliburton (HAL) topped estimates and its stock is higher. There are plenty more earnings reports out this week, as well as the FOMC meeting and an advance look at Q4 GDP.
The 10-year yield is lower to 3.38%; and the VIX is also lower near 18.20.
Trading comment: On Friday, we sold our VMWare (VMW) position ahead of earnings today. That looks to be a good call so far as cloud computing and networking stocks are under severe selling pressure today. After the horrible reaction in FFIV last week to its earnings report, I didn't want to take any chances. These stocks likely have a multi-week correction ahead of them, but I suspect they will be back at new highs at some point later this year.
The overall market has barely pulled back, but if the action in these leading stocks is a precursor, then we could see a broader correction unfold. I am not doing any forced selling, but in the areas where we have taken profits recently, I want to be patient about putting the money back to work.
long HAL, MCD
Energy and materials stocks are leading the action so far, while networking and cloud computing stocks are lagging. The action in some leading stocks like FFIV, APKT, ARUN, RVBD, VMW, etc. lends itself to the notion that the market has more of a correction ahead of it.
Asian markets were mixed overnight, with some markets like Thailand down 4% overnight on fears of rising inflation.
The dollar is slightly lower, which is having a mixed effect on commodities. Cotton and lumber futures were both limit up this morning, while oil and gold prices were both lower to $87.70 and $1343, respectively.
There were a couple of earnings reports this morning worth noting. McDonalds (MCD) reported in-line results while Halliburton (HAL) topped estimates and its stock is higher. There are plenty more earnings reports out this week, as well as the FOMC meeting and an advance look at Q4 GDP.
The 10-year yield is lower to 3.38%; and the VIX is also lower near 18.20.
Trading comment: On Friday, we sold our VMWare (VMW) position ahead of earnings today. That looks to be a good call so far as cloud computing and networking stocks are under severe selling pressure today. After the horrible reaction in FFIV last week to its earnings report, I didn't want to take any chances. These stocks likely have a multi-week correction ahead of them, but I suspect they will be back at new highs at some point later this year.
The overall market has barely pulled back, but if the action in these leading stocks is a precursor, then we could see a broader correction unfold. I am not doing any forced selling, but in the areas where we have taken profits recently, I want to be patient about putting the money back to work.
long HAL, MCD
50% PLEASE
I've noted in the nightly updates that gold is now deep in the timing band for a daily cycle low. My best guess is gold should tag the 38% Fibonacci retracement before bouncing out of that short term bottom.
However the stock market still hasn't moved down into it's yearly cycle low yet.Both gold and stocks are now due for a major yearly cycle low. This is a much higher degree correction than a daily or intermediate cycle pullback. So the corrective moves in both gold and stocks should be very severe. I would be very surprised if both don't correct at least to the 50% retracement.
Notice on the gold chart how the rally out of the yearly cycle low in the dollar halted (temporarily) the C-wave rally in gold.
The dollar is now moving into the timing band for another short term bottom. I expect the rally out of that coming bottom to drive the final leg down in gold and to power the move down into the yearly cycle low for stocks.
While I fully expect gold to bounce off the 38% retracement I doubt that will be the end of the correction. A yearly cycle low usually has to do more damage than that, especially if it's coupled with the massive selling pressure of stocks also moving down into a yearly cycle low.
Those that want to speculate could enter precious metal positions at around $1325, but be prepared to get stopped out if gold dips back below that point next week on it's way down to $1290.
Personally I'm going to wait until I think the stock market has bottomed before I'm ready to jump back into heavy positions.
However the stock market still hasn't moved down into it's yearly cycle low yet.Both gold and stocks are now due for a major yearly cycle low. This is a much higher degree correction than a daily or intermediate cycle pullback. So the corrective moves in both gold and stocks should be very severe. I would be very surprised if both don't correct at least to the 50% retracement.
Notice on the gold chart how the rally out of the yearly cycle low in the dollar halted (temporarily) the C-wave rally in gold.
The dollar is now moving into the timing band for another short term bottom. I expect the rally out of that coming bottom to drive the final leg down in gold and to power the move down into the yearly cycle low for stocks.
While I fully expect gold to bounce off the 38% retracement I doubt that will be the end of the correction. A yearly cycle low usually has to do more damage than that, especially if it's coupled with the massive selling pressure of stocks also moving down into a yearly cycle low.
Those that want to speculate could enter precious metal positions at around $1325, but be prepared to get stopped out if gold dips back below that point next week on it's way down to $1290.
Personally I'm going to wait until I think the stock market has bottomed before I'm ready to jump back into heavy positions.
22 Ocak 2011 Cumartesi
GE’s Immelt on the Hot Seat
Can GE CEO Jeffrey Immelt talk President Obama into a major corporate tax cut? Immelt has been appointed to the new Council on Jobs and Competitiveness, which replaces the disbanded Paul Volcker Economic Recovery Advisory Board. Immelt was a member of that original board. Now he has a more elevated position in the Obama 2.0, allegedly pro-business, move-to-the-center Clintonesque White House.Regarding the new President Obama, I am still trust but verify. But yes, of course, Jeff Immelt is a businessman through and through. He is a trustee of the Ronald Reagan Presidential Foundation board, while GE is a big sponsor of the Reagan Centennial Celebration. (Recall that the Gipper worked for GE as a spokesman and television host from 1954 through 1962.) He’s also a registered Republican who contributed to both Hillary Clinton and John McCain during the 2008 campaign. And last year, he harshly criticized Obama at a dinner in Italy, where he basically said: Obama doesn’t like business, and business doesn’t like Obama.
But what goes around comes around. Many business people wanted senior executives in the White House, and now they have two — with GE’s Immelt joining William Daley, the former banker and new chief of staff.
GE had a rough time of it during the Great Recession. But in recent quarters it has turned quite profitable; its stock just hit a 52-week high. In an op-ed for the Washington Post, Immelt set out his agenda for continued economic recovery. He would focus on manufacturing and exports, free trade, and innovation.
So where’s the corporate tax cut? Well, Immelt offered one short line about “a sound and competitive tax system . . .” No, not exactly a ringing call to action. But I believe he will, in fact, push for corporate tax reform.
There’s nothing more important than full-fledged corporate tax-rate reduction in order to maximize U.S. economic growth. At 35 percent, our highest-in-the-world corporate tax should be knocked all the way down towards 20 percent.
And businesses taxes should be made territorial, not worldwide, in order to stop the double-taxation of foreign earnings. Business revenues held overseas, now reported to be about $1 trillion, should be repatriated to the U.S. with a 5 percent tax holiday.
Businesses also should enjoy permanent 100 percent cash expensing for new investment in plant, equipment, and research. Studies have shown that this combination by far offers the biggest bang for the buck in terms of additional GDP and job-creation.
And yes, broaden the base with loophole closers. A lower tax rate and full expensing is much more important than all those K Street credits and deductions.
At the Republican House retreat in Baltimore a week ago, I argued for a two-track, pro-growth fiscal plan. Reform the business tax (Rep. Dave Camp) and bring federal spending as a share of the economy down to 20 percent from the current 25 percent (Rep. Paul Ryan). My friend and mentor Arthur Laffer, my co-panelist at the retreat, argued strongly that reduced spending is itself a tax cut. On this point, Laffer, Alan Reynolds, and Dick Armey have all recently cited the late Nobelist Milton Friedman, who held that government spending is the broadest tax on the overall economy.
And let’s add a rollback of Obamacare and a return to a reliable King Dollar (referenced to gold) as additional pro-growth measures. Finally, let’s enact drill, drill, drill. More energy across the board — “all of the above” — is another great job creator.
But my former boss Jeff Immelt (GE is selling NBC Universal to Comcast) can play a key role in a hugely important corporate tax cut. This will incentivize firms to stay at home instead of going overseas. It will be a huge job-creator, reducing unemployment and playing an important part in deficit reduction. According to the Congressional Budget Office, a 1 percentage point increase in GDP above the meager 2.5 percent baseline would lower the ten-year budget gap by nearly $3 trillion.
Growth solves a lot of problems. Can Mr. Immelt get the job done?
Send the Ultimate Message to China
A number of people, myself included, have looked to Ronald Reagan’s Cold War triumph over the Soviet Union as a possible solution to Red China’s rising arrogance.Times are different today.
But Reagan argued forcefully that domestic economic growth is the best weapon against foreign threats.
During the Cold War ’80s, with the U.S. economy booming, we literally produced the goods that the Soviets did not. Today, while China needs to be challenged on its unfair trading practices, the U.S. also must adopt credible, pro-growth policies — including limited government, lower spending, fewer regulations, low tax rates, and a sound King Dollar.
That will send the ultimate message to China: Do not dare tread on the U.S.!
Pro-Union Is Not Pro-Regulatory Reform
President Obama pledged allegiance to the free-market this week, arguing for a 21st Century regulatory system that is balanced and pro-growth.
Fine.
But one thing he didn’t mention is his unbalanced policy that favors unions over business.
The Department of Labor is full of former union executives and short on business people. The DOL policy is to promote high rates of union membership. That still includes card check, which would deny the secret ballot to workers in unionization quarrels. It also includes a neighborhood-watch-style system to investigate wage and hour violations by companies, all while there is no investigation of rampant union fraud.
The current Solicitor of Labor, Patricia Smith, specialized in corporate intimidation when she served in a similar post in New York. And Labor Secretary Hilda Solis has turned fraud investigators at the DOL into business-intimidation tools.
I’m not against private unions. But there must be a hands-off attitude, rather than a full-scale, pro-union push.
Right now, the Obama administration is totally pro-union and anti-business. That needs to be fixed if the president is to make good on his regulatory-reform promise.
Fine.
But one thing he didn’t mention is his unbalanced policy that favors unions over business.
The Department of Labor is full of former union executives and short on business people. The DOL policy is to promote high rates of union membership. That still includes card check, which would deny the secret ballot to workers in unionization quarrels. It also includes a neighborhood-watch-style system to investigate wage and hour violations by companies, all while there is no investigation of rampant union fraud.
The current Solicitor of Labor, Patricia Smith, specialized in corporate intimidation when she served in a similar post in New York. And Labor Secretary Hilda Solis has turned fraud investigators at the DOL into business-intimidation tools.
I’m not against private unions. But there must be a hands-off attitude, rather than a full-scale, pro-union push.
Right now, the Obama administration is totally pro-union and anti-business. That needs to be fixed if the president is to make good on his regulatory-reform promise.
21 Ocak 2011 Cuma
On CNBC's Kudlow Report Tonight
On CNBC's Kudlow Report tonight:MARKETS: EUROPEAN STOCKS SOAR…GOLD AT A TWO MONTH LOW; GREAT DAY FOR GE'S JEFF IMMELT; EYE ON THE BANKS
- Keith McCullough, Founder & CEO of Hedgeye Risk Management
- Lee Munson, Portfolio Asset Management Chief Investment Officer
- Don Luskin, CNBC Contributor; Trend Macro Chief Investment Officer
RED CHINA RISING…CHINA’S DEAL TO BUY U.S. BANK
- Mark Callabria, CATO Director of Financial Regulation Studies
- Peter Navarro, "The Coming China Wars" Author; University Of California - Irvine Business Professor
KUDLOW COMMENTARY…PRESIDENT OBAMA TAKES ANOTHER STEP TO THE RIGHT BY NAMING GE'S JEFF IMMELT TO HEAD NEW WHITE HOUSE JOBS PANEL
FREE MARKET FRIDAY
THIS WEEK'S HOT TOPICS:
1. OBAMA'S GREAT LEAP RIGHT
2. GOOGLE VS. FACEBOOK - IS ERIC SCHMIDT OUT BECAUSE OF HIS AGE?
3. "SKINS" - MTV PORN?
- Chrystia Freeland, Thomson Reuters Global Editor at Large
- Kellyanne Conway, The Polling Company President & CEO
- Zach Karabell, CNBC's Fast Money Contributor River Twice Research President
TUNISIA IN TURMOIL
- Richard Engel, NBC News
Please join us at 7pm ET on CNBC.
Google Trounces Estimates, Shuffles Its Board
The market is higher in early trading, although the Nasdaq is lagging again, and looking like it might give up some of its early gains.
Google (GOOG) reported very strong earnings last night, above expectations, but also announced that CEO Eric Schmidt was move to the Chairman role and Larry Page would assume the CEO role. Not sure if that is the problem, but the stock opened nicely higher this morning and has since retraced all of its early gains. Not inspiring price action.
Intuitive Surgical (ISRG) also reported a blowout quarter, and its stock is 14% higher. GE was also very solid, and enjoying a nice 5.5% pop. Bank of America (BAC) was a little light, and the stock is down 2% so far.
Asian markets were mixed overnight, with China bouncing but most other countries lower. The dollar is weak again today, but commodities are mixed. Cotton futures were limit up this morning, but gold prices are down near $1339 and oil prices are flat around $89.50.
The 10-year yield is lower to 3.42%; and the volatility index was lower this morning but is climbing back towards positive territory.
Trading comment: The market opened sharply lower yesterday, but once again was "saved" and rallied into the close. That made for another small decline overall. This morning, the action is kind of the reverse, where the market opened higher and has been fading ever since. Most leading growth stocks corrected hard yesterday and are not showing much of a bounce today. This tells me that the correction likely has further to go, probably both in terms of time as well as price.
The market is set to have its first down week since November. Pretty surprising. And earnings season remains in high gear next week. Rest up.
long BAC, GOOG, VIX
Google (GOOG) reported very strong earnings last night, above expectations, but also announced that CEO Eric Schmidt was move to the Chairman role and Larry Page would assume the CEO role. Not sure if that is the problem, but the stock opened nicely higher this morning and has since retraced all of its early gains. Not inspiring price action.
Intuitive Surgical (ISRG) also reported a blowout quarter, and its stock is 14% higher. GE was also very solid, and enjoying a nice 5.5% pop. Bank of America (BAC) was a little light, and the stock is down 2% so far.
Asian markets were mixed overnight, with China bouncing but most other countries lower. The dollar is weak again today, but commodities are mixed. Cotton futures were limit up this morning, but gold prices are down near $1339 and oil prices are flat around $89.50.
The 10-year yield is lower to 3.42%; and the volatility index was lower this morning but is climbing back towards positive territory.
Trading comment: The market opened sharply lower yesterday, but once again was "saved" and rallied into the close. That made for another small decline overall. This morning, the action is kind of the reverse, where the market opened higher and has been fading ever since. Most leading growth stocks corrected hard yesterday and are not showing much of a bounce today. This tells me that the correction likely has further to go, probably both in terms of time as well as price.
The market is set to have its first down week since November. Pretty surprising. And earnings season remains in high gear next week. Rest up.
long BAC, GOOG, VIX
20 Ocak 2011 Perşembe
On CNBC's Kudlow Report Tonight
On CNBC's Kudlow Report tonight:MARKETS: CHINA CAUSING A COMMODITY CRACK-UP? IS CHINA A RED VAMPIRE SQUID?...FOREIGN INFLATION - WILL WE CATCH THE VIRUS? … EYE ON TECHNOLOGY STOCKS … POSITIVE ECONOMIC DATA
- Mike Ozanian, Forbes Executive Editor
- Michael Cuggino, Permanent Portfolio Family of Funds President & Portfolio Manager
- Jim Iuorio, Director, TJM Institutional Services; Options Action Contributor
SHAKE UPS AT TWO TECH GIANTS: HP & GOOGLE
- CNBC’s Herb Greenberg has the full report.
HOW WOULD A PRESIDENT DANIELS HANDLE CHINA? WHAT'S HIS STATE FISCAL FIX? HOW ABOUT HEALTHCARE?
- Gov. Mitch Daniels (R-Indiana) will join us.
RED CHINA VAMPIRE SQUID RISING? ARE WE LETTING CHINA GRAB ALL THE WORLD'S OIL?
- T. Boone Pickens, Legendary Texas Oilman; BP Capital CEO
- Gordon Chang , "The Coming Collapse of China" Author
BIGGEST MAFIA BUST IN NY HISTORY; RED CHINA RISING…GIULIANI 2012 WHITE HOUSE RUN?
-Rudy Giuliani , (R) Former Presidential Candidate; Giuliani Partners Chairman & CEO; former New York City Mayor
TUNISIA IN TURMOIL
- Richard Engel from NBC News will join us from Tunis, Tunisia.
Please join us at 7pm ET on CNBC.
Cloud Computing Stocks Selloff Hard As Market Pulls Back
The market is pulling back further today, which should not be surprising to anyone who has been reading our concerns about the market being overbought and extended, and sentiment becoming too complacent.
Last night, F5 Networks (FFIV) reported earnings that were pretty solid, but guidance was only in-line. When you have a high-flying growth stock, the company has to consistently raise earnings guidance to keep the momentum going. Any in-line guidance is not going to be greeted well by investors, and today's action demonstrates that. FFIV is down -20% today, and dragging down all cloud computing related stocks with it. It is basically tainting anything network related.
EBAY was a bright spot in earnings, but its not enough to help today. Morgan Stanely (MS) also reported solid earnings, and that is helping boost a few financial stocks.
Asian markets were hit hard overnight, led down by China. Q4 GDP in China grew +9.8%, an acceleration from last quarter. This has caused increased concern that tighter monetary policy will be implemented to cool the overheating economy. China finished down nearly -3% last night.
There were some better than expected economic reports today. Existing home sales for December increased 12.3%, and jobless claims fell from the prior week. But investors are in profit taking mode today, and that is overshadowing any positive news.
Commodities are also getting hit, with gold prices down to $1345, and oil prices falling back to $89.25.
The 10-year yield is higher at 3.41%; and the volatility index (VIX) is spiking 7% to 18.50, and testing its overhead 50-day resistance.
Trading comment: I was early in calling for a correction, but timing market tops is probably the most difficult part of investing. That said, this looks to me like it could be the start of a much needed correction. It's okay to pick at things on the way down, but all corrections take time to complete themselves. So let stocks consolidate and form new bases. When stocks begin to breakout from those consolidations to new highs, that will be the sign to get more aggressive. Patience.
long FFIV, VIX calls
Last night, F5 Networks (FFIV) reported earnings that were pretty solid, but guidance was only in-line. When you have a high-flying growth stock, the company has to consistently raise earnings guidance to keep the momentum going. Any in-line guidance is not going to be greeted well by investors, and today's action demonstrates that. FFIV is down -20% today, and dragging down all cloud computing related stocks with it. It is basically tainting anything network related.
EBAY was a bright spot in earnings, but its not enough to help today. Morgan Stanely (MS) also reported solid earnings, and that is helping boost a few financial stocks.
Asian markets were hit hard overnight, led down by China. Q4 GDP in China grew +9.8%, an acceleration from last quarter. This has caused increased concern that tighter monetary policy will be implemented to cool the overheating economy. China finished down nearly -3% last night.
There were some better than expected economic reports today. Existing home sales for December increased 12.3%, and jobless claims fell from the prior week. But investors are in profit taking mode today, and that is overshadowing any positive news.
Commodities are also getting hit, with gold prices down to $1345, and oil prices falling back to $89.25.
The 10-year yield is higher at 3.41%; and the volatility index (VIX) is spiking 7% to 18.50, and testing its overhead 50-day resistance.
Trading comment: I was early in calling for a correction, but timing market tops is probably the most difficult part of investing. That said, this looks to me like it could be the start of a much needed correction. It's okay to pick at things on the way down, but all corrections take time to complete themselves. So let stocks consolidate and form new bases. When stocks begin to breakout from those consolidations to new highs, that will be the sign to get more aggressive. Patience.
long FFIV, VIX calls
19 Ocak 2011 Çarşamba
Only Reality Is At Hand - All Else Is Illusion
Now I'm in Phoenix, looking for a ride to Moab, Utah or thereabouts.
There are photos to share, but I can't do it on this ASU public computer, so maybe I can share them later.
From Slabs to Fee Nicks and Knacks
I thought I was parked in Slab City for a while. But my new friend, Claire, talked me into hitching out with her at the last minute.
I was just feeling I was getting to know Slab City and meet some really, really interesting folks, so it feels like I left something undone there. I guess that means I'll be back there sometime.
Claire is in her early 20s, pleasant, easy-going, and good-looking, with anarchist ideals, loving to philosophize and sing with the guitar. I had, incidentally, found a book of folk music from around the world lying in the desert near Slab City, so we've been learning songs from it since.
Claire and I got a ride to Brawley with a Slabs resident. That afternoon we tried hitching east on 78 to no avail. So we hit some Brawley dumpsters, harvested feral dates, and went to stay in the abandoned warehouse I'd slept in on my way to Slab City. We played guitar and sang until we couldn't stay awake any longer.
The next day we tried hitching most the day. Only one in thousands picks up hitch-hikers in southern Cali. But Claire and I kept ourselves entertained with singing and philosophising. Finally a young dude named Dan gave us a ride to Holbrook. Dan was from a farming family and was a student at a Christian college in eastern Texas, at home around Holbrook for the holidays. He said he wanted to be a missionary helping prostitutes in developing countries to escape their plight. He let us off at I-8 on a ramp at which nary a car passed.
We decided it was futile hitching there. According to our map, El Centro was 5 miles back, so we walked west again, gorging on the plethora of dates on the way. We learned my map was bogus, and we ended up walking 15 miles to El Centro. We had thought for sure we could be in Phoenix by now, and Claire had classes there to attend, so she called her parents who bought us bus tickets to Phoenix with her Christmas money. Yeah, I decided to accept the ticket, a bit disappointed, but very very very grateful to finally be getting out of southern Cali.
Phoenix Habitation
Claire told me I could stay at her house the winter if I wanted, though I'm feeling an urge to finally go back to Moab, despite that it's cold there and warm here. She has 3 other room-mates. I decided to sleep in the garage where pigeons enter and greet me every morning, and where I can practice guitar unabashedly.
My second cousin, Scott, also lives in Phoenix, and I've gotten to see him for the first time in some 25 years! He was a teenager when I last saw him! He calls me Danny and I call him Scotty.
Claire and her roomies are way generous and share everything, but I've been able to also forage tons of food. Oranges grow everywhere, as well as some dates, pecans, and edible acorns that don't need processing. For greens I've been eating lots of mallow, which grows all over the US in urban areas. Of course there's the usual urban foraging in dumpsters, too.
Pondering My Role
I've been pondering my role in community these days. My moneyless comrades, Mark Boyle, in the UK, and Heidemarie Schwermer in Germany are more of community movers than I. Mark's book, The Moneyless Man, is out and so is Heidemarie's movie, Living Without Money. The proceeds from Mark's book are going to buying some land to start a moneyless community, and I think Heidemarie's movie's proceeds are going to charity. They have both already previously started their own projects to motivate community participation in moneyless living (see their links to the right). They inspire me to do similar, but I ask, what? We each have different paths, different functions.
I've sometimes toyed with the idea of helping start a moneyless community, mostly because I want to be able to offer something to the many people with families and kids who ask me what they should do to live moneyless. But, in my path, I feel totally resistant about purchasing any kind of land to start such a thing, even if it means I don't accept any proceeds. A big part of my philosophy is to live in this world as if it is already moneyless community, and actually it really is. It's a matter of bringing to light and cultivating what's already here, at hand: freely giving and freely receiving that is the True Nature of every human already existing, at hand.
Also, I'm realizing my path and my philosophy is Pot Luck. Let me explain.
Pot Lucky Visions
A pot luck is where people bring food already at hand (the luck of the pot) together and share it. According to the original idea, you don't buy anything, you use what is already at hand by "luck." By mystical coincidence* it is related to the Native American potlach, where people regularly brought goods at hand together to give away for the shear pleasure of giving away, to maintain egalitarian community [*It seems the word potluck existed in Europe long before anybody heard of the Native American potlach].
Okay, sometimes I accept something somebody buys me, albeit reluctantly, like the bus ticket. I like it better, it's more magical, when it's something already at hand. "The Kingdom of Heaven is at hand." For me personally, if it's not at hand, it's not the Kingdom of Heaven, and it's better and more magical and funner to do without it.
Last night I was brainstorming about starting moneyless community using what is at hand, without having to exchange money to start it, or to even pay taxes. "Is this possible?" My doubting Thomas side asks.
Why Buy Farmland?
What if we totally revived the idea of the Victory Garden of the Depression era and took it to new levels?
Is there any way to take land that is already owned, already at hand, and share it? Maybe for you, right now, totally giving up land is too radical. What if simply digging up your wasteful, unsustainable lawn and opening up your yard to community gardening to feed people for free could be your contribution! Maybe if you don't have time or desire to work it you could open it up to people who do.
Why Buy Habitation Land?
Then I thought about churches. This may be the one doorway in the USA to make this vision possible. To my understanding, churches don't pay taxes on property used for religious purposes, not used for profit, and I don't think they have to go through any 501(c)(3) fee hoops that non-profit institutions go through. I once heard of some folks who declared their community house a church and became tax free. I need help with this from you folks out there who know more about this than I.
I'm Calling For Your Help
Churches all over this land own land, already tax free, at hand. What if we called for any of those thousands of churches to consider doing something radical and not just hearing and talking, but acting on the teachings of their own faith, creating a communal space in which nobody owns anything but everyone shares all things in common?
If a church doesn't want to partake in this Pot Luck, what about going into the hi-ways and bi-ways and asking non-religious people to this Supper? What if regular religious or non-religious people who own houses and land hear the call and are inspired enough to give up their ownership to this vision, declaring it a "church?"
Yes, what if we could slide outside the money game without buying anything, without searching for anything, but simply by using what is at hand, Here and Now?
We have all these resources at hand that are locked up, that we are not using for Life. We have dead religion at hand that neither the "religious" or the "non-religious" use in practice. The religious are asleep to it and the non-religious are so repulsed by religious hypocrisy they won't touch it with a 10-foot pole. We have a dead constitution at hand that neither the "patriot" nor the "rebel" use in practice, for the same reason. It could provide this door to make this moneyless vision possible. We have land at hand that is owned and not shared, guarded in fear and dead sterility, covered with useless lawns and structures. We have food at hand, locked up inside supermaket walls and locked inside dumpsters, destined for the landfill, even as millions of people in this world are malnourished or starving. We have neighbors at hand whom we don't even know, because we're too fearful and too busy loving everything and everybody except our neighbor, when loving our neighbor is our only requirement in life. We have everything we need at hand, but we say, "when I have enough money, enough education, enough this or that, then I'm going to do such and such good for the world." Let me let you in on a secret: if you can't do love now, what makes you think you can do love later?
Change yourselves, for the Kingdom of Heaven is at hand (Matt. 3:2).
There are photos to share, but I can't do it on this ASU public computer, so maybe I can share them later.
From Slabs to Fee Nicks and Knacks
I thought I was parked in Slab City for a while. But my new friend, Claire, talked me into hitching out with her at the last minute.
I was just feeling I was getting to know Slab City and meet some really, really interesting folks, so it feels like I left something undone there. I guess that means I'll be back there sometime.
Claire is in her early 20s, pleasant, easy-going, and good-looking, with anarchist ideals, loving to philosophize and sing with the guitar. I had, incidentally, found a book of folk music from around the world lying in the desert near Slab City, so we've been learning songs from it since.
Claire and I got a ride to Brawley with a Slabs resident. That afternoon we tried hitching east on 78 to no avail. So we hit some Brawley dumpsters, harvested feral dates, and went to stay in the abandoned warehouse I'd slept in on my way to Slab City. We played guitar and sang until we couldn't stay awake any longer.
The next day we tried hitching most the day. Only one in thousands picks up hitch-hikers in southern Cali. But Claire and I kept ourselves entertained with singing and philosophising. Finally a young dude named Dan gave us a ride to Holbrook. Dan was from a farming family and was a student at a Christian college in eastern Texas, at home around Holbrook for the holidays. He said he wanted to be a missionary helping prostitutes in developing countries to escape their plight. He let us off at I-8 on a ramp at which nary a car passed.
We decided it was futile hitching there. According to our map, El Centro was 5 miles back, so we walked west again, gorging on the plethora of dates on the way. We learned my map was bogus, and we ended up walking 15 miles to El Centro. We had thought for sure we could be in Phoenix by now, and Claire had classes there to attend, so she called her parents who bought us bus tickets to Phoenix with her Christmas money. Yeah, I decided to accept the ticket, a bit disappointed, but very very very grateful to finally be getting out of southern Cali.
Phoenix Habitation
Claire told me I could stay at her house the winter if I wanted, though I'm feeling an urge to finally go back to Moab, despite that it's cold there and warm here. She has 3 other room-mates. I decided to sleep in the garage where pigeons enter and greet me every morning, and where I can practice guitar unabashedly.
My second cousin, Scott, also lives in Phoenix, and I've gotten to see him for the first time in some 25 years! He was a teenager when I last saw him! He calls me Danny and I call him Scotty.
Claire and her roomies are way generous and share everything, but I've been able to also forage tons of food. Oranges grow everywhere, as well as some dates, pecans, and edible acorns that don't need processing. For greens I've been eating lots of mallow, which grows all over the US in urban areas. Of course there's the usual urban foraging in dumpsters, too.
Pondering My Role
I've been pondering my role in community these days. My moneyless comrades, Mark Boyle, in the UK, and Heidemarie Schwermer in Germany are more of community movers than I. Mark's book, The Moneyless Man, is out and so is Heidemarie's movie, Living Without Money. The proceeds from Mark's book are going to buying some land to start a moneyless community, and I think Heidemarie's movie's proceeds are going to charity. They have both already previously started their own projects to motivate community participation in moneyless living (see their links to the right). They inspire me to do similar, but I ask, what? We each have different paths, different functions.
I've sometimes toyed with the idea of helping start a moneyless community, mostly because I want to be able to offer something to the many people with families and kids who ask me what they should do to live moneyless. But, in my path, I feel totally resistant about purchasing any kind of land to start such a thing, even if it means I don't accept any proceeds. A big part of my philosophy is to live in this world as if it is already moneyless community, and actually it really is. It's a matter of bringing to light and cultivating what's already here, at hand: freely giving and freely receiving that is the True Nature of every human already existing, at hand.
Also, I'm realizing my path and my philosophy is Pot Luck. Let me explain.
Pot Lucky Visions
A pot luck is where people bring food already at hand (the luck of the pot) together and share it. According to the original idea, you don't buy anything, you use what is already at hand by "luck." By mystical coincidence* it is related to the Native American potlach, where people regularly brought goods at hand together to give away for the shear pleasure of giving away, to maintain egalitarian community [*It seems the word potluck existed in Europe long before anybody heard of the Native American potlach].
Okay, sometimes I accept something somebody buys me, albeit reluctantly, like the bus ticket. I like it better, it's more magical, when it's something already at hand. "The Kingdom of Heaven is at hand." For me personally, if it's not at hand, it's not the Kingdom of Heaven, and it's better and more magical and funner to do without it.
Last night I was brainstorming about starting moneyless community using what is at hand, without having to exchange money to start it, or to even pay taxes. "Is this possible?" My doubting Thomas side asks.
Why Buy Farmland?
What if we totally revived the idea of the Victory Garden of the Depression era and took it to new levels?
Is there any way to take land that is already owned, already at hand, and share it? Maybe for you, right now, totally giving up land is too radical. What if simply digging up your wasteful, unsustainable lawn and opening up your yard to community gardening to feed people for free could be your contribution! Maybe if you don't have time or desire to work it you could open it up to people who do.
Why Buy Habitation Land?
Then I thought about churches. This may be the one doorway in the USA to make this vision possible. To my understanding, churches don't pay taxes on property used for religious purposes, not used for profit, and I don't think they have to go through any 501(c)(3) fee hoops that non-profit institutions go through. I once heard of some folks who declared their community house a church and became tax free. I need help with this from you folks out there who know more about this than I.
I'm Calling For Your Help
Churches all over this land own land, already tax free, at hand. What if we called for any of those thousands of churches to consider doing something radical and not just hearing and talking, but acting on the teachings of their own faith, creating a communal space in which nobody owns anything but everyone shares all things in common?
If a church doesn't want to partake in this Pot Luck, what about going into the hi-ways and bi-ways and asking non-religious people to this Supper? What if regular religious or non-religious people who own houses and land hear the call and are inspired enough to give up their ownership to this vision, declaring it a "church?"
Yes, what if we could slide outside the money game without buying anything, without searching for anything, but simply by using what is at hand, Here and Now?
We have all these resources at hand that are locked up, that we are not using for Life. We have dead religion at hand that neither the "religious" or the "non-religious" use in practice. The religious are asleep to it and the non-religious are so repulsed by religious hypocrisy they won't touch it with a 10-foot pole. We have a dead constitution at hand that neither the "patriot" nor the "rebel" use in practice, for the same reason. It could provide this door to make this moneyless vision possible. We have land at hand that is owned and not shared, guarded in fear and dead sterility, covered with useless lawns and structures. We have food at hand, locked up inside supermaket walls and locked inside dumpsters, destined for the landfill, even as millions of people in this world are malnourished or starving. We have neighbors at hand whom we don't even know, because we're too fearful and too busy loving everything and everybody except our neighbor, when loving our neighbor is our only requirement in life. We have everything we need at hand, but we say, "when I have enough money, enough education, enough this or that, then I'm going to do such and such good for the world." Let me let you in on a secret: if you can't do love now, what makes you think you can do love later?
Change yourselves, for the Kingdom of Heaven is at hand (Matt. 3:2).
On CNBC's Kudlow Report Tonight
On CNBC's Kudlow Report tonight:MARKETS: IS CHINA A GOOD INVESTMENT? IS THE CHINA GROWTH STORY THAT MIRACULOUS? INFLATION RISING IN EMERGING MARKETS...WHEN IS THE VIRUS COMING HERE? WHAT'S THE BETTER INFLATION BET? PLUS, BIG BANK EARNINGS
- Jim LaCamp, Macroportfolio Advisors Portfolio Manager & Advisor
- Jack Bouroudjian, IndexFuturesGroup.com CEO, CNBC Market Analyst
- Russ Koesterich, BlackRock iShares Group Global Chief Investment Strategist
WASHINGTON TO WALL STREET...HEALTHCARE & BUDGET
- Rep. Paul Ryan, House Ways & Means Cmte. & Ranking Member of Budget Cmte
RED CHINA RISING…HU AT THE WHITE HOUSE… U.S./CHINA REACH $45B EXPORT DEAL
- CNBC chief Washington correspondent John Harwood reports from the White House.
- Adm. Joseph Prueher; U.S. Navy (Ret.)
- Donald Trump, Trump Organization Chairman & President
CALIFORNIA IN CRISIS…JERRY BROWN WANTS REDEVELOPMENT MONEY BACK
CNBC’s Jane Wells reports.
DISMANTLING OBAMACARE
- Igor Volsky of the Center for American Progress; Health Care Research/Blogger
- Betsy McCaughey, Fmr NY Lieutenant Governor (1995-1999); Hudson Institute Health Policy Expert
Please join us at 7pm ET on CNBC.
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