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Jobless Claims Creep Up
Jobless claims creeped up a whopping 43,000 last week to a total of 474,000 last week according to U.S. Department of Labor data. This is the highest level of jobless claims since August, 2010. Because the data can frequently be volatile folks generally look at the four week moving average. That figure rose by 22,250 to 431,250. Furthermore, today’s results exceeded economist’s expectations considerably. Analysis: Importantly, the Department of Labor attached several caveats to this morning’s jobless claims figure that...
read moreWall Street is a Cult
I have to confess that I struggled with the title of today’s blog post. Let me begin to tell my story, and if any of you have any suggestions as to a better title, please feel free to leave it in the comments section of the blog. For centuries investors have moved with mob like behavior into assets in such large numbers that gigantic inflationary price bubbles are created. Then, when panic takes over there is a huge rush to the exits in mob-like fashion, too. This cycle was documented in the classic investment book, now over 160...
read moreAnecdotal Evidence of a Stock Market Fairly Valued
My regular readers might have noticed that I have not posted about the financial markets much in the last 10 days or so. My goal is to interpret the mass of news flow out there and deliver to you prescient analysis and commentary on the important news story of the day. That story is something that I feel affects investors and is worth trying to understand. Yet, there has been not much to write about. There have been no big earnings misses, other than Research In Motion (RIMM) earnings miss and big sell off, and I blogged about that. ...
read moreOsama bin Laden’s Death Changes Little, But Maybe…
While psychologically important, Osama bin Laden’s death in an Islamabad, Pakistan suburb early Sunday morning changes little. But perhaps there is a window of opportunity now for the United States to re-prioritize. Our efforts to negate the importance of al Qaeda were important, but, in my opinion, are beyond overwrought. Frankly, the intelligence organizations of Presidents George W. Bush and Barack Obama have so effectively negated al Qaeda that bin Laden had become irrelevant except as a symbol. Want proof? Name the most recent...
read moreIn Defense of Research In Motion
Research in Motion (ticker: RIMM) announced that it expects second quarter earnings per share to by between $1.30 and $1.37, rather than between the range $1.47 of $1.55 that it just promised a month ago. Stock analysts hate this kind of revision and many who follow RIMM have drastically cut their ratings on the maker of BlackBerry phones in the last day. For me this is an illustration of just how stock analysts so often get it so wrong. First, let’s just look at the numbers of the situation. RIMM has 521,120,000 common stock shares...
read moreU.S. GDP Growth Slows
U.S. Commerce Department calculations estimate that first quarter U.S. gross domestic product (GDP) growth slowed to 1.8%. By comparison, fourth quarter GDP growth was 3.1%. Analysis: Clearly this is a disappointing result. However, let’s review some of what happened in the first quarter and then compare that to burgeoning consumer confidence. 2011’s first three months was rocked by: continued slow improvement in the unemployment rate, the Egyptian crisis, the Middle Eastern crisis, the Japanese earthquake and tsunami, the...
read moreJapanese Production Devastated by Tsunami
Japanese government statistics show that March factory production fell a whopping 15.3% from February’s number. Furthermore, the tsunami led to an 8.5% drop in household spending. Analysis: Each of the above numbers set records for statistical drops in Japan and both clearly indicate an economy devastated by the March 11 tsunami. On the bright side, the Japanese government is still predicting an expansion of Japanese gross domestic product (GDP) of 0.6% for 2011. This compares to previous forecasts of 1.6% economic growth. Further,...
read moreApple is Back Pedaling
Over the last week I have been tracking and blogging about Apple’s breach of privacy decency, as well as Google’s privacy violations, too. This morning Apple announced that it is going to be providing a software “fix” so that location data is not stored on your Apple wireless device even after you have disable the locating functions. What I love is the language…”a fix.” As if there was some sort of software oversight involved. That is truly outrageous given that Apple very consciously has set it up...
read moreConsumer Confidence Up Is Important
Consumer confidence rose to a level of 65.4 in April according to its tracker, The Conference Board. Meanwhile economists had expected a level of 65.0. March’s consumer confidence was revised upward slightly from 63.4 to 63.8. Analysis: I have said it so many times on the blog that it is almost redundant, but consumers drive the U.S. economy and its growth in gross domestic product (GDP). For the economy to do well the fragile psyche of the U.S. consumer has to feel safe. That’s hard to do when unemployment remains...
read morethe U.S. Doesn’t Control Gas Prices
This morning CNN is running a story that apes something that I have been saying for years: more oil drilling in the United States will not change fuel prices. Why? Because the U.S. doesn’t control gas prices, OPEC does. Additional oil drilling in the United States might create more jobs, reduce reliance on foreign oil production and help to lower the trade deficit. However, it is estimated by multiple sources (the government’s Energy Information Administration, Deutsche Bank, and others) that even with a massive investment in...
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