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Tuesday, July 14, 2009

After Market Report

The markets were relatively mild today. All the major indeces continued their up trend from yesterday, however their gains were significantly more muted. The Dow was up 29%, the NASDAQ was up 6.5, while the S&P was up 4.79.

Earnings were largely positive lead by Goldman Sachs which beat estimates rather handily. Goldman Sachs earnings came in at $4.93 which beat the consensus of 22 analysts which was $3.65 per share.

The market, however, was generally feeling lukewarm after retail sales and producer price index came out in the morning. While sales were up .6%, higher than the .4% consensus, that was mostly on the back of auto and gas which have huges swings. Meanwhile, PPI came out with a 1.8% increase in a sign of inflationary pressure.

While all this news had little effect on stocks, the real story came in bonds. The ten year U.S. Treasury responded to the PPI numbers by extending losses and finishing the day with the rate up to 3.49%. The Ten year has given back nearly twenty basis points in the last two days. Meanwhile, oil finished below $60 a barrel again finishing at $59.83.

Finally, Intel came out with their quarterly numbers after the market closed and they also beat estimates. So far, earnings season has treated U.S. corporations well.

My Analysis:

Volume was light again. I didn't see the market action I was looking for and so I remain bearish in the intermediate. I am still quite bearish long term. The Treasury bond is again the main security to watch. It's move up over the last couple days is something to watch. Mortgage rates have followed treasuries up the last two days. So, once again Treasury Bonds are threatening the economy.


Greg said...

Hey, I really like your blog. You have a lot of good analysis.

I just have a question, it's a little controversial. You're basically a libertarian and you're jewish right?

I was just curious, what do you think the reason is that jews are so much more leftist on average than the general population? Two leading examples are Paul Krugman (nationalize banks, universal healthcare, huge stimulus etc.) and Joseph Stiglitz. The extreme leftist views sometimes go far beyond reason. Historically, there has also been this pattern going back for decades. It seems like jewish people are the most likely to be hurt by these socialist policies too. So it doesn't make that much sense for the to promote them.

Since you go against the leftist grain, I was just wondering what you thought might be the reason for this leftism?

mike volpe said...

First, I would call myself a conservative more than a libertarian. I like some regulation just not a lot.

Your question is actually something I wrote about.

it really comes down to abortion. Most Jews in America are basically secular and they are very pro abortion.

I don't think that Krugman and Stiglitz are fair representations of Jewish thinking. I think you could look at a much more traditional liberal like Alan Dershowitz as a much better example. Bill Kristol is also a better representation though not necessarily the mainstream.