Highs Are Meant To Be Broken, S&P 500 9 Month High
On June 1, 2009 when the S&P 500 hit 947, I cheered as I wrote;
Good News for IRA investors!
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Good News for 401k investors!
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Good News for America!
But there were the naysayers;
Yes it is good news. When the market goes down (as it will do), it will be bad news.
What will you post then?
Two months later, where are we?
NEW YORK, July 30 (Reuters) – U.S. stocks extended gains on Thursday, with the S&P 500 index up 2 percent and the Nasdaq above the 2,000 level for the first time since October, as upbeat corporate earnings and weekly jobs data reassured investors that an economic recovery was nearer.
The Dow Jones industrial average .DJI gained 152.51 points, or 1.68 percent, to 9,223.23. The Standard & Poor’s 500 Index .SPX rose 18.97 points, or 1.95 percent, to 994.12. The Nasdaq Composite Index .IXIC added 36.47 points, or 1.85 percent, to 2,004.23.
Bull Markets are made by climbing a wall of worry, never forget that.
Oh, and when pure undiluted politics collides with investment decisions, stay clear.
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July 30th, 2009 at 3:59 pm
Oak Leaf:
I am the naysayer who has been shown to be wrong (according to the Dow). It certainly seems the money is flowing freely in the equities. I guess I need to back up the truck and jump in.
What could go wrong?
Ken
July 30th, 2009 at 4:06 pm
It is still down how much since it’s all time high? Something like 33% or somewhere in the 30’s!!!
http://www.the-privateer.com/chart/dow-long.html
July 30th, 2009 at 4:10 pm
I got the calculator out to check out the real number. The Dow is down 34.9% since hitting its high point. So much for helping everyone’s 401Ks, 403Bs, and IRAs.
July 30th, 2009 at 4:33 pm
Good news indeed for the bankers.
As for Joe Six-pack, not so much.
July 30th, 2009 at 5:19 pm
Obama/Oak Leaf. The modern day Marie Antoinettes.
July 30th, 2009 at 5:20 pm
Good news! Now I only need another 54% gain in my 401K to BREAK EVEN!
July 31st, 2009 at 7:58 am
Hey JokeLeaf…..I could read AP articles all day if I wanted this kind of bilgewater? News Flash….Unemployment set to go to 9.7% in July and the economy contracted at a 1.5% rate in the second quarter. This is horrible by any objective standard.
Apparently, you are implying that we are in the middle of the Recovery you have been promising, and, more unfathomably, the one that you recommend we “embrace” and run on in 2010…. LOL. Wonder how many Republicans are going to sign on to your brainstorm next year? Thanks for the “insight”.
July 31st, 2009 at 9:13 am
Unfortunately, I would guess that pure, undiluted political failure (at the moment) is causing much of the rise in the market. If hell-th care reform passes under obomba, then I would not be surprised to see stocks fall again under the weight of impending socialism.
July 31st, 2009 at 9:48 am
Absolutely, Durman! This rally most likely has more top do with Healthcare being pushed to the purgatory of summer recess and town hall meetings than it does with underlying strength of the economy. But whatever the cause, Jokeleaf has been prescribing for months a major dose of “Fail” for Republicans. With no clear economic signs of recovery, his posts have been unilaterally highlighting inane positive recovery signs such as his classic “Dr. Pepper posts a 1st quarter gain”…lol.
I guess today’s deep thought from Oakleaf is meant to “teach us” that we shouldn’t be emotional with our money and that stocks eventually rebound. T
July 31st, 2009 at 12:53 pm
Sir,
With all due respect, I don’t believe that any of this matters in the long haul. We are (re)building a house of cards with Keynesian economics, fractional reserve banking, governmental control over the free market, and excessive spending.
I couldn’t care less if the markets recover or not. That’s profoundly not the point. Markets come and go. The problem is that just as the Bush/Paulson Tarp was the wrong way to save the banking system, the stimulus was the wrong way to stimulate the economy. We can always bang in a nail with a pair of pliers, but that’s not the tool for the job no matter what the plumber might think. And during the process, we’ll probably ruin the wood, destroy the pliers and bang off a finger. The wrong tool is the wrong tool, period.
The GOP is going to have to learn to speak to the American public in something other than sound bites about whether you’re better off or worse off or what the unemployment rate is or even what the markets are doing. We’re going to have to engage the public seriously, with weighty arguments for the right way to do these things without creating a shell for an economy that will only collapse under its own weight in the future. Obama’s plan is kicking the can down the road, and we must be able to articulate that message to the public.
V/r and with kindest regards,
HPS
July 31st, 2009 at 1:08 pm
spike,
Ironic, isn’t it. In order for Oak’s optimistic economic appraisal to be fulfilled, we first have to eliminate the country’s biggest impediment to growth: obomba socialism. Now that this appears to be happening (at the moment), we could indeed be on the way:
from Bob Stein of First Trust Advisors:
“There were two big stories in today’s GDP report: First, the drop in GDP has been deeper and longer than previously estimated; second, the recovery will be stronger than the consensus expects. New figures show that real GDP peaked a year ago and has declined in all four quarters since then, the deepest contraction in the post-WWII era. This helps explain why the unemployment rate moved up even faster than previously reported GDP numbers suggested it should have. Also, notice the absence of an impact from “stimulus” legislation earlier this year, as real personal consumption fell at a 1.2% annual rate in Q2 after rising slightly in Q1. Part of the reason for greater recessionary weakness was that inventory reductions were even more forceful than previously thought. As a result, as companies slow down inventory liquidation in the quarters ahead, real GDP will quickly accelerate. Boosting growth further will the continued decline in the trade deficit and a turnaround in home building, which is now a record low 2.4% of GDP, roughly half the norm. In other recent news, the Chicago PMI, a measure of manufacturing in that area, increased to 43.4 in July, the highest since September 2008. The increase in the Chicago PMI was led by a 6.4 point increase in the new orders index to 48.0. Yesterday it was reported that new claims for unemployment insurance increased 25,000 last week to 584,000. However, the four-week moving average of new claims fell to 559,000, the lowest since January and 100,000 below the peak in April. Meanwhile, continuing claims fell 54,000 to 6.197 million.”
But if hell-th care socialism happens, or cap & trade taxation occurs, then look for more misery down the road.
July 31st, 2009 at 1:59 pm
nice…..
August 4th, 2009 at 7:58 pm
Naysayers may be right in the end…
“Although the stock market’s advance since March is taken as evidence that the economy is on the mend, the extent of that advance represents just over one-third of the prior bear market loss, which is somewhat standard (if not reliable or predictable) for bear market rallies.
Interestingly, the advance since March has almost exactly matched the size and duration of the rally that followed the initial market plunge in 1929, just before the stocks and the economy suffered fresh deterioration.”
Quoted from John Hussman’s most recent weekly comment:
http://www.hussmanfunds.com/wmc/wmc090803.htm