Asian stock markets rose last night, encouraged by the US elections. That is a little strange since on the prior night, they talked about Asia liking McCain because of his track record of being for free trade. The Democrats are not strongly for free trade, especially when the US economy is struggling. Next, European stocks sold off on negative economic news.
Dow is down 166, decliners over advancers 2-1 & NAZ is down 34 on after election thoughts. The S&P 500 FINANCIALS INDEX dropped 4 to 217. The Alerian MLP Index is down 3 to 222, the Dow Jones REIT index dropped 6½ to 168 & the VIX (Volatility Index) dropped pennies to 47. If there is good news, lower numbers for the VIX suggest markets are calming down, maybe the Dow will only have daily point swings of 1-200. Junk bond funds have been attracting buyers in the last week, but daily gains are measured in pennies because of their low stock prices. Those 16+% yields are finally pulling in nibblers.
Oil sold off & remains kicking around the 60s.
|CLZ08.NYM|| Crude Oil Dec 08||....68.17||....2.36 (3.4%)|
Macro economic news can't break out of negative thinking. Planned job cuts are shaping up to be the worst in 5 years. The big jobs number comes out on Fri, the only question is how ugly it will be.
Another big company, Time Warner (TWX), reported slightly lower operating profits on essentially even sales in Q3. Their guidance for 2008 EPS was revised downward by 3¢ which will be felt in Q4. The stock took the news well, up 26¢, but still sells at a depressed $11.•Time Warner Lowers Earnings Forecast for Year Amid Time Inc. Restructuring
GMAC had an ugly Q3 report, attributable to dreary economic conditions. They may have to become a bank so they can get help from the Federal Reserve.
Now that elections are over & most of the Q4 earnings reports are in, the focus for the stock markets will return to macro economic & company announcements about earnings guidance. On both fronts, they are not expected to get better for some time. Meaningful gov help will not come until 2009.