"Wall Street Rally Takes a Pause" seems to be the consensus headline for the beginning of this week.
Nothing too dramatic so far unless you own shares of U.S. Steel (NYSE:X) down around 5% as of this moment, Genco Shipping and Trading (NYSE:GNK) down today over 6%, BHP Billiton (NYSE:BHP) down close to 5%, or any of the silver producers or royalty stocks like Silver Standard Resources (Nasdaq:SSRI), Pan American Silver (Nasdaq:PAAS), and Silver Wheaton (NYSE:SLW), all down around 5% so far.
The one sector that is doing well today, ironically, is the banking and financial sector. J.P.Morgan Chase (NYSE:JPM) for instance is rallying 1.5% as I write.
The Wall Street cheerleaders want this "Green Shoots" rally to keep pushing higher for awhile and I wouldn't be surprised if they get their way. It won't be straight up from here as even a rocket scientist could figure out today by observing today's action.
Nouriel Roubini was quoted by Henry Blodgett on Yahoo! Finance's "Tech-Ticker". Roubini recently spoke at a conference and according to Blodgett he's singing the same sad song. This "song" is filled with the following warnings and opinions:
- Those aren't "green shoots"--they're yellow weeds
- The crisis isn't over, and everyone has become way too complacent
- We'll be in recession for another 6-9 months
- The recovery after that will be weak
- Big risk of a double-dip
- Households aren't deleveraging
- Oil could go to $200 just as economy starts to recover
- Real interest rates could spike, killing housing, etc.
- Concern about hyper-inflation
- All this could lead to "perfect storm" that will clip wings of economic and financial recovery
- So we need to stay focused on averting disaster before we redesign regulatory architecture.
Back at the old White House, President Barack Obama is promising to deliver more than 600,000 jobs through his $787 billion stimulus plan this summer, repackaging a pledge the administration made weeks earlier as the economy continues to lose hundreds of thousands of jobs each month.
Obama spotlighted billions in federal agency spending planned this summer in an announcement Monday designed to draw attention to his stimulus program.
