I found something really interesting about the similarities of some of the news headlines in July to that of the 1930s.
Here’s news from July 24 2009 and July 24 1930. The news from today’s Wall Street Journal has been inserted and bolded to show the similarities. History doesn’t repeat, but does it rhyme?
Thursday, July 24, 1930: Dow 239.33 +5.03 (2.1%)
Market commentary:
Market opened with large buy orders for major industrials. Many majors in early trading reached highest point of last week. Buying broadened to rest of industrials in late morning; upward movement continued almost all day. Some short covering seen. Car stocks strong, particularly GM; in spite of generally weak news. Utilities strong; amusement stocks dull. Banks and trusts weak.
Strong housing data combined with good earnings reports to spur a stock-market rally that pushed blue chips to a new 2009 high and the Nasdaq Composite Index to a winning streak unparalleled even in the dot-com bubble.
The Dow Jones Industrial Average leapt 188.03 points, or 2.1%, to 9069.29, helped by gains in components 3M, up 7.4%, and AT&T, up 2.6%. Both announced declines in profits smaller than analysts expected.
The most recent advance was powered by a combination of unexpectedly positive second-quarter corporate-profit reports and reassuring economic data.
3M Co., maker of Scotch tape and Post-it notes, said second-quarter earnings fell 17%; that was better than analysts were expecting. Its shares rose 7.4%.
Ford Motor Co. said it returned to profitability in the second quarter, with net income of $2.3 billion versus a loss of $8.7 billion the previous year. That profit was the result of a $3.4 billion boost from restructuring debt. Without the one-time gain, Ford would have posted a loss, but a smaller one than the previous year. Ford stock was up 9.4%.
Prominent brokers, rumored to be supported by banking interests, recommended buying sound industrial stocks. Believe this month marks the bottom of the industrial recession and stocks are likewise scraping bottom. M.J. Meehan & Co. expressed confidence in industrial outlook and recommended investment in representative stocks at current prices.
On Monday, Goldman’s once-skeptical strategist David Kostin told clients he expects the S&P 500 to hit 1060 by year’s end, up from 940 previously. He boosted his overall estimate for profits at S&P 500 companies
MMM – BofA Merrill upgrades to Neutral from Underperform
L.G. Federman, Pres. Interstate Dept. Stores, believes “Business in general hit bottom last month,” and likewise for commodity prices.
