Friday, April 18, 2014 11:41am
North Adams, MA now: 43 °   
Send news, tips, press releases and questions to info@iBerkshires.com
The Berkshires online guide to events, news and Berkshire County community information.
SIGN IN | REGISTER NOW   

Home About Archives RSS Feed
@theMarket: Is September's Rally Stalling or Pausing?
By: Bill Schmick On: 07:26AM / Saturday September 11, 2010
Important
0
Interesting
0
Funny
0
Awesome
0
Infuriating
0
Ridiculous
0

After opening the month with a 5 percent market melt-up, investors were expecting a follow-through this week that would take the averages higher. There was even talk of a possible break through the ceiling of this almost six-month trading range. Instead we only managed a couple point gain over last week's close on the S&P 500.

That was despite some "good" economic news on the unemployment front. Initial unemployment claims were down by 27,000 and continuing claims fell 2,000, the best in two months... The bears argue that not all states submitted employment numbers so optimistic estimates were used instead, in some cases.  They also point out that once a person's unemployment runs out they are no longer officially counted as unemployed. The advance guard of this group (those who were left go early in the recession and still have not found a job) exhausted their extended benefits beginning in June. Unfortunately, as time goes bye, more and more unemployed Americans will fall into this category well into the middle of next year.

Over in euro land things were a bit dicier with increased concerns over European debt levels, problems with Anglo Irish Bank and the "news" that Europe's bank stress test understated lender's holdings of risky government debt. Readers may recall that I had grave reservations over this very same issue when the results were first announced weeks ago.

Most of the market's attention has turned to the Obama administration's non-stimulus, stimulus plan. That some Wall Street players got an advanced look at the administration's thinking was, in my opinion, the source of last week's rally. Now that we have the details, the markets seem to be decidedly unimpressed.

As readers recall, I explained that a good portion of the money from the first stimulus plan was deliberately held back until this summer in order to help the incumbent party get re-elected. That may have been a miscalculation on the part of the Democrats, who could have been overly confident of the economic impact of Stimulus One. To date, 77 percent of the $288 billion that was earmarked for tax benefits have been spent, only 53 percent of the $275 billion available for contracts, grants and loans has been distributed and only 64 percent of entitlements, or $144 billion out of $224 billion  was doled out to the country. Obviously those levels of spending weren't enough to jump-start the economy or reduce unemployment and people (voters) are angry.

The Obama administration can read the polls as well as you or I. Since offense is always better than defense when running for re-election, the general consensus among Democrats is "we need more spending." The president's new initiatives could cost as much as $250 billion or $300 billion or slightly less than half the first stimulus plan. His agenda includes tax cuts for new business investments and R&D, $50 billion more spending on infrastructure and extending the Bush tax cuts for those Americans who make $200,000 or less ($250,000 if married).

It is not being called another stimulus plan because that might be seen as an admission that the first plan has failed. However on Friday, while addressing the nation on the economy and unemployment, the president did concede that "progress has been painfully slow." Wall Street is already discounting the package as too little, too late and they may be right. They are putting the blame squarely on the president and his party. And this country loves to find a scapegoat.

In the meantime, the markets continue to vacillate on low volume. I'm still expecting stocks to move a bit higher into the 1,130 level on the S&P 500. Only then will there be another opportunity to break out of this trading range decisively and re-take the higher ground. If stocks do succeed in breaking out, I am prepared to change my mind about my 950 S&P target level. But I'm not holding my breath.



Write a comment - 0 Comments       Tags: euro, jobs, stimulus      
News Headlines
Pittsfield Lakefront Property Being Developed on Churchill Street
Committee Finds Leaking at Hoosac Valley High
Three Resign From Williamstown Affordable Housing Committee
Williamstown Fire Committee OKs Budget Request to Voters
"Draft Day": It's a Coin Toss
"Muppets Most Wanted": More or Less
PERC Shares Stories of Business Success
Adams Selectmen Ask For Pole Relocation on Roundabout
Area Responders Tested on Emergency Preparedness
MCLA Christens New Veterans Resource Center
Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.

 

 

 



Categories:
@theMarket (132)
Independent Investor (179)
Archives:
April 2014 (5)
April 2013 (3)
March 2014 (6)
February 2014 (6)
January 2014 (7)
December 2013 (8)
November 2013 (7)
October 2013 (6)
September 2013 (6)
August 2013 (8)
July 2013 (3)
June 2013 (5)
May 2013 (7)
Tags:
Greece Metals Deficit Congress Stocks Stock Market Election Stimulus Fiscal Cliff Debt Ceiling Qeii Japan Europe Rally Crisis Recession Banks Taxes Commodities Euro Selloff Pullback Debt Currency Federal Reserve Jobs Retirement Banking Interest Rates Markets Oil Bailout Employment Energy Economy
Popular Entries:
The Independent Investor: Understanding the Foreclosure Scandal
The Independent Investor: Don't Fight the Fed
The Independent Investor: Does Cash Mean Currencies?
@theMarket: QE II Supports the Markets
@theMarket: Markets Are Going Higher
The Independent Investor: General Motors — Back to the Future
The Independent Investor: How Will Wall Street II Play on Main Street?
@theMarket: Economy Sputters, Stocks Stutter
The Independent Investor: Will the Municipal Bond Massacre Continue?
The Independent Investor: Why Are Interest Rates Rising?
Recent Entries:
The Independent Investor: Good Friday and the Stock Market
@theMarket: No Spring in the Stock Market
The Independent Investor: Banks Face Tougher Regulations
@theMarket: A Crowded Trade
The Independent Investor: Obamacare Confounds Critics
@theMarket: The Faint of Heart
The Independent Investor: Do Women Have a Choice?
The Independent Investor: What's Wrong With This Flight Plan?
@theMarket: Hanging In There
The Independent Investor: Income Inequality Among Women


View All
Softball: Lee vs Hoosac
4-14-14 Kassandra Kazimierczak went 2-for-4 with a double...
Baseball: MG vs Hoosac
4-11-14 Dan Flynn's suicide squeeze with the bases loaded...
Softball: MG vs McCann
4-11-14 Mount Greylock and McCann Tech played an atypical...
Sullivan School CPR Class
Seventh-graders at Sullivan School in North Adams learned...
Lacrosse: Mounties vs. Hoosac
Mounties overwhelmed Hoosac Valley on Wednesday 14-1....
North Adams Furnace St. Fire
Firefighters contained a top floor apartment blaze on...
Berkshire Chamber Career Fair...
More than 50 employers connected with job seekers at...
Lacrosse: MG vs St. Joe
Mount Greylock boys lacrosse team won 17-4 St. Joseph at...
Softball: MG vs Drury
4-8-14 Mount Greylock softball claimed a 7-2 victory over...
Wahconah High School Musical...
Wahconah Regional High School is putting on the 1930...
Drury Coach Marceau Benefit
Friends and supporters filled the Eagles Hall on Friday...
Lenox High International Fair
Lenox Memorial Middle and High School students got to...
Slice of Life Pizza 2014
Moments House's annual Slice of Life fundraiser that pits...
North Adams Hospital Closes
Union members and supporters of North Adams Regional...
2014 Berkshire Awards
The Berkshire Awards ceremony was held on Friday night at...
Chamber Night At Moments...
The Berkshire Chamber of Commerce visited the new Moments...
Softball: Lee vs Hoosac
4-14-14 Kassandra Kazimierczak went 2-for-4 with a double...
Baseball: MG vs Hoosac
4-11-14 Dan Flynn's suicide squeeze with the bases loaded...
Softball: MG vs McCann
4-11-14 Mount Greylock and McCann Tech played an atypical...
Sullivan School CPR Class
Seventh-graders at Sullivan School in North Adams learned...
Lacrosse: Mounties vs. Hoosac
Mounties overwhelmed Hoosac Valley on Wednesday 14-1....
| Home | A & E | Business | Community News | Dining | Real Estate | Schools | Sports & Outdoors | Berkshires Weather | Weddings
Advertise | Recommend This Page | Help Contact Us | Privacy Policy| User Agreement
iBerkshires.com is owned and operated by: Boxcar Media 102 Main Street, North Adams, MA 01247 -- T. 413-663-3384 F.413-664-4251
© 2000 Boxcar Media LLC - All rights reserved