Today was unpredictable in all sorts of ways. But we’ll get to that in a moment.
First, the scoreboard:
S&P 500: +2
And now, the top stories:
- First of all, the key thing to bear in mind is that everything, all around the world, was designed to culminate in Ben Bernanke’s big speech at 8:15. Asia was generally lower, though Shanghai went nuts with a big 3% surge. Chinese stocks appear to be going parabolic.
- Europe: basically quiet again.
- US markets were basically flat in the very early pre-market going, with the exception of tech (the NASDAQ) which was riding a Google-inspired wave, heading for a solid gain. Shares of Google hit $600 today, and several analysts raised estimates.
- Then at 8:15 Bernanke delivered his big speech. And of course, the dollar tanked and gold rallied. But that only lasted for, like, 5 seconds, as logic took over from the Pavlovian response to Bernanke (which is usually: dump the Greenback!). The dollar rallied, gold slipped, and Treasuries fell hard for the second straight day. That Treasury move looks like it’s starting to become significant, but more on that in a bit.
- At 8:30 — while Bernanke was speaking — we got two pieces of “good” economic news. Well, one piece was bona fide good: that was retail sales, which clearly jumped more than expected. The other number was only good in a sense, and that was CPI, which was basically flat. In a normal economy that would be deflationary and worrisome, but… heading into today the big worry was that a hot CPI reading would box Bernanke in, and prevent more QE, so this took that off the table.
- And so again the market move was higher stocks, weaker treasuries, stronger dollar, and lower gold.
- And that lasted for a while, except that the bank sector continues to get creamed, and that really took the Dow down — bank of America was hit especially hard courtesy of the foreclosure-gate scandal, and swirling confusion about mortgage putbacks, which is a separate distraction. JPMorgan was also hit pretty hard. Here’s a guide to Bank of America’s possible exposure on this >
- Also a big loser: GE. They beat on earnings, but the revenue was pretty mediocre. A huge winner was Apple, which went up because it’s Apple, but also because investors are getting excited about earnings on Monday (though maybe they shouldn’t be… Gene Munster came out with a bearish note on them).
- There was also a lot more back and forth between Bruce Berkowitz and David Einhorn over The St. Joe. See Einhorn’s big presentation against the stock here >
- To digest everything, and get good overview of the state of the economy, see this presentation >