Friday’s Market Recap (10/31/2008)
October 31, 2008
The market ended the week, and month, with two consecutive days finishing with gains. The Dow boosted 144 points, ending the worst month in over 21 years down 14.1% since October began. The S&P saw an increase of 1.54%, and the Nasdaq moved up 1.32%. Though consumer spending dropped again this month, JP Morgan [JPM: 43.48, -0.39 (-0.89%)] has announced that they will not refrain from foreclosing problem mortgages for up to 90 days, in an effort to find an alternative solution by potentially decreasing principal amounts or interest rates to reduce the load of ailing consumers.
Though consumer spending dropped as expected, it fell less than analysts on Wall Street had anticipated. The consensus estimated a drop to a reading of 57.5, but in actuality, it fell to 57.6. Virtually insignificant, however the importance here is that it did not drop lower than expected, like it has done in the past.
European markets advanced once again today as all three major indices record positive closing prices. The FTSE jumped 2%, while the CAC gained 2.33%, and the DAX bumped up 2.44%. Asian markets declined after the Bank of Japan decreased their bench mark rate from 0.5% to 0.3% on the shrinking job market, and slower inflation. The Nikkei dropped 5.01%, Hong Kong’s Hang Seng sank 2.52%, and the Straits Times fell the least, with a decrease of 0.43%.
Oil advanced $1.52, or 2.30%, at the end of this week, cushioning the worst monthly drop in oil prices in over 25 years. Prices fell 32% this month, to $67.81. Gas prices fell 4 cents overnight, making the average gas price $2.504. Gold dropped 2.78% during today’s trading session. Investor’s continue to find values in equities as the commodities boom continues to cool.
The dollar made further gains against both the euro and the yen during market hours on Friday. Japan’s interest rate cut has played a part in the demand for the yen. The USD is now trading around 98.700 yen, and 0.7854 euros.
Barclays’ [BCS: 22.52, +0.50 (+2.27%)] raised $7.3 billion pounds from Middle Eastern investors as a way to avoid being backed by the British Government. Three investors could end up owning up to one third of the company.
That’s all for today, catch me tomorrow, same time, same place, for the Bullish Banker’s Daily Market Recap.
-Derek Stevens
Disclosure: The fund the author is associated with holds a long position in JPM.
Chevron Profits Soar on Record Oil
October 31, 2008
Chevron Corp. [CVX: 77.53, +0.29 (+0.38%)] reported net income of $7.9 billion and diluted earnings of $3.85 per share, up from $3.7 billion and $1.75 per share from the same quarter last year. Rising oil and natural gas prices during the quarter helped to boost sales and other operating revenues 41% from a year ago to $76 billion. These numbers are on the heels of Exxon Mobile’s [XOM: 72.58, +0.08 (+0.11%)] record setting profits reported yesterday. Analysts had expected the second-largest U.S. oil company to report a net profit of Read more
Fundamentals of Crude Oil Pricing: Part III
October 31, 2008
If you have not read parts earlier parts of this article please visit Part One and Part Two.
Shortages, Stockpiles, and Decline Rates
Often one of the most important short-term pricing factors in regards to crude oil are shortages and stockpiles. These dynamics work in ways that are mysterious to most investors and misunderstood by many others. It is easy Read more
Thursday’s Market Recap (10/30/2008)
October 30, 2008
The third quarter real GDP data was released this morning before trading hours with more promising results than Wall Street had predicted. Experts believed real GDP would shrink by 0.5% due to lack in both credit and confidence in the market. Actual GDP shrunk by only 0.3%, and will most likely delay the official recession title that experts deem to be inevitable. Many economists believe conditions will have to
Capitalize on In Home Dining: JM Smucker
October 30, 2008
You wake up in the morning and put the bread in the toaster; it pops up nice and warm; and your good old buddy JM Smucker strawberry jelly (or blueberry if you prefer) is waiting there to be spread over the toast and be enjoyed by everyone in the family. During tough economic times, families tend to stay at home and eat, whether it be for be for breakfast, lunch or dinner, the Consumer Staples sector will tend to benefit from this trend. As unemployment continues to rise, the housing market continues to deteriorate and people have less disposable income, families inclination to stay at home will become even stronger. The J.M. Smucker Company [SJM: 52.68, -0.15 (-0.28%)] is a perfect example of a company that will thrive in this type of environment. Read more
Wednesday’s Market Recap (10/29/2008)
October 29, 2008
The Fed’s announcement to cut interest rates to 1% seemed to be anticipated, for the day after posting the second highest historic gains proved to react with very little volatility. During the last hour of trading, the Dow was up close to 280 points before ending the trading session recording a decrease of 0.82%. The S&P fell 1.11%, while the Nasdaq was the only index to post a positive gain of 0.47%. September’s Durable Goods report was released today with better than expected results. The consensus estimated a decrease in purchases by 1.1%. Today’s release described Read more
Fundamentals of Crude Oil Pricing: Part II
October 29, 2008
If you have not read the first part of this article, please go visit it here.
OPEC
The Organization of Petroleum Exporting Countries (commonly referred to as OPEC) is the world’s largest cartel. It consists of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. OPEC has control of roughly two-thirds of the world’s oil reserves and 35% of the world’s crude production (these numbers do not include tar sands and other unconventional forms of hydrocarbons). OPEC collectively places production quotas on its nations Read more
Tuesday’s Market Recap (10/28/2008)
October 28, 2008
Markets around the world made steep gains during trading sessions on Tuesday as the volatility seen in this market condition works to the bulls advantage this time around. The Dow jumped close to 900 points with no significant fundamental news releases surfacing today. The market’s only support: the anticipation of an interest rate cut from the previous 1.5%, to 1% in their meeting tomorrow. The S&P raked in 10.79% at the closing bell, while the Nasdaq recorded 9.53% gains. Read more
Equitable Resources Earnings Follow Up
October 28, 2008
I wrote an article a little over a month ago titled Mid-Cap, Large Potential about Equitable Resources Inc. [EQT: 41.95, -0.58 (-1.36%)] and why I am so attracted to this natural gas company. (If you haven’t read that article, it can be found here: http://www.bullishbankers.com/mid-cap-large-potential ). Equitable is engaged in natural gas production, distribution, gathering and processing, transmission in storage. It is the largest operator in the Appalachian region and has more than 2.7 trillion cubic feet of proven reserves. The main reasons for my attraction that I stated in that article were its strong financial numbers and how it has positioned itself for great growth moving forward. Read more
5 IT Trends for the Next Twelve Months
October 28, 2008
As investors, it is important to monitor various industries and engage in ahead of the curve idea generation. The IT sector is going to be a very interesting space going forward. This uncertainty has been echoed by CEOs over the past couple weeks as earnings season kicked off and several blue chip IT companies released earnings. The next twelve months are going to be challenging for IT companies as the effects of the credit crunch are yet to be determined in regards to IT spending and it’s effects on both top line and bottom line growth. Read more
