Sunday Randomosity

• Market sentiment seems bearish.  Even with stock indexes not that far from all-time highs.  Except for the Nasdaq, where there has been some carnage in growth. But money has rotated into “safer” names for now.  And Amazon.
• Lets build a park, and fill it with carnivores.  Now that would make for a great movie!  3 Nile crocodiles found in Florida…  between 2010 and 2014, the Nile crocodile was responsible for 480 attacks on humans in Africa … officials say the swamp dwellers escaped from a facility called Predator World.
• My thoughts on minimum wage hikes and increased compensation via overtime rules reform? When companies face higher costs, they either try to reduce costs or pass along the higher costs to consumers.  So, these laws will probably  mean some combination of fewer employees, fewer working hours for employees, and higher prices at the stores, malls, and monthly bills for consumers.  And combine this with more costs for rules and regulations, there is an unknown impact on small businesses that never get started in the first place.
• Back to stocks, I think all these liberal/progressive rules are a major factor in the slower GDP growth we’ve seen.  And economic growth fuels the stock market.  Which hasn’t gone anywhere in almost a year and a half!
• And throwing the first pitch today is Tiffany Hwang from the South Korean kpop group Girls Generation.  Nice throw, Tiffany!

• Energy experts say oil won’t top $100.  Does that make you nervous? So I suppose what that really means is that we should start to fear really high oil prices again.
• Angry Birds made $39 million this weekend?  Hmm.  Well, I did get an Angry Birds themed spoon at the local yogurt shop yesterday.
• Hedge funds unloaded $7 billion of Apple stock in the first quarter.  Nobody likes it anymore.  Should start seeing some downgrades, right? Some are comparing to Blackberry.  Hmm.  Well, I’m not there yet.  I still own it. 

First Casualty of Low Energy Prices

$X - While falling prices are good for consumers and overall economic growth, industries that are involved in the business of energy production are slowing down.  US Steel is letting some folks go in Ohio.  

More companies are likely to follow suit in the days ahead as oil prices continue to drop. 

Gasoline Prices

Gasoline has been over $3 a gallon for 1000 days.  That used to be a big deal, as the more money spent at the gas station means less money spent at the malls and restaurants.  I think we've gotten used to it.  We've changed our spending habits or our salaries have increased enough that we're numb to prices at these levels.  I think it would take a push to $5 a gallon before folks felt it and had to cut back.

More of the Same in the Market

• $$ - The market didn't have a horrible day, but it was all over the place. Up. Down. Up again on the FOMC minutes. Then down again. Finally a push in the last hour like we've been getting lately, only to fall just a bit in the final minutes.
  
• Good luck trying to figure that out. But the reason du jour was that the Fed offers no stimulus clue.
  
• Tech continues to be weak. I would expect a bounce at any minute, but I'm not leaning in any direction right now as I'm still mostly in cash and low-beta stuff.
  
• Another city in CA goes the bankruptcy route: San Bernandino! Yes, another city struggling with foreclosures, tax revenues, and increasing pension costs. Feels like that theme is gaining momentum. The can can only be kicked so far down the road before it gets encountered again, and each subsequent kick seems to lose a little distance. "What? That darn can again? Didn't we just kick it a week or so ago?"
  
• Eh, Europe? If anyone likes kicking cans, it's you!
  
• Did you see where Rep. Jesse Jackson Jr. was being treated for mood disorder? Yeah. "Mood disorder." I think it's funnier in quotes, don't you? One more time: "Mood disorder."
  
• Meanwhile, the National League embarrassed the American League last night in the All-star game. Please settle down with the debate on "the American League is better" chatter. 8-0 in a best-on-best game.
  
• It's 105 degrees in Sacramento. I'd blame "global warming" (again, hahaha, quotes!), but I blame the middle of summer. It tends to get over 100-degrees here in the summer - especially in July and August.
  
• No bike riding in over 100-degree weather. Eh, why? Take the puppy for a walk after the sun sets, sure. But when I came home I noticed I had a flat tire. When did that happen? Good grief. Good thing I bought a dozen spares.
• Chevron reported increasing profits. Hey, doesn't it give you the warm fuzzies knowing that even in this sluggish economy, at least oil companies are making money!
• The BIG earnings start rolling in next week.
• Time to go fix the flat.

 

Posted with Blogsy

Gas Prices Up 26-Days in a Row!

Gas prices up 26-days in a row! It will matter when it matters, but nationally the price is $3.76 while here in Sacramento it's in the mid-$4 range!

Sweet!

Isn't affecting the crowds at BJ's, Cheesecake Factory, or Thunder Valley Casino.

I think that the economy is better. There are more people working. In addition, interest rates are close to zero percent and many folks have refinanced their homes at rates below 4%. Maybe some of the money goes to the pump, but there may be enough left over to have a little fun, too.

Again, oil prices eventually will hurt folks. But when?

posted from Bloggeroid

Bernanke Slams QE3 Hopes; Why is Oil so Expensive?

#147: Oil Price Shock! GOP Primaries! Pensions! Rebalancing!

#146: Stocks pullback from 13000; Oil Up; Iran and Israel; Google Glasses

Gas Prices on the March

The economy is improving. Company profits are increasing. Job numbers are picking up pace. Add them all up and what do you get? Rising prices at the pump!

Seriously, have you noticed that the traffic is picking up in your city? Seems that after a two-year lull here in Sacramento, I'm running into more traffic jams on the commute. I've noticed that the waiting lines at my favorite restaurants are longer, too. Things are getting better, but that means we're going to need more fuel. Higher demand will translate into higher prices.

None of that was today's business in the stock market. Stocks recovered most of Friday's losses...

posted from Bloggeroid

#141: Super Bowl Recap, Stocks Flat, YUM Brands, Oil Prices

...And the Market Went Up Anyway

One story says that stocks rose because of good manufacturing data. Another story says oil prices sank because of mixed US demand for crude.

Hmm... If US demand for oil is dropping, that's a sign of the economy slowing down. We use less oil and gasoline when we're hunkerin' down. On the other hand, if manufacturers are makin' stuff, it's because they're seeing increased demand.

Anyway. Maybe people just felt like buying stocks today. When the trend gets going, it's a bit contagious. Good news is bought. Bad news is bought. The mid-day declines are bought. The morning dips are bought.

And social network IPOs will really be bought.

Facebook, or $FB as we'll all be calling it soon, will IPO in the near future. Get your limit order in now. GTC! There are a lot of fishermen (and fisherwomen) on the pier throwing their lines out trying to catch a ride on this IPO. I might even join them. It's too tempting not to, right?

posted from Bloggeroid

#133: Audioboo/Podcast on Top News of the Day

Show Notes!

• Stocks up for the year - barely! 
• Gold down 5 days in a row 
• Europe, Europe, Europe! 
• Online gambling! 
• Netflix! 
• Iran threatens Strait of Hormuz 
• Oil prices and the US Economy, how to invest in oil 
• Companies reluctant to hire! 
• Sears! 
• Android activations soar! 
• Movie theaters lagging 
• Must read financial blogs 
• Most admired list includes Obama and Bush

#123: Thanksgiving Week, Warren Buffett, Oil, Social Media Stocks

#87: Oil and Silver Crash! Sell in May, the Black Box

...And Gas Prices Continue to Climb

Gasoline prices continue to increase.

Many thought that the death of Osama Bin Laden, or Usama Bin Laden for the Fox News readers, would help to bring down oil prices down. Initially, this happened. But oil prices rebounded as the day went on.

The thought is that just because Osama is dead, it doesn't mean that terrorism is over. In addition, there are some other issues facing the economy.

First, oil prices are determined by supply and demand. Even though some of the economic numbers have come in a little murky lately, the GDP is not negative. The economy is sluggish at 1.8%, but it is positive growth. In addition, world economies are doing better as well.

Next, the Federal Reserve is keeping interest rates low and continuing with Quantitative Easing. This is putting pressure on the dollar. Oil is denominated in dollars. In addition, the annual deficit is $1.6 trillion, while the US debt is over $14 trillion dollars. This also puts pressure on the dollar. Again, oil is denominated in dollars.

There is talk about "oil speculators" driving the price of oil up. But there are over 80 million barrels of oil consumed a day. And these folks are really betting against the economic policies of Obama, Geithner, and Bernanke. It's been the right environment to make money in commodities. In addition to oil, just look at the price of gold, silver, cotton, sugar, etc.

Is there anything on the horizon that could bring down the price of oil and gasoline? Absent a recession?

#84: Osama bin Laden, Stocks Yawn, Economy and Oil

Gas Prices and the World Demand for Oil

Gas prices are up about a buck from last year, and that is impacting discretionary spending. Will this oil shock lead to another stock market collapse?

It seems President Obama has finally noticed that gas prices are higher. Back in 2008, he urged Americans to inflate their tires to get better gas mileage. Not the worst advice ever, but it did seem to lack a bit of compassion for those trying to make ends meet from month to month.

In the meantime, we have unrest in the Middle East. Oil production in the Gulf is down about 13% since the BP oil spill. Most of the US is off-limits to new oil drilling. All of this is happening as the world economies are improving and the demand for oil is increasing.

Rather than blaming the voters for keeping their tire pressure too low, President Obama has found a new scapegoat: Evil Oil Speculators. Yes, another synonym for rich, Wall Street types, who steal from the poor to line their pockets.

The problem with the new scapegoat is that oil is a world commodity that is traded every day. This is not something that the US controls the price of. Oil prices are determined by supply and demand; they depend on how much a buyer is willing to spend on the next barrel of crude.

The reality is that the world runs on oil. The price of oil is going up. This directly affects people's ability to spend. If people are spending money at the pump and sending their cash overseas, that's money that doesn't get spent at the malls, restaurants and coffee shops. It affects company earnings.

And on the other hand, Exxon reports this week. I bet their earnings have been affected, too.

Disclosure: Long XOM.

#77: Electric cars, Chevy Volt, Nissan Leaf, Recharging in Texas, the Week in Stocks

#72: Chevy Volt Sales and Reviews, GE and Taxes, Oil Prices

Stocks Tank on Data

In addition to bad data, Saudi Arabia gets added to the reason du jour for the stock market route today. And there was no late-day rally to bail us out.

Hey, Saudi Arabia was only firing rubber bullets into the crowd. Why the worry?

Well, the one day Day of Rage is on tap for tomorrow. And the way things are going in the Middle East, does anything get settled in one day? And do investors want to be long with a weekend ahead of them?

The good news is that these are external fears that may be short term in duration and may not have that big of an impact on our economy. Too early to tell what this means for oil prices. Oil was down big early on bad data, but recovered some on the Saudi worry.

So, tomorrow will be interesting. We keep having rallies that rescue us from the brink of a correction, but doesn't it feel like that's coming to an end?