Tuesday, 10/29, Market WrapUp (Consumer Confidence Plunges)

Financial Sense Online ^ | 10/29/2002 | Scott Middleton

[rohry]

 
Weekday Commentary
from Scott Middleton

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Consumer Confidence Plunges

Source: CNN/Money

STORM WATCH UPDATE Bubble Troubles Part I Double, double, toil and trouble; fire burn and cauldron bubble. Bubble Troubles Part II Yes, Virginia, There IS a Housing Bubble

Bubble Troubles Part III It Ain't Over Yet for the Stock Market

Tuesday Market Scoreboard  October 29, 2002
Dow Industrials		0.90	8368.94
Dow Utilities		0.14	194.36
Dow Transports		31.25	2248.23
S & P 500		8.08	882.15
NASDAQ		15.29	1300.54
US Dollar to Yen			123.16
Euro to US Dollar			.9828
Gold		2.50	318.10
Silver		0.10	4.510
Oil		0.43	26.86
CRB Index		0.80	227.36
Natural Gas		0.07	4.261
All market indexes	10/29	10/28	Change
HUI (Amex Gold Bugs Index)
Close  YTD	112.79	112.73	0.06 72.99%
52week High	147.82	06/03/02
52week Low	59.86	11/26/01
XAU (Philadelphia Gold & Silver)
Close  YTD	64.50	64.44	0.06 18.50%
52week High	88.65	05/28/02
52week Low	49.23	11/19/01

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 Market WrapUp for the Week 
Monday  l  Tuesday  l  Wednesday  l  Thursday  l  Friday

Week in Graphs Storm Watch Geopolitical News Energy Precious Metals Raw Materials

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^{Tuesday, October 29, 2002}

Confidence Lost
Recording its first back-to-back decline in three weeks, the S&P 500 Index fell, after the Conference Board said its index of consumer confidence fell to 79.4 from 93.7, posting its lowest reading in nine years and the fifth straight decline.

Energy shares such as Exxon Mobil Corp. and ChevronTexaco Corp. declined after BP Plc, Europe’s largest oil company, lowered production forecasts. Computer related stocks were dragged down by Cisco Systems Inc. amid concern a rebound in earnings will be delayed by a stalling economy.

All three of the major indexes spent most of the day in the red with the Dow being down as much as 169 points during the session. However, before the day ended, Procter & Gamble was given all the credit for the turnaround in the Dow as they posted a 33% profit increase this afternoon. The results were attributed to increases in sales of many of P&G’s product lines along with additional restructuring savings.

Without P&G the Dow would have finished down 22 points today. Before P&G’s announcement the market was telling us that the confidence numbers were something to be concerned with. The fading consumer confidence is an indication of a lack of confidence in the ability of this economy to grow and generate jobs, and if there are concerns about the economy, there is going to be doubts on corporate profitability.

Financial Markets
The S&P 500 Index fell 8.08, or 0.9% to 882.15, with energy and computer stocks contributing half the loss. The Nasdaq Composite Index shed 15.18, or 1.2% to 1300.65, and the Dow, helped by P&G, rebounded from a 2% drop and closed with a gain of 0.90 to 8368.94.

Volume totaled 1.42 billion on the NYSE and 1.56 billion on the Nasdaq Stock Market. Losers led winners by an 18 to 14 on the NYSE and 18 to 15 on the Nasdaq.

Overseas Markets
European stocks slid after consumer confidence plunged to a nine-year low in the U.S., the biggest customer for the region's products. DaimlerChrysler, which makes half its sales in the U.S., had its biggest drop since September 2001. Royal Philips Electronics NV, which sells flat-screen televisions in North America, also declined. The Dow Jones Stoxx 50 Index fell 4.5% to 2459.87, the most in almost a month. All eight major European markets were down during today’s trading.

Japanese stocks fell, led by automakers, after Honda Motor Co. lowered its full-year profit forecast. The nation's second-largest carmaker had its biggest drop in four years. The Nikkei 225 Stock Average fell 0.6% to 8708.76.

Treasury Markets
The 10-year Treasury note skyrocketed 1 5/32 to yield 3.95 percent while the 30-year government bond soared 1 1/4 to yield 5.025 percent. Separately, Moody’s Investors Service noted that corporate bonds have not responded favorably to the stock market’s three-week rally. In fact, investment grade bond yield spreads remained wide as Corporate bond investors have refused to bid aggressively for most corporate debt obligations.

Copyright © Scott Middleton
October 29, 2002

[rohry]

Posting problems again (do I sound whiney?)...This is my 6th attempt...

[EVO X]

do I sound whiney?)

Yes. However, I will side with you tonight. I got an internal server error message from The FR server..

[rohry]

Market WrapUp is delivered...

I almost gave up, however.

Over one hour to post an article is unacceptable...

[rohry]

Market WrapUp is delivered...

I almost gave up, however.

Over one hour to post an article is unacceptable...

[RightWhale]

Watching the $US to $EU every day. It's moved up a cent this week, but otherwise seems to be fairly stable. At least we are keeping even with the Euros, which might not be so wonderful considering their economy is not exactly robust either.

Also, it seems that new car sales are looking weak even with zero percent financing. Guess we are bought out for the time being. Since 'cars' is a big part of consumerism, the consumer index would naturally look discouraging.

Ginnie May has edged back up again. It tends to indicate that investors are feeling a little more cautious again.

Still waiting for the signal to jump back into stocks. No hurry, it won't be right away.

[imawit]

Anybody have the phone number for the administrator. Whoever should let us know what's happening.

Do you think this will clear up after the election ?

[imawit]

Still waiting for the signal to jump back into stocks

Hey there, just what is that signal going to look or sound like ?

[Cagey]

Over one hour to post an article is unacceptable...

It's subliminal advertising pushing Molasses Futures.

[sourcery]

Hey there, just what is that signal going to look or sound like ?

Dead silence. Seriously. When the bottom comes, most people won't care about stocks, nor wish to talk about them. When stocks are so out of favor that you can buy $1 of annual income for about $7, that'll be the time to buy.

[Moonman62]

Before P&G’s announcement the market was telling us that the confidence numbers were something to be concerned with.

P&G announced before the bell, so the above conclusion is wrong.

The fading consumer confidence is an indication of a lack of confidence in the ability of this economy to grow and generate jobs, and if there are concerns about the economy, there is going to be doubts on corporate profitability.

Correct, but the market doesn't care about consumer confidence (a universal mistake made by the chowderheads in the media), it cares about forward looking consumer expectations, which were bleak.

My guess is that the turnaround today was due to the market discounting a Republican victory and economic policy changes after the elections, plus some long overdue rate cuts from the dictator at the Federal Reserve. Of course, if those things don't happen the market will take back everything it's given, plus a lot more.

[RightWhale]

just what is that signal going to look or sound like ?

An interesting question. No cheap answer. Mainly things have to look better. Looks like stagnation now.

[Lunatic Fringe]

Hey there, just what is that signal going to look or sound like ?

When you hear the media saying stocks are dead, when your neighbor says "I'll never buy a stock again," when your friend calls you a fool for thinking about buying Microsoft... That will be the time to get in.

[rohry]

I just saw Michelle Malkin on O'Rielly. Man was she good!

Close the borders now!

[spokeshave]

"Still waiting for the signal to jump back into stocks"

What's the frequency Kennith....?

[Cicero]

FR was flaky today for the second day in a row. One minute you just can't get through, five minutes later everything works great, and then after another few minutes you can't get in.

There must be some kind of basic problem at the server. I haven't been having any problems going elsewhere on the net these past two days.

[imawit]

Awwww. You guys are just tooo technical. Any gut feels out there ?

[Always Right]

Still waiting for the signal to jump back into stocks. No hurry, it won't be right away.

The buy signal is pretty strong right now. The markets have hit their bottom and there will be a decent bull market over the next year or so. There is no real downside to the market right now, but there is a moderate up side. When the DOW hit under 7500 was the best buying opportunity.

[imawit]

There must be some kind of basic problem at the server. I haven't been having any problems going elsewhere on the net these past two days.

Ok, you're appointed, let us know what the administrator has to say.

[imawit]

The buy signal is pretty strong right now

Just when everything has just careened over this latest hump and headed down again ?

[arete]

There is no real downside to the market right now,

Oh baby, I got to save this one.

Richard W.