Stock Market 4/24

[khosk]

I took a couple of days off and things definitely have gotten interesting. Job claims data for the week came in a little higher than two weeks ago but not as high as three weeks ago. This report was a reminder that we are in a nasty recession but not bad enough to panic.

Earnings season is under way and there are some pretty big disappointments and some pretty big surprises. The two huge surprises are Apple and Amazon. They both came in with stronger earnings than predicted. And there were two bad surprises. Apple's Yang, Microsoft, disappointed in a big way. I am not a fan of Microsoft and I think they are really struggling with a technical paradigm shift so for me personally I don't chalk this up to the economy but to poor execution. But what I do chalk up to the economy and especially surprising since Amazon did better is UPS. They turned in a very disappointing quarter which again is a pretty strong reminder that we are in a nasty recession.

The other big bad news today was new home sales. It dropped 3% from the previous month which again is a reminder that we are in a nasty recession and so on and so on.

So we had some bad news and the market didn't really care today. The belief among some with money to keep the market up is that we are in the bottom of the economic downturn and it's time to keep buying into the rocket ship that is preparing for take off. They may be right or they may be wrong, time will tell. I honestly don't have a clue.

[khosk]

Right now futures are up a little. Car companies will be the big story in the morning. Chrysler's fate is fast approaching and that appears to be bankruptcy and a liquidation. There is no deal that can be done because the banks do best in a liquidation and they have to sign off on any deal. GM is on the back burner but their fate approaches and it appears they will also enter bankruptcy but will not be liquidated.

And the car company that did not get bailed out reported earnings this morning. It was a very ugly quarter for Ford with negative cash flow of 3.7 Billion dollars. But not as ugly as expected so the market could respond favorably to these results. Ford has successfully been renegotiating it's obligations outside of bankruptcy protection and it appears that is giving the company a pretty good fighting chance. Go Ford.

Two economic reports are on tap today: Durable Goods and the Government Housing Report. Any indication from these reports to the positive side could send the market up big with also some better than expected earnings report this morning. Cross your fingers because a good trading day could wash away the bad start from this week.

Timothy Geithner will unveil details of the stress test methodology to G7 Ministers. I don't think this will be a market moving event but when he talks, the markets sometimes react.

[johnnyb]

u da man ken, welcome back, hope you enjoyed your vac!

[khosk]

The Economic reports are in and they are bad. The market is up about 90 but I don't see how it can hold. Durable Goods were down 0.8%. New Home sales were down 0.6% but February was strong so a drop is not unexpected. These aren't panic numbers and make a run on the banks but they are numbers that indicate the recession is still going strong and things are getting a little worse.

Details of the bank stress test will be revealed to the public later today with actual results released on May 4th. Regions bank is expected to be the only bank to fail the tests. More government aid is expected for some banks with Bank of America being the most likely. Conversion of preferred shares to common equity, like with Citibank, is expected for many of the banks meaning the government will own a larger percentage of the big banks.

The FSOB has sent a draft of a plan to temporarily nationalize the big banks to clean them up, get them fixed and back into private hands meaning that the idea of complete nationalization of some of the large banks took a step forward to being a reality.

Bank stocks are down slightly.

[usc90grad]

Ford is running....glad to see it back above $5.....

[gamecocknva]

I think its going to be a bad day for a lot of commerical property/casualty insurance stocks once they post their numbers. A lot of them were right under a 100% combined for 2008. With the soft insurance market they should post losses for the first quarter.

Sources said last night that Hartford is going to put their property/casualty book up for sale.

[khosk]

Market is up 115. Amex earnings surprised. Companies that should be tied to consumer spending are surprising everyone: Amex, Amazon and Apple. The threes A's. Strange days.