The Markets

• Based upon an improbable, and difficult to understand, jump in durable goods orders the futures have jumped up.  Helping orders were gains in computers/electronics, electrical equipment, machinery and fabricated metals.  Bulls are taking this to mean the economic stimulus is working.  How that can happen in thirty days must be explained.
• Williams-Sonoma reported a 90% drop in earnings and a 27% drop in revenues.  At the same time, Dollar General reports a 48% increase in earnings and an astonishing 15% increase in same store sales.  The latter figure is for stores open for more than a year.  The results of these two disparate retailers speaks volumes about consumer preferences.
• Goldman Sachs reports that it would not have lost money had AIG failed.  Makes one wonder how other financial organizations would have fared with AIG going under.  Do you suppose we had it all wrong about the “too big to fail” scenario?
• Yesterday’s UK gilts (bonds) auction did not go well.  There were not enough bids for the long dated issues.  Our Fed begins it’s quantitative (buying bonds in open market) today our bond market will be watched closely by sovereign banks.
• During the recent rally the market has yet to face really bad news.  While I am not encouraging ugly reports it would be interesting to see how the market reacts to some poor report.  Should it shrug off a corporate failure or errant bond offering it would inspire confidence to the bulls.

Sidebar

This is one of my tutoring days.  My third grade charge, Sage Gillen (terrific name!), always tells me about her week and whats new in the family.  She is but a wisp of a girl with a radiant smile. But she tends to make up words when she reads.  I suppose she does it to satisfy me but I keep telling her that she can’t fail when with me.  Just read what you see.  She smiles broadly then goes on to make up words she can’t make out.

Make it a great Wednesday!