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Bull/Bear Weekly Recap: Apr 18-22, 2011

Tyler Durden's picture




 

Submitted by Rodrigo Serrano of Rational Capitalist Speculator

Bull/Bear Weekly Recap: Apr 18-22, 2011

Bull

+ The Conference Board’s Index of Leading Indicators showed a larger than expected increase of +0.4%
Last month’s reading was also revised higher from 0.8% to 1.0%.  The
results point to strengthening economic activity and a sustained
growth trajectory throughout the year. 

+The Job market continues its recovery as the JOLT Survey shows increased job openings.  Meanwhile, the Gallup Poll is signaling a decreasing unemployment rate.
Its “Job Creation” survey notched its highest reading of the recovery
this past week.  Job gains will add cash to the economy and keep
consumption growth sustainable. 

+ Weekly consumption metrics show that US consumers have taken another leg up with regards to their spending habits.  Higher oil prices haven’t affected the great American consumer to this point.  

+ Improving confidence shows
that US consumers are more comfortable in dealing with higher oil
prices.  Falling home values won’t have much of an effect anymore given
that the bulk of the shock has already been taken.  Consumer’s have
come to expect that home values will remain low for sometime to come. 

+ Eurozone economic numbers show
that the region is recovering despite recent headwinds such as the
Japanese earthquakes and higher oil prices.  Continued steady growth
will offset recent austerity measures on the periphery.  

+ Intel results shine (a triple play!)
and confirm continued growth in the global economy as businesses
expand and require new equipment.  Intel is a global bell weather so a
positive report from the company is a harbinger of continued business
spending.  Guess who else tripled?  IBM.  (I don’t own any Intel or IBM
nor am I shorting them). 

+ If you look objectively, you can see signs that the manufacturing recovery is for real.  A manufacturing renaissance is occurring in America fed by large emerging market demand
Jobs will be created and the virtuous cycle of jobs feeding
consumption will help the recovery gain strength in the months ahead.
(I don’t own nor am I shorting United Tech, or Eaton)

Bear

- So the job market is getting better eh?  Not from the looks of Jobless Claims reports
We have our second consecutive reading above 400,000.  This hasn’t
happened in over 2, close to 3 months.  Job growth has effectively
stalled and a major thesis point for the bulls is under increased
scrutiny.  Last week’s report was revised…(guess: up or down?).

-US “AAA” outlook is downgraded from stable to negative as per S&PPoliticians
still haven’t put together a credible debt-reduction plan.  It’s only a
matter of time before investors seriously question the payment
ability of the US.  While the US is the monopoly issuer of its
currency and will definitely pay back its obligations, rising commodity
and precious metals prices signal that investors question whether
they’ll be paid back with worthy dollars or just pieces of paper that
can be burned for heat Weimar style. 

- You’d figure the large plunge in the April reading of the Philly Fed Manufacturing Index
was due to the disruptions in Japan, yet 80% of respondents said that
recent developments in Japan had no affect on them or their customers,
10% said that there were “Possible Future Effects”, and 10% said there
were “Some Current Effects”.   

- The higher the markets go, the “stronger the recovery gets”, the tighter the nose of higher oil prices becomes.  Eventually, the headwind will be too much for the US consumer to bear.  Consumer Confidence according to the Gallup Poll continues its downward trend, not confirming the Bloomberg survey.  It’s only a matter of when, not if.

- Things are apparently getting icky
in China with increasing protests regarding inflation.  Chinese
officials are in a very tight spot and the situation closely resembles
what I though would eventually happen when I wrote this article a little over a year ago.  Worse even is that inflation will probably remain sticky in the months ahead.  Will protests begin to have an effect on economic productivity?  Very likely.  It’s already causing some serious margin squeezes.   

- The Finnish elections along with further rumblings of a Greek restructuring have sparked another scare for the Eurozone (saw that one coming as soon as the election results were being disseminated). 
While the news regarding Greece was bad, it was even worse for Spain
as yield spreads are under upward pressure again after a substandard debt issue

- While some housing reports may have come in better than expected
recently, looking at the forest instead of the trees shows us that the
housing market still flat out stinks.  We officially have an “L-shaped recovery” in this sector.  Sales remain depressed and there are no “move-up buyers”, only cash-deals by investors.  Home Prices (the commoner’s largest asset) keeps on falling

 

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Fri, 04/22/2011 - 13:32 | 1196630 what about my dog
what about my dog's picture

L-Shaped Recovery Bitchez!

Sat, 04/23/2011 - 07:07 | 1198663 thatthingcanfly
thatthingcanfly's picture

Why is it "cool" to regurgitate a random byte from the article and punctuate it with the (misspelled) word for a female dog?

I mean it. I really don't get it. Why is something like this present for EVERY ZH article?

Do these people really not have anything intelligent to add? How do they keep getting the CAPTCHA problem right?

Sun, 04/24/2011 - 01:54 | 1200369 Dirt Rat
Dirt Rat's picture

It's a meme from one of the early posters on ZH, chumbawumba, I think. He coined the mantra, "Gold, bitches!"

Fri, 04/22/2011 - 13:36 | 1196636 hugovanderbubble
hugovanderbubble's picture

Good Evening from Europe Tyler

Would u be able to post the same IYC - Yield curve snapshot for other Periphericals (Portugal,Spanish,Ireland,Italy) as the one you have posted earlier about Greek Curve?

Haircuts - Forgiven debt schemes-  gonna be the major theme the next two quarters.

Honestly any kind of haircut is dillutive for financials and insurers and specially for asset managers that holds in their portfolios those bonds.

I expect a severe retracement in sp to 1175-1215 from current prices. Then banks would be recapitalized and pseudo-reseted.

*My humble tip long Volatility (VIX)

*Sell German and France Equities (Cos their exposure to greece debt- Deutsche Bank ;Commerzbank, Credit Agricole, SocGen) > 11.000 Mn Euros with 70% haircut coming....yes 70 sir...Goldman is in troubles.

*Unload Commodities (Specially Soft ones)-

*Begin overweighting USD vs GBP and EUR

 

*My Unique big deal is where the inflation gonna be next months (so neutral biased)

 

Mon, 04/25/2011 - 14:28 | 1204521 thames222
thames222's picture

let's look for inflation to rise steadily until summer, and maybe up through the holiday season.  things are actually looking scary for consumers price-wise, the storm has just begun.

 

www.forecastfortomorrow.com

Fri, 04/22/2011 - 13:40 | 1196641 no2foreclosures
no2foreclosures's picture

Did everyone get taken up in the Rapture?  Where's everybody?

I just love the fortune cookie means in which the American financial media is now played.

Take for example, the words "US “AAA” outlook is downgraded from stable to negative as per S&P."

What's the operative word in that sentence? Outlook.  What the hell does that mean?

Next thing we are going to get is the "consensus or projection on the U.S.S. AAA outlook"!

Everything major in the United States is a Ponzi Scheme.  Beginning with the manipulation of words.  For further example, what the U.S. and Nato are doing to Libya is not a war, but some remote-controlled humanitarian effort to help the Libyan people (viz., depleted uranium with a half life of 4.3 billion years!).

Fri, 04/22/2011 - 20:57 | 1198011 knukles
knukles's picture

John,
Just got back from the Rapture.  Great time.  Lotta strange people, not many dead normies like us.  Had some great workshops.
Looking down on it all, it's clear that everything is going to plan.  New Muslim crescent across MENA, unified Muslim caliphate, great for continued synthetic war on terror and abdication of domestic rights, higher taxes, etc.  You know, the new 1984, orwell was right.  Saw him there, BTW, great fellow. 
Likely continued looting of the peasantry class, even moving up the food chain to the very well off... gotta steal from where the money's at, eh?
Continued demolition of the USD, what with the fall of the Euro and EU, chink's open for the elite to institute the desired new world government and currency.
No surprises.  Great trip, better than any cruise I been on!  Enjoy the screwing!
God Bless and Happy Easter,
Jesus

Fri, 04/22/2011 - 13:37 | 1196643 Jonas Parker
Jonas Parker's picture

More like a "backslash shaped recovery" ( \ ), reading from left to right of course!

Fri, 04/22/2011 - 13:59 | 1196723 Dan The Man
Dan The Man's picture

 

Gold/Silver going to 10-1

Fri, 04/22/2011 - 14:03 | 1196739 Silver Bug
Silver Bug's picture

Any debt reduction plan they come up with is going to be insignificant in the grand scheme of things. The debt is out of control. QE to infinity is assured.

 

http://silverliberationarmy.blogspot.com/

Fri, 04/22/2011 - 22:28 | 1198212 Tail Dogging The Wag
Tail Dogging The Wag's picture

"Investors need to diversify, they need to own some real estate, they need to own some farmland, they need to own some equities, some cash, and some precious metals..."   Marc Faber —Investment analyst

Got real estate and farmland outside your home country yet?

http://www.thorssoncapital.weebly.com

Mon, 04/25/2011 - 14:21 | 1204496 tomster0126
tomster0126's picture

Here's my summary of the next week or two: dollar dies, is replaced with electronic currency, mass panic ensues, war erupts. 

 

maybe not, but something big is happening.  soon.

 

www.forecastfortomorrow.com

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