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Weekly Bull/Bear Recap: Apr 25-29, 2011

Tyler Durden's picture




 

Submitted by Rational Capitalist Speculator

Weekly Bull/Bear Recap: Apr 25-29, 2011

Bull

+ Earnings and revenues for various   bell-weathers portray improvement in corporate performance.  Revenue-beat rates are the highest since the bull market began (there’s your top line growth bears).  A steady trend of share buybacks and increased dividends will keep the bull market trend in place since March 2009 intact as companies return profits to investors. 

+ The Bull Market rolls on as the Dow Theory is confirmed with both
DJ Transportation & Industrials averages breaking through their
prior bull market highs.  The S&P 500 and Nasdaq have finally confirmed as well by breaking their previous bull market highs set in Feb.  Even better, there’s a good bit of skepticism out there in regards to this latest breakout, the wall of worry remains.

+The Chicago Fed National Activity Index points to above-trend economic growth
and refutes claims that economic activity has fallen.  Manufacturing
continues to lead the way and the report points to strong contributions
from the Job market.  Small businesses are slowing recovering and
hiring is increasing in breadth.  

+ Durable Good Orders rise
a healthy 2.5%, while core-capital goods rise a strong 3.7%.  Orders
have now risen for 3 straight months.  Shipments climb for the 5th
straight month as well.  Meanwhile, Chicago’s Midwest Manufacturing
Output index increases 1.9% led by strong auto-related production.  Finally, ATA truck tonnage levels and recent railroad data point to continued expansion in the manufacturing sector.

+ Consumers continue to spend as evidenced by recently released weekly sales metrics and the Restaurant Index.  Easter demand has been solid thus far.  Consumers have become accustomed to higher gas prices and continued improvement in the job market will ensure that spending growth continues.

+ The Conference Board reports that consumer confidence for April continued to stabilize
as the “current conditions” component rose for a 7th straight month. 
The recovery continues.  Plans to buy a house, an auto, or an appliance
rose in renewed confidence that incomes will improve in the months
ahead.  This confirms recent improvement from the University of Michigan sentiment survey.  

+ Despite all the bearish chatter, manufacturing orders continue to pile up for the Eurozone and confirms that the recovery continues in that region.  Strong demand from Asia confirms that the global restructuring is taking place. 

Bear

- Jobless claims disappoint again
surging to 429K, marking the highest level since January while last
weeks’ claims were revised….guess.  Job growth has effectively stalled
as more companies find it better to seek cheap labor outside of the US and heightens the risk for protectionist sentiment coming from Washington in the months ahead if things don’t improve. 

- The housing double-dip is knocking at the door as Case-Schiller Home-Price Index reports the 7th straight month of lower prices.  What led us into the Great Recession has just recommenced its second dip
The banks are sweating as well.  They have clearly failed to
participate in the latest run up in equity prices (XLF, BKX).  Bank
balance sheets are not prepared for a double-dip in home prices.

- Manufacturing around the nation is showing signs of a considerable slowdown in growth as Dallas, Richmond, and Kansas
manufacturing surveys come in way below expectations. Manufacturers in
Richmond signal that Inflationary pressures will be hitting the consumer
very soon and bodes ill for an already fragile consumer confidence…

- …and speaking of consumer confidence, we got more bad news on that front as well as the Gallup Poll reports yet more deterioration.  The Bloomberg Consumer Comfort survey has followed suit as well.  Meanwhile, UK consumer confidence is probing the 2009 depths of despair (austerity is a sharp double-edged sword).

-  The Eurozone continues to simmer.  Portugal, for the second time now, revises its deficit upwards from 8.6% to 9.1%.  Same deal with Greece
(restructuring seems inevitable here).  Next victim for the bond
vigilantes?  Spain would be a too big to bail out economy if it came
under stress and it has been lately.

- Signs continue to come from China that things are getting pretty
hairy over there.  While the S&P 500 broke through to bull market
highs, the Shanghai Composite just broke below its 50-day moving average.  Inflation is getting worse in China as officials haven’t done enough to quell sticky wage-fueled inflation.  Growth is slowing as well.  All these signs point to a stagflationary scenario in the upcoming quarters.

- Q1 GDP comes in a mediocre 1.75%
(less than expectations), with the all important Real Final Sales
metric (=end-demand) registering a pitiful 0.8%, the lowest since Q3 ‘09
and much lower than the 6.7% rate in Q4.  Cuts at the state and local
gov’t level are being felt as well.  While Consumption did rise higher
than expectations, let’s not forget that oil prices averaged under $100 a
barrel.

 

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Sat, 04/30/2011 - 11:29 | 1223955 PingaYourFace
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So, basically, BTFD? Or am I missing something?

Sat, 04/30/2011 - 19:20 | 1224583 Intellectual Chaos
Intellectual Chaos's picture

If people are dumb enough to wake up at 4 in the morning to watch a bunch of english monarchs tie the knot and believe that it has some political relevance then they are certainly gullible enough to believe Ben Benankinstein and his mad scientist creation of our economy and thereby will keep buying this market.  It's really that simple.

Sat, 04/30/2011 - 11:33 | 1223960 CrashisOptimistic
CrashisOptimistic's picture

And not a word about the only thing that matters.

$114.

Sat, 04/30/2011 - 11:36 | 1223967 PingaYourFace
PingaYourFace's picture

They are just trying to keep enough bearish sentiment in place to suck in some shorts that the HFT's can continously squeeze out. That close on friday looked like a bunch of margin calls popping.

Sat, 04/30/2011 - 11:59 | 1224015 DavidC
DavidC's picture

That was very weird, 30-40 points on the Dow in about 3 minutes at the close.

DavidC

Sat, 04/30/2011 - 11:39 | 1223974 SwingForce
SwingForce's picture


Second Friday Night Economic Bomb Sends Gold Surging To $1,566 As Ireland Slashes Outlook


And another economic fail, this time an attempt from Ireland to bury bad news on a royal wedding, later afternoon Friday:

  • Ireland revises 2011 GDP growth to +0.8% from +1.7%; 2012 to +2.5% from 3.2%
  • Irish govt revises 2013 deficit forecast to 7.2% from 5.8%; 2012 to 4.7% from 2.8%.
  • Ireland revises 2011 debt/GDP forecast to 111% from 98.6%; 2012 to 116% from 102%

Sat, 04/30/2011 - 11:52 | 1223995 uformula
uformula's picture

CrashisOptimistic, ----- Check out the "bad news" link under

- …and speaking of consumer confidence, we got more bad news on that front as well as the Gallup Poll reports yet more deterioration.  The Bloomberg Consumer Comfort survey has followed suit as well.  Meanwhile, UK consumer confidence is probing the 2009 depths of despair (austerity is a sharp double-edged sword).

for your oil news. 

Sat, 04/30/2011 - 11:58 | 1224018 mberry8870
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I tried to post the following ling on my face book account and got the following message: This message contains blocked content that has previously been flagged as abusive or spammy. Let us know if you think this is an error.

http://www.youtube.com/watch?v=GTQnarzmTOc

Speaking of things that make you go Hmmmmmm....

Sat, 04/30/2011 - 13:15 | 1224115 bmwm395
bmwm395's picture

Thought that video was great. It linked fin to my facebook.

Sat, 04/30/2011 - 12:01 | 1224026 DavidC
DavidC's picture

Yup, all bad news this week completely ignored (well, Benny was on TV in the US and we had a Royal Wedding to look forward to in the UK).

Fukushima and the tsunami now just a footnote in history, S&P's US rating change to AAA negative just a late April Fool joke, everything from 2008 now resolved and improved...

I feel ill.

DavidC

Sat, 04/30/2011 - 12:06 | 1224028 RobotTrader
RobotTrader's picture

After missing a 6200 point rally in the Dow the last 2 years, Rosie finally capitulates and goes long:

http://pragcap.com/david-rosenberg-turns-bullish

Now if we can only get Nic Lenoir, Paul Farrell, and Jeffrey Gundlach to go long, the rest of us can short huge....

LOL....

 

Sat, 04/30/2011 - 12:30 | 1224034 mfoste1
mfoste1's picture

no such thing as a bear event anymore....global catastrophes are now bullish. dynamics for a bear event to be present will be preceeded only by a sharp liquidity reduction. topping processes take time to develop, and markets arent even there yet, the bull run is in very strong force now. dont be stupid and try to sell rallies, just btfd if you wanna make money. I still cant believe people are trying to short this, they need to turn off the news and watch their charts. there is still lot of time left to follow the money and just btfd.

pres election next year, so its highly unlikely the markets will go down the tube. The fact that many people are still bearish is a good contrarian sentiment for further gains in equities and commodities, short usd. When there are no more bears left, then its time to worry.

Corporates are making record profits, so you must ask yourself this question, why are they hoarding all this cash?hmm This is playing out somewhat similar to 08, only thing is that housing, credit and labor markets are already in the toilet. When the next crash does finally happen, it will be more devastating than anything ever seen in modern human history. until then, party like its 2006!

Sat, 04/30/2011 - 13:33 | 1224140 Jovil
Jovil's picture

Can you imagine Mexico getting a higher credit score than the US?

http://lonerangersilver.wordpress.com/2011/04/30/u-s-gets-c-credit-ratin...

Sat, 04/30/2011 - 13:42 | 1224158 legal eagle
legal eagle's picture

Is gold and silver up bear, or bull?

Sat, 04/30/2011 - 16:37 | 1224414 smlbizman
smlbizman's picture

so insiders continue to sell at a mad pace.....but stock buybacks are up....what am i missing?

Sat, 04/30/2011 - 19:59 | 1224635 Dixie Rect
Dixie Rect's picture

I gots the toe jam, who gots the peanut butter?

 

Sat, 04/30/2011 - 20:08 | 1224640 knowless
knowless's picture

russia banning exports of refined oil products, liberal party leaders call to nationalise production? what's up with this?

 

http://www.themoscowtimes.com/business/article/petroleum-exports-banned-...

Sun, 05/01/2011 - 02:24 | 1225044 Dan The Man
Dan The Man's picture

 

really starting to love Russia for their take on amerika

http://rt.com/usa/news/fines-bans-rage-nyc/

 

Sun, 05/01/2011 - 03:19 | 1225070 D1eeeeeNAHHHHH
D1eeeeeNAHHHHH's picture

Syria+Russia=Less Available oil, hmmm, Oil 118 by US Oil option experation week?

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