I have twenty minutes before the public library opens; I hope to finish the new biography of Mary Shelley this morning.
Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or think you may have read here.
I normally do not write about the stock market in general, but I'm in a good mood, and as noted, I have twenty minutes to spare.
I'm not sure what all the hand-wringing was about yesterday, regarding the sell-off in the stock market.
"Everyone" has been anticipating a ten percent correction.
Let's see: the market returned about 35% last year, 50% over two years, and so there's a sell-off of 3% this week, and there is hysteria on Wall Street. Look at all the commissions: the brokers are paid regardless, sales or purchases.
No one, as far as I can tell, has even addressed the most fundamental observation: once the market sell-off began, and once the market was down 125 points or so, the machines took over.
Earning reports had nothing to do with this. Overall, earnings looked pretty good, and certainly no worse/no better than most quarters over the past several years, from a general, non-scientific, recollection.
No blue chip company imploded (should "blue chip" be capitalized?)(some of these examples were added after the original post to continue illustrating the point)
- Apple beat analysts' expectations but guided lower
- DuPont, the nation's biggest chemical maker by far, will buy back $5 billion of its shares after posting fourth-quarter earnings that exceeded analysts' expectations.
- IBM's fourth-quarter net income grew 6 percent, surpassing Wall Street's expectations even though revenue declined
- Microsoft, the software giant posted surprisingly strong sales of its Xbox videogame consoles and Surface tablet computers, helping drive quarterly revenue and earnings that topped Wall Street expectations. In response, Microsoft's shares rose about 4% in after-hours trading Thursday.
- oil holds at $96, the longest sustained period of "high" oil prices ... ever.
- natural gas more than doubles, solidly over $5/mmBTUs
- Starbucks, McDonald's, and Union Pacific all beat analysts' expectations
- Verizon had a blow-out quarter
- Baker Hughes, Schlumberger both beat expectations
China? One manufacturing index suggested a slowdown in China. I've talked about this at length; not gonna last unless the Chinese want to see mass civil disobedience by out-of-work young men.
The Argentina peso? Several readers sent me links to stories on the peso. Don was the first. If any one thing led to the sell-off, it was probably that -- what is now happening in Argentina. LOL. So everyone sold their shares in American companies because of fear of another crisis somewhere. GDP by country? Argentina ranks 26th between Belgium and Austria. Belgium? Give me a break. Among the states in the US, Argentina would rank about 9th, somewhere between Ohio and New Jersey, I suppose.
ObamaCare is already baked into the American economy. Jobless rates are falling across the nation, Bloomberg tells us. Unemployment is down to 6% or something like that, Reuters tells us.
This 3 percent sell-off certainly reeks of manipulation (even factoring in the fact that the machines took over after the initial 1 percent drop). None of the movers and shakers saw this coming. Warren Buffett had just committed to buying a unit of PSX. Mr Icahn just bought more Apple. Netflix had just surged $50 in one day. Jamie Dimon was just given a huge raise. Companies are raising their dividends.
So, let's hope for that 10 percent correction. "Everyone" has been talking about it for so long, we might as well get it over with. And provide the little folks with some great entry points.
Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or think you may have read here. The only reason I posted this was so I could post this video:
Don't Cry For Me, Argentina, Madonna
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