We’re officially in a bear market. If Jim Cramer, the permabull, admits it, then it must be true, and I’m inclined to agree. I’m also tempted to say that the U.S. is currently in a recession (in, not approaching), but that’s just my view. Quick recap of today’s events include:
Citigroup (C) missed earnings by almost 50%, cut their dividend, and took a huge writedown to their balance sheet. The stock took a 7% hit to all time lows.
Intel (INTC) missed earnings after the bell resulting in the stock being crushed 14% as well as bringing the entire Nasdaq down with it after hours. Others such as Google, Amazon, EMC took 2-3% hits AFTER the markets closed. Expect the tech sector to open down hard tomorrow.
Markets posted another 2-3% decline today, bringing their YTD totals to about 6% to the downside. We’re in a bear market and don’t let anyone tell you otherwise.
Options expiration is this week. On Fast Money, they commented on how the Fed cut rates last year on Friday expiry. Could the Fed do the same this Friday as a surprise? If the markets continue to tank, it’s a good possibility. Currently, the markets are pricing in a 50bp cut with a 44% chance of a 75bp cut. A 75bp cut would be a cause for alarm signaling to the markets that things may be as bad, if not worse, than it seems
I had a rough day, taking a huge hit to the portfolio with my GILD play. GILD failed the ascending triangle breakout I had drawn last week and as a result I had to bail. I may take the rest of the week off and let this mess sort itself out but we’ll see. Any time I take a day off, the urge to jump back in the markets grow. I know part of the problem, besides not being able to day trade, is the small account size I’m trading with, but I’d rather play the game with something than with nothing at all.
Good luck the rest of the week. Looks like everyone’s going to need it.
Thanks to Susan for the link! I’ve been looking for this clip for a couple of days now.
It’s amazing to see realtors out of touch with the economy. I understand that folks have jobs and need those jobs to feed their families and to survive, but there has to be some admission, any admission, that things aren’t well with the US economy. To see the NAR out of touch with reality concerns me and should concern every last person out there looking to buy a home. A press release by the NAR a day before the video above was released regarding the housing market.
NAR President Pat V. Combs, from Grand Rapids, Mich., and vice president of Coldwell Banker-AJS-Schmidt, said the good news is that the mortgage picture is improving. “Mortgage interest rates have been declining and loan availability is improving,” she said. “Movements to enhance the FHA loan program and to raise the limits for conventional financing could provide additional relief, and it looks like the worse of the mortgage availability problem is behind us.
“The abundant choice of homes is permitting buyers to better negotiate price and terms. There are good opportunities in the market now, especially for first-time buyers.”
Mortgage rates have not been declining as some thought with the FOMC interest rate cut. Housing prices have been in an almost free fall for a few months now. First time home buyers, such as myself one day, will lose money before closing on their new purchases is complete. Taking a $20k to $30k hit the first year of home ownership isn’t just a loss of asset value, it’s demoralizing to the buyers. I understand that families need shelter but I’d be hard pressed to leave my rental unit until housing prices stabilize and I could afford to buy my own home. The NAR needs to stop looking after themselves and looking after the home buyers they represent.
This week Jim Cramer, host of Mad Money on CNBC, was on the cover of Barrons magazine. Why? I have absolutely no idea. You would figure with the 180 the Fed pulled last week in cutting the discount rate, or the ongoing issues with the housing and financial markets, Barrons would publish something a bit more relevant to the current market.
I think people misjudge what Mad Money is supposed to do. It’s not a TV show that tells you what to buy and when. It’s an educational show. It’s something that hasn’t been and probably won’t be taught in schools around the country. Kids in school have very little in terms of financial knowledge once they graduate from either high school or even college. That’s part of the reason the country’s in a financial mess right now. Mad Money shows you how to invest, not what to invest. The problem is folks take shots at whomever they can whenever possible, even if the facts those shots are based off of are completely false. I’m sure the Barrons article has nothing to do with Dow Jones selling to FOX though. Why would you have such a controversial article on the front.. oh.
