November 12, 2011 at 11:31 AM EST
An Encouraging Week For U.S. Market In Spite of Turmoil!
Saturday, November 12. 11:30 a.m. The volatility was brutal again this week. In just over two weeks we’ve seen the Dow gain 501 points in two days, plunge 573 points in two days, bounce back 386 points in two days, plunge 389 points in one day, then bounce back 371 points in two days. Enough [...]

Saturday, November 12. 11:30 a.m.

The volatility was brutal again this week. In just over two weeks we’ve seen the Dow gain 501 points in two days, plunge 573 points in two days, bounce back 386 points in two days, plunge 389 points in one day, then bounce back 371 points in two days.

Enough already!

And yet there has been less volatility than was experienced in August and September when the Dow moved up or down as much as 630 points in a day, as much as 760 points in 3-day stretches.

Yet like that prior period, in spite of the huge recent moves, the market has gone nowhere over the last two weeks. 

111211e

In early October a sideways trading range began from the August low. It broke out of the range to the downside in early October to anew low, but only by a fraction. It then began an impressive rally that broke it out of the range to the upside, and it kept going until two weeks ago.

But now it has been back to going sideways for two weeks.

However, it could have done a lot worse given that the two-year long ‘worst case’ threat from the eurozone debt crisis seemed to have finally arrived. First an almost collapse of Greece, and within days a similar almost fate for Italy.

And the result was obviously worse for some global markets.

111211f

Yet, as I’ve been saying for several weeks, if only we could ignore Europe there are encouraging signs that the U.S. economy has bottomed and a nascent recovery is underway.

In the last couple of weeks reports have shown that economic growth accelerated in the 3rd quarter, GDP growth coming in at an annualized rate of 2.5%, after only 1.3% growth in the 2nd quarter.

Moving into the 4th quarter, auto sales were strong in October, 7.5% higher than October of last year. And while last Friday’s employment report was that only 80,000 new jobs were created in October, a bit short of the 90,000 that were forecast, there were substantial upward revisions to previous reports. The number of jobs created in September was revised to 158,000 from the previously reported 103,000, and hiring in August was revised up to 104,000 new jobs from the previously reported 57,000.

Also on the jobs front, the Labor Department reported Tuesday that job openings in U.S. workplaces rose almost 10% to 3.35 million in September, the highest level since August 2008, with overall job openings rising to 22% above a year ago.

And yesterday the Thomson Reuters/University of Michigan reported its Consumer Sentiment Index, which had been worrisome all summer, climbed to 64.2 in November from 60.9 in October, and its best reading since June, much better than the consensus forecast of only a slight improvement to 61.5.

So perhaps there are reasons why the U.S. market has not succumbed as much to the eurozone fears as it might have.

But can it hold up if the eurozone crisis is not really over and the news from Europe continues to cycle between encouraging and discouraging?

Other Voices:

Financial Times:

“Papademos Takes Reins Amid Haggling.” “Greece’s new interim government, headed by Lucas Papademos, a former central banker, was sworn in on Friday after tough bargaining over cabinet posts. . . . Mr. Papdemos’s chances of being able to turn Greece around are limited as his mandate lasts only about 100 days before an election is expected February 19 under a cross-party deal made before he was appointed interim premier.

“100 Days of Solitude.” . . . . “The world worried about the wrong number this week as Italian borrowing costs headed over 7% and into bailout territory. . . . . The yield had fallen back to 6.5% by Friday. But the really troubling number came from Greece where it was announced that the unemployment rate has climbed to 18.4%. . . The situation will surely worsen in December. Investors and policy-makers need to consider the implications of that. It is proof that the Greek economy is deteriorating, not improving. Any chance Greece has of reaching its bailout targets are therefore that much slimmer. Moreover time is short. [The new interim prime minister has only until Feb 19 to turn Greece around before the election February 19]. German and French officials deny that a smaller eurozone is quietly being cooked up. . . By adding political chaos to financial incoherence, this week’s developments have hastened, not averted, Greece’s exit from the eurozone.”

The Economist:

 “Staring Into The Abyss.” “The euro crisis might wake Europe up. But more likely it will lead to compromise and decline.”  

Barron’s (Alan Abelson’s column): “Shadow Deepens Over Europe.” Equities markets perked up at the pledges of reform from Athens and Rome, but eurozone bond markets smell recession, and fear of contagion persists.”

A Thank You to Timer Digest.

A big thank you to Timer Digest for our ranking in their Top Ten Stock Market Timers list again in their October issue, and continued top ranking in their Top Five Bond Timers. Slid to #2 Bond Timer from #1 though.

Subscribers to Street Smart Report: In addition to the charts and updates in the ‘premium content’ area of this blog this morning, the new issue of the newsletter is in the subscribers’ area of the Street Smart Report website from Wednesday, and we’ll have a special report on Global Markets on Monday.

Yesterday in the U.S. Market.

A big up-day to end a most volatile week. Volume on the Veteran’s Day holiday was not as light as might be expected on a holiday, with 0.8 billion shares traded on the NYSE.

The Dow closed up 259 points, 2.2%. The S&P 500 closed up 2.0%. The NYSE Composite closed up 2.1%. The Nasdaq closed up 2.0%. The Nasdaq 100 closed up 1.9%. The Russell 2000 closed up 2.6%. The DJ Transportation Avg. closed up 2.8%. The DJ Utilities Avg closed up 1.3%.

Gold closed up $30 an ounce at $1,789 an ounce.

Oil closed up $1.22 a barrel at $99.00.

The U.S. dollar etf UUP closed down 1.0%.

The U.S. Treasury bond etf TLT closed down 0.6%.

Yesterday in European Markets.

European markets also closed up strongly yesterday. The London FTSE closed up 1.9%. The German DAX closed up 3.2%. And France’s CAC closed up 2.8%.

Global markets for the week.

A mixed week. Asian markets probably left behind as they were closed when Europe and the U.S. decided yesterday that they liked the latest news from Greece an Italy.


THIS WEEK (November 11)
DJIA12153+ 1.4%
S&P 5001263+ 0.8%
NYSE7576+ 0.3%
NASDAQ2678- 0.3%
NASD 1002355- 0.1%
Russ 2000744- 0.2%
DJTransprts4977+ 1.3%
DJ Utilities453+ 0.4%
XOI Oils1,251+ 0.7%
Gold bull.1,789+ 1.9%
GoldStcks212+ 1.7%
Canada12276- 1.1%
London5545+ 0.3%
Germany6057+ 1.5%
France3149+ 0.8%
Hong Kong19137- 3.6%
Japan8514- 3.3%
Australia4358+ 0.4%
S. Korea1863- 3.3%
India17192- 2.1%
Indonesia3778- 0.1%
Brazil58546- 0.2%
Mexico37555+ 2.4%
China2598- 1.9%
LAST WEEK (November 4)
DJIA11983- 2.0%
S&P 5001253- 2.5%
NYSE7552- 3.2%
NASDAQ2686- 1.9%
NASD 1002356- 1.9%
Russ 2000746- 1.9%
DJTransprts4912- 2.0%
DJ Utilities451- 0.6%
XOI Oils1,242- 2.7%
Gold bull.1,755+ 0.7%
GoldStcks209+ 0.5%
Canada12408- 0.9%
London5527- 3.1%
Germany5966- 6.0%
France3123- 6.7%
Hong Kong19842- 0.9%
Japan8801- 2.8%
Australia4342- 1.6%
S. Korea1928unchgd
India17562- 1.4%
Indonesia3783- 1.2%
Brazil58679- 1.4%
Mexico36690unchged
China2648+ 2.2%
PREVIOUS WEEK (October 28)
DJIA12231+ 3.6%
S&P 5001285+ 3.8%
NYSE7803+5.0%
NASDAQ2737+ 3.8%
NASD 1002401+ 2.8%
Russ 2000761+ 6.8%
DJTransprts5011+ 4.1%
DJ Utilities454+ 0.2%
XOI Oils1,276+ 5.9%
Gold bull.1,743+ 6.4%
GoldStcks208+12.5%
Canada12519+ 4.8%
London5702+ 3.9%
Germany6346+ 6.3%
France3348+ 5.6%
Hong Kong20019+ 11.1%
Japan9050+ 4.3%
Australia4411+ 5.0%
S. Korea1929+ 5.0%
India17804+ 6.1%
Indonesia3829+ 5.8%
Brazil59513+ 7.7%
Mexico36708+ 4.9%
China2590+ 6.7%

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Next week’s Economic Reports:

Next week will be a fairly heavy week for potential market-moving economic reports, including the Consumer Price Index, Retail Sales, New Housing Starts, and the Fed’s Philadelphia area Business Index. To see the schedule of the week’s reports click here, and look at the left side of the page it takes you to.

To read my weekend newspaper column ‘Gold Has Resumed Its Glitter!’ click here!

Subscribers to Street Smart Report: In addition to the charts and updates in the ‘premium content’ area of this blog this morning, the new issue of the newsletter is in the subscribers’ area of the Street Smart Report website from Wednesday, and we’ll have a special report on Global Markets on Monday.

I’ll be back with the next regular blog post on Tuesday morning at 9:25 a.m. Have a great weekend!

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