October 11, 2012 at 09:31 AM EDT
Markets Still Not Worried.
Thursday, October 11, 9:25 a.m. Okay. So the global economic slowdown continues to worsen. The IMF has cut its projections for global economies yet again, and warned Monday that “Risks of a serious global slowdown are alarmingly high.” and that “No significant improvements appear in the offing.” Corporate earnings growth in the U.S. has been [...]

Thursday, October 11, 9:25 a.m.

Okay. So the global economic slowdown continues to worsen. The IMF has cut its projections for global economies yet again, and warned Monday that “Risks of a serious global slowdown are alarmingly high.” and that “No significant improvements appear in the offing.”

Corporate earnings growth in the U.S. has been sliding rapidly for two years and is expected to have ended in the 3rd quarter and turned negative for the first time since the last recession.

Corporate insiders who were already selling at an unusual pace into the rally from the June low, have actually increased the pace of their selling significantly further since the ECB and QE3 announcements, selling at levels previously often seen at market tops.

Markets have pulled back some from their peaks of four weeks ago, but not to any meaningful degree. No long-term support levels have been broken. And while even Wall Street is now concerned about a correction being imminent, investor sentiment remains mostly unworried.

The poll of its members by the American Association of Individual Investors showing the most reaction to the short-term pullback. Its latest numbers, released last night show the bullish percentage has declined to 30.6%, and the bearish contingent has risen to 38.8%.

But the Consensus Bullish Sentiment Index is still 72% bullish. The Market Vane Bullish Consensus Index is still 67% bullish.

And sentiment as measured by the VIX Index (aka the Fear Index) shows no fear (very bullish and complacent).

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To read my weekend newspaper column click here: New Study Shows Sell in May Triples Market’s Gain Long Term. Oct. 5, 2012.

Subscribers to Street Smart Report: The new issue of the newsletter is in your secure area of the Street Smart Report website from 3:15 p.m. yesterday. There will be a new ‘Gold, Bonds, Dollar, Commodities Report there later today.

Yesterday in the U.S. Market.

A second straight triple-digit loss by the Dow, but the rest of the market was not as negative as the blue chips. Volume remained relatively low at 0.6 billion shares traded on the NYSE.

The Dow closed down 128 points, or 1.0%. The S&P 500 closed down 0.6%. The NYSE Composite closed down 0.6%. The Nasdaq closed down 0.4%. The Nasdaq 100 closed down 0.5%. The Russell 2000 closed down 0.1%. The DJ Transportation Avg. closed up 0.1%. The DJ Utilities Avg closed down 0.3%.

Gold closed down $2 at $1,765 an ounce.

Oil closed down $1.01 at $91.38 a barrel.

The U.S. dollar etf UUP closed down 0.2%.

The U.S. Treasury bond etf TLT closed up 0.7%.

Yesterday in European Markets.

European markets were down again yesterday. The London FTSE closed down 0.6%. The German DAX closed down 0.4%. France’s CAC closed down 0.5%. Greece plunged 3.6%. Ireland closed down 0.8%. Italy closed down 0.4%. Spain closed down 1.0%. Russia closed down 0.9%.

Asian Markets were down Tuesday night and some again last night.

The Asia Dow closed down 0.7% Tuesday night, and down 0.1%.

Among individual markets last night:

Australia closed down 0.1%. China closed down 1.0%. Hong Kong closed up 0.4%. India closed up 0.9%. Indonesia closed down 0.2%. Japan closed down 0.6%. Malaysia closed down 0.2%. New Zealand closed down 0.1%. South Korea closed down 0.8%. Singapore closed down 0.1%. Taiwan closed down 1.9%. Thailand closed up 0.4%.

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Markets This Morning:

European markets are back up this morning. The London FTSE is up 0.9%. The German DAX is up 1.1%. France’s CAC is up 1.3%.

Oil is up $1.21 a barrel at $92.46

Gold is up $3 an ounce at $1,768.

This Morning in the U.S. Market:

This week is an unusually light week for potential market-moving economic reports, almost none, the Small Business Optimism Index, Fed’s Beige Book, Producer Price Index, Consumer Sentiment, and a few others. To see the full list click here, and look at the left side of the page it takes you to.

There were no reports Monday.

Tuesday’s report was that the NFIB Small Business Optimism Index remained virtually unchanged in September from August, dropping from 92.9 to 92.8.

Yesterday’s ‘report’ was the Fed’s Beige Book, which said that “Reports from all 12 Fed Districts indicated economic activity generally expanded modestly since the last report.” The report was not much different from the last report but seemed a bit less downbeat.

This morning’s reports were that new weekly unemployment claims dropped sharply last week, by 30,000 to 339,000, while the four-week m.a. dropped by 11,500 to 364,000. And the U.S. Trade Deficit widened by 4.1% to 44.2 billion, with both imports and exports declining, the 3rd straight monthly decline of exports.

The unemployment claims numbers popped European markets and our pre-open indicators up some. but they were already positive.

Our Pre-Open Indicators:

Our pre-open indicators are pointing to the Dow being up 70 points or so in the early going.

To read my weekend newspaper column click here: New Study Shows Sell in May Triples Market’s Gain Long Term. Oct. 5, 2012.

Subscribers to Street Smart Report: The new issue of the newsletter is in your secure area of the Street Smart Report website from 3:15 p.m. yesterday. There will be a new ‘Gold, Bonds, Dollar, Commodities Report there later today.

I’ll be back with the next regular blog post on Saturday morning, as usual later than the week-day posts, probably around 11:30 a.m.

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