Stocks and investing thread

[southsider2k5]

The Dow is now trading over 11900 for the first time ever... DJ12K is in the crosshairs.

[NUKE_CLEVELAND]

Markets are in full up party mode right now. There are 2 phrases driving this rally.........goldilocks and soft landing. With those conditions in place, the fed is done ( on the upside anyway ) and earnings will continue to grow solidly.

[southsider2k5]

Dow opened up over the 12,000 level... lets see if it holds.

[NorthSideSox72]

Dow opened up over the 12,000 level... lets see if it holds.

It didn't yesterday, but it did today. Closed at 12,011. First time ever close over 12k.

 

What I really want to see though, is the S&P get back over the 2000 levels. The S&P is a somewhat better indicator, I think, of overall business financial strength. Its at 1366 right now, and I believe the all time hish is around 1500 or so.

[WilliamTell]

I love the S&P. But that's awesome the Dow closed over 12,000.

[southsider2k5]

So the Dow goes over 12,100 yesterday with another big trading day... Don't expect much right now as the fed is meeting which means zzzzzz from stocks until the announcement is made.

 

The big note from yesterday in the world of big round numbers is that Berkshire Hathaway closed at $100,000 per Class A share yesterday for the first time ever. When Warren Buffett took over the company in 1965 the stock was at $18 a share, or a return of 555,500% on that original share price... not bad.

[DBAHO]

So the Dow goes over 12,100 yesterday with another big trading day... Don't expect much right now as the fed is meeting which means zzzzzz from stocks until the announcement is made.

 

The big note from yesterday in the world of big round numbers is that Berkshire Hathaway closed at $100,000 per Class A share yesterday for the first time ever. When Warren Buffett took over the company in 1965 the stock was at $18 a share, or a return of 555,500% on that original share price... not bad.

Now that's what you call a nice investment.

 

The big stocks down here the last year or 2 in our sharemarket have basically been the steel stocks. A company like BHP Bilition 2 years ago was about $14 a share. Now it's worth $28, basically just because of the huge demand for steel in countries like China.

 

Rio Tinto's another as 2 years ago that was about $38 now it's almost $80.

 

And our All Ordinaries Index have been reaching records highs over the past couple of months from time to time as well.

[NorthSideSox72]

To follow up on the housing discussion and its effect on the economy, housing prices dropped 9.7% YOY in September, the largest drop in 35 years. But, the pace of sales has climbed the last two months. So, if the sales rise isn't a blip, it looks like the fall in prices is being immediately followed by a snap-up by consumers. That could spell good news for keeping the "housing recession" shallow and short. Or not. Hard to tell just yet.

[NUKE_CLEVELAND]

To follow up on the housing discussion and its effect on the economy, housing prices dropped 9.7% YOY in September, the largest drop in 35 years. But, the pace of sales has climbed the last two months. So, if the sales rise isn't a blip, it looks like the fall in prices is being immediately followed by a snap-up by consumers. That could spell good news for keeping the "housing recession" shallow and short. Or not. Hard to tell just yet.

 

 

Far as Im concerned, the housing bubble was little different than the stock market bubble back in 2000. Home prices, especially in certain areas of the country got wildly overinflated and now the market is taking steps to correct that. This is ECON 101 here and thats why I laugh when guys like Lou Dobbs go on television and proclaim doom and gloom and say there's a war on the middle class when overpriced houses come back down to where they should be.

 

Dobbs and those like him just love to tell phony stories to the uneducated in order to scare them into voting Democratic.

Edited October 26, 2006 by NUKE_CLEVELAND

[southsider2k5]

To follow up on the housing discussion and its effect on the economy, housing prices dropped 9.7% YOY in September, the largest drop in 35 years. But, the pace of sales has climbed the last two months. So, if the sales rise isn't a blip, it looks like the fall in prices is being immediately followed by a snap-up by consumers. That could spell good news for keeping the "housing recession" shallow and short. Or not. Hard to tell just yet.

 

Without having a real good handle on the details of it... the term that comes to mind is dead cat bounce. The old saying goes if you drop a dead cat off of a building, it still does bounce up when it hits the ground. The problem is, the cat is still dead.

[NorthSideSox72]

Without having a real good handle on the details of it... the term that comes to mind is dead cat bounce. The old saying goes if you drop a dead cat off of a building, it still does bounce up when it hits the ground. The problem is, the cat is still dead.

That's the other side I was referring to. A 2 month bounce may, or may not, be indicative of anything.

[southsider2k5]

Unemployment is at its lowest rates in 5 1/2 years

 

http://today.reuters.com/news/articlenews....=rss&rpc=23

 

WASHINGTON (Reuters) - The U.S. unemployment rate dropped to its lowest in nearly 5-1/2 years during October as 92,000 more jobs were added and hiring in each of the two prior months was revised up, a government report on Friday showed.

 

The October new-jobs figure was below Wall Street economists' expectations for 125,000 but the Labor Department said a total 139,000 more jobs were created in August and September than it had previously thought. It revised up September's job-creation total to 148,000, or nearly three times the 51,000 it reported a month ago, and said there were 230,000 new jobs in August instead of 188,000.

 

The unemployment rate fell in October to 4.4 percent from 4.6 percent in September. It was the lowest unemployment rate since 4.3 percent in May 2001 and was likely to fan concerns that labor markets are growing tight and could contribute to inflation pressures.

 

Average hourly earnings rose 0.4 percent to $16.91 - higher than the 0.3 percent that analysts had anticipated - while the average work week edged up to 33.9 hours from 33.8. Over the year, average hourly earnings have risen by 3.9 percent, the department said.

 

 

 

Most of the new hiring in October was in service industries, where 152,000 new jobs were created, while goods-producing industries shed 60,000 jobs.

 

 

© Reuters 2006. All Rights Reserved.

[Balta1701]

And yet those monthly job numbers are barely enough to keep up with population growth. Those 2 surveys are showing totally different things at this point. The household survey shows a seasonally adjusted increase in employment of 437,000 between September and October, while the other (larger and generally considered to be more accurate) survey only showed a 92,000 increase.

 

Something is dreadfully wrong with one of those 2 numbers. They're not even close.

[southsider2k5]

And yet those monthly job numbers are barely enough to keep up with population growth. Those 2 surveys are showing totally different things at this point. The household survey shows a seasonally adjusted increase in employment of 437,000 between September and October, while the other (larger and generally considered to be more accurate) survey only showed a 92,000 increase.

 

Something is dreadfully wrong with one of those 2 numbers. They're not even close.

 

Of course it isn't... I mean we can't possibly be creating jobs and raising tax revenues after a tax decrease... that just isn't possible!?!?!?

[Balta1701]

Of course it isn't... I mean we can't possibly be creating jobs and raising tax revenues after a tax decrease... that just isn't possible!?!?!?

No, what's not possible is that we created 93,000 jobs in October and 437,000 jobs in October depending on which survey you look at.

[southsider2k5]

No, what's not possible is that we created 93,000 jobs in October and 437,000 jobs in October depending on which survey you look at.

 

Which survey said 437,000? The main one traders follow said only 92K plus the upward revisions of August and Sept.

[Balta1701]

Which survey said 437,000? The main one traders follow said only 92K plus the upward revisions of August and Sept.

The Household survey, which is the one the unemployment rate (4.4%) is based off of. Here's the data.

 

Seasonally adjusted numbers...the labor force increased by 199,000 september to October. 238,000 people who were previously unemployed found employment, which, combined with the 199,000 increase in labor force, led to an increase of 437,000 jobs. That is the number of jobs that the survey recorded, and that is why the unemployment rate declined by .2%.

 

I simply can't see how those 2 surveys can possibly both be showing me the same thing - one shows an increase of 93,000 jobs, the other shows a .2% drop in unemployment because of an increase of 437,000 in employment over the previous month. I may also have to cut this debate short, as I'm heading off to Owens' Valley here in a little while.

[southsider2k5]

The Household survey, which is the one the unemployment rate (4.4%) is based off of. Here's the data.

 

Seasonally adjusted numbers...the labor force increased by 199,000 september to October. 238,000 people who were previously unemployed found employment, which, combined with the 199,000 increase in labor force, led to an increase of 437,000 jobs. That is the number of jobs that the survey recorded, and that is why the unemployment rate declined by .2%.

 

I simply can't see how those 2 surveys can possibly both be showing me the same thing - one shows an increase of 93,000 jobs, the other shows a .2% drop in unemployment because of an increase of 437,000 in employment over the previous month. I may also have to cut this debate short, as I'm heading off to Owens' Valley here in a little while.

 

They both show a 4.4% unemployment rate.

[Balta1701]

They both show a 4.4% unemployment rate.

At least based on that BLS page, the only one that actually produces an employment rate is the Household survey. The Establishment/Payroll survey only produces a number of jobs created/lost during that month - it records the numbers given by businesses, and applies a few statistics to get number of jobs created/lost.

 

Here is the establishment survey data. As far as I can tell, it doesn't give anything resembling a rate, because it doesn't have any information in it about the size of the labor force - that's not what it measures, it only measures the number of jobs created/lost, not hte total number looking for work.

 

As I understand it, both of those surveys should give numbers about the jobs created per month. One does so by asking businesses, one does so by surveying households. But only the household survey can give an unemployment rate, because it is the only one that finds out how many people are out there looking for work, the business survey only is asking businesses.

 

So, my problem is, the 1 piece of data that both of them collect which should be comparable, the number of jobs created or lost per month, is totally divergent between the two. One says 93, one says 437. Those are huge differences, at least to my eyes. One of them has the job market shrinking relative to population growth, the other has it massively growing.

 

Anyway, I'm out.

[southsider2k5]

They both show a 4.4% unemployment rate.

 

Looking back on this, there are a couple of things worth noticing. First of all the 92K number comes from "nonfarm payrolls". The second number which you are looking at is "total employment", which does include everything. Those in no way have to be the samething, and in fact with it being harvest time in the midwest, could be hugely different because of the temporary jobs associated with this time of year. I also don't see a distinction being made to include the extra 140,000 jobs which were revised upward from the Aug/Sept payroll numbers.

[Chisoxfn]

I hope the GOP pubs the hell out of this. Its some good news that could maybe help them retain control of at least one of the house/senate.

 

:prays

[southsider2k5]

I hope the GOP pubs the hell out of this. Its some good news that could maybe help them retain control of at least one of the house/senate.

 

:prays

 

It ought to be interesting to see how stocks react to this election. I would be willing to bet if the Dems win both houses of Congress, we have seen the highs in stocks for a while.

[Chisoxfn]

It ought to be interesting to see how stocks react to this election. I would be willing to bet if the Dems win both houses of Congress, we have seen the highs in stocks for a while.

I have absolutely no doubt about that. In fact if things are looking real bad in the polls you may see things start early with a losing day on Monday (in the market).

 

I have such strong beliefs against the economic principles of the democratic party that I'll be sickened if they take control. My only hope is if they do, that in 2 years somehow the Repubs can re-organize and find a way to get back in (but regardless they will need to somehow win the presidency cause that would be HUUGE).

 

And obviously I'm more extreme than some people on this issue but right now I think the democratic party has gotten so far left its absolutely mind-boggling and to me frightening.

[kapkomet]

And obviously I'm more extreme than some people on this issue but right now I think the democratic party has gotten so far left its absolutely mind-boggling and to me frightening.

DING! It's definitely not the party of "reaching out for compromise" right now.

 

The bottom line is most people in this country are "conservative", and no, I don't mean Rush Limbaugh conservative... I mean they are fiscally conservative, and the leftist crap that we are seeing definitely doesn't support those conservative notions. Small business will be devastated should the Dems get elected, just read their own words on the matter.

[jasonxctf]

two quick things...

 

1) I've seen many studies showing that the market performs better under Democratic control versus Republican Control. I'll try to dig something up.

 

2) This market typically prices in predicted events 6 months ahead. Will the fed move rates in Q1, 2007, etc. Do you honestly think that the market hasn't priced in a Democratic House Majority over the past 3 months. The Dems taking the house has been a predicted event for a while now.

 

on yahoo business front page right now.. the middle of the article points out

 

Consider: even as Democrats' election hopes soared following a sex-scandal cover up embroiling Florida Rep. Mark Foley and some Republican leaders, the Dow Jones Industrial average climbed to a new record above the 12,000 mark. That suggests one of two things, according to Prudential Equity Group LLC: "either investors don't believe a shift is afoot, or more likely that they don't think it matters."

 

"Control of one house of Congress when the president is of another party is not particularly helpful," said James Glassman, a fellow at the American Enterprise Institute. "That is even true if the Democrats take control of both houses."

 

 

 

DING! It's definitely not the party of "reaching out for compromise" right now.

 

The bottom line is most people in this country are "conservative", and no, I don't mean Rush Limbaugh conservative... I mean they are fiscally conservative, and the leftist crap that we are seeing definitely doesn't support those conservative notions. Small business will be devastated should the Dems get elected, just read their own words on the matter.

 

 

Here are what the experts say...

 

Glassman said there are two key areas where Democrats may assert themselves most effectively: trade and taxes.

 

Democrats could play a critical role in helping President Bush revive global trade talks that collapsed over the summer, he said, though they will be tempted for political reasons to withhold support.

 

On taxes, many Democrats strongly oppose the cuts Bush enacted in 2001 and 2003, but Glassman said the party might use its newfound power to force a "grand compromise" with Republicans that extends the cuts, which are set to expire in 2010, but with major revisions aimed at helping working families.

 

Because the Democratic party's election success partly depends on victories by some conservative candidates, or "blue dogs," in districts that traditionally elect Republicans, the ramifications on fiscal policy are not clear cut, lobbyists said.

 

"The easy criticism of the Democrats of an earlier era is not so easy to make anymore," said David Resler, chief economist at Nomura Securities. "The Democrats are splintered politically."