Stocks Go Up, Stocks Go Down

Up one day and down the next for the markets. Well I think that this may be the theme for the near future until the Fed drops the notion of rampant inflation and either knocks off the interest rate hike or better yet lowers a quarter point. I don’t see how these guys can keep on thinking that everyone is making a fortune and there are too many dollars chasing too few goods. I know my salary hasn’t increased near the amount that they say salaries are increasing. The labour market is tight? There are a lot of people that aren’t working maybe because they aren’t qualified for the jobs that are available. Yet then I look at some people who are driving taxi’s because they were engineers in India yet somehow can’t be engineers (or Dr’s or whatever) here. Maybe something should be done to ensure that these spots get filled by qualified people. I don’t really think there is the kind of employment problems the Fed claims to be there. OK enough about that.

Markets and market sentiment was negative most of the day and could still finish that way. There were a lot of negative things out there; inflation worries, a weak manufacturing reading, rising oil and gas prices, slower retail sales and on and on it goes. Yet then people started thinking like me and thinking that maybe the Fed will or should lower rates and the market picks up. So who knows what’s going to happen in the short term, but hey CLRK is a long term bet and we know that over time it will be a winner.

Looks Like a Great Day is Upon Us

The futures are pointing up to a brighter day today. It seems that Bernanke and the Fed think that the US economy is growing at a faster pace than the market thought. Something that was proven in the GDP number which came in at 2.2 percent versus the 1.8 percent expected. This kind of positive news has caused the stock futures to surge this morning. The S&P futures are up 4.70, the Dow futures are up 27.00 and the Nasdaq futures are up 9.75. All this good news points to a rally at the open. Let’s hope the markets can sustain the momentum through Christmas.

On the corporate news front, Pfizer announced it is cutting it’s sales force by 2,00 employees. Shares of Pfizer were up in European trading on the news, but I can’t see how cuts of this size to a group that bring in revenue can be good for the company. Also about half of Ford’s hourly workers have agreed to take early retirement packages, which puts Ford ahead of it’s reduction goals. On the Canadian markets, Bombardier reported earnings of 4 cents per share beating analyst’s expectations of 3 cents per share and last years lost of 1 cent per share.

Also today in Canada, the Liberal party leadership convention kicks off. With eight candidates in the running, this promises to be an interesting race to say the least. Right now there doesn’t appear to be any clear front runner so it’s anyone’s to win or lose. Balloting doesn’t start until Friday and a winner won’t be declared until Saturday, so it should be an interesting weekend for Liberals in Canada.

Finally Back Online

It’s funny to see how heavily we rely on telecommunications and the internet. I was without internet access for two weeks and unable to post anything. I did manage to phone in some stock quotes and watch market updates on TV but having no internet access made me realize how dependent I am on it. Not having access to email gives me a sense of wondering what went on in the world despite having access to TV and newspapers. But I now have access again and can go on endless rants.

How are my stocks doing?

Well CLRK is basically holding it’s own and still around $19.00 and WIRE managed to move off it’s lows but the recent down turn seems to have knocked some steam off WIRE’s recovery. I think WIRE is still a good bet, just look at it’s P/E Ratio or Price / Sales ratio.

Well I see in the news the Canadian government has gone and done something stupid again. Seems they passed a resolution declaring Quebec or Quebecers as a separate nation. I think that anytime you say that a group within your country is a separate nation then you are inviting a whole world of problems. I guess all Harper is looking at is the next election and trying to win votes in Quebec. But at the same time, how many votes is he gonna lose outside of Quebec? It sure looks like this is another example of how misguided the conservative government is. Harper seems to be doing a good job of messing things up. Well I guess because he has a minority government the voters will be able to decide how god he is doing in a little while.

Good News Comes in Threes

Three amazing things happened yesterday. The first was the resignation of Donald Rumsfeld. Since Rumsfeld was the chief architect of the war in Iraq, I take this as an acknowledgement from both Bush and Rumsfeld that the war was a failure. It now looks like Gates is charged with cleaning the mess from Bush and Rumsfeld. You know when the President says they need a fresh perspective he’s acknowledging that the status quo isn’t working.

The second major blow to Bush occurred when the control of the Senate turned over to the Democrats as Jim Webb was declared the winner in the Virginia Senate race. The victory brings the number of votes the Democrats get to 51 giving them a majority for the first time since 1994. They will likely try and keep the spending of the Bush government in check. Does anyone besides me see the irony in this?

The third thing is that Cisco posted great earnings and guided higher for the future so expect a tech rally today. I know the two stocks I’m holding aren’t tech stocks but I’m hoping the positive news on Cisco moves Nasdaq up in general. Let’s keep our fingers crossed. I have a feeling the mood may turn positive until the end of the year. Lookin for that Christmas rally….

Election Day

I didn’t post for one day yesterday and the Dow has a huge rally. That just goes to show you that the market moves on with or without you. Despite the rally on the Dow, my stocks did pretty much nothing. WIRE was down three cents so I’m hoping that it has finally stabilized and we can now move on up from here.

CLRK was down 20 cents despite announcing the appointment of a new COO. Jeffrey Cassis was appointed yesterday as the new COO of Color Kinetics. Cassis will focus on the day-to-day management of the company and assume responsibility for product delivery. You would think that would be a good thing, but somehow the market sold CLRK for 20 cents. But we must always remember that CLRK is our long term play.

Today is election day in the United States so I expect that there won’t be much happening on the markets. Of course every time I call a day we get the opposite. I should have been an economist. I hope that the democrats rout the republicans because I don’t think I’ll be able to listen to Bush if the republicans do well. Somehow people forget that it was Clinton that ushered in one of the longest runs of prosperity.

Where Are We Going From Here?

It looks like a dropped the SCUR in time as they dropped sharply after their earnings release. But what about my purchase of WIRE? WIRE is down over a dollar from where I bought it. Had I been a day trader, I would have been in and out several times. But this blog and my account isn’t really about day trading. It’s about spotting opportunities; whether that be grabbing a stock for a bounce or spotting an undervalued stock. I consider WIRE to be the latter. It’s a strong and solid company that is growing and well managed. Their P/E ratio is now under 5.0 and they tripled their earnings over last years quarter. All these factors scream buy to me. Since I’m not trying to time the market, I decided to buy at what I saw was a good price. So the stock dropped another dollar but it seems to have stabilized.

CLRK also dropped significantly but largely to the general market weakness of the last few days and an analyst downgrade. Since CLRK is a long term buy and readers of this Blog know what I think of analysts, I’m not at all worried about CLRK.

This morning the unemployment reports in both Canada and the US showed that unemployment rates declined. This can be seen as a good news / bad news story. The good news is that the economy may not be slowing as fast as some people feared. The bad news is that if the economy is not slowing, the Fed may be looking to raise rates. Right now I don’t think the market really has a good grasp on what to make of these reports. But since it is a Friday, my bet is that the markets will finish slightly lower. Maybe me saying that is a good thing because we know what tends to happen to my predictions.

Toronto Stock Exchange Gets Hammered

Today may hinge on a few economic reports. At 10am the Institute of Supply Management will release its survey of manufacturing executives. The index is forecast by economists to be 53 unchanged from last month, but remember any number over 50 means growth. After that at 10:30am the report on US fuel inventories will be released. Oil was down slightly ahead of the report. Also out today are the September construction spending and Pending Home Sales reports. Any of these reports can spook the markets if the surprise negatively.

Also today Time Warner released earnings two cents above last year but a penny below forecast. The big three automakers are also reporting October sales today.

The NYSE will also be consolidating trading rooms from five to four over the next 18 months as more electronic trading comes online and ceilings for electronic trading are raised. Could this be the beginning of the end of floor trading at the NYSE? The NYSE has always said that some part of the floor will remain and has hung on to its floor brokers and specialists, but that kind of physical presence must come with a high overhead. The cost savings by going electronic must be a huge temptation. After all they do have to compete with the likes of NASDAQ.

The big news in Canada is the announcement by the Finance Minister that he will be taxing income trusts. Income trusts are units that pay all or most of their monthly profits out to shareholders as distributions. Since these distributions are paid out immediately, the income trusts are not subject to tax. Seniors liked them because they could get a higher yield than with dividends and they got a monthly income stream. Soon corporations got a hold of the idea and could make their shares more attractive and reduce their corporate tax. The trouble with that is that the Federal Government starts losing tax revenue and we know they won’t put up with that for long. Well it ended yesterday as the Finance Minister announced that income trusts would be taxed. Also to not upset seniors he announced special tax breaks for them. Now if we could only get him to do something about the stupid pension legislation and locked in accounts.

The TSE opened down 300 points and is trying to come back a little, but don’t count on it.