A FEW THINGS TO WATCH AND THINK ABOUT

Today we saw weakness in the market. There were a number of reasons for this. First one that I saw was the Nasdaq which closed down 2.31% at 1746.17. This was helped by MSFT which was down 2.9% Dell off 3.1% Goog off 3.2% at $396.63 yep under the $400 . There were many Tech stocks down emc, cien, intc, in fact hard to find a winner there. This was mostly down to worries about spending may fall by as much as 6/7% this year in what are essentially growth companies . Yes spending down in one of the big O's targeted areas to help the economy . Of course there is the talk of how much these stocks had run and were due a bit of a pullback . By now you will be aware about my thinking of the run, it was at least in part manufactured . There really is no interest in the market at the moment from investors. This can be clearly seen by the Vol. of late. No one is willing to take any kind of long term view at these levels and most think we will see lower levels again sooner or later.

Another reason for the fall today was the uncertainty about earnings from the big industrials with Alcoa AA giving their numbers after the bell tomorrow Wed. The number is expected to come in low. Their ceo announced today that the future is looking better with China looking like it's leading the way out of this slump. I worry when you hear things are not so bad before you get earnings from a company. A kind of soften the blow so to say.

There was a bit of a worry for some traders of UNG which was trading up till it was halted during the day. It finally got trading again but closed down around 3% at $12.18 It's not one I follow, but the news was about them looking for regulatory approval to issue 1 bln new units. What I hear you say more shares they must have more shareholders than shares lol. Well joking aside here is a couple of links to the story.

http://www.reuters.com/article/marketsNews/idUSN0733779520090707

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aAcyPvtgZKpU

Oil had a nasty slip today too with Crude oil falling to a six-week low. No one is buying at the moment as demand has fallen with inventories showing a rise last week. Here is a link for the weekly numbers . http://www.eia.doe.gov/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/wpsr.html

Again I see reports of people saying it's needs to pullback a bit. “The price fall looks like a needed correction to the market,” Simon Wardell, energy research manager at Global Insight Inc. in London, said today on Bloomberg radio. “The oil market doesn’t reflect spot conditions, it reflects the expectation of conditions, and those change very quickly.”

The $ is in the news quite a bit and is been traded at 1.39 with the € as I type.

Credit card loan delinquencies also increased, rising to 4.75% from 4.52% in the last quarter of 2008.

The US unemployment rate is now at a 25-year high of 9.4%.

Debt Burden Quickens Power Shift as G-8 Loses Clout

http://www.bloomberg.com/apps/news?pid=20601109&sid=aEVdnjdCm1W0

Yep overall I'm quite confident in this market. Of course you have to be on the right side of the fence .

The tank is full of gas but the engine is seized

Well the old 1942 Packard Woody Wagon came to a stop a while ago, the tank was full of gas but the engine had seized. It looks like they have no spare parts left these days so the car is doomed to the scrap yard. That's the the same story for the US today the country of course was a shining light in it's prime and the engine was California . You can't go far without the engine and when you look at the state today you can only scratch your head and wish you had the parts to fix the problem.
In the last month California lost about 70,000 jobs and the total for the year to date is around 750,000. The Big O has said that the US needs to be creating 150,000 a month just to keep even. The banks were stress tested to a 10% unemployment rate nationally. The Big O has told us that unemployment will hit 10% this year. He is right if it even hits 12% as the 10% will have been achieved . Looking at the country as a whole this is how it stands with the Bureau of Labor Statistics it looks bad with some way worse than Cali
Alabama9.8%(p) in May 2009 Historical Data
Alaska8.4%(p) in May 2009 Historical Data
Arizona8.2%(p) in May 2009 Historical Data
Arkansas7.0%(p) in May 2009 Historical Data
California11.5%(p) in May 2009 Historical Data
Colorado7.6%(p) in May 2009 Historical Data
Connecticut8.0%(p) in May 2009 Historical Data
Delaware8.1%(p) in May 2009 Historical Data
D.C.10.7%(p) in May 2009 Historical Data
Florida10.2%(p) in May 2009 Historical Data
Georgia9.7%(p) in May 2009 Historical Data
Hawaii7.4%(p) in May 2009 Historical Data
Idaho7.8%(p) in May 2009 Historical Data
Illinois10.1%(p) in May 2009 Historical Data
Indiana10.6%(p) in May 2009 Historical Data
Iowa5.8%(p) in May 2009 Historical Data
Kansas7.0%(p) in May 2009 Historical Data
Kentucky10.6%(p) in May 2009 Historical Data
Louisiana6.6%(p) in May 2009 Historical Data
Maine8.3%(p) in May 2009 Historical Data
Maryland7.2%(p) in May 2009 Historical Data
Massachusetts8.2%(p) in May 2009 Historical Data
Michigan14.1%(p) in May 2009 Historical Data
Minnesota8.2%(p) in May 2009 Historical Data
Mississippi9.6%(p) in May 2009 Historical Data
Missouri9.0%(p) in May 2009 Historical Data
Montana6.3%(p) in May 2009 Historical Data
Nebraska4.4%(p) in May 2009 Historical Data
Nevada11.3%(p) in May 2009 Historical Data
New Hampshire6.5%(p) in May 2009 Historical Data
New Jersey8.8%(p) in May 2009 Historical Data
New Mexico6.5%(p) in May 2009 Historical Data
New York8.2%(p) in May 2009 Historical Data
North Carolina11.1%(p) in May 2009 Historical Data
North Dakota4.4%(p) in May 2009 Historical Data
Ohio10.8%(p) in May 2009 Historical Data
Oklahoma6.3%(p) in May 2009 Historical Data
Oregon12.4%(p) in May 2009 Historical Data
Pennsylvania8.2%(p) in May 2009 Historical Data
Puerto Rico14.4%(p) in May 2009 Historical Data
Rhode Island12.1%(p) in May 2009 Historical Data
South Carolina12.1%(p) in May 2009 Historical Data
South Dakota5.0%(p) in May 2009 Historical Data
Tennessee10.7%(p) in May 2009 Historical Data
Texas7.1%(p) in May 2009 Historical Data
Utah5.4%(p) in May 2009 Historical Data
Vermont7.3%(p) in May 2009 Historical Data
Virginia7.1%(p) in May 2009 Historical Data
Washington9.4%(p) in May 2009 Historical Data
West Virginia8.6%(p) in May 2009 Historical Data
Wisconsin8.9%(p) in May 2009 Historical Data
Wyoming5.0%(p) in May 2009 Historical Data
I wonder will we get the next stress test like we got the second Govt. handout after they found out that the first was way to low.

Then we have the debt of California coming up in the news. Will they default and what will the knock on effect be there. Moody's and Standard & Poor's rating merchants must be working overtime on this. California is responsible for around 14% of the total GDP for the US which was about $1.7 trillion ( in 2006). This shows how important the state is to the country as a whole. The Cali bond holders must be thinking cars too or should I say car companies GM comes to mind. The Municipal bond market could become the next tire to deflate.

Anyone interested in a car to restore . It has a tank of gas. Didn't think so


UPDATE

Deficit forces California to issue IOUs

http://www.ft.com/cms/s/0/1940d18e-64cf-11de-a13f-00144feabdc0.html?ftcamp=rss&nclick_check=1