Are We...........Or Aren't We ?

George Brooks |

Wall Broad Street Stock MarketBrooksie's Daily Stock Market blog  - An edge before the open

Wednesday, August 17, 2011      9:11 am EDT

DJIA:  11,405.93     S&P 500: 1192.76

Not a bad performance. The market averages closed well off their lows despite disappointment over the Brussels European sovereign debt meeting  and mixed signals on the U.S. economy.

There are obviously some institutions that feel comfortable doing some buying in here. That comfort level will rise if  forthcoming economic indicators suggest the economy is not tanking.  So far, the reports are ho-hummers, which is good news, since the Street has been talking double-dip.

Let’s say you are camping out  deep in the woods over night. You were warned bears had been spotted in the area, but why let that stop you.  Early in the dark morning, you are abruptly wakened by  a noise.

What do you do ? 

Break camp ?  Hang tough ?

If economic reports raise odds that a recession is imminent and you didn’t sell, you get savaged.  If you bailed out and  reports confirmed a recession wasn’t going to happen, the market roars and you miss a great opportunity.

The July/August plunge in stock prices discounts the uncertainties arising from Europe’s problems and concerns about a possible recession, but not  a failure of Europe  to address those problems, or the reality of a recession here.  If the latter plays out, the market must drop further.

Industrial Production surprised on the upside yesterday with a gain of 0.9 percent, but one must consider that while  U.S. production was adversely impacted by Japan’s earthquake  last March, it  is now recovering from that calamity.

Producer Prices for July were reported today (not a game changer), but Thursday could pack some punch with Jobless Claims at 8:30 and the Philly Fed (area business) survey results and Leading Economic Indicators at 10 o’clock.

The latter is especially important since the markets were hammered after  Jeffrey Frankel, a member of the “Business Cycle Dating Committee” of the National Bureau of Economic Research was quoted  earlier this month as saying, “The sum total of the indicators over the last six months points to increased recession risk over the coming year.”*

Fitch Group maintained its AAA rating for the U.S. yesterday, referring to a stable outlook  and our nation’s central role in the global financial system and our diverse flexible economy.

Europe’s economy  has slowed considerably, as its 17-nation GDP  posted its worst post-recession performance , a gain of 0.2 percent.

Yesterday’s Brussels meeting featuring Germany’s Chancellor Angela Merkel and France’s President Nicholas Sarcozy yielded proposals to address sovereign debt issues but not enough solid stuff to chew on, a mild disappointment, but there may be more to come in the near future.

TODAY:  We are obviously in a news sensitive market, which can run sharply in either direction in reaction to developments in Europe and the U.S. economy.

I think the market needs time to digest recent developments and cope with new ones for a month or six weeks. That can mean a sideways trading range or a sideways-to-down trend. It spells buying opportunity sometime in September/October.

We are still in the “what if” mode, fearful of another leg down, fearful of the gloom suddenly lifting and a surge in stock prices leaving everyone in the dust.

Resistance to a move up is still DJIA 11,495 (S&P 500: 1209), but the market’s stability Monday and Tuesday reduces its significance somewhat.  We need some better news out of Europe and from our economy to break through that resistance level which would enable a rise to the DJIA 11, 675 (S&P 500: 1226) area.

George Brooks

*Bloomberg.com

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The writer of Brooksie’s Daily Stock Market blog, George Brooks,  is not registered as an investment advisor.  Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. Readers are expected to assume full responsibility for conducting their own research pursuant to investment decisions in keeping with their tolerance for risk

 

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Companies

Symbol Name Price Change % Volume
AA Alcoa Inc.
ABB ABB Ltd
ABX Barrick Gold Corporation
ACI Arch Coal Inc.
AEP American Electric Power Company
AES The AES Corporation
AHGP Alliance Holdings GP L.P.
ALU Alcatel-Lucent ADR (Sponsored)
AMID American Midstream Partners LP representing Limite
ARLP Alliance Resource Partners L.P.
ATLS Atlas Energy Group LLC
ATVI Activision Blizzard Inc
BAC Bank of America Corporation
BBEP Breitburn Energy Partners LP
BBT BB&T Corporation
BBY Best Buy Co. Inc.
BHP BHP Billiton Limited
Bk of Mon Pr Ser Bank of Montreal
BMO.PR.L:CA Bank of Montreal Non-Cumulative Perpetual Class B
BMO.PR.K:CA Bank of Montreal Non-Cumulative Class B Preferred
BMO.PR.M:CA Bank of Montreal Non-Cumulative 5-Year Rate Reset
BMO.PR.Q:CA Bank of Montreal Series 25 Non-Cumulative 5-Year R
BMO.PR.R:CA Bank of Montreal Class B Preferred Shares Series 1
BMO.PR.S:CA Bank of Montreal Non-Cumulative 5-Year Rate Reset
BMO.PR.T:CA Bank of Montreal 5-Year Rate Reset Class B Preferr
BMO.PR.W:CA Bank of Montreal 5-Year Rate Reset Class B Preferr
BMO.PR.Y:CA Bank of Montreal 5-Year Rate Reset Class B Preferr
BMO.PR.Z:CA Bank of Montreal Non-Cumulative Perpetual Class B
BMO.PR.K:AP Bank of Montreal Non-Cumulative Class B Preferred
BMO.PR.L:AP Bank of Montreal Non-Cumulative Perpetual Class B
BMO.PR.M:AP Bank of Montreal Non-Cumulative 5-Year Rate Reset
BMO.PR.Q:AP Bank of Montreal Series 25 Non-Cumulative 5-Year R
BMO.PR.R:AP Bank of Montreal Class B Preferred Shares Series 1
BMO.PR.S:AP Bank of Montreal Non-Cumulative 5-Year Rate Reset
BMO.PR.T:AP Bank of Montreal 5-Year Rate Reset Class B Preferr
BMO.PR.W:AP Bank of Montreal 5-Year Rate Reset Class B Preferr
BMO.PR.Y:AP Bank of Montreal 5-Year Rate Reset Class B Preferr
BMO.PR.Z:AP Bank of Montreal Non-Cumulative Perpetual Class B
BMO.PR.K:PU Bank of Montreal Non-Cumulative Class B Preferred
BMO.PR.L:PU Bank of Montreal Non-Cumulative Perpetual Class B
BMO.PR.M:PU Bank of Montreal Non-Cumulative 5-Year Rate Reset
BMO.PR.Q:PU Bank of Montreal Series 25 Non-Cumulative 5-Year R
BMO.PR.R:PU Bank of Montreal Class B Preferred Shares Series 1
BMO.PR.S:PU Bank of Montreal Non-Cumulative 5-Year Rate Reset
BMO.PR.T:PU Bank of Montreal 5-Year Rate Reset Class B Preferr
BMO.PR.W:PU Bank of Montreal 5-Year Rate Reset Class B Preferr
BMO.PR.Y:PU Bank of Montreal 5-Year Rate Reset Class B Preferr
BMO.PR.Z:PU Bank of Montreal Non-Cumulative Perpetual Class B
BMO.PR.K:CH Bank of Montreal Non-Cumulative Class B Preferred
BMO.PR.K:CX Bank of Montreal Non-Cumulative Class B Preferred
BMO.PR.L:CH Bank of Montreal Non-Cumulative Perpetual Class B
BMO.PR.L:CX Bank of Montreal Non-Cumulative Perpetual Class B
BMO.PR.M:CH Bank of Montreal Non-Cumulative 5-Year Rate Reset
BMO.PR.M:CX Bank of Montreal Non-Cumulative 5-Year Rate Reset
BMO.PR.Q:CH Bank of Montreal Series 25 Non-Cumulative 5-Year R
BMO.PR.Q:CX Bank of Montreal Series 25 Non-Cumulative 5-Year R
BMO.PR.R:CH Bank of Montreal Class B Preferred Shares Series 1
BMO.PR.R:CX Bank of Montreal Class B Preferred Shares Series 1
BMO.PR.S:CH Bank of Montreal Non-Cumulative 5-Year Rate Reset
BMO.PR.S:CX Bank of Montreal Non-Cumulative 5-Year Rate Reset
BMO.PR.T:CH Bank of Montreal 5-Year Rate Reset Class B Preferr
BMO.PR.T:CX Bank of Montreal 5-Year Rate Reset Class B Preferr
BMO.PR.W:CH Bank of Montreal 5-Year Rate Reset Class B Preferr
BMO.PR.W:CX Bank of Montreal 5-Year Rate Reset Class B Preferr
BMO.PR.Y:CH Bank of Montreal 5-Year Rate Reset Class B Preferr
BMO.PR.Y:CX Bank of Montreal 5-Year Rate Reset Class B Preferr
BMO.PR.Z:CH Bank of Montreal Non-Cumulative Perpetual Class B
BMO.PR.Z:CX Bank of Montreal Non-Cumulative Perpetual Class B
BPL Buckeye Partners L.P.
BTU Peabody Energy Corp
C Citigroup Inc.
CHEF The Chefs\' Warehouse Inc.
CNP CenterPoint Energy Inc (Holding Co)
CNX CONSOL Energy Inc.
CQP Cheniere Energy Partners LP
DB Deutsche Bank AG
DNKN Dunkin\' Brands Group Inc.
DUK Duke Energy Corporation (Holding Company)
EPD Enterprise Products Partners L.P.
ESLT Elbit Systems Ltd.
ETE Energy Transfer Equity L.P. representing Limited P
EVEP EV Energy Partners L.P.
EXC Exelon Corporation
FCX Freeport-McMoRan Inc.
FGP Ferrellgas Partners L.P.
FLT FleetCor Technologies Inc.
GEL Genesis Energy L.P.
GEN Genesis Healthcare Inc.
GG Goldcorp Inc.
GLP Global Partners LP representing Limited Partner In
HEP Holly Energy Partners L.P.
HOG Harley-Davidson Inc.
ING ING Group N.V.
IP International Paper Company
IR Ingersoll-Rand plc (Ireland)
JPM JP Morgan Chase
KGC Kinross Gold Corporation
KLAC KLA-Tencor Corporation
KMI Kinder Morgan Inc.
LGCY Legacy Reserves LP
LINE Linn Energy LLC Unit Repstg Ltd Liability Co Ints
LOGI Logitech International S.A.
MBT Mobile TeleSystems PJSC
MMLP Martin Midstream Partners L.P.
MWE MarkWest Energy Partners LP
NEM Newmont Mining Corporation
NKE Nike Inc.
OC Owens Corning Inc New
OKS ONEOK Partners L.P.
OREX Orexigen Therapeutics Inc.
PAA Plains All American Pipeline L.P.
PEP Pepsico Inc.
PHG Koninklijke Philips N.V. NY Registry Shares
PHM PulteGroup Inc.
PPL PPL Corp
PSTI Pluristem Therapeutics Inc.
RBS Royal Bank of Scotland Group Plc New (The) ADS
REGN Regeneron Pharmaceuticals Inc.
RIO Rio Tinto Plc
RNF Rentech Nitrogen Partners L.P.
SENEA Seneca Foods Corp. Class A Common Stock
SO Southern Company (The)
SODA SodaStream International Ltd.
STM STMicroelectronics N.V.
STON StoneMor Partners L.P. Rep Limited Partnership Int
SUN Sunoco LP representing limited partner interests
SYK Stryker Corporation
TCP TC PipeLines LP representing Limited Partner Inter
TEF Telefonica SA
TI Telecom Italia S.P.A. New
UAN CVR Partners LP representing Limited Partner Inter
UBS UBS Group AG Registered
VMC Vulcan Materials Company (Holding Company)
VVUS VIVUS Inc.
WAIR Wesco Aircraft Holdings Inc.
WES Western Gas Partners LP Limited Partner Interests
WFC Wells Fargo & Company
WHR Whirlpool Corporation
WPZ Williams Partners L.P. Representing Limited Partne
YGE Yingli Green Energy Holding Company Limited ADR
YRCW YRC Worldwide Inc.

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