I Smell Economics

11/1 Sunny San Diego

jacobcombs — Mon, 02 Nov 2009 04:29:35 +0000

Mixed signals from the administration this weekend. Geithner says that the increased GDP means that the economy is recovering and Obama is saying that is not what it means. Seems like the employee wants to make his job easier and the boss wants to be honest.

The reports this week are fairly sparse. The industrial report is fairly important and will give a true clue as to whether the economy is expanding or contracting. Car sales and the FOMC announcement will also have some impact on the stock market, and whatever comments come out of the White House.

A survey from Barrons says that two-thirds of fund managers are bullish on tech, energy, and health care. Bearish on banks and consumer cyclical’s and neutral on oil.

BAC and C should be down and flat. Maybe some small corrective move, but nothing substantial. BAC is having some SEC issues and C is still not a healthy bank.

I am thinking that NVDA will make a good run this week. I will watch the earnings of some health care and tech companies to see what we can get into during this slump.

Notable earnings: HUM, ANR, KFT, UBS, QCOM, CAH, NVDA

10/29 Chilly San Diego

jacobcombs — Fri, 30 Oct 2009 05:48:27 +0000

Looking over the rally we have seen in the market over the past 6 months it seems that the size of the economy has a very lagging and behind the scenes effect on the market. In the second quarter of 2009 the economy shrunk the most it has in a long time. But during this decline, the market was rising in price. All based on the announcements of fund managers and government officials. Also some minor reports on housing sales and consumer confidence.

While I have no problem with the market and economy expanding, I am afraid that the current rise in the market is a little bit premature. I think banks are still in trouble. There have been no real fix for all of the lost revenues from teh default loans besides the stimulus package from the government. I don’t think this has solved all of our problems. Also, there is still a huge unemployment problem that will have serious repercussions on the economy once the holiday season rolls around and funding for home and car buyer credits run out.

I see the only options for truly stimulating the economy at this moment is to lower taxes for consumers as well as businesses so they can consume more and create more jobs respectively. Unfortunately this is not the policy of the current government and I expect them to raise taxes over the net few years. While this may be a good plan in the long term, creating public welfare and what not, this will not help the economy or the market.

Having said that we need to really look into some strong household name stocks that have good dividends. Here are a few I like:

NSC
PG

These look good, but they were both heavily involved in this last rally so we need to look for the next drop to find a good value for these stocks.

10/28 Windy San Diego

jacobcombs — Thu, 29 Oct 2009 05:26:42 +0000

We need to do our best to get most of our money out as soon as possible. I think the market is getting ready to drop significantly again. We may see a small corrective move and when we do it is time to sell. Once it drops further we can pick up some more, but we will need to do some good research in order to predict that market and movement that will maximize our profits.

The money flow into bank stocks is still stable. I think investors are seeing more volatility in the bank stocks so they are looking to short it and make some quick profits.

USO is starting to come back down. There is a little sell off of this stock happening, but oil can always come back. This stock has been in the trading range for the past 3-4 months. The factors affecting oil are different than the factors affecting the banks so we need to find these factors and watch them closely.

Stock is lower than when I bought it earlier. It will rise again once the market has come out of this new gloom.

Tomorrow shouldn’t hold any terrible news so I am thinking it will be a good day tomorrow and we really need to think of off loading some stock.

10/27 Cloudy San Diego

jacobcombs — Wed, 28 Oct 2009 05:01:29 +0000

Strange moves today in the banks. C was flat and BAC climbed higher. I am thinking there will be a rally in the next couple of days for at least BAC. The positive housing report is good news for both these stocks.

STP will stay stable for a while longer.

USO made some good moves today and I expect it to rise a little further tomorrow. The news about the crude supply are good for this ETF.

10/26 Sunny San Diego

jacobcombs — Tue, 27 Oct 2009 05:17:29 +0000

Volume was high today in almost every sector. Investor confidence is very low. The talk about healthcare reform has some people a little timid about spending. The consumer confidence report tomorrow should confirm my thoughts.

C seemed to have some investors interested and showed some buying later in the day. We should look to sell C later this week if there is any rise in the price in the next few days.

BAC fell too much, but I want to hold that stock anyway.

STP is still a hold since it is back to its low over a month ago. We need to wait for the rally with this stock.

USO is not looking good. There was definitely a large sell off today, but there is also a lot of negative talk around oil. The price of oil is affected by the strength of the dollar. Need to get rid of this stock.

NVDA had low volume today. Tech is still in the trading range and price is remaining stable.

10/25 Sunny San Diego

jacobcombs — Mon, 26 Oct 2009 05:29:02 +0000

STP: 11/15 Earnings report. Watch for a rise this week on STP making a deal with Arizona.

C: Earmings Conf call will keep C relatively flat for the next few months. Its rise in the future is based on real estate and corporate defaults.

USO: Oil price is rising so the ETF should see a lagging increase. Watch Crude price this week.

GE: Seems to have a lot of new business. Not sure why the price is so low. Seems to be near the high price for the year so it should be safe to sell.

Buffet Stocks

jacobcombs — Mon, 26 Oct 2009 05:26:58 +0000

I don’t necessarily want to buy these. Just watch the sector and look for smaller cap companies that can also rise with these companies.

Norfolk Southern Corp.
(Public, NYSE:NSC)

Lowe’s Companies, Inc.
(Public, NYSE:LOW)

The Home Depot, Inc. - Good Short
(Public, NYSE:HD)

Kraft Foods Inc. – Good Dividend
(Public, NYSE:KFT)

Sanofi-Aventis SA (ADR)
(Public, NYSE:SNY)

Consumer Cyclical:
Sealy Corporation
(Public, NYSE:ZZ)

10/13 Tuesday Cool San Diego

jacobcombs — Wed, 14 Oct 2009 05:41:53 +0000

Volume was low again today. It seems investors are waiting for the earnings reports of the banks and the actions of the government. I don’t know for sure, but it seems there are more economic recovery actions to be taken by the government before the year is out. There is a lot of chatter about inflation and it seems that there is not much being done about it currently.

BAC was up after hours today. Should be positive tomorrow with the earnings report upcoming.

STP looked bad today. At the first rise in the price of this stock I want to drop it. It is too volatile and not volatile enough at the same time to make any real profit.

C is still an enigma, but I just noticed they are also releasing their earnings report on Friday. I am thinking it will be positive and I am curious to see the response of the market. So far it seems that the market is oblivious to good news from earnings reports.

10/12 Cloudy San Diego

jacobcombs — Tue, 13 Oct 2009 05:14:48 +0000

BAC made an impressive move today with little volume. The murmurs must be strong on the street about the earnings coming out this week. I am looking forward to the announcement. However, it seems tomorrow will have a slight pullback from the jump today so look out for that.

STP made a nice move with low volume, but it is still hovering in the trading range so I don’t expect anything significant tomorrow.

QCOM is hurting today and I am not sure why. Seems they are just super stable and are making no real moves up or down in any way.

Today is banks all week. They need to be closely monitored because of the announcements this week. Good news could possible send them high. I am curious to see if these announcements will be treated differently than those that were all but ignored when banks reported their earnings so soon after the stock market fall.

10/11 Sunny and Cool San Diego

jacobcombs — Mon, 12 Oct 2009 06:22:57 +0000

The coming week looks to be pretty active with the retail sales and consumer price index reports coming out Wednesday and Thursday respectively. The retails sales should be good regardless of the unemployment situation. Consumers do not seem timid about purchases any longer.

The financial sector is looking to have more strength this week, but we could see potentially dangerous volatility based on the upcoming earnings reports. Monday Charles Schwab, Wednesday J.P. Morgan, Thursday Goldman Sachs, and Friday Bank of America. These reports could make or break the entire market this week. Be ready to sell at the first earning report.

Qualcomm stock this week will most likely be affected by the earnings reports of the other major tech companies. Intel, AMD, Google, and others are reporting their quarterly earnings. QCOM stock has fallen slightly in the past few weeks, but a rise in buying has brought it up a little further.