Dec 4th 2014 – Rockets and Feathers
I read an amusing article today regarding “Rockets and Feathers”, describing the pace of changes in gas prices at the pump. Not one single economist can explain why gas prices go up like a rocket at the slightest positive crude oil increase, but come down with the speed of a feather…can only be greed and what they can get away with, I imagine they are all in cahoots!
For the overall markets, there were two attempts to pull down prices today, both of which failed as everyone is expecting a good jobs report. Now I have no idea if the jobs report will be well received or not, but I think it was a good thing that the market finished a little down today. After 2 days of gains it was inevitable that market participants were nervous to news, and as always in order to see higher prices we need others to be shaken out and take their profits.
Overnight in China, the Shanghai markets rocketed over 3% to close up 37% for the year so far. As always, a strong China bodes well for the US markets. Following this strong showing in Asia, there was initial disappointment that the ECB was not going to offer any stimulus, only for news of a possible move in January allowing for a swift recovery to new all-time highs.
Market News:
U.S. stocks fell on Thursday, with benchmarks not far from record highs, as investors considered reports that the European Central Bank’s governing council was expected to consider a broad-based package of quantitative easing at its January meeting.
Bloomberg cited two euro-zone central bank officials familiar with the deliberations in its report.
Comments from Draghi had thrown cold water on hopes the ECB would begin a program of sovereign-debt purchases called quantitative easing. The central bank held interest rates at a record low.
After a 97-point fall, the Dow Jones Industrial Average took a brief tour in positive terrain, hitting an intraday record of 17,937.96, and ended 0.1 percent in the red. Chevron led blue-chip losses that extended to 17 of 30 components.
The S&P 500 also rose to an intraday peak before finishing 0.1 percent lower, with materials the best performing and energy hardest hit of all of its 10 major industry groups in decline.
The Nasdaq dropped 0.1 percent.
Thursday’s U.S. reports had the Labor Department reporting fewer Americans filed for unemployment benefits last week, with jobless claims falling by 17,000 to 297,000.
On Friday, the government releases the November payrolls report.
Friday
Earnings: Big Lots, Vail Resorts
8:30 a.m.: Employment report
8:30 a.m.: International Trade
8:45 a.m.: Cleveland Fed’s Mester
1000 a.m.: Factory orders
3:00 p.m.: Consumer credit
News Sources: CNN Money & CNBC