Tuesday, October 14, 2008

In a Strange Way a 600 point Intraday Swing Seems Calm...

The markets looked poised to continue the global market rally at the open, but slowly faded throughout the day as profits were taken as we neared the 9,800 pt mark on the Dow. The Dow actually swung 660 points from its high to its low during the session, but because it finished down just 77 points there will be little discussion of the markets in this news cycle (note however, that the NASDAQ was off 3.5% for the day and finished down more than 6% from it's intraday high).

Boy, where have I heard this theory before.....

"Notwithstanding the government and Treasury's actions focusing on financials, the general economic environment has deteriorated quite a bit in the last five or six weeks,'' said Jonathan Armitage, head of U.S. large-cap equities at the American unit of Schroders, the U.K. manager of $259 billion. ``You're just seeing different parts of the equity market reacting to that.''

To that point, did you notice that two of the big earnings misses today were Domino's Pizza and Pepsi?

Domino's:

Who else remembers the Noid? Avoid the Noid! Anyway, I'd guess Domino's shareholders are a little Annoyed right now.

Domino's Pizza Inc posted a weaker-than-expected quarterly profit due to a sharp drop in U.S. sales, the biggest independent U.S. pizza chain said on Tuesday, and its shares fell as much as 19 percent.


Pepsico:

PepsiCo Inc., the world's largest snack maker, said it will cut 3,300 jobs after profit declined more than analysts estimated and the company lowered its forecast for the rest of the year. The shares dropped the most in almost 26 years in New York trading.

I think it's pretty telling that people are cutting back on chips, Pepsi, and bad take-out pizza. I think it's clear that we need a stimulus payment directed to consumers that will increase their junk food purchases (clearly that's sarcasm - the way Congress is spending I wouldn't put it past them).

We get PPI and Retail Sales Data tomorrow. It should be interesting (PPI could be lower than expected b/c of falling energy costs, but Retail Sales could be stunningly bad, we'll see which headline gets more play).

Cheers!

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