Friday, January 28, 2011

Lots of reading

* GDP numbers were below expectations.

* Ford, Microsoft and Amazon all missed expectations.

* The Baltic Dry Index (a measure of shipping demand and global economic activity) fell another 4% today and is at it's lowest level in 2 years. This might be due to some external factors like additional capacity coming online, but it doesn't jive with the "robust global growth" story we keep hearing.

* If you're not following the action in the middle east I'd suggest you get up to speed really fast. These are some serious actions and I'd love to be a fly on the wall inside the US State Department right now. For example in Egypt we have a long-time US ally that is suddenly in a world of trouble. We want to support a person's right to peaceful demonstration, but now that the Muslim Brotherhood has apparently stepped in and joined the protest do we want the government to fall? They have that little canal over there that pulls about 1 millions barrels of crude through it every day (and a large pipeline that runs through Egypt with another 1.1 mm barrels per day). Now there is talk that Syria has cut off Internet service and there are rumblings in Jordan. I don't think I'd be sleeping to well in the house of Saud tonight. Oh, and as things get dicey over there, $4 gas might look like a bargain in another 6 months.

* Not to be outdone, Spanish and Portuguese bonds are back at record levels (indicative of higher perceived risk in the market for these bonds) as Spanish unemployment hits 20%.

The stock market is showing it's first cracks in about 2 months on all of this news and more. Typically, the computers have shown up around noon to "buy the dip" so we'll see if they ride to the rescue once again (all of the geopolitical news might make it hard to be long over the weekend).

Cheers!

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