Tuesday, August 02, 2011

Well, it's a good thing we got that debt deal done

or else the market might have crashed :)

The last time the Dow went down for 8 straight days? October 2008 which was pretty much depths of the financial crisis. Today the markets opened facing some uncertainty about the future of our debt rating (Moody's affirmed our AAA rating, China's rating agency cut us to A with a neg outlook) but the bigger story was the charts. I hate to say that people have given up entirely on fundamental research but that appears to be the case.

The story of the day today was "Can the Dow defend 12,000?". When it became clear that there was not going to be a 3:30pm stick save the markets sold off aggressively and are all now roughly flat for the year. Technical analysis is an imperfect art but the next threshold people will be watching will be 11,550-11,600. If these areas are crossed it could trigger a major rush for the exits. Fun times!

This sounds pretty ominous...

"Plunging rates for chartering container vessels that carry sneakers, furniture and flat-screen TVs may signal a U.S. consumer slowdown and losses for shipping lines in what is traditionally their busiest time of the year.

Fees for hiring vessels have fallen 9.3 percent since the end of April, according to the Howe Robinson Container Index, which tracks charter rates for a range of vessels. Last year, the index surged 56 percent in the period, as lines added ships on demand from U.S. and European retailers restocking for the back-to-school and holiday shopping periods.

“The troubling part is that charter rates are falling in the peak season,” said Johnson Leung, head of regional transport at Jefferies Group Inc. in Hong Kong. “Sentiment among consumers and retailers isn’t very strong.”


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