Tuesday, October 08, 2013

So many headlines, so little time

The biggest market moving news of the night is that President Obama is set to nominate Janet Yellen to replace Ben Bernanke as the next Chair of the Federal Reserve.  Yellen is widely viewed as being a proponent of continuing many of the monetary policies that have existed for the past 2 years under Bernanke and that is believed to be bullish for stocks.

Unfortunately, there is little "wow" factor in this announcement as she was already the odds on favorite (1-7 were the last odds I saw) and despite popping immediately on the news, futures have started drifting lower already.

So, what was that all about today?  Stocks finally had a reaction to the idea that there is some serious dysfunction in Washington.  While it was not a sharp enough move to jump start any substantive negotiations it probably got their attention.  If you remember back in 2008 everyone was convinced that a TARP deal would pass Congress.  When it didn't, stocks crashed 800 pts, THEN Congress decided to act.  I'm not predicting a similar move, but absent such a crash, it's hard to see Congress coming together over a little 150 pt drop.

As I mentioned earlier today, the bond market freak out is what drove stocks lower and that move in interest rates was the greatest since the Lehman collapse 5 years ago.  If any further issues arise in the bond market we could see some real fireworks.

Other fun headlines to absorb......

* Alcatel-Lucent to cut 10,000 jobs

* The change in the Gallup US Economic Confidence Index in the last week was the greatest decline since the Lehman bankruptcy (there's that L word again).

* Since I mentioned technicals yesterday, I thought I would note that we did break through the 1,666 level which seems to indicate that we could be headed even lower.  I've seen people say 1,580 for the S&P and 13,900 for the Dow seem to be the chart targets they'd watch if this gains momentum.

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If you are a data junkie get ready to get your fix.  There is a TON of great data on the shutdown of the government at Enigma.io.  The chart at the bottom of the page shows each department of the government with it's % of employees furloughed and those that are exempt.

For example, it's no fun working for the Department of Education (95% furloughed), SEC (94% furloughed) or NASA (97% furloughed).  However, the VA, Homeland Security and Justice department seem to be suffering to lesser degrees.

Separately, is anyone else surprised that the Department of Veterans' Affairs is the second largest group of Federal employees representing 16.6% of all Federal employees?  We have 332,000 employees in this group serving 3.1 million veterans?  That was news to me.

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