Morning Stock Market Talk

Written by: Jack Boylan

As both the stock market and the dollar appear headed for a decline for the week, some of the news items below will be worth keeping an eye on today. And of course, we’ll see how bonds hold up heading into the weekend. While August is a quiet time on Wall Street (usually), there does seem to be an uneasy feeling out there.

– JP Morgan may be close to settling on their “Whale” losses from last year. If preliminary reports are accurate, it looks like CEO Jamie Dimon is going to come out unscathed.

– Crude is surging this morning as China reported some unexpectedly positive data.

– Uh-oh. What do these guys know that we don’t? Whitney sees massive layoffs in the financial sector coming soon. Hey, isn’t that the same sector propping up the markets… Marc Faber looks for 1987 style crash before 1013 is out. Ok, it’s hard to say that is a surprise coming from him, but still.  Private equity companies are taking the money and running even as the average investor is coming back into the market.

– And the , “cheapest, happiest company in the world” is…Costco? I’m not sure I’m convinced, especially since the category itself is, well, unique. but the article is interesting.

– Detroit’s bankruptcy is already hurting other bond sales as Michigan delays some paper. What’s odd about the story is that they seem surprised that investor’s are demanding higher rates in the wake of the Detroit debacle. General obligation bonds have always been categorized into the blue chip section of the muni market. Detroit has got many worried that is not necessarily true anymore:

“Investors can’t price a bond in Saginaw or Genesee or Battle Creek if they don’t know what a general-obligation bond means,” said Erik Gordon, who teaches at the University of Michigan’s Ross School of Business in Ann Arbor. “When somebody changes the rules of the game, there’s not much you can do about it, and you don’t want to play again.”

Yes, that is it in a nutshell. Right now officials are playing it cool and calm, but there has to be some deep worry behind the scenes.

– One quadrillion. There’s a number you don’t see very often. That is Japan’s debt level (in Yen) and for those of you that haven’t exercised your math skills in a while a quadrillion is a thousand trillion. Yep, quite a number. That represents about 230% of Japan’s GDP as they continue their own quantitative easing with gusto.

We’ll see how things shake out. There may be some jitters in the investment world at the moment, but that doesn’t mean you can’t have a good weekend. See you on Monday!


Morning Stock Market Talk

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