Energy Stocks and Broken Trust

Once again, energy stocks seem to be driving the market. We're wrapping up the day up (mildly): the Dow closed up 9.84, the NASDAQ closed up 4.05, and the S&P 500 closed up 1.27. Chevron, ConocoPhillips and Exxon Mobile all hit 52-week highs today (before pulling back) - mostly on the fact that crude oil prices are near a 2-year high (thank you, Fimbulvetr!).

But, whatever good may have come from the Fimbulvetr's impact on those oil prices is more than being offset by the impact the blizzard (and the ravening packs of lean, hungry wolves) is having on retail sales. ShopperTrak is showing a 4.1% year over year decline in Christmas week retail sales, and is estimating that the blizzard has postponed about $1 billion in retail spending.

On the other hand, the S&P 500 is up 6.7% for the month (rising in 17 of the last 20 sessions). The bad news is that volume has been extremely light, indicating that investors are waiting to see if this is just a Santa Claus rally, or if this is sustainable.

In California, Operation Broken Trust strikes again. Winifred Jiau has been charged with one count of securities fraud and one count of conspiracy for leaking inside information about multiple publicly traded companies from 2006 - 2006. If convicted, she faces up to 20 years in prison.

What Happened In The Market?

We had bad Case-Shiller and bad Consumer Confidence figures, and the markets still ended on the up side of mixed (Dow up 20.51, NASDAQ down 4.39, S&P 500 up 0.07). What happened?

Reuters, at least, gives the credit indirectly to the blizzard and directly to energy stocks being boosted by an increase in oil prices. Why the blizzard? It helped push oil prices near to a 26-month high (February oil futures were up $0.38 to $91.38 a barrel), and the rising oil prices helped push oil producers up in the markets.

I haven't seen the figures yet, but it wouldn't surprise me to see that commodities in general were either flat or down today - China announced that it will cut its export quotas for rare earth minerals[1] by 11.4%. This is a concern, because these elements are used in quite a bit of high-tech manufacturing[2], and because China produces something like 97% of these minerals. The EU, the United States, and Japan are particularly upset, and there is some possibility that the US will file a complaint with the World Trade Organization.

The Singapore Exchange is in the process of trying to take over the Australian Exchange to the tune of $8 billion US dollars. This is somewhat controversial in Australia, because their major exchange would become a subsidiary of the Singapore Exchange, and the government of Singapore owns 23.5% of the Singapore Exchange. As of December 15 the deal had been approved by the Australian Competition and Consumer Commission. Now it just has to be approved by the Treasurer of Australia, pass through the Australian Parliament[3], and then be approved by the Monetary Authority of Singapore. Investors are cautious.

[1] There's reasonable list available on Wikipedia.

[2] Wind turbines, hybrid cars, iPhones, flat screen TVs, and anything else that has a use for magnetism, luminescence, and strength.

[3] Which seems to be of the opinion that the merger is "fanatical marketism that is taking away our sovereign right to self determination"

Trading In A Winter Wonderland. Sorta. More Or Less.

Stock performance on Wall Street was mixed today (the Dow was down 18.46, the NASDAQ was up 1.67, the S&P 500 up 0.77, and the 10 Year Treasury Yield Index down 0.42), with blame being placed squarely on God and China.

God gets the blame because of a series of blizzards that have brought the Fimbulvetr[1] to the eastern coast of Canada and the United States. It's cancelled over 2000 flights, disrupted road and rail traffic, left tens of thousands of homes across the eastern seaboard without power, and - worst of all - threw a monkey wrench in the post-Christmas holiday sales. Yes, that's right. This massive blizzard could "push December 26 out of the running for one of the top 10 shopping days of the year." Sure puts that whole blizzard in perspective, doesn't it?

And China[2]? Well, they get the blame because - in what is obviously a Communist plot[3] - went and raised their benchmark lending rate and their benchmark deposit rate by 25 basis points each. Never mind that the Chinese central bank has been concerned about inflation, and so is taking steps to reign it in and keep their economy healthy. No, this was obviously a Communist plot deliberately timed to strike our economy at the same time as the blizzard[4].

Of course, things happened throughout the world without regard to the blizzard. Let's see what else is going on.

H&R Block was down 7% today on news that, thanks to the Office of the Comptroller of the Currency, they will not be allowed to offer tax refund anticipation loans. (Well, specifically, HSSBC can't offer them, and H&R Block uses HSBC.)

18 alleged militants were killed by missiles fired by US drones at the Mir Ali village in Pakistan. The people of Pakistan are not particularly amused.

Anyone remember AIG? Practically the poster child for the 2008 financial collapse? Something like 30 banks have banded together under the administration of JPMorgan Chase & Co to loan them $4.3 billion. That's "billion". With a "b". Assuming they can pay off their Federal Reserve Bank of New York credit line ($20 billion) by March 31.

Also, according to the European Union Times, it appears that WikiLeaks is set to reveal that the United States has been in a covert war against Antarctican UFOs since 2004.

[1] "Hard is it on earth, with mighty whoredom;

"Axe-time, sword-time, shields are sundered,

"Wind-time, wolf-time, ere the world falls,

"Nor ever shall men each other spare" sure seems to describe the current state of the economy.

[2] Still not wanting to replace the United States as the single dominant economic and military superpower in the world.

[3] Obviously.

[4]