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LOL - stock market RALLIES despite poor employment report...

Discussion in 'Political Discussion' started by DisgruntledTunaFan, Dec 5, 2008.

  1. DisgruntledTunaFan

    DisgruntledTunaFan In the Starting Line-Up

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    Stocks shake off jobs report to end with big gains - Yahoo! Finance

    Stocks shake off jobs report to end with big gains

    NEW YORK (AP) -- Wall Street has put an upbeat spin on the government's report that the nation lost more than half a million jobs last month. Stocks reversed early losses to finish sharply higher as the job numbers raise hopes that Washington will again step in to help the economy.

    The Dow Jones industrial average traded in a 568-point range Friday before closing up 259 at 8,635. Investors have moved past initial shock over the Labor Department's report that employers slashed 533,000 jobs in November and put the numbers in perspective. A weak reading on employment ultimately wasn't surprising to a market growing accustomed to bad news.

    All the major indexes are up more than 3 percent.
     
  2. DarrylS

    DarrylS PatsFans.com Supporter PatsFans.com Supporter

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    Why laugh when another 533K are out of work.. sick mind I guess???
     
  3. DisgruntledTunaFan

    DisgruntledTunaFan In the Starting Line-Up

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    My point is that the market is RIGGED. Where in my post did I say I was laughing at the 533K unemployed? If anything, I am FLOORED at the suckers who think investing in the market is a great idea now.

    BTW-google "Plunge Protection Team", and you'll learn how TPTB do their best to keep the markets on life support. CNBC has also been blurbing it recently.
     
  4. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    #24 Jersey

    A massive number was already baked in. Yes, I expected it to be down big today but I think there was some relief it was over. It's all controlled by the big hedge funds now, anyway, and there's no way to know when they need to put money in or out. I'm happily putting new money in cash for now, I've had enough of the losses for a few lifetimes.
     
  5. shmessy

    shmessy Maude Staff Member PatsFans.com Supporter

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    #75 Jersey


    Stock markets have historically emerged from their lows on average 6 months before recessions reach their lows.

    IF this is the beginning of a longer-term market upswing (IF) then there is nothing abnormal about this.

    "Sell on the rumor, buy on the news" - - it's been around for over one hundred years.
     
  6. shmessy

    shmessy Maude Staff Member PatsFans.com Supporter

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    #75 Jersey

    Put NEW money in aggressives (dollar-cost averaging).

    Put OLD (static) money in conservatives.

    With all due respect, you have it backwards.
     
  7. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    #24 Jersey

    I'm sure you're right - can you explain why ?

    Is it because the new money would buy more shares/$$$ whereas the "old money" has already bought less shares/$$$ but each share is now worth less ?

    (sorry if that's stupid, I don't understand all the mechanics of this stuff).
     
  8. shmessy

    shmessy Maude Staff Member PatsFans.com Supporter

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    #75 Jersey


    Not stupid at all, man. Your question is very much to the point.

    Your post above has it correct.

    If I recall correctly, you had said before that getting back up to 8500 in the Dow short-term would be a sucker's rally and you would get out there because you felt it would be short-term risky at that point.

    IF you want to be more conservative than before, you should ramp down the EXISTING part (there's nothing good about negative risk for EXISTING money). For the FUTURE DOLLAR COST AVG money (tip-toeing in at regular intervals) with your new contributions, negative risk is a GOOD thing - - specifically, because for that money, drops in market value mean discounts for your purchases.

    Summary: There is nothing good about a market drop for EXISTING, STATIC accounts. There is LOTS of good about a market drop for ACTIVE, DOLLAR COST AVERAGED accounts. As always, a long-term (5+ years) perspective is necessary. If you're talking about money where you need the principal within 5 years, then keep it away from stocks.

    For your situation, IF you truly, long-term, want to ramp down your risk, but keep opportunity for gains, then become less risky in your nest egg (already existing) part and ramp up the risk on your future dollar cost average contributions.
     
    Last edited: Dec 6, 2008
  9. wistahpatsfan

    wistahpatsfan Pro Bowl Player

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    #75 Jersey

    This thred should have been titled, "LOL - stock market RALLIES becuase of poor employment report...

    Layoffs and "streamlining" helps a company's share price.
     
  10. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    Free investment advice...interesting stuff shmessy. I've been thinking of changing my portfolio for my 401k, so good timing.

    Thanks for posting
     
  11. shmessy

    shmessy Maude Staff Member PatsFans.com Supporter

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    #75 Jersey

    Dow Chemical to cut 11% of workforce, closes facilities - MarketWatch



    DOW 19.00, +0.68, +3.7%) said Monday it will cut about 5,000 full-time jobs as it accelerates a strategy to cut costs to address "current economic realities." Further, the Midland, Mich., chemical giant will dismiss 6,000 contractors, idle 180 plants and shutter 20 facilities in "high-cost locations." The job reductions represent about 11% of Dow Chemical's global workforce, the company said, and should result in $700 million in annual cost savings by 2010. Shares of Dow rose 4.4% in premarket trading to $19.84.

    ----------------------------

    Notice the last sentence. That's how it works.

    As I said before, the mantra on Wall Street is "Sell on the rumor, buy on the news".
     
    Last edited: Dec 8, 2008
  12. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    So are you saying that people are buying based upon this report of huge expected reductions in income? That buying is ocurring because these cuts may make Dow more profitable?

    To me, this makes no sense because earnings are forecasted to decline making the company less valuable as in addressing "current economic realities." .
     
    Last edited: Dec 8, 2008
  13. shmessy

    shmessy Maude Staff Member PatsFans.com Supporter

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    #75 Jersey


    The forecasted earnings decline has been already divulged and talked about - - -the market reaction has already digested that.

    The "cure" (I'm not judging it, just saying it is the proactive ACTION that is being taken by the corp) is the job cuts.

    Kind of like someone finding out they have gangrene in their leg, then having to wait two weeks for the amputation.

    The market knew all about Dow Chemical having bad earnings numbers and a bad economy for months now. The jobs cut today is Dow saying "Here's what we're going to do to balance the bottom line in the short-term".

    Remember, the market (especially today) is VERY short-term oriented. Great companies with great long-term plans often get mauled based on the ADD of traders.
     
    Last edited: Dec 8, 2008
  14. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    #24 Jersey

    I'm still shocked that after Friday's news not only did it rally but it is to start off again today. I'm convinced this is a bear market rally, though, it's tempting to move some of my money out right now to regain some of my losses then get it back in at a lower price. I'm not a "day trader" by any means but I am like everyone else looking to rescue a bit of what we all lost the past 12 months.
     
  15. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    It could definately be a bear market, but if it is, it's a "mini-bear".

    I would bet thousands we have yet to see the bottom. That's just the way the market has been going. First we have one bottom, then a rally, then a lower bottom, then a rally...

    I don't think Wall Street has been too good at factoring in variables to date. Do you & shmessy agree we have yet to see the bottom?
     
  16. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    #24 Jersey

    We may have seen the bottom, that's tough to say, but most experts seem to think the bottom will be re-tested and that was 1,500 or so points ago.
     
  17. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    Here's my theory....

    I think there's a lot of hope & excitement about all the bailouts and specifically, Obama's Big Stimulus plan. But when we finally see that it will have little effect upon the economy, a new bottom will be hit.

    I do not think (just my opinion) that the stimulus will have any impact at all upon consumption. We see unemployment increasing at a rapidly accelerating rate moving forward. This causes people to worry about their own jobs and cut back on personal consumption even more. People are not going to decide to buy a new American automobile because of a stimulus package...the auto bailout will also have little long-term effect and one or more of the big 3 will eventually fail.

    I think the December and January unemployment levels that come out will be just as bad as November's. At some point, this will have erode any bear market trend. As we all know, the Dow can not approach anything close to the levels of 14,000 for years to come. That was based upon over-consumption by Americans based upon the belief that our personal wealth was soaring. Now that we know the truth about personal wealth, why would Americans spend like that again? What would it be based upon?

    And when you get right down to it, stock values MUST reflect consumption since it drives 70% of our GDP.

    Net/net is that I strongly feel the current mini-bear market is based upon hope & speculation that Obama can really have an impact upon the economy and I don't he will. Look at the great depression and all the money spent to fix the economy. If anything, it is believed to have worsened it.
     
    Last edited: Dec 8, 2008
  18. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    I guess no one wants to respond to a "downer" post like mine...:cry2:
     
    Last edited: Dec 8, 2008
  19. shmessy

    shmessy Maude Staff Member PatsFans.com Supporter

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    #75 Jersey

    I don't know what the market is going to do in the next ten minutes.

    I don't forecast the stock market. I think my dim view of market timing has been pretty well covered by now.

    The economy? That's a different story.
     
    Last edited: Dec 8, 2008
  20. shmessy

    shmessy Maude Staff Member PatsFans.com Supporter

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    #75 Jersey


    Two things:

    1) The Dec and Jan UE levels will be WORSE not "just as bad" as November.

    2) You're still tying stock market direction to economy direction? Check it out, some of our best stock market gain years began during recessions. As mentioned, stock markets tend to begin recoveries on average 6 months before economies do.
     

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