Stocks spooked by Malaysian MH17 crash, lousy housing numbers

Stocks spooked by Malaysian MH17 crash, lousy housing numbers

Malaysian Airlines 777.
Photo of Malaysian Airlines 777 taking off from Zurich. A similar plane, en route from Amsterdam to Kuala Lumpur, was apparently shot down today. (Via Wikipedia)

WASHINGTON, July 17, 2014 – The Dow Jones Industrials got off the chocks not long after this morning’s opening bell, somewhat feebly attempting to break yesterday’s record high. But first, lousy housing numbers took the wind out of the market’s sails. Housing starts fell “unexpectedly” in May. Who knew?

Then around 11 a.m. EDT, news hit the wires that yet another unfortunate Malaysian jetliner—this time traveling from Amsterdam to Kuala Lumpur—had suddenly disappeared from radar and gone down in Eastern Ukraine.

The Maven was wrapping up a meeting with a CDN columnist up in College Park, Maryland at the time. But by the time he got in his car, circa noontime, local all-news radio station WTOP-FM, a loose affiliate of CBS, was airing a report that some “Ukrainian rebel group” (read KGB freelancers) was claiming credit for shooting the Boeing 777 down.

News has been spotty since then, but a consensus has been growing that the passenger jetliner, carrying some 259 passengers, had indeed been shot down by someone, likely those “Ukrainian rebels,” who, sources say, have been freshly supplied with plenty of heavy Russian-made military equipment this week, including sophisticated surface-to-air Russian-made missiles that can whack planes up to and beyond airline cruising altitude (circa 33,000 ft.).

Given that the 777’s footprint somewhat resembles other Ukrainian military aircraft the “rebels” have already shot down, one can put two and two together in this scenario.

Of course, Barack Obama, on Air Force One, en route for more Republican-trashing and fundraising prior to yet another two-week vacation, “had spoken to Russia’s Vladimir Putin,” who, presumably, told the American President to STFU.

In any event, things are fluid as we write this. But nervous traders have already concluded the Malaysian jet was shot down by those “Ukrainian rebels.” And, aided and abetted by poor housing starts which fell significantly in June—no doubt due to all those loans the big banks are still failing to make to the average Joe—the reaction thus far has been to dump stocks, buy Treasurys and buy gold, the latter of which helped our struggling ETF position in SGOL this afternoon.

“’The airliner news only adds to the drama around an unsettled market environment for those watching geopolitical events, not only Ukraine, but Israel and Iraq,’ noted US Bank Wealth Management senior equity strategist Jim Russell, according to CNBC.

All this is why we’ve been hanging onto that gold position, even though TPTB (aka “The Powers That Be”) totally don’t want us to own any. It’s a nice hedge against the world’s next Archduke Ferdinand moment.

In other happy market talk, Microsoft announced it would trim 18,000 jobs over the next year or so, goosing MSFT upwards as is almost always the ghoulish case with traders. They adore layoffs because that removes employee overhead costs from the stock’s shares, generally improving results for the next couple of quarters whether the company is really doing a good job or not. So much for that “rapidly decreasing national unemployment rate” the Democrats love to lie about.

Long story short: today is not a good day for the bulls.

Today’s trades:

Maybe a little bit of SGOL, but it’s best to sit on the sidelines for the most part on a confusing day like this one. Most stocks have been hit pretty hard as of this writing, but there’s no point in dumping them at the moment. Buying today might be okay, but only if you know your stocks will be up tomorrow. That’s right. Who does?

The Administration and the Eurozone will likely mouth empty threats if the Rushkies are seen to be behind the Malaysian airliner’s apparent shootdown. But they’ll do little else, as Vladimir Putin and his pals have already figured. So we’d expect a bounceback tomorrow or Tuesday at the latest. Why interrupt the big boys’ fun when they’re still playing with the Fed’s money? (At least through October or so.) Best to sit tight for now. Except…

Yahoo! (YHOO) might be worth a trade today or soon. The company continues its tradition of failure under its latest savior, Marissa Mayer, and reported mediocre-to-lousy numbers earlier this week, tanking the stock. But some unknown amount of premium may lurk in these shares due to the impending Alibaba IPO, allegedly likely to show up in September (but hopefully not on Apple’s iWatch-iPhone 6-whatever reveal day). This could give Yahoo shares a nice big shot in the arm come early autumn, making for a potentially swell trade.

So speculators might want to use any weakness here in YHOO to accumulate a few shares with which to play a bit of Alibaba-roulette. Well, it’s a thought, anyway. Nothing else Yahoo! has ever done seems to help the company or the stock break it through its own organizational ineptitude.

The same might be said for the current Congress and the current Administration in Washington.

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Terry Ponick
Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17