WASHINGTON, June 11, 2013 — Markets are looking sickly again this morning, this time allegedly due to a mistrust of the machinations going on via the Bank of Japan. But what’s really going on, of course, is that the winter-spring 2013 bull market is way tired, “sell in May” seems finally to be taking its toll on participants, and nobody is in a mood to buy.
On the plus side, Standard & Poor’s ratings agency said Monday it’s getting more optimistic about the U.S. economy and no longer has a negative outlook. Better yet, S&P raised its outlook for the U.S. government’s debt rating and credited “the strengths of the economy.” But the market decided it didn’t care, perhaps remembering S&P’s glowing AAAAAA+ ratings for the bizarre debt obligations that essentially destroyed for at least a decade the hopes and dreams of most middle class Americans.
Ed Butowsky, managing partner of Chapwood Investments in Dallas, said that the unemployment rate is still too high, economic growth too weak and the government’s budget deficit too heavy for the economy to be considered healthy.
“It defies economic logic as to why the S&P did this,” Butowsky said. “…We continue to print money, we continue to spend money. What are they looking at?”
Others agreed with the S&P’s assessment, but said it was old news.
Trading volume was light yesterday, and there were no major economic reports or company announcements, something markets will also have to endure today. The 10 industry sectors in the S&P were split down the middle, with half rising and half falling, but none moved dramatically. The best performer, telecommunications, was up 0.8 percent. The worst, consumer discretionary, was down 0.3 percent.
Booz Allen Hamilton slid after a company employee said he had leaked information about secret government surveillance programs. The DC-based consulting company’s stock dropped 46 cents, or 2.6 percent, to $17.54.
Booz Allen reportedly paid the NSA leaker a cool $200,000 a year on contract to the U.S. Government. (That is, you, the taxpayer, paid him the $200K.) But it looks like this now self-confessed leaker, Edward Snowden, was happy to take the money, screw the government, and head for Hong Kong and the Chicoms who are obviously more progressive than the government over here.
Snowden may actually have a point, given the fact that this Administration is increasingly looking like an American version of Venezuela’s Hugo Chavez regime, using democratic institutions to destroy democracy. On the other hand, whatever your opinion on this issue, we’ve never really cottoned to unelected, self-appointed elitists like the current leaker who believe themselves morally superior and entirely above any kind of authority. Freud, were he alive, would probably have more trenchant opinions on the subject.
–AP contributed to this report
The market looks to open poorly this morning, making a second and perhaps decisive break with the usual Tuesday bull run people had gotten entirely too used to. We did put on a couple of positions yesterday which we may regret this morning.
But more importantly for us, we’re off on a three and a half day holiday later this morning with some friends who are dropping in from the great American Midwest. It’s off to visit some historic sites in Virginia, and we look forward to this welcome break.
As a result, we’re putting this column on hiatus for the rest of the week, which is probably no great loss, given that this market is almost too insane these days for anyone, including this writer, to make investing recommendations that will work for more than two or three hours at best.
So we’re staying put, except for a stop or two that might get hit while we’re on the road. But no new positions for us this week and perhaps for longer. It’s just too dangerous out there, and the 1% is still looking for the rest of our IRA and our savings that S&P and the scoundrels in New York haven’t already taken. Let’s not help them out!
Have a good week and we’ll see you Monday.
Disclaimer: The author of this column maintains several active trading and investment portfolios and owns residential and investment real estate.
Positions mentioned above describe this author’s own investment decisions and should not be construed as either buy or sell recommendations. The current market is highly treacherous and all investors travel at their own risk, so caution should be exercised at all times.
Illustrations, charts, commentary, and analysis are only the author’s view of current or historical market activity and don’t constitute a recommendation to buy or sell any security or contract. Views, indications, and analysis aren’t necessarily predictive of any future market or government action. Rather they indicate the author’s opinion as to a range of possibilities that may occur going forward.
References to other reporters, analysts, pundits, or commentators are illustrative only and do not necessarily represent an endorsement of such individuals’ points of view. If specific investment vehicles are mentioned in any article under this column heading, the author will always fully disclose any active or contemplated investments in said vehicles.