Financial Review
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DOW – 24 = 16,117
SPX + 0.27 = 1862
NAS + 2 = 4217
10 YR YLD + .06 = 2.15%
OIL + 1.16 = 82.94
GOLD – 2.20 = 1239.90
SILV – .08 = 17.47
The Dow is down for a sixth consecutive session. We started the morning down almost 200 points, so there is that. Part of yesterday’s volatility is being blamed on mini-flash crashes; 179 to be precise. Basically the high frequency traders yank their bids, as their algorithms try to catch up with big moves. It isn’t really a flash crash so much as a lack of liquidity.
Take a deep breath. Think about how you are invested. Consider whether you are diversified across asset classes. The market has not collapsed. It has gone down in a fairly fast and furious manner, but it has not collapsed. What will happen next? Will the market bounce back? Will it go sideways? Will the pullback continue and become really painful? You don’t know; I don’t know; the market doesn’t know; nobody knows.
Take a deep breath, consider where you are and where you want to be in the future. The stock market is always a gamble. Maybe you want to gamble with a part of your money, and that’s fine. Maybe you are tired of gambling and want to find something safer; that’s cool, too. Just understand what you’re doing. The volatility of the past couple of weeks is a reminder that the markets fluctuate; they are unreliable, and you have to have a plan in place.
It is earnings reporting season; here are a few of today’s highlights: Goldman Sachs posted earnings of $2.2 billion or $4.57 a share, up from $1.5 billion or $2.88 a share, a year ago. Goldman likes volatility, and the biggest increases in revenue and profit came from their bond trading.
Google posted a profit of $2.81 billion, or $4.09 a share, down from $2.97 billion, or $4.38 a share, in the same period a year earlier, even as revenue increased 20% to $16.5 billion.
Apple introduced a few new products today, an iPad Air and an iPad Mini, which are just a little bit bigger than an iPhone Plus, but they can’t make phone calls. They also upgraded the Mac, and the screen looks better. This follows one month after the debut of the new iPhone 6 which we learn today are the best-selling Apple phones yet. And the Apple Pay plan has been accepted by 500 banks, and will roll out on Monday. What we didn’t get was an Apple TV. I know, we’re all just waiting on pins and needles.
In economic news, the number of Americans filing new claims for jobless benefits fell to a 14-year low last week. Initial claims for state unemployment benefits dropped 23,000 to 264,000. The jobless claims report reinforced expectations that slack in the labor market was being reduced, very, very slowly; or it was just a statistical fluke tied to the Columbus Day holiday, which may have affected how the data was collected.
