|Dow||-2.09 to 17,685.73|
|S&P 500||-3.08 to 2,048.72|
|Nasdaq||-26.73 to 4,675.71|
|10-YR Yield||+.029 to 2.351%|
|Gold||-$15.30 to $1,181.80|
|Crude Oil||-$0.16 to $74.45|
Six feet of snow.
That’s enough to bury houses, block or break doors, strand motorists for hours or days, and virtually shut down cities.
Buffalo and surrounding areas took the brunt of it overnight and yesterday. You can see from the picture below just how serious things were.
But it’s not just upstate New York. The National Weather Service reports that every single one of the 50 U.S. states … Hawaii included (at the top of Mauna Kea, the Big Island’s 13,803-foot-high peak) … experienced temperatures of freezing or below yesterday.
|Buffalo thruway this morning.|
Half the U.S. already has snow on the ground, and it’s not even Thanksgiving. Heck, the U.S. hasn’t been as cold as it was yesterday on any November morning in 38 years!
So what does it all mean for the markets? Or the economy?
Well, some amount of cold weather and snow can actually help retailers by prompting people to spend on cold-weather gear, as well as things like generators, shovels, salt, and so on. But too much causes people to hibernate — depriving malls of crucial traffic in the key holiday shopping season. We’ll have to see how conditions look on Black Friday and in the few weeks between Thanksgiving and Christmas.
Cold weather can also cause Americans to crank up their thermostats, and drive energy prices up in the process. Take natural gas. Gas futures slipped as low as $3.50 per million British Thermal Units (BTUs) in late October. But then they reversed course sharply and topped $4.50 several days ago.
The resulting chart pattern looks constructive to me, and if we take out $4.60 to the upside, we could see $5 in a heartbeat! That’s yet another factor helping to turn sentiment around in the beaten-down energy sector.
Bottom line: Keep an eye on the thermometer rather than just the Dow. If we get more days like yesterday, we could see retailers take a hit while energy stocks catch a bid.
|“If we get more days like yesterday, we could see retailers take a hit while energy stocks catch a bid.”|
How is the weather impacting you? Are you reading this from a snowbound home on the shores of Lake Erie … or a sun-kissed beach in Miami? Do you anticipate the weather impacting your holiday spending — or your investments? What about energy — will falling temps lead to rising oil and gas prices, and if so, how will you profit?
Use the comment section at the Money and Markets website to sound off. I’ll share and respond to as many as I can.
|Our Readers Speak|
Comments on a wide range of topics came in overnight, in response to recent columns I’ve written.
Reader Mike S. weighed in on the flood of cash that central bankers here and abroad are pouring into the market. His take: “Easy money equals easy gains but also big losses. Just a matter of time before the pendulum swings this way.”
Reader Billy doesn’t think it’ll be too long for that pendulum to swing, either. His take: “Your discussion on M&A mania having an analog with years 2000 and 2007 is absolutely another key puzzle piece that is now in place which indicates without a doubt — I’ll say that again, without a doubt — that a major, major stock market ‘correction’ is in the not too distant future. A ‘correction’ that will easily rival what happened in both 2000 and 2008.”
The risk is certainly out there, regardless of whether the Bank of Japan and its cohorts have temporarily papered over it. But in the meantime, I still see profit opportunities in select, highly rated stocks, in key sectors that are wrapped up in their own bull markets.
Meanwhile, Reader Bill S. said we should all stop worrying so much about the latest turmoil in the Middle East. He comments: “The Middle East will never change and has been the same for centuries. Start concentrating a little more on the good things that are going on in this country.”
And when it comes to the behind-the-scenes problems in the market, Reader John had this to say: “The problem is our economy. Corporate profits over customer satisfaction is adding to our inequality along with greed.
“The same is true in government. We are not getting our money’s worth. Government inspectors general and Congress are not doing their job of oversight. IG’s are complacent and Congress is worried about social, moral and religious issues. If the range of inequality was not so great, prices would come down and everyone could afford the cost of living.”
It has definitely been an uneven economic recovery, John, with many of the benefits accruing to those at the top of the income scale. We’ll need to see that recovery broaden out to build a solid financial future for this country.
Your thoughts are always welcome at the website on this or any other topic. So please don’t hesitate to share them here!
|Other Developments of the Day|
Are wages going to start rising … finally? That’s the case this Bloomberg story tries to make.
The general idea: We’ve used up labor slack, and now an increasing amount of industries will have to pay workers more to keep them from jumping ship for better opportunities elsewhere. We only have two jobless workers, on average, competing for job openings now — the best ratio (for jobseekers) since 2008.
The National Highway Traffic Safety Administration wants automakers to recall several million more vehicles amid concern that airbags in them could cause injuries. The Japanese airbag supplier Takata Corp. is under fire because its airbags are allegedly deploying with enough force to send shrapnel into drivers’ bodies. Its Japanese shares have plunged 56 percent in the past year.
Housing starts dropped 2.8 percent to a seasonally adjusted annual rate of 1.01 million in October. But permit issuance climbed 4.8 percent to 1.08 million, the highest since June 2008. The figures show a real estate market that remains on the mend, but where construction is still far off its bubble-era peak.
Traffic on L.A. freeways sucks, as anyone who has driven there knows. But it’s the traffic at the mega-container ports in Los Angeles and Long Beach that has officials worried these days, according to the Wall Street Journal. A range of problems, from higher volumes to rail system reconfigurations to labor issues, are reportedly to blame.
Until next time,