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Sailors, Hookers and Rough Seas - Money Matters for 10/3/05 Don Bravo | 10/03/05
The fourth quarter is officially underway and the verdict is... mixed. US markets opened the quarter with a substandard session devoid of volatility. The Nasdaq was up a few points while the NYSE Composite and Dow Jones Industrials saw red.
The current dilemma is nothing more than a waiting game as investors hold pat or latch onto whatever scant good news there is (the price of a barrel of oil was lower today), in anticipation of third quarter earnings which are due out in the upcoming 2-5 weeks.
The betting is about evenly split that the important companies will meet or exceed expectations, though there are plenty of skeptics who claim that economic activity has slowed significantly - even before the twin hurricanes of the past month - and there's no turning back for many companies.
Automakers already are feeling the pain of high prices at the pump, as Ford and GM already are reporting slower sales.
As for those oil stocks, their fates are sealed. The price of oil cannot go any higher without causing serious damage to the US economy. Ergo, prices must fall and oil company profits with them. Supply will meet demand. And demand is falling. While there are certain elements of the populace that cannot curb their gas-guzzling habits, those that can, already have made choices. The absurdly high prices at the pump have escaped nobody's notice.
Also not helping matters are high Republican officials being indicted, investigated or scandalized almost daily. There's a crisis of confidence in the country and it is spreading fast. Wall Street usually reacts to such antics with all the aplomb of drunken hooker.
October, although it is usually a good month for stocks, is more associated with crisis and disaster, a la 1929 and 1987. There are enough black clouds on the horizon to scare even the bravest sailor. Rough seas ahead!
I've taken to checking Google news on Mondays to see the number of results returned for the word "recession." Today's total was "about 7,000." I'll update that figure next week.
BY THE NUMBERS
Dow Jones: -33.22; 10,535.48 close
NYSE Advancers: 1816
Nasdaq Advancers: 1623
NYSE New Highs: 230
Nasdaq New Highs: 161
Gold: -3.00; 469.30 close
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