Market Watch

Nowhere to Go but Up?

Nowhere to go but up right? Relatively low inflation rate and median growth. The future looks bright. I mean look at Wall-Street. Dow Jones at 14,164! The worst is over!

The herd may protect you from getting picked off but it can also drive you over a cliff without realizing it. Here are a few tidbits and some historical data provided by the studs at Hedge before people start jumping back into equities…

Dow Jones Industrial Average: Then 14164.5; Now 14164.5

Regular Gas Price: Then $2.75; Now $3.73

GDP Growth: Then +2.5%; Now +1.6%

Americans Unemployed (in Labor Force): Then 6.7 million; Now 13.2 million

Americans On Food Stamps: Then 26.9 million; Now 47.69 million

Size of Fed’s Balance Sheet: Then $0.89 trillion; Now $3.01 trillion

US Debt as a Percentage of GDP: Then ~38%; Now 74.2%

US Deficit (LTM): Then $97 billion; Now $975.6 billion

Total US Debt Oustanding: Then $9.008 trillion; Now $16.43 trillion

US Household Debt: Then $13.5 trillion; Now 12.87 trillion

Labor Force Particpation Rate: Then 65.8%; Now 63.6%

Consumer Confidence: Then 99.5; Now 69.6

S&P Rating of the US: Then AAA; Now AA+

VIX: Then 17.5%; Now 14%

10 Year Treasury Yield: Then 4.64%; Now 1.89%

EURUSD: Then 1.4145; Now 1.3050

Gold: Then $748; Now $1583

NYSE Average LTM Volume (per day): Then 1.3 billion shares; Now 545 million shares

A good indication of how the middle to poor portion of our population is doing can be provided by taking a look at businesses which rely heavily on that demographic. Lets check Walmart’s February sales (2013). According to Bloomberg….

“In case you haven’t seen a sales report these days, February MTD sales are a total disaster,” Jerry Murray, Wal- Mart’s vice president of finance and logistics, said in a Feb. 12 e-mail to other executives, referring to month-to-date sales. “The worst start to a month I have seen in my ~7 years with the company.”

“Higher payroll taxes “go against our customers’ wallet,” Family Dollar Chief Executive Officer Howard Levine said on a Jan. 3 conference call. “Clearly, they do not have as much for discretionary purchases than they did. Wal-Mart’s Geiger in his e-mail urged employees to improve business by “fixing something that could really make a difference to our performance.” He quoted Tim Yatsko , the company’s executive vice president of global sourcing, saying: “We need to ‘stop the stupid.’”

Stop the stupid indeed. Well. If the overlords are invested it is relatively safe right? Well not according to Biderman …

“insiders at U.S. companies have bought the least amount of shares in any one month,” and that the ratio of insider selling to buying is now 50-to-1 – a monthly record. “So far the mass delusion is holding.”

Hold steady captain. The icebergs will move before we get there….