Sell-off seems more like the real deal
This bump might indicate that things are worse than business as usual after all.
Aided by Dupont (DD) and Texas Instruments (TXN), are we just going to go right back to where we were before the programs kicked in? Was this some errant bet by some market player who believed Romney would score a KO Monday night and Romney is better for stocks than Obama?
Seriously, that whole move is a total head scratcher. When I was trying to write my open for last night's show, I was acutely conscious that by the time I finished having my makeup applied, which actually takes about seven minutes, the market's coloration had changed and changed for the positive -- for no reason whatsoever.
Of course, when it's happening, you think the decline was for no reason whatsoever, given that the last word is so final in this game.
Now we look at the landscape and we think perhaps Friday's sell-off was the beginning of something bigger?
How about this way to look at it: We are seeing some weakness in the industrials but pretty good performance in other sectors, including domestic housing and banks. We are seeing pronounced weakness in tech as that sector shrinks. We are seeing that oil and gas can't rally when Iran is making nice, something I didn't think would matter much but is clearly a cause and effect the day after a debate, when nobody seems to want to upset Iran.
And we have the higher-yielders hanging in as slowdown talk intensifies.
To me, that feels like slightly worse than business as usual, so the run-up was a joke.
This feels more like the real deal, and I am beginning to believe it will remain that way until tech plays a smaller role in the S&P, because it is tech and even the tech divisions -- think Dupont -- are hurting this market.
Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and is long DD.
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Do you realize that Ben Bernanke lent more billions to banks today? Narrow-minded Republicans are always ranting about cutting spending but our expenses are already to the bone. What isn't is the cost of the Bush Wars at $1 BILLION a day and the interest on borrowed money. Most are aware of Ben's Quantitative Easing and that idiot Hank Paulsen's T.A.R.P. but few realize the principle of Fiat Printed Money. Every new printed (or electronically designated) dollar does two things: it reduces the value of all other dollars' spending power AND it creates an obligation. Banks aren't making money. They are losing LOTS of money and don't keep proper books. Once, regular Americans could go to the FDIC website and review the Universal Bank Profitability Report. It told us where banks were making money and losing it. It isn't available to us now. Major banks borrow continuously. We are likely in debt some ridiculous number like $100 TRILLION. Not the National Debt, but all debt, which includes the Debt Notes from the Fed and Derivatives Contracts. It's way past time to:
Close the banks, end the Federal Reserve and get rid of Wall Street. Within these three pariah are 100% of our woes and suppression.
"VL, you seem to know alot. Maybe you could explain for me how obama is going to grow this economy from the middle class out, like he said in the second debate?? Not sure how the middle is going to create jobs?? Please inform me with your high IQ."
Commonsense. If Obama continues the job desert for middle aged former middle class, they become a guaranteed liability in less than 10 years. Add the SSI deficit and the huge gap in competence created by corrupt hired-in executives and filthy scum Board directors. As a bonus, throw in the terrorist level politics of Republicans. These make one huge mountain of problems. BUT, if he has a cooperative and intelligent Congress, it will abolish The Tax Reform Act, The Gramm Leach Bliley Act and the Federal Reserve Act. This creates a void because hired-in management can't perform without collusion in the financial sector, but the mass-terminated former career people can. Hire them back by eliminating the hired-in executives and using those ridiculous compensation packages to fund the recovery. Once in place, begin placing the younger generation workforce as team players. Spike gas to $100/gallon but roll out mass transit and begin shifting to a self-reliant infrastructure and society. Simply... frown on exploitation, support intelligent design shift and alternative growth. Segregate money touchers. If multiple entities handle your money, they're more likely to expose corruption. Tax the HELL out of investments and gains that don't recover and sustain America.
What we need is a limit on the terms of every nationally elected office position. Change the House term from 2 years to 6 years. Limit the Supreme Court Justices to a 10 or 12 year appointment. Limit the President to a single 6 year term in office. Senators remain at 6 years. Then allow for the ability to throw the bums out if they are caught with their hands in our pockets. No exceptional retirement or health benefits... just like the rest of us.
In addition, change the tax code to a VAT system where anyone that buys anything pays a tax to support he needs of the country with no exceptions. Do away with the IRS completely other than just a handful of independent accountants to collect the VAT taxes due.
Otherwise, no matter who is elected, they just get rich and forget about those of us that put them in office. Corruption takes over due to the senior members (some, not all) of Congress guiding the newly elected on how things are done behind closed doors.
The corruption has to STOP!
Today was an opportunity for me to buy back the SPY Nov Calls I sold a few weeks ago. 3.56% gain in less than a month vs a 3% drop in SPY… I’ll take that every time.
That said, I’m not all doom and gloom like a lot of people seem to be. I also took the opportunity yesterday and today to add a few more put spreads and deep in the money calls into my portfolio. I know news has been bad and there is a lot of uncertainty but seriously INTC, CAT, MMM, DD all with P/E below 15x, some below 10x. That is nuts. Their yields alone almost justify the prices they are at now. Meanwhile you have companies like FB (P/E ~50x) and LNKD (P/E ~250x). It is like the market has gone dot com stupid again. There is no logic in the pricing in this market. As bad as things are, fundamentals still matter. There are lots of good deals out there.
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Current conditions are a perfect recipe for ringing the register. The hottest stocks, in particular, could see some real mayhem ahead.
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