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Markets are constantly in a state of uncertainty and flux and money is make by discounting the obvious and betting on the unexpected. - George Soros

Wall Street Warns Investors; DOW JONES May Test Below 12,000. Flood of earnings coming from ailing financials, technology sector

Apr.11, 2008 in Market Outlook

End of the uptrend?
“As we saw Thursday and Friday, the uptrend for stocks is over for now, with the market now reacting to earnings and unable to break out of its recent trading range,” said Hinsdale’s Nolte.

Investors have also been betting that a U.S. economic recession would be shallow and brief. Yet, uncertainty over the impact of the credit crisis and the weak economy are still forcing investors to seek clarity into corporate earnings and outlooks.

“We start getting into the peak of earnings season, with 65 S&P 500 companies reporting next week, mostly from the financial sector,” said John Butters, analyst at Thomson Financial.
“We’re almost done in terms of profit warnings for this quarter, but now companies start giving guidance for the next quarter and that will be something to keep an eye on with all the uncertainty in the air,” he said.

Bad news is baked into the current price. The big concern is whether or not there will be financial improvement next quarter and the end of the year. If they imply the financial system will improve, everyone will know they are lying and will sell the stocks. If they tell the truth, that the next quarter and end of the year will be worse than can possibly be imagined, then the stocks will sell off. The best thing for them, is to not give any guidance. No one will know what to do.

Payback is VERY patriotic!!! I think Wall Street has a greater ability than most of us to send a message.

Although, I have to say I enjoy this type of action, as well:

Editorial: Cleveland’s study of banks’ work in the community is revealing
It’s a tool that could be even sharper Wednesday, November 28, 2007

http://www.cleveland.com/editorials/plaindealer/index.ssf?/base/opinion/119624289690400.xml%26coll=2

“Cleveland officials have just completed a commendably thorough review of how committed local banks are to Cleveland neighborhoods, businesses and residents.”

“They judged the banks on things such as their loans to residents with low and moderate incomes, loans to businesses, neighborhood and economic development participation, and employment and neighborhood branch data. ”

“Since the early days of Mayor Mike White’s administration, city law has required officials to make the assessment and then reward banks with the best rankings when divvying up about $100 million of municipal deposits. ”

“There’s significant leverage in rewarding banks based, in part, on how committed they are to Cleveland. JPMorgan Chase, which failed to submit substantial parts of the data the city sought, won’t get any of $100 million or so in community reinvestment accounts the city has invested. Chase also will lose the city’s huge payroll account - valued at up to $450 million - to Huntington National Bank, which offered lower fees.”

The closer communities watch what’s going on, the better we will be able to use our leverage to help ourselves. Unfortunately, our biggest obstacle is the corruption among governments and corporations.

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