Do you think the rally has stalled?

Question:

The stock market really hasn’t moved too much one way or another for a few weeks. Do you think that the economic rally has stalled?

Answer:

I think that it has stalled for now, but that could be due to the poor reports coming out about unemployment. If you look at other factors such as retail sales (which were up for the past month) then the economy is doing a bit better in the way of consumer spending.

I think over the next few months, the rally will continue but it will be more gradual.

When I woke up this morning, I wondered if, as a society, we are overly medicated. I wondered because I woke up with an awful sinus headache, the kind I cannot shake unless I take a couple ibuprofen and an allergy pill (my choice today was Allegra).

It can be argued that modern medicine has led to great things such as people living to be 90 and older which was once simply unheard of also, children being able to fight off cancer (which was also unheard of). It can also be argued that modern medicine has led to the failure of natural selection.

It just seems like, overall, we have a pill for everything. If you watch the national news in the evening, it is very obvious that there are too many medications. There are so many that they have started to combine medicines. If you look, there are at least a dozen different kinds of drugs for something as common as heartburn.

When is the last time you walked into the drugstore and actually looked at all the different pain relief medicines? How about allergy medications? After Chris caught a cold last week, I literally spend half an hour looking at different cold remedies when I just gave up and bought DayQuil.

Pharmaceuticals is a HUGE business. Just look at this list. It’s outrageous when you start to look at all the money we spend yearly on medication. I don’t believe that we’ll all be walking around in a drug induced stupor anytime soon, but maybe we shouldn’t run to the medicine cabinet whenever something hurts or we should start looking for more natural remedies for common problems like headaches, allergies, and upset stomachs.

Again, this is all just something I was thinking about this morning when I woke up. It is a little bit of a scatterbrained idea, but when I realized I was fumbling around for the same drugs I run to every time I get a sinus headache I stopped and thought about my mindless actions.

The two month rally we saw in the stock market since late March has now officially hit a ‘plateau’. As that happens, investors naturally and understandably move to more defensive stocks, avoiding ‘gutsy’ moves. Stocks ended considerably low yesterday, or at least lower than expected, at closing, 4:00pm eastern time. As stated in a previous article, it is normal and healthy for an incline to fluctuate, mostly as investors break out of the defensive shells they confine themselves in and get a feel for the new increases. The main problem with this is that investors hold they key to where the stock market goes from here and the next few days are crucial.

If investors are unnecessarily cautious, that rally can be short lived, keeping the economy in the hole it is in, which is what is beginning to occur. If investors begin to risk a little again and stock prices rise as demand rises, the economy as a whole takes notice and rises accordingly. If Wall Street can hit enough of a rally, creating more money and productivity, jobs are created. It is a natural process. The next few days are crucial because we are waiting for investors’ next moves. The time to invest in the stock market is tomorrow morning. Prices are still very low, but investors spending new money, especially on more risky moves, hoping to jump on a successful rally, creates a positive self-fulfilling prophecy. Investors all investing wisely, hoping to catch the rising tide will boost the tide much higher, lifting everything. As the quote says, “a rising tide lifts all boats,” supposedly coined by Sen Lemass, former Irish prime minister.

Investors moved to investing in staple items like pharmacutical Pfizer Inc. and food and drink manufacturers like Coca-Cola that still perform in a downturn, your expected safe moves, preparing for the rally to collapse. (Pfizer’s chart looked like a roller coaster yesterday, spiking just before noon, just after noon, and just before closing.) This could also be a self-fulfilling prophecy. If all investors invest safely, the economy turns to safe mode and closes low. We have officially gotten a taste of a good rally, with the Dow bouncing up over 8,000. The only hope is that investors got addicted to the rally and the economy performs.

The president of Stuart Frankel & Company, Jeffrey Frankel, commented, “You have people who missed this mammoth rally and now those people are taking the opportunity on any pullback to buy.” Here’s to hoping he is correct. If that is the case, this plateau will attract the last-minute rally investors and shoot back up. If he has it pegged, we are looking at a short-lived plateau.

Analysts say that the rally we just finished off was overdue, and that the 155 point dropped followed by a 50 point rise akes it difficult to tell if the rally will kick back up or not. Investors pulled technology stocks as the Nasdaq composite index dropped .09%. The Dow rose a minimal 50 points today. Economic and corporate reports show that the economy is stabilizing, but the market is slower than usual reflecting it as cautious investors fluctuate. Many companies whose stocks pummeled late last year are already turning to the markets for cash by selling out stock, indicating a restored confidence in the market.

Most banks are down for the second day in a row, but falling only pennies. General Motors, on the other hand, is to the lowest level since the Great Depression, mostly due to investors that are worried their stocks will lose even more value if more are issued as projected or if the company declares that ‘inevitable’ bankruptcy everyone talks so much about these days. By closing today, GM was trading as low as $1.09. Exxon Mobil rose 2.2% due to the safer investments being made these last two days. Bond prices lowered but leveled off as the Federal Reserve bought about $6 billion in government debt as an effort to artifically lower interest rates and reduce loan costs.

The FTC has told advertisers that they must begin showing “typical results” when advertising a product.

It seems like as long as companies threw in the phrase “results not typical” then everything was fine and the commercial could go on advertising results that many of us would never receive.

These are some of the new FTC requirements:

•Consumer testimonials would have to be substantiated and ads would have to include generally expected results. Endorsers, not just advertisers, could be held liable for deceptive claims. “You’d have to say not only is it extreme, but how extreme is it,” the FTC’s Richard Cleland said.

•Celebrities who talk up a product in an interview must disclose if they are getting paid for the promotion. Celebrities who endorse products would have to disclose if they have an ownership interest.

•Expert endorsers, like doctors, must have experience in the product area they are endorsing. If they don’t, the limits of their expertise must be stated. For instance, an ophthalmologist identified only as a doctor could not be portrayed as an expert physician endorsing a hearing aid.

•Bloggers who get free products and then endorse them on their blogs would have to make it clear they got the products free.

I would love to see typical results on these commercials, I think it would be pretty funny. I’m sure there won’t be too many ads about diet pills anymore if they can’t show their pride and joy users…
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This isn’t the first time Bernanke has said that he believes the recession will begin to “level off” or end by the end of the year. He told Congress in January the same thing.

I think that Bernanke is going on the record with 60 Minutes now because he wants to reiterate to the public what he believes is going on with the economy and that we are on the right path. If he can get word out to investors, some stablility can come back to the markets or even the rally can continue through this week. When news like this comes out, it typically has an impact on the direction of the market.

So, why have gas prices steadily risen for the last few weeks. When oil was at $35 a barrel right before Christmas I was paying $1.49 a gallon, now I’m paying $1.79…with prices just updating in the last day or two.

Even the average gas price is rising, so it’s not just local. However, my area is typically (being in Mississippi) lower than the average by about $0.10, but now is only lower by $0.01.

Jane Wellman authored a report from the Delta Cost Project to find out why and here’s what the report had to offer:

–The main reason tuition has been rising faster than college costs is that colleges had to make up for reductions in the per-student subsidy state taxpayers sent colleges. In 2006, the last year for which Wellman had data, state taxpayers sent $7,078 per student to the big public research universities. That’s $1,270 less (after accounting for inflation) than they sent in 2002.

–Public universities have been reining in overall spending per student in recent years. Flagship public universities’ spending per student has risen from about $12,400 in 1995 to $13,800 in 2006 after accounting for inflation. But since 2002, spending at public colleges has generally not exceeded inflation.

–Increases in spending were driven mostly by higher administration, maintenance, and student services costs. Public universities spent almost $4,000 per student per year on administration, support, and maintenance in 2006, up more than 13 percent, in real terms over 1995. And they spent another $1,200 a year on services such as counseling, which was up 23 percent. Meanwhile, they spent about $8,700 a year on classroom instruction for each student, up about 9 percent.

–Big private universities, powered by tuition and endowment increases, have increased spending dramatically while public schools have languished. Total educational spending per student at private research universities has jumped by almost 10 percent since 2002 to more than $33,000. During that same period, public university total spending was comparatively flat and totaled less than $14,000 a year.

Perhaps at other colleges this is the norm, but I just can’t find out where my college spends $4,000 a year on me for administration, support and maintenance, unless they are talking about keeping the lights on at the giant football stadium all night, when there is no football game going on…I get emailed from my student advisers and the administration at my college processes my financial aid every year…And some of my teachers aren’t worth the paper that their pay stub is printed on. To cut costs perhaps a university should start re-evaluating their tenured professors according to the student evaluations that are published every semester.

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Luckily everyone on board survived, all 155 passengers, the crew, and the pilots. During the rescue passengers were seen literally waiting on the wings of the crashed and still floating plane. Within minutes ferry boats and the coast guard were on the scene to rescue those waiting.

After the news broke this afternoon, media agencies began to let us know how often aircrafts hit birds. The odds of your flight hitting a bird is 10,000:1. Those odds are pretty scary, but usually the only aircrafts that are impared by birds are small planes, not commercial jets.

Here are some pictures from the AP from today’s crash:

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The Dow rose 258.30, or 2.94 percent, to 9,034.69, finishing the week up 6.1 percent. The blue chips last closed above 9,000 on Nov. 5, when they stood at 9,139.27.

The Dow, the oldest of the big market indexes, fell 33.8 percent in 2008, its worst performance since 1931, during the Great Depression.

Like the Dow, broader stock indicators also advanced for the third straight session. The Standard & Poor’s 500 index rose 28.55 percent, or 3.16 percent, to 931.80, its highest close since Nov. 5. The Nasdaq composite index rose 55.18, or 3.50 percent, to 1,632.21.

For the week, the S&P 500 finished up 6.8 percent, while the Nasdaq rose 6.7 percent.

The Russell 2000 index of smaller companies rose 6.39, or 1.28 percent, to 505.84. -AP

Perhaps the market is finding a bottom. I won’t judge anything because there were plenty of early predictions about 2008 that were horribly wrong. I won’t speculate, just enjoy a rally.

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Christmas Eve is a quiet trading day on Wall Street, but it was enough to increase the Dow Jones Industrial average by half a point. Companies like Delta benefited as oil prices fell further to under $38 a barrel. Large retailers Wal-Mart and Target also did well as last minute shoppers packed their stores.

It wasn’t exactly the “Santa Claus” rally of some people’s dreams, but it was an end to the 5 day slump.

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Even preliminary reports have said that consumers spent more this weekend than the same weekend 2007. However, the whole picture won’t be there until stores release the same-store sales for November to test the retailer’s health in the current economy.

Wall Street had a good week last week and will be looking to continue the upswing.

Wal-Mart will also be accepting ads from competitors…even door busters. Looks like this year Wal-Mart is really trying to kill the competition, literally…this holiday season is a big deal (and a make or break quarter) for a lot of retailers.

The cuts would save the company between $700 and $800 million a year.

So many people are losing their jobs right now, and this is just one of the several making headlines. Between this, the near collapse of the auto industry, and all the stock market ups and downs, this has been a generally bad week for the economy.

Today was one of the best days ever for Wall Street, but unfortunately the news is overshadowed by pessimism. Sure, the market probably won’t continue to rally like this, but it is nice to see green instead of red all over CNBC.

Recently, I went searching for open positions related to my field of study (marketing and communications) for when I graduate in May. Even when searching through the countless positions on websites like Monster.com, most positions for my major requires years of prior experience. I also visited a college career fair, and most of the companies were not looking for business graduates, but were more interested in pharmacists. Unfortunately, four or five years of sitting through endless lectures and classes devoted to the very position they are seeking does not count toward any experience.

The odds are not in their favor either. In the second quarter of 2008 the Labor Department gave the unemployment rate for those in the 20 ? 24 year old group (the age range is the most likely for new graduates). Unemployment had risen from 7.7% last year to 9.8% this year.

Most colleges require students to intern and/or take career counseling to give them an idea of what to expect after graduation, but they still do not guarantee a job after graduation.

So you are a new graduate and cannot seem to stand out of the crowd? Here are a couple of tips to make you and your resume more noticeable to potential employers.

- Network. Networking helps you stand out to an employer. If you are currently a student, become involved in plenty of events and groups related to your major.
- An impressive resume. Making your resume stand out is not as hard as it may seem. Little things such as adding a picture of you or using positive phrases can add luster to an otherwise vanilla resume. An example of a use of positive language is instead of saying you have no experience in a certain area, saying that you are willing and open to learning is obviously more constructive. Employers are always more open to someone who is willing to conform to their job descriptions, rather than a position having to conform to an applicant.

Student loans are creeping up and you still have not gotten the position to build your career on? Some people have begun to take a more unconventional attitude on job hunting: Create their own career by starting their own business. Once thought to be something only highly experienced professionals do, new graduates are starting businesses related to their fields of study.

If you have the ambition to start your own business, either a new graduate or someone who just has some new or great ideas, here are a few pointers that may help you start:

- Since you are probably bogged down with debt (thanks to student loans), try to limit your start up costs. Internet companies generally have very low startup costs, as long as you have an idea as to what you?re doing. Starting a business with a friend can also limit your costs and you will have more than one person working toward a goal.
- Remember those old textbooks that you could not or did not sell? Some of them have some great ideas in them. I have kept marketing books just because I thought in the future they could come in handy.
- Have a business plan. If you have a business plan, even a simple one, you always have a reference point. Eventually we all hit road blocks, like writing essays and having an outline, a business plan can keep you in order.
- Finally, do not give up and work hard to achieve your goals. Getting through college was not easy (or cheap), so do not be discouraged if your business does not take off immediately. Successful businesses take patience, time and a LOT of hard work.

It is not hard to become discouraged by the declining job market. Plenty of people I know are working in fast food restaurants while waiting to land ?the job.? When the economy is good, graduates may get multiple offers with competing salaries, but now these offers are not landing in people?s laps like they once were. An applicant must do more to be noticed in today?s job market. So good luck graduates, I will be seeing you in May.

This news sparked a 700 point drop on the Dow Jones Industrial Average. We’re still up from Friday’s incredible rally, but the news isn’t good for the economy and the markets will likely drop in the coming days and weeks.

How could analysts not expect retail sales to be down? Almost everyone watches or reads some form of news, especially if that news is effecting their wallets. Anytime I’ve watched the news, be it local or national, the anchors are saying "stop spending." We’re being told over and over to stop spending and things will get better, at least that’s the way that the information comes across to me. Retail sales will probably be down for October, but then up for November and December if based on prior months (not the prior year) only because of the holidays.

A lot of the come back can be attributed to the European union’s announcement to pump $2 trillion into their banking systems to protect them from failing.

Today’s rally was the biggest one day increase since 1933, jumping 11% in just one day. It also blows away the previous one day point record increase from 2000 of 499 points.

No one is saying that the worst is over though, many are still skeptical. The markets are trying to find a balance between where they are and where they should be.

This is sad. I know that McCain has to do whatever he can at this point to get people’s minds off the economy when stepping into the voting booths in less than a month…the economy is just not his forte. When things are bad (like this week in particular) McCain polls much worse than when things are good, or even just ok.

The daily Gallup poll today shows Obama at 51% and McCain at 41% with registered voters. A 10 point lead in the polls with less than a month to go means McCain has a lot of ground to make up if he wants to win the election. I just don’t think mud slinging is the way to cover that ground. I believe all it does is rally those who were already going to vote for McCain and make undecided voters turn away…

Meanwhile, the entire town of Oxford, Miss. is holding it’s breath.

Even without classes today I went to spend some time on campus (Univ. of Miss.) to see the media spectacle that is going on there. There were literally more media personnel on campus than students. I guess that is still good news for the University, because even if John McCain fails to show up for the STILL scheduled debate, the media will stay in town for whatever does happen. All the events surrounding the debate (like Rock the Vote) are still happening.

Tomorrow will be interesting, not only for Oxford, but for everyone. Very interesting events will unfold in the next 24 hours.

With many professionals calling a bottom today, casual investors should now be investing for the long haul and not the quick rally. As always pigs get slaughtered and right now all the streets look red.

Today different explanations have been given for the stock drop. The main reason being the jobless rate going up. According to the New York Times, “unemployment benefits rose to 444,000 last week, near a 5 year high.” Yea…well, it’s been going up steadily anyway, why would this cause such a significant drop?

Perhaps it’s just the fact everything is getting more expensive.

Maybe not?

Maybe this is just going to roll around as an unexplained phenomenon for a while.

Here’s the AP making an attempt to figure out what happened:

Here in town, gas Thursday was at $3.99 a gallon. The national average is just a little above that at $4.05. When gas is as expensive as it is, it doesn’t matter $0.05 or $0.10 more or less expensive. The total when you fill up your tank is still WAYYYY more than it should be. I have to fill up the tank in my car next time I go out, which is becoming less and less.

I would like to see oil prices keep going down because that means more disposable income for us. Well, more money we can put into savings every month.