Are Estimates Too High?
The market closed at new
lows for the year. Surprising economic data this morning was the
catalyst: a mere 32,000 jobs were added in July, way below estimates;
unemployment was 5.5 percent. Economists polled were looking for 228,000. The
report signals the economy may not be as strong as expected, and that rates may
not rise as much as expected; the Fed meets on Tuesday August 10. Treasuries
staged a huge rally. Gold gained $7.
For the week, the Dow fell 3%, the Nasdaq slid 6%
and the S&P dropped 3%..
The S&P is trading at 16 times 2005 EPS. Traders
are wondering how much a slower economy will impact earnings and if current
estimates too high.
OPEC is pumping at the highest levels since 1979 — 30 million bpd — and only
Saudi Arabia has any spare capacity. Iraq exported about 1.5 million bpd in July
and is expected to increase that figure to between 1.8 and 1.8 million bpd, but
security concerns remain an issue.
Word on the Street is that the Google IPO
scheduled for next week will be delayed.
| Dow | -147.70 | 9815.33 |
| S&P 500 | -7.78 | 1072.92 |
| Nasdaq | -44.74 | 1776.89 |
Strong today were: Gold
(
XAU.X |
Quote |
Chart |
News |
PowerRating) +2.87%, Utilities
(
UTY.X |
Quote |
Chart |
News |
PowerRating) +0.90%.
Weak today were: Semis
(
SOX.X |
Quote |
Chart |
News |
PowerRating)
-3.85%, Airlines
(
XAL.X |
Quote |
Chart |
News |
PowerRating) -3.40%, Biotech
(
BTK.X |
Quote |
Chart |
News |
PowerRating)
-2.69% Cylicals
(
CYC.X |
Quote |
Chart |
News |
PowerRating) -2.52%.
10-year Notes were +1 155 at 112 230
The dollar
was -1.27 at 88.27
Gold was +7.60 at 399.40
Crude Oil was -0.47 at
43.94
Volume was 1.52 billion
on the NYSE and 1.69 billion on the Nasdaq.
Market breadth was negative.
| NYSE | Issues | |
| Advancing | 1286 | Up Vol 246 |
| Declining | 2066 | Down Vol 1269 |
| Ratio | 1.60 | 5.15 |
| Nasdaq |
||
| Advancing | 668 | Up Vol 180 |
| Declining | 2444 | Down Vol 1500 |
| Ratio | 3.65 | 8.33 |
Brice Wightman