Business Booming In Bethlehem

Christmas was a great success in Bethlehem this year,thanks to a peaceful atmosphere.Large numbers of tourists arrived,filling hotels and frequenting Palestinian shops.Palestinian boy scouts were able to march proudly,beating their drums.All too often in the past,the town of about 30,000 residents was an armed camp,discouraging all but a few visitors and wrecking the economy.Even from afar,Christians this year could contemplate their spiritual homeland in tranquility,focusing on its meaning rather than disturbing media reports.We pray for continued quiet there for the benefit of all.

Tech Sector Leading

The S&P futures were up 1.4 tonight,while the Dow futures were down 1.0,and the NASDAQ futures were up 17.0.Only the NASDAQ had a positive week,rising 0.98.Oracle and Research In Motion posted strong quarters,with growth on both the top and bottom lines.Commodities futures were up across the board this evening.At this point,the shortened week ahead looks promising for investors-especially tech investors.Tech could well lead the way the remainder of the year.It's earning it's leadership.Retail can only hope that shoppers will go online this weekend,since a major east coast snow storm will cost them brick and mortar sales.This can't be emphasized enough at this critical time in the holiday cycle.

Tiger Woods and Us

We are all fascinated by the Tiger Woods story.It isn't because he is different,but because he is so like us:creating a brand,then having to protect the brand from ourselves.In an image-obsessed world,the brand is all.If the brand falls apart,the re-branding must begin.Surely a coach has written a manual for that,too.We are all living in the Hollywood era,with a certain brand-consciousness that also draws from Madison Avenue.
Whether it's the allure of bad girls or pretzels that are too hard for our aging teeth,we shall quite possibly be scarred and have to repair the damage.The amount of damage varies from individual to individual,but the re-branders are busy all over America and the world tonight.They're watching Tiger,and they're getting ideas.

Dubai World Crisis Subsides

The debt crisis of Dubai World,a United Arab Emirates sovereign wealth fund,has quieted down for the moment.The fund will meet with its major creditors,all of them British banks,some time next week.Dubai World is about 60 billion in debt,and wants to restructure 26 billion of it now.This announcement calmed world markets and foreign leaders.The consensus now is that everything will be worked out.The S&P futures pointed up this evening,and next week will be light on U.S. data.As we sit here tonight,there isn't too much to fret over other than Christmas shopping and decorating,which is a fun sort of concern.Buy yourself a present if you can and check back with the markets Sunday night,when Asia begins trading.The retailers need you.

A Growing Wall

The wall of worry got considerably taller this week as Dubai suspended payment on its massive debt load.Just when Americans were hoping to get into a party mood,a city many may not have heard of lopped a few percent off their recovering portfolios.The reflation trade was stopped dead in its tracks as commodity prices and equities plunged.It happened on a Friday,no less,leaving investors with a good few days to wonder what they are dealing with.The specter of commercial real estate,which had been put aside as a known quantity,burst on the scene with an unpleasant surprise.Is it just an anomaly or the tip of a new global iceberg?One can only hope that a week from now the holiday mood will be back on course on Wall Street and its satellite portfolios.

On Thin Volume

It's been noted repeatedly that the recent trading has been on thin volume.With next week being Thanksgiving week,that isn't likely to change.When trading volume is light,the market lacks a certain something-the ability to convince.It means there is an abundance of caution on the floor.In the current case,it also means the retail investor is still absent from the process.There's a lot of money on the sidelines,we are told.If the sidelines go on and on,they aren't sidelines anymore;they are the playing field.A new normal has arrived.It's like the aftermath of battle.We stand in the financial rubble,all too glad to get out for a day,eat some holiday food and watch some sports with our long-lost families.Only the equivocal data suggest the post-holiday won't be any different from the pre-holiday.The long,slow healing is our way of life for the foreseeable future.

Shopping Season More Critical

This year,the holiday shopping season is even more critical than it usually is.The Reuters/University of Michigan's consumer sentiment index for October was released today.It showed a decline from 70.6 in September to 66.0.This does not bode well for consumer spending.Although earnings have been generally good to this point,a lot,but by no means all, of the success is down to cost-cutting.Companies have shown a remarkable capacity for increasing efficiency.At some point,however,the consumer is going to have to step up more than they have done so far.If not now,the biggest shopping period of the year,when?If they do not step up now,we are looking at the significant possibility of a stagflation scenario.That would overshadow the good spirits that have characterized the equity markets of late.One can only hope the pocketbooks will open in time to avert all manner of difficulty.

Microsoft Triumphant

David Darst,a leading strategist with Morgan Stanley Smith Barney,is recommending Microsoft as an investment.He likes the company's chances based on the success of Windows 7.I can personally attest that,despite the great reception the new operating system is getting,Microsoft remains committed to its Windows XP customers.It is assiduously updating and checking the older system even as the new one is rolled out.This will continue for five years,it has been said,based on past experience with Microsoft.That's a big comfort if you had purchased a Windows XP machine this past summer or even later.You won't be left alone in oblivion.Microsoft's loyalty to you will inspire reciprocal feelings.That's plain good business on the multinational's part.

Technical Level Broken

A technical level on the S&P 500 Index was broken today,as the index closed below 1042.Apparently,there is now nothing to stop a free fall on Monday morning.Indeed,the S&P futures were down substantially earlier this evening,intimating just that.The VIX volatility index had spiked to an uncomfortable height today,and about 80% of stocks had crossed below their 40 day moving average.Frankly,it was a crummy end to the week.The consumer just is not there for the market,according to the economic data.It's the perfect excuse for a round of profit-taking after a 55% run-up.If it becomes a 10% correction,we could have three more days just like today.It's helpful to write and read about the situation as it actually is.Now we can put it aside and watch some football or whatever we like to do.

First Time Buyers Abundant

The figures for existing home sales came out today.Although they were strong,first time buyers accounted for 45% of the total,and about 70% of the homes sold were worth 250,000 dollars or less.Clearly the sales were driven by the first time home buyer's tax credit,which will soon expire.If the housing market is to ever recover,Congress needs to reauthorize the credit.The economy is still on unsteady footing.It is not yet time to withdraw the supports that prevented another Great Depression from materializing. Home prices declined 8.5%,another signal that the housing market has more miles to go before it can be considered restored to good health.New home sales figures come out next week,and will be closely scrutinized as well for clues to the economic condition.

Looking For Lili

"I'm Lili Taylor,"she says softly.Oh?I've never heard of you,but you must have done pretty well for yourself,if you're in a public television promo alongside filmmaker Ken Burns.You say you turn to public TV to help you decide who to vote for.I take it you're referring to News Hour with Jim Lehrer and perhaps convention coverage.Those are good places to learn,so you must have some sense in your head.Public TV isn't commercial-free anymore,but at least the ads are in good taste.My personal favorite is Chevron's " human energy" campaign.The music and faces are wistful-not what you'd expect from a big,bad oil major,but that's the whole point of this image-changing spot.I suspect that Lili never had such a problem.She's one of the world's gentle souls,it seems.If that isn't enough to get you next to Ken Burns,I don't know what is.

Xerox Punished For Breathing

Xerox got a haircut for its decision to buy Affiliated Computer Services.Fortunately,the stock was on the way back as the week ended.All the Dow component was trying to do was respond to customer requests for more services, the way IBM and others have.You would have thought they were trying something absurd.It must be the times in which we live.You would be better off sitting on the sidelines like so many investors have been doing,the reasoning may have been.Is that really the case?No.it is not.It's actually wise to reconfigure yourself now,so that you will be best positioned to take advantage of the global recovery as it progresses.It's something we all should consider,rather than moping around on our pile of cash.

Disappointing Economic News

This week was marked by disappointing news about the economy.Things don't seem to be going as well as had been thought.As well as had been thought was actually perfectly,but perfect is something that recoveries seldom are-especially recoveries from deep recessions.Everyone is so eager to get this behind us,they forgot just how steep the climb out was.Now we have been reminded,but there may be more to come.If we're in a proper correction,a 10% decline,we have several more red days ahead of us.That would be painful,but unless we get good earnings reports starting next week,it could well occur.We could backslide for a few weeks or so.It's better to admit it and plan what to do.What bargains would we like to buy;what bonds would we like to shelter in?That would ease the discomfort considerably.

Geopolitical Risk Rises

Small wonder that the markets closed down for the day and the week.Yes,there were disappointing economic reports.Existing home sales and durable goods orders were down,while new home sales were up,but below expectations.Besides all this,however,tensions with Iran over its nuclear program are mounting;the Afghan war is going badly;and the first al-Qaida cell in the U.S. since 9-11 has been uncovered.Geopolitical risk is again a factor investors and businesses must take a hard look at before making a decision.BP has already stopped selling fuel to Iran in anticipation of tougher sanctions being imposed on the country.Defensive measures haven't looked this appealing in some time.

The Loneliest Man Club

I don't know who is loneliest:the late night worker or Senator Max Baucus,D-Montana,who,as Chairman of the Senate Finance Committee,unveiled his health care reform bill this week.The late night worker is really getting something done.No one is bothering him.As the others go to bed,as the lights go off on his street,he has the quiet and solitude he needs to get it completed.On the other hand,Senator Baucus' proposal will die on the vine without support from those around him.His is the only bill that would actually cut the federal deficit-by 49 billion dollars over 10 years.The other bills would increase the deficit by hundreds of billions of dollars.Nonetheless,Senator Baucus' moderate proposal is being criticized by both the right and the left.It is to be hoped that the senator will finally get enough help to move his bill to the senate floor and save the nation from fiscal calamity in the years ahead.As for the late night worker,he likes his quiet time just fine,thank you.

Dealing With Dead Ends

I just spent an hour of my life on that.I had a sense it wasn't gonna work,but I kept on anyway.Now I'm permanently short an hour.What did I do that for?Such are the thoughts of one who has reached a dead end.The only answer is to find some meaning in a dead end.There has to be some life at the end of the tunnel.At least you refined your skills somewhat.You got some more practice in.That will help when you find a true path.The adversity also strengthened you somewhat more.That is useful in any situation.There's some life in that dead end.You only need to reflect upon it for a little while.

Another Mixed Report

Today's employment report was mixed.While the number of August jobless claims was less than July's by 60,000,the unemployment rate was up to 9.7% from 9.4%.Fewer people were laid off,but the total number of job seekers was greater.The situation on the street was more difficult,not less.Only a trader could see that as good news.Such is the strange world of the financial markets.They are an endless calculus of past,present and future,at once fascinating intellectually and detached from daily life,while at the same time affecting the destiny of retirees and other investors.Those who participate in them can only have feelings as mixed as the recent data have been,excited by their work yet commiserating with their countrymen.

Larger Than Life

The business world was overshadowed for me this week by the death of Senator Edward Kennedy.I was just watching his wake.I'm old enough to remember his late brothers John and Robert,so you'll have to understand.His niece Caroline gave the closing eulogy,and I think it was the best.She described the historical tours he organized for the whole large family.The teenagers groaned,but they wouldn't have missed it for your life.Now he is gone,we who are left will have to do the good things everyone always relied on Uncle Ted to do.Yes,new leaders must constantly be recruited in this life,given its brevity.Any one of us may be called upon at any time.Let's pray God we will be ready.The Kennedy brothers were.

Portfolios Rebound

Portfolios are starting to look the way they used to.That is,they're starting to be worth something again.They have a way to go,but it's certainly been a relief to see them recover lately.The worry is,September and October are drawing near.Historically,these have been terrible months for the market.The contrarian could well have an advantage now.Contrarians are expanding their bond holdings,gold and cash.They suspect the early autumn could see a significant decline for equities,so they are buffering their holdings.Recent history makes it easier than ever to be a contrarian.You just don't want to have your assets knocked down to nothing again.You're warier than you ever thought you could be.
Have a valuable evening.

Welcome

Welcome to The Friday Late.It's a blog that will feature brief thoughts about the business week just ended-and perhaps some surprises.Good to have you along.