COMMENTARY | COLUMNISTS | GEORGE CHAMBERLIN

George Chamberlin's Money in the Morning

Paranoia continues to haunt Wall Street. Hesitant to celebrate success, the stock market did a U-turn yesterday after posting a gain of 170 points on the Dow industrials in the first hour of trading. And, at the close the index was down 239 points, erasing a big chunk of Tuesday's 390-point gain. The reason for the volatility seems to be the edginess over next week's Fed meeting and the remote possibility a hike in short-term rates could be imminent. Not likely, but possible.

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Sam Stovall of S&P Capital IQ has chimed in on the current situation, saying, "Until the conclusion of next week's FOMC meeting, the S&P 500 will likely dart erratically higher and lower, covering territory that is many times over what the expected 100-point trading range would suggest. We still believe the market is vulnerable to a close below the Aug. 25 low of 1,867 before this correction has ended. Our suggestion that investors 'sit on their hands' refers to avoiding any emotional decisions that would adversely affect the long-term growth of their portfolio, not a recommendation to cease all buying."

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Notice how China has suddenly disappeared from the headlines? Probably because the news has turned positive -- tax cuts to stimulate the economy -- rather than doom-and-gloom.

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Another good jobs report. The DOL reports the number of people filing for unemployment benefits fell by 6,000 in the past week to 275,000. That makes it 28 weeks in a row the number has been below 300K, a sign fewer companies are laying off workers. There seems to be growing evidence that last Friday's disappointing labor report from August was an exception to the overall growth we've been seeing in the economy.

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The Energy Information Administration is telling motorists to get ready for a big drop in gasoline prices. In the Short-term Energy Outlook report released yesterday, the EIA's administrator Adam Sieminski said, "U.S. drivers will continue to see the effects of low crude oil prices as gasoline prices are expected to decline through the rest of the year, with the pump price falling to a national average of $2.03 a gallon by December. Reduced gasoline demand following the peak summer driving season, along with the switchover to lower cost winter grade motor fuel will help push gasoline prices lower during the remainder of 2015." Of course, we won't see $2.03 a gallon here. but it is likely we will get down to about $2.30. Sweet.

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Are you ready for some football? Yes, the NFL season starts tonight with the Patriots hosting the Steelers. Wonder how many times we will hear about the inflation level of the footballs being used in the game. Too many, for sure.

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