George Chamberlin's Money in the Morning

October 31, 2014

The bulls are back. Two weeks ago -- October 16 -- it looked like the much-anticipated correction of the stock market was at hand. The Dow industrials were off 6.7 percent from the Sept. 19 all-time high and the fear level was elevated because of Ebola and global economic concerns. Well, flash forward to today and the Dow is closing in on a new record high, gaining more than 1,200 points in less than two weeks. So far in October, the blue chip index has posted eight closes with gains of more than 100 points and it could be nine if early gains hold. I almost feel sorry for the doom-and-gloomers who were celebrating the arrival of the long-awaited crash. Not really.

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The bulls are back. Two weeks ago -- October 16 -- it looked like the much-anticipated correction of the stock market was at hand. The Dow industrials were off 6.7 percent from the Sept. 19 all-time high and the fear level was elevated because of Ebola and global economic concerns. Well, flash forward to today and the Dow is closing in on a new record high, gaining more than 1,200 points in less than two weeks

I mentioned earlier this week a headline at MarketWatch.com saying, "Three reasons to expect a 30 percent stock market meltdown." Well, they embarassingly have kept the story on the front page of the website but modified it to say, "Three reasons to expect a 30 percent stock market meltdown - Friday rally notwithstanding."

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While stocks are going up, commodities are in trouble. Gold fell $26 yesterday and is off another $35 today, falling to $1,164 an ounce, the lowest level since 2010. Some people forget gold was above $1,900 an ounce just about two and a half years ago and I still hear commercials saying the metal will top $2,000 by the end of the year. How's that working out for you?

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Oil also continues its decline, falling below $80 a barrel. The numbers at the pump are certainly a welcomed relief. I paid $3.03 for regular unleaded this morning at a gas station in Rancho Bernardo.

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The lower price for gasoline is having a positive impact on consumer spending. The Department of Commerce said consumer spending declined 0.2 percent in September, the first monthly decline in 2014. The report sent members of the media into a frenzy. Once again, the fools at MarketWatch.com, owned by the Wall Street Journal, said the slight drops in spending "raise questions about how much cushion households have to spend." Not so. The two reasons for the decline include a drop in auto sales, attributable to an early Labor Day holiday. And the other factor was the sharp decline in gas prices. People didn't stop buying gas, they simply paid a lot less for the stuff. You can bet the extra money in their pockets will be used for holiday shopping. By the way, personal income rose 0.2 percent last month.

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Speaking of consumers, the University of Michigan's consumer sentiment index rose this month to the highest level since 2007. The report is considered a good indicator for future consumer spending.

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One stock lower today is Starbucks, down about 3 percent. After the close yesterday the company reported sales were up 10 percent in 3Q but lowered its forecast for the current quarter, which includes the usually busy holiday season. It also said it will begin rolling out its delivery service in the second half of 2015. FYI, Starbucks now has 21,366 stores in 65 countries.

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The Chargers' march toward .500 swings into Miami on Sunday against the 4-3 Dolphins. The Bolts will be able to rest up -- and heal -- the following Sunday with a bye, only to then host the dreaded Raiders on Nov. 16, always a bit of a circus.

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George Chamberlin's Money in the Morning

The bulls are back. Two weeks ago -- October 16 -- it looked like the much-anticipated correction of the stock market was at hand. The Dow industrials were off 6.7 percent from the Sept. 19 all-time high and the fear level was elevated because of Ebola and global economic concerns. Well, flash forward to today and the Dow is closing in on a new record high, gaining more than 1,200 points in less than two weeks

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George Chamberlin's Money in the Morning

Another Fed flop. Anyone who was expecting fireworks after the Fed announcement yesterday was surely disappointed. that Janet Yellen and her buddies kept very close to the script following the two-day meeting -- which probably could have been done in two hours -- and made no change in policy.

George Chamberlin's Money in the Morning

Welcome back, 17K. For no apparent reason -- and a bit suprising considering the Fed meeting -- the Dow industrials posted a big gain yesterday, up 188 points and closing back above 17,000 for the first time since Oct. 3.

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Oct. 23, 2014 -- George Chamberlin speaks with attorney Thomas Frost of The Frost Firm about the lastest types of financial cases his law firm is handling, including tenant-in-common investments and affinity fraud.

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