Philly Fed: The Philly Fed index came out yesterday and the number was terrible. The -30.7 reading was the lowest reading since late 2008. Interestingly, a lot of recent occurrences have not happened since the depth of the recession of 2008-09.
Philly Fed (Since 1968)
Dollar/Yen: The Yen is now at its strongest level versus the dollar since World War II. I was only able to chart back to 1971, but hopefully you get the point.
Fear: Normally, barring specific news suggesting a broken deal, a stock that has a cash offer will trade very flat and near the price at which it is being bought out. During extremely fearful periods, I have noticed that these stocks will detach from that price and weaken. This is probably largely due to widespread selling of stocks and ETFs. Most stocks that have outstanding cash offers experienced this phenomenon earlier this month, culminating on August 8. Interestingly, although we are currently near the lows of August 8, these stocks are firmer than they were then. This suggests to me that fear may have waned a bit since Aug 8. A few examples follow; normally these stocks would just “flat-line.”
Market: The market was weak today. Yesterday, it was extremely weak. In the past two days, the major indices have dropped five to seven percent. Most stocks are still above the Aug 8 low, but not by much.
I saw something on television about people who base jump into a cave in Mexico. It reminded me a little of the market over the past month or so. Since early July, some indices are down 25% or more, with lots of individual stocks down much more.
I am going to dinner at Lola with my wife for my birthday. If you come to Cleveland, Lola is a required stop for dinner or lunch.
Lastly, our highly-qualified blog editor, Lea Taft, was unable to edit the blog today. Any and all typos or grammatical errors in today’s blog are completely my fault.
Have a good day! Brent
