The market is getting a bit of a jiggle as the Fed releases its beige book report. It sure doesn't sound very upbeat, but it really isn't anything we don't already know. There are concerns about consumer spending and pricing pressure on manufacturers. Inflation is obviously heating up while consumer spending is "mixed, weak or slowing."
The economy is still struggling, and we've been able to forget that a bit recently as the banks had the biggest bounce in history. Many want to believe that this is an indication that the worst is over for financials. Maybe, but this move was primarily a function of expectations being a bit too low and a government-induced short squeeze. Banks still have a very tough road ahead of them, even if Bank of America (BAC - commentary - Cramer's Take) is announcing a buyback of shares.
It is almost humorous how just a short time ago there was so much consternation over evil short-sellers killing the banks and greedy speculators running up oil. How quickly things change. It is too bad so many people fail to understand that the nature of markets is to go too far in one direction or the other before they correct. If you just leave them alone, they will do just fine.
At the time of publication, DePorre had no positions in stocks mentioned.
Rev Shark Blog Looking for a Big Bounce in Oil 7/23/2008 12:37 PM EDT That would obviously be a negative for this nascent upswing.
Rev Shark Blog Volatility in Financials Continues 7/23/2008 11:31 AM EDT The moves in the sector, somewhat driven by short-covering, are dramatic.
Rev Shark Blog Drama Exists Underneath Calm Market 7/23/2008 10:25 AM EDT The indices haven't moved much today, but there is some interesting action in a variety of sectors.
James "Rev Shark" DePorre is the author of Invest Like a Shark: How a Deaf Guy with No Job and Limited Capital made a Fortune Investing in the Stock Market. He is founder and CEO of Shark Asset Management, an investment management firm, and he also operates sharkinvesting.com, an interactive online community that serves and educates active investors. DePorre holds business and law degrees from the University of Michigan, is a member of the Michigan Bar Association and a former tax attorney and CPA. He lives in Anna Maria Island, Fla., with his wife and two children. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Rev Shark appreciates your feedback; click here.
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