I am not a huge believer in seasonality, but it would be something if this day can overcome the gravitational pull that Sept. 30 seems to exert. In a remarkable set of statistics, this day has been down 10 of the last 12 years, with a .09 gain in 2005 and a 5.42% rebound after a historic 778-point decline the day before when the U.S. House of Representatives rejected the Troubled Asset Relief Program (TARP). The market bounced back that day when it became clear that the House would ultimately pass TARP and save the system.
These days, instead of our economy being the focus, it is everyone else's and the malaise that it seems to breed here. That's not me talking, by the way, it's Nobel laureate Robert Shiller. This morning, on "Squawk on the Street," he talked about how international events and income disparities are playing havoc with investors' minds right now. I think he's spot-on. With consumer confidence headed down -- from 93 to 86 in September, 5 points worse than expected -- we are getting confirmation of exactly that kind of negative thinking.
I try not to let it affect me. But the confluence of the unremitting ratcheting of sanctions against Russia and vice versa, the democracy demonstrations in Hong Kong that could get violent (possibly causing sanctions against China) and the endless sense that ISIL is winning (and that if we don't side with Iran we will lose), have all taken an immense toll on everyone. Or, as Shiller intimated, the wall of worry is pretty good for stocks until the worries overcome the wall.
However, we do have a propensity to get things resolved. A few weeks ago, we heard that Apple (AAPL) wasn't going to have the new iPhone in China until next year. Now it is coming in a little more than a fortnight. eBay (EBAY) has been an ailing tech stock but, with a stroke of a pen, it has separated PayPal from the general merchandise business and the stock has rallied -- as it should have done so last year before the competition got so intense. eBay has 152 million users, but Apple, with its new payment system, has more than 800 million credit cards on file. If you are young kid who was drawn into the credit world, why would you bother with PayPal when you probably already have an Apple account?
Masco (MAS) offloaded a slower growing business, the installation segment, and announced a big buyback. Its stock is now sizzling. After disappointing severely, Walgreen (WAG) finally made its numbers. Not that anyone's too excited, but I think it marks a bottom.
Still, you have to wonder whether the angst people feel from the encroaching worldwide forces can't have a genuine impact as the politics of the moment are so grim. Of course, we have had grim politics here, too. We know that. But the market was ultimately able to power higher. Yet it is important to remember that the big move up only occurred when the rancor was going down, not when it was going higher, as it is right now.
Yep, the international backdrop is ugly and the strong dollar is taking its endless toll on all of the commodities, including oil, which looked like it might be able to stabilize. To see the same stocks go down day after day, including the iron, copper and oil drillers, just slicing through yield protection with the idea that the Fed's done with its bull market buttressing is as beleaguering as reading the papers about the rest of the world.
And how can you not extrapolate Ford (F) to the rest of the market? You can take down all sorts of areas of strength from auto parts to dealers to competitors and no one is going to disagree with you or stick a bid in below your sale price.
What can I say? It's just not a great time right now. Any ability to hang in against these geopolitical forces comes only because so many companies are helping themselves via acquisitions or split ups or breakups. So you get the sense that if you are too negative, you will miss the next terrific opportunity. At the same time, though, if estimates are too high, and judging by the weakness of Ford in almost all of its markets, they are, you are being given a chance to sell at prices that might seem pretty darned good if Hong Kong doesn't cool down or credit controls are put on in Russia.
There is just more bad than good happening in the world right now and that makes me hesitate to commit any new capital. I have had this stance for a week. I am sticking by it until I see signs that politicians have a handle on things and earnings estimates get cut for companies and -- unlike Ford -- their stocks don't fall apart.