A Lively Trip to Nowhere
THERE'S AN OLD BASEBALL MAXIM credited to longtime Baltimore manager Earl Weaver: "Momentum is tomorrow's starting pitcher." This is how the market has traded lately -- not trending strongly day to day, not evidencing sustained investment flows in or out, but fibrillating within a range, the credit or blame being laid on whatever bit of economic data or corporate news seems to fit the action.
It happened a week ago Friday, when the market rallied sharply, with the news of weaker-than-expected growth in second-quarter GDP getting most of the credit for a strong one-day rally. Finally, or so investors thought, the Federal Reserve could pause justifiably in its two-year campaign of cranking rates higher, one gear tooth at a time. And the circumstantial evidence was there: Stocks soared as the bond market violently slashed the probabilities of another Fed rate increase Aug. 8.
With that muscle memory well ingrained, the shortfall in July payrolls growth, released Friday morning, brought out the bids anew. The Dow industrials shot to a 101-point gain within 15 minutes of the market open -- yet another Fed-is-done rally -- then spent the rest of the day giving all of it up.
The Dow finished Friday 2 points lower and gained 20 points for the week, to reach 11,240. The Standard & Poor's 500 and Nasdaq Composite covered little ground on the week, as well, with the former rising a point to 1279 and the latter slipping 9 to 2085. The irony is that even if Fed Chairman Ben Bernanke holds short-term rates steady at 5.25% Tuesday, clarity will continue to elude investors.
That's not because of any failing of Bernanke in the art of articulation, but because of the nature of a slowing economy that could soften more than hoped, a housing sector in rollover mode and an upturn in inflation that might yet prove fleeting -- but who can be sure just now? This is the very essence of being at this point in an economic and monetary cycle.
There is at least the chance that Bernanke will trump the 4-to-1 odds the market is laying against another rate hike, thereby disappointing some large portion of the investment world. Ideally, Wall Street should wish for an economy so durable that even higher rates would not threaten but validate its strength.
WITHOUT WATCHING THE GAMES between the opening and closing bells, and relying only on the standings and box scores, here's the way the market looks: The S&P has bounced off the June lows, recouped more than half the losses from the May/June spill, and now sits right at a level that has brought out the sellers a couple of times, more than 3% below the May high.
Fewer stocks have participated in this bounce, and the market is showing plenty of fear below the surface about future expansion, punishing shares of companies that hint at faltering growth. In July, 68 of the 500 stocks in the S&P fell at least 10%, and 13 dropped 20%-plus, versus only 25 that gained 10% or more, and only one rising 20%. Nearly all the moves were earnings-related.
On a short-term basis, market-sentiment indicators suggest some residual caution, to the point where market psychology wouldn't stand in the way of another little foray higher. Robin Carpenter's hedge-fund equity exposures last week were in the lower third of their range (
www.CarpenterAnalytix.com). Individual investors are shunting large sums into money-market funds.
But gone are the nasty short-term- oversold readings that preceded the bounce. Traditional mutual-fund managers remain "all in" with quite-high equity exposures, says Carpenter. Yes, it's tempting to look at the money-market- fund inflows -- or Charles Schwab's (SCHW) announcement last week that its customers are stashing record sums in CD's) -- and read them as a nice, contrary Buy signal for stocks.
We know when public risk aversion will turn to greed (after stocks have already started to run higher, for some reason). We just don't know when. And if the constant flow of retail money into the market was a bullish factor for most of the late 'Nineties, until it wasn't, then today's reluctance to participate is cautionary, until it turns.
The most commonly cited bullish catalyst has been the eventual end of Fed tightening. Yet there's a reason markets typically stay queasy after the Fed quits: because it usually has done enough to place the growth and profits outlook in jeopardy, leading to an eventual easing. So it is that the bond players are already pricing in a probable easing in the first half of 2007.
The markets subconsciously understand that the Fed is like the person who goes to the gym (raises rates), only to build up the psychic cover necessary to have a second dessert (cut rates). And the prospect for a nice sugar-rush rally is out there, should it somehow come to seem the Fed has gone easy prematurely.
But before any payoff, there could be pain -- either a genuine recession scare or more inflation fears.
Every bull's favorite historical episode -- the '94-'95 "mid-cycle slowdown" and attendant market melt-up -- seems to have been painless in retrospect, when viewed through the prism of those effortless 20% annual gains of the late 'Nineties. But in '94 the S&P sank about 10% high to low, the average stock did far worse, the bond market crashed and the brokerage sector in aggregate lost money. Into 1995, GDP fell below 1% one quarter, and 10% of the shares of Charles Schwab were sold short by skeptics. Meanwhile, the 10-year Treasury yield dived to 5.5% from 8% in the course of the year.
When the Fed eventually quit tightening and started cutting rates, the markets hadn't been sitting around expecting it, begging for it, for more than a year.
没有目的地的狂奔
有一句从长期担任巴尔的摩队经理的厄尔?维佛(Earl Weaver)那里流传下来的棒球界古老格言──动力是明天的先发投手。这正是股市最近的交易形势：没有不间断的强劲交投趋势，没有持续而明显的投资流入或流出，而是股指呈区间波动态势，股市表现好坏全取决于各种经济数据或公司消息是否符合预期。
这种情况出现在上上周五，当时股市曾大幅上扬，第二季度的GDP增幅弱于预期是导致股市当天强劲上扬的主要原因。投资者大约认为，美国联邦储备委员会(Fed)终于有理由将其持续了两年的加息进程停下来了。证据是显而易见的，随著债券市场的表现无情粉碎了Fed在8月8日再度加息的可能性，美国股市大幅飙升。
鉴于这种观念已经根深蒂固，在7月份新增就业人数不及预期的消息于上周五早间公布出来以后，上述股市行情又重演了一遍。股市开盘后15分钟内道琼斯工业股票平均价格指数就上涨了101点，这又是Fed因素起作用的结果，不过这一涨幅在当天的余下时间内丢失无遗。
道琼斯指数上周五收盘下跌了2点，全周累积则上升了20点，达到11,240点。标准普尔500指数和那斯达克综合指数上周也没有什么斩获，前者上升了1点，至1279点，后者下跌了9点，降至2085点。具有讽刺意味的是，即使Fed主席贝南克(Ben Bernanke)本周二将短期利率维持在5.25%的水平不变，投资者仍然得不到一个清晰的线索。
这倒并不是因为贝南克在与市场沟通方面有什么失误，而是增速不断减缓的经济特征使然，经济增长存在降至过低水平的危险。住房市场的景气正在下降，而通货膨胀则存在上扬势头，但情况究竟会怎样目前谁也难下定论。经济形势和货币政策周期目前都处在这种微妙的节点上。
虽然市场认为贝南克本周二选择不加息的可能性高达75%，但他届时选择加息的可能性至少依然存在，如果他真的这样做则会使相当大一部分投资者感到失望。在华尔街看来，理想的情况当然是美国经济能有足够的韧性，即使再加几次息也不足以威胁到它的增长力度。
如果只考察各个股指的点位，市场人士会发现：标准普尔指数已经脱离了6月份的低点，并收复了一半以上5、6月份时的失地，不过该指数目前较其5月份时的高点仍低了3%以上。
但参与此次反弹的股票却不多，股市对未来前景仍然心存疑惧，这使那些暗示未来成长不佳的公司成了受害者。7月份，标准普尔500指数的500只成份股中有68只的跌幅至少达到了10%，有13只的跌幅超过了20%，相比之下只有25只股票的涨幅超过了10%，只有1只股票上涨了20%。这些股票的涨跌几乎都与其收益情况有关。
从短线看，人气指标略微显示出谨慎迹象，但似乎并不妨碍短期飙升行情的出现。Robin Carpenter的对冲基金上周将股票头寸控制在持仓区间的低位三分之一水平，个人投资者也正在向货币市场基金转移大量资金。
不过在反弹前出现的短线超卖迹象已不复存在。Carpenter说，传统的共同基金经理仍然背负著很高的股票头寸。是的，看看货币市场基金的资金流入──以及嘉信理财(Charles Schwab)上周公布的其客户的定期存单投资额达到创纪录水平──从反向操作的角度讲，这或许正是对股票的买进信号。
我们很清楚什么时候投资者的避险情绪会变成一种欲望，(在股市开始飙升以后。)但我们并不知道确切的时间。现在看来，散户资金的流入的确可以被视为九十年代末飙升行情前的看涨信号，但毕竟有一天市场出现了回落。而眼下投资者对股票的规避也的确可以说是谨慎的表现，只不过早晚也会出现逆转。
看涨分析师最常借用的理由就是Fed加息接近尾声。但市场在Fed停止加息后往往仍感不安，因为Fed的行为已经足以证明经济增长和收益前景都在面临风险，并可能导致最终的降息。正因如此，债券投资者已经开始消化2007年上半年可能降息的可能性。
市场下意识地作出了这样的理解：Fed就像一个去做运动的人（加息），只是为了找一份心理安慰，为下一顿甜点（降息）作准备。而从Fed提前放松的情况看，甜食大餐似乎是必不可免了。
不过最终的行动必然要经历痛苦抉择──或者真的担心衰退，或者出于对通货膨胀的恐惧。
每当人们回忆起1994-1995年的“中期调整”以及市场人气的低迷，痛苦早已烟消云散，因为这是九十年代末不费吹灰之力就能达到20%年涨幅的前奏。但是不要忘了，1994年标准普尔500指数从高点到低点下跌了10%，道琼斯指数表现更糟，债券市场一泻千里，经纪行业总体亏损。到1995年，GDP增幅有一个季度跌至了1%以下，嘉信理财的股票有10%遭到卖空。与此同时，10年期国债收益率在这一年中一度从8%跌至了5.5%。
当Fed最终放弃加息、开始降息时，市场已经对此望眼欲穿，苦苦等待了一年多。
Michael Santoli
