The Markets Recovering, But Rush Still Hoping

Sorry, Rush.

Very sorry that your market investments (I am sure you have one or two) have risen in value by about 10 percent if tracked by the DJIA, and by about 30 percent according to the NASDAQ composite, since the day president Obama took the economic disaster over from Mr. Bush

Actually, since the market lows in early March 2009, those two indices have risen a whopping 34 percent and 55 percent, respectively. What a bummer.

Across the board, all kinds of market records were broken today.

As we are nearing the market closing hour, these are some of the headlines screaming across the various business cable channels:

NASDAQ longest winning streak since 1992

NASDAQ up for highest close since early October

S&P and Dow tracking for highest close since early November

NASDAQ, S&P 500 on pace for fifth consecutive monthly gains

NASDAQ up 13% over 11 days

(An encouraging side note to Rush: There are still 20 minutes to go till closing, things could still go to hell in a hand basket)

And more bad news. Just three days ago, those “eggheads” over at Goldman Sachs were bullish on the markets, commenting on what they see as a three-pronged approach to the market recovering from the financial crisis—“Pop, Stall, & Sustained recovery”:

We have experienced the brief euphoric one-month “pop” phase of the typical equity market recovery from a bear market low (27% rally from 667 to 850), endured the characteristic several-month long range-bound “stall” period (10% range from 850 to 940), and now we anticipate a more extended “sustained rally” in the U.S. equity market during the second-half of 2009.

What do they know.

But wait, there is some good news, a glimmer of hope even here. The Wall Street Journal, has the following qualifier:

There are risks to Goldman’s call. And the biggie is the U.S. economy, what with higher savings, falling wage growth, the housing bust, state and local cutbacks and fading stimulus. Goldman scribes say, “although earnings, valuation, and money flow offer support to our view that the S&P 500 will experience a more sustained rally during the second-half of 2009, the fourth pillar of our analysis — the U.S. economy — is the shakiest part of the foundation.”

Ahh, that fourth pillar to the rescue, Rush.

Also, sorry Rush. home resales in the U.S. rose in June for a third consecutive month, spurred by tax incentives, lower borrowing costs and foreclosure-driven declines in prices.

According to Bloomberg.com, “[Home] Purchases climbed 3.6 percent to an annual rate of 4.89 million, stronger than forecast and the highest level since October, the National Association of Realtors said today in Washington.”

And, again, that liberal rag, the Wall Street Journal reported Tuesday that, according to the Conference Board, the U.S. index of leading economic indicators rose 0.7% in June, the third straight monthly gain, “signaling that a recovery is likely in the second half of the year.” And, “Over the past six months, the index has improved at a 4.1% annual rate, up sharply from a negative 6.2% rate in the prior six months. This is the fastest pace since the first quarter of 2006.”

And, more heresy, “The trend is consistent with a slow recovery this autumn, according to Ken Goldstein, an economist at the Conference Board” and “‘The unqualified jump in the index holds out hope that the upturn is not far away,’ said Joel Naroff, president of Naroff Economic Advisors.”

Also in the WSJ:

Seven of the 10 indicators increased in June. The positive contributors — beginning with the largest positive contributor — were interest-rate spread, building permits, stock prices, weekly initial claims, average weekly manufacturing hours, index of supplier deliveries, and manufacturers’ new orders for consumer goods and materials.

But, Rush, fortunately, of the 10 indicators there were three negative indicators: real money supply, manufacturers’ new orders for nondefense capital goods.

Rush, don’t despair, there are still some glimmers of hope. For example, here’s a big one:

The Labor Department earlier today reported that first-time applications for jobless benefits climbed by 30,000 to 554,000 in the week ended July 18.

And remember, the market is not a good indicator of the economy, or of its recovery; its daily ups and downs are “fleeting” and “meaningless,” even if these fleeting ups-and-downs are steadily trending upwards, and the upward trends “only” last for five or six months.

Hope springs eternal, Rush. We are only six months into fixing an 8-year economic disaster, and anything can still happen. Your wish, “Not only do I want Obama to fail, I want this package to fail. I want this to blow up in their face. .. blow everything to smithereens…” could still come true. Keep hope alive…