Tuesday, May 20, 2014

Market edginess continues, with no help from retail or Holder

The U.S. stock market continued to be volatile, with another jump on the slide down today.  Comfort is not what equities are about these days, but let's be honest.  There were a lot of gains across the board for the most part in 2013, and 2014 is turning out to be just above flat so far.  Certain discreet sectors, as in sectors beneath bigger labels, and of course certain stocks have done well, but sitting back and watching one's chips pile up has not been in the cards.

Retail led intraday headlines as being the culprit, with some value clothing chain stores disappointing and Staples having a material miss.  It's not clear that these results are a big deal as it is not news that there is little to drive new traffic in places like Marshall's and TJX,  and Staples has been a firm that somehow can't escape chronically poor management.  The bigger news in retail was two divergent stories.  Home Depot did well as the traditional spring sales pick up has not disappeared while Dick's Sporting Goods performed far below expectations.  That company looks to have been expanding too fast, too early to tell though.

Behind the scenes the bigger issue from this perspective is the Credit Suisse judgement, and the associated criminal charge.  While regulators have apparently agreed to forego the more punitive aspects that this charge could have led to, this sets a precedent that the Obama and Holder duo want to see.  The stock price of Credit Suisse was not materially affected by this today, but that is not the issue.  Some in Congress and in the administration seem to enjoy this a bit too much.  Certainly the prosecutors do, not the least of which is Holder.  Credit Suisse should be held accountable, but there is suspicion here about what the longer term agenda really is.

One could easily believe that some in the financial markets feel the same trepidation.    


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