Coming Up On Wall Street

Good morning and welcome to the weekend. Everybody is out shopping, December 25th is right around the corner two weeks from today. I like giving presents. I don't particularly like the blathering obsession with gift giving that sweeps through the land, but I do like giving presents. Ironic isn't it...

Reading through the predictions about the stock market's performance for the rest of the year, three things stick out in my opinion.

The first is that volume is down as some investors close their books and take off on vacations. Whenever trading volume is down, the market seems to respond with more volatility. It almost an expected event.

The second is a what if. What if the House and Senate get nowhere with the Bush tax cuts. Investors want just what you expect. They want the tax cuts to remain especially tax cuts for the wealthiest Americans. They do not want to see a capital gains tax increase nor do they want to see a tax increase on dividends. If that happens and there is an increase, then the rally is cooked. Stocks will look less appetizing for the moment, and you get a sell off in protest.

The third point is that oil demand is at historic levels. Say what you will but oil is right at the heart of the American economy. When oil rises, many components of the market rise as well.

So what happens, which pull wins out. Recall that just the other day investors were predicting huge gains till the end of the year. The story has changed on a dime. I suspect that the story will change again.

Reuters: Is Santa Claus rally almost done?

...over the last 65 years, when the S&P 500 has rallied at year's end, the average gain has been 3.4 percent between Thanksgiving and New Year's. So far, the index has risen 3.5 percent since the start of the period.


Inflation data for November will dominate next week's economic calendar, with the U.S. Producer Price Index due on Tuesday and the U.S. Consumer Price Index set for Wednesday.

CNN: Oil demand to hit highest level ever

Globally, oil demand hit 88.3 million barrels a day in the third quarter of 2010, according to preliminary numbers released earlier this week from energy consultants Wood Mackenzie. That tops the previous quarterly record of 88 million barrels a day, reached in the fourth quarter of 2007.


The developing world led the rebound, according to the report, with gasoline demand rising 8% in China and 11% in India.