Something is a Little Fishy!

It seemed just last week we were bidding farewell and good riddance to September.  After a difficult third quarter it is with sincere feeling of thankfulness that we bid October adieu.  This past month represents the largest monthly point gain EVER for both the Dow Jones Industrial Average and the S&P 500 Index (short of some calamity on Monday).  For those who question the wisdom of being patient in a volatile and event driven market we understand your anxiety.  However, it is months like October that remind us that patience can be a virtue and fear sometimes a vice.

There was a lot to be grateful for this week, but perhaps the most important was a framework resolution for the bailout of Greece.  While the devil is in the details, the responsible parties seem to have agreed on a basic premise for this and future bailouts.  While it’s likely that the problem isn’t yet solved, the can has been kicked into 2012 and beyond.  To a large extent, this is what drove the markets higher this week.

However, the next hurdle facing the markets is quickly approaching.  You’ll remember that before the situation in Greece heated up this summer, there was that little situation over our burgeoning debt problem.  A “super committee” was created to look at ways to reduce our debt-to-GDP ratio with a deadline of November 23^rd.  The committee has been unusually quiet these past few months and if history is any guide we won’t hear anything until November 22^nd.  What’s at stake is another potential credit downgrade by Moody’s or S&P with a prolonged battle into the presidential election season next year.

The good news is that the economic indicators are slowly beginning to suggest that we’re not in or heading into a double-dip recession.  Just today, the first estimate of Q3 Gross Domestic Product (GDP) was released as +2.5% (annualized).  This is above the +1.3% increase in Q2 GDP and a reversal of weakening numbers in recent quarters.  However, one number does not make a trend.  Understandably consumer confidence remains low with the October reading coming in at an anemic 39.8, well below the 46 expected.  And while companies continue to report good revenue and earnings growth, more than a few are warning that Q4 will come in below prior guidance.  To be certain, there are obstacles ahead.  Yet, we’ve once again come through a difficult period of cyclicality and are for the moment on the mend.

There were a few stories I was considering for the story of the week.  I settled on this one because it is the second time I’ve come across it.  For a long time now, health conscious foodies have opted for fish.  Over time, we’ve seen a quick rise in the variety of fish and the increasingly upscale options available.  Yet would you know one species from another once cooked and sitting on your plate?  Apparently many wouldn’t in light of a recent study.  Consumer Reports found that a surprising number of fish are not what we think they are.  Another study showed that nearly half the 183 fish samples reporters purchased at restaurants, grocery stores, and seafood markets were sold with the wrong species name.  The downside is that not only are you not getting what you think you ordered, but that you probably paid too much and it may be less healthy than you think, i.e. mercury.  Among those often mislabeled include red snapper, white tuna, grouper and Pacific cod.  Just some food for thought!

October 28, 2011: Market Update

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