Question of the Week

Should the federal government step up to bail out Detroit from its current woes?

Yes
No
Not sure

I'll be Hosting Cavuto on Fox Business tonight at 8:00 p.m.

Now that the market bias has re-shifted to the upside, there is a sense a big breakout move could be in the offing. Yet, this move might be as stealthy as this rally has been since bottoming in March 2009. Stocks have made an amazing move without fanfare. This week, I suspect corporate earnings will move the needle more than economic data, but news on the housing front is critical. It's not an official mandate, but Bernanke has made it clear that housing is the key-people must feel like the transition is complete:

> From traditional money pit
> To money machine 2000-2007
> To owner's greatest nightmare
> To ... (fill in the blank)

There are 896 companies reporting this week, and what I suspect is that investors will get a chance to further differentiate winners from losers. I'm not talking based on moves in the share price, but instead which companies have real business momentum. I have to say thus far, I haven't seen the kind of guidance that promises a great second half of the year-that was the narrative for earnings from the first quarter, an otherwise horrendous earnings season.

The week before the next jobs report needs momentum built on economic recovery. Even Fed junkies understand the economy has to heal faster or the party is over.

Paris is burning

By the way, I will be following Detroit closely for many reasons, including that it is a cautionary tale for the rest of the nation, although it could be too late. To hear the same kind of knuckleheads that led the debacle complain about the federal government going back to Reagan, the state and other factors without admitting this is largely a self-inflicted wound is baffling but worrisome, too. Manufacturing left Detroit along with most productive citizens as the town became a feeding frenzy for special interests, including public and private sector unions.

The Paris of the Midwest is burning ... is America next?

Today's Session

The big earnings report of the day is a dud as McDonald's has come up short of the Street's expectation, with the biggest factor being same store sales in the United States. The news slowed the upward drift of equity futures, but the market seems eager to allow more news to pour in before deciding on a true direction.

Comments

Irresponsible politicians; local, state and federal, eager to be re-elected, have sold us down the river. Bailouts serve no purpose other than to reward those responsible - the politicians and those who were suckered into voting them into office. Let the chips fall where they may, possibly we can learn from Detroit and Stockton's problems and avoid the more desperate future of our federal government suffering the fate of Greece. wanda graziani on 7/22/2013 10:24:05 AM

No. George Stelzenmuller on 7/22/2013 11:17:28 AM

NO MORE BAILOUTS! Jon Cunningham on 7/22/2013 1:06:56 PM

I don't remember the words "bail out" as being listed among the enumerated powers. They no authority to bail out any one or any thing. Besides, it's not their money. It's our money! George on 7/22/2013 2:00:08 PM

Notice how Wanda (1st comment) keeps it real general (ie:"politicians sold us down the river"). When the fact is there hasn't been a Republican elect in Detroit in 50 years! Detroit is the victim of the Democrat Party along with the attending socialism. Bob Achin Bob Achin on 7/22/2013 9:59:13 PM

Tweet

 

Home | Products & Services | Education | In The Media | Help | About Us | Disclaimer | Privacy Policy | Terms of Use | All Rights Reserved.