Sunday night Whack a mole

UPDATED - Whack a mole, the electronic game of the 1970s has come to stand for any situation in which attempts to solve a problem are temporary, sporadic or futile. It describes the situation that investors in many asset types - value, commodities, Europe encounter as the year grinds on.  The major indexes were down for the week, this is the third in a row, and Treasury yields showed signs of rising.

 Among this weeks moles to whack was Natural Gas – that and inflation. European producers have shut some processes down because of the cost of gas.  “Soaring energy costs in the United Kingdom and continental Europe are constraining the chemical, fertilizer, and metals industries” writes Barrons. U.K. energy companies are seeking a massive government bailout - gas and electricity prices are so high, they say, they can't stay in business, writes Bloomberg.

Rising costs, combined with scarce resources, both material and human, could crimp corporations’ bottom line, Barrons continues, citing Macro Mavens editor Stephanie Pomboy. Producer prices are far outpacing consumer prices; the producer-price index rose a record-high 8.3% in August from its year-earlier level, versus 5.3% for the consumer-price index, they right.

That hits close to home for holders of 3M stock, which is a defensive-dividend-value mainstay. 

“We are seeing inflation outstrip price,” said Value Mainstay 3M (MMM) Chief Financial Officer Monish Patolawala on Monday. He essentially cut third-quarter earnings guidance when giving that update, suggesting the inflationary pressure is worse than expected.

One turns to the usual suspects with the usual questions. A number of asset types have done ok, or well over the year. Should we expect a shift, or a reversal? Is there more room to run for stocks, banks, utilities, the dollar, junk, or equities be they value, growth or defensive?

On this Sunday night the big looming mole is Chinese Property and possible effect on Global Markets fears which will rile/embroil/vex the US markets in the morning. China’s real-estate crackdown surged through Asian markets, and it is being called a contagion.

The effect in the immediate future was : 

The Dow was down -1.78%; Nasdaq -2.19; S&P -1.7; FTSE -0.86. 

So, pretty equal US Equity dive, except Tech fell more and Europe, less.

AMAT, CGNX losses out-paced others as losers. AMD not so great either

In the ball park of meh were ANSS, DD, Gold,

Losing at a lower clip were KO, 3M, QCOM, ADI, BRK-B. 

Hi-flying recent IPOers were godsmacked, CFLT, TWKS. Kramer said people into these things are speculative and very leveraged and have to get out.

You can observe a lot by just watching. – Yogi Berra