Dow Diary: Ring In Rocktober

Dear Diary,

Kicking off Rocktober with a bang, man. And man, now that the third quarter is in the books, I’m looking ahead to my favorite time of year: Q4, with the Christmas buying spree, the cycle of ramped-up economic activity, and all the economic merry-making that comes with the winter months.

And just like any great rock act, I’ve opened up this month with a 44-point gain. How could that be, you ask, when today’s Institute for Supply Management report showed that growth had slowed in August? When the Michigan consumer sentiment index fell from August to September?

Well for starters, the Michigan index reading was better than expected, and you know I love to play expectation games. Personal income rose in August, and I love when the consumer has more money. Sure, part of that was due to government aid in the form of unemployment benefits, but, literally, beggars can’t be choosers, right? The added income didn’t immediately translate into spending, but hey, the holiday season is coming up. Plus, two Federal Reserve officials basically endorsed another round of quantitative easing — where the government prints money to buy long-dated Treasuries and bring interest rates down. I love cheap financing!

The Securities and Exchange Commission and the Commodity Futures Trading Commission released their report on the May 6 “flash crash.” The report said that an unnamed fund used an algorithm to sell a bunch of futures tied to the S&P 500, and then a bunch of high-frequency algorithms joined in the selling, and then the unnamed fund’s algorithm ramped up selling in response. Not much in the way of new regulations to prevent that from happening again, but at least the SEC isn’t saying that there are evil hedge fund robots out to get me. I’d prefer some more safeguards against a shock like that happening again, but it’s nice to know the government is at least taking a look at what happened.

Anyway, it’s Friday, I ended on the upside today, Rocktober has begun, and the government looks ready to give me another little boost, maybe sometime in November? I’m hoping to get my presents early this year.

Let’s keep this momentum going!

The Dow Jones Industrial Average

Dow Diary: Ring In Rocktober