- Analytical Market Commentary -

August 11, 2010 (FinancialWire) (By Joe Duarte) (Go to http://www.financialwire.net/?s=cmmtry for all recent commentaries.) — The S&P 500 SPDR ETF (NYSE: SPY) and the Powershares QQQQ Trust ETF (Nasdaq: QQQQ) closed well off their lows on 8-10. But the market, despite its intraday recovery, is still showing signs of indecision.

Little has changed in the stock market over the last few weeks. Company earnings have been excellent, but revenue growth has been spotty. That means that job creation, as last month’s employment data showed is unremarkable, under the best light. And with productivity showing signs of slowing down, that means that those that are working, extra long hours and shifts are starting to get tired. And if companies are not hiring, while the current workforce is getting tired, and not likely to expand, the feeble output being recorded is likely to stagnate or even start falling.

And that’s not something that the Fed could do anything about, no matter how much money it prints, or how many bonds it buys. The missing piece of the puzzle is the spark that will ignite the next era of progress and prosperity. Companies aren’t hiring, and those with jobs are starting to get tired. And tired people eventually give up, or start fighting for something better, which means that the U.S. economy, and the U.S. public are at the breaking point and that something has to give, and give soon.

America's history is simple. Hard working people toil endlessly looking to improve their lives and that of their family. But they need a little hope. Not the stuff that Mr. Obama got elected on, fancy prose on the campaign trail, but the tangible Hope that comes from seeing hard work lead to wealth, or improvement of circumstances.

The Hope we're talking about is the kind of magic that was created during the early days of the Internet boom, where anyone with a good idea could make something good happen. Out of that Chaos came Google, and even E-Bay and Yahoo are still around. Amazon.com came from that time and is about to put non-online retailers out of business in many cases. These are all companies that make money, employ people, and keep information flowing as well as giving retail and advertising new platforms. These companies were true innovators, whose genesis was made possible by an atmosphere of risk taking and entrepreneurship, The Hope Machine.

The Hope Machine is dead right now, and is in need of a revival. But the revival won't come from presidential speeches about how the prior administration ruined everything and how they inherited a disaster, which his tenure has turned into a rose, and that it will bloom further if only he can raise taxes on those who work for a living and can grow the government just a little more.

The Hope Machine needs something else. It needs a new figure at the helm that could spur the real change needed to move businesses forward, and to create the next big thing beyond the Internet.

Could that person be Fed Chairman Ben Bernanke? Or could Bernanke find his own version of the bully pulpit, much like Alan Greenspan did in his own peculiar way during significant parts of his own run at the Fed. It sounds like a stretch. But as odd as it sounds, Bernanke, if without the charm and obtuse charisma of Alan Greenspan, has the bully pulpit already. He could have made a bolder statement on Tuesday. And he and his Nazgul could take to the skies and ride their wild beasts into the country and start pouring out the gospel of easy money, and encourage entrepreneurship and risk taking while using all the tools at their disposal, including the continuation of their admonition of Congress to spend responsibly and keep taxes at their current rates.

Nobody else wants to revive the Hope Machine. Let’s see if, of all people, Ben Bernanke is up to it.

(Go to http://www.financialwire.net/?s=joe+duarte to see more commentaries by Dr. Joe Duarte, and go to http://www.financialwire.net/2010/04/22/about-duarte/ for more about Dr. Duarte.)

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The FirstAlert(tm) Money Index is an indicator of the depth of market direction or indirection. While not always including the same stocks, the combined NYSE, AMEX and NASDAQ 25 most actives and combined NYSE, AMEX and NASDAQ greatest percentage losers and greatest percentage winners (weighted against pure monetary loss/gain) indicate the direction in which the mass of money is flowing, as well as the general focus of the market.  Last session’s most actives showed 6 advancers versus 19 decliners. Volume leaders were led by Citigroup, Inc. (NYSE: C) (streaming research for Citigroup available at http://investrend.stocksmart.com/ri/toc?tid=7921), YRC Worldwide, Inc. (NASDAQ: YRCW) (streaming research for YRCW available at http://investrend.stocksmart.com/ri/toc?tid=7771),  the SPDRS S&P 500 Trust ETF (AMEX: SPY) (streaming research for SPY available at http://investrend.stocksmart.com/ri/toc?tid=34430), ADC telecommunications, Inc. (NASDAQ: ADCT) (streaming research for ADCT available at http://investrend.stocksmart.com/ri/toc?tid=107), Bank of America Corp. (NYSE: BAC) (streaming research for BAC available at http://investrend.stocksmart.com/ri/toc?tid=8456), the PowerShares QQQ Trust ETF (NASDAQ: QQQQ) (streaming research for QQQQ available at http://investrend.stocksmart.com/ri/toc?tid=1044870), Microsoft Corp. (NASDAQ: MSFT) (streaming research for MSFT available at http://investrend.stocksmart.com/ri/toc?tid=4652), General Electric Co. (NYSE: GE) (streaming research for GE available at http://investrend.stocksmart.com/ri/toc?tid=8030), Intel Corp. (NASDAQ: INTC) (streaming research for INTC available at http://investrend.stocksmart.com/ri/toc?tid=3619), the Financial Select Sector SPDRS ETF (AMEX: XLF) (streaming research for XLF available at http://investrend.stocksmart.com/ri/toc?tid=1026233), Cisco Systems, Inc. (NASDAQ: CSCO) (streaming research for CSCO available at http://investrend.stocksmart.com/ri/toc?tid=1723) and ACE Ltd. (NYSE: ACE) (streaming research for ACE available at http://investrend.stocksmart.com/ri/toc?tid=75).

The FirstAlert(tm) Economics Calendar lists International Trade for June (8:30 a.m.), EIA Petroleum Inventories (10:30 a.m.), Treasury Budget Statement for July (2 p.m.).

The FirstAlert(tm) Events Calendar showcases AVY, CAT at Credit Suisse Group Industrial Conference; BRCM, Q, STEC, ADBE at Oppenheimer & Co. Telecommunication, Media & Technology Conference (day 2/2); COGT, OSIS, AVAV at Morgan Keegan Security and Defense Conference; CUB, SOA, CBT, BEAV at Jefferies & Co. Global Industrial and A&D Conference (day 2/3); QCOR, STAA, TSPT at Collins Stewart, Inc HealthCare Conference.

The FirstAlert(tm) Earnings Calendar highlights Advance Auto Parts AAP Q2 2010 Earnings Release.

FirstAlert(tm) Website of the Day: http://baseballhall.org/

Quote of the Day: "Better sleep with a sober cannibal than a drunken Christian." Herman Melville

Word of the Day: koan \KOH-ahn\ , noun; A nonsensical or paradoxical question to a student for which an answer is demanded, the stress of meditation on the question often being illuminating.

In context: "At that time I believed my affective controls were no longer intact, but now I present this to you as a more cogent question than it might at first appear, a kind of koan  of the period." — Joan Didion, The white album

Today is: President's Joke Day

Happy Birthday: (1953) Hulk Hogan (born Terry Gene Bollea)

Today in History: Alan Greenspan became chairman of the United States Federal Reserve in 1987.

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