Blog Posts by Jennifer Carinci

The countdown is on and it's still anybody's game. The stakes couldn't be higher in the final days leading up to the election. Polls are tighter than ever and speculation is rising about potential impact from Hurricane Sandy and the October jobs report due out this Friday morning. Are either of these the October Surprise that'll swing enough momentum in President Obama's or Mitt Romney's direction? Any jobs numbers far outside of consensus estimates — 120,000 new jobs created and 7.9% unemployment rate — may very well influence some last minute undecided votes. (See Related: With One Week Until Election, Jobs Report May Sway Votes)

But if the market is any guide, it could prove to be the surprise that everyone is searching for. A rising stock market is typically good for an incumbent president's odds of re-election. Sam Stovall, chief equity strategist at S&P Capital IQ, has been tracking the historical correlation between market price action and presidential election outcomes, as explained in a research note this past summer. Specifically, Stovall focused on the S&P 500's performance from July 31 through October 31 — the three-month performance ahead of Election Day. (See Related: Stocks Up- Obama Wins. Stocks Down- It's Romney)

"The original report would basically be pointing to an Obama re-election because whenever the market is up from August through October, the incumbent has been re-elected 80% of the time," Stovall explained in a phone interview yesterday.

So far, the S&P 500 is up 2% from July 31 to October 26, a positive for the President. But the mood has been shifting throughout October, and it began with the first presidential debate on October 3. Since then, not only have the National polls narrowed dramatically, but some have reversed and put challenger Mitt Romney ahead of President Obama — a move directly in sync with the stock market. While August through September posted a 5% gain, the S&P 500 has fallen 2% in October. That decline could signal a deeper change that may play out in Mitt Romney's favor.

Microsoft (MSFT) officially launched its Windows 8 operating system and Surface tablet computer today worldwide. The new operating system is seeking to do what Apple (AAPL) still hasn't, use one OS to bridge the gap between PCs and mobile tablets. So far, anticipation of the massive rollout has done little to spur investor sentiment.

"I think they're in trouble, I think there's a bomb about to go off at Microsoft with this stock," says Eric Jackson, founder of IronFire Capital. He believes investors have been distracted by larger problems at struggling tech behemoths like H-P (HPQ) and Dell (DELL), which are overshadowing reasons to be skeptical about the long-stagnant Microsoft share price.

No matter how flashy, adaptable, and consumer friendly Windows 8 may be, weakness in the PC market tops Jackson's list of concerns. IHS ISuppli predicts the PC market will contract by 1.2% this year —the first annual decline since 2001.

"We're on the cusp of a potentially big shift here for Microsoft with this contraction that we're seeing in the PC market," Jackson says. "Obviously they've got a diversified portfolio of products, but if PCs really start to fall off that's really the lynchpin for Microsoft."

Breakout co-host Jeff Macke and Eric Jackson walk through the new stable of Microsoft products.

The warning from the International Monetary Fund's World Economic Outlook released yesterday was loud and clear: "Growth would stall in 2013 with the full materialization of the (fiscal) cliff…" Many large regions, including the entire world, saw growth forecasts cut by the IMF. But the world economists warned America's economic problems are home grown.

They predict the U.S. will continue its tepid growth rate of near 2% if the fiscal cliff is averted. On the flip side, if we go over the cliff, the IMF predicts the automatic spending cuts and tax hikes due to set in at year-end would take more than 4% out of the GDP rate for 2013, tipping us back into recession.

Washington may not be reacting, but Peter Schiff, President & CEO of Euro Pacific Capital and author of "The Real Crash" is. He's been beating the drum on America's fiscal crisis, but it's not necessarily the year-end cliff that could lead us into the next disaster.

"It's not because we go over this phony fiscal cliff, it's probably because we don't go over that one because the government cancels the spending cuts, cancels the tax hikes, and instead we end up going over the real fiscal cliff further down the road," he says.

By kicking the can down the road, Schiff believes interest rates will spike and we won't be able to afford to pay the interest on the enormous amount of debt that we have. "In fact, the real fiscal cliff comes when our creditors want their money back, and we don't have it," he states.

Updated 2:45pm est

Apple (AAPL) shares recovered this afternoon after trading as low as $623.55 earlier today; briefly dipping into correction territory from its intraday high of $705.07 on September 21—the day the iPhone 5 went on sale. The largest stock in the world is roughly 3% below its 50-day moving average of $658, despite more leaks about an iPad mini. Investors are backing off, but according to Bespoke Investment Group, there could be opportunity to get in right here.

Apple hasn't traded below its 50-day M/A in 49 trading days. B.I.G. went back ten years, since the launch of the iPod, to look at how the stock reacts after breaking below the 50-day when it was above it for at least one month. Here's the typical recovery:

Apple Share Performance After Breaking Below 50-Day

Next Week: +1.92%

Next Month: +1.84%

Next 3 Months: +9.29%

Source: B.I.G.

Among potential catalysts for AAPL are rumored plans to announce an iPad mini, although Apple still hasn't confirmed whether an event invitation is coming. The Wall Street Journal reports Asian component suppliers have received orders to make as many as 10 million units in Q4.

"I'm a lousy guy to tell you to back off Apple because I love what they do and because I think this iPad mini is a killer," says Jon Najarian, co-founder of OptionMonster.com. "It's really tough for Apple to keep things secret because, number one, they make most of the stuff over in China and soon in Brazil as well, and there can be leaks, significant leaks."

A rally in the face of weak economic data picked up steam all day on Thursday as stocks to snapped a five-day losing streak. In many ways Thursday would have been the perfect way to close the 3rd quarter of 2012; a year characterized by markets all but impervious to an economy that is stagnant, at best. With stocks up double-digits going into the start of Q4 on Monday the tension is high on the Street. This morning's latest reading on Chicago PMI confirms that sentiment.

"Fundamentals in terms of the economy remain weak," says Adam Parker, chief U.S. equities strategist at Morgan Stanley. "What helped people feel more optimistic [this year] was removal of some of the real tail risk events that began to surface last year."

He believes investors have had a false sense of optimism that Europe will work itself out, the economy will improve, and fiscal policy gridlock will break. This complacency is ready to snap and the stability of Europe could be that breaking point. To Parker and the Morgan Stanley team, the first signs of market stress will be seen in currencies.

"A key debate will be the Dollar/Euro relationship," says Parker. "For every 1% the Dollar strengthens against the Euro, it's 60 basis points out of U.S. S&P earnings —so a 10% move Dollar/Euro is going to hurt earnings 6%. It's a big deal."

Gold is cooling off after a 5-week central bank-driven rally sending prices up over 10% in the short term. Dollar strength is pressuring commodities across the board today, with gold down nearly 1% in early trading.

Last Thursday the precious metal's move formed the Golden Cross — widely regarded as a bullish technical indicator formed when an asset priceline's 50-day moving average breaks above its 200-day moving average. The last significant golden cross on the gold chart was February 6, 2009; from which gold prices rallied 11% in the following eleven trading sessions.

"The golden cross is a technical term a lot of people use and I think it's very much overcompensated with enthusiasm," says Don Hays, founder of Hays Advisory, in the attached video. "The golden cross works sometimes and it doesn't work other times."

He questions the indicator's reliability because it's so heavily watched by traders that dump out the moment it shows signs of breaking down. Instead, Hays views gold as a "fear index" and attributes its 11-year bull run to the attacks on 9/11.

It's been a September to remember for Facebook (FB), with shares up 25% so far this month. The social media kingpin is hoping the worst is behind them after going down as the worst U.S. IPO in history. Keep in mind that despite the September bounce, shares are down 40% from the May 18 IPO where they debuted at $38 apiece.

"I think we're heading into a period where these guys are going to pump this thing up ahead of the lockup expirations in October and November," says Eric Jackson, founder of Ironfire Capital. "There's a big flood of stock coming on the market."

Think "tsunami." That's how many FB shares will hit the market by year-end.

The first lockup period, open to some insiders, expired on August 16, bringing 271 million shares to market. Nearly two billion more shares could hit the market in a series of lockups expiring over the next eight months, with none more significant than the two this Fall. Here's a schedule recently published by TheStreet:

October 29 — 243 million shares; employees

November 14 — 1.3 billion shares; ventures capitalists, insiders including Zuckerberg

December 14 —149 million shares; VCs

May 18, 2013 (final lockup expiration) — 47 million shares

Ahead of the expiration dates, Jackson says to expect a string of positive news generated about the company. He says little details about user experience and effective ads could "leak" out, and large shareholders and managers could become a little more visible. "I think they got some religion," he says. "When you get your stock chainsawed in half, it starts to shake the chairs up there."

Trulia Inc. (TRLA), the first initial public offering in over a month, is making quite a debut after opening higher by 30% on the New York Stock Exchange this morning. Shares of the online real estate listing company opened at $22.10 after pricing at $17 a piece last night; above the targeted range of $14 - $16. In IPO filings the company reported a loss of $7.6 million on revenue of $29 million in the first half of the year.

Though they're not turning a profit yet, user growth and the number of visitors and subscribers remain promising and today's over 40% rise underscores that sentiment. Not only is this an upbeat sign for the IPO market, it could mark improved confidence in the real estate market.

"I think a lot of it is Bernanke pushing out rates all the way to 2015," says Jon Najarian, co-founder of TradeMonster.com, in the attached video. But, he adds, there is real demand for housing for those who can secure mortgages.

That demand has been showing up in the Homebuilders ETF (XHB), which is up 50% this year, and 79% from one year ago. And Trulia's main competitor, Zillow (Z), carried out a successful IPO in July 2011 and has seen shares more than double this year alone, currently up 104%.