Saturday, April 29, 2017

Wall Street Frowns Over No Government Shutdown

The morons elected officials occupying the nation's capitol decided to punt on Friday, issuing a continuing resolution to keep the federal government operating for another week, rather than risk a government shutdown (which isn't really a shutdown), but Wall Street seemed unimpressed by their shenanigans.

Stocks closed lower on Friday, possibly as a form of relief after massive gains earlier in the week, finishing with minor losses, but with their second straight weekly gain.

After what promised to be a week of rancor and argument turned into a mere smattering of name-calling and finger-pointing, investors seemed unfazed by what didn't happen in Washington.

The politicians have failed to pass any meaningful legislation, ObamaCare is still the law of the land, the congress continues to borrow money despite the highest tax receipts in history, and, if not for steady winnings in stocks, the American people would be up in arms over the lack of purpose and dignity in the halls of congress.

If, by some stroke of good fortune, the government would cease to exist on a semi-permanent basis, it might spark a rally on Wall Street the likes of which have never been seen. Since what the current federal government consists of does nothing for the betterment of the American citizen, perhaps it should declare itself ineffective and incompetent, and finally shut itself down.

We can only hope...

At the Close, 4/28/17:
Dow: 20,940.51, -40.82 (-0.19%)
NASDAQ: 6,047.61, -1.33 (-0.02%)
S&P 500: 2,384.20, -4.57 (-0.19%)
NYSE Composite: 11,536.08, -42.44 (-0.37%)

For the week:
Dow: +392.75 (1.91%)
NASDAQ: +137.08 (2.32%)
S&P 500: +35.53 (1.51%)
NYSE Composite: +146.95 (1.29%)

Friday, April 28, 2017

Wall Street Stalling As DC Politicians Fight Over Nothing, Threaten Shutdown

The NASDAQ recorded another record close (6,048.94), but stocks struggled to remain positive Thursday as politicians in Washington continued to wrangle over funding the government and a potential vote on a replacement for Obamacare.

Democrats have called for a government shutdown if the Republicans bring a health care bill to the House floor before passing a continuing resolution for federal government funding.

This seems to be all that the politicos in Washington - and, apparently, the wizards of Wall Street - care about at present, though first quarter corporate earnings continue to be largely impressive.

Amazon (AMZN) and Alphabet, parent of Google (GOOG), released impressive first quarter results. Both stocks were up sharply on the day, but there was little luster elsewhere.

With gridlock having become the norm for the sacred cows of congress, investors need to begin looking beyond the sham that is government, which loses money all the time and is generally a burden to taxpayers rather than a benefit, for other catalysts to keep the eight-year bull market ramping along.

Nothing good is going to come out of Washington, DC, for the foreseeable future. Investors should turn a blind eye toward the nation's capitol and focus in on business, the true creator of capital.

At The Close, Thursday, April 27, 2017:
Dow: 20,981.33, +6.24 (0.03%)
NASDAQ: 6,048.94, +23.71 (0.39%)
S&P 500: 2,388.77, +1.32 (0.06%)
NYSE Composite: -11,578.52, -14.39 (-0.12%)

Wednesday, April 26, 2017

Stocks Rally As No Government Shutdown Seen; NASDAQ At Record High

Closing at as record high, the NASDAQ powered through the 6000 mark while the Dow and S&P 500 had their best back-to-back sessions of the year.

Investors appear to be pleased with the progress in Washington toward a peaceful resolution to the budget, in which the congress must fund the government by Friday night or be forced to close down parts of the federal apparatus.

Key to the negotiation has been President Trump's masterful handling of the situation, saying he can wait until later in the year to get congress to partially fund the building of the wall between Mexico and the United States on the US southern border. Democrats have already cried wolf over the measly $1.3 billion that would need to be appropriated to get the project into planning stage. Trump, knowing that a government shutdown would be blamed on Republicans, backed off his demands in order to attain at least a limited peace with the obstructionist Democrats.

This master stroke by Trump left investors giddy with confidence that the government will function without interruption. Also aiding the rally was a spate of earnings, notably by McDonald's, which suggested the economy is on a solid, growing footing.

Though the bull market which began in March of 2009 seems to be getting long in the tooth, the expansion due to Trump policies may just be starting.

At the Close, Tuesday, April 25, 2017:
Dow: 20,996.12, +232.23 (1.12%)
NASDAQ: 6,025.49, +41.67 (0.70%)
S&P 500: 2,388.61, +14.46 (0.61%)
NYSE Composite: 11,603.28, +71.49 (0.62%)

Saturday, April 22, 2017

Stocks Make Third Weekly Gain In Last Seven; Government Shutdown Looms; Central Banks On Buying Spree

Stocks fell softly to close out the week, but ended with the third weekly gain in the past seven, the major averages having hit something of a speed bump of late what with the wranglings and do-nothings in Washington DC, heightened military potentialities in the Mideast and Pacific Rim (North Korea), sloppy economic data, the passing of the income tax filing deadline, and the non-stop media parade of fake news mostly designed to undermine the presidency of one Mr. Donald J. Trump.

While the overall tone of the market is nothing to get aroused over, the upcoming week could bring some more sobering developments as congress returns from a two-week vacation (a vacation from doing nothing) coinciding with Spring Break. One wishes the congresspeople well enough, but actually doing something to benefit the American public for a change would be welcome. While President Trump is trying his level best, the Democrats and their trainers in the media complex are simply playing in an alternate universe and at times coming close to treasonous actions by working against the best interests of the Republic and focusing solely on what they consider the primary interest of their party.

As the coming week progresses, the level of rancor and obtuseness could reach a fever pitch as the government faces a deadline on April 28 for some kind of budget agreement, or, more likely, another in a too long series of continuing resolutions. Both sides of the debate over what to overspend upon are already well-suited in their peculiar ideological jumpsuits, the Democrats desperate to hold onto the last vestiges of failed socialism (called progressive by the liberal left and ultra-left media), the Republicans - in congress at least - looking to cement their dicey majorities in both houses.

At the outside looking in is the current administration, bent on keeping at least some of the promises Mr. Trump made during the campaign, though reneging against the American people has become so common in the post-Vietnam era that it's almost laughable that anyone would believe a word coming from the lips of any politician in Washington.

Thus, a government shutdown looms a real possibility, though more likely a dramatic, last-gasp, late-into-the-night-made-for-TV deal is probably what's driving the phony debate. As the politicians pose and posture, many American citizens are becoming keenly aware that federal government budgets are a laughable charade, being that deficits continue on and beyond the horizon, the national debt already within $16 billion of $20 trillion, a condition only humans could have created and something only a government with all the fiscal discipline of a 12-year-old with dad's credit card could continue.

At the end of the debate, shutdown, or partial farce, the world will continue spinning, Americans will be the bag-holders of the century and the central bank ponzi will continue.

Holders of stocks should worry the least, since the Bank of Japan (BOJ) and the European Central Bank (ECB) "invested" over ONE TRILLION US DOLLARS in global financial instruments in the first four months of the year, a record amount. Certainly, the Fed and Bank of England - not to mention the Swiss National Bank - are quietly doing their part to keep the liquidity flowing in the background, using all manner of underhanded tactics to undermine every national currency available.

The policy of central bank asset-grabbing is unprecedented in financial history, though rather a common theme since the meltdown of 2008-09.

In the end, 98% of the world's population will own almost none of the assets, the central banks having snatched up anything that hasn't already been bolted down, and they're sure to use wrenches and sledgehammers to take whatever remains as well.

Though the times are trying, central bankers continue buying.

At the Close, Friday, April 21, 2017:
Dow: 20,547.76 -30.95 (-0.15%)
NASDAQ: 5,910.52, -6.26 (-0.11%)
S&P 500: 2,348.69, +-7.15 (-0.30%)
NYSE Composite: 11,389.13, -37.78 (-0.33%)

For the week:
Dow: +94.51 (0.46%)
NASDAQ: +105.37 (1.82%)
S&P 500: +19.74 (0.85%)
NYSE Composite: +65.60 (0.57%)

Thursday, April 20, 2017

Stocks Surge, But Indecision Remains

This market cant seem to make up its mind.

At least that's the impression from the past few days of trading - or even the past eight weeks - which has seen the major averages whipsawed by varying reports of Trump administration plans, key industry data, jobless claims, and the all-important stance by the Federal Reserve on raising the federal funds rate.

On that last point, the recent March non-farm payroll data should have put the kibosh on any rate hikes until at least July, and that's the thinking of most of the Wall Street analysts, who actually get it right some of the time.

With just Friday remaining, unless stocks are donw close to one percent on the day, the week will finish positive, though it would be only the fourth positive week in the last eight, another sign of indecision.

At the Close, Thursday, April 20, 2017:
Dow: 20,578.71, +174.22 (0.85%)
NASDAQ: 5,916.78, +53.74 (0.92%)
S&P 500: 2,355.84, +17.67 (0.76%)
NYSE Composite: 11,427.73, +85.31 (0.75%)

Stocks Split, But Down On The Main; Valuation Could Be At The Root

Something is upsetting the markets, but it's difficult to find an appropriate culprit for the current nausea.

Maybe it's an overhang from tax filing day, even though that is now two days in arrears, still, the amount of taxes Americans pa to federal, state, and local governments has probably never been higher. If taxes rates are not the largest they've ever been, they're certainly close to being so.

It takes 113 working days for the average American worker to earn enough money just to pay off the taxman. That day arrives - for most people - around mid-May, so perhaps the realization that one hasn't yet worked enough just to stay even with the bloated governments that regulate every conceivable activity might be a cause for upset.

Falling stock prices cannot be attributable to the current employment situation because we've been told over and over again that there are plenty of jobs in America. What we're not told is that many of those jobs are part time,
or low-paying, or otherwise dissatisfying. So, maybe it could be that.

One doesn't see to many corporate CEOs suffering, so there is virtually no possibility that these titans of industry are panic selling their shares.

What could it be?

Maybe the idea that stocks are currently trading at some of the highest valuations in history is giving some with more savvy investing skills than the average fund manager cause for concern. These people have seen tops and bottoms before, so they might just be looking for an exit and these high prices seems like a good place to take one's leave, or, as the case may be, profits.

If that's all there is to the sideways trading since mid-March, then it's probably not much to worry about, unless one is looking for a place to invest. In that regard, buying would be quite out of the question, thus solving our quandary: there are more sellers than buyers.

It could be that simple.

At the Close, Wednesday, April 19, 2017:
Dow: 20,404.49, -118.79 (-0.58%)
NASDAQ: 5,863.03, +13.56 (0.23%)
S&P 500: 2,338.17, -4.02 (-0.17%)
NYSE Composite: 11,342.42, -36.16 (-0.32%)

Wednesday, April 19, 2017

Stocks In Spring Funk, Well Off All-Time Highs

Monday's big rally failed to inspire much confidence as the major averages fell sharply on Tuesday, giving back most of the gains from the prior session.

If it seems that stocks have hit a wall or are in stall mode for the present, it's because they are. The last all-time high close on the Dow Jones Industrial Average was March 6, when the bellwether ended the day at 20,954.34.

The other averages have been in similar holding patterns, though the markets overall - despite their closeness to record levels - do not appear very fragile. It's just that there isn't very much velocity or volatility, and even with first quarter earnings thus far somewhat positive, they haven't supplied a catalyst to move stocks out of a Spring funk.

Without a clear case for an upside move, speculators may be looking more to politics for a positive tone, but the rancor in Washington has been at near-deafening levels since the inauguration of Donald Trump in January and the Democrats seem to be dug in to obstruct any and all of the President's agendas.

China and Russia moving troops to the borders of North Korea, along with US warships steaming towards its coast, probably has dampened investor appetite as well.

But that's all for the time being. Economic data is pointing to more of the same, a slow, dolorous economy that isn't making anybody happy, least of which are the governors of the Fed, who wish to see more robust job creation and some pricing power by corporations, but, exclusively in the latter case, are seeing the opposite. Consumers are no longer the suckers they once were, and are beginning to demand value for their dollars. Retailers and restaurants - the front lines for consumer inflation - have been feeling the pinch, with many regional and national chains already engaged in a pitched price war.

That kind of activity can only go one way, and it's not the way of inflation. Bond sellers are a happy bunch for this, with prices for their offerings high and yields down.

Trump may want to make America great again, but it may have to start with better deals for consumers.

At the Close, Tuesday, April 18, 2017:
Dow: 20,523.28, -113.64, (-0.55%)
NASDAQ: 5,849.47, -7.32 (-0.12%)
S&P 500: 2,342.19, -6.82 (-0.29%)
NYSE Composite: 11,378.58, -48.50 (-0.42%)

Tuesday, April 18, 2017

Stocks Bounce Higher After Long Weekend; Bond Yields Smashed

Apparently, there was so much pent up demand for overpriced stocks that all the major averages posted nearly one percent gains.

Surely, this has something to do with the failed North Korean missile launch on Sunday, though there might be some Russian involvement in stocks going higher.

Then again, it just might be that speculators are taking one final dive into equities before this year's official federal income tax deadline (April 18), getting all they can out of super low interest rates.

Speaking of interest rates, the officials over at the Federal Reserve must be highly perplexed, with the 10-year note resting comfortably at around 2.20% yield. Somebody's happy, but surely not the millions of retirees who pine for the days when banks paid five percent interest on savings.

Those days are long gone, but the party continues. Hyperinflation for the win?

At The Close, Monday, April 17, 2017:
Dow: 20,636.92, +183.67 (0.90%)
NASDAQ: 5,856.79, +51.64 (0.89%)
S&P 500: 2,349.01, +20.06 (0.86%)
NYSE Composite: 11,427.08 +102.55 (0.91%)

Friday, April 14, 2017

If The Fed Is Upset On The CPI Drop And Stubbornly-Low Interest Rates, It Must Be A Good Friday

It's Good Friday and some of us have just finished doing our taxes (such as this writer), so, some of us are wondering what's so good about this particular Friday.

Aside from the generally-obvious religious conventions (Shouldn't it be called Bad Friday because it's the day Jesus Christ was crucified, and that doesn't seem so good?), there probably are some good things afoot.

First, the financial markets are closed, always a bonus. Second, the Labor Department announced today that the Consumer Price Index (CPI) dropped 0.3 percent, the first decline since February 2016. They said that lower cell phone service and gasoline costs outpaced higher rents and a slight increase in food costs (0.3%).

If those food costs are to be believed, since the amount of food most people eat (and buy) can be self-regulated, higher food costs aren't really an issue at all, especially since practically nobody in America is starving at the present time.

This CPI number brings up some interesting possibilities. If the United States is actually experiencing deflation (or, as the TV pundits like to call it, because deflation is bad, you know, "disinflation") then prices are going down, everything is going to cost less. That's the bane of a strong dollar. Imports are cheaper, and, in an economy that relies on lots of imports, that drives domestically-produced goods and services down as well.

It's a win-win-win for everybody, except, possibly, the Federal Reserve, banks and bond investors who are getting anxious and perhaps a bit desperate for higher interest rates.

Well, crocodile tears are the order of the day for them. Higher interest rates are not going to happen unless the economy is strong, meaning many excess jobs are being created, pushing wages higher, and producers are experiencing strong pricing power. Both of those items - jobs and pricing - seem to be going in reverse over the short term. Bond prices have been soaring because yields have been stubbornly opposed to any kind of rise, the now nearly constant urging and jawboning from the genii at the Federal Reserve, Janet Yellen, Stanley Fisher, et. al. notwithstanding.

The 10-year note is hovering around 2.25% yield. That doesn't bode well for inflation. No, not at all.

Stocks were lower for the week, but they're still within a few percentage points of all-time highs. Rich people and people with 401k or pension plans are probably not very concerned with their stock holdings.

In conclusion, this may actually be a pretty good Good Friday after all. Cheaper gas and phone service is a plus and eating a little less is probably not a bad idea in a nation of fatties. Plus, if the people over at the Fed are perplexed or constipated or otherwise annoyed or agitated, that's a huge bonus.

Happy Easter. Don't eat too much ham, lamb, or hard-boiled eggs.

At The Close, Thursday, April 13, 2017:

Dow: 20,453.25, -138.61 (-0.67%)
NASDAQ: 5,805.15, -31.01 (-0.53%)
S&P 500: 2,328.95, -15.98 (-0.68%)
NYSE Composite: 11,324.53, -98.64 (-0.86%)

For the Week:
Dow: -202.85 (-0.98%)
NASDAQ: -72.66 (-1.24%)
S&P 500: -26.59 (-1.13)
NYSE Composite: -121.05 (-1.06%)

Wednesday, April 12, 2017

Stocks continue Doleful, Doubtful Dance On Unchanged

If anyone was thinking that Monday was a dull day for US markets, then Tuesday had to be considered a suitable capper, but only if one were to be looking only at the closing figures.

The Dow - and other major averages - took a deep dive after the opening bell, falling by as much as 145 points inside of the first two hours of trading.

A reversal took place right off the lows, regaining the green shortly after 1:00 pm ET. After that, stocks spent the rest of the session in a slow churn to close modestly in the red for the day, the only average to finish with gains was the NYSE Composite.

Naturally, this kind of two-day non-event gives even the most skeptical investor absolutely nothing upon which to base any trades, either of the buying or selling variety.

Since the markets have recently nodded off into a semi-somnabulatory state, one can only assume... well, nothing.

While the majority of awakened people in the world probably are hopeful for some kind of stimulation, perhaps it is reassuring that Wall Street finds nothing alarming about anything at this juncture.

On the other hand, it is just these kinds of days and weeks of churning about that usually precede gigantic moves, either to the up-or-downside. Anybody's directional guess is equally good right now.

At the close, Tuesday, April 11, 2017:
Dow: 20,651.30, -6.72 (-0.03%)
NASDAQ: 5,866.77, -14.15 (-0.24%)
S&P 500: 2,353.78, -3.38 (-0.14%)
NYSE Composite: 11,473.62, +9.28 (0.08%)

Tuesday, April 11, 2017

Stocks Flatten Out To Open Week On Dull Trading Day

Talk about a slow news day!

Stocks barely budged on Monday as investors apparently had more than enough on their collective minds to care about trading. The word for the day was "dull."

That's it.

At the close, Monday, April 10, 2017:
Dow: 20,658.02, +1.92 (0.01%)
NASDAQ: 5,880.93, +3.11 (0.05%)
S&P 500: 2,357.16, +1.62 (0.07%)
NYSE Composite, 11,464.34, +18.76 (0.16%)

Sunday, April 9, 2017

Jobs Numbers Disappoint, Markets End Week Confused And Lower

After ADP reported blowout jobs numbers for the private sector on Wednesday (+263,000), the expectations from the BLS in Friday's March non-farm payroll report were for a solid figure.

It didn't happen, as the Labor Department reported a gain of just 98,000 jobs, the worst since President Trump was elected and a blow to his "America First" agenda.

Expectations for the BLS' NFP were 180,000, so this was a huge miss which left investors scratching their collective heads. Stocks ended the day slightly to the downside and all four major averages lower for the week.

At the Close, Friday, April 7, 2017:
Dow: 20,656.10, -6.85 (-0.03%)
NASDAQ: 5,877.81, -1.14 (-0.02%)
S&P 500: 2,355.54, -1.95 (-0.08%)
NYSE Composite: 11,445.58, -11.71 (-0.10%)

For the week:
Dow: -7.12 (-0.03%)
NASDAQ: -33.93 (-0.57%)
S&P 500: -7.18 (-0.30%)
NYSE Composite: -47.27 (-0.41%)

Thursday, April 6, 2017

Fed Minutes Scare Traders, Turns Big Gains Into Losses

The headline says it all.

After perusing the minutes from the most recent FOMC meeting (mid-March), analysts and traders saw some language they didn't exactly like, even though it was probably a long-overdue dose of reality for the Wall Street speculators.

The Dow was up nearly 200 points prior to the release of the minutes at 2:00 pm ET, but quickly reversed course ending with a 41-point loss. The NASDAQ had been at all-time record levels, but closed down 14.

The two most blaring commentaries gleaned from the minutes were that some members of the committee saw stock prices as unreasonably high and a discussion about ratcheting down the Fed's bloated balance sheet, which balooned to over $4 trillion after the financial meltdown in 2008-09.

At the Close, April 5, 2017:
Dow: 20,648.15, -41.09 (-0.20%)
NASDAQ:5,864.48, -34.13 (-0.58%)
S&P 500: 2,352.95, -7.21 (-0.31%)
NYSE Composite: 11,423.36, -47.18 (-0.41%)

Wednesday, April 5, 2017

Stocks Finish With Small Gains On Tuesday, But ADP Jobs Report Could Change The Narrative

Stocks finished with small gains on Tuesday, but the recent squeamishness of investors may be about to change, as ADP reported job growth of 263,000 for the month of March, the largest gains seen in the small business sector, characterized as businesses with fewer than 50 employees, which gained by 118,000 during the month.

Making note of the increasingly positive tone of business and employment, stock futures were set to explode higher, with Dow futures up by more than 50 points roughly a half hour prior to the opening bell on Wall Street.

The ADP report - which covers private sector employment - is generally seen as a guide to the highly-anticipated monthly Non-Farm Payroll (NFP) report, generally released the first Friday of each month. The BLS is set to issue the report for March on Friday, April, 7.

At the close, April 4, 2017:
Dow: 20,689.24 +39.03 (0.19%)
NASDAQ: 5,898.61 +3.93 (0.07%)
S&P 500: 2,360.16, +1.32 (0.06%)
NYSE Composite: 11,470.54, +6.62 (0.06%)

Tuesday, April 4, 2017

Stocks Stalled, Bonds Subdued, April Tax Deadline Extended

As the first week of April unfolds, there appears to be no stimulating feature to the equity markets overall, as stocks barely budged on Monday and are stalled near the UNCH line again on Tuesday.

It could be that there aren't many good values out there, or that the investor class is waiting on the political class to do something... anything, to get the economy moving, though that seems a long shot, as Democrats in the House and Senate seem to want nothing more than to waste everybody's time with a continuing assault - using fake news and innuendo as their battle-axes - against Presidnet Trump and any Republican agenda.

That particular skirmish aside, the lack of movement is stocks is probably due to the age-old waiting game, which is first and foremost awaiting the March non-farm payroll data on Friday, and, after that, a slew of earnings reports which will begin to flow to the street beginning next week.

Until such time, there simply isn't much to get excited about, except maybe that all Americans will have an additional three days to file their 2016 income taxes. Due to April 15 being on a Saturday and the Washington D.C. Emancipation Day holiday being observed on April 17 instead of April 16, 2017, Tax Day is on the following Tuesday, April 18.

OK, got that? Good.

In the meantime, bond traders are acting as though the Federal Reserve will never raise the federal funds rate again in their lifetimes, with the 10-year note sinking to a yield of just 2.35%.

The 10-year has gotten as high as 2.60% this year, but quickly retreated from that March 12 high and has remained subdued for most of the year, thus far. That could change, as the Fed has euphemistically suggested that more rate hikes would be forthcoming this year -- as many as three more.

We'll see about that.

Sunday, April 2, 2017

Stocks Up For Week In Aftermath Of Republican Failure On Capitol Hill

Other than the NASDAQ, which hit a new all-time high on Thursday, there was little to get excited about in stocks this week, as traders nervously weighed the failure of Republicans in congress to overturn Obamacare and waited for indications from President Trump and/or congress on plans for a budget in the near future.

Stocks were modestly higher, with gains for the major averages of between 0.30% (DJI) and 1.42% (NASDAQ).

Money Daily is back on camp schedule. More Monday.

At the Close, March 31, 2017:
Dow: 20,663.22, -65.27 (-0.31%)
NASDAQ: 5,911.74, -2.61 (-0.04%)
S&P 500: 2,362.72, -5.34 (-0.23%)
NYSE Composite: 11,492.85, -26.99 (-0.23%)

For the week:
Dow: +66.50 (0.32%)
NASDAQ: +83.00 (1.42%)
S&P 500: +18.74 (0.80%)
NYSE Composite: +73.96 (0.65%)

Tuesday, March 28, 2017

Stocks End Losing Streak On Vix Fix Buying Spree

Apparently, somebody at the controls of the VIX machine, the one that supposedly measures market volatility, cranked the mechanism down on Tuesday, after the thing just ran off on its own Monday, spiking above 14 (14.85 at the open Monday morning) for the first time in what seems like eons.

Not that it mattered to anybody in particular, but there were some worries deep in the bowels of Wall Street's finest casinos, brokerages the the completely contrived and extremely overbought rally would not extend into year nine with gusto, so the eight-day losing streak for the Dow was dealt a swift, manipulated whipping, as stocks took off at the open and continued a steady ascent throughout the session.

According to various and supposed "expert analysts" in places like Yahoo Finance, Market Watch and Bloomberg, Tuesday's rally was the result of impressive consumer confidence, as though the average consumer has any truck with stocks, other than, of course, being roped and prodded into various pension and 401k schemes designed to enrich their advisors retirement portfolio.

As the case may be, consumer confidence is largely tied to Wall Street's excessive enthusiasm and outrageous fees, insofar as the supine congress and the brilliant politicians in the District of Columbia (that's D.C., for all you low information investors) have decided that financial advisors and retirement planners do not have to work in a fiduciary capacity, as was supposed to be required under part of the Dodd-Frank reforms. That's not an issue now, however, as these investment "pros" can once again lead the naive retail consumers into their own vehicles with their own sets of fees and refinements. It's a lovely arrangement... for the brokerages.

Just so nobody is confused, the casino always wins, and today was further proof. Now, wait until you're 57 1/2, or 59 1/2, or 62 or 65 or 70, to begin feeling the joy of getting roughly 5-10% less return on your hard earned money than if you had just invested it yourself in a no-load mutual fund or some safe bonds, or, perish the thought, gold or silver, the latter of which continues heading higher (over $18/ounce), despite the best efforts of the central bank cartel to suppress the price, as they did again today with gold.

Funny how the only real money (intrinsic value) in the world continues to be spat upon, denigrated, and by the elite supra-nationals in our midst.

King Midas is spinning in his crypt.

At the Close, 3/28/17:
Dow: 20,701.50, +150.52 (0.73%)
NASDAQ: 5,875.14, +34.77 (0.60%)
S&P 500: 2,358.57, +16.98 (0.73%)
NYSE Composite: 11,493.84, +79.51 (0.70%)

WARNING: Congressional Democrats Are Detrimental To The Health Of The Stock Market

Just in case anybody's keeping score, Monday marked the eighth straight day of losses for the Dow Jones Industrial Average. Only the buoyant NASDAQ finished with gains, a sign that there are still plenty of speculative players plying "animal spirits" despite evidence to the contrary, i.e., the VIX spiked above 13, stocks cannot maintain momentum. The eight straight losing sessions is the longest for the Dow since August 2011.

Primary drivers for the recent about face from all-time highs are politicians in Washington, now about to erupt into all-out war between the two parties over everything from the fake "Russians hacked the election" story, to blocking the confirmation of Trump's nominee for the Supreme Court, Neil Gorsuch, to walking back and away from House Intelligence Committee Chairman Devin Nunes (R). Claiming he is unfit for the job, Democrats are calling for him to step down, amid accusations that he met secretly with President Trump over concerns that the incoming president was bugged by outgoing president Barack Obama's administration in November, December and January.

The Kafkaesque nature of recent developments in congress can only help make Wall Street even more jittery than it already is. Democrats have been bolstered by the stumbling attempt by Republicans in the House to overturn Obamacare, as Speak of the House, Paul Ryan, cancelled a vote on the proposed measure, which was hastily prepared and loaded with amendments and proposals that left the bill dead on arrival.

It has become crystal clear that Democrats in congress are still upset of losing the presidential election last November and trying to obstruct and delay any attempts by the current administration to fix what is wrong with the country. The new delaying tactics are designed to extend to the next recess, on April 7, at which point the Democrats can return to their districts and/or devise new tactics to thwart the smooth operation of government over a two-week span. Congress won't reconvene until the 25th of April once the recess is called.

The obvious battle being waged in Washington is not good for anyone investing in anything (except safe havens: bonds silver, gold), until one side emerges victorious and a path forward can be envisioned. Since there's little to no chance of either side claiming a decisive victory, investors should be aware and prepared for a long period of indecision and therefore, wild swings in markets and individual stocks. Nothing is safe within an environment of stealth, obfuscation, denial, lies, and feigned surprise as exists in the halls of congress leading the political sphere.

A well-defined move of funds to cash, bonds, and precious metals will offer a signal that a bear market is dead ahead, something which should be expected to occur in any case, as the current bull run is overextended and built upon mountains of debt and stock buybacks.

Developments to come - both from Washington and Wall Street - may prove deadly to bullish sentiment and frightening to anyone who still has a memory of what "normal" should look like.

CAVEAT EMPTOR

At The Close 3.27.17:
Dow: 20,550.98, -45.74 (-0.22%)
NASDAQ: 5,840.37, +11.64 (0.20%)
S&P 500: 2,341.59, -2.39 (-0.10%)
NYSE Composite: 11,414.33, -4.56 (-0.04%)

Saturday, March 25, 2017

Stocks Slip As Ryan Pulls Obamacare Repeal/Replace Bill

Lacking the necessary support from rank-and-file Republicans, House Speaker Paul Ryan yanked the Obamacare Repeal and Replace Bill that had been scheduled for a vote today in the House of Representatives just as US stock markets closed.

The bill had been on shaky ground for weeks as various splinter groups within the Republican party had issues with the wording and its hasty implementation.

According to various polls, the American public didn't appreciate the bill much either, as it was getting to be regarded as Obamacare-Lite.

This leaves the Republicans, especially Speaker Ryan, with plenty of egg on their faces and an uphill battle in the congress against entrenched, obstructionist Democrats.

Most sane people are seeking relief from the poorly-named Affordable Care Act (ACA) that has featured skyrocketing healthcare premiums and absurd deductibles, most upwards of $5000 per year.

Though the official word that the bill had been pulled came moments before the Wall Street close, apparently there were many who saw it coming. The Dow Industrials ended a see-saw week with a near 60-point loss. The S&P and NYSE Composite finished with losses as well, though the NASDAQ managed a small gain.

All major indices were lower for the week.

At The Close, 3/24/17:
Dow: 20,596.72, -59.86 (-0.29%)
NASDAQ: 5,828.74, +11.04 (0.19%)
S&P 500: 2,343.98, -1.98 (-0.08%)
NYSE Composite: 11,419.14, -11.76 (-0.10%)

For the Week:
Dow: -317.90 (-1.52%)
NASDAQ: -72-26 (-1.22%)
S&P 500: -34.27 (-1.44%)
NYSE Composite: -170.13 (-1.47)

Wednesday, March 22, 2017

America And The World Approaches The Brink Of Disaster

Let's get back to business here.

Whether or not anybody wishes to admit or observe it, America is in the midst of a crisis of almost unimaginable proportions.

We have a federal government teetering on complete disintegration over a variety of issues, including, but surely not limited to: the repeal/replacement of the Affordable Care Act (ACA, or ObamaCare); a runaway, subversive intelligence community; a Democrat party that is intent upon destroying the presidency of Donald Trump and thwarting him at every opportunity, with capable assistance from the fake media establishment in the guise of the New York Times, Washington Post, Politico, NBC, MSNBC, CBS, ABC and especially CNN (Criminally Neurotic Network); a Treasury nearly $20 trillion in debt and congress not even close to any agreement on any kind of fiscal budget or even discussion of such as the debt ceiling is being superceded.

There's more with which to deal, like crime, illegal aliens, Trump's temporary immigration ban, terrorism and such, but the issues before our broken congress are the main drivers taking the nation to the brink of disaster and quite possibly over the edge.

Not wishing to sound too pessimistic concerning the current state of affairs in the former land of the free, individual freedoms are at the core of what ails this country. If anything can be accomplished by our elected representatives, it would be first to repeal the Affordable Care Act, or, at the very least, permanently remove the individual mandate that requires every taxpayer to purchase health care or face increasingly punitive fines for failing to comply.

As it stands, the IRS is reportedly not enforcing the "law", conforming to President Trump's first Executive Order, issued on the day of his inauguration, in which he instructed all federal agencies "to exercise authority and discretion available to them to reduce potential burden..."
The more corrupt the state, the more numerous the laws.
-- Tacitus, The Annals of Imperial Rome

So, we have lawlessness being visibly encouraged, though it is directed against a law, the ACA, that carries within it, in the form of the individual mandate, a certain unconstitutionality, codified by a corrupted federal judiciary, i.e., the Supreme Court. Incidentally, that same Supreme Court is hopeless, deadlocked with eight justices, until, perhaps, the Senate decides to confirm the President's nominee, Neil Gorsuch, to take the positioned vacated by the late Antonin Scalia.

While Washington continues to devolve and approach the gates of hell, apparently driving chariots of fire, like gawkers and bookmakers, Wall Street insiders drives the market up, down, sideways and to its breaking point. The entire retail sector - with Sears leading the charge - is collapsing. Radio Shack recently re-entered bankruptcy, hopefully for the final time, and Payless Shoes is on the block. Malls across America are fast becoming nothing more than exercise walking routes for seniors rather than the shopping "experiences" for which they were designed.

We are changing, but we are not growing. The bulk of any profit is eaten alive by taxes, regulations, corporate executives, hackers and other thieves. In the end, there's little left for the common man.

And that's a crying shame, because the common man (and woman) is the person who built the country, who made it great, who is watching it self-destruct and who has nothing to do with the great default that is upon us.

The government is the problem, and seeking solutions from that very same government, be it federal, state, or local, is not a winning strategy. We will only get more of the same, and the same will only sink the nation further into the morass of stupidity, overspending, and normalcy bias with which we are currently plagued.

Our current malaise is not a democrat or republican issue. It is not liberal nor conservative. It is purely greed, avarice and corruption at every level that has besieged our once-great nation and if ever the United States of America is going to become - as the current resident of the White House proposes - great again, we must begin to call out the corrupt, the purposefully vague, the unequivocally deceitful, rapacious legislators and governors and bureaucrats that have lain waste to our nation, and all those who either back them, encourage them, enable them or act as apologists for them.

We are as close to systemic breakdown in our culture, our politic, and our economy than at any time since World War II, and that is a frightening prospect. More frightening, however, is the idea, the very concept, that ordinary people expect positive results from the very people who promulgated the predicament in the first place.

If Mr. Trump, the preeminent deal-maker of this generation, is unable to come to grips and compromise with the congress and the judiciary, it's likely that all that America has stood for will have been for naught, for we will bear witness to the destruction of the world's greatest constitutional republic in history.

But, if the wise and courageous among us will act, the destruction may yet be avoided. We face the fight of our lives over the next few years, and we cannot afford to fail.

It's not just economy at stake, but liberty and life.

Tuesday, March 21, 2017

Midday View: Stocks, Oil Being Crushed, Dow Down Over 200 Points; Silver, Gold Rallying

Sorry to be away so long, folks, but car issues, Spring storms and internet incapacity have had Money Daily on extended camp schedule.

Not to worry, however, as stocks are tumbling midday on Tuesday. The usual culprits are blamed (President Trump and banks), but oil is also down hard, continuing the recent trend, trading in the mid-$47 range.

On the bright side, gold and silver are surging, perhaps as a notification to the world's leaders that fiat currencies backed by empty promises cannot outlast tangible assets or real money.

A little pressed for time at the present, this will be followed up on Wednesday, all willing.

Thursday, March 16, 2017

Fed Raises Rates, Wall Street Doesn't Blink

As the Federal Reserve raised the federal funds rate to 0.75-1.00% on Wednesday, investors and traders barely took notice of the highly-anticipated move, sending stocks higher on the day and taking a basically taking the day off Thursday. Stocks were flat-lined at the close.

All in seems to be the order of the day, so long as the Fed isn't too interested in raising rates again too soon.

More on this and other important topics in the Money Daily weekend recap, Friday afternoon and Saturday.

For now, we're just happy to have survived the great blizzard of 2017. Lots of snow, lots of wind, not much fun, but, happily, it's over.

At the close, 3.16.17:
Dow: 20,934.55 -15.55 (-0.07%)
NASDAQ: 5,900.76, 0.71 (0.01%)
S&P 500: 2,381.38, -3.88 (-0.16%)
NYSE Composite: 11,600.24, 9.93 (0.09%)

Sunday, March 12, 2017

Despite Near-Surety Of Fed Rate Hike, Stocks Gain To Close Out Week

Editor's Note: This weekend edition may be the last Money Daily posting until Thursday of this week as incredibly bad weather has persisted in our neck of the woods, a recent windstorm knocking out power to over a quarter million of our neighbors immediately to the West. Bone-chilling temperatures and a major snowstorm are predicted for the early part of this coming week. Money Daily will return to a regular daily posting once weather conditions permit.

Investors took Friday's non-farm payroll (NFP) report of 235,000 net new jobs added to the US economy in February as genuine good news, despite the nearly foregone conclusion that the robust figure would make the case for a federal funds rate increase by the FOMC of the Federal Reserve a fait acommpli. The gains snapped a recent string of losing sessions on the major indices.

In reality, the idea of a rate increase of 25 basis points shouldn't be worrying to anybody, especially with the federal funds overnight rate remaining at or below zero for 14 of the past 17 years and the last eight straight.

A 0.25% increase would move the rate to 0.75-1.00, a number that the Fed has been apprehensive of since the Great Financial Crisis of 2008. Since then, they and their fellow travelers in central banking have added trillions in liquidity to the fractured system, saving it from complete collapse.

In the process, however, they have managed to dilute the currencies of most nations, notably those of Japan and the European Union. While rate increases by the US may be a panacea, they could impact other nationas and the global economy in a variety of ways. As the last crisis was liquidity-driven, expect any future crises to be based upon sovereign solvency or faith in national currencies, all of which are backed by nothing more than the faith and (ahem) credit of the issuing country.

The globe is one giant Ponzi scheme, in which everybody buys each others currencies, hoping beyond hope that nobody defaults in a messy manner. Thus far, central banking institutions have managed to avoid large-scale default, but there's no guarantee that such benign conditions will avail themselves indefinitely.

On the other hand, with the ability to conjure dollars, euros and yen out of thin air at their whim, the central bankers are holding all the cards, even though they're bluffing into their sleeves. The system may fail at some point, but it's more likely that gradualism will prevail, making the case that the most important aspect of one's finances may not be generation of income or growth, but preservation of what one already owns.

At The Close, Friday, March 9, 2017:
Dow: 20,902.98, +44.79 (0.21%)
NASDAQ: 5,861.73, +22.92 (0.39%)
S&P 500: 2,372.60, +7.73 (0.33%)
NYSE Composite: 11,500.76, +43.12 (0.38%)

For the Week:
Dow: -102.73 (-0.49%)
NASDAQ: -9.03 (-0.15%)
S&P 500: -10.52 (-0.44%)
NYSE Composite: -97.61 (-0.84%)

Friday, March 10, 2017

Is Good News, Good News? February NFP 255,000; Fed Sure To Hike Rates Next Week

As was expected, the February non-farm payroll number was massive, with the US labor force expanding by 235,000 jobs according to data from the Bureau of Labor Statistics.

Additionally, the unemployment rate fell to 4.7%, the excellent report supplying plenty of cover for the Federal Reserve to increase the federal funds rate when the FOMC meets next Tuesday and Wednesday.

While the jobs report has Americans ecstatic over the prospects for jobs as the first year of the Trump administration ensues, raising interest rates is not such a universally-loved subject as low rates have largely fueled the eight-year rally which continues on Wall Street.

If the Fed decides to hike rates when they meet next week, it will be the second such advance in three months. In December, the Fed increased the federal funds rate to a range of 0.50-.0.75%. The stock market shrugged it off, advancing sharply since, though the past week has seen the major averages pull back from all-time highs.

An increase to 0.75-1.00% next week would hardly be earth-shattering or even noticeable to most. Some mortgage and credit card debt is tied to the rate, though more are gauged to the prime rate, which hasn't seen much movement throughout the economic expansion.

So, perhaps the good news from the jobs report will translate into genuine good news for the economy. It will, if it slows down the pace of stock buybacks which have fueled the rally, and doesn't crimp the Main Street economy, which is beginning to show positive signs.

At The Close, 4.9.17:
Dow: 20,858.19 +2.46 (0.01%)
NASDAQ: 5,838.81, +1.25 (0.02%)
S&P 500: 2,364.87, +1.89 (0.08%)
NYSE Composite: 11,457.64, +9.43 (0.08%)

Thursday, March 9, 2017

Stocks Down Third Straight Session As NFP Looms

One would assume that a good jobs number on Friday would be good for stocks, but, as the economy goes, the Fed goes against it, with tightening via a raise in the federal funds rate almost a surety if the NFP number for February comes in strong, as suggested by Wednesday's ADP figure of 298,000 new jobs added in the month.

That's the backwardness of the stock market, fueled almost entirely by cheap credit and share repurchases (buybacks) over the past eight years. In fact, today marks the 8th anniversary of the market bottom in 2009, and its been nothing but accommodation by the Fed and happy talk from the press ever since.

Thus, stocks fell for the third straight session and fourth in five days, with the exception of the NASDAQ, where speculators have still not succumbed to the axe of profit-taking.

In a sign that the narrative may be unraveling, WTI crude oil fell sharply on Wednesday, closing under $50 a barrel for the first time since December after another survey showed massive gluts in crude and distillates. This should transfer into good news for drivers as the spring and summer driving months come into focus with lower prices at the pump.

Oil has experienced a glut of magnificent proportions over the past two years with demand down and supply at or near record levels. The price of +$50 has been fueled largely by speculation, as is everything else in the financial sector. With interest rates set to increase, perhaps the malinvestments and speculative frenzy can abate and true price discovery ensue.

At The Close, 3.8.17:
Dow: 20,855.73, -69.03 (-0.33%)
NASDAQ: 5,837.55, +3.62 (0.06%)
S&P 500: 2,362.98, -5.41 (-0.23%)
NYSE Composite: 11,448.21, -58.11 (-0.51%)

Wednesday, March 8, 2017

Stocks Lower Again In Sluggish Trade

For the second straight session and the third in the past four, the major indices closed in the red as US equities seem to have reached the top of the proverbial "wall of worry."

More than any one thing, the investment community is concerned about the Fed raising rates next week, though the unusually highly charged political environment could be taking its toll on an overstretched market.

Stocks are not supposed to be prone to politics, but that is the unitary condition that is emerging, in which all aspects of economics, politics and religion become intertwined.

AT THE CLOSE, 3/7/17:
Dow: 20,924.76, -29.58 (-0.14%)
NASDAQ: 5,833.93, -15.25 (-0.26%)
S&P 500: 2,368.38, -6.93 (-0.29%)
NYSE Composite: 11,506.32, -41.47 (-0.36%)

Tuesday, March 7, 2017

Major Indices Lower To Start Week As FOMC Decision Looms

As investors weighed the risks of a March increase in the federal funds rate, all major averages slipped to open the week on Wall Street.

Members of the Federal Reserve's Open Market Committee (FOMC) have been widely suggestive that they would approve a 0.25% increase in the federal funds rate when they meet next Tuesday and Wednesday, March 14 and 15.

Thus, with money tightening, investors are squaring up positions or exiting the market in search of opportunity, primarily ending up in cash or bonds. Wall Street has rallied strongly since the election of Donald Trump as president back in November, but it appears the Fed is about to empty the punch bowl of nearly-free funding for speculators.

At The Close, 3.6.17:
Dow: 20,954.34, -51.37 (-0.24%)
NASDAQ: 5,849.18, -21.58 (-0.37%)
S&P 500: 2,375.31, -7.81 (-0.33%)
NYSE Composite: 11,547.79, -50.58 (-0.44%)

Saturday, March 4, 2017

Weekend Recap: Wild Wall Street Ride Continues Push Higher

Amid the swirling winds of Washington's political circus, the nation's financial sector continued to take all the body blows, low blows, and talking head shots dished out by the deep state in perfect stride, carrying the averages to new highs on Wednesday following President Trump's speech before a joint assembly of congress.

With one eye on the political process and the other on the Federal Reserve, stocks continued to dance forward into March, with two key dates upcoming: Friday, March 10, when the February non-farm payroll report is released, and, Wednesday, March 15, the conclusion of a two-day FOMC meeting largely expected to result in an increase in the federal funds rate, from 0.50-0.75 to 0.75 to 1.00.

The jobs report will be crucial in terms of setting the agenda for the Fed governors. If expectations are met and job growth continues to be robust, the Fed will almost certainly announce a rate hike. Falling short of expectations could lead to another month of inaction on interest rates.

In any case, stocks were pumped after the presidential address in which Mr. Trump reiterated promises to build a wall on the border between Mexico and the United States, repeal and replace Obamacare, and set forth an overall economic agenda that will include budget cuts to various agencies, a trillion dollar infrastructure plan and a rejiggering of the tax code.

Should the President succeed even marginally on his lofty economic goals, stock pickers may well find themselves in a condition to ignore any moves by the Fed, freeing speculators from the tired monologue that has led the market for the past eight years running and continue the now third-longest expansion in stock market history.

Shrugging off such ancient notions as fundamental valuations and price-earnings ratios, investors have taken the stock markets literally to uncharted territories. The US dollar remains the currency of choice in most of the world and with that oil and most commodity prices have slumped and/or stabilized. Bonds continue to vacillate, though short term rates are beginning to show signs of stress, especially in consideration of upcoming budget and debt ceiling debates. Also on the minds of many in the investing community are elections in the Netherlands (in two weeks) and France (April 23) where populist candidates in the Donald Trump style are engaged in hotly contested races.

The populist surge sweeping the globe is unlikely to be quelled soon, either by technocrats in the European Union or entrenched politicians across a wide swath of nations, from Malaysia to Japan to Italy and Germany. The middle class in developed nations, having been squeezed financially by globalization, is in nearly full revolt. All the while, giant corporations appear confident that they will weather the ongoing stormy crises.

At the Close, 3.3.17:
Dow: 21,005.71, +2.74 (0.01%)
NASDAQ: 5,870.75, +9.53 (0.16%)
S&P 500: 2,383.12, +1.20 (0.05%)
NYSE Composite: 11,598.37, +22.46 (0.19%)

Since the election in early November, the NYSE Comp. and S&P 500 have closed higher 12 of 17 weeks, the Dow and NASDAQ, 13 of 17.

For the week ending 3.3.17:
Dow: +183.95 (0.88%)
NASDAQ: +25.45 (0.44%)
S&P 500: +15.78 (0.67%)
NYSE Composite: +57.08 (0.49%)

Friday, March 3, 2017

Stock Markets Backtrack In Advance of February NFP Jobs Report

Editor's Note: Sincere apologies to readers for the incorrect posting this morning. February Non-farm payroll data will not be released until March 10, instead of the usual first Friday of the month. Money Daily reported below that the NFP data would be out TODAY, March 3, but that is not the case. We seriously regret the error.

Following Wednesday's massive upturn in markets on the heels of President Trump's speech, Thursday was a bit of a reality check for gamblers in the Wall Street Casino.

Smart one - and there were plenty of them - took their quick profits and are likely sitting in cash ahead of Friday's non-farm payroll report from the tarnished Bureau of Labor Statistics (BLS).

Since February is a short month, expectations for another bump in payrolls may very well be disappointed, to a degree not previously factored.

ADP reported fewer jobs created in the private sector for February than expected. The 139,000 American workers hired to private-sector payrolls in February was below economists' consensus forecast of 155,000. Additionally, ADP revised their January figure to 127,000 from 175,000. That's a mighty big decline which was overshadowed by Wednesday's shock and awe euphoria.

While the NFP does not exactly mirror ADP, it usually tracks pretty well, though the BLS is notorious for using metrics such as the business birth/death model to goose numbers toward the desired result.

Non-farm payroll data will be released Friday morning at 8:30 am ET. There may well be fireworks if the number falls short of the lowered-bar expectations of 157,000 net new jobs.

At The Close, 3.2.17:
Dow: 21,002.97, -112.58 (-0.53%)
NASDAQ: 5,861.22, -42.81 (-0.73%)
S&P 500: 2,381.92, -14.04 (-0.59%)
NYSE Composite: 11,575.91, -85.31 (-0.73%)

Thursday, March 2, 2017

Trump Effect: Stocks Roar To New All-Time Highs Following Presidential Address

How important President Donald Trump's speech before a joint assembly on congress Tuesday night was is not easy to gauge, but, from a Wall Street perspective, he must have hit the high notes perfectly because all major averages were straight up at the opening bell and continued to add to gains throughout Wednesday's session.

The Dow, which blew away the 20,000 Rubicon less than a month ago, added nearly 1.5%, or 303 points, its largest one-day gain since early December. With Industrials leading the way, the other three major averages broke out as well, with the S&P pretty much reaching highs that analysts had been predicting as end-of-year results, yet we're barely two months into the new year.

How this kind of euphoria will eventually manifest itself is still a mystery, especially with stocks tacking higher despite consistent warnings of a valuation trap being set. While stocks continue to ramp on a daily basis, corporate reports are not following the same tune. Additionally, analysts from various houses also revised first quarter GDP estimates lower, with Goldman Sachs and the Atlanta Fed looking for 1.8% growth. JP Morgan and Bank of America are even more pessimistic, at 1.5% and 1.3%, respectively.

In the main, what companies behind the stocks are counting on is a relaxed regulatory environment under President Trump's administration. The President has already issued a variety of pro-business executive orders and his commitment to repealing and replacing the Affordable Care Act (Obamacare) is also being viewed as a positive on two fronts. First, it will free up consumer funds from an expensive mandated coverage nightmare; second, companies will probably get breaks as well in group coverage.

Adding to the speculative high spirits are items currently under the radar such as the President's budget, which includes massive cost-cutting across agencies, a one trillion dollar infrastruture plan that Mr. Trump touched on it in his speech, and trade negotiations with countries outside the framework of international treaties such as NAFTA, TPP and the World Bank.

All told, President Trump's first six weeks in office have been nothing short of miraculous for stocks, though it will take some time to see how it all plays out. Either stock pickers have been set up for a major catastrophe or the enthusiasm and honesty of the new president will indeed guide America and American business interests to new heights.

Lurking in the shadows behind the presidential bluster is the Federal Reserve, which meets in two weeks to decide whether to raise federal funds rates or keep them at current levels. Money is on them keeping the rates at the current 0.50-0.75, though even an increase of 25 basis points would seem to be inadequate to quiet Wall Street's enthusiasm.

At the Close, 3.1.17:
Dow: 21,115.55 +303.31 (1.46%)
NASDAQ: 5,904.03 +78.59 (1.35%)
S&P 500: 2,395.96, +32.32 (1.37%)
NYSE Composite: 11,661.22, +148.83 (1.29%)

Wednesday, March 1, 2017

Dow Winning Streak Ends At 12, Should Resume Promptly

Stocks ended a historic run of 12 straight winning sessions on the Dow Jones Industrial Average, tying the mark set in January of 1987, finishing the month of February on a dour note, though overall, stocks were fantastic for the month and so far in 2017.

With a possible March rate hike still two weeks away, there's still plenty of time to jump upon the Wall Street bandwagon. Since stocks apparently have no downside, more money will be pumped into the market by the almighty algos, probably beginning on March 1.

The old adage, "don't fight the tape," is in play as fundamentals have been tossed to the curb in favor of momentum-chasing. Stocks should continue to climb until they don't.

At The Close, 2.28.17:
Dow: 20,812.24, -25.20 (-0.12%)
NASDAQ: 5,825.44, -36.46 (-0.62%)
S&P 500: 2,363.64, -6.11 (-0.26%)
NYSE Composite: 11,512.39, -45.96 (-0.40%)

Tuesday, February 28, 2017

Coincidence Or Conspiracy? The Art Cashin - Fearless Rick Echo Chamber

Not one to expectantly toot one's own horn, Money Daily continues to display some market sense, the latest iteration being the confluence of the weekly market recap post from Sunday, February 26, Dow At Record Highs 11 Staight Sessions; Eye On PPT, Central Bank Intervention dovetailing with legendary floor trader Art Cashin's commentary at King World News the same day.

In the nearly 15-minute audio, Cashin, Director of Floor Operations for UBS, touched (near the end of the broadcast) on the very same subject matter as Money Daily, namely, central bank intervention in markets.

Like Fearless Editor and Publisher, Rick Gagliano, Cashin - undeniably a more expert analyst than our own - sees intervention as unsettling to markets, comparing the intrusion to a rigged poker game, and sees danger in such action. As is the usual case, Mr. Cashin plows some new ground as well, coining the phrase "intellectual civil war" in describing the conditions in Northern vs. Southern Italy and touching upon other established, mostly European nations.

In defense of his moderate style, Cashin opines that his success has been largely based upon, quoting him,
...because the first thing I do when I enter a room is look for the exit signs.

Good stuff, indeed, and well worth a listen.

Keeping in mind central bank intervention, i.e., buying at all-time highs, the Dow made a new record close for the 12th straight session, that, in itself, should be cause for alarm... the one that never goes off at market tops (Old Wall Street saying: "they never ring the bell at the top").

The Dow has never closed higher for 13 straight sessions, the most recent run tying the mark set in January 1987, which, as market observers know well, was the precursor of one of the most devastating crashes in market history.

At the Close, 2.27.17:
Dow: 20,837.44, +15.68 (0.08%)
NASDAQ: 5,861.90, +16.59 (0.28%)
S&P 500: 2,369.75, +2.41 (0.10%)
NYSE Composite: 11,558.35, +17.06 (0.15%)

Sunday, February 26, 2017

Dow At Record Highs 11 Staight Sessions; Eye On PPT, Central Bank Intervention

As has been the case for multiple sessions over many years, a rally in the final hour of trading pushed the Dow Jones Industrial Average to a new all-time high, with the NASDAQ and S&P averages also closing up, but short of record highs. They NYSE Composite was fractionally lower.

In the red the entire session, the Dow gained 70 points from 3:00 to 4:00 pm ET, with other major averages also gaining. This kind of activity has been a market feature since at least 2001, when the existence of the Plunge Protection Team (PPT) turned from urban myth to global reality. The PPT, created by Presidential Order #12631, signed on March 18, 1988 by President Ronald Reagan is also known as The Working Group on Financial Markets, is, in reality, a body of financial authorities consisting of:
  • The Secretary of the Treasury, or his or her designee (as Chairperson of the Working Group);
  • The Chairperson of the Board of Governors of the Federal Reserve System, or his or her designee;
  • The Chairperson of the Securities and Exchange Commission, or his or her designee; and
  • The Chairperson of the Commodity Futures Trading Commission
Writers such as John Crudele of the New York Post have been critical of the Working Group's market-bending actions and foreign journalists from the Daily Telegraph and The Observer have suggested that the group has often exceeded its mandate.

Thus, tin-foil-hat type conspiracies have continued to suggest that the Federal Reserve and other central banks have been manipulating markets higher for years, and, while such coordinated action has yet to be unearthed by the mainstream media, sites such as ZeroHedge.com and other fringe outlets report that while the PPT may or may not be always active in markets, there's no doubt that central banks, notable, the European Central Bank (ECB), Swiss National Bank (SNB) and Bank of Japan (BOJ) are heavily invested in US and other global equities, making a mockery of the global regime of fiat money.

There are those who say intervention by government-sponsored agencies is not altogether nefarious, and some who believe such market-rigging is a good and reliable replacement for Adam Smith's "invisible hand" of the markets, it cannot be understated adequately that such activity will eventually undermine the integrity of financial markets and instruments.

Being based almost entirely upon faith and trust, financial markets have become the backbone of the global economy. If that faith and trust is broken - an unlikely occurrence, as the central banks, governments, and major brokerages work hand-in-hand largely toward the same end (higher stock prices) - the fragile system would crumble. An antecedent (and, much larger market) to the inner workings of financial markets is the bond market, which has also been pistol-whipped regularly by central bank policy and directive. On Friday, the US Treasury 10-Year Note fell to its lowest level in nearly three months, closing out the week at 2.3170, a direct result of higher stock prices, also known in the investing world as TINA (There Is No Alternative... to stocks).

With central banks and government agencies regularly interjecting themselves and their policies into financial markets, the natural question becomes: how stable and trustworthy are these markets and who gains from such manipulation?

Answering the question bluntly, the markets are only as stable as the institutions behind them, which is today a matter of considerable conjecture and discordant viewpoints. Purists posit that the mountains of debt produced by individuals, businesses, and governments is simply unsustainable and that a rout and crash, while unpredictable, is inevitable. The obvious conclusion to the other half of the question "qui bono" (who gains) is those in power and in control of such vast swaths of money, the governments, oligarchs, commercial and central banks. Beyond that, those in power consider themselves to be benefactors of the millions who gain from higher stock prices, inflation and boosts to massively underfunded pension funds.

With this degree of chutzpah in and on the minds of the central bankers and government leaders of the world, there is little doubt that they believe their actions to be highly beneficial to the orderly running of global finances while also not taking into account the falsity and pervasive inequities that are given rise by those same actions. Those with power over financial markets hold an incredible degree of responsibility, a responsibility that seemingly has gone beyond the pale, over the moon and into its own orbit.

Essentially, those who have questioned or taken positions contrary to the policies of the Fed and their brethren central banks, especially since the GFC of 2008, have been serially decimated in the markets. With stock indices raging without underlying fundamental bases, the planet may have reached a point of no return, wherein all matters financial are no longer in the control of individuals, but, rather, controlled by an opaque group of self-appointed masters.

One can only hope that they are well-grounded and essentially good-natured, because the alternatives would be brazen in concept and bizarre in execution.

At The Close, 2.24.17:
Dow: 20,821.76, +11.44 (0.05%)
NASDAQ: 5,845.31, +9.80 (0.17%)
S&P 500: 2,367.34, +3.53 (0.15%)
NYSE Composite: 11,541.29, -14.87 (-0.02%)

For the Week:
Dow: +197.71 (0.96%)
NASDAQ: +6.73 (0.12%)
S&P 500: +16.18 (0.69%)
NYSE Composite: +30.38 (0.26)



Wednesday, February 22, 2017

Fed Minutes Put March Rate Hike In Play

Editor's Note: With the luck of some extremely mild weather in Upstate New York (temps in the 60s today and expected the same for Thursday and Friday), the Money Daily team (Fearless Rick) has headed out to open up spring and summer camp a little early. That means the usual posting of Money Daily will not be the normal after the market close summary, but will be more sporadic for probably the next three to four weeks and may not be "daily" at all. Better weather brings on more responsibilities and a relaxed time frame.

Thanks,
Fearless Rick


Let's not beat around the bush. The Federal Reserve is intent on raising rates, which should surprise nobody, as the federal funds rate has been at or below one percent for the better part of 16 years.

Currently set at 0.50-0.75%, the key overnight rate has been largely responsible for a great deal of irresponsibility, not the least of which was the subprime disaster of 2008 and the resultant Great Financial Crisis which sent the global economy into one of the worst tailspins since the Great Depression of 1929-1938.

So, with the release today of the minutes from last month's FOMC meeting, it's compelling to think that a rate increase would be on the agenda at the next meeting, mid-March.

After all, the latest hike, in December of last year, hardly caused a ripple at all. Most experienced investors and money managers are aware of the need to "normalize" policy by the Fed and have preparing for such an event (or series of hikes, which is completely probable) since December of 2015.

With President Trump promising a fiscal stimulus plan, the Fed's belief that inflation will be the end result is a bit of a cockeyed argument, but, as always, the hyper-politicized Federal Reserve Board of Governors will say anything to get to their desired result. If the hikes come too quickly - they promised four this year - they can lay the blame on everybody's favorite political punching bag, Mr. Trump. Should things work out, the Fed will claim all the credit for "saving the financial system as we know it."

Either way, the Fed will come out smelling like the proverbial rose, even though they come closer to the stench of burning paper currency than that of a pretty flower.

March is now a "live" month for the Fed, though it should not go unnoticed that the Fed has and will likely continue to do not what they say, as in the case of last year's promise of three rate hikes, when in fact they actually performed just one (December).

With the stock indices hitting all-time highs on just about a daily basis, March would be as good a time as any to get rates another notch closer to one percent. In fact, a 50 basis point hike, to 1.00-1.25% wouldn't be such a bad idea. The stock markets are about to go belly up, despite being wildly overvalued.

Wall Street suffers from the absolute worst form of normalcy bias and that alone should prevent even a correction. Financial markets are in as weird a place as they've ever been, but expect the next crashing sounds to come from overseas, either to the West, as in Japan (or even China), or looking East at the failed experiment that is the European Union and the coming parity of the euro to the US dollar.

Stocks Ramp To All-Time Highs Again

More record closes for all major US indices.

At The Close, 2/21/17:
Dow: 20,743.00, +118.95 (0.58%)
NASDAQ: 5,865.95, +27.37 (0.47%)
S&P 500: 2,365.38, +14.22 (0.60%)
NYSE Composite: 11,578.25, +67.34 (0.59%)

Friday, February 17, 2017

Big Week For Equities Sends All US Indices To All-Time Highs

Stocks suffered early in the day on Friday, but rallied late with the Dow, S&P 500, and NASDAQ all closing with marginal gains. Only the NYSE Composite ended the day in the red, down about a point-and-a-half.

Even with options expiry, Friday was barely exciting, but, for the week, the US averages were, in a word, incredible.

The closing figures for the day and week are presented below. More analysis (if any is even necessary) Saturday AM.

At the Close, Friday, February 17, 2017:
Dow: 20,624.05, +4.28 (0.02%)
NASDAQ: 5,838.58, +23.68 (0.41%)
S&P 500: 2,351.16, +3.94 (0.17%)
NYSE COMPOSITE: 11,502.71, -1.48 (-0.01%)

For the week:
Dow: +354.68 (1.75%)
NASDAQ: +104.45 (1.82%)
S&P 500: +35.06 (1.51%)
NYSE COMPOSITE: +133.19 (1.17%)

Thursday, February 16, 2017

OMG! Only Dow Closes At New All-Time High

Stocks took a needed breather on Thursday, staring at a Friday options expiry tomorrow which should be a massive payday for the Bulls, which, we assume would be everybody.

Gosh, this is getting repetitive and boring.

At the Close 2.16.17:
Dow: 20,619.77, +7.91 (0.04%)
NASDAQ: 5,814.90, -4.54 (-0.08%)
S&P 500: 2,347.22, -2.03 (-0.09%)
NYSE Composite: 11,504.20, -10.20 (-0.09%)

Wednesday, February 15, 2017

Four Straight: All Major US Indices Close At Record Highs

Shades of the Weimar Republic, as all financial assets are becoming ridiculously overpriced.

As was the case in the Weimar, this may not end well. Inflation statistics from this morning's CPI reading showed January up 0.6% and the core CPI higher by some 0.3%. Meanwhile, capacity utilization fell 0.3 from December, to 75.3%.

Retail sales figures were also positive, showing a gain of 0.4%, after December's numbers were magically improved, revised from 0.6% to 1.0%. This as holiday sales gains from major retailers were modest or unreported, and large chains such as Sears and Macy's announced mass store closings coming throughout the year.

Global stock indices have also been ramping higher of late, an indication that the inflation, so often promised by endless rounds of quantitative easing (money printing) and an extended period (8 to 15 years) of low interest rates (some below zero) is finally occurring. What the globalists have been touting and predicting to happen can only lead to one logical conclusion: higher prices for consumers, a condition that will prove to impoverish the average citizenry of nearly every country in the world.

All of this may have something to do with the globalists running scared that their era of "free trade" and fiat money is about to meet its logical conclusion.

But it's all good for Wall Street, and that's what counts, to Wall Street.

At the Close, 2/15/17:
Dow: 20,618.98, +114.57 (0.56%)
NASDAQ: 5,821.62, +39.05 (0.68%)
S&P 500: 2,351.15, +13.57 (0.58%)
NYSE Composite: 11,510.34, +41.47 (0.36%)

Tuesday, February 14, 2017

NYSE, Dow, S&P 500, NASDAQ Close At All-Time Highs 3rd Straight Session

As the bubble grows what can be said of the current political and economic conditions except that we are in uncharted territory?

Just a week or so ago, many were still wondering if the Dow could reach and hold 20,000. 500 points later, on some of the weakest volume in stock market history, we have an answer, as troubling as it may seem.

With the politicians tied up with what increasingly appears to abe an overt attempt to oust recently-installed President Donald J. Trump, the markets do not seem to care one whit whether the myriad problems of the United States and the world are solver, much less addressed.

For now, the world watches as Washington, DC self-destructs. Stocks continue to soar. This could go on for an extended period, but the system is strained if not outright rigged for massive Wall Street gains during one of the most turbulent periods in the country's history.

It could all come crashing down tomorrow, though that scenario is equally improbable, if not downright frightening.

For the most part, the market is being plied by professionals more than ever before, a condition that obtains from a variety of sources, one of them a well-seated distrust of the financial markets by individuals, the other, unbridled greed.

There may be opportunities, but one would be hard-pressed to delineate any of them with stocks ramping higher day after day after day.

The overarching theme of markets over time has been to buy low, sell high, and stay in the game. Obviously, this is not a game everyone wishes to be playing.

At the Close, Tuesday, February 13, 2017:

Dow: 20,504.41, +92.25 (0.45%)
NASDAQ: 5,782.57, +18.62 (0.32%)
S&P 500: 2,337.58, +9.33 (0.40%)
NYSE Composite: 11,468.88, +34.94 (0.31%)

Monday, February 13, 2017

All US Indices Close At Record Highs For Second Straight Session

No commentary needed.

At the Close, Monday, February 13, 2017:
Dow: 20,412.16, +142.79 (0.70%)
NASDAQ: 5,763.96, +29.83 (0.52%)
S&P 500: 2,328.25, +12.15 (0.52%)
NYSE Composite: 11,433.90, +56.17 (0.49%)

Friday, February 10, 2017

Bubble Superfecta: Dow, NASDAQ, S&P 500, NYSE Composite All Close At New Records

As the week comes to a stunning close, it's official, every market in America is officially in deep into bubble territory.

Consider that the major indices all closed at all-time highs today and that the Dow Jones Industrial Average is up a whopping 2200 points since election day, November 8, 2016. That amounts to a gain of just over 12% in three months. At that rate of ascent, 22,000 on the Dow should be a no-brainer by the end of 2017.

Nothing other than stupidity, other people's money, greed, and momentum were needed to foment one of the most rapid rises in the history of the Dow. The other indices have surely been along for the ride; even the broad measure of the entire NYSE Composite cracked to a record close today.

Not to suggest that a reversal is imminent (been that way for 6 years at least), but for some perspective, let's examine where these markets were at the depths of the Great Financial Crisis (GFC), on March 9, 2009.

Dow: 6,547.05
NASDAQ: 1,268.64
S&P 500: 676.53
NYSE Composite: 4,226.31


In the span of eight years, during what has ostensibly been the weakest recovery after a recession since the Great Depression, the Dow and S&P have more than tripled, the NASDAQ has more than quadrupled, and the poor old NYSE Comp. is just short of tripling.

So, if you missed it you missed it, but there still may be time to get in. Nobody knows where this is going to end, but we can all thank Ben Bernanke and Janet Yellen for oodles of free cash injections worldwide (QE), zero interest rate policy (ZIRP) and the most reckless economic policies the world has ever witnessed.

It's still ongoing, though. The ECB and BOJ are still pumping money into their markets, and, unless you missed it, none other than the Swiss National Bank holds more than $64 billion in US equities.

Who said these central bankers don't know what they're doing?

Enjoy the weekend!

At the Close, Friday, February 10, 2017:
Dow: 20,269.37, +96.97 (0.48%)
NASDAQ: 5,734.13, +18.95 (0.33%)
S&P 500: 2,316.10, +8.23 (0.36%)
NYSE Composite: 11,377.72, +50.04 (0.44%)

For the Week:
Dow: +197.91 (0.99%)
NASDAQ: +67.36 (1.19%)
S&P 500: +18.68 (0.81%)
NYSE Composite: +50.04 (0.44%)

Thursday, February 9, 2017

Bubble Trifecta! Dow, S&P, NASDAQ Close At All Time Highs

Was there any justification to today's push to new all time highs on the Dow, S&P, and NASDAQ (the NYSE Comp. fell just short of the previous closing high, 11,339.05, January 25)?

Probably not, because, as has been suggested by many in the know, this is a bubble, and bobbles don't need rational thought, fundamental investment concepts or sound judgement. All they need is momentum and most of that is supplied by robotic, HFT-fueled algorithms.

That's all one needs to know about whether it would be wise to buy into this market.

The most basic concept in investing is to buy low and sell high, not the converse of that simple dictum. Stocks are tremendously overvalued and today, they became even more so.

Tread into this casino with extreme caution. While gains may still be available to many, losses, which could come from any variety of sources, could be decisive. Trying to time this is a fool's errand, one that should not be undertaken if risk aversion is guiding.

At the Close, Thursday, February 9, 2017:
Dow: 20,172.40, +118.06 (0.59%)
NASDAQ: 5,715.18, +32.73 (0.58%)
S&P 500: 2,307.87, +13.20 (0.58%)
NYSE Composite: 11,327.68, +75.88 (0.67%)

Wednesday, February 8, 2017

Midweek Doldrums: Dow Lower; NAZ, SPX, NYSE Comp Flat; Oil Still In Glut

With no major economic data released, Wednesday was a bit of a nothing-burger on the day. The Dow lost some ground while the other indices finished modestly to the upside.

There was more interest in the 10-year note, as the Treasury auctioned off $23 billion on what was deemed a very weak sale at a yield 2.333%.

Also making some headlines was WTI crude oil, which fell below $52 per barrel, after the American Petroleum Institute (API) said crude inventories rose by 14.2 million barrels, the second largest weekly build in the series.

The dull session comes as Q4 2016 earnings are winding down, and there hasn't been much in the way of good news from the corporate sector. Conversely, not many companies have been lowering forecasts, leaving investors in an area of suspense about which direction the market may go next.

At The Close, Tuesday, February 8, 2017:
Dow: 20,054.34, -35.95 (-0.18%)
NASDAQ: 5,682.45, +8.24 (0.15%)
S&P 500: 2,294.67, +1.59 (0.07%)
NYSE Composite: 11,252.31, +8.93 (0.08%)

Tuesday, February 7, 2017

Debt Notes: Inflation Over The Next 18 Months Is Very Doubtful, Unless...

There's been plenty of chit-chat the past few weeks about how President Trump's infrastructure initiative (we haven't had even a sniff of what this might be, besides the Mexican wall) and tax cuts are going to spur inflation, but there hasn't been any solid data upon which to rest the thesis.

Notwithstanding the minor upticks in CPI and PPI, there's little evidence to suggest that any kind of rampant inflation is on the immediate or even the future horizon, and there are plenty of good reasons for that.

Industry and international trade has been slow since the Great Recession of 2008-09 and our bouncy "recovery" hasn't made any real dent in the actual number of hours worked nationally. Sure, the BLS always tells us more and more jobs are being created and the unemployment figure is near historic lows, but they always fail to point out that people who have dropped out of the labor force aren't counted any more, so those figures are worth about what we all pay to read them... essentially, ummmm, nothing.

Now there is going to be inflation in some things, like it or not, and those things today are, in no particular order, health care, housing, autos, and higher education. Food prices in the USA are, and always have been, relatively stable. Notably, beef prices are far lower than they were just a few years ago.

From all indications, retailers closing up shops nationwide seems to be saying there isn't much demand for clothing. Household goods, ditto. So, where's the inflation coming from if demand is waning?

Simple answer. It's not. The Federal Reserve needs to run the narrative that inflation is upon us so they can jack up their abysmally-low federal funds rate. That's because their experiment in quantitative easing (printing money) and ZIRP (Zero Interest Rate Policy) have proven to be dismal failures. Of course, they will never admit to that, or to the fact that roughly $14 trillion has been wasted or funneled directly or indirectly to the top 1% wealthiest people.

Bottom line is that without demand for goods and services, there can be no price inflation, because, using the standard metric of inflation being more money chasing fewer goods, while there's certainly more money out there, there's also no shortage of goods and services. In fact, were the economy not in such a dreadful state, more people would be opening new businesses, simply because there would be money to be made and not much in the way of competition.

As it stands today, most of the needs of the average, below average, and above average US citizen are pretty easily met. Food and clothing are cheap, and that's two of the three essentials for survival. The third, housing, is largely dictated by geography, so, in big cities, it's expensive. Out in the boonies, not so much.

All of this brings us to the real question, where is all the money coming from?

Another simple answer: debt, though it's not exactly as cut-and-dried as many would believe. Outstanding credit card debt continues to rise, but it's just a shade below $1 trillion, and, as for home equity loans, many people, and many bankers, learned a lifetime lesson in the Global Financial Crisis (GFC). Where the real money is coming from is debt related to car loans and higher education, aka, student loans, both of which reached all-time highs in the 4th quarter of last year.

Strange as it may seem, both are at higher nominal levels than credit card debt, at $1.407 trillion for car loans and $1.11 trillion in student loans. It seems odd that there would be more in just these two categories than everything that could be purchased with credit cards, which is, actually, everything. You can even pay taxes or register your car with a credit card, so it's readily apparent that there's an oversized appetite for new cars and degrees from colleges.

It doesn't really make sense. The vehicles on the road today may be the latest with all the greatest gadgets and widgets, but they're not much better than cars made in the past fifteen years, many of which are still reliably on the road. as for a college education, that has to be a societal miscalculation, because a degree in liberal anti-establishment cultural studies or whatever isn't going to pay for itself any time soon. It's a conundrum, a mismatch, a MALINVESTMENT, of which there are many, everywhere.

That's not to mention that the median cost of a new home is at another all-time high, but, as mentioned earlier, that's largely a local issue, but it bears notice that the average monthly payment of principle and interest (PI) for that median home is over $1000 a month.

So, if you find yourself all bollixed up over high credit card balances with high interest rates, don't worry. There are plenty of college graduates living in nice, new homes driving new cars who are in much worse shape than you.

If you're one of those people, we're all sorry, and we're having a drink to your ultimate demise, telling the bartender, "charge it."

"Compounded interest is the 8th wonder of the world. Those who don't understand it, pay it, and those who understand it, earn it."
- Albert Einstein

At The Close, Tuesday, February 7, 2017:
Dow: 20,090.29, +37.87 (0.19%)
NASDAQ: 5,674.22, +10.66 (0.19%)
S&P 500: 2,293.08, +0.52 (0.02%)
NYSE Composite: 11,236.17, -27.94 (-0.25%)

Monday, February 6, 2017

The Rush To Safety Has Begun In Earnest; 10-Year Yields Drop to 2.41%

With one of the most amazing sporting spectacles - Super Bowl 51 (LI, for those of the Roman numeral persuasion) - behind, most people got back to work today, including the rabid money-grubbers of Wall Street, but all was not rosy and peachy after the New England Patriots won in overtime, 34-28, over the Atlanta Falcons.

As President Donald Trump continues to attempt to "make America great again," much of the focus on the first trading day of the week was not on stocks, but rather, bonds, most noticeably on the 10-year treasury note, which plummeted eight basis points on the day to produce the lowest yield in two weeks, to 2.41%.

That figure may not seem so attractive to the yield-seekers of the world, but to countless hedge and managed bond fund professionals, it was a pretty awesome start to the week. Prices - which preform in the opposite direction of yield - for the 10-year were rocketing higher and any continuation of the move over the next few days and through the week might make for a trend-setting reversion following weeks of speculation after the Fed hiked federal funds rates at the end of last year.

Stocks were down modestly, but that was antecedent to the speculative ride in bonds, which was focused on the long end, thereby flattening the curve. What is more than just passing interest in treasury bonds figures to keep a lid on stock prices for the near term, at least until the next Fed meeting, in mid-March, at which time the FOMC will likely keep interest rates at the same levels. It's simply going to be too early for the Fed to believe that the economy is on sound footing toward expansion, something they've been sniffing around for over the past eight years. To their dismay, and possible demise, the Fed hasn't found much in the data to suggest that the US economy is going to be great, again, or with any other adverbial disclaimer.

So, today can be summed up as bond traders getting calls to buy safety and executing on the wishes of their clients. Any assumption that the Trump rally or any other concoction of the news and financial media is going to send stocks even higher than the stratospheric levels they've already achieved in one of the longest multiple expansions in history may be similar to a dog whistle.

Dogs may hear it and lower-thinking humans might get a strange beeping sound, but long-term financial experts aren't going to notice. They've already made up their minds about where stocks are headed and, from today's indications, they're not going to a pleasant place.

Gird your loins and whatever else you might think appropriate for a trip of declining prices and some creative destruction in stocks. Hopefully, it won't be your money that's being lost.

At the Close, Monday, January 6, 2017:
Dow: 20,052.42, -19.04 (-0.09%)
NASDAQ: 5,663.55, -3.21 (-0.06%)
S&P 500: 2,292.56, -4.86 (-0.21%)
NYSE Composite: 11,264.11, -46.63 (-0.41%)

Friday, February 3, 2017

What Wall Street Wants, Wall Street Gets; Trump Slashes Dodd-Frank

There's no better way to put it than to say that the Wall Street banks - Goldman Sachs, Bank of America, JP Morgan Chase, Morgan Stanley, Wells Fargo, and Citi - have Donald Trump's "get out of jail free" card in their back pockets.

Today's action by the President, an executive order slashing most of the regulations put on banks by the Dodd-Frank act under past-president Obama and the useless congress, paves the way for even looser regulations and more wild risk-taking by Wall Street.

And the celebration got underway right after the stupid BLS jobs report and the opening bell, boosting all major averages to within spitting distance of all-time highs.

Should anyone wonder if Mr. Trump knows anything about economics, one has only to look at his Treasury nominee, Steven Mnuchin, who led a group of investors in the take-out of IndyMac, later changing the name to OneWest while it became a serial abuser of mortgage financing and foreclosure laws.

While the former Goldman Sachs partner is not yet assured of passing muster in Senate confirmation, the appearance of yet another Goldman alumnus at the top finance job in the administration should be all one needs to know. Trump has long-standing associations with Wall Street, Goldman Sachs and financiers in general, so it isn't really a surprise.

Business will do business, whether or not it's moral, fiduciary, or based upon sound best practices. Wall Street retained control when Trump was elected, and would have even with Hillary as the president, so there's a bit of a silver lining in that at least the office of the president isn't occupied by a serial liar and psychopath. President Trump is better than the alternative, probably by more than anyone imagined.

After all the whipsaw activity of the past week, the major indices ended relatively unchanged. So, jobs data, the Fed, Trump, the EU, Japan, and the UK central bankers didn't actually add up to much at all.

Caveat Emptor

Carry on and Mind the Gap.


At the Close, Friday, February 3, 2017:

Dow: 20,071.46, +186.55 (0.94%)
NASDAQ: 5,666.77, +30.57 (0.54%)
S&P 500: 2,297.42, +16.57 (0.73%)
NYSE Composite: 11,311.74, +96.36 (0.86%)

For the Week:
Dow: -22.32 (-0.11%)
NASDAQ: +5.98 (0.11%)
S&P 500: +2.72 (0.12%)
NYSE Composite: +27.52 (+0.24%)

Stocks Finish Flat Thursday, Friday Futures Boosted By Boffo BLS Jobs Report

Stocks finished the day Thursday relatively flat, but the big jobs number Friday should manage to erase any doubts about where the market is headed (spoiler alert: back over 20,000).

According to the ever-accurate-and-oft-revised BLS, he US economy added 227,000 jobs in January while the unemployment rate rose slightly to 4.8%. Economists were looking for payrolls to grow by 175,000 with the unemployment rate expected to hold steady at 4.7%.

So, more jobs, but the unemployment rate goes higher. Only in America, land of missed opportunities and bogus statistical data from the government.

Wages missed the mark, as average hourly earnings rose just 0.1%. The usual suspect "experts" were seeking a gain of 0.3%. Sorry, slaves. Back to work. However, the day is early, and though futures are rocketing higher, there's now the possibility that President Trump will unleash a tweet or two designed to fan the flames of confusion.

Just one question: Are we having fun yet?

At The Close, Thursday, February 2, 2017:
Dow: 19,884.91, -6.03 (-0.03%)
NASDAQ: 5,636.20, -6.45 (-0.11%)
S&P 500: 2,280.85, +1.30 (0.06%)
NYSE Composite: 11,215.38, +8.14 (0.07%)

Wednesday, February 1, 2017

Fed On Hold, Markets Steady In Dull Session After Shaky Start To Week

With the Federal Reserve deciding that there would be no raise to the federal funds rate, as expected, US indices finished the day modestly higher, though the S&P 500 struggled to gain and the NYSE Composite finished in the red.

That was about all there was to the day, as investors took a break from the rabid pace set largely by President Trump's first ten days in office.

The next FOMC rate policy meeting isn't until March 14-15, though analysts and economists are still relatively certain that the Fed will continue to leave rates unchanged.

At The Close, Wednesday, February 1, 2016:
Dow: 19,890.94, +26.85 (0.14%)
NASDAQ: 5,642.65, +27.86 (0.50%)
S&P 500: 2,279.55, +0.68 (0.03%)
NYSE Composite: 11,207.24, -15.71 (-0.14%)

Tuesday, January 31, 2017

Stocks Drop, Rally In Split Session; Dow Down Three Straight; Apple Beats; Gold, Silver Rally

Beginning just after 2:00 pm ET, a furious rally brought US stock indices back from the depths of despair, finishing up Tuesday with a split decision, the S&P and Dow down, the NASDAQ and NYSE Comp. positive.

In close focus was the Dow Industrial Average, which was lower by as much as 186 points, but gathered back nearly half of that in the final two hours of the session. Leading the way lower were financial stocks, Goldman Sachs (GS) and JP Morgan Chase (JPM), the same companies that boosted the averages during the "Trump Rally" following November's election.

Now, it appears the euphoria over the presidency of Donald J. Trump is waning and enthusiasm for making America great again is falling prey to the harsh realities of economics, politics, and a divided country. Also weighing on stocks ae Trump's own bold initiatives, Twitter tweets and statements which appear to indicate that the 45th president is about to engage in an all-out, no-holds-barred currency and trade war with America's largest trading partners, in particular, China, Mexico and the European Union.

It just so happens that what President Trump is doing is exactly what he promised all during his campaign for the high office. Trump is truly an agent for change, but his changes - and the execution of them - are almost certainly not going to be smooth or predictable.

Today's targets of Trump ire included pharmaceutical companies, Germany and congress. Among other things, Trump told pharma execs to lower prices and move their operations back to the US.

Early in the day, President Trump's top trade advisor, Peter Navarro, said Germany was benefiting from a "grossly undervalued" euro, that gave Germany an unfair edge over US and fellow EU trading partners.

As for congress, Trump continues to hoot over the Democrats' stalling tactics on his cabinet nominees. In a procedural move, Democrat senators walked out on committee votes for nominations for Health and Human Services nominee, Tom Price, and Treasury pick, Steve Mnuchin. Democrats also delayed a vote (reportedly only until tomorrow) on Attorney General choice, Jeff Sessions, a position which has been the focus of vigorous debate.

All of this is providing cover for sellers and considerable confusion in global markets, sending the Dow into the red for a third straight day. Since the top tick of 20,125.58 on January 26 (last Thursday), the Dow has dipped 340 points intraday, or about 1.6%.

While it's still not enough to call a trend, it is worrying to some, especially since anybody with even marginal knowledge of stock valuations has to understand just how overvalued equities are, especially under the current changing environment.

Amid the carnage in stocks, gold and silver rallied sharply as the dollar slipped. Bond yields fell, with the 10-year note holding at 2.45%.

It's been often said that Wall Street hates uncertainty, and there's more than enough of that fueling the current dips and dives.

Just in after the close are Apple's (AAPL) earnings for its fiscal 2017 first quarter. Apple had $78.4 billion in gross revenue on expectations of $77.4 billion, and reported earnings of $3.36 per share on expectations of $3.21. IPhone sales were well beyond expectations. Shares of Apple were up more than three percent in after-hours trading, which should provide at least a temporary boost to stock prices tomorrow.

At the Close, Tuesday, 1.31.17:
Dow: 19,864.09, -107.04 (-0.54%)
NASDAQ: 5,614.79, +1.07 (0.02%)
S&P 500: 2,278.87, -2.03 (-0.09%)
NYSE Composite: 11,222.97, +17.73 (0.16%)