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.

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%)