Crude Oil 38.24 -0.26% Gold 1,234.30 -0.11% EUR/USD 1.1382 0.00% 10-Yr Bond 1.79 -2.40% Corn 351.50 0.00% Copper 2.18 +0.05% Silver 15.45 -0.06% Natural Gas 1.97 +0.46% Russell 2000 1,114.03 +0.32% VIX 13.95 +2.88% BATS 1000 20,682.61 0.00% GBP/USD 1.4370 +0.02% USD/JPY 112.4150 -0.12%
Thursday, March 31, 2016
Wednesday, March 30, 2016
Millenials May Be The Last Free Americans
On this day, a conversation was had with a couple of millennials, roughly in their mid-20s, working (or acting like they were working) in a smoke shop.
The conversation - following them chiding a senior citizen for talking about rolling your own and growing your own tobacco while he was buying rolling papers - was inferior, not even worth mentioning, which is why it is being mentioned.
At issue is the future, and the current youth... or, at least a sizable portion of them, want to vote for Bernie Sanders, who promises a $15/hour minimum wage, free college for everybody, and a host of other liberal-ideological non sequiturs that would essentially turn a once-prosperous free-market country (USA) into another stinking hell-hole like much of Europe, or the Middle East, or perhaps, Japan.
The problem lies not with the millennials. They don't know any better. Most of them haven't been around for more than 25 years, meaning that scads of them were in high school during 9-11, and those images are burnt into their psyches, as too the neo-liberal education they've been given, in which they know little about history, economics, language, culture or just about anything that would promote a thriving, free nation.
No, to blame are largely baby boomers, who foisted upon their youth such undistinguished values as participation trophies, non-judgemental attitudes, video games, addiction to cell phones, social media and other claptrap that promotes laziness, sloth, stupidity, class hatred, and decline.
Between the educational system run from afar in Washington, D.C., the Federal Reserve (also a D.C. inhabitant), and a mainstream media intent on propaganda du jour rather than objective journalism, the millennials may just be the last generation of Americans who can claim any level of freedom.
Americans are being taxed, silenced, tabooed, and numbed into a state of slavish devotion to media and government.
As a nation, America is pretty much doomed unless radical changes in the culture are made, and soon. Traditional values would be a welcome relief, but, whenever they are proposed, millennials scoff and pay, and continue down the path to self-destruction.
Thank you, Janet:
S&P 500: 2,068.46, +13.45 (0.65%)
Dow: 17,748.61, +115.50 (0.66%)
NASDAQ: 4,881.76, +35.14 (0.73%)
Crude Oil 38.38 +0.26% Gold 1,229.00 -0.69% EUR/USD 1.1335 +0.36% 10-Yr Bond 1.83 +0.88% Corn 369.25 -1.01% Copper 2.19 -1.02% Silver 15.25 +0.11% Natural Gas 1.99 +0.66% Russell 2000 1,113.52 +0.40% VIX 13.40 -3.04% BATS 1000 20,682.61 0.00% GBP/USD 1.4378 -0.06% USD/JPY 112.4500 -0.22%
The conversation - following them chiding a senior citizen for talking about rolling your own and growing your own tobacco while he was buying rolling papers - was inferior, not even worth mentioning, which is why it is being mentioned.
At issue is the future, and the current youth... or, at least a sizable portion of them, want to vote for Bernie Sanders, who promises a $15/hour minimum wage, free college for everybody, and a host of other liberal-ideological non sequiturs that would essentially turn a once-prosperous free-market country (USA) into another stinking hell-hole like much of Europe, or the Middle East, or perhaps, Japan.
The problem lies not with the millennials. They don't know any better. Most of them haven't been around for more than 25 years, meaning that scads of them were in high school during 9-11, and those images are burnt into their psyches, as too the neo-liberal education they've been given, in which they know little about history, economics, language, culture or just about anything that would promote a thriving, free nation.
No, to blame are largely baby boomers, who foisted upon their youth such undistinguished values as participation trophies, non-judgemental attitudes, video games, addiction to cell phones, social media and other claptrap that promotes laziness, sloth, stupidity, class hatred, and decline.
Between the educational system run from afar in Washington, D.C., the Federal Reserve (also a D.C. inhabitant), and a mainstream media intent on propaganda du jour rather than objective journalism, the millennials may just be the last generation of Americans who can claim any level of freedom.
Americans are being taxed, silenced, tabooed, and numbed into a state of slavish devotion to media and government.
As a nation, America is pretty much doomed unless radical changes in the culture are made, and soon. Traditional values would be a welcome relief, but, whenever they are proposed, millennials scoff and pay, and continue down the path to self-destruction.
Thank you, Janet:
S&P 500: 2,068.46, +13.45 (0.65%)
Dow: 17,748.61, +115.50 (0.66%)
NASDAQ: 4,881.76, +35.14 (0.73%)
Crude Oil 38.38 +0.26% Gold 1,229.00 -0.69% EUR/USD 1.1335 +0.36% 10-Yr Bond 1.83 +0.88% Corn 369.25 -1.01% Copper 2.19 -1.02% Silver 15.25 +0.11% Natural Gas 1.99 +0.66% Russell 2000 1,113.52 +0.40% VIX 13.40 -3.04% BATS 1000 20,682.61 0.00% GBP/USD 1.4378 -0.06% USD/JPY 112.4500 -0.22%
Tuesday, March 29, 2016
Yellen Spikes The Punch Bowl With Dovish Comments
In a midday speech before the Economic Club of New York, Janet Yellen's comments included comments concerning weak growth abroad, low oil prices and uncertainty over China, saying that the Federal Reserve would proceed "cautiously" on further rate hikes this year.
At their March meet two weeks ago, the FOMC of the Fed lowered the number of expected rate hikes from four to two for 2016, and Yellen's speech today was the first public commentary form the Fed Chair since that time.
Other members had voiced opinions which could be considered mildly hawkish, but Yellen was decidedly dovish in today's prepared remarks.
Obviously, Wall Street was rather pleased with the Fed Chair's stock market elixir, sending the S&P 500 to its highest level of 2016. Stocks ended a five-week streak of positive gains with a lower close last week, but Yellen and her friends at the Fed apparently didn't want the market to turn down again.
With the kind of policy the Fed has been brandishing for the past seven years, stocks should be headed back toward all-time highs in due time, likely within the next few months. With the Dow running up a spectacular 2000 points in the last six-plus weeks, the DJIA stands just more than 700 points from the record set last year (May: 18,351.36).
The S&P needs to gain another 80 points to surpass the all-time high of last May (2134.72).
Party on, Janet!
S&P 500: 2,055.01, +17.96 (0.88%)
Dow: 17,633.11, +97.72 (0.56%)
NASDAQ: 4,846.62, +79.84 (1.67%)
Crude Oil 38.49 -2.28% Gold 1,242.50 +1.84% EUR/USD 1.1293 +0.87% 10-Yr Bond 1.81 -2.99% Corn 372.25 +0.47% Copper 2.21 -1.49% Silver 15.36 +1.12% Natural Gas 1.98 +2.38% Russell 2000 1,109.08 +2.67% VIX 13.82 -9.32% BATS 1000 20,682.61 0.00% GBP/USD 1.4387 +0.92% USD/JPY 112.6685 -0.69%
At their March meet two weeks ago, the FOMC of the Fed lowered the number of expected rate hikes from four to two for 2016, and Yellen's speech today was the first public commentary form the Fed Chair since that time.
Other members had voiced opinions which could be considered mildly hawkish, but Yellen was decidedly dovish in today's prepared remarks.
Obviously, Wall Street was rather pleased with the Fed Chair's stock market elixir, sending the S&P 500 to its highest level of 2016. Stocks ended a five-week streak of positive gains with a lower close last week, but Yellen and her friends at the Fed apparently didn't want the market to turn down again.
With the kind of policy the Fed has been brandishing for the past seven years, stocks should be headed back toward all-time highs in due time, likely within the next few months. With the Dow running up a spectacular 2000 points in the last six-plus weeks, the DJIA stands just more than 700 points from the record set last year (May: 18,351.36).
The S&P needs to gain another 80 points to surpass the all-time high of last May (2134.72).
Party on, Janet!
S&P 500: 2,055.01, +17.96 (0.88%)
Dow: 17,633.11, +97.72 (0.56%)
NASDAQ: 4,846.62, +79.84 (1.67%)
Crude Oil 38.49 -2.28% Gold 1,242.50 +1.84% EUR/USD 1.1293 +0.87% 10-Yr Bond 1.81 -2.99% Corn 372.25 +0.47% Copper 2.21 -1.49% Silver 15.36 +1.12% Natural Gas 1.98 +2.38% Russell 2000 1,109.08 +2.67% VIX 13.82 -9.32% BATS 1000 20,682.61 0.00% GBP/USD 1.4387 +0.92% USD/JPY 112.6685 -0.69%
Monday, March 28, 2016
Provable Nixed Markets: VIX or Natural Gas, Take Your Pick
Noting that markets are in a near-trance module of late (thank you, Janet Yellen and central bankers everywhere), it has occurred to financial followers that possibly one could track the big movers of the day in an effort to ferret out any semblance of a pattern in the current conundrum.
With that, taken from the list below are the (un)usual suspects, the venerable VIX, which moved up by 3.39% on the session, and natty natural gas, ahead by 2.71%.
Actually, these moves tells nobody nothing (or, perhaps, everybody everything they need to know), since the VIX, a supposed measure of volatility, moved in such a manner as to suggest, well, volatility, when none existed.
As for natural gas, the price alone dictates large moves in percentage terms. With the price generally below two dollars for the past two years, a twenty-cent move is automatically good for 10%. Thus, today's gain of 2.71% was the result of a price move of roughly five cents. So, just because it is expected to be a little cooler than normal in Nashua, NH, next week, it does not automatically imply that the price of natural gas will be necessarily higher, nor does it mean that the price will stay there for any reasonable expectation of time.
Thus, the discovery du jour isn't so much based on any magic or even logical formula, but simple understanding of markets and central bank control through various proxies: markets are in a semi-permanent state of broken, and there's little any concerted effort by any group of individuals, investors, or fund managers can do about it. A volatility index moves when there is no volatility present, and a five-cent move in the price of natural gas won't set the commodity world afire.
In just a few words, these are not real markets, and you only need to have your eyes open to realize that.
Today's Laughable, Lamentable Louse:
S&P 500: 2,037.05, +1.11 (0.05%)
Dow: 17,535.39, +19.66 (0.11%)
NASDAQ: 4,766.79, -6.72 (0.14%)
Crude Oil 39.39 -0.18% Gold 1,220.10 -0.12% EUR/USD 1.1196 +0.28% 10-Yr Bond 1.87 -1.58% Corn 371.25 +0.34% Copper 2.24 +0.63% Silver 15.20 +0.01% Natural Gas 1.93 +2.71% Russell 2000 1,080.23 +0.06% VIX 15.24 +3.39% BATS 1000 20,682.61 0.00% GBP/USD 1.4255 +0.92% USD/JPY 113.3830 +0.08%
With that, taken from the list below are the (un)usual suspects, the venerable VIX, which moved up by 3.39% on the session, and natty natural gas, ahead by 2.71%.
Actually, these moves tells nobody nothing (or, perhaps, everybody everything they need to know), since the VIX, a supposed measure of volatility, moved in such a manner as to suggest, well, volatility, when none existed.
As for natural gas, the price alone dictates large moves in percentage terms. With the price generally below two dollars for the past two years, a twenty-cent move is automatically good for 10%. Thus, today's gain of 2.71% was the result of a price move of roughly five cents. So, just because it is expected to be a little cooler than normal in Nashua, NH, next week, it does not automatically imply that the price of natural gas will be necessarily higher, nor does it mean that the price will stay there for any reasonable expectation of time.
Thus, the discovery du jour isn't so much based on any magic or even logical formula, but simple understanding of markets and central bank control through various proxies: markets are in a semi-permanent state of broken, and there's little any concerted effort by any group of individuals, investors, or fund managers can do about it. A volatility index moves when there is no volatility present, and a five-cent move in the price of natural gas won't set the commodity world afire.
In just a few words, these are not real markets, and you only need to have your eyes open to realize that.
Today's Laughable, Lamentable Louse:
S&P 500: 2,037.05, +1.11 (0.05%)
Dow: 17,535.39, +19.66 (0.11%)
NASDAQ: 4,766.79, -6.72 (0.14%)
Crude Oil 39.39 -0.18% Gold 1,220.10 -0.12% EUR/USD 1.1196 +0.28% 10-Yr Bond 1.87 -1.58% Corn 371.25 +0.34% Copper 2.24 +0.63% Silver 15.20 +0.01% Natural Gas 1.93 +2.71% Russell 2000 1,080.23 +0.06% VIX 15.24 +3.39% BATS 1000 20,682.61 0.00% GBP/USD 1.4255 +0.92% USD/JPY 113.3830 +0.08%
Friday, March 25, 2016
Durable Goods Not So Good; Stocks End Five-Week-Long Rally; GDP Is Bogus
Markets are closed on Friday in observance of Good Friday (who said we weren't a religious nation?), so the paltry returns on equites ended a dull week in the red, the first time a week has ended negative since mid-February.
Prior to the open on Thursday, durable goods for February were released and the numbers were far from encouraging.
Durable Goods New Orders (Ex-Transports) fell 0.5% YoY, extending its losing streak to 13 months. All segments of the durable goods report saw negative month-over-month direction with headline -2.8%. Prior data was revised lower, Capital goods orders fell more than expected (-1.8% MoM).
Durable goods new orders down -2.8%, exp. -3.0%; prior revised down to 4.2% for Jan. from 4.7%
New orders ex-trans. down 1%, Exp. -0.3%; prior revised to 1.2% from 1.7%
Capital goods orders ex-aircraft down 1.8%, Exp. -0.5%, prior revised to 3.1% from 3.4%
Capital goods shipments ex-aircraft down 1.1%, Exp. +0.3%, prior revised to -1.3% from -0.4%
That was about all the market could stand and not puke up more gains.
On Friday, with markets closed, the government released the final estimate for 4th quarter 2015 GDP, posting a figure that was above all estimates, a suspicious gain of 1.4%. This spurious number followed a first estimate of 0.7% in January and a second estimate at an even 1.0% in February. Apparently, everything is improving in the alternate reality that is Washington D.C. (please, please, indict Hillary). It has been pointed out by various writers that GDP is a poor measurement of the health of an economy. Such as this current reading, which is heavily influenced by health care costs and soaring rents, in addition to the hedonic adjustments and other blunt instruments of deception, the numbers end up meaning little in terms of the common man, woman or family.
Lastly, we'd like to share this fine post from the blog Viable Opposition, with readers of Money Daily:
The Long Wave and the Failure of Central Banks. Highly recommended reading and a great chart at the end.
Posts such as this - and the general appeal of the blog overall - points up why the establishment is failing and fearful of the rising tide of populism. Bloggers don't get paid for appearances on CNBC or Bloomberg but their views and opinions are often superior, better researched, unbiased and non-political than what the mainstream media tries to sell as gospel.
God (or Donald Trump) save us.
For the week:
Dow: -86.57 (0.49%)
S&P 500: -13.64 (0.67%)
NASDAQ: -22.14 (0.46%)
Thursday's Finish:
S&P 500: 2,035.94, -0.77 (0.04%)
Dow: 17,515.73, +13.14 (0.08%)
NASDAQ: 4,773.50, +4.64 (0.10%)
Crude Oil 39.63 -0.40% Gold 1,217.20 -0.56% EUR/USD 1.1180 -0.02% 10-Yr Bond 1.90 +1.33% Corn 369.25 +0.20% Copper 2.24 -0.02% Silver 15.19 -0.57% Natural Gas 1.89 +1.12% Russell 2000 1,079.54 +0.36% VIX 14.73 -1.41% BATS 1000 20,682.61 0.00% GBP/USD 1.4152 +0.23% USD/JPY 112.8450 +0.42%
Prior to the open on Thursday, durable goods for February were released and the numbers were far from encouraging.
Durable Goods New Orders (Ex-Transports) fell 0.5% YoY, extending its losing streak to 13 months. All segments of the durable goods report saw negative month-over-month direction with headline -2.8%. Prior data was revised lower, Capital goods orders fell more than expected (-1.8% MoM).
Durable goods new orders down -2.8%, exp. -3.0%; prior revised down to 4.2% for Jan. from 4.7%
New orders ex-trans. down 1%, Exp. -0.3%; prior revised to 1.2% from 1.7%
Capital goods orders ex-aircraft down 1.8%, Exp. -0.5%, prior revised to 3.1% from 3.4%
Capital goods shipments ex-aircraft down 1.1%, Exp. +0.3%, prior revised to -1.3% from -0.4%
That was about all the market could stand and not puke up more gains.
On Friday, with markets closed, the government released the final estimate for 4th quarter 2015 GDP, posting a figure that was above all estimates, a suspicious gain of 1.4%. This spurious number followed a first estimate of 0.7% in January and a second estimate at an even 1.0% in February. Apparently, everything is improving in the alternate reality that is Washington D.C. (please, please, indict Hillary). It has been pointed out by various writers that GDP is a poor measurement of the health of an economy. Such as this current reading, which is heavily influenced by health care costs and soaring rents, in addition to the hedonic adjustments and other blunt instruments of deception, the numbers end up meaning little in terms of the common man, woman or family.
Lastly, we'd like to share this fine post from the blog Viable Opposition, with readers of Money Daily:
The Long Wave and the Failure of Central Banks. Highly recommended reading and a great chart at the end.
Posts such as this - and the general appeal of the blog overall - points up why the establishment is failing and fearful of the rising tide of populism. Bloggers don't get paid for appearances on CNBC or Bloomberg but their views and opinions are often superior, better researched, unbiased and non-political than what the mainstream media tries to sell as gospel.
God (or Donald Trump) save us.
For the week:
Dow: -86.57 (0.49%)
S&P 500: -13.64 (0.67%)
NASDAQ: -22.14 (0.46%)
Thursday's Finish:
S&P 500: 2,035.94, -0.77 (0.04%)
Dow: 17,515.73, +13.14 (0.08%)
NASDAQ: 4,773.50, +4.64 (0.10%)
Crude Oil 39.63 -0.40% Gold 1,217.20 -0.56% EUR/USD 1.1180 -0.02% 10-Yr Bond 1.90 +1.33% Corn 369.25 +0.20% Copper 2.24 -0.02% Silver 15.19 -0.57% Natural Gas 1.89 +1.12% Russell 2000 1,079.54 +0.36% VIX 14.73 -1.41% BATS 1000 20,682.61 0.00% GBP/USD 1.4152 +0.23% USD/JPY 112.8450 +0.42%
Wednesday, March 23, 2016
Topped Out? Stocks, Oil Fall On Stronger Dollar
Concerned over fears that the Fed might actually raise rates at the April FOMC meeting, investors took some long-overdue profits after five straight weeks of gains on the S&P and Dow Jones Industrials.
Nearly everything else was in the red on the day as the dollar strengthened against major currencies, most notably the British Pound, sent reeling over fears that UK residents might vote - in an upcoming June referendum - for Britain to leave the EU, a new poll showed.
Such cracks in the facade of the status quo are troubling for elite investors clinging to their one and two-percent dividends in stocks and bonds while the rest of the world crumbles under the weight of central bank intransigence.
Adding to the worries are the recent attacks by ISIS in the heart of the EU, Brussels, where Tuesday's terrorist bombings occurred at the airport and in a subway station just blocks from the EU parliament building.
Gold, silver, bond yields and oil also fell sharply on the day as a reassessment of priorities seems to be underway. The rout of Hillary Clinton by Idaho and Utah by insurgent candidate, Bernie Sanders, also weighed. Ted Cruz and Donald Trump split the vote on Tuesday, as Cruz captured all delegates in Utah and Trump took home the prize in Arizona's winner-take-all primary.
Oil stockpiles expanded for a fifth straight week, as the US glut expanded by 9.4 million barrels last week to 532.5 million barrels, an amount triple what analysts had expected.
While one day's slipshod results may not be nearly enough data to imply anything other than market noise, the alternative argument figures that, having made back all the losses for the year, it's time to book early profits and head for safer havens. Bonds, where yields fall as their price improves, seems to be wagging the tail of the stock market at present. The benchmark 10-year note has rallied for the better part of a month, though it still remains below two percent since dipping under that line on February 1st.
With the rest of the developed world embracing negative interest rates at the short end of the curve (though Japan's now-inverted curve has the ten-year JGB lower than the overnight rate), the Us continues to try to buck the trend by implying rate hikes ahead.
Nothing could be further from the truth. The Fed has already seen what a mere 25 basis point hike in the federal funds rate produced - a sharp decline in stock prices - and they're not about to embark upon that trip now that those losses have been retaken.
As many analysts have pointed out, the Fed is trapped, with an economy not strong enough to warrant rate increases and a base rate too low to offer any resistance to recessionary or deflationary forces. Their only resource available in the case that the economy creaks and cracks is negative rates, a subject they have already publicly broached.
Today's Setback:
S&P 500: 2,036.71, -13.09 (0.64%)
Dow: 17,502.59, -79.98 (0.45%)
NASDAQ: 4,768.86, -52.80 (1.10%)
Crude Oil 39.80 -3.98% Gold 1,220.80 -2.23% EUR/USD 1.1182 -0.32% 10-Yr Bond 1.88 -3.10% Corn 367.25 -0.74% Copper 2.24 -2.23% Silver 15.27 -3.90% Natural Gas 1.78 -4.29% Russell 2000 1,075.70 -1.97% VIX 14.94 +5.43% BATS 1000 20,682.61 0.00% GBP/USD 1.4116 -0.71% USD/JPY 112.4155 +0.07%
Nearly everything else was in the red on the day as the dollar strengthened against major currencies, most notably the British Pound, sent reeling over fears that UK residents might vote - in an upcoming June referendum - for Britain to leave the EU, a new poll showed.
Such cracks in the facade of the status quo are troubling for elite investors clinging to their one and two-percent dividends in stocks and bonds while the rest of the world crumbles under the weight of central bank intransigence.
Adding to the worries are the recent attacks by ISIS in the heart of the EU, Brussels, where Tuesday's terrorist bombings occurred at the airport and in a subway station just blocks from the EU parliament building.
Gold, silver, bond yields and oil also fell sharply on the day as a reassessment of priorities seems to be underway. The rout of Hillary Clinton by Idaho and Utah by insurgent candidate, Bernie Sanders, also weighed. Ted Cruz and Donald Trump split the vote on Tuesday, as Cruz captured all delegates in Utah and Trump took home the prize in Arizona's winner-take-all primary.
Oil stockpiles expanded for a fifth straight week, as the US glut expanded by 9.4 million barrels last week to 532.5 million barrels, an amount triple what analysts had expected.
While one day's slipshod results may not be nearly enough data to imply anything other than market noise, the alternative argument figures that, having made back all the losses for the year, it's time to book early profits and head for safer havens. Bonds, where yields fall as their price improves, seems to be wagging the tail of the stock market at present. The benchmark 10-year note has rallied for the better part of a month, though it still remains below two percent since dipping under that line on February 1st.
With the rest of the developed world embracing negative interest rates at the short end of the curve (though Japan's now-inverted curve has the ten-year JGB lower than the overnight rate), the Us continues to try to buck the trend by implying rate hikes ahead.
Nothing could be further from the truth. The Fed has already seen what a mere 25 basis point hike in the federal funds rate produced - a sharp decline in stock prices - and they're not about to embark upon that trip now that those losses have been retaken.
As many analysts have pointed out, the Fed is trapped, with an economy not strong enough to warrant rate increases and a base rate too low to offer any resistance to recessionary or deflationary forces. Their only resource available in the case that the economy creaks and cracks is negative rates, a subject they have already publicly broached.
Today's Setback:
S&P 500: 2,036.71, -13.09 (0.64%)
Dow: 17,502.59, -79.98 (0.45%)
NASDAQ: 4,768.86, -52.80 (1.10%)
Crude Oil 39.80 -3.98% Gold 1,220.80 -2.23% EUR/USD 1.1182 -0.32% 10-Yr Bond 1.88 -3.10% Corn 367.25 -0.74% Copper 2.24 -2.23% Silver 15.27 -3.90% Natural Gas 1.78 -4.29% Russell 2000 1,075.70 -1.97% VIX 14.94 +5.43% BATS 1000 20,682.61 0.00% GBP/USD 1.4116 -0.71% USD/JPY 112.4155 +0.07%
Stocks Settled In Aftermath of Brussels Terror
The terror bombings at the Brussels airport and in the subway system kept a lid on stocks Tuesday.
S&P 500: 2,049.80, -1.80 (0.09%)
Dow: 17,582.57, -41.30 (0.23%)
NASDAQ: 4,821.66, +12.79 (0.27%)
Crude Oil 41.22 -0.72% Gold 1,248.80 +0.02% EUR/USD 1.1217 -0.22% 10-Yr Bond 1.94 +0.62% Corn 370.00 +0.14% Copper 2.29 +0.07% Silver 15.90 +0.09% Natural Gas 1.86 +1.91% Russell 2000 1,097.34 -0.11% VIX 14.17 +2.76% BATS 1000 20,682.61 0.00% GBP/USD 1.4214 -1.09% USD/JPY 112.3750 +0.21%
S&P 500: 2,049.80, -1.80 (0.09%)
Dow: 17,582.57, -41.30 (0.23%)
NASDAQ: 4,821.66, +12.79 (0.27%)
Crude Oil 41.22 -0.72% Gold 1,248.80 +0.02% EUR/USD 1.1217 -0.22% 10-Yr Bond 1.94 +0.62% Corn 370.00 +0.14% Copper 2.29 +0.07% Silver 15.90 +0.09% Natural Gas 1.86 +1.91% Russell 2000 1,097.34 -0.11% VIX 14.17 +2.76% BATS 1000 20,682.61 0.00% GBP/USD 1.4214 -1.09% USD/JPY 112.3750 +0.21%
Monday, March 21, 2016
Sluggish Beginning To Week Has Stocks Cautious, Business Stalled
With little information upon which to base trading other than the recent dovish sentiments expressed by central banks, stocks in the US moved in a tight trading range to start the week.
The lack of volatility was something of a surprise, given that investors and speculators have been given the green light by Yellen and Co., though perhaps upon closer inspection, getting ahead of breakeven for the year has some of the more seasoned veteran traders taking a pause.
By just about any metric, stocks on the S&P and NASDAQ are highly overvalued, with most P/E estimates averaging in the low 20s on both exchanges. Dow Industrials are just a little less highly-valued, though some, such as Caterpillar (CAT) are showing severe signs of globalization stress.
CATs problems remain on the revenue side of the ledger, as the company hasn't met targets since the financial calamity of 2008. Global growth being as slow as it has been - and especially such in mining, infrastructure, and major construction, CATs bailiwick - the company is simply unable to deliver results like those during the housing and credit bubble.
That's largely the case for major industrial companies, which have weathered the storm via stock buybacks, close attention to labor levels, and an outright strike on capital improvements. While this short-term strategy may be worthwhile from quarter to quarter, in the long run, these companies have to get back to growing and maintaining their core business interests. Uncertainty - despite the easy credit conditions which are prevalent - concerning global monetary policy is keeping the lid on capital investment.
Worse yet, and this is not seen in any of the macro-metrics, is the paucity of new business development, either in the way of spin-offs or entrepreneurial endeavors. Small business, saddled by an onerous regulatory regime, high taxation and pressure on state legislatures to increase minimum wages, is stifling business formation.
These conditions cannot maintain for too long, lest the markets revolt, consumers retrench, and recession becomes reality.
Today's impish gains:
S&P 500: 2,051.60, +2.02 (0.10%)
Dow: 17,623.87, +21.57 (0.12%)
NASDAQ: 4,808.87, +13.23 (0.28%)
Crude Oil 41.68 +1.31% Gold 1,244.30 -0.80% EUR/USD 1.1245 -0.20% 10-Yr Bond 1.92 +2.78% Corn 369.00 +0.54% Copper 2.29 +0.31% Silver 15.86 +0.31% Natural Gas 1.82 -4.72% Russell 2000 1,098.58 -0.28% VIX 13.79 -1.64% BATS 1000 20,677.17 0.00% GBP/USD 1.4373 -0.62% USD/JPY 111.8770 +0.34%
The lack of volatility was something of a surprise, given that investors and speculators have been given the green light by Yellen and Co., though perhaps upon closer inspection, getting ahead of breakeven for the year has some of the more seasoned veteran traders taking a pause.
By just about any metric, stocks on the S&P and NASDAQ are highly overvalued, with most P/E estimates averaging in the low 20s on both exchanges. Dow Industrials are just a little less highly-valued, though some, such as Caterpillar (CAT) are showing severe signs of globalization stress.
CATs problems remain on the revenue side of the ledger, as the company hasn't met targets since the financial calamity of 2008. Global growth being as slow as it has been - and especially such in mining, infrastructure, and major construction, CATs bailiwick - the company is simply unable to deliver results like those during the housing and credit bubble.
That's largely the case for major industrial companies, which have weathered the storm via stock buybacks, close attention to labor levels, and an outright strike on capital improvements. While this short-term strategy may be worthwhile from quarter to quarter, in the long run, these companies have to get back to growing and maintaining their core business interests. Uncertainty - despite the easy credit conditions which are prevalent - concerning global monetary policy is keeping the lid on capital investment.
Worse yet, and this is not seen in any of the macro-metrics, is the paucity of new business development, either in the way of spin-offs or entrepreneurial endeavors. Small business, saddled by an onerous regulatory regime, high taxation and pressure on state legislatures to increase minimum wages, is stifling business formation.
These conditions cannot maintain for too long, lest the markets revolt, consumers retrench, and recession becomes reality.
Today's impish gains:
S&P 500: 2,051.60, +2.02 (0.10%)
Dow: 17,623.87, +21.57 (0.12%)
NASDAQ: 4,808.87, +13.23 (0.28%)
Crude Oil 41.68 +1.31% Gold 1,244.30 -0.80% EUR/USD 1.1245 -0.20% 10-Yr Bond 1.92 +2.78% Corn 369.00 +0.54% Copper 2.29 +0.31% Silver 15.86 +0.31% Natural Gas 1.82 -4.72% Russell 2000 1,098.58 -0.28% VIX 13.79 -1.64% BATS 1000 20,677.17 0.00% GBP/USD 1.4373 -0.62% USD/JPY 111.8770 +0.34%
Sunday, March 20, 2016
Coordinated Central Bank Easing Leads to Higher Stock Prices
First came the BOJ.
Then the ECB.
And, just this past Wednesday, the Fed chimed into the global monetary easing chorus with no increase in the federal funds rate, and a solid statement that the FOMC would likely only increase rates twice in 2016, for a paltry 1/2 percent increase.
Such a move would put the rate at 0.75 to one percent by December of this year, or, put another way, just a touch lower than the Greenspan put of the early 2000s.
Those unfamiliar with recent history would not understand how Greenspan's easy rate policy led to various mal-investments, not the least of which were in the housing market, which led to a boom and then a bust and the 2008 financial crisis.
So, what the central bankers are telling us in a unified voice, is that they'll gladly take the risk of another massive financial implosion in order to keep the global fiat currency regime intact.
So far, they're doing quite well. There've been no mass protests, riots, or other noticeable social uprisings in the dominant economies of the developed nations, and, while detractors will proclaim that this regime of low (and even negative) interest rates cannot continue without devastating consequences, the world keeps spinning, the rich get richer and the rest of us carry on in quiet, medieval fashion, mumbling vaguely about unfairness and impropriety.
Elsewhere, stock owners are popping the champagne corks and drinking lustily from the font of the Fed, the ECB and the Bank of Japan, especially in the USA, which just completed one of the quickest and most violent market reversals in recorded history, bringing the Dow Jones Industrials and S&P 500 back to breakeven for the year.
In just over a month's time, the Dow has rallied more than 2,000 points off the mid-February lows. The S&P took off from 1810.10 to close at 2049.58 on Friday, an impressive, 13.23% move. Who said timing wasn't everything?
Buy and hold will be the order of the day, it seems, as long as the central bankers retain complete control over every market, everywhere. When that changes, nobody knows, though many still try. The piper, it appears, will be paid at a later date, likely of the central banks' choosing.
For an overview of the central bank monetary madness, and possible preview of what's ahead, the Telegraph offers keen insight with:
Central banks are already doing the unthinkable -- you just don't know it.
For the week:
DOW: +388.99 (2.26%)
S&P 500: +27.39 (1.35%)
NASDAQ: +47.18 (0.99%)
Friday's Fun Fed Figures:
S&P 500: 2,049.58, +8.99 (0.44%)
Dow: 17,602.30, +120.81 (0.69%)
NASDAQ: 4,795.65, +20.66 (0.43%)
Crude Oil 41.13 -1.27% Gold 1,256.00 -0.71% EUR/USD 1.1268 -0.02% 10-Yr Bond 1.8710 -1.68% Corn 366.50 -0.54% Copper 2.29 -0.28% Silver 15.82 -1.30% Natural Gas 1.89 -2.22% Russell 2000 1,101.67 +0.95% VIX 14.02 -2.91% BATS 1000 20,677.17 0.00% GBP/USD 1.4471 -0.05% USD/JPY 111.5525 0.00%
Then the ECB.
And, just this past Wednesday, the Fed chimed into the global monetary easing chorus with no increase in the federal funds rate, and a solid statement that the FOMC would likely only increase rates twice in 2016, for a paltry 1/2 percent increase.
Such a move would put the rate at 0.75 to one percent by December of this year, or, put another way, just a touch lower than the Greenspan put of the early 2000s.
Those unfamiliar with recent history would not understand how Greenspan's easy rate policy led to various mal-investments, not the least of which were in the housing market, which led to a boom and then a bust and the 2008 financial crisis.
So, what the central bankers are telling us in a unified voice, is that they'll gladly take the risk of another massive financial implosion in order to keep the global fiat currency regime intact.
So far, they're doing quite well. There've been no mass protests, riots, or other noticeable social uprisings in the dominant economies of the developed nations, and, while detractors will proclaim that this regime of low (and even negative) interest rates cannot continue without devastating consequences, the world keeps spinning, the rich get richer and the rest of us carry on in quiet, medieval fashion, mumbling vaguely about unfairness and impropriety.
Elsewhere, stock owners are popping the champagne corks and drinking lustily from the font of the Fed, the ECB and the Bank of Japan, especially in the USA, which just completed one of the quickest and most violent market reversals in recorded history, bringing the Dow Jones Industrials and S&P 500 back to breakeven for the year.
In just over a month's time, the Dow has rallied more than 2,000 points off the mid-February lows. The S&P took off from 1810.10 to close at 2049.58 on Friday, an impressive, 13.23% move. Who said timing wasn't everything?
Buy and hold will be the order of the day, it seems, as long as the central bankers retain complete control over every market, everywhere. When that changes, nobody knows, though many still try. The piper, it appears, will be paid at a later date, likely of the central banks' choosing.
For an overview of the central bank monetary madness, and possible preview of what's ahead, the Telegraph offers keen insight with:
Central banks are already doing the unthinkable -- you just don't know it.
For the week:
DOW: +388.99 (2.26%)
S&P 500: +27.39 (1.35%)
NASDAQ: +47.18 (0.99%)
Friday's Fun Fed Figures:
S&P 500: 2,049.58, +8.99 (0.44%)
Dow: 17,602.30, +120.81 (0.69%)
NASDAQ: 4,795.65, +20.66 (0.43%)
Crude Oil 41.13 -1.27% Gold 1,256.00 -0.71% EUR/USD 1.1268 -0.02% 10-Yr Bond 1.8710 -1.68% Corn 366.50 -0.54% Copper 2.29 -0.28% Silver 15.82 -1.30% Natural Gas 1.89 -2.22% Russell 2000 1,101.67 +0.95% VIX 14.02 -2.91% BATS 1000 20,677.17 0.00% GBP/USD 1.4471 -0.05% USD/JPY 111.5525 0.00%
Thursday, March 17, 2016
Dow Ends Day In Green for 2016
Call it the luck of the Irish, or maybe the magic of Janet Yellen's Fed, but the Dow Jones Industrials ended the day up large, and in the green for 2016. The S&P is just five points away from a positive close for the year.
The NASDAQ needs to get closer to 5000 for breakeven for the year.
That's it. Funny money.
Today's closing quotes:
S&P 500: 2,040.59, +13.37 (0.66%)
Dow: 17,481.49, +155.73 (0.90%)
NASDAQ: 4,774.99, +11.02 (0.23%)
Crude Oil 41.67 +4.17% Gold 1,258.60 +2.34% EUR/USD 1.1318 +0.94% 10-Yr Bond 1.9030 -1.81% Corn 367.75 -0.14% Copper 2.29 +2.44% Silver 15.94 +4.70% Natural Gas 1.93 +3.59% Russell 2000 1,091.25 +1.56% VIX 14.44 -3.67% BATS 1000 20,682.61 0.00% GBP/USD 1.4473 +1.59% USD/JPY 111.3950 -1.23%
The NASDAQ needs to get closer to 5000 for breakeven for the year.
That's it. Funny money.
Today's closing quotes:
S&P 500: 2,040.59, +13.37 (0.66%)
Dow: 17,481.49, +155.73 (0.90%)
NASDAQ: 4,774.99, +11.02 (0.23%)
Crude Oil 41.67 +4.17% Gold 1,258.60 +2.34% EUR/USD 1.1318 +0.94% 10-Yr Bond 1.9030 -1.81% Corn 367.75 -0.14% Copper 2.29 +2.44% Silver 15.94 +4.70% Natural Gas 1.93 +3.59% Russell 2000 1,091.25 +1.56% VIX 14.44 -3.67% BATS 1000 20,682.61 0.00% GBP/USD 1.4473 +1.59% USD/JPY 111.3950 -1.23%
Wednesday, March 16, 2016
FOMC Leaves Rates Unchanged, Turns More Dovish; Wedbush: Stocks Crash If Trump Wins
Stock junkies got their fix on Wall Street today, as the FOMC not only kept the federal funds rate unchanged at 1/4 to 1/2%, but reversed course on their planned four rate hikes in 2016, reducing the outlook to two, which, in the nuanced parlance that can only come from crony central bankers, means one more rate hike in 2016, likely not until September, at the earliest.
Talking heads from the various analyst camps spoke of a potential June hike, though, judging from the Fed's past actions, later, rather than sooner, would be the more likely timing. With US general elections coming in November, the Fed - no longer an altruistic entity, but a purely political one - a September rate cut would produce maximum chaos, which is surely the ongoing plan.
Not to put too cynical a spin on it, but the Federal Reserve has become completely politicized under Janet Yellen, with plenty of assistance and guidance by the mother hens which dominate policy from the White House. Employing high-sounding verbiage and the trappings and aura of majesty, the Fed has managed to hypnotize global markets and US citizens with their incredible blend of experimental policy and garbled, mangled language.
What the Fed has accomplished is nothing more than a furtherance of the ongoing wealth transfer from the distressed middle and lower classes to the uber-wealthy, while shutting out innovation, creativity and entrepreneurial spirit.
In essence, they are the ultimate destroyer of the American economy via globalist intentions and actions.
With their latest salvo of lick-spittle jawboning, they perpetuate the counterfeit of the US dollar and the fraud on savers which began in earnest with the financial collapse in 2008-09.
Stock promoters couldn't be happier, sending the major indices to their highest points since early January. With no impediments standing between them and median price-earnings ratios approaching pre-1929 levels, stocks are poised to completely erase the losses incurred through the first six weeks of the year.
With today's close, the Dow and S&P are within one strong day of getting even for the annum; the NASDAQ has a little more work to do.
December 31, 2015 closing prices:
Dow: 17,425.03
S&P: 2,043.94
NASDAQ: 5,007.41
Today's Fed-jacking:
S&P 500: 2,027.22, +11.29 (0.56%)
Dow: 17,325.76, +74.23 (0.43%)
NASDAQ: 4,763.97, +35.30 (0.75%)
Crude Oil 38.49 +5.92% Gold 1,264.00 +2.68% EUR/USD 1.1227 +1.08% 10-Yr Bond 1.9380 -1.07% Corn 368.25 -0.07% Copper 2.25 +0.94% Silver 15.64 +2.48% Natural Gas 1.87 +0.97% Russell 2000 1,074.51 +0.74% VIX 14.99 -10.99% BATS 1000 20,682.61 0.00% GBP/USD 1.4269 +0.79% USD/JPY 112.5475 -0.53%
In what has to be the #1 hit piece on Donald Trump from the Wall Street crony capitalists - via Yahoo! and CNBC, Wedbush's director of equity sales, Ian Winer (shouldn't that be I'm a Whiner?) says stocks will crash 50% if Trump is elected president.
Here's a link to the article and video (and some easy comments), and if you just want the video, go here!
CNBC, the #1 financial bull--it network, doesn't want to mention that stocks should fall 50% anyhow, and the entire economy will be gutted if Hillary Clinton or Bernie Sanders wins the election.
https://screen.yahoo.com/trump-catastrophic-stocks-wedbush-214000793.html
One of the better comments, by commentator takebreathandthink:
Inquiring minds want to know why Mr. Winer didn't call for a 60% or 80% crash. After all, if you're going to trash someone, why go just halfway?
Vote Trump. Wall Street hates him.
Talking heads from the various analyst camps spoke of a potential June hike, though, judging from the Fed's past actions, later, rather than sooner, would be the more likely timing. With US general elections coming in November, the Fed - no longer an altruistic entity, but a purely political one - a September rate cut would produce maximum chaos, which is surely the ongoing plan.
Not to put too cynical a spin on it, but the Federal Reserve has become completely politicized under Janet Yellen, with plenty of assistance and guidance by the mother hens which dominate policy from the White House. Employing high-sounding verbiage and the trappings and aura of majesty, the Fed has managed to hypnotize global markets and US citizens with their incredible blend of experimental policy and garbled, mangled language.
What the Fed has accomplished is nothing more than a furtherance of the ongoing wealth transfer from the distressed middle and lower classes to the uber-wealthy, while shutting out innovation, creativity and entrepreneurial spirit.
In essence, they are the ultimate destroyer of the American economy via globalist intentions and actions.
With their latest salvo of lick-spittle jawboning, they perpetuate the counterfeit of the US dollar and the fraud on savers which began in earnest with the financial collapse in 2008-09.
Stock promoters couldn't be happier, sending the major indices to their highest points since early January. With no impediments standing between them and median price-earnings ratios approaching pre-1929 levels, stocks are poised to completely erase the losses incurred through the first six weeks of the year.
With today's close, the Dow and S&P are within one strong day of getting even for the annum; the NASDAQ has a little more work to do.
December 31, 2015 closing prices:
Dow: 17,425.03
S&P: 2,043.94
NASDAQ: 5,007.41
Today's Fed-jacking:
S&P 500: 2,027.22, +11.29 (0.56%)
Dow: 17,325.76, +74.23 (0.43%)
NASDAQ: 4,763.97, +35.30 (0.75%)
Crude Oil 38.49 +5.92% Gold 1,264.00 +2.68% EUR/USD 1.1227 +1.08% 10-Yr Bond 1.9380 -1.07% Corn 368.25 -0.07% Copper 2.25 +0.94% Silver 15.64 +2.48% Natural Gas 1.87 +0.97% Russell 2000 1,074.51 +0.74% VIX 14.99 -10.99% BATS 1000 20,682.61 0.00% GBP/USD 1.4269 +0.79% USD/JPY 112.5475 -0.53%
In what has to be the #1 hit piece on Donald Trump from the Wall Street crony capitalists - via Yahoo! and CNBC, Wedbush's director of equity sales, Ian Winer (shouldn't that be I'm a Whiner?) says stocks will crash 50% if Trump is elected president.
Here's a link to the article and video (and some easy comments), and if you just want the video, go here!
CNBC, the #1 financial bull--it network, doesn't want to mention that stocks should fall 50% anyhow, and the entire economy will be gutted if Hillary Clinton or Bernie Sanders wins the election.
https://screen.yahoo.com/trump-catastrophic-stocks-wedbush-214000793.html
One of the better comments, by commentator takebreathandthink:
It's true, the markets will crash 50%. Also, the seas will turn to blood, meteors will rain down from the heavens, swarms of locusts will kill all of the crops in the world, every volcano will erupt, earthquakes will rip apart the continents, and the first born of everyone in the world will die (thank God I'm the youngest in my family).
Inquiring minds want to know why Mr. Winer didn't call for a 60% or 80% crash. After all, if you're going to trash someone, why go just halfway?
Vote Trump. Wall Street hates him.
Tuesday, March 15, 2016
Markets Moribund Facing FOMC Meeting
Nothing matters except the Fed and the FOMC rate policy meeting which wraps up tomorrow.
At 2:00 pm EDT, something will happen, though the Fed is expected to leave the federal funds rate unchanged.
La-dee-da.
S&P 500: 2,015.93, -3.71 (0.18%)
Dow: 17,251.53, +22.40 (0.13%)
NASDAQ: 4,728.67, -21.61 (0.45%)
Crude Oil 36.53 -1.75% Gold 1,232.80 -0.99% EUR/USD 1.1119 +0.13% 10-Yr Bond 1.9590 -0.20% Corn 368.25 -0.14% Copper 2.24 -0.13% Silver 15.29 -1.49% Natural Gas 1.85 +1.65% Russell 2000 1,066.67 -1.62% VIX 16.84 -0.47% BATS 1000 20,682.61 0.00% GBP/USD 1.4147 -1.08% USD/JPY 113.1630 -0.56%
At 2:00 pm EDT, something will happen, though the Fed is expected to leave the federal funds rate unchanged.
La-dee-da.
S&P 500: 2,015.93, -3.71 (0.18%)
Dow: 17,251.53, +22.40 (0.13%)
NASDAQ: 4,728.67, -21.61 (0.45%)
Crude Oil 36.53 -1.75% Gold 1,232.80 -0.99% EUR/USD 1.1119 +0.13% 10-Yr Bond 1.9590 -0.20% Corn 368.25 -0.14% Copper 2.24 -0.13% Silver 15.29 -1.49% Natural Gas 1.85 +1.65% Russell 2000 1,066.67 -1.62% VIX 16.84 -0.47% BATS 1000 20,682.61 0.00% GBP/USD 1.4147 -1.08% USD/JPY 113.1630 -0.56%
Monday, March 14, 2016
Stocks Flat Awaiting FOMC Interest Rate Decision
Don't expect much in the way of big moves until Wednesday, when the FOMC is expected to announce no change in the federal funds rate, quelling fears of another 25 basis point rate hike like the one executed in December of last year, essentially taking the punch bowl of easy money further away from the drunken Wall Street partiers.
If the Fed somehow decides to hike rates again, it would spell doom for the four-week rally that has brought the Dow back a stunning 1200 points. from mid-February lows.
Should the Fed conform to the dictates of the stock market (which it does, but definitely should not), keeping the rate at 0.25-0.50%, there is some suggestion that stocks could rally further, though, with the first quarter winding down and earnings reports still a month out, that really doesn't appear to be a reasonable probability.
More likely would be for speculators to take some money off the table and go to cash for the short term, await the inevitable dip in selected stocks and dive in once again at some later date.
The wild card is still the Fed, which had promised three to four rate hikes this year, but remains, as they say, "data dependent." Otherwise, this is quite the dull market.
At least crude oil came off its recent highs. Expect the recent euphoria to turn toward a more realistic price, closer to $30/barrel in the near term.
S&P 500: 2,019.64, -2.55 (0.13%)
Dow: 17,229.13, +15.82 (0.09%)
NASDAQ: 4,750.28, +1.81 (0.04%)
Crude Oil 37.34 -3.01% Gold 1,236.00 -1.86% EUR/USD 1.1102 -0.49% 10-Yr Bond 1.9630 -0.71% Corn 368.75 +1.03% Copper 2.24 -0.07% Silver 15.36 -1.54% Natural Gas 1.82 -0.11% Russell 2000 1,084.25 -0.30% VIX 16.92 +2.55% BATS 1000 20,677.17 0.00% GBP/USD 1.4303 -0.53% USD/JPY 113.79 +0.06%
If the Fed somehow decides to hike rates again, it would spell doom for the four-week rally that has brought the Dow back a stunning 1200 points. from mid-February lows.
Should the Fed conform to the dictates of the stock market (which it does, but definitely should not), keeping the rate at 0.25-0.50%, there is some suggestion that stocks could rally further, though, with the first quarter winding down and earnings reports still a month out, that really doesn't appear to be a reasonable probability.
More likely would be for speculators to take some money off the table and go to cash for the short term, await the inevitable dip in selected stocks and dive in once again at some later date.
The wild card is still the Fed, which had promised three to four rate hikes this year, but remains, as they say, "data dependent." Otherwise, this is quite the dull market.
At least crude oil came off its recent highs. Expect the recent euphoria to turn toward a more realistic price, closer to $30/barrel in the near term.
S&P 500: 2,019.64, -2.55 (0.13%)
Dow: 17,229.13, +15.82 (0.09%)
NASDAQ: 4,750.28, +1.81 (0.04%)
Crude Oil 37.34 -3.01% Gold 1,236.00 -1.86% EUR/USD 1.1102 -0.49% 10-Yr Bond 1.9630 -0.71% Corn 368.75 +1.03% Copper 2.24 -0.07% Silver 15.36 -1.54% Natural Gas 1.82 -0.11% Russell 2000 1,084.25 -0.30% VIX 16.92 +2.55% BATS 1000 20,677.17 0.00% GBP/USD 1.4303 -0.53% USD/JPY 113.79 +0.06%
Friday, March 11, 2016
It's a Bear! It's a Bull! No, It's a Blur Market
Money Daily has sought to explain the crooked, maligned markets since 2006, without success, though today, at last, a breakthrough may be at hand.
At last, a definition with which everybody can agree.
After yesterday's quad-engulfing candlestick on the Dow Jones Industrial Average (DJIA), which would surely, under normal circumstances (whatever qualifies as normal since 2008, nobody is sure) qualify as a key reversal day, markets would have none of it, unless one is to be persuaded to believe that the reverse of a constant grind higher is a quick slam higher.
Up is down, Down is up. Slavery is liberty and all that 1984-ish doublespeak. (h/t to George Orwell)
Are we in a bear market? Hardly. A bull market? Doubtful.
Thus, we inaugurate the Blur Market, wherein all fundamentals are obfuscated by statistics, corrupt data from the BLS, manic pumping from the PPT, the machinations of the ESF (Exchange Stabilization Fund), jawboning from the likes of Mario Draghi, Shinzo Abe, Janet Yellen, Stanley Fisher or James Bullard.
It's a market driven by algorithms, unseen by human eyes, throttled up and down by unseen scientists in hidden caverns. The blur market is so fast, microseconds are not quick enough to front-run it. High Frequency Traders (HFTs) fight for nanoseconds of advantage. Didot typefaces print prices in a dadaist diaspora.
There's only one number that matters: 2,130.82
That was the all-time high close on the S&P 500, May 21, 2015. We are just about two months away from that being a year ago, so, are we headed to another all-time high or not?
If we are, the bull market lives on. If not, a bear market is in the cards.
For now, we're in a 'tween market. Not bear, nor bull, but something in between, a 'tween, or a beull or a bulear. Something like that. Maybe we could just call it a blur market, which works on a number of levels.
So, let us. It's all a BLUR.
Friday's massive rise capped the fourth straight week of gains on the major indices. For the Dow, up 7.5% in just the past 20 sessions, Friday's gains put the rally at a solid 1200 points. For the week, the DJIA was up 206.54 (1.21%); the S&P added 22.20 (1.11%); and the NASDAQ posted a gain of 31.44 (0.67%). Friday made certain that the rally did not end, at least on a weekly basis.
While impressive, this looks like nothing more than a cynical cyclical rally, with nothing but hot air and central bank jawboning behind it.
The Friday Blur:
S&P 500: 2,022.19, +32.62 (1.64%)
Dow: 17,213.31, +218.18 (1.28%)
NASDAQ: 4,748.47, +86.31 (1.85%)
Crude Oil 38.51 +1.77% Gold 1,259.50 -1.04% EUR/USD 1.1152 -0.23% 10-Yr Bond 1.9770 +2.49% Corn 364.50 +0.48% Copper 2.24 +1.06% Silver 15.62 +0.49% Natural Gas 1.83 +2.18% Russell 2000 1,086.77 +2.14% VIX 16.55 -8.31% BATS 1000 20,677.17 0.00% GBP/USD 1.4383 +0.66% USD/JPY 113.78 +0.56%
At last, a definition with which everybody can agree.
After yesterday's quad-engulfing candlestick on the Dow Jones Industrial Average (DJIA), which would surely, under normal circumstances (whatever qualifies as normal since 2008, nobody is sure) qualify as a key reversal day, markets would have none of it, unless one is to be persuaded to believe that the reverse of a constant grind higher is a quick slam higher.
Up is down, Down is up. Slavery is liberty and all that 1984-ish doublespeak. (h/t to George Orwell)
Are we in a bear market? Hardly. A bull market? Doubtful.
Thus, we inaugurate the Blur Market, wherein all fundamentals are obfuscated by statistics, corrupt data from the BLS, manic pumping from the PPT, the machinations of the ESF (Exchange Stabilization Fund), jawboning from the likes of Mario Draghi, Shinzo Abe, Janet Yellen, Stanley Fisher or James Bullard.
It's a market driven by algorithms, unseen by human eyes, throttled up and down by unseen scientists in hidden caverns. The blur market is so fast, microseconds are not quick enough to front-run it. High Frequency Traders (HFTs) fight for nanoseconds of advantage. Didot typefaces print prices in a dadaist diaspora.
There's only one number that matters: 2,130.82
That was the all-time high close on the S&P 500, May 21, 2015. We are just about two months away from that being a year ago, so, are we headed to another all-time high or not?
If we are, the bull market lives on. If not, a bear market is in the cards.
For now, we're in a 'tween market. Not bear, nor bull, but something in between, a 'tween, or a beull or a bulear. Something like that. Maybe we could just call it a blur market, which works on a number of levels.
So, let us. It's all a BLUR.
Friday's massive rise capped the fourth straight week of gains on the major indices. For the Dow, up 7.5% in just the past 20 sessions, Friday's gains put the rally at a solid 1200 points. For the week, the DJIA was up 206.54 (1.21%); the S&P added 22.20 (1.11%); and the NASDAQ posted a gain of 31.44 (0.67%). Friday made certain that the rally did not end, at least on a weekly basis.
While impressive, this looks like nothing more than a cynical cyclical rally, with nothing but hot air and central bank jawboning behind it.
The Friday Blur:
S&P 500: 2,022.19, +32.62 (1.64%)
Dow: 17,213.31, +218.18 (1.28%)
NASDAQ: 4,748.47, +86.31 (1.85%)
Crude Oil 38.51 +1.77% Gold 1,259.50 -1.04% EUR/USD 1.1152 -0.23% 10-Yr Bond 1.9770 +2.49% Corn 364.50 +0.48% Copper 2.24 +1.06% Silver 15.62 +0.49% Natural Gas 1.83 +2.18% Russell 2000 1,086.77 +2.14% VIX 16.55 -8.31% BATS 1000 20,677.17 0.00% GBP/USD 1.4383 +0.66% USD/JPY 113.78 +0.56%
Thursday, March 10, 2016
Key Reversal As Dow Candlestick Engulfs Previous Four Sessions; ECB's Draghi To Blame
Money Daily been covering about this rally for the past two weeks but really didn't see the handwriting on the wall throughout. While saying the market would continue to rally at least until the ECB rate announcement by Mario Draghi (today), and possibly Yellen and the FOMC (on the 16th), there was no way to know when exactly it would stop or why.
But, now we all know. It was "buy the rumor, sell the news," all along. Everybody figured Draghi would go all in on QE and lowering the reserve rate (rumor) and he did (news), so, therein lies the reasons for first the pump in stocks and then the midday dump as Draghi then backtracked at his press conference, saying not to expect more over-the-top policy moves anytime soon.
Why? Draghi was giving Yellen and the Fed cover to keep rates where they are, for at least another month or meeting.
The main aspects of Draghi's "bazooka" approach are:
-- The key interest rate is dropped from 0.05% to ZERO.
-- Cut its deposit rate by 10 basis points, further into negative territory to -0.4%
-- The marginal lending rate, paid by banks to borrow from the ECB overnight, was cut from 0.3% to to 0.25%
-- Expanded the QE programme to €80bn (£61bn) a month, up from €60n
-- Expanded the LTRTO, offering more easy loans to Eurozone banks
Then we saw the usual late-day comeback, leaving US equity markets virtually unchanged, on a day that was arguably noteworthy and newsworthy. The markets, the speculators, had all of this priced in, and the gyrations were only to square their winners and losers.
This is the game. It's nothing more than a game, has no root in reality, fundamentals, supply/demand or any other tired metric of what we used to fondly call "analysis."
Markets are nothing more than tools for public entertainment and consumption. The central bankers, so long as they have the power to conjure endless amounts of fiat out of thin air, have complete control over all markets.
Finally, we are beginning to see the light at the end of the tunnel, though it appears to be just a flickering candle about to be snuffed out.
As far as technical analysis is concerned - again, giving the CNBC types and the marketeers sufficient cover - the Dow candlestick chart shows today as a key reversal day, with today's action - up, then down, then back up - engulfing the previous four sessions on the Dow. Interesting also is the pint at which the rally ended, almost exactly at the 200-day moving average. It's almost as if it was planned, though that kind of statement might brand one as a wearer of tin-foil hats and a believer in astrology or Scientology.
These kinds of "outside" reversals almost always signal a change in direction, so, outside of more malignant market manipulation, stocks should head south on Friday and continue in that general direction heading up to the FOMC meeting Tuesday and Wednesday of next week.
Upon the Fed keeping rates unchanged, it will be "mission accomplished" for the time being. multiple flavors of options expire on Friday, so expect volatility heading into the end of next week.
Then again, one could hold real assets outside the system, those being anything raised without the assistance of fiat money (think animal husbandry, vegetable gardening and barter), or the hated precious metals and/or gemstones.
In he end, people use money or currency to buy the things they need to lead free, comfortable lives. If one were to master the ability to minimize dependence on the fiat money system and maximize the ability to produce energy, food and goods, there would be little need for any kind of currency except that controlled by the actual buyers and sellers.
There, the survivalist, off-the-grid types make perfect sense.
Thursday's Round-trip Extravaganza:
S&P 500: 1,989.57, +0.31 (0.02%)
Dow: 16,995.13, -5.23 (0.03%)
NASDAQ: 4,662.16, -12.22 (0.26%)
Crude Oil 37.88 -1.07% Gold 1,271.90 +1.15% EUR/USD 1.1179 +1.64% 10-Yr Bond 1.9290 +1.96% Corn 363.00 +0.97% Copper 2.23 -0.31% Silver 15.59 +1.43% Natural Gas 1.80 +3.03% Russell 2000 1,063.99 -0.82% VIX 18.05 -1.58% BATS 1000 20,677.17 0.00% GBP/USD 1.4282 +0.49% USD/JPY 113.2420
But, now we all know. It was "buy the rumor, sell the news," all along. Everybody figured Draghi would go all in on QE and lowering the reserve rate (rumor) and he did (news), so, therein lies the reasons for first the pump in stocks and then the midday dump as Draghi then backtracked at his press conference, saying not to expect more over-the-top policy moves anytime soon.
Why? Draghi was giving Yellen and the Fed cover to keep rates where they are, for at least another month or meeting.
The main aspects of Draghi's "bazooka" approach are:
-- The key interest rate is dropped from 0.05% to ZERO.
-- Cut its deposit rate by 10 basis points, further into negative territory to -0.4%
-- The marginal lending rate, paid by banks to borrow from the ECB overnight, was cut from 0.3% to to 0.25%
-- Expanded the QE programme to €80bn (£61bn) a month, up from €60n
-- Expanded the LTRTO, offering more easy loans to Eurozone banks
Then we saw the usual late-day comeback, leaving US equity markets virtually unchanged, on a day that was arguably noteworthy and newsworthy. The markets, the speculators, had all of this priced in, and the gyrations were only to square their winners and losers.
This is the game. It's nothing more than a game, has no root in reality, fundamentals, supply/demand or any other tired metric of what we used to fondly call "analysis."
Markets are nothing more than tools for public entertainment and consumption. The central bankers, so long as they have the power to conjure endless amounts of fiat out of thin air, have complete control over all markets.
Finally, we are beginning to see the light at the end of the tunnel, though it appears to be just a flickering candle about to be snuffed out.
As far as technical analysis is concerned - again, giving the CNBC types and the marketeers sufficient cover - the Dow candlestick chart shows today as a key reversal day, with today's action - up, then down, then back up - engulfing the previous four sessions on the Dow. Interesting also is the pint at which the rally ended, almost exactly at the 200-day moving average. It's almost as if it was planned, though that kind of statement might brand one as a wearer of tin-foil hats and a believer in astrology or Scientology.
These kinds of "outside" reversals almost always signal a change in direction, so, outside of more malignant market manipulation, stocks should head south on Friday and continue in that general direction heading up to the FOMC meeting Tuesday and Wednesday of next week.
Upon the Fed keeping rates unchanged, it will be "mission accomplished" for the time being. multiple flavors of options expire on Friday, so expect volatility heading into the end of next week.
Then again, one could hold real assets outside the system, those being anything raised without the assistance of fiat money (think animal husbandry, vegetable gardening and barter), or the hated precious metals and/or gemstones.
In he end, people use money or currency to buy the things they need to lead free, comfortable lives. If one were to master the ability to minimize dependence on the fiat money system and maximize the ability to produce energy, food and goods, there would be little need for any kind of currency except that controlled by the actual buyers and sellers.
There, the survivalist, off-the-grid types make perfect sense.
Thursday's Round-trip Extravaganza:
S&P 500: 1,989.57, +0.31 (0.02%)
Dow: 16,995.13, -5.23 (0.03%)
NASDAQ: 4,662.16, -12.22 (0.26%)
Crude Oil 37.88 -1.07% Gold 1,271.90 +1.15% EUR/USD 1.1179 +1.64% 10-Yr Bond 1.9290 +1.96% Corn 363.00 +0.97% Copper 2.23 -0.31% Silver 15.59 +1.43% Natural Gas 1.80 +3.03% Russell 2000 1,063.99 -0.82% VIX 18.05 -1.58% BATS 1000 20,677.17 0.00% GBP/USD 1.4282 +0.49% USD/JPY 113.2420
Wednesday, March 9, 2016
Oil Glut Yet Prices Higher; Gold, Silver Demand Up, Prices Down
There is a serious disturbance in the Farce called the global economy, and it is the role of central bankers who create absurd amounts of fiat currencies, literally out of thin air.
Policies adopted by the financial elite experts who control nearly all currencies worldwide have caused markets to virtually stop functioning. After seven years of base interest rates at near zero - and recently, below zero - endless stimulus programs otherwise known by the catchy name, quantitative easing, and a serious lack of transparency, regulation, and discipline in all markets, global growth is a non-starter for 2016 and the foreseeable future.
Businesses, fed a diet of easy money for nearly a decade (two decades, if one includes the Greenspan "put" years) are loathe to spend on capital improvements, labor or infrastructure. Businesses are, so to speak, "living off the land," by cutting budgets while fattening the salaries and bonuses of crony CEOs and others occupying the executive suites and boards of directors.
It's a horrible condition, with disinflation and outright deflation popping up in pockets like food production, energy, and most hard commodities (see natural gas and copper). Price discovery has become a function less of supply and demand and more driven by derivative bets, options, credit default swaps, and hedging. Over-finacialization of nearly all markets that matter has turned fundamentals on their heads and what once were functional markets into nothing more than trap-laden casinos. The effect has been to alienate a generation of investors (millenials), impoverish another (retirees) and overburden those not yet ready to enter the economy (the youth). In the middle is generation X, condemned to toil away towards an uncertain future.
The argument that fundamental supply and demand is defunct rests largely on the oil market, currently carrying the largest global glut on record, yet pushed to levels indicative of a shortage. Oil was ranging toward $25 per barrel just a month or so ago; today it is approaching $40, mostly a function of short-covering and naked short selling.
Much the same can be said of the markets for precious metals, the price held down by nefarious forces while the demand continues to expand. In many quarters, gold, silver, and gemstones are considered the only investments worth having and holding. They carry no counterparts risk, are relatively easy to transport and can be converted into money or any other asset with relative ease.
As Bill Bonner and his enlightened crew love to postulate, a day of reckoning is coming, though just exactly when that day arrives and how it is manifested are known to exactly nobody.
It's a mess. Better to put money in a mattress or buy canned goods than risk in capital markets, as moribund and compromised as they are. US equity indices peaked in May of 2015. It's nearly a year from the all-time highs without any rally catalysts in sight.
All eyes and ears will be tuned to the ECB tomorrow, when Mario Draghi does what he can only do, signal more easing, more fraud, and more of the relentless can-kicking that has typified the past seven years.
Nobody is holding his or her breath on this coming non-event because there is no longer any air to breathe.
Wednesday's Wackiness:
S&P 500: 1,989.26, +10.00 (0.51%)
Dow: 17,000.36, +36.26 (0.21%)
NASDAQ: 4,674.38, +25.55 (0.55%)
Crude Oil 38.23 +4.74% Gold 1,253.90 -0.71% EUR/USD 1.1001 -0.06% 10-Yr Bond 1.8920 +3.28% Corn 360.25 -0.07% Copper 2.23 +0.54% Silver 15.31 -0.52% Natural Gas 1.76 +2.92% Russell 2000 1,072.77 +0.46% VIX 18.34 -1.77% BATS 1000 20,677.17 0.00% GBP/USD 1.4217 +0.03% USD/JPY 113.3350 +0.60%
Policies adopted by the financial elite experts who control nearly all currencies worldwide have caused markets to virtually stop functioning. After seven years of base interest rates at near zero - and recently, below zero - endless stimulus programs otherwise known by the catchy name, quantitative easing, and a serious lack of transparency, regulation, and discipline in all markets, global growth is a non-starter for 2016 and the foreseeable future.
Businesses, fed a diet of easy money for nearly a decade (two decades, if one includes the Greenspan "put" years) are loathe to spend on capital improvements, labor or infrastructure. Businesses are, so to speak, "living off the land," by cutting budgets while fattening the salaries and bonuses of crony CEOs and others occupying the executive suites and boards of directors.
It's a horrible condition, with disinflation and outright deflation popping up in pockets like food production, energy, and most hard commodities (see natural gas and copper). Price discovery has become a function less of supply and demand and more driven by derivative bets, options, credit default swaps, and hedging. Over-finacialization of nearly all markets that matter has turned fundamentals on their heads and what once were functional markets into nothing more than trap-laden casinos. The effect has been to alienate a generation of investors (millenials), impoverish another (retirees) and overburden those not yet ready to enter the economy (the youth). In the middle is generation X, condemned to toil away towards an uncertain future.
The argument that fundamental supply and demand is defunct rests largely on the oil market, currently carrying the largest global glut on record, yet pushed to levels indicative of a shortage. Oil was ranging toward $25 per barrel just a month or so ago; today it is approaching $40, mostly a function of short-covering and naked short selling.
Much the same can be said of the markets for precious metals, the price held down by nefarious forces while the demand continues to expand. In many quarters, gold, silver, and gemstones are considered the only investments worth having and holding. They carry no counterparts risk, are relatively easy to transport and can be converted into money or any other asset with relative ease.
As Bill Bonner and his enlightened crew love to postulate, a day of reckoning is coming, though just exactly when that day arrives and how it is manifested are known to exactly nobody.
It's a mess. Better to put money in a mattress or buy canned goods than risk in capital markets, as moribund and compromised as they are. US equity indices peaked in May of 2015. It's nearly a year from the all-time highs without any rally catalysts in sight.
All eyes and ears will be tuned to the ECB tomorrow, when Mario Draghi does what he can only do, signal more easing, more fraud, and more of the relentless can-kicking that has typified the past seven years.
Nobody is holding his or her breath on this coming non-event because there is no longer any air to breathe.
Wednesday's Wackiness:
S&P 500: 1,989.26, +10.00 (0.51%)
Dow: 17,000.36, +36.26 (0.21%)
NASDAQ: 4,674.38, +25.55 (0.55%)
Crude Oil 38.23 +4.74% Gold 1,253.90 -0.71% EUR/USD 1.1001 -0.06% 10-Yr Bond 1.8920 +3.28% Corn 360.25 -0.07% Copper 2.23 +0.54% Silver 15.31 -0.52% Natural Gas 1.76 +2.92% Russell 2000 1,072.77 +0.46% VIX 18.34 -1.77% BATS 1000 20,677.17 0.00% GBP/USD 1.4217 +0.03% USD/JPY 113.3350 +0.60%
Tuesday, March 8, 2016
Oil Beaten Down Along With Gold, Silver, Stocks
After yesterday's run-up in crude, the obligatory return to red was the order of the day as WTI crude ended below $37/barrel. Not to be missed were the turn-about in gold and silver, but stocks remain mostly on hold for Mario Draghi and the ECB's rate announcement on Thursday.
This is what happens when the entire world revolves around central bankers: lots of nothing, and all investment vehicles returning essentially zero returns on capital, unless one's timing is extraordinary, you're a professional horse handicapper turned day-trader, or one of the various front-running HFTs.
Speaking of timing, Money Daily editor, Fearless Rick, has called out Dennis Gartman of the Gartman Letter, and his somewhat flimsy assertion that his proprietary fund is up 12.3% year-to-date. Mr. Rick emailed Gartman (see here), and tried to get a subscription to his newsletter, but has heard nothing yet. Money Daily will update with any developments (some interesting information on Mr. Gartman has already been discovered on the internet and a file is being updated... stay tuned)
Today's Mangled Mess:
S&P 500: 1,979.26, -22.50 (1.12%)
Dow: 16,964.10, -109.85 (0.64%)
NASDAQ: 4,648.82, -59.43 (1.26%)
Crude Oil 36.46 -3.80% Gold 1,263.20 -0.06% EUR/USD 1.1006 -0.08% 10-Yr Bond 1.8320 -3.68% Corn 360.75 +0.49% Copper 2.22 -2.89% Silver 15.43 -1.33% Natural Gas 1.72 +1.54% Russell 2000 1,068.18 -2.37% VIX 18.75 +8.07% BATS 1000 20,677.17 0.00% GBP/USD 1.4215 -0.33% USD/JPY 112.6420
This is what happens when the entire world revolves around central bankers: lots of nothing, and all investment vehicles returning essentially zero returns on capital, unless one's timing is extraordinary, you're a professional horse handicapper turned day-trader, or one of the various front-running HFTs.
Speaking of timing, Money Daily editor, Fearless Rick, has called out Dennis Gartman of the Gartman Letter, and his somewhat flimsy assertion that his proprietary fund is up 12.3% year-to-date. Mr. Rick emailed Gartman (see here), and tried to get a subscription to his newsletter, but has heard nothing yet. Money Daily will update with any developments (some interesting information on Mr. Gartman has already been discovered on the internet and a file is being updated... stay tuned)
Today's Mangled Mess:
S&P 500: 1,979.26, -22.50 (1.12%)
Dow: 16,964.10, -109.85 (0.64%)
NASDAQ: 4,648.82, -59.43 (1.26%)
Crude Oil 36.46 -3.80% Gold 1,263.20 -0.06% EUR/USD 1.1006 -0.08% 10-Yr Bond 1.8320 -3.68% Corn 360.75 +0.49% Copper 2.22 -2.89% Silver 15.43 -1.33% Natural Gas 1.72 +1.54% Russell 2000 1,068.18 -2.37% VIX 18.75 +8.07% BATS 1000 20,677.17 0.00% GBP/USD 1.4215 -0.33% USD/JPY 112.6420
US Stock Markets Are Massive Frauds, So Are Banks, How About Investment Advisors?
Thanks to frequent articles on Zero Hedge, Money Daily has been entertained by following the investment "wisdom" of one Dennis Gartman, a regular contributor on CNBC, especially on the show, Fast Money.
Now, not everybody has done well this year, but according to his own words, Mr. Gartman claims to be up 12.3% year-to-date. See below (and the original quote on ZH):
So, after the Erin Andrews $55 million verdict set hair on fire yesterday, editor Fearless Rick sent the following request to liz@thegartmanletter.com:
Awaiting a response, or a subpoena. Maybe a drone strike. Stay tuned.
Now, not everybody has done well this year, but according to his own words, Mr. Gartman claims to be up 12.3% year-to-date. See below (and the original quote on ZH):
For those who wish to follow our progress, we are up 12.3% for the year-to-date, outperforming our International Index rather pleasantly and outperforming the S&P too by 14.4%. We have been quite lucky thus far this year. We are simply hoping that our good fortune thus far obtains through the remainder of the year. If we continue to “Do more of that which is working and less of that which is not”… perhaps our most important Rule of Trading…
So, after the Erin Andrews $55 million verdict set hair on fire yesterday, editor Fearless Rick sent the following request to liz@thegartmanletter.com:
I keep reading that Dennis is up 12.3 to 14% year-to-date, and I would like to know how he’s managed to outperform the markets this year.
Mr. Gartman makes bold statements that affect the thinking of many investors and speculators by his frequent appearances on CNBC.
Essentially, I think he’s a fraud and unless you offer bona fide proof that he’s ahead by what he says he is, I will expose him.
Best regards,
Rick Gagliano
Downtown Magazine
dtmagazine.com
Awaiting a response, or a subpoena. Maybe a drone strike. Stay tuned.
Monday, March 7, 2016
Seven Years Out, The Great Recovery Is Over As Eric Andrews Is Awarded $55 Million She'll Never See
Flash back to March 6, 2009 and what does one find?
The S&P 500 was trading at 666.79, which would eventually become known as "the bottom," the intraday low for stocks after the great crash which began in earnest in October of 2008.
As late as September 19, 2008, the S&P had traded as well the mid 1200s, closing, on that date, at 1255.08. Nearing the end of October, the same index was in the 800s (October 27: 848.92), nearly a 33% haircut in just over a month.
Gains that had taken years to produce were dissipated in less than 30 trading sessions. That was only a sideshow. The slide that began in 2007, started from a high point of 1565.15 (the close on October 9, 2007) had taken a full year to gut the S&P, cutting the valuation nearly in half. The rest of the damage would be done in the fall and winter of 2008-09, for a total rout of 57.4%, wiping out the savings of millions of Americans and foreign investors.
Most people aren't aware of the extraordinary measures taken by the Federal Reserve and other central banks around the world to stop the plunge, but perhaps the most instructive - and eventually damaging - measure was taken by the FASB (Federal Accounting Standards Board) on April 2nd, 2009, to suspend rule 157, relieving financial institutions - primarily the too-big-to-fail banks - of the rigors of mark-to-market accounting. The banks would no longer have to value assets at any perceived market value, but at any value they deemed "reasonable" or otherwise flattering to their balance sheets.
At the time, the banks were saddled with billions of dollars worth of nearly-worthless mortgages, which they themselves had originated, or bought, in the bubbly real estate market of the early-to-mid 2000s. The entire bubble they created had burst, assets were impaired, homeowners were walking away from commitments they should never have made on houses they normally could never had qualified to buy.
Eventually, the Fed came in and rescued the banks further, buying up all the toxic paper in various rounds of QE, the last one ending in 2014. By then the markets had recovered, stocks had soared to new, unimaginable heights, and the global economy was pronounced "saved."
But, the FASB has never reinstated rule 157, meaning, in simple terms, that bank assets are still, to this day, based on fictional valuations.
To get an idea just how far down the rabbit hole price discovery has gone, just contemplate for a moment that Erin Andrews has been awarded a judgment of $55 million for being peeped upon in a hotel and having a video of her distributed online. Some models have posed au natural for significantly less.
Seriously, is anybody's body, or their pride, worth $55 million? The hotel she is suing isn't even worth anything close to that amount of money, so, in effect, this jury basically awarded the victim the entire assets of the hotel, and more.
Andrews will never see that money, however. Nobody has all of it. She will get some, her lawyers will get a third or more, of whatever she can recover, but, in essence, Erin Andrews is now a hotel owner.
Yes, she was wronged, but the point is that price discovery was done away with in 2009 with the suspension of rule 157, and nobody can place accurate valuations on anything.
Is gold worth $1200 an ounce, or $600, or $30,000. Is your car worth $35,000? Who knows? It's all relative now.
And relativity, in the sciences at least, is still theoretical.
So is existence. And we're back to where we began. Whoever can set the prices, dictates the terms. For now, the markets - as rigged and manipulated as they are - sets the prices. That's not going to last.
Good night.
S&P 500: 2,001.76, +1.77 (0.09%)
Dow: 17,073.95, +67.18 (0.40%)
NASDAQ: 4,708.25, -8.77 (0.19%)
Crude Oil 37.87 +5.43% Gold 1,268.40 -0.18% EUR/USD 1.1014 -0.0018% 10-Yr Bond 1.9020 +1.01% Corn 359.50 +0.35% Copper 2.28 +0.24% Silver 15.67 -0.15% Natural Gas 1.69 +1.56% Russell 2000 1,094.15 +1.13% VIX 17.35 +2.91% BATS 1000 20,677.17 0.00% GBP/USD 1.4257 -0.04% USD/JPY 113.4160 +0.03%
The S&P 500 was trading at 666.79, which would eventually become known as "the bottom," the intraday low for stocks after the great crash which began in earnest in October of 2008.
As late as September 19, 2008, the S&P had traded as well the mid 1200s, closing, on that date, at 1255.08. Nearing the end of October, the same index was in the 800s (October 27: 848.92), nearly a 33% haircut in just over a month.
Gains that had taken years to produce were dissipated in less than 30 trading sessions. That was only a sideshow. The slide that began in 2007, started from a high point of 1565.15 (the close on October 9, 2007) had taken a full year to gut the S&P, cutting the valuation nearly in half. The rest of the damage would be done in the fall and winter of 2008-09, for a total rout of 57.4%, wiping out the savings of millions of Americans and foreign investors.
Most people aren't aware of the extraordinary measures taken by the Federal Reserve and other central banks around the world to stop the plunge, but perhaps the most instructive - and eventually damaging - measure was taken by the FASB (Federal Accounting Standards Board) on April 2nd, 2009, to suspend rule 157, relieving financial institutions - primarily the too-big-to-fail banks - of the rigors of mark-to-market accounting. The banks would no longer have to value assets at any perceived market value, but at any value they deemed "reasonable" or otherwise flattering to their balance sheets.
At the time, the banks were saddled with billions of dollars worth of nearly-worthless mortgages, which they themselves had originated, or bought, in the bubbly real estate market of the early-to-mid 2000s. The entire bubble they created had burst, assets were impaired, homeowners were walking away from commitments they should never have made on houses they normally could never had qualified to buy.
Eventually, the Fed came in and rescued the banks further, buying up all the toxic paper in various rounds of QE, the last one ending in 2014. By then the markets had recovered, stocks had soared to new, unimaginable heights, and the global economy was pronounced "saved."
But, the FASB has never reinstated rule 157, meaning, in simple terms, that bank assets are still, to this day, based on fictional valuations.
To get an idea just how far down the rabbit hole price discovery has gone, just contemplate for a moment that Erin Andrews has been awarded a judgment of $55 million for being peeped upon in a hotel and having a video of her distributed online. Some models have posed au natural for significantly less.
Seriously, is anybody's body, or their pride, worth $55 million? The hotel she is suing isn't even worth anything close to that amount of money, so, in effect, this jury basically awarded the victim the entire assets of the hotel, and more.
Andrews will never see that money, however. Nobody has all of it. She will get some, her lawyers will get a third or more, of whatever she can recover, but, in essence, Erin Andrews is now a hotel owner.
Yes, she was wronged, but the point is that price discovery was done away with in 2009 with the suspension of rule 157, and nobody can place accurate valuations on anything.
Is gold worth $1200 an ounce, or $600, or $30,000. Is your car worth $35,000? Who knows? It's all relative now.
And relativity, in the sciences at least, is still theoretical.
So is existence. And we're back to where we began. Whoever can set the prices, dictates the terms. For now, the markets - as rigged and manipulated as they are - sets the prices. That's not going to last.
Good night.
S&P 500: 2,001.76, +1.77 (0.09%)
Dow: 17,073.95, +67.18 (0.40%)
NASDAQ: 4,708.25, -8.77 (0.19%)
Crude Oil 37.87 +5.43% Gold 1,268.40 -0.18% EUR/USD 1.1014 -0.0018% 10-Yr Bond 1.9020 +1.01% Corn 359.50 +0.35% Copper 2.28 +0.24% Silver 15.67 -0.15% Natural Gas 1.69 +1.56% Russell 2000 1,094.15 +1.13% VIX 17.35 +2.91% BATS 1000 20,677.17 0.00% GBP/USD 1.4257 -0.04% USD/JPY 113.4160 +0.03%
Thursday, March 3, 2016
All Eyes on Non-Farm Payrolls, But ECB and FOMC Hold More Intrigue for Stocks
Following Wednesday's low-volume advances (lowest of the year), stocks followed a similar pattern in Thursday's trading regimen, slumping at the open, only to rise through the day and close modestly green.
While the talking heads on Bloomberg and CNBC are hyperventilating over the February non-farm payroll report due out tomorrow morning, the true market-moving events concern central banks and they don't occur until next week and the following, beginning with the ECB policy announcement on March 10, and the FOMC meeting March 15-16.
After ADP's February private sector number coming in at 214,000 Wednesday morning, the market is expecting something in that range from the BLS, with consensus just a shade below 200,000.
Whatever the number, it should weigh on any rate decision the Fed has planned or is considering. Another 25 basis point hike in the federal funds rate at this meeting has been largely discounted by the market, meaning, that if the Fed stands pat on rates, then it is tacit understanding that their goal of four more hikes by the end of the year is very much being scrapped.
There are simply too many negative forces pulling at the Fed for them to do another rate hike. Everything from the fragile US economy to the cratering Yuan and Chinese GDP growth to the nut-case presidential primaries are under consideration by the most politically-motivated central bank in the known universe.
That is to say nothing of the 1500-point hissy fit thrown by the DJIA after the most recent rate increase, in December of last year.
Stocks continue to keep to the script here, with the S&P within hailing distance of 2000, and the Dow closing in fast on 17,000. Both are admirable short-term goals, but they will hardly prove to be persistent. Stocks are becoming severely overbought and overvalued, and charts show all kinds of evidence that the bull run from 2009 has ended. Besides, there's growing fears of a recession looming, especially after the poor performance not only of the past two quarters, but of the general seven-year-long recovery.
The key level is 17,200 for the Dow, a point at which there is a significant patch of heavily-fortified resistance.
The Bureau of Labor Statistics (BLS) will release the February non-farm payroll report at 8:30 am ET, Friday.
S&P 500: 1,993.40, +6.95 (0.35%)
Dow: 16,943.90, +44.58 (0.26%)
NASDAQ: 4,707.42, +4.00 (0.09%)
Crude Oil 34.60 -0.17% Gold 1,262.10 +1.63% EUR/USD 1.0963 +0.89% 10-Yr Bond 1.83 -0.97% Corn 355.50 -0.21% Copper 2.21 +1.26% Silver 15.23 +1.38% Natural Gas 1.64 -2.09% Russell 2000 1,076.05 +0.97% VIX 16.70 -2.28% BATS 1000 20,677.17 0.00% GBP/USD 1.4178 +0.71% USD/JPY 113.65
While the talking heads on Bloomberg and CNBC are hyperventilating over the February non-farm payroll report due out tomorrow morning, the true market-moving events concern central banks and they don't occur until next week and the following, beginning with the ECB policy announcement on March 10, and the FOMC meeting March 15-16.
After ADP's February private sector number coming in at 214,000 Wednesday morning, the market is expecting something in that range from the BLS, with consensus just a shade below 200,000.
Whatever the number, it should weigh on any rate decision the Fed has planned or is considering. Another 25 basis point hike in the federal funds rate at this meeting has been largely discounted by the market, meaning, that if the Fed stands pat on rates, then it is tacit understanding that their goal of four more hikes by the end of the year is very much being scrapped.
There are simply too many negative forces pulling at the Fed for them to do another rate hike. Everything from the fragile US economy to the cratering Yuan and Chinese GDP growth to the nut-case presidential primaries are under consideration by the most politically-motivated central bank in the known universe.
That is to say nothing of the 1500-point hissy fit thrown by the DJIA after the most recent rate increase, in December of last year.
Stocks continue to keep to the script here, with the S&P within hailing distance of 2000, and the Dow closing in fast on 17,000. Both are admirable short-term goals, but they will hardly prove to be persistent. Stocks are becoming severely overbought and overvalued, and charts show all kinds of evidence that the bull run from 2009 has ended. Besides, there's growing fears of a recession looming, especially after the poor performance not only of the past two quarters, but of the general seven-year-long recovery.
The key level is 17,200 for the Dow, a point at which there is a significant patch of heavily-fortified resistance.
The Bureau of Labor Statistics (BLS) will release the February non-farm payroll report at 8:30 am ET, Friday.
S&P 500: 1,993.40, +6.95 (0.35%)
Dow: 16,943.90, +44.58 (0.26%)
NASDAQ: 4,707.42, +4.00 (0.09%)
Crude Oil 34.60 -0.17% Gold 1,262.10 +1.63% EUR/USD 1.0963 +0.89% 10-Yr Bond 1.83 -0.97% Corn 355.50 -0.21% Copper 2.21 +1.26% Silver 15.23 +1.38% Natural Gas 1.64 -2.09% Russell 2000 1,076.05 +0.97% VIX 16.70 -2.28% BATS 1000 20,677.17 0.00% GBP/USD 1.4178 +0.71% USD/JPY 113.65
Wednesday, March 2, 2016
Market Steady Ahead of NFP; ADP Reports Jobs Creation Strong
The snapback rally in stocks off the January lows cannot be understated, nor can it be stopped. There are simply not enough reasons to not own stocks, being that commodities have been decimated, bonds are beyond the reach or intellect of ordinary investors, and the fact that most of the investment advisors and fund managers of the world are reaching for yield, putting stocks first, to the detriment of everything and anything else.
But, today was a day for repositioning, after ADP got the party started by reporting that private employers added 214,000 jobs in February. [Full report here]
Stocks initially had the blues, trading in the red for most of the morning, until European markets closed, then quickly erasing all losses, hugging the UNCH line for the remainder of the session.
While stocks were lacking in volatility and volume, commodities got a bit of a boost, with oil, gold and silver headed handily higher.
It was a lackluster session due to uncertainty about next week's FOMC meeting, one which the Fed could conceivably raise interest rates, though analysts have largely dismissed that possibility.
The interim rally in stocks has, since the middle of February, clawed back more than two-thirds of the losses incurred during the six-week decline from the start of January to the middle of February. Nothing seems to be able to send stocks back to their 2016 lows, though getting back to all-time highs would be something of a surprise, considering the slow growth rates of economies around the world, and especially in developed nations.
There's a week left before the FOMC meeting, at which point sentiment may take a turn to the negative, though, if the Fed continues to keep rates at their abnormally low rates, the party crowd on Wall Street is likely to break out the champagne, hats, and favors, bidding up equities beyond reasonable valuations (some say they already have).
This is just normal churn, but no time to either stake out new positions nor panic. The markets seem content - like the US economy - to muddle along, delivering unsensational profits in a low-inflation, low-growth environment.
Friday's non-farm payroll report - as meaningless and unprovable as their spurious numbers might be - may provide some idea of sentiment going forward, but, at this point, the Fed is holding the most volatile hand of all the players, and they're not likely to bluff or fold. In typical Fed fashion, they'll be more likely to check, rather than raise the ante or call the hands.
Wednesday's Sleeper:
S&P 500: 1,986.45, +8.10 (0.41%)
DOW: 16,899.32, +34.24 (0.20%)
NASDAQ: 4,703.42, +13.83 (0.29%)
Crude Oil 34.65 +0.73% Gold 1,241.70 +0.89% EUR/USD 1.0867 -0.01% 10-Yr Bond 1.8480 +0.76% Corn 355.75 +0.07% Copper 2.19 +2.21% Silver 15.01 +1.69% Natural Gas 1.67 -4.13% Russell 2000 1,065.67 +1.06% VIX 17.12 -3.28% BATS 1000 20,677.17 0.00% GBP/USD 1.4079 +0.91% USD/JPY 113.38
But, today was a day for repositioning, after ADP got the party started by reporting that private employers added 214,000 jobs in February. [Full report here]
Stocks initially had the blues, trading in the red for most of the morning, until European markets closed, then quickly erasing all losses, hugging the UNCH line for the remainder of the session.
While stocks were lacking in volatility and volume, commodities got a bit of a boost, with oil, gold and silver headed handily higher.
It was a lackluster session due to uncertainty about next week's FOMC meeting, one which the Fed could conceivably raise interest rates, though analysts have largely dismissed that possibility.
The interim rally in stocks has, since the middle of February, clawed back more than two-thirds of the losses incurred during the six-week decline from the start of January to the middle of February. Nothing seems to be able to send stocks back to their 2016 lows, though getting back to all-time highs would be something of a surprise, considering the slow growth rates of economies around the world, and especially in developed nations.
There's a week left before the FOMC meeting, at which point sentiment may take a turn to the negative, though, if the Fed continues to keep rates at their abnormally low rates, the party crowd on Wall Street is likely to break out the champagne, hats, and favors, bidding up equities beyond reasonable valuations (some say they already have).
This is just normal churn, but no time to either stake out new positions nor panic. The markets seem content - like the US economy - to muddle along, delivering unsensational profits in a low-inflation, low-growth environment.
Friday's non-farm payroll report - as meaningless and unprovable as their spurious numbers might be - may provide some idea of sentiment going forward, but, at this point, the Fed is holding the most volatile hand of all the players, and they're not likely to bluff or fold. In typical Fed fashion, they'll be more likely to check, rather than raise the ante or call the hands.
Wednesday's Sleeper:
S&P 500: 1,986.45, +8.10 (0.41%)
DOW: 16,899.32, +34.24 (0.20%)
NASDAQ: 4,703.42, +13.83 (0.29%)
Crude Oil 34.65 +0.73% Gold 1,241.70 +0.89% EUR/USD 1.0867 -0.01% 10-Yr Bond 1.8480 +0.76% Corn 355.75 +0.07% Copper 2.19 +2.21% Silver 15.01 +1.69% Natural Gas 1.67 -4.13% Russell 2000 1,065.67 +1.06% VIX 17.12 -3.28% BATS 1000 20,677.17 0.00% GBP/USD 1.4079 +0.91% USD/JPY 113.38
Tuesday, March 1, 2016
Stars Align for Markets Amid Super Tuesday March Madness
While the Dems and Reps fight in various primaries for the right to represent as a party leader of the USA, US equity markets calmly said adieu at the opening bell and never gave a backward glance.
Tuesday's advance was one of the top three of the year, pushing off from the 50-day moving average on the Dow, which may well have been the anointed starting point for this leg of the extended rally. The close today was at the best level in nearly two months, something of a needed salve for banged-up bulls.
While there was little in the way of encouraging news for stocks to sound off so vociferously, there was certainly no absence of chart-wise subjectivism from which to spark.
As for a relationship to Donald Trump's or Hillary Clinton's seemingly unstoppable rise to become the nominee of their respective parties, there is probably none, though wiser people have made dumber bets that Hillary will be the eventual next president and further take out the case that she will be good for the economy. That happens to be the confirmed thinking of the status quo, which sees more Clinton-esque policies as somehow good for Wall Street (note: big hitters on the street have given heartily to her campaign and to the Clinton Foundation, whereas Mr. Trump has been largely self-funded).
Even bonds were in alignment with the general mood, the 10-year note closing at a multi-week high of 1.83%.
S&P 500: 1,978.35, +46.12 (2.39%)
Dow: 16,865.08, +348.58 (2.11%)
NASDAQ: 4,689.60, +131.65 (2.89%)
Crude Oil 34.39 +1.90% Gold 1,236.60 +0.18% EUR/USD 1.0871 -0.12% 10-Yr Bond 1.83 +5.40% Corn 356.00 -0.28% Copper 2.15 +0.63% Silver 14.92 +0.01% Natural Gas 1.74 +1.46% Russell 2000 1,054.49 +1.99% VIX 17.70 -13.87% BATS 1000 20,677.17 0.00% GBP/USD 1.3950 +0.17% USD/JPY 113.9270 +1.32%
Tuesday's advance was one of the top three of the year, pushing off from the 50-day moving average on the Dow, which may well have been the anointed starting point for this leg of the extended rally. The close today was at the best level in nearly two months, something of a needed salve for banged-up bulls.
While there was little in the way of encouraging news for stocks to sound off so vociferously, there was certainly no absence of chart-wise subjectivism from which to spark.
As for a relationship to Donald Trump's or Hillary Clinton's seemingly unstoppable rise to become the nominee of their respective parties, there is probably none, though wiser people have made dumber bets that Hillary will be the eventual next president and further take out the case that she will be good for the economy. That happens to be the confirmed thinking of the status quo, which sees more Clinton-esque policies as somehow good for Wall Street (note: big hitters on the street have given heartily to her campaign and to the Clinton Foundation, whereas Mr. Trump has been largely self-funded).
Even bonds were in alignment with the general mood, the 10-year note closing at a multi-week high of 1.83%.
S&P 500: 1,978.35, +46.12 (2.39%)
Dow: 16,865.08, +348.58 (2.11%)
NASDAQ: 4,689.60, +131.65 (2.89%)
Crude Oil 34.39 +1.90% Gold 1,236.60 +0.18% EUR/USD 1.0871 -0.12% 10-Yr Bond 1.83 +5.40% Corn 356.00 -0.28% Copper 2.15 +0.63% Silver 14.92 +0.01% Natural Gas 1.74 +1.46% Russell 2000 1,054.49 +1.99% VIX 17.70 -13.87% BATS 1000 20,677.17 0.00% GBP/USD 1.3950 +0.17% USD/JPY 113.9270 +1.32%
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