A frantic, algo-churning, late-day rally brought the US averages back to respectability, but stocks ended the week - and the month of April (no window dressing) - on a sour note Friday, with all the averages losing, but especially the NASDAQ, down more than 2.5% on the week.
The week's events included an ostensibly neutral FOMC policy meeting midweek, at which the Fed kept rates at their unusually-accomodative level, prompting speculation that their next meeting (June) might indeed move the federal funds rate from its current level of 0.25-0.50, another 25 basis points higher, to 0.50 to 0.75.
With credibility becoming more and more of an issue for central bankers globally, the rationale for another rate hike is obvious, though the wisdom of one would be suspect. A rise in rates would likely trigger another waterfall event in equities, something which the Fed wishes to avoid with all due intent.
However, with CPI running below their desired level of 2.0% and news Friday that first quarter GDP was an anemic 0.5%, barely above recession level, the assorted Ph.d. crowd in Washington seems trapped once more.
Looking ahead, the big number for the week will be Friday, when non-farm payrolls for April are released prior to the market open. In the interim, more companies will be reporting first quarter results, which have been moribund for the most part.
If trends continue at the current pace and in the same direction, there would be almost no reason for the Fed to raise rates in June, excepting that the almighty dollar may be coming under further pressure. The unwind of the USD/JPY pair carry trade is putting downward pressure on the dollar and doesn't appear to be abating.
If there was one bright spot for the manipulators-in-charge, it was in the oil patch, with WTI crude trading at multiple-month highs. With an enormous glut still affecting worldwide prices coupled with the refusal of major producers to slow their production speaks volumes to the lack of democracy in what should be a strict supply-demand market. Prices have nearly doubled since touching down in the $26 range earlier in the year, a move that may prove problematic and unsustainable.
More challenges to the status quo will appear this week and beyond, as there is almost nobody who believes in the tortured figures the BLS produces for jobs. Any uptick in the unemployment rate will be a shock and a body blow to the Fed's plans, with the potential not only of a complete stoppage rate increase talk, but a potential reversal and the specter of NIRP (negative interest rate policy), the same that has swept Japan and Europe to - and possibly over - the edge of the monetary cliff.
Meanwhile, the herd appears to be turning to investments without counter-party risk and no interest: gold and silver, which don't pay dividends but also do not require storage by a bank (unless in enormous quantity). It certainly seems that the age of fiat money is wobbling badly.
For the week:
Dow: -229.97 (1.28%)
S&P 500: -26.27 (1.26%)
NASDAQ: -130.87 (2.67%)
Friday's (un)Funnies:
S&P 500: 2,065.30, -10.51 (0.51%)
Dow: 17,773.64, -57.12 (0.32%)
NASDAQ: 4,775.36, -29.93 (0.62%)
Crude Oil 45.99 -0.09% Gold 1,296.30 +2.36% EUR/USD 1.1452 +0.88% 10-Yr Bond 1.82 -1.03% Corn 391.50 +0.06% Copper 2.28 +2.04% Silver 17.88 +1.63% Natural Gas 2.14 +3.03% Russell 2000 1,130.84 -0.84% VIX 15.72 +3.29% BATS 1000 20,677.17 0.00% GBP/USD 1.4610 +0.04% USD/JPY 106.3900 -1.58%
Friday, April 29, 2016
Thursday, April 28, 2016
US 1Q GDP 0.5%; Get Used To It
The US economy - which, according to official sources, grew by a non-robust 0.5% in the first quarter - is just fine... if you believe in stability.
Unfortunately for the the huckster on Wall Street, the liars in Washington, and the genii at the Fed, low or no growth is bad.
Well, screw them. And, get used to it. Simply just don't take any increase in price for anything, especially taxes or other government fees. In fact, smart people should be looking to avoid paying at all.
That's enough for today. Tomorrow will be the same.
Wall Street. Ugh!
S&P 500: 2,075.81, -19.34 (0.92%)
Dow: 17,830.76, -210.79 (1.17%)
NASDAQ: 4,805.29, -57.85 (1.19%)
Crude Oil 45.79 -0.52% Gold 1,268.20 +0.14% EUR/USD 1.1352 -0.01% 10-Yr Bond 1.84 -1.18% Corn 390.50 +1.49% Copper 2.23 -0.25% Silver 17.64 +0.30% Natural Gas 2.06 -0.91% Russell 2000 1,140.40 -1.19% VIX 15.22 +10.53% BATS 1000 20,677.17 0.00% GBP/USD 1.4608 +0.03% USD/JPY 108.1815 +0.08%
Unfortunately for the the huckster on Wall Street, the liars in Washington, and the genii at the Fed, low or no growth is bad.
Well, screw them. And, get used to it. Simply just don't take any increase in price for anything, especially taxes or other government fees. In fact, smart people should be looking to avoid paying at all.
That's enough for today. Tomorrow will be the same.
Wall Street. Ugh!
S&P 500: 2,075.81, -19.34 (0.92%)
Dow: 17,830.76, -210.79 (1.17%)
NASDAQ: 4,805.29, -57.85 (1.19%)
Crude Oil 45.79 -0.52% Gold 1,268.20 +0.14% EUR/USD 1.1352 -0.01% 10-Yr Bond 1.84 -1.18% Corn 390.50 +1.49% Copper 2.23 -0.25% Silver 17.64 +0.30% Natural Gas 2.06 -0.91% Russell 2000 1,140.40 -1.19% VIX 15.22 +10.53% BATS 1000 20,677.17 0.00% GBP/USD 1.4608 +0.03% USD/JPY 108.1815 +0.08%
Wednesday, April 27, 2016
Fed Leaves Rates Unchanged; Market Loves When Doves Fly
With only one member of the FOMC voting to raise rates (Ester George), the Fed decided to keep the federal funds rate at 1/4 to 1/2 percent.
The 9-1 vote was the expected result, being that conditions haven't changed much in the US economy since the last policy meeting in March. If anything, economic conditions have deteriorated, though the FOMC statement is chock-full of ambiguity and stocked with trap doors for easy escape should their policy need to change in any manner.
To wit:
The Fed is boxed in, unable to raise rates, and likely unwilling, given the most recent reaction to any rate hike: a massive selling spree of equities.
All the Fed can do right now is keep the policy somewhat coherent and hope the stock market continues to climb, despite all indications that the economy is very, very weak.
Tomorrow, prior to the market open, the initial estimate of first quarter GDP will be released, and, a week and a day later, non-farm payroll data for April will be announced. There's a solid chance that both numbers will be anemic, with GDP settling in a range somewhere between 0.5% and 1.0% and April jobs coming in somewhere south of 200,000.
But, according to the Fed, everything is simply wonderful. Carry on and don't fret. The next FOMC policy meeting isn't until June 14-15, so, there's a month-and-a-half before we all go through the dumbest guessing game ever... again. With such a short span between now and a potential rate increase, the odds of that happening are about the same as the federal funds rate, or, less than a one percent chance.
Thanks, Janet!
S&P 500: 2,095.15, +3.45 (0.16%)
Dow: 18,041.55, +51.23 (0.28%)
NASDAQ: 4,863.14, -25.14 (0.51%)
Crude Oil 45.31 +2.88% Gold 1,247.30 +0.31% EUR/USD 1.1323 +0.21% 10-Yr Bond 1.86 -3.68% Corn 384.25 -0.77% Copper 2.23 -0.67% Silver 17.25 +0.79% Natural Gas 2.15 -0.51% Russell 2000 1,154.15 +0.30% VIX 13.77 -1.36% BATS 1000 20,677.17 0.00% GBP/USD 1.4542 -0.22% USD/JPY 111.4850 +0.18%
The 9-1 vote was the expected result, being that conditions haven't changed much in the US economy since the last policy meeting in March. If anything, economic conditions have deteriorated, though the FOMC statement is chock-full of ambiguity and stocked with trap doors for easy escape should their policy need to change in any manner.
To wit:
Information received since the Federal Open Market Committee met in March indicates that labor market conditions have improved further even as growth in economic activity appears to have slowed. Growth in household spending has moderated, although households' real income has risen at a solid rate and consumer sentiment remains high. Since the beginning of the year, the housing sector has improved further but business fixed investment and net exports have been soft.
The Fed is boxed in, unable to raise rates, and likely unwilling, given the most recent reaction to any rate hike: a massive selling spree of equities.
All the Fed can do right now is keep the policy somewhat coherent and hope the stock market continues to climb, despite all indications that the economy is very, very weak.
Tomorrow, prior to the market open, the initial estimate of first quarter GDP will be released, and, a week and a day later, non-farm payroll data for April will be announced. There's a solid chance that both numbers will be anemic, with GDP settling in a range somewhere between 0.5% and 1.0% and April jobs coming in somewhere south of 200,000.
But, according to the Fed, everything is simply wonderful. Carry on and don't fret. The next FOMC policy meeting isn't until June 14-15, so, there's a month-and-a-half before we all go through the dumbest guessing game ever... again. With such a short span between now and a potential rate increase, the odds of that happening are about the same as the federal funds rate, or, less than a one percent chance.
Thanks, Janet!
S&P 500: 2,095.15, +3.45 (0.16%)
Dow: 18,041.55, +51.23 (0.28%)
NASDAQ: 4,863.14, -25.14 (0.51%)
Crude Oil 45.31 +2.88% Gold 1,247.30 +0.31% EUR/USD 1.1323 +0.21% 10-Yr Bond 1.86 -3.68% Corn 384.25 -0.77% Copper 2.23 -0.67% Silver 17.25 +0.79% Natural Gas 2.15 -0.51% Russell 2000 1,154.15 +0.30% VIX 13.77 -1.36% BATS 1000 20,677.17 0.00% GBP/USD 1.4542 -0.22% USD/JPY 111.4850 +0.18%
Tuesday, April 26, 2016
Stocks Stall Ahead Of FOMC; Apple Bytes
Not much in the way of movement happened with stocks as participants were more than willing to wait for tomorrow's non-event from the FOMC, in which the Fed governors are likely to double-down on their dovish rate policy, owing either to market pressures or the near-undeniability that the global economy is defunct without further central bank stimulus.
It is what the banker mobs have wrought: an economy devoid of social or economic mobility, except to the downside, as government and ultra-national corporations crowds out any meaningful enterprise.
After hours, Apple (AAPL) reported earnings for the first quarter, missing on both the top and bottom line, adding more credence to the global slowdown meme. Shares were trading more than seven percent lower in the after-hours.
At 2:00 pm EDT, the FOMC will issue their rate policy decision, keeping the federal funds rate at 0.25-0.50%, which might produce some happiness for the Wall Streeters, however, considering the paucity of positive earnings results this quarter and the anticipation of an ugly first quarter GDP estimate on Thursday (8:30 am), there may be few players prepared to rally.
In all, it's a messy situation which cannot be solved by conventional means at this point, that point being one in which "emergency" measures have been stretched out to seven years. The global economy is beyond the scope of the central bankers' control, a condition that is probably, in the long run, for the best.
Tuesday's Tiptoe:
S&P 500: 2,091.70, +3.91 (0.19%)
Dow: 17,990.32, +13.08 (0.07%)
NASDAQ: 4,888.31, -7.48 (0.15%)
Crude Oil 44.04 +3.28% Gold 1,245.20 +0.40% EUR/USD 1.1301 +0.26% 10-Yr Bond 1.93 +1.52% Corn 385.00 +0.85% Copper 2.25 -0.07% Silver 17.16 +0.89% Natural Gas 2.16 -1.01% Russell 2000 1,150.73 +1.11% VIX 13.96 -0.85% BATS 1000 20,682.61 0.00% GBP/USD 1.4582 +0.68% USD/JPY 111.3150 +0.07%
It is what the banker mobs have wrought: an economy devoid of social or economic mobility, except to the downside, as government and ultra-national corporations crowds out any meaningful enterprise.
After hours, Apple (AAPL) reported earnings for the first quarter, missing on both the top and bottom line, adding more credence to the global slowdown meme. Shares were trading more than seven percent lower in the after-hours.
At 2:00 pm EDT, the FOMC will issue their rate policy decision, keeping the federal funds rate at 0.25-0.50%, which might produce some happiness for the Wall Streeters, however, considering the paucity of positive earnings results this quarter and the anticipation of an ugly first quarter GDP estimate on Thursday (8:30 am), there may be few players prepared to rally.
In all, it's a messy situation which cannot be solved by conventional means at this point, that point being one in which "emergency" measures have been stretched out to seven years. The global economy is beyond the scope of the central bankers' control, a condition that is probably, in the long run, for the best.
Tuesday's Tiptoe:
S&P 500: 2,091.70, +3.91 (0.19%)
Dow: 17,990.32, +13.08 (0.07%)
NASDAQ: 4,888.31, -7.48 (0.15%)
Crude Oil 44.04 +3.28% Gold 1,245.20 +0.40% EUR/USD 1.1301 +0.26% 10-Yr Bond 1.93 +1.52% Corn 385.00 +0.85% Copper 2.25 -0.07% Silver 17.16 +0.89% Natural Gas 2.16 -1.01% Russell 2000 1,150.73 +1.11% VIX 13.96 -0.85% BATS 1000 20,682.61 0.00% GBP/USD 1.4582 +0.68% USD/JPY 111.3150 +0.07%
Monday, April 25, 2016
Dull Start As New Home Sales Fall For Third Straight Month
Wall Street wasn't particularly troubled over the fact that new home sales fell for the third month in a row, and by the end of the day, it hardly mattered, as stocks staged a mild comeback from opening losses.
The drop of 1.5% (511,000 annualized, seasonally adjusted) was led by a huge, 23.6% plunge in the West, according to the commerce department. The median home price also fell, to 288,000, a level many are finding difficult to justify.
For instance, even at today's low rates, a $250,000, 30-year mortgage runs $1,088 per month, with interest paid over the life of the loan of $141,686, making the total amount paid a stunning $391,686. With more than half the wage-earners in the United States making less than $30,000 per year, that's a price too high to bear, but, that's what the Fed has thrust upon would-be homebuyers in their quest to boost asset prices and inflation.
Many new-home buyers of today will find themselves stuck - like many home owners during the sub=prime bust - if interest rates rise over the coming years. Not only will these buyers be burdened by an enormous debt, their properties would become unsalable, due to a glut on the market and higher carrying costs. That same $250,000 mortgage, at, say 5%, would jump to $1,342, making the now-used home even less affordable and the current residents trapped in an underwater condition.
It's actually surprising that anybody is actually building and buying new homes. The prices are at astronomical levels. The median home price may actually have peaked a few months ago, hitting a record 317,000 in November, 2015, setting the stage for another round of hand-wringing by banks and homeowners alike when the next recession hits, something for which the US economy is now overdue. It's been eight years since the last one and the Fed has not convinced anyone that it has finally vanquished the business cycle; they've only managed to delay the inevitable.
Speaking of the Fed, the FOMC begins a two-day meeting at which they will do nothing other than remind the world that they are in control of everything and that the US economy is still not to their liking, meaning another rate hike is still months away, if at all. Normalizing rates may prove to be the undoing of central banking, because it will absolutely destroy many leveraged, hedged market constituents.
Monday's Mangled Mess:
S&P 500: 2,087.79, -3.79 (0.18%)
Dow: 17,977.24, -26.51 (0.15%)
NASDAQ: 4,895.79, -10.44 (0.21%)
Crude Oil 42.86 -1.99% Gold 1,239.10 +0.74% EUR/USD 1.1269 +0.42% 10-Yr Bond 1.90 +0.74% Corn 384.50 +2.40% Copper 2.25 -0.60% Silver 16.99 +0.53% Natural Gas 2.19 -3.22% Russell 2000 1,138.09 -0.75% VIX 14.08 +6.51% BATS 1000 20,682.61 0.00% GBP/USD 1.4483 +0.16% USD/JPY 111.1950 -0.56%
The drop of 1.5% (511,000 annualized, seasonally adjusted) was led by a huge, 23.6% plunge in the West, according to the commerce department. The median home price also fell, to 288,000, a level many are finding difficult to justify.
For instance, even at today's low rates, a $250,000, 30-year mortgage runs $1,088 per month, with interest paid over the life of the loan of $141,686, making the total amount paid a stunning $391,686. With more than half the wage-earners in the United States making less than $30,000 per year, that's a price too high to bear, but, that's what the Fed has thrust upon would-be homebuyers in their quest to boost asset prices and inflation.
Many new-home buyers of today will find themselves stuck - like many home owners during the sub=prime bust - if interest rates rise over the coming years. Not only will these buyers be burdened by an enormous debt, their properties would become unsalable, due to a glut on the market and higher carrying costs. That same $250,000 mortgage, at, say 5%, would jump to $1,342, making the now-used home even less affordable and the current residents trapped in an underwater condition.
It's actually surprising that anybody is actually building and buying new homes. The prices are at astronomical levels. The median home price may actually have peaked a few months ago, hitting a record 317,000 in November, 2015, setting the stage for another round of hand-wringing by banks and homeowners alike when the next recession hits, something for which the US economy is now overdue. It's been eight years since the last one and the Fed has not convinced anyone that it has finally vanquished the business cycle; they've only managed to delay the inevitable.
Speaking of the Fed, the FOMC begins a two-day meeting at which they will do nothing other than remind the world that they are in control of everything and that the US economy is still not to their liking, meaning another rate hike is still months away, if at all. Normalizing rates may prove to be the undoing of central banking, because it will absolutely destroy many leveraged, hedged market constituents.
Monday's Mangled Mess:
S&P 500: 2,087.79, -3.79 (0.18%)
Dow: 17,977.24, -26.51 (0.15%)
NASDAQ: 4,895.79, -10.44 (0.21%)
Crude Oil 42.86 -1.99% Gold 1,239.10 +0.74% EUR/USD 1.1269 +0.42% 10-Yr Bond 1.90 +0.74% Corn 384.50 +2.40% Copper 2.25 -0.60% Silver 16.99 +0.53% Natural Gas 2.19 -3.22% Russell 2000 1,138.09 -0.75% VIX 14.08 +6.51% BATS 1000 20,682.61 0.00% GBP/USD 1.4483 +0.16% USD/JPY 111.1950 -0.56%
Sunday, April 24, 2016
Stocks Finish Week In Volatile, Split Fashion; FOMC, BOJ To Drive Markets Last Week Of April
Nothing monumental was happening in the markets on Friday, but the mood was decidedly risk-averse heading into the weekend. The week as a whole mirrored Friday, with the Dow and S&P showing small gains while the NASDAQ took on water.
For the week:
DOW: +106.29 (0.59%)
S&P 500: +10.85 (0.52%)
NASDAQ: -31.99 (0.65%)
The week was among the lesser moves of the year, though it became apparent that the markets were testing the upper limits of their recent range. While the Dow managed to finish just above the 18,000 mark, the S&P remained at a critical inflection point at 2091-2092, almost by magic. Moving above the 2100 mark - which the SPX accomplished mid-week - may prove to be short-lived if investors take recent earnings weakness seriously, though that position is still debatable, considering the virtually unlimited power of the Fed and associated central banks in Japan (BOJ) and Europe (ECB) to print, cajole and promote inflationary, free-money policies.
Central banks cannot, however, remain the only vital force in the markets forever. More and more voices are beginning to openly question the intelligence of placing blind faith in the currency-controllers and are advising that a return to "normalcy" is something the Fed cannot and probably will not approach in the near term. Among them David Stockman, Jeff Gundlach, Bill Gross have been the latest to scoff at the Fed's financially-repressive control policies.
Notwithstanding the naysayers, the Fed, BOJ and ECB continue to stay the course. While Mario Draghi of the ECB didn't move markets one iota with his stand pat position this week, the Fed will likely accomplish little with their FOMC meeting this week (Tuesday and Wednesday), though the BOJ is considering lowering its key interest rate further into the red. The BOJ's next two-day policy review ends on April 28 (Thursday).
The coming week will be focused on central bank nothingness rather than fundamentals, which is what the complainers have been howling about for some time.
Expect their voices to become more numerous and louder if the global economy continues to sputter and stall.
FRIDAY'S FUMBLING:
S&P 500: 2,091.58, +0.10 (0.00%)
Dow: 18,003.75, +21.23 (0.12%)
NASDAQ: 4,906.23, -39.66 (0.80%)
Crude Oil 43.71 +1.23% Gold 1,234.90 -1.23% EUR/USD 1.1228 -0.55% 10-Yr Bond 1.89 +0.96% Corn 378.25 -2.95% Copper 2.27 +0.93% Silver 16.97 -0.73% Natural Gas 2.26 +2.13% Russell 2000 1,144.24 +0.75% VIX 13.34 -4.37% BATS 1000 20,682.61 0.00% GBP/USD 1.4413 +0.63% USD/JPY 111.6330 +2.02%
For the week:
DOW: +106.29 (0.59%)
S&P 500: +10.85 (0.52%)
NASDAQ: -31.99 (0.65%)
The week was among the lesser moves of the year, though it became apparent that the markets were testing the upper limits of their recent range. While the Dow managed to finish just above the 18,000 mark, the S&P remained at a critical inflection point at 2091-2092, almost by magic. Moving above the 2100 mark - which the SPX accomplished mid-week - may prove to be short-lived if investors take recent earnings weakness seriously, though that position is still debatable, considering the virtually unlimited power of the Fed and associated central banks in Japan (BOJ) and Europe (ECB) to print, cajole and promote inflationary, free-money policies.
Central banks cannot, however, remain the only vital force in the markets forever. More and more voices are beginning to openly question the intelligence of placing blind faith in the currency-controllers and are advising that a return to "normalcy" is something the Fed cannot and probably will not approach in the near term. Among them David Stockman, Jeff Gundlach, Bill Gross have been the latest to scoff at the Fed's financially-repressive control policies.
Notwithstanding the naysayers, the Fed, BOJ and ECB continue to stay the course. While Mario Draghi of the ECB didn't move markets one iota with his stand pat position this week, the Fed will likely accomplish little with their FOMC meeting this week (Tuesday and Wednesday), though the BOJ is considering lowering its key interest rate further into the red. The BOJ's next two-day policy review ends on April 28 (Thursday).
The coming week will be focused on central bank nothingness rather than fundamentals, which is what the complainers have been howling about for some time.
Expect their voices to become more numerous and louder if the global economy continues to sputter and stall.
FRIDAY'S FUMBLING:
S&P 500: 2,091.58, +0.10 (0.00%)
Dow: 18,003.75, +21.23 (0.12%)
NASDAQ: 4,906.23, -39.66 (0.80%)
Crude Oil 43.71 +1.23% Gold 1,234.90 -1.23% EUR/USD 1.1228 -0.55% 10-Yr Bond 1.89 +0.96% Corn 378.25 -2.95% Copper 2.27 +0.93% Silver 16.97 -0.73% Natural Gas 2.26 +2.13% Russell 2000 1,144.24 +0.75% VIX 13.34 -4.37% BATS 1000 20,682.61 0.00% GBP/USD 1.4413 +0.63% USD/JPY 111.6330 +2.02%
Thursday, April 21, 2016
With Central Banks Losing Control, Markets Begin Wild Gyrations
In the aftermath of the Deustche Bank revelations that they and other banking concerns engaged in explicit manipulation of gold and silver prices and markets (assuredly, among others), and in anticipation of various central bank announcements, proclamations and policy nonsense, as of today, markets seem to have become somewhat disjointed and erratic.
Witness the madness in precious metals that began in earnest with the opening of the Shanghai Gold Exchange (SGE) daily gold fix priced in yuan, the price of gold shot up $20 when ECB President Mario Draghi left European markets with no new monetary ammunition, and then retreated without reason, ostensibly the controllers in the West reacting to the challenge having been thrown down by the Chinese.
It was a somewhat similar condition in the silver price, which whipped up to $17.65 in early morning trading, only to be slammed down moments later on the NYMEX, below $17. The prices of both gold and silver recovered, but the message is clear: the London gold fixers and those in China are at odds over what should be the true price of precious metals.
There is a solution to this, and that would be to allow markets to work, by outlawing naked shorting, bid stuffing on the CME, high frequency trading and other tools of manipulation. Letting the market decide on the price would be a satisfactory conclusion to what is rapidly turning into an economic war zone, but it is also quite possible the opposing parties could begin using actual guns, bullets, warships and bombs to settle their differences. It is evident that the long-established edge of US monetary hegemony, via the dollar as reserve currency, is coming to an end, and with that, the era of unbacked, unsound money (fiat).
The easiest and most prudent advice to investors at this juncture would be to buy gold - and more importantly silver, since it has been so viciously violated by the bankers over the years - as quickly as possible, and in as much quantity as one can reasonably afford.
US stocks also experienced something of a double dip, once in the early trading and again just before and after noon, which ended up being the move of the day, as the Dow suffered its worst day in three weeks, with the major indices backing off from recent highs, promoted via vapid and obfuscated corporate earnings reports. While the media has been largely hushed over first quarter earnings, the truth of the matter is that most companies are not keeping up with projections, though they are beating lowered expectations. Many companies are reporting positive earnings, no doubt, but they are also lower than what they reported in the year-ago period. Once again, gains in stock prices can generally be attributed to easy monetary policy, cartel-like trading (the same big banks that brought us the last financial crash in 2008-09), and an astounding amount of group-think, wherein nobody bothers with fundamental analysis, but relies more on the whims of the moment, otherwise known as momentum trading.
Get ready for more volatility, as more and more students of the markets realize just how distorted the policies of the various powerful central banks have been.
Today's Closing Numbers:
S&P 500: 2,091.48, -10.92 (0.52%)
Dow: 17,982.52, -113.75 (0.63%)
NASDAQ: 4,945.89, -2.24 (0.05%)
Crude Oil 43.43 -1.70% Gold 1,250.10 -0.02% EUR/USD 1.1289 0.00% 10-Yr Bond 1.87 +0.86% Corn 394.00 +1.09% Copper 2.25 +0.07% Silver 17.03 -0.35% Natural Gas 2.06 -0.43% Russell 2000 1,135.77 -0.57% VIX 13.95 +5.05% BATS 1000 20,682.61 0.00% GBP/USD 1.4317 -0.04% USD/JPY 109.4370 +0.02%
Witness the madness in precious metals that began in earnest with the opening of the Shanghai Gold Exchange (SGE) daily gold fix priced in yuan, the price of gold shot up $20 when ECB President Mario Draghi left European markets with no new monetary ammunition, and then retreated without reason, ostensibly the controllers in the West reacting to the challenge having been thrown down by the Chinese.
It was a somewhat similar condition in the silver price, which whipped up to $17.65 in early morning trading, only to be slammed down moments later on the NYMEX, below $17. The prices of both gold and silver recovered, but the message is clear: the London gold fixers and those in China are at odds over what should be the true price of precious metals.
There is a solution to this, and that would be to allow markets to work, by outlawing naked shorting, bid stuffing on the CME, high frequency trading and other tools of manipulation. Letting the market decide on the price would be a satisfactory conclusion to what is rapidly turning into an economic war zone, but it is also quite possible the opposing parties could begin using actual guns, bullets, warships and bombs to settle their differences. It is evident that the long-established edge of US monetary hegemony, via the dollar as reserve currency, is coming to an end, and with that, the era of unbacked, unsound money (fiat).
The easiest and most prudent advice to investors at this juncture would be to buy gold - and more importantly silver, since it has been so viciously violated by the bankers over the years - as quickly as possible, and in as much quantity as one can reasonably afford.
US stocks also experienced something of a double dip, once in the early trading and again just before and after noon, which ended up being the move of the day, as the Dow suffered its worst day in three weeks, with the major indices backing off from recent highs, promoted via vapid and obfuscated corporate earnings reports. While the media has been largely hushed over first quarter earnings, the truth of the matter is that most companies are not keeping up with projections, though they are beating lowered expectations. Many companies are reporting positive earnings, no doubt, but they are also lower than what they reported in the year-ago period. Once again, gains in stock prices can generally be attributed to easy monetary policy, cartel-like trading (the same big banks that brought us the last financial crash in 2008-09), and an astounding amount of group-think, wherein nobody bothers with fundamental analysis, but relies more on the whims of the moment, otherwise known as momentum trading.
Get ready for more volatility, as more and more students of the markets realize just how distorted the policies of the various powerful central banks have been.
Today's Closing Numbers:
S&P 500: 2,091.48, -10.92 (0.52%)
Dow: 17,982.52, -113.75 (0.63%)
NASDAQ: 4,945.89, -2.24 (0.05%)
Crude Oil 43.43 -1.70% Gold 1,250.10 -0.02% EUR/USD 1.1289 0.00% 10-Yr Bond 1.87 +0.86% Corn 394.00 +1.09% Copper 2.25 +0.07% Silver 17.03 -0.35% Natural Gas 2.06 -0.43% Russell 2000 1,135.77 -0.57% VIX 13.95 +5.05% BATS 1000 20,682.61 0.00% GBP/USD 1.4317 -0.04% USD/JPY 109.4370 +0.02%
Wednesday, April 20, 2016
Stocks Continue Relentless Drive Toward New Highs; Mass Hysteria Cited
It's still April, so there's still a possibility that the ongoing rise in stock prices is the result of a wickedly good April Fool's prank. There may be better explanations for the phenomena, but fundamental valuations surely isn't one of them.
With today's close, the Dow Industrials crept back to within a mere 250 points intraday of all-time highs made in May of 2015, which begs the question, "what took it so long?"
Since the second half of 2015 and the first quarter of 2016 wasn't a recession, nor were there any earth-shattering geopolitical events which could have precluded an incessant rise to new all-time highs, those with more reason than most will just consider the long stalled out "recovery" something of a market hiccup, as opposed to a burp, or something stinky coming from somewhere else on the body of finance.
Surely, the financial world is still functioning at full tilt, with greater fools born into the market without interruption. The manic buying of shares representing companies whose earnings are smaller than last year's suggests a new - or newer - paradigm shift, from simple speculation to outright gambling, naturally, with other people's money, mind you.
Strangely enough, the stocks which have led the charge in the past seven trading days have been banks. The largest, including Citigroup (C), Bank of America (BAC), JP Morgan Chase (JPM), and Wells Fargo (WFC), all reported last week and were less-than-encouraging, typically with marginal beats on lowered EPS expectations, and lower revenue overall, especially in their trading units.
Not to worry, stocks fell off their highs late in the day, ending with small gains. After all, since today is 4/20, there's incentive to chill out and eat Cheetos.
Wad up, Mon?
S&P 500: 2,102.40, +1.60 (0.08%)
Dow: 18,096.27, +42.67 (0.24%)
NASDAQ: 4,948.13, +7.80 (0.16%)
Crude Oil 43.92 +3.41% Gold 1,244.80 -0.76% EUR/USD 1.1299 -0.50% 10-Yr Bond 1.8540 +3.98% Corn 396.50 +1.80% Copper 2.23 +0.49% Silver 16.99 +0.08% Natural Gas 2.07 -0.81% Russell 2000 1,142.82 +0.23% VIX 13.29 +0.38% BATS 1000 20,682.61 0.00% GBP/USD 1.4339 -0.36% USD/JPY 109.77 +0.44%
With today's close, the Dow Industrials crept back to within a mere 250 points intraday of all-time highs made in May of 2015, which begs the question, "what took it so long?"
Since the second half of 2015 and the first quarter of 2016 wasn't a recession, nor were there any earth-shattering geopolitical events which could have precluded an incessant rise to new all-time highs, those with more reason than most will just consider the long stalled out "recovery" something of a market hiccup, as opposed to a burp, or something stinky coming from somewhere else on the body of finance.
Surely, the financial world is still functioning at full tilt, with greater fools born into the market without interruption. The manic buying of shares representing companies whose earnings are smaller than last year's suggests a new - or newer - paradigm shift, from simple speculation to outright gambling, naturally, with other people's money, mind you.
Strangely enough, the stocks which have led the charge in the past seven trading days have been banks. The largest, including Citigroup (C), Bank of America (BAC), JP Morgan Chase (JPM), and Wells Fargo (WFC), all reported last week and were less-than-encouraging, typically with marginal beats on lowered EPS expectations, and lower revenue overall, especially in their trading units.
Not to worry, stocks fell off their highs late in the day, ending with small gains. After all, since today is 4/20, there's incentive to chill out and eat Cheetos.
Wad up, Mon?
S&P 500: 2,102.40, +1.60 (0.08%)
Dow: 18,096.27, +42.67 (0.24%)
NASDAQ: 4,948.13, +7.80 (0.16%)
Crude Oil 43.92 +3.41% Gold 1,244.80 -0.76% EUR/USD 1.1299 -0.50% 10-Yr Bond 1.8540 +3.98% Corn 396.50 +1.80% Copper 2.23 +0.49% Silver 16.99 +0.08% Natural Gas 2.07 -0.81% Russell 2000 1,142.82 +0.23% VIX 13.29 +0.38% BATS 1000 20,682.61 0.00% GBP/USD 1.4339 -0.36% USD/JPY 109.77 +0.44%
Tuesday, April 19, 2016
Silver Pops Above $17/oz.; Intel Slashes 11,000 Jobs; Markets Steady
...and the beat goes on.
How long will it take before the majority of traders realize they've been fed a pack of lies in non-GAAP earnings reports, loaded with non-recurring, one-time charges, which oddly keep cropping up every other quarter, and profits that are the result of stock buybacks (fewer shares equals higher EPS)?
For most, the answer is "too long." Since Wall Street can only make money if stocks appear to be good investments - and that concept is quickly fleeing the coop - and have the confidence of investors, the con game of lowered expectations and "beats" will keep the dancers dancing well past midnight and into the wee hours of the morning.
When the party does finally end, there are going to be a lot of long faces, hung-over losers and poor explanations for why the market simply didn't keep going up forever and ever and ever. Central bankers the world over will be falling over each other before that happens, though, because where goes Wall Street, so goes central bank - and thus, fiat money - credibility, and that must be maintained at all costs, which just might include printing trillions and trillions more dollars, euros and yen before the money finds its justifiable price, that being the cost of ink on paper, or, essentially, nothing.
So, when pensioners find their nest eggs shattered and barren, and are being told that the paper promises are not going to be honored, it will be too late for the masses.
Only those free of debt, with some reasonable amount of hard assets - land, building, machinery, tools, art, gemstones, silver, and gold - will be whole and beholding to nobody. The rest will have to fend for themselves and their families as best as they can.
It is against this backdrop that the recent rise in the value of silver becomes important. Gold's little brother has risen from an even $14/ounce to close today just under 17 dollars an ounce, making it the best-performing asset of the year, passing by gold in the process.
There are numerous reasons that silver has been set afire in recent days. Less than a week ago, Deustche Bank agreed to settle lawsuits claiming the bank had engaged in price manipulation of silver as well as gold. This admission really put the afterburners to an already hopped-up commodity. Gold has been slower to respond, likely because silver had been manipulated much lower for much longer.
Traditionally, silver had been valued in relation to gold at anywhere from 16 to 20 ounces of silver to one ounce of gold. Earlier this year, the gold:silver ratio screamed above 80, signifying that silver was likely undervalued by a magnitude of four. In other words, the true value of silver must come back to historical norms, either by the price of gold falling dramatically, or the price of silver rising astronomically (i.e., silver, at a 16:1 ratio to gold, would be selling for $78/ounce, with gold at $1250, where it currently resides).
What is a more plausible outcome is that - and this process could take several years, maybe as many as ten - both gold and silver will rise, though silver will rise at a much faster pace, eventually coming in line at 20:1 per ounce of gold. Both precious metals will see enormous advances in coming years as currencies depreciate and eventually die, paramount among them the Japanese Yen, the Euro, and the US Dollar, since the currencies of the most developed nations are also the most at risk, due to many factors, not the least of which being the excessive levels of debt held by the general public and government.
The Fed, the ECB and the BOJ will print to infinity, eventually bankrupting their counties and their currencies. Holders of gold and silver will be rewarded for both their vision and their patience.
The process has begun, but only those willing to hold an asset that offers no interest or rate of return, but also does not carry any counter-party risk, will prosper. Dollars, Yen and Euro will eventually devalue and finally default.
In the words of James Pierpont (J.P.) Morgan, spoken in 1912, a year before he helped launch the Federal Reserve:
Today's closing figures:
S&P 500: 2,100.80, +6.46 (0.31%)
Dow: 18,053.60, +49.44 (0.27%)
NASDAQ: 4,940.33, -19.69 (0.40%)
Crude Oil 42.46 +3.08% Gold 1,251.80 +1.36% EUR/USD 1.1359 +0.41% 10-Yr Bond 1.78 +0.56% Corn 383.50 +0.66% Copper 2.23 +2.84% Silver 16.96 +4.35% Natural Gas 2.09 +7.63% Russell 2000 1,140.23 +0.08% VIX 13.24 -0.82% BATS 1000 20,682.61 0.00% GBP/USD 1.4394 +0.82% USD/JPY 109.1975 +0.33%
How long will it take before the majority of traders realize they've been fed a pack of lies in non-GAAP earnings reports, loaded with non-recurring, one-time charges, which oddly keep cropping up every other quarter, and profits that are the result of stock buybacks (fewer shares equals higher EPS)?
For most, the answer is "too long." Since Wall Street can only make money if stocks appear to be good investments - and that concept is quickly fleeing the coop - and have the confidence of investors, the con game of lowered expectations and "beats" will keep the dancers dancing well past midnight and into the wee hours of the morning.
When the party does finally end, there are going to be a lot of long faces, hung-over losers and poor explanations for why the market simply didn't keep going up forever and ever and ever. Central bankers the world over will be falling over each other before that happens, though, because where goes Wall Street, so goes central bank - and thus, fiat money - credibility, and that must be maintained at all costs, which just might include printing trillions and trillions more dollars, euros and yen before the money finds its justifiable price, that being the cost of ink on paper, or, essentially, nothing.
So, when pensioners find their nest eggs shattered and barren, and are being told that the paper promises are not going to be honored, it will be too late for the masses.
Only those free of debt, with some reasonable amount of hard assets - land, building, machinery, tools, art, gemstones, silver, and gold - will be whole and beholding to nobody. The rest will have to fend for themselves and their families as best as they can.
It is against this backdrop that the recent rise in the value of silver becomes important. Gold's little brother has risen from an even $14/ounce to close today just under 17 dollars an ounce, making it the best-performing asset of the year, passing by gold in the process.
There are numerous reasons that silver has been set afire in recent days. Less than a week ago, Deustche Bank agreed to settle lawsuits claiming the bank had engaged in price manipulation of silver as well as gold. This admission really put the afterburners to an already hopped-up commodity. Gold has been slower to respond, likely because silver had been manipulated much lower for much longer.
Traditionally, silver had been valued in relation to gold at anywhere from 16 to 20 ounces of silver to one ounce of gold. Earlier this year, the gold:silver ratio screamed above 80, signifying that silver was likely undervalued by a magnitude of four. In other words, the true value of silver must come back to historical norms, either by the price of gold falling dramatically, or the price of silver rising astronomically (i.e., silver, at a 16:1 ratio to gold, would be selling for $78/ounce, with gold at $1250, where it currently resides).
What is a more plausible outcome is that - and this process could take several years, maybe as many as ten - both gold and silver will rise, though silver will rise at a much faster pace, eventually coming in line at 20:1 per ounce of gold. Both precious metals will see enormous advances in coming years as currencies depreciate and eventually die, paramount among them the Japanese Yen, the Euro, and the US Dollar, since the currencies of the most developed nations are also the most at risk, due to many factors, not the least of which being the excessive levels of debt held by the general public and government.
The Fed, the ECB and the BOJ will print to infinity, eventually bankrupting their counties and their currencies. Holders of gold and silver will be rewarded for both their vision and their patience.
The process has begun, but only those willing to hold an asset that offers no interest or rate of return, but also does not carry any counter-party risk, will prosper. Dollars, Yen and Euro will eventually devalue and finally default.
In the words of James Pierpont (J.P.) Morgan, spoken in 1912, a year before he helped launch the Federal Reserve:
Gold is Money. Everything Else is Credit.
Today's closing figures:
S&P 500: 2,100.80, +6.46 (0.31%)
Dow: 18,053.60, +49.44 (0.27%)
NASDAQ: 4,940.33, -19.69 (0.40%)
Crude Oil 42.46 +3.08% Gold 1,251.80 +1.36% EUR/USD 1.1359 +0.41% 10-Yr Bond 1.78 +0.56% Corn 383.50 +0.66% Copper 2.23 +2.84% Silver 16.96 +4.35% Natural Gas 2.09 +7.63% Russell 2000 1,140.23 +0.08% VIX 13.24 -0.82% BATS 1000 20,682.61 0.00% GBP/USD 1.4394 +0.82% USD/JPY 109.1975 +0.33%
Monday, April 18, 2016
Dow Tops 18,000. Why?
Just guessing, but the last time the Dow was trading at or above 18,000 was sometime in the summer of 2015, probably prior to August.
Be that as it may, having the Dow trading at the level it was nine months ago means that something must have been amiss, because, certainly, the indices are always rising, aren't they?
The number 18,000 poses more questions than answers, to which Money Daily offers none, only more questions as to the sustainability of such an awesome, inspired number, fully without any kind of fundamental support, since the quality of corporate earnings has been disintegrating at an astonishing rate.
Not only that, but the obfuscation and sheer audacity of the lies and pro forma earnings releases (as opposed to the traditionally well-favored GAAP) leads one to believe that the market has lost all bearings and is about to crash upon some unseen shoals while the cruiser's captain is nodded out, asleep at the wheel.
Alas, the market has no captain, as contrary to the desires of the Janet Yellens, Mario Draghis or even George Soroses (some kind of disease, there) of the world might think otherwise.
No, the market is a mechanism of many moving parts, and, being such, can be wound to whatever pulsation or amplitude any broken parts may render it. Make no mistake, there are many broken parts to the market, especially when it comes to equity markets, where valuations have been so absurdly distorted as to become meaningless in a value-oriented frame of mind.
Nevertheless, here we are, so break out the party hats?
Next up: the NASDAQ blasts through the 5,000 barrier.
Really?
S&P 500: 2,094.34, +13.61 (0.65%)
Dow: 18,004.16, +106.70 (0.60%)
NASDAQ: 4,960.02, +21.80 (0.44%)
Crude Oil 41.28 -1.03% Gold 1,230.30 -0.38% EUR/USD 1.1310 -0.02% 10-Yr Bond 1.77 +1.20% Corn 380.50 -0.13% Copper 2.16 -0.02% Silver 16.19 -0.36% Natural Gas 1.94 +1.84% Russell 2000 1,139.28 +0.74% VIX 13.35 -1.98% BATS 1000 20,682.61 0.00% GBP/USD 1.4290 +0.10% USD/JPY 109.1170 +0.26%
Be that as it may, having the Dow trading at the level it was nine months ago means that something must have been amiss, because, certainly, the indices are always rising, aren't they?
The number 18,000 poses more questions than answers, to which Money Daily offers none, only more questions as to the sustainability of such an awesome, inspired number, fully without any kind of fundamental support, since the quality of corporate earnings has been disintegrating at an astonishing rate.
Not only that, but the obfuscation and sheer audacity of the lies and pro forma earnings releases (as opposed to the traditionally well-favored GAAP) leads one to believe that the market has lost all bearings and is about to crash upon some unseen shoals while the cruiser's captain is nodded out, asleep at the wheel.
Alas, the market has no captain, as contrary to the desires of the Janet Yellens, Mario Draghis or even George Soroses (some kind of disease, there) of the world might think otherwise.
No, the market is a mechanism of many moving parts, and, being such, can be wound to whatever pulsation or amplitude any broken parts may render it. Make no mistake, there are many broken parts to the market, especially when it comes to equity markets, where valuations have been so absurdly distorted as to become meaningless in a value-oriented frame of mind.
Nevertheless, here we are, so break out the party hats?
Next up: the NASDAQ blasts through the 5,000 barrier.
Really?
S&P 500: 2,094.34, +13.61 (0.65%)
Dow: 18,004.16, +106.70 (0.60%)
NASDAQ: 4,960.02, +21.80 (0.44%)
Crude Oil 41.28 -1.03% Gold 1,230.30 -0.38% EUR/USD 1.1310 -0.02% 10-Yr Bond 1.77 +1.20% Corn 380.50 -0.13% Copper 2.16 -0.02% Silver 16.19 -0.36% Natural Gas 1.94 +1.84% Russell 2000 1,139.28 +0.74% VIX 13.35 -1.98% BATS 1000 20,682.61 0.00% GBP/USD 1.4290 +0.10% USD/JPY 109.1170 +0.26%
Friday, April 15, 2016
It's TRUE: Crooked Deutsche Bank Agrees to Settle Silver/Gold Manipulation Lawsuits
Stocks zig-zagged their way through options expiry, drooping in the morning and early afternoon, but gaining a little ground in late trading, eventually closing marginally in the red, but strongly higher for the week.
The major indices had a banner week, with the averages closing higher for the seventh time in the last nine weeks. The Dow Jones Industrial Average has rocketed nearly 2500 points in just about two months of trading. It's an impressive run, though likely not to be sustainable. At the very least, it's all just paper, which can be blown away on a whim.
For the week:
Dow: +320.36 (1.82%)
S&P 500: +33.11 (1.62%)
NASDAQ: +87.53 (1.80%)
On the day:
S&P 500: 2,080.69, -2.09 (0.10%)
Dow: 17,897.25, -29.18 (0.16%)
NASDAQ: 4,938.22, -7.67 (0.16%)
Crude Oil 40.36 -2.75% Gold 1,235.90 +0.77% EUR/USD 1.1284 +0.18% 10-Yr Bond 1.75 -1.63% Corn 380.00 +1.60% Copper 2.15 -0.94% Silver 16.26 +0.57% Natural Gas 1.91 -3.25% Russell 2000 1,130.62 +0.18% VIX 13.84 +0.87% BATS 1000 20,682.61 0.00% GBP/USD 1.4198 +0.33% USD/JPY 108.7350 -0.66%
More important news follows...
While this news may be rather stunning to the average investor, those who don't own any silver and/or gold, Deutsche Bank agreed to settle litigation accusing it and other banks of manipulating the price of gold and silver, to the detriment of investors worldwide.
Terms were not disclosed, but this much we now know: banks are crooks, plain and simple. The world's largest banks have been found guilty of manipulating everything from mortgages to libor to interest rates to oil prices.
The sad part about this story is that while Deustche Bank will pay a fine (which will be a fraction of what they made by rigging the markets for themselves and friends), and is supposed to turn evidence on the other banks accused of collusion with them in the rigging, not a single trader or executive will face criminal charges.
Don't believe it? Try reading and going through the myrid links in this article posted on Zero Hedge.
That's why nobody trades in the stock market anymore, except for hedge funds, mutual and pension fund managers and others with inside information. It's all rigged, and it's been that way for a long time - maybe 20 years - but now it is worse than ever.
Money Daily has repeatedly warned that there hasn't been a mechanism for price discovery since the bank bailouts of 2009, and there sure aren't now. How much should you pay for a whole chicken? A used car? A house?
With markets routinely monopolized and manipulated by a criminal cartel, with the blessing of the world's central banks, how can anyone know what is fair value.
This is exactly why Money Daily often has little comment on markets or the commentary is decidedly of a negative tone. Markets are all rigged by players with a lot more money and information than the average investor. It's all a big con game. The only true stores of value are gold, silver and certain real estate, especially farm land. At least, when everything goes belly up, you can grow your own food and feed your family.
Good luck.
The major indices had a banner week, with the averages closing higher for the seventh time in the last nine weeks. The Dow Jones Industrial Average has rocketed nearly 2500 points in just about two months of trading. It's an impressive run, though likely not to be sustainable. At the very least, it's all just paper, which can be blown away on a whim.
For the week:
Dow: +320.36 (1.82%)
S&P 500: +33.11 (1.62%)
NASDAQ: +87.53 (1.80%)
On the day:
S&P 500: 2,080.69, -2.09 (0.10%)
Dow: 17,897.25, -29.18 (0.16%)
NASDAQ: 4,938.22, -7.67 (0.16%)
Crude Oil 40.36 -2.75% Gold 1,235.90 +0.77% EUR/USD 1.1284 +0.18% 10-Yr Bond 1.75 -1.63% Corn 380.00 +1.60% Copper 2.15 -0.94% Silver 16.26 +0.57% Natural Gas 1.91 -3.25% Russell 2000 1,130.62 +0.18% VIX 13.84 +0.87% BATS 1000 20,682.61 0.00% GBP/USD 1.4198 +0.33% USD/JPY 108.7350 -0.66%
More important news follows...
While this news may be rather stunning to the average investor, those who don't own any silver and/or gold, Deutsche Bank agreed to settle litigation accusing it and other banks of manipulating the price of gold and silver, to the detriment of investors worldwide.
Terms were not disclosed, but this much we now know: banks are crooks, plain and simple. The world's largest banks have been found guilty of manipulating everything from mortgages to libor to interest rates to oil prices.
The sad part about this story is that while Deustche Bank will pay a fine (which will be a fraction of what they made by rigging the markets for themselves and friends), and is supposed to turn evidence on the other banks accused of collusion with them in the rigging, not a single trader or executive will face criminal charges.
Don't believe it? Try reading and going through the myrid links in this article posted on Zero Hedge.
That's why nobody trades in the stock market anymore, except for hedge funds, mutual and pension fund managers and others with inside information. It's all rigged, and it's been that way for a long time - maybe 20 years - but now it is worse than ever.
Money Daily has repeatedly warned that there hasn't been a mechanism for price discovery since the bank bailouts of 2009, and there sure aren't now. How much should you pay for a whole chicken? A used car? A house?
With markets routinely monopolized and manipulated by a criminal cartel, with the blessing of the world's central banks, how can anyone know what is fair value.
This is exactly why Money Daily often has little comment on markets or the commentary is decidedly of a negative tone. Markets are all rigged by players with a lot more money and information than the average investor. It's all a big con game. The only true stores of value are gold, silver and certain real estate, especially farm land. At least, when everything goes belly up, you can grow your own food and feed your family.
Good luck.
Thursday, April 14, 2016
Stocks Topped Out Again? Bank Earnings A Mixed Picture
After racking up impressive gains the first three days of the week, stocks took Thursday off, trading in a narrow range that may suggest to some that another topping pattern is forming.
The Dow, in particular, is retesting the highs from the end of October, when the index failed at a run to 18,000, and began a slow descent that accelerated in January to near full-blown panic.
As for the S&P, it remains just above water for the year, although analysts have repeatedly stressed the area of 2080-2090 as a key resistance level.
With another FOMC meeting in less than than two weeks (April 26-27), traders may be suffering from a case of frayed nerves, though considering the dovish tone coming from Fed Chair, Janet Yellen, any fears of a rate hike before June - at the earliest - seem unfounded.
Bank stocks have done well, with JP Morgan Chase (JPM) and Bank of America (BAC) both reporting earnings in line or above estimates, though revenues have fallen short for both firms.
Wells Fargo also reported before the open on Thursday, citing loan loss reserves in their energy portfolio putting a damper on first quarter profits. That was perhaps the souring tone the street did not expect nor want to hear.
Citigroup reports prior to the opening bell on Friday, looking for 1.03 per share for the quarter.
S&P 500: 2,082.78, +0.36 (0.02%)
Dow: 17,926.43, +18.15 (0.10%)
NASDAQ: 4,945.89, -1.53 (0.03%)
Crude Oil 41.43 -0.79% Gold 1,229.30 -1.52% EUR/USD 1.1265 -0.07% 10-Yr Bond 1.78 +1.08% Corn 373.50 0.00% Copper 2.17 0.00% Silver 16.18 -0.86% Natural Gas 1.96 -3.83% Russell 2000 1,128.59 -0.12% VIX 13.72 -0.87% BATS 1000 20,682.61 0.00% GBP/USD 1.4154 -0.37% USD/JPY 109.4000 +0.10%
The Dow, in particular, is retesting the highs from the end of October, when the index failed at a run to 18,000, and began a slow descent that accelerated in January to near full-blown panic.
As for the S&P, it remains just above water for the year, although analysts have repeatedly stressed the area of 2080-2090 as a key resistance level.
With another FOMC meeting in less than than two weeks (April 26-27), traders may be suffering from a case of frayed nerves, though considering the dovish tone coming from Fed Chair, Janet Yellen, any fears of a rate hike before June - at the earliest - seem unfounded.
Bank stocks have done well, with JP Morgan Chase (JPM) and Bank of America (BAC) both reporting earnings in line or above estimates, though revenues have fallen short for both firms.
Wells Fargo also reported before the open on Thursday, citing loan loss reserves in their energy portfolio putting a damper on first quarter profits. That was perhaps the souring tone the street did not expect nor want to hear.
Citigroup reports prior to the opening bell on Friday, looking for 1.03 per share for the quarter.
S&P 500: 2,082.78, +0.36 (0.02%)
Dow: 17,926.43, +18.15 (0.10%)
NASDAQ: 4,945.89, -1.53 (0.03%)
Crude Oil 41.43 -0.79% Gold 1,229.30 -1.52% EUR/USD 1.1265 -0.07% 10-Yr Bond 1.78 +1.08% Corn 373.50 0.00% Copper 2.17 0.00% Silver 16.18 -0.86% Natural Gas 1.96 -3.83% Russell 2000 1,128.59 -0.12% VIX 13.72 -0.87% BATS 1000 20,682.61 0.00% GBP/USD 1.4154 -0.37% USD/JPY 109.4000 +0.10%
Wednesday, April 13, 2016
Retail Sales, Inventory, PPI Fall; Stocks Full Steam Ahead
Events of the day no longer matter, as we are clearly in the final stages of a global financial catastrophe, one which few will see coming, though signs of malaise and deconstruction are everywhere.
On the day, March retail sales were reported to be off by 0.3%, that being a negative, as opposed to a positive, which was expected. Despite the obvious collapse of the consumer pocketbook, stocks disregarded the data - as per usual - and marched higher, with the Dow Jones Industrial Average arching towards the magic 18,000 mark, a number that has not been seen on Wall Street or anywhere since mid-July of last year.
PPI, an inaccurate guide to wholesale inflation, fell 0.1%, on expectations of a rise of 0.3%, another blow to the Fed's inflation targeting of two percent, and yet another arrow in the quiver of the punchy speculators who view all bad economic news as good.
Business inventories for February also fell, by 0.1%, a result of over-ramping holiday buying without the resultant sales. Businesses find themselves largely overstocked, and have no need to build inventories, especially at a time in which the global economy is either not growing at all or actually contracting.
Meanwhile, anecdotal reports of falling food prices are rafting throughout the US economy. One consumer reported a dozen eggs at $1.50, when they were $3.00 or more just six months ago, due largely to a 2015 bird flu which decimated the nation's chicken population.
Therein lies the conundrum: with gas prices low, food prices falling, consumers are still finding difficulty opening their wallets and spending. Primary culprits include excessive taxation, health care (Obamacare), college tuition, and high housing costs, be they either renting or owning, and, since making ends meet via interest on savings has become a relic of a bygone era, people are also paying down debt.
It doesn't matter to Wall Street. Main Street could shrivel up and die - which, in many smaller cities it already has - and stocks would still enjoy the speculative splendor of negligible interest rates.
Splurge, baby, splurge.
DJIA: 17,908.28, +187.03
S&P 500: 2,082.42, +20.70
NASDAQ: 4,947.42, +75.33
Crude Oil 41.55 -1.47% Gold 1,244.10 -1.33% EUR/USD 1.1277 -0.95% 10-Yr Bond 1.76 -1.07% Corn 373.75 +3.03% Copper 2.17 +1.14% Silver 16.24 +0.08% Natural Gas 2.04 +1.80% Russell 2000 1,129.93 +2.19% VIX 13.84 -6.80% BATS 1000 20,682.61 0.00% GBP/USD 1.4206 -0.43% USD/JPY 109.3075 +0.67%
On the day, March retail sales were reported to be off by 0.3%, that being a negative, as opposed to a positive, which was expected. Despite the obvious collapse of the consumer pocketbook, stocks disregarded the data - as per usual - and marched higher, with the Dow Jones Industrial Average arching towards the magic 18,000 mark, a number that has not been seen on Wall Street or anywhere since mid-July of last year.
PPI, an inaccurate guide to wholesale inflation, fell 0.1%, on expectations of a rise of 0.3%, another blow to the Fed's inflation targeting of two percent, and yet another arrow in the quiver of the punchy speculators who view all bad economic news as good.
Business inventories for February also fell, by 0.1%, a result of over-ramping holiday buying without the resultant sales. Businesses find themselves largely overstocked, and have no need to build inventories, especially at a time in which the global economy is either not growing at all or actually contracting.
Meanwhile, anecdotal reports of falling food prices are rafting throughout the US economy. One consumer reported a dozen eggs at $1.50, when they were $3.00 or more just six months ago, due largely to a 2015 bird flu which decimated the nation's chicken population.
Therein lies the conundrum: with gas prices low, food prices falling, consumers are still finding difficulty opening their wallets and spending. Primary culprits include excessive taxation, health care (Obamacare), college tuition, and high housing costs, be they either renting or owning, and, since making ends meet via interest on savings has become a relic of a bygone era, people are also paying down debt.
It doesn't matter to Wall Street. Main Street could shrivel up and die - which, in many smaller cities it already has - and stocks would still enjoy the speculative splendor of negligible interest rates.
Splurge, baby, splurge.
DJIA: 17,908.28, +187.03
S&P 500: 2,082.42, +20.70
NASDAQ: 4,947.42, +75.33
Crude Oil 41.55 -1.47% Gold 1,244.10 -1.33% EUR/USD 1.1277 -0.95% 10-Yr Bond 1.76 -1.07% Corn 373.75 +3.03% Copper 2.17 +1.14% Silver 16.24 +0.08% Natural Gas 2.04 +1.80% Russell 2000 1,129.93 +2.19% VIX 13.84 -6.80% BATS 1000 20,682.61 0.00% GBP/USD 1.4206 -0.43% USD/JPY 109.3075 +0.67%
Tuesday, April 12, 2016
Bad News Sends Stocks, Oil, Higher; Silver Outshines All
Stocks moved higher based on nothing other than an "informed diplomatic source" that said Russia and Saudi Arabia had agreed to freeze oil production. Along with stocks, oil futures moved notably higher, topping $41.50 a barrel.
The news was taken with so much enthusiasm that traders apparently forgot that there exists a worldwide glut of crude oil larger than any before it. They also disregarded obvious topping patterns in stocks and upcoming earnings reports, including those of the big banks which happen to be saddled with bad oil loans.
News that the IMF cut its global growth forecast for 2016 for the fourth time in a year, backing it off to 3.2%, was also disregarded, as was the US March budget deficit came in at double what it was last year, a whopping $108 billion.
In an unrelated move, silver continued its non-stop ascent, closing in New York at its highest price since late October of 2015, topping $16/ounce for the first time this year. The price of silver has risen more than 8% in the past week.
S&P 500: 2,061.72, +19.73 (0.97%)
Dow: 17,721.25, +164.84 (0.94%)
NASDAQ: 4,872.09, +38.69 (0.80%)
Crude Oil 41.56 +2.97% Gold 1,257.40 -0.05% EUR/USD 1.1390 -0.12% 10-Yr Bond 1.78 +3.31% Corn 361.25 +1.26% Copper 2.15 +2.85% Silver 16.22 +1.50% Natural Gas 2.02 +5.60% Russell 2000 1,105.71 +1.04% VIX 14.85 -8.67% BATS 1000 20,682.61 0.00% GBP/USD 1.4269 +0.24% USD/JPY 108.5655 +0.57%
The news was taken with so much enthusiasm that traders apparently forgot that there exists a worldwide glut of crude oil larger than any before it. They also disregarded obvious topping patterns in stocks and upcoming earnings reports, including those of the big banks which happen to be saddled with bad oil loans.
News that the IMF cut its global growth forecast for 2016 for the fourth time in a year, backing it off to 3.2%, was also disregarded, as was the US March budget deficit came in at double what it was last year, a whopping $108 billion.
In an unrelated move, silver continued its non-stop ascent, closing in New York at its highest price since late October of 2015, topping $16/ounce for the first time this year. The price of silver has risen more than 8% in the past week.
S&P 500: 2,061.72, +19.73 (0.97%)
Dow: 17,721.25, +164.84 (0.94%)
NASDAQ: 4,872.09, +38.69 (0.80%)
Crude Oil 41.56 +2.97% Gold 1,257.40 -0.05% EUR/USD 1.1390 -0.12% 10-Yr Bond 1.78 +3.31% Corn 361.25 +1.26% Copper 2.15 +2.85% Silver 16.22 +1.50% Natural Gas 2.02 +5.60% Russell 2000 1,105.71 +1.04% VIX 14.85 -8.67% BATS 1000 20,682.61 0.00% GBP/USD 1.4269 +0.24% USD/JPY 108.5655 +0.57%
Monday, April 11, 2016
Amid Economic Unease, Former Fed Chair Bernanke Proposes MFFP (aka Helicopter Money)
We must be nearing the end of the current monetary system, since there is no growth, no prospects, and the entirety of the future has been mortgaged to the tune of $19 Trillion in US debt, and much, much more in unfunded liabilities via entitlement programs such as Social Security and Medicare/Medicaid.
Adding to the belief that the end is nigh, former Fed chairman, Ben Bernanke, now working for the Brookings Institute, penned a blog post today entitled, What tools does the Fed have left? Part 3: Helicopter money, wherein he openly advances the idea of direct money drops to the public. That would, ideally, include you, me, your poor uncle Tony, aunt Gracie, your neighbors, the weird guy in the run-down house on the corner, and everybody else who could use a few extra c-notes in the mail, ostensibly, tomorrow, and maybe, a few times a year, or month, or maybe even weekly...
You see where this is going, right? Bernanke is not convinced that US economic growth is kaput, yet he throws this out there for public consumption because, well, maybe he's grown weary of downloading porn, or he has to do something to make him seem relevant to the people paying his salary, or, perhaps he actually believes this is a realistic solution should the US economy completely stall out, or, heaven forbid, enter recession (like the one we've been in for the past eight years).
Not to make too much fun of the poor, old coot, but Bernanke was the Fed chairman during the last financial crisis, and his policies didn't do much to relieve anybody but the one percenters from economic repression, so it's unlikely that anything he suggests in his new role as wizened sage overseeing the global economy from some ivory tower will accomplish anything more than perverting the economy more than it already has been.
The most favored paragraph from Bernanke's flight of fancy is this one:
Yes, he coined a new acronym, MFFP, which I, Fearless Rick, a junior economist at best, reconfigured to mean Mother-(a vulgar word for copulating)-Foolish-Policy, and I think my naming makes more sense than anything any former Fed chairman could conjure. After all, I have been a writer for newspapers and blogs for many years, while Fed-heads only talk about money, interest rates, and other arcane foibles of economics. They're not very creative; I have to be (or I'll die, but that's another issue for another time).
So, choose whichever wording your little heart desires, I think Bernanke's just another old fart with a Ph.D., which these days are a dine a dozen. Being a doctor of anything these days isn't what it used to be. Doctors don't make that much, especially since the US has adopted a socialized system of medicine, which you all know and swear at when you receive your monthly health care statement, as Obamacare.
Being a doctor is over-rated. So is the Fed. What a bunch of morons. Seriously.
My point is simple. Handing out money, no matter to whom you bequest, or whatever you call it, or whatever cutesy acronym you paint on it, or whichever "mechanism" you use to do it, is just bad policy, and just plain stupid.
Moreover, Bernanke exposes himself as a completely dull ignoramus for even suggesting "money drops," not once, not twice, but now at least three times in his esteemed career as a monetary theorist. As Mark Twain once said,
I guess Bernanke never read that line, or worse, failed to understand it.
Geez. Just put your hand out. Somebody will magically fill it with cash. Yeah, and the queen of England is a babe.
CAUTIONARY NOTE. WARNING.
PAY ATTENTION TO TODAY'S MARKET RESULTS. MARKETS POPPED AND DROPPED, FINISHING IN THE RED, PRIOR TO THE KICKOFF OF EARNINGS SEASON. ALCOA ANNOUNCED AFTER THE CLOSE - 0.07/share; $4.95B Rev. - AND ALL THE MONEY CENTER BANKS - JP MORGAN CHASE (Wed), BANK OF AMERICA (Thurs), WELLS-FARGO (Thurs), CITIGROUP (Fri) - REPORT THIS WEEK.
BE ALERT FOR FALLING STOCK PRICES.
Today's market noise:
S&P 500: 2,041.99, -5.61 (0.27%)
Dow: 17,556.41, -20.55 (0.12%)
NASDAQ: 4,833.40, -17.29 (0.36%)
Crude Oil 40.38 +1.66% Gold 1,259.40 +1.25% EUR/USD 1.1408 +0.05% 10-Yr Bond 1.72 +0.23% Corn 356.75 -1.52% Copper 2.08 -0.19% Silver 15.93 +3.55% Natural Gas 1.93 -3.07% Russell 2000 1,094.34 -0.27% VIX 16.26 +5.86% BATS 1000 20,682.61 0.00% GBP/USD 1.4233 +0.77% USD/JPY 107.9395 -0.11%
Adding to the belief that the end is nigh, former Fed chairman, Ben Bernanke, now working for the Brookings Institute, penned a blog post today entitled, What tools does the Fed have left? Part 3: Helicopter money, wherein he openly advances the idea of direct money drops to the public. That would, ideally, include you, me, your poor uncle Tony, aunt Gracie, your neighbors, the weird guy in the run-down house on the corner, and everybody else who could use a few extra c-notes in the mail, ostensibly, tomorrow, and maybe, a few times a year, or month, or maybe even weekly...
You see where this is going, right? Bernanke is not convinced that US economic growth is kaput, yet he throws this out there for public consumption because, well, maybe he's grown weary of downloading porn, or he has to do something to make him seem relevant to the people paying his salary, or, perhaps he actually believes this is a realistic solution should the US economy completely stall out, or, heaven forbid, enter recession (like the one we've been in for the past eight years).
Not to make too much fun of the poor, old coot, but Bernanke was the Fed chairman during the last financial crisis, and his policies didn't do much to relieve anybody but the one percenters from economic repression, so it's unlikely that anything he suggests in his new role as wizened sage overseeing the global economy from some ivory tower will accomplish anything more than perverting the economy more than it already has been.
The most favored paragraph from Bernanke's flight of fancy is this one:
In more prosaic and realistic terms, a “helicopter drop” of money is an expansionary fiscal policy—an increase in public spending or a tax cut—financed by a permanent increase in the money stock. [4] To get away from the fanciful imagery, for the rest of this post I will call such a policy a Money-Financed Fiscal Program, or MFFP.
Yes, he coined a new acronym, MFFP, which I, Fearless Rick, a junior economist at best, reconfigured to mean Mother-(a vulgar word for copulating)-Foolish-Policy, and I think my naming makes more sense than anything any former Fed chairman could conjure. After all, I have been a writer for newspapers and blogs for many years, while Fed-heads only talk about money, interest rates, and other arcane foibles of economics. They're not very creative; I have to be (or I'll die, but that's another issue for another time).
So, choose whichever wording your little heart desires, I think Bernanke's just another old fart with a Ph.D., which these days are a dine a dozen. Being a doctor of anything these days isn't what it used to be. Doctors don't make that much, especially since the US has adopted a socialized system of medicine, which you all know and swear at when you receive your monthly health care statement, as Obamacare.
Being a doctor is over-rated. So is the Fed. What a bunch of morons. Seriously.
My point is simple. Handing out money, no matter to whom you bequest, or whatever you call it, or whatever cutesy acronym you paint on it, or whichever "mechanism" you use to do it, is just bad policy, and just plain stupid.
Moreover, Bernanke exposes himself as a completely dull ignoramus for even suggesting "money drops," not once, not twice, but now at least three times in his esteemed career as a monetary theorist. As Mark Twain once said,
It's better to keep your mouth shut and appear stupid than open it and remove all doubt.
I guess Bernanke never read that line, or worse, failed to understand it.
Geez. Just put your hand out. Somebody will magically fill it with cash. Yeah, and the queen of England is a babe.
CAUTIONARY NOTE. WARNING.
PAY ATTENTION TO TODAY'S MARKET RESULTS. MARKETS POPPED AND DROPPED, FINISHING IN THE RED, PRIOR TO THE KICKOFF OF EARNINGS SEASON. ALCOA ANNOUNCED AFTER THE CLOSE - 0.07/share; $4.95B Rev. - AND ALL THE MONEY CENTER BANKS - JP MORGAN CHASE (Wed), BANK OF AMERICA (Thurs), WELLS-FARGO (Thurs), CITIGROUP (Fri) - REPORT THIS WEEK.
BE ALERT FOR FALLING STOCK PRICES.
Today's market noise:
S&P 500: 2,041.99, -5.61 (0.27%)
Dow: 17,556.41, -20.55 (0.12%)
NASDAQ: 4,833.40, -17.29 (0.36%)
Crude Oil 40.38 +1.66% Gold 1,259.40 +1.25% EUR/USD 1.1408 +0.05% 10-Yr Bond 1.72 +0.23% Corn 356.75 -1.52% Copper 2.08 -0.19% Silver 15.93 +3.55% Natural Gas 1.93 -3.07% Russell 2000 1,094.34 -0.27% VIX 16.26 +5.86% BATS 1000 20,682.61 0.00% GBP/USD 1.4233 +0.77% USD/JPY 107.9395 -0.11%
Friday, April 8, 2016
Stocks Stage Brave Friday Rally, Fall For Week As Yellen Denies Bubble
Janet Yellen, April 7, 2016:
So, apparently, April Fool's Day has been extended to April Fool's Week. The Chairwoman's comment was made in response to a question of whether the US economy was in a bubble.
It has become increasingly obvious to more than just high-rollers on Wall Street, that the occupants of various ivory towers in the Eccles Building are either clueless or lying, and, whichever camp one adheres to, the idea that their economic policies have been detrimental to the common good is without doubt.
Friday's action was nothing more than a dead cat bounce, with all three major indices ripping at the open, but running stagnant as the session wore on, finally ending with small gains.
For the week the degradation was uniform, the Dow lost 215.79 (-1.21%), the S&P shed 25.18 points (-1.21%), while the exuberant NASDAQ dropped 63.85 (-1.30%) points.
Oil gained six percent on the day, followed by more stable precious metals, particularly silver, which has rebounded nicely from a recent smack down.
Friday's Pop and Flop:
S&P 500: 2,047.60, +5.69 (0.28%)
Dow: 17,576.96, +35.00 (0.20%)
NASDAQ: 4,850.69, +2.32 (0.05%)
Crude Oil 39.51 +6.04% Gold 1,241.70 +0.34% EUR/USD 1.1395 +0.18% 10-Yr Bond 1.72 +1.71% Corn 362.00 +0.14% Copper 2.09 +0.48% Silver 15.37 +1.40% Natural Gas 1.99 -1.49% Russell 2000 1,097.31 +0.41% VIX 15.36 -4.95% BATS 1000 20,682.61 0.00% GBP/USD 1.4128 +0.51% USD/JPY 108.1670 -0.08%
"So I would say the US economy has made tremendous progress in recovering from the damage from the financial crisis. Uh, slowly but surely the labor market is healing. Um, for well over a year we’ve averaged about 225,000 jobs a month. The unemployment rate now stands at 5%. So, we’re coming close to our assigned congressional goal of maximum employment. Um, inflation which, um, my colleagues here Paul [Volker] and Alan [Greenspan]
um, spent much of their time as chair um, bringing inflation down from unacceptably high levels. For a number of years now inflation has been running under our 2% goal and we’re focused on moving it up to 2%. Um, but we think that it’s partly transitory influences, namely declining oil prices, and uh, the strong dollar that are responsible for pulling inflation below the 2% level we think is most desirable. So, I think we’re making progress there as well, and this is an economy on a solid course, um, not a bubble economy. Um, we tried carefully to look at evidence of potential financial instability that might be brewing and some of the hallmarks of that, clearly overvalued asset prices, high leverage, rising leverage, and rapid credit growth. We certainly don’t see those imbalances. And so although interest rates are low, and that is something that could encourage reach for yield behavior, I wouldn’t describe this as a bubble economy."
 |
| Janet Yellen; Stupid or insincere? |
It has become increasingly obvious to more than just high-rollers on Wall Street, that the occupants of various ivory towers in the Eccles Building are either clueless or lying, and, whichever camp one adheres to, the idea that their economic policies have been detrimental to the common good is without doubt.
Friday's action was nothing more than a dead cat bounce, with all three major indices ripping at the open, but running stagnant as the session wore on, finally ending with small gains.
For the week the degradation was uniform, the Dow lost 215.79 (-1.21%), the S&P shed 25.18 points (-1.21%), while the exuberant NASDAQ dropped 63.85 (-1.30%) points.
Oil gained six percent on the day, followed by more stable precious metals, particularly silver, which has rebounded nicely from a recent smack down.
Friday's Pop and Flop:
S&P 500: 2,047.60, +5.69 (0.28%)
Dow: 17,576.96, +35.00 (0.20%)
NASDAQ: 4,850.69, +2.32 (0.05%)
Crude Oil 39.51 +6.04% Gold 1,241.70 +0.34% EUR/USD 1.1395 +0.18% 10-Yr Bond 1.72 +1.71% Corn 362.00 +0.14% Copper 2.09 +0.48% Silver 15.37 +1.40% Natural Gas 1.99 -1.49% Russell 2000 1,097.31 +0.41% VIX 15.36 -4.95% BATS 1000 20,682.61 0.00% GBP/USD 1.4128 +0.51% USD/JPY 108.1670 -0.08%
Thursday, April 7, 2016
Stocks Slammed Back Into The Red As Resistance Has Been Met
The stock market is getting too predictable, and when that happens, it's generally a sign that change is at hand.
Not individual stocks, mind you, but at the macro level - entire indices, countries, or specific sectors - movement is largely telegraphed, as if some floor brokers have bullhorns shouting out the trades of the day, the week, the quarter.
On an impersonal level, US indices are ready for another bruising earnings season, having already touched recent highs, now dipping into negative territory for the year. It's all about the flow at this juncture, and the flow is out of stocks and into cash, or bonds, or any place safe.
All of this begs out for the buy-and-hold mentality that persisted during the true heyday of the American stock markets, from the mid-80s through Greenspan's irrational exuberance regime of the late 90s, but that epoch is long past and investors must be more nimble and adroit, being that there are so many more pitfalls and potholes in modern markets.
Above all, the Fed's role is out-sized and outdated. They've simply overstayed their welcome in equity markets, politicizing them to such an extent that honest trading on fundamentals has become passe - a relic from a long-lost civilization.
And so we embark into earnings season with the worst-looking week in nearly two months. Stocks were pounded without mercy on Thursday, setting up either a massive bounce on Friday or a continuation of the dolorous trading that has prevailed for the better part of this week.
As stated here yesterday, resistance has been met, and the only way out is to the downside. How far? That kind of conceit will kill you and leave your heirs penniless.
Many commodities - take your pick, but steer clear of oil - are close to short-term lows and may be the way ahead, though it would be advisable to tread very lightly for at least the next few months.
S&P 500: 2,041.91, -24.75 (1.20%)
Dow: 17,541.96, -174.09 (0.98%)
NASDAQ: 4,848.37, -72.35 (1.47%)
Crude Oil 37.54 -0.56% Gold 1,242.00 +1.49% EUR/USD 1.1377 -0.14% 10-Yr Bond 1.69 -3.65% Corn 361.25 +0.91% Copper 2.08 -3.01% Silver 15.23 +1.17% Natural Gas 2.02 +5.65% Russell 2000 1,092.79 -1.45% VIX 16.16 +14.69% BATS 1000 20,682.61 0.00% GBP/USD 1.4057 -0.45% USD/JPY 108.1250 -1.49%
Not individual stocks, mind you, but at the macro level - entire indices, countries, or specific sectors - movement is largely telegraphed, as if some floor brokers have bullhorns shouting out the trades of the day, the week, the quarter.
On an impersonal level, US indices are ready for another bruising earnings season, having already touched recent highs, now dipping into negative territory for the year. It's all about the flow at this juncture, and the flow is out of stocks and into cash, or bonds, or any place safe.
All of this begs out for the buy-and-hold mentality that persisted during the true heyday of the American stock markets, from the mid-80s through Greenspan's irrational exuberance regime of the late 90s, but that epoch is long past and investors must be more nimble and adroit, being that there are so many more pitfalls and potholes in modern markets.
Above all, the Fed's role is out-sized and outdated. They've simply overstayed their welcome in equity markets, politicizing them to such an extent that honest trading on fundamentals has become passe - a relic from a long-lost civilization.
And so we embark into earnings season with the worst-looking week in nearly two months. Stocks were pounded without mercy on Thursday, setting up either a massive bounce on Friday or a continuation of the dolorous trading that has prevailed for the better part of this week.
As stated here yesterday, resistance has been met, and the only way out is to the downside. How far? That kind of conceit will kill you and leave your heirs penniless.
Many commodities - take your pick, but steer clear of oil - are close to short-term lows and may be the way ahead, though it would be advisable to tread very lightly for at least the next few months.
S&P 500: 2,041.91, -24.75 (1.20%)
Dow: 17,541.96, -174.09 (0.98%)
NASDAQ: 4,848.37, -72.35 (1.47%)
Crude Oil 37.54 -0.56% Gold 1,242.00 +1.49% EUR/USD 1.1377 -0.14% 10-Yr Bond 1.69 -3.65% Corn 361.25 +0.91% Copper 2.08 -3.01% Silver 15.23 +1.17% Natural Gas 2.02 +5.65% Russell 2000 1,092.79 -1.45% VIX 16.16 +14.69% BATS 1000 20,682.61 0.00% GBP/USD 1.4057 -0.45% USD/JPY 108.1250 -1.49%
Wednesday, April 6, 2016
Resistance Is Palpable For Dow, S&P; Trades Dying Slow Death
Taking a look at the weekly chart of the Dow and the S&P, it becomes evident why the averages haven't been able to break through this current range to new, higher highs.
The congestion and resistance at 17,900-18,000 on the Dow, and 2090-2120 on the S&P are as plain as a bright summer day, and thus, what had been considered a Fed-driven market has now become a chartist's nightmare.
Unless there's some good reason for the averages to go higher - and currently there isn't - there's only one way for stocks to go, and that direction would not be in the best interest of most investors, fund managers or pension hopefuls.
Naturally, the market continues to look to the Fed for comfort and trading rationale, but it is becoming more and more difficult for the monetary magicians in the Eccles Building to conjure up increasingly complicated arguments to support an economy (US and global) that, for all intents and purposes, looks to be standing on a foundation built of sand.
In other words, the market is about to go somewhere shortly, and bets are good that it will not be much higher. Earnings have begun to trickle in for the first quarter, and expectations are for another sequential decline in overall top-and-bottom line growth.
Then again, Janet Yellen is god, right?
With the Dollar/Yen carry trade nearing extinction (109.7450), perhaps one should consider a world in which there are no winning trades, such as is the fate of many so-called "home-gamers."
With volatility being wrung out of markets on a regular basis through HFT, that is a consideration that must be taken seriously.
Fraud is on sale, but it cannot be had cheaply.
S&P 500 Futures: 2,059.25, +20.50 (1.01%)
Dow Futures: 17,623.00, +96.00 (0.55%)
NASDAQ Futures: 4,532.00, +62.50 (1.40%)
Crude Oil 37.76 +5.21% Gold 1,224.00 -0.46% EUR/USD 1.1399 +0.04% 10-Yr Bond 1.75 +1.62% Corn 358.00 +0.35% Copper 2.14 +0.21% Silver 15.06 -0.34% Natural Gas 1.90 -2.66% Russell 2000 1,108.81 +1.18% VIX 14.09 -8.63% BATS 1000 20,682.61 0.00% GBP/USD 1.4131 +0.08% USD/JPY 109.7450 -0.01%
The congestion and resistance at 17,900-18,000 on the Dow, and 2090-2120 on the S&P are as plain as a bright summer day, and thus, what had been considered a Fed-driven market has now become a chartist's nightmare.
Unless there's some good reason for the averages to go higher - and currently there isn't - there's only one way for stocks to go, and that direction would not be in the best interest of most investors, fund managers or pension hopefuls.
Naturally, the market continues to look to the Fed for comfort and trading rationale, but it is becoming more and more difficult for the monetary magicians in the Eccles Building to conjure up increasingly complicated arguments to support an economy (US and global) that, for all intents and purposes, looks to be standing on a foundation built of sand.
In other words, the market is about to go somewhere shortly, and bets are good that it will not be much higher. Earnings have begun to trickle in for the first quarter, and expectations are for another sequential decline in overall top-and-bottom line growth.
Then again, Janet Yellen is god, right?
With the Dollar/Yen carry trade nearing extinction (109.7450), perhaps one should consider a world in which there are no winning trades, such as is the fate of many so-called "home-gamers."
With volatility being wrung out of markets on a regular basis through HFT, that is a consideration that must be taken seriously.
Fraud is on sale, but it cannot be had cheaply.
S&P 500 Futures: 2,059.25, +20.50 (1.01%)
Dow Futures: 17,623.00, +96.00 (0.55%)
NASDAQ Futures: 4,532.00, +62.50 (1.40%)
Crude Oil 37.76 +5.21% Gold 1,224.00 -0.46% EUR/USD 1.1399 +0.04% 10-Yr Bond 1.75 +1.62% Corn 358.00 +0.35% Copper 2.14 +0.21% Silver 15.06 -0.34% Natural Gas 1.90 -2.66% Russell 2000 1,108.81 +1.18% VIX 14.09 -8.63% BATS 1000 20,682.61 0.00% GBP/USD 1.4131 +0.08% USD/JPY 109.7450 -0.01%
Tuesday, April 5, 2016
Fizzle, No Sizzle As Stocks Dump For Second Straight Session
Just maybe, somebody out there is reading the data rather than listening to the coo-cooing of Janet Yellen.
If so, somebody was in multiples on Tuesday, selling shares of just about everything as the Dow took a triple-digit loss, coming on the heels of Monday's sombre session.
Stocks backed off in a big way, with winners outpacing losers by a margin of better than 2:1. While the past two days may be nothing more than average market noise, there have been more voices of discontent airing their views of late, adding to the chorus of naysayers who say 23x earnings on the S&P is simply not sustainable, nor suitable for investment.
In an average environment, stocks should be sporting a 14-16 multiple. That has been the norm for the past 50 years, and there's sufficient data for which to back up those claims.
There is a possibility, albeit a minor one, that more than a few of the higher-profile analysts and brokers are quietly telling their clients that the market is overheating, especially at a time in which data points have not been particularly encouraging.
Add to the mix the recent decline in oil and the messy bond market (10-year note down again today), recent highs, and the conditions are ripe for a substantial decline.
What market-watchers gasped at in January of this year may be about to return. If that's the case, there's little the Fed can do - or say - to keep stocks at their current nosebleed levels.
They will try, though, that's for certain.
S&P 500: 2,045.17, -20.96 (1.01%)
Dow: 17,603.32, -133.68 (0.75%)
NASDAQ: 4,843.93, -47.86 (0.98%)
Crude Oil 36.47 +2.16% Gold 1,232.90 +1.12% EUR/USD 1.1382 -0.08% 10-Yr Bond 1.73 -2.92% Corn 355.75 +0.35% Copper 2.14 +0.12% Silver 15.14 +1.31% Natural Gas 1.94 -3.00% Russell 2000 1,095.85 -1.14% VIX 15.42 +9.21% BATS 1000 20,682.61 0.00% GBP/USD 1.4158 -0.77% USD/JPY 110.3350 -0.88%
If so, somebody was in multiples on Tuesday, selling shares of just about everything as the Dow took a triple-digit loss, coming on the heels of Monday's sombre session.
Stocks backed off in a big way, with winners outpacing losers by a margin of better than 2:1. While the past two days may be nothing more than average market noise, there have been more voices of discontent airing their views of late, adding to the chorus of naysayers who say 23x earnings on the S&P is simply not sustainable, nor suitable for investment.
In an average environment, stocks should be sporting a 14-16 multiple. That has been the norm for the past 50 years, and there's sufficient data for which to back up those claims.
There is a possibility, albeit a minor one, that more than a few of the higher-profile analysts and brokers are quietly telling their clients that the market is overheating, especially at a time in which data points have not been particularly encouraging.
Add to the mix the recent decline in oil and the messy bond market (10-year note down again today), recent highs, and the conditions are ripe for a substantial decline.
What market-watchers gasped at in January of this year may be about to return. If that's the case, there's little the Fed can do - or say - to keep stocks at their current nosebleed levels.
They will try, though, that's for certain.
S&P 500: 2,045.17, -20.96 (1.01%)
Dow: 17,603.32, -133.68 (0.75%)
NASDAQ: 4,843.93, -47.86 (0.98%)
Crude Oil 36.47 +2.16% Gold 1,232.90 +1.12% EUR/USD 1.1382 -0.08% 10-Yr Bond 1.73 -2.92% Corn 355.75 +0.35% Copper 2.14 +0.12% Silver 15.14 +1.31% Natural Gas 1.94 -3.00% Russell 2000 1,095.85 -1.14% VIX 15.42 +9.21% BATS 1000 20,682.61 0.00% GBP/USD 1.4158 -0.77% USD/JPY 110.3350 -0.88%
Monday, April 4, 2016
April's Fools
Having been given the green light by Janet Yellen and her uber-dovish comments concerning the relaxed pace of interest rate increases, stocks closed Friday at their best levels of the year, erasing any nasty remembrances of the January and early February slump.
Monday brought the blues, a touch of reality, and maybe a case of buyer's remorse, as the major averages began the first full trading week of the month in a depressed vein.
Leading the charge to the downside was the usual culprit, crude oil, which slipped below $36/barrel on the current contract. The consistency of the oil slump can be attributed to a variety of causes, though the most obvious is slow or absent global economic growth. Major developed nations find themselves in a horrible bind due to limited opportunity for wage growth and slack demand for everything from farm equipment to fancy glasses.
While cheerleaders in the media are reluctant to mention any news which might be construed as even remotely negative, there is no mistaking the demographics of the developed world. Europe, Japan, and increasingly, the United States bear aging populations with no viable means of escape from the financial vortex of ultra-low interest rates except via the ultimate demise, death.
What the central banks and central planners of advanced economies have wrought with their ham-handed zero interest (and lower) environment is a world in which aging people without advancing incomes or prospects for opportunity have no viable means of protecting their savings. For those younger, saving is also crimped by these lower rates, pushing entire populations into risky, often leveraged investment schemes.
Economists have historical reference to ages marked by financial repression such as the current one, and they nearly always end in disaster, war, and a reordering of the global economic condition. Central banks desire inflation anywhere, while the population cries out for avenues for saving, putting the monetary system and the realities of life on a direct collision course.
The central banks must certainly know that there is nowhere out of this condition, but they are reluctant - indeed, they are violently opposed to the idea - to balance growth, productivity, wages and wealth creation. They have become the worst nightmare of the people, bent only toward risk in financial instruments, and against anything that might promote the general well-being. They have become the enemy of savers, anathema to the aging, and a net detraction from productive economies everywhere.
Perhaps it is all part of their plan, but, if it is, such a plan has been well-hidden because nobody with any amount of wealth or savings can see the wisdom of it. Unless stocks continue to rise in value forever - a distinct impossibility - humanity will be at the mercy of a small, useless band of monetarists who have not, as yet, propositioned any plan for the past seven years other than to cut interest rates and hope.
And we all know that hope is not a strategy.
S&P 500: 2,066.13, -6.65 (0.32%)
Dow: 17,737.00, -55.75 (0.31%)
NASDAQ: 4,891.80, -22.75 (0.46%)
Crude Oil 35.81 -2.66% Gold 1,216.90 -0.54% EUR/USD 1.1392 -0.02% 10-Yr Bond 1.78 -0.73% Corn 354.50 +0.14% Copper 2.14 -0.97% Silver 14.94 -0.74% Natural Gas 2.00 +2.45% Russell 2000 1,109.06 -0.77% VIX 14.17 +8.17% BATS 1000 20,682.61 0.00% GBP/USD 1.4264 +0.30% USD/JPY 111.3450 -0.28%
Monday brought the blues, a touch of reality, and maybe a case of buyer's remorse, as the major averages began the first full trading week of the month in a depressed vein.
Leading the charge to the downside was the usual culprit, crude oil, which slipped below $36/barrel on the current contract. The consistency of the oil slump can be attributed to a variety of causes, though the most obvious is slow or absent global economic growth. Major developed nations find themselves in a horrible bind due to limited opportunity for wage growth and slack demand for everything from farm equipment to fancy glasses.
While cheerleaders in the media are reluctant to mention any news which might be construed as even remotely negative, there is no mistaking the demographics of the developed world. Europe, Japan, and increasingly, the United States bear aging populations with no viable means of escape from the financial vortex of ultra-low interest rates except via the ultimate demise, death.
What the central banks and central planners of advanced economies have wrought with their ham-handed zero interest (and lower) environment is a world in which aging people without advancing incomes or prospects for opportunity have no viable means of protecting their savings. For those younger, saving is also crimped by these lower rates, pushing entire populations into risky, often leveraged investment schemes.
Economists have historical reference to ages marked by financial repression such as the current one, and they nearly always end in disaster, war, and a reordering of the global economic condition. Central banks desire inflation anywhere, while the population cries out for avenues for saving, putting the monetary system and the realities of life on a direct collision course.
The central banks must certainly know that there is nowhere out of this condition, but they are reluctant - indeed, they are violently opposed to the idea - to balance growth, productivity, wages and wealth creation. They have become the worst nightmare of the people, bent only toward risk in financial instruments, and against anything that might promote the general well-being. They have become the enemy of savers, anathema to the aging, and a net detraction from productive economies everywhere.
Perhaps it is all part of their plan, but, if it is, such a plan has been well-hidden because nobody with any amount of wealth or savings can see the wisdom of it. Unless stocks continue to rise in value forever - a distinct impossibility - humanity will be at the mercy of a small, useless band of monetarists who have not, as yet, propositioned any plan for the past seven years other than to cut interest rates and hope.
And we all know that hope is not a strategy.
S&P 500: 2,066.13, -6.65 (0.32%)
Dow: 17,737.00, -55.75 (0.31%)
NASDAQ: 4,891.80, -22.75 (0.46%)
Crude Oil 35.81 -2.66% Gold 1,216.90 -0.54% EUR/USD 1.1392 -0.02% 10-Yr Bond 1.78 -0.73% Corn 354.50 +0.14% Copper 2.14 -0.97% Silver 14.94 -0.74% Natural Gas 2.00 +2.45% Russell 2000 1,109.06 -0.77% VIX 14.17 +8.17% BATS 1000 20,682.61 0.00% GBP/USD 1.4264 +0.30% USD/JPY 111.3450 -0.28%
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