Saturday, April 29, 2017

Wall Street Frowns Over No Government Shutdown, 0.7% GDP Growth

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

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

After what promised to be a week of rancor and argument turned into a mere smattering of name-calling and finger-pointing, investors seemed unfazed by what didn't happen in Washington. The first estimate of first quarter GDP also added to the disappointment, coming in at the worst in three years, showing paltry 0.7% growth. That probably had more to do with Friday's decline than anything the government did or did not do.

The poor reading on the economy follows a similarly bad reading in the March non-farm payroll report, which showed the US economy stalling out a bit, adding just 98,000 jobs, a big miss on rosy estimates.

If the overall economic figures continue to flag, it will be difficult for the Fed to raise interest rates any further and probably not at the May FOMC meeting, which happens to be this week, Tuesday and Wednesday, May 2 and 3. A stalled-out economy may also keep the Fed on hold until the fall. The FOMC meets on June 13-14 and again on July 25-26. After that, they don't meet again until September.

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

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

We can only hope...

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

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

Friday, April 28, 2017

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

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

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

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

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

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

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

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

Wednesday, April 26, 2017

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

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

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

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

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

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

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

Saturday, April 22, 2017

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

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

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

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

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

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

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

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

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

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

Though the times are trying, central bankers continue buying.

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

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

Thursday, April 20, 2017

Stocks Surge, But Indecision Remains

This market cant seem to make up its mind.

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

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

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

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

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

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

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

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

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

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

What could it be?

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

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

It could be that simple.

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

Wednesday, April 19, 2017

Stocks In Spring Funk, Well Off All-Time Highs

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

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

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

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

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

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

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

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

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

Tuesday, April 18, 2017

Stocks Bounce Higher After Long Weekend; Bond Yields Smashed

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

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

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

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

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

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

Friday, April 14, 2017

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

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

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

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

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

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

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

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

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

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

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

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

At The Close, Thursday, April 13, 2017:

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

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

Wednesday, April 12, 2017

Stocks continue Doleful, Doubtful Dance On Unchanged

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

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

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

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

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

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

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

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

Tuesday, April 11, 2017

Stocks Flatten Out To Open Week On Dull Trading Day

Talk about a slow news day!

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

That's it.

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

Sunday, April 9, 2017

Jobs Numbers Disappoint, Markets End Week Confused And Lower

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

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

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

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

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

Thursday, April 6, 2017

Fed Minutes Scare Traders, Turns Big Gains Into Losses

The headline says it all.

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

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

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

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

Wednesday, April 5, 2017

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

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

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

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

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

Tuesday, April 4, 2017

Stocks Stalled, Bonds Subdued, April Tax Deadline Extended

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

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

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

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

OK, got that? Good.

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

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

We'll see about that.

Sunday, April 2, 2017

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

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

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

Money Daily is back on camp schedule. More Monday.

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

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