Tuesday, December 31, 2019

Money, Currency, Value, Elusive, Changing, Unequal

This being the final posting for 2019, a divergence...

It's December 31. Do you know where your money is? Better, do you know what your money is?

To the unwashed, money is the crumpled pieces of paper in your pocket with pictures of dead presidents on them and some funny neo-Latin phrases and pulpy words like trust, debt, public, private, America.

It's not. Those papers are currency. Money is different. Gold is money. Silver is money. Diamonds and other precious gems are money. The paper is a convenience, a value identifier. In and of themselves, the papers with 10s or 20s or 100s on them are worth roughly the paper and ink, nothing more. But, in the minds of the unwashed, this is all there is. To them it is money. It is not money. It is currency.

The things we crave: food, shelter, cars, jewelry, these things have value. Words and numbers on paper, or digits on a computer or smartphone screen have only perceived value inasmuch as they can purchase the things we want or need, two wholly different things.

It is the thing itself that has value. The house, who some say is "worth" $450,000, others may see as worth less or as a massive misallocation of value. The house is shelter, an environment, a place of safeness, a sanctuary. It's value is derived from the joy or comfort it bestows upon the occupant(s), the safety it provides from threats of other men, from weather which we cannot control, form animal invaders. It's value, while it may be measured by a currency, is subjective. One man's 30,000 square foot castle may be no more comforting or safe than another man's cardboard box on a city sidewalk. It's a matter of perspective.

Further out, beyond the pointlessness of printed currencies, the anonymity of digitized value-measures, the sheer madness of crypto-currencies, are the certificates of ownership, of stocks, bonds, debentures, options, derivatives. Have these any intrinsic value? Not in the least. It is all perception and judgement of crowds. Often judgements are incorrect, inaccurate, altruistic, nonsensical, amusing, boring, tired, obsolete or otherwise jaded.

Like a horse race, the public gets to choose upon which favoritism is bequeathed. One horse may be valued at odds of eight-to-five. Another, sixty-to-one. They are both horses. They both run. Who is to say which horse is better on any given day? The judgement of crowds is more often wrong than right. The eight-to-five stallion does not always win the race. In fact, in practice, public favorites win only a third of the time. Imagine the same measure applied to value? A painting which sold for $300,000 in 2005, may sell for $2 million in 2020, and $45,000 in 2030. Such is the nature of value and currency. None of the numbers are correct indefinitely, but rather, acceptable in a given time, at a given place. Both value and currency are in constant flux and struggle against reality.

There is no real value in a painting.

A painting can neither feed nor clothe you, shelter you (perhaps from a rainstorm for a short period, but it would ruin the colors), but it can provide joy, prestige of ownership, emotion.

There's a number for all of that; it's elusive and always changing.

But, it's not money.

For auld lang syne, my dear
For auld lang syne,
We’ll tak a cup o’ kindness yet
For auld lang syne!

-- Robert Burns, 1788

At the Close, Monday, December 30, 2019:
Dow Jones Industrial Average: 28,462.14, -183.12 (-0.64%)
NASDAQ: 8,945.99, -60.62 (-0.67%)
S&P 500: 3,221.29, -18.73 (-0.58%)
NYSE Composite: 13,876.15, -67.99 (-0.49%)

Monday, December 30, 2019

WEEKEND WRAP HOLIDAY EDITION: Recapping: Stocks Up, Bonds Fluctuate; PMs Stable

Thank goodness, 2019 is nearly over and done. It's been a crazy 12 months, hasn't it?

With Washington in turmoil (think impeachment), Wall Street stepped up to the plate and hit stocks out of the park. It was a banner year for equity investors, one of the top three of the new century, and, with two trading days left, it has a chance to be the best year since 1997 on the S&P 500.

The NASDAQ has shown weekly gains in 11 of the last 13 weeks and the S&P has finished on the upside in 11 of the last 12 weeks.

Fresh all-time highs were attained by the major indices as early as April (NASDAQ), May (S&P), July (Dow), and as late as December for the NYSE Composite.

Bonds were up-and-down as the Fed began lowering the federal funds rate after raising it. Yield on the 10-year note was as high as 2.79% (January) and as low as 1.47 (August, September), but have steadied into a fairly tight range of 1.75% to 1.93%, the latter, higher figure reached just days ago.

Precious metals, have, for the ninth consecutive year, failed to break out of their doldrums. Holders of gold or silver have had a rough go of it this second decade of the 21st century. Silver continues to be stuck in a range between $17 and $18 per ounce, while gold presses up against resistance at $1500. Neither has been able to make any substantial progress other than sporadic, spasmodic moves in either direction.

Housing in the US continues to become more and more unaffordable for most people as wages can't keep pace with rising costs. Wealth inequality and the pauperization of the middle class is becoming a major issue that could balloon into campaign sloganism in 2020. Other than that, no predictions for next year, except to remark that the stock rally shows few signs of slowing any time soon.

If you're looking for predictions, go see a palm reader. What will happen in 2020 is fluctuation in all markets, some balkanization, especially in real estate and globally, in commodities.

Only two trading days remaining in 2019. Happy New Year!

At the close, Friday, December 27, 2019:
Dow Jones Industrial Average: 28,645.26, +23.86 (+0.08%)
NASDAQ: 9,006.62, -15.77 (-0.17%)
S&P 500: 3,240.02, +0.11 (+0.00%)
NYSE Composite: 13,944.14, +3.74 (+0.03%)

For the Week:
Dow: +190.17 (+0.67%)
NASDAQ: +81.66 (+0.91%)
S&P 500: +18.80 (+0.58%)
NYSE Composite: +54.89 (+0.40%)

Friday, December 27, 2019

Shades of the Late 90s: S&P Poised to Be Best Year Since 1997

With just three more sessions left in the year, the S&P 500 is on the cusp of becoming the best year for stock investors in 22 years, since 1997, recollecting back to the halcyon days of the tech and dotcom boom (and subsequent bust).

With the close on Thursday of 3,229.91, the S&P is up 29.24%. Friday's futures are pointing to a positive open, and the index needs to gain just less than 12 points to surpass 2013's gain of 29.60% to become not just the best year of the decade, but of the nascent 21st century. 22 years ago, in 1997, the index gained 31.01%, and that was on the back of gains of 34% and 20% in 1995 and 1996, respectively.

Closing out 2018 on December 31 at 2,506.85, the S&P has piled on more than 700 points, but not all of that was in record territory. Recall that the final three months of 2018 were downright frightening to investors, as the index tumbled from a September 20 closing high of 2,930.75 to a low of 2,351.10 on December 24, prior to Treasury Secretary Steven Mnuchin's (in)famous phone call, purportedly, to the Plunge Protection Team (PPT), aka the President's Working Group on Financial Markets.

The rest is for the history books or maybe Christmas fantasies. The tremendous slide in stocks was halted with the market closed on December 25. The index had declined from 2,743.79 on November 28 by nearly 400 points and that was after the nearly 300 point losses from late September through October with a brief rally prior to Thanksgiving.

On the 26th of December, stocks boomed, with the S&P gaining an astonishing 116 points, standing at 2,467.70 on the close of trading. Wall Street's worst fears had been vanquished. Stability returned and little by little stocks came back into favor, with slow but steady gains through the early months of 2019, finally setting a new all-time high on April 23rd, when the index closed at 2,933.68. The mini bear market lasted all of seven months.

Through the middle of the year, gains were sporadic due to tensions over the trade war between China and the United States, though any negative news was quickly dispatched with hope for a breakthrough in days following. This kind of knee-jerk up and down action continued through summer and into the fall, with the index first bounding through the 3,000 mark on July 12.

The celebration was short-lived, however, as the index dipped back below 2,850 in mid-August, but began to gather momentum which carried it through the end of the third quarter. From October 1 forward to today, the S&P has tacked on nearly another 300 points, cresting over 3,000 again for the final time on October 23. The gains in November and December alone are approaching 200 points, about seven percent.

Should the S&P close out the year with reasonable gains - and there's little reason to believe that it won't - it could be the beginning of something big, if one is a believer in the predictive nature of charts and the cyclical behavior of stocks, politics and people.

Going back to 1995, when the S&P pumped higher by 34.11% - the best gain since 1958 - the following four years were all solid ones for investors. A 20.26% gain in 1996 was followed by gains of 31.01 in 1997, 26.67 in '98, and 19.53 in 1999. Those were also the years of Bill Clinton's second term as president of the United States, and, similarly to today's political circus, he was impeached, his affair with Monica Lewinsky occurring in 1994, his eventual impeachment by the House of Representatives and subsequent acquittal by the Senate in 1998.

While the parallels between the final years of the 1990s to today's market and political environment may be described as strikingly similar there is no assuredness that the same bounty will befall investors during what is likely to be President Trump's second term in office. Since the recent impeachment fiasco has fallen flat and is currently stalled out, perhaps the Democrats in the House will go for a second try after the elections in November of next year (or maybe even before).

Democrats' undying allegiance to the faith of "orange man bad" is assured. However, it appears that the president, for all his warts and flaws and tweets, has been doing a bang-up job on the economy, and it's his successes that have triggered the Dems' ire for the most part. If the Senate remains in Republican hands, it's a safe bet that Trump will reign for four more years, and that possibly, his economic policies (remember, he's made and lost billions of dollars in private life over the years) will usher in four more years of outstanding returns on the stock market.

One caveat to bear in mind. After 1999, some may remember what happened. The tech boom went bust. The S&P lost 10.14% in 2000, 13.14% in 2001, and 23.37% in 2002. Of course, the NASDAQ fared much worse, losing 78% over the same three years.

As we approach a new decade, think positive thoughts.

At the Close, Thursday, December 26, 2019:
Dow Jones Industrial Average: 28,621.39, +105.94 (+0.37%)
NASDAQ: 9,022.39, +69.51 (+0.78%)
S&P 500: 3,239.91, +16.53 (+0.51%)
NYSE Composite: 13,940.42, +45.28 (+0.33%)

Wednesday, December 25, 2019

It's What You Buy and When You Buy (and sell) It

Stock pickers, fund managers, hedge specialists, and financial pundits will be singing the praises of the stock market for 2019, as it will go down in history as one of the better years in terms of percentage gains on the national indices.

Currently, as everybody takes a say off for Christmas, the S&P 500 is up 28.58% on the year, closing in on its best performance sine 2013 (29.60%). This is according to an interactive chart from Macrotrends.net, which shows the annual return on the S&P from 1927 to the present.

While annual returns provide a positive longterm perspective, what happens in real life is more nuanced. Not everybody buys in on January 1 and sells on December 31. Not only would that be foolish from a tax standpoint, i's hardly practical. Securities are bought and sold at varying times of the year. The trick is to time purchases and sales for maximum effect.

What the referenced chart of annual returns doesn't show, is, taking the time period from September, 2018 to the present day, the return is smaller. Those with functioning memories will recall that stocks tumbled in October and December of last year, but staged a mighty comeback in 2019. On September 17, 2018, the S&P closed at 2.929.67. On Tuesday, it stood at 3,223.38. For those who bought at that September 17 high, that comes out as a gain of 10.02% to today. Not bad, but hardly the gaudy percentage for the shorter duration.

This is not to suggest anything: that stocks are overpriced, or that a pullback is imminent, or anything, other than to illustrate that buying at the proper time results in higher returns. It also points up the fact that while the S&P, Dow and NASDAQ are all making new all-time highs presently, they were also doing so last year (and for many years before that). There's no doubt that stocks have been the all-star investments not only of the past decade, but for many decades before, and they probably will continue to be so into the future.

For holders of stocks or owners of pension funds, college funds, index funds, 401k funds, or mutual funds, this portends to be a Merry Christmas, especially if one followed the most simple constructive advice of investing: buy low, sell high.

As it should be, and to all a good night.

At the Close, Tuesday, December 24, 2019:
Dow Jones Industrial Average: 28,515.45, -36.08 (-0.13%)
NASDAQ: 8,952.88, +7.24 (+0.08%)
S&P 500: 3,223.38, -0.63 (-0.02%)
NYSE Composite: 13,895.14, -4.85 (-0.03%)

Tuesday, December 24, 2019

Sweden Done With Negative Rates; How Does The World Reverse Course?

From the land that gave us the Volvo and Greta Thunberg, comes news that the nation of Sweden has abandoned its five-year-long experiment with negative interest rates.

The news is actually about a week old, but, being that there was so much going on between the impeachment of President Trump, the China trade deal, and the public's general disinterest with anything not related to either the NFL or Christmas, that the Riksbank raising its overnight repo interest rate from -0.25% to 0.0% hardly warranted notice.

Nonetheless, the global response was as expected from the groupthink of the central bank community. Rates instantly rose, and a chorus of seemingly smart-sounding people recited verses calling for fiscal measures to be undertaken immediately, to counteract the anti-stimulative effect of cancelling out the negative rates that are, in turn, cancelling out currencies around the globe.

According to the central banking community, debt and spending must be promoted by governments as the bankers have done all they could do to alter the flow of goods and services and money in a positive direction. The Swedes have failed, and with that, so too the central banks of the Europe Union nations, Japan, Denmark, Hungary, and Switzerland.

What comes now is general consensus on the direction of economies and globalized financial repression. More spending must be undertaken by governments, on infrastructure, military hardware, green initiatives, social programs and anything else the politicians can get behind and garner more votes for themselves, virtue-signaling that they are the saviors of the free and not-so-free world.

Such a plan could not be concocted by a more smarmy gaggle of decrepit geezers and their enabling political hacks. The worldwide crackdown on savings was not efficient enough to erase decades of excess and misanthropic misadventures into economic dystopia. Now the banking and political community will expose the world to even more egregious profligate spending that will no doubt benefit few, mostly politicians and bankers.

While the Riksbank ponders life in the frozen wasteland formerly recognizable as a stable nation, the rest of the world trudges dangerously close to the financial abyss that negative interest rates have created. Reversing interest rates to a standard resembling something almost normal might prove a costly enterprise. After all, most corporations have been feasting upon low rates for so long, buying back their own stock and artificially raising equity share prices by a process of market starvation, a change that will ultimately cost more could very likely corrupt the process and actually foment a global recession.

Not to worry. The central bankers will no doubt have a solution for that as well while pointing their gnarly fingers the way of their political cronies as world economies lurch from bad policies to worse. With Christine Lagarde recently replacing Mario Draghi as president of the ECB, there's little doubt that the failed policies of her predecessor will be enhanced by more high-sounding rhetorical nonsense that will help speed the spiraling down of society into an inescapable morass.

Well, how about that. It's Christmas!

At the Close, Monday, December 23, 2019:
Dow Jones Industrial Average: 28,551.53, +96.44 (+0.34%)
NASDAQ: 8,945.65, +20.69 (+0.23%)
S&P 500: 3,224.01, +2.79 (+0.09%)
NYSE Composite: 13,899.99, +10.74 (+0.08%)

Sunday, December 22, 2019

WEEKEND WRAP: The World Might End, But Nobody Would Care

There were two major events this week, but hardly anyone cared about them.

First, President Trump was impeached. Well, at least that's what the House Democrats and Nancy Pelosi like to think, though they haven't actually sent the articles of impeachment over to the Senate for a trial.

Second, all of the major indices in the US reached new all-time highs. Not only did most people not care - it's become a foregone conclusion that stocks will always go higher, just like house prices in 2004-2007 - most didn't even notice. After all, it's close to Christmas and everybody is busy shopping, cooking, preparing to give people things they don't need, purchased with money they shouldn't be spending.

As laid back as the week was, the heat went down here at Money Daily and we didn't publish on Thursday. It was chilly and we were preoccupied with getting our trusty backup propane heater up and running. We did, it's warmer now, but the main heating unit is shot and needs to be replaced. That is supposed to happen Monday.

Another item not making any headlines was the spiking of the treasury yield curve. During the week it steepened, with the 10-year note striking a yield of 1.92% on Wednesday and holding there through Friday. The short end of the curve is a bit inverted, with one-year bills yielding more than shorter durations, though not by much. The Fed probably has all of this under control. No need to elaborate or give a darn.

If you're reading this and don't care, not to worry. Nobody else gives a hoot either, apparently.

Probably, this is what happens when markets are rigged, the media lies constantly, and politicians act like a crazed bunch of monkeys released from the local zoo. People get used to things being FUBAR and just tune out.

An asteroid could whack the earth and throw it off its axis, destroying most life on the planet and nobody would think twice about how horrible an end that would be. The remaining people would probably try to go to work the next day or turn on the TV and watch a blank screen, thinking that it's improved over what used to be broadcast.

And stocks would be up.

At the Close, Friday, December 20, 2019:
Dow Jones Industrial Average: 28,455.09, +78.13 (+0.28%)
NASDAQ: 8,924.96, +37.74 (+0.42%)
S&P 500: 3,221.22, +15.85 (+0.49%)
NYSE Composite: 13,889.25, +57.58 (+0.42%)

For the Week:
Dow: +319.71 (+1.14%)
NASDAQ: +190.08 (+2.18%)
S&P 500: +52.42 (+1.65%)
NYSE Composite: +191.91 (+1.40%)

Thursday, December 19, 2019

Despicable Democrats Impeach President Trump, Who Will Be Cleared By The Senate

Well, they've gone and done it.

The Democrat-controlled House of Representatives has voted - completely along party lines - to approve articles of impeachment, which at some point will go to the Senate, where President Donald J. Trump will almost certainly be acquitted in what figures to be a very short trial, with few witnesses, if any.

The reason the trial will be of small duration is because the Democrats, via Adam Schiff's Intelligence Committee, and Jerry Nadler's Judiciary Committee, have already ginned up enough "evidence" of Mr. Trump's supposed "Abuse of Power" and "Obstruction of Congress," that the senators don't really need to see or hear anything else. What they have before them is so flimsy, devoid of substance, and charges the president with actions that are not even crimes, that they will hopefully turn the matter out in a few days. Anything longer-lasting will be just more mud-slinging at a president who has done nothing wrong, certainly nothing even remotely impeachable.

Wednesday, December 18, 2019, was a sad day for the rule of law in the United States of America. The Democrats, led by Speaker of the House Nancy Pelosi, have foisted upon the public a shameless exercise in partisan witch-baiting. The mainstream media deserves just as much public rancor as the House Democrats for not calling these partisan hacks out on their theatrics. This impeachment exercise has been and will continue to be a complete and utter waste of everybody's time. It will accomplish nothing, except possibly to finally rid the lower chamber of congress of the Democrat majority. In that regard, December 18 may end up going down in the history books of a glorious great day of change and retribution, dashing the Democrats into the dustbin of history.

Whatever one's politics, this impeachment fiasco never rose near to seriousness. It was always a goose-chase, a farcical enterprise foisted upon the public by rank amateurs who had nothing better to do with their times in office than to take out their frustrations in a most despicable manner. The Democrats may want to brand Republican supporters as "deplorables," but these cretins masquerading as respectable representatives of the public weal, are truly disgraceful. The sooner this all gets behind the American public, the better.

As far as a market reaction, there wasn't one, as the tiresome "debate" raged on in the House until after markets were closed for the day, though there might be some hint of derision come Thursday after the bell.

Trading has been sluggish, which it usually is in the "lull" week before Christmas, which took a back seat to politics this year. There isn't much with which to move markets. Everybody seems to want to head out of town for the holidays, sooner, rather than later, and who can blame them?

At the Close, Wednesday, December 18, 2019:
Dow Jones Industrial Average: 28,239.28, -27.88 (-0.10%)
NASDAQ: 8,827.73, +4.38 (+0.05%)
S&P 500: 3,191.14, -1.38 (-0.04%)
NYSE Composite: 13,799.21, +3.86 (+0.03%)

Wednesday, December 18, 2019

Stocks Pause But Are Likely To Go Higher Soon

Markets took a breather on Tuesday, possibly in anticipation of the impeachment vote in the House of Representatives coming on Wednesday, but also not discounting the fact that stocks are once again hitting new record highs.

An appreciation that stocks may have reached untenably high valuations would likely slow down or reverse trends in most markets, but stocks in the era of free Fed money are far removed from anything approaching normalcy. This slow trading will likely last only a day or two at best, for there is money to be made in finding the greater fool, upon whom one can dispose of overpriced assets.

As far as measures of valuation are concerned, one of the best is Robert Shiller's CAPE (Cyclically Adjusted P/E) ratio, which takes the average P/E ratio of a stock over the past ten years, not just the past year or forward year as the simple P/E ratio does. It stands today at 30.60, a level above that of Black Tuesday, the fateful day in 1929 which kicked off the Great Depression.

Shiller's CAPE level, while accurately delineating the high valuation of stocks being bought and sold in today's marketplace, should also not alarm. They've been at, above or near that same level for some time. It might be instructive to note that the highest CAPE reading ever was in 2000, at the peak of the NASDAQ bubble, when the ratio stood at nearly 45.

This one-day bout of sleepiness is probably an outgrowth of being a little bit overextended in some people's minds. They are likely to be changed soon. There still appears to be plenty of room to run.

At the Close, Tuesday, December 17, 2019:
Dow Jones Industrial Average: 28,267.16, +31.27 (+0.11%)
NASDAQ: 8,823.36, +9.13 (+0.10%)
S&P 500: 3,192.52, +1.07 (+0.03%)
NYSE Composite: 13,795.35, +0.20 (+0.00%)

Tuesday, December 17, 2019

Trade Deal Sparks Rally, Enough for New All-Time Highs

Approaching year end, Monday's trading was like a toast to prosperity.

"New highs all around," was the buzz, even though stocks had taken back half of the morning's gains by the closing bell. Still, it was enough to entertain thoughts of bigger Christmas presents, newer cars, more trinkets and shiny toys for the kids and assorted other trivialities.

Phase one of the US-China trade deal was delivered, with tariffs postponed or to be curtailed by both parties to the agreement and plenty of the details still to be worked out on either side of the Pacific.

The general consensus seemed to be a relief that something concrete was finally emerging from nearly eighteen months of haranguing, harassing, arguing, pointing, posturing and persuading.

China has apparently agreed to double its import of commodities from the US, among other conditions.

Markets were pleased, but not overjoyed. Tuesday, it's back to the grind of watching the Fed and its REPO operations for the year-end "turn," a situation that has more than enough nuance to spark off volatility in either direction. There's definitely a liquidity problem somewhere, maybe everywhere, but most of the participants - the central banks, commercial banks, and primary dealers, have chosen to be pretty much mum on the details.

The Fed will just continue with extraordinary measures with daily injections via purchases and loans through the end of the year and into the next, with announced activities extending through mid-January. How much of this freshly-minted capital gets put to use in stocks is still unknown. There are funding needs and tax payments to be made, but the overall appearance is that the Fed has a handle on it and will continue to monitor it until their overnight and longer term monetary assistance is no longer needed.

And there's the rub. After these auctions, purchases, loans, and repurchases are complete and we're into 2020, will the Fed be able to turn down the spigot to more reasonable levels and eventually turn it off altogether?

That's a query for the future, unanswerable in the present.

At the Close, Monday, December 16, 2019:
Dow Jones Industrial Average: 28,235.89, +100.51 (+0.36%)
NASDAQ: 8,814.23, +79.35 (+0.91%)
S&P 500: 3,191.45, +22.65 (+0.71%)
NYSE Composite: 13,795.15, +97.81 (+0.71%)

Monday, December 16, 2019

WEEKEND WRAP: Trump Charged, Johnson Elected, Fed Throws Money to the Wind

What a week!

Not only was President Trump brought up on impeachment charges of abuse of power and obstruction of congress (whatever that is) by Jerry Nadler's gutless judiciary committee, it came on the heels of a crushing conservative victory for Boris Johnson in England. And that came just after the Federal Reserve's FOMC decided to keep the federal funds interest rate right where it was, at 1.50-1.75%.

All of this happened on Wednesday, Thursday, and Friday. There was little time, in between, for the United States and China to announce, denounce, defer, define, defend, and eventually demystify the outlines of some vague phase one trade deal, which still hasn't happened, but is supposed to, any time, any day now.

So there it was, except for a few details that may have slipped over the transom or under the proverbial rug, like the Federal Reserve supplying $500 billion in liquidity to REPO markets to handle "the turn" from December 31, 2019 to January 1, 2020.

That little nugget came and went. Everybody was too much involved over impeachment and Boris and the trade deal to notice. Such an amount of money just to get from 2019 to 2020? It sounded absurd, spending half a trillion dollars to change the calendar. Remember, there was $700 billion in TARP, back in 2009, and that supposedly rescued the entire global financial system. This amount is more than two thirds of that.

In a related story, Lee Adler of The Wall Street Examiner purports that the Federal Reserve has bought up 90% of the government's issuance of treasury bills, notes, and bonds since September 16, effectively monetizing the debt.

So, this $500 billion of liquidity from the benevolent Fed, is it a precursor of more debt monetization, or simply a safeguard against some hedge fund or larger institution crashing as one year turns to the next? Its hard to say. Like recessions, the world will likely have to wait until after the fact to find out.

On a weekly basis, the Dow has gained in seven of the last 10 weeks. The S&P was up nine of the last 10, the NASDAQ moved higher nine of the last 11, and the Composite Index finished higher nine out of the last 10 and this week closed at an all-time high, proving, once again, that it's folly to fight the Fed.

As a footnote to the coming week, the full house is expected to vote on articles of impeachment on Wednesday.

At the Close, Friday, December 13, 2019:
Dow Jones Industrial Average: 28,135.38, +3.28 (+0.01%)
NASDAQ: 8,734.88, +17.56 (+0.20%)
S&P 500: 3,168.80, +0.23 (+0.01%)
NYSE Composite: 13,697.34, -0.06 (-0.00%)

For the Week:
Dow: +120.32 (+0.43%)
NASDAQ: +78.35 (+0.91%)
S&P 500: +22.89 (+0.73%)
NYSE Composite: +109.05 (+0.80%)

Friday, December 13, 2019

Britons Vote In Conservatives As Boris Johnson Rides Populist Landslide To Majority

"We broke the deadlock, we've ended the gridlock, we've smashed the roadblock - we did it!"

Those were the words Britain's Boris Johnson used to describe his his Tory party victory in Thursday's UK general election, as the conservative party was swept into power with a commanding majority in the House of Commons, crushing the liberal Labor party and others.

Johnson's resounding message during the campaign was to "get Brexit done," and it appears the path is now clear, nearly four years after the general population voted in a referendum to leave the European Union. With not all of the districts reporting, the conservatives hold 364 seats to Labor's 202. 325 votes are needed for an outright, one-party majority and the Tories have it.

The size of the majority was of a magnitude not seen since the 1980s when Margaret Thatcher ruled over decade of conservatism. Some of the Labor seats that were lost had been voting for liberals since the 1930s. The sweep and scope of the landslide is historic.

Johnson, party leader and Prime Minister, has been pushing for a resolution to the Brexit problem over the past six months and finally was pushed into a general election, a move that eventually backfired on his opponents and has now paved the way for Britain to regain its independence and restrain or reverse the liberal spending and immigration policies that the country so desperately needs.

This election, viewed on a global basis, is an extraordinary victory for conservatives and working-class populism, mush as Donal Trump's election in 2016 was in the United States. The wave of populism just got another boost, sending the worn-out, fear-ridden policies of the left screaming for cover.

Even as the results were being tabulated Thursday night in Great Britain, voices of the losing liberals were heard using words and phrases such as "devastating," "disastrous," and "dangerous for our country," to describe the stunning victory for the right, with the general public sending a loud mandate to fix what's broken and move on.

No doubt, the liberal politicians will moan and wail, just as they have in the United States, but, in the end, the handwriting is on the wall. People want less government intervention into their lives, less meddling, and more positive, clear-headed solutions.

While many in America will have little understanding of the importance of the British elections, they send a clear message and make the case for Trump in a very distinct way.

Here is Johnson's victory speech:

At the Close, Thursday, December 12, 2019
Dow Jones Industrial Average: 28,132.05, +220.75 (+0.79%)
NASDAQ: 8,717.32, +63.27 (+0.73%)
S&P 500: 3,168.57, +26.94 (+0.86%)
NYSE Composite: 13,697.41, +117.48 (+0.87%)

Thursday, December 12, 2019

Fed Holds Rates Steady; Repo Madness Debunked

There was little reaction to the final FOMC policy decision of 2019, as the Fed chose to stand pat on the federal funds rate, adding that they expected to be no rate movement at all in 2020.

Keeping rates fixed for the next 12 months may be wishful thinking, but it also may be a level-headed approach, since, after all, 2020 will be an election year, the country has been through all manner of pain and suffering for the past three years, and a bit of stability would surely be welcome to many.

Coming from the Fed and the sobering mellow intonations of Chairman Jay Powell, the calming effect on not just markets, but society as a whole may provide a soothing tonic. With steady interest rates, businesses can plan with more confidence, individuals can maintain their standards of living and maybe balance their budgets for a change. It's a welcome relief.

At the press conference, Chairman Powell fielded one question on the intriguing REPO malaise, but didn't express any kind of apprehension or surprise. Perhaps the whole thing has been a little overblown by various pundits and press people. One article in which the Repo scare is debunked by Jeff Snider at Alhambra Partners suggests that there never was a reason to be worried about a market crash or any other unforeseen, nasty event in the first place.

So, as the holiday season continues apace, the Fed has apparently managed to calm the markets, albeit temporarily, but with an eye toward the future. If there are no interest rate changes in the coming year, that would be a feat worthy of high praise toward an institution - the Federal Reserve - that is normally the butt of jokes and the object of roundhouse criticism.

If, come late December 2020, the federal funds rate remains at 1.50-1.75%, we can call it a "Christmas miracle." For now, we can temper our optimism, relying on the scattered and unpredictable nature of world events and markets to prove the Fed wrong.

At the Close, Wednesday, December 11, 2019:
Dow Jones Industrial Average: 27,911.30, +29.58 (+0.11%)
NASDAQ: 8,654.05, +37.87 (+0.44%)
S&P 500: 3,141.63, +9.11 (+0.29%)
NYSE Composite: 13,579.92, +34.62 (+0.26%)

Wednesday, December 11, 2019

Waiting On The Fed Futility Amid Repo Crisis

Back in mid-September, as many will no doubt recall, the Fed had to step into the REPO market and provide liquidity via collateral auctions, mainly in the form of treasury bills and notes, and mortgage-backed securities (yes, the deadly MBS), which are still out there, floating around, handled like hot potatoes.

Since that time, the Fed has kept up appearances by continuing to provide POMO and TOMO (Permanent (P) and Temporary (T) Open Market Operations) to the tune of anywhere from $30 billion to $60 billion per day. That's right, PER DAY, and it's often been more. That's how big the overnight lending business is. Huge. The REPO market is also what triggered the Great Financial Crisis of 2008, when first, Bear Stearns, then, Lehman Brothers, were forced into bankruptcy by being unable to borrow from the overnight REPO market.

The problem with both Bear and Lehman was that their collateral consisted of highly toxic, dodgy MBS, or as is commonly referenced, sub-prime packaged loans. Lenders on the other side of the ledger were hesitant to lend to either, fearing that not only was the collateral of a suspect nature, the firms - Bear and Lehman - were buying more of them as an integral part of their business structure.

In 2008, this all blew up, the Fed stepped in, flooded the world with liquidity (buying up all the toxic MBS it could) and the collapse of the global financial system was averted.

Note that the collapse was averted, not solved, not cured, not by a long shot. The Fed's been busy keeping markets in some degree of stability ever since.

On Wednesday (today), the Fed's FOMC will likely announce no change n the federal funds rate, but that, besides being a foregone conclusion, isn't the real story. For that, in the interest of time and space, Money Daily bids adieu to this commentary, and offers a couple of links that may or may not render the REPO markets as something understandable to the reader.

First, this excellent video with Paddy Hirsh explaining just how the REPO market operates (about 8 minutes of time well spent):

Then, just to make matters a little more interesting, this ZeroHedge story featuring Zoltan Pozsar claiming that the REPO market is about to explode again, and that a stock market crash is imminent.

Take that ZeroHedge article with as many grains of salt or sugar your risk appetite will absorb, but bear in mind that Mr. Pozsar was, as ZeroHedge purports,...
instrumental during his tenure at both the US Treasury and the New York Fed in laying the foundations of the modern repo market, orchestrating the response to the global financial crisis and the ensuing policy debate (as virtually nobody at the Fed knew more about repo at the time than Pozsar), serving as point person on market developments for Fed, Treasury and White House officials throughout the crisis (yes, Kashkari was just the figurehead); playing the key role in building the TALF to backstop the ABS market, and advising the former head of the Fed's Markets Desk, Brian Sack, on just how the NY Fed should implement its various market interventions without disrupting and breaking the most important market of all: the multi-trillion repo market.

The Fed's FOMC policy meeting concludes at 2:00 pm ET on Wednesday, with the release of their statement followed by a press conference headed by Fed Chairman, Jay Powell, who will try his best to avoid answering direct questions dealing with the REPO market, for obvious reasons.

Party on!

At the Close, Tuesday, October 10, 2019:
Dow Jones Industrial Average: 27,881.72, -27.88 (-0.10%)
NASDAQ: 8,616.18, -5.64 (-0.07%)
S&P 500: 3,132.52, -3.44 (-0.11%)
NYSE Composite: 13,545.31, -9.77 (-0.07%)

Tuesday, December 10, 2019

Stocks Struggle Second Straight Monday; Paul Volker Passes

In what is beginning to look like a recurrent theme, stocks struggled to open the week, with all the major US indices down on the day.

This is the same condition that prevailed last week. Stocks were down hard to start the week, only to be rescued on Friday by a surprisingly good jobs report.

That may not be the case this time around. There will be no salvation by numbers later on the week. Market participants will have to deal with the troika of incessant impeachment hearings, troubling trade talks, and fruitless Federal Reserve operations.

It's no secret that the Fed has opened the spigots again, starting in September with what they're currently calling "not QE," a series of open market operations conducted on a daily basis that was originally intended to ease the malaise in overnight lending markets, and, while still performing that function, has morphed into another monstrosity, already having increased the size of the Fed balance sheet by some $300 billion.

And this will go on at least through the first quarter of next year, and probably further, because once the Fed shuts down the free money booth, there will be carnage, which is not to say there won't be carnage beforehand or that they will ever be able to completely close down their operations of largesse to the yield-starved banks.

Beyond the ordinary absurdities that has become the financial world, a moment of pause was given to mourn the passing of former Fed Chairman Paul Volker, who served in that post from August 1979 to August 1987, under presidents Carter and Reagan. Widely credited as the man to defeat the high inflation of the 70s and 80s through the use of tight money controls and ridiculously high interest rates, Volker was first seen as ridiculous, then hated, and finally emerged an American hero, rescuing the US economy from a terrific bout of inflation, unemployment, and a deep recession - caused, in part, by his raising of the federal funds rate from 11% to a record 20% - in 1981-82, that lasted 16 months.

Volker died Sunday. He was 92.

At the Close, Monday, December 9, 2019:
Dow Jones Industrial Average: 27,909.60, -105.46 (-0.38%)
NASDAQ: 8,621.83, -34.70 (-0.40%)
S&P 500: 3,135.96, -9.95 (-0.32%)
NYSE Composite: 13,555.07, -33.22 (-0.24%)

Sunday, December 8, 2019

WEEKEND WRAP: Stocks Flat After Week Of Turmoil; Media Concentration Killing Free Press

Due almost entirely to a stunning November non-farm payroll report, Friday's massive gains offset the losses incurred on the main US indices earlier in the week, leaving the Dow and NASDAQ with minimal losses and the S&P and NYSE Composite with smallish gains for the week.

With the prior month's job gains calculated to be 266,000, there was a great deal of encouragement for the US economy, despite almost no progress in US-China trade talks.

Though the week was a tumultuous one, ending with a bang, the overall arc was about as noticeable as the earth's curvature from a three-story building.

While stocks were going nowhere, crude caught a bid, as Saudi Arabia and OPEC nations vowed to cut another 500,000 barrels a day production in the first quarter of 2020. The move was seen as bullish for crude, though the cohesion of OPEC members remains questionable. The Saudi's are convinced that some members are failing to meet promised production cuts, putting lid on global oil prices. WTI crude oil closed out the week at $59.07. Gas prices shot up across the United States and Europe.

As is usually the case, gold and silver were beaten down during Friday's stock ramping. Gold ended at $1,458.40 per ounce, while silver bit the dust at $16.49.

Bonds were also whipsawed, with the 10-year note lost 11 basis points on Monday, with yield dropping from 1.83% to 1.72%, only to see it all eviscerated by Friday, finishing the week at 1.84%.

All markets appeared to be on unstable ground as the holiday season progressed and such condition may persist for the foreseeable future. The impeachment of President Trump continues apace in the House of Representatives, the trade war is likely to get hotter, holiday shopping usually lulls during the second and third week of December, and protests in Hong Kong and France (and in many other countries, over various issues) are taking a toll.

Oddly enough, America's mainstream media wishes to have nothing to do with protests in other countries, perhaps hoping that by not airing real news, Americans will not get any ideas about speaking up on issues that affect them. None of the major TV networks allowed any air time to the French protests over pensions, nor did the Washington Post. It's as though 800,000 people protesting in Paris, while the massive public transportation system was halted due to striking workers, actually did not happen. Americans are being kept in the dark about international developments unless it somehow fits their narrow narrative of "impeach Trump" and "trade war bad."

It wasn't long ago - maybe 30 years or so - that the United States had a free, fair, and balanced press. Since media cross ownership rules were relaxed, first in 1975, again in 1996, and again in 2003, media ownership concentration has gotten to the point at which we are today, where six or seven companies control roughly 95% of all mainstream media. It's no wonder that Americans are perplexed about world affairs, economics, and politics. The powers in the media have conspired together to keep the general public blissfully ignorant.

The internet has changed where Americans look for news to some degree, but, the large media companies own or control much of that as well, making it difficult for the average person to discern what is real, what is opinion, and what is fake. Until the FCC rolls back the liberalization of ownership concentration rules, Americans are almost certain to be shielded from news and stories that those overseeing network conglomerates believe to be too dangerous, too damaging, or simply to controversial to air.

The status quo, deep-state owned media in America is second only to congress as its own worst enemy and it may become even worse during the coming election year.

At the Close, Friday, December 6, 2019:
Dow Jones Industrial Average: 28,015.06, +337.27 (+1.22%)
NASDAQ: 8,656.53, +85.83 (+1.00%)
S&P 500: 3,145.91, +28.48 (+0.91%)
NYSE Composite: 13,588.29, +105.99 (+0.79%)

For the Week:
Dow: -36.35 (-0.13%)
NASDAQ: -8.94 (-0.10%)
S&P 500: +4.93 (+0.16%)
NYSE Composite: +43.08 (+0.32%)

Friday, December 6, 2019

Non-Farm Payrolls Up 266,000 In November, Unemployment At 50-Year Low

Since markets stalled out on Thursday in anticipation of the November non-farm payroll report from the Bureau of Labor Statistics (BLS), it's prudent to focus on what that report says about the US economy and prospects going forward.

Released at 8:30 am ET, the report concluded that there was an increase of 266,000 jobs created in November. That was well beyond all expectations, which centered around 185,000. The gain was the largest since January of this year, but is somewhat misleading since it includes 46,000 workers at GM plants in Michigan and Kentucky returning from a 40-day strike.

So, a more reliable, realistic number would be around 220,000, which is still much better than expected, and puts to rest the notion that the US job market had stalled out.

Wall Street is expectedly ebullient over the big surprise number which shows that the US economy is still moving forward and that the labor market remains tight. Unemployment dropped to a 50-year low of 3.5%

Another encouraging sign was wage growth, which shot up 3.1%. This is a strong signal that the economy is in good shape and that the labor market is tight. Employees are asking for - and receiving - pay increases and better benefits from employers.

A main takeaway from the retail sector in the pre-holiday period was that a mere 2,000 jobs were added, but the catch is in the distribution of that small gain. Within the industry, employment rose in general merchandise stores (+22,000) and in motor vehicle and parts dealers (+8,000), while clothing and clothing accessories stores were decimated, losing 18,000 jobs.

Attributable to the "Amazon effect" and to great strides over the years to online merchandising, as well as the overabundance of clothing outlets and their reliance on such a narrow segment, it is not surprising that purveyors of shirts, slacks, dresses, and accessories were hardest hit. Heightened competition in the space and slim profit margins due to heavy discounting also contributed to the demise of a good number of chains.

Among major chains that largely will be turning out the lights - or have already done so - in 2019 were Payless Shoes, Gymboree, Fred's, Charlotte Russe, Shopco.

Forever 21, Dressbarn, and Gap stores also announced a high number of store closings over the past year. The trend will continue, with as many as an additional 75,000 stores potentially lost by 2026, according to investment bank UBS.

The trend is clear. Shop online or at general merchandise retailers. The glory days of single sector retailing are long past.

At the Close, Thursday, December 5, 2019:
Dow Jones Industrial Average: 27,677.79, +28.01 (+0.10%)
NASDAQ: 8,570.70, +4.03 (+0.05%)
S&P 500: 3,117.43, +4.67 (+0.15%)
NYSE Composite: 13,482.30, +24.33 (+0.18%)

Thursday, December 5, 2019

Stocks Reverse Course, But Do Not Recover Recent Losses; ADP Jobs Misses Target

After three days of losses, stocks bounced back on Wednesday, though they did not recover all of the ground lost.

Since the close Wednesday prior to Thanksgiving, the Dow is down over 500 points, the NASDAQ has shed 140 points, and the S&P 500 is off 40 points. The bounce on Wednesday, December 4, recovered less than half of the recent declines. Though the losses are nothing serious in the larger scheme of things, they are signaling that at least some of the investment community are not convinced the US economy, or US corporations, are in the best of ways. Thus, profits are being taken off the table. Further declines will feed into more year-end profit-taking and further loss prevention.

Recent movement in bonds also suggests that a countertrend is developing, with money shifting from risk assets into the bond market, where returns are low but widely accepted as safer than stocks. When money flows out of dividend-producing equities into treasuries or corporate debt, it's a sure sign that investors are nervous about the future direction. Last December witnessed massive declines, bordering on sending the stock market into bearish conditions, though at decline was stopped short by Treasury Secretary Steven Mnuchin, whose message to the President's Working Group on Financial Markets (AKA the Plunge Protection Team, or PPT) was clearly designed to rescue the stock market from rampant year-end selling.

Actions taken by the Working Group served to stem the tide of sellers and produce robust gains though the better part of 2019. With the year nearing an end, stocks are once again close to all-time highs, though recent data does not support such lofty valuations. From ISM manufacturing coming in below expectations, to Wednesday's ADP private sector jobs report for November, which reported an increase of just 67,000 jobs. The payroll number was well below the expected 150,000, and was the slowest growth since May.

Analysts are warning that the ADP number may be in stark contrast to what the BLS reports in Friday's non-farm payroll data, because the ADP report did not include General Motors workers returning from strike, whereas the BLS data will include those returning workers as "jobs added." The non-farm report for November is expected to show job gains in the range of 180,000 to 187,000 on Friday, up from 128,000 in October.

It makes reading the tea leaves of market sentiment and data just a little more confusing than it already is, given the daily up-and-down movements prompted by the changing signals regarding a US trade deal with China. The trade war has been and will continue to be the main directional driver of the stock market, probably for longer than most people would entertain. The Chinese appear intent on waiting out President Trump until the 2016 election in November, and it also appears that mr. Trump is fine with that.

A non-deal on trade can only cause more consternation for investors wishing to get a real perspective on the macro side of things, though one doesn't have to look far to see that global trade has been and continues to slip and slide away. Overall, global conditions are not suitable to induce a stock market rally, though they are also not severe enough to cause a crash. A slow grind down may be the path of least resistance, with days and weeks of gains and losses speckling the index charts.

At the Close, Wednesday, December 4, 2019:
Dow Jones Industrial Average: 27,649.78, +146.97 (+0.53%)
NASDAQ: 8,566.67, +46.03 (+0.54%)
S&P 500: 3,112.76, +19.56 (+0.63%)
NYSE Composite: 13,457.97, +91.88 (+0.69%)

Wednesday, December 4, 2019

Stocks Drop for Third Straight Session

For the third straight session, US stocks finished in the red, an occurrence that hasn't befallen US indices since the first week of August. Tuesday's losses were minimized by concerted buying after the indices bottomed out mid-morning. The Dow was down more than 450 points at its nadir.

More concerning than a mild adjustment in the value of stocks was the movement in US treasuries, as the 10-year note yield dropped 11 basis points on the day, falling to 1.72%, the lowest level since October 10. After spending the first seven months of 2019 with a yield in excess of 2.00%, the benchmark bond has steadfastly maintained a "one-handle" in subsequent months. A prolonged stock selloff would likely send yields to year-lows in a rush to safety.

The ten-year note bottomed out at 1.47% in late August, early September, closing at that yield on three separate occasions. That's still a way off, though there are signs that a repeat of last December's deep stock dive could be readying.

At the Close, Tuesday, December 3, 2019:
Dow Jones Industrial Average: 27,502.81, -280.23 (-1.01%)
NASDAQ: 8,520.64, -47.34 (-0.55%)
S&P 500: 3,093.20, -20.67 (-0.66%)
NYSE Composite: 13,366.09, -82.17 (-0.61%)

Tuesday, December 3, 2019

Trade Uncertainty Tempers Markets on First Full Day of Holiday Trading

The first week of the final month of 2019 was a deviation from the general theme of 2019. Stocks were sold with reckless abandon, as were bonds, with the 10-year note bounding back to yield 1.83% - though higher during the day - a level not visited since mid-November.

The bond market felt more like churning than the start of actual long-term selling, but stocks had a different sense about them. Bad news on the US-China trade situation has the financial world in a near-panic as the deadline approaches for added tariffs to be applied on Chinese exports to the US. Additionally, President Trump reimposed tariffs on steel from Argentina and Brazil, citing the two South American countries' recent currency devaluations as reason for slapping on the tariffs "immediately."

While the steel tariffs boosted shares of US steel producers, it only exacerbated the unease surrounding the wider Chinese issue and sent stocks into a day-long tailspin. Selling was the order of the day globally, as bourses from Japan, China, Europe and the Americas all suffered declines with the sourness continuing into Tuesday as trade resumed Tuesday in international markets.

While the focus may currently be on trade and tariffs, there appears to be more to the sudden swing from buying to selling than just the movement of goods around the planet. Recall that Friday (ubiquitously know as Black Friday in the US) also witnessed declines, not the usual euphoria associated with the start of the holiday shopping season. Other concerns are various recent populist uprising in places as diverse as Hong Kong, Iran, Lebanon, India and elsewhere. Besides, it is December, so one can safely assume that any concerted selling is going to be enhanced by year-end profit-taking.

While the mainstream (now nearly completely fake) media will focus on the stock markets' generous advances during the year, they will also conveniently gloss over the dual declines from October and December of 2018, which, taken in such context, renders gains from September 2018 as practically nil.

The Dow Jones Industrial Average, for instance, is up only 1000 points since mid-September of 2018, accounting for a gain of less than a half percent. The NASDAQ has tacked on about 450 points since August of last year, while the S&P 500, at current levels, has added just 183 points over the past 15 months, the point being that stocks, though they've recently made new all-time highs, are really not much further ahead than they were more than a year ago, but the media will remind us only of what's happened in the current calendar year, which might be a tad misleading.

In any case, internationally, stocks are being whacked again Tuesday morning and US futures are looking pretty dismal, with Dow futures down nearly 300 points less than an hour prior to the opening bell.

Corporate profits have been underwhelming, to say the least, for the past few quarters, so some fundamental shift may be underway. If a flight into the safely of bonds develops, that will be a sign that the stock market is going to finish off the year on a negative note, though there's always the possibility of a Sant Calus rally the week between Christmas and New Year to save everybody's bacon.

At the Close, Monday, December 2, 2019:
Dow Jones Industrial Average: 27,783.04, -268.37 (-0.96%)
NASDAQ: 8,567.99, -97.48 (-1.12%)
S&P 500: 3,113.87, -27.11 (-0.86%)
NYSE Composite: 13,448.26, -96.95 (-0.72%)

Monday, December 2, 2019

On Black Friday, Wall Street Saw Red

Stocks finished the week with gains, even though the shortened session on Friday saw widespread declines.

While shoppers were out at retail locales seeking the big deals, Wall Street types were squaring their books in an attempt to get out ahead of what looks to be disconcerting news on the US-China trade front. Issues in the ongoing trade and tariff tete-a-tete have expanded beyond economics, spilling over into the political realm as Washington passed - and the president signed - resolutions in support of the Hong Kong protestors and human rights, roiling top Chinese officials who issued sharp rebukes on Thanksgiving Thursday.

Hong Kong's reliance upon and distancing from the Chinese political apparatus has served as a launching board for US rhetoric on freedom and rights, the interjection of which can only make what were already-tense negotiations even more complicated. US-China relations now overshadows all other conceptual and practical conditions and Wall Street has taken notice.

Shoppers snapped up $7.4 billion worth of online holiday goodies on Black Friday and are poised to spend another $9.4 billion on Cyber Monday. The numbers for online spending were records. Including Thanksgiving Day sales, online retailing grossed $11.6 billion.

Figures for brick and mortar retailers were not readily available, and may be somewhat blurred by innovations such as "buy online, pick up in store," an outreach by physical stores to combine the best of online shopping and foot traffic to stores.

It's shaping up to be a solid holiday shopping season, unsurprising, due to the robust economy, low unemployment, and the rising stock market. Consumers are not only feeling buoyant, the actually have more money in their wallets from the tax cuts made law in 2017 and implemented in 2018 and 2019.

Otherwise, the week of Thanksgiving and Black Friday was notable only for Friday's slide in the stock market. Normally, equity buyers rush in on a wave of enthusiasm. This year, however, the trade situation with China has cast a long shadow on any enthusiasm.

That dour mood may turn out to be misplaced. While the Chinese continue to foot-drag and seek rollbacks of existing tariffs before signing onto any phase one deal, American negotiators stick with the hard line established early on by President Trump. His contentions that China needs our dollars more than we need their goods, and that China has taken advantage of weaknesses by his predecessors for decades continue to guide trade policy. At the end of any deal, there has to be appreciation for not necessarily an even playing field, but one which is not slanted East. The president has made it clear that he will not acquiesce to Chinese demands or bullying and that steadfastness has kept the two countries from reaching even the most rudimentary agreements.

The likelihood of the trade war continuing through the Democrat party primaries and into the general election season are strong. China appears to be playing the long game, believing that Trump may not win re-election and that they will get a better shake from an incoming Democrat president.

Whistling in the wind is what trade negotiators are calling China's hopeful stand-offishness. Even while impeachment is being bandied about the House of Representatives, the White House sees it as no real threat since Republicans in the Senate would be highly unlikely to find Trump guilty in an impeachment trial, even if the House gins up watered-down articles of impeachment.

The entire impeachment fiasco has been nothing more than an annoyance for the White House and President Trump. Meanwhile, public sentiment for removal from office has peaked and is falling. The latest polls find fewer people engaged on the impeachment issue as the numbers in favor of impeachment have begun to slide.

In the House this week there will be more grandstanding by Democrats, whining by Republicans, and less interest by te American people, whose approval of congress is so low it hardly registers a positive number. Americans would like their government to actually do something constructive on anything outside of politics, health care being the most-often cited issue that warrants attention, along with immigration.

Flailing about and waving hands about "high crimes and misdemeanors" isn't cutting it for huge swaths of the American electorate, especially when the "evidence" produced by the anti-Trump forces consists largely of hearsay, innuendo, third party opinions, and actions that aren't even considered criminal.

Insistence by Democrats to pursue impeachment of Mr. Trump may turn out to be one of the worst political strategies ever devised, by some of the most disingenuous politicians ever to have disgraced the halls of congress.

At the Close, Friday, November 29, 2019:
Dow Jones Industrial Average: 28,051.41, -112.59 (-0.40%)
NASDAQ: 8,665.47, -39.70 (-0.46%)
S&P 500: 3,140.98, -12.65 (-0.40%)
NYSE Composite: 13,545.21, -62.39 (-0.46%)

For the Week:
Dow: +175.79 (+0.63%)
NASDAQ: +145.59 (+1.71%)
S&P 500: +30.69 (+0.99%)
NYSE Composite: +104.26 (+0.78%)