It's been an interesting week for the purveyors of paper promises known as stocks. Unless there's a massive rally on Friday, the major indices are on track for the fourth consecutive week of losses.
While the losses have not been large, they have been steady, taking the indices into or close to a 10% correction from recent or all-time highs. The Dow, NASDAQ, and S&P 500 are all trading below their 50-day moving averages. The NYSE Composite index is trading at its 200-day MA.
Asian and European indices have also been hard hit during September as, in Europe and Great Britain especially, a re-emergence of the COVID-19 virus seems to be developing, at least that's what the authoritative, tyrannical government/media/medical consortium is telling the people. Renewed lockdowns and/or stay-at-home orders may be issued within days in various European countries, primarily Germany, France, and Great Britain.
Thursday's trading action may best be described as indecisive as the indices vacillated above and below the unchanged line, eventually finishing with inconsequential gains. Futures are indicating a lower opening for Friday. A furtherance of the concentrated selling pressure would not be surprising.
(... and, at 8:08 am ET, power has been restored)
The Dow Jones Industrial Average has been hit the hardest this week. As of the close on Thursday, it is down nearly 850 points, just over three percent. The NASDAQ has suffered the least, losing 121 points, or 1.12%, but, even though this week's losses have been on the mild side, it is still down more than 10% from its September 2nd closing high of 12,074.06.
With just four trading days remaining in the month and the quarter, stocks are in a bifurcated mode: the quarter is slightly positive, but September, on its own, is vastly negative. Individuals with brokerage accounts may be in for a nasty shock when they receive their monthly statements.
What may save the stock market's bacon for the month - at least partially trimming losses - is action by congress on another round of stimulus for the American people. Both Republicans and Democrats are now scrambling to come up with a plan that makes both sides look good ahead of the November elections. Anybody with a wagering mentality would probably put money down on the House and Senate coming up with a package within the next two weeks that would offer another round of checks to middle and lower class citizens along with some partial restoration of over-the-top unemployment compensation.
It's being reported that Democrats in the House of Representatives are pulling together a $2.4 trillion plan that would include enhanced unemployment insurance, direct payments to Americans, funding for the Paycheck Protection Program small-business loan program and aid to airlines. What may ultimately push the bill to passage is any bailout for the airlines included in it. Major US airlines have been pleading for assistance from the government for months, threatening mass layoffs if they don't get some relief. Neither the Democrats nor Republicans see any positives heading into the elections with layoffs proliferating, so they may have found a key on which they can agree.
Mostly absent from this renewed effort are assistance to local governments and the US Postal Service, an issue Democrats tried to use to frame Republicans as selfish and uncaring, but their ploy failed to ignite any partisan flames. What both parties are aiming for is some kind of high ground prior to the elections, and nothing works better at buying votes than handing out cash to the electorate. While there is likely some need for many families in America for some assistance at this time, the politicians efforts are, at best, shameful and disingenuous. They're only acting because of upcoming elections. Otherwise, they'd be content to let people go homeless and starve to death.
Mark Cuban is calling for $1000 checks being doled out to every American through November. His plan calls for a stipulation that the people spend the money within ten days in a kind of "use it or lose it" function. Of course, Cuban and his billions has an ulterior motive, and that is to keep the economy moving and stocks green as grass. As the economy is almost fully dependent on consumer spending, his investments rise and fall with the general welfare of the average consumer. In a way, Cuban's desires are no different than every American though his approach to finance might be considered a bit high-handed.
It should not go without notice the most recent declines in precious metals prices on the futures and spot exchanges. The prepared paradigm calls for gold and silver to become cheaper as stocks fall off the table, as if they are one and the same. This kind of counterintuitive construct works only to benefit the paper pushers in their quest to save their failing fiat currencies. While futures may be falling along with stocks, premiums on gold and silver remain elevated. With silver beaten down below $23 an ounce and gold sold off to $1860 - a level not seen since mid-July - small investors are eyeing the pullbacks as a buying opportunity. Even with premiums, the coming weekend may be a good time to head out to the local coin shop or do some browsing on ebay or among online dealers to pick up some bargains.
With Friday's opening bell less than half an hour ahead, futures are shoring up closer to positive (NASDAQ futures are already green) though the prospects for gains on the final Friday of September still appear muted.
At the Close, Thursday, September 24, 2020:
Dow: 26,815.44, +52.31 (+0.20%)
NASDAQ: 10,672.27, +39.28 (+0.37%)
S&P 500: 3,246.59, +9.67 (+0.30%)
NYSE: 12,365.54, +6.39 (+0.05%)
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