Stocks Aren't Looking Very Bright, Threatening to Give Back Small Wekly Gains; PPI Not Improved, +0.1 in May, 2.7% Annualized

Trading has been on the old hag side of ugly so far this week, with choppiness and uncertainty evident in trading patterns that shift on any headline. Wednesday's positive slant on May's "improving" CPI reading was thrust into the red mid-afternoon. Apparently, there were some people not convinced that mature companies should be carrying price:earnings ratios above 30 or discovering that AI is only as smart and accurate as information fed into it.

The novel concept that people think and computers can only compute is finally making inroads to the investment community, along with some rationalization of the massive expense involved to power the slavish AI interfaces that feed the public with knowledge already known.

While the AI "revolution" may not be as unique or word-changing as previously thought, there are more pressing matters like global unrest, distrust of institutions, a couple of proxy wars and the real possibility of a currency crisis.

Futures are pointing to a red opening Thursday, with PPI in May advancing 0.1 percent after a 0.2 percent decline in April and an 0.1 drop in March.

That reading got little more than a yawn pre-market. Despite getting somewhat of a rise, Dow futures remain moribund, down 165 points. NASDAQ futures have cut their losses in half, down 42 points, with S&P futures down 16. Somewhere, somebody has sensed a disturbance in the farce.

Checking the Shiller PE, it is solid at 37.05, but down 0.11 on Wednesday. It's only a few standard deviations from the median PE of 16.04, with data only dating back to the 1880, so the fact that it's at the third highest level - and higher than it was at the beginning of the Great Depression, isn't anything to be concerned about since AI and/or bitcoin will solve all the world's problems. Allegedly.

The financial media continues to harp on about how close stocks are to all-time highs, when, in fact, they're not anywhere close. Just because the S&P recently cruised past 6,000 again does not necessarily imply that the all-time high of 6,144.15 is within range. Sure, it's only 2.5% higher, but the number of unresolved issues in the current environment cannot be counted on one hand, which is troubling.

Don't those people rioting in Los Angeles know that stocks are doing well? Apparently, they need more AI learning or bitcoin back in their home countries than Americans can afford, so, burning cars, looting, and general aberrant behavior will continue to be the order of the day until they're rounded up and shipped off to whence they came.

That's the story the Trump administration has laid out, and, from all indications, they're sticking to it. These people, who supposedly take on the jobs that Americans are reluctant to perform, are leaving, but, not to worry, Google and Microsoft's AI bots can pick fruit and do laundry with the best of them, allegedly.

On top of that, Trump is threatening U.S. trading partners with unilateral tariffs. This, just a day after the President took a victory lap over agreeing with China on a trade framework they agreed upon a month ago. Yes, indeed, the wheels of government turn very slowly. Imperceptibly, in this case.

That could send the S&P back below 6,000, which, according to Wall Street's experts would signal something like the end of the world.

Maybe we should do better as a people, a planet, a species. Maybe go back to a gold standard and stop kidding ourselves that Federal Reserve Notes are just one jump above monopoly money.

At the Close, Wednesday, June 11, 2025:
Dow: 42,865.77, -1.10 (-0.00%)
NASDAQ: 19,615.88, -99.11 (-0.50%)
S&P 500: 6,022.24, -16.57 (-0.27%)
NYSE Composite: 20,119.09, +4.28 (+0.02%)