With the Release of the Apple Watch, Have We Reached a Peak in Stocks and Stupidity?

Well, now, really, we all know the answer to the question posed in the headline, don't we?

Stocks are reaching extreme valuations, and, since the old adage, buy low, sell high always and everywhere prevails, right now might seem like as good a time as any to get the heck out of Dodge and cash in some of those high-fliers, if, that is, you still play the iStocks game on your iMac or iPhone.

Gold Apple watch $10,000 retail

Even id stocks have not reached their peaks, it's simple math and history to know that they will, at some point, and the downtrend will likely be abrupt. Or, the major indices could just meander along in a narrow downward channel over an extended period, like we had in 2000-2001, until the World Trade Center was blown up and collapsed. That's what most around at the time consider a market bottoming event, so, one does not want to be heavily invested when some kind of calamity shuts down the exchanges for a few days, or a week, or longer.

Besides trading at somewhat lofty valuations, stocks have also been trading on extremely thin volume for quite some time (this being the sixth anniversary of the 2009 bottom, that would be six years), which is also, generally speaking, a negative signal, though the pumpers at the Fed and central banks around the world have done a bang-up, jolly good job of keeping prices elevated while entire national economies are collapsing.

Some say that the markets reached a climax with the IPO of Alibaba (BABA), a dubious claim and an even more dubious event, now that allegations and proof has emerged that BABA's books were cooked by phony sales and the entirety of their public offering turned out to be nothing but a cash-out for Jack Ma and some of the top executives. We will never learn.

But, maybe it's not too late. Apple (AAPL) just had their big, big product roll-out of the new Apple Watch, an unwelcome and unnecessary accessory to the entire universe of iJunk gadgets floating around, and, beyond the watch's 18-hour battery life (huh? it's a watch, and as far as anyone can tell, there are still 24 hours in a day), price ($349 and up, all the way to the gold-plated $10,000 unit), and general uselessness, the Apple Watch may be just the ticket to grab on your way out of the Wall Street casino.

The Apple Watch does everything your iPhone does, except smaller, and you have to wear it, as a sign that you are a useless moron with excessive amounts of cash on hand with which you know not what to do, much like the major corporations in America, buying back their own stock at nose-bleed prices.

On the day, Apple's stock traded up to 129.57 (buy the rumor) prior to the release event, then fell as low as 125.06 (sell the news) as CEO Tim Cook showed off his company's latest gadget. To be fair, people are not impressed. The stock closed at 127.08, up "officially" 0.48 on the day, but, assuredly, this was not Apple's finest moment (that was 1984 when they brought out the Macintosh (Mac) computer).

Steve Jobs, bless his soul, turned over in his grave, but it's been rumored he did have a good laugh with Al Einstein and Tom Edison when they saw the new Apple Watch.

Peak Apple? Possibly.

Peak stocks? Maybe.

Peak Stupidity? We're already well past that.

Dow Jones 17,995.72, +138.94 (0.78%)
S&P 500 2,079.43, +8.17 (0.39%)
Nasdaq 4,942.44, +15.07 (0.31%)

Global Markets Tanking, US Stocks Down Again as Emerging Market Crisis Deepens

Little changed over the weekend to affect stocks, though the major issues remained. If you missed out Saturday Special Edition, it gives a good overview of what's occurring in world markets and what to expect.

Monday's action started on ominous beginnings as the Nikkei tumbled, along with all other Asian indices, most of them sporting losses of between one and two percent. When the world turned to European bourses, selling was the primary move, though losses in Europe were less severe than in Asia.

US indices opened higher, but quickly gave up their paltry gains. The NASDAQ was hardest hit, going negative and staying below the flat line for almost the entire session. The Dow - which closed lower for a fifth straight day - and S&P were up in the morning, down by midday, back up in the afternoon, but late-day selling finished them lower.

Word out of Turkey that the central bank is about to ratchet up interest rates offered some encouragement, and in Argentina, capital controls were announced, to the effect that citizens can buy up to $2,000 of US Dollars per month if their monthly salary is over 7,200 pesos ($900), after a two-year ban on buying dollars. Large businesses and investors were still barred from purchasing US Dollars as a hedge against Argentina's spiraling inflation.

The reaction to Friday's steep decline was more selling of US stocks, with declining issues beating advancers by more than a 3:1 ratio and new 52-week lows surpassing new highs for a second straight session.

The raging currency crisis did not prevent the powers that be from standing on precious metals, which were pounded down after gains in the Far East and again smoked at the NYMEX close and into the thinly-traded Globex session. At 4:00 pm ET, gold was down nearly $10 from its NYMEX high, with silver down more than 15 cents from its high mark.

After the close, tech monster Apple (AAPL) announced earnings that narrowly beat estimates, but, lagging iphone sales and a downbeat guidance for the current quarter sent shares down in after-hours trading by more than five percent.

If the Apple earnings are viewed negatively, it will only add fuel to the fire sale in stocks going forward. More companies are reporting this week, though much of investor focus is on the Fed meeting Tuesday and Wednesday. If the Fed maintains their stance of purchasing $75 billion in bonds per month - which is likely - that could provide some relief, though there seems to be a generally-mistaken idea that the Fed plans on cutting an additional $10 billion from their bond purchasing program each month. Such a move would, under current conditions, only exacerbate the flight of capital from equity markets and possibly plnge the global economy into a wide-ranging recession, which, on its own, may not be avoidable.

DOW 15,837.88, -41.23 (-0.26%)
NASDAQ 4,083.61, -44.56 (-1.08%)
S&P 1,781.56, -8.73 (-0.49%)
10-Yr Note 100.21, +0.13 (+0.13%) Yield: 2.76%
NASDAQ Volume 2.21 Bil
NYSE Volume 3.98 Bil
Combined NYSE & NASDAQ Advance - Decline: 1410-4350
Combined NYSE & NASDAQ New highs - New lows: 63-119
WTI crude oil: 95.72, -0.92
Gold: 1,263.40, -0.90
Silver: 19.79, +0.028
Corn: 431.75, +2.25

Larry Summers Departs Fed Chairmanship Sweepstakes; Markets Jubilant

You'd never think that a man turning down chairmanship of the Federal Reserve could be such a positive development, but that's exactly what sent stocks soaring today, as Larry Summers announced - in a letter to the president - that he was withdrawing his name for consideration.

It's actually another bit of pretzel logic at play, because while Mr. Summers is the ultimate insider, some folks on the inside also thought he is a hawkish sort in terms of economic policy (how misguided!), and would be likely to pull back QE quicker than most other nominees to succeed chairman Ben Bernanke.

Thus, with fear of the economic spigot being turned off being muted by his withdrawal from consideration, for now, at least, the punchbowl that the Fed so lavishly entertains its Wall Street patrons has been kept in placed and fully spiked.

That, and a severe lack of volume (again, old story), led stocks to gallop out of the gate on Monday, drifting a bit to the downside in the afternoon, with the NASDAQ being pulled down by Apple (AAPL), whose shine has lost much of its luster since the untimely death of founder Steve Jobs. Apple is no longer innovative, forward-thinking or focused on individuality; it is becoming just another greedy corporate factory, outsourcing jobs to China while reaping huge profits here in the USA. The best days of Apple as a company are long past.

Otherwise, the shootings in Washington, DC, did little to stem the orderly flow, though one might be somewhat suspect of the rally continuing, with a FOMC announcement on Wednesday and economic data floundering.

The Empire Manufacturing Index (New York) fell to 6.3 for September after posting a downwardly-revised 8.2 in August, and industrial production missed expectations for the fifth straight month, registering a flaccid increase of jut 0.4%, though even that ws better than the July reading of 0.0%. August Capacity Utilization remained fairly stagnant at 77.8%. It was 77.6% in July.

With Summers and Syria off the front pages, the market can now go back to handicapping the size of the Fed taper to be announced on Wednesday; most estimates are for the Fed to reduce bond purchases by $10 billion a month, mostly in treasuries. They have little choice but to taper, as they are gobbling up more than a third of all issuance by Treasury, and, despite rumors to the contrary, the US Treasury cannot continue borrowing ad infinitum.

Well, maybe not. Infinity is, actually, a long way off.

Dow 15,494.78, -118.72 (0.77%)
Nasdaq 3,717.85, -4.34 (0.12%)
S&P 500 1,697.60, +9.61 (0.57%)
10-Yr Bond 2.87%, -0.02
NYSE Volume 3,344,441,000
Nasdaq Volume 1,476,599,875
Combined NYSE & NASDAQ Advance - Decline: 4173-2429
Combined NYSE & NASDAQ New highs - New lows: 430-38 (imbalance)
WTI crude oil: 106.59, -1.62
Gold: 1,317.80, +9.20
Silver: 22.01, +0.289

Epic Fail: Marissa Mayer, Ron Johnson, Tim Cook and the Cult of Mediocrity

Since writing about the stock market is so damn boring these days - yeah, the Dow closed at another record high today, marginally so, though the S&P and NASDAQ couldn't quite keep up - let's take a look at some of the people who think they are shaping our collective futures.

I'm (yes, shifting to first person singular for a change) speaking here about the wannabe executives who have been boosted by people bigger than themselves - one, in particular, Steve Jobs, was actually bigger than life - and we have a triumvirate of massive failures, waiting to happen, astride some of the biggest corporate structures in America.

Marissa Mayer, the recently-installed CEO of Yahoo! (YHOO), has been catching the most attention of late, first, for her dictum that Yahoo! home-workers must begin to come into the office, and just today, on word that the redoubtable Ms. Mayer is now personally reviewing every potential new hire at the Silicon Valley firm she heads.

What a nice way to tell the HR department to F-- off! Seriously, Yahoo! employs something like 11,000 people, so, can one expect Marissa to personally interview every new employee? There's a solution to this little time-consumption mess she's created for herself, and it's called a hiring freeze. Expect one soon.

On the same matter, Ms. Mayer, is said to be leaning more towards employees who've earned degrees from prestigious universities, rather than on merit (an old-fashioned idea that people who've actually accomplished something are valuable), in order to create the correct "culture."

There's something a little disturbing about Ms. Mayer's approach to business and culture, in a way that's kind of creepy. While she told all the home-workers to make tracks back to the office or leave the employ of Yahoo!, she herself had a nursery installed near her office, so she could keep an eye on her newborn son, a benefit the former home-working-mothers do not enjoy.

Two words for Ms. Mayer: elitist. bitch.

Mayer's main claims to fame include graduating from Stanford and being the 20th employee hired by Google founders, Sergey Brin and Larry Page. Nice placement. Yahoo! stock has risen about 40% since Mayer took over as CEO, but there's little evidence to suggest Mayer has had any positive impact on the company. The site has had some redesign lately, though nothing radically different, and it still suffers from poor infrastructure and an assortment of glitches.

If Yahoo! disappeared from the internet tomorrow, it would not be missed. There are plenty of other websites which do what Yahoo! does, yet better, though, admittedly, with less organization. The internet would surely survive without Yahoo! and there would be a great talent pool of unemployed brainy types seeking more challenging employment in the valley.

Let's talk next about Tim Cook, the immediate successor to the late Steve Jobs, founder of Apple (AAPL), which, at the time of his death, was considered the greatest corporation operating in the world. Just before his death in October, 2011, Jobs, knowing he had only a few months left to live, handed over the reins to his corporate empire to Tim Cook.

Jobs, never to be mistaken as a person with great people skills, groomed Cook in his own ways, though he could certainly have not imparted his genius for inventiveness and style, nor his uncanny business acumen. For the first year under Cook, the stock soared, likely on the impetus that Jobs had left in his wake. A year out, however, Apple stock began to nosedive, and continues to falter. Apple hasn't had any new devices since the iPad Mini, and they're losing share in the smart phone wars to Samsung and other competitors.

Cook, like Mayer, happened to be in the right place at the right time, will surely be well compensated for failure, and will lead Apple back to the depths of despair the company suffered when Jobs was kicked out and replaced by John Skully. The innovation and no-nonsense management style of Jobs is long gone. Other consumer electronics firms are running circles around the once-innovative Apple.

While this is not entirely Cook's fault - one cannot be blamed just for being numb and uninspired - he'll be along for the ride... and the fall.

Third in our review of 21st century anti-heroes is another Apple wunderkind, Ron Johnson, who took over JC Penny (JCP) after being hailed as the grand designer of Apple's wonderfully-simple, yet practical stores.

Again, Johnson's story is more myth than meat. While he was head of the retail division, he also had Jobs inspecting and critically appraising every aspect of his work and also had Mickey Drexler as an advisor. Drexler, formerly of the Gap, Inc. and famously, the inventor of J. Crew, is widely and rightfully regarded as a retail genius.

In November, 2011, Johnson got the job as CEO of JCP off his glowing resume and plenty of hype. Wall Street types were peeing themselves over the thought of a person so gloriously-self-proclaimed-as-revolutionary taking over the reins at the failing mass merchandiser. Initially, the stock got a huge bump, trading as high as 43/share on the promise that Johnson would turn the company around.

The results have been nothing short of horrifying, mostly to holders of JCP stock. The hoped-for turnaround has produced nothing but a string of quarterly losses that have brought the share price down to $15, slicing it by nearly two-thirds from the heady, halcyon days of Johnson's visionary resurrection.

To his credit, Johnson has taken some responsibility, expressing in the most recent quarterly conference call that some of his strategy has not worked out very well. The company is teetering on the brink of bankruptcy, and, if it goes under, will not be missed. Like Yahoo!, there are plenty of competitors in the retail space.

It's a symptom of our misdirected times that Wall Street failures are initially hailed as heroes. They've done little to achieve their notoriety, and, arguably, are learning on the job. They are not genii in their own rights and never will be, only people who are bright followers and poor leaders. It's not their fault that they're doomed to failure, though it is sometimes fun to watch them squirm under the bright glare of public scrutiny.

If only there were a mechanism like the stock market for politicians... but, I'm entering dream-land now.

The moral of this story is that genius cannot be replaced and those chosen to walk in the footpaths of such will be handsomely paid and praised, but that garden path soon becomes adorned mostly with thorns.

The failures these people will beset upon themselves and those around them figure to be of epic proportions, and, in the case of JC Penny and Apple, already have reached what some would consider crisis stage. Companies come and go, but the stupidity of seeking out role models from the rich and connected seems a character flaw that never gets old.

...so, to close out today's chapter of "as the world yearns," this cute little song off the Beatle's Rubber Soul album came to mind. It's relevant on many different levels; recalling so many of the people I used to know but now realize that they too were mere phantoms, apparitions and shadows. This video comes complete with the lyrics, so listen along, read and learn...



Dow 14,450.06, +2.77 (0.02%)
NASDAQ 3,242.32, -10.55 (0.32%)
S&P 500 1,552.48, -3.74 (0.24%)
NYSE Composite 9,059.96, -22.27 (0.25%)
NASDAQ Volume 1,672,772,125
NYSE Volume 3,482,609,250
Combined NYSE & NASDAQ Advance - Decline: 2661-3765
Combined NYSE & NASDAQ New highs - New lows: 387-29
WTI crude oil: 92.54, +0.48
Gold: 1,591.70, +13.70
Silver: 29.17, +0.318

Dow Continues to Power Higher; Apple Cored After Hours

Editor's Note: Apologies for not posting yesterday. We had a major crash of our main computer on Sunday and have been working off a partially-impaired computer since, making life difficult and blogging an excursion into 1990s computing. A bew computer (due to arrive by Monday) should get everything back to normal within a few days.

Stocks keep climbing on hopes that the congress and the president can resolve their debt ceiling differences by passing a temporary extension (read: kicking can a bit down the road) and promising to get serious long before their May deadline (we will believe that when we see it).

The House passed the bill paving the way for an extension of the debt limit until May 19, when it will be reset to reflect additional borrowing through the interim period, voting overwhelmingly in favor across party lines, 285-144.

On Tuesday, existing haome sales came in below forecast, at 4.94M, on expectations of 5.10M (annualized). Not to worry, stocks put in another day of gains.

The Dow was the big winner today, thanks almost entirely to IBM, even though Big Blue has made the bulk of its profits over the past two years by buying back shares, thus reducing the number of shares available and making the EPS number more palatable.

Only 12 stocks on the Dow were up, compared to 17 closing in the red. Coca-Cola (KO) finished unchanged.

McDonald's reports that profits in the US were highly correlated to sales off its dollar menu, implying that either the American pallet enjoys the cheaper menu items or the American wallet is not very well-filled these days.

Apparently, not everyone is convinced that the only thing that matters is what happens in Washington. The NYSE Composite closed lower on the session.

So far in 2013, Dow Jones Industrials have finished higher on 11 of 16 trading days, including the last four straight. The average is up a whopping 675 points, roughly a five percent gain, which, in more normal times, might be good for a full year.

Caution is advised, though with the Fed pumping liquidity with every last ounce of reserve (no pun intended), the chances are that any pullback will be temporary and short-lived.

After hours, shares of Apple (AAPL) were slashed, as the company reported flat earnings per share on increased revenue (18%) year-over-year. The stock was down nearly five percent, falling below the 500 level once again.

Dow 13,779.17, +66.96(0.49%)
NASDAQ 3,153.67, +10.49(0.33%)
S&P 500 1,494.78, -2.22(0.15%)
NYSE Composite 8,828.35, -4.40 (0.05%)
NASDAQ Volume 1,687,925,130
NYSE Volume 3,764,679,750
Combined NYSE & NASDAQ Advance - Decline: 2909-3504
Combined NYSE & NASDAQ New highs - New lows: 510-10
WTI crude oil: 95.23, -1.45
Gold: 1,686.70, -6.50
Silver: 32.44, +0.262

Split Indices, Tight Ranges, Soft January

"As January goes, so goes the year."

This tired line of non-logical thinking gets bantered about every year around this time, but is especially in vogue this year after the huge ramp-up in equities on January 2nd, when fresh bank capital (courtesy of the Fed) flowed into the markets in an effort to lure in retail investors.

It's not working.

Since the biggest gain on the Dow Industrials to start a new year (January 2nd, 2013... this year) stocks have gone, well, not very far. The total gain on the Dow over the past eight sessions, including today, is less than 100 points. Big Hooray!

On the S&P 500, the gain has been a whopping eight points. The NASDAQ? 5.24 points since the massive, 92-point gain of January 2nd.

So, the point is that while CNBC and Bloomberg have been crowing about the huge "inflows" to equity funds, the truth is that there has been a net outflow from equity funds )as it has been for the past two years), and the money-creation-machine known as the Fed and its primary dealers have rigged the market higher (as usual).

Today's bid-less action, including the absurd 60-point top-to-bottom range on the Dow, was driven primarily by a rumor that two private equity firms were interested in doing an LBO on Dell. The story, broken by Bloomberg and without any supporting evidence or data, shot Dell shares through the roof and triggered a circuit-breaking halting trading.

The story was likely pure fabrication, because the markets are so dead right now the algos needed a boost to get the indices off UNCH and got it from the Dell "rumor."

Nothing is moving. Volume on the NASDAQ - despite the Dell joke and Apple (AAPL) being sold down the river - was less than 3 billion shares, an oddity even in this low-volume regime. Nobody is trading - not retail investors, at least - because the fraud and rigging has finally reached a point at which the markets cannot be trusted at all. They are controlled by the same people and companies that brought us the sub-prime mess, resultant crash and the current, fudged "recovery."

Perception being more powerful than reality, there's a very good chance that the major indices could stagnate for the rest of the month and the same talking heads on the financial networks will tell us it's going to be a great year because January was positive.

It's. Not. Working.

Dow 13,507.32, +18.89 (0.14%)
NASDAQ 3,117.50, -8.13 (0.26%)
S&P 500 1,470.68, -1.37 (0.09%)
NYSE Composite 8,717.45, +5.05 (0.06%)
NASDAQ Volume 1,879,408,375
NYSE Volume 2,956,360,000
Combined NYSE & NASDAQ Advance - Decline: 3118-3099
Combined NYSE & NASDAQ New highs - New lows: 370-10 (ridiculous)
WTI crude oil: 94.14, +0.58
Gold: 1,669.40, +8.80
Silver: 31.11, +0.702

Dow Gets Big Bump from BLS Jobs Data

Stocks got a boost from better-than-expected non-farm payroll data from the BLS, though the labor participation rate continued to slide. There were 146,000 net new jobs created in November, so no reason to blame Hurricane Sandy for anything. October's number was revised drastically lower, from 171K to 138K.

There was no movement on the fiscal cliff non-negotiations, which was supposed to be what Wall Street feared, though, as we've seen throughout the past 4+ years, anything pertaining to the economics of ordinary people or what happens on Main Street, simply gets brushed aside by Wall Street.

The NASDAQ was dragged down and the S&P weighted down by the continuing slide in shares of Apple (AAPL), a stock that is just plain broken after huge speculative plays over the past two years.

Whistling past the grave, indeed.

Dow 13,155.13, +81.09 (0.62%)
Nasdaq 2,978.04, -11.23 (0.38%)
S&P 500 1,418.07, +4.13 (0.29%)
10-Yr Bond 1.63% +0.05
NYSE Volume 3,086,974,000
Nasdaq Volume 1,612,160,125
Combined NYSE & NASDAQ Advance - Decline: 2797-2656
Combined NYSE & NASDAQ New highs - New lows: 123-50
WTI crude oil: 85.93, -0.33
Gold: 1,705.50, +3.70
Silver: 33.13, +0.017

Wall Street and Washington's Theater of the Absurd

To say that the market is comical might be a bit of an understatement, as, under the current regime of endless QE, ZIRP, no-loss corporate interests and unlimited cash funding for all manner of speculation the entity that used to be known as the "stock market" is a sad comedy with wickedly tragic undertones.

Amidst the furor over "fiscal cliff" issues, Wall Street has managed to keep a straight face, as have most commentators and analysts, but today's activity was right out of the old PPT handbook.

Despite early morning futures pump-priming, actually solid economic data and no progress in Washington, stocks found themselves slumped into negative territory at 11:00 am ET.

However, this being a market typified by HFT and wing-and-a-prayer whimsical day-trading, that point in time marked low tide for the day.

Without warning and on absolutely no relevant news (we searched and searched and could not find a suitable catalytic argument), the Dow Industrials surged a massive 150 points in the next hour, making a v-bottom u-turn that was dazzling if for only its rapidity.

The news wires were touting the move as inspired by Bank of America, and, to a lesser extent, Citigroup, which today announced layoffs of 11,000, sending that stock up 2.17 (6.33%). It's a counter-intuitive world when slashing jobs causes such a huge run-up, but this is, after all, the bizarre world of Wall Street, where profits supersede humanity. BofA, for its part, surged 56 cents, to 10.46, a new 52-week high. The only caveat for the TBTF banks might be that they are in the midst of another round of stress tests, and, apparently, are set to receive passing grades despite having a multitude of unresolved bad debts residing both on and off their balance sheets.

Finally marking its zenith with a 137-point advance, the Dow meandered along through the afternoon, finally giving up the charade late in the session by cutting its gains nearly in half. The other laughable part was Apple (AAPL) which was hammered once again by profit-takers, taking down the NASDAQ - which remained in the red all session long - with it.

It's fairly common knowledge that over the past four years, rallies led by banks hae a kind of phantom character to them. Since banking's books are so opaque, only the select circle of insiders really know how to value them, and said values may or may not be realistic. Time only will tell.

Belying the rally, the advance-decline line was negative and the margin of new highs over new lows continued to tighten.

Meanwhile, Washington did its part to keep the comical nature of events going strong. Congressional members largely departed the Capitol at noon today, apparently having nothing to do and opting for a long weekend. Yes, a long weekend, just prior to what's planned to be a three-week holiday holiday beginning December 14.

Tis strange – but true; for truth is always strange; stranger than fiction.

-- Lord Byron

Dow 13,034.49, +82.71 (0.64%)
NASDAQ 2,973.70, -22.99 (0.77%)
S&P 500 1,409.28, +2.23 (0.16%)
NYSE Composite 8,270.43, +46.56 (0.57%)
NASDAQ Volume 1,747,690,750
NYSE Volume 4,086,650,000
Combined NYSE & NASDAQ Advance - Decline: 2641-2821
Combined NYSE & NASDAQ New highs - New lows: 121-65
WTI crude oil: 87.88, -0.62
Gold: 1,693.80, -2.00
Silver: 32.96, +0.149

Early Case of Holiday Blahs for Equities

Trading was sluggish and mostly to the downside in the morning session - likely on quick profit-taking from the Black Friday rally - but capital was re-allocated in the afternoon, as stocks rallied into the close.

Concerns over resolution to US fiscal issues and Europe's finalizing yet another round of financing for Greece kept stocks in the red for almost the entire day, except for the NASDAQ, which was boosted largely on trades in Apple (AAPL), which was up more than three percent on the day.

There was little in the way of economic data or corporate news to move markets, as trading volumes were at low levels.

Simply put, there wasn't even a left-over turkey leg to Friday's rally as traders were quick to pul the sell lever with so many issues overhanging the markets.

The Dow, down as much as 109 points before noon, rallied to close near the best level of the day, which, of course, means nothing.

Things should get more interesting as news of talks between Republicans and Democrats on the "fiscal cliff" issue begin to circulate throughout the week.

Dow 12,967.37, -42.31 (0.33%)
Nasdaq 2,976.78, +9.93 (0.33%)
S&P 500 1,406.29, -2.86 (0.20%)
NYSE Composite 8,197.48, -28.02(0.34%)
NYSE Volume 2,833,759,250
Nasdaq Volume 1,559,037,750
Combined NYSE & NASDAQ Advance - Decline: 2636-2880
Combined NYSE & NASDAQ New highs - New lows: 124-40
WTI crude oil: 87.74, -0.54
Gold: 1,749.60, -1.80
Silver: 34.14, +0.021

Dull Trading Session, But Apple, Amazon Ignite After-Hours Fireworks

The wall of worry the market climbed all summer is quickly turing into a slippery slope of dissatisfaction, mostly with corporate earnings, and, over the past few days, the accelerating pace of layoffs, something the market hasn't dealt with in any size since 2010.

Stocks opened gap up, quickly decelerated and spent the majority of the session hugging the flat line. Only in the final 15 minutes did all of the indices turn sharply positive, if gains of 0.30% or so can be called sharp, though considering the growing number of earnings misses, is probably the best that could be expected.

There was a definite expression of waiting and hoping in the sentiment today, with few traders staking out new positions in advance of earnings releases by tech giants Amazon (AMZN) and Apple (APPL), both due out after the bell.

Amazon reported just minutes after the close of markets, putting up some god-awful numbers, short on revenue at 13.81 billion when the street was looking for 13.92, and a 23 cent loss ex-items on expectations of an eight-cent dip. Including one-time charges, Amazon's loss was 60 cents per share. Investors were not pleased and immediately sent the stock careering down seven percent in after hours trading.

Shortly thereafter, Apple reported earnings of $8.67 per share for its fiscal fourth quarter, less than the consensus estimate of $8.75. Revenues came in at $35.96 billion, above the $35.8 billion that analysts had sought. Share traded about one percent lower in extended trading.

Weakness in the two tech retailers was not entirely unexpected, though in Amazon's case, the loss was quite a bit on the downside, setting up for an interesting day Friday on the NASDAQ where both Amazon and Apple trade.

Dow 13,103.68, +26.34(0.20%)
NASDAQ 2,986.12, +4.42(0.15%)
S&P 500 1,412.97, +4.22(0.30%)
NYSE Composite 8,211.87, +32.61(0.40%)
NASDAQ Volume 1,846,098,130
NYSE Volume 3,447,291,500
Combined NYSE & NASDAQ Advance - Decline: 3231-2256
Combined NYSE & NASDAQ New highs - New lows: 141-98
WTI crude oil: 86.05, +0.32
Gold: 1,713.00, +11.40
Silver: 32.08, +0.458

Reality Catching Up to Wall Street on Earnings Misses, Fears

Around June, this author told a particularly self-absorbed, furtive individual that there would be a market "event" shortly before the presidential election, designed to offer the impression that the economy, under president Obama, was failing in multitudinous ways, designed to usher in Mitt Romney as the next occupant of the White House.

Until today, that prediction seemed somewhat unreasonable, as stocks have risen sharply during the summer months, but, as third quarter earnings - in addition to various warnings from the likes of the IMF and World Bank - are proving, the US and global economies are far from what anyone would consider healthy.

Today's sharp sell-off was the product of many misses and warnings by huge multi-national companies that either missed earnings and/or revenue estimates or issued warnings for the months ahead.

Among those companies that fell short of Wall Street's lowered estimates after Thursday's close and prior to Friday's open were McDonald's (MCD), Microsoft (MSFT), Google (GOOG), high-flying Chipolte Mexican Grill (CMG), and General Electric (GE). The misses came behind similar poor showings from Intel (hit a 52-week low today) and IBM, earlier in the week and proved quite a few sell-side analysts correct in predicting that this quarter would be very rough from an earnings perspective.

Truth be told, even those companies beating earnings estimates are not beating by much, with some exceptions, and are generally hitting targets that are lower than the previous years numbers, which, as the market is a continuous-discounting mechanism, means stocks are going in reverse, with earnings falling, not growing.

That alone should explain today's deep, across-the-board, declines, but also brings into question the entire philosophy behind central bank easing and money printing on a global scale. Sure enough, easy money has propped up banks and companies and a multitude of stocks and indices, but the end result of funny fiat money always reverts to a point at which currencies become worthless and derivative instruments, such as stocks, and, further out, bonds, lose value and we could be nearing the conclusion of the failed stimulative experiment that's fixed nothing since the crash of 2008.

Speaking of crashes, today's drop pales by comparison to what occurred 25 years ago to the day, the well-known stock market crash of 1987, when the Dow Jones Industrial Average fell by 23%. It was a seminal market event that will probably (hopefully) never be repeated, as there are supposedly more safeguards and triggers - to say nothing of the PPT - to prevent such a disastrous one-day event.

That is not to say that markets, stocks and indices cannot fall hard over periods of time, though it is far too soon to call today's action the beginning of such a a downward spiral. However, with tech stocks and industrials feeling the heat from investors in an earnings season that has been short on enthusiasm and long on fear, the coming weeks, especially with the November elections as a backdrop, could produce some calamities such as have already been seen in individual stocks, many of which were grossly overvalued and highly speculative, Chipolte and Apple come immediately to mind.

Checking the charts, it's useful to point out that the Dow and S&P broke through their 50-day moving averages and closed just about right on them, a position last seen a week ago, before Monday and Tuesday's "savior" rallies pushed equities back to something of a triple top, which has now broken down in a dramatic reversal. Today's declines on the two indices were the worst since mid-June. Shortly thereafter, both indices progressed above their 50-day MA, but have now returned to the roost, setting up a very unsettling weekend and a potential breakdown on Monday or further on during the week.

As for the NASDAQ, today's worst percentage loser, that index has been screaming red for a month, having busted through its 50-day MA eight sessions ago. Any further deterioration in the beloved NAZ could trigger a serious correction, as it is already down 7% in the past month.

Looking ahead to next week, earnings reports are due out on some big names, such as Cattepillar (CAT), Las Vegas Sands (LVS), Yahoo (YHOO) and Texas Instruments (TXN) on Monday; 3M (MMM), Coach (COH), Facebook (FB) and United Parcel Service (UPS) on Tuesday; and, on Wednesday, Boeing (BA), Eli Lilly (LLY), General Dynamics (GD), Lockheed Martin (LMT) and O'Reilly Automotive (ORLY).

Those mentioned above are but a smattering of companies reporting, in what will be the busiest week of earnings season. CNBC and Bloomberg will be looking for rays of hope, while investors may have a more wary eye toward more companies missing on earnings and revenue.

One economic data point worth noting was existing home sales for September, falling 1.7% to an annual run rate of 4.75 million, well below most estimates.

Until then, the long weekend waiting game, and, on Monday night, the final presidential debate, followed on Wednesday another FOMC rate policy decision, which will probably be nothing more than a formality.

Naturally, there will be the usual can-kicking and posturing from Europe, which still cannot come up with plans for either Greece or Spain, which may or may not be part of the plan to hold off the bad news until after our elections. One can hardly wait.

That is all... for now.

Dow 13,343.51, -205.43 (1.52%)
NASDAQ 3,005.62, -67.25 (2.19%)
S&P 500 1,433.19, -24.15 (1.66%)
NYSE Composite 8,324.14, -118.68 (1.41%)
NASDAQ Volume 2,194,602,500.00
NYSE Volume 3,851,036,250
Combined NYSE & NASDAQ Advance - Decline: 1168-4339
Combined NYSE & NASDAQ New highs - New lows: 166-117
WTI crude oil: 90.05, -2.05
Gold: 1,724.00, -20.70
Silver: 32.10, -0.771

Markets Close Down 17th Time in Last 19 Mondays

The headline says all you need to know.

Stocks spent the entire day languishing in a narrow, negative range, on really ugly volume (it was, after all, a (half)holiday, Columbus Day), but pared early losses to finish marginally down, except for the NASDAQ, which was dragged down considerably by Apple (AAPL).

Other than the usual Monday blues, there was no economic data to report as traders await third quarter earnings reports, which will be kicked off by Alcoa (AA) Tuesday after the bell.

There's some noise coming from Europe, which may not be all good. The first meeting of the ESM was today, though the ministers spent most of the time arguing about just how big Europe's main bailout fund should be.

Here's a clue for them all: whatever you decide on, it will not be enough.

Dow 13,583.65, -26.50 (0.19%)
NASDAQ 3,112.35, -23.84 (0.76%)
S&P 500 1,455.88, -5.05 (0.35%)
NYSE Composite 8,358.86, -25.21 (0.30%)
NASDAQ Volume 1,173,675,250
NYSE Volume 2,305,869,000
Combined NYSE & NASDAQ Advance - Decline: 2020-3386
Combined NYSE & NASDAQ New highs - New lows: 174-51
WTI crude oil: 89.33, -0.55
Gold: 1,775.70, -5.10
Silver: 34.02, -0.555

Stocks Fail on Stormy Tuesday; The Misinformation Age

Well, it's not Monday, but it is the first day of the workweek, so stocks must go down. And they did, with the exception of the NASDAQ, which went from the worst-performing index to the best in a matter of 40 minutes - from roughly 2:00 pm to 2:40 pm EDT, going from a loss of 10 points to a gain of 15.

The Dow and S%P tagged along somewhat, but that drove the NAZ higher was none other than Apple (AAPL), which recorded almost half of its 9.73-point gain during that time period.

So, why then does CNBC report that the surge in stocks - the Dow was down nearly 115 points at the lows of the day, the NASDAQ off more than 26 - was due to a tweet by PIMCO's Bill Gross, who, mentioning that Mario Draghi, head of the ECB, willingness to offer 1, 2, and 3-year "loans" (bond purchases) to sovereign nations in the Eurozone, was reflationary and that investors should buy GOLD, TIPS AND REAL ASSETS.

Note that Gross did not say "STOCKS," though CNBC, the masters of misinformation, wishes the assembled masses of hoe viewers would believe that Mr. Gross is a perma-bull, when the exact opposite is true.

Welcome to the age of heightened misinformation.

There was a story today out of Stanford about organic foods not being any better than mass-produced, GMO, pesticide-riddled crap that drives US corporate agribusiness.

Two studies of children consuming organic and conventional diets did find lower levels of pesticide residues in the urine of children on organic diets, though the significance of these findings on child health is unclear, noted the researchers.

I'll take lower levels of pesticides in my urine for $400, Alex.

Just guessing, but could the major contributors to these Stanford researchers possibly be Monsanto and the US Dept. of Agriculture?

Other misinformation predominates what passes for news and journalism these days. For instance, according to the ECB's Mario Draghi, buying 1, 2, and 3-year bonds from sovereign nations does not violate the EU's basic treaty, which forbids such actions... OK. Obama and Romney sound like they differ widely on policies, when both, in fact, are nothing but shills for wealthy individuals and corporations which fund their campaigns. Facebook has lost 50% of market value since its IPO four short months ago, but it's still a solid company.

Trading volume, which was supposed to rebound as soon as all the Wall Street heavy hitters returned after Labor Day, was only a little better today than during July and August. US markets are so thinly-traded that manipulation by a group of well-timed players or even the PPT is easier than ever.

Keep an eye on gold and silver, maybe especially silver, which has exploded over the past three weeks. Gold's being suppressed below $1700, though it seems the central banking cartel cannot hold that level much longer. The Dow fell below 13,000 today, but was pumped back above it, ditto the S&P at 1400. These trades and ranges are due to break down soon.

Today's ISM reading of 49.6 was the third in a row showing contraction, though now, according to Steve Liesman of CNBC. the number to watch is 42.6, which would show contraction for the entire economy. Pure bunk.

Construction spending was off 0.9% in July. That a sizable decline, and why stocks fell out after the two reports at 10:00 am EDT.

Just to refresh one's memory, here's a nifty video of why we're where we are.



Dow 13,035.94, -54.90 (0.42%)
NASDAQ 3,075.06, +8.10 (0.26%)
S&P 500 1,404.94, -1.64 (0.12%)
NYSE Composite 8,002.31, -12.61 (0.16%)
NASDAQ Volume 1,505,270,625
NYSE Volume 3,086,772,250
Combined NYSE & NASDAQ Advance - Decline: 3319-2194
Combined NYSE & NASDAQ New highs - New lows: 288-64
WTI crude oil: 95.30, -1.17
Gold: 1,698.40, +10.80
Silver: 32.41, +0.97

Despite Big Move By Apple, Stocks Have No Monday Lift

As has been the case for many weeks (as noted in Friday's posting), stocks could simply not find any meaningful reasons to move to higher ground, even in the wake of a big move by Apple after a federal jury awarded Apple $1 billion in its patent infringement case over rival Samsung.

Apple stock hit an all-time high of 680.87 in early trading, but drifted lower throughout the session.

Veteran tape-watchers (we're fairly certain there are a few left out there) must have dozed off from another in a seemingly-endless stream of low-volume, noiseless, motion-defying trading. All but the first and last hours saw any significant action. The trading range on the Dow amounted to less than 80 points from top to bottom, with stocks selling off in the final hour and closing near the lows of the session.

Of the major averages, only the NASDAQ finished in positive territory, though it was green by only three points. The Dow was the biggest percentage loser, off 0.25% on the day.

Otherwise, there was little to no interest in equities on first day of the final unofficial week of summer, prior to the three-day Labor Day holiday.

Traders may be asleep at the switch and/or holding positions until after the holiday and Ben Bernanke's speech to the assembled central bankers and key economists at Jackson Hole on Friday.

Many on Wall Street are expecting Bernanke to signal another round of quantitative easing (QE), as he did in his 2010 speech, though skeptics of that theory abound, citing politics (the elections are nearly just two months away) and the muddled and murky economic picture as reasons the chairman of the world's largest central bank will not offer specificity in his remarks.

Additionally, ECB president Mario Draghi will present at the symposium, though his record for signaling specific policy actions are spotty at best. Draghi, as well as most European politicians, seems always to be long on rhetoric and short on delivery of specifics.

Outside of some M&A activity and Apple's move higher, the week began with a dolorous thud and will likely end that way unless Bernanke can be convinced that the time for the Fed to act - once again - is now. The high degree of uncertainty and doubt in the markets and general economy will likely keep a lid on what have to be viewed as excessively overpriced stocks and accompanying indices.

Dow 13,124.67, -33.30 (0.25%)
NASDAQ 3,073.19, +3.40 (0.11%)
S&P 500 1,410.44, -0.69 (0.05%)
NYSE Composite 8,033.93, -13.94 (0.17%)
NASDAQ Volume 1,363,789,875
NYSE Volume 2,439,756,500
Combined NYSE & NASDAQ Advance - Decline: 2676-2833
Combined NYSE & NASDAQ New highs - New lows: 162-45
WTI crude oil: 95.47, -0.68
Gold: 1,675.60, +2.70
Silver: 31.05, +0.43

More Losses For European, US Markets; Apple Misses Big on Earnings, Revenue

As per the usual, US stocks pared much of their losses in the final fourty minutes of trading, the Dow shaving its decline in half, with the other major indices following suit.

The trend has been lower for three straight sessions, with the Dow losing somewhere in the vicinity of 100 points a day. Catalysts for the declines are various and diverse, from poor US data - the Richmond Fed manufacturing index came in at -17 on expectations of -1, the lowest level since April 2009 - concerns over the Spanish government needing a bailout, or Moody's lowering the outlooks for Germany, the Netherlands and Luxembourg to negative late Monday.

Even China got some play as their flash PMI number rose to the best level in five months, though at 49.5, still showed contraction. The blip from the Far East was seen as a positive, though more than likely, a minor one, as one month's data surely does not make a trend and data from China is widely regarded as highly unreliable.

In Europe, most of the stock indices took losses, though not as heavily as on Monday. The mood on the continent is extremely guarded, as yields on benchmark 10-year notes in Spain and Italy have hovered around or exceeded the 7% mark.

Here in the states, the 10-year yield continues to fall, as predicted by Paul Craig Roberts and other astute economists (see yesterday's post), to a record low yield of 1.39, while the 30-year bond closed at 2.46, also a record low.

Market conditions and sentiment appear to be quickly worsening, with the advance-decline line negative for three straight days and the new highs - new lows metric having reversed to negative on Monday and continuing to worsen with Tuesday's session.

Commodities were mostly lower, with the notable exception of oil, which continues to be boosted by ongoing uncertainty over Iran, though the corn and soybean futures markets were notably nixed, as slack demand seems to be trumping even the effect of the worst drought since the 1950s.

All of the data and market moves seem to be pointing toward Friday's initial reading of second quarter GDP, slated for release at 8:30 am EDT on Friday. Forecasts range from 0.3% to 1.7% growth, though estimates have been coming down from a variety of sources in recent days and third quarter and second half GDP outlooks have been routinely revised lower.

As it turns out, however, the biggest news of the day came may have come after the markets had already closed, when Apple (APPL) reported a fiscal third quarter earnings miss that sent the stock markedly lower.

From the LA Times:

The technology giant said profit rose 21% to $8.8 billion, or $9.32 per share, on revenue of $35 billion, up 22% from a year earlier. The results were less than what analysts had expected. Shares plummeted in after-hours trading, falling $34, or nearly 6%, to $566.78.

Analysts surveyed by Thomson Reuters had estimated that Apple would post earnings per share of $10.36 on revenue of $37.2 billion. A year earlier, the Cupertino, Calif., technology behemoth reported record quarterly revenue of $28.6 billion and record profit of $7.3 billion, or $7.79 a share. That was a 121% increase over its third-quarter 2010 earnings per share.

If Apple, the bellwether for all tech stocks and a major component of the S&P 500 and NASDAQ 100, cannot beat lowered expectations, then perhaps the idea that a global deflationary slowdown is well underway might finally dawn on not ony the wizards of Wall Street but the average Joe and Jane Sixpacks, who likely already have gotten the memo, having not enough income to afford an iPad or iPhone, essentially spending whatever income they have on survival items like food and fuel.

Good grief! Can it get any worse?

We already know the answer to that.

Dow 12,617.32, -104.14 (0.82%)
NASDAQ 2,862.99, -27.16 (0.94%)
S&P 500 1,338.31, -12.21 (0.90%)
NYSE Composite 7,590.61, -79.92 (1.04%)
NASDAQ Volume 1,735,519,125.00
NYSE Volume 3,853,596,750
Combined NYSE & NASDAQ Advance - Decline: 1484-4064
Combined NYSE & NASDAQ New highs - New lows: 118-210
WTI crude oil: 88.50, +0.36
Gold: 1,576.20, -1.20
Silver: 26.81, -0.23

NASDAQ Slides in (Unfounded) Apple Anticipation Fears; FOMC Meeting Concludes Wednesday

US markets rebounded from Monday's sharp selloff, though the S&P and NASDAQ were weighed down on fears that Apple (AAPL) would not deliver the usual stellar results after AT&T reported a decline in Apple iPhone activations in the first quarter.

The mercurial company founded and made famous by the recently-deceased Steve Jobs had been ramped up to become the most wealthy company on the planet earlier this year, though investors have been ravenously taking profits in recent weeks. Apple shares, which hit an all-time closing high of 636.23 on April 9th, has sold off viciously over the past two weeks, leading up to today's first quarter earnings announcement, after the closing bell.

Shares have fallen more than 15% to today's close at 560.28, the 10th day the stock has traded lower in the last 11.

After the bell, earnings were released, showing that Apple blew away estimates, as usual. Analysts were looking for earnings per share of $10.04 on revenue of $36.8 billion. Apple's first quarter results were $12.30 per share on $39.2 billion in revenue. Shares were up more than 40 points in after-hours trading, putting AAPL back above $600 per share.

Besides the interest in Apple, there were other issues on the minds of investors, primarily the ongoing FOMC meeting which concludes Wednesday afternoon, at which time the Fed governors are expected to keep interest rates where they have been for more than two years, approaching zero, though market analysts and Fed watchers will be poring over the text of the release and dissecting Fed chairman Ben Bernanke's new conference following the policy statement for any hints that may indicate the Fed leaning toward more QE, without which US markets would likely contract in a big way.

Currently in the final weeks of "Operation Twist," which expires in June, investors are hungry for more free money from the Fed and a continuation of the policy of easy money which has supported stocks since the financial collapse of 2008.

They'll all have to wait until 2:15 pm on Wednesday and thereafter for the news conference, though most see a continuation of QE in some form as a distinct possibility, though the Fed has let some time go by after the first two rounds - QE1 and QE2 - before embarking on further easing.

Dow 13,001.56, +74.39 (0.58%)
NASDAQ 2,961.60, -8.85 (0.30%)
S&P 500 1,371.97, +5.03 (0.37%)
NYSE Composite 7,988.01, +47.28 (0.60%)
NASDAQ Volume 1,691,154,875
NYSE Volume 3,592,090,500
Combined NYSE & NASDAQ Advance - Decline: 2715-1920
Combined NYSE & NASDAQ New highs - New lows: 109-61
WTI crude oil: 103.55, +0.44
Gold: 1,643.80, +11.20
Silver: 30.75, +0.22

Apple Bifurcates Markets on Big Sell-off; Spain, Housing in Focus

Before getting to why the major indices were all over the map today, a couple of key economic data points:

The NAHB Housing Market Index fell for the first time in seven months, from 28 in March to 25 in April. A figure of 50 is considered "break even" wherein more builders are more confident. Obviously, this latest dip leasves new hoe builders nowhere close.

Regionally, the Northeast posted a four-point gain to 29 (its highest level since May of 2010), the West saw no change at 32, the South declined three poins to 24 and the Midwest was the weakest, posting an eight-point decline to 23.

With new home sales on tap for tomorrow, housing appears to be as weak as it ever has.

Retail sales for March posted an unexpected 0.8% gain on expectations of just a 0.3% rise, somewhat of a surprise considering high fuel costs and other issues facing consumers (no jobs, no homes, high debt, etc.).

On the downside, the Empire Manufacturing Index nose-dived from 20.21 in March to 6.56 in April. The collected wisdom of forecasters expected a decline - to 17.6. New orders and shipments were down, while the employment situation was mixed with more jobs, but for shorter durations.

Taken together, these data sets reveal a US economy that is crawling along and possibly sputtering to stall speed.

Investors in Apple (AAPL) took some long-overdue profits on Monday, sending the world's largest company by market cap down 25.10 points (4.15%), to close at 580.13, the worst decline for Apple in more than six months. Investors were buoyed by a 45% gain in the company stock since October, however.

The weight of Apple on the various indices was obvious, with the NASDAQ the most severely affected, the S&P less so. Meanwhile, the Dow registered a strong showing, with 24 of the 30 components sporting gains, led by Travelers (TRV), Proctor & Gamble (PG), Wal-Mart (WMT) and DuPont (DD).

Otherwise, it was a straightforward session, with much of the focus centered on Spain's 10-year note, which spiked back above 6% on the day and sent bond holders scrambling for the safety of the German Bund, which is nearing historic lows. The pressure on Spain's funding continues to fuel speculation that the country will need a Greek-style bailout soon.

Dow 12,921.41, +71.82 (0.56%)
NASDAQ 2,988.40, -22.93 (0.76%)
S&P 500 1,369.57, -0.69 (0.05%)
NYSE Composite 7,949.57, +18.47 (0.23%)
NASDAQ Volume 1,566,279,375
NYSE Volume 3,444,850,000
Combined NYSE & NASDAQ Advance - Decline: 3083-2500
Combined NYSE & NASDAQ New highs - New lows: 109-106
WTI crude oil: 102.93, +0.10
Gold: 1,649.70, -10.50
Silver: 31.37, -0.02

US Stocks Bounce Back, But Close Flat on Weak Volume

Yesterday's deep decline was followed on Wednesday by the typical knee-jerk, snap-back, dead cat bounce rally, which occurred at the market open but quickly ran out of steam.

For the remainder of the session after 11:00 am EDT, stocks drifted about in a narrow range and volume was noticeably tepid, considering that Tuesday's volume was among the highest of the year. It was also confirmed that Monday's incredibly weak showing was the second lowest volume day of the year, yet another example of how, despite the best efforts of Wall Street hucksters and Federal Reserve pumping, individual investors and practically anybody who is not a fund manager or professional of some ilk simply does not want to be in this market for equities.

Today's lackluster showing was in spite of Alcoa's strong earnings report after the bell on Tuesday, a pleasant earnings kick-off surprise that was promptly disregarded.

For a day, at least, there was no imminent threat of currency or sovereign collapse coming from across the Atlantic where almost all European bourses registered modest gains.

There was little new with which to move markets, a condition which may change on Thursday, as initial unemployment claims and the March PPI figures are released prior to the opening bell. On Friday, JP Morgan Chase (JPM) and Wells-Fargo (WFC) announce first quarter earnings before the open.

In one of the more absurd wastes of taxpayer money, the nearly-invisible Attorney General, Eric Holder, unsheathed a his DOJ sword with a price- fixing antitrust lawsuit against Apple (AAPL) and five book publishers for colluding to fix prices of e-books sold on the iPad platform. Three of the named publishers have already agreed to a settlement, though several states are pursuing civil actions of their own. The suit seeks monetary damages. Apple had no comment.

Clearly, the Department of Justice is completely inept, pursuing nothing other than sure-win, low-hanging fruit variety lawsuits and the federal government is desperate for dough, though what they'll gain from this silly effort is akin to a teaspoon from a barrel of debt.

Dow 12,805.39, +89.46 (0.70%)
NASDAQ 3,016.46, +25.24 (0.84%)
S&P 500 1,368.71, +10.12 (0.74%)
NYSE Composite 7,905.74, +63.82 (0.81%)
NASDAQ Volume 1,504,835,625
NYSE Volume 3,724,551,250
Combined NYSE & NASDAQ Advance - Decline: 4435-1196
Combined NYSE & NASDAQ New highs - New lows: 58-59
WTI crude oil: 102.70, +1.68
Gold: 1,660.30, -0.40
Silver: 31.52, -0.16

Greece Passes Austerity Measures; Obama Budget Goes to Congress; Apple Closes Above 500

Any angst over Greece's passing of their mandatory austerity measures was quickly dispelled by the markets on Monday. Most European bourses finished the day solidly in the green, and US markets followed suit, posting gains which pretty much eviscerated Friday's fear-induced declines.

Even though the austerity in Greece is a death-knell for the country and widespread rioting took place in the capitol of Athens and elsewhere, the globalist elements of the EU, ECB and IMF viewed the vote as a positive referendum on the overall health of the Euro system.

Realistically, Greece will never be able to repay its debts nor will it be able to accommodate all of the cuts to social welfare programs and government employment, but the parliament did what was most expeditious to secure financing from its feudal masters in Germany and keep the game going.

The scheme - from the view of the IMF, ECB and Angela Merkel - seems to be to keep Greece functioning as a neo-slave-state to keep the Euro from collapsing, and, thus far, it seems to be working. A disorderly default by the Greeks might just be the catalyst that destroys whatever unity is left in the EuroZone, an outcome the supra-governmental EU leaders will fight bitterly with truckloads of money (it doesn't matter how much, they'll just print more) and the current kind of kabuki theatre that is disguised as "austerity" for the free-spending Greeks.

Their fear is that Greece's demise could foment similar outcomes in Portugal, Ireland and elsewhere, particularly Spain and Italy, and the continental currency experiment of the Euro would come crashing down upon their collective heads. Problematic as it may be, the monetarists in Brussels are committed to spending whatever it takes to keep the EuroZone intact by relentless money printing and worry about the consequences of widespread poverty, inflation, social unrest and ultimately, a continent-wide depression, later. We wish them luck, mostly because they'll need it, as desperate as the situation has become.

Here in the States, President Obama submitted his 2013 budget to congress, where it was deemed by many (mostly Republicans seeking to unseat the president this fall) as dead on arrival. Obama's 3.8 Trillion monstrosity would reduce military outlays while hiking outlays to infrastructure projects and features higher taxes for the wealthy and a $1.33 trillion deficit, marking the fourth straight year that the federal budget deficit would top one trillion dollars, despite an Obama campaign promise from 2008 to cut the deficit in half by the end of his first term.

Investors shrugged off the details and went about their task of re-inflating the corporate sector, sending stock prices close to their highest levels of 2012, though volume on the NYSE was the lowest for a non-Holiday session in over a decade.

Oil closed above $100 per barrel, despite US gas consumption being historically weak and Apple (AAPL) closing above 500 per share for the first time in its history. Apple is currently the largest company in the world by market cap, surpassing oil giant ExxonMobil for the top spot.

The major indices followed their now-routine pattern of a gap-up open followed by a mid-morning decline and rally and a flat-lining finish.

Dow 12,874.04, +72.81 (0.57%)
NASDAQ 2,931.39, +27.51 (0.95%)
S&P 500 1,351.77, +9.13 (0.68%)
NYSE Composite 8,056.25, +64.22 (0.80%)
NASDAQ Volume 1,613,612,250
NYSE Volume 3,462,219,000
Combined NYSE & NASDAQ Advance - Decline: 4236-1411
Combined NYSE & NASDAQ New highs - New lows: 262-12 (par-tay!)
WTI crude oil: 100.91, +2.24
Gold: 1,724.90, -0.40
Silver: 33.72, +0.12

Market Pops on Bogus ESFS Euro Report; Apple Misses, Tanks

You've got to love this market.

Any little statement or rumor that European Union leaders might throw significant money at their pan-continental debt crisis sends stocks soaring into the stratosphere, and today was one for the record books.

An unusually quiet day, stocks had regained a foothold after Monday's sudden reversal. But, shortly after 3:00 pm EDT, the UK's Guardian reported that France and Germany had agreed to boost the Euro bailout fund - the ESFS - to EURO 2 Trillion, a significant rise, and one that might just help kick the debt can down the road a few months, or even years.

Shortly after the story broke, however, Dow Jones reported that the 2 Trillion Euro figure was actually "still under debate," so, who really knows? At least the market machines and mechanics got what they wanted, a nice 100-point spike in the Dow in about ten minutes time and an S&P close over 1224. Mission accomplished. Now, move along, folks, nothing to see here.

In a day (week, month, year) full of bogus reports, before the open, Bank of America (BAC) reported 3Q earnings of 57 cents per share, but, because of the new math, which includes such exotic flavors as fair value adjustments on structured liabilities and trading Debit Valuation Adjustments (DVA), according to our friends at Zero Hedge, who usually have the best and most-believable dirt, BofA actually had earnings of 0.00, otherwise known as ZERO, Zilch, Nada, Nothing.

Of course, when CNBC and the rest of the supine financial media report, bare-faced, that the nation's largest bank by deposits more than doubled the analyst estimates (0.21) for the quarter, it was off to the races, with somebody shocking BAC shares up 10% by day's end, a stunning 0.61 gain, to the imposing figure of 6.62. While it's technically a 10% gain, it's still rather silly, considering the accounting nonsense being roundly applauded by the criminal bankster elite, and hardly any comfort to those who bought BAC when it was 7, or 8 or even 12. Make no mistake, we've entered the Twilight Zone of financial accounting and there's no turning back.

Along those lines, the Giant Squid otherwise known as Goldman Sachs (GS), also reported before the bell, but it's results were almost believable, showing a loss of 84 cents per share, with losses spread across the company's proprietary trading division, to the tune of $2.5 billion. Ouch. The market's response to the trending data of a company heading decidedly south: a gain of 5.25 (5%) to 102.25 and the financials led all other sectors in the faux rally du jour.

Also before the bell, PPI was reported to be up 0.8% in September on expectations of a rise of only 0.2%, which just happened to be how much the core PPI was up for the month. Somebody obviously missed the memo from the Fed that inflation was transitory, or something along those lines. Inflation in the US is running at an annual rate well over 6%, something the mainstream media hopes you don't notice.

One company which may be adversely affected by the loss of its CEO - the truly brilliant Steve Jobs - is Apple, which announced today after the bell that the company had an outstanding quarter as usual, but, uh, oh, they missed the estimates of 7.39 per share by a bit, reporting earnings for the quarter of 7.05 per share and also came up about a billion dollars short on the revenue end.

As of this writing, Apple shares were trading at 394.13, -28.11 (-6.66%). Not a very pretty picture there.

So, to recap, Goldman Sachs reports a massive loss, Bank of America releases what amounts to a fraudulent earnings report, inflation is about ready for lift-off into hyper-inflation and the market gets a jolly from a questionable report on the size of the European bailout fund. All good fun, no?

With Apple's miss in the after-hours and another couple of big banks - Morgan Stanley (MS) and PNC Financial Services (PNC) - due to report tomorrow, somebody might want to take a closer look at the number of companies that have missed or merely met estimates this earnings season, and maybe add in those who just plain fudged the numbers. But, not to worry, Cheesecake Factory (CAKE) and Buffalo Wild Wings (BWLD) are also reporting tomorrow and should provide sufficient caloric excess to fuel another rally in the markets.

Wow! You cannot make this stuff up.

Dow 11,577.05, +180.05 (1.58%)
NASDAQ 2,657.43, +42.51 (1.63%)
S&P 500 1,225.38, +24.52 (2.04%)
NYSE Composite 7,341.73, +153.07 (2.13%)
NASDAQ Volume 1,988,896,750
NYSE Volume 5,669,232,500
Combined NYSE & NASDAQ Advance - Decline: 5211
Combined NYSE & NASDAQ New highs - New lows: 52-65 (Really? No kidding. extremely bearish)
WTI crude oil: 88.34, +1.96
Gold: 1,652.80, -23.80
Silver: 31.83, +0.01