There are signs everywhere that the Federal Reserve has taken an active role in the stock market, especially in the US, but probably abroad as well, in cahoots with their central bank partners, as stocks have recovered sharply over the past three days after being battered by fears stemming from the coronavirus global pandemic, or COVID-19.
Probably the most glaring evidence - outside of the Dow's near-500-point gain in the final 12 minutes of trading Thursday - is the ballooning of the Fed's balance sheet, which has grown by $507,323,000,000 ($507.323 billion) in just seven days, from March 18 to the 25th.
Being almost completely transparent, the Fed, in recent days has announced that they would purchase everything from municipal debt, to corporate debt, to exchange traded funds (ETFs) in the open market in order to "stabilize" the situation. There's one good reason why the Dow was up 1,351 points on a day that started with the announcement that more than three million Americans has lost their jobs in the past week, and it's because the Federal Reserve, with literally unlimited amounts of buying power, was actively in the market.
While this will come as a surprise to pretty much 90% of all Americans, central bank direct activity in equity markets has been an open secret in financial circles for at least the past decade. The Swiss National Bank (SNB) and Bank of Japan are major shareholders in many corporations, including Apple (AAPL) and many others. The BOJ has been buying ETFs in earnest since as early as 2012, when their balance sheet exploded from 150 trillion yen ($138 billion US) to 550 ($506 billion US). Today, the Bank of Japan owns stocks and bonds equal to the country's entire economic output, or 100% of GDP. In essence, the Bank of Japan owns the Japanese economy. It is the Japanese economy and a similar scenario is beginning to emerge in the United States, and likely in the European Union as well.
Other independent central banks in Australia, Canada, England, Brazil, and elsewhere are probably considering doing the same in their stock markets if they haven't already.
It's not as though central banks are complete foreigners to intervention in markets. They've completely distorted the capital markets for years, buying up agency (government) debt and mortgage-backed securities en masse before and after the Great Financial Crisis in 2007-09 to the point at which trillions of dollars in government bonds carry negative yields.
So, instead of just buying debt, why not stocks? Ask your broker. I'm sure he or she will have a ready answer after convulsing on the floor in either laughter or tears.
Elsewhere, treasury yields fell across the spectrum, the 10-year note checking in at 0.83%. Gold and silver have returned to being an afterthought in the futures market and largely unavailable in physical quantities. Gold is still testing recent multi-year highs, closing up $11.60 on Thursday to $1624.50 per ounce. Silver closed down slightly to $14.41 in the futures market. Meanwhile, dealers report widespread shortages amid massive demand for "everyman's gold."
Being that silver is so much less expensive than gold, it is available to anybody with a couple of sawbucks. Thus, it is THE prime target of central banks, as their greatest fear is to have a competing currency accepted by the middle and lower classes. It would kind of ruin their monopoly on currency. It's been going on for hundreds of years and isn't likely to change soon.
Oil was beaten down again on Thursday, with WTI crude closing out at $22.60 a barrel, down nearly two dollars from Wednesday's finishing price. Unleaded gasoline is cheap around the globe, the irony being, with so many coronavirus lockdowns or "stay at home" orders in place, gas is a bargain, but nobody can go anywhere.
At the Close, Thursday, March 26, 2020:
Dow Jones Industrial Average: 22,552.17, +1,351.62 (+6.38%)
NASDAQ: 7,797.54, +413.24 (+5.60%)
S&P 500: 2,630.07, +154.51 (+6.24%)
NYSE: 10,536.28, +574.89 (+5.77%)
Showing posts with label BOJ. Show all posts
Showing posts with label BOJ. Show all posts
Friday, March 27, 2020
Thursday, September 12, 2019
Global Banker Duplicity: Draghi Cuts ECB Overnight Rate to -0.50%
At Thursday's announcement, the ECB's Chief Governing Council (sounds impressive, doesn't it?) cut the bank’s overnight deposit rate, trimmed by 10 basis points, to −0.50%, meaning that commercial banks must effectively pay just a little bit more to the ECB to hold their excess cash balances overnight.
There were other policy moves, such as a restart to the ECB's Asset Purchase Program, otherwise known as QE, with an unlimited timeline. The bank will purchase assets at a rate of 20 billion euros per month, until they see inflation begin to tick up, so, essentially, forever, or, until the currency is completely worthless or eviscerated by the continuous destruction of capital by negative interest rates.
It would be easy to say that the central bankers don't know what they're doing, because all of the stimulus applied to economies around the world for the past ten years hasn't produced anything close to a desired result, either increased inflation (which isn't good, by the way), or rising GDP in developed nations.
What the ECB and other central banks like the BoJ and the US Federal Reserve are doing is choking down the currency in desperate, disparate attempts to conceal the rot within the system, which essentially imploded in 2008.
Nothing has been done at the micro level to induce business formation. It's all been macro level stuff, aiding governments and big corporations, which have a stranglehold on the most profitable franchises worldwide.
This is apparently good for asset prices in risky segments, such as stocks, but also for gold and silver, which have popped on the news, but will no doubt retreat.
The end game is a global depression, which some claim we've been in since 2008, but that's splitting hairs. The final blow comes when currencies backed by nothing are thrown out with the bathwater by populations tired of being taxed to death and dragged roundly their ears and noses with shifting central bank tricksterism.
Negative interest rates, if they prevail, will destroy all fiat currency. It's just math.
At the Close, Wednesday, September 11, 2019:
Dow Jones Industrial Average: 27,137.04, +227.64 (+0.85%)
NASDAQ: 8,169.68, +85.52 (+1.06%)
S&P 500: 3,000.93, +21.54 (+0.72%)
NYSE Composite: 13,082.41, +88.41 (+0.68%)
There were other policy moves, such as a restart to the ECB's Asset Purchase Program, otherwise known as QE, with an unlimited timeline. The bank will purchase assets at a rate of 20 billion euros per month, until they see inflation begin to tick up, so, essentially, forever, or, until the currency is completely worthless or eviscerated by the continuous destruction of capital by negative interest rates.
It would be easy to say that the central bankers don't know what they're doing, because all of the stimulus applied to economies around the world for the past ten years hasn't produced anything close to a desired result, either increased inflation (which isn't good, by the way), or rising GDP in developed nations.
What the ECB and other central banks like the BoJ and the US Federal Reserve are doing is choking down the currency in desperate, disparate attempts to conceal the rot within the system, which essentially imploded in 2008.
Nothing has been done at the micro level to induce business formation. It's all been macro level stuff, aiding governments and big corporations, which have a stranglehold on the most profitable franchises worldwide.
This is apparently good for asset prices in risky segments, such as stocks, but also for gold and silver, which have popped on the news, but will no doubt retreat.
The end game is a global depression, which some claim we've been in since 2008, but that's splitting hairs. The final blow comes when currencies backed by nothing are thrown out with the bathwater by populations tired of being taxed to death and dragged roundly their ears and noses with shifting central bank tricksterism.
Negative interest rates, if they prevail, will destroy all fiat currency. It's just math.
At the Close, Wednesday, September 11, 2019:
Dow Jones Industrial Average: 27,137.04, +227.64 (+0.85%)
NASDAQ: 8,169.68, +85.52 (+1.06%)
S&P 500: 3,000.93, +21.54 (+0.72%)
NYSE Composite: 13,082.41, +88.41 (+0.68%)
Monday, August 12, 2019
WEEKEND WRAP: Another Shaky Week for Stocks; Bond, Gold, Silver Rallies Extend
As the global ponzi turns, the week now left behind shares a trails of tears and cheers, sadness for equity holders, joyous celebrations in the bond pits as US rates re-approach the zero-bound (despite the Fed's reluctance).
While stocks bounced like a rubber ball on a string, the losses were limited by some mysterious dip-buying mid-week as news flow changed not just by the day, but seemingly by the hour.
At the same time, the bond market in the US was mimicking Japan and Europe, grinding yields lower, with the 10-year note closing out the week at 1.74%, which is lower than the 1,2,3,6-month and one-year yields, making the case for an already inverted yield curve. The 2-year continues to be resilient, though one has to wonder how much longer it can hold the narrow margin below the 10-year, which is currently a scant 11 basis points (1.63%).
Precious metals have also benefitted from global uncertainty, with gold hovering around $1500 and silver teasing the $17.00 mark. Both are significantly higher from lows spotted in late May. The ascent of the metals has been swift and without any major pullback. If the metals are in an overbought condition, they certainly aren't showing any signs of it. As usual, however, the persistence of central banks to keep "real money" on its heels is probably keeping PMs from going vertical. That story seems to have no end, except that a hyperbolic rise in gold and silver would signal the death of not just the US dollar, but probably all fiat currencies in use by every nation, developed or not. After fiat finds its proper value (ZERO), barter will follow. It's a natural progression. The central question, as has been for centuries, is, "what do you give for a live chicken?"
Though it may appear that the global economy is about to implode, it's useful to be reminded that the Great Financial Crisis (GFC) is well beyond its 10th anniversary, thanks to massive infusions of counterfeit fiat ladled out to the unwashed by the BOJ, FRS, BOE, SNB, PBOC, ECB. Spelling out the acronyms somehow yields negative interest rates and the death of money. Nobody knows when this will occur, but it will, and the effects will devastate many. Think billions of people, not just millions.
In the interim, as the world is roiled by international, geopolitical events, the wall of worry is being built upon the current crises (not in any particular order):
That's more than enough to keep traders up at night and on their collective toes during the days ahead.
Incidentally, all of this anguish has shielded the markets somewhat from a less-than-rousing second quarter earnings season, even as the corporates float through the third quarter. The Dow Transports re-entered correction territory two weeks past week and extended it last week with the worst showing of all the US indices, by far.
Recession is almost a certainly, though it needn't be particularly horrible for the US, since employment is still strong, despite weakening earnings in the large cap corporate sector. Since the US is a very big country, different areas will be affected in different ways. Areas of the country that have been growing (most of the South, Midwest and Pacific Northwest) will continue to do so, albeit at a slower pace. Those areas in decline (Northeast cities, California, rural enclaves) will see conditions worsen. Those areas in decline will continue to do so through good times and bad and some may be exacerbated by outflows of high income individuals due to SALT taxes. It's a big country, a panacea for speculators with long time horizons.
At the Close, Friday, August 9:
Dow Jones Industrial Average: 26,287.44, -90.76 (-0.34%)
NASDAQ: 7,959.14, -80.02 (-1.00%)
S&P 500: 2,918.65, -19.44 (-0.66%)
NYSE Composite: 12,748.42, -80.38 (-0.63%)
For the Week:
Dow Industrials: -197.57 (-0.75%)
Dow Jones Transports: -167.22 (-1.61%)
NASDAQ: -44.93 (-0.56%)
S&P 500: -13.40 (-0.46%)
NYSE Composite: -91.08 (-0.71%)
While stocks bounced like a rubber ball on a string, the losses were limited by some mysterious dip-buying mid-week as news flow changed not just by the day, but seemingly by the hour.
At the same time, the bond market in the US was mimicking Japan and Europe, grinding yields lower, with the 10-year note closing out the week at 1.74%, which is lower than the 1,2,3,6-month and one-year yields, making the case for an already inverted yield curve. The 2-year continues to be resilient, though one has to wonder how much longer it can hold the narrow margin below the 10-year, which is currently a scant 11 basis points (1.63%).
Precious metals have also benefitted from global uncertainty, with gold hovering around $1500 and silver teasing the $17.00 mark. Both are significantly higher from lows spotted in late May. The ascent of the metals has been swift and without any major pullback. If the metals are in an overbought condition, they certainly aren't showing any signs of it. As usual, however, the persistence of central banks to keep "real money" on its heels is probably keeping PMs from going vertical. That story seems to have no end, except that a hyperbolic rise in gold and silver would signal the death of not just the US dollar, but probably all fiat currencies in use by every nation, developed or not. After fiat finds its proper value (ZERO), barter will follow. It's a natural progression. The central question, as has been for centuries, is, "what do you give for a live chicken?"
Though it may appear that the global economy is about to implode, it's useful to be reminded that the Great Financial Crisis (GFC) is well beyond its 10th anniversary, thanks to massive infusions of counterfeit fiat ladled out to the unwashed by the BOJ, FRS, BOE, SNB, PBOC, ECB. Spelling out the acronyms somehow yields negative interest rates and the death of money. Nobody knows when this will occur, but it will, and the effects will devastate many. Think billions of people, not just millions.
In the interim, as the world is roiled by international, geopolitical events, the wall of worry is being built upon the current crises (not in any particular order):
- The Epstein "suicide"
- Honk Hong protests
- Brexit
- Trade War and tariffs
- Middle East tensions
- Mass Shootings, Gun Control Legislation, Red Flaw Laws (won't happen)
- 2020 presidential election hijinks
- Ongoing migrations (Africa to Europe, South America to North America, China to Africa)
That's more than enough to keep traders up at night and on their collective toes during the days ahead.
Incidentally, all of this anguish has shielded the markets somewhat from a less-than-rousing second quarter earnings season, even as the corporates float through the third quarter. The Dow Transports re-entered correction territory two weeks past week and extended it last week with the worst showing of all the US indices, by far.
Recession is almost a certainly, though it needn't be particularly horrible for the US, since employment is still strong, despite weakening earnings in the large cap corporate sector. Since the US is a very big country, different areas will be affected in different ways. Areas of the country that have been growing (most of the South, Midwest and Pacific Northwest) will continue to do so, albeit at a slower pace. Those areas in decline (Northeast cities, California, rural enclaves) will see conditions worsen. Those areas in decline will continue to do so through good times and bad and some may be exacerbated by outflows of high income individuals due to SALT taxes. It's a big country, a panacea for speculators with long time horizons.
At the Close, Friday, August 9:
Dow Jones Industrial Average: 26,287.44, -90.76 (-0.34%)
NASDAQ: 7,959.14, -80.02 (-1.00%)
S&P 500: 2,918.65, -19.44 (-0.66%)
NYSE Composite: 12,748.42, -80.38 (-0.63%)
For the Week:
Dow Industrials: -197.57 (-0.75%)
Dow Jones Transports: -167.22 (-1.61%)
NASDAQ: -44.93 (-0.56%)
S&P 500: -13.40 (-0.46%)
NYSE Composite: -91.08 (-0.71%)
Wednesday, January 9, 2019
Stocks Keep Rising, But Major Speed Bumps Are Dead Ahead
Bored yet?
Since bottoming out the day before Christmas (December 24), the major US indices have gained in eight of the last ten sessions, including today's smallish gains.
While going eight for ten to the upside certainly sounds impressive, there is a small problem. The NASDAQ. S&P 500, Dow Industrials, and NYSE Composite are all trading below their 50-and-200-day moving averages. What's more troubling is that those averages are inverted, with the 50 below the 200, as all of the charts show the so-called "death cross" occurring variously between late November and mid-December.
This is troubling to chartists because the rallies have produced some ill-placed optimism in the minds of some investors, mostly affecting those passive types with 401k, retirement, IRA and other "hands off" accounts.
So, while everybody is cheering the fantastic performance of stocks in the new year, there are major speed bumps dead ahead. Turning around inverted moving averages is the kind of heavy lifting for which the PPT was created and how the Fed came up with various forms of money creation, such as QE, QE2, Operation Twist, and other variants of magical fiat money.
Earnings season is about to kick into high gear next week, and expectations are not all that rosy, though, if one tracks home builders, like Lennar (LEN), which missed expectations but still managed a gain today of nearly eight percent. Of course, the stock is just off its 52-week low, so there's an outside chance that everybody, all at once decided it was too cheap to pass up.
So, the question is whether the PPT or the Fed or the Bank of Japan or the ECB, or all of them are of like mind and will buy with open arms every stock that looks like a sure loser over the next four to five weeks.
There's an old adage in the investing world, that posits, "don't fight the Fed." This time it appears to be for real and the Fed, from the speeches and off-the-cuff quotes by some of the regional presidents, is in a fighting mood.
Dow Jones Industrial Average January Scorecard:
At the Close, Wednesday, January 9, 2018:
Dow Jones Industrial Average: 23,879.12, +91.67 (+0.39%)
NASDAQ: 6,957.08, +60.08 (+0.87%)
S&P 500: 2,584.96, +10.55 (+0.41%)
NYSE Composite: 11,778.42, +62.19 (+0.53%)
Since bottoming out the day before Christmas (December 24), the major US indices have gained in eight of the last ten sessions, including today's smallish gains.
While going eight for ten to the upside certainly sounds impressive, there is a small problem. The NASDAQ. S&P 500, Dow Industrials, and NYSE Composite are all trading below their 50-and-200-day moving averages. What's more troubling is that those averages are inverted, with the 50 below the 200, as all of the charts show the so-called "death cross" occurring variously between late November and mid-December.
This is troubling to chartists because the rallies have produced some ill-placed optimism in the minds of some investors, mostly affecting those passive types with 401k, retirement, IRA and other "hands off" accounts.
So, while everybody is cheering the fantastic performance of stocks in the new year, there are major speed bumps dead ahead. Turning around inverted moving averages is the kind of heavy lifting for which the PPT was created and how the Fed came up with various forms of money creation, such as QE, QE2, Operation Twist, and other variants of magical fiat money.
Earnings season is about to kick into high gear next week, and expectations are not all that rosy, though, if one tracks home builders, like Lennar (LEN), which missed expectations but still managed a gain today of nearly eight percent. Of course, the stock is just off its 52-week low, so there's an outside chance that everybody, all at once decided it was too cheap to pass up.
So, the question is whether the PPT or the Fed or the Bank of Japan or the ECB, or all of them are of like mind and will buy with open arms every stock that looks like a sure loser over the next four to five weeks.
There's an old adage in the investing world, that posits, "don't fight the Fed." This time it appears to be for real and the Fed, from the speeches and off-the-cuff quotes by some of the regional presidents, is in a fighting mood.
Dow Jones Industrial Average January Scorecard:
| Date | Close | Gain/Loss | Cum. G/L |
| 1/2/19 | 23,346.24 | +18.78 | +18.78 |
| 1/3/19 | 22,686.22 | -660.02 | -641.24 |
| 1/4/19 | 23,433.16 | +746.94 | +105.70 |
| 1/7/19 | 23,531.35 | +98.19 | +203.89 |
| 1/8/19 | 23,787.45 | +256.10 | +459.99 |
| 1/9/19 | 23,879.12 | +91.67 | +551.66 |
At the Close, Wednesday, January 9, 2018:
Dow Jones Industrial Average: 23,879.12, +91.67 (+0.39%)
NASDAQ: 6,957.08, +60.08 (+0.87%)
S&P 500: 2,584.96, +10.55 (+0.41%)
NYSE Composite: 11,778.42, +62.19 (+0.53%)
Thursday, February 15, 2018
Despite Relatively Hot CPI, Stocks Rip Higher
What's that old saying?
It's something like... "don't wish too hard, you may get what you want."
Well, it applies to the Fed, ECB, BoJ and other central banks, which have been screaming for higher inflation ever since the Great Financial Crisis of 2008-09.
On Wednesday, they got some of the "good" news. The CPI for January came in with a gain of 0.54 month-over-month, the biggest increase since January of 2017. Being that both January of this and last year were the high points for CPI, it might be a statistical anomaly, though that thought seemingly hasn't crossed the minds of any economic reporters.
So, once stock players digested the news, which was released an hour prior to the opening bell, futures nosedived, stocks opened deep in the red, but, within an hour, it was off to the races, despite interest rates - especially the 10-year-note - rising sharply.
The 10-year-note popped over 2.9% yield, while gold and silver - traditional inflation hedges - soared throughout the day.
Seems nobody really knows what will happen, though many profess to have deep inner knowledge of how economics actually works.
Maybe we're all just being played for fools.
Pull my finger...
Dow Jones Industrial Average February Scorecard:
At the Close, Wednesday, February 14, 2018:
Dow Jones Industrial Average: 24,893.49, +253.04 (+1.03%)
NASDAQ: 7,143.62, +130.10 (+1.86%)
S&P 500: 2,698.63, +35.69 (+1.34%)
NYSE Composite: 12,746.72, +172.35 (+1.37%)
It's something like... "don't wish too hard, you may get what you want."
Well, it applies to the Fed, ECB, BoJ and other central banks, which have been screaming for higher inflation ever since the Great Financial Crisis of 2008-09.
On Wednesday, they got some of the "good" news. The CPI for January came in with a gain of 0.54 month-over-month, the biggest increase since January of 2017. Being that both January of this and last year were the high points for CPI, it might be a statistical anomaly, though that thought seemingly hasn't crossed the minds of any economic reporters.
Higher consumer prices in January, however, didn’t substantially alter the overall picture on inflation. The increase in the CPI over the past 12 months remained unchanged at 2.1%.
After stripping out volatile gas and food, the more closely followed core rate of inflation rose 0.3% last month. The 12-month rate of core inflation was also flat at 1.8%.
So, once stock players digested the news, which was released an hour prior to the opening bell, futures nosedived, stocks opened deep in the red, but, within an hour, it was off to the races, despite interest rates - especially the 10-year-note - rising sharply.
The 10-year-note popped over 2.9% yield, while gold and silver - traditional inflation hedges - soared throughout the day.
Seems nobody really knows what will happen, though many profess to have deep inner knowledge of how economics actually works.
Maybe we're all just being played for fools.
Pull my finger...
Dow Jones Industrial Average February Scorecard:
| Date | Close | Gain/Loss | Cum. G/L |
| 2/1/18 | 26,186.71 | +37.32 | +37.32 |
| 2/2/18 | 25,520.96 | -665.75 | -628.43 |
| 2/5/18 | 24,345.75 | -1,175.21 | -1,803.64 |
| 2/6/18 | 24,912.77 | +567.02 | -1,236.62 |
| 2/7/18 | 24,893.35 | -19.42 | -1,256.04 |
| 2/8/18 | 23,860.46 | -1,032.89 | -2288.93 |
| 2/9/18 | 24,190.90 | +330.44 | -1958.49 |
| 2/12/18 | 24,601.27 | +410.37 | -1548.12 |
| 2/13/18 | 24,640.45 | +39.18 | -1508.94 |
| 2/14/18 | 24,893.49 | +253.04 | -1255.90 |
At the Close, Wednesday, February 14, 2018:
Dow Jones Industrial Average: 24,893.49, +253.04 (+1.03%)
NASDAQ: 7,143.62, +130.10 (+1.86%)
S&P 500: 2,698.63, +35.69 (+1.34%)
NYSE Composite: 12,746.72, +172.35 (+1.37%)
Saturday, August 19, 2017
Stocks Close Week Trending Lower; Trouble Brewing
After Thursday's all-around rout, traders entered Friday's session with apprehension and doubt, pondering whether the recovery facade had finally been broken, exposing the wickedly overpriced nature of global equites, and especially US stocks.
After a sluggish start to trading, stocks eventually turned positive midday, but failed to keep an even keel as the major indices fell in unison for the second consecutive day, ending the week on an ominous note.
While Friday's losses were nothing compared to those from the day prior, they were, nevertheless, a continuation of the downdraft since last week's North Korea scare sent stocks well below their prior highs and, in the case of the S&P 500 and NASDAQ, below their 50-day moving averages.
In addition to the uniformity of the declines, stocks spent their second straight week on the downside for only the fourth time since the election of Donald Trump as president.
The Dow Jones Industrial Average, which had been the leader in the gains for the year, finished just above its 50-dma, the signs of slowing clearly evident.
With earnings reports from the second quarter winding down, analysts and traders will be focused on economic data, which has been - for years - less than stellar. Also of concern is the Federal Reserve's stance on tightening credit and unwinding their massive balance sheet, at the same time congress and the president will be engaging in budget and debt ceiling wrangling, making for a September to remember.
Still not an absolute trend - stocks are generally down only 2-3% the past two weeks - there will eventually come a time when the long bull run since March, 2009 will come to an end, and it figures not be be pretty. Anyone with short-term views will be taken aback at any sign of decay in the financial system, though, for those old enough and wizened enough to understand past history and general economics, a general pullback will be nothing more than the ordinariness of the business cycle, this one interrupted by the machinations and experimental policies of the global central bank cartel, led the the Fed, the ECB, the Bank of Japan (BOJ), and the People's Bank of China (PBOC), which together have stuffed more than $16 trillion onto their collective balance sheets.
Unwinding this massive spending spree without collateral damage will be a monumental task, even for those empowered to oversee the world's financial order.
Fireworks are coming. Stock up on adult beverages and snacks.
At the Close, Friday, August 18, 2017:
Dow: 21,674.51, -76.22 (-0.35%)
NASDAQ: 6,216.53, -5.39 (-0.09%)
S&P 500 2,425.55, -4.46 (-0.18%)
NYSE Composite: 11,699.83, -12.88 (-0.11%)
For the Week:
Dow: -183.81 (-0.84%)
NASDAQ: -40.03 (-0.64%)
S&P 500: -15.77 (-0.65%)
NYSE Composite: -63.38 (-0.54%)
After a sluggish start to trading, stocks eventually turned positive midday, but failed to keep an even keel as the major indices fell in unison for the second consecutive day, ending the week on an ominous note.
While Friday's losses were nothing compared to those from the day prior, they were, nevertheless, a continuation of the downdraft since last week's North Korea scare sent stocks well below their prior highs and, in the case of the S&P 500 and NASDAQ, below their 50-day moving averages.
In addition to the uniformity of the declines, stocks spent their second straight week on the downside for only the fourth time since the election of Donald Trump as president.
The Dow Jones Industrial Average, which had been the leader in the gains for the year, finished just above its 50-dma, the signs of slowing clearly evident.
With earnings reports from the second quarter winding down, analysts and traders will be focused on economic data, which has been - for years - less than stellar. Also of concern is the Federal Reserve's stance on tightening credit and unwinding their massive balance sheet, at the same time congress and the president will be engaging in budget and debt ceiling wrangling, making for a September to remember.
Still not an absolute trend - stocks are generally down only 2-3% the past two weeks - there will eventually come a time when the long bull run since March, 2009 will come to an end, and it figures not be be pretty. Anyone with short-term views will be taken aback at any sign of decay in the financial system, though, for those old enough and wizened enough to understand past history and general economics, a general pullback will be nothing more than the ordinariness of the business cycle, this one interrupted by the machinations and experimental policies of the global central bank cartel, led the the Fed, the ECB, the Bank of Japan (BOJ), and the People's Bank of China (PBOC), which together have stuffed more than $16 trillion onto their collective balance sheets.
Unwinding this massive spending spree without collateral damage will be a monumental task, even for those empowered to oversee the world's financial order.
Fireworks are coming. Stock up on adult beverages and snacks.
At the Close, Friday, August 18, 2017:
Dow: 21,674.51, -76.22 (-0.35%)
NASDAQ: 6,216.53, -5.39 (-0.09%)
S&P 500 2,425.55, -4.46 (-0.18%)
NYSE Composite: 11,699.83, -12.88 (-0.11%)
For the Week:
Dow: -183.81 (-0.84%)
NASDAQ: -40.03 (-0.64%)
S&P 500: -15.77 (-0.65%)
NYSE Composite: -63.38 (-0.54%)
Monday, July 24, 2017
For US Markets, It's Splits-ville Again
Another day, another session punctuated by divergent indices.
The NASDAQ goes up; the Dow goes down, or vice versa. The S&P 500 and NYSE Composite seem to go their own ways, more often than not, separate. All of this reeks of manipulation, selectivity, goal-seeking, and just about anything other than rational investing.
Upon examination, the stock market is nothing more than pieces of paper representing shares in company X or Y or Z, being traded for other pieces of paper known as yen, dollars, euros or pesos. It's the ultimate paper chase, based entirely on faith and foolery of grand design by the world's central bankers. It's a confidence game being played at the highest levels of finance, a dangerous precedent for the entire planet.
Unless the public detaches from the fraud, it will continue. The unique phenomenon at work in today's financial arenas is commonly known to psychiatrists as normalcy bias. It is the belief that everything seems to be working all right, so the urge to change is minimized, which is precisely the condition present in the debt-infested governments, businesses, and households everywhere.
The ultimate fear is that confidence is lost in the fiat system. After eight long years of propping up governments, businesses, and households with freshly-printed-or-minted cash, confidence is still durable, thanks to normalcy bias.
But, there are canaries in the coal mine, so to speak. These are burgeoning, non-repayable government debt, underfunded pensions (especially public union pensions), slack demand, disinflation, demographics, and the undeniable eventuality of recession, either in the US, Europe, or globally.
Fighting these trends with some degree of success has been the role of the central banks, but they are running out of viable options to keep global finance operating while also quelling local discontent, which is growing rapidly.
Money Daily does not pretend to know who is buying stocks and/or causing the variations in the major indices, but it is apparent that some entity other than brokerages are buying and it is well known that the Bank of Japan (BOJ), Swiss National Bank (SNB), and European Central Bank (ECB) have been and will continue to be outright buyers of equities.
When these entities become sellers, there will be no bottom to the markets.
Caveat Emptor.
At the Close, 7/24/17:
Dow: 21,513.17, -66.90 (-0.31%)
NASDAQ: 6,410.81, +23.05 (0.36%)
S&P 500: 2,469.91, -2.63 (-0.11%)
NYSE Composite: 11,904.71, -19.89 (-0.17%)
The NASDAQ goes up; the Dow goes down, or vice versa. The S&P 500 and NYSE Composite seem to go their own ways, more often than not, separate. All of this reeks of manipulation, selectivity, goal-seeking, and just about anything other than rational investing.
Upon examination, the stock market is nothing more than pieces of paper representing shares in company X or Y or Z, being traded for other pieces of paper known as yen, dollars, euros or pesos. It's the ultimate paper chase, based entirely on faith and foolery of grand design by the world's central bankers. It's a confidence game being played at the highest levels of finance, a dangerous precedent for the entire planet.
Unless the public detaches from the fraud, it will continue. The unique phenomenon at work in today's financial arenas is commonly known to psychiatrists as normalcy bias. It is the belief that everything seems to be working all right, so the urge to change is minimized, which is precisely the condition present in the debt-infested governments, businesses, and households everywhere.
The ultimate fear is that confidence is lost in the fiat system. After eight long years of propping up governments, businesses, and households with freshly-printed-or-minted cash, confidence is still durable, thanks to normalcy bias.
But, there are canaries in the coal mine, so to speak. These are burgeoning, non-repayable government debt, underfunded pensions (especially public union pensions), slack demand, disinflation, demographics, and the undeniable eventuality of recession, either in the US, Europe, or globally.
Fighting these trends with some degree of success has been the role of the central banks, but they are running out of viable options to keep global finance operating while also quelling local discontent, which is growing rapidly.
Money Daily does not pretend to know who is buying stocks and/or causing the variations in the major indices, but it is apparent that some entity other than brokerages are buying and it is well known that the Bank of Japan (BOJ), Swiss National Bank (SNB), and European Central Bank (ECB) have been and will continue to be outright buyers of equities.
When these entities become sellers, there will be no bottom to the markets.
Caveat Emptor.
At the Close, 7/24/17:
Dow: 21,513.17, -66.90 (-0.31%)
NASDAQ: 6,410.81, +23.05 (0.36%)
S&P 500: 2,469.91, -2.63 (-0.11%)
NYSE Composite: 11,904.71, -19.89 (-0.17%)
Saturday, July 8, 2017
Stocks Finish Week With Gains, Remain Range-Bound
If one were to view Friday's market action in a vacuum, without context, one would think everything is just peachy in Wall Street wonderland. The NFP jobs report for June was solid and the major indices put up strong gains to close out the week.
But, nothing exists in isolation.
Taking a little bit broader view, over the shortened, four-day week, all that Friday's gains managed to do was life all the major indices from red to green for the week, with the exception of the NYSE Composite, which finished just nine points underwater, but, not to worry, nobody pays attention to the "comp" anymore, even though it is the most diverse, broadest of the majors.
Fraud, manipulation, massive central bank intervention?
Yes, sure, of course. Since central banks have been the primary drivers of the eight year recovery since the GFC, why would anybody believe they have stopped their high-stakes involvement. Lowering interest rates - even to negative - didn't work. Massive injections of funny fiat money didn't work. Talking about how the labor market and the general economy was doing so great (it isn't) didn't work, so, why not resort to outright purchasing of equities in a vain attempt to create a "wealth effect?"
Of course, the Fed will never admit to such activity, but Switzerland (SNB), Japan (BOJ), and the European Central Bank (ECB) have all openly been buying stocks for the past few years, at least, and probably longer.
Therefore, the entire week of trading was a nonsensical, uneventful kabuki play, designed to give the impression that all is well and there's no reason to sell... anything... even though many did. As they say in the current newsspeak nomenclature, a major league nothing-burger.
Balderdash. You're being culled, cuckolded, marinated, stuffed, and baked by people who control your baseless currency when you could be using that same valueless "money" to purchase goods, food, machinery of trade, gold, silver (currently on sale, as it has been for four years running), land, land and more land, some with actual buildings erected.
But, no. Americans (not to the exclusion of Canadiens, Japanese, and Euroland dwellers) instead purchase garbage college educations for garbage jobs, cell phones, 70-inch TVs, overpriced cars (mainly on leases), and run up enormous amounts of credit card and other debt for baseball tickets and extraordinary "experiences."
With the US government $19.965 trillion in debt, something along the lines of 10,000 seniors retiring every day, underfunded pensions galore, and monstrous debt and unfunded liabilities under-and-overhanging nearly every developed nation...
Good luck with that.
At the Close, 7/7/17:
Dow: 21,414.34, +94.30 (0.44%)
NASDAQ: 6,153.08, +63.61 (1.04%)
S&P 500: 2,425.18, +15.43 (0.64%)
NYSE Composite: 11,752.98, +50.55 (0.43%)
For the week:
Dow: +64.71 (0.30%)
NASDAQ: +12.66 (0.21%)
S&P 500: +1.77 (0.07%)
NYSE Composite: -8.72 (-0.07)
But, nothing exists in isolation.
Taking a little bit broader view, over the shortened, four-day week, all that Friday's gains managed to do was life all the major indices from red to green for the week, with the exception of the NYSE Composite, which finished just nine points underwater, but, not to worry, nobody pays attention to the "comp" anymore, even though it is the most diverse, broadest of the majors.
Fraud, manipulation, massive central bank intervention?
Yes, sure, of course. Since central banks have been the primary drivers of the eight year recovery since the GFC, why would anybody believe they have stopped their high-stakes involvement. Lowering interest rates - even to negative - didn't work. Massive injections of funny fiat money didn't work. Talking about how the labor market and the general economy was doing so great (it isn't) didn't work, so, why not resort to outright purchasing of equities in a vain attempt to create a "wealth effect?"
Of course, the Fed will never admit to such activity, but Switzerland (SNB), Japan (BOJ), and the European Central Bank (ECB) have all openly been buying stocks for the past few years, at least, and probably longer.
Therefore, the entire week of trading was a nonsensical, uneventful kabuki play, designed to give the impression that all is well and there's no reason to sell... anything... even though many did. As they say in the current newsspeak nomenclature, a major league nothing-burger.
Balderdash. You're being culled, cuckolded, marinated, stuffed, and baked by people who control your baseless currency when you could be using that same valueless "money" to purchase goods, food, machinery of trade, gold, silver (currently on sale, as it has been for four years running), land, land and more land, some with actual buildings erected.
But, no. Americans (not to the exclusion of Canadiens, Japanese, and Euroland dwellers) instead purchase garbage college educations for garbage jobs, cell phones, 70-inch TVs, overpriced cars (mainly on leases), and run up enormous amounts of credit card and other debt for baseball tickets and extraordinary "experiences."
With the US government $19.965 trillion in debt, something along the lines of 10,000 seniors retiring every day, underfunded pensions galore, and monstrous debt and unfunded liabilities under-and-overhanging nearly every developed nation...
Good luck with that.
At the Close, 7/7/17:
Dow: 21,414.34, +94.30 (0.44%)
NASDAQ: 6,153.08, +63.61 (1.04%)
S&P 500: 2,425.18, +15.43 (0.64%)
NYSE Composite: 11,752.98, +50.55 (0.43%)
For the week:
Dow: +64.71 (0.30%)
NASDAQ: +12.66 (0.21%)
S&P 500: +1.77 (0.07%)
NYSE Composite: -8.72 (-0.07)
Wednesday, May 31, 2017
Stocks Gain, Bond Yields Continue Lower in Fed-inspired Environment
Opening the week with across-the-board losses, the major indices took a little off the top Tuesday, the penultimate trading day for the month of May.
The losses were limited in scope, however, as speculators seem reluctant to forego gains in a bull market that has shown few signs of slowing.
With optimism on Wall Street approaching a state irrational exuberance, the issue becomes one of not when the market will reverse course, but at what speed. A sharp downturn could expose many hedgers and options players, though the Fed and their cohorts at the ECB, BOJ, and the PPT would likely quash any rampant selling by putting an artificial floor on the market, a tactic they've employed over the last eight years of fake recovery.
Unlimited upside is the overarching theme of the decade, despite the Fed's promise to raise interest rates four times in 2017. Despite the threat of tighter money, the 10-year treasury note closed out the day at 2.22% and shows no sign of reacting negatively to any Fed jawboning nor actual policy directives.
While the bull market remains intact at eight years and running, the bond rally is at 30 years. Liquidity and solvency have been the main catalysts since 2009, with central banks coordinating bond (and equity) purchases in order to prevent a complete collapse of the global financial system, which almost fell apart in 2008-09.
Complete control of all markets being the ultimate goal of central banks, the money-printers are close to achieving just that. Even if economic data remains sluggish, weak, or troubling, the Fed and friends will be at the rescue. Stocks have been unable to extend any losing streak to frightful lengths, thanks to central bank intervention, fearing losing control.
Whatever the outcome of the June FOMC meeting, it's almost a slam-dunk that stocks will gain. It's simply the way the market is currently composed.
At the Close, 5/30/17:
Dow: 21,029.47, -50.81 (-0.24%)
NASDAQ: 6,203.19, -7.00 (-0.11%)
S&P 500: 2,412.91, -2.91 (-0.12%)
NYSE Composite: 11,601.31, -30.56 (-0.26%)
The losses were limited in scope, however, as speculators seem reluctant to forego gains in a bull market that has shown few signs of slowing.
With optimism on Wall Street approaching a state irrational exuberance, the issue becomes one of not when the market will reverse course, but at what speed. A sharp downturn could expose many hedgers and options players, though the Fed and their cohorts at the ECB, BOJ, and the PPT would likely quash any rampant selling by putting an artificial floor on the market, a tactic they've employed over the last eight years of fake recovery.
Unlimited upside is the overarching theme of the decade, despite the Fed's promise to raise interest rates four times in 2017. Despite the threat of tighter money, the 10-year treasury note closed out the day at 2.22% and shows no sign of reacting negatively to any Fed jawboning nor actual policy directives.
While the bull market remains intact at eight years and running, the bond rally is at 30 years. Liquidity and solvency have been the main catalysts since 2009, with central banks coordinating bond (and equity) purchases in order to prevent a complete collapse of the global financial system, which almost fell apart in 2008-09.
Complete control of all markets being the ultimate goal of central banks, the money-printers are close to achieving just that. Even if economic data remains sluggish, weak, or troubling, the Fed and friends will be at the rescue. Stocks have been unable to extend any losing streak to frightful lengths, thanks to central bank intervention, fearing losing control.
Whatever the outcome of the June FOMC meeting, it's almost a slam-dunk that stocks will gain. It's simply the way the market is currently composed.
At the Close, 5/30/17:
Dow: 21,029.47, -50.81 (-0.24%)
NASDAQ: 6,203.19, -7.00 (-0.11%)
S&P 500: 2,412.91, -2.91 (-0.12%)
NYSE Composite: 11,601.31, -30.56 (-0.26%)
Saturday, April 22, 2017
Stocks Make Third Weekly Gain In Last Seven; Government Shutdown Looms; Central Banks On Buying Spree
Stocks fell softly to close out the week, but ended with the third weekly gain in the past seven, the major averages having hit something of a speed bump of late what with the wranglings and do-nothings in Washington DC, heightened military potentialities in the Mideast and Pacific Rim (North Korea), sloppy economic data, the passing of the income tax filing deadline, and the non-stop media parade of fake news mostly designed to undermine the presidency of one Mr. Donald J. Trump.
While the overall tone of the market is nothing to get aroused over, the upcoming week could bring some more sobering developments as congress returns from a two-week vacation (a vacation from doing nothing) coinciding with Spring Break. One wishes the congresspeople well enough, but actually doing something to benefit the American public for a change would be welcome. While President Trump is trying his level best, the Democrats and their trainers in the media complex are simply playing in an alternate universe and at times coming close to treasonous actions by working against the best interests of the Republic and focusing solely on what they consider the primary interest of their party.
As the coming week progresses, the level of rancor and obtuseness could reach a fever pitch as the government faces a deadline on April 28 for some kind of budget agreement, or, more likely, another in a too long series of continuing resolutions. Both sides of the debate over what to overspend upon are already well-suited in their peculiar ideological jumpsuits, the Democrats desperate to hold onto the last vestiges of failed socialism (called progressive by the liberal left and ultra-left media), the Republicans - in congress at least - looking to cement their dicey majorities in both houses.
At the outside looking in is the current administration, bent on keeping at least some of the promises Mr. Trump made during the campaign, though reneging against the American people has become so common in the post-Vietnam era that it's almost laughable that anyone would believe a word coming from the lips of any politician in Washington.
Thus, a government shutdown looms a real possibility, though more likely a dramatic, last-gasp, late-into-the-night-made-for-TV deal is probably what's driving the phony debate. As the politicians pose and posture, many American citizens are becoming keenly aware that federal government budgets are a laughable charade, being that deficits continue on and beyond the horizon, the national debt already within $16 billion of $20 trillion, a condition only humans could have created and something only a government with all the fiscal discipline of a 12-year-old with dad's credit card could continue.
At the end of the debate, shutdown, or partial farce, the world will continue spinning, Americans will be the bag-holders of the century and the central bank ponzi will continue.
Holders of stocks should worry the least, since the Bank of Japan (BOJ) and the European Central Bank (ECB) "invested" over ONE TRILLION US DOLLARS in global financial instruments in the first four months of the year, a record amount. Certainly, the Fed and Bank of England - not to mention the Swiss National Bank - are quietly doing their part to keep the liquidity flowing in the background, using all manner of underhanded tactics to undermine every national currency available.
The policy of central bank asset-grabbing is unprecedented in financial history, though rather a common theme since the meltdown of 2008-09.
In the end, 98% of the world's population will own almost none of the assets, the central banks having snatched up anything that hasn't already been bolted down, and they're sure to use wrenches and sledgehammers to take whatever remains as well.
Though the times are trying, central bankers continue buying.
At the Close, Friday, April 21, 2017:
Dow: 20,547.76 -30.95 (-0.15%)
NASDAQ: 5,910.52, -6.26 (-0.11%)
S&P 500: 2,348.69, +-7.15 (-0.30%)
NYSE Composite: 11,389.13, -37.78 (-0.33%)
For the week:
Dow: +94.51 (0.46%)
NASDAQ: +105.37 (1.82%)
S&P 500: +19.74 (0.85%)
NYSE Composite: +65.60 (0.57%)
While the overall tone of the market is nothing to get aroused over, the upcoming week could bring some more sobering developments as congress returns from a two-week vacation (a vacation from doing nothing) coinciding with Spring Break. One wishes the congresspeople well enough, but actually doing something to benefit the American public for a change would be welcome. While President Trump is trying his level best, the Democrats and their trainers in the media complex are simply playing in an alternate universe and at times coming close to treasonous actions by working against the best interests of the Republic and focusing solely on what they consider the primary interest of their party.
As the coming week progresses, the level of rancor and obtuseness could reach a fever pitch as the government faces a deadline on April 28 for some kind of budget agreement, or, more likely, another in a too long series of continuing resolutions. Both sides of the debate over what to overspend upon are already well-suited in their peculiar ideological jumpsuits, the Democrats desperate to hold onto the last vestiges of failed socialism (called progressive by the liberal left and ultra-left media), the Republicans - in congress at least - looking to cement their dicey majorities in both houses.
At the outside looking in is the current administration, bent on keeping at least some of the promises Mr. Trump made during the campaign, though reneging against the American people has become so common in the post-Vietnam era that it's almost laughable that anyone would believe a word coming from the lips of any politician in Washington.
Thus, a government shutdown looms a real possibility, though more likely a dramatic, last-gasp, late-into-the-night-made-for-TV deal is probably what's driving the phony debate. As the politicians pose and posture, many American citizens are becoming keenly aware that federal government budgets are a laughable charade, being that deficits continue on and beyond the horizon, the national debt already within $16 billion of $20 trillion, a condition only humans could have created and something only a government with all the fiscal discipline of a 12-year-old with dad's credit card could continue.
At the end of the debate, shutdown, or partial farce, the world will continue spinning, Americans will be the bag-holders of the century and the central bank ponzi will continue.
Holders of stocks should worry the least, since the Bank of Japan (BOJ) and the European Central Bank (ECB) "invested" over ONE TRILLION US DOLLARS in global financial instruments in the first four months of the year, a record amount. Certainly, the Fed and Bank of England - not to mention the Swiss National Bank - are quietly doing their part to keep the liquidity flowing in the background, using all manner of underhanded tactics to undermine every national currency available.
The policy of central bank asset-grabbing is unprecedented in financial history, though rather a common theme since the meltdown of 2008-09.
In the end, 98% of the world's population will own almost none of the assets, the central banks having snatched up anything that hasn't already been bolted down, and they're sure to use wrenches and sledgehammers to take whatever remains as well.
Though the times are trying, central bankers continue buying.
At the Close, Friday, April 21, 2017:
Dow: 20,547.76 -30.95 (-0.15%)
NASDAQ: 5,910.52, -6.26 (-0.11%)
S&P 500: 2,348.69, +-7.15 (-0.30%)
NYSE Composite: 11,389.13, -37.78 (-0.33%)
For the week:
Dow: +94.51 (0.46%)
NASDAQ: +105.37 (1.82%)
S&P 500: +19.74 (0.85%)
NYSE Composite: +65.60 (0.57%)
Friday, February 10, 2017
Bubble Superfecta: Dow, NASDAQ, S&P 500, NYSE Composite All Close At New Records
As the week comes to a stunning close, it's official, every market in America is officially in deep into bubble territory.
Consider that the major indices all closed at all-time highs today and that the Dow Jones Industrial Average is up a whopping 2200 points since election day, November 8, 2016. That amounts to a gain of just over 12% in three months. At that rate of ascent, 22,000 on the Dow should be a no-brainer by the end of 2017.
Nothing other than stupidity, other people's money, greed, and momentum were needed to foment one of the most rapid rises in the history of the Dow. The other indices have surely been along for the ride; even the broad measure of the entire NYSE Composite cracked to a record close today.
Not to suggest that a reversal is imminent (been that way for 6 years at least), but for some perspective, let's examine where these markets were at the depths of the Great Financial Crisis (GFC), on March 9, 2009.
Dow: 6,547.05
NASDAQ: 1,268.64
S&P 500: 676.53
NYSE Composite: 4,226.31
In the span of eight years, during what has ostensibly been the weakest recovery after a recession since the Great Depression, the Dow and S&P have more than tripled, the NASDAQ has more than quadrupled, and the poor old NYSE Comp. is just short of tripling.
So, if you missed it you missed it, but there still may be time to get in. Nobody knows where this is going to end, but we can all thank Ben Bernanke and Janet Yellen for oodles of free cash injections worldwide (QE), zero interest rate policy (ZIRP) and the most reckless economic policies the world has ever witnessed.
It's still ongoing, though. The ECB and BOJ are still pumping money into their markets, and, unless you missed it, none other than the Swiss National Bank holds more than $64 billion in US equities.
Who said these central bankers don't know what they're doing?
Enjoy the weekend!
At the Close, Friday, February 10, 2017:
Dow: 20,269.37, +96.97 (0.48%)
NASDAQ: 5,734.13, +18.95 (0.33%)
S&P 500: 2,316.10, +8.23 (0.36%)
NYSE Composite: 11,377.72, +50.04 (0.44%)
For the Week:
Dow: +197.91 (0.99%)
NASDAQ: +67.36 (1.19%)
S&P 500: +18.68 (0.81%)
NYSE Composite: +50.04 (0.44%)
Consider that the major indices all closed at all-time highs today and that the Dow Jones Industrial Average is up a whopping 2200 points since election day, November 8, 2016. That amounts to a gain of just over 12% in three months. At that rate of ascent, 22,000 on the Dow should be a no-brainer by the end of 2017.
Nothing other than stupidity, other people's money, greed, and momentum were needed to foment one of the most rapid rises in the history of the Dow. The other indices have surely been along for the ride; even the broad measure of the entire NYSE Composite cracked to a record close today.
Not to suggest that a reversal is imminent (been that way for 6 years at least), but for some perspective, let's examine where these markets were at the depths of the Great Financial Crisis (GFC), on March 9, 2009.
Dow: 6,547.05
NASDAQ: 1,268.64
S&P 500: 676.53
NYSE Composite: 4,226.31
In the span of eight years, during what has ostensibly been the weakest recovery after a recession since the Great Depression, the Dow and S&P have more than tripled, the NASDAQ has more than quadrupled, and the poor old NYSE Comp. is just short of tripling.
So, if you missed it you missed it, but there still may be time to get in. Nobody knows where this is going to end, but we can all thank Ben Bernanke and Janet Yellen for oodles of free cash injections worldwide (QE), zero interest rate policy (ZIRP) and the most reckless economic policies the world has ever witnessed.
It's still ongoing, though. The ECB and BOJ are still pumping money into their markets, and, unless you missed it, none other than the Swiss National Bank holds more than $64 billion in US equities.
Who said these central bankers don't know what they're doing?
Enjoy the weekend!
At the Close, Friday, February 10, 2017:
Dow: 20,269.37, +96.97 (0.48%)
NASDAQ: 5,734.13, +18.95 (0.33%)
S&P 500: 2,316.10, +8.23 (0.36%)
NYSE Composite: 11,377.72, +50.04 (0.44%)
For the Week:
Dow: +197.91 (0.99%)
NASDAQ: +67.36 (1.19%)
S&P 500: +18.68 (0.81%)
NYSE Composite: +50.04 (0.44%)
Monday, August 1, 2016
Tough Times For People Are Beginning To Appear
See-saw trading marked the first day of August, traditionally one of the quietest times for traders, so excuse your author for not offering a great deal of commentary as the "dog days" wear on through the hot month.
Stocks were up and down without direction. Japan's fiscal stimulus, largely expected to consist of some form of "helicopter money" (i.e., central bank largess via government spending and/or handouts), and, while there were some measures designed to prop up the poor and stimulate spending, it's more likely that - like everything else the BOJ has attempted the past 25 years - the plan will backfire because Japanese people are more concerned with squirreling away cash for rainy days than spending to keep the government promise of prosperity and growth.
It's the same all over the world. Governments and central banks have themselves painted into a not-so-agreeable corner, flanked by negative interest rates on one side, stagnant growth prospects on another, and a phalanx of QE, ficsal irresponsibility, crony capitalism, global income insecurity, and political instability dropping from the ceiling and oozing up through cracks in the floor.
While the political and business hoi poloi continue preaching the narrative of rosy economic successes, the average people have had enough of being lied to, cajoled and insulted by appeals by the financial authorities to their better interests, which, in truth are in nobody's good interest.
A couple of possible scenarios might emerge from the continuing diddling by the Fed and their crony central banker kin. One is that extreme lawlessness reigns, as laws are multiplied beyond the system's ability to prosecute them, or, political forces morph into ugly totalitarianism.
A good bet might be a hedge between the two, as both are already emerging in various forms, everywhere from dictatorships like the one evolving in Turkey, right down to the tin-horn generals at local levels who attempt to enforce zoning and municipal codes on wary citizens.
If there appears to be unease in every neighborhood, it's because below a calm surface is a boiling pot of anger, resentment, fear, and distrust.
Dow Jones Industrial Average
18,404.51, -27.73 (-0.15%)
NASDAQ
5,184.20, +22.06 (0.43%)
S&P 500
2,170.84, -2.76 (-0.13%)
NYSE Composite
10,730.20, -55.31 (-0.51%)
Stocks were up and down without direction. Japan's fiscal stimulus, largely expected to consist of some form of "helicopter money" (i.e., central bank largess via government spending and/or handouts), and, while there were some measures designed to prop up the poor and stimulate spending, it's more likely that - like everything else the BOJ has attempted the past 25 years - the plan will backfire because Japanese people are more concerned with squirreling away cash for rainy days than spending to keep the government promise of prosperity and growth.
It's the same all over the world. Governments and central banks have themselves painted into a not-so-agreeable corner, flanked by negative interest rates on one side, stagnant growth prospects on another, and a phalanx of QE, ficsal irresponsibility, crony capitalism, global income insecurity, and political instability dropping from the ceiling and oozing up through cracks in the floor.
While the political and business hoi poloi continue preaching the narrative of rosy economic successes, the average people have had enough of being lied to, cajoled and insulted by appeals by the financial authorities to their better interests, which, in truth are in nobody's good interest.
A couple of possible scenarios might emerge from the continuing diddling by the Fed and their crony central banker kin. One is that extreme lawlessness reigns, as laws are multiplied beyond the system's ability to prosecute them, or, political forces morph into ugly totalitarianism.
A good bet might be a hedge between the two, as both are already emerging in various forms, everywhere from dictatorships like the one evolving in Turkey, right down to the tin-horn generals at local levels who attempt to enforce zoning and municipal codes on wary citizens.
If there appears to be unease in every neighborhood, it's because below a calm surface is a boiling pot of anger, resentment, fear, and distrust.
Dow Jones Industrial Average
18,404.51, -27.73 (-0.15%)
NASDAQ
5,184.20, +22.06 (0.43%)
S&P 500
2,170.84, -2.76 (-0.13%)
NYSE Composite
10,730.20, -55.31 (-0.51%)
Thursday, July 14, 2016
Dow, S&P Post New Highs Again, But, Who's Doing The Buying?
In a market that more often resembles a three-ring circus than an amalgamation of the best corporate entities vying for favoritism among investors via increased earnings, revenue and expectations, the recent melt-up in US equities has more than just a few analysts scratching their quickly-balding heads.
It's widely known that equity mutual fund outflows have been more or less continuous for the better part of the past four months, a trend that doesn't seem to be abating, despite the recent runaway rally.
So, with mutuals (institutional investors) out of the picture - and they're a huge part of the landscape - and individuals mostly too scared to tread too deeply into the Wall Street morass since the devastation of the 2008 washout, there aren't many places from which the money to buy up all these loose assets can come, except, of course, if you're the operator of a central bank, such as the Bank of Japan, the ECB or the almighty Fed.
For verification of the central bank buying conspiracy theory (now fact), we turn to the erudite and educated Zero Hedge, which puts the matter to rest in no uncertain terms in his recent post, "Mystery Of Surging Stocks Solved—-It’s The Central Banks, Stupid!"
The Hedge cites Citi's Matt King, who publishes a must-see chart of rolling central bank asset purchases, and there for all the world to see are egregiously large buys by Japan and the ECB.
Yep! Those shifty Asians and super-smart Europeans are buying up US equities at valuations measured at a median rate of 24X. Good for them! When they awaken from their Keynesian stupor somebody must announce to them - they being economists, not investors - that the goal is to buy low and sell high, not the other way around.
Their rude awakening will coincide with the complete financial and societal implosion of their economies and their sovereignty, which, in the case of Europe, has been questionable for at least a couple of decades, and, for Japan, is only a matter of time before demographics and deflation tear the country to shreds.
What the world is witnessing (or not, depending upon how many people are playing Pokemon Go at present) is the beginning of the final phase of complete totalitarian financialization by central banks and their appointed henchmen, which will result in hemorrhaged debt defaults by individuals, corporations, and eventually (but maybe initially) governments.
Unlike people and companies, governments have a unique advantage in that they can run deficits and debt in piles as high as the moon without recourse for the most part, until, that is, the general public and business people have enough of higher taxes, worsening living conditions and runaway inflation.
Central banks are even better off, being the enabler of all debt and fiat folly via their ability to print endless scads of fiat money literally out of thin air.
Both groups, the money-makers and the politicians, are parasites, and they are killing the host, that being the good-will and capital of citizens and businesses, burying them in debt that will never be repaid.
Hope for a debt jubilee has reached new heights with the latest round of stupidity, but it is far from over.
The shackles which bind the citizenry and businesses to debt and drudgery, taxes and regulations, will tighten before they are broken.
New all-time highs are great when people and funds are doing the buying. That's a sign of a growing, robust economy. When it's central banks doing the heavy lifting, it reeks of desperation and failure.
Enjoy it while it lasts.
-- Fearless Rick
New Highs! Get 'em while you can!
Dow Jones Industrial Average
18,506.41, +134.29 (0.73%)
NASDAQ
5,034.06, +28.33 (0.57%)
S&P 500
2,163.75, +11.32 (0.53%)
NYSE Composite
10,786.63, +52.43 (0.49%)
It's widely known that equity mutual fund outflows have been more or less continuous for the better part of the past four months, a trend that doesn't seem to be abating, despite the recent runaway rally.
So, with mutuals (institutional investors) out of the picture - and they're a huge part of the landscape - and individuals mostly too scared to tread too deeply into the Wall Street morass since the devastation of the 2008 washout, there aren't many places from which the money to buy up all these loose assets can come, except, of course, if you're the operator of a central bank, such as the Bank of Japan, the ECB or the almighty Fed.
For verification of the central bank buying conspiracy theory (now fact), we turn to the erudite and educated Zero Hedge, which puts the matter to rest in no uncertain terms in his recent post, "Mystery Of Surging Stocks Solved—-It’s The Central Banks, Stupid!"
The Hedge cites Citi's Matt King, who publishes a must-see chart of rolling central bank asset purchases, and there for all the world to see are egregiously large buys by Japan and the ECB.
Yep! Those shifty Asians and super-smart Europeans are buying up US equities at valuations measured at a median rate of 24X. Good for them! When they awaken from their Keynesian stupor somebody must announce to them - they being economists, not investors - that the goal is to buy low and sell high, not the other way around.
Their rude awakening will coincide with the complete financial and societal implosion of their economies and their sovereignty, which, in the case of Europe, has been questionable for at least a couple of decades, and, for Japan, is only a matter of time before demographics and deflation tear the country to shreds.
What the world is witnessing (or not, depending upon how many people are playing Pokemon Go at present) is the beginning of the final phase of complete totalitarian financialization by central banks and their appointed henchmen, which will result in hemorrhaged debt defaults by individuals, corporations, and eventually (but maybe initially) governments.
Unlike people and companies, governments have a unique advantage in that they can run deficits and debt in piles as high as the moon without recourse for the most part, until, that is, the general public and business people have enough of higher taxes, worsening living conditions and runaway inflation.
Central banks are even better off, being the enabler of all debt and fiat folly via their ability to print endless scads of fiat money literally out of thin air.
Both groups, the money-makers and the politicians, are parasites, and they are killing the host, that being the good-will and capital of citizens and businesses, burying them in debt that will never be repaid.
Hope for a debt jubilee has reached new heights with the latest round of stupidity, but it is far from over.
The shackles which bind the citizenry and businesses to debt and drudgery, taxes and regulations, will tighten before they are broken.
New all-time highs are great when people and funds are doing the buying. That's a sign of a growing, robust economy. When it's central banks doing the heavy lifting, it reeks of desperation and failure.
Enjoy it while it lasts.
-- Fearless Rick
New Highs! Get 'em while you can!
Dow Jones Industrial Average
18,506.41, +134.29 (0.73%)
NASDAQ
5,034.06, +28.33 (0.57%)
S&P 500
2,163.75, +11.32 (0.53%)
NYSE Composite
10,786.63, +52.43 (0.49%)
Thursday, May 19, 2016
End The Fed; Hawkish Tone Sends Dow Below Key Level; Gold, Silver Mercilessly Hammered
While it may seem nothing but a triviality, Money Daily has been following the most recent renge on the Dow Jones Industrial Average (DJIA) as it bounced its way between 17,500 and 18,000 since mid-March.
Today, the most widely-watched equity index in the world crossed below the lower end of that range, exclusively due to hawkish jawboning from various Federal Reserve operatives, who have spent the better part of the last seven years engaged in radical interest rate and money-creation policies, putting the entire global finacial system at risk.
To the uninformed masses - those 90-plus percent of the adult population who doesn't care or isn't bright enough to comprehend the ramifications of a global central banking system - life goes on. A debt-ridden, over-taxed population in the developed world plays giddily along as private banking interests push them one way or another. A few have escaped to off-the-grid lifestyles, some have prospered in the fiat money world of counterfeit currencies, but most are forced to take what is given, or rather, keep the small scraps the banks and governments leave on the floor after their orgy of inflation, deflation, false promises, fake data points and market mayhem and manipulation.
Thanks to the Fed and their fellow central bankers in Japan, Europe, and now China, the global population is left without price discovery mechanisms which make $30,000 cars with seven-year payment plans sound "affordable", homes which have skyrocketed in value due to artificially-low mortgage rates, fuel prices that are anything but transparent and/or stable and a general climate that continues to be counter to general principles of economy and thrift.
The Fed (and their central banker brethren) is pernicious, malevolent, deceitful, dishonest, greedy and carnivorous. They seek nothing but complete dominance without competition, a monopoly on the medium of exchange. Governments are more than willing to accept their bribery and thievery in order to retain feigned positions of power, selling out their constituents with nary a care toward the ultimate consequences of their actions.
Mandated to enact policies that promote full employment and stable prices, the Fed openly does neither, or, at best, adheres to their promises only as occasion allows, in fact promoting an inflation rate of two percent per year, which is anything but stable for prices.
So intent is the Fed on controlling every last aspect of financial activity, that they have undermined the best open markets of the world, in bonds, stocks, commodities and anything else they can get their greedy hands upon.
Markets no longer move on supply and demand or fundamental forces, but are solely and completely tethered to proclamations and idle talk of agents of the Federal Reserve, the Bank of Japan (BOJ), the People's Bank of China (PBOC), and the European Central Bank (ECB).
It's all rigged, all the time and readers are urged to do their own research into financial matters. Unless and until the fraud of banks and the agents of the Fed and other central banks are brought entirely to light there will be no financial freedom, only crony capitalism, fascist rhetoric and insane, unbalanced economic polices.
May the Farce Be With You:
S&P 500: 2,040.04, -7.59 (0.37%)
Dow: 17,435.40, -91.22 (0.52%)
NASDAQ: 4,712.53, -26.59 (0.56%)
Crude Oil 48.68 -0.20% Gold 1,255.70 -1.47% EUR/USD 1.1203 -0.12% 10-Yr Bond 1.85 -1.86% Corn 390.00 -2.38% Copper 2.07 -0.63% Silver 16.51 -3.63% Natural Gas 2.04 +1.75% Russell 2000 1,094.78 -0.74% VIX 16.33 +2.38% BATS 1000 20,677.17 0.00% GBP/USD 1.4609 +0.09% USD/JPY 109.9550 -0.20%
Today, the most widely-watched equity index in the world crossed below the lower end of that range, exclusively due to hawkish jawboning from various Federal Reserve operatives, who have spent the better part of the last seven years engaged in radical interest rate and money-creation policies, putting the entire global finacial system at risk.
To the uninformed masses - those 90-plus percent of the adult population who doesn't care or isn't bright enough to comprehend the ramifications of a global central banking system - life goes on. A debt-ridden, over-taxed population in the developed world plays giddily along as private banking interests push them one way or another. A few have escaped to off-the-grid lifestyles, some have prospered in the fiat money world of counterfeit currencies, but most are forced to take what is given, or rather, keep the small scraps the banks and governments leave on the floor after their orgy of inflation, deflation, false promises, fake data points and market mayhem and manipulation.
Thanks to the Fed and their fellow central bankers in Japan, Europe, and now China, the global population is left without price discovery mechanisms which make $30,000 cars with seven-year payment plans sound "affordable", homes which have skyrocketed in value due to artificially-low mortgage rates, fuel prices that are anything but transparent and/or stable and a general climate that continues to be counter to general principles of economy and thrift.
The Fed (and their central banker brethren) is pernicious, malevolent, deceitful, dishonest, greedy and carnivorous. They seek nothing but complete dominance without competition, a monopoly on the medium of exchange. Governments are more than willing to accept their bribery and thievery in order to retain feigned positions of power, selling out their constituents with nary a care toward the ultimate consequences of their actions.
Mandated to enact policies that promote full employment and stable prices, the Fed openly does neither, or, at best, adheres to their promises only as occasion allows, in fact promoting an inflation rate of two percent per year, which is anything but stable for prices.
So intent is the Fed on controlling every last aspect of financial activity, that they have undermined the best open markets of the world, in bonds, stocks, commodities and anything else they can get their greedy hands upon.
Markets no longer move on supply and demand or fundamental forces, but are solely and completely tethered to proclamations and idle talk of agents of the Federal Reserve, the Bank of Japan (BOJ), the People's Bank of China (PBOC), and the European Central Bank (ECB).
It's all rigged, all the time and readers are urged to do their own research into financial matters. Unless and until the fraud of banks and the agents of the Fed and other central banks are brought entirely to light there will be no financial freedom, only crony capitalism, fascist rhetoric and insane, unbalanced economic polices.
May the Farce Be With You:
S&P 500: 2,040.04, -7.59 (0.37%)
Dow: 17,435.40, -91.22 (0.52%)
NASDAQ: 4,712.53, -26.59 (0.56%)
Crude Oil 48.68 -0.20% Gold 1,255.70 -1.47% EUR/USD 1.1203 -0.12% 10-Yr Bond 1.85 -1.86% Corn 390.00 -2.38% Copper 2.07 -0.63% Silver 16.51 -3.63% Natural Gas 2.04 +1.75% Russell 2000 1,094.78 -0.74% VIX 16.33 +2.38% BATS 1000 20,677.17 0.00% GBP/USD 1.4609 +0.09% USD/JPY 109.9550 -0.20%
Friday, May 13, 2016
Friday The 13th Sell-Off Nearly Breaks Through Downside Range On Dow Industrials
Yesterday, Money Daily extolled the virtues of ignoring intra-day movement on the major indices and pointed out that the last time the Dow Jones Industrial Average (DJIA) closed below the magic mark at 17,500, was nearly two months ago, on March 18 (17,481.89).
The waterfall decline on Dow stocks Friday put an exclamation mark on that post, as stocks fell to within a whisper of the bottom end of the tight range with 18,000 as the top and 17,500 as the bottom.
Friday's trading also assured that US indices would end the week in the red for the third straight week and fourth time in the past seven, suggesting the five closes above 18,000 in mid-April were aberrations rather than normative market behavior.
Thus, despite a completely phony report from the US Census that saw sales by U.S. retailers leap 1.3% in April, marking the biggest month-over-month gain in a year, the exodus from stocks continued unabated. While the indices have regained all of their losses from January and early February, institutional money has been selling all along, leaving the market largely in the hands of small investors and... please be seated, because this is a shocker... central banks.
It's widely understood that the Bank of Japan, that country's central bank, is heavily invested in its own stock market, propping up prices on the Nikkei, apparently to no avail, since the benchmark index is down sharply this year, and, unlike its counterpart in the US, has not rallied back to glory.
The Nikkei made a triple top last summer with peak closes in the 20,860 range. On Friday, the Nikkei closed at 16,412.21 and is down sharply on the year (it closed out 2015 at 19,033). Make no mistake, off its highs from June through August of last year, the Nikkei has fallen into bear market territory, even though the Bank of Japan has been furiously buying shares in the largest companies, as explained in this article by none other than the Wall Street Journal.
It was reported just the other day that the Swiss National Bank was wisely using some of its money to buy shares of Apple (AAPL) as Carl Icahn was liquidating his holdings in the company and the stock was slumping to two-year lows.
Is there any wonder that people have little faith in their governments and are rapidly losing faith in other institutions, especially those which conjure money out of thin air. When central banks are actively bidding in markets of all sorts - from precious metals to oil to stocks and bonds - how can there be any rational approach to investing or any kind of reasonable price discovery. Everything is subject to the inane whims of people in ivory towers who think they know more than anybody else about how the world should operate. In truth, they are destroying the system that spewed out their jobs and paychecks.
When people finally awaken to the massive misallocation of capital and enormous malinvestments by the issuers of paper money it's going to be too late. Central banks cannot - at least not in a rational world - buy up shares of everything in order to keep the global economy humming along while at the same time issuing critical mountains of debt in the form of digital deposits and bonds (which they are, in effect, also buying from themselves).
There will be a crash, a day of reckoning, probably multiple ones, when the cnetral bank global ponzi scheme is finally exposed, and that could happen at any time.
If the stock markets begin breaking down, it should be seen as a sign that the final chapter of extraordinary central bank policy which began with the financial crisis in 2008, is underway. The endgame is likely to resemble 50-70% declines in major stock indices, 10-year interest rates at zero of less (already there in some countries) and massive disruptions of businesses, bank closures, or worse, outright confiscation of deposits by the banks holding trillions of dollars, yen, yuan, euros and pounds.
This is not fiction, but the reality of the past eight years of nightmare economics spawned by the Federal Reserve and their brethren central bankers.
But, as it has been since the collapse of the global economy in 2008, when central banks have endless supplies of fictional fiat to spend, crashes like Friday's can be aborted, as was this one, right at 3:00 pm, with just an hour left in the trading day. Agents of the Fed stepped in at the most dangerous moment to hold the line at 17,500.
André Maginot would be impressed.
The only problem is that this kind of madness cannot go on forever without incredibly dangerous distortions and serious, lasting repercussions.
For the week:
DOW: -205.31 (-1.16%)
S&P 500: -10.53 (-0.51%)
NASDAQ: -18.48 (-0.39)
Friday's Fall:
S&P 500: 2,046.61, -17.50 (0.85%)
Dow: 17,535.32, -185.18 (1.05%)
NASDAQ: 4,717.68, -19.66 (0.41%)
Crude Oil 46.32 -0.81% Gold 1,274.80 +0.28% EUR/USD 1.1308 -0.58% 10-Yr Bond 1.70 -2.96% Corn 390.50 +0.39% Copper 2.08 +0.14% Silver 17.16 +0.30% Natural Gas 2.10 -2.55% Russell 2000 1,102.44 -0.56% VIX 15.04 +4.37% BATS 1000 20,677.17 0.00% GBP/USD 1.4359 -0.61% USD/JPY 108.6400 -0.40%
The waterfall decline on Dow stocks Friday put an exclamation mark on that post, as stocks fell to within a whisper of the bottom end of the tight range with 18,000 as the top and 17,500 as the bottom.
Friday's trading also assured that US indices would end the week in the red for the third straight week and fourth time in the past seven, suggesting the five closes above 18,000 in mid-April were aberrations rather than normative market behavior.
Thus, despite a completely phony report from the US Census that saw sales by U.S. retailers leap 1.3% in April, marking the biggest month-over-month gain in a year, the exodus from stocks continued unabated. While the indices have regained all of their losses from January and early February, institutional money has been selling all along, leaving the market largely in the hands of small investors and... please be seated, because this is a shocker... central banks.
It's widely understood that the Bank of Japan, that country's central bank, is heavily invested in its own stock market, propping up prices on the Nikkei, apparently to no avail, since the benchmark index is down sharply this year, and, unlike its counterpart in the US, has not rallied back to glory.
The Nikkei made a triple top last summer with peak closes in the 20,860 range. On Friday, the Nikkei closed at 16,412.21 and is down sharply on the year (it closed out 2015 at 19,033). Make no mistake, off its highs from June through August of last year, the Nikkei has fallen into bear market territory, even though the Bank of Japan has been furiously buying shares in the largest companies, as explained in this article by none other than the Wall Street Journal.
It was reported just the other day that the Swiss National Bank was wisely using some of its money to buy shares of Apple (AAPL) as Carl Icahn was liquidating his holdings in the company and the stock was slumping to two-year lows.
Is there any wonder that people have little faith in their governments and are rapidly losing faith in other institutions, especially those which conjure money out of thin air. When central banks are actively bidding in markets of all sorts - from precious metals to oil to stocks and bonds - how can there be any rational approach to investing or any kind of reasonable price discovery. Everything is subject to the inane whims of people in ivory towers who think they know more than anybody else about how the world should operate. In truth, they are destroying the system that spewed out their jobs and paychecks.
When people finally awaken to the massive misallocation of capital and enormous malinvestments by the issuers of paper money it's going to be too late. Central banks cannot - at least not in a rational world - buy up shares of everything in order to keep the global economy humming along while at the same time issuing critical mountains of debt in the form of digital deposits and bonds (which they are, in effect, also buying from themselves).
There will be a crash, a day of reckoning, probably multiple ones, when the cnetral bank global ponzi scheme is finally exposed, and that could happen at any time.
If the stock markets begin breaking down, it should be seen as a sign that the final chapter of extraordinary central bank policy which began with the financial crisis in 2008, is underway. The endgame is likely to resemble 50-70% declines in major stock indices, 10-year interest rates at zero of less (already there in some countries) and massive disruptions of businesses, bank closures, or worse, outright confiscation of deposits by the banks holding trillions of dollars, yen, yuan, euros and pounds.
This is not fiction, but the reality of the past eight years of nightmare economics spawned by the Federal Reserve and their brethren central bankers.
But, as it has been since the collapse of the global economy in 2008, when central banks have endless supplies of fictional fiat to spend, crashes like Friday's can be aborted, as was this one, right at 3:00 pm, with just an hour left in the trading day. Agents of the Fed stepped in at the most dangerous moment to hold the line at 17,500.
André Maginot would be impressed.
The only problem is that this kind of madness cannot go on forever without incredibly dangerous distortions and serious, lasting repercussions.
For the week:
DOW: -205.31 (-1.16%)
S&P 500: -10.53 (-0.51%)
NASDAQ: -18.48 (-0.39)
Friday's Fall:
S&P 500: 2,046.61, -17.50 (0.85%)
Dow: 17,535.32, -185.18 (1.05%)
NASDAQ: 4,717.68, -19.66 (0.41%)
Crude Oil 46.32 -0.81% Gold 1,274.80 +0.28% EUR/USD 1.1308 -0.58% 10-Yr Bond 1.70 -2.96% Corn 390.50 +0.39% Copper 2.08 +0.14% Silver 17.16 +0.30% Natural Gas 2.10 -2.55% Russell 2000 1,102.44 -0.56% VIX 15.04 +4.37% BATS 1000 20,677.17 0.00% GBP/USD 1.4359 -0.61% USD/JPY 108.6400 -0.40%
Sunday, April 24, 2016
Stocks Finish Week In Volatile, Split Fashion; FOMC, BOJ To Drive Markets Last Week Of April
Nothing monumental was happening in the markets on Friday, but the mood was decidedly risk-averse heading into the weekend. The week as a whole mirrored Friday, with the Dow and S&P showing small gains while the NASDAQ took on water.
For the week:
DOW: +106.29 (0.59%)
S&P 500: +10.85 (0.52%)
NASDAQ: -31.99 (0.65%)
The week was among the lesser moves of the year, though it became apparent that the markets were testing the upper limits of their recent range. While the Dow managed to finish just above the 18,000 mark, the S&P remained at a critical inflection point at 2091-2092, almost by magic. Moving above the 2100 mark - which the SPX accomplished mid-week - may prove to be short-lived if investors take recent earnings weakness seriously, though that position is still debatable, considering the virtually unlimited power of the Fed and associated central banks in Japan (BOJ) and Europe (ECB) to print, cajole and promote inflationary, free-money policies.
Central banks cannot, however, remain the only vital force in the markets forever. More and more voices are beginning to openly question the intelligence of placing blind faith in the currency-controllers and are advising that a return to "normalcy" is something the Fed cannot and probably will not approach in the near term. Among them David Stockman, Jeff Gundlach, Bill Gross have been the latest to scoff at the Fed's financially-repressive control policies.
Notwithstanding the naysayers, the Fed, BOJ and ECB continue to stay the course. While Mario Draghi of the ECB didn't move markets one iota with his stand pat position this week, the Fed will likely accomplish little with their FOMC meeting this week (Tuesday and Wednesday), though the BOJ is considering lowering its key interest rate further into the red. The BOJ's next two-day policy review ends on April 28 (Thursday).
The coming week will be focused on central bank nothingness rather than fundamentals, which is what the complainers have been howling about for some time.
Expect their voices to become more numerous and louder if the global economy continues to sputter and stall.
FRIDAY'S FUMBLING:
S&P 500: 2,091.58, +0.10 (0.00%)
Dow: 18,003.75, +21.23 (0.12%)
NASDAQ: 4,906.23, -39.66 (0.80%)
Crude Oil 43.71 +1.23% Gold 1,234.90 -1.23% EUR/USD 1.1228 -0.55% 10-Yr Bond 1.89 +0.96% Corn 378.25 -2.95% Copper 2.27 +0.93% Silver 16.97 -0.73% Natural Gas 2.26 +2.13% Russell 2000 1,144.24 +0.75% VIX 13.34 -4.37% BATS 1000 20,682.61 0.00% GBP/USD 1.4413 +0.63% USD/JPY 111.6330 +2.02%
For the week:
DOW: +106.29 (0.59%)
S&P 500: +10.85 (0.52%)
NASDAQ: -31.99 (0.65%)
The week was among the lesser moves of the year, though it became apparent that the markets were testing the upper limits of their recent range. While the Dow managed to finish just above the 18,000 mark, the S&P remained at a critical inflection point at 2091-2092, almost by magic. Moving above the 2100 mark - which the SPX accomplished mid-week - may prove to be short-lived if investors take recent earnings weakness seriously, though that position is still debatable, considering the virtually unlimited power of the Fed and associated central banks in Japan (BOJ) and Europe (ECB) to print, cajole and promote inflationary, free-money policies.
Central banks cannot, however, remain the only vital force in the markets forever. More and more voices are beginning to openly question the intelligence of placing blind faith in the currency-controllers and are advising that a return to "normalcy" is something the Fed cannot and probably will not approach in the near term. Among them David Stockman, Jeff Gundlach, Bill Gross have been the latest to scoff at the Fed's financially-repressive control policies.
Notwithstanding the naysayers, the Fed, BOJ and ECB continue to stay the course. While Mario Draghi of the ECB didn't move markets one iota with his stand pat position this week, the Fed will likely accomplish little with their FOMC meeting this week (Tuesday and Wednesday), though the BOJ is considering lowering its key interest rate further into the red. The BOJ's next two-day policy review ends on April 28 (Thursday).
The coming week will be focused on central bank nothingness rather than fundamentals, which is what the complainers have been howling about for some time.
Expect their voices to become more numerous and louder if the global economy continues to sputter and stall.
FRIDAY'S FUMBLING:
S&P 500: 2,091.58, +0.10 (0.00%)
Dow: 18,003.75, +21.23 (0.12%)
NASDAQ: 4,906.23, -39.66 (0.80%)
Crude Oil 43.71 +1.23% Gold 1,234.90 -1.23% EUR/USD 1.1228 -0.55% 10-Yr Bond 1.89 +0.96% Corn 378.25 -2.95% Copper 2.27 +0.93% Silver 16.97 -0.73% Natural Gas 2.26 +2.13% Russell 2000 1,144.24 +0.75% VIX 13.34 -4.37% BATS 1000 20,682.61 0.00% GBP/USD 1.4413 +0.63% USD/JPY 111.6330 +2.02%
Sunday, March 20, 2016
Coordinated Central Bank Easing Leads to Higher Stock Prices
First came the BOJ.
Then the ECB.
And, just this past Wednesday, the Fed chimed into the global monetary easing chorus with no increase in the federal funds rate, and a solid statement that the FOMC would likely only increase rates twice in 2016, for a paltry 1/2 percent increase.
Such a move would put the rate at 0.75 to one percent by December of this year, or, put another way, just a touch lower than the Greenspan put of the early 2000s.
Those unfamiliar with recent history would not understand how Greenspan's easy rate policy led to various mal-investments, not the least of which were in the housing market, which led to a boom and then a bust and the 2008 financial crisis.
So, what the central bankers are telling us in a unified voice, is that they'll gladly take the risk of another massive financial implosion in order to keep the global fiat currency regime intact.
So far, they're doing quite well. There've been no mass protests, riots, or other noticeable social uprisings in the dominant economies of the developed nations, and, while detractors will proclaim that this regime of low (and even negative) interest rates cannot continue without devastating consequences, the world keeps spinning, the rich get richer and the rest of us carry on in quiet, medieval fashion, mumbling vaguely about unfairness and impropriety.
Elsewhere, stock owners are popping the champagne corks and drinking lustily from the font of the Fed, the ECB and the Bank of Japan, especially in the USA, which just completed one of the quickest and most violent market reversals in recorded history, bringing the Dow Jones Industrials and S&P 500 back to breakeven for the year.
In just over a month's time, the Dow has rallied more than 2,000 points off the mid-February lows. The S&P took off from 1810.10 to close at 2049.58 on Friday, an impressive, 13.23% move. Who said timing wasn't everything?
Buy and hold will be the order of the day, it seems, as long as the central bankers retain complete control over every market, everywhere. When that changes, nobody knows, though many still try. The piper, it appears, will be paid at a later date, likely of the central banks' choosing.
For an overview of the central bank monetary madness, and possible preview of what's ahead, the Telegraph offers keen insight with:
Central banks are already doing the unthinkable -- you just don't know it.
For the week:
DOW: +388.99 (2.26%)
S&P 500: +27.39 (1.35%)
NASDAQ: +47.18 (0.99%)
Friday's Fun Fed Figures:
S&P 500: 2,049.58, +8.99 (0.44%)
Dow: 17,602.30, +120.81 (0.69%)
NASDAQ: 4,795.65, +20.66 (0.43%)
Crude Oil 41.13 -1.27% Gold 1,256.00 -0.71% EUR/USD 1.1268 -0.02% 10-Yr Bond 1.8710 -1.68% Corn 366.50 -0.54% Copper 2.29 -0.28% Silver 15.82 -1.30% Natural Gas 1.89 -2.22% Russell 2000 1,101.67 +0.95% VIX 14.02 -2.91% BATS 1000 20,677.17 0.00% GBP/USD 1.4471 -0.05% USD/JPY 111.5525 0.00%
Then the ECB.
And, just this past Wednesday, the Fed chimed into the global monetary easing chorus with no increase in the federal funds rate, and a solid statement that the FOMC would likely only increase rates twice in 2016, for a paltry 1/2 percent increase.
Such a move would put the rate at 0.75 to one percent by December of this year, or, put another way, just a touch lower than the Greenspan put of the early 2000s.
Those unfamiliar with recent history would not understand how Greenspan's easy rate policy led to various mal-investments, not the least of which were in the housing market, which led to a boom and then a bust and the 2008 financial crisis.
So, what the central bankers are telling us in a unified voice, is that they'll gladly take the risk of another massive financial implosion in order to keep the global fiat currency regime intact.
So far, they're doing quite well. There've been no mass protests, riots, or other noticeable social uprisings in the dominant economies of the developed nations, and, while detractors will proclaim that this regime of low (and even negative) interest rates cannot continue without devastating consequences, the world keeps spinning, the rich get richer and the rest of us carry on in quiet, medieval fashion, mumbling vaguely about unfairness and impropriety.
Elsewhere, stock owners are popping the champagne corks and drinking lustily from the font of the Fed, the ECB and the Bank of Japan, especially in the USA, which just completed one of the quickest and most violent market reversals in recorded history, bringing the Dow Jones Industrials and S&P 500 back to breakeven for the year.
In just over a month's time, the Dow has rallied more than 2,000 points off the mid-February lows. The S&P took off from 1810.10 to close at 2049.58 on Friday, an impressive, 13.23% move. Who said timing wasn't everything?
Buy and hold will be the order of the day, it seems, as long as the central bankers retain complete control over every market, everywhere. When that changes, nobody knows, though many still try. The piper, it appears, will be paid at a later date, likely of the central banks' choosing.
For an overview of the central bank monetary madness, and possible preview of what's ahead, the Telegraph offers keen insight with:
Central banks are already doing the unthinkable -- you just don't know it.
For the week:
DOW: +388.99 (2.26%)
S&P 500: +27.39 (1.35%)
NASDAQ: +47.18 (0.99%)
Friday's Fun Fed Figures:
S&P 500: 2,049.58, +8.99 (0.44%)
Dow: 17,602.30, +120.81 (0.69%)
NASDAQ: 4,795.65, +20.66 (0.43%)
Crude Oil 41.13 -1.27% Gold 1,256.00 -0.71% EUR/USD 1.1268 -0.02% 10-Yr Bond 1.8710 -1.68% Corn 366.50 -0.54% Copper 2.29 -0.28% Silver 15.82 -1.30% Natural Gas 1.89 -2.22% Russell 2000 1,101.67 +0.95% VIX 14.02 -2.91% BATS 1000 20,677.17 0.00% GBP/USD 1.4471 -0.05% USD/JPY 111.5525 0.00%
Tuesday, February 2, 2016
Stocks, Oil Whacked Again; 10-Year Note at 1.86%; Yellen's Fed in Shambles
It's official.
The groundhog didn't see his shadow, and Janet Yellen didn't see the recession just ahead, proving, within a shadow of doubt, that animals have better sense than most humans.
At least in the case of furry rodents versus doctors of economics, the rodentia class is in a class all its own. Punxsutawney Phil, the most famous of ground hog prognosticators, came outside this morning and reassured everybody in the Northeast that the most mild winter in decades would continue, and, to boot, be short-lived.
By not seeing his shadow, Phil assuaged the assembled crowd that what remains of winter would be over within two weeks, rather than the usual six week span that extends nearly to the first day of Spring, March 20.
Despite this being a leap year, which adds a full day to the cruel month of February, residents in the most densely-populated area of the country seem to be settled in for a short stay on the chilly side.
In upstate New York, there is little to no snow on the ground. What remains are a few remnants of shoveled piles that take a little longer to melt, though even that should be gone by tomorrow, as temperatures from Buffalo to Albany are expected to approach sixty degrees on Wednesday.
Similar circumstances prevail throughout the Mid-Atlantic region and into New York, Pennsylvania, New Jersey and Massachusetts. The milder-than-normal conditions have resulted in lower use of heating fuels such as oil and natural gas, both of which are hovering around decades-long lows.
As for the Federal Reserve and the captain of that sinking ship, Janet Yellen, she and her hench-fellows seem to be on the wrong side of economic history, considering that since their historic rate hike in mid-December, interest rates have gone in the opposite direction, the 10-year note today closing at 1.86%, as the winds of global deflation and tight labor conditions continue to push consumer demand and consumption lower and lower.
Compounding the complexity of the Fed's non-tenable situation are the twin engines of stocks and oil, both of which have hit stall speed in 2016. WTI crude close in New York within whispering distance of the $30 mark, while the major stock indices were battered into submission by a combination of reduced earnings capacity and a growing confidence gap from investors.
Even with last week's brave showing by the markets in the face of a 2015 fourth quarter that slipped to 0.7% growth, stocks were unable to regain the footing which took the Dow 400 points higher on Friday as the Bank of Japan endorsed negative interest rates on its treasury bonds extending though eight years.
Supposedly, cheap, easy money was good news for the stock market. However, with the BOJ cancelling a treasury auction today due to lack of interest (no pun intended) from selected participants, equity markets around the world backtracked towards the lows of January. Apparently, there aren't many out there who see it as a prudent idea to pay somebody to hold your money.
Negative interest rate policy, aka NIRP, is the death-knell of central bankers. Traditionally, banks paid OUT interest on savings, but, in this decade of upside-down economics, the glorious kings and queens of monetary policy are sticking to the belief that people are so afraid of losing what they've earned that they will pay to have the banks hold it for them.
Mattresses and shotguns are back in style, kids, but nobody seems to have told the central bankers. Everybody from simple savers to mega-millionaires are losing confidence in a clearly broken system, pulling their assets out and into cash, precious metals, gemstones, art, real estate, or other stores of value that have stood the test of time. The only buyers of government debt are governments, a condition which cannot be sustained long.
Truth be known, the Fed, the ECB, BOJ and PBOC are all aware of this condition and have yet to devise a strategy that will resolve the liquidity and solvency crunch with a minimum of pain. Pain will come to many, precisely those holding debt which cannot be repaid. Ideally, this epoch of economic history will see the end of central banking with fiat currencies and fractional reserves.
We may be within weeks or months of a global reset, a change in the nature of money which will tear at the fabric of society itself.
Stay tuned. This is only the middle of the show which started in 2008.
Today's crap shoot:
S&P 500: 1,903.03, -36.35 (1.87%)
Dow: 16,153.54, -295.64 (1.80%)
NASDAQ: 4,516.95, -103.42 (2.24%)
Crude Oil 30.02 -5.06% Gold 1,129.20 +0.11% EUR/USD 1.0920 +0.27% 10-Yr Bond 1.8640 -5.19% Corn 372.00 +0.20% Copper 2.05 -0.29% Silver 14.31 -0.26% Natural Gas 2.03 -5.81% Russell 2000 1,008.84 -2.28% VIX 21.98 +10.01% BATS 1000 20,356.76 -1.72% GBP/USD 1.4411 -0.10% USD/JPY 119.84
The groundhog didn't see his shadow, and Janet Yellen didn't see the recession just ahead, proving, within a shadow of doubt, that animals have better sense than most humans.
At least in the case of furry rodents versus doctors of economics, the rodentia class is in a class all its own. Punxsutawney Phil, the most famous of ground hog prognosticators, came outside this morning and reassured everybody in the Northeast that the most mild winter in decades would continue, and, to boot, be short-lived.
By not seeing his shadow, Phil assuaged the assembled crowd that what remains of winter would be over within two weeks, rather than the usual six week span that extends nearly to the first day of Spring, March 20.
Despite this being a leap year, which adds a full day to the cruel month of February, residents in the most densely-populated area of the country seem to be settled in for a short stay on the chilly side.
In upstate New York, there is little to no snow on the ground. What remains are a few remnants of shoveled piles that take a little longer to melt, though even that should be gone by tomorrow, as temperatures from Buffalo to Albany are expected to approach sixty degrees on Wednesday.
Similar circumstances prevail throughout the Mid-Atlantic region and into New York, Pennsylvania, New Jersey and Massachusetts. The milder-than-normal conditions have resulted in lower use of heating fuels such as oil and natural gas, both of which are hovering around decades-long lows.
As for the Federal Reserve and the captain of that sinking ship, Janet Yellen, she and her hench-fellows seem to be on the wrong side of economic history, considering that since their historic rate hike in mid-December, interest rates have gone in the opposite direction, the 10-year note today closing at 1.86%, as the winds of global deflation and tight labor conditions continue to push consumer demand and consumption lower and lower.
Compounding the complexity of the Fed's non-tenable situation are the twin engines of stocks and oil, both of which have hit stall speed in 2016. WTI crude close in New York within whispering distance of the $30 mark, while the major stock indices were battered into submission by a combination of reduced earnings capacity and a growing confidence gap from investors.
Even with last week's brave showing by the markets in the face of a 2015 fourth quarter that slipped to 0.7% growth, stocks were unable to regain the footing which took the Dow 400 points higher on Friday as the Bank of Japan endorsed negative interest rates on its treasury bonds extending though eight years.
Supposedly, cheap, easy money was good news for the stock market. However, with the BOJ cancelling a treasury auction today due to lack of interest (no pun intended) from selected participants, equity markets around the world backtracked towards the lows of January. Apparently, there aren't many out there who see it as a prudent idea to pay somebody to hold your money.
Negative interest rate policy, aka NIRP, is the death-knell of central bankers. Traditionally, banks paid OUT interest on savings, but, in this decade of upside-down economics, the glorious kings and queens of monetary policy are sticking to the belief that people are so afraid of losing what they've earned that they will pay to have the banks hold it for them.
Mattresses and shotguns are back in style, kids, but nobody seems to have told the central bankers. Everybody from simple savers to mega-millionaires are losing confidence in a clearly broken system, pulling their assets out and into cash, precious metals, gemstones, art, real estate, or other stores of value that have stood the test of time. The only buyers of government debt are governments, a condition which cannot be sustained long.
Truth be known, the Fed, the ECB, BOJ and PBOC are all aware of this condition and have yet to devise a strategy that will resolve the liquidity and solvency crunch with a minimum of pain. Pain will come to many, precisely those holding debt which cannot be repaid. Ideally, this epoch of economic history will see the end of central banking with fiat currencies and fractional reserves.
We may be within weeks or months of a global reset, a change in the nature of money which will tear at the fabric of society itself.
Stay tuned. This is only the middle of the show which started in 2008.
Today's crap shoot:
S&P 500: 1,903.03, -36.35 (1.87%)
Dow: 16,153.54, -295.64 (1.80%)
NASDAQ: 4,516.95, -103.42 (2.24%)
Crude Oil 30.02 -5.06% Gold 1,129.20 +0.11% EUR/USD 1.0920 +0.27% 10-Yr Bond 1.8640 -5.19% Corn 372.00 +0.20% Copper 2.05 -0.29% Silver 14.31 -0.26% Natural Gas 2.03 -5.81% Russell 2000 1,008.84 -2.28% VIX 21.98 +10.01% BATS 1000 20,356.76 -1.72% GBP/USD 1.4411 -0.10% USD/JPY 119.84
Wednesday, September 18, 2013
Surprise! Fed Ponzi Scheme Not Working, Will Continue
No change in asset (ha, ha, ha, ha) purchases.
The Fed is content to continue buying worthless paper with make-believe money they create out of thin air.
Sending this money mainly to the primary dealers via zero interest rate policy and repo actions, the dealers become free to speculate in whatever assets they believe worth pursuing, driving prices, in the main, higher.
The next magic trick is more difficult. These primary dealers are supposed to lend out their unallocated capital into the market, creating debt, which is, after all, the only goal of fractional reserve bankers.
Essentially, by changing nothing - even though the Fed hinted strongly that asset purchases would be "tapered" and the markets expected as much - the Fed is telling the world that their stimulus programs have not resulted in the expected results. Inflation remains below their desired threshold, unemployment remains stubbornly high and economic growth continues to be muted, the GDP, even with hedonic adjustments and recent additions, failing to achieve three percent annualized in any quarter since the collapse of 2008-09.
So, everything stays the same. The Fed keeps buying $45 billion of worthless government debt and $40 billion of even more destructive and toxic mortgage debt (toxic because price, or par, is at an excessive, unrealistic level) every month, in hopes that the combined markets which fuel the economy will continue to stumble forward.
Contemporary and classic theories of economics both say this kind of activity can lead to no good. Eventually all assets become overpriced in terms of a depreciating currency to the point at which the currency is no longer accepted in trade. Until the malinestments are purged from the system, normalcy in markets cannot occur, and guess who is holding most of the bad investments.
Central banks, particularly the Bank of England, the European Central Bank (ECB), Bank of Japan (BOJ) and, surpassing them all by levels of magnitude, the US Federal Reserve will end up holding most of the world's assets. Central banks are cornered without escape. They must keep devaluing their currencies in order to service burgeoning debt set against faulty assets. In terms of bubbles, the central banks of the developed nations are the world's greatest bubble and when that pops, there will be true freedom in economies, currencies, prices and price discovery. Not until.
More than anyone else, David Stockman has captured the essence of the current economic climate by use of the word "deformation." The global economy is deformed, distorted, obtuse and opaque. All price discovery mechanisms have been distorted out of recognition by the continuing debasement of currencies.
Even though nothing changed, markets behaved as if something had. Stocks roared to new highs on the Dow and S&P 500, but, here's the kicker: by percentage, hard assets were the most appreciated on the day. Commodities, particularly crude oil, gold and silver all outpaced stocks by multiples. Gold surged 4.5%, silver up 7.5%, crude gained a paltry 2.5%, making the sloppy one percent returns in stocks look like a piker's paradise.
The ramifications of today's Fed (in)action are monumental and trend-setting. So much so, that they cannot be easily disseminated and pursued in a single blog post, though they will have enduring effects, which Money Daily will continue to report upon in the days, weeks and months ahead.
Happy Hunting! Free Houses for Everybody!
Dow 15,676.94, +147.21 (0.95%)
Nasdaq 3,783.64, +37.94 (1.01%)
S&P 500 1,725.52, +20.76 (1.22%)
10-Yr Bond 2.71%, -0.14
NYSE Volume 4,410,661,500
Nasdaq Volume 1,769,496,125
Combined NYSE & NASDAQ Advance - Decline: 5052-1648
Combined NYSE & NASDAQ New highs - New lows: 565-51
WTI crude oil: 108.07, +2.65
Gold: 1,366.40, +58.80
Silver: 23.18, +1.616
The Fed is content to continue buying worthless paper with make-believe money they create out of thin air.
Sending this money mainly to the primary dealers via zero interest rate policy and repo actions, the dealers become free to speculate in whatever assets they believe worth pursuing, driving prices, in the main, higher.
The next magic trick is more difficult. These primary dealers are supposed to lend out their unallocated capital into the market, creating debt, which is, after all, the only goal of fractional reserve bankers.
Essentially, by changing nothing - even though the Fed hinted strongly that asset purchases would be "tapered" and the markets expected as much - the Fed is telling the world that their stimulus programs have not resulted in the expected results. Inflation remains below their desired threshold, unemployment remains stubbornly high and economic growth continues to be muted, the GDP, even with hedonic adjustments and recent additions, failing to achieve three percent annualized in any quarter since the collapse of 2008-09.
So, everything stays the same. The Fed keeps buying $45 billion of worthless government debt and $40 billion of even more destructive and toxic mortgage debt (toxic because price, or par, is at an excessive, unrealistic level) every month, in hopes that the combined markets which fuel the economy will continue to stumble forward.
Contemporary and classic theories of economics both say this kind of activity can lead to no good. Eventually all assets become overpriced in terms of a depreciating currency to the point at which the currency is no longer accepted in trade. Until the malinestments are purged from the system, normalcy in markets cannot occur, and guess who is holding most of the bad investments.
Central banks, particularly the Bank of England, the European Central Bank (ECB), Bank of Japan (BOJ) and, surpassing them all by levels of magnitude, the US Federal Reserve will end up holding most of the world's assets. Central banks are cornered without escape. They must keep devaluing their currencies in order to service burgeoning debt set against faulty assets. In terms of bubbles, the central banks of the developed nations are the world's greatest bubble and when that pops, there will be true freedom in economies, currencies, prices and price discovery. Not until.
More than anyone else, David Stockman has captured the essence of the current economic climate by use of the word "deformation." The global economy is deformed, distorted, obtuse and opaque. All price discovery mechanisms have been distorted out of recognition by the continuing debasement of currencies.
Even though nothing changed, markets behaved as if something had. Stocks roared to new highs on the Dow and S&P 500, but, here's the kicker: by percentage, hard assets were the most appreciated on the day. Commodities, particularly crude oil, gold and silver all outpaced stocks by multiples. Gold surged 4.5%, silver up 7.5%, crude gained a paltry 2.5%, making the sloppy one percent returns in stocks look like a piker's paradise.
The ramifications of today's Fed (in)action are monumental and trend-setting. So much so, that they cannot be easily disseminated and pursued in a single blog post, though they will have enduring effects, which Money Daily will continue to report upon in the days, weeks and months ahead.
Happy Hunting! Free Houses for Everybody!
Dow 15,676.94, +147.21 (0.95%)
Nasdaq 3,783.64, +37.94 (1.01%)
S&P 500 1,725.52, +20.76 (1.22%)
10-Yr Bond 2.71%, -0.14
NYSE Volume 4,410,661,500
Nasdaq Volume 1,769,496,125
Combined NYSE & NASDAQ Advance - Decline: 5052-1648
Combined NYSE & NASDAQ New highs - New lows: 565-51
WTI crude oil: 108.07, +2.65
Gold: 1,366.40, +58.80
Silver: 23.18, +1.616
Tuesday, June 11, 2013
Stocks Decline Globally as QE and ZIRP Show There are Limits
With losers outpacing gainers by a 4:1 margin, stocks got trashed today around the globe, starting in Japan - which triggered the entire equity rout - and ending here in the USA where the Dow lost 108 points, and, despite that stiff selloff, was still easily the best performer of the major indices on a percentage basis.
The NASDAQ and NYSE Composite took the day's losses the worst, off 1.06% and 1.10% respectively. The S&P dropped by just more than one percent.
The worldwide selling spree was set off when the Japanese leadership declined to extend their bond and market easing measures past what was already in place. Speculators expected the BoJ to increase bond and ETF purchases, but came away disappointed.
That sent the Nikkei and Topix tumbling to the downside, and greeted European investors with markedly negative prospects as their trading day began.
In the US, futures were heavily to the downside, resulting in the indices hitting their lowest points just minutes into trading. Remarkably, stocks came nearly all the way back - with the Dow going positive for a few moments before noon, but the low-volume rally fooled nobody and sellers came back in force to take stocks back down for the rest of the session.
Adding to the already nervous environment, the 10-year note bounced up as high as 2.28%, but ended the day at a relatively benign 2.18%, though fear of higher rates and a tapering of the Fed's bond buying program remained a key market driver in both stocks and bonds.
A fortnight of protests in Turkey finally exploded into a somewhat violent repression by government forces, who used water cannons and tear gas to disperse about 10,000 protesters. Also, late in the day, news broke that the ACLU had filed suit against the US government over the NSA's recently-exposed monitoring of nearly all domestic communications, calling the activity unconstitutional.
This is truly a dangerous environment, both for investors and ordinary citizens. Stocks are hovering in a range just below all-time highs and recent lows, while Washington is awash in scandals ranging from covering up the assassination of a diplomat and others in Libya (Benghazi), to wiretapping reporters to having the IRS harass political opposition. In another time, there would be protests all over the Washington Mall and cries for impeachment of president Obama would be drowning out reasonable discourse. But, Americans have grown so used to government malfeasance and the country has become so dependent on government entitlements that nobody seems capable of raising their voice to an administration and a congress that has trampled the constitution ever since 9/11/2001.
What will it take to shake things up and clean the garbage out of our corrupt-to-the-core political and financial system? A severe market crash? A politician with will and integrity? A hot war in Syria? Something else?
Stay tuned for what should develop into a very contentious, heated summer of pandemonium in markets and politics. The events of the past two to three weeks have been just the warm-up act. The main attraction begins when the cronies turn on each other.
Dow 15,122.02, -116.57 (0.76%)
NASDAQ 3,436.95, -36.82 (1.06%)
S&P 500 1,626.13, -16.68 (1.02%)
NYSE Composite 9,255.44, -102.56 (1.10%)
NASDAQ Volume 1,477,085,500
NYSE Volume 3,854,662,750
Combined NYSE & NASDAQ Advance - Decline: 1286-5251
Combined NYSE & NASDAQ New highs - New lows: 131-308
WTI crude oil: 95.38, -0.39
Gold: 1,377.00, -9.00
Silver: 21.65, -0.279
The NASDAQ and NYSE Composite took the day's losses the worst, off 1.06% and 1.10% respectively. The S&P dropped by just more than one percent.
The worldwide selling spree was set off when the Japanese leadership declined to extend their bond and market easing measures past what was already in place. Speculators expected the BoJ to increase bond and ETF purchases, but came away disappointed.
That sent the Nikkei and Topix tumbling to the downside, and greeted European investors with markedly negative prospects as their trading day began.
In the US, futures were heavily to the downside, resulting in the indices hitting their lowest points just minutes into trading. Remarkably, stocks came nearly all the way back - with the Dow going positive for a few moments before noon, but the low-volume rally fooled nobody and sellers came back in force to take stocks back down for the rest of the session.
Adding to the already nervous environment, the 10-year note bounced up as high as 2.28%, but ended the day at a relatively benign 2.18%, though fear of higher rates and a tapering of the Fed's bond buying program remained a key market driver in both stocks and bonds.
A fortnight of protests in Turkey finally exploded into a somewhat violent repression by government forces, who used water cannons and tear gas to disperse about 10,000 protesters. Also, late in the day, news broke that the ACLU had filed suit against the US government over the NSA's recently-exposed monitoring of nearly all domestic communications, calling the activity unconstitutional.
This is truly a dangerous environment, both for investors and ordinary citizens. Stocks are hovering in a range just below all-time highs and recent lows, while Washington is awash in scandals ranging from covering up the assassination of a diplomat and others in Libya (Benghazi), to wiretapping reporters to having the IRS harass political opposition. In another time, there would be protests all over the Washington Mall and cries for impeachment of president Obama would be drowning out reasonable discourse. But, Americans have grown so used to government malfeasance and the country has become so dependent on government entitlements that nobody seems capable of raising their voice to an administration and a congress that has trampled the constitution ever since 9/11/2001.
What will it take to shake things up and clean the garbage out of our corrupt-to-the-core political and financial system? A severe market crash? A politician with will and integrity? A hot war in Syria? Something else?
Stay tuned for what should develop into a very contentious, heated summer of pandemonium in markets and politics. The events of the past two to three weeks have been just the warm-up act. The main attraction begins when the cronies turn on each other.
Dow 15,122.02, -116.57 (0.76%)
NASDAQ 3,436.95, -36.82 (1.06%)
S&P 500 1,626.13, -16.68 (1.02%)
NYSE Composite 9,255.44, -102.56 (1.10%)
NASDAQ Volume 1,477,085,500
NYSE Volume 3,854,662,750
Combined NYSE & NASDAQ Advance - Decline: 1286-5251
Combined NYSE & NASDAQ New highs - New lows: 131-308
WTI crude oil: 95.38, -0.39
Gold: 1,377.00, -9.00
Silver: 21.65, -0.279
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