Showing posts with label Brexit. Show all posts
Showing posts with label Brexit. Show all posts

Sunday, February 2, 2020

WEEKEND WRAP: Virus Fears Spark Selling Spree; But Preventive Measures May Be Slowing Advance of 2019-nCoV

It wasn't a particularly positive week for equities. In fact, it was negative, across the board, ending with a massive selloff on Friday, culminating in the worst week for US stocks since October, 2019.

The better part of the decline came on Friday, after the WHO had issued an international alert on the coronavirus (2019-nCoV) and US stocks soared off lows on Thursday. Reality set in Friday and accounted for 75-80% of the total weekly decline.

As the weekend wore on (this is now Sunday noon in the US, Eastern Time), more reports proved encouraging. The official count from China confirmed 14,380 cases total, and 304 deaths. On Saturday, a death in the Philippines was suggested to have been caused by coronavirus but that has yet to be confirmed. Medical professionals are awaiting further testing. The patient died from pneumonia, but it may have come from normal, seasonal flu.

In the US, there's a better chance of dying from the common flu than the coronavirus, according to the CDC.

Preliminary considerations are suggesting that the spread of the virus is being slowed by China's quarantines and travel restrictions and monitoring around the world and that many reports on social media such as Twitter and Facebook have proven false, misleading or negatively hyperbolic.

Patient Zero, i.e., the first case of the disease to have been reported in the United States (Washington state), became quite ill, was treated intravenously with remdesivir (a drug produced by Gilead Sciences (GILD)) and was recovering.

Also on Friday, Great Britain finally extricated itself from the European Union via what's been known as Brexit, the referendum passed by the British public more than three-and-a-half years ago (June 23, 2016), and President Trump appeared on the way to being acquitted on charges of impeachment by the Senate, which voted 51-49 against calling additional witnesses. A final vote on acquittal or guilt will be held at 4:00 pm ET, Wednesday, February 5.

As frightening as the coronavirus and other news may be, people around the world can take heart in the video below: Nigel Farage's final speech at the European Parliament. As of 11:00 pm January 31, 2020, Britain formally withdrew from the European Union.

At the Close, Friday, January 31, 2020:
Dow Jones Industrial Average: 28,256.03, -603.41 (-2.09%)
NASDAQ: 9,150.94, -148.00 (-1.59%)
S&P 500: 3,225.52, -58.14 (-1.77%)
NYSE: 13,614.10, -247.82 (-1.79%)

For the Week:
Dow: -733.70 (-2.53%)
NASDAQ: -163.98 (-1.76%)
S&P 500: -69.95 (-2.12%)
NYSE: -364.37 (-2.61%)

Tuesday, October 8, 2019

Washington's Impeachment Addiction, Trade Fiasco, Brexit, Global Condition Damaging Wall Street

The headline says it all. Things are coming apart at a rapid rate. Anybody who is even the least bit jittery is moving out of stocks as fast as possible. Rerun of last year's fourth quarter massacre is commencing apace. This iteration may be comparable to the New England Patriots playing a football game against a high school girl's rugby team.

More than caution is needed. A little panic would do the world's markets some good and maybe get the back-slapping bureaucrats and politicians to actually do some thing constructive (fat chance).

China will not negotiate fairly and especially so until the impeachment chorus is silenced for good. Even if President Trump is elected to a second term, Democrats will not stop their harassment, but likely accelerate efforts to remove him from office by any means. One saving grace could come from Republicans recapturing the House of Representatives, but that's a real Hail Mary.

In England, the anti-democratic forces are pushing ahead toward four years since the original referendum to leave the European Union was approved by the general population (June 23, 2016). Since, there has been a non-stop war waged against the wishes of the people. With no apparently-workable deal in sight, it may be the case that Britain won't leave the EU at all until the people rise up against their government. All is needed is a spark, in Britain, in the US, in China, everywhere, for the global condition to turn to global contagion and conflagration.

The global condition - which has generally been worsening since September 11, 2001 - is deteriorating at a quickened pace. There will be pain, but, in the end, if one is consistent, conservative, and constructive, a better future lies just ahead.

At the Close, Monday, October 7, 2019:
Dow Jones Industrial Average: 26,478.02, -95.70 (-0.36%)
NASDAQ: 7,956.29, -26.18 (-0.33%)
S&P 500: 2,938.79, -13.22 (-0.45%)
NYSE Composite: 12,777.74, -53.81 (-0.42%)

Thursday, August 15, 2019

Stocks Crumble As Treasury Yield Curve Inverts; 30-year Tumbles Below 2%

It is certainly getting interesting in terms of global economics.

National currencies are in a race to the bottom, and Japan and the EU are winning.

With more than $14 trillion worth of bonds holding negative yields (you get back less than you invested), the world is looking like a place headed for disaster. European and Japanese bonds have the most negative yielding bonds. Their economies are not just heading for a recession, they're diving into depression territory.

There is no growth and that's not to blame on Trump's tariffs. In fact, the tariffs have little to nothing to do with the state of global trade. All economies are slowing. There's entirely too much uncertainty, piled atop too much malinvestment, coupled with an aging demographic, for which to promote any kind of meaningful growth.

By this time next year, expect to see at least six of the major developed nations in recession. The most likely candidates would be Japan, Germany, France, Italy, Spain, and Greece. Notably absent from the list are the US, Australia, Great Britain, and Canada. Since China claims to be still growing, they will admit only to slowing down, to about 3% growth, which might as well be a recession. India, which is not a developed nation (nor is China), is already a basket case.

These recessions will not end easily, and the US, Britain, and Canada will likely recede as well, but not quite as soon as the other nations, mostly European, because Brexit is going to change the dynamic to some degree. The EU is going to lose Britain as a trading partner come October 31. That is a near certainty and long overdue.

The US, Australia, and Canada will sign agreements with Britain to continue trade on a reasonable, fair basis. Europe will be shut out of any such agreement, due to their unwillingness to allow Britain an orderly exit for some three years running. The genii in the EU parliament have made their beds and will have to sleep in them. The populations of the EU countries should rightly riot since EU governance, in conjunction with their national leaders have sold them down the proverbial river via lax immigration standards and horrible economic policies.

In the end - though it may take some time - the EU will dissolve, disintegrate. It may take war, or it may take anger from the Greeks, Spanish, Irish or Italians to tip the EU contract overboard, but it will happen.

For the present, however, the world is focused on stocks and bonds, and stocks are not faring well. Wednesday's disaster was the worst trading day of 2019, rivaling some of the hours of last December.

With a global recession looming, investors may be rushing the exits at various stages over the coming months. Adding to the malaise is the upcoming US elections, whereby strident Democrats seek to unseat Mr. Trump. None have shown the qualities to lead or offer any reasonable path to a stable future. Trump should rightly win in a landslide.

With that, the 30-year bond became the latest victim of upside-down economics and the flight to safety, dipping below 2.00% in yield for the first time EVER. The entire treasury curve is now not only yielding less than two percent, it is inverted, and all of it is yielding lower returns than the effective overnight federal funds rate (2.11%).

We are witnessing the death of fiat money in real time. In the meantime, look for a short-lived relief rally which could extend through the rest of August. Real selling should commence after Labor Day.

At the Close, Wednesday, August 14, 2019:
Dow Jones Industrial Average: 25,479.42, -800.49 (-3.05%)
NASDAQ: 7,773.94, -242.42 (-3.02%)
S&P 500: 2,840.60, -85.72 (-2.93%)
NYSE Composite: 12,368.05, -356.32 (-2.80%)

Monday, August 12, 2019

Far From Ordinary Times For National Economies

Empires rise and fall. Nations traverse through periods of feast and famine, disputes with other nations, sometimes wars, and economic booms and busts. History is rife with stories detailing the life and times of nations and their leaders.

The vast majority of nations today face conditions that are far from normal.

There are at least three major migrations taking place, Africans to Europe, Chinese to Africa, and South Americans to North America. These are disruptive events, not only for the individuals involved but for the entire populations of the nations affected. Changes are gradual, mostly, but the mundane can be cracked by atrocities, absurdities and maladjustments committed by migrants in the clash of cultures.

Such conditions are prevalent in Europe and the United States, with migration reaching epidemic proportions. Indeed, President Trump himself calls the illegal immigration at the southern US border an "invasion." He is not wrong. The United States was built on the back of immigrants - legal ones - whose individual efforts and respect for their fellows built the greatest nation on Earth.

Illegal immigration is challenging the normative behavior of well-established citizens. According to certain left-leaning politicians and a corrupted media, illegal immigrants should receive free health care, free schooling, and largely, freedom from gainful employment. Ordinary, established US citizens do not receive such largesse, nor should they. Nor should the illegal entrants, who have violated our borders, broken our laws and flaunted the lifestyles and even the national flags of whence they came.

Such activity is largely disruptive to the fine working condition of a nation and the United States has been building to this state of affairs for more than 40 years. Estimates of people living in the US illegally range from 11 million to as many as 60 million people. The higher end of that range is probably closest to the truth, which is why immigrants - mostly the illegal ones - disrespect US laws, commit crimes, and take advantage of an overly generous social framework and increasingly undisciplined judicial process.

The condition in many European countries is far worse, where theft, rape, and other human crimes are committed with impunity. Often, if an immigrant is accused of crime, there exists no punishment. The system feeds upon itself and eventually fails to protect the national culture.

That is not all. Every nation on earth is controlled economically by an unelected elite, otherwise know as a central bank. In Europe, where the financial condition is dire, all nations on the continent are controlled by one central bank, the ECB. Nations have usurped their right to issue currency, having been overwhelmed by the collectivist desires of the European Union. The ECB issues fiat currency, in the form of a counterfeit euro, bolstered most recently by negative interest rates because the system is a fraud and it imploded over 10 years ago, during the Great Financial Crisis. The global central banks added untold amounts of liquidity, but it will never be enough because the crisis is one not of liquidity, but of solvency. All central banks create currency out of thin air, charge interest for its use, and, via the magic of fractional reserve lending, multiply the amount of currency in circulation by ghastly amounts.

The system is broken and will remain broken until it is completely rejected by the various populaces which employ it. That moment in time is unknowable, but it is inevitable.

There is more.

Great Britain, wise enough to keep their currency - the pound - national in nature, is attempting to exit the EU, but has been met with resistance three years since a national referendum preferred exiting, or, in common parlance, Brexit.

This is a further disruption to the status quo, and the elites will have none of it.

President Donald J. Trump, of the United States, foments more radical departures, not the least of which being his penchant for fair trade via tariffs. For three decades, the globalists have promulgated their "free trade" jingoism, which is commonly broken, cheated upon, corrupted, deceitful, unequal, and decrepit. Global trade should well collapse, and if President Trump's tariffs are the agent of change, all the better.

Thus, these days are far from normal. Superficially, people go about their business as if nothing is brewing beneath the casual calm. There will be a shock, probably multiple shocks, similar to, and many of them larger than the events of 2007-2009.

How long the politicians, bankers, and the media can keep a lid on the calamity that is bubbling up below, is anyone's guess, but their time is running short. Currencies will collapse, nations will fall, there will be wars.

It would pay to keep a sharp eye on one's assets, hard and soft. Anything that is not well-protected can be stolen away in a flash. Consider the number of security breaches at financial institutions as warnings. The money is unsafe. Hard assets are safer, but must be protected, defended.

All of this is frighteningly real and happening at breakneck speed. The usual media sources will not tell you the truth. You must find it on your own.

Ten years is a long time for the central banks and their friends to keep the spinning plates of a corrupt, defunct global financial construct from experiencing inertia and crashing to the floor, shattering into millions of tiny, unrecoverable pieces.

The spinning will end. Everything will change.

At the Close, Monday, August 12, 2019:
Dow Jones Industrial Average: 25,897.71, -389.73 (-1.48%)
NASDAQ: 7,863.41, -95.73 (-1.20%)
S&P 500: 2,883.09, -35.56 (-1.22%)
NYSE Composite: 12,586.24, -162.18 (-1.27%)

Sunday, November 18, 2018

Weekend Wrap: Myopic Markets Ignoring Broader, Global Issues

Extending declines from last Friday, stocks took a severe nose-dive on Monday and the carnage continued through to Wednesday, with the first three days of the week wiping out most, if not all market gains from earlier in the month.

The Dow Industrials were hit hardest. Even with winning sessions on Thursday and Friday to close out the week, the blue chips ended with one of the more serious declines of the year, a solid 2.22% rip. Though tech stocks were blamed for most of the drop, the price declines in oil and most of the other components contributed to send Dow stocks lower, as the price of WTI crude hit a year-old bottom on Wednesday before recovering the final two days of the trading week.

Chevron (CVX) and ExxonMobil (XOM), the two energy components in the Dow 30, took it on the chin early in the week, but Chevron actually finished the week about where it started and ExxonMobil ended the week down just two points, or, about 2.5%.

Apple (AAPL) was a big driver to the downside, down nearly five percent at week's end, though it was off about nine percent at the close on Wednesday. The early part of the week saw selling contributions from most of the component stocks and slight recoveries in the latter stages.

Once again, volatility was notable and seems not to be slacking. The widely-watched VIX popped well over 20 as the week progressed, but settled back in the high teems, closing at 18.14 on Friday. That is still an elevated level over the complacency of the past few years, which saw the VIX hanging solidly in the 10-13 range for extended periods.

On the international front, the usual knee-jerking on every utterance, press release, or rumor surrounding a trade deal-or-no-deal between the US and China continued. It's being set up as a foil to be used by the financial press to explain every up-and-down in markets, when in fact, trade with China is much less an issue than say, the Fed's relentless interest rate increases or the possibility of a looming Eurozone-wide recession.

Industrial production in Europe was anemic in the third quarter, with increases of 0.3, 1.1, and 0.9 for July, August and September. As compared to the same quarter in the prior year, the average of 0.77 is dwarfed by 2017's average of four percent. Such a huge decline cannot be taken lightly, though it is rarely - if ever - mentioned in US financial coverage. Contributing to the growing concerns in Europe is the recent Brexit proposal put up by Prime Minister Theresa May's administration. The deal was met with considerable resistance in the House of Commons and prompted some high-level resignations from May's cabinet. Chances of a deal being worked out for an orderly exit from the European Union are being viewed as iffy at best.

While Europe will live or die largely by its own restrictive and stifling internal policies, China and the United States should continue to roll right along, regardless of whether a deal is struck between the two countries. The next meeting between President Trump and china's president, Xi Jinping, is upcoming soon. The two leaders are reportedly planning to discuss trade as a side event at the next G20 meeting in Buenos Aires on November 30, but the two largest national economies in the world aren't about to be sidetracked by tariffs. China's growth is already slowing, but they have broad international initiatives beyond the United States. Ditto for the US, as President Trump extricates the country from one-sided trade deals that were the result of globalization efforts from previous administrations.

Putting the week into perspective, US equity markets are still generally myopic, ignorant of issues elsewhere in the world, though that may be changing. Many US companies are dynamic and have global footprints, so that, if other parts of the planet are suffering, the US, while somewhat insulated, is not completely immune. US expansion has been long, though not deep, but the housing market has peaked and is slowing and unemployment cannot stay at its current sweet spot indefinitely. Tech appears the weakest link presently, though its weakness is not pronounced. Stocks continue to vacillate, but are closer to recent lows than highs.

Recent trends have seen selling into rallies and quick rises off obvious inflection points. Even with what are still somewhat easy credit conditions and stock buybacks at elevated levels, stocks are failing to reach higher, the condition looking more like exhaustion rather than capitulation. Such a condition may take more than a few weeks or months to resolve. In the meantime, traders aren't seriously committed to positions.

Sentiment remains neutral with a slight downside bias.

Dow Jones Industrial Average November Scorecard:

Date Close Gain/Loss Cum. G/L
11/1/18 25,380.74 +264.98 +264.98
11/2/18 25,270.83 -109.91 +155.07
11/5/18 25,461.70 +190.87 +345.94
11/6/18 25,635.01 +173.31 +519.25
11/7/18 26,180.30 +545.29 +1064.54
11/8/18 26,191.22 +10.92 +1075.46
11/9/18 25,989.30 -201.92 +873.54
11/12/18 25,387.18 -602.12 +271.42
11/13/18 25,286.49 -100.69 +170.27
11/14/18 25,080.50 -205.99 -35.72
11/15/18 25,289.27 +208.77 +173.05
11/16/18 25,413.22 +123.95 +297.00

At the Close, Friday, November 16, 2018:
Dow Jones Industrial Average: 25,413.22, +123.95 (+0.49%)
NASDAQ: 7,247.87, -11.16 (-0.15%)
S&P 500: 2,736.27, +6.07 (+0.22%)
NYSE Composite: 12,400.28, +38.76 (+0.31%)

For the Week:
Dow: -576.08 (-2.22%)
NASDAQ: -159.03 (-2.15%)
S&P 500: -44.74 (-1.61%)
NYSE Composite: -137.25 (-1.09%)

Friday, November 16, 2018

Dip-Buyers Send Stocks Off Fresh Lows; Cory Booker, Poster Boy For Peak Stupidity

As stocks touched down on some key support levels, investors took the initiative to load up on what they perceived as undervalued shares, sending stocks off morning lows to afternoon highs, with NASDAQ dumb money leading the charge higher.

The major indices were under pressure early in the session, dropping to levels at which the year began, wiping out nearly all of the gains since last December. Call it coincidence or a propensity for chart-watching dip-buying, but there was no other catalyst to Thursday's mini-rally other than valuations.

On the downside, Britain seems to be completely flummoxed by ongoing Brexit negotiations, with resignations in Prime Minister Theresa May's cabinet over the compromise deal presented to the House of Commons this week. Rumors of a no confidence vote are circulating as the Brexit issue continues to derail any progress England can make in extricating itself from the European Union. The referendum, passed in early 2016, called for an exit by March of 2019, though that date now appears less certain. The issues are complex and threaten to tear the country apart.

In a completely unrelated note, America has finally achieved PEAK STUPIDITY, and its poster boy is the senator from New Jersey, Cory Booker.

Booker's proposal for "Baby Bonds" as a way to shrink the wealth gap is about as far left an approach as could be considered... without laughing.

Booker's idea is to give every newborn $1000 at birth and up to another $2000 every year thereafter - based on the parents' income, of course - until that child reaches the age of 18, or, in other words, just in time to take out a government-funded student loan, or, pay for maybe a few years of college themselves.

It's just this kind of insanity that American citizens have to endure from its government that causes angst, apathy, or confrontation between liberals and conservatives. The US has had a massive welfare program in place - that rewards having more children with higher benefits - for more than 50 years, and it's done nothing to reduce poverty or improve living conditions for chronically poor people.

With people like Booker being elected and re-elected to high government positions of power, is there any wonder why the United States are so disunited?

Despite the higher close on Thursday, investors should not be enthusiastic about an extension to the short-term rally which was likely the result more of short-covering and corporate buybacks than the actual taking of new positions in stocks. Sentiment remains murky with a bias to the downside.

Dow Jones Industrial Average November Scorecard:

Date Close Gain/Loss Cum. G/L
11/1/18 25,380.74 +264.98 +264.98
11/2/18 25,270.83 -109.91 +155.07
11/5/18 25,461.70 +190.87 +345.94
11/6/18 25,635.01 +173.31 +519.25
11/7/18 26,180.30 +545.29 +1064.54
11/8/18 26,191.22 +10.92 +1075.46
11/9/18 25,989.30 -201.92 +873.54
11/12/18 25,387.18 -602.12 +271.42
11/13/18 25,286.49 -100.69 +170.27
11/14/18 25,080.50 -205.99 -35.72
11/15/18 25,289.27 +208.77 +173.05

At the Close, Thursday, November 15, 2018:
Dow Jones Industrial Average: 25,289.27, +208.77 (+0.83%)
NASDAQ: 7,259.03, +122.64 (+1.72%)
S&P 500: 2,730.20, +28.62 (+1.06%)
NYSE Composite: 12,361.52, +86.03 (+0.70%)

Thursday, October 11, 2018

Smackdown! Stocks Crushed; Dow Loses 859 points, NASDAQ Drops 315

Stocks were battered on Wednesday as investors fled stocks in droves, sending the Dow to its worst loss in eight months and extending the S&P 500's losing streak to five straight days.

The Dow suffered its biggest point decline since February 8 (-1,032.89). The NASDAQ's 315-point loss was the largest since the Brexit vote in England on June 23, 2016. Global markets responded the following day with huge losses, the NASDAQ dropping 202 points. Wednesday's decline on the NASDAQ was the third-largest point drop, the 4.08% loss ranks 13th all-time.

Wednesday's sudden collapse was not completely unpredictable. It came exactly two weeks after the Federal Reserve hiked the federal funds rate for the eighth consecutive time, when it's FOMC meeting concluded on September 26. Since then, stocks initially gained, with the Dow making successive all-time highs on October 2nd and 3rd. On the 4th and 5th, however, the direction reversed, with the Industrial Average losing 380 points over those two sessions.

With Wednesday's losses, the Dow has shed 1230 points and futures on Thursday are pointing to more declines.

Markets around the world have been trending lower in recent weeks, with some already in correction territory, most notably, the German DAX, Argentina's MERVAL and the KOSPI of South Korea. England's FTSE has been suffering losses of late and is more than nine percent off recent highs.

Tuesday's post here at Money Daily referenced a market action in 2007 as a comparison to the current condition, noting that in the year preceding the Great Financial Crisis of 2008, the Dow made new highs in quick succession before taking a plunge that lasted a year-and-a-half, finally reversing course in March 2009. A similar set-up occurred recently on the Dow, though the new highs were more compressed.

Large one-day declines are often event-driven. This shellacking can be tied most closely to the September interest rate hikes. With the 10-year note yielding 3.23%, there are few stocks offering that percentage level in dividends, thus, investors seeking to ameliorate risk are selling stocks and buying bonds, which are not subject to the kinds of wild price swings typical in stocks.

When markets open in the US, investors will see that the rout has spread globally. Japan's NIKKEI was down nearly four percent on Thursday. Hong Kong's Hang Seng was down 3.5% and China stocks ripped more than five percent lower.

With closing prices on Wednesday, the Dow Jones Industrial Average has wiped out most of the year's gains. The Dow is up just over 800 points on the year, a gain of less than four percent.

Dow Jones Industrial Average October Scorecard:

Date Close Gain/Loss Cum. G/L
10/1/18 26,651.21 +192.90 +192.90
10/2/18 26,773.94 +122.73 +315.63
10/3/18 26,828.39 +54.45 +370.08
10/4/18 26,627.48 -200.91 +169.17
10/5/18 26,447.05 -180.43 -11.26
10/8/18 26,486.78 +39.73 +28.47
10/9/18 26,430.57 -56.21 -27.74
10/9/18 25,598.74 -831.83 -859.57

At the Close, Wednesday, October 10, 2018:
Dow Jones Industrial Average: 25,598.74, -831.83 (-3.15%)
NASDAQ: 7,422.05, -315.97 (-4.08%)
S&P 500: 2,785.68, -94.66 (-3.29%)
NYSE Composite: 12,622.13, -338.32 (-2.61%)

Wednesday, August 3, 2016

Dow Ends 7-Day Losing Streak, But Who's Watching The Transports And NYSE Composite?

Markets can seem exuberant, sometimes, even over-exuberant, as has lately been the case, without reason.

The current environment is one of those times by which market movements cannot be rationally explained, or as the Maestro himself - former Fed Chairman, Alan Greenspan - so aptly put it, the markets seem to be suffering from irrational exuberance.

This needs to be pointed out in the current context of manipulation and high-stakes politics between the Nah! Brexit vote and the very real threat that Donald Trump might somehow wrangle himself into the Oval Office come November... to the absolute terror of the elite status quo, including everyone from Warren Buffet to Mark Cuban to Janet Yellen and just about every member of congress and Wall Street hedge fund slickster.

Money Daily has recently been pointing out that the any positive developments by Mr. Trump are and have been met with scurrying, rat-like selling of shares on the equity markets by those with very thin, lizard-like skins, probably your average congressional insider and self-important hedge fund managers.

On the other side of the coin, there's the relentless marauding of the Fed, the central bank which is prohibited from buying or selling of equities (unlike the Bank of Japan, which is now a top 10 holder of 90% of the stocks listed on the NIKKEI 225), but which has ample resources by which to funnel money into stocks via proxies such as Goldman Sachs, JP Morgan Chase, and Merrill Lynch, the investment arm of Bank of America, or even the Bank of Japan, which, having run out of luck in the Nikkei, is probably more than willing to buy US stocks.

It's a safe bet that the Fed and their cronies halted and reversed the post-Brexit decline, sending the Dow and S&P 500 to all-time highs via options trading and positions on the VIX, the volatility index, widely parlayed by those in the hedging business.

In fact, days before the Brexit vote, heads of the Swiss, Canadian, US and Japanese central banks were already in collusion to overcome any nasty "turbulence" in the markets, as openly reported by none other than Bloomberg.

So, it shouldn't come as any stretch of the imagination that the same types who distort presidential polls and have the mainstream media wrapped around their little fingers should also keep stocks artificially high as long as it appears that Hillary Clinton will be elected president come November 8.

Once stocks got to extreme levels, a bell went off in the heads of the big traders, telling them to take profits, resulting in a seven-day sell-off (otherwise known as consolidation), culminating in Tuesday's near-100-point decline on the Dow.

Wednesday, the Dow just barely hung on for a small gain, as did the other indices, however, the recent highs achieved by the Dow can be seen as absolute phonies, when referenced to the Dow Jones Transportation Average (DJTA), which sold-off and rebounded like other indexes post-Brexit, but did not attain new all-time highs (for the record, neither did the NASDAQ, nor the NYSE Composite, the broadest index of US stocks).

The Transports had a good run of it, topping out at 8048.09, but were 100 points shy of the all-time record, set back in April, 2015, at 8149.00.

The same is true on the NYSE Composite (NYA), which topped out recently at 10815.43, a far cry from May 2015, when the index stood proudly at 11254.87.

Taking away from this divergence in major markets is the idea that central banks and their friends can only influence so much. They often (make that, ALWAYS) leave bits and pieces of evidence of foul play scattered about. 100 or so points on the Transportation Average and over 400 points on the Composite shows just how sloppy and misguided their adventures into manipulation of not just stocks, but perceptions, have become.

Everybody watches the Dow and S&P. The transports and composite indices, not so much, or so they believe.

Dow Jones Industrial Average
18,355.00, +41.23 (0.23%)

5,159.74, +22.00 (0.43%)

S&P 500
2,163.79, +6.76 (0.31%)

NYSE Composite
10,695.14, +34.01 (0.32%)

Wednesday, July 13, 2016

The World According To Morons

Noting the popularity of the new smart phone game, "Pokemon Go," and its coincident release with fresh all-time highs on the S&P 500 and Dow Industrial Average, it can be safely assured that the civilized nations of planet earth have entered the final stage of self-destruction, in which morons - not zombies - take over the planet.

In some ways, the process of moron-izing the population is already well underway.

We are led to believe that voting for representatives in government actually is an expression of our freedom within a working democracy. When these representatives, from the president and members of congress on down to the local code enforcement officer, are proven to be solely interested in either re-election, amassing a fortune, or advancing their career paths and not working in the public interest we are called cynical or pessimistic.

Year after year, school budgets are increased while the quality of education is diminished. Normally intelligent-looking people vote to pay more in taxes to support a system that fails on a regular basis.

We pay good money for cable TV or other entertainment delivered to our homes or workplaces to watch people who are vastly overpaid do stupid things or play sports.

Investment professionals routinely lose money on investments with our hard-earned money and yet are hailed as experts within the financial community.

The vast majority of people can't raise a decent garden, hammer a nail or turn a screw. Still, they all complain that the infrastructure of the country is falling apart.

These are but a few examples of the lunacy that has nearly completely gripped our nation. The truth is that the people running things - politicians, bankers, CEOs - aren't all that bright. In fact, most of them are morons, versed only in maximizing their incomes, pensions and perks, but we follow them and aren't too overly distraught that they make 50-70 or 500 times what we do.

We should be, but it's getting a little late in the game to do anything about it. Besides, most of your contemporaries are morons with their noses stuck on their "smart" phones, playing the latest game app.

What can be done? Plenty.

Stand up, do something you haven't tried. Fix something that's broken. Pay less for things you usually buy, or just change your buying habits a little. Save the money, a little at a time, which will grow over time into something more substantial.

Stop voting. Period. Just stop. It only encourages bad behavior by the winners and losers alike.

Spending on frivolities is maybe a favorite of yours. As you grow older, you'll discover that spending money - often money you don't already have (credit) - is a behavior to be avoided. Spending on things you don't need, but only want, can be destructive to your finances.

A way to combat the incessant need to spend, foisted upon us by the media, commerce and ad industry, is to institute no-spend days. This can start as an experiment, as in a "No-Spend Sunday," and expanded to multiple days. It's pretty easy to do. Just buy what you'll need for a few days, and then don't spend any money over the next few.

(I'm currently in the midst of a three-out-of-four no-spend days. After a successful no-spend Saturday and Sunday, I realized I needed beer and ice on Monday, so I reluctantly spent $12.76. Today, Tuesday is a no-spend no-brainer).

It's a rewarding habit, as you end up with more cash in your pocket and a sense of accomplishment, when you actually accomplished little, other than not buying anything.

But, of course, morons won't understand this simple concept.

Until next time,

-- Fearless Rick

Today's markets were horribly dull, likely the result of central banks doing most of the trading over the past few weeks, months, years(?). They decided to not goose the markets any more, since they got over the desired all-time highs, for now. That should work until the next financial non-event, like Brexit, scares out the weak hands or causes some Alphas in the herd to take profits.

The S&P traded in a 10-point range over the entire session; the Dow, 75 points; the NASDAQ range was 33 points.


At the close:
Dow Jones Industrial Average
18,372.12, +24.45 (0.13%)

NASDAQ Composite
5,005.73, -17.09 (-0.34%)

S&P 500
2,152.43, +0.29 (0.01%)

NYSE Composite
10,734.16, +7.38 (0.07%)

Tuesday, July 5, 2016

Markets Becoming More Volatile By The Day; Italian Banks, British Real Estate Hit Hard

It's getting a little scary out there in finance-land.

Following the epic exercise in individual democracy in Great Britain, the world's elitist bankers and political forces have been scampering from one impaired asset class to another, the latest and most prominent being Italian banks and British Real Estate Investment Trusts (REITs).

Since Monday, three separate REITs in Britain have shut down redemptions in the wake of panicked outflows since the Brexit vote.
On Tuesday, Standard Life and Aviva both halted redemptions in their U.K.-focused property funds, which are pooled investments that hold real estate, similar to a REIT. Later in the day, M&G Investments joined them.

As for the Italian banking sector (recall that Mario Draghi, current head of the ECB, mismanaged most of Italy's financial escapades a decade ago), FUGGEDABOUTIT!

Just today, short-selling was banned in shares of Banca Monte dei Paschi di Siena, Italy's third-largest bank. Other banks in Italy are in crisis mode, with a huge amount of non-performing loans hanging over a weakening economic picture.

Here in the new world, stocks were slammed as investors suddenly noticed that the major indices were once again closing in on all-time highs. Realizing that the fundamentals didn't support such extreme valuations, it was risk off all day, with the three biggies spending the entire session in the red.

Silver continued its impressive run, closing at 19.91 in New York (where the manipulation occurs, though lately isn't working), but gunning up as trading opened in the Far East.

Here are the results, suckers:
S&P 500: 2,088.55, -14.40 (0.68%)
Dow: 17,840.62, -108.75 (0.61%)
NASDAQ: 4,822.90, -39.67 (0.82%)

Crude Oil 46.65 +0.11% Gold 1,364.10 +0.40% EUR/USD 1.1061 -0.05% 10-Yr Bond 1.37 -6.11% Corn 356.75 -0.35% Copper 2.18 -0.21% Silver 20.28 +1.87% Natural Gas 2.78 +0.43% Russell 2000 1,139.45 -1.50% VIX 15.58 +5.48% BATS 1000 20,677.17 0.00% GBP/USD 1.2961 -0.45% USD/JPY 101.1910 -0.51%

Brexit Losses Erased; SIlver Soars To Near $20 Per Ounce

From Friday, July 1:

U.S. Treasuries advanced accompanied by a stimulus-fueled rally in European debt that pressured regional yields to new record lows. Treasuries were not far behind with demand pressuring the 30-yr yield to a fresh record low of 2.189% while the 10-yr yield hit 1.382%, pausing just above an all-time low of 1.381% that was notched four years ago. The 2-yr note posted a slight loss while the 5-yr note ended flat.

Silver closed in NY at 19.75 (+11.25% - best week since Aug 2013).

For the Week Ended 7/1:

Dow: +548.62 (+3.15%)
S&P 500: +65.54 (+3.22%)
NASDAQ: +154.59 (+3.25%)

Friday's Results:
S&P 500: 2,102.95, +4.09 (0.19%)
Dow: 17,949.37, +19.38 (0.11%)
NASDAQ: 4,862.57, +19.89 (0.41%)

Crude Oil 49.28 +1.97% Gold 1,344.90 +1.84% EUR/USD 1.1135 +0.35% 10-Yr Bond 1.46 -2.15% Corn 368.00 -0.88% Copper 2.22 +1.18% Silver 19.85 +6.62% Natural Gas 2.99 +2.12% Russell 2000 1,156.77 +0.42% VIX 14.77 -5.50% BATS 1000 20,677.17 0.00% GBP/USD 1.3269 -0.10% USD/JPY 102.5180 -0.80%

Thursday, June 30, 2016

Stocks Regain Nearly All Brexit Losses, But Silver Tells Another Tale

While the maintainers of the status quo managed to nearly erase all of the losses from Friday and Monday due to Brexit, there is an outlier which Money Daily has referenced in the past, and its name is silver.

Gold being the choice of elitists and very rich people worldwide, it gets most of the attention in the financial press, after stocks, of course. Silver is regarded largely as an afterthought by the all-powerful, but it has been, throughout human history, an essential element in commerce, trade and capital accumulation, and today, it outpaced every other asset class by a wide margin, closing in New York at a very favorable price of $18.695, the best closing price since September of 2014.

While other assets have been languishing or found range-bound, silver has forged ahead by a nifty 35% year-to-date.

As a monetary metal, silver has no equal in terms of affordability and value for the common man or woman. The recent rise will no doubt spur further demand and subsequent gains.

Silver's rise signals a threat to phony fiat money and the monopoly of gold as a store of value. It may also be presaging a new monetary order, one in which the general populace will not be thought of as chattel.


Brexit Didn't Matter After All:
S&P 500: 2,098.86, +28.09 (1.36%)
Dow: 17,929.99, +235.31 (1.33%)
NASDAQ: 4,842.67, +63.43 (1.33%)

Crude Oil 48.39 -2.99% Gold 1,325.10 -0.14% EUR/USD 1.1101 -0.22% 10-Yr Bond 1.4880 +0.74% Corn 372.75 -2.68% Copper 2.20 +0.87% Silver 18.84 +2.38% Natural Gas 2.92 +2.10% Russell 2000 1,151.92 +1.79% VIX 15.78 -5.17% BATS 1000 20,677.17 0.00% GBP/USD 1.3312 -0.92% USD/JPY 103.2700 +0.34%

Wednesday, June 29, 2016

Throwing Caution To The Wind, Stocks Power Higher

Stocks surged worldwide for the second straight day as investors seem determined to make Brexit an afterthought.

They're probably correct in their assessment, as, following the initial panic selling, the reality that an orderly exit from the EU by the UK will be an ongoing process.

Stocks in the US remain largely rangebound, since breaking through to new all-time highs would seem boorish and gaudy, which is why it is completely possible.

With every passing political, emotional, and economic event, the will of investors of equities continues to defy basic common sense and rudimentary risk caution. A side effect, or perhaps a direct one, is that short sellers have been thoroughly routed for the umpteenth time. Covering by shorts has been a bloody bath the past two session.

Mind the Gap.

Carry On.

In case you haven't noticed, with today's gain to 18.38, silver is up a whopping 33% YTD, from a December 31, 2015 close of 13.82.

S&P 500: 2,069.62, +33.53 (1.65%)
Dow: 17,679.34, +269.62 (1.55%)
NASDAQ: 4,778.10, +86.23 (1.84%)

Crude Oil 49.42 +3.28% Gold 1,324.20 +0.48% EUR/USD 1.1101 +0.23% 10-Yr Bond 1.48 +1.10% Corn 383.50 -2.73% Copper 2.19 +0.80% Silver 18.38 +2.74% Natural Gas 2.85 -1.31% Russell 2000 1,131.48 +2.18% VIX 16.90 -9.87% BATS 1000 20,677.17 0.00% GBP/USD 1.3432 +0.76% USD/JPY 102.8385 +0.10%

Reviving a prior feature, here's the Rolling Stones:

Tuesday, June 28, 2016

Stocks Rebound From Dramatic Brexit Declines; Trend Not Apparent Yet

Nothing to see here, really, as markets took Tuesday to bounce back from the losses incurred by the Brexit result.

Participants in the market will likely take today's action to suggest that the initial panic was overdone, and that Britain leaving the EU is no big deal.

The truth may be something different from the offered narrative, but it is too early to confirm any kind of trend, although the Dow, in particular, will have to do some heavy lifting to retain its prior range between 17,500 and 18,000.

New all-time highs are still within hailing distance (S&P: 2134; Dow: 18,351; NASDAQ: 5232), though they are already more than a year old, getting stale and beginning to smell moldy.

Caution is still advised when dealing with a global financial system based entirely on the promises and good faith of either governments or central banks, mostly the latter.

Tuesday Turnabout:
S&P 500: 2,036.09, +35.55 (1.78%)
Dow: 17,409.72, +269.48 (1.57%)
NASDAQ: 4,691.87, +97.42 (2.12%)

Crude Oil 47.98 +3.56% Gold 1,314.70 -0.75% EUR/USD 1.1089 +0.61% 10-Yr Bond 1.46 +0.07% Corn 394.00 -0.06% Copper 2.18 +2.56% Silver 17.81 +0.34% Natural Gas 2.88 +5.25% Russell 2000 1,106.86 +1.58% VIX 18.89 -20.80% BATS 1000 20,677.17 0.00% GBP/USD 1.3354 +1.05% USD/JPY 102.6650 +0.76%

Monday, June 27, 2016

Stormy Monday: Brexit Triggering Global Market Chaos

If the financial elites (we're looking at you Fed Governors, ECB ministers, central bankers worldwide) needed a rationale for triggering a cataclysmic collapse of global finance, they may have found their huckleberry in the British vote to leave the European Union, the Brexit, as it has become known.

Since Thursday's astonishing vote by the populace of Great Britain to exit what was once known as the European Common Merket and has morphed into a Hobbesian nightmare of Leviathan proportions known as the European Union, European Commission, European Central Bank and an amalgam of overlapping bureaucratic rules, regulations, guidelines, laws and edicts, a suddenly disunited Europe is making life miserable for masters of finance.

Stocks have been selling off at frantic paces since the verdict of the Brits, with uncertainty the keynote of the ongoing dialogue.

While the NIKKEI responded in heroic fashion on Monday, gaining 357 points, stock indices in Europe and the US were dragged down through the week's opening session, with more on the plate.

Whether Brexit is the absolute catalyst for systemic financial collapse is too early to tell, though it has certainly - to this point - served as an adequate warning shot.

Worth knowing is that the general financial condition of the world's developed and emerging economies has not been right since the first great financial shock of 2008, and efforts to repair what was broken then were akin to bandages applies to a severed artery, with the same result. The bleeding continued, and the patient never really recovered.

For eight years the global financial elites have tried to piece together a working economic narrative, to little avail and now they are faced with disintegration of their seminal project, the EU and the funny money known as euros.

Markets today were trembled by rabid selling, pushing the Dow well below its established range between 17,500 and 18,000, with the bottom falling out in dramatic fashion. All-time highs reached just over a year ago are now being viewed as unattainable, setting in motion the potential for first, a 10% correction, followed by the certainty of a full-blown bear market, which has been a long time coming.

Defining those two terms would be a matter of simplicity, if not for the vagaries of the financial lexicon. A correction may be said to be 10% of "recent" highs, and the same could be said of the bear market reading, but, if losses continue to mount, percentages may be the smallest of worries, since real dollars, euros, yen and yuan will be at stake.

With an already turbulent presidential election already underway, caution would be the preferred method of approaching finances over the following six to eight months. While many ordinary people will no doubt practice frugality and thrift in their affairs, there's some considerable doubt as to how governments and central bankers react to what are, no doubt, challenging times ahead.

Bad Bad Brits and Brexit:
S&P 500: 2,000.54, -36.87 (1.81%)
Dow: 17,140.24, -260.51 (1.50%)
NASDAQ: 4,594.44, -113.54 (2.41%)

Crude Oil 46.71 -1.95% Gold 1,329.90 +0.57% EUR/USD 1.1021 -0.19% 10-Yr Bond 1.46 -7.54% Corn 393.50 -0.19% Copper 2.13 +0.71% Silver 17.78 -0.02% Natural Gas 2.76 +2.41% Russell 2000 1,089.65 -3.36% VIX 23.43 -9.05% BATS 1000 20,677.17 0.00% GBP/USD 1.3218 -1.51% USD/JPY 102.0450 +0.25%

Thursday, June 23, 2016

Brexit/Bremain Vote Close; Results Will Affect Friday Trading

World markets have lost their collective minds over Thursday's vote for Britain to remain or leave the EU, with most of the bets on "remain."

Since bets only count at bookmaker parlors, and the votes won't be fully counted until sometime well into the early morning hours in the US, the outcome is far from decided.

Apparently, US market participants believe that the remain vote is in the bag, since stocks broke out of their well-established, three-month-long trading range today, with a massive upside move.

Just guessing, tomorrow will be interesting, but the top will not hold.

S&P 500: 2,113.32, +27.87 (1.34%)
Dow: 18,011.07, +230.24 (1.29%)
NASDAQ: 4,910.04, +76.72 (1.59%)

Crude Oil 49.27 -1.68% Gold 1,268.70 +0.44% EUR/USD 1.1310 -1.03% 10-Yr Bond 1.74 +3.20% Corn 398.50 +0.19% Copper 2.15 -0.42% Silver 17.42 +0.36% Natural Gas 2.69 -0.44% Russell 2000 1,172.22 +2.02% VIX 17.25 -18.52% BATS 1000 20,677.17 0.00% GBP/USD 1.4578 -2.92% USD/JPY 104.9800 -1.53%

Wednesday, June 22, 2016

Too Much Drama: Brexit/Bremain And US Presidential Elections Are Sideshows To Be Ignored

Kids love drama. That's why they put on little shows for their friends, parents, grandparents, other siblings. They are also expert at throwing tantrums and acting out to get their own ways on things they like and/or don't like, or want to or don't want to do.

Typically, kids don't like certain foods (think vegetables), going to bed early or being cooped up in a classroom for 6-7 hours a day from the time they're six until seventeen or eighteen. If kids decide to go on to college, they may actually find themselves in classrooms until they're 21, 22 or even longer should they decide to attend graduate school, become a lawyer, doctor, or pursue a doctorate in any field of endeavor.

Of the three things kids don't like, it can be readily assumed that at least two of them are actually good for them, even after they cease being kids. For instance, vegetables (especially the non-GMO varieties) are proven to be good for overall health, vitality and longevity. Getting a good night's sleep is also a very healthy, albeit numb in the main, activity.

Going to school for a significant percentage of one's formative years is questionable. A solid education is admirable and achievable, though what constitutes such in public schools may not exactly fit the billing. Thus, the love of and use of drama to achieve ends is largely unjustified in the case of the wants (not needs) of people under the age of 20, i.e., kids.

Expanding this concept - that drama is unjustifiable - into adult life and interaction with mass media, might be useful in assessing current events, particularly the upcoming vote or referendum (tomorrow, Thursday, June 23) on whether Great Britain sh
ould remain or leave the European Union (otherwise known as Brexit or Bremain, depending upon one's point of view) and the drawn out affair that has become a nearly two-year ritual in choosing a president in the United States.

In terms of both events, the media time allotted to examining, reporting, tweeting, broadcasting, dissecting, analyzing, and otherwise trying to understand the issues has been, in a word, excessive.

In other words, the media, obsessed with having to fill countless hours of broadcast time (radio, TV, internet) and print space (newspapers, magazines, internet) has committed the undeniable sin of "too much drama." The British and American people have been overwhelmed with "news" on the impact of the British referendum and the American election.

Both events will take place in the span of one day, yet the time allocated to it by the media exceeds that period by orders of magnitude.

Like kids, the media clamors for attention, trying to convince the public (and maybe even themselves) of the overall importance of these events. Truth is, neither will matter that much to the normal functioning of an average adult life. Whether Britain remains in the EU or not will not have dramatic impact on one's individual day-to-day activities, nor will the choice of Donald Trump or Hillary Clinton for Americans.

Mainstream media would rather have you and I and everyone else in the world glued to their TVs and radios and internet sites and newspapers non-stop, forever and ever, no matter how trivial or important the current crop of stories, analyses, and perceptions.

Most adults (and kids, too) have a routine in their lives which goes something like this: get up, clean up, work, eat, relax, sleep. In between those major activities - and it is possibly an amazing discovery that roughly a third of that time is devoted to sleeping, and maybe another third to working - people do everything else, including, in no particular order, having sex, voting, playing, raising kids, tending a garden, pursuing a hobby, reading, listening to or viewing things other than what the mainstream media spouts effusively, and a plethora of other mundane activities.

The point is that the elections fall into this diffuse area occupied in the large by "everything else." Brexit and the presidential elections barely even register on the life radar in terms of importance, meaning that whatever way it goes, individuals (aka, people) will go about their lives in largely the same way as before the "monumental" voting.

That the media devotes so much time, effort and money to events which are, in general terms, non-eventful, uncovers the abject failure of life in the information age. If you're in your 60s, for instance, you've lived through the administrations of as many as 12 presidents (Truman, Eisenhower, Kennedy, Johnson, Nixon, Ford, Carter, Reagan, George H.W. Bush, Clinton, George W. Bush, Obama) and are now on the cusp for a 13th. Whether the choice is Hillary Clinton or Donald Trump will, in the long route of history, be conspicuously inconsequential.

From that timely perspective, each and every one of these presidents has done a fair job of keeping the American public somewhat safe, secure and happy, protected the constitution to varying degrees, and also kept the American public in check, or, kept the general population from violent rebellion. On that final point, we're probably a bit more civilized these days, choosing to simply ignore the government as much as possible than openly rebelling against it. That kind of stuff generally gets one killed, maimed, or jailed, none of which are desirable outcomes.

As for the Brits, Money Daily doesn't have much interaction with our former colonial masters, but England seems to be a somewhat genteel and fair place to live. The current living residents of England will cast their votes tomorrow, but the effects will be barely noticeable, likely for decades. People will adjust and adapt.

While Brits and Yanks alike are concerned about the deterioration of their civil liberties - a theme common to the Brexit/Bremain vote and the US presidential election - it seems a slow, drawn-out process and also one to which one can adjust. Just like eating your vegetables and getting a good night's sleep are desirable and contribute to a better life, ignoring elections and votes and avoiding government at all levels is probably the most prudent behavior.

And prudence, from Aristotle to Aquinas to Pascal, is a vastly more desirable human trait than relying on personal drama to achieve one's desires.

+++++++++++ +++++++++++

Today in the markets, perhaps taking an unattributable cue from the above essay, there wasn't much in the way of panic, fear, greed, avarice, sloth, joy, or any other emotion. Equity markets were fairly flat, owing to the unforgivable media rhetoric surrounding tomorrow's Brexit/Bremain referendum having wrung out every possible trading scheme or maneuver.

Panic? Thy Name is Brexit:
S&P 500: 2,085.45, -3.45 (0.17%)
Dow: 17,780.83, -48.90 (0.27%)
NASDAQ: 4,833.32, -10.44 (0.22%)

Crude Oil 48.95 +0.20% Gold 1,269.10 -0.27% EUR/USD 1.1294 +0.41% 10-Yr Bond 1.69 -0.71% Corn 395.00 -0.32% Copper 2.13 +0.78% Silver 17.28 -0.23% Natural Gas 2.91 -2.70% Russell 2000 1,148.97 -0.42% VIX 21.22 +14.83% BATS 1000 20,677.17 0.00% GBP/USD 1.4691 +0.15% USD/JPY 104.4400 -0.32%

Tuesday, June 21, 2016

Money Daily Milestone Missed; Markets Non-Functional

So busy with other responsibilities, we didn't recognize our own milestone.

Friday's post was the 2000th post for Money Daily, just in case anybody is keeping track.

The markets were very dull in advance of Thursday's Brexit vote. Even Janet Yellen testifying to the senate today wasn't market-moving, though that's not surprising. She's easily the most incompetent speaker and communicator the Fed has ever had.

Tuesday Trauma:
S&P 500: 2,088.90, +5.65 (0.27%)
Dow: 17,829.73, +24.86 (0.14%)
NASDAQ: 4,843.76, +6.55 (0.14%)

Crude Oil 48.95 -0.85% Gold 1,271.30 -0.09% EUR/USD 1.1251 +0.02% 10-Yr Bond 1.70 +1.62% Corn 396.50 +0.06% Copper 2.12 +0.31% Silver 17.27 -0.25% Natural Gas 2.99 0.00% Russell 2000 1,153.87 -0.33% VIX 18.48 +0.60% BATS 1000 20,677.17 0.00% GBP/USD 1.4668 -0.01% USD/JPY 104.7795 0.00%

Monday, June 20, 2016

Markets Get Boost On Brexit Opposition; Fake Move Fades Throughout Trading Session

When equity prices jump suddenly at the opening bell by one percent or more - as they did today in New York - the only ones who benefit are those already in the market, with positions in the "selected" stocks.

Average investors have no opportunity to partake in the market's sudden generosity. Hedgers and speculators who played properly prior to the open are the big winners. Wealth is not created in any way, shape, or form, other than in a paper manner. It's a trade and soon enough it vanishes.

Stocks, for whatever they're worth (caveat emptor), lost half of their gains over the course of the day. The NASDAQ was up 88 points and closed up 36 and change. The S&P was up 29 points - hitting the magic 2100 spot, again - before falling throughout the day to close up a mere 12 points.

Blue chips fared no better. The Dow was up a whopping 271 points by 10:00 am EDT, but ended the day disappointing to all but the HFTs, who were no doubt front-running every single trade (it's rumored that there were a few hundred bettors in the game), ahead by only 129.

Most of the euphoria at the open was due to a media frenzy over the prospect of England remaining in the European Union. Polls have been tight, but the mainstream media continues to portray Thursday's upcoming vote as a referendum on patriotism for Brits. Vote to stay in the EU, you're a good citizen; vote to leave, or Brexit, you may just be a terrorist sympathizer.

Of course, the media spin is just that, all noise and no substance. Not only would leaving the EU be better for most working Britons, it would also send a powerful message to the status quo that their form of governing is no longer working, and must go. With so many government jobs on the line, the mainstream is pushing hard for a "stay" vote.

Last laugh of the day went to silver holders. Even the best efforts of the central bank cabal could not keep gold's little brother down, closing at 17.52 per troy ounce.

On that note, Hugo Slainas Price proposes a Silver Ruble for Russia. Interesting reading for anyone considering honest money.

Stormy Monday?
S&P 500: 2,083.25, +12.03 (0.58%)
Dow: 17,804.87, +129.71 (0.73%)
NASDAQ: 4,837.21, +36.88 (0.77%)

Crude Oil 49.17 +2.48% Gold 1,292.70 -0.16% EUR/USD 1.1307 -0.11% 10-Yr Bond 1.67 +3.21% Corn 422.75 -3.43% Copper 2.09 +1.80% Silver 17.52 +0.63% Natural Gas 2.97 +2.67% Russell 2000 1,158.05 +1.17% VIX 18.20 -6.23% BATS 1000 20,677.17 0.00% GBP/USD 1.4685 +1.52% USD/JPY 103.8550 -0.84%

Monday, June 13, 2016

Markets Lower On Brexit And Rate Hike Fears

Of the various events that might cause investors to give pause to buying stocks, or, worse, start selling en masse, the two most terrifying are probably the threat of the UK leaving the European Union (aka, Brexit) and the ongoing dialogue from the Federal Reserve concerning raising the federal funds rate.

Between the two, a 25 basis point rise in rates is likely the more disruptive, but it is also the least plausible, at least for the foreseeable future.

The Fed meets on Tuesday and Wednesday, delivering their rate announcement at 2:00 pm EDT Wednesday, after which will be a press conference with Chair Janet Yellen. This figures to be an absolute snoozer, since the May non-farm payroll disaster - a meager 38,000 jobs - pretty much put the kibosh on any rate hikes this month.

As for the Brexit, the fears are real, though the people most affected will not be Americans nor Brits, but the technocrats which comprise the burdensome bureaucratic behemoth of the EU apparatus and its various rules, regulations, and assorted busy work.

For Britain to exit the European Union would be a bold maneuver for the people of the island nation, freeing them from outside influence and regaining a smidgen of national identity, something that has been seriously eroded since adoption of the Maastricht Treaty in 1992.

What it would do for business is unknown, though Britain could conceivably become a trading partner with the EU, as is the USA and many other nations, rather than a member. Years would pass before all the effects are known and felt, but the fear mongering by Prime Minister David Cameron and others who wish to keep the status quo alive and well are largely overblown.

There, however, is the proverbial rub. The elites in control don't want to give up their power and a Brexit is seen as a direct assault on the powers that be. Common people would be wise to vote to leave the EU, eliminating a large, burdensome bureaucratic malaise. The referendum for Great Britain is to take place on Thursday, June 23. Polls show those favoring leaving and those favoring staying in the EU about even and that has people on Wall Street jumping out of their pants... for no good reason.

Fear and Loathing Monday:
S&P 500: 2,079.06, -17.01 (0.81%)
Dow: 17,732.48, -132.86 (0.74%)
NASDAQ: 4,848.44, -46.11 (0.94%)

Crude Oil 48.58 -1.00% Gold 1,287.10 +0.88% EUR/USD 1.1291 +0.37% 10-Yr Bond 1.62 -1.40% Corn 429.75 +1.60% Copper 2.05 +1.13% Silver 17.43 +0.61% Natural Gas 2.92 +0.24% Russell 2000 1,150.70 -1.14% VIX 20.97 +23.14% BATS 1000 20,677.17 0.00% GBP/USD 1.4247 +0.05% USD/JPY 106.1975 -0.56%