Stock pickers, fund managers, hedge specialists, and financial pundits will be singing the praises of the stock market for 2019, as it will go down in history as one of the better years in terms of percentage gains on the national indices.
Currently, as everybody takes a say off for Christmas, the S&P 500 is up 28.58% on the year, closing in on its best performance sine 2013 (29.60%). This is according to an interactive chart from Macrotrends.net, which shows the annual return on the S&P from 1927 to the present.
While annual returns provide a positive longterm perspective, what happens in real life is more nuanced. Not everybody buys in on January 1 and sells on December 31. Not only would that be foolish from a tax standpoint, i's hardly practical. Securities are bought and sold at varying times of the year. The trick is to time purchases and sales for maximum effect.
What the referenced chart of annual returns doesn't show, is, taking the time period from September, 2018 to the present day, the return is smaller. Those with functioning memories will recall that stocks tumbled in October and December of last year, but staged a mighty comeback in 2019. On September 17, 2018, the S&P closed at 2.929.67. On Tuesday, it stood at 3,223.38. For those who bought at that September 17 high, that comes out as a gain of 10.02% to today. Not bad, but hardly the gaudy percentage for the shorter duration.
This is not to suggest anything: that stocks are overpriced, or that a pullback is imminent, or anything, other than to illustrate that buying at the proper time results in higher returns. It also points up the fact that while the S&P, Dow and NASDAQ are all making new all-time highs presently, they were also doing so last year (and for many years before that). There's no doubt that stocks have been the all-star investments not only of the past decade, but for many decades before, and they probably will continue to be so into the future.
For holders of stocks or owners of pension funds, college funds, index funds, 401k funds, or mutual funds, this portends to be a Merry Christmas, especially if one followed the most simple constructive advice of investing: buy low, sell high.
As it should be, and to all a good night.
At the Close, Tuesday, December 24, 2019:
Dow Jones Industrial Average: 28,515.45, -36.08 (-0.13%)
NASDAQ: 8,952.88, +7.24 (+0.08%)
S&P 500: 3,223.38, -0.63 (-0.02%)
NYSE Composite: 13,895.14, -4.85 (-0.03%)
Showing posts with label Christmas. Show all posts
Showing posts with label Christmas. Show all posts
Wednesday, December 25, 2019
Tuesday, December 17, 2019
Trade Deal Sparks Rally, Enough for New All-Time Highs
Approaching year end, Monday's trading was like a toast to prosperity.
"New highs all around," was the buzz, even though stocks had taken back half of the morning's gains by the closing bell. Still, it was enough to entertain thoughts of bigger Christmas presents, newer cars, more trinkets and shiny toys for the kids and assorted other trivialities.
Phase one of the US-China trade deal was delivered, with tariffs postponed or to be curtailed by both parties to the agreement and plenty of the details still to be worked out on either side of the Pacific.
The general consensus seemed to be a relief that something concrete was finally emerging from nearly eighteen months of haranguing, harassing, arguing, pointing, posturing and persuading.
China has apparently agreed to double its import of commodities from the US, among other conditions.
Markets were pleased, but not overjoyed. Tuesday, it's back to the grind of watching the Fed and its REPO operations for the year-end "turn," a situation that has more than enough nuance to spark off volatility in either direction. There's definitely a liquidity problem somewhere, maybe everywhere, but most of the participants - the central banks, commercial banks, and primary dealers, have chosen to be pretty much mum on the details.
The Fed will just continue with extraordinary measures with daily injections via purchases and loans through the end of the year and into the next, with announced activities extending through mid-January. How much of this freshly-minted capital gets put to use in stocks is still unknown. There are funding needs and tax payments to be made, but the overall appearance is that the Fed has a handle on it and will continue to monitor it until their overnight and longer term monetary assistance is no longer needed.
And there's the rub. After these auctions, purchases, loans, and repurchases are complete and we're into 2020, will the Fed be able to turn down the spigot to more reasonable levels and eventually turn it off altogether?
That's a query for the future, unanswerable in the present.
At the Close, Monday, December 16, 2019:
Dow Jones Industrial Average: 28,235.89, +100.51 (+0.36%)
NASDAQ: 8,814.23, +79.35 (+0.91%)
S&P 500: 3,191.45, +22.65 (+0.71%)
NYSE Composite: 13,795.15, +97.81 (+0.71%)
"New highs all around," was the buzz, even though stocks had taken back half of the morning's gains by the closing bell. Still, it was enough to entertain thoughts of bigger Christmas presents, newer cars, more trinkets and shiny toys for the kids and assorted other trivialities.
Phase one of the US-China trade deal was delivered, with tariffs postponed or to be curtailed by both parties to the agreement and plenty of the details still to be worked out on either side of the Pacific.
The general consensus seemed to be a relief that something concrete was finally emerging from nearly eighteen months of haranguing, harassing, arguing, pointing, posturing and persuading.
China has apparently agreed to double its import of commodities from the US, among other conditions.
Markets were pleased, but not overjoyed. Tuesday, it's back to the grind of watching the Fed and its REPO operations for the year-end "turn," a situation that has more than enough nuance to spark off volatility in either direction. There's definitely a liquidity problem somewhere, maybe everywhere, but most of the participants - the central banks, commercial banks, and primary dealers, have chosen to be pretty much mum on the details.
The Fed will just continue with extraordinary measures with daily injections via purchases and loans through the end of the year and into the next, with announced activities extending through mid-January. How much of this freshly-minted capital gets put to use in stocks is still unknown. There are funding needs and tax payments to be made, but the overall appearance is that the Fed has a handle on it and will continue to monitor it until their overnight and longer term monetary assistance is no longer needed.
And there's the rub. After these auctions, purchases, loans, and repurchases are complete and we're into 2020, will the Fed be able to turn down the spigot to more reasonable levels and eventually turn it off altogether?
That's a query for the future, unanswerable in the present.
At the Close, Monday, December 16, 2019:
Dow Jones Industrial Average: 28,235.89, +100.51 (+0.36%)
NASDAQ: 8,814.23, +79.35 (+0.91%)
S&P 500: 3,191.45, +22.65 (+0.71%)
NYSE Composite: 13,795.15, +97.81 (+0.71%)
Friday, November 29, 2019
China Balks At US Legislation; Consumers Gear Up for Black Friday, Holiday Shopping
Wednesday saw new all-time highs all around, except the lagging NYSE Composite, which finished the day just 30 points below its record close of 13,637.02, marked on January 26, 2018.
Undeterred by potential blowback on trade negotiations due to President Trump's signing of two bills passed almost unanimously by both houses of congress, investors held steady. The bills were aimed at China's leadership, citing US support for the protesters in Hong Kong and making reference to "human rights."
China's official reaction was slow at first, but escalated on Thursday, when the US ambassador was summoned to lodge official protest by China's government and throngs of protesters took to the streets of Hong Kong to give thanks to the United States.
Since US markets were closed on Thursday for the Thanksgiving Day holiday, China's sharp rebuke will be felt on Friday's trading. Futures point to a modestly lower open as the bumpy ride toward ending the trade war between China and the US continues.
Friday's session will be shorted, with markets closing at 1:00 pm ET.
Meanwhile, shoppers have been snapping up deals online and at various retailers who sought to get the jump on Black Friday by offering deals on popular electronics, toys, and clothing as early as Wednesday. Stores may be under pressure to log high sales volumes on Black Friday and Cyber Monday (next week) since the calendar this year has allowed for the shortest possible holiday shopping season, a mere 26 days.
Since the first of November was a Friday, and Thanksgiving is always the fourth Thursday of November, this year's shopping season will be much shorter than last year's, when Thanksgiving was at its earliest possible date, the 22nd of November. A full six days shorter, this holiday shopping spree may make same store sales on a year over year basis are likely to fall short of targets for many retailers unless door-busting deals and heavy advertising can draw shoppers into stores.
Complicating matters further is Christmas falling on a Wednesday, making the last two shopping days a Monday and Tuesday, normally working days for most Americans.
With the economy in excellent shape, the short shopping season may not be much of an issue for adroit retailers, as spending per consumer is expected to be higher than last year. It remains to be seen whether consumers, the bulwark of the US economy, will respond with record-setting spending or whether relentless talk of a coming recession or the pending impeachment of President Trump will have a negative effect.
One thing is certain: Americans love to shop. It's practically the national pastime.
At the Close, Wednesday, November 27, 2019:
Dow Jones Industrial Average: 28,164.00, +42.32 (+0.15%)
NASDAQ: 8,705.17, +57.24 (+0.66%)
S&P 500: 3,153.63, +13.11 (+0.42%)
NYSE Composite: 13,607.62, +47.91 (+0.35%)
Undeterred by potential blowback on trade negotiations due to President Trump's signing of two bills passed almost unanimously by both houses of congress, investors held steady. The bills were aimed at China's leadership, citing US support for the protesters in Hong Kong and making reference to "human rights."
China's official reaction was slow at first, but escalated on Thursday, when the US ambassador was summoned to lodge official protest by China's government and throngs of protesters took to the streets of Hong Kong to give thanks to the United States.
Since US markets were closed on Thursday for the Thanksgiving Day holiday, China's sharp rebuke will be felt on Friday's trading. Futures point to a modestly lower open as the bumpy ride toward ending the trade war between China and the US continues.
Friday's session will be shorted, with markets closing at 1:00 pm ET.
Meanwhile, shoppers have been snapping up deals online and at various retailers who sought to get the jump on Black Friday by offering deals on popular electronics, toys, and clothing as early as Wednesday. Stores may be under pressure to log high sales volumes on Black Friday and Cyber Monday (next week) since the calendar this year has allowed for the shortest possible holiday shopping season, a mere 26 days.
Since the first of November was a Friday, and Thanksgiving is always the fourth Thursday of November, this year's shopping season will be much shorter than last year's, when Thanksgiving was at its earliest possible date, the 22nd of November. A full six days shorter, this holiday shopping spree may make same store sales on a year over year basis are likely to fall short of targets for many retailers unless door-busting deals and heavy advertising can draw shoppers into stores.
Complicating matters further is Christmas falling on a Wednesday, making the last two shopping days a Monday and Tuesday, normally working days for most Americans.
With the economy in excellent shape, the short shopping season may not be much of an issue for adroit retailers, as spending per consumer is expected to be higher than last year. It remains to be seen whether consumers, the bulwark of the US economy, will respond with record-setting spending or whether relentless talk of a coming recession or the pending impeachment of President Trump will have a negative effect.
One thing is certain: Americans love to shop. It's practically the national pastime.
At the Close, Wednesday, November 27, 2019:
Dow Jones Industrial Average: 28,164.00, +42.32 (+0.15%)
NASDAQ: 8,705.17, +57.24 (+0.66%)
S&P 500: 3,153.63, +13.11 (+0.42%)
NYSE Composite: 13,607.62, +47.91 (+0.35%)
Monday, November 25, 2019
WEEKEND WRAP: Stocks End Long Weekly Win Streaks; Negative Interest Rates Will Destroy Advanced Economies
Oh, Snap! Weekly winning steaks were ended with the first down week in the last eight on the NASDAQ. The S&P 500 and NYSE Composite saw their winning streaks ended at six weeks, while the Dow saw the underside of the unchanged line after four straight positives.
That US stock indices were all lower by less than one-half of one percent points up the resiliency and absurdity of the markets. Eminently malleable, stocks have been guided higher seemingly by Adam Smith's invisible hand, the one that keeps pension plans from imploding, sovereign governments from defaulting, and fiat currencies from the ruinous effects of unacceptability.
Putting into focus the NASDAQ, its seven-week upside move was the second-longest of the year. It began 2019 with an eight-week short-crushing rally on the heels of the final two weeks of 2018, which saw the index rise from the December ashes of a 6,190 low. While that 10-week advance boosted the index by some 1400 points, the most recent weekly gains accounted for only 800 additional points, although it recorded a new high in the week prior to the most recent and has backed down only slightly.
Anyone wise enough to have put all their money into the NASDAQ at the start of this year would be up a whopping 25% with just over a month remaining to add onto those lush profits. For ordinary folks locked into a buy and hold fund strategy, the gains since the highs of August-September 2018 to the present add up to only five percent. That's a more realistic figure for the real world and one which fits like a glove with the slowing pace of GDP and the generally dull data drops over these past 14 months.
While the stock markets may have the appearance of being big, bold, large and in charge, the truth is a somewhat more sobering landscape. Recovering so quickly from 20% losses has kept the investing public soothed and subdued, the politics of passive investing intact, and the wheels of industry churning, albeit at a lower crunch rate.
While stocks took this brief pre-holiday pause, interest rates were moving in the same direction, only with quickened pace. Negative interest rates rode across the plain of developed nations (Europe, Japan), suggesting that US treasuries were underpriced. Indeed, the long end of the curve was where most of the drama occurred, with the 30-year bond trimmed 21 basis points - from 2.41% to 2.22% - since November 8 (10 trading days). The 10-year note shed 17 basis points, slumping from 1.84% to 1.77% over the same period.
That's a trend sure to continue, as it represents a massive carry trade for investors outside the US. With yields in their native nations prefaced with minus signs, your bold-thinking French, German, Swiss, or Japanese investor is afforded a nearly risk-free two percent or more on money that otherwise would be eroded over time if held in sovereign securities. It's a neat trick that only the biggest and richest can perform. The rest of the population is unwittingly blinded by the stagnation and destruction ongoing behind the scenes.
Only a savvy few see negative interest rates for what they really are: a devious central bank device designed to wind down the fiat currency regime. In thirty to fifty years, the euro, yen, pound and even the dollar will be remnants of the industrial and information ages, replaced by something, we hope. while that may sound like a distant projection into the future, anybody in their 20s, 30s, or 40s might be best to be scared to death, because currency death-watches and funerals are morbid events played out over long periods of time.
Those of advanced age may better survive the utterly deflationary effects of negative interest rates and the impending currency decapitation in lower prices on everyday goods, but saving for retirement might best be measured in canned goods and precious metals instead of scraps of paper with important people on them or digitized numerical amounts on smart phone screens.
For many, the future is going to be destroyed before it arrives.
That's right. The world as it is now known will be a vastly different place in 2050 and it's unlikely to be prettier unless one has made the proper preparations into hard assets that will maintain value over harder times. Keeping up with the Joneses will be replaced by outrunning the Zombies. Fuel, food, water, shelter, and arable land - which, by the way, can be had on the cheap in some areas - are life-sustaining. Debt will be repudiated and rejected by a class of people similar to those of the depression era, whose lives were ruined by the influence of a currency they did not control, one which held neither value nor promise for a generation after 1929.
In case one is unconvinced of the effects of negative interest rates, just consider the math. Most pension plans in developed nations are already underfunded and have targets of six or seven percent annual gains written into their accountancy. If the best one can expect is two percent or less, a long-term shortfall is not only inevitable, it is assured.
All of this occurs over a long period of time, not all at once, but the effects on economies will nevertheless be devastating. Pension plans will not fail nor will sovereign debt default outright, but like rows of dominoes falling in super-slow motion, major currencies and first-world economies will gradually, inexorably decline and self-destruct.
Ah, but you say, these are negative thoughts marring the cheery landscape of the holidays.
Nay, if you get coal in your stockings this Christmas, consider yourself lucky. At least you will stay warm over the coming long winter.
At the Close, Friday, November 22, 2019:
Dow Jones Industrial Average: 27,875.62, +109.32 (+0.39%)
NASDAQ: 8,519.88, +13.67 (+0.16%)
S&P 500: 3,110.29, +6.75 (+0.22%0
NYSE Composite: 13,440.95, +34.55 (+0.26%)
For the week:
Dow: -129.27 (-0.46%)
NASDAQ: -20.94 (-0.25%)
S&P 500: -10.17 (-0.335)
NYSE Composite: -52.01 (-0.39%)
That US stock indices were all lower by less than one-half of one percent points up the resiliency and absurdity of the markets. Eminently malleable, stocks have been guided higher seemingly by Adam Smith's invisible hand, the one that keeps pension plans from imploding, sovereign governments from defaulting, and fiat currencies from the ruinous effects of unacceptability.
Putting into focus the NASDAQ, its seven-week upside move was the second-longest of the year. It began 2019 with an eight-week short-crushing rally on the heels of the final two weeks of 2018, which saw the index rise from the December ashes of a 6,190 low. While that 10-week advance boosted the index by some 1400 points, the most recent weekly gains accounted for only 800 additional points, although it recorded a new high in the week prior to the most recent and has backed down only slightly.
Anyone wise enough to have put all their money into the NASDAQ at the start of this year would be up a whopping 25% with just over a month remaining to add onto those lush profits. For ordinary folks locked into a buy and hold fund strategy, the gains since the highs of August-September 2018 to the present add up to only five percent. That's a more realistic figure for the real world and one which fits like a glove with the slowing pace of GDP and the generally dull data drops over these past 14 months.
While the stock markets may have the appearance of being big, bold, large and in charge, the truth is a somewhat more sobering landscape. Recovering so quickly from 20% losses has kept the investing public soothed and subdued, the politics of passive investing intact, and the wheels of industry churning, albeit at a lower crunch rate.
While stocks took this brief pre-holiday pause, interest rates were moving in the same direction, only with quickened pace. Negative interest rates rode across the plain of developed nations (Europe, Japan), suggesting that US treasuries were underpriced. Indeed, the long end of the curve was where most of the drama occurred, with the 30-year bond trimmed 21 basis points - from 2.41% to 2.22% - since November 8 (10 trading days). The 10-year note shed 17 basis points, slumping from 1.84% to 1.77% over the same period.
That's a trend sure to continue, as it represents a massive carry trade for investors outside the US. With yields in their native nations prefaced with minus signs, your bold-thinking French, German, Swiss, or Japanese investor is afforded a nearly risk-free two percent or more on money that otherwise would be eroded over time if held in sovereign securities. It's a neat trick that only the biggest and richest can perform. The rest of the population is unwittingly blinded by the stagnation and destruction ongoing behind the scenes.
Only a savvy few see negative interest rates for what they really are: a devious central bank device designed to wind down the fiat currency regime. In thirty to fifty years, the euro, yen, pound and even the dollar will be remnants of the industrial and information ages, replaced by something, we hope. while that may sound like a distant projection into the future, anybody in their 20s, 30s, or 40s might be best to be scared to death, because currency death-watches and funerals are morbid events played out over long periods of time.
Those of advanced age may better survive the utterly deflationary effects of negative interest rates and the impending currency decapitation in lower prices on everyday goods, but saving for retirement might best be measured in canned goods and precious metals instead of scraps of paper with important people on them or digitized numerical amounts on smart phone screens.
For many, the future is going to be destroyed before it arrives.
That's right. The world as it is now known will be a vastly different place in 2050 and it's unlikely to be prettier unless one has made the proper preparations into hard assets that will maintain value over harder times. Keeping up with the Joneses will be replaced by outrunning the Zombies. Fuel, food, water, shelter, and arable land - which, by the way, can be had on the cheap in some areas - are life-sustaining. Debt will be repudiated and rejected by a class of people similar to those of the depression era, whose lives were ruined by the influence of a currency they did not control, one which held neither value nor promise for a generation after 1929.
In case one is unconvinced of the effects of negative interest rates, just consider the math. Most pension plans in developed nations are already underfunded and have targets of six or seven percent annual gains written into their accountancy. If the best one can expect is two percent or less, a long-term shortfall is not only inevitable, it is assured.
All of this occurs over a long period of time, not all at once, but the effects on economies will nevertheless be devastating. Pension plans will not fail nor will sovereign debt default outright, but like rows of dominoes falling in super-slow motion, major currencies and first-world economies will gradually, inexorably decline and self-destruct.
Ah, but you say, these are negative thoughts marring the cheery landscape of the holidays.
Nay, if you get coal in your stockings this Christmas, consider yourself lucky. At least you will stay warm over the coming long winter.
At the Close, Friday, November 22, 2019:
Dow Jones Industrial Average: 27,875.62, +109.32 (+0.39%)
NASDAQ: 8,519.88, +13.67 (+0.16%)
S&P 500: 3,110.29, +6.75 (+0.22%0
NYSE Composite: 13,440.95, +34.55 (+0.26%)
For the week:
Dow: -129.27 (-0.46%)
NASDAQ: -20.94 (-0.25%)
S&P 500: -10.17 (-0.335)
NYSE Composite: -52.01 (-0.39%)
Thursday, January 10, 2019
Retail Woes Subdued By Dip Buyers; Stocks Continue New Year Rally
Stocks have been on quite a tear since Christmas, a move that is strangely similar to hmmmm... last January.
How did that turn out?
Since the big downdraft of December, which culminated in a major splashdown on Christmas Eve, the Dow, NASDAQ and S&P 500 have staged a rally that is remarkable if only for its vacuousness. The only reasonable rationale for the recovery rally is that stocks were down so much, they looked like bargains. Oddly enough, many of these same stocks - names like Amazon (AMZN), Apple (AAPL) and Facebook (FB) - were being unloaded like cabbage off a produce truck just weeks ago.
These companies aren't doing any better than they were in November or December, nor is the economy. Even worse, the government shutdown, which began just before the markets bottomed, has continued, its effects so far minimized. The shutdown only affects about a quarter of "non-essential" federal operations, so it has not been a major headache for many. In a month or two, however, even if the shutdown ends soon, there will be some material and psychological damage to the economy, that's without a doubt. Plans were changed, the federal employees who were either furloughed or working without pay had problems making ends meet, and the general populace grimaced, frowned, and variously expressed disgust at the government's dysfunction.
So, the choice is whether to engage in the buying or await a better entry point, or, since stocks are up broadly in the nearly three weeks since Christmas, go short.
For now, the waiting game may be the most prudent, unless one has an economic itch that is in need of a scratch, especially since today's action saw a heavy downdraft at the open due to failures in the retail space, particularly Macy's (M) and Kohl's (KSS), both of which reported disappointing same store sales over the holidays.
Macy's was sacrificed to the tune of a 17% decline on the day, while Kohl's, down nearly 10% early, finished with a loss that was half that, thanks to the dip buyers de jour.
If this continues, all stocks will eventually be bought, at some price, regardless of fundamentals. Certainly, Macy's is now going to be seen as ripe for the plucking by somebody.
Dow Jones Industrial Average January Scorecard:
At the Close, Thursday, January 10, 2019:
Dow Jones Industrial Average: 24,001.92, +122.80 (+0.51%)
NASDAQ: 6,986.07, +28.99 (+0.42%)
S&P 500: 2,596.64, +11.68 (+0.45%)
NYSE Composite: 11,839.31, +60.89 (+0.52%)
How did that turn out?
Since the big downdraft of December, which culminated in a major splashdown on Christmas Eve, the Dow, NASDAQ and S&P 500 have staged a rally that is remarkable if only for its vacuousness. The only reasonable rationale for the recovery rally is that stocks were down so much, they looked like bargains. Oddly enough, many of these same stocks - names like Amazon (AMZN), Apple (AAPL) and Facebook (FB) - were being unloaded like cabbage off a produce truck just weeks ago.
These companies aren't doing any better than they were in November or December, nor is the economy. Even worse, the government shutdown, which began just before the markets bottomed, has continued, its effects so far minimized. The shutdown only affects about a quarter of "non-essential" federal operations, so it has not been a major headache for many. In a month or two, however, even if the shutdown ends soon, there will be some material and psychological damage to the economy, that's without a doubt. Plans were changed, the federal employees who were either furloughed or working without pay had problems making ends meet, and the general populace grimaced, frowned, and variously expressed disgust at the government's dysfunction.
So, the choice is whether to engage in the buying or await a better entry point, or, since stocks are up broadly in the nearly three weeks since Christmas, go short.
For now, the waiting game may be the most prudent, unless one has an economic itch that is in need of a scratch, especially since today's action saw a heavy downdraft at the open due to failures in the retail space, particularly Macy's (M) and Kohl's (KSS), both of which reported disappointing same store sales over the holidays.
Macy's was sacrificed to the tune of a 17% decline on the day, while Kohl's, down nearly 10% early, finished with a loss that was half that, thanks to the dip buyers de jour.
If this continues, all stocks will eventually be bought, at some price, regardless of fundamentals. Certainly, Macy's is now going to be seen as ripe for the plucking by somebody.
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 |
| 1/10/19 | 24,001.92 | +122.80 | +674.46 |
At the Close, Thursday, January 10, 2019:
Dow Jones Industrial Average: 24,001.92, +122.80 (+0.51%)
NASDAQ: 6,986.07, +28.99 (+0.42%)
S&P 500: 2,596.64, +11.68 (+0.45%)
NYSE Composite: 11,839.31, +60.89 (+0.52%)
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%)
Sunday, December 16, 2018
Friday Meltdown Leaves Stocks Near Lowest Levels of Year; All Major Indices In Correction
After the first week of December ended in tears, there were glimmers of hope for a rebound in stocks as the clock ticked closer to Christmas and the end of the consumer shopping/spending season.
While retail sales - as especially so, online sales - continued strong, stocks suffered through another week of volatility, though it didn't actually present itself until the very end.
The Dow was up a bit over 200 points as of Thursday's close, but at the opening bell on Friday it was apparent those gains would not hold. In the end, the Dow lost nearly 500 points on the day, sent that index into correction, along with the S&P, joining the NASDAQ, NYSE Composite, and the Dow Jones Transportation Average.
The tailwinds of the recent selloff have its roots in October, when the Dow most a cumulative 1,345 points. November's gains were only 426, but the Dow is down another 1438 points in December, challenging the closing low of the year, 23,533.20 on March 23.
Besides the usual concern over profits and/or losses, financial markets have plenty of issues to keep investors up at night. There's the continuing Brexit issues, which nearly cost Prime Minister Teresa May her government, and coming up this week is the Fed's FOMC meeting in which the federal funds rate is supposed to be hiked another 25 basis points, along with the real possibility of a particle government shutdown over budget issues, primarily concerning President Trump's promised border wall, and the funding of such.
So, instead of being perplexed over dollars and cents, Wall Street seems more focused on politics and nonsense, as the relentless - mostly baseless - attacks on Mr. Trump continue to overhang every discussion policy and threaten to throw the entire country into chaos.
Form a technical point of view, stocks are in very dangerous territory. The dreaded "death cross," in which the 50-day moving average falls below the 200-day moving average, occurred last week on the S&P, had already happened in mid-November on the NYSE Composite Index, made its appearance the last day of November on the NASDAQ and is maybe two more days away from happening on the Dow.
It's a fairly obvious phenomenon, which points up near-term weakness. When both the 50 and 200-day moving averages point lower in such a condition, it doesn't take a genius to figure out that a hungry bear is roaming free in the forest.
Despite trading having been buoyant during most recent holiday seasons, this one appears to be rather different. There's a distinct possibility of a global slowdown, especially since retail sales and industrial production in China both slowed in November. While politically-oriented pundits will point to Trump's trade war with the Chinese as the culprit, the issue seems to be more complex and deep-seated than such a superficial analysis suggests. China's economy, built on massive credit expansion, ghost cities, and often spurious economic data, has been booming for 20 years and has been due for a slowdown, correction, or even recession. As is the case with the longest bull market in US history, nothing lasts forever.
Any gains in the coming weeks are likely to be eaten away rather quickly as profit-taking is followed by loss prevention. Even as the Fed raises rates, bond yields should continue trending lower as investors seek safety and shun profligate speculation.
Dow Jones Industrial Average December Scorecard:
At the Close, Friday, December 14, 2018:
Dow Jones Industrial Average: 24,100.51, -496.87 (-2.02%)
NASDAQ: 6,910.67, -159.67 (-2.26%)
S&P 500: 2,599.95, -50.59 (-1.91%)
NYSE Composite: 11,755.38, -180.82 (-1.51%)
For the Week:
Dow: -288.44 (-1.18%)
NASDAQ: -58.59 (-0.84%)
S&P 500: -33.13 (-1.26%
NYSE Composite: -186.55 (-1.56%)
While retail sales - as especially so, online sales - continued strong, stocks suffered through another week of volatility, though it didn't actually present itself until the very end.
The Dow was up a bit over 200 points as of Thursday's close, but at the opening bell on Friday it was apparent those gains would not hold. In the end, the Dow lost nearly 500 points on the day, sent that index into correction, along with the S&P, joining the NASDAQ, NYSE Composite, and the Dow Jones Transportation Average.
The tailwinds of the recent selloff have its roots in October, when the Dow most a cumulative 1,345 points. November's gains were only 426, but the Dow is down another 1438 points in December, challenging the closing low of the year, 23,533.20 on March 23.
Besides the usual concern over profits and/or losses, financial markets have plenty of issues to keep investors up at night. There's the continuing Brexit issues, which nearly cost Prime Minister Teresa May her government, and coming up this week is the Fed's FOMC meeting in which the federal funds rate is supposed to be hiked another 25 basis points, along with the real possibility of a particle government shutdown over budget issues, primarily concerning President Trump's promised border wall, and the funding of such.
So, instead of being perplexed over dollars and cents, Wall Street seems more focused on politics and nonsense, as the relentless - mostly baseless - attacks on Mr. Trump continue to overhang every discussion policy and threaten to throw the entire country into chaos.
Form a technical point of view, stocks are in very dangerous territory. The dreaded "death cross," in which the 50-day moving average falls below the 200-day moving average, occurred last week on the S&P, had already happened in mid-November on the NYSE Composite Index, made its appearance the last day of November on the NASDAQ and is maybe two more days away from happening on the Dow.
It's a fairly obvious phenomenon, which points up near-term weakness. When both the 50 and 200-day moving averages point lower in such a condition, it doesn't take a genius to figure out that a hungry bear is roaming free in the forest.
Despite trading having been buoyant during most recent holiday seasons, this one appears to be rather different. There's a distinct possibility of a global slowdown, especially since retail sales and industrial production in China both slowed in November. While politically-oriented pundits will point to Trump's trade war with the Chinese as the culprit, the issue seems to be more complex and deep-seated than such a superficial analysis suggests. China's economy, built on massive credit expansion, ghost cities, and often spurious economic data, has been booming for 20 years and has been due for a slowdown, correction, or even recession. As is the case with the longest bull market in US history, nothing lasts forever.
Any gains in the coming weeks are likely to be eaten away rather quickly as profit-taking is followed by loss prevention. Even as the Fed raises rates, bond yields should continue trending lower as investors seek safety and shun profligate speculation.
Dow Jones Industrial Average December Scorecard:
| Date | Close | Gain/Loss | Cum. G/L |
| 12/3/18 | 25,826.43 | +287.97 | +287.97 |
| 12/4/18 | 25,027.07 | -799.36 | -511.39 |
| 12/6/18 | 24,947.67 | -79.40 | -590.79 |
| 12/7/18 | 24,388.95 | -558.72 | -1149.51 |
| 12/10/18 | 24,423.26 | +34.31 | -1115.20 |
| 12/11/18 | 24,370.24 | -53.02 | -1168.22 |
| 12/12/18 | 24,527.27 | +157.03 | -1011.19 |
| 12/13/18 | 24,597.38 | +70.11 | -941.08 |
| 12/14/18 | 24,100.51 | -496.87 | -1437.95 |
At the Close, Friday, December 14, 2018:
Dow Jones Industrial Average: 24,100.51, -496.87 (-2.02%)
NASDAQ: 6,910.67, -159.67 (-2.26%)
S&P 500: 2,599.95, -50.59 (-1.91%)
NYSE Composite: 11,755.38, -180.82 (-1.51%)
For the Week:
Dow: -288.44 (-1.18%)
NASDAQ: -58.59 (-0.84%)
S&P 500: -33.13 (-1.26%
NYSE Composite: -186.55 (-1.56%)
Tuesday, December 26, 2017
Stocks Slide Into Christmas Break, But Finish Higher for the Week
Heading into the final week of 2017, stocks have been terrific performers for there year-to-date, with the major averages all having made multiple new highs throughout the annum.
With the exception of the Composite index, all the majors held the same pattern over the week leading up to Christmas, up sharply on Monday, followed by declines three of the next four days, Thursday being the odd up day. For the NYSE Composite, Wednesday was a gainer, while the other three fell.
Because of the outsize gains on Monday, all finished the week in the green, with the Composite leading the way, percentage-wise.
Though stocks have been superstars not only for the current year, but for the past nine years running, since the wicked days of the Great Financial Crisis (GFC) back in 2008-09, the past four days have been something of a disappointment, especially since the congress managed to push through a milestone tax reform bill and keep the government functioning for another month with a last-minute continuing resolution on Friday.
What may not be obvious to casual observers is just how stretched valuation have become. Year to date, the NASDAQ is up a whopping 28%, the Dow 23%, S&P 500 19%, and the NYSE Composite the laggard, up a mere 15%, a number which would be stellar most of the time.
Will stocks continue to climb in 2018. It's difficult to take a stand against stocks, but a small January pullback would not be out of the ordinary.
Anybody who sold this market short is likely eating cat food and living in a cardboard box, so it's doubtful any analyst will take a negative view heading into 2018. Someday, all of the smart guys on Wall Street are going to be wrong, but guessing what day that will be is a task for gamblers, not investors.
At the Close, Friday, December 22, 2017:
Dow: 24,754.06, -28.23 (-0.11%)
NASDAQ: 6,959.96, -5.40 (-0.08%)
S&P 500: 2,683.34, -1.23 (-0.05%)
NYSE Composite: 12,797.44, -2.77 (-0.02%)
For the Week:
Dow: +102.32 (+0.42%)
NASDAQ: +23.38 (+0.34%)
S&P 500: +7.53 (+0.28%)
NYSE Composite: +97.76 (+0.77%)
With the exception of the Composite index, all the majors held the same pattern over the week leading up to Christmas, up sharply on Monday, followed by declines three of the next four days, Thursday being the odd up day. For the NYSE Composite, Wednesday was a gainer, while the other three fell.
Because of the outsize gains on Monday, all finished the week in the green, with the Composite leading the way, percentage-wise.
Though stocks have been superstars not only for the current year, but for the past nine years running, since the wicked days of the Great Financial Crisis (GFC) back in 2008-09, the past four days have been something of a disappointment, especially since the congress managed to push through a milestone tax reform bill and keep the government functioning for another month with a last-minute continuing resolution on Friday.
What may not be obvious to casual observers is just how stretched valuation have become. Year to date, the NASDAQ is up a whopping 28%, the Dow 23%, S&P 500 19%, and the NYSE Composite the laggard, up a mere 15%, a number which would be stellar most of the time.
Will stocks continue to climb in 2018. It's difficult to take a stand against stocks, but a small January pullback would not be out of the ordinary.
Anybody who sold this market short is likely eating cat food and living in a cardboard box, so it's doubtful any analyst will take a negative view heading into 2018. Someday, all of the smart guys on Wall Street are going to be wrong, but guessing what day that will be is a task for gamblers, not investors.
At the Close, Friday, December 22, 2017:
Dow: 24,754.06, -28.23 (-0.11%)
NASDAQ: 6,959.96, -5.40 (-0.08%)
S&P 500: 2,683.34, -1.23 (-0.05%)
NYSE Composite: 12,797.44, -2.77 (-0.02%)
For the Week:
Dow: +102.32 (+0.42%)
NASDAQ: +23.38 (+0.34%)
S&P 500: +7.53 (+0.28%)
NYSE Composite: +97.76 (+0.77%)
Thursday, February 25, 2016
Tickle Me Elmo Version Of Durable Goods Sends Stocks Soaring
Reactions to this morning's January Durable Goods report ran from the mildly surprised to grossly exuberant, with the most apropos metaphor being the one in which the stock market is Christmas, the traders are children (not far from the truth) and the report was a Tickle Me Elmo doll.
The doll was immediately unwrapped, hugged and unconditionally loved by all the kids, who seemed to wish that Christmas would never end, sending the major indices solidly higher and yields on bonds noticeably lower.
It was as though the year was hard, winter came early and any present would have sufficed to ease some of the woes, though this particular gift was simply perfection, wiping away the past six weeks of anguish and anger, tears, fears and jeers. Even oil gained 2 1/2%, finishing just over $33/bbl.
For the record, the rise in durable goods was 4.9%, the best move in 10 months.
According to a one-time reading of the stock market (today), there are no longer any issues regarding ultra-low interest rates, the slowdown in China (the SSE slipped by 6.41% overnight), chaos in Europe, or the ongoing wars in Syria and Ukraine.
We know this is untrue, but today's action would have one believe that a bull market was in full gear, GDP was booming at 5% and peace had broken out around the globe. Such are the vicissitudes in a market driven solely by headlines and not by fundamentals, because, in reality, the problems have not been resolved - not the ones from last week, last month, last year, or even from 2008. The issues remain, as do the fast-buck artists populating the trading stations and computer terminals of the markets.
Tomorrow should prove more prescient, with the second estimate of 2015 4th quarter GDP hitting the wires at 8:30 am, a good hour prior to ringing the opening bell.
But today was an undoubted victory for the bulls. Let them celebrate tonight and face the music as time presses forward. The Gold Bugs and Silver Eagles continue to be constrained, shackled, handcuffed, quarantined.
Best quote of the day: "Nobody will see it coming." They usually don't.
Tickle These, Elmo:
S&P 500: 1,951.70, +21.90 (1.13%)
Dow: 16,697.29, +212.30 (1.29%)
NASDAQ: 4,582.21, +39.60 (0.87%)
Crude Oil 33.06 +2.83% Gold 1,235.30 -0.31% EUR/USD 1.1028 +0.09% 10-Yr Bond 1.6970 -2.58% Corn 360.25 -1.17% Copper 2.08 -0.86% Silver 15.15 -0.93% Natural Gas 1.79 -2.56% Russell 2000 1,031.58 +0.93% VIX 19.11 -7.77% BATS 1000 20,677.17 0.00% GBP/USD 1.3964 +0.22% USD/JPY 112.8855
The doll was immediately unwrapped, hugged and unconditionally loved by all the kids, who seemed to wish that Christmas would never end, sending the major indices solidly higher and yields on bonds noticeably lower.
It was as though the year was hard, winter came early and any present would have sufficed to ease some of the woes, though this particular gift was simply perfection, wiping away the past six weeks of anguish and anger, tears, fears and jeers. Even oil gained 2 1/2%, finishing just over $33/bbl.
For the record, the rise in durable goods was 4.9%, the best move in 10 months.
According to a one-time reading of the stock market (today), there are no longer any issues regarding ultra-low interest rates, the slowdown in China (the SSE slipped by 6.41% overnight), chaos in Europe, or the ongoing wars in Syria and Ukraine.
We know this is untrue, but today's action would have one believe that a bull market was in full gear, GDP was booming at 5% and peace had broken out around the globe. Such are the vicissitudes in a market driven solely by headlines and not by fundamentals, because, in reality, the problems have not been resolved - not the ones from last week, last month, last year, or even from 2008. The issues remain, as do the fast-buck artists populating the trading stations and computer terminals of the markets.
Tomorrow should prove more prescient, with the second estimate of 2015 4th quarter GDP hitting the wires at 8:30 am, a good hour prior to ringing the opening bell.
But today was an undoubted victory for the bulls. Let them celebrate tonight and face the music as time presses forward. The Gold Bugs and Silver Eagles continue to be constrained, shackled, handcuffed, quarantined.
Best quote of the day: "Nobody will see it coming." They usually don't.
Tickle These, Elmo:
S&P 500: 1,951.70, +21.90 (1.13%)
Dow: 16,697.29, +212.30 (1.29%)
NASDAQ: 4,582.21, +39.60 (0.87%)
Crude Oil 33.06 +2.83% Gold 1,235.30 -0.31% EUR/USD 1.1028 +0.09% 10-Yr Bond 1.6970 -2.58% Corn 360.25 -1.17% Copper 2.08 -0.86% Silver 15.15 -0.93% Natural Gas 1.79 -2.56% Russell 2000 1,031.58 +0.93% VIX 19.11 -7.77% BATS 1000 20,677.17 0.00% GBP/USD 1.3964 +0.22% USD/JPY 112.8855
Tuesday, December 24, 2013
Merry Christmas from Struggling Retail Sector, Darlene Love Baby Please Come Home
Today, somebody suggested a few ways to "run a few big retailers into bankruptcy."
Don't worry, they don't need any help. They are doing a smash-up job of it all by themselves. JCP will be the first to go; I have a choice parking spot already picked out for the "EVERYTHING MUST GO, CLOSING OUR DOORS, ALL SALES FINAL" going out of business sale at JC Pennys at the local mall (I need some new pants). But, just to be safe, don't bet the house on JCP taking down any banks. Goldman Sucks already has the real estate under many JCP stores locked and loaded.
Actually, Blockbuster already started the trend. There's a huge yellow sign on the Blockbuster near me. Can't miss it. Too bad nobody wants DVDs at anything over $2-4. There are some ebay sellers ready to swoop down and purchase all their remaining inventory for actual pennies on the dollar. 2014 will see numerous large bankruptcies, led by retailers, IMO.
Now, when these retailers start dropping like flies, the media will crow that it's because of the success of the internet (Obamacare web site not included). Net result is moar deflation... err, I mean, disinflation.
And Old Yellen will, as quietly as possible, probably by surreptitious means, increase QE to well over $100k per month, maybe buying up something like securitized student loans gone bad (video out soon).
The government will no longer want the shirts off your backs, because the shirts - sewn in Southeast Asian sweatshops by brown and yellow people who do not matter - aren't worth anything.
Usually, I'm not big on making predictions, as they're difficult to get right and most people will maim you more on your errors, rather than praise your correct calls, but I do believe bankruptcies are in order for 2014 in the retail sector, at least, and spreading to other consumer discretionary companies, maybe a couple of REITs or large mall owners (could be one and the same). More layoffs, more welfare, more SNAP, more phony government statistics, more lame excuses, more liberal apologists, and, as usual, the banks will profiteer like never before.
America has this coming, because it has ignored, squandered and/or pillaged the true wealth of the country - its land, its labor, its accumulated wealth and its populace - to save its fraudulent banking and political system.
As for the markets, the annual year-end ramping continued in Tuesday's short session.
In keeping with the spirit of the season, here's a treat from the David Letterman Show: Darlene Love singing, "Christmas, Baby Please Come Home." If this doesn't bring a tear to your eye, well, then you're either the Grinch or another old Scrooge.
Merry Christmas, and may we all survive the coming New Year!
-- Fearless Rick
DOW 16,357.55, +62.94 (+0.39%)
NASDAQ 4,155.42, +6.51 (+0.16%)
S&P 1,833.32, +5.33 (+0.29%)
10-Yr Note 98.03, -0.11 (-0.11%) Yield: 2.98%
NASDAQ Volume 763.66 Mil
NYSE Volume 1.30 Bil
Combined NYSE & NASDAQ Advance - Decline: 3550-2028
Combined NYSE & NASDAQ New highs - New lows: 587-41
WTI crude oil: 99.15, +0.24
Gold: 1,203.60, +6.60
Silver: 19.48, +0.071
Corn: 434.75, +0.50
Don't worry, they don't need any help. They are doing a smash-up job of it all by themselves. JCP will be the first to go; I have a choice parking spot already picked out for the "EVERYTHING MUST GO, CLOSING OUR DOORS, ALL SALES FINAL" going out of business sale at JC Pennys at the local mall (I need some new pants). But, just to be safe, don't bet the house on JCP taking down any banks. Goldman Sucks already has the real estate under many JCP stores locked and loaded.
Actually, Blockbuster already started the trend. There's a huge yellow sign on the Blockbuster near me. Can't miss it. Too bad nobody wants DVDs at anything over $2-4. There are some ebay sellers ready to swoop down and purchase all their remaining inventory for actual pennies on the dollar. 2014 will see numerous large bankruptcies, led by retailers, IMO.
Now, when these retailers start dropping like flies, the media will crow that it's because of the success of the internet (Obamacare web site not included). Net result is moar deflation... err, I mean, disinflation.
And Old Yellen will, as quietly as possible, probably by surreptitious means, increase QE to well over $100k per month, maybe buying up something like securitized student loans gone bad (video out soon).
The government will no longer want the shirts off your backs, because the shirts - sewn in Southeast Asian sweatshops by brown and yellow people who do not matter - aren't worth anything.
Usually, I'm not big on making predictions, as they're difficult to get right and most people will maim you more on your errors, rather than praise your correct calls, but I do believe bankruptcies are in order for 2014 in the retail sector, at least, and spreading to other consumer discretionary companies, maybe a couple of REITs or large mall owners (could be one and the same). More layoffs, more welfare, more SNAP, more phony government statistics, more lame excuses, more liberal apologists, and, as usual, the banks will profiteer like never before.
America has this coming, because it has ignored, squandered and/or pillaged the true wealth of the country - its land, its labor, its accumulated wealth and its populace - to save its fraudulent banking and political system.
As for the markets, the annual year-end ramping continued in Tuesday's short session.
In keeping with the spirit of the season, here's a treat from the David Letterman Show: Darlene Love singing, "Christmas, Baby Please Come Home." If this doesn't bring a tear to your eye, well, then you're either the Grinch or another old Scrooge.
Merry Christmas, and may we all survive the coming New Year!
-- Fearless Rick
DOW 16,357.55, +62.94 (+0.39%)
NASDAQ 4,155.42, +6.51 (+0.16%)
S&P 1,833.32, +5.33 (+0.29%)
10-Yr Note 98.03, -0.11 (-0.11%) Yield: 2.98%
NASDAQ Volume 763.66 Mil
NYSE Volume 1.30 Bil
Combined NYSE & NASDAQ Advance - Decline: 3550-2028
Combined NYSE & NASDAQ New highs - New lows: 587-41
WTI crude oil: 99.15, +0.24
Gold: 1,203.60, +6.60
Silver: 19.48, +0.071
Corn: 434.75, +0.50
Friday, December 6, 2013
November Jobs: 203,000; So, Now Good News Is Good News?
Highly anticipated all week, the November Non-farm payroll report from the BLS showed 203,000 jobs created during the month. The official unemployment rate fell to 7.0%, which, for all intents and purposes, is pretty close to not just the Fed's 6.5% target for raising interest rates, but not too distant from what is regarded as full employment at five percent unemployed.
Initially thought to be a negative if the number came in anywhere above official estimates of 185,000, index futures got ramped higher and stocks were off to the races, opening with a huge gap higher and maintaining price levels throughout the final session of the first week of December.
For the week, the Dow was down just 66.21 points; the S&P missed closing positive by a mere 0.72; and, the NASDAQ actually closed in the green for the week by 2.63 points.
Opinions varied widely about what the movement in stocks meant, based upon the potential for tapering of the bond buying program by the Fed. In general terms, the Fed now has Wall Street's tacit approval to begin winding down the $85 billion a month program as early as this month. either that, or today's trading, and all the supposed "fearful profit taking" of the first four days of the week were simply short-term momentum trades, rooted in absolutely nothing.
In any case, those who were short the market for the better part of the first four days of the week and then went long at the close on Thursday (cue insider bankster types) were big winners. Anybody who waited for the number to be released prior to the opening on Friday, ate dust.
And that, my friends, is how the game is played. Good news may very well be perceived as bad news, until the size players decide that good news is good news, after all. Pure thievery at a high level is probably the most apt description of how this week played out. A telltale sign was the absurdly low volume, especially coming in anticipation, and, on the heels of a critically "important" number.
Thank goodness, Christmas is less than three weeks away and the retailers haven't had much to say, but that card will be turned shortly, and it could be a wild one.
DOW 16,020.20, +198.69 (+1.26%)
NASDAQ 4,062.52, +29.36 (+0.73%)
S&P 1,805.09, +20.06 (+1.12%)
10-Yr Note 99.03, +0.74 (+0.76%)
NASDAQ Volume 1.49 Bil
NYSE Volume 2.74 Bil
Combined NYSE & NASDAQ Advance - Decline: 3965-1711
Combined NYSE & NASDAQ New highs - New lows: 310-112
WTI crude oil: 97.65, +0.27
Gold: 1,229.00, -2.90
Silver: 19.52, -0.047
Corn: 434.25, +0.75
Initially thought to be a negative if the number came in anywhere above official estimates of 185,000, index futures got ramped higher and stocks were off to the races, opening with a huge gap higher and maintaining price levels throughout the final session of the first week of December.
For the week, the Dow was down just 66.21 points; the S&P missed closing positive by a mere 0.72; and, the NASDAQ actually closed in the green for the week by 2.63 points.
Opinions varied widely about what the movement in stocks meant, based upon the potential for tapering of the bond buying program by the Fed. In general terms, the Fed now has Wall Street's tacit approval to begin winding down the $85 billion a month program as early as this month. either that, or today's trading, and all the supposed "fearful profit taking" of the first four days of the week were simply short-term momentum trades, rooted in absolutely nothing.
In any case, those who were short the market for the better part of the first four days of the week and then went long at the close on Thursday (cue insider bankster types) were big winners. Anybody who waited for the number to be released prior to the opening on Friday, ate dust.
And that, my friends, is how the game is played. Good news may very well be perceived as bad news, until the size players decide that good news is good news, after all. Pure thievery at a high level is probably the most apt description of how this week played out. A telltale sign was the absurdly low volume, especially coming in anticipation, and, on the heels of a critically "important" number.
Thank goodness, Christmas is less than three weeks away and the retailers haven't had much to say, but that card will be turned shortly, and it could be a wild one.
DOW 16,020.20, +198.69 (+1.26%)
NASDAQ 4,062.52, +29.36 (+0.73%)
S&P 1,805.09, +20.06 (+1.12%)
10-Yr Note 99.03, +0.74 (+0.76%)
NASDAQ Volume 1.49 Bil
NYSE Volume 2.74 Bil
Combined NYSE & NASDAQ Advance - Decline: 3965-1711
Combined NYSE & NASDAQ New highs - New lows: 310-112
WTI crude oil: 97.65, +0.27
Gold: 1,229.00, -2.90
Silver: 19.52, -0.047
Corn: 434.25, +0.75
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