Stocks took a breather Thursday, ending a four-day win streak on the Dow, after Bank of America posted second quarter results which saw their profit cut in half from a year ago.
That wasn't the only news to cross the tape on Thursday. Morgan Stanley's (MS) net income came in at an record $3.2 billion for the quarter, against the $2.2 billion the bank earned a year earlier and the $1.8 billian that had been expected by analysts in a Bloomberg poll.
Morgan Stanley’s investment bank had trading revenues up 68 percent, including a 168 percent increase in fixed income revenues, while investment banking fees were up 39 percent year on year.
Credit loss reserves were not of particular concern for the firm, posting just $239 million, as compared to consumer banks like JP Morgan Chase and Bank of America, which put aside multiple billions to shield against expected defaults on mortgages, credit cards and auto loans.
Overall, it was a banner week for the big banks, as all except Wells Fargo turned profits amid the confusion and government shutdowns stemming from the coronavirus.
Main Street businesses, which suffered the brunt of government action, must be looking at the banking sector with a jaundiced eye. While many small businesses were shut down for lengthy periods, the banks hauled in money as the stock market rallied wildly. Many of the small businesses - particularly retail, restaurant, health and beauty, and fitness establishments - will never reopen. Their silver lining will come with bankruptcy filings, where they will tell the banks that their loans will not be repaid.
While not a rosy picture for either side, the banks will manage to recoup some of their losses if they wish to claim real estate or significant assets in court proceedings from the broke businesses and sell them off in fire sales to the highest bidders, if any are to be found.
Vulture investors are sharpening their claws at the prospect of hundreds of thousands of commercial establishments and billions of dollars worth of salvage assets hitting the auction blocks at pennines on the dollar.
When the crisis is finally put to rest at some unknowable future date the retail landscape of urban and suburban America will be changed forever. Gone will be the majority of boutique retail shops and family-run restaurants.
If the future pans out according to the plan set out by the Federal Reserve, federal and state governments, it will belong to Amazon, Wal-Mart and Target and dining out will offer a choice between KFC, Taco Bell, and McDonald's.
Chains such as Cheesecake Factory, Buffalo Wild Wings and Applebee's may or may not survive, dependent upon how much longer the public feels compelled to submit to the madness of government mandates.
According to the loan loss reserves posted by the likes of Citi (C), Wells Fargo (WFC), JP Morgan Chase (JPM) and Bank of America (BAC), losses are mounting, but have yet to reach critical levels. Defaults on commercial and residential mortgages will take months and years to sort out, along with personal bankruptcies, credit card, and auto lease and loan defaults.
Thanks to the actions by the Federal Reserve, the banks appear solvent and well-capitalized for now, but that may change, dependent upon two primary factors: 1) the degree and length of government mandates on lockdowns, mask-wearing and social distancing, and, 2) the November elections for president, senate and house of representatives.
No matter the case, a deep and long depression appears all but certain.
At the Close, Thursday, July 16, 2020:
Dow: 26,734.71, -135.39 (-0.50%)
NASDAQ: 10,473.83, -76.67 (-0.73%)
S&P 500: 3,215.57, -10.99 (-0.34%)
NYSE: 12,350.11, -41.19 (-0.33%)
Showing posts with label Citi. Show all posts
Showing posts with label Citi. Show all posts
Friday, July 17, 2020
Wednesday, April 8, 2020
Turnaround Tuesday Wipes Out Massive Stock Gains; Oil Lower; Gold and Silver Nearly Unobtainable
Turnaround Tuesday certainly lived up to its advance billing as stocks performed a midday about-face, giving up expansive gains - the Dow gave up over 900 points from its intraday peak - to end near the flatline, only the NYSE Composite finishing in the black.
With a massive gap up at the open, equities were riding the crest of Monday's monstrous wave of buying, on the false hope that the worst of the coronavirus pandemic was behind them. At 11:25 am ET, when New York City announced its death toll for the prior day as the highest one-day total to date with 731 fresh corpses, bringing the state total number of coronavirus fatalities to 5,489, surpassing those lost on 9/11, a wave of gloom descended on Wall Street and in trading offices worldwide. Once the news circulated, stocks embarked upon an afternoon of desperate selling.
Whatever it is that fuels the animal spirits of the investor class, it is misplaced and widely mis-pricing stocks presently, and has been for much of the past 11 years. Now that stock buybacks are no longer going to spike the punch in lower Manhattan, the Fed has stepped in with a variety show of programs and debt options, none of which will eventually be proven sufficient to stem the coming tide of lowered expectations, defaults, earnings misses and downright deplorable economic data.
All the Fed is doing is throwing more bad money atop a raging fire. They cannot print enough money globally to stop the coming self-inflicted Greater Depression, though they will surely blame everything on COVID-19, the convenient scapegoat.
Now that stocks have briefly recovered from the March selloff, all of the programs brought to light by the Federal Reserve will be viewed skeptically, as real values make their return to the former fantasy world of finance. Instead of the Dow resting comfortably above 22,000, the true value, when all is said and done will be much closer to 12,000 and likely far lower.
At current levels, the major indices are still higher than they were in 2007, before the Great Financial Crisis nearly wiped out the global economy. The ongoing crisis will assure that everybody loses, particularly the Baby Boomer generation, which was forced into stocks by the Fed's insistence on interest rates near zero for almost all of the current century.
Portfolios which were valued as retirement savings are going up in smoke and they will continue to do so as the crisis and antecedent solutions tear to shreds the dreams and aspirations of the enormous, aging generation. Unless one has already departed the stock market, anticipated losses will be catastrophic.
Elsewhere, bond yields ticked slightly higher on Tuesday. Gold and silver remain in a nascent bull market, as a global scramble for precious metals has left major dealers with dwindling or already depleted stock. Spot and futures prices are diverging in gold, but that's not even the real story, as premiums are going through the roof for gold and silver bars and coins. If one is fortunate enough to find a dealer with goods for sale, wait times for delivery are now averaging a month for silver in quantity, and five to 10 days for gold.
In times of panic, precious metals are desirous as a hedge against catastrophic circumstance, but, already, many have arrived at the decision to acquire such stock too late as prices have become unaffordable and physical delivery unobtainable.
On the oil front, the spasm of price hikes from last week has faded badly, with WTI crude down again, backing into a $24 handle per barrel. As they say in the trade, it's a fluid situation.
Finally, and this is not to be taken lightly, an astute commentator on a popular financial website posted the following cryptic message:
At the Close, Tuesday, April 7, 2020:
Dow Jones Industrial Average: 22,653.86, -26.13 (-0.12%)
NASDAQ: 7,887.26, -25.98 (-0.33%)
S&P 500: 2,659.41, -4.27 (-0.16%)
NYSE: 10,537.04, +21.80 (+0.21%)
With a massive gap up at the open, equities were riding the crest of Monday's monstrous wave of buying, on the false hope that the worst of the coronavirus pandemic was behind them. At 11:25 am ET, when New York City announced its death toll for the prior day as the highest one-day total to date with 731 fresh corpses, bringing the state total number of coronavirus fatalities to 5,489, surpassing those lost on 9/11, a wave of gloom descended on Wall Street and in trading offices worldwide. Once the news circulated, stocks embarked upon an afternoon of desperate selling.
Whatever it is that fuels the animal spirits of the investor class, it is misplaced and widely mis-pricing stocks presently, and has been for much of the past 11 years. Now that stock buybacks are no longer going to spike the punch in lower Manhattan, the Fed has stepped in with a variety show of programs and debt options, none of which will eventually be proven sufficient to stem the coming tide of lowered expectations, defaults, earnings misses and downright deplorable economic data.
All the Fed is doing is throwing more bad money atop a raging fire. They cannot print enough money globally to stop the coming self-inflicted Greater Depression, though they will surely blame everything on COVID-19, the convenient scapegoat.
Now that stocks have briefly recovered from the March selloff, all of the programs brought to light by the Federal Reserve will be viewed skeptically, as real values make their return to the former fantasy world of finance. Instead of the Dow resting comfortably above 22,000, the true value, when all is said and done will be much closer to 12,000 and likely far lower.
At current levels, the major indices are still higher than they were in 2007, before the Great Financial Crisis nearly wiped out the global economy. The ongoing crisis will assure that everybody loses, particularly the Baby Boomer generation, which was forced into stocks by the Fed's insistence on interest rates near zero for almost all of the current century.
Portfolios which were valued as retirement savings are going up in smoke and they will continue to do so as the crisis and antecedent solutions tear to shreds the dreams and aspirations of the enormous, aging generation. Unless one has already departed the stock market, anticipated losses will be catastrophic.
Elsewhere, bond yields ticked slightly higher on Tuesday. Gold and silver remain in a nascent bull market, as a global scramble for precious metals has left major dealers with dwindling or already depleted stock. Spot and futures prices are diverging in gold, but that's not even the real story, as premiums are going through the roof for gold and silver bars and coins. If one is fortunate enough to find a dealer with goods for sale, wait times for delivery are now averaging a month for silver in quantity, and five to 10 days for gold.
In times of panic, precious metals are desirous as a hedge against catastrophic circumstance, but, already, many have arrived at the decision to acquire such stock too late as prices have become unaffordable and physical delivery unobtainable.
On the oil front, the spasm of price hikes from last week has faded badly, with WTI crude down again, backing into a $24 handle per barrel. As they say in the trade, it's a fluid situation.
Finally, and this is not to be taken lightly, an astute commentator on a popular financial website posted the following cryptic message:
I don't think any bankers will go to jail, but I assure you they will meet with other, more horrible circumstances as this all plays out.
Citi, BofA, JPM Chase, Wells, Goldman Sachs, and others are all underwater, have already been bailed out (for the past 11 years), and will soon be insolvent when millions of Americans (and a host of foreigners) default on credit cards, car loans and leases, commercial leases, student loans, personal loans, business loans, and more.
There are a lot of biblical posters around here who quote Revelations and such, but they are off the mark. Judgement Day for the major commercial banks was delayed in 2008-09, but, when the full temper of anger from the American public is released - and that is not far off - their branches will be firebombed, their insurance cancelled, their stocks worth less than zero.
They've had it coming and whether they've calculated the enormity of unintended consequences or not, they're going to get skewered for good.
It will be a feast like no other, and a jubilee.
At the Close, Tuesday, April 7, 2020:
Dow Jones Industrial Average: 22,653.86, -26.13 (-0.12%)
NASDAQ: 7,887.26, -25.98 (-0.33%)
S&P 500: 2,659.41, -4.27 (-0.16%)
NYSE: 10,537.04, +21.80 (+0.21%)
Sunday, March 22, 2020
WEEKEND WRAP: Wall Street Suffers Worst Week Since 2008; Economy in Shambles and Worsening; COVID-19 Wrecking Central Banks, Sovereign Governments
My, oh, my, what a week this was!
The numbers are sufficiently horrifying to speak for themselves, and they're speaking loudly.
Stocks suffered their worst week since 2008. Yes. The week just past was worse than anything since the Great Financial Crisis, and beyond that, the dramatic drop that kicked off the Great Depression in 1929, is comparable.
The three top indices had their worst weekly performances since October of 2008. The Dow dropped 17% for the week, the S&P 500 tumbled 15% and the NASDAQ lost more than 12%. Friday's losses were widespread, the biggest losers were utilities (-8.2%) and consumer staples (-6.5%).
Since the beginning of the COVID-19 crisis, the main indices are down anywhere between 30% (NASDAQ) and 35% (Dow).
Here are the stark, raving-mad numbers from the peaks to Friday's close, with dates:
Dow Industrials: peak: 29,551.42 (2/12), close 3/20: 19,173.98, net: -35.12%
NASDAQ: peak: 9,817.18 (2/19), close 3/20: 6,879.52, net: -29.92%
S&P 500: peak: 3,386.15 (2/19), close 3/20: 2,304.92, net: -31.03%
NYSE Composite: peak: 14,136.98 (2/12), close 3/20: 9,133.16, net: -35.40%
Bear in mind, these numbers are all higher than they were prior to the collapse of 2008. For reference, here are figures from August 2008, followed by the bottoms, all recorded March 9, 2009.
Dow Industrials: 8/11/09: 11,782.35; 3/9/09: 6,926.49
NASDAQ: 8/14/09: 2,453.67; 3/9/09: 1,268.64
S&P 500: 8/11/08: 1,305.32; 3/9/09: 676.53
NYSE Composite 8/6/09: 8,501.44; 3/9/09: 4,226.31
What are the implications from these figures? Pretty simple, really. Since nothing was really fixed from 2008-09 (i.e., none of the major commercial banks - Lehman and Bear Stearns notwithstanding, as they were investment banks - failed), nobody went to jail, the GFC was mostly the deflation of a housing bubble, and all of the gains in stocks were the product of buybacks and/or massive infusions of cash by the Federal Reserve, it stands to reason that stocks will fall below their lowest levels of the GFC, or sub-prime crisis.
As almost all bear markets prove, there are steep losses in the initial phase, followed by a longer, slower, gradual decline, ending in complete capitulation wherein nobody wants to be holding equity shares at any price. Stocks go bidless. There are no buyers, and that is the condition to come.
The years 2009 through early 2020 can readily be construed as what's often referred to as the "everything bubble," in which all financial assets were inflated. In the simplest terms imaginable, gains in stocks during the past 11 years were a chimera, a figment of Wall Street's great imagination and greed.
An arguable point is that all of the major corporations who feasted on stock buybacks and easy money from the Fed are bankrupt. A corollary to that is the the commercial banks - Citi, Bank of America, JP Morgan Chase, Wells Fargo, Goldman Sachs, and Morgan Stanley - being either major shareholders of the Federal Reserve and/or many major corporations are also bankrupt, insolvent, as is the Fed, which, for all intents and purposes, just creates whatever money is needed out of thin air, with no backing other than the faith of the people and institutions using their fiat currency, and that faith is fading fast.
WTI crude oil concluded its worst week since the 1991 Gulf War, settling -11%, at $22.43/bbl as part of its 29% meltdown this week.
Precious metals continued to be under pressure, even though buyers of physical gold and silver are paying high premiums and silver buyers are waiting as long as a month for deliveries from major coin and bullion dealers. Many online outlets are out of stock on almost all silver items. Scottsdale Mint is advising buyers that silver purchases are 15-20 days behind. Spot silver was as low as $11.94 per ounce, ending the week at $12.59. Prices for coins and bars are ranging between $17.50 and $25.00.
Gold traded as low as $1471.40 on the paper markets. It finished up Friday at $14.98.80
Bonds were all over the map and ended with lower yields overall. Yield on the 30-year was as low as 1.34% and as high as 1.78%. It ended the week yielding 1.55%, crashing 23 basis points on Friday. The 10-year note yield ranged from 0.73% to 1.18%, closing at 0.92%. The curve steepened through the week to 151 basis points from the 1-month bill (0.04%) to the 30-year bond, though yields are lower than ever in history. Money has lost nearly all of its time-value, especially at the shorter end. The two-year is yielding a mere 0.37%.
The point is that the Federal Reserve, with ample assistance from other central banks around the world, particularly, the ECB, BOE, BOJ, and SNB (Swiss National Bank), blew an enormous stock bubble around the world, and, since it is deflating rapidly, are trying to blow an even bigger bubble. It will not work. Never has, never will. It might for a time, but in the end there will be massive defaults from individuals all the way to sovereign states and central banks themselves. There is a limit to how much fiat currency (not money, which would be currency backed by gold or silver or some other tangible, not-easily replenished asset) and how much complexity the world can handle. We are at those limits and hastily exceeding them.
What's worse is that the governments and central banks of planet Earth are doing this to themselves, or, rather, to their sovereign citizens, who will bear the brunt of rash decisions based on faulty economics and radical monetary and fiscal policies. The Fed will print trillions of dollars. The government will run debts to the tune of 20-25% of the gross national product, if there is any left after the shutdowns, slowdowns, quarantines, and eventual rationing.
Profligate spending and corruption at the highest levels of business, finance, and government has led to an inevitable dead end, ruining lives, destroying businesses, and deflating, then inflating bogus currencies.
This is the end of the fiat currency era, but it doesn't have to be the end of the world. Money Daily has been warning its readers for more than a decade that this kind of economic carnage would eventually come, urging people to invest in hard assets, real estate, precious metals, machinery, food supplies, arable land and produce, and more.
There will be winners and losers in all of this, and it is the intention of Money Daily to provide information and instruction on how to win.
Some random links:
Gregory Mannarino says, in a very emotional and exasperating video, that it's OVER, just as Money Daily has been suggesting for weeks.
Here's a beach-loving Seeking Alpha commentator who thinks we've seen the worst.
Marketwatch notes that the Dow is on track for its worst month since the Great Depression.
Sending checks to every eligible American is being debated in congress. Treasury Secretary quipped early in the week that President Trump and he would like to get money into the hands of Americans within two weeks. The current proposals being argued in congress are looking at early April as a timeline to get money to needy citizens. That's a lot longer than two weeks, but, when the banks and hedge funds need billions and trillions of dollars from the Fed, they get it the next day, if not sooner. It's about as unfair as banks getting money at near zero interest and charging 17-29% interest on credit cards.
The house of cards (no pun intended) is tumbling down.
At the Close, Friday, March 20, 2020:
Dow Jones Industrial Average: 19,173.98, -913.21 (-4.55%)
NASDAQ: 6,879.52, -271.06 (-3.79%)
S&P 500: 2,304.92, -104.47 (-4.34%)
NYSE: 9,133.16, -328.15 (-3.47%)
For the Week:
Dow: -4011.64 (-17.30%)
NASDAQ: -995.36 (-12.64%)
S&P 500: -406.10 (-14.98%)
NYSE: -1718.82 (-15.84%)
The numbers are sufficiently horrifying to speak for themselves, and they're speaking loudly.
Stocks suffered their worst week since 2008. Yes. The week just past was worse than anything since the Great Financial Crisis, and beyond that, the dramatic drop that kicked off the Great Depression in 1929, is comparable.
The three top indices had their worst weekly performances since October of 2008. The Dow dropped 17% for the week, the S&P 500 tumbled 15% and the NASDAQ lost more than 12%. Friday's losses were widespread, the biggest losers were utilities (-8.2%) and consumer staples (-6.5%).
Since the beginning of the COVID-19 crisis, the main indices are down anywhere between 30% (NASDAQ) and 35% (Dow).
Here are the stark, raving-mad numbers from the peaks to Friday's close, with dates:
Dow Industrials: peak: 29,551.42 (2/12), close 3/20: 19,173.98, net: -35.12%
NASDAQ: peak: 9,817.18 (2/19), close 3/20: 6,879.52, net: -29.92%
S&P 500: peak: 3,386.15 (2/19), close 3/20: 2,304.92, net: -31.03%
NYSE Composite: peak: 14,136.98 (2/12), close 3/20: 9,133.16, net: -35.40%
Bear in mind, these numbers are all higher than they were prior to the collapse of 2008. For reference, here are figures from August 2008, followed by the bottoms, all recorded March 9, 2009.
Dow Industrials: 8/11/09: 11,782.35; 3/9/09: 6,926.49
NASDAQ: 8/14/09: 2,453.67; 3/9/09: 1,268.64
S&P 500: 8/11/08: 1,305.32; 3/9/09: 676.53
NYSE Composite 8/6/09: 8,501.44; 3/9/09: 4,226.31
What are the implications from these figures? Pretty simple, really. Since nothing was really fixed from 2008-09 (i.e., none of the major commercial banks - Lehman and Bear Stearns notwithstanding, as they were investment banks - failed), nobody went to jail, the GFC was mostly the deflation of a housing bubble, and all of the gains in stocks were the product of buybacks and/or massive infusions of cash by the Federal Reserve, it stands to reason that stocks will fall below their lowest levels of the GFC, or sub-prime crisis.
As almost all bear markets prove, there are steep losses in the initial phase, followed by a longer, slower, gradual decline, ending in complete capitulation wherein nobody wants to be holding equity shares at any price. Stocks go bidless. There are no buyers, and that is the condition to come.
The years 2009 through early 2020 can readily be construed as what's often referred to as the "everything bubble," in which all financial assets were inflated. In the simplest terms imaginable, gains in stocks during the past 11 years were a chimera, a figment of Wall Street's great imagination and greed.
An arguable point is that all of the major corporations who feasted on stock buybacks and easy money from the Fed are bankrupt. A corollary to that is the the commercial banks - Citi, Bank of America, JP Morgan Chase, Wells Fargo, Goldman Sachs, and Morgan Stanley - being either major shareholders of the Federal Reserve and/or many major corporations are also bankrupt, insolvent, as is the Fed, which, for all intents and purposes, just creates whatever money is needed out of thin air, with no backing other than the faith of the people and institutions using their fiat currency, and that faith is fading fast.
WTI crude oil concluded its worst week since the 1991 Gulf War, settling -11%, at $22.43/bbl as part of its 29% meltdown this week.
Precious metals continued to be under pressure, even though buyers of physical gold and silver are paying high premiums and silver buyers are waiting as long as a month for deliveries from major coin and bullion dealers. Many online outlets are out of stock on almost all silver items. Scottsdale Mint is advising buyers that silver purchases are 15-20 days behind. Spot silver was as low as $11.94 per ounce, ending the week at $12.59. Prices for coins and bars are ranging between $17.50 and $25.00.
Gold traded as low as $1471.40 on the paper markets. It finished up Friday at $14.98.80
Bonds were all over the map and ended with lower yields overall. Yield on the 30-year was as low as 1.34% and as high as 1.78%. It ended the week yielding 1.55%, crashing 23 basis points on Friday. The 10-year note yield ranged from 0.73% to 1.18%, closing at 0.92%. The curve steepened through the week to 151 basis points from the 1-month bill (0.04%) to the 30-year bond, though yields are lower than ever in history. Money has lost nearly all of its time-value, especially at the shorter end. The two-year is yielding a mere 0.37%.
The point is that the Federal Reserve, with ample assistance from other central banks around the world, particularly, the ECB, BOE, BOJ, and SNB (Swiss National Bank), blew an enormous stock bubble around the world, and, since it is deflating rapidly, are trying to blow an even bigger bubble. It will not work. Never has, never will. It might for a time, but in the end there will be massive defaults from individuals all the way to sovereign states and central banks themselves. There is a limit to how much fiat currency (not money, which would be currency backed by gold or silver or some other tangible, not-easily replenished asset) and how much complexity the world can handle. We are at those limits and hastily exceeding them.
What's worse is that the governments and central banks of planet Earth are doing this to themselves, or, rather, to their sovereign citizens, who will bear the brunt of rash decisions based on faulty economics and radical monetary and fiscal policies. The Fed will print trillions of dollars. The government will run debts to the tune of 20-25% of the gross national product, if there is any left after the shutdowns, slowdowns, quarantines, and eventual rationing.
Profligate spending and corruption at the highest levels of business, finance, and government has led to an inevitable dead end, ruining lives, destroying businesses, and deflating, then inflating bogus currencies.
This is the end of the fiat currency era, but it doesn't have to be the end of the world. Money Daily has been warning its readers for more than a decade that this kind of economic carnage would eventually come, urging people to invest in hard assets, real estate, precious metals, machinery, food supplies, arable land and produce, and more.
There will be winners and losers in all of this, and it is the intention of Money Daily to provide information and instruction on how to win.
Some random links:
Gregory Mannarino says, in a very emotional and exasperating video, that it's OVER, just as Money Daily has been suggesting for weeks.
Here's a beach-loving Seeking Alpha commentator who thinks we've seen the worst.
Marketwatch notes that the Dow is on track for its worst month since the Great Depression.
Sending checks to every eligible American is being debated in congress. Treasury Secretary quipped early in the week that President Trump and he would like to get money into the hands of Americans within two weeks. The current proposals being argued in congress are looking at early April as a timeline to get money to needy citizens. That's a lot longer than two weeks, but, when the banks and hedge funds need billions and trillions of dollars from the Fed, they get it the next day, if not sooner. It's about as unfair as banks getting money at near zero interest and charging 17-29% interest on credit cards.
The house of cards (no pun intended) is tumbling down.
At the Close, Friday, March 20, 2020:
Dow Jones Industrial Average: 19,173.98, -913.21 (-4.55%)
NASDAQ: 6,879.52, -271.06 (-3.79%)
S&P 500: 2,304.92, -104.47 (-4.34%)
NYSE: 9,133.16, -328.15 (-3.47%)
For the Week:
Dow: -4011.64 (-17.30%)
NASDAQ: -995.36 (-12.64%)
S&P 500: -406.10 (-14.98%)
NYSE: -1718.82 (-15.84%)
Wednesday, January 15, 2020
Stocks Stumble After Mnuchin Trade Remarks; JPM, Citi Earnings Solid
After Treasury Secretary Steven Mnuchin remarked that tariffs on many Chinese goods would remain in place until later in the eyar and possibly beyond, only the Dow Jones Industrial Average managed to remain positive, as the major indices erased solid gains from earlier in the day, sending stocks sliding through the afternoon.
Mnuchin maintained that import tariffs would remain in place until the US and China agree on Phase 2 of their trade arrangement. His remarks came a day before the leaders of the world's two largest economies are set to sign a Phase 1 deal on Wednesday.
Washington and Beijing agreed to suspend tariffs on $160 billion in Chinese-made cellphones, laptop computers and other goods that were due to take effect on Dec. 15, and to cut in half existing tariffs on $120 billion of other goods to 7.5%. The Phase 1 deal keeps 25% tariffs on $250 billion of other Chinese goods in place. Mnuchin did not offer a timetable for when Phase 2 would be worked out, but the consensus believes such a deal would not be fully negotiated until after the November US elections.
A formal signing of Phase 1 documents is slated for 11:30 am ET, Wednesday at the White House.
Trade and tariffs continue to be the hot topic by which to move stocks and it seems likely that trend will continue through most of - if not all of - 2020, though with lesser impact. The Chinese representatives are sure to engage in some foot-dragging, hedging that President Trump may not be around for the completion of Phase 2. For its part, the administration will be busy with the politics of a presidential election, which will divert resources and attention away from trade dealings.
Those are positive developments in the larger scheme of things. The public is weary of Democrat attempts to weaken the president or impeach him. Business leaders largely view the entire political spectrum with jaded skepticism, believing that the poorly-managed impeachment proceedings initiated by the House of Representatives is a waste of time.
Right on cue, the House will debate and then vote on a resolution to advance articles of impeachment - which were passed nearly a month ago (December 18) - on Wednesday. Normally, no such vote is needed, though this impeachment process has been anything but normal. Another vote in the House gives Democrats another opportunity to bad-mouth the president while taking attention away from the signing of the trade accord. The measure is likely to sail through along party lines, with a Senate trial to begin on Tuesday of next week (January 21).
House Majority Leader, Nancy Pelosi's stalling of the process seems to have benefitted nobody except possibly President Trump. By not immediately handing over the articles of impeachment and naming managers, Pelosi comes off looking petty, conflicted, and frankly, ridiculous.
It is widely considered that President Trump will be acquitted by the Senate in short order, allowing democrat presidential candidates Elizabeth Warren, Amy Klobuchar, and Bernie Sanders to get back on the campaign trail before the Iowa caucuses the first week of February.
Until then, some market surprises could come in the form of earnings from various companies. Mega-banks JP Morgan Chase and Citigroup reported on Tuesday, with JPM showing EPS of $2.57, which smashed expectations for $1.98. Citi boosted revenues above consensus to over $18bn while EPS came at $1.90, beyond expectations for $1.83. Wells Fargo bucked the trend, reporting earnings below consensus. Share prices for JPM and Citi were up +1.17% and +1.56%, respectively, but Wells Fargo closed lower, down -5.39%.
Prior to the opening bell Wednesday morning, Bank of America said earnings for the fourth quarter were 74 cents per share, up 5.7% from the same period last year and better than the 68 cent consensus forecast.
Goldman Sachs (GS) reporting on Wednesday morning, showed quarterly earnings of $4.69 a share, trailing the $5.56 average of estimates from analysts surveyed by Refinitiv. Net income tumbled 24 percent to $1.92 billion. Those results sent stock futures tumbling further into the red.
The FOMC is scheduled to meet the last week of January. Their meeting is scheduled for the 28th and 29th.
At the Close, Tuesday, January 14, 2020:
Dow Jones Industrial Average: 28,939.67, +32.57 (+0.11%)
NASDAQ: 9,251.33, -22.60 (-0.24%)
S&P 500: 3,283.15, -4.98 (-0.15%)
NYSE Composite: 14,037.13, -5.47 (-0.04%)
Mnuchin maintained that import tariffs would remain in place until the US and China agree on Phase 2 of their trade arrangement. His remarks came a day before the leaders of the world's two largest economies are set to sign a Phase 1 deal on Wednesday.
Washington and Beijing agreed to suspend tariffs on $160 billion in Chinese-made cellphones, laptop computers and other goods that were due to take effect on Dec. 15, and to cut in half existing tariffs on $120 billion of other goods to 7.5%. The Phase 1 deal keeps 25% tariffs on $250 billion of other Chinese goods in place. Mnuchin did not offer a timetable for when Phase 2 would be worked out, but the consensus believes such a deal would not be fully negotiated until after the November US elections.
A formal signing of Phase 1 documents is slated for 11:30 am ET, Wednesday at the White House.
Trade and tariffs continue to be the hot topic by which to move stocks and it seems likely that trend will continue through most of - if not all of - 2020, though with lesser impact. The Chinese representatives are sure to engage in some foot-dragging, hedging that President Trump may not be around for the completion of Phase 2. For its part, the administration will be busy with the politics of a presidential election, which will divert resources and attention away from trade dealings.
Those are positive developments in the larger scheme of things. The public is weary of Democrat attempts to weaken the president or impeach him. Business leaders largely view the entire political spectrum with jaded skepticism, believing that the poorly-managed impeachment proceedings initiated by the House of Representatives is a waste of time.
Right on cue, the House will debate and then vote on a resolution to advance articles of impeachment - which were passed nearly a month ago (December 18) - on Wednesday. Normally, no such vote is needed, though this impeachment process has been anything but normal. Another vote in the House gives Democrats another opportunity to bad-mouth the president while taking attention away from the signing of the trade accord. The measure is likely to sail through along party lines, with a Senate trial to begin on Tuesday of next week (January 21).
House Majority Leader, Nancy Pelosi's stalling of the process seems to have benefitted nobody except possibly President Trump. By not immediately handing over the articles of impeachment and naming managers, Pelosi comes off looking petty, conflicted, and frankly, ridiculous.
It is widely considered that President Trump will be acquitted by the Senate in short order, allowing democrat presidential candidates Elizabeth Warren, Amy Klobuchar, and Bernie Sanders to get back on the campaign trail before the Iowa caucuses the first week of February.
Until then, some market surprises could come in the form of earnings from various companies. Mega-banks JP Morgan Chase and Citigroup reported on Tuesday, with JPM showing EPS of $2.57, which smashed expectations for $1.98. Citi boosted revenues above consensus to over $18bn while EPS came at $1.90, beyond expectations for $1.83. Wells Fargo bucked the trend, reporting earnings below consensus. Share prices for JPM and Citi were up +1.17% and +1.56%, respectively, but Wells Fargo closed lower, down -5.39%.
Prior to the opening bell Wednesday morning, Bank of America said earnings for the fourth quarter were 74 cents per share, up 5.7% from the same period last year and better than the 68 cent consensus forecast.
Goldman Sachs (GS) reporting on Wednesday morning, showed quarterly earnings of $4.69 a share, trailing the $5.56 average of estimates from analysts surveyed by Refinitiv. Net income tumbled 24 percent to $1.92 billion. Those results sent stock futures tumbling further into the red.
The FOMC is scheduled to meet the last week of January. Their meeting is scheduled for the 28th and 29th.
At the Close, Tuesday, January 14, 2020:
Dow Jones Industrial Average: 28,939.67, +32.57 (+0.11%)
NASDAQ: 9,251.33, -22.60 (-0.24%)
S&P 500: 3,283.15, -4.98 (-0.15%)
NYSE Composite: 14,037.13, -5.47 (-0.04%)
Tuesday, January 5, 2016
Stocks Retrace Lows, End Positive; Gold At Inflection Point
There wasn't much to talk about on the second trading day of 2016, except that stocks managed not to fall for the second consecutive day, thanks to late-day jacking by people who apparently haven't yet gotten the memo that Buying the Dip is so 2012-2015.
Rather than investors seeking bargains, today's late action was more or less a bailout by the NY Fed or the PPT (maybe the same entity) lest people get the idea that the markets are rigged and uncertain.
Surely, economic data and downgrades of the S&P by Citi and the US economy by Duetsche Bank couldn't support the irrational failing that typified the trading on the session.
All three major indices ended the day happily in the green after retracing their lows, giving the CNBC and Bloomberg talking heads a talking point to the effect of "bouncing off yesterday's lows" and being oversold and other such rubbish that is the mainstay of financial (sic) journalism these days.
Markets are likely to gyrate around until Friday, when December non-farm payrolls are announced. In the meantime, the ADP jobs survey kicks off tomorrow prior to the bell, a harbinger of things to come. It might be interesting enough to move markets a little, but probably not by much.
More interesting was the trade in WTI crude. The slippery stuff moved under $36/barrel, finishing at $35.95. Silver ended up some change, closing the NY session at an even $14 per troy ounce. Gold also gained, ending in the US at the statistically signficant 1078.10, which is roughly the delineation between support and resistance. If stocks stumble again this week, watch the PMs take off, as they've been mired in a bear market for more than three years and are viciously oversold.
S&P 500: 2,016.71, +4.05 (0.20%)
Dow: 17,158.66, +9.72 (0.06%)
NASDAQ: 4,891.43, -11.66 (0.24%)
Rather than investors seeking bargains, today's late action was more or less a bailout by the NY Fed or the PPT (maybe the same entity) lest people get the idea that the markets are rigged and uncertain.
Surely, economic data and downgrades of the S&P by Citi and the US economy by Duetsche Bank couldn't support the irrational failing that typified the trading on the session.
All three major indices ended the day happily in the green after retracing their lows, giving the CNBC and Bloomberg talking heads a talking point to the effect of "bouncing off yesterday's lows" and being oversold and other such rubbish that is the mainstay of financial (sic) journalism these days.
Markets are likely to gyrate around until Friday, when December non-farm payrolls are announced. In the meantime, the ADP jobs survey kicks off tomorrow prior to the bell, a harbinger of things to come. It might be interesting enough to move markets a little, but probably not by much.
More interesting was the trade in WTI crude. The slippery stuff moved under $36/barrel, finishing at $35.95. Silver ended up some change, closing the NY session at an even $14 per troy ounce. Gold also gained, ending in the US at the statistically signficant 1078.10, which is roughly the delineation between support and resistance. If stocks stumble again this week, watch the PMs take off, as they've been mired in a bear market for more than three years and are viciously oversold.
S&P 500: 2,016.71, +4.05 (0.20%)
Dow: 17,158.66, +9.72 (0.06%)
NASDAQ: 4,891.43, -11.66 (0.24%)
Tuesday, October 16, 2012
Pandit Resigns from CITI; IBM Revenue Miss; Greece Talks Stall; Farm Notes
It was a busy day on Wall Street, with stocks closing at or very near their highs of the day, the two-day rally this week nearly recouping the losses from the prior week on the Dow and S&P, though the NASDAQ, hardest hit last week, has recovered only about 1/2 of its losses.
Stocks got an early boost when Coca-Cola (KO) matched earnings estimates of 50 cents per share and Johnson & Johnson (JNJ) reported third quarter earnings, excluding special items, of $1.25 per share. Analysts, on average, expected $1.21 per share. Both companies are components of the Dow Jones Industrial Average.
Goldman Sachs (GS), the nation's fifth largest bank by assets (though even though hastily granted a commercial bank charter in the midst of the 2008 financial crisis, has yet to open a single retail branch), also beat lowered estimates, citing debt investments and underwriting fees as the main profit drivers.
Industrial production grew by 0.4%, capacity utilization increased slightly from 78.2% to 78.3% in September and the CPI ratcheted up 0.6% in September, due mostly to higher food and fuel costs, which explains why the "official" core rate of an 0.1% increase excludes those necessities. On an annual basis, the September CPI translates into 7.2% inflation, which is probably less than it actually is in the new, Fed-funded world of bizarro-finance.
The big news was the abrupt departure of Citigroup CEO Vikram Pandit and COO John P. Havens, just a day after the company reported third quarter earnings. According to published reports, Citi's board of directors had been plotting Pandit's retirement for months, though Pandit himself said it was soley his decision.
Pandit's departure sent shock waves through executive offices at Fortune 500 companies and elsewhere, as apparently, there are still some BODs that are not rubber-stamping mechanisms.
Stocks got off to a fast start with most of the gains made in the morning, with small additions in the afternoon.
After the bell, IBM reported earnings in line with expectations, but missed on revenue of $24.7 billion, down from $25.8 billion in Q2, setting up for a testy open on Wednesday. Shares of Big Blue were down five points in after hours trading.
The Euro gained sharply against the dollar, boosting US shares even more as the dollar cheapened, but, in news generally sealed off from the US, Greece's talks with the troika fell apart over further austerity measures with negotiators walking out of meetings.
That late-breaking news, combined with the results from IBM and the scoring of tonight's presidential debate will set the tone for the open on Wednesday.
Farm Notes: Did you know that the agribusiness model that the large corporate farms employ (row planting and harvesting) wastes land, water and valuable resources, besides putting harmful chemicals - through the use of pesticides and fertilizers - to produce crops that are significantly less-protein rich than vegetables grown in the average backyard garden?
Also, using intensive gardening methods such as those used for centuries in France and elsewhere, the same amount of vegetables that an agribusiness farm can produce on one acre can be produced on 1/10th or less of an acre with less fertilizer, water and no pesticides.
Gardening, in America and elsewhere, isn't just about a pasttime or a hobby. It's about reclaiming the economy and moral high ground from corporations and the wasteful practices promoted by the Department of Agriculture.
Dow 13,551.78, +127.55 (0.95%)
NASDAQ 3,101.17, +36.99 (1.21%)
S&P 500 1,454.92, +14.79 (1.03%)
NYSE Composite 8,386.47, +92.97 (1.12%)
NASDAQ Volume 1,735,765,375.00
NYSE Volume 3,539,692,250
Combined NYSE & NASDAQ Advance - Decline: 3861-1630
Combined NYSE & NASDAQ New highs - New lows: 278-40
WTI crude oil: 92.09, +0.24
Gold: 1,746.30, +8.70
Silver: 32.96, +0.216
Stocks got an early boost when Coca-Cola (KO) matched earnings estimates of 50 cents per share and Johnson & Johnson (JNJ) reported third quarter earnings, excluding special items, of $1.25 per share. Analysts, on average, expected $1.21 per share. Both companies are components of the Dow Jones Industrial Average.
Goldman Sachs (GS), the nation's fifth largest bank by assets (though even though hastily granted a commercial bank charter in the midst of the 2008 financial crisis, has yet to open a single retail branch), also beat lowered estimates, citing debt investments and underwriting fees as the main profit drivers.
Industrial production grew by 0.4%, capacity utilization increased slightly from 78.2% to 78.3% in September and the CPI ratcheted up 0.6% in September, due mostly to higher food and fuel costs, which explains why the "official" core rate of an 0.1% increase excludes those necessities. On an annual basis, the September CPI translates into 7.2% inflation, which is probably less than it actually is in the new, Fed-funded world of bizarro-finance.
The big news was the abrupt departure of Citigroup CEO Vikram Pandit and COO John P. Havens, just a day after the company reported third quarter earnings. According to published reports, Citi's board of directors had been plotting Pandit's retirement for months, though Pandit himself said it was soley his decision.
Pandit's departure sent shock waves through executive offices at Fortune 500 companies and elsewhere, as apparently, there are still some BODs that are not rubber-stamping mechanisms.
Stocks got off to a fast start with most of the gains made in the morning, with small additions in the afternoon.
After the bell, IBM reported earnings in line with expectations, but missed on revenue of $24.7 billion, down from $25.8 billion in Q2, setting up for a testy open on Wednesday. Shares of Big Blue were down five points in after hours trading.
The Euro gained sharply against the dollar, boosting US shares even more as the dollar cheapened, but, in news generally sealed off from the US, Greece's talks with the troika fell apart over further austerity measures with negotiators walking out of meetings.
That late-breaking news, combined with the results from IBM and the scoring of tonight's presidential debate will set the tone for the open on Wednesday.
Farm Notes: Did you know that the agribusiness model that the large corporate farms employ (row planting and harvesting) wastes land, water and valuable resources, besides putting harmful chemicals - through the use of pesticides and fertilizers - to produce crops that are significantly less-protein rich than vegetables grown in the average backyard garden?
Also, using intensive gardening methods such as those used for centuries in France and elsewhere, the same amount of vegetables that an agribusiness farm can produce on one acre can be produced on 1/10th or less of an acre with less fertilizer, water and no pesticides.
Gardening, in America and elsewhere, isn't just about a pasttime or a hobby. It's about reclaiming the economy and moral high ground from corporations and the wasteful practices promoted by the Department of Agriculture.
Dow 13,551.78, +127.55 (0.95%)
NASDAQ 3,101.17, +36.99 (1.21%)
S&P 500 1,454.92, +14.79 (1.03%)
NYSE Composite 8,386.47, +92.97 (1.12%)
NASDAQ Volume 1,735,765,375.00
NYSE Volume 3,539,692,250
Combined NYSE & NASDAQ Advance - Decline: 3861-1630
Combined NYSE & NASDAQ New highs - New lows: 278-40
WTI crude oil: 92.09, +0.24
Gold: 1,746.30, +8.70
Silver: 32.96, +0.216
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