As odd as the recent equity market has been, today's action ranked right up there in bizarro-land.
First, the Chicago PMI was leaked a few minutes early (which has been alleged to have happened at least twice in the past), sending stocks screaming lower. The 51.6 figure was well below estimates of 55.0, sending stocks to their lows of the day just after 10:00 am EDT, the Dow off by some 140 points. An hour later, however, all was forgotten and presumably forgiven, as the Dow briefly peaked above the flat line.
The remainder of the session had the NASDAQ modestly higher, the S&P hugging the unchanged mark and the Dow drifting about in the red.
That was until the very final minutes of the day, when the Russell 2000 rebalancing sent stocks screeching lower once again, all of the indices finishing near their lows, ending the first half of the trading year with a resounding thud.
Even though US stocks have out-performed just about every other asset class on the planet over the first six months of 2013, the last month has been quite the disappointment, June being the only down month of the year for the major averages, and the first down month for the Dow Industrials since November, 2012.
For the week, the Dow gained 110 points, down both Monday and Friday, while up sharply mid-week. The NASDAQ picked up 46 points for the week, while the S&P 500 added 13.85. Each of the indices closed out the month, the second quarter and the first half below their 50-day moving averages.
While gains in equities were easy to come by in the first half of the year, the second half holds many challenges, especially with many funds and big hitters already sitting on impressive gains. Most of the major brokerages have been diddling with second half projections, most of they of the rosy variety.
We shall see as the market opens with a holiday shortened week on July 1.
Gold reversed course from yesterday's manic selloff, while silver added more than 5% on the day, a possible market reversal for the precious metals.
Dow 14,909.60, -114.89 (0.76%)
NASDAQ 3,403.25, +1.38 (0.04%)
S&P 500 1,606.28, -6.92 (0.43%)
NYSE Composite 9,121.62, -21.94 (0.24%)
NASDAQ Volume 2,274,401,750
NYSE Volume 4,899,537,500
Combined NYSE & NASDAQ Advance - Decline: 3342-3116
Combined NYSE & NASDAQ New highs - New lows: 214-53
WTI crude oil: 96.56, -0.49
Gold: 1,231.30, +19.70
Silver: 19.57, +1.037
Showing posts with label Dow Industrials. Show all posts
Showing posts with label Dow Industrials. Show all posts
Friday, June 28, 2013
Thursday, June 27, 2013
Stocks Higher for Third Straight Session; Dow Back Above 15,000; Gold Below $1200
After Ben Bernanke scared the entire investing universe last week, his captains - Fed governors from the various districts - have been talking it back, generally saying that the economy isn't strong enough to support even a tapering of QE, which comes as welcome news to the money-hoarders on Wall Street, who like nothing better than access to capital at close to zero percent with which to play about in their rigged lottery.
So much for ever having a balanced, unstructured, free market that isn't completely held hostage to central planning by the Federal Reserve Bank. With this kind of thinking predominant, it doesn't take much in the way of analytical skills or market knowledge to profit in equities, since, it is, as they say, "the only game in town," complete with the promise of higher returns than bonds and - with the Fed keeping the monetary spigot wide open - limited downside risk.
That's it. We're back to the Fed and big banks running the show, letting savers get slaughtered because the market will not be allowed to do what it normally would: take a pause, maybe a 10-15% correction, and wipe out the mal-investments.
All this means is that it will take a total collapse of the global economy (or at least a large share of it) to get markets back into what would have been considered "normal" just a few years ago.
Zero percent interest rates are not normal. Central banks purchasing every kind of asset - in quantity - that isn't tied down is not normal. The past five years since the crash in September-October of 2008 have been an aberration and when economies return to sound fiscal and monetary practices, the collapse will be colossal, sparing nobody.
Be prepared. There's a good reason for gold and silver to be selling off dramatically while equity prices soar. The fed and their cohort central bankers cannot stop the deflationary spiral their own policies have created. Continuing a non-discount of money over time is, in itself, the root of deflation, yet the Fed seems content to put their own feet forward into the abyss.
In a nutshell, the problem lies with their downward pressure on gold, which has been in backwardation for months. Gold is collateral, meaning it is at the root of the monetary system. By artificially pressuring it ever lower, demand increases, though, because of hoarding, supply eventually becomes non-existent, all other currencies become devoid of value, thus creating the Pandora's-box-like situation where the price of gold is near nothing, but none can be purchased for fiat because all faith has been lost in currencies built on sand, leading, quite logically, to barter, the most primitive, yet most reliable, form of trade.
This is precisely where the current policy-driven, over-sensitized, can't-take-a-paper-loss, unbalanced global economy is headed. It could take as little as a month or as long as 20 years for the entire system to unwind, which is the conundrum currently facing the peoples of the planet. When it does, those barren, rice-paddy farmers in Southeast Asia will be better off than paper billionaires with nothing but broken promises, McMansions and zero productive skills, because the farmers, at least, will be able to raise their own food and have something to eat.
An eye for an eye, or, more aptly, a plot of land for an ounce of gold.
Nice message for an upbeat stock market day, huh? Keep buying into the system of lies, greed, avarice and contempt for one's fellow man and see how far that gets you. When the Dow is at 20,000 or 30,000 or higher and gold is only $500 an ounce, Adam Smith's invisible hand will come clapping down on all the broken rules of economics and crush the fiat currencies flat.
Dow 15,024.49, +114.35 (0.77%)
NASDAQ 3,401.86, +25.64 (0.76%)
S&P 500 1,613.20, +9.94 (0.62%)
NYSE Composite 9,143.55, +76.28 (0.84%)
NASDAQ Volume 1,643,086,125
NYSE Volume 3,722,540,750
Combined NYSE & NASDAQ Advance - Decline: 5311-1227
Combined NYSE & NASDAQ New highs - New lows: 218-60
WTI crude oil: 97.05, +1.55
Gold: 1,198.20, -31.60
Silver: 18.42, -0.162
So much for ever having a balanced, unstructured, free market that isn't completely held hostage to central planning by the Federal Reserve Bank. With this kind of thinking predominant, it doesn't take much in the way of analytical skills or market knowledge to profit in equities, since, it is, as they say, "the only game in town," complete with the promise of higher returns than bonds and - with the Fed keeping the monetary spigot wide open - limited downside risk.
That's it. We're back to the Fed and big banks running the show, letting savers get slaughtered because the market will not be allowed to do what it normally would: take a pause, maybe a 10-15% correction, and wipe out the mal-investments.
All this means is that it will take a total collapse of the global economy (or at least a large share of it) to get markets back into what would have been considered "normal" just a few years ago.
Zero percent interest rates are not normal. Central banks purchasing every kind of asset - in quantity - that isn't tied down is not normal. The past five years since the crash in September-October of 2008 have been an aberration and when economies return to sound fiscal and monetary practices, the collapse will be colossal, sparing nobody.
Be prepared. There's a good reason for gold and silver to be selling off dramatically while equity prices soar. The fed and their cohort central bankers cannot stop the deflationary spiral their own policies have created. Continuing a non-discount of money over time is, in itself, the root of deflation, yet the Fed seems content to put their own feet forward into the abyss.
In a nutshell, the problem lies with their downward pressure on gold, which has been in backwardation for months. Gold is collateral, meaning it is at the root of the monetary system. By artificially pressuring it ever lower, demand increases, though, because of hoarding, supply eventually becomes non-existent, all other currencies become devoid of value, thus creating the Pandora's-box-like situation where the price of gold is near nothing, but none can be purchased for fiat because all faith has been lost in currencies built on sand, leading, quite logically, to barter, the most primitive, yet most reliable, form of trade.
This is precisely where the current policy-driven, over-sensitized, can't-take-a-paper-loss, unbalanced global economy is headed. It could take as little as a month or as long as 20 years for the entire system to unwind, which is the conundrum currently facing the peoples of the planet. When it does, those barren, rice-paddy farmers in Southeast Asia will be better off than paper billionaires with nothing but broken promises, McMansions and zero productive skills, because the farmers, at least, will be able to raise their own food and have something to eat.
An eye for an eye, or, more aptly, a plot of land for an ounce of gold.
Nice message for an upbeat stock market day, huh? Keep buying into the system of lies, greed, avarice and contempt for one's fellow man and see how far that gets you. When the Dow is at 20,000 or 30,000 or higher and gold is only $500 an ounce, Adam Smith's invisible hand will come clapping down on all the broken rules of economics and crush the fiat currencies flat.
Dow 15,024.49, +114.35 (0.77%)
NASDAQ 3,401.86, +25.64 (0.76%)
S&P 500 1,613.20, +9.94 (0.62%)
NYSE Composite 9,143.55, +76.28 (0.84%)
NASDAQ Volume 1,643,086,125
NYSE Volume 3,722,540,750
Combined NYSE & NASDAQ Advance - Decline: 5311-1227
Combined NYSE & NASDAQ New highs - New lows: 218-60
WTI crude oil: 97.05, +1.55
Gold: 1,198.20, -31.60
Silver: 18.42, -0.162
Thursday, June 20, 2013
The Day After: Stocks take Biggest Losses of Year; Gold, Silver Smashed
There was no place to hide for investors of any stripe on the day after the Fed's dramatic announcement on Wednesday that it planned to reduce asset purchases later this year.
Stocks, bonds, and commodities were all priced lower, reflecting the possible reality that the world's economy would not be propped up indefinitely by the Federal reserve's money-printing schemes of quantitative easing (QE) and zero percent interest rate policy (ZIRP).
Following Wednesday afternoon's sharp selloff, Thursday quickly turned into a blood bath, with all of the major averages breaking through support at 50-day moving averages and precious metals dropping to levels not seen in roughly three years.
Godl was down nearly $100/ounce at 4:00 pm EDT, with traffic shifting from the Comex and Globex to Asian markets which are sure to feel the after-effects of the West's massive breakdown.
Despite the huge moves in equities, the major indices are still only down less than five percent from all-time closing highs made late in May, but the abruptness of the moves in all markets was an unexpected shock to portfolios everywhere.
The 10-year note hit a three-year high yield, but pulled back slightly to end the day at 2.39. The five-year also closed at multi-year highs of 1.26% and the 30-year bond finished at 3.48%, 33 basis points higher than a month ago.
Fallout from today's moves in the markets will be far-reaching and should be considered the beginning of a new paradigm, one in which interest rates will continue to rise as (and if) the economy continues to improve, a scenario not fully bought into by everyone. While housing has shown strength in recent months, higher interest rates can only slow the growth potential as home-buyers will be able to afford less for their money or may delay purchases altogether.
Gold and silver were especially hard hit, with gold finishing below the $1300 level and silver under $20 per ounce.
With no real economic data of note and earnings still two to three weeks away, the markets will have to find some kind of stabilizing catalyst in the final week of June or heading into the Independence Day holiday the first week of July, investors will find themselves truly independent... of profits, assets and good trading ideas.
Everybody knew this day of reckoning was coming, though few thought it would be so soon and appear with such ferocity. Trading volume was at the highest level of the year, significant in that tomorrow's quarterly options expirations may have been closed out earlier than most had planned, rendering tomorrow's triple-or-quadruple-witching day moot.
Advancing issues were dwarfed by decliners, which outpaced them 9-to-1. New lows exceeded new highs, 436-59.
The losses on major indices were the worst since November 7, 2012, the day after the re-election of Barack Obama. It's not just coincidence that stocks would take their biggest tumbles on the day after electing the worst president in American history (he's easily outdone GW Bush, already) and the day following the tactical blundering of the Chairman of the Federal Reserve. We are a nation of sheep led by abject morons.
Dow 14,758.32, -353.87 (2.34%)
NASDAQ 3,364.64, -78.57 (2.28%)
S&P 500 1,588.19, -40.74 (2.50%)
NYSE Composite 8,996.35, -259.36 (2.80%)
NASDAQ Volume 1,961,153,875
NYSE Volume 5,276,584,500
Combined NYSE & NASDAQ Advance - Decline: 685-5966
Combined NYSE & NASDAQ New highs - New lows: 59-436
WTI crude oil: 94.94, -3.30
Gold: 1,278.00, -96.00
Silver: 19.56, -2.063
Stocks, bonds, and commodities were all priced lower, reflecting the possible reality that the world's economy would not be propped up indefinitely by the Federal reserve's money-printing schemes of quantitative easing (QE) and zero percent interest rate policy (ZIRP).
Following Wednesday afternoon's sharp selloff, Thursday quickly turned into a blood bath, with all of the major averages breaking through support at 50-day moving averages and precious metals dropping to levels not seen in roughly three years.
Godl was down nearly $100/ounce at 4:00 pm EDT, with traffic shifting from the Comex and Globex to Asian markets which are sure to feel the after-effects of the West's massive breakdown.
Despite the huge moves in equities, the major indices are still only down less than five percent from all-time closing highs made late in May, but the abruptness of the moves in all markets was an unexpected shock to portfolios everywhere.
The 10-year note hit a three-year high yield, but pulled back slightly to end the day at 2.39. The five-year also closed at multi-year highs of 1.26% and the 30-year bond finished at 3.48%, 33 basis points higher than a month ago.
Fallout from today's moves in the markets will be far-reaching and should be considered the beginning of a new paradigm, one in which interest rates will continue to rise as (and if) the economy continues to improve, a scenario not fully bought into by everyone. While housing has shown strength in recent months, higher interest rates can only slow the growth potential as home-buyers will be able to afford less for their money or may delay purchases altogether.
Gold and silver were especially hard hit, with gold finishing below the $1300 level and silver under $20 per ounce.
With no real economic data of note and earnings still two to three weeks away, the markets will have to find some kind of stabilizing catalyst in the final week of June or heading into the Independence Day holiday the first week of July, investors will find themselves truly independent... of profits, assets and good trading ideas.
Everybody knew this day of reckoning was coming, though few thought it would be so soon and appear with such ferocity. Trading volume was at the highest level of the year, significant in that tomorrow's quarterly options expirations may have been closed out earlier than most had planned, rendering tomorrow's triple-or-quadruple-witching day moot.
Advancing issues were dwarfed by decliners, which outpaced them 9-to-1. New lows exceeded new highs, 436-59.
The losses on major indices were the worst since November 7, 2012, the day after the re-election of Barack Obama. It's not just coincidence that stocks would take their biggest tumbles on the day after electing the worst president in American history (he's easily outdone GW Bush, already) and the day following the tactical blundering of the Chairman of the Federal Reserve. We are a nation of sheep led by abject morons.
Dow 14,758.32, -353.87 (2.34%)
NASDAQ 3,364.64, -78.57 (2.28%)
S&P 500 1,588.19, -40.74 (2.50%)
NYSE Composite 8,996.35, -259.36 (2.80%)
NASDAQ Volume 1,961,153,875
NYSE Volume 5,276,584,500
Combined NYSE & NASDAQ Advance - Decline: 685-5966
Combined NYSE & NASDAQ New highs - New lows: 59-436
WTI crude oil: 94.94, -3.30
Gold: 1,278.00, -96.00
Silver: 19.56, -2.063
Thursday, March 28, 2013
Cyprus Banks Re-Open; S&P Makes New All-Time High
Not certain which of these two historic events will eventually bear more weight, but the banks in Cyprus opened at noon (Cyprus time) on Thursday after being shuttered for more than two weeks and the S&P made an all-time closing high.
For investors, the S&P event is a watershed moment, capping a long bull run of just over four years that began at 666 on the index and now closes nearly 100 points better.
For the citizens of Cyprus, the events of the past two weeks and the reopening of the banks today will have great weight, but in the opposite direction. Now that the banking situation in the Mediterranean island nation are more or less "normalized" - with uninsured depositors (over 100,000 euros) likely to lose 40% or more of their deposits - and the country headed directly into a depression, the contagion, for now, limited, though anybody with large deposits in any European bank has to be walking on eggshells presently.
The limits for Cypriots are stiff: withdrawals from banks are limited to 300 euros per day; checks cannot be cashed, only deposited; leaving the island with more than 3000 euros is outlawed. Welcome to the Cyprus debt prison and hotel. Payrolls are exempt from limits as the banking officials want to see money circulating to some degree, though people will be surely more frugal in their spending habits.
The Dow closed at another record high and ends the quarter (Markets are closed Friday) up 11%, marking the best quarterly returns since 1998. The S&P was right behind, clocking a 10% return for the quarter.
As the market has shown throughout the four-year bull run, news doesn't matter; it's all good on Wall Street. The Chicago Purchasing Managers' Index fell to 52.4 in March, down sharply from the 56.8 reported in February.
Initial jobless claims also cam in worse than expected, rising to 357K, up from 341K in the prior week.
Monday is the start of a new month and a new quarter, as well as being April Fool's Day, which begs the question: who will be the fools, those who exited on the record high today or those looking to squeeze more gains out of the long-running bull market?
The highs on the S&P are nominal ones, slightly above levels hit in 2000 and 2007, more commonly known as a triple top.
It's never a good idea to buy high, because you're likely to end up selling lower, but it's really tough to bet against Ben Bernanke and the Fed printing presses churning out $85 billion a month in free money. The sprinters are far ahead at the moment, but investing is more of a marathon. And, don't forget, this rally has been built not only on quickly depreciating greenbacks but on horrifyingly low volume. Additionally, the advance-Decline line has been exhibiting much less breadth than one would normally associate with a raging bull.
Pick your poison, but don't keep all your eggs in one basket.
Happy Easter!
Dow 14,578.54, +52.38 (0.36%)
NASDAQ 3,267.52, +11.00 (0.34%)
S&P 500 1,569.19, +6.34 (0.41%)
NYSE Composite 9,106.83, +36.38 (0.40%)
NASDAQ Volume 1,555,418,875.00
NYSE Volume 3,481,085,250
Combined NYSE & NASDAQ Advance - Decline: 3865-2537
Combined NYSE & NASDAQ New highs - New lows: 557-32
WTI crude oil: 97.23, +0.65
Gold: 1,594.80, -11.40
Silver: 28.32, -0.289
For investors, the S&P event is a watershed moment, capping a long bull run of just over four years that began at 666 on the index and now closes nearly 100 points better.
For the citizens of Cyprus, the events of the past two weeks and the reopening of the banks today will have great weight, but in the opposite direction. Now that the banking situation in the Mediterranean island nation are more or less "normalized" - with uninsured depositors (over 100,000 euros) likely to lose 40% or more of their deposits - and the country headed directly into a depression, the contagion, for now, limited, though anybody with large deposits in any European bank has to be walking on eggshells presently.
The limits for Cypriots are stiff: withdrawals from banks are limited to 300 euros per day; checks cannot be cashed, only deposited; leaving the island with more than 3000 euros is outlawed. Welcome to the Cyprus debt prison and hotel. Payrolls are exempt from limits as the banking officials want to see money circulating to some degree, though people will be surely more frugal in their spending habits.
The Dow closed at another record high and ends the quarter (Markets are closed Friday) up 11%, marking the best quarterly returns since 1998. The S&P was right behind, clocking a 10% return for the quarter.
As the market has shown throughout the four-year bull run, news doesn't matter; it's all good on Wall Street. The Chicago Purchasing Managers' Index fell to 52.4 in March, down sharply from the 56.8 reported in February.
Initial jobless claims also cam in worse than expected, rising to 357K, up from 341K in the prior week.
Monday is the start of a new month and a new quarter, as well as being April Fool's Day, which begs the question: who will be the fools, those who exited on the record high today or those looking to squeeze more gains out of the long-running bull market?
The highs on the S&P are nominal ones, slightly above levels hit in 2000 and 2007, more commonly known as a triple top.
It's never a good idea to buy high, because you're likely to end up selling lower, but it's really tough to bet against Ben Bernanke and the Fed printing presses churning out $85 billion a month in free money. The sprinters are far ahead at the moment, but investing is more of a marathon. And, don't forget, this rally has been built not only on quickly depreciating greenbacks but on horrifyingly low volume. Additionally, the advance-Decline line has been exhibiting much less breadth than one would normally associate with a raging bull.
Pick your poison, but don't keep all your eggs in one basket.
Happy Easter!
Dow 14,578.54, +52.38 (0.36%)
NASDAQ 3,267.52, +11.00 (0.34%)
S&P 500 1,569.19, +6.34 (0.41%)
NYSE Composite 9,106.83, +36.38 (0.40%)
NASDAQ Volume 1,555,418,875.00
NYSE Volume 3,481,085,250
Combined NYSE & NASDAQ Advance - Decline: 3865-2537
Combined NYSE & NASDAQ New highs - New lows: 557-32
WTI crude oil: 97.23, +0.65
Gold: 1,594.80, -11.40
Silver: 28.32, -0.289
Thursday, March 7, 2013
Another Day, Another Dow Record
Until further notice, just figure on stocks gaining about one percent per week on the major indices. There seems to be no impediment to rising equity asset prices and there is a great deal of support for prices at these levels.
Don't count on tomorrow's non-farm payroll data to make any difference at all; the experts are predicting a gain of about 160,000 jobs in February, pretty much in line with Wednesday's ADP report.
The Russell 2000 set an all-time high today, and the S&P 500 is just about 20 points from cracking the champagne on a new record top. That event could be any time within the next two to four weeks and it is one which investors are eyeing with some skepticism as it is a much broader average than the Dow Industrials.
Party on, but not like it's 1999, because 2000 was not a pretty year.
Best guess has Dow 15,000 in sight by the end of the year, possibly much sooner, unless there is some wild geo-political event or sudden reversal of fortune coming out of the blue, but betting on black swans has not been fruitful the past four years.
There's probably never been a safer environment for short-term traders. Stocks are on an unmistakable flight path to new highs.
Dow 14,329.49, +33.25 (0.23%)
NASDAQ 3,232.09, +9.72 (0.30%)
S&P 500 1,544.26, +2.80 (0.18%)
NYSE Composite 9,013.36, +16.39 (0.18%)
NASDAQ Volume 1,647,033,000
NYSE Volume 3,871,534,750
Combined NYSE & NASDAQ Advance - Decline: 3862-2586
Combined NYSE & NASDAQ New highs - New lows: 420-18
WTI crude oil: 91.56, +1.13
Gold: 1,575.10, +0.20
Silver: 28.81, +0.005
Don't count on tomorrow's non-farm payroll data to make any difference at all; the experts are predicting a gain of about 160,000 jobs in February, pretty much in line with Wednesday's ADP report.
The Russell 2000 set an all-time high today, and the S&P 500 is just about 20 points from cracking the champagne on a new record top. That event could be any time within the next two to four weeks and it is one which investors are eyeing with some skepticism as it is a much broader average than the Dow Industrials.
Party on, but not like it's 1999, because 2000 was not a pretty year.
Best guess has Dow 15,000 in sight by the end of the year, possibly much sooner, unless there is some wild geo-political event or sudden reversal of fortune coming out of the blue, but betting on black swans has not been fruitful the past four years.
There's probably never been a safer environment for short-term traders. Stocks are on an unmistakable flight path to new highs.
Dow 14,329.49, +33.25 (0.23%)
NASDAQ 3,232.09, +9.72 (0.30%)
S&P 500 1,544.26, +2.80 (0.18%)
NYSE Composite 9,013.36, +16.39 (0.18%)
NASDAQ Volume 1,647,033,000
NYSE Volume 3,871,534,750
Combined NYSE & NASDAQ Advance - Decline: 3862-2586
Combined NYSE & NASDAQ New highs - New lows: 420-18
WTI crude oil: 91.56, +1.13
Gold: 1,575.10, +0.20
Silver: 28.81, +0.005
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