WEEKEND WRAP: Stocks Fall For Second Straight Week; Oil Skids; EU Seeks Digital Currency

For the second consecutive week, equity investments in big caps looked like the wrong place to be plying currency in these turbulent times. Led by the NASDAQ and S&P 500, stocks dumped in three of three of the four trading days following the Labor Day weekend. Hard hit were household tech names like Apple, Amazon, Google, Tesla, and Netflix, but bank stocks also participated in the widespread selling as did almost every other market segment.

Key elements driving the declines remained as they have for months: coronavirus, lockdowns, school and business closures, election concerns, mass protests, and occasional rioting. Adding to the mix were forest fires devastating Western states and ongoing international trade disputations, especially those between China and the United States. The EU had its own spat going with Great Britain, which has decided to chart its own course in its ongoing separation from the mainland economic bloc.

Overriding all of the usual issues was the usually-ineffective congress, which continued to flail about over any kind of relief resolution. It's not so much that the house and senate can't come to mutually-agreeable terms, it's more that as a legislative governing body they are feckless, unrepresentative, unresponsive and devoid of common sense. On capitol hill, there's little interest to come to the aid of the masses. It is almost as if, suddenly, the entire congress has re-discovered fiscal responsibility. Don't count on it, though. They just don't want to help out the American public, looking down from their preening and primping perches on the huddled minions like all tyrannical bodies are prone to do.

So, Wall Street managed to express its disapproval the only way it can, by selling, instead of buying, stocks. Ho-hum. Major indices all managed to end the week nesting at or near their 50-day moving averages, a meaningless tactic by the monied gang of crooks and thieves masquerading as America's bankers and financial genii. Stocks dare not fall below desirous levels, lest they incur the ire of the almighty Federal Reserve, of which its federal open market committee (FOMC) meets this coming week (Tuesday and Wednesday).






After all, the Fed has, following the fast crash of March, put the money people onto easy street once again via a binge-buying of virtually all outstanding debt, backstopping even the riskiest loans and hoisting up companies that should be headed to bankruptcy proceedings. Stocks cannot be allowed to lose value. Not only would that truncate the V-shaped-recovery narrative, but it would send shock waves of negative sentiment throughout the economy. The Fed will not stand for that, so it is expected to become the soul of dovishness as the coming week progresses.

So much is predicated on the Fed "put" that it had better work out to the advantage of the one-percenters. Otherwise, a hard dose of economic reality might just cause real panic, a shakeout from over-indulgent investment chasing, an abrupt end to churning, controlling, high-frequency spoofing, and a host of big money hijinks hat keep the wheels of financialization intact.

There might not be a crash, but a slow, steady decline in stock prices seems to be well underway. This second leg down won't inspire shock and awe, headlines of doom, or frightening one-day drops. It will be more like Chinese water torture: precise and deliberate, exacting excruciating dull pain over a long period.

Treasuries are catching onto the game gradually. All issuance of less than five years duration has been at the zero-bound for months and is not moving nor movable. The 10-year note took the bulk of the safety play, dropping five basis points in yield to end the week at a moribund 0.67%. The 30-year dropped four, to 1.42%.

Oil was the big "tell" of the week, losing any momentum it may have had, with WTI crude settling out at $37.33 a barrel, down 14% from its high of $43.39 on August 26. If stocks aren't willing to tell the whole story, oil, which greases the skids of the global economy is screaming a "run for the hills" signal.

As is usually the case when stocks get hit, precious metals had to be spanked as well, despite there being no correlation between stocks and gold or silver, but rather, in a sane world, an inverse relationship might apply.

Rather than taking an overt beating, gold actually gained on the week, though not by much. Closing out on September 4 at $1,933.94, it ended this week at $1,940.55. Silver actually did lose a little, trading down from $26.91 to $26.73 per ounce. Both moves in the metals were well short of one percent, which has to offer some hope for the proponents of real money, as the main stock indices fell anywhere from one to four percent on the week. There's always something good to be said about out-performance.

Here are the latest prices on eBay for common gold and silver items (numismatics excluded, shipping - often free - included):

Item: Low / High / Average / Mean
1 oz silver coin: 32.74 / 45.10 / 39.27 / 40.03
1 oz silver bar: 32.94 / 44.20 / 35.42 / 34.02
1 oz gold coin: 1,929.90 / 2,324.37 / 2,077.02 / 2,070.47
1 oz gold bar: 2,028.90 / 2,111.09 / 2,057.38 / 2,056.68






Notably, the ECB has been, and continues to explore the possibility of the creation of a central bank digital currency (CBDC). Central banks are afraid that big tech firms with their own digital currencies could shut them and government out of their monetary roles in national and international economies.

Now, wouldn't that be a crying shame. Central banks - all of them private institutions - wouldn't be able to wouldn't be able to issue currency at interest, create mountains of debt, impoverish millions of people, change interest rates at their pleasure, intervene in markets, prop up failing businesses, distort and destroy price discovery, leverage deposits as loans at 20:1, 30:1 or even more ridiculous ratios, create massive asset bubbles, stoke inflation, track and record all transactions, and generally enslave the entire global population with currencies backed by nothing but their own hot air and blind faith.

Would the world be a better place with a Bitcoin standard or even a Libra, the blockchain currency that is the brainchild of Facebook?

Perhaps, though the dangers are inherent and obvious. While Bitcoin, Etherium and all cryptocurrencies are supposedly secure - though most of them have been hacked or otherwise compromised - they're all electronic and would cease to operate at the most critical of times, when the lights go out. The same applies to Libra or any other privately-held cryptos, plus, they would be subject to the dictates of their owners, and less prone to market forces.

Blockchain-based currencies have the advantages of being stable, portable and divisible, but they are by no means a store of value. Only currencies backed by physical assets, such as gold and silver, maintain that standard. The ultimate answer trends toward diversification and convertibility, in terms of sovereign currencies backed by the natural holdings of individual nations, be it oil, gold, silver, water, energy, or whatever is the unique strength of a country.

It would be refreshing - if not preposterous to the central bankers of the world - to hear considerations of tried and true currencies backed by gold and silver rather than the perverse fascination with untested techno-centric solutions, but that, sadly, is not the case. The world is hurtling toward digital money at breakneck speed. Central banks have been plotting and planning its rollout for years and it will become reality. It will be centralized, globalized, prone to error and miscalculation, hackable, inconsistent, unstable, and likely to cause more deprivation and suffering than the world has been forced to bear through the last 50 years of the failing fiat experiment.

At the Close, Friday, September 11, 2020:
Dow: 27,665.64. +131.06 (+0.48%)
NASDAQ: 10,853.54, -66.05 (-0.60%)
S&P 500: 3,340.97, +1.78 (+0.05%)
NYSE: 12,773.04, +66.35 (+0.52%)

For the Week:
Dow: -467.67 (-1.66%)
NASDAQ: -459.59 (-4.06%)
S&P 500: -85.99 (-2.51%)
NYSE: -144.11 (-1.12%)

Stocks Flat As Lagarde Offers Inflation Policy Change in Europe

For the second consecutive day, stocks posted mediocre results, most likely a pause in the overall giant run they've been on since late September of 2019, and hardly anything over which to be concerned.

The manners in which these last two trading sessions found the same end were radically different, a chartists' dilemma in which Wednesday started on the upside before relenting late in the day and Thursday found stocks mired deep in the red, finding salvation in the afternoon.

Essentially, the indices produced an elongated "V" pattern, stretching over two sessions.

Being that the market is run by algorithms and influenced heavily by macro momentum, this recent spate of weakness is probably going to be downplayed by the uber-bulls and supported by dovish tones from the Federal Reserve along with more sloshing capital from their burgeoning balance sheet.

The Fed's FOMC convenes on Tuesday and Wednesday of next week, but the market seems uninterested in whatever they might announce, being that they will almost surely keep interest rates precisely at the present level, the federal funds rate in a sweet spot between 1.50 and 1.75 percent, good enough to attract investors to bonds and other fixed income products and not onerous enough to preclude lending to all but the least worthy.

In Europe, newly-installed ECB head, Christine Lagarde quipped about inflation, launching a review of the bank's policies and hinting that the long-standing target of two percent might be few tenths too high under the current environment of negative interest rates and slowing national economies.

Inflation in the Eurozone has been nearly non-existent since the turn of the century, last year checking in at a subdued 1.3 percent. The call for a policy review by Lagarde is a timorous one, since practically anyone with a rudimentary understanding of economics realizes that the "Japanization" of Europe is well underway and that lowering the target for inflation to 1.6 or 1.5% is just more posturing by the central bank which has no control over the forces of mass immigration, low birth rates, and over-juiced financial markets.

Perhaps Ms. Largarde is on to something, however. Could she actually be headed for an Austrian awakening in which an epiphany guides her to understanding that any inflation is unnatural in a world of sound money?

Next thing you know, she'll be calling for a new currency to replace the flawed fiat euro, one backed by gold and silver.

Surely there would be many who scoff at the idea, but, when even negative interest rates fail to produce positive results, isn't it time to stop examining policy and start critiquing the currency itself.

Partially-backed gold and silver backed money - be it digital, paper, or coinage - may not seem such a bad idea, especially to people drowning in debt.

Central bankers have engaged in lunacy for the better part of 50 years (since Nixon's closing of the gold window in 1971). Maybe it's time for sound thinking and sound money.

At the Close, Thursday, January 23, 2020:
Dow Jones Industrial Average: 29,160.09, -26.18 (-0.09%)
NASDAQ: 9,402.48, +18.71 (+0.20%)
S&P 500: 3,325.54, +3.79 (+0.11%)
NYSE: 14,102.04, -8.20 (-0.06%)

Sweden Done With Negative Rates; How Does The World Reverse Course?

From the land that gave us the Volvo and Greta Thunberg, comes news that the nation of Sweden has abandoned its five-year-long experiment with negative interest rates.

The news is actually about a week old, but, being that there was so much going on between the impeachment of President Trump, the China trade deal, and the public's general disinterest with anything not related to either the NFL or Christmas, that the Riksbank raising its overnight repo interest rate from -0.25% to 0.0% hardly warranted notice.

Nonetheless, the global response was as expected from the groupthink of the central bank community. Rates instantly rose, and a chorus of seemingly smart-sounding people recited verses calling for fiscal measures to be undertaken immediately, to counteract the anti-stimulative effect of cancelling out the negative rates that are, in turn, cancelling out currencies around the globe.

According to the central banking community, debt and spending must be promoted by governments as the bankers have done all they could do to alter the flow of goods and services and money in a positive direction. The Swedes have failed, and with that, so too the central banks of the Europe Union nations, Japan, Denmark, Hungary, and Switzerland.

What comes now is general consensus on the direction of economies and globalized financial repression. More spending must be undertaken by governments, on infrastructure, military hardware, green initiatives, social programs and anything else the politicians can get behind and garner more votes for themselves, virtue-signaling that they are the saviors of the free and not-so-free world.

Such a plan could not be concocted by a more smarmy gaggle of decrepit geezers and their enabling political hacks. The worldwide crackdown on savings was not efficient enough to erase decades of excess and misanthropic misadventures into economic dystopia. Now the banking and political community will expose the world to even more egregious profligate spending that will no doubt benefit few, mostly politicians and bankers.

While the Riksbank ponders life in the frozen wasteland formerly recognizable as a stable nation, the rest of the world trudges dangerously close to the financial abyss that negative interest rates have created. Reversing interest rates to a standard resembling something almost normal might prove a costly enterprise. After all, most corporations have been feasting upon low rates for so long, buying back their own stock and artificially raising equity share prices by a process of market starvation, a change that will ultimately cost more could very likely corrupt the process and actually foment a global recession.

Not to worry. The central bankers will no doubt have a solution for that as well while pointing their gnarly fingers the way of their political cronies as world economies lurch from bad policies to worse. With Christine Lagarde recently replacing Mario Draghi as president of the ECB, there's little doubt that the failed policies of her predecessor will be enhanced by more high-sounding rhetorical nonsense that will help speed the spiraling down of society into an inescapable morass.

Well, how about that. It's Christmas!

At the Close, Monday, December 23, 2019:
Dow Jones Industrial Average: 28,551.53, +96.44 (+0.34%)
NASDAQ: 8,945.65, +20.69 (+0.23%)
S&P 500: 3,224.01, +2.79 (+0.09%)
NYSE Composite: 13,899.99, +10.74 (+0.08%)

Follow Through for Stocks Beyond New Highs; European Pensions In Deep Trouble

After Friday's epic melt-up brought last week to a positive conclusion, traders on Monday though the diea of higher asset prices a good one, so pushed stocks to even higher all-time highs, a trend that could easily accelerate as the holiday season of irrational goodness begins.

At the bottom of rising equity valuations is the need to keep economies afloat for as long as humanly possible. By enhancing the price of stocks, asset values create the perception of wealth, though the main beneficiaries of higher asset values happen to be the top 10% of the income spread, mostly focused in the top one percent, who own the majority of equities. For the bottom 90% of the population, the effect of increased stock prices is negligible at best.

A corollary to stock market gains being the only game in town (or, There Is No Alternative, TINA) is the pain felt by savers, both individual and institutional. Pension funds have been under stress to keep assets growing. As employees retire and become not contributors, but receivers as pensioners, funds need to increase their asset base, a task made more difficult by lower and negative interest rates.

Funds have charters that require they purchase certain types of investments, making their job even more difficult, as they are forced into negative-yielding government bonds, especially in Europe, but also in the US, where the pain has yet to be felt in any real way outside of places like Detroit, which cut pension benefits massively in order to rebalance the city's finances.

Europe is already in the throes of a crisis, the latest victims being Dutch pensioners in the Netherlands, where cuts are planned or already in the works. Europe's fascination with negative interest rates have wreaked havoc in the pension universe.

A one percentage point fall in long-term interest rates will increase liabilities of a typical pension scheme by around 20 per cent, but the value of their assets would only go up by about 10 per cent, estimates Ros Altmann, a former UK pensions minister.

The current condition is nothing compared to what is coming if the ECB and member nations of the EU don't reverse course on interest rates. They are clearly having more negative consequences than anticipated when the Dutch first entertained negative yields in 2009, to be followed quickly by Japan and a slew of other European nations.

Pension problems haven't happened overnight. Money Daily was warning about them as early as 2006, and conditions have deteriorated exceedingly since then.

Don't expect the politicians and bankers to change their tune, however. As Money Daily has repeatedly noted, negative interest rates are currency killers, and they are quickly becoming much more of a destructive force than initially imagined.

As investing and economies become more and more intertwined, complex and convoluted, don't look for concrete solutions from politicians, bankers, or financial advisors. They created these problems and should not be relied upon to provide solutions. They will offer blankets for the cold, soup for the hungry, and limited shelter for the homeless. In other words, they will only be able to limit the suffering, not eliminate it.

To accentuate the level of madness permeating through the financial class consider this:

“In 20 years we may find ourselves with a real global crisis where we haven’t saved enough money for retirement,” says Calstrs’ Mr Ailman. “Returns can fluctuate, but longevity has been extended dramatically . . . We just have to explain to millennials that their parents might have to move back in with them.”

Somebody needs to point out to Mr. Ailman that many millennials are already living in their parents' basements!

At the Close, Monday, November 18, 2019:
Dow Jones Industrial Average: 28,036.22, +31.33 (+0.11%)
NASDAQ: 8,549.94, +9.11 (+0.11%)
S&P 500: 3,122.03, +1.57 (+0.05%)
NYSE Composite: 13,483.81, -9.15 (-0.07%)

Wall Street Awaiting Fed's Next Move

On the road again... drive by post.

As one can see from the figures below, there was muted reaction in the US to the ECB rate dump early in the day.

Wall Street is no doubt waiting for the Fed's response in kind, next week, when they're expected to drop the federal funds rate another 25 basis points. They're now behind the curve in the currency race into the abyss (a new term because "race to the bottom" would assume there is some stopping point... thanks to negative interest rates, there isn't), and will be playing catch-up the next year or more, at least into the election season.

What a horrible hotel. Hilton Airport in Knoxville, TN. The room smells like a doctor's office. The air is antiseptic and stifling, the coffee machine doesn't work properly and the sheets on the bed are treated with some kind of agent which induces congestion and itching. Not recommended. In the spirit of negative interest rates, I'm giving it -4 stars.

At the Close, Thursday, September 12, 2019:
Dow Jones Industrial Average: 27,182.45, +45.41 (+0.17%)
NASDAQ: 8,194.47, +24.79 (+0.30%)
S&P 500: 3,009.57, +8.64 (+0.29%)
NYSE Composite: 13,116.05, +33.64 (+0.26%)

Global Banker Duplicity: Draghi Cuts ECB Overnight Rate to -0.50%

At Thursday's announcement, the ECB's Chief Governing Council (sounds impressive, doesn't it?) cut the bank’s overnight deposit rate, trimmed by 10 basis points, to −0.50%, meaning that commercial banks must effectively pay just a little bit more to the ECB to hold their excess cash balances overnight.

There were other policy moves, such as a restart to the ECB's Asset Purchase Program, otherwise known as QE, with an unlimited timeline. The bank will purchase assets at a rate of 20 billion euros per month, until they see inflation begin to tick up, so, essentially, forever, or, until the currency is completely worthless or eviscerated by the continuous destruction of capital by negative interest rates.

It would be easy to say that the central bankers don't know what they're doing, because all of the stimulus applied to economies around the world for the past ten years hasn't produced anything close to a desired result, either increased inflation (which isn't good, by the way), or rising GDP in developed nations.

What the ECB and other central banks like the BoJ and the US Federal Reserve are doing is choking down the currency in desperate, disparate attempts to conceal the rot within the system, which essentially imploded in 2008.

Nothing has been done at the micro level to induce business formation. It's all been macro level stuff, aiding governments and big corporations, which have a stranglehold on the most profitable franchises worldwide.

This is apparently good for asset prices in risky segments, such as stocks, but also for gold and silver, which have popped on the news, but will no doubt retreat.

The end game is a global depression, which some claim we've been in since 2008, but that's splitting hairs. The final blow comes when currencies backed by nothing are thrown out with the bathwater by populations tired of being taxed to death and dragged roundly their ears and noses with shifting central bank tricksterism.

Negative interest rates, if they prevail, will destroy all fiat currency. It's just math.

At the Close, Wednesday, September 11, 2019:
Dow Jones Industrial Average: 27,137.04, +227.64 (+0.85%)
NASDAQ: 8,169.68, +85.52 (+1.06%)
S&P 500: 3,000.93, +21.54 (+0.72%)
NYSE Composite: 13,082.41, +88.41 (+0.68%)

WEEKEND WRAP: Another Shaky Week for Stocks; Bond, Gold, Silver Rallies Extend

As the global ponzi turns, the week now left behind shares a trails of tears and cheers, sadness for equity holders, joyous celebrations in the bond pits as US rates re-approach the zero-bound (despite the Fed's reluctance).

While stocks bounced like a rubber ball on a string, the losses were limited by some mysterious dip-buying mid-week as news flow changed not just by the day, but seemingly by the hour.

At the same time, the bond market in the US was mimicking Japan and Europe, grinding yields lower, with the 10-year note closing out the week at 1.74%, which is lower than the 1,2,3,6-month and one-year yields, making the case for an already inverted yield curve. The 2-year continues to be resilient, though one has to wonder how much longer it can hold the narrow margin below the 10-year, which is currently a scant 11 basis points (1.63%).

Precious metals have also benefitted from global uncertainty, with gold hovering around $1500 and silver teasing the $17.00 mark. Both are significantly higher from lows spotted in late May. The ascent of the metals has been swift and without any major pullback. If the metals are in an overbought condition, they certainly aren't showing any signs of it. As usual, however, the persistence of central banks to keep "real money" on its heels is probably keeping PMs from going vertical. That story seems to have no end, except that a hyperbolic rise in gold and silver would signal the death of not just the US dollar, but probably all fiat currencies in use by every nation, developed or not. After fiat finds its proper value (ZERO), barter will follow. It's a natural progression. The central question, as has been for centuries, is, "what do you give for a live chicken?"

Though it may appear that the global economy is about to implode, it's useful to be reminded that the Great Financial Crisis (GFC) is well beyond its 10th anniversary, thanks to massive infusions of counterfeit fiat ladled out to the unwashed by the BOJ, FRS, BOE, SNB, PBOC, ECB. Spelling out the acronyms somehow yields negative interest rates and the death of money. Nobody knows when this will occur, but it will, and the effects will devastate many. Think billions of people, not just millions.

In the interim, as the world is roiled by international, geopolitical events, the wall of worry is being built upon the current crises (not in any particular order):

• The Epstein "suicide"
• Honk Hong protests
• Brexit
• Trade War and tariffs
• Middle East tensions
• Mass Shootings, Gun Control Legislation, Red Flaw Laws (won't happen)
• 2020 presidential election hijinks
• Ongoing migrations (Africa to Europe, South America to North America, China to Africa)

That's more than enough to keep traders up at night and on their collective toes during the days ahead.

Incidentally, all of this anguish has shielded the markets somewhat from a less-than-rousing second quarter earnings season, even as the corporates float through the third quarter. The Dow Transports re-entered correction territory two weeks past week and extended it last week with the worst showing of all the US indices, by far.

Recession is almost a certainly, though it needn't be particularly horrible for the US, since employment is still strong, despite weakening earnings in the large cap corporate sector. Since the US is a very big country, different areas will be affected in different ways. Areas of the country that have been growing (most of the South, Midwest and Pacific Northwest) will continue to do so, albeit at a slower pace. Those areas in decline (Northeast cities, California, rural enclaves) will see conditions worsen. Those areas in decline will continue to do so through good times and bad and some may be exacerbated by outflows of high income individuals due to SALT taxes. It's a big country, a panacea for speculators with long time horizons.

At the Close, Friday, August 9:
Dow Jones Industrial Average: 26,287.44, -90.76 (-0.34%)
NASDAQ: 7,959.14, -80.02 (-1.00%)
S&P 500: 2,918.65, -19.44 (-0.66%)
NYSE Composite: 12,748.42, -80.38 (-0.63%)

For the Week:
Dow Industrials: -197.57 (-0.75%)
Dow Jones Transports: -167.22 (-1.61%)
NASDAQ: -44.93 (-0.56%)
S&P 500: -13.40 (-0.46%)
NYSE Composite: -91.08 (-0.71%)

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:

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%)

Global Stock Rout Deepens; Dow Loses Another 500 Points; NASDAQ Down 16.7% Since August

The pain is spreading, and it doesn't seem to be about to abate any time soon.

According to Dow Jones Market Data, the S&P 500 closed at its lowest level since October of 2017, the NASDAQ finished at its lowest since November of 2017, while the Dow closed at lowest level since March 23. Only a rally in the final 15 minutes of trading kept the Dow from closing at its lowest level of the year.

The Dow had plunged as low as 23,456.8 with just minutes to the closing bell, but short-covering boosted the industrials more than 100 points in the final minutes of trading. Not that it matters very much, but the closing low for the year was 23,533.20. Prior to that, the Dow closed at a low of 23,271.28 on November 15, 2017.

Both of those levels are likely to be subsumed, as the stock rout about to be hit with another dose of reality. Trumping anticipation, the Fed meeting which ends Wednesday afternoon at 2:00 pm ET, is almost certain to include a 25 basis point raise to the federal funds rate. On Friday, the federal government, unable to reach a suitable compromise on President Trump's border wall, will go into a partial shutdown.

Neither event - especially the federal shutdown - is of the earth-shattering variety, but they come at a very inopportune time for the market, which is struggling to find any good news upon which to hang a rally.

Europe is either in flames (France), in a bear market (Germany), or about to enter a recession thanks to the end of the ECB's brand of QE. Beyond that, there's the uncertainty of an orderly departure from the EU by Great Britain. The official date for Britain to separate itself from the EU is March, but there have been rumblings of an extension and more than just a little unrest from the island nation to the continent concerning what effect a member country departing will have on the solidarity of remaining members.

In China and Japan, an economic slowdown is already well underway, so it appears that the sellers have reason enough to move away from stocks, and rapidly. There are just too many negatives floating around geopolitical and financial circles for all of them to be resolved in the near term. Rather, these worries turn into realities which the market doesn't appreciate, such as the actual imposition of tariffs rather than mere rumors and threats of them. The same goes for the Fed's upcoming rate hike and the government shutdown. It's become a market that's twisted the old saw into "sell the rumor, sell the news." Everything is on sale and buyers have been heading to the sidelines beginning in February. Since October, the pace has picked up noticeably, but December threatens to be the worst month of the year for the Dow, at least.

For perspective, February's loss on the Dow was 1120.19 points.

March saw a decline of 926.09.

In October the Dow lost 1341.55 points.

So far this month, the Dow is lower by 1945.58 points, making the October through December (November's gain was 426.12 points) period worse than the February-March spasm.

The NASDAQ is down 16.7% since August 29. WTI Crude was seen at $49.45 per barrel, the lowest price since September, 2017.

Throughout the years of experimental financial chicanery of QE and ZIRP, and NIRP (negative interest rate policy) by the Federal Reserve and fellow central bankers following the Great Financial Crisis (GFC) of 2007-09, the question was always, "how is this all going to end?"

Now, we have the answer, firsthand, and, as many predicted, it's not pretty and likely to get worse.

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
12/17/18	23,592.98	-507.53	-1945.58

At the Close, Monday, December 17, 2018:
Dow Jones Industrial Average: 23,592.98, -507.53 (-2.11%)
NASDAQ: 6,753.73, -156.93 (-2.27%)
S&P 500: 2,545.94, -54.01 (-2.08%)
NYSE Composite: 11,532.12, -223.27 (-1.90%)

Dow Closes With Losses; Is This 2007 All Over Again?

The Dow spent the day criss-crossing the unchanged line - 20 times to be exact - before finally capitulating late in the day, closing lower for the third time in four days, the losing sessions outweighing the sole winner by a margin of some 398 points.

Among the various reasons for the recent declines are the usual suspects: trade and tariffs, emerging market weakness, soaring bond yields, and widespread political unrest, not only in the United States, but elsewhere in the world, particularly Europe, where nationalism is on the rise in opposition to hard-line European Union bureaucracy and technocrats.

Italy is the most recent focal point, where the latest government consists of parties warring within themselves, with each other, and with the political apparatus that overarches all things European from Brussels. The Italian government, like most modern nations, is saddled with largely unplayable debt, seeking solutions that preclude involvement from either the ECB or the IMF, a task for only the brave or the foolhardy.

As much as can be said for the political turmoil within the Eurozone, it remains cobbled together by an overtaxed citizenry, ripe for revolt from the constraints upon income and general freedom. As was the case with Greece a few years back, the EU intends imposition of austerity upon the Italians and is facing stiff resistance from the general population and government officials alike.

Political sentiment aside, the canary in the US equity coal mine is the downfall of the treasury market, which has seen rising yields almost on a daily basis since the last FOMC meeting concluded September 26, the well-placed fear that the Fed has reached too far in implementing its own brand of monetary austerity by flooding markets with their own overpriced securities. The resultant condition is the most basic of economics: oversupply causes prices to fall, yields to rise.

Adding to investor skittishness are upcoming third quarter corporate reports, which promise to be a bagful of not-well-hidden disappointment, given the strength of the dollar versus other currencies and corporate struggles to balance their domestic books with those outside the US. Any corporation with large exposure to China or other emerging markets is likely to have felt some currency pressure during a third quarter which saw rapid acceleration in the dollar complex. Most corporations are simply not nimble enough to adjust to quick changes in currency valuations, leading to losses on the international side of the ledger book.

Valuations could also matter once again. Since the economy in the US is seen as quite robust and strong at the present, investors may want to question their portfolio allocations. Good things do not last forever, and while the current rally under President Trump has been impressive, it has come at the end of a long, albeit often sluggish, recovery period.






All of this brings up the point of today's headline, the eerie similarity to the market of 2007, which presaged not only a massive recession, but a stock market collapse of mammoth proportions, a real estate bust, and vocal recriminations directed at the banking cartel, which, as we all know, came to naught.

In 2007, the Dow peaked on July 11, closing at 14,000.41, but was promptly beaten down to 12,845.78 at the close on August 16. It bounced all the way back to 14,164.53, on October 16, but was spent. By November 26, the day after Thanksgiving, the industrials closed at 12,743.44 and continued to flounder from there until the final catastrophic month of October 2008.

The chart reads similarly, though more compressed in 2018. The Dow made a fresh all-time high on September 20 (26,656.98) and closed higher the following day. On October 3, a new record close was put in, at 26,828.39, but the index has come off that number by nearly 400 points as of Tuesday's close.

It is surely too soon to call for a trend change, but, if 2018 is anything like 2007, the most recent highs could be all she wrote, the proof not available for maybe another month or two, but the Dow bears watching if it cannot continue the long bull run.

Dow Jones Industrial Average October Scorecard:

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

At the Close, Tuesday, October 9, 2018:
Dow Jones Industrial Average: 26,430.57, -56.21 (-0.21%)
NASDAQ: 7,738.02, +2.07 (+0.03%)
S&P 500: 2,880.34, -4.09 (-0.14%)
NYSE Composite: 12,960.57, -39.56 (-0.30%)

Weekend Wrap: Stocks Whacked At Week's End, NASDAQ Suffering Most; Global Condition Questionable

Back-to-back down sessions left the Dow Jones Industrial Average lower for the week and month, though only by 11 points, the dual declines amounting to a 380-point loss after the Dow had recorded three-straight all-time highs, so a pullback was not only likely, but probably helpful in the long term.

Stocks have been soaring due to strong economic data, but, at some point, valuation becomes an issue, and that point may have been reached this week. By far, the NASDAQ suffered more than the other indices as investors fled speculative positions in favor of more defensive ones, especially as treasury bond prices tumbled, sending yields on the 10-year note to their highest point since 2011.

The 10-year note closed out the week yielding 3.23, while the 30-year bond offered a yield of 3.40. Better yet, spreads widened, as the 2-year bill finished at 2.88, widening the spread on 2s-10s to 35 basis points, allaying some of the fears for an inversion in the curve, a condition that normally precedes a recession.

Friday's September non-farm payroll data from the BLS came in below expectations of 180,000, at 134,000 new jobs, adding to the shifting sentiment late in Wall Street's week. Unemployment ticked lower, however, from 3.9% to 3.7%, keeping the jobs picture still very much a positive one.

Losses on the NASDAQ (-3.21%) were the worst since March. Such a large loss, especially in the leadership group, may cause investors to reconsider their allocations, especially since October is normally a very volatile time. Besides the risk of further declines on valuation, many speculative tech stocks offer no dividends, an important element for stability in any portfolio.

Globally, markets were lower, with Europe suffering steep declines. The stock index of Europe's leading economy, Germany's DAX, is already in correction territory. Tremors from Italy's burgeoning funding crisis have caused concern in European bourses as the runaway Italian government continues to criticize the European Central Bank's (ECB) practices.

While Italy is unlikely to withdraw from the EU, there is mounting pressure on recently-elected leaders for more autonomy, citing the disastrous condition in Greece, following years of bailouts and forced austerity by EU leaders.

Emerging markets, including behemoths China and India, have been suffering from banking and regulatory malaise, and from a growing suspicion that the official data cited by governments is often fudged to appear better than reality.

The dollar eased late in the week against some currencies, a relief to those emerging markets, though not enough to avoid wholesale capitulation of home currencies, especially in Turkey and Argentina, two basket-case economies on the verge of inflationary and solvency collapses.

Those are the leading factors which has prompted investor flight to US equities and bonds, considered a global safety net, though the crowding of those markets has led to what currently is the condition of overvaluation in some sectors.

Gold and silver were bid slightly through the week, though the precious metals still remain close to there-year lows with no bottom having been found.

While general economic news in the US is good and should continue to be so, global conditions are far from rosy, which is leading to some shift in sentiment and flights to safety.

Dow Jones Industrial Average October Scorecard:

Date	Close	Gain/Loss	Cum. G/L
10/1/18	26,651.21	+192.90	+192.90
10/2/18	26,773.94	+122.73	+315.63
10/3/18	26,828.39	+54.45	+370.08
10/4/18	26,627.48	-200.91	+169.17
10/5/18	26,447.05	-180.43	-11.26

At the Close, Friday, October 5, 2018:
Dow Jones Industrial Average: 26,447.05, -180.43 (-0.68%)
NASDAQ: 7,788.45, -91.06 (-1.16%)
S&P 500: 2,885.57, -16.04 (-0.55%)
NYSE Composite: 12,991.95, -50.35 (-0.39%)

For the Week:
Dow: -11.26, (-0.04%)
NASDAQ: -257.91 (-3.21%)
S&P 500: -28.41 (-0.97%)
NYSR Composite: -90.67 (-0.59%)

Stocks Turn Ugly In Short Session: Time Out On Wall Street

The Dow took a nearly 300-point round trip from top to bottom on the second trading day of the third quarter, rising by more than 137 points before collapsing in the final hour to close 1/2 percent lower. The NASDAQ was beaten down further, off 65 points on the day (-0.86%).

Markets can become discouraged by many factors, but for this current one, it seems to be merely a matter of during out after nine-plus years of unprecedented fantasy. Speculators, those eager early-day traders who took it on the chin today as they have on many other recent sessions, have to be concerned that investors might catch on to the fact that the global economy is not all roses and unicorns, but rather a patchwork of central bank machinations that have distorted what used to be free markets into stealthy, clandestine, controlled entities.

If that becomes the case, the second leg of the bear market will commence in short order and likely not cease until well after the Dow falls 20% from the January 26 high (26,616.71), a process that could last anywhere from three to six months. This is shaping up to be a long drawdown of asset values, considering that the central bankers will not readily abandon their chosen "low unemployment and moderate inflation" narrative, of which practically everyone who matters is in disbelief already. The proof is in stock market and bond returns, both of which suggest contraction instead of a healthy growth environment.

July 4, Independence Day in the United States, will be an anchor on foreign markets because there will be no trading on the day. China has already intervened in their equity markets to stem the outflows. Italy, and thus, all of the EU, is staring directly at a major solvency crisis which could explode and uncouple the southern nation from the rest of Europe. Already, the new Italian government has ECB officials on edge.

Argentina is already a basket case, as is Venezuela, with Brazil close to chaos as well.

Maybe it's time the politicians in Washington stop focusing on the "evil" Russians (who are doing quite well, despite sanctions and expulsions of their diplomats by the US), and begin taking account of the rest of the world, which seems to be not right at all.

Dow Jones Industrial Average July Scorecard:

Date	Close	Gain/Loss	Cum. G/L
7/2/18	24,307.18	+35.77	+35.77
7/3/18	24,174.82	-132.36	-96.59

At the Close, Tuesday, July 3, 2018:
Dow Jones Industrial Average: 24,174.82, -132.36 (-0.54%)
NASDAQ: 7,502.67, -65.01 (-0.86%)
S&P 500: 2,713.22, -13.49 (-0.49%)
NYSE Composite: 12,494.70, +9.12 (+0.07%)

Friday's Moonshot Sends Stocks to Positive for March, Year-to-Date

After losing nearly 500 points the first two trading days of March, the Dow Jones Industrial Average rebounded to positive for the month - and the year - with gains every day excepting Wednesday, when the Dow shed another 82 points. However, the big days occurred on Monday, with a gain of 336 points, and Friday, when the Dow and other major averages put the dismal days of February and March mostly behind them, as the industrials skyrocketed 440 points.

Amazingly, all of this optimism came in spite of endless growling over President Trump's steel and aluminum tariffs and synchronized shouting - from the halls of congress and the canyons of lower Manhattan - about an impending trade war.

Friday's burst higher was credited largely to the impressive February non-farm payroll report, which was a blockbuster, showing 313,000 new jobs created and a 4.1% unemployment rate in the shortest and coldest month of the year, numbers nobody could claim as anything other than positive, the mere hint of good news now capable of sending the stock market back to dizzying, overvalued heights.

Indeed, the NASDAQ closed at an all-time high, though the other indices still have a way to go to exceed the marks set on January 26, though another week like this one, with gains of more than 2.8% on each of the individual indices, would smash the old records on the S&P 500, and get the Dow and NYSE Composite within spitting distance.

How likely that is to happen is a matter of some conjecture, as the FOMC meets March 20 and 21, and is expected to raise the federal funds rate another 25 basis points. This is seen as a headwind to continued expansion, but, with seven days to trade up to the release of the new "policy," the day-trading demons of the financial world will have plenty of time to ramp up and then deflate, choosing either to sell the news or buy into the continuing expansion narrative, even as the bull market passed the nine-year mark on Friday.

There's been no absence of volatility or fluctuation to start off 2018, with massive gains in January, huge losses in February, and possibly an evening out in March. To those who believe the bull is weary, standing on only two legs, the word is "so what," with the punditry claiming - rightly so - that bear markets only last, on average, 12-14 months. What they do not want to discuss is the depth of those bear markets, nor the time taken to get back the losses incurred.

The past two bears, in 2000-2001 and 2007-2009, are good cases in point, using the Dow as the barometer, even though, in the case of the 2000 crash, it was the NASDAQ that collapsed more than anything, which could again be the case should history repeat.

On December 1, 1999, the Dow closed at 11,497.12, and bottomed at 7,591.93 on September 1, 2002, making the duration of the bear market a full 34 months, or nearly three years. It wasn't until September of 2006 that the index surpassed the old high (11,679.07), a period of nearly seven years from peak to peak, a period which seemed like eternity for some. Of course, the bull had been underway since the bottom in '02, and finally apexed in October of '07, blowing through 14,000 before beginning to pull back. (For the record, it took the NASDAQ 13 years to exceed it's pre-crash 2000 highs.)

The ensuing collapse fell just short of catastrophic calamity, as the housing market went bust, along with its many derivative trades, taking all of corporate America down for the count, with the Dow closing at 6,547.05 on March 9, 2009, a date which could arguably be called the end of the '07-09 bear market (16 months) and the beginning of the Fed-inspired bull run to the present, now 114 months old, the second-longest expansion in market history, with gains from the bottom to the recent peak quadrupling the investment, truly an inspiring, incredible, nearly inexplicable accomplishment.

The average of the last two bear markets supplies a possible scenario. If the bear market began in February (which we humans will only know at some later date), the bear would run through March of 2020, or 25 months, the average length of the last two bear markets. It's at least worth consideration, because two years of losses might actually be enough time to clear the decks of much of the excess debt and mal-investment (and there's been lots of it) of the past nine years. Anything longer would be mostly unbearable, not only to Wall Street, but to the average Jane and Joe Americans, who have suffered enough at the start of this century. Likewise, anything shorter would look like another band-aid for the corrupt banking and political system of cronyism and back-handedness toward the taxpaying public.

The mammoth gains over the past nine years are exactly why one should give pause and contemplation to the continuance of the bull market. In market terms, one would be buying at the highs if one would plunge in today, and why would anybody who saw $100,000 turn into $400,000, or a million into four million, even consider adding to positions?

Perhaps the view that President Trump will single-handedly usher in a era of increased prosperity and profit with his blustering "Make America Great Again" push can partially explain any euphoria surrounding the currency of the stock market and it's possible that he might be on the right track, even though he faces many hurdles and obstacles, not the least of which stem from his own party, people in his own administration, opponents on the Democrat side of the aisle and skeptics on Wall Street.

But, it's been proven time and again, Wall Street will play along with Washington if it serves their interest, which is, succinctly, more profits, and higher stock prices. This pits the speculators, gamblers, and traders of the world against the entrenched government "deep state," which cannot stomach Mr. Trump and is prepared to do anything within its power to besmirch and/or impeach him, including sending the stock market into a tailspin, making fundamental analysis of stocks, bonds, and just about any other investment vehicle, not only an exercise in economics, but in politics, as well.

Economic data has shown a mixed, slightly positive picture; politicians are hell=bent on discrediting the president, and, behind it all, an ocean of debt created by the Fed and their cohort central banks needs to be unwound, brought under control, and eventually retired, an exercise only the Fed has recently begun, with the ECB and Bank of Japan too to follow. The wild card is China, where the PBOC has created literal cities built on nothing but debt and speculation.

All that makes for one tricky trade.

Dow Jones Industrial Average March Scorecard:

Date	Close	Gain/Loss	Cum. G/L
3/1/18	24,608.98	-420.22	-420.22
3/2/18	24,538.06	-70.92	-491.14
3/5/18	24,874.76	+336.70	-154.44
3/6/18	24,884.12	+9.36	-145.08
3/7/18	24,801.36	-82.76	-227.84
3/8/18	24,895.21	+93.85	-133.99
3/9/18	25,335.74	+440.53	+306.54

At the Close, Friday, March 9, 2018:
Dow Jones Industrial Average: 25,335.74, +440.53 (+1.77%)
NASDAQ: 7,560.81, +132.86 (+1.79%)
S&P 500: 2,786.57, +47.60 (+1.74%)
NYSE Composite: 12,918.82, +173.81 (+1.36%)

For the Week:
Dow Jones Industrial Average: +797.68 (+3.25%)
NASDAQ: +302.94 (+4.17%)
S&P 500: +95.32 (+3.54%)
NYSE Composite: +360.83 (+2.87%)

Despite Relatively Hot CPI, Stocks Rip Higher

What's that old saying?

It's something like... "don't wish too hard, you may get what you want."

Well, it applies to the Fed, ECB, BoJ and other central banks, which have been screaming for higher inflation ever since the Great Financial Crisis of 2008-09.

On Wednesday, they got some of the "good" news. The CPI for January came in with a gain of 0.54 month-over-month, the biggest increase since January of 2017. Being that both January of this and last year were the high points for CPI, it might be a statistical anomaly, though that thought seemingly hasn't crossed the minds of any economic reporters.

Higher consumer prices in January, however, didn’t substantially alter the overall picture on inflation. The increase in the CPI over the past 12 months remained unchanged at 2.1%.

After stripping out volatile gas and food, the more closely followed core rate of inflation rose 0.3% last month. The 12-month rate of core inflation was also flat at 1.8%.

So, once stock players digested the news, which was released an hour prior to the opening bell, futures nosedived, stocks opened deep in the red, but, within an hour, it was off to the races, despite interest rates - especially the 10-year-note - rising sharply.

The 10-year-note popped over 2.9% yield, while gold and silver - traditional inflation hedges - soared throughout the day.

Seems nobody really knows what will happen, though many profess to have deep inner knowledge of how economics actually works.

Maybe we're all just being played for fools.

Pull my finger...

Dow Jones Industrial Average February Scorecard:

Date	Close	Gain/Loss	Cum. G/L
2/1/18	26,186.71	+37.32	+37.32
2/2/18	25,520.96	-665.75	-628.43
2/5/18	24,345.75	-1,175.21	-1,803.64
2/6/18	24,912.77	+567.02	-1,236.62
2/7/18	24,893.35	-19.42	-1,256.04
2/8/18	23,860.46	-1,032.89	-2288.93
2/9/18	24,190.90	+330.44	-1958.49
2/12/18	24,601.27	+410.37	-1548.12
2/13/18	24,640.45	+39.18	-1508.94
2/14/18	24,893.49	+253.04	-1255.90

At the Close, Wednesday, February 14, 2018:
Dow Jones Industrial Average: 24,893.49, +253.04 (+1.03%)
NASDAQ: 7,143.62, +130.10 (+1.86%)
S&P 500: 2,698.63, +35.69 (+1.34%)
NYSE Composite: 12,746.72, +172.35 (+1.37%)

10-Day Winning Streak on the Dow Industrials Ends With Whimper

With closing highs in the past ten straight sessions, the Dow Jones Industrial Average could well be expected to take a bit of a hit at some point, that point coming on Tuesday, though the hit was not substantial, as the Dow shed just 33 points.

Putting the past ten sessions in perspective, the Dow's winning streak began at just above 21,500, and, before retreating into the close, topped out at nearly 22,200, overall, a gain of almost 700 points, or 3.25%. Annualizing the results, if the Dow were to move in the same direction for a full year, the gain would be more than 33,000 points, resulting in a gain of more than 150%.

With those kinds of numbers nobody in their right mind with more than $40,000 of investible income would bother to work.

These mental gymnastics are brought to you by the Federal Reserve Bank, the Bank of Japan, the European Central Bank and the Swiss National Bank. All of these central banks other than the US Fed, have been and will continue to be openly investing in US equities and those in other developed nations.

There's a certain folly in expecting the central banks to continue supplying extraordinary gains in stocks, so distorted already are the equity - and many other - markets.

At the Close, 8/8/17:
Dow: 22,085.34, -33.08 (-0.15%)
NASDAQ: 6,370.46, -13.31 (-0.21%)
S&P 500: 2,474.92, -5.99 (-0.24%)
NYSE Composite: 11,949.98, -37.79 (-0.32%)

For US Markets, It's Splits-ville Again

Another day, another session punctuated by divergent indices.

The NASDAQ goes up; the Dow goes down, or vice versa. The S&P 500 and NYSE Composite seem to go their own ways, more often than not, separate. All of this reeks of manipulation, selectivity, goal-seeking, and just about anything other than rational investing.

Upon examination, the stock market is nothing more than pieces of paper representing shares in company X or Y or Z, being traded for other pieces of paper known as yen, dollars, euros or pesos. It's the ultimate paper chase, based entirely on faith and foolery of grand design by the world's central bankers. It's a confidence game being played at the highest levels of finance, a dangerous precedent for the entire planet.

Unless the public detaches from the fraud, it will continue. The unique phenomenon at work in today's financial arenas is commonly known to psychiatrists as normalcy bias. It is the belief that everything seems to be working all right, so the urge to change is minimized, which is precisely the condition present in the debt-infested governments, businesses, and households everywhere.

The ultimate fear is that confidence is lost in the fiat system. After eight long years of propping up governments, businesses, and households with freshly-printed-or-minted cash, confidence is still durable, thanks to normalcy bias.

But, there are canaries in the coal mine, so to speak. These are burgeoning, non-repayable government debt, underfunded pensions (especially public union pensions), slack demand, disinflation, demographics, and the undeniable eventuality of recession, either in the US, Europe, or globally.

Fighting these trends with some degree of success has been the role of the central banks, but they are running out of viable options to keep global finance operating while also quelling local discontent, which is growing rapidly.

Money Daily does not pretend to know who is buying stocks and/or causing the variations in the major indices, but it is apparent that some entity other than brokerages are buying and it is well known that the Bank of Japan (BOJ), Swiss National Bank (SNB), and European Central Bank (ECB) have been and will continue to be outright buyers of equities.

When these entities become sellers, there will be no bottom to the markets.

Caveat Emptor.

At the Close, 7/24/17:
Dow: 21,513.17, -66.90 (-0.31%)
NASDAQ: 6,410.81, +23.05 (0.36%)
S&P 500: 2,469.91, -2.63 (-0.11%)
NYSE Composite: 11,904.71, -19.89 (-0.17%)

Stocks Finish Week With Gains, Remain Range-Bound

If one were to view Friday's market action in a vacuum, without context, one would think everything is just peachy in Wall Street wonderland. The NFP jobs report for June was solid and the major indices put up strong gains to close out the week.

But, nothing exists in isolation.

Taking a little bit broader view, over the shortened, four-day week, all that Friday's gains managed to do was life all the major indices from red to green for the week, with the exception of the NYSE Composite, which finished just nine points underwater, but, not to worry, nobody pays attention to the "comp" anymore, even though it is the most diverse, broadest of the majors.

Fraud, manipulation, massive central bank intervention?

Yes, sure, of course. Since central banks have been the primary drivers of the eight year recovery since the GFC, why would anybody believe they have stopped their high-stakes involvement. Lowering interest rates - even to negative - didn't work. Massive injections of funny fiat money didn't work. Talking about how the labor market and the general economy was doing so great (it isn't) didn't work, so, why not resort to outright purchasing of equities in a vain attempt to create a "wealth effect?"

Of course, the Fed will never admit to such activity, but Switzerland (SNB), Japan (BOJ), and the European Central Bank (ECB) have all openly been buying stocks for the past few years, at least, and probably longer.

Therefore, the entire week of trading was a nonsensical, uneventful kabuki play, designed to give the impression that all is well and there's no reason to sell... anything... even though many did. As they say in the current newsspeak nomenclature, a major league nothing-burger.

Balderdash. You're being culled, cuckolded, marinated, stuffed, and baked by people who control your baseless currency when you could be using that same valueless "money" to purchase goods, food, machinery of trade, gold, silver (currently on sale, as it has been for four years running), land, land and more land, some with actual buildings erected.

But, no. Americans (not to the exclusion of Canadiens, Japanese, and Euroland dwellers) instead purchase garbage college educations for garbage jobs, cell phones, 70-inch TVs, overpriced cars (mainly on leases), and run up enormous amounts of credit card and other debt for baseball tickets and extraordinary "experiences."

With the US government $19.965 trillion in debt, something along the lines of 10,000 seniors retiring every day, underfunded pensions galore, and monstrous debt and unfunded liabilities under-and-overhanging nearly every developed nation...

Good luck with that.

At the Close, 7/7/17:
Dow: 21,414.34, +94.30 (0.44%)
NASDAQ: 6,153.08, +63.61 (1.04%)
S&P 500: 2,425.18, +15.43 (0.64%)
NYSE Composite: 11,752.98, +50.55 (0.43%)

For the week:
Dow: +64.71 (0.30%)
NASDAQ: +12.66 (0.21%)
S&P 500: +1.77 (0.07%)
NYSE Composite: -8.72 (-0.07)

Broken Markets Yield Strange Results

How does it happen that all the major indices closed lower on Wednesday, but the NASDAQ finished with a gain of nearly three-quarters of a percent, up 45 points on the day?

Algorithms gone wild, that's how.

With the computers cranked up to stuff speculative stocks with ever-high bids, the NASDAQ has been outperforming the other indices over the past year, but especially so in 2017. Over the past 12 months, the NAZ is up nearly 30%, the Dow gained by 21% and the S&P 18%.

In the past three months, the NASDAQ has improved by 7.59%, while the Dow is up a mere 3.58%, the S&P 500 up 3.92%. That substantial edge has begun slipping however, as the NASDAQ took a major hit on the 8th of June. Prior to that massive outflow, the index was up 9.10% since March 22.

Apparently, that was not to the liking of the speculative sorts populating the concrete canyons of lower Manhattan. That's how results such as Wednesday's occur. Given that computers do more than 60% of all trading, it's not a stretch to believe that certain goal-seeking altos could be cranked up by human hands behind the scenes and the screens.

Markets have been broken by computer-driven trading, lack of oversight by the SEC and meddling by central bankers and the Federal Reserve. With the Swiss National Bank (SNB), Bank of Japan (BOJ), and European Central Bank (ECB) all active purchasers of stocks (not sellers), such meddling behavior is bound to cause distortions such as seen on Wednesday and in a myriad of other sessions, issues, and especially in ETFs.

Stocks may be at or near all-time highs, but caution is urged in such a speculative, managed market. A misstep or fat finger could cause any manner of disorder.

At the Close, 6/21/17:
Dow: 21,410.03, -57.11 (-0.27%)
NASDAQ: 6,233.95, +45.92 (0.74%)
S&P 500: 2,435.61, -1.42 (-0.06%)
NYSE Composite: 11,696.28, -42.67 (-0.36%)

Stocks Gain, Bond Yields Continue Lower in Fed-inspired Environment

Opening the week with across-the-board losses, the major indices took a little off the top Tuesday, the penultimate trading day for the month of May.

The losses were limited in scope, however, as speculators seem reluctant to forego gains in a bull market that has shown few signs of slowing.

With optimism on Wall Street approaching a state irrational exuberance, the issue becomes one of not when the market will reverse course, but at what speed. A sharp downturn could expose many hedgers and options players, though the Fed and their cohorts at the ECB, BOJ, and the PPT would likely quash any rampant selling by putting an artificial floor on the market, a tactic they've employed over the last eight years of fake recovery.

Unlimited upside is the overarching theme of the decade, despite the Fed's promise to raise interest rates four times in 2017. Despite the threat of tighter money, the 10-year treasury note closed out the day at 2.22% and shows no sign of reacting negatively to any Fed jawboning nor actual policy directives.

While the bull market remains intact at eight years and running, the bond rally is at 30 years. Liquidity and solvency have been the main catalysts since 2009, with central banks coordinating bond (and equity) purchases in order to prevent a complete collapse of the global financial system, which almost fell apart in 2008-09.

Complete control of all markets being the ultimate goal of central banks, the money-printers are close to achieving just that. Even if economic data remains sluggish, weak, or troubling, the Fed and friends will be at the rescue. Stocks have been unable to extend any losing streak to frightful lengths, thanks to central bank intervention, fearing losing control.

Whatever the outcome of the June FOMC meeting, it's almost a slam-dunk that stocks will gain. It's simply the way the market is currently composed.

At the Close, 5/30/17:
Dow: 21,029.47, -50.81 (-0.24%)
NASDAQ: 6,203.19, -7.00 (-0.11%)
S&P 500: 2,412.91, -2.91 (-0.12%)
NYSE Composite: 11,601.31, -30.56 (-0.26%)

Stocks Make Third Weekly Gain In Last Seven; Government Shutdown Looms; Central Banks On Buying Spree

Stocks fell softly to close out the week, but ended with the third weekly gain in the past seven, the major averages having hit something of a speed bump of late what with the wranglings and do-nothings in Washington DC, heightened military potentialities in the Mideast and Pacific Rim (North Korea), sloppy economic data, the passing of the income tax filing deadline, and the non-stop media parade of fake news mostly designed to undermine the presidency of one Mr. Donald J. Trump.

While the overall tone of the market is nothing to get aroused over, the upcoming week could bring some more sobering developments as congress returns from a two-week vacation (a vacation from doing nothing) coinciding with Spring Break. One wishes the congresspeople well enough, but actually doing something to benefit the American public for a change would be welcome. While President Trump is trying his level best, the Democrats and their trainers in the media complex are simply playing in an alternate universe and at times coming close to treasonous actions by working against the best interests of the Republic and focusing solely on what they consider the primary interest of their party.

As the coming week progresses, the level of rancor and obtuseness could reach a fever pitch as the government faces a deadline on April 28 for some kind of budget agreement, or, more likely, another in a too long series of continuing resolutions. Both sides of the debate over what to overspend upon are already well-suited in their peculiar ideological jumpsuits, the Democrats desperate to hold onto the last vestiges of failed socialism (called progressive by the liberal left and ultra-left media), the Republicans - in congress at least - looking to cement their dicey majorities in both houses.

At the outside looking in is the current administration, bent on keeping at least some of the promises Mr. Trump made during the campaign, though reneging against the American people has become so common in the post-Vietnam era that it's almost laughable that anyone would believe a word coming from the lips of any politician in Washington.

Thus, a government shutdown looms a real possibility, though more likely a dramatic, last-gasp, late-into-the-night-made-for-TV deal is probably what's driving the phony debate. As the politicians pose and posture, many American citizens are becoming keenly aware that federal government budgets are a laughable charade, being that deficits continue on and beyond the horizon, the national debt already within $16 billion of $20 trillion, a condition only humans could have created and something only a government with all the fiscal discipline of a 12-year-old with dad's credit card could continue.

At the end of the debate, shutdown, or partial farce, the world will continue spinning, Americans will be the bag-holders of the century and the central bank ponzi will continue.

Holders of stocks should worry the least, since the Bank of Japan (BOJ) and the European Central Bank (ECB) "invested" over ONE TRILLION US DOLLARS in global financial instruments in the first four months of the year, a record amount. Certainly, the Fed and Bank of England - not to mention the Swiss National Bank - are quietly doing their part to keep the liquidity flowing in the background, using all manner of underhanded tactics to undermine every national currency available.

The policy of central bank asset-grabbing is unprecedented in financial history, though rather a common theme since the meltdown of 2008-09.

In the end, 98% of the world's population will own almost none of the assets, the central banks having snatched up anything that hasn't already been bolted down, and they're sure to use wrenches and sledgehammers to take whatever remains as well.

Though the times are trying, central bankers continue buying.

At the Close, Friday, April 21, 2017:
Dow: 20,547.76 -30.95 (-0.15%)
NASDAQ: 5,910.52, -6.26 (-0.11%)
S&P 500: 2,348.69, +-7.15 (-0.30%)
NYSE Composite: 11,389.13, -37.78 (-0.33%)

For the week:
Dow: +94.51 (0.46%)
NASDAQ: +105.37 (1.82%)
S&P 500: +19.74 (0.85%)
NYSE Composite: +65.60 (0.57%)