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%)
Showing posts with label Eurozone. Show all posts
Showing posts with label Eurozone. Show all posts
Friday, January 24, 2020
Tuesday, September 24, 2019
Stocks Flat on Eurozone Recession Fears; Fed Committed to $1 Trillion Liquidity Injection
Stocks gained early and faded late as poor economic data from Europe dampened the mood on Wall Street at the start of the last week of the third quarter.
Eurozone manufacturing PMI fell to 45.6 on Monday, the worst reading in nearly seven years, with the German manufacturing PMI falling to 41.4 in September from 43.5, the worst number since the fall of Lehman Brothers sparked the global financial crisis.
The poor figures sent European stocks reeling, fearing recession, especially in Germany, Europe's powerhouse, could be right around the corner. US indices were less-affected, though the Dow Industrials was the only index to post a positive close.
At the same time, the US banking system was being monitored, as the Fed continued its series of repo auctions. In this statement from the New York Federal Reserve, the central bank committed to 1.05 trillion in overnight repo auctions through October 10, and at least an additional $90 billion in two-week term repo auctions.
The sudden appearance of repo auctions, with the Fed buying back treasuries or MBS in exchange for ready cash from (supposedly) primary dealers has economists on edge, especially considering the huge amount of excess reserves clogging up the system.
Those not so alarmed point out that these extraordinary repo auctions are the result of a highly-predictable cash crunch for banks as corporations tax payments are due at the end of the quarter. This causes a drain on the system overall, though there was no need for such measures since the Lehman debacle a decade ago.
What happens next in markets is probably more volatility and sideways trading due to uncertainty. Recession fears in the Eurozone are probably real, though the US may actually be in good enough shape to avoid a significant downturn through 2020. The Fed has cut rates twice this year after raising them by decidedly too much. Political forces are bound to keep the Fed honest and operating largely at the behest of the markets and President Trump, who has loudly criticized the Fed's step-behind operations.
At the Close, Monday, September 23, 2019:
Dow Jones Industrial Average: 26,949.99, +14.92 (+0.06%)
NASDAQ: 8,112.46, -5.21 (-0.06%)
S&P 500: 2,991.78, -0.29 (-0.01%)
NYSE Composite: 13,085.33, -8.47 (-0.06%)
Eurozone manufacturing PMI fell to 45.6 on Monday, the worst reading in nearly seven years, with the German manufacturing PMI falling to 41.4 in September from 43.5, the worst number since the fall of Lehman Brothers sparked the global financial crisis.
The poor figures sent European stocks reeling, fearing recession, especially in Germany, Europe's powerhouse, could be right around the corner. US indices were less-affected, though the Dow Industrials was the only index to post a positive close.
At the same time, the US banking system was being monitored, as the Fed continued its series of repo auctions. In this statement from the New York Federal Reserve, the central bank committed to 1.05 trillion in overnight repo auctions through October 10, and at least an additional $90 billion in two-week term repo auctions.
The sudden appearance of repo auctions, with the Fed buying back treasuries or MBS in exchange for ready cash from (supposedly) primary dealers has economists on edge, especially considering the huge amount of excess reserves clogging up the system.
Those not so alarmed point out that these extraordinary repo auctions are the result of a highly-predictable cash crunch for banks as corporations tax payments are due at the end of the quarter. This causes a drain on the system overall, though there was no need for such measures since the Lehman debacle a decade ago.
What happens next in markets is probably more volatility and sideways trading due to uncertainty. Recession fears in the Eurozone are probably real, though the US may actually be in good enough shape to avoid a significant downturn through 2020. The Fed has cut rates twice this year after raising them by decidedly too much. Political forces are bound to keep the Fed honest and operating largely at the behest of the markets and President Trump, who has loudly criticized the Fed's step-behind operations.
At the Close, Monday, September 23, 2019:
Dow Jones Industrial Average: 26,949.99, +14.92 (+0.06%)
NASDAQ: 8,112.46, -5.21 (-0.06%)
S&P 500: 2,991.78, -0.29 (-0.01%)
NYSE Composite: 13,085.33, -8.47 (-0.06%)
Tuesday, October 9, 2018
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:
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%)
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%)
Thursday, February 21, 2013
Stocks Trashed Again on Brace of Poor Economic Data
Possibly more than anything else, the horrific -12.5 print by the Philadelphia Fed was responsible for the added declines on Thursday, following Wednesday's setback after the FOMC minutes from january were announced.
The market was expecting a reading of 1.5 from the Philly Fed in its survey of business conditions, which, in and of itself, is a bit of an embarrassment, but were greeted with an even lower number for February after january came in at a disappointing -5.8. Obviously, there's little to no catalyst for improvement in the region, and the same is pretty much true in other Fed outposts, though the Philadelphia survey gets more attention, it representing a solid hub of business activity.
Beyond the sorry report, other economic data was less-than-encouraging. First-time unemployment claims ticked up 20,000, from a revised 342K last week, to 362K in the latest reporting period, dashing - for the time being - any hope of a rebound in employment.
This is a fickle, almost psychotic market. On the one hand, traders get worried that the Fed will take away the punch bowl of unlimited QE and low interest rates, but, on the other, they are equally concerned that the general economy is again approaching stall speed, as it did last year and in 2011 in the early months.
Whatever the market is feeling these past two days, it is mostly confusion and consternation. The major averages took some serious dips into the red today before a wicked, final-hour, short-covering rally brought them close to unchanged on the day, eventually failing in the final half hour of trading.
One can hardly blame the shorts for pulling a quick trigger on their positions this afternoon. Attempting to short this market and counter the Fed's relentless money creation machine has been a losing trade for the better part of four years and its a testament to the resolve of the non-believers to hold true even on a two-day reversal.
US markets were not the only ones being handed their hats on Thursday. European markets were shattered even worse after a key reading on services and manufacturing fell from 48.6 in January to 47.3 in February, well short of expectations, where the consensus was 49. It may be finally dawning on european investors that various bond schemes by the ECB and austerity measures in various countries aren't producing the desired effects and may even be contributing to continued weakness in the Eurozone.
Taken together, the Eurozone and the US are beginning to look like a pair of gussied-up party girls after a long night on the town. The makeup is fading and cracking and the hangover is setting in with a passion.
Even though two days of trading does not constitute a trend of any sort, the past two have been the worst in succession for US stocks this year and there may not be much of a respite with sequestration issues and a budget battle looming between the opposing parties in the nation's capitol, and those are two fights the American public is hardly keen on, as congress and the president have both shown an unwavering reluctance to handle pressing business like adults, preferring to play the blame game and seek short-term, band-aid types of approaches.
How the markets play out over the next few weeks and months will go a long way toward determining the mood on Wall Street and Main Street, and the mood - despite the best intentions by business - is beginning to show signs that patience is growing exceedingly thin.
Elsewhere, gold got a bit of a dead-cat-bounce after a month of steady declines, giving back those gains during the open session, though silver remains mired at multi-month lows. The metal prices may move even lower, in union with stocks, although one would be hard-pressed to find an actual physical holder of either willing to part with any or all of his or her holdings. Suppression by central banks and other operators has been well-documented, and the more they push down, the more dire conditions for a sharp response become.
Crude oil also has been taken a beating as speculators are having their lunch eaten. Overabundant supplies of WTI crude and slack demand is causing a serious disruption in the trading, which has been nothing but straight up since December. Oil and gas at the pump are about to get a whole lot cheaper.
It's getting a little bit interesting out there after the champagne rally of the first seven weeks of the year. The A-D line has been in reversal for two straight days and today's new highs - new lows reading was nearly at parity, a condition foreign to these markets since last November.
Dow 13,880.62, -46.92 (0.34%)
NASDAQ 3,131.49, -32.92 (1.04%)
S&P 500 1,502.42, -9.53 (0.63%)
NYSE Composite 8,816.74, -66.88 (0.75%)
NASDAQ Volume 2,007,395,000
NYSE Volume 4,414,224,500
Combined NYSE & NASDAQ Advance - Decline: 1942-4569
Combined NYSE & NASDAQ New highs - New lows: 104-78
WTI crude oil: 92.84, -2.38
Gold: 1,578.60, +0.60
Silver: 28.70, +0.077
The market was expecting a reading of 1.5 from the Philly Fed in its survey of business conditions, which, in and of itself, is a bit of an embarrassment, but were greeted with an even lower number for February after january came in at a disappointing -5.8. Obviously, there's little to no catalyst for improvement in the region, and the same is pretty much true in other Fed outposts, though the Philadelphia survey gets more attention, it representing a solid hub of business activity.
Beyond the sorry report, other economic data was less-than-encouraging. First-time unemployment claims ticked up 20,000, from a revised 342K last week, to 362K in the latest reporting period, dashing - for the time being - any hope of a rebound in employment.
This is a fickle, almost psychotic market. On the one hand, traders get worried that the Fed will take away the punch bowl of unlimited QE and low interest rates, but, on the other, they are equally concerned that the general economy is again approaching stall speed, as it did last year and in 2011 in the early months.
Whatever the market is feeling these past two days, it is mostly confusion and consternation. The major averages took some serious dips into the red today before a wicked, final-hour, short-covering rally brought them close to unchanged on the day, eventually failing in the final half hour of trading.
One can hardly blame the shorts for pulling a quick trigger on their positions this afternoon. Attempting to short this market and counter the Fed's relentless money creation machine has been a losing trade for the better part of four years and its a testament to the resolve of the non-believers to hold true even on a two-day reversal.
US markets were not the only ones being handed their hats on Thursday. European markets were shattered even worse after a key reading on services and manufacturing fell from 48.6 in January to 47.3 in February, well short of expectations, where the consensus was 49. It may be finally dawning on european investors that various bond schemes by the ECB and austerity measures in various countries aren't producing the desired effects and may even be contributing to continued weakness in the Eurozone.
Taken together, the Eurozone and the US are beginning to look like a pair of gussied-up party girls after a long night on the town. The makeup is fading and cracking and the hangover is setting in with a passion.
Even though two days of trading does not constitute a trend of any sort, the past two have been the worst in succession for US stocks this year and there may not be much of a respite with sequestration issues and a budget battle looming between the opposing parties in the nation's capitol, and those are two fights the American public is hardly keen on, as congress and the president have both shown an unwavering reluctance to handle pressing business like adults, preferring to play the blame game and seek short-term, band-aid types of approaches.
How the markets play out over the next few weeks and months will go a long way toward determining the mood on Wall Street and Main Street, and the mood - despite the best intentions by business - is beginning to show signs that patience is growing exceedingly thin.
Elsewhere, gold got a bit of a dead-cat-bounce after a month of steady declines, giving back those gains during the open session, though silver remains mired at multi-month lows. The metal prices may move even lower, in union with stocks, although one would be hard-pressed to find an actual physical holder of either willing to part with any or all of his or her holdings. Suppression by central banks and other operators has been well-documented, and the more they push down, the more dire conditions for a sharp response become.
Crude oil also has been taken a beating as speculators are having their lunch eaten. Overabundant supplies of WTI crude and slack demand is causing a serious disruption in the trading, which has been nothing but straight up since December. Oil and gas at the pump are about to get a whole lot cheaper.
It's getting a little bit interesting out there after the champagne rally of the first seven weeks of the year. The A-D line has been in reversal for two straight days and today's new highs - new lows reading was nearly at parity, a condition foreign to these markets since last November.
Dow 13,880.62, -46.92 (0.34%)
NASDAQ 3,131.49, -32.92 (1.04%)
S&P 500 1,502.42, -9.53 (0.63%)
NYSE Composite 8,816.74, -66.88 (0.75%)
NASDAQ Volume 2,007,395,000
NYSE Volume 4,414,224,500
Combined NYSE & NASDAQ Advance - Decline: 1942-4569
Combined NYSE & NASDAQ New highs - New lows: 104-78
WTI crude oil: 92.84, -2.38
Gold: 1,578.60, +0.60
Silver: 28.70, +0.077
Thursday, February 14, 2013
St. Valentine's Day Mascara
No, that's not a misprint in the headline. The word is "mascara" - the stuff women apply to darken, thicken, lengthen, and/or define their eyelashes. It's a cosmetic, as in rouge, or lipstick, as in lipstick on a pig, which is exactly what the algos and buy-siders did to today's undeniably weak, directionless market.
Face it, Europe is a bona-fide basket case, Japan is devaluing its currency so fast that George Soros made nearly a billion dollars on the trade in just over three months.
The news coming out of Euro-fantasy-land was less than encouraging. Eurozone fourth quarter 2012 GDP fell by 0.6%.
Making matters a little more interesting - and more frightening - were the figures for the zone's three largest economies - Germany, France and Italy - whose own GDP fell by 0.6%, 0.3% and 0.9%, respectively.
The Eurozone, even after all the bank and sovereign bailouts, pledges of doing everything possible to promote growth by the likes of Germany's Angela Merkel and EU President Mario Draghi, has resulted in three consecutive quarters of negative GDP. Europe is already in the throes of an economic collapse, thanks largely to protectionism for banks and excessive liquidity from European central bankers (most of whom are Goldman Sachs alum, BTW).
While the GDP numbers may be bad enough, consider youth unemployment (ages 15-25) in the Eurozone to be spreading like the bubonic plague. Greece reported youth unemployment over 60%; Spain over 50% and Portugal just topped 40%. Thirteen of the 27 EU member states are reporting youth unemployment over 25%. Austerity: it's what's for dinner.
Europe is solid proof that the elite class is making up the rules as they go along, and the general public is viewed as collateral damage only. Here in the good old USA, we have our own concerns with the sequestration schedule to commence March 1, which will result in massive federal budget cuts. The president and congress haven't even begun to discuss how they'll handle that, though they uniformly say that sequestration (it doesn't rhyme with castration for no reason) is something they'd prefer to avoid.
Have they acted? No. Will they? Probably, but, like the fiscal cliff deal this past December, it will be a stop-gap measure and cost taxpayers more. Nobody ever cuts anything in Washington, only the rate of growth of programs, because what's important to them is keeping lobbyists and voters (government employees and beneficiaries of government largesse) dumb and happy.
So, on what does this algo-concocted market focus? Berkshire Hathaway's buyout of Heinz. Poor suckers that Americans are, they put ketchup on their chicken and pork hot dogs on day old buns while Uncle Warren reaps the profits. If ever there was a crony capitalist, Warren Buffet's picture belongs next to the definition.
Sure, unemployment claims were down - from 368K to 341K - but aren't those figures still too high? The new normal means just doing better than expectations, even if those expectations are sub-par. It's akin to taking your kid out for ice cream because he got a C in math instead of a D. As a nation, we've lowered our standards in everything from our political leaders to what passes for entertainment.
Along with everything else, we've lowered our standards for rational markets. Today's split decision is just another shining example of the truth hiding in plain sight. Sooner or later, even the talking heads on CNBC are going to come to the realization that making new all-time highs with a -0.1% GDP and unemployment at eight percent doesn't really pass the smell test. Someday. Maybe. Note the video below with Rick Santelli, everyone's favorite financial ranter, extrapolating out on what we've been saying nearly every day on this blog: that being a trader is nearly impossible under current conditions.
And, just as a side note, New York Mayor Bloomberg, who first banned drink containers larger than 16 ounces, has proposed a ban on styrofoam containers, and... it's likely to pass his rubber stamp city council.
Let's see, smokes are $10-12 a pack in NY, you can't smoke in any of the bars, night clubs or public buildings; you must drink from small containers and those soon cannot be made of styrofoam. All this makes one pine for the good old days of the seventies. Ed Koch was mayor. Son of Sam was shooting kids in parking lots. Reggie Jackson was blasting balls out of the original Yankee Stadium and you could buy just about any kind of drug - from weed to cocaine - on just about any street corner. Bloomberg. He's just not a fun guy.
Dow 13,973.39, -9.52 (0.07%)
NASDAQ 3,198.66, +1.78 (0.06%)
S&P 500 1,521.38, +1.05 (0.07%)
NYSE Composite 8,951.33, -4.27 (0.05%)
NASDAQ Volume 1,884,832,750
NYSE Volume 3,867,864,500
Combined NYSE & NASDAQ Advance - Decline: 3259-3130
Combined NYSE & NASDAQ New highs - New lows: 505-39
WTI crude oil: 97.31, +0.30
Gold: 1,635.50, -9.60
Silver: 30.35, -0.516
Face it, Europe is a bona-fide basket case, Japan is devaluing its currency so fast that George Soros made nearly a billion dollars on the trade in just over three months.
The news coming out of Euro-fantasy-land was less than encouraging. Eurozone fourth quarter 2012 GDP fell by 0.6%.
Making matters a little more interesting - and more frightening - were the figures for the zone's three largest economies - Germany, France and Italy - whose own GDP fell by 0.6%, 0.3% and 0.9%, respectively.
The Eurozone, even after all the bank and sovereign bailouts, pledges of doing everything possible to promote growth by the likes of Germany's Angela Merkel and EU President Mario Draghi, has resulted in three consecutive quarters of negative GDP. Europe is already in the throes of an economic collapse, thanks largely to protectionism for banks and excessive liquidity from European central bankers (most of whom are Goldman Sachs alum, BTW).
While the GDP numbers may be bad enough, consider youth unemployment (ages 15-25) in the Eurozone to be spreading like the bubonic plague. Greece reported youth unemployment over 60%; Spain over 50% and Portugal just topped 40%. Thirteen of the 27 EU member states are reporting youth unemployment over 25%. Austerity: it's what's for dinner.
Europe is solid proof that the elite class is making up the rules as they go along, and the general public is viewed as collateral damage only. Here in the good old USA, we have our own concerns with the sequestration schedule to commence March 1, which will result in massive federal budget cuts. The president and congress haven't even begun to discuss how they'll handle that, though they uniformly say that sequestration (it doesn't rhyme with castration for no reason) is something they'd prefer to avoid.
Have they acted? No. Will they? Probably, but, like the fiscal cliff deal this past December, it will be a stop-gap measure and cost taxpayers more. Nobody ever cuts anything in Washington, only the rate of growth of programs, because what's important to them is keeping lobbyists and voters (government employees and beneficiaries of government largesse) dumb and happy.
So, on what does this algo-concocted market focus? Berkshire Hathaway's buyout of Heinz. Poor suckers that Americans are, they put ketchup on their chicken and pork hot dogs on day old buns while Uncle Warren reaps the profits. If ever there was a crony capitalist, Warren Buffet's picture belongs next to the definition.
Sure, unemployment claims were down - from 368K to 341K - but aren't those figures still too high? The new normal means just doing better than expectations, even if those expectations are sub-par. It's akin to taking your kid out for ice cream because he got a C in math instead of a D. As a nation, we've lowered our standards in everything from our political leaders to what passes for entertainment.
Along with everything else, we've lowered our standards for rational markets. Today's split decision is just another shining example of the truth hiding in plain sight. Sooner or later, even the talking heads on CNBC are going to come to the realization that making new all-time highs with a -0.1% GDP and unemployment at eight percent doesn't really pass the smell test. Someday. Maybe. Note the video below with Rick Santelli, everyone's favorite financial ranter, extrapolating out on what we've been saying nearly every day on this blog: that being a trader is nearly impossible under current conditions.
And, just as a side note, New York Mayor Bloomberg, who first banned drink containers larger than 16 ounces, has proposed a ban on styrofoam containers, and... it's likely to pass his rubber stamp city council.
Let's see, smokes are $10-12 a pack in NY, you can't smoke in any of the bars, night clubs or public buildings; you must drink from small containers and those soon cannot be made of styrofoam. All this makes one pine for the good old days of the seventies. Ed Koch was mayor. Son of Sam was shooting kids in parking lots. Reggie Jackson was blasting balls out of the original Yankee Stadium and you could buy just about any kind of drug - from weed to cocaine - on just about any street corner. Bloomberg. He's just not a fun guy.
Dow 13,973.39, -9.52 (0.07%)
NASDAQ 3,198.66, +1.78 (0.06%)
S&P 500 1,521.38, +1.05 (0.07%)
NYSE Composite 8,951.33, -4.27 (0.05%)
NASDAQ Volume 1,884,832,750
NYSE Volume 3,867,864,500
Combined NYSE & NASDAQ Advance - Decline: 3259-3130
Combined NYSE & NASDAQ New highs - New lows: 505-39
WTI crude oil: 97.31, +0.30
Gold: 1,635.50, -9.60
Silver: 30.35, -0.516
Tuesday, September 4, 2012
Stocks Fail on Stormy Tuesday; The Misinformation Age
Well, it's not Monday, but it is the first day of the workweek, so stocks must go down. And they did, with the exception of the NASDAQ, which went from the worst-performing index to the best in a matter of 40 minutes - from roughly 2:00 pm to 2:40 pm EDT, going from a loss of 10 points to a gain of 15.
The Dow and S%P tagged along somewhat, but that drove the NAZ higher was none other than Apple (AAPL), which recorded almost half of its 9.73-point gain during that time period.
So, why then does CNBC report that the surge in stocks - the Dow was down nearly 115 points at the lows of the day, the NASDAQ off more than 26 - was due to a tweet by PIMCO's Bill Gross, who, mentioning that Mario Draghi, head of the ECB, willingness to offer 1, 2, and 3-year "loans" (bond purchases) to sovereign nations in the Eurozone, was reflationary and that investors should buy GOLD, TIPS AND REAL ASSETS.
Note that Gross did not say "STOCKS," though CNBC, the masters of misinformation, wishes the assembled masses of hoe viewers would believe that Mr. Gross is a perma-bull, when the exact opposite is true.
Welcome to the age of heightened misinformation.
There was a story today out of Stanford about organic foods not being any better than mass-produced, GMO, pesticide-riddled crap that drives US corporate agribusiness.
I'll take lower levels of pesticides in my urine for $400, Alex.
Just guessing, but could the major contributors to these Stanford researchers possibly be Monsanto and the US Dept. of Agriculture?
Other misinformation predominates what passes for news and journalism these days. For instance, according to the ECB's Mario Draghi, buying 1, 2, and 3-year bonds from sovereign nations does not violate the EU's basic treaty, which forbids such actions... OK. Obama and Romney sound like they differ widely on policies, when both, in fact, are nothing but shills for wealthy individuals and corporations which fund their campaigns. Facebook has lost 50% of market value since its IPO four short months ago, but it's still a solid company.
Trading volume, which was supposed to rebound as soon as all the Wall Street heavy hitters returned after Labor Day, was only a little better today than during July and August. US markets are so thinly-traded that manipulation by a group of well-timed players or even the PPT is easier than ever.
Keep an eye on gold and silver, maybe especially silver, which has exploded over the past three weeks. Gold's being suppressed below $1700, though it seems the central banking cartel cannot hold that level much longer. The Dow fell below 13,000 today, but was pumped back above it, ditto the S&P at 1400. These trades and ranges are due to break down soon.
Today's ISM reading of 49.6 was the third in a row showing contraction, though now, according to Steve Liesman of CNBC. the number to watch is 42.6, which would show contraction for the entire economy. Pure bunk.
Construction spending was off 0.9% in July. That a sizable decline, and why stocks fell out after the two reports at 10:00 am EDT.
Just to refresh one's memory, here's a nifty video of why we're where we are.
Dow 13,035.94, -54.90 (0.42%)
NASDAQ 3,075.06, +8.10 (0.26%)
S&P 500 1,404.94, -1.64 (0.12%)
NYSE Composite 8,002.31, -12.61 (0.16%)
NASDAQ Volume 1,505,270,625
NYSE Volume 3,086,772,250
Combined NYSE & NASDAQ Advance - Decline: 3319-2194
Combined NYSE & NASDAQ New highs - New lows: 288-64
WTI crude oil: 95.30, -1.17
Gold: 1,698.40, +10.80
Silver: 32.41, +0.97
The Dow and S%P tagged along somewhat, but that drove the NAZ higher was none other than Apple (AAPL), which recorded almost half of its 9.73-point gain during that time period.
So, why then does CNBC report that the surge in stocks - the Dow was down nearly 115 points at the lows of the day, the NASDAQ off more than 26 - was due to a tweet by PIMCO's Bill Gross, who, mentioning that Mario Draghi, head of the ECB, willingness to offer 1, 2, and 3-year "loans" (bond purchases) to sovereign nations in the Eurozone, was reflationary and that investors should buy GOLD, TIPS AND REAL ASSETS.
Note that Gross did not say "STOCKS," though CNBC, the masters of misinformation, wishes the assembled masses of hoe viewers would believe that Mr. Gross is a perma-bull, when the exact opposite is true.
Welcome to the age of heightened misinformation.
There was a story today out of Stanford about organic foods not being any better than mass-produced, GMO, pesticide-riddled crap that drives US corporate agribusiness.
Two studies of children consuming organic and conventional diets did find lower levels of pesticide residues in the urine of children on organic diets, though the significance of these findings on child health is unclear, noted the researchers.
I'll take lower levels of pesticides in my urine for $400, Alex.
Just guessing, but could the major contributors to these Stanford researchers possibly be Monsanto and the US Dept. of Agriculture?
Other misinformation predominates what passes for news and journalism these days. For instance, according to the ECB's Mario Draghi, buying 1, 2, and 3-year bonds from sovereign nations does not violate the EU's basic treaty, which forbids such actions... OK. Obama and Romney sound like they differ widely on policies, when both, in fact, are nothing but shills for wealthy individuals and corporations which fund their campaigns. Facebook has lost 50% of market value since its IPO four short months ago, but it's still a solid company.
Trading volume, which was supposed to rebound as soon as all the Wall Street heavy hitters returned after Labor Day, was only a little better today than during July and August. US markets are so thinly-traded that manipulation by a group of well-timed players or even the PPT is easier than ever.
Keep an eye on gold and silver, maybe especially silver, which has exploded over the past three weeks. Gold's being suppressed below $1700, though it seems the central banking cartel cannot hold that level much longer. The Dow fell below 13,000 today, but was pumped back above it, ditto the S&P at 1400. These trades and ranges are due to break down soon.
Today's ISM reading of 49.6 was the third in a row showing contraction, though now, according to Steve Liesman of CNBC. the number to watch is 42.6, which would show contraction for the entire economy. Pure bunk.
Construction spending was off 0.9% in July. That a sizable decline, and why stocks fell out after the two reports at 10:00 am EDT.
Just to refresh one's memory, here's a nifty video of why we're where we are.
Dow 13,035.94, -54.90 (0.42%)
NASDAQ 3,075.06, +8.10 (0.26%)
S&P 500 1,404.94, -1.64 (0.12%)
NYSE Composite 8,002.31, -12.61 (0.16%)
NASDAQ Volume 1,505,270,625
NYSE Volume 3,086,772,250
Combined NYSE & NASDAQ Advance - Decline: 3319-2194
Combined NYSE & NASDAQ New highs - New lows: 288-64
WTI crude oil: 95.30, -1.17
Gold: 1,698.40, +10.80
Silver: 32.41, +0.97
Thursday, March 22, 2012
Data Suggests Economies Weakening Worldwide
Mainstream media has tried - somewhat unsuccessfully - over the past few years, to convince the American public that all is well with ours and the world's economies. Of course, the rich media stars have a vested interest in maintaining the status of the status quo, because if they have to report the truth for a change, their political masters might think of replacing them, as has been the procedure for members of the elite media who don't play along.
That's why it's important to tune out the TV blur artists and tune into internet and alternative sources, who try their best to tell it like it is, without cheerleading for the corporatists and globalists who dominate the money.
Today's news out of China and Europe was nearly matched for awfulness by more sour data on the US housing market, sending stocks uniformly lower in one of the better routs of the year so far.
Early in the US morning, China reported the HSBC flash Purchasing Managers Index (PMI) fell to 48.1 in March, a four-month low, compared with a final reading of 49.6 in February. It was the fifth straight monthly reading that showed contraction, another worrisome sign that the the world is entering what looks like a global recession.
In Europe, the miss was huge in the EU PMI data, with the composite PMI for the Eurozone declining for the second consecutive month, to 48.7 in March from 49.3 in February. The rate of decline was also accelerating, stoking fears that the recession that is well underway in many Eurozone countries is spreading fast. Rosy expectations from expert economists (one should know well by now that said "experts" only know money printing and inflation, and not reality) called for a rise to 49.8. They were sorely disappointed and stocks fell across the european bourses. Any reading on any PMI under 50.0 signals contraction and the european economies are contracting more rapidly than the optimists in Brussels and London can imagine.
In the US, the bad news was exacerbated by a trifecta of gloom from the housing sector. Mortgage rates jumped above 4.0% for a 30-year fixed mortgage, home prices remained flat for the month of January (despite excellent house-buying weather) and the December gain of 0.7% was revised radically lower, to a gain of just 0.1%. Additionally, according to the Mortgage Bankers Association, mortgage applications fell 7.4% for the week ending March 16, compared with the week before.
As many skeptics have been saying for months, as US stocks posted incredible gains since October, there really isn't any recovery to be seen, anywhere.
And that's the nub of the argument. Government data is so overtly massaged, mangled, managed and misappropriated to meet the demands of the political and financial crowd that it can barely be trusted. The best advice is to just chop two percentage points off any data to get a realistic reading, rather than rely on the bogus statistics provided by the professional guessers in the governments' capture.
Of course, middle class Americans do have choices, though for the most part they are painful. Second jobs, kids at home, driving less, and eating a leaner more nutritious diet (you feel better and eat less) rather than the junk served at fast food and mid-priced restaurant chains are choices that are being made routinely by Americans forced to tighten their economic belts.
But of course, you won't hear that on either Bloomberg of CNBC, where everything is going up all the time, no matter what. It's been 3 1/2 years since the crash of '08. Nothing's changed, except that the lies have gotten larger.
Stocks were down hard until the closing hour, when, sure enough, a rally saved the major indices from finishing a heck of a lot lower. The day will come when all the pumping and pimping by the insiders won't be enough to save our precious stock markets from complete implosion. As usual, volume was non-existent.
With one more trading day ahead, stocks are poised for their worst weekly showing of the year.
Dow 13,046.14, -78.48 (0.60%)
NASDAQ 3,063.32, -12.00 (0.39%)
S&P 500 1,392.78, -10.11 (0.72%)
NYSE Composite 8,141.33, -78.01 (0.95%)
NASDAQ Volume 1,524,230,750
NYSE Volume 3,664,415,750
Combined NYSE & NASDAQ Advance - Decline: 1559-3952
Combined NYSE & NASDAQ New highs - New lows: 94-41
WTI crude oil: 105.35, -1.92
Gold: 1,642.50, -7.80
Silver: 31.34, -0.88
That's why it's important to tune out the TV blur artists and tune into internet and alternative sources, who try their best to tell it like it is, without cheerleading for the corporatists and globalists who dominate the money.
Today's news out of China and Europe was nearly matched for awfulness by more sour data on the US housing market, sending stocks uniformly lower in one of the better routs of the year so far.
Early in the US morning, China reported the HSBC flash Purchasing Managers Index (PMI) fell to 48.1 in March, a four-month low, compared with a final reading of 49.6 in February. It was the fifth straight monthly reading that showed contraction, another worrisome sign that the the world is entering what looks like a global recession.
In Europe, the miss was huge in the EU PMI data, with the composite PMI for the Eurozone declining for the second consecutive month, to 48.7 in March from 49.3 in February. The rate of decline was also accelerating, stoking fears that the recession that is well underway in many Eurozone countries is spreading fast. Rosy expectations from expert economists (one should know well by now that said "experts" only know money printing and inflation, and not reality) called for a rise to 49.8. They were sorely disappointed and stocks fell across the european bourses. Any reading on any PMI under 50.0 signals contraction and the european economies are contracting more rapidly than the optimists in Brussels and London can imagine.
In the US, the bad news was exacerbated by a trifecta of gloom from the housing sector. Mortgage rates jumped above 4.0% for a 30-year fixed mortgage, home prices remained flat for the month of January (despite excellent house-buying weather) and the December gain of 0.7% was revised radically lower, to a gain of just 0.1%. Additionally, according to the Mortgage Bankers Association, mortgage applications fell 7.4% for the week ending March 16, compared with the week before.
As many skeptics have been saying for months, as US stocks posted incredible gains since October, there really isn't any recovery to be seen, anywhere.
And that's the nub of the argument. Government data is so overtly massaged, mangled, managed and misappropriated to meet the demands of the political and financial crowd that it can barely be trusted. The best advice is to just chop two percentage points off any data to get a realistic reading, rather than rely on the bogus statistics provided by the professional guessers in the governments' capture.
Of course, middle class Americans do have choices, though for the most part they are painful. Second jobs, kids at home, driving less, and eating a leaner more nutritious diet (you feel better and eat less) rather than the junk served at fast food and mid-priced restaurant chains are choices that are being made routinely by Americans forced to tighten their economic belts.
But of course, you won't hear that on either Bloomberg of CNBC, where everything is going up all the time, no matter what. It's been 3 1/2 years since the crash of '08. Nothing's changed, except that the lies have gotten larger.
Stocks were down hard until the closing hour, when, sure enough, a rally saved the major indices from finishing a heck of a lot lower. The day will come when all the pumping and pimping by the insiders won't be enough to save our precious stock markets from complete implosion. As usual, volume was non-existent.
With one more trading day ahead, stocks are poised for their worst weekly showing of the year.
Dow 13,046.14, -78.48 (0.60%)
NASDAQ 3,063.32, -12.00 (0.39%)
S&P 500 1,392.78, -10.11 (0.72%)
NYSE Composite 8,141.33, -78.01 (0.95%)
NASDAQ Volume 1,524,230,750
NYSE Volume 3,664,415,750
Combined NYSE & NASDAQ Advance - Decline: 1559-3952
Combined NYSE & NASDAQ New highs - New lows: 94-41
WTI crude oil: 105.35, -1.92
Gold: 1,642.50, -7.80
Silver: 31.34, -0.88
Friday, October 28, 2011
Markets Calm After Massive Post-Eurofix Advance
For a day, at least, US equity markets responded in a fashion similar to what most wizened investors are accustomed. There were no wild swings or sudden accelerations, flash-crashes or HFT-inspired momentum runs. Volume was slight, as investors took a wait-and-see approach after Thursday's massive run-up, inspired by the market salve applied by European leaders.
One can imagine that said leaders engaged in some hearty back-slapping, after delay upon delay in dealing with the three separate issues involving the stability of the Euro as a currency and the Eurozone as a political/economic entity. Recapping, Greek bond-holders were to receive a 50% haircut, banks would get about $140 billion in recapitalizations and the size of the EFSF would be expanded to Euro 1 Trillion, or about $1.4 Trillion US. After negotiations had spilled into Thursday morning, the Europeans actually did deliver an outline that would satiate most of the news-hungry financial journalists and provided a framework for what is sure to be a fluid situation for months and years to come in one of the world's largest economic blocs.
For that, investors took a casual Friday attitude with them today, shoring up positions, taking profits and generally tape-watching to see if there would be any disruption to the relative calm. There were not, globally, as Asian markets were mostly higher, while European bourses and US equity markets were flat to split.
The Dow traded in a narrow range of less than 90 points, the NASDAQ and S&P 500 following with similar patterns. It was like a financial seventies flashback, without the disco music, flared jeans or leisure suits, thank goodness.
Only economic data releases could possibly upset the mood, but those delivered early in the day - personal income up 0.1%, personal spending rising by 0.6% and the University of Michigan's Consumer Sentiment gauge surprisingly up to a reading of 60.9 in October after a posting of 57.5 in September - were, for the most part, benign.
To say that it was a dull day was most likely an understatement and while some might decry the fact that there was no follow-through, one must consider the levels at which stocks are trading. October 2011 is on track to be not only the best October in the history of the Dow Jones Industrial Average, but the best month in terms of points gained in that index's long and storied history. There was probably as much chatter about the World Series as there was about stock moves. Investors have staked out positions and appear, for now, to be standing pat. A rest at these current levels would be neither surprising nor unusual. Even a further profit-taking decline would be an almost welcome reaction.
Macro-economic events have overshadowed what is usually a busy earnings season, though not completely. There is a sense that market turmoil has abated and global stocks are doing just fine, in deference to the protesters carousing in the Wall Street area and other cities.
Like kids after a raucous recess period, maybe all Wall Street wanted, or needed, was a time out.
There's a World Series game seven on Friday and an autumn weekend ahead. We'll worry about next week when it arrives.
Dow 12,231.11, +22.56 (0.18%)
NASDAQ 2,737.15, -1.48 (0.05%)
S&P 500 1,285.08, +0.49 (0.04%)
NYSE Compos 7,803.94, -10.05 (0.13%)
NASDAQ Volume 1,862,553,500
NYSE Volume 4,536,691,500
Combined NYSE & NASDAQ Advance - Decline: 2844-2792
Combined NYSE & NASDAQ New highs - New lows: 125-34
WTI crude oil: 93.32, -0.64
Gold: 1,747.20, -0.50
Silver: 35.29, +0.18
One can imagine that said leaders engaged in some hearty back-slapping, after delay upon delay in dealing with the three separate issues involving the stability of the Euro as a currency and the Eurozone as a political/economic entity. Recapping, Greek bond-holders were to receive a 50% haircut, banks would get about $140 billion in recapitalizations and the size of the EFSF would be expanded to Euro 1 Trillion, or about $1.4 Trillion US. After negotiations had spilled into Thursday morning, the Europeans actually did deliver an outline that would satiate most of the news-hungry financial journalists and provided a framework for what is sure to be a fluid situation for months and years to come in one of the world's largest economic blocs.
For that, investors took a casual Friday attitude with them today, shoring up positions, taking profits and generally tape-watching to see if there would be any disruption to the relative calm. There were not, globally, as Asian markets were mostly higher, while European bourses and US equity markets were flat to split.
The Dow traded in a narrow range of less than 90 points, the NASDAQ and S&P 500 following with similar patterns. It was like a financial seventies flashback, without the disco music, flared jeans or leisure suits, thank goodness.
Only economic data releases could possibly upset the mood, but those delivered early in the day - personal income up 0.1%, personal spending rising by 0.6% and the University of Michigan's Consumer Sentiment gauge surprisingly up to a reading of 60.9 in October after a posting of 57.5 in September - were, for the most part, benign.
To say that it was a dull day was most likely an understatement and while some might decry the fact that there was no follow-through, one must consider the levels at which stocks are trading. October 2011 is on track to be not only the best October in the history of the Dow Jones Industrial Average, but the best month in terms of points gained in that index's long and storied history. There was probably as much chatter about the World Series as there was about stock moves. Investors have staked out positions and appear, for now, to be standing pat. A rest at these current levels would be neither surprising nor unusual. Even a further profit-taking decline would be an almost welcome reaction.
Macro-economic events have overshadowed what is usually a busy earnings season, though not completely. There is a sense that market turmoil has abated and global stocks are doing just fine, in deference to the protesters carousing in the Wall Street area and other cities.
Like kids after a raucous recess period, maybe all Wall Street wanted, or needed, was a time out.
There's a World Series game seven on Friday and an autumn weekend ahead. We'll worry about next week when it arrives.
Dow 12,231.11, +22.56 (0.18%)
NASDAQ 2,737.15, -1.48 (0.05%)
S&P 500 1,285.08, +0.49 (0.04%)
NYSE Compos 7,803.94, -10.05 (0.13%)
NASDAQ Volume 1,862,553,500
NYSE Volume 4,536,691,500
Combined NYSE & NASDAQ Advance - Decline: 2844-2792
Combined NYSE & NASDAQ New highs - New lows: 125-34
WTI crude oil: 93.32, -0.64
Gold: 1,747.20, -0.50
Silver: 35.29, +0.18
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