Weekend Wrap: Stocks Gain, All Clear Signal Given Investors; Gold, Silver Dashed

Sorry. On the road again, drive-by post:

Two straight weeks of positive returns have pushed the major Us indices back above their 50-day moving averages, an okey-dokey signal to investors that the 0.25% federal funds interest rate cut from the FOMC is in the bag later this month (September 17-18), and the trade/tariff food fight between the US and China will continue unabated, alternating between "talks are ongoing," to "talks are off again," to "all options are on the table," or other such nonsense.

Trade and tariff talk seems to have a mysterious effect on traders, sending them into emotional buying and selling fits on headlines. Actually, the headline readers are algorithms, keyed to respond to major developments, or, in the case of the trade war, rumors of minor developments.

On the week, stocks vacillated, but moved higher in tandem, precious metals were dashed, as anyone who has an interest in the prices of such knew they would be. Both gold and silver are still trading near multi-year highs, so it's obvious that more flogging will be necessary until the morale of holders and buyers is sufficiently dashed.

As the global charade of overinflated sovereign budgets and overstretched consumers continues, the debt cycle looks to be extended at any cost by the overlords of banking, the central banks. Their position is as precarious as it has ever been. Rumors of an ouster of the Fed by congress in the United States are vastly overstated and wishful thinking by freedom-loving folks, yet they persist.

At this point in the day-to-day noise chamber that is Wall Street, caution is best served cold and reliance on a financial planner could be a major mistake going forward. It's all hands on deck, every man and woman for him/herself, babies being thrown overboard.

Happy sailing!

At the Close, Friday, September 6, 2019:
Dow Jones Industrial Average: 26,797.46, +69.26 (+0.26%)
NASDAQ: 8,103.07, -13.76 (-0.17%)
S&P 500: 2,978.71, +2.71 (+0.09%)
NYSE Composite: 12,933.38, +15.58 (+0.12%)

For the Week:
Dow: +394.18 (+1.49%)
NASDAQ: +140.19 (+1.76%)
S&P 500: +52.25 (+1.79%)
NYSE Composite: +196.50 (+1.54%)

WEEKEND WRAP: Worst Week Of Year For Stocks

Stocks were pretty well hammered this week, as shown in the figures below.

What did them in was not that the FOMC eased for the first time since 2008, but that it was only 25 basis points. Everybody, including President Trump, was looking for a 50 basis point cut, and they didn't get it, so market participants, already concerned at the ongoing tariff war with China, sold the news (after buying the rumor).

The drop was hardly anything to get excited over as all markets were down less than four percent. The coming week may outdo this last one however, as China has upped the ante Monday by devaluing the yuan (further proof that the Chinese are currency manipulators, along with everything else we don't like about them) and halting US agricultural imports.

These developments are very bad for a jittery market and this one has a case of the DTs. Watch for either a cascading, waterfall type event or some intervention by our friends at the NY Fed, those hale and hearty fellows that saved the Dow with a 200-point boost in the final half hour of trading on Friday. They're likely to be quite busy buying stocks again this week.

Keep a close eye on the divergence between big caps and small-to-mid caps. The smaller stocks are in danger of entering correction or even bear markets for some. They're not supported by the funds nor the fed, so they may be the first dominoes to fall in a crisis, which is entirely possible at this juncture.

Since the federal government has already put in place a moratorium on the debt ceiling, don't expect a September swoon, as we've seen so often when the government can't agree on a budget. With the agreement signed last week, the Trump administration and the congress has committed to spending well beyond whatever is allocated or budgeted. A trillion dollar deficit has now become the norm, though tariff income may begin to whittle away at that (there is some silver lining to the tariffs).

Generally, markets are looking quite unstable and another 3-4% decline could be in the cards. There are few catalysts for upside development. Gold and silver are not going anywhere, despite the howls coming from the Goldbugs and Silver Surfers. The rally has topped out. There may be a little movement to the upside, but it won't be allowed to develop into anything outstanding. When gold goes past $1500 and silver sells for more than $18 an ounce, that may be the time to change one's outlook.

WTI crude is going to end up in the $40s per barrel price by October, if not sooner. There's a massive glut and the economy is by no means overheating. Besides, nobody in the oil business wants to correctly identify the impact of solar, wind, increased efficiency in auto engines, or conservation by US drivers (who are getting older by the day and thus drive less and less).

The world is not going to come to an end this week, but we may be treated to a preview of what it will look like. 2023 is the outlier.

BTW: The 10-year treasury note is likely to sink below 1.50% THIS YEAR. Good for bond sellers and debtors. There is no inflation than cannot be sidestepped with alternatives or smart shopping.

At the Close, Friday, August 2, 2019:
Dow Jones Industrial Average: 26,485.01, -98.41 (-0.37%)
NASDAQ: 8,004.07, -107.05 (-1.32%)
S&P 500: 2,932.05, -21.51 (-0.73%)
NYSE COMPOSITE: 12,839.51, -81.31 (-0.63%)

For the Week:
Dow: -707.44 (-2.60%)
Dow Transports: -402.24 (-3.73%)
NASDAQ: -326.14 (-3.92%)
S&P 500: -93.81 (-3.10%)
NYSE COMPOSITE: -396.00 (-2.99%)

Did You Fall For the Fakery? Fed Eases, Stocks Slide, Dollar Gains; Silver Overbought

Today, July 31, 2019, the FOMC of the Federal Reserve System cut the federal funds rate by 25 basis points, as expected.

What was unexpected was the response from the market, which stumbled badly on the news. It was a classic case of "buy the rumor, sell the news," herd mentality. The Fed did not have to cut rates, obviously, just as they were wrong to raise them every quarter by 25 basis points since December, 2015.

The Fed is still out in uncharted territory, unable to raise rates because the economy is just chugging along at less than three percent growth, which is fine, in reality. The trouble is that investors want more. They are chasing yield, but what they're really doing is pushing on a string, exacerbating an already overbought market at or near record highs.

Here's the truth of the matter:

The system broke in 2008 and it was not fixed, just patched up with lots of liquidity thanks to Uncle Sugars at the Fed, BoJ, PBOC, ECB, SNB.

Fiat is an arbitrary order. In other words, this is "money." It's not. Yen, euros, dollars are currency. The intrinsic value of all fiat is zero.

This fakery will continue until there's nothing left except mega-corporations, governments, central banks, and slaves (almost everybody).

Noting that we're phasing through a zombie economy, much like that of Japan, with an aging demographic, systemic debt problems, and myopic, corrupt governments worldwide, there is little the Fed or any central bank can do but to continue the fakery until the public is completely bereft of all assets. Then they will declare the global economy dead, start a new order, promise prosperity for everyone, and deliver a global depression.

There's no way around it. All developed nations are bankrupt. The central banks create money (actually, currency) out of thin air, sell it as debt to governments, at interest, collect their skim and enrich themselves. The central banks work for themselves, not the governments they shadily represent, nor the citizens who make use of the currency.

They have no way out. Government debts (the US is already $22 trillion behind) will never be repaid, so the central banks can only perpetuate the fraud until they can't.

As far as precious metals are concerned, they will continued to be whipped like a rented mule. The recent run-up was only a diversion, a ruse, designed to get more people to buy the stuff. Now, gold and silver will be sold off and the bankers will eventually accumulate at lower prices.

That is why I haven't changed my position or bought into the silver rally from $14.50 to $16.50 per ounce. The bulk of the move came about when the dollar was weakening. Now it is strengthening again, meaning you will buy less gold with the same amount of dollars. The math is simple.

All told, stocks are overbought. the metals are currently overbought, but not for long. Bonds have much more rally in them than may be evident superficially. The bond rally has been ongoing for 35 years and it's not going to stop here. The eventual end-point is negative rates, or NIRP (Negative Interest Rate Policy), as is the current regime in the rest of the world. More than $13 trillion in bonds are priced at negative yields, which tells much about the future prospects for developed nations (and semi-developed China and India).

I continue to be targeting silver for $12.35 by 2021 or sooner. If it goes above $20, that would be a shock and a sign that the global financial system is melting away faster than anyone thought, but it's not likely to happen.

The global economy is a train wreck in super-slow motion. It is unlikely to implode before 2021, so there is still time to prepare for TEOTWAWKI.

That is all for now. Good luck.

At The Close, Wednesday, July 31, 2019:
Dow Jones Industrial Average: 26,864.27, -333.75 (-1.23%)
NASDAQ: 8,175.42, -98.19 (-1.19%)
S&P 500: 2,980.38, -32.80 (-1.09%)
NYSE COMPOSITE: 13,066.60, -120.61 (-0.91%)

Stocks Tank On Fed Rate Hike (Thank You, Captain Obvious); Transportation Index In Bear Market

What a racket!

As if there was ever any doubt that the Fed would hike the federal funds rate another 25 basis points, stocks shot up at the open and maintained a very positive stance right up until 2:00 pm ET, when the Fed did what everybody knew they would do all along.

Seriously, who in their right mind was buying prior to the rate hike? People with money to burn?

To get an idea of the kind of lunatics trading stocks on Wall Street, the Dow was up just about 300 points at 1:57 pm. By 2:08 pm - following the policy announcement - it was essentially flat... and it went down from there, eventually losing 351 points, closing at a new low for 2018.

Over the same time span, the NASDAQ was up 65 points, but 11 minutes later was down 38. The same fate that befell the Dow was true for NASDAQ, S&P, and NYSE Composite: fresh 2018 lows.

The Transportation Index was absolutely devastated, closing at 9,147.66, down 297.81 points (-3.15%), pushing the transports into bear market territory, down 21% from its September high.

OK, so it was one of those "heads, Fed wins, tails, you lose," kind of deal. There was no way the Fed was going to surprise anybody. It's simply not their style. They telegraph everything they do, because they're so, so important to the proper functioning of the economy, and they never balk at even the most obvious data or implication. Balderdash.

The Fed should be run out of town just like all other central banks have been, but the US sheeple population has put up with this particular band of thieves for the past 105 years. The Fed is why we have booms and busts, never-ending inflation, recessions, absurdly high interest rates on credit cards, and incomes that just don't quite match up with expenses for much of the former middle class.

The good news about the Fed's rate increase is that it may be the last one for a while. They may hike a few times in 2019, or, depending on how the stock market and/or ec responds, they may not hike at all. Meanwhile, they'll keep losing money by unwinding their massive, overvalued bond portfolio of US treasuries and toxic mortgage-backed securities dating from the sub-prime glory days.

Elsewhere, crude oil rallied a little bit, gaining to $47 and change per barrel. Gold and silver were punished, though each was down less than one percent. The real lashing will come tomorrow or at the latest, by the end of the year.

Thus, the Fed, in its infinite wisdom (greed), decided that it would be in its own best interests to destroy the global economy by hiking the overnight and prime rate for the ninth time since 2015.

Happy days for some. tears and more pain to come for many more.

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
12/18/18	23,675.64	+82.66	-1862.92
12/19/18	23,323.66	-351.98	-2214.90

At the Close, Wednesday, December 19, 2018:
Dow Jones Industrial Average: 23,323.66, -351.98 (-1.49%)
NASDAQ: 6,636.83, -147.08 (-2.17%)
S&P 500: 2,506.96, -39.20 (-1.54%)
NYSE Composite: 11,371.84, -130.32 (-1.13%)

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%)

WEEKEND WRAP: Powell Puts Positive Spin On Rates, Economy; Stocks Respond With Banner Gains

As much as stocks were flattened last week, they gained back this week, and then some, rebounding mainly off the lips of Fed Chairman Jerome Powell, who uttered two words which are sure to become ensconced within the annuls of great Fed Chairman one liners, such as Alan Greenspan's notorious "irrational exuberance."

Having a way with words, especially concise two-word constructs, Powell uttered, in a speech at the Economic Club of New York, that interest rates were "just below" neutral, sending stocks spiraling upwards on Wednesday.

Those gains followed two prior sessions with more pedestrian advances, the Wednesday push a 617-point blast on the Dow which sent the industrials into positive territory not only for the month, but for the year as well. The week's gains were capped off by a window-dressing close on Friday, with the Dow posting a nearly 200-point gain, all of which came after 1:30 pm ET.

Events of the week - from Powell's speech to Trump's dealings at the G20 in Buenos Aires - managed to put a positive spin on the outlook for stocks going into the final month of the year and the holiday shopping season.

Effectively, what Powell's statement on interest rates did was virtually assure a 25 basis point hike in the federal funds rate and then a pause at what would have been the next logical rate increase, at the March FOMC meeting, and beyond. Whether the Fed's members actually believes that an overnight rate of 2.25-2.50% neither hinders nor aids the US economy is a question open for debate, as most believed that more rate hikes were necessary per the minutes of the last FOMC meeting earlier in November.

That sentiment put a bit of a damper on the market when released on Thursday, but, as Wall Street memories seem exceedingly short these days, the flattish close didn't have any lasting effect.

Once into 2019, the Fed is likely to continue to spin positively, as Janet Yellen's honorable mention entry in the two-word scrabble that is Fedspeak, "data dependent" should be rolling off the lips of more than a few Fed officials in the cold months of winter.

Undeniably, a dovish Federal Reserve can be nothing but good for stocks, which are the de facto underpinning of the US economy. The Fed - and Powell in particular - may have been taking a sideways glance at the housing market as well, another pillar in the economic construct. Rising mortgage rates have shut down advances in new and existing home sales, punishing home builder stocks like Lennar (LEN), D.R. Horton (DHI), and KB Home (KBH). A stagnant housing market may have been instrumental in the formation of Powell's suddenly-accomodative stance.

Even with the rebound this week, stocks still have a pretty large slope to scale to get back to September or October's all-time highs. The NASDAQ still has issues with falling tech stocks and GM's announcement that it was shuttering five factories and laying off 14,000 workers had a chilling effect on what was an overwhelmingly positive week.

Elsewhere, oil continued to hover at the $50 level for WTI crude, precious metals remained flat to negative, but other global markets perked up a bit.

When the FOMC meets on December 18-19, there will be little doubt about their direction. A rate hike of 0.25% is practically baked into the cake. After that, however, it certainly appears the Fed will consider its work done, for now, at least. The next rate hike - and there is almost certainly to be one or two in the next 12-18 months - will probably come after some gaudy economic data or fresh highs in the stock market.

Until then, the skies are blue and smooth sailing is ahead.

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98
11/2/18	25,270.83	-109.91	+155.07
11/5/18	25,461.70	+190.87	+345.94
11/6/18	25,635.01	+173.31	+519.25
11/7/18	26,180.30	+545.29	+1064.54
11/8/18	26,191.22	+10.92	+1075.46
11/9/18	25,989.30	-201.92	+873.54
11/12/18	25,387.18	-602.12	+271.42
11/13/18	25,286.49	-100.69	+170.27
11/14/18	25,080.50	-205.99	-35.72
11/15/18	25,289.27	+208.77	+173.05
11/16/18	25,413.22	+123.95	+297.00
11/19/18	25,017.44	-395.78	-98.78
11/20/18	24,465.64	-551.80	-650.58
11/21/18	24,464.69	-0.95	-651.53
11/23/18	24,285.95	-178.74	-830.27
11/26/18	24,640.24	+354.29	-475.98
11/27/18	24,748.73	+108.49	-367.49
11/28/18	25,366.43	+617.70	+250.21
11/29/18	25,342.72	-23.71	+226.50
11/30/18	25,538.46, +199.62	-23.71	+426.12

At the Close, Friday, November 30, 2018:
Dow Jones Industrial Average: 25,538.46, +199.62 (+0.79%)
NASDAQ: 7,330.54, +57.45 (+0.79%)
S&P 500: 2,760.17, +22.41 (+0.82%)
NYSE Composite: 12,457.55, +68.18 (+0.55%)

FOR THE WEEK:
Dow: +1,252.51 (+5.16%)
NASDAQ: +391.55 (+5.64%)
S&P 500: +127.61 (+4.85%)
NYSE Composite: +421.31 (+3.%0%)

Fed Signals More Rate Increases; Market Dynamics Favor Investment Diversity

In what can be characterized as more of a sigh than a panicked scream, stocks sold off Thursday afternoon when the Fed wrapped up its November FOMC meeting, announcing that they had no intention of changing plans for a fourth federal funds rate increase this year and at least three more in 2019.

Of the four major insides, only the Dow managed to post a gain, though it was minuscule, at a mere 10 points.

Fears that the Fed might put some kind of kibosh on the Trump expansion have been stocked by the president himself, who would prefer lower interest rates in order to keep the punch bowl of cheap money full. It's unlikely President Trump will get his wish, because the Fed plan has been in place for years, is currently being executed and seems - despite pullbacks in stocks in February and again in October - to be working as well as can be expected.

The US economy has roared back to life over the past year, thanks in part to Trump's individual and corporate tax cuts, repatriation of foreign funds by companies, and still fairly easy policy by the Fed.

While the stock market does not provide complete portfolio of the US economy, it does act as a kind of proxy. Stocks generally gain when the economy is doing well, and falls when recessions hit or external events cause disruptions to the usual flow of funds into equities.

Buybacks have been providing an inordinate amount of upside for the general markets. 2018 is on pace to set a record for corporate stock buybacks, which has an immediate effect on valuations by reducing the number of shares outstanding. To the general public, stock buybacks look like regular buying, as they operate in the background and the actual buyers are not disclosed. It's assumed that as companies buy their own stock rather than reinvest in equipment, facilities, workers, or expansion of their businesses, the sellers are funds and/or large stakeholders, reaping profits and moving on to the next apple ripe for picking.

Generally seen as good practice, stock buybacks don't actually add value, though in terms of shareholder value, they do return more profits in higher share price and, often, increased dividends. It's a great panacea for stockholders, who merely have to hold shares and profit. This scenario has been unprecedented, but has lasted since the Great Financial Crisis of 2008-09 and continues to provide a backstop to stocks. When the buybacks stop, so will the easy money for shareholders, but, the practice still appears to have more to run, though the pace has slowed over the past three to six months.

All of this has created a very dynamic and fluid market, in which all manner of investment strategies can produce solid results. With wild swings on nearly a daily basis, individual stocks or sectors (via ETFs) can be either held, sold short or bought. The current environment is likely a major boon to brokers such as Merrill Lynch, Schwab, eTrade and others in the game, who undoubtably will be seeing increased trading in an active, unbridled market.

Thus, the answer to the age-old question, "Buy, sell, or hold?" might today be answered correctly by responding, "all of the above."

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98
11/2/18	25,270.83	-109.91	+155.07
11/5/18	25,461.70	+190.87	+345.94
11/6/18	25,635.01	+173.31	+519.25
11/7/18	26,180.30	+545.29	+1064.54
11/8/18	26,191.22	+10.92	+1075.46

At the Close, Thursday, November 8, 2018:
Dow Jones Industrial Average: 26,191.22, +10.92 (+0.04%)
NASDAQ: 7,530.88, -39.87 (-0.53%)
S&P 500: 2,806.83, -7.06 (-0.25%)
NYSE Composite: 12,622.04, -57.06 (-0.45%)

Dow's Recent Gains Are Adding Up

With the midterm election turmoil nearly out of the way, stocks have begun the month of November in grand, year-ending fashion, the Dow Jones Industrial Average posting gains in three of the last four sessions, and, extending back into the final days of October, five of the last six were winners.

This string of positives has managed to erase much of the pain that accompanied October, which registered as the worst month of 2018 for stocks. In the past seven sessions, the Dow has advanced nearly 1200 points, an impressive performance, and should continue the path forward since there are few impediments ahead.

The Fed's FOMC meeting this Wednesday and Thursday should prove a non-event, as the committee is almost certain to stand pat on interest rates until the December meeting, when a 25 basis point hike in the federal funds rate is a virtual lock.

The overall outlook is strong for stocks presently, though headwinds could still emerge, October's declines still fresh in the mind, but, sentiment seems to have shifted from selling into rallies to buying on dips once again, and the Dow has regained roughly half of the losses incurred since marking an all-time high on October 3rd.

Other indices have followed suit, though the NASDAQ continues to lag, with many of the tech leaders now laggards, representing, to some, buying opportunities. To others, these tech firms have become no-go zones, appealing only to the most speculative of investing types.

Markets prefer stability, and November appears to offer plenty in the way of complacency and compliant data readings. With holidays straight ahead, it would not be a surprise to stocks exceed their previous highs.

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98
11/2/18	25,270.83	-109.91	+155.07
11/5/18	25,461.70	+190.87	+345.94
11/6/18	25,635.01	+173.31	+519.25

At the Close, Tuesday, October 6, 2018:
Dow Jones Industrial Average: 25,635.01, +173.31 (+0.68%)
NASDAQ: 7,375.96, +47.11 (+0.64%)
S&P 500: 2,755.45, +17.14 (+0.63%)
NYSE Composite: 12,480.06, +55.75 (+0.45%)

Weekend Wrap: Stocks Slip, Yields Rise, Precious Metals Bid

Stocks closed out the week n subdued fashion, with the major averages hugging the unchanged line throughout most of Friday's session.

Overall, the close-out of the quarter was less dramatic than usual, with little to no "window dressing" done by traders and/or speculators. Stocks were generally down for the week, with the notable exception of the NASDAQ, which was the only one of the major indices to post a weekly gain.

Other than Tesla (TSLA), in which, over the weekend, CEO Elon Musk's deal with the SEC on the heels of their lawsuit, there was little to hang a trade on in the final week of the month. Musk agreed to pay a $20 million fine and the same amount from company coffers. While Musk was stripped of his role as chairman of the Tesla board of directors for three years, he will continue on as CEO.

Stocks remained near all-time highs, and October usually brings additional volatility, such with elections on the horizon and third quarter earnings trickling out after the first week of the month.

After the Fed's FOMC raised the federal funds rate to 2.00-2.25% on Wednesday, stocks fell somewhat out of favor, as bond yields continue to attract large, safety-seeking money. The 10-year note finished the week comfortably above the 3.00% demarkation line, at 3.056%, a number some analysts suggest may cause the demise of some stocks, especially the more speculative variety (read: tech) and those that do not offer a steady dividend.

Crude oil was higher for the week, with WTI topping out over $73 per barrel, a four-year high. Pinching drivers at the pump may not be conducive to gains in equity prices. High gas prices act as a tax on all consumers, but affect the poor and middle class the hardest.

Gold and silver caught some bids late in the week though they continue to wallow in a prolonged slump near three-year lows. Inflation, being still somewhat tame, will likely keep a lid on the prices of precious metals and commodities overall.

Dow Jones Industrial Average September Scorecard:

Date	Close	Gain/Loss	Cum. G/L
9/4/18	25,952.48	-12.34	-12.34
9/5/18	25,974.99	+22.51	+10.17
9/6/18	25,995.87	+20.88	+31.05
9/7/18	25,916.54	-79.33	-48.28
9/10/18	25,857.07	-59.47	-107.75
9/11/18	25,971.06	+113.99	+6.24
9/12/18	25,998.92	+27.86	+34.10
9/13/18	26,145.99	+147.07	+181.17
9/14/18	26,154.67	+8.68	+189.85
9/17/18	26,062.12	-92.55	+97.30
9/18/18	26,246.96	+184.84	+282.14
9/19/18	26,405.76	+158.80	+440.94
9/20/18	26,656.98	+251.22	+692.16
9/21/18	26,743.50	+86.52	+778.68
9/24/18	26,562.05	-181.45	+597.23
9/25/18	26,492.21	-69.84	+527.39
9/26/18	26,385.28	-106.93	+420.46
9/27/18	26,439.93	+54.65	+475.11
9/28/18	26,458.31	+18.38	+493.49

At the Close, Friday, September 28, 2018:
Dow Jones Industrial Average: 26,458.31, +18.38 (+0.07%)
NASDAQ: 8,046.35, +4.38 (+0.05%)
S&P 500: 2,913.98, -0.02 (0.00%)
NYSE Composite: 13,082.52, -23.20 (-0.18%)

For the Week:
Dow: -285.19 (-1.07%)
NASDAQ: +59.40 (+0.74%)
S&P 500: -15.69 (-0.54%)
NYSE Composite: -153.92 (-1.16%)

Fed Raises Rates, Stocks Tank, Regular People Get Squeezed

Sometimes, there's just too much of a good thing.

Like booze, or sex, or food, or federal funds interest rate increases.

Yes, one of those is different from the others, but, if you're a big brain at the Federal Reserve, maybe not. People who live for an love money might have the same kind of reactions ordinary people have to normal stimuli from money-induced pleasure.

Keeping interest rates at near zero for such a long time, from 2008 to 2015, had to be hard on people at the Fed. There was a lot of stress during that time, and the FOMC governors and presidents of the regional banking hubs had to make up for their lack of money pleasure (ZIRP) by printing oodles of dollars out of thin air (QE). It was an artificial high, a necessary evil to some, and everybody knew it would have to come to an end.

Nothing brings a smile to the face of a banker, central or otherwise, than interest rate increases. It means more money in their silk-lined pockets.

Ordinary humans may not be able to comprehend the exhilaration of a 0.25% increase in the federal funds rate, but central bankers do. They revel in it. Imagine, with one simple policy announcement, making an extra $2.5 billion per year. That's real excitement. And that's just the interest on a trillion dollars. The Fed is handling one heck of a lot more than just a didly trillion. By golly, that's just pocket change.

Rest assured, there are a lot of bemused smiles at the Fed this afternoon. Probably some good old back-slapping, toasting with fine wine, and smoking of expensive cigars, such is the wont of the central banking elite. They've made themselves a mighty handy profit today, and you're paying for it, on your credit cards, mortgages, personal loans, car loans and leases and just about every other negotiable debt instrument you can think of. Business is paying the piper as well. In spades.

So, does the market reaction to the Fed's scheme surprise anybody? Nope. Higher interest rates are always bad for consumers, especially those carrying debt, which is just about everybody these days.

The major indices were cruising along with decent gains until the Fed's announcement at 2:00 pm EDT. After a pause and a slight rise, stocks began to slip. From it's intra-day peak at 2:15 pm, the Dow shed 231 points, the NASDAQ lost 78 points. The move was significant. The Dow has posted losses three days in a row. Correlation, in this case, seems to imply causation.

Wall Street investors aren't immune to the interest rate malaise. They know where their bread is buttered and some surely shifted some dough out of stocks and into bonds, or cash, or art, or expensive cars.

The Fed's insistence on raising rates every quarter has gotten to be a pretty definable pattern by now, but some people are beginning to question when it's all going to end and also, how it's going to end.

Will the stock market and all those juicy profits go down in flames? Hard to say, but a 3.10% yield on a ten-year treasury note ($31,000 a year risk free on a $1,000,000 investment) isn't hard to take, and, in the world of rich people with millions of dollars, yen, or euros to throw around, many will take it.

The rich just got a little bit richer. The poor didn't get any poorer, but the people in the middle (debtors) did.

Dow Jones Industrial Average September Scorecard:

Date	Close	Gain/Loss	Cum. G/L
9/4/18	25,952.48	-12.34	-12.34
9/5/18	25,974.99	+22.51	+10.17
9/6/18	25,995.87	+20.88	+31.05
9/7/18	25,916.54	-79.33	-48.28
9/10/18	25,857.07	-59.47	-107.75
9/11/18	25,971.06	+113.99	+6.24
9/12/18	25,998.92	+27.86	+34.10
9/13/18	26,145.99	+147.07	+181.17
9/14/18	26,154.67	+8.68	+189.85
9/17/18	26,062.12	-92.55	+97.30
9/18/18	26,246.96	+184.84	+282.14
9/19/18	26,405.76	+158.80	+440.94
9/20/18	26,656.98	+251.22	+692.16
9/21/18	26,743.50	+86.52	+778.68
9/24/18	26,562.05	-181.45	+597.23
9/25/18	26,492.21	-69.84	+527.39
9/26/18	26,385.28	-106.93	+420.46

At the Close, Wednesday, September 26, 2018:
Dow Jones Industrial Average: 26,385.28, -106.93 (-0.40%)
NASDAQ: 7,990.37, -17.10 (-0.21%)
S&P 500: 2,905.97, -9.59 (-0.33%)
NYSE Composite: 13,102.68, -57.92 (-0.44%)

Dow Lower Again As Investors Ponder Fed Wisdom

Well, if you're content with having a bunch of highly-paid academics controlling your finances, you're in luck. The Federal Reserve has been hard at work for over 100 years to guarantee that they get a cut of everybody's money, mostly because they create it themselves, out of thin air, with no backing with tangible assets, like gold, or silver, or anything like that.

As it says on their debt instruments, full faith and credit.

Therein lies the problem. Most people, if they understood how the Federal Reserve operates - mostly in secret, and outside the boundaries of government (it is a private banking system, after all. Shhh!) - would pine for foregone days when gold and silver were the coin of the realm, so to speak, when people and businesses weren't amortized and taxed to the bare bones of their existence.

Full faith is something the Fed takes for granted, assuming that 99% of the public has no idea how money works. Credit is their life blood. Every dollar created by the Fed is a debt, which is why the so called "national debt" can never be repaid. If it was, there would be no money. Everybody would be broke.

Is that what is occupying the minds of the great investors and traders of Wall Street and their bankers, brokers, cronies and insiders? Probably not. They're more interested in getting and keeping as much of the Federal Reserve money they can, investing it in more stocks, bonds, debentures, options, futures and maybe along the way, some real assets like real estate, gold, silver, art, vehicles, machinery.

Almost nobody really cares about how the Fed or other central banks operate. It's a fact. Most people are caught up in the matrix of jobs, bills, rents, taxes, and debt. They don't have time to study the intricate workings of central banks, which, of course, is how the central bankers wish. The less scrutiny on them, the more they and their member banks (all the big ones) make, unaudited and without interference.

What the traders on the exchanges today were contemplating was whether or not the Fed will actually raise the federal funds rate (the rate banks charge each other for overnight loans) to 2.00-2.25% tomorrow at 2:00 pm EDT when the FOMC policy rate decision is announced.

The simple answer is that they almost certainly will. The market has priced this in. At the least, the 10-year treasury note has gotten the memo. It's holding pretty steady at 3.10% yield, anticipating the Fed's very well-telegraphed interest rate ploy.

To many of the top traders and investors, the Fed's bold actions, in the face of a somewhat gradual economic improvement, are already too much and too soon. Some analysts are suggesting that with the 10-year note over three percent, big money will forego the risks inherent in the stock market and shift more money into bonds. The 10-year is a benchmark. Better returns can be made in corporate debt offerings, junk bonds, shorter term offerings, or munis, all of which carry more risk, but not significantly so.

Thus, the market will tell everybody, including the wizened old men and women at the Fed, what the federal funds rate should be by voting with their feet. If stocks continue to rise, it gives the Fed a free pass to increase rates another 25 basis points in December. If the market declines, the Fed will be on its own.

The Fed has raised rates at a very steady pace since December 2016, adding 0.25% every quarter, in March, June, September, and December. They may be nearing a point at which they need to take a break.

The questions are whether or not they will see it, understand it, and how they will act upon it.

Dow Jones Industrial Average September Scorecard:

Date	Close	Gain/Loss	Cum. G/L
9/4/18	25,952.48	-12.34	-12.34
9/5/18	25,974.99	+22.51	+10.17
9/6/18	25,995.87	+20.88	+31.05
9/7/18	25,916.54	-79.33	-48.28
9/10/18	25,857.07	-59.47	-107.75
9/11/18	25,971.06	+113.99	+6.24
9/12/18	25,998.92	+27.86	+34.10
9/13/18	26,145.99	+147.07	+181.17
9/14/18	26,154.67	+8.68	+189.85
9/17/18	26,062.12	-92.55	+97.30
9/18/18	26,246.96	+184.84	+282.14
9/19/18	26,405.76	+158.80	+440.94
9/20/18	26,656.98	+251.22	+692.16
9/21/18	26,743.50	+86.52	+778.68
9/24/18	26,562.05	-181.45	+597.23
9/25/18	26,492.21	-69.84	+527.39

At the Close, Tuesday, September 25, 2018:
Dow Jones Industrial Average: 26,492.21, -69.84 (-0.26%)
NASDAQ: 8,007.47, +14.22 (+0.18%)
S&P 500: 2,915.56, -3.81 (-0.13%)
NYSE Composite: 13,161.64, -0.42 (0.00%)

Weekend Wrap: Dow, S&P At Record Levels, Tech Shunned, Fed To Raise Rates

This was a banner week for the Dow Jones Industrial Average, ramping nearly 590 points - the most since late March - and eclipsing the old record high close from January 26 (26,616.71) and leaving it in the dust.

While the Dow and S&P set records, tech stocks didn't fare as well, closing down for the week as investors continued to shed shares of some of the more widely-held US companies, like Facebook (FB), Netflix (NFLX), Alphabet, nee Google (GOOG), Amazon (AMZN), and Apple (AAPL).

The biggest losers were Amazon (-55.18, -2.80%) and Apple (-6.18, -2.76%) as traders recorded record volume on the AA's of the so-called FAANGs.

Bond yields spiked, with the 10-year note rising beyond the Maginot line of 3.00%, ending the week with a yield of 3.07%.

Precious metals continued to remain in the doldrums, with gold and silver still hovering just above three-year lows.

The week ahead should provide some volatility as the Fed's FOMC policy meeting convenes Tuesday and Wednesday, with a policy announcement set for Wednesday afternoon which is anticipated to raise the federal funds rate for the seventh consecutive quarter, to 2.00-2.25%.

Playing a dangerous game of chicken with the market, the Fed continues its attempt to pour cold water on the emerging strong economy and the even-stronger US dollar, which has smashed currencies in countries from Turkey to Argentina into financial chaos.

The Fed insists upon rate increases to slow the economy, though it's unclear that the US economy is expanding at anything approaching red-hot status. While second quarter GDP came in higher than expectations, at 4.2 percent annualized, the three prior readings, from the third and fourth quarters of 2017 and the 2018 first quarter were still cool, at 2.8%, 2.3%, and 2.2%, respectively.

GDP in the second quarter was the highest since the third quarter of 2014. More than a few analysts and economists have expressed fears of a second half downturn in GDP growth. Should their forecasts come to fruition it would be seen as a strike against the aggressive Fed rate-hiking and an appeal for them to stop before they crush the nascent American expansion.

After the Fed's policy announcement this week, the third estimate of GDP growth will be revealed on Thursday, September 27.

Dow Jones Industrial Average September Scorecard:

Date	Close	Gain/Loss	Cum. G/L
9/4/18	25,952.48	-12.34	-12.34
9/5/18	25,974.99	+22.51	+10.17
9/6/18	25,995.87	+20.88	+31.05
9/7/18	25,916.54	-79.33	-48.28
9/10/18	25,857.07	-59.47	-107.75
9/11/18	25,971.06	+113.99	+6.24
9/12/18	25,998.92	+27.86	+34.10
9/13/18	26,145.99	+147.07	+181.17
9/14/18	26,154.67	+8.68	+189.85
9/17/18	26,062.12	-92.55	+97.30
9/18/18	26,246.96	+184.84	+282.14
9/19/18	26,405.76	+158.80	+440.94
9/20/18	26,656.98	+251.22	+692.16
9/21/18	26,743.50	+86.52	+778.68

At the Close, Friday, September 21, 2018:
Dow Jones Industrial Average: 26,743.50, +86.52 (+0.32%)
NASDAQ: 7,986.96, -41.28 (-0.51%)
S&P 500: 2,929.67, -1.08 (-0.04%)
NYSE Composite: 13,236.44, +11.33 (+0.09%)

For the Week:
Dow: +588.83 (+2.25%)
NASDAQ: -23.09 (-0.29%)
S&P 500: +24.69 (+0.85%)
NYSE Composite: +185.92 (+1.42%)

Blue Chips Gain, Dow, S&P Closing In On Records

As the Dow zipped ahead Wednesday, tech stocks on the NASDAQ were shunned and the S&P 500 was nearly flat, though approaching its all-time high (2,914.04, August 29).

The highly-anticipated trade wars touted by the Trump-hating press have yet to materialize, and multi-national corporations are adjusting to the new world of tariffs as opposed to the falsely-defined "free trade" policies of the past three decades.

With President Trump rewriting the parameters of global commerce, US companies are, as they should, making adjustments to currency distortions and disputes arising from the sudden departure from the past. That being the case, Dow stocks are performing favorably, while tech vacillates. The key to direction seems to be headed by the banking and financial sectors, which underpin all commercial activity.

Seeking to normalize interest rates, the Fed is set to raise the federal funds rate again in less than a week, at their September 25-26 FOMC meeting. Bank stocks have been largely untouched by any kind of organized selling pressure, which leads to complacency on trading desks and within investor portfolios. Passive index funds continue to perform well, despite perceived distress over presidential policies and political hijinks.

There's so much bullishness apparent that contrary practitioners have toes in the water, many of them already burned by bounces in the market structure. This is not an environment in which one would readily short stocks, as the bull market rages on without so much as a five percent pullback since the lows of February and March.

The money is out there, most funds fully invested without a worry in the world. That's a condition that usually leads to disaster, though this time looks to be truly different. If President Trump MAGA promise can be gauged at all, the stock market might be a proxy for the health of the American economy and it is doing quite well.

The Dow has posted gains in six of the last seven sessions, adding nearly 550 points over that span.

Dow Jones Industrial Average September Scorecard:

Date	Close	Gain/Loss	Cum. G/L
9/4/18	25,952.48	-12.34	-12.34
9/5/18	25,974.99	+22.51	+10.17
9/6/18	25,995.87	+20.88	+31.05
9/7/18	25,916.54	-79.33	-48.28
9/10/18	25,857.07	-59.47	-107.75
9/11/18	25,971.06	+113.99	+6.24
9/12/18	25,998.92	+27.86	+34.10
9/13/18	26,145.99	+147.07	+181.17
9/14/18	26,154.67	+8.68	+189.85
9/17/18	26,062.12	-92.55	+97.30
9/18/18	26,246.96	+184.84	+282.14
9/19/18	26,405.76	+158.80	+440.94

At the Close, Wednesday, September 19, 2018:
Dow Jones Industrial Average: 26,405.76, +158.80 (+0.61%)
NASDAQ: 7,950.04, -6.07 (-0.08%)
S&P 500: 2,907.95, +3.64 (+0.13%)
NYSE Composite: 13,121.97, +29.99 (+0.23%)

Dow Gains 259, NASDAQ, S&P Set New Record Highs

Since June 27, the NASDAQ has made a strong advance of 572 points, a nifty 7.68% return in two months.

The S&P 500 has tacked on 196 points over the same span, a 7.26% gain.

The Dow has galloped ahead 1933 points in the past two months, 8.02%, topping both index rivals and closed above 26,000 on Monday for the first time since February 1. Overall, investors are piling into stocks, unconvinced that the Fed's now-quarterly interest rate hikes will slow down US production in major industries. Income creation has been a duopoly since the Trump tax cuts became effective after the start of the year and stocks shook off the shocks of February and March.

With the Dow posting gains in six of the last eight sessions, the industrials have added nearly 900 points since August 16. With a three-day holiday dead ahead, the positive vibe may extend through Friday.

There is no other way around it. This rally is real, and has legs. The next FOMC meeting and widely anticipated 25 basis point rate hike is still a month off, on September 25-26.

Along with the NASDAQ and S&P closing at record highs on Monday, the Dow is a mere 600 points from its previous high from January 26 of 26,616.71.

Summertime... and the profits are easy.

Dow Jones Industrial Average August Scorecard:

Date	Close	Gain/Loss	Cum. G/L
8/1/18	25,333.82	-81.37	-81.37
8/2/18	25,326.16	-7.66	-89.03
8/3/18	25,462.58	+136.42	+55.05
8/6/18	25,502.18	+39.60	+94.65
8/7/18	25,628.91	+126.73	+221.38
8/8/18	25,583.75	-45.16	+176.22
8/9/18	25,509.23	-74.52	+101.70
8/10/18	25,313.14	-196.09	-94.39
8/13/18	25,187.70	-125.44	-219.83
8/14/18	25,299.92	+112.22	-107.61
8/15/18	25,162.41	-137.51	-245.12
8/16/18	25,558.73	+396.32	+151.20
8/17/18	25,669.32	+110.59	+261.79
8/20/18	25,758.69	+89.37	+351.16
8/21/18	25,822.29	+63.60	+414.76
8/22/18	25,733.60	-88.69	+326.07
8/23/18	25,656.98	-76.62	+249.45
8/24/18	25,790.35	+133.37	+382.82
8/27/18	26,049.64	+259.29	+642.11

At the Close, Monday, August 27, 2018:
Dow Jones Industrial Average: 26,049.64, +259.29 (+1.01%)
NASDAQ: 8,017.90, +71.92 (+0.91%)
S&P 500: 2,896.74, +22.05 (+0.77%)
NYSE Composite: 13,102.03, +102.59 (+0.79%)

Dow Backtracks As Fed Holds Rates Steady

The two probably aren't related, but the Federal Reserve held the federal funds rate steady at 1.75-2.00 percent and the Dow lost 81 points.

On the other hand, the NASDAQ gained 35 points, also likely unrelated to anything.

With the FOMC set to meet again September 25-26, there's nearly two months for the market to grasp what's happening in the global scheme of things. There's nearly unanimous opinion that the Fed will increase rates another 25 basis points at that time.

Dow Jones Industrial Average August Scorecard:

Date	Close	Gain/Loss	Cum. G/L
8/1/18	25,333.82	-81.37	-81.37

At the Close, Wednesday, August 1, 2018:
Dow Jones Industrial Average: 25,333.82, -81.37 (-0.32%)
NASDAQ: 7,707.29, +35.50 (+0.46%)
S&P 500: 2,813.36, -2.93 (-0.10%)
NYSE Composite: 12,902.39, -60.89 (-0.47%)

Stocks Slide After FOMC Raises Federal Funds Rate

As was widely expected, the Federal Open Market Committee (FOMC) of the Federal Reserve issued a policy directive to increase the federal funds rate to 1.75-2.00%, marking the seventh rate hike in the current cycle, bringing interest rates further toward normalcy while inching the economy closer to recession.

As every recession one the past 40 years has at least partially been aided by Fed rate increases, this time is no different, as the FOMC issued the second 25 basis point increase of the year, with prospects of another 50 basis point increase through the end of the year.

Conjecture has been steady that the Fed would hike rates either three or four times in 2018. Today's hawkish tone indicated that four equal 25 basis point increases is the most likely outcome, with 25 basis point hikes in September and December.

Stocks were wary going into the June meeting, which concluded today at 2:00 pm EDT and was followed by a press briefing from Fed Chairman Jay Powell, who did little to allay fears that the Fed would continue its reckless path in the face of what can best be called tepid economic data.

After the first rate hike in February, stocks nosedived, and they did a prelude to an encore performance after the announcement, though the losses were contained and ganged into the final few minutes of trading, the Dow suffering the biggest percentage decline and a nearly 120-point selloff.

The bond market took the news in stride, with the 10-year note barely budging, continuing to nose around the 3.00% yield level. Silver was the unanimous winner of the day, as gold's little sister initially fell, but then shot up 25 cents, ending the day one $17.00 the ounce for the first time since mid-April.

What lies ahead for markets the remainder of the week is an assessment of inflation (both CPI and PPI were up sharply in the most recent disclosures) and the overall economy. With trade wars looming larger than ever and productivity stalled, there exists a very good chance that a recession could be in the cards within the next six to 12 months, while scores of analysts weigh in on the dubious nature of the government's official gauges of inflation, unemployment and GDP.

Thursday's trade promises to be choppy, as sentiment is leaning toward being equally split between a bullish and bearish stance on stocks. Valuations maintain their loftiness, but money has to flow somewhere, and there are still plenty of fund managers looking for further gains this year.

Dow Jones Industrial Average June Scorecard:

Date	Close	Gain/Loss	Cum. G/L
6/1/18	24,635.21	+219.37	+219.37
6/4/18	24,813.69	+178.48	+397.85
6/5/18	24,799.98	-13.71	+384.14
6/6/18	25,146.39	+346.41	+730.55
6/7/18	25,241.41	+95.02	+825.57
6/8/18	25,316.53	+75.12	+900.69
6/11/18	25,322.31	+5.78	+906.47
6/12/18	25,320.73	-1.58	+904.89
6/13/18	25,201.20	-119.53	+785.36

At the Close, Wednesday, June 13, 2018:
Dow Jones Industrial Average: 25,201.20, -119.53 (-0.47%)
NASDAQ: 7,695.70, -8.09 (-0.11%)
S&P 500: 2,775.63, -11.22 (-0.40%)
NYSE Composite: 12,785.75, -58.96 (-0.46%)

FOMC On Deck: Stock Rally Should End at 2:00 pm EDT

Void of volatility the past two days, US and global stock markets are about to get shock treatment courtesy of the Federal Reserve's FOMC, which will almost certainly increase the federal funds rate by 25 basis points, to 1.75-2.00%, the highest rate in well over a decade.

While the expected rate hike is well-anticipated, priced in (according to the usual suspect sources), and measured (one 25 BP hike per quarter is the new normal), markets will still see the rising rate environment for what it is: an economy killer, attracting all money to US treasuries and out of competing negative or near-zero-interest-paying bills, notes and bonds in other countries.

When the FOMC announces its policy decision at 2:00 pm EDT, the world will change in some small but all bad ways. Credit card payers will see their required monthly debt installments rise, any interest-rate sensitive debt obligations (most of it) will become more expensive, and, perhaps most important of all, stock buybacks will no longer appear to be the bargain they once were, when companies could borrow at extremely low interest rates to repurchase their own stock, rather than invest in capital equipment and labor.

The elephant in the room is the buyback scheme, one which has boosted stock prices to dizzying levels, based largely on lowered expectations via reducing the number of shares outstanding. Companies which had chosen to engage in the dumbest money move in recent history will still be clueless about how to expand their existing businesses. They will not invest in their own operations. They will not increase wages nor hire more human capital. They will continue their cowardly retreat into self-interested stock incentive bonuses for key executives, as if those people are the only ones in the organization who matter.

Sadly, US corporations are badly managed and have been for quite some time. The rot within the boardrooms and executive suites began many decades ago and has only accelerated though the first two decades of the new century, long after the "Greed is Good" Gordon Gecko exclamation point from the 90s.

Today, the fictional Mr. Gecko would be ridiculed for his naivety, modesty, and restraint by the avaricious purveyors of corporate theft currently occupying the positions of CEO and CFO at many major corporations traded globally.

As corporate executives continue to be glorified as champions of free enterprise and business leaders, elevated to the level of gods and goddesses, the corruption that has engulfed the entire political and economic spectrum will come to full bloom, the excesses and poor decisions exacerbated by tightening finial conditions. Just when everything becomes more dear and out of reach to the ordinaries, the wealthy and connected will resort to outright, in-your-face larceny, justified by an entitled mindset.

Once it begins to get worse, the levels of lawlessness, greed, immorality, and corruption will become unbearable, but, as it was in 2008 and 2009, none of the most obvious criminals will go to jail. Few will even be indicted.

When it's obvious that stocks are going to continue devaluing - a condition that's probably well-understood already by the elite - the rats will jump ship en masse along with their ill-gotten gains.

The short-term rally that began on June 1 may not end immediately after the FOMC decision, but it almost certainly will end shortly thereafter. The NASDAQ made a new all-time high on Tuesday while the Dow languished with a minor loss, ending a four-day win streak as it reached the upper band of its recent trend line.

Now comes the losing.

Next comes the lying.

Dow Jones Industrial Average June Scorecard:

Date	Close	Gain/Loss	Cum. G/L
6/1/18	24,635.21	+219.37	+219.37
6/4/18	24,813.69	+178.48	+397.85
6/5/18	24,799.98	-13.71	+384.14
6/6/18	25,146.39	+346.41	+730.55
6/7/18	25,241.41	+95.02	+825.57
6/8/18	25,316.53	+75.12	+900.69
6/11/18	25,322.31	+5.78	+906.47
6/12/18	25,320.73	-1.58	+904.89

At the Close, Tuesday, June 12, 2018:
Dow Jones Industrial Average: 25,320.73, -1.58 (-0.01%)
NASDAQ: 7,703.79, +43.87 (+0.57%)
S&P 500: 2,786.85, +4.85 (+0.17%)
NYSE Composite: 12,844.72, -12.24 (-0.10%)

Dow Turns Positive With Just 10 Minutes Left In Session; Thanks to Fed Minutes?

OK, lemmings, your nightly stock market news byte tells you that the Dow was up a whopping 52 points.

That's all you need to know, unless you want to know that the Dow and the other indices were down most of the day, with the industrials turning positive with just 10 minutes left in the trading day.

No need to worry about that 167-point drop by midday. By 4:00 pm EDT, that was ancient history because - according to the official narrative - the stock gurus were thrilled by the Fed Minutes from the May 2nd FOMC meeting.

Somehow, broad approval of two percent inflation and continued hiking of the federal funds rate (the betting is for four rate increases this year; one already in January) is good for the economy.

Just for fun, try out this nifty inflation calculator. You might be surprised to find that the cumulative rate of inflation since 1990 (28 years ago) is 91.7%, meaning the value of your dollars have decreased by nearly half. A $20 item in 1990 would cost $38.34 today.

Convinced that 2% inflation (about what it's been for the last 30 years) is a good thing? Think again. The Fed's mandate was to maintain stable prices, not constantly increasing prices. They've failed.

Dow Jones Industrial Average May Scorecard:

Date	Close	Gain/Loss	Cum. G/L
5/1/18	24,099.05	-64.10	-64.10
5/2/18	23,924.98	-174.07	-238.17
5/3/18	23,930.15	+5.17	-233.00
5/4/18	24,262.51	+332.36	+99.36
5/7/18	24,357.32	+94.81	+194.17
5/8/18	24,360.21	+2.89	+197.06
5/9/18	24,542.54	+182.33	+379.39
5/10/18	24,739.53	+196.99	+576.38
5/11/18	24,831.17	+91.64	+668.02
5/14/18	24,899.41	+68.24	+736.26
5/15/18	24,706.41	-193.00	+543.26
5/16/18	24,768.93	+62.52	+605.78
5/17/18	24,713.98	-54.95	+550.73
5/18/18	24,715.09	+1.11	+551.84
5/21/18	25,013.29	+298.20	+850.04
5/22/18	24,834.41	-178.88	+671.16
5/23/18	24,886.81	+52.40	+723.56

At the Close, Wednesday, May 23, 2018:
Dow Jones Industrial Average: 24,886.81, +52.40 (+0.21%)
NASDAQ: 7,425.96, +47.50 (+0.64%)
S&P 500: 2,733.29, +8.85 (+0.32%)
NYSE Composite: 12,743.40, -23.25 (-0.18%)

Federal Reserve FOMC Meeting EPIC FAIL; Stocks Battered

The Federal Reserve - yes, those people who made what in 1968 was a hamburger and french fries for about $1.50, today $7.95 on average - snuck in another FOMC rate policy meeting, doing nothing, but suggesting that there will be absolutely three and probably four rate hikes this year.

Market reaction: Initial happiness, followed by a shocking reality. "We're screwed!" was the soundbite of the day from those well-tailored gentlemen and women who trade stocks with your money for a living.

Since - like the eTrade advertisements say - your stockbroker's new car isn't going to pay for itself, the buyers and holders of stocks have once again been taken to the proverbial cleaners.

As we can clearly see from the Money Daily handy Dow scoreboard, "sell in May" is already in play.

Dow Jones Industrial Average May Scorecard:

Date	Close	Gain/Loss	Cum. G/L
5/1/18	24,099.05	-64.10	-64.10
5/2/18	23,924.98	-174.07	-238.17

At the Close, Wednesday, May 2, 2018:
Dow Jones Industrial Average: 23,924.98, -174.07 (-0.72%)
NASDAQ: 7,100.90, -29.81 (-0.42%)
S&P 500: 2,635.67, -19.13 (-0.72%)
NYSE Composite: 12,418.06, -74.96 (-0.60%)

Stocks' Bounce Not Very Convincing; Bears Taking Control Of Market Sentiment

The Industrials ended a five-session losing streak on Wednesday, but, as dead cat bounces go, it didn't even register on the Boo-Boo Kitty scale, leaving the Dow Jones Industrial Average in the red for the month of April and still within whistling distance of correction territory (23,954).

If it hasn't become obvious to just about everyone on Wall Street that stocks are in some serious trouble after nine years of relentless stock buybacks and jerking up by Fed policies of ZIRP and QE, it should be quite clear now. With earnings season winding down, there's going to be nothing with which to prop up stocks - other than the usual central bank manipulation and other wily shenanigans - from the first week off May until the next FOMC meeting in June.

Stocks and the Fed are playing a dangerous game of chicken. If the Federal Reserve insists upon its path of raising interest rates every three or four meetings, stocks are going to tank. From the Fed's point of view, it probably doesn't matter what they do in the interest rate scheme, since they consider the business cycle to be at an end. That kind of thinking gives them full reign to raise rates, crash the markets, send the economy into recession (late 2018 or early 2019), so that they have sufficient ammunition to battle the downturn they created. It's a sickening policy from the prior century that badly needs replacing in the 21st.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19
4/5/18	24,505.22	+240.92	+402.11
4/6/18	23,932.76	-572.46	-170.35
4/9/18	23,979.10	+46.34	-134.01
4/10/18	24,407.86	+428.76	+294.66
4/11/18	24,189.45	-218.55	+76.11
4/12/18	24,483.05	+293.60	+369.71
4/13/18	24,360.14	-122.91	+247.80
4/16/18	24,573.04	+212.90	+460.70
4/17/18	24,786.63	+213.59	+674.29
4/18/18	24,748.07	-38.56	+635.73
4/19/18	24,664.89	-83.18	+552.55
4/20/18	24,462.94	-201.95	+350.60
4/23/18	24,448.69	-14.25	+336.35
4/24/18	24,024.13	-424.56	-88.21
4/25/18	24,083.83	+59.70	-28.51

At the Close, Wednesday, April 25, 2018:
Dow Jones Industrial Average: 24,083.83, +59.70 (+0.25%)
NASDAQ: 7,003.74, -3.62 (-0.05%)
S&P 500: 2,639.40, +4.84 (+0.18%)
NYSE Composite: 12,517.86, +3.87 (+0.03%)