Equity markets were rather dull today, on exceptionally low volume - which is saying a lot, since volume left the building years ago.
Dull, boring, inconsequential, however, is how financial markets are supposed to be, or, that is at least how they used to be before the advent of personal computers, CNBC and individually-managed accounts. Today's go-go markets are driven by extra doses of liquidity, courtesy of the Fed (as much as readers hate reading that over and over and over again, the author hates having to mention it even more), HFTs, flash crashes, breaking news (why doesn't somebody fix it?), surprises, tweets, scandals, ponzi schemes, dotcoms, options, derivatives, swaps, repos and hot money flowing from carry trades into equities and back out again.
One can only wonder how many times the same money is re-invested, re-invented, re-created, re-hypothecated, recycled, rinsed and repeated. It seems sometimes that one need only a brokerage account and a pair of fast hands to tip-type your way into the wondrous world of high finance. If only such were true, we'd all be traders and multi-millionaires just like the guys on the infomercials telling you that NOW is the time to FLIP THAT HOUSE!
Alas, investing is boring and unexciting, and well it should be, though Americans, driven by media, need the big splash, the dazzle of bright lights and the promise of easy money to be enticed. Sadly for the marketeers and their media whores, more Americans play the ponies, gamble at casinos or play the lottery than invest in stocks, bonds or commodities. We've been programmed to be risk-takers and the stock market - try as it might - just seems to many to be a rigged game for rich guys in suits and ties and fancy women in shiny, tight-fitting business suits.
Thus, we have these dull markets, in which the major brokerages make war with each other via the computer algos, following each other into what eventually becomes a black hole, a void, a nonsensical, immaterial, valueless dump. That's what our stock markets have devolved into, especially after the crash of 2008-09. The major indices may have come all the way back in the four-to-five years since then, but all that money has been sucked out of the market by the brokerages and hedge funds via bonuses. It's common knowledge that the average investor usually gets screwed unless he/she is either very careful or very smart. There's just no way to win a rigged game. As the old adage goes, "if you're playing a game of poker and you don't know who the mark is, chances are it's probably you."
The general American public is simply not that stupid. After being burned by the high-tech Wall Street crooks in 2000, 2001 and again in 2008, they have not returned. Some maybe, but they're a small minority, mostly younger folks who don't know better or older people with money to burn, potentially. Paper losses still sting, and, if there's another severe downturn in the markets any time soon - an event long, long overdue, according to fundamentals - they'll be gone for good as well.
With all the scams, crimes and untold misdeeds that have become all-too-common on Wall Street - without, incidentally, any criminal prosecutions - is there any wonder that average people with money are still shy about investing in stocks? In a perverse way, thats why this market must and will likely continue to defy gravity and levitate to higher and higher levels: because another crash would destroy what little bit of confidence is left in the ultimate confidence game.
So, now that the banks are all sufficiently recapitalized (supposedly) and everything in America is just hunky-dorey, Wall Street may be looking itself in the mirror and wondering if they've taken too many scalps over the past few years. Maybe they'll keep the liquidity-driven, non-fundamental, irrational exuberance going for a while longer, but slowly, much more slowly.
Or is it time to turn it over again? Wash, rinse, repeat...
Dow 15,091.68, -26.81 (0.18%)
NASDAQ 3,438.79, +2.21 (0.06%)
S&P 500 1,633.77, +0.07 (0.00%)
NYSE Composite 9,437.17, -5.59 (0.06%)
NASDAQ Volume 1,605,809,375
NYSE Volume 3,124,652,250
Combined NYSE & NASDAQ Advance - Decline: 2673-3792
Combined NYSE & NASDAQ New highs - New lows: 475-30
WTI crude oil: 95.17, -0.87
Gold: 1,434.30, -2.30
Silver: 23.70, +0.038
Showing posts with label HTF. Show all posts
Showing posts with label HTF. Show all posts
Monday, May 13, 2013
Friday, August 3, 2012
Markets Soar on NFP Data; End Week with Paltry Gains
Bernanke didn't deliver. Draghi promised much, but fell fell well short in the court of public opinion.
The BLS, however, with its July non-farm payroll report, hit a home run, reporting an increase of 163,000 net new jobs, well beyond average expectations of 85,000, which was good enough for the investariat to send stocks screaming higher as the week closed out with a winning session after four straight losers.
Friday's gains were enough to just about cover the losses for the week, even though volume was the lowest of the five days and the official unemployment rate ticked up to 8.3%. For the week, the Dow Jones Industrials added 20 points and some change, the S&P gained five, while the NASDAQ picked up nine points.
The NYSE Composite index added 27 points, making the week as a whole much ado about nothing in particular.
Noting that the BLS figures are highly suspect and likely politically-contrived, the prior month's figure of an 80,000 gain was revised to 64,000, casting a bit of a pall on the madness of numbers. Investors (using the term lightly) didn't care, sending stocks near three-month highs.
Naturally, most of the gains were made in the opening minutes of trading, closing out profits to all but the privileged few HFTs and insider, bankster types who always seem to be the most profitable in the market.
Once the initial burst of activity had concluded, the market drifted the rest of the session in a very tight range. For instance, the Dow, after 9:45 am EDT, didn't move in either direction by more than 30 points. This is exactly the kind of frightened trading one would assume in a headline-driven, mostly-artificial market.
The week's activity leaves open some very poignant questions. Since last week's two-day burst was derived from hope for relief from the Fed and ECB in the form of more easing of monetary policy or, in the ECB's case, a more robust lending facility with which to bail out failing banks and sovereigns, why then would a positive reading on employment send stocks higher after both the Fed and ECB disappointed?
Apparently, Wall Street gets it either way. Poor economic conditions produce lax monetary policy (and stock gains), but job growth seemingly blunts the argument for more easing, while showing that the economy is on the road to recovery. A win for Wall Street either way, though long-time market observers might view such duplicity with a dollop of disdain.
Chartists may wish to point out the Dow's double top pattern, though still at levels below the year's highs made in the first week of May. The other major indices display similar patterns, with the broadest measures, the NASDAQ and NYSE Composite, showing many trading gaps along the road higher.
It goes without saying that the current market environment is highly reactive and immediate, especially to the upside. Valuations, which, of course, everybody gives the short shrift these days, are fairly rich, especially with corporate profits mostly down from a year ago and many companies missing revenue targets in the second quarter.
Being the end of the week, and payday or some kind of day for the masters of the universe, the pattern has recently been to end with a loud bang, followed by celebrations at favored watering holes or house parties in the Hamptons.
It's the middle of summer and the rich have to play, after all.
Dow 13,096.17, +217.29 (1.69%)
NASDAQ 2,967.90, +58.13 (2.00%)
S&P 500 1,390.99, +25.99 (1.90%)
NYSE Composite 7,935.35, +169.75 (2.19%)
NASDAQ Volume 1,696,452,375
NYSE Volume 3,499,269,750
Combined NYSE & NASDAQ Advance - Decline: 4479-1107
Combined NYSE & NASDAQ New highs - New lows: 286-70
WTI crude oil: 91.40, +4.27
Gold: 1,609.30, +18.60
Silver: 27.80, +0.81
The BLS, however, with its July non-farm payroll report, hit a home run, reporting an increase of 163,000 net new jobs, well beyond average expectations of 85,000, which was good enough for the investariat to send stocks screaming higher as the week closed out with a winning session after four straight losers.
Friday's gains were enough to just about cover the losses for the week, even though volume was the lowest of the five days and the official unemployment rate ticked up to 8.3%. For the week, the Dow Jones Industrials added 20 points and some change, the S&P gained five, while the NASDAQ picked up nine points.
The NYSE Composite index added 27 points, making the week as a whole much ado about nothing in particular.
Noting that the BLS figures are highly suspect and likely politically-contrived, the prior month's figure of an 80,000 gain was revised to 64,000, casting a bit of a pall on the madness of numbers. Investors (using the term lightly) didn't care, sending stocks near three-month highs.
Naturally, most of the gains were made in the opening minutes of trading, closing out profits to all but the privileged few HFTs and insider, bankster types who always seem to be the most profitable in the market.
Once the initial burst of activity had concluded, the market drifted the rest of the session in a very tight range. For instance, the Dow, after 9:45 am EDT, didn't move in either direction by more than 30 points. This is exactly the kind of frightened trading one would assume in a headline-driven, mostly-artificial market.
The week's activity leaves open some very poignant questions. Since last week's two-day burst was derived from hope for relief from the Fed and ECB in the form of more easing of monetary policy or, in the ECB's case, a more robust lending facility with which to bail out failing banks and sovereigns, why then would a positive reading on employment send stocks higher after both the Fed and ECB disappointed?
Apparently, Wall Street gets it either way. Poor economic conditions produce lax monetary policy (and stock gains), but job growth seemingly blunts the argument for more easing, while showing that the economy is on the road to recovery. A win for Wall Street either way, though long-time market observers might view such duplicity with a dollop of disdain.
Chartists may wish to point out the Dow's double top pattern, though still at levels below the year's highs made in the first week of May. The other major indices display similar patterns, with the broadest measures, the NASDAQ and NYSE Composite, showing many trading gaps along the road higher.
It goes without saying that the current market environment is highly reactive and immediate, especially to the upside. Valuations, which, of course, everybody gives the short shrift these days, are fairly rich, especially with corporate profits mostly down from a year ago and many companies missing revenue targets in the second quarter.
Being the end of the week, and payday or some kind of day for the masters of the universe, the pattern has recently been to end with a loud bang, followed by celebrations at favored watering holes or house parties in the Hamptons.
It's the middle of summer and the rich have to play, after all.
Dow 13,096.17, +217.29 (1.69%)
NASDAQ 2,967.90, +58.13 (2.00%)
S&P 500 1,390.99, +25.99 (1.90%)
NYSE Composite 7,935.35, +169.75 (2.19%)
NASDAQ Volume 1,696,452,375
NYSE Volume 3,499,269,750
Combined NYSE & NASDAQ Advance - Decline: 4479-1107
Combined NYSE & NASDAQ New highs - New lows: 286-70
WTI crude oil: 91.40, +4.27
Gold: 1,609.30, +18.60
Silver: 27.80, +0.81
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