US stocks are so hot right now it's difficult to keep up with all the records and new all-time highs. Suffice to say that the Fed continues to pump billions of dollars into the hands of primary dealers, hedge funds, used car dealers, slot machines, you name it.
This market, because of the continuous flow of funny money from the central bank, is as phony as an Iowa caucus, but, if you're long, it's infinitely more enjoyable.
With the Dow up more than 1000 points in three days, most analysts and reporters have run out of superlatives.
Apparently, the threat of a global pandemic from the novel coronavirus has been discounted. Almost all of the reported infections and deaths have been centered in China. Only two deaths outside of China have been reported as having been due to the virus.
On Wednesday, President Trump was acquitted on both impeachment charges. Next time (probably in a few months or so) the Democrats might want to try accusing him of something more concrete than Abuse of Power or Obstruction of Congress, neither of which are crimes, much less high crimes. The only things high were the Democrat deep operatives who dreamt up their poor attempt at a coup d'etat.
In what has to be one of the more amusing stories of the past few days is the unprecedented rise and fall of Elon Musk's Tesla (TSLA) stock, which ran up from a close of 650.57 per share on Friday, January 30, to 887.06 at the close on Tuesday, February 4, and finished the session at 734.70 on Wednesday, the 5th, a loss of 152.36 points (-17.18%), and continues to fall in pre-market trading. One of the most widely-held and most-shorted stocks listed, everybody's a winner with the exploding electric car company.
Just in case there isn't enough juice in the markets to keep the rally alive, China announced overnight that it will cut by half tariffs on 1,717 goods imported from the United States beginning February 14 as part of its agreement to Phase 1 of the US-China trade deal.
Oil continues to hold steady near $50 per barrel of WTI crude, having fallen into a bear market from $64 just a month ago. The US national average for a gallon of regular unleaded gas is $2.47 a gallon, according to GasBuddy.com.
At the Close, Wednesday, February 5, 2020:
Dow Jones Industrial Average: 29,290.85, +483.22 (+1.68%)
NASDAQ: 9,508.68, +40.71 (+0.43%)
S&P 500: 3,334.69, +37.10 (+1.13%)
NYSE: 14,024.86, +162.02 (+1.17%)
Showing posts with label Iowa. Show all posts
Showing posts with label Iowa. Show all posts
Thursday, February 6, 2020
Wednesday, January 29, 2020
One Down, One Up, and Now Comes the Fed
After two days of turmoil, the roller-coaster ride that has been this week's stock market is about to take another twist, or turn, or bump, or dive, or rise...
Nobody knows where it's going with the Federal Reserve's FOMC set to announce its first policy directive of the new year at 2:00 pm ET on Wednesday.
Monday's coronavirus-inspired deflation was followed by a miraculous revival on Tuesday, as if somebody had found a sudden cure for the deadly outbreak that has spread across China and been exported - at last count - to at least 15 other countries, including the United State, Canada, France, Germany, Thailand, Vietnam, Malaysia, Cambodia, Japan and many others. Being mostly unchecked and having an incubation period of up to 14 days, it's probable that the virus will circle the globe within the next month.
The Dow lost some 450 points on Monday and regained less than half of that on Tuesday. With the virus still highly infectious and the death toll rising to 132, the Fed standing pat on interest rates would seem to be about as consequential as a water hose in a rainstorm.
Beyond the spread of the coronavirus, the other big story in play this week is the impeachment trial of president Trump, being played out in the US Senate. Both sides have presented their cases, though the Republican's defense took less than half the time as that of the Democrats and was more focused on law and reason than the House managers' mangled miasma of mistaken misappropriations.
Where the Democrats sought to emotionalize the proceedings, the president's legal team toned it down, making the case, alternatively, that the articles of impeachment were vague and thus void, or that no crime had been committed, emphasized by professor Alan Dershowitz's impassioned, eloquent, well-researched argument on Monday night that the founders intended impeachment to be narrowly focused, rather than nebulous and amorphous as are the Democrat charges of Abuse of Power and Obstruction of Congress, neither of which are criminal.
Despite the apparent readiness of the Republican side, the media spin spent the week twirling around speculation over a piece of manuscript leaked from former advisor John Bolton's upcoming book, spuriously-timed to intercede in the Senate proceedings. Bolton's claim that he had a personal conversation with Mr. Trump, in which the president explicitly tied the delay of aid to Ukraine with the need for that country to dig into the affairs of Joe Biden and his son, Hunter, concerning their dealings with the corrupt natural gas company Burisma, was all-too-conveniently timed to overshadow the defense team's presentation of facts and legalities.
Thus, instead of examining the case for or against the president based on the best arguments from both sides, the media has attempted to shift the attention of the American public from real arguments to a false paradigm over calling additional witnesses, none of whom would be likely to move the needle in either direction very mch at all.
Senate majority leader, Mitch McConnell, who said once that he may not have the votes to stop additional witnesses and evidence, has also said that the votes are there to defeat any such motion on Friday, when the issue will come to a vote of some kind, after two days of questions from senators to either side - or both - on Wednesday and Thursday.
If he Democrats succeed in their desire for additional testimony, it would likely extend the trial for weeks if not months, given that some witnesses, including the testimony of Secretary of State Mike Pompeo and Chief of Staff Mick Mulvaney, would likely be subject to executive privilege, a matter that would end up in the hands of the Supreme Court. Arguments for and against the invocation of privilege would likely take weeks to draw up and more weeks to argue before the court could issue a ruling. It's a real can of worms that the Democrats threaten to open.
Cooler heads may prevail in the Senate. Having heard enough to make a reasoned decision, there may come a vote on Friday - if the vote for additional witnesses fails - up or down on the president's guilt or innocence, which would end the trial and allow Senators Klobuchar, Sanders, and Elizabeth Warren enough headway to get back to campaigning in Iowa, where the first primary caucus is set to wrap up on Monday, February 3.
While the Senate plays paddy-cake with the future of the nation and its precedents, the coronavirus will no doubt spread fear, death and potentially-huge economic ramifications around the world. Whatever happens in the Fed decision or the impeachment matter is likely to take a back seat to the carnage a virulent, unchecked, highly-contagious virus can unleash.
At the Close, Tuesday, January 28, 2020:
Dow Jones Industrial Average: 28,722.85, +187.05 (+0.66%)
NASDAQ: 9,269.68, +130.37 (+1.43%)
S&P 500: 3,276.24, +32.61 (+1.01%)
NYSE: 13,877.61, +108.00 (+0.78%)
Nobody knows where it's going with the Federal Reserve's FOMC set to announce its first policy directive of the new year at 2:00 pm ET on Wednesday.
Monday's coronavirus-inspired deflation was followed by a miraculous revival on Tuesday, as if somebody had found a sudden cure for the deadly outbreak that has spread across China and been exported - at last count - to at least 15 other countries, including the United State, Canada, France, Germany, Thailand, Vietnam, Malaysia, Cambodia, Japan and many others. Being mostly unchecked and having an incubation period of up to 14 days, it's probable that the virus will circle the globe within the next month.
The Dow lost some 450 points on Monday and regained less than half of that on Tuesday. With the virus still highly infectious and the death toll rising to 132, the Fed standing pat on interest rates would seem to be about as consequential as a water hose in a rainstorm.
Beyond the spread of the coronavirus, the other big story in play this week is the impeachment trial of president Trump, being played out in the US Senate. Both sides have presented their cases, though the Republican's defense took less than half the time as that of the Democrats and was more focused on law and reason than the House managers' mangled miasma of mistaken misappropriations.
Where the Democrats sought to emotionalize the proceedings, the president's legal team toned it down, making the case, alternatively, that the articles of impeachment were vague and thus void, or that no crime had been committed, emphasized by professor Alan Dershowitz's impassioned, eloquent, well-researched argument on Monday night that the founders intended impeachment to be narrowly focused, rather than nebulous and amorphous as are the Democrat charges of Abuse of Power and Obstruction of Congress, neither of which are criminal.
Despite the apparent readiness of the Republican side, the media spin spent the week twirling around speculation over a piece of manuscript leaked from former advisor John Bolton's upcoming book, spuriously-timed to intercede in the Senate proceedings. Bolton's claim that he had a personal conversation with Mr. Trump, in which the president explicitly tied the delay of aid to Ukraine with the need for that country to dig into the affairs of Joe Biden and his son, Hunter, concerning their dealings with the corrupt natural gas company Burisma, was all-too-conveniently timed to overshadow the defense team's presentation of facts and legalities.
Thus, instead of examining the case for or against the president based on the best arguments from both sides, the media has attempted to shift the attention of the American public from real arguments to a false paradigm over calling additional witnesses, none of whom would be likely to move the needle in either direction very mch at all.
Senate majority leader, Mitch McConnell, who said once that he may not have the votes to stop additional witnesses and evidence, has also said that the votes are there to defeat any such motion on Friday, when the issue will come to a vote of some kind, after two days of questions from senators to either side - or both - on Wednesday and Thursday.
If he Democrats succeed in their desire for additional testimony, it would likely extend the trial for weeks if not months, given that some witnesses, including the testimony of Secretary of State Mike Pompeo and Chief of Staff Mick Mulvaney, would likely be subject to executive privilege, a matter that would end up in the hands of the Supreme Court. Arguments for and against the invocation of privilege would likely take weeks to draw up and more weeks to argue before the court could issue a ruling. It's a real can of worms that the Democrats threaten to open.
Cooler heads may prevail in the Senate. Having heard enough to make a reasoned decision, there may come a vote on Friday - if the vote for additional witnesses fails - up or down on the president's guilt or innocence, which would end the trial and allow Senators Klobuchar, Sanders, and Elizabeth Warren enough headway to get back to campaigning in Iowa, where the first primary caucus is set to wrap up on Monday, February 3.
While the Senate plays paddy-cake with the future of the nation and its precedents, the coronavirus will no doubt spread fear, death and potentially-huge economic ramifications around the world. Whatever happens in the Fed decision or the impeachment matter is likely to take a back seat to the carnage a virulent, unchecked, highly-contagious virus can unleash.
At the Close, Tuesday, January 28, 2020:
Dow Jones Industrial Average: 28,722.85, +187.05 (+0.66%)
NASDAQ: 9,269.68, +130.37 (+1.43%)
S&P 500: 3,276.24, +32.61 (+1.01%)
NYSE: 13,877.61, +108.00 (+0.78%)
Monday, December 19, 2011
The Instant Market: Draghi and Bank of America Take It Down Two Notches
Once again, we are treated to the new reality of the "instant market" wherein news, or rumor, directs the flow of funds into or out of select equities, and today's catalysts were, as usual, from Europe (must have some news from Europe to move markets: it's the law) and oddly enough, from our old friends at Bank of America (BAC).
First, Europe. US markets opened with some hope and small gains across the indices. That was, until shortly after 10:00 New York time, when ECB President Mario Draghi commented that the ECB would not step up it's bond purchases, noting that monetary financing of states was not part of the treaty upon which the EU was formed. (Imagine, a world political leader actually sticking to what was agreed upon. A novel approach.)
That took the markets down a big notch, with the Dow, after hitting its highs of the day earlier - up 60 points - falling a full 120 points - to down 60 - in about an hour's time after Draghi's comments.
Draghi also said that any talk of the Euro-zone breaking apart were "morbid" and that the Euro was going to remain intact as a viable currency. He punted this gem:
While Draghi may be right about the morbidity part, the thought that the Euro is irreplaceable or inviolate is nothing more than CYA job protection. He's paid to oversee the ECB, and talking up the currency is part of his job. Somebody ought to hand Draghi a history book. Greece fell, Rome fell, Germany rose and fell a couple of times, at least. Nothing lasts forever, and, with only 11 years of history under its belt, the Euro is experiencing something of a severe confidence crisis, if not a complete failure by some of its constituents.
Most of those "morbid" speculators give the Euro another six to eighteen months, tops. And while it may indeed survive, and prove Draghi correct in the near term, it's another bad idea stemming from too many government bureaucrats attempting to furnish a centrally-planned socialist solution where none was needed. In many ways, the Euro resembles the Medicare/Medicade mess in the US, wherein the government stepped all over the established free market to create a system that is out of control and benefits mostly large medical insurance companies instead of real people with health care needs. The Euro was supposed to affect the entire continent in magical, positive ways. It has, thus far, produced a great deal of pain, financial inequities and sparked a world-wide crisis, even though that crisis was well underway, being all about fiat money anyway.
Stocks drifted along until about 3:00 pm ET when the PPT or whomever was hitting the bid - for hours - on Bank of America at 5.00 - 5.03, stopped, failed and rolled over. The bank that many equate with the financial collapse of 2008, hit a fresh, 33-month low, hitting 4.92 prior to closing at 4.99, an important figure, since many funds, by charter, cannot trade in stocks priced under 5.00, or must severely limit the size of their investment in such low-priced equities.
With banks under pressure the entire session, the demise of BAC took the whole market down the second notch, into the close. So much for recovery, at least by the "well-capitalized" US banks, whose ledgers are an indecipherable miasma of imaginary valuations, off-balance-sheet assets and liabilities and mark-to-model fantasies. With books so complex and confusing most CPAs don't understand them and after relentless support from the federal government (much of it in secret), is there any doubt that most stock pickers have shied away from US financial stocks as a whole?
Bank of America, along with Citigroup and JP Morgan Chase, to name just a few, should have been broken up in 2008-09, when they were insolvent (and still are, largely), though that would have ended the near-total dominance of the Federal Reserve and its constituents over all transactions in the US economy and beyond, and the rich bankers and their supporters simply could not stand for that. Instead, it was easier for them to socialize the losses on the backs of the US taxpayers.
Bank of America's recent swoon is only a small chapter in the ongoing saga that will bring down the oligarchical nature of our corrupt political and financial system. 99%ers are celebrating.
A couple of items of note:
Ron Paul, the Republican presidential candidate that the establishment loves to hate, has taken the lead in Iowa accordind to the most recent polling by Public Policy Polling (PPP), one of a handful of organizations tracking the rise and fall of candidates in the upcoming (January 3) caucuses.
The results have Paul at 23%, leading Mitt Romney (20%) and a rapidly declining Newt Gingrich (14%), even though Romney recently picked up the endorsement of the the Des Moines Register, Iowa's leading newspaper. Paul is also reported to have taken in more than $4 million over the past weekend, and now is in second place, behind Romney, in New Hampshire.
Also, a searing report on where we're headed in 2012, called the Thunder Road Report, leading with the cryptic warning, "Dear Portfolio Manager, you are leaving the capitalist sector and heading into a full-spectrum crisis."
The entire report is available at the end of this post.
Anybody seen Santa?
Dow 11,766.26, -100.13 (0.84%)
NASDAQ 2,523.14, -32.19 (1.26%)
S&P 500 1,205.35, -14.31 (1.17%)
NYSE Composite 7,142.45, -95.21 (1.32%)
NASDAQ Volume 1,591,603,125
NYSE Volume 3,659,820,750
Combined NYSE & NASDAQ Advance - Decline: 1230-4469
Combined NYSE & NASDAQ New highs - New lows: 110-290 (blowing out)
WTI crude oil: 93.88, +0.35
Gold: 1,596.70, -1.20
Silver: 28.87, -0.80
TRoad25
First, Europe. US markets opened with some hope and small gains across the indices. That was, until shortly after 10:00 New York time, when ECB President Mario Draghi commented that the ECB would not step up it's bond purchases, noting that monetary financing of states was not part of the treaty upon which the EU was formed. (Imagine, a world political leader actually sticking to what was agreed upon. A novel approach.)
That took the markets down a big notch, with the Dow, after hitting its highs of the day earlier - up 60 points - falling a full 120 points - to down 60 - in about an hour's time after Draghi's comments.
Draghi also said that any talk of the Euro-zone breaking apart were "morbid" and that the Euro was going to remain intact as a viable currency. He punted this gem:
I have no doubts whatsoever about the strength of the euro, about its permanence, about its irreversibility. But you have a lot of people, especially outside the euro area, who spend a lot of time in what I call morbid speculation.
While Draghi may be right about the morbidity part, the thought that the Euro is irreplaceable or inviolate is nothing more than CYA job protection. He's paid to oversee the ECB, and talking up the currency is part of his job. Somebody ought to hand Draghi a history book. Greece fell, Rome fell, Germany rose and fell a couple of times, at least. Nothing lasts forever, and, with only 11 years of history under its belt, the Euro is experiencing something of a severe confidence crisis, if not a complete failure by some of its constituents.
Most of those "morbid" speculators give the Euro another six to eighteen months, tops. And while it may indeed survive, and prove Draghi correct in the near term, it's another bad idea stemming from too many government bureaucrats attempting to furnish a centrally-planned socialist solution where none was needed. In many ways, the Euro resembles the Medicare/Medicade mess in the US, wherein the government stepped all over the established free market to create a system that is out of control and benefits mostly large medical insurance companies instead of real people with health care needs. The Euro was supposed to affect the entire continent in magical, positive ways. It has, thus far, produced a great deal of pain, financial inequities and sparked a world-wide crisis, even though that crisis was well underway, being all about fiat money anyway.
Stocks drifted along until about 3:00 pm ET when the PPT or whomever was hitting the bid - for hours - on Bank of America at 5.00 - 5.03, stopped, failed and rolled over. The bank that many equate with the financial collapse of 2008, hit a fresh, 33-month low, hitting 4.92 prior to closing at 4.99, an important figure, since many funds, by charter, cannot trade in stocks priced under 5.00, or must severely limit the size of their investment in such low-priced equities.
With banks under pressure the entire session, the demise of BAC took the whole market down the second notch, into the close. So much for recovery, at least by the "well-capitalized" US banks, whose ledgers are an indecipherable miasma of imaginary valuations, off-balance-sheet assets and liabilities and mark-to-model fantasies. With books so complex and confusing most CPAs don't understand them and after relentless support from the federal government (much of it in secret), is there any doubt that most stock pickers have shied away from US financial stocks as a whole?
Bank of America, along with Citigroup and JP Morgan Chase, to name just a few, should have been broken up in 2008-09, when they were insolvent (and still are, largely), though that would have ended the near-total dominance of the Federal Reserve and its constituents over all transactions in the US economy and beyond, and the rich bankers and their supporters simply could not stand for that. Instead, it was easier for them to socialize the losses on the backs of the US taxpayers.
Bank of America's recent swoon is only a small chapter in the ongoing saga that will bring down the oligarchical nature of our corrupt political and financial system. 99%ers are celebrating.
A couple of items of note:
Ron Paul, the Republican presidential candidate that the establishment loves to hate, has taken the lead in Iowa accordind to the most recent polling by Public Policy Polling (PPP), one of a handful of organizations tracking the rise and fall of candidates in the upcoming (January 3) caucuses.
The results have Paul at 23%, leading Mitt Romney (20%) and a rapidly declining Newt Gingrich (14%), even though Romney recently picked up the endorsement of the the Des Moines Register, Iowa's leading newspaper. Paul is also reported to have taken in more than $4 million over the past weekend, and now is in second place, behind Romney, in New Hampshire.
Also, a searing report on where we're headed in 2012, called the Thunder Road Report, leading with the cryptic warning, "Dear Portfolio Manager, you are leaving the capitalist sector and heading into a full-spectrum crisis."
The entire report is available at the end of this post.
Anybody seen Santa?
Dow 11,766.26, -100.13 (0.84%)
NASDAQ 2,523.14, -32.19 (1.26%)
S&P 500 1,205.35, -14.31 (1.17%)
NYSE Composite 7,142.45, -95.21 (1.32%)
NASDAQ Volume 1,591,603,125
NYSE Volume 3,659,820,750
Combined NYSE & NASDAQ Advance - Decline: 1230-4469
Combined NYSE & NASDAQ New highs - New lows: 110-290 (blowing out)
WTI crude oil: 93.88, +0.35
Gold: 1,596.70, -1.20
Silver: 28.87, -0.80
TRoad25
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