Showing posts with label Larry Kudlow. Show all posts
Showing posts with label Larry Kudlow. Show all posts

Friday, November 15, 2019

Stocks Remain In Slumber Zone for Fourth Straight Session

The slowdown continues...

Rather, this is what happens when humans make poor decisions, over and over again, allowing computers to do most of the decision-making on trading. Now you're stuck between a rock and a hard place.

The rock: China's refusal to concede on many points in a trade deal.

The hard place: US insistence that a deal is "close."

This has been going on for months, about 16 to be precise, and stocks have been whipsawed in either direction depending on what the algos are going to interpret as good and/or bad news.

The latest, by presidential economic advisor and former financial talk show host, Larry Kudlow, has futures pointing higher prior to Friday's opening bell. But, we've seen this picture before. By he end of the day, there won't be a deal, and the Chinese will issue forth a press announcement that they don't agree to this or that or anything, maybe, and stocks will erase the gains they've made.

Count on it.

Judging by the figures below for Thursday's session, markets - outside of bonds - were essentially flat for the fourth consecutive day. Money Daily's headline yesterday, that this was about a dull a market as has ever been, was confirmed on Thursday.

Will Friday be any different, and, does it matter?

The chances that Friday will be different, and that stocks will find some direction, are good. It's an options expiration day, which usually adds some volatility, and it's the end of the week, so the market has those things going for it. On the other hand, there's nothing really new or different upon which to base trades.

As for the bond market, specifically treasuries, a rally is well underway. The selloff that saw yield on the 10-year note go from 1.54% on October 4 to 1.94% on November 8, is reversing course. The benchmark closed out yesterday at 1.82% and appears to have momentum heading into the holiday season. A slow-moving equity market at or near all-time highs (the S&P set another closing high yesterday) isn't helping inspire confidence, so there are many seeking the safety of government bonds.

As we head toward the opening bell in what can only be described as the welcome end to a week of insignificance, it's worth noting that even the phony impeachment hearings on Capitol Hill aren't even making headlines. That speaks volumes about how poorly the news media is perceived and even more about how loathsome our political leaders have become.

OK, you can go back to sleep now...

At the Close, Thursday, November 14, 2019:
Dow Jones Industrial Average: 27,781.96, -1.63 (-0.01%)
NASDAQ: 8,479.02, -3.08 (-0.04%)
S&P 500: 3,096.63, +2.59 (+0.08%)
NYSE Composite: 13,392.00, +6.94 (+0.05%)

Monday, May 7, 2018

Index Divergence Not A Pretty Sight; Higher Dollar, Oil, Gas Prices To Kill Economy

Friday's across the board gains in stocks managed to get the Dow into positive territory for the month, but paradoxically, not the week, which included the last day of April, a 148-point decline.

Thus, three of the major indices took it on the collective chins, with only the NASDAQ allowing for gains on a weekly basis. This kind of divergence - often seen in bear markets - is just another signal to astute investors that all is not well in the land of unicorns and lollipops otherwise known as Wall Street.

There's a significant amount of panic on display if one know where to look for it, one the best locations being the dollar index, which has been staging a rather relentless rally since mid-April, rising from 89.42 to 92.89, which may not seem like much on the surface, but in real terms, it's a huge matter to international trade. Companies not nimble enough to adjust to sudden currency movements may be caught flat-footed, on the wrong sides of trades, with losses in capital amounting to staggering sums if not accordingly hedged.

A rising dollar does rather damaging things to trading partners and to the US itself. Most obvious is that a strong dollar makes imports cheaper, dampens commodity prices should cause oil prices to decline, but, since the United States has become the world's largest producer of crude, perversely, oil is rising in tandem with the dollar (by Monday morning it had crested above $70/barrel), a condition which is going to cause some considerable pain to Americans who use more distilled products (gasoline) than any other nation.

If there's anything that will put a lid on economic expansion, it's high fuel prices, and the current level, if it remains so, primarily threatens the budgets of small businesses and individuals, acting as an up-front tax on production and consumption.

Practically every recession in modern history has been tied to the price of oil and/or gas. The current runaway price surge, if not contained and reversed, is likely to send the economy into a vicious tailspin. Since consumer credit is at an all-time high, the average driver cannot afford to spend more on fuel, be it to power an automobile, heat a home, or run a small business.

Once again, nefarious forces are at work, spiking the dollar and the price of crude simultaneously, when there is oil sloshing around everywhere and dollars returning to their US home thanks to congress and the president's tax reforms.

Those dollars, upon return, are being used by corporations for more stock buybacks, boosting - temporarily - stock prices, and are not reaching the consumption level, keeping inflation somewhat in check. The good news is that consumer goods will not skyrocket in price, though getting to the stores (what few of them remain) to buy such will cost more and more.

Greed will go where greed wants, and it always seems to manifest itself most profoundly in the price of a gallon of gas. Thank Larry Kudlow for this windfall for the Exxons and Chevrons of the world as his "king dollar" theory will be tested on the world stage.

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

At the Close, Friday, May 4, 2018:
Dow Jones Industrial Average: 24,262.51, +332.36 (+1.39%)
NASDAQ: 7,209.62, +121.47 (+1.71%)
S&P 500: 2,663.42, +33.69 (+1.28%)
NYSE Composite: 12,493.35, +100.84 (+0.81%)

For the Week:
Dow: -48.68 (-0.20%)
NASDAQ: +89.92 (+1.26%)
S&P 500: -6.49 (-0.24%)
NYSE Composite: -100.68 (-0.80%)

Thursday, April 5, 2018

Dow Industrials Travel 1,295 Points As Larry Kudlow Saves The World

Spooked at the open that China would impose a 25% tariff on soybeans (you can't make this stuff up), the Dow Jones Industrial Average slumped 510 points at the open, but immediately began to gain ground.

By noon, the index had nearly clawed itself all the way back to breakeven, and finally, after 2:00 pm EDT, began an ascent that would leave the blue chips up 230 points on the day.

What spurred the gigantic gain of nearly 800 points off the opening low was word from White House financial advisor, Larry Kudlow, that the tariffs were only outlines and that they may never even be put into effect.

It may be cynical to say, but when the greatest stock market in the world can be auto-tuned to move in massive fashion on the words of one man - and that man happens to be Larry Kudlow - anybody with a functioning brain would want to be far removed from it.

In a word, it's Bullshoot. Rubbish. Trash.

Another cynical outlook would suggest that anybody being short heading into first quarter earrings season is in dire need of a frontal lobotomy. Being anything but long at this juncture - particularly after the whacko Wednesday just witnessed - is tantamount to financial suicide, and suicide is still outlawed in most states.

April now looks to be a perfectly glorious month for pensioners trapped in an alternate reality of hopefulness and trust, and for stock manipulators who make money on both ends of the trade, the brokers, schemers, bankers...

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

At the Close, Wednesday, April 4, 2018:
Dow Jones Industrial Average: 24,264.30, +230.94 (+0.96%)
NASDAQ: 7,042.11, +100.83 (+1.45%)
S&P 500: 2,644.69, +30.24 (+1.16%)
NYSE Composite: 12,466.45, +99.38 (+0.80%)

Tuesday, March 13, 2018

Blue Chips Smashed Again; Dollar Dives; Gold, Silver Benefit

Whether or not the market - via the headline-parsing algorithms - was reacting to news that Rex Tillerson was fired from his position as Secretary of State or to hints that Larry Kudlow (yes, that "king dollar" Larry [cocaine habit] Kudlow) was in line to become the president's chief financial advisor has to be considered somewhat immaterial considering the calamitous close and the repeating pattern of strong openings and weak closes, telltale chart signals of bear markets.

Tuesday's rout left the Dow Jones Industrials down for the month... not by much, just 22 points, but there's been fundamental damage done to stocks not only today, but over the previous five weeks as well.

As Money Daily has recently taken pains to point out, the mood of the market has changed considerably since the go-go days of January. February marked the worst market performance in more than two years, and March is shaping up to be volatile and potentially devastating to equity holders.

Stocks have had ample time to recover the February losses but have failed to do so. That's an unmistakable fact underlying the weakening dynamic of the current condition.

On the day, the US dollar index dipped below the critical level of 90, closing at 89.71. The main beneficiaries of the dollar demise were the precious metals, as both gold and silver demonstrated strength. Though the gains were nothing dramatic, the PMs looked today like safe-haven bets, as did the 10-year-note, closing with a benign yield of 2.85%. Oil was banged lower, to 60.90 per barrel in WTI. The Dow has lost 328 points in the past two days, nipping off the excess of Friday's 440-point binge.

There are plenty of frayed nerves at the brokerage trading desks, especially with this coming Friday's options expiration, a triple-witching conclusion to the week.

Dow Jones Industrial Average March Scorecard:

Date Close Gain/Loss Cum. G/L
3/1/18 24,608.98 -420.22 -420.22
3/2/18 24,538.06 -70.92 -491.14
3/5/18 24,874.76 +336.70 -154.44
3/6/18 24,884.12 +9.36 -145.08
3/7/18 24,801.36 -82.76 -227.84
3/8/18 24,895.21 +93.85 -133.99
3/9/18 25,335.74 +440.53 +306.54
3/12/18 25,178.61 -157.13 +149.41
3/13/18 25,007.03, -171.58 -22.17

At the Close, Tuesday, March 13, 2018:
Dow Jones Industrial Average: 25,007.03, -171.58 (-0.68%)
NASDAQ: 7,511.01, -77.31 (-1.02%)
S&P 500: 2,765.31, -17.71 (-0.64%)
NYSE Composite: 12,831.76, -66.63 (-0.52%)

Thursday, January 2, 2014

January Barometer? Stocks Fall on First Trading Day of 2014


Stocks are only supposed to go higher, and the idea that we would begin the new year with a large selloff in stocks is a disturbing development to those in charge of propagandizing our glorious and ever-expanding economy.

The last time stocks fell on the first trading day of a new year was 2008, and, unless you've been living under a rock the past five years, you know what happened that year.

Not to say that a precipitous decline on the first trading day of the new year is a bad omen or a signal of a down year for stocks, but, referencing the January Effect, there's an 88% positive correlation between the direction of stocks for the entire month of January and the rest of the year, so, starting off with a sharp decline is not the best indication of general health, wealth and happiness going forward.

Obviously, it's too early to tell wither stocks go from here, but the apologists were out in force on CNBC, citing the fact that volume was on the very low side, something they neglected to inform upon during the late-year rally of the past two weeks, when trading volume was among the lowest of the year. Actually, Thursday's volume was higher than the average of the previous two weeks on a daily basis, and closer to normal than at any time since December 16.

With the major indices all up more than 25% in 2013, it would not come as a surprise to anyone should the market face some headwinds in 2014. It deserves mention that while the indices did very well, profits - as Larry Kudlow so often opines, "the mother's milk of stocks" - were higher by only six percent for the year, trailing paper gains by a margin wide enough to haul a bear trap through.

The bad news for holders of stock certificates (or the electrons which signify ownership in a brokerage account - not quite exactly the same thing) is that the selling was rather broad-based, as per the advance-decline line. The good news for the rest of us - those who own hard assets like land, gold, silver, machinery and vehicles - is that deflation seems to not want to go away. Gold and silver were higher, with silver shining at a nearly 4% gain on the day, and corn was down, so the price of corn in silver terms continues the trend lower, which, as our notes imply, according to Adam Smith, that is a deflationary trend of great significance. Crude oil also was off sharply.

Lower prices for all manner of consumer goods would be a definite boon for consumers and the general economy, though it's arguable that Wall Street and the international banking cartel headquartered at the Federal Reserve and World Bank might not be so pleased.

A sneaking suspicion that another grand transfer of wealth - on a scale beyond that of 2008-09 - is about to commence has been bandied about by skeptics of the recovery story. Maybe it's just a one-day trade and there's nothing more to it, though it needs to be pointed out that trades made today - especially those sales at a profit - won't necessarily be taxed for a very long time, around March 15, 2015, to be precise. Now, that could explain more about today's price action than just about any other macro or micro-economic factor present.

DOW 16,441.35, -135.31 (-0.82%)
NASDAQ 4,143.07, -33.52 (-0.80%)
S&P 1,831.98, -16.38 (-0.89%)
10-Yr Note 98.00, -0.03 (-0.03%) Yield: 2.99%
NASDAQ Volume 1.62 Bil
NYSE Volume 3.06 Bil
Combined NYSE & NASDAQ Advance - Decline: 1995-3764
Combined NYSE & NASDAQ New highs - New lows: 185-41
WTI crude oil: 95.44, -2.98
Gold: 1,225.20, +22.90
Silver: 20.13, +0.758
Corn: 420.50, -1.50

Friday, June 10, 2011

Stocks Down for Sixth Straight Week; Worst Since 2002

Whatever happened to the recovery? All of a sudden, nobody on Wall Street or in Washington is talking about "green shoots", improvement, growth or any of the associated nonsense that went along with the previous two years' worth of stimulus, easy Fed policy, bailouts and handouts.

But who's counting, anyway? Stocks fell for the sixth straight week, and, due to a sudden turnaround at 2:00 pm in the financial sector, the day's losses could have - and should have - been a whole lot worse. By now, the only people who don't know that we're in the throes of pure economic upheaval in its most base form - that of currency destruction - are the President (who took off early today, heading for a weekend at Camp David) and Larry Kudlow, who said last night on his CNBC show, The Kudlow Report, that he thought the "correction had run its course."

Naturally, both Larry and Mr. Obama are clueless, or hiding behind the facade of officialdom, because what's weighing most on stocks these days is the total distaste and/or disregard for all manner of equities by the general public. It should be apparent that most Americans either don't have the money to invest in stocks or have, and not liking the results, are completely out of the paper market and turning to cash, gold, silver, art, collectibles, or other commodities.

Nobody likes Wall Street's paper except Wall Street, and that's a fact well-known to anybody who's been following these things for more than the past couple of months. Wall Street paper is made up by Wall Street, distributed among themselves, and bought, sold, sliced and diced as many ways as humanly (or by computer) possible... until... there's nobody else to take the paper, and that's the condition we have today.

What other reason could there be for such a massive sell-off on such paltry, absolutely slush-fund-looking volume? The churn upwards has reversed course and the majors are now going to eat each other in a massive orgy of short-selling all the way to the bottom, wherever that might be.

In months ahead, look for blown up hedge funds, even more absurdly-underfunded pension funds and the near complete collapse of Wall Street's most-favored institutions. Some contend that the great unwind has already commenced, begun in earnest in 2007, completed in 2008 and the Spring of 2009. All that's occurred since has been a perverse show with no underlying value.

Whatever the case, stocks are no place to park money right now, and probably won't be for another few years, as the masters of the universe scramble to hold onto what little is left of the markets and the US economy.

A couple of side notes to benefit those who didn't see the carnage:

From Barron's Blog: "Financial stocks were falling in early trading, but shot up around 2 p.m. after CNBC reported that capital requirements for big banks will likely be less onerous than the market had been expecting."

That's just what we need, more leverage and easier capital requirements for the world's biggest banks. My, oh, my, what great leverage you have. Might as well make it 1000-1 and blow everything up.

Zero Hedge reports: Fed releases final POMO schedule of $60 billion.

Well, let's see how stocks fare without free money. Anybody not dreading July - the end of the Fed's slimy handouts to the banks - is living in a dream world, which would include 90% of the global population.

So, down we go. BTW: there have been other declines of six straight weeks, but the last one was in 2002. See you on the other side, if there is another side to this horrible story.

Dow 11,951.91, -172.45 (1.42%)
NASDAQ 2,643.73, -41.14 (1.53%)
S&P 500 1,270.98, -18.02 (1.40%)
NYSE Composite 8,016.39, -133.26 (1.64%)

As expected, declining issues buried advancing ones, 4462-1202. Our favorite indicator showed even more trouble ahead. New highs on the NASDAQ were subsumed by new lows, 24-163. On the NYSE, there were only 20 new highs and 95 new lows, which makes the combined total the worst since the lows overtook the highs, six sessions ago, 44-258. If history is any guide - and it's usually a good one - this indicator will not turn over for at least six months, probably longer. Once either the new highs or new lows take an edge, it's generally for an extended period. For instance, new highs held sway over new lows on a daily basis for nearly two years before this most recent change.

Volume was again pathetic. Calling it light would be quite the understatement.

NASDAQ Volume 1,978,513,625
NYSE Volume 3,972,811,750

In today's great downdraft, commodities didn't fare any better, WTI crude futures on the NYMEX tumbled $2.64, to $99.29. Gold was taken down $12.20, to $1532.10, if only because of fund managers scrambling to meet margin calls. Silver took the worst of the action, falling $1.37, to $36.20 per ounce.

Putting the recent slide into perspective, since April 29, the Dow Jones Industrial Average has fallen by 858 points, still closing in on official correction territory, soon to become bear market territory. The Dow is less than 400 points from falling into negative territory for the year. The NASDAQ is already sporting a decline for all of 2011, closing today about nine points lower than where it ended 2010. It's lost 200 points since the market top, April 29.

As for the S&P, it's 93 points down over the past six weeks and is up a mere 13 points for the entire year. Time wasted, indeed. Does anyone now think that bailing out the too-big-to-fail banks was a good idea? Had the government done what was proper - that being nothing - and allowed the banks to go under and reorganize in other mysterious forms, the global economy would most likely be booming right now. Instead, we have a global catastrophe completely of their own making which is falling down upon their heads.

A pox on all their houses. Kick a banker to the curb today. They've been doing it to us since 1913.

Tuesday, October 19, 2010

No POMO, Stocks Down; B of A Putbacks Slam Stocks

Playing the market has become so simple. If the Fed supplies liquidity, buy. If they don't sell, but you should do those things a day ahead of time, and, of course, there are no guarantees, as computers running complex algorithms control 70-80% of the trading and the other 20-30% is handled by crooks, swindlers, fast-buck operators and con men.

Today's slide was exacerbated by problems for America's favorite deceitful banking interest, Bank of America, as reports emerged that various parties, from PIMCO to the NY Fed's Maiden Lane entity, are seeking putbacks against the company for many of the bogus MBS it has floated over the years. In a nutshell, now that 20% or more of the loans in various mortgage-backed securities are non-performing and the bank can't keep up with foreclosures and reselling of properties, the investors want their money back.

A consortium has hinted at a lawsuit in a letter to the bank, with more lawsuits surely to follow from parties as diverse as class-actions on behalf of defrauded homeowners to state AGs from across the country in a smorgasbord of civil and criminal actions. BofA has turned from a lending bank to a punching bag overnight, though the process has taken years and was mostly self-inflicted. Of course, BofA is not alone, though they may be singled out for the bulk of the abuse. JP Morgan Chase, Wells Fargo and Citigroup have similar issues that will be called out in due time.

The hour of the banks final reckoning is upon us, finally, and the criminals are circling the wagons. Within days, we should see executives lawyering up, though Attorney General Eric Holder remains ominously silent and disgraced. Our federal Attorney General should be immediately forced to step down for he has allowed a criminal enterprise to flourish within the banking community without even the hint of an investigation or subpoena.

Dow 10,978.62, -165.07 (1.48%)
NASDAQ 2,436.95, -43.71 (1.76%)
S&P 500 1,165.90, -18.81 (1.59%)
NYSE Composite 7,423.65, -147.45 (1.95%)

Losers finished well ahead of gainers, 5335-1164. New highs came down quite a bit, but still led new lows, 253-30. Obviously, there was some bottom fishing going on, as the new lows number should have been at least double what it was. Of course, considering the abundance of reporting and statistical issues facing the markets, all figures must be viewed with extreme cynicism and skepticism. Volume was quite strong, not to the bulls liking, indicating that this downdraft might be just the first of an October surprise swoon which almost everybody - except the genius analysts on CNBC - has expected.

NASDAQ Volume 2,256,866,500
NYSE Volume 6,293,440,000

Equities were joined by many commodities in the sell-off. Crude Oil for November delivery fell $3.59, to $79.49, a nearly 4.5% loss. Gold was smacked back to reality with a $36.10 loss, to $1,336.00. Silver responded in kind, losing 63 cents, to $23.78.

The banks are walking face-first into a tsunami of lawsuits. High-powered class action lawyers are looking into the potential for a nationwide class action in which the major banks - JP Morgan Chase, Bank of America Wells Fargo and Citigroup - would be defendants.

This Bloomberg story details the sordid side of MERS, named in lawsuits across the country. MERS (Mortgage elctronic Registry System) is a computerized registry which avoids filing mortgage assignments in county offices. It was founded, funded and maintained by a consortium of major lending institutions as well as government entities, Fannie Mae and Freddy Mac.

Another story, this one from Salon, citing numerous sources, including University of Utah Law Professor Christopher Peterson in the Summer 2010 University of Cincnnati Law Review. Peterson isolates MERS and puts it squarrely at the root of the entire mortgage miasma, dating back to its roots in 1995. The company and its practices are largely behind the entire securitization process, which, according to Peterson, obliterates chain of title and among other rights, standing in foreclosure actions.

Fraudclosure continues. Here's Barry Ritholz and Chris Whalen on Larry Kudlow's show Monday night discussing various scenarios on how the situation will be resolved: