For stocks, it was SSDD (Same Stuff, Different Day) After all, it was a Monday and it's a Wall Street imperative that the week starts off with gains.
Pushing the phony COVID-19 narrative was news was Oxford University and AstraZeneca seeing positive results in a clinical trial of its developing COVID vaccine, with immune responses triggered and few side effects other than nausea, headaches, muscle ache, chills and fever. As usual, the news was released right before the opening bell, to ensure maximum fake enthusiasm.
While the Dow and NYSE were flat, the NASDAQ rose 2.5 percent and the S&P closed at a five-month high, but still 135 points shy of it's all-time best of 3,386.15 from February 19.
Not needing any kind of narrative other than the fact that it has been used as money for more than 5,000 years, has incredible conductive properties, and a slew of industrial uses, silver continued its rally, popping above 20 for the first time in four years.
Depending on which futures contract one chooses to quote, gold's shiny cousin is trading at either $20.43 per ounce (August) or $20.85 (September). What's pushing silver and gold higher are a variety of factors, including a growing distaste for fiat currencies, the immutability of precious metals, massive inflows to silver and gold ETFs, or the rumor that JP Morgan was recently told by the Federal Reserve to close out its short positions in silver.
Taken together or separately, gold and silver are among the top performing assets for 2020. Gold ended 2019 at $1514.75 and was quoted at $1815.65 Monday. Silver ended last year at $18.04 and it's gain to $20.43 constitutes a 13 percent gain. Gold's rise in 2020 is just under 20 percent.
It is estimated that fewer than five percent of the world's population has any gold or silver in their possession, despite the fact that all central banks hold tons of gold as a Tier 1 asset.
The days of fiat currency are numbered and the only replacement that will fill the needs of a new era are currencies backed by either gold, silver, or both.
Here's goldsilver.com's Mike Maloney with his thoughts on silver's meteoric rise:
At the Close, Monday, July 20, 2020:
Dow: 26,680.87, +8.97 (+0.03%)
NASDAQ: 10,767.09, +263.89 (+2.51%)
S&P 500: 3,251.84, +27.11 (+0.84%)
NYSE: 12,392.98, -9.72 (-0.08%)
Showing posts with label Nasdaq. Show all posts
Showing posts with label Nasdaq. Show all posts
Tuesday, July 21, 2020
Wednesday, June 17, 2020
Stocks Gain On Sensational Retail Report; NASDAQ Re-Approaching Record Highs
Stocks gained across the board on Tuesday, after May retail sales figures were up an eye-popping 17.7% as stores reopened across the country post-lockdowns from the coronavirus scare.
The number was more than double what many analysts had expected and prompted a wave of new buying in stocks of all varieties. The Dow gained more than 500 points. The S&P powered up by almost 60 points.
Despite the gaudy month-over-month numbers, gross receipts were 6.1% below a year earlier due mainly to uneven store re-openings, some states keeping stay-at-home restrictions in place longer than others.
With gains on both Monday and Tuesday, stocks have recovered most of the losses suffer last Thursday, June 11. The NASDAQ is about 175 points away from its all-time high, made on June 10. The intraday high was 10,086.89. At the close, the record was set at 10,020.35.
Of particular note is Friday's quad-witching day, which should introduce more volatility to the mix. It seems apparent, however, that bulls have regained the advantage and stocks appear set on a path upward, despite valuations in the stratosphere.
Bonds took a hit as yields on the long end of the treasury complex rose. The 30-year exploded nine basis points higher, from a yield of 1.45% on Monday to 1.54% Tuesday. The 10-year note was yielding 0.75%.
Precious metals were higher on the futures market but investors are becoming impatient with the constant niggling in the paper markets. Considering the level of disruption over the past four months, both gold and silver appear largely undervalued. Prices remain elevated on fair, open markets such as eBay. Dealers are still charging high premiums over spot and many are sold out of popular items.
It was recently reported that gold-backed exchange traded funds (ETFs) added 623 tonnes of the metal worth $34 billion to their stockpile from January to May, exceeding in five months every full-year increase on record. That's an impressive figure, as the amount of gold held in storage by ETFs reflects a growing demand for the precious metal.
While the ETFs are required to hold gold in storage at a percentage of their actual outstanding stock, shares of ETFs are not redeemable in gold and serve as a buffer against physical price increases. Touted as a safe way to invest in gold, they serve to track price increases on the paper (futures and spot) markets. The SPDR Gold Shares (GLD) ETF is up from 142 to 162 this year, roughly the same percentage in gold futures.
As pure derivatives, the gold and silver ETFs cause more confusion and actually dilute the pool of gold buyers. People investing in gold or silver ETFs are actually serving to keep a lid on prices by not engaging in active physical purchase and storage of their own gold.
The ETFs are yet another reason why gold and silver are orders of magnitude lower than where many believe they should be. Speculative in nature, they can be driven in any direction by well-timed buys, sells or shorts.
Oil prices have hit a rock at about $38 per barrel. That could change Wednesday when a monthly report from the Organization of the Petroleum Exporting Countries (OPEC) is released.
At the Close, Tuesday, June 16, 2020:
Dow: 26,289.98, +526.82 (+2.04%)
NASDAQ: 9,895.87, +169.84 (+1.75%)
S&P 500: 3,124.74, +58.15 (+1.90%)
NYSE: 12,161.47, +218.57 (+1.83%)
The number was more than double what many analysts had expected and prompted a wave of new buying in stocks of all varieties. The Dow gained more than 500 points. The S&P powered up by almost 60 points.
Despite the gaudy month-over-month numbers, gross receipts were 6.1% below a year earlier due mainly to uneven store re-openings, some states keeping stay-at-home restrictions in place longer than others.
With gains on both Monday and Tuesday, stocks have recovered most of the losses suffer last Thursday, June 11. The NASDAQ is about 175 points away from its all-time high, made on June 10. The intraday high was 10,086.89. At the close, the record was set at 10,020.35.
Of particular note is Friday's quad-witching day, which should introduce more volatility to the mix. It seems apparent, however, that bulls have regained the advantage and stocks appear set on a path upward, despite valuations in the stratosphere.
Bonds took a hit as yields on the long end of the treasury complex rose. The 30-year exploded nine basis points higher, from a yield of 1.45% on Monday to 1.54% Tuesday. The 10-year note was yielding 0.75%.
Precious metals were higher on the futures market but investors are becoming impatient with the constant niggling in the paper markets. Considering the level of disruption over the past four months, both gold and silver appear largely undervalued. Prices remain elevated on fair, open markets such as eBay. Dealers are still charging high premiums over spot and many are sold out of popular items.
It was recently reported that gold-backed exchange traded funds (ETFs) added 623 tonnes of the metal worth $34 billion to their stockpile from January to May, exceeding in five months every full-year increase on record. That's an impressive figure, as the amount of gold held in storage by ETFs reflects a growing demand for the precious metal.
While the ETFs are required to hold gold in storage at a percentage of their actual outstanding stock, shares of ETFs are not redeemable in gold and serve as a buffer against physical price increases. Touted as a safe way to invest in gold, they serve to track price increases on the paper (futures and spot) markets. The SPDR Gold Shares (GLD) ETF is up from 142 to 162 this year, roughly the same percentage in gold futures.
As pure derivatives, the gold and silver ETFs cause more confusion and actually dilute the pool of gold buyers. People investing in gold or silver ETFs are actually serving to keep a lid on prices by not engaging in active physical purchase and storage of their own gold.
The ETFs are yet another reason why gold and silver are orders of magnitude lower than where many believe they should be. Speculative in nature, they can be driven in any direction by well-timed buys, sells or shorts.
Oil prices have hit a rock at about $38 per barrel. That could change Wednesday when a monthly report from the Organization of the Petroleum Exporting Countries (OPEC) is released.
At the Close, Tuesday, June 16, 2020:
Dow: 26,289.98, +526.82 (+2.04%)
NASDAQ: 9,895.87, +169.84 (+1.75%)
S&P 500: 3,124.74, +58.15 (+1.90%)
NYSE: 12,161.47, +218.57 (+1.83%)
Sunday, June 14, 2020
Markets Skid, Ending Three-Week Win Streak As Rally Falters; Gold, Silver Continue Abusing Futures Pricing; Treasuries Rally
Stocks broke off a streak of three straight winning weeks courtesy of a trend-reversing, cascading selloff Thursday that erased all or most of June's gains.
The downdraft followed two straight days of minor losses and may have put a punctuation mark on the market's 11-week rally. The NASDAQ, which made a fresh all-time closing high on Monday (9,924.75) and crested over 10,000 on Wednesday, took a 517-point collapse on Wednesday. Like the Dow, which lost over 1800 points, the loss was the fourth-highest one-day point decline in market history. For both indices, the three higher point losses all occurred this past March.
Friday was snapback day, though the gains were paltry compared to the prior day's losses. Stocks gained back less than a third of what was surrendered on Thursday.
The late-week action prompted market observers to question the solidity of the recent rally, which, in V-shaped manner, took the markets straight off their March lows and out of bear market territory. Stocks had gained even as entire states were in lockdowns and the COVID-19 virus raged across America. Stocks continued to rise in the face of nationwide protests against police violence in the aftermath of the death of George Floyd at the hands of Minneapolis police. Many of the protests turned violent, as disruptive elements rioted and looted stores.
Fueled by emergency lending by the Fed, stocks seemed to be out of touch with mainstream economics, a condition not unusual for Wall Street types. Thursday's turnabout was broadly-based and unsparing of any sector though banking and tech stocks were leaders to the downside.
Coincidentally, protesting fell off as well, probably due to uprising fatigue. After two weeks of marching around in hot weather, the movement became somewhat pointless and many lost interest in reform toward better policing, though success was claimed in some areas, such as Minneapolis, where the city council decided to defund and disband the police, and New York, where measures were take by legislators to ratchet down the heavy-handed tactics of its force.
In Louisville, Kentucky, the city council voted to ban no-knock warrants. The resolution was passed in reaction to the death of Breonna Taylor, who was killed in a March no-knock raid at the wrong address.
One city in which protests have not tailed off is Atlanta, the scene of widespread rioting and looting early on, where chief of police, Erika Shields, has resigned on Sunday after officers fired upon and killed 27-year-old Rayshard Brooks Friday night.
And, in Seattle, the madness reached a climax on Monday as officials decided not to defend a police precinct, resulting in protesters, led by Black Lives Matter (BLM) taking over a six-block urban area and renaming it the Capitol Hill Autonomous Zone (CHAZ).
All of this is a backdrop to pent-up emotions and outrage that were magnified during the coronavirus lockdowns. Some people, took issue with Wall Street's rapid rally, citing it as an affront to societal mores and economic inequality. By the looks of where markets were heading on Thursday, the impact of the lockdowns and protests finally have reached lower Manhattan.
Treasuries staged a solid rally at the long end of the curve through Thursday, with the 10-year note yield falling from 0.91% to 0.66% and from 1.69% to 1.41% on the 30-year. On Friday, bond prices fell, with the 10-year closing out at 0.71%; the 30-year bond finished at 1.45%.
Precious metals rose early in the week, but were tamped down as the week drew to a close. Gold reached $1742.15 before ending the week still elevated at $1733.50. Spot silver was as high as $17.87 an ounce, closing at $17.62 on Friday. Spot and futures prices continue to trend toward irrelevance as premium prices for physical metal and shortages continue into a third month. Many dealers show popular items out of stock or with significant delivery delays, a condition that has persisted for retailers since the onset of the coronavirus.
eBay continues to light the way for purveyors and buyers alike, with calculable prices (at premiums over spot) and rapid, reliable deliveries. Here are the most recent prices on select items from ebay sellers (prices include shipping):
Item: Low / High / Average / Median
1 oz silver coin: 25.50 / 36.20 / 31.00 / 29.90
1 oz silver bar: 19.95 / 35.20 / 29.32 / 29.88
1 oz gold coin: 1,837.00 / 1,900.52 / 1,857.86 / 1,855.40
1 oz gold bar: 1,806.00 / 1,880.00 / 1,840.52 / 1,832.63
As far as stocks are concerned, after the FOMC meeting concluded Wednesday and the Fed committed to keep the federal funds rate at or near the zero-bound at least until the end of 2022, investors got a little jittery over their engineered V-shaped rally, the overall stability of the global economy, and valuations heading into the end of the second quarter and some supposedly horrifying earnings figures coming the second week of July.
The coming week may be epochal or apocalyptic as Friday offers a quad witching day as stock index futures, stock index options, stock options, and single stock futures expire simultaneously. There should be some volatility showing up at the convergence of day-trading, options players and real-time economics all roll together.
While Thursday's massive decline in stocks sent shock waves through the markets, Friday's returns were uninspired and had the look of a an exhausted rally on its final legs. Trading was sluggish at best and flatlined around 2:00 pm ET only to be saved by late-day short covering and the usual hijinks by backroom operators (NY Fed).
If stocks fail to close higher next week - as this week marked the end of a three-week uptrend - damage could become more or less permanent. While many placed hope in the Fed's power to purchase as many types and varieties of bonds that confidence was shattered on Thursday and should lead the way back to some fundamental rethinking of market dynamics.
Nothing goes up or down in a straight line, but this week should provide some clues as to the ultimate short-and-long term market direction.
At the Close, Friday, June 12, 2020:
Dow: 25,605.54, +477.37 (+1.90%)
NASDAQ: 9,588.81, +96.08 (+1.01%)
S&P 500: 3,041.31, +39.21 (+1.31%)
NYSE: 11,867.17, +208.00 (+1.78%)
For the Week:
Dow: -1505.44 (-5.55%)
NASDAQ: -225.27 (-2.30%)
S&P 500: -152.62 (-4.78%)
NYSE: -774.27 (-6.12%)
The downdraft followed two straight days of minor losses and may have put a punctuation mark on the market's 11-week rally. The NASDAQ, which made a fresh all-time closing high on Monday (9,924.75) and crested over 10,000 on Wednesday, took a 517-point collapse on Wednesday. Like the Dow, which lost over 1800 points, the loss was the fourth-highest one-day point decline in market history. For both indices, the three higher point losses all occurred this past March.
Friday was snapback day, though the gains were paltry compared to the prior day's losses. Stocks gained back less than a third of what was surrendered on Thursday.
The late-week action prompted market observers to question the solidity of the recent rally, which, in V-shaped manner, took the markets straight off their March lows and out of bear market territory. Stocks had gained even as entire states were in lockdowns and the COVID-19 virus raged across America. Stocks continued to rise in the face of nationwide protests against police violence in the aftermath of the death of George Floyd at the hands of Minneapolis police. Many of the protests turned violent, as disruptive elements rioted and looted stores.
Fueled by emergency lending by the Fed, stocks seemed to be out of touch with mainstream economics, a condition not unusual for Wall Street types. Thursday's turnabout was broadly-based and unsparing of any sector though banking and tech stocks were leaders to the downside.
Coincidentally, protesting fell off as well, probably due to uprising fatigue. After two weeks of marching around in hot weather, the movement became somewhat pointless and many lost interest in reform toward better policing, though success was claimed in some areas, such as Minneapolis, where the city council decided to defund and disband the police, and New York, where measures were take by legislators to ratchet down the heavy-handed tactics of its force.
In Louisville, Kentucky, the city council voted to ban no-knock warrants. The resolution was passed in reaction to the death of Breonna Taylor, who was killed in a March no-knock raid at the wrong address.
One city in which protests have not tailed off is Atlanta, the scene of widespread rioting and looting early on, where chief of police, Erika Shields, has resigned on Sunday after officers fired upon and killed 27-year-old Rayshard Brooks Friday night.
And, in Seattle, the madness reached a climax on Monday as officials decided not to defend a police precinct, resulting in protesters, led by Black Lives Matter (BLM) taking over a six-block urban area and renaming it the Capitol Hill Autonomous Zone (CHAZ).
All of this is a backdrop to pent-up emotions and outrage that were magnified during the coronavirus lockdowns. Some people, took issue with Wall Street's rapid rally, citing it as an affront to societal mores and economic inequality. By the looks of where markets were heading on Thursday, the impact of the lockdowns and protests finally have reached lower Manhattan.
Treasuries staged a solid rally at the long end of the curve through Thursday, with the 10-year note yield falling from 0.91% to 0.66% and from 1.69% to 1.41% on the 30-year. On Friday, bond prices fell, with the 10-year closing out at 0.71%; the 30-year bond finished at 1.45%.
Precious metals rose early in the week, but were tamped down as the week drew to a close. Gold reached $1742.15 before ending the week still elevated at $1733.50. Spot silver was as high as $17.87 an ounce, closing at $17.62 on Friday. Spot and futures prices continue to trend toward irrelevance as premium prices for physical metal and shortages continue into a third month. Many dealers show popular items out of stock or with significant delivery delays, a condition that has persisted for retailers since the onset of the coronavirus.
eBay continues to light the way for purveyors and buyers alike, with calculable prices (at premiums over spot) and rapid, reliable deliveries. Here are the most recent prices on select items from ebay sellers (prices include shipping):
Item: Low / High / Average / Median
1 oz silver coin: 25.50 / 36.20 / 31.00 / 29.90
1 oz silver bar: 19.95 / 35.20 / 29.32 / 29.88
1 oz gold coin: 1,837.00 / 1,900.52 / 1,857.86 / 1,855.40
1 oz gold bar: 1,806.00 / 1,880.00 / 1,840.52 / 1,832.63
As far as stocks are concerned, after the FOMC meeting concluded Wednesday and the Fed committed to keep the federal funds rate at or near the zero-bound at least until the end of 2022, investors got a little jittery over their engineered V-shaped rally, the overall stability of the global economy, and valuations heading into the end of the second quarter and some supposedly horrifying earnings figures coming the second week of July.
The coming week may be epochal or apocalyptic as Friday offers a quad witching day as stock index futures, stock index options, stock options, and single stock futures expire simultaneously. There should be some volatility showing up at the convergence of day-trading, options players and real-time economics all roll together.
While Thursday's massive decline in stocks sent shock waves through the markets, Friday's returns were uninspired and had the look of a an exhausted rally on its final legs. Trading was sluggish at best and flatlined around 2:00 pm ET only to be saved by late-day short covering and the usual hijinks by backroom operators (NY Fed).
If stocks fail to close higher next week - as this week marked the end of a three-week uptrend - damage could become more or less permanent. While many placed hope in the Fed's power to purchase as many types and varieties of bonds that confidence was shattered on Thursday and should lead the way back to some fundamental rethinking of market dynamics.
Nothing goes up or down in a straight line, but this week should provide some clues as to the ultimate short-and-long term market direction.
At the Close, Friday, June 12, 2020:
Dow: 25,605.54, +477.37 (+1.90%)
NASDAQ: 9,588.81, +96.08 (+1.01%)
S&P 500: 3,041.31, +39.21 (+1.31%)
NYSE: 11,867.17, +208.00 (+1.78%)
For the Week:
Dow: -1505.44 (-5.55%)
NASDAQ: -225.27 (-2.30%)
S&P 500: -152.62 (-4.78%)
NYSE: -774.27 (-6.12%)
Friday, June 12, 2020
So Much for That V-Shaped Recovery as Dow Sheds 1861 Points, NASDAQ Drops 527
That rally - the one that started on right away on March 24 with a 2100-point gain, the day after the Dow bottomed out at 18,591.93 - is over. Smart traders made money. Anybody who was fretting about their retirement account and didn't exit, well, there's still time. The market giveth and taketh away. In this case, thanks to emergency measures by the Fed, the market gave almost everybody who didn't get out a gold opportunity to make for the hills.
If you're still in, you're either a day-trading maniac or just plain stuck on stupid. There are other asset classes. There's always cash. This second leg down is likely to be much more severe than the first because it will take months instead of days to wipe out trillions in invest dollars. Rest assured, at the end of the second leg, everybody's a loser.
Putting it all into perspective, after the major indices fell into bear market territory - defined as down more than 20% - the duration of the bear market was record for brevity: five weeks. Not that those five weeks in the doldrums will go down in the history books as a traditional bear market; they'll likely be remembered as the start of the Greatest Depression, spawn of the coronavirus, oil shock, and global plebeian protests because the stock market decline began again in earnest on Thursday, June 11.
The loss on the Dow was nearly seven percent, ranking it just outside the Top 20 in percentage terms, but number four in regards to points lost. It ranks behind three other losses, all from this year, which is about all one needs to know about stocks in the year 2020. The NASDAQ loss of 527.62 was also the fourth-highest, point-wise. Similarly, the three greatest point losses in NASDAQ history also occurred just this past March.
No, there will not be any v-shaped recovery as the market charts suggested. That was all a fantasy, spun out of whole cloth from the Federal Reserve. After all, how could stocks rally when unemployment was somewher in the neighborhood of 15%, people around the world were dying from a pandemic, whole nations and most states in the US were shut down for anywhere from a month to ten weeks, corporate earnings were in the toilet and second quarter results were still a month down the road?
The fairy tale rally never made any sense and never will except in regards to some very rich people making even more money without doing a damn thing. Rest assured, most of them were selling today or have either significantly trimmed their positions or added hedges, by which they'll enrich themselves even further on another downdraft.
There is likely to be a snapback on Friday. No telling which way it will eventually eventually turn, but recent market action offers a strong indication that a 1200-point swing to the upside on the Dow might be key to understanding the psychology of crazy. Anything less than that would leave the Dow just below its 200-day moving average.
Be mindful that despite the Dow's 9,000-point gain (yes, that's right, 9,000 points!) over the past 12 weeks, the current chart is one of a primary BULL market according to Dow Theory. The Industrials exceeded the December 2018 lows to the downside, and then erupted to the upside, cancelling out the bear reversal. Dow Transports confirmed the move, doing the same.
Nobody is betting on conformity with current market conditions. The Fed's emergency rescue facilities have only added to the overall distortion from QE, ZIRP, and other experiments in currency counterfeiting. Hanging one's hat on theories dating back to the early 20th century might engender more anguish than reward.
Some will call Thursday's pullback "healthy", but those are probably the perma-bulls in the room. Anybody who can say with a straight face that the US or global economy is healthy ought to be selling used cars rather than stocks.
WTI crude fell more than $3 on the day, from a range around $39 to $36. Gold and silver were unceremoniously smashed lower on futures markets, but, as has been a repeating theme, will likely bounce back quickly as premiums and shortages persist.
The long end of the treasury complex continued to rally, dropping yield in the 10-year note and 30-year bond from 0.91% and 1.68% last Friday to 0.66% and 1.41%, respectively.
Stay liquid.
At the Close, Thursday, June 11, 2020:
Dow: 25,128.17, -1,861.82 (-6.90%)
NASDAQ: 9,492.73, -527.62 (-5.27%)
S&P 500: 3,002.10, -188.04 (-5.89%)
NYSE: 11,659.17, -790.05 (-6.35%)
If you're still in, you're either a day-trading maniac or just plain stuck on stupid. There are other asset classes. There's always cash. This second leg down is likely to be much more severe than the first because it will take months instead of days to wipe out trillions in invest dollars. Rest assured, at the end of the second leg, everybody's a loser.
Putting it all into perspective, after the major indices fell into bear market territory - defined as down more than 20% - the duration of the bear market was record for brevity: five weeks. Not that those five weeks in the doldrums will go down in the history books as a traditional bear market; they'll likely be remembered as the start of the Greatest Depression, spawn of the coronavirus, oil shock, and global plebeian protests because the stock market decline began again in earnest on Thursday, June 11.
The loss on the Dow was nearly seven percent, ranking it just outside the Top 20 in percentage terms, but number four in regards to points lost. It ranks behind three other losses, all from this year, which is about all one needs to know about stocks in the year 2020. The NASDAQ loss of 527.62 was also the fourth-highest, point-wise. Similarly, the three greatest point losses in NASDAQ history also occurred just this past March.
No, there will not be any v-shaped recovery as the market charts suggested. That was all a fantasy, spun out of whole cloth from the Federal Reserve. After all, how could stocks rally when unemployment was somewher in the neighborhood of 15%, people around the world were dying from a pandemic, whole nations and most states in the US were shut down for anywhere from a month to ten weeks, corporate earnings were in the toilet and second quarter results were still a month down the road?
The fairy tale rally never made any sense and never will except in regards to some very rich people making even more money without doing a damn thing. Rest assured, most of them were selling today or have either significantly trimmed their positions or added hedges, by which they'll enrich themselves even further on another downdraft.
There is likely to be a snapback on Friday. No telling which way it will eventually eventually turn, but recent market action offers a strong indication that a 1200-point swing to the upside on the Dow might be key to understanding the psychology of crazy. Anything less than that would leave the Dow just below its 200-day moving average.
Be mindful that despite the Dow's 9,000-point gain (yes, that's right, 9,000 points!) over the past 12 weeks, the current chart is one of a primary BULL market according to Dow Theory. The Industrials exceeded the December 2018 lows to the downside, and then erupted to the upside, cancelling out the bear reversal. Dow Transports confirmed the move, doing the same.
Nobody is betting on conformity with current market conditions. The Fed's emergency rescue facilities have only added to the overall distortion from QE, ZIRP, and other experiments in currency counterfeiting. Hanging one's hat on theories dating back to the early 20th century might engender more anguish than reward.
Some will call Thursday's pullback "healthy", but those are probably the perma-bulls in the room. Anybody who can say with a straight face that the US or global economy is healthy ought to be selling used cars rather than stocks.
WTI crude fell more than $3 on the day, from a range around $39 to $36. Gold and silver were unceremoniously smashed lower on futures markets, but, as has been a repeating theme, will likely bounce back quickly as premiums and shortages persist.
The long end of the treasury complex continued to rally, dropping yield in the 10-year note and 30-year bond from 0.91% and 1.68% last Friday to 0.66% and 1.41%, respectively.
Stay liquid.
At the Close, Thursday, June 11, 2020:
Dow: 25,128.17, -1,861.82 (-6.90%)
NASDAQ: 9,492.73, -527.62 (-5.27%)
S&P 500: 3,002.10, -188.04 (-5.89%)
NYSE: 11,659.17, -790.05 (-6.35%)
Friday, March 20, 2020
Stocks Bounce As News Suggests Possible, Readily-Available COVID-19 Treatments May Be Effective
Considering the extreme levels of volatility lately, Thursday's trading was relatively calm. Though the VIX remained elevated, it came down from over 80 to near 70 as the day commenced.
Stocks initially were lower, but found solid footing and ramped higher by mid-morning, the NASDAQ leading the way with speculators eyeing stocks that had cratered over the past three weeks, and began establishing positions at levels they considered to be bargains.
The S&P, Dow, and NYSE composite followed gamely but trailed the red-hot NASDAQ by more than a percentage point throughout the session. It was the first in many days that stocks had not ventured more than three percent in either direction for the last nine sessions, so some might argue that volatility is cooling, though still near record levels.
Moving 900 points from the morning lows to the close, the Dow's move was impressive, considering it has been absolutely damaged the prior session with Boeing (BA) leading the way down on Wednesday with a loss of some 25%. The aircraft manufacturer was down a mere four percent on Thursday, and is sporting a positive sign in pre-market trading Friday.
Thursday's unemployment claims numbers were 281,000, up by 71,000 over the prior week, but were for the week ending March 14, so much of the coronavirus-related data had not been tabulated, but will appear next Thursday.
Goldman Sachs’ Jan Hatzius wrote in a note to clients on Thursday night, “state-level anecdotes point to an unprecedented surge in layoffs this week.” The analyst claims that figures for the week ending March 21 will show initial claims rising to roughly 2¼ million, which would be the largest increase in initial jobless claims and the highest level on record. That's not unlikely, as major cities - San Francisco and New York in particular - are at or near lockdown levels of activity with many workers furloughed or otherwise idled by warnings or edicts from city and state officials.
Philly Fed’s manufacturing activity index crashed to an eight-year low of -12.7 in March from a three-year high of 36.7 in February. This follows the NY Fed’s Empire State Manufacturing index, which also dropped at a record pace to an 11-year low.
In a research report published on Thursday, Bank of America economists predicted the U.S. economy would lose 3.5 million jobs and GDP plummeting at a 12% pace in the second quarter, also probable figures given the severity of the reaction to COVID-19.
What's keeping Wall Street open for business and possibly ending the week with a positive tone are actions taken by the Fed which are too numerous to list, but include opening swap lines to other central banks, injecting billions of dollars via repo and QE, and wide open credit lines to primary dealers.
Also, President Trump's mention of a possible treatments for the virus in his now-daily news briefing, has been getting a great deal of attention. Specifically, the president mentioned a number of possible drugs that showed promise in tests, including Gilead Sciences' remdesivir (Money Daily mentioned Gilead's product back in January as a promising treatment and the stock has responded with a run from 63 to 78 since then) and chloroquine, an inexpensive drug long used to treat malaria, which is widely available and has proven to be an effective anti-viral in clinical trials done recently in China and France.
Thus, while COVID-19 is still making its way through the population, potential treatments are promising and - in the case of chloroquine - readily available in mass quantities at extremely low cost (less than 10 cents per pill in some countries). Also emerging is data from South Korea, Italy, the United States, and elsewhere that show the vast majority of cases that result in death are people over the age of 60 with underlying health conditions such as heart conditions, diabetes, or otherwise compromised immune systems.
That's the kind of news Wall Street traders can get behind, because, if successful treatments become widely available, people could be back at work within weeks, rather than months. While various governments - including California, which late Thursday announced a state-wide stay-at-home recommendation - are trying to limit transmission via social distancing and "soft" quarantines, communities that develop "herd immunity" quickest will be fastest to recover, meaning that the virus spreads readily and renders most of the population immune.
As the opening bell approaches, stock futures have lost some of their momentum, but still point to a positive opening Friday, which also happens to be a quadruple witching day.
Investopedia.com defines quadruple witching as "...a date on which stock index futures, stock index options, stock options, and single stock futures expire simultaneously. While stock options contracts and index options expire on the third Friday of every month, all four asset classes expire simultaneously on the third Friday of March, June, September, and December."
These dates are normally volatile, but should fit snugly into the current trading regime.
At the Close, Thursday, March 19, 2020:
Dow Jones Industrial Average: 20,087.19, +188.29 (+0.95%)
NASDAQ: 7,150.58, +160.74 (+2.30%)
S&P 500: 2,409.39, +11.29 (+0.47%)
NYSE: 9,461.30, +76.71 (+0.82%)
Stocks initially were lower, but found solid footing and ramped higher by mid-morning, the NASDAQ leading the way with speculators eyeing stocks that had cratered over the past three weeks, and began establishing positions at levels they considered to be bargains.
The S&P, Dow, and NYSE composite followed gamely but trailed the red-hot NASDAQ by more than a percentage point throughout the session. It was the first in many days that stocks had not ventured more than three percent in either direction for the last nine sessions, so some might argue that volatility is cooling, though still near record levels.
Moving 900 points from the morning lows to the close, the Dow's move was impressive, considering it has been absolutely damaged the prior session with Boeing (BA) leading the way down on Wednesday with a loss of some 25%. The aircraft manufacturer was down a mere four percent on Thursday, and is sporting a positive sign in pre-market trading Friday.
Thursday's unemployment claims numbers were 281,000, up by 71,000 over the prior week, but were for the week ending March 14, so much of the coronavirus-related data had not been tabulated, but will appear next Thursday.
Goldman Sachs’ Jan Hatzius wrote in a note to clients on Thursday night, “state-level anecdotes point to an unprecedented surge in layoffs this week.” The analyst claims that figures for the week ending March 21 will show initial claims rising to roughly 2¼ million, which would be the largest increase in initial jobless claims and the highest level on record. That's not unlikely, as major cities - San Francisco and New York in particular - are at or near lockdown levels of activity with many workers furloughed or otherwise idled by warnings or edicts from city and state officials.
Philly Fed’s manufacturing activity index crashed to an eight-year low of -12.7 in March from a three-year high of 36.7 in February. This follows the NY Fed’s Empire State Manufacturing index, which also dropped at a record pace to an 11-year low.
In a research report published on Thursday, Bank of America economists predicted the U.S. economy would lose 3.5 million jobs and GDP plummeting at a 12% pace in the second quarter, also probable figures given the severity of the reaction to COVID-19.
What's keeping Wall Street open for business and possibly ending the week with a positive tone are actions taken by the Fed which are too numerous to list, but include opening swap lines to other central banks, injecting billions of dollars via repo and QE, and wide open credit lines to primary dealers.
Also, President Trump's mention of a possible treatments for the virus in his now-daily news briefing, has been getting a great deal of attention. Specifically, the president mentioned a number of possible drugs that showed promise in tests, including Gilead Sciences' remdesivir (Money Daily mentioned Gilead's product back in January as a promising treatment and the stock has responded with a run from 63 to 78 since then) and chloroquine, an inexpensive drug long used to treat malaria, which is widely available and has proven to be an effective anti-viral in clinical trials done recently in China and France.
Thus, while COVID-19 is still making its way through the population, potential treatments are promising and - in the case of chloroquine - readily available in mass quantities at extremely low cost (less than 10 cents per pill in some countries). Also emerging is data from South Korea, Italy, the United States, and elsewhere that show the vast majority of cases that result in death are people over the age of 60 with underlying health conditions such as heart conditions, diabetes, or otherwise compromised immune systems.
That's the kind of news Wall Street traders can get behind, because, if successful treatments become widely available, people could be back at work within weeks, rather than months. While various governments - including California, which late Thursday announced a state-wide stay-at-home recommendation - are trying to limit transmission via social distancing and "soft" quarantines, communities that develop "herd immunity" quickest will be fastest to recover, meaning that the virus spreads readily and renders most of the population immune.
As the opening bell approaches, stock futures have lost some of their momentum, but still point to a positive opening Friday, which also happens to be a quadruple witching day.
Investopedia.com defines quadruple witching as "...a date on which stock index futures, stock index options, stock options, and single stock futures expire simultaneously. While stock options contracts and index options expire on the third Friday of every month, all four asset classes expire simultaneously on the third Friday of March, June, September, and December."
These dates are normally volatile, but should fit snugly into the current trading regime.
At the Close, Thursday, March 19, 2020:
Dow Jones Industrial Average: 20,087.19, +188.29 (+0.95%)
NASDAQ: 7,150.58, +160.74 (+2.30%)
S&P 500: 2,409.39, +11.29 (+0.47%)
NYSE: 9,461.30, +76.71 (+0.82%)
Friday, February 28, 2020
All Major US Indices Post Record Losses On Coronavirus (COVID-19) Shocks
This is how it always ends. A pileup on the interstate. Panic at the disco.
And this is only the beginning of the end of a bull market that's survived long past its sell-by date, the final six months being kept upright by oodles of fake bucks from the Fed via the repo market.
Prior to that it was stock buybacks and more Fed printing. It's over. Get used to it.
A couple of friends yesterday were in the first stage of he Kubler-Ross five levels of grief, denial, saying that the stock market would come back. This, despite evidence right in front of their faces of massive losses and still they won't move their money to a safer place.
Smart money will be making more all the way down. Most money will simply disappear.
All of the major indices suffered yesterday their worst point losses in stock market history. That's right, the worst ever.
The Dow Jones Industrials managed to dispose of 1,190.96 points, edging out the 1,175.21 trashing on February 5, 2018. The NASDAQ put down a marker that is likely to stand for a long time (if it's not broken sometime during the next few months), dropping 414 points, bettering the former record of -355.49 from April 4, 2000, by some 59 points. That's a lot.
The S&P 500 also crushed its previous record, ripping off 137.63 points, topping the old mark of -113.19 from February 5, 2018.
It's been a bad week for stocks as the coronavirus (COVID-19) continues to spread across the globe.
Oddly enough, but with some historical precedence, precious metals have been bashed down over the past few days as well, just as they were at the height of the global meltdown of 2008. Everything lost value then. Same now.
Crude oil took another bump lower, with WTI crude as low as $45.25 pr barrel. Yield on the ten-year note fell to yet another record low, checking in at 1.30% at the end of the day. The 30-year was at 1.79%.
With the final trading day of the week on deck, there isn't much more to say than glad it's over, but the tide has turned, with all the major indices already - in the span of just five days - in correction territory, donw by more than 10%. Unless something changes quickly, there's a bear market staring investors in the face.
Cant say that it hasn't been apparent. This is no surprise. All the market needed was a good scapegoat and it found one in coronavirus and its aftereffects.
At the Close, Thursday, February 27, 2020:
Dow Jones Industrial Average: 25,766.64, -1,190.96 (-4.42%)
NASDAQ: 8,566.48, -414.29 (-4.61%)
S&P 500: 2,978.76, -137.63 (-4.42%)
NYSE: 12,547.25, -499.35 (-3.83%)
And this is only the beginning of the end of a bull market that's survived long past its sell-by date, the final six months being kept upright by oodles of fake bucks from the Fed via the repo market.
Prior to that it was stock buybacks and more Fed printing. It's over. Get used to it.
A couple of friends yesterday were in the first stage of he Kubler-Ross five levels of grief, denial, saying that the stock market would come back. This, despite evidence right in front of their faces of massive losses and still they won't move their money to a safer place.
Smart money will be making more all the way down. Most money will simply disappear.
All of the major indices suffered yesterday their worst point losses in stock market history. That's right, the worst ever.
The Dow Jones Industrials managed to dispose of 1,190.96 points, edging out the 1,175.21 trashing on February 5, 2018. The NASDAQ put down a marker that is likely to stand for a long time (if it's not broken sometime during the next few months), dropping 414 points, bettering the former record of -355.49 from April 4, 2000, by some 59 points. That's a lot.
The S&P 500 also crushed its previous record, ripping off 137.63 points, topping the old mark of -113.19 from February 5, 2018.
It's been a bad week for stocks as the coronavirus (COVID-19) continues to spread across the globe.
Oddly enough, but with some historical precedence, precious metals have been bashed down over the past few days as well, just as they were at the height of the global meltdown of 2008. Everything lost value then. Same now.
Crude oil took another bump lower, with WTI crude as low as $45.25 pr barrel. Yield on the ten-year note fell to yet another record low, checking in at 1.30% at the end of the day. The 30-year was at 1.79%.
With the final trading day of the week on deck, there isn't much more to say than glad it's over, but the tide has turned, with all the major indices already - in the span of just five days - in correction territory, donw by more than 10%. Unless something changes quickly, there's a bear market staring investors in the face.
Cant say that it hasn't been apparent. This is no surprise. All the market needed was a good scapegoat and it found one in coronavirus and its aftereffects.
At the Close, Thursday, February 27, 2020:
Dow Jones Industrial Average: 25,766.64, -1,190.96 (-4.42%)
NASDAQ: 8,566.48, -414.29 (-4.61%)
S&P 500: 2,978.76, -137.63 (-4.42%)
NYSE: 12,547.25, -499.35 (-3.83%)
Tuesday, February 25, 2020
Coronavirus (COVID-19) Takes a Bite Out of Europe and Wall Street
COVID-19 continues to rage, and on Monday, it took a bite out of global markets, especially in Europe and the Americas, with stock indices falling in a range around 3.5% on the day.
For the Dow Jones Industrial Average, it was the biggest decline in two years and the third biggest point drop in the history of the index, closing just short of the #2 all-time drop, −1,032.89 on February 8, 2018 a decline of 4.15%. Monday's rip was a 3.65% decline.
The S&P's 111.89-point loss was the second-worst ever on that index, nearly topping a 113.19 loss, also from February 8, 2018. The NASDAQ's 355.31-point decline was the second biggest on record. The worst day for the NASDAQ was on April 14, 2000, when the index plummeted nine percent, posting a loss of 355.49, kicking off what would be known as the dotcom bust.
There's a general theme around these kinds of outsized losses. Usually, there's follow-up, but it doesn't always come the very next day. It's usually another day later. That's likely because investors have become so accustomed to "buying the dip" that any major loss is seen as a buying opportunity, and this may well be, but it's probably going to be better to sit and watch on Tuesday and be ready to jump in (or out) on Wednesday or Thursday.
Another wave will come, and it's not going to be pretty. as pointed out in our Weekend Wrap, investors aren't concerned with the spread of the coronavirus per se, they're worried about the effect it is going to have on businesses, particularly, in this case, those with supply chains emanating out of mainland China, and there are plenty of them in addition to the airlines and cruise ship companies which have already been hard hit by the tail of the virus.
The after-effects from COVID-19 aren't going to emerge for months. Less than two months into the pandemic, the virus has yet to unleash its most virulent strain upon a host of countries outside China, but the list of countries seeing the number of new infections growing is getting larger. Italy, South Korea, Iran, Hong Kong, and Japan are the current hotspots, with cases doubling every day or two.
It will take some months for this to slow down and eventually be contained, but it's going to be very disruptive to the normal flow of business for some time. This is definitely not a time to be bullish, though the second half of the year may be.
With stocks battered around the world, bonds rallied, with yield on the 10-year note dropping eight basis points, from 1.46% to 1.38%. The 30-year bond hit another all-time low yield at 1.84%.
The yield curve remains inverted at the short to middle, with 1, 2, 3, and 6-month bills all posting yields higher than the 10-year, though the 2s-10s remained constant at a 12 basis point difference, the 2-year ending the day at 1.26. The curve is nearly flat, with 1.60% at one end (1-month) and 1.84% at the other, on the 30-year. A soft underbelly in the middle, with a 1.21% yield on the 3s and 5s, makes the entire trip one of just 63 basis points, or just more than one half of a percent. That's FLAT!
Oil hit the skids, with WTI dropping to 51.43 per barrel, though that's still higher than what is likely coming in months ahead, especially if widespread quarantines become fashionable in developed countries, particularly speaking of Europe and the USA.
Gold and silver were well bid, but smashed down at the end of the day. It's not yet the time for the almighty dollar to suffer. The yen and euro must submit first, along with China's yuan. When these fiat currencies are exposed, when negative interest rates are more an essential element than an experimental one, then the metals will soar. The world isn't there yet and nobody will be adequately prepared when that eventuality occurs, which could be six months from now or six years. It's looking like it may be closer to the latter, as the global machinery of finance isn't as fragile as it may appear on the surface.
Keeping a sharp eye out for emerging hotspots and especially on the US mainland, stocks ripe for shorting may be in the entertainment, hospitality, and dining segments.
At the Close, Monday, February 24, 2020:
Dow Jones Industrial Average: 27,960.80, -1,031.61 (-3.56%)
NASDAQ: 9,221.28, -355.31, (-3.71%)
S&P 500: 3,225.89, -111.86 (-3.35%)
NYSE: 13,534.12, -441.66 (-3.16%)
For the Dow Jones Industrial Average, it was the biggest decline in two years and the third biggest point drop in the history of the index, closing just short of the #2 all-time drop, −1,032.89 on February 8, 2018 a decline of 4.15%. Monday's rip was a 3.65% decline.
The S&P's 111.89-point loss was the second-worst ever on that index, nearly topping a 113.19 loss, also from February 8, 2018. The NASDAQ's 355.31-point decline was the second biggest on record. The worst day for the NASDAQ was on April 14, 2000, when the index plummeted nine percent, posting a loss of 355.49, kicking off what would be known as the dotcom bust.
There's a general theme around these kinds of outsized losses. Usually, there's follow-up, but it doesn't always come the very next day. It's usually another day later. That's likely because investors have become so accustomed to "buying the dip" that any major loss is seen as a buying opportunity, and this may well be, but it's probably going to be better to sit and watch on Tuesday and be ready to jump in (or out) on Wednesday or Thursday.
Another wave will come, and it's not going to be pretty. as pointed out in our Weekend Wrap, investors aren't concerned with the spread of the coronavirus per se, they're worried about the effect it is going to have on businesses, particularly, in this case, those with supply chains emanating out of mainland China, and there are plenty of them in addition to the airlines and cruise ship companies which have already been hard hit by the tail of the virus.
The after-effects from COVID-19 aren't going to emerge for months. Less than two months into the pandemic, the virus has yet to unleash its most virulent strain upon a host of countries outside China, but the list of countries seeing the number of new infections growing is getting larger. Italy, South Korea, Iran, Hong Kong, and Japan are the current hotspots, with cases doubling every day or two.
It will take some months for this to slow down and eventually be contained, but it's going to be very disruptive to the normal flow of business for some time. This is definitely not a time to be bullish, though the second half of the year may be.
With stocks battered around the world, bonds rallied, with yield on the 10-year note dropping eight basis points, from 1.46% to 1.38%. The 30-year bond hit another all-time low yield at 1.84%.
The yield curve remains inverted at the short to middle, with 1, 2, 3, and 6-month bills all posting yields higher than the 10-year, though the 2s-10s remained constant at a 12 basis point difference, the 2-year ending the day at 1.26. The curve is nearly flat, with 1.60% at one end (1-month) and 1.84% at the other, on the 30-year. A soft underbelly in the middle, with a 1.21% yield on the 3s and 5s, makes the entire trip one of just 63 basis points, or just more than one half of a percent. That's FLAT!
Oil hit the skids, with WTI dropping to 51.43 per barrel, though that's still higher than what is likely coming in months ahead, especially if widespread quarantines become fashionable in developed countries, particularly speaking of Europe and the USA.
Gold and silver were well bid, but smashed down at the end of the day. It's not yet the time for the almighty dollar to suffer. The yen and euro must submit first, along with China's yuan. When these fiat currencies are exposed, when negative interest rates are more an essential element than an experimental one, then the metals will soar. The world isn't there yet and nobody will be adequately prepared when that eventuality occurs, which could be six months from now or six years. It's looking like it may be closer to the latter, as the global machinery of finance isn't as fragile as it may appear on the surface.
Keeping a sharp eye out for emerging hotspots and especially on the US mainland, stocks ripe for shorting may be in the entertainment, hospitality, and dining segments.
At the Close, Monday, February 24, 2020:
Dow Jones Industrial Average: 27,960.80, -1,031.61 (-3.56%)
NASDAQ: 9,221.28, -355.31, (-3.71%)
S&P 500: 3,225.89, -111.86 (-3.35%)
NYSE: 13,534.12, -441.66 (-3.16%)
Thursday, January 2, 2020
2019 Is Done: Stocks Roared, Trump Still President in 2020
2019 is over, and aren't we all so happy.
By many measures, it was a somewhat unremarkable year, ending with odd and twisted political theater, courtesy of Speaker of the House, Nancy Pelosi, and her merry band of miscreants, led by congresspeople Adam Schiff and Gerald Nadler, chairmen of, respectively, Intelligence and Judiciary committees. In the case of Schiff, the obvious misappropriation of his ilk being somehow related to intelligence was as humorless as it was frightening.
What made Pelosi's gambit significant was not that she impeached a president, but that she impeached one Donald J. Trump, a populist president who apparently did nothing wrong other than defeat the chosen candidate of the left, Hillary Rodham Clinton, in the presidential race of 2016. Thus, three years a a few months hither, Trump is impeached on charges that are as vacuous and ephemeral as the open-and-closed-door hearings themselves: Abuse of Power and Obstruction of Congress, neither of which are codified as criminal acts, and almost assuredly do not rise to the level of "high crimes and misdemeanors" outlined in the US constitution. In the final analysis, Trump's real crime is being nearly universally hated by leading Democrat politicians, movie stars, and the establishment media.
But that was not all.
Pelosi and nearly all of her fellow Democrats in the House voted along strict party lines and then failed to name managers or send the articles of impeachment over to the Senate for a trial, also prescribed by the constitution, leaving the president, and the nation, in a state of suspended impeachment limbo. This final, futile, feckless act of desperation came after months of Pelosi claiming that Trump needed to be impeached as quickly as possible as he posed a grave, immediate threat to our nation's security.
That argument went right out a window high on the Capitol, along with the baby, the bathwater, the Green New Deal, and the electoral hopes of a plethora Democrat candidates for federal offices in November 2020, not the least of which were named Joe Biden, Elizabeth Warren, and Pete whatever-his-name-is, mayor of South Bend, Indiana.
The funny thing about Mayor Pete, incidentally, is not that he is openly gay (the priests running the University of Notre Dame are still trying to downplay his position), but that the mainstream media almost never mentions this salient fact. Maybe they think that since he looks straight, people will forget or simply overlook his sexual inclination.
That's a good one. The MSM continues to push their agenda, which recently has devolved into a convoluted collection of mistruths, untruths, hidden truths, innuendo, scare tactics, race-baiting, gender-bending, misinformation, disinformation, lies, statistics, more lies, omissions, Facebook posts, deleted Tweets, and Instagram memes, mostly consisting of accusations of President Trump strangling kittens, starting wars, ending wars, killing immigrant children, or otherwise undermining democracy.
It's so sad that it has become almost laughable, but not quite yet. The mainstream media is saving the laugh track stuff for the primaries and general election. Chuck Todd, moderator of NBC's Meet the Press thinks that he, his network, the New York Times and Washington Post more believable than the president. That's how deluded and delusional most of the apparatchik reporters, readers, reciters and anchors are, but none more than the non-journalist, Todd. The mainstream media gave birth to the malady known as TDS (Trump Derangement Syndrome) and they continue to feed it. They're like doctors prescribing amphetamines to meth heads.
2019 finished on a nearly comical note if not for the snarly seriousness of the matter. Attempting to remove a sitting president isn't something that should be undertaken without careful consideration of the consequences. Democrats have not done their homework and have put the American public under considerable stress, needing relief.
For the financial world, New Year's Eve was especially celebratory, with champagne toasts to a grand and glorious annum of outsize gains for stocks. The major indices - following the sudden and sharp declines of 2018's fourth quarter - posted gains as follows:
Those are pretty good numbers.
Will they be repeated in 2020? Advance indications are that the bull market will continue, but, as every prospectus in the history of financial instruments and advisors purports, past performance is no guarantee of future results. Keep that in mind as the Fed will continue to keep flooding the market with liquidity until it decides to stop, which can happen at any time, without much notice.
Concern about the Fed changing its dovish, dulcet tune is not something on the minds of most investors heading into the new year. The Fed has shown itself to be accommodative at all times, no matter the circumstance, and they're likely to continue to be so. What used to be known as "applying the brakes" of an overheating economy by raising interest rates is not a probability in the coming year, as the economy shows about as much potential to overheat as a potato has to become an orange. It's not going to happen, and neither is a recession, because the Fed won't have that.
Precious metals also found bids. Gold posted a marvelous gain of 18.43%, rising from 1279.00 to 1514.75 over the course of 2019.
Silver was similarly impressive, going from 15.47 to 18.05 through the year for a profit of 16.68%.
To the dismay of consumers everywhere, WTI Crude Oil also experienced a rise in price, from 47.09 on January 3, 2019, to 61.68 on December 30, up 30.99%. That sent North American gas prices higher at the pump and elsewhere.
Prices for just about everything anybody would want or need were higher in 2019, by varying amounts. For that, we have the Fed, trade wars, tariffs, and greed to thank.
OK. 2020 is a thing. It's out of beta. Have at it.
At the Close, Tuesday, December 31, 2019:
Dow Jones Industrial Average: 28,538.44, +76.30 (+0.27%)
NASDAQ: 8,972.60, +26.61 (+0.30%)
S&P 500: 3,230.78, +9.49 (+0.29%)
NYSE Composite: 13,913.03, +36.88 (+0.27%)
 |
| Donald Trump with Brandi Brandt on the cover of Playboy magazine, March 1990 |
By many measures, it was a somewhat unremarkable year, ending with odd and twisted political theater, courtesy of Speaker of the House, Nancy Pelosi, and her merry band of miscreants, led by congresspeople Adam Schiff and Gerald Nadler, chairmen of, respectively, Intelligence and Judiciary committees. In the case of Schiff, the obvious misappropriation of his ilk being somehow related to intelligence was as humorless as it was frightening.
What made Pelosi's gambit significant was not that she impeached a president, but that she impeached one Donald J. Trump, a populist president who apparently did nothing wrong other than defeat the chosen candidate of the left, Hillary Rodham Clinton, in the presidential race of 2016. Thus, three years a a few months hither, Trump is impeached on charges that are as vacuous and ephemeral as the open-and-closed-door hearings themselves: Abuse of Power and Obstruction of Congress, neither of which are codified as criminal acts, and almost assuredly do not rise to the level of "high crimes and misdemeanors" outlined in the US constitution. In the final analysis, Trump's real crime is being nearly universally hated by leading Democrat politicians, movie stars, and the establishment media.
But that was not all.
Pelosi and nearly all of her fellow Democrats in the House voted along strict party lines and then failed to name managers or send the articles of impeachment over to the Senate for a trial, also prescribed by the constitution, leaving the president, and the nation, in a state of suspended impeachment limbo. This final, futile, feckless act of desperation came after months of Pelosi claiming that Trump needed to be impeached as quickly as possible as he posed a grave, immediate threat to our nation's security.
That argument went right out a window high on the Capitol, along with the baby, the bathwater, the Green New Deal, and the electoral hopes of a plethora Democrat candidates for federal offices in November 2020, not the least of which were named Joe Biden, Elizabeth Warren, and Pete whatever-his-name-is, mayor of South Bend, Indiana.
The funny thing about Mayor Pete, incidentally, is not that he is openly gay (the priests running the University of Notre Dame are still trying to downplay his position), but that the mainstream media almost never mentions this salient fact. Maybe they think that since he looks straight, people will forget or simply overlook his sexual inclination.
That's a good one. The MSM continues to push their agenda, which recently has devolved into a convoluted collection of mistruths, untruths, hidden truths, innuendo, scare tactics, race-baiting, gender-bending, misinformation, disinformation, lies, statistics, more lies, omissions, Facebook posts, deleted Tweets, and Instagram memes, mostly consisting of accusations of President Trump strangling kittens, starting wars, ending wars, killing immigrant children, or otherwise undermining democracy.
It's so sad that it has become almost laughable, but not quite yet. The mainstream media is saving the laugh track stuff for the primaries and general election. Chuck Todd, moderator of NBC's Meet the Press thinks that he, his network, the New York Times and Washington Post more believable than the president. That's how deluded and delusional most of the apparatchik reporters, readers, reciters and anchors are, but none more than the non-journalist, Todd. The mainstream media gave birth to the malady known as TDS (Trump Derangement Syndrome) and they continue to feed it. They're like doctors prescribing amphetamines to meth heads.
2019 finished on a nearly comical note if not for the snarly seriousness of the matter. Attempting to remove a sitting president isn't something that should be undertaken without careful consideration of the consequences. Democrats have not done their homework and have put the American public under considerable stress, needing relief.
For the financial world, New Year's Eve was especially celebratory, with champagne toasts to a grand and glorious annum of outsize gains for stocks. The major indices - following the sudden and sharp declines of 2018's fourth quarter - posted gains as follows:
- Dow: ended 2018 at 23,327.46; ended 2019 at 28,538.44; 22.34% gain
- NASDAQ: ended 2018 at 6,635.28; ended 2019 at 8,972.60; 35.25% gain
- S&P 500: ended 2018 at 2,506.85; ended 2019 at 3,230.78; 28.88% gain
- NYSE Composite: ended 2018 at 11,374.39; ended 2019 at 13,913.03; 22.32% gain
Those are pretty good numbers.
Will they be repeated in 2020? Advance indications are that the bull market will continue, but, as every prospectus in the history of financial instruments and advisors purports, past performance is no guarantee of future results. Keep that in mind as the Fed will continue to keep flooding the market with liquidity until it decides to stop, which can happen at any time, without much notice.
Concern about the Fed changing its dovish, dulcet tune is not something on the minds of most investors heading into the new year. The Fed has shown itself to be accommodative at all times, no matter the circumstance, and they're likely to continue to be so. What used to be known as "applying the brakes" of an overheating economy by raising interest rates is not a probability in the coming year, as the economy shows about as much potential to overheat as a potato has to become an orange. It's not going to happen, and neither is a recession, because the Fed won't have that.
Precious metals also found bids. Gold posted a marvelous gain of 18.43%, rising from 1279.00 to 1514.75 over the course of 2019.
Silver was similarly impressive, going from 15.47 to 18.05 through the year for a profit of 16.68%.
To the dismay of consumers everywhere, WTI Crude Oil also experienced a rise in price, from 47.09 on January 3, 2019, to 61.68 on December 30, up 30.99%. That sent North American gas prices higher at the pump and elsewhere.
Prices for just about everything anybody would want or need were higher in 2019, by varying amounts. For that, we have the Fed, trade wars, tariffs, and greed to thank.
OK. 2020 is a thing. It's out of beta. Have at it.
At the Close, Tuesday, December 31, 2019:
Dow Jones Industrial Average: 28,538.44, +76.30 (+0.27%)
NASDAQ: 8,972.60, +26.61 (+0.30%)
S&P 500: 3,230.78, +9.49 (+0.29%)
NYSE Composite: 13,913.03, +36.88 (+0.27%)
Friday, December 27, 2019
Shades of the Late 90s: S&P Poised to Be Best Year Since 1997
With just three more sessions left in the year, the S&P 500 is on the cusp of becoming the best year for stock investors in 22 years, since 1997, recollecting back to the halcyon days of the tech and dotcom boom (and subsequent bust).
With the close on Thursday of 3,229.91, the S&P is up 29.24%. Friday's futures are pointing to a positive open, and the index needs to gain just less than 12 points to surpass 2013's gain of 29.60% to become not just the best year of the decade, but of the nascent 21st century. 22 years ago, in 1997, the index gained 31.01%, and that was on the back of gains of 34% and 20% in 1995 and 1996, respectively.
Closing out 2018 on December 31 at 2,506.85, the S&P has piled on more than 700 points, but not all of that was in record territory. Recall that the final three months of 2018 were downright frightening to investors, as the index tumbled from a September 20 closing high of 2,930.75 to a low of 2,351.10 on December 24, prior to Treasury Secretary Steven Mnuchin's (in)famous phone call, purportedly, to the Plunge Protection Team (PPT), aka the President's Working Group on Financial Markets.
The rest is for the history books or maybe Christmas fantasies. The tremendous slide in stocks was halted with the market closed on December 25. The index had declined from 2,743.79 on November 28 by nearly 400 points and that was after the nearly 300 point losses from late September through October with a brief rally prior to Thanksgiving.
On the 26th of December, stocks boomed, with the S&P gaining an astonishing 116 points, standing at 2,467.70 on the close of trading. Wall Street's worst fears had been vanquished. Stability returned and little by little stocks came back into favor, with slow but steady gains through the early months of 2019, finally setting a new all-time high on April 23rd, when the index closed at 2,933.68. The mini bear market lasted all of seven months.
Through the middle of the year, gains were sporadic due to tensions over the trade war between China and the United States, though any negative news was quickly dispatched with hope for a breakthrough in days following. This kind of knee-jerk up and down action continued through summer and into the fall, with the index first bounding through the 3,000 mark on July 12.
The celebration was short-lived, however, as the index dipped back below 2,850 in mid-August, but began to gather momentum which carried it through the end of the third quarter. From October 1 forward to today, the S&P has tacked on nearly another 300 points, cresting over 3,000 again for the final time on October 23. The gains in November and December alone are approaching 200 points, about seven percent.
Should the S&P close out the year with reasonable gains - and there's little reason to believe that it won't - it could be the beginning of something big, if one is a believer in the predictive nature of charts and the cyclical behavior of stocks, politics and people.
Going back to 1995, when the S&P pumped higher by 34.11% - the best gain since 1958 - the following four years were all solid ones for investors. A 20.26% gain in 1996 was followed by gains of 31.01 in 1997, 26.67 in '98, and 19.53 in 1999. Those were also the years of Bill Clinton's second term as president of the United States, and, similarly to today's political circus, he was impeached, his affair with Monica Lewinsky occurring in 1994, his eventual impeachment by the House of Representatives and subsequent acquittal by the Senate in 1998.
While the parallels between the final years of the 1990s to today's market and political environment may be described as strikingly similar there is no assuredness that the same bounty will befall investors during what is likely to be President Trump's second term in office. Since the recent impeachment fiasco has fallen flat and is currently stalled out, perhaps the Democrats in the House will go for a second try after the elections in November of next year (or maybe even before).
Democrats' undying allegiance to the faith of "orange man bad" is assured. However, it appears that the president, for all his warts and flaws and tweets, has been doing a bang-up job on the economy, and it's his successes that have triggered the Dems' ire for the most part. If the Senate remains in Republican hands, it's a safe bet that Trump will reign for four more years, and that possibly, his economic policies (remember, he's made and lost billions of dollars in private life over the years) will usher in four more years of outstanding returns on the stock market.
One caveat to bear in mind. After 1999, some may remember what happened. The tech boom went bust. The S&P lost 10.14% in 2000, 13.14% in 2001, and 23.37% in 2002. Of course, the NASDAQ fared much worse, losing 78% over the same three years.
As we approach a new decade, think positive thoughts.
At the Close, Thursday, December 26, 2019:
Dow Jones Industrial Average: 28,621.39, +105.94 (+0.37%)
NASDAQ: 9,022.39, +69.51 (+0.78%)
S&P 500: 3,239.91, +16.53 (+0.51%)
NYSE Composite: 13,940.42, +45.28 (+0.33%)
With the close on Thursday of 3,229.91, the S&P is up 29.24%. Friday's futures are pointing to a positive open, and the index needs to gain just less than 12 points to surpass 2013's gain of 29.60% to become not just the best year of the decade, but of the nascent 21st century. 22 years ago, in 1997, the index gained 31.01%, and that was on the back of gains of 34% and 20% in 1995 and 1996, respectively.
Closing out 2018 on December 31 at 2,506.85, the S&P has piled on more than 700 points, but not all of that was in record territory. Recall that the final three months of 2018 were downright frightening to investors, as the index tumbled from a September 20 closing high of 2,930.75 to a low of 2,351.10 on December 24, prior to Treasury Secretary Steven Mnuchin's (in)famous phone call, purportedly, to the Plunge Protection Team (PPT), aka the President's Working Group on Financial Markets.
The rest is for the history books or maybe Christmas fantasies. The tremendous slide in stocks was halted with the market closed on December 25. The index had declined from 2,743.79 on November 28 by nearly 400 points and that was after the nearly 300 point losses from late September through October with a brief rally prior to Thanksgiving.
On the 26th of December, stocks boomed, with the S&P gaining an astonishing 116 points, standing at 2,467.70 on the close of trading. Wall Street's worst fears had been vanquished. Stability returned and little by little stocks came back into favor, with slow but steady gains through the early months of 2019, finally setting a new all-time high on April 23rd, when the index closed at 2,933.68. The mini bear market lasted all of seven months.
Through the middle of the year, gains were sporadic due to tensions over the trade war between China and the United States, though any negative news was quickly dispatched with hope for a breakthrough in days following. This kind of knee-jerk up and down action continued through summer and into the fall, with the index first bounding through the 3,000 mark on July 12.
The celebration was short-lived, however, as the index dipped back below 2,850 in mid-August, but began to gather momentum which carried it through the end of the third quarter. From October 1 forward to today, the S&P has tacked on nearly another 300 points, cresting over 3,000 again for the final time on October 23. The gains in November and December alone are approaching 200 points, about seven percent.
Should the S&P close out the year with reasonable gains - and there's little reason to believe that it won't - it could be the beginning of something big, if one is a believer in the predictive nature of charts and the cyclical behavior of stocks, politics and people.
Going back to 1995, when the S&P pumped higher by 34.11% - the best gain since 1958 - the following four years were all solid ones for investors. A 20.26% gain in 1996 was followed by gains of 31.01 in 1997, 26.67 in '98, and 19.53 in 1999. Those were also the years of Bill Clinton's second term as president of the United States, and, similarly to today's political circus, he was impeached, his affair with Monica Lewinsky occurring in 1994, his eventual impeachment by the House of Representatives and subsequent acquittal by the Senate in 1998.
While the parallels between the final years of the 1990s to today's market and political environment may be described as strikingly similar there is no assuredness that the same bounty will befall investors during what is likely to be President Trump's second term in office. Since the recent impeachment fiasco has fallen flat and is currently stalled out, perhaps the Democrats in the House will go for a second try after the elections in November of next year (or maybe even before).
Democrats' undying allegiance to the faith of "orange man bad" is assured. However, it appears that the president, for all his warts and flaws and tweets, has been doing a bang-up job on the economy, and it's his successes that have triggered the Dems' ire for the most part. If the Senate remains in Republican hands, it's a safe bet that Trump will reign for four more years, and that possibly, his economic policies (remember, he's made and lost billions of dollars in private life over the years) will usher in four more years of outstanding returns on the stock market.
One caveat to bear in mind. After 1999, some may remember what happened. The tech boom went bust. The S&P lost 10.14% in 2000, 13.14% in 2001, and 23.37% in 2002. Of course, the NASDAQ fared much worse, losing 78% over the same three years.
As we approach a new decade, think positive thoughts.
At the Close, Thursday, December 26, 2019:
Dow Jones Industrial Average: 28,621.39, +105.94 (+0.37%)
NASDAQ: 9,022.39, +69.51 (+0.78%)
S&P 500: 3,239.91, +16.53 (+0.51%)
NYSE Composite: 13,940.42, +45.28 (+0.33%)
Sunday, November 10, 2019
WEEKEND WRAP: Stocks Set Records; Bonds, Precious Metals Battered
The three major averages - Dow, NASDAQ, S&P 500 - all reached record territory this week, and, despite some give-back on Wednesday, closed out the week with all-time high closing prices. The lone laggard was the NYSE Composite, which hasn't yet managed to get back to January 2018 levels, but it is close, within 250 points.
Catalysts for the massive run-up through October and into November were supposed breakthroughs in the ongoing US-China trade deadlock and the Fed's 25 basis point cut in the federal funds rate last Wednesday (October 30). Positive news, or even the hint of such, was enough to ignite stocks in the US while Europe tetters on the verge of recession.
Gains made during the past five or six weeks look to be locked in for year-end, but there's barely a sniff of selling among the investment crowd. New records could be set in the indices through Thanksgiving, Black Friday and beyond, especially if indications of renewed vigor in manufacturing develops. It's been dragging lately, but the sector is wide and varied. Some states are doing well as opposed to ones like New York, which has lost 10,000 manufacturing jobs this year, and some sub-sectors are outperforming. Metal tooling is seeing a revival thanks to tariffs on steel, while semiconductors are slumping.
While stocks continued on their merry way to equity nirvana, fixed investment took a beating, especially in the case of the benchmark 10-year note, which appears headed back above two percent, closing out this week with a yield of 1.94%, the highest since July 31 (2.02%). The long end of the curve is certainly steepening, and in a hurry. The 30-year bond checked out on Friday with a yield of 2.43, just a basis point below the closing on August 1 (2.44%).
The short end of the treasury yield curve is still flat, with the difference between 1-month bills and the 5-year note a mere 18 basis points (1.56-1.74%). The curve has maintained an un-inverted posture for nearly three months now, since the 2s-10s crossed for three days in August of this year. That brief period of inversion did engender some recession fears at the time, but they have been allayed by the curve settling into a more orderly regimen.
Recession still being a possibility, always, chances of it occurring anytime soon were quelled when third quarter GDP came in hotter than expected, at 1.9%. Not a good number, the fact that it was above most estimates (1.6%) was enough to hold off the bears. If the measurement holds for the next two estimates of third quarter GDP, the absolute earliest recession bells could ring would be after the first quarter of 2020, if both the fourth quarter of 2019 and first of 2020 were negative, and those are some pretty big ifs.
Thus, it's unlikely that the US will encounter a recession - or at least have one reported - until after the second quarter of 2020, but the economy is looking like it will continue to grow, albeit modestly, until at least the elections in November, good news for President Trump and Republicans in general, and not-so-good for Democrats who wail about everything, even when nothing is amiss in any major way.
Also hammered were precious metals, with silver falling below the Maginot line of $17/ounce late in the week to close out at $16.77. Gold fell from right around $1500/ounce to end the week at its lowest level since the start of October, at $1458.80.
If interest rates continue to climb, it could exacerbate the bearish tone already developing in the metals. To holders, it may not be such a big deal, but more of an opportunity to buy more on the supposed cheap. Precious metals have been out of favor since their massive run-up from 1999 to 2011, and there seems to be no end in sight for the overall bear regime that has taken hold.
One has to consider the rationale for gold or silver as one of protection, so, from a buyer's standpoint there's absolutely nothing wrong with holding or storing some of the shiny stuff. It still maintains value, though it has been fluctuating greatly over the past 20 years, but what hasn't. Gold and silver still provide peace of mind and a store of value that is better, over the longest of terms, than any other investment, save possibly real estate, the difference being that no taxes have to be paid on the shiny metals.
Outlooking for the next seven weeks through Christmas is decidedly positive for stocks, which is all anybody really seems to care about these days. Pension funds are all in, as many have to be, in hopes that there will not be massive underfunding for the retiring baby boomers.
In the most simplistic of ways, stocks may be overvalued, but the rising yields on bonds may tempt some of the less-daring speculators to dive into a safety play. Worse things have happened, but, for now, there seems to be a nice balancing act between the Fed, the government, business, and heavily-indebted consumers, the latter group buoying and buying into the great money scheme of the longest bull market in history.
Some day, it will all come to a screeching halt. By most measures, it's not stopping any time soon.
At the Close, Friday, November 8, 2019:
Dow Jones Industrial Average: 27,681.24, +6.44 (+0.02%)
NASDAQ: 8,475.31, +40.80 (+0.48%)
S&P 500: 3,093.08, +7.90 (+0.26%)
NYSE Composite: 13,407.80, +12.26 (+0.09%)
For the Week:
Dow: +333.88 (+1.22%)
NASDAQ: +88.92 (+1.06%)
S&P 500: +26.17 (+0.85%)
NYSE Composite: +107.54 (+0.81%)
Catalysts for the massive run-up through October and into November were supposed breakthroughs in the ongoing US-China trade deadlock and the Fed's 25 basis point cut in the federal funds rate last Wednesday (October 30). Positive news, or even the hint of such, was enough to ignite stocks in the US while Europe tetters on the verge of recession.
Gains made during the past five or six weeks look to be locked in for year-end, but there's barely a sniff of selling among the investment crowd. New records could be set in the indices through Thanksgiving, Black Friday and beyond, especially if indications of renewed vigor in manufacturing develops. It's been dragging lately, but the sector is wide and varied. Some states are doing well as opposed to ones like New York, which has lost 10,000 manufacturing jobs this year, and some sub-sectors are outperforming. Metal tooling is seeing a revival thanks to tariffs on steel, while semiconductors are slumping.
While stocks continued on their merry way to equity nirvana, fixed investment took a beating, especially in the case of the benchmark 10-year note, which appears headed back above two percent, closing out this week with a yield of 1.94%, the highest since July 31 (2.02%). The long end of the curve is certainly steepening, and in a hurry. The 30-year bond checked out on Friday with a yield of 2.43, just a basis point below the closing on August 1 (2.44%).
The short end of the treasury yield curve is still flat, with the difference between 1-month bills and the 5-year note a mere 18 basis points (1.56-1.74%). The curve has maintained an un-inverted posture for nearly three months now, since the 2s-10s crossed for three days in August of this year. That brief period of inversion did engender some recession fears at the time, but they have been allayed by the curve settling into a more orderly regimen.
Recession still being a possibility, always, chances of it occurring anytime soon were quelled when third quarter GDP came in hotter than expected, at 1.9%. Not a good number, the fact that it was above most estimates (1.6%) was enough to hold off the bears. If the measurement holds for the next two estimates of third quarter GDP, the absolute earliest recession bells could ring would be after the first quarter of 2020, if both the fourth quarter of 2019 and first of 2020 were negative, and those are some pretty big ifs.
Thus, it's unlikely that the US will encounter a recession - or at least have one reported - until after the second quarter of 2020, but the economy is looking like it will continue to grow, albeit modestly, until at least the elections in November, good news for President Trump and Republicans in general, and not-so-good for Democrats who wail about everything, even when nothing is amiss in any major way.
Also hammered were precious metals, with silver falling below the Maginot line of $17/ounce late in the week to close out at $16.77. Gold fell from right around $1500/ounce to end the week at its lowest level since the start of October, at $1458.80.
If interest rates continue to climb, it could exacerbate the bearish tone already developing in the metals. To holders, it may not be such a big deal, but more of an opportunity to buy more on the supposed cheap. Precious metals have been out of favor since their massive run-up from 1999 to 2011, and there seems to be no end in sight for the overall bear regime that has taken hold.
One has to consider the rationale for gold or silver as one of protection, so, from a buyer's standpoint there's absolutely nothing wrong with holding or storing some of the shiny stuff. It still maintains value, though it has been fluctuating greatly over the past 20 years, but what hasn't. Gold and silver still provide peace of mind and a store of value that is better, over the longest of terms, than any other investment, save possibly real estate, the difference being that no taxes have to be paid on the shiny metals.
Outlooking for the next seven weeks through Christmas is decidedly positive for stocks, which is all anybody really seems to care about these days. Pension funds are all in, as many have to be, in hopes that there will not be massive underfunding for the retiring baby boomers.
In the most simplistic of ways, stocks may be overvalued, but the rising yields on bonds may tempt some of the less-daring speculators to dive into a safety play. Worse things have happened, but, for now, there seems to be a nice balancing act between the Fed, the government, business, and heavily-indebted consumers, the latter group buoying and buying into the great money scheme of the longest bull market in history.
Some day, it will all come to a screeching halt. By most measures, it's not stopping any time soon.
At the Close, Friday, November 8, 2019:
Dow Jones Industrial Average: 27,681.24, +6.44 (+0.02%)
NASDAQ: 8,475.31, +40.80 (+0.48%)
S&P 500: 3,093.08, +7.90 (+0.26%)
NYSE Composite: 13,407.80, +12.26 (+0.09%)
For the Week:
Dow: +333.88 (+1.22%)
NASDAQ: +88.92 (+1.06%)
S&P 500: +26.17 (+0.85%)
NYSE Composite: +107.54 (+0.81%)
Monday, October 14, 2019
WEEKEND WRAP: Stocks gain on Friday Bulge; 21 Months of Sideways Trading
Stocks gained nicely for the week, thanks entirely to Friday's massive, across-the-board gains. Otherwise, the week would have been flat to slightly lower.
Anybody who went into the weekend with giddiness over his or her market smarties shouldn't get too cocky because for the past 21 months, stocks have gone sideways.
Since February, 2018, the Dow Jones Industrial Average is up a whopping 200 points. That's a return of less than one percent over the course of nearly two years. Investors are free to believe that 2019 is a strong year for stocks, but that's only because of the massive fourth quarter selloff in 2018. All stocks have done this annum is rebound, with the end result being sideways for the whole.
Over the same time span, the NASDAQ is higher by about 500 points, a gain of less than seven percent; the S&P tacked on 100 points for a rise of roughly three percent, and the NYSE Composite has actually lost about 700 points, or minus five percent.
If that's not sideways, France isn't in Europe.
A repeat of last year's fourth quarter, when stocks slid in October and then again in December, would put most portfolios under water for the past two years and that's not something your financial advisor is going to be happy having to tell you.
Well, since this is Columbus Day, we can all bask in the knowledge that while the brave explorer of 1492 did not exactly prove the earth was round, he was headed in the right direction. Little could Columbus imagine that 500+ years hence, all of the round-earth progress would result in flat-lined equities.
Not up. Not down. Sideways.
At the Close, Friday, October 11, 2019:
Dow Jones Industrial Average: 26,816.59, +319.89 (+1.21%)
NASDAQ: 8,057.04, +106.26 (+1.34%)
S&P 500: 2,970.27, +32.14 (+1.09%)
NYSE Composite: 12,926.92, +160.92 (+1.26%)
For the Week:
Dow: +319.92 (+1.21%)
NASDAQ: +74.56 (+0.93%)
S&P 500: +18.26 (+0.62%)
NYSE Composite: +95.37 (+0.74%)
Anybody who went into the weekend with giddiness over his or her market smarties shouldn't get too cocky because for the past 21 months, stocks have gone sideways.
Since February, 2018, the Dow Jones Industrial Average is up a whopping 200 points. That's a return of less than one percent over the course of nearly two years. Investors are free to believe that 2019 is a strong year for stocks, but that's only because of the massive fourth quarter selloff in 2018. All stocks have done this annum is rebound, with the end result being sideways for the whole.
Over the same time span, the NASDAQ is higher by about 500 points, a gain of less than seven percent; the S&P tacked on 100 points for a rise of roughly three percent, and the NYSE Composite has actually lost about 700 points, or minus five percent.
If that's not sideways, France isn't in Europe.
A repeat of last year's fourth quarter, when stocks slid in October and then again in December, would put most portfolios under water for the past two years and that's not something your financial advisor is going to be happy having to tell you.
Well, since this is Columbus Day, we can all bask in the knowledge that while the brave explorer of 1492 did not exactly prove the earth was round, he was headed in the right direction. Little could Columbus imagine that 500+ years hence, all of the round-earth progress would result in flat-lined equities.
Not up. Not down. Sideways.
At the Close, Friday, October 11, 2019:
Dow Jones Industrial Average: 26,816.59, +319.89 (+1.21%)
NASDAQ: 8,057.04, +106.26 (+1.34%)
S&P 500: 2,970.27, +32.14 (+1.09%)
NYSE Composite: 12,926.92, +160.92 (+1.26%)
For the Week:
Dow: +319.92 (+1.21%)
NASDAQ: +74.56 (+0.93%)
S&P 500: +18.26 (+0.62%)
NYSE Composite: +95.37 (+0.74%)
Tuesday, August 20, 2019
US and European Markets All Suffer End-of-Session Dumping
The major indices - not just in the US, but it Europe as well - fell victim to late-day large scale stock dumping, with all US indices, along with Germany's DAX, France's CAC 40, Britain's FTSE, and the Euronext 100, closing at the low points of their respective sessions.
This can only indicate one of two things: a rebalancing was taking place in the indices, or, big moneys getting out of stocks before Wednesday's opening.
The first case is probably not feasible, since these various indices do not rebalance all on the same day. That would lead to serious dislocations and confusion. Thus, that leaves the second case, in which some large traders with inside information made a hasty exit in anticipation of something terrible on Wednesday. What that terrible thing may be is currently unfathomable, but will probably come to light when European markets open on the morrow.
Market conditions such as this cannot be viewed as one-offs, as they are occurring with too much regularity. There's far too much volatility and sudden reversals to be credited to randomness; it's much more likely that markets are being manipulated by a cartel of central banks and their agencies, the major brokerages, meaning that the average investor is once again left holding a bag of stocks worth less than they were the day before.
One can claim conspiracy often enough to attract attention, and then division, which is why the regulars in the financial media will never let loose with any opinion even tangentially touching upon a conspiratorial theme. Those outside the mainstream have no such binding authority as a job or a narrative, so it's left to bloggers and speculators to sort out the less-than-obvious maneuverings in the market.
While the losses were not large, they were uniform, which indicates at least some coordination.
At the Close, Tuesday, August 20, 2019:
Dow Jones Industrial Average: 25,962.44, -173.35 (-0.66%)
NASDAQ: 7,948.56, -54.25 (-0.68%)
S&P 500: 2,900.51, -23.14 (-0.79%)
NYSE Composite: 12,599.41, -88.51 (-0.70%)
This can only indicate one of two things: a rebalancing was taking place in the indices, or, big moneys getting out of stocks before Wednesday's opening.
The first case is probably not feasible, since these various indices do not rebalance all on the same day. That would lead to serious dislocations and confusion. Thus, that leaves the second case, in which some large traders with inside information made a hasty exit in anticipation of something terrible on Wednesday. What that terrible thing may be is currently unfathomable, but will probably come to light when European markets open on the morrow.
Market conditions such as this cannot be viewed as one-offs, as they are occurring with too much regularity. There's far too much volatility and sudden reversals to be credited to randomness; it's much more likely that markets are being manipulated by a cartel of central banks and their agencies, the major brokerages, meaning that the average investor is once again left holding a bag of stocks worth less than they were the day before.
One can claim conspiracy often enough to attract attention, and then division, which is why the regulars in the financial media will never let loose with any opinion even tangentially touching upon a conspiratorial theme. Those outside the mainstream have no such binding authority as a job or a narrative, so it's left to bloggers and speculators to sort out the less-than-obvious maneuverings in the market.
While the losses were not large, they were uniform, which indicates at least some coordination.
At the Close, Tuesday, August 20, 2019:
Dow Jones Industrial Average: 25,962.44, -173.35 (-0.66%)
NASDAQ: 7,948.56, -54.25 (-0.68%)
S&P 500: 2,900.51, -23.14 (-0.79%)
NYSE Composite: 12,599.41, -88.51 (-0.70%)
Wednesday, December 19, 2018
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:
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%)
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%)
Tuesday, December 4, 2018
Stocks Rocked As Europe Burns, Political Skepticism Soars; Globalism Grips As Populism Rises
With all the good news that's been spreading of late, the magnitude of this most recent setback was, for some, a little overdone. Others, who see the planet for what it is, see populism on the rise and globalism fading into history.
Prepare for some over-the-top hyperbole in 3...2...1...
Besides wealth inequality reaching heights heretofore unseen, taxation of the general populace in developed nations has reached catastrophic proportions. As seen in the European protests, the civility of the average man and woman, having been grossly abused, has been stretched beyond the limits of many whose toils seem to barely keep pace with the endless panoply of regulations, fees, fines, taxes and penalties. This is how epochs end.
In France, Germany, Sweden, Belgium, Italy and elsewhere, the citizenry has had enough of misrepresentation by so-called officials, elected, selected, or otherwise, and they are seeking economic and social freedom. The forces of globalism have been resolute in obfuscating reality and distorting the obvious all the while raking in the spoils of their pernicious policies and decietful politics.
In the United States, the working class has seen through the flash narrative surrounding the demonization of the popularly-elected President Trump. Americans no longer want illegal migration across their borders, handouts to the poor or the rich, nor policies that do them no good. The entire planet is on the verge of an emotional and psychological breaking point. It has been many years in the making, but, every day that goes by is rife with lies, innuendo, untruths, double-talk. Within the next year or two, everything is going to go sideways. The politics have simply outpaced the usefulness of the ruling class. It's apparent to just about anybody who give a damn and the wisest of the monied class on Wall Street are running for the proverbial hills.
Who knows what causes stocks to zig-zag on a day-to-day basis, for the Dow to pick up 600 points one day and drop nearly 800 the next?
In any case, the point drop on the Dow was the fourth-largest in market history. The other three larger also occurred this year. For the NASDAQ, it was the sixth largest. All of the 11 largest point declines on the NASDAQ occurred in either 2000 or 2018.
The Dow transports (DJT, -4.39%) tumbled 476.37 points, or 4.4%, with all 20 components closing lower. The previous biggest-ever point decline was 445.16 points on Oct. 10. At its intraday worst, the index was down as much as 565.23 points, or 5.2%.
Analysis of the recent volatility is sure to take on obscene forms from a parade of wizened economists, generalists, and hobbyists. None of them will have it exactly right. One day, all the world's full of unicorns and honey. The next, it's going to hell in a hand basket.
Whatever your particular niche or trading style, the current offers a uniquely volatile and confounding proposition for traders, speculators, or even the casual investor.
For the coming months, expect more of the same.
Dow Jones Industrial Average December Scorecard:
At the Close, Tuesday, December 4, 2018:
Dow Jones Industrial Average: 25,027.07, -799.36 (-3.10%)
NASDAQ: 7,158.43, -283.09 (-3.80%)
S&P 500: 2,700.06, -90.31 (-3.24%)
NYSE Composite: 12,221.98, -355.56 (-2.83%)
Prepare for some over-the-top hyperbole in 3...2...1...
Besides wealth inequality reaching heights heretofore unseen, taxation of the general populace in developed nations has reached catastrophic proportions. As seen in the European protests, the civility of the average man and woman, having been grossly abused, has been stretched beyond the limits of many whose toils seem to barely keep pace with the endless panoply of regulations, fees, fines, taxes and penalties. This is how epochs end.
In France, Germany, Sweden, Belgium, Italy and elsewhere, the citizenry has had enough of misrepresentation by so-called officials, elected, selected, or otherwise, and they are seeking economic and social freedom. The forces of globalism have been resolute in obfuscating reality and distorting the obvious all the while raking in the spoils of their pernicious policies and decietful politics.
In the United States, the working class has seen through the flash narrative surrounding the demonization of the popularly-elected President Trump. Americans no longer want illegal migration across their borders, handouts to the poor or the rich, nor policies that do them no good. The entire planet is on the verge of an emotional and psychological breaking point. It has been many years in the making, but, every day that goes by is rife with lies, innuendo, untruths, double-talk. Within the next year or two, everything is going to go sideways. The politics have simply outpaced the usefulness of the ruling class. It's apparent to just about anybody who give a damn and the wisest of the monied class on Wall Street are running for the proverbial hills.
Who knows what causes stocks to zig-zag on a day-to-day basis, for the Dow to pick up 600 points one day and drop nearly 800 the next?
In any case, the point drop on the Dow was the fourth-largest in market history. The other three larger also occurred this year. For the NASDAQ, it was the sixth largest. All of the 11 largest point declines on the NASDAQ occurred in either 2000 or 2018.
The Dow transports (DJT, -4.39%) tumbled 476.37 points, or 4.4%, with all 20 components closing lower. The previous biggest-ever point decline was 445.16 points on Oct. 10. At its intraday worst, the index was down as much as 565.23 points, or 5.2%.
Analysis of the recent volatility is sure to take on obscene forms from a parade of wizened economists, generalists, and hobbyists. None of them will have it exactly right. One day, all the world's full of unicorns and honey. The next, it's going to hell in a hand basket.
Whatever your particular niche or trading style, the current offers a uniquely volatile and confounding proposition for traders, speculators, or even the casual investor.
For the coming months, expect more of the same.
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 |
At the Close, Tuesday, December 4, 2018:
Dow Jones Industrial Average: 25,027.07, -799.36 (-3.10%)
NASDAQ: 7,158.43, -283.09 (-3.80%)
S&P 500: 2,700.06, -90.31 (-3.24%)
NYSE Composite: 12,221.98, -355.56 (-2.83%)
Saturday, November 24, 2018
WEEKEND WRAP: Black Friday or Blue Friday? Oil Down 34%, S&P, NASDAQ, NYSE In Correction
The beatings will continue until morale improves.
While the exact origin of the above phrase is clouded, it certainly applies to the current stock trading regimen that has sent world markets spinning downward and US stocks to levels comparable to nearly a year ago.
The sad situation for stocks continued even into the holiday season, when the traditionally upbeat and optimistic Black Friday half-day session turned into a savage selloff that lasted right through to the 1:00 pm ET close.
Following a brief respite on Wednesday that saw the Dow end down less than one point, and the Thanksgiving Day holiday, investors took their cues from overseas markets, which were sold off on Thursday, extending the dour moods in Europe and the Pacific Rim. Friday's trading in foreign markets was mixed, though the outlier was Brazil, where the Bovespa lost 1,247.21 points (-1.43%), confirming the theme of a global, rolling, slow-motion crash in equity values.
According to respected sources (ZeroHedge and ETF Daily News), the Dow suffered its worst Black Friday loss since 2010 and the S&P saw its worst performance for the day after Thanksgiving since the mid-1930s.
While the Dow has not yet caught down to its deepest depths of 2018, it is approaching the 2018 bottom from March 23 (23,533.20), promoting the idea that the worst of this round o selling is not quite over.
Friday's session concluded another in a series of poor performances for stocks, nearly equalling the declines seen in the week of October 8-12, sending all of the major indices below their respective 50, 200, and 40-week moving averages.
While shoppers in the US were out buying electronics, toys, appliances, clothes, and assorted trinkets, Wall Street traders were selling off assets, not an encouraging start to the holiday season. All of the major averages ended the week below where they started 2018. Without a significant Santa Claus rally, 2018 looks to be one of the worst for traders since 2008, when the S&P 500 lost 38.49%. Since then, only twice - in 2011 and 2015 - has the S&P closed lower than the close from the previous year. Currently, the S&P is down less than two percent on the year.
Friday's losses sent there S&P 500 into correction territory, ending down 10.17% from the September 20 all-time high (2930.75). The NASDAQ sank further into correction, and is approaching an outright bear market. The NASDAQ is down 14,44% from its August 29 high (8109.69).
On October 3rd, the Dow Industrials closed at an all-time high of 26,828.39. On Friday, it closed down 9.48% from that level.
The NYSE Composite, which peaked on January 25 at 13,637.02, is down 11.74%, and the Dow Jones Transportation Index is down 10.39 since closing at 11,570.84 on September 14.
Finally, the big loser for the week - which will eventually be a boon to consumers - was oil, which was once again crushed, as WTI crude lost more than seven percent, to $50.42/barrel. On October 3rd, coincidentally the game day the Dow peaked, WTI crude sold for $76.41 per barrel. That's a decline of 34.02% in just over seven weeks. Now, that's a crash.
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 |
At the Close, Friday, November 23, 2018:
Dow Jones Industrial Average: 24,285.95, -178.74 (-0.73%)
NASDAQ: 6,938.98, -33.27 (-0.48%)
S&P 500: 2,632.56, -17.37 (-0.66%)
NYSE Composite: 12,036.24, -87.10 (-0.72%)
For the Week:
Dow: -1,127.27 (-4.44%)
NASDAQ: -308.89 (-4.26%)
S&P 500: -103.71 (-3.79%)
NYSE Composite: -364.04 (-2.94%)
Tuesday, November 20, 2018
Crash Much? All 2018 Gains Wiped Out In Global Stock Rout
Where to begin?
Today's stock market rout was worldwide, starting in Japan, as the NIKKEI fell 238 points, the Hong Kong's Hang Sent slid 531 points and China's SSE Composite Index closed at 2,645.85, down 57.66 points, or -2.13%.
Europe was next up on the hit list, as the Germany's DAX was off 178.13 points (-1.58%), closing in on a 20% decline for the year. Other European stock indices were down between one and one-and-a-half percent.
As markets opened in the Western Hemisphere, the selling accelerated, sending the Dow down more than 400 points at the open and other North and South American indices falling sharply. By the end of the day, it was absolute carnage, a veritable sea of red. Every equity index on Yahoo's Major World Indices page was lower, save Malaysia's KLCI, which managed a 4-point, 0.25% gain.
Seriously, though, today's crash began in the fall of 2008, when stocks were wiped out in the face of the Lehman Brothers collapse and the sub-prime housing crisis, and also had roots from April 9, 2009, when stocks finally bottomed out as the FASB loosened accounting rules, issuing an official update to rule 157, allowing companies to deviate from standard mark-to-market principles in valuing assets.
The Fed and its central bank cohorts had their dirty little fingers in the dikes as well, conjuring up trillions of dollars in liquidity, effectively bailing out financial institutions that were, essentially, bankrupt. That's what brought us here today, ten years and trillions of dollars later. The everything bubble has finally popped.
This is a rolling crash, not a hard one, like on Black Tuesday in 1929. There have been - in just the past eight trading days - losses on the Dow of 201, 602, 100, 206, 395 points and today's 552. There were gains of 201 and 124 points on Thursday and Friday of last week, but the cumulative effect comes to a loss of 1731 points since November 8, roughly a seven percent dribble.
Tuesday's losses sent the S&P 500 hurtling toward correction territory. From the close of 2,930.75 on September 20 to today's finish at 2,641.89 is a 9.86% loss. For those in the rounding up-or-down crowd, that's 10 percent, or, close enough for horseshoes or hand grenades.
For those keeping score, the Dow is down 8.81% from it's closing high on October 3 (26,828.39). The NASDAQ, which has been in and out and back into correction since October 24, is still up on the year... a whopping five points and change. The index is down 14.82% since August 29. Albeit marginally, the Dow Industrials, S&P, NYSE Composite and the Dow Transports are all lower for the year.
The NYSE Composite which peaked at 13,637.02 on January 26 and never regained that height, is down 11.61%, reaching down to correction levels today, though, like the NASDAQ, it had breached the 10% down level on October 24 and since recovered.
Lastly, the Dow Jones Industrial Average finished today with a loss of 321.52 (-3.05%), at 10,212.94. That's an 11.74% drop from the all-time high close of 11,570.84, September 14.
In the commodity space, oil was crushed again today, as WTI crude futures ended at 53.22, down $3.98 per barrel (-6.94%). According to oilprice.com, that's the lowest price since mid-October of 2017.
Where do stocks go from here? That question almost answers itself.
Dow Jones Industrial Average November Scorecard:
At the Close, Tuesday, November 20, 2018:
Dow Jones Industrial Average: 24,465.64, -551.80 (-2.21%)
NASDAQ: 6,908.82, -119.65 (-1.70%)
S&P 500: 2,641.89, -48.84 (-1.82%)
NYSE Composite: 12,054.17, -226.74 (-1.85%)
Today's stock market rout was worldwide, starting in Japan, as the NIKKEI fell 238 points, the Hong Kong's Hang Sent slid 531 points and China's SSE Composite Index closed at 2,645.85, down 57.66 points, or -2.13%.
Europe was next up on the hit list, as the Germany's DAX was off 178.13 points (-1.58%), closing in on a 20% decline for the year. Other European stock indices were down between one and one-and-a-half percent.
As markets opened in the Western Hemisphere, the selling accelerated, sending the Dow down more than 400 points at the open and other North and South American indices falling sharply. By the end of the day, it was absolute carnage, a veritable sea of red. Every equity index on Yahoo's Major World Indices page was lower, save Malaysia's KLCI, which managed a 4-point, 0.25% gain.
Seriously, though, today's crash began in the fall of 2008, when stocks were wiped out in the face of the Lehman Brothers collapse and the sub-prime housing crisis, and also had roots from April 9, 2009, when stocks finally bottomed out as the FASB loosened accounting rules, issuing an official update to rule 157, allowing companies to deviate from standard mark-to-market principles in valuing assets.
The Fed and its central bank cohorts had their dirty little fingers in the dikes as well, conjuring up trillions of dollars in liquidity, effectively bailing out financial institutions that were, essentially, bankrupt. That's what brought us here today, ten years and trillions of dollars later. The everything bubble has finally popped.
This is a rolling crash, not a hard one, like on Black Tuesday in 1929. There have been - in just the past eight trading days - losses on the Dow of 201, 602, 100, 206, 395 points and today's 552. There were gains of 201 and 124 points on Thursday and Friday of last week, but the cumulative effect comes to a loss of 1731 points since November 8, roughly a seven percent dribble.
Tuesday's losses sent the S&P 500 hurtling toward correction territory. From the close of 2,930.75 on September 20 to today's finish at 2,641.89 is a 9.86% loss. For those in the rounding up-or-down crowd, that's 10 percent, or, close enough for horseshoes or hand grenades.
For those keeping score, the Dow is down 8.81% from it's closing high on October 3 (26,828.39). The NASDAQ, which has been in and out and back into correction since October 24, is still up on the year... a whopping five points and change. The index is down 14.82% since August 29. Albeit marginally, the Dow Industrials, S&P, NYSE Composite and the Dow Transports are all lower for the year.
The NYSE Composite which peaked at 13,637.02 on January 26 and never regained that height, is down 11.61%, reaching down to correction levels today, though, like the NASDAQ, it had breached the 10% down level on October 24 and since recovered.
Lastly, the Dow Jones Industrial Average finished today with a loss of 321.52 (-3.05%), at 10,212.94. That's an 11.74% drop from the all-time high close of 11,570.84, September 14.
In the commodity space, oil was crushed again today, as WTI crude futures ended at 53.22, down $3.98 per barrel (-6.94%). According to oilprice.com, that's the lowest price since mid-October of 2017.
Where do stocks go from here? That question almost answers itself.
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 |
At the Close, Tuesday, November 20, 2018:
Dow Jones Industrial Average: 24,465.64, -551.80 (-2.21%)
NASDAQ: 6,908.82, -119.65 (-1.70%)
S&P 500: 2,641.89, -48.84 (-1.82%)
NYSE Composite: 12,054.17, -226.74 (-1.85%)
Monday, November 19, 2018
Another Blue Monday As Stocks Slammed Hard All Day; Techs Lead Losers
Whew!
This is becoming serious. Last week, when stock traders had a day off for observance of Veterans Day, the week opened with a 600-point loss. Today, the start of a new week, sees stocks tank to the tune of nearly 400 points.
It's not just the start of the week that's been bad of late, it's a recurring trend for the Dow and NASDAQ to slide by triple digits over the course of one session. The down days are beginning to add up, suggesting that something bigger is on the immediate horizon, and it's happening at a time which is usually a good one for stocks. November and December are among the better months for stock gains, though that doesn't look to be the case this season (Is it too early to say "Happy Holidays?").
Most of the selling on Monday came early. Shortly after noon in New York, the Dow had already shed more than 60 points. For the remainder of the session the blue chip index bounced around in a 100-point range, as some tepid buying emerged, though there was not wide enough commitment to keep stocks from near the lows of the day.
Faring even worse was the NASDAQ, which lost more than 100 points for the eighth time in the past seven weeks. In for particular harsh treatment are, and have been, tech stocks. It seems as though any company with a CEO under 40 or with any connection to computers or the internet has been targeted for extermination.
Here are some of the more notable Silicon Valley names on the Wall Street hit list:
These stocks were among the leaders during the long run-up from 2016 and prior. Now they are the loss-leaders. Amazon's peak is of interest because that was also the day the NASDAQ finished what looks like a pretty solid double top. It closed on August 29 at 8109.69 and on the 31st at 8109.54. It's been downhill since, the NASDAQ sporting a 13% decline since then.
Nobody knows exactly where this is all going, but, from recent market action, it looks to be headed to a not very nice place.
Dow Jones Industrial Average November Scorecard:
At the Close, Monday, November 19, 2018:
Dow Jones Industrial Average: 25,017.44, -395.78 (-1.56%)
NASDAQ: 7,028.48, -219.40 (-3.03%)
S&P 500: 2,690.73, -45.54 (-1.66%)
NYSE Composite: 12,280.91, -119.37 (-0.96%)
This is becoming serious. Last week, when stock traders had a day off for observance of Veterans Day, the week opened with a 600-point loss. Today, the start of a new week, sees stocks tank to the tune of nearly 400 points.
It's not just the start of the week that's been bad of late, it's a recurring trend for the Dow and NASDAQ to slide by triple digits over the course of one session. The down days are beginning to add up, suggesting that something bigger is on the immediate horizon, and it's happening at a time which is usually a good one for stocks. November and December are among the better months for stock gains, though that doesn't look to be the case this season (Is it too early to say "Happy Holidays?").
Most of the selling on Monday came early. Shortly after noon in New York, the Dow had already shed more than 60 points. For the remainder of the session the blue chip index bounced around in a 100-point range, as some tepid buying emerged, though there was not wide enough commitment to keep stocks from near the lows of the day.
Faring even worse was the NASDAQ, which lost more than 100 points for the eighth time in the past seven weeks. In for particular harsh treatment are, and have been, tech stocks. It seems as though any company with a CEO under 40 or with any connection to computers or the internet has been targeted for extermination.
Here are some of the more notable Silicon Valley names on the Wall Street hit list:
- Facebook: hit a high of 217 in July, closed today at 131.55.
- Alphabet (Google): August 29: 1,249.30; Today: 1,020.00
- Netflix: August 30: 370.98; Today: 270.60
- Apple: September 4: 227.57; Today: 185.86
- Nvidia: September 4: 283.70; Today: 144.70
- Amazon: August 31: 2,012.71; Today: 1,512.29
These stocks were among the leaders during the long run-up from 2016 and prior. Now they are the loss-leaders. Amazon's peak is of interest because that was also the day the NASDAQ finished what looks like a pretty solid double top. It closed on August 29 at 8109.69 and on the 31st at 8109.54. It's been downhill since, the NASDAQ sporting a 13% decline since then.
Nobody knows exactly where this is all going, but, from recent market action, it looks to be headed to a not very nice place.
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 |
At the Close, Monday, November 19, 2018:
Dow Jones Industrial Average: 25,017.44, -395.78 (-1.56%)
NASDAQ: 7,028.48, -219.40 (-3.03%)
S&P 500: 2,690.73, -45.54 (-1.66%)
NYSE Composite: 12,280.91, -119.37 (-0.96%)
Wednesday, November 14, 2018
Stocks Stumble Again, Dow Loses All November Gains; Germany's DAX Tumbling
After a while, one gets the impression that the bottom is going to fall out at some point, the only matter being one of when, and, maybe, by how much.
Stocks trended lower for a fourth straight day, with the Dow plunging by more than 350 points midway through the session, giving up all of its gains for November (some 1075 points). The NASDAQ led in percentage terms, down nine-tenths of a percent, with the S&P giving up early gains as well.
As usual, it could have been worse. The Dow slumped below 25,000 for the first time in two weeks, and while big, round numbers are flashy, the 25,000 level has no particular importance other than acting as a psychological figure.
Consumer prices rose by the most in nine months, as the October CPI came in with a "hot" 0.3% increase, fueling more concern that the Fed will continue raising interest rates at its December meeting, as planned. By now, the December federal funds increase should have been priced in, so, accusing inflation as the culprit de jour is probably a bit off the mark. What's really causing the continuation of the selling is more than likely a move by smart money out of stocks and into bonds or cash equivalents. With a 10-year treasury note offering well beyond three percent interest with no risk, some of the money leaving the market is surely headed that way, though corporate bonds are similarly attractive, albeit with a little more risk premia.
The major indices are still less than 10 percent off their all-time highs, making valuation a true issue. Post midterm elections, it appears that the federal government will be largely dysfunctional for the next two years, blunting any of President Trump's economic initiatives, and Maxine Waters proclamation that banking regulations will be tightened isn't winning any popularity contests on Wall Street. Waters is the chair-in-waiting of the House Financial Services Committee, which oversees banks and other financial institutions.
There's considerable concern over the smooth continuation of government, more even than there has been since the Gore-Bush election selection fiasco of 2000. Taken by any measure, Trump's policies in the first two years of his administration have been business-friendly, and the newly-elected Democrat majority in the House not only threatens to stop any progress that's been made, but actually reverse it by plunging Washington into chaos with investigations and special committees designed to strip the president of his power and possibly lead to impeachment.
Such an unstable environment gives pause to business expansion decisions while also worrying large investors. Thus, stocks are acting as a proxy for politics, which is not their best function, and the results could be devastating if the Democrats don't back down from their overly strident positions.
Given such a climate, is there any wonder stocks cannot gain traction, even with unemployment at historic lows?
Another concern is the state of foreign markets, which remain moribund at best, the DAX, Germany's main stock index has been falling in conjunction with US stocks, and it recently broke a key "neckline" in an obvious head-and-shoulders pattern according to analysts at FXEmpire.com. The German market could enter bear market territory in a matter of weeks, if not days, an important element in gauging world stock performance and a general indicator of economic health in the Eurozone.
These are just a few of the elements pushing hard against investors.
While the Dow is still 1000 points from an official correction, the NASDAQ re-entered the correction zone on Monday and the tech sector - which had been the driver of rallies - threatens to pull the entire stock complex down with it.
Amazon may be celebrating a coup in gaining sweet deals for its new HQ2 in Virginia and New York, but the rest of the tech world is not such a happy place.
Dow Jones Industrial Average November Scorecard:
At the Close, Wednesday, November 14, 2018
Dow Jones Industrial Average: 25,080.50, -205.99 (-0.81%)
NASDAQ: 7,136.39, -64.48 (-0.90%)
S&P 500: 2,701.58, -20.60 (-0.76%)
NYSE Composite: 12,280.73, -47.57 (-0.39%)
Stocks trended lower for a fourth straight day, with the Dow plunging by more than 350 points midway through the session, giving up all of its gains for November (some 1075 points). The NASDAQ led in percentage terms, down nine-tenths of a percent, with the S&P giving up early gains as well.
As usual, it could have been worse. The Dow slumped below 25,000 for the first time in two weeks, and while big, round numbers are flashy, the 25,000 level has no particular importance other than acting as a psychological figure.
Consumer prices rose by the most in nine months, as the October CPI came in with a "hot" 0.3% increase, fueling more concern that the Fed will continue raising interest rates at its December meeting, as planned. By now, the December federal funds increase should have been priced in, so, accusing inflation as the culprit de jour is probably a bit off the mark. What's really causing the continuation of the selling is more than likely a move by smart money out of stocks and into bonds or cash equivalents. With a 10-year treasury note offering well beyond three percent interest with no risk, some of the money leaving the market is surely headed that way, though corporate bonds are similarly attractive, albeit with a little more risk premia.
The major indices are still less than 10 percent off their all-time highs, making valuation a true issue. Post midterm elections, it appears that the federal government will be largely dysfunctional for the next two years, blunting any of President Trump's economic initiatives, and Maxine Waters proclamation that banking regulations will be tightened isn't winning any popularity contests on Wall Street. Waters is the chair-in-waiting of the House Financial Services Committee, which oversees banks and other financial institutions.
There's considerable concern over the smooth continuation of government, more even than there has been since the Gore-Bush election selection fiasco of 2000. Taken by any measure, Trump's policies in the first two years of his administration have been business-friendly, and the newly-elected Democrat majority in the House not only threatens to stop any progress that's been made, but actually reverse it by plunging Washington into chaos with investigations and special committees designed to strip the president of his power and possibly lead to impeachment.
Such an unstable environment gives pause to business expansion decisions while also worrying large investors. Thus, stocks are acting as a proxy for politics, which is not their best function, and the results could be devastating if the Democrats don't back down from their overly strident positions.
Given such a climate, is there any wonder stocks cannot gain traction, even with unemployment at historic lows?
Another concern is the state of foreign markets, which remain moribund at best, the DAX, Germany's main stock index has been falling in conjunction with US stocks, and it recently broke a key "neckline" in an obvious head-and-shoulders pattern according to analysts at FXEmpire.com. The German market could enter bear market territory in a matter of weeks, if not days, an important element in gauging world stock performance and a general indicator of economic health in the Eurozone.
These are just a few of the elements pushing hard against investors.
While the Dow is still 1000 points from an official correction, the NASDAQ re-entered the correction zone on Monday and the tech sector - which had been the driver of rallies - threatens to pull the entire stock complex down with it.
Amazon may be celebrating a coup in gaining sweet deals for its new HQ2 in Virginia and New York, but the rest of the tech world is not such a happy place.
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 |
At the Close, Wednesday, November 14, 2018
Dow Jones Industrial Average: 25,080.50, -205.99 (-0.81%)
NASDAQ: 7,136.39, -64.48 (-0.90%)
S&P 500: 2,701.58, -20.60 (-0.76%)
NYSE Composite: 12,280.73, -47.57 (-0.39%)
Wednesday, October 24, 2018
Ka-Boom, Stocks Crash, Key Support Levels Shattered; NASDAQ Enters Correction
Stocks turned in an ugly performance on Wednesday, unfortunately, it wasn't even as bad as the declines of just two weeks ago, on October 10. Apparently, traders don't like buying stocks on Wednesdays. Either that, or they like selling them on Wednesdays.
In any case the Dow Jones Industrial Average is down nearly 2,250 points in the last three weeks, the NASDAQ posted it's third-worst single day point drop in history and the S&P 500 has closed lower 13 of the last 15 sessions and the last six straight.
For the NASDAQ, the 329-point loss today eclipsed the 315 points shed on October 10. Four of the six, and five of the ten biggest single day point losses on the NASDAQ have occurred this year.
All of this is happening in the face of solid economic data, record low unemployment and moderate inflation. It's also happening in the middle of third quarter earnings reporting season, a time that many analysts had predicted would be challenging, which, at this point, seems an understatement.
The carnage today on Wall Street was unconfined and accelerated into the close, as opposed to yesterday's miracle rally off fresh lows. Well, today's bottoms were deeper and more pronounced than the levels breached on Tuesday, and they are signaling that this is only the beginning of a deeper dive, as the major indices are reaching or already have exceeded a correction of 10 percent.
At today's closing bell, the S&P 500 is down 9.2% from its October 3 all-time high. The NASDAQ is now down 12.4% from the August 29 all-time high of 8109.69. The Dow, which peaked on October 3rd at 26,828.39 is down 8.4%. The NYSE Composite is down 9.6%.
The Dow Jones Transportation Index, which was already off more than 10 percent, lost another 330 points today and is down 14.4% from its all-time high of 11,570.84 from September 14.
All of the majors have breached their 200-day moving averages, indicating that these losses are not technical, but more of a fundamental nature. Earnings reports thus far have been moderate, though there have been some notable misses, and more than a handful of companies have warned that the next few quarters may not meet expectations. That is exactly the kind of talk that scares bulls into hiding and encourages the bears, who have now taken control of market dynamics.
This is how record-long bull markets end, at the culmination of monstrous credit creation, with loud thuds and days and days of interminable, deep losses.
Dow Jones Industrial Average October Scorecard:
At the Close, Wednesday, October 24, 2018:
Dow Jones Industrial Average: 24,583.42, -608.01 (-2.41%)
NASDAQ: 7,108.40, -329.14 (-4.43%)
S&P 500: 2,656.10, -84.59 (-3.09%)
NYSE Composite: 11,971.91, -315.53 (-2.57%)
In any case the Dow Jones Industrial Average is down nearly 2,250 points in the last three weeks, the NASDAQ posted it's third-worst single day point drop in history and the S&P 500 has closed lower 13 of the last 15 sessions and the last six straight.
For the NASDAQ, the 329-point loss today eclipsed the 315 points shed on October 10. Four of the six, and five of the ten biggest single day point losses on the NASDAQ have occurred this year.
All of this is happening in the face of solid economic data, record low unemployment and moderate inflation. It's also happening in the middle of third quarter earnings reporting season, a time that many analysts had predicted would be challenging, which, at this point, seems an understatement.
The carnage today on Wall Street was unconfined and accelerated into the close, as opposed to yesterday's miracle rally off fresh lows. Well, today's bottoms were deeper and more pronounced than the levels breached on Tuesday, and they are signaling that this is only the beginning of a deeper dive, as the major indices are reaching or already have exceeded a correction of 10 percent.
At today's closing bell, the S&P 500 is down 9.2% from its October 3 all-time high. The NASDAQ is now down 12.4% from the August 29 all-time high of 8109.69. The Dow, which peaked on October 3rd at 26,828.39 is down 8.4%. The NYSE Composite is down 9.6%.
The Dow Jones Transportation Index, which was already off more than 10 percent, lost another 330 points today and is down 14.4% from its all-time high of 11,570.84 from September 14.
All of the majors have breached their 200-day moving averages, indicating that these losses are not technical, but more of a fundamental nature. Earnings reports thus far have been moderate, though there have been some notable misses, and more than a handful of companies have warned that the next few quarters may not meet expectations. That is exactly the kind of talk that scares bulls into hiding and encourages the bears, who have now taken control of market dynamics.
This is how record-long bull markets end, at the culmination of monstrous credit creation, with loud thuds and days and days of interminable, deep losses.
Dow Jones Industrial Average October Scorecard:
| Date | Close | Gain/Loss | Cum. G/L |
| 10/1/18 | 26,651.21 | +192.90 | +192.90 |
| 10/2/18 | 26,773.94 | +122.73 | +315.63 |
| 10/3/18 | 26,828.39 | +54.45 | +370.08 |
| 10/4/18 | 26,627.48 | -200.91 | +169.17 |
| 10/5/18 | 26,447.05 | -180.43 | -11.26 |
| 10/8/18 | 26,486.78 | +39.73 | +28.47 |
| 10/9/18 | 26,430.57 | -56.21 | -27.74 |
| 10/10/18 | 25,598.74 | -831.83 | -859.57 |
| 10/11/18 | 25,052.83 | -545.91 | -1,405.48 |
| 10/12/18 | 25,339.99 | +287.16 | -1,118.32 |
| 10/15/18 | 25,250.55 | -89.44 | -1,207.76 |
| 10/16/18 | 25,798.42 | +547.87 | -659.89 |
| 10/17/18 | 25,706.68 | -91.74 | -751.63 |
| 10/18/18 | 25,379.45 | -327.23 | -1,078.86 |
| 10/19/18 | 25,444.34 | +64.89 | -1,013.97 |
| 10/22/18 | 25,317.41 | -126.93 | -1,140.90 |
| 10/23/18 | 25,191.43 | -125.98 | -1,265.88 |
| 10/24/18 | 24,583.42 | -608.01 | -1,873.89 |
At the Close, Wednesday, October 24, 2018:
Dow Jones Industrial Average: 24,583.42, -608.01 (-2.41%)
NASDAQ: 7,108.40, -329.14 (-4.43%)
S&P 500: 2,656.10, -84.59 (-3.09%)
NYSE Composite: 11,971.91, -315.53 (-2.57%)
Tuesday, October 23, 2018
WARNING: Stocks Tumble Again, Key Levels About To Be Tested; Corporate Bag-Holders
As noted in the most recent WEEKEND WRAP, major US indices have been stretched lower to plumb their 200-day moving averages, with the NYSE Composite already having broken well below its 200-day.
While Monday's declines were not extraordinary, they were - with the obvious defection of the NASDAQ - uniform. Lock-step movement of the majors is usually cause for alarm, either to the upside or down, and, in this case, the S&P, Dow and Composite have been displaying the kind of cascading losses indicative that the move is not contained within a few select sectors, but rather, is broadly-based.
US stocks are not the only issues facing lower pricing. Stock indices around the world have been under severe pressure for most of October, extending back into August and September for most of Europe. Emerging markets, suffering losses most of the year - in the case of China, the decline began in 2015 - show no signs of recovering, their slide relentless and often violent.
Overnight, Hong Kong's Hang Send and Japan's NIKKEI indices were battered, the Hang Sent down, 3.06%, the NIKKEI off 2.67%. China's SSE Composite, already a basket case down more than 50% since 2015, fell another 2.26%.
Early on Tuesday, all European stock markets were lower. As has been the case for the past eight weeks, Germany's DAX was leading the way down.
When markets open in the US on Tuesday, the expectation if for further declines, as futures predict a very rough opening. S&P futures were off by as much as 37 points, NASDAQ futures were down more than 125 points, and Dow futures had fallen by more than 400 points by 8:00 am ET.
The immediate key levels for the major indices are obvious ones, as markets close in on the October 11 interim bottoms. The Dow is looking at its close of 25,051.55 on that date. Any intra-day move below that level would likely trigger even more selling pressure, as once again, Dow Theory rears its head, predicating a primary trend change from bullish to bearish.
Confirmation would come from the Transportation Index, which closed on October 11 at 10,397.23 and Monday at 10,435.76. Monday's loss of just three points on the transports was a shallow shadow of what's been an ugly performance since mid-September. Any close below 10,413 would put the index in correction territory, which was not reported on the October 11 flush.
As the S&P approaches its October 11 low of 2728.37, it is still three to four percentage points above correction (-10%), but the index has been hammered down of late with lower closing prices in 11 of the last 13 trading sessions.
The aforementioned NYSE Composite needs a close of 12,273 to qualify for correction mode. Its high dates all the way back to January 26, when it closed at an all-time high of 13,637.02. The composite is down more than nine percent from the highs and is down 3.6% year-to-date.
NASDAQ watchers will be eyeing the level of 7329.06, the October 11 closing low, after the index reached an all-time high of 8109.54 on August 31. A close of 7298 would be a 10% decline from that level.
Since October is traditionally the most volatile month, companies and investors will be seeking scapegoats and already some corporate types have singled out the threat or imposition of tariffs by President Trump as the primary cause for poor third quarter results.
Some analysts have touted the recent selloff as technical in nature, without important underlying rationale. Taking the case further afield, a recent note by JP Morgan analysts infers that the selling is not only technical in nature, but driven by the lack of corporate stock buybacks, typically halted or blacked out during earnings seasons.
The MarketWatch article which references the analysis is fascinating and full of charts and figures comparing the October breakdown to February's quickly-accelerating descent.
What the analysts fail to point out in their notes is that stocks rose dramatically during second quarter earnings season, from the end of June to near the end of July, putting the lie to their thesis. Stock buybacks have been the main driver of stocks since the aftermath of the 2008-09 crash, and are poised this year to reach a record above $900 billion.
At least, when stocks rebound near the end of the month (as the analysis suggests), we can finally proclaim to know just who those infamous buy the dip punters have been. If indications of a bear market continue to emerge, America's finest corporations, led by the best and brightest managers, will be the ultimate bag-holders, repurchasing their own stock at grossly elevated prices.
Only in America...
Dow Jones Industrial Average October Scorecard:
At the Close, Monday, October 22, 2018:
Dow Jones Industrial Average: 25,317.41, -126.93 (-0.50%)
NASDAQ: 7,468.63, +19.60 (+0.26%)
S&P 500: 2,755.88: -11.90 (-0.43%)
NYSE Composite: 12,374.76, -82.51 (-0.66%)
While Monday's declines were not extraordinary, they were - with the obvious defection of the NASDAQ - uniform. Lock-step movement of the majors is usually cause for alarm, either to the upside or down, and, in this case, the S&P, Dow and Composite have been displaying the kind of cascading losses indicative that the move is not contained within a few select sectors, but rather, is broadly-based.
US stocks are not the only issues facing lower pricing. Stock indices around the world have been under severe pressure for most of October, extending back into August and September for most of Europe. Emerging markets, suffering losses most of the year - in the case of China, the decline began in 2015 - show no signs of recovering, their slide relentless and often violent.
Overnight, Hong Kong's Hang Send and Japan's NIKKEI indices were battered, the Hang Sent down, 3.06%, the NIKKEI off 2.67%. China's SSE Composite, already a basket case down more than 50% since 2015, fell another 2.26%.
Early on Tuesday, all European stock markets were lower. As has been the case for the past eight weeks, Germany's DAX was leading the way down.
When markets open in the US on Tuesday, the expectation if for further declines, as futures predict a very rough opening. S&P futures were off by as much as 37 points, NASDAQ futures were down more than 125 points, and Dow futures had fallen by more than 400 points by 8:00 am ET.
The immediate key levels for the major indices are obvious ones, as markets close in on the October 11 interim bottoms. The Dow is looking at its close of 25,051.55 on that date. Any intra-day move below that level would likely trigger even more selling pressure, as once again, Dow Theory rears its head, predicating a primary trend change from bullish to bearish.
Confirmation would come from the Transportation Index, which closed on October 11 at 10,397.23 and Monday at 10,435.76. Monday's loss of just three points on the transports was a shallow shadow of what's been an ugly performance since mid-September. Any close below 10,413 would put the index in correction territory, which was not reported on the October 11 flush.
As the S&P approaches its October 11 low of 2728.37, it is still three to four percentage points above correction (-10%), but the index has been hammered down of late with lower closing prices in 11 of the last 13 trading sessions.
The aforementioned NYSE Composite needs a close of 12,273 to qualify for correction mode. Its high dates all the way back to January 26, when it closed at an all-time high of 13,637.02. The composite is down more than nine percent from the highs and is down 3.6% year-to-date.
NASDAQ watchers will be eyeing the level of 7329.06, the October 11 closing low, after the index reached an all-time high of 8109.54 on August 31. A close of 7298 would be a 10% decline from that level.
Since October is traditionally the most volatile month, companies and investors will be seeking scapegoats and already some corporate types have singled out the threat or imposition of tariffs by President Trump as the primary cause for poor third quarter results.
Some analysts have touted the recent selloff as technical in nature, without important underlying rationale. Taking the case further afield, a recent note by JP Morgan analysts infers that the selling is not only technical in nature, but driven by the lack of corporate stock buybacks, typically halted or blacked out during earnings seasons.
The MarketWatch article which references the analysis is fascinating and full of charts and figures comparing the October breakdown to February's quickly-accelerating descent.
What the analysts fail to point out in their notes is that stocks rose dramatically during second quarter earnings season, from the end of June to near the end of July, putting the lie to their thesis. Stock buybacks have been the main driver of stocks since the aftermath of the 2008-09 crash, and are poised this year to reach a record above $900 billion.
At least, when stocks rebound near the end of the month (as the analysis suggests), we can finally proclaim to know just who those infamous buy the dip punters have been. If indications of a bear market continue to emerge, America's finest corporations, led by the best and brightest managers, will be the ultimate bag-holders, repurchasing their own stock at grossly elevated prices.
Only in America...
Dow Jones Industrial Average October Scorecard:
| Date | Close | Gain/Loss | Cum. G/L |
| 10/1/18 | 26,651.21 | +192.90 | +192.90 |
| 10/2/18 | 26,773.94 | +122.73 | +315.63 |
| 10/3/18 | 26,828.39 | +54.45 | +370.08 |
| 10/4/18 | 26,627.48 | -200.91 | +169.17 |
| 10/5/18 | 26,447.05 | -180.43 | -11.26 |
| 10/8/18 | 26,486.78 | +39.73 | +28.47 |
| 10/9/18 | 26,430.57 | -56.21 | -27.74 |
| 10/10/18 | 25,598.74 | -831.83 | -859.57 |
| 10/11/18 | 25,052.83 | -545.91 | -1,405.48 |
| 10/12/18 | 25,339.99 | +287.16 | -1,118.32 |
| 10/15/18 | 25,250.55 | -89.44 | -1,207.76 |
| 10/16/18 | 25,798.42 | +547.87 | -659.89 |
| 10/17/18 | 25,706.68 | -91.74 | -751.63 |
| 10/18/18 | 25,379.45 | -327.23 | -1,078.86 |
| 10/19/18 | 25,444.34 | +64.89 | -1,013.97 |
| 10/22/18 | 25,317.41 | -126.93 | -1,140.90 |
At the Close, Monday, October 22, 2018:
Dow Jones Industrial Average: 25,317.41, -126.93 (-0.50%)
NASDAQ: 7,468.63, +19.60 (+0.26%)
S&P 500: 2,755.88: -11.90 (-0.43%)
NYSE Composite: 12,374.76, -82.51 (-0.66%)
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