As they've done after the occasion of every recent FOMC meeting, traders sold off on the news, though today's slide was exacerbated at least a little by angst over the ongoing stalemate in Washington over fiscal cliff issues.
John Boehner, Speaker of the House, went before the microphones this morning, followed by Senate leader Harry Reid, and the two of them managed to give Wall Street a dose of temporary depression, sending stocks lower throughout the session.
The major indices slid into the final hour, but rebounded off their lows of the day when news leaked that President Obama and Boehner were to meet at the White House late this afternoon. While it will probably amount to nothing, as have their previous talks, the markets viewed it as slightly positive.
Traders are still mulling over yesterday's FOMC announcement, in which Chairman Bernanke tied raising interest rates to the unemployment rate and inflation. It's something of a crude cobbling of numbers that may or may not make sense, but, in the best counterintuitive spirit, lower unemployment and a recovering economy wiht low inflation (all good) would probably send stocks screeching into the abyss because interest rates would be on the rise.
Whatever the case and however it eventually plays out, it's a scenario unlikely to arrive any time soon, probably not for at least another 12 months, but it still has investors somewhat spooked.
Some good news for the economy came in the form of lower initial unemployment claims dropped to 343K in the most recent reporting period, on expectations of 375K. Retial sales, however, were a little disappointing, up just 0.3% in November, though that was better than the -0.3% from October.
The PPI was downright deflationary, posting a decline of 0.8% in November. Tomorrow's CPI reading will give an indication of price pressure or the lack thereof at the consumer level.
Dow 13,170.72, -74.73 (0.56%)
NASDAQ 2,992.16, -21.65 (0.72%)
S&P 500 1,419.45, -9.03 (0.63%)
NYSE Composite 8,338.62, -42.26 (0.50%)
NASDAQ Volume 1,800,313,250
NYSE Volume 3,299,683,250
Combined NYSE & NASDAQ Advance - Decline: 1847-3671
Combined NYSE & NASDAQ New highs - New lows: 85-58
WTI crude oil: 85.89, -0.88
Gold: 1,696.80, -21.10
Silver: 32.36, -1.427
Showing posts with label President Obama. Show all posts
Showing posts with label President Obama. Show all posts
Thursday, December 13, 2012
Wednesday, December 12, 2012
Bernanke Drops Unemployment Bomb; Markets Get Cranky
After John Boehner chastised President Obama again from the floor of the House of Representatives in the morning, the markets got what they were so eagerly anticipating and pricing in for the last two weeks: Ben Bernanke's unveiling of QE4, the promise by the Federal Reserve to purchase an additional $45 billion in long-dated treasuries each month, commencing with the wind-down of a similar program known as "Operation Twist."
This new monetizing of government debt is in addition to the fed's commitment to continued purchasing agency mortgage-backed securities at a pace of $40 billion per month for the foreseeable future, which translates roughly into "forever, or until the fiat monetary system collapses."
What the market didn't expect was the Fed's statement tying interest rates to the unemployment rate. In the FOMC statement issued shortly after noon and prior to Bernanke's 2:00 pm ET press conference, the Fed announced, "the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored."
With inflation fairly tame and trending toward dis-inflation on the retail level, the Fed has finally embarked upon a robotic-like exit strategy, though with existential caveats and various loopholes and escape clauses.
After digesting the news, stocks were initially bought up, but, during the press conference, began to slip, finally ending the day with no gains.
While on the one hand the Fed is keeping the monetary floodgates wide open, they are anticipating economic recovery, though even the most ardent bulls don't see the official unemployment rate (U3) falling below 6.5% for at least another year. It currently stands at 7.7%, though that figure is largely due to the decline in the labor participation rate.
With baby boomers retiring at an estimated rate of 10,000 per day - many taking the offer of smaller benefits at age 62 - the labor market is in a state of generational flux unlike any seen in modern times, so there's literally no telling when unemployment might fall below the Fed's threshold level, if at all.
One thing's for certain: if the economy suddenly finds its legs and springs into a real recovery with job creation and rising GDP, Wall Street will be offended because the free money spigots will be turned off or borrowing costs will be significantly increased.
It's a double-edged sword of competitiveness vs. financial repression being played by Wall Street bankers against the population at large. Higher interest rates would tamp down rampant speculation and reverse the galloping higher market trends. In fact, the mere hint from the Fed that interest rates might rise already has seen some effect.
Withe the final Fed meeting of the year out of the way, all eyes will be on the Speaker and the President as they race against time to find a solution to their wide differences to solving the fiscal mess they've created (with ample assistance from Wall Street and the 2008 crash).
Time is running short on the politicians and Wall Street may not be so easily amused over the next few weeks.
Dow 13,245.45, -2.99 (0.02%)
NASDAQ 3,013.81, -8.49 (0.28%)
S&P 500 1,428.48, +0.64 (0.04%)
NYSE Composite 8,380.88, +14.40 (0.17%)
NASDAQ Volume 1,755,775,625
NYSE Volume 3,678,721,000
Combined NYSE & NASDAQ Advance - Decline: 2467-3083
Combined NYSE & NASDAQ New highs - New lows: 204-45
WTI crude oil: 86.77, +0.98
Gold: 1,717.90, +8.30
Silver: 33.78, +0.765
This new monetizing of government debt is in addition to the fed's commitment to continued purchasing agency mortgage-backed securities at a pace of $40 billion per month for the foreseeable future, which translates roughly into "forever, or until the fiat monetary system collapses."
What the market didn't expect was the Fed's statement tying interest rates to the unemployment rate. In the FOMC statement issued shortly after noon and prior to Bernanke's 2:00 pm ET press conference, the Fed announced, "the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored."
With inflation fairly tame and trending toward dis-inflation on the retail level, the Fed has finally embarked upon a robotic-like exit strategy, though with existential caveats and various loopholes and escape clauses.
After digesting the news, stocks were initially bought up, but, during the press conference, began to slip, finally ending the day with no gains.
While on the one hand the Fed is keeping the monetary floodgates wide open, they are anticipating economic recovery, though even the most ardent bulls don't see the official unemployment rate (U3) falling below 6.5% for at least another year. It currently stands at 7.7%, though that figure is largely due to the decline in the labor participation rate.
With baby boomers retiring at an estimated rate of 10,000 per day - many taking the offer of smaller benefits at age 62 - the labor market is in a state of generational flux unlike any seen in modern times, so there's literally no telling when unemployment might fall below the Fed's threshold level, if at all.
One thing's for certain: if the economy suddenly finds its legs and springs into a real recovery with job creation and rising GDP, Wall Street will be offended because the free money spigots will be turned off or borrowing costs will be significantly increased.
It's a double-edged sword of competitiveness vs. financial repression being played by Wall Street bankers against the population at large. Higher interest rates would tamp down rampant speculation and reverse the galloping higher market trends. In fact, the mere hint from the Fed that interest rates might rise already has seen some effect.
Withe the final Fed meeting of the year out of the way, all eyes will be on the Speaker and the President as they race against time to find a solution to their wide differences to solving the fiscal mess they've created (with ample assistance from Wall Street and the 2008 crash).
Time is running short on the politicians and Wall Street may not be so easily amused over the next few weeks.
Dow 13,245.45, -2.99 (0.02%)
NASDAQ 3,013.81, -8.49 (0.28%)
S&P 500 1,428.48, +0.64 (0.04%)
NYSE Composite 8,380.88, +14.40 (0.17%)
NASDAQ Volume 1,755,775,625
NYSE Volume 3,678,721,000
Combined NYSE & NASDAQ Advance - Decline: 2467-3083
Combined NYSE & NASDAQ New highs - New lows: 204-45
WTI crude oil: 86.77, +0.98
Gold: 1,717.90, +8.30
Silver: 33.78, +0.765
Monday, December 10, 2012
Over the Cliff We Go, but Where Is the Fear?
America has finally been dumbed down enough so that the ruling elite can run roughshod over the nation unfettered by neither rule of law or unfortunate facts.
About a month ago, (first person singular here, so pay attention) I made a point (don't know whether or not I made the point in any blog posting or not) that my belief was that a deal on the Bush tax cuts' expiration and other "fiscal cliff" issues had already been cut. Today, I still hold to that belief and even more strongly than before.
Take, for instance, the measured pace of both the Washington politicians and the Wal Street traders. The politicians have done nothing, are no closer to a deal than they were a month ago and don't seem to be in a big hurry to resolve these "pressing" issues.
Wall Street, after a hissy fit bout of selling over "their man" Romney losing the election, have recouped most of the decline and keep gradually pushing stocks higher and higher, apparently oblivious to the threat of the entire nation falling (or being pushed) over said fiscal cliff come January 1, 2013.
The simple reason for believing that the politicians won't make a deal before January 1, 2013, are so obvious as to not even be worth mentioning and that is the exploding federal government deficit and ever-expanding national debt, due to surpass its limits within another month or so.
The government needs money. Let me say that again, with emphasis:
THE GOVERNMENT NEEDS MONEY!
OK, maybe that was a little harsh on the eyes, but there's no doubting the veracity of that statement. And, since the government needs money, and, since the politicians express this nagging sentiment that they are two parties poles apart on ideology and methodology, when in fact they are one and the same party when it comes to self-survival, the best way to get more money is to raise taxes on everybody and blame each other, which, in the long run, means nobody gets blamed, nobody has to worry about torches, pitchforks and being run out of town on a rail, and everybody gets re-elected, eventually.
For Wall Street, it means more money for corporations, which can and do break every law imaginable in pursuit of profit, and largely get away with it. Or, the traders are just ramping up stocks on the backs of their muppet clients, while quietly cashing out and putting their money into tangible assets like gold, silver, real estate, or stashing it away in the Cayman Islands or some other off-shore tax haven.
Think, for a moment. According to recently released statistics, and demonstrated by this article, in August and September, over three times as many foodstamp recipients (over one million) were added to the economy as jobs (324,000). So, where's the recovery? For everybody who gets a low-wage, no-benefit, glorified part-time job, three people apply for and receive food stamps and become a burden on the working class.
Like so many other concepts and programs in these United States, this is unsustainable, yet the media keeps rminding us that all is well, and that we sould go out and buy the latest iWidget or iGadget for Christmas to keep the economy humming along. Really?
Take a look at the S&P Retail Index (^RLX), which, after a double bottom in late October and early November, has headed south again in the first six days of December.
This, my friends, is the Christmas season, the buying season, the make-or-break season for retailers. If everything is so honkey-dorey, then why is this index rolling over, right at the height of what should be its strongest season.
Maybe the market is just being counter-intuitive, but, more likely, the retailers are being slaughtered. Holiday buying is down, as some luxury retailers have recently expressed, like Tiffany and Nordstrom's, and Kohl's, a mainstream retailer, reported horrifying same-store sales last week. Cannibalization. Zombification. Call it what you will, but, if everybody - not just the rich, but, everybody - is going to pay more in taxes next year, because THE GOVERNMENT NEEDS MONEY, how then does the economy look going forward.
Happy Holidays my sweet, firm buns. We're heading over the fiscal cliff by design and the aftermath of crashing billions of dollars below is not going to be very pretty.
I may be completely wrong, but, believe what you like. By all appearances, the deal has already been struck, the politicians are just play-acting, and the deal is that there is no deal. Welcome to the next fork on the road to serfdom.
Am I the only one seeing this for what it is? Where's the fear of the economy rolling over into a recession in the first half of 2013, which the OMB has already expressed would happen were the Bush tax cuts to expire, unemployment benefits be allowed to expire, the reduced take out of Social Security be allowed to expire, and cuts in defense and other programs (the so-called "sequestration") occur all at once?
The congress is set to recess for the holidays on Friday, December 14, four days from now. There simply isn't time enough to craft a substantive deal before then, since nothing at all has been done.
Obama and the Democrats will blame House leader John Boehner and the Republicans, who will blame Obama and the Democrats, and the American people will be left holding the bag, once again, with less in it than before. Tax the rich, tax the poor, tax everybody in between and blame each other. What a plan! Absolutely brilliant!
Market Update at 4:50 pm ET...
Stuck on stupid is about the only way to describe today's market (non)activity. Narrow range (seriously, the Dow was between up 20 and 30 points for almost the entire session) on low volume with the full range of just 55 points was ugly. Totally dead money.
Dow 13,169.88, +14.75 (0.11%)
Nasdaq 2,986.96, +8.92 (0.30%)
S&P 500 1,418.55, +0.48 (0.03%)
NYSE Composite 8,322.68, +8.39(0.10%)
NYSE Volume 2,975,303,000
Nasdaq Volume 1,528,722,750
Combined NYSE & NASDAQ Advance - Decline: 3095-2408
Combined NYSE & NASDAQ New highs - New lows: 139-61
WTI crude oil: 85.56, -0.37
Gold: 1,714.40, +8.90
Silver: 33.38, +0.246
About a month ago, (first person singular here, so pay attention) I made a point (don't know whether or not I made the point in any blog posting or not) that my belief was that a deal on the Bush tax cuts' expiration and other "fiscal cliff" issues had already been cut. Today, I still hold to that belief and even more strongly than before.
Take, for instance, the measured pace of both the Washington politicians and the Wal Street traders. The politicians have done nothing, are no closer to a deal than they were a month ago and don't seem to be in a big hurry to resolve these "pressing" issues.
Wall Street, after a hissy fit bout of selling over "their man" Romney losing the election, have recouped most of the decline and keep gradually pushing stocks higher and higher, apparently oblivious to the threat of the entire nation falling (or being pushed) over said fiscal cliff come January 1, 2013.
The simple reason for believing that the politicians won't make a deal before January 1, 2013, are so obvious as to not even be worth mentioning and that is the exploding federal government deficit and ever-expanding national debt, due to surpass its limits within another month or so.
The government needs money. Let me say that again, with emphasis:
THE GOVERNMENT NEEDS MONEY!
OK, maybe that was a little harsh on the eyes, but there's no doubting the veracity of that statement. And, since the government needs money, and, since the politicians express this nagging sentiment that they are two parties poles apart on ideology and methodology, when in fact they are one and the same party when it comes to self-survival, the best way to get more money is to raise taxes on everybody and blame each other, which, in the long run, means nobody gets blamed, nobody has to worry about torches, pitchforks and being run out of town on a rail, and everybody gets re-elected, eventually.
For Wall Street, it means more money for corporations, which can and do break every law imaginable in pursuit of profit, and largely get away with it. Or, the traders are just ramping up stocks on the backs of their muppet clients, while quietly cashing out and putting their money into tangible assets like gold, silver, real estate, or stashing it away in the Cayman Islands or some other off-shore tax haven.
Think, for a moment. According to recently released statistics, and demonstrated by this article, in August and September, over three times as many foodstamp recipients (over one million) were added to the economy as jobs (324,000). So, where's the recovery? For everybody who gets a low-wage, no-benefit, glorified part-time job, three people apply for and receive food stamps and become a burden on the working class.
Like so many other concepts and programs in these United States, this is unsustainable, yet the media keeps rminding us that all is well, and that we sould go out and buy the latest iWidget or iGadget for Christmas to keep the economy humming along. Really?
Take a look at the S&P Retail Index (^RLX), which, after a double bottom in late October and early November, has headed south again in the first six days of December.
This, my friends, is the Christmas season, the buying season, the make-or-break season for retailers. If everything is so honkey-dorey, then why is this index rolling over, right at the height of what should be its strongest season.
Maybe the market is just being counter-intuitive, but, more likely, the retailers are being slaughtered. Holiday buying is down, as some luxury retailers have recently expressed, like Tiffany and Nordstrom's, and Kohl's, a mainstream retailer, reported horrifying same-store sales last week. Cannibalization. Zombification. Call it what you will, but, if everybody - not just the rich, but, everybody - is going to pay more in taxes next year, because THE GOVERNMENT NEEDS MONEY, how then does the economy look going forward.
Happy Holidays my sweet, firm buns. We're heading over the fiscal cliff by design and the aftermath of crashing billions of dollars below is not going to be very pretty.
I may be completely wrong, but, believe what you like. By all appearances, the deal has already been struck, the politicians are just play-acting, and the deal is that there is no deal. Welcome to the next fork on the road to serfdom.
Am I the only one seeing this for what it is? Where's the fear of the economy rolling over into a recession in the first half of 2013, which the OMB has already expressed would happen were the Bush tax cuts to expire, unemployment benefits be allowed to expire, the reduced take out of Social Security be allowed to expire, and cuts in defense and other programs (the so-called "sequestration") occur all at once?
The congress is set to recess for the holidays on Friday, December 14, four days from now. There simply isn't time enough to craft a substantive deal before then, since nothing at all has been done.
Obama and the Democrats will blame House leader John Boehner and the Republicans, who will blame Obama and the Democrats, and the American people will be left holding the bag, once again, with less in it than before. Tax the rich, tax the poor, tax everybody in between and blame each other. What a plan! Absolutely brilliant!
Market Update at 4:50 pm ET...
Stuck on stupid is about the only way to describe today's market (non)activity. Narrow range (seriously, the Dow was between up 20 and 30 points for almost the entire session) on low volume with the full range of just 55 points was ugly. Totally dead money.
Dow 13,169.88, +14.75 (0.11%)
Nasdaq 2,986.96, +8.92 (0.30%)
S&P 500 1,418.55, +0.48 (0.03%)
NYSE Composite 8,322.68, +8.39(0.10%)
NYSE Volume 2,975,303,000
Nasdaq Volume 1,528,722,750
Combined NYSE & NASDAQ Advance - Decline: 3095-2408
Combined NYSE & NASDAQ New highs - New lows: 139-61
WTI crude oil: 85.56, -0.37
Gold: 1,714.40, +8.90
Silver: 33.38, +0.246
Tuesday, December 4, 2012
Markets Stall as Fiscal Cliff Negotiations Are a Nullity
Talk about tight trading ranges, the major averages barely budged off the flat line today, and, considering the backdrop of the fiscal cliff non-negotiating stances of the warring parties, it's actually quite remarkable.
The NASDAQ was the most volatile of the majors, trading in negative territory the entire session, trading in a narrow band of 22 points. The S&P, top to bottom, moved an entire nine points and change, finishing ever-so-slightly in the red.
By comparison, the Dow's movement was phenomenal, covering an entire 82 points throughout the day. However, after giving up an initial thrust higher of some 53 points, the Dow's trading range from 11:00 am ET until the close was a mere 46 points. Just in case anybody is keeping tack, the Dow crossed over the unchanged line 27 times.
There was no economic data released, but the president did take to the airwaves in his first one-on-one interview since the election, exclusively on Bloomberg (take THAT CNBC!).
Basically reiterating that he would not budge from his position the the Bush tax breaks for the highest two percent earners (making over $250,000 per annum) must be allowed to expire before he and his democratic counterparts would seriously consider any proposal.
That did not inspire any reaction in either direction from the markets. It could be early onset of "cliff fatigue," since the two sides have engaged mostly in verbal sparring and little else. Wall Streeters may be getting a bit worn out, playing the waiting game for the past four weeks.
Without any movement in negotiations, the investment community will look to a crush of economic data releases beginning with the ADP Employment Change index for November, at 8:15 tomorrow, followed in close order by Q3 productivity revision and unit labor costs, factory orders, ISM services and crude oil inventories.
At the least, the ADP figure will give the non-farm payroll junkies a little to chew on until Friday when the BLS makes its monthly estimate of job growth in the nation.
Between now and then, don't look for a quick resolution to the fiscal cliff issues, as both sides appear to take the fight to the very last minute, if not beyond. Most of the politicians are planning on heading home for the holidays on the 14th of December, but, staying in the nation's capitol to iron out an agreement might be preferable to dealing with angry constituents back home, so the chance that congress might delay their holiday by a week is a distinct possibility.
While there are many voices expressing that the politicians will prevent the economy from going "over the cliff" more and more analysts are predicting that neither side sees any gain from negotiating a settlement and appearing weak in the eyes of constituents, especially from the Republican point of view, which is, has been and likely will be, completely intractable.
Things could get interesting at any time, though it appears more and more likely that the politicians will stall, posture and delay, to the ultimate detriment of everyone.
One can hardly blame the president for sticking to his guns on wanting to raise taxes on the rich. It's a no-brainer and long overdue. Besides, he did win re-election largely on the idea that the rich should pay more. How much more is the most cogent question, though the Republicans continue to appear myopic and standing in defense of their campaign contributors, not the people of America.
If the politicians don't come to agreement, blame will fall squarely on the shoulders of the Republican party, primarily the out-of-touch tea partiers in the House.
Dow 12,951.78, -13.82 (0.11%)
NASDAQ 2,996.69, -5.51 (0.18%)
S&P 500 1,407.05, -2.41 (0.17%)
NYSE Composite 8,223.87, +0.33 (0.00%)
NASDAQ Volume 1,746,404,375
NYSE Volume 3,218,542,500
Combined NYSE & NASDAQ Advance - Decline: 2638-2837
Combined NYSE & NASDAQ New highs - New lows: 94-55
WTI crude oil: 88.50, -0.59
Gold: 1,695.80, -25.30
Silver: 32.81, -0.951
The NASDAQ was the most volatile of the majors, trading in negative territory the entire session, trading in a narrow band of 22 points. The S&P, top to bottom, moved an entire nine points and change, finishing ever-so-slightly in the red.
By comparison, the Dow's movement was phenomenal, covering an entire 82 points throughout the day. However, after giving up an initial thrust higher of some 53 points, the Dow's trading range from 11:00 am ET until the close was a mere 46 points. Just in case anybody is keeping tack, the Dow crossed over the unchanged line 27 times.
There was no economic data released, but the president did take to the airwaves in his first one-on-one interview since the election, exclusively on Bloomberg (take THAT CNBC!).
Basically reiterating that he would not budge from his position the the Bush tax breaks for the highest two percent earners (making over $250,000 per annum) must be allowed to expire before he and his democratic counterparts would seriously consider any proposal.
That did not inspire any reaction in either direction from the markets. It could be early onset of "cliff fatigue," since the two sides have engaged mostly in verbal sparring and little else. Wall Streeters may be getting a bit worn out, playing the waiting game for the past four weeks.
Without any movement in negotiations, the investment community will look to a crush of economic data releases beginning with the ADP Employment Change index for November, at 8:15 tomorrow, followed in close order by Q3 productivity revision and unit labor costs, factory orders, ISM services and crude oil inventories.
At the least, the ADP figure will give the non-farm payroll junkies a little to chew on until Friday when the BLS makes its monthly estimate of job growth in the nation.
Between now and then, don't look for a quick resolution to the fiscal cliff issues, as both sides appear to take the fight to the very last minute, if not beyond. Most of the politicians are planning on heading home for the holidays on the 14th of December, but, staying in the nation's capitol to iron out an agreement might be preferable to dealing with angry constituents back home, so the chance that congress might delay their holiday by a week is a distinct possibility.
While there are many voices expressing that the politicians will prevent the economy from going "over the cliff" more and more analysts are predicting that neither side sees any gain from negotiating a settlement and appearing weak in the eyes of constituents, especially from the Republican point of view, which is, has been and likely will be, completely intractable.
Things could get interesting at any time, though it appears more and more likely that the politicians will stall, posture and delay, to the ultimate detriment of everyone.
One can hardly blame the president for sticking to his guns on wanting to raise taxes on the rich. It's a no-brainer and long overdue. Besides, he did win re-election largely on the idea that the rich should pay more. How much more is the most cogent question, though the Republicans continue to appear myopic and standing in defense of their campaign contributors, not the people of America.
If the politicians don't come to agreement, blame will fall squarely on the shoulders of the Republican party, primarily the out-of-touch tea partiers in the House.
Dow 12,951.78, -13.82 (0.11%)
NASDAQ 2,996.69, -5.51 (0.18%)
S&P 500 1,407.05, -2.41 (0.17%)
NYSE Composite 8,223.87, +0.33 (0.00%)
NASDAQ Volume 1,746,404,375
NYSE Volume 3,218,542,500
Combined NYSE & NASDAQ Advance - Decline: 2638-2837
Combined NYSE & NASDAQ New highs - New lows: 94-55
WTI crude oil: 88.50, -0.59
Gold: 1,695.80, -25.30
Silver: 32.81, -0.951
Monday, December 3, 2012
"Cliff" Negotiations Going Nowhere; Wall Street Begins to Get the Message
Anybody who took the time to watch any of the Sunday morning comedy shows, otherwise known as "Meet the Press", "This Week" or "face the Nation could come to no other conclusion than the Democrats and Republicans were still miles apart on solutions to fixing issues pertaining to the "fiscal cliff" that has become the cause celebre in Washington, on Wall Street and just about everywhere else in America.
Alternating between Treasury Secretary Timothy Geithner, House majority leader, John Boehner and a parade of politicians, pundits and philosophers (notably, Grover Norquist), there was widespread agreement on one thing: that there was no middle ground upon which anybody was seen standing. The Democrats and Republicans are so far apart that the idea that there might not be a deal in time for all the Bush tax cuts to expire, sequestration of mandatory budget cuts would take place and the US economy - and with it the world - would fall into recession early in 2013.
It took Wall Street most of the day to figure out that a deal might not be forthcoming by the clowns they purchased in the last election cycle, a thought so pregnant with dire consequences that many in the (cough, cough) investment community might just be in denial on the topic.
By late afternoon, President Obama took his case to the Twitter-world, answering questions from his point of view. A little later, there was a counter-offer from Boehner's office, though it was much like the president's original proposal: having no chance of acceptance and merely a bargaining salvo, testing the waters, so to speak.
By the end of the day, there was some damage done, though it was nothing like what may occur should Wall Street types begin embracing the idea of actually plunging over the "cliff."
Incidentally, the Dow pooped out right at its 200-day moving average, especially in light of the somewhat stunning November ISM index, which drooped into contraction territory with a 49.5 reading, on expectations of 51.2. Naturally, hurricane Sandy was blamed for the bad read, though a number of analysts did not agree with that assessment, believing that Sandy might be responsible for 0.3 to 0.5 of the shortfall, which would still render a reading of 50, at best.
Spain requested a 39.5 billion euro bailout for its ailing banks, but fell short of making an official request for a sovereign bailout. In the best counterintuitive fashion, European stocks rallied and bond yields fell. Talk about denial! The Euros have that market cornered.
As the cliff diving enters a critical phase this week - because the politicians plan on making their escape from DC on the 14th of December, naturally, taking an extra week off on the taxpayer's dime - expect markets to get ever more jittery. Adding to the unusual noise, Friday's non-farm payroll report for November might rattle a few cages as well.
Dow 12,965.60, -59.98 (0.46%)
NASDAQ 3,002.20, -8.04 (0.27%)
S&P 500 1,409.46, -6.72 (0.47%)
NYSE Composite 8,223.54, -36.90 (0.45%)
NASDAQ Volume 1,666,248,500
NYSE Volume 3,060,504,000
Combined NYSE & NASDAQ Advance - Decline: 2307-3205
Combined NYSE & NASDAQ New highs - New lows: 213-44
WTI crude oil: 89.09, +0.18
Gold: 1,721.10, +8.40
Silver: 33.76, +0.48
Alternating between Treasury Secretary Timothy Geithner, House majority leader, John Boehner and a parade of politicians, pundits and philosophers (notably, Grover Norquist), there was widespread agreement on one thing: that there was no middle ground upon which anybody was seen standing. The Democrats and Republicans are so far apart that the idea that there might not be a deal in time for all the Bush tax cuts to expire, sequestration of mandatory budget cuts would take place and the US economy - and with it the world - would fall into recession early in 2013.
It took Wall Street most of the day to figure out that a deal might not be forthcoming by the clowns they purchased in the last election cycle, a thought so pregnant with dire consequences that many in the (cough, cough) investment community might just be in denial on the topic.
By late afternoon, President Obama took his case to the Twitter-world, answering questions from his point of view. A little later, there was a counter-offer from Boehner's office, though it was much like the president's original proposal: having no chance of acceptance and merely a bargaining salvo, testing the waters, so to speak.
By the end of the day, there was some damage done, though it was nothing like what may occur should Wall Street types begin embracing the idea of actually plunging over the "cliff."
Incidentally, the Dow pooped out right at its 200-day moving average, especially in light of the somewhat stunning November ISM index, which drooped into contraction territory with a 49.5 reading, on expectations of 51.2. Naturally, hurricane Sandy was blamed for the bad read, though a number of analysts did not agree with that assessment, believing that Sandy might be responsible for 0.3 to 0.5 of the shortfall, which would still render a reading of 50, at best.
Spain requested a 39.5 billion euro bailout for its ailing banks, but fell short of making an official request for a sovereign bailout. In the best counterintuitive fashion, European stocks rallied and bond yields fell. Talk about denial! The Euros have that market cornered.
As the cliff diving enters a critical phase this week - because the politicians plan on making their escape from DC on the 14th of December, naturally, taking an extra week off on the taxpayer's dime - expect markets to get ever more jittery. Adding to the unusual noise, Friday's non-farm payroll report for November might rattle a few cages as well.
Dow 12,965.60, -59.98 (0.46%)
NASDAQ 3,002.20, -8.04 (0.27%)
S&P 500 1,409.46, -6.72 (0.47%)
NYSE Composite 8,223.54, -36.90 (0.45%)
NASDAQ Volume 1,666,248,500
NYSE Volume 3,060,504,000
Combined NYSE & NASDAQ Advance - Decline: 2307-3205
Combined NYSE & NASDAQ New highs - New lows: 213-44
WTI crude oil: 89.09, +0.18
Gold: 1,721.10, +8.40
Silver: 33.76, +0.48
Monday, November 19, 2012
Washington Goes Home, Wall Street Throws a Party
President Obama is in the Far East on a multi-nation god-will tour. The rest of the politicians in Washington, the congress, have mostly gone back to their districts for a holiday break (that's why we love our "leaders" so much - while we get a four-day weekend, they take the whole week off.
With nobody around to moan and bemoan the national crisis known as the fiscal cliff, Wall Street took the opportunity to buy everything in sight - even before Black Friday, as sentiment has shifted from worrisome to ebullient and a majority of traders think that congress and the president will come to some kind of deal prior to the January 1 deadline.
While such optimism may be well-founded, it also may not be. There's still no deal to speak of, and the politicos won't get to work on one until next Monday at the earliest. One would think that people as smart as those on Wall Street would know better than to trust the words of politicians, especially this current bunch, which has a track record of disagreeing on just about everything, but the bulls took command on Monday and sent stocks soaring into the stratosphere.
It should figure. There are a full five weeks until the next payday, otherwise known as options expiration, on Friday, December 21, and plenty of time for stocks to rise or fall. Also, all the inside money made all the best moves, as stocks went skyward right at the open, locking out the less nimble and less-connected retail investors.
There was more good news on housing, as existing home sales rose 2.1% month-over-month and the homebuilders' index catapulted to levels not seen since the giddy, boom days of 2006.
So, all of a sudden, everything is rosy again. Until it's not, that is, which should be tomorrow or maybe some time next week.
It pays to pay attention to this attention-deficit market, though it may not pay to actually participate in it.
The show continues tomorrow...
Meanwhile, in the basement of the Federal Reserve, is Ben Bernanke quietly printing a gazillion dollars on his HP Officejet 4620 Wireless Multifunction Printer - Wireless Printers (Google Affiliate Ad)?
Dow 12,795.96, +207.65(1.65%)
NASDAQ 2,916.07, +62.94(2.21%)
S&P 500 1,386.89, +27.01(1.99%)
NYSE Composite 8,080.29, +148.74(1.88%)
NASDAQ Volume 1,766,584,880
NYSE Volume 3,335,809,500
Combined NYSE & NASDAQ Advance - Decline: 4681-872
Combined NYSE & NASDAQ New highs - New lows: 75-85
WTI crude oil: 89.28, +2.36
Gold: 1,734.40, +19.70
Silver: 33.19, +0.819
With nobody around to moan and bemoan the national crisis known as the fiscal cliff, Wall Street took the opportunity to buy everything in sight - even before Black Friday, as sentiment has shifted from worrisome to ebullient and a majority of traders think that congress and the president will come to some kind of deal prior to the January 1 deadline.
While such optimism may be well-founded, it also may not be. There's still no deal to speak of, and the politicos won't get to work on one until next Monday at the earliest. One would think that people as smart as those on Wall Street would know better than to trust the words of politicians, especially this current bunch, which has a track record of disagreeing on just about everything, but the bulls took command on Monday and sent stocks soaring into the stratosphere.
It should figure. There are a full five weeks until the next payday, otherwise known as options expiration, on Friday, December 21, and plenty of time for stocks to rise or fall. Also, all the inside money made all the best moves, as stocks went skyward right at the open, locking out the less nimble and less-connected retail investors.
There was more good news on housing, as existing home sales rose 2.1% month-over-month and the homebuilders' index catapulted to levels not seen since the giddy, boom days of 2006.
So, all of a sudden, everything is rosy again. Until it's not, that is, which should be tomorrow or maybe some time next week.
It pays to pay attention to this attention-deficit market, though it may not pay to actually participate in it.
The show continues tomorrow...
Meanwhile, in the basement of the Federal Reserve, is Ben Bernanke quietly printing a gazillion dollars on his HP Officejet 4620 Wireless Multifunction Printer - Wireless Printers (Google Affiliate Ad)?
Dow 12,795.96, +207.65(1.65%)
NASDAQ 2,916.07, +62.94(2.21%)
S&P 500 1,386.89, +27.01(1.99%)
NYSE Composite 8,080.29, +148.74(1.88%)
NASDAQ Volume 1,766,584,880
NYSE Volume 3,335,809,500
Combined NYSE & NASDAQ Advance - Decline: 4681-872
Combined NYSE & NASDAQ New highs - New lows: 75-85
WTI crude oil: 89.28, +2.36
Gold: 1,734.40, +19.70
Silver: 33.19, +0.819
Friday, November 16, 2012
John Boehner Rescues Markets... for Today
Stocks were slip-sliding away again on Friday until Speaker of the House, Republican John Boehner, emerged from a meeting with the president sounding very conciliatory and committed to a deal on the fiscal cliff issues facing the federal government.
Boehner spoke to the press just before noon, as stocks reached their lows of the day. Following his remarks that there was a "framework" in the negotiations - which include fellow Republican Mitch McConnell, Nancy Peolsi and Senate majority leader Harry Reid - stocks took off on a tear, with all the major indices quickly erasing losses and turing positive, where they remained, for the most part, into the close.
The Dow, which had been sporting a loss of 71 points, rallied 120 points in a matter of twenty minutes.
Boehner has a tricky path to navigate, between playing hard ball with Democrats while keeping his fellow Republicans - especially those of the Tea Party denomination - from mutiny and potentially blowing up negotiations, but for today, at least, he played the part of a Wall Street superhero.
A couple of other salient points on which to close out the week:
October industrial production dropped 0.4% and capacity utilization fell from 78.2 to 77.8, a significant decline, suggesting that the economy may not be just limping along, but actually slipping.
The advance-decline line was positive for the first time this week, though new lows were once again ahead of new highs, for the eighth consecutive session, or, for those cynics in our midst, since the re-election of President Obama.
It was a real downer of a week for the bulls, especially being options expiry on Friday, a day usually reserved for back-slapping and rounds of drinks over big scores. There was probably more crying into beers late this afternoon than glad-handing fellow insiders.
That's a wrap, and don't expect much next week, as the market faces a short week with a half-day session on Black Friday, the day after Thanksgiving. Additionally, President Obama will be visiting the Far East during the week, so no meaningful negotiations are likely until his return and after the weekend, leaving the politicians just about four weeks before Christmas to work things out.
Good luck with that.
Dow 12,588.31, +45.93 (0.37%)
NASDAQ 2,853.13, +16.19 (0.57%)
S&P 500 1,359.88, +6.55 (0.48%)
NYSE Composite 7,931.55, +34.67 (0.44%)
NASDAQ Volume 2,191,482,500
NYSE Volume 3,991,566,750
Combined NYSE & NASDAQ Advance - Decline: 3638-1796
Combined NYSE & NASDAQ New highs - New lows: 28-329
WTI crude oil: 86.67, +1.22
Gold: 1,714.70, +0.90
Silver: 32.37, -0.304
Boehner spoke to the press just before noon, as stocks reached their lows of the day. Following his remarks that there was a "framework" in the negotiations - which include fellow Republican Mitch McConnell, Nancy Peolsi and Senate majority leader Harry Reid - stocks took off on a tear, with all the major indices quickly erasing losses and turing positive, where they remained, for the most part, into the close.
The Dow, which had been sporting a loss of 71 points, rallied 120 points in a matter of twenty minutes.
Boehner has a tricky path to navigate, between playing hard ball with Democrats while keeping his fellow Republicans - especially those of the Tea Party denomination - from mutiny and potentially blowing up negotiations, but for today, at least, he played the part of a Wall Street superhero.
A couple of other salient points on which to close out the week:
October industrial production dropped 0.4% and capacity utilization fell from 78.2 to 77.8, a significant decline, suggesting that the economy may not be just limping along, but actually slipping.
The advance-decline line was positive for the first time this week, though new lows were once again ahead of new highs, for the eighth consecutive session, or, for those cynics in our midst, since the re-election of President Obama.
It was a real downer of a week for the bulls, especially being options expiry on Friday, a day usually reserved for back-slapping and rounds of drinks over big scores. There was probably more crying into beers late this afternoon than glad-handing fellow insiders.
That's a wrap, and don't expect much next week, as the market faces a short week with a half-day session on Black Friday, the day after Thanksgiving. Additionally, President Obama will be visiting the Far East during the week, so no meaningful negotiations are likely until his return and after the weekend, leaving the politicians just about four weeks before Christmas to work things out.
Good luck with that.
Dow 12,588.31, +45.93 (0.37%)
NASDAQ 2,853.13, +16.19 (0.57%)
S&P 500 1,359.88, +6.55 (0.48%)
NYSE Composite 7,931.55, +34.67 (0.44%)
NASDAQ Volume 2,191,482,500
NYSE Volume 3,991,566,750
Combined NYSE & NASDAQ Advance - Decline: 3638-1796
Combined NYSE & NASDAQ New highs - New lows: 28-329
WTI crude oil: 86.67, +1.22
Gold: 1,714.70, +0.90
Silver: 32.37, -0.304
Thursday, November 15, 2012
Stocks Stabilize, Still End Lower as More Trouble Looms
After Wednesday's wicked downdraft, cooler heads prevailed in Thursday's trading, keeping losses to a minimum as bargain-hunters swooped in to snatch up some shares of stocks which look to be marked down for a pre-Christmas sale.
Whether or not these so-called "bargains" will turn into winners is anybody's guess, though the real experts in market dynamics see more trouble ahead as Washington tries to come to a deal before January 1 of 2013, when mandatory spending cuts and tax increases are set to take place.
Placing one's hope - and one's money - on politicians in Washington actually accomplishing anything of such importance is akin to betting on a cheap claimer in a stakes race: the odds are very much against it.
As was the case with the battle over raising the debt limit last August, the DC crowd has shown no willingness to compromise on much of anything and the "fiscal cliff" issue is right up drama alley for our clownish elected leaders.
Eventually, the adult in the room seems to be the president, Barack Obama, who must navigate the press and the pressure of dealing with an intractable house of representatives, whose sole mission seems to be to spare the wealthiest two percent of earners any tax increases, even at the peril of the nation.
How this tableau will eventually play out is somewhat predictable. It will be taken out to the last possible moment, and quite possibly beyond. Word is that the legislators have until mid-February to actually come to their senses and a deal if the United States is to avoid an utterly avoidable recession, caused entirely by public policy.
This play has certainly caught Wall Street's attention, as evidenced by the sharp declines over the past month and especially since the election, just over a week ago.
What some market participants fail to realize - or won't say publicly - is that the market may well have already run out of gas, almost all of it supplied by the magnanimous Federal Reserve, whose QE policies have injected trillions into the hands of the banking cartel.
The Dow and S&P made double tops in mid-September and early October, then failed to surpass those highs later in the month, a classic chart pattern signaling a primary trend change and a bearish one, similar to the breakdown in the fall of 2007.
As for the NASDAQ, it didn't even bother to retrace the highs of September, simply capitulating in October and continuing a cascading fall, closing in quickly on the June lows.
If this is the beginning of a bear market, the foolery in Washington will be nothing more than a sideshow. The economy - both here and globally - is in a weakened condition already and may not be able to sustain even a medium shock, much less one that raises taxes and trims budgets, reducing head-count, and thus, overall spending.
Add to that the double-dip recession now official in the Eurozone and growing tensions in the Middle East and the recipe for disaster is laid bare.
Wall Street and its brokerage houses should emblazon their entrances with a warning sign: Beware Falling Stocks.
Today's minor decline could be seen as somewhat remarkable in the face of some disturbing economic events. Initial unemployment claims rose dramatically, from 361K to 439K this week, due partly to the effects of Hurricane Sandy. The Philadelphia Fed manufacturing survey laid an egg as well, posting a reading of negative 10.7 on expectations of a fat zero.
Besides the internal damage done to markets, all of the major indices are now firmly moored below their 200-day moving averages, not a pretty sight until some catalyst comes along to change the dynamic, and none appears to be on the horizon.
The advance-decline line was still severely negative and new lows exceeded new highs for the sixth day in a row.
All signs point to further weakness, though a technical bounce could send stocks up briefly, but the holiday season, thus far, isn't shaping up to be a very jolly time.
Dow 12,542.38, -28.57 (0.23%)
NASDAQ 2,836.94, -9.87 (0.35%)
S&P 500 1,353.32, -2.17 (0.16%)
NYSE Composite 7,896.87, -6.56 (0.08%)
NASDAQ Volume 1,975,168,625
NYSE Volume 3,892,497,250
Combined NYSE & NASDAQ Advance - Decline: 1954-3591
Combined NYSE & NASDAQ New highs - New lows: 25-456 (this is extreme!)
WTI crude oil: 85.45, -0.87
Gold: 1,713.80, -16.30
Silver: 32.67, -0.206
Whether or not these so-called "bargains" will turn into winners is anybody's guess, though the real experts in market dynamics see more trouble ahead as Washington tries to come to a deal before January 1 of 2013, when mandatory spending cuts and tax increases are set to take place.
Placing one's hope - and one's money - on politicians in Washington actually accomplishing anything of such importance is akin to betting on a cheap claimer in a stakes race: the odds are very much against it.
As was the case with the battle over raising the debt limit last August, the DC crowd has shown no willingness to compromise on much of anything and the "fiscal cliff" issue is right up drama alley for our clownish elected leaders.
Eventually, the adult in the room seems to be the president, Barack Obama, who must navigate the press and the pressure of dealing with an intractable house of representatives, whose sole mission seems to be to spare the wealthiest two percent of earners any tax increases, even at the peril of the nation.
How this tableau will eventually play out is somewhat predictable. It will be taken out to the last possible moment, and quite possibly beyond. Word is that the legislators have until mid-February to actually come to their senses and a deal if the United States is to avoid an utterly avoidable recession, caused entirely by public policy.
This play has certainly caught Wall Street's attention, as evidenced by the sharp declines over the past month and especially since the election, just over a week ago.
What some market participants fail to realize - or won't say publicly - is that the market may well have already run out of gas, almost all of it supplied by the magnanimous Federal Reserve, whose QE policies have injected trillions into the hands of the banking cartel.
The Dow and S&P made double tops in mid-September and early October, then failed to surpass those highs later in the month, a classic chart pattern signaling a primary trend change and a bearish one, similar to the breakdown in the fall of 2007.
As for the NASDAQ, it didn't even bother to retrace the highs of September, simply capitulating in October and continuing a cascading fall, closing in quickly on the June lows.
If this is the beginning of a bear market, the foolery in Washington will be nothing more than a sideshow. The economy - both here and globally - is in a weakened condition already and may not be able to sustain even a medium shock, much less one that raises taxes and trims budgets, reducing head-count, and thus, overall spending.
Add to that the double-dip recession now official in the Eurozone and growing tensions in the Middle East and the recipe for disaster is laid bare.
Wall Street and its brokerage houses should emblazon their entrances with a warning sign: Beware Falling Stocks.
Today's minor decline could be seen as somewhat remarkable in the face of some disturbing economic events. Initial unemployment claims rose dramatically, from 361K to 439K this week, due partly to the effects of Hurricane Sandy. The Philadelphia Fed manufacturing survey laid an egg as well, posting a reading of negative 10.7 on expectations of a fat zero.
Besides the internal damage done to markets, all of the major indices are now firmly moored below their 200-day moving averages, not a pretty sight until some catalyst comes along to change the dynamic, and none appears to be on the horizon.
The advance-decline line was still severely negative and new lows exceeded new highs for the sixth day in a row.
All signs point to further weakness, though a technical bounce could send stocks up briefly, but the holiday season, thus far, isn't shaping up to be a very jolly time.
Dow 12,542.38, -28.57 (0.23%)
NASDAQ 2,836.94, -9.87 (0.35%)
S&P 500 1,353.32, -2.17 (0.16%)
NYSE Composite 7,896.87, -6.56 (0.08%)
NASDAQ Volume 1,975,168,625
NYSE Volume 3,892,497,250
Combined NYSE & NASDAQ Advance - Decline: 1954-3591
Combined NYSE & NASDAQ New highs - New lows: 25-456 (this is extreme!)
WTI crude oil: 85.45, -0.87
Gold: 1,713.80, -16.30
Silver: 32.67, -0.206
Wednesday, November 14, 2012
Stocks Take Another Beating; Dow Off 185, NASDAQ in Correction
All the issues and problems facing the US and global economies are coming home to roost in a perfect storm of excessive debt, fiscal intransigence, monetary experimentation, overpriced equities, general distrust of leadership, lack of growth, geopolitical tension and poor earnings prospects for corporations.
The selloff today was a continuation of what's been occurring since before the election, but has accelerated dramatically since. Wall Street is quite unhappy with prospects that President Obama will not budge from his position to eliminate the Bush tax cuts on the wealthiest two percent of Americans, as emphatically spelled out in an early afternoon press conference.
The president was cool, calm and collected, fielding questions on a variety of topics, but, even though he mentioned compromise frequently, he did not waver in his commitment to tax the wealthy at more than their current rates, including gains on investments, particularly - Wall Street fears - regular income and dividends.
Taking their cue from the president's message, stocks, which opened briefly higher, but quickly fell deep into the red, made new lows nearing the end of his remarks and continued lower into the close, the Dow suffering a 185-point loss and the NASDAQ reaching levels 10% below their recent highs, crashing into correction territory.
With all of the major indices, including even the Russell 2000 of mostly small cap stocks, continuing their descent below their respective 200-day moving averages, bottoms were sought out, though none could be found.
The massive run-up which began in March of 2009 is being unwound, with most of the blame being laid upon the politicians in Washington, DC, though there are more than a few more scapegoats, notably the greed and feed crowd that started the entire mess - the irresponsible banking community and their masters of control, the Federal Reserve.
With the dual policies of ZIRP and massive monetization, the Fed enabled much of Wall Street's excess and continues to do so even today. The neo-Keynesian policies of Ben Bernanke and his predecessor, Alan Greenspan, has spawned a debt bubble deflation crisis that they cannot - as much as they try - spend their way out of.
Most individual investors have been fleeing the market or have already taken their seats on the sidelines, so the damage being done to stocks is going to impact the middle and upper classes the most, with 401k, investment and pension plans taking the brunt of the declines.
In particular, Dow stocks, seen by many as representing the core of American industrialism, have lost more than 1100 points since their highs in early October, erasing most of the gains made throughout the year.
While Washington politicians dither over negotiations to avoid massive tax increases and huge budget cuts (which some say are needed), investors are worried that whatever solution they arrive at will be too little, too late and more of a can-kicking exercise than real reform.
With the holidays fast approaching, Americans are not in a mood for more business as usual from either Wall Street or Washington, and the anger is growing, even on Main Street, where small businesses continue to suffer or skirt taxation completely.
The next few days and weeks could easily turn into a crisis more severe than that of 2008, since none of the improprieties produced by that financial peer into the abyss have yet to be resolved, and now there are fewer measures the Fed or the Treasury can employ to keep the economy afloat.
If anyone thought that the crisis in America was over - to say nothing of the even worse conditions in Europe - they should pay close attention to what happens over the next sixty to ninety days, because they will surely be replete with wild market swings, irony and recriminations from all sides against each other.
Surviving into and beyond 2013 will be a major test of not only the American spirit but of Americans' willingness to accept leadership. President Obama's election to a second term was probably the correct choice, but he alone cannot fix the mess others created.
After today, the bankers and the wizard genii of Wall Street should be running for cover they should have sought out years ago.
Today was a truly dark day, though, from the looks of things, there are many more to come.
Grow some crops if you can, stay close to home and loved ones, and remember our motto: FREE HOUSES FOR EVERYONE!
Dow 12,570.95, -185.23 (1.45%)
NASDAQ 2,846.81, -37.08 (1.29%)
S&P 500 1,355.49, -19.04 (1.39%)
NYSE Composite 7,903.42, -119.81 (1.49%)
NASDAQ Volume 2,103,531,000
NYSE Volume 4,062,878,250
Combined NYSE & NASDAQ Advance - Decline: 822-4741
Combined NYSE & NASDAQ New highs - New lows: 39-333 (WoW!)
WTI crude oil: 86.32, +0.94
Gold: 1,730.10, +5.30
Silver: 32.88, +0.393
The selloff today was a continuation of what's been occurring since before the election, but has accelerated dramatically since. Wall Street is quite unhappy with prospects that President Obama will not budge from his position to eliminate the Bush tax cuts on the wealthiest two percent of Americans, as emphatically spelled out in an early afternoon press conference.
The president was cool, calm and collected, fielding questions on a variety of topics, but, even though he mentioned compromise frequently, he did not waver in his commitment to tax the wealthy at more than their current rates, including gains on investments, particularly - Wall Street fears - regular income and dividends.
Taking their cue from the president's message, stocks, which opened briefly higher, but quickly fell deep into the red, made new lows nearing the end of his remarks and continued lower into the close, the Dow suffering a 185-point loss and the NASDAQ reaching levels 10% below their recent highs, crashing into correction territory.
With all of the major indices, including even the Russell 2000 of mostly small cap stocks, continuing their descent below their respective 200-day moving averages, bottoms were sought out, though none could be found.
The massive run-up which began in March of 2009 is being unwound, with most of the blame being laid upon the politicians in Washington, DC, though there are more than a few more scapegoats, notably the greed and feed crowd that started the entire mess - the irresponsible banking community and their masters of control, the Federal Reserve.
With the dual policies of ZIRP and massive monetization, the Fed enabled much of Wall Street's excess and continues to do so even today. The neo-Keynesian policies of Ben Bernanke and his predecessor, Alan Greenspan, has spawned a debt bubble deflation crisis that they cannot - as much as they try - spend their way out of.
Most individual investors have been fleeing the market or have already taken their seats on the sidelines, so the damage being done to stocks is going to impact the middle and upper classes the most, with 401k, investment and pension plans taking the brunt of the declines.
In particular, Dow stocks, seen by many as representing the core of American industrialism, have lost more than 1100 points since their highs in early October, erasing most of the gains made throughout the year.
While Washington politicians dither over negotiations to avoid massive tax increases and huge budget cuts (which some say are needed), investors are worried that whatever solution they arrive at will be too little, too late and more of a can-kicking exercise than real reform.
With the holidays fast approaching, Americans are not in a mood for more business as usual from either Wall Street or Washington, and the anger is growing, even on Main Street, where small businesses continue to suffer or skirt taxation completely.
The next few days and weeks could easily turn into a crisis more severe than that of 2008, since none of the improprieties produced by that financial peer into the abyss have yet to be resolved, and now there are fewer measures the Fed or the Treasury can employ to keep the economy afloat.
If anyone thought that the crisis in America was over - to say nothing of the even worse conditions in Europe - they should pay close attention to what happens over the next sixty to ninety days, because they will surely be replete with wild market swings, irony and recriminations from all sides against each other.
Surviving into and beyond 2013 will be a major test of not only the American spirit but of Americans' willingness to accept leadership. President Obama's election to a second term was probably the correct choice, but he alone cannot fix the mess others created.
After today, the bankers and the wizard genii of Wall Street should be running for cover they should have sought out years ago.
Today was a truly dark day, though, from the looks of things, there are many more to come.
Grow some crops if you can, stay close to home and loved ones, and remember our motto: FREE HOUSES FOR EVERYONE!
Dow 12,570.95, -185.23 (1.45%)
NASDAQ 2,846.81, -37.08 (1.29%)
S&P 500 1,355.49, -19.04 (1.39%)
NYSE Composite 7,903.42, -119.81 (1.49%)
NASDAQ Volume 2,103,531,000
NYSE Volume 4,062,878,250
Combined NYSE & NASDAQ Advance - Decline: 822-4741
Combined NYSE & NASDAQ New highs - New lows: 39-333 (WoW!)
WTI crude oil: 86.32, +0.94
Gold: 1,730.10, +5.30
Silver: 32.88, +0.393
Friday, November 9, 2012
Wall Street Peers Over Fiscal Cliff, Likes the View, Maybe
Only in the Wall Street casino can such madness prevail.
When the S&P 500 index closes almost exactly on its 200-day moving average on a day in which it was down, then up sharply, then down, then up again and finally closing almost where it started, one has a sense of the level of manipulation designed to produce the maximum level of uncertainty.
It's working.
The day started with stocks down sharply, but slowly advancing in anticipation of Rep. John Boehner's brief news conference shortly after 11:00 am ET, during which it sold off slightly before rising - after his very abrupt departure - to what would turn out to be the highs of the day, up 78 points on the Dow, just before President Obama made prepared remarks at 1:07 pm. During and just after the president's appearance, the Dow lost all of its gains and fell briefly into negative territory, a move of 103 points in just under an hour.
Stocks spent the rest of the afternoon folling along the line of unchange, with a couple of sharp rises just to keep things interesting.
Naturally, the final hour turned into a circus microcosm of the day, with the Dow up, down, up, down and eventually closing with a gain of four points.
So much for resolution.
The dueling parties in Washington preened and postured for the cameras and microphones while the wise guys in New York pushed buy and sell buttons with just enough pressure to keep markets in suspended animation for the full session, miraculously ending with gains of less than 10 points on all exchanges (four or less excluding the NASDAQ).
It was politico-socio-psycho-econo theater at its best.
There's surely more to come from the recently-re-anointed crowd in Washington and the usual suspects in New York as we end our way through the final seven weeks of 2012.
While the news and financial networks scramble and flail about trying to explain the undesirable effects of falling over the "fiscal cliff," though Wall Streeters seem perfectly at ease tip-toeing along the precipice. One gets the distinct feeling that the deal has already been struck and the rest is just for show.
How to trade it? Well, one can take the virtuous route and ignore it all, or play along with the pros and prepare to be beaten by their wickedly swift HFT algos which scan and skim every trade.
Bottom line is that there is no actual bottom line, so long as Ben Bernanke sits quietly in the background, his finger poised to punch up another couple hundred billion dollars as needed, along with his counterpart, Mario Draghi, in Europe.
Did somebody mention Europe? That place where equally nothing matters? Yes, they're still out there, kicking their own can further down the road to perdition.
With the elections in the US over and done with, it's back to business as usual, wherein neither the politicians nor the bankers can lose.
For all you poker fans, the market did leave a couple of "tells." Gold and silver notched nice gains again, and, for the third day in a row, new lows slaughtered new highs, 231-76.
That's a pretty fat slice of salami laying out there, Wall Street. Some of us actually notice... and our appetite is good.
Dow 12,815.39, +4.07(0.03%)
NASDAQ 2,904.87, +9.29(0.32%)
S&P 500 1,379.85, +2.34(0.17%)
NYSE Composite 8,053.56, +2.74(0.03%)
NASDAQ Volume 1,802,865,630
NYSE Volume 3,572,545.750
Combined NYSE & NASDAQ Advance - Decline: 2707-2778
Combined NYSE & NASDAQ New highs - New lows: 76-231
WTI crude oil: 86.07, +0.98
Gold: 1,730.90, +4.90
Silver: 32.60, +0.359
When the S&P 500 index closes almost exactly on its 200-day moving average on a day in which it was down, then up sharply, then down, then up again and finally closing almost where it started, one has a sense of the level of manipulation designed to produce the maximum level of uncertainty.
It's working.
The day started with stocks down sharply, but slowly advancing in anticipation of Rep. John Boehner's brief news conference shortly after 11:00 am ET, during which it sold off slightly before rising - after his very abrupt departure - to what would turn out to be the highs of the day, up 78 points on the Dow, just before President Obama made prepared remarks at 1:07 pm. During and just after the president's appearance, the Dow lost all of its gains and fell briefly into negative territory, a move of 103 points in just under an hour.
Stocks spent the rest of the afternoon folling along the line of unchange, with a couple of sharp rises just to keep things interesting.
Naturally, the final hour turned into a circus microcosm of the day, with the Dow up, down, up, down and eventually closing with a gain of four points.
So much for resolution.
The dueling parties in Washington preened and postured for the cameras and microphones while the wise guys in New York pushed buy and sell buttons with just enough pressure to keep markets in suspended animation for the full session, miraculously ending with gains of less than 10 points on all exchanges (four or less excluding the NASDAQ).
It was politico-socio-psycho-econo theater at its best.
There's surely more to come from the recently-re-anointed crowd in Washington and the usual suspects in New York as we end our way through the final seven weeks of 2012.
While the news and financial networks scramble and flail about trying to explain the undesirable effects of falling over the "fiscal cliff," though Wall Streeters seem perfectly at ease tip-toeing along the precipice. One gets the distinct feeling that the deal has already been struck and the rest is just for show.
How to trade it? Well, one can take the virtuous route and ignore it all, or play along with the pros and prepare to be beaten by their wickedly swift HFT algos which scan and skim every trade.
Bottom line is that there is no actual bottom line, so long as Ben Bernanke sits quietly in the background, his finger poised to punch up another couple hundred billion dollars as needed, along with his counterpart, Mario Draghi, in Europe.
Did somebody mention Europe? That place where equally nothing matters? Yes, they're still out there, kicking their own can further down the road to perdition.
With the elections in the US over and done with, it's back to business as usual, wherein neither the politicians nor the bankers can lose.
For all you poker fans, the market did leave a couple of "tells." Gold and silver notched nice gains again, and, for the third day in a row, new lows slaughtered new highs, 231-76.
That's a pretty fat slice of salami laying out there, Wall Street. Some of us actually notice... and our appetite is good.
Dow 12,815.39, +4.07(0.03%)
NASDAQ 2,904.87, +9.29(0.32%)
S&P 500 1,379.85, +2.34(0.17%)
NYSE Composite 8,053.56, +2.74(0.03%)
NASDAQ Volume 1,802,865,630
NYSE Volume 3,572,545.750
Combined NYSE & NASDAQ Advance - Decline: 2707-2778
Combined NYSE & NASDAQ New highs - New lows: 76-231
WTI crude oil: 86.07, +0.98
Gold: 1,730.90, +4.90
Silver: 32.60, +0.359
Wednesday, November 7, 2012
Obama Wins; Stock Market Sinks on Tax Hike, Fiscal Cliff Fears, Europe
Tuesday was an early night in terms of presidential politics as President Barack Obama was elected overwhelmingly to a second term, whipping Republican challenger in almost every battleground state and winning the popular vote handily.
With the vote in Florida still being tallied (anybody surprised?), the Sunshine State turned out to be mostly inconsequential as the president swept the key states of Virginia, Ohio, Wisconsin, Iowa, Pennsylvania (which never really was in play), New Hampshire, Colorado and Nevada. Romney's sole win in the so-called "swing states" was in North Carolina, a state which Obama took by a narrow 0.3% in 2008.
Once the midwest states of Wisconsin, Iowa and Ohio were declared for Obama, the race was over, but it wasn't until after midnight in the East that Mitt Romney gave his concession speech and later, President Obama gave a ripping, rhetorical speech extolling the virtues of freedom of choice, tolerance and working together toward shared goals and the great creation of our founders, the United States of America, individual states bound together by social compact.
In the House and Senate races, the makeup of congress remained largely the same, with Republicans dominating the House and Democrats strengthening their grip on the senate, winning key races in Virginia, Florida, and, especially, Massachusetts, where Elizabeth Warren, the fiery consumer rights advocate, took the seat away from Republican incumbent Scott Brown, in a major setback for big banks.
Warren, who worked on TARP and other reforms in Washington, especially the implementation of a consumer protection division at the Federal Reserve, will likely end up on the Senate banking Committee, possibly winning the chairmanship.
Another critical Senate race was won in Connecticut by Christopher Murphy, who defeated Linda McMahon, who wrestling millionaire who spent $100 million on her own campaign.
Jon Tester retained his Senate seat from Montana in a close race with Republican challenger Denny Rehberg, keeping the balance of power firmly in their control with 55 seats, along with one independent, Bernie Sanders of Vermont. The Democrats likely gained another ally when former governor, independent Angus King of Maine, won an open Senate seat that had been held by Republican Olympia Snowe. King has not indicated which party he would caucus with, though most believe it will be with Democrats. King won on the simple idea of making filibusters less of an effective measure in killing legislation, believing that excessive filibustering by Senate Republicans had blocked almost all significant legislation over the past four years.
There was little change in the House, as Reublicans retained control with 232 seats to 191 held by Democrats with a number of vacancies.
It wasn't long before other voices began to be heard, especially those on Wall Street who had been counting on a win by Republican Romney. Before the market opened, futures began a steep decline, though the catalyst may have nad more to do with comments by ECB president Mario Draghi and some dismal production figures from Germany, regarded as a stronghold in the recession-plagued continent.
Shortly after Germany's industrial production was reported to have fallen 1.2% in September, Draghi said that the crisis in Europe was beginning to take its toll on the industrial powerhouse that is the German economy.
Heading into the first post-election session, Dow futures were pointing toward a loss of more than 100 points at the open, and the result was worse, with the 132-point gain from Tuesday wiped out in the opening minute.
Stocks continued their descent until bottoming out just before noon, down 369 points, the biggest decline of the year, though some strengthening took all of the indices off their lows as the day progressed.
Still, the losses were dramatic and especially in the banking sector, where ank of America (BAC), Goldman Sachs (GS), JP Morgan Chase (JPM) and other big bank concerns were off more than five percent. All 10 S&P sectors finished in the red, the S&P could not defend the 1400 level and nearly bounced off its 200-day moving averages, the NASDAQ - aided by Apple's continued decline into bear market territory - broke down below its 200-DMA and the Dow closed below its 200-DMA for the first time since the beginning of June.
In Greece, rioters threw fire bombs at police in anticipation of another vote on austerity measures designed to pave the way for another round of financing from the troika of the IMF, EU and ECB. The vote, scheduled for midnight in Greece (5:00 pm ET), is expected to pass, though the populace has seemingly had enough of policies dictated by outsiders.
For Wall Street, the day presented a perfect storm of disappointment, fears of higher taxes on dividends, tighter regulations of banks, uncertainty over tax and spending policies heading into 2013, and renewed concerns over our trading partners in Europe.
The steep declines may have only been a beginning, however, as no policies have changed, and, actually, the political makeup in Washington remained the same as it had been the day before. The continued gridlock coming from the White House and Capitol Hill may be the most disconcerting factor of all.
Some internal damage was done to markets, with the advance-decline line showing a nearly 5-1 edge for losers and new highs being surpassed by new lows, 94-174.
With none of the important initiatives nearing resolution, there seems to be nowhere for the market to go but down, now that the election is over, earnings season is just about finished and the market must focus on fundamentals and locking in gains for the year. The remainder of 2012 may prove to be quite challenging to investors.
Dow 12,932.73, -312.95 (2.36%)
NASDAQ 2,937.29, -74.64 (2.48%)
S&P 500 1,394.53, -33.86 (2.37%)
NYSE Composite 8,138.80, -173.55 (2.09%)
NASDAQ Volume 4,322,112,500
NYSE Volume 2,059,028,750
Combined NYSE & NASDAQ Advance - Decline: 961-4613
Combined NYSE & NASDAQ New highs - New lows: 94-174
WTI crude oil: 84.44, -4.27
Gold: 1,714.00, -1.00
Silver: 31.66, -0.373
With the vote in Florida still being tallied (anybody surprised?), the Sunshine State turned out to be mostly inconsequential as the president swept the key states of Virginia, Ohio, Wisconsin, Iowa, Pennsylvania (which never really was in play), New Hampshire, Colorado and Nevada. Romney's sole win in the so-called "swing states" was in North Carolina, a state which Obama took by a narrow 0.3% in 2008.
Once the midwest states of Wisconsin, Iowa and Ohio were declared for Obama, the race was over, but it wasn't until after midnight in the East that Mitt Romney gave his concession speech and later, President Obama gave a ripping, rhetorical speech extolling the virtues of freedom of choice, tolerance and working together toward shared goals and the great creation of our founders, the United States of America, individual states bound together by social compact.
In the House and Senate races, the makeup of congress remained largely the same, with Republicans dominating the House and Democrats strengthening their grip on the senate, winning key races in Virginia, Florida, and, especially, Massachusetts, where Elizabeth Warren, the fiery consumer rights advocate, took the seat away from Republican incumbent Scott Brown, in a major setback for big banks.
Warren, who worked on TARP and other reforms in Washington, especially the implementation of a consumer protection division at the Federal Reserve, will likely end up on the Senate banking Committee, possibly winning the chairmanship.
Another critical Senate race was won in Connecticut by Christopher Murphy, who defeated Linda McMahon, who wrestling millionaire who spent $100 million on her own campaign.
Jon Tester retained his Senate seat from Montana in a close race with Republican challenger Denny Rehberg, keeping the balance of power firmly in their control with 55 seats, along with one independent, Bernie Sanders of Vermont. The Democrats likely gained another ally when former governor, independent Angus King of Maine, won an open Senate seat that had been held by Republican Olympia Snowe. King has not indicated which party he would caucus with, though most believe it will be with Democrats. King won on the simple idea of making filibusters less of an effective measure in killing legislation, believing that excessive filibustering by Senate Republicans had blocked almost all significant legislation over the past four years.
There was little change in the House, as Reublicans retained control with 232 seats to 191 held by Democrats with a number of vacancies.
It wasn't long before other voices began to be heard, especially those on Wall Street who had been counting on a win by Republican Romney. Before the market opened, futures began a steep decline, though the catalyst may have nad more to do with comments by ECB president Mario Draghi and some dismal production figures from Germany, regarded as a stronghold in the recession-plagued continent.
Shortly after Germany's industrial production was reported to have fallen 1.2% in September, Draghi said that the crisis in Europe was beginning to take its toll on the industrial powerhouse that is the German economy.
Heading into the first post-election session, Dow futures were pointing toward a loss of more than 100 points at the open, and the result was worse, with the 132-point gain from Tuesday wiped out in the opening minute.
Stocks continued their descent until bottoming out just before noon, down 369 points, the biggest decline of the year, though some strengthening took all of the indices off their lows as the day progressed.
Still, the losses were dramatic and especially in the banking sector, where ank of America (BAC), Goldman Sachs (GS), JP Morgan Chase (JPM) and other big bank concerns were off more than five percent. All 10 S&P sectors finished in the red, the S&P could not defend the 1400 level and nearly bounced off its 200-day moving averages, the NASDAQ - aided by Apple's continued decline into bear market territory - broke down below its 200-DMA and the Dow closed below its 200-DMA for the first time since the beginning of June.
In Greece, rioters threw fire bombs at police in anticipation of another vote on austerity measures designed to pave the way for another round of financing from the troika of the IMF, EU and ECB. The vote, scheduled for midnight in Greece (5:00 pm ET), is expected to pass, though the populace has seemingly had enough of policies dictated by outsiders.
For Wall Street, the day presented a perfect storm of disappointment, fears of higher taxes on dividends, tighter regulations of banks, uncertainty over tax and spending policies heading into 2013, and renewed concerns over our trading partners in Europe.
The steep declines may have only been a beginning, however, as no policies have changed, and, actually, the political makeup in Washington remained the same as it had been the day before. The continued gridlock coming from the White House and Capitol Hill may be the most disconcerting factor of all.
Some internal damage was done to markets, with the advance-decline line showing a nearly 5-1 edge for losers and new highs being surpassed by new lows, 94-174.
With none of the important initiatives nearing resolution, there seems to be nowhere for the market to go but down, now that the election is over, earnings season is just about finished and the market must focus on fundamentals and locking in gains for the year. The remainder of 2012 may prove to be quite challenging to investors.
Dow 12,932.73, -312.95 (2.36%)
NASDAQ 2,937.29, -74.64 (2.48%)
S&P 500 1,394.53, -33.86 (2.37%)
NYSE Composite 8,138.80, -173.55 (2.09%)
NASDAQ Volume 4,322,112,500
NYSE Volume 2,059,028,750
Combined NYSE & NASDAQ Advance - Decline: 961-4613
Combined NYSE & NASDAQ New highs - New lows: 94-174
WTI crude oil: 84.44, -4.27
Gold: 1,714.00, -1.00
Silver: 31.66, -0.373
Tuesday, October 23, 2012
Stocks Socked Again on Earnings, Revenue Misses
Today's decline had no end-of-day rally from which to save itself. Stocks were down from open to close, and hard, owing mostly to a continuing spate of earnings disappointments and negative guidance outlooks.
Today's main culprits were a trio of Dow components, DuPont (DD), 3M (MMM) and United Technologies (UTX), though DuPont was clearly the worst of the bunch, recording a third quarter profit of just one cent per share, far below analyst estimates of 46 cents per share.
That report, early in the morning, hours before the market opened, sent futures crashing, so that the Dow opened with a triple digit loss in the first minutes of trading. Stocks could not recover, as it is quickly becoming clear that corporate earnings and revenues are lacking - 60% of companies reporting thus far have missed revenue estimates, many of which have been radically lowered. Meanwhile, Europe's woes continue to weight on markets globally, as the bourses across the continent showed heavy losses again.
The race for president also added to investor dismay, the predominant thinking that President Obama clearly outclassed challenger Mitt Romney in Monday night's final debate, focused on foreign policy, an obvious weak spot for the Republican. According to the best guesses on investor sentiment concerning the election, an Obama victory would be bad for stocks, because Obama favors more regulation and higher taxes for high wage earners, while Romney would likely favor policies which generally leave the status quo alone, allowing the abuses of the rich to continue and the wealth gap to widen.
All politics aside, it is actually fundamentals - for a welcome change - that are driving the most recent declines. Companies are reporting an assortment of earnings misses and sour outlooks for the remainder of 2012 and 2013, based almost entirely on current conditions, which have consumers strapped, governments broke and debt levels for all, unsustainable.
Where stocks will go from here is unknown, though all of the major indices have broken below their 50-day moving averages, generally a sign of more bad days to come.
Additionally, the advance-decline line has deteriorated badly over the past week, as has new highs-new lows, finally capitulating, with new 52-week lows outpacing new highs, 129-53
Dow components reporting on Wednesday include AT&T (T) and Boeing (BA), just a pair in a slew of over 400 companies that will be reporting throughout the day. Both of the Dow components report prior to the market open.
The silver lining in the recent declines is the slump in oil and gas prices. Motorists are already seeing 12-15 cent reductions in the price of a gallon of regular gas, with more easing to come, as crude oil is in the midst of a severe mean reversion, which could bring the cost of a gallon of gas to below $3.00 in some areas.
A reduction in the price of gas could be just what the market needs in time for the holidays, critically important to markets and, well, kids.
Dow 13,102.53, -243.36 (1.82%)
NASDAQ 2,990.46, -26.50 (0.88%)
S&P 500 1,413.11, -20.71 (1.44%)
NYSE Composite 8,197.14, -132.05 (1.59%)
NASDAQ Volume 1,780,896,750
NYSE Volume 3,233,623,000
Combined NYSE & NASDAQ Advance - Decline: 1709-3814
Combined NYSE & NASDAQ New highs - New lows: 53-129
WTI crude oil: 86.67, -1.98
Gold: 1,709.40, -16.90
Silver: 31.79, -0.459
Today's main culprits were a trio of Dow components, DuPont (DD), 3M (MMM) and United Technologies (UTX), though DuPont was clearly the worst of the bunch, recording a third quarter profit of just one cent per share, far below analyst estimates of 46 cents per share.
That report, early in the morning, hours before the market opened, sent futures crashing, so that the Dow opened with a triple digit loss in the first minutes of trading. Stocks could not recover, as it is quickly becoming clear that corporate earnings and revenues are lacking - 60% of companies reporting thus far have missed revenue estimates, many of which have been radically lowered. Meanwhile, Europe's woes continue to weight on markets globally, as the bourses across the continent showed heavy losses again.
The race for president also added to investor dismay, the predominant thinking that President Obama clearly outclassed challenger Mitt Romney in Monday night's final debate, focused on foreign policy, an obvious weak spot for the Republican. According to the best guesses on investor sentiment concerning the election, an Obama victory would be bad for stocks, because Obama favors more regulation and higher taxes for high wage earners, while Romney would likely favor policies which generally leave the status quo alone, allowing the abuses of the rich to continue and the wealth gap to widen.
All politics aside, it is actually fundamentals - for a welcome change - that are driving the most recent declines. Companies are reporting an assortment of earnings misses and sour outlooks for the remainder of 2012 and 2013, based almost entirely on current conditions, which have consumers strapped, governments broke and debt levels for all, unsustainable.
Where stocks will go from here is unknown, though all of the major indices have broken below their 50-day moving averages, generally a sign of more bad days to come.
Additionally, the advance-decline line has deteriorated badly over the past week, as has new highs-new lows, finally capitulating, with new 52-week lows outpacing new highs, 129-53
Dow components reporting on Wednesday include AT&T (T) and Boeing (BA), just a pair in a slew of over 400 companies that will be reporting throughout the day. Both of the Dow components report prior to the market open.
The silver lining in the recent declines is the slump in oil and gas prices. Motorists are already seeing 12-15 cent reductions in the price of a gallon of regular gas, with more easing to come, as crude oil is in the midst of a severe mean reversion, which could bring the cost of a gallon of gas to below $3.00 in some areas.
A reduction in the price of gas could be just what the market needs in time for the holidays, critically important to markets and, well, kids.
Dow 13,102.53, -243.36 (1.82%)
NASDAQ 2,990.46, -26.50 (0.88%)
S&P 500 1,413.11, -20.71 (1.44%)
NYSE Composite 8,197.14, -132.05 (1.59%)
NASDAQ Volume 1,780,896,750
NYSE Volume 3,233,623,000
Combined NYSE & NASDAQ Advance - Decline: 1709-3814
Combined NYSE & NASDAQ New highs - New lows: 53-129
WTI crude oil: 86.67, -1.98
Gold: 1,709.40, -16.90
Silver: 31.79, -0.459
Friday, October 5, 2012
Reliability, Persistence and Consistency; NFP Number Disagreeable to All
Irony.
It slices to the heart like a butcher's knife through a sheave of pork... or chicken, appropriate, for the occasional sarcastic remark, refrained from by those with more sense than the norm.
Today's post, Reliability, Persistence and Consistency, was supposed to have been written yesterday. So much for prescience and the timeliness of a message not delivered.
As the matter may be, the trio go together well. While consistency may or may not inspire a reliable nature, so too persistence can be the godfather of both. In the end, the verbiage required for an adequate discussion of the value of virtuousness is far too great to be expensed on a Friday afternoon. Better to leave things unsaid than say them wrongly, even as the wrongs of others may force the hand into parody, mirth or an occasional lilting melodrama.
As for the markets, so much nothing about nothing much. The greatly-anticipated non-farm payroll report for September left much to be desired on both the bullish and bearish sides of the equation. The actual number of 114,000 net job gain was so close to all official and unofficial estimates as to be nothing more than a hiccup, though traders made the best of it, sending stocks rocketing at the open and trading them down throughout the session and into the close.
A great deal has been and will be made of the unemployment rate flopping to 7.8%. It's pure rubbish, concocted from flimsy data with maximum massage President Oblahblah will feel a s rush of relief. Since FDR, no president has won re-election with an official unemployment rate over 8.0 percent. It's a winning number for a second term. What utter nonsense, because, if the truth be known, the comparison to FDR is apt, so the chances are good that Obama could be re-elected with an unemployment rate of 10 or 15 percent, such is the economic condition of the nation.
May decimal point profits and losses were made by those who find day-trading a pleasurable occupation. For the rest of us, it didn't really matter, much like Wednesday night's Presidential Debate, an over-flouted fiasco of sound that greatly interfered with the finale of the baseball season, which, notably, was without great tension and tumult, except, of course, for fans of the Oakland Athletics. Somewhere, everywhere, lovers of the little guy were crying tears of joy for smallball.
The weekend beckons. Be not afraid nor tired from the pressures of the week just commenced. It is past, and the future always holds promise. Take a break. Reflect. Enjoy life rather than cursing your lot. The weekend will last but a short time. In the grand pantheon of history, your life matters little as well. Don't even think about it. Monday will come sooner than most of us will like.
Dow 13,610.15, +34.79(0.26%)
NASDAQ 3,136.19, -13.27 (0.42%)
S&P 500 1,460.93, -0.47 (0.03%)
NYSE Composite 8,384.07, +7.73(0.09%)
NASDAQ Volume 1,611,767,130
NYSE Volume 3,177,711,250
Combined NYSE & NASDAQ Advance - Decline: 2837-2618
Combined NYSE & NASDAQ New highs - New lows: 468-40 (really)
WTI crude oil: 89.88, -1.83
Gold: 1,780.80, -15.70
Silver: 34.57, -0.529
It slices to the heart like a butcher's knife through a sheave of pork... or chicken, appropriate, for the occasional sarcastic remark, refrained from by those with more sense than the norm.
Today's post, Reliability, Persistence and Consistency, was supposed to have been written yesterday. So much for prescience and the timeliness of a message not delivered.
As the matter may be, the trio go together well. While consistency may or may not inspire a reliable nature, so too persistence can be the godfather of both. In the end, the verbiage required for an adequate discussion of the value of virtuousness is far too great to be expensed on a Friday afternoon. Better to leave things unsaid than say them wrongly, even as the wrongs of others may force the hand into parody, mirth or an occasional lilting melodrama.
As for the markets, so much nothing about nothing much. The greatly-anticipated non-farm payroll report for September left much to be desired on both the bullish and bearish sides of the equation. The actual number of 114,000 net job gain was so close to all official and unofficial estimates as to be nothing more than a hiccup, though traders made the best of it, sending stocks rocketing at the open and trading them down throughout the session and into the close.
A great deal has been and will be made of the unemployment rate flopping to 7.8%. It's pure rubbish, concocted from flimsy data with maximum massage President Oblahblah will feel a s rush of relief. Since FDR, no president has won re-election with an official unemployment rate over 8.0 percent. It's a winning number for a second term. What utter nonsense, because, if the truth be known, the comparison to FDR is apt, so the chances are good that Obama could be re-elected with an unemployment rate of 10 or 15 percent, such is the economic condition of the nation.
May decimal point profits and losses were made by those who find day-trading a pleasurable occupation. For the rest of us, it didn't really matter, much like Wednesday night's Presidential Debate, an over-flouted fiasco of sound that greatly interfered with the finale of the baseball season, which, notably, was without great tension and tumult, except, of course, for fans of the Oakland Athletics. Somewhere, everywhere, lovers of the little guy were crying tears of joy for smallball.
The weekend beckons. Be not afraid nor tired from the pressures of the week just commenced. It is past, and the future always holds promise. Take a break. Reflect. Enjoy life rather than cursing your lot. The weekend will last but a short time. In the grand pantheon of history, your life matters little as well. Don't even think about it. Monday will come sooner than most of us will like.
Dow 13,610.15, +34.79(0.26%)
NASDAQ 3,136.19, -13.27 (0.42%)
S&P 500 1,460.93, -0.47 (0.03%)
NYSE Composite 8,384.07, +7.73(0.09%)
NASDAQ Volume 1,611,767,130
NYSE Volume 3,177,711,250
Combined NYSE & NASDAQ Advance - Decline: 2837-2618
Combined NYSE & NASDAQ New highs - New lows: 468-40 (really)
WTI crude oil: 89.88, -1.83
Gold: 1,780.80, -15.70
Silver: 34.57, -0.529
Friday, September 7, 2012
August Non-Farm Payrolls Miss Flatlines Stocks
The US economy showed another sign of sluggishness, as August Non-farm Payrolls rose less than expected, gaining 96,000 net new jobs for the month, well below consensus estimates of 125,000.
Additionally, June and July data sets were revised downward by a combined 41,000. June payrolls were just 45,000, while the number in July was revised down to 141,000.
The official jobless rate fell from 8.3% to 8.1%, as labor force participation fell to its lowest level in decades, at 63.5%.
The poor showing for the labor market was seen as a blow to president Obama's re-election bid, and also as cause for the Fed supplying more stimulus when the FOMC meets next week.
Volume more or less returned to the doldrums, following the massive ramp-up Thursday, following the unveiling of the ECB's new bond purchase program.
Stocks tended to just meander around the flat line, with the odd exception of the NYSE Composite, which gapped up at the open and stayed in a tight range all session long.
It's somewhat a sad commentary on markets that they are so well-coordinated in response to news, specifically that this or that central bank is making money easier for bankers to borrow at little to no interest, all the while the general public scratching out a living without any mechanism for saving.
Outward appearances may be deceiving. This kind of controlled economics seldom works out well in the long run.
Precious metals may be telling the markets something. Gold and silver soared again today and are at multi-month highs, generally a sign that economic or geopolitical conditions are strained and risk assets not to be trusted, though one could hardly suspect that anything evil may come the way for stocks, as well as they have performed this year.
Dow 13,306.64, +14.64(0.11%)
Nasdaq 3,136.42, +0.61(0.02%)
S&P 500 1,437.92, +5.80(0.40%)
NYSE Composite 8,233.98, +73.42(0.90%)
NYSE Volume 3,627,325,750
Nasdaq Volume 1,694,756,120
Combined NYSE & NASDAQ Advance - Decline: 3490-1997
Combined NYSE & NASDAQ New highs - New lows: 449-40 (extreme)
WTI crude oil: 96.42, +0.89
Gold: 1,740.50, +34.90
Silver: 33.69, +1.02
Additionally, June and July data sets were revised downward by a combined 41,000. June payrolls were just 45,000, while the number in July was revised down to 141,000.
The official jobless rate fell from 8.3% to 8.1%, as labor force participation fell to its lowest level in decades, at 63.5%.
The poor showing for the labor market was seen as a blow to president Obama's re-election bid, and also as cause for the Fed supplying more stimulus when the FOMC meets next week.
Volume more or less returned to the doldrums, following the massive ramp-up Thursday, following the unveiling of the ECB's new bond purchase program.
Stocks tended to just meander around the flat line, with the odd exception of the NYSE Composite, which gapped up at the open and stayed in a tight range all session long.
It's somewhat a sad commentary on markets that they are so well-coordinated in response to news, specifically that this or that central bank is making money easier for bankers to borrow at little to no interest, all the while the general public scratching out a living without any mechanism for saving.
Outward appearances may be deceiving. This kind of controlled economics seldom works out well in the long run.
Precious metals may be telling the markets something. Gold and silver soared again today and are at multi-month highs, generally a sign that economic or geopolitical conditions are strained and risk assets not to be trusted, though one could hardly suspect that anything evil may come the way for stocks, as well as they have performed this year.
Dow 13,306.64, +14.64(0.11%)
Nasdaq 3,136.42, +0.61(0.02%)
S&P 500 1,437.92, +5.80(0.40%)
NYSE Composite 8,233.98, +73.42(0.90%)
NYSE Volume 3,627,325,750
Nasdaq Volume 1,694,756,120
Combined NYSE & NASDAQ Advance - Decline: 3490-1997
Combined NYSE & NASDAQ New highs - New lows: 449-40 (extreme)
WTI crude oil: 96.42, +0.89
Gold: 1,740.50, +34.90
Silver: 33.69, +1.02
Thursday, June 28, 2012
Supreme Court Affirms Health Care Mandate; Stocks Erase Losses on European Rumors
Kiss the US constitution goodbye... or, rather, what's left of it.
When the Chief Justice of the Supreme Court breaks ranks with his fellow conservative justices to affirm that all Americans must purchase health care insurance or be fined, siding with four liberal justices - who, by the way, should be stripped of their robes - in a matter of such great economic and political importance, then there's no hope left for the system left by our founding fathers.
Count Chief Justice John Roberts as just another Washington politician either bought and sold by special interests, playing presidential politics serving a master other than the people of the United States. Whatever the case, the law be damned with this horrendous decision, which accomplishes nothing other than to feed more fodder into the cannons of the upcoming political debate.
Republican presidential candidate Mitt Romney immediately went on the offensive, while the White House checked off a mark in the victory column. Choosing to evade the issue of whether the mandate violated the commerce clause, by calling the "penalty" a tax, the five affirming justices simply kicked the can down the road a pace, a maneuver that's well-learned in the halls of power these days.
Next, they'll be telling Americans to quit smoking or be fined, stop eating fatty foods or go to jail or by whatever "legal" means strip common citizens of even more rights while emptying their pockets of any available cash.
It's a sham, much like most of what comes out of Washington, DC, these days. The best solution, on an individual basis, is to ignore the law and resist any and all attempts to circumvent the constitution with passive opposition, or, failing that, take to the streets and fight (the author is dreaming).
After the initial shock and awe over the Supreme Court shocker, stocks continued to trend lower, as they had all day, until, with less than an hour left in the session, news from Europe that Angela Merkel had cancelled a conference call scheduled for tonight had stocks moving well off their lows, finishing with comfortable losses rather than worrisome ones.
The official story of the Dow erasing most of a 177-point decline is, of course, bunk. This was an orchestrated move to get stocks back into a more tenable range of trading as the second quarter comes to an end with Friday's closing bell and make today's closing numbers look more appealing to the herd of sheeple that populate the nation.
Not a thing is going to be resolved in Europe at the latest in a series of meaningless summits, so, for whatever reason, the HFT mechanisms which control 85% of the trading on Wall Street simply went into overdrive on a "risk-on" scenario late in the day.
The move, like most of what passes for economy and trading these days, was another pathetic example of why most individual investors have pulled their money out of stocks altogether and will remain on the sidelines until some semblance of balance and fair play is returned to the equity markets (more wishful thinking).
Meanwhile, commodities were lambasted, with oil down sharply, silver closing at its lowest level of 2012 and gold dropping close to its lower support.
For whatever it's worth, a growing number of Americans and professionals in the fields of finance and economics think the Wall Street casino is a complete and total farce.
Those embracing that line of reasoning are surely on to something.
Dow 12,602.26, -24.75 (0.20%)
NASDAQ 2,849.49, -25.83 (0.90%)
S&P 500 1,329.04, -2.81 (0.21%)
NYSE Composite 7,597.50, -0.55 (0.01%)
NASDAQ Volume 1,753,433,750
NYSE Volume 3,867,150,000
Combined NYSE & NASDAQ Advance - Decline: 2697-2879
Combined NYSE & NASDAQ New highs - New lows: 122-99
WTI crude oil: 77.69, -2.62
Gold: 1,550.40, -28.00
Silver: 26.25, -0.70
When the Chief Justice of the Supreme Court breaks ranks with his fellow conservative justices to affirm that all Americans must purchase health care insurance or be fined, siding with four liberal justices - who, by the way, should be stripped of their robes - in a matter of such great economic and political importance, then there's no hope left for the system left by our founding fathers.
Count Chief Justice John Roberts as just another Washington politician either bought and sold by special interests, playing presidential politics serving a master other than the people of the United States. Whatever the case, the law be damned with this horrendous decision, which accomplishes nothing other than to feed more fodder into the cannons of the upcoming political debate.
Republican presidential candidate Mitt Romney immediately went on the offensive, while the White House checked off a mark in the victory column. Choosing to evade the issue of whether the mandate violated the commerce clause, by calling the "penalty" a tax, the five affirming justices simply kicked the can down the road a pace, a maneuver that's well-learned in the halls of power these days.
Next, they'll be telling Americans to quit smoking or be fined, stop eating fatty foods or go to jail or by whatever "legal" means strip common citizens of even more rights while emptying their pockets of any available cash.
It's a sham, much like most of what comes out of Washington, DC, these days. The best solution, on an individual basis, is to ignore the law and resist any and all attempts to circumvent the constitution with passive opposition, or, failing that, take to the streets and fight (the author is dreaming).
After the initial shock and awe over the Supreme Court shocker, stocks continued to trend lower, as they had all day, until, with less than an hour left in the session, news from Europe that Angela Merkel had cancelled a conference call scheduled for tonight had stocks moving well off their lows, finishing with comfortable losses rather than worrisome ones.
The official story of the Dow erasing most of a 177-point decline is, of course, bunk. This was an orchestrated move to get stocks back into a more tenable range of trading as the second quarter comes to an end with Friday's closing bell and make today's closing numbers look more appealing to the herd of sheeple that populate the nation.
Not a thing is going to be resolved in Europe at the latest in a series of meaningless summits, so, for whatever reason, the HFT mechanisms which control 85% of the trading on Wall Street simply went into overdrive on a "risk-on" scenario late in the day.
The move, like most of what passes for economy and trading these days, was another pathetic example of why most individual investors have pulled their money out of stocks altogether and will remain on the sidelines until some semblance of balance and fair play is returned to the equity markets (more wishful thinking).
Meanwhile, commodities were lambasted, with oil down sharply, silver closing at its lowest level of 2012 and gold dropping close to its lower support.
For whatever it's worth, a growing number of Americans and professionals in the fields of finance and economics think the Wall Street casino is a complete and total farce.
Those embracing that line of reasoning are surely on to something.
Dow 12,602.26, -24.75 (0.20%)
NASDAQ 2,849.49, -25.83 (0.90%)
S&P 500 1,329.04, -2.81 (0.21%)
NYSE Composite 7,597.50, -0.55 (0.01%)
NASDAQ Volume 1,753,433,750
NYSE Volume 3,867,150,000
Combined NYSE & NASDAQ Advance - Decline: 2697-2879
Combined NYSE & NASDAQ New highs - New lows: 122-99
WTI crude oil: 77.69, -2.62
Gold: 1,550.40, -28.00
Silver: 26.25, -0.70
Wednesday, May 16, 2012
Volume Up, Stocks Down As Malaise in May Exhibits the Results of Bad Karma
With higher and higher volumes showing up on individual stocks as well as the major averages virtually every passing day, the idea that there's something basically wrong with the markets and the global economy is beginning to build into a self-defeating, repeating, cyclical tailspin.
The major indices did another midday about-face, in classic bear market fashion, even though economic data in the US was relatively positive.
Housing starts were up - at an annualized rate of 717K on expectations of 675K, though building permits were lower than anticipated. That stocks, especially those of home builders, would rally on such news was not unexpected, though just because somebody puts a shovel in the ground does not necessarily imply that these newly-constructed homes will eventually be bought, much less completed.
However, two more broad measures of the economy were also positive. Industrial production grew at a rate of 1.1% in April, while capacity utilization for the month printed at 79.2%, a very strong and encouraging number.
Investors simply cannot shake the co-mingled issues of Europe, especially Greece, the falling Euro and rising dollar, all of which contributes to what could be a tough state of affairs for many of the US markets' global entities, which ship and sell around the world. Exports from the US will be especially damaged as the weaker foreign currencies and stronger US dollar make for pricier goods in faraway markets where demand has been slowing.
Following along the same logic, commodity prices are trending lower as well, which would help companies' bottom line cost structures and help keep them competitive, though traders are not confident there will be strong enough demand to produce meaningful pricing power and sustainable profit margins.
Underlying all these concerns are three major issues: Greece and the Euro, the upcoming presidential and congressional elections, and, political implications of US policy: the expiration of tax cuts at the end of 2012 along with uncertainty regarding President Obama's health care bill (now in the hands of the US Supreme Court) and a closetful of unwritten regulations, many of them centered on the financial industry through the Dodd-Frank legislation.
Further below the surface lies the uncertainty regarding the Fed's next move, as Operation Twist, aka QE3, expires at the end of June. Thus far, Fed chair Ben Bernanke nor any of the Fed's governors have hinted whether further easing would be forthcoming, and, at the end of the day, that is simply a nightmare scenario for the general economy and the banks, because without easy money, the fears are that global commerce will grind to a halt.
Markets hate uncertainty, and there's an abundance of that commodity in the flow right now, so there's no reason to believe that stocks will do anything but decline as profits are taken and few new positions are being staked out until there is resolution on some of these issues.
In the meantime, consumers are enjoying a bit of relief at the pump, as oil has fallen in just the past two weeks to its lowest level since December of last year and show no signs of bottoming. At the same time, housing prices keep declining and therein lies the conundrum of deflation. Everything costs less, but nobody is willing to pay now, because prices will likely be lower in a few days, weeks or months.
Obviously, there's no quick fix to any of this and behind closed doors, the leaders of the world's great nations and their central bankers are scared stiff.
The bad karma that's been spread worldwide by the political and monetary leaders is coming full circle it seems.
Dow 12,598.55, -33.45 (0.26%)
NASDAQ 2,874.04, -19.72 (0.68%)
S&P 500 1,324.80, -5.86 (0.44%)
NYSE Composite 7,592.80, -43.01 (0.56%)
NASDAQ Volume 1,842,974,250
NYSE Volume 4,254,574,000
Combined NYSE & NASDAQ Advance - Decline: 1843-3756
Combined NYSE & NASDAQ New highs - New lows: 76-255
WTI crude oil: 92.81, -1.17
Gold: 1,536.60, -20.50
Silver: 27.20, -0.88
The major indices did another midday about-face, in classic bear market fashion, even though economic data in the US was relatively positive.
Housing starts were up - at an annualized rate of 717K on expectations of 675K, though building permits were lower than anticipated. That stocks, especially those of home builders, would rally on such news was not unexpected, though just because somebody puts a shovel in the ground does not necessarily imply that these newly-constructed homes will eventually be bought, much less completed.
However, two more broad measures of the economy were also positive. Industrial production grew at a rate of 1.1% in April, while capacity utilization for the month printed at 79.2%, a very strong and encouraging number.
Investors simply cannot shake the co-mingled issues of Europe, especially Greece, the falling Euro and rising dollar, all of which contributes to what could be a tough state of affairs for many of the US markets' global entities, which ship and sell around the world. Exports from the US will be especially damaged as the weaker foreign currencies and stronger US dollar make for pricier goods in faraway markets where demand has been slowing.
Following along the same logic, commodity prices are trending lower as well, which would help companies' bottom line cost structures and help keep them competitive, though traders are not confident there will be strong enough demand to produce meaningful pricing power and sustainable profit margins.
Underlying all these concerns are three major issues: Greece and the Euro, the upcoming presidential and congressional elections, and, political implications of US policy: the expiration of tax cuts at the end of 2012 along with uncertainty regarding President Obama's health care bill (now in the hands of the US Supreme Court) and a closetful of unwritten regulations, many of them centered on the financial industry through the Dodd-Frank legislation.
Further below the surface lies the uncertainty regarding the Fed's next move, as Operation Twist, aka QE3, expires at the end of June. Thus far, Fed chair Ben Bernanke nor any of the Fed's governors have hinted whether further easing would be forthcoming, and, at the end of the day, that is simply a nightmare scenario for the general economy and the banks, because without easy money, the fears are that global commerce will grind to a halt.
Markets hate uncertainty, and there's an abundance of that commodity in the flow right now, so there's no reason to believe that stocks will do anything but decline as profits are taken and few new positions are being staked out until there is resolution on some of these issues.
In the meantime, consumers are enjoying a bit of relief at the pump, as oil has fallen in just the past two weeks to its lowest level since December of last year and show no signs of bottoming. At the same time, housing prices keep declining and therein lies the conundrum of deflation. Everything costs less, but nobody is willing to pay now, because prices will likely be lower in a few days, weeks or months.
Obviously, there's no quick fix to any of this and behind closed doors, the leaders of the world's great nations and their central bankers are scared stiff.
The bad karma that's been spread worldwide by the political and monetary leaders is coming full circle it seems.
Dow 12,598.55, -33.45 (0.26%)
NASDAQ 2,874.04, -19.72 (0.68%)
S&P 500 1,324.80, -5.86 (0.44%)
NYSE Composite 7,592.80, -43.01 (0.56%)
NASDAQ Volume 1,842,974,250
NYSE Volume 4,254,574,000
Combined NYSE & NASDAQ Advance - Decline: 1843-3756
Combined NYSE & NASDAQ New highs - New lows: 76-255
WTI crude oil: 92.81, -1.17
Gold: 1,536.60, -20.50
Silver: 27.20, -0.88
Wednesday, January 25, 2012
Fed to Keep Rates Low Through Late 2014; Most Investors Pleased
Ending the first FOMC rate policy meeting of 2012 with a bang, the Federal Reserve announced today no change in their target federal funds rate of 0-0.25%, but the major announcement was that they would keep this same, historically-low rate in effect through "late 2014." The rapid results of the Fed's announcement that they would keep monetary policy ridiculously easy for the next three years were felt immediately in all markets.
The dollar dropped like a rock against most other currencies, especially the Euro.
Bond yields fall dramatically.
Stocks turned from mildly negative to ferociously positive.
Gold, silver, crude oil and most other commodities spiked higher.
Those were the winners. The losers were just about anybody on a fixed income, which includes not only those on Social Security or retirement pensions, but also most workers in the private sector, which has experienced flat to lower labor prices for most of the past decade.
Therein lies the fallacy of the Fed's dual mandate of providing stable prices and full employment. Obviously, on both measures, the Fed has failed badly over recent years and is now in a no-win situation without much flexibility to react to real-time events and unforeseen circumstances.
With yields on money market funds and certificates of deposit at or near record lows, the Fed is encouraging risk, though Americans, still saddled with too much household debt, many with underwater mortgages to go along with stagnant wages, still aren't fully in the mood - nor do many have the wherewithal - to spend freely and get the economy out of the dolorous regime of 1-3% growth.
Business, generally, though there are pockets of severe conditions, are content to keep grinding on, though innovation and new enterprise creation has been somewhat stifled, though not to the degree it has been, especially during the forlorn days of late 2008 and early 2009.
Conditions are generally much better than back then, as major banks have largely re-capitalized, households have paid down a good portion of debt and governments - outside of the petulant federal one - have tightened budgets though labor reductions, better spending discipline and capital controls. The final pieces to the puzzle of a sustained, vibrant recovery rest squarely upon the shoulders of the federal government, which must seriously tackle the issues of Fannie Mae and Freddie Mac, reducing the annual deficit (a balanced budget, or something close to it, would be a welcome change), restructuring the tax code, reducing needless regulations and implementing fundamental changes in entitlement programs.
The federal government's list of dirty laundry is long and unlikely to be resolved to any great extent in the background of a presidential election year. That is not the Fed's problem, just as the profligate spending of many of the European nations should not be an epidemic for the ECB, though that is exactly what it has become.
The Fed is doing just about everything it can to make the business environment friendly and accommodative while the federal government, though gridlock and ideological differences, fights, kicking and screaming at any and every notion of change.
Americans, on the other hand, are ready for change in a more positive direction, a theme repeatedly stressed in Tuesday night's State of the Union address by President Obama, who outlined a number of measures to get government working for the people again at the federal level, such notions quickly dismissed by political commentators and opponent Republicans as mere politicking.
Sadly, the politics of Washington, DC will not allow for any substantive changes for at least another year, meaning that Americans are stuck with what they've been handed, like it or not, making the matter of improving one's economic conditions a paramount requirement for each individual and family.
How, though can individuals help the economy grow?
Perhaps through being wiser shoppers, better disciplined managers of their own finances and smarter stewards of their own assets, which is not limited to just stocks, bonds, retirement accounts and real estate, but must include a dedication to some basic American principles, such as working hard, saving (though that is tough, but necessary), and making progress and innovation in one's chosen career path.
Working Americans, must shoulder much of the burden, as usual, though the lot of most working Americans (the 80-90% of the labor force with jobs) isn't really all that bad presently, it's the future - along with the repayment of past debts - about which most are overly concerned.
Considering that the worst of the recession is well behind us by now and that the Fed has signaled that conditions are unlikely to change much in the coming three years, the real issue is that of confidence, in one's job, one's future and in America.
It is up to everyone to see to it that the federal government is brought into line with the wishes of the middle class. It's not enough to deride the rich for not paying their fair share of taxes. More emphasis must be placed upon the well-entrenched welfare state. The poor aren't pulling their weight very well, either.
It's not enough to vote for the candidates of choice in November. It is the duty of all Americans to inquire and to become informed about government policies, resist them if necessary, protest them if they are wrong and change them if possible.
The Federal Reserve or the federal government will not make the needed changes to bring America back to a system of individual rights and fairness without hearing from each of us, all of us. It is long past time for Americans to take matters into their own hands, deal with the vagueries and inconsistencies of institutions and turn the tide. We are at an important point of change in our history and individuals must make the difference.
Dow 12,758.85, +83.10 (0.66%)
NASDAQ 2,818.31, +31.67 (1.14%)
S&P 500 1,326.06, +11.41 (0.87%)
NYSE Composite 7,914.81, +74.16 (0.95%)
NASDAQ Volume 1,954,827,375
NYSE Volume 4,410,711,500
Combined NYSE & NASDAQ Advance - Decline: 4049-1578
Combined NYSE & NASDAQ New highs - New lows: 239-20
WTI crude oil: 99.40, +0.45
Gold: 1,710.90, +46.40
Silver: 33.28, +1.30
The dollar dropped like a rock against most other currencies, especially the Euro.
Bond yields fall dramatically.
Stocks turned from mildly negative to ferociously positive.
Gold, silver, crude oil and most other commodities spiked higher.
Those were the winners. The losers were just about anybody on a fixed income, which includes not only those on Social Security or retirement pensions, but also most workers in the private sector, which has experienced flat to lower labor prices for most of the past decade.
Therein lies the fallacy of the Fed's dual mandate of providing stable prices and full employment. Obviously, on both measures, the Fed has failed badly over recent years and is now in a no-win situation without much flexibility to react to real-time events and unforeseen circumstances.
With yields on money market funds and certificates of deposit at or near record lows, the Fed is encouraging risk, though Americans, still saddled with too much household debt, many with underwater mortgages to go along with stagnant wages, still aren't fully in the mood - nor do many have the wherewithal - to spend freely and get the economy out of the dolorous regime of 1-3% growth.
Business, generally, though there are pockets of severe conditions, are content to keep grinding on, though innovation and new enterprise creation has been somewhat stifled, though not to the degree it has been, especially during the forlorn days of late 2008 and early 2009.
Conditions are generally much better than back then, as major banks have largely re-capitalized, households have paid down a good portion of debt and governments - outside of the petulant federal one - have tightened budgets though labor reductions, better spending discipline and capital controls. The final pieces to the puzzle of a sustained, vibrant recovery rest squarely upon the shoulders of the federal government, which must seriously tackle the issues of Fannie Mae and Freddie Mac, reducing the annual deficit (a balanced budget, or something close to it, would be a welcome change), restructuring the tax code, reducing needless regulations and implementing fundamental changes in entitlement programs.
The federal government's list of dirty laundry is long and unlikely to be resolved to any great extent in the background of a presidential election year. That is not the Fed's problem, just as the profligate spending of many of the European nations should not be an epidemic for the ECB, though that is exactly what it has become.
The Fed is doing just about everything it can to make the business environment friendly and accommodative while the federal government, though gridlock and ideological differences, fights, kicking and screaming at any and every notion of change.
Americans, on the other hand, are ready for change in a more positive direction, a theme repeatedly stressed in Tuesday night's State of the Union address by President Obama, who outlined a number of measures to get government working for the people again at the federal level, such notions quickly dismissed by political commentators and opponent Republicans as mere politicking.
Sadly, the politics of Washington, DC will not allow for any substantive changes for at least another year, meaning that Americans are stuck with what they've been handed, like it or not, making the matter of improving one's economic conditions a paramount requirement for each individual and family.
How, though can individuals help the economy grow?
Perhaps through being wiser shoppers, better disciplined managers of their own finances and smarter stewards of their own assets, which is not limited to just stocks, bonds, retirement accounts and real estate, but must include a dedication to some basic American principles, such as working hard, saving (though that is tough, but necessary), and making progress and innovation in one's chosen career path.
Working Americans, must shoulder much of the burden, as usual, though the lot of most working Americans (the 80-90% of the labor force with jobs) isn't really all that bad presently, it's the future - along with the repayment of past debts - about which most are overly concerned.
Considering that the worst of the recession is well behind us by now and that the Fed has signaled that conditions are unlikely to change much in the coming three years, the real issue is that of confidence, in one's job, one's future and in America.
It is up to everyone to see to it that the federal government is brought into line with the wishes of the middle class. It's not enough to deride the rich for not paying their fair share of taxes. More emphasis must be placed upon the well-entrenched welfare state. The poor aren't pulling their weight very well, either.
It's not enough to vote for the candidates of choice in November. It is the duty of all Americans to inquire and to become informed about government policies, resist them if necessary, protest them if they are wrong and change them if possible.
The Federal Reserve or the federal government will not make the needed changes to bring America back to a system of individual rights and fairness without hearing from each of us, all of us. It is long past time for Americans to take matters into their own hands, deal with the vagueries and inconsistencies of institutions and turn the tide. We are at an important point of change in our history and individuals must make the difference.
Dow 12,758.85, +83.10 (0.66%)
NASDAQ 2,818.31, +31.67 (1.14%)
S&P 500 1,326.06, +11.41 (0.87%)
NYSE Composite 7,914.81, +74.16 (0.95%)
NASDAQ Volume 1,954,827,375
NYSE Volume 4,410,711,500
Combined NYSE & NASDAQ Advance - Decline: 4049-1578
Combined NYSE & NASDAQ New highs - New lows: 239-20
WTI crude oil: 99.40, +0.45
Gold: 1,710.90, +46.40
Silver: 33.28, +1.30
Thursday, January 19, 2012
Amazing Stock Market Rally Rolls Along
One of the oldest adages of stock market investing is the time-honored, "the markets can remain irrational longer than you can remain solvent," or something to that effect.
This is particularly poignant in the midst of the current Wall Street "melt-up" which has been ongoing since the middle of December and shows little sign of letting up.
While corporate earnings continue to flow, the latest being from two big banks, Morgan Stanley (MS) and Bank of America (BAC), both of which met or exceeded expectations, though the accounting tricks and tactics employed by the mega-banks leave much to the imagination.
As far as Bank of America is concerned, their beat of expectations of 13 cents per share with a reported 15 cents included a bunch of one-time items and useful reserve and loan loss calculations, embedded deep within their monstrous 110-page quarterly report. Despite the discrepancies in the quarterly, Bank of America bounced higher again today, closing at 6.95, a 15 cent gain, after popping above $7 per share for the first time since Warren Buffett invested $5 billion in the bank in early 2011.
Morgan Stanley actually lost money for the quarter, but lost quite a bit less than expected. The firm’s net loss was $250 million, or 15 cents a share, compared with profit of $836 million, or 41 cents, a year earlier. The consensus expectation was for a loss of 57 cents per share. Traders took the data in stride, boosting the stock to its highest level since October. In this case, even P.T. Barnum would be proud, noting that "there's a sucker born every minute." All the better for momentum chasers in this beat-up financial.
There was a dose of economic data that surprised some and annoyed others, notably bearish investors. Initial unemployment claims came in at a sparkling 352,000 - the lowest number in months - after last week's upwardly revised 402,000. The unemployment figures continue to be a topic of some debate, in that the "seasonally-adjusted" model used by the BLS seems to have forgotten that December was holiday season, chock full of part time and temporary hires. Whatever the case, traders seemed less-than-satisfied with the numbers, as the markets began slowly but ground slowly higher through the session.
December CPI came in flat, after yesterday's -0.1% drop in the PPI, sparking fears of "disinflation" (a Federal reserve governor term) or deflation, the bogey man that haunts Fed chairman Ben Benanke.
Housing starts and building permits were flat to lower, though new home builders have been leading this rally, up more than 10% as a group since the first of the year.
How much longer can the rally last? Tomorrow being options expiration, one would think a major sell-off is in the cards for either Friday afternoon or Monday, though, as stated at the top of this piece, rationality is generally not a hallmark of recent rallies.
If you've not already taken part in this wild market ride, it may be a little late. Stocks are getting extremely overbought, as the advance-decline and new highs vs. new lows figures have been telegraphing lately.
Adding to the upside has been the unusually quiet tones coming out of Europe, as opposed to the rather hysterical daily dispatches that typified the latter half of 2011. Nothing's really changed over there, except perception, perhaps. Europe is mostly headed for a recession, which will hit the middle classes, though Greece, in particular, in already in the throes of a fiscal straightjacket which some might say is emulating a full-blown depression. To the Greeks, most of europe is saying "pay up," to which the Greeks respond with "shut up" or some other suitable and more demonstrable phraseology.
The long and short of it, if one is of the camp that believes a strong stock market is a proxy for a strong general economy, 2012 is shaping up to be a banner year or at least a good effort at kicking the can of economic woes down the road until after the elections in November.
Throwing a bit of cold water on the rally parade, as expected, Eastman Kodak (EK) filed for bankruptcy protection today, and Republican presidential nominee hopeful Mitt Romney has been found to have a number of accounts and holdings in off-shore banks, notably in the Cayman Islands, setting the stage - if he's the nominee - for a battle of ideologies between him as the ultimate one percenter and President Obama as the champion of the 99%.
While that may make for great TV, it's hardly honest, as President O'banker is about as 1% elitist as one can get without actually admitting to it.
Dow 12,625.19, +46.24 (0.37%)
NASDAQ 2,788.33, +18.62 (0.67%)
S&P 500 1,314.50, +6.46 (0.49%)
NYSE Composite 7,819.36, +52.41 (0.67%)
NASDAQ Volume 1,974,862,250
NYSE Volume 4,442,754,500
Combined NYSE & NASDAQ Advance - Decline: 3454-2119
Combined NYSE & NASDAQ New highs - New lows: 261-26 (yes, 10-1 is a bit extreme)
WTI crude oil: 100.39, -0.20
Gold: 1,654.50, -5.40
Silver: 30.51, -0.03
This is particularly poignant in the midst of the current Wall Street "melt-up" which has been ongoing since the middle of December and shows little sign of letting up.
While corporate earnings continue to flow, the latest being from two big banks, Morgan Stanley (MS) and Bank of America (BAC), both of which met or exceeded expectations, though the accounting tricks and tactics employed by the mega-banks leave much to the imagination.
As far as Bank of America is concerned, their beat of expectations of 13 cents per share with a reported 15 cents included a bunch of one-time items and useful reserve and loan loss calculations, embedded deep within their monstrous 110-page quarterly report. Despite the discrepancies in the quarterly, Bank of America bounced higher again today, closing at 6.95, a 15 cent gain, after popping above $7 per share for the first time since Warren Buffett invested $5 billion in the bank in early 2011.
Morgan Stanley actually lost money for the quarter, but lost quite a bit less than expected. The firm’s net loss was $250 million, or 15 cents a share, compared with profit of $836 million, or 41 cents, a year earlier. The consensus expectation was for a loss of 57 cents per share. Traders took the data in stride, boosting the stock to its highest level since October. In this case, even P.T. Barnum would be proud, noting that "there's a sucker born every minute." All the better for momentum chasers in this beat-up financial.
There was a dose of economic data that surprised some and annoyed others, notably bearish investors. Initial unemployment claims came in at a sparkling 352,000 - the lowest number in months - after last week's upwardly revised 402,000. The unemployment figures continue to be a topic of some debate, in that the "seasonally-adjusted" model used by the BLS seems to have forgotten that December was holiday season, chock full of part time and temporary hires. Whatever the case, traders seemed less-than-satisfied with the numbers, as the markets began slowly but ground slowly higher through the session.
December CPI came in flat, after yesterday's -0.1% drop in the PPI, sparking fears of "disinflation" (a Federal reserve governor term) or deflation, the bogey man that haunts Fed chairman Ben Benanke.
Housing starts and building permits were flat to lower, though new home builders have been leading this rally, up more than 10% as a group since the first of the year.
How much longer can the rally last? Tomorrow being options expiration, one would think a major sell-off is in the cards for either Friday afternoon or Monday, though, as stated at the top of this piece, rationality is generally not a hallmark of recent rallies.
If you've not already taken part in this wild market ride, it may be a little late. Stocks are getting extremely overbought, as the advance-decline and new highs vs. new lows figures have been telegraphing lately.
Adding to the upside has been the unusually quiet tones coming out of Europe, as opposed to the rather hysterical daily dispatches that typified the latter half of 2011. Nothing's really changed over there, except perception, perhaps. Europe is mostly headed for a recession, which will hit the middle classes, though Greece, in particular, in already in the throes of a fiscal straightjacket which some might say is emulating a full-blown depression. To the Greeks, most of europe is saying "pay up," to which the Greeks respond with "shut up" or some other suitable and more demonstrable phraseology.
The long and short of it, if one is of the camp that believes a strong stock market is a proxy for a strong general economy, 2012 is shaping up to be a banner year or at least a good effort at kicking the can of economic woes down the road until after the elections in November.
Throwing a bit of cold water on the rally parade, as expected, Eastman Kodak (EK) filed for bankruptcy protection today, and Republican presidential nominee hopeful Mitt Romney has been found to have a number of accounts and holdings in off-shore banks, notably in the Cayman Islands, setting the stage - if he's the nominee - for a battle of ideologies between him as the ultimate one percenter and President Obama as the champion of the 99%.
While that may make for great TV, it's hardly honest, as President O'banker is about as 1% elitist as one can get without actually admitting to it.
Dow 12,625.19, +46.24 (0.37%)
NASDAQ 2,788.33, +18.62 (0.67%)
S&P 500 1,314.50, +6.46 (0.49%)
NYSE Composite 7,819.36, +52.41 (0.67%)
NASDAQ Volume 1,974,862,250
NYSE Volume 4,442,754,500
Combined NYSE & NASDAQ Advance - Decline: 3454-2119
Combined NYSE & NASDAQ New highs - New lows: 261-26 (yes, 10-1 is a bit extreme)
WTI crude oil: 100.39, -0.20
Gold: 1,654.50, -5.40
Silver: 30.51, -0.03
Tuesday, January 17, 2012
New Year Rally Continues, But Financial Stocks Fade
Another three-day weekend has passed, another European crisis barely averted and, lo and behold, another Tuesday rally fueled by speculation in pre-market futures. To say that US markets - and, by inference, global markets - are being propped up on false hope and denial of reality would be a gross understatement.
A little history suffices to show that last year, January was a positive one for the markets, with the S&P 500 gaining 29 points, pointing the way toward - according to the mighty January Barometer - a solid year, and we all know how that turned out, with the market's absolute top occurring in late April.
This is a replay of just about the same scenario with one big difference. Stocks are probably a little better than fairly valued, but corporate profits are not expected to set new records (after 2011's record earnings). Rather, competition and currency exchange concerns will likely limit what most of the big, multinational firms will make in 2012, to say nothing of the impending default of Greece and the recent downgrading of about half of the nations comprising the Eurozone.
Here in the US, focus will be on the presidential race, which looks exceedingly like it will come down to a very disturbing and divisive fight between the incumbent Democrat, Barack Obama and the Republican Mitt Romney, who looks quite a bit like what "occupy" movement supporters deride as a fat-cat, political and capitalist sociopath.
In essence and for the practical purposes of governing, Romney's not much different from Obama, leaving Americans with the usual unpalatable choice of the lesser of two evils. The press, for the fourth presidential election in a row, will hail this as "the most important election of your life," which, of course, it certainly is not, though the amount of money pumped into the campaigns by super-PACs will be the stuff of legend.
With any luck, the preponderance of political advertising will result in more Americans revisiting old habits and older friends, and tuning out the mainstream propaganda machine full time.
As for this current vapor-rally on minimal volume (a tell-tale sign of weakness), it may just come to an abrupt end with the expiration of options on Friday, or, being that the powers behind the Ponzi fiat money scheme need to keep up appearances, it could just saunter along for a few more months. Since the Republicans in congress wish to unseat Mr. Obama at almost all costs, expect gridlock in Washington for the rest of 2012, though geo-political events (think Europe, Iran and the Middle East) could certainly send stocks spiraling lower, just as they did in late 2007 and through much of 2008.
Some interesting macro-economic facts came to light over the Martin Luther King holiday weekend, such as ratings agency Standard & Poor's commencing to downgrade the EU's main liquidity funding mechanism, the ESFS, a notch, from AAA to AA+, putting even more stress on the Continent's debt issues.
As mentioned Friday, talks about restructuring private Greek debt have fallen apart and an outright default before March 20 appears to be all but certain.
Back in the US, the average age of vehicles on the road has reached a new high of 10.8 years as strapped consumers delay the purchase of new cars indefinitely. So much for the government's bailout of GM and Chrysler. Shares of General Motors are up about four points this year, reaching 24.20 as of today, but are still well below the IPO price of $35 per share.
Two of the nation's largest banks issued 4th quarter earnings reports prior to the opening bell. Wells-Fargo (WFC), now the largest bank in the US by market cap, met expectations, but Citigroup missed badly, with reported earnings of 38 cents a share, missing rosy estimates of 51 cents per share and well below last year's fourth quarter of 43 cents. Shares of Citigroup were bashed, losing 2.53, to 28.22, a loss of more than eight percent.
Today's market was punctuated within the first 20 minutes of trading, hitting the highs for the day, with the Dow up 161 points before the day-long selling commenced. Optimistic gapped-up opens followed by floundering into a weak close is a sure sign of an over-hyped market, though the Dow has sported gains in six of ten sessions this year.
Bull markets don't last forever, especially secular bulls, such as this one, which has persisted since the bottom in March of 2009. The mini corrections in the Spring and again in August haven't dampened investor sentiment much, though weak volume remains a persistent feature. Eventually, reality, such as Citi's poor showing today, will take hold of even the most stubborn bulls... and their money.
Dow 12,482.07, +60.01 (0.48%)
NASDAQ 2,728.08, +17.41 (0.64%)
S&P 500 1,293.67, +4.58 (0.36%)
NYSE Composite 7,670.47, +38.44 (0.50%)
NASDAQ Volume 1,819,276,375
NYSE Volume 3,883,768,500
Combined NYSE & NASDAQ Advance - Decline: 3262-2341
Combined NYSE & NASDAQ New highs - New lows: 217-46
WTI crude oil: 100.71, +2.01
Gold: 1,655.60, +24.80
Silver: 30.14, +0.61
A little history suffices to show that last year, January was a positive one for the markets, with the S&P 500 gaining 29 points, pointing the way toward - according to the mighty January Barometer - a solid year, and we all know how that turned out, with the market's absolute top occurring in late April.
This is a replay of just about the same scenario with one big difference. Stocks are probably a little better than fairly valued, but corporate profits are not expected to set new records (after 2011's record earnings). Rather, competition and currency exchange concerns will likely limit what most of the big, multinational firms will make in 2012, to say nothing of the impending default of Greece and the recent downgrading of about half of the nations comprising the Eurozone.
Here in the US, focus will be on the presidential race, which looks exceedingly like it will come down to a very disturbing and divisive fight between the incumbent Democrat, Barack Obama and the Republican Mitt Romney, who looks quite a bit like what "occupy" movement supporters deride as a fat-cat, political and capitalist sociopath.
In essence and for the practical purposes of governing, Romney's not much different from Obama, leaving Americans with the usual unpalatable choice of the lesser of two evils. The press, for the fourth presidential election in a row, will hail this as "the most important election of your life," which, of course, it certainly is not, though the amount of money pumped into the campaigns by super-PACs will be the stuff of legend.
With any luck, the preponderance of political advertising will result in more Americans revisiting old habits and older friends, and tuning out the mainstream propaganda machine full time.
As for this current vapor-rally on minimal volume (a tell-tale sign of weakness), it may just come to an abrupt end with the expiration of options on Friday, or, being that the powers behind the Ponzi fiat money scheme need to keep up appearances, it could just saunter along for a few more months. Since the Republicans in congress wish to unseat Mr. Obama at almost all costs, expect gridlock in Washington for the rest of 2012, though geo-political events (think Europe, Iran and the Middle East) could certainly send stocks spiraling lower, just as they did in late 2007 and through much of 2008.
Some interesting macro-economic facts came to light over the Martin Luther King holiday weekend, such as ratings agency Standard & Poor's commencing to downgrade the EU's main liquidity funding mechanism, the ESFS, a notch, from AAA to AA+, putting even more stress on the Continent's debt issues.
As mentioned Friday, talks about restructuring private Greek debt have fallen apart and an outright default before March 20 appears to be all but certain.
Back in the US, the average age of vehicles on the road has reached a new high of 10.8 years as strapped consumers delay the purchase of new cars indefinitely. So much for the government's bailout of GM and Chrysler. Shares of General Motors are up about four points this year, reaching 24.20 as of today, but are still well below the IPO price of $35 per share.
Two of the nation's largest banks issued 4th quarter earnings reports prior to the opening bell. Wells-Fargo (WFC), now the largest bank in the US by market cap, met expectations, but Citigroup missed badly, with reported earnings of 38 cents a share, missing rosy estimates of 51 cents per share and well below last year's fourth quarter of 43 cents. Shares of Citigroup were bashed, losing 2.53, to 28.22, a loss of more than eight percent.
Today's market was punctuated within the first 20 minutes of trading, hitting the highs for the day, with the Dow up 161 points before the day-long selling commenced. Optimistic gapped-up opens followed by floundering into a weak close is a sure sign of an over-hyped market, though the Dow has sported gains in six of ten sessions this year.
Bull markets don't last forever, especially secular bulls, such as this one, which has persisted since the bottom in March of 2009. The mini corrections in the Spring and again in August haven't dampened investor sentiment much, though weak volume remains a persistent feature. Eventually, reality, such as Citi's poor showing today, will take hold of even the most stubborn bulls... and their money.
Dow 12,482.07, +60.01 (0.48%)
NASDAQ 2,728.08, +17.41 (0.64%)
S&P 500 1,293.67, +4.58 (0.36%)
NYSE Composite 7,670.47, +38.44 (0.50%)
NASDAQ Volume 1,819,276,375
NYSE Volume 3,883,768,500
Combined NYSE & NASDAQ Advance - Decline: 3262-2341
Combined NYSE & NASDAQ New highs - New lows: 217-46
WTI crude oil: 100.71, +2.01
Gold: 1,655.60, +24.80
Silver: 30.14, +0.61
Wednesday, January 11, 2012
No News, No Earnings, No Data, No Volume Means Nothing Much for Stocks
The Wall Street HTF machines must have been cranked up to maximum momentum on yet another day without any notable news or data, because stocks, after an early dive into the red, continued an inexorable advance throughout the session, pushing all major indices to positive or flat closes.
Despite Alcoa (AA) announcing in-line earnings on Monday, there haven't been any companies of import releasing full year and 4th quarter results this week. That should all change next week when the market will be inundated with quarterly and year-end reports from a plethora of firms, but so far this week, the markets have had little to move on in either direction.
Instead of pouring into or out of positions, as is often the case in the first few weeks of a new year, traders have been stuck in neutral the past five sessions, and the rest of the week doesn't offer much in the way of market-moving events or news.
The fed released its beige book, detailing what everybody already knows: that the US economy is limping along, unemployment remains a stubborn problem, housing is still weak and December retail was something of a non-event. Even word from the almighty Federal Reserve did nothing to move stocks.
Down 63 points shortly after 10:00 am ET, the Dow finally pushed into positive territory in the final 20 minutes of trading before falling back to red at the close. Leading the slow surge, the NASDAQ had been positive most of the session, with the S&P following the Dow's path, finally finishing with a fractional gain.
One notable item not mentioned around the trading posts was the upcoming debacle of another debt ceiling increase, just five months after the congress and president Obama wrangled over raising the ceiling last August. Our brilliant leaders have managed to blow through some $900 billion in fresh debt since then and will need another rise, which was negotiated in the initial bill.
President Obama is set to ask congress for another $1.2 to $1.5 trillion in a matter of days. The congress will have 15 days to decide whether to grant Mr. Obama his wish. Meanwhile, the debt ceiling will be once again breached, and, after appropriate dummy theater, the congress will oblige. The rhetoric should be especially thick this time around, especially with debate on whether to keep the inappropriately-named payroll tax decrease for the remainder of the year. That deal runs out at the end of February.
Political junkies will enjoy the show; the rest of us will entertain emotions from boredom to disgust. Thank God for the NFL playoffs.
Dow 12,449.45, -13.02 (0.10%)
NASDAQ 2,710.76, +8.26 (0.31%)
S&P 500 1,292.48, +0.40 (0.03%)
NYSE Composite 7,662.17, -6.73 (0.09%)
NASDAQ Volume 1,712,712,875
NYSE Volume 3,965,303,250
Combined NYSE & NASDAQ Advance - Decline: 3208-2391
Combined NYSE & NASDAQ New highs - New lows: 112-36
WTI crude oil: 101.73, -0.51
Gold: 1,639.60, +8.10
Silver: 29.89, +0.08
Despite Alcoa (AA) announcing in-line earnings on Monday, there haven't been any companies of import releasing full year and 4th quarter results this week. That should all change next week when the market will be inundated with quarterly and year-end reports from a plethora of firms, but so far this week, the markets have had little to move on in either direction.
Instead of pouring into or out of positions, as is often the case in the first few weeks of a new year, traders have been stuck in neutral the past five sessions, and the rest of the week doesn't offer much in the way of market-moving events or news.
The fed released its beige book, detailing what everybody already knows: that the US economy is limping along, unemployment remains a stubborn problem, housing is still weak and December retail was something of a non-event. Even word from the almighty Federal Reserve did nothing to move stocks.
Down 63 points shortly after 10:00 am ET, the Dow finally pushed into positive territory in the final 20 minutes of trading before falling back to red at the close. Leading the slow surge, the NASDAQ had been positive most of the session, with the S&P following the Dow's path, finally finishing with a fractional gain.
One notable item not mentioned around the trading posts was the upcoming debacle of another debt ceiling increase, just five months after the congress and president Obama wrangled over raising the ceiling last August. Our brilliant leaders have managed to blow through some $900 billion in fresh debt since then and will need another rise, which was negotiated in the initial bill.
President Obama is set to ask congress for another $1.2 to $1.5 trillion in a matter of days. The congress will have 15 days to decide whether to grant Mr. Obama his wish. Meanwhile, the debt ceiling will be once again breached, and, after appropriate dummy theater, the congress will oblige. The rhetoric should be especially thick this time around, especially with debate on whether to keep the inappropriately-named payroll tax decrease for the remainder of the year. That deal runs out at the end of February.
Political junkies will enjoy the show; the rest of us will entertain emotions from boredom to disgust. Thank God for the NFL playoffs.
Dow 12,449.45, -13.02 (0.10%)
NASDAQ 2,710.76, +8.26 (0.31%)
S&P 500 1,292.48, +0.40 (0.03%)
NYSE Composite 7,662.17, -6.73 (0.09%)
NASDAQ Volume 1,712,712,875
NYSE Volume 3,965,303,250
Combined NYSE & NASDAQ Advance - Decline: 3208-2391
Combined NYSE & NASDAQ New highs - New lows: 112-36
WTI crude oil: 101.73, -0.51
Gold: 1,639.60, +8.10
Silver: 29.89, +0.08
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