On Black Friday, Wall Street Saw Red

Stocks finished the week with gains, even though the shortened session on Friday saw widespread declines.

While shoppers were out at retail locales seeking the big deals, Wall Street types were squaring their books in an attempt to get out ahead of what looks to be disconcerting news on the US-China trade front. Issues in the ongoing trade and tariff tete-a-tete have expanded beyond economics, spilling over into the political realm as Washington passed - and the president signed - resolutions in support of the Hong Kong protestors and human rights, roiling top Chinese officials who issued sharp rebukes on Thanksgiving Thursday.

Hong Kong's reliance upon and distancing from the Chinese political apparatus has served as a launching board for US rhetoric on freedom and rights, the interjection of which can only make what were already-tense negotiations even more complicated. US-China relations now overshadows all other conceptual and practical conditions and Wall Street has taken notice.

Shoppers snapped up $7.4 billion worth of online holiday goodies on Black Friday and are poised to spend another $9.4 billion on Cyber Monday. The numbers for online spending were records. Including Thanksgiving Day sales, online retailing grossed $11.6 billion.

Figures for brick and mortar retailers were not readily available, and may be somewhat blurred by innovations such as "buy online, pick up in store," an outreach by physical stores to combine the best of online shopping and foot traffic to stores.

It's shaping up to be a solid holiday shopping season, unsurprising, due to the robust economy, low unemployment, and the rising stock market. Consumers are not only feeling buoyant, the actually have more money in their wallets from the tax cuts made law in 2017 and implemented in 2018 and 2019.

Otherwise, the week of Thanksgiving and Black Friday was notable only for Friday's slide in the stock market. Normally, equity buyers rush in on a wave of enthusiasm. This year, however, the trade situation with China has cast a long shadow on any enthusiasm.

That dour mood may turn out to be misplaced. While the Chinese continue to foot-drag and seek rollbacks of existing tariffs before signing onto any phase one deal, American negotiators stick with the hard line established early on by President Trump. His contentions that China needs our dollars more than we need their goods, and that China has taken advantage of weaknesses by his predecessors for decades continue to guide trade policy. At the end of any deal, there has to be appreciation for not necessarily an even playing field, but one which is not slanted East. The president has made it clear that he will not acquiesce to Chinese demands or bullying and that steadfastness has kept the two countries from reaching even the most rudimentary agreements.

The likelihood of the trade war continuing through the Democrat party primaries and into the general election season are strong. China appears to be playing the long game, believing that Trump may not win re-election and that they will get a better shake from an incoming Democrat president.

Whistling in the wind is what trade negotiators are calling China's hopeful stand-offishness. Even while impeachment is being bandied about the House of Representatives, the White House sees it as no real threat since Republicans in the Senate would be highly unlikely to find Trump guilty in an impeachment trial, even if the House gins up watered-down articles of impeachment.

The entire impeachment fiasco has been nothing more than an annoyance for the White House and President Trump. Meanwhile, public sentiment for removal from office has peaked and is falling. The latest polls find fewer people engaged on the impeachment issue as the numbers in favor of impeachment have begun to slide.

In the House this week there will be more grandstanding by Democrats, whining by Republicans, and less interest by te American people, whose approval of congress is so low it hardly registers a positive number. Americans would like their government to actually do something constructive on anything outside of politics, health care being the most-often cited issue that warrants attention, along with immigration.

Flailing about and waving hands about "high crimes and misdemeanors" isn't cutting it for huge swaths of the American electorate, especially when the "evidence" produced by the anti-Trump forces consists largely of hearsay, innuendo, third party opinions, and actions that aren't even considered criminal.

Insistence by Democrats to pursue impeachment of Mr. Trump may turn out to be one of the worst political strategies ever devised, by some of the most disingenuous politicians ever to have disgraced the halls of congress.

At the Close, Friday, November 29, 2019:
Dow Jones Industrial Average: 28,051.41, -112.59 (-0.40%)
NASDAQ: 8,665.47, -39.70 (-0.46%)
S&P 500: 3,140.98, -12.65 (-0.40%)
NYSE Composite: 13,545.21, -62.39 (-0.46%)

For the Week:
Dow: +175.79 (+0.63%)
NASDAQ: +145.59 (+1.71%)
S&P 500: +30.69 (+0.99%)
NYSE Composite: +104.26 (+0.78%)

China Balks At US Legislation; Consumers Gear Up for Black Friday, Holiday Shopping

Wednesday saw new all-time highs all around, except the lagging NYSE Composite, which finished the day just 30 points below its record close of 13,637.02, marked on January 26, 2018.

Undeterred by potential blowback on trade negotiations due to President Trump's signing of two bills passed almost unanimously by both houses of congress, investors held steady. The bills were aimed at China's leadership, citing US support for the protesters in Hong Kong and making reference to "human rights."

China's official reaction was slow at first, but escalated on Thursday, when the US ambassador was summoned to lodge official protest by China's government and throngs of protesters took to the streets of Hong Kong to give thanks to the United States.

Since US markets were closed on Thursday for the Thanksgiving Day holiday, China's sharp rebuke will be felt on Friday's trading. Futures point to a modestly lower open as the bumpy ride toward ending the trade war between China and the US continues.

Friday's session will be shorted, with markets closing at 1:00 pm ET.

Meanwhile, shoppers have been snapping up deals online and at various retailers who sought to get the jump on Black Friday by offering deals on popular electronics, toys, and clothing as early as Wednesday. Stores may be under pressure to log high sales volumes on Black Friday and Cyber Monday (next week) since the calendar this year has allowed for the shortest possible holiday shopping season, a mere 26 days.

Since the first of November was a Friday, and Thanksgiving is always the fourth Thursday of November, this year's shopping season will be much shorter than last year's, when Thanksgiving was at its earliest possible date, the 22nd of November. A full six days shorter, this holiday shopping spree may make same store sales on a year over year basis are likely to fall short of targets for many retailers unless door-busting deals and heavy advertising can draw shoppers into stores.

Complicating matters further is Christmas falling on a Wednesday, making the last two shopping days a Monday and Tuesday, normally working days for most Americans.

With the economy in excellent shape, the short shopping season may not be much of an issue for adroit retailers, as spending per consumer is expected to be higher than last year. It remains to be seen whether consumers, the bulwark of the US economy, will respond with record-setting spending or whether relentless talk of a coming recession or the pending impeachment of President Trump will have a negative effect.

One thing is certain: Americans love to shop. It's practically the national pastime.

At the Close, Wednesday, November 27, 2019:
Dow Jones Industrial Average: 28,164.00, +42.32 (+0.15%)
NASDAQ: 8,705.17, +57.24 (+0.66%)
S&P 500: 3,153.63, +13.11 (+0.42%)
NYSE Composite: 13,607.62, +47.91 (+0.35%)

Monday Push-ups; How the Dow Jones Industrial Average Makes New Highs

Players, speculators and people with more money than they know what to do with stepped up on Monday to buy the dip created when all four major indices closed in the red last week.

Such action is like stepping on a pile of dog poo, wiping it off and stepping into it again. The insanity of investors apparently has no bounds because of ever-increasing liquidity created by the Federal Reserve, the seeming limitlessness of stock buybacks by hundreds of corporations and the hunt for yield by fund managers.

This activity, while cheered on by the financial press, the mainstream press and every other value-clueless pundit of the wonders of free market capitalism, cannot continue without some reckoning, not perhaps a final one, but at least a corrective phase. What happened in October and December of last year has apparently been forgotten, as investors piled into stocks with abandon in this holiday-shortened trading week.

Markets will be closed on Thanksgiving Thursday and close early (1:00 pm ET) on Black Friday, the day celebrated as an orgy of spending and holiday shopping, replete with door-busting deals and the associated mayhem and violence that stems from hundreds of people trying to get into stores earliest to grab oversized TVs, plastic junk from the Republic of China, and other goods marked as low as 50-80% off.

Winning days on Wall Street have - over the course of the last 10 years or so - become something of a yawn-fest, as stocks breached record highs on numerous occasions every year since the Great Financial Crisis (GFC) of 2008. Higher stock prices are to be expected. They are the norm, but nobody wants to actually look at what they're buying, only the gains they're making. It's almost as if the companies in which people are investing will return massive profits for 100 years or longer, or that the 30 stocks comprising the Dow Industrials will never change (they do, and frequently).

Beginning with AIG being dropped from the Dow in September of 2008, 10 companies have been either ousted, merged and/or replaced in the world's leading index. That's a third of the companies. No wonder it's at record highs. The bad companies - the latest being General Electric (GE) - are replaced with companies with better growth potential and the capacity for higher share prices. It would be like lowering the height of the basket a few inches every year for LeBron James. Upon reaching 40 years of age, the NBA superstar could dunk without jumping or even reaching up very high.

For today, the NBA basket is still 10 feet off the floor, but the mastery of financial deception belongs in those goal-post movers on the executive board of Dow Jones.

At the Close, Monday, November 25, 2019:
Dow Jones Industrial Average: 28,066.47, +190.85 (+0.68%)
NASDAQ: 8,632.49, +112.60 (+1.32%)
S&P 500: 3,133.64, +23.35 (+0.75%)
NYSE Composite: 13,532.89, +91.94 (+0.68%)

Thanksgiving Is Not For Giving Money To Brokers; Dow Slides Into Weakened Holiday Close

All the stocks you bought last year are worth less this year.

Big deal, right? You still have the same stocks and they'll come back. The stock market always goes higher.

That seems to be the common wisdom, or at least a salve for wounds incurred during the recent downturn, and such thinking is especially appropriate for the millions of small investors who have their money locked up in 401k plans, IRAs or other retirement or long-range investment vehicles. These folks aren't as nimble nor as knowledgeable as the pros on Wall Street or even their local corner store stock broker. They're stuck. They're what's known in the industry as bag-holders, and, as mentioned above, there are millions of them.

The way average consumers - as investors, per se - are treated by the large funds and brokerages who manage their money is tantamount to a skimming operation, not unlike the protection rackets made famous by mob bosses from the 20s, 30s and 40s.

You give the fund your money, and they make sure nothing bad happens to it, suggesting that they will invest it wisely, and, for that privilege, you pay them a fee. If things go wrong, and your money diminishes, your account balance declines, the fund is not held responsible. Too bad. Tough break. "We don't control the market," they'll tell you.

The willingness with which people turn over hard-earned money to managers to invest is a concept that has baffled and befuddled psychologists and entrepreneurs for time immemorial. The generations who were adults during the ravages of the Great Depression - though most of them have passed away - and anyone who lost money in the dotcom bust or the Great Financial Crisis (GFC) of 2007-09, have been rightfully skeptical of the suggestions and promises made by the hawkers of stocks and bonds, the skimmers of fees, the suit-and-tie, computer-aided experts who are allowed to handle everybody else's money.

Does the small investor ever ponder what the broker does with his money? Is he or she investing in the same stocks as the general public he or she is serving? That question is seldom asked, and even more infrequently, answered. And when stocks start to slide, what does the broker do? Is he or she holding steady, as the clients are told to do, or has he or she jumped ship, pulling all the profits out of the stocks he or she owns? These are interesting questions, which, unfortunately, are not required to be answered by individual brokers or their companies. The fiduciary aspects of the brokerage business leaves much to be desired in terms of consumer protection. In brief, consumers are NOT protected and never have been. When one hands over money to a broker, they also give the right for the broker to do whatever he or she wishes with those funds.

This is not an indictment of any broker or investment house. There are many good ones, more good than bad, by a long shot. However, they all share a few common traits: they routinely under-perform the general indices (the most-often quoted statistic being behind the S&P), and, they have zero accountability when they lose money for their clients.

So, this Thanksgiving, be thankful you have money that you can spread around for brokers to manage for you, because, apparently, you're not confident enough nor smart enough to manage it yourself. And then you pay taxes, if you have any gains.

Now, to those uppity markets...

Stocks were floating along a sugar high on the day before Thanksgiving until the rush of a dead-cat rally wore off around 2:00 pm ET., and in an especially large manner on the Dow in the final hour of trading (by this time, your broker was already over the river and through the woods, on his way to Grandmother's house).

The Dow dropped 200 points in those final two hours of trading, the bulk of it (185 points) in the final hour. The other indices lost ground, though not to the degree that the Dow Industrials slumped. A lot of the loss was in Apple, the stock that has been largely blamed for Tuesday's selling.

Finally, the Dow ended with a loss of less than one point. Ouch. Stocks will be on sale again on Black Friday, in a shortened session which ends at 1:00 pm ET.

Happy Thanksgiving!

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98
11/2/18	25,270.83	-109.91	+155.07
11/5/18	25,461.70	+190.87	+345.94
11/6/18	25,635.01	+173.31	+519.25
11/7/18	26,180.30	+545.29	+1064.54
11/8/18	26,191.22	+10.92	+1075.46
11/9/18	25,989.30	-201.92	+873.54
11/12/18	25,387.18	-602.12	+271.42
11/13/18	25,286.49	-100.69	+170.27
11/14/18	25,080.50	-205.99	-35.72
11/15/18	25,289.27	+208.77	+173.05
11/16/18	25,413.22	+123.95	+297.00
11/19/18	25,017.44	-395.78	-98.78
11/20/18	24,465.64	-551.80	-650.58
11/21/18	24,464.69	-0.95	-651.53

At the Close, Wednesday, November 21, 2018:
Dow Jones Industrial Average: 24,464.69, -0.95 (0.00%)
NASDAQ: 6,972.25, +63.43 (+0.92%)
S&P 500: 2,649.93, +8.04 (+0.30%)
NYSE Composite: 12,123.34, +74.69 (+0.62%)

WEEKEND WRAP: As Mid-Terms Approach, Stocks Gain, Volatility Remains

As October turned to November, volatility persisted with markets gyrating wildly, even as non-farm payroll data came in ahead of expectations and the US mid-term elections (Tuesday, November 6) approached.

Things looked like they were slipping away Friday afternoon, as the Dow registered a loss of 292 points approaching 2:30 pm ET. Near the lows of the day, out of the blue, buyers appeared suddenly, boosting the Dow 198 points in three minutes from 2:26 pm to 2:29 pm ET. A move like that had to be courtesy of the PPT, or, possibly massive, coordinated central bank buying (pretty much the same thing), because all the indices leapt higher at precisely the same time.

In case you think that's fishy, consider what would have happened if the Fed and their central bank cronies had NOT done such things over the past ten years. The world would be a far different place and stocks like Apple wouldn't have the absurd valuation of nearly a trillion dollars. The market's been rigged for a long time, and it's not going to change anytime soon.

Whether or not one ascribes to conspiracy theories, the undeniable truth lies in the nearly ten years of market gains and the week past was another example of how Wall Street manages to play the numbers like Vladimir Horowitz on a Steinway grand piano.

The week began and ended with losses, bracketing three days of upside moves, the result a winning week for stocks, led by a 2.88% move on the NYSE Composite. The other indices were all higher by more than two percent. The week was the second of the last six in which stocks have ended positively.

While the moves were dramatic, only the Dow Industrials managed to close above their 200-day moving average and the 40-week moving average. The other majors remain below key levels and still appear vulnerable. The mid-term elections may trigger a knee-jerk reaction by Wall Street, though any such move is unlikely to be long-lasting. What is apparent is that some big money is moving out of stocks, as distribution has been an obvious element on any upside move. Dip-buyers may have moved markets higher this week, but every rally has been met with selling, indicating a trimming of positions.

Amid the whipsawing of stocks, bonds were selling off, with the 10-year note ending the week at 3.21 and the 30-year long bond yielding 3.46%, the highest in more than five years (June 2014).

The until story is in oil. Both Brent and WTI crude have been losing pricing power for the last six weeks, with WTI settling in the low $60s. The persistent declines and current price of $62.78/barrel is resulting in lower prices at the pump, with the US national average below $2.75/gallon, the lowest level since April of this year.

Lower oil and gas prices are usually a boost for the general economy, as consumers end up with more disposable cash after filling up their vehicles. It's also a boon for homeowners, who see lower fuel costs during heating months.

The big event this week will be Tuesday's mid-term elections. The general thinking is that if Republicans can hold the House and Senate, it will be seen as a referendum on President Trump's first two years in office. The Democrats are counting on a change in the House, with as many as 100 races in the toss-up category. A win in the House for Dems would be seen as a win, though their chances of taking control of the Senate are seen as slim. If such a scenario occurs, the result will be nothing but gridlock in Washington, which is usually a good thing for Wall Street.

Politics aside, the current conditions call for caution. There has been no sign of volatility easing, so the triple-digit daily moves on the Dow and NASDAQ are likely to continue until Thanksgiving at least.

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98
11/2/18	25,270.83	-109.91	+155.07

At the Close, Friday, November 2, 2018:
Dow Jones Industrial Average: 25,270.83, -109.91 (-0.43%)
NASDAQ: 7,356.99, -77.06 (-1.04%)
S&P 500: 2,723.06, -17.31 (-0.63%)
NYSE Composite: 12,321.80, -34.70 (-0.28%)

For the Week:
Dow: +582.52 (+2.36%)
NASDAQ: +189.78 (+2.65%)
S&P 500: +64.37 (+2.42%)
NYSE Composite: +344.85 (+2.88%)

Black Friday Delivers; Wall Street Reaction Upcoming

Apparently, Black Friday 2017 was a mammoth hit, resulting in reported record consumer spending and a record day for firearms background checks.

According to Reuters:

U.S. retailers raked in a record $7.9 billion in online sales on Black Friday and Thanksgiving, up 17.9 percent from a year ago, according to Adobe Analytics, which measures transactions at the largest 100 U.S. web retailers, on Saturday.

Wall Street, which closed early on Friday, didn't have the news in hand, it being too early for reaction, but closed modestly higher in the shortened session.

Monday is shaping up as a volatile day, with plenty of crosswinds from the political front and economic data from China and Europe whipsawing futures prior to the opening bell in New York.

For the week as a whole, stocks put in a stellar performance. The NASDAQ and S&P 500 each closed at record highs on Friday.

At the Close, Friday, November 24, 2017:
Dow: 23,557.99, +31.81 (+0.14%)
NASDAQ: 6,889.16, +21.7988 (+0.3174%)
S&P 500: 2,602.42, +5.34 (+0.21%)
NYSE Composite: 12,421.93, +31.10 (+0.25%)

For the Week:
Dow: +199.75 (+0.86%)
NASDAQ: +106.37 (+1.57%)
S&P 500: +23.57 (+0.91%)
NYSE Composite: +119.04 (+0.97%)

Stocks Post More Gains Prior to Thanksgiving Holiday

The S&P and Dow set new all-time closing marks on Wednesday and the NASDAQ is approaching levels not seen since the dotcom boom (and bust), but, according to just about anyone who appears on CNBC or Bloomberg, there is no bubble in equities.

And, the Fed buying up $85 billion in bonds every month is normal. Gold stuck around $1250 is normal.

The p/e of Facebook (FB) is 77. Nope, no bubble there. Carry on.

Happy Thanksgiving.

The markets are open until 1:00 pm ET on Black Friday, which is usually a big ramp-up day on low volume, so sharpen up your day-trading skills and make some easy moolah while everyone else is out shopping.

Better get bitcoin. If you don't know what bitcoin is, you'd be doing yourself a favor to find out.

DOW 16,097.33, +24.53 (+0.15%)
NASDAQ 4,044.75, +27.00 (+0.67%)
S&P 1,807.23, +4.48 (+0.25%)
10-Yr Note 99.90, -0.20 (-0.20%)
NASDAQ Volume 1.33 Bil
NYSE Volume 2.36 Bil
Combined NYSE & NASDAQ Advance - Decline: 3691-1937
Combined NYSE & NASDAQ New highs - New lows: 469-55
WTI crude oil: 92.30, -1.38
Gold: 1,237.80, -3.60
Silver: 19.63, -0.215
Corn: 426.50, 1.75

Stocks Get Pre-Holiday Bounce on Israel-Gaza Truce

Looking as hard as possible for positive news upon which to launch a rally, the Wall Street casino got what it wanted from US Secretary of State, Hillary Clinton, who brokered a truce in the ongoing warfare between the state of Israel and militants in the Gaza Strip.

Announced just after noon Eastern Time, the truce was to begin at 2:00 pm ET, or roughly 9:00 pm Tel Aviv time.

How long the truce will remain n force is anybody's guess. The conflict in the Palestinian area of the Middle East has been going on for as long as most of us can remember, so whatever is achieved will be short-term at best, just like almost everything else these days, a matter of how far down a given road one can kick a can.

Outside the news that Palestinians and Israelis won't be trying to kill each other overtly for a few days, there was little going on to make investors optimistic.

Hostess, which had been in bankruptcy and was the recent victim of an ill-advised strike by the baker's union, went through a day of mediation and returned to court, where the judge signed off on liquidation of the company that used to make Ho-Hos, Twinkies, Ding-Dongs and assorted junk foods that have contributed in no small way to the epidemic of diabetes in this country.

Probably, it's for the good of the country - and fata$$es worldwide - that the company goes under.

Looking ahead, there's a half-day session on Friday, following the Thanksgiving holiday, which usually results in an eventually meaningless Black Friday rally as millions of misguided Americans crowd stores, malls and shopping centers to buy worthless trinkets and electronic gadgets for friends and relatives.

Too bad Christmas will never get here, as the world is scheduled to end on December 22, according to the Incas, or Aztecs, or somebody.

Well, nobody likes a Scrooge at this time of year, so...

Free iPads and Houses for Everybody! And free Twinkies, too!

Happy Thanksgiving. Stay hungry, my friends.

Dow 12,836.89, +48.38 (0.38%)
Nasdaq 2,926.55, +9.87 (0.34%)
S&P 500 1,391.03, +3.22 (0.23%)
NYSE Composite 8,112.20, +25.78 (0.32%)
NYSE Volume 2,647,812,000
Nasdaq Volume 1,406,020,500
Combined NYSE & NASDAQ Advance - Decline: 3577-1856
Combined NYSE & NASDAQ New highs - New lows: 108-71
WTI crude oil: 87.38, +0.63
Gold: 1,728.20, +4.60
Silver: 33.35, +0.42