Oil, Silver Lead Commodity Charge As Stocks Languish

James Comey, Andrew McCabe, Loretta Lynch, and yes, Hillary Clinton were cited in a letter from 11 Republican members of the US House of Representatives requesting the Department of Justice to open criminal investigations on those and others.

While that news was and is still hardly being reported in the mainstream media, these potential criminal referrals may auger a turning point in the quiet coup attempt that has swallowed up most of Washington DC and harassed the Trump White House from day one of his presidency through the Mueller probe.

Interestingly, anything even remotely related to wrongdoing by the president gets front page, bleeding headlines from the usual fake news sources, but, when Democrats or Hillary loyalists are involved, crickets. It will be up to DOJ head Jeff Sessions to determine if investigations and indictments are in order. By the body language of the ongoing swamp fight, he will go after the people who went after President Trump.

On the equity markets, it was a day of churning stocks and stomachs as the Dow Industrials hugged the unchanged line all day, while the NASDAQ and S&P 500 rode higher midday but had weak closes, suggesting that tomorrow and possibly Friday - which is stock options expiration day - may not be so robust. The likely causes of the sudden sluggishness in stocks could have been the Fed's Beige Book, released today, in which a majority of participants expressed concerns over President Trump's proposed tariffs, or the fear that the above-referenced referrals resulting in indictments, earnings that were good but not good enough, or, the relentless rise in the price of oil, which has now been joined by precious metals and other hard commodities, notably copper and zinc.

WTI crude oil, which not six months ago was trading below $50, spiked today beyond $68 per barrel, the highest price in 2 1/2 years. Silver was on fire today, rising well over the $17/ounce mark to finish the day in New York at $17.20. Gold had a more-subdued gain, but copper and zinc have been quietly building momentum over the past few weeks.

A spike in commodity prices signal two things, neither of which are necessarily good for stocks, and they could indeed be bad. First, a surge in commodity prices signals inflation at the base of the economy (also, lumber is, and has been very expensive for a while) and it also notes investors seeking safety, away from riskier assets, like stocks. On the downside for everybody, high oil prices translate to higher prices at the pump, which eventually damages consumers, much like an additional tax. Higher energy costs harm all kinds of industries as well.

If oil continues to rise and pull the rest of the commodity complex along could shape trading in stocks over the coming weeks and months. While its too early to call it a trend, silver has been set to break out for months, and is currently at a 2 1/2 month high.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19
4/5/18	24,505.22	+240.92	+402.11
4/6/18	23,932.76	-572.46	-170.35
4/9/18	23,979.10	+46.34	-134.01
4/10/18	24,407.86	+428.76	+294.66
4/11/18	24,189.45	-218.55	+76.11
4/12/18	24,483.05	+293.60	+369.71
4/13/18	24,360.14	-122.91	+247.80
4/16/18	24,573.04	+212.90	+460.70
4/17/18	24,786.63	+213.59	+674.29
4/18/18	24,748.07	-38.56	+635.73

At the Close, Wednesday, April 18, 2018:
Dow Jones Industrial Average: 24,748.07, -38.56 (-0.16%)
NASDAQ: 7,295.24, +14.14 (+0.19%)
S&P 500: 2,708.64, +2.25 (+0.08%)
NYSE Composite: 12,732.85, +27.09 (+0.21%)

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

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

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

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

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

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

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

Dow Jones Industrial Average March Scorecard:

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

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

Stocks a Little Shaky As Dollar Plummets, Silver, Gold Soar

Chalk this up to various theories of unintended consequences.

Even the brilliant thinkers at the Federal Reserve are unable to explain the strange divergence of bonds and the dollar over the past number of weeks because that's not the way it's supposed to go.

With the Fed becoming more hawkish as they attempt to unwind literally trillions of dollars worth of bonds on their vast balance sheet, interest rates have risen, but the value of the dollar in relation to other major currencies has taken a noticeable hit, not just in the past few weeks, but for the better part of the past year.

The mighty US dollar was beaten like a trailer park hooker, down nearly one percent on the day per the dollar index, which, in the forex universe, is a pretty severe move.

Other currencies were the beneficiaries of the dollar demise, with the British pound up 2.4%, Japan's yen up nearly one percent, and the Aussie dollar gaining 0.90%.

Fueled by Treasury Secretary Steven Mnuchin's comments at the World Economic Forum in Davos, Switzerland, that a weaker dollar was good for US trade, currency pairs were traded with one thing in mind: dollar dumping.

Bonds, however, failed to play along, with the 10-year benchmark unchanged at 2.65% and both long and short-dated maturities moving less than a basis point.

Besides the currencies of nations not the United States, commodities were bid large, with WTI oil futures making another in a series of three-year highs and precious metals continuing a rally that began in December but had recently stalled.

Not so today, as silver led the way with a gain of over three percent, topping out at 17.70, the highest since breaking briefly over $18 per ounce in early September of 2017. From a technical perspective, silver has ripped through a long, declining resistance line dating back to its peak in 2011. A clear breakout holding above $17.50 would be a significant development for the world's most unappreciated asset.

Gold was also well-taken, finishing in New York up $16.80 (1.50%), at $1358.70 the ounce.

Stocks meandered along the unchanged line, ending split, with the Dow higher while the NASDAQ and S&P fell.

With many pension funds chartered to rebalance by month's end, the rapid rise of equities in the early days of the new year may be coming to a quick conclusion. Estimates range from $12 to $120 billion of stocks which must be sold and converted to bonds in the next week. If that's the case, it will take a concerted effort from the central bank cartel (who also may be selling into the weakness) to keep the stock bubble adequately inflated.

If there's a downside other than stocks taking a much-needed shave, it's that any decline in the stock market will be blamed on President Trump and his administration's tough currency and trade policies.

The President is set to address the assemblage at Davos on Friday, concluding this year's fete of economic manipulators and would-be statist social constructionists.

The President is expected to deliver remarks touting America's re-emergence as the world's greatest economic force.

At the Close, Wednesday, January 24, 2018:
Dow: 26,252.12, +41.31 (0.16%)
S&P 500: 2,837.54, -1.59 (-0.06%)
NASDAQ: 7,415.06, -45.23 (-0.61%)

Saudi Purge Prompts Higher Prices for Oil, Precious Metals

Midday Monday, the commodity complex (especially gold, silver and WTI crude oil) took off to the upside, and, by the end of the day, had maintained their newfound levels, oil hitting a nearly three-year high.

This dramatic rise in the price of oil coincides with tumultuous incidents in Saudi Arabia, wherein 11 princes, four ministers and several former ministers have been detained. Some prominent businessman have also been placed on a so-called "no fly" list, as Crown Prince Mohammed bin Salman purges his enemies in an overt effort to considerate power in the kingdom.

Oil rising and Saudi unrest are not isolated events, as neither is the incidental visit by President Trump some months ago and the more recent visit by Trump advisor and son-in-law Jared Kushner.

The Saudis have seen their profits collapse as oil has languished under $50 for years, but the political shakeup may have more to do with overall foreign interests, primarily focused on investments in US companies such as Citibank and Twitter, via the kingdom's sovereign wealth fund.

Silver and gold also rising at the same time during the day as oil confirms that there was coordinated buying of commodities in the futures market. The move was far from insignificant and was presaged by a similar move to the downside in the complex on Friday, prior to the Saudi purge, which went public on Sunday.

With President Trump safely traveling in the Pacific, the intrigue is high that something major is afoot globally, recalling Trump's cryptic tweet a few weeks ago, "the calm before the storm."

It seems that the storm has arrived, at least in the middle East. Whether it continues to lash out across Europe and the United States is, at this time, still conjecture.

As has been demonstrated periodically in the past, commodity futures can be highly volatile and can have profound effects further into the supply and demand chain. If oil continues to rise, it may be time to take any number of protective measures, from purchasing a fuel-efficient vehicle, to selling the dollar, to buying precious metal in anticipation of a major - and long overdue - breakout.

While nothing in the interconnected world of finance operates in a vacuum, stocks could also feel some heat, though the markets have more than ample protection on the downside via central bank stealth and overt (Swiss National Bank) purchases.

It is apparent, however, that given the Saudi purge and the rise in the price of oil, something big is happening.

At the Close, Monday, November 6, 2017:
Dow: 23,548.42, +9.23 (+0.04%)
NASDAQ: 6,786.44, +22.00 (+0.33%)
S&P 500: 2,591.13, +3.29 (+0.13%)
NYSE Composite: 12,400.93, +27.87 (+0.23%)

Stocks Extend Slide Amid Noth Korea, US Bombast, But It's Not Serious

Just in case there needs to be an excuse to sell overpriced stocks, there's always North Korea and the nit-wit leader Kim Jong-un.

A bone fide nutjob, the second child of Kim Jong-il, 33-year-old Jong-un has, in his brief stint as self-appointed supreme leader of North Korea, managed to elevate himself and his gulag of a nation onto the global stage and capture the spotlight with various treats, missile launches, nuclear ambitions and plenty of help from international media seeking sensationalism with which to scare an unsuspecting public.

With bombastic President Trump entering the fray earlier this year, Jong-un has found the perfect Dean Martin straight man for his Jerry Lewis-like antics. A master of the tweet-storm, Trump takes Jong-un seriously, which helps amp up the rhetoric with bold statements and unveiled threats in response to Jong-un's madness. The two could make a fortune on the stages of Las Vegas, if only the State Department would allow Jong-un entry to the US mainland.

What the international war of words has to do with stocks is roughly nothing. Until actual bombs start raining down, the prattling between the leaders of the United States and North Korea is more about television and radio ratings than the prices of Apple, Alphabet, or Alcoa.

However, as stated at the top of this missive, Wall Street specialists are taking the opportunity to dump out of high-flying stocks with near-reckless abandon, sending the major indices to their biggest losses in six months on Thursday, extending the minor losses from Wednesday into something worth noticing.

The selling has also not been limited to just US stocks. As the talk has become more bellicose, the drops on major foreign markets in Europe, Asia, and the Americas have been extended. As of Friday morning in the US, most of Asia and Europe are suffering losses of between one and two percent, though the Nikkei 225 is bucking the trend, down only slightly, nearly flat on the day.

That brings up an interesting topic: if Japan's major market isn't taking this "international nuclear stand-off" with the requisite seriousness, should anybody else?

Probably not, but, this is as good a time as any to take profits. The congress and the president are pretty much on vacation until after Labor Day, but, when they get back to pretending they're doing something constructive, they'll be tackling the ticklish issues of the debt ceiling (along with the attendant threats of shutting down the government - yeah!) and coming up with something resembling a federal budget.

On the latter, hashing out a budget between the Trump administration and the overwhelmingly free-spending congress ought to be some serious comedy. Trump would love to balance the federal budget, but congress intends to drown the nation in even more debt. In case anybody is still keeping score, the federal debt burden stands at close to $20 billion, but, according to the US Debt Clock, it's been stuck there for a few months due to extraordinary measures taken by Treasury and some unforeseen savings on the administration's end.

The congress is not happy about this and will make sure to pile up more debt in the months ahead, making the budget process the go-to, must see entertainment venue for the fall TV season.

So, unless the bottom falls out of the market on Friday, August 11, this is nothing more than profit-taking by people who actually know what they're doing and don't respond in knee-jerk fashion to the pronouncements of madmen and the tweets of presidents.

Meantime, the recent news frame has been good for bonds, gold and silver, all of which have had three straight sessions of unimpeded gains. Gold is approaching $1300 an ounce, the 10-year note is yielding 2.21% and silver broke through $17 per ounce on Thursday. What is not working, still, is oil, which appears unable to pierce the $50/barrel level, which shouldn't be an issue. There remains a massive glut, oversupply, slack demand due to slow economic growth globally and no pricing power anywhere from Riyadh to Russia. Oil should be less than $40 per barrel, though resistance is great, led by the global energy cartel with the help from central bankers who simply cannot stomach any more deflation in anything.

With that, stocks in the US are setting up for another scary open to the downside, but it's probably nothing more than a bump in the road. The real action is still a month away, and even then, the Fed has Wall Street's back. Unless something really serious occurs, there's likely not to be any major turn in the stock markets, though the same cannot be assumed about commodities, bonds, precious metals, or even crypto-currencies like Bitcoin.

At the Close, 8/10/17:
Dow: 21,844.01, -204.69 (-0.93%)
NASDAQ: 6,216.87, -135.46 (-2.13%)
S&P 500: 2,438.21, -35.81 (-1.45%)
NYSE Composite: 11,771.60, -157.87 (-1.32%)

Crude Oil Sinks on Continuing Glut, Slack Demand, Alternatives

While stocks have zigzagged and gone nowhere the first three days of the week, oil has been more consistent in direction, with WTI crude dropping by two dollars a barrel on Wednesday under $46, a nine-month low.

There's been a glut of oil on world markets for some time now, but it's been especially painful to producers since the market riggers lost control in 2015, sending the price from imaginary levels - forced upon the planet by the myth of "peak oil" - around $100 per barrel to where it stands today.

Oil's recent swoon brings up a good question. With all the oil sloshing around and a myriad of factors leading to lessened use of the "fossil fuel," what exactly is fair value for crude?

There are many arguments with which to weigh the answer, whatever that may be, but one element that is undeniable about the current condition, is that producing nations aren't exactly in love with what they're being paid for a barrel of the slippery stuff. That's because many of the producers - OPEC and Middle East nations, primarily - had budgeted for steady sales around the high-water mark of $100/barrel.

Since that price turned out to be completely unsustainable, these countries have had to adjust their spending and programs, leading to some degree of discontent among their citizens. Americans, who benefitted from fracking and shale drilling, have been the biggest beneficiaries, seeing the price of a gallon of gas fall from an average near four dollars to today's prices in the low two dollar range.

One of the largest factors contributing to the glut is purely demographic. Many established economies - Japan, US, Europe - are aging, and older people simply don't drive as much. Add to that the improvements in fuel economy, plus alternatives such as cars which run on natural gas or electricity and he trend becomes more pronounced.

As the price of crude continues under pressure, alternative fuels, such as increased use of coal, solar, and wind in the United States, will only exacerbate the condition.

Back in the good old days of the 70s and 80s, oil used to be under $20 per barrel. Then along came the "peak oil" sham, which sent the price through the roof and consumers to the poorhouse. The true price may or may not be found in the current regime of futures prices, a system that has and probably continues to be gamed, but the real price, taking into account the massive amounts of oil on and off the market, the stagnation of the global economy, and emerging alternatives, is likely to be found at levels well below what it is pinned at today.

Try thinking of oil at about $32-36 per barrel and gasoline at $1.60 and you're probably on the right track.

At the Close, 6/7/17:
Dow: 21,173.69, +37.46 (0.18%)
NASDAQ 6,297.38, +22.32 (0.36%)
S&P 500 2,433.14, +3.81 (0.16%)
NYSE Composite: 11,667.73, -3.73 (-0.03%)

Stocks Down Third Straight Session As NFP Looms

One would assume that a good jobs number on Friday would be good for stocks, but, as the economy goes, the Fed goes against it, with tightening via a raise in the federal funds rate almost a surety if the NFP number for February comes in strong, as suggested by Wednesday's ADP figure of 298,000 new jobs added in the month.

That's the backwardness of the stock market, fueled almost entirely by cheap credit and share repurchases (buybacks) over the past eight years. In fact, today marks the 8th anniversary of the market bottom in 2009, and its been nothing but accommodation by the Fed and happy talk from the press ever since.

Thus, stocks fell for the third straight session and fourth in five days, with the exception of the NASDAQ, where speculators have still not succumbed to the axe of profit-taking.

In a sign that the narrative may be unraveling, WTI crude oil fell sharply on Wednesday, closing under $50 a barrel for the first time since December after another survey showed massive gluts in crude and distillates. This should transfer into good news for drivers as the spring and summer driving months come into focus with lower prices at the pump.

Oil has experienced a glut of magnificent proportions over the past two years with demand down and supply at or near record levels. The price of +$50 has been fueled largely by speculation, as is everything else in the financial sector. With interest rates set to increase, perhaps the malinvestments and speculative frenzy can abate and true price discovery ensue.

At The Close, 3.8.17:
Dow: 20,855.73, -69.03 (-0.33%)
NASDAQ: 5,837.55, +3.62 (0.06%)
S&P 500: 2,362.98, -5.41 (-0.23%)
NYSE Composite: 11,448.21, -58.11 (-0.51%)

Midweek Doldrums: Dow Lower; NAZ, SPX, NYSE Comp Flat; Oil Still In Glut

With no major economic data released, Wednesday was a bit of a nothing-burger on the day. The Dow lost some ground while the other indices finished modestly to the upside.

There was more interest in the 10-year note, as the Treasury auctioned off $23 billion on what was deemed a very weak sale at a yield 2.333%.

Also making some headlines was WTI crude oil, which fell below $52 per barrel, after the American Petroleum Institute (API) said crude inventories rose by 14.2 million barrels, the second largest weekly build in the series.

The dull session comes as Q4 2016 earnings are winding down, and there hasn't been much in the way of good news from the corporate sector. Conversely, not many companies have been lowering forecasts, leaving investors in an area of suspense about which direction the market may go next.

At The Close, Tuesday, February 8, 2017:
Dow: 20,054.34, -35.95 (-0.18%)
NASDAQ: 5,682.45, +8.24 (0.15%)
S&P 500: 2,294.67, +1.59 (0.07%)
NYSE Composite: 11,252.31, +8.93 (0.08%)

Risk On - Risk Off Roller Coaster Is Expected In The Age Of Trump

Get used to volatility in the age of Trump.

Markets - especially stocks and bonds - are more than likely to correct and enter bear territory during Trump's administration. The bond bubble has been extended beyond its "use by" date and the stock rally since 2009 has been nothing short of miraculous, if one considers the creation of 11 trillion dollars (probably more) out of thin air to be the stuff of miracles.

Stocks and bonds are both overvalued, thus, we should experience a 10-year note at 3.0% or higher at some point in the near future, and stocks reversing course due to the competition and relative safety of bonds. Trump's policies are likely to exacerbate the condition of extreme overvaluation which will manifest itself in wild swings. He'll certainly get much needed help from the Fed, whose stated aim is to impose a regime of never-ending inflation.

Problem is, there are major distortions in the US and global economy, mostly the overhang from doing nothing to fix the issues of 2008 (actual bank failures). Let's see interest rates rise, stocks fall and somehow, inflation? A dubious argument at best.

Deflation is the friend of the frugal and that's what's coming. With less capital to blow on hookers and blow, the thrift-loving Americans in the heartland (forget the cesspool cities, they're toast) will benefit from all manner of liquidations and fire sales. It's a transfer of wealth from rich to poor and urban to rural that is long overdue. Most of the debt is tied to cities, not arable land and/or hunting/wilderness/undeveloped/underdeveloped properties.

One can get a unique impression from living in one of America's poorer areas, such as rural upstate New York, but you know what? Some people are thriving, those being land owners, farmers, growers, people with roadside stands, trade specialties, mechanical abilities and low overhead. It's pretty basic stuff, but large swaths of rural America are going to be very affordable and desirable. The cites, not so much. Pain for some, gain for others. The survivalist mentality had it right all along and will be proven winners in coming months and years.

As for today, two days before Mr. Trump assumes the office of president, markets were roiled again, lurching from one idea to another, up, then down, then sideways. European stocks were higher, WTI crude oil got smashed early but rebounded. Gold was flat, then lower; silver, always the outlier, hit its best level in a month, ended the day in New York down on the session, and has been trending higher into the inauguration, but options and futures settlements are closing fast (26th and 27th of January).

Mostly, stocks tread water and didn't offer much in the way of direction though by now, unless reading charts is grossly overrated, it's apparent that the Trump rally has run its course and Dow 20,000 is a fleeting memory.

At The Close 1.18.16:
Dow: 19,804.72, -22.05 (-0.11%)
NASDAQ: 5,555.65, +16.93 (0.31%)
S&P 500: 2,271.89, +4.00 (0.18%)
NYSE Composite: 11,196.11, -0.18 (-0.00%)

Market Week In Review: December 10-16, 2016; Stocks Moribund, Silver Slammed, Oil, Banks Up

Highlighted by Wednesday's (Dec. 14) FOMC rate policy announcement, the week as a whole saw its fair share of ups and downs, mostly confined to intra-day movement, but eventually ending mildly positive, at least for stocks.

The Dow recorded a pair of all-time closing highs on Monday and Tuesday, but failed to reach for the stars after the Fed announced a 0.25% hike in the federal funds rate, the first in exactly one year. The move from 0.25-0.50 to 0.50-0.75 triggered a sharp sell-off in Wednesday afternoon trading, though stocks recovered nicely on Thursday and ended flat on Friday.

If the week was uneventful for stocks, it was not the same for commodities, particularly silver and gold, or for the US dollar, which reached nearly-unprecedented highs over 102.20 on the Bloomberg dollar index. As the dollar gained, the precious metals were slammed, gold losing over $30 top to bottom, but eventually leveling off at $1134.60 at Friday's finish, a loss of just $26 from the rate announcement. Silver took a much harder hit, dropping in price on the COMEX from $17.10 an ounce on Wednesday to end the week about a buck lower, at $16.07, a six percent loss.

Following OPEC's announced production cuts for 2017, crude spiked over $55 per ounce, but retreated during the week, still ahead somewhat at 53.03 as the week's trading closed out. Despite the strong dollar - supposedly a brake on oil prices - oil managed to ramp up to the highest price in three years.

Financials and industrials led the way for US stocks, not surprisingly continuing the Dow rally spurred forward by notables Goldman Sachs, 3M, Boeing, and General Electric. The Dow Industrial Average being the only major index to finish in the green for the week, markets continue to show strength in only the largest of large caps while smaller stocks are only being nibbled upon and, in the main, sold. The fracturing of markets into large leaders and small losers cannot bode well for the continuation of any meaningful rally going forward.

Naturally, with the Fed hiking rates, if only modestly, Treasuries were sold, but mainly on the short-duration issues. The five-year note broke through the mythical 2.00% threshold this week (2.05%), while the 10-year popped briefly above 2.60%, clinging close to that level as markets went dark for the weekend (2.57%). A flattening yield curve was evident as the 30-year bond remained steady, at 3.16%, pushing down the spread between fives and thirties to a unitary 1.11%.

All of this came against a backdrop of national news media hyping futile and largely-baseless claims by the US intelligence community that Russia hacked the 2016 presidential election, somehow making Vladimir Putin responsible for the election of Donald J. Trump (who will be formally elected by the Electoral College on Monday) and the demise of Hillary Clinton, the choice of the much-discredited leftist status quo.

The folly of the intelligence claims was completely ignored by Wall Street, and rightly so. The last thing investors need is a fresh injection of political skullduggery, after slogging through nearly two years of endless campaign rhetoric from all sides.

With a week left before Christmas, retailers have yet to ring bells of any kind, neither of alarm or of joyous peals f profit. The Christmas shopping experience over the past decade has morphed from mad dashes on Black Friday to a controlled button-pushing event on computers nationwide, as the internet has revolutionized the retail buying experience and forever changed the shopping mall landscape and holiday experience.

With two weeks remaining in 2016, it's likely that markets will respond to calmer views going forward though a sharp Santa Claus rally, taking the Dow beyond 20,000, is a distinct possibility over the final ten trading days of the year.

At The Close: Friday, December 16
Dow: 19,848.60, -3.64 (-0.02%)
NASDAQ: 5,437.29, -19.56 (-0.36%)
S&P 500: 2,258.20, -3.83 (-0.17%)
NYSE Composite: 11,122.44, -9.46 (-0.08%)

For the Week:
Dow: +86.65 (0.44%)
NASDAQ: -7.34 (-0.13%)
S&P 500: -1.46 (-0.06%)
NYSE Composite: -66.57 (-0.59%)

Stocks Flat As Dog Days Drag

Considering the huge push Hillary Clinton got from the pollsters and media over the past week, it's a wonder the stock market wasn't off to the races come Monday morning.

Instead, stocks were marginally higher at the opening bell, but spent most of the session in the red. Since stocks are trading at or near all-time highs on the major averages, perhaps this wait-and-see action was the best approach.

Volatility was very low, with stocks trading in very tight ranges. The outlier was oil, as WTI crude ramped up more than a dollar, to $42.87, though this mini-bounce is not likely to be taken seriously or signal another run-up to $50 per barrel or higher. Oil's global glut is real and serious. Only a highly structured and skeptical futures market is keeping crude from collapsing to below $30 per barrel. For now, drivers are getting the benefit of lower gas prices, a condition which used to be associated with a burgeoning economy.

Oddly enough, because of excess debt in the system, stagnation with low inflation is about the best this economy can do. For the most part, individuals are doing better than they have the past few years, but high taxes and the rising cost of healthcare have put the brakes on personal spending.

Dow Jones Industrial Average
18,529.29, -14.24 (-0.08%)

NASDAQ
5,213.14, -7.98 (-0.15%)

S&P 500
2,180.89, -1.98 (-0.09%)

NYSE Composite
10,788.01, 5.14 (0.05%)

Stocks Drag Trhough Thursday Session; Oil Bounces

Sluggish would be a compliment to the manner of trading that took place on Thursday, with the major indices scratching out meager gains, with the exception of the Dow 30, which took it slightly on the chin but avoided a knockout blow.

Market participants are unaware of what to do without some form of guidance by or from the Fed or other central bankers. It's almost as though markets are locked up with nowhere to go, which actually might be the case as the slog through August continues.

If there was any bright spot for the markets it was in the oil patch, where WTI crude rallied off a low spot at $40 per barrel a few days ago and now sits closer to $42. It isn't much of a move, but nervous oil specs will take any gains they can get at this juncture. With crude spilling out of every known production facility at near record pace, the glut has only worsened over the summer as demand has not exactly been robust.

The price of crude - if not for material intervention by players of significant size - should be hovering closer to $30 than $40. Crude has fallen into a bear market, more than 20% off the recent artificial high of $50 per barrel, which didn't last for more than a nanosecond.

A serious sell-off in crude over the next few weeks or into October could be the catalyst for more selling of equities and another dip in the stock markets, though the power of the Fed and other central banks to prevent anything even resembling a correction before the November presidential election cannot be underestimated.

Dow Jones Industrial Average
18,352.05, -2.95 (-0.02%)

NASDAQ
5,166.25, +6.51 (0.13%)

S&P 500
2,164.25, +0.46 (0.02%)

NYSE Composite
10,707.13, +11.99 (0.11%)

All Quiet On The FOMC Front; Meanwhile, Rancor At The DNC

With the chance of a rate hike hovering between absolutely not and no chance at the two-day July meeting (today and Wednesday) stocks took something of a breather, finishing in mixed fashion and anticipating no rate movement from the FOMC, which will release its policy decision at 2:00 pm EDT tomorrow.

There was a sudden drop in equities across the board early in the day on Tuesday, sending the major indices into negative territory, a place they spent most of the remainder of the session.

Oil continued its relentless decline off ridiculously high levels reached last month. While today's drop was less than one percent, the price of WTI crude for September 2016 delivery fell to a three-month low as gasoline demand in the US and most other developed nations remains stubbornly low. The last traded price was in the $42.82 per barrel range.

The global glut in crude oil will continue into the foreseeable future, as production from OPEC nations continues at near capacity and US rig counts continue to creep slowly upward.

Precious metals posted small gains, but remain off their recent highs. This appears to be a time of price consolidation prior to the next leg upward, the four-year bear market now clearly in the rear view mirror and fading from view.

Besides the FOMC meeting, focus is clearly on the political front, as the Democratic National Convention enters the second of its four-day schedule. Much of the rancor over the leaked emails has subsided, though delegates and supporters of Bernie Sanders - the runner-up to Hillary Clinton in the primaries - continue to protest and clamor for their candidate.

Tonight's main event is the delegate roll-call, sure to be accompanied by loud cheers, jeers, assorted sign-waving, and yelping from the disaffected Sanders delegations. It is expected that Hillary Clinton will be awarded the delegates she needs to secure the Democratic nomination, though many Sanders supporters have not given up hope for a last-minute change of heart by some super delegates.

It's a long shot for Sanders, but he will continue his fight for social justice as a serious sideshow in the run-up to November's elections.

Tuesday's Tremble:
Dow Jones Industrial Average
18,473.75, -19.31 (-0.10%)

NASDAQ
5,110.05, +12.42 (0.24%)

S&P 500
2,169.18, +0.70 (0.03%)

NYSE Composite
10,772.99, +20.56 (0.19%)

A Beginning And An End: Stocks And Oil Hit The Skids

Tuesday marked a beginning and an end in more ways than just the day and date.

On the one hand, today was the start of the trading week, shortened by Monday's Memorial Day holiday. On the other, it was May 31, the final trading day of the month, a date normally associated with the buying of stocks as "window dressing," wherein funds pad their holdings with the most favored stock offerings.

As days go, this one was a downer for stocks, with the major averages taking a deep dip before a late-session rally brought the S&P and NASDAQ respectively closer to breakeven and into positive territory. The Dow suffered the worst, losing nearly 150 points before ripping off a significant portion of the losses in the closing hour, ending with a drop close to 1/2 percent.

Thus, the day's trading may have marked the start of another downtrend for stocks, following the massive gains of the prior week. Notable was trading in WTI crude oil futures, which tested the $50 mark before falling off to close more than a dollar lower. Oil has been on a tear since bottoming out at $26 per barrel in mid-February.

An astonishing feat of market movement, the price of crude has nearly doubled in just over three months, but the phony pumping may have come to a quick end. Time will tell if $50 turns out to be a price too high to bear and whether stocks will begin a hasty retreat, having tested the top of the short-term range.

Investing and market-watching alike have become spectator sports of sorts for many, depending upon the level and length of financial repression one can endure, both of which have been in play for far too long.

S&P 500: 2,096.96, -2.10 (0.10%)
Dow: 17,787.20, -86.02 (0.48%)
NASDAQ: 4,948.05, +14.55 (0.29%)

Crude Oil 48.83 -1.01% Gold 1,217.50 +0.07% EUR/USD 1.1133 +0.03% 10-Yr Bond 1.83 -0.92% Corn 406.50 -1.51% Copper 2.08 -1.40% Silver 16.00 -1.65% Natural Gas 2.71 +1.61% Russell 2000 1,154.79 +0.38% VIX 14.19 +8.16% BATS 1000 20,677.17 0.00% GBP/USD 1.4486 +0.04% USD/JPY 110.7115 -0.03%

Oil Glut Yet Prices Higher; Gold, Silver Demand Up, Prices Down

There is a serious disturbance in the Farce called the global economy, and it is the role of central bankers who create absurd amounts of fiat currencies, literally out of thin air.

Policies adopted by the financial elite experts who control nearly all currencies worldwide have caused markets to virtually stop functioning. After seven years of base interest rates at near zero - and recently, below zero - endless stimulus programs otherwise known by the catchy name, quantitative easing, and a serious lack of transparency, regulation, and discipline in all markets, global growth is a non-starter for 2016 and the foreseeable future.

Businesses, fed a diet of easy money for nearly a decade (two decades, if one includes the Greenspan "put" years) are loathe to spend on capital improvements, labor or infrastructure. Businesses are, so to speak, "living off the land," by cutting budgets while fattening the salaries and bonuses of crony CEOs and others occupying the executive suites and boards of directors.

It's a horrible condition, with disinflation and outright deflation popping up in pockets like food production, energy, and most hard commodities (see natural gas and copper). Price discovery has become a function less of supply and demand and more driven by derivative bets, options, credit default swaps, and hedging. Over-finacialization of nearly all markets that matter has turned fundamentals on their heads and what once were functional markets into nothing more than trap-laden casinos. The effect has been to alienate a generation of investors (millenials), impoverish another (retirees) and overburden those not yet ready to enter the economy (the youth). In the middle is generation X, condemned to toil away towards an uncertain future.

The argument that fundamental supply and demand is defunct rests largely on the oil market, currently carrying the largest global glut on record, yet pushed to levels indicative of a shortage. Oil was ranging toward $25 per barrel just a month or so ago; today it is approaching $40, mostly a function of short-covering and naked short selling.

Much the same can be said of the markets for precious metals, the price held down by nefarious forces while the demand continues to expand. In many quarters, gold, silver, and gemstones are considered the only investments worth having and holding. They carry no counterparts risk, are relatively easy to transport and can be converted into money or any other asset with relative ease.

As Bill Bonner and his enlightened crew love to postulate, a day of reckoning is coming, though just exactly when that day arrives and how it is manifested are known to exactly nobody.

It's a mess. Better to put money in a mattress or buy canned goods than risk in capital markets, as moribund and compromised as they are. US equity indices peaked in May of 2015. It's nearly a year from the all-time highs without any rally catalysts in sight.

All eyes and ears will be tuned to the ECB tomorrow, when Mario Draghi does what he can only do, signal more easing, more fraud, and more of the relentless can-kicking that has typified the past seven years.

Nobody is holding his or her breath on this coming non-event because there is no longer any air to breathe.

Wednesday's Wackiness:
S&P 500: 1,989.26, +10.00 (0.51%)
Dow: 17,000.36, +36.26 (0.21%)
NASDAQ: 4,674.38, +25.55 (0.55%)

Crude Oil 38.23 +4.74% Gold 1,253.90 -0.71% EUR/USD 1.1001 -0.06% 10-Yr Bond 1.8920 +3.28% Corn 360.25 -0.07% Copper 2.23 +0.54% Silver 15.31 -0.52% Natural Gas 1.76 +2.92% Russell 2000 1,072.77 +0.46% VIX 18.34 -1.77% BATS 1000 20,677.17 0.00% GBP/USD 1.4217 +0.03% USD/JPY 113.3350 +0.60%

Gold, Silver Rise as Banks, Energy Stocks in Market Crosshairs

Being that the US equity markets are almost 100% likely to end the month with losses, the opening of the final week of January trading may have been significant if only for the direction of a select number of trading vehicles.

Obviously, energy stocks were once again in focus after last week's faux rally on actual inventory builds, though the pundits of oil slickery are blaming today's demise on the record weekend blizzard that decimated the Northeast.

As lame as it may sound, having the I-95 corridor out of commission for the better part of three to four days is certain to result in growth of the oil and distillate glut that has been plaguing the markets for the past 18 months. The logic is simple: if people aren't driving, nobody's buying gas, and that is exactly what the market doesn't want to hear, especially those of the camp who still believe in the peak oil myth and would like nothing better than to cripple the middle class with another round of crushing gas prices at the pump.

Sadly for them, no such thing is about to occur, and, after being goosed nearly 20% last week, WTI crude took a turn to the downside again, off almost 6% on the day, closing just a nod above $30 per barrel. With the canard of higher oil prices (last week was a serious short squeeze) out of the way, oil majors Exxon Mobil (XOM) and Chevron (CVX) - both Dow components - both declined by more than three percent.

Also taken down a few notches were banks, especially Bank of America (BAC), which closed below 13 at 12.96, a one-day four percent drop, now down a solid 30% from its recent 52-week high (18.48). Investors and specs are concerned not only with BAC's exposure to the oil patch and fracking concerns, which have been going belly-up since last Autumn, but with the overall health of the banking sector. Reminded that the nation's largest banks had to be bailed out during the sub-prime crisis just eight years ago, stock players don't need much to arouse their worst suspicions, that the balance sheets of the big money center banks are still not exactly transparent.

Citigroup (C) also was on the chopping block, losing 3.35%, extending its decline since May to a third of its value, from 60.95 to today's close at 39.55.

Meanwhile, gold and silver put on tidy gains, with gold edging up nearly $10, from $1098/oz. at Friday's close to a finish in US markets at $1107.90 today. Silver gained, from an even $14 to $14.23 on the day.

Overall, stocks were exposed again, with US indices staying in the red all day long, the selling accelerating during the afternoon and into the close. It was an inauspicious start to the week in a month that has been nothing short of embarrassing for Wall Street's perms-bulls.

Today's Closing Prices:
S&P 500: 1,877.08, -29.82 (1.56%)
Dow: 15,885.22, -208.29 (1.29%)
NASDAQ: 4,518.49, -72.69 (1.58%)

Crude Oil 30.33 -5.78% Gold 1,105.60 +0.85% EUR/USD 1.0849 +0.47% 10-Yr Bond 2.0220 -1.27% Corn 369.25 -0.27% Copper 1.99 -0.47% Silver 14.23 +1.23% Natural Gas 2.16 +0.84% Russell 2000 997.37 -2.28% VIX 24.15 +8.10% BATS 1000 19,941.58 -1.78% GBP/USD 1.4246 -0.19% USD/JPY 118.3035 -0.36%