Stocks Stumble As Fed Action Seems Less Likely; Markets Resembling Aging Divorcees

Thanks to a number of relatively positive economic reports, the possibility that the Fed will announce a new round of QE at the conclusion of its FOMC policy meeting on Wednesday was seen as a bit less definite.

As convoluted as the machinations of Wall Street have become, good news is now seen as bad, given that the Fed is less likely to move if the economy appears, at least, stable and not about to fall over a cliff.

In a raft of data releases this morning, it was seen that personal spending was flat, though personal income rose 0.5% in June.

The two-month-old Case-Shiller 20-city index, a widely-disregarded metric due to its flawed methodology, fell less than expected in May, dipping 0.7% on expectations of a drop of 1.8%. Though the message remains that the bottom has not been plumbed in housing, the upshot was that the number beat expectations.

More importantly, Chicago PMI posted a gain to 53.7, after printing at 52.9 in May and consumer confidence rose to 65.9, a healthy gain and a multi-month high after checking in at 62.7 in June.

All tolled, the numbers offer a murky picture of the US economy, though certainly not one that could be lauded as either expansionary nor receding. Thus, the valiant traders hoping for another QE round seemed less certain, selling stocks in advance of what they assume will be another ho-hum, no change announcement from the Fed.

Stocks traded in a narrow range, as they did on Monday, with the S&P and NASDAQ hovering around the unchanged mark while the Dow and Composite Index spent the entire day in the red. Volume was minimalist and declining issues outpaced advancers slightly.

Conditions in the US and Europe appear to be unchanged since last week, which is more than likely an overall negative looking ahead, but, without some drama, market participants appeared reluctant to make any bold moves ahead of the FOMC announcement, EBC meeting on Thursday or the non-farm payroll data Friday, which could, in fact, be the most important number of the week.

Being the last calendar and trading day of July, there was little "window dressing" to note as stocks tailed off badly in the final half hour, closing at or near their lows of the day.

If anything, traders (because there are so few real investors) have embraced an attitude of couched pessimism and flagging hope. Since there will be no resolution to any major issues in the US until after the elections in November and the EU and ECB seem so deft at using the microphone to their advantage while proposing no concrete solutions (mostly because the actual fixes involve massive write-downs, pain and suffering to the wealthiest), the general tone is sleepy and non-committal, a condition not unlike many divorced women in their 50s.

Plenty of rest and an uninspiring, dull lifestyle of muddling along seems to be the preferable treatment for whatever perceived and imagined ailments with which they are afflicted.

The go-slow approach is one step removed from the all-inclusive silent treatment, a silly game that the media appears ready to play unless there is a catalyst to prompt attentiveness and a modicum of pleasure.

Even then, periods of exhilaration are bogged down by a general state of disabuse and misplaced emotions. As such, the capital markets have become technological zombies and drug-addled followers of incorrect assumptions.

Men and women get old, as do markets. The remedy is a fresh attitude or new regimen, which, as in the case of aging biddies, is virtually impossible in the current political and economic climate, the comfort of the status quo providing an easy escape from actually dealing with issues at hand.

Please send all hate mail for the above metaphorical escapade above to dontcare@whogivesadamn.com

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