No Follow-Through for Stocks After Monday's Fake Ramp-Fest

Stocks opened higher but quickly reversed direction, resulting in the second-largest one-day point drop on the Dow Industrials in May.

Coincidentally, the lower close occurred on a Tuesday, similar to last week's Tuesday trashing of 193 points.

The financial media attributed the quick turnaround to President Trump's wavering on China trade negotiations, just as Monday's advance was credited to Treasury Secretary Steven Mnuchin's announcement that the proposed tariffs on imports from China were "on hold."

For weeks, the public has been fed nauseating nonsense about stocks reacting to trade and tariff proposals from President Trump and his administration, particularly relating to China. The idea that a single event or series of events, which, in fact, should be positive for American businesses, affecting the entire stock market is ludicrous on the surface and either disingenuous or naive reportage by the financial press.

Stocks have been trading in fits and starts since early February due, not to tariffs or day-to-day events, but, to larger economic issues and obvious overvaluation foisted upon the investing public by Wall Street hucksters and the phony incentives and spurious mutterings from Federal Reserve officials.

There is nothing even remotely connected to tariffs and trade affecting the price levels of stocks, especially since the president's tariffs are only proposals and not in force. Besides the obvious benefit the United States would obtain from lowering its trade deficit with the Chinese, just what is it that is so ominous and wrong about the imposition of tariffs that would level the trade playing field?

The rhetoric surrounding the proposed tariffs reeks of the same kind of anti-Trump noise heard from the mainstream media for the past eighteen months.

Normally, in a free market, stocks rise and fall based upon fundamental valuation metrics and some degree of emotion-based trading from the Wall Street herd. The current environment, driven by computer algorithms which respond to news headlines in knee-jerk fashion, is neither normal nor free.

It's time for a reversion to the mean and a restoration of of sanity in markets and the larger economy. This implies a devaluation of stocks across the board, a quieting of the voices which drive speculation, and regulations designed to minimize the effect of computer-driven excesses.

At the Close, Tuesday, May 22, 2018:
Dow Jones Industrial Average: 24,834.41, -178.88 (-0.72%)
NASDAQ: 7,378.4551, -15.5811 (-0.21%)
S&P 500: 2,724.44, -8.57 (-0.31%)
NYSE Composite: 12,766.65, -37.36 (-0.29%)

Four Straight: All Major US Indices Close At Record Highs

Shades of the Weimar Republic, as all financial assets are becoming ridiculously overpriced.

As was the case in the Weimar, this may not end well. Inflation statistics from this morning's CPI reading showed January up 0.6% and the core CPI higher by some 0.3%. Meanwhile, capacity utilization fell 0.3 from December, to 75.3%.

Retail sales figures were also positive, showing a gain of 0.4%, after December's numbers were magically improved, revised from 0.6% to 1.0%. This as holiday sales gains from major retailers were modest or unreported, and large chains such as Sears and Macy's announced mass store closings coming throughout the year.

Global stock indices have also been ramping higher of late, an indication that the inflation, so often promised by endless rounds of quantitative easing (money printing) and an extended period (8 to 15 years) of low interest rates (some below zero) is finally occurring. What the globalists have been touting and predicting to happen can only lead to one logical conclusion: higher prices for consumers, a condition that will prove to impoverish the average citizenry of nearly every country in the world.

All of this may have something to do with the globalists running scared that their era of "free trade" and fiat money is about to meet its logical conclusion.

But it's all good for Wall Street, and that's what counts, to Wall Street.

At the Close, 2/15/17:
Dow: 20,618.98, +114.57 (0.56%)
NASDAQ: 5,821.62, +39.05 (0.68%)
S&P 500: 2,351.15, +13.57 (0.58%)
NYSE Composite: 11,510.34, +41.47 (0.36%)