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%)

Friday Meltdown Leaves Stocks Near Lowest Levels of Year; All Major Indices In Correction

After the first week of December ended in tears, there were glimmers of hope for a rebound in stocks as the clock ticked closer to Christmas and the end of the consumer shopping/spending season.

While retail sales - as especially so, online sales - continued strong, stocks suffered through another week of volatility, though it didn't actually present itself until the very end.

The Dow was up a bit over 200 points as of Thursday's close, but at the opening bell on Friday it was apparent those gains would not hold. In the end, the Dow lost nearly 500 points on the day, sent that index into correction, along with the S&P, joining the NASDAQ, NYSE Composite, and the Dow Jones Transportation Average.

The tailwinds of the recent selloff have its roots in October, when the Dow most a cumulative 1,345 points. November's gains were only 426, but the Dow is down another 1438 points in December, challenging the closing low of the year, 23,533.20 on March 23.

Besides the usual concern over profits and/or losses, financial markets have plenty of issues to keep investors up at night. There's the continuing Brexit issues, which nearly cost Prime Minister Teresa May her government, and coming up this week is the Fed's FOMC meeting in which the federal funds rate is supposed to be hiked another 25 basis points, along with the real possibility of a particle government shutdown over budget issues, primarily concerning President Trump's promised border wall, and the funding of such.

So, instead of being perplexed over dollars and cents, Wall Street seems more focused on politics and nonsense, as the relentless - mostly baseless - attacks on Mr. Trump continue to overhang every discussion policy and threaten to throw the entire country into chaos.

Form a technical point of view, stocks are in very dangerous territory. The dreaded "death cross," in which the 50-day moving average falls below the 200-day moving average, occurred last week on the S&P, had already happened in mid-November on the NYSE Composite Index, made its appearance the last day of November on the NASDAQ and is maybe two more days away from happening on the Dow.

It's a fairly obvious phenomenon, which points up near-term weakness. When both the 50 and 200-day moving averages point lower in such a condition, it doesn't take a genius to figure out that a hungry bear is roaming free in the forest.

Despite trading having been buoyant during most recent holiday seasons, this one appears to be rather different. There's a distinct possibility of a global slowdown, especially since retail sales and industrial production in China both slowed in November. While politically-oriented pundits will point to Trump's trade war with the Chinese as the culprit, the issue seems to be more complex and deep-seated than such a superficial analysis suggests. China's economy, built on massive credit expansion, ghost cities, and often spurious economic data, has been booming for 20 years and has been due for a slowdown, correction, or even recession. As is the case with the longest bull market in US history, nothing lasts forever.

Any gains in the coming weeks are likely to be eaten away rather quickly as profit-taking is followed by loss prevention. Even as the Fed raises rates, bond yields should continue trending lower as investors seek safety and shun profligate speculation.

Dow Jones Industrial Average December Scorecard:

Date	Close	Gain/Loss	Cum. G/L
12/3/18	25,826.43	+287.97	+287.97
12/4/18	25,027.07	-799.36	-511.39
12/6/18	24,947.67	-79.40	-590.79
12/7/18	24,388.95	-558.72	-1149.51
12/10/18	24,423.26	+34.31	-1115.20
12/11/18	24,370.24	-53.02	-1168.22
12/12/18	24,527.27	+157.03	-1011.19
12/13/18	24,597.38	+70.11	-941.08
12/14/18	24,100.51	-496.87	-1437.95

At the Close, Friday, December 14, 2018:
Dow Jones Industrial Average: 24,100.51, -496.87 (-2.02%)
NASDAQ: 6,910.67, -159.67 (-2.26%)
S&P 500: 2,599.95, -50.59 (-1.91%)
NYSE Composite: 11,755.38, -180.82 (-1.51%)

For the Week:
Dow: -288.44 (-1.18%)
NASDAQ: -58.59 (-0.84%)
S&P 500: -33.13 (-1.26%
NYSE Composite: -186.55 (-1.56%)

With Non-Farm Payrolls Up Next, Dow Closes 100 Points Away From 20,000

Negative forces were at work on Thursday, keeping the Dow Jones Industrial Average below the magic 20,000 mark once again.

Prior to the market open was the ADP jobs report for December, which, in anticipation of Friday's non-farm payroll report, reported that the US added 153,000 jobs in the month, below consensus analyst estimates of roughly 170,000 jobs.

That, in addition to the ongoing turmoil in Chinese yuan was enough to start US markets off on a very tepid tone.

By late morning, the Dow had sunk to what would be the lows of the day, off by 113 points to 19,811, but the plunge was not significant and very short-lived.

Also weighing on stocks was the retail sector as Macy's and Kohl's both reported sluggish holiday sales after the bell on Wednesday. Macy's plans to close 68 stores nationwide and displace over 10,000 workers. Sears chimed in as well, announcing store closures and selling its iconic Craftsman brand to Stanley Black & Decker for $900 million.

Still flirting with the 20,000 level, the Dow stabilized close to the 19,900 level as continued optimism at the prospects of a Trump-inspired stimulus kept spirits somewhat still ebullient, though subdued.

Since mid-December, the Dow Jones Industrial Average has been hanging onto gains and closing just below historic highs, though signs are evident that the rally may not have much stream remaining. Those clinging to gains from the post-election surge may be gradually trimming their positions, as stocks seem to have stalled after Christmas.

What everyone believes but is loath to admit is that stocks are not fairly valued. They are expensive and a significant decline of five to ten percent might be just what's needed to resume the climb to new records. In other words, a short-lived sell-off might present a buying opportunity. On the other hand, market participants are fearful that any decline in equity values could unleash an uneasy and still-hibernating bear.

Tomorrow's non-farm payroll report for December should be enough of a catalyst in one way or another. The wait continues...

At the close 1.5.16:
Dow: 19,899.29, -42.87 (-0.21%)
NASDAQ: 5,487.94, +10.93 (0.20%)
S&P 500: 2,269.00, -1.75 (-0.08%)
NYSE Composite: 11,244.07, -2.47 (-0.02%)

Slaughter On Wall Street: Stocks Whacked Again As China Markets Close Early; Macy's Lays Off Thousands

Sure, the economy is just fine.

That's what the pundits on Bloomberg and CNBC would have you believe.

So, if everything is so darn good, why is Macy's - which has over 700 stores in the US - closing 40 stores and laying off 4,500 employees?

And why did the NASDAQ and the Dow close the day in correction territory (down 10% from high) today, with the S&P not far off?

People who host shows and are guests on TV want you to believe it's all China's fault. Over on mainland China, their stock markets closed early for the second time this year. That's twice in four days that circuit breakers have been triggered. A 7% selloff causes the market to shut down. Those are their rules. Or, rather, those were their rules.

Early in the US session, Chinese authorities announced that they were suspending the circuit-breaker rule, so their stock markets may fall a lot deeper tomorrow than a mere 7% before everything in the People's Republic goes down the drain.

It's not China's fault. It's the fault of the Fed, the government (for looking the other way and accepting bribes from corporations and banks), and the greed of Wall Street. It's also the fault of smart people taking their money out of the rigged casino, aka Wall Street, before it all vanishes, like it did in 2000, or 2008.

Also, Yahoo! is laying off 1000 employees as part of their reorganization plan. One employee that isn't being let go, but should, is CEO Marissa Mayer, of whom Money Daily said years ago was nothing but a wannabe, a poser, with no measurable skills for running a company.

Yes, the economy is not good, Wall Street and the government is run by a gang of crooks, and, incidentally, those highly-paid CEOs, like Ms. Mayer, should be in bread lines with the rest of the people being let go, because they're incompetent.

America, a once-great country, is going down the tubes, and in a big hurry. The culprit is not some foreign entity, terrorism, guns or aliens. The reasons can be found all over the country. Greedy lawyers, greedier bankers, corrupt government officials, incompetent business leaders, and, interwoven into the fabric of this country, placid, placated, ill-educated, preoccupied, self-engrossed people who vote (or don't) in elections and think they've done their part are all part of the problem, and not part of the solution.

But, people could be the solution. If people stopped making poor decisions, stopped listening to people in authority positions, and started taking responsibility for their own lives, rather than hoping for handouts from an uncle sugar government, people could solve their problems on their own.

The concept of self-reliance has been largely lost in America, but, herms hoping it's going to make a comeback when people wise up to the antics of politicians who don't deliver on their promises and kick them to the curb, where they belong.

There are lots of problems in this country that people could solve on their own if they took charge of their own lives. That, truthfully, may be asking for too much. We've wasted too much time in this country and waited too long for the governing class to do the right thing. Now, it may be too late, and we'll all just have to fend for ourselves.

Actually, that may not be too bad a thing.

The day on wall Street was not pretty, with major indices taking a third huge loss in four days. The Dow Industrials are down nearly 1000 points so far this year, putting 2016 already 6% in the red for even the safest stocks. Averages were lower all day, with no signs of rallies, and, perhaps more telling than anything, there was no snap-back at 3:30 on short covering, which has been the norm of late.

As noted by the quotes below, WTI crude oil finished with a 33 handle, a number not seen in the oil pits in 12 years. Gold and silver have broken out of moribund ranges, though holding and advancing from these levels may be difficult, as central banks collude to keep currency that may compete with the almighty dollar, euro or yen at undesirable levels.

What's undeniable about the gold and silver rigging is that it is unsustainable long-term, though central banks and their henchmen in the COMEX have managed to keep sending the prices of precious metals lower for nearly five full years. With stocks potentially falling out of favor, bonds, cash and PMs may appear to be the best bets with which to ride out a currency storm, a scenario that could be occurring in real time as the dollar/yen carry trade continues to unwind.

There is chaos everywhere, and, for the final trading day of the new year's first week, two important developments will be how the Chinese markets fare and US non-farm payroll data for December, due for release at 8:30 am ET.

Closing prices for Thursday, January 7, 2016
S&P 500: 1,943.09, -47.17 (2.37%)
Dow: 16,514.10, -392.41 (2.32%)
NASDAQ, 4,689.43, -146.34 (3.03%)

Crude Oil 33.21 -2.24% Gold 1,109.20 +1.58% EUR/USD 1.0929 +1.41% 10-Yr Bond 2.1530 -1.10% Corn 352.00 -0.35% Copper 2.02 -3.16% Silver 14.32 +2.50% Natural Gas 2.37 +4.46% Russell 2000 1,064.57 -2.72% VIX 24.99 +21.37% BATS 1000 20,761.26 -2.29% GBP/USD 1.4618 -0.05% USD/JPY 117.5480 -0.80%
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Fiscal Cliff: Wall Street Waits While Washington Waffles

Everybody knew that the politicians in the nation's capitol wouldn't get a deal on taxes and spending until the very last possible minute, right?

That certainly seems to be the case, as there are now only five days left in 2012, and most of congress is out of town, though President Obama has made arrangements to return to the White House from Hawaii on Thursday.

Whether or not there will be anyone for him to negotiate with in another question. And what exactly will they be discussing? A very, very, short term deal, most likely extending unemployment benefits and maybe keeping the Bush tax cuts intact for those earning under $250,000, for maybe a couple of months.

The real problem which is beginning to emerge is the upcoming vote on raising the debt ceiling (again), and the Tea Party Republicans in the house still seem hell-bent on making that an issue by which they can twist the president's arm.

The debt ceiling will need to be raised before March, at the very latest, or the federal government will shut down, which, at this juncture, seems to be the best option. Just do away with all of it and let chaos reign. Why not? The solutions being bantered about by the half-crazed Republicans and Democrats aren't going to solve anything except to dole out a few more Obama bucks to those already with their hands out and keep marginal rates in pretty much the same range without meaningful changes to spending or structural reform to entitlement programs or defense.

Wall Street has displayed iron nerves throughout this entire fiscal fiasco, with stocks up for the month of December. The bankster criminals on the Street are probably in on what already is looking like the biggest tax increase in American history, so they're likely well-positioned to benefit from a market decline.

If they aren't, they soon will be, if that's how this is going to go down.

It's gotten well past ridiculous, especially in light of the report from Mastercard Advisors Spending Pulse today that saw retail sales up just 0.7% versus 2011. The report tracked sales from October 28 to December 24.

Happy Holidays. Not.

Dow 13,114.59, -24.49 (0.19%)
NASDAQ 2,990.16, -22.44 (0.74%)
S&P 500 1,419.83, -6.83 (0.48%)
NYSE Composite 8,395.49, -25.06 (0.30%)
NASDAQ Volume 1,059,561,875
NYSE Volume 2,273,327,500
Combined NYSE & NASDAQ Advance - Decline: 1959-3537
Combined NYSE & NASDAQ New highs - New lows: 96-40
WTI crude oil: 90.98, +2.37
Gold: 1,660.70, +1.20
Silver: 30.04, +0.138

Poor Jobs Data Fails to Induce Selling

Prior to the opening bell, the highly-anticipated Non-farm Payroll announcement from the Labor Dept. initially sent futures into near free-fall, but, after a modest decline in the first few minutes of trading, stocks stabilized and spent the rest of the day hugging the flat line.

October saw 190,000 jobs lost in the US and the "official" unemployment rate crank up to 10.2%, the highest since 1982. That the jobless rate was so high just 27 years ago must have served as a salve of sorts to investors, because the markets took it in stride. There is also the growing understanding that many of the US firms listed on the stock exchanges do not rely on the United States as their primary markets, one of the myriad hidden factors of globalization. Thus, US employment is not as large a factor in many businesses, plus, due to the largesse of the federal government, many people who are not employed have fairly sizable disposable incomes, allowing those same US markets to function as though full employment was in force.

Of course, the federal punchbowl of benefits is not any way to grow an economy, but equity investors seem intent on pushing prices higher, so long as the Federal Reserve keeps rates at essentially zero and Uncle Sam continues to dole out the greenbacks. Naturally, the dollar continues to decline in value, a condition not lost on the macro-economic crowd.

Nevertheless, Friday was not the day to be selling stocks as the major indices eked out marginal gains. Monday, however, may be another story.

Dow 10,023.42, +17.46 (0.17%)
NASDAQ 2,112.44, +7.12 (0.34%)
S&P 500 1,069.30, +2.67 (0.25%)
NYSE Composite 6,958.29, +8.15 (0.12%)

As one might expect, winners and losers were nearly evenly split, with declining issues taking a small advantage, 3203-3177. New highs, though, soared well ahead of new lows, 209-61, widening the margin for the third consecutive session.

Volume was negligible, well below normal levels, though Fridays are becoming something of an outlier, with trading sluggish at the end of the week.

NYSE Volume 4,999,170,500
NASDAQ Volume 1,845,147,875

Commodities finished mixed, with oil down $2.19, at $77.43, gold ahead $6.70, to $1,096.00, and silver lower by 4 cents, to $17.38. After the enormous move by gold over the past three weeks - a 10% gain - it appears that the yellow metal has found its own market, diverging even from its fellow precious metals. Platinum was lower on the day, and copper was flat. Gold has gone its own way and cannot be counted on as anything but a separate asset class, and possibly a proxy against all fiat currencies.

The cross-currents in the markets lately have been extreme, adding to volatility in some cases, but also prviding significant headwinds to any upward movement in stocks. The indices are settled below recent highs, and it does not appear that there's enough of a catalyst anywhere - outside of the easy carry trade on the back of the declining dollar - to propel equities through their recent highs. Within days the focus will be on the holiday shopping season, and, while many Americans may not be able to luxuriate their friends and families with expensive gifts this season, well-heeled foreigners certainly can take advantage of the prices of goods denominated in US dollars, especially Europeans and Chinese shoppers. International centers such as New York, Los Angeles and Miami may very well see increased traffic from outsiders, while Americans do their holiday purchasing at the various discounters, striking something of a balance.

With 3rd quarter earnings season now nearly complete, the next few weeks may indeed be a true test of the fortitude of US markets and equities. One thing's for sure: it's not going to be dull.