US stocks are so hot right now it's difficult to keep up with all the records and new all-time highs. Suffice to say that the Fed continues to pump billions of dollars into the hands of primary dealers, hedge funds, used car dealers, slot machines, you name it.
This market, because of the continuous flow of funny money from the central bank, is as phony as an Iowa caucus, but, if you're long, it's infinitely more enjoyable.
With the Dow up more than 1000 points in three days, most analysts and reporters have run out of superlatives.
Apparently, the threat of a global pandemic from the novel coronavirus has been discounted. Almost all of the reported infections and deaths have been centered in China. Only two deaths outside of China have been reported as having been due to the virus.
On Wednesday, President Trump was acquitted on both impeachment charges. Next time (probably in a few months or so) the Democrats might want to try accusing him of something more concrete than Abuse of Power or Obstruction of Congress, neither of which are crimes, much less high crimes. The only things high were the Democrat deep operatives who dreamt up their poor attempt at a coup d'etat.
In what has to be one of the more amusing stories of the past few days is the unprecedented rise and fall of Elon Musk's Tesla (TSLA) stock, which ran up from a close of 650.57 per share on Friday, January 30, to 887.06 at the close on Tuesday, February 4, and finished the session at 734.70 on Wednesday, the 5th, a loss of 152.36 points (-17.18%), and continues to fall in pre-market trading. One of the most widely-held and most-shorted stocks listed, everybody's a winner with the exploding electric car company.
Just in case there isn't enough juice in the markets to keep the rally alive, China announced overnight that it will cut by half tariffs on 1,717 goods imported from the United States beginning February 14 as part of its agreement to Phase 1 of the US-China trade deal.
Oil continues to hold steady near $50 per barrel of WTI crude, having fallen into a bear market from $64 just a month ago. The US national average for a gallon of regular unleaded gas is $2.47 a gallon, according to GasBuddy.com.
At the Close, Wednesday, February 5, 2020:
Dow Jones Industrial Average: 29,290.85, +483.22 (+1.68%)
NASDAQ: 9,508.68, +40.71 (+0.43%)
S&P 500: 3,334.69, +37.10 (+1.13%)
NYSE: 14,024.86, +162.02 (+1.17%)
Showing posts with label impeachment. Show all posts
Showing posts with label impeachment. Show all posts
Thursday, February 6, 2020
Wednesday, February 5, 2020
Stocks Rock Higher, Look to Extend Rally on Coronavirus Treatments, Upbeat ADP Report
Tuesday's rally was the best since August of last year, as the spread of the coronavirus appeared to be centered in China and has not advanced with great intensity to the rest of the world. While the situation in China is still dire, with 494 deaths cumulative totaled worldwide as of Tuesday night, the number of cases reported outside of its epicenter appears to have been mostly contained. In the United States, confirmed cases is holding at 11, and the global total outside of China is just 216. That compares well to the number of confirmed cases inside China, at 24,391 and still growing.
There is a very good interactive map and graphical overview from John Hopkins, here.
Also encouraging is news on treatments for the disease on various fronts. Chinese researchers have applied for a patent to employ Gilead Science's Remdesivir as a treatment, which was used to treat the first US patient in Washington state in late January. The first known case of coronavirus in the US was treated with the drug and continues to recover.
In the US, the Department of Health and Human Services (HHS) is collaborating with Regeneron Pharmaceuticals on a coronavirus treatment.
These positive developments have driven stocks higher after a sudden collapse on the major indices last Friday.
Elsewhere, Nancy Pelosi, apparently still upset that Donald J. Trump is still president of the United States, tore up her copy of Trump's State of the Union speech, immediately after the president had delivered his positive message to the congress. Despite the hissy fit by Speaker of the House Pelosi, Mr. Trump's presidency appears to be sailing along nicely despite partisan Democrat attempts to derail it. The president is expected to be cleared of any wrongdoing on Wednesday at 4:00 pm ET, when the Senate will likely acquit him on impeachment charges brought by the House Democrats.
There was more good economic news prior to Wednesday's market open, as ADP reported January private sector job gains of 291,000, the largest upswing in four years.
Stock futures point to a positive open in New York.
At the Close, Tuesday, February 4, 2020:
Dow Jones Industrial Average: 28,807.63, +407.82 (+1.44%)
NASDAQ: 9,467.97, +194.57 (+2.10%)
S&P 500: 3,297.59, +48.67 (+1.50%)
NYSE: 13,862.84, +184.91 (+1.35%)
There is a very good interactive map and graphical overview from John Hopkins, here.
Also encouraging is news on treatments for the disease on various fronts. Chinese researchers have applied for a patent to employ Gilead Science's Remdesivir as a treatment, which was used to treat the first US patient in Washington state in late January. The first known case of coronavirus in the US was treated with the drug and continues to recover.
In the US, the Department of Health and Human Services (HHS) is collaborating with Regeneron Pharmaceuticals on a coronavirus treatment.
These positive developments have driven stocks higher after a sudden collapse on the major indices last Friday.
Elsewhere, Nancy Pelosi, apparently still upset that Donald J. Trump is still president of the United States, tore up her copy of Trump's State of the Union speech, immediately after the president had delivered his positive message to the congress. Despite the hissy fit by Speaker of the House Pelosi, Mr. Trump's presidency appears to be sailing along nicely despite partisan Democrat attempts to derail it. The president is expected to be cleared of any wrongdoing on Wednesday at 4:00 pm ET, when the Senate will likely acquit him on impeachment charges brought by the House Democrats.
There was more good economic news prior to Wednesday's market open, as ADP reported January private sector job gains of 291,000, the largest upswing in four years.
Stock futures point to a positive open in New York.
At the Close, Tuesday, February 4, 2020:
Dow Jones Industrial Average: 28,807.63, +407.82 (+1.44%)
NASDAQ: 9,467.97, +194.57 (+2.10%)
S&P 500: 3,297.59, +48.67 (+1.50%)
NYSE: 13,862.84, +184.91 (+1.35%)
Sunday, February 2, 2020
WEEKEND WRAP: Virus Fears Spark Selling Spree; But Preventive Measures May Be Slowing Advance of 2019-nCoV
It wasn't a particularly positive week for equities. In fact, it was negative, across the board, ending with a massive selloff on Friday, culminating in the worst week for US stocks since October, 2019.
The better part of the decline came on Friday, after the WHO had issued an international alert on the coronavirus (2019-nCoV) and US stocks soared off lows on Thursday. Reality set in Friday and accounted for 75-80% of the total weekly decline.
As the weekend wore on (this is now Sunday noon in the US, Eastern Time), more reports proved encouraging. The official count from China confirmed 14,380 cases total, and 304 deaths. On Saturday, a death in the Philippines was suggested to have been caused by coronavirus but that has yet to be confirmed. Medical professionals are awaiting further testing. The patient died from pneumonia, but it may have come from normal, seasonal flu.
In the US, there's a better chance of dying from the common flu than the coronavirus, according to the CDC.
Preliminary considerations are suggesting that the spread of the virus is being slowed by China's quarantines and travel restrictions and monitoring around the world and that many reports on social media such as Twitter and Facebook have proven false, misleading or negatively hyperbolic.
Patient Zero, i.e., the first case of the disease to have been reported in the United States (Washington state), became quite ill, was treated intravenously with remdesivir (a drug produced by Gilead Sciences (GILD)) and was recovering.
Also on Friday, Great Britain finally extricated itself from the European Union via what's been known as Brexit, the referendum passed by the British public more than three-and-a-half years ago (June 23, 2016), and President Trump appeared on the way to being acquitted on charges of impeachment by the Senate, which voted 51-49 against calling additional witnesses. A final vote on acquittal or guilt will be held at 4:00 pm ET, Wednesday, February 5.
As frightening as the coronavirus and other news may be, people around the world can take heart in the video below: Nigel Farage's final speech at the European Parliament. As of 11:00 pm January 31, 2020, Britain formally withdrew from the European Union.
At the Close, Friday, January 31, 2020:
Dow Jones Industrial Average: 28,256.03, -603.41 (-2.09%)
NASDAQ: 9,150.94, -148.00 (-1.59%)
S&P 500: 3,225.52, -58.14 (-1.77%)
NYSE: 13,614.10, -247.82 (-1.79%)
For the Week:
Dow: -733.70 (-2.53%)
NASDAQ: -163.98 (-1.76%)
S&P 500: -69.95 (-2.12%)
NYSE: -364.37 (-2.61%)
The better part of the decline came on Friday, after the WHO had issued an international alert on the coronavirus (2019-nCoV) and US stocks soared off lows on Thursday. Reality set in Friday and accounted for 75-80% of the total weekly decline.
As the weekend wore on (this is now Sunday noon in the US, Eastern Time), more reports proved encouraging. The official count from China confirmed 14,380 cases total, and 304 deaths. On Saturday, a death in the Philippines was suggested to have been caused by coronavirus but that has yet to be confirmed. Medical professionals are awaiting further testing. The patient died from pneumonia, but it may have come from normal, seasonal flu.
In the US, there's a better chance of dying from the common flu than the coronavirus, according to the CDC.
Preliminary considerations are suggesting that the spread of the virus is being slowed by China's quarantines and travel restrictions and monitoring around the world and that many reports on social media such as Twitter and Facebook have proven false, misleading or negatively hyperbolic.
Patient Zero, i.e., the first case of the disease to have been reported in the United States (Washington state), became quite ill, was treated intravenously with remdesivir (a drug produced by Gilead Sciences (GILD)) and was recovering.
Also on Friday, Great Britain finally extricated itself from the European Union via what's been known as Brexit, the referendum passed by the British public more than three-and-a-half years ago (June 23, 2016), and President Trump appeared on the way to being acquitted on charges of impeachment by the Senate, which voted 51-49 against calling additional witnesses. A final vote on acquittal or guilt will be held at 4:00 pm ET, Wednesday, February 5.
As frightening as the coronavirus and other news may be, people around the world can take heart in the video below: Nigel Farage's final speech at the European Parliament. As of 11:00 pm January 31, 2020, Britain formally withdrew from the European Union.
At the Close, Friday, January 31, 2020:
Dow Jones Industrial Average: 28,256.03, -603.41 (-2.09%)
NASDAQ: 9,150.94, -148.00 (-1.59%)
S&P 500: 3,225.52, -58.14 (-1.77%)
NYSE: 13,614.10, -247.82 (-1.79%)
For the Week:
Dow: -733.70 (-2.53%)
NASDAQ: -163.98 (-1.76%)
S&P 500: -69.95 (-2.12%)
NYSE: -364.37 (-2.61%)
Friday, January 31, 2020
Coronavirus, Now Global, Will Dominate News For Months
The idea that stocks would erase losses and finish strongly positive after the World Health Organization (WHO) announced that it was raising the level of threat to that of an international pandemic is just plain perverse.
It's what happens when 70% of the trading is performed by headline scanning algorithms that saw the WHO headline as essentially, "nothing to worry about, we got this."
Nothing could be further from the truth. The coronavirus has spread now to encompass the entire Northern Hemisphere, with Russia the latest to announce cases of the virus within its borders. Italy has issued a six month state of emergency. Two-thirds of China is under some form of travel restriction, quarantine, or other health-related orders. Person-to-person transmission has been reported in at least five countries, including Japan and the United States.
Within two weeks the most recent numbers (9692 confirmed cases, 213 deaths as of January 30) are going to be dwarfed by the magnitude of the spread of this pathogen, and there's still no reliable data on the ratio of confirmed cases to deaths, which range - according to medical experts - from two percent to as high as 12 percent, but nobody actually knows for sure.
The WHO, at its press conference Thursday announcing a global pandemic went out of its way to praise China's efforts to contain the virus. This statement was made only to avoid causing a panic. China was actually slow to report the initial outbreak, initially punishing people who were issuing warnings, eventually acting with little regard to human life, allowing the virus to spread unchecked for weeks.
Wikipedia has about as accurate and compelling a timeline as could be expected.
If the Chinese did such a bang-up job containing this virus, why is it now to be found in more than 25 other countries? Why are flights in and out of China only being banned now, nearly two months after the initial report of this new, deadly strain (December 1 or December 8)?
There's a very good chance, being that China has shut down most transportation facilities in and out of cities and provinces, that food shortages will occur and that more people may die from starvation or other causes than the actual disease.
This virus has been taken far too lightly and is going to continue to spread, virtually unchecked, for months.
Meanwhile, the Senate looks to wrap up the impeachment trial of President Trump on Friday after a vote to allow more witnesses is taken and will likely fail. The Republicans have 50 votes at least with which to defeat the motion, the only wild card being that the presiding judge, Chief Justice of the Supreme Court, John Roberts, could conceivably take the unprecedented step of deciding the motion should the vote come down as a 50-50 tie.
He is expected to NOT take that step, as a tie would defeat the measure.
In economic news, the first estimate of 2019 fourth quarter GDP came in at 2.1%, making all of 2019, at 2.3%, the worst year under President Trump. GDP grew by 2.9% in 2018, and 2.4% in 2017.
And, in Virginia, the state assembly is wasting no time making sure citizens cannot defend themselves.
At the Close, Thursday, January 30, 2020:
Dow Jones Industrial Average: 28,859.44, +124.99 (+0.43%)
NASDAQ: 9,298.93, +23.77 (+0.26%)
S&P 500: 3,283.66, +10.26 (+0.31%)
NYSE: 13,861.92, +18.11 (+0.13%)
It's what happens when 70% of the trading is performed by headline scanning algorithms that saw the WHO headline as essentially, "nothing to worry about, we got this."
Nothing could be further from the truth. The coronavirus has spread now to encompass the entire Northern Hemisphere, with Russia the latest to announce cases of the virus within its borders. Italy has issued a six month state of emergency. Two-thirds of China is under some form of travel restriction, quarantine, or other health-related orders. Person-to-person transmission has been reported in at least five countries, including Japan and the United States.
Within two weeks the most recent numbers (9692 confirmed cases, 213 deaths as of January 30) are going to be dwarfed by the magnitude of the spread of this pathogen, and there's still no reliable data on the ratio of confirmed cases to deaths, which range - according to medical experts - from two percent to as high as 12 percent, but nobody actually knows for sure.
The WHO, at its press conference Thursday announcing a global pandemic went out of its way to praise China's efforts to contain the virus. This statement was made only to avoid causing a panic. China was actually slow to report the initial outbreak, initially punishing people who were issuing warnings, eventually acting with little regard to human life, allowing the virus to spread unchecked for weeks.
Wikipedia has about as accurate and compelling a timeline as could be expected.
If the Chinese did such a bang-up job containing this virus, why is it now to be found in more than 25 other countries? Why are flights in and out of China only being banned now, nearly two months after the initial report of this new, deadly strain (December 1 or December 8)?
There's a very good chance, being that China has shut down most transportation facilities in and out of cities and provinces, that food shortages will occur and that more people may die from starvation or other causes than the actual disease.
This virus has been taken far too lightly and is going to continue to spread, virtually unchecked, for months.
Meanwhile, the Senate looks to wrap up the impeachment trial of President Trump on Friday after a vote to allow more witnesses is taken and will likely fail. The Republicans have 50 votes at least with which to defeat the motion, the only wild card being that the presiding judge, Chief Justice of the Supreme Court, John Roberts, could conceivably take the unprecedented step of deciding the motion should the vote come down as a 50-50 tie.
He is expected to NOT take that step, as a tie would defeat the measure.
In economic news, the first estimate of 2019 fourth quarter GDP came in at 2.1%, making all of 2019, at 2.3%, the worst year under President Trump. GDP grew by 2.9% in 2018, and 2.4% in 2017.
And, in Virginia, the state assembly is wasting no time making sure citizens cannot defend themselves.
At the Close, Thursday, January 30, 2020:
Dow Jones Industrial Average: 28,859.44, +124.99 (+0.43%)
NASDAQ: 9,298.93, +23.77 (+0.26%)
S&P 500: 3,283.66, +10.26 (+0.31%)
NYSE: 13,861.92, +18.11 (+0.13%)
Thursday, January 30, 2020
Coronavirus Spread Now Affecting Markets Globally Along With Individual Stocks, Bonds
As the novel coronavirus continues to spread internationally from its epicenter in Wuhan, the capitol of Hubei province, China, expect markets to respond as they did on Wednesday, where US gains at the opening bell were quickly wiped out. The Dow Industrials, in particular, soared more than 200 points at the open, only to be torn down to nearly unchanged within the first half hour of trading.
All of the major indices experienced similar patterns, and all were goosed higher by a phantom bid as they approached session lows. There was likely intervention behind the scenes which kept stocks from falling off the shelf into the abyss, as was the case on Monday.
With just three days of real data relatable to coronavirus, the infectious virus is undoubtably a market event. As has already been demonstrated, oil was the first casualty as crude prices have cratered since the Chinese government quarantined the entire Wuhan province last week and began issuing travel warnings.
Others are emerging. Starbucks (SBUX), which announced it was shutting down 2000 locations in China on Wednesday - about half of its stores in China - has seen its share price reduced from 93.75 on January 23 to 86.72 as of Wednesday's close. While the losses on Starbucks may be more attributable to the release of their fiscal first quarter (US fourth quarter) results on Tuesday, there are other chains which may be affected soon, Among those that have large presences in China are McDonald's (MCD), YUM Brands (YUM), owners of Pizza Hut and KFC, among other popular brands, and Dairy Queen, which is privately owned. Share of McDonald's and YUM Brands have been spared thus far, but the are definitely on many traders' short lists.
Also being affected are bond prices and yields, as the treasury curve has flattened out over the past week and the 10-year note has been knocked to to a yield of 1.58% as of this writing, the lowest since October 8 of last year. All yields on short term bills are currently inverted vis-a-vis the five-year note, with yields on 1, 2, 3, 6-month and one-year bills all higher than the five-year. The scramble to safety seems to be favoring shorter duration, a knock-on effect of a wait-and-see approach to the spread of the deadly virus.
As of Wednesday night (ET), Chinese authorities upped the death toll from the virus to 170, though experts in the field strongly suspect that China's officials are purposely skewing the numbers lower - reporting many deaths as caused by pneumonia or not reporting deaths at all in some cases - in order to not cause a widespread panic. Nevertheless, both the number of cases reported and deaths reported - in China and internationally - continue to rise, and person-to-person transmission of the disease has now been reported in South Korea, Germany, Thailand, and Japan. With an incubation period that can last up to 14 days before symptoms develop, it may take more time for numbers to rise dramatically.
The World Health Organization (WHO) is scheduled to make an announcement Thursday in Geneva, Switzerland at 7.30 pm local time (1830 GMT), which would coincide with the middle of the US market session. Expect fireworks to the downside if the organization deems the coronavirus a global pandemic situation, something it decided not to do when it met a week ago (January 23).
Elsewhere, the impeachment trial of president Trump is winding down quickly and it appears that the Republicans have enough votes to shut down any attempt by the Democrats to extend the process by calling more witnesses. With a 53-47 advantage in the Senate, the Republicans are expected to defeat any measure calling for anything that might extend the trial past Friday, when the vote on witnesses is set to occur.
Once the vote for witnesses is defeated, the Senate can move immediately to decide the trial either in favor of acquittal of the president or guilty, which would carry the penalty of removal from office and bar him from running for any other high office. With a two-thirds vote needed for a finding of guilt, it is widely expected that the president will be acquitted.
The prosecution managers and administration lawyers will field another day of questions from the Senators on Thursday, then proceed to voting on other trial matters Friday.
At the Close, Wednesday, January 29, 2020:
Dow Jones Industrial Average: 28,734.45, +11.60 (+0.04%)
NASDAQ: 9,275.16, +5.48 (+0.06%)
S&P 500: 3,273.40, -2.84 (-0.09%)
NYSE: 13,843.81, -33.80 (-0.24%)
All of the major indices experienced similar patterns, and all were goosed higher by a phantom bid as they approached session lows. There was likely intervention behind the scenes which kept stocks from falling off the shelf into the abyss, as was the case on Monday.
With just three days of real data relatable to coronavirus, the infectious virus is undoubtably a market event. As has already been demonstrated, oil was the first casualty as crude prices have cratered since the Chinese government quarantined the entire Wuhan province last week and began issuing travel warnings.
Others are emerging. Starbucks (SBUX), which announced it was shutting down 2000 locations in China on Wednesday - about half of its stores in China - has seen its share price reduced from 93.75 on January 23 to 86.72 as of Wednesday's close. While the losses on Starbucks may be more attributable to the release of their fiscal first quarter (US fourth quarter) results on Tuesday, there are other chains which may be affected soon, Among those that have large presences in China are McDonald's (MCD), YUM Brands (YUM), owners of Pizza Hut and KFC, among other popular brands, and Dairy Queen, which is privately owned. Share of McDonald's and YUM Brands have been spared thus far, but the are definitely on many traders' short lists.
Also being affected are bond prices and yields, as the treasury curve has flattened out over the past week and the 10-year note has been knocked to to a yield of 1.58% as of this writing, the lowest since October 8 of last year. All yields on short term bills are currently inverted vis-a-vis the five-year note, with yields on 1, 2, 3, 6-month and one-year bills all higher than the five-year. The scramble to safety seems to be favoring shorter duration, a knock-on effect of a wait-and-see approach to the spread of the deadly virus.
As of Wednesday night (ET), Chinese authorities upped the death toll from the virus to 170, though experts in the field strongly suspect that China's officials are purposely skewing the numbers lower - reporting many deaths as caused by pneumonia or not reporting deaths at all in some cases - in order to not cause a widespread panic. Nevertheless, both the number of cases reported and deaths reported - in China and internationally - continue to rise, and person-to-person transmission of the disease has now been reported in South Korea, Germany, Thailand, and Japan. With an incubation period that can last up to 14 days before symptoms develop, it may take more time for numbers to rise dramatically.
The World Health Organization (WHO) is scheduled to make an announcement Thursday in Geneva, Switzerland at 7.30 pm local time (1830 GMT), which would coincide with the middle of the US market session. Expect fireworks to the downside if the organization deems the coronavirus a global pandemic situation, something it decided not to do when it met a week ago (January 23).
Elsewhere, the impeachment trial of president Trump is winding down quickly and it appears that the Republicans have enough votes to shut down any attempt by the Democrats to extend the process by calling more witnesses. With a 53-47 advantage in the Senate, the Republicans are expected to defeat any measure calling for anything that might extend the trial past Friday, when the vote on witnesses is set to occur.
Once the vote for witnesses is defeated, the Senate can move immediately to decide the trial either in favor of acquittal of the president or guilty, which would carry the penalty of removal from office and bar him from running for any other high office. With a two-thirds vote needed for a finding of guilt, it is widely expected that the president will be acquitted.
The prosecution managers and administration lawyers will field another day of questions from the Senators on Thursday, then proceed to voting on other trial matters Friday.
At the Close, Wednesday, January 29, 2020:
Dow Jones Industrial Average: 28,734.45, +11.60 (+0.04%)
NASDAQ: 9,275.16, +5.48 (+0.06%)
S&P 500: 3,273.40, -2.84 (-0.09%)
NYSE: 13,843.81, -33.80 (-0.24%)
Wednesday, January 29, 2020
One Down, One Up, and Now Comes the Fed
After two days of turmoil, the roller-coaster ride that has been this week's stock market is about to take another twist, or turn, or bump, or dive, or rise...
Nobody knows where it's going with the Federal Reserve's FOMC set to announce its first policy directive of the new year at 2:00 pm ET on Wednesday.
Monday's coronavirus-inspired deflation was followed by a miraculous revival on Tuesday, as if somebody had found a sudden cure for the deadly outbreak that has spread across China and been exported - at last count - to at least 15 other countries, including the United State, Canada, France, Germany, Thailand, Vietnam, Malaysia, Cambodia, Japan and many others. Being mostly unchecked and having an incubation period of up to 14 days, it's probable that the virus will circle the globe within the next month.
The Dow lost some 450 points on Monday and regained less than half of that on Tuesday. With the virus still highly infectious and the death toll rising to 132, the Fed standing pat on interest rates would seem to be about as consequential as a water hose in a rainstorm.
Beyond the spread of the coronavirus, the other big story in play this week is the impeachment trial of president Trump, being played out in the US Senate. Both sides have presented their cases, though the Republican's defense took less than half the time as that of the Democrats and was more focused on law and reason than the House managers' mangled miasma of mistaken misappropriations.
Where the Democrats sought to emotionalize the proceedings, the president's legal team toned it down, making the case, alternatively, that the articles of impeachment were vague and thus void, or that no crime had been committed, emphasized by professor Alan Dershowitz's impassioned, eloquent, well-researched argument on Monday night that the founders intended impeachment to be narrowly focused, rather than nebulous and amorphous as are the Democrat charges of Abuse of Power and Obstruction of Congress, neither of which are criminal.
Despite the apparent readiness of the Republican side, the media spin spent the week twirling around speculation over a piece of manuscript leaked from former advisor John Bolton's upcoming book, spuriously-timed to intercede in the Senate proceedings. Bolton's claim that he had a personal conversation with Mr. Trump, in which the president explicitly tied the delay of aid to Ukraine with the need for that country to dig into the affairs of Joe Biden and his son, Hunter, concerning their dealings with the corrupt natural gas company Burisma, was all-too-conveniently timed to overshadow the defense team's presentation of facts and legalities.
Thus, instead of examining the case for or against the president based on the best arguments from both sides, the media has attempted to shift the attention of the American public from real arguments to a false paradigm over calling additional witnesses, none of whom would be likely to move the needle in either direction very mch at all.
Senate majority leader, Mitch McConnell, who said once that he may not have the votes to stop additional witnesses and evidence, has also said that the votes are there to defeat any such motion on Friday, when the issue will come to a vote of some kind, after two days of questions from senators to either side - or both - on Wednesday and Thursday.
If he Democrats succeed in their desire for additional testimony, it would likely extend the trial for weeks if not months, given that some witnesses, including the testimony of Secretary of State Mike Pompeo and Chief of Staff Mick Mulvaney, would likely be subject to executive privilege, a matter that would end up in the hands of the Supreme Court. Arguments for and against the invocation of privilege would likely take weeks to draw up and more weeks to argue before the court could issue a ruling. It's a real can of worms that the Democrats threaten to open.
Cooler heads may prevail in the Senate. Having heard enough to make a reasoned decision, there may come a vote on Friday - if the vote for additional witnesses fails - up or down on the president's guilt or innocence, which would end the trial and allow Senators Klobuchar, Sanders, and Elizabeth Warren enough headway to get back to campaigning in Iowa, where the first primary caucus is set to wrap up on Monday, February 3.
While the Senate plays paddy-cake with the future of the nation and its precedents, the coronavirus will no doubt spread fear, death and potentially-huge economic ramifications around the world. Whatever happens in the Fed decision or the impeachment matter is likely to take a back seat to the carnage a virulent, unchecked, highly-contagious virus can unleash.
At the Close, Tuesday, January 28, 2020:
Dow Jones Industrial Average: 28,722.85, +187.05 (+0.66%)
NASDAQ: 9,269.68, +130.37 (+1.43%)
S&P 500: 3,276.24, +32.61 (+1.01%)
NYSE: 13,877.61, +108.00 (+0.78%)
Nobody knows where it's going with the Federal Reserve's FOMC set to announce its first policy directive of the new year at 2:00 pm ET on Wednesday.
Monday's coronavirus-inspired deflation was followed by a miraculous revival on Tuesday, as if somebody had found a sudden cure for the deadly outbreak that has spread across China and been exported - at last count - to at least 15 other countries, including the United State, Canada, France, Germany, Thailand, Vietnam, Malaysia, Cambodia, Japan and many others. Being mostly unchecked and having an incubation period of up to 14 days, it's probable that the virus will circle the globe within the next month.
The Dow lost some 450 points on Monday and regained less than half of that on Tuesday. With the virus still highly infectious and the death toll rising to 132, the Fed standing pat on interest rates would seem to be about as consequential as a water hose in a rainstorm.
Beyond the spread of the coronavirus, the other big story in play this week is the impeachment trial of president Trump, being played out in the US Senate. Both sides have presented their cases, though the Republican's defense took less than half the time as that of the Democrats and was more focused on law and reason than the House managers' mangled miasma of mistaken misappropriations.
Where the Democrats sought to emotionalize the proceedings, the president's legal team toned it down, making the case, alternatively, that the articles of impeachment were vague and thus void, or that no crime had been committed, emphasized by professor Alan Dershowitz's impassioned, eloquent, well-researched argument on Monday night that the founders intended impeachment to be narrowly focused, rather than nebulous and amorphous as are the Democrat charges of Abuse of Power and Obstruction of Congress, neither of which are criminal.
Despite the apparent readiness of the Republican side, the media spin spent the week twirling around speculation over a piece of manuscript leaked from former advisor John Bolton's upcoming book, spuriously-timed to intercede in the Senate proceedings. Bolton's claim that he had a personal conversation with Mr. Trump, in which the president explicitly tied the delay of aid to Ukraine with the need for that country to dig into the affairs of Joe Biden and his son, Hunter, concerning their dealings with the corrupt natural gas company Burisma, was all-too-conveniently timed to overshadow the defense team's presentation of facts and legalities.
Thus, instead of examining the case for or against the president based on the best arguments from both sides, the media has attempted to shift the attention of the American public from real arguments to a false paradigm over calling additional witnesses, none of whom would be likely to move the needle in either direction very mch at all.
Senate majority leader, Mitch McConnell, who said once that he may not have the votes to stop additional witnesses and evidence, has also said that the votes are there to defeat any such motion on Friday, when the issue will come to a vote of some kind, after two days of questions from senators to either side - or both - on Wednesday and Thursday.
If he Democrats succeed in their desire for additional testimony, it would likely extend the trial for weeks if not months, given that some witnesses, including the testimony of Secretary of State Mike Pompeo and Chief of Staff Mick Mulvaney, would likely be subject to executive privilege, a matter that would end up in the hands of the Supreme Court. Arguments for and against the invocation of privilege would likely take weeks to draw up and more weeks to argue before the court could issue a ruling. It's a real can of worms that the Democrats threaten to open.
Cooler heads may prevail in the Senate. Having heard enough to make a reasoned decision, there may come a vote on Friday - if the vote for additional witnesses fails - up or down on the president's guilt or innocence, which would end the trial and allow Senators Klobuchar, Sanders, and Elizabeth Warren enough headway to get back to campaigning in Iowa, where the first primary caucus is set to wrap up on Monday, February 3.
While the Senate plays paddy-cake with the future of the nation and its precedents, the coronavirus will no doubt spread fear, death and potentially-huge economic ramifications around the world. Whatever happens in the Fed decision or the impeachment matter is likely to take a back seat to the carnage a virulent, unchecked, highly-contagious virus can unleash.
At the Close, Tuesday, January 28, 2020:
Dow Jones Industrial Average: 28,722.85, +187.05 (+0.66%)
NASDAQ: 9,269.68, +130.37 (+1.43%)
S&P 500: 3,276.24, +32.61 (+1.01%)
NYSE: 13,877.61, +108.00 (+0.78%)
Sunday, January 26, 2020
National Networks ABC, CBS, NBC, and FOX Should Be Under FCC Review After Impeachment Bias
Thanks to physics and my choice of living way out in the sticks, I gratefully cannot get cable TV and my antenna doesn't pick up the local ABC affiliate. Sure, I miss a college football game here or there, but I can live with that.
Since I don't know what ABC did on Saturday in their coverage of President Trump's defense team's arguments before the Senate, I can’t comment on it, but here's how NBC, FOX, and CBS handled it. NBC's local affiliate (Knoxville, TN) had NO COVERAGE at all. It was supposedly delegated over to their secondary network, but, despite looking for it, I never saw it. FOX's local affiliate offered NO COVERAGE AT ALL.
CBS covered the trial for the first hour on their primary broadcast channel, but then apparently had given their affiliate (again, Knoxville, TN) the choice to switch to local programming, which they did. I managed to only miss a minute of Jay Sekulow's arguments when they switched the impeachment coverage over to their secondary channel, frantically flipping through channels to find the proceedings.
Those unfamiliar with over-the-air digital broadcasting will note that the major networks offer a number of channels of over-the-air broadcasts. They are designated by numbers, as in 12.1, 12.2, 12.3, where 12.1 would be the primary channel, with the network's complete national lineup plus local affiliate time slots. The other channels are usually delegated to secondary or tertiary offerings, employing programming from programmers such as CW, MeTV, Grit, Bounce, Start, Ion, Court TV, etc.
Some of these programmers, such as CW, offer a variety of in-house productions, but the bulk of them are reruns of time-worn sit-coms, dramas, Westerns, or variety shows. MeTV, for instance, offers up a steady diet of everything from The Beverly Hillbillies to The Flintstones.
The national networks likely have authority to cut into the programming of their secondary offerings whenever they feel it's necessary, during emergencies or when there's a programming conflict. Saturday's airing of the Senate impeachment trial apparently was deemed to be one of those times.
Now, mind you, when the Democrats were presenting the PROSECUTION, they had hours of wall-to-wall coverage on their primary network channels. There was no switching over and cutting into the programming of the secondary channels. But, apparently, in the executive offices of NBC and the other national networks, decisions were made that the defense arguments by the president's legal team were of little to no importance. Thus they were brushed aside in favor of facial cream advertisements, local sports shows, cartoons, or other innocuous programming.
I don't know if anybody else noticed the obvious bias of the networks, but if there was ever an argument to be made for pulling their FCC licenses, this would be it. Along with the obvious bias of CNN and MSNBC, which are cable-only "news" outlets, ABC, CBS, NBC, and FOX are over-the-air networks which serve a large proportion of poor, middle-class, and especially, rural America. These networks are mis-serving the public and should have their licenses pulled, or, at least, reviewed.
The propaganda - including some smarmy legal analyst on CBS lying, after the proceedings, that Obstruction of Congress is a CRIME (it is not), and Major Garrett, prior to the hearing, promoting the notorious "heads on a pike" statement, saying it was his reporting and that he stands by it - is universally leftist, to a degree that broadcasters from the former Soviet Union are no doubt jealous.
-- Fearless Rick
Since I don't know what ABC did on Saturday in their coverage of President Trump's defense team's arguments before the Senate, I can’t comment on it, but here's how NBC, FOX, and CBS handled it. NBC's local affiliate (Knoxville, TN) had NO COVERAGE at all. It was supposedly delegated over to their secondary network, but, despite looking for it, I never saw it. FOX's local affiliate offered NO COVERAGE AT ALL.
CBS covered the trial for the first hour on their primary broadcast channel, but then apparently had given their affiliate (again, Knoxville, TN) the choice to switch to local programming, which they did. I managed to only miss a minute of Jay Sekulow's arguments when they switched the impeachment coverage over to their secondary channel, frantically flipping through channels to find the proceedings.
Those unfamiliar with over-the-air digital broadcasting will note that the major networks offer a number of channels of over-the-air broadcasts. They are designated by numbers, as in 12.1, 12.2, 12.3, where 12.1 would be the primary channel, with the network's complete national lineup plus local affiliate time slots. The other channels are usually delegated to secondary or tertiary offerings, employing programming from programmers such as CW, MeTV, Grit, Bounce, Start, Ion, Court TV, etc.
Some of these programmers, such as CW, offer a variety of in-house productions, but the bulk of them are reruns of time-worn sit-coms, dramas, Westerns, or variety shows. MeTV, for instance, offers up a steady diet of everything from The Beverly Hillbillies to The Flintstones.
The national networks likely have authority to cut into the programming of their secondary offerings whenever they feel it's necessary, during emergencies or when there's a programming conflict. Saturday's airing of the Senate impeachment trial apparently was deemed to be one of those times.
Now, mind you, when the Democrats were presenting the PROSECUTION, they had hours of wall-to-wall coverage on their primary network channels. There was no switching over and cutting into the programming of the secondary channels. But, apparently, in the executive offices of NBC and the other national networks, decisions were made that the defense arguments by the president's legal team were of little to no importance. Thus they were brushed aside in favor of facial cream advertisements, local sports shows, cartoons, or other innocuous programming.
I don't know if anybody else noticed the obvious bias of the networks, but if there was ever an argument to be made for pulling their FCC licenses, this would be it. Along with the obvious bias of CNN and MSNBC, which are cable-only "news" outlets, ABC, CBS, NBC, and FOX are over-the-air networks which serve a large proportion of poor, middle-class, and especially, rural America. These networks are mis-serving the public and should have their licenses pulled, or, at least, reviewed.
The propaganda - including some smarmy legal analyst on CBS lying, after the proceedings, that Obstruction of Congress is a CRIME (it is not), and Major Garrett, prior to the hearing, promoting the notorious "heads on a pike" statement, saying it was his reporting and that he stands by it - is universally leftist, to a degree that broadcasters from the former Soviet Union are no doubt jealous.
-- Fearless Rick
Thursday, January 23, 2020
Stocks Slide As IMF Revises Global Growth Projections Lower... Again
In the Senate, the impeachment trial of President Trump is well underway, though some Senators are wondering how the House managers can keep up their opening statement for another 16 hours without being laughed out of the chamber.
Adam Schiff, Gerold Nadler and their associates dithered and danced around the same tired narrative that's been their staple for the past six months and nobody is really buying it. Perhaps that's why stocks slumped late in the day, due to overwhelming boredom.
Impeachment aside, stocks were off to a solid start on Wednesday, but failed to make much progress, with the Dow actually ending in the red after being up 124 points early in the session.
There are be a plethora of reasons to be selling stocks at this juncture, main among them valuation, but the continuing slowdown in global trade and potential for most of Europe to fall into a recession are probably the most "top of mind" as winter winds blow cold across the Northern Hemisphere.
Lowering its 2019 forecast (a little late) for the sixth straight time, the IMF dropped expectations for global growth to 2.9%, down 0.1 from it's previous 3.0% expectation. Most of the data is already in place. The IMF, like everyone else, is monitoring fourth quarter results from corporations around the world.
In what has to be regarded as somewhat on the cheeky side, the IMF also lowered its 2020 forecast, from 3.4% to 3.3%. It's ludicrous to believe that the amalgamated egoistic economists at the IMF can get any prediction right, especially one calling for improvement when the early evidence is clearly favoring decline. Within a few months, these brainiacs will be revising their crystal ball projections and tea leaf readings to something more aligned with reality.
Considering that the US, at least, is at the far end of an 11-year bull market, some slowdown would be expected and it's notable that the brain-dead at the IMF cannot fathom the declining birth rate effects of demographics in developed countries, most of which have fallen below replacement figures.
With cheerleaders like those at the IMF and the relentless money creation by the Fed, there's little wonder the rich get richer as fake predictions are afforded the most credence.
At some point, the Fed will stop printing or the dollar will hyper-inflate. At that point, the IMF can revise upward and still find itself woefully behind the curve.
At the Close, Wednesday, January 22, 2020:
Dow Jones Industrial Average: 29,186.27, -9.77 (-0.03%)
NASDAQ: 9,383.77, +12.96 (+0.14%)
S&P 500: 3,321.75, +0.96 (+0.03%)
NYSE: 14,110.24, +0.26 (+0.00%)
Adam Schiff, Gerold Nadler and their associates dithered and danced around the same tired narrative that's been their staple for the past six months and nobody is really buying it. Perhaps that's why stocks slumped late in the day, due to overwhelming boredom.
Impeachment aside, stocks were off to a solid start on Wednesday, but failed to make much progress, with the Dow actually ending in the red after being up 124 points early in the session.
There are be a plethora of reasons to be selling stocks at this juncture, main among them valuation, but the continuing slowdown in global trade and potential for most of Europe to fall into a recession are probably the most "top of mind" as winter winds blow cold across the Northern Hemisphere.
Lowering its 2019 forecast (a little late) for the sixth straight time, the IMF dropped expectations for global growth to 2.9%, down 0.1 from it's previous 3.0% expectation. Most of the data is already in place. The IMF, like everyone else, is monitoring fourth quarter results from corporations around the world.
In what has to be regarded as somewhat on the cheeky side, the IMF also lowered its 2020 forecast, from 3.4% to 3.3%. It's ludicrous to believe that the amalgamated egoistic economists at the IMF can get any prediction right, especially one calling for improvement when the early evidence is clearly favoring decline. Within a few months, these brainiacs will be revising their crystal ball projections and tea leaf readings to something more aligned with reality.
Considering that the US, at least, is at the far end of an 11-year bull market, some slowdown would be expected and it's notable that the brain-dead at the IMF cannot fathom the declining birth rate effects of demographics in developed countries, most of which have fallen below replacement figures.
With cheerleaders like those at the IMF and the relentless money creation by the Fed, there's little wonder the rich get richer as fake predictions are afforded the most credence.
At some point, the Fed will stop printing or the dollar will hyper-inflate. At that point, the IMF can revise upward and still find itself woefully behind the curve.
At the Close, Wednesday, January 22, 2020:
Dow Jones Industrial Average: 29,186.27, -9.77 (-0.03%)
NASDAQ: 9,383.77, +12.96 (+0.14%)
S&P 500: 3,321.75, +0.96 (+0.03%)
NYSE: 14,110.24, +0.26 (+0.00%)
Wednesday, January 22, 2020
Stocks Take Extra Day Off As Impeachment Trial Opens, Virginia Protest Ends Peacefully
Almost everybody got back to work on Tuesday, following the Martin Luther King Jr. holiday, including those who traveled to Richmond, Virginia to rally in support of the second amendment and congress, which eagerly got started on the impeachment trial of President Donald J. Trump.
The scene in Richmond was inspiring, if not daunting to those who oppose gun rights in the United States and elsewhere. The display of firearms - from shotguns and .22s to ARs, semi-automatic weapons, handguns and even a .50-caliber tank-buster - was impressive to say the least. The massive demonstration of an armed populace acting in a very peaceable manner without incident (only one arrest was made) served as a reminder of what America is all about: a free people willing to defend their rights against tyranny.
In congress, it was another kind of spectacle, with the managers from the House of Representatives sparring over trial rules with the president's legal team. The arguments by the House members who stand as prosecutors fell largely on deaf Republican ears as every one of the eleven proposed amendments brought up by Democrat leader Chuck Schumer was defeated along party lines, 53-47, bar one. Maine Senator, Susan Collins voted with Democrats on the 10th amendment proposed by Schumer, which would have allowed more time for both sides to respond to trial motions, but it still went down in flames, 52-48.
The marathon session lasted well into the night, finally adjourning just before two o'clock am. The defeat of the Democrats was resounding and bodes well for the president as the parties will begin making their cases when the House managers begin three days of opening arguments on Wednesday at 1:00 pm ET.
While the rhetoric was fiery and impassioned by both sides, the issues raised by the president's lawyers seemed more authentic and serious. Most of the Senators seated in the chamber are well aware that the charges levied by the Democratically-controlled House - Abuse of Power and Obstruction of Congress - are neither crimes nor are their arguments particularly well-founded. The president and his team have roundly criticized the entire impeachment process as a "sham" and a political exercise, the charges not even close to rising as impeachable offenses.
Nevertheless, House managers will have three eight-hour sessions over the next three days in which to plead their case, taking the trial through Friday. The president's defense team will also have the same allotment of time - 24 hours - to offer their case, on Saturday, Monday, and Tuesday, also in three eight-hour sessions. It's looking like the president will be acquitted on both charges in a reasonably short manner.
While there is still the possibility of calling new witnesses and adding documents, the Republicans in the Senate are unlikely to move forward on those grounds, considering that the House should have done its job better to make its case against the president without having to conjure up new charges and ddrag the country through a drawn-out, ridiculous process that could stretch into months of useless debate.
Meanwhile, Wall Street wasn't very upbeat about anything, as stocks took a rare nosedive to open the week's trading. Led by the Dow Industrials, losses were not substantial and would likely not lead to any more selling activity. Besides the Fed's nearly-continuous pumping of fresh cash into the hands of hedge funds and primary dealers (big banks and brokerages), the global outlook is a few shades light of gloomy while the rich and not-so-famous convene at Davos, Switzerland this week for the 50th annual World Economic Forum.
Business and political leaders from around the world heard President Trump speak on the glories of his "America First" policies, followed by another round of adult-shaming by eco-warrior princess, Greta Thunberg. The two cancelled each other out to some degree, though Trump's speech was longer and much more compelling than Thunberg's seven-minute screed.
Even with stocks lower, gold and silver took substantial hits at the start of the day and failed to recover to any great degree. WTI Crude oil futures continued to test the upper resistance at $58/barrel and failing, while the 10-year note was bid, finishing below a 1.80% yield for just the second time this year.
All told, it was a good day for non-financial activity, though the trading hardly reflected that. Instead, markets are displaying the kind of activity seen when stocks are overbought, as they currently are. Short-term, there's potential for a more sizable pullback, though it would take a gargantuan effort to offset the machinations of the Fed, which now has wrested nearly complete control of almost all markets.
Until the Federal Reserve takes its foot off the liquidity gas pedal, stocks should continue to outpace all other investments.
At the Close, Tuesday, January 21, 2020:
Dow Jones Industrial Average: 29,196.04, -152.06 (-0.52%)
NASDAQ: 9,370.81, -18.14 (-0.19%)
S&P 500: 3,320.79, -8.83 (-0.27%)
NYSE: 14,109.98, -73.22 (-0.52%)
The scene in Richmond was inspiring, if not daunting to those who oppose gun rights in the United States and elsewhere. The display of firearms - from shotguns and .22s to ARs, semi-automatic weapons, handguns and even a .50-caliber tank-buster - was impressive to say the least. The massive demonstration of an armed populace acting in a very peaceable manner without incident (only one arrest was made) served as a reminder of what America is all about: a free people willing to defend their rights against tyranny.
In congress, it was another kind of spectacle, with the managers from the House of Representatives sparring over trial rules with the president's legal team. The arguments by the House members who stand as prosecutors fell largely on deaf Republican ears as every one of the eleven proposed amendments brought up by Democrat leader Chuck Schumer was defeated along party lines, 53-47, bar one. Maine Senator, Susan Collins voted with Democrats on the 10th amendment proposed by Schumer, which would have allowed more time for both sides to respond to trial motions, but it still went down in flames, 52-48.
The marathon session lasted well into the night, finally adjourning just before two o'clock am. The defeat of the Democrats was resounding and bodes well for the president as the parties will begin making their cases when the House managers begin three days of opening arguments on Wednesday at 1:00 pm ET.
While the rhetoric was fiery and impassioned by both sides, the issues raised by the president's lawyers seemed more authentic and serious. Most of the Senators seated in the chamber are well aware that the charges levied by the Democratically-controlled House - Abuse of Power and Obstruction of Congress - are neither crimes nor are their arguments particularly well-founded. The president and his team have roundly criticized the entire impeachment process as a "sham" and a political exercise, the charges not even close to rising as impeachable offenses.
Nevertheless, House managers will have three eight-hour sessions over the next three days in which to plead their case, taking the trial through Friday. The president's defense team will also have the same allotment of time - 24 hours - to offer their case, on Saturday, Monday, and Tuesday, also in three eight-hour sessions. It's looking like the president will be acquitted on both charges in a reasonably short manner.
While there is still the possibility of calling new witnesses and adding documents, the Republicans in the Senate are unlikely to move forward on those grounds, considering that the House should have done its job better to make its case against the president without having to conjure up new charges and ddrag the country through a drawn-out, ridiculous process that could stretch into months of useless debate.
Meanwhile, Wall Street wasn't very upbeat about anything, as stocks took a rare nosedive to open the week's trading. Led by the Dow Industrials, losses were not substantial and would likely not lead to any more selling activity. Besides the Fed's nearly-continuous pumping of fresh cash into the hands of hedge funds and primary dealers (big banks and brokerages), the global outlook is a few shades light of gloomy while the rich and not-so-famous convene at Davos, Switzerland this week for the 50th annual World Economic Forum.
Business and political leaders from around the world heard President Trump speak on the glories of his "America First" policies, followed by another round of adult-shaming by eco-warrior princess, Greta Thunberg. The two cancelled each other out to some degree, though Trump's speech was longer and much more compelling than Thunberg's seven-minute screed.
Even with stocks lower, gold and silver took substantial hits at the start of the day and failed to recover to any great degree. WTI Crude oil futures continued to test the upper resistance at $58/barrel and failing, while the 10-year note was bid, finishing below a 1.80% yield for just the second time this year.
All told, it was a good day for non-financial activity, though the trading hardly reflected that. Instead, markets are displaying the kind of activity seen when stocks are overbought, as they currently are. Short-term, there's potential for a more sizable pullback, though it would take a gargantuan effort to offset the machinations of the Fed, which now has wrested nearly complete control of almost all markets.
Until the Federal Reserve takes its foot off the liquidity gas pedal, stocks should continue to outpace all other investments.
At the Close, Tuesday, January 21, 2020:
Dow Jones Industrial Average: 29,196.04, -152.06 (-0.52%)
NASDAQ: 9,370.81, -18.14 (-0.19%)
S&P 500: 3,320.79, -8.83 (-0.27%)
NYSE: 14,109.98, -73.22 (-0.52%)
Monday, January 20, 2020
WEEKEND WRAP: Virginia Lobby Day and Trump Impeachment Trial Take Center Stage
It being Martin Luther King Jr. Day, markets in the US are closed, but that didn't stop what looks to be more than 50,000 (actual number was about 22,000) patriots from heading down to Richmond, Virginia for the state's annual "Lobby Day," usually an opportunity for Virginia citizens to meet with their legislators and discuss various agendas facing the state.
This year, most people won't even get a chance to see a legislator, as Governor Ralph Shearer Northam (he of blackface shame) last week declared a state of emergency for the state capitol from January 17 to January 21, over fears of violence stemming from the gun rights crowds expected.
Northam was wrong to declare the emergency. After all, beyond the extra police presence, there are so many well-armed citizens in attendance, anybody thinking of causing trouble would probably think twice.
It's still early, and very chilly, in Richmond right now, but so far, the crowds have been peaceful. The day should end without incident unless something gets stirred up by anti-gun reactionaries like Antifa or a false flag event staged by one of the three-letter agencies overseeing the ongoings.
With many live streams being broadcast and thousands of people with cell phones, it's unlikely anything underhanded should happen, and if something does happen, it's likely to be recorded. This isn't going to be a rerun of the melee at Charlottesville back in 2017.
If Virginia's Lobby Day doesn't produce any grotesque footage for the fake media, then Tuesday, all eyes will turn to the impeachment trial which opens in the Senate. This is another made-for-TV type event, but Republicans led by Mitch McConnell (R-KY) are doing their level best to blunt the desired effect the Democrats are seeking, which is to drag out a long trial, complete with new witnesses, demands for documents, calls of a cover-up, issues of executive privilege ruled upon by the Supreme Court and other such nonsense.
The impeachment of President Trump was a sham from the start, when Intelligence Committee chairman Adam Schiff launched a plot and counseled a "whistleblower" over a single phone call made by Trump to Ukraine president Zelensky.
Drawing from shades of the Bill Clinton impeachment, there never was, nor never will be any "there" there.
If cooler heads (Republicans) prevail, this sorry escape into stupidity should be all over in less than two weeks. Many Americans wish it could end in two days, if not sooner.
With all the tumultuous political theater taking place it's a wonder that stocks move at all, especially in an upward direction, though the recent buying spree - which began in September 2019 - has been aptly aided by continuous money printing and liquidity being shoved into the REPO market by the Federal Reserve. Until the Fed ceases its now-daily operations, stocks will never suffer losses. It's just a matter of fact. Like Warren Buffett supposedly quipped, "Give me a trillion dollars and I'll show you a good time, too."
Meanwhile, inflation will be ramping up sooner, as per the wishes of the Fed, whose various voices and charts keep telling the American public that the US economy hasn't yet met their target of two percent inflation, as if higher inflation were a good thing (it's not). All along, however, inflation has been raging in health care, education, and housing, but those factors are not apparently part of the Fed's purview. Therefore, they continue to print at a rate faster than previous bouts of QE while Chairman Jerome Powell insists this round of liquidity pumping is "not QE."
Sure, we'll buy that. And that horse over there is actually a rabbit.
Just how hard has the liquidity pump been working?
Since mid-October, on a weekly basis, the Dow has been up 10 weeks, down three; the NASDAQ, since late September, 14 weekly gains, two weeks with losses; S&P: 13 up, two down; NYSE: 13 up, two down.
That's a nice-looking rabbit ya got there. Mind if I ride him?
At the Close, Friday, January 17, 2020:
Dow Jones Industrial Average: 29,348.10, +50.50 (+0.17%)
NASDAQ: 9,388.94, +31.81 (+0.34%)
S&P 500: 3,329.62, +12.81 (+0.39%)
NYSE: 14,183.20, +41.40 (+0.29%)
For the Week:
Dow: +524.33 (+1.82%)
NASDAQ: +210.08 (+2.29%)
S&P 500: +64.27 (+1.97%)
NYSE: +225.23 (+1.61%)
This year, most people won't even get a chance to see a legislator, as Governor Ralph Shearer Northam (he of blackface shame) last week declared a state of emergency for the state capitol from January 17 to January 21, over fears of violence stemming from the gun rights crowds expected.
Northam was wrong to declare the emergency. After all, beyond the extra police presence, there are so many well-armed citizens in attendance, anybody thinking of causing trouble would probably think twice.
It's still early, and very chilly, in Richmond right now, but so far, the crowds have been peaceful. The day should end without incident unless something gets stirred up by anti-gun reactionaries like Antifa or a false flag event staged by one of the three-letter agencies overseeing the ongoings.
With many live streams being broadcast and thousands of people with cell phones, it's unlikely anything underhanded should happen, and if something does happen, it's likely to be recorded. This isn't going to be a rerun of the melee at Charlottesville back in 2017.
If Virginia's Lobby Day doesn't produce any grotesque footage for the fake media, then Tuesday, all eyes will turn to the impeachment trial which opens in the Senate. This is another made-for-TV type event, but Republicans led by Mitch McConnell (R-KY) are doing their level best to blunt the desired effect the Democrats are seeking, which is to drag out a long trial, complete with new witnesses, demands for documents, calls of a cover-up, issues of executive privilege ruled upon by the Supreme Court and other such nonsense.
The impeachment of President Trump was a sham from the start, when Intelligence Committee chairman Adam Schiff launched a plot and counseled a "whistleblower" over a single phone call made by Trump to Ukraine president Zelensky.
Drawing from shades of the Bill Clinton impeachment, there never was, nor never will be any "there" there.
If cooler heads (Republicans) prevail, this sorry escape into stupidity should be all over in less than two weeks. Many Americans wish it could end in two days, if not sooner.
With all the tumultuous political theater taking place it's a wonder that stocks move at all, especially in an upward direction, though the recent buying spree - which began in September 2019 - has been aptly aided by continuous money printing and liquidity being shoved into the REPO market by the Federal Reserve. Until the Fed ceases its now-daily operations, stocks will never suffer losses. It's just a matter of fact. Like Warren Buffett supposedly quipped, "Give me a trillion dollars and I'll show you a good time, too."
Meanwhile, inflation will be ramping up sooner, as per the wishes of the Fed, whose various voices and charts keep telling the American public that the US economy hasn't yet met their target of two percent inflation, as if higher inflation were a good thing (it's not). All along, however, inflation has been raging in health care, education, and housing, but those factors are not apparently part of the Fed's purview. Therefore, they continue to print at a rate faster than previous bouts of QE while Chairman Jerome Powell insists this round of liquidity pumping is "not QE."
Sure, we'll buy that. And that horse over there is actually a rabbit.
Just how hard has the liquidity pump been working?
Since mid-October, on a weekly basis, the Dow has been up 10 weeks, down three; the NASDAQ, since late September, 14 weekly gains, two weeks with losses; S&P: 13 up, two down; NYSE: 13 up, two down.
That's a nice-looking rabbit ya got there. Mind if I ride him?
At the Close, Friday, January 17, 2020:
Dow Jones Industrial Average: 29,348.10, +50.50 (+0.17%)
NASDAQ: 9,388.94, +31.81 (+0.34%)
S&P 500: 3,329.62, +12.81 (+0.39%)
NYSE: 14,183.20, +41.40 (+0.29%)
For the Week:
Dow: +524.33 (+1.82%)
NASDAQ: +210.08 (+2.29%)
S&P 500: +64.27 (+1.97%)
NYSE: +225.23 (+1.61%)
Thursday, January 16, 2020
SNAFU Market Thrives On Chaos As China Deal Signed, Trump Impeached (again)
Since it's probably naive to believe that US equity markets are anything other than "fair and open," Wednesday's solid gains - record highs all around - have more to do with internal tinkering than any outside effects. Algorithms that apparently think sending articles of impeachment against President Donal J. Trump from the House of Representatives over to the Senate (after a month-long delay) is not as important an event as the signing of Phase 1 of the US-Chaina trade accord, both of which occurred almost simultaneously.
One can wonder exactly what traders are thinking these early days of 2020, but the algos may be on the right track given that the impeachment drama has been and ought to have been discounted as bad theatre, whereas the trade deal might turn out to be a big deal for global commerce.
No matter the details, stocks continue to soar, practically every day notching new record highs, without as much as a superfluous pullback every few weeks or so. The driver of this irrationals madness has recently been the Fed's easy money via daily repo injections, with the Federal Reserve providing ready cash in exchange for treasury bills, notes, and bonds they sold to primary dealers just days prior.
It's an open secret that the Fed's balance sheet is growing by monstrous proportions again, having begun in September and continued to burgeon through the holidays and into the new year. The Fed has plans to cease such onerous operations sometime in April, though there's ample consideration that such a move might prompt a dipsy-doo on the order of the ones that accompanied rate tightening in October and again in December of 2018.
For now, the bloom is on the rose and for all intents manages to stay blushing through impeachments, royal defections, plane crashes, Middle East noise, and all other hyperbolic geopolitical events. If nothing is done to stop the SNAFU (Situation Normal, All F--ked Up) 2020 could end up being a lot like 2019, replete with outsized gains for everybody, despite chaos all around.
At the Close, Wednesday. January 15, 2020:
Dow Jones Industrial Average: 29,030.22, +90.55 (+0.31%)
NASDAQ: 9,258.70, +7.37 (+0.08%)
S&P 500: 3,289.29, +6.14 (+0.19%)
NYSE Composite: 14,053.23, +16.10 (+0.11)
One can wonder exactly what traders are thinking these early days of 2020, but the algos may be on the right track given that the impeachment drama has been and ought to have been discounted as bad theatre, whereas the trade deal might turn out to be a big deal for global commerce.
No matter the details, stocks continue to soar, practically every day notching new record highs, without as much as a superfluous pullback every few weeks or so. The driver of this irrationals madness has recently been the Fed's easy money via daily repo injections, with the Federal Reserve providing ready cash in exchange for treasury bills, notes, and bonds they sold to primary dealers just days prior.
It's an open secret that the Fed's balance sheet is growing by monstrous proportions again, having begun in September and continued to burgeon through the holidays and into the new year. The Fed has plans to cease such onerous operations sometime in April, though there's ample consideration that such a move might prompt a dipsy-doo on the order of the ones that accompanied rate tightening in October and again in December of 2018.
For now, the bloom is on the rose and for all intents manages to stay blushing through impeachments, royal defections, plane crashes, Middle East noise, and all other hyperbolic geopolitical events. If nothing is done to stop the SNAFU (Situation Normal, All F--ked Up) 2020 could end up being a lot like 2019, replete with outsized gains for everybody, despite chaos all around.
At the Close, Wednesday. January 15, 2020:
Dow Jones Industrial Average: 29,030.22, +90.55 (+0.31%)
NASDAQ: 9,258.70, +7.37 (+0.08%)
S&P 500: 3,289.29, +6.14 (+0.19%)
NYSE Composite: 14,053.23, +16.10 (+0.11)
Thursday, January 2, 2020
2019 Is Done: Stocks Roared, Trump Still President in 2020
2019 is over, and aren't we all so happy.
By many measures, it was a somewhat unremarkable year, ending with odd and twisted political theater, courtesy of Speaker of the House, Nancy Pelosi, and her merry band of miscreants, led by congresspeople Adam Schiff and Gerald Nadler, chairmen of, respectively, Intelligence and Judiciary committees. In the case of Schiff, the obvious misappropriation of his ilk being somehow related to intelligence was as humorless as it was frightening.
What made Pelosi's gambit significant was not that she impeached a president, but that she impeached one Donald J. Trump, a populist president who apparently did nothing wrong other than defeat the chosen candidate of the left, Hillary Rodham Clinton, in the presidential race of 2016. Thus, three years a a few months hither, Trump is impeached on charges that are as vacuous and ephemeral as the open-and-closed-door hearings themselves: Abuse of Power and Obstruction of Congress, neither of which are codified as criminal acts, and almost assuredly do not rise to the level of "high crimes and misdemeanors" outlined in the US constitution. In the final analysis, Trump's real crime is being nearly universally hated by leading Democrat politicians, movie stars, and the establishment media.
But that was not all.
Pelosi and nearly all of her fellow Democrats in the House voted along strict party lines and then failed to name managers or send the articles of impeachment over to the Senate for a trial, also prescribed by the constitution, leaving the president, and the nation, in a state of suspended impeachment limbo. This final, futile, feckless act of desperation came after months of Pelosi claiming that Trump needed to be impeached as quickly as possible as he posed a grave, immediate threat to our nation's security.
That argument went right out a window high on the Capitol, along with the baby, the bathwater, the Green New Deal, and the electoral hopes of a plethora Democrat candidates for federal offices in November 2020, not the least of which were named Joe Biden, Elizabeth Warren, and Pete whatever-his-name-is, mayor of South Bend, Indiana.
The funny thing about Mayor Pete, incidentally, is not that he is openly gay (the priests running the University of Notre Dame are still trying to downplay his position), but that the mainstream media almost never mentions this salient fact. Maybe they think that since he looks straight, people will forget or simply overlook his sexual inclination.
That's a good one. The MSM continues to push their agenda, which recently has devolved into a convoluted collection of mistruths, untruths, hidden truths, innuendo, scare tactics, race-baiting, gender-bending, misinformation, disinformation, lies, statistics, more lies, omissions, Facebook posts, deleted Tweets, and Instagram memes, mostly consisting of accusations of President Trump strangling kittens, starting wars, ending wars, killing immigrant children, or otherwise undermining democracy.
It's so sad that it has become almost laughable, but not quite yet. The mainstream media is saving the laugh track stuff for the primaries and general election. Chuck Todd, moderator of NBC's Meet the Press thinks that he, his network, the New York Times and Washington Post more believable than the president. That's how deluded and delusional most of the apparatchik reporters, readers, reciters and anchors are, but none more than the non-journalist, Todd. The mainstream media gave birth to the malady known as TDS (Trump Derangement Syndrome) and they continue to feed it. They're like doctors prescribing amphetamines to meth heads.
2019 finished on a nearly comical note if not for the snarly seriousness of the matter. Attempting to remove a sitting president isn't something that should be undertaken without careful consideration of the consequences. Democrats have not done their homework and have put the American public under considerable stress, needing relief.
For the financial world, New Year's Eve was especially celebratory, with champagne toasts to a grand and glorious annum of outsize gains for stocks. The major indices - following the sudden and sharp declines of 2018's fourth quarter - posted gains as follows:
Those are pretty good numbers.
Will they be repeated in 2020? Advance indications are that the bull market will continue, but, as every prospectus in the history of financial instruments and advisors purports, past performance is no guarantee of future results. Keep that in mind as the Fed will continue to keep flooding the market with liquidity until it decides to stop, which can happen at any time, without much notice.
Concern about the Fed changing its dovish, dulcet tune is not something on the minds of most investors heading into the new year. The Fed has shown itself to be accommodative at all times, no matter the circumstance, and they're likely to continue to be so. What used to be known as "applying the brakes" of an overheating economy by raising interest rates is not a probability in the coming year, as the economy shows about as much potential to overheat as a potato has to become an orange. It's not going to happen, and neither is a recession, because the Fed won't have that.
Precious metals also found bids. Gold posted a marvelous gain of 18.43%, rising from 1279.00 to 1514.75 over the course of 2019.
Silver was similarly impressive, going from 15.47 to 18.05 through the year for a profit of 16.68%.
To the dismay of consumers everywhere, WTI Crude Oil also experienced a rise in price, from 47.09 on January 3, 2019, to 61.68 on December 30, up 30.99%. That sent North American gas prices higher at the pump and elsewhere.
Prices for just about everything anybody would want or need were higher in 2019, by varying amounts. For that, we have the Fed, trade wars, tariffs, and greed to thank.
OK. 2020 is a thing. It's out of beta. Have at it.
At the Close, Tuesday, December 31, 2019:
Dow Jones Industrial Average: 28,538.44, +76.30 (+0.27%)
NASDAQ: 8,972.60, +26.61 (+0.30%)
S&P 500: 3,230.78, +9.49 (+0.29%)
NYSE Composite: 13,913.03, +36.88 (+0.27%)
 |
| Donald Trump with Brandi Brandt on the cover of Playboy magazine, March 1990 |
By many measures, it was a somewhat unremarkable year, ending with odd and twisted political theater, courtesy of Speaker of the House, Nancy Pelosi, and her merry band of miscreants, led by congresspeople Adam Schiff and Gerald Nadler, chairmen of, respectively, Intelligence and Judiciary committees. In the case of Schiff, the obvious misappropriation of his ilk being somehow related to intelligence was as humorless as it was frightening.
What made Pelosi's gambit significant was not that she impeached a president, but that she impeached one Donald J. Trump, a populist president who apparently did nothing wrong other than defeat the chosen candidate of the left, Hillary Rodham Clinton, in the presidential race of 2016. Thus, three years a a few months hither, Trump is impeached on charges that are as vacuous and ephemeral as the open-and-closed-door hearings themselves: Abuse of Power and Obstruction of Congress, neither of which are codified as criminal acts, and almost assuredly do not rise to the level of "high crimes and misdemeanors" outlined in the US constitution. In the final analysis, Trump's real crime is being nearly universally hated by leading Democrat politicians, movie stars, and the establishment media.
But that was not all.
Pelosi and nearly all of her fellow Democrats in the House voted along strict party lines and then failed to name managers or send the articles of impeachment over to the Senate for a trial, also prescribed by the constitution, leaving the president, and the nation, in a state of suspended impeachment limbo. This final, futile, feckless act of desperation came after months of Pelosi claiming that Trump needed to be impeached as quickly as possible as he posed a grave, immediate threat to our nation's security.
That argument went right out a window high on the Capitol, along with the baby, the bathwater, the Green New Deal, and the electoral hopes of a plethora Democrat candidates for federal offices in November 2020, not the least of which were named Joe Biden, Elizabeth Warren, and Pete whatever-his-name-is, mayor of South Bend, Indiana.
The funny thing about Mayor Pete, incidentally, is not that he is openly gay (the priests running the University of Notre Dame are still trying to downplay his position), but that the mainstream media almost never mentions this salient fact. Maybe they think that since he looks straight, people will forget or simply overlook his sexual inclination.
That's a good one. The MSM continues to push their agenda, which recently has devolved into a convoluted collection of mistruths, untruths, hidden truths, innuendo, scare tactics, race-baiting, gender-bending, misinformation, disinformation, lies, statistics, more lies, omissions, Facebook posts, deleted Tweets, and Instagram memes, mostly consisting of accusations of President Trump strangling kittens, starting wars, ending wars, killing immigrant children, or otherwise undermining democracy.
It's so sad that it has become almost laughable, but not quite yet. The mainstream media is saving the laugh track stuff for the primaries and general election. Chuck Todd, moderator of NBC's Meet the Press thinks that he, his network, the New York Times and Washington Post more believable than the president. That's how deluded and delusional most of the apparatchik reporters, readers, reciters and anchors are, but none more than the non-journalist, Todd. The mainstream media gave birth to the malady known as TDS (Trump Derangement Syndrome) and they continue to feed it. They're like doctors prescribing amphetamines to meth heads.
2019 finished on a nearly comical note if not for the snarly seriousness of the matter. Attempting to remove a sitting president isn't something that should be undertaken without careful consideration of the consequences. Democrats have not done their homework and have put the American public under considerable stress, needing relief.
For the financial world, New Year's Eve was especially celebratory, with champagne toasts to a grand and glorious annum of outsize gains for stocks. The major indices - following the sudden and sharp declines of 2018's fourth quarter - posted gains as follows:
- Dow: ended 2018 at 23,327.46; ended 2019 at 28,538.44; 22.34% gain
- NASDAQ: ended 2018 at 6,635.28; ended 2019 at 8,972.60; 35.25% gain
- S&P 500: ended 2018 at 2,506.85; ended 2019 at 3,230.78; 28.88% gain
- NYSE Composite: ended 2018 at 11,374.39; ended 2019 at 13,913.03; 22.32% gain
Those are pretty good numbers.
Will they be repeated in 2020? Advance indications are that the bull market will continue, but, as every prospectus in the history of financial instruments and advisors purports, past performance is no guarantee of future results. Keep that in mind as the Fed will continue to keep flooding the market with liquidity until it decides to stop, which can happen at any time, without much notice.
Concern about the Fed changing its dovish, dulcet tune is not something on the minds of most investors heading into the new year. The Fed has shown itself to be accommodative at all times, no matter the circumstance, and they're likely to continue to be so. What used to be known as "applying the brakes" of an overheating economy by raising interest rates is not a probability in the coming year, as the economy shows about as much potential to overheat as a potato has to become an orange. It's not going to happen, and neither is a recession, because the Fed won't have that.
Precious metals also found bids. Gold posted a marvelous gain of 18.43%, rising from 1279.00 to 1514.75 over the course of 2019.
Silver was similarly impressive, going from 15.47 to 18.05 through the year for a profit of 16.68%.
To the dismay of consumers everywhere, WTI Crude Oil also experienced a rise in price, from 47.09 on January 3, 2019, to 61.68 on December 30, up 30.99%. That sent North American gas prices higher at the pump and elsewhere.
Prices for just about everything anybody would want or need were higher in 2019, by varying amounts. For that, we have the Fed, trade wars, tariffs, and greed to thank.
OK. 2020 is a thing. It's out of beta. Have at it.
At the Close, Tuesday, December 31, 2019:
Dow Jones Industrial Average: 28,538.44, +76.30 (+0.27%)
NASDAQ: 8,972.60, +26.61 (+0.30%)
S&P 500: 3,230.78, +9.49 (+0.29%)
NYSE Composite: 13,913.03, +36.88 (+0.27%)
Friday, December 27, 2019
Shades of the Late 90s: S&P Poised to Be Best Year Since 1997
With just three more sessions left in the year, the S&P 500 is on the cusp of becoming the best year for stock investors in 22 years, since 1997, recollecting back to the halcyon days of the tech and dotcom boom (and subsequent bust).
With the close on Thursday of 3,229.91, the S&P is up 29.24%. Friday's futures are pointing to a positive open, and the index needs to gain just less than 12 points to surpass 2013's gain of 29.60% to become not just the best year of the decade, but of the nascent 21st century. 22 years ago, in 1997, the index gained 31.01%, and that was on the back of gains of 34% and 20% in 1995 and 1996, respectively.
Closing out 2018 on December 31 at 2,506.85, the S&P has piled on more than 700 points, but not all of that was in record territory. Recall that the final three months of 2018 were downright frightening to investors, as the index tumbled from a September 20 closing high of 2,930.75 to a low of 2,351.10 on December 24, prior to Treasury Secretary Steven Mnuchin's (in)famous phone call, purportedly, to the Plunge Protection Team (PPT), aka the President's Working Group on Financial Markets.
The rest is for the history books or maybe Christmas fantasies. The tremendous slide in stocks was halted with the market closed on December 25. The index had declined from 2,743.79 on November 28 by nearly 400 points and that was after the nearly 300 point losses from late September through October with a brief rally prior to Thanksgiving.
On the 26th of December, stocks boomed, with the S&P gaining an astonishing 116 points, standing at 2,467.70 on the close of trading. Wall Street's worst fears had been vanquished. Stability returned and little by little stocks came back into favor, with slow but steady gains through the early months of 2019, finally setting a new all-time high on April 23rd, when the index closed at 2,933.68. The mini bear market lasted all of seven months.
Through the middle of the year, gains were sporadic due to tensions over the trade war between China and the United States, though any negative news was quickly dispatched with hope for a breakthrough in days following. This kind of knee-jerk up and down action continued through summer and into the fall, with the index first bounding through the 3,000 mark on July 12.
The celebration was short-lived, however, as the index dipped back below 2,850 in mid-August, but began to gather momentum which carried it through the end of the third quarter. From October 1 forward to today, the S&P has tacked on nearly another 300 points, cresting over 3,000 again for the final time on October 23. The gains in November and December alone are approaching 200 points, about seven percent.
Should the S&P close out the year with reasonable gains - and there's little reason to believe that it won't - it could be the beginning of something big, if one is a believer in the predictive nature of charts and the cyclical behavior of stocks, politics and people.
Going back to 1995, when the S&P pumped higher by 34.11% - the best gain since 1958 - the following four years were all solid ones for investors. A 20.26% gain in 1996 was followed by gains of 31.01 in 1997, 26.67 in '98, and 19.53 in 1999. Those were also the years of Bill Clinton's second term as president of the United States, and, similarly to today's political circus, he was impeached, his affair with Monica Lewinsky occurring in 1994, his eventual impeachment by the House of Representatives and subsequent acquittal by the Senate in 1998.
While the parallels between the final years of the 1990s to today's market and political environment may be described as strikingly similar there is no assuredness that the same bounty will befall investors during what is likely to be President Trump's second term in office. Since the recent impeachment fiasco has fallen flat and is currently stalled out, perhaps the Democrats in the House will go for a second try after the elections in November of next year (or maybe even before).
Democrats' undying allegiance to the faith of "orange man bad" is assured. However, it appears that the president, for all his warts and flaws and tweets, has been doing a bang-up job on the economy, and it's his successes that have triggered the Dems' ire for the most part. If the Senate remains in Republican hands, it's a safe bet that Trump will reign for four more years, and that possibly, his economic policies (remember, he's made and lost billions of dollars in private life over the years) will usher in four more years of outstanding returns on the stock market.
One caveat to bear in mind. After 1999, some may remember what happened. The tech boom went bust. The S&P lost 10.14% in 2000, 13.14% in 2001, and 23.37% in 2002. Of course, the NASDAQ fared much worse, losing 78% over the same three years.
As we approach a new decade, think positive thoughts.
At the Close, Thursday, December 26, 2019:
Dow Jones Industrial Average: 28,621.39, +105.94 (+0.37%)
NASDAQ: 9,022.39, +69.51 (+0.78%)
S&P 500: 3,239.91, +16.53 (+0.51%)
NYSE Composite: 13,940.42, +45.28 (+0.33%)
With the close on Thursday of 3,229.91, the S&P is up 29.24%. Friday's futures are pointing to a positive open, and the index needs to gain just less than 12 points to surpass 2013's gain of 29.60% to become not just the best year of the decade, but of the nascent 21st century. 22 years ago, in 1997, the index gained 31.01%, and that was on the back of gains of 34% and 20% in 1995 and 1996, respectively.
Closing out 2018 on December 31 at 2,506.85, the S&P has piled on more than 700 points, but not all of that was in record territory. Recall that the final three months of 2018 were downright frightening to investors, as the index tumbled from a September 20 closing high of 2,930.75 to a low of 2,351.10 on December 24, prior to Treasury Secretary Steven Mnuchin's (in)famous phone call, purportedly, to the Plunge Protection Team (PPT), aka the President's Working Group on Financial Markets.
The rest is for the history books or maybe Christmas fantasies. The tremendous slide in stocks was halted with the market closed on December 25. The index had declined from 2,743.79 on November 28 by nearly 400 points and that was after the nearly 300 point losses from late September through October with a brief rally prior to Thanksgiving.
On the 26th of December, stocks boomed, with the S&P gaining an astonishing 116 points, standing at 2,467.70 on the close of trading. Wall Street's worst fears had been vanquished. Stability returned and little by little stocks came back into favor, with slow but steady gains through the early months of 2019, finally setting a new all-time high on April 23rd, when the index closed at 2,933.68. The mini bear market lasted all of seven months.
Through the middle of the year, gains were sporadic due to tensions over the trade war between China and the United States, though any negative news was quickly dispatched with hope for a breakthrough in days following. This kind of knee-jerk up and down action continued through summer and into the fall, with the index first bounding through the 3,000 mark on July 12.
The celebration was short-lived, however, as the index dipped back below 2,850 in mid-August, but began to gather momentum which carried it through the end of the third quarter. From October 1 forward to today, the S&P has tacked on nearly another 300 points, cresting over 3,000 again for the final time on October 23. The gains in November and December alone are approaching 200 points, about seven percent.
Should the S&P close out the year with reasonable gains - and there's little reason to believe that it won't - it could be the beginning of something big, if one is a believer in the predictive nature of charts and the cyclical behavior of stocks, politics and people.
Going back to 1995, when the S&P pumped higher by 34.11% - the best gain since 1958 - the following four years were all solid ones for investors. A 20.26% gain in 1996 was followed by gains of 31.01 in 1997, 26.67 in '98, and 19.53 in 1999. Those were also the years of Bill Clinton's second term as president of the United States, and, similarly to today's political circus, he was impeached, his affair with Monica Lewinsky occurring in 1994, his eventual impeachment by the House of Representatives and subsequent acquittal by the Senate in 1998.
While the parallels between the final years of the 1990s to today's market and political environment may be described as strikingly similar there is no assuredness that the same bounty will befall investors during what is likely to be President Trump's second term in office. Since the recent impeachment fiasco has fallen flat and is currently stalled out, perhaps the Democrats in the House will go for a second try after the elections in November of next year (or maybe even before).
Democrats' undying allegiance to the faith of "orange man bad" is assured. However, it appears that the president, for all his warts and flaws and tweets, has been doing a bang-up job on the economy, and it's his successes that have triggered the Dems' ire for the most part. If the Senate remains in Republican hands, it's a safe bet that Trump will reign for four more years, and that possibly, his economic policies (remember, he's made and lost billions of dollars in private life over the years) will usher in four more years of outstanding returns on the stock market.
One caveat to bear in mind. After 1999, some may remember what happened. The tech boom went bust. The S&P lost 10.14% in 2000, 13.14% in 2001, and 23.37% in 2002. Of course, the NASDAQ fared much worse, losing 78% over the same three years.
As we approach a new decade, think positive thoughts.
At the Close, Thursday, December 26, 2019:
Dow Jones Industrial Average: 28,621.39, +105.94 (+0.37%)
NASDAQ: 9,022.39, +69.51 (+0.78%)
S&P 500: 3,239.91, +16.53 (+0.51%)
NYSE Composite: 13,940.42, +45.28 (+0.33%)
Sunday, December 22, 2019
WEEKEND WRAP: The World Might End, But Nobody Would Care
There were two major events this week, but hardly anyone cared about them.
First, President Trump was impeached. Well, at least that's what the House Democrats and Nancy Pelosi like to think, though they haven't actually sent the articles of impeachment over to the Senate for a trial.
Second, all of the major indices in the US reached new all-time highs. Not only did most people not care - it's become a foregone conclusion that stocks will always go higher, just like house prices in 2004-2007 - most didn't even notice. After all, it's close to Christmas and everybody is busy shopping, cooking, preparing to give people things they don't need, purchased with money they shouldn't be spending.
As laid back as the week was, the heat went down here at Money Daily and we didn't publish on Thursday. It was chilly and we were preoccupied with getting our trusty backup propane heater up and running. We did, it's warmer now, but the main heating unit is shot and needs to be replaced. That is supposed to happen Monday.
Another item not making any headlines was the spiking of the treasury yield curve. During the week it steepened, with the 10-year note striking a yield of 1.92% on Wednesday and holding there through Friday. The short end of the curve is a bit inverted, with one-year bills yielding more than shorter durations, though not by much. The Fed probably has all of this under control. No need to elaborate or give a darn.
If you're reading this and don't care, not to worry. Nobody else gives a hoot either, apparently.
Probably, this is what happens when markets are rigged, the media lies constantly, and politicians act like a crazed bunch of monkeys released from the local zoo. People get used to things being FUBAR and just tune out.
An asteroid could whack the earth and throw it off its axis, destroying most life on the planet and nobody would think twice about how horrible an end that would be. The remaining people would probably try to go to work the next day or turn on the TV and watch a blank screen, thinking that it's improved over what used to be broadcast.
And stocks would be up.
At the Close, Friday, December 20, 2019:
Dow Jones Industrial Average: 28,455.09, +78.13 (+0.28%)
NASDAQ: 8,924.96, +37.74 (+0.42%)
S&P 500: 3,221.22, +15.85 (+0.49%)
NYSE Composite: 13,889.25, +57.58 (+0.42%)
For the Week:
Dow: +319.71 (+1.14%)
NASDAQ: +190.08 (+2.18%)
S&P 500: +52.42 (+1.65%)
NYSE Composite: +191.91 (+1.40%)
First, President Trump was impeached. Well, at least that's what the House Democrats and Nancy Pelosi like to think, though they haven't actually sent the articles of impeachment over to the Senate for a trial.
Second, all of the major indices in the US reached new all-time highs. Not only did most people not care - it's become a foregone conclusion that stocks will always go higher, just like house prices in 2004-2007 - most didn't even notice. After all, it's close to Christmas and everybody is busy shopping, cooking, preparing to give people things they don't need, purchased with money they shouldn't be spending.
As laid back as the week was, the heat went down here at Money Daily and we didn't publish on Thursday. It was chilly and we were preoccupied with getting our trusty backup propane heater up and running. We did, it's warmer now, but the main heating unit is shot and needs to be replaced. That is supposed to happen Monday.
Another item not making any headlines was the spiking of the treasury yield curve. During the week it steepened, with the 10-year note striking a yield of 1.92% on Wednesday and holding there through Friday. The short end of the curve is a bit inverted, with one-year bills yielding more than shorter durations, though not by much. The Fed probably has all of this under control. No need to elaborate or give a darn.
If you're reading this and don't care, not to worry. Nobody else gives a hoot either, apparently.
Probably, this is what happens when markets are rigged, the media lies constantly, and politicians act like a crazed bunch of monkeys released from the local zoo. People get used to things being FUBAR and just tune out.
An asteroid could whack the earth and throw it off its axis, destroying most life on the planet and nobody would think twice about how horrible an end that would be. The remaining people would probably try to go to work the next day or turn on the TV and watch a blank screen, thinking that it's improved over what used to be broadcast.
And stocks would be up.
At the Close, Friday, December 20, 2019:
Dow Jones Industrial Average: 28,455.09, +78.13 (+0.28%)
NASDAQ: 8,924.96, +37.74 (+0.42%)
S&P 500: 3,221.22, +15.85 (+0.49%)
NYSE Composite: 13,889.25, +57.58 (+0.42%)
For the Week:
Dow: +319.71 (+1.14%)
NASDAQ: +190.08 (+2.18%)
S&P 500: +52.42 (+1.65%)
NYSE Composite: +191.91 (+1.40%)
Thursday, December 19, 2019
Despicable Democrats Impeach President Trump, Who Will Be Cleared By The Senate
Well, they've gone and done it.
The Democrat-controlled House of Representatives has voted - completely along party lines - to approve articles of impeachment, which at some point will go to the Senate, where President Donald J. Trump will almost certainly be acquitted in what figures to be a very short trial, with few witnesses, if any.
The reason the trial will be of small duration is because the Democrats, via Adam Schiff's Intelligence Committee, and Jerry Nadler's Judiciary Committee, have already ginned up enough "evidence" of Mr. Trump's supposed "Abuse of Power" and "Obstruction of Congress," that the senators don't really need to see or hear anything else. What they have before them is so flimsy, devoid of substance, and charges the president with actions that are not even crimes, that they will hopefully turn the matter out in a few days. Anything longer-lasting will be just more mud-slinging at a president who has done nothing wrong, certainly nothing even remotely impeachable.
Wednesday, December 18, 2019, was a sad day for the rule of law in the United States of America. The Democrats, led by Speaker of the House Nancy Pelosi, have foisted upon the public a shameless exercise in partisan witch-baiting. The mainstream media deserves just as much public rancor as the House Democrats for not calling these partisan hacks out on their theatrics. This impeachment exercise has been and will continue to be a complete and utter waste of everybody's time. It will accomplish nothing, except possibly to finally rid the lower chamber of congress of the Democrat majority. In that regard, December 18 may end up going down in the history books of a glorious great day of change and retribution, dashing the Democrats into the dustbin of history.
Whatever one's politics, this impeachment fiasco never rose near to seriousness. It was always a goose-chase, a farcical enterprise foisted upon the public by rank amateurs who had nothing better to do with their times in office than to take out their frustrations in a most despicable manner. The Democrats may want to brand Republican supporters as "deplorables," but these cretins masquerading as respectable representatives of the public weal, are truly disgraceful. The sooner this all gets behind the American public, the better.
As far as a market reaction, there wasn't one, as the tiresome "debate" raged on in the House until after markets were closed for the day, though there might be some hint of derision come Thursday after the bell.
Trading has been sluggish, which it usually is in the "lull" week before Christmas, which took a back seat to politics this year. There isn't much with which to move markets. Everybody seems to want to head out of town for the holidays, sooner, rather than later, and who can blame them?
At the Close, Wednesday, December 18, 2019:
Dow Jones Industrial Average: 28,239.28, -27.88 (-0.10%)
NASDAQ: 8,827.73, +4.38 (+0.05%)
S&P 500: 3,191.14, -1.38 (-0.04%)
NYSE Composite: 13,799.21, +3.86 (+0.03%)
The Democrat-controlled House of Representatives has voted - completely along party lines - to approve articles of impeachment, which at some point will go to the Senate, where President Donald J. Trump will almost certainly be acquitted in what figures to be a very short trial, with few witnesses, if any.
The reason the trial will be of small duration is because the Democrats, via Adam Schiff's Intelligence Committee, and Jerry Nadler's Judiciary Committee, have already ginned up enough "evidence" of Mr. Trump's supposed "Abuse of Power" and "Obstruction of Congress," that the senators don't really need to see or hear anything else. What they have before them is so flimsy, devoid of substance, and charges the president with actions that are not even crimes, that they will hopefully turn the matter out in a few days. Anything longer-lasting will be just more mud-slinging at a president who has done nothing wrong, certainly nothing even remotely impeachable.
Wednesday, December 18, 2019, was a sad day for the rule of law in the United States of America. The Democrats, led by Speaker of the House Nancy Pelosi, have foisted upon the public a shameless exercise in partisan witch-baiting. The mainstream media deserves just as much public rancor as the House Democrats for not calling these partisan hacks out on their theatrics. This impeachment exercise has been and will continue to be a complete and utter waste of everybody's time. It will accomplish nothing, except possibly to finally rid the lower chamber of congress of the Democrat majority. In that regard, December 18 may end up going down in the history books of a glorious great day of change and retribution, dashing the Democrats into the dustbin of history.
Whatever one's politics, this impeachment fiasco never rose near to seriousness. It was always a goose-chase, a farcical enterprise foisted upon the public by rank amateurs who had nothing better to do with their times in office than to take out their frustrations in a most despicable manner. The Democrats may want to brand Republican supporters as "deplorables," but these cretins masquerading as respectable representatives of the public weal, are truly disgraceful. The sooner this all gets behind the American public, the better.
As far as a market reaction, there wasn't one, as the tiresome "debate" raged on in the House until after markets were closed for the day, though there might be some hint of derision come Thursday after the bell.
Trading has been sluggish, which it usually is in the "lull" week before Christmas, which took a back seat to politics this year. There isn't much with which to move markets. Everybody seems to want to head out of town for the holidays, sooner, rather than later, and who can blame them?
At the Close, Wednesday, December 18, 2019:
Dow Jones Industrial Average: 28,239.28, -27.88 (-0.10%)
NASDAQ: 8,827.73, +4.38 (+0.05%)
S&P 500: 3,191.14, -1.38 (-0.04%)
NYSE Composite: 13,799.21, +3.86 (+0.03%)
Monday, December 16, 2019
WEEKEND WRAP: Trump Charged, Johnson Elected, Fed Throws Money to the Wind
What a week!
Not only was President Trump brought up on impeachment charges of abuse of power and obstruction of congress (whatever that is) by Jerry Nadler's gutless judiciary committee, it came on the heels of a crushing conservative victory for Boris Johnson in England. And that came just after the Federal Reserve's FOMC decided to keep the federal funds interest rate right where it was, at 1.50-1.75%.
All of this happened on Wednesday, Thursday, and Friday. There was little time, in between, for the United States and China to announce, denounce, defer, define, defend, and eventually demystify the outlines of some vague phase one trade deal, which still hasn't happened, but is supposed to, any time, any day now.
So there it was, except for a few details that may have slipped over the transom or under the proverbial rug, like the Federal Reserve supplying $500 billion in liquidity to REPO markets to handle "the turn" from December 31, 2019 to January 1, 2020.
That little nugget came and went. Everybody was too much involved over impeachment and Boris and the trade deal to notice. Such an amount of money just to get from 2019 to 2020? It sounded absurd, spending half a trillion dollars to change the calendar. Remember, there was $700 billion in TARP, back in 2009, and that supposedly rescued the entire global financial system. This amount is more than two thirds of that.
In a related story, Lee Adler of The Wall Street Examiner purports that the Federal Reserve has bought up 90% of the government's issuance of treasury bills, notes, and bonds since September 16, effectively monetizing the debt.
So, this $500 billion of liquidity from the benevolent Fed, is it a precursor of more debt monetization, or simply a safeguard against some hedge fund or larger institution crashing as one year turns to the next? Its hard to say. Like recessions, the world will likely have to wait until after the fact to find out.
On a weekly basis, the Dow has gained in seven of the last 10 weeks. The S&P was up nine of the last 10, the NASDAQ moved higher nine of the last 11, and the Composite Index finished higher nine out of the last 10 and this week closed at an all-time high, proving, once again, that it's folly to fight the Fed.
As a footnote to the coming week, the full house is expected to vote on articles of impeachment on Wednesday.
At the Close, Friday, December 13, 2019:
Dow Jones Industrial Average: 28,135.38, +3.28 (+0.01%)
NASDAQ: 8,734.88, +17.56 (+0.20%)
S&P 500: 3,168.80, +0.23 (+0.01%)
NYSE Composite: 13,697.34, -0.06 (-0.00%)
For the Week:
Dow: +120.32 (+0.43%)
NASDAQ: +78.35 (+0.91%)
S&P 500: +22.89 (+0.73%)
NYSE Composite: +109.05 (+0.80%)
Not only was President Trump brought up on impeachment charges of abuse of power and obstruction of congress (whatever that is) by Jerry Nadler's gutless judiciary committee, it came on the heels of a crushing conservative victory for Boris Johnson in England. And that came just after the Federal Reserve's FOMC decided to keep the federal funds interest rate right where it was, at 1.50-1.75%.
All of this happened on Wednesday, Thursday, and Friday. There was little time, in between, for the United States and China to announce, denounce, defer, define, defend, and eventually demystify the outlines of some vague phase one trade deal, which still hasn't happened, but is supposed to, any time, any day now.
So there it was, except for a few details that may have slipped over the transom or under the proverbial rug, like the Federal Reserve supplying $500 billion in liquidity to REPO markets to handle "the turn" from December 31, 2019 to January 1, 2020.
That little nugget came and went. Everybody was too much involved over impeachment and Boris and the trade deal to notice. Such an amount of money just to get from 2019 to 2020? It sounded absurd, spending half a trillion dollars to change the calendar. Remember, there was $700 billion in TARP, back in 2009, and that supposedly rescued the entire global financial system. This amount is more than two thirds of that.
In a related story, Lee Adler of The Wall Street Examiner purports that the Federal Reserve has bought up 90% of the government's issuance of treasury bills, notes, and bonds since September 16, effectively monetizing the debt.
So, this $500 billion of liquidity from the benevolent Fed, is it a precursor of more debt monetization, or simply a safeguard against some hedge fund or larger institution crashing as one year turns to the next? Its hard to say. Like recessions, the world will likely have to wait until after the fact to find out.
On a weekly basis, the Dow has gained in seven of the last 10 weeks. The S&P was up nine of the last 10, the NASDAQ moved higher nine of the last 11, and the Composite Index finished higher nine out of the last 10 and this week closed at an all-time high, proving, once again, that it's folly to fight the Fed.
As a footnote to the coming week, the full house is expected to vote on articles of impeachment on Wednesday.
At the Close, Friday, December 13, 2019:
Dow Jones Industrial Average: 28,135.38, +3.28 (+0.01%)
NASDAQ: 8,734.88, +17.56 (+0.20%)
S&P 500: 3,168.80, +0.23 (+0.01%)
NYSE Composite: 13,697.34, -0.06 (-0.00%)
For the Week:
Dow: +120.32 (+0.43%)
NASDAQ: +78.35 (+0.91%)
S&P 500: +22.89 (+0.73%)
NYSE Composite: +109.05 (+0.80%)
Monday, December 2, 2019
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%)
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%)
Thursday, November 14, 2019
This Is About As Dull A Market As There Ever Has Been
It's been a slow week.
"How slow is it," the crowd chants, Johnny Carson style.
Well, the Dow is up 102 points as of Wednesday's close. That's the good news, and it's about as good as it gets. The NASDAQ, in three sessions, has gained six points, the S&P just under one point, and the NYSE Composite is down 22.75 points.
That's how slow it is.
As for the causes, anybody's guess will do, but the most likely candidates are uncertainty over just about everything, from impeachment hearings in the House of Representatives, to ongoing and increasingly-violent protests in Hong Kong, to backtracking in US-China trade relations, to just plain old vanilla market overbought conditions. It's not like the economy is booming (1.9% 3rd quarter GDP), or that most of the fuel has been courtesy of the Federal Reserve (another $200 billion added to their balance sheet in just the past two months), or that stock buybacks have been responsible for more than 60% of the gains over the past five years (maybe).
There are ample reasons for people to take a look-and-see stance. Just in case nobody's noticed, it's almost the end of 2019, allocations have already been made and funds are sitting on their hands, lest they get burned hitting the BUY button before year end.
If the New York stock exchange shut down for a day or two, or even a week or two, would it matter to anybody but the ultra-wealthy? Probably not, and, since the ultra-wealthy are, ahem, ultra-wealthy, why should they be buying stocks at nosebleed levels anyhow? They're waiting for the next greater fool, so they can sell some of their holdings at nice profits.
Thus, it's a simple assumption to make that if there are few buyers, and ample sellers who are holding out for the best prices, not much is going to happen, and that's why this week has been so slow. Whether that translates into a major downdraft, as many have been predicting once new highs were made last week, or another step up the ladder of success depends largely on news flow, and that hasn't been particularly encouraging of late (see above).
There's an old adage that reads something like, "never short a dull market," which falls a bit short in the logic department. If a market is dull, it obviously is in need of a catalyst to move ahead, move quicker, move at all. Will selling short bring out buyers? Maybe that's the idea, but there's no proof that a dull market is any more prone to melt up than a volatile market. If things are hot, people are buying and selling, brokers are making commissions (well, that's how it used to be), and stocks are going somewhere, up or down, that would seem to be a more dangerous place into which to sell.
There will be short sellers, but, at the present, there doesn't seem to be many eager buyers out there.
This is what happens when nothing happens. You have to write about nothing happening as if there is actually something happening.
Nothing is happening.
At the Close, Wednesday, November 13, 2019:
Dow Jones Industrial Average: 27,783.59, +92.10 (+0.33%)
NASDAQ: 8,482.10, -3.99 (-0.05%)
S&P 500: 3,094.04, +2.20 (+0.07%)
NYSE Composite: 13,385.05, -2.57 (-0.02%)
"How slow is it," the crowd chants, Johnny Carson style.
Well, the Dow is up 102 points as of Wednesday's close. That's the good news, and it's about as good as it gets. The NASDAQ, in three sessions, has gained six points, the S&P just under one point, and the NYSE Composite is down 22.75 points.
That's how slow it is.
As for the causes, anybody's guess will do, but the most likely candidates are uncertainty over just about everything, from impeachment hearings in the House of Representatives, to ongoing and increasingly-violent protests in Hong Kong, to backtracking in US-China trade relations, to just plain old vanilla market overbought conditions. It's not like the economy is booming (1.9% 3rd quarter GDP), or that most of the fuel has been courtesy of the Federal Reserve (another $200 billion added to their balance sheet in just the past two months), or that stock buybacks have been responsible for more than 60% of the gains over the past five years (maybe).
There are ample reasons for people to take a look-and-see stance. Just in case nobody's noticed, it's almost the end of 2019, allocations have already been made and funds are sitting on their hands, lest they get burned hitting the BUY button before year end.
If the New York stock exchange shut down for a day or two, or even a week or two, would it matter to anybody but the ultra-wealthy? Probably not, and, since the ultra-wealthy are, ahem, ultra-wealthy, why should they be buying stocks at nosebleed levels anyhow? They're waiting for the next greater fool, so they can sell some of their holdings at nice profits.
Thus, it's a simple assumption to make that if there are few buyers, and ample sellers who are holding out for the best prices, not much is going to happen, and that's why this week has been so slow. Whether that translates into a major downdraft, as many have been predicting once new highs were made last week, or another step up the ladder of success depends largely on news flow, and that hasn't been particularly encouraging of late (see above).
There's an old adage that reads something like, "never short a dull market," which falls a bit short in the logic department. If a market is dull, it obviously is in need of a catalyst to move ahead, move quicker, move at all. Will selling short bring out buyers? Maybe that's the idea, but there's no proof that a dull market is any more prone to melt up than a volatile market. If things are hot, people are buying and selling, brokers are making commissions (well, that's how it used to be), and stocks are going somewhere, up or down, that would seem to be a more dangerous place into which to sell.
There will be short sellers, but, at the present, there doesn't seem to be many eager buyers out there.
This is what happens when nothing happens. You have to write about nothing happening as if there is actually something happening.
Nothing is happening.
At the Close, Wednesday, November 13, 2019:
Dow Jones Industrial Average: 27,783.59, +92.10 (+0.33%)
NASDAQ: 8,482.10, -3.99 (-0.05%)
S&P 500: 3,094.04, +2.20 (+0.07%)
NYSE Composite: 13,385.05, -2.57 (-0.02%)
Sunday, November 3, 2019
WEEKEND WRAP: Fed Delivers, S&P, NASDAQ Make All-Time Highs
With the FOMC decision Wednesday to reduced the federal funds overnight lending rate another 25 basis points, to a range of 1.50-1.75%, stocks took a the rest of decision day and Thursday to digest the news, then ramped stocks on Friday, sending the NASDAQ and S&P 500 to record closings and the Dow Jones Industrials and NYSE Composite near all-time highs.
While the third consecutive rate cut was able to reawaken some of Wall Street's animal spirits, it may be the last one for a while. Changing the wording in some parts of their statement, the Fed took on a more hawkish stance concerning rates going forward. Fed policy will remain data dependent, but not necessarily active. That didn't bother stock traders, who saw the opportunity to ignite what may extend into a holiday rally, and ran with it.
Wall Street's enthusiasm came a day after the US House of Representatives voted along strict party lines to make their impeachment inquiry against President Trump just a little more public than it has been up to this point, wherein Democrats, led by Chairman of the Permanent Select Committee on Intelligence, Adam Schiff, held secret, closed door depositions and heard hearsay testimony from various witnesses in connection with a phone call the president made to Ukraine President Volodymyr Zelensky back in July.
The charges the Democrats have alleged against Mr. Trump may be scurrilous at worst and inconsequential at best, but that hasn't prevented the Democrats to continue to spread stories to their friends in the corrupt mainstream media to smear the president in the run-up to the 2020 election. Not a single Republican voted in favor of the resolution which formally enshrined the inquiry and expanded it to other committees.
Washington being thus rendered impotent as it wastes the taxpayer dime on ridiculous accusations and pointless investigations - along the same lines as the 2+ years of the infamous Mueller probe - it does give Wall Street some relief, understanding that the government will be introducing no new laws or regulations that might impede the current, long-standing bull run.
Elsewhere, outside the United States, the world is burning, either through popular strife in countries and places as diverse as Chile, Hong Kong, and Spain (Catalonia), or by economic policy, especially the brunt instrumentality of negative interest rates, in many European countries.
China's economic slowdown became an issue this week as well, demonstrating that the Chinese hard-line stance on trade negotiations with the United States is a charade. The Chinese government knows full well that it needs cooperation with its main trading partner, but insists on slow-walking any formal agreement. President Trump is well aware of China's condition and has maintained his equally-tough positions through whatever negotiations have been made or planned. China is eventually going to lose its grip and be forced to come to terms with the United States or risk popular uprisings of its own people.
Ignoring the background noise of geopolitics, companies continued to roll out third quarter earnings reports which were modest, but nowhere near disastrous. Additionally, US GDP came in at a stronger-than-expected 1.9% in the first estimate, and October job growth was muted, but well beyond expectations, delivering a non-farm payroll report that saw job gains of 128,000, following an upwardly revised 180,000 increase in September, easily beating market expectations of 89,000. Even though the BLS report is a damaged documentary on true economic growth, the trading community saw this as a positive one and responded accordingly.
Bonds rallied. The yield curve, having un-inverted in early August, continued to steepen, with the 10-year note at 1.69% on Thursday before closing out the week at 1.73%. The longer-duration, 30-year bond, which had fallen under two percent in July, and was being sold off until this week, rallied sharply, with yields falling from 2.34% on Monday to 2.17% on Thursday, settling on Friday at 2.21%.
Gold and silver were also bid, gold regaining the $1500 per ounce level and silver shooting beyond $18 per ounce.
The week ahead features more madness from Washington, a slew of earnings reports, including some popular names like Shake Shack, Uber, UnderArmor, Sprint, Hertz, Groupon, Mariott (Monday), Chesapeake Energy and Newmont Mining (Tuesday), Roku, CVS Health, Square, Humana, Qualcom (Wednesday), Teva, Planet Fitness, AMC Entertainment, Cardinal Health, Stamps.com (Thursday), and Duke Energy and US Concrete (Friday). The Walt Disney Company (DIS), a Dow component, reports Thursday.
Barring any unforeseen negative developments like bank runs (China), riots and street killings (Hong Kong), or desultory commentary on negative interest rates (Denmark), all appears to be smooth sailing through Black Friday, which approaches rapidly, just 19 trading days hence.
Happy Holidays? Too soon?
At the Close, Friday, November 1, 2019:
Dow Jones Industrial Average: 27,347.36, +301.13 (+1.11%)
NASDAQ: 8,386.40, +94.04 (+1.13%)
S&P 500: 3,066.91, +29.35 (+0.97%)
NYSE Composite: 13,300.27, +128.46 (+0.98%)
For the Week:
Dow: +389.30 (+1.44%)
NASDAQ: +143.28 (+1.74%)
S&P 500: +29.35 (+0.97%)
NYSE Composite: +154.03 (+1.17%)
The following is dedicated to California Rep. Adam Schiff:
While the third consecutive rate cut was able to reawaken some of Wall Street's animal spirits, it may be the last one for a while. Changing the wording in some parts of their statement, the Fed took on a more hawkish stance concerning rates going forward. Fed policy will remain data dependent, but not necessarily active. That didn't bother stock traders, who saw the opportunity to ignite what may extend into a holiday rally, and ran with it.
Wall Street's enthusiasm came a day after the US House of Representatives voted along strict party lines to make their impeachment inquiry against President Trump just a little more public than it has been up to this point, wherein Democrats, led by Chairman of the Permanent Select Committee on Intelligence, Adam Schiff, held secret, closed door depositions and heard hearsay testimony from various witnesses in connection with a phone call the president made to Ukraine President Volodymyr Zelensky back in July.
The charges the Democrats have alleged against Mr. Trump may be scurrilous at worst and inconsequential at best, but that hasn't prevented the Democrats to continue to spread stories to their friends in the corrupt mainstream media to smear the president in the run-up to the 2020 election. Not a single Republican voted in favor of the resolution which formally enshrined the inquiry and expanded it to other committees.
Washington being thus rendered impotent as it wastes the taxpayer dime on ridiculous accusations and pointless investigations - along the same lines as the 2+ years of the infamous Mueller probe - it does give Wall Street some relief, understanding that the government will be introducing no new laws or regulations that might impede the current, long-standing bull run.
Elsewhere, outside the United States, the world is burning, either through popular strife in countries and places as diverse as Chile, Hong Kong, and Spain (Catalonia), or by economic policy, especially the brunt instrumentality of negative interest rates, in many European countries.
China's economic slowdown became an issue this week as well, demonstrating that the Chinese hard-line stance on trade negotiations with the United States is a charade. The Chinese government knows full well that it needs cooperation with its main trading partner, but insists on slow-walking any formal agreement. President Trump is well aware of China's condition and has maintained his equally-tough positions through whatever negotiations have been made or planned. China is eventually going to lose its grip and be forced to come to terms with the United States or risk popular uprisings of its own people.
Ignoring the background noise of geopolitics, companies continued to roll out third quarter earnings reports which were modest, but nowhere near disastrous. Additionally, US GDP came in at a stronger-than-expected 1.9% in the first estimate, and October job growth was muted, but well beyond expectations, delivering a non-farm payroll report that saw job gains of 128,000, following an upwardly revised 180,000 increase in September, easily beating market expectations of 89,000. Even though the BLS report is a damaged documentary on true economic growth, the trading community saw this as a positive one and responded accordingly.
Bonds rallied. The yield curve, having un-inverted in early August, continued to steepen, with the 10-year note at 1.69% on Thursday before closing out the week at 1.73%. The longer-duration, 30-year bond, which had fallen under two percent in July, and was being sold off until this week, rallied sharply, with yields falling from 2.34% on Monday to 2.17% on Thursday, settling on Friday at 2.21%.
Gold and silver were also bid, gold regaining the $1500 per ounce level and silver shooting beyond $18 per ounce.
The week ahead features more madness from Washington, a slew of earnings reports, including some popular names like Shake Shack, Uber, UnderArmor, Sprint, Hertz, Groupon, Mariott (Monday), Chesapeake Energy and Newmont Mining (Tuesday), Roku, CVS Health, Square, Humana, Qualcom (Wednesday), Teva, Planet Fitness, AMC Entertainment, Cardinal Health, Stamps.com (Thursday), and Duke Energy and US Concrete (Friday). The Walt Disney Company (DIS), a Dow component, reports Thursday.
Barring any unforeseen negative developments like bank runs (China), riots and street killings (Hong Kong), or desultory commentary on negative interest rates (Denmark), all appears to be smooth sailing through Black Friday, which approaches rapidly, just 19 trading days hence.
Happy Holidays? Too soon?
At the Close, Friday, November 1, 2019:
Dow Jones Industrial Average: 27,347.36, +301.13 (+1.11%)
NASDAQ: 8,386.40, +94.04 (+1.13%)
S&P 500: 3,066.91, +29.35 (+0.97%)
NYSE Composite: 13,300.27, +128.46 (+0.98%)
For the Week:
Dow: +389.30 (+1.44%)
NASDAQ: +143.28 (+1.74%)
S&P 500: +29.35 (+0.97%)
NYSE Composite: +154.03 (+1.17%)
The following is dedicated to California Rep. Adam Schiff:
Tuesday, October 8, 2019
Washington's Impeachment Addiction, Trade Fiasco, Brexit, Global Condition Damaging Wall Street
The headline says it all. Things are coming apart at a rapid rate. Anybody who is even the least bit jittery is moving out of stocks as fast as possible. Rerun of last year's fourth quarter massacre is commencing apace. This iteration may be comparable to the New England Patriots playing a football game against a high school girl's rugby team.
More than caution is needed. A little panic would do the world's markets some good and maybe get the back-slapping bureaucrats and politicians to actually do some thing constructive (fat chance).
China will not negotiate fairly and especially so until the impeachment chorus is silenced for good. Even if President Trump is elected to a second term, Democrats will not stop their harassment, but likely accelerate efforts to remove him from office by any means. One saving grace could come from Republicans recapturing the House of Representatives, but that's a real Hail Mary.
In England, the anti-democratic forces are pushing ahead toward four years since the original referendum to leave the European Union was approved by the general population (June 23, 2016). Since, there has been a non-stop war waged against the wishes of the people. With no apparently-workable deal in sight, it may be the case that Britain won't leave the EU at all until the people rise up against their government. All is needed is a spark, in Britain, in the US, in China, everywhere, for the global condition to turn to global contagion and conflagration.
The global condition - which has generally been worsening since September 11, 2001 - is deteriorating at a quickened pace. There will be pain, but, in the end, if one is consistent, conservative, and constructive, a better future lies just ahead.
At the Close, Monday, October 7, 2019:
Dow Jones Industrial Average: 26,478.02, -95.70 (-0.36%)
NASDAQ: 7,956.29, -26.18 (-0.33%)
S&P 500: 2,938.79, -13.22 (-0.45%)
NYSE Composite: 12,777.74, -53.81 (-0.42%)
More than caution is needed. A little panic would do the world's markets some good and maybe get the back-slapping bureaucrats and politicians to actually do some thing constructive (fat chance).
China will not negotiate fairly and especially so until the impeachment chorus is silenced for good. Even if President Trump is elected to a second term, Democrats will not stop their harassment, but likely accelerate efforts to remove him from office by any means. One saving grace could come from Republicans recapturing the House of Representatives, but that's a real Hail Mary.
In England, the anti-democratic forces are pushing ahead toward four years since the original referendum to leave the European Union was approved by the general population (June 23, 2016). Since, there has been a non-stop war waged against the wishes of the people. With no apparently-workable deal in sight, it may be the case that Britain won't leave the EU at all until the people rise up against their government. All is needed is a spark, in Britain, in the US, in China, everywhere, for the global condition to turn to global contagion and conflagration.
The global condition - which has generally been worsening since September 11, 2001 - is deteriorating at a quickened pace. There will be pain, but, in the end, if one is consistent, conservative, and constructive, a better future lies just ahead.
At the Close, Monday, October 7, 2019:
Dow Jones Industrial Average: 26,478.02, -95.70 (-0.36%)
NASDAQ: 7,956.29, -26.18 (-0.33%)
S&P 500: 2,938.79, -13.22 (-0.45%)
NYSE Composite: 12,777.74, -53.81 (-0.42%)
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