With Rubio and Corker Backing Tax Plan, Stocks Take Off

Maybe the scuttlebutt about Senators Marco Rubio (R-FL) and Bob Corker (R-TN) being persuaded to vote for the long-awaited tax reform plan circulating in the congress caused stocks to career higher on Friday, but the more likely catalyst was probably much more mundane: the expirations of options on a quad-witching day.

There were certainly a boatload of long bets on individual stock and index options, and, since the market is so overtly controlled by a handful of "whales" it was simple business to boost stocks throughout the day no matter what the news of the day portended.

Anybody who doesn't believe the market is rigged to go higher - incessantly - in support of central bank plans to intercede in global markets by buying assets and printing fiat, is simply fooling themselves.

Thus, bears have been declawed, pension funds and IRA are becoming whole (or, at least less underfunded) and top stock holders have been handed capital gains on a silver platter with little to no effort or brainpower on their parts.

Since congress appears poised to pass the pending tax legislation in the coming week, investors are sure to get a gift-wrapped Christmas present in advance of the give-away holiday.

2017 will go down in history as one of the best ever for stock market investors. The major averages are well into the green and some individual stocks are boasting gains of 30, 40, 50 percent or more.

Happy Holidays. Keep Dreaming.

At the Close, Friday, December 15, 2017:
Dow: 24,651.74, +143.08 (+0.58%)
NASDAQ: 6,936.58, +80.06 (+1.17%)
S&P 500: 2,675.81, +23.80 (+0.90%)
NYSE Composite: 12,699.68, +70.61 (+0.56%)

For the Week:
Dow: +322.58 (+1.33%)
NASDAQ: +96.50 (+1.41%)
S&P 500: +24.31 (+0.92%)
NYSE Composite: +56.62 (+0.45%)

Stocks Under Pressure; Bulls All Die At Some Point

Anybody who believes that this current bull market - fueled by easy money policies from central banks, fake statistics, and enormous government deficits - will continue much longer needs to take a reality check.

Just for those who cannot or will not see the forest for the trees, the following:

• The 10-year-note is stuck in a perpetual yield range of 2.3-something.
• Stocks have been going sideways for week.
• There's almost no chance that the congress will pass any kind of tax reform bill this year as they are doing nothing more than posturing for the midterm elections.
• The national debt continues to soar to new heights, despite happy talk from the administration (remember, congress holds the purse-strings).
• The percentage of people in the workforce is still at near-record lows.
• The Us trade deficit with China is not shrinking.
• State pension plans and many private pension plans are underfunded by trillions of dollars.
• Voting doesn't matter (see the fiasco over Roy Moore)
• Corporate profits are beginning to show serious signs of a slowdown (GE, Chipolte, others)
• Foreclosures, bankruptcies, student loan defaults are rising.

That is just a sampling, and today's market, in form with the past few sessions, took a nosedive at the open only to recover thanks to spirited heavy lifting by the PPT or central bank cronies on the heaviest volume in five months.

The Dow was down 168 points shortly after 10:00 am ET, only to close with a marginal loss. Even at its lowest point, the index was 900 points above its 50-day moving average.

Stocks are as overpriced as they've ever been, setting up for a crash of enormous proportions.

It's coming, but nobody knows when or why it will occur. The Fed is still insistent upon raising interest rates again in December, at a time at which the economy is neither growing fast enough to warrant such behavior nor robust enough to withstand repeated rate hikes.

Over the years, the Federal Reserve has caused more crashes and recessions than it will admit. Uncontrollable spending by government and cascading business and individual debt is reaching unprecedented heights, worse than preceding the Great Financial Crisis of 2007-09.

Extreme caution is advised.


At the Close, Tuesday, November 14, 2017:
Dow: 23,409.47, -30.23 (-0.13%)
NASDAQ: 6,737.87, -19.72 (-0.29%)
S&P 500: 2,578.87, -5.97 (-0.23%)
NYSE Composite: 12,280.11, -36.71 (-0.30%)

Stocks Balk at Indecisive Congressional Tax Reform Efforts

Stocks tumbled at midweek as prospects for comprehensive tax reform dimmed in Washington.

The Senate was roundly blamed for the poor performance on the session, as a handful of Republicans expressed doubts over the version of the package submitted by the House days earlier.

A Republican bill was presented, with significant changes, including a permanent 20% business tax rate which would be implemented in 2019. The delay of more than a year concerned investors, though such concern is largely a canard, being that the effective rate for most significant corporations is about 14%.

As the day wore on the pain subsided and late buying boosted averages, though not enough to offset an across-the-board decline, putting the major indices in the red for the week.

Without a positive narrative and strategy for tax reform forthcoming for the congress, it appears that President Trump will be thwarted once again in his efforts to Make American Great Again, though many may argue that his initial tax proposals fell far short of any significant, progressive changes to the tax code.

Simplification would be an effective measure towards keeping the Trump loyalists in camp, but that does not appear to be on the congressional agenda, as per usual.

There's spreading sentiment that nothing will be done in terms of tax reform, which, like Social Security, Medicare/Medicaid, and immigration, has serious problems which year after year seem to defy the ability of congress to implement meaningful change. The more convenient route of promising change and delivering nothing of consequence appears to be the overriding theme of a congress that's essentially done nothing of benefit to the general population for the past twenty years.

As far as Wall Street is concerned, Washington is more a parody, a thinly-veiled lie at effective governance and thus it is, more often than not, discounted as meaningless.

The declines of Wednesday will be considered a sign of weakness, though most will express the opinion that "it's only a flesh wound."

At the Close, Thursday, November 9, 2017:
Dow: 23,461.94, -101.42 (-0.43%)
NASDAQ: 6,750.05, -39.06 (-0.58%)
S&P 500: 2,584.62, -9.76 (-0.38%)
NYSE Composite: 12,339.66, -45.05 (-0.36%)