Across the board gains were the order de jour on the second day of trading in the new year.
As on Tuesday, the NASDAQ outpaced the other major averages, continuing its meteoric rise beyond the 7,000 mark with tech stocks leading the way despite an admission from Intel (INTC) that their chips have a serious flaw, affecting nearly all chips made by the company over the past ten years.
The world's largest chipmaker was not immediately taken to the woodshed and whipped, though shares of the company were down more than three percent and are off another one-and-a-half percent in pre-market trading on Thursday.
Rival chipmaker, Advanced Micro Devices (AMD), was the main beneficiary of the Intel news, its stock advancing more than five percent on the day, though it appeared that AMD chips are also vulnerable, though not to the same extent nor by the same exploits as Intel chips.
While the immediate impact may be slim, the long-term repercussions of this revelation may be significant. The world's major chip manufacturers may be facing a black swan event once hackers devise attacks that could legitimately effect computers and servers worldwide, for years.
Traders were not on the defensive, however, as the lure of early gains overwhelmed any concerns for troubles ahead, such as the massive snowstorm and bitter cold that is expected to affect most of the Northeast in days ahead. The storm - being called a Bomb Cyclone - is primarily focused off the Eastern coast of mainland North America, though New York, New Jersey, and Massachusetts were making preparations for a major winter weather event which has already bettered Southern cities such as Charleston, SC, and Savannah, GA.
The apparent complacency of equity speculators is somewhat confounding, given the potential for severe disruptions from weather and technology in coming days.
On the other end of the asset spectrum, precious metals responded to a slight rise in the dollar index, blunting a strong run for gold and silver over the past three weeks, though the selling seemed to be transitory, with the metals recovering early on Thursday morning as the dollar fell to fresh lows (91.933).
On Thursday morning, prior to the opening bell on Wall Street, ADP private payroll data for December showed a massive 250,000 job gain for the final month of 2017. While the AMD numbers are preliminary and subject to revision, they are sending a strong signal in advance of Friday's BLS non-farm payroll dataset for December.
With caution being thrown largely to the (bitterly cold) wind, Friday and/or Monday could be a day of "selling the news," or, as has been the case for the past nine years, the stock market rally will not be impeded by facts nor insinuations of negativity.
At the Close, Wednesday, January 3, 2018:
Dow: 24,922.68, +98.67 (+0.40%)
NASDAQ: 7,065.53, +58.63 (+0.84%)
S&P 500: 2,713.06, +17.25 (+0.64%)
NYSE Composite: 12,957.28, +54.55 (+0.42%)
Showing posts with label weather. Show all posts
Showing posts with label weather. Show all posts
Thursday, January 4, 2018
Tuesday, February 4, 2014
Markets Pause After Monday's Pummeling; Stocks Bounce Is Feeble
When markets get roiled like they did on Monday, especially following four weeks in January of steady declines, the usual reaction is for investors to nibble at the edges, like rats who have been spooked by sprung traps on their coveted cheese.
The only data drop worth noting on the day was Factory Orders, which fell 1.5% in December, the most since July. Inventories of manufactured durable goods reached an all-time high for the series in December, to $387.9 billion, marking the fastest year-over-year inventory build in 6 months.
That same inventory build has been responsible in part for much of the two past GDP figures, from the third and fourth quarters of 2013, and, unless consumers come out of hiding soon, those inventories are going to sit and eventually be marked down, further stifling the Fed's efforts to re-inflate the economy, which continues to stall out at a moribund inflation rate well below two percent.
While lower costs for manufactured and consumer goods comes as pleasant news for individuals and small business, it works against the Fed's perverse mandate of "stable prices," which, in actuality, is defined in Fedspeak as "stably-increasing prices at a rate of at least two percent and preferably higher, stealing purchasing power from people, everywhere, all the time, while debasing the currency."
Since 2008, the Fed's playbook has been redesigned to include trick plays like ZIRP, QE, reverse-repos, re-hypothecation and other arcane financing stylings, most of which have had limited success. Now, with their implicit desire to end QE this year, the fruits of their laborious injections of trillions of dollars into the global economy are proving impotent as first, emerging markets are crushed, soon to be followed by developed markets, already occurring in Japan, where the Nikkei fell by more than 600 points overnight, and is clearly into "correction" territory.
While today's pause offered some relief for the bulls, the bears seem to be still in charge. Advances in early trading on the major indices were pared back throughout the session, the closing prices barely denting the declines of just Monday, to say nothing of the drops from January.
Everybody is going to get something of a clue Wednesday morning, when ADP releases its January private jobs report, a precursor to Friday's non-farm payroll data for January. Expectations are high that the US created 185,000 jobs in January, which would be a masterstroke of statistical wizardry, after the December reading of 74,000 jobs, sure to be revised higher.
Unless this January was both a statistical marvel and a reality-defying month in which auto sales and retail sales were well below estimates and blamed on the weather, the take-away is that while people were discouraged to brave the elements to shop, the very same weather encouraged job creation and the seeking of employment. The math does not match the reality. The truth is probable that while the weather was poor in some areas of the country, it was fine elsewhere, so the localized Northeast mindset likely has everything calculated improperly.
Whenever weather is blamed for anything - unless it's a localized event like a hurricane, flood or fires - one can be nearly certain the assumption is at least partially false, as will be proven in this case. Therefore, if Friday's jobs report blows the doors off estimates, one can assume the economy, based on auto and retail sales, is much weaker than propagandized, and that the BLS modeling, their birth/death assumptions and general massaging of data is flawed and should be disregarded.
Of course, a good-feeling jobs report will boost stocks, just as a continuation of the trend from December will send them even lower. Along with the weather as a culprit, other terms being bandied about include "correction" (a 10% decline off recent highs) and "bottom" (where stocks stop declining). Most of the analysts are saying the recent action is expected, following the massive gains of 2013, but that it is also temporary and investors should be looking at this as a buying opportunity.
Others have differing opinions, believing the US and global economy are contracting instead of expanding, that inflation is nowhere to be found and all of those corporate stock buybacks from the past three to four years are going to be painful to unwind. With corporations buying back their own stock at high prices, reducing the flow while increasing the price, what happens when they want to sell back into the market, at lower prices? The internal damage done to balance sheets will be dramatic and will only accelerate any downward pressure.
That's what investors have to look forward to in coming months, unless some economic miracle occurs. And, as we all are well aware, miracles don't usually just come along as needed.
Particularly telling, considering today's advance, was the new high-new low metric, which heavily favored new lows, indicating that today's advance was not broad-based nor technically supported. Additionally, late in the day, S&P downgraded Puerto Rico's debt to junk status, a move that was widely expected, but still a huge negative.
A disturbing trend is the slight rise in commodity prices. Corn, soybeans, wheat, crude oil and natural gas have been bid up recently, as money, needing a safe place to rest, may find a home in such staples, artificially raising prices, though the gains may (and probably should) prove to be arbitrary and temporary, a certain sign of naked speculation.
DOW 15,445.24, +72.44 (+0.47%)
NASDAQ 4,031.52, +34.56 (+0.86%)
S&P 1,755.20, +13.31 (+0.76%)
10-Yr Note 101.05, -0.10 (-0.10%) Yield: 2.63%
NASDAQ Volume 2.00 Bil
NYSE Volume 4.05 Bil
Combined NYSE & NASDAQ Advance - Decline: 3738-1977
Combined NYSE & NASDAQ New highs - New lows: 49-111
WTI crude oil: 97.19, +0.76
Gold: 1,251.20, -8.70
Silver: 19.42, +0.013
Corn: 441.75, +6.00
The only data drop worth noting on the day was Factory Orders, which fell 1.5% in December, the most since July. Inventories of manufactured durable goods reached an all-time high for the series in December, to $387.9 billion, marking the fastest year-over-year inventory build in 6 months.
That same inventory build has been responsible in part for much of the two past GDP figures, from the third and fourth quarters of 2013, and, unless consumers come out of hiding soon, those inventories are going to sit and eventually be marked down, further stifling the Fed's efforts to re-inflate the economy, which continues to stall out at a moribund inflation rate well below two percent.
While lower costs for manufactured and consumer goods comes as pleasant news for individuals and small business, it works against the Fed's perverse mandate of "stable prices," which, in actuality, is defined in Fedspeak as "stably-increasing prices at a rate of at least two percent and preferably higher, stealing purchasing power from people, everywhere, all the time, while debasing the currency."
Since 2008, the Fed's playbook has been redesigned to include trick plays like ZIRP, QE, reverse-repos, re-hypothecation and other arcane financing stylings, most of which have had limited success. Now, with their implicit desire to end QE this year, the fruits of their laborious injections of trillions of dollars into the global economy are proving impotent as first, emerging markets are crushed, soon to be followed by developed markets, already occurring in Japan, where the Nikkei fell by more than 600 points overnight, and is clearly into "correction" territory.
While today's pause offered some relief for the bulls, the bears seem to be still in charge. Advances in early trading on the major indices were pared back throughout the session, the closing prices barely denting the declines of just Monday, to say nothing of the drops from January.
Everybody is going to get something of a clue Wednesday morning, when ADP releases its January private jobs report, a precursor to Friday's non-farm payroll data for January. Expectations are high that the US created 185,000 jobs in January, which would be a masterstroke of statistical wizardry, after the December reading of 74,000 jobs, sure to be revised higher.
Unless this January was both a statistical marvel and a reality-defying month in which auto sales and retail sales were well below estimates and blamed on the weather, the take-away is that while people were discouraged to brave the elements to shop, the very same weather encouraged job creation and the seeking of employment. The math does not match the reality. The truth is probable that while the weather was poor in some areas of the country, it was fine elsewhere, so the localized Northeast mindset likely has everything calculated improperly.
Whenever weather is blamed for anything - unless it's a localized event like a hurricane, flood or fires - one can be nearly certain the assumption is at least partially false, as will be proven in this case. Therefore, if Friday's jobs report blows the doors off estimates, one can assume the economy, based on auto and retail sales, is much weaker than propagandized, and that the BLS modeling, their birth/death assumptions and general massaging of data is flawed and should be disregarded.
Of course, a good-feeling jobs report will boost stocks, just as a continuation of the trend from December will send them even lower. Along with the weather as a culprit, other terms being bandied about include "correction" (a 10% decline off recent highs) and "bottom" (where stocks stop declining). Most of the analysts are saying the recent action is expected, following the massive gains of 2013, but that it is also temporary and investors should be looking at this as a buying opportunity.
Others have differing opinions, believing the US and global economy are contracting instead of expanding, that inflation is nowhere to be found and all of those corporate stock buybacks from the past three to four years are going to be painful to unwind. With corporations buying back their own stock at high prices, reducing the flow while increasing the price, what happens when they want to sell back into the market, at lower prices? The internal damage done to balance sheets will be dramatic and will only accelerate any downward pressure.
That's what investors have to look forward to in coming months, unless some economic miracle occurs. And, as we all are well aware, miracles don't usually just come along as needed.
Particularly telling, considering today's advance, was the new high-new low metric, which heavily favored new lows, indicating that today's advance was not broad-based nor technically supported. Additionally, late in the day, S&P downgraded Puerto Rico's debt to junk status, a move that was widely expected, but still a huge negative.
A disturbing trend is the slight rise in commodity prices. Corn, soybeans, wheat, crude oil and natural gas have been bid up recently, as money, needing a safe place to rest, may find a home in such staples, artificially raising prices, though the gains may (and probably should) prove to be arbitrary and temporary, a certain sign of naked speculation.
DOW 15,445.24, +72.44 (+0.47%)
NASDAQ 4,031.52, +34.56 (+0.86%)
S&P 1,755.20, +13.31 (+0.76%)
10-Yr Note 101.05, -0.10 (-0.10%) Yield: 2.63%
NASDAQ Volume 2.00 Bil
NYSE Volume 4.05 Bil
Combined NYSE & NASDAQ Advance - Decline: 3738-1977
Combined NYSE & NASDAQ New highs - New lows: 49-111
WTI crude oil: 97.19, +0.76
Gold: 1,251.20, -8.70
Silver: 19.42, +0.013
Corn: 441.75, +6.00
Friday, March 12, 2010
Sellers Creeping into Market
Call it what you will, but today's action was indicative - as all of the past week has been - of uncertainty about further stock market advances and profit-taking.
Stocks have stalled on low volume, though with the steady supply of cheap money being fed into the system, the small, fractional gains could continue, though sharper players probably have already exited profitable positions.
Dow 10,624.69, +12.85 (0.12%)
NASDAQ 2,367.66, -0.80 (0.03%)
S&P 500 1,149.99, -0.25 (0.02%)
NYSE Composite 7,362.85, +9.61 (0.13%)
Internal indicators are still positive, however, with advancing issues eking out a win over decliners, 3378-3127. That was the closest margin in days, if not weeks. New highs came in explosively, at 805, but the number of new lows also climbed, to 69 on the day. Volume continues to be stuck in neutral; very low participation is indicated.
NYSE Volume 5,506,876,500
NASDAQ Volume 2,035,983,000
Commodities were flat, with oil dipping 6 cents, to $81.24. Gold lost $1.20, to $1,107.00, and silver fell 17 cents, to $17.03. An interesting indicator is the gold-silver ratio, which has been out of whack since 2003, but on pull-backs, silver, with more industrial uses than gold, usually gets hit harder. It's an interesting dynamic. Silver will follow gold to the upside, but generally underperform it. On the downside, it may be instructive as a predictor of future gold moves. Since silver is more closely tied to the real economy, it goes to reason that it would feel the pinch prior to its cousin gold, which is almost entirely an investment instrument.
A couple of data points should have moved the market, and might have been partially responsible for the poor showing on Friday. Retail sales were strong in February, up 0.3%, but january was revised sharply lower, from +0.5 to +0.1. That revision may have put a scare into investors, sensing that the current numbers were likely overstated. If so, that would jibe with the Michigan Sentiment survey, which fell to 72.5 from 73.6 in February.
Additionally, inventories were flat when the expectation was for a noticeable build. It didn't occur, thus, skepticism prevailed, and the market doesn't appreciate any kind of uncertainty, of which there is more than enough to go around.
At least the weather is improving and can't be blamed for anything.
Stocks have stalled on low volume, though with the steady supply of cheap money being fed into the system, the small, fractional gains could continue, though sharper players probably have already exited profitable positions.
Dow 10,624.69, +12.85 (0.12%)
NASDAQ 2,367.66, -0.80 (0.03%)
S&P 500 1,149.99, -0.25 (0.02%)
NYSE Composite 7,362.85, +9.61 (0.13%)
Internal indicators are still positive, however, with advancing issues eking out a win over decliners, 3378-3127. That was the closest margin in days, if not weeks. New highs came in explosively, at 805, but the number of new lows also climbed, to 69 on the day. Volume continues to be stuck in neutral; very low participation is indicated.
NYSE Volume 5,506,876,500
NASDAQ Volume 2,035,983,000
Commodities were flat, with oil dipping 6 cents, to $81.24. Gold lost $1.20, to $1,107.00, and silver fell 17 cents, to $17.03. An interesting indicator is the gold-silver ratio, which has been out of whack since 2003, but on pull-backs, silver, with more industrial uses than gold, usually gets hit harder. It's an interesting dynamic. Silver will follow gold to the upside, but generally underperform it. On the downside, it may be instructive as a predictor of future gold moves. Since silver is more closely tied to the real economy, it goes to reason that it would feel the pinch prior to its cousin gold, which is almost entirely an investment instrument.
A couple of data points should have moved the market, and might have been partially responsible for the poor showing on Friday. Retail sales were strong in February, up 0.3%, but january was revised sharply lower, from +0.5 to +0.1. That revision may have put a scare into investors, sensing that the current numbers were likely overstated. If so, that would jibe with the Michigan Sentiment survey, which fell to 72.5 from 73.6 in February.
Additionally, inventories were flat when the expectation was for a noticeable build. It didn't occur, thus, skepticism prevailed, and the market doesn't appreciate any kind of uncertainty, of which there is more than enough to go around.
At least the weather is improving and can't be blamed for anything.
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