The Rush To Safety Has Begun In Earnest; 10-Year Yields Drop to 2.41%

With one of the most amazing sporting spectacles - Super Bowl 51 (LI, for those of the Roman numeral persuasion) - behind, most people got back to work today, including the rabid money-grubbers of Wall Street, but all was not rosy and peachy after the New England Patriots won in overtime, 34-28, over the Atlanta Falcons.

As President Donald Trump continues to attempt to "make America great again," much of the focus on the first trading day of the week was not on stocks, but rather, bonds, most noticeably on the 10-year treasury note, which plummeted eight basis points on the day to produce the lowest yield in two weeks, to 2.41%.

That figure may not seem so attractive to the yield-seekers of the world, but to countless hedge and managed bond fund professionals, it was a pretty awesome start to the week. Prices - which preform in the opposite direction of yield - for the 10-year were rocketing higher and any continuation of the move over the next few days and through the week might make for a trend-setting reversion following weeks of speculation after the Fed hiked federal funds rates at the end of last year.

Stocks were down modestly, but that was antecedent to the speculative ride in bonds, which was focused on the long end, thereby flattening the curve. What is more than just passing interest in treasury bonds figures to keep a lid on stock prices for the near term, at least until the next Fed meeting, in mid-March, at which time the FOMC will likely keep interest rates at the same levels. It's simply going to be too early for the Fed to believe that the economy is on sound footing toward expansion, something they've been sniffing around for over the past eight years. To their dismay, and possible demise, the Fed hasn't found much in the data to suggest that the US economy is going to be great, again, or with any other adverbial disclaimer.

So, today can be summed up as bond traders getting calls to buy safety and executing on the wishes of their clients. Any assumption that the Trump rally or any other concoction of the news and financial media is going to send stocks even higher than the stratospheric levels they've already achieved in one of the longest multiple expansions in history may be similar to a dog whistle.

Dogs may hear it and lower-thinking humans might get a strange beeping sound, but long-term financial experts aren't going to notice. They've already made up their minds about where stocks are headed and, from today's indications, they're not going to a pleasant place.

Gird your loins and whatever else you might think appropriate for a trip of declining prices and some creative destruction in stocks. Hopefully, it won't be your money that's being lost.

At the Close, Monday, January 6, 2017:
Dow: 20,052.42, -19.04 (-0.09%)
NASDAQ: 5,663.55, -3.21 (-0.06%)
S&P 500: 2,292.56, -4.86 (-0.21%)
NYSE Composite: 11,264.11, -46.63 (-0.41%)

What Wall Street Wants, Wall Street Gets; Trump Slashes Dodd-Frank

There's no better way to put it than to say that the Wall Street banks - Goldman Sachs, Bank of America, JP Morgan Chase, Morgan Stanley, Wells Fargo, and Citi - have Donald Trump's "get out of jail free" card in their back pockets.

Today's action by the President, an executive order slashing most of the regulations put on banks by the Dodd-Frank act under past-president Obama and the useless congress, paves the way for even looser regulations and more wild risk-taking by Wall Street.

And the celebration got underway right after the stupid BLS jobs report and the opening bell, boosting all major averages to within spitting distance of all-time highs.

Should anyone wonder if Mr. Trump knows anything about economics, one has only to look at his Treasury nominee, Steven Mnuchin, who led a group of investors in the take-out of IndyMac, later changing the name to OneWest while it became a serial abuser of mortgage financing and foreclosure laws.

While the former Goldman Sachs partner is not yet assured of passing muster in Senate confirmation, the appearance of yet another Goldman alumnus at the top finance job in the administration should be all one needs to know. Trump has long-standing associations with Wall Street, Goldman Sachs and financiers in general, so it isn't really a surprise.

Business will do business, whether or not it's moral, fiduciary, or based upon sound best practices. Wall Street retained control when Trump was elected, and would have even with Hillary as the president, so there's a bit of a silver lining in that at least the office of the president isn't occupied by a serial liar and psychopath. President Trump is better than the alternative, probably by more than anyone imagined.

After all the whipsaw activity of the past week, the major indices ended relatively unchanged. So, jobs data, the Fed, Trump, the EU, Japan, and the UK central bankers didn't actually add up to much at all.

Caveat Emptor

Carry on and Mind the Gap.


At the Close, Friday, February 3, 2017:
Dow: 20,071.46, +186.55 (0.94%)
NASDAQ: 5,666.77, +30.57 (0.54%)
S&P 500: 2,297.42, +16.57 (0.73%)
NYSE Composite: 11,311.74, +96.36 (0.86%)

For the Week:
Dow: -22.32 (-0.11%)
NASDAQ: +5.98 (0.11%)
S&P 500: +2.72 (0.12%)
NYSE Composite: +27.52 (+0.24%)

Stocks Finish Flat Thursday, Friday Futures Boosted By Boffo BLS Jobs Report

Stocks finished the day Thursday relatively flat, but the big jobs number Friday should manage to erase any doubts about where the market is headed (spoiler alert: back over 20,000).

According to the ever-accurate-and-oft-revised BLS, he US economy added 227,000 jobs in January while the unemployment rate rose slightly to 4.8%. Economists were looking for payrolls to grow by 175,000 with the unemployment rate expected to hold steady at 4.7%.

So, more jobs, but the unemployment rate goes higher. Only in America, land of missed opportunities and bogus statistical data from the government.

Wages missed the mark, as average hourly earnings rose just 0.1%. The usual suspect "experts" were seeking a gain of 0.3%. Sorry, slaves. Back to work. However, the day is early, and though futures are rocketing higher, there's now the possibility that President Trump will unleash a tweet or two designed to fan the flames of confusion.

Just one question: Are we having fun yet?

At The Close, Thursday, February 2, 2017:
Dow: 19,884.91, -6.03 (-0.03%)
NASDAQ: 5,636.20, -6.45 (-0.11%)
S&P 500: 2,280.85, +1.30 (0.06%)
NYSE Composite: 11,215.38, +8.14 (0.07%)

Fed On Hold, Markets Steady In Dull Session After Shaky Start To Week

With the Federal Reserve deciding that there would be no raise to the federal funds rate, as expected, US indices finished the day modestly higher, though the S&P 500 struggled to gain and the NYSE Composite finished in the red.

That was about all there was to the day, as investors took a break from the rabid pace set largely by President Trump's first ten days in office.

The next FOMC rate policy meeting isn't until March 14-15, though analysts and economists are still relatively certain that the Fed will continue to leave rates unchanged.

At The Close, Wednesday, February 1, 2016:
Dow: 19,890.94, +26.85 (0.14%)
NASDAQ: 5,642.65, +27.86 (0.50%)
S&P 500: 2,279.55, +0.68 (0.03%)
NYSE Composite: 11,207.24, -15.71 (-0.14%)

Stocks Drop, Rally In Split Session; Dow Down Three Straight; Apple Beats; Gold, Silver Rally

Beginning just after 2:00 pm ET, a furious rally brought US stock indices back from the depths of despair, finishing up Tuesday with a split decision, the S&P and Dow down, the NASDAQ and NYSE Comp. positive.

In close focus was the Dow Industrial Average, which was lower by as much as 186 points, but gathered back nearly half of that in the final two hours of the session. Leading the way lower were financial stocks, Goldman Sachs (GS) and JP Morgan Chase (JPM), the same companies that boosted the averages during the "Trump Rally" following November's election.

Now, it appears the euphoria over the presidency of Donald J. Trump is waning and enthusiasm for making America great again is falling prey to the harsh realities of economics, politics, and a divided country. Also weighing on stocks ae Trump's own bold initiatives, Twitter tweets and statements which appear to indicate that the 45th president is about to engage in an all-out, no-holds-barred currency and trade war with America's largest trading partners, in particular, China, Mexico and the European Union.

It just so happens that what President Trump is doing is exactly what he promised all during his campaign for the high office. Trump is truly an agent for change, but his changes - and the execution of them - are almost certainly not going to be smooth or predictable.

Today's targets of Trump ire included pharmaceutical companies, Germany and congress. Among other things, Trump told pharma execs to lower prices and move their operations back to the US.

Early in the day, President Trump's top trade advisor, Peter Navarro, said Germany was benefiting from a "grossly undervalued" euro, that gave Germany an unfair edge over US and fellow EU trading partners.

As for congress, Trump continues to hoot over the Democrats' stalling tactics on his cabinet nominees. In a procedural move, Democrat senators walked out on committee votes for nominations for Health and Human Services nominee, Tom Price, and Treasury pick, Steve Mnuchin. Democrats also delayed a vote (reportedly only until tomorrow) on Attorney General choice, Jeff Sessions, a position which has been the focus of vigorous debate.

All of this is providing cover for sellers and considerable confusion in global markets, sending the Dow into the red for a third straight day. Since the top tick of 20,125.58 on January 26 (last Thursday), the Dow has dipped 340 points intraday, or about 1.6%.

While it's still not enough to call a trend, it is worrying to some, especially since anybody with even marginal knowledge of stock valuations has to understand just how overvalued equities are, especially under the current changing environment.

Amid the carnage in stocks, gold and silver rallied sharply as the dollar slipped. Bond yields fell, with the 10-year note holding at 2.45%.

It's been often said that Wall Street hates uncertainty, and there's more than enough of that fueling the current dips and dives.

Just in after the close are Apple's (AAPL) earnings for its fiscal 2017 first quarter. Apple had $78.4 billion in gross revenue on expectations of $77.4 billion, and reported earnings of $3.36 per share on expectations of $3.21. IPhone sales were well beyond expectations. Shares of Apple were up more than three percent in after-hours trading, which should provide at least a temporary boost to stock prices tomorrow.

At the Close, Tuesday, 1.31.17:
Dow: 19,864.09, -107.04 (-0.54%)
NASDAQ: 5,614.79, +1.07 (0.02%)
S&P 500: 2,278.87, -2.03 (-0.09%)
NYSE Composite: 11,222.97, +17.73 (0.16%)

Global Markets Fall In Reaction To Trump Immigration Ban

In what may have been a completely convenient excuse to unwind some positions in overheated markets, analysts blamed Monday's global meltdown on US President Donald Trump's hastily-enacted immigration ban.

While the ban covers only seven countries - the same ones covered under a similar program under President Obama (Iran, Iraq, Syria, Yemen, Somalia, Libya, Sudan) - reaction from both affected and unaffected countries has been vocal, but especially in the US, where protesters (many of them paid) set up camp at airports in major cities.

Aside from the obvious left-leaning, liberal crying and tooth-gnashing, market participants largely over-reacted to the condition, giving pause to any instant analysis. What Trump may have done with the ban is fire a first volley in what may eventually prove to be an escalating trade war with the focus more on currency manipulation and tariffs than immigration limits and its consequences.

Not only were US markets lower on the day, equity indices around the world were down. That's an unusual circumstance worth noting, because, in the normal conduct of business, somebody's loss often results in gain somewhere else. Apparently, this was not the case, leading to the belief that the off-hand selling was little more than relief form overextended stocks.

On the flip side, this one-off event could be the beginning of a disorderly decline in the value of major equities around the globe and a beginning to the dismantling of a monetary system and bull market both of which are creaking from old age.

The days and weeks ahead should offer better insight to the overall direction of markets. Perhaps Trump's "America First" pledge means that US stocks will feel the brunt of the correction before the rest of the world gets on board. Deflation has reared its ugly head once again.

At The Close 1.30.17:
Dow: 19,971.13, -122.65 (-0.61%)
NASDAQ: 5,613.71, -47.07 (-0.83%)
S&P 500: 2,280.90, -13.79 (-0.60%)
NYSE Composite: 11,205.24, -77.95 (-0.69%)

Stocks Close Friday Flat Ending Wild Week As Trump's Immigration Ban May Kill The Rally

Stocks cautiously ended the first full week of the Donald Trump presidency just as Mr. Trump unveiled his most audacious edict via executive order, barring immigration from countries embroiled in the throes of radical Islam such as Syria, Iraq, Yemen and four others.

While market participants have been somewhat encouraged by a number of first-week moves made by the new president, the promised immigration shutdown may have more implication globally than anybody may have wished. Stocks finished mixed in a week which witness a number of new all-time highs, particularly the Dow, which surpassed and held above the 20,000 level for the first time ever.

At the Close 1.27.16:
Dow: 20,093.78, -7.13 (-0.04%)
NASDAQ: 5,660.78, +5.61 (0.10%)
S&P 500: 2,294.69, -1.99 (-0.09%)
NYSE Composite: 11,283.19, -29.93 (-0.26)

On the week, all major indices sported gains, led by the NASDAQ and Dow Industrials, though the ramifications from the immigration ban were yet to be fully appreciated. As markets set to open in the US on Monday, futures indicated a negative open while markets around the world were suffering significant losses despite China and Hong Kong markets being closed all week for the Lunar New Year holiday. The tenor of trading suggests that markets may not be going along for the protectionist ride that the Trump administration has in mind. "America First" may well turn out to be the death knell for globalization, but the results of such radical policy changes is sure to increase market volatility, which, to this point has been benign.

For the week:
Dow: +266.53 (+1.34%)
NASDAQ: +105.45 (+1.90%)
S&P 500: +23.38 (+1.03%)
NYSE Composite: +90.39 (+0.81%)

Dow Higher, All Other Indices Lower?

“If you owe your bank manager a thousand pounds, you are at his mercy. If you owe him a million pounds, he is at your mercy.”

― John Maynard Keynes

If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem.

-- J. Paul Getty

At The Close 1.26.17:
Dow: 20,100.91, +32.40 (0.16%)
NASDAQ: 5,655.18, -1.16 (-0.02%)
S&P 500: 2,296.68, -1.69 (-0.07%)
NYSE Composite: 11,313.13, -25.92 (-0.23%)

At Last! Dow Shatters 20,000 Mark; S&P 500, NASDAQ Also At Record Highs

No comment necessary since the topic of the Dow Jones Industrial Average breaking beyond 20,000 has been predicted, speculated upon, and beaten to death for more than a month running.

Incidentally, the S&P and NASDAQ also closed at record all-time highs.

The only question: will it hold?

Those of us who remember Dow 10,000 may recall that level being crossed some 57 times before finally moving on, so some back-and-forth is to be expected.

At the Close 1.25.17:
Dow: 20,068.51, +155.80 (0.78%)
NASDAQ: 5,656.34, +55.38 (0.99%)
S&P 500: 2,298.37, +18.30 (0.80%)
NYSE Composite: 11,342.70, +93.42 (0.83%)

Yo-yo Stock Trading Continues; Dow Trading In Worst Rut Of 115 Years

Spurred by Democrat proposals for a $1 Trillion infrastructure spending bill, stocks took the high road, with the S&P 500 and NASDAQ each making new all-time highs. As has been the case of late, the Dow Industrials proved the laggards, not making new highs, but once again closing in on the mythical 20,000 level.

The Dow is now in a trading rut that happens to be the longest, smallest trading range since 1990. That's a long time, so it's going to break one way or the other. Tomorrow may prove to be the day it goes over 20,000, or not. As long as President Trump and congress continue to lay groundwork on a vast variety of programs and possible legislative agendas, the stock markets (which, as we've been told, hate uncertainty) will likely continue to bob and weave like lightweights.

The move higher today for the indices was led by basic material and energy stocks, in sympathy for President Trump's executive action to resume work on the troubled Keystone pipeline, a project that figures to be bullish for companies such as ExxonMobil and Chevron.

Still, since mid-December, the Dow has gone... nowhere, a condition that should not be able to persist much longer.

Or can it?

At the Close 1.24.17:
Dow: 19,912.71, +112.86 (0.57%)
NASDAQ: 5,600.96, +48.01 (0.86%)
S&P 500: 2,280.07, +14.87 (0.66%)
NYSE Composite: 11,249.29, +78.67 (0.70%)

Trump Presidency Day One Sends Stocks Lower; Bonds, Precious Metals Up

Recall how everything was up on Friday, the day Donald Trump was sworn in as the 45th president of the United States?

Maybe it was a sugar high, market enthusiasm over the new faces in Washington, or just plain old vanilla speculation. Whatever it was, it certainly faded fast, as Monday, Trump's first full weekday as president saw markets getting closer and closer to a point of no return, at one point near midday having erased all of Friday's gains.

Fortunately for those of the bullish persuasion stocks held their own and finished with only minor losses. Oil was lower as well, though only marginally. In their places were some of the usual suspects from the other side of the trade; gold, silver, bonds, all rallied nicely. Gold continues to be the top asset performer for 2017, a welcome respite after three years of declines and a 2016 that saw it bounce nicely higher in the firt half of the year only to give back those gains in the second half, like a football team with a tiring defense.

As for the new president, he was busy. In the morning, President Trump met with business leaders and told them he'd like to roll back as much as 75% of existing regulations, most of them causing unnecessary reporting and tax burdens on businesses of all sizes.

Trump also signed three executive orders. One imposes a federal hiring freeze on all departments except the military, another pulled the US out of the Trans-Pacific Partnership (TPP), and the third re-imposed the so-called Mexico City Policy, outlawing funding of international organizations which promote abortion.

Previously, on Friday, when the President finally made his way to the Oval Office, he kept a campaign promise by signing an executive order that directs federal agencies to ease the “regulatory burdens” of ObamaCare. It orders agencies to “waive, defer, grant exemptions from, or delay the implementation of any provision or requirement” of ObamaCare that imposes a “fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.”

One would think that the order covered just about everything, making ObamaCare a ruined piece of legislation, soon to be formally repealed.

There was also movement on clearing the way for confirmation of any number of the President's cabinet choices and more speculation on whether the congress would approve a tax overhaul suggested by Trump during the campaign. The changes are still off in the distance, but congress should be getting on with it as soon as the foot-dragging over cabinet nominees ends.

Use the calculator below to see how Trump's tax plan would affect you:

At The Close 1.23.17:
Dow: 19,799.85, -27.40 (-0.14%)
NASDAQ: 5,552.94, -2.39 (-0.04%)
S&P 500: 2,265.20, -6.11 (-0.27%)
NYSE Composite: 11,170.63, -22.16 (-0.20%)

Best Wishes To President Trump; The Wall, Obamacare, Education

It's Official!

Donald J. Trump is the 45th president of the United States of America.

And the markets apparently loved it. The Dow was up. The NASDAQ was up. The S&P 500 was up. So was the Composite, the Nikkei, Gold, Silver, Oil, the dollar. Call it a relief rally. Market participants were relieved that the uncertainties of the past two years of electioneering, mudslinging, maligning, and campaigning were at long last, over. At least now some people can get to work, least of all the new president, like him, loathe him, or feign indifference, he's safely ensconced within the White House walls, with nary a cut, scrape, bruise, or wound.

At least that's what we're seeing through the prism of the news media. There were more than a few bruised egos at the swearing in ceremony on the West steps of the Capitol, facing the Washington and Lincoln monuments, but, some of the more expansive egos were soon swept off the stage and sent packing. The Clintons and the Obamas were whisked into obscurity by the forces of change.

As for our new president, Mr. Trump promises to be, at the very least, entertaining, if not outrageous. While such antics as late-night tweeting and calling people names may not sit well with his establishment critics, the American public will likely relish the shift from the obfuscation, misinformation, and underhandedness which typified the last 16 years of presidential conduct to a more - on the surface - open, progressive (that's a real word, meaning a real effort toward getting things done, not the fancy adversarial adjective applied over the last two decades by liberals), and positive approach to government policy.

It is obviously too early to tell whether President Trump will usher in a new age of American exceptionalism, but there is little doubt that he will try his best to keep his promises and work untiringly toward restoration of traditional American vales. There's also little doubt that he will face significant opposition from the left, the right, his own party, the Democrat party, liberal wingnuts who will protest anything at the drop of a hat, foreign leaders, the Twitterati, Facebook foes, and just about anybody who has an opinion on anything, many of whom will appear regularly on the vicious, unencumbered media whores doing their dirty work for the forces of their paymasters.

That's just how it goes when you rise to the top of the heap as Donald Trump has done. There's always somebody looking to knock you off your mighty throne, literally or figuratively. As for our sentiments here at the Money Daily headquarters, we wish him all the best and will continue to support him - as we did throughout the election process - as best we can. If he can deliver on even half of his campaign promises that would be quite an accomplishment, but we'll settle for three big items:

1. Build the damn wall.
2. Repeal the Affordable Care Act (it does not have to be replaced; we already have too many insurance companies, pharmaceutical companies and government involved in health care and would like to see much of that overhead removed)
3. Send education back to the states. The nation is too large and diverse (sorry, but the word does have its place) for a "one-size-fits-all" approach. Besides, the federal intrusion into education has been about as successful as the war on drugs or the war on poverty. Cut the Department of Education in half, or by two thirds, or, preferably, obliterate it.

In the meantime, Money Daily will try to stay out of politics and into money and economics, but, seeing the President and his staffers occasionally and regularly knee-cap the media whores wouldn't meet with any resistance from these parts.

Let the politicians do the dirty work. We'll aim to interpret the effects.

Let's start with a look down below at the weekly results. All four of the major indices were lower on the week, and that may be significant, but will be more so if that becomes a trend. The next two weeks are almost certain to be wild ones in terms of politicking and figurative bomb-throwing from the left, the right, and everywhere in between, but, if stocks continue to deteriorate (which happens to be our best guess for now), it's going to put more pressure on the new president. Not that he should do anything about it since he has no control of financial markets, but the media will crow endlessly about how the economy is going into the tank under the Trump administration.

We'll leave it there, for now. It's going to get a whole lot more interesting in coming weeks and months.

At The Close 1.20.17:
Dow: 19,827.25, +94.85 (0.48%)
NASDAQ: 5,555.33, +15.25 (0.28%)
S&P 500: 2,271.31, +7.62 (0.34%)
NYSE Composite: 11,192.79, +43.94 (0.39%)

For the Week Ended 1.20.17:
Dow: -58.48 (-0.29%)
NASDAQ: -18.78 (-0.34%)
S&P 500: -3.33 (-0.15%)
NYSE Composite: -34.38 (-0.31)

Globalism Is Dead And Dying At Davos

As the world prepares for a new American era to begin with the inauguration of Donald J. Trump as the 45th president of the United States, the global elites are gathered at Davos to interpret the condition of the world economy.

Ian Goldin, a professor of globalization and development at Oxford University spoke briefly at the World Economic Forum in Davos, Switzerland, saying,

“You can’t stop managing an entangled environment by disconnecting. This is the fundamental mistake of Brexit, of Trump, and of so many others. We are not simply connected. We are entangled. Our lives, our destinies are intertwined. What happens in China, what happens in Indonesia, what happens in India, what happens across Europe, and what happens in North America, across Africa and Latin America will affect all of us in dramatic new ways. The idea that somehow we can forge our future in an insular way, even for the biggest countries like the U.S., is a fantasy.”

Obviously, Mr. Goldin has been smoking too much of what he's been growing over the past couple of decades. To put it into a more precise perspective, Mr. Goldin kneels at the altar of globalization, thus, he's unprepared to express or even admit that there's any other opinion or world view than the one he personally promotes.

If one were living in a rural area in America, or India, or the Congo, even, the effects of global initiatives like those espoused and implemented by the people at Davos would be minimal, at best. One would still water plants, feed livestock, wash eggs, and perform all the other chores of a minimal farming/subsistence lifestyle. Mr. Goldin, being of the elitist character, has virtually no concept of digging holes for posts, erecting fences, germinating seed, slaughtering hogs, gathering chicken eggs daily, and so on. He's about as disconnected from the reality of everyday life as one could possibly be, viewing the world from his ivory tower at Oxford as he glances up briefly from his reading of some other obviously clueless professor emeritus or other "authority" whose mantra to which he subscribes.

Therefore, as we've seen in the Brexit movement and the election of Donald Trump as the next president of the United States of America, the globalist agenda is dead in the water, disconnected and disintegrating. The annual fete at Davos - through the media filter, at least - gives everyone an opportunity to see firsthand just how audaciously and vigorously the gathered elitists continue to promote their agendas. Liberalism, diversity, and globalism are all joined together into a kind of religion of the rich and powerful, but, the masses need not adhere to what is looking increasingly like failed policy.

If globalism has taken thirty or forty years to expand itself into monstrosities such as the European Union, the Arab Spring, and unadulterated acceptance of gay marriage, it's likely going to take an equal amount of time to dismantle its various parts and replace them with more stable value systems. As the globalists retreat from their worn-out traditions and values, popular uprisings will accelerate the decline. It starts, as do all major moral or political or economic upheavals, on the fringes of society, in the hinterlands, so to speak, before spreading to all ranges of the spectrum, from old to young, from the countryside to the cityscape.

We are at the beginning of a new age, one which promises the demise of authority at all levels from local to supranational and more freedom for the working classes and ordinary citizens.

On cue, one day before the actual inauguration of the man all the "experts" said had no chance of winning, Donald Trump, world markets continued a dizzy dance of denial and suspense, especially the Dow Jones Industrial Average, which spasmodically descended today to a point below where it began the year, closing at its lowest level since Decemeber 30 of last year (19,732.40, -72.32 (-0.37%)).

Though the drop in percentage terms was hardly sensational, the level is of more immediate concern. Since December 12, the intraday level never fell below 19,718, the mark made on the final day of trading for 2016, December 30.

While broader indices, the S&P 500 and the NASDAQ, retained a positive tilt for 2017, it has been the Dow that garnered the most attention of late, especially over its historic (failed) attempt to crack the 20,000 level.

With Trump taking the oath of office at noon tomorrow, the question on every trader's mind is how the markets will respond. With a whimper or a yawn, or might the Dow set aim again for an historic close?

At The Close 1.19.16:
Dow 19,732.40, -72.32 (-0.37%)
NASDAQ: 5,540.08, -15.57 (-0.28%)
S&P 500: 2,263.69, -8.20 (-0.36%)
NYSE Composite: 11,151.69, -44.41 (-0.40%)

Risk On - Risk Off Roller Coaster Is Expected In The Age Of Trump

Get used to volatility in the age of Trump.

Markets - especially stocks and bonds - are more than likely to correct and enter bear territory during Trump's administration. The bond bubble has been extended beyond its "use by" date and the stock rally since 2009 has been nothing short of miraculous, if one considers the creation of 11 trillion dollars (probably more) out of thin air to be the stuff of miracles.

Stocks and bonds are both overvalued, thus, we should experience a 10-year note at 3.0% or higher at some point in the near future, and stocks reversing course due to the competition and relative safety of bonds. Trump's policies are likely to exacerbate the condition of extreme overvaluation which will manifest itself in wild swings. He'll certainly get much needed help from the Fed, whose stated aim is to impose a regime of never-ending inflation.

Problem is, there are major distortions in the US and global economy, mostly the overhang from doing nothing to fix the issues of 2008 (actual bank failures). Let's see interest rates rise, stocks fall and somehow, inflation? A dubious argument at best.

Deflation is the friend of the frugal and that's what's coming. With less capital to blow on hookers and blow, the thrift-loving Americans in the heartland (forget the cesspool cities, they're toast) will benefit from all manner of liquidations and fire sales. It's a transfer of wealth from rich to poor and urban to rural that is long overdue. Most of the debt is tied to cities, not arable land and/or hunting/wilderness/undeveloped/underdeveloped properties.

One can get a unique impression from living in one of America's poorer areas, such as rural upstate New York, but you know what? Some people are thriving, those being land owners, farmers, growers, people with roadside stands, trade specialties, mechanical abilities and low overhead. It's pretty basic stuff, but large swaths of rural America are going to be very affordable and desirable. The cites, not so much. Pain for some, gain for others. The survivalist mentality had it right all along and will be proven winners in coming months and years.

As for today, two days before Mr. Trump assumes the office of president, markets were roiled again, lurching from one idea to another, up, then down, then sideways. European stocks were higher, WTI crude oil got smashed early but rebounded. Gold was flat, then lower; silver, always the outlier, hit its best level in a month, ended the day in New York down on the session, and has been trending higher into the inauguration, but options and futures settlements are closing fast (26th and 27th of January).

Mostly, stocks tread water and didn't offer much in the way of direction though by now, unless reading charts is grossly overrated, it's apparent that the Trump rally has run its course and Dow 20,000 is a fleeting memory.

At The Close 1.18.16:
Dow: 19,804.72, -22.05 (-0.11%)
NASDAQ: 5,555.65, +16.93 (0.31%)
S&P 500: 2,271.89, +4.00 (0.18%)
NYSE Composite: 11,196.11, -0.18 (-0.00%)

Donald Trump Moves Markets; Hugo Salinas Price Details Decline In International Reserves

It was back to work on Tuesday for US speculators, and the mood was gloomy as president-elect Donald Trump quipped that the "dollar is too strong," which sent world markets into a wild frenzy.

Asian and European markets had already been upset on Monday, while the US rested for the Martin Luther King Jr. holiday, but on Trump's vocalizing of displeasure, US markets took it to heart.

The Dow Jones Industrial Average backed away from the formerly-attainable 20,000 mark, down 110 points on Monday before a late rally slashed the losses in half.

It is apparent that the euphoria over Trump has faded significantly and American investors are heading for safer shores, mostly in bonds and cash, though precious metals may have even more appeal with gold and silver both making new highs for the year on significant gains. Spot silver stood at 17.175 and gold at 1216.70 at the close of trading in New York, but the rally may be just beginning to heat up.

Hugo Salinas Price makes important notice of the abrupt decline in international reserves. Of all the reports on matters economic, his may be the most acute and insightful. It's a must read and should be given careful consideration due to Mr. Price's status among economic thinkers.

At the Close 1.17.16:
Dow: 19,826.77, -58.96 (-0.30%)
NASDAQ: 5,538.73, -35.39 (-0.63%)
S&P 500: 2,267.89, -6.75 (-0.30%)
NYSE Composite: 11,190.76, -36.41 (-0.32%)

NASDAQ Posts Seventh Record Of 2017; Dow Flat; Gold Outperforming All Other Assets

As America lurches toward inauguration day (Jan. 20), stocks remain a mixed bag.

The Dow ended the week with a small loss on Friday as the NASDAQ rose to another record close, its seventh this year.

For the week, the NAZ was up nearly one percent. The Dow's loss was minor, at less than one half percent (-0.39%), but the broader S&P and NYSE composite suffered almost no depreciation.

Overall, it was fairly uneventful in markets, which is odd, given the cross-currents blowing through the political and economic spectrum.

Next week, with the inauguration of Donald J. Trump as America's 45th president putting a final glow on the proceedings, promises to be a more volatile period, shortened by one day, as markets are idle for Monday's Martin Luther King holiday.

Ominously, the Dow Jones Industrial Average remains positioned below the expected 20,000 level but has been flat as a pancake for the past four weeks.

WTI crude oil remains mired in the mid-fifties, while gold, the year's best-performing asset thus far, pierced the 1200/oz. mark on Friday but fell off and closed at 1196.90 the ounce.

At The Close 1.13.16:
Dow: 19,885.73, -5.27 (-0.03%)
NASDAQ: 5,574.12, +26.63 (0.48%)
S&P 500: 2,274.64, +4.20 (0.18%)
NYSE Composite: 11,227.17, +23.02 (0.21%)

Week Ending 1.13.16:
Dow: -78.07 (-0.39%)
NASDAQ: +53.06 (0.96%)
S&P 500: -2.34 (-0.10%)
NYSE Composite: -10.45 (-0.09%)

Stocks Slump, Regain Ground In Anxious Session

Yesterday, it was big pharma that took a hit after Donald Trump singled them out in his press conference, saying that the US government would begin bidding lower prices for many prescription drugs.

Today, health care insurance companies took the hit - if only briefly - as the senate pushed forward a bill to repeal the Affordable Care Act (ACA), otherwise known as Obamacare. Aetna, Anthem, Cigna and United Health were among a handful of companies that felt some shock at the open.

The Senate voted 51-48 on a measure to repeal the current president's signature health initiative. The measure now will move to the house where its passage is all but assured, with the membership heavily weighted with Republicans.

As for the rest of the market, stocks went red at the open and trimmed early losses after 11:00 am ET. The Dow was down more than 180 points in the early going, but manage to recover almost two thirds of the losses as the session dragged forward.

Missing from the narrative today was the chorus of "Dow 20000," as the industrial index extended its failed attempt at the historic milestone for the 22nd straight session.

Maybe tomorrow...

At The Close 1.12.16:
Dow: 19,891.00, -63.28 (-0.32%)
NASDAQ: 5,547.49, -16.16 (-0.29%)
S&P 500: 2,270.44, -4.88 (-0.21%)
NYSE Composite: 11,204.15, -22.63 (-0.20%)

Trump Presser A Non-Event; America Awaits Inauguration

Though widely-anticipated as a market moving event, President-Elect Donald J. Trump's press conference at 11;00 ET today was more or less an exercise in sell the hype, buy the news.

Trump handled questions about the "fake news" Russian dossiers widely circulated by CNN and other outlets and quickly dismissed them as nonsense. The audacious level of mendacity displayed by the mainstream media in the run-up to the inauguration of America's 45th president has been unconscionable and unprecedented, but the Donald managed to deflect any potential harm as the media and intelligence community reports have been devoid of facts or proof of their veracity.

Other than waving off and refusing to take questions from anybody from CNN, Trump laid out basically the same nebulous outlines upon which he campaigned, without getting too specific. Thus, what the market wanted was not what they received, but traders were assuaged by the one-hour appearance and resumed trading within the prevailing range of the past month, between 19,800 and 19,999.

If the market seems moribund, it's likely the result of non-specifics from the soon-to-be-sitting president, meaning this regime of up-down-up-down may persist through the next week, culminating in next Friday's inauguration.

Otherwise, it was another uneventful day, with the Dow still planted just south of 20K.

At the Close 1.11.16
Dow: 19,954.28, +98.75 (0.50%)
NASDAQ: 5,563.65, +11.83 (0.21%)
S&P 500: 2,275.32, +6.42 (0.28%)
NYSE Composite: 11,221.92, +38.59 (0.35%)

Dow 20000 No Go Again; Is The Trump Rally Over?

In 2016, having first crossed the 19,800 point on December 12 and closing above 19,900 the following day, one would have thought that crossing the 20,000 rubicon for the Dow Jones Industrial Average would have been a slam dunk before New Year.

It wasn't and it still isn't. Like the final five yards on a scoring football drive, the final 100-200 points on the widely-watched blue chip index are proving to be tough, resistant, and, at this point, possibly a field goal attempt would be in order. Or a punt.

Including the 12th of December, it's been 20 days since the "Dow 20,000" baseball caps began circulating, but nobody's been able to don one just yet. There has been more than a fair share of drama over the simply psychological level, especially this past Friday, when the average fell just 0.37 points short of making magic.

But twenty days of hanging just below the number is giving some investors cause to pause and consider that the eight-year bull market - and more specifically, the massive post-election Trump rally - is finally tiring and about to head back to the corral. And if that happens, the confidence so prevalent the past few months will have been for naught unless one had the foresight to sell into the rally at some point.

Stocks continue to be highly valued, some say overbought. The last meaningful decline was in January of last year when the Dow and other indices took a hit somewhere between 12 and 15%. Though that particular correction never materialized into a bear market, it was a confidence-shaker and those who suffered losses are wont to forget it.

Taking a stab in the dark, it would appear that speculators are more interested in NASDAQ stocks, which continue to tear up new highs, just as the Dow is stalling. Could the NAZ pull the Dow along with it, or does the Dow hold the losing hand with which it will eventually pull down the composite, S&P, transports, et. al.?

With the Dow ending today roughly 150 points from the requisite top, it's still out there for the taking, though there seems to be no catalyst for any kind of extended move, so, reiterating past posts, even if the Dow makes the mark, it's doubtful it would hold for long. A correction is in the cards and it's likely to be swift rather than a slow grind, so day traders must keep stop losses close to the vest and hang on with all their fright. Yes, that's no typo. Fear and greed rule the markets and the fear index is on the rise.

At the Close 1.10.16:
Dow: 19,855.53, -31.85 (-0.16%)
NASDAQ: 5,551.82, +20.00 (0.36%)
S&P 500: 2,268.90, 0.00 (0.00%)
NYSE Composite: 11,183.33, +13.54 (0.12%)

Futures: Right Or Wrong Directional Trades; 12 Step Bloody Mary Redux

Stocks never had a chance on the first day of the first "full" week of trading (last week was only four days), dropping like rocks from a crumbling overpass at the open, only briefly showing any positive momentum and closing lower for the day, with the obvious exception of the wildly overpriced, speculative, and soon-to-crash NASDAQ.

The Dow refused to get even within earshot of 20,000, falling instead below 19,900 at the close, so the (so far) winning strategy of Fearless Rick remains intact. The peerless prognosticator called for "no Dow 20,000" by year-end 2016, and reiterates the same sentiment until June 2017, with a "may not" break over 20,000 until the year 2023.

It's a bold shot across the bow of the happy-happy, joy-joy "recovery" or the trumpeters of one Donald J. Trump, the president-elect who vows to "Make America Great Again." Not that Fearless Rick doubts the Donald; he backed his campaign from the start, predicting he would win the presidency as far back as December 31, 2016 (all the way at the end of the article), but the Trump years in the White House may be a calculated, "one step forward, two steps back," as radical policy shifts will cause some serious FUD (fear, uncertainty, doubt) and some liquidations that should have happened in 2008 or 2009 will occur under the Trump banner (see Sears, Mexico).

All of which brings up the point of futures and options, wherein one's ability to predict events beforehand is called into serious question. As a matter of fact, all investors are predisposed to make wagers on future events, whether they be into stocks, commodities or precious metals, because one would not "invest" in a company or anything without some idea that it would be worth more tomorrow or next month or next year than it is today.

Thus, investors fall into various camps, which, for matters better discussed elsewhere, are largely defined as "right until you're wrong" and "wrong until you're right."

The matter is simple, but real life examples provide the most descriptive narrative.

Take Fearless Rick's one-way bet on Dow 20,000. That's a case of being "right until you're wrong." So far, Rick is right and myriad derivative trades can be based upon his open principle, especially if one is to extend the time frame out to the ludicrous, or in this case, 2023.

Rick is also a precious metals speculator. In December he called for silver under $16 when it was trading in the range of $17 to $18. He was, early on, "wrong until he was right." The implications for investors - and one could take a lesson or two from the movie "The Big Short" for a glimpse at how extreme these future "wagers can become.

Speculation, prognostication and risk are not for everybody, especially those of feint heart. For the rest of us, it's a way of life.

It seems to be a law of nature, inflexible and inexorable, that those who will not risk cannot win.

--John Paul Jones

At The Close 1/9/16:
Dow: 19,887.38, -76.42 (-0.38%)
NASDAQ: 5,531.82, +10.76 (0.19%)
S&P 500: 2,268.90, -8.08 (-0.35%)
NYSE Composite: 11,169.79, -67.83 (-0.60%)

And, just because it's the preferred weather for Bloody Mary's, Fearless Rick's 12-Step Bloody Mary™
1. Glass
2. Ice
3. Vodka
4. garlic pepper
5. hot sauce
6. ground black pepper
7. worcestershire sauce
8. celery seed
9. tomato juice
10. lime (or lemon) juice
11. horseradish
12. combine, stir and drink.

Apologies to alcoholics everywhere, from drunks around the world.

The Dow 20,000 Ceiling

After the release of the non-farm payroll data for December, futures rose on the news that the nation created 156,000 net new jobs in the month, just shy of consensus estimates for 170,000. What may have been the cause for optimism was the 0.4% increase in wages carried in the report. The unemployment rate rose a notch to 4.7%, but that was at 8:30 am ET, an hour before the market open.

The bigger event began hours later as the Dow Jones Industrial Average - with the other major indices in tow - powered higher, eventually getting to within 0.37 points of the mystical, magic mark of Dow 20,000. The stall occurred at 19,999,63, the high for the day, right around noon.

For roughly the next four hours, the Dow tantalized and amused traders and spectators alike, hovering just below 20,000, reaching to within single points on various occasions.

But it never made it, as though somebody had placed a lid on the market right at the 20,000 mark. The index struggled and failed, over and over again throughout the afternoon, to no avail. Finally, with less than ten minutes remianing in the trading day, all the stops apparently run, the ghost was given up and the Dow closed not only short of 20,000 but also shy of a new record, at 19,963.80, a few ticks short of the all-time high close made on December 20 of last year, 19,974.62.

Explanations abound as to why the Dow cannot break through this hysterical, purely-psychological number, the best of them probably involving program trading, as computer algos have been set to sell as the number is approached. If that is the case, there's more than a few sharpies on Wall Street thinking that stocks are severely overvalued, or that even if Dow 20,000 is pierced, it will not hold.

Stocks are severely overvalued, boosted over the past eight years by cheap funding courtesy of the Federal Reserve, whose pockets are being emptied, replaced by promises to pay in the form of treasury and mortgage bonds, many of them losing value.

This was a close call for sure, but the 20,000 mark still stands triumphant over a market that continues to show weakness and an unwillingness to carry through to even higher figures.

With this in mind, the question to be answered over the weekend is, will it do it on Monday? Tuesday? Ever?

From all appearances, with markets stretched to the breaking point, it's not a very good bet, no matter how close it gets.

Thus, the first trading week of the new year ends in tears, though it was a profitable one for stocks with the notable exception of the NYSE Composite, which closed down for the day. Gains were made on all major indices, but perhaps people should be paying more attention to interest rates, which, after an initial surge in yield following last month's 25 basis point hike in the federal funds rate, have fallen hard. The 10-year note yielded 2.418%, but closed Thursday at 2.368%, the lowest yield in a month. While the apparent reversal from the Fed's induced yield above 2.50% is not set in concrete, it is surely something which bears close inspection. Spreads have narrowed since the rate hike, an ominous sign of rough times ahead. If stocks falter, the stampede into bonds will be overwhelming, but possibly the move has already begun in anticipation of a stock market correction or reversal into a bear market.

However, elite traders can pat themselves on the back as they head home for the weekend. So far, January 2017 is looking good for equities, despite the obvious failure at Dow 20,000.

At the Close 1.6.16:
Dow: 19,963.80, +64.51 (0.32%)
NASDAQ: 5,521.06, +33.12 (0.60%)
S&P 500: 2,276.98, +7.98 (0.35%)
NYSE Composite: 11,237.63, -10.06 (-0.09%)

For the Week:
Dow: +201.20 (1.02%)
NASDAQ: +137.94 (2.56%)
S&P 500: +38.15 (1.70%)
NYSE Composite: +180.73 (1.63%)

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

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

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

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

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

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

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

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

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

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

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

Stocks Edge Closer To Dow 20,000

Just the numbers at the close:
Dow: 19,942.16, +60.40 (0.30%)
NASDAQ: 5,477.00, +47.92 (0.88%)
S&P 500: 2,270.75, +12.92 (0.57%)
NYSE Composite: 11,246.55, +92.20 (0.83%)

Looks like tomorrow could finally be the day.

Stocks Up On First Trading Day Of Year, Signifying Nothing

Having - i some small ways - dispelled the concept that reaching for fantastic numbers such as Dow 20,000 is somehow productive, traders today took no heed of... well, anything, and pushed the DJIA close to the historic, albeit meaningless, mark.

That was early in the day. Shortly after the noon hour, the Dow had given up nearly all of the gains (all 160+ points) and was close to UNCH for the day. At the same time, the big run-up in WTI crude - to its highest level in 18 months (July 2015) - quickly was eviscerated, sending crude back below the break-even point for the day and into the red, where it closed on the NYMEX (53.49, -1.17).

However, the trading was not over on the stock exchanges and market participants seemed determined to open 2017 on a positive note, which they did, the major averages closing about 25% off their high points of the day.

Gains were well distributed, with nine of ten sectors positive, led by basic materials and energy. The only loser was utilities, though the loss was mild (-0.07%).

None of this one-day-one-off momentum-fest should be cause for alarm nor excitement. It's a new year, loaded with new ideas and fresh money and that money needs to go to work. While there are still impediments and potholes on the road to a brighter economic future and higher stock prices, none of that appeared to be of any consequence today.

Tomorrow may be another story with the very good possibility that the Dow will pierce the golden 20,000 mark and go well beyond. On the other hand, the evidence from the final two weeks of 2016 was robust in telling that the Trump rally from election day forward had run out of steam, so sideways could be the order of the day.

Money Daily was correct in predicting that Dow 20,000 would not be achieved in 2016. The second hypothesis was that it wouldn't reach that number until June of this year. Our third and most bombastic call was to say that Dow 20,000 may not be hit until 2023. Note the word MAY. We did not say the Dow would NOT reach 20,000 by that time, only that it MAY NOT. Big difference, but the call is based on a nascent understanding that everything in finance-land is not as rosy as the fake news media might have all of us believe.

The concept is very deep and rooted in a theory that the bulk of stock gains since the GFC of 2008 were achieved only though the means of depreciating and nearly decapitating currencies around the world. If money is cheaper today than it was yesterday, assets will accordingly be priced appropriately higher. Of course, should this free-money regime persist (we think it won't) then Dow 20,000 is not only achievable in the short run, Dow 30,000 would be in the kluge lights in short order, as would Apple at 250, and sirloin steaks at $24 a pound. In other words, inflation, then hyperinflation - such as is the case in Venezuela today - would make pricing irrelevant. Survival on $100,000 a year would be challenging and nobody is looking forward to that kind of nightmare scenario.

So, we see the gains of the last eight years as chimeras, and fading. And, if they fade, they will continue to fade until they are almost all gone. Not that a major, dramatic, collapse in prices would be a panacea for a better world, but only one which could be called closer to rational.

That's the view.

At the Close: 1.3.17:
Dow: 19,881.76, +119.16 (0.60%)
NASDAQ: 5,429.08, +45.97 (0.85%)
S&P 500: 2,257.83, +19.00 (0.85%)
NYSE Composite: 11,154.35, +97.46 (0.88%)

2016 Ends On Sour Tone As Stocks Sell Into Year-End Close

At the Close: 12/30/2016:
Dow: 19,762.60, -57.18 (-0.29%)
NASDAQ: 5,383.12, -48.97 (-0.90%)
S&P 500: 2,238.83, -10.43 (-0.46%)
NYSE Composite: 11,056.90, -17.43 (-0.16%)

Over the final three weeks of 2016, the financial community focused on not buying Christmas presents or planning a New Year's gala event, but boosting stocks to a point at which they could be sold for a tidy, late-year profit, and they did so by ramping up the Dow Jones Industrial Average to stratospheric levels before dumping the blue chip shares into the laps of terminally brain-dead bag holders, i.e., pension funds.

This maneuver was rather artfully crafted, with the financial media cheerleading the ascent to the magical "Dow 20,000" level, which, as most readers will note, is anything but magic. The figure is plainly something upon which ordinary people (pension fund managers) could focus their extremely short spans of attention. 20,000 points on the Dow can be compared to other nostalgic remnants of history, like 300 million Americans, 60 home runs, or five percent unemployment.

These are just numbers, and, while numbers themselves don't lie, when placed in a variety of contexts, the narratives blur the lines between fact and fantasy. To say that a certain level of unemployment is "maximum", or that another number is an historic record (and thus something to which others can aspire) reinforces the perceived value of such a figure. It does not change the fact that the number itself is innocuous, lonesome, and static.

Having control over vast swaths of money and capital, as do central bankers and their agents, allows considerable control over the flow. Stocks and commodities are easily controlled by such enormous hordes of cash and certificates; bonds and real estate less so. Thus it's no surprise that US stocks went into overdrive upon the election of Donald J. Trump as the 45th US president. This was after various implied warnings about a massive correction should the media star and real estate mogul win the election and was also on the heels of an enormous dumping in the futures market. Unwashed have limited insight, knowledge or memory of how large was the shift from futures to the US open on the day after the election and how well orchestrated was the late-stage rally from early November until just before Christmas.

From November 9 through December 13, the Dow added in excess of 1900 points (from 18,332.74 to 19,974.62), a gain of 1641 points, or, more than 8% in a period of less than seven weeks.

In other words, anybody who was right about Trump winning (not as out-of-the-question as the media had everybody believing) and wrong about the market outcome made a simple, inexcusable error of judgement. Those people trusted the same media narrative that was lying to them on both ends. As it turns out, Mr. Trump was a viable candidate capable of winning the election and the market was going to rally upon his victory, not drop into a sinkhole.

It was a great setup keyed by none other than everybody's favorite globalist central bankers and their agents at Goldman Sachs, the latter group eventually the recipient of more than just a few, token places inside the incoming Trump administration, but also the benefactor in a mammoth stock run which added significantly to the wealth of insiders at, or close to the center of the firm.

But Dow 20,000 was not to be. It was the cherry on top of the sundae meant for the little guy, but it was devoured by ravenous market forces otherwise known as naked short sellers, ostensibly, the large money crowd.

So, 2016 ends with a whimper rather than a shout. Delusional traders and hopeful investors will likely bear witness to more of the same chicanery in 2017. Nobody wants to admit that they're mere pawns on a global chessboard, therefore damming themselves behind a wall of self-doubt, misinformation, lies, and half-truths.

Happy New Year!

Week Ending 12/30/2016:
Dow: -171.21 (-0.86%)
NASDAQ: -79.57 (-1.46%)
S&P 500: -24.96 (-1.10%)
NYSE Composite: (-71.90, (-0.65%)

Santa Claus Rally? Bah, Humbug; Dow Sheds 111 Points

After all the hoopla and expectations surrounding the magical "Dow 20,000" mark, it appears that some investors have made up their minds and are selling the rally, as any astute big hitter might.

While its fun to think that stocks will continue to reach ever higher and higher levels forever into the future - a reasonable strategy for those with a 20 or 30-year time horizon - it isn't exactly realistic to expect stocks that are already at historic levels to keep chasing higher.

The arguments in favor of a correction grow stronger with each passing month. The bearish position is bolstered by any number of factors, including:

Extreme valuations (stocks are trading well above the average P/E of 16)
Recent performance (prior to Wednesday's triple-digit decline, the Dow has gained nearly 2000 points (12%) since November 8)
Weak macro data including soft industrial production, capacity utilization, spotty data worldwide)
Strong dollar (normally bad for US exporters and thus, many US stocks)
Recent hike in the fed funds rate and the potential for continuing interest rate gains making bonds more attractive as an alternative to stocks
Zero to negative income growth for the majority of the population
Record stock buybacks reducing participation and making a mockery of EPS
Market timing vis-a-vis capital gains taxes (January is usually be a great time to book gains)

Chasing stocks at this juncture is a fool's errand, as it would amount to the inverse of the "buy low, sell high" adage that has guided even novice investors for eons.

There are more than a few out there reading the tea leaves for what they are rather than what they appear to be.

At the Close, Friday, December 28, 2016:
Dow: 19,833.68, -111.36 (-0.56%)
NASDAQ: 5,438.56, -48.89 (-0.89%)
S&P 500: 2,249.92, -18.96 (-0.84%)
NYSE Composite: 11,058.88, -87.52 (-0.79%)

Nine Days And Counting: Dow Fails To Surpass 20,000; Luck Matters

Nine trading days have come and gone since the Dow surpassed the 19,900 mark with expectations that Dow 20,000 would soon be a number we'd be looking at in collected rear view mirrors. It was also the day before the FOMC of the Fed issued their well-telegraphed, monumental 25 basis point increase to the federal funds rate (AKA, the Go F Yourself rate for savers), a marketing stroke of genius by the self-appointed rulers of all marketplaces, everywhere, forever.

Well, what happened?

In technical terms, the Fed put the kibosh on stocks. 20,000 didn't happen, just like other sure things this year, such as Hillary Clinton winning the election to become America's 45th president (love that one, just can't give it up).

Other things didn't happen over the past nine trading days (plus one weekend) that were not nearly as important. Donald Trump didn't resign before taking the oath of office (sorry to the serially constipated never-Trumpers like Bill Kristol), nobody killed any special lions or panda bears, and no enormous meteors struck the earth ending the human species (really happy about that last one).

But, a few days ago (Wednesday, Dec. 21), Fearless Rick made possibly the most outrageous prediction of his inglorious career as writer, journalist, blogger and general miscreant. He touted his belief that the Dow would not break the 20,000 mark this year or at least until June, 2017. He mused that the Dow "may" not hit 20,000 until 2023.

Here's his exact quote:

The Dow isn't going to make it to 20,000 this year, and it won't make it by June of next year. In fact, it may not hit 20,000 until 2023. Book it.

So far he's right. But there's still five trading days left in 2016, so plenty of people are rooting against him, including some fat guy in a weird red suit promising some absurd thing known as a Santa Claus Rally. Good luck with that. Far fewer are betting against him, however, as the market in general, and the Dow in particular, seems to have peaked.

There's still plenty of time for him to be wrong. There's the six months until June, and the seven years until 2023. But, since one and seven are Fearless Rick's lucky numbers, he may eventually to be more lucky than good.

We shall see. In case one missed all the non-action of Friday's market churning, it went something like this: Down, slightly, sleepwalking though midday, rabid short-covering into the closing last ten minutes, boosting all the major indices into positive territory. We have all seen this play before. Yawn, and Merry Christmas.

At the Close, Friday, December 23, 2016:
Dow: 19,933.81, +14.93 (0.07%)
NASDAQ: 5,462.69, +15.27 (0.28%)
S&P 500: 2,263.79, +2.83 (0.13%)
NYSE Composite: 11,128.80, +14.66 (0.13%)

For the week:
Dow: +90.40 (+0.46%)
NASDAQ: +25.53 (+0.47%)
S&P 500: +5.72 (+0.25%)
NYSE Composite: +3.58 (+0.03%)

Dow Misses Another Opportunity To Surpass 20,000; Rally May Not Have Legs

Now that the flirtation with 20,000 on the Dow is waning, perhaps the market and its participants will return to some semblance of regular trading as opposed to the mad year-end dash for cash following the election.

While financial pundits are still calling the recent burst higher the "Trump Rally," it probably has little or no relevance to the election of the real estate magnate as the 45th president of the United States. What it has to do with is window dressing for fund managers, loading up on hot stocks to adorn their year-end portfolio prospectuses.

Less realistic is the opportunity for the rally to continue, especially after the major league run-up and two straight days of losses on the main indices. Though not large, today's declines were in a very slight range, but interestingly, stocks fell behind the unchanged line at the open and stayed there throughout the session, indicative of a tired market, though perhaps Friday will provide some news and another boost for the Dow 20,000 hat crowd.

Even that possibility seems remote, as the quad witching expiry was last week and the closeout to this week will be more reminiscent of a dash out the door than a frenzied trading day. It is, after all, just one day prior to Christmas Eve, and, despite rumors to the contrary, even Wall Street traders are human.

There's also scant data coming forward and just about everything but kitchen sink futures have been priced in for the final week of 2016. Anybody seeking profits at this juncture has truly missed that boat.

So, Friday is going to be dull and the cries of "Dow 20,000" are not to be heard around these parts for a while. Taking a little off the top going into the new year isn't exactly a bad idea, and it seems to be catching on with more than a few.

There still is time for the annual Santa Claus rally, traditionally the final week of the year, but the Trump rally may have grounded old St. Nick. We'll find out next week.

At the Close 12/22/16:
Dow: 19,918.88, -23.08 (-0.12%)
NASDAQ: 5,447.42, -24.01 (-0.44%)
S&P 500: 2,260.96, -4.22 (-0.19%)
NYSE Composite: 11,113.04, -29.52 (-0.26%)

Seven Straight: Dow Misses 20,000 Mark Again; Stocks Slip; Fearless Rick Calls 20,000 In 2023

In what was the Dow's narrowest trading day since 2013, the widely-watched industrial average failed to ramp over the 20,000 mark. The DJIA fell on light volume, as did all other major indices, along with WTI crude, silver, gold and treasury yields.

Financials managed to hold green post-Fed but all other sectors are lower since the rate hike announcement a week ago. Speaking of lower, volume has completely dried up. Bonds got a small bid on the day, pushing yields slightly lower, the benchmark 10-year note was down 0.022, finishing at 2.546.

It was a day of reflecting on what has happened in 2016 and weighing the possibilities of the rally extension beyond the magical 20,000 number, which, in the long and short of it, is wholly psychological and largely meaningless unless one has invested heavily in "DOW 20,000" baseball caps.

This leaves managers with just seven more trading days to square their books for the year, something any smart (read: few, if any) player would have already accomplished prior to heading off for the holidays. Seven is also the number of days that people thought the Dow would breach 20,000. Something about that number...

A betting man would give good odds that the Dow won't break the 20,000 barrier this year and might get an even better shake on the Dow busting through by June of 2017, but it may be a bet worth taking. Failure of markets, especially after a long run-up and a bull market that's extremely overextended, is rather common. The chances of a pullback between now and February seem almost certain, especially beyond the rate hike and the obvious tax incentives to sell come January 3rd, the opening trading day of next year.

Since Money Daily publisher Fearless Rick has already established himself on two accounts lately (the Trump call in Ocotber and the more recent "silver under $16" post a week ago, he's ready to plunge headlong into this debate. Here's the call:

The Dow isn't going to make it to 20,000 this year, and it won't make it by June of next year. In fact, it may not hit 20,000 until 2023. Book it.

Obviously, our intrepid publisher is going out on a limb rather than risking one. He's currently long machinery and undeveloped real estate. Yikes!

At The Close, 12/21/16:
Dow: 19,941.96, -32.66 (-0.16%)
NASDAQ: 5,471.43, -12.51 (-0.23%)
S&P 500: 2,265.18, -5.58 (-0.25%)
NYSE Composite: 11,142.57, -29.62 (-0.27%)

Close, No Cigar: Dow Fails To Top 20,000

Just the facts, ma'am.

Well, maybe tomorrow.

Tuesday's Closing Quotes:
Dow: 19,974.62, +91.56 (0.46%)
MASDAQ: 5,483.94, +26.50 (0.49%)
S&P 500: 2,270.76, +8.23 (0.36%)
NYSE Composite: 11,172.20, +43.66 (0.39%)

As 2016 Winds Down With Stocks Up, What's In Store For 2017?

Recently, Americans and observes worldwide have been subjected to overreaction by lawmakers and media types over the "Russian hacking" of the recently-resolved US presidential elections and the possibility that certain electors in the electoral collage would bolt from the Trump camp in enough numbers to deny Donald Trump the needed 270 votes to certify him as America's 45th president.

As of 4:30 pm ET Monday, the electoral college did its job, giving Trump 306 votes, confirming his November victory and assuring the American public that all politics would proceed normally (we believe) for the foreseeable future.

Additionally, the over-hyped media and intelligence frenzy was revealed to have been yet another case of sour grapes and/or fake news fomented by the losers in the Democrat party and what appears to be rogue elements of the intelligence community. The good news is that Mr. Trump, once inaugurated on January 20, will be able to remove such rogue elements via his appointees to the CIA, FBI and other agencies. The bad news is that the sore loser Democrats and their media whores will remain, and they will likely continue to harass and object every effort Trump makes to "make America great again."

While almost nobody can reasonably oppose efforts to improve conditions for Americans, the Democrats will couch their objections in the most mealy-mouthed manners, with references to diversity, unfairness and vague commentaries on power and elitism.

Fortunately, the investor class has ignored most of the political squabbling and has moved on to increasing its wealth, with stocks up tremendously since election day. The bond markets have expressed acceptance of the Fed's minuscule rate hike of last week and have stabilized. Everything seems in place for a nice, year-end Santa Claus rally which will take the Dow Jones Industrial Average over the mythical 20,000 plateau.

The question to be asked at this juncture is, will the markets remain ebullient and bubbly into the New Year? With stocks hovering at or near all-time highs, and the bull run which began in 2009 extending into a ninth year, the answer should be obvious. Markets do not work one way (up) and corrections and bear markets often occur at what seems to be the most inopportune moments. With investor sentiment bullish to the extreme, the probability of a major correction in the first quarter of 2017 should be quite high, unless one adheres to the well-founded theory that the Fed has backstopped equity markets for years and will continue to do so. Doing otherwise, so the conventional wisdom tells, would be catastrophic, as though fair and open markets are inherently evil.

They are not, and it may be nigh on the eve of major changes in fiscal and monetary policy. On the fiscal side, Mr. Trump - a businessman with many years experience in all matters financial - the message is clear: he will do what it takes to get America on a path to prosperity for all levels of income, not just the crony capitalists and heavily financialized major corporations, but for individuals up and down the income ladder.

As for the Fed, one's guess is as good as another, but the genii inside the Fed seem intent on raising interest rates gradually in order to keep the US economy from overheating. As usual, they will be late to the party, but perhaps they can salve their damaged egos by reducing their bloated balance sheet in 2017 and leaving the number of interest rate hikes below three, ending the year around one percent, which, while traditionally absurdly low, would count as a major accomplishment since the Great Financial Crisis of the recent past.

Geopolitical events may overtake the Fed's view, however, as Japan and the Eurozone are well upon the road to financial ruin, and a crisis in either market (plus China) may cause extreme disruption to an orderly return to what is commonly referred to as "normalization."

A new administration hell-bent on returning America to greatness and leveling the playing field in international trade set against a backdrop of unelected financial and political operatives worldwide should make for an interesting, exciting, volatile year ahead.

As 2016 winds down, 2017 should present unique and various opportunities in all markets, requiring astute evaluation of not just balance sheets and P/E ratios, but insight into the political influence which has been and will continue to be exerted upon trade and commerce, globally.

At the Close: 12/19/2016
Dow: 19,883.06, +39.65 (0.20%)
NASDAQ: 5,457.44, +20.28 (0.37%)
S&P 500: 2,262.53, +4.46 (0.20%)
NYSE Composite: 11,128.54, +3.32 (0.03%)

Market Week In Review: December 10-16, 2016; Stocks Moribund, Silver Slammed, Oil, Banks Up

Highlighted by Wednesday's (Dec. 14) FOMC rate policy announcement, the week as a whole saw its fair share of ups and downs, mostly confined to intra-day movement, but eventually ending mildly positive, at least for stocks.

The Dow recorded a pair of all-time closing highs on Monday and Tuesday, but failed to reach for the stars after the Fed announced a 0.25% hike in the federal funds rate, the first in exactly one year. The move from 0.25-0.50 to 0.50-0.75 triggered a sharp sell-off in Wednesday afternoon trading, though stocks recovered nicely on Thursday and ended flat on Friday.

If the week was uneventful for stocks, it was not the same for commodities, particularly silver and gold, or for the US dollar, which reached nearly-unprecedented highs over 102.20 on the Bloomberg dollar index. As the dollar gained, the precious metals were slammed, gold losing over $30 top to bottom, but eventually leveling off at $1134.60 at Friday's finish, a loss of just $26 from the rate announcement. Silver took a much harder hit, dropping in price on the COMEX from $17.10 an ounce on Wednesday to end the week about a buck lower, at $16.07, a six percent loss.

Following OPEC's announced production cuts for 2017, crude spiked over $55 per ounce, but retreated during the week, still ahead somewhat at 53.03 as the week's trading closed out. Despite the strong dollar - supposedly a brake on oil prices - oil managed to ramp up to the highest price in three years.

Financials and industrials led the way for US stocks, not surprisingly continuing the Dow rally spurred forward by notables Goldman Sachs, 3M, Boeing, and General Electric. The Dow Industrial Average being the only major index to finish in the green for the week, markets continue to show strength in only the largest of large caps while smaller stocks are only being nibbled upon and, in the main, sold. The fracturing of markets into large leaders and small losers cannot bode well for the continuation of any meaningful rally going forward.

Naturally, with the Fed hiking rates, if only modestly, Treasuries were sold, but mainly on the short-duration issues. The five-year note broke through the mythical 2.00% threshold this week (2.05%), while the 10-year popped briefly above 2.60%, clinging close to that level as markets went dark for the weekend (2.57%). A flattening yield curve was evident as the 30-year bond remained steady, at 3.16%, pushing down the spread between fives and thirties to a unitary 1.11%.

All of this came against a backdrop of national news media hyping futile and largely-baseless claims by the US intelligence community that Russia hacked the 2016 presidential election, somehow making Vladimir Putin responsible for the election of Donald J. Trump (who will be formally elected by the Electoral College on Monday) and the demise of Hillary Clinton, the choice of the much-discredited leftist status quo.

The folly of the intelligence claims was completely ignored by Wall Street, and rightly so. The last thing investors need is a fresh injection of political skullduggery, after slogging through nearly two years of endless campaign rhetoric from all sides.

With a week left before Christmas, retailers have yet to ring bells of any kind, neither of alarm or of joyous peals f profit. The Christmas shopping experience over the past decade has morphed from mad dashes on Black Friday to a controlled button-pushing event on computers nationwide, as the internet has revolutionized the retail buying experience and forever changed the shopping mall landscape and holiday experience.

With two weeks remaining in 2016, it's likely that markets will respond to calmer views going forward though a sharp Santa Claus rally, taking the Dow beyond 20,000, is a distinct possibility over the final ten trading days of the year.

At The Close: Friday, December 16
Dow: 19,848.60, -3.64 (-0.02%)
NASDAQ: 5,437.29, -19.56 (-0.36%)
S&P 500: 2,258.20, -3.83 (-0.17%)
NYSE Composite: 11,122.44, -9.46 (-0.08%)

For the Week:
Dow: +86.65 (0.44%)
NASDAQ: -7.34 (-0.13%)
S&P 500: -1.46 (-0.06%)
NYSE Composite: -66.57 (-0.59%)

Fed Post-Mortem: Stocks Pop, Stop; China Bonds Crash; Silver Hits Target

After posting a duo of sentiments Wednesday, outlining the Money Daily "trade of the year," events escalated quickly following the Fed's federal funds interest rate hike of 0.25%.

Overnight, China treasury bonds crashed and trading in key futures were halted in an unprecedented move. Panicked investors sent yields soaring, the 10-year bond hitting a 16-month high of 3.4%. Elsewhere around the globe, the bond rout continued as yields spiked, reflecting the potential the Fed laid on the table for rising rates through 2020.

US stocks gained on the day, though the closing prices were less than half of what was achieved at midday.

As predicted, the silver price was clubbed like a baby seal, dropping to a high-15 handle early in the day and never recovering. Whether the move in silver (and gold) can be stemmed short term, it's likely that pricing will remain moribund unless further events occur to derail the massive spike in the US dollar.

The inverse relationship between the dollar and all commodities is especially pronounced in volatile silver. The Money Daily call to "buy at any price under $16/ounce has already been achieved, but indications are that it could continue as low as $14.75 the ounce.

Hang tight through tomorrow and the weekend, as Friday is a quad-witching day for options and futures expiry.

At the Close:
Dow: 19,852.24, +59.71 (0.30%)
NASDAQ: 5,456.85, +20.18 (0.37%)
S&P 500: 2,262.03, +8.75 (0.39%)
NYSE Composite: 11,131.85, +33.18 (0.30%)

Fed Hikes Fed Funds Rate 0.25%, Everything Gets Mashed In Panic Attack

You name it, stocks, bonds, oil, gold, silver, real estate, it all got smashed down pretty well after Janet Yellen and her central bank buddies decided to hike the federal funds rate by 1/4 point, from the unreasonably low figure of 0.25-0.50% to the nearly unreasonable low point of 0.50-0.75.

The only saving grace on the day was the dollar, which strengthened against almost every other currency, the dollar index quoting at 102.24 just after 4:00 pm ET.

While the FOMC move was well-telegraphed and supposedly baked into the markets, stocks still took a nosedive after the 2:00 pm announcement by the Fed. Though it's not much in terms of a rate hike and even less significant since he rate is still at historically low levels under one percent (absurd), perhaps driving the sell-off was the idea that the Fed predicted three rate hikes in 2017, which would ostensibly bring the federal funds rate to an area above one percent by this time next year. Three hikes would put the base rate at 1.25-1.50%. Optimistic, aren't they?

That's a doubtful prediction, however, as the Fed has continually over-promised and under-delivered when it comes to returning the US economy and interest rates to normalcy.

As pointed out in the previous post, the play of the day would have to be in silver and possibly gold, depending on how well-heeled and aristocratic one believes one to be. But not just yet. Wise traders will wait until the dust from this little market spasm settles and the new year selling begins on January 3rd (Yep, New Year's Day is on a Sunday, so Monday, January 2nd is a holiday. See, Trump's already making the country great again by giving everybody an extra day off).

Silver already dropped 30 cents per ounce since the FOMC announcement. Gold took a twenty dollar whacking, from $1160 to $1140. King Midas and the gold bugs are salivating! If there's one thing one can count on in this market is the pair trade on the downside. If stocks are going down, precious metals are going to get hammered, if for no good reason whatsoever. That's what happens when you trade as many contracts in a month as there is gold in the world. It's a fake, controlled, manipulated market, but, it has been steady if not profitable in recent years, once one learns the ins, outs, cheaters, liars and innuendos of playing with REAL MONEY.

Stay tuned to Money Daily as the trade of the year takes place. The few days or weeks wait will be well worth it.

Closing prices, Wednesday, December 14:
Dow: 19,792.53, -118.68 (-0.60%)
NASDAQ: 5,436.67, -27.16 (-0.50%)
S&P 500: 2,253.28, -18.44 (-0.81%)
NYSE Composite: 11,099.21, -137.96 (-1.23%)

Pre-FOMC Forecast: Stocks Steady, Sell Bonds, Buy Silver And Gold

There's an interesting set-up to today's expected FOMC 25 basis point (0.25%) hike in the federal funds rate.

The Yen has collapsed 19% in the last few months, the $USD is now at a 13-year high and stocks are at one of their most overbought levels in 100 years.

If that last statement about stocks being wildly overvalued doesn't give one pause, consider the situation the last time the Fed raised interest rates. It was a year ago, last December. On the day of the rate increase, December 16, the Dow Industrial Average closed at 17,749.09. The index dipped and dodged for two weeks, re-rallying back to close at 17,720.98, December 29, never quite getting back to previous highs.

But, when the new year dawned, the floodgates opened as sellers emerged from the shadows, many of them likely taking advantage of tax rules on profitable trades, mostly allowing those profits from 2015 to float tax-free until April of 2017 (the future) if sold in 2016. Tricky, allowable, rational and fully legal was this tactic which in effect dropped the Dow by a shade over 11 percent to a closing quote of 15,766.74 on January 20.

That was officially correction territory, and, while the rest of the trading community was wondering if this was going to be a 2008 redux, the Fed and its central banking brethren quietly began undermining market fundamentals (again, surprise!) by surreptitiously buying equities through proxies, particularly, the Bank of Japan, notorious for market meddling in everything from auto parts to currencies to yes, Virginia, stocks.

As it turned out, the trade was a worthwhile one for those central banking and insider trading folks. The Dow is now hurtling headlong towards 20,000, so, depending on which stocks the proxies were buying, they may have profited upwards of 25%.

Is the market rigged, or is it ready to face the awful reality of a federal funds rate at 0.50-0.75% The horror! One is amazed at not only the audacity of the central banking cartel, but also its awesome good fortune on all matters regarding their (your) money.

Getting back to the set-up from last year, the yen was down only 10% from September through December of 2015, about half of its decline this year. Can history repeat, and with even better results? That's one heck of a bet, if one is so inclined. For the rest of us, it looks like sitting on the sidelines for the rest of 2016 might turn out to be a profitable move.

It's of dubious probability that stocks are going to stage any kind of dramatic rally, so, what's the play, and when.

It's not often that Money Daily offers specific investment advice, but, taking a gander at what's happened to gold and silver the past few months (gold dropping from above $1300 to below $1160 and silver dipping from near $20 per ounce to around $17 currently), the opportunity is available to not necessarily make a killing, but to preserve some wealth in precious metals, you know, those things that have been considered money for thousands of years, gold and silver.

Being that Money Daily is more of a silver surfer than a gold bug, the recommendation is for silver at any price below $16.00. The market will not likely tolerate downside below $14.50, and the potential is there for a fabulous move upside, without the prerequisite dip.

So, here's the scenario. Stocks will remain steady or turn upwards for the remainder of December. After all, what's Christmas without a Santa Claus rally? Remember, stocks are wildly overpriced and overdue for some corrective medicine. The dollar should get a good, hard beating, but it probably won't because other major economies are in much worse shape.

It gets more complicated, because a strong dollar makes US goods more expensive overseas, and, if our newly-elected president has his way, imports are going to be heavily taxed, and soon. A trade war is likely to erupt by mid-2017.

Bond yields should benefit from rising interest rates, whereas gold and silver should see further price deterioration.

The wild cards are many, but the obvious one is inflation. If the Fed continues resolutely on course to foment inflation above two percent (impossible, say some, though the PPI came in today with a surprising gain of 0.4% for November, at the same time industrial production dipped 0.4% and capacity utilization also fell, to a six-month low of 75.0%.

While the majority of mainstream idiot economists pay scant attention to the latter two data points, CEOs and real economists take these numbers seriously. How is there going to be inflation when industrial production is slowing or stagnant and utilization is only 75% when the norm for growing economies is closer to 85%? Yet, there it is, with producer prices advancing at an annualized rate of 4.8%. Tomorrow's release of CPI for November will be the final nail in the coffin of controlled destruction economics engineered by the Fed and foreign central bank proxies.

Sorry if there's hardly anything positive in this report, but the era of central bank meddling, manipulating and needling intervention is in need of departure. They've managed to create an economy that benefits only those in the know, at the expense of taxpayers and citizens worldwide. It's like a giant plantation, with a healthy portion of worker paychecks - via taxes, fees, inflation and other theft - as the harvest.

You're being fattened and groomed for the slaughter or shearing, in a world which allows most to gain marginally but not substantially. Those without an escape hatch like a side business or secret gold vault are victims of mediocrity, though most will never notice and hardly ever complain.

So, off we go to FOMC land, with the big announcement (that's sarcasm, friend) fewer than two hours away.

Reiterating the call for silver surfing, WAIT. It's difficult with silver at such bargain levels, but it's almost sure to go lower, especialy if it goes a little higher. The central bankers - who hate competition from other forms of money - simply won't have it, and, since they have complete control over the paper silver market, they'll crush the price. If silver spikes above $19, it's a missed opportunity, but, bonus, your holdings are now worth more of those teeny-weeny Federal Reserve Notes.

The best timing may be the week between Christmas and New Year's Day, when nobody is paying much attention, or within the first three weeks of January. After the inauguration on the 20th, it's possible that markets will experience some serious turmoil, so there may be more time available to stock up on the stuff that powers solar panels and is the best electrical conductor in the universe, besides being the money of gentlemen.

“Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves.”

-- Norm Franz in his book Money and Wealth in the New Millennium (2001).

More after the market close.