There are those in the financial hinterlands who believe that the latest bout of indigestion in equities is simply another round of petty games played by central bank elitists who continue to exert extreme control, especially at times when it seems a correction may be at hand.
There are others who believe that the entire eight years of QE-and-ZIRP-inspired gains have been the exclusive province of the central banks and that they are preparing to pull the proverbial rug out from under markets via interest rate hikes and a general cessation of currency creation.
Both parties may be right, insofar as the central banks have been the epicenter of all financial activity, surreptitiously aiding the money center banks and primary dealers closest to the Fed's largesse.
Thus, the declines on the NASDAQ - not just today, but for the past three weeks - are sending signals to smaller market participants and there has been the beginning of a realignment of asset allocations, from tech to cash, from consumer staples and cyclicals to dividend-payers and utilities.
The issue at present, as was the case in 2008-09 and most other major market corrections or reversals from bull to bear, is that nowhere is there a safe place to hide, though the usual standouts are cash, precious metals and treasuries. On the latter, the 10-year note continued its ascent, finishing the day at 2.37, a multi-month high. That's a notable move, signifying that money may be indeed becoming tighter, even though that is a relative term, heading north from a real rate approaching zero.
At this juncture, it's still too early to raise the alarm bells, though the heavily-leveraged may be getting margin calls in short order. The NAZ is closing in on a five percent decline from the June 9 high of 6341.70, currently at a level of -3.98%. The even one percent loss on the NASDAQ today was followed in close order by the other major indices.
Caution is advised. Do NOT buy this dip as there are far too many worrying factors in the mix.
At the Close, 7/6/17:
Dow: 21,320.04, -158.13 (-0.74%)
NASDAQ: 6,089.46, -61.39 (-1.00%)
S&P 500: 2,409.75, -22.79 (-0.94%)
NYSE Composite: 11,702.42, -107.07 (-0.91%)
Thursday, July 6, 2017
Stocks Split, NASDAQ Gains, Dow Flat
There is a definite surreal feel to stocks these early days of summer. While the NASDAQ has generally been the whipping boy through the latter stages of June and into July, the reverse was true on Wednesday as traders returned from a truncated long weekend.
The NASDAQ tacked on 40 points, but the other broad measure, the NYSE Composite, fell 26. The Dow was off by one point, while the S&P added three-and-a-half.
While this appears to be sector rotation and stock picking, the unruly movements may portend something more sinister in the near future. It could be nothing, but split decisions on the major indices usually indicate market turmoil, not the calm, placid environment with low VIX which has been a feature of the long bull run since March of 2009.
The VIX has been elevated of late and spiked recently, but hovering around the 11-12 region is nothing alarming. Should the VIX begin to rise day-over-day, worries may emerge and turn reluctant buyers into outright sellers.
Whatever the financial pundits insist about the strength of the economy, there are troubles, as indicated by the FOMC minutes from June which were released on Wednesday. The members were split over inflation and increases in the federal funds rate, a strong indication that the Fed - which has been relied upon excessively to control the economy - may not have the tools with which to battle a recessionary environment, which many believe is overdue.
In any case, this shortened week may not be enough to develop any kind of trend, other than extending the weird trading patterns which are becoming more and more confounding to fundamental analysts.
At the Close, 7/5/17:
Dow: 21,478.17, -1.10 (-0.01%)
NASDAQ: 6,150.86, +40.80 (0.67%)
S&P 500: 2,432.54, +3.53 (0.15%)
NYSE Composite: 11,809.49, -26.23 (-0.22%)
The NASDAQ tacked on 40 points, but the other broad measure, the NYSE Composite, fell 26. The Dow was off by one point, while the S&P added three-and-a-half.
While this appears to be sector rotation and stock picking, the unruly movements may portend something more sinister in the near future. It could be nothing, but split decisions on the major indices usually indicate market turmoil, not the calm, placid environment with low VIX which has been a feature of the long bull run since March of 2009.
The VIX has been elevated of late and spiked recently, but hovering around the 11-12 region is nothing alarming. Should the VIX begin to rise day-over-day, worries may emerge and turn reluctant buyers into outright sellers.
Whatever the financial pundits insist about the strength of the economy, there are troubles, as indicated by the FOMC minutes from June which were released on Wednesday. The members were split over inflation and increases in the federal funds rate, a strong indication that the Fed - which has been relied upon excessively to control the economy - may not have the tools with which to battle a recessionary environment, which many believe is overdue.
In any case, this shortened week may not be enough to develop any kind of trend, other than extending the weird trading patterns which are becoming more and more confounding to fundamental analysts.
At the Close, 7/5/17:
Dow: 21,478.17, -1.10 (-0.01%)
NASDAQ: 6,150.86, +40.80 (0.67%)
S&P 500: 2,432.54, +3.53 (0.15%)
NYSE Composite: 11,809.49, -26.23 (-0.22%)
Wednesday, July 5, 2017
NASDAQ Continues Short-Term Slide; Bond Yields Soar
Happy Independence Day!
While plenty of Americans were celebrating the founding of their nation, drinking cold ones and grilling hot ones, the elitist scum that wants to control everybody's lives couldn't take the hint - and a four-day weekend - returning to the trading desks Monday for another round of Sell That Tech Stock.
The major indices were all rising, with the notable exception of the NASDAQ, upon which the most speculative stocks are traded, closing down just shy of 1/2 percent on the day.
Closing below its 50-day moving average for the third straight session, the NASDAQ is exhibiting a unitary weakness, unshared by its cohorts. The last time the NASDAQ made such a breach was at the very end of December, 2016. Six months have passed since the end-of-year scare, so it is notable, but the index is only down 3.66% since the 6341.70 top on June 9.
The selling seems to not be abating any time soon. The NASDAQ has closed lower 11 of the last 17 sessions, inclusive of the June 9 FAANG debacle.
Obviously, a multi-day decline of less than four percent is alarming to almost nobody, though closer analysis does give one reason to pause and possibly for many to liquidate out of high-multiple, overpriced equities into the safety of dividend-paying plays such as those readily found on the Dow or within the higher echelons of the S&P.
Divergence of the NASDAQ from its close peers bears notice, as has been mentioned here at Money Daily on a number of occasions over the past few weeks. Since it is easily the most bloated of the indices, it is most vulnerable to sprees of selling, or, as may be the case, cyclical rotation.
With that in mind, it may be amusing to some that the Dow posted an all-time intra-day high on Monday, but closed below the record closing high, though that mark may be surpassed on Wednesday, with traders flush with renewed animal spirits.
Otherwise, the eight-year-old bull market seems to be running on fumes, badly in need of something other than fresh fiat from central banks, which has been the primary fuel for the record rise over the long span.
Also worthy of notice is the continued sell-off in the 10-year note, sending yields as high as 2.35. The condition has prevailed since just after the latest interest rate hike on June 14, putting the federal funds rate at a multi-year high of 1.00-1.25%. It's also a marvel that the FOMC of the Fed has changed the game somewhat, targeting the rate in a range rather than offering a solid number. It gives the fakery some wiggle room, though bond brokers seem to be reacting as the Fed would wish, even though rising rates in a declining economy - of which the signs of are lurking everywhere - is a classic misalignment.
Hang on, diversify, or get off. Those are the current choices, though for specs, the last of those choices seems to currently be the most favored plan.
At the Close, 7/3/17:
Dow: 21,479.27, +129.64 (0.61%)
NASDAQ: 6,110.06, -30.36 (-0.49%)
S&P 500: 2,429.01, +5.60 (0.23%)
NYSE Composite: 11,835.72, +74.02 (0.63%)
While plenty of Americans were celebrating the founding of their nation, drinking cold ones and grilling hot ones, the elitist scum that wants to control everybody's lives couldn't take the hint - and a four-day weekend - returning to the trading desks Monday for another round of Sell That Tech Stock.
The major indices were all rising, with the notable exception of the NASDAQ, upon which the most speculative stocks are traded, closing down just shy of 1/2 percent on the day.
Closing below its 50-day moving average for the third straight session, the NASDAQ is exhibiting a unitary weakness, unshared by its cohorts. The last time the NASDAQ made such a breach was at the very end of December, 2016. Six months have passed since the end-of-year scare, so it is notable, but the index is only down 3.66% since the 6341.70 top on June 9.
The selling seems to not be abating any time soon. The NASDAQ has closed lower 11 of the last 17 sessions, inclusive of the June 9 FAANG debacle.
Obviously, a multi-day decline of less than four percent is alarming to almost nobody, though closer analysis does give one reason to pause and possibly for many to liquidate out of high-multiple, overpriced equities into the safety of dividend-paying plays such as those readily found on the Dow or within the higher echelons of the S&P.
Divergence of the NASDAQ from its close peers bears notice, as has been mentioned here at Money Daily on a number of occasions over the past few weeks. Since it is easily the most bloated of the indices, it is most vulnerable to sprees of selling, or, as may be the case, cyclical rotation.
With that in mind, it may be amusing to some that the Dow posted an all-time intra-day high on Monday, but closed below the record closing high, though that mark may be surpassed on Wednesday, with traders flush with renewed animal spirits.
Otherwise, the eight-year-old bull market seems to be running on fumes, badly in need of something other than fresh fiat from central banks, which has been the primary fuel for the record rise over the long span.
Also worthy of notice is the continued sell-off in the 10-year note, sending yields as high as 2.35. The condition has prevailed since just after the latest interest rate hike on June 14, putting the federal funds rate at a multi-year high of 1.00-1.25%. It's also a marvel that the FOMC of the Fed has changed the game somewhat, targeting the rate in a range rather than offering a solid number. It gives the fakery some wiggle room, though bond brokers seem to be reacting as the Fed would wish, even though rising rates in a declining economy - of which the signs of are lurking everywhere - is a classic misalignment.
Hang on, diversify, or get off. Those are the current choices, though for specs, the last of those choices seems to currently be the most favored plan.
At the Close, 7/3/17:
Dow: 21,479.27, +129.64 (0.61%)
NASDAQ: 6,110.06, -30.36 (-0.49%)
S&P 500: 2,429.01, +5.60 (0.23%)
NYSE Composite: 11,835.72, +74.02 (0.63%)
Saturday, July 1, 2017
Maine, Connecticut, Illinois, New Jersey Run Out of Time and Money
Stocks managed to end the week, and the month, without a complete and total collapse, with the Dow actually posting a substantial gain.
However, a Friday turned to Saturday and June to July, at least four states have failed to pass budgets, facing enormous deficits, the worst of the bunch being Illinois, currently with $15 billion in overdue payments backlogged.
In New Jersey and Maine, state governments went into shutdown mode, while Connecticut governor Dannel Malloy took over control of the state's spending after the legislature failed to pass a budget on time.p
In New Jersey, state parks and other public areas were closed on Saturday, sending a painful message to citizens of government overreach on a four-day Independence Day weekend supposedly celebrating freedom.
Illinois was dealt another crushing blow when US District Court Judge Joan Lefkow ruled that the state must begin making larger payments to Medicare providers that are owed billions of dollars.
These developments have been years in the making, from bloated statehouses, county, and city offices which overpay employees, offer golden medical and pension packages that the citizenry pays for in the form of higher taxes, and promotes schools that provide delicious salaries benefits for teachers while providing substandard education to forced-enrolled students.
Cops and firefighters collecting $100,000+ pensions are not unusual in any of these states, and the pensions and medical benefits of government employees overall have caused fiscal crises that could have - and should have - been handled years ago. None of this comes as a surprise, but the outcomes will be different from state to state. Some may plead to the federal government for a bailout of sorts, with the implied proviso that they will give up some of their sovereignty in the process.
Others may choose to raise taxes, implement austerity measures, but eventually, all of them will have to default on over-generous pension promises made to prior government employees. Many will also have to cut pay to current employees, which will prompt reactions from the public service unions, which should be outlawed under federal law, and eventually, if there is any sanity remaining in government at all, will be.
Enjoy what there is of your Independence Day weekend, but bear in mind, the United States of America has reached a turning point, a breaking point. States are reeling from decades of uncontrolled spending and liberal policies and the taxpayers are fleeing or simply giving up.
The policies of overspending which began in Washington, DC, and has trickled down to the states have bled the nation dry and hard choices are already at hand. Whether or not the politicians can muster the courage to make the needed changes - a dubious prospect at best - the American people must respond with vigor.
At the Close, 6/30/17:
Dow: 21,349.63, +62.60 (0.29%)
NASDAQ: 6,140.42, -3.93 (-0.06%)
S&P 500: 2,423.41, +3.71 (0.15%)
NYSE Composite: 11,761.70, +21.72 (0.18%)
However, a Friday turned to Saturday and June to July, at least four states have failed to pass budgets, facing enormous deficits, the worst of the bunch being Illinois, currently with $15 billion in overdue payments backlogged.
In New Jersey and Maine, state governments went into shutdown mode, while Connecticut governor Dannel Malloy took over control of the state's spending after the legislature failed to pass a budget on time.p
In New Jersey, state parks and other public areas were closed on Saturday, sending a painful message to citizens of government overreach on a four-day Independence Day weekend supposedly celebrating freedom.
These developments have been years in the making, from bloated statehouses, county, and city offices which overpay employees, offer golden medical and pension packages that the citizenry pays for in the form of higher taxes, and promotes schools that provide delicious salaries benefits for teachers while providing substandard education to forced-enrolled students.
Cops and firefighters collecting $100,000+ pensions are not unusual in any of these states, and the pensions and medical benefits of government employees overall have caused fiscal crises that could have - and should have - been handled years ago. None of this comes as a surprise, but the outcomes will be different from state to state. Some may plead to the federal government for a bailout of sorts, with the implied proviso that they will give up some of their sovereignty in the process.
Others may choose to raise taxes, implement austerity measures, but eventually, all of them will have to default on over-generous pension promises made to prior government employees. Many will also have to cut pay to current employees, which will prompt reactions from the public service unions, which should be outlawed under federal law, and eventually, if there is any sanity remaining in government at all, will be.
Enjoy what there is of your Independence Day weekend, but bear in mind, the United States of America has reached a turning point, a breaking point. States are reeling from decades of uncontrolled spending and liberal policies and the taxpayers are fleeing or simply giving up.
The policies of overspending which began in Washington, DC, and has trickled down to the states have bled the nation dry and hard choices are already at hand. Whether or not the politicians can muster the courage to make the needed changes - a dubious prospect at best - the American people must respond with vigor.
At the Close, 6/30/17:
Dow: 21,349.63, +62.60 (0.29%)
NASDAQ: 6,140.42, -3.93 (-0.06%)
S&P 500: 2,423.41, +3.71 (0.15%)
NYSE Composite: 11,761.70, +21.72 (0.18%)
Thursday, June 29, 2017
Which Way is Up? Stocks Battered Again; VIX, Bond Yields Exploding
Volatility is back, to the chagrin of equity investors who have enjoyed the easiest ride to Easy Street possibly in the history of the US stock market.
The VIX, a broad measure of market volatility, spiked today as high as 15.16, a huge move, considering the close on Wednesday was 10.03. That's better than a 50% move to the top, though the slaughter was interrupted and canceled midday, when it appeared the world was ending. No doubt, the PPT another central bank cohorts rushed to the aid of everybody in quelling the panic, sending the VIX back to 11.44 at the end of the session.
The Vix halting helped the major indices to some degree, though it could not stem the selling. The Dow melted down as low as 21,203, a full 250 points from the close on Wednesday. The NASDAQ was again hit full force, bottoming out at 6090, before receiving somewhat to close with a mere 90-point loss.
With the Federal Reserve's loose policy unchecked for eight years running, stock picking has been easier than throwing darts at a barn door. Despite the easy money, most hedge fund and money managers have failed to keep pace with simple indices, a shameful state of affairs for the people who are supposed to know what they're doing when it comes to investing. Now, as everything from the presidency to health care to the media and the future of the global economy is being questioned, the bifurcated reasoning of ultra-low interest rates and gambling recklessly in equities is beginning to lose some favor.
All of this came as the government reported, prior to the opening bell, first quarter GDP at a surprising 1.4% growth rate. This was the third estimate, after the first - back in April - came in at 0.7, and the second, in May, was better, at 1.2, were still below an acceptable range. Apparently, nobody is particularly interested in an economy that is growing at less than two percent, and maybe even less interested in the government's goal-seeking statistical chicanery.
It seems, from all appearances, that the Federal Reserve is being taken seriously about rising rates, if one agrees that bonds tell the real story. The rally in the 10-year note has been shunted, with yields spiking the past few days, opening at nearly 2.30%. The note closed at 2.267, a gain of better than two percent, a large move in treasuries.
Tech stocks were the usual suspects, as the FAANGs took the heat. Facebook, Apple, Amazon, Netflix, and Google all suffered losses on heavy volume.
So, is this the beginning of the end of the bull market?
Maybe. Maybe not. Nobody really would know, though there are those of the opinion that the market is vastly overextended and the core economy is under-performing and facing severe deflationary pressure.
What to watch now are the movie averages. The Dow is still gleefully above its 50-day moving average, but the NASDAQ closed precisely on its 50-day, as is the S&P. Further weakness could send sell signals and a plummet through the 50-day toward the 200-day.
Also to keep in mind is the rough guideline for correction territory, which is casually assumed to be a 10% decline.
The NASDAQ topped out at 6341.70, nearly three weeks ago. A quick look at a NASDAQ chart reveals the collapse on Friday, June 9, exactly three weeks ago as of tomorrow, as if somebody rang a bell, denoting the tippy-top of the market. A level of 5707 would have to be met for the NAZ to fall 10% and it is the most vulnerable index, having had the best run-up over the past three months.
Not that it would be a huge move, though significant in percentage terms, but it would erase gains all the way back to February 9, so just five months of lost appreciation.
Friday closes out not only the week, but the month and the quarter, so it should be instructive from a technical standpoint, if that actually matters any more.
Bull markets do not last forever, no matter how low interest rates are nor how easy money is to lend.
At the Close, 6/29/17:
Dow: 21,287.03, -167.58 (-0.78%)
NASDAQ Composite: 6,144.35, -90.06 (-1.44%)
S&P 500: 2,419.70, -20.99 (-0.86%)
NYSE Composite: 11,739.98, -72.82 (-0.62%)
The VIX, a broad measure of market volatility, spiked today as high as 15.16, a huge move, considering the close on Wednesday was 10.03. That's better than a 50% move to the top, though the slaughter was interrupted and canceled midday, when it appeared the world was ending. No doubt, the PPT another central bank cohorts rushed to the aid of everybody in quelling the panic, sending the VIX back to 11.44 at the end of the session.
The Vix halting helped the major indices to some degree, though it could not stem the selling. The Dow melted down as low as 21,203, a full 250 points from the close on Wednesday. The NASDAQ was again hit full force, bottoming out at 6090, before receiving somewhat to close with a mere 90-point loss.
With the Federal Reserve's loose policy unchecked for eight years running, stock picking has been easier than throwing darts at a barn door. Despite the easy money, most hedge fund and money managers have failed to keep pace with simple indices, a shameful state of affairs for the people who are supposed to know what they're doing when it comes to investing. Now, as everything from the presidency to health care to the media and the future of the global economy is being questioned, the bifurcated reasoning of ultra-low interest rates and gambling recklessly in equities is beginning to lose some favor.
All of this came as the government reported, prior to the opening bell, first quarter GDP at a surprising 1.4% growth rate. This was the third estimate, after the first - back in April - came in at 0.7, and the second, in May, was better, at 1.2, were still below an acceptable range. Apparently, nobody is particularly interested in an economy that is growing at less than two percent, and maybe even less interested in the government's goal-seeking statistical chicanery.
It seems, from all appearances, that the Federal Reserve is being taken seriously about rising rates, if one agrees that bonds tell the real story. The rally in the 10-year note has been shunted, with yields spiking the past few days, opening at nearly 2.30%. The note closed at 2.267, a gain of better than two percent, a large move in treasuries.
Tech stocks were the usual suspects, as the FAANGs took the heat. Facebook, Apple, Amazon, Netflix, and Google all suffered losses on heavy volume.
So, is this the beginning of the end of the bull market?
Maybe. Maybe not. Nobody really would know, though there are those of the opinion that the market is vastly overextended and the core economy is under-performing and facing severe deflationary pressure.
What to watch now are the movie averages. The Dow is still gleefully above its 50-day moving average, but the NASDAQ closed precisely on its 50-day, as is the S&P. Further weakness could send sell signals and a plummet through the 50-day toward the 200-day.
Also to keep in mind is the rough guideline for correction territory, which is casually assumed to be a 10% decline.
The NASDAQ topped out at 6341.70, nearly three weeks ago. A quick look at a NASDAQ chart reveals the collapse on Friday, June 9, exactly three weeks ago as of tomorrow, as if somebody rang a bell, denoting the tippy-top of the market. A level of 5707 would have to be met for the NAZ to fall 10% and it is the most vulnerable index, having had the best run-up over the past three months.
Not that it would be a huge move, though significant in percentage terms, but it would erase gains all the way back to February 9, so just five months of lost appreciation.
Friday closes out not only the week, but the month and the quarter, so it should be instructive from a technical standpoint, if that actually matters any more.
Bull markets do not last forever, no matter how low interest rates are nor how easy money is to lend.
At the Close, 6/29/17:
Dow: 21,287.03, -167.58 (-0.78%)
NASDAQ Composite: 6,144.35, -90.06 (-1.44%)
S&P 500: 2,419.70, -20.99 (-0.86%)
NYSE Composite: 11,739.98, -72.82 (-0.62%)
Wednesday, June 28, 2017
Central Banks Exert Control By Boosting Prices Day After Huge Declines
As mentioned in the opener of yesterday's post, forget about trying to apply fundamentals to this market. It is hopelessly rigged.
A commentator on a message board elsewhere explained the phenomenon of yesterday's jawboning-inspired selloff aptly. To wit: it's a charade by the central bankers to provide an easier entry point for which to make even more money boosting overpriced stocks.
Ergo, today's whipsaw. If the reader has half a brain, no further explanation is necessary.
There will be no crash until deemed useful for the central bankers in charge of the stock market.
Cynical? Yes. On the mark? Likely.
At the Close, 6/28/17:
Dow: 21,454.61, +143.95 (0.68%)
NASDAQ: 6,234.41, +87.79 (1.43%)
S&P 500 2,440.69, +21.31 (0.88%)
NYSE Composite: 11,812.80, +95.88 (0.82%)
A commentator on a message board elsewhere explained the phenomenon of yesterday's jawboning-inspired selloff aptly. To wit: it's a charade by the central bankers to provide an easier entry point for which to make even more money boosting overpriced stocks.
Ergo, today's whipsaw. If the reader has half a brain, no further explanation is necessary.
There will be no crash until deemed useful for the central bankers in charge of the stock market.
Cynical? Yes. On the mark? Likely.
At the Close, 6/28/17:
Dow: 21,454.61, +143.95 (0.68%)
NASDAQ: 6,234.41, +87.79 (1.43%)
S&P 500 2,440.69, +21.31 (0.88%)
NYSE Composite: 11,812.80, +95.88 (0.82%)
Tuesday, June 27, 2017
Fake News, Fake Markets, Fake Money: Big Losses As Central Bankers Talk Tightening
Good luck to anyone trying to do fundamental analysis in this market.
Jawboning by Fed officials and today, especially, the grand liar of Europe, Mario Draghi, led the assault on spec stocks and the market in general by threatening to take away the low interest rate punchbowl.
Draghi's comments came at an economic conference in Portugal, ECB President Mario Draghi said that as economic prospects improve in Europe, the ECB could make adjustments to its policies of sub-zero interest rates coupled with huge bond purchases.
As if that wasn't enough, a trio of Federal Reserve loudmouths set their jaws to yapping about asset values, cueing a collapse in the equity and bond markets.
Fed Chair, Janet Yellen, Vice-chair Stanley Fischer, and San Francisco Fed President John Williams all focused on high equity valuations in speeches at separate locales.
Thus, market participants wet their pants on the awful prospect that their enormous gains would somehow evaporate if the accommodative policies of the Federal Reserve were to be unwound. Of course, they're right. Almost all of the gains of the past eight years have been the result of loose monetary policy. Any tightening of such policies would mean that stocks might not be so easily gushed to higher levels.
Bond yield rose substantially, with the 10-year-note gaining to 2.19%, erasing all of June's gains.
Not that any of today's loose lip talking matters. Actions will determine the ultimate direction of the markets. While some degree of sanity and honest price discovery in markets would no doubt involve a lower rate of return than what's been considered normal since 2009, it also might result in crisis, as all manner of wealth is tied to stocks and their continued appreciation.
At the Close, 6/27/17:
Dow: 21,310.66, -98.89 (-0.46%)
NASDAQ: 6,146.62, -100.53 (-1.61%)
S&P 500 2,419.38, -19.69 (-0.81%)
NYSE Composite: 11,716.92, -41.94 (-0.36%)
Jawboning by Fed officials and today, especially, the grand liar of Europe, Mario Draghi, led the assault on spec stocks and the market in general by threatening to take away the low interest rate punchbowl.
Draghi's comments came at an economic conference in Portugal, ECB President Mario Draghi said that as economic prospects improve in Europe, the ECB could make adjustments to its policies of sub-zero interest rates coupled with huge bond purchases.
As if that wasn't enough, a trio of Federal Reserve loudmouths set their jaws to yapping about asset values, cueing a collapse in the equity and bond markets.
Fed Chair, Janet Yellen, Vice-chair Stanley Fischer, and San Francisco Fed President John Williams all focused on high equity valuations in speeches at separate locales.
Thus, market participants wet their pants on the awful prospect that their enormous gains would somehow evaporate if the accommodative policies of the Federal Reserve were to be unwound. Of course, they're right. Almost all of the gains of the past eight years have been the result of loose monetary policy. Any tightening of such policies would mean that stocks might not be so easily gushed to higher levels.
Bond yield rose substantially, with the 10-year-note gaining to 2.19%, erasing all of June's gains.
Not that any of today's loose lip talking matters. Actions will determine the ultimate direction of the markets. While some degree of sanity and honest price discovery in markets would no doubt involve a lower rate of return than what's been considered normal since 2009, it also might result in crisis, as all manner of wealth is tied to stocks and their continued appreciation.
At the Close, 6/27/17:
Dow: 21,310.66, -98.89 (-0.46%)
NASDAQ: 6,146.62, -100.53 (-1.61%)
S&P 500 2,419.38, -19.69 (-0.81%)
NYSE Composite: 11,716.92, -41.94 (-0.36%)
Monday, June 26, 2017
Target Zero: NASDAQ Unlucky in Lift-Off Sell-Off (Pump and Dump)
It wasn't a very pretty day for the moneychangers traders of paper stocks.
Nor was it particularly pleasing for goldbugs to see the precious metals smashed down around 4:00 am ET, but, then again, when it comes to gold manipulation, it's best to do it when most people are sleeping.
Theses manipulated markets are nearing the end of their central bank lifelines, though it is difficult to comprehend how the Fed, ECB, SNB, BOJ and others would pull the proverbial rug out all at the same time.
Therefore, a crash probably isn't in the cards, unless one is playing the political angle. In that scenario, we have the media and Democrats losing their war against President Donald J. Trump, who continues to steamroll over the Washington insider elite as though they ceased to matter after January 20th of this year.
In some ways, the Donald is right. Washington insiders and the mainstream media don't matter in the grand scheme of things, most of which revolves around MONEY.
Regarding that, stocks ramped pre-market, then sold off throughout the session. Oil finished flat. Gold and silver were hammered, as mentioned above, in a pre-dawn raid of the phony futures market, but mostly recovered. The major equity indices finished flat on the main, except for the NASDAQ, which took on some water.
Macro data had US durable goods orders down 1.1% in May after a 0.9% loss in April. That, in part, spurred the sell-off after lift-off in stocks.
Stocks are certainly being kept afloat by central banks and crony commercial banks. There's nothing even remotely normal about how stocks have been behaving since the great recession off 2008-09, but just in case anybody asks, the spread on treasuries - 2s and 30s - tumbled again to 134bps - marking the flattest treasury yield curve since late 2007.
Recession is overdue, which means the US economy is probably already in one. Pension holders and 401k dreamers will be the last ones to know.
At The Close, 6/26/17:
Dow: 21,409.55, +14.79 (0.07%)
NASDAQ 6,247.15, -18.10 (-0.29%)
S&P 500 2,439.07, +0.77 (0.03%)
NYSE Composite: 11,758.86, +25.66 (0.22%)
Nor was it particularly pleasing for goldbugs to see the precious metals smashed down around 4:00 am ET, but, then again, when it comes to gold manipulation, it's best to do it when most people are sleeping.
Theses manipulated markets are nearing the end of their central bank lifelines, though it is difficult to comprehend how the Fed, ECB, SNB, BOJ and others would pull the proverbial rug out all at the same time.
Therefore, a crash probably isn't in the cards, unless one is playing the political angle. In that scenario, we have the media and Democrats losing their war against President Donald J. Trump, who continues to steamroll over the Washington insider elite as though they ceased to matter after January 20th of this year.
In some ways, the Donald is right. Washington insiders and the mainstream media don't matter in the grand scheme of things, most of which revolves around MONEY.
Regarding that, stocks ramped pre-market, then sold off throughout the session. Oil finished flat. Gold and silver were hammered, as mentioned above, in a pre-dawn raid of the phony futures market, but mostly recovered. The major equity indices finished flat on the main, except for the NASDAQ, which took on some water.
Macro data had US durable goods orders down 1.1% in May after a 0.9% loss in April. That, in part, spurred the sell-off after lift-off in stocks.
Stocks are certainly being kept afloat by central banks and crony commercial banks. There's nothing even remotely normal about how stocks have been behaving since the great recession off 2008-09, but just in case anybody asks, the spread on treasuries - 2s and 30s - tumbled again to 134bps - marking the flattest treasury yield curve since late 2007.
Recession is overdue, which means the US economy is probably already in one. Pension holders and 401k dreamers will be the last ones to know.
At The Close, 6/26/17:
Dow: 21,409.55, +14.79 (0.07%)
NASDAQ 6,247.15, -18.10 (-0.29%)
S&P 500 2,439.07, +0.77 (0.03%)
NYSE Composite: 11,758.86, +25.66 (0.22%)
Sunday, June 25, 2017
The Long and Short of the Approaching Recession (Depression)
For those out there reading this short missive, a warning that time and space are constraints upon the lives we live, the bread we bake, the food we eat, the products we produce, the jobs that sustain us and the government that pretends to cater to us.
Time and space - according to most adherents of pure physics - are not constraints upon thinking, thought, creativity and imagination.
Indulgence should be given more, in these days of financial peril and social inequality, to solutions derived in the mind, translated to the body by practicality and functionality.
In both the long and short discussions of current finance, there can be little doubt that the system of capitalism by which the developed world has grown and prospered is under severe strain and the solutions offered by the central bankers and government entities who pretend to know how it all works are nothing more than stop-gap measures intended solely to prevent, or at least, delay, a complete collapse of a fragile, human-made system.
Economics, being mostly theoretical, and therefore, unbound, unfortunately needs to operate in a closed, bound, system, restrained by those old devils of time and space. As has been frequently mentioned in higher-level economic discussions, "infinite growth is unsustainable in a finite world."
With that in mind, this weekend edition of Money Daily offers but a brief insight into the unraveling of the world order of finance already well underway.
On the whole, Friday was a washout to a week in which the major indices - with the notable exception of the NASDAQ - vacillated around the unchanged line. In the current nomenclature, stock indices - wherein the vast bulk of trading is performed by computer algorithms and central banks - are a control mechanism. So long as they are stable or going higher, the general population feels comforted and won't look around for cracks in the not-so-golden facade of global finance. As such, this week was very much like the previous six, or eight, or eighty. It was, in general terms, a big nothing-burger.
But, what does the outsize gain on the NASDAQ tell us, when the other indices were going exactly nowhere fast?
It says that the NASDAQ is where the speculation exists, where all the funny money or phony money is going to seek yield, mostly in tech-land, but also in energy stocks and in short-squeezes on the most-shorted list. It's how the game is being played at the top. If shorts are numerous on a particular equity, that where the money flow will be most pronounced, on the long side. Boom! Instant profits and a great weekend in the Hamptons awaits.
For the rest of us, we are placated with the rest of the market going sideways. At least - we comfort ourselves in saying - it didn't go down, much.
An expanded view looks at a couple of issues. Oil took another beating this week as the glut continues, though this fact is not to be promulgated to the general population. We are led to believe that oil is scarce and the price of gas with which to fill our cars should remain at elevated levels.
Nothing could be further from the truth. A variety of factors, including, but not limited to, better fuel consumption, an aging population, alternative energy sources, stagnant or slowing employment, and a more stay-at-home, economically-depressed middle America, is leading to the reality of oversupply meeting slack or declining demand. Oil will continue to fall until it becomes apparent that the big energy companies are squeezing every last nickel and dime out of consumers in the form of stubbornly high gas prices. At some point, the price of gasoline will merit a meeting with reality and then, gas will average, nationally, under $2.00 a gallon, notwithstanding the absurdly-high state and federal taxes on each and every gallon pumped. It's coming. It cannot be denied.
Overseas, the demise of two Italian banks on Friday was, typically, underreported. Banca Popolare di Vicenza and Veneto Banca, with combined assets of roughly 60 billion euros, were green-lighted by the ECB on Friday for liquidation. In other words, these banks are belly-up, bankrupt, kaput!
The Wall Street Journal, Reuters, Bloomberg, the AP, all reported the story. The mainstream media, such as ABC, NBC, CBS, CNN, et. al., i.e, the fake news propagandists, did not.
There you have it. The general public will not be told the truth about the fraility of the banking system for fears people would recall the horrors of the GFC of 2008-09.
Two Italian banks failing may not make the radar of disinterest parties such as the 98% of Americans who don't pay attention to nor understand economics or finance. Neither did the closure of two Bear Stearns funds back in the Spring of 2008. You are now forewarned and forearmed, with knowledge.
The world'd financial system is unwinding and the pace is quickening. Disruptions are already apparent in the forms of capital controls - mostly overseas, but heading to US shores soon - supply chain disorder, falling tax receipts, social unrest, and, most importantly and glaringly obvious, income disparity.
Stay informed, not from the mainstream sources, but from outside. The internet is s treasure trove of information that you're not supposed to know about. It will help you form opinions and strategies by which you can deal with the coming hard times.
Your thoughts and ideas have no limits. Time and space cannot prevent you from thinking, strategizing and planning for your won welfare.
At the Close, 6/23/17:
Dow: 21,394.76, -2.53 (-0.01%)
NASDAQ: 6,265.25, +28.56 (0.46%)
S&P 500: 2,438.30, +3.80 (0.16%)
NYSE Composite: 11,733.20, +20.68 (0.18%)
For the Week:
Dow: +10.48 (0.05%)
NASDAQ: +113.49 (1.84%)
S&P 500: +5.15 (0.21%)
NYSE Composite: -38.83 (-0.33%)
Time and space - according to most adherents of pure physics - are not constraints upon thinking, thought, creativity and imagination.
Indulgence should be given more, in these days of financial peril and social inequality, to solutions derived in the mind, translated to the body by practicality and functionality.
In both the long and short discussions of current finance, there can be little doubt that the system of capitalism by which the developed world has grown and prospered is under severe strain and the solutions offered by the central bankers and government entities who pretend to know how it all works are nothing more than stop-gap measures intended solely to prevent, or at least, delay, a complete collapse of a fragile, human-made system.
Economics, being mostly theoretical, and therefore, unbound, unfortunately needs to operate in a closed, bound, system, restrained by those old devils of time and space. As has been frequently mentioned in higher-level economic discussions, "infinite growth is unsustainable in a finite world."
With that in mind, this weekend edition of Money Daily offers but a brief insight into the unraveling of the world order of finance already well underway.
On the whole, Friday was a washout to a week in which the major indices - with the notable exception of the NASDAQ - vacillated around the unchanged line. In the current nomenclature, stock indices - wherein the vast bulk of trading is performed by computer algorithms and central banks - are a control mechanism. So long as they are stable or going higher, the general population feels comforted and won't look around for cracks in the not-so-golden facade of global finance. As such, this week was very much like the previous six, or eight, or eighty. It was, in general terms, a big nothing-burger.
But, what does the outsize gain on the NASDAQ tell us, when the other indices were going exactly nowhere fast?
It says that the NASDAQ is where the speculation exists, where all the funny money or phony money is going to seek yield, mostly in tech-land, but also in energy stocks and in short-squeezes on the most-shorted list. It's how the game is being played at the top. If shorts are numerous on a particular equity, that where the money flow will be most pronounced, on the long side. Boom! Instant profits and a great weekend in the Hamptons awaits.
For the rest of us, we are placated with the rest of the market going sideways. At least - we comfort ourselves in saying - it didn't go down, much.
An expanded view looks at a couple of issues. Oil took another beating this week as the glut continues, though this fact is not to be promulgated to the general population. We are led to believe that oil is scarce and the price of gas with which to fill our cars should remain at elevated levels.
Nothing could be further from the truth. A variety of factors, including, but not limited to, better fuel consumption, an aging population, alternative energy sources, stagnant or slowing employment, and a more stay-at-home, economically-depressed middle America, is leading to the reality of oversupply meeting slack or declining demand. Oil will continue to fall until it becomes apparent that the big energy companies are squeezing every last nickel and dime out of consumers in the form of stubbornly high gas prices. At some point, the price of gasoline will merit a meeting with reality and then, gas will average, nationally, under $2.00 a gallon, notwithstanding the absurdly-high state and federal taxes on each and every gallon pumped. It's coming. It cannot be denied.
Overseas, the demise of two Italian banks on Friday was, typically, underreported. Banca Popolare di Vicenza and Veneto Banca, with combined assets of roughly 60 billion euros, were green-lighted by the ECB on Friday for liquidation. In other words, these banks are belly-up, bankrupt, kaput!
The Wall Street Journal, Reuters, Bloomberg, the AP, all reported the story. The mainstream media, such as ABC, NBC, CBS, CNN, et. al., i.e, the fake news propagandists, did not.
There you have it. The general public will not be told the truth about the fraility of the banking system for fears people would recall the horrors of the GFC of 2008-09.
Two Italian banks failing may not make the radar of disinterest parties such as the 98% of Americans who don't pay attention to nor understand economics or finance. Neither did the closure of two Bear Stearns funds back in the Spring of 2008. You are now forewarned and forearmed, with knowledge.
The world'd financial system is unwinding and the pace is quickening. Disruptions are already apparent in the forms of capital controls - mostly overseas, but heading to US shores soon - supply chain disorder, falling tax receipts, social unrest, and, most importantly and glaringly obvious, income disparity.
Stay informed, not from the mainstream sources, but from outside. The internet is s treasure trove of information that you're not supposed to know about. It will help you form opinions and strategies by which you can deal with the coming hard times.
Your thoughts and ideas have no limits. Time and space cannot prevent you from thinking, strategizing and planning for your won welfare.
At the Close, 6/23/17:
Dow: 21,394.76, -2.53 (-0.01%)
NASDAQ: 6,265.25, +28.56 (0.46%)
S&P 500: 2,438.30, +3.80 (0.16%)
NYSE Composite: 11,733.20, +20.68 (0.18%)
For the Week:
Dow: +10.48 (0.05%)
NASDAQ: +113.49 (1.84%)
S&P 500: +5.15 (0.21%)
NYSE Composite: -38.83 (-0.33%)
Friday, June 23, 2017
Mixed Stocks Ahead Of Quad-Witching; Fed Gearing Toward Recession
For the second straight session, stocks closed mixed, with the Dow and S&P finishing in the red while the NASDAQ and NYSE Composite registered marginal gains.
Essentially, markets were flat as the trudge through June continues.
As the week draws to a close, Friday looks to be a troublesome day, owing largely to options expiration and the fact that with the exception of the Dow, the major indices are right back where they began the month.
This condition - known as quadruple witching - may result in increased volatility, and, with prices flat, many stock options and futures may close without redemption, i.e., losses.
Quad witching is the simultaneous expiration of options and futures tied to individual stocks and stock indexes occurring on the last month of each quarter.
While the name may sound frightening, it often is not, especially when stocks are gaining, which, over the past eight years, has been more often than not. This quarter may prove a hurdle too high, sending stocks screaming lower.
Psychologically, losing money on a Friday sends traders home to unhappy weekends with thoughts of carnage fresh in their minds, so Monday's trading may prove more prescient in terms of market direction.
Meanwhile, bonds are telling. The 10-year note slipped to 2.15 on Thursday, with the 30-year bond holding steady at 2.72. The curve has continued to flatten, and that could actually be due to the Fed's tightening. With the overnight federal funds rate at 1.00-1.25 - the highest in nearly a decade - the Fed may be - inadvertently or otherwise - prompting the US economy into a recession.
GDP growth continues to flag and employment is stagnant. Raising rates during a period of slow to no growth makes sense only to Federal Reserve governors or others who bear no consequences for their actions.
Friday's action in the markets deserves close attention.
At the Close, 6/22/17:
Dow: 21,397.29, -12.74 (-0.06%)
NASDAQ 6,236.69, +2.73 (0.04%)
S&P 500 2,434.50, -1.11 (-0.05%)
NYSE Composite: 11,712.52, +16.24 (0.14%)
Essentially, markets were flat as the trudge through June continues.
As the week draws to a close, Friday looks to be a troublesome day, owing largely to options expiration and the fact that with the exception of the Dow, the major indices are right back where they began the month.
This condition - known as quadruple witching - may result in increased volatility, and, with prices flat, many stock options and futures may close without redemption, i.e., losses.
Quad witching is the simultaneous expiration of options and futures tied to individual stocks and stock indexes occurring on the last month of each quarter.
While the name may sound frightening, it often is not, especially when stocks are gaining, which, over the past eight years, has been more often than not. This quarter may prove a hurdle too high, sending stocks screaming lower.
Psychologically, losing money on a Friday sends traders home to unhappy weekends with thoughts of carnage fresh in their minds, so Monday's trading may prove more prescient in terms of market direction.
Meanwhile, bonds are telling. The 10-year note slipped to 2.15 on Thursday, with the 30-year bond holding steady at 2.72. The curve has continued to flatten, and that could actually be due to the Fed's tightening. With the overnight federal funds rate at 1.00-1.25 - the highest in nearly a decade - the Fed may be - inadvertently or otherwise - prompting the US economy into a recession.
GDP growth continues to flag and employment is stagnant. Raising rates during a period of slow to no growth makes sense only to Federal Reserve governors or others who bear no consequences for their actions.
Friday's action in the markets deserves close attention.
At the Close, 6/22/17:
Dow: 21,397.29, -12.74 (-0.06%)
NASDAQ 6,236.69, +2.73 (0.04%)
S&P 500 2,434.50, -1.11 (-0.05%)
NYSE Composite: 11,712.52, +16.24 (0.14%)
Thursday, June 22, 2017
Broken Markets Yield Strange Results
How does it happen that all the major indices closed lower on Wednesday, but the NASDAQ finished with a gain of nearly three-quarters of a percent, up 45 points on the day?
Algorithms gone wild, that's how.
With the computers cranked up to stuff speculative stocks with ever-high bids, the NASDAQ has been outperforming the other indices over the past year, but especially so in 2017. Over the past 12 months, the NAZ is up nearly 30%, the Dow gained by 21% and the S&P 18%.
In the past three months, the NASDAQ has improved by 7.59%, while the Dow is up a mere 3.58%, the S&P 500 up 3.92%. That substantial edge has begun slipping however, as the NASDAQ took a major hit on the 8th of June. Prior to that massive outflow, the index was up 9.10% since March 22.
Apparently, that was not to the liking of the speculative sorts populating the concrete canyons of lower Manhattan. That's how results such as Wednesday's occur. Given that computers do more than 60% of all trading, it's not a stretch to believe that certain goal-seeking altos could be cranked up by human hands behind the scenes and the screens.
Markets have been broken by computer-driven trading, lack of oversight by the SEC and meddling by central bankers and the Federal Reserve. With the Swiss National Bank (SNB), Bank of Japan (BOJ), and European Central Bank (ECB) all active purchasers of stocks (not sellers), such meddling behavior is bound to cause distortions such as seen on Wednesday and in a myriad of other sessions, issues, and especially in ETFs.
Stocks may be at or near all-time highs, but caution is urged in such a speculative, managed market. A misstep or fat finger could cause any manner of disorder.
At the Close, 6/21/17:
Dow: 21,410.03, -57.11 (-0.27%)
NASDAQ: 6,233.95, +45.92 (0.74%)
S&P 500: 2,435.61, -1.42 (-0.06%)
NYSE Composite: 11,696.28, -42.67 (-0.36%)
Algorithms gone wild, that's how.
With the computers cranked up to stuff speculative stocks with ever-high bids, the NASDAQ has been outperforming the other indices over the past year, but especially so in 2017. Over the past 12 months, the NAZ is up nearly 30%, the Dow gained by 21% and the S&P 18%.
In the past three months, the NASDAQ has improved by 7.59%, while the Dow is up a mere 3.58%, the S&P 500 up 3.92%. That substantial edge has begun slipping however, as the NASDAQ took a major hit on the 8th of June. Prior to that massive outflow, the index was up 9.10% since March 22.
Apparently, that was not to the liking of the speculative sorts populating the concrete canyons of lower Manhattan. That's how results such as Wednesday's occur. Given that computers do more than 60% of all trading, it's not a stretch to believe that certain goal-seeking altos could be cranked up by human hands behind the scenes and the screens.
Markets have been broken by computer-driven trading, lack of oversight by the SEC and meddling by central bankers and the Federal Reserve. With the Swiss National Bank (SNB), Bank of Japan (BOJ), and European Central Bank (ECB) all active purchasers of stocks (not sellers), such meddling behavior is bound to cause distortions such as seen on Wednesday and in a myriad of other sessions, issues, and especially in ETFs.
Stocks may be at or near all-time highs, but caution is urged in such a speculative, managed market. A misstep or fat finger could cause any manner of disorder.
At the Close, 6/21/17:
Dow: 21,410.03, -57.11 (-0.27%)
NASDAQ: 6,233.95, +45.92 (0.74%)
S&P 500: 2,435.61, -1.42 (-0.06%)
NYSE Composite: 11,696.28, -42.67 (-0.36%)
Tuesday, June 20, 2017
Stocks May Be Near Peak; Fed Plans Going Up in Flames
It's been a troublesome two weeks for stock jockeys. Even as the Dow and S&P have rocketed to new highs, the shakeout on the NASDAQ last Friday may have been a harbinger of things to come and the die came up snake-eyes on Tuesday as all of the major indices took losses which accelerated into the closing bell.
On the surface, everything seems to be going according to plan. The Fed continues to lie to themselves - and everybody else - that the solvency trap of the GFC of 2007-09 has been permanently put in the rear view mirror and the future offers nothing less than roses and unicorns, otherwise termed "normalcy." Real people know better. While the official unemployment figures approach fantasy levels of sub-four percent, those in and out of the workforce haven't had sustained economic prosperity since prior to 2000. Wages have been absolutely stagnant for the better part of 20 years, not only in the United States, but in established economies around the world.
Since debt had reached unsustainable (read: unpayable) levels during the housing crisis period, all the central bank could do was double down with easy money to banks and connected investors and financiers via QE and ZIRP while the bulk of the population got dosed with 22% interest rates on credit cards, ballooning college tuition costs and, the ultimate teaser, cheap credit on new car loans and leases.
Well, the carousel is slowing to a stop as the world demographic ages not-so-gracefully into their 50s, 60s and 70s, an age at which one does less of everything, including driving, eating, buying, spending, racking up credit card debt and buying bigger houses. This simple fact is probably not lost on the central bankers, but, being mired into last-century Keynesian economic theories and practices, there's little they could do except what they did last week, a desperate attempt to buy more time via higher federal funds rates, a plan that allows a small comfort zone to ease into the next recession, which seems to be gathering momentum daily.
Stocks have never told the entire story of a nation's economy and they won't this time either. While the power elite jiggle their algos to capture the little gains that remain, real estate prices have peaked and are heading lower in many locales, gold, silver, and especially, oil are displaying tendencies one would normally associate with a deflationary economy, which, actually is what has been the experience for much of the past eight years.
Tech stocks have outperformed and rightfully so, but what tech has proven to do time and again is lower costs and prices via efficiencies of scale and market. This time is no different, the recent acquisition of Whole Foods by internet giant, Amazon, offers yet another chilling reminder that the past is pretense and the future will be won by the fastest and most agile companies, individuals and, yes, governments.
The Federal reserve and their crony central bankers across the globe have painted themselves - and everyone else - into a no-win situation, thinking that inflation equals salvation, when, in fact, it is nothing more than gloss. Making matters even more untenable is the idea that the Fed has been trying to induce inflation for the past eight years, without success. They've pumped trillions into the global economy with nil effect because the two things most important to free, functioning markets - price discovery and an honest discounting mechanism - have been missing due to their constant fiddling and control fraud.
Thus, the world approaches another financial Waterloo, more serious than the last, as global credit creation has stalled with growth being nothing more today than amalgamated numbers which are fictitious in the main. The overhang of government debt, pension shortfalls and corporate insouciance have created the perfect scenario for calamity.
If the Fed, ECB, BOJ and other central banks are in search of drama, this summer is likely to be a grand provider of entertainment for all. With stocks overvalued close to the point of absurdity, the assets to be hoarded - if one is in a position to exit the Wall Street casino - are real estate, currencies, gold, silver, tools and machinery.
Since June 9, the NASDAQ has closed negatively six of eight sessions. The Fed finalized their rate hike on the 14th after weeks, if not months, of telegraphing their move. The weakness in the NASDAQ is not a coincidence, but rather, a distinct message from the market.
At The Close, 6/19/17:
Dow: 21,467.14, -61.85 (-0.29%)
NASDAQ: 6,188.03, -50.98 (-0.82%)
S&P 500 2,437.03, -16.43 (-0.67%)
NYSE Composite: 11,738.95, -94.39 (-0.80%)
On the surface, everything seems to be going according to plan. The Fed continues to lie to themselves - and everybody else - that the solvency trap of the GFC of 2007-09 has been permanently put in the rear view mirror and the future offers nothing less than roses and unicorns, otherwise termed "normalcy." Real people know better. While the official unemployment figures approach fantasy levels of sub-four percent, those in and out of the workforce haven't had sustained economic prosperity since prior to 2000. Wages have been absolutely stagnant for the better part of 20 years, not only in the United States, but in established economies around the world.
Since debt had reached unsustainable (read: unpayable) levels during the housing crisis period, all the central bank could do was double down with easy money to banks and connected investors and financiers via QE and ZIRP while the bulk of the population got dosed with 22% interest rates on credit cards, ballooning college tuition costs and, the ultimate teaser, cheap credit on new car loans and leases.
Well, the carousel is slowing to a stop as the world demographic ages not-so-gracefully into their 50s, 60s and 70s, an age at which one does less of everything, including driving, eating, buying, spending, racking up credit card debt and buying bigger houses. This simple fact is probably not lost on the central bankers, but, being mired into last-century Keynesian economic theories and practices, there's little they could do except what they did last week, a desperate attempt to buy more time via higher federal funds rates, a plan that allows a small comfort zone to ease into the next recession, which seems to be gathering momentum daily.
Stocks have never told the entire story of a nation's economy and they won't this time either. While the power elite jiggle their algos to capture the little gains that remain, real estate prices have peaked and are heading lower in many locales, gold, silver, and especially, oil are displaying tendencies one would normally associate with a deflationary economy, which, actually is what has been the experience for much of the past eight years.
Tech stocks have outperformed and rightfully so, but what tech has proven to do time and again is lower costs and prices via efficiencies of scale and market. This time is no different, the recent acquisition of Whole Foods by internet giant, Amazon, offers yet another chilling reminder that the past is pretense and the future will be won by the fastest and most agile companies, individuals and, yes, governments.
The Federal reserve and their crony central bankers across the globe have painted themselves - and everyone else - into a no-win situation, thinking that inflation equals salvation, when, in fact, it is nothing more than gloss. Making matters even more untenable is the idea that the Fed has been trying to induce inflation for the past eight years, without success. They've pumped trillions into the global economy with nil effect because the two things most important to free, functioning markets - price discovery and an honest discounting mechanism - have been missing due to their constant fiddling and control fraud.
Thus, the world approaches another financial Waterloo, more serious than the last, as global credit creation has stalled with growth being nothing more today than amalgamated numbers which are fictitious in the main. The overhang of government debt, pension shortfalls and corporate insouciance have created the perfect scenario for calamity.
If the Fed, ECB, BOJ and other central banks are in search of drama, this summer is likely to be a grand provider of entertainment for all. With stocks overvalued close to the point of absurdity, the assets to be hoarded - if one is in a position to exit the Wall Street casino - are real estate, currencies, gold, silver, tools and machinery.
Since June 9, the NASDAQ has closed negatively six of eight sessions. The Fed finalized their rate hike on the 14th after weeks, if not months, of telegraphing their move. The weakness in the NASDAQ is not a coincidence, but rather, a distinct message from the market.
At The Close, 6/19/17:
Dow: 21,467.14, -61.85 (-0.29%)
NASDAQ: 6,188.03, -50.98 (-0.82%)
S&P 500 2,437.03, -16.43 (-0.67%)
NYSE Composite: 11,738.95, -94.39 (-0.80%)
Dow Sets New Record; NASDAQ Rebounds
Well, it's Monday, so stocks have to go up. It's some kind of rule.
There's no need for any comment on this. It's just part of the current theme.
At the Close, 6/19/17:
Dow: 21,528.99, +144.71 (0.68%)
NASDAQ 6,239.01, +87.25 (1.42%)
S&P 500: 2,453.46, +20.31 (0.83%)
NYSE Composite: 11,833.34, +61.32 (0.52%)
There's no need for any comment on this. It's just part of the current theme.
At the Close, 6/19/17:
Dow: 21,528.99, +144.71 (0.68%)
NASDAQ 6,239.01, +87.25 (1.42%)
S&P 500: 2,453.46, +20.31 (0.83%)
NYSE Composite: 11,833.34, +61.32 (0.52%)
Monday, June 19, 2017
Stocks End Week Mixed, But Damage Has Been Done
While the Dow, S&P and NYSE Composite all gained slightly on the week, the NASDAQ, which ended lower Friday, registered its second straight week of losses.
The NASDAQ has finished in the red three straight sessions and five of the last six, beginning with last Friday's washout of the FAANG stocks (Facebook, Amazon, Apple, Netflix, Google, aka Alphabet).
While the NASDAQ may have hit a pocket of support for the time being, the intraday high of 6341.70 is now nearly 200 points off in the distance. Not that the venerable algos, computers and few human hands operating the machinery at the NAZ couldn't pull the index up and beyond that level in a matter of days, there still remains to be a reason for such a move.
With the calendar showing the middle of June, there may not be much in the way of stock-inspiring news until second quarter earnings begin being trotted out the second week of July. The Fed's rate hike is out of the way for now, and it's anticipated that the Fed won't make any significant moves until September at the earliest, and more likely December, if at all.
All markets remain bloated, just like government salary and benefit packages, while real Americans struggle to find and keep good jobs, pay bills and possibly save something for the future, be that retirement or college of kids.
The world's financial markets continue to be prodded and plotted by central bankers, which means there will be no abrupt collapse on their watch, or until they deem it advisable to crash the stock market by means of tight money or other policy initiatives.
Meanwhile, the NASDAQ bears watching, if anybody in the world still believes in technical analysis, because further weakness could portend a finish to the third longest bull run in market history, albeit with the lowest growth rate (2.0%). Those two historic marks are at opposition, and it will be interesting to see how long the fiat parade can continue without significant reckoning of reality.
At the Close, 6/16/17:
Dow: 21,384.28, +24.38 (0.11%)
NASDAQ: 6,151.76, -13.74 (-0.22%)
S&P 500: 2,433.15, +0.69 (0.03%)
NYSE Composite: 11,772.02, +31.50 (0.27%)
For the Week:
Dow: +112.31 (0.53%)
NASDAQ: -56.16 (0.90%)
S&P 500: +1.38 (0.06%)
NYSE Composite: +27.29 (0.23%)
The NASDAQ has finished in the red three straight sessions and five of the last six, beginning with last Friday's washout of the FAANG stocks (Facebook, Amazon, Apple, Netflix, Google, aka Alphabet).
While the NASDAQ may have hit a pocket of support for the time being, the intraday high of 6341.70 is now nearly 200 points off in the distance. Not that the venerable algos, computers and few human hands operating the machinery at the NAZ couldn't pull the index up and beyond that level in a matter of days, there still remains to be a reason for such a move.
With the calendar showing the middle of June, there may not be much in the way of stock-inspiring news until second quarter earnings begin being trotted out the second week of July. The Fed's rate hike is out of the way for now, and it's anticipated that the Fed won't make any significant moves until September at the earliest, and more likely December, if at all.
All markets remain bloated, just like government salary and benefit packages, while real Americans struggle to find and keep good jobs, pay bills and possibly save something for the future, be that retirement or college of kids.
The world's financial markets continue to be prodded and plotted by central bankers, which means there will be no abrupt collapse on their watch, or until they deem it advisable to crash the stock market by means of tight money or other policy initiatives.
Meanwhile, the NASDAQ bears watching, if anybody in the world still believes in technical analysis, because further weakness could portend a finish to the third longest bull run in market history, albeit with the lowest growth rate (2.0%). Those two historic marks are at opposition, and it will be interesting to see how long the fiat parade can continue without significant reckoning of reality.
At the Close, 6/16/17:
Dow: 21,384.28, +24.38 (0.11%)
NASDAQ: 6,151.76, -13.74 (-0.22%)
S&P 500: 2,433.15, +0.69 (0.03%)
NYSE Composite: 11,772.02, +31.50 (0.27%)
For the Week:
Dow: +112.31 (0.53%)
NASDAQ: -56.16 (0.90%)
S&P 500: +1.38 (0.06%)
NYSE Composite: +27.29 (0.23%)
Friday, June 16, 2017
Stocks Collapse, Regain on Thursday, Post-Rate Hike by Fed
All indices finished lower on Thursday and the declines continued into Friday morning with all the majors down shortly after the open.
The continuing weakness in stocks was exacerbated by the FOMC raising the federal funds rate 25 basis points, to 1.00-1.25%. This tiny move seems to be too much for market participants to bear, given that this is the third increase in the past seven months.
The Fed appears intent - for now - to hold rates at this level, but also mentioned - in its press release and news conference following the rate decision - that they would begin addressing the balance sheet of nearly $4.5 trillion, by rolling off up to $10 billion a month in Treasury, agency, and mortgage-backed securities, a plan that would take roughly 30 years to complete.
While the media hasn't even taken up a position on the Fed's plans because no on-air personality even understands what it means and only one percent - being generous - of the general population has any idea of what the Federal Reserve actually does.
In essence, the rape of the global economy by central banks will continue until either the system implodes or the entire planet is enslaved by money-changers.
That's all for now. Make sure to check back over the weekend for the Money Daily weekly wrap-up.
The continuing weakness in stocks was exacerbated by the FOMC raising the federal funds rate 25 basis points, to 1.00-1.25%. This tiny move seems to be too much for market participants to bear, given that this is the third increase in the past seven months.
The Fed appears intent - for now - to hold rates at this level, but also mentioned - in its press release and news conference following the rate decision - that they would begin addressing the balance sheet of nearly $4.5 trillion, by rolling off up to $10 billion a month in Treasury, agency, and mortgage-backed securities, a plan that would take roughly 30 years to complete.
While the media hasn't even taken up a position on the Fed's plans because no on-air personality even understands what it means and only one percent - being generous - of the general population has any idea of what the Federal Reserve actually does.
In essence, the rape of the global economy by central banks will continue until either the system implodes or the entire planet is enslaved by money-changers.
That's all for now. Make sure to check back over the weekend for the Money Daily weekly wrap-up.
Wednesday, June 14, 2017
Fed Raises Rates, Sets Out Asset Disposal Plan
As was widely anticipated, the FOMC of the Federal Reserve voted 8-1 to raise the federal funds overnight lending rate 25 basis points, from 0.75-1.00% to 100-1.25%. Minneapolis Fed President Neel Kashkari was the lone member to vote to leave the rate unchanged. The Fed also raised the prime rate - to which many credit cards, car and mortgage loans are indexed - by 1/4%. The prime - or Primary, in fed-speak - rate now stands at 1.75%.
While the move was telegraphed to the market well in advance, the Fed's decision to release some details of its plan to unwind its enormous balance sheet of over $4.5 trillion, came as something of a shock to investors, characterized by the sullen market reaction.
About the only assets that didn't go down following the Fed's release were Dow and the dollar, the DJIA saved by the usual antics of the altos or the PPT, with the traditional hockey stick save in the last half hour, which also lifted the S&P, the Comp., and NASDAQ from deeper losses.
The dollar index rallied from 96.36 - a seven-month low - earlier in the day, to close at 96.918, a closing loss of just 0.06%. As usual, precious metals were sold down the river in the heavily-rigged futures market. WTI crude oil closed in New York at 44.69, -1.77 (-3.81%). The price is a massive surprise, considering the "summer driving season" has begun. However, the glut of crude on world markets continues to depress prices. Consumers have not yet seen the result at the gas pump, where prices have been relatively stable, despite oil's recent fall from about $52 to the mid-40s.
As usual, the day following the Fed rate decision will offer more clarity on stock direction.
The Fed laid out plans to wind down its multi-trillion-dollar balance sheet, gradually reducing its holdings of Treasuries and agency securities, by decreasing the Fed’s reinvestment of principal payments. Payments will only be reinvested when they exceed preset and self-administered caps, which start out at $6 billion per month for Treasuries and $4 billion per month for agency and mortgage-backed securities.
Since the Fed sopped up literally trillions worth of garbage MBS and dodgy treasuries during the aftermath of the GFC, the effect of their balance sheet unwind will be an attempt to allow market normalization with the Fed out of the way. While this tactic has been the subject of great scrutiny, without a "buyer of last resort" such as the Federal Reserve, the concern is that interest rates will spiral out of control with inadequate buying interest depressing prices and thus, raising yields beyond reasonable levels.
At present, this has not occurred, In fact, the benchmark 10-year note was exceptionally depressed, closing at a yield of 2.138, but, the Fed hasn't actually begun its unwinding, only mentioned how they plan to achieve their goals.
In an addendum to its statement, the Fed stated,
According to the caps the Fed has just announced, it's going to be a long time before their balance sheet regains some semblance of normalcy. At a rate of $10 billion a month, the Fed will only be able to reduce the bloat by $120 billion a year. At that rate, getting their carried balance down to $2.5 billion would take roughly 20 years.
We can hardly wait.
At the Close, 6/14/17:
Dow: 21,374.56, +46.09 (0.22%)
NASDAQ: 6,194.89, -25.48 (-0.41%)
S&P 500: 2,437.92, -2.43 (-0.10%)
NYSE Composite: 11,779.81, -16.98 (-0.14%)
While the move was telegraphed to the market well in advance, the Fed's decision to release some details of its plan to unwind its enormous balance sheet of over $4.5 trillion, came as something of a shock to investors, characterized by the sullen market reaction.
About the only assets that didn't go down following the Fed's release were Dow and the dollar, the DJIA saved by the usual antics of the altos or the PPT, with the traditional hockey stick save in the last half hour, which also lifted the S&P, the Comp., and NASDAQ from deeper losses.
The dollar index rallied from 96.36 - a seven-month low - earlier in the day, to close at 96.918, a closing loss of just 0.06%. As usual, precious metals were sold down the river in the heavily-rigged futures market. WTI crude oil closed in New York at 44.69, -1.77 (-3.81%). The price is a massive surprise, considering the "summer driving season" has begun. However, the glut of crude on world markets continues to depress prices. Consumers have not yet seen the result at the gas pump, where prices have been relatively stable, despite oil's recent fall from about $52 to the mid-40s.
As usual, the day following the Fed rate decision will offer more clarity on stock direction.
The Fed laid out plans to wind down its multi-trillion-dollar balance sheet, gradually reducing its holdings of Treasuries and agency securities, by decreasing the Fed’s reinvestment of principal payments. Payments will only be reinvested when they exceed preset and self-administered caps, which start out at $6 billion per month for Treasuries and $4 billion per month for agency and mortgage-backed securities.
Since the Fed sopped up literally trillions worth of garbage MBS and dodgy treasuries during the aftermath of the GFC, the effect of their balance sheet unwind will be an attempt to allow market normalization with the Fed out of the way. While this tactic has been the subject of great scrutiny, without a "buyer of last resort" such as the Federal Reserve, the concern is that interest rates will spiral out of control with inadequate buying interest depressing prices and thus, raising yields beyond reasonable levels.
At present, this has not occurred, In fact, the benchmark 10-year note was exceptionally depressed, closing at a yield of 2.138, but, the Fed hasn't actually begun its unwinding, only mentioned how they plan to achieve their goals.
In an addendum to its statement, the Fed stated,
“The Committee currently anticipates reducing the quantity of supply of reserve balances, over time, to a level appreciably below that seen in recent years but larger than before the financial crisis; the level will reflect the banking system’s demand for reserve balances.”As the ultimate arbiter of rates and ostensibly in control of all things financial, the Fed is hopeful that the rest of the world will go along with their grand plan.
According to the caps the Fed has just announced, it's going to be a long time before their balance sheet regains some semblance of normalcy. At a rate of $10 billion a month, the Fed will only be able to reduce the bloat by $120 billion a year. At that rate, getting their carried balance down to $2.5 billion would take roughly 20 years.
We can hardly wait.
At the Close, 6/14/17:
Dow: 21,374.56, +46.09 (0.22%)
NASDAQ: 6,194.89, -25.48 (-0.41%)
S&P 500: 2,437.92, -2.43 (-0.10%)
NYSE Composite: 11,779.81, -16.98 (-0.14%)
Dow, S&P Close At Record Levels; FOMC Set to Raise Rates
Unfazed and unaffected by the recent tech dip, the 30 blue chips of the Dow Jones Industrial Average and the S&P 500 each set new closing highs on Tuesday.
Stocks rebounded sharply after the surprise declines in the FAANG stocks Friday and aftershocks felt around the world in foreign tech markets.
Record highs are nothing notable in this market as stocks have been the (OGIT) only game in town for investors seeking profit and percentage gains.
The FOMC began their two-day meeting Tuesday, and wrap up Wednesday, with a policy announcement expected at 2:00 pm ET. It is anticipated that the board of governors will raise interest rates, but note that it may be the last raise in some time. The Fed may not increase the federal funds rate again until December or beyond.
At The Close, 6/13/17:
Dow: 21,328.47, +92.80 (0.44%)
NASDAQ: 6,220.37, 44.90 (0.73%)
S&P 500: 2,440.35, +10.96 (0.45%)
NYSE Composite: 11,796.79, +50.33 (0.43%)
Stocks rebounded sharply after the surprise declines in the FAANG stocks Friday and aftershocks felt around the world in foreign tech markets.
Record highs are nothing notable in this market as stocks have been the (OGIT) only game in town for investors seeking profit and percentage gains.
The FOMC began their two-day meeting Tuesday, and wrap up Wednesday, with a policy announcement expected at 2:00 pm ET. It is anticipated that the board of governors will raise interest rates, but note that it may be the last raise in some time. The Fed may not increase the federal funds rate again until December or beyond.
At The Close, 6/13/17:
Dow: 21,328.47, +92.80 (0.44%)
NASDAQ: 6,220.37, 44.90 (0.73%)
S&P 500: 2,440.35, +10.96 (0.45%)
NYSE Composite: 11,796.79, +50.33 (0.43%)
Monday, June 12, 2017
Tech Wreck? Hardly. Stocks Shaky, But Steady Late Monday; Gold, Silver Slaughtered
Not to worry, the sky isn't falling... yet.
Tech stocks got bashed again, this time in foreign markets, after Friday's mini-meltdown, but cooler heads (or those more in control) late in the day, bringing the NASDAQ back to its best level of the day into the closing bell.
However, the S&P and Dow both suffered losses, albeit minor. What's interesting is that amid all the noise and clamor, gold and silver have been dashed, the selling merciless over the past week. This is the same pattern that developed at the onset of the GFC. As strange as it may seem, precious metals were liquidated before stocks, purportedly to make margin calls. Apparently, most of those in brokerage-land just think PMs are nothing more than hedges and fast cash in case of emergencies.
While that may be true, one wonders why such violent action in gold and especially in silver is occurring at this juncture. Sure, the FAANGs are overvalued and should be taken to the whipping post, but liquidation of PMs is a more serious business, though admittedly, quick.
If, indeed, margin calls have been making the rounds, there's little doubt that the PMs would get sold, and also no question that more trouble is on the horizon.
Tuesday and Wednesday are set for the FOMC policy meeting, so there may not be much in the way of wild swings until 2:00 pm ET on Wednesday, when the policy is set. There have been strong indications that the Fed will raise the federal funds rate by 25 basis points and this hissy fit in techno-land is unlikely to disrupt that.
The remainder of the week, after the FOMC meeting, should prove insightful for market participants. Continued weakness could signal significant trouble ahead and a serious turn of fortune for stockholders.
Stay tuned.
At the Close, 6/12/17:
Dow: 21,235.67, -36.30 (-0.17%)
NASDAQ: 6,175.46, -32.45 (-0.52%)
S&P 500 2,429.39, -2.38 (-0.10%)
NYSE Composite: 11,746.46, +1.73 (0.01%)
Tech stocks got bashed again, this time in foreign markets, after Friday's mini-meltdown, but cooler heads (or those more in control) late in the day, bringing the NASDAQ back to its best level of the day into the closing bell.
However, the S&P and Dow both suffered losses, albeit minor. What's interesting is that amid all the noise and clamor, gold and silver have been dashed, the selling merciless over the past week. This is the same pattern that developed at the onset of the GFC. As strange as it may seem, precious metals were liquidated before stocks, purportedly to make margin calls. Apparently, most of those in brokerage-land just think PMs are nothing more than hedges and fast cash in case of emergencies.
While that may be true, one wonders why such violent action in gold and especially in silver is occurring at this juncture. Sure, the FAANGs are overvalued and should be taken to the whipping post, but liquidation of PMs is a more serious business, though admittedly, quick.
If, indeed, margin calls have been making the rounds, there's little doubt that the PMs would get sold, and also no question that more trouble is on the horizon.
Tuesday and Wednesday are set for the FOMC policy meeting, so there may not be much in the way of wild swings until 2:00 pm ET on Wednesday, when the policy is set. There have been strong indications that the Fed will raise the federal funds rate by 25 basis points and this hissy fit in techno-land is unlikely to disrupt that.
The remainder of the week, after the FOMC meeting, should prove insightful for market participants. Continued weakness could signal significant trouble ahead and a serious turn of fortune for stockholders.
Stay tuned.
At the Close, 6/12/17:
Dow: 21,235.67, -36.30 (-0.17%)
NASDAQ: 6,175.46, -32.45 (-0.52%)
S&P 500 2,429.39, -2.38 (-0.10%)
NYSE Composite: 11,746.46, +1.73 (0.01%)
What Happened Friday? A Shaky Trend Is Developing
Strangely enough, the skyrocketing NASDAQ took a serve turn for the worse on Friday, dropping a massive 113 points at the same time the Dow was setting a new record with an 89-point gain and the NYSE Composite tacked on 65 points.
What drove the NASDAQ to its knees on Friday were the stocks known as FAANGs - Facebook, Apple, Amazon, Netflix, and Google - taking hits to their massively-overvalued share prices.
Here's the ugly reality
Facebook (FB) -5.11 (-3.30%); Apple (AAPL) -6.01 (-3.88%); Amazon (AMZN) -31.96 (-3.16%); Netflix (NFLX) -7.85 (-4.73%); Alphabet (parent of Google) (GOOG) -33.58 (-3.41%).
One-day, three-to-five-percent declines in any equity is usually a big deal. Having all of these institutionally-widely held stocks take a nosedive like that on a single day is a large, red, flashing warning sign that something is fundamentally wrong with the market, the economy, maybe even the world.
These shares weren't dumped all at once because somebody was taking profits. Volume was three times normal. Everybody was booking gains, and probably with good reason. The price/earning ratios for these tech darlings are unsustainable. Netflix leads the way with a P/E of 204, followed by Amazon, at 184, according to Yahoo Finance. Google seems modest by comparison, at 32. Facebook is 38, and Apple looks downright cheap with a P/E around 17.
So, only two of these stocks are wickedly overpriced, using standard metrics, but they all suffer some similar characteristics: They are all tech companies, based on the West coast, run by billionaire founders (excepting Apple, though Tim Cook was surely an heir apparent to Steve Jobs). The only other company that comes to mind with these characteristics is Microsoft (MSFT). The company founded by Bill Gates took a pretty good hit on Friday, down 1.63 (-2.27%).
Does this suggest that the "big one" is about to shake out the left coast, battering California from LA to San Jose with aftershocks up the coast to Seattle? And just how would anybody know that? OK, that theory falls into the category of tin-foil hat conspiracy theory, but, if Cali shakes, rattles and rolls someday soon, Money Daily will take credit for calling it (that's a joke, son).
Outside of Friday's tumult, general economic data has not been encouraging. First quarter GDP was 1.2% (second estimate), which is pretty close to stall speed. The US - and largely the global - economy has been anything but robust since the Great Financial Crisis (GFC) of 2008-09. Captains of finance at places like the World Bank, the Fed, ECB, and elsewhere have been touting "recovery" for eight years, wherein none, in fact, has occurred, unless one peers only at stock charts all day. While stocks have soared on easy money accommodation, he same cannot be said of Main Street's outlook. Retail stores are closing everywhere in America, small business has already been dumped into the trash bin of history, and new company creation has hit a 27-year low. Additionally, the Fed is hell-bent on raising rates for the second time this year when the FOMC meets on Tuesday and Wednesday of this week.
What's troubling about the fall of the FAANGs is that these companies have largely benefitted off the backs of consumers, monopolizing markets and cannibalizing profits to the C-suite executives. Now, the largest shareholders - pension, mutual, and hedge funds - may be taking their money elsewhere, either to cash, bonds, or, maybe just to more stolid, established, dividend-paying stocks. It's tough to know, groupthink among the elites being difficult to gauge or define.
Whatever the case, with the smallish losses on the Dow and S&P earlier in the week followed by a fallout in the most speculative stocks establishes a trend, which, for now, we can only identify as "shaky."
With most stocks and indices hovering near all-time highs, shaky is not a word one would normally associate with risk-taking. The time to run is when the avalanche is first seen at the top of the mountain, not when it barrels into the lodge.
At the Close, 6/9/17:
Dow: 21,271.97, +89.44 (0.42%)
NASDAQ 6,207.92, -113.85 (-1.80%)
S&P 500 2,431.77, -2.02 (-0.08%)
NYSE Composite: 11,744.73, +65.78 (0.56%)
For the Week:
Dow: +65.68 (0.31%)
NASDAQ: -97.88 (-1.55%)
S&P 500: -7.30 (-0.30%)
NYSE Composite: +26.03 (0.22%)
What drove the NASDAQ to its knees on Friday were the stocks known as FAANGs - Facebook, Apple, Amazon, Netflix, and Google - taking hits to their massively-overvalued share prices.
Here's the ugly reality
Facebook (FB) -5.11 (-3.30%); Apple (AAPL) -6.01 (-3.88%); Amazon (AMZN) -31.96 (-3.16%); Netflix (NFLX) -7.85 (-4.73%); Alphabet (parent of Google) (GOOG) -33.58 (-3.41%).
One-day, three-to-five-percent declines in any equity is usually a big deal. Having all of these institutionally-widely held stocks take a nosedive like that on a single day is a large, red, flashing warning sign that something is fundamentally wrong with the market, the economy, maybe even the world.
These shares weren't dumped all at once because somebody was taking profits. Volume was three times normal. Everybody was booking gains, and probably with good reason. The price/earning ratios for these tech darlings are unsustainable. Netflix leads the way with a P/E of 204, followed by Amazon, at 184, according to Yahoo Finance. Google seems modest by comparison, at 32. Facebook is 38, and Apple looks downright cheap with a P/E around 17.
So, only two of these stocks are wickedly overpriced, using standard metrics, but they all suffer some similar characteristics: They are all tech companies, based on the West coast, run by billionaire founders (excepting Apple, though Tim Cook was surely an heir apparent to Steve Jobs). The only other company that comes to mind with these characteristics is Microsoft (MSFT). The company founded by Bill Gates took a pretty good hit on Friday, down 1.63 (-2.27%).
Does this suggest that the "big one" is about to shake out the left coast, battering California from LA to San Jose with aftershocks up the coast to Seattle? And just how would anybody know that? OK, that theory falls into the category of tin-foil hat conspiracy theory, but, if Cali shakes, rattles and rolls someday soon, Money Daily will take credit for calling it (that's a joke, son).
Outside of Friday's tumult, general economic data has not been encouraging. First quarter GDP was 1.2% (second estimate), which is pretty close to stall speed. The US - and largely the global - economy has been anything but robust since the Great Financial Crisis (GFC) of 2008-09. Captains of finance at places like the World Bank, the Fed, ECB, and elsewhere have been touting "recovery" for eight years, wherein none, in fact, has occurred, unless one peers only at stock charts all day. While stocks have soared on easy money accommodation, he same cannot be said of Main Street's outlook. Retail stores are closing everywhere in America, small business has already been dumped into the trash bin of history, and new company creation has hit a 27-year low. Additionally, the Fed is hell-bent on raising rates for the second time this year when the FOMC meets on Tuesday and Wednesday of this week.
What's troubling about the fall of the FAANGs is that these companies have largely benefitted off the backs of consumers, monopolizing markets and cannibalizing profits to the C-suite executives. Now, the largest shareholders - pension, mutual, and hedge funds - may be taking their money elsewhere, either to cash, bonds, or, maybe just to more stolid, established, dividend-paying stocks. It's tough to know, groupthink among the elites being difficult to gauge or define.
Whatever the case, with the smallish losses on the Dow and S&P earlier in the week followed by a fallout in the most speculative stocks establishes a trend, which, for now, we can only identify as "shaky."
With most stocks and indices hovering near all-time highs, shaky is not a word one would normally associate with risk-taking. The time to run is when the avalanche is first seen at the top of the mountain, not when it barrels into the lodge.
At the Close, 6/9/17:
Dow: 21,271.97, +89.44 (0.42%)
NASDAQ 6,207.92, -113.85 (-1.80%)
S&P 500 2,431.77, -2.02 (-0.08%)
NYSE Composite: 11,744.73, +65.78 (0.56%)
For the Week:
Dow: +65.68 (0.31%)
NASDAQ: -97.88 (-1.55%)
S&P 500: -7.30 (-0.30%)
NYSE Composite: +26.03 (0.22%)
Saturday, June 10, 2017
Thursday, June 8, 2017
Something Is Not Working And It's Called Price Discovery
On Thursday, stocks closed the day essentially flat, with the exception of the NASDAQ, which seems to go up continually, no matter what the news, data or geopolitical conditions.
Oil slipped a little after being pumped and dumped. Precious metals were slammed without mercy, another annoying feature of the central banking control clique.
There seems to be a missing mechanism somewhere in this busted system, such as the one that transfers money from corporations to worthy shareholders or that can actually present a rational value for gold and silver.
It's called price discovery and there hasn't been an honest mechanism for such since 2009, probably earlier.
Like everything else, including the senate testimony of one former FBI Director James Comey, the stock market is built upon a mountain of flimsy propositions, most of which make little to no economic sense, unless, of course, one believes that borrowing insane amounts of money and printing even more will bring prosperity.
Hogwash.
At the Close, 6/8/17:
Dow: 21,182.53, +8.84 (0.04%)
NASDAQ: 6,321.76, +24.38 (0.39%)
S&P 500 2,433.79, +0.65 (0.03%)
NYSE Composite: 11,676.79, +9.06 (0.08%)
Oil slipped a little after being pumped and dumped. Precious metals were slammed without mercy, another annoying feature of the central banking control clique.
There seems to be a missing mechanism somewhere in this busted system, such as the one that transfers money from corporations to worthy shareholders or that can actually present a rational value for gold and silver.
It's called price discovery and there hasn't been an honest mechanism for such since 2009, probably earlier.
Like everything else, including the senate testimony of one former FBI Director James Comey, the stock market is built upon a mountain of flimsy propositions, most of which make little to no economic sense, unless, of course, one believes that borrowing insane amounts of money and printing even more will bring prosperity.
Hogwash.
At the Close, 6/8/17:
Dow: 21,182.53, +8.84 (0.04%)
NASDAQ: 6,321.76, +24.38 (0.39%)
S&P 500 2,433.79, +0.65 (0.03%)
NYSE Composite: 11,676.79, +9.06 (0.08%)
Crude Oil Sinks on Continuing Glut, Slack Demand, Alternatives
While stocks have zigzagged and gone nowhere the first three days of the week, oil has been more consistent in direction, with WTI crude dropping by two dollars a barrel on Wednesday under $46, a nine-month low.
There's been a glut of oil on world markets for some time now, but it's been especially painful to producers since the market riggers lost control in 2015, sending the price from imaginary levels - forced upon the planet by the myth of "peak oil" - around $100 per barrel to where it stands today.
Oil's recent swoon brings up a good question. With all the oil sloshing around and a myriad of factors leading to lessened use of the "fossil fuel," what exactly is fair value for crude?
There are many arguments with which to weigh the answer, whatever that may be, but one element that is undeniable about the current condition, is that producing nations aren't exactly in love with what they're being paid for a barrel of the slippery stuff. That's because many of the producers - OPEC and Middle East nations, primarily - had budgeted for steady sales around the high-water mark of $100/barrel.
Since that price turned out to be completely unsustainable, these countries have had to adjust their spending and programs, leading to some degree of discontent among their citizens. Americans, who benefitted from fracking and shale drilling, have been the biggest beneficiaries, seeing the price of a gallon of gas fall from an average near four dollars to today's prices in the low two dollar range.
One of the largest factors contributing to the glut is purely demographic. Many established economies - Japan, US, Europe - are aging, and older people simply don't drive as much. Add to that the improvements in fuel economy, plus alternatives such as cars which run on natural gas or electricity and he trend becomes more pronounced.
As the price of crude continues under pressure, alternative fuels, such as increased use of coal, solar, and wind in the United States, will only exacerbate the condition.
Back in the good old days of the 70s and 80s, oil used to be under $20 per barrel. Then along came the "peak oil" sham, which sent the price through the roof and consumers to the poorhouse. The true price may or may not be found in the current regime of futures prices, a system that has and probably continues to be gamed, but the real price, taking into account the massive amounts of oil on and off the market, the stagnation of the global economy, and emerging alternatives, is likely to be found at levels well below what it is pinned at today.
Try thinking of oil at about $32-36 per barrel and gasoline at $1.60 and you're probably on the right track.
At the Close, 6/7/17:
Dow: 21,173.69, +37.46 (0.18%)
NASDAQ 6,297.38, +22.32 (0.36%)
S&P 500 2,433.14, +3.81 (0.16%)
NYSE Composite: 11,667.73, -3.73 (-0.03%)
There's been a glut of oil on world markets for some time now, but it's been especially painful to producers since the market riggers lost control in 2015, sending the price from imaginary levels - forced upon the planet by the myth of "peak oil" - around $100 per barrel to where it stands today.
Oil's recent swoon brings up a good question. With all the oil sloshing around and a myriad of factors leading to lessened use of the "fossil fuel," what exactly is fair value for crude?
There are many arguments with which to weigh the answer, whatever that may be, but one element that is undeniable about the current condition, is that producing nations aren't exactly in love with what they're being paid for a barrel of the slippery stuff. That's because many of the producers - OPEC and Middle East nations, primarily - had budgeted for steady sales around the high-water mark of $100/barrel.
Since that price turned out to be completely unsustainable, these countries have had to adjust their spending and programs, leading to some degree of discontent among their citizens. Americans, who benefitted from fracking and shale drilling, have been the biggest beneficiaries, seeing the price of a gallon of gas fall from an average near four dollars to today's prices in the low two dollar range.
One of the largest factors contributing to the glut is purely demographic. Many established economies - Japan, US, Europe - are aging, and older people simply don't drive as much. Add to that the improvements in fuel economy, plus alternatives such as cars which run on natural gas or electricity and he trend becomes more pronounced.
As the price of crude continues under pressure, alternative fuels, such as increased use of coal, solar, and wind in the United States, will only exacerbate the condition.
Back in the good old days of the 70s and 80s, oil used to be under $20 per barrel. Then along came the "peak oil" sham, which sent the price through the roof and consumers to the poorhouse. The true price may or may not be found in the current regime of futures prices, a system that has and probably continues to be gamed, but the real price, taking into account the massive amounts of oil on and off the market, the stagnation of the global economy, and emerging alternatives, is likely to be found at levels well below what it is pinned at today.
Try thinking of oil at about $32-36 per barrel and gasoline at $1.60 and you're probably on the right track.
At the Close, 6/7/17:
Dow: 21,173.69, +37.46 (0.18%)
NASDAQ 6,297.38, +22.32 (0.36%)
S&P 500 2,433.14, +3.81 (0.16%)
NYSE Composite: 11,667.73, -3.73 (-0.03%)
Wednesday, June 7, 2017
A Disturbance in the Farce? Stocks End Lower Second Straight Session
Stocks turn red for the second straight session, this being the first full week of June, suggesting that there may be a revised adage for the new Wall Street, "Sell in June and avoid the swoon?"
Obviously, two days of smallish losses does not constitute a trend. Three days might. A close on the Dow below 20,600 would. Not only would that be a nearly three percent decline (OMG!), but it would be below the previous low close, a line of demarcation that could signal the oncoming of a bear market.
Those who deny the possibility of a bear market are either under the age of eight and have never seen what one looks like, or has forgotten prior bear markets, which generally occur when stocks are overstretched, overvalued and/or overbought.
To imagine that after eight years of somewhat spectacular gains that investors might disinvest and actually pull some of their support from the lofty prices of stocks on the Dow, NASDAQ, S&P, et. al., is not so far-fetched. It's happened before. It will, in all likelihood, happen again.
Trying to time such an event is the task of fools. With the FOMC ready to raise interest rates again, despite the incongruous activity in the bond markets (10-year-note yield at seven month lows, 2.15%), continued declines may become not a nuisance, but a feature this summer, one of the big hits that Hollywood will miss completely.
At The Close, 6/6/17:
Dow: 21,136.23, -47.81 (-0.23%)
NASDAQ 6,275.06, -20.63 (-0.33%)
S&P 500 2,429.33, -6.77 (-0.28%)
NYSE Composite: 11,671.46, -22.22 (-0.19%)
Obviously, two days of smallish losses does not constitute a trend. Three days might. A close on the Dow below 20,600 would. Not only would that be a nearly three percent decline (OMG!), but it would be below the previous low close, a line of demarcation that could signal the oncoming of a bear market.
Those who deny the possibility of a bear market are either under the age of eight and have never seen what one looks like, or has forgotten prior bear markets, which generally occur when stocks are overstretched, overvalued and/or overbought.
To imagine that after eight years of somewhat spectacular gains that investors might disinvest and actually pull some of their support from the lofty prices of stocks on the Dow, NASDAQ, S&P, et. al., is not so far-fetched. It's happened before. It will, in all likelihood, happen again.
Trying to time such an event is the task of fools. With the FOMC ready to raise interest rates again, despite the incongruous activity in the bond markets (10-year-note yield at seven month lows, 2.15%), continued declines may become not a nuisance, but a feature this summer, one of the big hits that Hollywood will miss completely.
At The Close, 6/6/17:
Dow: 21,136.23, -47.81 (-0.23%)
NASDAQ 6,275.06, -20.63 (-0.33%)
S&P 500 2,429.33, -6.77 (-0.28%)
NYSE Composite: 11,671.46, -22.22 (-0.19%)
Monday, June 5, 2017
Unconvincing Open To the Week; Inflation/Deflation Debate Grows; Oil Continues Slide
In the ongoing inflation/deflation scrimmage, it's a draw, but, depending on where you've placed your bets, the victories may be huge.
For the investing crowd, stocks are golden and likely will continue to be so. Rough spots ahead include the June FOMC meeting (next Tuesday and Wednesday) and the coming fight in the congress over President Trump's proposed tax plan, which would constitute not only a major victory for the president, but also a big one for the American people, so it's far from a sure thing.
Congress, in case nobody has noticed, remains, for the most part, useless. Unless one is interested in hearings which lead to nothing or vacation time for rich Senators and soon-to-be-rich members of the House, neither the Republicans nor Democrats seem willing to actually legislate upon anything that will benefit anybody outside the District of Columbia. Truly, congress has become a closed loop between special interests represented by K Street lobbyists and insider deals that benefit one's own district (and that's becoming something of a rarity).
Noting that the government - outside of President Trump's ongoing efforts for change - remains powerless to do anything positive, Wall Street is probably giddy over the prospects, being that the major corporations which own, buy, and sell debt and equity are well insulated against any untoward legislation or outside shocks within their own cozy club.
Thus, it makes little sense to do anything except invest in the only asset class returning gains and/or dividends. Precious metals have floundered for the past four years, and oil has been in the dumps over the past two.
The slide from the low $50 range for WTI crude continued on Monday, dipping as down to 46.86 before recovering late in New York into the low $47 range.
So, in a nutshell, food and many other consumer staples remain without pricing power, restaurants are varyingly in a race to the bottom or towards diversifying menus with many of the large chains offering enticing deals. Retail overall is a basket case, now that online shopping has gone mainstream and will soon overtake brick and mortar from a gross revenue standpoint.
It's stocks for appreciation, though the wizards of Wall Street are somewhat blind to the disinflation, deflation and decimation of Main Street.
At the Close, 6/5/17:
Dow: 21,184.04, -22.25 (-0.10%)
NASDAQ: 6,295.68, -10.11 (-0.16%)
S&P 500: 2,436.10, -2.97 (-0.12%)
NYSE Composite: 11,693.65, -25.04 (-0.21%)
For the investing crowd, stocks are golden and likely will continue to be so. Rough spots ahead include the June FOMC meeting (next Tuesday and Wednesday) and the coming fight in the congress over President Trump's proposed tax plan, which would constitute not only a major victory for the president, but also a big one for the American people, so it's far from a sure thing.
Congress, in case nobody has noticed, remains, for the most part, useless. Unless one is interested in hearings which lead to nothing or vacation time for rich Senators and soon-to-be-rich members of the House, neither the Republicans nor Democrats seem willing to actually legislate upon anything that will benefit anybody outside the District of Columbia. Truly, congress has become a closed loop between special interests represented by K Street lobbyists and insider deals that benefit one's own district (and that's becoming something of a rarity).
Noting that the government - outside of President Trump's ongoing efforts for change - remains powerless to do anything positive, Wall Street is probably giddy over the prospects, being that the major corporations which own, buy, and sell debt and equity are well insulated against any untoward legislation or outside shocks within their own cozy club.
Thus, it makes little sense to do anything except invest in the only asset class returning gains and/or dividends. Precious metals have floundered for the past four years, and oil has been in the dumps over the past two.
The slide from the low $50 range for WTI crude continued on Monday, dipping as down to 46.86 before recovering late in New York into the low $47 range.
So, in a nutshell, food and many other consumer staples remain without pricing power, restaurants are varyingly in a race to the bottom or towards diversifying menus with many of the large chains offering enticing deals. Retail overall is a basket case, now that online shopping has gone mainstream and will soon overtake brick and mortar from a gross revenue standpoint.
It's stocks for appreciation, though the wizards of Wall Street are somewhat blind to the disinflation, deflation and decimation of Main Street.
At the Close, 6/5/17:
Dow: 21,184.04, -22.25 (-0.10%)
NASDAQ: 6,295.68, -10.11 (-0.16%)
S&P 500: 2,436.10, -2.97 (-0.12%)
NYSE Composite: 11,693.65, -25.04 (-0.21%)
Stocks Gain Again With No End in Sight
The rally continued this past week, despite a weak outlook for employment with the May NFP data coming in well short of estimates and the prior two months (March and April) revised lower.
As has been the case for the better part of the last eight years, stocks charted their own course, without regard to underlying fundamental data. As the market entered the first full week of June, the ancient adage of "sell in May and go away" did not apply. Stocks were higher (the DOW, NASDAQ and S&P all making new all-time highs) the past two weeks and up in eight of the last 11 overall.
Bonds are telling an odd story as well, with the 10-year note falling below 2.20% yield on Friday, the lowest level since the election. The action in bonds is unusual, considering that the Fed is prepared to and has hinted at raising the federal funds rate another 25 basis points at their June FOMC meeting, which will be held next week, on the 13th and 14th.
Entering Monday's trading, futures are pointing lower, though that means little, except that the expected levitation will be delayed a few minutes or maybe even a few hours.
At The Close, 6/2/17:
Dow: 21,206.29, +62.11 (0.29%)
NASDAQ: 6,305.80, +58.97 (0.94%)
S&P 500: 2,439.07, +9.01 (0.37%)
NYSE Composite: 11,718.70, +18.91 (0.16%)
For the week:
Dow: +126.01 (0.60%)
NASDAQ: +95.60 (1.54%)
S&P 500: +23.25 (0.96%)
NYSE Composite: +86.83 (0.75%)
As has been the case for the better part of the last eight years, stocks charted their own course, without regard to underlying fundamental data. As the market entered the first full week of June, the ancient adage of "sell in May and go away" did not apply. Stocks were higher (the DOW, NASDAQ and S&P all making new all-time highs) the past two weeks and up in eight of the last 11 overall.
Bonds are telling an odd story as well, with the 10-year note falling below 2.20% yield on Friday, the lowest level since the election. The action in bonds is unusual, considering that the Fed is prepared to and has hinted at raising the federal funds rate another 25 basis points at their June FOMC meeting, which will be held next week, on the 13th and 14th.
Entering Monday's trading, futures are pointing lower, though that means little, except that the expected levitation will be delayed a few minutes or maybe even a few hours.
At The Close, 6/2/17:
Dow: 21,206.29, +62.11 (0.29%)
NASDAQ: 6,305.80, +58.97 (0.94%)
S&P 500: 2,439.07, +9.01 (0.37%)
NYSE Composite: 11,718.70, +18.91 (0.16%)
For the week:
Dow: +126.01 (0.60%)
NASDAQ: +95.60 (1.54%)
S&P 500: +23.25 (0.96%)
NYSE Composite: +86.83 (0.75%)
Friday, June 2, 2017
To Start June, Stocks Soar Without Reason; Dow, NASDAQ Set New Marks; NFP Disappoints
Just because...
At The Close, 5/1/17:
Dow: 21,144.18, +135.53 (0.65%)
NASDAQ: 6,246.83, +48.31 (0.78%)
S&P 500: 2,430.06, +18.26 (0.76%)
NYSE Composite: 11,699.79, +101.76 (0.88%)
Updating, at approximately 9:00 am ET:
May Non-farm Payroll data disappointed, coming in well below expectations of 185,000 net new jobs, at 138,000.
April was revised lower, to 174,000. The May figure is the second-lowest since November 2016, and is the sixth month of the last eight that job creation was less than 200,000, dating back to October, 2016.
Is this showing the real nature of the US economy? That job creation is still stagnant or slowing, with the economy remaining in favor of large corporations with significant barriers to entry by smaller firms.
This is the turret of the US economy. The myriad of regulations and laws, engineered and gamed by lobbyists for major firms, favor big business at the detriment to small business and entrepreneurism. The rules, regulations, licenses, and filing requirements for business favors larger firms because they - due to their vast monetary advantages - can pay the onerous fees, lawyers, accountants and compliance costs without much of a dent to their bottom line.
Smaller firms lack the financial resources to deal with the myriad of federal, state and local laws, finding themselves at such a disadvantage that many people considering starting up their own business, do not, once they research the complications of tax laws and other regulations. Thus, the number of self-employed people in the USA is lower today than it was in 1990.
That figure is depressing because there are 72 million more Americans now than there were in 1990. Worse yet, according to Michael Snyder's Economic Collapse blog:
So, while Wall Street funds the well-heeled huge corporations, Main Street and small town America is still stuck in the depression that began in 2007 (some say 2000) and has not ended, despite the "recovery" meme from the past eight years.
If working for some gigantic global corporation at slave wages and having 40% of your paycheck stolen from you in the form of taxes and contributions is any American's idea of freedom, growth, or prosperity, one wonders what a recession or depression really looks like.
Americans could have and should have destroyed the corporate-government partnership back in the sixties, but, after the youth revolution was crushed by the military-industrial complex, the Baby Boomer generation blindly went along their merry way, co-opted into the system. Now they are all retiring, wondering if the $500,000 or $1 million they've squirreled away over the years will last them the rest of their lives.
Meanwhile, the country they were born into and suckled upon no longer resembles the one of their youth. They will leave to future generations a small shadow of a once-great nation, Donald Trump or no Donald Trump. Sadly, to this point, the evidence points to the president favoring big business over small. Perhaps that is just perception, or maybe it's too soon to judge him on the small business front, because, after all, he was - long ago - a small business - and has dealt with many small business owners in the past.
There may yet be hope for small business in America, but the rules favoring big business are choking it down.
At The Close, 5/1/17:
Dow: 21,144.18, +135.53 (0.65%)
NASDAQ: 6,246.83, +48.31 (0.78%)
S&P 500: 2,430.06, +18.26 (0.76%)
NYSE Composite: 11,699.79, +101.76 (0.88%)
Updating, at approximately 9:00 am ET:
May Non-farm Payroll data disappointed, coming in well below expectations of 185,000 net new jobs, at 138,000.
April was revised lower, to 174,000. The May figure is the second-lowest since November 2016, and is the sixth month of the last eight that job creation was less than 200,000, dating back to October, 2016.
Is this showing the real nature of the US economy? That job creation is still stagnant or slowing, with the economy remaining in favor of large corporations with significant barriers to entry by smaller firms.
This is the turret of the US economy. The myriad of regulations and laws, engineered and gamed by lobbyists for major firms, favor big business at the detriment to small business and entrepreneurism. The rules, regulations, licenses, and filing requirements for business favors larger firms because they - due to their vast monetary advantages - can pay the onerous fees, lawyers, accountants and compliance costs without much of a dent to their bottom line.
Smaller firms lack the financial resources to deal with the myriad of federal, state and local laws, finding themselves at such a disadvantage that many people considering starting up their own business, do not, once they research the complications of tax laws and other regulations. Thus, the number of self-employed people in the USA is lower today than it was in 1990.
That figure is depressing because there are 72 million more Americans now than there were in 1990. Worse yet, according to Michael Snyder's Economic Collapse blog:
...the percentage of “new entrepreneurs and business owners” declined by a staggering 53 percent between 1977 and 2010.
So, while Wall Street funds the well-heeled huge corporations, Main Street and small town America is still stuck in the depression that began in 2007 (some say 2000) and has not ended, despite the "recovery" meme from the past eight years.
If working for some gigantic global corporation at slave wages and having 40% of your paycheck stolen from you in the form of taxes and contributions is any American's idea of freedom, growth, or prosperity, one wonders what a recession or depression really looks like.
Americans could have and should have destroyed the corporate-government partnership back in the sixties, but, after the youth revolution was crushed by the military-industrial complex, the Baby Boomer generation blindly went along their merry way, co-opted into the system. Now they are all retiring, wondering if the $500,000 or $1 million they've squirreled away over the years will last them the rest of their lives.
Meanwhile, the country they were born into and suckled upon no longer resembles the one of their youth. They will leave to future generations a small shadow of a once-great nation, Donald Trump or no Donald Trump. Sadly, to this point, the evidence points to the president favoring big business over small. Perhaps that is just perception, or maybe it's too soon to judge him on the small business front, because, after all, he was - long ago - a small business - and has dealt with many small business owners in the past.
There may yet be hope for small business in America, but the rules favoring big business are choking it down.
Wednesday, May 31, 2017
A Brief Look at the Fall of the Roman Empire and Comparisons to America
This is simply priceless.
Just after the market open (9:45 am ET), Chicago PMI was reported at 55.2
A couple of hours later (after the Dow was down 87 points):
So, not only do US (and, by way of inference, all other equity markets, globally) equity markets have the backstopping mechanism of central banks buying stocks, and the Plunge Protection Team at work, but now routine data releases are changed when they don't exactly fit the narrative.
Fake news, fake money, fake boobs, fake everything. Better check your pulse. It may be fake and you are actually dead.
These's only one way to report on finances anymore, with tongue planted firmly in cheek.
A major reset is coming. The sustainability of the current construct probably has a pretty short shelf life. However, in financial and historical terms, that could be months, years or decades. The fall of the Roman Empire was a slow-motion wreck that took over 300 years, roughly from 117 AD to 476.
Wikipedia has an interesting opening line on the Fall of the Western Roman Empire:
Note the wording, "failed to enforce its rule..." which would coincide roughly with the greatest fiasco related to the most recent election campaign, wherein FBI director James Comey laid out specific crimes by Hillary Clinton, but concluded that "no reasonable prosecutor would bring charges." Add to that the short meeting between former president Bill Clinton and then-Attorney General Loretta Lynch on the tarmac of the Phoenix airport just a few days prior to Comey's televised statement and you have a textbook case of "failing to enforce its rule."
So, the fall of the American empire may be in its earliest days. You can breath a sigh of relief now.
Well, maybe not.
Looking at the decline of Rome another way would be to examine its currency, which was gold and silver. The devaluation of the currency predates the earlier given date of the beginning of the fall at 117, when Emperor Nero fiddled with the silver content in the denarius, reducing it from 100% silver to 85%, during his reign from 54-68 AD. By the time Emperor Severus ruled (193-211 AD), the coinage was down to 50% silver. Eventually, Roman coins would contain less than 1% silver or none at all.
From that perspective, we could be almost at an end. These days, life moves faster than it did in Roman times. Romans didn't have instant communications, computers, cell phones or any of the "essentials" which we today take for granted. Consequently, technology has made it possible for everything outside of nature (animals, climate, insects, geology, etc.) to move at a much faster pace.
Thus noted, the American empire may be collapsing much faster than mainstream economists are willing to admit. The US Mint stamped its last gold coin in 1932. It stopped 90% silver coinage in 1964. Nixon took the US off the gold standard in 1971. Since then, our money has had no backing beyond the "full faith and credit" of the federal government, which, as many are now aware, has overextended its credit, causing a severe loss of faith by its loyal subjects (eh, that would be us, homey).
It's probably close to a majority of people living today in the United States which are clueless concerning the value of their currency, which is basically the paper upon which is printed numbers, words, pictures of dead presidents, and other indicia of America's greatness. Anybody born in 1971 would be 46 or 47 now; anybody born after that date would be, obviously, younger. All of those people have been living in a world of fiat currency, backed by absolutely nothing except empty promises from a federal government which can't balance its own books.
Making matters worse, US currency (or legal tender, to be correct) may be technically unconstitutional. The arguments concerning the constitutionality of the Federal Reserve to print paper money - granted that right by Congress in 1913 - are vague, various, contentious, and too deep for this limited discussion. But, a great many people have and some still do believe that money not backed by gold or silver or some other base commodity is, well, garbage.
104 years of the Federal Reserve ruining our economy has devalued the US dollar by 98%. So, where are we headed?
On the other hand, perhaps modernity consists of allowing such counterfeiting and fakery by central bankers and the tacit approval of the populace. In other words, don't rock the boat, keep with the status quo; the modern mores and normalcy bias will prevail. In that regard, Americans are a pretty complacent bunch, like the traders, movers, and shakers of Wall Street. We all go along to get along, or, in the words of a Russian during the Soviet era, "we pretend to work, and the government pretends to pay us."
We're deep down the rabbit hole, folks, and it appears that we're going deeper.
BTW: No "window dressing" on the final day of the month. Also, hat tip to Zero Hedge for inspiring this article.
At the Close, 5/31/17:
Dow: 21,008.65, -20.82 (-0.10%)
NASDAQ: 6,198.52, -4.67 (-0.08%)
S&P 500: 2,411.80, -1.11 (-0.05%)
NYSE Composite: 11,598.03, -3.28 (-0.03%)
Just after the market open (9:45 am ET), Chicago PMI was reported at 55.2
U.S. Midwest factory activity index retreats in May - Chicago PMI
NEW YORK U.S. Midwest manufacturing activity fell more than forecast in May from its strongest level in more than two years, an index jointly developed by MNI Indicators and ISM-Chicago released on Wednesday showed.
A couple of hours later (after the Dow was down 87 points):
Updated: Chicago PMI Increases in May
Earlier, the Chicago PMI was reported at 55.2. That has now been corrected to 59.4. This was above the consensus forecast.
So, not only do US (and, by way of inference, all other equity markets, globally) equity markets have the backstopping mechanism of central banks buying stocks, and the Plunge Protection Team at work, but now routine data releases are changed when they don't exactly fit the narrative.
Fake news, fake money, fake boobs, fake everything. Better check your pulse. It may be fake and you are actually dead.
These's only one way to report on finances anymore, with tongue planted firmly in cheek.
A major reset is coming. The sustainability of the current construct probably has a pretty short shelf life. However, in financial and historical terms, that could be months, years or decades. The fall of the Roman Empire was a slow-motion wreck that took over 300 years, roughly from 117 AD to 476.
Wikipedia has an interesting opening line on the Fall of the Western Roman Empire:
The Fall of the Western Roman Empire (also called Fall of the Roman Empire or Fall of Rome) was the process of decline in the Western Roman Empire in which it failed to enforce its rule, and its vast territory was divided into several successor polities.-emphasis Money Daily
Note the wording, "failed to enforce its rule..." which would coincide roughly with the greatest fiasco related to the most recent election campaign, wherein FBI director James Comey laid out specific crimes by Hillary Clinton, but concluded that "no reasonable prosecutor would bring charges." Add to that the short meeting between former president Bill Clinton and then-Attorney General Loretta Lynch on the tarmac of the Phoenix airport just a few days prior to Comey's televised statement and you have a textbook case of "failing to enforce its rule."
So, the fall of the American empire may be in its earliest days. You can breath a sigh of relief now.
Well, maybe not.
Looking at the decline of Rome another way would be to examine its currency, which was gold and silver. The devaluation of the currency predates the earlier given date of the beginning of the fall at 117, when Emperor Nero fiddled with the silver content in the denarius, reducing it from 100% silver to 85%, during his reign from 54-68 AD. By the time Emperor Severus ruled (193-211 AD), the coinage was down to 50% silver. Eventually, Roman coins would contain less than 1% silver or none at all.
From that perspective, we could be almost at an end. These days, life moves faster than it did in Roman times. Romans didn't have instant communications, computers, cell phones or any of the "essentials" which we today take for granted. Consequently, technology has made it possible for everything outside of nature (animals, climate, insects, geology, etc.) to move at a much faster pace.
Thus noted, the American empire may be collapsing much faster than mainstream economists are willing to admit. The US Mint stamped its last gold coin in 1932. It stopped 90% silver coinage in 1964. Nixon took the US off the gold standard in 1971. Since then, our money has had no backing beyond the "full faith and credit" of the federal government, which, as many are now aware, has overextended its credit, causing a severe loss of faith by its loyal subjects (eh, that would be us, homey).
It's probably close to a majority of people living today in the United States which are clueless concerning the value of their currency, which is basically the paper upon which is printed numbers, words, pictures of dead presidents, and other indicia of America's greatness. Anybody born in 1971 would be 46 or 47 now; anybody born after that date would be, obviously, younger. All of those people have been living in a world of fiat currency, backed by absolutely nothing except empty promises from a federal government which can't balance its own books.
Making matters worse, US currency (or legal tender, to be correct) may be technically unconstitutional. The arguments concerning the constitutionality of the Federal Reserve to print paper money - granted that right by Congress in 1913 - are vague, various, contentious, and too deep for this limited discussion. But, a great many people have and some still do believe that money not backed by gold or silver or some other base commodity is, well, garbage.
104 years of the Federal Reserve ruining our economy has devalued the US dollar by 98%. So, where are we headed?
On the other hand, perhaps modernity consists of allowing such counterfeiting and fakery by central bankers and the tacit approval of the populace. In other words, don't rock the boat, keep with the status quo; the modern mores and normalcy bias will prevail. In that regard, Americans are a pretty complacent bunch, like the traders, movers, and shakers of Wall Street. We all go along to get along, or, in the words of a Russian during the Soviet era, "we pretend to work, and the government pretends to pay us."
We're deep down the rabbit hole, folks, and it appears that we're going deeper.
BTW: No "window dressing" on the final day of the month. Also, hat tip to Zero Hedge for inspiring this article.
At the Close, 5/31/17:
Dow: 21,008.65, -20.82 (-0.10%)
NASDAQ: 6,198.52, -4.67 (-0.08%)
S&P 500: 2,411.80, -1.11 (-0.05%)
NYSE Composite: 11,598.03, -3.28 (-0.03%)
Stocks Gain, Bond Yields Continue Lower in Fed-inspired Environment
Opening the week with across-the-board losses, the major indices took a little off the top Tuesday, the penultimate trading day for the month of May.
The losses were limited in scope, however, as speculators seem reluctant to forego gains in a bull market that has shown few signs of slowing.
With optimism on Wall Street approaching a state irrational exuberance, the issue becomes one of not when the market will reverse course, but at what speed. A sharp downturn could expose many hedgers and options players, though the Fed and their cohorts at the ECB, BOJ, and the PPT would likely quash any rampant selling by putting an artificial floor on the market, a tactic they've employed over the last eight years of fake recovery.
Unlimited upside is the overarching theme of the decade, despite the Fed's promise to raise interest rates four times in 2017. Despite the threat of tighter money, the 10-year treasury note closed out the day at 2.22% and shows no sign of reacting negatively to any Fed jawboning nor actual policy directives.
While the bull market remains intact at eight years and running, the bond rally is at 30 years. Liquidity and solvency have been the main catalysts since 2009, with central banks coordinating bond (and equity) purchases in order to prevent a complete collapse of the global financial system, which almost fell apart in 2008-09.
Complete control of all markets being the ultimate goal of central banks, the money-printers are close to achieving just that. Even if economic data remains sluggish, weak, or troubling, the Fed and friends will be at the rescue. Stocks have been unable to extend any losing streak to frightful lengths, thanks to central bank intervention, fearing losing control.
Whatever the outcome of the June FOMC meeting, it's almost a slam-dunk that stocks will gain. It's simply the way the market is currently composed.
At the Close, 5/30/17:
Dow: 21,029.47, -50.81 (-0.24%)
NASDAQ: 6,203.19, -7.00 (-0.11%)
S&P 500: 2,412.91, -2.91 (-0.12%)
NYSE Composite: 11,601.31, -30.56 (-0.26%)
The losses were limited in scope, however, as speculators seem reluctant to forego gains in a bull market that has shown few signs of slowing.
With optimism on Wall Street approaching a state irrational exuberance, the issue becomes one of not when the market will reverse course, but at what speed. A sharp downturn could expose many hedgers and options players, though the Fed and their cohorts at the ECB, BOJ, and the PPT would likely quash any rampant selling by putting an artificial floor on the market, a tactic they've employed over the last eight years of fake recovery.
Unlimited upside is the overarching theme of the decade, despite the Fed's promise to raise interest rates four times in 2017. Despite the threat of tighter money, the 10-year treasury note closed out the day at 2.22% and shows no sign of reacting negatively to any Fed jawboning nor actual policy directives.
While the bull market remains intact at eight years and running, the bond rally is at 30 years. Liquidity and solvency have been the main catalysts since 2009, with central banks coordinating bond (and equity) purchases in order to prevent a complete collapse of the global financial system, which almost fell apart in 2008-09.
Complete control of all markets being the ultimate goal of central banks, the money-printers are close to achieving just that. Even if economic data remains sluggish, weak, or troubling, the Fed and friends will be at the rescue. Stocks have been unable to extend any losing streak to frightful lengths, thanks to central bank intervention, fearing losing control.
Whatever the outcome of the June FOMC meeting, it's almost a slam-dunk that stocks will gain. It's simply the way the market is currently composed.
At the Close, 5/30/17:
Dow: 21,029.47, -50.81 (-0.24%)
NASDAQ: 6,203.19, -7.00 (-0.11%)
S&P 500: 2,412.91, -2.91 (-0.12%)
NYSE Composite: 11,601.31, -30.56 (-0.26%)
Tuesday, May 30, 2017
Stocks Up for the Week; Murky Outlook Going Forward
The last full week of May was a solid one for stock pickers, with all the major averages posting excellent weekly gains, despite a somewhat subdued session Friday.
The NASDAQ and S&P notched new all-time highs a couple of times, though the question remains as to just how much higher stocks can ascend given the weakness in macro data and tension in geopolitics.
The start of June is generally a quiet time for markets, but, with central banks backstopping any selloff with unlimited funding, the fun may last some time longer. June's FOMC meeting has been heralded as one in which the Fed may raise the federal funds rate to 1.00-1.25%, which would be a high-water mark since the GFC of 2008-09.
Money Daily disputes to contention of many analysts - 83% of which see a June rate hike - that a rate hike is imminent, due to glaringly obvious poor results in housing, personal income and spending, and industrial production, to name just a few.
Futures are pointing to a negative open in this holiday-shortened week.
At The Close, 5/26/17:
Dow: 21,080.28, -2.67 (-0.01%)
NASDAQ 6,210.19, +4.94 (0.08%)
S&P 500: 2,415.82, +0.75 (0.03%)
NYSE Composite: 11,631.87, -7.43 (-0.06%)
For the week:
Dow: +275.44 (1.32%)
NASDAQ: +126.49 (2.08%)
S&P 500: +34.09 (1.43%)
NYSE Composite: +89.18 (0.77%)
The NASDAQ and S&P notched new all-time highs a couple of times, though the question remains as to just how much higher stocks can ascend given the weakness in macro data and tension in geopolitics.
The start of June is generally a quiet time for markets, but, with central banks backstopping any selloff with unlimited funding, the fun may last some time longer. June's FOMC meeting has been heralded as one in which the Fed may raise the federal funds rate to 1.00-1.25%, which would be a high-water mark since the GFC of 2008-09.
Money Daily disputes to contention of many analysts - 83% of which see a June rate hike - that a rate hike is imminent, due to glaringly obvious poor results in housing, personal income and spending, and industrial production, to name just a few.
Futures are pointing to a negative open in this holiday-shortened week.
At The Close, 5/26/17:
Dow: 21,080.28, -2.67 (-0.01%)
NASDAQ 6,210.19, +4.94 (0.08%)
S&P 500: 2,415.82, +0.75 (0.03%)
NYSE Composite: 11,631.87, -7.43 (-0.06%)
For the week:
Dow: +275.44 (1.32%)
NASDAQ: +126.49 (2.08%)
S&P 500: +34.09 (1.43%)
NYSE Composite: +89.18 (0.77%)
Thursday, May 25, 2017
Rally Continues; Assimilation Of Entire Global Economy By Central Bankers Is Nearly Complete
Just for the heck of it, look up a couple of things on your favorite search engine (ours is Bing; we've supplied the links):
The Crime of '73
Creature From Jekyl Island
President's Working Group on Financial Markets
Bank for International Settlements (BIS)
If it's not already obvious, the international cartel of banking has been at this game a long, long, long, time.
Just for fun, here's an article from FEE.org (Foundation For Economic Education) by Robert Higgs: Wartime Origins of Modern Income-Tax Withholding.
If you allow (and who hasn't?) the government to take your money before you ever see it, you're owned. Sure, your retirement fund looks good, but try adding up all the taxes you've paid the last ten years (spoiler alert:: you'll be shocked).
That's all for today, including new record closes for the S&P and NASDAQ.
At the Close, 5/25/17:
Dow: 21,082.95, +70.53 (0.34%)
S&P 500: 2,415.07, +10.68 (0.44%)
NASDAQ: 6,205.26, +42.23 (0.69%)
NYSE Composite: 11,640.73, +19.50 (0.17%)
The Crime of '73
Creature From Jekyl Island
President's Working Group on Financial Markets
Bank for International Settlements (BIS)
If it's not already obvious, the international cartel of banking has been at this game a long, long, long, time.
Just for fun, here's an article from FEE.org (Foundation For Economic Education) by Robert Higgs: Wartime Origins of Modern Income-Tax Withholding.
If you allow (and who hasn't?) the government to take your money before you ever see it, you're owned. Sure, your retirement fund looks good, but try adding up all the taxes you've paid the last ten years (spoiler alert:: you'll be shocked).
That's all for today, including new record closes for the S&P and NASDAQ.
At the Close, 5/25/17:
Dow: 21,082.95, +70.53 (0.34%)
S&P 500: 2,415.07, +10.68 (0.44%)
NASDAQ: 6,205.26, +42.23 (0.69%)
NYSE Composite: 11,640.73, +19.50 (0.17%)
Wednesday, May 24, 2017
Stocks Rage into the Close; PPT Mentioned on CNBC
Good stuff on Zero Hedge, when Asher Edelman brought up the PPT (Plunge Protection Team) on CNBC's "Fast Money."
People really don't mention the Plunge Protection Team much anymore, ever since the Fed and their central bank cohorts began their financial asset buying spree in 2009. The Fed money-printing machine puts the PPT (otherwise known as the President's Working Group on Financial Markets) to shame.
The Federal Reserve added liquidity to markets by directly intervening through outright asset purchases of mortgage-backed securities and treasury bills and notes. Known as Qualitative Easing (QE), those in the know simply call it "money printing" or "creating money out of thin air." Both are correct, and, despite all the best intents of Keynesian economics, those actions are supposed to create inflation, which has occurred in stocks, housing and elsewhere, but not in the many and varied consumer staples and discretionary items.
Most consumer prices (and incomes) have somewhat stagnated since the Great Financial Crisis of 2008-09, and, with the Fed threatening another rate increase in June, they probably won't be moving soon. The dislocations in the housing market and the massive transfer of wealth from the poor and middle classes to the very rich, however, have been direct results of Fed action.
So, it's somewhat funny that the commentator would single out the PPT, though he's probably spot on in his general assessment. The bigger issue would be the almost total control of the equity markets by key players, notably, central banks and large commercial firms, i.e., Goldman Sachs, Morgan Stanley, et. al.
Whatever method was in play today, it certainly worked wonders as stocks levitated after 2:00 pm ET into the close.
At The Close, 5/24/17:
Dow: 21,012.42, +74.51 (0.36%)
NASDAQ: 6,163.02, +24.31 (0.40%)
S&P 500: 2,404.39, +5.97 (0.25%)
NYSE Composite: 11,621.23, +16.61 (0.14%)
People really don't mention the Plunge Protection Team much anymore, ever since the Fed and their central bank cohorts began their financial asset buying spree in 2009. The Fed money-printing machine puts the PPT (otherwise known as the President's Working Group on Financial Markets) to shame.
The Federal Reserve added liquidity to markets by directly intervening through outright asset purchases of mortgage-backed securities and treasury bills and notes. Known as Qualitative Easing (QE), those in the know simply call it "money printing" or "creating money out of thin air." Both are correct, and, despite all the best intents of Keynesian economics, those actions are supposed to create inflation, which has occurred in stocks, housing and elsewhere, but not in the many and varied consumer staples and discretionary items.
Most consumer prices (and incomes) have somewhat stagnated since the Great Financial Crisis of 2008-09, and, with the Fed threatening another rate increase in June, they probably won't be moving soon. The dislocations in the housing market and the massive transfer of wealth from the poor and middle classes to the very rich, however, have been direct results of Fed action.
So, it's somewhat funny that the commentator would single out the PPT, though he's probably spot on in his general assessment. The bigger issue would be the almost total control of the equity markets by key players, notably, central banks and large commercial firms, i.e., Goldman Sachs, Morgan Stanley, et. al.
Whatever method was in play today, it certainly worked wonders as stocks levitated after 2:00 pm ET into the close.
At The Close, 5/24/17:
Dow: 21,012.42, +74.51 (0.36%)
NASDAQ: 6,163.02, +24.31 (0.40%)
S&P 500: 2,404.39, +5.97 (0.25%)
NYSE Composite: 11,621.23, +16.61 (0.14%)
Central Banks Have Schemed Markets To Unforeseen Heights
If you're 16, eight years seems like a long time.
It's different if you're in your 50s or 60s, because you've lived longer, so eight years might be just 1/7th of your lifetime, or 1/8th, or more. When you're 16, eight years is half of your current lifetime.
Eight years (and two+ months) is also the length of the current stock market rally, and whether that seems like a long time or not, it's significant, being that this bull market has run longer and higher than even the most optimistic people might have predicted.
Who knew, when the Dow was in the dumpster, closing at 6,547.05 on March 9, 2009, that the index would continue to rise, without so much as a 15% correction, uninterrupted, to its current level of 20,937.91, more than tripling in value since the Great Financial Crisis?
Even the engineers and planners behind the massive, central bank asset buying spree had no idea where this was heading, though they were fairly certain that their actions would take stocks much higher. And, it is also likely that the new genii at the Fed has no clue either. Global markets have indeed been in uncharted territory since at least March, 2009, but it's getting to the point - just like the current and ongoing spate of fake news - that nobody even cares anymore.
One might look at his or her quarterly or monthly pension portfolio or 401k and see that the money keeps rolling in and not give a second thought as to why. Life is good, one would assume, and retirement will be even better!
It's this kind of naive thinking that has led many a bull market or bullish stock picker to ruin, but, it does really seem different this time, because it truly is. Never before have the central banks from nearly every developed country coordinated in such a manner to produce such an ungodly financial bubble.
Bubbles eventually burst. Big ones make loud noises.
At the Close, 5/23/17:
Dow: 20,937.91, +43.08 (0.21%)
NASDAQ: 6,138.71, +5.09 (0.08%)
S&P 500: 2,398.42, +4.40 (0.18%)
NYSE Composite: 11,604.62, +19.41 (0.17%)
It's different if you're in your 50s or 60s, because you've lived longer, so eight years might be just 1/7th of your lifetime, or 1/8th, or more. When you're 16, eight years is half of your current lifetime.
Eight years (and two+ months) is also the length of the current stock market rally, and whether that seems like a long time or not, it's significant, being that this bull market has run longer and higher than even the most optimistic people might have predicted.
Who knew, when the Dow was in the dumpster, closing at 6,547.05 on March 9, 2009, that the index would continue to rise, without so much as a 15% correction, uninterrupted, to its current level of 20,937.91, more than tripling in value since the Great Financial Crisis?
Even the engineers and planners behind the massive, central bank asset buying spree had no idea where this was heading, though they were fairly certain that their actions would take stocks much higher. And, it is also likely that the new genii at the Fed has no clue either. Global markets have indeed been in uncharted territory since at least March, 2009, but it's getting to the point - just like the current and ongoing spate of fake news - that nobody even cares anymore.
One might look at his or her quarterly or monthly pension portfolio or 401k and see that the money keeps rolling in and not give a second thought as to why. Life is good, one would assume, and retirement will be even better!
It's this kind of naive thinking that has led many a bull market or bullish stock picker to ruin, but, it does really seem different this time, because it truly is. Never before have the central banks from nearly every developed country coordinated in such a manner to produce such an ungodly financial bubble.
Bubbles eventually burst. Big ones make loud noises.
At the Close, 5/23/17:
Dow: 20,937.91, +43.08 (0.21%)
NASDAQ: 6,138.71, +5.09 (0.08%)
S&P 500: 2,398.42, +4.40 (0.18%)
NYSE Composite: 11,604.62, +19.41 (0.17%)
Tuesday, May 23, 2017
Markets Continue Boom; Dow Up Third Straight Day
Remember that 372-point drop last week? All gone. Well, almost.
On Tuesday, May 16, the Dow Jone Industrial Average closed at 20,979.75. The following day, the close was 20,606.93.
Ouch.
After three straight days of gains, however, the Dow closed Monday at 20,894.83. So, another 85 points and last week's fallout will be all but forgotten, the band-aid removed, only a small scab remaining.
Don't fight it. Even though you know stocks are overvalued, TINA (There Is No Alternative) says, "Love me."
At The Close, 5/22/17:
Dow: 20,894.83, +89.99 (0.43%)
NASDAQ: 6,133.62, +49.92 (0.82%)
S&P 500: 2,394.02, +12.29 (0.52%)
NYSE Composite: 11,585.21, +42.52 (0.37%)
On Tuesday, May 16, the Dow Jone Industrial Average closed at 20,979.75. The following day, the close was 20,606.93.
Ouch.
After three straight days of gains, however, the Dow closed Monday at 20,894.83. So, another 85 points and last week's fallout will be all but forgotten, the band-aid removed, only a small scab remaining.
Don't fight it. Even though you know stocks are overvalued, TINA (There Is No Alternative) says, "Love me."
At The Close, 5/22/17:
Dow: 20,894.83, +89.99 (0.43%)
NASDAQ: 6,133.62, +49.92 (0.82%)
S&P 500: 2,394.02, +12.29 (0.52%)
NYSE Composite: 11,585.21, +42.52 (0.37%)
Monday, May 22, 2017
Despite Friday's Gains, Stocks Finish Week Lower; About To Get A Wedgie?
Major US equity indices finished the week strong, with solid gains across all, but the weekly view gives another picture, despite the NASDAQ diverging radically from the others.
Looking especially at the NYSE Composite, the broadest index available (also the one nobody ever mentions) a rising wedge pattern appears from a May (11,254.87) 2015 top, to a bottom (8937.99) in January 2016, to this week's close at 11,542.69. Though the overall gain from the bottom last January is massive - more than 2100 points), the overall increase from the top in 2015 is fewer than 300 points, a return of less than three percent over a two-year span.
Apparently, this is why no self-serving analyst or financial news commentator ever speaks of the "Comp" in glowing terms because it reveals the truth behind this runaway bull market: that it has been concentrated among a few select stocks, leaving the bulk of issues behind, in much the same manner as wealth is distributed among individuals. Most of the money goes to the top 5%, the rest lag behind.
None of the other indices present such a pattern. They are all higher by double digits over the same period. Thus, the market shows a heavy weight toward highly speculative tech stocks in the NASDAQ, dividend-payers in the DOW, and, naturally, the 500 largest US-based companies (S&P 500).
Breadth being a hidden issue, this central bank campaign of feeding the leaders should continue as we head into what are traditionally the weakest months of trading (i.e., sell in May and go away). Internal squabbling among the FOMC board members may address this issue as the approach to an expected rate hike increase in June quickens.
The Fed has more or less signaled three rate hikes this year, though this second of the proposed three may have to hold off until September, after second quarter GDP and earnings are revealed in the latter half of July and into August. May non-farm employment - which will be announced prior to the FOMC June meeting - will also have significant impact.
After two consecutive down weeks in the S&P, Comp., and Dow, the Fed, and the markets, can ill afford another week of losses, so close attention is warranted. This week may mark a true turning point, if there ever is one to be had.
At the Close, 5/19/17:
Dow: 20,804.84, +141.82 (0.69%)
NASDAQ: 6,083.70, +28.57 (0.47%)
S&P 500: 2,381.73 +16.01 (0.68%)
NYSE Composite: 11,542.69, +108.62 (0.95%)
For the Week:
Dow: -91.77 (-0.44%)
NASDAQ: -37.53 (-0.61%)
S&P 500: -9.17 (-0.38%)
NYSE Composite: -4.57 (-0.04)
Looking especially at the NYSE Composite, the broadest index available (also the one nobody ever mentions) a rising wedge pattern appears from a May (11,254.87) 2015 top, to a bottom (8937.99) in January 2016, to this week's close at 11,542.69. Though the overall gain from the bottom last January is massive - more than 2100 points), the overall increase from the top in 2015 is fewer than 300 points, a return of less than three percent over a two-year span.
Apparently, this is why no self-serving analyst or financial news commentator ever speaks of the "Comp" in glowing terms because it reveals the truth behind this runaway bull market: that it has been concentrated among a few select stocks, leaving the bulk of issues behind, in much the same manner as wealth is distributed among individuals. Most of the money goes to the top 5%, the rest lag behind.
None of the other indices present such a pattern. They are all higher by double digits over the same period. Thus, the market shows a heavy weight toward highly speculative tech stocks in the NASDAQ, dividend-payers in the DOW, and, naturally, the 500 largest US-based companies (S&P 500).
Breadth being a hidden issue, this central bank campaign of feeding the leaders should continue as we head into what are traditionally the weakest months of trading (i.e., sell in May and go away). Internal squabbling among the FOMC board members may address this issue as the approach to an expected rate hike increase in June quickens.
The Fed has more or less signaled three rate hikes this year, though this second of the proposed three may have to hold off until September, after second quarter GDP and earnings are revealed in the latter half of July and into August. May non-farm employment - which will be announced prior to the FOMC June meeting - will also have significant impact.
After two consecutive down weeks in the S&P, Comp., and Dow, the Fed, and the markets, can ill afford another week of losses, so close attention is warranted. This week may mark a true turning point, if there ever is one to be had.
At the Close, 5/19/17:
Dow: 20,804.84, +141.82 (0.69%)
NASDAQ: 6,083.70, +28.57 (0.47%)
S&P 500: 2,381.73 +16.01 (0.68%)
NYSE Composite: 11,542.69, +108.62 (0.95%)
For the Week:
Dow: -91.77 (-0.44%)
NASDAQ: -37.53 (-0.61%)
S&P 500: -9.17 (-0.38%)
NYSE Composite: -4.57 (-0.04)
Thursday, May 18, 2017
The Market as The Matrix; Most People Took The Blue Pill
In case you’re not sure just what a “dead cat bounce” is, imagine taking a dead cat up to the top of a three-story building and dropping it to the ground.
It will bounce, but not much. This is precisely what occurred in US stocks on Thursday, the market getting a reprieve after Wednesday’s bloodbath.
One can try mightily to dissect the various moving parts of the market and arrive at pure conjecture as to what is happening any given day, but these days, reality has become stranger than fiction by massive degrees, even in such hallowed enclaves as financial markets, supposedly not prone to manipulation, fakery, or thievery, but that’s exactly what is on the table.
To say that the Fed, in conjunction with other central banks and their commercial bank proxies, own the market is likely a basic truth. To think that once owned, these players would not mold the narrative and the movement to exactly their liking, is the essence of naivety.
Since 2000, the markets have been owned, even more so since the Great Financial Crisis (GFC) of 2008-09. Based on fiat money and dictates from money printers, the stock markets are the complete tool of enslavement. Governments, pensions, retirement funds, school districts, and all other manner of group investment are tied to “the market,” controlled by the Fed to never stop climbing, lest the debt-slavery of the American public become known.
If markets collapse, so to the deep state system of inflation and skimming, so don’t count on anything changing soon, President Trump or no President Trump, which is exactly why the deep state and the current residents of congress so oppose Mr/ Trump’s every move. He’s a threat to their control of the system.
It’s right out of the film, “The Matrix.” Most people took the blue pill.
Here's a short clip of Laurence Fishburne (Morpheus) explaining the Matrix to Keanu Reeves (Neo).
At The Close, 5/18/17:
Dow: 20,663.02, +56.09 (0.27%)
NASDAQ: 6,055.13, +43.89 (0.73%)
S&P 500: 2,365.72, +8.69 (0.37%)
NYSE Composite: 11,434.06, +10.53 (0.09%)
It will bounce, but not much. This is precisely what occurred in US stocks on Thursday, the market getting a reprieve after Wednesday’s bloodbath.
One can try mightily to dissect the various moving parts of the market and arrive at pure conjecture as to what is happening any given day, but these days, reality has become stranger than fiction by massive degrees, even in such hallowed enclaves as financial markets, supposedly not prone to manipulation, fakery, or thievery, but that’s exactly what is on the table.
To say that the Fed, in conjunction with other central banks and their commercial bank proxies, own the market is likely a basic truth. To think that once owned, these players would not mold the narrative and the movement to exactly their liking, is the essence of naivety.
Since 2000, the markets have been owned, even more so since the Great Financial Crisis (GFC) of 2008-09. Based on fiat money and dictates from money printers, the stock markets are the complete tool of enslavement. Governments, pensions, retirement funds, school districts, and all other manner of group investment are tied to “the market,” controlled by the Fed to never stop climbing, lest the debt-slavery of the American public become known.
If markets collapse, so to the deep state system of inflation and skimming, so don’t count on anything changing soon, President Trump or no President Trump, which is exactly why the deep state and the current residents of congress so oppose Mr/ Trump’s every move. He’s a threat to their control of the system.
It’s right out of the film, “The Matrix.” Most people took the blue pill.
Here's a short clip of Laurence Fishburne (Morpheus) explaining the Matrix to Keanu Reeves (Neo).
At The Close, 5/18/17:
Dow: 20,663.02, +56.09 (0.27%)
NASDAQ: 6,055.13, +43.89 (0.73%)
S&P 500: 2,365.72, +8.69 (0.37%)
NYSE Composite: 11,434.06, +10.53 (0.09%)
Wednesday, May 17, 2017
Wall Street Tumbles Most This Year; Treasuries, Gold Rally
Sure enough, being the contrary indicator for which Money Daily has become legendary, as soon as this blog issued the "all clear," circa the past two days - citing that the Fed has Wall Street's back - then the bottom falls completely out of the market.
While today's massive declines could be nothing more than a case of jitters over the Washington establishment's fixation on making President Trump's life a living hell, or, a simple matter of profit taking, there's some indication that both may be partially true.
As usual, with everything related to stocks and finance since roughly the year 2000, there's insufficient information upon which to make a decisive call. One day's worth of declines by no means indicates anything fundamentally wrong, and it's likely that this current bout of market indigestion will blow over with the next data release.
Moreover, given that the mainstream media is chock full of creeps, fabricators and liars, it wouldn't be beyond the pale for financial media to be right in the middle of the "fake news" mix. To the point, the headline on Yahoo Finance at today's market close screams, "Stocks tumble as Trump worries Wall Street," as if it's the President himself causing consternation among international financiers, when in fact, it is the news media itself promulgating questionable narratives surrounding the President and his administration.
Thus, there may be something more compelling afoot. Perhaps some of the more recent data releases haven't been particularly rosy, or maybe somebody deep inside the global financial establishment knows something of which the general public isn't keenly aware. That insiders would know more than the public is undeniably true; whether or not there's something big about to occur - and this was just cover for a deeper dive - is a matter of great conjecture.
On the surface, that doesn't seem to be the case. Tuesday's releases showed that capacity utilization and industrial production both beat expectations, but housing starts and building permits missed the mark. Wednesday's release of crude inventories (a drawdown) and mortgage applications (off by 4.1%) shouldn't have catalyzed the market into this kind of paroxysm.
What we do know is that the dollar index (97.456) fell again today (fifth straight decline) and has been below 100 for a full month. That's sent gold soaring (up nearly two percent today), with silver tagging along, though without as much gusto (+0.73%, 16.87/oz.). A falling dollar should be good for US companies, though that correlation hasn't always held true, because US imports in other countries' currencies would cost less.
We also know that today's losses were the worst of the year for the major indices and Treasuries were rallying, with the 10-year yield falling to 2.22% and the two-year moving down to 1.24%.
Thus, the crystal ball remains cloudy. Thursday's market action may be more telling. It's never too late to take a profit, nor is it ever too early to cut losses. Maybe Wall Street has come to its senses.
At the Close, 5/17/17:
Dow: 20,606.93, -372.82 (-1.78%)
NASDAQ: 6,011.24, -158.63 (-2.57%)
S&P 500: 2,357.03, -43.64 (-1.82%)
NYSE Composite: 11,423.54, -182.95 (-1.58%)
While today's massive declines could be nothing more than a case of jitters over the Washington establishment's fixation on making President Trump's life a living hell, or, a simple matter of profit taking, there's some indication that both may be partially true.
As usual, with everything related to stocks and finance since roughly the year 2000, there's insufficient information upon which to make a decisive call. One day's worth of declines by no means indicates anything fundamentally wrong, and it's likely that this current bout of market indigestion will blow over with the next data release.
Moreover, given that the mainstream media is chock full of creeps, fabricators and liars, it wouldn't be beyond the pale for financial media to be right in the middle of the "fake news" mix. To the point, the headline on Yahoo Finance at today's market close screams, "Stocks tumble as Trump worries Wall Street," as if it's the President himself causing consternation among international financiers, when in fact, it is the news media itself promulgating questionable narratives surrounding the President and his administration.
Thus, there may be something more compelling afoot. Perhaps some of the more recent data releases haven't been particularly rosy, or maybe somebody deep inside the global financial establishment knows something of which the general public isn't keenly aware. That insiders would know more than the public is undeniably true; whether or not there's something big about to occur - and this was just cover for a deeper dive - is a matter of great conjecture.
On the surface, that doesn't seem to be the case. Tuesday's releases showed that capacity utilization and industrial production both beat expectations, but housing starts and building permits missed the mark. Wednesday's release of crude inventories (a drawdown) and mortgage applications (off by 4.1%) shouldn't have catalyzed the market into this kind of paroxysm.
What we do know is that the dollar index (97.456) fell again today (fifth straight decline) and has been below 100 for a full month. That's sent gold soaring (up nearly two percent today), with silver tagging along, though without as much gusto (+0.73%, 16.87/oz.). A falling dollar should be good for US companies, though that correlation hasn't always held true, because US imports in other countries' currencies would cost less.
We also know that today's losses were the worst of the year for the major indices and Treasuries were rallying, with the 10-year yield falling to 2.22% and the two-year moving down to 1.24%.
Thus, the crystal ball remains cloudy. Thursday's market action may be more telling. It's never too late to take a profit, nor is it ever too early to cut losses. Maybe Wall Street has come to its senses.
At the Close, 5/17/17:
Dow: 20,606.93, -372.82 (-1.78%)
NASDAQ: 6,011.24, -158.63 (-2.57%)
S&P 500: 2,357.03, -43.64 (-1.82%)
NYSE Composite: 11,423.54, -182.95 (-1.58%)
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