Just when you thought trading volume could not possibly get any lower, along comes the Easter Bunny, leaving along his trail melted chocolate and some mysterious objects that look like little raisins.
And he littered these all over Wall Street, apparently, because on the day after the holy holiday, traders were seemingly not in much of a mood for anything. The range on the Dow was disturbing - a mere 60 points from top to bottom, and the most-widely-watched index in the world registered another loss, breaking a string of four straight session gains.
The NASDAQ was the only index to finish on a positive note, though the gains were negligible.
The stark reality of a dormant US and global economy and the coming end to the Fed's generosity, with QE2 supposedly finished sometime in June, may have marked a final turning point for the markets. Stock values are stretched thin, all of the indices are at or near two-year highs and there's little catalyst besides momentum stocks like Apple and Netflix. It's almost impossible to predict anything other than a sullen summer downturn ahead, driven largely by the fiasco in Washington over raising the debt ceiling and the upcoming 2012 budget battle.
With that, investors and traders left the floor today on the low volume point of 2011. Trading could likely have been handled by three accountants with pencils, abacus and ledgers rather than the monstrous computer banks allocated to handle what used to be "the usual" flow.
Dow 12,479.88, -26.11 (0.21%)
NASDAQ 2,825.88, +5.72 (0.20%)
S&P 500 1,335.25, -2.13 (0.16%)
NYSE Composite 8,485.25, -19.11 (0.22%)
Decliners outweighed advancing issues, 3556-2998. On the NASDAQ, new highs topped new lows, 122-21, while on the NYSE, there were 212 new highs and a mere 20 new lows recorded. As mentioned above, there simply was no volume.
NASDAQ Volume 1,486,734,000.00
NYSE Volume 3,223,292,250
Energy traders shared the disinterest with their equity brethren, pushing the price of crude oil down a whole penny, to $112.28. Precious metals were an entirely different story, though, as gold reached a high of $1519.30, before being smashed down, but still finishing with a win, up $5.30, to $1,509.10 at the close. Silver followed a similar flight path, nearly braking the $50 barrier, at $49.85 before pulling back to close at $47.15, still a gain of $1.09 over Friday's close.
That the metals are about to run away from the rest of the commodity picture should come as no surprise as the current state of affairs in all things concerning fiat money are looking mighty suspect, as they have for the past two years. There will certainly be another blow-up crisis of some kind, though the "experts" in charge of killing the middle class hope against reality that this one will not be as severe as 2008, because the system - and the people - will not contend with it.
We are closing in quickly on what may be the last days of the great nations and their experiments in fiat money not backed by anything, centralized planning and their dual Ponzi schemes of finance and pension funding. The stage has been set by the Fed bingeing at the free money tap; all that's needed to tip the entire global system over is a nudge from some disgruntled citizens in France, the UK, Germany or the US, maybe even China. That nudge may be in the form of gas prices over $4.00 a gallon, though it would seem that $5.00 is the tipping point at which people abandon their vehicles and head for the nearest bastion of government authority, torches and pitchforks in hands.
It's coming, and very well-deserved.
Monday, April 25, 2011
Thursday, April 21, 2011
Stocks at Highs on POMO Momo; Silver Even Better
The melt-up continues in equities as the dollar continues deteriorating, losing another 0.39% on the day, dipping to post-Lehman crash (fall 2008) level at 74.09 after briefly crossing below 74.
We're witnessing a rather non-virtuous cycle here which is roughly 200 Dow points for every percentage decline on the DXY, so, if what's intended is the Dow above 13,000, expect another 2.5% decline in the value of the good, old greenback. Also expect a similar rise in the cost of everything you need to buy from outside the US, i.e., imports, which would include almost everything, and especially everything sold in any Wal-Mart store, the nation's largest retailer.
So, good news on Wall Street translates into generally bad news for the public American, except that 5, 10, 20 or 30 years from now, that money you keep pumping into your 401k or retirement plan is just going to be a mountain of cash! Unfortunately, by that time - if the market hasn't already crashed or you haven't already kicked the bucket, everything will cost enormously more than it does today, except, of course, your home, which continues to fall in value.
Stocks got an able assist from both the declining dollar and Uncle Benji, who delivered another $1.5 billion in free cash flow for the Primary Dealers on Wednesday, so there might have been just a little overhang, since settlement was today.
Of course, the markets would normally have been lower considering the economic news. The weekly new unemployment claims came in at 403,000, well above estimates (bad!), and the Philadelphia Fed's monthly Business Outlook Survey took a tumble in April to 18.5, from 43.4 in March (very bad!)
Not to worry, the maestros of our destruction are taking Good Friday off to pray for all of us. HAHAHAHA!
Dow 12,505.99, +52.45 (0.42%)
NASDAQ 2,820.16, +17.65 (0.63%)
S&P 500 1,337.38, +7.02 (0.53%)
NYSE Composite 8,504.36, +46.71 (0.55%)
As expected, advancing issues outnumbered decliners, 4214-2301. NASDAQ new highs: 143; new lows: 20. NYSE new highs: 224; new lows: 10. Volume was an absolute embarrassment, making all other data virtually meaningless. The only traders are computers whirring at the big brokerages and a few hedge funds which are allowed to play. Individual investors have been permanently spooked out of the Ponzi-style, POMO-driven US stock market.
NASDAQ Volume 1,856,856,375
NYSE Volume 3,947,026,500
Crude oil futures gained 84 cents, to $112.29. Yes, if gas isn't $4.00 a gallon where you live, it soon will be, and $5.00 in California, New York, Chicago and Hawaii are soon to come.
Gold finally closed above $1500 on the COMEX, hitting $1,503.80, a gain on the day of $4.80. Silver was up more than 4.5%, gaining $1.60, to close at another 31-year high of $46.06. Unbelievable! Silver is up 145% in just the last year and is likely to double again within two years, if not sooner.
Happy Easter!
We're witnessing a rather non-virtuous cycle here which is roughly 200 Dow points for every percentage decline on the DXY, so, if what's intended is the Dow above 13,000, expect another 2.5% decline in the value of the good, old greenback. Also expect a similar rise in the cost of everything you need to buy from outside the US, i.e., imports, which would include almost everything, and especially everything sold in any Wal-Mart store, the nation's largest retailer.
So, good news on Wall Street translates into generally bad news for the public American, except that 5, 10, 20 or 30 years from now, that money you keep pumping into your 401k or retirement plan is just going to be a mountain of cash! Unfortunately, by that time - if the market hasn't already crashed or you haven't already kicked the bucket, everything will cost enormously more than it does today, except, of course, your home, which continues to fall in value.
Stocks got an able assist from both the declining dollar and Uncle Benji, who delivered another $1.5 billion in free cash flow for the Primary Dealers on Wednesday, so there might have been just a little overhang, since settlement was today.
Of course, the markets would normally have been lower considering the economic news. The weekly new unemployment claims came in at 403,000, well above estimates (bad!), and the Philadelphia Fed's monthly Business Outlook Survey took a tumble in April to 18.5, from 43.4 in March (very bad!)
Not to worry, the maestros of our destruction are taking Good Friday off to pray for all of us. HAHAHAHA!
Dow 12,505.99, +52.45 (0.42%)
NASDAQ 2,820.16, +17.65 (0.63%)
S&P 500 1,337.38, +7.02 (0.53%)
NYSE Composite 8,504.36, +46.71 (0.55%)
As expected, advancing issues outnumbered decliners, 4214-2301. NASDAQ new highs: 143; new lows: 20. NYSE new highs: 224; new lows: 10. Volume was an absolute embarrassment, making all other data virtually meaningless. The only traders are computers whirring at the big brokerages and a few hedge funds which are allowed to play. Individual investors have been permanently spooked out of the Ponzi-style, POMO-driven US stock market.
NASDAQ Volume 1,856,856,375
NYSE Volume 3,947,026,500
Crude oil futures gained 84 cents, to $112.29. Yes, if gas isn't $4.00 a gallon where you live, it soon will be, and $5.00 in California, New York, Chicago and Hawaii are soon to come.
Gold finally closed above $1500 on the COMEX, hitting $1,503.80, a gain on the day of $4.80. Silver was up more than 4.5%, gaining $1.60, to close at another 31-year high of $46.06. Unbelievable! Silver is up 145% in just the last year and is likely to double again within two years, if not sooner.
Happy Easter!
Wednesday, April 20, 2011
Buy More Stocks Because the Dollar is Worthless
If anyone has any kind of notion that today's massive uptick in stocks had anything to do with the strength of the US economy, they'd better go back to economics 101 and check the chapter on currency devaluation.
Oh, there is no chapter on that? Well, allow me to explain how the dollar was absolutely savaged by - of all things - the Euro, and a host of other currencies including, but not limited to: the Aussie dollar, the Canadian looney, the Chinese Yuan and especially, the Swiss Franc.
On the dollar index (not a particularly great way to value US paper money, but sufficient for this discussion), the loss was 74 cents, or nearly one percent, meaning everything you buy that isn't produced in the United States - which is just about everything - costs 1% more today than it did yesterday. The corresponding rise in stocks only helps alleviate the pain for the richy-rich amongst us, but they usually find tax dodges or off-shore accounts for their hordes of cash anyhow.
The rest of you schmucks are just going to have to take it, see? You pay more so the Fed can print more billions, give them to the primary dealers and allow the government to continue overspending until eternity, which is a long, long, time. Next week, it will likely get worse, with gas heading for $5.00 a gallon nationally, and everything else going up accordingly, eventually, the average household will be able to buy food and fuel and little else, all the while watching those who own stocks make fortunes.
While the wizards of Wall Street frolic in the fields of greenbacks, you and I will be left holding the bag, containing manure, and be taxed into oblivion. Don't worry about Medicare and Social Security, most of us will die off before any benefits are actually paid out.
It's an ugly, severely evil set-up by the banks and our hands-out congress to create two distinct classes in the United States: the super, super rich and everyone else. You and I must learn how to raise our own crops and subsist off the land leased by our wealthy masters. Welcome to the golden age of feudalism!
I have nothing more to add except that if you haven't started some plants growing in your back yard and already own some silver or gold or both, you need to do so immediately, as time is running short and planting season is upon us. We are nearing the point of complete collapse of the middle class.
If your kids are planning to go to a big university and go into hock to the tune of $40, $50 or as much as $100,000 to get their degree, it might be time to sit them down and explain that their high school diploma will be sufficient, in their bleak future, to work as a mechanic, a gardener, or a chamber maid. Their dreams of becoming the next great biologist or astronaut will have to be put on indefinite hold.
Dow 12,453.54, +186.79 (1.52%)
NASDAQ 2,802.51, +57.54 (2.10%)
S&P 500 1,330.36, +17.74 (1.35%)
NYSE Composite 8,457.65, +125.62 (1.51%)
Advancing issues pounded decliners, 5245-1347. There were 133 new highs and 29 new lows. On the NYSE, 193 new highs and 16 new lows was the order of the day. Volume was relatively solid on the NASDAQ, where all the momentum stocks reside, but the usual miserable figures were posted on the NYSE. Almost all of the day's gains were made at the open, so the futures players made fortunes; the rest of the session was nothing more than churning.
NASDAQ Volume 2,112,464,250
NYSE Volume 4,657,346,000
Crude oil made a huge move of nearly 3%, gaining $3.17, to $111.45, making that $5.00 gallon of gas that the oil barons dream about that much closer to reality. Gold blasted through the $1500 mark again, but was taken down to $1,498.90, a gain of a mere $3.80. Silver continues to dazzle, gaining another 54 cents on the day, finishing in New York at $44.46.
While some argue that gold and silver are bubbles, if that is the case, then what is to be said of stocks, which have doubled off their March 2009 lows? Gold and silver are only a third to a fifth of the way to where they are eventually going. With every new dollar printed by the Chairman of the Fed, Ben Bernanke, an ounce of precious metals costs a little bit more, and that's about the only good news I can report today.
EDIT: Following the COMEX close in New York, gold bounced to $1502.10, and silver shot up to $45.22 an ounce at 5:18 pm EDT.
Oh, there is no chapter on that? Well, allow me to explain how the dollar was absolutely savaged by - of all things - the Euro, and a host of other currencies including, but not limited to: the Aussie dollar, the Canadian looney, the Chinese Yuan and especially, the Swiss Franc.
On the dollar index (not a particularly great way to value US paper money, but sufficient for this discussion), the loss was 74 cents, or nearly one percent, meaning everything you buy that isn't produced in the United States - which is just about everything - costs 1% more today than it did yesterday. The corresponding rise in stocks only helps alleviate the pain for the richy-rich amongst us, but they usually find tax dodges or off-shore accounts for their hordes of cash anyhow.
The rest of you schmucks are just going to have to take it, see? You pay more so the Fed can print more billions, give them to the primary dealers and allow the government to continue overspending until eternity, which is a long, long, time. Next week, it will likely get worse, with gas heading for $5.00 a gallon nationally, and everything else going up accordingly, eventually, the average household will be able to buy food and fuel and little else, all the while watching those who own stocks make fortunes.
While the wizards of Wall Street frolic in the fields of greenbacks, you and I will be left holding the bag, containing manure, and be taxed into oblivion. Don't worry about Medicare and Social Security, most of us will die off before any benefits are actually paid out.
It's an ugly, severely evil set-up by the banks and our hands-out congress to create two distinct classes in the United States: the super, super rich and everyone else. You and I must learn how to raise our own crops and subsist off the land leased by our wealthy masters. Welcome to the golden age of feudalism!
I have nothing more to add except that if you haven't started some plants growing in your back yard and already own some silver or gold or both, you need to do so immediately, as time is running short and planting season is upon us. We are nearing the point of complete collapse of the middle class.
If your kids are planning to go to a big university and go into hock to the tune of $40, $50 or as much as $100,000 to get their degree, it might be time to sit them down and explain that their high school diploma will be sufficient, in their bleak future, to work as a mechanic, a gardener, or a chamber maid. Their dreams of becoming the next great biologist or astronaut will have to be put on indefinite hold.
Dow 12,453.54, +186.79 (1.52%)
NASDAQ 2,802.51, +57.54 (2.10%)
S&P 500 1,330.36, +17.74 (1.35%)
NYSE Composite 8,457.65, +125.62 (1.51%)
Advancing issues pounded decliners, 5245-1347. There were 133 new highs and 29 new lows. On the NYSE, 193 new highs and 16 new lows was the order of the day. Volume was relatively solid on the NASDAQ, where all the momentum stocks reside, but the usual miserable figures were posted on the NYSE. Almost all of the day's gains were made at the open, so the futures players made fortunes; the rest of the session was nothing more than churning.
NASDAQ Volume 2,112,464,250
NYSE Volume 4,657,346,000
Crude oil made a huge move of nearly 3%, gaining $3.17, to $111.45, making that $5.00 gallon of gas that the oil barons dream about that much closer to reality. Gold blasted through the $1500 mark again, but was taken down to $1,498.90, a gain of a mere $3.80. Silver continues to dazzle, gaining another 54 cents on the day, finishing in New York at $44.46.
While some argue that gold and silver are bubbles, if that is the case, then what is to be said of stocks, which have doubled off their March 2009 lows? Gold and silver are only a third to a fifth of the way to where they are eventually going. With every new dollar printed by the Chairman of the Fed, Ben Bernanke, an ounce of precious metals costs a little bit more, and that's about the only good news I can report today.
EDIT: Following the COMEX close in New York, gold bounced to $1502.10, and silver shot up to $45.22 an ounce at 5:18 pm EDT.
Tuesday, April 19, 2011
Market Up on Goldman Beat, POMO Momo
Remember that little bit about S&P downgrading their US outlook to negative?
Oh, that was so yesterday!
Tim Geithner, the US Secretary of the Treasury, went on CNBC to convince (or try to) th public that all is well, S&P doesn't know jack and the future will be bright.
Just before that Goldman Sachs announced their 1st quarter results, beat the street and it was off to the races at 9:30 am when the bell rang.
Well, not quite. Stocks really didn't start moving higher until a little after noon. As usual, there was no reason, and no volume, so it didn't really matter that Goldman Sachs was selling off.
The Fed came in with a $6 billion POMO to invest, so away went the market. Up, up and away. Forget about those ratings agencies. What do they know?
Dow 12,266.75, +65.16 (0.53%)
NASDAQ 2,744.97, +9.59 (0.35%)
S&P 500 1,312.62, +7.48 (0.57%)
NYSE Composite 8,332.03, +54.92 (0.66%)
Winners beat losers, 3977-2526, NASDAQ new highs were 66, new lows, 32. On the NYSE, there were 58 new highs; 25 new lows. Volume? No. Dismal, horrible, Wall Street's dirty little secret.
NASDAQ Volume 1,723,697,750
NYSE Volume 4,228,962,500
WTI crude futures were up another $1.03, to $108.15. The corresponding rise in retail gas prices from $100+ per barrel oil is almost certain to derail any kind of growth for the second quarter.
Gold briefly topped $1500 for the first time ever, but pulled back from that and closed $2.10 higher, at $1,495.10. Silver (thank God you own some) continued to soar, up another 97 cents, to $43.91. Again, gold set another all-time high, silver a 31-year high, and is rapidly approaching the all-time high of $50, which it will surpass, almost for certain, within the next three months time.
It was a Tuesday. Nothing much happened in the larger scheme of things. Next Thursday, we'll see some fireworks when the government announces its first estimate of first quarter GDP, which, if you've been paying attention, was supposed to be 4%, then 3.5%, but has recently been revised down to 2%. It will likely come in below even that.
Tomorrow, existing home sales data for March, another reminder that a house is not an investment, it is a place to live, at 10:00 am EDT.
Oh, that was so yesterday!
Tim Geithner, the US Secretary of the Treasury, went on CNBC to convince (or try to) th public that all is well, S&P doesn't know jack and the future will be bright.
Just before that Goldman Sachs announced their 1st quarter results, beat the street and it was off to the races at 9:30 am when the bell rang.
Well, not quite. Stocks really didn't start moving higher until a little after noon. As usual, there was no reason, and no volume, so it didn't really matter that Goldman Sachs was selling off.
The Fed came in with a $6 billion POMO to invest, so away went the market. Up, up and away. Forget about those ratings agencies. What do they know?
Dow 12,266.75, +65.16 (0.53%)
NASDAQ 2,744.97, +9.59 (0.35%)
S&P 500 1,312.62, +7.48 (0.57%)
NYSE Composite 8,332.03, +54.92 (0.66%)
Winners beat losers, 3977-2526, NASDAQ new highs were 66, new lows, 32. On the NYSE, there were 58 new highs; 25 new lows. Volume? No. Dismal, horrible, Wall Street's dirty little secret.
NASDAQ Volume 1,723,697,750
NYSE Volume 4,228,962,500
WTI crude futures were up another $1.03, to $108.15. The corresponding rise in retail gas prices from $100+ per barrel oil is almost certain to derail any kind of growth for the second quarter.
Gold briefly topped $1500 for the first time ever, but pulled back from that and closed $2.10 higher, at $1,495.10. Silver (thank God you own some) continued to soar, up another 97 cents, to $43.91. Again, gold set another all-time high, silver a 31-year high, and is rapidly approaching the all-time high of $50, which it will surpass, almost for certain, within the next three months time.
It was a Tuesday. Nothing much happened in the larger scheme of things. Next Thursday, we'll see some fireworks when the government announces its first estimate of first quarter GDP, which, if you've been paying attention, was supposed to be 4%, then 3.5%, but has recently been revised down to 2%. It will likely come in below even that.
Tomorrow, existing home sales data for March, another reminder that a house is not an investment, it is a place to live, at 10:00 am EDT.
Monday, April 18, 2011
S&P Shocks Markets, Downgrades US Outlook to Negative
Us markets barely shrugged when Japan's nuclear reactors exploded, Egypt's government was overthrown, Ireland and Portugal needed bailouts and the entire nation of Libya was turned upside down in a violent civil war.
But it was something not destructive, threatening or otherwise physically damaging - a downgrade of the economic outlook from neutral to negative for the United States from ratings agency Standard & Poors (S&P) - that caught everyone's attention on Wall Street and in Washington.
The agency - the very same one which rated hundreds of mortgage-backed securities (MBS) as AAA when they clearly were not - verified what practically everyone on the planet already knew: that the USA was spending well beyond its means and that the federal government needs to fix its financial affairs in short order.
While shying away from actually downgrading the rating, the outlook downgrade comes as a kind of warning to politicians on both sides of the aisle. S&P is concerned that long-term high deficits could lead to dire consequences if not reined in soon. Concerned that Democrats and Republicans will be unable to come to terms with glaring deficits and reach a spending and revenue compromise, S&P said, "The negative outlook on our rating on the U.S. sovereign signals that we believe there is at least a one-in-three likelihood that we could lower our long-term rating on the U.S. within two years."
An actual ratings cut could impact the government spending and borrowing programs in a nyriad of ways, making new and old debt alike more expensive to service due to higher interest rates.
Of course, the United States is not just any country. It still enjoys the best rating possible AAA on long term debt and A-1+ on short term borrowings. Nonetheless, Wall Street stood up and took notice, with across-the-board selling right from the opening bell.
The Dow was down as much as 247 points early on, but managed to pull itself higher in the afternoon, shaving off 2/5ths of the decline.
Dow 12,201.59, -140.24 (1.14%)
NASDAQ 2,735.38, -29.27 (1.06%)
S&P 500 1,305.14, -14.54 (1.10%)
NYSE Composite 8,277.11, -123.20 (1.47%)
Declining issues soared over gainers, 5219-1370. New lows exceeded new highs on the NASDAQ, 50-42, and rolled over on the NYSE as well, with 30 new lows and just 22 new highs. Volume was not impressive, though overall breadth was somewhat stunning, with all sectors ending in the red, led by energy, capital goods, basic materials and financials.
The lack of volume is more ominous than it may appear at first glance, significant in that not all investors took this warning seriously and continue to not only hold stocks, but were buying in the afternoon. With the Fed's QE2 program drawing to a close in just two months time, a tough fight for certain in Washington over raising the debt ceiling and the 2012 budget and an economy still not flourishing a full two years after the banking crisis, there are more than enough potential causes for a rapid - and lasting - decline in stocks.
NASDAQ Volume 1,817,444,625
NYSE Volume 5,013,312,500
Besides the potential S&P downgrade, corporate earnings thus far have been short on results. Bank of America's miss on Friday was widely overlooked, but today after the bell, Texas Instruments (TI) also missed, and revised 2nd quarter estimates. Before the bell tomorrow, Goldman Sachs (GS) is due to announce their results for the first quarter, which, if all goes according to plan for the company that supposes to be doing "God's work," then this downdraft will be quickly forgotten and a new era of prosperity proclaimed.
That's another bet on which we're not taking sides.
Once again, commodities and the consumer were the winners of the day as crude oil slipped $2.54, to $107.12 at the NYMEX close, while gold flirted with the $1500 mark, closing the day at $1,492.90, a gain of $6.90. Silver continued to set new 31-year highs, finishing at 42.96, on a gain of 39 cents, though it was well above the $43 mark through most of the day.
In what had to be the least-appreciated news item of the day, Saudi Arabia cut its oil production by 800,000 barrels a day due to - get this - oversupply.
Now, if only somebody can explain to the millions of drivers worldwide just how that supply-demand dynamic works again maybe we can eliminate some of the obvious gouging that's gone on over the past two months. If the Saudis are cutting production due to oversupply, then oil should be more like $40 a barrel, not over $100, and gas should be a heck of a lot closer to $2.00 a gallon than it is to $4.00.
Trust nobody. It's obvious that our own government could care less about the general welfare of its own people. And for those who paid their income taxes today, too bad, because you just threw your money right down the memory hole.
What's in store from here is anybody's guess, but you can count on a number of things: the politicians will continue to bicker and fight like little girls and accomplish next to nothing; the bankers will continue to evade prosecution for their frauds and receive bigger bonuses; and the American people - sheep that they are - will not protest but will still want their iPads, food stamps and football.
But it was something not destructive, threatening or otherwise physically damaging - a downgrade of the economic outlook from neutral to negative for the United States from ratings agency Standard & Poors (S&P) - that caught everyone's attention on Wall Street and in Washington.
The agency - the very same one which rated hundreds of mortgage-backed securities (MBS) as AAA when they clearly were not - verified what practically everyone on the planet already knew: that the USA was spending well beyond its means and that the federal government needs to fix its financial affairs in short order.
While shying away from actually downgrading the rating, the outlook downgrade comes as a kind of warning to politicians on both sides of the aisle. S&P is concerned that long-term high deficits could lead to dire consequences if not reined in soon. Concerned that Democrats and Republicans will be unable to come to terms with glaring deficits and reach a spending and revenue compromise, S&P said, "The negative outlook on our rating on the U.S. sovereign signals that we believe there is at least a one-in-three likelihood that we could lower our long-term rating on the U.S. within two years."
An actual ratings cut could impact the government spending and borrowing programs in a nyriad of ways, making new and old debt alike more expensive to service due to higher interest rates.
Of course, the United States is not just any country. It still enjoys the best rating possible AAA on long term debt and A-1+ on short term borrowings. Nonetheless, Wall Street stood up and took notice, with across-the-board selling right from the opening bell.
The Dow was down as much as 247 points early on, but managed to pull itself higher in the afternoon, shaving off 2/5ths of the decline.
Dow 12,201.59, -140.24 (1.14%)
NASDAQ 2,735.38, -29.27 (1.06%)
S&P 500 1,305.14, -14.54 (1.10%)
NYSE Composite 8,277.11, -123.20 (1.47%)
Declining issues soared over gainers, 5219-1370. New lows exceeded new highs on the NASDAQ, 50-42, and rolled over on the NYSE as well, with 30 new lows and just 22 new highs. Volume was not impressive, though overall breadth was somewhat stunning, with all sectors ending in the red, led by energy, capital goods, basic materials and financials.
The lack of volume is more ominous than it may appear at first glance, significant in that not all investors took this warning seriously and continue to not only hold stocks, but were buying in the afternoon. With the Fed's QE2 program drawing to a close in just two months time, a tough fight for certain in Washington over raising the debt ceiling and the 2012 budget and an economy still not flourishing a full two years after the banking crisis, there are more than enough potential causes for a rapid - and lasting - decline in stocks.
NASDAQ Volume 1,817,444,625
NYSE Volume 5,013,312,500
Besides the potential S&P downgrade, corporate earnings thus far have been short on results. Bank of America's miss on Friday was widely overlooked, but today after the bell, Texas Instruments (TI) also missed, and revised 2nd quarter estimates. Before the bell tomorrow, Goldman Sachs (GS) is due to announce their results for the first quarter, which, if all goes according to plan for the company that supposes to be doing "God's work," then this downdraft will be quickly forgotten and a new era of prosperity proclaimed.
That's another bet on which we're not taking sides.
Once again, commodities and the consumer were the winners of the day as crude oil slipped $2.54, to $107.12 at the NYMEX close, while gold flirted with the $1500 mark, closing the day at $1,492.90, a gain of $6.90. Silver continued to set new 31-year highs, finishing at 42.96, on a gain of 39 cents, though it was well above the $43 mark through most of the day.
In what had to be the least-appreciated news item of the day, Saudi Arabia cut its oil production by 800,000 barrels a day due to - get this - oversupply.
Now, if only somebody can explain to the millions of drivers worldwide just how that supply-demand dynamic works again maybe we can eliminate some of the obvious gouging that's gone on over the past two months. If the Saudis are cutting production due to oversupply, then oil should be more like $40 a barrel, not over $100, and gas should be a heck of a lot closer to $2.00 a gallon than it is to $4.00.
Trust nobody. It's obvious that our own government could care less about the general welfare of its own people. And for those who paid their income taxes today, too bad, because you just threw your money right down the memory hole.
What's in store from here is anybody's guess, but you can count on a number of things: the politicians will continue to bicker and fight like little girls and accomplish next to nothing; the bankers will continue to evade prosecution for their frauds and receive bigger bonuses; and the American people - sheep that they are - will not protest but will still want their iPads, food stamps and football.
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