What a week for stocks!
Following Friday's 8:30 am ET release of January's non-farm payroll data - which showed a net gain of 257,000 jobs and the "official" unemployment rate dropping to 8.3% - stocks took off at the open and never looked back, with the major indices closing at or near 3 1/2-year highs. In fact, the NASDAQ closed at an 11-year high, dating back to the collapsing side of the dotcom bust.
While the Wall Street crowd saw reason to celebrate the headline number, drilling down into the data revealed some troubling, ongoing trends, not the least of which was the continuous and sharp decline in the labor force participation rate, otherwise known as the number of people in the labor market. That number, which has been falling since 2000, is now at a 30-year low. The federal government may want its citizens to believe labor conditions are improving, but the truth is that the number of people in America who actually work for a living has been shrinking for the last 11 years.
Meanwhile, out in the blogosphere (where the heck is Keith Olbermann, anyhow?) the big push up in employment and down in the unemployment number, along with growing distrust of all government-manufactured data, was cause for much debate and rancor. The best commentary and focus was provided by Zero Hedge, which is usually in the lead when it comes to dissecting government data designed to offer "hope and change."
Here are the best stories on what appears to be well-manufactured (read: total BS) non-farm payroll number:
Record 1.2 Million People Fall Out Of Labor Force In One Month, Labor Force Participation Rate Tumbles To Fresh 30 Year Low
Nonfarm Payroll Surge... On Gain From "Low Wage Jobs", Delay In Courier, Messenger Job Drop
Implied Unemployment Rate Rises To 11.5%, Spread To Propaganda Number Surges To 30 Year High
Final Nail In Today's NFP Tragicomedy: Record Surge In Part-Time Workers
and finally...
TrimTabs Explains Why Today's "Very, Very Suspicious" NFP Number Is Really Down 2.9 Million In Past 2 Months
And, unrelated, but still interesting, is this article about states considering alternatives to the US Dollar.
But, possibly the most underreported story of the day came out of New York, where Attorney General Eric Schneiderman filed a lawsuit against some of the biggest banks, and MERS,, alleging mortgage and foreclosure fraud.
So, stock jockeys are having their way, but, as expressed here yesterday, equities are certainly getting pricey, confirmed by today's move into even pricier territory.
It's only money, as they say, and you can't take it with you, though you can leave your debts behind.
Here's a good Super Bowl prediction. Enjoy the game.
Dow 12,862.23, +156.82 (1.23%)
NASDAQ 2,905.66, +45.98 (1.61%)
S&P 500 1,344.90, +19.36 (1.46%)
NYSE Composite 8,060.43, +115.00 (1.45%)
NASDAQ Volume 2,151,960,000
NYSE Volume 4,580,415,500
Combined NYSE & NASDAQ Advance - Decline: 4464-1168
Combined NYSE & NASDAQ New highs - New lows: 561-19
WTI crude oil: 97.84, +1.48
Gold: 1,740.30, -19.00
Silver: 33.75, -0.43
Friday, February 3, 2012
Thursday, February 2, 2012
Dead Market, Catalyst Needed
Editor's Note: apologies for the tardiness of this post (thanks again, Time Warner). Fortunately, there was very little from Wall Street upon which to report.
This is going to be brief.
Stocks hugged the flat line in the aftermath of Wednesday's start of the month failed rally. This general lackluster tone of trading has permeated the US markets for the past few weeks and shows no sign of abating soon, perhaps having something to do with the Fed's Zero Interest Rate Policy (ZIRP, three years running) or the fact that congress can't seem to even try to do anything about the moribund economic conditions.
If these conditions persist, with stocks at or near recent and historic highs, a pullback or correction of between 5-15% should ensue in short order. The first clue will come from tomorrow's non-farm payroll data, fast on the heels of today's initial unemployment claims of 367,000 and the Challenger Job Cuts data which printed at +38.9% (not good).
The volatility index (^VIX) fall below 18 today, so either stocks are going to remain largely range-bound or volatility will spike on some unseen or forgotten problems. One thing upon which there is wide consensus: stocks are getting a little pricey.
Oh, yeah, gold and silver continue to rock. And oil keeps coming down. Bonus!
Dow 12,705.41, -11.05 (0.09%)
NASDAQ 2,859.68, +11.41 (0.40%)
S&P 500 1,325.54, +1.45 (0.11%)
NYSE Composite 7,945.43, +13.98 (0.18%)
NASDAQ Volume 1,921,179,875
NYSE Volume 4,120,919,000
Combined NYSE & NASDAQ Advance - Decline: 3267-2290
Combined NYSE & NASDAQ New highs - New lows: 371-24 (still extreme)
WTI crude oil: 96.36, -1.25
Gold: 1,759.30, +9.80
Silver: 34.18, +0.37
This is going to be brief.
Stocks hugged the flat line in the aftermath of Wednesday's start of the month failed rally. This general lackluster tone of trading has permeated the US markets for the past few weeks and shows no sign of abating soon, perhaps having something to do with the Fed's Zero Interest Rate Policy (ZIRP, three years running) or the fact that congress can't seem to even try to do anything about the moribund economic conditions.
If these conditions persist, with stocks at or near recent and historic highs, a pullback or correction of between 5-15% should ensue in short order. The first clue will come from tomorrow's non-farm payroll data, fast on the heels of today's initial unemployment claims of 367,000 and the Challenger Job Cuts data which printed at +38.9% (not good).
The volatility index (^VIX) fall below 18 today, so either stocks are going to remain largely range-bound or volatility will spike on some unseen or forgotten problems. One thing upon which there is wide consensus: stocks are getting a little pricey.
Oh, yeah, gold and silver continue to rock. And oil keeps coming down. Bonus!
Dow 12,705.41, -11.05 (0.09%)
NASDAQ 2,859.68, +11.41 (0.40%)
S&P 500 1,325.54, +1.45 (0.11%)
NYSE Composite 7,945.43, +13.98 (0.18%)
NASDAQ Volume 1,921,179,875
NYSE Volume 4,120,919,000
Combined NYSE & NASDAQ Advance - Decline: 3267-2290
Combined NYSE & NASDAQ New highs - New lows: 371-24 (still extreme)
WTI crude oil: 96.36, -1.25
Gold: 1,759.30, +9.80
Silver: 34.18, +0.37
Wednesday, February 1, 2012
February Opens with Expected Rally, but the Sizzle Fizzles
Hooray!
Nothing like another gap up at the open and a fizzled rally on the first day of the month.
With all the players flush with cash following the best January since 1997 (shows how horrible the market has been over the past 15 years), there had to be someplace to put all that money to work. Bingo! Let's buy some stocks!
But, let's not get carried away, like last month, when the gains on the first trading day of the month (January 3) was about 2/5ths of the gains for the entire month and after options expiration on Friday, January 20, stocks stalled, ending the month three points lower from that date on the S&P and 87 points lower on the Dow.
The possible excuses catalysts for the meteoric rise at the open and through the early afternoon were various, but hardly worth the triple-digit gains on the Dow (up 151 points at the peak), including the excitement over the imminent IPO of Facebook, the ADP Employment Change (showing 170,000 new private sector jobs in January, below consensus), the 54.1 read on the ISM index (also below expectations) or the "any day now" word from Europe on the Greek debt deal.
No, it was just those crazy Wall Street guys with cash on hand and time to waste that led to the "giddy-up" on the first day of February. Perhaps April Fool's Day was bumped up a couple of months.
What killed the rally was day-trading, as usual, as the smartest guys got the heck out of the way, before American Airlines (AMR) announced that it would lay off 13,000 workers, their pension plans to be likely administered by the Pension Benefit Guaranty Corporation (PBGC), otherwise known as the federal government, AKA, me, you and the rest of working Americans, something that was discussed on this very blog about six years ago.
Yep, this was a swell rally, even though it only lasted about four hours. Prepare for tomorrow's gap down at the open and Friday's slaughter when non-farm payrolls reveal that the birth-death model accounted for about 300,000 phantom jobs created in 2011.
And the president, now known as the landlord-in-chief, announced a broad plan to save the hundreds of thousands of people with underwater mortgages. Too bad Mr. Obama didn't disclose to the cheering throng in Falls Church that his plan has exactly zero chance of passing through congress because it requires the banks to pony up some money to fund these write-downs. The program to rent out already foreclosed-upon homes will move forward, however, bringing the slums directly to a neighborhood near you.
(Personally, I'm still waiting for car dealerships to give away new cars as long as the buyer signs an oath to only buy gas from ExxonMobil. I want a Veloster, or, something like that.)
Happy days!
Dow 12,716.31, +83.40 (0.66%)
NASDAQ 2,848.27, +34.43 (1.22%)
S&P 500 1,324.08, +11.67 (0.89%)
NYSE Composite 7,940.29, +101.81 (1.30%)
NASDAQ Volume 2,046,891,250
NYSE Volume 4,380,622,000
Combined NYSE & NASDAQ Advance - Decline: 4505-1144
Combined NYSE & NASDAQ New highs - New lows: 441-21 (now, that's extreme! Time to sell.)
WTI crude oil: 97.61, -0.87
Gold: 1,749.50, +9.10
Silver: 33.81, +0.55
Nothing like another gap up at the open and a fizzled rally on the first day of the month.
With all the players flush with cash following the best January since 1997 (shows how horrible the market has been over the past 15 years), there had to be someplace to put all that money to work. Bingo! Let's buy some stocks!
But, let's not get carried away, like last month, when the gains on the first trading day of the month (January 3) was about 2/5ths of the gains for the entire month and after options expiration on Friday, January 20, stocks stalled, ending the month three points lower from that date on the S&P and 87 points lower on the Dow.
The possible excuses catalysts for the meteoric rise at the open and through the early afternoon were various, but hardly worth the triple-digit gains on the Dow (up 151 points at the peak), including the excitement over the imminent IPO of Facebook, the ADP Employment Change (showing 170,000 new private sector jobs in January, below consensus), the 54.1 read on the ISM index (also below expectations) or the "any day now" word from Europe on the Greek debt deal.
No, it was just those crazy Wall Street guys with cash on hand and time to waste that led to the "giddy-up" on the first day of February. Perhaps April Fool's Day was bumped up a couple of months.
What killed the rally was day-trading, as usual, as the smartest guys got the heck out of the way, before American Airlines (AMR) announced that it would lay off 13,000 workers, their pension plans to be likely administered by the Pension Benefit Guaranty Corporation (PBGC), otherwise known as the federal government, AKA, me, you and the rest of working Americans, something that was discussed on this very blog about six years ago.
Yep, this was a swell rally, even though it only lasted about four hours. Prepare for tomorrow's gap down at the open and Friday's slaughter when non-farm payrolls reveal that the birth-death model accounted for about 300,000 phantom jobs created in 2011.
And the president, now known as the landlord-in-chief, announced a broad plan to save the hundreds of thousands of people with underwater mortgages. Too bad Mr. Obama didn't disclose to the cheering throng in Falls Church that his plan has exactly zero chance of passing through congress because it requires the banks to pony up some money to fund these write-downs. The program to rent out already foreclosed-upon homes will move forward, however, bringing the slums directly to a neighborhood near you.
(Personally, I'm still waiting for car dealerships to give away new cars as long as the buyer signs an oath to only buy gas from ExxonMobil. I want a Veloster, or, something like that.)
Happy days!
Dow 12,716.31, +83.40 (0.66%)
NASDAQ 2,848.27, +34.43 (1.22%)
S&P 500 1,324.08, +11.67 (0.89%)
NYSE Composite 7,940.29, +101.81 (1.30%)
NASDAQ Volume 2,046,891,250
NYSE Volume 4,380,622,000
Combined NYSE & NASDAQ Advance - Decline: 4505-1144
Combined NYSE & NASDAQ New highs - New lows: 441-21 (now, that's extreme! Time to sell.)
WTI crude oil: 97.61, -0.87
Gold: 1,749.50, +9.10
Silver: 33.81, +0.55
Tuesday, January 31, 2012
Another Great Session for Equity Day-Traders as January Posts Positive
Yesterday, a gap lower at the open. Today, a gap up.
This is all according to plan, which excludes individual investors to the great benefit to those in the know.
Imagine being an insider. On Monday, you buy shares of your particular stocks of the day at the lows of the day, around 10:00 to 10:30 am ET and all day long, you watch as they gain in value. Then, on Tuesday, you sell at some high point right before the dismal Chicago PMI and Conference Board's Consumer Confidence number (more on thses later). Naturally, you ignored the poor showing from the Case-Shiller 20-city index, because nobody cares about housing, right?
You're a winner, in all aspects except for honesty, integrity and fairness. Worry not, because you or your firm made massive money all through the month of January, as the Dow rose 3%, the S&P gained 4% and the NASDAQ was up 8%.
Smashing! Except that gold and silver trounced your paper-made profits. Gold finished the month of January with a 13.9% gain and silver was up 19% for the month. And there's no chance of the metals going to zero and no counter-party risk. Well, golly.
As for that Chicago PMI, the market was looking for a number of 62.8, after December's 62.2 print. The reality was a poor 60.2, the lowest number since August, 2011, another indication that the holiday season in particular was something of an over-hyped bust and that the recovery continues to be choppy and not well-anchored. Bummer!
According to the Conference Board, consumer confidence was measured at 64.8 in December, but flopped to 61.1 in January. Double bummer!
The aforementioned Case-Shiller data, albeit back-dated, showed that home prices fell 3.7% from November 2010 through November 2011. Prices fell 0.7% (adjusted) or 1.3% (unadjusted) in November from October, as 19 of 20 cities experienced price declines. Phoenix was the only city registering a positive figure.
Not to worry. January's window dressing is complete and there's nothing to worry about heading into February... except for that nagging European debt crisis, Greece, the utter collapse in the Baltic Dry Index, and the looming showdown in washington over whether or not to extend the Bush tax cuts another 10 months, as congress, rather than deal with real issues, took the easy route in December and compromised to keep them intact through the end of February (they'll extend, as extending is part of their "extend and pretend" strategy).
No, no, nothing can go wrong. Let's just keep day-trading until...
By the way, volume continues to be dreadful, even though the Fed, through it's ZIRP to infinity policy, has forced fund managers into much more riskier trading scenarios than they normally would endeavor.
You can cite the January Barometer, which posits that "as goes January, so goes the rest of the year." except for last year, that is.
Well, keep trading stocks. They matter. Right?
Dow 12,632.91, -20.81 (0.16%)
NASDAQ 2,813.84, +1.90 (0.07%)
S&P 500 1,312.40, -0.61 (0.05%)
NYSE Composite 7,838.30, +3.89 (0.05%)
NASDAQ Volume 1,602,785,875
NYSE Volume 4,156,928,000
Combined NYSE & NASDAQ Advance - Decline: 3135-2441
Combined NYSE & NASDAQ New highs - New lows: 276-22 (extreme, poised for reversal or breakout)
WTI crude oil: 98.48, -0.30
Gold: 1,737.80, +6.80
Silver: 33.26, -0.27
This is all according to plan, which excludes individual investors to the great benefit to those in the know.
Imagine being an insider. On Monday, you buy shares of your particular stocks of the day at the lows of the day, around 10:00 to 10:30 am ET and all day long, you watch as they gain in value. Then, on Tuesday, you sell at some high point right before the dismal Chicago PMI and Conference Board's Consumer Confidence number (more on thses later). Naturally, you ignored the poor showing from the Case-Shiller 20-city index, because nobody cares about housing, right?
You're a winner, in all aspects except for honesty, integrity and fairness. Worry not, because you or your firm made massive money all through the month of January, as the Dow rose 3%, the S&P gained 4% and the NASDAQ was up 8%.
Smashing! Except that gold and silver trounced your paper-made profits. Gold finished the month of January with a 13.9% gain and silver was up 19% for the month. And there's no chance of the metals going to zero and no counter-party risk. Well, golly.
As for that Chicago PMI, the market was looking for a number of 62.8, after December's 62.2 print. The reality was a poor 60.2, the lowest number since August, 2011, another indication that the holiday season in particular was something of an over-hyped bust and that the recovery continues to be choppy and not well-anchored. Bummer!
According to the Conference Board, consumer confidence was measured at 64.8 in December, but flopped to 61.1 in January. Double bummer!
The aforementioned Case-Shiller data, albeit back-dated, showed that home prices fell 3.7% from November 2010 through November 2011. Prices fell 0.7% (adjusted) or 1.3% (unadjusted) in November from October, as 19 of 20 cities experienced price declines. Phoenix was the only city registering a positive figure.
Not to worry. January's window dressing is complete and there's nothing to worry about heading into February... except for that nagging European debt crisis, Greece, the utter collapse in the Baltic Dry Index, and the looming showdown in washington over whether or not to extend the Bush tax cuts another 10 months, as congress, rather than deal with real issues, took the easy route in December and compromised to keep them intact through the end of February (they'll extend, as extending is part of their "extend and pretend" strategy).
No, no, nothing can go wrong. Let's just keep day-trading until...
By the way, volume continues to be dreadful, even though the Fed, through it's ZIRP to infinity policy, has forced fund managers into much more riskier trading scenarios than they normally would endeavor.
You can cite the January Barometer, which posits that "as goes January, so goes the rest of the year." except for last year, that is.
Well, keep trading stocks. They matter. Right?
Dow 12,632.91, -20.81 (0.16%)
NASDAQ 2,813.84, +1.90 (0.07%)
S&P 500 1,312.40, -0.61 (0.05%)
NYSE Composite 7,838.30, +3.89 (0.05%)
NASDAQ Volume 1,602,785,875
NYSE Volume 4,156,928,000
Combined NYSE & NASDAQ Advance - Decline: 3135-2441
Combined NYSE & NASDAQ New highs - New lows: 276-22 (extreme, poised for reversal or breakout)
WTI crude oil: 98.48, -0.30
Gold: 1,737.80, +6.80
Silver: 33.26, -0.27
Monday, January 30, 2012
Abundant Skepticism in US Stock Markets
There's nothing quite like a Monday morning gap down at the open to portray the absurdity of the modern US equity markets.
Stocks opened sharply lower (the Dow down as much as 131 points by 10:30 am ET), but then staged a day-long rally ending with mostly flat to slightly lower averages that had everybody but day-traders scratching their heads.
The reason day traders would be among the least surprised by the tenor of today's trading is that gap ups and downs have become somewhat the norm over the past few years and especially so in the last six to eight months. Shrewd day-traders are out by the close and ready with new positions at every open, so, the gaps in trading from one day to the next create boundless opportunities for profit.
And who might these day-traders be? They are not, as many assume, older, well-off types who sit in front of computers in their McMansions ticking off trades. They are more than likely to be hedge funds and the brokerages of the largest banks in the world, and therein lies the wickedness and fruitlessness of trading in today's markets for the individual investor.
Today's deep dive at the open was fomented by a couple of data points from the government that saw personal income rise by 0.4% in December, but personal spending flat for the same month. That translated into a savings rate of 4% for the average American, far beyond what the powers that be would prefer, but the flat line on spending in December meant that the much-ballyhooed Christmas spending spree was more hot air and bluster than reality and the US economy is still barely treading water.
Adding insult to the intelligence of the American investor was the fact that almost every other stock market in the world took losses on the day, the euro was sharply lower against the US dollar (normally a selling signal) and the Greece debt crisis - which was supposed to be solved over the weekend - continues to deepen.
Anyone thinking that today's action in equities was a sign that the economy is on solid ground probably also thinkis Bank of America is a good investment (paging Dick Bove) and that Newt Gingrich would do well as a presidential candidate against Barack Obama.
Our markets are permanently broken, manipulated and dishonest and until there are radical changes in the ways brokerages are regulated and separated, not only from their holding banks, but from the Fed, the government and the PPT.
Until then, beware of rallies off of sharp opening declines and huge gaps up at opens as well. They're nothing but openings for traders with more skills, more money and more advantage than the average Jane or Joe, and the movements of the market are nothing more than maintaining the illusion of stability until the elections in November.
Dow 12,653.72, -6.74 (0.05%)
NASDAQ 2,811.94, -4.61 (0.16%)
S&P 500 1,313.02, -3.31 (0.25%)
NYSE Composite 7,830.42, -46.19 (0.59%)
NASDAQ Volume 1,621,418,500
NYSE Volume 3,493,897,750
Combined NYSE & NASDAQ Advance - Decline: 1983-2611
Combined NYSE & NASDAQ New highs - New lows: 218-25 (still extreme, bordering on absurd)
WTI crude oil: 98.78, -0.78
Gold: 1,731.00, -1.20
Silver: 33.53, -0.26
Stocks opened sharply lower (the Dow down as much as 131 points by 10:30 am ET), but then staged a day-long rally ending with mostly flat to slightly lower averages that had everybody but day-traders scratching their heads.
The reason day traders would be among the least surprised by the tenor of today's trading is that gap ups and downs have become somewhat the norm over the past few years and especially so in the last six to eight months. Shrewd day-traders are out by the close and ready with new positions at every open, so, the gaps in trading from one day to the next create boundless opportunities for profit.
And who might these day-traders be? They are not, as many assume, older, well-off types who sit in front of computers in their McMansions ticking off trades. They are more than likely to be hedge funds and the brokerages of the largest banks in the world, and therein lies the wickedness and fruitlessness of trading in today's markets for the individual investor.
Today's deep dive at the open was fomented by a couple of data points from the government that saw personal income rise by 0.4% in December, but personal spending flat for the same month. That translated into a savings rate of 4% for the average American, far beyond what the powers that be would prefer, but the flat line on spending in December meant that the much-ballyhooed Christmas spending spree was more hot air and bluster than reality and the US economy is still barely treading water.
Adding insult to the intelligence of the American investor was the fact that almost every other stock market in the world took losses on the day, the euro was sharply lower against the US dollar (normally a selling signal) and the Greece debt crisis - which was supposed to be solved over the weekend - continues to deepen.
Anyone thinking that today's action in equities was a sign that the economy is on solid ground probably also thinkis Bank of America is a good investment (paging Dick Bove) and that Newt Gingrich would do well as a presidential candidate against Barack Obama.
Our markets are permanently broken, manipulated and dishonest and until there are radical changes in the ways brokerages are regulated and separated, not only from their holding banks, but from the Fed, the government and the PPT.
Until then, beware of rallies off of sharp opening declines and huge gaps up at opens as well. They're nothing but openings for traders with more skills, more money and more advantage than the average Jane or Joe, and the movements of the market are nothing more than maintaining the illusion of stability until the elections in November.
Dow 12,653.72, -6.74 (0.05%)
NASDAQ 2,811.94, -4.61 (0.16%)
S&P 500 1,313.02, -3.31 (0.25%)
NYSE Composite 7,830.42, -46.19 (0.59%)
NASDAQ Volume 1,621,418,500
NYSE Volume 3,493,897,750
Combined NYSE & NASDAQ Advance - Decline: 1983-2611
Combined NYSE & NASDAQ New highs - New lows: 218-25 (still extreme, bordering on absurd)
WTI crude oil: 98.78, -0.78
Gold: 1,731.00, -1.20
Silver: 33.53, -0.26
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