With the economy still in crisis mode and the future value of the US dollar (and other fiat currencies) very much in doubt, more and more people have pulled money out of stocks and mutual funds and into hard assets, such as vintage automobiles, fine art, collectibles, and, of course, precious metals, such as silver, gold and platinum.
While most of these assets aren't easily traded for quick money, the current perception is that they'll appreciate faster than inflation and aren't subject to the wild swings and other vagueries of the equity and bond markets.
Hard assets are more of a safe investment and a store of value and are especially coveted by people who have already amassed a comfortable level of wealth and wish to keep what they have.
Even if one is not in perfect financial condition, certain hard assets can help one sleep better at night, safe in the knowledge that their assets are in their own possession and not held in some virtual online account which may or may not be secure from hackers, margin calls and market miscues.
What everyone holding hard assets needs more than ever these days is security. That's why gun sales have never been better and safe manufacturers have put on extra shifts in order to meet the overwhelming demand, but nothing beats a solid Home Security system for peace of mind, whether you're at home or away.
While a gun may be the ultimate defense, against intruders and safes are perfect for keeping prying eyes (and hands) away from your precious assets, there isn't a thief alive who will dare break into a home that has a good security system in place, usually with a sign that says the house is well-monitored.
Good systems come in all price ranges, from simple DIY installation of motion detectors with lights and sirens to advanced wired or wireless security apparatus that can signal a local or national security center or even the police when tripped.
Holding hard assets will likely continue to be a favored investment for all classes of people, and the companies who make things that keep them secure are almost certain to profit handsomely.
Friday, April 6, 2012
Thursday, April 5, 2012
Stocks End Shortened Week with Lackluster Session
Markets will be closed on Friday in observance of Good Friday, but some traders apparently left the floor early as trading on the major exchanges was sloppy and limited.
There was only one bit of data that may have contributed to the the overall lack of enthusiasm: initial unemployment claims came in 2,000 above of expectations, at 357K, a number that many believe to be a sign of strength in the economy, though an equal number likely believe it to be still too high to demonstrate any lasting recovery.
The sad truth about unemployment figures - as dodgy as they are - is that they're nowhere near levels indicative of full employment, which would be somewhere in the 280-315,000 range, and probably won't be for the foreseeable future because America is creating jobs, albeit of a lower-paying variety and not in any perceptible hurry.
While America slogs along, now 3 1/2 years since the financial crisis, Europe seems to be careening headlong into a protracted recession, with the southernmost countries bordering on depression (count Greece as already in depression). The more bad news that comes from the continent, the harder it will be for the US to retain any semblance of prosperity, notably a word that hasn't been used much since late 2007, though it occasionally pops up in political speeches full of promises that will never be kept.
Activity today on the markets was so sadly disjointed that the NASDAQ managed to be the only index posting a positive return, primarily due to the presence of Apple (AAPL) and other momentum stocks which routinely get an algo boost while the Dow Industrials flounder.
Traders were also likely to be anxious over Friday's non-farm payroll data, which, despite the markets being closed for trading, will still be released at the normal time of 8:30 am EDT. Estimates abound, but most are focused in an area from 150,000 to 200,000, the latter being upped by Goldman Sachs from a previous 175,000 guess.
That perhaps explains why there was so little interest in staking out or adding to positions on the day. Trading resumes Monday and will be highly correlated to the March jobs data.
Monday also marks the beginning of first quarter earnings season, though traditional first up Alcoa (AA) will report on Tuesday, after the close of trading.
Commodities rebounded slightly from the recent drubbing they've taken, but even with today's gains remain well below levels reached earlier in the year.
New highs outpaced new lows, though not decisively, a notable change from the domination of new highs seen over the past six months and a metric to keep an eye on in upcoming days and weeks.
Dow 13,060.14 14.61 (0.11%)
NASDAQ 3,080.50 12.41 (0.40%)
S&P 500 1,398.08 0.88 (0.06%)
NYSE Compos... 8,081.37 25.42 (0.31%)
NASDAQ Volume... 1,525,375,250.00
NYSE Volume 3,277,506,250
Combined NYSE & NASDAQ Advance - Decline: 2478-3073
Combined NYSE & NASDAQ New highs - New lows: 115-91
WTI crude oil: 103.31, +1.84
Gold: 1,630.10, +16.00
Silver: 31.73, +0.68
There was only one bit of data that may have contributed to the the overall lack of enthusiasm: initial unemployment claims came in 2,000 above of expectations, at 357K, a number that many believe to be a sign of strength in the economy, though an equal number likely believe it to be still too high to demonstrate any lasting recovery.
The sad truth about unemployment figures - as dodgy as they are - is that they're nowhere near levels indicative of full employment, which would be somewhere in the 280-315,000 range, and probably won't be for the foreseeable future because America is creating jobs, albeit of a lower-paying variety and not in any perceptible hurry.
While America slogs along, now 3 1/2 years since the financial crisis, Europe seems to be careening headlong into a protracted recession, with the southernmost countries bordering on depression (count Greece as already in depression). The more bad news that comes from the continent, the harder it will be for the US to retain any semblance of prosperity, notably a word that hasn't been used much since late 2007, though it occasionally pops up in political speeches full of promises that will never be kept.
Activity today on the markets was so sadly disjointed that the NASDAQ managed to be the only index posting a positive return, primarily due to the presence of Apple (AAPL) and other momentum stocks which routinely get an algo boost while the Dow Industrials flounder.
Traders were also likely to be anxious over Friday's non-farm payroll data, which, despite the markets being closed for trading, will still be released at the normal time of 8:30 am EDT. Estimates abound, but most are focused in an area from 150,000 to 200,000, the latter being upped by Goldman Sachs from a previous 175,000 guess.
That perhaps explains why there was so little interest in staking out or adding to positions on the day. Trading resumes Monday and will be highly correlated to the March jobs data.
Monday also marks the beginning of first quarter earnings season, though traditional first up Alcoa (AA) will report on Tuesday, after the close of trading.
Commodities rebounded slightly from the recent drubbing they've taken, but even with today's gains remain well below levels reached earlier in the year.
New highs outpaced new lows, though not decisively, a notable change from the domination of new highs seen over the past six months and a metric to keep an eye on in upcoming days and weeks.
Dow 13,060.14 14.61 (0.11%)
NASDAQ 3,080.50 12.41 (0.40%)
S&P 500 1,398.08 0.88 (0.06%)
NYSE Compos... 8,081.37 25.42 (0.31%)
NASDAQ Volume... 1,525,375,250.00
NYSE Volume 3,277,506,250
Combined NYSE & NASDAQ Advance - Decline: 2478-3073
Combined NYSE & NASDAQ New highs - New lows: 115-91
WTI crude oil: 103.31, +1.84
Gold: 1,630.10, +16.00
Silver: 31.73, +0.68
Wednesday, April 4, 2012
S&P Closes Under 1400; Precious Metals Whacked
The follow-on from yesterday's FOMC minutes release, combined with scary data from Australia and China (slowing economies) sent markets tumbling globally.
Asia and Europe each saw aggressive selling, and by the time US markets opened - despite ADP March employment data posting a modest beat of 209,000 jobs - the Dow was set up for a 100-point loss at the open.
The opening move was swiftly lower, taking the other major indices along for the ride. Dow Industrials remained below 13,100 all day, with the S&P 500 - despite a late day rally - eventually closing below 1400 for the first time in eight sessions.
To say that the markets have topped out temporarily would be putting it lightly; rather, stocks seem to be in a steady drift lower, as Winter turns to Spring and investors seek to lock in profits from one of the most rambunctious first quarters in stock market history.
Conditions in Europe once again made noise in the states, as a poor showing for a Spanish bond offering and rumors of another bailout for Portugal fanned the flames of global recession.
While some commentators continue to spout nonsense that the US is "decoupling" from Europe and the rest of the world's economies, such talk is nothing but hot air, mostly from the same people who rightly contended during the struggles in the US that a large portion of US earnings are derived from abroad.
One simply cannot have it both ways. We are either a part of the global economy or we are not and the facts are strongly in favor of the "globalized" economy model.
What concerns investors most during this transitional period are fears of a prolonged slump in Europe which would exacerbate tepid conditions in the US. Economic data has been fragile of late, but hope for a renewal to the rally on first quarter earnings data from US companies is keeping the markets somewhat range-bound and in a position of relative strength, though the thought of the Fed cutting off the easy money with the end of "operation twist" in June are tempering the bullish sentiments.
While stocks were damaged on the day, gold and silver were even harder hit, which makes little sense from an historical perspective. In times of economic distress, the precious metals usually hold up better, but, since they have been turned into trading vehicles by the Wall Street madmen, such assumptions may not hold up this time around. The mood is eerily similar to that of September 2008, when a fragile economy was overturned by a number of random events. The situation is vastly different today, however, but a major crisis anywhere in the world could rapidly spread.
In the face of some chaos, the strengthening dollar is at least bringing down oil prices, which should eventually lower the price of gas in the US. The high price of fuel is in itself a condition which could severely slow the already turbid US economy, though the good news for drivers may not be welcomed by equity investors.
The new high - new low indicator flipped to the negative today for the first time in a long while. Any continuation of that trend indicator could signal a prolonged correction, something the three-year-old bull market has not experienced since the flagging days of last summer.
Dow 13,074.75, -124.80 (0.95%)
NASDAQ 3,068.09, -45.48 (1.46%)
S&P 500 1,398.96, -14.42 (1.02%)
NYSE Composite 8,111.48, -105.06 (1.28%)
NASDAQ Volume 1,779,653,500
NYSE Volume 3,810,047,500
Combined NYSE & NASDAQ Advance - Decline: 1079-4563
Combined NYSE & NASDAQ New highs - New lows: 65-109
WTI crude oil: 101.47, -2.54
Gold: 1,614.10, -57.90
Silver: 31.04, -2.22
Asia and Europe each saw aggressive selling, and by the time US markets opened - despite ADP March employment data posting a modest beat of 209,000 jobs - the Dow was set up for a 100-point loss at the open.
The opening move was swiftly lower, taking the other major indices along for the ride. Dow Industrials remained below 13,100 all day, with the S&P 500 - despite a late day rally - eventually closing below 1400 for the first time in eight sessions.
To say that the markets have topped out temporarily would be putting it lightly; rather, stocks seem to be in a steady drift lower, as Winter turns to Spring and investors seek to lock in profits from one of the most rambunctious first quarters in stock market history.
Conditions in Europe once again made noise in the states, as a poor showing for a Spanish bond offering and rumors of another bailout for Portugal fanned the flames of global recession.
While some commentators continue to spout nonsense that the US is "decoupling" from Europe and the rest of the world's economies, such talk is nothing but hot air, mostly from the same people who rightly contended during the struggles in the US that a large portion of US earnings are derived from abroad.
One simply cannot have it both ways. We are either a part of the global economy or we are not and the facts are strongly in favor of the "globalized" economy model.
What concerns investors most during this transitional period are fears of a prolonged slump in Europe which would exacerbate tepid conditions in the US. Economic data has been fragile of late, but hope for a renewal to the rally on first quarter earnings data from US companies is keeping the markets somewhat range-bound and in a position of relative strength, though the thought of the Fed cutting off the easy money with the end of "operation twist" in June are tempering the bullish sentiments.
While stocks were damaged on the day, gold and silver were even harder hit, which makes little sense from an historical perspective. In times of economic distress, the precious metals usually hold up better, but, since they have been turned into trading vehicles by the Wall Street madmen, such assumptions may not hold up this time around. The mood is eerily similar to that of September 2008, when a fragile economy was overturned by a number of random events. The situation is vastly different today, however, but a major crisis anywhere in the world could rapidly spread.
In the face of some chaos, the strengthening dollar is at least bringing down oil prices, which should eventually lower the price of gas in the US. The high price of fuel is in itself a condition which could severely slow the already turbid US economy, though the good news for drivers may not be welcomed by equity investors.
The new high - new low indicator flipped to the negative today for the first time in a long while. Any continuation of that trend indicator could signal a prolonged correction, something the three-year-old bull market has not experienced since the flagging days of last summer.
Dow 13,074.75, -124.80 (0.95%)
NASDAQ 3,068.09, -45.48 (1.46%)
S&P 500 1,398.96, -14.42 (1.02%)
NYSE Composite 8,111.48, -105.06 (1.28%)
NASDAQ Volume 1,779,653,500
NYSE Volume 3,810,047,500
Combined NYSE & NASDAQ Advance - Decline: 1079-4563
Combined NYSE & NASDAQ New highs - New lows: 65-109
WTI crude oil: 101.47, -2.54
Gold: 1,614.10, -57.90
Silver: 31.04, -2.22
Tuesday, April 3, 2012
The Market's Cynical Response to a "Good" Economy
Just in case anybody (everybody) is having trouble understanding current market dynamics, today's response to the 2:00 pm EDT release of minutes from the last FOMC rate policy meeting in March should serve to middy matters even further.
Not to make too fine a point of it, but the Fed governors were fairly sanguine about the economy and hinted that if the economy continued to plod along at its current snail's pace there would probably be little to no need for further policy easing or, in the parlance of today's twisted environment, more quantitative easing (QE).
Upon hearing the news, the knee-jerk response would be optimistic and stocks would be expected to get a bit of a bounce, but, in this cynical environment, the exact opposite happened. The major indices had been meandering along the unchanged line, but sold off sharply when the Fed minutes were released.
Throw conventional thinking out the window. All that matters, apparently, to the wizards of Wall Street, is for the Fed to keep the printing presses well oiled and running, feeding more free cash to the banks and their brokerages, in order to keep this most unrealistic market rally ever witnessed rolling along.
The logic works thusly: if the Fed stops printing, Wall Street will no longer have the risk-free trading to which they've become so accustomed to over the past three years, so, any sign that the economy is actually improving, which would end the free money party, must be met with disdain.
It is the most cynical market response to good news that's been seen around these parts in many a year and yet another reason why most individuals have shunned stocks for so long. They simply do not make sense as sound investments when herd-like machinations can take them down in the face of good news.
Orwell would be proud, but only for a moment.
Dow 13,199.55, -64.94 (0.49%)
NASDAQ 3,113.57, -6.13 (0.20%)
S&P 500 1,413.38, -5.66 (0.40%)
NYSE Composite 8,216.54, -64.29 (0.78%)
NASDAQ Volume 1,791,503,250
NYSE Volume 3,790,125,000
Combined NYSE & NASDAQ Advance - Decline: 1841-3782
Combined NYSE & NASDAQ New highs - New lows: 250-61
WTI crude oil: 104.01, -1.22
Gold: 1,647.00, -32.70
Silver: 32.62, -0.48
Not to make too fine a point of it, but the Fed governors were fairly sanguine about the economy and hinted that if the economy continued to plod along at its current snail's pace there would probably be little to no need for further policy easing or, in the parlance of today's twisted environment, more quantitative easing (QE).
Upon hearing the news, the knee-jerk response would be optimistic and stocks would be expected to get a bit of a bounce, but, in this cynical environment, the exact opposite happened. The major indices had been meandering along the unchanged line, but sold off sharply when the Fed minutes were released.
Throw conventional thinking out the window. All that matters, apparently, to the wizards of Wall Street, is for the Fed to keep the printing presses well oiled and running, feeding more free cash to the banks and their brokerages, in order to keep this most unrealistic market rally ever witnessed rolling along.
The logic works thusly: if the Fed stops printing, Wall Street will no longer have the risk-free trading to which they've become so accustomed to over the past three years, so, any sign that the economy is actually improving, which would end the free money party, must be met with disdain.
It is the most cynical market response to good news that's been seen around these parts in many a year and yet another reason why most individuals have shunned stocks for so long. They simply do not make sense as sound investments when herd-like machinations can take them down in the face of good news.
Orwell would be proud, but only for a moment.
Dow 13,199.55, -64.94 (0.49%)
NASDAQ 3,113.57, -6.13 (0.20%)
S&P 500 1,413.38, -5.66 (0.40%)
NYSE Composite 8,216.54, -64.29 (0.78%)
NASDAQ Volume 1,791,503,250
NYSE Volume 3,790,125,000
Combined NYSE & NASDAQ Advance - Decline: 1841-3782
Combined NYSE & NASDAQ New highs - New lows: 250-61
WTI crude oil: 104.01, -1.22
Gold: 1,647.00, -32.70
Silver: 32.62, -0.48
Monday, April 2, 2012
Predictable Markets Sure Signs of Manipulation and False Hope
Money Daily does not make many predictions, but last week it was postulated that both Friday and Monday would show gains on the major indices, due to window dressing (Friday) and start of quarter allocation euphoria.
Both of these predictions were proven correct by a market that is now so transparently manipulated that investing has become nothing more than understanding the general mood. That is not a healthy market and surely not a sustainable model, but it is what we have, thanks to lax regulatory bodies and almost omnipotent control by the banking and financial services industry.
Friday and Monday's dual melt-up (on abysmally low volume, as usual) makes a case for the decrepit condition of US (and to a large degree, global) markets. They are old-boy networks and the only traders are strictly Wall Street insiders. These tendencies reveal much of what the general public does not perceive: that the markets have been broken since the financial collapse of 2008 and the ephemeral "gains" are nothing but the product of excessively loose economic policy and a disastrous fiscal policy being fostered at the top of the federal system.
Additionally, to say that the system is corrupt would be giving it a good name. It has gone well beyond corruption; what we now have is a false oligopoly that is baseless and doomed to eventual failure.
A couple of key points were made from data today, which, in more normal times, would have resulted in some caution and probably a general decline, but today's market is a monstosity of central planning which has nothing to do with the mundane facts of economic reality.
The ISM Index - a national barometer - checked in at 53.4 for March, after a reading of 52.4 in February. The metrics used in the calculation of of the index are distorted beyond recognition, as are most "official" economic readings. Even still, taken at face value, the index is registering just bare expansion, and will likely be revised lower in an upcoming debacle of data massage.
More importantly, the February construction spending number came in at a disappointing -1.0%, following a -0.8% reading in January. This, in the midst of one of the warmest winters on record is a serious issue, and, discounting the veracity of such a statistic, the real number is probably more like -3.0%.
The markets and the computers that do the trading were obviously adjusted to ignore these numbers; thus, the inordinate rise in stocks on the day.
It's a very sad state of affairs on Wall Street. The desperation in the brokerages is palpable and apparent to anyone who watches these things with both eyes open. The eventual crash will be horrifying to anyone with trust in these hopelessly deranged markets.
Dow 13,264.49, +52.45 (0.40%)
NASDAQ 3,119.70, +28.13 (0.91%)
S&P 500 1,419.04, +10.57 (0.75%)
NYSE Composite 8,280.83, +73.90 (0.90%)
NASDAQ Volume 1,778,994,250
NYSE Volume 3,579,872,500
Combined NYSE & NASDAQ Advance - Decline: 4092-1538
Combined NYSE & NASDAQ New highs - New lows: 273-43
WTI crude oil: 105.23, +2.21
Gold: 1,679.70, +7.70
Silver: 33.10, +0.61
Both of these predictions were proven correct by a market that is now so transparently manipulated that investing has become nothing more than understanding the general mood. That is not a healthy market and surely not a sustainable model, but it is what we have, thanks to lax regulatory bodies and almost omnipotent control by the banking and financial services industry.
Friday and Monday's dual melt-up (on abysmally low volume, as usual) makes a case for the decrepit condition of US (and to a large degree, global) markets. They are old-boy networks and the only traders are strictly Wall Street insiders. These tendencies reveal much of what the general public does not perceive: that the markets have been broken since the financial collapse of 2008 and the ephemeral "gains" are nothing but the product of excessively loose economic policy and a disastrous fiscal policy being fostered at the top of the federal system.
Additionally, to say that the system is corrupt would be giving it a good name. It has gone well beyond corruption; what we now have is a false oligopoly that is baseless and doomed to eventual failure.
A couple of key points were made from data today, which, in more normal times, would have resulted in some caution and probably a general decline, but today's market is a monstosity of central planning which has nothing to do with the mundane facts of economic reality.
The ISM Index - a national barometer - checked in at 53.4 for March, after a reading of 52.4 in February. The metrics used in the calculation of of the index are distorted beyond recognition, as are most "official" economic readings. Even still, taken at face value, the index is registering just bare expansion, and will likely be revised lower in an upcoming debacle of data massage.
More importantly, the February construction spending number came in at a disappointing -1.0%, following a -0.8% reading in January. This, in the midst of one of the warmest winters on record is a serious issue, and, discounting the veracity of such a statistic, the real number is probably more like -3.0%.
The markets and the computers that do the trading were obviously adjusted to ignore these numbers; thus, the inordinate rise in stocks on the day.
It's a very sad state of affairs on Wall Street. The desperation in the brokerages is palpable and apparent to anyone who watches these things with both eyes open. The eventual crash will be horrifying to anyone with trust in these hopelessly deranged markets.
Dow 13,264.49, +52.45 (0.40%)
NASDAQ 3,119.70, +28.13 (0.91%)
S&P 500 1,419.04, +10.57 (0.75%)
NYSE Composite 8,280.83, +73.90 (0.90%)
NASDAQ Volume 1,778,994,250
NYSE Volume 3,579,872,500
Combined NYSE & NASDAQ Advance - Decline: 4092-1538
Combined NYSE & NASDAQ New highs - New lows: 273-43
WTI crude oil: 105.23, +2.21
Gold: 1,679.70, +7.70
Silver: 33.10, +0.61
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