What we have here is a self-reinforcing mechanism.
As long as the Fed keeps buying treasuries and MBS, don't expect stocks to do anything but continue going straight up. Those who have 401Ks, mutual funds, individual stocks, ETFs, etc., can rest easy. The Fed has your back.
For everyone else, tough cookies (and higher prices for them). Simply amazing.
Monday is Martin Luther King Day. Markets are closed.
Dow 13,649.70, +53.68 (0.39%)
NASDAQ 3,134.71, -1.29 (0.04%)
S&P 500 1,485.98, +5.04 (0.34%)
NYSE Composite 8,792.58, +26.03 (0.30%)
NASDAQ Volume 1,861,060,250
NYSE Volume 4,018,652,250
Combined NYSE & NASDAQ Advance - Decline: 3764-2612
Combined NYSE & NASDAQ New highs - New lows: 453-13
WTI crude oil: 95.56, +0.07
Gold: 1,687.00, -3.80
Silver: 31.93, +0.122
Friday, January 18, 2013
Thursday, January 17, 2013
Dow Hits Five-Year High; Why Isn't Anyone Celebrating?
Money has to go somewhere, and today it went straight into equities, pushing the Dow to a five-year high.
Whether or not this euphoric advance was based on anything more than the Fed's continuing POMO operations remains to be seen.
Housing starts and building permits for December were figuratively "through the roof," though on Main Street America, people are wondering just who it is that is buying all these new homes.
In the real economy - the one that functions on dollars and cents, not swaps, repos, debt financing and accounting fantasies - it still feels like a recession. Stores are largely empty, incomes are still declining overall and the bulk of the US consumer class has just been hit with a 2% tax increase, thanks to the assembled dunces in congress and at the White House.
Unemployment claims today came in at a multi-month low of 335,000, though continuing claims increased from 3127K to 3214K in one week, so, something at the BLS isn't quite adding up, though that's largely been the case since 2006 or before.
The Philadelphia Fed index of economic activity printed a -5.8 for the current month, following a positive 4.6 in December. This reading comes on the heels of Empire Manufacturing (NY state) showing a -7.8 after a -7.3.
If none of this makes any sense to you, consider that Boeing (BA), after having all of their 787 "Dreamliners" (make that "Nightmare Flight") grounded by the FAA (note: this is after years and years of delays and missed deadlines), shares of the nation's top plane builder finished up 92 cents (1.24%).
Beyond that, ZeroHedge notes that if you strip out the gains made by Bank of America - the top performing Dow stock of 2012 - for releasing loan loss reserves (an accounting trick), the bank actually lost something on the order of $2.5 billion last year.
Regular readers (or at least those who check the stats at the bottom of each post) will take note that new highs - new lows has today reached the pinnacle of absurdity.
Even in the very, very, very best of times there were always more than eight stocks hitting new 52-week lows, it's only natural in a normal, competitive environment. The number of new lows since the first of the year has been hovering in the teems for the most part. The money gushing from the Federal Reserve to the primary dealers to the stock market is causing the most unbalanced market ever witnessed.
And the debt ceiling increase that needs to be approved, but just seems to sit there, like a 300000000-ton weight over the US economy, ah, don't worry about that. Our "leaders" will find a way to ix that, certainly, positively, without a doubt.
We live in Wonderland. Sadly, only those who pad their wallets on Wall Street get to be either the Cheshire Cat, Mad Hatter or Alice.
Dow 13,596.02, +84.79 (0.63%)
NASDAQ 3,136.00, +18.46 (0.59%)
S&P 500 1,480.98, +8.31 (0.56%)
NYSE Composite 8,766.54, +55.98 (0.64%)
NASDAQ Volume 1,734,349,250
NYSE Volume 3,966,953,250
Combined NYSE & NASDAQ Advance - Decline: 4628-1787
Combined NYSE & NASDAQ New highs - New lows: 525-8
WTI crude oil: 95.49, +1.25
Gold: 1,690.80, +7.60
Silver: 31.81, +0.268
Whether or not this euphoric advance was based on anything more than the Fed's continuing POMO operations remains to be seen.
Housing starts and building permits for December were figuratively "through the roof," though on Main Street America, people are wondering just who it is that is buying all these new homes.
In the real economy - the one that functions on dollars and cents, not swaps, repos, debt financing and accounting fantasies - it still feels like a recession. Stores are largely empty, incomes are still declining overall and the bulk of the US consumer class has just been hit with a 2% tax increase, thanks to the assembled dunces in congress and at the White House.
Unemployment claims today came in at a multi-month low of 335,000, though continuing claims increased from 3127K to 3214K in one week, so, something at the BLS isn't quite adding up, though that's largely been the case since 2006 or before.
The Philadelphia Fed index of economic activity printed a -5.8 for the current month, following a positive 4.6 in December. This reading comes on the heels of Empire Manufacturing (NY state) showing a -7.8 after a -7.3.
If none of this makes any sense to you, consider that Boeing (BA), after having all of their 787 "Dreamliners" (make that "Nightmare Flight") grounded by the FAA (note: this is after years and years of delays and missed deadlines), shares of the nation's top plane builder finished up 92 cents (1.24%).
Beyond that, ZeroHedge notes that if you strip out the gains made by Bank of America - the top performing Dow stock of 2012 - for releasing loan loss reserves (an accounting trick), the bank actually lost something on the order of $2.5 billion last year.
Regular readers (or at least those who check the stats at the bottom of each post) will take note that new highs - new lows has today reached the pinnacle of absurdity.
Even in the very, very, very best of times there were always more than eight stocks hitting new 52-week lows, it's only natural in a normal, competitive environment. The number of new lows since the first of the year has been hovering in the teems for the most part. The money gushing from the Federal Reserve to the primary dealers to the stock market is causing the most unbalanced market ever witnessed.
And the debt ceiling increase that needs to be approved, but just seems to sit there, like a 300000000-ton weight over the US economy, ah, don't worry about that. Our "leaders" will find a way to ix that, certainly, positively, without a doubt.
We live in Wonderland. Sadly, only those who pad their wallets on Wall Street get to be either the Cheshire Cat, Mad Hatter or Alice.
Dow 13,596.02, +84.79 (0.63%)
NASDAQ 3,136.00, +18.46 (0.59%)
S&P 500 1,480.98, +8.31 (0.56%)
NYSE Composite 8,766.54, +55.98 (0.64%)
NASDAQ Volume 1,734,349,250
NYSE Volume 3,966,953,250
Combined NYSE & NASDAQ Advance - Decline: 4628-1787
Combined NYSE & NASDAQ New highs - New lows: 525-8
WTI crude oil: 95.49, +1.25
Gold: 1,690.80, +7.60
Silver: 31.81, +0.268
Wednesday, January 16, 2013
Markets Continue Dull Streak; Germany Slow Go on Gold Move
How dull is this market?
The Dow Jones Industrials hit their lows of the day just minutes into trading, losing 66 points, then rallied off that until stabilizing - though still in the red - around 11:00 am ET.
From that point until the close, the index traded in a range of just 25 points.
This is what happens when headline-scanning algos do 80% of the trading. When there's no news, nothing happens. So, if you're trading on fundamentals - things like price-earnings ratios, comparative advantage, free cash flow, etc. - you can just sit and wait until your particular stock of choice latches itself to a broad rally or makes some headline-grabbing news.
And, if that's what's become of our "free" markets, good luck, because the computers will beat you every time. They can find and scan a headline, react and trade in a matter of seconds, or, in much less the time an average web page takes to load.
Now, is there any reason at all for individual investors to trade stocks? One would believe no.
About all that was not moving the market today were a series of equally dull economic reports, like the CPI, at 0.0%. There's no inflation (really?) and no deflation, which, unless one knew better, would be defined as stagflation (or maybe lackflation).
The NAHB Housing Market Index remained steady at 47, whatever that means; industrial production bumped up 0.3%, which was down from last month's reading of an increase of 1.0%, and capacity utilization improved from 78.7% to 78.8%.
Outside of Goldman Sachs' (GS) huge earnings and revenue beat and JP Morgan's (JPM) narrow beat ex-one-time-charges (but of course), what may have put a pall over the session was the World Bank lowering its global growth (that's a joke, son) projection from 3.0% to 2.4%.
Seriously, the sloped-browed, slack-jawed dunces at the World Bank don't have a crystal ball, but, for some unholy reason, people believe they know what they're doing. Some of us are dubious. But, then again, some of us don't trust anything that comes out of the mouth of politicians or bankers or even stock analysts.
Ho-hum. It seems even the bright-minded Germans, who shook things up a little yesterday by wanting some of their gold back, really don't want it all that badly, after all. GATA reports that Germany will take all of seven years to repatriate some 300 tons of its gold from the Federal Reserve in New York. It will likely take a shorter period of time to remove all of its gold - 374 tons - from the vaults in Paris, but it plans on keeping whatever is in the London vaults there indefinitely, amounting of 13% of all its gold.
The plan is to hold 50% of its gold at home, the rest in London and New York. La-de-dah.
Dow 13,511.08, -23.81 (0.18%)
NASDAQ 3,117.54, +6.76 (0.22%)
S&P 500 1,472.57, +0.23 (0.02%)
NYSE Composite 8,710.22, -22.88 (0.26%)
NASDAQ Volume 1,648,059,375
NYSE Volume 3,198,232,750
Combined NYSE & NASDAQ Advance - Decline: 2775-3605
Combined NYSE & NASDAQ New highs - New lows: 263-10
WTI crude oil: 94.24, +0.96
Gold: 1,683.20, -0.70
Silver: 31.54, +0.013
The Dow Jones Industrials hit their lows of the day just minutes into trading, losing 66 points, then rallied off that until stabilizing - though still in the red - around 11:00 am ET.
From that point until the close, the index traded in a range of just 25 points.
This is what happens when headline-scanning algos do 80% of the trading. When there's no news, nothing happens. So, if you're trading on fundamentals - things like price-earnings ratios, comparative advantage, free cash flow, etc. - you can just sit and wait until your particular stock of choice latches itself to a broad rally or makes some headline-grabbing news.
And, if that's what's become of our "free" markets, good luck, because the computers will beat you every time. They can find and scan a headline, react and trade in a matter of seconds, or, in much less the time an average web page takes to load.
Now, is there any reason at all for individual investors to trade stocks? One would believe no.
About all that was not moving the market today were a series of equally dull economic reports, like the CPI, at 0.0%. There's no inflation (really?) and no deflation, which, unless one knew better, would be defined as stagflation (or maybe lackflation).
The NAHB Housing Market Index remained steady at 47, whatever that means; industrial production bumped up 0.3%, which was down from last month's reading of an increase of 1.0%, and capacity utilization improved from 78.7% to 78.8%.
Outside of Goldman Sachs' (GS) huge earnings and revenue beat and JP Morgan's (JPM) narrow beat ex-one-time-charges (but of course), what may have put a pall over the session was the World Bank lowering its global growth (that's a joke, son) projection from 3.0% to 2.4%.
Seriously, the sloped-browed, slack-jawed dunces at the World Bank don't have a crystal ball, but, for some unholy reason, people believe they know what they're doing. Some of us are dubious. But, then again, some of us don't trust anything that comes out of the mouth of politicians or bankers or even stock analysts.
Ho-hum. It seems even the bright-minded Germans, who shook things up a little yesterday by wanting some of their gold back, really don't want it all that badly, after all. GATA reports that Germany will take all of seven years to repatriate some 300 tons of its gold from the Federal Reserve in New York. It will likely take a shorter period of time to remove all of its gold - 374 tons - from the vaults in Paris, but it plans on keeping whatever is in the London vaults there indefinitely, amounting of 13% of all its gold.
The plan is to hold 50% of its gold at home, the rest in London and New York. La-de-dah.
Dow 13,511.08, -23.81 (0.18%)
NASDAQ 3,117.54, +6.76 (0.22%)
S&P 500 1,472.57, +0.23 (0.02%)
NYSE Composite 8,710.22, -22.88 (0.26%)
NASDAQ Volume 1,648,059,375
NYSE Volume 3,198,232,750
Combined NYSE & NASDAQ Advance - Decline: 2775-3605
Combined NYSE & NASDAQ New highs - New lows: 263-10
WTI crude oil: 94.24, +0.96
Gold: 1,683.20, -0.70
Silver: 31.54, +0.013
Tuesday, January 15, 2013
Germany Wants It's Gold Back; NASDAQ Negative Since Jan. 2; America: A Nation of Sleeple
The biggest financial news of the day was not carried by the Wall Street Journal, CNBC or Bloomberg (over the air, at least), but by German newspaper Handelsblatt (in German) and initially picked up by GATA and, naturally, ZeroHedge.
After months of pressuring from the public, the report tells of how the German Bundesbank is planning to repatriate much of its gold reserves, of which only 31% is held in Germany.
The New York Federal Reserve holds 45% of Germany’s gold reserves. The Bank of England and the Bank of France hold 13% and 11% each, respectively.
These arrangements date back to the 1950s, when Germany was split into East and West countries, as a precaution, but, since Germany has been whole for some time now, the government believes it is prudent to bring most of the reserves home.
Though details have yet to emerge, the plan calls for repatriation of all gold from France, since there would be no forex advantage, both countries under the regime of the same currency, the Euro. Estimates are that the Germans will kindly ask the Federal Reserve and the Bank of England for most of their reserves, especially after President Obama intoned yesterday that America is not a "deadbeat nation" (we are).
Nitwit traders on Wall Street scarcely understand the importance of this gesture by the Germans. They have (or think they have) the second largest hoard of gold in the world; only the USA has more in actual, physical reserves.
Germany may also be concerned that all of their gold is not where it is supposed to be or has claims against it, as central banks have played fast and loose with gold over the years, often leasing it out on speculation. There's also a fear that some of the gold bars may actually be counterfeit. A number of tungsten-filled bars have been showing up in odd places of late.
One cannot reasonably blame the Germans for wanting a full, accurate accounting of their owned wealth and to have it in their possession. This is a huge development, signaling that Germany, the strongest country in the EU, may be planning to disengage from the Euro and reinstitute and re-establish the Deutschemark as their official currency.
In such a case, nations like Spain, Greece, Italy, Portugal and pretty much the entire Eurozone nations would be toast and the game of international currency debasement would enter a new, dizzying phase with unknown consequences.
Stay tuned on this one.
As reported here yesterday, the NASDAQ index was holding onto a five-point gain since the huge 92-point ramp-up January 2nd, and today finished below that threshold. As of the close today, the NASDAQ is down one point and change. So, if you missed the move on the NAZ on January 2nd, you're down for the year so far. Too bad.
Amazing. With the Fed pumping in $85 billion a month with daily POMOs and all the MBS available, they still can't put together a decent gain? Curious. All this money seems to be going into a black hole.
Reporter and editor of this blog, Fearless Rick (yeah, that guy over there on the duvet having a beer) has coined a new term which he believes covers about 75% for the American population: SLEEPLE, defined as people who look and act like they're awake, but are actually sleeping.
Credit due. Per aspera ad astra. Caveat Emptor. ©
BYW: This looks like a good spot to go short just about anything, but especially tech and, among that group, just about anything related to social media.
Dow 13,534.89, +27.57(0.20%)
NASDAQ 3,110.78, -6.72 (0.22%)
S&P 500 1,472.34, +1.66(0.11%)
NYSE Composite 8,733.10, +15.65(0.18%)
NASDAQ Volume 1,852,201,125
NYSE Volume 3,331,416,250
Combined NYSE & NASDAQ Advance - Decline: 3578-2829
Combined NYSE & NASDAQ New highs - New lows: 300-18
WTI crude oil: 93.28, -0.86
Gold: 1,683.90, +14.50
Silver: 31.53, +0.419
After months of pressuring from the public, the report tells of how the German Bundesbank is planning to repatriate much of its gold reserves, of which only 31% is held in Germany.
The New York Federal Reserve holds 45% of Germany’s gold reserves. The Bank of England and the Bank of France hold 13% and 11% each, respectively.
These arrangements date back to the 1950s, when Germany was split into East and West countries, as a precaution, but, since Germany has been whole for some time now, the government believes it is prudent to bring most of the reserves home.
Though details have yet to emerge, the plan calls for repatriation of all gold from France, since there would be no forex advantage, both countries under the regime of the same currency, the Euro. Estimates are that the Germans will kindly ask the Federal Reserve and the Bank of England for most of their reserves, especially after President Obama intoned yesterday that America is not a "deadbeat nation" (we are).
Nitwit traders on Wall Street scarcely understand the importance of this gesture by the Germans. They have (or think they have) the second largest hoard of gold in the world; only the USA has more in actual, physical reserves.
Germany may also be concerned that all of their gold is not where it is supposed to be or has claims against it, as central banks have played fast and loose with gold over the years, often leasing it out on speculation. There's also a fear that some of the gold bars may actually be counterfeit. A number of tungsten-filled bars have been showing up in odd places of late.
One cannot reasonably blame the Germans for wanting a full, accurate accounting of their owned wealth and to have it in their possession. This is a huge development, signaling that Germany, the strongest country in the EU, may be planning to disengage from the Euro and reinstitute and re-establish the Deutschemark as their official currency.
In such a case, nations like Spain, Greece, Italy, Portugal and pretty much the entire Eurozone nations would be toast and the game of international currency debasement would enter a new, dizzying phase with unknown consequences.
Stay tuned on this one.
As reported here yesterday, the NASDAQ index was holding onto a five-point gain since the huge 92-point ramp-up January 2nd, and today finished below that threshold. As of the close today, the NASDAQ is down one point and change. So, if you missed the move on the NAZ on January 2nd, you're down for the year so far. Too bad.
Amazing. With the Fed pumping in $85 billion a month with daily POMOs and all the MBS available, they still can't put together a decent gain? Curious. All this money seems to be going into a black hole.
Reporter and editor of this blog, Fearless Rick (yeah, that guy over there on the duvet having a beer) has coined a new term which he believes covers about 75% for the American population: SLEEPLE, defined as people who look and act like they're awake, but are actually sleeping.
Credit due. Per aspera ad astra. Caveat Emptor. ©
BYW: This looks like a good spot to go short just about anything, but especially tech and, among that group, just about anything related to social media.
Dow 13,534.89, +27.57(0.20%)
NASDAQ 3,110.78, -6.72 (0.22%)
S&P 500 1,472.34, +1.66(0.11%)
NYSE Composite 8,733.10, +15.65(0.18%)
NASDAQ Volume 1,852,201,125
NYSE Volume 3,331,416,250
Combined NYSE & NASDAQ Advance - Decline: 3578-2829
Combined NYSE & NASDAQ New highs - New lows: 300-18
WTI crude oil: 93.28, -0.86
Gold: 1,683.90, +14.50
Silver: 31.53, +0.419
Monday, January 14, 2013
Split Indices, Tight Ranges, Soft January
"As January goes, so goes the year."
This tired line of non-logical thinking gets bantered about every year around this time, but is especially in vogue this year after the huge ramp-up in equities on January 2nd, when fresh bank capital (courtesy of the Fed) flowed into the markets in an effort to lure in retail investors.
It's not working.
Since the biggest gain on the Dow Industrials to start a new year (January 2nd, 2013... this year) stocks have gone, well, not very far. The total gain on the Dow over the past eight sessions, including today, is less than 100 points. Big Hooray!
On the S&P 500, the gain has been a whopping eight points. The NASDAQ? 5.24 points since the massive, 92-point gain of January 2nd.
So, the point is that while CNBC and Bloomberg have been crowing about the huge "inflows" to equity funds, the truth is that there has been a net outflow from equity funds )as it has been for the past two years), and the money-creation-machine known as the Fed and its primary dealers have rigged the market higher (as usual).
Today's bid-less action, including the absurd 60-point top-to-bottom range on the Dow, was driven primarily by a rumor that two private equity firms were interested in doing an LBO on Dell. The story, broken by Bloomberg and without any supporting evidence or data, shot Dell shares through the roof and triggered a circuit-breaking halting trading.
The story was likely pure fabrication, because the markets are so dead right now the algos needed a boost to get the indices off UNCH and got it from the Dell "rumor."
Nothing is moving. Volume on the NASDAQ - despite the Dell joke and Apple (AAPL) being sold down the river - was less than 3 billion shares, an oddity even in this low-volume regime. Nobody is trading - not retail investors, at least - because the fraud and rigging has finally reached a point at which the markets cannot be trusted at all. They are controlled by the same people and companies that brought us the sub-prime mess, resultant crash and the current, fudged "recovery."
Perception being more powerful than reality, there's a very good chance that the major indices could stagnate for the rest of the month and the same talking heads on the financial networks will tell us it's going to be a great year because January was positive.
It's. Not. Working.
Dow 13,507.32, +18.89 (0.14%)
NASDAQ 3,117.50, -8.13 (0.26%)
S&P 500 1,470.68, -1.37 (0.09%)
NYSE Composite 8,717.45, +5.05 (0.06%)
NASDAQ Volume 1,879,408,375
NYSE Volume 2,956,360,000
Combined NYSE & NASDAQ Advance - Decline: 3118-3099
Combined NYSE & NASDAQ New highs - New lows: 370-10 (ridiculous)
WTI crude oil: 94.14, +0.58
Gold: 1,669.40, +8.80
Silver: 31.11, +0.702
This tired line of non-logical thinking gets bantered about every year around this time, but is especially in vogue this year after the huge ramp-up in equities on January 2nd, when fresh bank capital (courtesy of the Fed) flowed into the markets in an effort to lure in retail investors.
It's not working.
Since the biggest gain on the Dow Industrials to start a new year (January 2nd, 2013... this year) stocks have gone, well, not very far. The total gain on the Dow over the past eight sessions, including today, is less than 100 points. Big Hooray!
On the S&P 500, the gain has been a whopping eight points. The NASDAQ? 5.24 points since the massive, 92-point gain of January 2nd.
So, the point is that while CNBC and Bloomberg have been crowing about the huge "inflows" to equity funds, the truth is that there has been a net outflow from equity funds )as it has been for the past two years), and the money-creation-machine known as the Fed and its primary dealers have rigged the market higher (as usual).
Today's bid-less action, including the absurd 60-point top-to-bottom range on the Dow, was driven primarily by a rumor that two private equity firms were interested in doing an LBO on Dell. The story, broken by Bloomberg and without any supporting evidence or data, shot Dell shares through the roof and triggered a circuit-breaking halting trading.
The story was likely pure fabrication, because the markets are so dead right now the algos needed a boost to get the indices off UNCH and got it from the Dell "rumor."
Nothing is moving. Volume on the NASDAQ - despite the Dell joke and Apple (AAPL) being sold down the river - was less than 3 billion shares, an oddity even in this low-volume regime. Nobody is trading - not retail investors, at least - because the fraud and rigging has finally reached a point at which the markets cannot be trusted at all. They are controlled by the same people and companies that brought us the sub-prime mess, resultant crash and the current, fudged "recovery."
Perception being more powerful than reality, there's a very good chance that the major indices could stagnate for the rest of the month and the same talking heads on the financial networks will tell us it's going to be a great year because January was positive.
It's. Not. Working.
Dow 13,507.32, +18.89 (0.14%)
NASDAQ 3,117.50, -8.13 (0.26%)
S&P 500 1,470.68, -1.37 (0.09%)
NYSE Composite 8,717.45, +5.05 (0.06%)
NASDAQ Volume 1,879,408,375
NYSE Volume 2,956,360,000
Combined NYSE & NASDAQ Advance - Decline: 3118-3099
Combined NYSE & NASDAQ New highs - New lows: 370-10 (ridiculous)
WTI crude oil: 94.14, +0.58
Gold: 1,669.40, +8.80
Silver: 31.11, +0.702
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