The world is awash in liquidity, but nobody seems to have any money.
At least that is the case for the 90% of Americans - and probably 95% of the rest of the world - that don't have access to easy money from central banks around the world.
Consider today's action by the Bank of Japan's new finance minister Haruhiko Kuroda, pladging unprecedented monetary stimulus by doubling Japan's central bank balance sheet by the end of 2014 through outright purchases of government bonds, ranging anywhere from short term notes to the 40-year Japanese bond.
The move puts Japan on a par with the mad money printer, Ben Bernanke, and in the same camp as the ECB's Mario Draghi, who vowed last year to do anything possible to save the Euro.
Such policies, like the Fed's $85 billion monthly purchases of treasuries and MBS (near-worthless), would have been unheard of just ten years ago, but today they are accepted as matter-of-fact as the bank heads continue trying to prop up zombie banks that have been bankrupt since 2008 (1992 in Japan's case) and governments which made promises to their people in the form of health care and retirement benefits that are slowly but surely bankrupting their entire nations.
These policies are doomed to fail, as they inflate various economies, crushing the purchasing power of the average citizen to a point at which many are priced out of mere survival. Ergo, the 49 million Americans receiving food stamps, unprecedented numbers on disability or welfare, programs which strip away the dignity of the individual, making them wards of the state.
Governments worldwide cannot balance their budgets due to these absurd entitlement programs, yet common people go about their business like the legendary "Annie Hall," tripping through life, dismissing any pitfalls with a cheery "la-dee-da."
Wall Street and the markets in Japan, London and Europe are no different. Obvious economic headwinds, like today's massive miss on first time unemployment claims (385,000 on expectations of 345K) are simply shrugged off as investors have no other place to put money to work but in risky stocks, though the correct strategy in times of impending hyper-inflation would be to park in cash and tangible assets such as land, gold, silver and productive machinery, because today's prices will look like peanuts compared to what people will be paying once the inflation tiger is unleashed.
Thus far, central bankers have been lucky. Inflation hasn't been all that ferocious, though spikes in oil, gas, food and other commodities have already been notable. Keeping inflation in line has been the stagnant to negative growth of incomes. With less money, people simply can't afford to splurge, and if less money is chasing the same amount of goods, prices will remain relatively stable, though that certainly cannot be guaranteed with the incredible amount of liquidity being force-fed into the system.
Also aiding their efforts is the fact that most of the inflation has been in stocks, which are ridiculously priced. All this may be coming to an abrupt ending with first quarter earnings reports. Many companies are just barely making their estimates even though the bar continues to be lowered. At some point, investors will demand more, along the lines of 15% year-over-year earnings acceleration, higher dividends and better margins, all the things a healthy market economy would normally expect.
Earnings begin trickling out on Monday, but before that, Friday's non-farm payroll report for March needs to be presented, and, from the looks of the close today, nobody is really sweating that.
After the last three weeks of unemployment figures, however, maybe they should.
Dow 14,606.11, +55.76 (0.38%)
NASDAQ 3,224.98, +6.38 (0.20%)
S&P 500 1,559.98, +6.29 (0.40%)
NYSE Composite 9,027.83, +44.44 (0.49%)
NASDAQ Volume 1,470,237,625
NYSE Volume 3,566,827,500
Combined NYSE & NASDAQ Advance - Decline: 4003-2357
Combined NYSE & NASDAQ New highs - New lows: 123-65
WTI crude oil: 93.26, -1.19
Gold: 1,552.40, -1.10
Silver: 26.77, -0.03
Thursday, April 4, 2013
Wednesday, April 3, 2013
Something's Up... and it's Not the Stock Market
Intuition is vastly underrated by the scientific or technological community.
Understanding that the twinge of doubt or "gut feeling" is more than just an emotional reaction but in reality a hot process of accumulated experiences - some deeply-rooted and ancestral, others from immediate life experience - raises the process of intuitive thinking to a better standing, one that can assimilate data in microseconds and respond with appropriate action.
It's something along the lines of survival instinct in animals, who will move quickly at the rustling of leaves or changes in the flow of a stream. Humans, plugged into cell phones, iPods and a dizzying array of self-created distractions often don't have access to their own intuitiveness in the way other creatures do, but, sometimes, the clues are just too obvious to miss.
Such was the case with today's market action.
First, the ADP employment report for March, released prior to the opening bell, offered the second of three straight data point this week that was of a negative nature. The creation of 158,000 new jobs in the month was well short of the anticipated 197,000, and a precursor to Friday's "all-important" Non-farm payroll data from the BLS.
The other two data points on the negative side were the drop in the ISM index on Monday and the ISM Services index drop at 10:00 am EDT, that showed a slowdown to 54.4 from 56.0 in February.
Those were the catalysts to some pretty serious selling in equities, but also in gold, silver, oil, copper, corn, financial stocks, and a boost in bonds that sent yields lower, a trend that seems to be quite well-entrenched of late.
By midday, it was fairly obvious that everything was falling at the same time, which is not normal. On top of the usual market issues, the North Korean nut case keeps ramping up the rhetoric - the US responding with ongoing escalation - and the vision of depositor funds being vanished from bank accounts in Cyprus still fresh, the notion that things were fast unraveling was hard to miss.
Analysts of various stripes have been warning about a downturn in the markets for weeks, if not months, and the 100+ point decline on the Dow may serve notice that the top is in and everything from here to October (if we're lucky) is going to be downhill. The more obvious evidence comes in the form of the crumbling US economy, boosted with easy money, welfare checks, food stamps, disability payments and other government transfer payments that still cannot produce a GDP growing at faster than a two percent clip.
All the evidence is out there, in front of everyone's eyes, but it seemed that only today, the buzz-heads and stock jocks in equity la-la-land finally took the bait and took a big chunk out of the normalcy bias that pervades trading desks and the floors of the exchanges.
There was actual fear in the air, rather than the usual blather that the "Fed has our back," that has been conventional wisdom for the past four-plus years.
In effect, it's the Fed that has caused, in large part, the continuum of crisis that continues unabated, their easy money policies creating distortions of immense proportions, so that almost everything is mis-priced, mis-allocated and misinterpreted, the result being one massive, global mistake of monetary mismanagement that threatens the entire financial and social fabric of the planet.
It didn't take a genius to figure all of this out, just a feeling, that when everything began falling, the tumbling would not stop, the last time this happened (our minds reeling and whirring like the great analytical tools they are) was September of 2008, when Lehman Brothers was about to go under and the world changed - not for the better.
Mark this date, because it may be one for the history books, noted as the beginning of the end, when the tsunami of financial events, forestalled since the extraordinary measures of the Fed and other central banks in 2008-09, finally came rushing onshore, all at the same time, with a force and a fury that's been building since those well-embraced days of Hank Paulson putting a $700 billion gun to the head of the government and threatening to pull the trigger.
We may have weathered the storm of the past four years, but the backlash may be even worse, and it's coming faster than most people can anticipate or prepare for.
It's a funny thing about predicting disasters. You're humored or ignored or laughed at all the way up to the actual event. And then, people ask you what to do, when you've been telling them just that, all along.
Stocks may be up again tomorrow, or for the next week or month, even, but there's trouble coming, you can just feel it.
Dow 14,550.35, 111.66 (0.76%)
NASDAQ 3,218.60, -36.26 (1.11%)
S&P 500 1,553.69, -16.56 (1.05%)
NYSE Composite 8,983.40, -109.50 (1.20%)
NASDAQ Volume 1,813,335,250
NYSE Volume 4,418,003,000
Combined NYSE & NASDAQ Advance - Decline: 1499-4977 (huge)
Combined NYSE & NASDAQ New highs - New lows: 182-92 (tighter)
WTI crude oil: 94.45, -2.74
Gold: 1,553.50, -22.40
Silver: 26.80, -0.451
Understanding that the twinge of doubt or "gut feeling" is more than just an emotional reaction but in reality a hot process of accumulated experiences - some deeply-rooted and ancestral, others from immediate life experience - raises the process of intuitive thinking to a better standing, one that can assimilate data in microseconds and respond with appropriate action.
It's something along the lines of survival instinct in animals, who will move quickly at the rustling of leaves or changes in the flow of a stream. Humans, plugged into cell phones, iPods and a dizzying array of self-created distractions often don't have access to their own intuitiveness in the way other creatures do, but, sometimes, the clues are just too obvious to miss.
Such was the case with today's market action.
First, the ADP employment report for March, released prior to the opening bell, offered the second of three straight data point this week that was of a negative nature. The creation of 158,000 new jobs in the month was well short of the anticipated 197,000, and a precursor to Friday's "all-important" Non-farm payroll data from the BLS.
The other two data points on the negative side were the drop in the ISM index on Monday and the ISM Services index drop at 10:00 am EDT, that showed a slowdown to 54.4 from 56.0 in February.
Those were the catalysts to some pretty serious selling in equities, but also in gold, silver, oil, copper, corn, financial stocks, and a boost in bonds that sent yields lower, a trend that seems to be quite well-entrenched of late.
By midday, it was fairly obvious that everything was falling at the same time, which is not normal. On top of the usual market issues, the North Korean nut case keeps ramping up the rhetoric - the US responding with ongoing escalation - and the vision of depositor funds being vanished from bank accounts in Cyprus still fresh, the notion that things were fast unraveling was hard to miss.
Analysts of various stripes have been warning about a downturn in the markets for weeks, if not months, and the 100+ point decline on the Dow may serve notice that the top is in and everything from here to October (if we're lucky) is going to be downhill. The more obvious evidence comes in the form of the crumbling US economy, boosted with easy money, welfare checks, food stamps, disability payments and other government transfer payments that still cannot produce a GDP growing at faster than a two percent clip.
All the evidence is out there, in front of everyone's eyes, but it seemed that only today, the buzz-heads and stock jocks in equity la-la-land finally took the bait and took a big chunk out of the normalcy bias that pervades trading desks and the floors of the exchanges.
There was actual fear in the air, rather than the usual blather that the "Fed has our back," that has been conventional wisdom for the past four-plus years.
In effect, it's the Fed that has caused, in large part, the continuum of crisis that continues unabated, their easy money policies creating distortions of immense proportions, so that almost everything is mis-priced, mis-allocated and misinterpreted, the result being one massive, global mistake of monetary mismanagement that threatens the entire financial and social fabric of the planet.
It didn't take a genius to figure all of this out, just a feeling, that when everything began falling, the tumbling would not stop, the last time this happened (our minds reeling and whirring like the great analytical tools they are) was September of 2008, when Lehman Brothers was about to go under and the world changed - not for the better.
Mark this date, because it may be one for the history books, noted as the beginning of the end, when the tsunami of financial events, forestalled since the extraordinary measures of the Fed and other central banks in 2008-09, finally came rushing onshore, all at the same time, with a force and a fury that's been building since those well-embraced days of Hank Paulson putting a $700 billion gun to the head of the government and threatening to pull the trigger.
We may have weathered the storm of the past four years, but the backlash may be even worse, and it's coming faster than most people can anticipate or prepare for.
It's a funny thing about predicting disasters. You're humored or ignored or laughed at all the way up to the actual event. And then, people ask you what to do, when you've been telling them just that, all along.
Stocks may be up again tomorrow, or for the next week or month, even, but there's trouble coming, you can just feel it.
Dow 14,550.35, 111.66 (0.76%)
NASDAQ 3,218.60, -36.26 (1.11%)
S&P 500 1,553.69, -16.56 (1.05%)
NYSE Composite 8,983.40, -109.50 (1.20%)
NASDAQ Volume 1,813,335,250
NYSE Volume 4,418,003,000
Combined NYSE & NASDAQ Advance - Decline: 1499-4977 (huge)
Combined NYSE & NASDAQ New highs - New lows: 182-92 (tighter)
WTI crude oil: 94.45, -2.74
Gold: 1,553.50, -22.40
Silver: 26.80, -0.451
Tuesday, April 2, 2013
Stocks Rise on Vapors
Strange as it may seem, today's gains by the three most closely-watched indices - Dow, S&P, NASDAQ - were accompanied by a loss in the index with the widest representation, the NYSE Composite.
The drop was a small one, but it also pointed to the imbalance in the day's advance-decline line, which finished slightly in the red (see below), the point being that while stocks were up in a general sense and the headlines will scream that Dow and S&P reached new all-time closing highs, the truth is that breadth has deteriorated, as was the case on Monday, when the indices all dripped lower.
There wasn't much for the market to get excited about other than the unexpected boost in Medicare Advantage payouts, which will not be cut by the previously expected 2.2%, but will actually increase by 3.3%. That boosted shares of medical insurers, including United Health (UNH), which was the best performer on the Dow and accounted for much of the day's advance.
Wednesday will offer the first peek at employment when the ADP Private Payrolls report is issued prior to the opening bell. Expectations are that the economy created 197,000 new jobs in March.
Gold and silver were smashed lower, as pressures from Cyprus appear to be easing (out of sight, out of mind) and a sense of normalcy has returned - for now. At least there's only one David Stockman writing op-eds about how the rich are among the very few beneficiaries of the stock market rebound pointing out that the whole turnaround in stocks is due to massive, unconventional easing by the Federal Reserve.
Dow 14,662.01, +89.16 (0.61%)
NASDAQ 3,254.86, +15.69 (0.48%)
S&P 500 1,570.25, +8.08 (0.52%)
NYSE Composite 9,092.90, -14.86 (0.16%)
NASDAQ Volume 1,588,906,625
NYSE Volume 3,609,905,750
Combined NYSE & NASDAQ Advance - Decline: 3039-3378
Combined NYSE & NASDAQ New highs - New lows: 412-53
WTI crude oil: 97.19, +0.12
Gold: 1,575.90, -25.00
Silver: 27.25, -0.696
The drop was a small one, but it also pointed to the imbalance in the day's advance-decline line, which finished slightly in the red (see below), the point being that while stocks were up in a general sense and the headlines will scream that Dow and S&P reached new all-time closing highs, the truth is that breadth has deteriorated, as was the case on Monday, when the indices all dripped lower.
There wasn't much for the market to get excited about other than the unexpected boost in Medicare Advantage payouts, which will not be cut by the previously expected 2.2%, but will actually increase by 3.3%. That boosted shares of medical insurers, including United Health (UNH), which was the best performer on the Dow and accounted for much of the day's advance.
Wednesday will offer the first peek at employment when the ADP Private Payrolls report is issued prior to the opening bell. Expectations are that the economy created 197,000 new jobs in March.
Gold and silver were smashed lower, as pressures from Cyprus appear to be easing (out of sight, out of mind) and a sense of normalcy has returned - for now. At least there's only one David Stockman writing op-eds about how the rich are among the very few beneficiaries of the stock market rebound pointing out that the whole turnaround in stocks is due to massive, unconventional easing by the Federal Reserve.
Dow 14,662.01, +89.16 (0.61%)
NASDAQ 3,254.86, +15.69 (0.48%)
S&P 500 1,570.25, +8.08 (0.52%)
NYSE Composite 9,092.90, -14.86 (0.16%)
NASDAQ Volume 1,588,906,625
NYSE Volume 3,609,905,750
Combined NYSE & NASDAQ Advance - Decline: 3039-3378
Combined NYSE & NASDAQ New highs - New lows: 412-53
WTI crude oil: 97.19, +0.12
Gold: 1,575.90, -25.00
Silver: 27.25, -0.696
Monday, April 1, 2013
April's Fools? 2nd Quarter Off to Poor Start; David Stockman Op-Ed on the Money
US stocks got ramped pretty hard in the first quarter of 2013, with the Dow up 11% and the S&P tagging along with a 10% gain.
In more normal economic times, those first quarter returns would equate into a rather solid year of gains, but in the "new normal" of Fed pumping of $85 billion monthly into the economy, through treasury and MBS purchases (both probably losing investments), it's just more of the same: profits for Wall Street traders and bankers, crumbs for the American public.
Stocks struggled right from the opening bell and traded in fairly narrow ranges on the major indices, with the NASDAQ being the hardest hit, oddly, since the NAZ is home to some of the more speculative darlings which Wall Street loves to pump (and dump).
So, the Dow and S&P set all-time highs at the close of the first quarter, but cascading headlong into earnings season, some investors are apparently not so sure those levels can be maintained.
Now that Cyprus is out of the headlines but not out of the memories of bank depositors worldwide, there's reason to believe the skeptics are correct, especially if one was to read the scathing op-ed by former congressman and budget director under Ronald Reagan, David Stockman, which appeared glaringly in Easter Sunday's New York Times, an oddity for the newspaper so beloved by liberals and adherents of Obama-nomics.
The opinion piece, aptly titled, "Sundown in America" detailed a litany of statistics and trends that protray America as a failing economy headed by a flailing Federal Reserve, which has embarked upon, in Stockman's words, "a radical, uncharted spree of money printing."
It's a must-read for anyone who doesn't believe the stats trotted out by the usual bullish analysts and government mouthpieces, because it debunks the myths surrounding unemployment figures, growth projections, the sustainability of enormous government deficits and the inevitable end-game of a bond market bubble of massive proportions.
For those who wish to remain soothed by willful ignorance (99% of the population), skip it and just go shopping, cell phone in hand, of course, believing that everything is under control and those problems we hear about in other countries simply can't happen here, because we're America, damn it.
However, those who believe what their own eyes see and their own ears hear, might want to ponder the long-term ramifications of more than a decade of easy money, electronically printed into existence by the Federal Reserve and dutifully sucked up by the thieving class of politicians and bankers that have profited handsomely while the rest of the country suffered and continues to wallow in a slow-to-no-growth environment.
Additionally, the one statistic of note today was the March reading of the ISM index, which fell to a ten-month low of 51.3 on a forecast of 54.0, after positing a splendid 54.2 in February. One of the more closely-watched numbers on Wall Street delivered what may be the first of many blows to confidence of market gain continuity this week.
Whatever the case, the double whammy of Stockton's searing indictment of US fiscal and monetary policies and a poor reading on manufacturing, was net negative for equities today.
Beyond that, volume fell to it's lowest level of the year and the advance-decline line was the worst in weeks, prompting concerns that those who were eating well in the first quarter may become the meal in the second three months of the year.
Dow 14,572.85, -5.69 (0.04%)
NASDAQ 3,239.17, -28.35 (0.87%)
S&P 500 1,562.17, -7.02 (0.45%)
NYSE Composite 9,057.65, -49.39 (0.54%)
NASDAQ Volume 1,446,869,375
NYSE Volume 3,019,881,750
Combined NYSE & NASDAQ Advance - Decline: 1900-4482
Combined NYSE & NASDAQ New highs - New lows: 357-60
WTI crude oil: 97.07, -0.16
Gold: 1,600.90, +5.20
Silver: 27.94, -0.379
In more normal economic times, those first quarter returns would equate into a rather solid year of gains, but in the "new normal" of Fed pumping of $85 billion monthly into the economy, through treasury and MBS purchases (both probably losing investments), it's just more of the same: profits for Wall Street traders and bankers, crumbs for the American public.
Stocks struggled right from the opening bell and traded in fairly narrow ranges on the major indices, with the NASDAQ being the hardest hit, oddly, since the NAZ is home to some of the more speculative darlings which Wall Street loves to pump (and dump).
So, the Dow and S&P set all-time highs at the close of the first quarter, but cascading headlong into earnings season, some investors are apparently not so sure those levels can be maintained.
Now that Cyprus is out of the headlines but not out of the memories of bank depositors worldwide, there's reason to believe the skeptics are correct, especially if one was to read the scathing op-ed by former congressman and budget director under Ronald Reagan, David Stockman, which appeared glaringly in Easter Sunday's New York Times, an oddity for the newspaper so beloved by liberals and adherents of Obama-nomics.
The opinion piece, aptly titled, "Sundown in America" detailed a litany of statistics and trends that protray America as a failing economy headed by a flailing Federal Reserve, which has embarked upon, in Stockman's words, "a radical, uncharted spree of money printing."
It's a must-read for anyone who doesn't believe the stats trotted out by the usual bullish analysts and government mouthpieces, because it debunks the myths surrounding unemployment figures, growth projections, the sustainability of enormous government deficits and the inevitable end-game of a bond market bubble of massive proportions.
For those who wish to remain soothed by willful ignorance (99% of the population), skip it and just go shopping, cell phone in hand, of course, believing that everything is under control and those problems we hear about in other countries simply can't happen here, because we're America, damn it.
However, those who believe what their own eyes see and their own ears hear, might want to ponder the long-term ramifications of more than a decade of easy money, electronically printed into existence by the Federal Reserve and dutifully sucked up by the thieving class of politicians and bankers that have profited handsomely while the rest of the country suffered and continues to wallow in a slow-to-no-growth environment.
Additionally, the one statistic of note today was the March reading of the ISM index, which fell to a ten-month low of 51.3 on a forecast of 54.0, after positing a splendid 54.2 in February. One of the more closely-watched numbers on Wall Street delivered what may be the first of many blows to confidence of market gain continuity this week.
Whatever the case, the double whammy of Stockton's searing indictment of US fiscal and monetary policies and a poor reading on manufacturing, was net negative for equities today.
Beyond that, volume fell to it's lowest level of the year and the advance-decline line was the worst in weeks, prompting concerns that those who were eating well in the first quarter may become the meal in the second three months of the year.
Dow 14,572.85, -5.69 (0.04%)
NASDAQ 3,239.17, -28.35 (0.87%)
S&P 500 1,562.17, -7.02 (0.45%)
NYSE Composite 9,057.65, -49.39 (0.54%)
NASDAQ Volume 1,446,869,375
NYSE Volume 3,019,881,750
Combined NYSE & NASDAQ Advance - Decline: 1900-4482
Combined NYSE & NASDAQ New highs - New lows: 357-60
WTI crude oil: 97.07, -0.16
Gold: 1,600.90, +5.20
Silver: 27.94, -0.379
Thursday, March 28, 2013
Cyprus Banks Re-Open; S&P Makes New All-Time High
Not certain which of these two historic events will eventually bear more weight, but the banks in Cyprus opened at noon (Cyprus time) on Thursday after being shuttered for more than two weeks and the S&P made an all-time closing high.
For investors, the S&P event is a watershed moment, capping a long bull run of just over four years that began at 666 on the index and now closes nearly 100 points better.
For the citizens of Cyprus, the events of the past two weeks and the reopening of the banks today will have great weight, but in the opposite direction. Now that the banking situation in the Mediterranean island nation are more or less "normalized" - with uninsured depositors (over 100,000 euros) likely to lose 40% or more of their deposits - and the country headed directly into a depression, the contagion, for now, limited, though anybody with large deposits in any European bank has to be walking on eggshells presently.
The limits for Cypriots are stiff: withdrawals from banks are limited to 300 euros per day; checks cannot be cashed, only deposited; leaving the island with more than 3000 euros is outlawed. Welcome to the Cyprus debt prison and hotel. Payrolls are exempt from limits as the banking officials want to see money circulating to some degree, though people will be surely more frugal in their spending habits.
The Dow closed at another record high and ends the quarter (Markets are closed Friday) up 11%, marking the best quarterly returns since 1998. The S&P was right behind, clocking a 10% return for the quarter.
As the market has shown throughout the four-year bull run, news doesn't matter; it's all good on Wall Street. The Chicago Purchasing Managers' Index fell to 52.4 in March, down sharply from the 56.8 reported in February.
Initial jobless claims also cam in worse than expected, rising to 357K, up from 341K in the prior week.
Monday is the start of a new month and a new quarter, as well as being April Fool's Day, which begs the question: who will be the fools, those who exited on the record high today or those looking to squeeze more gains out of the long-running bull market?
The highs on the S&P are nominal ones, slightly above levels hit in 2000 and 2007, more commonly known as a triple top.
It's never a good idea to buy high, because you're likely to end up selling lower, but it's really tough to bet against Ben Bernanke and the Fed printing presses churning out $85 billion a month in free money. The sprinters are far ahead at the moment, but investing is more of a marathon. And, don't forget, this rally has been built not only on quickly depreciating greenbacks but on horrifyingly low volume. Additionally, the advance-Decline line has been exhibiting much less breadth than one would normally associate with a raging bull.
Pick your poison, but don't keep all your eggs in one basket.
Happy Easter!
Dow 14,578.54, +52.38 (0.36%)
NASDAQ 3,267.52, +11.00 (0.34%)
S&P 500 1,569.19, +6.34 (0.41%)
NYSE Composite 9,106.83, +36.38 (0.40%)
NASDAQ Volume 1,555,418,875.00
NYSE Volume 3,481,085,250
Combined NYSE & NASDAQ Advance - Decline: 3865-2537
Combined NYSE & NASDAQ New highs - New lows: 557-32
WTI crude oil: 97.23, +0.65
Gold: 1,594.80, -11.40
Silver: 28.32, -0.289
For investors, the S&P event is a watershed moment, capping a long bull run of just over four years that began at 666 on the index and now closes nearly 100 points better.
For the citizens of Cyprus, the events of the past two weeks and the reopening of the banks today will have great weight, but in the opposite direction. Now that the banking situation in the Mediterranean island nation are more or less "normalized" - with uninsured depositors (over 100,000 euros) likely to lose 40% or more of their deposits - and the country headed directly into a depression, the contagion, for now, limited, though anybody with large deposits in any European bank has to be walking on eggshells presently.
The limits for Cypriots are stiff: withdrawals from banks are limited to 300 euros per day; checks cannot be cashed, only deposited; leaving the island with more than 3000 euros is outlawed. Welcome to the Cyprus debt prison and hotel. Payrolls are exempt from limits as the banking officials want to see money circulating to some degree, though people will be surely more frugal in their spending habits.
The Dow closed at another record high and ends the quarter (Markets are closed Friday) up 11%, marking the best quarterly returns since 1998. The S&P was right behind, clocking a 10% return for the quarter.
As the market has shown throughout the four-year bull run, news doesn't matter; it's all good on Wall Street. The Chicago Purchasing Managers' Index fell to 52.4 in March, down sharply from the 56.8 reported in February.
Initial jobless claims also cam in worse than expected, rising to 357K, up from 341K in the prior week.
Monday is the start of a new month and a new quarter, as well as being April Fool's Day, which begs the question: who will be the fools, those who exited on the record high today or those looking to squeeze more gains out of the long-running bull market?
The highs on the S&P are nominal ones, slightly above levels hit in 2000 and 2007, more commonly known as a triple top.
It's never a good idea to buy high, because you're likely to end up selling lower, but it's really tough to bet against Ben Bernanke and the Fed printing presses churning out $85 billion a month in free money. The sprinters are far ahead at the moment, but investing is more of a marathon. And, don't forget, this rally has been built not only on quickly depreciating greenbacks but on horrifyingly low volume. Additionally, the advance-Decline line has been exhibiting much less breadth than one would normally associate with a raging bull.
Pick your poison, but don't keep all your eggs in one basket.
Happy Easter!
Dow 14,578.54, +52.38 (0.36%)
NASDAQ 3,267.52, +11.00 (0.34%)
S&P 500 1,569.19, +6.34 (0.41%)
NYSE Composite 9,106.83, +36.38 (0.40%)
NASDAQ Volume 1,555,418,875.00
NYSE Volume 3,481,085,250
Combined NYSE & NASDAQ Advance - Decline: 3865-2537
Combined NYSE & NASDAQ New highs - New lows: 557-32
WTI crude oil: 97.23, +0.65
Gold: 1,594.80, -11.40
Silver: 28.32, -0.289
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