Stocks Split in Sloppy Session; Bond Yields Rising, Oil Sliding

Stocks slid at the opening bell, with the Dow down by as many as 117 points in the first half hour of trading, but quickly reversed direction at 10:00 am EST and continued a slow but steady gain the rest of the day.

Apparently, what turned stocks around was the October ISM Services reading, which came in at a solid 55.4, a full pint better than last month's data and a huge beat to the expected 54.0.

While questions concerning the veracity of these kinds of reports after the unusually-strong Chicago PMI data a week ago continue to swirl around, the beat on services - which is now the main production engine of the US, since we've hollowed out our manufacturing core and mostly export inflation - was enough for the Wall Street crowd to lift stocks off their lows.

That they were able to keep buying interest maintained for the remainder of the session was likely due to the usual POMO injection by the Fed, allowing for rampant speculation and unusually-high leverage.

While stocks were seeing the light of day - though the NASDAQ never quite made it into positive territory, bonds were getting slammed, up six bips in yield by the end of the day, as the gains following the end of the government shutdown are gradually being eroded. The closing level of 2.66% on the 10-year note was the highest in two-and-a-half weeks.

The big story happens to be in oil, which continues its retreat from $110/barrel highs just two months ago. Another $5.00 drop in the price of WTI will put oil into a bear market, a condition nobody has considered. While low oil prices relate positively to gas at the pump and is a boost for the economy, releasing more purchasing power, the underlying causes may be more nefarious and significant.

There is, at last, a supply-demand condition that is positive for the US, as more and more oil is being produced in North America, at the same time that demand is dwindling, or rather, has been dwindling for the past three to four years. Americans have tightened their collective belts and are much more careful about their driving habits these days, as lowered incomes have left less for transportation expenses. High unemployment also pays a part, as fewer people are driving to work five or six days a week.

So, while a period of lower gas prices is cause for celebration, the party may not be of the epic variety, with fewer participants and an overhang of disappointing economic circumstances.

Key numbers to watch tomorrow will be the MBA Mortgage Index (7:00 am), September Leading Indicators (10:00 am) and crude inventories (10:30 am).

Dow 15,618.22, -20.90 (0.13%)
Nasdaq 3,939.86, +3.27 (0.08%)
S&P 500 1,762.97, -4.96 (0.28%)
10-Yr Bond 2.66%, +0.06
NYSE Volume 3,485,473,500
Nasdaq Volume 1,899,388,750
Combined NYSE & NASDAQ Advance - Decline: 2064-3571
Combined NYSE & NASDAQ New highs - New lows: 248-74
WTI crude oil: 93.37, -1.25
Gold: 1,308.10, -6.60
Silver: 21.64, 0.064
Corn: 425.00, -1.25

Stocks Advance in Dull Session

Really, really dull session.

Dow 15,639.12, +23.57 (0.15%)
Nasdaq 3,936.59, +14.55 (0.37%)
S&P 500 1,767.93, +6.29 (0.36%)
10-Yr Bond 2.60%, -0.02
NYSE Volume 3,188,967,750
Nasdaq Volume 1,777,975,875
Combined NYSE & NASDAQ Advance - Decline: 3720-1864
Combined NYSE & NASDAQ New highs - New lows: 245-50
WTI crude oil: 94.62, +0.01
Gold: 1,314.70, +1.50
Silver: 21.70, -0.137
Corn: 426.25, -1.00

Stocks Up, Commodities Down; Oil Crashing

Stocks, bonds, up. Oil, gold, silver, corn, down.

WTI crude is at its lowest level since June, down $15/barrel since early September, technically in a correction. Another 6% decline in crude (about $5.60) will put crude into a bear market, which will be great for consumers.

Economy still incredibly weak, despite close to all-time highs on major indices.

Dow 15,615.55, +69.80 (0.45%)
Nasdaq 3,922.04, +2.34 (0.06%)
S&P 500 1,761.64, +5.10 (0.29%)
10-Yr Bond 2.62%, +0.08
NYSE Volume 3,703,160,500
Nasdaq Volume 1,917,590,125
Combined NYSE & NASDAQ Advance - Decline: 2439-3166
Combined NYSE & NASDAQ New highs - New lows: 178-65 (gap closing)
WTI crude oil: 94.61, -1.77
Gold: 1,313.20, -10.50
Silver: 21.84, -0.03
Corn: 427.25, -1.00

Stocks, Gold Silver Beaten Mercilessly; Boo!

Pretty ugly day all around. In addition to stocks taking a hit, gold and silver were beaten down, as per usual whenever the elitist scum feels threatened.

Not much else to report except a ridiculous - to the upside - Chicago PMI report, which surged at the fastest rate in over 30 years.

Dow 15,545.75, -73.01 (0.47%)
Nasdaq 3,919.71, -10.91 (0.28%)
S&P 500 1,756.54, -6.77 (0.38%)
10-Yr Bond 2.54%, +0.02
NYSE Volume 3,825,998,000
Nasdaq Volume 2,187,464,000
Combined NYSE & NASDAQ Advance - Decline: 2193-3400
Combined NYSE & NASDAQ New highs - New lows: 240-69
WTI crude oil: 96.38, -0.39
Gold: 1,323.70, -25.60
Silver: 21.87, -1.116
Corn: 428.25, -2.00

Fed Keeps QE at Full Throttle, Stocks, Markets Still Unhappy; ADP Misses

In September, when everybody thought the Fed was going to announce a scaling-back of their $85 billion-a-month bond buying bonanza, stocks rallied when they did nothing.

Today, when the Fed did exactly what the market expected, keeping the bond buying going full force with no mention of "tapering," stocks sold off, extending a decline that started in slow motion shortly after the opening bell.

It's probably asking too much to try and comprehend exactly what the algos or stock pickers were reading in the FOMC tea leaves, because a commitment by the Fed to continue easy money policies is exactly the best reason for equities to rise. Chalk it up to profit-taking by the slickest of the slick, on an old, "buy the rumor, sell the news" scenario.

As we've stated recently, stocks should continue to rise through the end of the year and beyond, being that there are now some unwritten rules in the market that say stocks can't decline during the Christmas season, there must be a "Santa Claus Rally" and a "New Year Rally."

So, despite this little blip of a disturbance in the force, investors should be good to go unless something really awful happens, like the economy suddenly shows unequivocal signs of strengthening.

OK, OK, stop the laughter. we all know that the economy is stuck in neutral since the Fed programs of QE and ZIRP are only beneficial to the top 1% of earners, those people you and I will never get to know personally, and that the government is going to do everything in its powers to see to it that the economy stumbles along at about 1.5-2.0% GDP growth, just enough to keep the recession dogs off the porch.

Investors and markets will digest today's losses and decide, around midnight tonight, that tomorrow morning would be a great time to add to their positions or open new ones in some of the more speculative, momentum stocks. That's really the mantra and it doesn't get any simpler.

In case nobody noticed, the October ADP jobs report showed that employment continued its gradual slowdown, adding just 130,000 net new private sector jobs - and revised September's 166,000 gain down to 145,000 - all blamed conveniently on the 16-day government shutdown earlier this month. Never mind that these are PRIVATE sector jobs and government is in the PUBLIC sector. Whatever scapegoat is available, that's the one that gets the blame.

As this missive is being prepared for publication, the president is pleading with less-than-enthusiastic supporters that the Affordable Care Act (ACA, or, ObamaCare) is going to work and actually good for America, despite all indications to the contrary.

You have officially entered the bizarro-zone and there is no escape if you keep watching the teevee.

Buy stocks. Can't miss.

Dow 15,618.76, -61.59 (0.39%)
Nasdaq 3,930.62, -21.72 (0.55%)
S&P 500 1,763.31, -8.64 (0.49%)
10-Yr Bond 2.53%, +0.02
NYSE Volume 3,486,428,250
Nasdaq Volume 1,795,014,125
Combined NYSE & NASDAQ Advance - Decline: 1596-4053
Combined NYSE & NASDAQ New highs - New lows: 487-42
WTI crude oil: 96.77, -1.43
Gold: 1,349.30, +3.80
Silver: 22.98, +0.491
Corn: 430.25, -1.75 (new 52-week low)