Stocks flew at the open, making the highs of the session, then backtracked, recovered and finally flat-lined until 3:00 pm ET, when selling commenced, taking the indices back to break-even for the day.
It was mostly a senseless trade, kicking off a holiday-shortened week which will feature lower volume than usual (if that's possible) and giddiness surrounding the holiday shopping season, which almost always produces an up session on the short Friday after Thanksgiving.
A few friends were commenting on the wisdom of a buy and hold strategy for the long haul as the Dow Jones Industrials crossed the 16,000 threshold this past Friday. One idea was that holding an index fund of Dow stocks from late 1982 to the present would have resulted in a 16X return on your money, or $10,000 invested in the Dow in 1982 - the last time the Dow crossed the 1000 mark and did not fall below it - would be worth $160,000 today.
It's an interesting concept, but, in case somebody wanted to just buy all the individual stocks in the Dow 30 blue chips, it would have probably been a more profitable, albeit time-consuming endeavor. Of the 30 stocks in the Dow today, only 10 of them were part of the index back in late 1982.
Those ten are AT&T, American Express, IBM, duPont, 3M, Proctor & Gamble, GE, United Technologies, Merck and Exxon (merged with Mobil to form ExxonMobil).
In those 31 years, the composition of the Dow changed 13 times, including eight times since 2003. Not to say that the stocks in the Dow are all magnificent winners, but how one gets a 16X return is by taking out under-performers and replacing them with stocks which have a better chance of appreciation, kind of a shell game, though one could have done well just holding any fund indexed to the famous average.
By way of comparison, the S&P 500 rose from about 140 to the current level just above 1800 in the same time period, a gain of just over 13X. Of course, the S&P has even more movement in and out of the index, and weightings are changed periodically. Overall, it gets re-jiggered more often than the Dow.
It's how Wall Street produces outsize profits for investors; they change the game constantly or as conditions warrant. It begs the question of the wisdom of individual issues and fast money trading.
"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." --Henry Ford
DOW 16,072.54, +7.77 (+0.05%)
NASDAQ 3,994.57, +2.92 (+0.07%)
S&P 1,802.48, -2.28 (-0.13%)
10-Yr Note 100.10 +0.09 (+0.09%)
NASDAQ Volume 1.74 Bil
NYSE Volume 2.99 Bil
Combined NYSE & NASDAQ Advance - Decline: 2701-2954
Combined NYSE & NASDAQ New highs - New lows: 532-96
WTI crude oil: 94.09, -0.75
Gold: 1,241.20, -2.90
Silver: 19.88, +0.02
Corn: 431.25, +2.00
Monday, November 25, 2013
Friday, November 22, 2013
50 Years Ago and We Still Don't Know Why Kennedy Was Killed
Please, no matter what you may believe, instead of reading articles or watching videos, just contemplate the Kennedy assassination for a few moments.
Food for thought, presented without comment.
DOW 16,064.77, +54.78 (+0.34%)
NASDAQ 3,991.65, +22.49 (+0.57%)
S&P 1,804.76, +8.91 (+0.50%)
10-Yr Note 99.94, +0.72 (+0.73%)
Combined NYSE & NASDAQ Advance - Decline: 3500-2147
NASDAQ Volume 1.65 Bil
NYSE Volume 2.96 Bil
Combined NYSE & NASDAQ New highs - New lows: 461-76
WTI crude oil: 94.84, -0.60
Gold: 1,244.10, +0.50
Silver: 19.86, -0.072
Corn: 429.25, -0.25
Food for thought, presented without comment.
DOW 16,064.77, +54.78 (+0.34%)
NASDAQ 3,991.65, +22.49 (+0.57%)
S&P 1,804.76, +8.91 (+0.50%)
10-Yr Note 99.94, +0.72 (+0.73%)
Combined NYSE & NASDAQ Advance - Decline: 3500-2147
NASDAQ Volume 1.65 Bil
NYSE Volume 2.96 Bil
Combined NYSE & NASDAQ New highs - New lows: 461-76
WTI crude oil: 94.84, -0.60
Gold: 1,244.10, +0.50
Silver: 19.86, -0.072
Corn: 429.25, -0.25
Thursday, November 21, 2013
Stocks Pop on Bad News from Philly Fed
Well, bad news for the economy is apparently good news for Wall Street once again.
The Philadelphia Fed's Index of business activity in the Mid-Atlantic region slowed significantly, according to the report issued today, which showed the index falling from 19.8 in October, to 6.5 in November, a drop that exceeded even the most pessimistic estimates.
The consensus was for the index to come in with a reading of 15.0, but the number was well below that. The convoluted thinking dominating the financial world today must have seen this as yet another sign of slowing economic activity, making it next to impossible for the Federal Reserve to begin slowing its monthly bond purchases from their current $85 billion per month.
Stocks, which were already showing healthy gains before the 10:00 am ET release, chopped their way higher throughout the session, with the Dow Jones Industrials ending the day at an all-time closing high.
With an eroding base economy and billions of created-out-of-thin-air dollars flooding the coffers of the primary dealers via the Fed, the market pricing mechanism is as broken as it has ever been in the history of economics.
Fantasy accounting, assets marked to nothing or anything, and all the other central bank meddling and criminality undertaken by Wall Street and global banking interests will eventually find its way back into the real world. The result may not be to the liking of anybody.
DOW 16,009.99, +109.17 (+0.69%)
NASDAQ 3,969.15, +47.88 (+1.22%)
S&P 1,795.85, +14.48 (+0.81%)
10-Yr Note 99.65, +0.48 (+0.49%)
NASDAQ Volume 1.64 Bil.
NYSE Volume 3.25 Bil.
Combined NYSE & NASDAQ Advance - Decline: 4246-1420
Combined NYSE & NASDAQ New highs - New lows: 327-102
WTI crude oil: 95.44, +1.59
Gold: 1,243.60, -14.40
Silver: 19.93, -0.124
Corn: 429.50, +4.25
The Philadelphia Fed's Index of business activity in the Mid-Atlantic region slowed significantly, according to the report issued today, which showed the index falling from 19.8 in October, to 6.5 in November, a drop that exceeded even the most pessimistic estimates.
The consensus was for the index to come in with a reading of 15.0, but the number was well below that. The convoluted thinking dominating the financial world today must have seen this as yet another sign of slowing economic activity, making it next to impossible for the Federal Reserve to begin slowing its monthly bond purchases from their current $85 billion per month.
Stocks, which were already showing healthy gains before the 10:00 am ET release, chopped their way higher throughout the session, with the Dow Jones Industrials ending the day at an all-time closing high.
With an eroding base economy and billions of created-out-of-thin-air dollars flooding the coffers of the primary dealers via the Fed, the market pricing mechanism is as broken as it has ever been in the history of economics.
Fantasy accounting, assets marked to nothing or anything, and all the other central bank meddling and criminality undertaken by Wall Street and global banking interests will eventually find its way back into the real world. The result may not be to the liking of anybody.
DOW 16,009.99, +109.17 (+0.69%)
NASDAQ 3,969.15, +47.88 (+1.22%)
S&P 1,795.85, +14.48 (+0.81%)
10-Yr Note 99.65, +0.48 (+0.49%)
NASDAQ Volume 1.64 Bil.
NYSE Volume 3.25 Bil.
Combined NYSE & NASDAQ Advance - Decline: 4246-1420
Combined NYSE & NASDAQ New highs - New lows: 327-102
WTI crude oil: 95.44, +1.59
Gold: 1,243.60, -14.40
Silver: 19.93, -0.124
Corn: 429.50, +4.25
Wednesday, November 20, 2013
Stocks Fall After October Fed Minutes Released; Deflation Commences
Just in case anyone forgot that the only thing that matters in this market is Federal Reserve policy, the message was forcefully driven home precisely at 2:00 pm ET, when the minutes from the last FOMC meeting were released.
Within those arcane discussions of all things monetary were warnings from more than a few members that tapering bond purchases by the Fed might begin sooner rather than later. Accepted thinking had been that the Fed would not taper until March, though after today, analysts are suggesting that December - just two weeks away - might mark the beginning of the end of the Fed's bond-buying spree.
While the cutback in bond purchases monthly may only be a decrease of $10 to $15 billion of the current $85 billion, Wall Street money-grubbers were spooked as usual at the suggestion that money would be anything other than nearly free to borrow.
Today's action in stocks shows just how fragile the 4 1/2-year-plus market rally is and how quickly paper profits may vanish if the Fed doesn't keep the money-printing machine going pedal to the metal.
It's a ridiculous market made up of ridiculous valuations and propositions, that, without Herculean-like support from the central bank, could fall apart in days or weeks.
The Fed will no doubt taper, the only remaining questions are when and by how much. Whatever the decision shall be, markets will not like it one bit, and the general economy may suffer even more than it already has as Wall Street will no doubt throw a massive hissy fit.
When it's all done with, when the Fed stops buying bonds altogether (when will that be, 2065?), either stocks or the US dollar (and maybe both) will be worth a lot less than they are today.
Lunatic policies by the Fed will be followed in time by equally hilarious conclusions to those misguided policies. The results will be a catastrophe financial markets have never seen before.
What is either amusing or distressing is the reaction in precious metal markets, which fell in concert with stocks and bonds. If the markets are correct, Fed tapering will be a deflationary event with magnificent outcomes ahead.
In the long term, the Fed cannot taper back on bond purchases because they have succeeded in crowding out the few remaining participants over the past four years. Deflations and defaults will be the most likely results, though emerging markets will feel the pain much sooner and to a much greater degree than established economies, though no nation will be spared the death spiral of deflation.
Dow 15,900.82, -66.21 (0.41%)
Nasdaq 3,921.27, -10.28 (0.26%)
S&P 500 1,781.37, -6.50 (0.36%)
10-Yr Bond 2.79%, +0.08
NYSE Volume 3,094,246,250
Nasdaq Volume 1,686,541,875
Combined NYSE & NASDAQ Advance - Decline: 2180-3428
Combined NYSE & NASDAQ New highs - New lows: 162-98
WTI crude oil: 93.33, -0.01
Gold: 1,258.00, -15.50
Silver: 20.06, 0.276
Corn: 425.25, -1.00
Within those arcane discussions of all things monetary were warnings from more than a few members that tapering bond purchases by the Fed might begin sooner rather than later. Accepted thinking had been that the Fed would not taper until March, though after today, analysts are suggesting that December - just two weeks away - might mark the beginning of the end of the Fed's bond-buying spree.
While the cutback in bond purchases monthly may only be a decrease of $10 to $15 billion of the current $85 billion, Wall Street money-grubbers were spooked as usual at the suggestion that money would be anything other than nearly free to borrow.
Today's action in stocks shows just how fragile the 4 1/2-year-plus market rally is and how quickly paper profits may vanish if the Fed doesn't keep the money-printing machine going pedal to the metal.
It's a ridiculous market made up of ridiculous valuations and propositions, that, without Herculean-like support from the central bank, could fall apart in days or weeks.
The Fed will no doubt taper, the only remaining questions are when and by how much. Whatever the decision shall be, markets will not like it one bit, and the general economy may suffer even more than it already has as Wall Street will no doubt throw a massive hissy fit.
When it's all done with, when the Fed stops buying bonds altogether (when will that be, 2065?), either stocks or the US dollar (and maybe both) will be worth a lot less than they are today.
Lunatic policies by the Fed will be followed in time by equally hilarious conclusions to those misguided policies. The results will be a catastrophe financial markets have never seen before.
What is either amusing or distressing is the reaction in precious metal markets, which fell in concert with stocks and bonds. If the markets are correct, Fed tapering will be a deflationary event with magnificent outcomes ahead.
In the long term, the Fed cannot taper back on bond purchases because they have succeeded in crowding out the few remaining participants over the past four years. Deflations and defaults will be the most likely results, though emerging markets will feel the pain much sooner and to a much greater degree than established economies, though no nation will be spared the death spiral of deflation.
Dow 15,900.82, -66.21 (0.41%)
Nasdaq 3,921.27, -10.28 (0.26%)
S&P 500 1,781.37, -6.50 (0.36%)
10-Yr Bond 2.79%, +0.08
NYSE Volume 3,094,246,250
Nasdaq Volume 1,686,541,875
Combined NYSE & NASDAQ Advance - Decline: 2180-3428
Combined NYSE & NASDAQ New highs - New lows: 162-98
WTI crude oil: 93.33, -0.01
Gold: 1,258.00, -15.50
Silver: 20.06, 0.276
Corn: 425.25, -1.00
Tuesday, November 19, 2013
Another Dead Day on Wall Street
Stocks simply don't seem to have any momentum, such as earnings season is pretty much over and the gala holiday shopping season is still more than a week away.
There's no catalyst in either direction, though there's the continuing, nagging questions surrounding Fed tapering and the impact of Obamacare on business and markets, both of which seem to be supplying an anchor for equities.
Few voices are calling for a correction, but even fewer are banging the table about a generalized rally in stocks, as they are perceived to be just about fairly priced or over-priced.
This is an odd circumstance, as November is usually one of the better months for investors, though one could argue that gains in stocks this year have already beaten even the most optimistic targets.
Dow 15,967.03, -8.99 (0.06%)
Nasdaq 3,931.55, -17.51 (0.44%)
S&P 500 1,787.87, -3.66 (0.20%)
10-Yr Bond 2.71%, +0.03
NYSE Volume 3,199,620,250
Nasdaq Volume 1,714,876,375
Combined NYSE & NASDAQ Advance - Decline: 1903-3715
Combined NYSE & NASDAQ New highs - New lows: 162-78
WTI crude oil: 93.34, +0.31
Gold: 1,273.50, +1.20
Silver: 20.33, +0.023
Corn: 426.25, +5.25
There's no catalyst in either direction, though there's the continuing, nagging questions surrounding Fed tapering and the impact of Obamacare on business and markets, both of which seem to be supplying an anchor for equities.
Few voices are calling for a correction, but even fewer are banging the table about a generalized rally in stocks, as they are perceived to be just about fairly priced or over-priced.
This is an odd circumstance, as November is usually one of the better months for investors, though one could argue that gains in stocks this year have already beaten even the most optimistic targets.
Dow 15,967.03, -8.99 (0.06%)
Nasdaq 3,931.55, -17.51 (0.44%)
S&P 500 1,787.87, -3.66 (0.20%)
10-Yr Bond 2.71%, +0.03
NYSE Volume 3,199,620,250
Nasdaq Volume 1,714,876,375
Combined NYSE & NASDAQ Advance - Decline: 1903-3715
Combined NYSE & NASDAQ New highs - New lows: 162-78
WTI crude oil: 93.34, +0.31
Gold: 1,273.50, +1.20
Silver: 20.33, +0.023
Corn: 426.25, +5.25
Subscribe to:
Posts (Atom)
Posts
