Amid economic cross-currents, the major indices failed at the second benchmark for the year, that being the first five days of trading, which turned out to be negative and indicative of a sub-par performance for stocks throughout 2014. The first benchmark was also negative, as stocks were sharply lower on the first trading day of the new year.
After the banner year that was 2103, in which the indices were ahead by anywhere from 26-30%, a pullback is, however, more likely than not.
Putting numbers to the reality, here's the performance for the first five trading days of 2014:
Dow: -114 points
S&P: -11 points
NASDAQ: -11 points
NYSE: -79 points
While these figures aren't anything dramatic, they are negative, suggesting that investors are taking a very cautious approach to stocks even as financial data appears to point toward a strengthening of the general economy.
ADP reported that 238,000 jobs were created in December, ahead of forecasts and predictive of an equally-strong number from the BLS when they report Friday on December non-farm payrolls.
On the flip side, retail traffic for the just-ended holiday shopping season was down 14%, though sales were still ahead by 2.7%, and, just ater the bell, Macy's (M) reported same-store sales gains in the 3.6% range but announced that they would be laying off 2500 employees and closing five stores. Shares of the company were up sharply on the news in after-hours trading.
Overall, markets were down throughout most of the day, especially the Dow Jones Industrials, which suffered the most. The NASDAQ was higher through most of the session and hit the unchanged mark with just about 20 minutes left in the trading day, but returned to slightly positive territory at the close.
Tomorrow, the first earnings report will be come to the markets as Alcoa (AA), a former Dow component, reports full-year and fourth quarter results.
DOW 16,462.74, -68.20 (-0.41%)
NASDAQ 4,165.61, +12.43 (+0.30%)
S&P 1,837.49, -0.39 (-0.02%)
10-Yr Note 97.94, -0.17 (-0.18%) Yield: 2.99%
NASDAQ Volume 2.20 Bil
NYSE Volume 3.47 Bil
Combined NYSE & NASDAQ Advance - Decline: 2585-3071
Combined NYSE & NASDAQ New highs - New lows: 336-29
WTI crude oil: 92.33, -1.34
Gold: 1,225.50, -4.10
Silver: 19.54 , -0.248
Corn: 417.00, -9.00
Wednesday, January 8, 2014
Tuesday, January 7, 2014
Wall Street Gets First Rally of 2014, Right on Queue
It took a few days (four to be exact), but Wall Street had its first rally of the new year, and it was kind of a big deal.
With two-thirds of the country under the deep freeze and the data streams of economic reports and corporate earnings in a kind of limbo, a little confidence boost was exactly the tonic needed, because, after all, Wall Street would largely cease to exist without a healthy dose of confidence.
Call it any way one likes, stocks needed to rally, and they did. If this is the way efficient markets work, or, how rigged, gamed, manipulated markets operate, so be it.
All is well... until it isn't, unless it's not real, then it doesn't really matter.
DOW 16,530.94, +105.84 (+0.64%)
NASDAQ 4,153.18, +39.50 (+0.96%)
S&P 1,837.88, +11.11 (+0.61%)
10-Yr Note 98.33, +0.27 (+0.27%) Yield: 2.95%
NASDAQ Volume 2.12 Bil
NYSE Volume 3.51 Bil
Combined NYSE & NASDAQ Advance - Decline: 2876-1841
Combined NYSE & NASDAQ New highs - New lows: 304-17
WTI crude oil: 93.67, +0.24
Gold: 1,229.60, -8.40
Silver: 19.79, -0.316
Corn: 426.00, -1.75
With two-thirds of the country under the deep freeze and the data streams of economic reports and corporate earnings in a kind of limbo, a little confidence boost was exactly the tonic needed, because, after all, Wall Street would largely cease to exist without a healthy dose of confidence.
Call it any way one likes, stocks needed to rally, and they did. If this is the way efficient markets work, or, how rigged, gamed, manipulated markets operate, so be it.
All is well... until it isn't, unless it's not real, then it doesn't really matter.
DOW 16,530.94, +105.84 (+0.64%)
NASDAQ 4,153.18, +39.50 (+0.96%)
S&P 1,837.88, +11.11 (+0.61%)
10-Yr Note 98.33, +0.27 (+0.27%) Yield: 2.95%
NASDAQ Volume 2.12 Bil
NYSE Volume 3.51 Bil
Combined NYSE & NASDAQ Advance - Decline: 2876-1841
Combined NYSE & NASDAQ New highs - New lows: 304-17
WTI crude oil: 93.67, +0.24
Gold: 1,229.60, -8.40
Silver: 19.79, -0.316
Corn: 426.00, -1.75
Monday, January 6, 2014
As Bitter Cold Grips the Nation, Are Bears Clawing at Wall Street?
In three days, the rally which started on March 9, 2009, will be 59 months long, or, just a month shy of five years. That's a long enough time, one should believe, to make gains and take profits, so why is Wall Street worried about the declines of the first few sessions of 2014?
Are they worried? Maybe not. After all, the rally has seen only one 10% correction in those five years, so taking a little off the top of all-time highs might actually be a buying opportunity.
Last week, the excuse was low volume because all the participants were still on vacation. That doesn't fly, now that Monday started off the first full week for markets with equally low volume.
Next, the weather will be blamed, for everything. Just watch.
DOW 16,425.10, -44.89 (-0.27%)
NASDAQ 4,113.68, -18.23 (-0.44%)
S&P 1,826.77, -4.60 (-0.25%)
10-Yr Note 98.23, +0.96 (+0.98%) Yield: 2.96%
NASDAQ Volume 2.14 Bil
NYSE Volume 3.23 Bil
Combined NYSE & NASDAQ Advance - Decline: 2409-3326
Combined NYSE & NASDAQ New highs - New lows: 256-28
WTI crude oil: 93.43, -0.53
Gold: 1,238.00, -0.60
Silver: 20.10, -0.108
Corn: 427.75, +4.25
Are they worried? Maybe not. After all, the rally has seen only one 10% correction in those five years, so taking a little off the top of all-time highs might actually be a buying opportunity.
Last week, the excuse was low volume because all the participants were still on vacation. That doesn't fly, now that Monday started off the first full week for markets with equally low volume.
Next, the weather will be blamed, for everything. Just watch.
DOW 16,425.10, -44.89 (-0.27%)
NASDAQ 4,113.68, -18.23 (-0.44%)
S&P 1,826.77, -4.60 (-0.25%)
10-Yr Note 98.23, +0.96 (+0.98%) Yield: 2.96%
NASDAQ Volume 2.14 Bil
NYSE Volume 3.23 Bil
Combined NYSE & NASDAQ Advance - Decline: 2409-3326
Combined NYSE & NASDAQ New highs - New lows: 256-28
WTI crude oil: 93.43, -0.53
Gold: 1,238.00, -0.60
Silver: 20.10, -0.108
Corn: 427.75, +4.25
Friday, January 3, 2014
Reinhart and Rogoff Return: Debt Overhang, Financial Repression, Inflation and 'Saver's Tax'
Forgetting the day-to-day action of the stock market for a moment to focus on the really, really larger issue of macro-economics, comes this daft little piece of literature from the infamous duo of Carmen M. Reinhart and Kenneth S. Rogoff, prepared for the IMF, entitled, boorishly, "Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten," as though the central bankers of the world have forgotten their purposes in life, which would be, in no particular order:
1. Create and control all of the world's currency;
2. Put governments, businesses and individuals in debt;
3. Act like you're doing everyone a favor.
The authors of this [PDF] 21-page memo to the IMF bring up some old tomes familiar to those in the central banking business, which, more likely than not, they have NOT forgotten, not at all, such as financial repression, inflation (the central way central banks enrich themselves and impoverish the rest of the world), and outright debt defaults, this final theme one which the central banks will encourage sovereigns to pursue, in the best interest of everyone.
When one reads this little write-up and thinks it through, a couple of ideas immediately sprout forth from the pages.
One, inflation, the central banker's ally in its never-ending quest to eventually destroy the value of all currencies, has been latent and absent for some time, something the Fed head, Ben Bernanke, has openly whined about, and probably privately been chastised by his handlers in the global banking cartel. Inflation will have to make a big comeback, soon, lest the Fed and fellow central banks lose out on massive profits from the ongoing, recent economic crises gripping all nations.
They have the means to do so, and they certainly will, now that they've successfully re-capitalized their member banks (all the biggest ones, which were insolvent in 2008), through various means, the most obvious being the "taper," or winding down of their balance sheet, and higher interest rates, making money more expensive and credit all-but-impossible to get, which will have the desired result of pushing prices skyward while crashing the stock markets and making most citizens, now already poorer due to the stealth tax of low interest rates over a prolonged period, severe debt slaves.
The central banks, through their conduits in central sovereign governments, will also encourage defaults on massive amounts of debt, causing even more panic and a rush of cries from governments to individuals for the central banks to "save us," when in reality, it is they who are causing the pain.
While Reinhart and Rogoff are surely on the right track - though a bit opaque in their language - they are telegraphing the next moves for central bankers, who will, soon enough, declare that all their efforts have not succeeded in creating economic prosperity, so they will embark on, sorry, more austere measures. Governments will overtax and overburden their citizens (to some degree this is already occurring in Europe and Japan), but eventually - maybe in five years, or ten, or more - there will at last be a period of economic "normalcy" with interest rates on, say, 10-year notes at about 5%, inflation raging along at 5-8% (payback for the years of no or low inflation) and employment (with associated confiscatory taxes and fees) steadily declining for some countries, still high for others.
For most people and businesses, surviving this period will be tantamount to picking up nickels in front of a runaway steamroller: barely profitable, but highly risky. Many will be crushed; others wounded, the steamroller that is the Fed, the ECB, the IMF, World Bank and the BIS will grind nations, businesses and individuals into wretched little nothings.
That's the message from these authors, and, no, the central bankers of the world have not forgotten. It's coming. Not all at once, and not with any dramatic waving of wands or arms or hands, but slowly, gradually, eventually...
On the second day of trading for 2014, stocks took a bit of a roller-caster ride not dissimilar to those encountered during bear markets, but with a twist of day-trading irony, up at the open, crashing back to unchanged mid-day, rallying late before giving all of it back, the Dow being the only average on the positive side of the ledger today, the NASDAQ still down, the S&P marginally negative.
No, this was not a snap-back rally, and no, again, everybody's not waiting for Monday to "really" start trading. These first two sessions of 2014 were real and they count. Money is being pulled out of the market because money knows what's ahead, and it's seeking safe harbor.
Two things to note: the divergence of the a-d line from the headline close, and the continued low numbers of new highs and new lows.
Thanks for a week of hope and no change.
DOW 16,469.99, +28.64 (+0.17%)
NASDAQ 4,131.91, -11.16 (-0.27%)
S&P 1,831.37, -0.61 (-0.03%)
10-Yr Note 97.90, +0.60 (+0.62%) Yield: 3.00%
NASDAQ Volume 1.56 Bil
NYSE Volume 2.76 Bil
Combined NYSE & NASDAQ Advance - Decline: 3577-2094
Combined NYSE & NASDAQ New highs - New lows: 205-21
WTI crude oil: 93.96, -1.48
Gold: 1,238.60, +13.40
Silver: 20.21, +0.083
Corn: 423.50, +3.00
1. Create and control all of the world's currency;
2. Put governments, businesses and individuals in debt;
3. Act like you're doing everyone a favor.
The authors of this [PDF] 21-page memo to the IMF bring up some old tomes familiar to those in the central banking business, which, more likely than not, they have NOT forgotten, not at all, such as financial repression, inflation (the central way central banks enrich themselves and impoverish the rest of the world), and outright debt defaults, this final theme one which the central banks will encourage sovereigns to pursue, in the best interest of everyone.
When one reads this little write-up and thinks it through, a couple of ideas immediately sprout forth from the pages.
One, inflation, the central banker's ally in its never-ending quest to eventually destroy the value of all currencies, has been latent and absent for some time, something the Fed head, Ben Bernanke, has openly whined about, and probably privately been chastised by his handlers in the global banking cartel. Inflation will have to make a big comeback, soon, lest the Fed and fellow central banks lose out on massive profits from the ongoing, recent economic crises gripping all nations.
They have the means to do so, and they certainly will, now that they've successfully re-capitalized their member banks (all the biggest ones, which were insolvent in 2008), through various means, the most obvious being the "taper," or winding down of their balance sheet, and higher interest rates, making money more expensive and credit all-but-impossible to get, which will have the desired result of pushing prices skyward while crashing the stock markets and making most citizens, now already poorer due to the stealth tax of low interest rates over a prolonged period, severe debt slaves.
The central banks, through their conduits in central sovereign governments, will also encourage defaults on massive amounts of debt, causing even more panic and a rush of cries from governments to individuals for the central banks to "save us," when in reality, it is they who are causing the pain.
While Reinhart and Rogoff are surely on the right track - though a bit opaque in their language - they are telegraphing the next moves for central bankers, who will, soon enough, declare that all their efforts have not succeeded in creating economic prosperity, so they will embark on, sorry, more austere measures. Governments will overtax and overburden their citizens (to some degree this is already occurring in Europe and Japan), but eventually - maybe in five years, or ten, or more - there will at last be a period of economic "normalcy" with interest rates on, say, 10-year notes at about 5%, inflation raging along at 5-8% (payback for the years of no or low inflation) and employment (with associated confiscatory taxes and fees) steadily declining for some countries, still high for others.
For most people and businesses, surviving this period will be tantamount to picking up nickels in front of a runaway steamroller: barely profitable, but highly risky. Many will be crushed; others wounded, the steamroller that is the Fed, the ECB, the IMF, World Bank and the BIS will grind nations, businesses and individuals into wretched little nothings.
That's the message from these authors, and, no, the central bankers of the world have not forgotten. It's coming. Not all at once, and not with any dramatic waving of wands or arms or hands, but slowly, gradually, eventually...
On the second day of trading for 2014, stocks took a bit of a roller-caster ride not dissimilar to those encountered during bear markets, but with a twist of day-trading irony, up at the open, crashing back to unchanged mid-day, rallying late before giving all of it back, the Dow being the only average on the positive side of the ledger today, the NASDAQ still down, the S&P marginally negative.
No, this was not a snap-back rally, and no, again, everybody's not waiting for Monday to "really" start trading. These first two sessions of 2014 were real and they count. Money is being pulled out of the market because money knows what's ahead, and it's seeking safe harbor.
Two things to note: the divergence of the a-d line from the headline close, and the continued low numbers of new highs and new lows.
Thanks for a week of hope and no change.
DOW 16,469.99, +28.64 (+0.17%)
NASDAQ 4,131.91, -11.16 (-0.27%)
S&P 1,831.37, -0.61 (-0.03%)
10-Yr Note 97.90, +0.60 (+0.62%) Yield: 3.00%
NASDAQ Volume 1.56 Bil
NYSE Volume 2.76 Bil
Combined NYSE & NASDAQ Advance - Decline: 3577-2094
Combined NYSE & NASDAQ New highs - New lows: 205-21
WTI crude oil: 93.96, -1.48
Gold: 1,238.60, +13.40
Silver: 20.21, +0.083
Corn: 423.50, +3.00
Thursday, January 2, 2014
January Barometer? Stocks Fall on First Trading Day of 2014
Blasphemy!
Stocks are only supposed to go higher, and the idea that we would begin the new year with a large selloff in stocks is a disturbing development to those in charge of propagandizing our glorious and ever-expanding economy.
The last time stocks fell on the first trading day of a new year was 2008, and, unless you've been living under a rock the past five years, you know what happened that year.
Not to say that a precipitous decline on the first trading day of the new year is a bad omen or a signal of a down year for stocks, but, referencing the January Effect, there's an 88% positive correlation between the direction of stocks for the entire month of January and the rest of the year, so, starting off with a sharp decline is not the best indication of general health, wealth and happiness going forward.
Obviously, it's too early to tell wither stocks go from here, but the apologists were out in force on CNBC, citing the fact that volume was on the very low side, something they neglected to inform upon during the late-year rally of the past two weeks, when trading volume was among the lowest of the year. Actually, Thursday's volume was higher than the average of the previous two weeks on a daily basis, and closer to normal than at any time since December 16.
With the major indices all up more than 25% in 2013, it would not come as a surprise to anyone should the market face some headwinds in 2014. It deserves mention that while the indices did very well, profits - as Larry Kudlow so often opines, "the mother's milk of stocks" - were higher by only six percent for the year, trailing paper gains by a margin wide enough to haul a bear trap through.
The bad news for holders of stock certificates (or the electrons which signify ownership in a brokerage account - not quite exactly the same thing) is that the selling was rather broad-based, as per the advance-decline line. The good news for the rest of us - those who own hard assets like land, gold, silver, machinery and vehicles - is that deflation seems to not want to go away. Gold and silver were higher, with silver shining at a nearly 4% gain on the day, and corn was down, so the price of corn in silver terms continues the trend lower, which, as our notes imply, according to Adam Smith, that is a deflationary trend of great significance. Crude oil also was off sharply.
Lower prices for all manner of consumer goods would be a definite boon for consumers and the general economy, though it's arguable that Wall Street and the international banking cartel headquartered at the Federal Reserve and World Bank might not be so pleased.
A sneaking suspicion that another grand transfer of wealth - on a scale beyond that of 2008-09 - is about to commence has been bandied about by skeptics of the recovery story. Maybe it's just a one-day trade and there's nothing more to it, though it needs to be pointed out that trades made today - especially those sales at a profit - won't necessarily be taxed for a very long time, around March 15, 2015, to be precise. Now, that could explain more about today's price action than just about any other macro or micro-economic factor present.
DOW 16,441.35, -135.31 (-0.82%)
NASDAQ 4,143.07, -33.52 (-0.80%)
S&P 1,831.98, -16.38 (-0.89%)
10-Yr Note 98.00, -0.03 (-0.03%) Yield: 2.99%
NASDAQ Volume 1.62 Bil
NYSE Volume 3.06 Bil
Combined NYSE & NASDAQ Advance - Decline: 1995-3764
Combined NYSE & NASDAQ New highs - New lows: 185-41
WTI crude oil: 95.44, -2.98
Gold: 1,225.20, +22.90
Silver: 20.13, +0.758
Corn: 420.50, -1.50
Stocks are only supposed to go higher, and the idea that we would begin the new year with a large selloff in stocks is a disturbing development to those in charge of propagandizing our glorious and ever-expanding economy.
The last time stocks fell on the first trading day of a new year was 2008, and, unless you've been living under a rock the past five years, you know what happened that year.
Not to say that a precipitous decline on the first trading day of the new year is a bad omen or a signal of a down year for stocks, but, referencing the January Effect, there's an 88% positive correlation between the direction of stocks for the entire month of January and the rest of the year, so, starting off with a sharp decline is not the best indication of general health, wealth and happiness going forward.
Obviously, it's too early to tell wither stocks go from here, but the apologists were out in force on CNBC, citing the fact that volume was on the very low side, something they neglected to inform upon during the late-year rally of the past two weeks, when trading volume was among the lowest of the year. Actually, Thursday's volume was higher than the average of the previous two weeks on a daily basis, and closer to normal than at any time since December 16.
With the major indices all up more than 25% in 2013, it would not come as a surprise to anyone should the market face some headwinds in 2014. It deserves mention that while the indices did very well, profits - as Larry Kudlow so often opines, "the mother's milk of stocks" - were higher by only six percent for the year, trailing paper gains by a margin wide enough to haul a bear trap through.
The bad news for holders of stock certificates (or the electrons which signify ownership in a brokerage account - not quite exactly the same thing) is that the selling was rather broad-based, as per the advance-decline line. The good news for the rest of us - those who own hard assets like land, gold, silver, machinery and vehicles - is that deflation seems to not want to go away. Gold and silver were higher, with silver shining at a nearly 4% gain on the day, and corn was down, so the price of corn in silver terms continues the trend lower, which, as our notes imply, according to Adam Smith, that is a deflationary trend of great significance. Crude oil also was off sharply.
Lower prices for all manner of consumer goods would be a definite boon for consumers and the general economy, though it's arguable that Wall Street and the international banking cartel headquartered at the Federal Reserve and World Bank might not be so pleased.
A sneaking suspicion that another grand transfer of wealth - on a scale beyond that of 2008-09 - is about to commence has been bandied about by skeptics of the recovery story. Maybe it's just a one-day trade and there's nothing more to it, though it needs to be pointed out that trades made today - especially those sales at a profit - won't necessarily be taxed for a very long time, around March 15, 2015, to be precise. Now, that could explain more about today's price action than just about any other macro or micro-economic factor present.
DOW 16,441.35, -135.31 (-0.82%)
NASDAQ 4,143.07, -33.52 (-0.80%)
S&P 1,831.98, -16.38 (-0.89%)
10-Yr Note 98.00, -0.03 (-0.03%) Yield: 2.99%
NASDAQ Volume 1.62 Bil
NYSE Volume 3.06 Bil
Combined NYSE & NASDAQ Advance - Decline: 1995-3764
Combined NYSE & NASDAQ New highs - New lows: 185-41
WTI crude oil: 95.44, -2.98
Gold: 1,225.20, +22.90
Silver: 20.13, +0.758
Corn: 420.50, -1.50
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