Despite a pair of great earnings reports after the bell Wednesday - Netflix and eBay - stocks sold off dramatically on Thursday, starting even before the opening bell, as futures pointed to a grim opening.
When trading began, the Dow slumped an immediate 135 points, while the S&P and NASDAQ took on deep losses. The negative condition persisted throughout the day, actually getting worse in the afternoon.
While stocks have already begun the year on a less-than-enthusiastic note, today's drops were the worse seen since last August and quite possibly are foretelling of further declines to come.
Commentators in the financial media mostly failed to comprehend the causes for today's collapse in equities, which were, in no particular order, the Chinese banking system becoming unglued, Turkey's economy falling apart at the seams, heightened tensions in the Ukraine, fear over terrorist attacks at the Olympics in Soshi, Russia, continuing civil war in Syria and 1.37 million people dropping off of the Emergency Unemployment Compensation roles.
Let's examine this last bit of news first, because it is so US-centric and is a troubling sign of the ongoing impotence of the federal government. Recall, the noises out of Washington, DC, earlier this month about restoring the aid to the people whose 99 weeks of unemployment were ending. Democrats were screaming "unfair," and that we need to help these people, as the money for these continuing unemployment benefits was eliminated by the widely-hailed budget "deal" that passed through congress in December.
Recall, also, that pension and benefits for military retirees and disabled vets was also slashed by that budget and roundly criticized by congress-people on the left and the right. The cuts were said to be "unpatriotic", and many vowed to restore them. A month has gone by and those cuts are still in place. Veterans are getting the shaft, and now, the long-term unemployed, without the media (controlled by the government) raising as much as an eyebrow over these issues, proving, without any shadow of a doubt, that the politicians in Washington have not only lost all sense of justice, decency or propriety, but they are also quickly losing their ability to make coherent policy.
What politicians in Washington, DC, have accomplished, however, is the uncanny ability to lie ruthlessly about anything at all, and to now lose what little support remained from the people of the United States. With the approval rating of congress already at multi-generational lows, it's about to go even lower. People should have been in the streets already, but their voices have been silenced by the Federal Reserve, together with the false statistics about the "improving economy" bantered about the past four to five years.
What will be lost next by the politicians is their ability to rule. They have lost all credibility and the consent of the people has long since been quietly withdrawn by many. The federal government, either by design or incompetence, has been failing and is about to fail completely. Without somebody stepping up to right the ship - and don't count on it - the ship of state, already rudderless and with torn sails, has begun to sink. Special interests to which the politicians have catered, have blown a hole in the hull, and it's not readily repairable. The United States is rapidly devolving into a fascist, welfare/police state, and, making matters worse and more worrisome, this is only the beginning.
Other than the United States collapsing in a major hurry, the rest of the world doesn't look much rosier. If nobody gets killed at the Olympics - if they even go off as planned - it will be nothing short of a miracle.
The other major events of the day were the widespread devaluation in the value of the Turkish Lira and a bank failure in China, also just beginning.
Turkey's currency fell three percent against the dollar, the most of any currency outside of Argentina (already a basket case, down 14% just today), despite intervention by the central bank, which was reportedly in the process of unloading $3 billion in foreign reserves.
In China, the evolving shadow banking crisis just went from bad to worse as it was reported today that some rural credit unions have been unable to pay back depositors for over a year. This would, in most countries, have been major news, prompting a flight of money from banks (bank run), but the circumspect Chinese media suppresses most of this kind of information from the outside world. In a nutshell, China's dubious "boom" economy may be going bust, or, realistically, may already be well down the path of self-immolation.
Taking just these few "newsy" items into perspective, it just might be time to return to "clinging to their guns and bibles," for more than just a few Americans. As for the rest of the world, well, their guns have largely already been confiscated and bibles don't offer much protection. Pitchforks and torches, anyone? God save them.
Others may be taking some time to polish up the gold and silver, which were the main winners on the day, along with the 10-year note, which fell to 2.80, the lowest yield in roughly two months.
As if that wasn't enough, teen idol, Justin Beiber, was arrested last night for DUI. Oh, the horror!... and, no, we're not linking to that story.
DOW 16,197.35, -175.99 (-1.07%)
NASDAQ 4,218.87, -24.13 (-0.57%)
S&P 1,828.46, -16.40 (-0.89%)
10-Yr Note 99.56, +1.25 (+1.27%) Yield: 2.80%
NASDAQ Volume 2.00 Bil
NYSE Volume 3.91 Bil
Combined NYSE & NASDAQ Advance - Decline: 1829-3918
Combined NYSE & NASDAQ New highs - New lows: 196-62
WTI crude oil: 97.32, +0.59
Gold: 1,262.30. +23.70
Silver: 20.01, +0.171
Corn: 429.00, +2.75
Thursday, January 23, 2014
Wednesday, January 22, 2014
Market Direction Is Decidedly Indecisive; Ebay, NetFlix Report, Soar
For the second straight session, the Dow was down while the S&P and NASDAQ sported small gains.
A bifurcated market is often one which is about to change direction, so, since the general direction has been up, up and up, a change would indicate, what, lower prices for stocks?
Bernanke, Yellen and company simply cannot have that, thus, like everything else since 2008, everything depends solely upon the whims of the central bank. So sad.
Aftre the bell, eBay announced 4Q earnings, which were decidedly upbeat, with revenues up 14% from a year ago, and earnings per share of 81 cents, a decisive beat. Additionally, the company announced a $5 billion stock buyback program and also received a proposal from meddling Carl Icahn, who wants to see PayPal split out and an independent company, a move which would make a good deal of sense, since PayPal is the company's main profit driver. Shares soared more than eight percent in after-hours trading.
Netflix also announced fourth-quarter earnings after the bell and absolutely blew out the estimates. The company earned $48 million, or 79 cents per share, during final three months of 2013, compared to $8 million, or 13 cents per share, at the same time in 2012.
Revenue rose 24 percent from the previous year to nearly $1.2 billion and the US subscriber base grew by 2.3 million in the quarter. The stock was up more than 17% in the after-hours.
Look for NASDAQ futures to be up about 25 points prior to Thursday's open.
DOW 16,373.34, -41.10 (-0.25%)
NASDAQ 4,243.00, +17.24 (+0.41%)
S&P 1,844.86, +1.06 (+0.06%)
10-Yr Note 99.02, -0.06 (-0.06%) Yield: 2.87%
NASDAQ Volume 1.88 Bil
NYSE Volume 3.36 Bil
Combined NYSE & NASDAQ Advance - Decline: 3467-2224
Combined NYSE & NASDAQ New highs - New lows: 424-43
WTI crude oil: 96.73, +1.76
Gold: 1,238.60, -3.20
Silver: 19.84, 0.031
Corn: 426.00, +1.25
A bifurcated market is often one which is about to change direction, so, since the general direction has been up, up and up, a change would indicate, what, lower prices for stocks?
Bernanke, Yellen and company simply cannot have that, thus, like everything else since 2008, everything depends solely upon the whims of the central bank. So sad.
Aftre the bell, eBay announced 4Q earnings, which were decidedly upbeat, with revenues up 14% from a year ago, and earnings per share of 81 cents, a decisive beat. Additionally, the company announced a $5 billion stock buyback program and also received a proposal from meddling Carl Icahn, who wants to see PayPal split out and an independent company, a move which would make a good deal of sense, since PayPal is the company's main profit driver. Shares soared more than eight percent in after-hours trading.
Netflix also announced fourth-quarter earnings after the bell and absolutely blew out the estimates. The company earned $48 million, or 79 cents per share, during final three months of 2013, compared to $8 million, or 13 cents per share, at the same time in 2012.
Revenue rose 24 percent from the previous year to nearly $1.2 billion and the US subscriber base grew by 2.3 million in the quarter. The stock was up more than 17% in the after-hours.
Look for NASDAQ futures to be up about 25 points prior to Thursday's open.
DOW 16,373.34, -41.10 (-0.25%)
NASDAQ 4,243.00, +17.24 (+0.41%)
S&P 1,844.86, +1.06 (+0.06%)
10-Yr Note 99.02, -0.06 (-0.06%) Yield: 2.87%
NASDAQ Volume 1.88 Bil
NYSE Volume 3.36 Bil
Combined NYSE & NASDAQ Advance - Decline: 3467-2224
Combined NYSE & NASDAQ New highs - New lows: 424-43
WTI crude oil: 96.73, +1.76
Gold: 1,238.60, -3.20
Silver: 19.84, 0.031
Corn: 426.00, +1.25
Tuesday, January 21, 2014
Many Signs Beginning to Appear That Signal the End of the Bull Run
These times, trying for some, are inscrutable for others.
While a small fraction of the population can see the changes in culture, society and technology clear as day, the majority only gets a grasp of the situation when the changes have taken hold and new trends already developed.
We are currently in a period of great change. Two years from today, one will not recognize America. Other countries will undergo massive upheavals. It is already underway.
Look around. The kinds of people - average, middle class folks - you used to see on a regular basis are gone, replaced by walking zombies on food stamps. Get used to it. The welfare-police state is upon us. Alternately, the people who have seen this coming are preparing to prosper. It will get worse before it improves, but, when the current power structure and domination of mega-corporations ultimately fails, small businesses, which have been under the thumb from competition from larger rivals and government regulations gone wild, will emerge, grow and prosper. It's just a matter of time.
As for today's roller-coaster on Wall Street, the movements were up, down, up, with the Dow closing at the mid-point of its 62-point high of the day and the -142-point lows, but still in the red. The S&P and NASDAQ finished with gains, though small.
Reporting prior to the opening bell, Johnson & Johnson (JNJ) reported better-than-expected earnings, but finished the day lower on poor guidance. A similar scenario played out for insurance giant, Travelers (TRV), and cell carrier, Verizon (VZ).
Following the trading close, IBM reported an earnings beat (6.13 ex-items vs. 5.99 est.), but a huge miss on revenues. Analysts were looking for $28.25 billion and got only $27.70 billion.
Sadly, for Big Blue, they are trading at roughly an 11 P/E multiple. The company is a dinosaur and headed for extinction, though that reality is still a way off.
Another slow-footed beast, Texas Instruments (TXN) reported 0.46 per share on revenue of $3.03 billion. Both of these tech behemoths were trading lower in after-hours, with IBM down nearly three percent. Dead money. It's what's not for dinner.
Among the more obvious signs that change is permanent and the bull market in stocks is coming ever closer to a crashing climax:
More are certain to follow.
DOW 16,414.44, -44.12 (-0.27%)
NASDAQ 4,225.76, +28.18 (+0.67%)
S&P 1,843.80, +5.10 (+0.28%)
10-Yr Note 99.30, +0.18 (+0.18%) Yield: 2.83%
NASDAQ Volume 1.91 Bil
NYSE Volume 3.75 Bil
Combined NYSE & NASDAQ Advance - Decline: 3649-2079
Combined NYSE & NASDAQ New highs - New lows: 466-36
WTI crude oil: 94.99, +0.62
Gold: 1,241.80, -10.10
Silver: 19.87, -0.434
Corn: 425.00, +1.00
While a small fraction of the population can see the changes in culture, society and technology clear as day, the majority only gets a grasp of the situation when the changes have taken hold and new trends already developed.
We are currently in a period of great change. Two years from today, one will not recognize America. Other countries will undergo massive upheavals. It is already underway.
Look around. The kinds of people - average, middle class folks - you used to see on a regular basis are gone, replaced by walking zombies on food stamps. Get used to it. The welfare-police state is upon us. Alternately, the people who have seen this coming are preparing to prosper. It will get worse before it improves, but, when the current power structure and domination of mega-corporations ultimately fails, small businesses, which have been under the thumb from competition from larger rivals and government regulations gone wild, will emerge, grow and prosper. It's just a matter of time.
As for today's roller-coaster on Wall Street, the movements were up, down, up, with the Dow closing at the mid-point of its 62-point high of the day and the -142-point lows, but still in the red. The S&P and NASDAQ finished with gains, though small.
Reporting prior to the opening bell, Johnson & Johnson (JNJ) reported better-than-expected earnings, but finished the day lower on poor guidance. A similar scenario played out for insurance giant, Travelers (TRV), and cell carrier, Verizon (VZ).
Following the trading close, IBM reported an earnings beat (6.13 ex-items vs. 5.99 est.), but a huge miss on revenues. Analysts were looking for $28.25 billion and got only $27.70 billion.
Sadly, for Big Blue, they are trading at roughly an 11 P/E multiple. The company is a dinosaur and headed for extinction, though that reality is still a way off.
Another slow-footed beast, Texas Instruments (TXN) reported 0.46 per share on revenue of $3.03 billion. Both of these tech behemoths were trading lower in after-hours, with IBM down nearly three percent. Dead money. It's what's not for dinner.
Among the more obvious signs that change is permanent and the bull market in stocks is coming ever closer to a crashing climax:
- Sears, JC Penny and Target.
- Analyst on CNBC says stocks will fall 10%, then fumbles targets of 16,000 on the Dow and 1800 on the S&P. Basic math: FAIL.
- Chris Christie
- Hillary
- Mohamed El-Erian steps down as Pimco CEO
- Another former Pimco exec, Neel Kashkari announces he is running for governor of California.
- Complaints that the Dow is down because some stocks are priced too high. (At least there's a solution for that.)
More are certain to follow.
DOW 16,414.44, -44.12 (-0.27%)
NASDAQ 4,225.76, +28.18 (+0.67%)
S&P 1,843.80, +5.10 (+0.28%)
10-Yr Note 99.30, +0.18 (+0.18%) Yield: 2.83%
NASDAQ Volume 1.91 Bil
NYSE Volume 3.75 Bil
Combined NYSE & NASDAQ Advance - Decline: 3649-2079
Combined NYSE & NASDAQ New highs - New lows: 466-36
WTI crude oil: 94.99, +0.62
Gold: 1,241.80, -10.10
Silver: 19.87, -0.434
Corn: 425.00, +1.00
Friday, January 17, 2014
Dow, NASDAQ Up for Week, Dow, S&P Down Thus Far in 2014
Stocks ended the week in truly bizarre fashion, with the Dow up, but the S&P and NASDAQ lower. Obviously, trading was not uniform across the indices and the Dow was higher due primarily to gains by American Express (AXP) and Visa (V), which really skewed the average, as there were only ten stocks showing gains on the day, versus 20 which ended the session lower.
While the market is somewhat bifurcated and, and maybe even trifurcated, the various swings on the indices are caused mainly by excessive trading in story stocks, those which have reported earnings either after the previous day's close or in the morning prior to the open.
Overall, earnings season is just barely underway, with 10% of companies in the S&P 500 having reported, but the distressing trend is that fully half of those companies have missed earnings estimates and top-line growth (revenues) continues to just beat or fall short, a pattern five years running that is giving not just investors, but the markets themselves, pause.
There hasn't been much progress in terms of the January Barometer, and with Monday a holiday, markets are closed, leaving just nine sessions remaining in January. Time flies, and, it seems some money wants to flee away with it.
What is down solidly is the yield on the 10-year note, which hit a 2014 low of 2.82 today, less than two weeks after seeping through the 3.00% mark. Despite the Fed's tapering by $10 billion, its $85 billion per month bond purchase program (QE by any other name), interest rates have not followed the game plan.
What is up? Gold. Higher by 4% so far this year, and, likewise, silver, also higher by about 4%.
For the week:
Dow +21.51
S&P 500 -3.67
NASDAQ +22.92
For the year:
Dow -118.10
S&P 500 -9.66
NASDAQ +20.99
DOW 16,458.56, +41.55 (+0.25%)
NASDAQ 4,197.58, -21.11 (-0.50%)
S&P 1,838.70, -7.19 (-0.39%)
10-Yr Note 99.37, +0.31 (+0.31%) Yield: 2.82%
NASDAQ Volume 2.10 Bil
NYSE Volume 3.60 Bil
Combined NYSE & NASDAQ Advance - Decline: 2337-3366
Combined NYSE & NASDAQ New highs - New lows: 352-38
WTI crude oil: 94.37, +0.41
Gold: 1,251.90, +11.70
Silver: 20.30, +0.25
Corn: 424.00, -4.00
While the market is somewhat bifurcated and, and maybe even trifurcated, the various swings on the indices are caused mainly by excessive trading in story stocks, those which have reported earnings either after the previous day's close or in the morning prior to the open.
Overall, earnings season is just barely underway, with 10% of companies in the S&P 500 having reported, but the distressing trend is that fully half of those companies have missed earnings estimates and top-line growth (revenues) continues to just beat or fall short, a pattern five years running that is giving not just investors, but the markets themselves, pause.
There hasn't been much progress in terms of the January Barometer, and with Monday a holiday, markets are closed, leaving just nine sessions remaining in January. Time flies, and, it seems some money wants to flee away with it.
What is down solidly is the yield on the 10-year note, which hit a 2014 low of 2.82 today, less than two weeks after seeping through the 3.00% mark. Despite the Fed's tapering by $10 billion, its $85 billion per month bond purchase program (QE by any other name), interest rates have not followed the game plan.
What is up? Gold. Higher by 4% so far this year, and, likewise, silver, also higher by about 4%.
For the week:
Dow +21.51
S&P 500 -3.67
NASDAQ +22.92
For the year:
Dow -118.10
S&P 500 -9.66
NASDAQ +20.99
DOW 16,458.56, +41.55 (+0.25%)
NASDAQ 4,197.58, -21.11 (-0.50%)
S&P 1,838.70, -7.19 (-0.39%)
10-Yr Note 99.37, +0.31 (+0.31%) Yield: 2.82%
NASDAQ Volume 2.10 Bil
NYSE Volume 3.60 Bil
Combined NYSE & NASDAQ Advance - Decline: 2337-3366
Combined NYSE & NASDAQ New highs - New lows: 352-38
WTI crude oil: 94.37, +0.41
Gold: 1,251.90, +11.70
Silver: 20.30, +0.25
Corn: 424.00, -4.00
Thursday, January 16, 2014
Stock Stories: Best Buy, Intel, Citi, more; What Does Friday Hold; Up or Down?
Markets reversed direction again on Thursday, evening out the week at two down, two up sessions with a weekly gain or loss for the major averages hanging in the balance, all coming down to Friday's closing bell.
The Dow Jones Industrials are 20 points below break even for the week, the S&P is already in the green, by a scant 3.52 points and the NASDAQ is defiantly 44.02 into positive territory, so unless Friday is dramatically lower, there's a very good chance that all three averages will finish the week with positive returns. Jolly good.
Interest rates, particularly the 10-year note, have been trending gradually lower through the first two weeks of 2014, with the lid fully on inflation expectations after this week's PPI and CPI nothing-burger-type data.
Making headlines was Best Buy (BBY), the remaining national electronics retailer, was absolutely bludgeoned, down more than 28% on the day, after reporting total holiday same-store sales dropped 0.8% from the previous year, while analysts so an increase of 0.5%. Total revenue declined to $11.45 billion in the holiday period from $11.75 billion a year earlier, and the company lowered its fourth-quarter guidance. With fourth-quarter and full-year results still forthcoming, investors took a quick exit, en masse, leaving many searching for answers to the retail conundrum that was the 2013 holiday season.
Citigroup reported adjusted earnings of $0.82 a share which missed on estimates of $0.96. Revenue also missed coming in at $17.94 billion versus estimates of $18.18 billion, down from last year's $18.66 billion. The company also announced it will replace all customer debit cards involved in the Target data breach last month, sending shares down 2.39 to 52.60 at the close, a loss of 4.35%.
After the bell, Intel reported a slight miss at 0.51 cents per share on estimates of 0.52 and issued some downbeat guidance, sending shares lower by more than 3% in after-hours trading.
American Express (AXP) and Capital One (COF) each missed on their fourth-quarter reports, sending shares down in the after hours. American Express reported a one-cent miss (1.25 vs. 1.26), while credit provider misses by a solid dime - 1.45 versus expected 1.55 - prompting the question from investors, "what's in their wallet?" Clearly, it was not what they were hoping.
DOW 16,417.01, -64.93 (-0.39%)
NASDAQ 4,218.69, +3.80 (+0.09%)
S&P 1,845.89, -2.49 (-0.13%)
10-Yr Note 99.15, +0.91 (+0.92%) Yield: 2.85%
NASDAQ Volume 1.83 Bil
NYSE Volume 3.46 Bil
Combined NYSE & NASDAQ Advance - Decline: 3069-2613
Combined NYSE & NASDAQ New highs - New lows: 382-38
WTI crude oil: 93.96, -0.21
Gold: 1,240.20, +1.90
Silver: 20.05, -0.08
Corn: 428.00, +2.25
The Dow Jones Industrials are 20 points below break even for the week, the S&P is already in the green, by a scant 3.52 points and the NASDAQ is defiantly 44.02 into positive territory, so unless Friday is dramatically lower, there's a very good chance that all three averages will finish the week with positive returns. Jolly good.
Interest rates, particularly the 10-year note, have been trending gradually lower through the first two weeks of 2014, with the lid fully on inflation expectations after this week's PPI and CPI nothing-burger-type data.
Making headlines was Best Buy (BBY), the remaining national electronics retailer, was absolutely bludgeoned, down more than 28% on the day, after reporting total holiday same-store sales dropped 0.8% from the previous year, while analysts so an increase of 0.5%. Total revenue declined to $11.45 billion in the holiday period from $11.75 billion a year earlier, and the company lowered its fourth-quarter guidance. With fourth-quarter and full-year results still forthcoming, investors took a quick exit, en masse, leaving many searching for answers to the retail conundrum that was the 2013 holiday season.
Citigroup reported adjusted earnings of $0.82 a share which missed on estimates of $0.96. Revenue also missed coming in at $17.94 billion versus estimates of $18.18 billion, down from last year's $18.66 billion. The company also announced it will replace all customer debit cards involved in the Target data breach last month, sending shares down 2.39 to 52.60 at the close, a loss of 4.35%.
After the bell, Intel reported a slight miss at 0.51 cents per share on estimates of 0.52 and issued some downbeat guidance, sending shares lower by more than 3% in after-hours trading.
American Express (AXP) and Capital One (COF) each missed on their fourth-quarter reports, sending shares down in the after hours. American Express reported a one-cent miss (1.25 vs. 1.26), while credit provider misses by a solid dime - 1.45 versus expected 1.55 - prompting the question from investors, "what's in their wallet?" Clearly, it was not what they were hoping.
DOW 16,417.01, -64.93 (-0.39%)
NASDAQ 4,218.69, +3.80 (+0.09%)
S&P 1,845.89, -2.49 (-0.13%)
10-Yr Note 99.15, +0.91 (+0.92%) Yield: 2.85%
NASDAQ Volume 1.83 Bil
NYSE Volume 3.46 Bil
Combined NYSE & NASDAQ Advance - Decline: 3069-2613
Combined NYSE & NASDAQ New highs - New lows: 382-38
WTI crude oil: 93.96, -0.21
Gold: 1,240.20, +1.90
Silver: 20.05, -0.08
Corn: 428.00, +2.25
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