It's beginning to look a lot like a global currency endgame, with stocks in Japan taking a brutal beating overnight - down 559.43, (-3.15%); along with Hong Kong, as the Hang Seng wasn't singing, losing 455.25, (-2.34%). The Shanghai Stock Exchange got an ominous boost from its own version of America's PPT, losing a mere 10 points, closing at 2739.25.
European bourses likewise were battered, with the majors down between one and 1 1/2%. The US session looks ugly early, but turned around abruptly mid-morning, coinciding with the crude supply report. In what can only be perceived as a counter-intuitive, short-covering move (otherwise known as fake, or phony), oil closed nearly 8% higher on the day, despite the crude supply growing to an all-time high.
The desperation of central banker manipulation of markets to forestall the unavoidable defaults is palpable.
Advice, for whatever it's worth, is to flee stocks or sell rallies, if one must continue to play in the global money casino.
Bank stocks were down once again, with the bank index already in a bear market. It's difficult to mask the issues facing oil production firms with unplayable debts and the banks that issued them oodles of cheap credit over the preceding six to seven years. Defaults are already happening and the pace can only increase.
Meanwhile, gold and silver investors are finally feeling good about their precious metals. Gold touched $1145 an ounce, the best price since late October.
Silver ramped to 14.80, closed in NY at 14.65, the best level in more than three months.
While not quite a breakout, the metals seem an obvious choice in a world of fraud, overvalued equities and treasuries issuing notes with negative interest rates.
Today's fiasco:
S&P 500: 1,912.53, +9.50 (0.50%)
Dow: 16,336.66, +183.12 (1.13%)
NASDAQ: 4,504.24, -12.71 (0.28%)
Crude Oil 32.10 +7.43% Gold 1,139.90 +1.13% EUR/USD 1.1082 +1.42% 10-Yr Bond 1.8810 +0.91% Corn 370.50 -0.54% Copper 2.10 +2.09% Silver 14.65 +2.56% Natural Gas 2.04 +0.64% Russell 2000 1,010.30 +0.14% VIX 21.65 -1.50% BATS 1000 20,553.93 +0.97% GBP/USD 1.4591 +1.27% USD/JPY 118.04
Wednesday, February 3, 2016
Tuesday, February 2, 2016
Stocks, Oil Whacked Again; 10-Year Note at 1.86%; Yellen's Fed in Shambles
It's official.
The groundhog didn't see his shadow, and Janet Yellen didn't see the recession just ahead, proving, within a shadow of doubt, that animals have better sense than most humans.
At least in the case of furry rodents versus doctors of economics, the rodentia class is in a class all its own. Punxsutawney Phil, the most famous of ground hog prognosticators, came outside this morning and reassured everybody in the Northeast that the most mild winter in decades would continue, and, to boot, be short-lived.
By not seeing his shadow, Phil assuaged the assembled crowd that what remains of winter would be over within two weeks, rather than the usual six week span that extends nearly to the first day of Spring, March 20.
Despite this being a leap year, which adds a full day to the cruel month of February, residents in the most densely-populated area of the country seem to be settled in for a short stay on the chilly side.
In upstate New York, there is little to no snow on the ground. What remains are a few remnants of shoveled piles that take a little longer to melt, though even that should be gone by tomorrow, as temperatures from Buffalo to Albany are expected to approach sixty degrees on Wednesday.
Similar circumstances prevail throughout the Mid-Atlantic region and into New York, Pennsylvania, New Jersey and Massachusetts. The milder-than-normal conditions have resulted in lower use of heating fuels such as oil and natural gas, both of which are hovering around decades-long lows.
As for the Federal Reserve and the captain of that sinking ship, Janet Yellen, she and her hench-fellows seem to be on the wrong side of economic history, considering that since their historic rate hike in mid-December, interest rates have gone in the opposite direction, the 10-year note today closing at 1.86%, as the winds of global deflation and tight labor conditions continue to push consumer demand and consumption lower and lower.
Compounding the complexity of the Fed's non-tenable situation are the twin engines of stocks and oil, both of which have hit stall speed in 2016. WTI crude close in New York within whispering distance of the $30 mark, while the major stock indices were battered into submission by a combination of reduced earnings capacity and a growing confidence gap from investors.
Even with last week's brave showing by the markets in the face of a 2015 fourth quarter that slipped to 0.7% growth, stocks were unable to regain the footing which took the Dow 400 points higher on Friday as the Bank of Japan endorsed negative interest rates on its treasury bonds extending though eight years.
Supposedly, cheap, easy money was good news for the stock market. However, with the BOJ cancelling a treasury auction today due to lack of interest (no pun intended) from selected participants, equity markets around the world backtracked towards the lows of January. Apparently, there aren't many out there who see it as a prudent idea to pay somebody to hold your money.
Negative interest rate policy, aka NIRP, is the death-knell of central bankers. Traditionally, banks paid OUT interest on savings, but, in this decade of upside-down economics, the glorious kings and queens of monetary policy are sticking to the belief that people are so afraid of losing what they've earned that they will pay to have the banks hold it for them.
Mattresses and shotguns are back in style, kids, but nobody seems to have told the central bankers. Everybody from simple savers to mega-millionaires are losing confidence in a clearly broken system, pulling their assets out and into cash, precious metals, gemstones, art, real estate, or other stores of value that have stood the test of time. The only buyers of government debt are governments, a condition which cannot be sustained long.
Truth be known, the Fed, the ECB, BOJ and PBOC are all aware of this condition and have yet to devise a strategy that will resolve the liquidity and solvency crunch with a minimum of pain. Pain will come to many, precisely those holding debt which cannot be repaid. Ideally, this epoch of economic history will see the end of central banking with fiat currencies and fractional reserves.
We may be within weeks or months of a global reset, a change in the nature of money which will tear at the fabric of society itself.
Stay tuned. This is only the middle of the show which started in 2008.
Today's crap shoot:
S&P 500: 1,903.03, -36.35 (1.87%)
Dow: 16,153.54, -295.64 (1.80%)
NASDAQ: 4,516.95, -103.42 (2.24%)
Crude Oil 30.02 -5.06% Gold 1,129.20 +0.11% EUR/USD 1.0920 +0.27% 10-Yr Bond 1.8640 -5.19% Corn 372.00 +0.20% Copper 2.05 -0.29% Silver 14.31 -0.26% Natural Gas 2.03 -5.81% Russell 2000 1,008.84 -2.28% VIX 21.98 +10.01% BATS 1000 20,356.76 -1.72% GBP/USD 1.4411 -0.10% USD/JPY 119.84
The groundhog didn't see his shadow, and Janet Yellen didn't see the recession just ahead, proving, within a shadow of doubt, that animals have better sense than most humans.
At least in the case of furry rodents versus doctors of economics, the rodentia class is in a class all its own. Punxsutawney Phil, the most famous of ground hog prognosticators, came outside this morning and reassured everybody in the Northeast that the most mild winter in decades would continue, and, to boot, be short-lived.
By not seeing his shadow, Phil assuaged the assembled crowd that what remains of winter would be over within two weeks, rather than the usual six week span that extends nearly to the first day of Spring, March 20.
Despite this being a leap year, which adds a full day to the cruel month of February, residents in the most densely-populated area of the country seem to be settled in for a short stay on the chilly side.
In upstate New York, there is little to no snow on the ground. What remains are a few remnants of shoveled piles that take a little longer to melt, though even that should be gone by tomorrow, as temperatures from Buffalo to Albany are expected to approach sixty degrees on Wednesday.
Similar circumstances prevail throughout the Mid-Atlantic region and into New York, Pennsylvania, New Jersey and Massachusetts. The milder-than-normal conditions have resulted in lower use of heating fuels such as oil and natural gas, both of which are hovering around decades-long lows.
As for the Federal Reserve and the captain of that sinking ship, Janet Yellen, she and her hench-fellows seem to be on the wrong side of economic history, considering that since their historic rate hike in mid-December, interest rates have gone in the opposite direction, the 10-year note today closing at 1.86%, as the winds of global deflation and tight labor conditions continue to push consumer demand and consumption lower and lower.
Compounding the complexity of the Fed's non-tenable situation are the twin engines of stocks and oil, both of which have hit stall speed in 2016. WTI crude close in New York within whispering distance of the $30 mark, while the major stock indices were battered into submission by a combination of reduced earnings capacity and a growing confidence gap from investors.
Even with last week's brave showing by the markets in the face of a 2015 fourth quarter that slipped to 0.7% growth, stocks were unable to regain the footing which took the Dow 400 points higher on Friday as the Bank of Japan endorsed negative interest rates on its treasury bonds extending though eight years.
Supposedly, cheap, easy money was good news for the stock market. However, with the BOJ cancelling a treasury auction today due to lack of interest (no pun intended) from selected participants, equity markets around the world backtracked towards the lows of January. Apparently, there aren't many out there who see it as a prudent idea to pay somebody to hold your money.
Negative interest rate policy, aka NIRP, is the death-knell of central bankers. Traditionally, banks paid OUT interest on savings, but, in this decade of upside-down economics, the glorious kings and queens of monetary policy are sticking to the belief that people are so afraid of losing what they've earned that they will pay to have the banks hold it for them.
Mattresses and shotguns are back in style, kids, but nobody seems to have told the central bankers. Everybody from simple savers to mega-millionaires are losing confidence in a clearly broken system, pulling their assets out and into cash, precious metals, gemstones, art, real estate, or other stores of value that have stood the test of time. The only buyers of government debt are governments, a condition which cannot be sustained long.
Truth be known, the Fed, the ECB, BOJ and PBOC are all aware of this condition and have yet to devise a strategy that will resolve the liquidity and solvency crunch with a minimum of pain. Pain will come to many, precisely those holding debt which cannot be repaid. Ideally, this epoch of economic history will see the end of central banking with fiat currencies and fractional reserves.
We may be within weeks or months of a global reset, a change in the nature of money which will tear at the fabric of society itself.
Stay tuned. This is only the middle of the show which started in 2008.
Today's crap shoot:
S&P 500: 1,903.03, -36.35 (1.87%)
Dow: 16,153.54, -295.64 (1.80%)
NASDAQ: 4,516.95, -103.42 (2.24%)
Crude Oil 30.02 -5.06% Gold 1,129.20 +0.11% EUR/USD 1.0920 +0.27% 10-Yr Bond 1.8640 -5.19% Corn 372.00 +0.20% Copper 2.05 -0.29% Silver 14.31 -0.26% Natural Gas 2.03 -5.81% Russell 2000 1,008.84 -2.28% VIX 21.98 +10.01% BATS 1000 20,356.76 -1.72% GBP/USD 1.4411 -0.10% USD/JPY 119.84
Monday, February 1, 2016
January Was A Dud; February Starts Badly; Markets Due for Breakdown
Call this a "call 'em as we see 'em" post.
Stocks started February without continuation of the "Japan Negative Interest Rates" rally of Friday, falling out at the opening bell and doing little to inspire confidence throughout the session.
The stock market is down and will likely stay down for the remainder of 2016, go lower in 2017 and disintegrate in 2018. That's the optimistic point of view.
There's nothing good in this market. You pick stocks you think have a good business model, reliable earnings, maybe even a dividend, and, then, WHAM! it gets whacked like a mafioso underling who looked the wrong way at the boss.
Take for instance, the case of this stock (ADS), which last week released earnings above consensus, though the top line (revenue) fell a little short. What happened? Nobody is certain, but the stock took a 20% haircut on January 28. There seemed to be no justification for the radical downsizing of the price of Alliance Data Systems, a company heavily involved in online advertising.
That's just a sampling. Things like this happen every day, without warning nor explanation (we looked, and couldn't find a reasonable telling). So, say you had $20,000 tied up in this company. That was Wednesday. As of close of business on Thursday, you have $16,000. There's a couple months off your planned retirement.
Suppose you held it in a 401k or other such pension vehicle. There was absolutely nothing you could do about it, either before or after the fact. You were stuck, like a good sucker at a rigged casino. Thank you for playing. Come again. And individuals do. They come back for more and more punishment. They loved it the past seven years, when stocks went straight up, no matter what. But now, things have changed.
It's still not too late to pull all your money out and invest in silver, gold, cash, and anything else you might need in retirement (canned goods, anyone?).
The US stock markets - and likely, all markets, globally - suck. They suck the life out of investors and then, you get to pay taxes on any gains, and sometimes, on losses. So, suck it up or get out.
Today's closing fake numbers:
S&P 500: 1,939.38, -0.86 (0.04%)
Dow: 16,449.18, -17.12 (0.10%)
NASDAQ: 4,620.37, +6.41 (0.14%)
Crude Oil 31.64 -5.89% Gold 1,128.40 +1.07% EUR/USD 1.0888 +0.53% 10-Yr Bond 1.9660 +1.81% Corn 371.00 -0.27% Copper 2.06 -0.41% Silver 14.35 +0.75% Natural Gas 2.15 -6.48% Russell 2000 1,032.39 -0.29% VIX 19.98 -1.09% BATS 1000 20,713.55 +0.14% GBP/USD 1.4426 +1.35% USD/JPY 120.9405 -0.31%
Stocks started February without continuation of the "Japan Negative Interest Rates" rally of Friday, falling out at the opening bell and doing little to inspire confidence throughout the session.
The stock market is down and will likely stay down for the remainder of 2016, go lower in 2017 and disintegrate in 2018. That's the optimistic point of view.
There's nothing good in this market. You pick stocks you think have a good business model, reliable earnings, maybe even a dividend, and, then, WHAM! it gets whacked like a mafioso underling who looked the wrong way at the boss.
Take for instance, the case of this stock (ADS), which last week released earnings above consensus, though the top line (revenue) fell a little short. What happened? Nobody is certain, but the stock took a 20% haircut on January 28. There seemed to be no justification for the radical downsizing of the price of Alliance Data Systems, a company heavily involved in online advertising.
That's just a sampling. Things like this happen every day, without warning nor explanation (we looked, and couldn't find a reasonable telling). So, say you had $20,000 tied up in this company. That was Wednesday. As of close of business on Thursday, you have $16,000. There's a couple months off your planned retirement.
Suppose you held it in a 401k or other such pension vehicle. There was absolutely nothing you could do about it, either before or after the fact. You were stuck, like a good sucker at a rigged casino. Thank you for playing. Come again. And individuals do. They come back for more and more punishment. They loved it the past seven years, when stocks went straight up, no matter what. But now, things have changed.
It's still not too late to pull all your money out and invest in silver, gold, cash, and anything else you might need in retirement (canned goods, anyone?).
The US stock markets - and likely, all markets, globally - suck. They suck the life out of investors and then, you get to pay taxes on any gains, and sometimes, on losses. So, suck it up or get out.
Today's closing fake numbers:
S&P 500: 1,939.38, -0.86 (0.04%)
Dow: 16,449.18, -17.12 (0.10%)
NASDAQ: 4,620.37, +6.41 (0.14%)
Crude Oil 31.64 -5.89% Gold 1,128.40 +1.07% EUR/USD 1.0888 +0.53% 10-Yr Bond 1.9660 +1.81% Corn 371.00 -0.27% Copper 2.06 -0.41% Silver 14.35 +0.75% Natural Gas 2.15 -6.48% Russell 2000 1,032.39 -0.29% VIX 19.98 -1.09% BATS 1000 20,713.55 +0.14% GBP/USD 1.4426 +1.35% USD/JPY 120.9405 -0.31%
Friday, January 29, 2016
US 4th Quarter GDP Grows Feeble 0.7%; Stocks Soar
Apparently, anything better then zero - with the notable exception of the federal funds rate - is cause for Wall Street to break out the champagne and celebrate.
Prior to Friday's opening bell, the BLS produced the first estimate of 4th quarter GDP, showing that the world's largest economy grew by an unimpressive 0.7%.
Back when the United State of America actually had a functioning economy, news such as today's would have caused a rout in stocks. However, in today's fabricated, upside-down mess dominated by zombie banks, a stalled-out global backdrop and an utterly clueless yet self-satisfied Federal Reserve, Wall Street's computer-driven madness produces a 2 1/2% rally, ending January still in the red, just not by as much as, say, yesterday.
There are no words left to describe such idiocy, so let's just say, "have a nice weekend."
Editor's Note: Maybe going back to publishing this blog on a daily basis again wasn't such a good idea after all. The markets are even more manipulated and indecipherable than ever.
S&P 500: 1,940.24, +46.88 (2.48%)
Dow: 16,466.30, +396.66 (2.47%)
NASDAQ: 4,613.95, +107.28 (2.38%)
Crude Oil 33.59 +1.11% Gold 1,117.70 +0.19% EUR/USD 1.0834 -0.98% 10-Yr Bond 1.9310 -2.72% Corn 371.00 +1.50% Copper 2.06 +0.51% Silver 14.26 +0.20% Natural Gas 2.31 +5.87% Russell 2000 1,035.38 +3.20% VIX 20.20 -9.90% BATS 1000 20,684.36 +2.35% GBP/USD 1.4251 -0.76% USD/JPY 121.0870 +1.91%
Prior to Friday's opening bell, the BLS produced the first estimate of 4th quarter GDP, showing that the world's largest economy grew by an unimpressive 0.7%.
Back when the United State of America actually had a functioning economy, news such as today's would have caused a rout in stocks. However, in today's fabricated, upside-down mess dominated by zombie banks, a stalled-out global backdrop and an utterly clueless yet self-satisfied Federal Reserve, Wall Street's computer-driven madness produces a 2 1/2% rally, ending January still in the red, just not by as much as, say, yesterday.
There are no words left to describe such idiocy, so let's just say, "have a nice weekend."
Editor's Note: Maybe going back to publishing this blog on a daily basis again wasn't such a good idea after all. The markets are even more manipulated and indecipherable than ever.
S&P 500: 1,940.24, +46.88 (2.48%)
Dow: 16,466.30, +396.66 (2.47%)
NASDAQ: 4,613.95, +107.28 (2.38%)
Crude Oil 33.59 +1.11% Gold 1,117.70 +0.19% EUR/USD 1.0834 -0.98% 10-Yr Bond 1.9310 -2.72% Corn 371.00 +1.50% Copper 2.06 +0.51% Silver 14.26 +0.20% Natural Gas 2.31 +5.87% Russell 2000 1,035.38 +3.20% VIX 20.20 -9.90% BATS 1000 20,684.36 +2.35% GBP/USD 1.4251 -0.76% USD/JPY 121.0870 +1.91%
Thursday, January 28, 2016
Stocks Bounce, Reasons Unknown, 10-Year Note Yield Below Two Percent
Stocks in the US had one of their best days of the new year on Thursday, though it's difficult to put a finger on exactly why that was the case.
Data from durable goods was weak and jobless claims (unemployment) were higher, so there must be an invisible hand (see PPT, for instance) pushing stocks up.
Other oddities on the day were oil gaining to close at 33.72 per barrel and the 10-year note closing below a two percent yield, at 1.985%, which normally would signal a rout in equities.
This is what one gets when markets are endlessly manipulated by government forces and the Federal Reserve.
Trade cautiously.
S&P 500: 1,893.36, +10.41 (0.55%)
Dow: 16,069.64, +125.18 (0.79%)
NASDAQ: 4,506.68, +38.51 (0.86%)
Crude Oil 33.72 +4.40% Gold 1,114.10 -0.15% EUR/USD 1.0940 +0.36% 10-Yr Bond 1.9850 -0.80% Corn 365.75 -0.95% Copper 2.05 -0.53% Silver 14.24 -1.48% Natural Gas 2.22 +3.15% Russell 2000 1,003.27 +0.05% VIX 22.42 -2.99% BATS 1000 20,209.43 +0.62% GBP/USD 1.4356 +0.77% USD/JPY 118.8150 +0.20%
Data from durable goods was weak and jobless claims (unemployment) were higher, so there must be an invisible hand (see PPT, for instance) pushing stocks up.
Other oddities on the day were oil gaining to close at 33.72 per barrel and the 10-year note closing below a two percent yield, at 1.985%, which normally would signal a rout in equities.
This is what one gets when markets are endlessly manipulated by government forces and the Federal Reserve.
Trade cautiously.
S&P 500: 1,893.36, +10.41 (0.55%)
Dow: 16,069.64, +125.18 (0.79%)
NASDAQ: 4,506.68, +38.51 (0.86%)
Crude Oil 33.72 +4.40% Gold 1,114.10 -0.15% EUR/USD 1.0940 +0.36% 10-Yr Bond 1.9850 -0.80% Corn 365.75 -0.95% Copper 2.05 -0.53% Silver 14.24 -1.48% Natural Gas 2.22 +3.15% Russell 2000 1,003.27 +0.05% VIX 22.42 -2.99% BATS 1000 20,209.43 +0.62% GBP/USD 1.4356 +0.77% USD/JPY 118.8150 +0.20%
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