In a midday speech before the Economic Club of New York, Janet Yellen's comments included comments concerning weak growth abroad, low oil prices and uncertainty over China, saying that the Federal Reserve would proceed "cautiously" on further rate hikes this year.
At their March meet two weeks ago, the FOMC of the Fed lowered the number of expected rate hikes from four to two for 2016, and Yellen's speech today was the first public commentary form the Fed Chair since that time.
Other members had voiced opinions which could be considered mildly hawkish, but Yellen was decidedly dovish in today's prepared remarks.
Obviously, Wall Street was rather pleased with the Fed Chair's stock market elixir, sending the S&P 500 to its highest level of 2016. Stocks ended a five-week streak of positive gains with a lower close last week, but Yellen and her friends at the Fed apparently didn't want the market to turn down again.
With the kind of policy the Fed has been brandishing for the past seven years, stocks should be headed back toward all-time highs in due time, likely within the next few months. With the Dow running up a spectacular 2000 points in the last six-plus weeks, the DJIA stands just more than 700 points from the record set last year (May: 18,351.36).
The S&P needs to gain another 80 points to surpass the all-time high of last May (2134.72).
Party on, Janet!
S&P 500: 2,055.01, +17.96 (0.88%)
Dow: 17,633.11, +97.72 (0.56%)
NASDAQ: 4,846.62, +79.84 (1.67%)
Crude Oil 38.49 -2.28% Gold 1,242.50 +1.84% EUR/USD 1.1293 +0.87% 10-Yr Bond 1.81 -2.99% Corn 372.25 +0.47% Copper 2.21 -1.49% Silver 15.36 +1.12% Natural Gas 1.98 +2.38% Russell 2000 1,109.08 +2.67% VIX 13.82 -9.32% BATS 1000 20,682.61 0.00% GBP/USD 1.4387 +0.92% USD/JPY 112.6685 -0.69%
Tuesday, March 29, 2016
Monday, March 28, 2016
Provable Nixed Markets: VIX or Natural Gas, Take Your Pick
Noting that markets are in a near-trance module of late (thank you, Janet Yellen and central bankers everywhere), it has occurred to financial followers that possibly one could track the big movers of the day in an effort to ferret out any semblance of a pattern in the current conundrum.
With that, taken from the list below are the (un)usual suspects, the venerable VIX, which moved up by 3.39% on the session, and natty natural gas, ahead by 2.71%.
Actually, these moves tells nobody nothing (or, perhaps, everybody everything they need to know), since the VIX, a supposed measure of volatility, moved in such a manner as to suggest, well, volatility, when none existed.
As for natural gas, the price alone dictates large moves in percentage terms. With the price generally below two dollars for the past two years, a twenty-cent move is automatically good for 10%. Thus, today's gain of 2.71% was the result of a price move of roughly five cents. So, just because it is expected to be a little cooler than normal in Nashua, NH, next week, it does not automatically imply that the price of natural gas will be necessarily higher, nor does it mean that the price will stay there for any reasonable expectation of time.
Thus, the discovery du jour isn't so much based on any magic or even logical formula, but simple understanding of markets and central bank control through various proxies: markets are in a semi-permanent state of broken, and there's little any concerted effort by any group of individuals, investors, or fund managers can do about it. A volatility index moves when there is no volatility present, and a five-cent move in the price of natural gas won't set the commodity world afire.
In just a few words, these are not real markets, and you only need to have your eyes open to realize that.
Today's Laughable, Lamentable Louse:
S&P 500: 2,037.05, +1.11 (0.05%)
Dow: 17,535.39, +19.66 (0.11%)
NASDAQ: 4,766.79, -6.72 (0.14%)
Crude Oil 39.39 -0.18% Gold 1,220.10 -0.12% EUR/USD 1.1196 +0.28% 10-Yr Bond 1.87 -1.58% Corn 371.25 +0.34% Copper 2.24 +0.63% Silver 15.20 +0.01% Natural Gas 1.93 +2.71% Russell 2000 1,080.23 +0.06% VIX 15.24 +3.39% BATS 1000 20,682.61 0.00% GBP/USD 1.4255 +0.92% USD/JPY 113.3830 +0.08%
With that, taken from the list below are the (un)usual suspects, the venerable VIX, which moved up by 3.39% on the session, and natty natural gas, ahead by 2.71%.
Actually, these moves tells nobody nothing (or, perhaps, everybody everything they need to know), since the VIX, a supposed measure of volatility, moved in such a manner as to suggest, well, volatility, when none existed.
As for natural gas, the price alone dictates large moves in percentage terms. With the price generally below two dollars for the past two years, a twenty-cent move is automatically good for 10%. Thus, today's gain of 2.71% was the result of a price move of roughly five cents. So, just because it is expected to be a little cooler than normal in Nashua, NH, next week, it does not automatically imply that the price of natural gas will be necessarily higher, nor does it mean that the price will stay there for any reasonable expectation of time.
Thus, the discovery du jour isn't so much based on any magic or even logical formula, but simple understanding of markets and central bank control through various proxies: markets are in a semi-permanent state of broken, and there's little any concerted effort by any group of individuals, investors, or fund managers can do about it. A volatility index moves when there is no volatility present, and a five-cent move in the price of natural gas won't set the commodity world afire.
In just a few words, these are not real markets, and you only need to have your eyes open to realize that.
Today's Laughable, Lamentable Louse:
S&P 500: 2,037.05, +1.11 (0.05%)
Dow: 17,535.39, +19.66 (0.11%)
NASDAQ: 4,766.79, -6.72 (0.14%)
Crude Oil 39.39 -0.18% Gold 1,220.10 -0.12% EUR/USD 1.1196 +0.28% 10-Yr Bond 1.87 -1.58% Corn 371.25 +0.34% Copper 2.24 +0.63% Silver 15.20 +0.01% Natural Gas 1.93 +2.71% Russell 2000 1,080.23 +0.06% VIX 15.24 +3.39% BATS 1000 20,682.61 0.00% GBP/USD 1.4255 +0.92% USD/JPY 113.3830 +0.08%
Friday, March 25, 2016
Durable Goods Not So Good; Stocks End Five-Week-Long Rally; GDP Is Bogus
Markets are closed on Friday in observance of Good Friday (who said we weren't a religious nation?), so the paltry returns on equites ended a dull week in the red, the first time a week has ended negative since mid-February.
Prior to the open on Thursday, durable goods for February were released and the numbers were far from encouraging.
Durable Goods New Orders (Ex-Transports) fell 0.5% YoY, extending its losing streak to 13 months. All segments of the durable goods report saw negative month-over-month direction with headline -2.8%. Prior data was revised lower, Capital goods orders fell more than expected (-1.8% MoM).
Durable goods new orders down -2.8%, exp. -3.0%; prior revised down to 4.2% for Jan. from 4.7%
New orders ex-trans. down 1%, Exp. -0.3%; prior revised to 1.2% from 1.7%
Capital goods orders ex-aircraft down 1.8%, Exp. -0.5%, prior revised to 3.1% from 3.4%
Capital goods shipments ex-aircraft down 1.1%, Exp. +0.3%, prior revised to -1.3% from -0.4%
That was about all the market could stand and not puke up more gains.
On Friday, with markets closed, the government released the final estimate for 4th quarter 2015 GDP, posting a figure that was above all estimates, a suspicious gain of 1.4%. This spurious number followed a first estimate of 0.7% in January and a second estimate at an even 1.0% in February. Apparently, everything is improving in the alternate reality that is Washington D.C. (please, please, indict Hillary). It has been pointed out by various writers that GDP is a poor measurement of the health of an economy. Such as this current reading, which is heavily influenced by health care costs and soaring rents, in addition to the hedonic adjustments and other blunt instruments of deception, the numbers end up meaning little in terms of the common man, woman or family.
Lastly, we'd like to share this fine post from the blog Viable Opposition, with readers of Money Daily:
The Long Wave and the Failure of Central Banks. Highly recommended reading and a great chart at the end.
Posts such as this - and the general appeal of the blog overall - points up why the establishment is failing and fearful of the rising tide of populism. Bloggers don't get paid for appearances on CNBC or Bloomberg but their views and opinions are often superior, better researched, unbiased and non-political than what the mainstream media tries to sell as gospel.
God (or Donald Trump) save us.
For the week:
Dow: -86.57 (0.49%)
S&P 500: -13.64 (0.67%)
NASDAQ: -22.14 (0.46%)
Thursday's Finish:
S&P 500: 2,035.94, -0.77 (0.04%)
Dow: 17,515.73, +13.14 (0.08%)
NASDAQ: 4,773.50, +4.64 (0.10%)
Crude Oil 39.63 -0.40% Gold 1,217.20 -0.56% EUR/USD 1.1180 -0.02% 10-Yr Bond 1.90 +1.33% Corn 369.25 +0.20% Copper 2.24 -0.02% Silver 15.19 -0.57% Natural Gas 1.89 +1.12% Russell 2000 1,079.54 +0.36% VIX 14.73 -1.41% BATS 1000 20,682.61 0.00% GBP/USD 1.4152 +0.23% USD/JPY 112.8450 +0.42%
Prior to the open on Thursday, durable goods for February were released and the numbers were far from encouraging.
Durable Goods New Orders (Ex-Transports) fell 0.5% YoY, extending its losing streak to 13 months. All segments of the durable goods report saw negative month-over-month direction with headline -2.8%. Prior data was revised lower, Capital goods orders fell more than expected (-1.8% MoM).
Durable goods new orders down -2.8%, exp. -3.0%; prior revised down to 4.2% for Jan. from 4.7%
New orders ex-trans. down 1%, Exp. -0.3%; prior revised to 1.2% from 1.7%
Capital goods orders ex-aircraft down 1.8%, Exp. -0.5%, prior revised to 3.1% from 3.4%
Capital goods shipments ex-aircraft down 1.1%, Exp. +0.3%, prior revised to -1.3% from -0.4%
That was about all the market could stand and not puke up more gains.
On Friday, with markets closed, the government released the final estimate for 4th quarter 2015 GDP, posting a figure that was above all estimates, a suspicious gain of 1.4%. This spurious number followed a first estimate of 0.7% in January and a second estimate at an even 1.0% in February. Apparently, everything is improving in the alternate reality that is Washington D.C. (please, please, indict Hillary). It has been pointed out by various writers that GDP is a poor measurement of the health of an economy. Such as this current reading, which is heavily influenced by health care costs and soaring rents, in addition to the hedonic adjustments and other blunt instruments of deception, the numbers end up meaning little in terms of the common man, woman or family.
Lastly, we'd like to share this fine post from the blog Viable Opposition, with readers of Money Daily:
The Long Wave and the Failure of Central Banks. Highly recommended reading and a great chart at the end.
Posts such as this - and the general appeal of the blog overall - points up why the establishment is failing and fearful of the rising tide of populism. Bloggers don't get paid for appearances on CNBC or Bloomberg but their views and opinions are often superior, better researched, unbiased and non-political than what the mainstream media tries to sell as gospel.
God (or Donald Trump) save us.
For the week:
Dow: -86.57 (0.49%)
S&P 500: -13.64 (0.67%)
NASDAQ: -22.14 (0.46%)
Thursday's Finish:
S&P 500: 2,035.94, -0.77 (0.04%)
Dow: 17,515.73, +13.14 (0.08%)
NASDAQ: 4,773.50, +4.64 (0.10%)
Crude Oil 39.63 -0.40% Gold 1,217.20 -0.56% EUR/USD 1.1180 -0.02% 10-Yr Bond 1.90 +1.33% Corn 369.25 +0.20% Copper 2.24 -0.02% Silver 15.19 -0.57% Natural Gas 1.89 +1.12% Russell 2000 1,079.54 +0.36% VIX 14.73 -1.41% BATS 1000 20,682.61 0.00% GBP/USD 1.4152 +0.23% USD/JPY 112.8450 +0.42%
Wednesday, March 23, 2016
Topped Out? Stocks, Oil Fall On Stronger Dollar
Concerned over fears that the Fed might actually raise rates at the April FOMC meeting, investors took some long-overdue profits after five straight weeks of gains on the S&P and Dow Jones Industrials.
Nearly everything else was in the red on the day as the dollar strengthened against major currencies, most notably the British Pound, sent reeling over fears that UK residents might vote - in an upcoming June referendum - for Britain to leave the EU, a new poll showed.
Such cracks in the facade of the status quo are troubling for elite investors clinging to their one and two-percent dividends in stocks and bonds while the rest of the world crumbles under the weight of central bank intransigence.
Adding to the worries are the recent attacks by ISIS in the heart of the EU, Brussels, where Tuesday's terrorist bombings occurred at the airport and in a subway station just blocks from the EU parliament building.
Gold, silver, bond yields and oil also fell sharply on the day as a reassessment of priorities seems to be underway. The rout of Hillary Clinton by Idaho and Utah by insurgent candidate, Bernie Sanders, also weighed. Ted Cruz and Donald Trump split the vote on Tuesday, as Cruz captured all delegates in Utah and Trump took home the prize in Arizona's winner-take-all primary.
Oil stockpiles expanded for a fifth straight week, as the US glut expanded by 9.4 million barrels last week to 532.5 million barrels, an amount triple what analysts had expected.
While one day's slipshod results may not be nearly enough data to imply anything other than market noise, the alternative argument figures that, having made back all the losses for the year, it's time to book early profits and head for safer havens. Bonds, where yields fall as their price improves, seems to be wagging the tail of the stock market at present. The benchmark 10-year note has rallied for the better part of a month, though it still remains below two percent since dipping under that line on February 1st.
With the rest of the developed world embracing negative interest rates at the short end of the curve (though Japan's now-inverted curve has the ten-year JGB lower than the overnight rate), the Us continues to try to buck the trend by implying rate hikes ahead.
Nothing could be further from the truth. The Fed has already seen what a mere 25 basis point hike in the federal funds rate produced - a sharp decline in stock prices - and they're not about to embark upon that trip now that those losses have been retaken.
As many analysts have pointed out, the Fed is trapped, with an economy not strong enough to warrant rate increases and a base rate too low to offer any resistance to recessionary or deflationary forces. Their only resource available in the case that the economy creaks and cracks is negative rates, a subject they have already publicly broached.
Today's Setback:
S&P 500: 2,036.71, -13.09 (0.64%)
Dow: 17,502.59, -79.98 (0.45%)
NASDAQ: 4,768.86, -52.80 (1.10%)
Crude Oil 39.80 -3.98% Gold 1,220.80 -2.23% EUR/USD 1.1182 -0.32% 10-Yr Bond 1.88 -3.10% Corn 367.25 -0.74% Copper 2.24 -2.23% Silver 15.27 -3.90% Natural Gas 1.78 -4.29% Russell 2000 1,075.70 -1.97% VIX 14.94 +5.43% BATS 1000 20,682.61 0.00% GBP/USD 1.4116 -0.71% USD/JPY 112.4155 +0.07%
Nearly everything else was in the red on the day as the dollar strengthened against major currencies, most notably the British Pound, sent reeling over fears that UK residents might vote - in an upcoming June referendum - for Britain to leave the EU, a new poll showed.
Such cracks in the facade of the status quo are troubling for elite investors clinging to their one and two-percent dividends in stocks and bonds while the rest of the world crumbles under the weight of central bank intransigence.
Adding to the worries are the recent attacks by ISIS in the heart of the EU, Brussels, where Tuesday's terrorist bombings occurred at the airport and in a subway station just blocks from the EU parliament building.
Gold, silver, bond yields and oil also fell sharply on the day as a reassessment of priorities seems to be underway. The rout of Hillary Clinton by Idaho and Utah by insurgent candidate, Bernie Sanders, also weighed. Ted Cruz and Donald Trump split the vote on Tuesday, as Cruz captured all delegates in Utah and Trump took home the prize in Arizona's winner-take-all primary.
Oil stockpiles expanded for a fifth straight week, as the US glut expanded by 9.4 million barrels last week to 532.5 million barrels, an amount triple what analysts had expected.
While one day's slipshod results may not be nearly enough data to imply anything other than market noise, the alternative argument figures that, having made back all the losses for the year, it's time to book early profits and head for safer havens. Bonds, where yields fall as their price improves, seems to be wagging the tail of the stock market at present. The benchmark 10-year note has rallied for the better part of a month, though it still remains below two percent since dipping under that line on February 1st.
With the rest of the developed world embracing negative interest rates at the short end of the curve (though Japan's now-inverted curve has the ten-year JGB lower than the overnight rate), the Us continues to try to buck the trend by implying rate hikes ahead.
Nothing could be further from the truth. The Fed has already seen what a mere 25 basis point hike in the federal funds rate produced - a sharp decline in stock prices - and they're not about to embark upon that trip now that those losses have been retaken.
As many analysts have pointed out, the Fed is trapped, with an economy not strong enough to warrant rate increases and a base rate too low to offer any resistance to recessionary or deflationary forces. Their only resource available in the case that the economy creaks and cracks is negative rates, a subject they have already publicly broached.
Today's Setback:
S&P 500: 2,036.71, -13.09 (0.64%)
Dow: 17,502.59, -79.98 (0.45%)
NASDAQ: 4,768.86, -52.80 (1.10%)
Crude Oil 39.80 -3.98% Gold 1,220.80 -2.23% EUR/USD 1.1182 -0.32% 10-Yr Bond 1.88 -3.10% Corn 367.25 -0.74% Copper 2.24 -2.23% Silver 15.27 -3.90% Natural Gas 1.78 -4.29% Russell 2000 1,075.70 -1.97% VIX 14.94 +5.43% BATS 1000 20,682.61 0.00% GBP/USD 1.4116 -0.71% USD/JPY 112.4155 +0.07%
Stocks Settled In Aftermath of Brussels Terror
The terror bombings at the Brussels airport and in the subway system kept a lid on stocks Tuesday.
S&P 500: 2,049.80, -1.80 (0.09%)
Dow: 17,582.57, -41.30 (0.23%)
NASDAQ: 4,821.66, +12.79 (0.27%)
Crude Oil 41.22 -0.72% Gold 1,248.80 +0.02% EUR/USD 1.1217 -0.22% 10-Yr Bond 1.94 +0.62% Corn 370.00 +0.14% Copper 2.29 +0.07% Silver 15.90 +0.09% Natural Gas 1.86 +1.91% Russell 2000 1,097.34 -0.11% VIX 14.17 +2.76% BATS 1000 20,682.61 0.00% GBP/USD 1.4214 -1.09% USD/JPY 112.3750 +0.21%
S&P 500: 2,049.80, -1.80 (0.09%)
Dow: 17,582.57, -41.30 (0.23%)
NASDAQ: 4,821.66, +12.79 (0.27%)
Crude Oil 41.22 -0.72% Gold 1,248.80 +0.02% EUR/USD 1.1217 -0.22% 10-Yr Bond 1.94 +0.62% Corn 370.00 +0.14% Copper 2.29 +0.07% Silver 15.90 +0.09% Natural Gas 1.86 +1.91% Russell 2000 1,097.34 -0.11% VIX 14.17 +2.76% BATS 1000 20,682.61 0.00% GBP/USD 1.4214 -1.09% USD/JPY 112.3750 +0.21%
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