Just maybe, somebody out there is reading the data rather than listening to the coo-cooing of Janet Yellen.
If so, somebody was in multiples on Tuesday, selling shares of just about everything as the Dow took a triple-digit loss, coming on the heels of Monday's sombre session.
Stocks backed off in a big way, with winners outpacing losers by a margin of better than 2:1. While the past two days may be nothing more than average market noise, there have been more voices of discontent airing their views of late, adding to the chorus of naysayers who say 23x earnings on the S&P is simply not sustainable, nor suitable for investment.
In an average environment, stocks should be sporting a 14-16 multiple. That has been the norm for the past 50 years, and there's sufficient data for which to back up those claims.
There is a possibility, albeit a minor one, that more than a few of the higher-profile analysts and brokers are quietly telling their clients that the market is overheating, especially at a time in which data points have not been particularly encouraging.
Add to the mix the recent decline in oil and the messy bond market (10-year note down again today), recent highs, and the conditions are ripe for a substantial decline.
What market-watchers gasped at in January of this year may be about to return. If that's the case, there's little the Fed can do - or say - to keep stocks at their current nosebleed levels.
They will try, though, that's for certain.
S&P 500: 2,045.17, -20.96 (1.01%)
Dow: 17,603.32, -133.68 (0.75%)
NASDAQ: 4,843.93, -47.86 (0.98%)
Crude Oil 36.47 +2.16% Gold 1,232.90 +1.12% EUR/USD 1.1382 -0.08% 10-Yr Bond 1.73 -2.92% Corn 355.75 +0.35% Copper 2.14 +0.12% Silver 15.14 +1.31% Natural Gas 1.94 -3.00% Russell 2000 1,095.85 -1.14% VIX 15.42 +9.21% BATS 1000 20,682.61 0.00% GBP/USD 1.4158 -0.77% USD/JPY 110.3350 -0.88%
Tuesday, April 5, 2016
Monday, April 4, 2016
April's Fools
Having been given the green light by Janet Yellen and her uber-dovish comments concerning the relaxed pace of interest rate increases, stocks closed Friday at their best levels of the year, erasing any nasty remembrances of the January and early February slump.
Monday brought the blues, a touch of reality, and maybe a case of buyer's remorse, as the major averages began the first full trading week of the month in a depressed vein.
Leading the charge to the downside was the usual culprit, crude oil, which slipped below $36/barrel on the current contract. The consistency of the oil slump can be attributed to a variety of causes, though the most obvious is slow or absent global economic growth. Major developed nations find themselves in a horrible bind due to limited opportunity for wage growth and slack demand for everything from farm equipment to fancy glasses.
While cheerleaders in the media are reluctant to mention any news which might be construed as even remotely negative, there is no mistaking the demographics of the developed world. Europe, Japan, and increasingly, the United States bear aging populations with no viable means of escape from the financial vortex of ultra-low interest rates except via the ultimate demise, death.
What the central banks and central planners of advanced economies have wrought with their ham-handed zero interest (and lower) environment is a world in which aging people without advancing incomes or prospects for opportunity have no viable means of protecting their savings. For those younger, saving is also crimped by these lower rates, pushing entire populations into risky, often leveraged investment schemes.
Economists have historical reference to ages marked by financial repression such as the current one, and they nearly always end in disaster, war, and a reordering of the global economic condition. Central banks desire inflation anywhere, while the population cries out for avenues for saving, putting the monetary system and the realities of life on a direct collision course.
The central banks must certainly know that there is nowhere out of this condition, but they are reluctant - indeed, they are violently opposed to the idea - to balance growth, productivity, wages and wealth creation. They have become the worst nightmare of the people, bent only toward risk in financial instruments, and against anything that might promote the general well-being. They have become the enemy of savers, anathema to the aging, and a net detraction from productive economies everywhere.
Perhaps it is all part of their plan, but, if it is, such a plan has been well-hidden because nobody with any amount of wealth or savings can see the wisdom of it. Unless stocks continue to rise in value forever - a distinct impossibility - humanity will be at the mercy of a small, useless band of monetarists who have not, as yet, propositioned any plan for the past seven years other than to cut interest rates and hope.
And we all know that hope is not a strategy.
S&P 500: 2,066.13, -6.65 (0.32%)
Dow: 17,737.00, -55.75 (0.31%)
NASDAQ: 4,891.80, -22.75 (0.46%)
Crude Oil 35.81 -2.66% Gold 1,216.90 -0.54% EUR/USD 1.1392 -0.02% 10-Yr Bond 1.78 -0.73% Corn 354.50 +0.14% Copper 2.14 -0.97% Silver 14.94 -0.74% Natural Gas 2.00 +2.45% Russell 2000 1,109.06 -0.77% VIX 14.17 +8.17% BATS 1000 20,682.61 0.00% GBP/USD 1.4264 +0.30% USD/JPY 111.3450 -0.28%
Monday brought the blues, a touch of reality, and maybe a case of buyer's remorse, as the major averages began the first full trading week of the month in a depressed vein.
Leading the charge to the downside was the usual culprit, crude oil, which slipped below $36/barrel on the current contract. The consistency of the oil slump can be attributed to a variety of causes, though the most obvious is slow or absent global economic growth. Major developed nations find themselves in a horrible bind due to limited opportunity for wage growth and slack demand for everything from farm equipment to fancy glasses.
While cheerleaders in the media are reluctant to mention any news which might be construed as even remotely negative, there is no mistaking the demographics of the developed world. Europe, Japan, and increasingly, the United States bear aging populations with no viable means of escape from the financial vortex of ultra-low interest rates except via the ultimate demise, death.
What the central banks and central planners of advanced economies have wrought with their ham-handed zero interest (and lower) environment is a world in which aging people without advancing incomes or prospects for opportunity have no viable means of protecting their savings. For those younger, saving is also crimped by these lower rates, pushing entire populations into risky, often leveraged investment schemes.
Economists have historical reference to ages marked by financial repression such as the current one, and they nearly always end in disaster, war, and a reordering of the global economic condition. Central banks desire inflation anywhere, while the population cries out for avenues for saving, putting the monetary system and the realities of life on a direct collision course.
The central banks must certainly know that there is nowhere out of this condition, but they are reluctant - indeed, they are violently opposed to the idea - to balance growth, productivity, wages and wealth creation. They have become the worst nightmare of the people, bent only toward risk in financial instruments, and against anything that might promote the general well-being. They have become the enemy of savers, anathema to the aging, and a net detraction from productive economies everywhere.
Perhaps it is all part of their plan, but, if it is, such a plan has been well-hidden because nobody with any amount of wealth or savings can see the wisdom of it. Unless stocks continue to rise in value forever - a distinct impossibility - humanity will be at the mercy of a small, useless band of monetarists who have not, as yet, propositioned any plan for the past seven years other than to cut interest rates and hope.
And we all know that hope is not a strategy.
S&P 500: 2,066.13, -6.65 (0.32%)
Dow: 17,737.00, -55.75 (0.31%)
NASDAQ: 4,891.80, -22.75 (0.46%)
Crude Oil 35.81 -2.66% Gold 1,216.90 -0.54% EUR/USD 1.1392 -0.02% 10-Yr Bond 1.78 -0.73% Corn 354.50 +0.14% Copper 2.14 -0.97% Silver 14.94 -0.74% Natural Gas 2.00 +2.45% Russell 2000 1,109.06 -0.77% VIX 14.17 +8.17% BATS 1000 20,682.61 0.00% GBP/USD 1.4264 +0.30% USD/JPY 111.3450 -0.28%
Thursday, March 31, 2016
Closer To The End
Crude Oil 38.24 -0.26% Gold 1,234.30 -0.11% EUR/USD 1.1382 0.00% 10-Yr Bond 1.79 -2.40% Corn 351.50 0.00% Copper 2.18 +0.05% Silver 15.45 -0.06% Natural Gas 1.97 +0.46% Russell 2000 1,114.03 +0.32% VIX 13.95 +2.88% BATS 1000 20,682.61 0.00% GBP/USD 1.4370 +0.02% USD/JPY 112.4150 -0.12%
Wednesday, March 30, 2016
Millenials May Be The Last Free Americans
On this day, a conversation was had with a couple of millennials, roughly in their mid-20s, working (or acting like they were working) in a smoke shop.
The conversation - following them chiding a senior citizen for talking about rolling your own and growing your own tobacco while he was buying rolling papers - was inferior, not even worth mentioning, which is why it is being mentioned.
At issue is the future, and the current youth... or, at least a sizable portion of them, want to vote for Bernie Sanders, who promises a $15/hour minimum wage, free college for everybody, and a host of other liberal-ideological non sequiturs that would essentially turn a once-prosperous free-market country (USA) into another stinking hell-hole like much of Europe, or the Middle East, or perhaps, Japan.
The problem lies not with the millennials. They don't know any better. Most of them haven't been around for more than 25 years, meaning that scads of them were in high school during 9-11, and those images are burnt into their psyches, as too the neo-liberal education they've been given, in which they know little about history, economics, language, culture or just about anything that would promote a thriving, free nation.
No, to blame are largely baby boomers, who foisted upon their youth such undistinguished values as participation trophies, non-judgemental attitudes, video games, addiction to cell phones, social media and other claptrap that promotes laziness, sloth, stupidity, class hatred, and decline.
Between the educational system run from afar in Washington, D.C., the Federal Reserve (also a D.C. inhabitant), and a mainstream media intent on propaganda du jour rather than objective journalism, the millennials may just be the last generation of Americans who can claim any level of freedom.
Americans are being taxed, silenced, tabooed, and numbed into a state of slavish devotion to media and government.
As a nation, America is pretty much doomed unless radical changes in the culture are made, and soon. Traditional values would be a welcome relief, but, whenever they are proposed, millennials scoff and pay, and continue down the path to self-destruction.
Thank you, Janet:
S&P 500: 2,068.46, +13.45 (0.65%)
Dow: 17,748.61, +115.50 (0.66%)
NASDAQ: 4,881.76, +35.14 (0.73%)
Crude Oil 38.38 +0.26% Gold 1,229.00 -0.69% EUR/USD 1.1335 +0.36% 10-Yr Bond 1.83 +0.88% Corn 369.25 -1.01% Copper 2.19 -1.02% Silver 15.25 +0.11% Natural Gas 1.99 +0.66% Russell 2000 1,113.52 +0.40% VIX 13.40 -3.04% BATS 1000 20,682.61 0.00% GBP/USD 1.4378 -0.06% USD/JPY 112.4500 -0.22%
The conversation - following them chiding a senior citizen for talking about rolling your own and growing your own tobacco while he was buying rolling papers - was inferior, not even worth mentioning, which is why it is being mentioned.
At issue is the future, and the current youth... or, at least a sizable portion of them, want to vote for Bernie Sanders, who promises a $15/hour minimum wage, free college for everybody, and a host of other liberal-ideological non sequiturs that would essentially turn a once-prosperous free-market country (USA) into another stinking hell-hole like much of Europe, or the Middle East, or perhaps, Japan.
The problem lies not with the millennials. They don't know any better. Most of them haven't been around for more than 25 years, meaning that scads of them were in high school during 9-11, and those images are burnt into their psyches, as too the neo-liberal education they've been given, in which they know little about history, economics, language, culture or just about anything that would promote a thriving, free nation.
No, to blame are largely baby boomers, who foisted upon their youth such undistinguished values as participation trophies, non-judgemental attitudes, video games, addiction to cell phones, social media and other claptrap that promotes laziness, sloth, stupidity, class hatred, and decline.
Between the educational system run from afar in Washington, D.C., the Federal Reserve (also a D.C. inhabitant), and a mainstream media intent on propaganda du jour rather than objective journalism, the millennials may just be the last generation of Americans who can claim any level of freedom.
Americans are being taxed, silenced, tabooed, and numbed into a state of slavish devotion to media and government.
As a nation, America is pretty much doomed unless radical changes in the culture are made, and soon. Traditional values would be a welcome relief, but, whenever they are proposed, millennials scoff and pay, and continue down the path to self-destruction.
Thank you, Janet:
S&P 500: 2,068.46, +13.45 (0.65%)
Dow: 17,748.61, +115.50 (0.66%)
NASDAQ: 4,881.76, +35.14 (0.73%)
Crude Oil 38.38 +0.26% Gold 1,229.00 -0.69% EUR/USD 1.1335 +0.36% 10-Yr Bond 1.83 +0.88% Corn 369.25 -1.01% Copper 2.19 -1.02% Silver 15.25 +0.11% Natural Gas 1.99 +0.66% Russell 2000 1,113.52 +0.40% VIX 13.40 -3.04% BATS 1000 20,682.61 0.00% GBP/USD 1.4378 -0.06% USD/JPY 112.4500 -0.22%
Tuesday, March 29, 2016
Yellen Spikes The Punch Bowl With Dovish Comments
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%
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%
Subscribe to:
Posts (Atom)
Posts
