Jobs Miss Mark: To Markets, OK, But FED COURTS DEPRESSION

Jobs. Who needs 'em?

Friday's epic non-farm payroll data turned out to be disappointing to the Fed cheerleaders and assorted brain-dead economists and analysts who are still touting the "recovery" mantra.

Instead of the predicted 205,000 net new jobs that were supposed to be created in April, the BLS reported a net gain of just 160,000, a 20% miss, but at least something to seize upon by those who believe in ultra-low interest rates (aka, free money).

Thus, in the world of bass-ackward economics, stocks actually gained on the final day of the week, thinking (probably correctly) that more evidence of a weak economy would cause the Fed to continue to pause on their relentless rate-hiking journey, which, to date, has been confined to one measly 0.25% hike in December of last year, which was a prima facia cause for a wicked stock market decline in January.

Since then, however, the Fed has talked down the rate hike theme with alarming accuracy as relates to paper assets (stocks), and the markets have responded in kind, reversing all of the losses from January and the first two weeks of February.

Odds of the Fed raising the federal funds rate in June are now approaching infinity, because the one thing the Fed wants to avoid is another market correction. They are, in the estimation of many leading private money managers, OUT OF THEIR MINDS.

A return to "normalized rates," - something on the order of 3-5% on the fed funds front - is still years out, and, since the only data the Fed is interested in happens to be the levels on the Dow, S&P and NASDAQ, the market is probably going to overrule the ivory tower charlatans at the Fed. Corporate profits are and have been heading south since the third quarter of 2015, and will likely continue to do so, as capital is being mis-allocated to an alarming degree.

The levels of absurdity between stock prices and profits also are approaching extreme levels. It's only a matter of time before investors (and the term is used loosely, because most of the market is algo-driven, speculative, and dominated by institutional buyers and sellers) give up on future gains, cash out and head to the safety of alternatives, those being cash, bonds, and precious metals to a small degree.

In other words, the Fed has not abolished the business cycle. They've managed only to delay the inevitable, and by delaying, in a perverse avoidance of any pain, will cause degrees more devastation to not just financial markets, but markets in everything.

The Fed is courting depression by denying the failure of their experiment in fiat money with no backing save faith, and that faith has been on the wane. Expect a cratering of the economy just in time for the November presidential election. Between now and then, plenty of market noise, but nothing any good at all.

For the Week:
Dow: -33.01 (-0.19%)
S&P 500: -8.16 (-0.40)
NASDAQ: -39.20 (-0.82)

On the day:
S&P 500: 2,057.14, +6.51 (0.32%)
Dow: 17,740.63, +79.92 (0.45%)
NASDAQ: 4,736.16, +19.06 (0.40%)

Crude Oil 44.56 +0.54% Gold 1,289.70 +1.37% EUR/USD 1.1405 -0.04% 10-Yr Bond 1.78 +1.83% Corn 377.25 +0.94% Copper 2.15 -0.09% Silver 17.50 +1.03% Natural Gas 2.09 +0.82% Russell 2000 1,114.72 +0.61% VIX 14.72 -7.48% BATS 1000 20,677.17 0.00% GBP/USD 1.4431 0.00% USD/JPY 107.1050 -0.02%

Stocks Pop, Drop, End Flat Before Jobs Friday

It is probably the dumbest thing going in the markets - besides, perhaps, waiting on FOMC decisions - but the monthly "Jobs Friday" fiasco is upon us once again, as breathless investors await one more dicey number form the government.

Prior to the market open on Friday, the Bureau of Labor Statistics (BLS) will release its April Non-Farm Payroll figure, and by that traders will have access to vital information needed to access the health of the economy and trade stocks.

except for the fact that the numbers are largely a joke, have been proven to be such, and are not of importance to anybody in particular. They offer a rather fuzzy view of the employment conditions in the United States, if one is even inclined to believe them.

So, stocks went up, came down and finished just about where they started the day, with the Dow up, the S&P and NASDAQ ever so slightly to the downside.

Idiots On Parade:
S&P 500: 2,050.63, -0.49 (0.02%)
Dow: 17,660.71, +9.45 (0.05%)
NASDAQ: 4,717.09, -8.55 (0.18%)

Crude Oil 44.51 +1.67% Gold 1,279.60 +0.41% EUR/USD 1.1403 0.00% 10-Yr Bond 1.75 -2.07% Corn 373.75 -0.80% Copper 2.14 -1.92% Silver 17.38 +0.43% Natural Gas 2.08 -2.80% Russell 2000 1,107.95 -0.47% VIX 15.91 -0.87% BATS 1000 20,677.17 0.00% GBP/USD 1.4485 +0.02% USD/JPY 107.2700 -0.01%

A note on the blatant unfairness within the judicial system:

The Arbitration Association of America, which handles the majority of arbitration cases, charges $200 for an initial filing fee, not counting fees incurred by consumers who hire attorneys. The CFPB argues that fees like this have a cooling effect on potential claimants. Over the two-year period between 2010 and 2011, the CFPB found only 25 cases were filed by consumers with claims for under $1,000. For every dollar claimed, consumers won an average of 12% of the original claim in relief. Only 9% of consumers who took on financial institutions received any relief at all. In contrast, 93% of claims filed against consumers by financial institutions came out in the institution’s favor.

ADP Jobs Miss; Stocks Lower; Markets Appear Exhausted

The best analyst assumptions on where markets might be heading are probably not going to impress anybody this year. As usual, the best and brightest of Wall Street had rosy calculations heading into the new year and so far none of them are anywhere close to the reality of 2015.

That reality has the Dow and S&P clinging to one to two percent gains for the year, with the NASDAQ roughly six percent underwater.

This morning's miss in the ADP privater jobs report for April set a sullen tone for equities, having already been battered on Tuesday. The middle of the week turned out to be no better, sending stocks further into the red.

ADP's report of 156,00 new jobs in April was well below the average estimate of 193,000, and was the lowest number since March of 2013. The ADP report sets the stage for the BLS April non-farm jobs report, due out Friday.

Stocks have run out of gas, this current bull market having become the second longest in history a few days back, but the central banks haven't run out of money to print out of thin air, a specialty that also is apparently running its course and running the global economy into the ground.

With summer heading its way and the outlook for a Fed tightening looking more and more dubious for June or even July, investors are beginning to take money off the table and head into cash or other, more stable assets, particularly bonds, art, gold, silver and oil.

For the most part, equities are overpriced and volumes have been thin. A serious correction could occur within days or weeks. With nothing but bad news and data hitting the street and foreign markets on a regular basis, the casino is quickly running out of chips as the players cash in and head out of town.

S&P 500: 2,051.12, -12.25 (0.59%)
Dow: 17,651.26, -99.65 (0.56%)
NASDAQ: 4,725.64, -37.58 (0.79%)

Crude Oil 44.05 +0.92% Gold 1,281.60 +0.56% EUR/USD 1.1487 +0.01% 10-Yr Bond 1.78 -0.89% Corn 377.75 -0.53% Copper 2.18 -0.14% Silver 17.42 +0.69% Natural Gas 2.14 +2.83% Russell 2000 1,113.13 -0.77% VIX 16.05 +2.88% BATS 1000 20,677.17 0.00% GBP/USD 1.4501 +0.02% USD/JPY 107.0170 +0.02%

Stocks, Oil Lower As Dollar Rebound Pushes Bond Price; Silver Suffers

The past few weeks haven't been very kind to the almighty greenback, but today was a respite from some concerted selling, sending stocks and oil lower.

While that scenario makes perfect sense for stocks and commodities in general, it sure doesn't help when the master manipulators manage to gang up on the one asset underpinning everything... not gold, silver.

Massive silver price suppression over the past 15 years has pushed the coin of common men to unheard of ratios in comparison to gold, and today was textbook slamming against the metal of the working man. While the absurdity of the 70:1 and higher silver to gold ratio has been discussed here in the past - and elsewhere, by more astute students of real money, it bears repeating, and repeating, until the price suppression stops completely.

That may be more of a pipe dream than winning the lottery, yet it is the one eventuality that must come to pass if the rule of central bankers and their idiotic QE and NIRP policies are ever to end and the financial universe is to regain some semblance of real markets and real prices, as opposed to the obviously fraudulent ones foisted upon the world by central bankers, especially those entertained by the US Federal Reserve.

With unlimited power to create money out of thin air, there is no market the master bankers cannot control, so it is easy to assume that they can absolutely pollute and disintegrate all price discovery mechanisms when it comes to silver, one of the smallest markets (in dollar terms, by their wicked design) of all.

But, to the guy or gal who is looking to keep wealth out of the corrupted central banking system and regain some sanity in his or her financial affairs, silver is a bottom holding, a base unit of measure, and insurance against what appears to be an advancing monetary apocalypse.

A one ounce bar of silver can still be had for under $20 US, and that little sliver of metallic hope may be all that's left between survival and tortuous, tyrannical totalitarianism.

As for stocks, they are but pieces of paper promises, and highly overrated as investment instruments. Compaies come and go, nations rise and fall, but silver will remain

S&P 500: 2,063.37, -18.06 (0.87%)
Dow: 17,750.91, -140.25 (0.78%)
NASDAQ: 4,763.22, -54.37 (1.13%)

Crude Oil 43.90 -1.97% Gold 1,288.20 -0.59% EUR/USD 1.1497 -0.26% 10-Yr Bond 1.80 -3.49% Corn 379.00 -3.25% Copper 2.22 -2.16% Silver 17.46 -1.26% Natural Gas 2.08 +2.01% Russell 2000 1,121.76 -1.68% VIX 15.60 +6.27% BATS 1000 20,677.17 0.00% GBP/USD 1.4536 -0.88% USD/JPY 107.1130 +0.61%

All-Time Highs Likely Not Attainable, Nor Sustainable

Let's take a stroll down memory lane.

It's a short stroll, to just over a year ago, when the Dow, S&P and NASDAQ each made all-time highs.

The dates, and the levels are shown below:

S&P 500: 2134.28 (intra-day); 2130.82 (close), May 21, 2015 (both)
Dow Jones Industrials: 18,351.36 (intra-day); 18,312.39 (close), May 19, 2015 (both)
NASDAQ: 5164.36 (intra-day, June 24, 2015); 5160.09 (close, June 23, 2015)

For the first trading day of May, the forward move was largely based on nothing other than bad economic data (manufacturing output is at its lowest level since 2009), other than the "good" news that Atlantic City avoided defaulting on a $1.8 million bond obligation and possible bankruptcy.

When the Jersey shore city announced they were making good on their scheduled payment to creditors - right around noon - that was enough for the markets to get off the proverbial flat-line and go diagonal the rest of the session.

Stocks ended the day with solid gains, erasing nearly half the losses from the prior week, putting some skepticism to the time-worn "sell in May and go away" adage.

Anyone believing that the US averages are going to meet or exceed the all-time highs from one year ago are betting against the odds simply because the May through October time frame historically offers the lowest returns of any six-month period, based on data from 1928 to the present. [See chart at right]

Not only that, but the continued creep of deteriorating business conditions presages a continuation of the slow growth that's been typical for the past seven-plus years at best or a slide into outright recession, at worst. Recall that the first estimate of first quarter GDP was a disappointing 0.5%, which is pretty darn close to going backwards.

Thus, with the numbers above as targets, it is clear that the indices would have to move more than two percent between May and October - and sustain those levels - in order to attain and hold new all-time highs, an unlikely event.

For hard-core stock investors, this is a cold truth, one which promises to inflict a high degree of pain and loss for those who play against the odds.

Monday's Millings:
S&P 500: 2,081.43, +16.13 (0.78%)
Dow: 17,891.16, +117.52 (0.66%)
NASDAQ: 4,817.59, +42.24 (0.88%)

Crude Oil 44.77 -2.50% Gold 1,293.00 +0.19% EUR/USD 1.1533 +0.62% 10-Yr Bond 1.8650 +2.53% Corn 390.00 -0.45% Copper 2.26 -0.90% Silver 17.57 -1.40% Natural Gas 2.04 -6.57% Russell 2000 1,140.92 +0.89% VIX 14.68 -6.50% BATS 1000 20,677.17 0.00% GBP/USD 1.4674 +0.56% USD/JPY 106.3950 +0.08%