The huge run-up in stock prices appears to be running out of steam, or buyers, or both.
Since bottoming out post-Brexit, major US indices have ramped higher by nearly ten percent over just the past four weeks. The Dow, for instance, has gained over 1500 points while powering to new high after new high.
The most recent week, however, was the weakest in the last four, with the possible exception of the NASDAQ, which was up more than double its rivals in percentage terms.
This is not to say that the recent rally is over. Far from it, there is no sign of exhaustion in the ranks of central banks, especially the Fed, which will be pulling out all the stops to keep the narrative of an "improving economy" rolling through the week, highlighted by the Democratic National Convention in Philadelphia.
Following the Philly love-fest for Hillary Clinton (never mind the various email and other scandals surrounding the candidate and the rest of the Dems... they will be swept under the rug), the Fed will continue to pour money into stocks through their appointed agents right up until the election.
Setting up what could be one of the easiest buying opportunities in recent memory (though as memory serves, the past eight years haven't been too difficult for stock traders), stocks or index funds could be a very safe place over the coming three months.
A Trump victory in November would probably derail both the giddy narrative and the actual stock market rally, as the status quo would then find themselves on the defensive, with the White House in the hands of a non-politician, non-elitist, populist campaigner. Should Clinton capture the presidency, a slow decline might be the more likely scenario, as the wheels of industry continue their slow grind into mediocrity.
With so much uncertainty, investors have been seen hoarding hard assets. Paid-up real estate, precious metals, machinery and tools of trades can still be had at reasonable levels, and they should not lose much value over the longer term. In fact, they should appreciate quite nicely no matter what happens after November.
For The Week:
Dow: +54.30 (+0.2(%)
S&P 500: +13.29 (+0.61)
NASDAQ: +70.57 (+1.40)
Friday:
NASDAQ Composite
5,100.16, +26.26 (0.52%)
Dow Jones Industrial Average
18,570.85, +53.62 (0.29%)
S&P 500
2,175.03, +9.86 (0.46%)
Monday, July 25, 2016
Thursday, July 21, 2016
Stocks Pause; Good Entry Point?
After setting new all-time highs for what seems to be the better part of the past two weeks, stocks finally cooled off on Thursday as somebody, ostensibly, took profits.
But, was that a wise move, or with the Republican National Convention winding down, might this not be a wise time to double down, knowing that the status quo will want to put the best lipstick on its little piggies, making every effort to make Hillary Rodham Clinton the 45th president of the United States of America.
Hillary is obviously the choice of rich bankers and well-oiled politicians who wish for nothing more than another four years of free money from the Fed, insane public policy from the politicians, and more fleecing of the soon-to-be-defunct middle class.
It would appear that with the presidency in her sights, Mrs. Clinton, for all her obvious faults, may be the best thing for equity investors since the FASB eliminated mark-to-market accounting back in 2009.
At least until late October or whenever it appears that nothing can or will stop Mr. Trump from elevating his posture into the White House, the Fed and its many backers will want to keep stocks flying high in hopes that Mrs. Clinton can lay claim to a vigorous economy (which, of course, is pure fiction, and which she had absolutely nothing to do with making it so).
Back up the truck and buy this dip. We could be looking at Dow 20,000 before long.
Dow Jones Industrial Average
18,517.23, -77.80 (-0.42%)
NASDAQ
5,073.90, -16.03 (-0.31%)
S&P 500
2,165.17, -7.85 (-0.36%)
NYSE Composite
10,758.62, -34.48 (-0.32%)
But, was that a wise move, or with the Republican National Convention winding down, might this not be a wise time to double down, knowing that the status quo will want to put the best lipstick on its little piggies, making every effort to make Hillary Rodham Clinton the 45th president of the United States of America.
Hillary is obviously the choice of rich bankers and well-oiled politicians who wish for nothing more than another four years of free money from the Fed, insane public policy from the politicians, and more fleecing of the soon-to-be-defunct middle class.
It would appear that with the presidency in her sights, Mrs. Clinton, for all her obvious faults, may be the best thing for equity investors since the FASB eliminated mark-to-market accounting back in 2009.
At least until late October or whenever it appears that nothing can or will stop Mr. Trump from elevating his posture into the White House, the Fed and its many backers will want to keep stocks flying high in hopes that Mrs. Clinton can lay claim to a vigorous economy (which, of course, is pure fiction, and which she had absolutely nothing to do with making it so).
Back up the truck and buy this dip. We could be looking at Dow 20,000 before long.
Dow Jones Industrial Average
18,517.23, -77.80 (-0.42%)
NASDAQ
5,073.90, -16.03 (-0.31%)
S&P 500
2,165.17, -7.85 (-0.36%)
NYSE Composite
10,758.62, -34.48 (-0.32%)
Tuesday, July 19, 2016
Monday, Tuesday... Minor Gains
Not much happening the first two days of the week...
Dow Jones Industrial Average
18,559.01, 25.96 (0.14%)
NASDAQ
5,036.37, -19.41 (-0.38%)
S&P 500
2,163.78, -3.11 (-0.14%)
NYSE Composite
10,751.91, -41.26 (-0.38%)
Dow Jones Industrial Average
18,559.01, 25.96 (0.14%)
NASDAQ
5,036.37, -19.41 (-0.38%)
S&P 500
2,163.78, -3.11 (-0.14%)
NYSE Composite
10,751.91, -41.26 (-0.38%)
Sunday, July 17, 2016
Weekend Edition: Historic Rally Stalls At End Of Week
Anticlimactic was Friday's market action after a sustained two-week, post-Brexit collapse rally sent the Dow and S&P 500 to new all-time highs.
Stocks finished with one of their their weakest performances of the month, though it may just be a pause in an otherwise relentless advance led by central bank buying.
Yes, you're reading that correctly; central banks were the leading participants in the post-Brexit rally, preventing what may have turned into a widespread financial panic had the BOJ and ECB not intervened with either direct purchases of stocks or the same via proxies.
This leads to a time-worn dilemma in market confidence otherwise bandied about as moral hazard.
It's the same as fixing horse races or weighting the balls on a roulette wheel. Rigged financial markets will sooner or later be found to be lacking in both stability and longevity, which, when dealing with life-spanning investments touted by the major brokerages, are - or should be - two major pillars of strength.
If central banks continue to play fast and loose with not only monetary policy and begin to dabble in fiscal policy (well underway) and overtly entering trading markets (also pretty obvious), it may be only a matter of time before the curtain is rolled back and the man in the booth behind the controls is revealed as a faker, a fraud, a charlatan, and the foolishly following investors taken in by the scheme.
In simple terms, caution continues to be the best friend of anyone with reasonable means. Hard assets appear once again to be not only safe, but sure.
Many in the financial arena thought that the world was ending in 2008, though afterthought now is clear that an era of unbridled intervention by central banks was only just beginning.
How and when it ends are open questions, but certainly, valuations are stretched to extremes, data - along with stock prices - is being manipulated, and individuals investors have long ago headed for safer havens.
The game may go on for years more, which is likely the path of least resistance since there's so much riding on a continuation of current politics and economics. The thought that the larger the debt and fraud (and both are enormous), the greater the fall may or may not be a truism.
What's working now may be reversed in the near future. One glance at YTD charts of either gold or silver tells you that a paradigm shift may be already underway.
Friday's Closing Numbers:
Dow Jones Industrial Average
18,516.55, +10.14 (0.05%)
NASDAQ
5,029.59, -4.47 (-0.09%)
S&P 500
2,161.74, -2.01 (-0.09%)
NYSE Composite
10,773.12, -13.51 (-0.13%)
For the Week:
Dow: +369.81 (+2.04%)
S&P 500: +31.84 (+1.49%)
NASDAQ: +72.83 (+1.47%)
Stocks finished with one of their their weakest performances of the month, though it may just be a pause in an otherwise relentless advance led by central bank buying.
Yes, you're reading that correctly; central banks were the leading participants in the post-Brexit rally, preventing what may have turned into a widespread financial panic had the BOJ and ECB not intervened with either direct purchases of stocks or the same via proxies.
This leads to a time-worn dilemma in market confidence otherwise bandied about as moral hazard.
It's the same as fixing horse races or weighting the balls on a roulette wheel. Rigged financial markets will sooner or later be found to be lacking in both stability and longevity, which, when dealing with life-spanning investments touted by the major brokerages, are - or should be - two major pillars of strength.
If central banks continue to play fast and loose with not only monetary policy and begin to dabble in fiscal policy (well underway) and overtly entering trading markets (also pretty obvious), it may be only a matter of time before the curtain is rolled back and the man in the booth behind the controls is revealed as a faker, a fraud, a charlatan, and the foolishly following investors taken in by the scheme.
In simple terms, caution continues to be the best friend of anyone with reasonable means. Hard assets appear once again to be not only safe, but sure.
Many in the financial arena thought that the world was ending in 2008, though afterthought now is clear that an era of unbridled intervention by central banks was only just beginning.
How and when it ends are open questions, but certainly, valuations are stretched to extremes, data - along with stock prices - is being manipulated, and individuals investors have long ago headed for safer havens.
The game may go on for years more, which is likely the path of least resistance since there's so much riding on a continuation of current politics and economics. The thought that the larger the debt and fraud (and both are enormous), the greater the fall may or may not be a truism.
What's working now may be reversed in the near future. One glance at YTD charts of either gold or silver tells you that a paradigm shift may be already underway.
Friday's Closing Numbers:
Dow Jones Industrial Average
18,516.55, +10.14 (0.05%)
NASDAQ
5,029.59, -4.47 (-0.09%)
S&P 500
2,161.74, -2.01 (-0.09%)
NYSE Composite
10,773.12, -13.51 (-0.13%)
For the Week:
Dow: +369.81 (+2.04%)
S&P 500: +31.84 (+1.49%)
NASDAQ: +72.83 (+1.47%)
Thursday, July 14, 2016
Dow, S&P Post New Highs Again, But, Who's Doing The Buying?
In a market that more often resembles a three-ring circus than an amalgamation of the best corporate entities vying for favoritism among investors via increased earnings, revenue and expectations, the recent melt-up in US equities has more than just a few analysts scratching their quickly-balding heads.
It's widely known that equity mutual fund outflows have been more or less continuous for the better part of the past four months, a trend that doesn't seem to be abating, despite the recent runaway rally.
So, with mutuals (institutional investors) out of the picture - and they're a huge part of the landscape - and individuals mostly too scared to tread too deeply into the Wall Street morass since the devastation of the 2008 washout, there aren't many places from which the money to buy up all these loose assets can come, except, of course, if you're the operator of a central bank, such as the Bank of Japan, the ECB or the almighty Fed.
For verification of the central bank buying conspiracy theory (now fact), we turn to the erudite and educated Zero Hedge, which puts the matter to rest in no uncertain terms in his recent post, "Mystery Of Surging Stocks Solved—-It’s The Central Banks, Stupid!"
The Hedge cites Citi's Matt King, who publishes a must-see chart of rolling central bank asset purchases, and there for all the world to see are egregiously large buys by Japan and the ECB.
Yep! Those shifty Asians and super-smart Europeans are buying up US equities at valuations measured at a median rate of 24X. Good for them! When they awaken from their Keynesian stupor somebody must announce to them - they being economists, not investors - that the goal is to buy low and sell high, not the other way around.
Their rude awakening will coincide with the complete financial and societal implosion of their economies and their sovereignty, which, in the case of Europe, has been questionable for at least a couple of decades, and, for Japan, is only a matter of time before demographics and deflation tear the country to shreds.
What the world is witnessing (or not, depending upon how many people are playing Pokemon Go at present) is the beginning of the final phase of complete totalitarian financialization by central banks and their appointed henchmen, which will result in hemorrhaged debt defaults by individuals, corporations, and eventually (but maybe initially) governments.
Unlike people and companies, governments have a unique advantage in that they can run deficits and debt in piles as high as the moon without recourse for the most part, until, that is, the general public and business people have enough of higher taxes, worsening living conditions and runaway inflation.
Central banks are even better off, being the enabler of all debt and fiat folly via their ability to print endless scads of fiat money literally out of thin air.
Both groups, the money-makers and the politicians, are parasites, and they are killing the host, that being the good-will and capital of citizens and businesses, burying them in debt that will never be repaid.
Hope for a debt jubilee has reached new heights with the latest round of stupidity, but it is far from over.
The shackles which bind the citizenry and businesses to debt and drudgery, taxes and regulations, will tighten before they are broken.
New all-time highs are great when people and funds are doing the buying. That's a sign of a growing, robust economy. When it's central banks doing the heavy lifting, it reeks of desperation and failure.
Enjoy it while it lasts.
-- Fearless Rick
New Highs! Get 'em while you can!
Dow Jones Industrial Average
18,506.41, +134.29 (0.73%)
NASDAQ
5,034.06, +28.33 (0.57%)
S&P 500
2,163.75, +11.32 (0.53%)
NYSE Composite
10,786.63, +52.43 (0.49%)
It's widely known that equity mutual fund outflows have been more or less continuous for the better part of the past four months, a trend that doesn't seem to be abating, despite the recent runaway rally.
So, with mutuals (institutional investors) out of the picture - and they're a huge part of the landscape - and individuals mostly too scared to tread too deeply into the Wall Street morass since the devastation of the 2008 washout, there aren't many places from which the money to buy up all these loose assets can come, except, of course, if you're the operator of a central bank, such as the Bank of Japan, the ECB or the almighty Fed.
For verification of the central bank buying conspiracy theory (now fact), we turn to the erudite and educated Zero Hedge, which puts the matter to rest in no uncertain terms in his recent post, "Mystery Of Surging Stocks Solved—-It’s The Central Banks, Stupid!"
The Hedge cites Citi's Matt King, who publishes a must-see chart of rolling central bank asset purchases, and there for all the world to see are egregiously large buys by Japan and the ECB.
Yep! Those shifty Asians and super-smart Europeans are buying up US equities at valuations measured at a median rate of 24X. Good for them! When they awaken from their Keynesian stupor somebody must announce to them - they being economists, not investors - that the goal is to buy low and sell high, not the other way around.
Their rude awakening will coincide with the complete financial and societal implosion of their economies and their sovereignty, which, in the case of Europe, has been questionable for at least a couple of decades, and, for Japan, is only a matter of time before demographics and deflation tear the country to shreds.
What the world is witnessing (or not, depending upon how many people are playing Pokemon Go at present) is the beginning of the final phase of complete totalitarian financialization by central banks and their appointed henchmen, which will result in hemorrhaged debt defaults by individuals, corporations, and eventually (but maybe initially) governments.
Unlike people and companies, governments have a unique advantage in that they can run deficits and debt in piles as high as the moon without recourse for the most part, until, that is, the general public and business people have enough of higher taxes, worsening living conditions and runaway inflation.
Central banks are even better off, being the enabler of all debt and fiat folly via their ability to print endless scads of fiat money literally out of thin air.
Both groups, the money-makers and the politicians, are parasites, and they are killing the host, that being the good-will and capital of citizens and businesses, burying them in debt that will never be repaid.
Hope for a debt jubilee has reached new heights with the latest round of stupidity, but it is far from over.
The shackles which bind the citizenry and businesses to debt and drudgery, taxes and regulations, will tighten before they are broken.
New all-time highs are great when people and funds are doing the buying. That's a sign of a growing, robust economy. When it's central banks doing the heavy lifting, it reeks of desperation and failure.
Enjoy it while it lasts.
-- Fearless Rick
New Highs! Get 'em while you can!
Dow Jones Industrial Average
18,506.41, +134.29 (0.73%)
NASDAQ
5,034.06, +28.33 (0.57%)
S&P 500
2,163.75, +11.32 (0.53%)
NYSE Composite
10,786.63, +52.43 (0.49%)
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