Market conditions are becoming strained, as evidenced by the flatness of the past two sessions, each directly related to the two-day FOMC meeting concluded this afternoon.
As expected, the FOMC did nothing, save for bloviating on about macro economic conditions, hinting that they would be on track to raise interest rates to more "normal" levels at some point in the future, depending on the data they receive.
What the Fed, via their rate-setting governors at the FOMC is effectively saying is nothing, but if one watches markets closely enough and listens carefully, here's the real message:
The Fed is not going to raise interest rates to anything even approaching normal - that is, possibly a federal funds rate (overnight) of 2 1/2 to 3 percent, a prime rate of 6 percent and a deposit rate of savings accounts of 4 to 6 percent - at any time in the next four to seven years, unless things get really out of hand, like you worthless peasants and debt slaves rise up and actually elect that uncouth slob, Donald Trump, as president, continue to grow cryto markets like bitcoin and Steem, take your money out of banks and stat paying down debt, paying for things in cash, or, heaven forbid, barter amongst yourselves.
They get it at the Fed. All they're interested in is maintaining the status quo, meaning, you go to work for feeble wages, while they and their cronies sit on their fat rumps and collect huge checks for appearing to be in control of the economic situation.
They're not in control unless the people allow them to be. Once the people lose faith - confidence - in the fiat money system, they're toast.
Another few signs that the wheels have come off the global debt Ponzi scheme were the gains in gold and silver on the day, in two separate ramps, first, at the market open (9:30 am EDT) and at the rate policy announcement (2:00 pm EDT). Silver and gold reached levels last seen during the Brexit bounce, with Gold hitting $1340.00 the ounce and silver on fire to nearly $20.40, gaining more than 80 cents on the day.
The financial, political and social fabric are becoming increasingly intertwined and fraying at the same time. Along with grabbing up sole gold, silver, lead, brass, and bottled water, canned goods are also a cheap option for securing one's future, and also quite edible, something that can't be said of nearly any other asset class.
The Wednesday Effect:
Dow Jones Industrial Average
18,472.17, -1.58 (-0.01%)
NASDAQ
5,139.81, +29.76 (0.58%)
S&P 500
2,166.58, -2.60 (-0.12%)
NYSE Composite
10,739.58, -33.41 (-0.31%)
Wednesday, July 27, 2016
Tuesday, July 26, 2016
All Quiet On The FOMC Front; Meanwhile, Rancor At The DNC
With the chance of a rate hike hovering between absolutely not and no chance at the two-day July meeting (today and Wednesday) stocks took something of a breather, finishing in mixed fashion and anticipating no rate movement from the FOMC, which will release its policy decision at 2:00 pm EDT tomorrow.
There was a sudden drop in equities across the board early in the day on Tuesday, sending the major indices into negative territory, a place they spent most of the remainder of the session.
Oil continued its relentless decline off ridiculously high levels reached last month. While today's drop was less than one percent, the price of WTI crude for September 2016 delivery fell to a three-month low as gasoline demand in the US and most other developed nations remains stubbornly low. The last traded price was in the $42.82 per barrel range.
The global glut in crude oil will continue into the foreseeable future, as production from OPEC nations continues at near capacity and US rig counts continue to creep slowly upward.
Precious metals posted small gains, but remain off their recent highs. This appears to be a time of price consolidation prior to the next leg upward, the four-year bear market now clearly in the rear view mirror and fading from view.
Besides the FOMC meeting, focus is clearly on the political front, as the Democratic National Convention enters the second of its four-day schedule. Much of the rancor over the leaked emails has subsided, though delegates and supporters of Bernie Sanders - the runner-up to Hillary Clinton in the primaries - continue to protest and clamor for their candidate.
Tonight's main event is the delegate roll-call, sure to be accompanied by loud cheers, jeers, assorted sign-waving, and yelping from the disaffected Sanders delegations. It is expected that Hillary Clinton will be awarded the delegates she needs to secure the Democratic nomination, though many Sanders supporters have not given up hope for a last-minute change of heart by some super delegates.
It's a long shot for Sanders, but he will continue his fight for social justice as a serious sideshow in the run-up to November's elections.
Tuesday's Tremble:
Dow Jones Industrial Average
18,473.75, -19.31 (-0.10%)
NASDAQ
5,110.05, +12.42 (0.24%)
S&P 500
2,169.18, +0.70 (0.03%)
NYSE Composite
10,772.99, +20.56 (0.19%)
There was a sudden drop in equities across the board early in the day on Tuesday, sending the major indices into negative territory, a place they spent most of the remainder of the session.
Oil continued its relentless decline off ridiculously high levels reached last month. While today's drop was less than one percent, the price of WTI crude for September 2016 delivery fell to a three-month low as gasoline demand in the US and most other developed nations remains stubbornly low. The last traded price was in the $42.82 per barrel range.
The global glut in crude oil will continue into the foreseeable future, as production from OPEC nations continues at near capacity and US rig counts continue to creep slowly upward.
Precious metals posted small gains, but remain off their recent highs. This appears to be a time of price consolidation prior to the next leg upward, the four-year bear market now clearly in the rear view mirror and fading from view.
Besides the FOMC meeting, focus is clearly on the political front, as the Democratic National Convention enters the second of its four-day schedule. Much of the rancor over the leaked emails has subsided, though delegates and supporters of Bernie Sanders - the runner-up to Hillary Clinton in the primaries - continue to protest and clamor for their candidate.
Tonight's main event is the delegate roll-call, sure to be accompanied by loud cheers, jeers, assorted sign-waving, and yelping from the disaffected Sanders delegations. It is expected that Hillary Clinton will be awarded the delegates she needs to secure the Democratic nomination, though many Sanders supporters have not given up hope for a last-minute change of heart by some super delegates.
It's a long shot for Sanders, but he will continue his fight for social justice as a serious sideshow in the run-up to November's elections.
Tuesday's Tremble:
Dow Jones Industrial Average
18,473.75, -19.31 (-0.10%)
NASDAQ
5,110.05, +12.42 (0.24%)
S&P 500
2,169.18, +0.70 (0.03%)
NYSE Composite
10,772.99, +20.56 (0.19%)
Monday, July 25, 2016
Monday Blues: Stocks Fall; Is It The Trump, Clinton, Sanders or Putin Effect?
Over the weekend, the political climate became highly charged with the release of thousands of emails from the servers of the Democratic National Committee courtesy of Wikileaks and, as some presume, the assistance of Russian operatives. The propaganda nailing Russia as the bad guy was already underway as of the Sunday news shows. It's very likely to be completely spurious.
The leaked emails revealed a concerted effort to swing the primary vote toward the favored candidate, Hillary Clinton, and away from upstart radical, Bernie Sanders. To say the least, the emails were scandalous and disgusting, revealing just how deeply ingrained the status quo has become, and the lengths to which they will plumb in order to have public opinion bend to their will.
Suffering the most from the fallout was DNC chairwoman Debbie Wasserman Schultz, who was forced to announce her resignation as chair on Saturday. Ms. Schultz announced that she would gavel in the convention on Monday and gavel it out on Thursday.
Those plans fell completely apart on Monday as first, Ms. Schultz was shouted down as she attempted to address the Florida delegation, ironically, people from her own state. After being unceremoniously whisked from the stage, Ms. Schultz announced that she will not be associated with the convention in any way.
In two words: she's fired.
As has been mentioned on this blog in the past and as recently as the prior post which wrapped up last week, once the powers that be begin getting a whiff of a Donald Trump victory in November's presidential election, stocks will fall, leaving the Donald a mess not unlike what greeted Barack Obama in 2008.
So it is, when central banks and oligarchical politicians believe they can control not only markets, but the lives of the people investing in them.
The modern equivalent of torches and pitchforks are cellphone videos and anti-establishment signs.
Peace. It's a foreign concept in this period and the madness is swelling.
Monday's Politically-Charged Changes:
Dow Jones Industrial Average
18,493.06, -77.79 (-0.42%)
NASDAQ
5,097.63, -2.53 (-0.05%)
S&P 500
2,168.48, -6.55 (-0.30%)
NYSE Composite
10,752.43, -52.61 (-0.49%)
The leaked emails revealed a concerted effort to swing the primary vote toward the favored candidate, Hillary Clinton, and away from upstart radical, Bernie Sanders. To say the least, the emails were scandalous and disgusting, revealing just how deeply ingrained the status quo has become, and the lengths to which they will plumb in order to have public opinion bend to their will.
Suffering the most from the fallout was DNC chairwoman Debbie Wasserman Schultz, who was forced to announce her resignation as chair on Saturday. Ms. Schultz announced that she would gavel in the convention on Monday and gavel it out on Thursday.
Those plans fell completely apart on Monday as first, Ms. Schultz was shouted down as she attempted to address the Florida delegation, ironically, people from her own state. After being unceremoniously whisked from the stage, Ms. Schultz announced that she will not be associated with the convention in any way.
In two words: she's fired.
As has been mentioned on this blog in the past and as recently as the prior post which wrapped up last week, once the powers that be begin getting a whiff of a Donald Trump victory in November's presidential election, stocks will fall, leaving the Donald a mess not unlike what greeted Barack Obama in 2008.
So it is, when central banks and oligarchical politicians believe they can control not only markets, but the lives of the people investing in them.
The modern equivalent of torches and pitchforks are cellphone videos and anti-establishment signs.
Peace. It's a foreign concept in this period and the madness is swelling.
Monday's Politically-Charged Changes:
Dow Jones Industrial Average
18,493.06, -77.79 (-0.42%)
NASDAQ
5,097.63, -2.53 (-0.05%)
S&P 500
2,168.48, -6.55 (-0.30%)
NYSE Composite
10,752.43, -52.61 (-0.49%)
July 18-22: Stocks Level Out After Massive Gains
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%)
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%)
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%)
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