Just in case you're keeping score at home, stocks remain in caution mode prior to the FOMC rate policy announcement due out tomorrow at 2:00 pm EDT.
Consensus sentiment is that the governors will do what they've done at every meeting except one since the end of 2008... nothing.
Federal funds rate will likely remain at 0.25-0.50, or effectively zero, and the financial world will once again be treated to the numb mumbling and vague interpretations of data by Chairwoman Janet Yellen at a press conference a half hour after the announcement.
This is all nonsense, all for show, and all for naught. Any attempt at "normalization" (as the Fed likes to put it) will send the interest on US debt to astronomical levels, upsetting the entire global financial universe.
It is precisely why the Fed and other central banks cannot raise rates, or, if they somehow choose to do so, it will be a gradual, drawn out process, because the unwinding of 5, 7, 10, and 30-year notes and bonds will take that many years. Unless the Fed intends to bankrupt all existing nation-states - always a possibility - interest rate increases will be gradual, if at all. The central banks have no way out of the mess they've created, except by creating another, even worse mess.
Tomorrow, like today and the day before, will be nothing but a dog-and-pony show, and a bad one at that.
Nothing even close to important will occur prior to the November elections. The Fed and their buddies are hoping that Hillary Clinton remains alive long enough to win and then, last until January 20, when she will supposedly assume the throne of president of the United States of America.
Those are two possibilities that fewer and fewer people are putting on hard money. There is one good future for the USA, and it does not include a Clinton presidency.
Tuesday's Close:
Dow 30
18,129.96, +9.79 (0.05%)
NASDAQ
5,241.35, +6.33 (0.12%)
S&P 500
2,139.76, +0.64 (0.03%)
^NYA
NYSE COMPOSITE (DJ)
10,573.98, +9.68 (0.09%)
Tuesday, September 20, 2016
Friday, September 16, 2016
Confusion Reigns In Advance Of FOMC Interest Rate Meeting
Depending upon your individual point of view, Friday's trading was either remarkable or expected.
Following Thursday's ramp-up on news that retail sales were still slumping - leading many to believe the Fed would not dare raise rates next week - stocks opened the day in the red and remained there.
This being a triple-or-quad witching options expiration day, the downdraft could signify many things, but mostly that traders had done their best to capitalize on Thursday, before the rush to close out positions.
That's the most reliable explanation for Friday's fumble, though hardly one adequate enough.
The week ending on a downbeat means little, except that there was some selling in the face of uncertainty over the weekend and leading up to the FOMC meeting Tuesday and Wednesday.
Despite the considerable volatility in play, Dow and S&P stocks ended the week roughly where they began, the NASDAQ was ahead by more than two percent, with the NYSE Composite three-quarters of a percent lower, leaving everyone equally confused.
Betting types will be putting their money on the Fed leaving rates unchanged at the upcoming meeting, not wanting to damage the chances for Hillary Clinton any further than the candidate has done so herself.
Friday's Close:
Dow Jones Industrial Average
18,123.80, -88.68 (-0.49%)
NASDAQ
5,244.57, -5.12 (-0.10%)
S&P 500
2,139.16, -8.10 (-0.38%)
NYSE Composite
10,529.83, -73.11 (-0.69%)
For the Week:
Dow: +38.35 (0.25%)
NASDAQ: +118.66 (2.31%)
S&P 500: +11.35 (0.53%)
NYSE Composite: -80.00 (-0.76%)
Following Thursday's ramp-up on news that retail sales were still slumping - leading many to believe the Fed would not dare raise rates next week - stocks opened the day in the red and remained there.
This being a triple-or-quad witching options expiration day, the downdraft could signify many things, but mostly that traders had done their best to capitalize on Thursday, before the rush to close out positions.
That's the most reliable explanation for Friday's fumble, though hardly one adequate enough.
The week ending on a downbeat means little, except that there was some selling in the face of uncertainty over the weekend and leading up to the FOMC meeting Tuesday and Wednesday.
Despite the considerable volatility in play, Dow and S&P stocks ended the week roughly where they began, the NASDAQ was ahead by more than two percent, with the NYSE Composite three-quarters of a percent lower, leaving everyone equally confused.
Betting types will be putting their money on the Fed leaving rates unchanged at the upcoming meeting, not wanting to damage the chances for Hillary Clinton any further than the candidate has done so herself.
Friday's Close:
Dow Jones Industrial Average
18,123.80, -88.68 (-0.49%)
NASDAQ
5,244.57, -5.12 (-0.10%)
S&P 500
2,139.16, -8.10 (-0.38%)
NYSE Composite
10,529.83, -73.11 (-0.69%)
For the Week:
Dow: +38.35 (0.25%)
NASDAQ: +118.66 (2.31%)
S&P 500: +11.35 (0.53%)
NYSE Composite: -80.00 (-0.76%)
Wednesday, September 14, 2016
Back To School Not For All; Trump Surges
Well, it's still summer for those of us who go by the calendar rather than a Labor Day or back-to-school regimen.
Actually, most of us hated school, didn't we? And work isn't much better, so... retirement?
Good luck with that.
In any case, stocks are confused, but oil dipped to its lowest level in weeks, which should set firre to the bears' feet. They'll be coming out of summer slumber soon enough to catch another downdraft is our guess, even though the Fed dare not raise the federal funds rate next week.
The likelihood of a Trump presidency grows larger with each passing day, which is enough to cause serious sickness across the investing spectrum, although his victory will prove a dynamic positive in the long run.
It's the short term that scares most people.
Wednesday's Woes:
Dow Jones Industrial Average
18,034.77, -31.98 (-0.18%)
NASDAQ
5,173.77, 18.52 (0.36%)
S&P 500
2,125.77, -1.25 (-0.06%)
NYSE Composite
10,511.54, -23.82 (-0.23%)
Actually, most of us hated school, didn't we? And work isn't much better, so... retirement?
Good luck with that.
In any case, stocks are confused, but oil dipped to its lowest level in weeks, which should set firre to the bears' feet. They'll be coming out of summer slumber soon enough to catch another downdraft is our guess, even though the Fed dare not raise the federal funds rate next week.
The likelihood of a Trump presidency grows larger with each passing day, which is enough to cause serious sickness across the investing spectrum, although his victory will prove a dynamic positive in the long run.
It's the short term that scares most people.
Wednesday's Woes:
Dow Jones Industrial Average
18,034.77, -31.98 (-0.18%)
NASDAQ
5,173.77, 18.52 (0.36%)
S&P 500
2,125.77, -1.25 (-0.06%)
NYSE Composite
10,511.54, -23.82 (-0.23%)
Tuesday, September 13, 2016
Volatility Returns As Stocks Retrace Friday's Losses
Writing just after noon on Tuesday, stocks seem to be in a certain funk over the future of not just corporate earnings, but the direction of the Federal Reserve and the outcome of the 2016 presidential race.
On the latter, Hillary Clinton's continued lying (even about her health, which is in terrible condition) may be costing her the election, to say nothing of the idea that many people who may have held their noses and voted for the Democrat status quo choice over the maverick Trump, may be changing their minds given that Hillary may not be able to effectively serve as president, yet alone make it to the finish line in the election process come November.
While Trump has held his tongue over Hillary's health issues, he continues to gain in the polls and in popularity with the American people. With the election less than two months away, any more gaffes by Clinton could prove fatal to her presidential aspirations, which, in the long run, would likely be a good thing for the American public.
Wall Street doesn't apparently appreciate the way things are going, though with Hillary losing ground, there's even less chance that the FOMC will announce a rate hike at their meeting next week. Trump's bashing of Janet Yellen earlier is also weighing on markets, and while the stock market may not like the way he's talking, as usual, he's speaking the unblemished truth: stocks are overpriced due to Fed meddling.
Is this how it all ends, with a Trump presidency and a wholesale cleansing of the sick economic policy apparatus?
We can only hope.
After Monday's dead-cat rally, stocks have given back all of those gains by midday, and then some. Get ready for a rocky ride this afternoon and more days of heightened volatility to come as the election takes precedence over all other economic and political events.
On the latter, Hillary Clinton's continued lying (even about her health, which is in terrible condition) may be costing her the election, to say nothing of the idea that many people who may have held their noses and voted for the Democrat status quo choice over the maverick Trump, may be changing their minds given that Hillary may not be able to effectively serve as president, yet alone make it to the finish line in the election process come November.
While Trump has held his tongue over Hillary's health issues, he continues to gain in the polls and in popularity with the American people. With the election less than two months away, any more gaffes by Clinton could prove fatal to her presidential aspirations, which, in the long run, would likely be a good thing for the American public.
Wall Street doesn't apparently appreciate the way things are going, though with Hillary losing ground, there's even less chance that the FOMC will announce a rate hike at their meeting next week. Trump's bashing of Janet Yellen earlier is also weighing on markets, and while the stock market may not like the way he's talking, as usual, he's speaking the unblemished truth: stocks are overpriced due to Fed meddling.
Is this how it all ends, with a Trump presidency and a wholesale cleansing of the sick economic policy apparatus?
We can only hope.
After Monday's dead-cat rally, stocks have given back all of those gains by midday, and then some. Get ready for a rocky ride this afternoon and more days of heightened volatility to come as the election takes precedence over all other economic and political events.
Saturday, September 10, 2016
Who Pulled The Plug? Friday's Freefall In Perspective
Everything was going along so swimmingly for the elitists of the world.
Interest rates were near or below zero in nearly every developed nation (Japan, the EU, Switzerland, the main components of such madness), but in the USA the Federal Reserve continued to hint that they would like to "normalize" rates, or, in a manner not-so-kind, raise the short term federal funds rate a little, tiny bit more, maybe soon, like at the September FOMC meeting.
Well, stock investors would have no part of that, so, when Fed Governor Rosengren said that the economy was strong enough to warrant a rate hike at the next FOMC meeting, September 20-21,, the market opened with a bang to the downside. Regardless of the other Fed governors - Tarullo and Kaplan - who would speak later on Friday and offer more dovish comments on raising rates, it was too late. Strong hands in the market had made their moves, and no reassurances would correct that.
As Friday wore on, the selling intensified, with the major indices finishing a week that had been eerily quiet and unassuming with the biggest sell-off since January.
Strangely enough, although Fed governors and other economists believe the economy is in pretty good shape, one would be advised to get some input from the man on the street (those 95 million unemployed Americans) who isn't buying it, or from presidential polls, which show Donald Trump about to overtake Hillary Clinton and the status quo in what should amount to a landslide victory and a mandate for major policy overhaul in many areas of governance.
All told, it was a very disturbing week for the powers that be.
Friday's Fallout:
Dow Jones Industrial Average
18,085.45, -394.46 (-2.13%)
S&P 500
2,127.81, -53.49 (-2.45%)
NASDAQ
5,125.91, -133.57 (-2.54%)
NYSE Composite
10,613.53, -268.80 (-2.47%)
The Week:
Dow: -406.51 (-2.20%)
S&P 500: -52.17 (-2.39%)
NASDAQ: -123.99 (-2.36%)
NYSE Composite: -243.39 (-2.24%)
Interest rates were near or below zero in nearly every developed nation (Japan, the EU, Switzerland, the main components of such madness), but in the USA the Federal Reserve continued to hint that they would like to "normalize" rates, or, in a manner not-so-kind, raise the short term federal funds rate a little, tiny bit more, maybe soon, like at the September FOMC meeting.
Well, stock investors would have no part of that, so, when Fed Governor Rosengren said that the economy was strong enough to warrant a rate hike at the next FOMC meeting, September 20-21,, the market opened with a bang to the downside. Regardless of the other Fed governors - Tarullo and Kaplan - who would speak later on Friday and offer more dovish comments on raising rates, it was too late. Strong hands in the market had made their moves, and no reassurances would correct that.
As Friday wore on, the selling intensified, with the major indices finishing a week that had been eerily quiet and unassuming with the biggest sell-off since January.
Strangely enough, although Fed governors and other economists believe the economy is in pretty good shape, one would be advised to get some input from the man on the street (those 95 million unemployed Americans) who isn't buying it, or from presidential polls, which show Donald Trump about to overtake Hillary Clinton and the status quo in what should amount to a landslide victory and a mandate for major policy overhaul in many areas of governance.
All told, it was a very disturbing week for the powers that be.
Friday's Fallout:
Dow Jones Industrial Average
18,085.45, -394.46 (-2.13%)
S&P 500
2,127.81, -53.49 (-2.45%)
NASDAQ
5,125.91, -133.57 (-2.54%)
NYSE Composite
10,613.53, -268.80 (-2.47%)
The Week:
Dow: -406.51 (-2.20%)
S&P 500: -52.17 (-2.39%)
NASDAQ: -123.99 (-2.36%)
NYSE Composite: -243.39 (-2.24%)
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