Just the facts, ma'am.
Well, maybe tomorrow.
Tuesday's Closing Quotes:
Dow: 19,974.62, +91.56 (0.46%)
MASDAQ: 5,483.94, +26.50 (0.49%)
S&P 500: 2,270.76, +8.23 (0.36%)
NYSE Composite: 11,172.20, +43.66 (0.39%)
Tuesday, December 20, 2016
As 2016 Winds Down With Stocks Up, What's In Store For 2017?
Recently, Americans and observes worldwide have been subjected to overreaction by lawmakers and media types over the "Russian hacking" of the recently-resolved US presidential elections and the possibility that certain electors in the electoral collage would bolt from the Trump camp in enough numbers to deny Donald Trump the needed 270 votes to certify him as America's 45th president.
As of 4:30 pm ET Monday, the electoral college did its job, giving Trump 306 votes, confirming his November victory and assuring the American public that all politics would proceed normally (we believe) for the foreseeable future.
Additionally, the over-hyped media and intelligence frenzy was revealed to have been yet another case of sour grapes and/or fake news fomented by the losers in the Democrat party and what appears to be rogue elements of the intelligence community. The good news is that Mr. Trump, once inaugurated on January 20, will be able to remove such rogue elements via his appointees to the CIA, FBI and other agencies. The bad news is that the sore loser Democrats and their media whores will remain, and they will likely continue to harass and object every effort Trump makes to "make America great again."
While almost nobody can reasonably oppose efforts to improve conditions for Americans, the Democrats will couch their objections in the most mealy-mouthed manners, with references to diversity, unfairness and vague commentaries on power and elitism.
Fortunately, the investor class has ignored most of the political squabbling and has moved on to increasing its wealth, with stocks up tremendously since election day. The bond markets have expressed acceptance of the Fed's minuscule rate hike of last week and have stabilized. Everything seems in place for a nice, year-end Santa Claus rally which will take the Dow Jones Industrial Average over the mythical 20,000 plateau.
The question to be asked at this juncture is, will the markets remain ebullient and bubbly into the New Year? With stocks hovering at or near all-time highs, and the bull run which began in 2009 extending into a ninth year, the answer should be obvious. Markets do not work one way (up) and corrections and bear markets often occur at what seems to be the most inopportune moments. With investor sentiment bullish to the extreme, the probability of a major correction in the first quarter of 2017 should be quite high, unless one adheres to the well-founded theory that the Fed has backstopped equity markets for years and will continue to do so. Doing otherwise, so the conventional wisdom tells, would be catastrophic, as though fair and open markets are inherently evil.
They are not, and it may be nigh on the eve of major changes in fiscal and monetary policy. On the fiscal side, Mr. Trump - a businessman with many years experience in all matters financial - the message is clear: he will do what it takes to get America on a path to prosperity for all levels of income, not just the crony capitalists and heavily financialized major corporations, but for individuals up and down the income ladder.
As for the Fed, one's guess is as good as another, but the genii inside the Fed seem intent on raising interest rates gradually in order to keep the US economy from overheating. As usual, they will be late to the party, but perhaps they can salve their damaged egos by reducing their bloated balance sheet in 2017 and leaving the number of interest rate hikes below three, ending the year around one percent, which, while traditionally absurdly low, would count as a major accomplishment since the Great Financial Crisis of the recent past.
Geopolitical events may overtake the Fed's view, however, as Japan and the Eurozone are well upon the road to financial ruin, and a crisis in either market (plus China) may cause extreme disruption to an orderly return to what is commonly referred to as "normalization."
A new administration hell-bent on returning America to greatness and leveling the playing field in international trade set against a backdrop of unelected financial and political operatives worldwide should make for an interesting, exciting, volatile year ahead.
As 2016 winds down, 2017 should present unique and various opportunities in all markets, requiring astute evaluation of not just balance sheets and P/E ratios, but insight into the political influence which has been and will continue to be exerted upon trade and commerce, globally.
At the Close: 12/19/2016
Dow: 19,883.06, +39.65 (0.20%)
NASDAQ: 5,457.44, +20.28 (0.37%)
S&P 500: 2,262.53, +4.46 (0.20%)
NYSE Composite: 11,128.54, +3.32 (0.03%)
As of 4:30 pm ET Monday, the electoral college did its job, giving Trump 306 votes, confirming his November victory and assuring the American public that all politics would proceed normally (we believe) for the foreseeable future.
Additionally, the over-hyped media and intelligence frenzy was revealed to have been yet another case of sour grapes and/or fake news fomented by the losers in the Democrat party and what appears to be rogue elements of the intelligence community. The good news is that Mr. Trump, once inaugurated on January 20, will be able to remove such rogue elements via his appointees to the CIA, FBI and other agencies. The bad news is that the sore loser Democrats and their media whores will remain, and they will likely continue to harass and object every effort Trump makes to "make America great again."
While almost nobody can reasonably oppose efforts to improve conditions for Americans, the Democrats will couch their objections in the most mealy-mouthed manners, with references to diversity, unfairness and vague commentaries on power and elitism.
Fortunately, the investor class has ignored most of the political squabbling and has moved on to increasing its wealth, with stocks up tremendously since election day. The bond markets have expressed acceptance of the Fed's minuscule rate hike of last week and have stabilized. Everything seems in place for a nice, year-end Santa Claus rally which will take the Dow Jones Industrial Average over the mythical 20,000 plateau.
The question to be asked at this juncture is, will the markets remain ebullient and bubbly into the New Year? With stocks hovering at or near all-time highs, and the bull run which began in 2009 extending into a ninth year, the answer should be obvious. Markets do not work one way (up) and corrections and bear markets often occur at what seems to be the most inopportune moments. With investor sentiment bullish to the extreme, the probability of a major correction in the first quarter of 2017 should be quite high, unless one adheres to the well-founded theory that the Fed has backstopped equity markets for years and will continue to do so. Doing otherwise, so the conventional wisdom tells, would be catastrophic, as though fair and open markets are inherently evil.
They are not, and it may be nigh on the eve of major changes in fiscal and monetary policy. On the fiscal side, Mr. Trump - a businessman with many years experience in all matters financial - the message is clear: he will do what it takes to get America on a path to prosperity for all levels of income, not just the crony capitalists and heavily financialized major corporations, but for individuals up and down the income ladder.
As for the Fed, one's guess is as good as another, but the genii inside the Fed seem intent on raising interest rates gradually in order to keep the US economy from overheating. As usual, they will be late to the party, but perhaps they can salve their damaged egos by reducing their bloated balance sheet in 2017 and leaving the number of interest rate hikes below three, ending the year around one percent, which, while traditionally absurdly low, would count as a major accomplishment since the Great Financial Crisis of the recent past.
Geopolitical events may overtake the Fed's view, however, as Japan and the Eurozone are well upon the road to financial ruin, and a crisis in either market (plus China) may cause extreme disruption to an orderly return to what is commonly referred to as "normalization."
A new administration hell-bent on returning America to greatness and leveling the playing field in international trade set against a backdrop of unelected financial and political operatives worldwide should make for an interesting, exciting, volatile year ahead.
As 2016 winds down, 2017 should present unique and various opportunities in all markets, requiring astute evaluation of not just balance sheets and P/E ratios, but insight into the political influence which has been and will continue to be exerted upon trade and commerce, globally.
At the Close: 12/19/2016
Dow: 19,883.06, +39.65 (0.20%)
NASDAQ: 5,457.44, +20.28 (0.37%)
S&P 500: 2,262.53, +4.46 (0.20%)
NYSE Composite: 11,128.54, +3.32 (0.03%)
Saturday, December 17, 2016
Market Week In Review: December 10-16, 2016; Stocks Moribund, Silver Slammed, Oil, Banks Up
Highlighted by Wednesday's (Dec. 14) FOMC rate policy announcement, the week as a whole saw its fair share of ups and downs, mostly confined to intra-day movement, but eventually ending mildly positive, at least for stocks.
The Dow recorded a pair of all-time closing highs on Monday and Tuesday, but failed to reach for the stars after the Fed announced a 0.25% hike in the federal funds rate, the first in exactly one year. The move from 0.25-0.50 to 0.50-0.75 triggered a sharp sell-off in Wednesday afternoon trading, though stocks recovered nicely on Thursday and ended flat on Friday.
If the week was uneventful for stocks, it was not the same for commodities, particularly silver and gold, or for the US dollar, which reached nearly-unprecedented highs over 102.20 on the Bloomberg dollar index. As the dollar gained, the precious metals were slammed, gold losing over $30 top to bottom, but eventually leveling off at $1134.60 at Friday's finish, a loss of just $26 from the rate announcement. Silver took a much harder hit, dropping in price on the COMEX from $17.10 an ounce on Wednesday to end the week about a buck lower, at $16.07, a six percent loss.
Following OPEC's announced production cuts for 2017, crude spiked over $55 per ounce, but retreated during the week, still ahead somewhat at 53.03 as the week's trading closed out. Despite the strong dollar - supposedly a brake on oil prices - oil managed to ramp up to the highest price in three years.
Financials and industrials led the way for US stocks, not surprisingly continuing the Dow rally spurred forward by notables Goldman Sachs, 3M, Boeing, and General Electric. The Dow Industrial Average being the only major index to finish in the green for the week, markets continue to show strength in only the largest of large caps while smaller stocks are only being nibbled upon and, in the main, sold. The fracturing of markets into large leaders and small losers cannot bode well for the continuation of any meaningful rally going forward.
Naturally, with the Fed hiking rates, if only modestly, Treasuries were sold, but mainly on the short-duration issues. The five-year note broke through the mythical 2.00% threshold this week (2.05%), while the 10-year popped briefly above 2.60%, clinging close to that level as markets went dark for the weekend (2.57%). A flattening yield curve was evident as the 30-year bond remained steady, at 3.16%, pushing down the spread between fives and thirties to a unitary 1.11%.
All of this came against a backdrop of national news media hyping futile and largely-baseless claims by the US intelligence community that Russia hacked the 2016 presidential election, somehow making Vladimir Putin responsible for the election of Donald J. Trump (who will be formally elected by the Electoral College on Monday) and the demise of Hillary Clinton, the choice of the much-discredited leftist status quo.
The folly of the intelligence claims was completely ignored by Wall Street, and rightly so. The last thing investors need is a fresh injection of political skullduggery, after slogging through nearly two years of endless campaign rhetoric from all sides.
With a week left before Christmas, retailers have yet to ring bells of any kind, neither of alarm or of joyous peals f profit. The Christmas shopping experience over the past decade has morphed from mad dashes on Black Friday to a controlled button-pushing event on computers nationwide, as the internet has revolutionized the retail buying experience and forever changed the shopping mall landscape and holiday experience.
With two weeks remaining in 2016, it's likely that markets will respond to calmer views going forward though a sharp Santa Claus rally, taking the Dow beyond 20,000, is a distinct possibility over the final ten trading days of the year.
At The Close: Friday, December 16
Dow: 19,848.60, -3.64 (-0.02%)
NASDAQ: 5,437.29, -19.56 (-0.36%)
S&P 500: 2,258.20, -3.83 (-0.17%)
NYSE Composite: 11,122.44, -9.46 (-0.08%)
For the Week:
Dow: +86.65 (0.44%)
NASDAQ: -7.34 (-0.13%)
S&P 500: -1.46 (-0.06%)
NYSE Composite: -66.57 (-0.59%)
The Dow recorded a pair of all-time closing highs on Monday and Tuesday, but failed to reach for the stars after the Fed announced a 0.25% hike in the federal funds rate, the first in exactly one year. The move from 0.25-0.50 to 0.50-0.75 triggered a sharp sell-off in Wednesday afternoon trading, though stocks recovered nicely on Thursday and ended flat on Friday.
If the week was uneventful for stocks, it was not the same for commodities, particularly silver and gold, or for the US dollar, which reached nearly-unprecedented highs over 102.20 on the Bloomberg dollar index. As the dollar gained, the precious metals were slammed, gold losing over $30 top to bottom, but eventually leveling off at $1134.60 at Friday's finish, a loss of just $26 from the rate announcement. Silver took a much harder hit, dropping in price on the COMEX from $17.10 an ounce on Wednesday to end the week about a buck lower, at $16.07, a six percent loss.
Following OPEC's announced production cuts for 2017, crude spiked over $55 per ounce, but retreated during the week, still ahead somewhat at 53.03 as the week's trading closed out. Despite the strong dollar - supposedly a brake on oil prices - oil managed to ramp up to the highest price in three years.
Financials and industrials led the way for US stocks, not surprisingly continuing the Dow rally spurred forward by notables Goldman Sachs, 3M, Boeing, and General Electric. The Dow Industrial Average being the only major index to finish in the green for the week, markets continue to show strength in only the largest of large caps while smaller stocks are only being nibbled upon and, in the main, sold. The fracturing of markets into large leaders and small losers cannot bode well for the continuation of any meaningful rally going forward.
Naturally, with the Fed hiking rates, if only modestly, Treasuries were sold, but mainly on the short-duration issues. The five-year note broke through the mythical 2.00% threshold this week (2.05%), while the 10-year popped briefly above 2.60%, clinging close to that level as markets went dark for the weekend (2.57%). A flattening yield curve was evident as the 30-year bond remained steady, at 3.16%, pushing down the spread between fives and thirties to a unitary 1.11%.
All of this came against a backdrop of national news media hyping futile and largely-baseless claims by the US intelligence community that Russia hacked the 2016 presidential election, somehow making Vladimir Putin responsible for the election of Donald J. Trump (who will be formally elected by the Electoral College on Monday) and the demise of Hillary Clinton, the choice of the much-discredited leftist status quo.
The folly of the intelligence claims was completely ignored by Wall Street, and rightly so. The last thing investors need is a fresh injection of political skullduggery, after slogging through nearly two years of endless campaign rhetoric from all sides.
With a week left before Christmas, retailers have yet to ring bells of any kind, neither of alarm or of joyous peals f profit. The Christmas shopping experience over the past decade has morphed from mad dashes on Black Friday to a controlled button-pushing event on computers nationwide, as the internet has revolutionized the retail buying experience and forever changed the shopping mall landscape and holiday experience.
With two weeks remaining in 2016, it's likely that markets will respond to calmer views going forward though a sharp Santa Claus rally, taking the Dow beyond 20,000, is a distinct possibility over the final ten trading days of the year.
At The Close: Friday, December 16
Dow: 19,848.60, -3.64 (-0.02%)
NASDAQ: 5,437.29, -19.56 (-0.36%)
S&P 500: 2,258.20, -3.83 (-0.17%)
NYSE Composite: 11,122.44, -9.46 (-0.08%)
For the Week:
Dow: +86.65 (0.44%)
NASDAQ: -7.34 (-0.13%)
S&P 500: -1.46 (-0.06%)
NYSE Composite: -66.57 (-0.59%)
Thursday, December 15, 2016
Fed Post-Mortem: Stocks Pop, Stop; China Bonds Crash; Silver Hits Target
After posting a duo of sentiments Wednesday, outlining the Money Daily "trade of the year," events escalated quickly following the Fed's federal funds interest rate hike of 0.25%.
Overnight, China treasury bonds crashed and trading in key futures were halted in an unprecedented move. Panicked investors sent yields soaring, the 10-year bond hitting a 16-month high of 3.4%. Elsewhere around the globe, the bond rout continued as yields spiked, reflecting the potential the Fed laid on the table for rising rates through 2020.
US stocks gained on the day, though the closing prices were less than half of what was achieved at midday.
As predicted, the silver price was clubbed like a baby seal, dropping to a high-15 handle early in the day and never recovering. Whether the move in silver (and gold) can be stemmed short term, it's likely that pricing will remain moribund unless further events occur to derail the massive spike in the US dollar.
The inverse relationship between the dollar and all commodities is especially pronounced in volatile silver. The Money Daily call to "buy at any price under $16/ounce has already been achieved, but indications are that it could continue as low as $14.75 the ounce.
Hang tight through tomorrow and the weekend, as Friday is a quad-witching day for options and futures expiry.
At the Close:
Dow: 19,852.24, +59.71 (0.30%)
NASDAQ: 5,456.85, +20.18 (0.37%)
S&P 500: 2,262.03, +8.75 (0.39%)
NYSE Composite: 11,131.85, +33.18 (0.30%)
Overnight, China treasury bonds crashed and trading in key futures were halted in an unprecedented move. Panicked investors sent yields soaring, the 10-year bond hitting a 16-month high of 3.4%. Elsewhere around the globe, the bond rout continued as yields spiked, reflecting the potential the Fed laid on the table for rising rates through 2020.
US stocks gained on the day, though the closing prices were less than half of what was achieved at midday.
As predicted, the silver price was clubbed like a baby seal, dropping to a high-15 handle early in the day and never recovering. Whether the move in silver (and gold) can be stemmed short term, it's likely that pricing will remain moribund unless further events occur to derail the massive spike in the US dollar.
The inverse relationship between the dollar and all commodities is especially pronounced in volatile silver. The Money Daily call to "buy at any price under $16/ounce has already been achieved, but indications are that it could continue as low as $14.75 the ounce.
Hang tight through tomorrow and the weekend, as Friday is a quad-witching day for options and futures expiry.
At the Close:
Dow: 19,852.24, +59.71 (0.30%)
NASDAQ: 5,456.85, +20.18 (0.37%)
S&P 500: 2,262.03, +8.75 (0.39%)
NYSE Composite: 11,131.85, +33.18 (0.30%)
Wednesday, December 14, 2016
Fed Hikes Fed Funds Rate 0.25%, Everything Gets Mashed In Panic Attack
You name it, stocks, bonds, oil, gold, silver, real estate, it all got smashed down pretty well after Janet Yellen and her central bank buddies decided to hike the federal funds rate by 1/4 point, from the unreasonably low figure of 0.25-0.50% to the nearly unreasonable low point of 0.50-0.75.
The only saving grace on the day was the dollar, which strengthened against almost every other currency, the dollar index quoting at 102.24 just after 4:00 pm ET.
While the FOMC move was well-telegraphed and supposedly baked into the markets, stocks still took a nosedive after the 2:00 pm announcement by the Fed. Though it's not much in terms of a rate hike and even less significant since he rate is still at historically low levels under one percent (absurd), perhaps driving the sell-off was the idea that the Fed predicted three rate hikes in 2017, which would ostensibly bring the federal funds rate to an area above one percent by this time next year. Three hikes would put the base rate at 1.25-1.50%. Optimistic, aren't they?
That's a doubtful prediction, however, as the Fed has continually over-promised and under-delivered when it comes to returning the US economy and interest rates to normalcy.
As pointed out in the previous post, the play of the day would have to be in silver and possibly gold, depending on how well-heeled and aristocratic one believes one to be. But not just yet. Wise traders will wait until the dust from this little market spasm settles and the new year selling begins on January 3rd (Yep, New Year's Day is on a Sunday, so Monday, January 2nd is a holiday. See, Trump's already making the country great again by giving everybody an extra day off).
Silver already dropped 30 cents per ounce since the FOMC announcement. Gold took a twenty dollar whacking, from $1160 to $1140. King Midas and the gold bugs are salivating! If there's one thing one can count on in this market is the pair trade on the downside. If stocks are going down, precious metals are going to get hammered, if for no good reason whatsoever. That's what happens when you trade as many contracts in a month as there is gold in the world. It's a fake, controlled, manipulated market, but, it has been steady if not profitable in recent years, once one learns the ins, outs, cheaters, liars and innuendos of playing with REAL MONEY.
Stay tuned to Money Daily as the trade of the year takes place. The few days or weeks wait will be well worth it.
Closing prices, Wednesday, December 14:
Dow: 19,792.53, -118.68 (-0.60%)
NASDAQ: 5,436.67, -27.16 (-0.50%)
S&P 500: 2,253.28, -18.44 (-0.81%)
NYSE Composite: 11,099.21, -137.96 (-1.23%)
The only saving grace on the day was the dollar, which strengthened against almost every other currency, the dollar index quoting at 102.24 just after 4:00 pm ET.
While the FOMC move was well-telegraphed and supposedly baked into the markets, stocks still took a nosedive after the 2:00 pm announcement by the Fed. Though it's not much in terms of a rate hike and even less significant since he rate is still at historically low levels under one percent (absurd), perhaps driving the sell-off was the idea that the Fed predicted three rate hikes in 2017, which would ostensibly bring the federal funds rate to an area above one percent by this time next year. Three hikes would put the base rate at 1.25-1.50%. Optimistic, aren't they?
That's a doubtful prediction, however, as the Fed has continually over-promised and under-delivered when it comes to returning the US economy and interest rates to normalcy.
As pointed out in the previous post, the play of the day would have to be in silver and possibly gold, depending on how well-heeled and aristocratic one believes one to be. But not just yet. Wise traders will wait until the dust from this little market spasm settles and the new year selling begins on January 3rd (Yep, New Year's Day is on a Sunday, so Monday, January 2nd is a holiday. See, Trump's already making the country great again by giving everybody an extra day off).
Silver already dropped 30 cents per ounce since the FOMC announcement. Gold took a twenty dollar whacking, from $1160 to $1140. King Midas and the gold bugs are salivating! If there's one thing one can count on in this market is the pair trade on the downside. If stocks are going down, precious metals are going to get hammered, if for no good reason whatsoever. That's what happens when you trade as many contracts in a month as there is gold in the world. It's a fake, controlled, manipulated market, but, it has been steady if not profitable in recent years, once one learns the ins, outs, cheaters, liars and innuendos of playing with REAL MONEY.
Stay tuned to Money Daily as the trade of the year takes place. The few days or weeks wait will be well worth it.
Closing prices, Wednesday, December 14:
Dow: 19,792.53, -118.68 (-0.60%)
NASDAQ: 5,436.67, -27.16 (-0.50%)
S&P 500: 2,253.28, -18.44 (-0.81%)
NYSE Composite: 11,099.21, -137.96 (-1.23%)
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