Stocks Down Third Straight Session As NFP Looms

One would assume that a good jobs number on Friday would be good for stocks, but, as the economy goes, the Fed goes against it, with tightening via a raise in the federal funds rate almost a surety if the NFP number for February comes in strong, as suggested by Wednesday's ADP figure of 298,000 new jobs added in the month.

That's the backwardness of the stock market, fueled almost entirely by cheap credit and share repurchases (buybacks) over the past eight years. In fact, today marks the 8th anniversary of the market bottom in 2009, and its been nothing but accommodation by the Fed and happy talk from the press ever since.

Thus, stocks fell for the third straight session and fourth in five days, with the exception of the NASDAQ, where speculators have still not succumbed to the axe of profit-taking.

In a sign that the narrative may be unraveling, WTI crude oil fell sharply on Wednesday, closing under $50 a barrel for the first time since December after another survey showed massive gluts in crude and distillates. This should transfer into good news for drivers as the spring and summer driving months come into focus with lower prices at the pump.

Oil has experienced a glut of magnificent proportions over the past two years with demand down and supply at or near record levels. The price of +$50 has been fueled largely by speculation, as is everything else in the financial sector. With interest rates set to increase, perhaps the malinvestments and speculative frenzy can abate and true price discovery ensue.

At The Close, 3.8.17:
Dow: 20,855.73, -69.03 (-0.33%)
NASDAQ: 5,837.55, +3.62 (0.06%)
S&P 500: 2,362.98, -5.41 (-0.23%)
NYSE Composite: 11,448.21, -58.11 (-0.51%)

Stocks Lower Again In Sluggish Trade

For the second straight session and the third in the past four, the major indices closed in the red as US equities seem to have reached the top of the proverbial "wall of worry."

More than any one thing, the investment community is concerned about the Fed raising rates next week, though the unusually highly charged political environment could be taking its toll on an overstretched market.

Stocks are not supposed to be prone to politics, but that is the unitary condition that is emerging, in which all aspects of economics, politics and religion become intertwined.

AT THE CLOSE, 3/7/17:
Dow: 20,924.76, -29.58 (-0.14%)
NASDAQ: 5,833.93, -15.25 (-0.26%)
S&P 500: 2,368.38, -6.93 (-0.29%)
NYSE Composite: 11,506.32, -41.47 (-0.36%)

Major Indices Lower To Start Week As FOMC Decision Looms

As investors weighed the risks of a March increase in the federal funds rate, all major averages slipped to open the week on Wall Street.

Members of the Federal Reserve's Open Market Committee (FOMC) have been widely suggestive that they would approve a 0.25% increase in the federal funds rate when they meet next Tuesday and Wednesday, March 14 and 15.

Thus, with money tightening, investors are squaring up positions or exiting the market in search of opportunity, primarily ending up in cash or bonds. Wall Street has rallied strongly since the election of Donald Trump as president back in November, but it appears the Fed is about to empty the punch bowl of nearly-free funding for speculators.

At The Close, 3.6.17:
Dow: 20,954.34, -51.37 (-0.24%)
NASDAQ: 5,849.18, -21.58 (-0.37%)
S&P 500: 2,375.31, -7.81 (-0.33%)
NYSE Composite: 11,547.79, -50.58 (-0.44%)

Weekend Recap: Wild Wall Street Ride Continues Push Higher

Amid the swirling winds of Washington's political circus, the nation's financial sector continued to take all the body blows, low blows, and talking head shots dished out by the deep state in perfect stride, carrying the averages to new highs on Wednesday following President Trump's speech before a joint assembly of congress.

With one eye on the political process and the other on the Federal Reserve, stocks continued to dance forward into March, with two key dates upcoming: Friday, March 10, when the February non-farm payroll report is released, and, Wednesday, March 15, the conclusion of a two-day FOMC meeting largely expected to result in an increase in the federal funds rate, from 0.50-0.75 to 0.75 to 1.00.

The jobs report will be crucial in terms of setting the agenda for the Fed governors. If expectations are met and job growth continues to be robust, the Fed will almost certainly announce a rate hike. Falling short of expectations could lead to another month of inaction on interest rates.

In any case, stocks were pumped after the presidential address in which Mr. Trump reiterated promises to build a wall on the border between Mexico and the United States, repeal and replace Obamacare, and set forth an overall economic agenda that will include budget cuts to various agencies, a trillion dollar infrastructure plan and a rejiggering of the tax code.

Should the President succeed even marginally on his lofty economic goals, stock pickers may well find themselves in a condition to ignore any moves by the Fed, freeing speculators from the tired monologue that has led the market for the past eight years running and continue the now third-longest expansion in stock market history.

Shrugging off such ancient notions as fundamental valuations and price-earnings ratios, investors have taken the stock markets literally to uncharted territories. The US dollar remains the currency of choice in most of the world and with that oil and most commodity prices have slumped and/or stabilized. Bonds continue to vacillate, though short term rates are beginning to show signs of stress, especially in consideration of upcoming budget and debt ceiling debates. Also on the minds of many in the investing community are elections in the Netherlands (in two weeks) and France (April 23) where populist candidates in the Donald Trump style are engaged in hotly contested races.

The populist surge sweeping the globe is unlikely to be quelled soon, either by technocrats in the European Union or entrenched politicians across a wide swath of nations, from Malaysia to Japan to Italy and Germany. The middle class in developed nations, having been squeezed financially by globalization, is in nearly full revolt. All the while, giant corporations appear confident that they will weather the ongoing stormy crises.

At the Close, 3.3.17:
Dow: 21,005.71, +2.74 (0.01%)
NASDAQ: 5,870.75, +9.53 (0.16%)
S&P 500: 2,383.12, +1.20 (0.05%)
NYSE Composite: 11,598.37, +22.46 (0.19%)

Since the election in early November, the NYSE Comp. and S&P 500 have closed higher 12 of 17 weeks, the Dow and NASDAQ, 13 of 17.

For the week ending 3.3.17:
Dow: +183.95 (0.88%)
NASDAQ: +25.45 (0.44%)
S&P 500: +15.78 (0.67%)
NYSE Composite: +57.08 (0.49%)

Stock Markets Backtrack In Advance of February NFP Jobs Report

Editor's Note: Sincere apologies to readers for the incorrect posting this morning. February Non-farm payroll data will not be released until March 10, instead of the usual first Friday of the month. Money Daily reported below that the NFP data would be out TODAY, March 3, but that is not the case. We seriously regret the error.

Following Wednesday's massive upturn in markets on the heels of President Trump's speech, Thursday was a bit of a reality check for gamblers in the Wall Street Casino.

Smart one - and there were plenty of them - took their quick profits and are likely sitting in cash ahead of Friday's non-farm payroll report from the tarnished Bureau of Labor Statistics (BLS).

Since February is a short month, expectations for another bump in payrolls may very well be disappointed, to a degree not previously factored.

ADP reported fewer jobs created in the private sector for February than expected. The 139,000 American workers hired to private-sector payrolls in February was below economists' consensus forecast of 155,000. Additionally, ADP revised their January figure to 127,000 from 175,000. That's a mighty big decline which was overshadowed by Wednesday's shock and awe euphoria.

While the NFP does not exactly mirror ADP, it usually tracks pretty well, though the BLS is notorious for using metrics such as the business birth/death model to goose numbers toward the desired result.

Non-farm payroll data will be released Friday morning at 8:30 am ET. There may well be fireworks if the number falls short of the lowered-bar expectations of 157,000 net new jobs.

At The Close, 3.2.17:
Dow: 21,002.97, -112.58 (-0.53%)
NASDAQ: 5,861.22, -42.81 (-0.73%)
S&P 500: 2,381.92, -14.04 (-0.59%)
NYSE Composite: 11,575.91, -85.31 (-0.73%)