Apparently, there was so much pent up demand for overpriced stocks that all the major averages posted nearly one percent gains.
Surely, this has something to do with the failed North Korean missile launch on Sunday, though there might be some Russian involvement in stocks going higher.
Then again, it just might be that speculators are taking one final dive into equities before this year's official federal income tax deadline (April 18), getting all they can out of super low interest rates.
Speaking of interest rates, the officials over at the Federal Reserve must be highly perplexed, with the 10-year note resting comfortably at around 2.20% yield. Somebody's happy, but surely not the millions of retirees who pine for the days when banks paid five percent interest on savings.
Those days are long gone, but the party continues. Hyperinflation for the win?
At The Close, Monday, April 17, 2017:
Dow: 20,636.92, +183.67 (0.90%)
NASDAQ: 5,856.79, +51.64 (0.89%)
S&P 500: 2,349.01, +20.06 (0.86%)
NYSE Composite: 11,427.08 +102.55 (0.91%)
Tuesday, April 18, 2017
Friday, April 14, 2017
If The Fed Is Upset On The CPI Drop And Stubbornly-Low Interest Rates, It Must Be A Good Friday
It's Good Friday and some of us have just finished doing our taxes (such as this writer), so, some of us are wondering what's so good about this particular Friday.
Aside from the generally-obvious religious conventions (Shouldn't it be called Bad Friday because it's the day Jesus Christ was crucified, and that doesn't seem so good?), there probably are some good things afoot.
First, the financial markets are closed, always a bonus. Second, the Labor Department announced today that the Consumer Price Index (CPI) dropped 0.3 percent, the first decline since February 2016. They said that lower cell phone service and gasoline costs outpaced higher rents and a slight increase in food costs (0.3%).
If those food costs are to be believed, since the amount of food most people eat (and buy) can be self-regulated, higher food costs aren't really an issue at all, especially since practically nobody in America is starving at the present time.
This CPI number brings up some interesting possibilities. If the United States is actually experiencing deflation (or, as the TV pundits like to call it, because deflation is bad, you know, "disinflation") then prices are going down, everything is going to cost less. That's the bane of a strong dollar. Imports are cheaper, and, in an economy that relies on lots of imports, that drives domestically-produced goods and services down as well.
It's a win-win-win for everybody, except, possibly, the Federal Reserve, banks and bond investors who are getting anxious and perhaps a bit desperate for higher interest rates.
Well, crocodile tears are the order of the day for them. Higher interest rates are not going to happen unless the economy is strong, meaning many excess jobs are being created, pushing wages higher, and producers are experiencing strong pricing power. Both of those items - jobs and pricing - seem to be going in reverse over the short term. Bond prices have been soaring because yields have been stubbornly opposed to any kind of rise, the now nearly constant urging and jawboning from the genii at the Federal Reserve, Janet Yellen, Stanley Fisher, et. al. notwithstanding.
The 10-year note is hovering around 2.25% yield. That doesn't bode well for inflation. No, not at all.
Stocks were lower for the week, but they're still within a few percentage points of all-time highs. Rich people and people with 401k or pension plans are probably not very concerned with their stock holdings.
In conclusion, this may actually be a pretty good Good Friday after all. Cheaper gas and phone service is a plus and eating a little less is probably not a bad idea in a nation of fatties. Plus, if the people over at the Fed are perplexed or constipated or otherwise annoyed or agitated, that's a huge bonus.
Happy Easter. Don't eat too much ham, lamb, or hard-boiled eggs.
At The Close, Thursday, April 13, 2017:
Dow: 20,453.25, -138.61 (-0.67%)
NASDAQ: 5,805.15, -31.01 (-0.53%)
S&P 500: 2,328.95, -15.98 (-0.68%)
NYSE Composite: 11,324.53, -98.64 (-0.86%)
For the Week:
Dow: -202.85 (-0.98%)
NASDAQ: -72.66 (-1.24%)
S&P 500: -26.59 (-1.13)
NYSE Composite: -121.05 (-1.06%)
Aside from the generally-obvious religious conventions (Shouldn't it be called Bad Friday because it's the day Jesus Christ was crucified, and that doesn't seem so good?), there probably are some good things afoot.
First, the financial markets are closed, always a bonus. Second, the Labor Department announced today that the Consumer Price Index (CPI) dropped 0.3 percent, the first decline since February 2016. They said that lower cell phone service and gasoline costs outpaced higher rents and a slight increase in food costs (0.3%).
If those food costs are to be believed, since the amount of food most people eat (and buy) can be self-regulated, higher food costs aren't really an issue at all, especially since practically nobody in America is starving at the present time.
This CPI number brings up some interesting possibilities. If the United States is actually experiencing deflation (or, as the TV pundits like to call it, because deflation is bad, you know, "disinflation") then prices are going down, everything is going to cost less. That's the bane of a strong dollar. Imports are cheaper, and, in an economy that relies on lots of imports, that drives domestically-produced goods and services down as well.
It's a win-win-win for everybody, except, possibly, the Federal Reserve, banks and bond investors who are getting anxious and perhaps a bit desperate for higher interest rates.
Well, crocodile tears are the order of the day for them. Higher interest rates are not going to happen unless the economy is strong, meaning many excess jobs are being created, pushing wages higher, and producers are experiencing strong pricing power. Both of those items - jobs and pricing - seem to be going in reverse over the short term. Bond prices have been soaring because yields have been stubbornly opposed to any kind of rise, the now nearly constant urging and jawboning from the genii at the Federal Reserve, Janet Yellen, Stanley Fisher, et. al. notwithstanding.
The 10-year note is hovering around 2.25% yield. That doesn't bode well for inflation. No, not at all.
Stocks were lower for the week, but they're still within a few percentage points of all-time highs. Rich people and people with 401k or pension plans are probably not very concerned with their stock holdings.
In conclusion, this may actually be a pretty good Good Friday after all. Cheaper gas and phone service is a plus and eating a little less is probably not a bad idea in a nation of fatties. Plus, if the people over at the Fed are perplexed or constipated or otherwise annoyed or agitated, that's a huge bonus.
Happy Easter. Don't eat too much ham, lamb, or hard-boiled eggs.
At The Close, Thursday, April 13, 2017:
Dow: 20,453.25, -138.61 (-0.67%)
NASDAQ: 5,805.15, -31.01 (-0.53%)
S&P 500: 2,328.95, -15.98 (-0.68%)
NYSE Composite: 11,324.53, -98.64 (-0.86%)
For the Week:
Dow: -202.85 (-0.98%)
NASDAQ: -72.66 (-1.24%)
S&P 500: -26.59 (-1.13)
NYSE Composite: -121.05 (-1.06%)
Wednesday, April 12, 2017
Stocks continue Doleful, Doubtful Dance On Unchanged
If anyone was thinking that Monday was a dull day for US markets, then Tuesday had to be considered a suitable capper, but only if one were to be looking only at the closing figures.
The Dow - and other major averages - took a deep dive after the opening bell, falling by as much as 145 points inside of the first two hours of trading.
A reversal took place right off the lows, regaining the green shortly after 1:00 pm ET. After that, stocks spent the rest of the session in a slow churn to close modestly in the red for the day, the only average to finish with gains was the NYSE Composite.
Naturally, this kind of two-day non-event gives even the most skeptical investor absolutely nothing upon which to base any trades, either of the buying or selling variety.
Since the markets have recently nodded off into a semi-somnabulatory state, one can only assume... well, nothing.
While the majority of awakened people in the world probably are hopeful for some kind of stimulation, perhaps it is reassuring that Wall Street finds nothing alarming about anything at this juncture.
On the other hand, it is just these kinds of days and weeks of churning about that usually precede gigantic moves, either to the up-or-downside. Anybody's directional guess is equally good right now.
At the close, Tuesday, April 11, 2017:
Dow: 20,651.30, -6.72 (-0.03%)
NASDAQ: 5,866.77, -14.15 (-0.24%)
S&P 500: 2,353.78, -3.38 (-0.14%)
NYSE Composite: 11,473.62, +9.28 (0.08%)
The Dow - and other major averages - took a deep dive after the opening bell, falling by as much as 145 points inside of the first two hours of trading.
A reversal took place right off the lows, regaining the green shortly after 1:00 pm ET. After that, stocks spent the rest of the session in a slow churn to close modestly in the red for the day, the only average to finish with gains was the NYSE Composite.
Naturally, this kind of two-day non-event gives even the most skeptical investor absolutely nothing upon which to base any trades, either of the buying or selling variety.
Since the markets have recently nodded off into a semi-somnabulatory state, one can only assume... well, nothing.
While the majority of awakened people in the world probably are hopeful for some kind of stimulation, perhaps it is reassuring that Wall Street finds nothing alarming about anything at this juncture.
On the other hand, it is just these kinds of days and weeks of churning about that usually precede gigantic moves, either to the up-or-downside. Anybody's directional guess is equally good right now.
At the close, Tuesday, April 11, 2017:
Dow: 20,651.30, -6.72 (-0.03%)
NASDAQ: 5,866.77, -14.15 (-0.24%)
S&P 500: 2,353.78, -3.38 (-0.14%)
NYSE Composite: 11,473.62, +9.28 (0.08%)
Tuesday, April 11, 2017
Stocks Flatten Out To Open Week On Dull Trading Day
Talk about a slow news day!
Stocks barely budged on Monday as investors apparently had more than enough on their collective minds to care about trading. The word for the day was "dull."
That's it.
At the close, Monday, April 10, 2017:
Dow: 20,658.02, +1.92 (0.01%)
NASDAQ: 5,880.93, +3.11 (0.05%)
S&P 500: 2,357.16, +1.62 (0.07%)
NYSE Composite, 11,464.34, +18.76 (0.16%)
Stocks barely budged on Monday as investors apparently had more than enough on their collective minds to care about trading. The word for the day was "dull."
That's it.
At the close, Monday, April 10, 2017:
Dow: 20,658.02, +1.92 (0.01%)
NASDAQ: 5,880.93, +3.11 (0.05%)
S&P 500: 2,357.16, +1.62 (0.07%)
NYSE Composite, 11,464.34, +18.76 (0.16%)
Sunday, April 9, 2017
Jobs Numbers Disappoint, Markets End Week Confused And Lower
After ADP reported blowout jobs numbers for the private sector on Wednesday (+263,000), the expectations from the BLS in Friday's March non-farm payroll report were for a solid figure.
It didn't happen, as the Labor Department reported a gain of just 98,000 jobs, the worst since President Trump was elected and a blow to his "America First" agenda.
Expectations for the BLS' NFP were 180,000, so this was a huge miss which left investors scratching their collective heads. Stocks ended the day slightly to the downside and all four major averages lower for the week.
At the Close, Friday, April 7, 2017:
Dow: 20,656.10, -6.85 (-0.03%)
NASDAQ: 5,877.81, -1.14 (-0.02%)
S&P 500: 2,355.54, -1.95 (-0.08%)
NYSE Composite: 11,445.58, -11.71 (-0.10%)
For the week:
Dow: -7.12 (-0.03%)
NASDAQ: -33.93 (-0.57%)
S&P 500: -7.18 (-0.30%)
NYSE Composite: -47.27 (-0.41%)
It didn't happen, as the Labor Department reported a gain of just 98,000 jobs, the worst since President Trump was elected and a blow to his "America First" agenda.
Expectations for the BLS' NFP were 180,000, so this was a huge miss which left investors scratching their collective heads. Stocks ended the day slightly to the downside and all four major averages lower for the week.
At the Close, Friday, April 7, 2017:
Dow: 20,656.10, -6.85 (-0.03%)
NASDAQ: 5,877.81, -1.14 (-0.02%)
S&P 500: 2,355.54, -1.95 (-0.08%)
NYSE Composite: 11,445.58, -11.71 (-0.10%)
For the week:
Dow: -7.12 (-0.03%)
NASDAQ: -33.93 (-0.57%)
S&P 500: -7.18 (-0.30%)
NYSE Composite: -47.27 (-0.41%)
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