The reaction wasn't immediate, but Wall Street eventually responded to the April non-farm payroll result, registering solid gains into the close of trading Friday.
The BLS reported a gain of 211,000 jobs for the prior month, well above estimates which called for a figure of 180,000. Coupled with the Fed keeping interest rates on hold for the time being, stocks finished the week with solid gains, marking the third straight week that stocks finished positively.
Some skepticism remained as the March payroll numbers were downgraded further, from 98,000 to a disappointing 79,000.
Still, the solid showing on Friday put all the major indices into positive territory for the week, all closing near all-time highs.
How long the love-fest with stocks can continue is anybody's guess, but it appears nobody is giving up gains at this juncture.
At The Close, 5/5/17:
Dow: 21,006.94, +55.47 (0.26%)
NASDAQ: 6,100.76, +25.42 (0.42%)
S&P 500: 2,399.29, +9.77 (0.41%)
NYSE Composite: 11,615.61, +80.90 (0.70%)
For the Week:
Dow: +66.43 (0.32%)
NASDAQ: +53.15 (0.88%)
S&P 500: +15.09 (0.63%)
NYSE Composite: +79.51 (0.69%)
Saturday, May 6, 2017
Thursday, May 4, 2017
FOMC Keeps Fed Funds Rate Unchanged; Stocks Look Elsewhere
As expected the FOMC of the Federal Reserve took no action on interest rates Wednesday, concluding their two-day May meeting.
The federal funds rate remained at 0.75-1.00% for now, though analysts expect the Fed to raise rates twice more this year, most likely at the June and September or December meetings.
While the Fed wants to raise rates in order to have some ammunition to stave off any chance of a recession, the thinking is somewhat backwards. One would normally raise rates in good times, to keep the economy from overheating. Increasing the cost of borrowing in a stable environment might produce exactly what the Fed is fighting - an economic downturn.
Skepticism is high over the Federal Reserve's actual control of the economy beyond their massive "investments" and liquidity injections over the past eight years since the GFC. Now that the Fed has done its job, the ECB and Bank of Japan have picked up the slack with hefty asset purchases. How these central bankers intend to wind down their bloated balance sheets without causing severe oversupply is a question that remains unanswered, thus the nervousness within what is, after all, the second-longest bull market in history.
At the end of the day, only the Dow finished positive. The other major markets were marginally on the downside.
At the close, 5/3/17:
Dow: 20,957.90, +8.01 (0.04%)
NASDAQ: 6,072.55, -22.82 (-0.37%)
S&P 500: 2,388.13, -3.04 (-0.13%)
NYSE Composite: 11,529.66, -21.64 (-0.19%)
The federal funds rate remained at 0.75-1.00% for now, though analysts expect the Fed to raise rates twice more this year, most likely at the June and September or December meetings.
While the Fed wants to raise rates in order to have some ammunition to stave off any chance of a recession, the thinking is somewhat backwards. One would normally raise rates in good times, to keep the economy from overheating. Increasing the cost of borrowing in a stable environment might produce exactly what the Fed is fighting - an economic downturn.
Skepticism is high over the Federal Reserve's actual control of the economy beyond their massive "investments" and liquidity injections over the past eight years since the GFC. Now that the Fed has done its job, the ECB and Bank of Japan have picked up the slack with hefty asset purchases. How these central bankers intend to wind down their bloated balance sheets without causing severe oversupply is a question that remains unanswered, thus the nervousness within what is, after all, the second-longest bull market in history.
At the end of the day, only the Dow finished positive. The other major markets were marginally on the downside.
At the close, 5/3/17:
Dow: 20,957.90, +8.01 (0.04%)
NASDAQ: 6,072.55, -22.82 (-0.37%)
S&P 500: 2,388.13, -3.04 (-0.13%)
NYSE Composite: 11,529.66, -21.64 (-0.19%)
Saturday, April 29, 2017
Wall Street Frowns Over No Government Shutdown, 0.7% GDP Growth
The morons elected officials occupying the nation's capitol decided to punt on Friday, issuing a continuing resolution to keep the federal government operating for another week, rather than risk a government shutdown (which isn't really a shutdown), but Wall Street seemed unimpressed by their shenanigans.
Stocks closed lower on Friday, possibly as a form of relief after massive gains earlier in the week, finishing with minor losses, but with their second straight weekly gain.
After what promised to be a week of rancor and argument turned into a mere smattering of name-calling and finger-pointing, investors seemed unfazed by what didn't happen in Washington. The first estimate of first quarter GDP also added to the disappointment, coming in at the worst in three years, showing paltry 0.7% growth. That probably had more to do with Friday's decline than anything the government did or did not do.
The poor reading on the economy follows a similarly bad reading in the March non-farm payroll report, which showed the US economy stalling out a bit, adding just 98,000 jobs, a big miss on rosy estimates.
If the overall economic figures continue to flag, it will be difficult for the Fed to raise interest rates any further and probably not at the May FOMC meeting, which happens to be this week, Tuesday and Wednesday, May 2 and 3. A stalled-out economy may also keep the Fed on hold until the fall. The FOMC meets on June 13-14 and again on July 25-26. After that, they don't meet again until September.
The politicians have failed to pass any meaningful legislation, ObamaCare is still the law of the land, the congress continues to borrow money despite the highest tax receipts in history, and, if not for steady winnings in stocks, the American people would be up in arms over the lack of purpose and dignity in the halls of congress.
If, by some stroke of good fortune, the government would cease to exist on a semi-permanent basis, it might spark a rally on Wall Street the likes of which have never been seen. Since what the current federal government consists of does nothing for the betterment of the American citizen, perhaps it should declare itself ineffective and incompetent, and finally shut itself down.
We can only hope...
At the Close, 4/28/17:
Dow: 20,940.51, -40.82 (-0.19%)
NASDAQ: 6,047.61, -1.33 (-0.02%)
S&P 500: 2,384.20, -4.57 (-0.19%)
NYSE Composite: 11,536.08, -42.44 (-0.37%)
For the week:
Dow: +392.75 (1.91%)
NASDAQ: +137.08 (2.32%)
S&P 500: +35.53 (1.51%)
NYSE Composite: +146.95 (1.29%)
Stocks closed lower on Friday, possibly as a form of relief after massive gains earlier in the week, finishing with minor losses, but with their second straight weekly gain.
After what promised to be a week of rancor and argument turned into a mere smattering of name-calling and finger-pointing, investors seemed unfazed by what didn't happen in Washington. The first estimate of first quarter GDP also added to the disappointment, coming in at the worst in three years, showing paltry 0.7% growth. That probably had more to do with Friday's decline than anything the government did or did not do.
The poor reading on the economy follows a similarly bad reading in the March non-farm payroll report, which showed the US economy stalling out a bit, adding just 98,000 jobs, a big miss on rosy estimates.
If the overall economic figures continue to flag, it will be difficult for the Fed to raise interest rates any further and probably not at the May FOMC meeting, which happens to be this week, Tuesday and Wednesday, May 2 and 3. A stalled-out economy may also keep the Fed on hold until the fall. The FOMC meets on June 13-14 and again on July 25-26. After that, they don't meet again until September.
The politicians have failed to pass any meaningful legislation, ObamaCare is still the law of the land, the congress continues to borrow money despite the highest tax receipts in history, and, if not for steady winnings in stocks, the American people would be up in arms over the lack of purpose and dignity in the halls of congress.
If, by some stroke of good fortune, the government would cease to exist on a semi-permanent basis, it might spark a rally on Wall Street the likes of which have never been seen. Since what the current federal government consists of does nothing for the betterment of the American citizen, perhaps it should declare itself ineffective and incompetent, and finally shut itself down.
We can only hope...
At the Close, 4/28/17:
Dow: 20,940.51, -40.82 (-0.19%)
NASDAQ: 6,047.61, -1.33 (-0.02%)
S&P 500: 2,384.20, -4.57 (-0.19%)
NYSE Composite: 11,536.08, -42.44 (-0.37%)
For the week:
Dow: +392.75 (1.91%)
NASDAQ: +137.08 (2.32%)
S&P 500: +35.53 (1.51%)
NYSE Composite: +146.95 (1.29%)
Friday, April 28, 2017
Wall Street Stalling As DC Politicians Fight Over Nothing, Threaten Shutdown
The NASDAQ recorded another record close (6,048.94), but stocks struggled to remain positive Thursday as politicians in Washington continued to wrangle over funding the government and a potential vote on a replacement for Obamacare.
Democrats have called for a government shutdown if the Republicans bring a health care bill to the House floor before passing a continuing resolution for federal government funding.
This seems to be all that the politicos in Washington - and, apparently, the wizards of Wall Street - care about at present, though first quarter corporate earnings continue to be largely impressive.
Amazon (AMZN) and Alphabet, parent of Google (GOOG), released impressive first quarter results. Both stocks were up sharply on the day, but there was little luster elsewhere.
With gridlock having become the norm for the sacred cows of congress, investors need to begin looking beyond the sham that is government, which loses money all the time and is generally a burden to taxpayers rather than a benefit, for other catalysts to keep the eight-year bull market ramping along.
Nothing good is going to come out of Washington, DC, for the foreseeable future. Investors should turn a blind eye toward the nation's capitol and focus in on business, the true creator of capital.
At The Close, Thursday, April 27, 2017:
Dow: 20,981.33, +6.24 (0.03%)
NASDAQ: 6,048.94, +23.71 (0.39%)
S&P 500: 2,388.77, +1.32 (0.06%)
NYSE Composite: -11,578.52, -14.39 (-0.12%)
Democrats have called for a government shutdown if the Republicans bring a health care bill to the House floor before passing a continuing resolution for federal government funding.
This seems to be all that the politicos in Washington - and, apparently, the wizards of Wall Street - care about at present, though first quarter corporate earnings continue to be largely impressive.
Amazon (AMZN) and Alphabet, parent of Google (GOOG), released impressive first quarter results. Both stocks were up sharply on the day, but there was little luster elsewhere.
With gridlock having become the norm for the sacred cows of congress, investors need to begin looking beyond the sham that is government, which loses money all the time and is generally a burden to taxpayers rather than a benefit, for other catalysts to keep the eight-year bull market ramping along.
Nothing good is going to come out of Washington, DC, for the foreseeable future. Investors should turn a blind eye toward the nation's capitol and focus in on business, the true creator of capital.
At The Close, Thursday, April 27, 2017:
Dow: 20,981.33, +6.24 (0.03%)
NASDAQ: 6,048.94, +23.71 (0.39%)
S&P 500: 2,388.77, +1.32 (0.06%)
NYSE Composite: -11,578.52, -14.39 (-0.12%)
Wednesday, April 26, 2017
Stocks Rally As No Government Shutdown Seen; NASDAQ At Record High
Closing at as record high, the NASDAQ powered through the 6000 mark while the Dow and S&P 500 had their best back-to-back sessions of the year.
Investors appear to be pleased with the progress in Washington toward a peaceful resolution to the budget, in which the congress must fund the government by Friday night or be forced to close down parts of the federal apparatus.
Key to the negotiation has been President Trump's masterful handling of the situation, saying he can wait until later in the year to get congress to partially fund the building of the wall between Mexico and the United States on the US southern border. Democrats have already cried wolf over the measly $1.3 billion that would need to be appropriated to get the project into planning stage. Trump, knowing that a government shutdown would be blamed on Republicans, backed off his demands in order to attain at least a limited peace with the obstructionist Democrats.
This master stroke by Trump left investors giddy with confidence that the government will function without interruption. Also aiding the rally was a spate of earnings, notably by McDonald's, which suggested the economy is on a solid, growing footing.
Though the bull market which began in March of 2009 seems to be getting long in the tooth, the expansion due to Trump policies may just be starting.
At the Close, Tuesday, April 25, 2017:
Dow: 20,996.12, +232.23 (1.12%)
NASDAQ: 6,025.49, +41.67 (0.70%)
S&P 500: 2,388.61, +14.46 (0.61%)
NYSE Composite: 11,603.28, +71.49 (0.62%)
Investors appear to be pleased with the progress in Washington toward a peaceful resolution to the budget, in which the congress must fund the government by Friday night or be forced to close down parts of the federal apparatus.
Key to the negotiation has been President Trump's masterful handling of the situation, saying he can wait until later in the year to get congress to partially fund the building of the wall between Mexico and the United States on the US southern border. Democrats have already cried wolf over the measly $1.3 billion that would need to be appropriated to get the project into planning stage. Trump, knowing that a government shutdown would be blamed on Republicans, backed off his demands in order to attain at least a limited peace with the obstructionist Democrats.
This master stroke by Trump left investors giddy with confidence that the government will function without interruption. Also aiding the rally was a spate of earnings, notably by McDonald's, which suggested the economy is on a solid, growing footing.
Though the bull market which began in March of 2009 seems to be getting long in the tooth, the expansion due to Trump policies may just be starting.
At the Close, Tuesday, April 25, 2017:
Dow: 20,996.12, +232.23 (1.12%)
NASDAQ: 6,025.49, +41.67 (0.70%)
S&P 500: 2,388.61, +14.46 (0.61%)
NYSE Composite: 11,603.28, +71.49 (0.62%)
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