Thanks to central banks, all the major averages made new closing highs on Wednesday.
This is not investing. This is centralized control.
Nothing about these markets should be believed, especially since the money represented is conjured out of thin air by central bankers. Thinking people should question this unusual feature of money and markets. Most of the world is asleep, lulled into a trance by the power of money.
It's difficult to comprehend that all of the money flows are complete fiction, but that is the truth, unfortunately.
At the Close, 7/19/17:
Dow: 21,640.75, +66.02 (0.31%)
NASDAQ: 6,385.04, +40.74 (0.64%)
S&P 500: 2,473.83, +13.22 (0.54%)
NYSE Composite: 11,941.34, +63.92 (0.54%)
Thursday, July 20, 2017
Wednesday, July 19, 2017
Mixed Markets are Sending Clear Message
As seems to be the norm lately, the major indices finished in mixed fashion Tuesday, with the NASDAQ and S&P finishing with gains, while the Dow and NYSE Composite took losses.
This repeating pattern may be confusing to some investors, but the trend seems pretty clear: there will be winners and losers on given days, often on the same days, and, while the general economy may have weak and strong sectors, the general trend is higher.
Nothing could be more obvious after chasing stocks since March of '09 has resulted in one of the greatest bull markets of any era. For the most part, it's been easy pickings for fund managers, hedgers (most of whom don't hedge at all), and even individuals investing in the market. An especially accommodative Federal Reserve has seen to that. Even today, with the federal funds rate at 1.00-1.25% - the highest in nine years - by historical standards it's still incredibly low.
Recent talk by Janet Yellen and other Fed members is leading the market to believe that this regime of low interest rates still has room to run. The FOMC has upped the federal funds rate twice already, but appears to be slowing its approach. Many believe they will only raise rates once more this year, likely in December.
Climbing the worry wall with the Fed, most of the Wall Street crowd seems convinced that the central bank has the stock market's back, despite political rhetoric and decades of denial. The Fed is supposed to control monetary policy, but, since the GFC, they certainly don't appear shy about meddling elsewhere, having sloshed bond and stock markets alike with wave after wave of fresh fiat.
Since the money is nothing more than paper with promises, it's what they can and will do. Until further notice, the Fed is in control of all money, yours, ours, theirs, and those of foreigners, dead people, and people not yet born.
It's probably a good thing that there's so much normalcy bias that hardly anyone cares that everything is completely fake.
Like the saying says, "fake it 'til you make it."
At The Close, 7/18/17:
Dow: 21,574.73, -54.99 (-0.25%)
NASDAQ: 6,344.31, +29.87 (0.47%)
S&P 500: 2,460.61, +1.47 (0.06%)
NYSE Composite: 11,877.42, -13.09 (-0.11%)
This repeating pattern may be confusing to some investors, but the trend seems pretty clear: there will be winners and losers on given days, often on the same days, and, while the general economy may have weak and strong sectors, the general trend is higher.
Nothing could be more obvious after chasing stocks since March of '09 has resulted in one of the greatest bull markets of any era. For the most part, it's been easy pickings for fund managers, hedgers (most of whom don't hedge at all), and even individuals investing in the market. An especially accommodative Federal Reserve has seen to that. Even today, with the federal funds rate at 1.00-1.25% - the highest in nine years - by historical standards it's still incredibly low.
Recent talk by Janet Yellen and other Fed members is leading the market to believe that this regime of low interest rates still has room to run. The FOMC has upped the federal funds rate twice already, but appears to be slowing its approach. Many believe they will only raise rates once more this year, likely in December.
Climbing the worry wall with the Fed, most of the Wall Street crowd seems convinced that the central bank has the stock market's back, despite political rhetoric and decades of denial. The Fed is supposed to control monetary policy, but, since the GFC, they certainly don't appear shy about meddling elsewhere, having sloshed bond and stock markets alike with wave after wave of fresh fiat.
Since the money is nothing more than paper with promises, it's what they can and will do. Until further notice, the Fed is in control of all money, yours, ours, theirs, and those of foreigners, dead people, and people not yet born.
It's probably a good thing that there's so much normalcy bias that hardly anyone cares that everything is completely fake.
Like the saying says, "fake it 'til you make it."
At The Close, 7/18/17:
Dow: 21,574.73, -54.99 (-0.25%)
NASDAQ: 6,344.31, +29.87 (0.47%)
S&P 500: 2,460.61, +1.47 (0.06%)
NYSE Composite: 11,877.42, -13.09 (-0.11%)
Tuesday, July 18, 2017
Stocks Flat on Monday, BofA, Goldman Sachs Report Improved Earnings
Stocks finished flat in a very dull session, which is not surprising following the blockbuster that was last week. With scant economic news, traders are likely looking forward to the FOMC meeting next week (Tuesday and Wednesday), the last one before September.
Corporate earnings will be taking the spotlight over the next two weeks, as the majority of companies will be reporting second quarter results.
Prior to the open on Tuesday, a couple of major financial institutions reported, with excellent results.
Bank of America (BAC) posted $5.3 billion in net income, up 10% from a year ago. BofA’s earnings per share for the quarter increased 12% to 46 cents. Analysts expected the bank to earn 43 cents per share.
Goldman Sachs (GS) EPS: $3.95 vs. $3.39 expected by analysts polled by Thomson Reuters. Revenue $7.89 billion vs. $7.521 billion expected by Reuters.
Despite those solid figures, futures on the main indices are drifting lower prior to Tuesday's opening bell.
At the close, 7/17/17:
Dow: 21,629.72, -8.02 (-0.04%)
NASDAQ: 6,314.43, +1.97 (0.03%)
S&P 500: 2,459.14, -0.13 (-0.01%)
NYSE Composite: 11,890.51, -6.80 (-0.06%)
Corporate earnings will be taking the spotlight over the next two weeks, as the majority of companies will be reporting second quarter results.
Prior to the open on Tuesday, a couple of major financial institutions reported, with excellent results.
Bank of America (BAC) posted $5.3 billion in net income, up 10% from a year ago. BofA’s earnings per share for the quarter increased 12% to 46 cents. Analysts expected the bank to earn 43 cents per share.
Goldman Sachs (GS) EPS: $3.95 vs. $3.39 expected by analysts polled by Thomson Reuters. Revenue $7.89 billion vs. $7.521 billion expected by Reuters.
Despite those solid figures, futures on the main indices are drifting lower prior to Tuesday's opening bell.
At the close, 7/17/17:
Dow: 21,629.72, -8.02 (-0.04%)
NASDAQ: 6,314.43, +1.97 (0.03%)
S&P 500: 2,459.14, -0.13 (-0.01%)
NYSE Composite: 11,890.51, -6.80 (-0.06%)
Saturday, July 15, 2017
All Janet Yellen, All The Time Sends Stocks Soaring
“Because the neutral rate is currently quite low by historical standards, the federal funds rate would not have to rise all that much further to get to a neutral policy stance.”-- Janet Yellen, in prepared remarks to House Financial Services Committee, Wednesday, July 12, 2017
Since that statement, released prior to the opening bell on Wednesday, stocks have taken flight to new highs. For instance, the Dow Jones Industrial Average closed Tuesday at 21,409.07, and closed Friday at 21,637.74. A couple hundred points isn't bad, but check out the NASDAQ:
NASDAQ close 7/11/17: 6,193.30
NASDAQ close 7/14/17: 6,312.47
119 points in three days is OK work if you can get it, and Wall Street perfectly got it, interpreting Yellen's statement that the Fed's controlled federal funds interest rate would not be rising very quickly this year, if at all. Good news! Buy!
The soft underbelly of that statement is that the US - and by extension, the global - economy is not growing, inflation is not roaring (June CPI was flat, as in 0.0%, and the Fed is desperate for inflation), wages are not rising and employment is still flagging. Additionally, the number of people out of the labor force is enormous, pension plans in states such as Illinois, Connecticut, California and elsewhere are imploding, putting additional pressure on the Fed, Wall Street and the PPT to keep asset prices rising. Otherwise, the entire financial system collapses.
Also, P/E ratios on the S&P 500 are hovering around 25%, which is about 40% higher than the norm. The market badly needs to correct, but, thanks to Yellen and her cohorts, central banks continue to purchase assets at exorbitant prices.
What could go wrong?
Have a great weekend.
At the Close, 7/14/17:
Dow: 21,637.74, +84.65 (0.39%)
NASDAQ: 6,312.47, +38.03 (0.61%)
S&P 500: 2,459.27, +11.44 (0.47%)
NYSE Composite: 11,897.31, +52.69 (0.44%)
For the week:
Dow: +223.40 (1.04%)
NASDAQ: +159.39 (1.59%)
S&P 500: +34.09 (1.41%)
NYSE Composite: +144.33 (1.23%)
Friday, July 14, 2017
Wall Street To Yellen: We Love You, Janet
Wall Street's reaction to Fed Chairwoman Janet Yellen's appearance on Capitol Hill the past two days has been nothing short of a high school romance.
It's been impulsive, short and intense.
And now, with hope, it's over. Perhaps we'll all be spared the details of the jilting. Janet will probably say something about stocks being overvalued and the traders will quietly sulk away, probably over to the bond pits, where they know true love - albeit at low yields - can be found.
The idea that frumpy Janet Yellen can make the masters of industry and, say some, the universe, trip and fall over each other on their ways to buying stocks is as ludicrous as the entire idiocy of centralized financial planning by the Federal Reserve.
Since global finance and economics is vast and unpredictable, the power of the Fed to control it is diminished. Certainly, the Federal Reserve has tools at its disposal to direct policy actions which often translate into tangible results in the real world, but, more often than not, they cannot direct the actions of billions of individuals, millions of businesses, and trillions in currencies.
Those engaged in the business known as the financial industry would like to believe - and to pass that belief along to clients - that the Fed does have everything under control. The facts speak differently. In the fall of 2008, when Lehman Brothers collapsed, the Fed had lost control and they scrambled, along with their central banking brethren from other countries, to restore some sense of balance and sanity.
But, they were too late. Stocks crashed. Banks needed massive injections of liquidity (money) from taxpayers in the form of a $700 billion monstrosity known in the day as TARP. Strange as it may seem, TARP actually stood for Troubled Asset Relief Program. The troubled assets were mortgages. The relief was in the form of taxpayer money. Essentially, the crooked banking cabal tacked another $700 billion onto the trillions of debt already owed by the federal government, i.e., the citizens and businesses of the United States of America.
So, there's no wonder that Wall Street loves the Fed and the fair-haired Janet Yellen. They're assured that whatever numbskull trades or risky maneuvers the banks and financial institutions make will be promptly papered over by Janet and her gang of official-looking thieves.
The Federal Reserve has robbed Americans and the rest of the world since 1913. It has endured two World Wars, a massive global depression, countless smaller recessions, booms, busts, inflations, deflations, devaluations, the start and end of Bretton Woods, confiscation of gold, manipulation of silver and mostly, inflation that has devalued the US Dollar, the currency of the United States of America, by 97% over the past 104 years.
When the next financial crisis arrives - and it will, eventually - the Fed will be standing firm, looking cute and sweet, with a plan to revive the spirit and stability of the "system." When that time comes, Wall Street must be restrained by the public. They must be told, like the high school boys they imitate, "she's no good for you."
Investors and fund managers and pensioners must be told, "you're in an abusive relationship. You need to get out."
It's time to end the love affair with the Fed.
At the Close, 7/13/17:
Dow: 21,553.09, +20.95 (0.10%)
NASDAQ: 6,274.44, +13.27 (0.21%)
S&P 500: 2,447.83, +4.58 (0.19%)
NYSE Composite: 11,844.62, +18.73 (0.16%)
It's been impulsive, short and intense.
And now, with hope, it's over. Perhaps we'll all be spared the details of the jilting. Janet will probably say something about stocks being overvalued and the traders will quietly sulk away, probably over to the bond pits, where they know true love - albeit at low yields - can be found.
The idea that frumpy Janet Yellen can make the masters of industry and, say some, the universe, trip and fall over each other on their ways to buying stocks is as ludicrous as the entire idiocy of centralized financial planning by the Federal Reserve.
Since global finance and economics is vast and unpredictable, the power of the Fed to control it is diminished. Certainly, the Federal Reserve has tools at its disposal to direct policy actions which often translate into tangible results in the real world, but, more often than not, they cannot direct the actions of billions of individuals, millions of businesses, and trillions in currencies.
Those engaged in the business known as the financial industry would like to believe - and to pass that belief along to clients - that the Fed does have everything under control. The facts speak differently. In the fall of 2008, when Lehman Brothers collapsed, the Fed had lost control and they scrambled, along with their central banking brethren from other countries, to restore some sense of balance and sanity.
But, they were too late. Stocks crashed. Banks needed massive injections of liquidity (money) from taxpayers in the form of a $700 billion monstrosity known in the day as TARP. Strange as it may seem, TARP actually stood for Troubled Asset Relief Program. The troubled assets were mortgages. The relief was in the form of taxpayer money. Essentially, the crooked banking cabal tacked another $700 billion onto the trillions of debt already owed by the federal government, i.e., the citizens and businesses of the United States of America.
So, there's no wonder that Wall Street loves the Fed and the fair-haired Janet Yellen. They're assured that whatever numbskull trades or risky maneuvers the banks and financial institutions make will be promptly papered over by Janet and her gang of official-looking thieves.
The Federal Reserve has robbed Americans and the rest of the world since 1913. It has endured two World Wars, a massive global depression, countless smaller recessions, booms, busts, inflations, deflations, devaluations, the start and end of Bretton Woods, confiscation of gold, manipulation of silver and mostly, inflation that has devalued the US Dollar, the currency of the United States of America, by 97% over the past 104 years.
When the next financial crisis arrives - and it will, eventually - the Fed will be standing firm, looking cute and sweet, with a plan to revive the spirit and stability of the "system." When that time comes, Wall Street must be restrained by the public. They must be told, like the high school boys they imitate, "she's no good for you."
Investors and fund managers and pensioners must be told, "you're in an abusive relationship. You need to get out."
It's time to end the love affair with the Fed.
At the Close, 7/13/17:
Dow: 21,553.09, +20.95 (0.10%)
NASDAQ: 6,274.44, +13.27 (0.21%)
S&P 500: 2,447.83, +4.58 (0.19%)
NYSE Composite: 11,844.62, +18.73 (0.16%)
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