With Rand Paul absent due to injury, senators John McCain and Ted Cruz already announced no votes, the much-ballyhooed house-Trump tax plan looks to be dead on arrival and investors are not pleased.
Tuesday's action in the markets were punctuated by a pronounced leveling of the yield curve, with 2-10 and 5-30 spreads plumbing new lows.
Just in case the bickering in Washington continues towards implosion - a highly likely event horizon - with Democrats aligning with no-vote Republicans, forward looking people will next look to the upcoming December deadline for the debt ceiling and an anticipated increase to the federal funds rate by the Fed's FOMC.
That's putting pressure on stocks as the market opens Wednesday, though the declines are far from substantial. Also of note is crude oil's decline off recent three-year highs, while precious metals continue to the upside, a split in the commodity complex.
President Trump continues his extensive Pacific tour, in China for the time being, as news flow should slow to a crawl as the week closes in on Friday. With stocks fluctuating, it may be time to seek out undervalued equities, if any are to be found. Stocks remain wildly overpriced with backing by central banks preventing any potential cascading declines.
At the Close, Tuesday, November 7, 2017:
Dow: 23,557.23, +8.81 (+0.04%)
NASDAQ: 6,767.78, -18.65 (-0.27%)
S&P 500: 2,590.64, -0.49 (-0.02%)
NYSE Composite: 12,371.25, -29.68 (-0.24%)
Wednesday, November 8, 2017
Tuesday, November 7, 2017
Saudi Purge Prompts Higher Prices for Oil, Precious Metals
Midday Monday, the commodity complex (especially gold, silver and WTI crude oil) took off to the upside, and, by the end of the day, had maintained their newfound levels, oil hitting a nearly three-year high.
This dramatic rise in the price of oil coincides with tumultuous incidents in Saudi Arabia, wherein 11 princes, four ministers and several former ministers have been detained. Some prominent businessman have also been placed on a so-called "no fly" list, as Crown Prince Mohammed bin Salman purges his enemies in an overt effort to considerate power in the kingdom.
Oil rising and Saudi unrest are not isolated events, as neither is the incidental visit by President Trump some months ago and the more recent visit by Trump advisor and son-in-law Jared Kushner.
The Saudis have seen their profits collapse as oil has languished under $50 for years, but the political shakeup may have more to do with overall foreign interests, primarily focused on investments in US companies such as Citibank and Twitter, via the kingdom's sovereign wealth fund.
Silver and gold also rising at the same time during the day as oil confirms that there was coordinated buying of commodities in the futures market. The move was far from insignificant and was presaged by a similar move to the downside in the complex on Friday, prior to the Saudi purge, which went public on Sunday.
With President Trump safely traveling in the Pacific, the intrigue is high that something major is afoot globally, recalling Trump's cryptic tweet a few weeks ago, "the calm before the storm."
It seems that the storm has arrived, at least in the middle East. Whether it continues to lash out across Europe and the United States is, at this time, still conjecture.
As has been demonstrated periodically in the past, commodity futures can be highly volatile and can have profound effects further into the supply and demand chain. If oil continues to rise, it may be time to take any number of protective measures, from purchasing a fuel-efficient vehicle, to selling the dollar, to buying precious metal in anticipation of a major - and long overdue - breakout.
While nothing in the interconnected world of finance operates in a vacuum, stocks could also feel some heat, though the markets have more than ample protection on the downside via central bank stealth and overt (Swiss National Bank) purchases.
It is apparent, however, that given the Saudi purge and the rise in the price of oil, something big is happening.
At the Close, Monday, November 6, 2017:
Dow: 23,548.42, +9.23 (+0.04%)
NASDAQ: 6,786.44, +22.00 (+0.33%)
S&P 500: 2,591.13, +3.29 (+0.13%)
NYSE Composite: 12,400.93, +27.87 (+0.23%)
This dramatic rise in the price of oil coincides with tumultuous incidents in Saudi Arabia, wherein 11 princes, four ministers and several former ministers have been detained. Some prominent businessman have also been placed on a so-called "no fly" list, as Crown Prince Mohammed bin Salman purges his enemies in an overt effort to considerate power in the kingdom.
Oil rising and Saudi unrest are not isolated events, as neither is the incidental visit by President Trump some months ago and the more recent visit by Trump advisor and son-in-law Jared Kushner.
The Saudis have seen their profits collapse as oil has languished under $50 for years, but the political shakeup may have more to do with overall foreign interests, primarily focused on investments in US companies such as Citibank and Twitter, via the kingdom's sovereign wealth fund.
Silver and gold also rising at the same time during the day as oil confirms that there was coordinated buying of commodities in the futures market. The move was far from insignificant and was presaged by a similar move to the downside in the complex on Friday, prior to the Saudi purge, which went public on Sunday.
With President Trump safely traveling in the Pacific, the intrigue is high that something major is afoot globally, recalling Trump's cryptic tweet a few weeks ago, "the calm before the storm."
It seems that the storm has arrived, at least in the middle East. Whether it continues to lash out across Europe and the United States is, at this time, still conjecture.
As has been demonstrated periodically in the past, commodity futures can be highly volatile and can have profound effects further into the supply and demand chain. If oil continues to rise, it may be time to take any number of protective measures, from purchasing a fuel-efficient vehicle, to selling the dollar, to buying precious metal in anticipation of a major - and long overdue - breakout.
While nothing in the interconnected world of finance operates in a vacuum, stocks could also feel some heat, though the markets have more than ample protection on the downside via central bank stealth and overt (Swiss National Bank) purchases.
It is apparent, however, that given the Saudi purge and the rise in the price of oil, something big is happening.
At the Close, Monday, November 6, 2017:
Dow: 23,548.42, +9.23 (+0.04%)
NASDAQ: 6,786.44, +22.00 (+0.33%)
S&P 500: 2,591.13, +3.29 (+0.13%)
NYSE Composite: 12,400.93, +27.87 (+0.23%)
Friday, November 3, 2017
Trump Nominates Jerome Powell As Fed Chair; Goldman Sachs Execs Happy
Some equities responded with favor to President Trump's nomination of ultimate insider, Jerome Powell, to the chairmanship of the Federal Reserve.
Without so much as the batting of a single eyelash, Goldman Sachs (GS), Microsoft (MSFT), McDonald's (MCD), Boeing (BA), and JP Morgan Chase (JPM) led the Dow to yet another record high, mainly upon the notion that Powell would continue to easy money and lax regulatory environment so loved by Wall Street.
It would be easy to point the finger at Mr. Trump for appeasing the status quo, though it might not be an accurate assessment of the situation. The president is smart enough to know that keeping Wall Street happy and profitable has a profound effect on his standing within the business community and promoting a life-long lawyer (not an economist) and financier with multiple ties to various private and public money machines goes a long way toward keeping the Fed on its current track (Powell has not cast a dissenting FOMC vote in his five years as a voting member.
There could be worse environments than the current regime controlling the global economy, though it is difficult to think of one that could compare with the outright rigging and asset-prompting the central banks have engaged in over the past ten years. In case one was not in complete agreement and chose not to engage in one of the longest and best-maintained bull markets in history, the past is prologue and the nomination of Powell ensures a smooth transition to the Fed's top post. More of the same would seem to be the open dialogue of the day.
Keeping the rich rich and the middle and lower classes entertained, while not the optimal policy directive, has served to keep the system afloat, despite its various warts, bruises and open wounds.
Much of finance is done behind closed doors and it's probably a good thing, because were the wicked deals to be generally known by the public, riotous behavior might ensue. Keeping the Fed on an even keel will likely result in ever higher prices for stocks and a more complacent (if that is even possible with the VIX hovering around 10) investment community.
What could go wrong?
At the Close, Thursday, November 2, 2017:
Dow: 23,516.26: +81.25 (+0.35%)
NASDAQ: 6,714.9429, -1.59 (-0.02%)
S&P 500: 2,579.85, +0.49 (+0.02%)
NYSE Composite: 12,372.96, +10.08 (+0.08%)
Without so much as the batting of a single eyelash, Goldman Sachs (GS), Microsoft (MSFT), McDonald's (MCD), Boeing (BA), and JP Morgan Chase (JPM) led the Dow to yet another record high, mainly upon the notion that Powell would continue to easy money and lax regulatory environment so loved by Wall Street.
It would be easy to point the finger at Mr. Trump for appeasing the status quo, though it might not be an accurate assessment of the situation. The president is smart enough to know that keeping Wall Street happy and profitable has a profound effect on his standing within the business community and promoting a life-long lawyer (not an economist) and financier with multiple ties to various private and public money machines goes a long way toward keeping the Fed on its current track (Powell has not cast a dissenting FOMC vote in his five years as a voting member.
There could be worse environments than the current regime controlling the global economy, though it is difficult to think of one that could compare with the outright rigging and asset-prompting the central banks have engaged in over the past ten years. In case one was not in complete agreement and chose not to engage in one of the longest and best-maintained bull markets in history, the past is prologue and the nomination of Powell ensures a smooth transition to the Fed's top post. More of the same would seem to be the open dialogue of the day.
Keeping the rich rich and the middle and lower classes entertained, while not the optimal policy directive, has served to keep the system afloat, despite its various warts, bruises and open wounds.
Much of finance is done behind closed doors and it's probably a good thing, because were the wicked deals to be generally known by the public, riotous behavior might ensue. Keeping the Fed on an even keel will likely result in ever higher prices for stocks and a more complacent (if that is even possible with the VIX hovering around 10) investment community.
What could go wrong?
At the Close, Thursday, November 2, 2017:
Dow: 23,516.26: +81.25 (+0.35%)
NASDAQ: 6,714.9429, -1.59 (-0.02%)
S&P 500: 2,579.85, +0.49 (+0.02%)
NYSE Composite: 12,372.96, +10.08 (+0.08%)
Thursday, November 2, 2017
FOMC Leaves Rates Unchanged; Markets Respond Positively
The Federal Reserve's FOMC issued their policy statement at 2:00 pm ET, after a two-day meeting that was widely anticipated to keep the federal funds rate unchanged at 1.00-1.25%.
What the Fed did change in its statement was a few words which piqued the interest of the bullish crowd on Wall Street, saying that the US economy was displaying "solid" growth over the past few months, a change from their use of the word "moderate" or "moderately" to describe US economic growth.
That was enough for investors to snap up a few more mostly overpriced shares on the first day November, except on the NASDAQ, which was the one index to end the session at a loss.
The Fed is prepared to raise interest rates in December, boosting the federal funds rate to 1.25-1.50%, a level still well below what most economists consider normal and sustainable.
At the Close, Wednesday, November 1, 2017:
Dow: 23,435.01, +57.77 (+0.25%)
NASDAQ: 6,716.53, -11.14 (-0.17%)
S&P 500: 2,579.36, +4.10 (+0.16%)
NYSE Composite: 12,362.88, +21.87 (+0.18%)
What the Fed did change in its statement was a few words which piqued the interest of the bullish crowd on Wall Street, saying that the US economy was displaying "solid" growth over the past few months, a change from their use of the word "moderate" or "moderately" to describe US economic growth.
That was enough for investors to snap up a few more mostly overpriced shares on the first day November, except on the NASDAQ, which was the one index to end the session at a loss.
The Fed is prepared to raise interest rates in December, boosting the federal funds rate to 1.25-1.50%, a level still well below what most economists consider normal and sustainable.
At the Close, Wednesday, November 1, 2017:
Dow: 23,435.01, +57.77 (+0.25%)
NASDAQ: 6,716.53, -11.14 (-0.17%)
S&P 500: 2,579.36, +4.10 (+0.16%)
NYSE Composite: 12,362.88, +21.87 (+0.18%)
Wednesday, November 1, 2017
Stocks End October on High Note: Fed's FOMC on Deck
With no rate hike expected from the ongoing FOMC meeting this week, investors tacked on small gains as October came to a close.
In what was a sluggish session, the main indices limped higher, awaiting jobs data later in the week and the unveiling of some kind of tax bill from congress.
The Fed will release its policy announcement at 2:00 pm ET on Wednesday, though most analysts insist there will be little to motivate buyers or sellers.
At the Close, Tuesday, October 31, 2017:
Dow: 23,377.24, +28.50 (+0.12%)
NASDAQ: 6,727.67, +28.71 (+0.43%)
S&P 500: 2,575.26, +2.43 (+0.09%)
NYSE Composite: 12,341.01, +21.54 (+0.17%)
In what was a sluggish session, the main indices limped higher, awaiting jobs data later in the week and the unveiling of some kind of tax bill from congress.
The Fed will release its policy announcement at 2:00 pm ET on Wednesday, though most analysts insist there will be little to motivate buyers or sellers.
At the Close, Tuesday, October 31, 2017:
Dow: 23,377.24, +28.50 (+0.12%)
NASDAQ: 6,727.67, +28.71 (+0.43%)
S&P 500: 2,575.26, +2.43 (+0.09%)
NYSE Composite: 12,341.01, +21.54 (+0.17%)
Subscribe to:
Posts (Atom)
Posts
