Stocks Ignore Political Risks, China Regulations; Glint App Takes Gold Digital

Early morning in Europe and the Western Hemisphere were looking downright dreary to open the week's financial escapades, until buyers (central banks) emerged from the shadows (crypts), quickly erasing concerns over China's new rules to crimp the burgeoning shadow banking uprising and the failure of German Chancellor Angela Merkel to form a coalition government.

While futures were down sharply - especially on the European news - they were quickly corrected. China's markets quickly went from negative, staging a day-long rally, while European bourses were mostly positive and US stocks rallied sharply from the opening bell.

However, the euphoria flagged in the US as the session wore on, with stocks finishing off their highs of the day. Still, the results were much more cheerful than what might have happened if markets and investors were left alone, barring the blatant interventionism that seems to pervade trading in all markets.

The new paradigm is such that stocks cannot fail, but only go higher, valuations be damned, while gold and silver are routinely taken out to the woodshed for a weekly beating, such as occurred this morning, prior to the opening bell on Wall Street and throughout the day.

The setup isn't all so new at all. Since 2012, gold and silver have been mercilessly suppressed, to the point at which some staunch supporters are rethinking their love for shiny metals. This is exactly what central bankers wish, that wealth protectors give up and resign themselves to the fiat money regimen, but it is also precisely the time - if one is guided by sound investment stratagems - to begin loading up on what most would be shunning.

In that regard, London-based Glint launched a mobile app today that sets gold sailing into the digital age, offering Glintpay as a means by which to hold gold in a Swiss-based vault with the ability to spend one's holdings via a complementary MasterCard.

The app, which is available for download through the Apple App Store, works on iPhones and iPads using Apple's iOS operating system and is promising to provide quick and easy debit access to gold and a host of other currencies, with millions of locations worldwide accepting MasterCard.

How well the start-up will fare is an open question, but it does raise an interesting alternative to Bitcoin and other cryptocurrencies, which have witnessed monumental growth over the past six months and continue to raise eyebrows in the conventional banking universe.

The world is at a crossroads in terms of currencies. Trust in the debt-slavery central bank system continues to wane in various places as the rise of cryptos offers a glimpse of a possible future and precious metal devotees cling to long-held beliefs in money that is backed by physical assets.

Currency events are historically long-winded affairs, taking years or decades in which to sort themselves out. The ongoing forays between fiat, crypto, and physical seems to have gained some momentum today.

Investors with an eye on the global financial landscape would be wise to hold some of each, allocating more toward the digital and physical as events warrant as old systems are dying and may have been dealt an unrecoverable blow during the Great Financial Crisis of 2007-09.

At the Close, Monday, November 20, 2017:
Dow: 23,430.33, +72.09 (+0.31%)
NASDAQ: 6,790.71, +7.92 (+0.12%)
S&P 500: 2,582.14, +3.29 (+0.13%)
NYSE Composite: 12,320.77, +17.88 (+0.15%)

US Equites In Danger Zone After Very Volatile Week

The US economy isn't exactly on its back, but it also isn't growing by the phony 3+ percent the government reported in the past two quarters.

Speaking strictly from an economist's perspective, the US government GDP figures include grossly-inflated government spending and just about every spare dollar their statisticians can unearth from the mainland, Alaska and Hawaii.

GDP-watching is a Wall Street phenomena, serving the interests of the corporatists who need to return dividends or share growth to stockholders. Thus, it adds impetus to the argument that investing in US corporations is a good idea. That may or may not be true, depending largely upon which corporation is attracting the investing dollars.

Obviously, the FAANGs (Facebook (FB), Apple (AAPL), Amazon (AMZN), Netflix (NFLX), and Google (Alphabet, GOOG) have been the most attractive of the past six to eight years, while quite a few have faltered. Most of the stocks making gains since the GFC of 2007-09 have been the result of massive stock buybacks, a dubious distinction, as these high-fliers are the ones most prone to collapse in the case of a market rout.

They've diluted their shares and have deployed capital in one of the worst ways, buying back shares in order to boost EPS (earnings per share). Having fewer shares available while keeping profits at roughly the same level improves EPS, but it does not expand the business potential. Banks and financials are especially guilty in this regard. They're over-leveraged and will pay a price, but their executives and shareholders are happy little clams, for now.

When the share price falls, and dividends are slashed, the shareholders will be singing a different tune. The executives will be long gone because they've proven to care only about their own pockets and bonuses.

In any case, stocks ran through a very volatile week, punctuated by a massive dead-cat-bounce rally on Thursday which stanched some of the losses incurred since all-time highs the previous Tuesday.

There could be a waterfall effect developing, because confidence is waning. The holiday shopping season - which is demonstrably longer than last year's - should provide a boost, but the economy is lurching closer to two important events: the December Fed meeting and the expected rate hike, and another round of negotiations in congress over the debt ceiling limit, both mid-month.

Elsewhere, oil remains at elevated levels, above $55/barrel for WTI crude, gold and silver were bounced around but appear ready for a breakout (as they have too many times in the past four years, with nothing to show), bonds were flatter still.

At the Close, Friday, November 17, 2017:
Dow: 23,358.24, -100.12 (-0.43%)
NASDAQ 6,782.79, -10.50 (-0.15%)
S&P 500: 2,578.85, -6.79 (-0.26%)
NYSE Composite: 12,302.89, -0.39 (0.00%)

For the Week:
Dow: -63.97 (-0.27%)
NASDAQ: +31.85 (+0.47%)
S&P 500: -3.45 (-0.13%)
NYSE Composite: -19.71 (-0.16%)

Stocks Rebound After Week of Losses

No reason for stocks to gain at all, probably just buying the dip, or, BTFD, if one prefers.

There's still a way to get to get back to all-time highs form last Tuesday (23,602 on the Dow), but, with Thanksgiving coming up and a shortened Black Friday always good for a holiday boost, there's a very, very good chance that stocks will resume rising, because that's all there is in this kinky investing environment.

You didn't really think the bull market was ending, did you?

The fast answer, for those paying attention, is, "it can't." Because then everything turns to mud.

At The Close, Thursday, November 16, 2017:
Dow: 23,458.36, +187.08 (+0.80%)
NASDAQ: 6,793.29, +87.08 (+1.30%)
S&P 500: 2,585.64, +21.02 (+0.82%)
NYSE Composite: 12,303.28, +82.94 (+0.68%)

Stocks Drubbed on Cool CPI

Stocks opened on the downside for the seventh consecutive session, only this time they did not manage a complete comeback by the close. What triggered the selloff was a tight CPI number, as the widely-watched index of US consumer prices inched up only 0.1% in October, the smallest gain in three months.

At another time in the pantheon of stock market momentum and movement, the soft inflation figure might have spurred a buying spree, as investors could gain confidence that the Fed would not raise rates in December, as is widely anticipated, but that was not the case today. The mood has changed significantly and there's a persistent pessimistic undertone that there soon could be blood in the streets.

Bonds may be calling the next move via the curve (or non-curve as the case may soon be). The spread between 5s and 30s plunged to 73 Basis Points today, the flattest since November of 2007, a key point in time, as it was then that the Great Financial Crisis (GFC) was about to unfold.

The 10-year note remains mired in the 2.30-2.38 range. A break in yield below 2.28 could be a triggering event prior to the December FOMC meeting at which the Fed is poised to raise the federal funds rate for the third time this year.

Credit is being squeezed as are margins in various industries, especially consumer retail. Amazon's foray into the grocery business via its Whole Foods acquisition may be the defining deflationary event of the decade.

As far as the indices are concerned, all eyes are on the Dow Industrials, which, after breaking to an all-time high last Tuesday, have done nothing but drift lower, though the flight path has been gradual... until today.

At the close today, the blue chips have shed 331 points, or about 1.4% since the high reached on November 7.

At the Close, Wednesday, November 15, 2017:
Dow: 23,271.28, -138.19 (-0.59%)
NASDAQ: 6,706.21, -31.66 (-0.47%)
S&P 500: 2,564.62, -14.25 (-0.55%)
NYSE Composite: 12,220.34, -59.77 (-0.49%)

Stocks Under Pressure; Bulls All Die At Some Point

Anybody who believes that this current bull market - fueled by easy money policies from central banks, fake statistics, and enormous government deficits - will continue much longer needs to take a reality check.

Just for those who cannot or will not see the forest for the trees, the following:

• The 10-year-note is stuck in a perpetual yield range of 2.3-something.
• Stocks have been going sideways for week.
• There's almost no chance that the congress will pass any kind of tax reform bill this year as they are doing nothing more than posturing for the midterm elections.
• The national debt continues to soar to new heights, despite happy talk from the administration (remember, congress holds the purse-strings).
• The percentage of people in the workforce is still at near-record lows.
• The Us trade deficit with China is not shrinking.
• State pension plans and many private pension plans are underfunded by trillions of dollars.
• Voting doesn't matter (see the fiasco over Roy Moore)
• Corporate profits are beginning to show serious signs of a slowdown (GE, Chipolte, others)
• Foreclosures, bankruptcies, student loan defaults are rising.

That is just a sampling, and today's market, in form with the past few sessions, took a nosedive at the open only to recover thanks to spirited heavy lifting by the PPT or central bank cronies on the heaviest volume in five months.

The Dow was down 168 points shortly after 10:00 am ET, only to close with a marginal loss. Even at its lowest point, the index was 900 points above its 50-day moving average.

Stocks are as overpriced as they've ever been, setting up for a crash of enormous proportions.

It's coming, but nobody knows when or why it will occur. The Fed is still insistent upon raising interest rates again in December, at a time at which the economy is neither growing fast enough to warrant such behavior nor robust enough to withstand repeated rate hikes.

Over the years, the Federal Reserve has caused more crashes and recessions than it will admit. Uncontrollable spending by government and cascading business and individual debt is reaching unprecedented heights, worse than preceding the Great Financial Crisis of 2007-09.

Extreme caution is advised.


At the Close, Tuesday, November 14, 2017:
Dow: 23,409.47, -30.23 (-0.13%)
NASDAQ: 6,737.87, -19.72 (-0.29%)
S&P 500: 2,578.87, -5.97 (-0.23%)
NYSE Composite: 12,280.11, -36.71 (-0.30%)