US equity markets were roiled Monday as the dollar jumped and bonds sold off, pushing yields higher, especially on the short end of the curve.
The two-year treasury finished the day at 2.09%, the five at 2.47%, and the benchmark ten-year note briefly touched 2.70% before dipping back to 2.68%. For perspective, consider that the five-year treasury was yielding 2.19% and the ten-year, 2.39, just a month ago. Those are significant moves and, apparently, the stock market has now taken notice as fixed investments begin offering yields competitive with stock dividends, at least.
For more perspective, the S&P and Dow averages suffered their worst one-day drops since early September. The percentage was just two-thirds of a percent on both indices. That shows just how decisive the rally since the election of Donald J. Trump as president has been. There has not been on single-day one percent decline on either in well over a year.
If a sea change in sentiment is occurring, Tuesday's trade could be a determinant day. Futures are pointing well lower and the VIX is cresting over 14 in the US, while global markets are a sea of red.
Japan's NIKKEI was down nearly 1.5%. The Hang Song was off over one percent. European bourses are uniformly lower at their midday.
As the nation prepares for President Trump's first State of the Union speech Tuesday night, more focus could be on internal DC politics, especially the readying for release of the troubling, explosive memo penned by the House Intelligence committee.
On Monday, the Intel committee voted along party lines to declassify the four-page missive. The president has five days to release the memo or keep it classified. Opinion and timing see Thursday as the likely eventual release.
With the FOMC set to keep rates unchanged on Wednesday (the meeting opens Tuesday), that may be the only thing that doesn't change this week.
At the Close, Monday, January 29, 2018:
Dow: 26,439.48, -177.23 (-0.67%)
NASDAQ: 7,466.51, -39.27 (-0.52%)
S&P 500: 2,853.53, -19.34 (-0.67%)
NYSE Composite: 13,524.65, -112.37 (-0.82%)
Tuesday, January 30, 2018
Monday, January 29, 2018
Stocks Soar Through January; Big Week Upcoming
Stocks staged their best cumulative effort of the new year, as January equity returns continued to explode through the final full week of trading in the United States.
Making the gains all the more impressive is the fact that the month has seen only 18 out of a possible 20 trading days, due to the New Year and MLK holidays falling on Mondays. Three more sessions to start the new week will conclude January trading.
Stocks have been the major story of the year thus far, along with the continued decline of the US dollar against other major currencies, especially the Yen, Euro and British Pound.
President Donald J. Trump returned from Davos over the weekend, preparing for his first State of the Unions address to congress on Tuesday night.
Also of note this week is the FOMC policy rate meeting of the Federal Reserve. While the Fed is not expected to raise key interest rates at this meeting, there's general impetus for a planned rate hike at the March meeting. The FOMC meets on Tuesday and Wednesday, January 30 and 31. The March meeting is March 20-21.
The week concludes with the January Non-farm Payroll release by the BLS on Friday, Feb. 2. The data release includes publication changes related to the annual sample review and the conversion to NAICS 2017.. Expectations will be high, given the explosive nature of the stock market and recent touting of strong economic growth by President Trump.
At the Close, Friday, January 26, 2018:
Dow: 26,616.71, +223.92 (+0.85%)
NASDAQ: 7,505.77, +94.61 (+1.28%)
S&P 500: 2,872.87, +33.62 (+1.18%)
NYSE Composite: 13,637.02, +124.36 (+0.92%)
For the Week:
Dow: +544.99 (+2.09%)
NASDAQ: +169.39 (+2.31%)
S&P 500: +62.57 (+2.23%)
NYSE Composite: +252.56 (+1.89%)
Making the gains all the more impressive is the fact that the month has seen only 18 out of a possible 20 trading days, due to the New Year and MLK holidays falling on Mondays. Three more sessions to start the new week will conclude January trading.
Stocks have been the major story of the year thus far, along with the continued decline of the US dollar against other major currencies, especially the Yen, Euro and British Pound.
President Donald J. Trump returned from Davos over the weekend, preparing for his first State of the Unions address to congress on Tuesday night.
Also of note this week is the FOMC policy rate meeting of the Federal Reserve. While the Fed is not expected to raise key interest rates at this meeting, there's general impetus for a planned rate hike at the March meeting. The FOMC meets on Tuesday and Wednesday, January 30 and 31. The March meeting is March 20-21.
The week concludes with the January Non-farm Payroll release by the BLS on Friday, Feb. 2. The data release includes publication changes related to the annual sample review and the conversion to NAICS 2017.. Expectations will be high, given the explosive nature of the stock market and recent touting of strong economic growth by President Trump.
At the Close, Friday, January 26, 2018:
Dow: 26,616.71, +223.92 (+0.85%)
NASDAQ: 7,505.77, +94.61 (+1.28%)
S&P 500: 2,872.87, +33.62 (+1.18%)
NYSE Composite: 13,637.02, +124.36 (+0.92%)
For the Week:
Dow: +544.99 (+2.09%)
NASDAQ: +169.39 (+2.31%)
S&P 500: +62.57 (+2.23%)
NYSE Composite: +252.56 (+1.89%)
Friday, January 26, 2018
Dow Soars
Really?
At the Close, Thursday, January 25, 2018:
Dow: 26,392.79, +140.67 (+0.54%)
NASDAQ: 7,411.16, -3.89 (-0.05%)
S&P 500: 2,839.25, +1.71 (+0.06%)
NYSE Composite: 13,512.66, +5.00 (+0.04%)
At the Close, Thursday, January 25, 2018:
Dow: 26,392.79, +140.67 (+0.54%)
NASDAQ: 7,411.16, -3.89 (-0.05%)
S&P 500: 2,839.25, +1.71 (+0.06%)
NYSE Composite: 13,512.66, +5.00 (+0.04%)
Wednesday, January 24, 2018
Stocks a Little Shaky As Dollar Plummets, Silver, Gold Soar
Chalk this up to various theories of unintended consequences.
Even the brilliant thinkers at the Federal Reserve are unable to explain the strange divergence of bonds and the dollar over the past number of weeks because that's not the way it's supposed to go.
With the Fed becoming more hawkish as they attempt to unwind literally trillions of dollars worth of bonds on their vast balance sheet, interest rates have risen, but the value of the dollar in relation to other major currencies has taken a noticeable hit, not just in the past few weeks, but for the better part of the past year.
The mighty US dollar was beaten like a trailer park hooker, down nearly one percent on the day per the dollar index, which, in the forex universe, is a pretty severe move.
Other currencies were the beneficiaries of the dollar demise, with the British pound up 2.4%, Japan's yen up nearly one percent, and the Aussie dollar gaining 0.90%.
Fueled by Treasury Secretary Steven Mnuchin's comments at the World Economic Forum in Davos, Switzerland, that a weaker dollar was good for US trade, currency pairs were traded with one thing in mind: dollar dumping.
Bonds, however, failed to play along, with the 10-year benchmark unchanged at 2.65% and both long and short-dated maturities moving less than a basis point.
Besides the currencies of nations not the United States, commodities were bid large, with WTI oil futures making another in a series of three-year highs and precious metals continuing a rally that began in December but had recently stalled.
Not so today, as silver led the way with a gain of over three percent, topping out at 17.70, the highest since breaking briefly over $18 per ounce in early September of 2017. From a technical perspective, silver has ripped through a long, declining resistance line dating back to its peak in 2011. A clear breakout holding above $17.50 would be a significant development for the world's most unappreciated asset.
Gold was also well-taken, finishing in New York up $16.80 (1.50%), at $1358.70 the ounce.
Stocks meandered along the unchanged line, ending split, with the Dow higher while the NASDAQ and S&P fell.
With many pension funds chartered to rebalance by month's end, the rapid rise of equities in the early days of the new year may be coming to a quick conclusion. Estimates range from $12 to $120 billion of stocks which must be sold and converted to bonds in the next week. If that's the case, it will take a concerted effort from the central bank cartel (who also may be selling into the weakness) to keep the stock bubble adequately inflated.
If there's a downside other than stocks taking a much-needed shave, it's that any decline in the stock market will be blamed on President Trump and his administration's tough currency and trade policies.
The President is set to address the assemblage at Davos on Friday, concluding this year's fete of economic manipulators and would-be statist social constructionists.
The President is expected to deliver remarks touting America's re-emergence as the world's greatest economic force.
At the Close, Wednesday, January 24, 2018:
Dow: 26,252.12, +41.31 (0.16%)
S&P 500: 2,837.54, -1.59 (-0.06%)
NASDAQ: 7,415.06, -45.23 (-0.61%)
Even the brilliant thinkers at the Federal Reserve are unable to explain the strange divergence of bonds and the dollar over the past number of weeks because that's not the way it's supposed to go.
With the Fed becoming more hawkish as they attempt to unwind literally trillions of dollars worth of bonds on their vast balance sheet, interest rates have risen, but the value of the dollar in relation to other major currencies has taken a noticeable hit, not just in the past few weeks, but for the better part of the past year.
The mighty US dollar was beaten like a trailer park hooker, down nearly one percent on the day per the dollar index, which, in the forex universe, is a pretty severe move.
Other currencies were the beneficiaries of the dollar demise, with the British pound up 2.4%, Japan's yen up nearly one percent, and the Aussie dollar gaining 0.90%.
Fueled by Treasury Secretary Steven Mnuchin's comments at the World Economic Forum in Davos, Switzerland, that a weaker dollar was good for US trade, currency pairs were traded with one thing in mind: dollar dumping.
Bonds, however, failed to play along, with the 10-year benchmark unchanged at 2.65% and both long and short-dated maturities moving less than a basis point.
Besides the currencies of nations not the United States, commodities were bid large, with WTI oil futures making another in a series of three-year highs and precious metals continuing a rally that began in December but had recently stalled.
Not so today, as silver led the way with a gain of over three percent, topping out at 17.70, the highest since breaking briefly over $18 per ounce in early September of 2017. From a technical perspective, silver has ripped through a long, declining resistance line dating back to its peak in 2011. A clear breakout holding above $17.50 would be a significant development for the world's most unappreciated asset.
Gold was also well-taken, finishing in New York up $16.80 (1.50%), at $1358.70 the ounce.
Stocks meandered along the unchanged line, ending split, with the Dow higher while the NASDAQ and S&P fell.
With many pension funds chartered to rebalance by month's end, the rapid rise of equities in the early days of the new year may be coming to a quick conclusion. Estimates range from $12 to $120 billion of stocks which must be sold and converted to bonds in the next week. If that's the case, it will take a concerted effort from the central bank cartel (who also may be selling into the weakness) to keep the stock bubble adequately inflated.
If there's a downside other than stocks taking a much-needed shave, it's that any decline in the stock market will be blamed on President Trump and his administration's tough currency and trade policies.
The President is set to address the assemblage at Davos on Friday, concluding this year's fete of economic manipulators and would-be statist social constructionists.
The President is expected to deliver remarks touting America's re-emergence as the world's greatest economic force.
At the Close, Wednesday, January 24, 2018:
Dow: 26,252.12, +41.31 (0.16%)
S&P 500: 2,837.54, -1.59 (-0.06%)
NASDAQ: 7,415.06, -45.23 (-0.61%)
Revenge of the Gold (and Silver) Bugs As Dollar Crashes
Stocks may be hurtling towards infinity and beyond, but the long-suffering holders of gold and silver are about to be rewarded for their patience and prescience.
Overnight, the dollar index breached the 90 level to the downside extending the trend which saw the dollar lose the most value in 14 years in 2017.
As the dollar falls, gold and silver can do nothing but appreciate in dollar terms, and with Treasury Secretary Steven Mnuchin speaking out in favor of a weaker dollar, the trend seems set to accelerate.
Meanwhile, the US Postal Service continues to cater to the Amazons of the world by hiking postage rates (particularly to retail and the lowest tier of commercial rates, Commercial Base) and punish small business.
Likewise, cell carrier Verizon continues to throttle the speeds of users of its "unlimited" bandwidth service in spite of regulations and court rulings which forbid the practice.
The corrupt news media continues to taunt the public with stories that President Trump is about to be grilled by special prosecutor Robert Mueller in the "Russiagate" probe, while all along the true traitors are still employed by the FBI and Department of Justice.
It seems that the tree of liberty is ready to be to be quenched again.
At the Close, Tuesday, January 23, 2018:
Dow: 26,210.81, -3.79 (-0.01%)
NASDAQ: 7,460.29, +52.2568 (+0.7054%)
S&P 500: 2,839.13, +6.16 (+0.22%)
NYSE Composite: 13,474.11, +3.74 (+0.03%)
Overnight, the dollar index breached the 90 level to the downside extending the trend which saw the dollar lose the most value in 14 years in 2017.
As the dollar falls, gold and silver can do nothing but appreciate in dollar terms, and with Treasury Secretary Steven Mnuchin speaking out in favor of a weaker dollar, the trend seems set to accelerate.
Meanwhile, the US Postal Service continues to cater to the Amazons of the world by hiking postage rates (particularly to retail and the lowest tier of commercial rates, Commercial Base) and punish small business.
Likewise, cell carrier Verizon continues to throttle the speeds of users of its "unlimited" bandwidth service in spite of regulations and court rulings which forbid the practice.
The corrupt news media continues to taunt the public with stories that President Trump is about to be grilled by special prosecutor Robert Mueller in the "Russiagate" probe, while all along the true traitors are still employed by the FBI and Department of Justice.
It seems that the tree of liberty is ready to be to be quenched again.
At the Close, Tuesday, January 23, 2018:
Dow: 26,210.81, -3.79 (-0.01%)
NASDAQ: 7,460.29, +52.2568 (+0.7054%)
S&P 500: 2,839.13, +6.16 (+0.22%)
NYSE Composite: 13,474.11, +3.74 (+0.03%)
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