Retail Sales Improve In March, Stocks Respond

Apparently, Amazon hasn't killed all of Main Street just yet.

After three straight monthly declines, US retail sales rose in March by 0.6%, beating consensus forecasts, with Americans spending more on big-ticket items.

Following a drop of 0.1% in February and a revised -0.2% in January, consumers stepped up to the plate in March, boosting hopes that the economic expansion would continue. Year-over-year, retail sales improved by 4.5%.

While those figures are encouraging, they're likely not much more than inflation, which, depending on where one resides and what one spends money upon, could be as high as 6-8% according to anecdotal reports. Other, more frugal consumers routinely report lower costs for food, though rent, gasoline, mortgage interest, health care, education, and taxes in general have been on the rise.

On the earnings front, Bank of America reported smashing numbers, with EPS up 51% to 62 cents a share versus the prior quarter. Adjusted revenue rose nearly four percent, to $23.1 billion, but the stock barely budged on the news, up just 13 cents (0.44%) to 29.93. While banking is back to being less risky after washing out all the bad debt from the sub-prime catastrophe, investors are still skeptical of the large banks, especially after revelations of many misdeeds at Wells-Fargo.

Banks like JP Morgan Chase, which has a better focus on wealth management, have fared better than standard retail operations such as BofA.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19
4/5/18	24,505.22	+240.92	+402.11
4/6/18	23,932.76	-572.46	-170.35
4/9/18	23,979.10	+46.34	-134.01
4/10/18	24,407.86	+428.76	+294.66
4/11/18	24,189.45	-218.55	+76.11
4/12/18	24,483.05	+293.60	+369.71
4/13/18	24,360.14	-122.91	+247.80
4/16/18	24,573.04	+212.90	+460.70

At the Close, Monday, April 16, 2018:
Dow Jones Industrial Average: 24,573.04, +212.90 (+0.87%)
NASDAQ: 7,156.28, +49.63 (+0.70%)
S&P 500: 2,677.84, +21.54 (+0.81%)
NYSE Composite: 12,628.21, +82.16 (+0.65%)

Stocks Close Out Week on Sour Note, But Still Post Weekly Gains

For the superstitious, Friday the 13th was not a disaster, but it wasn't particularly pleasant either, as stocks spent the entire session underwater, unable to follow through on gains from the previous day.

The up-and-down, give-and-take between bulls and bears has been a feature of the equity markets since late January. Thus far in April, the Dow has finished with gains in six session, closing down in four. An overview of the market presents a picture of a market without direction, as geo-political events, fundamental conditions, and economic data collide.

Being the middle of earnings season, the bulls appear to have at least a short-term advantage, especially since the US - along with France and Great Britain - chose to launch targeted attacks on Syria late Friday, giving markets ample time to digest the ramifications, which, at this point, appear limited.

Heading into the third full week of the second quarter, earnings from top companies will provide the catalyst for traders. There's a widely-held assumption that companies are going to put up good - if not great - first quarter reports, aided by tax benefits from the overhaul provided by congress and the president in December.

This would be a good week to take account of positions and perhaps take some profits off the table. Markets tend to be a little less volatile and generally trade higher during earnings seasons.

There isn't a FOMC rate policy meeting during April, and the May 1-2 meeting is probably going to result in no action being taken. The next Fed-driven stock market move won't be until the June 12-13 affair, when the Fed is expected to raise the federal funds rate another 25 basis points. While it doesn't sound like much, it will be the seventh such hike since the Fed got off the zero-bound in December 2015. It will push the rate to 1.75-2.00%, a significant figure sure to have an impact not only on stocks, but on the finances of individuals, families, businesses and governments.

Presently, this is the proverbial calm before the storm.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19
4/5/18	24,505.22	+240.92	+402.11
4/6/18	23,932.76	-572.46	-170.35
4/9/18	23,979.10	+46.34	-134.01
4/10/18	24,407.86	+428.76	+294.66
4/11/18	24,189.45	-218.55	+76.11
4/12/18	24,483.05	+293.60	+369.71
4/13/18	24,360.14	-122.91	+247.80

At the Close, Friday, April 13, 2018:
Dow Jones Industrial Average: 24,360.14, -122.91 (-0.50%)
NASDAQ: 7,106.65, -33.60 (-0.47%)
S&P 500: 2,656.30, -7.69 (-0.29%)
NYSE Composite: 12,546.05, -34.17 (-0.27%)

For the Week:
Dow: +427.38 (+1.79%)
NASDAQ: +191.54 (+2.77%)
S&P 500: +51.83 (+1.99%)
NYSE Composite: +196.94 (+1.59%)

Blackrock, Delta Boost Stocks; Dow Gaining Momentum As Syria Threat Fades

26,616.71

That's the only number any macro investor needs to know. That was the January 26 all-time high on the Dow.

Since that time, the world's most widely-followed stock index has fallen on some lean times, and getting back to its level days of glory isn't going to be easy, if at all possible over the near term.

Today was an effort to allay the fears of those looking at their 401k statements from the first quarter, which showed losses, possibly, for many, for the first time in years, perhaps as long as nine years.

Stocks continued to ramp higher throughout the day without any discernible news other than the usual flow of corporate earnings reports, most of which were positive, and the thought that President Trump won't actually send missiles into Syria. The tail is truly wagging the dog on this one.

The gain today on the Dow was close to 300 points. Putting that in perspective, if the Dow was to go straight up at the rate of 300 points per day, it would only take seven trading days to get back to the all-tme high.

But, how likely is that?

Not very.

What is likely is that the Dow will continue to gain through the month, as corporate earnings continue to fuel a rally, as visceral and fleeting as that may be. Something negative will come along to upset the status quo, as it usually doesn't, but investors are keen to ignore the negative and trade on the positive. That's because everybody likes to be positive, whether the reality supports it or not.

Examining a couple of representative corporate earnings reports, Delta (DAL) and Blackrock (BLK) stood out, both reporting before the bell.

Delta gained 74 cents per share, down from 77 cents a year ago. The stock gained 1.51 points (+2.93%). That's some wishful thinking there. The company is in the midst of a $5 billion stock repurchase, begun just over a year ago and scheduled to be completed by 2020. Putting this most-recent quarter in perspective, the company's EPS would be declining if the number of shares outstanding had held steady.

Blackrock was expected to hit 6.39 per share. The New York-based company's net income rose to $1.09 billion, or $6.68 per share, in the first quarter, up 28 percent from the year-ago period.

Adjusted for special items, BlackRock earned $6.70 per share. They have money (yours) and know how to put it to good use. The stock was up 7.70 (+1.47%) on the day. Blackrock executives - including CEO Larry Fink - are Washington and Fed insiders, expert at employing the most extreme accounting tactics, thus making up extraordinary investment opportunities. They are hardly saints, but they are well-protected.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19
4/5/18	24,505.22	+240.92	+402.11
4/6/18	23,932.76	-572.46	-170.35
4/9/18	23,979.10	+46.34	-134.01
4/10/18	24,407.86	+428.76	+294.66
4/11/18	24,189.45	-218.55	+76.11
4/12/18	24,483.05	+293.60	+369.71

At the Close, Thursday, April 12, 2018:
Dow Jones Industrial Average: 24,483.05, +293.60 (+1.21%)
NASDAQ: 7,140.25, +71.22 (+1.01%)
S&P 500: 2,663.99, +21.80 (+0.83%)
NYSE Composite: 12,580.22, +65.63 (+0.52%)

Stocks Continue See-Saw Movement After Outrageously Mindless Fed Minutes

As mentioned yesterday, sharp one-day gains (Dow was up 428 points on Tuesday) should be discounted, since a clear sign of a bear market was issued by the Dow Transportation Index on Monday.

That should be the overriding theme with any and all sharp moves higher (+1.00% or more), or, in more pedestrian terms, we've moved from Buy The Dip to Sell The Rip because there is little confidence amongst traders at this juncture.

Since this is also the heart of earnings season, expect some individual stocks to outperform and those with influence may help carry the market higher. Consensus is for very strong first quarter earnings reports and there is little reason to believe that they won't be good, though probably not as good as many are hoping.

From today's activity, it's clear that there is no follow-though on commitments by traders as the major indices were uniformly in the red today. The Dow Industrials are now clinging to a mere 76-point gain for the month, barely out of correction territory, following a first quarter that was a loser. Prospects for a second quarter rebound in the stock market appear to be increasingly slim and built on false hope from an equally false narrative.

It's also quite evident that the Federal Reserve System presidents and FOMC governors are either blind, stupid, or deceitful, because in the minutes from the March meeting - released today - they were unanimous in their opinion that the economy was improving and that inflation was growing when the actual condition only mildly supports either viewpoint. Outside the rose-colored offices of the Eccles Building it's easy to see a squeezed middle class, cities that are beginning to look more like third-world sh--holes, complete with tent encampments, than the modern, urban paradise the Fed imagines.

Additionally, with individuals and families tapped out and heavily in debt, price pressure is almost nowhere to be found, except at the gas pump and the local, state, and federal tax offices.

The economy is made of mostly smoke and mirrors, built on mountains of debt.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19
4/5/18	24,505.22	+240.92	+402.11
4/6/18	23,932.76	-572.46	-170.35
4/9/18	23,979.10	+46.34	-134.01
4/10/18	24,407.86	+428.76	+294.66
4/11/18	24,189.45	-218.55	+76.11

At the Close, Wednesday, April 11, 2018:
Dow Jones Industrial Average: 24,189.45, -218.55 (-0.90%)
NASDAQ: 7,069.03, -25.27 (-0.36%)
S&P 500: 2,642.19, -14.68 (-0.55%)
NYSE Composite: 12,514.62, -51.35 (-0.41%)

Trends Take Time; Why Tuesday's Sharp Gains Should Be Discounted

Less than 24 hours after making the bold proclamation that the bull market was over, Wall Street traders seem to disagree, sending the Dow Industrials up nearly 400 points at the open, with the Transportation Index cruising 130 points to the upside when the bell rang to start trading.

Days like this are precisely why investing is a longer-term proposition. Markets can turn on a dime, on a word from some prominent investor (see: Warren Buffett), a Fed President, a presidential tweet or even something more innocuous, like the trade balance (a new record, ignored), or jobs data (a bad miss on Friday, not ignored).

It's imperative to maintain perspective and not question what your own eyes told you a day ago, a week ago a month ago. In fact, for the Dow Theory components to finally trigger a sell signal took nearly three months from start to finish, all that time merely suggesting something ominous, before finally saying, "yes, here it is."

Tuesday's massive bounce contained no earth-shattering qualities in and of itself. The way the markets have been performing of late, one could hypothesize an equally violent downturn on Wednesday, Thursday, or Friday, though it appears the bulls are discounting the Dow Theory as a false flag for now. One wonders what the perma-bulls will be eating come June - steak tartar or boiled crow?

Instead of taking a short-term approach and admitting one was/is wrong, it's likely a better plan to look back at the charts and see exactly where the Dow Jones Industrial Average has to go before making a judgement on the efficaciousness of Dow Theory. I's a simple number: 26,616.71, the high from January 26, and the Transportation Index would have to close above 11,373.38, the all-time high from January 12.

Those numbers are far away, so the test will come over the coming weeks of earnings releases, when Wall Street and the financial news-speakers on CNBC, Bloomberg, and Fox Financial Network will be falling over each other to proclaim the greatness of the latest "beat." Bear in mind that all of these funny numbers coming out over the next three weeks, especially the EPS (earnings per share) figures, have all been manipulated by stock buybacks, diluting the number of shares outstanding, and in many cases, by lowered expectations by analysts. The true comparisons can be found from year-ago EPS (i.e., growth) and gross revenue numbers.

So, despite the snorting of the bull for a day, reserving judgement on a dead-cat, one-day wonder of a rally may be not only prudent, but prescient.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19
4/5/18	24,505.22	+240.92	+402.11
4/6/18	23,932.76	-572.46	-170.35
4/9/18	23,979.10	+46.34	-134.01
4/10/18	24,407.86	+428.76	+294.66

At the Close, Tuesday, April 10, 2018:
Dow Jones Industrial Average: 24,407.86, +428.76 (+1.79%)
NASDAQ: 7,094.30, +143.96 (+2.07%)
S&P 500: 2,656.85, +43.69 (+1.67%)
NYSE Composite: 12,575.63, +195.08 (+1.58%)