Dow Jumps As Factory Orders Slump

Fast on the heels of four straight triple-digit moves from the prior week, the Dow Jones Industrial Average shot up 178 points to open the week and put the month of June solidly in the green, Monday's move happening on absolutely no news whatsoever.

If anything, data was poor, as factory orders slowed in April, down 0.8% after jumping a revised 1.7% in March, according to the Commerce Department.

Recent data has only served to confirm that the US economy is operating just beyond stall speed. All of the hoopla over tax cuts, President Trump's crowing over the jobs numbers and growing economy reinforces the growth narrative which has failed to reach much of mainstream America, especially those in the lower economic rungs.

While corporate profits may continue to surprise, it's suspected that very few homeless people own stocks or bonds. It's the forgotten part of the economic landscape that continues to be forgotten. Starting a business is still a dicey undertaking in the US, due mostly to onerous laws and regulations from the federal government on down to the local level.

Still, according to official statistics, the economy is chugging along, though the metrics employed to record and track the economy are antiquated and do not take into account the odious debt overhanging all aspects of American industry. When one takes into consideration all the borrowed money going into what comprises such data as GDP, the only conclusion is that the American experience continues to be goosed higher by ever-increasing government, business and individual borrowing.

What keeps economists and investors up late at night is the memory of 2008, when a global liquidity crisis sent the global economy to its knees. That kind of nagging worry will prove to keep a lid on excessive speculation. Renewed attention to risk aversion has been keeping the stock markets within a range for the last three months running and is likely to do so going forward.

Date	Close	Gain/Loss	Cum. G/L
6/1/18	24,635.21	+219.37	+219.37
6/2/18	24,813.69	+178.48	+397.85

At the Close, Monday, June 4, 2018:
Dow Jones Industrial Average: 24,813.69, +178.48 (+0.72%)
NASDAQ: 7,606.46, +52.13 (+0.69%)
S&P 500: 2,746.87, +12.25 (+0.45%)
NYSE Composite: 12,673.91, +53.08 (+0.42%)

Weekend Wrap: May Ends Dull, Jobs Data Sends Stocks Higher 1st of June

The see-sawing of the markets continued for another week ending in bifurcated manner, with the Dow and NYSE Composite suffering losses while the S&P and NASDAQ posted gains.

In particular, the Dow has seen 12 weeks with positive results, versus 10 weeks of losses, resulting in a relatively flat index, down a mere 84.01 points since the 2017 year-end close (December 29) of 24.719.22, the gains all made in January, when the Dow topped out at 26,616.71 on January 26. The losses were mostly confined to the correction in February and another poor showing in March. April and May both were positive for the Dow, though those small gains still leave the index nearly 2000 points below the all-time high.

Two stocks - Boeing (BA) and Apple (AAPL) have kept the Dow from sliding back into correction territory. Since April 30, Apple gained 15%, Boing added 23 points, or about seven percent, though both stocks have basically flatlined since mid-month.

On the holiday-shortened week, the Dow recorded losses on Tuesday and Thursday (May 31), and gains on Wednesday and Friday (June 1), the latter upswing largely attributable to the better-than-expected June non-farm payroll release, getting the new month off to a flying start.

As has been evident since the February and March selloffs, this has become a trader's market, with individual stocks and sectors favored over pure index plays. All of the major averages have gravitated around their respective 50 and 200-day moving averages, the divergences seldom taking any of them far above or below those critical lines of support and/or resistance.

With summer coming on fast, volume continues to wither away, with select stocks getting the bulk of the trading action. Bullish deniers of the Dow Theory change from April will be hard-pressed to make much of a case for buying stocks during the hot weather, as the Dow's all-time high fades farther and farther away.

Dow Jones Industrial Average June Scorecard:

Date	Close	Gain/Loss	Cum. G/L
6/1/18	24,635.21	+219.37	+219.37

At the Close, Friday, June 1, 2018:
Dow Jones Industrial Average: 24,635.21, +219.37 (+0.90%)
NASDAQ: 7,554.33, +112.21 (+1.51%)
S&P 500: 2,734.62, +29.35 (+1.08%)
NYSE Composite: 12,620.83, +93.69 (+0.75%)

For the Week:
Dow: -117.48 (-0.48%)
NASDAQ: +120.48 (+1.62%)
S&P 500: +13.29 (+0.49%)
NYSE Composite: -14.12 (-0.11%)

Dow Gains One Percent in May; Remains Lower for the Year

Taken alone, May's one percent gain is appealing, given that repetition of that result for each month of the year would produce a 12% annual return, a desirable outcome for just about any investor.

Alas, the stock market is not a linear construct, nor is it without risk. The 13 sessions which showed gains were offset largely by nine days down. May 5th's gain of +332.36 (the best single day of the month) was overshadowed by the May 29 decline of 391.64 points, the largest drop of the month and the biggest decline since the Dow lost 572.46 points on April 6.

Despite the second straight month of gains, the Dow remains lower for the year, though marginally. The Industrials closed at 24,719.22 on December 29, 2017, and the close on May 31 of 24,415.84 is still more than one percent below that level and 2200 points away from the January 23 high of 26,616.71.

Contributing to the less-than-inspiring returns for the month were factors such as political turmoil stemming from the ongoing "Russiagate" investigation of President Trump, his administration and the operatives who helped him get elected in 2016. Also on the downside, the imposition or threat of tariffs on imports from China, and lately, from trading partners Mexico, Canada, and the European Union.

Hanging over the market is the specter of a bear market, which was technically triggered on April 9, when the Dow Transportation Index confirmed the downside shift of the Industrials two months prior.

The positives were less abundant. Low unemployment gives a boost to spirits, but is offset by companies complaining that they cannot fill positions and labor pay that remains stagnant. The on-again, off-again talks with North Korea helps underpin the market, but the president's effort to denuclearize the Korean peninsula has been fraught with complaints from his opponents and outside meddling.

Claims that GDP is improving are marginal, with the second estimate of the first quarter recently lowered from 2.3% growth to 2.2%.

Investors get credit for holding the proverbial line against further losses, such as those suffered in February and March, though one has to wonder if they are pushing on a string in their efforts to keep an overinflated market afloat on a sea of debt and doubt.

With the year nearly half done, a minus sign in front off the Dow year-to-date returns is an ominous sign that 2018 is shaping up as something radically different than last year's outsized gains.

Dow Jones Industrial Average May Scorecard:

Date	Close	Gain/Loss	Cum. G/L
5/1/18	24,099.05	-64.10	-64.10
5/2/18	23,924.98	-174.07	-238.17
5/3/18	23,930.15	+5.17	-233.00
5/4/18	24,262.51	+332.36	+99.36
5/7/18	24,357.32	+94.81	+194.17
5/8/18	24,360.21	+2.89	+197.06
5/9/18	24,542.54	+182.33	+379.39
5/10/18	24,739.53	+196.99	+576.38
5/11/18	24,831.17	+91.64	+668.02
5/14/18	24,899.41	+68.24	+736.26
5/15/18	24,706.41	-193.00	+543.26
5/16/18	24,768.93	+62.52	+605.78
5/17/18	24,713.98	-54.95	+550.73
5/18/18	24,715.09	+1.11	+551.84
5/21/18	25,013.29	+298.20	+850.04
5/22/18	24,834.41	-178.88	+671.16
5/23/18	24,886.81	+52.40	+723.56
5/24/18	24,811.76	-75.05	+648.51
5/25/18	24,753.09	-58.67	+589.84
5/29/18	24,361.45	-391.64	+198.20
5/30/18	24,667.78	+306.33	+504.53
5/31/18	24,415.84	-251.94	+252.59

At the Close, Thursday, May 31, 2018:
Dow Jones Industrial Average: 24,415.84, -251.94 (-1.02%)
NASDAQ: 7,442.12, -20.34 (-0.27%)
S&P 500: 2,705.27, -18.74 (-0.69%)
NYSE Composite: 12,527.14, -98.73 (-0.78%)

Going Nowhere Fast: Stock Churning a Wall Street Tool; Buy the Dip, Sell the Rip

Denial is NOT a river in Egypt, but, those who wish to traverse their world wearing blinders, colored glasses or even virtual reality goggles have been observed in the general vicinity of Wall and Broad Streets in lower Manhattan and their numbers are growing.

Stocks staged a strong dead cat bounce rally after three straight days of losses, the largest being Tuesday's nearly 400-point loss on the Dow Industrials that had the world shaking on stories of disunity and anti-EU behavior coming out of Italy.

Of course, in the United States, Italy, despite being the world's ninth largest economy (hard to imagine that) is taken as something of an outlier, as in "not our problem," so stocks were sent skyward by idle speculators, offsetting the mechanical smart money distribution that has been a feature of the markets since late January.

Just in case the recovery narrative is not taken seriously, the stock jockeys still have plenty of equities to alternatively pump, dump or hold, depending on the circumstance of the day. The bulls are attempting to extend the long bull market to ten years when in fact it ended - almost to the day - at nine years and one month, on April 9, 2018.

Since then, the Dow (and largely the other major averages) have travelled in a pretty tight range. On April 9, the Dow closed at 23,979.10, going as low since then to 23,924.98 (May 2) and as high as 25,013.29 (May 21). That 1088 point range (roughly 4%) has persisted for some seven weeks and shows no sign of breaking out anytime soon.

With May looking like a good bet to produce positive returns in the range of 300-650 points (Thursday is the final trading day of the month), the players in this Broadway-stlyed farce should be patting each others backs vigorously for a job well done, the losses of February and March now overshadowed by the plus signs for April and May.

All the bad stuff - like Wednesday's lowered first quarter GDP estimate to 2.2% from 2.3% or the weak ADP payroll report (178,000 May jobs) is, according to the churning crowd, behind us and it's roses and unicorns from here to eternity.

Naturally, anyone with a handful of functioning brain cells knows that the government and media are conspiring to deliver all manner of propaganda - from Russian collusion and election interference to "tight" employment conditions when 93 million Americans do not work for a living - so any mention of good times should probably not be taken too seriously.

The truth is somewhere in between what the government and media spoon-feed and wha tone sees and hears with one's own eyes and ears. The economy isn't great, nor is it about to collapse, though, admittedly, it's been 10 years since the last recession, so "bad times" are pretty much overdue. Unless one is conditioned to a Pavlovian reaction to headlines, such as the algorithms that drive market activity are, seeing the markets bouncing in a tight range should be cause for at least some caution, especially since that range is well below the last market high (26,616.71, Jan. 26).

The last trading day of the month shouldn't be anything notable as far as volatility is concerned, unless May's non-farm payroll numbers (due out Friday, June 1) are not pleasant and leaked. Even then, the rangebound Dow will remain.

And the deniers of a bear market will still be in denial.

Dow Jones Industrial Average May Scorecard:

Date	Close	Gain/Loss	Cum. G/L
5/1/18	24,099.05	-64.10	-64.10
5/2/18	23,924.98	-174.07	-238.17
5/3/18	23,930.15	+5.17	-233.00
5/4/18	24,262.51	+332.36	+99.36
5/7/18	24,357.32	+94.81	+194.17
5/8/18	24,360.21	+2.89	+197.06
5/9/18	24,542.54	+182.33	+379.39
5/10/18	24,739.53	+196.99	+576.38
5/11/18	24,831.17	+91.64	+668.02
5/14/18	24,899.41	+68.24	+736.26
5/15/18	24,706.41	-193.00	+543.26
5/16/18	24,768.93	+62.52	+605.78
5/17/18	24,713.98	-54.95	+550.73
5/18/18	24,715.09	+1.11	+551.84
5/21/18	25,013.29	+298.20	+850.04
5/22/18	24,834.41	-178.88	+671.16
5/23/18	24,886.81	+52.40	+723.56
5/24/18	24,811.76	-75.05	+648.51
5/25/18	24,753.09	-58.67	+589.84
5/29/18	24,361.45	-391.64	+198.20
5/30/18	24,667.78	+306.33	+504.53

At the Close, Wednesday, May 30, 2018:
Dow Jones Industrial Average: 24,667.78, +306.33 (+1.26%)
NASDAQ: 7,462.45, +65.86 (+0.89%)
S&P 500: 2,724.01, +34.15 (+1.27%)
NYSE Composite: 12,625.87, +183.18 (+1.47%)

Will May End With A Bang Or A Thud? Italy And Tommy Robinson Creating European Chaos

Following a three-day weekend, US markets caught up to the panic that was gripping Europe, adding onto the global rout in stocks by sending the Dow Jones Industrials lower by nearly 400 points.

Tuesday's big fallout left the Dow's gains for the month at great risk. The Industrial Average was close to erasing all of May's gains before a late-stage rally brought the index back up by 147 points into the close.

With only two trading days left in the month, May looks to follow April with a gain of less than one percent. April's total gain was a mere 50 points, following massive losses in February (-1120.19) and March (-926.09). With Europe's problems far from over (Italy being the main culprit), selling in May could turn out to be the most prudent - if not cliched - advice as global events are continuing to tarnish the shine on America's nascent economic rebirth.

Italians, struggling with immigration issues, have seen their government devolve into autocracy, as president Sergio Mattarella unilaterally quashed the creation of a right-leaning government coalition.

Chaos in Italy has sparked a run on bonds and European banks, spreading to stocks. On Tuesday, most of the major national exchanges saw losses in excess of one percent, adding onto previous declines.

News out of Britain also contributed to the sea of madness, as authorities arrested activist Tommy Robinson and immediately sentenced him to 13 months in prison, adding a media ban on his arrest and the pedophile grooming trial on which he was attempting to report. The unjustified jailing of Robinson has sparked outrage and rallies for his release throughout Britain and some European capitals.

Overarching political events are merely masking the underlying weakness in global markets which still seem incapable of forgetting the Great Financial Crisis of 2008 and Europe's own mini-crisis in 2011. Since little to nothing was done to correct the issues which plagued the world's largest economies, the past appears to have risen from the crypt and threatens to plunge economics and nations into another depressing episode.

With the Dow taking its worst loss in over a month, January 23rd's all-time high of 26,616.71 is now four months off in the fading distance. Bear market dynamics continue to drive a stake into the heart of the "recovery" narrative.

Date	Close	Gain/Loss	Cum. G/L
5/1/18	24,099.05	-64.10	-64.10
5/2/18	23,924.98	-174.07	-238.17
5/3/18	23,930.15	+5.17	-233.00
5/4/18	24,262.51	+332.36	+99.36
5/7/18	24,357.32	+94.81	+194.17
5/8/18	24,360.21	+2.89	+197.06
5/9/18	24,542.54	+182.33	+379.39
5/10/18	24,739.53	+196.99	+576.38
5/11/18	24,831.17	+91.64	+668.02
5/14/18	24,899.41	+68.24	+736.26
5/15/18	24,706.41	-193.00	+543.26
5/16/18	24,768.93	+62.52	+605.78
5/17/18	24,713.98	-54.95	+550.73
5/18/18	24,715.09	+1.11	+551.84
5/21/18	25,013.29	+298.20	+850.04
5/22/18	24,834.41	-178.88	+671.16
5/23/18	24,886.81	+52.40	+723.56
5/24/18	24,811.76	-75.05	+648.51
5/25/18	24,753.09	-58.67	+589.84
5/29/18	24,361.45	-391.64	+198.20

At the Close, Tuesday, May 29, 2018:
Dow Jones Industrial Average: 24,361.45, -391.64 (-1.58%)
NASDAQ: 7,396.59, -37.26 (-0.50%)
S&P 500: 2,689.86, -31.47 (-1.16%)
NYSE Composite: 12,442.69, -192.25 (-1.52%)