Another Blue Monday As Stocks Slammed Hard All Day; Techs Lead Losers

Whew!

This is becoming serious. Last week, when stock traders had a day off for observance of Veterans Day, the week opened with a 600-point loss. Today, the start of a new week, sees stocks tank to the tune of nearly 400 points.

It's not just the start of the week that's been bad of late, it's a recurring trend for the Dow and NASDAQ to slide by triple digits over the course of one session. The down days are beginning to add up, suggesting that something bigger is on the immediate horizon, and it's happening at a time which is usually a good one for stocks. November and December are among the better months for stock gains, though that doesn't look to be the case this season (Is it too early to say "Happy Holidays?").

Most of the selling on Monday came early. Shortly after noon in New York, the Dow had already shed more than 60 points. For the remainder of the session the blue chip index bounced around in a 100-point range, as some tepid buying emerged, though there was not wide enough commitment to keep stocks from near the lows of the day.

Faring even worse was the NASDAQ, which lost more than 100 points for the eighth time in the past seven weeks. In for particular harsh treatment are, and have been, tech stocks. It seems as though any company with a CEO under 40 or with any connection to computers or the internet has been targeted for extermination.

Here are some of the more notable Silicon Valley names on the Wall Street hit list:

• Facebook: hit a high of 217 in July, closed today at 131.55.
• Alphabet (Google): August 29: 1,249.30; Today: 1,020.00
• Netflix: August 30: 370.98; Today: 270.60
• Apple: September 4: 227.57; Today: 185.86
• Nvidia: September 4: 283.70; Today: 144.70
• Amazon: August 31: 2,012.71; Today: 1,512.29

These stocks were among the leaders during the long run-up from 2016 and prior. Now they are the loss-leaders. Amazon's peak is of interest because that was also the day the NASDAQ finished what looks like a pretty solid double top. It closed on August 29 at 8109.69 and on the 31st at 8109.54. It's been downhill since, the NASDAQ sporting a 13% decline since then.

Nobody knows exactly where this is all going, but, from recent market action, it looks to be headed to a not very nice place.

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98
11/2/18	25,270.83	-109.91	+155.07
11/5/18	25,461.70	+190.87	+345.94
11/6/18	25,635.01	+173.31	+519.25
11/7/18	26,180.30	+545.29	+1064.54
11/8/18	26,191.22	+10.92	+1075.46
11/9/18	25,989.30	-201.92	+873.54
11/12/18	25,387.18	-602.12	+271.42
11/13/18	25,286.49	-100.69	+170.27
11/14/18	25,080.50	-205.99	-35.72
11/15/18	25,289.27	+208.77	+173.05
11/16/18	25,413.22	+123.95	+297.00
11/19/18	25,017.44	-395.78	-98.78

At the Close, Monday, November 19, 2018:
Dow Jones Industrial Average: 25,017.44, -395.78 (-1.56%)
NASDAQ: 7,028.48, -219.40 (-3.03%)
S&P 500: 2,690.73, -45.54 (-1.66%)
NYSE Composite: 12,280.91, -119.37 (-0.96%)

Weekend Wrap: Myopic Markets Ignoring Broader, Global Issues

Extending declines from last Friday, stocks took a severe nose-dive on Monday and the carnage continued through to Wednesday, with the first three days of the week wiping out most, if not all market gains from earlier in the month.

The Dow Industrials were hit hardest. Even with winning sessions on Thursday and Friday to close out the week, the blue chips ended with one of the more serious declines of the year, a solid 2.22% rip. Though tech stocks were blamed for most of the drop, the price declines in oil and most of the other components contributed to send Dow stocks lower, as the price of WTI crude hit a year-old bottom on Wednesday before recovering the final two days of the trading week.

Chevron (CVX) and ExxonMobil (XOM), the two energy components in the Dow 30, took it on the chin early in the week, but Chevron actually finished the week about where it started and ExxonMobil ended the week down just two points, or, about 2.5%.

Apple (AAPL) was a big driver to the downside, down nearly five percent at week's end, though it was off about nine percent at the close on Wednesday. The early part of the week saw selling contributions from most of the component stocks and slight recoveries in the latter stages.

Once again, volatility was notable and seems not to be slacking. The widely-watched VIX popped well over 20 as the week progressed, but settled back in the high teems, closing at 18.14 on Friday. That is still an elevated level over the complacency of the past few years, which saw the VIX hanging solidly in the 10-13 range for extended periods.

On the international front, the usual knee-jerking on every utterance, press release, or rumor surrounding a trade deal-or-no-deal between the US and China continued. It's being set up as a foil to be used by the financial press to explain every up-and-down in markets, when in fact, trade with China is much less an issue than say, the Fed's relentless interest rate increases or the possibility of a looming Eurozone-wide recession.

Industrial production in Europe was anemic in the third quarter, with increases of 0.3, 1.1, and 0.9 for July, August and September. As compared to the same quarter in the prior year, the average of 0.77 is dwarfed by 2017's average of four percent. Such a huge decline cannot be taken lightly, though it is rarely - if ever - mentioned in US financial coverage. Contributing to the growing concerns in Europe is the recent Brexit proposal put up by Prime Minister Theresa May's administration. The deal was met with considerable resistance in the House of Commons and prompted some high-level resignations from May's cabinet. Chances of a deal being worked out for an orderly exit from the European Union are being viewed as iffy at best.

While Europe will live or die largely by its own restrictive and stifling internal policies, China and the United States should continue to roll right along, regardless of whether a deal is struck between the two countries. The next meeting between President Trump and china's president, Xi Jinping, is upcoming soon. The two leaders are reportedly planning to discuss trade as a side event at the next G20 meeting in Buenos Aires on November 30, but the two largest national economies in the world aren't about to be sidetracked by tariffs. China's growth is already slowing, but they have broad international initiatives beyond the United States. Ditto for the US, as President Trump extricates the country from one-sided trade deals that were the result of globalization efforts from previous administrations.

Putting the week into perspective, US equity markets are still generally myopic, ignorant of issues elsewhere in the world, though that may be changing. Many US companies are dynamic and have global footprints, so that, if other parts of the planet are suffering, the US, while somewhat insulated, is not completely immune. US expansion has been long, though not deep, but the housing market has peaked and is slowing and unemployment cannot stay at its current sweet spot indefinitely. Tech appears the weakest link presently, though its weakness is not pronounced. Stocks continue to vacillate, but are closer to recent lows than highs.

Recent trends have seen selling into rallies and quick rises off obvious inflection points. Even with what are still somewhat easy credit conditions and stock buybacks at elevated levels, stocks are failing to reach higher, the condition looking more like exhaustion rather than capitulation. Such a condition may take more than a few weeks or months to resolve. In the meantime, traders aren't seriously committed to positions.

Sentiment remains neutral with a slight downside bias.

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98
11/2/18	25,270.83	-109.91	+155.07
11/5/18	25,461.70	+190.87	+345.94
11/6/18	25,635.01	+173.31	+519.25
11/7/18	26,180.30	+545.29	+1064.54
11/8/18	26,191.22	+10.92	+1075.46
11/9/18	25,989.30	-201.92	+873.54
11/12/18	25,387.18	-602.12	+271.42
11/13/18	25,286.49	-100.69	+170.27
11/14/18	25,080.50	-205.99	-35.72
11/15/18	25,289.27	+208.77	+173.05
11/16/18	25,413.22	+123.95	+297.00

At the Close, Friday, November 16, 2018:
Dow Jones Industrial Average: 25,413.22, +123.95 (+0.49%)
NASDAQ: 7,247.87, -11.16 (-0.15%)
S&P 500: 2,736.27, +6.07 (+0.22%)
NYSE Composite: 12,400.28, +38.76 (+0.31%)

For the Week:
Dow: -576.08 (-2.22%)
NASDAQ: -159.03 (-2.15%)
S&P 500: -44.74 (-1.61%)
NYSE Composite: -137.25 (-1.09%)

Dip-Buyers Send Stocks Off Fresh Lows; Cory Booker, Poster Boy For Peak Stupidity

As stocks touched down on some key support levels, investors took the initiative to load up on what they perceived as undervalued shares, sending stocks off morning lows to afternoon highs, with NASDAQ dumb money leading the charge higher.

The major indices were under pressure early in the session, dropping to levels at which the year began, wiping out nearly all of the gains since last December. Call it coincidence or a propensity for chart-watching dip-buying, but there was no other catalyst to Thursday's mini-rally other than valuations.

On the downside, Britain seems to be completely flummoxed by ongoing Brexit negotiations, with resignations in Prime Minister Theresa May's cabinet over the compromise deal presented to the House of Commons this week. Rumors of a no confidence vote are circulating as the Brexit issue continues to derail any progress England can make in extricating itself from the European Union. The referendum, passed in early 2016, called for an exit by March of 2019, though that date now appears less certain. The issues are complex and threaten to tear the country apart.

In a completely unrelated note, America has finally achieved PEAK STUPIDITY, and its poster boy is the senator from New Jersey, Cory Booker.

Booker's proposal for "Baby Bonds" as a way to shrink the wealth gap is about as far left an approach as could be considered... without laughing.

Booker's idea is to give every newborn $1000 at birth and up to another $2000 every year thereafter - based on the parents' income, of course - until that child reaches the age of 18, or, in other words, just in time to take out a government-funded student loan, or, pay for maybe a few years of college themselves.

It's just this kind of insanity that American citizens have to endure from its government that causes angst, apathy, or confrontation between liberals and conservatives. The US has had a massive welfare program in place - that rewards having more children with higher benefits - for more than 50 years, and it's done nothing to reduce poverty or improve living conditions for chronically poor people.

With people like Booker being elected and re-elected to high government positions of power, is there any wonder why the United States are so disunited?

Despite the higher close on Thursday, investors should not be enthusiastic about an extension to the short-term rally which was likely the result more of short-covering and corporate buybacks than the actual taking of new positions in stocks. Sentiment remains murky with a bias to the downside.

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98
11/2/18	25,270.83	-109.91	+155.07
11/5/18	25,461.70	+190.87	+345.94
11/6/18	25,635.01	+173.31	+519.25
11/7/18	26,180.30	+545.29	+1064.54
11/8/18	26,191.22	+10.92	+1075.46
11/9/18	25,989.30	-201.92	+873.54
11/12/18	25,387.18	-602.12	+271.42
11/13/18	25,286.49	-100.69	+170.27
11/14/18	25,080.50	-205.99	-35.72
11/15/18	25,289.27	+208.77	+173.05

At the Close, Thursday, November 15, 2018:
Dow Jones Industrial Average: 25,289.27, +208.77 (+0.83%)
NASDAQ: 7,259.03, +122.64 (+1.72%)
S&P 500: 2,730.20, +28.62 (+1.06%)
NYSE Composite: 12,361.52, +86.03 (+0.70%)

Stocks Stumble Again, Dow Loses All November Gains; Germany's DAX Tumbling

After a while, one gets the impression that the bottom is going to fall out at some point, the only matter being one of when, and, maybe, by how much.

Stocks trended lower for a fourth straight day, with the Dow plunging by more than 350 points midway through the session, giving up all of its gains for November (some 1075 points). The NASDAQ led in percentage terms, down nine-tenths of a percent, with the S&P giving up early gains as well.

As usual, it could have been worse. The Dow slumped below 25,000 for the first time in two weeks, and while big, round numbers are flashy, the 25,000 level has no particular importance other than acting as a psychological figure.

Consumer prices rose by the most in nine months, as the October CPI came in with a "hot" 0.3% increase, fueling more concern that the Fed will continue raising interest rates at its December meeting, as planned. By now, the December federal funds increase should have been priced in, so, accusing inflation as the culprit de jour is probably a bit off the mark. What's really causing the continuation of the selling is more than likely a move by smart money out of stocks and into bonds or cash equivalents. With a 10-year treasury note offering well beyond three percent interest with no risk, some of the money leaving the market is surely headed that way, though corporate bonds are similarly attractive, albeit with a little more risk premia.

The major indices are still less than 10 percent off their all-time highs, making valuation a true issue. Post midterm elections, it appears that the federal government will be largely dysfunctional for the next two years, blunting any of President Trump's economic initiatives, and Maxine Waters proclamation that banking regulations will be tightened isn't winning any popularity contests on Wall Street. Waters is the chair-in-waiting of the House Financial Services Committee, which oversees banks and other financial institutions.

There's considerable concern over the smooth continuation of government, more even than there has been since the Gore-Bush election selection fiasco of 2000. Taken by any measure, Trump's policies in the first two years of his administration have been business-friendly, and the newly-elected Democrat majority in the House not only threatens to stop any progress that's been made, but actually reverse it by plunging Washington into chaos with investigations and special committees designed to strip the president of his power and possibly lead to impeachment.

Such an unstable environment gives pause to business expansion decisions while also worrying large investors. Thus, stocks are acting as a proxy for politics, which is not their best function, and the results could be devastating if the Democrats don't back down from their overly strident positions.

Given such a climate, is there any wonder stocks cannot gain traction, even with unemployment at historic lows?

Another concern is the state of foreign markets, which remain moribund at best, the DAX, Germany's main stock index has been falling in conjunction with US stocks, and it recently broke a key "neckline" in an obvious head-and-shoulders pattern according to analysts at FXEmpire.com. The German market could enter bear market territory in a matter of weeks, if not days, an important element in gauging world stock performance and a general indicator of economic health in the Eurozone.

These are just a few of the elements pushing hard against investors.

While the Dow is still 1000 points from an official correction, the NASDAQ re-entered the correction zone on Monday and the tech sector - which had been the driver of rallies - threatens to pull the entire stock complex down with it.

Amazon may be celebrating a coup in gaining sweet deals for its new HQ2 in Virginia and New York, but the rest of the tech world is not such a happy place.

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98
11/2/18	25,270.83	-109.91	+155.07
11/5/18	25,461.70	+190.87	+345.94
11/6/18	25,635.01	+173.31	+519.25
11/7/18	26,180.30	+545.29	+1064.54
11/8/18	26,191.22	+10.92	+1075.46
11/9/18	25,989.30	-201.92	+873.54
11/12/18	25,387.18	-602.12	+271.42
11/13/18	25,286.49	-100.69	+170.27
11/14/18	25,080.50	-205.99	-35.72

At the Close, Wednesday, November 14, 2018
Dow Jones Industrial Average: 25,080.50, -205.99 (-0.81%)
NASDAQ: 7,136.39, -64.48 (-0.90%)
S&P 500: 2,701.58, -20.60 (-0.76%)
NYSE Composite: 12,280.73, -47.57 (-0.39%)

Dow Down 100, NASDAQ Up 0.01; Crude Oil the Culprit

From the You Can't Make This Stuff Up Department:

The Dow was down 100 points (and 69 cents, but who's counting), while the NASDAQ finished a hectic day of trading with a gain of 0.01. All told, this was a losing session, as both the S&P 500 and NYSE Composite ended the day underwater.

One might have assumed that Tuesday's losses were an extension from Monday, with Apple leading stocks lower, but, even though the Cupertino computer colossus did finish lower by an even one percent, the biggest losers on the Dow were energy companies ExxonMobil and Chevron, which bracketed Boeing (BA), a 2.11% loser. XOM lost 2.29%. CVX was down 1.74%.

Volatility in stocks is making everybody crazy. The Dow was up 1075 points over the first six sessions in November, but has given back 905 in the past three sessions, leaving it up a mere 170 points for the month, one which traditionally is among the best for long players.

Thus, the answer to the question of what moved markets today is simple: the price of oil, as WTI crude lost ground for the 12th straight day. At $55.19, it's at the lowest level since November last year. Tuesday's decline was also the largest during the recent rout, down nearly eight percent.

Saudi Arabia reduced its estimate for global demand from two million barrels per day to 1.29 million, sending the price sharply lower. Oil peaked on October 3rd, above $76/barrel, and has been on a diagonal course lower since, now officially in a bear market.

While the Saudi's may be fretting over demand and promising production cuts in the near future, the real villain in the oil patch is supply. There's been a glut of oil forever, and the only movement in price was due to artificial crises, forced production cuts, and pure speculation. In June of 2017, WTI crude oil was going for $46/barrel, but was bumped up continuously over the next 16 months before the recent setback. From all indications, reduced demand and oversupply could push prices down below $50/barrel before Thanksgiving and further declines might be a welcome Christmas present for drivers and those who heat their homes with oil.

A lower price for oil, and, consequently, for gasoline and other derivatives, should act to boost the general economy, allowing consumers more disposable income to spend on necessities and/or holiday splurges, all of which should be positive for markets. However, the math isn't quite so simple, as Americans, beset with record credit card and other debt, might tighten their collective belts and pay down some of those nasty, recurring, monthly bills on credit cards with interest rates well beyond what used to be considered usury.

For the pair traders out there, that would mean shorting oil stocks and financials while buying consumer staples and cyclicals.

Fun for everyone.

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98
11/2/18	25,270.83	-109.91	+155.07
11/5/18	25,461.70	+190.87	+345.94
11/6/18	25,635.01	+173.31	+519.25
11/7/18	26,180.30	+545.29	+1064.54
11/8/18	26,191.22	+10.92	+1075.46
11/9/18	25,989.30	-201.92	+873.54
11/12/18	25,387.18	-602.12	+271.42
11/13/18	25,286.49	-100.69	+170.27

At the Close, Tuesday, November 13, 2018:
Dow Jones Industrial Average: 25,286.49, -100.69 (-0.40%)
NASDAQ: 7,200.88, +0.01 (0.00%)
S&P 500: 2,722.18, -4.04 (-0.15%)
NYSE Composite: 12,328.23, -15.28 (-0.12%)