This is a Money Daily update on the churning volatility in stocks, which has taken on prodigious proportions as of Tuesday and extended - after an unusual break due to President Trump ordering all federal offices (and with it the stock market) closed in mourning for the late George H.W. Bush, 41st president - into Thursday's trading.
Asian stocks were wracked as the sun rose from the Pacific. Japan's NIKKEI was down nearly two percent, and Hong Kong's Hang Seng fell 2.47%. European markets opened lower and the selling accelerated throughout the day. Of particular note was Germany's Dax, which stood at 10,810.98 by the close, down 389.26 points (-3.48%). The DAX is now down 19% from its October 30, 2017 high. Another 100-point decline will put it officially into a bear market.
Other European bourses were hit hard, with losses of three to three-and-a-half percent on all major exchanges.
When stocks opened in New York, the rout had reached critical velocity. The ow opened down more than 400 points and continued selling off. At one point, the Dow was down more than 700 points, but has recovered somewhat as of this writing. With the NASDAQ already in correction territory, the Dow and S&P are close, both down roughly nine percent from recent highs.
There will be another post here after the market closes. Look for a full recap about 7:00 pm ET.
Thursday, December 6, 2018
Heads Up! Stocks Selling Off Worldwide; US Open Looking Ugly; Germany's DAX Nearing Bear Market
After an unscheduled day off for the Kumbayah TV presentation of George HW Bush's funeral Wednesday, the rest of the world's equity bourses took the day to vacillate, but Thursday looks to be a bloodbath of magnificent proportions.
Asian stocks were down broadly in Japan, Hong Won, China, and elsewhere, and European stocks opened lower and continued to descend. The DAX, Germany's main stock exchange, is approaching bear market status, down 19% from an all-time high of 13,478.86, reached on October 30, 2017. The DAX is currently trading around 10,940.
At this writing, Dow futures are off more than 450 points, S&P futures have fallen nearly 50, and NASDAQ futures are 115 points lower.
Money Daily will be monitoring events throughout the US session, as this current downdraft appears to be one without a bottom.
Asian stocks were down broadly in Japan, Hong Won, China, and elsewhere, and European stocks opened lower and continued to descend. The DAX, Germany's main stock exchange, is approaching bear market status, down 19% from an all-time high of 13,478.86, reached on October 30, 2017. The DAX is currently trading around 10,940.
At this writing, Dow futures are off more than 450 points, S&P futures have fallen nearly 50, and NASDAQ futures are 115 points lower.
Money Daily will be monitoring events throughout the US session, as this current downdraft appears to be one without a bottom.
Tuesday, December 4, 2018
Stocks Rocked As Europe Burns, Political Skepticism Soars; Globalism Grips As Populism Rises
With all the good news that's been spreading of late, the magnitude of this most recent setback was, for some, a little overdone. Others, who see the planet for what it is, see populism on the rise and globalism fading into history.
Prepare for some over-the-top hyperbole in 3...2...1...
Besides wealth inequality reaching heights heretofore unseen, taxation of the general populace in developed nations has reached catastrophic proportions. As seen in the European protests, the civility of the average man and woman, having been grossly abused, has been stretched beyond the limits of many whose toils seem to barely keep pace with the endless panoply of regulations, fees, fines, taxes and penalties. This is how epochs end.
In France, Germany, Sweden, Belgium, Italy and elsewhere, the citizenry has had enough of misrepresentation by so-called officials, elected, selected, or otherwise, and they are seeking economic and social freedom. The forces of globalism have been resolute in obfuscating reality and distorting the obvious all the while raking in the spoils of their pernicious policies and decietful politics.
In the United States, the working class has seen through the flash narrative surrounding the demonization of the popularly-elected President Trump. Americans no longer want illegal migration across their borders, handouts to the poor or the rich, nor policies that do them no good. The entire planet is on the verge of an emotional and psychological breaking point. It has been many years in the making, but, every day that goes by is rife with lies, innuendo, untruths, double-talk. Within the next year or two, everything is going to go sideways. The politics have simply outpaced the usefulness of the ruling class. It's apparent to just about anybody who give a damn and the wisest of the monied class on Wall Street are running for the proverbial hills.
Who knows what causes stocks to zig-zag on a day-to-day basis, for the Dow to pick up 600 points one day and drop nearly 800 the next?
In any case, the point drop on the Dow was the fourth-largest in market history. The other three larger also occurred this year. For the NASDAQ, it was the sixth largest. All of the 11 largest point declines on the NASDAQ occurred in either 2000 or 2018.
The Dow transports (DJT, -4.39%) tumbled 476.37 points, or 4.4%, with all 20 components closing lower. The previous biggest-ever point decline was 445.16 points on Oct. 10. At its intraday worst, the index was down as much as 565.23 points, or 5.2%.
Analysis of the recent volatility is sure to take on obscene forms from a parade of wizened economists, generalists, and hobbyists. None of them will have it exactly right. One day, all the world's full of unicorns and honey. The next, it's going to hell in a hand basket.
Whatever your particular niche or trading style, the current offers a uniquely volatile and confounding proposition for traders, speculators, or even the casual investor.
For the coming months, expect more of the same.
Dow Jones Industrial Average December Scorecard:
At the Close, Tuesday, December 4, 2018:
Dow Jones Industrial Average: 25,027.07, -799.36 (-3.10%)
NASDAQ: 7,158.43, -283.09 (-3.80%)
S&P 500: 2,700.06, -90.31 (-3.24%)
NYSE Composite: 12,221.98, -355.56 (-2.83%)
Prepare for some over-the-top hyperbole in 3...2...1...
Besides wealth inequality reaching heights heretofore unseen, taxation of the general populace in developed nations has reached catastrophic proportions. As seen in the European protests, the civility of the average man and woman, having been grossly abused, has been stretched beyond the limits of many whose toils seem to barely keep pace with the endless panoply of regulations, fees, fines, taxes and penalties. This is how epochs end.
In France, Germany, Sweden, Belgium, Italy and elsewhere, the citizenry has had enough of misrepresentation by so-called officials, elected, selected, or otherwise, and they are seeking economic and social freedom. The forces of globalism have been resolute in obfuscating reality and distorting the obvious all the while raking in the spoils of their pernicious policies and decietful politics.
In the United States, the working class has seen through the flash narrative surrounding the demonization of the popularly-elected President Trump. Americans no longer want illegal migration across their borders, handouts to the poor or the rich, nor policies that do them no good. The entire planet is on the verge of an emotional and psychological breaking point. It has been many years in the making, but, every day that goes by is rife with lies, innuendo, untruths, double-talk. Within the next year or two, everything is going to go sideways. The politics have simply outpaced the usefulness of the ruling class. It's apparent to just about anybody who give a damn and the wisest of the monied class on Wall Street are running for the proverbial hills.
Who knows what causes stocks to zig-zag on a day-to-day basis, for the Dow to pick up 600 points one day and drop nearly 800 the next?
In any case, the point drop on the Dow was the fourth-largest in market history. The other three larger also occurred this year. For the NASDAQ, it was the sixth largest. All of the 11 largest point declines on the NASDAQ occurred in either 2000 or 2018.
The Dow transports (DJT, -4.39%) tumbled 476.37 points, or 4.4%, with all 20 components closing lower. The previous biggest-ever point decline was 445.16 points on Oct. 10. At its intraday worst, the index was down as much as 565.23 points, or 5.2%.
Analysis of the recent volatility is sure to take on obscene forms from a parade of wizened economists, generalists, and hobbyists. None of them will have it exactly right. One day, all the world's full of unicorns and honey. The next, it's going to hell in a hand basket.
Whatever your particular niche or trading style, the current offers a uniquely volatile and confounding proposition for traders, speculators, or even the casual investor.
For the coming months, expect more of the same.
Dow Jones Industrial Average December Scorecard:
| Date | Close | Gain/Loss | Cum. G/L |
| 12/3/18 | 25,826.43 | +287.97 | +287.97 |
| 12/4/18 | 25,027.07 | -799.36 | -511.39 |
At the Close, Tuesday, December 4, 2018:
Dow Jones Industrial Average: 25,027.07, -799.36 (-3.10%)
NASDAQ: 7,158.43, -283.09 (-3.80%)
S&P 500: 2,700.06, -90.31 (-3.24%)
NYSE Composite: 12,221.98, -355.56 (-2.83%)
Stocks Spurt On Tariff Truce; 3-5 Yield Curve Inverts
There was good news on the trade front, but bad news concerning a possible recession.
At the conclusion of the G20 meeting in Buenos Aires, President Trump and his Chinese counterpart, Xi Jinping, announced a 90-day moratorium on tariffs set to take effect on January 1, 2019. Some of the tariffs already in place were set to increase while new tariffs on a variety of goods were to take effect on the new year, but the leaders of the world's two largest economies decided on a cooling-off period and further talks before proceeding.
That good news sent futures soaring in pre-market trading, the euphoria spilling over into the regular session. Barely noticed - and un-noted by the financial press - was a minor inversion in interest rates, with the yield on the 5-year note (2.83%) falling below that of the 3-year treasury note (2.84%).
Though it's not the inversion that most economists are looking for in terms of portending a recession, the minor inversion is a warning shot. The 2-year and 10-year notes are the fear standard, with an inverted curve of those rates consistently preceding every recession since 1955. Currently the 2-year note stands at a yield of 2.83%, while the 10-year holds at 2.98%, notably below 3.00%, after Fed Chairman Jerome Powell softened his stance on rate hikes last week.
Thus, there's a split narrative that threatens to put a lid on gains in the near term. Trade wars have been postponed, for now, but 90 days isn't long enough to establish new guidelines between China and the USA. With the Fed set to raise and check, interest rates are going to give them some maneuverability, though not much, with the federal funds rate settling in somewhere between 2.25 and 2.50%.
Bond vigilantes brought the 10-year note down below the Maginot Line of 3.0% on the first trading day of December. That's more than enough speculation as to where interest rates are headed. In a word, nowhere. The ancillary note is on growth - both domestic and global - which has had a bit of a bump thanks to US strength, but pockets of malaise are popping up everywhere. There seems to be no smooth path heading into 2019, so, after a boost from the Fed and another from the international trading community, this early December rally may not have enough gusto to carry it past the FOMC meeting and through the holidays.
Much emphasis will be put on consumer spending, though with an early Thanksgiving, holiday spending might just peter out a week before Christmas.
It's not all doom and gloom. It's more like murky, with a light at the end of some tunnel.
Dow Jones Industrial Average December Scorecard:
At the Close, Monday, December 3, 2018:
Dow Jones Industrial Average: 25,826.43, +287.97 (+1.13%)
NASDAQ: 7,441.51, +110.98 (+1.51%)
S&P 500: 2,790.37, +30.20 (+1.09%)
NYSE Composite: 12,577.54, +120.00 (+0.96%)
At the conclusion of the G20 meeting in Buenos Aires, President Trump and his Chinese counterpart, Xi Jinping, announced a 90-day moratorium on tariffs set to take effect on January 1, 2019. Some of the tariffs already in place were set to increase while new tariffs on a variety of goods were to take effect on the new year, but the leaders of the world's two largest economies decided on a cooling-off period and further talks before proceeding.
That good news sent futures soaring in pre-market trading, the euphoria spilling over into the regular session. Barely noticed - and un-noted by the financial press - was a minor inversion in interest rates, with the yield on the 5-year note (2.83%) falling below that of the 3-year treasury note (2.84%).
Though it's not the inversion that most economists are looking for in terms of portending a recession, the minor inversion is a warning shot. The 2-year and 10-year notes are the fear standard, with an inverted curve of those rates consistently preceding every recession since 1955. Currently the 2-year note stands at a yield of 2.83%, while the 10-year holds at 2.98%, notably below 3.00%, after Fed Chairman Jerome Powell softened his stance on rate hikes last week.
Thus, there's a split narrative that threatens to put a lid on gains in the near term. Trade wars have been postponed, for now, but 90 days isn't long enough to establish new guidelines between China and the USA. With the Fed set to raise and check, interest rates are going to give them some maneuverability, though not much, with the federal funds rate settling in somewhere between 2.25 and 2.50%.
Bond vigilantes brought the 10-year note down below the Maginot Line of 3.0% on the first trading day of December. That's more than enough speculation as to where interest rates are headed. In a word, nowhere. The ancillary note is on growth - both domestic and global - which has had a bit of a bump thanks to US strength, but pockets of malaise are popping up everywhere. There seems to be no smooth path heading into 2019, so, after a boost from the Fed and another from the international trading community, this early December rally may not have enough gusto to carry it past the FOMC meeting and through the holidays.
Much emphasis will be put on consumer spending, though with an early Thanksgiving, holiday spending might just peter out a week before Christmas.
It's not all doom and gloom. It's more like murky, with a light at the end of some tunnel.
Dow Jones Industrial Average December Scorecard:
| Date | Close | Gain/Loss | Cum. G/L |
| 12/3/18 | 25,826.43 | +287.97 | +287.97 |
At the Close, Monday, December 3, 2018:
Dow Jones Industrial Average: 25,826.43, +287.97 (+1.13%)
NASDAQ: 7,441.51, +110.98 (+1.51%)
S&P 500: 2,790.37, +30.20 (+1.09%)
NYSE Composite: 12,577.54, +120.00 (+0.96%)
Sunday, December 2, 2018
WEEKEND WRAP: Powell Puts Positive Spin On Rates, Economy; Stocks Respond With Banner Gains
As much as stocks were flattened last week, they gained back this week, and then some, rebounding mainly off the lips of Fed Chairman Jerome Powell, who uttered two words which are sure to become ensconced within the annuls of great Fed Chairman one liners, such as Alan Greenspan's notorious "irrational exuberance."
Having a way with words, especially concise two-word constructs, Powell uttered, in a speech at the Economic Club of New York, that interest rates were "just below" neutral, sending stocks spiraling upwards on Wednesday.
Those gains followed two prior sessions with more pedestrian advances, the Wednesday push a 617-point blast on the Dow which sent the industrials into positive territory not only for the month, but for the year as well. The week's gains were capped off by a window-dressing close on Friday, with the Dow posting a nearly 200-point gain, all of which came after 1:30 pm ET.
Events of the week - from Powell's speech to Trump's dealings at the G20 in Buenos Aires - managed to put a positive spin on the outlook for stocks going into the final month of the year and the holiday shopping season.
Effectively, what Powell's statement on interest rates did was virtually assure a 25 basis point hike in the federal funds rate and then a pause at what would have been the next logical rate increase, at the March FOMC meeting, and beyond. Whether the Fed's members actually believes that an overnight rate of 2.25-2.50% neither hinders nor aids the US economy is a question open for debate, as most believed that more rate hikes were necessary per the minutes of the last FOMC meeting earlier in November.
That sentiment put a bit of a damper on the market when released on Thursday, but, as Wall Street memories seem exceedingly short these days, the flattish close didn't have any lasting effect.
Once into 2019, the Fed is likely to continue to spin positively, as Janet Yellen's honorable mention entry in the two-word scrabble that is Fedspeak, "data dependent" should be rolling off the lips of more than a few Fed officials in the cold months of winter.
Undeniably, a dovish Federal Reserve can be nothing but good for stocks, which are the de facto underpinning of the US economy. The Fed - and Powell in particular - may have been taking a sideways glance at the housing market as well, another pillar in the economic construct. Rising mortgage rates have shut down advances in new and existing home sales, punishing home builder stocks like Lennar (LEN), D.R. Horton (DHI), and KB Home (KBH). A stagnant housing market may have been instrumental in the formation of Powell's suddenly-accomodative stance.
Even with the rebound this week, stocks still have a pretty large slope to scale to get back to September or October's all-time highs. The NASDAQ still has issues with falling tech stocks and GM's announcement that it was shuttering five factories and laying off 14,000 workers had a chilling effect on what was an overwhelmingly positive week.
Elsewhere, oil continued to hover at the $50 level for WTI crude, precious metals remained flat to negative, but other global markets perked up a bit.
When the FOMC meets on December 18-19, there will be little doubt about their direction. A rate hike of 0.25% is practically baked into the cake. After that, however, it certainly appears the Fed will consider its work done, for now, at least. The next rate hike - and there is almost certainly to be one or two in the next 12-18 months - will probably come after some gaudy economic data or fresh highs in the stock market.
Until then, the skies are blue and smooth sailing is ahead.
Dow Jones Industrial Average November Scorecard:
At the Close, Friday, November 30, 2018:
Dow Jones Industrial Average: 25,538.46, +199.62 (+0.79%)
NASDAQ: 7,330.54, +57.45 (+0.79%)
S&P 500: 2,760.17, +22.41 (+0.82%)
NYSE Composite: 12,457.55, +68.18 (+0.55%)
FOR THE WEEK:
Dow: +1,252.51 (+5.16%)
NASDAQ: +391.55 (+5.64%)
S&P 500: +127.61 (+4.85%)
NYSE Composite: +421.31 (+3.%0%)
Having a way with words, especially concise two-word constructs, Powell uttered, in a speech at the Economic Club of New York, that interest rates were "just below" neutral, sending stocks spiraling upwards on Wednesday.
Those gains followed two prior sessions with more pedestrian advances, the Wednesday push a 617-point blast on the Dow which sent the industrials into positive territory not only for the month, but for the year as well. The week's gains were capped off by a window-dressing close on Friday, with the Dow posting a nearly 200-point gain, all of which came after 1:30 pm ET.
Events of the week - from Powell's speech to Trump's dealings at the G20 in Buenos Aires - managed to put a positive spin on the outlook for stocks going into the final month of the year and the holiday shopping season.
Effectively, what Powell's statement on interest rates did was virtually assure a 25 basis point hike in the federal funds rate and then a pause at what would have been the next logical rate increase, at the March FOMC meeting, and beyond. Whether the Fed's members actually believes that an overnight rate of 2.25-2.50% neither hinders nor aids the US economy is a question open for debate, as most believed that more rate hikes were necessary per the minutes of the last FOMC meeting earlier in November.
That sentiment put a bit of a damper on the market when released on Thursday, but, as Wall Street memories seem exceedingly short these days, the flattish close didn't have any lasting effect.
Once into 2019, the Fed is likely to continue to spin positively, as Janet Yellen's honorable mention entry in the two-word scrabble that is Fedspeak, "data dependent" should be rolling off the lips of more than a few Fed officials in the cold months of winter.
Undeniably, a dovish Federal Reserve can be nothing but good for stocks, which are the de facto underpinning of the US economy. The Fed - and Powell in particular - may have been taking a sideways glance at the housing market as well, another pillar in the economic construct. Rising mortgage rates have shut down advances in new and existing home sales, punishing home builder stocks like Lennar (LEN), D.R. Horton (DHI), and KB Home (KBH). A stagnant housing market may have been instrumental in the formation of Powell's suddenly-accomodative stance.
Even with the rebound this week, stocks still have a pretty large slope to scale to get back to September or October's all-time highs. The NASDAQ still has issues with falling tech stocks and GM's announcement that it was shuttering five factories and laying off 14,000 workers had a chilling effect on what was an overwhelmingly positive week.
Elsewhere, oil continued to hover at the $50 level for WTI crude, precious metals remained flat to negative, but other global markets perked up a bit.
When the FOMC meets on December 18-19, there will be little doubt about their direction. A rate hike of 0.25% is practically baked into the cake. After that, however, it certainly appears the Fed will consider its work done, for now, at least. The next rate hike - and there is almost certainly to be one or two in the next 12-18 months - will probably come after some gaudy economic data or fresh highs in the stock market.
Until then, the skies are blue and smooth sailing is ahead.
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 |
| 11/20/18 | 24,465.64 | -551.80 | -650.58 |
| 11/21/18 | 24,464.69 | -0.95 | -651.53 |
| 11/23/18 | 24,285.95 | -178.74 | -830.27 |
| 11/26/18 | 24,640.24 | +354.29 | -475.98 |
| 11/27/18 | 24,748.73 | +108.49 | -367.49 |
| 11/28/18 | 25,366.43 | +617.70 | +250.21 |
| 11/29/18 | 25,342.72 | -23.71 | +226.50 |
| 11/30/18 | 25,538.46, +199.62 | -23.71 | +426.12 |
At the Close, Friday, November 30, 2018:
Dow Jones Industrial Average: 25,538.46, +199.62 (+0.79%)
NASDAQ: 7,330.54, +57.45 (+0.79%)
S&P 500: 2,760.17, +22.41 (+0.82%)
NYSE Composite: 12,457.55, +68.18 (+0.55%)
FOR THE WEEK:
Dow: +1,252.51 (+5.16%)
NASDAQ: +391.55 (+5.64%)
S&P 500: +127.61 (+4.85%)
NYSE Composite: +421.31 (+3.%0%)
Subscribe to:
Posts (Atom)
Posts
