Markets - whatever is left of them - seemed to be running on fumes Monday, as no Trump tweets nor economic news were sufficient to move stocks in general either way.
This kind of quiet may be just what investors are seeking: less volatility, less media madness, a more sanguine environment and some degree of security and safety. With all the talk of recession, the past few months have spooked some of the more ardent longs, but the market is still not conducive to short trades in any form.
One could conclude from recent action that stocks will hold their ground and move to new highs, as has been the case throughout the run from 2009 (buy the dip philosophy), and with another 1/4 point rate cut from the Fed a sure thing next week, that is the likely trading strategy for the day-trader and short-termer. Long term investors should be seeking value or growth, best, a combination of the two. With interest rates so low, dividend-yielding stocks with long track records are the safest and surest, plus, many will survive well under difficult conditions, should a recession actually arrive.
Central banks still have control of markets, a condition that may persist for quite a long time. It should serve memory well to reconsider the aftermath of the 2008 crash, wherein central banks coordinated to save everything, even unworthy companies, from default.
This might be a prime time to move from passive to active investing, with individual stocks preferred over ETFs or mutuals. Expect some noisy ups and downs over the next few months, though the next major event is Brexit, with a hard-line, no-deal escape from the EU by Great Britain set for October 31 by Boris Johnson, the most recent Prime Minister of the country.
It's been more than three years since jolly ole' England voted to leave the EU. Parliamentarians and stubborn bureaucrats have delayed the wishes of the people for too long and the wait may soon be over. Anything short of England removing itself from the EU - without onerous conditions - will be very bad for markets. The hyperbole of the media and those on the "remain" side of the issue have played the hysterics card for all it's worth.
Time is up. Populism should prevail in England and the result of leaving the EU, while dramatic, does not have to be traumatic.
At the Close, Monday, September 9, 2019:
Dow Jones Industrial Average: 26,835.51, +38.05 (+0.14%)
NASDAQ: 8,087.44, -15.64 (-0.19%)
S&P 500: 2,978.43, -0.28 (-0.01%)
NYSE Composite: 12,960.72, +27.34 (+0.21%)
Tuesday, September 10, 2019
Monday, September 9, 2019
Weekend Wrap: Stocks Gain, All Clear Signal Given Investors; Gold, Silver Dashed
Sorry. On the road again, drive-by post:
Two straight weeks of positive returns have pushed the major Us indices back above their 50-day moving averages, an okey-dokey signal to investors that the 0.25% federal funds interest rate cut from the FOMC is in the bag later this month (September 17-18), and the trade/tariff food fight between the US and China will continue unabated, alternating between "talks are ongoing," to "talks are off again," to "all options are on the table," or other such nonsense.
Trade and tariff talk seems to have a mysterious effect on traders, sending them into emotional buying and selling fits on headlines. Actually, the headline readers are algorithms, keyed to respond to major developments, or, in the case of the trade war, rumors of minor developments.
On the week, stocks vacillated, but moved higher in tandem, precious metals were dashed, as anyone who has an interest in the prices of such knew they would be. Both gold and silver are still trading near multi-year highs, so it's obvious that more flogging will be necessary until the morale of holders and buyers is sufficiently dashed.
As the global charade of overinflated sovereign budgets and overstretched consumers continues, the debt cycle looks to be extended at any cost by the overlords of banking, the central banks. Their position is as precarious as it has ever been. Rumors of an ouster of the Fed by congress in the United States are vastly overstated and wishful thinking by freedom-loving folks, yet they persist.
At this point in the day-to-day noise chamber that is Wall Street, caution is best served cold and reliance on a financial planner could be a major mistake going forward. It's all hands on deck, every man and woman for him/herself, babies being thrown overboard.
Happy sailing!
At the Close, Friday, September 6, 2019:
Dow Jones Industrial Average: 26,797.46, +69.26 (+0.26%)
NASDAQ: 8,103.07, -13.76 (-0.17%)
S&P 500: 2,978.71, +2.71 (+0.09%)
NYSE Composite: 12,933.38, +15.58 (+0.12%)
For the Week:
Dow: +394.18 (+1.49%)
NASDAQ: +140.19 (+1.76%)
S&P 500: +52.25 (+1.79%)
NYSE Composite: +196.50 (+1.54%)
Two straight weeks of positive returns have pushed the major Us indices back above their 50-day moving averages, an okey-dokey signal to investors that the 0.25% federal funds interest rate cut from the FOMC is in the bag later this month (September 17-18), and the trade/tariff food fight between the US and China will continue unabated, alternating between "talks are ongoing," to "talks are off again," to "all options are on the table," or other such nonsense.
Trade and tariff talk seems to have a mysterious effect on traders, sending them into emotional buying and selling fits on headlines. Actually, the headline readers are algorithms, keyed to respond to major developments, or, in the case of the trade war, rumors of minor developments.
On the week, stocks vacillated, but moved higher in tandem, precious metals were dashed, as anyone who has an interest in the prices of such knew they would be. Both gold and silver are still trading near multi-year highs, so it's obvious that more flogging will be necessary until the morale of holders and buyers is sufficiently dashed.
As the global charade of overinflated sovereign budgets and overstretched consumers continues, the debt cycle looks to be extended at any cost by the overlords of banking, the central banks. Their position is as precarious as it has ever been. Rumors of an ouster of the Fed by congress in the United States are vastly overstated and wishful thinking by freedom-loving folks, yet they persist.
At this point in the day-to-day noise chamber that is Wall Street, caution is best served cold and reliance on a financial planner could be a major mistake going forward. It's all hands on deck, every man and woman for him/herself, babies being thrown overboard.
Happy sailing!
At the Close, Friday, September 6, 2019:
Dow Jones Industrial Average: 26,797.46, +69.26 (+0.26%)
NASDAQ: 8,103.07, -13.76 (-0.17%)
S&P 500: 2,978.71, +2.71 (+0.09%)
NYSE Composite: 12,933.38, +15.58 (+0.12%)
For the Week:
Dow: +394.18 (+1.49%)
NASDAQ: +140.19 (+1.76%)
S&P 500: +52.25 (+1.79%)
NYSE Composite: +196.50 (+1.54%)
Friday, September 6, 2019
Stocks Rise on Jobs Data, Fed Backing
Chalk up Thursday's stock gains to massive intervention by the Fed and/or their agents.
Not only did stocks go ballistic at the opening bell, but the day was marked by huge moves in bonds and precious metals.
Notably, the yield on the 10-year note rose by more than a full 10 basis points, bouncing off a low of 1.46% to clamber higher to a 1.57% close. That yield is the highest since August 22, and the 2s-10s settled non-inverted, with the two-year bouncing from 1.43% to 1.55%. However, all of the short-maturity bonds - 1 month through 1 year - are higher than the 10-year, suggesting that whatever magic was produced in markets will likely be short-lived.
As far as gold and silver are concerned, the central bankers - who hate competing currencies - slammed them both into the ground. Silver was treated with special disdain, the metal dropping from $19.57 per ounce to $18.64 during the day and the battering continued overnight. Silver, as of this writing, is quickly approaching $18.00.
Gold closed out trading in New York at $1552.00 per ounce on Wednesday, but, as of Thursday's close, was down more than $33, ending at $1518.70. It's still sliding, with the current bid at at $1505.00.
With August non-farm payroll data due out at 8:30 am ET, stocks are poised to whip higher if the numbers are solid. ADP reported on Thursday that private payrolls added 195,000 jobs in the month, a number well above estimates of 145,000.
As the US and China propose to resume talks, a good payroll report should help stocks continue their journey higher, heading back toward record highs. With the Fed surreptitiously backing stocks - because that's the only way they can save themselves from being completely discredited - it's plain and obvious where the money is going.
At the Close, Thursday, September 5, 2019:
Dow Jones Industrial Average: 26,728.15, +372.68 (+1.41%)
NASDAQ: 8,116.83, +139.95 (+1.75%)
S&P 500: 2,976.00, +38.22 (+1.30%)
NYSE Composite: 12,917.76, +121.45 (+0.95%)
Not only did stocks go ballistic at the opening bell, but the day was marked by huge moves in bonds and precious metals.
Notably, the yield on the 10-year note rose by more than a full 10 basis points, bouncing off a low of 1.46% to clamber higher to a 1.57% close. That yield is the highest since August 22, and the 2s-10s settled non-inverted, with the two-year bouncing from 1.43% to 1.55%. However, all of the short-maturity bonds - 1 month through 1 year - are higher than the 10-year, suggesting that whatever magic was produced in markets will likely be short-lived.
As far as gold and silver are concerned, the central bankers - who hate competing currencies - slammed them both into the ground. Silver was treated with special disdain, the metal dropping from $19.57 per ounce to $18.64 during the day and the battering continued overnight. Silver, as of this writing, is quickly approaching $18.00.
Gold closed out trading in New York at $1552.00 per ounce on Wednesday, but, as of Thursday's close, was down more than $33, ending at $1518.70. It's still sliding, with the current bid at at $1505.00.
With August non-farm payroll data due out at 8:30 am ET, stocks are poised to whip higher if the numbers are solid. ADP reported on Thursday that private payrolls added 195,000 jobs in the month, a number well above estimates of 145,000.
As the US and China propose to resume talks, a good payroll report should help stocks continue their journey higher, heading back toward record highs. With the Fed surreptitiously backing stocks - because that's the only way they can save themselves from being completely discredited - it's plain and obvious where the money is going.
At the Close, Thursday, September 5, 2019:
Dow Jones Industrial Average: 26,728.15, +372.68 (+1.41%)
NASDAQ: 8,116.83, +139.95 (+1.75%)
S&P 500: 2,976.00, +38.22 (+1.30%)
NYSE Composite: 12,917.76, +121.45 (+0.95%)
Thursday, September 5, 2019
Stocks Churn Higher; Currency Backed by Gold or Silver Is Possible
Churning continued on Wednesday, wiping up the losses from Tuesday. The up-and-down action in stocks is likely to continue for the near term, and quite possibly the longer term, as Fed officials and their global central banking brethren have severe solvency problems.
There is no abatement in the mammoth bond rally which has sent sovereign debt into negative yields in much of the developed world. The US has thus far escaped negativity, though the 10-year-note continues to dive, heading below a yield of 1.46% on Wednesday. The slow, grinding erosion of yield in bonds is a symptom of dying currencies. Negative interest yields will be discovered to be both symptoms AND causes of death. The Japanese yen is likely to die first, then the euro, followed by capitulation of the US dollar.
Evisceration of capital will be complete, widespread, and unrelenting as central banks cannot contain the over-saturation of debt, of individuals, companies, and governments. A new currency will be needed to replace the failed ones, and it's likely to be global and crypto.
Any country with the nerve to create and back its own currency with anything tangible will attract both the ire of central bankers (with attendant name-calling and possible military intervention) and the interest of investors seeking not just yield, but safety and security.
With global currencies facing serious headwinds, there has been talk of gold or silver-backed currencies from Greece to Mexico to Canada. Naysayers contend that there isn't enough of the precious metals to suitably service global commerce, though that argument depends entirely upon control of gold and silver prices. If the central banking cartel were to lose control of pricing via their deviate trading in the futures markets, the metals would explode exponentially. Gold might reach $5000 or $10,000 per ounce, silver would be priced in hundreds of dollars.
The solution is partial backing with precious metals. Sovereign governments issuing national currencies could readily assign a percentage of such to be backed by either gold or silver, or both, with the backing in a percentage of anywhere from 10% to 40% of the buck, loonie, yen, what have you.
Thus, the metals prices would not necessarily skyrocket beyond reason and debt would no longer be part of the formula for currency. While such a scenario may be a financial fantasy for now, history favors such, though the future, shaped by the current regime, would have to be radically different from the present state.
At the Close, Wednesday, September 4, 2019:
Dow Jones Industrial Average: 26,355.47, +237.45 (+0.91%)
NASDAQ: 7,976.88, +102.72 (+1.30%)
S&P 500: 2,937.78, +31.51 (+1.08%)
NYSE Composite: 12,796.32, +132.92 (+1.05%)
There is no abatement in the mammoth bond rally which has sent sovereign debt into negative yields in much of the developed world. The US has thus far escaped negativity, though the 10-year-note continues to dive, heading below a yield of 1.46% on Wednesday. The slow, grinding erosion of yield in bonds is a symptom of dying currencies. Negative interest yields will be discovered to be both symptoms AND causes of death. The Japanese yen is likely to die first, then the euro, followed by capitulation of the US dollar.
Evisceration of capital will be complete, widespread, and unrelenting as central banks cannot contain the over-saturation of debt, of individuals, companies, and governments. A new currency will be needed to replace the failed ones, and it's likely to be global and crypto.
Any country with the nerve to create and back its own currency with anything tangible will attract both the ire of central bankers (with attendant name-calling and possible military intervention) and the interest of investors seeking not just yield, but safety and security.
With global currencies facing serious headwinds, there has been talk of gold or silver-backed currencies from Greece to Mexico to Canada. Naysayers contend that there isn't enough of the precious metals to suitably service global commerce, though that argument depends entirely upon control of gold and silver prices. If the central banking cartel were to lose control of pricing via their deviate trading in the futures markets, the metals would explode exponentially. Gold might reach $5000 or $10,000 per ounce, silver would be priced in hundreds of dollars.
The solution is partial backing with precious metals. Sovereign governments issuing national currencies could readily assign a percentage of such to be backed by either gold or silver, or both, with the backing in a percentage of anywhere from 10% to 40% of the buck, loonie, yen, what have you.
Thus, the metals prices would not necessarily skyrocket beyond reason and debt would no longer be part of the formula for currency. While such a scenario may be a financial fantasy for now, history favors such, though the future, shaped by the current regime, would have to be radically different from the present state.
At the Close, Wednesday, September 4, 2019:
Dow Jones Industrial Average: 26,355.47, +237.45 (+0.91%)
NASDAQ: 7,976.88, +102.72 (+1.30%)
S&P 500: 2,937.78, +31.51 (+1.08%)
NYSE Composite: 12,796.32, +132.92 (+1.05%)
Wednesday, September 4, 2019
Stocks Slide As Economic Realities Continue to Worsen; Gold, Silver Soar
September didn't start out very well as stocks lost ground on all indices. Perhaps more concerning was the level to which yield on the 10-year note plunged, dipping to a low of 1.46% before closing out at 1.47%.
Low yields are indicative of demand, and, with some $19 trillion of government bonds globally yielding negative numbers, US bonds are attractive by comparison. This dynamic is not going to end soon, as Japan and the Euro area - the two economies with the most negative yields - are in no-win conditions, with inflation impossible to produce and a swirling drain of deflation threatening the confidence of their currencies.
If low yields are intriguing, consider the gains in gold and silver to be nothing short of demanding attention. Both metals have been on a hyperbolic flight path since May. On Tuesday, silver rocketed through the $19/ounce level, with a gain of more than 8 cents per ounce. Gold topped $1550, and is trading at record levels in most of the world. Only the super-strong dollar is keeping gold's level down, but only in the United States.
Stocks are going to continue a fluctuation with emphasis on the downside for the foreseeable future due to deteriorating economic conditions globally.
Cash is becoming king-like in many countries, with a focus on US dollars, but that dynamic will play out to flatten the wallets of nearly everyone holding hope in fiat currency. Central bankers have reached the proverbial brick wall, with nothing to save economies from crashing headlong into a solvency crisis, an immovable force from which there is no return, literally, as there will not only be no return on capital, but, in many regards - as is the case with negative rates - no return OF capital.
At the Close, Tuesday, September 3, 2019:
Dow Jones Industrial Average: 26,118.02, -285.26 (-1.08%)
NASDAQ: 7,874.16, -88.72 (-1.11%)
S&P 500: 2,906.27, -20.19 (-0.69%)
NYSE Composite: 12,663.40, -73.48 (-0.58%)
Low yields are indicative of demand, and, with some $19 trillion of government bonds globally yielding negative numbers, US bonds are attractive by comparison. This dynamic is not going to end soon, as Japan and the Euro area - the two economies with the most negative yields - are in no-win conditions, with inflation impossible to produce and a swirling drain of deflation threatening the confidence of their currencies.
If low yields are intriguing, consider the gains in gold and silver to be nothing short of demanding attention. Both metals have been on a hyperbolic flight path since May. On Tuesday, silver rocketed through the $19/ounce level, with a gain of more than 8 cents per ounce. Gold topped $1550, and is trading at record levels in most of the world. Only the super-strong dollar is keeping gold's level down, but only in the United States.
Stocks are going to continue a fluctuation with emphasis on the downside for the foreseeable future due to deteriorating economic conditions globally.
Cash is becoming king-like in many countries, with a focus on US dollars, but that dynamic will play out to flatten the wallets of nearly everyone holding hope in fiat currency. Central bankers have reached the proverbial brick wall, with nothing to save economies from crashing headlong into a solvency crisis, an immovable force from which there is no return, literally, as there will not only be no return on capital, but, in many regards - as is the case with negative rates - no return OF capital.
At the Close, Tuesday, September 3, 2019:
Dow Jones Industrial Average: 26,118.02, -285.26 (-1.08%)
NASDAQ: 7,874.16, -88.72 (-1.11%)
S&P 500: 2,906.27, -20.19 (-0.69%)
NYSE Composite: 12,663.40, -73.48 (-0.58%)
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