As odd as the recent equity market has been, today's action ranked right up there in bizarro-land.
First, the Chicago PMI was leaked a few minutes early (which has been alleged to have happened at least twice in the past), sending stocks screaming lower. The 51.6 figure was well below estimates of 55.0, sending stocks to their lows of the day just after 10:00 am EDT, the Dow off by some 140 points. An hour later, however, all was forgotten and presumably forgiven, as the Dow briefly peaked above the flat line.
The remainder of the session had the NASDAQ modestly higher, the S&P hugging the unchanged mark and the Dow drifting about in the red.
That was until the very final minutes of the day, when the Russell 2000 rebalancing sent stocks screeching lower once again, all of the indices finishing near their lows, ending the first half of the trading year with a resounding thud.
Even though US stocks have out-performed just about every other asset class on the planet over the first six months of 2013, the last month has been quite the disappointment, June being the only down month of the year for the major averages, and the first down month for the Dow Industrials since November, 2012.
For the week, the Dow gained 110 points, down both Monday and Friday, while up sharply mid-week. The NASDAQ picked up 46 points for the week, while the S&P 500 added 13.85. Each of the indices closed out the month, the second quarter and the first half below their 50-day moving averages.
While gains in equities were easy to come by in the first half of the year, the second half holds many challenges, especially with many funds and big hitters already sitting on impressive gains. Most of the major brokerages have been diddling with second half projections, most of they of the rosy variety.
We shall see as the market opens with a holiday shortened week on July 1.
Gold reversed course from yesterday's manic selloff, while silver added more than 5% on the day, a possible market reversal for the precious metals.
Dow 14,909.60, -114.89 (0.76%)
NASDAQ 3,403.25, +1.38 (0.04%)
S&P 500 1,606.28, -6.92 (0.43%)
NYSE Composite 9,121.62, -21.94 (0.24%)
NASDAQ Volume 2,274,401,750
NYSE Volume 4,899,537,500
Combined NYSE & NASDAQ Advance - Decline: 3342-3116
Combined NYSE & NASDAQ New highs - New lows: 214-53
WTI crude oil: 96.56, -0.49
Gold: 1,231.30, +19.70
Silver: 19.57, +1.037
Friday, June 28, 2013
Thursday, June 27, 2013
Stocks Higher for Third Straight Session; Dow Back Above 15,000; Gold Below $1200
After Ben Bernanke scared the entire investing universe last week, his captains - Fed governors from the various districts - have been talking it back, generally saying that the economy isn't strong enough to support even a tapering of QE, which comes as welcome news to the money-hoarders on Wall Street, who like nothing better than access to capital at close to zero percent with which to play about in their rigged lottery.
So much for ever having a balanced, unstructured, free market that isn't completely held hostage to central planning by the Federal Reserve Bank. With this kind of thinking predominant, it doesn't take much in the way of analytical skills or market knowledge to profit in equities, since, it is, as they say, "the only game in town," complete with the promise of higher returns than bonds and - with the Fed keeping the monetary spigot wide open - limited downside risk.
That's it. We're back to the Fed and big banks running the show, letting savers get slaughtered because the market will not be allowed to do what it normally would: take a pause, maybe a 10-15% correction, and wipe out the mal-investments.
All this means is that it will take a total collapse of the global economy (or at least a large share of it) to get markets back into what would have been considered "normal" just a few years ago.
Zero percent interest rates are not normal. Central banks purchasing every kind of asset - in quantity - that isn't tied down is not normal. The past five years since the crash in September-October of 2008 have been an aberration and when economies return to sound fiscal and monetary practices, the collapse will be colossal, sparing nobody.
Be prepared. There's a good reason for gold and silver to be selling off dramatically while equity prices soar. The fed and their cohort central bankers cannot stop the deflationary spiral their own policies have created. Continuing a non-discount of money over time is, in itself, the root of deflation, yet the Fed seems content to put their own feet forward into the abyss.
In a nutshell, the problem lies with their downward pressure on gold, which has been in backwardation for months. Gold is collateral, meaning it is at the root of the monetary system. By artificially pressuring it ever lower, demand increases, though, because of hoarding, supply eventually becomes non-existent, all other currencies become devoid of value, thus creating the Pandora's-box-like situation where the price of gold is near nothing, but none can be purchased for fiat because all faith has been lost in currencies built on sand, leading, quite logically, to barter, the most primitive, yet most reliable, form of trade.
This is precisely where the current policy-driven, over-sensitized, can't-take-a-paper-loss, unbalanced global economy is headed. It could take as little as a month or as long as 20 years for the entire system to unwind, which is the conundrum currently facing the peoples of the planet. When it does, those barren, rice-paddy farmers in Southeast Asia will be better off than paper billionaires with nothing but broken promises, McMansions and zero productive skills, because the farmers, at least, will be able to raise their own food and have something to eat.
An eye for an eye, or, more aptly, a plot of land for an ounce of gold.
Nice message for an upbeat stock market day, huh? Keep buying into the system of lies, greed, avarice and contempt for one's fellow man and see how far that gets you. When the Dow is at 20,000 or 30,000 or higher and gold is only $500 an ounce, Adam Smith's invisible hand will come clapping down on all the broken rules of economics and crush the fiat currencies flat.
Dow 15,024.49, +114.35 (0.77%)
NASDAQ 3,401.86, +25.64 (0.76%)
S&P 500 1,613.20, +9.94 (0.62%)
NYSE Composite 9,143.55, +76.28 (0.84%)
NASDAQ Volume 1,643,086,125
NYSE Volume 3,722,540,750
Combined NYSE & NASDAQ Advance - Decline: 5311-1227
Combined NYSE & NASDAQ New highs - New lows: 218-60
WTI crude oil: 97.05, +1.55
Gold: 1,198.20, -31.60
Silver: 18.42, -0.162
So much for ever having a balanced, unstructured, free market that isn't completely held hostage to central planning by the Federal Reserve Bank. With this kind of thinking predominant, it doesn't take much in the way of analytical skills or market knowledge to profit in equities, since, it is, as they say, "the only game in town," complete with the promise of higher returns than bonds and - with the Fed keeping the monetary spigot wide open - limited downside risk.
That's it. We're back to the Fed and big banks running the show, letting savers get slaughtered because the market will not be allowed to do what it normally would: take a pause, maybe a 10-15% correction, and wipe out the mal-investments.
All this means is that it will take a total collapse of the global economy (or at least a large share of it) to get markets back into what would have been considered "normal" just a few years ago.
Zero percent interest rates are not normal. Central banks purchasing every kind of asset - in quantity - that isn't tied down is not normal. The past five years since the crash in September-October of 2008 have been an aberration and when economies return to sound fiscal and monetary practices, the collapse will be colossal, sparing nobody.
Be prepared. There's a good reason for gold and silver to be selling off dramatically while equity prices soar. The fed and their cohort central bankers cannot stop the deflationary spiral their own policies have created. Continuing a non-discount of money over time is, in itself, the root of deflation, yet the Fed seems content to put their own feet forward into the abyss.
In a nutshell, the problem lies with their downward pressure on gold, which has been in backwardation for months. Gold is collateral, meaning it is at the root of the monetary system. By artificially pressuring it ever lower, demand increases, though, because of hoarding, supply eventually becomes non-existent, all other currencies become devoid of value, thus creating the Pandora's-box-like situation where the price of gold is near nothing, but none can be purchased for fiat because all faith has been lost in currencies built on sand, leading, quite logically, to barter, the most primitive, yet most reliable, form of trade.
This is precisely where the current policy-driven, over-sensitized, can't-take-a-paper-loss, unbalanced global economy is headed. It could take as little as a month or as long as 20 years for the entire system to unwind, which is the conundrum currently facing the peoples of the planet. When it does, those barren, rice-paddy farmers in Southeast Asia will be better off than paper billionaires with nothing but broken promises, McMansions and zero productive skills, because the farmers, at least, will be able to raise their own food and have something to eat.
An eye for an eye, or, more aptly, a plot of land for an ounce of gold.
Nice message for an upbeat stock market day, huh? Keep buying into the system of lies, greed, avarice and contempt for one's fellow man and see how far that gets you. When the Dow is at 20,000 or 30,000 or higher and gold is only $500 an ounce, Adam Smith's invisible hand will come clapping down on all the broken rules of economics and crush the fiat currencies flat.
Dow 15,024.49, +114.35 (0.77%)
NASDAQ 3,401.86, +25.64 (0.76%)
S&P 500 1,613.20, +9.94 (0.62%)
NYSE Composite 9,143.55, +76.28 (0.84%)
NASDAQ Volume 1,643,086,125
NYSE Volume 3,722,540,750
Combined NYSE & NASDAQ Advance - Decline: 5311-1227
Combined NYSE & NASDAQ New highs - New lows: 218-60
WTI crude oil: 97.05, +1.55
Gold: 1,198.20, -31.60
Silver: 18.42, -0.162
Wednesday, June 26, 2013
Stocks Higher Despite Slower Economy
Editor's Note: Due to a scheduling conflict, the normal posting of Money Daily will be delayed until about 8:30-9:00 pm EDT this evening.
Stocks are in the midst of a strong rally Wednesday afternoon, despite a sharp, downward revision to first quarter GDP - to 1.8% - from 2.4% reported a month ago by the Commerce Department.
That bit of discouraging news meant nothing to Wall Street stock pickers, who only see higher prices and speculative gains in the face of the downdraft from the past two weeks.
With the second quarter coming to a close this Friday and a new June employment report out next Friday, this appears to be a case of getting in while the getting is good. Gains may be short-lived, though the "bad news is good" crowd, who thinks that slower economic growth will forestall the slowing of asset purchases by Chairman Ben Bernanke and his merry gang of bond-buyers.
More to follow...
Update: Turned out to by a typical low-volume ramp with a huge gap at the open. Whether the fraudsters-in-chiefs can manufacture another 90 Dow points by Friday - to get that index back over the magic 15,000 mark - is still in doubt.
Anyone still bullish knows that chartists will take everyone to task if the market doesn't make new highs from here, so resolution on a primary trend should be played out within the next seven to ten trading days.
If this recent, minor downdraft turns out to be garden variety for the "Fed" era, it's up, up and away, but stocks will be valued for perfection. It is still difficult to see how the status quo can continue to maintain smug certainty about equity values in the long run.
Dow 14,910.14, +149.83 (1.02%)
NASDAQ 3,376.22, +28.34 (0.85%)
S&P 500 1,603.26, +15.23 (0.96%)
NYSE Composite 9,067.27, +78.00 (0.87%)
NASDAQ Volume 1,641,171,250
NYSE Volume 3,983,478,000
Combined NYSE & NASDAQ Advance - Decline: 4360-2148
Combined NYSE & NASDAQ New highs - New lows: 160-100
WTI crude oil: 95.50, +0.18
Gold: 1,229.80, -43.30
Silver: 18.59, -0.939
Stocks are in the midst of a strong rally Wednesday afternoon, despite a sharp, downward revision to first quarter GDP - to 1.8% - from 2.4% reported a month ago by the Commerce Department.
That bit of discouraging news meant nothing to Wall Street stock pickers, who only see higher prices and speculative gains in the face of the downdraft from the past two weeks.
With the second quarter coming to a close this Friday and a new June employment report out next Friday, this appears to be a case of getting in while the getting is good. Gains may be short-lived, though the "bad news is good" crowd, who thinks that slower economic growth will forestall the slowing of asset purchases by Chairman Ben Bernanke and his merry gang of bond-buyers.
More to follow...
Update: Turned out to by a typical low-volume ramp with a huge gap at the open. Whether the fraudsters-in-chiefs can manufacture another 90 Dow points by Friday - to get that index back over the magic 15,000 mark - is still in doubt.
Anyone still bullish knows that chartists will take everyone to task if the market doesn't make new highs from here, so resolution on a primary trend should be played out within the next seven to ten trading days.
If this recent, minor downdraft turns out to be garden variety for the "Fed" era, it's up, up and away, but stocks will be valued for perfection. It is still difficult to see how the status quo can continue to maintain smug certainty about equity values in the long run.
Dow 14,910.14, +149.83 (1.02%)
NASDAQ 3,376.22, +28.34 (0.85%)
S&P 500 1,603.26, +15.23 (0.96%)
NYSE Composite 9,067.27, +78.00 (0.87%)
NASDAQ Volume 1,641,171,250
NYSE Volume 3,983,478,000
Combined NYSE & NASDAQ Advance - Decline: 4360-2148
Combined NYSE & NASDAQ New highs - New lows: 160-100
WTI crude oil: 95.50, +0.18
Gold: 1,229.80, -43.30
Silver: 18.59, -0.939
Tuesday, June 25, 2013
For a Change, Some Gains; Stocks Nearly Recover Monday's Losses
Stocks shook off Monday's downdraft, nearly reversing all of Monday's losses, but not quite, and the effort was very half-hearted on low-to-average volume.
This was wholly expected, as markets seldom go straight up or down. Some buyers saw value in beaten-down names; banking stocks were particularly strong with names like Bank of America (BAC), Citigroup (C) and JP Morgan Chase (JPM) all sporting solid gains.
Stocks were buoyed by early-day catalysts in the form of fairly robust data on durable goods, the S&P/Case-Shiller residential real estate series and an exceptionally high level of consumer confidence of 81.4 from the Conference Board, the highest such reading since January of 2008, which is somewhat ironic, as that high confidence figure came just months before one of the worst stock market crashes in history and a lengthy, deep recession.
New home sales showed gains in May up from 466K in April, to 476K, though figures may be skewed somewhat as they are for signed contracts, not closings, and are for a reporting period prior to interest and mortgage rates rising.
The major indices are still in a dicey spot, well off the May 28 highs and showing losses for the month of June, historically the weakest month for stock returns. And, with August and September - also weak months by historical standards - just ahead, the stage is set for earnings to move the market one way or the other, though indications are that the second quarter will not be favorable for stocks. Pre-announcements are running 7-1 on the negative side, a chilling effect on taking positions in advance of earnings and perhaps an element of today's less-than-awe-inspiring one-day bounce.
Plenty of technical damage has been done to markets over the past 2 1/2 weeks and the Federal Reserve is employing the only pokicy tool it has remaining - jawboning the market by trotting out one Fed governor after another with carefully crafted speech-lines, jokingly referred to as the "other" FOMC, or Federal Open Mouth Committee.
The question of the day was whether good news on the economy is actually bad news for stocks, insofar as Bernanke has promised to taper bond purchases if the economy shows strength, a move that in all likelihood will continue the rise in rates and place bonds in a much better position, vis-a-vis stocks. If such is the case, the market should have turned lower, but the recent selling prevented that, though in the back of every traders mind, the new reality of a market without artificial stimulus from the Fed looms largely.
Dow 14,760.31, +100.75 (0.69%)
NASDAQ 3,347.89, +27.13 (0.82%)
S&P 500 1,588.03, +14.94 (0.95%)
NYSE Composite 8,996.01, +103.98 (1.17%)
NASDAQ Volume 1,556,236,875
NYSE Volume 3,720,042,250
Combined NYSE & NASDAQ Advance - Decline: 4983-1582
Combined NYSE & NASDAQ New highs - New lows: 105-185
WTI crude oil: 95.32, +0.14
Gold: 1,275.10, -2.00
Silver: 19.53, +0.033
This was wholly expected, as markets seldom go straight up or down. Some buyers saw value in beaten-down names; banking stocks were particularly strong with names like Bank of America (BAC), Citigroup (C) and JP Morgan Chase (JPM) all sporting solid gains.
Stocks were buoyed by early-day catalysts in the form of fairly robust data on durable goods, the S&P/Case-Shiller residential real estate series and an exceptionally high level of consumer confidence of 81.4 from the Conference Board, the highest such reading since January of 2008, which is somewhat ironic, as that high confidence figure came just months before one of the worst stock market crashes in history and a lengthy, deep recession.
New home sales showed gains in May up from 466K in April, to 476K, though figures may be skewed somewhat as they are for signed contracts, not closings, and are for a reporting period prior to interest and mortgage rates rising.
The major indices are still in a dicey spot, well off the May 28 highs and showing losses for the month of June, historically the weakest month for stock returns. And, with August and September - also weak months by historical standards - just ahead, the stage is set for earnings to move the market one way or the other, though indications are that the second quarter will not be favorable for stocks. Pre-announcements are running 7-1 on the negative side, a chilling effect on taking positions in advance of earnings and perhaps an element of today's less-than-awe-inspiring one-day bounce.
Plenty of technical damage has been done to markets over the past 2 1/2 weeks and the Federal Reserve is employing the only pokicy tool it has remaining - jawboning the market by trotting out one Fed governor after another with carefully crafted speech-lines, jokingly referred to as the "other" FOMC, or Federal Open Mouth Committee.
The question of the day was whether good news on the economy is actually bad news for stocks, insofar as Bernanke has promised to taper bond purchases if the economy shows strength, a move that in all likelihood will continue the rise in rates and place bonds in a much better position, vis-a-vis stocks. If such is the case, the market should have turned lower, but the recent selling prevented that, though in the back of every traders mind, the new reality of a market without artificial stimulus from the Fed looms largely.
Dow 14,760.31, +100.75 (0.69%)
NASDAQ 3,347.89, +27.13 (0.82%)
S&P 500 1,588.03, +14.94 (0.95%)
NYSE Composite 8,996.01, +103.98 (1.17%)
NASDAQ Volume 1,556,236,875
NYSE Volume 3,720,042,250
Combined NYSE & NASDAQ Advance - Decline: 4983-1582
Combined NYSE & NASDAQ New highs - New lows: 105-185
WTI crude oil: 95.32, +0.14
Gold: 1,275.10, -2.00
Silver: 19.53, +0.033
Monday, June 24, 2013
Stocks Open Week to Downside on China News, Continued Bond Selling
Stocks took heavy punishment to the mid-section, right from the opening bell, rallied midday, but eventually fell out of the ring late in the session.
Much of the distaste for equities came from China, where the Shanghai index had its worst day in four years and is in a bear market. The PBOC has openly declared war on speculation, seeking to tighten via overnight lending rates, a move that cannot be good for markets in the short term, but, long term, may hold some weight as a key to global recovery.
The Dow slipped as many as 248 points in the early going, nearly erasing all of its losses mid-afternoon on some very dovish comments by usually-hawkish Dallas Fed President Richard Fisher, but finished well into the red zone on very late, but very spirited, trading.
The NASDAQ suffered its first four-day losing streak since November of 2011, which says a great deal about where the market has been and maybe even more about where it is going. The Dow and S&P closed lower for the third day in the last four, with the S&P closing below key support levels. The Dow Transports were monkey-hammered, suggesting that the primary trend has changed from bullish to bearish, which, if so, would be a huge development, though it's still too early to tell.
Between China liquidity concerns and a large sell-off in the 10-year note - hitting a high of 2.63 before settling back to 2.57 - the equity markets were whipsawed though the middle of the day.
Signs that the US economy is improving continue apace, with the Dallas Fed manufacturing index posting an impressive gain in the latest survey. Naturally, the market took this as another sign that the Fed would be backing off its bond purchases in the near future, so, despite being unabashedly positive economic news, the markets took it in exactly the opposite manner.
Volume was very high for a summer session, indicative of the heightened interest since the Fed announcement last week. Declining issues outnumbered advancing one by a 4:1 margin. New lows had a 10:1 advantage over new highs, the most since March of 2009, a significant development, indicating severe short-term weakness and - to the bulls - a potential buying opportunity
With the second quarter running down and Fed speakers dotting the landscape this week, it might be a good time for traders to relent, especially those on the short side. The major indices are well into correction territory and taking some profits off the table might not be a bad idea, with a short week just prior to earnings season. Markets close at 1:00 pm EDT on Wednesday, July 3, are closed for the 4th of July and will have a full - though not well-attended - session on July 5.
Any good trader and even some marginal ones, should have been able to book solid profits on the downside move from the prior two weeks and may want to reassess while the market gyrates through the end of the quarter and a holiday week.
The volatility of the past few weeks may subside somewhat, having moved sharply during that time, so taking a break in what is traditionally a time to do so, seems not only smart, but almost instinctive.
Dow 14,659.56, -139.84 (0.94%)
NASDAQ 3,320.76, -36.49 (1.09%)
S&P 500 1,573.09, -19.34 (1.21%)
NYSE Composite 8,892.02, -126.53 (1.40%)
NASDAQ Volume 1,980,708,750
NYSE Volume 5,304,444,000
Combined NYSE & NASDAQ Advance - Decline: 1306-5469
Combined NYSE & NASDAQ New highs - New lows: 68-683
WTI crude oil: 95.18, +1.49
Gold: 1,277.10, -14.90
Silver: 19.49, -0.466
Much of the distaste for equities came from China, where the Shanghai index had its worst day in four years and is in a bear market. The PBOC has openly declared war on speculation, seeking to tighten via overnight lending rates, a move that cannot be good for markets in the short term, but, long term, may hold some weight as a key to global recovery.
The Dow slipped as many as 248 points in the early going, nearly erasing all of its losses mid-afternoon on some very dovish comments by usually-hawkish Dallas Fed President Richard Fisher, but finished well into the red zone on very late, but very spirited, trading.
The NASDAQ suffered its first four-day losing streak since November of 2011, which says a great deal about where the market has been and maybe even more about where it is going. The Dow and S&P closed lower for the third day in the last four, with the S&P closing below key support levels. The Dow Transports were monkey-hammered, suggesting that the primary trend has changed from bullish to bearish, which, if so, would be a huge development, though it's still too early to tell.
Between China liquidity concerns and a large sell-off in the 10-year note - hitting a high of 2.63 before settling back to 2.57 - the equity markets were whipsawed though the middle of the day.
Signs that the US economy is improving continue apace, with the Dallas Fed manufacturing index posting an impressive gain in the latest survey. Naturally, the market took this as another sign that the Fed would be backing off its bond purchases in the near future, so, despite being unabashedly positive economic news, the markets took it in exactly the opposite manner.
Volume was very high for a summer session, indicative of the heightened interest since the Fed announcement last week. Declining issues outnumbered advancing one by a 4:1 margin. New lows had a 10:1 advantage over new highs, the most since March of 2009, a significant development, indicating severe short-term weakness and - to the bulls - a potential buying opportunity
With the second quarter running down and Fed speakers dotting the landscape this week, it might be a good time for traders to relent, especially those on the short side. The major indices are well into correction territory and taking some profits off the table might not be a bad idea, with a short week just prior to earnings season. Markets close at 1:00 pm EDT on Wednesday, July 3, are closed for the 4th of July and will have a full - though not well-attended - session on July 5.
Any good trader and even some marginal ones, should have been able to book solid profits on the downside move from the prior two weeks and may want to reassess while the market gyrates through the end of the quarter and a holiday week.
The volatility of the past few weeks may subside somewhat, having moved sharply during that time, so taking a break in what is traditionally a time to do so, seems not only smart, but almost instinctive.
Dow 14,659.56, -139.84 (0.94%)
NASDAQ 3,320.76, -36.49 (1.09%)
S&P 500 1,573.09, -19.34 (1.21%)
NYSE Composite 8,892.02, -126.53 (1.40%)
NASDAQ Volume 1,980,708,750
NYSE Volume 5,304,444,000
Combined NYSE & NASDAQ Advance - Decline: 1306-5469
Combined NYSE & NASDAQ New highs - New lows: 68-683
WTI crude oil: 95.18, +1.49
Gold: 1,277.10, -14.90
Silver: 19.49, -0.466
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