As Expected, Dow Falls Back Into Sub-18,000 Range

Editor's Note: Apologies are in order for the tardiness of the extended post, but the publisher has been trying to cope with an unfair labor situation and other troublesome issues. Those are now past. This blog shall forge ahead.

The week ended on a down note, as stocks fell across the board on the US indices.

While the Dow was the only one of the three major averages to close out the week with a gain, it still did not manage a close above the now-legendary 18,000 mark. Likewise, the S&P closed below 2100 and the NASDAQ slid further into sub-5000 numbers.

More institutional voices added to the chorus of caution as the week wore on, including Bill Gross, George Soros and Stan Drunkenmiller. Global condition stubbornly refuse to improve, despite vain attempts at stimulation by central banks, governments and the financial media.

US bond yields fell across the spectrum, with the curve flattening. The 10-year is at levels not seen in months, while globally, sub-zero percent returns have expanded to over $10 trillion in the aggregate.

Clearly, what the markets need is a cleansing of excessive and misplaced debt, something the authorities have managed to avoid for the past seven years and counting. The latest bailout comes via the US House of Representatives, putting US taxpayers on the hook for a significant portion of Puerto Rico's unpayable obligations.

The House overwhelmingly passed a package that would establish a financial control board made up of more bureaucrats, those indirectly responsible for the various aspects of the global malaise. The measure is nothing more than further can-kicking, pushing the debt and problems further out rather than addressing the underlying problems.

None of what governments do, in terms of rescue packages or stimulus measures, has made or will make any difference whatsoever. They simply borrow more, adding to the national debt, which, closing in on $20 trillion in the US, will never be repaid.

The sooner the farce of ZIRP, NIRP, QE, debt spending, and global free trade are foreclosed upon, the sooner the global economies can begin functioning as centers of capitalism.

Hoping for change will not bring change. Usually, change requires more radical measures. Globally, politicians all appear to be built from the same model, caring only to keep their positions of power and persuasion. That has to change, though real change begins at the micro-level, not the macro.

For now, heading into Northern Hemispheric summer, the course has not changes, despite storm clouds on the horizon.

The coming week offers four central bank meetings and pronouncements, in Switzerland, the UK, Japan and the US, where the FOMC is expected to keep rates unchanged on Wednesday, June 15.

For the Week:
Dow: +58.28 (+0.33%)
S&P 500: -3.08 (-0.15%)
NASDAQ: -47.97 (-0.97%)

Seriously? Again? Friday's Figures:
S&P 500: 2,096.07, -19.41 (0.92%)
Dow: 17,865.34, -119.85 (0.67%)
NASDAQ: 4,894.55, -64.07 (1.29%)

Crude Oil 48.88 -3.32% Gold 1,276.30 +0.28% EUR/USD 1.1253 +0.01% 10-Yr Bond 1.64 -2.44% Corn 422.25 -1.00% Copper 2.03 -0.61% Silver 17.33 +0.36% Natural Gas 2.92 -1.65% Russell 2000 1,163.93 -1.46% VIX 17.03 +16.33% BATS 1000 20,677.17 0.00% GBP/USD 1.4255 -0.04% USD/JPY 106.9400 0.00%

Dow Touches 18,000 Agains, Fails

After a shaky start, the Dow - and the other equity averages - erased the morning's losses and finally managed to end the day with just minor losses.

The industrials punched through the 18,000 mark again, but could not sustain the rally, closing just shy of that critical, psychological marker.

This pattern has been in play more often than should be mentioned, prompting belief that the Federal Reserve itself is intervening in stocks, something - in this dystopian reality - that should surprise nobody.

In any case, if the Fed has "the back" of all market plungers, then why not just go ahead and buy your ticket to the good life, via Amazon, or Google, or Apple, perhaps even taking a flyer on the occasional small cap or some oil driller?

If it were only so easy. A wise man once said, "if it was that easy, we'd all be rich." For the monied gangsters doing business on the South end of Manhattan island, perhaps it is so. But, they have other problems, like margin calls, undersized genitalia and assorted mental maladies.

The world of finance is especially rigged to make certain people rich. For the rest of us, it's pretty much a crap-shoot, which is why so many, especially since the economic calamity of 2008-09, have opted to not play any more.

Tomorrow is Friday, and, for much of the expanse of the great United States of America, the weather should be pleasant, if not outright spectacular. Punch in, punch out, grab an adult beverage and had for the patio. Fire up the grill and cook something.

Money doesn't buy happiness. There is surely more to living than counting your shekels. Besides, did you see the gains in silver the past two days?

Something is afoot.

Thursday's Troubled Trip:
S&P 500: 2,115.48, -3.64 (0.17%)
Dow: 17,985.19, -19.86 (0.11%)
NASDAQ: 4,958.62, -16.03 (0.32%)

Crude Oil 50.42 -0.28% Gold 1,271.90 -0.06% EUR/USD 1.1314 -0.04% 10-Yr Bond 1.68 -1.52% Corn 426.00 -1.22% Copper 2.04 0.00% Silver 17.28 +0.10% Natural Gas 2.95 +3.19% Russell 2000 1,181.20 -0.65% VIX 14.64 +3.98% BATS 1000 20,677.17 0.00% GBP/USD 1.4462 +0.02% USD/JPY 106.9945 +0.03%

Dow Closes Above 18,000; SPX Within 15 Points Of All-Time High; Silver Rockets Over 17; Cruce Oil At 11-Month High

No commentary required.

S&P 500: 2,119.12, +6.99 (0.33%)
Dow: 18,005.05, +66.77 (0.37%)
NASDAQ: 4,974.64, +12.89 (0.26%)

Crude Oil 51.52 +0.57% Gold 1,266.90 +0.36% EUR/USD 1.1402 +0.02% 10-Yr Bond 1.71 -0.41% Corn 432.50 +1.11% Copper 2.07 +0.34% Silver 17.11 +0.77% Natural Gas 2.85 -0.28% Russell 2000 1,188.95 +0.76% VIX 14.08 +0.21% BATS 1000 20,677.17 0.00% GBP/USD 1.4522 +0.03% USD/JPY 106.8950 0.00%

Stocks Rally, Then Fall, In Late-Day Trading

Roughly 2:15 pm EDT, all of the major indices in the US began selling off, apparently for no reason.

Probably more to the point is that the Dow Jones Industrial Average poked above the magical and mysterious 18,000 mark a few times during the session, but could not sustain a rally beyond it.

As has been often suggested and sometimes proven, if the stock market is made up more of psychology than fundamental reality, 18,000 is a price too far to pay for the Dow, even for the most bullish bulls in the china shop that is the NYSE and the NASDAQ.

In any case, stocks closed well off their highs and only a little closer to all-time highs, last seen more than a year ago.

This doesn't appear to be a positive sign for stocks; the truth is that stocks are selling at historically high valuations, a condition that normally precedes a sharp selloff. With the Fed heavily "invested" in stocks, today's sudden reversal of fortune does not bode well, either for the Fed's monetary gimmickry nor for rate increases any time this year.

Those who believe that stocks are the only game in town - and, there's an acronym for that: TINA (There Is No Alternative) - hang on to your hats, gents. The drop may be sudden and deep.

Ouch! That Might Leave A Mark:
S&P 500: 2,112.13, +2.72 (0.13%)
Dow: 17,938.28, +17.95 (0.10%)
NASDAQ: 4,961.75, -6.96 (0.14%)

Crude Oil 50.38 +0.04% Gold 1,247.30 +0.02% EUR/USD 1.1358 +0.04% 10-Yr Bond 1.71 -0.58% Corn 427.00 -0.06% Copper 2.05 +0.17% Silver 16.41 +0.07% Natural Gas 2.86 +1.82% Russell 2000 1,179.97 +0.26% VIX 14.05 +2.93% BATS 1000 20,677.17 0.00% GBP/USD 1.4540 +0.02% USD/JPY 107.3025 -0.03%

Janet Yellen And The Fed Are Dangerous To Your Well-Being

Apologies for the blaring headline, but this is getting a bit ridiculous. Truthfully, the headline suggested by our ace writer, Fearless Rick, had a definite Donald Trump tone to it, so it was scrapped in favor of the watered-down version.

For seven years - since the great collapse of 2008-09 - we've been listening to the babble coming out of the mouths of various Federal Reserve governors, and none of it was believable nor helpful. The US economy is circling the toilet drain, and various economies around the globe have already been flushed down the sinkhole of fetid monetary policy.

Here is just one quote from Janet Yellen in her address to the World Affairs Council (another bunch of clueless monetarists) that speaks volumes about what she knows and doesn't know:

I see good reason to expect that the positive forces supporting employment growth and higher inflation will continue to outweigh the negative ones.

If Mrs. Yellen would care to elaborate on just what those positive forces could be, it's expected that almost nothing would come out of her mouth, because she's doing what she does best, spout nonsense, in the best tradition of the Maestro himself, the venerable former Fed Chairman, Alan Greenspan. In all honesty, just what positive forces are there supporting employment growth after last week's disastrous non-farm payroll report for May, in which the US economy created a paltry 38,000 jobs when 164,000 were expected.

Additionally, Chair Yellen believes inflation is good for the economy, when most people in the real world would like to see some softening of prices and/or an increase in their wages. On the one hand, deflation in consumer prices stretches one's money; on the other, wage hikes usually occur when the economy is growing robustly. Since Americans can't have both at once, it is supposed that we'll get the former, and like it.

Naturally, the bozos on Wall Street took all of it in stride and just bought more overpriced stocks:


S&P 500: 2,109.41, +10.28 (0.49%)
Dow: 17,920.33, +113.27 (0.64%)
NASDAQ: 4,968.71, +26.20 (0.53%)

Crude Oil 49.69 +2.20% Gold 1,247.70 +0.39% EUR/USD 1.1362 -0.02% 10-Yr Bond 1.72 +1.12% Corn 426.75 +2.03% Copper 2.12 +0.31% Silver 16.49 +0.73% Natural Gas 2.81 +1.41% Russell 2000 1,176.62 +1.07% VIX 13.61 +1.04% BATS 1000 20,677.17 0.00% GBP/USD 1.4455 -0.14% USD/JPY 107.6200 +1.10%