Stocks fell today, first hard, then made a daylong comeback to close near the unchanged mark.
It was rather a random day in the world of high finance. Ten-year and 30-year treasuries each closed off a pip, 2.21 and 2.93, respectively, while the 2-year note budged upward from 0.97 to 0.98, tightening and flattening the spread. It wasn't a monumental move, but noticeable to anyone paying attention. The market didn't really appreciate the boost in the fed funds rate and the displeasure is being voiced by various, subtle means, like the desperation in high yields, and the shut-off of the banking spigot that funded stock buybacks for most of the last five years.
It's probably better, right now, to keep a close eye on the bond market. It may turn out to be the place for volatility and profit in 2016, especially if the Federal Reserve follows through on their plans for three or four more rate hikes by this time next year. That is an unlikely event, though "normalization" is what the Fed continues to say they are aiming for, though a truly normal economy won't likely materialize for three or four more years, if they're lucky.
To have a 10-year treasury yielding 4-5% would be quite an accomplishment by 2019 or 2020, considering all the damage already done by over a decade of fed fund rates at one percent or lower.
Equity markets were decidedly dull, as there are few trades to be made of any importance this late in the game, though the markets are still well below all-time highs reached in May, especially the broad gauge of the S&P, which cannot seem to get out of its own way.
Today was mostly gibberish, as will likely be the case the remainder of the week, and the year. It's hard to draw any conclusions from the last week's trading in a calendar year. The first week of January will be much more insightful.
WTI crude was slapped back down from last week's euphoric and ridiculous closing level, finishing the day at 36.72/barrel. Anyone calling a bottom around here just hasn't considered the slack in the economy and the production glut facing producers. It's a huge problem, but nobody wants to cut production, even at these lower prices, constituting a possible new normal.
S&P 500, 2,056.50, -4.49 (0.22%)
Dow, 17,528.27, -23.90 (0.14%)
NASDAQ, 5,040.99, -7.51 (0.15%)
Monday, December 28, 2015
Wednesday, December 23, 2015
China Steel Exports To USA Subject To 256% Tariff
Remember, folks, the US Department of Commerce has your backs.
The department is recommending that the United States impose a tariff on steel imports from China of 256%, because they feel China has been dumping steel on the market and causing a severe disruption in the price, negatively affecting US steel producers.
Gee, really? What's next, tariffs on electronics, cars, just about anything you buy at Wal-Mart or nearly anywhere in America?
Where's the great Ben Bernanke when you need him? You know, the former Chairman of the Federal Reserve who is an EXPERT on the Great Depression.
Why do we need the Big Bernank now? Because, his expertise would prevail on our glorious government goofballs that protectionism is exactly what made the Great Depression so (not) great.
You take depressed markets overfull of inventory, tack on tariffs and you get exactly what the Fed wants in order to hide its horrible policies: velocity of money at zero, falling wages, layoffs and now, the kicker, goods too expensive for anybody to buy. Pure genius, these guys looking out for all of us little people.
This is just the beginning. Expect to see more trade protectionism going forward and more countries falling into recession. Add it all up and you have Great Depression 2.0.
It's not going to happen all of a sudden, because the Fed is still fighting deflation. But, when the going gets rough, really rough, like when Wall Street (hell) freezes over and commits suicide in a crash of stocks of companies that have been repurchasing their own shares for the past six years and they lay off millions of workers, that's when the government will move in full force with trade restrictions and tariffs so that Americans can't purchase anything from the evil Chinamen.
Maybe somebody should have thought about this before we sent all of our manufacturing base over to the Red Dragons. Then again, maybe they did.
Meanwhile, the Santa Claus rally continues on Wall Street. The S&P gained enough today to show a small profit for the year and the Dow Jones Industrials are closing in on being black for 2015.
The department is recommending that the United States impose a tariff on steel imports from China of 256%, because they feel China has been dumping steel on the market and causing a severe disruption in the price, negatively affecting US steel producers.
Gee, really? What's next, tariffs on electronics, cars, just about anything you buy at Wal-Mart or nearly anywhere in America?
Where's the great Ben Bernanke when you need him? You know, the former Chairman of the Federal Reserve who is an EXPERT on the Great Depression.
Why do we need the Big Bernank now? Because, his expertise would prevail on our glorious government goofballs that protectionism is exactly what made the Great Depression so (not) great.
You take depressed markets overfull of inventory, tack on tariffs and you get exactly what the Fed wants in order to hide its horrible policies: velocity of money at zero, falling wages, layoffs and now, the kicker, goods too expensive for anybody to buy. Pure genius, these guys looking out for all of us little people.
This is just the beginning. Expect to see more trade protectionism going forward and more countries falling into recession. Add it all up and you have Great Depression 2.0.
It's not going to happen all of a sudden, because the Fed is still fighting deflation. But, when the going gets rough, really rough, like when Wall Street (hell) freezes over and commits suicide in a crash of stocks of companies that have been repurchasing their own shares for the past six years and they lay off millions of workers, that's when the government will move in full force with trade restrictions and tariffs so that Americans can't purchase anything from the evil Chinamen.
Maybe somebody should have thought about this before we sent all of our manufacturing base over to the Red Dragons. Then again, maybe they did.
Meanwhile, the Santa Claus rally continues on Wall Street. The S&P gained enough today to show a small profit for the year and the Dow Jones Industrials are closing in on being black for 2015.
Tuesday, December 22, 2015
Stocks' Santa Rally Based On Nothing In Particular
The word for the day was "oversold," in essence green lighting all the algos on the belief that stocks were still undervalued, despite the S&P 500 average P/E of 22, when the norm is 15.
Whatever sparked the rally du jour must have been a highly-held secret, because nothing much has changed and today's economic news - third GDP revision for the 3rd quarter came in at an even 2%, and existing home sales were down 10.5% month-over-month (the lowest annualized rate since April 2014), and that was before the Fed and the banks hiked interest rates.
As for GDP, the third quarter reading was 0.1% lower than the previous estimate, and down sharply from the second quarter, when the economy supposedly grew at a mind-blowing 3.9%. Adding in the 1st quarter's decline of 0.7%, the fourth quarter will have to have grown by 2.8%, a seemingly reasonable quest, to get the entire year at a 2% growth rate. What a recovery!
Given that retail sales have been sluggish at best and inventories rising, it will be a struggle for the economy to show a gain of that size. However, the brilliant economists at the BLS certainly can massage the numbers enough to wring out nearly 3% growth, somehow.
So, Santa Claus has arrived on Wall Street. There are just two more days of trading this week and six total for the year, and stocks are showing that 2015 will end essentially flat.
Here are closing prices at the end of 2014:
S&P: 2,058.90
Dow: 17,823.07
NASDAQ: 4,736.05
The NAZ looks to have gains in the bag, while the S&P and Dow have some work left to do. Ho, ho, ho.
Today's closing numbers:
S&P 500: 2,038.97, +17.82 (0.88%)
Dow: 17,417.27, +165.65 (0.96%)
NASDAQ: 5,001.11, +32.19 (0.65%)
Whatever sparked the rally du jour must have been a highly-held secret, because nothing much has changed and today's economic news - third GDP revision for the 3rd quarter came in at an even 2%, and existing home sales were down 10.5% month-over-month (the lowest annualized rate since April 2014), and that was before the Fed and the banks hiked interest rates.
As for GDP, the third quarter reading was 0.1% lower than the previous estimate, and down sharply from the second quarter, when the economy supposedly grew at a mind-blowing 3.9%. Adding in the 1st quarter's decline of 0.7%, the fourth quarter will have to have grown by 2.8%, a seemingly reasonable quest, to get the entire year at a 2% growth rate. What a recovery!
Given that retail sales have been sluggish at best and inventories rising, it will be a struggle for the economy to show a gain of that size. However, the brilliant economists at the BLS certainly can massage the numbers enough to wring out nearly 3% growth, somehow.
So, Santa Claus has arrived on Wall Street. There are just two more days of trading this week and six total for the year, and stocks are showing that 2015 will end essentially flat.
Here are closing prices at the end of 2014:
S&P: 2,058.90
Dow: 17,823.07
NASDAQ: 4,736.05
The NAZ looks to have gains in the bag, while the S&P and Dow have some work left to do. Ho, ho, ho.
Today's closing numbers:
S&P 500: 2,038.97, +17.82 (0.88%)
Dow: 17,417.27, +165.65 (0.96%)
NASDAQ: 5,001.11, +32.19 (0.65%)
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