Wall Street people pride themselves largely upon their particular abilities, especially those who use other people's money (OPM) to wager, gamble, or speculate on investments.
They brag, they boast, some of them actually tell the truth from time to time about their overall performance in the markets, whether their specialty be in stocks, bonds, commodities, or currencies.
Claims by some that they have peculiar, timely, or otherwise savvy insights into the future - akin to soothsayers, fortune tellers and gypsy tarot card readers - are, as time goes by, either validated or proven worthless. A spotty track record is by no means a cause for shame or contrition. Rather, these various prognosticators continue to spew pablum, intending to coerce a generally ill-informed public that their positions are the ones that matter.
As the time until the general election dwindles to under two weeks, one thing the Wall Street elite have not - by and large - weighed in upon is the result of the presidential sweepstakes. That's probably for good reason. Like 95% of the general public, they aren't convinced of an outcome either in favor of Mr. Trump or Mrs. Clinton, but, few have expressed their sentiments on what will happen after either is elected.
While there are those who say that the stock market will take a hit if Donald Trump is the next president, few, if any, figure that a Clinton win would be bad for investors. Oddly enough, almost nobody is saying the stock market will roar whichever candidate wins.
That's a perspective that is based largely on stock market returns and historical fact. According to this CNN story, since 1944, the direction of the stock market between August 1 and October 31 has correctly predicted the outcome of the election a stunning 82% of the time.
The metric is startlingly simple. If the market is up during the three months prior to the election, the incumbent party wins. If the market is down, the challenger is swept into office.
As of this writing, that measure favors Donald J. Trump, the challenger, but only slightly. On July 29, the final trading day prior to August 1, the S&P 500 stood at 2,173.60. It closed on Tuesday at 2143.16, about 1 1/2 percent off during the span.
There are three trading days left in the predicted period. It's possible that a strong rally could lift the averages back above the August 1 level, though it is beginning to appear more gloomy for Mrs. Clinton, the more the media bashes Trump and ignores the continuous, outrageous, potentially criminal behavior of the former First Lady and Secretary of State.
With the markets set to open in about a half hour, futures are lower. If this trend continues, get ready for a Trump presidency and the ascendancy of a moralistic, populist, business-first new regime in Washington.
Change at the top and across the political spectrum would likely be a boon to the majority of working Americans. After all, they're the ones that really matter, right?
Tuesday Trauma:
Dow Jones Industrial Average
18,169.27, -53.76 (-0.30%)
NASDAQ
5,283.40, -26.43 (-0.50%)
S&P 500
2,143.16, -8.17 (-0.38%)
NYSE Composite
10,550.19, -41.12 (-0.39%)
Wednesday, October 26, 2016
Thursday, October 20, 2016
Why Bother With This Yo-Yo Market?
Since Money Daily is still on the camping-off-the-grid-who-cares schedule, some readers (all three of you) might be wondering why.
The answer is simple. Just like the US electoral process, the stock market is rigged. It's been rigged since 2008 at least, when the wheels actually did fall off, but the central bank consortium, in association with various elected and unelected governments worldwide, managed to pull wool over the public's eyes (after a good and righteous fleecing of course) and get the global economy chugging along again.
One problem, however, remained, and remains until this very day.
The wheels fell off.
When stocks crashed in 2008 and banks were about to become entities controlled by conservators or administrators in receivership, the Federal Reserve swooped in and rescued them. All of them. Even banks and institutions in Europe. All except for Lehman Brothers, which was quickly bankrupted and sold piecemeal to entities such as Barclay's and Nomura. Other banks sucked up such failed entities as Countrywide, Merrill Lynch, and Indymac. Had they not, the bankruptcies would have proceeded as normal.
Instead of the orderly process of bankruptcy and the wholesale disposition of assets, the Fed and the banks (again, with help from the government, i.e., taxpayer money) bailed out the system, which is why it's still broken. There are pieces of failure floating all around the financial universe though rarely is a word spoken of them.
For just one instance, consider the fates of Fannie Mae and Freddie Mac, the two quasi-government mortgage institutions that are still under government receivership. Congress has been and continues to be unwilling to unwind these GSAs because all the bad would come out of them. The Fed is sitting on bad mortgages from a decade ago, the US housing market in many areas is in a shambles and interest rates have nowhere to go but down.
The Fed, the ECB and the bank of Japan - among others - have circled the wagons and there's no way out... for anybody. Prosperity is a word reserved for history books. Job growth is non-existent, wage growth is stagnant, GDP is a made up number that barely suffices to cover the ultimate fraud of excessive government and central bank intervention.
In case anyone wonders why stocks haven't budged since breaking out to new highs in July (a direct result of Brexit and resulting manipulation to hide the sins) it's precisely because there is no real market. There is no price discovery because that's been blown apart by the Fed. There's only guessing and manipulation.
What used to be the most robust and dynamic markets in the world have been reduced to pixie dust and unicorns. None of it is real. From the dollar bills we use for currency to the massive treasury bond auctions that fund the continued fantasy of a working financial system, it's all fake. Every price is contrived; there is no such thing as fundamental financial analysis.
There is only the Fed, the EU and the BOJ. And they're all phonies.
God, when will it all end?
The answer is simple. Just like the US electoral process, the stock market is rigged. It's been rigged since 2008 at least, when the wheels actually did fall off, but the central bank consortium, in association with various elected and unelected governments worldwide, managed to pull wool over the public's eyes (after a good and righteous fleecing of course) and get the global economy chugging along again.
One problem, however, remained, and remains until this very day.
The wheels fell off.
When stocks crashed in 2008 and banks were about to become entities controlled by conservators or administrators in receivership, the Federal Reserve swooped in and rescued them. All of them. Even banks and institutions in Europe. All except for Lehman Brothers, which was quickly bankrupted and sold piecemeal to entities such as Barclay's and Nomura. Other banks sucked up such failed entities as Countrywide, Merrill Lynch, and Indymac. Had they not, the bankruptcies would have proceeded as normal.
Instead of the orderly process of bankruptcy and the wholesale disposition of assets, the Fed and the banks (again, with help from the government, i.e., taxpayer money) bailed out the system, which is why it's still broken. There are pieces of failure floating all around the financial universe though rarely is a word spoken of them.
For just one instance, consider the fates of Fannie Mae and Freddie Mac, the two quasi-government mortgage institutions that are still under government receivership. Congress has been and continues to be unwilling to unwind these GSAs because all the bad would come out of them. The Fed is sitting on bad mortgages from a decade ago, the US housing market in many areas is in a shambles and interest rates have nowhere to go but down.
The Fed, the ECB and the bank of Japan - among others - have circled the wagons and there's no way out... for anybody. Prosperity is a word reserved for history books. Job growth is non-existent, wage growth is stagnant, GDP is a made up number that barely suffices to cover the ultimate fraud of excessive government and central bank intervention.
In case anyone wonders why stocks haven't budged since breaking out to new highs in July (a direct result of Brexit and resulting manipulation to hide the sins) it's precisely because there is no real market. There is no price discovery because that's been blown apart by the Fed. There's only guessing and manipulation.
What used to be the most robust and dynamic markets in the world have been reduced to pixie dust and unicorns. None of it is real. From the dollar bills we use for currency to the massive treasury bond auctions that fund the continued fantasy of a working financial system, it's all fake. Every price is contrived; there is no such thing as fundamental financial analysis.
There is only the Fed, the EU and the BOJ. And they're all phonies.
God, when will it all end?
Friday, October 14, 2016
Stocks Pop, Stop, Drop Friday; Week Ends With Losses Across The Board
With the political world in a complete media-induced frenzy, Wall Street took matters in stride eventually giving up ground for the week despite a naked attempt at a rally Friday.
The Dow was up more than 150 points early on Friday morning, but euphoria turned to skepticism as the session wore on, with all the indices slipping back toward what ended up being marginal gains.
Despite the weak action, there was the usual last-half-hour bid, which boosted the the Dow, for a while, to something of a more respectable level. The action was likely a function of short-covering, considering that there may still be short players in the mix, despite eight years of continuous gains without so much as a 15% correction. Such is the level of fraud involved in indices and trading after a full century of Fed interventions, trickery, thievery and mostly, inflation.
Still, at the end of the day, all the averages closed near the low points of their respective sessions, an ominous sign when one considers that the status quo seems to have everything under control in the political, social, and financial arenas, if, what one means by "under control" is $20 trillion of non-payable debt.
Investing used to be fun. Nowadays, it's just painful, whether one is merely watching or participating.
The NASDAQ took the biggest spill of the week, down nearly 1 1/2 percent. Oddly enough, the NASDAQ and S&P both ended the day higher, but each by less than one point. Weird.
Friday's Fumble:
Dow Jones Industrial Average
18,138.38, +39.44 (0.22%)
NASDAQ
5,214.16, +0.83 (0.02%)
S&P 500
2,132.98, +0.43 (0.02%)
NYSE Composite
10,533.83, +8.90 (0.08%)
For the week ended 10/14/16:
Dow: -102.11 (-0.56%)
S&P 500: -20.76 (-0.96%)
NASDAQ: -78.24 (-1.48%)
NYSE Composite: -91.36 (-0.86%)
The Dow was up more than 150 points early on Friday morning, but euphoria turned to skepticism as the session wore on, with all the indices slipping back toward what ended up being marginal gains.
Despite the weak action, there was the usual last-half-hour bid, which boosted the the Dow, for a while, to something of a more respectable level. The action was likely a function of short-covering, considering that there may still be short players in the mix, despite eight years of continuous gains without so much as a 15% correction. Such is the level of fraud involved in indices and trading after a full century of Fed interventions, trickery, thievery and mostly, inflation.
Still, at the end of the day, all the averages closed near the low points of their respective sessions, an ominous sign when one considers that the status quo seems to have everything under control in the political, social, and financial arenas, if, what one means by "under control" is $20 trillion of non-payable debt.
Investing used to be fun. Nowadays, it's just painful, whether one is merely watching or participating.
The NASDAQ took the biggest spill of the week, down nearly 1 1/2 percent. Oddly enough, the NASDAQ and S&P both ended the day higher, but each by less than one point. Weird.
Friday's Fumble:
Dow Jones Industrial Average
18,138.38, +39.44 (0.22%)
NASDAQ
5,214.16, +0.83 (0.02%)
S&P 500
2,132.98, +0.43 (0.02%)
NYSE Composite
10,533.83, +8.90 (0.08%)
For the week ended 10/14/16:
Dow: -102.11 (-0.56%)
S&P 500: -20.76 (-0.96%)
NASDAQ: -78.24 (-1.48%)
NYSE Composite: -91.36 (-0.86%)
Monday, October 10, 2016
Fearless Rick Predicts: Trump To Win In Landslide Victory
Dispensing with the usual market noise and fury, today let’s look at the political spectrum, in particular, the presidential race.
In the aftermath of the leaked Trump video, the further Wikileaks of Hillary Clinton’s speeches to the Wall Street elite, and Sunday night’s debate, a common theme has emerged. The Democrats have, as usual, nothing more than empty rhetoric and the politics of personal destruction.
Republican candidate Trump has been dealt a bag of lies, dirty tricks, one-sided media reportage and bias, inaccurate, dubious polling data, slurs, baits, and typical trash talk, but he has not folded, not has he bent to the pressure in the least.
While Donald Trump may not be the ideal Republican candidate, he is largely better than his Democrat rival, Hillary Clinton, whose over 30 years of public service have yielded no tangible, positive results for the majority of Americans.
Trump is correct in pointing out that the Democrats - for whom the African-American populace slavishly vote for in every election, be it local, state or national in scale - have done nothing to enhance the ling conditions of the black community. The same goes for nearly every other minority. The Democrats are full of promises and negligent on deliverance. It is the same tactic trotted out year after year, in election after election. Democrats preach equality and tolerance, but demonstrate neither.
It’s time for Americans to see through the Democrat party as nothing more than socialism on steroids. Every problem is solved by more policies, more spending, higher taxes, greater regulation. The majority of taxpaying people in this country (and even tax-avoiders) are - or should be - fed up with the dictates and policies promulgated by the left and they should be energized enough to put an end to it next month, when millions will make their voices heard through their votes.
There are no sure things in life, but if ever there was a moment for a complete convulsion in the fabric of American life, it is now. Eight years of Obama’s socialism has led to this moment. Mr. Trump has prevailed over all his Republican rivals, many of whom - as much a part of the elite status quo as the Democrats - have withdrawn their support or never supported the nominee at all.
Hillary Clinton is another empty suit. Donald Trump is a businessman who has had great success and celebrity over the years. The Democrats have tried in vain to denigrate and demonize him precisely because they are afraid of losing the election and increasingly desperate.
If the truth be known, most of the polls are so wickedly biased toward the Democrats (see this story by Sharyl Attkisson for more) they cannot be believed. This race is not even close. More and more people are being swayed by the power of Trump’s persuasion for a greater America, for a return to traditional values, for supporting the constitution, lowering taxes, eliminating regulations and improving the quality of life for the middle class.
There should be no doubt when the buttons are pushed or levers pulled. Donald Trump will win the presidential election in an absolute, stunning landslide on a scale of Ronald Reagan’s victory in 1980.
The only caveat - and it is a serious one - is if the election is rigged and stolen outright by the Democrats or the powers that be. Both sides have done it and there is a very good chance that if Clinton is seen as losing midday on November 8, all bets are off, all votes will be nullified electronically or by other means. It’s a real threat, but, otherwise, Donald Trump will win convincingly.
Monday's Markets:
Dow Jones Industrial Average
18,329.04, +88.55 (0.49%)
NASDAQ
5,328.67, +36.27 (0.69%)
S&P 500
2,163.66, +9.92 (0.46%)
NYSE Composite
10,682.71, +55.79 (0.53%)
In the aftermath of the leaked Trump video, the further Wikileaks of Hillary Clinton’s speeches to the Wall Street elite, and Sunday night’s debate, a common theme has emerged. The Democrats have, as usual, nothing more than empty rhetoric and the politics of personal destruction.
Republican candidate Trump has been dealt a bag of lies, dirty tricks, one-sided media reportage and bias, inaccurate, dubious polling data, slurs, baits, and typical trash talk, but he has not folded, not has he bent to the pressure in the least.
While Donald Trump may not be the ideal Republican candidate, he is largely better than his Democrat rival, Hillary Clinton, whose over 30 years of public service have yielded no tangible, positive results for the majority of Americans.
Trump is correct in pointing out that the Democrats - for whom the African-American populace slavishly vote for in every election, be it local, state or national in scale - have done nothing to enhance the ling conditions of the black community. The same goes for nearly every other minority. The Democrats are full of promises and negligent on deliverance. It is the same tactic trotted out year after year, in election after election. Democrats preach equality and tolerance, but demonstrate neither.
It’s time for Americans to see through the Democrat party as nothing more than socialism on steroids. Every problem is solved by more policies, more spending, higher taxes, greater regulation. The majority of taxpaying people in this country (and even tax-avoiders) are - or should be - fed up with the dictates and policies promulgated by the left and they should be energized enough to put an end to it next month, when millions will make their voices heard through their votes.
There are no sure things in life, but if ever there was a moment for a complete convulsion in the fabric of American life, it is now. Eight years of Obama’s socialism has led to this moment. Mr. Trump has prevailed over all his Republican rivals, many of whom - as much a part of the elite status quo as the Democrats - have withdrawn their support or never supported the nominee at all.
Hillary Clinton is another empty suit. Donald Trump is a businessman who has had great success and celebrity over the years. The Democrats have tried in vain to denigrate and demonize him precisely because they are afraid of losing the election and increasingly desperate.
If the truth be known, most of the polls are so wickedly biased toward the Democrats (see this story by Sharyl Attkisson for more) they cannot be believed. This race is not even close. More and more people are being swayed by the power of Trump’s persuasion for a greater America, for a return to traditional values, for supporting the constitution, lowering taxes, eliminating regulations and improving the quality of life for the middle class.
There should be no doubt when the buttons are pushed or levers pulled. Donald Trump will win the presidential election in an absolute, stunning landslide on a scale of Ronald Reagan’s victory in 1980.
The only caveat - and it is a serious one - is if the election is rigged and stolen outright by the Democrats or the powers that be. Both sides have done it and there is a very good chance that if Clinton is seen as losing midday on November 8, all bets are off, all votes will be nullified electronically or by other means. It’s a real threat, but, otherwise, Donald Trump will win convincingly.
Monday's Markets:
Dow Jones Industrial Average
18,329.04, +88.55 (0.49%)
NASDAQ
5,328.67, +36.27 (0.69%)
S&P 500
2,163.66, +9.92 (0.46%)
NYSE Composite
10,682.71, +55.79 (0.53%)
Thursday, October 6, 2016
Fraud, Corruption Rampant In All Financial Markets
It's once again becoming more and more difficult to post anything even remotely resembling real market analysis when there is so much fraud, corruption, and manipulation of markets.
This is primarily the fault of the world's central banks, who now control practically every financial market in the world. What is especially troubling is that these central banks - via their conduits and proxies in the commercial banking world - routinely corrupt the prices of gold and silver, the only real money.
Just a few days ago, gold and silver were smashed down to save shorts (central bank proxies) who have been dying a slow death for most of the year.
The losses in price were massive and still have not relented. Silver, for instance, has been close to $20 per ounce for most of 2016, but today was pounded down to $17.29 per ounce.
Gold was battered from $1320 an ounce on Monday to $1250 today.
The only sound advice when it comes to precious metals is to buy the dips and hold. Also, for silver investors, solar panels are very inexpensive and also provide usable value in terms of free electricity.
Otherwise, we're all being screwed by banks and governments. Someday, it will end. Hopefully, before we're all dead.
Thursday's Garbage Plate:
Dow Jones Industrial Average
18,268.50, -12.53 (-0.07%)
NASDAQ
5,306.85, -9.17 (-0.17%)
S&P 500
2,160.77, +1.04 (0.05%)
NYSE Composite
10,675.17, -8.78 (-0.08%)
This is primarily the fault of the world's central banks, who now control practically every financial market in the world. What is especially troubling is that these central banks - via their conduits and proxies in the commercial banking world - routinely corrupt the prices of gold and silver, the only real money.
Just a few days ago, gold and silver were smashed down to save shorts (central bank proxies) who have been dying a slow death for most of the year.
The losses in price were massive and still have not relented. Silver, for instance, has been close to $20 per ounce for most of 2016, but today was pounded down to $17.29 per ounce.
Gold was battered from $1320 an ounce on Monday to $1250 today.
The only sound advice when it comes to precious metals is to buy the dips and hold. Also, for silver investors, solar panels are very inexpensive and also provide usable value in terms of free electricity.
Otherwise, we're all being screwed by banks and governments. Someday, it will end. Hopefully, before we're all dead.
Thursday's Garbage Plate:
Dow Jones Industrial Average
18,268.50, -12.53 (-0.07%)
NASDAQ
5,306.85, -9.17 (-0.17%)
S&P 500
2,160.77, +1.04 (0.05%)
NYSE Composite
10,675.17, -8.78 (-0.08%)
Monday, October 3, 2016
Stocks Start Fourth Quarter With Losses
Whether or not this blue Monday proves to be ominous for equity investors in the newly-birthed quarter will be proven out over the coming weeks and months, but the roller coaster ride the major indices have taken the past few months have proven only that the market is confused, somewhat directionless, and hopelessly overvalued.
Just a little push in the downward direction could spell doom for stocks, but hopes are high for Hillary in the election and a continuation of the crony capitalism that spells M-O-N-E-Y for Wall Street.
So rigged is the game in the canyons of lower Manhattan that most CEOs, professional fund managers and just about anybody with any skin in the game in down with Clinton and more of the same, despite the fact that Mr. Trump is a born and bred New Yorker, a businessman and a hard-driving deal-maker.
The system is so collapsed, it is fast approaching a condition that puts it in need of serious surgery rather than simple triage.
Considering the up-and-down cycle of what passes for markets in America, today's little dip into the red probably will amount to nothing, and that's a non-cynical point of view.
Welcome to the fourth quarter.
Monday's Miss:
Dow Jones Industrial Average
18,253.85, -54.30 (-0.30%)
NASDAQ
5,300.87, -11.13 (-0.21%)
S&P 500
2,161.20, -7.07 (-0.33%)
NYSE Composite
10,689.47, -32.27 (-0.30%)
Just a little push in the downward direction could spell doom for stocks, but hopes are high for Hillary in the election and a continuation of the crony capitalism that spells M-O-N-E-Y for Wall Street.
So rigged is the game in the canyons of lower Manhattan that most CEOs, professional fund managers and just about anybody with any skin in the game in down with Clinton and more of the same, despite the fact that Mr. Trump is a born and bred New Yorker, a businessman and a hard-driving deal-maker.
The system is so collapsed, it is fast approaching a condition that puts it in need of serious surgery rather than simple triage.
Considering the up-and-down cycle of what passes for markets in America, today's little dip into the red probably will amount to nothing, and that's a non-cynical point of view.
Welcome to the fourth quarter.
Monday's Miss:
Dow Jones Industrial Average
18,253.85, -54.30 (-0.30%)
NASDAQ
5,300.87, -11.13 (-0.21%)
S&P 500
2,161.20, -7.07 (-0.33%)
NYSE Composite
10,689.47, -32.27 (-0.30%)
Sunday, October 2, 2016
End Of 3rd Quarter Comes With Window Dressing
Believe it or not, we're 3/4 through the year and with that Wall Street staged a rally Friday just to keep with the notion that the economy is at least strong enough (and well enough supported by the Federal Reserve) to warrant the buying of stocks with which to dress up tha many portfolios managed by multi-billion dollar funds.
Friday's economic data included numbers on personal income (up 0.2%), personal spending (flat... oops), core PCE prices (up 0.2%), Chicago PMI (54.2, ahead of forecasts) and the University of Michigan survey on consumer sentiment (91.2).
All right, then, everybody's content, including the Fed, which did not raise rates and won't until Decemebr at the earliest, if at all.
In this sweet spot economy, it's a numbers game and a day-trader's paradise. There's really no serious investment going on, just reshuffling of the deck of S&P 500 stocks to own.
The week was essentially flat, marginally to the upside, as the major averages just bounced between winning and losing all week long.
As Country Joe and the Fish might have said, "Whoopie! We're all gonna die."
Friday's Flash:
Dow Jones Industrial Average
18,308.15, +164.70 (0.91%)
NASDAQ
5,312.00, +42.85 (0.81%)
S&P 500
2,168.27, +17.14 (0.80%)
NYSE Composite
10,721.74, +78.22 (0.73%)
For the Week ended September 30:
Dow: +46.70 (+0.26%)
NASDAQ: +6.25 (+0.12%)
S&P 500: +3.58 (+0.17%)
NYSE Composite: +3.75 (+0.03%)
Friday's economic data included numbers on personal income (up 0.2%), personal spending (flat... oops), core PCE prices (up 0.2%), Chicago PMI (54.2, ahead of forecasts) and the University of Michigan survey on consumer sentiment (91.2).
All right, then, everybody's content, including the Fed, which did not raise rates and won't until Decemebr at the earliest, if at all.
In this sweet spot economy, it's a numbers game and a day-trader's paradise. There's really no serious investment going on, just reshuffling of the deck of S&P 500 stocks to own.
The week was essentially flat, marginally to the upside, as the major averages just bounced between winning and losing all week long.
As Country Joe and the Fish might have said, "Whoopie! We're all gonna die."
Friday's Flash:
Dow Jones Industrial Average
18,308.15, +164.70 (0.91%)
NASDAQ
5,312.00, +42.85 (0.81%)
S&P 500
2,168.27, +17.14 (0.80%)
NYSE Composite
10,721.74, +78.22 (0.73%)
For the Week ended September 30:
Dow: +46.70 (+0.26%)
NASDAQ: +6.25 (+0.12%)
S&P 500: +3.58 (+0.17%)
NYSE Composite: +3.75 (+0.03%)
Thursday, September 29, 2016
Stocks Slip In Afternoon Trading; Where's The Window Dressing?
Stocks continued their up-and-down action on Thursday, posting one of the larger losses of the season, something that's becoming more and more commonplace as the election nears.
Perhaps investors and speculators are playing a game of chicken, day-trading on quick profits (a likely scenario), or perhaps more are coming to the realization that all is not well in the US or global economy and shocks such as experienced by the recent Brexit vote could contribute to more disorder.
The Commerce Department today announced the third and final estimate for second quarter GDP, a disappointing 1.4%, another reminder that the economy is not picking up any steam and may be stuck in a semi-permanent state of stagnation and denial, with outright deflation lurking at every turn.
The reality of the situation is that Americans seem fairly content with the way things are economically, at least on the surface. However, good-paying, long-lasting jobs and careers are harder and harder to come by and what used to be fixed costs, such as utility bills, property taxes, and other fees for services (think health care) continue to ratchet higher in cost on an annual basis.
Also of concern are diminishing corporate profits, which have been heading south for the better part of two years. It's simply more difficult in a tight economy to wring out better and higher EPS and bottom line profits.
Market analysis being a somewhat difficult and thankless task, those are at least some of the potential catalysts for today's declines on the major indices. Tomorrow being the final day of the month and the quarter, one should be looking for "window dressing," wherein fund managers buy up stocks seemingly in favor to add to the portfolio and prospectus. Oddly enough, we may be witnessing window shading instead, as fund managers shed stocks that are under-performing, currently about 65% of the market.
With only a few key stocks keeping the averages afloat, the time for a major pullback has probably long past, since the Fed continues to prop up the market with its easy money.
Thursday Tumble:
Dow Jones Industrial Average
18,143.45, -195.79 (-1.07%)
NASDAQ
5,269.15, -49.39 (-0.93%)
S&P 500
2,151.13, -20.24 (-0.93%)
NYSE Composite
10,643.48, -109.97 (-1.02%)
Perhaps investors and speculators are playing a game of chicken, day-trading on quick profits (a likely scenario), or perhaps more are coming to the realization that all is not well in the US or global economy and shocks such as experienced by the recent Brexit vote could contribute to more disorder.
The Commerce Department today announced the third and final estimate for second quarter GDP, a disappointing 1.4%, another reminder that the economy is not picking up any steam and may be stuck in a semi-permanent state of stagnation and denial, with outright deflation lurking at every turn.
The reality of the situation is that Americans seem fairly content with the way things are economically, at least on the surface. However, good-paying, long-lasting jobs and careers are harder and harder to come by and what used to be fixed costs, such as utility bills, property taxes, and other fees for services (think health care) continue to ratchet higher in cost on an annual basis.
Also of concern are diminishing corporate profits, which have been heading south for the better part of two years. It's simply more difficult in a tight economy to wring out better and higher EPS and bottom line profits.
Market analysis being a somewhat difficult and thankless task, those are at least some of the potential catalysts for today's declines on the major indices. Tomorrow being the final day of the month and the quarter, one should be looking for "window dressing," wherein fund managers buy up stocks seemingly in favor to add to the portfolio and prospectus. Oddly enough, we may be witnessing window shading instead, as fund managers shed stocks that are under-performing, currently about 65% of the market.
With only a few key stocks keeping the averages afloat, the time for a major pullback has probably long past, since the Fed continues to prop up the market with its easy money.
Thursday Tumble:
Dow Jones Industrial Average
18,143.45, -195.79 (-1.07%)
NASDAQ
5,269.15, -49.39 (-0.93%)
S&P 500
2,151.13, -20.24 (-0.93%)
NYSE Composite
10,643.48, -109.97 (-1.02%)
Tuesday, September 27, 2016
Presidential Debate Past; Stocks Return To Normal
With the results of Monday night's presidential debate clearly a mainstream victory for Hillary Clinton (according to the mainstream media, naturally), investors got the "all clear" Tuesday morning and immediately set about erasing the previous day's losses to a large extent.
There was nothing of note in the way of financial news, so the political news would have to suffice, and it apparently did.
With nothing now standing in the way of a Hillary Clinton victory in the November election, the smug Wall Street crowd felt good enough to boost stock prices for the average investor, despite Donald Trump's warning that the Fed was blowing bubbles and playing politics. Maybe the election doesn't matter that much.
All's well.
Tuesday's Shuffle
Dow Jones Industrial Average
18,228.30, +133.47 (0.74%)
NASDAQ
5,305.71, +48.22 (0.92%)
S&P 500
2,159.93, +13.83 (0.64%)
NYSE Composite
10,657.18, +32.30 (0.30%)
There was nothing of note in the way of financial news, so the political news would have to suffice, and it apparently did.
With nothing now standing in the way of a Hillary Clinton victory in the November election, the smug Wall Street crowd felt good enough to boost stock prices for the average investor, despite Donald Trump's warning that the Fed was blowing bubbles and playing politics. Maybe the election doesn't matter that much.
All's well.
Tuesday's Shuffle
Dow Jones Industrial Average
18,228.30, +133.47 (0.74%)
NASDAQ
5,305.71, +48.22 (0.92%)
S&P 500
2,159.93, +13.83 (0.64%)
NYSE Composite
10,657.18, +32.30 (0.30%)
Monday, September 26, 2016
Stocks Slide Again; Is Market Anticipating A Trump Victory Or Government Shutdown?
Stocks fell for the second straight session, extending losses from Friday to open the new week.
Causes for the two-day selling spree are questionable, but Monday's New Home Sales release by the Commerce Department may be a good place to start. After surging in July, new home sales fell 7.6% nationally, following a July surge.
Perhaps even more troubling is that the median price of a new home sold in August was down 3.1% from July and down 5.3% from a year earlier.
That's a real problem because the home-selling business has been anything but brisk, though price increases were a good sign for the Federal Reserve, which is dying to find any hint of inflation (they love it; consumers hate it). Thus, if new homes are selling at a discount from the year earlier, one could probably safely assume that existing homes are seeing price pressure to the downside as well.
Extrapolating from what is normally regarded as the biggest single purchase in a person's life, the cost of a home (or rent) going lower is going to put the brakes on inflation in a very large way, perhaps in a way that many people looking to sell are not going to appreciate. Recall that the last housing bust was a scant eight years ago. There are still underwater homeowners in various stages of despair, though the numbers have eased significantly over the years.
A downturn in housing prices, while great for new buyers, are overall anathema for the economy. How that squares with Wall Street's ongoing love-hate affair with the Fed and the call for higher interest rates is as yet unknown, but, after last week's stall on raising rates there's the distinct possibility that the Fed has called the market's bluff for the final time.
A FOMC meeting is sceduled for the first week in November, just prior to the election, so there's almost zero probability that the Fed would raise rates at that point, upsetting not just the market but the political class as well. That leaves December as the last chance for the Fed to raise rates, and looking back at their last December hike (a market disaster), there's some thinking that the almighty Fed may not want to repeat that particular episode.
One other potentiality for the sudden downturn in stocks is that inside money is looking seriously at a Donald Trump victory in November. Tonight's first debate (of three) between the Donald and Hillary Clinton may be a watershed moment in US political history. The most recent polls have the two candidates nearly even, as Mr. Trump has eviscerated Clinton's large post-convention lead, especially in some key battleground states such as Ohio, Pennsylvania, and Florida.
Why large investors may be nervous about a Trump victory is the gnawing, belly-aching suspicion that Trump may be good for small business but bad for big business. His platform is not well-formed, but, he has used the words "crony capitalism" to his populist advantage. It's code for "no more business as usual" which means many of the larger firms (think S&P 500) that have benefited from decades of competition-crushing regulations and legislation may be looking at a more level playing field which puts small businesses on a better footing, something with which they have no relevant experience. That opens up new possibilities that favor smaller competitors taking market share from larger ones, to the ultimate detriment of the US stock market, but probably to the betterment of the overall economy.
Not withstanding any other reasons to fear a Trump presidency, the elitists on Wall Street and in the nation's capitol simply do not know what to expect. That's why they're the status quo and Donald Trump spells big danger.
Another rationale for a market downturn is the continuing drama over keeping the federal government operating past this coming Friday. The president and congress are doing their usual dance of death surrounding a continuing resolution rater than an actual budget to avoid a government shutdown and the Friday deadline is looming large.
Lastly, this being the last week of September, maybe the marketeers are gearing up for an October to remember, as has occurred on numerous occasions in the past. Market crashes and corrections always seem to pop up in the harvest month, and this one offers even more uncertainty than usual.
Blue Monday:
Dow Jones Industrial Average
18,094.83, -166.62 (-0.91%)
NASDAQ
5,257.49, -48.26 (-0.91%)
S&P 500
2,146.10, -18.59 (-0.86%)
NYSE Composite
10,624.88, -93.11 (-0.87%)
Causes for the two-day selling spree are questionable, but Monday's New Home Sales release by the Commerce Department may be a good place to start. After surging in July, new home sales fell 7.6% nationally, following a July surge.
Perhaps even more troubling is that the median price of a new home sold in August was down 3.1% from July and down 5.3% from a year earlier.
That's a real problem because the home-selling business has been anything but brisk, though price increases were a good sign for the Federal Reserve, which is dying to find any hint of inflation (they love it; consumers hate it). Thus, if new homes are selling at a discount from the year earlier, one could probably safely assume that existing homes are seeing price pressure to the downside as well.
Extrapolating from what is normally regarded as the biggest single purchase in a person's life, the cost of a home (or rent) going lower is going to put the brakes on inflation in a very large way, perhaps in a way that many people looking to sell are not going to appreciate. Recall that the last housing bust was a scant eight years ago. There are still underwater homeowners in various stages of despair, though the numbers have eased significantly over the years.
A downturn in housing prices, while great for new buyers, are overall anathema for the economy. How that squares with Wall Street's ongoing love-hate affair with the Fed and the call for higher interest rates is as yet unknown, but, after last week's stall on raising rates there's the distinct possibility that the Fed has called the market's bluff for the final time.
A FOMC meeting is sceduled for the first week in November, just prior to the election, so there's almost zero probability that the Fed would raise rates at that point, upsetting not just the market but the political class as well. That leaves December as the last chance for the Fed to raise rates, and looking back at their last December hike (a market disaster), there's some thinking that the almighty Fed may not want to repeat that particular episode.
One other potentiality for the sudden downturn in stocks is that inside money is looking seriously at a Donald Trump victory in November. Tonight's first debate (of three) between the Donald and Hillary Clinton may be a watershed moment in US political history. The most recent polls have the two candidates nearly even, as Mr. Trump has eviscerated Clinton's large post-convention lead, especially in some key battleground states such as Ohio, Pennsylvania, and Florida.
Why large investors may be nervous about a Trump victory is the gnawing, belly-aching suspicion that Trump may be good for small business but bad for big business. His platform is not well-formed, but, he has used the words "crony capitalism" to his populist advantage. It's code for "no more business as usual" which means many of the larger firms (think S&P 500) that have benefited from decades of competition-crushing regulations and legislation may be looking at a more level playing field which puts small businesses on a better footing, something with which they have no relevant experience. That opens up new possibilities that favor smaller competitors taking market share from larger ones, to the ultimate detriment of the US stock market, but probably to the betterment of the overall economy.
Not withstanding any other reasons to fear a Trump presidency, the elitists on Wall Street and in the nation's capitol simply do not know what to expect. That's why they're the status quo and Donald Trump spells big danger.
Another rationale for a market downturn is the continuing drama over keeping the federal government operating past this coming Friday. The president and congress are doing their usual dance of death surrounding a continuing resolution rater than an actual budget to avoid a government shutdown and the Friday deadline is looming large.
Lastly, this being the last week of September, maybe the marketeers are gearing up for an October to remember, as has occurred on numerous occasions in the past. Market crashes and corrections always seem to pop up in the harvest month, and this one offers even more uncertainty than usual.
Blue Monday:
Dow Jones Industrial Average
18,094.83, -166.62 (-0.91%)
NASDAQ
5,257.49, -48.26 (-0.91%)
S&P 500
2,146.10, -18.59 (-0.86%)
NYSE Composite
10,624.88, -93.11 (-0.87%)
Saturday, September 24, 2016
Fed Holds, Market Stuck; Donald Trump A Viable Alternative
The stage is set for the presidential election and the Fed will try its best to not influence it (that is, unless Hillary Clinton is losing).
At its most recent meeting - which ended this past Wednesday with the usual "no change" announcement - the FOMC decided that there wasn't enough positive economic data to support raising rates, despite record low unemployment according to official sources.
Thise in the know understand that the Fed cannot and will not (the next meeting is scheduled for November 1-2) raise interest rates prior to the election (November 8) because any increase, such as the lonesome one of 0.25% back in December of last year, would cause a market panic and sharp selloff of stocks.
The condition is asinine, akin to preparing a race horse for racing and then continually scratching the nag before the event.
Members of the Fed continue to jawbone about raising rates, which keeps their fragile authority intact. The truth is that they lost control back in 2008, and have done nothing to retain or repair the confidence of the populace, though, due to normalcy bias, everybody keeps using fiat money and going along for the zero interest rate ride for the time being.
These policies cannot last forever, thus it may become fashionable and even predictable to vote for Donald Trump in the upcoming election. Trump is a change agent, one feared in the halls of congress, statehouses and even in the conference rooms of the Fed's Eccles building.
Stocks are overpriced because there is no alternative for many large investors, and that's a danger.
So, get ready for a rocky road ahead. The first presidential debate is Monday, and that event could change the dynamics for November and the immediate future.
Stay tuned and stay liquid.
Friday's Closing Prices:
Dow Jones Industrial Average
18,261.45, -131.01 (-0.71%)
NASDAQ
5,305.75, -33.78 (-0.63%)
S&P 500
2,164.69, -12.49 (-0.57%)
NYSE Composite
10,717.99, -75.67 (-0.70%)
The week:
Dow: +137.65 (0.76%)
NASDAQ: +61.18 (1.17%)
S&P 500: +25.53 (1.19%)
NYSE Composite: +185.72 (1.76)
At its most recent meeting - which ended this past Wednesday with the usual "no change" announcement - the FOMC decided that there wasn't enough positive economic data to support raising rates, despite record low unemployment according to official sources.
Thise in the know understand that the Fed cannot and will not (the next meeting is scheduled for November 1-2) raise interest rates prior to the election (November 8) because any increase, such as the lonesome one of 0.25% back in December of last year, would cause a market panic and sharp selloff of stocks.
The condition is asinine, akin to preparing a race horse for racing and then continually scratching the nag before the event.
Members of the Fed continue to jawbone about raising rates, which keeps their fragile authority intact. The truth is that they lost control back in 2008, and have done nothing to retain or repair the confidence of the populace, though, due to normalcy bias, everybody keeps using fiat money and going along for the zero interest rate ride for the time being.
These policies cannot last forever, thus it may become fashionable and even predictable to vote for Donald Trump in the upcoming election. Trump is a change agent, one feared in the halls of congress, statehouses and even in the conference rooms of the Fed's Eccles building.
Stocks are overpriced because there is no alternative for many large investors, and that's a danger.
So, get ready for a rocky road ahead. The first presidential debate is Monday, and that event could change the dynamics for November and the immediate future.
Stay tuned and stay liquid.
Friday's Closing Prices:
Dow Jones Industrial Average
18,261.45, -131.01 (-0.71%)
NASDAQ
5,305.75, -33.78 (-0.63%)
S&P 500
2,164.69, -12.49 (-0.57%)
NYSE Composite
10,717.99, -75.67 (-0.70%)
The week:
Dow: +137.65 (0.76%)
NASDAQ: +61.18 (1.17%)
S&P 500: +25.53 (1.19%)
NYSE Composite: +185.72 (1.76)
Wednesday, September 21, 2016
Fed Holds Rates Steady; Nothing To See Here
As expected, the Fed holds the federal funds overnight rate at 0.25-0.50%.
Since this was a foregone conclusion, there's little need to mention the market reaction, which, as always, was BUY! BUY! BUY!
It's a little bit sick, this interest rate game. Money Daily will have more on this in coming days.
Since this was a foregone conclusion, there's little need to mention the market reaction, which, as always, was BUY! BUY! BUY!
It's a little bit sick, this interest rate game. Money Daily will have more on this in coming days.
Tuesday, September 20, 2016
Markets Brace For FOMC Nothing-Burger
Just in case you're keeping score at home, stocks remain in caution mode prior to the FOMC rate policy announcement due out tomorrow at 2:00 pm EDT.
Consensus sentiment is that the governors will do what they've done at every meeting except one since the end of 2008... nothing.
Federal funds rate will likely remain at 0.25-0.50, or effectively zero, and the financial world will once again be treated to the numb mumbling and vague interpretations of data by Chairwoman Janet Yellen at a press conference a half hour after the announcement.
This is all nonsense, all for show, and all for naught. Any attempt at "normalization" (as the Fed likes to put it) will send the interest on US debt to astronomical levels, upsetting the entire global financial universe.
It is precisely why the Fed and other central banks cannot raise rates, or, if they somehow choose to do so, it will be a gradual, drawn out process, because the unwinding of 5, 7, 10, and 30-year notes and bonds will take that many years. Unless the Fed intends to bankrupt all existing nation-states - always a possibility - interest rate increases will be gradual, if at all. The central banks have no way out of the mess they've created, except by creating another, even worse mess.
Tomorrow, like today and the day before, will be nothing but a dog-and-pony show, and a bad one at that.
Nothing even close to important will occur prior to the November elections. The Fed and their buddies are hoping that Hillary Clinton remains alive long enough to win and then, last until January 20, when she will supposedly assume the throne of president of the United States of America.
Those are two possibilities that fewer and fewer people are putting on hard money. There is one good future for the USA, and it does not include a Clinton presidency.
Tuesday's Close:
Dow 30
18,129.96, +9.79 (0.05%)
NASDAQ
5,241.35, +6.33 (0.12%)
S&P 500
2,139.76, +0.64 (0.03%)
^NYA
NYSE COMPOSITE (DJ)
10,573.98, +9.68 (0.09%)
Consensus sentiment is that the governors will do what they've done at every meeting except one since the end of 2008... nothing.
Federal funds rate will likely remain at 0.25-0.50, or effectively zero, and the financial world will once again be treated to the numb mumbling and vague interpretations of data by Chairwoman Janet Yellen at a press conference a half hour after the announcement.
This is all nonsense, all for show, and all for naught. Any attempt at "normalization" (as the Fed likes to put it) will send the interest on US debt to astronomical levels, upsetting the entire global financial universe.
It is precisely why the Fed and other central banks cannot raise rates, or, if they somehow choose to do so, it will be a gradual, drawn out process, because the unwinding of 5, 7, 10, and 30-year notes and bonds will take that many years. Unless the Fed intends to bankrupt all existing nation-states - always a possibility - interest rate increases will be gradual, if at all. The central banks have no way out of the mess they've created, except by creating another, even worse mess.
Tomorrow, like today and the day before, will be nothing but a dog-and-pony show, and a bad one at that.
Nothing even close to important will occur prior to the November elections. The Fed and their buddies are hoping that Hillary Clinton remains alive long enough to win and then, last until January 20, when she will supposedly assume the throne of president of the United States of America.
Those are two possibilities that fewer and fewer people are putting on hard money. There is one good future for the USA, and it does not include a Clinton presidency.
Tuesday's Close:
Dow 30
18,129.96, +9.79 (0.05%)
NASDAQ
5,241.35, +6.33 (0.12%)
S&P 500
2,139.76, +0.64 (0.03%)
^NYA
NYSE COMPOSITE (DJ)
10,573.98, +9.68 (0.09%)
Friday, September 16, 2016
Confusion Reigns In Advance Of FOMC Interest Rate Meeting
Depending upon your individual point of view, Friday's trading was either remarkable or expected.
Following Thursday's ramp-up on news that retail sales were still slumping - leading many to believe the Fed would not dare raise rates next week - stocks opened the day in the red and remained there.
This being a triple-or-quad witching options expiration day, the downdraft could signify many things, but mostly that traders had done their best to capitalize on Thursday, before the rush to close out positions.
That's the most reliable explanation for Friday's fumble, though hardly one adequate enough.
The week ending on a downbeat means little, except that there was some selling in the face of uncertainty over the weekend and leading up to the FOMC meeting Tuesday and Wednesday.
Despite the considerable volatility in play, Dow and S&P stocks ended the week roughly where they began, the NASDAQ was ahead by more than two percent, with the NYSE Composite three-quarters of a percent lower, leaving everyone equally confused.
Betting types will be putting their money on the Fed leaving rates unchanged at the upcoming meeting, not wanting to damage the chances for Hillary Clinton any further than the candidate has done so herself.
Friday's Close:
Dow Jones Industrial Average
18,123.80, -88.68 (-0.49%)
NASDAQ
5,244.57, -5.12 (-0.10%)
S&P 500
2,139.16, -8.10 (-0.38%)
NYSE Composite
10,529.83, -73.11 (-0.69%)
For the Week:
Dow: +38.35 (0.25%)
NASDAQ: +118.66 (2.31%)
S&P 500: +11.35 (0.53%)
NYSE Composite: -80.00 (-0.76%)
Following Thursday's ramp-up on news that retail sales were still slumping - leading many to believe the Fed would not dare raise rates next week - stocks opened the day in the red and remained there.
This being a triple-or-quad witching options expiration day, the downdraft could signify many things, but mostly that traders had done their best to capitalize on Thursday, before the rush to close out positions.
That's the most reliable explanation for Friday's fumble, though hardly one adequate enough.
The week ending on a downbeat means little, except that there was some selling in the face of uncertainty over the weekend and leading up to the FOMC meeting Tuesday and Wednesday.
Despite the considerable volatility in play, Dow and S&P stocks ended the week roughly where they began, the NASDAQ was ahead by more than two percent, with the NYSE Composite three-quarters of a percent lower, leaving everyone equally confused.
Betting types will be putting their money on the Fed leaving rates unchanged at the upcoming meeting, not wanting to damage the chances for Hillary Clinton any further than the candidate has done so herself.
Friday's Close:
Dow Jones Industrial Average
18,123.80, -88.68 (-0.49%)
NASDAQ
5,244.57, -5.12 (-0.10%)
S&P 500
2,139.16, -8.10 (-0.38%)
NYSE Composite
10,529.83, -73.11 (-0.69%)
For the Week:
Dow: +38.35 (0.25%)
NASDAQ: +118.66 (2.31%)
S&P 500: +11.35 (0.53%)
NYSE Composite: -80.00 (-0.76%)
Wednesday, September 14, 2016
Back To School Not For All; Trump Surges
Well, it's still summer for those of us who go by the calendar rather than a Labor Day or back-to-school regimen.
Actually, most of us hated school, didn't we? And work isn't much better, so... retirement?
Good luck with that.
In any case, stocks are confused, but oil dipped to its lowest level in weeks, which should set firre to the bears' feet. They'll be coming out of summer slumber soon enough to catch another downdraft is our guess, even though the Fed dare not raise the federal funds rate next week.
The likelihood of a Trump presidency grows larger with each passing day, which is enough to cause serious sickness across the investing spectrum, although his victory will prove a dynamic positive in the long run.
It's the short term that scares most people.
Wednesday's Woes:
Dow Jones Industrial Average
18,034.77, -31.98 (-0.18%)
NASDAQ
5,173.77, 18.52 (0.36%)
S&P 500
2,125.77, -1.25 (-0.06%)
NYSE Composite
10,511.54, -23.82 (-0.23%)
Actually, most of us hated school, didn't we? And work isn't much better, so... retirement?
Good luck with that.
In any case, stocks are confused, but oil dipped to its lowest level in weeks, which should set firre to the bears' feet. They'll be coming out of summer slumber soon enough to catch another downdraft is our guess, even though the Fed dare not raise the federal funds rate next week.
The likelihood of a Trump presidency grows larger with each passing day, which is enough to cause serious sickness across the investing spectrum, although his victory will prove a dynamic positive in the long run.
It's the short term that scares most people.
Wednesday's Woes:
Dow Jones Industrial Average
18,034.77, -31.98 (-0.18%)
NASDAQ
5,173.77, 18.52 (0.36%)
S&P 500
2,125.77, -1.25 (-0.06%)
NYSE Composite
10,511.54, -23.82 (-0.23%)
Tuesday, September 13, 2016
Volatility Returns As Stocks Retrace Friday's Losses
Writing just after noon on Tuesday, stocks seem to be in a certain funk over the future of not just corporate earnings, but the direction of the Federal Reserve and the outcome of the 2016 presidential race.
On the latter, Hillary Clinton's continued lying (even about her health, which is in terrible condition) may be costing her the election, to say nothing of the idea that many people who may have held their noses and voted for the Democrat status quo choice over the maverick Trump, may be changing their minds given that Hillary may not be able to effectively serve as president, yet alone make it to the finish line in the election process come November.
While Trump has held his tongue over Hillary's health issues, he continues to gain in the polls and in popularity with the American people. With the election less than two months away, any more gaffes by Clinton could prove fatal to her presidential aspirations, which, in the long run, would likely be a good thing for the American public.
Wall Street doesn't apparently appreciate the way things are going, though with Hillary losing ground, there's even less chance that the FOMC will announce a rate hike at their meeting next week. Trump's bashing of Janet Yellen earlier is also weighing on markets, and while the stock market may not like the way he's talking, as usual, he's speaking the unblemished truth: stocks are overpriced due to Fed meddling.
Is this how it all ends, with a Trump presidency and a wholesale cleansing of the sick economic policy apparatus?
We can only hope.
After Monday's dead-cat rally, stocks have given back all of those gains by midday, and then some. Get ready for a rocky ride this afternoon and more days of heightened volatility to come as the election takes precedence over all other economic and political events.
On the latter, Hillary Clinton's continued lying (even about her health, which is in terrible condition) may be costing her the election, to say nothing of the idea that many people who may have held their noses and voted for the Democrat status quo choice over the maverick Trump, may be changing their minds given that Hillary may not be able to effectively serve as president, yet alone make it to the finish line in the election process come November.
While Trump has held his tongue over Hillary's health issues, he continues to gain in the polls and in popularity with the American people. With the election less than two months away, any more gaffes by Clinton could prove fatal to her presidential aspirations, which, in the long run, would likely be a good thing for the American public.
Wall Street doesn't apparently appreciate the way things are going, though with Hillary losing ground, there's even less chance that the FOMC will announce a rate hike at their meeting next week. Trump's bashing of Janet Yellen earlier is also weighing on markets, and while the stock market may not like the way he's talking, as usual, he's speaking the unblemished truth: stocks are overpriced due to Fed meddling.
Is this how it all ends, with a Trump presidency and a wholesale cleansing of the sick economic policy apparatus?
We can only hope.
After Monday's dead-cat rally, stocks have given back all of those gains by midday, and then some. Get ready for a rocky ride this afternoon and more days of heightened volatility to come as the election takes precedence over all other economic and political events.
Saturday, September 10, 2016
Who Pulled The Plug? Friday's Freefall In Perspective
Everything was going along so swimmingly for the elitists of the world.
Interest rates were near or below zero in nearly every developed nation (Japan, the EU, Switzerland, the main components of such madness), but in the USA the Federal Reserve continued to hint that they would like to "normalize" rates, or, in a manner not-so-kind, raise the short term federal funds rate a little, tiny bit more, maybe soon, like at the September FOMC meeting.
Well, stock investors would have no part of that, so, when Fed Governor Rosengren said that the economy was strong enough to warrant a rate hike at the next FOMC meeting, September 20-21,, the market opened with a bang to the downside. Regardless of the other Fed governors - Tarullo and Kaplan - who would speak later on Friday and offer more dovish comments on raising rates, it was too late. Strong hands in the market had made their moves, and no reassurances would correct that.
As Friday wore on, the selling intensified, with the major indices finishing a week that had been eerily quiet and unassuming with the biggest sell-off since January.
Strangely enough, although Fed governors and other economists believe the economy is in pretty good shape, one would be advised to get some input from the man on the street (those 95 million unemployed Americans) who isn't buying it, or from presidential polls, which show Donald Trump about to overtake Hillary Clinton and the status quo in what should amount to a landslide victory and a mandate for major policy overhaul in many areas of governance.
All told, it was a very disturbing week for the powers that be.
Friday's Fallout:
Dow Jones Industrial Average
18,085.45, -394.46 (-2.13%)
S&P 500
2,127.81, -53.49 (-2.45%)
NASDAQ
5,125.91, -133.57 (-2.54%)
NYSE Composite
10,613.53, -268.80 (-2.47%)
The Week:
Dow: -406.51 (-2.20%)
S&P 500: -52.17 (-2.39%)
NASDAQ: -123.99 (-2.36%)
NYSE Composite: -243.39 (-2.24%)
Interest rates were near or below zero in nearly every developed nation (Japan, the EU, Switzerland, the main components of such madness), but in the USA the Federal Reserve continued to hint that they would like to "normalize" rates, or, in a manner not-so-kind, raise the short term federal funds rate a little, tiny bit more, maybe soon, like at the September FOMC meeting.
Well, stock investors would have no part of that, so, when Fed Governor Rosengren said that the economy was strong enough to warrant a rate hike at the next FOMC meeting, September 20-21,, the market opened with a bang to the downside. Regardless of the other Fed governors - Tarullo and Kaplan - who would speak later on Friday and offer more dovish comments on raising rates, it was too late. Strong hands in the market had made their moves, and no reassurances would correct that.
As Friday wore on, the selling intensified, with the major indices finishing a week that had been eerily quiet and unassuming with the biggest sell-off since January.
Strangely enough, although Fed governors and other economists believe the economy is in pretty good shape, one would be advised to get some input from the man on the street (those 95 million unemployed Americans) who isn't buying it, or from presidential polls, which show Donald Trump about to overtake Hillary Clinton and the status quo in what should amount to a landslide victory and a mandate for major policy overhaul in many areas of governance.
All told, it was a very disturbing week for the powers that be.
Friday's Fallout:
Dow Jones Industrial Average
18,085.45, -394.46 (-2.13%)
S&P 500
2,127.81, -53.49 (-2.45%)
NASDAQ
5,125.91, -133.57 (-2.54%)
NYSE Composite
10,613.53, -268.80 (-2.47%)
The Week:
Dow: -406.51 (-2.20%)
S&P 500: -52.17 (-2.39%)
NASDAQ: -123.99 (-2.36%)
NYSE Composite: -243.39 (-2.24%)
Thursday, September 8, 2016
This IS September Under The Fed's Thumb
No movement. No comment.
Thursday:
Dow Jones Industrial Average
18,479.91, -46.23 (-0.25%)
S&P 500
2,181.30, -4.86 (-0.22%)
NASDAQ
5,259.48, -24.44 (-0.46%)
NYSE Composite
10,881.76, -8.41 (-0.08)
Thursday:
Dow Jones Industrial Average
18,479.91, -46.23 (-0.25%)
S&P 500
2,181.30, -4.86 (-0.22%)
NASDAQ
5,259.48, -24.44 (-0.46%)
NYSE Composite
10,881.76, -8.41 (-0.08)
Wednesday, September 7, 2016
Seriously, Nothing To See Here; Volatility Dead
It's getting more and more difficult to keep a straight face when discussing the so-called "markets," when they only react to the edicts and pronouncements from the Federal Reserve.
Maybe things are just better nowadays, with lower profits for the S&P 500 companies, but higher share prices. Something is going to give. Some day. Maybe.
Hump Day:
Dow Jones Industrial Average
18,526.14, -11.98 (-0.06%)
NASDAQ
5,283.93, +8.02 (0.15%)
S&P 500
2,186.16, -0.32 (-0.01%)
^NYA
NYSE Composite
10,890.01, -0.78 (-0.01%)
Maybe things are just better nowadays, with lower profits for the S&P 500 companies, but higher share prices. Something is going to give. Some day. Maybe.
Hump Day:
Dow Jones Industrial Average
18,526.14, -11.98 (-0.06%)
NASDAQ
5,283.93, +8.02 (0.15%)
S&P 500
2,186.16, -0.32 (-0.01%)
^NYA
NYSE Composite
10,890.01, -0.78 (-0.01%)
Tuesday, September 6, 2016
If It Isn't Already, The Stock Market Should Be Rigged
Seriously, shouldn't stocks just go higher all the time given that the central bank has everybody's backs?
Makes sense if you are invested in establishment slave-labor and tax policies that have crippled the middle class.
After Labor Day Bonanza (stocks were down early, but we can't have that):
Dow Jones Industrial Average
18,538.12, +46.16 (0.25%)
NASDAQ
5,275.91, +26.01 (0.50%)
S&P 500
2,186.48, +6.50 (0.30%)
NYSE Composite
10,891.15, +34.23 (0.32)
Makes sense if you are invested in establishment slave-labor and tax policies that have crippled the middle class.
After Labor Day Bonanza (stocks were down early, but we can't have that):
Dow Jones Industrial Average
18,538.12, +46.16 (0.25%)
NASDAQ
5,275.91, +26.01 (0.50%)
S&P 500
2,186.48, +6.50 (0.30%)
NYSE Composite
10,891.15, +34.23 (0.32)
Saturday, September 3, 2016
August Jobs Report Disappoints, Traders Euphoric
The headline says what's so weird about markets in the central banking age: Bad news is good news.
In this instance, the August non-farm payroll report delivered only 151,000 net new jobs when expectations were for 180,000.
While it wasn't a huge miss, and, the BLS NFP report is one of the most conflated, untrustworthy, fragile and ultimately revisionist data points delivered to markets every month, it still holds water with the investing class.
The point taken here is that since there seems to be not enough jobs created to keep the economy humming along at anything more than a 1-1.5% growth rate, the Federal Reserve will not have any good reason to raise rates at their next meeting, in about two-and-a-half weeks.
Halelujah! The party continues.
Friday's Free-for-all:
Dow Jones Industrial Average
18,491.96, +72.66 (0.39%)
NASDAQ
5,249.90, +22.69 (0.43%)
S&P 500
2,179.98, +9.12 (0.42%)
NYSE Composite
10,856.92, +84.99 (0.79%)
For the Week:
Dow: +96.56 (+0.52%)
NASDAQ: +30.98 (+0.59%)
S&P 500: +10.94 (+0.50%)
NYSE Comp.: +107.59 (+1.00%)
In this instance, the August non-farm payroll report delivered only 151,000 net new jobs when expectations were for 180,000.
While it wasn't a huge miss, and, the BLS NFP report is one of the most conflated, untrustworthy, fragile and ultimately revisionist data points delivered to markets every month, it still holds water with the investing class.
The point taken here is that since there seems to be not enough jobs created to keep the economy humming along at anything more than a 1-1.5% growth rate, the Federal Reserve will not have any good reason to raise rates at their next meeting, in about two-and-a-half weeks.
Halelujah! The party continues.
Friday's Free-for-all:
Dow Jones Industrial Average
18,491.96, +72.66 (0.39%)
NASDAQ
5,249.90, +22.69 (0.43%)
S&P 500
2,179.98, +9.12 (0.42%)
NYSE Composite
10,856.92, +84.99 (0.79%)
For the Week:
Dow: +96.56 (+0.52%)
NASDAQ: +30.98 (+0.59%)
S&P 500: +10.94 (+0.50%)
NYSE Comp.: +107.59 (+1.00%)
Thursday, September 1, 2016
FOMC Focus: Will Stocks Change Direction After Labor Day?
Today's headline offers a provocative suggestion, though the simple answer to the question is a flat-out "NO," simply because the overtly political Federal Reserve will not - under an circumstances - raise interest rates in September.
That is almost so widely accepted within the financial community as to make it nearly a fact, a fait accompli, a gospel truth.
There are any number of reasons why the FOMC will not raise the federal funds rate even one basis point at their upcoming meeting on September 20 and 21, not the least of which is the assumption that such a rash move would derail the presidential bid by the status quo candidate, the fair-haired-soon-to-be-liar-in-chief, Hillary Clinton.
Naturally, that's a one-sided argument which has nothing to do with economics, but the Fed has other issues behind their upcoming decision to stand pat on rates for the foreseeable future.
Among these issues are the ongoing candidacy of Mr. Donald J. Trump, who is seen as anathema to anything and everything establishment, and that means the Fed itself. A Trump victory in November would almost certainly foment much in the way of chaos, including a pre-emptive attack from the Fed itself, sensing an almost perfect opening to raise rates and crash the market, maybe even do away with the entire post-Bretton Woods arrangement via a wholesale financial collapse.
That might be fun, but the projections fro the US economy going forward are not, have not been for some time and will not be. That's the main reason the Fed is stuck at the near-zero bound, because not only the US economy, but that of almost all developed nations are not growing. Rather, they are growling with intense citizen upset, declining labor utilization rates and a demographic wall that current policies can and will never scale.
The Fed is boxed in, as are all central banks. They can't do anything except buy up more overpriced assets even though that effort has failed to produce their highly-anticipated inflation and associated growth. One might say that all the central bank coddling of the system has produced is a massive over-supply of everything and a deflationary vortex that challenges their Keynesian orthodoxy.
The Fed - unless Hillary Clinton is elected president, and even that's no clincher - is toast.
Thursday's Results:
Dow Jones Industrial Average
18,419.30, +18.42 (0.10)
NASDAQ
5,227.21, 13.99 (0.27%)
S&P 500
2,170.86, -0.09 (0.00%)
^NYA
NYSE Composite
10,771.91, +7.16 (0.07%)
That is almost so widely accepted within the financial community as to make it nearly a fact, a fait accompli, a gospel truth.
There are any number of reasons why the FOMC will not raise the federal funds rate even one basis point at their upcoming meeting on September 20 and 21, not the least of which is the assumption that such a rash move would derail the presidential bid by the status quo candidate, the fair-haired-soon-to-be-liar-in-chief, Hillary Clinton.
Naturally, that's a one-sided argument which has nothing to do with economics, but the Fed has other issues behind their upcoming decision to stand pat on rates for the foreseeable future.
Among these issues are the ongoing candidacy of Mr. Donald J. Trump, who is seen as anathema to anything and everything establishment, and that means the Fed itself. A Trump victory in November would almost certainly foment much in the way of chaos, including a pre-emptive attack from the Fed itself, sensing an almost perfect opening to raise rates and crash the market, maybe even do away with the entire post-Bretton Woods arrangement via a wholesale financial collapse.
That might be fun, but the projections fro the US economy going forward are not, have not been for some time and will not be. That's the main reason the Fed is stuck at the near-zero bound, because not only the US economy, but that of almost all developed nations are not growing. Rather, they are growling with intense citizen upset, declining labor utilization rates and a demographic wall that current policies can and will never scale.
The Fed is boxed in, as are all central banks. They can't do anything except buy up more overpriced assets even though that effort has failed to produce their highly-anticipated inflation and associated growth. One might say that all the central bank coddling of the system has produced is a massive over-supply of everything and a deflationary vortex that challenges their Keynesian orthodoxy.
The Fed - unless Hillary Clinton is elected president, and even that's no clincher - is toast.
Thursday's Results:
Dow Jones Industrial Average
18,419.30, +18.42 (0.10)
NASDAQ
5,227.21, 13.99 (0.27%)
S&P 500
2,170.86, -0.09 (0.00%)
^NYA
NYSE Composite
10,771.91, +7.16 (0.07%)
Tuesday, August 30, 2016
Stocks Give Back On Tuesday After Explosive Market Monday
Following Monday's ramp-alooza based on absolutely nothing other than consumer spending hitting its target, stocks lost ground on Tuesday heading into the Labor Day holiday weekend.
Since this is absolutely the slowest week of the year for everybody except maybe vacation rentals, don't look for any kind of major move in either direction prior to next Tuesday.
A week of nothing, otherwise known as the pain trade. There should be some profit-taking and squaring down on risky positions, but, again, nothing overtly dramatic.
Everything has absolutely flattened out, except possibly the $/Yen pair, back up to 103 on the day.
Tuesday's Trauma:
Dow Jones Industrial Average
18,454.30, -48.69 (-0.26%)
NASDAQ
5,222.99, -9.34 (-0.18%)
S&P 500
2,176.12, -4.26 (-0.20%)
NYSE Composite
10,797.10, -14.24 (-0.13%)
Since this is absolutely the slowest week of the year for everybody except maybe vacation rentals, don't look for any kind of major move in either direction prior to next Tuesday.
A week of nothing, otherwise known as the pain trade. There should be some profit-taking and squaring down on risky positions, but, again, nothing overtly dramatic.
Everything has absolutely flattened out, except possibly the $/Yen pair, back up to 103 on the day.
Tuesday's Trauma:
Dow Jones Industrial Average
18,454.30, -48.69 (-0.26%)
NASDAQ
5,222.99, -9.34 (-0.18%)
S&P 500
2,176.12, -4.26 (-0.20%)
NYSE Composite
10,797.10, -14.24 (-0.13%)
Saturday, August 27, 2016
Yellen Speaks, Markets More Confused After Comments By Fisher, Bullard, Lockhart
After a week-long wait for something of substance from Fed Chair Janet Yellen in her widely-anticipated speech at Jackson Hole Friday, markets were somewhat disappointed when what they got from the aging, dowdy Fed Chairwoman was more of the same, a garbled, directionless mumbling about a strengthening US economy and plenty of buts, ahs, and well maybes.
Yellen seemed to express that a rate hike was on the table in September - just as it was in February, June and July - but offered certain caveats, not the least of which was that unexpected events could derail any plans the Fed might have considered.
Adding to the dismay and confusion were three separate comments by Fed officials in the immediate aftermath of Yellen's speech.
Vice Chairman, Stanley Fischer first spoke up with a weak affirmation that a rate hike in September was possible, but quickly afterward, Atlanta president, Dennis Lockhart, and St. Louis president James Bullard offered a different view, questioning the wisdom of a rate hike in September or even December.
Since markets have been on a razor's edge since Brexit and will be until the presidential election in November, it does seem a stretch that the Fed would risk a market collapse triggered by a rate hike, such as what happened after their last 1/4 basis point increase last December.
The Fed being less stoic and more political than ever, risking injury to Hillary Clinton's election - the choice of the status quo - would be foolhardy and dangerous.
Not to say that the Fed is not both of those, but when there's a real risk that an outsider - Donald J. Trump - could ascend to the highest office in the land, the Fed will be watching its own best interests, which would imply that a federal funds rate increase in September is certainly a no-go.
Now that the Fed has wasted the better part of a month and delivered nearly nothing of substance, one wonders what they can do for an encore. Oh, that's right. Eight years of loose, experimental monetary policy and promises of more to come.
What fun.
Friday's Closing Data:
Dow Jones Industrial Average
18,395.40, -53.01 (-0.29%)
NASDAQ
5,218.92, +6.71 (0.13%)
S&P 500
2,169.04, -3.43 (-0.16%)
NYSE Composite
10,749.33, -35.04 (-0.32%)
For the Week:
Dow 30: -157.17 (-0.85%)
S&P 500: -14.83 (0.68%)
NASDAQ: -19.46 (-0.37%)
NYSE Composite: -79.83 (-0.74%)
Yellen seemed to express that a rate hike was on the table in September - just as it was in February, June and July - but offered certain caveats, not the least of which was that unexpected events could derail any plans the Fed might have considered.
Adding to the dismay and confusion were three separate comments by Fed officials in the immediate aftermath of Yellen's speech.
Vice Chairman, Stanley Fischer first spoke up with a weak affirmation that a rate hike in September was possible, but quickly afterward, Atlanta president, Dennis Lockhart, and St. Louis president James Bullard offered a different view, questioning the wisdom of a rate hike in September or even December.
Since markets have been on a razor's edge since Brexit and will be until the presidential election in November, it does seem a stretch that the Fed would risk a market collapse triggered by a rate hike, such as what happened after their last 1/4 basis point increase last December.
The Fed being less stoic and more political than ever, risking injury to Hillary Clinton's election - the choice of the status quo - would be foolhardy and dangerous.
Not to say that the Fed is not both of those, but when there's a real risk that an outsider - Donald J. Trump - could ascend to the highest office in the land, the Fed will be watching its own best interests, which would imply that a federal funds rate increase in September is certainly a no-go.
Now that the Fed has wasted the better part of a month and delivered nearly nothing of substance, one wonders what they can do for an encore. Oh, that's right. Eight years of loose, experimental monetary policy and promises of more to come.
What fun.
Friday's Closing Data:
Dow Jones Industrial Average
18,395.40, -53.01 (-0.29%)
NASDAQ
5,218.92, +6.71 (0.13%)
S&P 500
2,169.04, -3.43 (-0.16%)
NYSE Composite
10,749.33, -35.04 (-0.32%)
For the Week:
Dow 30: -157.17 (-0.85%)
S&P 500: -14.83 (0.68%)
NASDAQ: -19.46 (-0.37%)
NYSE Composite: -79.83 (-0.74%)
Thursday, August 25, 2016
Continued Sluggishness In Equity Markets Awaiting Janet Yellen At Jackson Hole
Investors (if that's what they're being called these days) are largely on hold in advance of Fed Chair Janet Yellen's speech at Jackson Hole tomorrow and a return to what passes for normal conditions following the Labor Day holiday.
Essentially, stocks have been treading water for the past month, since setting new all-time highs mid-July and making a double top earlier this month.
For whatever it's worth, the one bid by the Fed and its central bank allies has produced a very dull market, if that's what we're calling it these days.
Of particular note is the current odds for a rate hike in September, currently hovering around 18%. For a December rate hike, it's basically a 50-50 proposition, though neither is actually very likely considering the fragility of the global economy.
Thursday's Closing Prices:
Dow Jones Industrial Average
18,448.41, -33.07 (-0.18%)
NASDAQ Composite
5,212.20, -5.49 (-0.11%)
S&P 500
2,172.47, -2.97 (-0.14%)
NYSE Composite
10,780.23, -10.95 (-0.10%)
Essentially, stocks have been treading water for the past month, since setting new all-time highs mid-July and making a double top earlier this month.
For whatever it's worth, the one bid by the Fed and its central bank allies has produced a very dull market, if that's what we're calling it these days.
Of particular note is the current odds for a rate hike in September, currently hovering around 18%. For a December rate hike, it's basically a 50-50 proposition, though neither is actually very likely considering the fragility of the global economy.
Thursday's Closing Prices:
Dow Jones Industrial Average
18,448.41, -33.07 (-0.18%)
NASDAQ Composite
5,212.20, -5.49 (-0.11%)
S&P 500
2,172.47, -2.97 (-0.14%)
NYSE Composite
10,780.23, -10.95 (-0.10%)
Tuesday, August 23, 2016
Stocks Stuck Until Labor Day
Editor's Note: Very rough schedule this and next week, so there may not be the usual market banter. For now, stocks seem stuck until after Labor Day. Of course, any big news will be reported upon. Enjoy the summer weather!
Nothing to write home about today, as stocks ramped early in the session and sold off the rest of the day. Sluggish is an appropriate way to call it.
Tuesday's Travails:
Dow Jones Industrial Average
18,547.30, +17.88 (0.10%)
S&P 500
2,186.90, +4.26 (0.20%)
NASDAQ
5,260.08, +15.47 (0.30%)
NYSE Composite
10,847.49, +31.57 (0.29%)
Nothing to write home about today, as stocks ramped early in the session and sold off the rest of the day. Sluggish is an appropriate way to call it.
Tuesday's Travails:
Dow Jones Industrial Average
18,547.30, +17.88 (0.10%)
S&P 500
2,186.90, +4.26 (0.20%)
NASDAQ
5,260.08, +15.47 (0.30%)
NYSE Composite
10,847.49, +31.57 (0.29%)
Monday, August 22, 2016
Slow Week For Stocks Ends With Losses
Despite various new highs, stocks traded in a very tight range over the course of the week.
Not surprisingly, August is the most popular time for vacations, not exclusive of stock brokers, traders, managers and all those who participate in making the markets.
Friday's trading was particularly sluggish, with all the major averages finishing in the red, albeit, slightly.
The weekly figures were hardly encouraging to either bears or bulls, with the main indices offering losses or gains of fractions of one percentage point, the S&P the least affected, down 0.18 points.
Leading into the final full week of August trading, with monthly options already having expired (Friday), another week of widespread complacency is expected.
Figures for Friday:
Dow Jones Industrial Average
18,552.57, -45.13 (-0.24%)
NASDAQ
5,238.38, -1.77 (-0.03%)
S&P 500
2,183.87, -3.15 (-0.14%)
NYSE Composite
10,829.15, -33.86 (-0.31%)
For the Week:
Dow: -23.90 (-0.13%)
S&P 500: -0.18 (-0.01%)
NASDAQ: +5.48 (0.10%)
NYSE Composite: +6.74 (0.06%)
Not surprisingly, August is the most popular time for vacations, not exclusive of stock brokers, traders, managers and all those who participate in making the markets.
Friday's trading was particularly sluggish, with all the major averages finishing in the red, albeit, slightly.
The weekly figures were hardly encouraging to either bears or bulls, with the main indices offering losses or gains of fractions of one percentage point, the S&P the least affected, down 0.18 points.
Leading into the final full week of August trading, with monthly options already having expired (Friday), another week of widespread complacency is expected.
Figures for Friday:
Dow Jones Industrial Average
18,552.57, -45.13 (-0.24%)
NASDAQ
5,238.38, -1.77 (-0.03%)
S&P 500
2,183.87, -3.15 (-0.14%)
NYSE Composite
10,829.15, -33.86 (-0.31%)
For the Week:
Dow: -23.90 (-0.13%)
S&P 500: -0.18 (-0.01%)
NASDAQ: +5.48 (0.10%)
NYSE Composite: +6.74 (0.06%)
Subscribe to:
Posts (Atom)
Posts
