Global Stocks Rise, Copper Soars In Thin Holiday Volumes

European stocks are steady in post-Christmas trading if struggling for traction after a mixed session in Asia, amid trading thinned by a holiday-shortened week and ongoing worries about the tech sector; however a strong rally in commodities – including copper and oil – buoyed expectations for a strong 2018 and helped offset concerns over the technology sector triggered by reports of soft iPhone X demand.
U. S. equity futures nudged higher while the dollar weakened against most G-10 peers as investors await the release of U. S. consumer-confidence data, with much of the spotlight falling on commodity currencies. The OZ dollar holds onto gains as copper surges to a three-year high; oil retreats after reaching the highest close in more than two years following a pipeline explosion in Libya on Tuesday. Treasuries and core European core bond yields are a touch lower.
The Stoxx Europe 600 Index edged lower, with tech stocks hit for the third day amid rumors of weak iPhone demand and leading the decline as chipmakers slumped after analysts lowered iPhone X shipment projections, sending the Nasdaq Composite Index lower overnight. While mining and oil stocks strengthened due to a surge in copper prices to a 3.5 year high (see below), the European STOXX 600 index slipped 0.1% as European tech stocks tumbled on reports that demand for Apple’s iPhone X may be weaker than expected. The equity benchmark index is poised for an annual gain of 8.1%, the best advance in four years. Elsewhere, Volvo rose as China’s Geely bought Cevian’s stake in the truckmaker, making it Volvo AB’s largest stakeholder. IWG surged the most since 2009 after confirming it has received a a non-binding takeover offer from a consortium backed by Brookfield Asset Management and Onex.

This post was published at Zero Hedge on Dec 27, 2017.

Putting the Economics Back in Christmas

I applaud the online magazine Slate for its recurring series on ‘the dismal science,’ as they call it. Rather than boring discussions of the housing market or the NASDAQ index, economists such as Steven Landsburg and others tackle interesting issues. Don’t get me wrong, I just about always disagree with the columns. I was never puzzled as to why people walk up stairs but not escalators, I don’t think an increase in promiscuity will reduce the spread of HIV, and I’m still not convinced that a person should only give to one charity. Even so, the articles get me thinking, and that’s what’s important.
So the reader must understand that it is in this festive, jovial spirit that I proceed to devastate a recent Slate article, ‘The Sovereign versus the Idiot.’ It is a stocking stuffed full of fallacies and plenty a non sequitur for all the family to enjoy. When I read an article like this, I am honestly humbled by how lucky I was to stumble across the wisdom of the Austrian economists. But enough preamble! On to the article’s inauspicious opening:
Economists generally salute holiday gift-giving for its healthy effect on the macroeconomy. And indeed, gift spending boosts GNP to the tune of $100 billion a year in the United States.

This post was published at Mises Canada on DECEMBER 26, 2017.

Bad Santa Buys Bonds, Bullion, & Bitcoin; Rotten Apple Spoils Promised Stock Rally

This was not teh Santa Claus rally that everyone was promised…
All thanks to ‘rotten’ Apple… as analysts lowered iPhone X shipment projections for the first quarter of next year, citing signs of lackluster demand at the end of the holiday shopping season, and the company’s shares fell Tuesday along with those of some suppliers.
Nasdaq ended Boxing Day deep in the red…Small Caps managed to close green…

This post was published at Zero Hedge on Dec 26, 2017.

4 Stocks to Avoid at All Costs in 2018

‘Tis the season to determine who’s been naughty or nice. I’ll give you the facts, then you decide.
This holiday story is about an SEC investigation that ended in May 2017. It was wrapped in plain, brown paper and just found under our tree, opened by Probes Reporter (‘Independent Investment Research Focused on Public Company Interaction with the SEC’) and Dealbreaker.
The three major players in this holiday tale are Tesla Inc. (Nasdaq: TSLA), Goldman Sachs Group Inc. (NYSE: GS), and the SEC itself.
What makes this a holiday story is that it’s about gifting. Who gifted what to whom, how much, and, most importantly, why.
You decide who’s naughty: Goldman Sachs, Tesla, the SEC, or all of the above?
Here are the unwrapped details…
What Tesla Knew vs. What Tesla Did
The story starts back on May 7, 2016. That’s when a Tesla Model S electric car in partial, self-driving autopilot mode plowed into the side of a truck on a divided highway in Florida, killing the driver of the Tesla.
Tesla brass found out about the crash that day but didn’t alert regulators until May 16, nine days later.

This post was published at Wall Street Examiner on December 22, 2017.

Explaining My Amazement About Those Turning Bullish On The Banking Sector Now

Recent price action
With the Nasdaq continuing higher this past week, it has now reached our minimum target we were looking for before a pullback may be seen. But, I think the XLF may be providing us with certain clues about how 2018 may turn out. And, it may not be as rosy as many believe. Well, at least the first half of the year.
Anecdotal and other sentiment indications
Interest rates are rising. Tax obligations will likely be dropping. And, many believe this could be a wonderful environment for our banks to thrive. In fact, I am seeing many Wall Street analysts picking the banking sector as one of their favorites for 2018. Well, I certainly cannot concur, based upon what I am seeing in my charts, which provide insight into market sentiment.
As markets move higher and higher, for some reason, people turn more and more bullish. I mean, the drive that most consumers have to find the best price for the goods and services they desire is conspicuously absent from the greater investor community.
Why is it that when you want to buy a high priced product, you will do extensive research to find the lowest price available, yet, when it comes to stocks, most will only buy after it has risen substantially? Have you ever considered this question?
For those of us who have studied markets, we would understand that the reason is because financial markets are emotionally driven, rather than logically driven. As prices rise, investors become more and more convinced that they will simply continue to rise in a linear manner. And, when the greatest percentage of investors maintain this belief, that is often the point in time when the market changes direction.
And, I am seeing a potential turn setting up into January of 2018.

This post was published at GoldSeek on Monday, 18 December 2017.

Yamada: Market Technicals Strong Though Record Margin Debt Spells Trouble

There’s no denying that 2017 has been a good year for investors, with most major asset classes showing gains for the year.
This time on Financial Sense Newshour, we spoke with Louise Yamada of LY Advisors about current conditions and whether she sees any signs of a market top or concerning developments.
Are We on Track for Longest Recovery?
Everything looks to be in alignment and going in one direction, and we’re already in the ninth year of this current bull market.
The cumulative advance-decline line has been confirming the rally, Yamada noted. It has been hitting new highs along with the major indexes.
Minimal Signs of Stress
On the Dow, there were some prior concerns because the Transports had been lagging the Industrials, but last week they experienced a strong breakout.
If you look at the Nasdaq, it’s behavior looks just like the Dow, consisting of a stepping stone pattern with higher lows and higher highs.

This post was published at FinancialSense on 12/14/2017.

What You’re Not Being Told About The Real Economy

The year 2000 was a transition year in a lot of ways. Though Y2K amounted to mild mass hysteria, people did have to get used to writing the date with 20 in front of the year rather than 19. It was a new millennium (depending on your view of Year 0) that seemed to have started off under the best possible terms.
Not only were stocks on fire at the outset, the economy was, too. The idea of this ‘new economy’ leading toward a permanent new plateau of low inflation growth, driven by the breathtaking productivity gains in telecommunications and computing, seemed quite real on the surface. US GDP advanced by more than 3% in 15 straight quarters from Q2 1996 through Q4 1999, averaging a sizzling 4.7% in those nearly four years of dot-com supremacy.
The labor market was clearly robust, too. In March 2000, the BLS estimates (current benchmarks) that total payrolls (Establishment Survey) rose by 468k from that February. That brought the 6-month average up to +303k, a record of expansion that also mystified economists for its lack of inflationary wage pressures. In any case, the late nineties had roared up to the doorstep of the 21st century.
We all know what happened in April 2000, as investors suddenly got cold feet about first the high flying NASDAQ. It wasn’t just stock prices and IPOs, of course, as it really meant one of the major economic themes of that age was in danger being undermined, if not thoroughly debunked. The new economy of the 21st century might not have been grounded so solidly in true economics (small ‘e’) as everyone thought (especially those running the Fed).

This post was published at Zero Hedge on Dec 10, 2017.

The “Bombshell” Reason Tech Stocks Just Suffered The Biggest Rout Since Brexit, In Two Charts

“Last week, after making new highs, the NASDAQ ‘reversed’ to the downside. It bounced from there, but yesterday’s action was horrific, for having opened sharply, violently, surprisingly higher, by the day’s end the NASDAQ was sharply, violently, surprisingly weaker and it was so even as the Dow finished higher on the day, albeit materially below its peak. This morning, as we write, the Dow futures are higher but the NASDAQ is weaker… again!” – Dennis Gartman
As we discussed in our overnight wrap, FANG stocks have tumbled 5.6% in last 5 sessions…
***
… while overnight the MSCI World Tech index just suffered its biggest four-day drop since Brexit, as contagion from the tech-rout spread across the globe.

This post was published at Zero Hedge on Dec 5, 2017.

Tax Euphoria Fades As Tech Rout Spreads

One look at S&P futures this morning reveals an unchanged market, however it is again the violent sector rotation that is taking place behind the scenes that is the real story, with defensive sectors real estate, retail, food, utilities outperforming while investors continue to bail and book profits on tech stocks after sharp gains since the start of the year. Monday’s Nasdaq rout also spread to European and Asian markets which fall on last minute changes to the tax plan, most notably the retaining of AMT which could prevent companies from making use of intellectual property tax breaks, effectively raising their tax rates. As a reminder, on Monday the Nasdaq fell 1.2% following broad based hedge fund liquidation from the most crowded sector, after tax experts said Senate Republicans unwittingly passed a bill that would mean higher-than-intended taxes for technology firms and other corporations; in sympathy Europe’s Stoxx tech sector index SX8P hit the lowest since late September, down 8% since mid-November
European stocks dipped, trimming the previous session’s sharp gains amid a renewed selloff in tech stocks globally and as weaker industrial metal prices weighed on mining shares which slumped ‘due to a marked slowdown in China’s metal consumption growth, with market participants foreseeing weaker public infrastructure spending growth extending into 2018,’ SP Angel analysts including John Meyer, Simon Beardsmore and Sergey Raevskiy write in note.
The Stoxx 600 is down 0.2%, remaining in a range between its 50-DMA and 200-DMA started in mid-November. The Stoxx tech sector SX8P index falls 0.6%, mirroring a drop in the Nasdaq Monday. As noted above, Europe’s tec sector is down about 8% since a peak in early November, amid a sharp sector rotation out of momentum stocks and into potential winners of the U. S. tax reform. UK’s FTSE 100 outperforms peers amid the weaker pound which had briefly tripped through 1.34 as Brexit talks had been unravelled over disagreements from the DUP in regards to a hard border between Ireland and Northern Ireland. UK grocery retailers are among the top movers in the FTSE 100 after a positive note from Goldman Sachs. Elsewhere, to the downside, health care and material names lag.

This post was published at Zero Hedge on Dec 5, 2017.

How Passing the Senate’s Tax Bill Could Lead to a Record High for the Dow Jones Today

This is a syndicated repost courtesy of Money Morning – We Make Investing Profitable. To view original, click here. Reposted with permission.
Investors are optimistic about the Dow Jones today following the Senate’s passage of the largest overhaul of the American tax code in 30 years.
Dow Futures are up 246 points this morning after every Republican senator except for Bob Corker, of Tennessee, voted in favor of the reform bill. But not every investor is optimistic. Here’s the truth about the Senate’s tax bill you can’t afford to miss…
Here are the numbers from Friday for the Dow, S&P 500, and Nasdaq:
Index Previous Close Point Change Percentage Change Dow Jones 24231.59 -40.76 -0.17% S&P 500 2642.22 -5.36 -0.20% Nasdaq 6847.59 -26.39 -0.38%

This post was published at Wall Street Examiner by Garrett Baldwin ‘ December 4, 2017.

Technical Scoop – Weekend Update Dec 3

Weekly Update
‘You can lead a horse to water, but you can’t make it drink’
– old saying
We may warn investors about the risks in the markets, but we can’t make them take action to do something about it. We recall back in late 1999/early 2000 receiving calls from people wanting to open up a brokerage account so that they could buy some tech or dot.com stock. We politely told them that to open an account would require we meet with the prospect, learn their investment goals, fill out papers, and await approval from the compliance department. The process could take more than a few days. By that time, the stock they were targeting could be up a further 10%, 20%, or even more.
Things were moving that fast. From lows in October 1998, the tech-heavy NASDAQ index soared almost 260% to its high in March 2000. The price earnings ratio (P/E) of the NASDAQ soared to an unheard-of (and never heard of again) 175 while some individual companies had P/Es over 400. The fact that the companies did not make any money was not an issue as the focus was on their long-term potential and growth. Warnings that the market was in an unsustainable bubble and that a potential crash could follow were largely ignored. Those communicating the warnings were dismissed as doomsayers, charlatans, or worse. Some received death threats. Two years, later by October 2002, the NASDAQ had fallen 78%. The bubble had burst.
Fast forward five years later. The Dow Jones Industrials (DJI) had soared to new all-time highs gaining 98% from October 2002 to October 2007. The NASDAQ had gained 158% in the same period but was still down 45% from the March 2000 high. But the real focus was on the hot housing market where prices had more than doubled since 2000 and where some regions saw even more spectacular growth. The growth had been spurred by the loosening of credit encouraged by government action, particularly through what was known as the Community Reinvestment Act and government agencies such as Fannie Mae and Freddie Mac.

This post was published at GoldSeek on 3 December 2017.

The Dow Peaked At 14,000 Before The Last Stock Market Crash, And Now Dow 24,000 Is Here

The absurdity that we are witnessing in the financial markets is absolutely breathtaking. Just recently, a good friend reminded me that the Dow peaked at just above 14,000 before the last stock market crash, and stock prices were definitely over-inflated at that time. Subsequently the Dow crashed below 7,000 before rebounding, and now thanks to this week’s rally we on the threshold of Dow 24,000. When you look at a chart of the Dow Jones Industrial Average, you would be tempted to think that we must be in the greatest economic boom in American history, but the truth is that our economy has only grown by an average of just 1.33 percent over the last 10 years. Every crazy stock market bubble throughout our history has always ended badly, and this one will be no exception.
And even though the Dow showed a nice gain on Wednesday, the Nasdaq got absolutely hammered. In fact, almost every major tech stock was down big. The following comes from CNN…

This post was published at The Economic Collapse Blog on November 29th, 2017.

“The Leaders Are Crashing” – It’s Not Just Junk Bonds That Have Given Up

We have been warning about significant divergences between equity prices and other asset classes for a few weeks (most notably the decoupling from equity risk and credit risk, junk bonds), but as BofA notes its not just these assets that are breaking away from soaring Nasdaq levels, in fact many of the rally’s leaders are crashing… in a way we have not seen recently.
High yield risk has suddenly decoupled from equity markets…

This post was published at Zero Hedge on Nov 10, 2017.

This Has Never Happened Before To The Nasdaq

No 52-week high in the Nasdaq 100 has ever been accompanied by as few advancing stocks as today’s. As most readers know, we are big proponents of strong breadth, or participation, in signifying healthy markets. When rallies are accompanied by a large swathe of advancing stocks, it is more likely to go further and last longer than those coming on the back of just a relatively few stocks. As such, it was encouraging to see the significant level of participation during the August-October stock market rally. Recent efforts, however, have not been so robust. Today’s action on the Nasdaq exchange is Exhibit A. On the one hand, the Nasdaq 100 (NDX) managed to rally – again – closing at a new all-time high – again. Despite the new high, however, the breadth on the Nasdaq read as follows (according to our vendor):

This post was published at Zero Hedge on Nov 8, 2017.

FANG Futures Launch

The other day, after reading one of my posts, my old boss sent me a note. It was a comment about the madness of investors chasing the hot momentum tech stocks.
‘We were reminiscing about this stuff last night and I clearly remember that near the end [of the DotCom bubble], CNBC decided to have the CEO of International Paper on Power Lunch. They immediately received what they said was hate mail. After that, the NASDAQ fell from 5200 to 2000 and it ushered in one of the greatest bull markets ever in old economy stocks (2001-2008).’
I thought that was a great insight. The mood at the top is downright hostile towards other investing themes.
I am not sure if we are at an equivalent point. It sure feels like the ‘Just own the damn robots’ mantra has engulfed the collective psyche of the investing public, but hey – we all know what Keynes learned the hard way.

This post was published at Zero Hedge on Nov 8, 2017.

Stock and Awe, Bears in Bondage

The Trump Rally pushed ahead relentlessly through a summer full of high omens and great disasters, all which it swatted off like flies. Even so, all was not perfect in the market as nerves began to jitter midsummer beneath the surface even among the most longtime bulls. Wall Street’s fear gauge (the CBOE Volatility Index) lifted its needle off its lower post to a nine-month high after President Trump’s comments about ‘fire and fury’ if North Korea didn’t toe the line. (Mind you, the high wasn’t very far off the post because of how placid the previous nine months had been.)
As volatility stirred languidly over the threat of nuclear war, stock prices took a little spill with all major stock indices seeing their biggest one-day drop since May. The SPX fall amounted to a 1.4% drop in a day – nothing damaging. The Dow dropped about 1% in a day. But beneath the surface, the market is looking different and shakier.
For example, trading narrowed to fewer players as more stocks in the Nasdaq 100 finally moved below their fifty-two week lows than moved above them. Likewise in the S&P. This phenomenon is known as the ‘Hindenburg omen,’ and tends to precede major crashes.

This post was published at GoldSeek on 7 November 2017.

Summing Up 2017 In Two Record-Breaking Charts

What can we say about 2017 that hasn’t been said already, as it continues to smash records?
Per Ryan Detrick, Senior Market Strategist, ‘2017 will likely be remembered for two things: a persistent bullish trend and historically low volatility.’ In fact, here are two more records that prove that point.
The Nasdaq has never made more all-time highs than the 63 it has made (so far) this calendar year, topping the previous record of 62 set in 1980.

This post was published at Zero Hedge on Nov 6, 2017.

Warming Economy, Red Hot Stock Market

With 15% gains in the major stock indices (Nasdaq 28%) stocks are on pace for their 4th best year since 1999. Precursors of accelerating economic growth abound in 2017, reflective of the rebounding earnings and future expectations. The stubbornly sluggish US GDP continues to hover near its 2.1% post mortgage bubble 7-year expansion cycle. Underlying proxies of manufacturing and service sectors are approaching historic rates of expansion with record demand for job seekers. Factories are struggling to find capacity as New Orders and Shipments are outpacing depleted customer inventories. Today’s 3.0% GDP report for the 3rd quarter, following the 2nd quarter pace of 3%, is a strong sign that real growth is finally percolating to the economy’s bottom line GDP.
US Manufacturing as measured by ISM’s Purchasing Managers Index (PMI) hit a 13 year high in September, one of the most comprehensive rates of expansion ever recorded. Should legislative winds provide corporate tax cuts and an estimated $3 Trillion repatriation of foreign earnings in 2018, then there may yet be hope for GDP growth rates above 3% despite the impedance of a tight labor pool. Lower business taxes here would boost global growth as other countries follow suit.

This post was published at FinancialSense on 11/02/2017.