Category: Daily Market Update

Daily Market Update – September 27, 2016 (Close)

Markets looked as if they were going to open on the calm side this morning after posting two consecutive triple digit losses for the first time since the Brexit vote.

There wasn’t much of a reason for either of the past two declining days, just as there’s not too much reason for any significant moves for the rest of the week, except perhaps Friday.

Of course, when there’s no reason, there’s reason to suspect just the opposite and that was again the case today, but this time in a different direction.

Today, it looked as if the markets may have taken their cue from Asian markets, but the buying accelerated as oil began falling, on news that it wasn’t too likely that anyone could agree on production cut backs.

That, at least, was nice to see.

Finally, a normal response to a supply side glut of oil.

With that done, maybe the market will gravitate toward calmness until Friday. That’s when the GDP is released and a surprising number could really move markets that are now expecting that there will be an interest rate increase in December. That would probably require some positive economic news and the GDP is a good place to start, especially if there are some upward revisions.

In the meantime, there are still lots of Federal reserve members set to speak this week and any of them has the power to move markets, even if only for a few hours until a counter-position is voiced.

With a purchase of shares yesterday that happened to be ex-dividend today, I don’t expect to be spending much more money this week, unless it looks as if I will be able to realize some new cash from those positions whose short option contracts expire this week.

There’s little reason to expect any sustained move higher while we await December, but with earnings about to start again in 2 weeks, it will be interesting to see whether or not companies are seeing anything hopeful ahead.

Any optimistic guidance would be welcomed enthusiastically by markets, as it has been a really long time since companies have pointed toward better times ahead.

With corporate earnings less buoyed by buybacks, sooner or later investors are going to demand earnings that are actually real earnings and those investors are very likely to reward real earnings improvements.

You would think that if the FOMC projects that the economy should be able to warrant a small increase in interest rates that there would be some good corporate earnings news ahead, as well.

But that still remains to be seen and I think that may still be another quarter into the future before companies start going out on a limb and say that the future looks better.

Daily Market Update – September 27, 2016 (7:30 AM)

Markets look as if they’re going to open on the calm side this morning after posting two consecutive triple digit losses for the first time since the Brexit vote.

There wasn’t much of a reason for either of the past two declining days, just as there’s not too much reason for any significant moves for the rest of the week, except perhaps Friday.

That’s when the GDP is released and a surprising number could really move markets that are now expecting that there will be an interest rate increase in December. That would probably require some positive economic news and the GDP is a good place to start, especially if there are some upward revisions.

In the meantime, there are still lots of Federal reserve members set to speak this week and any of them has the power to move markets, even if only for a few hours until a counter-position is voiced.

With a purchase of shares yesterday that happened to be ex-dividend today, I don’t expect to be spending much more money this week, unless it looks as if I will be able to realize some new cash from those positions whose short option contracts expire this week.

There’s little reason to expect any sustained move higher while we await December, but with earnings about to start again in 2 weeks, it will be interesting to see whether or not companies are seeing anything hopeful ahead.

Any optimistic guidance would be welcomed enthusiastically by markets, as it has been a really long time since companies have pointed toward better times ahead.

With corporate earnings less buoyed by buybacks, sooner or later investors are going to demand earnings that are actually real earnings and those investors are very likely to reward real earnings improvements.

You would think that if the FOMC projects that the economy should be able to warrant a small increase in interest rates that there would be some good corporate earnings news ahead, as well.

But that still remains to be seen and I think that may still be another quarter into the future before companies start going out on a limb and say that the future looks better.

Daily Market Update – September 26, 2016 (Close)

There really isn’t very much happening this week.

Earnings are just about over and the FOMC Statement has now been released.

What we do have is the release of the GDP on Friday and that may offer the first bit of proof that perhaps an interest rate increase may be warranted.

But what we really have this week are 12 speeches by voting and non-voting members of the FOMC.

Each of those will believe that he or she holds proprietary rights to the truth, but the real truth is that only the final speaker, Janet Yellen, will matter.

The further truth, though, is that she may matter a little bit less, as everyone is just getting more vocal and of their own minds,

With 6 of the speeches coming from voting members and the majority of those coming from interest rate hawks, it may be an interesting week of back and forths as the speakers jockey for their spot in the sun.

Today, however, what really weighed upon markets were foreign banks, specifically news that Deutsche Bank may not be in line to get any help from the German government in the event that it is short on capital. That weighed heavily on our own banking stocks and it is hard for US markets to move ahead if the financial sector isn’t feeling up to it.

That explains some of what we saw today, as the market closed on its lows, never really making any sincere effort to do anything better than a triple digit loss.

I have a couple of ex-dividend positions this week and a couple of expiring positions and cash in my pocket.

I didn’t feel a great sense of urgency to spend any of that money, but I knew that i could easily get pulled in.

And I did, but mostly for more dividend.

At the moment, my hope is that the expiring positions end up adding to my cash reserve and making up for the decision to actually spend some money today.

I wouldn’t mind a little bit more of a sell-off this week, as long as those 2 positions can still continue to do something worthwhile.

Both were hit in today’s sell off, but not to the degree that the market was hit, so we’re still in the running for something.

I don’t expect to be doing much of anything this week other than watching the markets possibly gyrate as we wonder when the 0.25% hammer will finally come down on us.

0.25%.

That’s what potential panic is all based upon.

How strange this market continues to be.

Daily Market Update – September 26, 2016 (8:30 AM)

There really isn’t very much happening this week.

Earnings are just about over and the FOMC Statement has now been released.

What we do have is the release of the GDP on Friday and that may offer the first bit of proof that perhaps an interest rate increase may be warranted.

But what we really have this week are 12 speeches by voting and non-voting members of the FOMC.

Each of those will believe that he or she holds proprietary rights to the truth, but the real truth is that only the final speaker, Janet Yellen, will matter.

The further truth, though, is that she may matter a little bit less, as everyone is just getting more vocal and of their own minds,

With 6 of the speeches coming from voting members and the majority of those coming from interest rate hawks, it may be an interesting week of back and forths as the speakers jockey for their spot in the sun.

I have a couple of ex-dividend positions this week and a couple of expiring positions and cash in my pocket.

I don’t feel a great sense of urgency to spend any of that money, but I could easily get pulled in.

At the moment, my hope is that the expiring positions end up adding to my cash reserve.

I wouldn’t mind a little bit of a sell-off this week, as long as those 2 positions can still continue to do something worthwhile.

I don’t expect to be doing much of anything this week other than watching the markets possibly gyrate as we wonder when the 0.25% hammer will finally come down on us.

0.25%.

That’s what potential panic is all based upon.

How strange this market continues to be.

Daily Market Update – September 23, 2016 (7:30 AM)

The Week in Review will be posted by 10 PM and the Weekend Update will be posted by Noon on Sunday.

The following trade outcomes are possible today:

Assignments: none

Rollovers: none

Expirations:   none

The following were ex-dividend this week:    LVS (9/20 $0.72)

Trades, if any, will be attempted to be made prior to 3:30 PM EDT

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Daily Market Update – September 22, 2016 (Close)

The market moved about 160 points higher yesterday as the FOMC announced that there wouldn’t be an interest rate increase.

At least right now.

The market, did as it had done other times, it seemed to accept the fact that there wouild be an interest rate ahead, as the FOMC hinted very strongly that there was room and time for such a hike still in 2016.

Actually, it didn’t do any of that until Chairman Yellen’s press conference.

Up until that point traders were trying to figure out what to do and actually reversed their initial knee jerk reaction which had returned the market to its opening highs and took it to its intra-day lows.

The Chairman’s words were the ones that soothed, as the market went higher as she recited her prepared text and then continued during the question and answer period and continued right until the closing bell.

Investors also got some good news from the Bank of Japan, which basically admitted that a negative interest rate environment had not been working.

For some here in the United States, there was still a fear that negative interest rates could have become the Federal Reserve’s next weapon.

So the market celebrated and there may be as many as 3 more months ahead, but it has been clear that whenever the market believes that there might be a chance of an interest rate increase in the near term, it doesn’t like the idea.

With the FOMC strongly suggesting that there was still time for an interest rate increase in 2016, we’ll see what happens as we draw near.

While most interpret that to mean December, there is nothing sacred to prevent an increase from being implemented before then.

That would likely get investors upset, even if the underlying economy was in good enough health to support that increase.

In the meantime all eyes will be focused on whatever economic reports might justify that increase.

Best of all, however, would be some cheery guidance coming from companies as earnings season starts all over again in about 3 weeks.

I suspect that there will be little for me to do for the rest of this week, with no expiring positions to think about.

Maybe another residual rally tomorrow, just as we had today, may give some opportunity for call sales on uncovered positions, but as has been the case for much of 2016, I’m happy just going for the ride and catching any opportunity that might come along.

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Daily Market Update – September 22, 2016 (7:30 AM)

The market moved about 160 points higher yesterday as the FOMC announced that there wouldn’t be an interest rate increase.

At least right now.

The market, did as it had done other times, it seemed to accept the fact that there wouild be an interest rate ahead, as the FOMC hinted very strongly that there was room and time for such a hike still in 2016.

Actually, it didn’t do any of that until Chairman Yellen’s press conference.

Up until that point traders were trying to figure out what to do and actually reversed their initial knee jerk reaction which had returned the market to its opening highs and took it to its intra-day lows.

The Chairman’s words were the ones that soothed, as the market went higher as she recited her prepared text and then continued during the question and answer period and continued right until the closing bell.

Investors also got some good news from the Bank of Japan, which basically admitted that a negative interest rate environment had not been working.

For some here in the United States, there was still a fear that negative interest rates could have become the Federal Reserve’s next weapon.

So the market celebrated and there may be as many as 3 more months ahead, but it has been clear that whenever the market believes that there might be a chance of an interest rate increase in the near term, it doesn’t like the idea.

With the FOMC strongly suggesting that there was still time for an interest rate increase in 2016, we’ll see what happens as we draw near.

While most interpret that to mean December, there is nothing sacred to prevent an increase from being implemented before then.

That would likely get investors upset, even if the underlying economy was in good enough health to support that increase.

In the meantime all eyes will be focused on whatever economic reports might justify that increase.

Best of all, however, would be some cheery guidance coming from companies as earnings season starts all over again in about 3 weeks.

I suspect that there will be little for me to do for the rest of this week, with no expiring positions to think about.

Maybe any residual rally today or tomorrow may give some opportunity for call sales on uncovered positions, but as has been the case for much of 2016, I’m happy just going for the ride and catching any opportunity that might come along.

.

Daily Market Update – September 21, 2016 (Close)

The Japanese stock market was barely 2% higher this morning as the Bank of Japan announced a change in monetary policy that was reminiscent of what the Federal reserve did a number of years ago as it focused on the yield curve.

All of that is far too complex for me to understand, but somehow the decision in Japan eases the way for the FOMC to do something, as the US would no longer stand to be the only major economy to be in a position to preside over increasing rates.

But still, as this morning was set to begin, no one was then expecting the FOMC to announce an increase in rates this afternoon.

Maybe that’s why stock futures were guardedly higher this morning.

But the Bank of Japan’s decision really does open the door for the FOMC to make a decision to raise rates today seem far more logical and with much less market related risk.

It’s just not expected.

At this point, there still would be some reason to welcome an interest rate increase, if only to get all of this focus to come to its end and to get us to focus on what matters.

It seems as if it has been a very, very long time since we have focused on those things that are important.

Regardless of what the decision would be today and what specific words would be used in the statement, before you know it, someone will realize that there are now only 9 days left to come to some budget agreement or face another government shut down.

It’s inconceivable that would happen, but that has to be where we will get mis-directed next.

Today, markets were happy that there was, in fact, no interest rate increase today and once again didn’t mind the strong suggestion that there would be one before 2016 comes to its end.

Daily Market Update – September 21, 2016 (7:30 AM)

The Japanese stock market was barely 2% higher this morning as the Bank of Japan announced a change in monetary policy that was reminiscent of what the Federal reserve did a number of years ago as it focused on the yield curve.

All of that is far too complex for me to understand, but somehow the decision in Japan eases the way for the FOMC to do something, as the US would no longer stand to be the only major economy to be in a position to preside over increasing rates.

But still, as this morning is set to begin, no one is then expecting the FOMC to announce an increase in rates this afternoon.

Maybe that’s why stock futures are guardedly higher this morning.

But the Bank of Japan’s decision really does open the door for the FOMC to make a decision to raise rates today seem far more logical and with much less market related risk.

It’s just not expected.

At this point, there still would be some reason to welcome an interest rate increase, if only to get all of this focus to come to its end and to get us to focus on what matters.

It seems as if it has been a very, very long time since we have focused on those things that are important.

regardless of what the decision will be today and what specific words will be used in the statement, before you know it, someone will realize that there are now only 9 days left to come to some budget agreement or face another government shut down.

It’s inconceivable that would happen, but that has to be where we will get mis-directed next.

For now, we will still put our focus onto the news coming at 2 PM and then figure out how much reverse psychology will be in store for all of us at the moment of the news release and then immediately after, not to mention over the next few days.

The market wants to party, but it will need news of no increase and no overly hawkish words or perceived threats in the ensuing statement.

Daily Market Update – September 20, 2016 (Close)

This could still be a big week, but there’s again really no telling in which direction things might go.

That was made pretty clear yesterday when a large gain evaporated, almost came back and then evaporated again.

Today the gains lost weren’t as big, but the market again just had no direction.

All eyes are on central banks these days and most are focused on our FOMC.

The prevailing thought is that there will be no rate hike announced tomorrow, but the wording in the statement release could and does often move markets more than the decision, itself.

What is also curious is that everyone believes that a decision to increase rates was going to be announced in either September or December, without regard to the fact that there are some intervening months.

The FOMC made it clear earlier in the year that their decision wasn’t necessarily going to be tied to a scheduled meeting.

But there is also another scheduled meeting before December and it happens to come about 2 weeks before the election, so things could get interesting.

I surprised myself by making a trade yesterday and using some of that cash that was obviously burning a hole in my pocket.

However, I used the monthly option and that means that I still have no positions expiring this week and only a single ex-dividend position.

That leaves me hungering for some income opportunities.

That hunger certainly didn’t get requited today.

To get any satisfaction for those hunger pangs, it would likely take a sharp move higher on Wednesday, as the FOMC presumably decides to do nothing and doesn’t sound very hawkish afterward.

I think it would take both of those to happen to get the market to celebrate.

For now, I’ll just do what any sane person would do and not roll the dice any further until the FOMC places its cards on the table.

How’s that for the mixed metaphor that has been this entire interest rate season?