Category: Daily Market Update

Daily Market Update – February 2, 2016 (Close)

Yesterday was a pretty nice day on a couple of levels.

Making a trade of any sort was not among those levels, though.

What was nice was that there was actually a small gain on the day and that represented a nice comeback from a sharp decline early in the trading.

What was especially good, however, is that while oil prices were plunging yet again, they didn’t take the market along for the ride.

Even that early decline in the indexes wasn’t anywhere near where it could have been, given oil’s descent and the way the market had been reacting to those kind of declines for the past few months.

So I did get at least one day of the stability that I had been hoping for, but there’s still not enough to really have much in the way of confidence when it comes to putting new money on the line.

But that was yesterday.

This morning the futures were again weak and the day just got worse and worse as oil went lower and lower.

Now, with 3 days left for the week, there’s not much in the way of direction until Friday’s Employment Situation Report is released.

Based on last week’s reaction to the weak GDP, there’s reason to believe that the market would be happy with weak Employment numbers maybe in the hope that then the FOMC wouldn’t go ahead and increase the interest rate any time soon.

Ultimately, that can’t be a recipe for success going forward, but it may be all that the market can really hope for, as earnings by Facebook and Google aren’t going to make up for weak earnings numbers coming from just about everything else and those oil company earnings are very sobering.

Right now, there isn’t really a single sector of the market that is performing well or can inspire any kind of confidence. What started out as less bleak this morning became very bleak in the snap of the finger.

No matter how good Facebook and Google may be, they just don’t reflect anything in the economy, at all. Today brought that lesson home.

This morning’s early futures performance was likely to lead to yet another day of just watching and waiting for some kind of a sign that a bottom is developing and maybe then being prepared to dip a toe. The way the day developed there was still no reason to think that it was yet safe to do anything.

Now we just sit and await Friday and scratch our heads trying to figure out just what investors want.

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Daily Market Update – February 2, 2016 (7:30 AM)

Yesterday was a pretty nice day on a couple of levels.

Making a trade of any sort was not among those levels, though.

What was nice was that there was actually a small gain on the day and that represented a nice comeback from a sharp decline early in the trading.

What was especially good, however, is that while oil prices were plunging yet again, they didn’t take the market along for the ride.

Even that early decline in the indexes wasn’t anywhere near where it could have been, given oil’s descent and the way the market had been reacting to those kind of declines for the past few months.

So I did get at least one day of the stability that I had been hoping for, but there’s still not enough to really have much in the way of confidence when it comes to putting new money on the line.

This morning the futures are again weak and there may not be much in the way of direction until Friday’s Employment Situation Report is released.

Based on last week’s reaction to the weak GDP, there’s reason to believe that the market would be happy with weak Employment numbers maybe in the hope that then the FOMC wouldn’t go ahead and increase the interest rate any time soon.

Ultimately, that can’t be a recipe for success going forward, but it may be all that the market can really hope for, as earnings by Facebook and Google aren’t going to make up for weak earnings numbers coming from just about everything else.

Right now, there isn’t really a single sector of the market that is performing well or can inspire any kind of confidence.

No matter how good Facebook and Google may be, they just don’t reflect anything in the economy, at all.

This morning’s early futures performance is likely to lead to yet another day of just watching and waiting for some kind of a sign that a bottom is developing and maybe then being prepared to dip a toe.

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Daily Market Update – February 1, 2016 (Close)

There’s no doubt that the finish to last week was a nice one, but you do have to question the reasons for the market’s gain.

Sometimes following a big loss the market just has some sort of reflexive rebound. We’ve been having some of those over the past two months, but most of those have been pretty anemic.

The other reason that the market has gone higher on some rare occasions has been because oil prices moved higher.

That’s not a very good reason to move higher and at some point the market will realize that it may be a reason to move lower.

But it seems that the reason the market may have moved higher on Thursday and Friday was related to news of weakening global economies.

Why else would the Bank of Japan lower their interest rate to below zero?

In your wildest dreams did you ever imagine that you would get paid to borrow money?

But in addition to that came news that the GDP in the United States grew at what could also only be called an anemic pace.

The market looks as if it had gotten back to the belief that a weak economy would mean that the Federal Reserve would be pumping away in support of the economy and then indirectly support of stocks and to the detriment of bonds.

Good theory, but the Federal Reserve may not have quite the same ammunition it had when it first started in its efforts to save markets and the economy about 8 years ago.

This Friday brings the Employment Situation Report and it will be very interesting to see if there are downward adjustments, especially after last month’s blow away number.

In the current frame of mind the market looks as if it would embrace any bad news, just like it had done for much of the last few years.

For the briefest of times it looked as if we were finally growing up and were going to revel in good news, but that may no longer be the case.

This week may be the third successive week with no personal trades.

I’m not hoping for that to be the case, but as there is some weakness in the futures to start the week, I’m not very excited about jumping aboard after the large gains that came to end the previous week.

I was in a frame of mind to not mind seeing some flatness today. Although the day did finish flat, it looked as if it might be yet another sell-off as oil started to plunge again.

But there was a nice recovery in the market, maybe further signaling that the price of oil and the stock market are going to go back to a more normal kind of co-existence.

I hope the flatness continues tomorrow, but is listless all through the day and not just on a net basis  I’d much rather see that than another in a series of large declines or even large gains

I’m not looking for deeper discounts on share price, but rather some reason to believe that a bottom is at least in the formation process.

The gains of Thursday and Friday were a little too much and too fast for very much comfort, so today was just another in that recently familiar stance of just watching.

That may change soon if there’s any evidence of stability, even for just a few days or so.

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Daily Market Update – February 1, 2016 (9:00 AM)

There’s no doubt that the finish to last week was a nice one, but you do have to question the reasons for the market’s gain.

Sometimes following a big loss the market just has some sort of reflexive rebound. We’ve been having some of those over the past two months, but most of those have been pretty anemic.

The other reason that the market has gone higher on some rare occasions has been because oil prices moved higher.

That’s not a very good reason to move higher and at some point the market will realize that it may be a reason to move lower.

But it seems that the reason the market may have moved higher on Thursday and Friday was related to news of weakening global economies.

Why else would the Bank of Japan lower their interest rate to below zero?

In your wildest dreams did you ever imagine that you would get paid to borrow money?

But in addition to that came news that the GDP in the United States grew at what could also only be called an anemic pace.

The market looks as if it had gotten back to the belief that a weak economy would mean that the Federal Reserve would be pumping away in support of the economy and then indirectly support of stocks and to the detriment of bonds.

Good theory, but the Federal Reserve may not have quite the same ammunition it had when it first started in its efforts to save markets and the economy about 8 years ago.

This Friday brings the Employment Situation Report and it will be very interesting to see if there are downward adjustments, especially after last month’s blow away number.

In the current frame of mind the market looks as if it would embrace any bad news, just like it had done for much of the last few years.

For the briefest of times it looked as if we were finally growing up and were going to revel in good news, but that may no longer be the case.

This week may be the third successive week with no personal trades.

I’m not hoping for that to be the case, but as there is some weakness in the futures to start the week, I’m not very excited about jumping aboard after the large gains that came to end the previous week.

I wouldn’t mind seeing some flatness today and maybe tomorrow, as well. I’d much rather see that than another in a series of large declines.

I’m not looking for deeper discounts on share price, but rather some reason to believe that a bottom is at least in the formation process.

The gains of Thursday and Friday were a little too much and too fast for very much comfort, so today may be another in that recently familiar stance of just watching.

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Daily Market Update – January 29, 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: F (1/27 $0.15), FAST (1/27 $0.30), MS (1/27 $0.15), KMI  (1/28 $0.125)

The following will be ex-dividend next week: INTC (2/3 $0.26)

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

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Daily Market Update – January 28, 2016 (Close)

Yesterday was another in what has become the pattern of disappointments.

While last week did finally see 2 back to back days of nice gains, ever since hitting the post-August recovery high at the beginning of December, the market has been on a real downward spiral.

While I have always liked to pick up stocks on those kind of big downward moving days, we’ve had lots of those over the past 2 months and I’ve found very little justification for buying.

Bargains have just been getting cheaper and cheaper on an almost daily basis.

Every time there’s been the slightest sigh of breath that maybe the market was bottoming out would come a day like yesterday.

Yesterday, though, was a little different from most of the rest of the days of the past 2 months.

This time, instead of oil or China being center stage, it was the FOMC Statement release that ruled the day.

That’s the way things had been each month for the prior few years, but lately the FOMC hasn’t done much to really set the tone.

Yesterday it gave absolutely no indication of anything, but may have kept further interest rate increases on the table, even as there is little evidence to suggest that December’s rate increase was warranted.

Investors didn’t like that and they showed that dislike immediately and in a big way.

This morning’s early very mild gain meant little, especially as they became mild losses as earnings started to be announced at 7 AM. Today is actually the single biggest day for earnings reports, so maybe there could be a catalyst ahead, but it wasn’t at 7 AM.

Unfortunately, not every company can be Facebook and equally unfortunately, Facebook’s fortunes say nothing about anything other than Facebook and maybe its competitors.

Their great revenues and earnings reflect nothing upon the economy, other than maybe spending going on in Palo Alto and its suburbs.

This looks like a second consecutive week of no trades.

Just like last week was a first, having two consecutive weeks of no trades is another and leaves me very frustrated in looking for some income opportunities.

The reality has been, however, that for the first time since 2009, the meaning of “value trap” has been reflected in the market itself, not just in individual stocks.

Just as the Shanghai market is now 25% lower for the year, there is an unusually large number of stocks that are that much lower than their 2015 highs and they may still not really be bargain priced.

It will obviously take more than a good day, or even two, to start feeling a little confident in parting with cash at this point.

Today turned out to have some positive things about it as the market beat back two attempts to see it go lower. Instead, the market was able to finish decently higher, although as has been the pattern, the recovery wasn’t anywhere really enough to offset the loss from the day before.

While I’d like to be spending some money, the strange thing is that I found it easier to spend money in late 2008 and 2009 than currently. Back then the market indexes were down so much that you had to think that we were getting near a bottom sooner rather than later.

Now, those indexes are still fairly high, because of those handful of stocks creating an illusion of better health than is really the case.

I’d rather not get caught up in an illusions vortex, but a few good days, could make it easier to develop some confidence.

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Daily Market Update – January 28, 2016 (7:30 AM)

Yesterday was another in what has become the pattern of disappointments.

While last week did finally see 2 back to back days of nice gains, ever since hitting the post-August recovery high at the beginning of December, the market has been on a real downward spiral.

While I have always liked to pick up stocks on those kind of big downward moving days, we;ve had lots of those over the past 2 months and I’ve found very little justification for buying.

Bargains have just been getting cheaper and cheaper on an almost daily basis.

Every time there’s been the slightest sigh of breath that maybe the market was bottoming out would come a day like yesterday.

Yesterday, though, was a little different from most of the rest of the days of the past 2 months.

This time, instead of oil or China being center stage, it was the FOMC Statement release that ruled the day.

That’s the way things had been each month for the prior few years, but lately the FOMC hasn’t done much to really set the tone.

Yesterday it gave absolutely no indication of anything, but may have kept further interest rate increases on the table, even as there is little evidence to suggest that December’s rate increase was warranted.

Investors didn’t like that and they showed that dislike immediately and in a big way.

This morning’s early very mild gain meant little, especially as they became mild losses as earnings started to be announced at 7 AM. Today is actually the single biggest day for earnings reports, so maybe there could be a catalyst ahead, but it wasn’t at 7 AM.

Unfortunately, not every company can be Facebook and equally unfortunately, Facebook’s fortunes say nothing about anything other than Facebook and maybe its competitors.

Their great revenues and earnings reflect nothing upon the economy, other than maybe spending going on in Palo Alto and its suburbs.

This looks like a second consecutive week of no trades.

Just like lat week was a first, having two consecutive weeks of no trades is another and leaves me very frustrated in looking for some income opportunities.

The reality has been, however, that for the first time since 2009, the meaning of “value trap” has been reflected in the market itself, not just in individual stocks.

Just as the Shanghai market is now 25% lower for the year, there is an unusually large number of stocks that are that much lower than their 2015 highs and they may still not really be bargain priced.

It will obviously take more than a good day, or even two, to start feeling a little confident in parting with cash at this point.

The strange thing is that I found it easier to spend money in late 2008 and 2009 than currently. back then the market indexes were down so much that you had to think that we were getting near a bottom sooner rather than later.

Now, those indexes are still fairly high, because of those handful of stocks creating an illusion of better health than is really the case.

I’d rather not get caught up in an illusions vortex.

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Daily Market Update – January 27, 2016 (Close)

Yesterday was a really nice day, but it came after a really bad day, both of which simply followed oil down and then up.

And so, after yesterday’s gains, we’re still closing in on ending the first month of the year with a loss of about 8%.

Make that about 10% after today was finally over.

With so many expectations for 2016 to have been a good year, because scant data suggested that the year following a flat year, as was 2015, would be a good year, we have a long way to go just to end up flat again.

The same type of scantiness of data is what the FOMC was facing, as they prepared their statement release this afternoon.

Many expected that the FOMC Statement would suggest that there is room for more interest rate increases to come in 2016 and they did just that.

There’s no question that there’s room, considering still how low rates are, but where is the data to support the notion that such interest rates are warranted? It looks as if investors may have been asking exactly that question as the market dropped about 350 points from 2 PM, until recovering some of that by the close.

So now that we found out how the market would react to basically no real news, we’ll get to see what happens when real numbers are released on Friday with the GDP..

What was a question earlier in the day and was an uncomfortable unknown was how market traders would react to news of any kind, which may have also included the absence of any substantive news.

Well, that was the case this afternoon.

With no really good reason to move stocks higher now, as earnings aren’t yet delivering any kind of boost, you do have to wonder what the FOMC has in its reserve if the economy is in need of any boost.

This morning’s futures trading is giving back a small portion of yesterday’s gain, but that’s not too surprising, considering the recent back and forth and the uncertainty associated with what may come just 6 or so hours from now.

Of course, all could be undone or irrelevant if the market continues its association with the movement of oil prices.

Those moves of late have really had nothing to do with supply and demand and have likely been driven by more opportunism than is usually the case.

While it would be nice to see oil and stocks go in their own ways, the sharp decline in oil just the past few weeks does give some further opportunity for those opportunists to step in, so I hope the association continues for a while longer.

That is, until we get to the point that many are still expecting oil to start re-testing the $20 level.

That would be a perfectly good time for investors to realize that there has to be a net benefit when the plunging price of oil is still more likely associated with a supply glut that’s driven by a glut of suppliers rather than a dearth of users.

Like most everything else that’s part of some kind of cycle, that day will assuredly come, but it has already been such a long, long time in coming.

For my perspective, each day brings that eventuality a day closer and I’m going to stay liquid for as long as the market can stay irrational.

Today, though, the market was irrational.

Again.

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Daily Market Update – January 27, 2016 (Close)

Yesterday was a really nice day, but it came after a really bad day, both of which simply followed oil down and then up.

And so, after yesterday’s gains, we’re still closing in on ending the first month of the year with a loss of about 8%.

With so many expectations for 2016 to have been a good year, because scant data suggested that the year following a flat year, as was 2015, would be a good year, we have a long way to go just to end up flat again.

The same type of scantiness of data is what the FOMC is facing, as they prepare their statement release this afternoon.

Many expect that the FOMC Statement will suggest that there is room for more interest rate increases to come in 2016.

There’s no question that there’s room, considering still how low rates are, but where is the data to support the notion that such interest rates are warranted?

We may find that out this afternoon and there may be more data to come on Friday as some GDP data is released.

But what continues to remain unknown is how market traders will react to news of any kind, which may also include the absence of any substantive news this afternoon.

With no really good reason to move stocks higher now, as earnings aren’t yet delivering any kind of boost, you do have to wonder what the FOMC has in its reserve if the economy is in need of any boost.

This morning’s futures trading is giving back a small portion of yesterday’s gain, but that’s not too surprising, considering the recent back and forth and the uncertainty associated with what may come just 6 or so hours from now.

Of course, all could be undone or irrelevant if the market continues its association with the movement of oil prices.

Those moves of late have really had nothing to do with supply and demand and have likely been driven by more opportunism than is usually the case.

While it would be nice to see oil and stocks go in their own ways, the sharp decline in oil just the past few weeks does give some further opportunity for those opportunists to step in, so I hope the association continues for a while longer.

That is, until we get to the point that many are still expecting oil to start re-testing the $20 level.

That would be a perfectly good time for investors to realize that there has to be a net benefit when the plunging price of oil is still more likely associated with a supply glut that’s driven by a glut of suppliers rather than a dearth of users.

Like most everything else that’s part of some kind of cycle, that day will assuredly come, but it has already been such a long, long time in coming.

For my perspective, each day brings that eventuality a day closer and I’m going to stay liquid for as long as the market can stay irrational.

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Daily Market Update – January 26, 2016 (Close)

Yesterday was just more of the same.

Oil was much lower and the stock market went much lower.

Everyone keeps waiting for something to give.

Either oil finally starts to move higher or someone comes to the realization that oil at these levels and with continuing job growth, this would be a good time to take advantage of the low input costs and build for future growth.

But yesterday wasn’t going to be that day.

This morning, oil was up slightly as were the stock futures. Never mind that Shanghai plunged overnight.

That was so much yesterday’s story and we’re on to new things now

That new thing was the same as the old thing as oil went from being slightly higher to nicely higher and guess what happened?

Just like the story goes, the market went well higher.

As has been the story for 2016 and the final month of 2015, the gains that we’ve been seeing on days here and there haven’t come close to offsetting the losses of the days before or the losses to come the days after.

Today, though, it at least the DJIA offset the day before and the S&P 500 came close to doing so.

Since the post-August recovery high seen in the early part of December 2015, the S&P 500 was about 11% lower to start the day and there hadn’t been many days like the last two of the previous week that saw two decent sized day’s gains come in succession.

Earnings keep coming in and will start building to a crescendo in the next couple of weeks, but so far, everyone’s expectation of being disappointed with those earnings reports are being met.

If earnings aren’t going to lift the market and there’s no reason to believe that economic activity will result in oil demand and price increasing any time soon, it’s hard to know what will bring good news.

The FOMC meets this week and GDP is announced on Friday, but what can either do to lead to optimism?

This morning the 10 Year Treasury Note was again below 2%.

It’s not likely that you could find anyone who would have bet on that being the case a few months ago. You definitely won’t find any people who are deeply engaged in the financial sector who would have predicted that to be the case and it’s not likely that you would have found any bond traders, either, who would have guessed this morning’s rate.

And those are reportedly the smartest guys around.

With nothing to do yesterday, I didn’t see any reason to believe that this morning’s early strength had any meaning, nor that yesterday’s sell-off was happening at the bottom. The real key may be if oil and stocks go their individual ways.

That was definitely not the case today.

Mark Faber, a noted gloom guy, mentioned yesterday that the average stock was now trading 26% below its 2015 high.

I don’t know how he arrived at that figure and how he selected stocks to exclude from his calculation or whether the calculation was weighted by market capitalization or anything at all, but it definitely feels that way once you exclude the very few winning stocks of the past 13 months.

With the 2016 action added in, the list of winning stocks is only getting smaller, at
this point, despite today’s nice gains.

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