Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: stocks

IEA Declares OPEC Has Accomplished Its Mission: Oil Is Now “Balanced”

This article appeared online at TheNewAmerican.com on Monday, April 23, 2018:

“It’s not for us to declare on behalf of the Vienna agreement [the OPEC production-cut agreement in force since January 2017] that it is ‘mission accomplished’, but if our outlook is accurate, it certainly looks very much like it,” said the International Energy Agency (IEA) last week. Those production cuts, aided by the rolling disaster in Venezuela that continues to take crude oil production off the world market, have, according to the IEA, brought down the world’s crude oil stocks within shouting distance of OPEC’s goal: the five-year average of those stocks.

Compliance among members of the OPEC cartel and its friends (including Russia) has been extraordinarily high, with Saudi Arabia helping things along by cutting its own production far more deeply than the agreement called for.

U.S. production, estimated to approach 11 million barrels a day by the end of the year (twice what it was just seven years ago), has been unable to match the production cuts and worldwide demand, which has greatly surprised to the upside.

Add in concerns that on May 12 the president of the United States will decide

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Conference Board Predicts Robust Economy for Rest of Year

This article appeared online at TheNewAmerican.com on Friday, April 20, 2018:

The report from the independent Conference Board released on Thursday confirmed what most already know: The U.S. economy is on a tear, and there appears to be nothing on the horizon to slow it down, at least for the next six to nine months. Said its Director Ataman Ozyildirim:

The U.S. LEI [Leading Economic Index] increased in March, and while the monthly gain [was] slower than in previous months, its six-month growth rate increased further and points to solid growth in the U.S. economy for the rest of the year.

 

The strengths among the components of the leading index have been very [robust] over the last six months.

The LEI, which bottomed out during the Great Recession in the middle of 2009, has rocketed from 73 to

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Dow Theory Sell? Not yet.

This article appeared online at TheNewAmerican.com on Tuesday, April 10, 2018:

Investors who religiously follow Wall Street’s oldest, most successful market-timing tool, the Dow Theory, likely liquidated some, most, or perhaps all of their investments on Tuesday. They are already also likely regretting the move.

Strictly speaking, as The New American has noted in a series of three articles dating back to March 23, the theory tracks two primary indicators: the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Index (DJT). Investors following Charles Dow’s thinking (he never used his own theory to trade stocks) went on yellow alert following the market sell-off that began in late January. The market rebounded but never hit new highs. That put in place the floor — called “support” — for those two indexes. The theory states that if a subsequent sell-off takes those two indexes below the previous lows, investors should sell and wait for a better opportunity to buy back into the market.

For the record, the Dow pierced the floor several times but the Transportation Index — the Transports — didn’t, although it came close. Although The New American is not a market-timing newsletter, the remarkable bull market since the election of President Donald Trump has simply demanded that TNA track and follow it from a historical perspective.

The floor “support” for the Transports — based on its bounce back in February — is 10,136. A sell signal was generated on Monday when that index closed below it, at 10,119.

Those who sold any part of their stock holdings on Tuesday missed the rally on Tuesday that took the Dow to 24,408, a gain of 428 points (1.6 percent).

Is this a head fake? Raymond James’ chief investment strategist, Jeffery Saut, thinks so. In a note to his clients Saut explained why:

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The Best Stock Investment Tip Ever Given

This article was published by The McAlvany Intelligence Advisor on Wednesday, April 4, 2018:

Sean Williams, writing for The Motley Fool newsletter, has given his readers what he calls “the closest thing you’ll ever get to a surefire stock tip”:

Since January 1, 1950, the S&P 500 has undergone 35 corrections whereby its aggregate point value has fallen by at least 10 percent….

 

Here’s the key point: all 35 of those stock market corrections have been completely erased within a matter of weeks or months (and in rare cases years), by a bull market rally.

 

I repeat, in 35 out of 35 instances since 1950, the S&P 500 has erased any stock market corrections totaling 10 percent or higher at some point in the future.

 

That’s a 100 percent success rate over nearly three dozen data points.

 

Buying any major dip in the S&P 500 is about as close to a guarantee as you’re going to get when it comes to investing in the stock market.

An investment advisor in Colorado Springs requires that his clients promise not to turn on CNBC during the day, but instead concentrate on living life. As a result, he says, he almost never gets a call during market downturns because his clients are focused on more important things.

Other investors, however, are no doubt calling their brokers following the news that the nine-quarter winning streak in stocks came to an ignominious end in March, with the Dow losing 616 points during the first quarter of the year.

It is helpful to remember at least two things:

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Bull Market in Stocks Continues

This article appeared online at TheNewAmerican.com on Tuesday, April 3, 2018:

The 616-point decline in the Dow Jones Industrial Average (DJIA) during the first calendar quarter of 2018 ended a nine-quarter streak of gains. During those nine quarters, the Dow rose an astonishing 8,400 points, almost half of the Dow’s 18,000-point gain since the start of the bull market in stocks in 2009.

Monday’s sharp decline of more than 600 points mid-day (the Dow ended down 450 points for the day) raised once again the question: is the bull market in stocks over?

It’s highly unlikely. From 1995 to 1997, the Dow rose 11 quarters in a row before selling off. After the down quarter that followed, the market roared back, gaining 11 percent the next quarter and climbing more than 45 percent by the end of 1999.

Yardeni Research reports that

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Is the Bull Market in Stocks Over?

This article was published by The McAlvany Intelligence Advisor on Wednesday, March 28, 2018:

Followers of the Dow Theory are having their faith in Wall Street’s oldest and most accurate market-timing model tested. Last week’s selloff triggered one of the last two indicators necessary for its followers to declare that the nine-year old bull market has ended.

Charles Dow never used his theory to trade stocks, but his followers have, with great success. It has outperformed the traditional “buy and hold” strategy by an astonishing 4.4 percentage points annually. Mark Hulbert, who watches the market watchers and publishes his results in his Hulbert Financial Digest, wrote that the key support levels to watch are 23,860 on the Dow Jones Industrial Average (DJIA) and 10,136 on the Dow Jones Transportation Average (DJT).

Near the close on Friday, the Dow broke through support, but

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Tariff Reality Ignites Stocks, Affirms Dow Theory Bull Market Signal

This article appeared online at TheNewAmerican.com on Tuesday, March 27, 2018:

The rebound in stocks on Wall Street on Monday and early Tuesday that followed last week’s sell-off was triggered by the reality that Trump’s tough talk on tariffs was little more than an opening bid to get China’s attention. It did, as was noted by Trump’s Treasury Secretary Steven Mnuchin: “We’re having very productive conversations with them. I’m cautiously hopeful [that we can] reach an agreement.”

It helped that over the weekend investors began to understand that Trump’s threat, even if fully applied, would have very little impact on the overall economy. Part of the initial confusion was the media’s constant repetition that Trump intended “to impose at least $60 billion in tariffs on Chinese imports” as the Washington Post expressed it. Whether deliberate or not, the Washington Post should have said that Trump intended “to impose tariffs on at least $60 billion worth of imports, particularly imports of steel and aluminum.”

That’s a vastly different, more accurate and less concerning statement.

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Bull Market in Stocks Remains in Place: Dow Theory

This article appeared online at TheNewAmerican.com on Friday, March 23, 2018:

Thursday’s selloff on Wall Street pushed the S&P 500 Index (which tracks the price performance of the stocks of 500 of America’s largest companies) into negative territory. All four of the widely-watched indexes — the Dow Jones Industrial Average (DJIA), the S&P 500 Index (SPX), the Nasdaq Composite Index (COMP), and the Russell 2000 Index (RUT) — dropped the most on Thursday since February 8.

Dow Theory followers were more focused on the Dow Jones Transportation Average (DJT), as it came perilously close to triggering the last of three indicators needed to declare that the Bull Market in stocks is over.

Ironically, the Dow Theory, developed by Charles Dow, the founder and first editor of the Wall Street Journal and co-founder of Dow Jones and Company, was never used by him to trade stocks. But followers of his theory are legion, which could spell trouble

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Despite Stock Sell-off, Few See Recession

This article appeared online at TheNewAmerican.com on Friday, February 9, 2018: 

Barbara Friedberg must be feeling pretty good right about now. Last October she made “10 Bold Stock Market Predictions for 2018,” and already she is scoring five out of 10:

Value stocks will triumph;

Cash will be king;

Inflation will inch up;

Market volatility will return; and

Bonds will offer higher yields.

The jury is still out on her prediction that “the Bull Market [in stocks] will end in 2018.”

Friedberg is no lightweight. She is a former portfolio manager and has taught finance and investments at several universities. She authored a popular book in 2014, How to Get Rich Without Winning the Lottery.

Despite the mantra that stocks’ performance is often a harbinger for future economic performance, few at present agree with her about the bull market in stocks being over.

The sell-off (which appears to be continuing as this is being written) in stocks is impressive. The Dow Jones Industrial Average (DJIA, or The Dow) has lost 3,227 points since its high on January 26, or 12 percent, while the S&P 500 Index (SPX) has dropped by 290 points, or 10 percent, since then as well. This is into “correction” territory and should be drawing negative outlooks on the future of the U.S. economy from every quarter.

But they can’t be found. Aside from perma-bears Michael Snyder and David Stockman, few of the usual suspects can be found who agree with Friedberg. When the Wall Street Journal polled its economists, they remained adamant about the health of the economy: GDP will continue to grow and unemployment will continue to drop:

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Sorry, Inflation Worries are Not Behind the Selloff in Stocks

This article was published by The McAlvany Intelligence Advisor on Wednesday, February 7, 2018:  

All manner of explanations for the recent market selloff in stocks have come out of the woodwork: the market has gotten ahead of itself; it was due for a correction anyway; it’s been 400 days since a three percent correction; and so on. The least informed is that all of a sudden there is inflation! See? The yield on the 10-year Treasury is up 80 basis points since September! That must mean there’s inflation! Couple that with the “surge” in wages just reported by the Bureau of Labor Statistics (2.9 percent year-over-year compared to 2.2 percent reported previously) and – voila! – inflation is back. Time to take profits!

Most commentators didn’t bother to check with the Fed, specifically the Cleveland Fed and the St. Louis Fed, which report the real numbers on inflation and money supply. First:

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Treasury Advisory Committee Says U.S. Must Borrow Trillions, Sending Stocks Down

This article appeared online at TheNewAmerican.com on Monday, February 5, 2018:

When an obscure advisory committee announced last Wednesday that the U.S. Treasury would have to borrow billions to fund Trump’s tax reform program, the stock market pitched headlong into a selloff, dropping Thursday, Friday, and early into Monday. Before the selloff, the Dow was approaching 26,300, but by the close on Friday it had lost 760 points. The rout continued into Monday, with the Dow down more than 1,200 points from Wednesday’s high. [Note the rout continued into Tuesday but found some footing by the end of the day.]

Much handwringing by commentators blamed the selloff on various technical factors:

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Tax-Reform Ripple Effect: Hundreds of Companies Recalibrating, Raising Employee Benefits, Investing in New Projects

This article appeared online at TheNewAmerican.com on Friday, January 26, 2018: 

Workers at Camp Construction, the construction giant headquartered in Houston with sites all across the southern United States, received a note along with their last paycheck. Signed by the company’s president, Roger Camp, it read:

Because of the reduction in corporate taxes we, as will all businesses, benefit from this tax cut. We believe that YOU are the reason for our success. And now that we will be giving less of our hard earned income to the federal government, we can share some of it with you.

 

Please look for a $500 tax cut bonus in your next payroll run.

There are now more than 240 companies who are doing the same for their employees. At current count this will brighten the paydays of more than three million workers.

And the ripple effect of the tax reform law is just starting to be felt.

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Final Tax Reform Bill: The Goods Outweigh the Bads

This article appeared online at TheNewAmerican.com on Tuesday, December 19, 2017:

With victory over tax reform clearly in sight, President Trump on Sunday tweeted, “As a candidate, I promised we would pass a massive TAX CUT for the everyday working American families who are the backbone and the heartbeat of our country. Now, we are just days away.” From the White House came more details:

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“Trump’s” Stock Rally Best Since 1945

This article appeared online at TheNewAmerican.com on Wednesday, November 8, 2017: 

Before the market opened on the day after Donald Trump won the election a year ago, futures were predicting a precipitous drop in the Dow Jones Industrial Average of 900 points. By the close of business that day, sentiment reversed and the market closed up 250 points, to 18,500.

That was 5,000 points ago,

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Dow Crosses 23,000 for the First Time in History

Performance of the Dow Jones Industrial Index ...

Performance of the Dow Jones Industrial Index during Black Monday

This article appeared online at TheNewAmerican.com on Tuesday, October 17, 2017:

The Dow Jones Industrial Average (DJIA), colloquially called “The Dow,” crossed over the 23,000 benchmark level early Tuesday morning for the first time in history. The Dow, which tracks the stocks of 30 major corporations, has gained 25 percent since the election while the NASDAQ (which tracks the stock performance of a vastly larger and more diversified range of companies across the globe) is up 27 percent. The S&P 500 Index (which tracks the stock performance of 500 American companies) is up 19 percent.

The Wall Street Journal had no trouble finding money managers who were willing to comment positively on the news. Mark Freeman, chief investment officer and portfolio manager at Westwood Holdings Group (which invests $22 billion for its customers), told the Journal:

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Jump in Jobless Claims Following Harvey Is Just the Beginning

This article appeared online at TheNewAmerican.com on Thursday, September 7, 2017:

View of the eyewall of Hurricane Katrina taken...

View of the eyewall of Hurricane Katrina taken on August 28, 2005 as the storm made landfall on the United States Gulf Coast.

The jump in unemployment claims for the week ending September 2, as reported by the Department of Labor (DOL) on Thursday, not surprisingly exceeded economists’ consensus of just 241,000. The increase of 62,000 for the week to 298,000 nearly broke a claims record that has been in place for 131 weeks: 300,000.

That record will surely be broken in the weeks to come. The unemployment claims are just beginning to come in, and they are a predictor — a proxy — for job layoffs. Some workers

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OPEC Getting Some Help from Nervous Energy Company Bondholders

This article was published by The McAlvany Intelligence Advisor on Friday, July 21, 2017:

It’s no wonder that investors owning bonds of companies in the energy business are getting nervous. They purchased high-yield bonds issued by them, seeking income when there was little to be had elsewhere. Last year they were rewarded with 38 percent gains in their holdings as the industry rebounded.

But in June Bloomberg reported that those same bondholders saw their values drop by two percent. This is on top of energy stocks that have tanked 16 percent so far this year.

It’s the vicious circle facing frackers.

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Fracking’s Vicious Cycle Making Bondholders Nervous

This article appeared online at TheNewAmerican.com on Thursday, July 20, 2017:

King Abdullah ibn Abdul Aziz in 2002

King Abdullah ibn Abdul Aziz

Investors in high-yield bonds issued by small fracking companies are getting nervous. Last year those bonds, according to Bloomberg, gained some 38 percent as they rebounded from lows set earlier. In June they slipped two percent. In the bond business, that’s enough to make bond fund managers and individual investors nervous. It’s bad enough that the S&P 500 Energy Sector Index of energy stocks has lost 16 percent so far this year. What’s worse is the vicious cycle that frackers find themselves in.

For instance,

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Goldilocks Stock Market Making Forecasters Nervous

This article appeared online at TheNewAmerican.com on Thursday, July 13, 2017:  

At the moment, Wall Street investors are enjoying a “Goldilocks” economy: not so hot that it pushes prices up and not so cold that it causes a recession. Translation: Unemployment is low, wages are rising, interest rates are still near record lows, the gross domestic product (GDP) continues to grow (although not as fast as President Trump would like), and inflation is under control.

It isn’t a perfect world, but to Wall Street investors it’s close.

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More “Fake News?” Trump Behind Wednesday’s Stock Market Dump

This article was published by The McAlvany Intelligence Advisor on Friday, May 19, 2017:

Cover of "The Intelligent Investor: The D...

It’s almost too trite to say that the mainstream media engages in “fake news,” but its nearly unanimous claim that Wednesday’s selloff in stocks was due to Trump’s troubles borders on fake news. It certainly violates a primary rule of logic: post hoc, ergo propter hoc – after this, therefore because of this.

Here is a perfect, but certainly not the only, example. From Marketwatch one learns that “The sell-off came in the wake of a bombshell report in the New York Times that notes from fired FBI Director James Comey revealed President Donald Trump had asked Comey to stop the FBI’s investigation into fired National Security Adviser Michael Flynn’s ties to Russia.”

The tortured logic is this: Trump’s controversies, including those concerning Comey, are going to distract him and his administration from accomplishing many of the policy goals upon which the stock market was banking. Hence, the market will be disappointed.

Other MSM outlets lined up:

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.
Copyright © 2018 Bob Adelmann