Monday, December 22, 2014

IS A PAUSE IN THE MARKETS COMING?

WASHINGTON (Reuters) - U.S. home resales tumbled to a six-month low in November after two straight months of strong increases, underscoring the uneven nature of the housing market recovery. The National Association of Realtors said on Monday existing home sales dropped 6.1 percent to an annual rate of 4.93 million units, the lowest level since May. October's sales pace was revised slightly down to 5.25 million units from 5.26 million units. November's decline probably does not signal the start of a weakening trend and in part reflected stubbornly low inventories. Economists polled by Reuters had expected sales to fall only to a 5.20-million unit pace. Housing has struggled to shift into higher gear after stagnating in the second half of 2013 in the wake of a jump in mortgage rates, which have since pulled back from their peaks. It has lagged an acceleration in economic activity as tepid wage growth, a shortage of properties available for sale and higher home prices sidelined first-time buyers.
CERRFINANCE - Rising home prices and fewer first-time home buyers would normally cause a decrease in market prices however with decreasing oil prices things are still looking positive.  In addition, Feds continual support for free money we expect will continue to drive the market until next year. Looking for new Congress to mess up things by threatening government shutdown, balance budget tightening, or sequester. 
TD AMERITRADE -  Natural Gas Sinks 9%.  Commodities are trading mostly lower this morning, while the dollar index is trading modestly lower.The index has been in negative territory all day so far, which has helped provide a little support in select commodities this morning, but not too much.Natural gas futures are the worst performing commodity today in the commodities complex and dropped sharply lower.This weakness comes on mild weather forecasts and inventory that's above year-ago levels, causing front-month natural gas to fall more than 9% lower. Jan nat gas is now -9% at $3.15/MMBtu. Metals and oil futures are all sitting near today's lows. Feb crude oil has been sliding lower since the overnight low of $58.53/barrel and is now -2.2% at $55.90/ozFeb gold is currently -0.1% at $1195/oz, while Mar silver is -0.5% at $15.94/oz.  EnergyThe Energy sector is down today, losing 1.35%, with all of its underlying industries lower. Energy Equipment & Services is weakest, falling by2.15%. Over the last month, the Energy sector is down by12.62%, led lower by Energy Equipment & Services and Oil, Gas & Consumable Fuels industries, which are off 16.74% and 12.07%respectively.
CERRFINANCE - It looks like volatility will definitely be around in the beginning of next year. It might be best to pause and see what happens either geopolitical or industrial. Everyone is pulling out of metals and oil. Home prices are rising and becoming scarce.  Next year will be exciting and gaining new profits will be a challenge. 

Wednesday, December 10, 2014

Oil Prices Making Markets Nervous

(Market Watch) Shale oil:   It's impossible to talk about oil’s plunge without talking about the supply glut. And it’s impossible to talk about the supply glut without talking about U.S. shale. Persistently high oil prices helped to spur the fracking revolution, which in turn triggered a boom for North Dakota and other shale-oil-rich regions.  Falling prices will weigh on production of oil from shale and other resources as energy firms cut back on projects, but investors are debating exactly how sensitive shale production will prove to be.
“In fact, we can even imagine initially higher output, as many shale players will scramble for survival and cash flow becomes crucial,” wrote analysts at JBC Energy. “This will push them to reduce the backlog of already drilled and fracked wells, while focusing new wells on their most promising assets.”
On Wednesday, the U.S. Energy Information Administration reported a surprise increase in U.S. supplies of 1.5 million barrels in the week ending Dec. 5., which may reflect the push for producers to squeeze as much oil from their existing sites now as possible.It’s not just the U.S., other major producers are also pumping away. OPEC, meanwhile, is keeping the spigots open in what many strategists see as nothing less than a price war aimed at routing shale and other higher-cost producers. The cartel opted at a closely watched November meeting to make no changes to its production levels, prompting another jarring decline for oil futures.
“This makes any rapid recovery of oil prices unlikely, especially as additional supply looks set to reach the market from northern Iraq and Libya,” wrote Carsten Fritsch, commodity strategist at Commerzbank in Frankfurt.
(CERR Investments): Wow oil prices declining due to a fight between shale and OPEC. Now we can see that people are just searching for profits and who can make it more expensive for the other guy to drill.  This is going to have drastic effects on the world economy with shrinking budgets. Countries that depend largely on oil revenue will soon have to show their hands that they will have to do new things to make revenue. This is already having effect on stocks. Small Cap and European funds are already starting to show pressure. We will see in the future if the DOW and S&P will began to show any pressure. So far they have pause and are going sideways. Look for a fed meeting to change the dynamics of the things - either rate increase or a further pause to spur the economy again.  I expect the Feds to raise now since there is no longer an election. 

Sunday, November 2, 2014

Is It Time For New Money - First Japan now EU Money?

(Yahoo.com) Central banks hurry to panic so that you don’t have to.
That’s one way to interpret the surprise move by the Bank of Japan early Friday to vastly expand its monetary-easing program, which triggered a huge reflex rally in world stock markets and a sharp drop in the Japanese yen against the U.S. dollar.  The BoJ’s gambit is the sort of unexpected gift to investors that central banks have become known for since the financial crisis, as they have amassed more than $10 trillion in assets on their balance sheets.  Yet this time, the policy makers in Tokyo were not responding to damaging turmoil in financial markets that appeared in need of a liquidity lifeline and reassurance.  This might be a new pattern among central banks, which have made such a commitment to supporting world growth and staving of deflation that they feel it’s necessary to act proactively rather than wait for growth fears, credit deterioration and stock-market pressures to become intense before they act.   Michael Block, strategist at Rhino Trading Partners, says, “The Fed is playing stock market as is the BOJ and they freak out when the drawdown is 5%. That seems to be where this all gets started.” For sure, equity market moves are a crude way to measure investor worry, but they tend to mirror erosion in economically attuned credit markets. 
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(CERR Investments).  So now it appears Feds new policy is that if the markets decline more than 5% it is time to influence the markets by making a speech that they will not raise rates or they will extend QE4 perhaps and buy more assets.  Market manipulation at its best.  However caution needs to be made if the bluff doesn't work on raising rates and delaying QE4. Only time will tell if the Feds are seriously think of these options.  For now my goals are with the Feds until middle of next year - 2015 when sequester hits and there is a new crop of  budget balancers.  Get ready for more decrease in government spending and more rhetoric on how bad the government is - unless it affects monetary policy. Wait till the market decreases then you will see how good government does work and the equity managers start lobbying the Feds for more free money. 
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(Wall Street Journal).  As the Federal Reserve ends its quantitative-easing program, the calls for the European Central Bank to embark on its own full-scale government-bond-buying program grow louder. Many observers concur with former Fed Chairman Ben Bernanke’s judgment that U.S. QE worked in practice but not in theory. In Japan, the world’s most aggressive QE program seems to have worked in neither theory nor practice, leading the Bank of Japan 8301.TO -1.01%  to decide last week that perhaps it wasn’t aggressive enough. Would a eurozone QE program prove any more successful?  Italy is the crucial test. The eurozone’s third-largest economy is suffering from a toxic combination of sluggish growth and government debt of 135% of gross domestic product. It grew by less than 1% a year on average in the years prior to the crisis and now looks likely to slide back into a third recession in six years. Credit conditions continue to deteriorate. If QE can’t rescue Italy, then it can’t rescue the eurozone.  Yet it is hard to see what QE can do for Italy. To understand why, consider the Italian banking system. This is the main channel through which any monetary stimulus must work given Italy is one of the most bank-dependent economies in the eurozone. Bank lending is equivalent to 53% of GDP in Italy, higher than in France or Germany. Bank loans represent 40% of total financial liabilities (equity as well as debt), compared with 15% in the U.S. and 23% in France, according to the Bank of Italy.  Unfortunately, the ECB’s recent comprehensive assessment of the eurozone’s largest banks confirmed what the market suspected: the Italian banking system is the weakest in the eurozone.  The ECB concluded that Italian banks had understated their bad- debt charges by €12 billion ($15.02 billion). Nine out of the 15 Italian banks examined by the ECB had a capital shortfall at the end of December 2013, and four still have a combined shortfall of €3.1 billion today.  This conclusion was a particular embarrassment for the Bank of Italy. The central bank had insisted that it was a highly conservative supervisor that didn’t need external experts to tell it how to do its job. In fact, what the stress tests showed was that Italy’s banking system was, at least until recently, badly under-capitalized and therefore constrained in its ability to supply credit to the economy.
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(CERR Investments). So with Italy in mind and a new round of bank test, it will probably be slow for EU to begin a new round of QE.  Who wants to give money to a bank that is badly in debt.  My guess EU will be slow to influence markets as fast as Japan because there are so many more countries in EU that are looking for their own preservation.  Its time to scan the news and search for the moment when there will be a big announcement made in EU on monetary policy.  If not continue to watch the Feds.

Friday, October 31, 2014

Stocks on a Tear!

(CERR Finance). Boy stocks are on a tear with one country ending QE3 and another one beginning it. Will Europe be the next to enter the free money game and no interest rate increases.  This is an economy where distribution of funds is being giving to the top 1 percenters. Too bad if you do not have capital to invest in the stock market, acquire real estate, or start company. If you have not built up your investment portfolio now you might have to wait till the next down turn.  For now it appears that governments are in the game of market manipulation. Technicals and Fundamentals appear to be out the window.  We need to stay engaged and try to see what the next round of government intervention will be. 

Sunday, October 19, 2014

Feds Looking to Game the Markets

(Yahoo.com) Markets are looking for another handout from the Fed, so whatever Fed Chair Janet Yellen says or does not say Friday will be a big deal. Stocks bounced back Thursday after a rough opening, with the S&P 500 (^GSPC) ending the day less than a point higher, and the Nasdaq(^IXIC) up 2 points. The Dow (Dow Jones Global Indexes: .DJI) was off 24 points, but the small cap Russell 2000 was up nearly 1.3 percent. St. Louis Fed President James Bullard was credited with the turnaround, when he said the Fed should consider continuing to buy bonds beyond the scheduled end of quantitative easing later this month, due to market turmoil.
"The market was looking for a lifeline. It found one in his comments," said Mark Luschini, chief investment strategist at Janney Montgomery. As for Yellen, he does not expect her to say anything new or stray from recent remarks.

(Yahoo.com -) About an hour into the trading day Thursday, with the S&P 500 (^GSPC) at its lows and the smell of fear in the air Bullard took the mic and had his Battle of Agincourt “Once more into the breach…” moment.


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Jame Bullard, President of the Federal Reserve Bank of St. Louis said given the wild market the Fed might not finish tapering as quickly as they had intended

Jame Bullard, President of the Federal Reserve Bank of St. Louis said given the wild market the Fed might not finish …
“We have to make sure that inflation expectations remain near our target,” said Bullard in reference to the FOMC’s ongoing war against deflation. “And for that reason, I think a reasonable response by the Fed in this situation would be to…. pause the taper at this juncture.”
Just like that feverish selling broke. Bullard’s stirring cry to non-action ringing in their ears, traders began furiously bidding for shares. Yes, a non-voting Fed board member’s oblique reference to the possibility that the Fed may not completely eliminate its now $15 billion monthly QE program this month marked the lows for the correction thus far.
How big was Bullard’s bluster? Based on the World Bank’s estimate of the total market capitalization of US stocks the 2.5% gain in equities just in the States is worth about $420 to $450 billion.
We knew the Fed would blink on coming up with a new QE at the slightest excuse. Peter Schiff and I discussed it openly last week. We just didn’t know their pain threshold. How bad would it have to get before the Fed stepped in? Now we do. Whether he tried to or not James Bullard has in effect signalled to traders that the FOMC is committed to jawboning the equity market anytime stocks get down 9% or more.
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(CERR INVESTMENTS). Look out for more surprises in the next month or so.  First we had we need to have clear guidance on what the Feds was going to do. It looks like QE3 was coming to an end in October. Now we get that wait just a minute we may not need to end QE3.  Feds are trying to keep market prices inflated no matter what the cost.  I could believe in this strategy if they can explain the end game.   The Feds need to use their leverage and get companies who are benefiting from QE3 to quit hording money and start hiring.  Banks are getting the spread money but are not loaning.  Interest rates for student loans are not decreasing.  Unfortunately there will be no policies targeted to the middle class until after the election.  All you will hear then is cut cooperate taxes, flatten the tax codes, increase sales taxes.  None of this will happen of course.  Instead getting ready for more government shut downs, more nasty talk, sequester, no minimum wage, and no finance reform. 

Thursday, October 16, 2014

Have Stocks Stopping the Free Fall? Wait till the Fed Speaks to see a turn around.

(Reuters - Jonathan Spicer and Michael Flaherty) - The Federal Reserve should keep buying bonds for longer than planned in the face of volatile markets and falling inflation expectations, a top U.S. central banker said on Thursday, even as another Fed policymaker warned against an over-reaction. James Bullard, president of the St. Louis Fed, is the only official at the central bank to publicly suggest putting on hold the Fed's widely telegraphed plan to halt its asset-purchase program later this month. Yields on U.S. bonds, which have plunged the last few days, rebounded after his comments. "We can go on pause on the taper at this juncture and wait until we see how the data shakes out into December," Bullard said on Bloomberg Television. "Inflation expectations are dropping in the U.S. and that is something that a central bank cannot abide." "A reasonable response by the Fed in this situation would be to invoke the clause ... that says the taper was data dependent," he added.But stock market values and bond yields have dropped sharply in recent weeks as investors fretted over the health of the world economy, with fears growing that Europe could tip into recession, damaging the U.S. economy. The dollar has continued its climb, causing measures of medium-term inflation expectations to ease.

(Yahoo.com).The SEC has charged a small firm, Athena Capital Research, with using rapid-fire trades in the final seconds of the trading day to manipulate the closing prices in some NASDAQ-listed stocks. The SEC alleges Athena used an algorithm called Gravy to "mark the close." It traded on the order imbalances that occur at the end of the day. When there is an imbalance between buyers and sellers, NASDAQ routinely runs an auction to fill the order imbalances at the best price at the close. Athena, the SEC says, placed orders to fill imbalances, then traded shares on the market prior to the close on the opposite side of the order.

(Investors.com). The Big Picture Stocks Stage Positive Reversal, Wiping Out Early Losses. 07:08 PM ET - Stocks made several U-turns Thursday, eventually closing just above the break-even line. The Nasdaq and S&P 500 edged up fractionally. The IBD 50 popped 1.5%. Volume fell across the board. The indexes were sharply negative until Federal Reserve non-voting member James Bullard said the Fed should delay the end of its bond-buying program,


(CERR Investments).  Here we go again, big industry asking the Feds to stay in the game and buy more bonds and not end QE3. Keep bank deposits, money markets, and bond interest rates as low as possible.  Feds should share in the blame it people loose money in the markets since they are driving people to the markets.   More free money to the big banks and big industries. This is not a fair game when the few can drive the market.  Big industry is pushing down prices to get a better entry.  The middle east is pushing down gas prices to keep shale oil and other industries price prohibitive. Is this just business as usual?  Watch for Feds to give a speech at any time now to cause markets to react. 

Monday, October 13, 2014

(NEW YORK (Reuters)-Rodrigo Campos)Wall St. leads stocks sell off; dollar slides on Fed views. Stocks on Wall Street tumbled in late selling on Monday as the technical picture soured for the S&P 500, while the U.S. dollar posted its worst day in a year after comments from Federal Reserve officials hinted at delays in expected interest rate hikes.The softer dollar lifted pressure off metals prices, but Brent crude oil fell to its lowest level in almost four years after key Middle East producers signaled they would keep output high even if that meant lower prices.Traders on Wall Street were bracing for the full onslaught of the quarterly earnings season, with many expecting the next move in equities to take its cue from corporate outlooks for the rest of the year.  Technical indicators dominated trading as the S&P 500 sank below the 1,900-point level and broke below its 200-day moving average.Energy shares were among the day's biggest losers, with the S&P energy sector (.SPNY) down 2.9 percent. Airline shares also slid, as news of a Texas nurse who contracted Ebola while caring for a dying Liberian patient triggered worries about travel. Federal Reserve officials said over the weekend that a sharp slowdown in the global economy could delay an increase in U.S. interest rates. Those remarks followed industrial data out of Germany, the euro zone's biggest economy, that raised concerns about global growth.  

(CERR INVESTMENTS). DOW down 223 today!  Big Industry is starting to really sell now due to global market concerns. Even Fed policy cannot stop this one. The only play in the game for the Feds was interest rates and the markets have keyed that in. When Fed buying stops in October we will see some interesting things. Price supports for stocks will be ending. Are we in a market correction now?  Small Caps and now Large Caps are bearish. Investors now looking for safety back in bonds to ride out the turmoil.  Earning seasons wont tell the true picture because of QE3.  A few things will change the course direction of the markets - get Ebola under control, end  QE3 and raise the rates.  The closer we get to 2015 the more big institutions will begin pulling money out of the markets. Some call it uncertainty, I call it free money to the banks and institutions.  If you don't think so, watch who provides the large money flows to the parties this elections. Watch the ads.  Big industry is selling to influence the Feds.  Just my view point.  

Wednesday, October 8, 2014

Here Comes The Feds To Save The Day!

(NEW YORK (Reuters)) - U.S. stocks rallied 1 percent on Wednesday, jumping in a volatile session after the Federal Reserve reassured investors that the first interest rate hike would not come before the economy could support itThe Fed has said that it would not raise rates for a "considerable time," and in the minutes from its Sept. 16-17 meeting the U.S. central bank expressed concern that this could be interpreted "as a commitment rather than as data dependent."Data dependency is what the Fed is trying to beat into the skull of Mr. Market, and the labor market is still too squishy for the Fed to be raising rates anytime soon," said Jim O’Donnell, chief investment officer at Forward in San Francisco, which has $5 billion in assets under management. The CBOE Volatility index (.VIX) fell 11 percent to 15.34. 

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(CERR Investments).  Here comes the Feds to the rescue once again. The markets decline and the Feds writes new minutes to assure big industry that the ordinary investor is not going to make lots of money off of his bank accounts, money markets, bonds, or CDs for the "considerable time".  A 6 month CD today is worth 0.117%. This is a green light to big industry and banks that the spread will stay the same for a while. The amount of interest banks loan ordinary individuals will remain greater than what we loan to the banks in term of our bank accounts. Now tell me how does this help the ordinary citizen? Are jobs being created due to this policy or is it just temporary jobs where health care can be cut (like Walmart).  It will take a "considerable time" for ordinary investors to forget 2008 and the credit default swaps and loan sharking completed by the big banks. Ordinary investor is looking for a level playing field where inside traders are being caught, regulations are there to help the many instead of the few, and the Federal Government start hiring and creating jobs again. 

(MSN Money). IMF cuts growth outlook, warns on euro zone, Japan.  The International Monetary Fund cut its global economic growth forecasts for the third time this year on Tuesday, warning of weaker growth in core euro zone countries, Japan and big emerging markets like Brazil.  While richer countries like Britain and the United States are seeing a stronger economic expansion, the IMF downgraded its forecasts for the three biggest economies in the euro zone currency bloc - Germany, France and Italy - and said it was essential richer countries maintain monetary accommodation and low interest ratesThe IMF also warned geopolitical tensions between Russia and Ukraine, and in the Middle East, were increasingly posing risks to the global economy and could shock oil prices and cause wider trade and financial disruptions if conflicts escalate.  With loose monetary policy reaching its limits and cash-strapped governments struggling to boost public investment, the IMF urged all countries to pursue structural reforms, such as improving labor market policies, fighting tax evasion and raising infrastructure spending.


(CERR Investments). So it appears the rest of world has come along and figured out that they also need to cut interest rates and keep bank deposit, CDs, and bond returns low and boost the rates or interest for stocks.  Stock prices are inflated right now and you can see it in the absences of Fed policy.  QE3 is coming to an end so the only game in town is to keep interest rates low. What a gamble. There is a problem? We have learn in the early 2000s and 2008 that if the ordinary investor begins to buy stocks big institutions will find a way to get their hands on it either through bogus investment tricks, insider trading, or plain old ponzy schemes. No More TARP!  Be weary my friend and watch for markets to turn in the absence of new fed policy. Then you will see the true market.  Buy the dips!

Friday, October 3, 2014

Feds Helping Out The Market Again! Is this Hype........Looks like Russel and FSTE is in a Correction.

(WASHINGTON POST) — U.S. employers added 248,000 jobs in September, a burst of hiring that helped drive down the unemployment rate to 5.9 percent, the lowest since July 2008.  The Labor Department report Friday also showed that employers added 69,000 more jobs in July and August than the government had previously estimated.  The rate fell from 6.1 percent in August and is now close to 5.5 percent, which many economists consider a healthy level.  That could ratchet up pressure on the Federal Reserve to raise its benchmark interest rate earlier than it plans. Most economists have predicted that the Fed will do so in mid-2015.  The improved figures come after President Barack Obama touted his administration’s economic achievements in a speech Thursday. The economy is the top issue in voters’ minds as the November elections near.  The number of unemployed fell in September by 329,000 to 9.3 million. Most of them found jobs last month. But nearly 100,000 stopped looking for work.  

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(CERR INVESTMENTS) - Isn't it interesting the Feds have revised unemployment up from last month now, exactly when the markets were declining, right before an election cycle. I still say the Feds and Big Investors are working together to influence  the markets.  Most of the jobs (according to the Washington Post) were created last month. Lets think about what is happening here. People are getting ready for Christmas. These are temporary jobs. Also, most investors knew about these jobs numbers on Thursday. Why the big rise of the Markets on Friday?  What happens when QE3 ends next month?  I bet the news people like (Squawk) will be talking about this 24-7.  Right now the key word is still "Ebola".  A news commentator goes to Liberia and has no physical contact. No one really knows how this thing is spread.  I pray but in 4 to 21 days we will know if things are okay.  
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(YAHOO Finance) - Scary October start for stocks; Russell in correction.  U.S. stocks declined sharply on Wednesday, with the fourth quarter starting off on a dour note after the S&P 500's seventh quarterly gain, as investors fretted global concerns, mixed U.S. economic data and earnings ahead.  2011 as investors sought safety in U.S. Treasury bonds and gold,with the CBOE Volatility Index (^VIX), a measure of investor uncertainty, rising. The Russell 2000 (^RUT) fell into correction territory, down 10 percent from its July record.  "In the here and now, there are too many global-macro concerns for investors to have confidence," said Art Hogan, chief market strategist at Wunderlich Securities, listing worries about ISIS, Ukraine and Russia, the slowdown in China "and Ebola, which is causing things like airline stocks to go down."    While often a scary month, this October has an especially long list of demons for markets to contend with-from the major shift in U.S. monetary policy and a global economic slowdown to a host of percolating geopolitical hazards, from Kiev to Hong Kong to Brasilia.  Markets enter the month on a wave of heightened volatility, and are already showing signs of being spooked by the Fed and concerns about European and Chinese growth.This week alone, there is a European Central Bank meeting Thursday, where it is expected to detail its asset-backed purchase program, coming just as the Fed is stepping back. There is also the September employment report Friday, a key data point for the Fed, and there are general elections in Brazil over the weekend.
"October is historically a turnaround month, where the markets tend to turn around after weakness but often the weakness carries on into October. Maybe, we have to get to the middle of the month-until we get some Chinese data and then we turn around. We think stocks are probably headed higher from here to year end," said Jeff Kleintop, senior vice president and chief global investment strategist at Charles Schwab.  October is a critical turning point for Fed policy and in a highly choreographed wind down, the Fed Oct. 29 is expected to announce it is finishing its quantitative easing-the controversial bond buying program that many strategists say has added liquidity and helped provide a strong backdrop for stock market gains.  The Fed then begins a slow walk toward its first rate hike sometime next year, so each piece of economic data is even more important than usual since that is what is guiding the Fed's hand.    The dollar has also risen, while Treasury yields have stayed relatively low, amid a quarter rife with geopolitical events-any one of which could impact markets. The sanctions against Russia for its actions against Ukraine continue to be a worry for the weakened European economy.   "There are a lot of things that are happening around the world right now that don't add up to a macro story, but do run some risks of turning into something under certain circumstances," Kasman said.  The dollar strength is expected to continue, and it could be a headwind for some markets in the fourth quarter. Strategists point to oil, with Brent down 15 percent in the third quarter, and gold, down more than 8 percent. October kicks off Wednesday with a series of other important reports, including ISM manufacturing data, construction spending, ADP (ADP) private payroll data, and September auto sales.

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(CERR INVESTMENTS) - I really think geopolitical challengers will definitely be at the fore front of market concerns this month.  People are looking for something to happen, a change in the investment environment.  For now we have to look forward to is QE3 ending.  Yes the markets are going up today 10/3/2014 but is anything being directed at the average citizen?  Who is really buying this market?  Things are more the same, keep interest rates as low as possible, don't really tell people exactly when you end QE3, don't really tell you when they will raise interest rates....Who has more patience?  I think we have underlining things happen that causes today to be market hype.  Until wages and employment (government jobs, high wage, private sector- not just services), things are gong to be on a pause. Until you get the average citizen buying goods and services again and their bank accounts begin to rise again, things will be stagnant.  If things were good people would be retiring now and enjoying the good life. Do you see people over 60 leaving their jobs in drove.  

Monday, September 29, 2014

Here Comes The Feds To The Rescue Again!

(CNBC). U.S. stocks rose sharply on Friday, cutting losses for the week, after the government raised its estimate of economic growth in the second quarter and consumer sentiment rose in September.  "The backdrop for a lot of this nervousness is the end of QE," Peter Boockvar, chief market analyst at The Lindsey Group, said. "We have lots of data this week, followed by lots of earnings over the next month." Stocks did not move much in reaction to a 1 percent decline in pending home sales for August, and futures were little changed after reports that personal income rose 0.3 percent in August , as expected. Earlier, protests in Hong Kong had rattled global markets and U.S. stocks about percent lower, but most analysts said the situation would not have a long-lasting impact on markets. 
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(CERR Finance).  The financial markets seem to be playing rope a dope today. Markets dropped 100 points today until Feds made a statement. That is not a bad thing but it surely shows markets are getting weary. "Caution" is the word for today. Fed policy is trying to protect big institutions, banks, and big companies from market loses. It is like trickle down economics being played out. Why don't the Fed increase the spread between how much we loan to banks instead of how much they loan to the average citizen. Banks would not exist without capital and the free money they are getting from the Feds.  Feds are trying to keep the average citizen in check by saying they will not raise rates for the near future. What does that mean? Translate - we are not going to allow you to make any money off of your bank accounts, money market accounts, bonds, CDs or anything that is considered low risk.  Overseas markets are being challenged by citizens who want more opportunities. The time for overseas rulers to share wealth to their people has come. People with billions of dollars of worth need to do more to create a level playing field for ordinary workers. Until workers feel like government is working for them (lower minimum wage, minimizing certain drug laws to kill to prison complex, making tax laws favorable to middle class, and changing big welfare laws for big pharma, energy, foreign aid, and taxes. 

Saturday, September 27, 2014

Time For Caution! Close Relationship Between Feds and Banks

(Yahoo.com -By Jonathan Spicer and Emily Stephenson, September 27, 2014 ). "When regulators care more about protecting big banks from accountability than they do about protecting the American people from risky and illegal behavior on Wall Street, it threatens our whole economy," Warren (Elizabeth Warren - Democrat on the Senate Banking Committee) said in an emailed statement. "Congress must hold oversight hearings on the disturbing issues raised by today's whistleblower report when it returns in November."
Brown, in an email, said: "For too long, too many financial regulators have been too cozy towards the very industry that they are meant to police."
Carmen Segarra, a former New York Fed bank examiner who brought a wrongful termination lawsuit against her former employer, recorded the conversations and provided them to the investigative news outlet ProPublica and the public radio show "This American Life" to illustrate what she saw as an inappropriately close relationship between regulator and bank.
Segarra was fired after nearly seven months at the New York Fed as a so-called embedded supervisor at Goldman. She later sued the branch of the U.S. central bank for $7 million but the suit was dismissed in April for failing to state a claim that merited whistleblower protection, a decision she is appealing.
"The New York Fed categorically rejects the allegations being made about the integrity of its supervision of financial institutions," it said in a statement on its website.
On Friday, Goldman tightened rules on investments its bankers can make in individual stocks and bonds, a company spokesman told Reuters.
A source familiar with the situation said the bank's new conflict-of-interest rules on Friday were in the works for some time and were unrelated to the Segarra case.
Asked about the possibility of hearings, both the New York Fed and Goldman Sachs declined to comment.
In one conversation said to be among Fed examiners following a meeting with Goldman officials, one participant appeared concerned about pushing the bank too hard for details on the Santander deal.
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(CERR Investments).  This is not hardly surprising. No bank executives went to jail for the financial crisis, no average citizen got there money back from stolen mutual funds and pensions, and banks got a reprieve due to TARP funding. People are holding onto their cash now because they see and understand that institutions and the government are working together. Sooner or later capital will dry up or at least will be in the market. How will you continue growth? Well you need new money. What money? Money sitting on the sideline lines in money markets and banks. Why do you think the Feds have near zero interest rates on bank accounts and money market funds. They want average citizens to invest. However what about big business who is also holding onto capital, companies going overseas to avoid taxes,  and banks not issuing loans? You can see Fed policy not going after those fat cats. 

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(Yahoo.com). London (AFP) - Six banks may face record fines in Britain as they begin talks about a settlement following an investigation into allegations of rigging currency markets, the Financial Times reported on Friday. Barclays, Citigroup, HSBC, JPMorgan Chase, the Royal Bank of Scotland and UBS have begun meetings with the Financial Conduct Authority (FCA) to agree a settlement, and fines may amount to over one billion pounds ($1.6 billion, 1.3 billion euros), the FT reported, citing sources close to the situation.
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Thursday, September 25, 2014

Is the Sky Falling or Are We Getting Back to Financial Norm?

(Yahoo.com).  Stocks slammed by global worries; Dow off 250 pts.  U.S. stocks declined on Thursday, a day after the S&P 500 jumped the most in more than a month, as Wall Street weighed reports that Russia was considering a measure that would let its courts seize foreign assets. "To us that would signal a threat from the Kremlin that the Russian-U.S.-Europe conflict economically might take a turn for the worse, should it be enacted. They are signaling that unless concessions or negotiations take place, we're prepared to do this," said Jim Russell, senior equity strategist for US Bank Wealth Management. Reuters reported the draft law, submitted to Russia's parliament on Wednesday by a pro-Kremlin deputy, would also allow state compensation for those whose assets were taken in foreign jurisdictions.

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 (CERR Investiments).  Do you really think the markets are declining because Russia threatens to take foreign assets? Well Russia has foreign assets. What do you think the world would do to their things.  Small Caps stocks and now Large Cap stocks are getting hit. Reit Funds are getting slammed!

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(The Street). All 10 sectors of the S&P 500 were in the red, with most posting a drop of more than 1%. The S&P 500 information technology sector was bearing the brunt of the negative action as both Apple andYahoo! (YHOO_) tumbled. The iPhone maker was down 3.53% after pulling its iOS 8.0.1 updatemere hours after releasing it. (This could turn your phone into a brick!). Yahoo! fell 1.76% after revealing that it agreed to a one-year lock-up period that restricts the sale of the remaining ordinary shares it owns in Alibaba (BABA_) .  The overall declines in equities on Thursday were mainly attributable to end-of-quarter profit taking, thinner volumes due to the Jewish holidays, and the unwinding of trades that were driven by dovish Federal Reserve speak during the prior session.

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 (CERR Investiments). End of quarter profit taking to say the least Street0! Big companies are getting ready for the sweet free money to end in October. As long as Feds keep bank deposits by ordinary individual near zero interest rates companies will invest because there is no other place to go if you want to make money.  However the small investor is the key. The small investor is not going to forget 2008 and all the ponzy schemes that went on. Until the markets seem fair, bank deposit rates go back up, and financial regulations are again keeping insider traders from stealing your money, markets will stall. 

Wednesday, September 24, 2014

How Does The Small Investor Compete With Big Institutions

(Yahoo.com-William A. Galston). If they (Americans) were judging the economy by the monthly jobs report, working Americans would be popping champagne corks. Total employment has risen every month for more than four years. According to the Current Population Survey, more than eight million jobs have been created since the trough, while the number of unemployed has been cut by nearly six million. The unemployment rate has declined to 6.1% from 10%, and the number of Americans enduring long-term unemployment (27 weeks or more) has fallen to three million from 4.3 million in the past 12 months. This year's report (U.S. Commerce Department) found that median household income was $51,939 in 2013, 8% lower than in 2007, the last year before the recession (crash of 2008). Households in the middle of the income distribution earned about $4,500 less last year than they had six years earlier. No wonder 56% of Americans told the Pew Research Center that their incomes were falling behind the cost of living.What's going on? The Census report offers a clue. The median earnings for Americans working full-time year round haven't changed much since 2007. But more than five years into the recovery, there are fewer such workers than before the recession. In 2007, 108.6 million Americans were working full time, year-round; in 2013 only 105.9 million were doing so. Although jobs are being created, too many of them are part-time to maintain growth in household incomes.

______________________________________________________________  (US Census Bureau). New Economic Indicators from the US Census Bureau show that Residential Housing Sales (single family) are up 16.3% as of Aug 14.  However new construction is down -7.9%.Profits from retail trade are up $7 Billion. Construction spending was up 1.8%. Rental rates were down 7.5%.  Home ownership rates were down 0.3%.  The nation's 65-and-older population is projected to reach 83.7 million in the year 2050, almost double in size from the 2012 level of 43.1 million. 

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(Wikipedia.org/wiki/Middle-class_squeeze).  The middle-class squeeze is the situation where increases in wages fail to keep up with inflation formiddle-income earners, while at the same time, the phenomenon fails to have a similar impact on the top wage earners. Persons belonging to the middle class find that inflation in consumer goods and thehousing market prevent them from maintaining a middle-class lifestyle, making downward mobility a threat to counteract aspirations of upward mobility. In the United States for example, middle-class income is declining while many staple products are increasing in price, such as energy, education, housing, and insurance.[1]

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(CERR Investments).  What does this mean? This is my read:  Industries and investors are buying houses instead of regular home buying residents and renting them at higher than normal prices (profits $7 Billion) - keeping residents from renting (rental rates down 7.5%).  People are finding themselves priced out of the housing market (ownership rates down 0.3%).  This tells me the younger people and the middle class are getting squeezed and older generation is trying to hold on to their existing houses as long as possible (housing starts or construction down 7.9%). 

Tuesday, September 23, 2014

The Bears Are Running!

Stocks Fall For Third Straight Day — Dow Down 116

(Reuters) - U.S. stocks fell on Tuesday, with consumer staples leading the S&P 500 down to its third straight daily loss, as investors grew concerned about the pace of global economic growth. The day's losses were broad, with all ten primary S&P sectors down. Consumer staples .SPLRCS were the weakest on the day, off 0.9 percent, while industrials .SPLRCI lost 0.8 percent. Wall Street's losses tracked Europe's .FTEU3 1.3 percent slump after data showed a contraction in French business activity and slower growth in German manufacturing this month. The Russell 2000 .TOY fell 0.9 percent during the normal session, and the small cap index's 50-day moving average fell slightly under its 200-day moving average, a condition known as a "death cross," which many investors view as indicating a coming bear market.
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(CBS World News) BANGKOK - World stocks were muted Tuesday as a string of record highs on Wall Street instilled caution about a possible bubble in stock markets fueled by easy monetary policy.
The Dow Jones industrial average has surged 900 points since early October and crossed the 16,000-point threshold Monday. Wall Street has not suffered a significant pullback in the past two years even though the U.S. economic recovery has been painfully slow.
Comments from influential investor Carl Icahn during the Reuters Global Investment Outlook Summit also reinforced jitters that stock prices are out of step with reality. "Icahn feels many companies' earnings are a mirage and earnings may be fuelled more by low interest rates than strong management," said Stan Shamu, market strategist at IG in Melbourne, Australia. "At such elevated levels investors are always looking for excuses to take some profits off the table," Shamu said.
In Europe, Britain's FTSE 100 fell 0.6 percent to 6,680.19 and France's CAC-40 shed 0.8 percent to 4,288.25. Germany's DAX was off 0.4 percent at 9,185.23.
Futures pointed to a retreat on Wall Street, with Dow and S&P 500 futures both down 0.1 percent.
Japan's Nikkei 225 stock average closed down 0.3 percent at 15,126.56 and China's Shanghai Composite Index dropped 0.2 percent to 2,193.13. Australia's S&P/ASX 200 lost 0.6 percent to 5,352.90. Hong Kong's Hang Seng was little changed at 23,657.81. Markets in Southeast Asia mostly fell.
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(CNBC) The U.S. stock market remains in positive terrain for the year after a recent drubbing that pushed the S&P 500 and Nasdaq Composite to five-week lows.
The same can't be said for the Russell 2000 index of smaller companies, now down 3.9 percent on the year, and leading some to question whether its decline is a harbinger of things to come for the broad market.
"The Russell 2000 getting weaker is a point of concern. What the market is dealing with is whether this is a reallocating of assets as we head into the end of the quarter or a fundamental breakdown," said JJ Kinahan, chief strategist at TD Ameritrade.
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(CERR Investments) Small Cap stocks are taking a beating lately. Global markets are showing signs of the turmoil from  Russia and in Syria. I expect the Feds to come out this week with another speech soon to ease the markets. Has the market correction begun?  When all of the hype is gone from Chinese stocks we will see it is as exactly that, hype. Interest rates are going to go up soon and then we will see the real players in the game. Hope my mutual fund managers and stock company CEOs are smart players.