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

( 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.

( -) 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.
(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.

( 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.

( 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. 

(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.  


(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.  

(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.

(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.