Morgan Stanley up, gold pummeled, Wednesday traders confused

Wall Street giveth and Wall Street taketh away. Right now, the Street taketh a lot, as wildly uneven trading, world events have put a lid on the Trump Rally.

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Gold bars. (Image via Wikipedia entry on gold, CC 2.0 license)

WASHINGTON, April 19, 2017 – In Wednesday morning trading action, all three major averages are off to the races in different directions. The Dow Jones Industrials are mildly but chronically in the red zone, the broader-based S&P 500 is mildly in the green zone and the tech-heavy NASDAQ is robustly up for a roughly 0.75 percent gain as we approach the noon hour ET.

Balancing Goldman Sachs’ (symbol: GS) lousy performance Tuesday—punishment for merely good earnings—Goldman rival Morgan Stanley (MS) is getting bid aggressively up this morning for its uncommonly good Q1 earnings report, indicating that its trading team may very well be doing better than Goldman’s legendary traders.

But Goldman continues to be a drag on the Dow this morning, even as Citicorp (C) analysts have raised the investment-banking firm from a sell to neutral.

Worse for the Dow is continuing weakness in another key stock, Johnson & Johnson (JNJ), which also reported a disappointing Q1.


Former blue chip powerhouse IBM (IBM), also heavily weighted in the Dow, is getting pancaked this morning, also after posting dismal earnings numbers, just as it has been for at least two years, as the company continues its painful reorganization into something that scarcely resembles the mainframe computing giant of old. Big Blue is currently sitting at $161.48 per share, off $8.57 on the day for a whopping 5.04 percent loss. Warren Buffett is rumored to be having second thoughts about his investment in this one-time Wall Street giant.

With these three giant companies getting blasted Wednesday morning, it’s clear why the Dow isn’t following the other pair of major averages. But even the S&P 500 and the NASDAQ have been inconsistent performers of late. That’s why many investors have been heading back to bonds, raising prices and effectively reducing yields, which is contrary to the policy desires of the Federal Reserve. We’ll see how that works out.

In addition to the increased bond buying, investors have been heavying back up on gold and paper gold (ETF) investments, dramatically bringing the yellow metal back out of its early 2017 trading slump.

That is until Tuesday and again today.

Adam Smith’s “invisible hand” seems to be back to its old gold-price manipulating tricks again, ripping the guts out of the gold bugs with huge, ham-fisted sell orders, as ZeroHedge duly notes. With charts.

Zero’s scare headline reads:

Gold Slammed For Second Day As ‘Someone’ Panic Dumps $3 Billion Notional Ahead Of London Fix

Info and dramatic charts follow to underscore the scare headline:

Yesterday, ahead of the London Fix, Gold was monkeyhammered lower on yuuge volume, only to rip back higher.

Spot gold, London Fix, April 18, 2017. Chart courtesy ZeroHedge.

Today, having failed to keep the precious metal down (25,000 contracts dumped in a minute), they went for it again with a $3 billion notional pummeling in futures…

Gold contract, April 19, 2017. Chart courtesy ZeroHedge.

It seems that almost as soon as traders and investors find some place to hide amidst the current market turmoil, that “invisible hand”—likely belonging to central bank manipulators and their not-too-secret corporate associates—intervene to cap either stock market action, gold and silver action, or, if deemed necessary, both.

That’s not the way markets are supposed to work in a democratic, free society. But that’s what the globalists apparently want—complete control of value and prices—and brief setbacks like the Brexit and the election of Donald Trump as U.S. president have not yet been enough to deter them.

It’s all enough to make us wish we were back in the days when reporters came up with real news that got to the bottom of chicanery like this. Unfortunately, it’s more fashionable and more lucrative today for lazy faux-reporters to dream up endless Russian conspiracy theories. They can’t handle the truth.

In an environment like this one, it’s best for small investors to continue standing aside until all the invisible hands manipulating all manner of investment vehicles head off to party somewhere in the South Pacific with Barack, Oprah, and the rest of the clowns that smothered the American economy for nearly 10 years and still counting.

Maybe some day we’ll get the real story on this decades (or more) long governmental and fiscal nightmare. But right now we have what we have, so it’s probably best to keep our portfolios conservatively invested, keeping a larger than usual cash reserve available for the next bargain basement markdown in stocks.

We look for the Trump Rally to resume at some point. But right now, we couldn’t remotely predict where in the future that point might actually be.

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Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17