WASHINGTON, December 30, 2016 – Approaching the noon hour Friday, U.S. stock averages look to close the year shrouded in a sudden dark pall of nothing, nothing, nothing – nothing at all. (With apologies to sadly forgotten American poet and former Librarian of Congress Archie MacLeish.)
In fact, as we write this article around the noon hour, the Dow is up fractionally while the other major averages we follow—the bellwether S&P 500 and the tech-heavy NASDAQ—are down fractionally, ample evidence that, as we fully expected, 2016’s brilliant, year-ending Trump-Santa Claus Rally will conclude not with a bang but a whimper. (With additional apologies to
American British poet T. S. Eliot.)
The Maven figures today is a good day to wax poetic about yet another truly weird trading year, during which Wall Street and individual investors’ Adventures in Market Wonderland commenced with a frightening tumble down the investing rabbit hole and ended up with a resounding victory over the Blue Queen and her minions, celebrated a massive year-end rally that literally no one predicted. ‘Twas a very “Merry Christmas” indeed, now that we’re allowed once again to indulge in our American traditions.
So it has gone over the last several years as markets in general have been driven not by traditional measures like earnings and chart patterns but by frantic, shrieking, clickbait news headlines, many of the fake variety, some merely misleading as to the content below.
HFTs have been routinely taking advantage of this, not to mention loose, look-the-other-way regulation by Federal regulators who want a “real” job after they leave the cocoon of government, full retirement already in hand. Those real jobs, they reason, are in the private sector they’re regulating, so why piss off your future employers, right?
Hence, the wild, multi-year headline-driven trading insanity that’s dominated and frustrated the investing firmament for lo these past eight years. Will this change in 2017 when a man who’s actually made and lost real money assumes the reigns of a White House that’s pretty much held in contempt now throughout most of the world? We’ll soon see, recognizing up front that returning to some kind of sanity in terms of government, taxes, immigration, employment and health will be fought tooth and nail by the vicious cadre of dead-enders who’ve brought us to this place.
Indicators we follow suggest that at least the first 2 weeks of January may very well give us an instant replay of 2016’s hideous launch that battered many portfolios (including ours) so badly that the spectacular gains of 2016’s second half still couldn’t quite overcome that early investing sinkhole. So it goes. You can’t win every hand. But break-even is at least second best.
We’re actually pretty optimistic for 2017 on the whole, January battering or not. If soon-to-be-President Trump can stop tweeting long enough to sign enough executive orders to negate Obama’s shameful cavalcade of job-and-economy-killing executive orders, that could give the markets’ post-November 8 animal spirits their second wind, allowing the financial punditocracy to crow about beating Dow 20,000 and confidently predicting Dow 30,000. They’ll do it. You just watch.
As for us, we’re going to finish some paperwork, get a Long Island duckling ready for Sunday dinner, chill a bottle of bubbly and enjoy the long, no-trading New Year’s weekend. Meaning we’ll be relaxed, refreshed and ready for whatever next Tuesday, January 2, the first trading day of 2017, with only 17 days remaining in the worst excuse for a presidency this country has ever seen or endured.
Maybe we should chill a second bottle to celebrate that as well.
In the meantime, Happy New Year to all. We’ll be back next week.Click here for reuse options!
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