WASHINGTON, January 6, 2016 – Today, Wednesday, is “Little Christmas,” the official date for the Feast of the Epiphany when it’s said the Magi (and thus the Gentiles) found their way to the Christ Child. But alas, for investors, January already promises to become a Bear Market Epiphany, as markets are following through again today with the kind of jackhammering trading action that’s generating fears of 2008 redux.
Pretty much every stock sector is down as of this writing, around 1:45 p.m. EST, save for REITs, some utilities and some preferred stocks that have been catching a bid all week. If you’re a regular reader of the newspapers or their online relatives, you probably already have a good idea as to why.
Jam-piling onto this past weekend’s ongoing Saudi Kings and Princes vs. Iran’s Mad Mullahs back-and-forth battling, North Korea and its Dear Leader, Kim Jong-un, proclaimed they’d successfully tested an H-bomb, which proves that this Utopian Commie Paradise of Peace-Loving Peoples can destroy the United States as early as tomorrow. Or so they more or less proclaim. Looks like Kim needs $$$ again, which is why he does this.
Politicians and scientists doubt the word of these serial liars, but the international jury is still out on the truth or consequences of this event/non-event.
Having thus destabilized today’s markets, which hate all this uncertainty, the North Koreans were aided and abetted by the Chinese and the Saudis. China, for its part, seems dangerously close to losing control of its currency yet again, while the Saudis have announced—likely to spite the Iranians—they’ll be selling tankersful of oil to the Eurozone at nifty discounts.
Hurrah for that, but oops—that drove the price of oil down savagely, slashing the per barrel price for West Texas Intermediate (WTI) off by a whopping $2, as we approach the 2 p.m. hour. WTI is teetering at the $33.99 bbl. handle as we type, and Brent crude, still the international benchmark, has been hit even worse, down $2.07 at $34.35 bbl.
This, of course, has slaughtered the energy sector, which we mostly ran away from before yesterday’s close—for a small profit, believe it or not—save for a few shares of refiner Marathon Petroleum (symbol: MPC), an oversight for which we are paying dearly this afternoon.
Meanwhile, investors have apparently concluded that onetime tech darling Apple (AAPL) will never make money and will go out of business tomorrow. Or at least it seems. We bravely added a few of these still high-priced shares to our portfolio at what we thought might be today’s bottom.
But that bit of optimism is being challenged right now as Apple may next try to dive below the $100 mark before today’s close. (Right now, it’s trying to get back above a dismal $100.40 per share.) Volume is tremendous, as Wall Street trader’s ongoing Q3-4 2015 selloff in this stock seems determined to continue anew in 2016 until there are no sellers left.
What caused the renewed selling were apparently reliable reports that AAPL has trimmed Q2-3 2016 iPhone orders from its vendors by as much as 30%, indicating below-par sales are being anticipated. More likely is some realism about how many of those iPhone 6s models Apple will sell before the pre-iPhone 7 doldrums set in. That’s hardly big news. But for legions of now-former Apple lovers in the market, the world has now come to an end. Ridiculous, but what can you do?
Today’s trading tips
Aside from reviewing our previous articles on year-end bounce back candidate stocks, we’re going to sit tight. So should most investors. The market is likely not to be very good to any of us in 2016, but the current selling is reaching the ridiculous point. This should lead to a very healthy bounce of at least the dead cat variety. At some point. Whenever.
So it’s probably best to close our eyes and wait until the selling tsunami abates a bit, then catch whatever rally we can, and bail out of more positions. Right now, the only winners are conservative and high dividend-paying stocks. But even these will get hit during the next bull move, which seems very unlikely to persist, at least at this point.
A little U.S. diplomacy might help at this point. But our semi-retired president seems more interested right now in eviscerating the 2nd Amendment, even though the dangers to this country are mainly external. 2017 can’t come quick enough.