WASHINGTON – Traders and investors endured another wobbly trading day Thursday. Stock market action proved almost literally bipolar, as all three major averages bobbed and weaved (wove?) indecisively up and down. The close was virtually flatline, though slightly to the positive. Stocks remain indecisive in Friday action as we approach the noon hour.
So why do US stocks remain indecisive?
CNBC picks up on Mr Market’s malaise this morning.
“For the week, the Dow entered Friday’s session down 3% while the S&P 500 has lost 2.2%. The NASDAQ Composite is down 1.1% week to date. This would mark the benchmarks’ longest weekly slide since August 2019.
“The ‘sell-off has stabilized a bit over the last few days, but there are still no real signs of strength,’ said Mark Newton, managing member at Newton Advisors, in a note. ‘Thus, the trend remains bearish and not much to bet on a rebound.’”
That seems about right.
CNBC writers Fred Imbert and Jesse Pound continue with that thread.
“Wall Street was coming off a choppy session in which the major averages eked out small gains as major tech shares saw broad gains. That outperformance for the tech-heavy index is a reversal from earlier during this market pullback.
“The major averages have had a tough month, with the S&P 500 falling more than 7% in September. The Dow has dropped 5.7% over that time period and the NASDAQ is down 9.4% month to date.
“Much of September’s losses have been concentrated in mega-cap tech stocks, which carry a heavy weight in the indexes. Shares of Apple — the largest publicly traded company in the U.S. by market cap — have dropped more than 19% this month. Microsoft, Alphabet, Netflix, Amazon and Facebook are all down at least 9.9% over that time period.”
Stocks repeated this dreary theme yet again at Friday morning’s 9:30 a.m. opening bell. Many stocks rallied a bit, then sank, then struggled back. Even as the market picked up some steam early Friday afternoon, the volume and enthusiasm aren’t there, as stubborn stocks remain indecisive. Same old, same old.
Is the battered tech sector starting to stir again?
But, at the moment at least, Apple (trading symbol: NASDAQ:AAPL), Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) remain in the green, with Amazon the strongest, while Apple is giving up some of its earlier gains. We generally don’t trade shares of Facebook (NASDAQ:FB) or Netflix (NADSAQ:NFLX) as our timing is almost invariably wrong. Another big tech, Alphabet, aka Google (NASDAQ:GOOGL) has remained persistently weak of late, even during the summer’s rally, so we’ve avoided this one as well.
As we crank out this column, circa 1:45 p.m. ET, stocks seem content to remain slightly in the green or even a bit more. It would be nice to retain this modestly positive bias going into the weekend. But we’ve seen green ink fade to red near the close many times in September. Given the utter chaos of the daily news – at least the news we hear – something positive would be a relief to finish out the week.
Election 2020: The Mother of All Headline Risk looms dead ahead
The likely chaos of Election 2020 creeps ever-closer. With the first alleged presidential debate set to air from the campus of Cleveland’s Case Western Reserve University (my late father’s alma mater), and with the Soros- and foreign government-funded riot machine functioning 24/7, headline risk remains strong in this market. This constant remains true even as we approach the generally positive seasonality of October in stock market history.
Sleepy Joe has likely been training for this debate in his basement for the better part of the last 2 weeks, which at least in part is why we haven’t seen him on the campaign trail much. (The other reason, the elephant in the room, is obvious.)
So long as the debate moderator sticks to the script of anti-Trump questions secretly (Hah!) provided by the Biden campaign; and so long as everybody fails to notice Biden’s concealed two-way communications earpiece, things will seem to go well for him. And, of course, the media has already written its commentary declaring him the hands-down winner of the first debate. Assuming it even happens.
Is the Biden campaign really Reality TV?
The Biden campaign is the closest thing we’ve ever seen to the satirical comic strips that once appeared regularly in the old MAD Magazine.
Or, for more recent generations, like an animated satirical skit in Adult Swim’s long-running “Robot Chicken” series, with Slow Joe in the role of the Frankenstein- like cyborg chicken. No fiction writer could make this stuff up. If the electorate actually buys this sham on November 3 (or 5-10 years after all the mail-in ballots are actually counted), we’d be looking for another country. Except, these days, what other country?
Mr Market’s Big Dilemma
The problem is, Mr Market faces the same dilemma. If all this not-so-merry nonsense persists past the election date, there’s almost no other place for the average American to place his, her or its money. Except maybe stuffing it in the master bedroom mattress, 1930s-style.
All this poses a hell of a dilemma that, ignorant political commentators to the contrary, spares no one in this country, save the faux-left cognoscenti who remain the ultimate Wrong Way Corrigans. And, of course, those Lords and Ladies of the Street who routinely live out of Safeway carts anyway.
Everyone else who owns a pension fund, 401(k) or IRA in some way, shape or form will be screwed if we can’t pull this election out and elect rational candidates, not only to the White House but everywhere else, including state and local governments.
Returning to a good old rational United States could help stocks today. But will this ever happen?
It would be nice to live in a more rational country once again. But that’s tough to do when The Dumbest Generation has steadily committed itself to every aspect of the dialectic. And when even Fox isn’t allowed tell us anything about the pure, well-funded and prosecutable sedition pursued, well, not exactly by George Soros, but by all those patriotically named Marxist organizations he’s selflessly endowed over several decades.
Well, no sense in going on about this further. It’s unlikely any search engines will pick this column up anyway, and writing clever diatribes, while fun, generates few if any profits for this site.
Nonetheless, for anyone who’s reading this column and has a direct or indirect stake in the stock market, caution remains warranted. We all find ourselves in the investment version of No Man’s (Person’s?) Land these days. And it’s hard to predict the effects of Pearl Harbor moments when they have yet to occur.
Investors can run, but they can’t exactly hide
As noted in yesterday’s column, one possible place to hide, at least for now, is in the preferred stocks of reasonably stable companies. Otherwise, we’re trying to nibble at shares of the badly battered techs, hoping a possible economic recovery phase. At the same time, we should all realize that the techs remain overinflated, price-wise. Thus, they also remain vulnerable to further downturns. Investment gurus preach that now is the time for buying big industrial cyclicals like Caterpillar (NYSE:CAT) and John Deere (NYSE:DE). But, with Covid-19 still in the air, who’s buying bulldozers to help build unneeded office buildings, or shiny new tractors to farm the fruited plain whose crops can’t seem to make a profit these days?
What’s next if stocks remain indecisive? What’s next for us? And when will fed-up Americans finally revolt against 24/7 house arrest?
Increasingly, aside from techs (and maybe communications issues) most businesses seem smithereened to varying degrees. The Covid-19 “case” mongers in the media still fling out meaningless stats to smear the White House’s current occupant. But the nation continues to remain reluctantly masked, aimless, often unemployed and out of school. Americans still chafe under decidedly un-American (and unconstitutional) house arrest, and this can’t last much longer before even the biggest milquetoasts and snowflakes break out into open revolt.
In other words, this intolerable social nonsense can’t last much longer. But the longer it continues to build, and the longer stocks remain indecisive, the worse the climax may be. So it’s inadvisible to be short of cash going into the final quarter of 2020. Maybe we should all befriend the preppers everyone used to laugh at.
Well, that’s it for now. Next week’s columns might be a bit sparse, as we’re hitting the road this weekend and heading for a long-delayed reunion with some long-time high school chums in Ohio. ‘Twill give us a chance to relax and breathe some less-political air than we have here in The Swamp. Plus, get a feel for which way Ohio might lean on November 3.
Anyway, have a good weekend.