WASHINGTON – Since I didn’t have time to do a column Monday, today’s masterpiece combines a recap of Monday action along with some commentary on a thus-far boring Tuesday. With the Pelosi-Schiff impeachment charade droning in constant background, we look for news on a partial US-China trade deal. We also await the latest on interest rate plans Wednesday afternoon from a divided Fed. Add Apple’s (trading symbol: APPL) latest quarterly numbers reveal later in the week and you have a recipe for unpredictability on steroids.
Anyway, for today’s column, let’s look at relevant bits and pieces that at least give us some background for making investment decisions this week. Most of which involve the Fed, China and the Trump impeachment farce.
The Federal Open Market Committee Mysteries
Innovative Income Investor’s Tim McPartland offered a good Monday kickoff preview Monday, which sums up the reasons we could have the kind of frustrating Wall Street Week that most investors worry about.
“Here we go with what is sure to be an exciting week. We have a Federal Open Market Committee (FOMC) wrapping up on Wednesday with what is likely to be a 1/4% cut in the Fed Funds interest rate. Additionally we have the October employment report on Friday, which always [has] the potential to move markets.
“Last week the S&P500 moved in a range of 2991 to 3027 before finally closing the week at 3023–up 1% for the week. The 10 year treasury moved in a range of 1.73% to 1.84% closing near the highs on Friday.
“The Fed balance sheet moved up only $2 billion last week–so the slowest growth we have seen since early September, although given their recent actions we should expect further building in assets.”
Everyone waits breathlessly for the release of each month’s FOMC meeting notes on a designated Wednesday afternoon. Mr Market tends to dither and hold his breath on the Mondays and Tuesdays prior to this Fed announcement. And TPTB (The Powers That Be, a wholly owned subsidiary of the Deep State) already (illegally) know the contents of these reports in advance and start trading in that direction sometime Wednesday morning. If you watch the action as 2 p.m. approaches, “they” will usually tell you what’s likely in the report by the plus or minus action on Wall Street. A stupid game that’s been going on as long as I’ve been doing this stuff. Which, by now, amount to a considerable amount of my life.
Re: China, the economy, etc. Jim Cramer continues to get things right
As for that potential, limited US trade deal with China, this from a CNBC report.
“People who predicted the U.S.-China trade war would significantly damage America’s economy should apologize, Jim Cramer says.
“‘I think there’s some mea culpasthat we need to hear from the people that said cyclical America would be damaged,’ the ‘Mad Money’ host argues.
“But the strength shown by some industrial companies, such as United Technologies and Honeywell, was ‘rather remarkable,’ Cramer said. The strong quarters from industrial companies have helped push the S&P 500 to fresh highs.
“‘Every single one of these were much better than expected, and they were much better than expected from either self-help or the world isn’t as bad as we think,’ Cramer said.
“‘It turns out, the industrials are not as perturbed about China as you would have thought,’ he says.”
Like the economy of China, Google’s (GOOGL) latest quarterly report, of course, was lousy yesterday. As was Amazon’s (AMZN) last week. But in general, we’re seeing much better numbers than the recession cheerleading (i.e., anti-Trump) squad wants you to know. You know, the leftist clowns producing and sponsoring the Trump impeachment farce.
Kunstler lets Kapitol Hill’s Keystone Kongressional Kops have it in the chops
And that aforementioned Trump impeachment farce leads us to quote excerpts from the following diatribe. This Daisy Cutter passages are exhaled with dragon force by liberal iconoclast James Howard Kunstler. (Hat tip, ZeroHedge.)
I borrowed these excerpts from “The Fumes of Fanaticism,” as published in Kunstler’s aptly named in-house blog, “Clusterf**ck Nation.” I offer them here as background for what’s really perturbing this market 24/7: The craptastic idiocy of the never-ending Trump impeachment farce. It’s brought to you by America’s far-left party of Stalinist thug-o-crats, who generally prefer to call themselves (irony alert) “Democrats.”
Mr Market faces this, and the associated political and hyper-sycophantic media madness every day, and it takes a toll on stocks, bonds and the economy. Which, for the Stalinists, is not a bug, but a feature.
“…the party of impeachment seems to be inhaling way too much gas from the smoking guns it keeps finding in the various star chambersof its inquisition against you-know-who. You’d think that the failure of Mr. Mueller’s extravaganza might have chastened them just a little — a $32 million-dollar effort starring the most vicious partisan lawyers inside-the-Beltway, 2,800 subpoenas issued over two years, 500 search warrants exercised, and finally nothing whatever to pin on Mr. Trump — except the contra-legal assertion that now he must prove his innocence.
“To set the record straight I’m forced to repeat something that these New Age Jacobins seem unable to process: you don’t have to be a Trump cheerleader to be revolted by the behavior of his antagonists, which is a stunning spectacle of bad faith, dishonesty, incompetence, and malice — and is surely way more toxic to the American project than anything the president has done. Every time I entertain the complaints of these angry auditors, I’m forced to remind myself that these are the same people who think that “inclusion” means shutting down free speech, who believe that the US should not have borders, who promote transsexual reading hours in the grammar schools, and who fiercely desire to start a war with Russia.
…Back in The Swamp…
“Meanwhile, how is Rep, Adam Schiff’s secret proceeding going? Last week he put out a narrative that US Chargé d’Affaires to Ukraine Bill Taylor fired a gun-that-smoked fer sure in testimony. Except, of course, as per Mr. Schiff’s usual practice, he refused to issue any actual transcript of the interview in evidence, while there are plenty of indications that Mr. Taylor’s second-hand gossip was roundly refuted under counter-questioning by the non-Jacobin minority members of the House [I]ntel Committee. Mr. Schiff’s pattern lo these many months of strife has been to claim ultimate proof of wrongdoing only to have it blow up in his face. It’s a face that many Americans are sick of seeing and hearing from, and I am serenely confident that before this colossal scandal is resolved, the Congressman from Hollywood will be fatally disgraced, as was his role-model, Senator Joseph McCarthy, before him.”
That last sentence clinches this piece. Amen! Hallelujah!
From jeers to cheers with Tom Bosley’s positive outlook
On a more positive note, in a free column, Stockcharts.com contributor Tom Bowley offers the following, more bullish observations, offering a chart to help make his point.
“Anyone who has followed my work for the past decade knows that I’ve remained steadfastly bullish despite all the negative media rants. Follow the charts. There is no recession. The economy will strengthen. We’ll get a trade deal. Heck, even the Fed is finally on board and lowering rates as they should have been doing a year ago.
“A few weeks ago, I spent some time doing a Q4 market outlook for EarningsBeats.com members and I laid out the path to substantially higher prices. It’s starting to happen and it’s going to happen. I see 3200+ on the S&P 500 by December 31st and here’s the pattern that gets me there[.]”
Check out that chart.
What you’re seeing here is a one-year chart of the broad-based S&P 500 average looking to break out from a market top that’s constrained this average since it last bottomed out in early June. With its rising channel, could the third attempt be the charm? Indeed, the average briefly broke out yesterday before pulling back, as averages often do at this point in a breakout move. Investment dictionaries call this “retracement.” It’s potentially good news. But tomorrow’s Fed results could torpedo it in a New York minute. Or another last-minute failed trade non-deal with China. Or more farcical chunks of merde hurled from Shifty Schiff’s Trump impeachment farce.
Nearing Tuesday’s closing bell…
This average is stalling again today. And indeed, it could fair for a third time this week, which would not be good. The Fed could do it, for example, by NOT cutting interest rates another 0.25% tomorrow. Or, the Chi-coms could change their minds (again) and tell the Administration to pound sand on a new trade deal.
But if stuff like this doesn’t really happen, Bowley could prove triumphantly correct in his observations.
Stay cool, keep an eye on Mr Market, and don’t believe a damned thing you see on CNN.
— Headline image: Fun with the Fed. Cartoon by Ben Garrison. Reproduced to fit CDN format. Presented with permission and by arrangement with Ben Garrisson via grrrgraphics.com.