WASHINGTON –Wednesday’s markets ended up rallying despite Iran’s ineffective retaliatory attack against US / Iraqi military bases. Thursday action has been much the same. Almost overnight, traders, investors, financial analysts, media hacks and Democrats alike have suddenly stopped ringing their fake WWIII alarm bells. It’s seems we’re not all dead yet or about to be after all. In fact, US markets seem like they’re back in irrational exuberance mode.
CNBC catches us up on the latest Wall Street action as WWIII recedes
“Stocks rose to record highs on Thursday as tensions between Iran and the U.S. eased for the time being, with tech shares outperforming.
“The Dow Jones Industrial Average traded 194 points higher, or 0.7% and inched closer to reaching 29,000 for the first time. The S&P 500 climbed 0.6% while the Nasdaq Composite gained 0.7%.
Apple soars again
“Apple shares jumped 2% to a record high after Chinese government data showed that iPhone sales rose 18% in December in the country. The S&P 500 tech sector rose 1%, led by a 2.2% gain in AMD shares. The chipmaker rose after an analyst at Mizuho Securities upgraded them to buy from neutral, citing a potentially stronger server market in 2020.
“Goldman Sachs climbed 2.1% to boost the Dow after Bank of America upgraded the bank to buy from neutral, citing an attractive valuation and the benefits of a possible global economic rebound.
“Boeing, meanwhile, gained 1.5% after President Donald Trump said he doesn’t believe a 737 crash in Iran was due to a mechanical error.”
News cycle dominates Wall Street trading action. Again.
The Iran news and speculation festival continues to dominate the news cycle. Meanwhile, the House-Senate impeachment kabuki operates in background. It more closely resembling French theater of the absurd with each passing day.
And the absolutely sure, totally for-real January 15 signing of the Phase I US-China trade agreement is sneaking up on us in background. Despite the frantic media glitterati surrounding the US vs Iran thriller, and despite the continuing bug-eyed impeachment insanity spouted daily by Madame Speaker and Schiff-for-brains, we still think that the lurking uncertainty surrounding that in-the-bag China deal is what’s more likely to terminate the irrational exuberance spurring this impossible January stock rally to ever-higher heights. No WWIII here yet.
Ukraine airline crash. Whodunit? Boeing, Iran, or Trump?
Back in the Middle East, another sideshow seems to be developing. One we briefly mentioned above. This item involves the Boeing-built Ukrainian airliner that crashed moments after takeoff from Tehran’s airport, purportedly due to some kind of mechanical failure. Which, of course, the media is likely to buy, given what happened to that pair of 737 MAX jets last year.
But, at least for today, it seems that Boeing might be off the hook for this tragic crash, which apparently took the lives of all aboard. Instead, we have a surprising new villain: Iran. Or maybe even somebody else, as ZeroHedge reports.
ZH on the Boeing 737’s (perhaps) mysterious crash
“With the narrative surrounding the crashed Ukrainian Boeing 737 changing by the minute, shifting away from a initially proposed theory of a technical error and shifting toward speculation the plane was accidentally or not taken down by someone (Iranians? Israelis? CIA?) on the ground, ‘evidence’ is suddenly starting to emerge to validate this latest theory. And so moments ago, an unverified, unconfirmed video has appeared on the Telegram network, purporting to show the moment a missile strikes the Ukrainian flight PS752.”
Here’s a CBS TV update on the story.
So the plot sickens.
The media and the Democrats would like to pin this extra-added Middle East tragedy on Donald J Trump as well all the rest of it, including that fast receding vision of WWIII. The latest Iran or Iran Proxy attack on a US embassy didn’t turn out the way Benghazi-gate did. (Much to the Socialist Party’s chagrin.) Few opportunities for headline spin here.
Maybe the House Democrats could turn the Ukraine Plane Incident into another Cloud Cuckoo Land impeachment charge. That is, before Nasty Nancy turns the whole charade over to Cocaine Mitch and the “unfair” Republicans currently in charge of the Senate. If she ever does. No irrational exuberance for impeachment in Mitch’s house. Too bad.
These Democrats are bat-s__t crazy. Their irrational exuberance involves the allegedly increasin odds of reversing Election 2016, as their secular god seems to have ordained. Which is probably why Wall Street isn’t listening to them anymore. No WWIII here folks. At least not yet. All those lost commercials…
Is Repo Man stalking the bulls yet again?
Other things continue to operate in background. But nothing, so far, has stopped the current rally entirely in its tracks, which has even this generally bullish columnist a bit nervous. Weird things are happening in background, like the continuing mad panic going on behind the scenes as the Federal Reserve keeps dropping helicopter-loads of greenbacks on the constantly insatiable repo market, a market that almost no one, save for major banking institutions, really understands.
Bottom line: we remain cautious, but still nearly fully invested, although nearly half of our portfolios now are currently invested in various preferred stock issues. But even here, we have problems. All the juicy preferreds seem unusually vulnerable to early calls these days. That’s probably because the issuers can immediately place another big issue at a much lower coupon to re-fund their massive tranches of rolling debt.
Hell, if you and I could do this almost overnight, we’d do it too. But frankly, we little investors would rather be carrying those old, terminated, 8-9% yielding preferred for new ones that don’t even make it to 6%. The Lord giveth, and the Lord taketh away. But in the magical world of preferred stocks, He seemeth unduly predisposed to taketh away. At least He also tooketh away WWIII. For now. Maybe Nancy’s irrational exuberance, re: impeachment, is next.
To wrap things up, US markets closed nicely up – again, at Thursday’s closing bell. The Dow closed up an impressive 211.81 points for a 0.74% gain. The S&P 500 did almost as well, closing up 21.65 points for a 0.67% gain. And the tech-heavy NASDAQ chugged along with a 74.18 point gain on the day, an impressive 0.81% gain from Wednesday’s action.
Both the Dow and the Nazz were fired up. Once again, that quantum leap was caused by Apple (trading symbol AAPL). The iCompany has been on a nonstop, 5-G iPhone, speculative rally for several months. We don’t want to contemplate what happens to Apple’s shares if the company doesn’t cough up those 5-G models this September.
See you tomorrow. There’s gotta be a correction in here somewhere.
– Headline image: Cartoon by Branco. Reproduced with permission and by arrangement with Legal Insurrection.