WASHINGTON, March 19, 2014 – As far as stock market bulls are concerned, new Fed Chief Janet Yellen flunked her first press conference today, first by announcing another $10 billion cut in the Fed’s QE monthly bond purchasing program, and next by musing that interest rates could start rising in just six months.
The former observation had been widely expected. But when traders, who expected interest rates to stay near zero through at least December suddenly heard that rates might pop in September or so, it was Katy bar the door. The Dow, which had been generally up in the morning, albeit tepidly, dramatically reversed course, hitting a downdraft that took the DJI down 180 points before catching its breath to reflect.
As of 3:30 p.m. EDT, the Dow has recovered somewhat, down 125, but you could feel the panic in the trading. The market was already made uneasy over the weekend by Russia’s dangerous shenanigans in Crimea, although averages made a nice recovery yesterday when the
Soviet Union’s Russia’s Dear Leader President Vladimir Putin assured the world that he had no further plans on any more Ukrainian Territory.
Markets promptly breathed a profitable sigh of relief, although the Maven seemed to recall that someone named Adolf once promised he’d behave if he could only have the Sudetenland. Does anyone in this world remember anything prior to Y2K any more?
In any event, volume to the upside has been quite light of late, indicating a lack of conviction. And, if you peered around the corner, you could see bigwigs everywhere quietly hitting the sell button throughout February and through the Ides of March no matter what they said in public. If markets are currently scared of what amounts to a return to more or less normal business, markets are very weak indeed.
Fed governors will likely have to walk Yellen’s off-the-cuff comment on an early interest rate rise for the rest of the week. Collectively, the Fed has more or less pledged to hold rates steady and near zero through the end of the year. But, particularly in this Administration, you never know what’s coming next.
It’s ironic, perhaps, that amid all the clatter, sturm, und drang, not much is being said about the miserable plight of the average American worker, except the current diversionary minimum wage nonsense spewing from the Senate and the White House, all the better to obscure the ongoing disaster of Obamacare. Minimum wage hikes mean little because A. they end up cutting back even more people to part time employment and/or B. the currently unemployed aren’t going to get any wage anyway.
But Washington no longer cares about the average voter because he and she do what they’re told and vote the way their betters tell them to. They don’t seem to have made the connection today between the death of the middle class and the destruction of the American worker by the benevolent Democrats who pretty much run everything today along with their crony capitalist friends. It’s all kind of ironic, particularly on a day like today, March 19, the Feast of St. Joseph, the patron of workers everywhere (except maybe Tehran or Mecca).
We marvel at how much BS the voting public takes from Washington politicians these days. Perhaps the once-mighty U.S. has indeed become a nation of sheep.
In any event, the Maven is back at his usual level of disgust this week with how things really are. And so, once again, he has no trading recommendations today, aside from not selling into this initial post-Yellen bear free-for-all.
We’ll be back this week when we have a clearer picture, although that may be tough as it’s also options expiration week. Stay tuned.Click here for reuse options!
Copyright 2014 Communities Digital News
• The views expressed in this article are those of the author and do not necessarily represent the views of the editors or management of Communities Digital News.
This article is the copyrighted property of the writer and Communities Digital News, LLC. Written permission must be obtained before reprint in online or print media. REPRINTING CONTENT WITHOUT PERMISSION AND/OR PAYMENT IS THEFT AND PUNISHABLE BY LAW.
Correspondingly, Communities Digital News, LLC uses its best efforts to operate in accordance with the Fair Use Doctrine under US Copyright Law and always tries to provide proper attribution. If you have reason to believe that any written material or image has been innocently infringed, please bring it to the immediate attention of CDN via the e-mail address or phone number listed on the Contact page so that it can be resolved expeditiously.