Maybe this is one of the reasons Japan's Abe decided to go visit the war shrine, thinking his "Abenomics" has won...
From January 4 to December 30, 2013:
Japan's Nikkei: up over 50%
Hong Kong's Hang Seng Index: flat
Shanghai's Composit Index: down 8%
South Korea's Kospi: flat
(Chart created at stockcharts.com)
Of course the depreciating currency of Japan has helped a great deal.
Japanese yen, from November 2012 to December 2013:
The Japanese government and the South Korean government have reduced the size of the currency swaps since October 2012 to an insignificant level ($10 billion). Though the South Korean government has since expanded the currency swaps with China, it now has less ammo to cheapen its own currency.
The quantitative easing (QE) that was started in September 2012 will continue at $75 billion a month, instead of $85 billion.
Much like the federal budget forged by GOP's Paul Ryan and Dem Senator Patty Murray, which does nothing of actually reducing deficit but only reducing the rate of deficit increase.
After the initial plunge on the FOMC announcement, the US stock market swung the other direction and ended the day at all-time high (Dow, S&P500):
As yet another sign of great "recovery", the mortgage application plunged to the 13-year low (from Zero Hedge):
Bullish for the stock market!
The Bernanke Fed said:
Reflecting cumulative progress and an improved outlook for the job market...
Cumulative progress of 0.1% taking from 99.9%, and an improved outlook for the job market expressed by the lower unemployment rate, because they stop counting people whose unemployment benefit has run out even though they are still looking for jobs.
The unemployment rate is set to dramatically fall next year, as the Ryan-Murray budget deal is making sure of it by cutting the extended unemployment benefit beyond 26 weeks.
Bullish for the stock market! Just keep buying the risk assets, as almost all bearish investors have thrown in the towel. Even people like Hugh Hendry, who is effectively saying, "Nothing matters but trends."
Japanese yen has turned even lower against US dollar, at 104 yen per dollar. Hello more carry trade.
Nikkei futures (in yen) to 15,895, more than 300 points higher than Wednesday's (Japan time) cash close (15,587):
Economically ignorant Prime Minister Abe (just like his US counterpart) will exclaim, "See, my Abenomics is working!"
I just can't wait.
From Reuters reporting on Wall Street Journal article (3/9/2013):
(Reuters) - The New York Stock Exchange is readying plans to be able to operate without human traders in case another disaster, such as Superstorm Sandy, forces the shutdown of its historic trading floor in downtown Manhattan, The Wall Street Journal reported.
NYSE Euronext (NYX.N) is preparing to submit details of the plan to the U.S. Securities and Exchange Commission, according to the report, which cited people involved in the preparations. If activated, the plan would represent the first time the 221-year-old exchange would rely entirely on computer systems, without the oversight of floor-based traders, the paper said.
A NYSE spokesman declined to comment on the report.
The disaster plan would shift trading entirely to Arca, NYSE's all-electronic sister market. It would replace NYSE's current backup plan that calls for the exchange to remain open in a limited capacity while sending orders to Arca to be filled.
Exchanges including Direct Edge Holdings LLC and BATS Global Markets Inc BATS.Z in the past year have moved to develop backup sites in Chicago, the paper said. Nasdaq OMX Group Inc (NDAQ.O) maintains a disaster recovery site in Ashburn, Virginia, and can run its U.S. markets from its European base in Stockholm.
Superstorm Sandy forced the first weather-related multi-day shutdown of the U.S. stock market in more than 120 years when it struck the East Coast in October.
Congrats, so-called "One Percent" in the US and the world. All the gains since the so-called "Lehman Crash" which may or may not have been engineered by the JPM and Hank Paulson (see Zero Hedge, here and here) have gone to you exclusively.
The rest of us got double the unemployment, nearly double the food stamps between October 2007 and March 2013. The household disposable income has declined, gas price is 36% higher.
Zero Hedge has the nice bullet points comparing the highs, then and now:
"Mission Accomplished" - With CNBC now lost for countdown-able targets (though 20,000 is so close), we leave it to none other than Jim Cramer to sum up where we stand (oh and the following list of remarkable then-and-now macro, micro, and market variables): "we all know it's going to end badly, but in the meantime we can make some money" - ZH translation: "just make sure to sell ahead of everyone else."
Dow Jones Industrial Average: Then 14164.5; Now 14164.5
Regular Gas Price: Then $2.75; Now $3.73
GDP Growth: Then +2.5%; Now +1.6%
Americans Unemployed (in Labor Force): Then 6.7 million; Now 13.2 million
Americans On Food Stamps: Then 26.9 million; Now 47.69 million
Size of Fed's Balance Sheet: Then $0.89 trillion; Now $3.01 trillion
US Debt as a Percentage of GDP: Then ~38%; Now 74.2%
US Deficit (LTM): Then $97 billion; Now $975.6 billion
Total US Debt Oustanding: Then $9.008 trillion; Now $16.43 trillion
US Household Debt: Then $13.5 trillion; Now 12.87 trillion
Labor Force Particpation Rate: Then 65.8%; Now 63.6%
Consumer Confidence: Then 99.5; Now 69.6
S&P Rating of the US: Then AAA; Now AA+
VIX: Then 17.5%; Now 14%
10 Year Treasury Yield: Then 4.64%; Now 1.89%
EURUSD: Then 1.4145; Now 1.3050
Gold: Then $748; Now $1583
NYSE Average LTM Volume (per day): Then 1.3 billion shares; Now 545 million shares
Ah good old October 2007. That was when Google was approaching the then-all-time high. I had a November call option of Google at $750. November came, and it was Nasdaq's multi-year high. Just when Google was about to breach $750, the stock and Nasdaq went haywire, for no apparent cause, taking the other indices with it. The stock market tried to recover in December, but when the Pakistani presidential candidate (Benazir Bhutto) died during her campaign the stock indices started the march downward again. They went down almost every day for the month of January 2008.
(Google went from $747.24 to $412.11 in slightly over four months.)
Investor's Business Daily's IBD/TIPP Economic Optimism Index has plunged to a 15-month low of 42.2. The federal economic policies confidence gauge fell 11% to 35.5, also a 15-month low.
Buoyed and encouraged by the rising stock market that correctly reflects the real market, no doubt, the federal government is giving away aids to Egypt and Pakistan, and hiring new employees.
Because there is always the "next month"! Hope springs eternal in the algo bots' mind (which went haywire earlier today).
The stock markets in the world are dead, as a price and value discovery mechanism. They have been, particularly since Helicopter Ben and Mighty Hank (Paulson, then-Treasury Secretary) pulled off a stunt in the summer/fall of 2008 to directly and openly intervene with the financial markets.
The only noticeable drop is seen in gold (down nearly 1%), with the reasoning that "since the central bank won't inflate anytime soon, risk is off!" The problem with that of course is that the riskiest and fluffiest class of asset (equities) which has defied the gravity remains unchanged. Risk off? What risk off?
From AP (8/1/2012):
Fed says US economy has slowed, takes no new steps
Federal Reserve says US economy has decelerated in first half of year, takes no new steps
WASHINGTON (AP) —
The Federal Reserve says the economy is losing strength and repeated a pledge to take further steps if the job market doesn't show sustained improvement.
The Fed took no new action after its two-day policy meeting. But it acknowledged that economic activity had slowed over the first half of the year, unemployment remains elevated and consumer spending has weakened.
Policymakers repeated their plan to hold short-term interest rates at record low levels until at least late 2014.
Most economists say the Fed is likely to go further at its September meeting by launching another bond-buying program to drive down long-term interest rates.
The statement was approved on an 11-1 vote. Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, dissented for a fifth time this year.
Following the big US dump on Friday last week, Asia opens deep red. The best performing bourse is New Zealand, down only 1%. The worst is South Korea's KOSPI, down 2.60%. Tokyo's Nikkei is down 177 points, or 2.1%.
From Yahoo Finance:
Worse for Japan, despite the Bank of Japan's intervention, yen keeps rising.
The US stock market futures are equally ugly, with Dow futures down 98 according to Bloomberg News.
There are some analysts who have been saying this feels the same as the summer of 2008. We know what came in the fall of 2008.
Trading halted for 20 minutes on Kospi. That means it has dropped 10%. The Korean central bank is stepping in. It feels like a total panic in Asia.
Global sell-off continues.
Hang Seng down 1,500 points.
Nikkei down 390 points.
The consumer price rose by 6.5% in July in China, highest percentage rise in more than three years. In other words, a bad number for the market.
Riots spread all over the country in the UK.
Gold hit US$1,745, and hitting all-time high in other currencies. 1 ounce of gold is 1,225 euro, 134,536 Japanese yen, AU$1,736, 1,067 British pound.
Pandemonium.
It may continue, as my personal contra-indicator (a certain financial network owned by GE) is still trying to spin it positively and bottom-pick. Someone said Bank of America is a buy here.
Ouch. Following Asia and Europe, Dow down 541 points, S&P down 68 points, Nasdaq down 142 points. Gold was as high as $1,721 earlier, now pushed back down slightly to $1,715.
On Tuesday, the Fed will start the 2-day FOMC meeting.
And PPT to the rescue... Dow down only 365 points, 40 minutes left to trade.
.... And ended at the lowest of the day. Dow down 634 points (5.5%), Nasdaq 175 points (6.9%), S&P 80 points (6.7%)
From Yahoo Finance screen as of 12:40PM PST 8/4/2011. Less than 20 minutes to go till the stock market closes.
Some support at 11,000, a bit more solid support at 10,000.
Will the Fed come to the rescue?
Less than 10 minutes to go now, and it's down 513.
The letter delivered to Ben on QE3????
Posted on Zero Hedge (emphasis added; 3/24/2011):
Something rather disturbing from a European trading desk...
TODAY TWO LARGE MACRO FUNDS OVER HERE HAVE GONE WILDLY LONG S&P. NOT LONG. WE TALKING 250% NET LONG. IT LOOKS LIKE CONCERTED ACTION ON GDP DGRADES FROM GS AND BOFA ARE THE LETTER DELIVERED TO BEN ON QE3. HUGE DIRECTIONAL BET WITH NEW CAPITAL PUT AT WORK. MOST LIKELY THE TWO INSTITUTIONS ARE COORDINATING ACTION WITH OFFICES IN CONNECTICUT. CHECK INFLOWS OF BLUE CHIP HEDGE FUNDS IN JAN FEB. APPLY 2.5 LEVERAGE. WE ARE TALKING ABOUT SOME 40-60BN PUT AT WORK PRIMARILY ON EMINIS AT THE MOMENT. WHETHER SOME EXTERNAL FORCE WILL LEAVE THEM HIGH AND DRY I DON'T KNOW. BUT IF ANYTHING SEEMED TO BE AT LEAST NOT TOO IRRATIONAL UP TO NOW, IN THIS THIRD WAVE, BE READY FOR REAL ROCK AND ROLL.
One big rigged casino, I guess always has been. As long as the music is on, you gotta dance, even if the world blows up.
Got gold and silver? They got slightly cheaper today, thanks to CME.
I hate to think how many prop desks blew up. And it's specifically on USD/JPY pair.
From AP (3/18/2011):
TOKYO (AP) -- The yen fell from historic highs Friday after the Group of Seven major industrialized nations promised coordinated intervention in currency markets to support Japan's recovery from a catastrophic earthquake and tsunami.
The G-7 pledge came after the yen hit an all-time high against the dollar Thursday, possibly threatening Japan's exports and hampering its economic recovery from the Mar. 11 quake that triggered an unfolding nuclear crisis.
After the announcement the dollar rose to 81.26 yen fro 79.45 yen, but it was unclear whether that was due to government intervention or to traders reacting to the news. The dollar briefly slumped to 76.53 yen on Thursday -- an all time low for the U.S currency and a record high for the yen.
Japan's Finance Minister Yoshihiko Noda said the government would intervene in the Tokyo market once morning trading opened Friday. But ministry spokespeople declined later to confirm whether that happened.
Noda said the planned intervention was meant to calm "volatility" and G-7 governments had no target exchange rate.
And the Finance Minister of Japan thinks it is still the "market" - an exchange of goods/information - when all that's been propping it up is the government's pledge and will to buy up anything to keep it going.
Japanese newspapers specifically blame "speculators" for the violent move of yen since the earthquake, rather than more or less normal and rational "risk-off" trades such as carry-trade unwind and repatriation of foreign currency back to Japanese yen by the Japanese companies that operate worldwide.
Even the newspaper that should know a little bit better about financial markets, Nikkei Shinbun (in Japanese, 3/18/2011), blames "speculators", and praises the move by G7:
One week after the earthquake and tsunami hit Japan, G7 took a resolute move against currency speculators who disrupt the market...Sad it is that they are going to use the earthquake/tsunami disaster as the financial market "put".
(UPDATE 1:25PM EST) Here we go. Pump is on, for now. Dow recovers to -160.
--------------------------------------------------
After Nikkei dropped more than 1,000 points overnight, the US stock market is sustaining a significant but not so horrendous loss. Dow Jones Industrial is currently down 183; right after the opening it was down almost 300 points. The PPT and dip buyers to the rescue!
Finally a flight to safety and liquidity seem to have arrived, but not necessarily where you may think.
A quick scan of my stock screen shows ETFs on US Treasuries like TLT is getting a bid. TLT is up $1 or 1.17%, for the day so far.
There's another notable stock that has jumped: Netflix, up almost $15 or 7.44%. Goldman Sachs upgraded the stock to "Buy" today, and that seems to be enough for momo investors.
US dollar is FLAT.
Oh by the way, did you know that Ben Bernank and the gang are meeting today? The FOMC meeting results will be out any minute now. I don't think the so-called Fed hawks want to say no to Ben's super accommodating policy at this particular point in time. My guess is QE for eternity. I could be wrong. We'll see in about 3 minutes.
Dow futures -253, S&P500 -28.60, Nasdaq -45.25, as of 11:51PM EST (Bloomberg).
UK's FTSE 100 futures -143
Nikkei Afternoon session is a pure bloodbath: -1,328 to 8,292, down 13%
I heard that Mr. Jim Cramer was bullish on certain stocks, on his daily program. I think he can probably get a quite a bargain on his buy.
(UPDATE) Here comes the dip buyer...Now Nikkei is down only 500 points... And we know who it is: Bank of Japan, who is injecting unprecedented 7 trillion yen ($85 billion) into the money market today.
Well, that's less than one month worth of POMO that the US Federal Reserve is doing..
----------------------------------------
Nikkei opened down 210 at 10,044 but quickly went below 10,000. It is currently trading down 596 at 9,658 as of 9:21AM, 3/14/2011 (Japan Time).
Real-time chart here at Nikkei Shinbun.
The US stock market opens only slightly down. Nasdaq has already turned green.
Japan had a mega earthquake, Libya is in turmoil, Saudis are protesting, the US government is bankrupt, so let's bid up Neflix!
Makes sense, doesn't it? The economy is expanding rapidly. (Thanks, Ben and PPT.)
The stocks that are levitating on my stock screen:
AMZN
NFLX
AAPL
....
Wow the entire screen lit up green just now. Thank you JPMorgue for buying all the Emini futures. Now all the indices are GREEN.
I hate to think how many millions of dollars of taxpayers' money got just blown to achieve this miracle.
Dow Jones Industrial heavy, with smattering of tech stocks. No Netflix, though.
From OpenSecrets.org, as of 2009:
From AP (3/8/2011):
CHICAGO (AP) -- As a historic bull market reaches its second birthday, everyday investors are piling back into stocks, finally ready for more risk and hoping the rally has further to go.
The Standard & Poor's 500 index has almost doubled since March 9, 2009, when it hit a 12-year low after the financial crisis. And the Dow Jones industrials are back above 12,000, about 2,000 points shy of their all-time high.
Little-guy investors appear to be on board. Since the beginning of the year, investors have put $24.2 billion into U.S. stock mutual funds, according to the Investment Company Institute. They withdrew $96.7 billion in 2010.
"It didn't feel right to be back in until now," says Richard Dukas, who heads a public relations firm in New York City. "I still don't want to put all my money in the market, but I believe we've come through the worst of it."
QE2 is a roaring success.
The article cites "improved economy" and "job security" as reasons for retails coming back in, but the real reason is also given later. It's Ben Bernank, basically; they are pushed to take the risk to get a decent return on their money:
One reason to set aside their reservations: They can't find a better place to stash their money. The bull market in bonds has ended, money-market accounts are returning 1 percent or less, and the average two-year CD earns no more than 1.5 percent.
As a result, many investors returning to the market are tiptoeing back in. They're buying what Trennert calls "stocks that look like bonds" -- dividend-paying blue chips that they hope will hedge their risk by guaranteeing at least a dividend payout.
'Dumb money' has been entering the stock market since Ben Bernank started QELite, and then QE2. As one of the purposes professed by Bernank is the rising stock market that instill CONfidence in the general populace, he is succeeding. Perception is everything. Reality? What reality?
The stock market remain high into the close, but the volume doesn't seem to be matching the out-sized gains. The only players? HFT bots.
Which way is it gonna be tomorrow, up or down? Place your bets on the non-farm payroll (NFP) number from your trusted government!
Here's a good one from J.P.Morgan Chase, Gaddafi's banker:
“All the stars seem to be aligned for a stronger number,” said Anthony Chan, chief economist for J.P. Morgan Chase’s Private Wealth Management group.
It's in the stars, people! Laugh and be merry, everything is great.
Chart of S&P futures, from Zero Hedge:
The Fed's unofficial third mandate is to keep Dow Jones Industrial levitating and gold and silver down (so that JPM and HSBC can survive another day shorting silver).
Dow's "strength" is due to:
Disney (up 1.7%)
3M (up 1.9%)
HP (up 2.5%)
Pfizer (up 1.9%)
Verizon (up 1.5%)
Notable laggards in Nazdaq (which is down for the day so far, by the way):
Amazon (down 2.4%)
Netflix (down 4%)
Intel (down 1.9%)
(At least my puts on AMZN is a modest success today...)
Small/mid cap (Russell 2000) is down, along with Nazdaq. Economy is growing, Mr. Dudley?
And still no bid on US dollar.
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