Stock Market Overview:
Stock futures are down after Friday and Monday’s steep sell-off. Clearly, sellers remain in control of this market as the major indices continue to get smacked. On Monday, the Nasdaq Composite and Nasdaq 100 broke below support of their bearish flag patterns we highlighted for you last week. These are very weak patterns and suggest lower prices will likely follow for the bear market we are seeing in stocks. Gary called the top perfectly for you in the latter half of 2015, helping you sidestep this year’s brutal sell off.
Gary’s Thoughts: We were actually hoping yesterday’s late rally could lead to some upside today. Nothing doing! Our big report explains it all. Lots of rot showing up around the globe.
- NFIB Small Business Optimism Index 6:00 AM ET
- Redbook 8:55 AM ET
- JOLTS 10:00 AM ET
- Wholesale Trade 10:00 AM ET
Highlights Of The Day:
- Steep selling continues on Wall Street
Gary’s Thoughts: Unabated right now!
- Chipotle Closed Stores on Monday For Safety Measures. Company Starting Program to Help Farmers Ensure Safety of Food
Gary’s Thoughts: They had better get a good hold of this because a next time will not be good!
- Taiwan Quake Toll Climbs to 26 as Rescuers Search Rubble
Gary’s Thoughts: Only prayers!
“CALLING KEVIN BACON…”ALL IS WELL!”
By Gary Kaltbaum
Fox News Business Contributor
So…now we are hearing about global growth concerns. Thanks so much! The markets knew it a long while back.
For years, our number one motto has been “it’s never bad until the market says so.” We have had this motto because underneath the surface of a market going higher, it had been evident to us that the termites were eating away at the markets and the economy around the globe. It is not until the markets act up that there is trouble. Remember…Lehman, Bear Stearns, Merrill, Countrywide and the rest did not go out of business…the markets put them out of business! Who are these termites? It’s all the governments and central banks that believe you can grow your way out of trouble through more debt, more printing of money and now, negative rates. These people have continued to unabatedly interfere with free markets as well as the hard work of the citizenry. Throughout all this nonsense, we have simply posed the question to you dozens of times and that is “what is going to be the ultimate outcome of massive debt, massive leverage, the printing of money, 0% rates and now negative rates? You know what we thought the answer was going to be.
In case you did not know, nothing changed with Greece. They just cut another credit card to get them out of the news. Nothing changed here! They just printed $5 trillion, took rates to 0% and grew debt by another measly $8 trillion. Don’t worry! They got it covered! It’s never bad until the market says so! Well, markets are finally saying so. And frankly, we are not so sure these geniuses running governments and central banks can do anything about it now. You just can’t keep going deeper into negative rates…or maybe you could. You can’t keep printing money or maybe you could. You can’t keep going into more debt or maybe you could. The problem is that eventually, you get diminishing returns and those diminishing returns may just be at hand.
Tale of the tape:
Emerging markets plunge.
U.S. markets now plunge. (The NASDAQ is down almost 15% this year and it is early February!)
European sovereign risk soaring.
Markets no longer reacting well to all the easier money talk. Japan markets crushed after going negative rates!
Greek bond yields soaring. Remember Greece?
Credit spreads are blowing out.
Banking stocks both here and more around the globe whacked.
$7 trillion of debt now have negative rates.
We can go on but we know you are eating breakfast. Many are now agreeing with what we told you months ago and that markets were telegraphing not only slowdowns but downright recessions and our big worry remains…with so much leverage and debt again built up by the crazies and with rates already at 0% and a ton in the negative, what will these geniuses come up with next? We pray they do not come up with something new as anything they do will only exacerbate a situation that they created in the first place.
We constantly tell you we hope we will be wrong about all this but more evidence continues to come in that the can that was kicked down the road has no road left!
Keeping fingers crossed!
Stock Market Commentary:
Stocks fell hard on Monday but pared losses by the close. It was still an ugly day as many names were beaten up badly. The Nasdaq Composite and Nasdaq 100 broke down below support of their bearish flag patterns (highlighted last week). The Small-Cap Russell 200 also broke below January’s low which is not ideal for the bulls. Oil prices fell over 3% on Monday and that continues to hurt sentiment. There was virtually no meaningful economic data on Monday from the U.S.
Gary’s Thoughts: After a 7.3% drop in the Nasdaq from Thursday’s high to today’s low, maybe…maybe that’s enough for this second…maybe. Remember, these wild swings do not change the big picture. More carnage in tech, growth and beta. Gold/silver another good day but overbought. Definite bullish patterns now in gold/silver…but only on pullbacks now.
“Mr. President…You Forgot To Mention A Few Things!”
By Gary Kaltbaum
Fox News Business Contributor
While my President was out this week patting himself on the back and taking victory laps over the “supposed” 4.9% unemployment rate, he forget to mention a few important tidbits about what is really going on. We used to call them termites…the termites that were eating away at the economy because of foolish monetary policy by assinine central banks and even worse policy emanating out of this administration…but they are no longer just termites. The eating away of the economy has given rise to serious problems already front and center as well as the problems to come. But there was no mention of these FACTS by my President! It is simple! You cannot “easy money” your way to longer-term economic Shangri-la. You cannot tax and spend your way into a longer-term strong economy. You cannot create massive amounts of mandates, regulations, fees, fines and all that crap and turn it into longer-term strength that will feed on itself.
My President forgot to mention:
The labor participation rate has conveniently continued to crash since the administration took over enabling the unemployment rate to be lower than reality!
This administration and the economy has been the recipient of 0% rates since becoming President…the recipient of $4 trillion-plus of printed money here and depending on the abacus you are using, $15-20 trillion of printed money around the globe…leading to a responding market to all the printed money creating a faux wealth effect that now goes into reverse. Very simply, the easiest monetary policy in the history of time!
Deflation almost everywhere except for your healthcare premiums and deductibles.
GDP under 1%.
The Baltic Dry Index hitting another new all-time record low.
U.S. factory orders that have now dropped for 14 months in a row.
Orders for class 8 trucks (the big ones) declining a measly 48 percent from a year ago.
Junk bonds continuing to crash!.
The Restaurant Performance Index falling to the lowest level since 2008.
A major slowdown in rail traffic!
Corporate profit margins peaking during the third quarter of 2014 and heading lower since.
Food stamp beneficiaries…at or near all-time highs.
Welfare spending…a measly $1 trillion/year through over 80 different federal programs.
Wal-Mart is closing 269 stores, including 154 inside the United States.
KMart is closing dozens of stores.
JC Penney shutting down almost 100 stores.
Macys shutting 36 stores.
The Gap closing 175 stores.
Aeropostale clsoing 84 stores.
Finish Line closing 150 stores.
Sears shutting 100s of stores.
Massive sales and earnings misses by Kohls, Bed Bath and Beyond, Best Buy, Ralph Lauren and many others. All this while oil prices have crashed.
And of course:
Creation of $8.4 trillion of new debt under your watch! That’s over and above the already assinine amounts of taxpayer dollars you receive. That’s after you saying you would go line by line through the budget to root out all the waste and stating you would cut deficits in half.
Despite you saying you lowered the deficit by 50%, you forget to mention it was you who inflated the deficit in the first place.
The CBO now says deficits are going to double to back over $1 trillion/year very soon…and total debt will head into the high $20s (trillion)!
Lastly…the markets. The markets, being a great forecaster of the future…well, let’s hope this time the markets are wrong!
Mr. President, we wish we could say you are leaving us with a rotting economy…but we are worried we are past the point of rotting as you leave this country much more in debt than when you came in. Anyone can become rich by getting an infinite amount of credit cards and maxing each one out before receiving the next one. It just never ends well. Someone always pays in the end!
Stock Market Commentary:
Stocks opened lower on but closed higher on Thursday as the US dollar continued to fall gold continued to bounce. Oil prices fell and closed lower on Thursday after encountering resistance near January’s high. More stocks gapped down after reporting lousy numbers. Shares of Ralph Lauren plunged over 20% after reporting a disappointing quarter. Shares of GoPro (GPRO) tanked over 7% after the company lowered their 2016 outlook. In Europe, Shares of Credit Suisse ($CS) plunged to the lowest level since 1991 after the bank posted its first full-year loss since 2008. Shares of Deutsche Bank ($DB) also plunged to the lowest level in over a decade and both stocks are trading below their 2008 lows! That’s with the European Central Bank printing billions of dollars every week to stimulate markets and their lackluster economy.
Gary’s Thoughts: Mixed bag of slop with huge gaps to the downside in LNKD and DATA after the close. Does not thrill that big retail like LB,KSS,RL and others continue to implode. Even with some rotation today, we remain less than thrilled.
“CENTRAL BANKS NEVER STOP!”
“One thing I think we can say with more confidence is that financial conditions are considerably tighter than they were at the time of the December meeting, So if those financial conditions were to remain in place by the time we get to the March meeting, we would have to take that into consideration in terms of that monetary policy decision,”
He then went on to say:
Additional strength of the U.S. dollar could have “significant consequences” for the U.S. economy.
You all know what happened next! The dollar started breaking down as the bet easily now is to NOT raise rates! So:
Stock Market Overview:
Stock futures are down before Thursday’s open. After falling over 11% on Monday and Tuesday Oil prices soared over 8% on Wednesday as the US dollar experienced a huge single day decline. The major averages remain in lousy shape and continue to go nowhere fast as they pause to digest last month’s steep decline.
Gary’s Thoughts: Central banks continue to interfere. Report to follow!
- Chain Store Sales[Bullet
- Eric Rosengren Speaks 2:15 AM ET
- Challenger Job-Cut Report 7:30 AM ET
- Jobless Claims 8:30 AM ET
- Productivity and Costs 8:30 AM ET
- Gallup Good Jobs Rate 8:30 AM ET
- Rob Kaplan Speaks 8:30 AM ET
- Factory Orders 10:00 AM ET
- EIA Natural Gas Report 10:30 AM ET
- Fed Balance Sheet 4:30 PM ET
- Money Supply 4:30 PM ET
- Loretta Mester Speaks 5:00 PM ET
Highlights Of The Day:
- US dollar suffers huge single day decline.
Gary’s Thoughts: Central banks!
- Shkreli Lost $40M in his E-Trade Account
Gary’s Thoughts: Assclown!
- Buffalo Wild Wings Tumbles on Report of Illnesses in Kansas
Gary’s Thoughts: Not the wings!