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US Close: Stocks diverge, Markets await US CPI data, DC debates Biden’s Bill and Debt Ceiling

US stocks were initially boosted on optimism that house Democrats were only going to deliver a modest tax increase and as some hedge funds threw in the…

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This article was originally published by Market Pulse

US stocks were initially boosted on optimism that house Democrats were only going to deliver a modest tax increase and as some hedge funds threw in the towel with their bearish bets on technology stocks.  Today, was a big day for many New Yorkers as schools opened.  The success of schools staying open over these next few months could be the key for whether the economy reaches further substantial progress in the labor market recovery.  The stock market rebound however was short-lived after COVID vaccine stocks plunged after the Lancet publication suggested most people don’t need a booster shot.  Pfizer, Moderna, and Johnson & Johnson shares all sold off.  Investors don’t want to have massive positions before the inflation data as the risks are to the upside as COVID inflation continues to hamper supply chains.  If inflation comes in hotter-than-expected, taper expectations could shift from December to November.

The drama unfolding in Washington DC over Biden’s $3.5 trillion economic package and the debt ceiling will be dragged out over the next couple of weeks.  Eventually the Democrats will get their conservative members on board, but perhaps the plan’s size falls to $2.5 trillion.  Optimism is high that Congress will deliver infrastructure and a spending plan over the next few weeks.  Despite another Chinese tech crackdown, risk appetite is minimally dragged down.  Wall Street is getting more pessimistic over the short-term and that might be what is needed to help get stocks back into their record setting mode.

The S&P 500 index finished 0.36% higher and the Nasdaq barely eked out a gain at 0.06%, while the Dow Jones Industrial Average outperformed with a 0.76%rise.

Economics

US stocks march on, lifted by business optimism

Benchmark US indices closed higher for the second consecutive day on Thursday September 23 lifted by positive sentiments from Fed s economic outlook…

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Benchmark US indices closed higher for the second consecutive day on Thursday, September 23, lifted by positive sentiments from Fed’s economic outlook.

The S&P 500 was up 1.21% to 4,448.98. The Dow Jones rose 1.48% to 34,764.82. The NASDAQ Composite rose 1.04% to 15,052.24, and the small-cap Russell 2000 was up 1.82% to 2,259.04.

Traders ignored the weak unemployment data released by the Labor Department on Thursday, which showed new jobless benefits claims rose by 16,000 to 351,000 in the week ended Sep 18.

Economists consider the rise in benefits claims to be because of Hurricane Ida and forest fires and not due to flawed policy action. On Wednesday, the Fed said that it might start withdrawing stimulus support from November. The statement raised confidence in the economic recovery.

Financial stocks were among the top movers on S&P 500 Thursday, while energy and real estate stocks declined. Stocks of BlackBerry Limited (BB) rose 12.08% a day after reporting quarterly results. Its revenue rose to US$175 million in Q2, FY21, from US$174 million in the year-ago quarter.

Accenture plc (ACN) stock jumped 2.63% after reporting its fourth-quarter results. Its net income was up US$1.43 billion from US$1.30 billion in the same quarter of the previous year.

Salesforce.com, Inc. (CRM) stock rallied 7.38% after it raised the full-year revenue guidance. It expects its FY 2022 revenue to be US$26.35 billion, up from its earlier forecast of US$26.3 billion.

In the energy sector, Exxon Mobil Corporation (XOM) rose 3.58%, Chevron Corporation (CVX) gained 2.51%, and ConocoPhillips (COP) gained 2.45%. Kinder Morgan, Inc. (KMI) and EOG Resources, Inc. (EOG) advanced 2.51% and 2.76%, respectively.

In the consumer discretionary sector, Nike, Inc. (NKE) increased by 1.26%, Starbucks Corporation (SBUX) gained 1.25%, and General Motors Company (GM) rose 2.24%. Ross Stores, Inc. (ROST) and Hilton Worldwide Holdings Inc. (HLT) ticked up 1.62% and 4.30%, respectively.

In financial stocks, Berkshire Hathaway Inc. (BRK-B) rose 1.65%, JPMorgan Chase & Co. (JPM) jumped 3.35%, and Bank of America Corporation (BAC) rose 3.79%. Wells Fargo & Company (WFC) and Morgan Stanley (MS) jumped 1.58% and 2.86%, respectively.

Also Read: Top five communication stocks that rode the Q2 rebound

Also Read: ONTX stock dives 16%, DVAX stock in green after clinical data

US stock indices closed higher on Sep 23 on positive economic outlook.

Also Read: Crypto exchanges Binance vs Kraken: Where would you like to trade?

Futures & Commodities

Gold futures were down 2.05% to US$1,742.40 per ounce. Silver decreased by 1.71% to US$22.515 per ounce, while copper fell 0.48% to US$4.2317.

Brent oil futures increased by 1.38% to US$77.24 per barrel and WTI crude was up 1.37% to US$73.22.

Bond Market

The 30-year Treasury bond yields was up 5.04% to 1.941, while the 10-year bond yields rose 7.71% to 1.434.

US Dollar Futures Index decreased by 0.39% to US$93.100.

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Economics

Culture As An Asset

#CKStrong Stunning. Hedge funds hoovering up trading cards as an “alternative to equities” with the same passion Brooks Robinson hoovered up ground…

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#CKStrong

Stunning. Hedge funds hoovering up trading cards as an “alternative to equities” with the same passion Brooks Robinson hoovered up ground balls?

This is usually a sign of the endgame for markets, i.e,, the precursor to a bear market. Think the “Great Beanie Baby Bubble” of 1999.

In general, there are two types of assets,

  1. They can be rare—gold bars, diamonds, houses on Victoria Peak, bottles of 1982 Pétrus, Van Gogh paintings, stamps, beanie babies, or Baseball cards or
  2. They can generate cash flows over time  – GaveKal

Creating An Illusion Of Scarcity

Scarcity relative to the money stock is what its all about now, folks. 

It probably won’t be long before the Fed has to bailout the baseball card market, no?

Full disclosure,  I do own a Mike Trout rookie card

Given the extreme valuations of all most all asset classes, coupled with the massive amount of money in the global financial system, markets are now really stretching, looking for, and actually attempting to create scarcity as a useful delusion to rationalize and drive speculation. 

Maybe I will start collecting poop as an “anthropological asset,” put it the blockchain, and super charge the price ramp by snapping a pictures of each sample and converting them to NFTs?

Then again, maybe all this is signaling the start of a big, big inflation cycle?  

Can you believe it, folks? 

 

 

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Precious Metals

“It All Depends On One Word – Trust” – John Rubino Warns “Worst-Case Scenario Too Horrible” To Consider

"It All Depends On One Word – Trust" – John Rubino Warns "Worst-Case Scenario Too Horrible" To Consider

Via Greg Hunter’s USAWatchdog.com,

It…

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"It All Depends On One Word - Trust" - John Rubino Warns "Worst-Case Scenario Too Horrible" To Consider

Via Greg Hunter’s USAWatchdog.com,

It looks like we are on track for yet another global financial meltdown.  This time it is coming out of China in the form of a failed property development company called Evergrande.  It’s five times bigger than Lehman Brothers, whose failure cratered the global economy in 2008.  Will central banks, including the Fed, just let it all fail or will they print massive amounts of money trying to stop the fall?   If history is a guide, we should get ready for the most money creation ever. 

In May, financial writer John Rubino said, “This is beyond the ability of any individual to fix.  We can’t save the system.”

We sure can print a lot of money to try though.

Massive global money printing is what is coming, and it will come with huge consequences for all fiat currencies.  Rubino explains,

“Stocks are tanking, cryptos are tanking, currencies of the world are getting volatile, politics are volatile and gold is going up while all this is happening, which it is supposed to do.  Gold is supposed to be the safe haven where you hide out when nothing else seems trustworthy...

That hasn’t been the case in prior bear markets.  When stocks tanked, they pulled down gold and silver...

It’s a good sign when markets start to behave rationally again.  When high risk assets don’t seem worth it anymore, capital flows into real assets that hold their value no matter what the government is doing to the currency.  That’s the way it’s supposed to work, and that is the way it is working...

Trust is probably the key word in this whole discussion.  Fiat only exists because we trust the people who are managing them to maintain their value.  You take the trust away and there is nothing there.  A fiat currency is not a real thing.  It doesn’t actually exist other than little pieces of paper that have no intrinsic value or computer code, which also has no intrinsic value.  So, you take away the trust that we had in the Fed, Treasury, Congress and the President to do the right thing, and be honest, when it comes to the financial markets, you take that away and there really isn’t anything there.  Nobody would want to hold a currency managed by people they can’t trust.  Pay attention to that because the less we trust the guys in charge, the less we trust the currency. 

The less we trust the currency, the less we trust the financial markets and the less valuable these financial assets are.  So, it all ties together, and it all depends on that one word—Trust.”

What’s Rubino’s biggest fear?  Rubino warns,

My biggest fear is that we screw up our finances, we screw up geopolitics, and we get into a big war because we are close to that now.  

The U.S., Russia and China are bumping up against each other, and we are like scorpions in a bottle on this little planet with all these high tech weapons. . . . My biggest fear is we take it well beyond the world of finance to no holds barred military action. 

There’s no way to predict anything when you start doing something like that.  The worst case scenario is too horrible to even think about.”

Join Greg Hunter as he goes One-on-One with John Rubio, founder of the popular website DollarCollapse.com. 

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Tyler Durden Thu, 09/23/2021 - 16:25
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