…S&P 500 and Nasdaq Comp hit record highs. Jerome Powell at Jackson Hole says economy is strong; Fed will be slow and steady moving forward. Trump Organization and Foundation under investigation. Weisselberg and Pecker have immunity. North Korean peace not happening. Godspeed John McCain. Financial Review by Sinclair Noe for 08-24-2018 DOW + 133 = 25,790 SPX + 17 = 2874 NAS + 67 = 7945 RUT + 8 = 1725 10 Y + .01 = 2.83% OIL + .74 = 68.57 GOLD + 20.70 = 1206.30   The S&P 500 index finished at an all-time high on Friday, snapping a 145-day run without a record close. The Nasdaq Composite also closed at a record high, the first in about a month. The Dow, however, remains about 3% short of its all-time closing high hit Jan. 26. Of the past 20 S&P 500 corrections, only two lasted more than 100 trading days. The average correction length since the inception of the S&P 500 is 51 trading days. The longest stretch in correction territory ever was a period of 229 trading days that ended in 1978.   While it is certainly difficult to buy into record highs, we are reminded that a trend in place is more likely to continue than it is to reverse. Right now, the trend on Wall Street is up. How much higher can it go? No idea, but a trend in place is more likely to continue, until it doesn’t.   Federal Reserve chair Jerome Powell ...

…If impeached…, US-China trade war gears up. Trout fishing in Wyoming. No more SALT. Email it in Financial Review by Sinclair Noe for 08-23-2018   DOW – 76 = 25,656 SPX – 4 = 2856 NAS – 10 = 7878 RUT – 5 = 1717 10 Y un = 2.82% OIL + .08 = 67.91 GOLD – 10.70 = 1185.60   Stocks closed lower, with almost all S&P 500 sectors falling. Trading volume was low, which is fairly typical for the dog days of August. In an interview with Fox News this morning, Trump said that if he is impeached, he thinks the market would crash and everyone would be poor. On political prediction site PredictIt, the odds of a Trump impeachment hit a three-month high, with the current odds of it happening by the end of 2019 sitting at 37% and the probability of it happening sometime within his first term at 45%.   On Tuesday, Trump’s former campaign manager Paul Manafort was found guilty on 8 charges of tax evasion and bank fraud; a mistrial was declared on 10 other counts as one lone juror held out for acquittal. Also on Tuesday, Trump’s personal lawyer Michael Cohen pleaded guilty to 8 counts, including illegal campaign contributions made “at the direction of a candidate for federal office.” These campaign violations involve payments made to adult film star Stormy Daniels and Playboy model Karen McDougal. Trump was not named in the charges against Cohen but he was tentatively identified as ...

…Trump confirms hush money payoff. Wall Street looks away. Fed minutes point to September rate hike. More tariffs against China tomorrow. Existing home sales stall. Target earnings on target. Lowes earnings good but not strong. Facebook plays whack-a-mole. Financial Review by Sinclair Noe for 08-22-2018 DOW – 88 = 25,733 SPX – 1 = 2861 NAS + 29 = 7889 RUT + 4 = 1722 10 Y – .02 = 2.82% OIL + .21 = 68.07 GOLD – .20 = 1196.30   So yesterday was an eventful news day. Trump suffered one of the worst days of his presidency as Michael Cohen, his former personal attorney, pleaded guilty to a number of charges and said he had acted at Trump’s direction to make hush payments to two women in violation of campaign finance laws. The same day a federal jury convicted former Trump campaign manager Paul Manafort on tax and bank fraud charges. But the legal turmoil caused barely a ripple on Wall Street. Stocks teetered between small gains and losses. Wall Street can’t seem to figure out the severity of the legal problems, and what happens next. Give it some time.   Today, during an interview on Fox News, Trump repeatedly emphasized that the hush money payments at the center of Michael Cohen’s guilty plea were not made with campaign funds. There’s just one problem: That doesn’t exonerate him at all. In context, Trump appeared to be trying to say that this exonerates him, but the opposite is the ...

…This bull market now the longest in US history. Manafort guilty. Cohen pleads guilty and implicates Trump in election violations and obstruction. Microsoft says Russians continue to hack. Financial Review by Sinclair Noe for 08-21-2018 DOW + 63 = 25,822 SPX + 5 = 2862 NAS + 38 = 7859 RUT + 19 = 1718 10 Y + .02 = 2.84% OIL + .89 = 67.32 GOLD + 5.40 = 1196.50   New intraday record highs for the S&P 500, the Dow transports, and the Russell 2000. The S&P 500 hit an intraday high of 2873. The record closing high for the S&P is 2872. The Russell 2000 rallied to an intraday record of 1,722. The Dow Jones Transportation Average hit an intraday peak at 11,475, marking the transport gauge’s first high since Jan. 16. The Dow industrials and the Nasdaq Composite are getting closer to record highs.   Since March 9, 2009, which marked the low of the financial crisis and which many consider the birth date of the current bull market, the S&P 500 has advanced 320%, the Dow Jones Industrial Average has risen 286% and the Nasdaq Composite has gained 521%. This bull market is 3,453 days old – the longest running bull in US history. Age isn’t very relevant when trying to anticipate what lies ahead. More relevant are things like valuation, the health of the economy, the geopolitical landscape, and the mood of consumers and investors. The best performing stocks of the bull market are ...

…Longest bull market can’t shake the correction. China-US trade talk talk. Trump wants cheap money Fed. Greece finishes bailout era but not out of the austerity era. DOW + 89 = 25,758 SPX + 6 = 2857 NAS + 4 = 7821 RUT + 5 = 1698 10 Y – .05 = 2.82% OIL + .17 = 66.60 GOLD + 5.50 = 1191.10   The Dow Industrial Average entered correction territory on Feb 8, when it dropped 10% from its recent peak. Since then, the Dow has failed to trade 10% above the closing low of 23,533 hit on Mar. 23. The Dow has been in correction territory for a long time, but it might be on the verge of a break out with a close above 25,886, or you could look at the previous high of 26. Or that previous high of 26,616 from January 26. Both levels will provide resistance. Also, just because the Dow and S&P are into correction territory, it doesn’t mean the end of the bull market. The bull market turns 3,453 days old this Wednesday. Barring a 20 percent decline between now and then, it would mark the longest bull market in history. A correction can be nothing more than the pause needed before the market pushes higher. This is the long way of saying the markets haven’t moved yet – we are still in a range, and until we break out or break down from the range, the markets aren’t really moving. The ...

…Talk of trade talks. Copper – the canary in the coal mine. Consumer sentiment slips. Short-termitis in earnings reports. Corporate governance. Financial Review by Sinclair Noe for 08-17-2018 DOW + 110 = 25,669 SPX + 9 = 2850 NAS + 9 = 7816 RUT + 7 = 1692 10 Y un = 2.87% OIL + .46 = 65.92 GOLD + 10.90 = 1185.60   For the week, the Dow industrials gained about 1.3%. The S&P 500 is up 0.6 percent this week, but the Nasdaq showed a loss. Investors pulled money from both stock and bond funds in the past week, and shifted money within U.S. equities to health care and out of tech and financials. According to Bank of America Merrill Lynch, investors pulled $3.6 billion out of equity mutual funds and ETFs, with $2.6 billion out of U.S. stocks. But as investors took a defensive posture on stocks, they also dumped government debt, with net outflows of $1.5 billion from Treasuries and government bonds, the biggest since December 2016. Overall, bonds lost a total of $2.3 billion. BofA notes that the top five performing sectors for the past three months have all been defensive — staples, utilities, REITs, health care and telecommunications.   Emerging-market stocks have shed 10.7% over the past three months, and they are on track for a 3.8% decline for the week, per FactSet data. That would represent the index’s third straight weekly drop as well as its steepest weekly decline since March. The declines ...

…Dow has best day in months. China will talk about trade. Turkey continues meltdown. EM struggles. Walmart rules. Nordstrom racks a beat. JC Penney hardly worth a penny. Financial Review by Sinclair Noe for 08-16-2018 DOW + 396 = 25,558 SPX + 22 = 2840 NAS + 32 = 7806 RUT + 15 = 1685 10 Y + .02 = 2.87% OIL + .01 = 65.47 GOLD – 1.00 = 1174.70   The best day for the Dow Industrial average since April 10. The S&P and Nasdaq had nice gains, but nothing unusual. The Nasdaq was unable to recover its losses from yesterday. The big winners in the Dow were Boeing, Caterpillar, Apple, and Walmart – in that order. So the gains were more about tariffs than Walmart’s earnings.   A Chinese trade delegation will visit the US this month to kick off a new round of talks, the first since negotiations broke down two months ago. Washington has imposed tariffs on $50 billion worth of Chinese goods, prompting Beijing to retaliate. Trump’s administration is threatening further tariffs on $200 billion of Chinese goods, in a bid to pressure US companies to bring production back to the US. China’s commerce ministry reiterated that Beijing opposed trade protectionism and would not accept any unilateral trade restrictions. Both sides appeared to have reached a deal in May, but Trump backed away from the agreement and the two nations have been locked in a tit-for-tat trade war ever since. The last official round ...

…Trade wars backfire. Who pays? Retail sales up. Productivity up. Inventories up (a little). Homebuilder confidence slips. Financial Review by Sinclair Noe for 08-15-2018 DOW – 137 = 25,162 SPX – 21 = 2818 NAS – 96 = 7774 RUT – 21 = 1670 10 y – .04 = 2.85% OIL – 2.16 = 64.88 GOLD – 19.00 = 1175.70   Earlier, the Dow Industrial Average dropped under 25,000 – the Dow was down more than 300 points at session lows. The problem du jour is Turkey, which just keeps getting worse. And Turkey is just the tip of the iceberg; beneath the troubled waters, we can dip into the rest of the emerging markets; and beyond that we can look at the failed attempts to impose protectionist trade policies on our trade partners and allies. Turkey doubled tariffs on some U.S. imports, and China lodged a complaint with the World Trade Organization against American trade policies.   New data provides tangible evidence that some elements of Trump’s trade wars are backfiring. Prices for agricultural exports fell 5.3% in July, the biggest drop since 2011. The price of soybeans fell 14.1%, accounting for most of the overall drop. There were also small declines in the price of corn, wheat, fruit and nut exports. Overall export prices fell 0.5%, the biggest drop in more than a year, with agriculture causing most of the decline. Beginning July 6, China imposed 25% tariffs on a variety of American agricultural products, including soybeans, corn, ...

…Stocks bounce. Turkey? Home Depot shines. Household debt increases. Collections drop. CBO forecasts 3.1% growth this year. Wages have been stuck in neutral for 45 years. Financial Review by Sinclair Noe for 08-14-2018 DOW + 112 = 25,299 SPX + 18 = 2839 NAS + 51 = 7870 RUT + 17 = 1692 10 Y + .02 = 2.89% OIL – .48 = 66.72 GOLD + .60 = 1194.70 Stocks snapped a 4-day string of losses Yesterday we said the problems in Turkey really should not plague the US stock market. The country’s currency, the lira, has fallen sharply, dropping more than 25 percent in the past week to a record low, though it recovered somewhat today. Sure, the collapse of the lira was a legitimate concern, but Turkey is not a major trade partner. Turkish president Erdogan called for a boycott of American made electronic products. Apple did not flinch. There really is very little downside to having an all-out trade war with Turkey. There is danger with other countries; there is the danger of contagion.   The markets are not able to enjoy a Federal Reserve “put”. The Fed is actually tightening now, selling off its balance sheet and raising interest rates. Don’t count on a Powell Pause. That’s the message seasoned watchers of the Federal Reserve have for any investors hoping that turmoil in Turkey and the wider emerging-market selloff would stay the hand of Chairman Jerome Powell from raising interest rates. While international developments did cause the ...

…Stocks slide into the end of earnings season. Turkey melts down. 2008 – lasting damage. Student loan defaults grow. Tesla not quite secure. Wells Fargo, again. Def Con’s Vegas weekend. Financial Review by Sinclair Noe for 08-13-2018 DOW – 125 = 25,187 SPX – 11 = 2821 NAS – 19 = 7819 RUT – 11 = 1675 10 Y + .02 = 2.88% OIL + .18 = 67.38 GOLD – 18.10 = 1194.10 The Dow and the S&P 500 index are now down for 4 consecutive trading sessions. Markets have almost worked through earnings reporting season, and prices made a good run at the previous highs from February but were unable to break out. The question is whether prices will make another run at the old highs. The S&P seems to have strong support right around 2800 – or 2803 to be more precise.   Blockbuster earnings growth has offset rising concern on Wall Street about Trump’s trade wars and crises in emerging markets, such as Turkey. Fat profits at S&P 500 companies are on track to spike by nearly 25% during the second quarter. That would tie the first quarter for the fastest growth since 2010, according to FactSet. Ten of the 11 S&P 500 sectors increased profits by double-digits during the second quarter, led by surging growth from energy companies thanks to vastly higher oil prices. The earnings results have been better than anticipated: 79% of S&P 500 companies have beaten Wall Street’s expectations. That would be the ...