Wall Street suffers feeble end to turbulent 2015

The last day of 2015 did not go at all the way the market had hoped.  It was the one day that the predictable pattern of a big rally following a big sell off did not happen, and this despite the fact that oil, which has been the market's biggest driver this year, had a good day moving the entire energy sector up +0.34 percent.  The rest of the market did not fare well with the Dow dipping big time 178 points leaving both the Dow and S&P in negative territory for the year, the S&P at a minus 0.7%, the Dow a minus 2.2%.  But the intraday trading told a more curious tale.  The day started with a major beating right out the gate but by 1 pm had recovered all losses and was poised for another rally.  Then the tide turned again and the index took more losses, but most of the damage was all done in the final half hour.  There is much to reflect on for the year but the main story is all about oil which lost a third of its value due to an historic glut caused by concerns over the slowdown in China.  But the good news per today's expert is that there is a rather simple trick for succeeding in this crazy market, "On those big down days, hold your nose and buy."  The bad news:  "Many of the risks that worried investors this year will remain front and center in 2016."  As expected, volume was very thin at 5.3 billion.

Oil bogs down Wall St. as S&P 500 clings to gain for 2015

The market is quite sensitive to the energy sector these days.  Yesterday the index got a big boost when oil had a nice little bounce.  Today crude once again slipped and once again flirted with an 11 year low sending the Dow down another 117 points on this the second to the last trading day for the year.  If not for the energy industry, the markets today would have been in just barely positive territory for the year (the S&P in fact is, though at a whisper thin plus 0.2%.)  Of course, we'll have the final story tomorrow but, as of today, energy is down 24% this year.  So if not for that, it would have been quite the excellent year.  But given the fact that the markets were down nearly 15% as of August and that as recently as a couple weeks ago all the masters were still predicting a 2 to 4% loss for the year, ending the year at near break-even is a remarkable accomplishment.  As of today, the Dow is down 1.2% for the year, but just yesterday it was only half that.  We still have one day left.  At least today's losses were quite a lot less than yesterday's bounce.  As the trend has been, perhaps we'll see a final rally tomorrow.  Whatever happens, volume is still very light at 4.6 billion, but very much in line with usual holiday volumes.

Apple and Amazon deliver rally on Wall Street

It seems oil has been driving the market of late, namely because investors believe that as the black stuff goes, so goes the global economy.  So crude's decline in the last couple years has fueled much fear about global decline, which hasn't helped the international markets one bit.  Today it was a different story, with the energy markets having a very good time of things with crude getting a nice bounce, bolting the Dow up a very good 192 points and thus the consumer sentiment index up 3 points.  All the Wall Street aristocrats have been predicting net losses for 2015 for both the Dow and the S&P.  Today the S&P was once again in positive territory and the Dow up 1.1% for the day which brings the index close to break-even for year (after a disastrous August and September), quite a difference from the 4% loss that was predicted just a few weeks ago.  So maybe we got that Santa Claus rally after all.  Still, volume was thin, though at 5 billion, not nearly as much as it has been the past few days.

Wall Street cedes ground as oil decline deepens

It was another day of steep declines in oil, this time to the tune of yet another 3% plunging the black stuff to still another 11 year low and causing sell offs in both Exxon and Chevron.  The Dow dipped very modestly 23 points but, like last week, nothing that happens this week should be taken seriously.  Everyone's out for the holiday so even small trading will cause exaggerated motion and a mere 23 points is no motion at all.  As might be expected, volume was very thin at 4.9 billion.

Top Economic Stories of 2015 (and then some ...)

It's the holiday so "The Big Picture" did not supply any summation this week.  In its place though is this very cool graphic summarizing the top events of the year plus three terrific articles offering a wealth of sage investment advice for the holiday crowd.  Enjoy!

Quentin Tarantino’s ‘Hateful Eight’ Launches With $1.9 Million on Christmas

Five weeks ago, "Hunger Games: Mockingjay 2" launched at $114 million (budget $160 million) and was instantly dubbed a flop because the financial wizards had forecast $125 million, though there was no rational basis for that outrageously optimistic prediction that no other film in history had ever achieved.  This weekend, Tarantino's new film "Hateful Eight" has launched at $1.9 (budget $44 million) and is being called "impressive." And last week the new Star Wars launched at $248 million (budget $200 million) against a forecast of $250 million and has been hailed an instant phenomenon.  When it comes to film, sometimes these wizards of Wall Street just don't make any sense at all.

Quentin Tarantino’s ‘Hateful Eight’ Launches with $1.9 Million | Variety

10 Christmas Day Reads

Today's Christmas gift from "The Big Picture" courtesy of Barry Ritholtz, a curious form of holiday cheer from Wall Street, but definitely not without its element of humor.  Especially witty is The Atlantic Monthly article about an "un-miracle" that occurred in real life in Oak Park Illinois on Christmas in 1954.  Cheers to one and all!

No gift for Wall Street on Christmas Eve

Today's market performance may not have been the gift everyone was hoping for but it certainly wasn't a curse either.  In fact, the whole day today can just be written off as a big nothing.  Despite a fourth consecutive day of good news -- oil continued its bounce off its lows and jobless claims were less than expected -- there was a very small sell off to the tune of 50 points on the Dow but this was all on pitifully thin volume of only 2.7 billion (well under half of usual) so it means nothing.  It just means we're at the end of a holiday week and nothing that happens under these conditions means anything.  We're still positioned to end the year considerably better than was being predicted just a week ago.  Merry Christmas one and all!

On Wall Street, oil proffers modest Santa Claus rally

For the third consecutive day, the market saw a 3 digit gain and so today, the last full trading before Christmas, the so-called "Santa Claus Rally," which just a few days ago was declared DOA, was today officially declared alive and well after all.  The day's gains actually put the S&P into positive territory, just a few days ago forecasted to end almost 2% down for the year.  The Dow which was predicted to end more than 3% down for the year is now just 1-1/4% down.  Oil is partially responsible having bounced a bit off the 11 year low it reached in the last few days and also the good news that there is evidence that our overflowing stockpiles are finally beginning to fall, sending the energy index up a very hefty one-day increase of 4-1/4 percent.  Economic data overall continues to look positive and consumer sentiment has reached a five-month high with personal income rising for the eighth consecutive month.  At 6.4 billion, volume was about average for a holiday week.

Wall Street rally sends Dow up 1 percent

Yesterday's rally continued today with an even bigger score of 165 points on the Dow what with oil, which reached an 11 year low Friday, bouncing back a bit. Oh what a difference a single day makes (Santa Claus may have come to town) when just yesterday the forecast was for a 1.8% loss on the S&P this year.  With today's rally, the index is now stands at just a 1% loss for the year.  Combine that with government reports that Q3 growth was at a very respectable 2% (vs original forecasts of a 4% loss) and the rally was complete, sending the Dow up nearly one full percentage point.  Volume was a little below average at 6.4 billion, but this is normal for a holiday week.

Obamacare, tech stocks boost Wall Street

Today we got some small idea of just what an impact these expiring options have on the market several times each year that produce massive but artificial and quite temporary sell offs.  Rather than the enormous 8 and 12 billion share volumes that we saw Thursday and Friday, today we were back to a much more normal volume of 6.8 billion as traders started repurchasing all these shares and which subsequently shot the Dow back up again 123 points.  Really, when these extraordinary trading days are going on, the reporting really should net out these artificial computer-generated trades to give us a more realistic picture of what's really happening.

Succinct Summations of Week’s Events 12.18.15 (+ weekend reading)

It's the time of the week again for the much valued 1/2 page summation.  This Sunday's reading also looks very interesting.  The second article on "Avoiding Forced Irrationality" looks like some pretty good advice.  Hope everyone had a great final weekend before the final holiday rush.

Disney Shares Hammered as Dow Plunges 2%

My entry this evening on Twitter:  More evidence that nobody on Wall Street knows anything (same thing about Hollywood). Despite opening the biggest film in history this w/e, Disney’s stock plunged. (139)

... For those of you not involved in the film industry, this is an homage to famed screenwriter William Goldman and his iconic book "Adventures In the Screentrade," in which he so delightfully quipped, "In Hollywood, nobody knows anything about anything," a quote that has been shared in commentaries thousands of times.  I share it tonight.  

Disney Shares Hammered as Dow Plunges 2% | Variety

Wall St. slides on lower crude prices, stock options expiry

It was another big day for the markets, even bigger than yesterday as a combo of continuing falling oil prices (crude lost more than 2.5% this week), continuing concerns about China, and a 2nd day of massive options expiring drove the Dow down in one of the biggest routs in recent memory -- a massive 367 points.  But all is not as it appears.  Despite all the "expert" hindsight, and despite Wednesday's elation over the Fed's rate hike announcement, the fact is you don't have to be Bernard Baruch to understand that the rate hike was bound to trigger a correction of some sort until investors in the U.S. and around the world become satisfied that the hike will have its intended consequence of stabilizing the markets and the overall economy.  But it will likely be months before we really know if the world will adapt to this new environment.  Since the answer will very likely be yes, let's hope stability comes sooner rather than later.  Meanwhile, global sentiment will remain one of raw nerve as demonstrated today with the way above-average volume of nearly 12 billion shares that brought the market down more than two percent in one-day alone.

Wall St falls as growth fears resurface after three-day rally

It seems the market's elation over yesterday's Fed rate hike was limited to just a single day as already just 24 hours later concerns once again dominate over the slowing of the Chinese economy manifested today by an overall decline in the materials index, of which China is a major consumer.  After a brief rally, the chronic problem of the oversupply of oil hit the energy markets again today with Chevron's stock falling 3 percent.  These combined forces conspired to bring the Dow down a very substantial 253 points.  But to put things in perspective, a lot of that 253 point loss is artificial, attributed to what the wizards of Wall Street call "quadruple-witching," the phenomenon that takes place when tons of options and futures expire on the same day, creating a massive but very temporary sell off.  That alone partially explains the very large 8 billion trades that took place today.  Not to be too complacent though.  This "witching" may very well have a boomerang effect tomorrow, but in which direction who knows.  Stay tuned.

Wall Street rallies on gradual Fed tightening, improving economy

Today The Street got what it wanted in spades.  The Fed has now announced a 1/4% interest rate hike, taking the economy out of the zero interest rate environment it's been in for ten years and hailing in a new economic era, one that hopefully will not be so fraught with all the uncertainty we've had the past several years.  The Fed's proclamation is being calling "The Santa Claus Statement," a great big Christmas gift heralding in the "loosest tightening in its history" which is exactly what the market was hoping for.  Even though this announcement has been expected for some time, for days now there has been much speculation whether it would cause a big rally or a big panic.  In fact, the reaction was a big 224 point boost in the Dow.  as the action is widely taken as the central bank saying, "the economy is expected to continue to perform well."  Savers will now be getting more interest and investors a big boost of confidence, exemplified today by an impressive one-day 15% drop in the volatility index, the measure of investor angst.  Volume was way above average at 8.6 billion shares.

Wall St gains ahead of Fed as energy, bank shares jump

Tomorrow's the big day when it is widely expected that at 2 p.m. the Fed will announce a 1/4 to 1/2 point hike in the interest rate, the first interest rate hike in ten years.  Investors have now accepted this as reality and are looking forward to moving away from our zero interest rate environment. The Fed has stated for quite some time that the objective is, when the time was right, to start small and gradually hike interest rates to a normal 3 to 4% over time as the economy continues to strengthen.  It appears the Fed now feels the time is right.  What the market is looking for from the Fed  tomorrow is not only the announcement of the hike but a plan for a timetable for the future hikes.  Such a plan would go a long way to removing the considerable uncertainty that has plagued the markets for several years now.  In anticipation of getting this, the Dow rose 156 points, also aided by a rebound in oil prices from its almost disastrous low yesterday to today's 4% hike from both Exxon and Chevron, a 2% rise in crude and almost 3% rise in the overall energy index.  Volume was quite vigorous at 8 billion, a full billion higher than recent averages.  But, of course, the real tale will be told ... tomorrow.

Wall Street closes higher as crude steadies

It was very nearly a disastrous day.  Friday, oil had hit near a 7 year low and, the way things have been for quite some time, every time the market thinks oil has hit its bottom, the black stuff surprises us again.  This morning the surprise was huge, with the Dow tanking a hundred points right out the gate and oil immediately slumping drastically to an 11 year low.  But then we had a rally and the commodity actually ended the day in positive territory closing up nearly two percent with the Dow following with a nice 103 point hike.  That's 200 points it zoomed up in a few hours from its low.  Maybe oil did hit its bottom this morning, but that only means there's still plenty of room for another slide.  The market is now betting an 83% chance of a rate hike announcement this week from the Fed but whether that's already factored in to the index or will just trigger another sharp reaction -- and which way? -- is anyone's best guess.  The good news is we'll know in a few days.  And if investors get the answer they're hoping for, perhaps some of the uncertainty will go away too.  At a very vigorous 8.9 billion shares, uncertainty is still very much the name of the game out there.

Succinct Summations of Week’s Events for 12.11.15 (+ history of oil companies)

It's once again time for the ever popular weekly eye shot, another crazy week from one point of view, but since craziness seems to be the norm now, boring from a different perspective.  This week's very entertaining bonus is a cool little graphic that serves as a primer on the history of oil and the oil companies, something that should be of interest to everyone who understands just how important the commodity is in global issues, not just geopolitically but certainly also economically.  Hope everyone had a great weekend.

100 Years of Frank Sinatra

Not to run good Ole Blue Eyes into the ground but today is the actual 100th birthday date.  So as a final tribute to one of the 20th century's great entertainers, and even though it ran a day early, here's Friday's Ritholtz column memorializing his long and varied career.  Started singing not quite yet in his teens and was still working at 82 shortly before his death.  He's one of the rare celebrity icons of the last hundred years who had both Mafia and CIA connections.

100 Years of Frank Sinatra | The Big Picture

Wall St. drops as oil's multi-year low adds to investor fears

The Dow dropped like a rock 200 points right out the gate, then continued dropping steadily throughout the day to have yet another day closing down a whopping 309 points.  For the umpteenth time, the demon was the world's oil glut that has been plaguing the markets the last two years (but has also been responsible for the lowest prices at the pump in many years.)  With China's burgeoning economy, the market for oil seemed to have no limit a couple years back so the oil companies ramped up for what they expected to be historic high demand.  Since China's economy has been slumping, there are now no customers for all this excess oil and that stricture of demand has been roiling other markets ever since.  Just as everyone gets comfortable that oil has seen a bottom, we have another day like today.  OPEC is also playing dirty pool by intentionally not cutting back production, thereby hoping to corner the global markets.  Today crude fell to just over $35/barrel, a price not seen in seven years.  The sell off was quite robust at 8.3 billion shares.

Wall Street closes higher but pares gains with oil slide

The Dow was actually up some 200 points as late as 2 p.m. then took another dive to close just 82 points up at 4 p.m.  Once again it was the demon oil, still another day when the nation's (and the world's) immense oversupply brought the price of crude down yet again, leaving the black stuff near a 7 year low.  Still. most of the market focus remains on next week's Fed meeting, and most of the maneuvering we're seeing is an attempt to get positioned for the first interest rate hike in nearly ten years.  Volume was just a tad below recent averages at 6.7 billion.

Wall St. falls in technical trade ahead of Fed rate decision

Today was yet another example where Wall Street computers are programmed to do a massive sell off when a certain algorithm trips.  In this case, the trip was the S&P falling below 2,050 and this precipitated a 300 point dive in the Dow before it finally settled 75 points down at close.  This is the market priming itself for the expected interest rate hike which, if all indicators are correct, will be taking place just about this time next week.  Oil also continued to fall as it was reported that stockpiles of fuel (aka distillates) were twice as large as expected, thereby pretty much nullifying prior reports that we were having some success drawing down our massive inventories.  As we continue to get closer to next week's Fed meeting, trading remains brisk, today at over 8 billion.

Wall St. ends choppy session lower, weighed by China, oil

China's imports fell for a 13th consecutive month, this time nearly an additional 9% (quite a lot for one month) and this in turn sparked another wave of anxiety about impending global recession.  (Never mind that, despite China's decline of late, its growth still outstrips virtually every other country in the world.)  So today's sell off amounted to another 162 points down on the Dow and oil is now down to a near 7 year low, below $37/gallon.  (I'm sure everyone's noticed that gas is below $2/gallon at the pump now.)  Some investors think that very low oil prices are in our future for some time to come.  Others believe that it has reached a bottom and is due for a big bounce.  Whichever is right, a lot of bets are being placed as volume was considerably over average at 7.5 billion shares.

Wall St. slides as oil prices tumble to near seven-year low

There are days when investors feel quite optimistic about the upcoming first interest rate hike in ten years.  There are other days when the market gets downright panicked about it, wary that the economy might not be able to handle the shock.  Today was an example of the latter with the Dow diving 117 points, anxiety being further induced by yet another plunge in oil prices, crude down another 6 percent today.  As today's expert opined, "Oil is going to be staying at some ridiculously low prices for a very long period of time," namely because of the continuing slowing of the Chinese economy.  The bright spot was the airline sector which, of course, can't help but benefit from lower fuel costs.  Nerves were frayed enough to cause above average trading with 7.4 billion shares changing hands.

Succinct Summation of Week’s Events 12.4.15 (+ Sunday reads)

Here's the all-popular weekly eye-shot again.  This week's reading list contains numerous titles that give the different perspective that the recovery is basically all smoke and mirrors, a point of view shared by much of the public and some of the Wall Street types who are out on the fringe, but not by most mainstream economists.  There is also a pretty interesting looking book out there about the tumultuous political struggles in the early 20th century to pass the Federal Reserve Act and create the Federal Reserve.  Hope everyone had a great weekend.

The Big Short – Trailer #2 “Screwed”

It looks like this might be the big hit of the holiday season.  Due for release next Friday, it already has a phenomenal 78% rating on the Rotten Tomatoes film review site.  Michael Lewis is quite a good writer who does very well with taking complicated subjects like Wall Street and making them not only understandable but entertaining.  Looking forward to this very much.

Wall St. gains 2 percent; U.S. jobs data underscores economic strength

Wow, what a jolt the market received today with the Dow climbing an astounding 370 points.  The reason:  a jubilant U.S. jobs report that overshot the already highly optimistic forecast by a whopping 46,000 jobs.  With 200,000 new jobs expected, the actual number was 211,000 with an additional 35,000 coming from revisions to prior months.  The problem with this market, of course, has been that good news is often taken as bad (yikes, this might mean a rate hike) and bad news as good (whew, maybe no hike after all.)  It seems now that investors have accepted the inevitability of the first hike in 10 years coming very likely in another 12 days and so the jubilation now is on strong data, which was certainly delivered today.  Since the financial sector naturally benefits from the prospect of rising interest rates, companies like JP Morgan Chase led today's huge rally.  But none of this changes the fact that all eyes remain strongly focused on what will happen at the December 15th Fed meeting.  Volume was quite active at 7.7 billion.

S&P posts biggest drop since September as ECB disappoints

Another big rout in the market today, this time to the tune of 252 points on the Dow.  This time the blame is being divided between a less than aggressive stimulus from the ECB (even though they are continuing their previous stimulus as expected) and the likelihood that many computerized trading programs unloaded a lot of funds tuned to the volatility index which rose almost 14% on the news from Europe.  Janet Yellen's report to Congress signaled increasing strength to the economy and today's jobless report continued to support a strengthening job market.  The federal employment report due tomorrow is expected to add 200,000 more jobs.  All this adds up to an increasing certainty that interest rates will be hiked at the Fed meeting in two weeks.  Trading was quite robust at 8.2 billion shares.

Wall St. ends sharply lower; energy leads decline

The headline read, "Do We Blame Crude Oil or Yellen?" referencing what might explain today's big 158 point drop in the Dow since crude did drop some more and Yellen did have some heavy oratory about how well the economy is doing, thereby leaving little doubt that there will be an interest hike in two weeks.  Actually, they were both wrong.  (Curiously an earlier headline had read something to the effect "Yellen gives no hint as to rate hike."  The media just didn't get much right today.)  After close, a third much more plausible explanation emerged as it was observed that the dramatic dive in the Dow started just about 1 p.m., about the time news was coming in about the shooting spree in California.  Why a crime 3,000 miles away would cause a panic on Wall Street is anyone's best guess ... but that's what they're saying.  More good news about private hiring likely also contributed to the sell off on fears of the rate hike.  It's going to be an interesting rest of the week.  Tomorrow Yellen gives the Congress her take on the economy and Friday is the much anticipated November federal jobs report.  If both of these are positive, that will lend ever more credence to a hike.  But we're still 14 days away from the December Fed meeting.  Trading was quite healthy at 7.4 billion shares.

Wall St. gains with healthcare, upbeat auto sales

Yesterday the market dropped 80 points for, among other reasons, fears of today's auto sales report coming in weak.  So it makes some sense that when the report actually said that the auto industry is on pace for its biggest year ever that the market would zoom up again, this time 168 points.  And though part of yesterday's worries were on a misplaced focus on the decline of brick & mortar stores, today investors decided to place less emphasis on that and be happy that Black Friday and Cyber Monday sales were actually quite good overall.  Janet Yellen gives her take on the economy at a speech tomorrow and, beyond that, all eyes are on the employment report due Friday.  It is expected that 200,000 jobs will be added and, if that is the case, then the Fed will almost certainly decide the time is right to raise interest rates this month.  Volume was healthy at 6.9 billion.