***Official*** 2016 Stock Market Thread

[zinfamous]

^You shouldn't. If the housing market implodes, the Canadian dollar will probably do the Venezuela whatever, and you should be buying maple by the kilo.

So you're saying I should cheer for the Canadian housing collapse? Bring it on!

 

[Imp]

Well, Vine (that short video thing that kiddies use but I just watch clips on Instagram) is dead and Twitter is cutting 9% of their workforce.

Watch for them videos:
http://www.ctvnews.ca/business/twitter-shutting-down-vine-video-service-1.3134252

 

[FelixDeCat]

Good riddance to Vine. Being a connoisseur of good videos I felt like they were just pollution on the internet.

 

[Imp]

Well, oil is down about 4% today. Back to the mid-$40 range. Something about skepticism about the OPEC deal. Who woulda guessed? A deal that, I heard, was supposed to let Iran do whatever they want while everyone else has to buckle down. Then Iraq wanted in too? So shocked.

So.

Shocked.

 

[FelixDeCat]

I am really tempted to buy physical gold right now. I'm only in the market for Eagles and am willing to pay the markup for it because its extremely easy to sell with a large pool of interested buyers of government gold.

The cheapest $50 Gold Eagles are going for $1326 an ounce. Last week the cheapest was $1370. In the last four weeks the cheapest was $1305 an ounce. These are the "ask" prices. The bid price (spot) is currently $1280. I was looking at maybe buying ~$4,000 and hoping to sell at $4,500, a move of $166 an ounce. That is not unreasonable, considering we are about $100 off the 52 week high.

Also, I think turmoil around the election might cause a spike in gold (it already has gone up), I just don't know by how much. Hopefully things settle down, so I would probably sell into the spike. If there is some sort of crises over either's legal problems, it could keep the markets roiled and inflate the price of gold higher than it is now.

What has been holding me back is the Fed's possible action in December. They have been gunning for a hike but now seem to be backing off. A hike or even more talk of a hike would cause gold to drop. Political turmoil might continue the pause in rates, which is good for metals.

 

[Kwatt]

What has been holding me back is the Fed's possible action in December. They have been gunning for a hike but now seem to be backing off. A hike or even more talk of a hike would cause gold to drop. Political turmoil might continue the pause in rates, which is good for metals.

If I was betting on it (And I am NOT). I would bet against a hike this year. The DOW has been bouncing around 18000+- since Dec. 2014. The S&P around 2100+-. A good number of earnings have been flat for awhile. Although EPS is up due to buybacks. If the easy funds dry up buybacks may be reduced.

I for one would not want to hand a new president a big dip in the markets. Just a Wild Guess of mine.


.

 

[senseamp]

If you extrapolate the correlation between market moves and Trump's election odds since last week,
https://electionbettingodds.com/WIN_chart_maxim_lott_john_stossel.html
It's 1.5% down move in S&P/DJIA per 10% probability increase (15% to 25%) of Trump winning. That would mean market is pricing a 15% valuation difference for stocks with Trump win vs Hillary win.
If he wins and goes from 25% to 100% probability, that could translate to (100%-25%)*15% = 11.25% or roughly 2000 pt cumulative drop on the DJIA. If Hillary wins, then it would translate to 25%*15% = 3.75% or roughly 500 pt swing higher. Some of this will be offset by changing expectations of Fed policy in response to the political events, but this is a ballpark range to be prepared for.

 

[Imp]

If I was betting on it (And I am NOT). I would bet against a hike this year. The DOW has been bouncing around 18000+- since Dec. 2014. The S&P around 2100+-. A good number of earnings have been flat for awhile. Although EPS is up due to buybacks. If the easy funds dry up buybacks may be reduced.

I for one would not want to hand a new president a big dip in the markets. Just a Wild Guess of mine.

They shouldn't be raising based on the economy's performance. I think they, the Fed, will raise in December to save face and not look completely retarded -- we went from maybe 4 hikes this year to 3 to 2 to now maybe 1. Maybe.

The market's a joke. Since July 1, 2016, the S&P500 has been trading within a roughly 100 point range.

 

[Kwatt]

They shouldn't be raising based on the economy's performance. I think they, the Fed, will raise in December to save face and not look completely retarded -- we went from maybe 4 hikes this year to 3 to 2 to now maybe 1. Maybe.

The market's a joke. Since July 1, 2016, the S&P500 has been trading within a roughly 100 point range.

While I agree. The original stated goal of QE and low rates was for unemployment and stable economy. The target for unemployment has met the target they stated. And the economy is great according to the media. And yet the rates are still below average. So how much credibility do they still have?

Credibility or not if the markets tank after a rate hike. The chairperson will have to explain it. Well not explain it because they don't have too. But, she will be questioned.

Why take the chance?

.

 

[Imp]

While I agree. The original stated goal of QE and low rates was for unemployment and stable economy. The target for unemployment has met the target they stated. And the economy is great according to the media. And yet the rates are still below average. So how much credibility do they still have?

That's the official line, alright. The Fed, officially, is not basing rate decisions on the market. It's not like the Fed has been talking up/down rate moves all year long and moving the market again and again.

Edit: HAHAHAHHAHA... According to this article, Canada's house prices are higher than Japan's at the peak of their bubble in the late '80s after adjusting for inflation.

http://www.macleans.ca/economy/econ...-market-looks-a-lot-like-the-u-s-did-in-2006/

 

[senseamp]

If inflation accelerates and the Fed doesn't raise their short term rates, the markets will price in higher inflation expectations and increase long term interest rates to account for it.

 

[Imp]

No surprise, no Fed move today.

There be video, yo.
http://www.cnbc.com/2016/11/02/fed-leaves-rates-unchanged-as-all-eyes-turn-toward-december.html

December is possible if only for the Fed to make themselves feel like they still matter. Almost a decade of ZIRP and QE to get unemployment down to ~5% -- looks great until you realize the millions who've dropped out of the work force.

Edit: And interdasting, preferreds like PFF and PSK are down a ton since the summer. Possibly anticipating a hike in December? But I also heard something about a bond sell off going on.

 

[Miramonti]

Antitrust investigation into two dozen generic drugs for price fixing

Companies mentioned in the report include Mylan (NASDAQ: MYL), Allergan (NYSE: AGN) and Teva Pharma (NYSE: TEVA), Lannett (NYSE: LCI), Impax Laboratories (NASDAQ: IPXL), Covis, Sun Pharma, Mayne, Endo (NASDAQ: ENDP), and Taro Pharma (NYSE: TARO).

 

[dullard]

December is possible if only for the Fed to make themselves feel like they still matter. Almost a decade of ZIRP and QE to get unemployment down to ~5% -- looks great until you realize the millions who've dropped out of the work force.

The Fed really wants to avoid rate increases in an election, so these non-moves for the last ~6 months were pretty easily forecasted. The thing is that a debt recession cannot be quickly ended. It takes 7 years to erase a bankruptcy if you go that route, and up to 30 years to pay off a bad mortgage if you decide to suck it up instead. Those are the two extremes, there isn't a faster than 7 year method of ending debt problems. Recessions caused by fear, or supply disruptions, or most other causes can be ended in a moments notice. But not debt recessions. That is, unless something major happens like the government collapses and all debt is erased. The fed had no tools to quickly end a debt recession, since none exist.

That said, it is time for the fed to start ramping up rates in December. They should do it slowly and steadily. But, we aren't getting back to more normal ~4% rates any time soon.

You need to be careful when talking about people who dropped out of the workforce. Someone who planned on retiring, can afford to retire, and does retire is not necessarily a bad thing. But those baby-boomers get counted exactly the same as a starving parent desperate for a job -- which is a completely different thing. A more realistic number to look at is the discouraged worker count. These are people who want a job, searched for a job, and can't find one. While we aren't back to year 2000 levels of discouraged workers, we are back to 1994 and 2004 levels (~500,000 people). Those weren't very bad times.

 

[jpiniero]

That said, it is time for the fed to start ramping up rates in December. They should do it slowly and steadily. But, we aren't getting back to more normal ~4% rates any time soon.

It'll be one and done in December. They almost have to come out and say they won't raise it again for some time to avoid a major selloff and not say a small correction like you are seeing over the past couple of days. I think raising rates would help the economy; but the stock market is a different story.

You need to be careful when talking about people who dropped out of the workforce. Someone who planned on retiring, can afford to retire, and does retire is not necessarily a bad thing.

If anything it seems like the job number count increases is being helped greatly by 50+ returning to the workforce, possibly because they aren't getting enough out of low/"no" risk investments because of the low rates. Or they don't have any retirement fund at all.

 

[Imp]

If anything it seems like the job number count increases is being helped greatly by 50+ returning to the workforce, possibly because they aren't getting enough out of low/"no" risk investments because of the low rates. Or they don't have any retirement fund at all.

From what I've heard, boomers and "regular" people aren't saving much for retirement with more than a few needing to work in retirement because they have no or not enough money.

This random survey suggests that only about 22% of 55+ people in early 2016 had $300k+ in retirement savings. That group's distribution probably peaks closer to $300k than $1M.

Might be video:
http://time.com/money/4258451/retirement-savings-survey/

 

[FelixDeCat]

Zero interest rate policy has NOT been in effect for quite some now in the United States. That should have been temporary, otherwise we risked becoming the next Japan.

 

[Imp]

My French vocabulary sucks so thank god for Google Translate. Delinquencies appear to be spiking in Quebec. And I can't find an English language article on it so it looks like the rest of Canada doesn't give a shit what happens to 25% of the population.

Sur 12 mois, 10 582 préavis d’exercice ont été publiés dans l’ensemble de la province ce qui représente une croissance de 7 % comparativement à la période de novembre 2014 à octobre 2015. En octobre dernier, le total sur 12 mois a atteint un niveau jamais égalé depuis que la compilation est effectuée, c’est-à-dire en 2009.

http://www.lesaffaires.com/blogues/...auvaises-creances-immobilieres-octobre/591268

Alberta's also been doing poorly. But hey, metro Toronto apparently had 20%+ year over year increases in home sales this past October. Vancouver did that too before sales crashed over 35% recently... but we're special.

 

[jpiniero]

Zero interest rate policy has NOT been in effect for quite some now in the United States. That should have been temporary, otherwise we risked becoming the next Japan.

It's still below the pre-2008 rate low though, and will still be after the hike in December. Getting above 1% is going to be a while; 2% seems like a long way off.

 

[JEDI]

oil went down 10% since mon. $48 vs $44
dwti (triple short oil) only went up 20% since then? ($70 vs $84)

if its triple short, shouldn't it have gone up 30%?

 

[Kwatt]

oil went down 10% since mon. $48 vs $44
dwti (triple short oil) only went up 20% since then? ($70 vs $84)

if its triple short, shouldn't it have gone up 30%?

Warning! Danger! What you are reading is just how it appears from my very,very limited thoughts on DWTI. I have only bought it twice. Did OK on the first time, lost more the second time than I made the first time. Stayed away since.

It seems like it only triples on the first day or so. I imagine from the cost. Also it appears that if you hold it long enough and the oil price falls slowly you may just do a little better than break even.

Not for sure about this I am still trying to get my head around it.

.

 

[Imp]

^I have no clue but is it the decay due to the leverage? People have said that it's only for intra-day trading.

And ya, oil is down from ~$51 in the past month to ~$44. Something something lost confidence in OPEC. Who'd have guessed. Not like we've been doing this since a year ago. Don't worry, some rumor later and it'll be back to $51 once we hit ~$41.

 

[FelixDeCat]

People still trade oil? That's so 2015.

 

[MomentsofSanity]

Just came in to our trade floor. Not proprietary. Enjoy Wednesday!

Sector Analysis (Source: Bloomberg)

Equities:

Clinton wins: S&P 500 Index could gain as much as 3 percent and big losers would be finance, drug companies and banks.

Trump Wins: Trump victory could trigger a massive sell off and many would consider that a classic “black swan event, and much more severe” than Brexit and Barclays predicted the S&P 500 would nosedive by between 11 percent and 13 percent if Trump wins.


Currencies:

Clinton Wins: The U.S. dollar would gain versus other developed-market currencies with the Democrats heading toward the White House as traders focus attention on the likelihood that the Federal Reserve will raise rates in December, according to Capital Economics, a London-based research firm. Down the road, Bank of America sees the greenback gaining under Clinton only if the Democrats take Congress.

Trump Wins: The foreign-exchange markets this week are suggesting the dollar tumbling against almost all major currencies and the Mexican peso falling to a three-week low.

Commodities:

Clinton Wins: Her environmental policies, especially her promise to combat climate change, will put pressure on coal and oil. The natural gas market could get a boost from her pledge to wean power plants off coal by using gas as “a bridge” to more reliance on renewables.

Trump Wins: Natural gas prices likely would suffer as coal benefits under Trump. He has promised to roll back environmental rules that squeeze coal out of the U.S. power market and promoted “clean coal” during one of the debates. Bloomberg Intelligence in September estimated that a victory by the Republican would shave 11 percent off natural gas demand in 2030 from last year’s levels, boosting coal use. Oil prices could get a lift. Gold, platinum and silver would the “biggest winners” if Trump wins, said Yang, the CMC Markets analyst

Fixed Income:

Clinton Wins: A victory by the Democrat would initially drive up yields as investors sell off Treasuries in favor of riskier assets, Bank of America Corp. analysts said in a report. Ripple effects would raise borrowing costs for individuals and corporations worldwide because U.S. sovereigns are the global debt benchmark

Trump Wins: In the two weeks after the U.K. gobsmacked pollsters and voted to leave the EU on June 23, the U.S. benchmark 10-year yield fell 39 basis points and didn’t return to pre-Brexit levels until September. Something akin to that would happen if Trump defies conventional wisdom, analysts said. Credit Agricole SA predicts a “massive disjoint” that would send 10-year yields down at least 10 basis points if he prevails

 

[Banana]

Nice Hillary bump today.
No, not THAT kind of bumping.