Dow Crumbles as Stock Market Braces for Consumer Chaos –

The Dow Jones was rocked on Monday by a devastating surge in the price of crude oil after the attacks on Aramco’s key refinery.

The strike not only dashed hopes for a détente between the US and Iran but also put considerable pressure on the vital US consumer.

Dow Jones Falls as Dollar Rises & Oil Soars

In late afternoon trading, the Dow Jones Industrial Average had lost 127.71 points or 0.47%, pushing the DJIA down to 27,091.81.

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The Dow Jones fell on Monday amid an oil price shock and fears that US consumers will tighten their belts. | Source: Yahoo Finance

Both the Nasdaq and S&P 500 fell with the Dow Jones, as the US dollar saw haven flows out of risk assets amid the turmoil in the Middle East. This move from risk was confirmed as gold (XAU/USD) rose, defying the stronger DXY. Weak Chinese data was also a burden on the stock market, worsening the outlook for global growth.

The Saudi drone attack was undoubtedly serious, and the world facing a crude shortage will have dramatic implications on price pressure. Such an impact could subdue consumer spending and affect the growth outlook on one hand, while on the other, it could accelerate rising inflationary pressures.

Federal Reserve Faces Difficult Choice This Week

This paints a confusing picture for the Federal Reserve meeting this week.

Jerome Powell will not be keen to surprise the stock market (given how plenty of easing is priced into the Dow).

Longer-term, the Fed’s appetite to ease would likely be constrained by higher oil prices, given the effect on the CPI.

President Trump disagrees and believes the economy needs stimulus now more than ever.

Boris Johnson’s Brexit Antics Weigh on Markets

Providing an additional hit to the Dow, Boris Johnson’s much-anticipated trip to speak with EU heads ended in farce. The UK PM skipped a joint press conference he was supposed to attend, leaving an empty stand. Knocking the British pound and worsening risk sentiment in Europe, this was an additional negative to consider for the US stock market.

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It was also hard for Dow bulls to ignore the footage of rebels in Hong Kong hurling gasoline bombs at government buildings and setting fire to the city’s subway.

Nordea: Stock Market in for a Rude Awakening

Due to these dramatic events, the China-US trade war has been pushed to the back of many traders’ news feeds. Economist Martin Enlund at Nordea believes that this period of calm could be short-lived, as Trump’s tariff tactics still pose a significant threat to equity indexes like the Dow.

“It could be that some of the positive news the market is currently having to digest is driven by the vicinity of the 70th anniversary of the People’s Republic of China (October 1). Trump is being a good cop for now (even bringing China a birthday present), China is reciprocating – even USD/CNY is behaving nicely – i.e. declining – despite PBoC easing. [A} stronger CNY usually goes hand in hand with higher industrial metal prices, which in turn is good news for certain cyclical equities. Basically, it could be that markets could be in for a rude awakening in October. But that’s a story for another day.”

Dow Stocks: Oil Companies Shine, Retail Crushed

Unsurprisingly, Chevron and Exxon Mobile were the shining stars of the Dow 30. The two major oil companies enjoyed the giant bounce in crude as US shale gets ready to turn on the taps.

Apple was another rare gainer, as the tech giant eked out a 0.43% gain.

Walmart and Walgreens were among the worst-hit, with the former losing approximately 1.5% as consumers prepared to feel the pinch from higher energy prices.

Procter and Gamble languishes at the bottom of the table for the Dow Jones (-2.15%). The rise in petroleum prices will likely increase its costs and weigh on its profitability.

Click here for a live Dow Jones Industrial Average chart

Last modified (UTC): September 16, 2019 6:50 PM

Dow Runs Out of Gas on Tired Trade War Deja Vu –

The Dow Jones eked out a weak gain on Friday, failing to capitalize fully on positive trade war news as China steps up its purchases of US farm goods.

Michigan consumer sentiment and retail sales were strong, and yet the Dow dragged sideways as tech giant Apple tumbled after an abysmal forecast from Goldman Sachs.

Dow Jones Flat-Lines on Friday

Heading toward the closing bell, the Dow Jones Industrial Average had added 48.74 points or 0.18%. That small advance lifted the index to 27,231.19.

It wasn’t pretty, but it set the Dow up to rise for an eighth straight session – and third straight week. The S&P 500 and Nasdaq both endured minor declines, sliding 0.08% and 0.19%, respectively.

Investors have been quick to price in any progress that Trump and China are making on trade. Brighter sentiment has pushed the Dow back close to its record just below 27,400.

However, today’s weak moves in the stock market suggest that the extent to which thawing tensions can lift the overbought Dow could be waning.

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On the other hand, the US consumer is still in spending mode, despite the fact that the newswires are filled with talk of recession.

Healthy household consumption should provide firm support for an index with as many domestic staples as the Dow Jones, making it a little surprising that the DJIA did not get more of a lift from the data beats today.

ABN AMRO: Trumps Needs a Trade War Deal Soon

Hunting for an explanation for this lack of conviction, it appears that while investors are cheering a softening in Trump’s trade war, Wall Street retains a healthy dose of skepticism. Han de Jong, chief economist at ABM AMRO, personifies this perspective in a piece of macro analysis today.

He writes:

“While I am an optimist by nature, I must say that I believe it when I see it as regards an actual deal. We have seen constructive moves before, only to be disappointed later. Perhaps the difference now is that the US presidential election is approaching. They are still over a year away, but the economic effect of a trade deal or no trade deal will occur gradually. To have the economy in top-fit condition, a trade deal should be done within the next couple of months.”

If Mr. de Jong is correct, it would suggest that Trump’s anticipated charm offensive ahead of 2020 may have already begun.

If so, this would indicate that the outlook for the Dow is far brighter than the recent moves in the bond market and ISM manufacturing suggest.

Dow Stocks: Rotten Apple, Hungry Caterpillar

It was an extremely mixed day for the Dow 30. The script flipped for Apple, as the iPhone manufacturer’s stock nosedived after several days of gains. The catalyst for the move appeared to be an extremely negative AAPL forecast from Goldman Sachs who predicted as much as a 26% cut in the company’s share price.

At last check, Apple stock was down 1.76%.

Focusing more on the trade war dialogue, Caterpillar continued its relief rally with a 1.45% gain as global risk sentiment continues to brighten.

Boeing, another stock that has been buffeted by China concerns, rose 1.5% as it unveiled a massive project to ensure that the 737 Max returns to the skies sooner rather than later.

Click here for a live Dow Jones Industrial Average chart.

Last modified (UTC): September 13, 2019 7:07 PM

California’s GroundBreaking SB-206 Bill Pits Tim Tebow Against LeBron James –

The California legislature has passed an earth-shattering bill that promises to change the entire landscape of collegiate athletics.

SB-206 would allow students to make endorsement deals and earn money for their efforts on the field. Many believe this is the wrong way to go, among them one of the great college football players of his era, Tim Tebow.

Tim Tebow Passionately Advocates Against Paying College Athletes

Tebow has a point. College sports is about the school and not the individual. The prospect of making the SEC virtually a minor league for the NFL has some troubling implications and might risk the very things that make it so popular.

California Bill Changes Nothing For Most Students

The portion of his evangelical rant that does clang is when Tim Tebow suggests that it is “just to make a dollar.” While the NCAA made moves so that student-athletes don’t go to bed hungry many don’t have any money whatsoever to enjoy their collegiate experience. When the NCAA tells you that paying athletes would hurt their education, it’s best to ignore them. Nothing hurts your grades like waking up at 5 am five times a week, working out to the point of exhaustion, and then trying to stay awake in calculus at 9 am after a 15-second shower and breakfast.

That’s why Tebow and the California legislature are both wrong. SB-206 doesn’t pay student-athletes, it pays the 2% that have a media presence. The Heisman winners and the 1st round draft picks. Don’t expect this bill to mean the 2nd string running back whose family can’t afford to come to games is going to be rolling in cash suddenly. Don’t forget the many non-revenue sports like track and field or golf that won’t see a dime either.

LeBron James vs Tim Tebow

Plenty of star athletes like LeBron James are advocating that future star athletes should be able to profit from the revenue they bring to universities. This doesn’t solve the root of the issue, that college student-athletes need to be better looked after generally. Let’s not pretend there is any appetite from advertisers for image rights for more than a handful of these students.

It would be so easy for the NCAA to fix this issue. Just increase the amount of money and amenities available to students. 24-hr access to free food (for every sport), cover travel so they can go home or family can visit them and be more realistic about the quality of education that can be achieved while training full time. They probably won’t, and it means we have to listen to LeBron James and Tim Tebow argue about how to treat a tiny minority of elite athletes.

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 SB-206 Could Destroy Title IX Equality Efforts

SB-206 will inevitably blow up Title IX efforts to create equality between male and female teams. It could lead to the cancellation of many non-revenue creating sports to cover the loss of income that billion-dollar colleges will claim they can’t absorb. Based off a recent poll, students believe they should be paid, but they will be thinking they are all going to be driving Mercedes and haven’t really thought about how minute interest is in individual college athletes. Even if you paid them a minor-league salary, it’s basically the same as the cost of attending an elite college anyway.

In typical gung-ho fashion, California has approved a bill that appears progressive but ultimately could prove quite the opposite. The star quarterback who was paid under the table for endorsements is now going to be paid over it, that’s the only difference.

Last modified (UTC): September 14, 2019 4:03 PM

Jack Dorsey Twitter Hack May Be A Protest Against Hate Speech Online

In a shocking display of Twitter’s vulnerability, CEO Jack Dorsey had his account hacked. The offending tweets were clearly intended to be as offensive as possible and beg the question if Dorsey can’t keep his account secure, can anyone? As the dust settles, however, this hack appears far more meaningful.

Jack Dorsey Hit With Hateful Twitter Hack

Given recent political developments, some are questioning whether the hacker’s real intention was to protest Jack Dorsey’s reluctance to more aggressively censor hate speech. Most of the tweets and retweets involved themes typically associated with white supremacy, such as praising Nazi Germany and Hitler, anti-Semitism and slurs against people of African descent.

Russian Trolls Love Twitter

It is not only racism that has been in many Twitter regulators crosshairs. The CIA,  FBI, and DoD confirmed election interference by the Russian government included a whopping 9 million tweets that were used to destabilize politics around the world. Consider Jack Dorsey’s statement made to the United States House Committee on Energy and Commerce in 2018:

“Twitter does not use political ideology to make any decisions, whether related to ranking content on our service or how we enforce our rules. We believe strongly in being impartial, and we strive to enforce our rules impartially. We do not shadow-ban anyone based on political ideology. In fact, from a simple business perspective and to serve the public conversation, Twitter is incentivized to keep all voices on the platform.”

Absolute Free Speech Is Not Protected by U.S. Law

Today’s hack demonstrates why this policy can often backfire. It is a common misunderstanding that the United States has unfettered free speech. Obscenity, lies, and violence are illegal, and the hackers have made it clear how certain political ideologies can intersect with this banned speech. Naturally, when something like this happens on your own platform, the criticism is going to flow freely. Many took to Twitter to criticize either Dorsey’s leadership or the engineers who work on the social media site.

Will Jack Dorsey Act?

Perhaps having hateful tweets emanating from his account might spark some action from Jack Dorsey to actively protect users from illegal activities more aggressively, and maybe it won’t. Today’s hack did, however, perfectly highlight how tech companies like Twitter need to do more to effectively deal with user concerns about personal security and exposure to hate speech.

So far it is radio silence from @jack, and that is a mistake.

Dow Rocked as King Dollar Ravages Risk Appetite – CCN Markets

The Dow Jones surged as much as 152 points on Friday, only to careen lower following a US dollar spike and a major sell-off in crude oil.

Dow Jones Reverses as Oil Prices & Sentiment Plummet

As of 12:30 pm ET, the Dow Jones Industrial Average had gained 37.88 points or 0.14%. The DJIA last traded at 26,400.13 after spending much of the past hour bouncing around its previous-day close.

While the Dow had been moving higher for most of the week, Friday brought new evidence of plunging fundamentals as Michigan Consumer Sentiment nosedived.

It was also a terrible day for oil prices, with more than 3% losses in crude as analysts slashed forecasts.

The euro trended sharply lower, pushing the US dollar higher and appearing to spark a sell-off in equities and commodities as it moved below the 1.10 level.

President Donald Trump is not happy about the rising dollar.

Taking the time to tweet an additional assault on the Federal Reserve, he made clear that he believes stock indices like the Dow Jones would be considerably higher if it weren’t for Jerome Powell and the Fed.

Stock Market Weakness Blamed on ‘Trump Slump’

The investment community is not so sure. In a clear rebuke to President Trump, investment bank ABN AMRO released a detailed research piece analyzing the current state of the global economy.

The conclusion by economists Sandra Phlippen and Arjen van Dijkhuizen is that the global slowdown can be almost entirely characterized as a “Trump Slump.” They blame the US administration for the weakness in stocks and the trade war stalemate.

“US negotiation tactics are not effective. The Chinese leadership does not seem to be impressed by the building up of threats and seems to have hardened its approach, reducing the likelihood that a deal will be struck in the near term. At home, the Chinese leadership cannot afford being perceived as being weak and bowing to the US. Moreover, it seems that Beijing has taken the view that it can sit out the trade war by accepting some further economic slowdown (mitigated by yuan depreciation and additional targeted stimulus), with US presidential elections looming.”

Dow Stocks: Intel and Caterpillar Lead The Way

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Among Dow 30 stocks, it is clear that a more positive mood on China continues to dominate trading decisions despite fresh tariffs arriving this weekend.

Global growth bellwether Caterpillar posted an impressive 1.1% gain, while chipmaker Intel was also up more than 1.2% on hopes of trade progress.

McDonald’s was a noticeable laggard, dropping 0.5%. Fellow restaurant stock Yum! Brands also struggled on the day.

Click here for a real-time Dow Jones Industrial Average chart.

CNN: Trump Lied to Pump the Flailing Stock Market – CCN Markets

It appears that stock market investors might not be the only ones feeling the heat from the US-China trade war. In a bombshell leak from Donald Trump’s private aides, CNN confirms the rumor that President Trump lied about the phone call with China to pump flailing US stocks.

CNN reports (emphasis added):

“Though Trump and Treasury Secretary Steven Mnuchin insisted there had been “communication,” aides privately conceded the phone calls Trump described didn’t happen they way he said they did. Instead, two officials said Trump was eager to project optimism that might boost markets, and conflated comments from China’s vice premier with direct communication from the Chinese.”

Trump Lied, Nobody Died – Does Anyone Even Care?

For many traders, this revelation won’t come as much of a surprise.

Prominent fund manager and TV host Jim Cramer made it clear that he believes it doesn’t matter that Trump lied because it signals something much more important: that he might be softening on China.

Trump has used the stock market as a clear barometer of his trade policy and has stepped in on multiple occasions when sell-offs have been getting out of hand.

Previously labeled as a “market-friendly” president, Trump appears increasingly anxious about stagnant US indices. Despite broaching new highs this year, the Dow Jones and S&P 500 have both moved sideways since he first introduced tariffs on China.

2020 Anxiety Grows as Recession Risks Rise

For those without an interest in the US stock market (which is still most Americans), the concern is still not whether Trump lied or not.

Instead, it’s that the volatility in markets could herald a recession and the subsequent danger this poses to jobs and wages.

It is tough to lose a presidential election when the economy is strong. Donald Trump knows this, and his decision to allegedly tell a white lie about the trade war looks to be the first indication that he is fearful about his greatest allies – a strong stock market and fat retirement accounts – letting him down in 2020.

Dow Jones Surges as Wall Street Laughs Off Dire Economic Fundamentals – CCN Markets

The Dow Jones soared toward a major resistance level on Thursday, even after weak pending home sales data threatened to dent the buoyant mood.

While investors cheered China’s measured rhetoric on the trade war, US economic fundamentals continue to suffer from uncertainty, keeping the Dow locked in a stifling long-term sideways range.

Dow Jones Rises, But Fails to Break Out of Sideways Range

As of 12:18 pm ET, the Dow Jones Industrial Average had surged by 337.5 points or 1.30%. The DJIA last traded at 26,373.6.

The 2.5% reduction in pending home sales seemed to stop the Dow Jones in its tracks, but it’s the subtext of this reading that should weigh on investors.

Sentiment indicators like home sales could be more meaningful than optimistic tweets or press releases over the long term as traders try and gauge recession risks.

Ultra-Low Rates Do Little to Restore Confidence

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In a note released to CNBC, Lawrence Yun, NAR’s chief economist, made the following comments on the state of the US housing market, as low rates are not doing their job.

“Super-low mortgage rates have not yet consistently pulled buyers back into the market. Economic uncertainty is no doubt holding back some potential demand, but what is desperately needed is more supply of moderately priced homes.”

Market Ignores Trump’s Fed-Bashing

Trump chose this morning to attack the Federal Reserve, but – as is becoming the norm – market reaction was negligible. This is yet another indicator of investor disinterest in these assaults on Jerome Powell and highlights the shift to fundamental macro releases in line with the Fed’s data-dependent outlook on rates.

A further reason for bulls to disregard Trump’s Twitter tirades came from a survey on US companies, as 80% of CEOs are now seeing a negative hit from the trade war. This figure contrasts with the positive spin that the administration has sought to put on tariffs.

Dow Stocks: Caterpillar and Nike Bask in Brighter Risk Sentiment

There was plenty to be excited about for investors in the Dow 30, as Caterpillar impressed with a solid 2% bounce. The machinery producer has substantial exposure to China and is often seen as a bellwether for global risk. Hence, China’s conciliatory comments were good news for CAT.

Nike, another stock with plenty of China investment, was also performing well – up over 2.2%.

Johnson and Johnson was the Dow’s laggard, down more than 0.15% as it appears the worst is far from over for the company after their alleged involvement in the opioid crisis.

Click here for a real-time Dow Jones Industrial Average chart.

Dow Rallies With Oil as Trade War Grinds to Crippling Deadlock – CCN Markets

The Dow Jones shrugged off an opening-bell dive to rally back into the green on Wednesday.

Appetite for stocks continues to look firm, as bulls enjoyed an oil price boom and chose to ignore another inversion in the US yield curve.

Dow Jones Recovers from Early Plunge

As of 12:00 pm ET, the Dow Jones Industrial Average had gained 188 points or 0.73%. The DJIA now trades at 25,966, despite dropping around 100 points earlier in the session.

Donald Trump has been relatively quiet about the trade war over the last few days, and investors appear to be taking the opportunity to take on some risk.

The constant to-and-froing in the bond market is only clouding the outlook at this time, as the yield curve has frequently inverted only to establish itself in a positive direction again.

The Dow did take a slight tumble after Trump attacked the intelligence of the Federal Reserve, perhaps a comeback to many in the market suggesting he does not have the mental capacity to be president.

Prajakta Bhide, a market strategist at MRB Partners, believes recessionary fears may be overblown regarding the yield curve, as she was quoted by CNBC saying:

“The yield curve’s inversion this year is a symptom of external growth stress and powerful distortions in global bond yields and does not reflect restrictive Fed policy. Thus, it does not warrant a bearish economic interpretation… the odds of a recession in the next 12 months are no higher than 20%.”

Oil Prices Boom After Massive Inventory Drop

A huge 10 million barrel draw in EIA oil Inventories helped send energy prices soaring as Brent crude futures shot more than 2% higher on the day.

Given oil’s impact on inflation, rising prices are likely to make the Federal Reserve’s job even more difficult.

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With so much easing priced into equity markets and the CPI already significantly elevated (relative to recent norms), inflation looks to be a most significant tail risk to the US stock market.

Dow Stocks: United Healthcare Soars on 2020 Polling

It was another mixed bag for the major Dow Jones stocks on Wednesday.

United Healthcare bolstered the DJIA’s recovery, up over 2% as Democratic primary polling indicates that the more moderate Joe Biden still leads comfortably over progressive firebrands Bernie Sanders and Elizabeth Warren.

Given the bounce in the oil price, it was unsurprising to see Chevron and Exxon Mobil rallying around 1%.

Johnson & Johnson was lower as investors braced for further fall-out from the recent ruling on the companies involved in the opioid crisis.

Click here for a real-time Dow Jones Industrial Average chart.