https://www.howestreet.com/2024/05/shipping-container-shortage-could-fuel-inflation-mark-leibovit/
Nasdaq Climbs To Another Record Closing High But Dow Sees Further Downside
After moving in opposite directions early in the session, the Nasdaq and the Dow turned in a mixed performance throughout
much of the trading day on Tuesday.
While the Nasdaq briefly joined the Dow in negative territory in afternoon trading, the tech-heavy index rebounded to end
the day at a new record closing high.
The Nasdaq climbed 99.09 points or 0.6 percent to 17,019.88, adding to the strong gain posted last Friday. The S&P 500 also
inched up 1.32 points or less than a tenth of a percent to 5,306.04, while the Dow slid 216.73 points or 0.6 percent to
38,852.86, extending the sharp pullback seen last week.
The continued advance by the Nasdaq came amid a sharp increase by shares of Nvidia (NVDA), with the AI darling surging by
7.1 percent to a record closing high.
Last week, Nvidia reported better than expected fiscal first quarter results and provided upbeat guidance while also
announcing a ten-for-one stock split and increasing its quarterly cash dividend by 150 percent to $0.10 per share.
The Nasdaq gave back ground in afternoon trading, as the ten-year treasury yield jumped above 4.5 percent after auctions of
two-year and five-year notes attracted below average demand.
Meanwhile, a steep drop by shares of Merck (MRK) weighed on the Dow, as the drug giant tumbled by 2.6 percent to its lowest
closing level in well over a month.
Overall trading activity remained somewhat subdued, however, as traders looked ahead to the release of key inflation data
later this week.
On Friday, the Commerce Department is due to release its report on personal income and spending in the month of April,
which includes readings on inflation said to be preferred by the Federal Reserve.
The inflation data could have a significant impact on the outlook for interest rates ahead of the Fed’s next monetary
policy meeting on June 11-12.
In an interview with CNBC this morning, Minneapolis Fed President Neel Kashkari said he needs to see “many more months of
positive inflation data” before he would consider cutting interest rates.
Kashkari, who does not have a vote on the rate-setting Federal Open Market Committee this year, also said he could not rule
out raising interest rates if inflation fails to slow.
On the U.S. economic front, the Conference Board released a report unexpectedly showing a significant improvement in
consumer confidence in the month of May.
The Conference Board said its consumer confidence index jumped to 102.0 in May from an upwardly revised 97.5 in April.
The rebound surprised economists, who had expected the consumer confidence index to decrease to 95.3 from the 97.0
originally reported for the previous month.
Sector News
Airline stocks moved sharply lower over the course of the session, dragging the NYSE Arca Airline Index down by 2.0 percent
to its lowest closing level in over four months.
Considerable weakness also emerged among housing stocks, as reflected by the 1.3 percent loss posted by the Philadelphia
Housing Sector Index.
Healthcare and pharmaceutical stocks also saw notable weakness, while gold stocks showed a strong move to the upside along
with the price of the precious metal, driving the NYSE Arca Gold Bugs Index up by 2.2 percent.
Oil service stocks also moved significantly higher amid a surge by the price of crude oil, resulting in a 1.7 percent gain
by the Philadelphia Oil Service Index.
Semiconductor and computer hardware stocks also turned in strong performances on the day, contributing to the advance by
the tech-heavy Nasdaq.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved modestly lower during trading on Tuesday. Japan’s
Nikkei 225 Index edged down by 0.1 percent, while China’s Shanghai Composite Index fell by 0.5 percent.
The major European markets also moved to the downside on the day. While the German DAX Index declined by 0.5 percent, the
U.K.’s FTSE 100 Index and the French CAC 40 Index slumped by 0.8 percent and 0.9 percent, respectively.
In the bond market, treasuries slid firmly into negative territory over the course of the session. As a result, the yield
on the benchmark ten-year note, which moves opposite of its price, jumped 7.5 basis points to a nearly one-month closing
high of 4.542 percent.
Looking Ahead
The U.S. economic calendar remains relatively quiet on Wednesday, although the Fed’s Beige Book may attract some attention
later in the trading day.
WHO IS MARK LEIBOVIT?
MARK LEIBOVIT is Chief Market Strategist for LEIBOVIT VR NEWSLETTERS a/k/a VRTrader.Com. His technical expertise is in overall market timing and stock selection based upon his proprietary VOLUME REVERSAL (TM) methodology and Annual Forecast Model.
Mark’s extensive media television profile includes seven years as a consultant ‘Elf’ on “Louis Rukeyser’s Wall Street Week” television program, and over thirty years as a Market Monitor guest for PBS “The Nightly Business Report”. He also has appeared on Fox Business News, CNBC, BNN (Canada), and Bloomberg, and has been interviewed in Barrons, Business Week, Forbes and The Wall Street Journal and Michael Campbell’s MoneyTalks.
In the January 2, 2020 edition of TIMER DIGEST MAGAZINE, Mark Leibovit was ranked the #1 U.S. Stock Market Timer and was previously ranked #1 Intermediate U.S. Market Timer for the ten year period December, 1997 to 2007.
He was a ‘Market Maker’ on the Chicago Board Options Exchange and the Midwest Options Exchange and then went on to work in the Research department of two Chicago based brokerage firms. Mr. Leibovit now publishes a series of newsletters at www.LeibovitVRNewsletters.com. He became a member of the Market Technicians Association in 1982.
Mr. Leibovit’s specialty is Volume Analysis and his proprietary Leibovit Volume Reversal Indicator is well known for forecasting accurate signals of trend direction and reversals in the equity, metals and futures markets. He has historical experience recognizing, bull and bear markets and signaling alerts prior to market crashes. His indicator is currently available on the Metastock platform.
His comprehensive study on Volume Analysis, The Trader’s Book of Volume published by McGraw-Hill is a definitive guide to volume trading. It is now also published in Chinese. Mark has appeared in speaking engagements and seminars in the U.S. and Canada.
https://massie.house.gov/uploadedfiles/endthefed.pdf
The questions CFTC and Fed won’t answer expose gold price suppression policy
Gold market manipulation: Why, how, and how long? (2021 edition)
https://gata.org/node/20925
The President’s Working Group on Financial Markets
known colloquially as the Plunge Protection Team, or “(PPT)” was created by Executive Order 12631,[1] signed on March 18, 1988, by United States President Ronald Reagan.
As established by the executive order, the Working Group has three purposes and functions:
“(a) Recognizing the goals of enhancing the integrity, efficiency, orderliness, and competitiveness of our Nation’s financial markets and maintaining investor confidence, the Working Group shall identify and consider:
(1) the major issues raised by the numerous studies on the events in the financial markets surrounding October 19, 1987, and any of those recommendations that have the potential to achieve the goals noted above; and
(2) the actions, including governmental actions under existing laws and regulations (such as policy coordination and contingency planning), that are appropriate to carry out these recommendations.
(b) The Working Group shall consult, as appropriate, with representatives of the various exchanges, clearinghouses, self-regulatory bodies, and with major market participants to determine private sector solutions wherever possible.
(c) The Working Group shall report to the President initially within 60 days (and periodically thereafter) on its progress and, if appropriate, its views on any recommended legislative changes.”
Plunge Protection Team
“Plunge Protection Team” was originally the headline for an article in The Washington Post on February 23, 1997, and has since been used by some as an informal term to refer to the Working Group. Initially, the term was used to express the opinion that the Working Group was being used to prop up the stock markets during downturns.[5 Financial writers for British newspapers The Observer and The Daily Telegraph, along with U.S. Congressman Ron Paul, writers Kevin Phillips (who claims “no personal firsthand knowledge” and John Crudele,[8] have charged the Working Group with going beyond their legal mandate.[failed verification] Charles Biderman, head of TrimTabs Investment Research, which tracks money flow in the equities market, suspected that following the 2008 financial crisis the Federal Reserve or U.S. government was supporting the stock market. He stated that “If the money to boost stock prices did not come from the traditional players, it had to have come from somewhere else” and “Why not support the stock market as well? Moreover, several officials have suggested the government should support stock prices.”
In August 2005, Sprott Asset Management released a report that argued that there is little doubt that the PPT intervened to protect the stock market.[10] However, these articles usually refer to the Working Group using moral suasion to attempt to convince banks to buy stock index futures.
Former Federal Reserve Board member Robert Heller, in the Wall Street Journal, opined that “Instead of flooding the entire economy with liquidity, and thereby increasing the danger of inflation, the Fed could support the stock market directly by buying market averages in the futures market, thereby stabilizing the market as a whole.” Author Kevin Phillips wrote in his 2008 book Bad Money that while he had no interest “in becoming a conspiracy investigator”, he nevertheless drew the conclusion that “some kind of high-level decision seems to have been reached in Washington to loosely institutionalize a rescue mechanism for the stock market akin to that pursued…to safeguard major U.S. banks from exposure to domestic and foreign loan and currency crises.” Phillips infers that the simplest way for the Working Group to intervene in market plunges would be through buying stock market index futures contracts, either in cooperation with major banks or through trading desks at the U.S. Treasury or Federal Reserve.
What is the Plunge Protection Team?
(PPT) is an informal term for the Working Group on Financial Markets. The working group was created in 1988 by then U.S President Ronald Reagan following the infamous October 1987 Black Monday crash. It was formed to re-establish consumer confidence and take steps to achieve economic and market stability in the aftermath of the market crash. The U.S president consults with the team during times of economic uncertainty and turbulence in the markets.
The Working Group on Financial Markets’ informal name “Plunge Protection Team” was coined and popularized by The Washington Post in 1997.
What does the Plunge Protection Team Do?
The Plunge Protection Team was initially formed to advise the president and regulatory agencies on countering the negative impacts of the stock market crash of 1987. However, the team has continued to report to various presidents since that stock market crash and has met various U.S presidents on important financial matters over the years.
The team was believed to be behind the rally in the stock market shortly after a hefty drop in the Dow Jones Industrial Average (DJIA) on February 05, 2018. As per some market observers, after the plunge, the market made a smart recovery in the following days, which may have been a result of heavy buying by the Plunge Protection Team.
Who is on the plunge protection team?
The PPT several top government economic and financial officials. The Secretary of the Treasury heads the group, while the Chair of the Board of Governors of the Federal Reserve, the Chair of the Commodity Futures Trading Commission, and the Chair of the Securities and Exchange Commission, are also part of the team.
Why is the PPT secretive?
The Plunge Protection Team’s meetings or activities aren’t covered by the media, which gives rise to speculations and conspiracy theories about the team. The probable reason behind the secretive nature of its activities is that it reports only to the president. Some observers opine that the team’s role is not only limited to giving recommendations to the president; rather, the team intervenes in the market and artificially props up stock prices.
Critics claim that the members connive with big banks and profit from stock markets by carrying out trades on different stock exchanges when prices decline. They then artificially prop up the prices as part of their market stabilization efforts and profit from their transactions.
When does/have the PPT meet?
Although very little has come out in the mainstream media about the group’s activities, there have been some instances when the team’s meetings were reported. For example, in 1999, the team proposed to congress to incorporate some changes in the derivatives markets regulations. The last reported meeting of the group, at the time of this writing in June 2022, was in December 2018 when Treasury Secretary Steven Mnuchin headed the teleconference with the group’s members. Representatives from the Federal Deposit Insurance Corporation and the Comptroller of the Currency also attended the meeting.
Before the teleconference that took place on December 24, 2018, the S&P 500 and the DJIA had been under pressure for the whole month. But after Christmas, the DJIA and the S&P 500 both recovered and reversed most of the losses in the next few days. Conspiracy theorists attribute the recovery and gains in the indices to the intervention by the Plunge Protection Team.
Final Thoughts
The Working Group on Financial Markets serves an important function: to advise the president on financial markets and economic affairs. Because the exact nature of the group’s activities or recommendations haven’t been made public, some critics of the group blame the group for market intervention and artificially propping up stocks’ prices. However, some market observers believe that the team’s quiet activities are excused as it reports directly to the president.
The Exchange Stabilization Fund protects the FED.
We already know the FED is lying that raising interest rates will reduce price inflation. The Exchange Stabilization Fund (ESF) is an emergency reserve account that can be used by the U.S. Department of Treasury to mitigate instability in various financial sectors, including credit, securities, and foreign exchange markets. The U.S. Exchange Stabilization Fund was established at the Treasury Department by a provision in the Gold Reserve Act of 1934.
https://en.wikipedia.org/wiki/
THE VR FORECASTER – ANNUAL FORECAST MODEL
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FOLKS THIS ALL YOU NEEDED TO KNOW! HISTORICALLY A GOOD SIGN THAT WE ARE AT OR NEAR A MARKET TOP = BULLISH MEDIA HEADLINES LIKE THIS. RECALL THE MARCH 10, 2000 TOP HEADLINE IN THE WALL STREET JOURNAL (BELOW) RIGHT AT THE TOP!
COME ON, DAD. IT’S TIME TO EAT
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