Beware Wall Street's Charging Bull: "We Are In A Massive Bull Market"

UPDATE Feb 10, 2018: see "3) Investing: The Week, Investing Notes," in Tech Review | Elon Musk Week: Falcon Heavy Launch of Starman in a Tesla.

UPDATE Feb 6, 2018: Dow closes up more than 560 points, S&P 500 closes up almost 2 percent, Nasdaq closes up more than 2 percent:

Photo: Sam valadi/Flickr

SeekingAlpha.com comment Feb 3, 2018: "... there is a massive..massive amount of global institutional money on the sidelines that could not place a position because the market was too strong. U.S. M1 is up 11.8% from a year ago. This is enormously bullish. The p/e is 20x forecasted earnings. The only times the forecasted earnings fail is when monetary policy is the opposite of the forecast. That is not the case today. The BAA corporate bond is 4.34%...4.34%. In August of 1987 prior to a large sudden drop in the S&P it was 10.92%..10.92%. Think about the difference. We are in a massive bull market. No institutional investor is going to sell his equity position to switch into bonds or cash earning 1%. Besides being financial performance suicide it would be marketing suicide."

UPDATE Feb 5, 2018: 
So What Do I Think about the “Crash” in Stocks? | WolfStreet,com: "What’ll happen next? Dip buyers will come in, maybe at this very moment, or maybe later, and some of them will likely get plowed under, but there is way too much cash lined up in hedge funds specifically set up to profit from sell-offs."

This Is A Normal, Bull Market Correction: J.P. Morgan Strategist Gabriela Santos

CNBC video above published Feb 5, 2018: Gabriela Santos, J.P. Morgan Funds global market strategist, and Jeremy Zirin, UBS head of investment strategy Americas, discuss their investment strategies during the market sell-off.

Ray Dalio: Recent market declines are just 'minor corrections' | cnbc.com Feb 5, 2018: Dalio said, "these big declines are just minor corrections in the scope of things, there is a lot of cash on the side to buy on the break, and what comes next will be most important."

Legendary Investor Bill Miller On Dow's 500 Point Sell-Off

CNBC.com video above published Feb 2, 2018: CNBC's Brian Sullivan speaks with Bill Miller, Miller Value Partners, and Charles Ellis, Greenwich Associates, discuss the current global market environment.

Milken Institute's Lee Says Fed Doesn't Seem All That Nervous

Bloomberg.com video above published Feb 2, 2018: William Lee, chief economist at the Milken Institute, discusses the job market, Fed rate hikes and investment spending on "What'd You Miss?"

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MacroView Aug 2: Contagious Investor Confidence But Euro Stocks Fall

Contagious investor confidence

Low volatility encourages risk taking, as does rising prices. The FT.com's capital markets editor Dan McCrum says confidence is contagious and most of the world seems to have it. Published Aug 1, 2017, by FT.com.

Apple pushes Dow past 22K

Video above published Aug 2, 2017, by FoxBusiness.com: H Squared Chief Research Officer Hitha Herzog and Tech Analyst Russ Frushtick on Apple’s strong earnings report and its future production in the U.S.

European Stocks Fall for the Fourth Day in Five

Aug 2, 2017: European stocks moved lower as the Stoxx 600 fell 0.47 percent. Bloomberg.com's Mark Barton breaks down the day's trading on "Bloomberg Markets: European Close."

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U.S. Federal Reserve FOMC Press Conference LIVE Video Replay 12/14/16

FOMC Press Conference, December 14, 2016:

Streamed LIVE December 14, 2016, at 2:30 pm EST (US): Federal Open Market Committee (FOMC) Press Conference

See also:

• FRB: Press Release--Federal Reserve issues FOMC statement--December 14, 2016: "... the Committee decided to raise the target range for the federal funds rate to 1/2 to 3/4 percent."
• Dow hits record high after Fed raises interest rates | CNBC.com: "... the macro environment has changed dramatically."  3 more hikes likely in 2017. 
• Dow Heading for 20,000, Stocks Rise, Gold Falls Ahead of Fed Rate Hike | DomainMondo.com
• @federalreserve

About the FOMC (source: federalreserve.gov):

The term "monetary policy" refers to the actions undertaken by a central bank, such as the Federal Reserve, to influence the availability and cost of money and credit to help promote national economic goals. The Federal Reserve Act of 1913 gave the Federal Reserve responsibility for setting monetary policy.

The Federal Reserve controls the three tools of monetary policy--open market operations, the discount rate, and reserve requirements. The Board of Governors of the Federal Reserve System is responsible for the discount rate and reserve requirements, and the Federal Open Market Committee is responsible for open market operations. Using the three tools, the Federal Reserve influences the demand for, and supply of, balances that depository institutions hold at Federal Reserve Banks and in this way alters the federal funds rate. The federal funds rate is the interest rate at which depository institutions lend balances at the Federal Reserve to other depository institutions overnight.

Changes in the federal funds rate trigger a chain of events that affect other short-term interest rates, foreign exchange rates, long-term interest rates, the amount of money and credit, and, ultimately, a range of economic variables, including employment, output, and prices of goods and services.

Structure of the FOMC

The Federal Open Market Committee (FOMC) consists of twelve members--the seven members of the Board of Governors of the Federal Reserve System; the president of the Federal Reserve Bank of New York; and four of the remaining eleven Reserve Bank presidents, who serve one-year terms on a rotating basis. The rotating seats are filled from the following four groups of Banks, one Bank president from each group: Boston, Philadelphia, and Richmond; Cleveland and Chicago; Atlanta, St. Louis, and Dallas; and Minneapolis, Kansas City, and San Francisco. Nonvoting Reserve Bank presidents attend the meetings of the Committee, participate in the discussions, and contribute to the Committee's assessment of the economy and policy options.

The FOMC holds eight regularly scheduled meetings per year. At these meetings, the Committee reviews economic and financial conditions, determines the appropriate stance of monetary policy, and assesses the risks to its long-run goals of price stability and sustainable economic growth.

For more detail on the FOMC and monetary policy, see section 2 of the brochure on the structure of the Federal Reserve System and chapter 2 of Purposes & Functions of the Federal Reserve System. FOMC Rules and Authorizations are also available online.

2016 Committee Members
Janet L. Yellen, Board of Governors, Chair
William C. Dudley, New York, Vice Chairman
Lael Brainard, Board of Governors
James Bullard, St. Louis
Stanley Fischer, Board of Governors
Esther L. George, Kansas City
Loretta J. Mester, Cleveland
Jerome H. Powell, Board of Governors
Eric Rosengren, Boston
Daniel K. Tarullo, Board of Governors

Alternate Members
Charles L. Evans, Chicago
Patrick Harker, Philadelphia
Robert S. Kaplan, Dallas
Neel Kashkari, Minneapolis
Michael Strine, First Vice President, New York

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Dow Heading for 20,000, Stocks Rise, Gold Falls Ahead of Fed Rate Hike

Blue-chip index nears milestone as tech joins the Trump rally--Traders assign 100% odds to a Fed rate hike on Wednesday:

DJIA 3-month chart (source: google.com)

S&P500 Index (source: google.com)

Fed Interest Rate Hike Bad News For China? At the Federal Reserve Open Market Committee (FOMC) meeting on Wednesday, an interest rate hike of 0.25% is expected. This rate hike will be only the second increase by the Federal Reserve in 10 years (the first increase took place December 2015). This may have ramifications on emerging markets in general and China in particular which faces an economic slowdown. A U.S. interest rate increase will likely increase capital outflows and generate additional growth headwinds for China. 

Headlines Tuesday leading up to the expected Fed Rate Hike:

Dow Heads for 20,000 as Stocks Rise, Gold Falls: "Global stocks advanced, sending the Dow Jones Industrial Average within 50 points of 20,000 on speculation that the Federal Reserve’s expected rate increase is a signal of confidence that the economy is strengthening. The dollar and Treasuries were little changed. IBM Corp. and Intel Corp. led gains in the blue-chip index as it heads for a fresh record and the round-number milestone ... Its relative-strength index stood at the highest level in two decades ..."--Bloomberg.com

IBM Lays Out Plans to Hire 25,000 in U.S. Ahead of Trump Meeting: "IBM Chief Executive Officer Ginni Rometty said she plans to hire about 25,000 people in the U.S. and invest $1 billion over the next four years, laying out her vision for filling technology jobs in America on the eve of a meeting of industry leaders with President-elect Donald Trump. Rometty, who is on Trump’s advisory panel of business leaders, will join Facebook Inc.’s Sheryl Sandberg, Amazon.com Inc.’s Jeff Bezos and Alphabet Inc.’s Larry Page and Eric Schmidt at a summit with Trump Wednesday in New York that is said to focus on jobs."--Bloomberg.com

Small Business Owners' Optimism Skyrockets Following Trump Victory: "The November reading of the National Federation of Independent Businesses' small business optimism index jumped to 98.4 from 94.9 — its sharpest surge since 2009 — with all of the increase in sentiment coming after the U.S. elections held on Nov. 8."--Bloomberg.com

After talking with Trump, Bill Gates likens president-elect to JFK: "... in the same way President Kennedy talked about the space mission and got the country behind that, I think whether it's education or stopping epidemics ... [or] in this energy space, there can be a very upbeat message that [Trump's] administration [is] going to organize things, get rid of regulatory barriers, and have American leadership through innovation ... Of course, my whole career has been along those lines. And he was interested in listening to that. And I'm sure there will be further conversation."--Microsoft co-founder Bill Gates after recently speaking with Trump--CNBC.com.

"Allegations of Hacking Election Are Baseless" Say High-Level American Intelligence Officials: "The various ways in which usually anonymous spokespeople for U.S. intelligence agencies are equivocating – saying things like “our best guess” or “our opinion” or “our estimate” etc. – shows that the emails alleged to have been “hacked” cannot be traced across the network. Given NSA’s extensive trace capability, we conclude that DNC and HRC servers alleged to have been hacked were, in fact, not hacked."--WashingtonsBlog.com

Obama Says No Evidence that Russia Tampered with Votes in Election: During an interview with the Daily Show’s Trevor Noah, Obama downplayed the hack of a private email account of Clinton campaign chief John Podesta. "We were frankly more concerned in the run up to the election to the possibilities of vote tampering, which we did not see evidence of, and we’re confident that we can guard against ... None of this should be a big surprise,” Obama said, “Russia trying to influence our elections dates back to the Soviet Union.” Obama dismissed the hack and the leaked emails as “not very interesting” and lacking “explosive” revelations. He puzzled as to why it was an “obsession” by the news media despite the knowledge that the Russians were responsible.--Breitbart.com.

Trump's selection of  Tillerson lifts hope of US rapprochement in Moscow: "Sergei Karaganov, one of Russia's most senior foreign policy hands, says the difference is that Tillerson is a hard-nosed pragmatist who [as Secretary of State] will focus on getting things done, and leave aside the many political and philosophical issues where Russia and the US will never agree. Like many in Moscow's upper circles, Mr. Karaganov has met Tillerson and says that his ratification would be a signal that genuine and lasting detente between the two powers is a real possibility."--CSMonitor.com

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Happy Thanksgiving To All, Including President-elect Trump & Family

• Dow Jones Industrial Average (DJIA): A rising Dow lifts all boats higher around the world's exchanges as Australian stocks (ASX) make big gains | CityAM.com
• The Trump effect pushes the Dow above 19,000 in New York | CityAM.com

Consumer Sentiment in U.S. Jumps To A Six-Month High After Trump Election Victory: Consumer confidence in the U.S. rose 8.2 points post-election to a six-month high in November, showing Americans became more optimistic about their finances and the economy after Donald Trump won the Presidential election. Americans were heartened on the whole by Trump’s victory over Democrat Hillary Clinton, with broad gains in confidence across incomes, ages and regions, according to the survey released Wednesday by the University of Michigan, as reported by Bloomberg.com.

Sean Spicer, the Republican National Committee’s communications director, said on Monday morning’s transition update call that President-elect Trump may leave for Florida on Tuesday afternoon or Wednesday morning, and intends to spend Thanksgiving at his Mar-a-Lago Club (domain: maralagoclub.com) in Palm Beach, Florida, with his family.

Palm Beach security zones for President-elect Trump & family

Coast Guard, partner agencies to establish security zones near Palm Beach | USCGnews.com: "MIAMI – The Coast Guard is establishing security zones in the Intracoastal Waterway and offshore near Palm Beach beginning Tuesday. The security zones are scheduled to begin at 4 p.m. Nov. 22, and scheduled to continue until the afternoon of Nov. 27, to include certain waters of the Lake Worth Lagoon, Intracoastal Waterways and the Atlantic Ocean in the vicinity of Mar-a-Lago Club and the Southern Boulevard Bridge in Palm Beach. The security zone is necessary to protect the VIP and accompanying official party, the public, and the surrounding waterway from terrorist acts, sabotage or other subversive acts, accidents, or other causes of a similar nature. Entering, stopping, or anchoring in this security zone is prohibited unless authorized by the Captain of the Port Miami or a designated representative. The security zone will be broken into three zones [see map above]."

Palm Beach security zone restrictions:

• Zone (1): This zone is always in effect. No vessels or person will be permitted to enter this zone consisting of the waters of the Lake Worth Lagoon from the southern tip of the Everglades Island in the north to approximately 1,000 yards from the south of the Southern Boulevard Bridge on the south and eastern shore line west of Fisherman Island.
• Zone (2): This zone is always in effect. All vessels transiting the second zone shall maintain a steady speed and shall not slow or stop from waters of the Lake Worth Lagoon including the Intracoastal Waterway from the southern tip of the Everglades Island in the north to approximately 1000 yards from the south of the bridge on the south and from the western shore line to the western edge of the Fisherman Island in the east.
• Zone (3): This zone is always in effect. All vessels transiting the third zone shall maintain a steady speed and shall not slow or stop from waters of the Atlantic Ocean from the Banyan Road in the north to Ocean View Road in the south and from shore to approximately 1000 yards east of the shoreline.
• Vessels seeking authorization to transit the security zones must contact the Coast Guard via marine-band radio via VHF-FM channel 16.
• Violation of a security zone may result in a civil penalty in excess of $88,000, a criminal penalty up to $10,000, and/or imprisonment up to 12 years. 

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