Wednesday, March 15, 2017

As expected by just about everyone, Fed Chairperson Janet Yellin raised interest rates by a quarter point.  If you have money in a bank, call them and ask how much more interest you will earn?  Probable answer:  What?  Then call your credit card company and ask them when the interest rate you pay will go up.  Probable answer:  Today.  And that's the saga of interest rates. 

So She Went And Did It

Never Mind the President.  Forget About Congress.  Here is who is raising your cost of living today.
Image result for janet yellen
In a few hours the cost of owning a home will go up.  Car buying will cost more.  The bottom line of any business using debt financing will suffer.  Anyone owning bonds will see a capital reduction.
All because Janet Yellin and her Federal Reserve partners will decide to raise interest rates by a quarter point.  No Congressional action needed.  No signature by the President required.  No Supreme Court review.  After she announces the decision banks will instantly raise what they charge borrowers .  No waiting period for this.
And who elected the Federal Reserve?  Nobody.

Thursday, February 23, 2017

Image result for dummies

Follow The Smart Money?
Last night Tesla reported quarterly earnings.  Its loss widened to $293,000,000, up from $184,000,000 in the previous one.  But Elon Musk did his usual superb job of showmanship and before you know it the stock was trading up five or six dollars in after-hours trading.

This morning, again, the stock was up several dollars in premarket. Note that the pre and post markets, outside of regular trading hours, are mostly populated by professional traders, the smart money.
And so:  Tesla opened for actual trading this morning down over ten dollars a share.  

Tuesday, January 31, 2017

How Many Companies in the Stock Markets?
Over 5,000 or less than 10?
Image result for photo of cnbc reporting about apple
Sure Apple is becoming the world's biggest company? Certainly everyone uses Google.  Who doesn't know about Facebook?  What closet has no Under Armour?
Maybe CNBmute should consider reporting about the other 5,000+ companies once in a while.

Monday, January 23, 2017

A Million Sellers.
What Did You Expect Markets Would Do?
Image result for women's marchThis opinion has nothing to do any which way on the motives or feelings of those who participated in the Big March on Saturday, in DC and around the world.  Maybe they are right, maybe they aren't.

We only comment on the expected effect on the equity markets. When any group voices frustration in an active manner, it is unlikely the members thereof will wake up Monday morning and start buying stocks.  More likely, lots of Sell orders first thing.

So, we expected a market downdraft this morning.  Just as we expect a reversal tomorrow, if not later today.

Wednesday, May 18, 2016

Tesla Motors, Inc. (TSLA)

211.17  6.51(3.18%) 4:00PM EDT
After Hours : 203.65 Down 7.52 (3.56%) 4:10PM EDT - Nasdaq Real Time Price
 This morning, before the markets opened, Goldman Sachs put out an upgrade on Tesla.  So the markets reacted positively to the tune of 3.18%.
 Then, minutes after the markets closed today, the company announced the sale of about $2,000,000,000 in new stock, some by the company and some by the company's founder Elon Musk.  Within seconds, shareholders started selling, giving back the day's gain.  In fact, the shares are even lower than the screenshot headlining this post.
  Several Wall Street banks are handling the sale.  Including Goldman Sachs.

Why Is The Fed In The Shpilkes Business?
Later this morning the Federal Reserve releases the Minutes of its last meeting, about a month ago.  Big change in tradition for the Fed which several years ago kept the Minutes secret.

Immediately after the release the market will react one way or the other and then probably reverse after a few minutes.  Because nobody will know what the Minutes really mean.

The Fed meets every so often to set interest rates, releasing enigmatic language afterwards subject to infinite interpretations.  Then individual Fed members fan out across the world, making speeches, giving their own views and sometimes even more dense wordings.

All of this adds up to a free day for market mavens to tell us what they think the Fed will do and that leads to a nervous condition for investors.  
Congress meets in public.  Supreme Court hearings are open to the public.  The President's every move is watched.
But the Fed meets in private and then gives us FedSpeak.

Which leads us to Shpilkes.  From the Wordnik online reference:  A state of impatience or agitation