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Better NFP Gets a Yawn


The nonfarm payroll report beat the number, but had almost none of the usual instantaneous impact on various markets that it has in the past. (As I noted a while back, I think it is losing its significance as a driver of speculation -- not that it matters too much.) Nonetheless, most markets liked the news, with the stock market gaining about 0.75% through midday, led by the Nasdaq, with the S&P in second place and the Dow just up fractionally and kind of sputtering (not that such bits of minutia make much difference, either).

In the afternoon, the Nasdaq rally stalled out, but the Dow/S&P gained ground, leaving the market almost 0.5% higher on the day.

Away from stocks, green paper was a little higher, but mostly against the yen. Fixed income didn't seem to mind the NFP report, as it was flattish, while oil climbed a percent. Turning to the metals, they were a little higher, with silver bouncing 0.5% compared to a fractional gain on the part of gold.

Ready Ore Not? Meanwhile, the miners behaved "better" and I could argue this makes the second and possibly third day in a row of them doing that (but I may be being a bit too generous). In the past (when it's become a trend), this has been an indicator of forthcoming higher prices, although I think it is too early to say it's a trend just yet.

The apathy towards gold reminds me a lot of how the metals markets were viewed in the late 1990s, i.e., as basically irrelevant in the "new era" of dot-coms. Now precious metals are deemed to be irrelevant in the "new era" of cryptocurrencies.

Is This a Put-On? On that topic, Sunday night we will see the first Bitcoin futures contracts begin trading. Some folks speculate that will bring forth sellers, as thus far it's apparently been rather difficult to short them. I know nothing about that or even if it's possible, although obviously it will become so. My guess is, if the introduction of futures trading doesn't take the price down immediately, the bulls will try to run it again, but there really is no point in trying to have a speculative opinion about something that is as stratospherically parabolic as Bitcoin has become. I intend to continue watching from the sidelines and have no interest in getting involved either way.

A Fitness Test in P/E Class In the last week or so readers may have noticed that I have made a habit of "grading the market." That is not a feature I intend to deploy prospectively, and I only started doing that because I thought the market could exhaust itself on the Senate's passage of the tax bill. That said, on that score, I would grade today as initially making a pretty strong case for the bulls that exhaustion hadn't arrived just yet. However, the fact that the Nasdaq rally sputtered so badly makes me describe today as neutral/strong and think that there is still a chance that we are seeing exhaustion (even if it won't take much more upside to invalidate my thesis).