Monday, stocks in Asia fell slightly while stocks in Europe were flat. U.S. stock markets were closed. Tuesday, Asian and European stock markets closed virtually unchanged. In the U.S., stocks closed up slightly on low moderate volume. Although precious metals fell nearly 1%, their miners rose in the neighborhood of 2%. After the bell, turkey stock IBM reported its most recent earnings lie. It was a disaster, but creative accounting helped paper it over.
Wednesday, stocks in Asia rose 0.5%, but in Europe and the U.S. stocks moved little. Precious metals declined 1% while their miners lost about twice that amount. Thursday, stocks in Asia fell 1.4% in reaction to fears of a slowdown in the Chinese economy. In Europe, the decline was 1.1% and in the U.S. it was 1% on low moderate volume. The VXO shot up nearly 10%, closing at the still very complacent level of 12.67. Precious metals gained 1.5% and their miners moved up about twice that amount. The 10-Year U.S. Treasury Bond yield cratered over 3% to close at 2.77%.
Friday, stocks closed down in Asia 0.7%, in Europe 2.4%, and in the U.S. 2.6% on moderate volume. The VXO shot up 29% to close at the still benign level of 16.33. Precious metals held firm. For the week, 10-Year U.S. Treasury Bond yield dropped over 3% to close at 2.74%.
This was the day when the endless Federal unemployment checks finally ran out. This was the month that the Federal Reserve bought slightly less debt than it did the previous one. Next week, it is expected that the FOMC will vote for less debt purchases. Earnings fantasies are getting more bizarre with each passing quarter. Of course, margin debt has been at record highs. Where are the perpetual bulls today who have been screaming we need to “buy the dip”? At some point, reason and reality will have to return. The stock market and much of the apparent wealth we see all around us is hanging by an artificial thread of debt. When it unwinds, it will be swift.