Stock Market News

According to this Bloomberg report:

Hedge fund manager Kyle Bass has been pushing a short Japanese bond trade for years, eventually he may be right.

Here are some stories today that caught my eye.

"A person familiar with Goldman's equities trading business said Taylor's trading position was significant - representing roughly 20 percent of e-mini trading volume the day it was established. The market moved against Taylor's position, leading to the loss, said the person, who declined to be named."

As I wrote in this weekend's monthly newsletter I think the US stock market at this point has very limited upside and for the short-term the risks are too the downside. I don't want to go through all of the reasons now as I outlined them in the newsletter, but the upside potential for the US stock market right now is like 1550 on the S&P 500, which would be a gain of about 3.3% from here. It's hard for me to justify trying to "play" the market at this point to try to make such a little return.

My view is a little different than Faber's - my guess is we get some sort of dip in February/March and then not much volatility in the US stock market after that. I don't think we are going to see some big crash this year or huge rally this summer once this move dies out. I think the market action will just fade out and we'll see rallies in commodities and world markets which diverge from the US. More on this in my next monthly newsletter.

I don't have to tell you about the bad fiscal cliff news today. You can turn on CNBC and hear all about it.

Just the other day CNBC was saying that a budget deal was close and the stock market went up. Now the press is saying it might now happen!

Reuters this morning:

The Washington Post is reporting today that a fiscal cliff deal is near, and will either happen in the next few days or won't get done at all:

I bought VIP back in August and it has been one of my best performing stocks. The Russian telecom company has gone up 26% since I bought it. Today it announced that it is going to pay an eighty cents dividend to shareholders of record at the end of the month. That's like a seven percent dividend.

Pretty nice. It's the largest telecom company in Russia and Eastern Europe.

I don't know what is going to happen with the "fiscal cliff." I don't know if Obama and the Republicans will come to a deal before the end of the year to prevent it from happening or not. If it does happen I don't think it will have a huge impact on the economy or the stock market - not in the big picture. However, it probably will cause some short-term selling. Really they don't seem to be to concerned about it.

Today the Fed is going to release a new FOMC statement at 12:30 PM. People are anticipating that they will announce a new QE money printing operation on top of the one they announced a few months ago. They are hoping for a new money pump that will force the stock market to go even higher. You see the US stock market is now fully valued so this is what it takes to make it go up nowadays.

Investors have been selling stock funds and buying bonds that yield nothing. They have been doing this all year, but as the market has dropped have done so even more:

According to Reuters:

Due to the hurricane the New York Stock Exchange and Nasdaq are both closed today. They were going to do electronic trading, but decided to shut it too. They may be closed tomorrow.

The big news of the week caused a big upward movement in equity values. Despite economic announcements pointing toward a further slowdown at home and abroad, it was the announcement by EU leaders of an agreement to allow member countries to relax harsh austerity measures that flavored market moves.

"High frequency traders using computers to flip stock in a fraction of a second may be generating as much as 42 per cent of all trades in Canadian stocks."

From Bloomberg: