Down goes the Dow

Trends are not predictions.

The three main U.S. Stock indexes posted weekly gains, with the Dow Jones Industrial Average up 1.8% for its strongest weekly gain in a month. The S&P 500 and Nasdaq Composite also logged weekly gains. Stocks found broad support this week from better-than-feared corporate earnings, which helped limit declines.

Kate Warne, an investment strategist at Edward Jones, cautioned against reading too much into the Friday decline, saying next week's earnings reports and the outcome of the Doha, Qatar, meeting of oil producers would likely determine the future tone of markets. "This is really a wait-and-see market rather than one where investors have a clear sense of the direction going forward," Warne said.

Crude-oil futures dropped after reports that Iran's oil minister Bijan Zanganeh won't attend the Doha gathering this weekend but instead will send a less prominent representative. Optimism about a possible multilateral agreement, which had supported prices earlier in the week, continued to fade on the news, leaving oil prices to unwind a significant portion of their prior weekly gains.

But while oil prices weighed on energy shares, Citigroup Inc. (C)reported that revenue and profit declines weren't as severe as expected, adding to hopes that the first quarter corporate earnings season might be better than expected.

Investors had braced for possibly the worst earnings quarter since 2009, but so far, companies have broadly outperformed lowered expectations. Worries about poor financial-sector performance were particularly acute, but several of the country's largest banks--including Citigroup, J.P. Morgan Chase & Co.(JPM) and Wells Fargo & Co.--have done better than expected.

Have a good weekend (as in no thinking about trading) might not be the course this weekend, due to the meeting of oil producers/non-producers in Doha. As someone said in a currency trading blog:

I'm putting in stops for the Globex session, but equity investors could see the market sharply higher or lower at opening Monday than it closed on Friday.

You are hereby warned.

Uh, I'm pretty sure coach said it could go "higher or lower". Not e boldest prediction, but he certainly didn't say it would drop for sure.

I'm a trend follower, so I don't make market predictions. The only prediction I'll make is that the meeting this weekend has the potential to roil the markets in a big way. I think if I was Saudi Arabia or Russia, I would do the minimum in production cuts to keep prices in the current range, but I haven't the slightest idea what they're going to be willing to do. Thus far, all the Saudis and Russians they've been willing to agree to is to not increase production above the maximum they are able to produce (that is, not invest in additional production capability). I think the markets are looking for more than this.

What is with all the negativity about Stockman? Yes, he always seems to wax negative on the stock market no matter if the S&P 500 triples in value. But IMO, within that group of people along with Peter Schiff and Rogers, Stockman is way better. I've just seen a few interviews of him over the years and read a couple of his articles. But I see him as one of the few TRUE conservatives who gives conservatism a good name.

Stockman was the architect of the Reagan deficit. So much for conservatism.

Long dollar, short equities

No he wasn't. Its well known that he had a falling out with the Reagan administration because Reagan was increasing spending. Stockman wanted to cut top marginal tax rates but he believed in the end they had to be paid for. Again, you can disagree with Stockman. But he was a true non hypocritical conservative who was refreshingly honest with the media.

Mango Jerry wrote:

Stockman was the architect of the Reagan deficit. So much for conservatism.

Not exactly. Stockman bailed AFTER the damage had been done. His fingerprints are all over the Reagan deficit.

Of the budget process during his first year on the job, Stockman was quoted as saying, "None of us really understands what's going on with all these numbers."

Stockman was responsible for negotiating with Congress about the budget. At the end of Carter's last fiscal year (ending in Reagan's first year), the national debt was $908 Billion. At the end of Stockman's last fiscal year with the administration, the debt was $2.1 Trillion.

Don't stop with Stockman. The 1981 Fiscal debt that Reagan inherited from Carter was $.97 trillion. The 1993 Fiscal Debt that Clinton inherited from George H.W. Bush was $4.3 trillion. In 2010 dollars, the combined Republican President fiscal debt is STILL $2 Trillion more than the combined Democratic President debt, even counting the $1.4 trillion deficit Obama inherited from GWB and the near Second Great Depression he also inherited. The whole truth about what conservatives/republicans have done to the public debt is on usgovernmentspending.com.

In 1970, the maximum Federal marginal tax rate was 70%. AFTER Regain cut the taxes for the wealthy (but taxes for the poor went up when you count Social Security), in constant dollars, the only time the real income of the bottom 90% of people was higher than in 1970 was during the last 2-3 years of Bill Clinton's Second Term, BUT the real income of the top 10% doubled during that time. And if you want to claim I'm making any of this up, here's the truth:

https://www.technologyreview.com/s/531726/technology-and-inequality/

This is the truth of what conservatism will do for you.

What does all of this say about people who tout Stockman as some sort of investment expert? Clearly he is not.

Jerry,

Chill out, have a beer, chips and mango salsa.

Igy

Jerry,

Here is Stockman's latest. Read while enjoying a beer, chips and mango salsa. Reality will hit your fairy tale world.

http://davidstockmanscontracorner.com/the-keynesian-house-of-denial/

Igy

I don't live in a fairy tale world. It's too bad that you cannot accept that there are other legitimate points of view.

Here's a great example of Stockman's ignorance on display. Thanks for providing it, Igy

"In that regard, we have frequently pointed out that behind all the pretentious jargon and faux economic science of the likes of Yellen, Bernanke, Dudley and Fischer is little more than the “D” word. They believe that an economy can never have enough Debt."

stockman writes:

"The very worst thing the state can do is meddle with and falsify financial market prices. Sooner or later cheap debt, repressed volatility, stock market “puts” and artificially inflated asset prices drain the genius of markets out of capitalism. What remains in the financial system is raw speculation for the purpose of rent gathering and leverage for the purpose of supercharged gambling.

On the other hand, what gets lost is true capital formation, honest price discovery and allocative efficiency. These are the building blocks of true macroeconomic expansion and rising wealth."

Which may *sound* right, but the gov't in the form of the fed has been manipulating asset prices at least since the 1987 crash and in that time the country has done very well. The market cycle has been mellowed, I believe, and quality of life has gone up.

there are many, many other factors, including the massive debt piled up since then, but I'm saying that government meddling with asset prices does not seem to be a serious problem.

Jerry,

OK, I will give you the point here. Mostly I am just giving you and others that go off the deep end on Stockman a hard time. He has warts, but so do many market commentators.

Igy