Down goes the Dow

Ghost of Igloi wrote:

agip,

I have never been a gold bug, but when one considers just how bizarre negative interest rates are, one can see the possible store of value. Jim Grant has an interesting take on the asset that you might Google for a read. I am an optimist at heart, how could a distance runner and former coach be anything but? The facts in the market, stocks, bonds, and other asset classes makes me questions why I would want to be optimistic. So, at least one can take a conservative approach and scale back the risk, which is the position I have taken with clients.

Dr. Ed Yardeni's Blog:

In the normal situation, you don't want to be long gold if you expect the market/economy to be declining; You want to be short. See the charts for 1999-2002 and 2007-2009: If you had a portfolio back then similar to what I've had for the last year (long stocks/short commodities), you would have made money in the "crashes", but holding gold into a large disinflationary decline lost about 30% the last two times.

But, here's where it gets interesting. If you look at Yardeni's second chart (the ISM Payroll Diffusion Index), it is at a level that we have not seen since the 2009 recovery, AND...it is approaching a level where the Fed started to CUT rates in the second half of 2007 (too late). It appears the we have a job/skill mismatch, which it would appear gets resolved one of two ways: (1) Companies pay more for the skills they want, which could mean more money in workers' hands and maybe more economic growth; or (2) Companies don't hire and economic growth goes down.

I'm short gold from near the recent top on 4/29, which is essentially offset by going long the Fed Funds futures on 5/18 (which was posted on here), and, frankly, the data looks to me much like late 2007. But I'm afraid if the Fed does reverse course here accompanied by much weaker employment data, the market reaction will be very negative. Standard and Poors has been predicting new highs for the market later in the year, but that was before the latest employment data. The JOLTS out on Wednesday and the next employment report are going to be interesting.

Idiot Investor wrote:

Talk to Sally V, she has made some good trades: CHK, UNP and SPLS.

I did not write that.

Igy is jerking us around again.

Looks like the testicular autoplasty didn't work.

Lemons wrote:

Igy is jerking us around again.

Igy stole my name?

will review.

But amazing that we seem to have a worker shortage, not a job shortage. What a world. Americans do everytihng they can to shoot themselves in their feet.

I thought his procedure would be an improvement. Sorry that Igy has stolen your name. I think we need to reorganize our boycott.

Add these crimes to his plagiarism and other dirty tricks. No better than Nixon.

Dang that Igy.

coach d wrote:

I'm short gold from near the recent top on 4/29, which is essentially offset by going long the Fed Funds futures on 5/18 (which was posted on here), .

Were these real trades or more imaginary ones?

Igy, quite a batch of trolls you've got there.

So good news on the running front over here...as I think you know, I've been cooling my heels a little for a few weeks - trying to heal up mentally and physically.

I did a race today that i had signed up for a long time ago...and ran very well. Not a PR but close to it, and with some good legspeed, despite not doing much intense work.

Seems that a rest was what I needed - maybe I should schedule in more down time, even inside a season. I'm almost 50 now...I probably need more rest than I did 20 years ago.

I hope your long run went well.

agip,

Trolls are funny actually. I enjoy the attention, it doesn't happen much at my age.

Good, I had a feeling a little down time would do the trick. That is a good result and something you should be proud of. Congratulations.

My experience as an athlete and coach was that aerobic volume had certain rejuvenating properties when one was on a slow burn. Glad that whatever you are doing is working.

At my age an easy day is a day off, nothing. Ten years ago I could double and run most days. I believe it is all exponential as one ages. What I mean by that is 40 to 50, is like 50 to 55, and 55 to 60 is 40 to 60. Hope that makes sense. Also, when younger I would have the tendency to feel guilty if I took an easy day when tired. Like I was being a puss. That serves one well at a younger age, but as a master no. So I think one should err on the conservative.

Saturday was a tough one. We started with temperatures in the 60s but 80s by the end. I took Gu and water, but with the climb and heat I was done by the top of the climb, 3,000 to 4,200 feet, with lots of up and down in between. I was with two younger friends and we were out of water with two miles to go. We ended up with more than 11 miles and i was waliking in. I came home and did yard work for another two hours. Old school-old man! My son went out with a friend on the same loop this morning and was wasted when he returned. The sun can be pretty intense this time of year and starting an hour earlier usually does the trick. Next week that will be the plan.

Again happy things went well for you. Hopefully I will have some good news to report down the road.

Igy

U.S. stock futures edged higher Monday as investors took a cautious stance ahead of a speech from Federal Reserve Chairwoman Janet Yellen, who may shed light on monetary policy in the wake of Friday's terrible jobs report.

Dow Jones Industrial Average futures rose 30 points to 17,830, while S&P 500 futures added 2.70 points to 2,100.50. Nasdaq-100 futures inched up 7.50 points to 4,516.50.

U.S. stocks finished modestly lower Friday following news the economy created a paltry 38,000 jobs in May, which led investors to believe that the Fed won't raise rates at its meeting later this month. The S&P 500 closed virtually flat for the week.

"The equity reaction to Friday's data was very telling, the market struggling to get excited about the continuation of low rates, instead focusing on the weaker economy. This is another sign that monetary policy is losing its impact on markets," Simon Smith, chief economist at FxPro, wrote in a note to clients.

The dollar slumped to three-week lows after that data on Friday, but regained ground on Monday as Japanese officials jawboned the yen lower.

The pound tapped a three-week low of $1.4353 against the dollar after two new polls showed an increase in support for "Brexit," which refers to the push for Britain to exit the European Union. The U.K.'s in/out referendum is scheduled for June 23. The pound has since recovered to around $1.4401. The FTSE 100 index rose in London, up around 0.9% to 6,270.59, the best performance across European regional indexes so far as miners rose.

There are no top-tier U.S. economic figures due Monday, so investors will direct their attention to a speech from Fed Chairwoman Yellen at the World Affairs Council of Philadelphia scheduled for 12:30 p.m. Eastern Time. "The emphasis is likely to remain on the data dependence of any future rate moves, but naturally markets will be sensitive to any hints around the summer (most notably July)," Smith said.

MarketWatching

"The equity reaction to Friday's data was very telling, the market struggling to get excited about the continuation of low rates, instead focusing on the weaker economy. This is another sign that monetary policy is losing its impact on markets, maybe for once investors are paying attention to the global economic slowdown," said Igy in a note.

this is so true and I forget it too often. One of my favorite running quotes is from Rod Dixon, on exactly this issue:

"The long aerobic run is your home," says Dixon, one of a long line of New Zealand distance stars to embrace Lydiard's training methods. "Home is where you find comfort. It's where you go to sleep, to rest. Your long aerobic run is your home base. It's where you go to feel comfortable."

When Dixon awakened to discover himself as fatigued as when he'd gone to sleep, he didn't panic. Instead, he went for a run.

"A long, slow aerobic run would always correct me," says Dixon. "And this was in the middle of my European track season! I'd go out for a 2-hour, maybe 2-hour, 20-minute run. Later, when I would go through the same symptoms, I'd do the same thing."

Way to tough out a long hot one - major efforts are so important and meaningful.

agip,

I like the quote. If you haven't read it, you would enjoy Lydiard's "Running to the Top." Also, Snell's "No Bugles, No Drums." Pretty amazing 800m guy on hilly 20 miler. I forget the name of the Lydiard loop, but it was pretty arduous. Wetmore uses similar training and also has a legendary long run loop at Colorado. "Running With the Buffaloes" comes to mind when on the topic of good running books.

Igy

I've always contended that aerobic exercise is the fountain of youth. Ok, it may not bring us back, but at least it slows down the inevitable.

Pointing Out the Obvious wrote:

I've always contended that aerobic exercise is the fountain of youth. Ok, it may not bring us back, but at least it slows down the inevitable.

aerobic work is the center of it, but I think we also have to lift to keep our bodies working...we need to mimic active lifestyles even if we sit all day. lifting is one way to do that.

econ:

consumer spending high, in tight range

labor market conditions: 5th straight week of worsening numbers.

but US stocks up 18% from their 2016 lows.