The Market Bull – December 3, 2019
The major averages close with large losses, but off their lows for the day. Spooked by Trumps comments about the trade war continuing until after the election.
The Institute of Supply Managers New York report gained 2.7 points in November to an expansionary 50.4, the first positive reading in 3-month’s, on strength in the 6-month outlook. The remaining details were weak. Price data remains high but slipped a little to 62.
The Federal Reserve’s Repo Market operations have now funneled some 3 trillion in short term loans, since September 17th, to various unnamed Wall Street banks for as yet still unknown reasons. No hearings, no explanations, no nothing, though a hearing is scheduled for tomorrow for the House Financial Services Committee. Noticeably absent from the list of topics for discussion is what legislative authority the Federal Reserve has that gives it the legal power to be pumping out hundreds of billions of dollars each week in revolving loans to various unnamed banks. Given that most of them are publicly traded. It begs the question if a publicly traded company cannot obtain loans from anywhere other than the cheap money spigot of the Federal Reserve, it needs to publicly disclose that to its shareholders and potential buyers of its stock. As material facts like this must be legally disclosed. Shenanigans like this don’t promote free, open or fair markets. According to Section 1101 of the Dodd-Frank financial reform legislation of 2010, both the House Financial Services Committee and the Senate Banking Committee are to be briefed on any emergency loans made by the Fed, including the names of the banks doing the borrowing. Continuing Repo operations like this for 2.5 months plus certainly suggests that there is some kind of problem, and one that should be disclosed.
Standard and Poors 500 Index closed at: 3,093.20 down 20.67
NASDAQ finished the day: 8,520.64 down 47.34
Gold ended trading at: $1,483.30 up $14.10