Your Veteran’s Day Market Blip 11/11/15

Your Veteran’s Day Market Blip 11/11/15

Stocks today were lower at the close with the Dow falling 56 points on tepid volume to finish at 17,702. Throughout the day the markets traded in positive and negative territory. This type of trading action shows that markets are in a “pause mode” following a strong rally in October.
Bank of America (aka the evil empire) CEO Brian Moynihan yesterday indicated that he can hardly wait for the Feds to raise interest rates. He said that since the bank is sitting on half a trillion dollars at zero rates any increase in the Fed Fund rates will significantly add to the revenue stream. In filings the bank estimates that a 100 basis point move in rates could add $4.5 billion to B of A’s revenue.
Saudi Arabia's efforts to keep oil prices low is affecting Venezuela in a big way. With an economy that is expected to fall 10%, the country wants to sell more oil at lower prices to keep up with the bills but production limits and poor management are hampering efforts. According to the Wall Street Journal, Venezuela has pulled the $467 million of reserves it keeps with the IMF plus they have been selling their gold reserves. Inflation is now running at 85% and there are shortages for everything from food to toilet paper. If Venezuela can get debtors like China to agree on a debt restructuring and postpone interest and principle payments they could muddle through until oil prices rise but for now the country is in dire straights. Elections are scheduled for next month.
In another sign of our changing times, the China online “11.11” shopping holiday (singles day) smashed records by recording $5 billion in sales in just the first 90 minutes. Big winners were Alibaba and Tencent. The sales volumes seen on 11.11 exceeded those which occurred in the US Black Friday and Cyber Monday last year. While China’s economy is slowing down the 11.11 results might showcase the continuing growth of the Chinese middle class.
Cleo and I say "Thanks" to all the veterans who have served and are serving this great nation.