The struggle is real.

Even though all the major equity indices finished down on the day except the Dow Jones Industrial Average (DJI), which finished unchanged, it was a sloppy hopeless day of confusion.  

There is still time, but it is feeling like the mid-term election rally might fizzle after all. That wouldn’t be unusual for a bear market, but October and November were big winners.

While the stock market is drifting lower, the real action is in the bond market, where yields are declining at a pace that speaks less of normalcy and more of a recessionary panic.

Oil Spill

When crude oil was up more than 60% earlier this year, I would have taken all bets against it, erasing all those gains and lurching into the losing side of the ledger. This is difficult to fathom. There may be technical factors, but the rapid decline speaks to concerns of a global recession even if China reopens, and that is going to happen (don’t confuse easing some restrictions with freedom). There are still issues ahead that could turn oil around, but as a recession proxy, it’s speaking loudly.

Passing the Buck

The Dollar (DXY) continues to ease, but it’s hanging around the key support of 105. So, a move below there should be a plus for the stock market.

Charging Through Recession

We got the latest on consumer credit, which rose 6.9%, powered by revolving (credit cards) +10.4% and non-revolving +15.8%.

These are hefty totals, although the consensus was looking for more (yep, the consensus game strikes again)

Plastic Piling Up

There has been a cooling from the record high monthly credit card totals. But make no mistake; revolving credit has gone up $27.0 million in a single month, which is a lot of money and doesn’t reflect a ‘strong’ consumer.

Credit card delinquency rates are benign but beginning to lift off.

Also, bad news for those out there that have been flipping Dodge minivans; the jig is up as vehicle prices are beginning to come down from the mother of all price joy rides.

Heat Map

Three sectors managed to finish higher as the three growth sectors once again brought up the rear.

 

Tesla (TSLA) stands out as Elon Musk pays the price for going against the establishment. Bernard Arnault of Louis Vuitton surpassed him yesterday as the richest man in the world.  

Portfolio Approach

There are no sector weighting changes to our Hotline Model Portfolio.

Today’s Session

Continuing jobless claims edged higher and might eventually catch the attention of the Fed.

Crude oil up on Keystone news.

I know everyone is champing at the bit…me too.

Tomorrow is very consequential, and we may do something before the close. If you are not a subscriber to our Premium Hotline service, email Info@wstreet.com to join today.

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