Another day another ruthless, demoralizing beating for stock market bulls on Tuesday. A weak open gave way to a giddy rally that took stocks almost 1.5% higher. All was well and good until about lunchtime at which point all the joy was sucked out of Whoville and sellers regained controlled. By the merciful closing bell the S&P 500 Index (^GSPC) was down nearly 1%. It's darkly appropriate that the trading traced out a one-day pattern I call the Christmas Tree of Death. At this point investors are just looking for excuses to sell. As it happens the world is giving out plenty of them, including FedEx (FDX) profits which missed the mark this morning. Those shares are set to open sharply lower.
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As for the others, you know the list by now. Crude in collapse, flight to safety by institutions, Putin is a lunatic etc. ad nauseam. The ruble traded in a more than 30% range yesterday. I'm a child of the Cold War. I'm not inclined to be all that sympathetic to the old Soviet Union. That said I can't imagine what it's like to live in Russia with assets stuck in that toilet paper currency. I'd rather be whipped by Cossacks. Or forced to buy the dip in oil (CLK15.NYM). Same thing.
All the things we've been discussing for weeks have gone mainstream. I read "dislocation" in USA Today this morning and looked for a footnote to stories we ran when crude was hovering around the $70 a barrel level. Stocks have been down 6 out of the last 7 days and it feels worse than that. There's nothing left to say about the economics of this mess.
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In Christmas specials that's when the hero shows up. Real life doesn't always work that way. There's only 7 shopping days 'til Christmas and there are zero good tidings to be had at any price. I can't even believe I'm saying this but we've got one last, best hope for a trading rally that lasts more than a couple hours. The FOMC makes its statement today at 2pm ET, followed by Chair Janet Yellen’s press conference at 2:30.
You don't have to believe in the central banks as a concept. You can hate stimulus and I won't fight you. But unless you're anti-Christmas you want Yellen to be dovish today. You want her spiking the punch bowl one last time. Bulls have been reduced to needing a Santa Yellen. Unless she shows up the Dow Industrials (^DJI) may be looking at its first down year since 2008.
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