DOWN DAY

Monday was not a nice day on Wall Street as market takes a tumble with Internet companies leading the downfall. The Nasdaq suffered its worst three-day decline since late 2011. Utilities provided one of the few bright spots by finishing up for the  day.

That utility stocks are now the best performing sector so far this year is troubling indeed. The sector has a long history dating to the 1920s of front-running volatile periods and market corrections.

http://www.marketwatch.com/story/what-keeps-bulls-and-bears-up-at-night-2014-04-07?link=MW_TD_latest

ASIAN, EUROPE MARKETS DOWN

Asian markets sold off Monday in wake of what happened Friday in US markets.
http://blogs.marketwatch.com/thetell/2014/04/06/asia-markets-live-blog-tech-troubles/

And the story in Europe wasn't any different as several markets there turned down.
http://www.marketwatch.com/story/european-stocks-drop-sharply-bouygues-loses-bidding-fight-2014-04-07?dist=markets

WINNING IN THE MARKET

It's not always about new highs and lows, bond ticks or price-to-earnings ratios. Inverted yield curves, volatility and spreads, to be sure, can be important. But they're not everything.

Sometimes it's the things one comes across outside the world of investing that makes one a better investor. Too many people keep waiting to get that last piece of information before pulling the trigger. Such is a cut from the same cloth as doing almost no homework before jumping into a position.

Who among us has not been guilty of both?

Sometimes more is less and less is more. There are no fast, hard, inviolable rules. With that in mind here is an excellent read and, if memory serves, without one mention of stocks, the market or debt ratios. Soak it in and you just might surprise yourself on your road to becoming a better investor.
http://blogs.hbr.org/2009/05/two-lists-you-should-look-at-e/

CORPORATE EARNINGS REPORTS

When's the last time corporate earnings fell? The last time was Q3 in 2012. Some think that's about to change as worry about meager corporate earnings seems to be cranking up.

 Part of the concern stems from the unusually cold winter many hope is now past. But companies that do business overseas have been hit by unfavorable exchange rates and, according to one source, of the 111 companies that have offered guidance for Q1 most have been less than positive.
http://money.cnn.com/2014/04/06/investing/stock-market-lookahead/index.html?iid=HP_MPM

MARKET TIBITS

If the economy is growing faster than the labor market, does that lead to inflation?

Real wages are stagnant. If they were any more stagnant they'd be pond scum. Toss in slight increase in hiring temps, fewer short-term unemployed and slight uptick in participation rate and you have an inverse relationship here. Sorta like asking do you want more economic freedom and less autocratic rule or the reverse?

If you have not guessed it, we favor the former. And if you look at the chart posted with our Fed Fiasco blog, you'll see another inverse relationship, that between employment or jobs and QE.

Simply put, observers see and read what they want. But as investors one must decide, especially if one's in the market for bonds. We've already shortened our duration. The risk of another global slowdown favors the long end of the curve; it also suggests the Fed would roll out perhaps some more easing. Our bet is the Fed is already behind the curve. But that's what makes for a horse race.*

Ten year T-bonds nearing Death Cross with the 50-day moving average threatening to dip below 200-day MA. We've been here before and it didn't happen. So what does it bode if it happens this time?
http://blogs.marketwatch.com/thetell/2014/04/04/10-year-treasury-yield-death-cross-could-signal-bond-rally/*

For another view on bonds and what to expect if rates rise http://www.marketwatch.com/story/dont-dump-your-bonds-when-interest-rates-rise-2014-04-04

Mid-term elections reportedly are dangerous times for the stock market some believe. Could a sell-off be in the offing? 
http://blogs.stockcharts.com/chartwatchers/2014/04/watching-for-a-spring-top.html *

A blurb in the weekend's WSJ says: "Private Employment Hits a New High, But Government Hiring Lags Behind." Now all we have to do is go out and create a bunch of government jobs. We all know how efficient government workers are. *

If the cure for high prices is high prices, then at some point things become cheap enough to bring out buyers. Think mergers and acquisitions here as two of Europe's cement firms contemplate a $50 billion dollar merger. Cutting overcapacity is akin to cutting home prices when there are too few buyers. The point here is one fine day the market awakens to realize there is no more overcapacity to be cut. The safe bet is the market will awaken long before central bankers. *

BIG MAC WALKS

Some might call it the Crimean Shuffle. Other may just call it business.

McDonalds yesterday closed its three restaurants in the Crimea citing uncertainty about financial and banking services. The move is not devoid of risks as some Russian politicians are calling for the American-based burger champion to close all of its restaurants inside Russia, a move that could affect Big Mac's bottom line in upcoming months should it happen.

There are also political ramifications as some view the prospect as tossing more ice water on the already chilly relations between Russia and the U.S. http://www.reuters.com/article/2014/04/04/us-ukraine-crisis-mcdonalds-idUSBREA331LU20140404

FED FIASCO

Interesting Saturday morning read.

Ironically, the Fed has admitted from get-go that the purpose of QE and ZIRP was to inflate asset prices, particularly the bond and stock markets, enrich those who hold and speculate in them, bail out the banks by fattening up their balance sheets, and lend free money to hedge funds and private equity firms so that they could pile into the housing market and drive up home prices to the point where the middle class can no longer afford them.

Read more here. http://www.testosteronepit.com/home/2014/4/5/this-chart-is-a-true-picture-of-how-qe-solved-the-unemployme.html

SMATTA, DATA

 The shop worn advice about taking things with a grain of sodium chloride should perhaps be cashed in for: Take 'em with a slug of winter.

That's the lesson from the newly released Q1 export numbers. February's decline in exports follows a 0.6% January increase. Expected pick up in demand from China and Europe remains on a wing and a prayer or, perhaps more accurately, the market Pollyanna crowd.

Now the economic pundits will be jockeying for position to see who can guesstimate the closest to the revise numbers that are sure to follow. The Dismal Science profession is one of the few where one gets to revise things until they get close to what the pundits want. It's called Economic Horseshoes.

Forget correct. Just get it close.

If making money in the markets is your goal--and it ought to be--take these pronouncements lightly. Former Fed Chairman Sir Alan was renown for basking in his bathtub with his rubber duck and poring religiously over data for hours. And we all remember how correct he got things.
 http://online.wsj.com/news/articles/SB10001424052702303987004579479142470622718?mg=reno64-wsj

MARKET WRAP

As the market digested the latest jobs report--seen by some as not so bad and others as not so good--a funny and most likely unexpected thing happened--equities closed out the day by selling off.

The DJIA dropped 160 points, down almost 1% on the day, to close at 16,412.71. At the Nasdaq and S&P 500 it was a similar ending with Nasdaq off 2.6% and the S&P 500 down 1.25%. The Nasdaq closed at 4,127.73 and the bleeding in S&P 500 for the day settled at 1815.09, down 24 points for the session.

Bio techs and internet stocks led the fallout.  Apple (AAPL), one of the Nadasq's heaviest hitters, finished the day up slightly after being down in early trading. It was the second straight down week for the Nasdaq and it's lowest close in two months. The dollar fell against the yen, gold climbed higher and oil finished at 101.06. Just in mid-February oil traded as low as $97 a barrel. 10-year U.S. Government bond yields decline as bond prices rose.

20-20 VISION IS A LAGGING INDICATOR

Despite what this article says and it's true that certain sectors tend to dominate as a percent of the S&P 500 like tech during the dot.com era, most people don't see it as a bubble because the fear of missing out or of getting out too soon blinds them.

Leaving money on the table during bull markets for many is the cardinal sin of investing.

And then there are things like it's-different-this time and new paradigm babble such as prevailed during the Greenspan years. The grossly popular Niffty-50 of the bull market of 1960s and early 1970s are just another example of how investors get hoodwinked by new era talk.

Hailed as "one-decision" wonders investors believed they could be bought and held forever; that is, until along came not a guy named Jones but the nasty 1973-74 bear market, one of the worst bear markets of all time.

http://www.businessinsider.com/chart-bubbles-within-sp-500-2014-4