The Economic Benefits of Wall Street

The Economic Benefits of Wall Street

The Economic Benefits of Wall Street

$DIA, $SPY, $QQQ, $VXX

The Big Q: Have you ever seen movie that lauds the economic benefits of Wall Street?

Note: Wall Street is the financial capital of the world in the world’s #1 economy.

And yet people in Hollywood, and politics, for example socialist Vermont Senator Bernie Sanders, who brags he did not have a job till he was 40, cry out against Wall Street constantly.

An outstanding defense of Wall Street against Bernie’s frequent outbursts was provided by Joe Rosenberg, the chief investment strategist at Lowe’s Corp., in a 14 March 2016 WS-J op-ed titled “The Wall Street I Have Known.”

Mr. Rosenberg wrote: “Senator Sanders ought to ask some of the immigrants who work on Wall Street what they think about the opportunities that this country affords, rather than going to college campuses and attacking the financial industry to further his own political ends.”

And, Hollywood has profited from movies that attack Wall Street’s profit motive, which always seems to be driven by greed and nefarious intentions.

Some of them “Wall Street,” “The Wolf of Wall Street,” and “The Big Short.” And this TV example: the series Billions, about a corrupt hedge fund.

“Money Monster,” directed by Jodie Foster and starring George Clooney and Julia Roberts is the latest Hollywood rant, notably even with a flashy Cannes premier it was virtually DOA at the domestic box office.

The Story: The evil-doer is the CEO of IBIS, a high-frequency trading (HFT) firm that is publicly traded. Mr. Clooney plays Lee Gates, a Wall Street guru who picks hot stocks as host of the television show Money Monster on the Financial News Network, obviously modeled after Jim Cramer’s Mad Money on CNBC. During a live broadcast, a disgruntled investor storms onto the set and takes Gates hostage because he lost everything on one of his tips to buy IBIS. The stock cratered when the firm lost $800-M, blaming the loss on a glitch in the firm’s trading algorithm. The armed-and-deranged young civilian investor is convinced that the stock market is rigged, and he wants the CEO of IBIS to admit it.

I have not seen the film (do not intend too)  as it very much a part of the greed-is-good/Wall-Street-is-evil genre.

This year the stock market has gotten more volatile, and hence more risky, I put that in the lap of the world’s central banks efforts to confuse participants, and spur their economies, and prop up the equities market. The cheap stimulus money flows into equities.

Monday’s US major stock market indexes finished at: DJIA +175.39 at 17710.71, NAS Comp +57.78 at 4775.46, S&P 500 +20.05 at 2066.66

Volume: Trade was less than average with 840-M/shares exchanged on the NYSE.

  • NAS Comp-4.6% YTD
  • Russell 2000 -1.7% YTD
  • S&P 500 +1.1% YTD
  • DJIA+1.6% YTD
HeffX-LTN Analysis for DIA:  Overall Short Intermediate Long
Neutral (0.20) Neutral (0.13) Neutral (0.06) Bullish (0.42)
HeffX-LTN Analysis for SPY:  Overall Short Intermediate Long
Neutral (0.18) Neutral (0.10) Neutral (0.15) Bullish (0.31)
HeffX-LTN Analysis for QQQ:  Overall Short Intermediate Long
Neutral (-0.15) Neutral (-0.02) Bearish (-0.27) Neutral (-0.15)
HeffX-LTN Analysis for VXX: Overall Short Intermediate Long
Bearish (-0.41) Neutral (-0.18) Very Bearish (-0.56) Very Bearish (-0.50)

Stay tuned…

Paul Ebeling

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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