Stocks and Metals Decline

 1/30/2026

Stocks and Metals Decline

For months this column has warned of an over-heated market. As I write Friday morning, the Dow and NDX are off about 1%, the SPX about .75%. Go dl is down $460 today. This has happened before in January only to see a recovery but this time really does look different. A downtrend is forming and momentum indicators have turned to the downside. Real conformation will come with an SPX weekly close under the January 21 low around 6,800. Additional confirmation would be a NDX close under its January 21 low around 25,000.

Qualitative indicators of a positive social mood top abound. Here are a few.

This week the Trump Account was announced with quite a bang.          This will award newborns 1,000 to invest in the stock and bond markets.  I cannot find any word on where the money will be or how one invests.  Or what keeps the parents from yanking the money out.

This summer two Republican and Democrat Senators introduced a bill to save social security by, you guessed it, investing in the stock and bond market.

Yesterday, Charles Payne, host of Making Money with Charles Pane, offered his book, Unbreakable Investor , for free. Well, you do have to pay the $9.95 shipping cost.

Mutual fund cash is at the lowest level since the 1960s.

 All these actions are emblematic of how positive social mood forgets past events such as the dot.com melt down into 2002 or the sub-prime melt down o pf 2007-2009. Trump Accounts and investing social security money at those times would have been a great idea, but negative mood at those times made sure it did not happen.

Meanwhile look at the recent bankruptcy trends.

Saks sold $2.2 B in junk bonds in December 2024. Within months it was slow paying vendors. This month it filed for Chapter Bankruptcy protection.

Tricolor automobile business went poof into Chapter 7 liquidation overnight.

First Brand former CEO has been indicted for fraud by the Federal Government.  First Brands received a $1.1 B injection earlier this month. But last week its legal department called game over without another $600 M. No one offered so now the auto companies needing those parts are supporting the firm. The Feds allege the Ceo factored fabricated invoices to buyers who now hold worthless paper.

Notice a pattern here?

Speaking of memory loss, Britain seems to have forgotten how Margaret Thatcher saved the country. A headline reads Britain is Committed to Stagnation. China struggles with deflation as the real estate market declines.

On the bright side, crude oil has moved to $64.61.  Cold weather and the threat of attacks on Iran seem to be fueling the rise.

As the Sergeant used to say on Hill Street Blues, be careful out there.

professorelam@blogspot.com