Friday, August 26, 2016

FRIDAY 8/26/16; BIG; GDP (Gross Domestic Product); International Trade; Consumer Sentiment; Fed Chair Yellen Speaks from Jackson Hole

S&P +2. Dow +9. Nasdaq +2. Euro 1.1286. Dollar/yen 100.55. Pound 1.3191. Aussie dollar 0.7624. Dollar/yuan 6.6595.

WTIC oil 47.34. Brent oil 49.67. Natural gas 2.84. Gold 1322. Silver 18.64. Copper 2.0825.
Treasury yields are; 2-year 0.79%, 5-year 1.16%, 10-year 1.57%, 30-year 2.26%. The 2-10 spread is 78 bips representing a flattening yield curve as the 2-year yield bumps a touch higher ahead of Yellen later this morning. Asia and Australia markets will not react to Yellen’s comments until Monday morning.

Japan inflation data disappoints investors. Japan CPI is falling for five consecutive months. Core consumer prices which exclude fresh food are down -0.5% year-on-year worse than the -0.4% expected. Japan remains in a disinflationary and deflationary funk and far from the BOJ’s +2% inflation target which is turning into fantasy. Japan has systemic economic problems. The yen strengthens after the data the dollar/yen pair moves from 100.54 to 100.36. USD 94.63.

Asian indexes finish lower except for the Chinese stocks. The NIKK drops -1.2% to 16361. Japanese car makers are smacked due to the stronger yen. Toyota -3.4%. The SPASX200 is down -0.5% to 5515. The KOSPI is down -0.3% to 2037. The SSEC gains +0.1% to 3070 the PBOC maintains the 3K level to keep the Beijing communist leadership happy. The HSI is up +0.4% to 22910. India stocks are trading lower. Nifty -0.3%.

For the week, the Nikkei Index is down -1.1%. Australia stocks are flat this week. ASX 200 -0.2%. Korea is lower on the week with the KOSPI down -1%. The Shanghai Index loses -1.2% this week. The Hang Seng Index is down a smidge -0.1%. Market moves are very tame in a low volume environment. Traders are waiting on Yellen all week long.

Russia steps up military aggression along the Ukraine border. Russia begins war maneuvers in the eastern Ukraine after German Chancellor Merkel says it is difficult to lift sanctions due to President Putin’s ongoing aggression. Unfriendly foreign leaders and nations, such as Putin, are testing the docile Western leaders and will likely press President Obama before he leaves office in less than five months.

Merkel says the European Union faces challenges concerning the Brexit. Merkel says she cannot comment on the path ahead and future relationship between Britain and the EU since Article 50 is not yet invoked. The process of Britain exiting the European Union, within a two-year time frame, begins when Article 50 is invoked. UK PM May is back from summer vacation and has previously said she would not invoke Article 50 until April 2017.

In Prague, the capital city of the Czech Republic, police arrest a deranged man that was attempting to enter Merkel’s motorcade to do harm to the chancellor. Merkel’s life may be in danger here forward.

European indexes begin the Friday session trading flat. DAX and CAC are each up +0.1%. FTSE -0.1%. US futures are flat. S&P +1 Dow +4. Nasdaq -1. VIX 13.53. Stocks and futures are in a holding pattern with Fed Chair Yellen’s comments less than seven hours away.

Interestingly, Fed Funds futures indicate a 32% chance of a rate hike in September the probability increases overnight; now a one in three chance. Market participants will focus on Yellen’s words for any hints of a potential September hike.

Euro 1.1289. Euro/yen 113.45. Dollar/yen 100.49. Pound 1.3229. Euro/pound 0.8534. Mexican peso 18.3737. Canadian dollar 1.29. Dollar/yuan 6.666. Aussie dollar 0.7630. USD 94.57.

WTIC oil is down a smidge to 47.31. Brent oil loses -0.3% to 49.51. Iran plans to cooperate with other oil producers to stabilize the market. Natural gas is down -0.5% to 2.83. Gold 1324. Silver is up +0.5% to 18.72. Coper is up +0.4% at 2.092.

US Treasury yields are; 2-year 0.78%, 5-year 1.15%, 10-year 1.56%, 30-year 2.25%. The 2-10 spread is 78 bips. German bund -0.07%. Japan 10-year yield -0.08%.

Amec Foster Wheeler gains +4.1%. Gemalto is up +6%. AB InBev is up +0.5% on plans to can 5,500 employees. VW gains +1% on news that Volkswagen will buy back unfixable cars in the US resulting in a $1.2 billion charge. Traders are happy that VW is making progress in placing the emissions scandal problems in the rearview mirror. French media company Vivendi is down -4% after reporting earnings. Mediaset drops -2%. H&M lags the indexes lowing -2%.

At 3:30 AM EST (8:30 AM London), one-half hour into European trading, the DAX is down -0.4%. CAC -0.4%. FTSE -0.2%. The broad-based European Stoxx 600 Index is down -0.3%. Miners are the only industry group trading higher. Healthcare stocks are sold off continuing a recent trend. S&P +1. Dow -1. Nasdaq -1. VIX 13.55.

At 3:55 AM EST, S&P +2. Dow +7. Nasdaq +2. VIX 13.50.

At 4:32 AM EST, S&P flat. Dow -2. Nasdaq -1. VIX 13.60. The ebb and flow of volatility and markets is on display with lower volatility pumping futures higher and higher volatility sending futures lower. DAX -0.3%. CAC -0.2%. FTSE -0.1%.

WTIC oil 47.15. Brent oil 49.30. Natural gas 2.83. Gold 1325. Silver 18.72. Copper is up +0.7% to 2.0965.

UK Q2 GDP is up +0.6% in line with expectations. Pound 1.3224. Euro 1.1292. Dollar/yen 100.46. Canadian loonie 1.2904. Aussie dollar 0.7635.

At 6 AM, S&P flat. Dow +1. Nasdaq -2. VIX 13.60. Euro 1.129. Dollar/yen 100.41. Pound 1.3196. USD 94.65. WTIC 47.14. Brent 49.31. Natural gas 2.82. Gold 1326. Silver 18.74. Copper 2.0925. DAX -0.2%. CAC -0.1%. FTSE flat.

US Treasury yields are; 2-year 0.78%, 5-year 1.15%, 10-year 1.56%, 30-year 2.25%.

Global 10-year yields, four hours before Yellen’s comments, are: Brazil 11.95%, Greece 7.87%, India 7.12%, Mexico 5.83%, Portugal 2.99%, New Zealand 2.24%, Australia 1.85%, Singapore 1.75%, US 1.56%, South Korea 1.41%, Italy 1.13%, Canada 1.06%, Spain 0.93%, Hong Kong 0.87%, UK 0.56%, France 0.16%, Netherlands 0.02%, Germany -0.08%, Japan -0.08%, Switzerland -0.57%.

The Portugal 10-year yield continues to tease along the 3% level; this drama can serve as a canary in the coal mine for overall European economic and financial health. If Portugal yields begin to run higher, dark clouds will form over Europe. Germany, Japan and Switzerland are the Three Stooges in the negative camp with the Netherlands dipping its toes in and out of the negative waters.

Fed’s Bullard speaks during an interview from Jackson Hole, Wyoming, saying that “September might be a good time to raise interest rates.” But like a true economist tlakig nout of both sides of his mouth, Bullard says he cannot comment on any proposed timetable for rate hikes ahead.

S&P -1. Dow -4. Nasdaq -2. VIX 13.83. WTIC oil 47.16. Brent oil 49.41. Natural gas 2.81. Gold 1328. Silver 18.81.Copper 2.09.

The Libor (London Interbank Offered Rate) rates are at highs not seen since the financial crisis over seven years ago. The Libor rate is what banks charge each other in the overnight and short-term lending markets. The Libor levels influence global rates. The rising Libor rate may force the Fed’s hand into hiking the key benchmark rate in September. Part of the sharp rise in the Libor rates is due to new money market regulations. The sharp rise in Libor rates this year is concerning. Libor3, the 3-month rate, is up from 0.23 to 0.83 in the last two years comparing back to levels not seen since May 2009.

Over 900 aftershocks are occurring in Italy after the horrific earthquake on Wednesday. Further buildings collapse in Amatrice. The rescue efforts are hampered by the never-ending aftershocks. The terror in people’s eyes is clearly visible; their bodies and minds are shell-shocked from the ongoing tremors. Nearly 270 people have perished from the quake and 400 are injured.

BIG is up a big +2.9% after reporting earnings. AAPL is down -0.3% on news that Apple has issued a security update that handles a problem with the iPhone. STJ -0.7%. VIAB trades -0.3% lower on a Telsey Advisory Group downgrade. C downgrades SIG. MKM partners downgrades DLTR. Stocks such as Dollar Tree and Signet Jewelers are taken out back and bludgeoned.

Stifel downgrades SPLK which goes splunk in the pre-market losing -6.3%. ULTA the pretty darling of long traders missed on earnings estimates and turns ugly down -1.6%. It is game over for GME down -6.2%. Pure Storage reports earnings and PSTG leaps +15%. RAX is up +4.4% on news that Apollo Global is buying the tech company for $4.3 billion. APO trades flat.

At 8:30 AM, Q2 GDP is up +1.1% quarter-on-quarter matching the expectation and a tick below the prior +1.2% estimate. Consumer spending is up sharply.

International Trade reports a trade balance at $59.3 billion about $4 billion lower than expected a good number. Exports are up +2.4% besting the prior revised-lower +0.6%. Exports of beverages, grains and feeds and foods increase. Capital goods exports decline. Imports are down -1.3% lower than the prior revised-higher +2.3%. Imports of capital goods fall sharply. If companies are not buying capital equipment they sure are not hiring any workers. The global economy remains in a funk.

S&P -2. Dow -19. Nasdaq -7. Euro 1.1285. Dollar/yen 100.35. Pound 1.32. WTIC oil 47.25. 10-year yield 1.57%.

US Treasury yields are; 2-year 0.79%, 5-year 1.16%, 10-year 1.57%, 30-year 2.25%.

Fed’s Mester says the economy will strengthen in the second half of this year. Mester, a hawk, wants to see the rate hike path continue.

US stocks begin trading  There are three to one advancers versus decliners. The SPX jumps 6 points to 2173 testing the 20-day MA so price will either bounce or die from this level. The Dow gains 46 points to 18495. The bulls are in control to begin the day. The Nasdaq Composite jumps 10 points higher to 5222 reversing negative numbers in the first minute of trading. The RUT gains 2 points to 1242. VIX 13.54.

European indexes are hugging the flat line. Oil is sneaking positive. WTIC 47.37. SIG -3.2%. ULTA sags -4.6%; quick, put some lipstick on this pig. Dollar stores recover after yesterday’s drubbing. DG +0.7%. DLTR +0.5%. HBL is down -4.2% as activist investors Ackman and Icahn continue to meddle in Herbalife stock. RAX +4.3%. GME -6%.

Euro 1.1292. Dollar/yen 100.29. Pound 1.3216. Euro/pound 0.8545. Mexcian peso 18.3231. Canadian dollar 1.2883. Dollar/yuan 6.67.

Stocks are rallying since Yellen will probably proclaim dovishness. The photo-op and customary video from Jackson Hole shows Chair Yellen walking with Vice Chairman Fischer and Governor Dudley to the morning meeting. Yellen is sporting a bright white blazer humorously signaling her dovishness; her white hair further animates her dovish caricature.

Equities are strong. Is the fix in where insiders already had a look at Yellen’s statement before everyone else? Yes, of course they did. Wall Street is a corrupt casino. SPX 2182. INDU 18535. COMPQ 5235. RUT 1244.

At 9:58 AM EST, two minutes until Yellen, the SPX is up 7 points, +0.3%, to 2180. The Dow Industrials are up 19 points, +0.1%, to 18468. The Nasdaq Composite is up 16 points, +0.3%, to 5228. The RUT gains 4 points, +0.3%, to 1244. VIX 13.44.

At 10 AM EST (3 PM London; 4 PM Frankfurt; 11 PM Tokyo), Yellen says, “The US economy continues to expand” and “household spending is strong.” She says the ‘Fed has tools to fight the next recession’. The Fed says ‘interest on reserves will play a key role in the coming years’. Yellen says, “The Fed’s ability to predict the rate hike path is quite limited.” The Fed says growth may not be rapid enough to improve the labor market.

Yellen anticipates ‘gradual rate hikes’ which are appropriate as the economy improves. The Fed may want to purchase a broader array of assets (this is a hollow comment since current regulations will not permit the Federal Reserve to expand its area of asset purchases). Japan has gone mad buying stocks and ETF’s basically nationalizing the entire stock market over time. The central bankers are sick pups.

The Fed says the ‘US has reached price stability’. Yellen says, “Fiscal policy (by Congress) will help monetary policy work more effectively.” She is spouting all the boiler-plate standards in her commentary. Yellen says, “The case for a rate hike has strengthened in recent months.” This hawkish-sounding statement sends the US dollar and Treasury yields higher.

The US dollar index jumps to 95.03. Dollar/yen 100.87. Treasury yields jump higher; 2-year 0.813%, 5-year 1.198%, 10-year 1.599%, 30-year 2.264%.

Markets are extremely jumpy and will need time to settle. The US dollar index reverses course heading lower sending oil and commodities higher. Gold jumps higher. USD 94.81. Volatility drops adding bull fuel for stocks. VIX 13.14. Regional banks jump higher. KBE +1.2%. The Dow is above 18.5K.

University of Michigan Consumer Sentiment is 89.8 under 90 missing the 90.7 expected and under the prior 90.4. Bloomberg television commentator Tom Keene proclaims that the United States is “nowhere near a recession.”

US Treasury yields are; 2-year 0.81%, 5-year 1.19%, 10-year 1.59%, 30-year 2.26%.

Markets are very erratic bouncing around like ping-pong balls. Equities catch a strong bid. The insiders win again knowing the outcome of the Fed announcement minutes before everyone else. The SPX is up 9 points to 2182. The Dow gains 81 points to 18531. COMPQ 5237. RUT 1245.

WTIC oil 47.47. Brent oil 49.68. Gold 1327. Silver 18.625. Euro 1.1265. Dollar/yen 100.74. Pound 1.3184.

At 10:15 AM EST, 15 minutes into the circus, yields retreat; 2-year 0.79%, 5-year 1.17%, 10-year 1.57%, 30-year 2.24%. German bund -0.075%. Japan 10-year yield -0.73%.

Oil is on fire as the dollar index drops. WTIC gains +1% to 47.78. Brent oil is up +0.8% to 50.05 regaining the psychological 50 level. Natty 2.83. Gold jumps 12 dollars, +0.9%, to 1334. Silver is up +2% at 18.98 ready to print a 19-handle. Copper gains +0.5% to 2.095.

Europe rallies feeding off the US joy. DAX +0.5%. CAC +0.9%. FTSE +0.5%. MIB +0.7%. IBEX +0.7%. PSI +0.4%. Euro 1.1325. Dollar/yen 100.29. Pound 1.3263. USD 94.49.

At 10:22 AM EST, stocks catapult higher. All Hail Chair Yellen! Queen of the Doves! Stocks are up. Oil is up. Gold is up. A festive atmosphere develops on trading floors. The central bankers will always save the stock market forever. Yellen flaps her dovish wings.

The SPX is up 15 points, +0.7%, to 2187. The INDU gains 113 points, +0.6%, to 18560. The COMPQ is up 39 points, +0.8%, to 5251. The RUT is up 9 points, +0.7%, to 1249. VIX collapses to 12.32.

WTIC oil is up +2.3% to 48.42. Brent oil is  up +2.1% at 50.71. Gold is up 16 dollars at 1338. Silver is up +2.5% to 19.08. Copper is up +0.8% to 2.10.

US Treasury yields are on a roller coaster ride; 2-year 0.77%, 5-year 1.13%, 10-year 1.53%, 30-year 2.21%. The 2-10 spread is down to 76 bips a new record low going back to late 2007. The flatter yield curve hurts the banks. KBE loses its rally now up only +0.4%. KRE +0.2%. RF +0.2%. XLF +0.4%. JPM +0.3%. Regional and large money center banks are up marginally. The regional banks catapulted higher with the jump in Treasury yields on Yellen’s comments and then deflate along with yields. The Libor3, 3-month rate, is 0.8334.

Interestingly, Fed Funds futures forecast a 24% chance of a September hike dropping from the 32% expectation a few hours ago (more dovish not hawkish). Yellen is the Queen of the Doves. All Hail Yellen; a modern-day Money God!

At 10:52 AM, the smoke begins to clear. SPX is up 10 points to 2182. INDU 18531. COMPQ 5240. RUT 1246. VIX 12.84. Euro 1.1274. Dollar/yen 100.52. Pound 1.3191.

WTIC oil is up +0.7% to 47.66. Brent oil is up +0.5% to 49.91. Yemen missiles hit a Saudi oil facility which helps create the lift in oil. Gold 1332. Silver 18.91. Copper 2.0855.

US Treasury yields are; 2-year 0.78%, 5-year 1.14%, 10-year 1.54%, 30-year 2.22%.

Technology stocks lead higher and telecom stocks lead lower. ADSK +5.1%. INTC +1.2%. AMZN +0.5%. NFLX flat. AAPL flat. FB +0.8%.

The morning continues…..

European indexes end the session

At 1 PM, the BHI Oil Rig count is

For the week,

US stocks end the session

For the week,

After the bell, 

Wednesday, August 24, 2016

THURSDAY 8/25/16; Jackson Hole Economic Policy Symposium; German IFO Data; BURL; GLNG; MDT; SAFM; TITN; MIK; Durable Goods; DG; DLTR; MIK; SHLD; SIG; TIF; ULTA; US Presidential Politics

Euro 1.126. Dollar/yen 100.43. Pound 1.3233. WTIC oil 46.80. Brent oil 49.07. Natural gas 2.79. Gold 1327. Silver 18.51. Copper 2.08.

Treasury yields are; 2-year 0.766%, 5-year 1.14%, 10-year 1.56%, 30-year 2.25%. German bund -0.086%. Japan 10-year yield -0.08%.

Asian indexes begin trading negatively and then line out sideways continuing to wait for Fed Chair Yellen’s words of wisdom from Jackson Hole tomorrow. Chinese stocks lead the way lower with the SSEC down -0.5%. The Chinese property market worries are increasing. Gemdale is smacked -5.3% lower. Vanke tanks -3.6%. Poly Real Estate is down nearly -3% and Shanghai Shimao loses more than -2%.

Aussie mining, metals and materials companies are beaten. Gold miners were massacred in the States yesterday. The GDX collapsed -7.1% and the junior gold miners, GDXJ, crashed -7.7%. Fortescue plummets -4.3% in Aussie trading. BHP Billiton is smacked -1.8% lower and Rio Tinto loses -1.5%. CS downgrades Fortescue.

Galaxy Entertainment is up +3.2% after earnings. CNOOC and Petro China trade lower after the disappointing earnings results released after yesterday’s closing bell.

Trading volume in Asia is extremely light. Volume is down 30% based on the expected volume for this time of year and compared to last month. Investors and traders are sitting on the sidelines ahead of the Jackson Hole Symposium. Dollar/yen 100.46. USD 94.70. WTIC oil 46.87. Brent oil 49.11.

The Asia session finishes lower except for Hong Kong. Asia and Aussie stocks will trade tomorrow to end the week without being able to respond to Yellen’s words until Monday. The NIKK drops -0.3% to 16556. Topix -0.2%. The ASX 200 drops -0.4% to 5542. The KOSPI is down a hair to 2043. The Shanghai Index loses -0.6% to 3068. The Hang Seng Index is up +0.2% to 22867.

India stocks continue trading with the Nifty up +0.3%. European index futures point to a flat to slightly negative open for the regular session.

The death toll from the Italian earthquake tragically rises to 250 people. Since the quake occurred in the middle of the night while folks were sleeping, many never had a chance as the buildings collapsed. Italy has created a purgatory for itself with the sick banks and when it rains it pours with Mother Nature now dealing out a horrific earthquake disaster at the peak of the tourism season.

Global markets continue to idle sideways this week with traders waiting on Yellen’s comments from the economic symposium tomorrow. Fed Funds futures indicate a 28% chance of a rate hike in September. This remains a one in four probability, however, it sneaks higher each day. A couple weeks ago the September probability was only 12%. There is a 33% chance for a Fed rate hike in November, 54% chance in December and 56% chance in February 2017.

There is a slightly more hawkish view of potential Fed rate hikes over the last few days with the probabilities rising a couple-few percentage points. The US 2-year yield remains anchored or is trying to rise at 0.76%. The long duration yields remain subdued so the yield curve flattening behavior remains in play.

Investors pull over $25 billion from hedge funds in July the most in over seven years. There are $56 billion in outflows from hedgies this year.

US futures are flat overnight. S&P +1. Dow +3. Nasdaq +2. Euro 1.1276. Dollar/yen 100.46. Pound 1.3231. Aussie dollar 0.7635. Dollar/yuan 6.6565. USD 94.69. South African rand 14.1304.

WTIC oil 46.87. Brent oil 49.09. Natural gas 2.80. Gold 1326. Silver 18.70. Silver is unable to hold the 19 level. Copper is up +0.7% to 2.0980 but has trended lower over the last month dropping from 2.27 to 2.09 a -8% loss. Market bulls cannot make headway higher in the stock market without copper jumping on board.

US Treasury yields are; 2-year 0.76%, 5-year 1.13%, 10-year 1.55%, 30-year 2.24%. The 2-10 spread is 79 bips. UK gilt 0.56%.

At 3 AM EST (9 AM Frankfurt and Paris), European indexes begin trading lower. The DAX drops -0.5%. CAC -0.6%. FTSE -0.4%. France is leading the way lower.

Consumer discretionary, basic materials, autos and healthcare stocks are the worst performers. Telecoms are down the least. All industry groups in Europe are trading lower. The European Mining Index is down -2.3%. Glencore -3.5%. ArcelorMittal -2.1%. Concern increases over steel overcapacity. CRH, the Ireland building materials conglomerate, beats on earnings and rises +1.2%.

Dutch retailer Ahold beats on earnings and trades +1.2% higher. Gaming and gambling app and software developer Playtech rallies +4.2% on a special dividend. Sunrise Communications is up a robust +6.3% creating a sunny outlook in the telecom sector.

S&P -1. Dow -11. Nasdaq +1. WTIC 46.85. Brent 49.07. Natty 2.78.

Euro 1.1269. Euro/yen 113.18. Dollar/yen 100.43. Pound 1.3215. Euro/pound 0.8528. Mexican peso 18.4615. Canadian dollar 1.2914. Aussie dollar 0.7628. Dollar/yuan 6.66.

Political disruption continues in South Africa. The rand is at 14.1596 the worst performing currency this week. Political risk premium is being priced-in to the currency.

Europe is a sea of red. DAX -0.8%. CAC -0.9%. FTSE -0.7%. MIB -0.6%. IBEX -0.6%. PSI -0.5%. S&P -3. Dow -22. Nasdaq -5. VIX 13.61.

US Treasury yields are; 2-year 0.76%, 5-year 1.13%, 10-year 1.56%, 30-year 2.25%. The 2-10 spread is 80 bips. The 5-30 spread is 112 bips. German bund -0.08%. Japan 10-year yield -0.09%.

At 4 AM EST (10 AM Frankfurt), German Business IFO is 106.2 missing the 108.5 expected. The Expectations Index is 100.1 a disappointing low level. European stocks deteriorate lower. DAX -1.1%. CAC -1.1%. FTSE -0.8%. US futures are soggy. S&P -4. Dow -35. Nasdaq -9. Volatility rises. VIX 13.71.

At 5 AM, S&P -5. Dow -43. Nasdaq -12. VIX 13.78. DAX -1.3%. CAC -1.2%. FTSE -0.8%.

At 5:09 AM, S&P -4. Dow -36. Nasdaq -10. VIX 13.74. At 5:10 AM, S&P -3. Dow -31. Nasdaq -8. VIX 13.67. As volatility drops, futures pop, and visa versa. Euro 1.1284. Dollar/yen 100.37. Pound 1.3215. USD 94.66.

At 5:24 AM, S&P -1 Dow -17. Nasdaq -4. VIX 13.46. Europe stages a strong comeback off the lows. DAX -0.7%. CAC -0.6%. FTSE -0.3%. Euro 1.1292. Dollar/yen 100.41. Pound 1.3231. Canadian dollar 1.2903. Aussie dollar 0.7633.

Oil is positive drifting higher helping to boost stocks and futures. WTIC oil 47.05. Brent oil 49.29. Gold 1325. Silver 18.69. Copper 2.0925.

US Treasury yields are; 2-year 0.76%, 5-year 1.13%, 10-year 1.55%, 30-year 2.24%. The 2-10 spread is 79 basis points.

The world’s economic leaders and central bankers are arriving in Jackson Hole, Wyoming, for the economic policy symposium. Meetings and speeches are on tap tomorrow with Fed Chair Yellen the main attraction at 10 AM EST (3 PM London; 4 PM Frankfurt and Paris; 10 PM Beijing and Shanghai; 11 PM Tokyo). Expectations by traders and investors are far too high for the speech. Yellen will likely try to thread the needle talking up a strong economy but then at the same time hesitating at committing to any rate hikes.

There are many second tier companies reporting earnings this morning resulting in the following moves. BURL +3%. GLNG +1%. JKS -7%. MDT -1.5%. MOV -4.5%. SFUN -4.1%. SAFM is eating its eggs sunny-side up as it gains +2%. Machinery company TITN is down -2.5%. MYL feels some love up +2.6% after buckling under to Congress’s criticism and lowering the price of the EpiPen. Drug prices will be a talking point into the presidential election on 11/8/16.

The dollar stores and retailers are in focus this morning. DG crashes -11%. DLTR plummets -7%. Craft store MIK loses -4.4%. SHLD -4%. Jeweler SIG crashes -11%. TIF is a winner in the retail space up +7%. ULTA is ugly losing -1%. GES sky rockets +23% on strong European sales. After last evening’s earnings releases, HPQ tanks -6%. WDAY rallies +10.5%.

At 8:30 AM, Durable Goods are up +4.4% month-on-month beating the +3.7% consensus and well above the prior month’s revised lower -4.2%. These New Orders are down -3.3% year-on-year versus the prior -6.6%. Ex transportation is up +1.5% month-on-month better than the +0.5% expected and above the prior -0.3%. Year-on-year is down -0.6% above the prior -3.4%. Core Capital Goods are up +1.6% month-on-month versus the prior revised-higher +0.5%. Year-on-year is down -4.9% below the prior -3.5%. The headline +4.4% number and the ncrease in capital goods are very positive for the economy. Jobless Claims are down 1K to 261K.

Futures are unresponsive to the data. S&P -4. Dow -30. Nasdaq -7. Europe is a sea of red computer screens. DAX -1.0%. CAC -0.7%. FTSE -0.2%. MIB -1%. IBEX -0.6%.

US stocks begin trading with a negative bias. Stocks may stumble along sideways today ahead of Yellen tomorrow. TIF jumps +7%. MYL +3.5%. NFLX +1.6%. DG -11.5%. DLTR -7%. Dollar store losses are Wal-Mart gains. WMT +0.1%. GES +22%. TIF +7%. SIG -11%. The large moves in retail stocks are astounding.

Banks and basic materials lead higher. Eight of the 10 S&P sectors are negative. The VIX is above 14 at 14.01. The market bears are cheering for higher volatility. Euro 1.1288. Dollar/yen 100.54. Pound 1.3188. USD 94.69.

10-year yields are; Portugal 2.97%, US 1.57%, Italy 1.15%, Spain 0.94%, UK 0.58%, France 0.18%, Netherlands 0.04%, Switzerland -0.56%.

SPX is down 3 points to 2173. INDU 18454. COMPQ 5212. RUT 1236. VIX 13.87. Market bears hopes for a selloff diminish as volatility retreats.

WTIC oil 46.66. Brent oil 49.01. Natural gas is up +0.8% to 2.818 ahead of inventory data within the hour. A tropical storm near Puerto Rico may push up into the Gulf or East Coast in the days ahead. The PMI Services Flash (preliminary) is 50.9 matching the prior 50.9.

Natural Gas Inventories are a 11 BCF less than the 22 BCF from last week. Natural gas price floats higher up +1.7% to 2.84. WTIC is up +0.4% to 46.97. Brent oil gains +0.6% to 49.35. The lift in oil helps support the broad indexes that stumble sideways.

At 11 AM, Kansas City Fed Mfg Index is -4  versus the prior -6. Fed’s Esther George says a rate hike path should proceed but the hikes should be very gradual.

European indexes end the session lower. The DAX is down -0.9% to 10530. The CAC is down -0.7% to 4407. The FTSE loses -0.3% to 6817. The MIB loses -1.1% to 16711. The IBEX is down -0.7% to 8600. The PSI drops -0.4% to 4680.

St Jude needs medical attention with STJ tumbling -6% after short-selling outfit Muddy Waters identifies potential problems in the balance sheet. St Jude says the allegations are untrue. The stock is being dumped on very heavy volume. Traders are selling first and asking questions later.

Amazon introduces its new “Amazon Vehicles” platform. The large database allows users to research and compare cars and prices. TrueCar crashes -9.6% since its business model may be toast once behemoth Amazon squashes them like a bug.

OZM tanks -5.2%. Funds with active money managers are under pressure to lower their fees since they are underperforming the broad indexes. More investors are choosing a passive investing strategy simply buying ETF’s which require no additional fees. Why pay an active money manager that cannot produce better results? Och-Ziff Capital Management is representative of other active funds and is down from 13 to 4, -70%, over the last year.

At 1 PM, the 7-Year Note Auction goes off at 1.423% with soft demand. Treasury yields are; 2-year 0.77%, 5-year 1.14%, 10-year 1.56%, 30-year 2.26%.

Stocks are flat. WTIC oil continues higher to 47.08. Brent oil 49.51. Natty is up +2.3% to 2.86 a healthy rally after the inventory data. Gold 1322. Silver 18.63. Copper slips negative at 2.0835.

The EpiPen drama continues. MYL stock loses earlier gains and leaks lower down -0.7%. The Mylan CEO is blaming the numerous middle men for high drug prices and also the government and insurance agencies. EXPR loses -1.8%. CAH drops -2.1%.

Euro 1.1278. Dollar/yen 100.56. Pound 1.3188. Canadian dollar 1.2930. Dollar/yuan 6.66.

At 3 PM, the SPX is down 5 points at 2170. The Dow is off 43 points and Nasdaq down 13 points. VIX 14.04. The Dow Transports, TRAN, are down -0.6%. WTIC oil 47.36. Brent oil 49.73. Natural gas 2.84.
Treasury yields are; 2-year 0.79%, 5-year 1.16%, 10-year 1.58%, 30-year 2.27%.

Fed’s Kaplan talks up the economy and says a rate hike is likely but will not speculate on which meeting the hike will occur. The Fed heads are great at saying nothing and only adding confusion to markets. There is chatter that the Fed may raise the inflation target to +3% from +2%. This would be dovish but may backfire on the FOMC. Baby stuff like this may only serve to further deteriorate confidence and credibility in the Federal Reserve. The party game continues as long as market participants believe in the Fed; if confidence is lost, all will be lost.

US stocks end the session mixed call it flat. The SPX is down 3 points, -0.1%, to 2172. The Dow loses 33 points, -0.2%, to 18448. The Nasdaq Composite is down 5 points, -0.1%, to 5212. The Russell 2000 gains 3 points, +0.2%, to 1240. The VIX is at 13.63 and prints a HOD at 14.09.

After the bell, several key companies report earnings and the stocks react. ADSK +3.1%. BRCD -0.6%. Gamer GME collapses -8%. SDRL +0.4%. SPLK loses -6.2%.

The most disliked presidential candidates in American history, democrat Clinton and republican Trump, continue their campaigns. UKIP (Britain) Party leader and Brexit proponent Nigel Farage visits the States and stumps for the orange-headed buffoon Trump telling voters to oust the establishment. Farage criticized President Obama for commenting about the Brexit vote in the UK but eight weeks later he is in the United States telling American voters what to do.

Trump is changing his views on immigration which were the cornerstone of what got him this far in the election process. Clown Trump flip-flops on immigration originally planning to deport all illegal aliens but now he softens that stance which may disappoint his original followers. Trump’s new plan is in line with the other candidates in the republican primaries that he denigrated for their immigration policies. Trump is a liar just like Clinton.

Liar Clinton continues to refuse to conduct a press conference. Obviously, she does not want to make statements that may lead to further legal and criminal problems. It is interesting that Clinton has support from about 40% of the voting public; these folks do not care that she lies routinely and the Clinton Foundation is a nefarious almost mob-like corrupt organization. Morality has deteriorated in the United States over the last couple decades creating an apathetic America.

Trump was the strongest candidate in the republican primaries but as was highlighted at the time, the likely weakest candidate for a general election. This scenario plays out in real time. Considering all of Clinton’s problems, nearly any of the other republican candidates, especially Rubio, Cruz and Kasich, would all be leading Clinton in the polls right now not losing. Averaging all polls, Trump is about six points behind Clinton but her numbers may be whacked lower by the ongoing email, Clinton Foundation and other scandals. Any weakness in Clinton’s poll numbers, however, will likely boost the numbers for Johnson and Stein rather than Trump.

Trump likely has to win four key states to win the presidency; North Carolina, Florida, Ohio and Pennsylvania. Clinton leads or is tied with Trump in the polls in these states. The only thing that can derail Hillary Clinton from the presidency would be further problems from the email and Clinton Foundation scandals. The Clinton political machine is powerful and is trying to run out the clock into the 11/8/16 election and get her over the finish line.

300 employees in the State Department have donated money to the Clinton Foundation so the fix is in. The US government, under President Obama’s democrat control, is sweeping the Clinton mess under the rug. The country is corrupt after decades of demopublican and republocrat control. The political system is broken and dysfunctional. Interestingly, all empires and dynasties in past history have only lasted between 200 and 250 years.

The FBI says Hillary Clinton’s behavior is negligent and criminal, however, at the same time, says she should not face legal prosecution. You would go to jail for the same acts. The privileged class in America lives by a different set of rules than common people.

More turmoil, social unrest and political riots may develop in the US as Americans learn that their vote in November does not technically elect the POTUS but instead, the electoral college decides who occupies the Whitehouse come January. Technology is educating the huddled masses about the corrupt demopublicans and republocrats and their incestuous beltway antics. Common Americans are visiting the local hardware store in search of pitchforks and torches.

The sad part about the upcoming POTUS election is that the winner will not have a mandate to fix the mess. The winner, likely either Trump or Clinton, may only receive 40% or 45% of the vote. Trump won the republican primary race with only 35% to 40% support from the republican electorate. He benefited from his name recognition, funny insults and the large field that split the vote for many candidates.

There is much more drama to play out and in this weird political season; anything can happen. Libertarian Johnson is at about 11% in the polls and needs 15% to appear in the 9/26/16 debate. Stein has about 5% of the vote according to the latest polls and she is calling for inclusion in the debates so the Green Party’s voice can be heard.

US Judge William Dimitrouleas in Florida orders the State Department and Hillary Clinton to release newly discovered emails and other documents before September 13. The Clinton political machine is trying to run out the clock and get Hillary elected since once she is in power she can make all her and Slick Willie’s sick problems go away.

The US Navy fires three warning shots at fast-moving Iranian boats that are traveling too close to the destroyer in the Straits of Hormuz. After President Obama gave away the store to Iran for the nuclear agreement, they kick sand in America’s face. When you lay down in bed with criminals and terrorists, do not be surprised if you wake up with more problems.

WEDNESDAY 8/24/16; Existing Home Sales; 5-Year Note Auction; HPQ; WDAY; PVH; GES; WSM

US futures are flat. S&P +1. Dow +13. Nasdaq +5. WTIC oil 47.70. Brent oil 49.65. Natty 2.76. Gold 1338. Silver 19.01. Copper 2.128. USD 94.62.

Treasury yields are; 2-year 0.75%, 5-year 1.14%, 10-year 1.55%, 30-year 2.24%. The 2-10 spread is 80 bips and the 5-30 spread is 110 bips reflecting flattening yield curves.

In early Asia and Aussie trading, the NIKK gains +0.8%. Topix +0.9%. SPASX200 +0.1%. Qantas Airlines flies +1.5% higher after reporting earnings in line with expectations and instituting a dividend for the first time since 2009. KOSPI +0.1%.

S&P +1. Dow +10. Nasdaq +4. Euro 1.13. Dollar/yen 100.40. Aussie dollar 0.7611. USD 94.61. WTIC 47.59. Brent oil 49.52.

At 3:30 AM Italy time (9:30 PM EST; 2:30 AM London; 10:30 AM Tokyo), a large 6.2 magnitude earthquake hits Amatrice (pronounced ah-mah-tree-chea), killing 21 people with over 100 others missing. The death count will increase. Amatrice is 140 km (87 miles) northeast of Rome. Rescue efforts are underway. Since folks were sleeping, the death and injuries will be worse than if people were up and out and about in the day time.

The quake hits at the peak of the tourist season which will be another blow to Italy’s flailing economy. One-half of the town of Almatrice is reduced to rubble and people are trapped under the concrete and twisted metal. Communications lines are severed in the area creating logistic problems.

North Korea fires a missile from a submarine that flies a couple hundred miles towards Japan. South Korea is conducting war maneuvers which always results in North Korea flexing its muscles to receive attention.

Asian indexes finish mixed. Global traders are treading water before Fed Chair Yellen’s Friday speech. The NIKK ends up +0.6% to 16597. Japanese carmakers trade higher. Toyota +2.1%. Sony +2.2%. Nissan +2.7%. The SPASX200 finishes up +0.1% to 5562. The KOSPI is down -0.3% to 2044. The SSEC is down -0.1% to 3086. The PBOC is intervening in markets to maintain the 3K level. The HSI ends down -0.8% to 22821. The Nifty trades marginally lower as the India session continues.

At 3 AM EST (8 AM London; 9 AM Rome, Paris and Frankfurt; 4 PM Tokyo), European indexes begin trading falling like a rock. The DAX tanks -0.6% out of the gate. CAC -0.8%. FTSE -0.5%. MIB -0.6%. IBEX -0.6%. PSI -0.6%. SMI -0.3%. That is an ugly start minutes into trading. US futures are negative. S&P -4. Dow -40. Nasdaq -10.

Euro 1.1293. Euro/yen 113.22. Dollar/yen 100.26. Pound 1.3166. Euro/pound 0.8577. Mexican peso 18.6185. Canadian dollar 1.2942. Dollar/yuan 6.6531. Aussie dollar 0.7595.

WTIC oil is down -1.9% to 47.19. Brent oil is down -1.7% to 49.12. Natural gas is down -0.2% to 2.75. Gold 1337. Silver is down -0.7% to 18.94. Copper drops -0.4% to 2.1180.

Treasury yields are; 2-year 0.76%, 5-year 1.14%, 10-year 1.55%, 30-year 2.23%. The 2-10 spread is 79 bips reflecting a flatter yield curve.

Swedish consumer goods and paper company Svenska Cellulosa catapults +11% higher. The world’s biggest advertising company WPP gains +5%. The media sector leads higher in European trading while mining and insurance companies lead lower. Glencore tanks -2.7%.

Steinhoff is down -3.4% and Old Mutual is whacked -3.3% due to their exposure to South Africa which is embroiled in a government scandal. The tax division of the government was secretly targeting individuals. South African officials refuse to resign. The political turmoil creates instability.

At 3:20 AM EST (8:20 AM London), S&P -3. Dow -30. Nasdaq -7. The VIX is on line and trading at 12.60. DAX +0.5%. WTIC oil 47.23. Brent 49.18. Copper 2.1195. 10-year yields are; US 1.56%, Italy 1.14%, Spain 0.96%.

Oil giant CNOOC (China National Offshore Oil Corporation) and Petro China report earnings losses. The reaction in share prices will not occur  until the Asia session tomorrow. The Hong Kong SFC (Securities & Futures Commission) sues MS over business practices. Morgan Stanley is also getting hit with a lawsuit over mishandling 401k accounts. MS may need to set aside funds for handling the ongoing litigation.

Vice president Biden lands in Turkey to meet with President Erdogan. Turkey remains very unstable after the failed coup attempt. Iceland cuts its short term deposit rate. Global central bankers continue to slit each other’s throats in the race to debase currencies; the race to the bottom.

US futures and European stocks stage a dramatic recovery. The DAX is down -0.1%. The CAC turns positive up +0.1%. FTSE -0.2%. S&P +1. Dow -5. Nasdaq +1. VIX 12.42. India stocks catch a bid. Nifty +0.2%.

At 4:39 AM EST, S&P -1. Dow -12. Nasdaq -2. VIX 12.49. DAX -0.1%. CAC +0.2%. FTSE -0.4%. MIB +0.4%. IBEX +0.3%. PSI -0.3%. Italy and Spain lead the upside while the UK and Portugal lead lower. UniCredit advances +5.4%. Markets are jumpy and choppy sideways as global traders wait for Fed Chair Yellen’s speech at noon time Friday.

WTIC oil is down -1.7% to 47.29. Brent oil is down -1.3% to 49.33. Natty 2.76. Gold 1339. Silver is above 19 to 19.01. Copper remains negative down -0.5% to 2.116.

Treasury yields are; 2-year 0.75%, 5-year 1.13%, 10-year 1.54%, 30-year 2.22%. The 2-10 spread is 79 bips. Curves are flattening globally. German 10-year bund yield -0.093%. Japan 10-year yield -0.079%.

At 5 AM EST, as US traders rise from slumber, S&P +2. Dow +8. Nasdaq +5. VIX 12.37. DAX +0.3%. CAC +0.6%. France’s CAC recovers over +1.2% off the intraday bottom after the opening bell two hours ago. FTSE -0.1%. Euro 1.1293. Dollar/yen 100.19. Pound 1.3223. Glencore drops -4.6%.

Treasury yields are; 2-year 0.75%, 5-year 1.14%, 10-year 1.55%, 30-year 2.23%. The 2-10 spread is 80 bips.

At 6:30 AM EST, S&P +2. DAX +0.4%. Markets are steady. Global traders are awaiting Yellen’s speech on Friday. VIX 12.34. WTIC oil 47.34. Brent 49.49. Copper 2.1175.

Euro 1.1280. Dollar/yen 100.17. Pound 1.3235. Canadian dollar 1.2922. Aussie dollar 0.7623. Dollar/South African rand 14.0914.

The death toll rises to 37 in the Italy earthquake. A 6.8 magnitude quake hits Myanmar. The earthquake in Myanmar is very deep so damage is minimal.

Mortgage Applications are down -2.1%. Refinancing applications are down -3%. Mortgage loan applications are down -0.3%. The strongest action is on the higher end. The wealthy, that own large stock portfolios, have become filthy rich due to the Federal Reserve’s money printing, so they are moving into new or larger McMansions. Common people are left behind. A starter family cannot afford the elevated house prices or come up with large down payments. Every day is a joyful party for the elite class in America.

EXPR crashes -21% after reporting earnings. The sun does not shine for SOL crashing -16% after earnings. After last evening’s earnings, LZB reclines -15%. INTU -5%. NMBL is very nimble jumping +11%. FIT gains +2.5% on a favorable court ruling concerning its patents. LOW gains +0.8% on a BAC upgrade.

TSLA is up +0.5% after last evening’s announcement of a longer battery life and more rapid acceleration for its vehicles. No one is impressed. Is Elon Musk losing his showman touch? Royal Bank of Canada beats on earnings. CLVS launches +7% on its cancer drug.

At 8:10 AM, S&P +1. Dow +7. Nasdaq +5. Euro 1.1263. Dollar/yen 100.25. Pound 1.3235. WTIC oil is down -2% to 47.12. Brent oil is down -1.4% to 49.27. Natty 2.76. Gold 1338. Silver 19.00. Copper is down -0.7% to 2.1115.

At 9 AM, the FHFA Home Price Index is up +0.2% month-on-month less than the +0.3% expected matching the prior +0.2%. Year-on-year is up +5.6% compared to the prior +5.7%.

One year ago the Dow flash-crashed 1,000 points at the opening bell due to China turmoil. The Chinese devalued the yuan creating global shock waves. Individual stock circuit breakers triggered and over 1,200 stocks were halted from trading.

At 9:30 AM EST, US stocks begin trading flat out of the gate. The S&P 500, Dow Industrials and Russell 2000 are marginally lower and the Nasdaq Composite marginally higher. VIX 12.73.

WTIC oil is down -1.2% at 47.54. Brent oil is down -0.6% to 49.66. Natty 2.79. SBUX rallies +2.5%. EXPR crashes -23%.

At 10 AM, Existing Home Sales are down -3.2% versus the -0.9% expected to 5.39 million units versus the 5.52 million expected and below the prior 5.57 million units. Sales are down -1.6% year-on-year which is only the second decline in the last two years.

EIA Oil Inventories are a 2.5 million barrel build confirming the API data last evening. WTIC oil is down -2.1% to 47.11 and should begin dropping more. Oil is coming out our ears. Brent oil is down -1.4% to 49.25. Natural gas is up +1.1% to 2.79. The Libor 3-month rate is at highs not seen since 2009.

European indexes end the session higer except for the UK and Portugal. The DAX gains +0.3% to 10623. The CAC ends up +0.3% to 4435. The FTSE drops -0.5% to 6836. The MIB gains +0.7% to 16892. The IBEX ends up +0.8% to 8645. The PSI loses -0.1% to 4698.

The S&P 500 loses 5 points, -0.2%, to 2182. The Dow Industrials are down 48 points to 18499 losing the 18.5K level. The Nasdaq Composite is down 7 points to 5253. The Russell 2000 loses 1 point to 1247. VIX 13.12.

Euro 1.1247. Euro/yen 113.07. Dollar/yen 100.54. Pound 1.3235. Euro/pound 0.8497. Mexican peso 18.5367. Canadian dollar 1.2955. Dollar/yen 6.6590.

WTIC collapses -3.2% to 46.55. Brent oil is down -2.4% to 48.77. Natty gas is up +1.2% to 2.80. Gold is down 10 dollars, -0.8%, to 1327. Silver is down -1.9% to 18.70. Copper is down -1.5% to 2.09.

Treasury yields are; 2-year 0.76%, 5-year 1.14%, 10-year 1.55%, 30-year 2.24%. The 2-10 spread is 79 bips. German bund -0.089%. Japan 10-year yield -0.08%.

At 1 PM, the 5-Year Note Auction goes off at 1.125% a solid auction. MYL dumps -2.3% after democratic candidate Hillary Clinton criticizes Mylan over the cost of the EpiPen. F drops -0.5% after announcing a recall of over 90K vehicles due to fuel pump problems.

The SPX is down 5 points, -0.2%, to 2182. VIX 13.13. The Dow is down 26 points and Nasdaq off 13 points. WTIC oil 46.75. Brent oil 49.04. Natty 2.80. Gold 1326. Silver 18.66. Copper is down -1.8% to 2.088. Doctor Copper lays on a gurney and is admitted to the clinic.

Materials lead lower. XLB -0.8%. Healthcare is sick. XLV -0.5%. Utilities are weak. XLU -0.3%. The selling is broad-based across all sectors. Financials are positive. XLF +0.1%. MS +1.3%. JPM +0.5%. BAC +0.9%.

The death toll increases to 120 people in the Italy quake. Three are dead in the Myanmar earthquake and old temples are damaged. Two Iranian boats pass within 300 yards (274 m) of a US destroyer in the Straits of Hormuz. Tensions are high. Unfriendly countries such as Iran are going to test President Obama before he leaves office in January. The president laid down in bed with Iran and now they show him disrespect by spitting in his face.

Terrorists attack an Afghanistan university seeking to kidnap an American teacher. One person dies and 21 are injured. The situation is ongoing. President Obama’s new policy of paying ransom for the return of Americans will lead to far more United States citizens being adducted around the world. It has only just begun. It will be a legacy of President Obama.

From 1 PM EST, stocks begin trending lower and fall into the closing bell. The SPX drops from 2185 to 2172 in the afternoon. MYL drops -5.2% as politicians continue to beat the drug maker over the EpiPen pricing. Healthcare stocks are weak. XLV -1.6%.

Gold miners are punished. GDX crashes -7.1% and loses the  50-day MA. GDXJ plummets -7.8%. NEM -7.7%. ABX -10%. SLV -1.7%. SLW -8.1%. PAAS -8.6%. There is serious carnage; several traders heavily long the gold miners are carried out on stretchers.

US stocks end the session down 11 points, -0.5%, to 2175 under the 20-day MA at 2178. The Dow loses 66 points, -0.4%, to 18481 under its 20-day MA at 18504. The Nasdaq Composite is down 42 points, -0.8%, to 5218. The 20-day MA is 5210. The Russell 2000 are down 11 points, -0.9%, to 1237. VIX climbs to 13.45. Volatility is showing signs of life.

After the bell, two key tech companies are reporting earnings. HPQ drops -5% on weak guidance. WDAY launches +9% recovering from its drubbing over the last few days.

Retail is in focus after the bell starting with supplier PVH that catapults +10% on earnings. TLYS +9%. WSM -0.2%. GES rallies +15%. The retail sector will be joyous tomorrow.

Tuesday, August 23, 2016

TUESDAY 8/23/16; PMI’s; BBY; SJM; TOL; New Home Sales; 2-Year Note Auction; MIB Rallies +2.5%; COMPQ (Nasdaq Composite) All-Time High; RUT (Russell 2000) New 2016 High; INTU; LZB

The Nikkei Index futures point to a lower open for the regular session. Ditto the SPASX200. USD 94.57. Euro 1.1325. Dollar/yen 100.11. Pound 1.3143.

US futures are slightly negative. S&P -2. Dow -7. Nasdaq -4. WTIC oil 47.05. Brent oil 49.02. Natural gas 2.67. Gold 1342. Silver 18.85. Copper 2.143.

Treasury yields are; 2-year 0.75%, 5-year 1.14%, 10-year 1.55%, 30-year 2.24%. Treasury yields are moving through the tightest sideways range in 10 years. German bund -0.084%. Japan 10-year yield -0.073%.

Markets are quiet so far this week waiting on Fed Chair Yellen’s speech on Friday from Jackson Hole. RBNZ Governor Graeme Wheeler says further rate cuts are on the table for New Zealand.

A typhoon, the first in 11 years, hits Japan with high winds and rain. Flights are cancelled. In the semiconductor space, Renesas Electronics loses -5.2% on news it is providing an offer to buy ISIL (Intersil). Oil Search tumbles nearly -1% in Aussie trading after reporting earnings.

Nigeria says hostilities between the government and warring factions are ceasing. This will bring more oil production on line and continues the softness in oil prices. GS says the oil market remains “oversupplied.” WTIC oil is down -0.8% to 47.05. Brent oil is down -0.6% to 48.87. Natural gas is down -0.5% to 2.67. Gold 1340. Silver is up +0.7% to 19.14. Copper is up marginally to 2.156.

The NIKK ends the session down -0.6% to 16497. The dollar/yen pair trails lower printing a LOD at 99.95 reflecting a stronger yen so Japanese stocks trade weak. The SPASX200 ends up +0.7% to 5554. The KOSPI is up +0.4% to 2050. The SSEC is up +0.2% to 3091. The HSI loses -0.2% to 22943 unable to regain the 23K level.

India stocks are trading marginally lower. BSE -0.1%. Nifty -0.1%. European index futures point to a higher open across the board of +0.5% and higher.

S&P +1. Dow +8. Nasdaq +2. Euro 1.1336. Dollar/yen 100.03. Pound 1.3164. Aussie dollar 0.7653. Dollar/yuan 6.6448.

WTIC oil 47.05. Brent oil 48.87. Natty 2.67. Gold 1340. Silver 19.14. Copper 2.156.

At 3 AM EST (8 AM London), European indexes begin trading higher as the futures indicate. DAX and CAC are up +0.5% each. FTSE +0.4%. Materials, metals and miners and industrials lead higher. Healthcare and energy sectors are weak. France PMI Mfg Index slips to 48.5 in contraction and missing the 48.8 expected. France PMI Services Index is 52.0 better than the 50.5 expected.

UK builder Persimmon is up +3.0% after reporting earnings. Renault drives into a ditch losing -3%. Watch makers continue to struggle with European exports down -14% year-on-year. Richemont trades -0.3% lower and Swatch loses -0.7%. Bayer and Monsanto say their proposed deal will likely finalize over the next two weeks. Bayer -0.3%. The euro is at the session highs at 1.1339. Dollar/yen 100.07. Pound 1.3172. USD 94.23.

S&P +1. Dow +13. Nasdaq +4. VIX is at 12.27 and will be on line and trading shortly. WTIC oil 47.06. Brent oil 48.89.

The quiet market action continues. Yellen is the star attraction on Friday. Fed Funds futures indicate a 24% chance of a Fed rate hike in September, 31% in November, 51% in December and 53% in February. Yesterday, market participants expect a one in five chance of the Fed hiking the key rate next month and now that is higher to a one in four chance. Vice Chairman Fischer, Williams, Dudley and Lockhart are jawboning a rate hike but the market is not buying the hawkish rhetoric. After all, Yellen is the Queen of the Doves and the most accommodative Fed head in history.

At 3:30 AM EST, German PMI Mfg Index is 53.6 matching estimates. German PMI Services Index is 53.3 missing the 54.4 expected. DAX +0.3%. CAC +0.4%. FTSE +0.4%. Persimmon +3.5%. Bayer -0.6%. MIB +1%. Italy rises on happy talk about shoring up the troubled Italian banks. UniCredit +3%. IBEX +0.7%. PSI +0.2%. European indexes are in rally mood to begin the Tuesday trade.

Euro 1.1347. Euro/yen 113.51. Dollar/yen 100.03. Pound 1.3184. Euro/pound 0.8607. Mexican peso 18.2436. Canadian dollar 1.2894. Dollar/yuan 6.6399. Aussie dollar 0.7646. The Turkish lira is at 2.9382 with the central bank interest rate decision on tap this morning. USD 94.30.

S&P +2. Dow +17. Nasdaq +6. The VIX is on line at 12.17. Lower volatility creates higher futures. WTIC oil is down -0.9% to 46.97 losing the 47 level. Brent oil is down -0.7% to 48.82 under the 49 level. Natty 2.66. Gold 1342. Silver 19.17. Copper 2.154.

Treasury yields are steady; 2-year 0.74%, 5-year 1.14%, 10-year 1.55%, 30-year 2.24%. German bund -0.085%. Japan 10-year yield -0.092%.

At 4 AM EST, Euro zone PMI Mfg Index is 51.8 a hair below the 52.0 expected. Euro-area PMI Services Index is 53.1 besting the 52.8 expected. The manufacturing and services data is mixed in Europe.

Oil pops, volatility drops, and US futures and European indexes move higher. S&P +5. Dow +44. Nasdaq +14. VIX 11.98. WTIC 47.05. Brent 48.94. Gold 1340. Silver is up +0.7% to 19.13. Copper is down -0.1% to 2.1510. Copper is not joining the party.

DAX +0.9%. CAC +0.8%. FTSE +0.7%. MIB +0.8%. Nifty -0.2%. Euro 1.1342. Dollar/yen 100.15. Pound 1.3186. Euro/pound 0.8604. Dollar/yuan 6.6432. Aussie dollar 0.7645.

Treasury yields are; 2-year 0.75%, 5-year 1.15%, 10-year 1.56%, 30-year 2.25%.

At 5 AM EST (10 AM London; 11 AM Frankfurt), S&P +5. Dow +40. Nasdaq +14. VIX 12.02. DAX +0.8%. CAC +0.7%. FTSE +0.5%. Euro 1.1330. Dollar/yen 100.20. Pound 1.3184. Euro/pound 0.8594. Canadian loonie 1.2918. Aussie dollar 0.7642.

WTIC oil is down -1.3% to 46.81. Brent oil is down -1.2% to 48.59. Natural gas is down -0.9% to 2.66. Gold 1339. Silver 19.13. Copper is down -0.3% to 2.145. Oil and copper are weak and the VIX is trying to hold the 12 level and move higher so it is odd to see the US futures and European indexes remaining elevated.

At 6 AM, European stocks and US futures are steady. WTIC 46.93. Brent 48.66. Copper 2.1465. VIX 11.98.

At 7:10 AM EST, Turkey’s central bank cuts the overnight lending rate to 8.5%. Turkish lira 2.9348.
S&P +5. Dow +46. Nasdaq +13. VIX 11.98. DAX +0.9%. CAC +0.7%. FTSE +0.6%.

Best Buy surprises with a much stronger earnings report than expected and the top line is strong beating estimates. Interestingly, appliances and large screen televisions dominate sales rather than electronics. BBY launches +15%. SJM chokes on a peanut butter and jelly sandwich losing -3.4%. JM Smucker’s pet food division margins are hit. The bell tolls for TOL down -2.2% after missing on EPS but beating on the top line. Homebuilders may trade soft in sympathy.

YGE catapults +12% higher after earnings. Yingli Green is seeing green. Mobileye and Delphi Automotive form a partnership. MBLY +4%. DLPH is not yet trading. After last evening’s earnings, ZOES crashes -16%. MON gains +4.1% on news that the deal with Bayer is progressing positively. SQ gains +2% on a Stifel upgrade. MYL trades lower on news that Congress is seeking answers as to why the EpiPen device, that treats allergic reactions, has increased fourfold in price.

A Muslim nutcase sympathizer goes berserk screaming, “Allahu Akbar! (God is Great!)” as he stabs a female victim in Virginia. Wasil Farroqui was trying to behead the victim that survives. He also attacked two other victims. In the Middle East, a terror attack is thwarted and a potential suicide bomber is arrested; the child is only 12 years old. The sick Islamic radicals are strapping bombs to children as they wage a new Holy War against Christians and Jews.

US stocks begin trading higher. The SPX gains 9 points, +0.4%, to 2191. The S&P 500 and Nasdaq Composite are each running towards record highs. The Dow gains 87 points to 18615. The Nasdaq is up 20 points to 5265. VIX 11.93. Market bears do not have a chance with the VIX under 12.

DLPH +3.3%. MBLY +7%. SQ +3.3%. TWTR +0.8%. BBY catapults +16% higher. Shorts are running for their lives. PVH gains +2.4%. MYL -0.3%. CAT +1%. DE +0.4%. Nike and Caterpillar send the Dow higher. NKE +1.6%.

Food stocks are the skunks at the garden party. GIS -0.1%. CPB pukes -1.4%. CMG flat. K -0.4%. Kroger needs a clean-up in aisle two as KR collapses -1.9%.

TOL erases the pre-market losses and leaps +8% higher a huge 11% turnaround in one hour’s time. Housing stocks jump higher boosted by the Toll Brothers joy and the Louisiana and southern US floods. XHB +1.8%. LEN +3%. PHM +2.9%. DHI +2.9%. KBH +4.9%.In the last nine months, Toll Brothers has reduced its share count by 7% an aggressive buyback path. Financial engineering rules today’s markets. The four years of buybacks create an artificially low PE across the broad market; stocks are more overvalued than the consensus thinks.

A massive rebuilding effort will be required for the flood disaster so Home Depot, Lowe’s, Whirlpool, Masco, Mohawk and many other companies will benefit. HD +0.7%. LOW +0.5%. WHR +1.4%. MAS +0.9%. MHK +1.3%. SHW +1.1%. LL +0.3%. USG +1.8%. SWK +0.6%. Floodwaters will turn interior house walls into a wet white powder so lots of new drywall (gypsum board) will be required and to no surprise, USG leads the parade of housing suppliers higher.

The SPX is up 10 points to 2193. The Dow gains 96 points to 18626. The Nasdaq is up 23 points to 5268. VIX 11.84. WTIC oil 46.88. Brent oil 48.81. Basic materials lead higher. XLB +1.1%.

The PMI Mfg Index Flash (preliminary) is 52.1 missing the 52.7 and below last month’s revised higher 53.2. New Orders and Employment components are weak.

DAX +1.1%. CAC +0.9%. MIB is up a huge +2.2% on rosy talk about the troubled Italian banks that are selling off assets to support balance sheets. IBEX +1.4%. Hungary’s central bank leaves its benchmark rate unchanged at 0.90%.

The Nasdaq prints a new all-time record high at 5275.74. The Russell 2000 prints a new high for this year at 1251.33 and likely a new closing high for 2016 at the end of the day.

Iran says it is open to working with other oil producers to set production limits. WTIC oil is up +1.1% to 47.94. SPX 2191. INDU 18569. COMPQ 5267. RUT 1250. VIX 11.98. USD 94.40. Copper is down -0.7% to 2.1245. Tesla CEO Elon Musk says a big product announcement will be provided after the closing bell. TSLA jumps +2%. SCTY +1.8%.

At 10 AM, New Home Sales are up a big +12.4% to 654K units blowing away the 580K expected and above the prior revised-lower 582K units. Home Sales are at the best levels in nine years. The Richmond Fed Mfg Index is -11 versus the prior +10. New Orders and Backlog numbers are weak which is a troubling sign for the economy. The manufacturing data is softening.

European indexes end the session higher sans Portugal. Italian banks lead the rally party. The DAX gains +0.9% to 10593. The CAC is up +0.7% to 4421 sitting a the 200-day MA. Price will bounce or die tomorrow. The FTSE is up +0.6% to 6869. The MIB is the big winner up +2.5%. IBEX +1.3%. The PSI slips a hair -0.1% to 4700.

Persimmon constructs a +4.5% gain during European trading. Miners are strong. UniCredit, the troubled Italian bank, gains +6.5% on news of selling off assets to raise cash.

10-year yields are; US 1.55%, Italy 1.13%, UK 0.55%, Germany -0.09%.

President Obama visits the flood-stricken Louisiana; he finally finds time to call attention to the tragic storm and flooding more than 10 days after the rain began.

Copper is down -1% to 2.1185. Market bulls will have trouble pushing stocks higher without copper participating. Stocks begin trending sideways to sideways lower as the session progresses. The Dow was up 102 points at the highs. WTIC oil 47.83. Brent oil 49.23.

MYL tanks -3.4% as Congress continues pressuring the drug maker over the EpiPen. Biotech stocks support the broad indexes. REGN +1%. Also tech. GPRO +4.1%. BMRN +1.2%. QCOM +0.7%. BBY +19%. The bread goes stale at Panera as PNRA drops -0.2% despite a Canaccord upgrade.

Copper is down -1.2% to 2.11. The 2-Year Note Auction goes off at 0.76% under average demand. Treasury yields are; 2-year 0.75%, 5-year 1.15%, 10-year 1.56%, 30-year 2.24%.

The SPX is down 6.66 points to 2189. Homebuilders are on fire. XHB +2%. TOL +9%. KBH +5%. Oil, energy and gas stocks are higher including CHK, MRO, SWN and RRC.

Oil is at the day’s highs. WTIC 48.04. Brent 49.90. Comically, Iran probably loaded up on calls and then announced the intent to work with other oil producers (lower supply higher oil prices) and enjoys the easy money gains. Next, Iran will load up on oil puts and announce that they are not going to cooperate with other oil producers and plan to ramp up oil production (larger supply lower oil prices) and watch oil price plummet. The market manipulation is easy as pie.

US stocks end the session flat. The SPX is up 4 points, +0.2%, to 2187 a whisker away from all-time highs. The S&P 500 has traded for 32 sessions without moving more than 1% up or down on a daily closing basis. This behavior has not been seen in two years and represents a summer lull and a market waiting for Yellen to tell the story on Friday.

The Dow Industrials are up 18 points, +0.1%, to 18547. The Nasdaq Composite is up 15 points, +0.3%, to 5260 printing a new all-time record high at 5275.74. The RUT is up 9 points, +0.7%, to a new closing high for this year at 1249 and a new intraday high for this year at 1251.

The VIX moves higher to 12.38. Volatility is higher with stocks higher so one of them is wrong and the winner will be determined tomorrow. The put/calls remain low the CPCE dropping down to 0.56. A stock market top is expected right now but the bulls keep finding a way to keep equities elevated.

After the bell, earnings reports send stocks lower except for Nimble Storage. DY tanks -4.3%. , INTU is whacked -4.6%. , LZB collapses -15% and shareholders need a La-Z-Boy recliner to handle the pain. NMBL jumps +6.2% higher.

Tesla’s big announcement is unveiling a new Model S sedan and a new Model X crossover vehicle that have longer battery ranges and faster acceleration. Musk is a showman that tries to squeeze free publicity out of his mundane announcements. TSLA trades all over the map and is up +0.8% matching the +0.8% gain during the regular session. SCTY is up +0.5% adding to a +0.3% gain today.

API Oil Inventories are a big build up 4.5 million barrels. Gasoline inventories are a drawdown of 2.2 million barrels. Oil prices track lower. Oil inventories are at the highest levels in 30 years.

The Clinton Foundation scandal expands. Many donors to the so-called charity received access to the State Department under the control of then Secretary of State Hillary Clinton. She met one-on-one with donors at the State Department that donated to the charity. These are direct payments to a government official for access which is illegal.

Clinton downplays her nefarious activities calling the new revelations frivolous and a republican smear. The majority of the US press continues to run cover for Clinton to help her achieve the Whitehouse. If Clinton is elected president, she will easily sweep all her scandals under the rug forever. The United States has grown into a very corrupt nation over the last decade.