Wednesday, June 21, 2017
THURSDAY 6/22/17; ACN; BKS; HAIN; Leading Indicators; Kansas City Fed Mfg Index; BBBY; SONC; US Bank Stress Tests
S&P -4. Dow -30. Nasdaq -7. Euro 1.1168. Dollar/yen 111.32. Pound 1.2675. Aussie dollar 0.7547. Dollar/yuan 6.8295.
WTIC oil 42.63. Brent oil 44.82. Natural gas 2.90. Gold 1249. Silver 16.50. Copper 2.609.
US Treasury yields are; 2-year 1.35%, 5-year 1.77%, 10-year 2.16%, 30-year 2.73%. The 2-10 spread is 81 bips.
New Zealand central bank leaves its key rate unchanged at 1.75% as expected. The RBNZ sees inflation as remaining anchored for the months ahead. The New Zealand dollar, kiwi, NZD-USD, is at 0.7241. The Taiwan and Philippines central banks also announce rate decisions over the coming hours.
S&P -3. Dow -26. Nasdaq -5. Kiwi 0.7245. Indian rupee 64.5225. USD 97.53. WTIC oil 42.60. Brent oil 44.85.
Asia and Aussie indexes beginthe session mixed with Japan lower and Australia and South Korea higher. NIKK -0.1%. SPASX200 +0.4%. KOSPI +0.2%.
Oil continues leaking lower. WTIC oil 42.36. Brent oil 44.63. USD 97.49. New Zealand 0.7251. Pound 1.2666.
In Australia, Oil Search gains +2.2% and Santos +1%. In Japan, troubled Toshiba chooses a government-led consortium as the winning bidder for its chip unit. Toshiba is selling the lucrative semiconductor business to shore up its balance sheet decimated by the Westinghouse nuclear division bankruptcy. US firm Bain Capital, that is associated with former presidential candidate Mitt Romney, and South Korea’s SK Hynix are involved with the deal. Toshiba trades down -0.3%. SK Hynix +0.3%.
Trading in the Pacific theater finishes mixed overnight. The NIKK ends the session down -0.1% at 20111. The ASX 200 finishes up +0.7% to 5706. The KOSPI rallies +0.5% to 2370. The SSEC loses -0.3% to 3147. The HSI finishes down -0.1% to 25675. India trading continues with the Nifty up 50 points, +0.5%, to 9684.
At 3 AM (8 AM London; 9 AM Frankfurt), European indexes are moving to the downside. DAX -0.3%. CAC -0.4%. FTSE -0.5%. The oil and gas sector is slapped -1.5% lower. Subsea 7 is drowning -5%. Computer screens are red across the board. Imagination Technologies bucks the negative trend catapulting +17% on news of putting itself up for sale; Apple is its largest customer.
S&P -4. Dow -22. Nasdaq -8. Russell -5. VIX 10.83.
Euro 1.1167. Euro/yen 123.56. Dollar/yen 111.06. Pound 1.2666. Euro/pound 0.8813. Mexican peso 18.1779. Canadian dollar 1.3325. Dollar/yuan 6.8306. Indian rupee 64.515. Aussie dollar 0.7545.
WTIC oil is down -0.2% to 42.43. Brent oil is down -0.3% to 44.70. Natural gas is up +0.5% at 2.91. Natty gas inventories are on tap in seven hours.
Gold gains 6 dollars, +0.5%, to 1253. Silver is up +1.2% to 16.64. Copper is down -0.9% to 2.5925.
US Treasury yields are; 2-year 1.34%, 5-year 1.76%, 10-year 2.15%, 30-year 2.72%.
A two-day summit begins in Brussels for the European Council with European Union leaders meeting to discuss globalization, terrorism, security and climate change. UK PM May will join the group this evening for dinner. May is expected to outline the British proposal for exiting the EU. Both the EU and UK say the initial Brexit discussions are “generally constructive.”
The Norwegian central bank leaves its key rate unchanged at 0.5%. The Euro-Norwegian Krone currency pair, EUR-NOK, is 9.4821. The Norges Bank says inflation is well below target. However, Governor Olsen sees no danger from deflation and says wage growth is moderate. Olsen does not plan further rate cuts and instead expects inflation to increase. The Taiwan central bank maintains its key rate at 1.375% as expected.
As the Paris Airshow contracts are counted, Boeing is the big winner receiving nearly double the orders that Airbus receives. Boeing is given orders for 420 planes totaling $58 billion. Airbus is awarded 229 airplane orders totaling $25 billion. BA continues printing record highs poking up through the 200 level this week.
At 4:02 AM, S&P -5. Dow -29. Nasdaq -9. Russell -6. VIX 10.92.
At 5 AM EST (10 AM London; 11 AM Frankfurt and Brussels), DAX -0.4%. CAC -0.666%. FTSE -0.6%. MIB -1%. IBEX -0.9%. PSI -0.9%. The SMI bucks the downtrend gaining +0.4%. OMX -0.1%.
S&P -4. Dow -26. Nasdaq -7. Russell -5. VIX 10.88. The Nifty is up 18 points, +0.2%, to 9653.
WTIC oil 42.47. Brent oil 44.81. Natty 2.92. Gold 1252. Silver 16.61. Copper is turning positive at 2.6155. Copper is greatly influencing broad stock market direction this week. As copper goes, so goes the stock market.
US Treasury yields are; 2-year 1.34%, 5-year 1.76%, 10-year 2.15%, 30-year 2.71%.
Euro 1.1171. Dollar/yen 111.11. Pound 1.2666. Euro/pound 0.8819. Aussie dollar 0.7552. USD 97.51. South Africa rand 13.0197. Political turmoil and drama continues in South Africa.
At 6 AM, S&P -3. Dow -20. Nasdaq -7. Russell -4. VIX 10.82. DAX -0.2%. CAC -0.5%. FTSE -0.4%. MIB -0.9%.
Oil shakes off the negativity and begins rallying strongly higher. Dip-buyers are willing to jump in. WTIC oil gains +0.666% to 42.82. Brent oil gains +0.9% to 45.23. Natural gas rises +1.1% to 2.93. Gold is steady at 1252.
At 7 AM EST, European indexes and US futures improve towards the flat line. Higher oil and copper and lower volatility creates lift in stocks and futures. S&P -1. Dow -11. Nasdaq -3. Russell -3. VIX 10.73. DAX flat. CAC -0.3%. FTSE -0.4%. The Nifty finishes down 4 points to 9630.
WTIC oil 42.77. Brent oil 45.16. Natural gas 2.91. Gold 1251. Silver 16.61. Copper gains +0.2% to 2.62.
Tropical storm Cindy is wreaking havoc from Texas to Florida with Louisiana and Alabama in states of emergency. Flooding and power outages are ongoing. Business and commerce is hampered by the storms in the southern states and the excessive heat wave in the southwestern states.
The morning continues…..
ACN…. Earnings ….BKS HAIN
SPLS pops +6.8% on takeover chatter.
At 8:30 AM, Jobless Claims are
The FHFA House Price Index is
At 9:30 AM EST (2:30 PM London),
At 10 AM, Leading Indicators are
Fed’s Powell says
The EIA Natural Gas Inventories are
The Kansas City Mfg Index is
European indexes end the session
A 30-Year TIPS Auction goes off at 1 PM.
US stocks end the day
After the bell, BBBY SONC
Tuesday, June 20, 2017
WEDNESDAY 6/21/17; Cascading Global Stock Market Selloff; First Day of Summer; Bradley Turn Date; US Yield Curve Flattens with 2-10 Spread Below 80 Bips; Provident Financial Crashes -20%; WGO; Existing Home Sales; Oil Slips -2.5%; Brent Oil Bear Market; Ethereum Flash Crash; ORCL; SCS
Today is a Bradley turn date. The Bradley siderograph identifies dates in the market where an inflection occurs as either a trend change or sometimes a strong acceleration of the existing trend. The stock market turns typically occur +/- 3 days around the turn date (today) although a window of +/- 7 days is open to allow for the inflection point should it occur (6/14/17 through 6/28/17).
The current stock market trend (S&P 500) is choppy sideways with an upward bias. If yesterday’s selloff in stocks continues, perhaps the Bradley turn is a move to the downside for equities.
Today is the first day of summer. Men and women don bright swim suits but their spirit darkens as they view their flabby physiques and sagging flesh in full-length mirrors. The doughnuts, potato chips, cookies, ice cream, pies, white bread, hotdogs and chocolate are far too delicious to ignore. The swim suit looks smaller.
US futures are flat. S&P -1. Dow -3. Nasdaq -1. Japan Nikkei Index futures are down -0.3%. Australia’s ASX 200 Index futures are down -0.5%. A cascading global stock market selloff is beginning to loop around the world. Asia was weak yesterday with the exception of the NIKK. That weakness rolled into a sick Europe that then cascaded into the US that fell on its face. The stock market negativity now loops back to Asia and today the NIKK is set for a negative open.
Euro 1.1135. Dollar/yen 111.31. Pound 1.2631. Aussie dollar 0.7578. Dollar/yuan 6.8292. Oil price remains challenged after the API Oil Inventories data a couple hours ago. WTIC oil 43.46. Brent oil 46.02. Natural gas 2.90. Gold 1245. Silver 16.47. Copper 2.5715.
US Treasury yields are; 2-year 1.34%, 5-year 1.76%, 10-year 2.16%, 30-year 2.74%. The 2-10 spread is at 80.8 bips. The 2-10 and 5-30 spreads are starting to compare back to narrow spreads (flatter yield curves) not seen since 2007.
Fed Funds futures indicate a 0% chance for rate hike at the July Federal Reserve meeting. Futures suggest a 16% chance of a rate hike at the September meeting, 18% chance in November, 41% chance in December, 42% chance in January and 53% chance in March. The bond market does not expect the Federal Reserve to hike again this year; however, Chair Yellen says she is on a path to hike at least one more time this year. Someone is going to be wrong in the weeks and months ahead.
German bund 0.26%. Japan 10-year yield 0.05%. UK gilt 0.998%. France 10-year yield 0.61%.
The backward-looking BOJ Meeting Minutes say risks to Japan’s economy are skewed to the downside. This is dovish talk to keep the central banker accommodation going. The Bank of Japan says momentum towards the price goal is proceeding slowly (in other words, the inflation the central bank is trying to create is not occurring). Several BOJ members doubt that inflation can reach the +2% goal during the projection period.
The China Securities Regulatory Commission (CSRC) says the MSCI decision to include Chinese stocks in the emerging market index shows confidence in China’s economic growth. The CSRC proclaims that the decision and multi-year milestone accomplishment meets the international demand for Chinese stocks. The Chinese regulators plan to improve the A-share trading rules. The EEM ETF will be closely watched in today’s trade.
Asia and Aussie indexes are trading lower in the early going. NIKK -0.4%. KOSPI -1%. ASX 200 -1.4%. Stock markets are in a risk-off mood. Miners are crushed. BHP Billiton drops -3.1% and Rio Tinto is slapped -2.8% lower.
US futures weaken after the Aussie and Asia indexes open for trading. S&P -4. Dow -20. Nasdaq -14. There is an ugliness surfacing in the market. WTIC oil 43.43. Brent oil 45.90. Copper 2.568.
Chinese stocks trade lower after the opening bell. The Shanghai Index recovers ot the flat line but Hong Kong’s Hang Seng Index is down -0.8%. The Asia computer screens are a sea of red. Commodities are trying to stabilize flat or move marginally higher. WTIC oil 43.55. Brent oil 46.02. Copper 2.575.
The Asia indexes remain negative throughout the session except for the SSEC that trades higher. Traders are happy that Chinese stocks will be listed in the MSCI Index. Generally, a cascading global selloff makes one loop around the world and the lower European index and US futures indicate that the selloff has legs.
The NIKK ends down -0.5% to 20139. Australia’s SPASX200 finishes down -1.6% to 5666. The land down under takes it on the chin overnight. The KOSPI loses -0.5% to 2358. The Shanghai Index rises +0.5% to 3156. The HSI loses -0.6% to 25696. India trading continues with the Nifty down 33 points, -0.3%, to 9621.
In the States, Uber founder and controversial figure Travis Kalanick resigns as CEO although he will remain on the board. Kalanick has been the center of negative stories such as berating and hitting an Uber driver a few months ago and ongoing sexual harassment issues. At the same time, he recently lost his parents in a terrible boating tragedy. The ride-sharing company is valued at $69 billion and remains a darling of venture capitalists.
Uber is expected to IPO in the future but the ride-hailing service is dealing with many controversies, labor issues, competition and other problems. Rival Lyft is gaining market share in the United States. Uber investors are likely feeling uncomfortable with the young ride-sharing company that is an untested long-term business model.
In Saudi Arabia, King Salman further juggles the top positions in the Kingdom elevating his son, Mohammed bin Salman, 31 years old, to Crown Prince. Clearly, the young Salman is next in line for the future throne and will be the major influence on government policy and the oil trade going forward. Salman is friendly with the United States and President Trump.
At 3 AM (8 AM London; 9 AM Frankfurt), European indexes trade lower. DAX -0.3%. France leads lower as many stocks go ex-dividend. CAC -0.5%.FTSE flat. MIB -0.3%. SMI -0.1%. Greece’s AEX -0.4%. The computer screens are a sea of red. Whitbread bucks the negativity and rises +5.2% after reporting strong sales. The bed at Premier Inn will feel a little softer and the café latte at Costa coffee stores will taste a little sweeter.
UK sub-prime lender Provident issues a profit warning reporting that the restructuring of its home credit division is not progressing as well as expected. Provident Financial is crashing -20%. The event feels like a little like a ‘Lehman-moment’ (Lehman Brothers, that had the ticker symbol LEH, was heavily leveraged in 2008 and after the bank did not receive a bailout, the collapse led the US and world into the 2008-2009 financial crisis). PROV will trade actively in the States today and was down -1.8% yesterday.
The financial sector is slapped silly. Banking and insurance stocks are off to a soggy start. European Banking Index -0.4%. The banking, insurance, auto and retail sectors are each down -0.4%. Travel and leisure and healthcare stocks are flat. Utilities are up +0.2% as trades seek a safe haven.
DAX -0.5%. CAC -1%. FTSE -0.2%. European Stoxx 600 Index -0.6%.
S&P -6. Dow -27. Nasdaq -21. Russell -6. VIX 11.02. WTIC oil 43.43. Brent oil 45.88. Natural gas 2.90. Gold 1246. Silver 16.45. Copper 2.5665.
Euro 1.1133. Euro/yen 123.78. Dollar/yen 111.19. Pound 1.2608. Euro/pound 0.8830. Mexican peso 18.2138. Canadian dollar 1.3283. Dollar/yuan 6.83. Indian rupee 64.6025. Aussie dollar 0.7559. USD 97.74.
Treasury yields are; 2-year 1.35%, 5-year 1.76%, 10-year 2.15%, 30-year 2.73%. The 2-10 spread slips back under 80 basis points to 79.50 bips. Comically, Wall Street money managers keep buying banks with both hands touting big gains ahead for financials as the yield curve flattens. German bund 0.25%. UK gilt 0.98%. France 10-year yield 0.59%.
S&P -8. Dow -33. Nasdaq -26. Russell -6.66. VIX 11.38. DAX -0.666%. CAC -1.3%. FTSE -0.3%. SMI -0.8%. OMX -0.9%. The Nifty is down 38 points, -0.4%, to 9616.
Oil slips -1% lower. WTIC oil 43.11. Brent oil 45.54. Euro 1.1136. Dollar/yen 111.14. Pound 1.2606. Euro/pound 0.8834.
At 4:30 AM EST, S&P -7. Dow -30. Nasdaq -24. Russell -6. VIX 11.33.
At 5:00 AM EST, S&P -6. Dow -17. Nasdaq -23. Russell -5. VIX 11.26. The market bears are flexing their muscles this morning. WTIC 43.45. The EIA Oil Inventories data is released in 5-1/2 hours.
DAX -0.6%. CAC -1%. FTSE -0.2%. MIB -0.4%. IBEX -0.8%. PSI -0.4%. Euro 1.1145. Dollar/yen 111.19. Pound 1.2619. Aussie dollar 0.7566. Dollar/yuan 6.8282.
The Nifty finishes down 20 points, -0.2%, to 9634. WTIC oil 43.31. Brent oil 45.75.
Treasury yields are; 2-year 1.34%, 5-year 1.75%, 10-year 2.14%, 30-year 2.72%.
Queen Elizabeth speaks in front of parliament. She says the UK must tackle unfair energy market practices. The Queen says the UK will strive to keep taxes low and would like to see raises in the minimum wage. The Queen looks forward to a state visit from Spain but she does not mention the United States or President Trump.
At 7 AM EST, US Mortgage Applications are up +0.6% with refi’s up +2.0% and mortgage loan applications down -1%. The tight supply of houses maintains high prices out of reach of common Americans that struggle through high debt and structural unemployment.
S&P -4. VIX 11.19. OPEC says further oil output cuts are likely. Oil prices rally. WTIC pops +0.4% to 43.69. Brent oil pops +0.2% to 46.14. Natty 2.94.
Winnebago is a winner. WGO rides +4% higher on earnings. KMX drives +8% higher on strong earnings. RHT is up +9.4% after last evening’s earnings. ADBE +4.1%. FDX is down -0.7% after last evening’s earnings. UPS trades lower in sympathy. LZB +12%.
TGT loses -0.7% on a downgrade from C. PYPL bounces +1.4% on a Pacific Crest upgrade. CVX slips -0.5% on a Macquarie downgrade. CA rises +13% on a potential takeover deal.
US futures recover as oil and copper prices move higher and volatility trends lower. S&P futures are dead flat. Dow +5. Nasdaq +11. Russell +1. VIX 11.10. DAX -0.3%. CAC -0.5%. FTSE -0.4%.
Treasury yields are; 2-year 1.36%, 5-year 1.77%, 10-year 2.17%, 30-year 2.75%. The 2-10 spread is 81 bips. WTIC 43.59, Brent 46.01. Gold 1243. Silver 16.37. Copper 2.5995.
At 9:30 AM EST (2:30 PM London), US stocks float marginally higher. The S&P 500 gains 2 points to 2439. The INDU begins the day up 14 points to 21482. The Nasdaq Composite gains 14 points to 6202. The RUT is up 3 points to 1406. VIX 10.53.
Italy’s MIB Index jumps strongly higher up over +1% and climbing. Euro 1.1135. Euro/yen 124.25. Dollar/yen 111.58. Pound 1.2687. Euro/pound 0.8778. Indian rupee 64.5225. Mexican peso 18.1666. Canadian dollar 1.33. Dollar/yuan 6.8282. USD 97.73.
WTIC oil 43.55. Brent 45.90. Gold 1243. Silver 14.38. Copper 2.6015.
Biotech and healthcare stocks are on fire to the upside. Talking heads are now touting the healthcare sector as the new favorite flavor. XLV +0.5%. IBB +1.2%. Chips rally. SOX +0.5%. XLK +0.3%. Utilities, XLU, are flat. Retail stocks and banks are slapped. XRT -0.3%./ XLF -0.4%. Energy stocks lead lower. XLE -0.5%.
Nike is starting to sell its products directly through Amazon. NKE +1.1%. FL -8.3%. FINL -4%. DKS -7.8%.
At 9:45 AM EST, a deranged Muslim, a 50-year old Canadian resident, Amor Ftouhi, goes berserk at the Flint Airport in Michigan yelling, “Allahu Akbar (God is Great)!” while stabbing a police officer in the neck. Ftouhi entered the US via New York and then traveled to Michigan. The Islamic radical is in custody and the police officer is expected to recover.
At 10 AM, Existing Home Sales are up +1.1% month-on-month in May to 5.62 million units beating the 5.55 million expected. The prior month is revised lower from 5.57 million units to 5.56. Year-on-year sales are up +2.7% above the prior revised-lower +1.5%.
The median house price rises +5.8% year-on-year to $252,800 an all-time high. 1.96 million homes are available for sale down -8.6% year-on-year. The house inventory is at four months but an inventory at six to seven months is needed to create enthusiasm in the housing market. Houses are selling in a fast 27 days or less in many communities and in several hot cities, homes are sold only seven days after coming to market.
Speaking of hot, a different kind of hot, Phoenix, Arizona, is hit with a serious heat wave parts of the city reach 120 F (49 C). Business and commerce will be hampered over the coming days in the southwestern United States until the heat subsides. The elderly are at risk in the dangerous heat. The most popular person in the state of Arizona today is the air conditioner repair man.
Tropical storm Cindy smacks the Gulf Coast with Louisiana the bullseye. States of emergency are declared in Louisiana and Alabama. Flooding is rampant. A little girl is killed by flying debris in Alabama. Business and commerce will be hampered in the southern states.
SPX 2438. INDU 21457. COMPQ 6213. RUT 1407. VIX 10.55. TRAN -0.2%. WTIC 43.62. Brent 46.00.
EIA Oil Inventories are down -2.5 million barrels a big draw. Gasoline inventories are also a drawdown. Distillates are a build bigger than expected. WTIC oil pops +1.2% to 44.06. Brent leaps +0.9% to 46.41. Natty 2.94.
SPX 2438. INDU 21461. COMPQ 6215. Copper rallies +1.3% to 2.606 which creates buoyancy in stocks. ADBE rallies +3% to a new record high. ORCL is up +1.1% at record highs ahead of earnings after the bell.
European indexes end the session mixed. The DAX drops -0.3% to 12774. The CAC loses -0.4% to 5274. The FTSE finishes down -0.3% to 7448. The MIB jumps 262 points, +1.3%, to 21072 above 21K. Spain’s IBEX loses -0.1% to 10741 but recovers well off the lows. Portugal’s PSI rolls over to the downside as the day proceeds and finishes near the lows down -0.5% to 5272.
Stocks print the lows at 2 PM and then rally into the closing bell off the lows. Tech, chips, biotech and healthcare stocks are winners. CA +13.4%. AMD +11%. MU +3.8%. WDC +3.2%. RHT +10%. INCY +7.6%. VRTX +6.66%. BMRN +7%. CBS +3.1%. Alibaba happy talk sends BABA up +3.6% and pumps other Chinese stocks higher. JD +5.6%.
Energy and retail stocks are losers. CHK -8%. SIG -5.5%. RIG -5%. NFX-4.4%. NBR -7%. DOV -4.1%. DD -2.6%. FL -5%. Ulta Beauty, ULTA, is down an ugly -2.6%. PCAR -2%. ORLY is run over losing -2%. TSCO -1.5%. ROST -1.4%. PROV -0.5%.
Nike leads the Dirty Thirty higher. NKE +2%. Big pharma and healthcare stocks rally the Dow Industrials Index while industrials, energy and bank stocks create weakness. MRK +1.4%. PFE +1%. UNH +0.9%. WMT +0.9%. CAT -3.3%. GE -1.2%. DD -2.6%. CVX -1.2%. GS -1.2%.
Treasury yields are; 2-year 1.35%, 5-year 1.77%, 10-year 2.16%, 30-year 2.73%.
WTIC oil 42.62. Brent oil 44.90. Natty 2.90. Gold 1246. Silver 16.41. Copper 2.609.
At 3:30 PM EST (12:30 PM PST West Coast time), the GDAX exchange, operated by Coinbase and trading the ethereum cryptocurrency, experiences a flash crash. A multi-million dollar order hits the exchange and orders are getting filled for ethereum in the 224 to 319 range but the price is beginning to plummet. Over 800 stop loss orders and margin calls are triggered as price moves lower sending ethereum into free fall.
Shockingly, ethereum drops to 10 cents from the 319 starting point a -99.97% flash crash. Internet messages accuse the GDAX for manipulating the ethereum price and other nefarious behavior but the exchange refutes the allegations and says the computer price matching engine operated as intended. GDAX warns ethereum holders that using margin comes with inherent risks. The GDAX says no trades will be reversed. Some ehtereum investors complain that they lost from $1,000 to $10,000 on the flash crash.
The ethereum blockchain platform is heralded by Microsoft and other tech companies. MSFT +0.5%. Ethereum price quickly recovers from the event and flash spikes to 317 on the GDAX exchange. Ethereum is at 336 on other exchanges. The wild action in cryptocurrencies continue.
US stocks end the day mixed. The Nasdaq indexes rally so the cascading global selloff runs out of gas. The SPX drops 1 point to 2436. The Dow loses 57 points, -0.3%, to 21410. The Nasdaq composite gains 46 points, +0.7%, to 6234. The Russell 2000 drops 4 points, -0.3%, to 1399. VIX 10.75. Market bears could not make any headway lower since volatility remains subdued.
After the bell, ORCL launches +8.4% on earnings and prints a new record high. SCS crashes -20% after missing on earnings. Weak furniture sales indicate slowness in business spending and a lackluster housing sector. Energy company NFX collapses -3% in AH’s trading adding to the -4.4% dump during regular hours. Newfield Exploration’s stock price is losing energy.
Brent oil slips into a bear market joining WTIC oil. Brent is down -22% off the February top. A stock or index is in a bear market if it falls more than -20% from a price peak.
Fed’s Powell releases notes ahead of tomorrow’s speech. Powell says banks have stronger capital levels. He supports updating living wills every two years rather than one year. Powell is reassessing the Volcker Rule. Powel is ready to roll back the rules on the banks.
President Trump expresses disappointment that China is unable to help the US with the troubling North Korea situation. Trump tweets, “At least China tried.” China takes slight offense to the comments saying it takes time to remedy the growing aggression. Trump had said that the US will pursue a different path in handling North Korea if China cannot help. This will create angst in China but it is their own fault for not handling North Korea; they allow and facilitate their little communist brother to continue the aggression.
Monday, June 19, 2017
TUESDAY 6/20/17; BOE Governor Carney Speaks; Fed Speak Including Vice Chairman Fischer; Oil Collapses -3%; WTIC Oil Prints 42-Handle Now in Bear Market; Brent Oil 45-Handle; LEN; US 5-30 Yield Spread Lowest in a Decade; FDX; ADBE; LZB; RHT
Nikkei Index futures point to a +0.5% open for the NIKK. Australia ASX 200 futures are also up marginally so the cascading global rally continues looping around the world. Moody’s downgraded the four large Australian banks Commonwealth Bank, Westpac, NAB (National Australian Bank) and ANZ Banking Group, yesterday from Aa3 to Aa2. Eight other smaller Aussie banks were also downgraded so this may create a drag on the ASX 200.
S&P +1. Dow +8. Nasdaq +2. Euro 1.1149. Dollar/yen 111.57. Pound 1.2735. WTIC 44.20. Brent 46.81. Natural gas 2.896. Gold 1246. Silver 16.48. Copper 2.586.
Treasury yields are; 2-year 1.36%, 5-year 1.79%, 10-year 2.19%, 30-year 2.78%. German bund 0.29%. Japan 10-year yield 0.05%. UK gilt 1.03%. France 10-year yield 0.63%.
Asia and Aussie indexes are off to a happy start in the Tuesday trade. The NIKK and Topix each rally +0.8%. South Korea’s KOSPI gains +0.4%.
Australia’s ASX 200 is up marginally +0.1%. National Australia Bank drops -1.1%. ANZ -1.3%. Commonwealth Bank of Australia -0.666%.
S&P +2. Dow +27. Nasdaq +13. Euro 1.1148. Dollar/yen 111.72. Pound 1.2731. Aussie dollar 0.7591. Dollar/yuan 6.8195.
WTIC oil 44.31. Brent oil 47.46. Natural gas 2.90. Gold 1243. Silver 16.46. Copper 2.605.
Treasury yields are; 2-year 1.36%, 5-year 1.79%, 10-year 2.19%, 30-year 2.79%.
The Aussie dollar moves higher to 0.7610. The RBA releases meeting minutes that report concerns over household debt and lack of wage growth. The Reserve Bank of Australia’s meeting notes say that ‘economic growth is expected going forward’. The ASX 200 rolls over to the downside trading -0.2% lower and dropping.
The global stock market rally is petering out in Asia. Chinese stocks are on line with both the SSEC and HSI trading lower. Japan’s NIKK remains positive but the other stock indexes in the Pacific theater print red numbers.
Oil floats marginally higher overnight. WTIC oil 44.34. Brent oil 47.09. USD 97.47.
The NIKK ends the session up +0.8% to 20230. The ASX 200 finishes down -0.8% to 5757. The KOSPI is down -0.1% to 2369. The Sanghai Index finishes down -0.1% at 3140. The Hang Seng Index is down -0.3% to 25843. The global stock market rally ends with one loop around the world yesterday.
At 3 AM (8 AM London; 9 AM Frankfurt), European indexes begin the day moving marginally higher. DAX +0.4%. CAC +0.4%. FTSE +0.1%. MIB +0.3%. SMI +0.3%. Greece’s AEX +0.5%.
Every European sector begins trading in the positive. Oil and gas stocks are flat. Ditto real estate. Media is up +0.3%. Technology stocks are up +0.4%. The retail sector gains +0.4%. Banks jump +0.5% and lead the stock indexes higher. Former executives at Barclay’s, however, are charged with fraud concerning a financial deal with Qatar a few years ago. BCS is down -0.2%. Osram, a German lighting company, is shining brightly up +4% on a Bankhaus Lampe upgrade.
The Brexit negotiations begin yesterday and Britain is on the back foot conceding to the European Union’s plans for the process ahead. David Davis is negotiating for the UK while Michel Barnier is the chief negotiator for the EU. Barnier, a Frenchman, says, “The Brexit price for leaving the EU will be substantial.” Barnier says there will be “no concessions” on the part of the EU since Britain has chosen to leave the organization.
In the UK, Chancellor Hammond and BOE Governor Carney are speaking at Mansion House. This event was postponed after the horrific Glenfell Tower fire last week. Hammond discusses the plan and path ahead for the Brexit negotiations. Hammond proclaims, “We need a global crusade for liberalization of services.”
As Hammond speaks, the Bank of England releases Governor Carney’s comments. Carney speaks directly after Hammond. Global traders scan the notes and sell the pound from 1.2758 down to 1.2668.
Carney begins speaking and says, “There are mixed signals in consumer spending and investment.” Carney says, “We must wait to see how the economy reacts to the reality of Brexit.” The governor says, “Domestic CPI pressures (inflation) are subdued” and it is “not the time for a rate hike.” Carney importantly says, “Wage growth is anemic.” (Inflation will not exist without wage inflation.)
Carney flaps his dovish wings saying, “Any rate increases will be limited and gradual.” The pound sinks which pumps the FTSE index higher. The central bankers are the market.
Pound 1.2679. FTSE +0.4%. UK 10-year gilt yield 1.01%.
At 3:45 AM (8:45 AM London), DAX +0.3%. CAC +0.4%. FTSE +0.4%. US futures remain buoyant since volatility is subdued. S&P +2. Dow +24. Nasdaq +14. Russell +2. VIX 10.25. In India trading, the Nifty is up 5 points at 9662.
Euro 1.1147. Euro/yen 124.50. Dollar/yen 111.65. Pound 1.2683. Euro/pound 0.8792. Mexican peso 17.9984. Canadian dollar 1.3219. Dollar/yuan 6.8342. The yuan is stealthily weakening which helps create buoyancy in the SSEC index. Indian rupee 64.475. Aussie dollar 0.7617.
WTIC oil 44.34. Brent oil 47.10. Natural gas 2.90. Gold is up 3 bucks to 1247. Silver gains +0.4% to 16.57. Copper is down -0.2% to 2.602.
Treasury yields are; 2-year 1.36%, 5-year 1.79%, 10-year 2.19%, 30-year 2.78%.
BOE Governor Carney finishes his dovish speech. Pound 1.2676. Euro/pound 0.8798. FTSE +0.4%. UK gilt 1.00%.
Treasury yields are; 2-year 1.36%, 5-year 1.79%, 10-year 2.18%, 30-year 2.78%.
At 4 AM EST, DAX +0.4%. CAC +0.5%. FTSE +0.5%. Nifty 9659. The pound is at a one-week low at 1.2676 after Carney’s dovish comments.
At 5:30 AM EST (10:30 AM London; 11:30 AM Central Europe), S&P +1. Dow +14. Nasdaq +10. Russell +1. VIX 10.27. India’s Nifty is up 3 points at 9661.
DAX +0.3%. CAC +0.4%. FTSE +0.2%. MIB +0.2%. IBEX flat. PSI +0.2%.
Euro 1.1153. Euro/yen 124.51. Dollar/yen 111.64. Pound 1.2698. Sterling is slowly recovering off the session lows. Euro/pound 0.8784. Mexican peso 18.022. Canadian dollar 1.322. Dollar/yuan 6.8261. Indian rupee 64.46. Aussie dollar 0.7620.
WTIC oil is up +0.2% at 44.29. Brent oil is up +0.2% at 47.02. Natural gas is up +0.2% at 2.90. Gold 1247. Silver 16.55. Copper is down -0.4% to 2.596.
Treasury yields are; 2-year 1.36%, 5-year 1.78%, 10-year 2.18%, 30-year 2.77%. The 2-10 spread is at 82 bips continuing to favor a flattening yield curve. German bund 0.28%. Japan 10-year yield 0.055%. UK gilt 1.01%. France 10-year yield 0.62%.
Fed Vice Chairman Fischer speaks in Amsterdam saying that more must be done in the United States to prevent a future financial crisis. Fischer proclaims that “the core of the financial system is stronger” but ongoing measures such as bank stress tests must continue. Fischer does not directly discuss Fed monetary policy.
At 6 AM EST, markets are steady. S&P +1. Dow +11. VIX 10.29. DAX +0.3%. FTSE +0.1%. Oil turns negative. WTIC 44.12. Will a 43-handle print for West Texas Intermediate Crude oil today? Brent 46.85.
Boom. WTIC oil collapses -1.3% in a heartbeat to 43.60 printing a 43-handle at lows not seen since last Fall. If the global economy is as healthy as pundits proclaim, oil demand should be stronger. The world remains awash in oil and in a disinflationary and deflationary funk. Brent oil dips -1.3% to 46.29. Natty 2.90.
S&P +1. Dow +10. Nasdaq +9. Russell flat. VIX 10.30. The Nifty finishes down 4 points at 9653. The BSE Sensex ends the session marginally lower, call it flat, at 31298. The BSE is at 31.3K remaining at record highs.
Interestingly, the weekly and monthly stock charts for the world indexes making record highs such as the SPX, INDU, COMPQ, DAX and BSE all appear similar. The chart indicators such as RSI, MACD line and stochastics are negatively diverging as price makes new highs. This portends a pull back on the come on the weekly basis. The monthly charts are also negatively diverged across the last few years hinting that a multi-year topping process is likely occurring for global stock indexes.
In the near-term on the monthly chart (the last three or four months) there is some further strength available for sideways or higher price action for stocks but a multi-year top appears likely at anytime in the weeks and months ahead. Judging by the weekly and monthly charts, a pullback may occur in stock for the next one to four weeks, then stocks should recover back to the current highs and higher that may identify a multi-year top for the global stock markets. It may be an eventful October this year, or sooner.
Fed’s Rosengren says, “Low rates pose financial stability concerns.” He says, “Monetary policy is less capable of offsetting negative shocks when rates are already low.” Rosengren is painting a picture for higher rates with hawkish talk.
At 8:20 AM, US futures are negative. S&P -2. Dow -12. Nasdaq +8. Russell -2. VIX 10.48. Europe sinks lower. DAX +0.1%. CAC +0.1%. FTSE -0.1%. MIB -0.4%. IBEX -0.5%. PSI flat.
Euro 1.1155. Euro/yen 124.21. Dollar/yen 111.35. Pound 1.2655. Euro/pound 0.8815. Mexican peso 18.1038. Canadian dollar 1.3277. Dollar/yuan 6.8267. Indian rupee 64.50. Aussie dollar 0.76. USD 97.58. Gold 1247. Silver 16.52. Copper is down -0.8% to 2.5695. Weak copper creates sogginess in the US futures along with volatility inching higher.
WTIC oil is down -2.6% to 43.05 threatening to print a 42-handle. Brent oil is down -2.5% to 45.75. Inside a tent in the Middle East, the sheiks drop the tube connected to the hookah in disbelief. The white-robed oil tycoons fall backwards onto large pillows and ornamental rugs sewn with gold thread. OPEC’s goal of raising oil prices by limiting production is unattainable with the North American oil producers ramping up production as well as oil fields in Nigeria and Libya.
LEN jumps +3.8% on earnings. SFUN is no fun crashing -7.4%. MCD bounces +0.6% on a Cowen upgrade. NVDA continues vertically higher gaining +0.8% on a Pacific Crest upgrade. GT is up +1.5% on a Jefferies upgrade. Increased rubber and tire sales will be an encouraging sign for the economy should it occur. The jury remains out.
Drug maker Parexel is bought out by Pamplona Capital for $5 billion. PRXL jumps +4.1%. ALXN pops +1.666% on news the CEO is buying stock (insider buying).
Bingo. WTIC oil collapses through 43 to a LOD at 42.97. The Middle East sheiks are cursing at their camels. If the OPEC oil production cut program is not working, the Middle East oil producers may begin slitting each other’s throats and abandon the agreement. This would flood the market with oil and send prices into a tailspin. If WTIC oil price begins penetrating 42 it will likely make its way down to 37-38. Lower commodities confirm the ongoing disinflationary and deflationary environment but at least lower fuel costs will benefit the average American.
Tesla is closing in on a deal with China to build an electric vehicle production factory in the communist nation. The Chinese have stolen American technology for the last few decades by allowing US companies to build factories on the mainland. In secret, judging by past deeds, the communists will build an identical factory about 10 miles away from the proposed Tesla factory. The Chinese then acquire all of Tesla’s knowledge in building electric cars. In a few years, Tesla will then be drop-kicked out of the country and all electric car production will revert to Chinese companies. This is how the commies play the global financial and trade game. TSLA drives +1.5% higher in early trading.
Polls are open in the state of Georgia, USA, in the sixth district, for a special election for a House representative. Republican Karen Handel is running against democrat Jon Ossoff. The media is hyping the event as a referendum on President Trump’s first few months in office. Millions of dollars are spent on the election by both the republicans and democrats.
If Ossoff wins, the democrats will proclaim that the country has turned against Trump and the progressives have the upper hand into the mid-term elections November 2018 only 17 months away. If Handel wins, republicans will proclaim that Americans are happy with President Trump and sympathetic to the many roadblocks being thrown in his way (from the republican perspective).
News reports say a Russian military jet flies within a few feet (2 m) of a US spy plane over the Baltics. The Russian jet came in hot (fast) showing a dirty wing (armed with air-to-air missiles) as it rolled by the US airplane. Russia and Syria are unhappy that the US shot down a Syrian jet the other day. Someday somebody is going to make a mistake in the air creating a global catastrophe.
S&P -2. Dow -5. Nasdaq -2. Russell -4. VIX 10.53. LEN is up +2.6% off the initial highs after earnings. Other homebuilders feel love. PHM +1%. DHI +0.7%. CMG fizzles -4.1% lower on news of margin pressures for the taco and burrito king.
Ford announces the end to the Focus model. Ford is moving away from producing smaller cars and more into SUV’s. F -0.2%.
At 9:30 AM EST (2:30 PM London), US stocks begin trading lower. The SPX drops 5 points, -0.2%, to 2448. The INDU is down 21 points at 21505. The COMPQ lsoes 9 points, -0.2%, to 6229. The RUT loses 4 points, -0.3%, to 1415. VIX 10.58.
Euro 1.1149. Euro/yen 124.33. Dollar/yen 111.51. Pound 1.2652. Euro/pound 0.8813. Indian rupee 64.50. USD 97.64.
Treasury yields are; 2-year 1.36%, 5-year 1.79%, 10-year 2.18%, 30-year 2.76%.
WTIC oil collapses -2.8% to 42.95. Brent oil loses -2.6% to 45.67. Libya oil production is at the highest levels in four years.
House Speaker Paul Ryan plans to release tax reform details shortly. PAYX drops -1.8% on a downgrade. MCD rallies +1.2% supporting the Dow Jones Industrials. The car parts suppliers are shaking in their shoes concerned that Amazon is going to branch into their business. Amazon destroys all competition in whatever industry they decide to penetrate. AZO -2.1%. AAP -3.6%. ORLY -3%. BWA -0.9%. F -0.9%. GM -0.3%.
Homebuilders construct gains. XHB +0.4%. LEN +2.3%. Chips are higher the semi’s never seem to go down. SOX +0.5%. NVDA +2.3%. MU +1%. AVGO +0.7%. XLK -0.2%. Retail stocks are smacked which is becoming a regular occurrence. XRT -0.8%. Financials, industrials and basic materials, XLF, XLI and XLB, respectively, are each down -0.3%.
Energy is punched in the face. XLE -1.3%. CVX sinks -1.3%. XOM -0.8%. NBR -3%. SLB -2%. HAL -2%. Telecom stocks are in retreat. T -0.4%. VZ -0.8%.
At 10:13 AM, SPX 2445. INDU 21508. COMPQ 6225. RUT 1411. VIX 10.58. DAX -0.2%. CAC -0.1%. FTSE -0.4%.
Euro 1.1139. Dollar/yen 111.58. Pound 1.2628. Euro/pound 0.8821.
WTIC oil 42.90. Brent oil 45.63. Gold 1242. Silver is down -0.7% to 16.40. Copper drops -1.3% to 2.572.
Treasury yields are; 2-year 1.35%, 5-year 1.78%, 10-year 2.17%, 30-year 2.75%.
The S&P 500 is down 6.66 points to 2447. The Dow Industrials are down 16.66 points to 21512. VIX 10.52.
European indexes end the session lower. Yesterday’s party and joy is long forgotten. The DAX sinks -0.6% to 12815. The CAC is down -0.3% to 5294. The FTSE loses -0.7% to 7473. Italy’s MIB finishes -1% lower to 20810. The IBEX drops -1% to 10746. The PSI finishes down -0.6% to 5298.
Energy is battered. XLE -1.666%. HES -5.5%. RIG -4%. MRO -4.2%. MUR -3%. WTIC oil 42.90. Brent oil 45.69. Gold 1244. Silver 16.42. Copper is down -1.5% to 2.567. Weak copper creates a sick market.
SPX 2444. INDU 21520. COMPQ 6213. RUT 1407. VIX is up +3.666% to 10.70. HOD 10.75. Market bears need a higher VIX if they want to take the stock market lower.
AAPL is down -0.666% to 145.33. FB +0.2%. GOOGL flat. NFLX -0.6%. AMZN +0.4%. Chips turn negative except for the markets favorite flavor NVIDIA. SOX -0.7%. SMH -0.7%. XSD -0.9%. MU -0.3%. NVDA +0.4%.
Fed’s Kaplan is urging caution and care in future rate hikes due to the ongoing low bond yields. Kaplan wants to see verifiable inflation before supporting the next rate hike.
At 1 PM, Speaker Ryan conducts a large press conference discussing tax reform but market participants yawn and are not impressed. Stocks are trending lower during the session. Equities attempt a small bounce on Ryan’s promises but the indexes roll over to the downside and begin taking on a negative tone.
Apple and Qualcomm continue battling each other over patents and intellectual property. They both look like losers. AAPL -0.9%. QCOM -1.4%.
Amazon announces a Prime Wardrobe service that is a shot across the bow at apparel retailers. JCP mini-crashes -5.2%. JWN -4%. ASNA -4.4%. PVH -0.8%. Last Friday, Amazon announced plans to buy Whole Foods which is disrupting the food space. This morning, the auto parts suppliers are running scared. This afternoon, the apparel space is in a tizzy. Amazon CEO King Bezos sits back on his throne and belly laughs at the minions scurrying around at his feet as he decrees the future of American business across the land. AMZN -0.3%. WFM -1%.
A deranged Muslim nutcase is neutralized (shot dead) in Belgium at a Brussels train station after police confront the man carrying a suitcase and wearing an explosive belt. The radical Muslim yells, “Allahu Akbar (God is Great)!” as he detonates the explosives. Police shoot the man during the heinous act. Luckily, the Islamic terrorist did not harm any Westerners as he carried out his mission to kill the infidel. Belgium remains on alert this evening.
Energy stocks sink. XLE -1.3%. CVX -0.9%. XOM -0.5%. XOP -1.2%. USO -1.9%. SLB -2%. MUR -2.2%. MRO -3.4%. CHK -1.6%.
Treasury yields are; 2-year 1.35%, 5-year 1.76%, 10-year 2.16%, 30-year 2.74%. The 2-10 spread is 80.6 bips. The 5-30 yield spread is 98 bips at levels not seen since December 2007. Comically, everybody and his brother are long the bank stocks and the television pundits tout the financial sector every 10 minutes on the business channels, however, the yield curve is flattening and not steepening (banks need a steeper yield curve to generate profits on loans).
Euro 1.1125. Dollar/yen 111.49. Pound 1.2623. Mexican peso 18.1409. Canadian dollar 1.3257. Dollar/yuan 6.829. WTIC 43.23. Brent oil 45.99. Gold 1243. Silver 16.44. Copper 2.577.
Stocks are trending lower all afternoon. The S&P 500 is down 11 points to 2442. The Dow loses 31 points to 21498 under 21.5K. The Nasdaq Composite is down 33 poitns at 6206. The RUT drops 11 points to 1407. VIX 10.55.
AMD +6%. Biotech stocks are joyous. IBB +1.3%. REGN +5%. BIIB +2.1%. ALXN +2.5%. INCY +1.9%. SHPG +1.3%. Market participants like drugs today. MRK +1.3%. PFE +1%. LEN +2.1%. AXP +0.8%.
CMG -7.3%. OKE -5.4%. ROST -4.8%. TSCO -3.6%. DISCA -3.5%. VIAB -3.4%. KLAC -3.4%. IINTC -1.8%. MSFT -1.4%. APA -4.2%. GE is whacked -2.3%. VZ -1.4%. DIS -1.4%.
US stocks end the day in selloff mode collapsing into the closing bell. The SPX sinks 16 points, an ominous -0.666%, to 2437. The 20-day MA support is at 2428. The Dow Industrials finish down 62 points, -0.3%, to 21467. The Nasdaq Composite loses 51 points, -0.8%, to 6188. The Russell 2000 ends the session down 15 points, -1.1%, to 1403 holding on to the 1.4K level. VIX 10.86.
After the bell, ADBE jumps +3% after beating on the top and bottom lines. Shipping giant and economic bellwether FDX rallies +1.6% on earnings. UPS pops +1.3% riding the FedEx coattails. La-Z-Boy jumps off the recliner and into action pushing LZB +11% higher after reporting earnings; this is encouraging for the housing sector. It is hats off to Red Hat after reporting earnings; RHT catapults +10.2% higher.
WTIC oil falls into a bear market down -21% since the February top. A -20% price move lower or more is considered a bear market for a stock or index. A -10% drop is called a correction so oil just slipped from correction territory into bear market territory.
The API Oil Inventories are a 2.7 million barrel draw down more than the 2.1 million barrel draw was expected. Gasoline and Distillate Inventories are builds. WTIC oil is steady at 43.53. The EIA Oil Inventories hit tomorrow morning at 10:30 AM EST.
Interestingly, the amount of oil stored offshore in tanker ships is at the highest level of this year. The world is awash in oil.
The MSCI decides to include Chinese A-share (mainland-traded) stocks in the emerging market index. The fourth time is the charm. The request to include Chinese stocks in the MSCI Index has been refused for three consecutive years until now. The EEM ETF will be more exposed to Chinese stocks. EEM is up +18% this year compared to the S&P 500 Index up +9%. EEM gains +0.2% in late trading. The SSEC is up a paltry +1.2% this year. The PBOC, China’s central bank, maintains the Shanghai Index above the 3K level proving that the central bankers are the market.
In the Georgia state election, the republican Karen Handel wins the contest. The republicans are proud as peacocks saying the election is a referendum on President Trump and Americans are happy with his performance so far. The democrats shrink back to their corner disappointed in the loss. The liberals and progressives had hoped that a democrat win would set up the mid-term elections in their favor but instead the republicans receive bragging rights.
Sunday, June 18, 2017
MONDAY 6/19/17; French Parliamentary Election Aftermath; London Terror Attack; Japan Trade Data; NIKK (Japan) 20K; China Home Prices; Brexit Negotiations Begin; Cascading Global Stock Market Rally; SPX (S&P 500), INDU (Dow Industrials Above 21.5K) and AMZN (Amazon) New All-Time Record Highs; Natural Gas Mini-Crashes -5%; WTIC Oil at 2017 Lows
Euro 1.1197. Euro/yen 124.08. Dollar/yen 110.81. Pound 1.2762. Euro/pound 0.8775. Mexican peso 17.9274. Canadian dollar 1.3213. Dollar/yuan 6.8105. Indian rupee 64.4275. Aussie dollar 0.7621.
US futures are off to a positive start Monday morning in Asia and Sunday evening in the States. S&P +3. Dow +28. Nasdaq +7. Russell +2.
WTIC oil 44.71. Brent oil 47.32. Natural gas is down -2.8% to 2.95. Gold 1254. Silver 16.66. Copper 2.5815. Iron ore trades +1% higher to 55.23.
US Treasury yields are; 2-year 1.32%, 5-year 1.74%, 10-year 2.15%, 30-year 2.78%. The 2-10 spread is 83 bips.
South Korea and China finance ministers meet this weekend with the countries kissing and making up after one year of rough relations. Both countries agree to cooperate more on trade policies which creates market positivity to begin the week.
France President Macron’s En Marche! (Republic on the Move; LREM) Party secures a strong majority in parliament as expected. France’s CAC may trade happily today as Macron receives a mandate to forge ahead with his policies. How supportive and how much time will the young 39-year old leader be given to improve the nation’s economy?
The French unions are well known for street demonstrations against the government that may test Macron and stall the economy. The turnout for the France legislative election is the lowest in history at only 42.6% not exactly a ringing endorsement that citizens are supporting all of President Macron’s ideas. The 356 seats for the LREM Party are not as large as was expected. Many French remain disgusted and turned-off by politics and the never-ending baby games.
Asia and Aussie indexes begin the session on the positive side. Computer screens are lighting up green to start the new trading week. The NIKK, ASX 200 and KOSPI are each trading up more than +0.4% and climbing higher.
After midnight in North London, a deranged nutcase in a white van runs over Muslims leaving a mosque. Recent terrorist attacks are carried out by radical Muslims using vehicles to kill infidels so the event is a surprising twist in the ongoing global saga. The incident shows that there are deranged nutcases on all sides of the terrorism issue.
One person is dead and 10 injured in the London attack. British authorities say the incident is a potential terror attack. Mayor Sadiq Khan, a Muslim, runs to a microphone and proclaims the event as a “horrific terrorist attack.” After the many terrorist attacks targeting Westerners, Khan is typically telling everyone to remain calm and not judge the situation too quickly but not this time. Terrorism becomes commonplace in London and the UK.
The 48-year old driver of the van is arrested by London police and taken away for a mental evaluation. A witness says the man was screaming, “I’m going to kill all Muslims.” UK PM May calls an emergency meeting to address the incident. London police believe the man acted alone although the situation is ongoing and developing. Police are urging for calm in a city that is plagued with increased terrorism.
China May home prices are up +10.4% less than the +10.7% expected. Home values gain in 56 of 70 cities versus 58 cities the prior month. Prices fell in 9 cities and are unchanged in 5 cities. The home-price growth in China is subsiding slightly and next month’s data takes on added importance.
Japan trade data is released reporting a trade deficit instead of a surplus expected. Japan Exports are up +14.9% missing the +16.1% expected. The dollar/yen pair moves from 110.88 up through 111.00 reflecting a weaker yen that pumps Japanese stocks higher.
As announced last week, Takata is expected to declare bankruptcy this week which is the largest corporate collapse in Japan since WW II. 11 people died from the defective airbags.
USD 97.14. Euro 1.12. Pound 1.2781. Aussie dollar 0.7613. Oil trades down -0.4%. WTIC oil 44.55. Brent oil 47.20.
Tech stocks are running higher after last week’s selloff. The stock markets refuse to sell off since the global central bankers keep providing easy money stimulus. In South Korea, Samsung Electronics launches +2.2% and SK Hynix jumps +4% higher. Nomura upgrades the chip maker.
In Singapore, Noble Group catapults +12% higher after an agreement is reached with creditors to extend repayment deadlines for the troubled commodities logistics company. Aussie and Asia indexes are a sea of green as a cascading global stock market rally begins. European index futures point to a +0.8% gain for the DAX, CAC and FTSE.
India trading is off to a positive start with the Nifty up 34 points, +0.4%, to 9622. The BSE Sensex gains 134 points, +0.4%, to 31192.
US futures are joyous joining the upside party around the world. S&P +7. Dow +53. Nasdaq +29.
The NIKK finishes up +0.6% to 20068 above the 20K level. The SPASX200 finsihes up +0.5% at 5805. The KOSPI gains +0.4% to 2371. The SSEC gains +0.7% to 3145. The HSI ends up +1.2% to 25925.
The Portugal wild fires continue with over 60 people dead trapped in cars by the flames. The search continues for more bodies. A three-day mourning period is ongoing in Portugal to honor the dead. The Iberian Peninsula is burning.
Euro 1.1204. Dollar/yen 111.07. Pound 1.2779. Aussie dollar 0.7611. Dollar/yuan 6.8136.
WTIC oil 44.56. Brent 47.71. Natty 2.96. Gold is off 2 bucks to 1252. Silver 16.61. Copper is up +0.3% to 2.5855.
Treasury yields are; 2-year 1.32%, 5-year 1.75%, 10-year 2.16%, 30-year 2.78%.
At 3 AM (8 AM London; 9 AM Frankfurt), European indexes launch higher at the opening bell. DAX +0.9%. CAC +1%. The CAC runs higher after the French legislative elections yesterday. FTSE +0.8%. SMI +0.7%. OMX +0.8%.
Most European stocks are higher across the board. Banco Santander +1.4. HSBC +0.666%. BNP Paribas +1.2%. %. CS +3.4%. DB, MS and C upgrade CS so the banks will spend the next few weeks upgrading each other to try and jump start a new rally in financials. This is how the game is played.
Novartis +0.7%. Royal Philips +4.1%. Total +0.9%. The gains are broad-based with banks, pharma, energy and telecom stocks leading higher. Danone is up +1.4% on takeover chatter. Ocado launches +7% higher.
UK and European Union officials are meeting to begin the Brexit negotiation process. Humorously, they will conduct negotiations today to determine how the negotiations will proceed. Rightmove reports that London home prices are dropping. In some communities, prices are falling to levels not seen since 2013.
London officials report that 79 people died in the horrific Glenfell Tower fire last week. PM May is bombarded and overwhelmed with political drama. More world travelers are canceling plans to visit London as the city appears to be spiraling out of control.
The Paris Airshow is underway this week so Boeing and Aibus will receive large orders for airplanes which typically create joy in the airline sector.
Euro 1.1201. Euro/yen 124.50. Dollar/yen 111.13. Pound 1.2788. Euro/pound 0.8760. Mexican peso 17.9111. Canadian dollar 1.3236. Dollar/yuan 6.8146. Indian rupee 64.3963. Aussie dollar 0.7615.
S&P +8. Dow +70. Nasdaq +34. Russell +5. VIX 10.59.
Moody’s downgrades the four large Australian investment banks Commonwealth Bank, Westpac, NAB (National Australian Bank) and ANZ Banking Group, from Aa3 to Aa2. Eight other smaller Aussie banks are downgraded. The news may weigh on Aussie trading tomorrow.
At 3:25 AM EST (8:25 AM London), London police conduct a news conference on the van attack against Muslims leaving the mosque. Officials say the event is being treated as a terrorist attack and no other suspects have been identified or reported to the police. Extra police are deployed around London. PM May is currently chairing an emergency meeting addressing the attack.
Several Muslims at the scene of the attack say the van had other people inside that ran away. However, authorities find no proof of these statements and the city is under camera surveillance which does not support the claims that others were in the van.
European stock indexes and US futures remain steady and positive as a global cascading rally makes one loop around the world from Asia to Europe to the US. DAX +1%. CAC +1%. FTSE +0.666%. MIB +0.4%. IBEX +0.7%. PSI +0.4%.
S&P +7. Dow +75. Nasdaq +33. Russell +3. VIX 10.59. The Nifty is up 40 points, +0.4%, to 9627.
Euro 1.1193. uro/yen 124.38. Dollar/yen 111.12. Pound 1.2794. Euro/pound 0.8749. Mexican peso 17.952. Canadian peso 1.3249. Dollar/yuan 6.8175. Indian rupee 64.39. Aussie dollar 0.7593. USD 97.24. The US dollar index moves sideways through 97.1-97.5 since Thursday. Dollar bulls win above 97.5 while dollar bears win under 97.1.
Treasury yields are; 2-year 1.32%, 5-year 1.74%, 10-year 2.15%, 30-year 2.78%.
At 6 AM, S&P +7. Dow +70. Nasdaq +36. Russell +3. VIX 10.56. Oil and copper move higher supporting the upside move in stocks and futures. WTIC oil gains +0.5% to 44.94. Brent 47.61. Natty 2.95. Gold 1251. Silver 16.64. Copper is up +0.9% to 2.601. The Nifty finishes the day up 70 points, +0.7%, to 9658 continuing the global stock market rally around the world.
VRX bounces +6% in the pre-market a minor rally after a -95% crash over the last two years. Valeant was over 200 and now prints under 13. Activist investor John Paulson joins the board of directors. Pharma and bank stocks are off to a strong start this week.
It is a Merger Monday with EQT buying Rice Energy. RICE catapults 25% higher on the takeover news while EQT sinks -9%. BA rallies +1.5% after unveiling a new 737 MAX 10 airplane at the Paris Airshow.
The aftermath of the Amazon and Whole Foods buyout continues in the food space. KR trades +0.3% higher despite a downgrade from MS. COST is down -1.8% on a DB downgrade.
Clovis reports success with its ovarian cancer drug. CLS jumps +52% as takeover chatter immediately begins. Rival TSRO drops -11%. VRX +3%.
S&P +8. Dow +73. Nasdaq +42. Russell +4. VIX 10.50. DAX +0.8%. CAC +0.9%. FTSE +0.5%. MIB +0.1%. European Stoxx 600 Index +0.666%.
Federal Reserve members are out in force this week jawboning their economic forecasts. At least nine Fed appearances and talks are on tap this week. Dudley kicks off the parade this week and Evans is on tap this evening. Fed Vice Chairman Fischer speaks overnight tonight in Amsterdam. Three Fed speakers will pontificate on Friday.
Fed’s Dudley is speaking in Pittsburgh, Pennsylvania, USA. He says, “Inflation is a little lower than the Fed wants.” Dudley says the economy is “growing reasonably well.” Dudley expects wage inflation to increase (which will send overall inflation higher).
The 10-year yield jumps from 2.13% to 2.17% so Dudley’s words are viewed as hawkish. Dudley and Chair Yellen treat the lack of inflation as a transitory condition and expect inflation to ramp up again in the very near future.
Treasury yields are; 2-year 1.33%, 5-year 1.77%, 10-year 2.18%, 30-year 2.79%. The 2-10 spread is at 85 bips.
S&P +7. Dow +71. Nasdaq +47. Russell +2. VIX 10.53. WTIC 44.83. Brent 47.52. Natty 2.90. Gold 1249. Silver 16.58. Copper 2.60.
At 8:46 AM EST, S&P +8. Dow +75. Nasdaq +47. Russell +3. VIX 10.46. Futures rise as volatility slips lower. DAX +1%. CAC +1%. FTSE +0.6%.
Treasury yields are; 2-year 1.34%, 5-year 1.76%, 10-year 2.17%, 30-year 2.78%. The 2-10 spread is at 85 bips.
At 9:30 AM EST (2:30 PM London), US stocks gap higher. The cascading global stock market rally is in full swing looping around the world. The SPX is up 10 points, +0.4%, to 2443. The Dow gains 54 points, +0.3%, to 21438.17. The HOD is 21457.19 in the opening minutes a new all-time record high for the Dirty Thirty. The COMPQ gains 43 points, +0.7%, to 6195. Traders are buying tech stocks after last week’s drubbing. The RUT gains 6 points, +0.5%, to 1413. Small caps feel love.
VIX 10.49. Market bulls cheer the low volatility. Every day is another day of easy stock market gains with the central bankers maintaining their jack boots on the throat of volatility.
BA gains 0.4% and Airbus is up +2.1% on the Paris Airshow chatter. GE -0.1%. NKE is up +1.2% enjoying all the weekend publicity as the golfers that Nike sponsors win and place in the prestigious US Open golf championship. The Nike swish logo was plastered on television screens all weekend.
Tech and semiconductors are rallying creating joy in the stock market. XLK +1.1%. AAPL +1.9%. FB +1.6%. NFLX +1.1%. GOOGL +1.8%. SOX +1.666%. MU +3.2%. NVDA +2.8%.
WFM rallies +1.6% and AMZN +1.2% after last week’s deal. Amazon prints a new record high at 1017.00. Every day is fun and euphoric joy in the stock market.
The SPX HOD is 2445.78 only 42 pennies away from the all-time record high at 2446.20 on 6/9/17.
At 10 AM, SPX 2446. INDU 21470. COMPQ 6214. RUT 1414. VIX 10.26. Volume is light in the S&P 500 and Dow indexes but above average in the Nasdaq indexes. Tech and banks are driving stocks higher. XLF +0.8%. KRE +0.7%. BAC +1.6%. JPM +1.666%. Pharma and biotech stocks are rallying. PPH +0.7%. IBB +1.1%. CELG +1%. CLVS +43%. TSRO -4%.
WTIC oil 44.94. Brent 47.66. Gold is down 6 dollars to 1248. Silver loses -0.8% to 16.53. Copper is up +0.9% to 2.603.
Stocks thrust higher as the SPX prints a new all-time record high at 2450.24 at 10:06 AM EST. Once the S&P 500 price hit the prior high at 2446.20 the machine buy programs shot price 4 points higher in a heartbeat. The SPX and INDU print record highs today.
During last week, the stock market bottomed each day between 10:30 AM and 11:00 AM. Many algorithms separate the trading day into six 65-minute segments. The first segment is 9:30 AM to 10:35 AM. The second segment is 10:35 AM to 11:40 AM so the machines keep buying late in the first segment and early in the second segment to ride US stocks higher that tend to rally through the European close (into the third segment). The buying occurs earlier than expected today. Equities gapped higher at the opening bell and have not looked back.
The SPX is up +0.666% to 2449. INDU 21490. COMPQ 6222. RUT 1414. VIX 10.10. Market bears have no hope with volatility remaining low. Market bulls are unstoppable celebrating each day of never-ending central banker easy money and politicians promising the world and nothing but blue skies ahead.
European indexes end the session in rally mode. The DAX finishes up +1.1% to 12889 with a HOD at 12913 teasing the record high only a few points away. Global stock market indexes continue printing record highs. France’s CAC gains +0.9% to 5311 providing a positive nod for President Macron and his parliamentary election win.
London’s FTSE ends the session up +0.8% to 7524. Investors are not rattled by terrorism anymore; it has become commonplace. Italy’s MIB gains +0.4% to 21014. The IBEX gains +0.8% to 10849. The PSI is up +1.1% to 5331 as traders ignore the ongoing Portugal wild fire tragedy and instead buy stocks with both hands.
USD 97.44. Euro 1.1158. Dollar/yen 111.42. Pound 1.2738.
Silicon Valley and other CEO’s descend on the Whitehouse for a tech outreach meeting with President Trump. Cybersecurity, trade and jobs are topics of discussion. CEO’s from AAPL (Cook), AMZN (Bezos), MSFT (Nadella), GOOGL, ORCL, INTC, IBM (Rometty), QCOM, and ADBE plan to attend.
SPX 2451. INDU 21501. The Dow is over 21.5K another milestone falls by the wayside. COMPQ 6230. RUT 1419. VIX 10.23. AAPL is up a big +2.6% which pumps the major indexes strongly higher. A select few stocks continue to jerk the overall stock market around to and fro.
Floor traders are drinking and partying like its 1999 toasting glasses with each new record high. The SPX prints a new all-time record high at 2452.25 at 1:10 PM EST. Market commentators and pundits on the business channels keep screaming, “Buy! Buy! Buy!” Nearly every talking head is advising clients and investors to buy tech and bank stocks. Money managers say the slump last week in equities was a great buying opportunity. The future is so bright that you have to wear shades.
A US F-18 Super Hornet military jet shoots down a Syrian SU-22 fighter bomber over Syria. Russia says that US military jets will be targeted as enemy planes if they fly west of the Euphrates. The Middle East tension increases.
WTIC oil 44.42. Brent oil 47.10. Natty 2.91. Gold 1248. Silver 16.52. Copper 2.59.
Treasury yields are; 2-year 1.36%, 5-year 1.79%, 10-year 2.18%, 30-year 2.79%. The yield curve continues to favor flattening rather than steepening but investors keep buying banks with both hands anyway. The 2-10 spread is 82 bips.
The biotech sector explodes higher. IBB gains +2.666% to 300.54 at highs from March and last November. The IBB weekly chart is forming an ascending triangle pattern which would target 340-360 if IBB breaks solidly above the 300 level.
After 2 PM EST, oil begins slip-sliding away to the downside. Analyst reports say oil demand in Asia is decreasing while production is ramping higher in Libya and Nigeria. WTIC oil tumbles -1.3% to 44.17 a new low for this year and at levels not seen since November. Brent oil is down -1% to 46.88. Natty gas is crashing -5% at 2.89. USO drops -1%. XOM -0.9%. CVX -0.8%. NBR +2.3%. NOV -0.7%. XOP is flat. RRC -3.3%. COG -1.6%. CHK -0.9%. XLE -0.6%.
SPX 2450. INDU 21505. COMPQ 6230. RUT 1415. VIX 10.40. Financials are strong. XLF +1%.
Five key Dow winners send the Dirty Thirty index to new record highs. AAPL +2.9%. JPM +2.2%. GS +1.9%. NKE +1.8%. HD +1.4%. There are losers in the Dow despite the big rally. TRV -0.9%. XOM -0.9%. CVX -0.8%. GE -0.7%. IBM -0.3%.
CLVS +47%. MNK +4.7%. MU +4.5%. AMD +4.3%. NTES +5.4%. JD +4.1%. NVDA +3.8%. INCY +3.6%. EMN +3.6%. SNE +3.5%. EW +3.3%.
EQT -9%. RRC -5.1%. TRIP -4.8%. COG -2.3%. COST -1.7%. MAT -1.4%. TGT -1.7%. BHI -1.3%. LVLT -0.9%. XOM -0.9%.
US stocks end the day in happy rally mode. The SPX gains 20 big points, +0.8%, to 2453.46 a new all-time record closing high and 2453.82 a new all-time high. Stocks are melting-up. The bulls are unstoppable. Floor traders cheer the Power and Glory of the Federal Reserve and other central bankers. They are the modern-day money Gods bestowing riches and wealth on the elite privileged class in society.
The Dow Industrials gain 145 points, +0.7%, to 21528.99 a new all-time record closing high and 21528.99 a new all-time high. Traders are singing, “Happy Days Are Here Again!” TRAN is up +0.666% to 9477 only 162 points from the record high that would confirm the stock market rally from a Dow Theory perspective.
The COMPQ finishes up 87 points, +1.4%, a big gain, to 6239. The NDX rocket launches +1.6% so traders are obviously rushing into the high-flying tech stocks after last week’s selloff. AAPL +2.8%. The RUT gains 11 points, +0.8%, to 1418. VIX 10.37.
After the bell, CMG sinks -2% after pre-announcing higher costs than expected. PLCE is down -1% on news of expanding Children’s Place stores into Asia. CTL drops -1% on news of fraud allegations from a former employee.
President Trump is late to the meeting with tech executives due to news that Otto Warmbier has died. North Korea had imprisoned Warmbier for a few years due to the student tearing down a propaganda poster and just returned him in a comatose state to the United States last week. Warmbier had brain damage likely due to asphyxiation from the sick communist bastards (physical abuse).
North Korea returned the young man because they knew he was a vegetable and likely about to die and did not want this to occur on their soil. President Trump says, “It (North Korea) is a brutal regime” and “we will handle it.”