Thursday, January 19, 2017

FRIDAY 1/20/17; GE; KSU; RF; SLB; STI; SYF; OpEx; Donald J Trump Inaugurated as the 45th President of the United States

President-elect Trump becomes President Trump and President Obama retires at 12 noon EST today (5 PM London and GMT; 6 PM Frankfurt, Paris and Davos; 2 AM Tokyo Saturday morning). Festivities continue from last evening through the morning into the festivities mid-day. America has a new orange-headed leader.

Euro 1.0658. Dollar/yen 114.98. Pound 1.2355. WTIC oil 51.41. Brent oil 54.18. Natural gas 3.30. Gold 1204. Silver 17.03. Copper 2.61.

Treasury yields are; 2-yar 1.225%, 5-year 1.96%, 10-year 2.47%, 30-year 3.045%.

Global 10-year yields are; Brazil 10.96%, Mexico 7.66%, Greece 6.93%, India 6.47%, Portugal 3.83%, Australia 2.80%, US 2.47%, Singapore 2.35%, South Korea 2.15%, Italy 1.97%, Canada 1.76%, Hong Kong 1.65%, Spain 1.46%, UK 1.40%, France 0.85%, Netherlands 0.48%, Germany 0.38%, Japan 0.07%, Switzerland -0.15%.

At 10 AM Tokyo time (1 AM London; 2 AM Frankfurt; 8 PM EST Thursday evening), Fed Chair Yellen is speaking in Stanford, California, repeating her talk from the prior day and planning to take Q&A. Australia and Asia trading is underway.

The NIKK is..

Asia and Aussie markets begin trading

The NIKK ends the session

For the week,

European indexes begin trading

GE…. earnings ……KSU, RF, SLB, STI, SYF

Fed’s Harker says

Today is OpEx so trading volume may be more robust at the opening and closing bells.

At 9:30 AM EST, US stocks begin trading

European stocks end the day

The DAX

For the week,

The pomp and circumstance into President-elect Trump’s swearing-in ceremony continues. At noon, Donald J Trump places one hand on the Bible and raises the other taking the oath of office as the 45th President of the United States. A new story in America’s history begins.

At 1 PM, the BHI Oil Rig Count is

Fed’s Williams says

US stocks end the day

The SPX

For the week,


After the closing bell,

Wednesday, January 18, 2017

THURSDAY 1/19/17; Mexican Peso Weakens Past 22; ECB Rate Decision and President Draghi Press Conference; BK; BBT; KEY; MTB; JBHT; PPG; UNP; Housing Starts; Philly Fed Survey; NDX (Nasdaq 100) New All-Time Record High; AXP; IBM; SWKS; Fed Chair Yellen Speaks

Korean courts deny the request for an arrest warrant for Samsung executive Jay Lee. The decision will allow Lee to remain free as the bribery investigation continues determining his involvement in nefarious activities with President Park Geun-hye. The stocks in the Samsung group of companies may rally today on the news.

Netflix reports a positive earnings beat and strong streaming numbers after the US closing bell. NFLX jumps +8% and should help create a positive mood in the Thursday trade.

Australia’s ASX 200 begins the session trading down -0.2%. WTIC oil 51.39. Brent oil 54.26. Natural gas 3.32. Gold 1203. Silver 17.08. Copper 2.615.

Euro 1.0631. Euro/yen 121.79. Dollar/yen 114.56. Pound 1.2263. Euro/pound 0.8670. The Mexican peso is 21.9571 with the peso on the verge of weakening to a 22-handle. Canadian dollar 1.3267. Dollar/yuan 6.8496. Aussie dollar 0.7511. USD 101.30. The US dollar index bounced from 100.80 to 101.30 after Fed Chair Yellen’s talk in the States in the late afternoon.

The Federal Reserve is on track to provide three rate hikes this year. The Fed has set a long-run neutral rate at 3% which may be a touch higher than many analysts had thought and creates selling in the short end notes and bonds yesterday afternoon. Yellen remains dovish despite the improvements in economic data and the Fed near-achieving their dual mandate of low inflation and low unemployment. The US dollar index spiked higher to 101.30 on Yellen’s comments but moves sideways through 101.20-101.30 for the last eight hours.

Treasury yields are; 2-year 1.22%, 5-year 1.94%, 10-year 2.43%, 30-year 3.01%. German bund 0.356%. Japan 10-year yield 0.054%. UK gilt 1.34%. France 10-year yield 0.83%.

Asia and Aussie markets are trading generally flat to higher. The NIKK is up +1.2%. The dollar/yen pair moves higher reflecting the stronger US dollar and weaker yen that sends Japanese stocks higher. Topix +1.1%. ASX 200 +0.2%. KOSPI flat. Taiex -0.2%. Straits Times +0.1%. Malaysia’s KLCI Index is printing 1666. Interestingly, there are a lot of asset classes printing ‘666’ number sequences over the last couple weeks.

Chinese stocks are negative leading the downside in the Pacific theater. The Shanghai Index is down -0.3% and the Hang Seng Index slips -0.4%.

Toshiba collapses -16% on news that the writedown of the US Westinghouse nuclear units will be larger than expected in the $6 billion range. In addition, investors are not happy that Toshiba is selling off its strong semiconductor units. Gold miners are slapped in Australia. Newcrest -2.6%. Woodside Petro -0.8%. Bega Cheese is up a tasty +13%. Biotech company CSL leaps over +10% higher. Korean online game developer NCsoft jumps +6.1% on success and popularity with its Lineage Revolution video game.

Deutsche Bank plans additional layoffs at the bank after lowering bonus pay for executives. DB has directed managers to identify the bottom 20% of performers at the bank which would be potentially axed. Companies usually assemble ‘layoff lists’ when they sense that an economic recession is on the come.

S&P +1. Dow +5. Nasdaq +2. Euro 1.0628. Dollar/yen 114.76. Pound 1.2258. Aussie dollar 0.75. Dollar/yuan 6.8496. The Mexican peso weakens past 22.

WTIC 51.49. Brent 54.39. Natural gas 3.32. Gold 1204. Silver 17.10. Copper 2.6145.

Treasury yields are; 2-year 1.21%, 5-year 1.93%, 10-year 2.42%, 30-year 3.00%.

Asia trading finishes positive sans the Chinese stocks. The NIKK ends the session up +0.9% to 19072. The SPASX200 is up +0.2% to 5692. The KOSPI is up +0.1% to 2073. The SSEC loses -0.4% to 3102. The HSI finishes down -0.2% to 23050. In India, the Nifty continues trading up +0.2% to 8429.

US futures are flat. European index futures point to a gain of from +0.1% to +0.2% for the major indexes. The USD moved higher after Yellen’s comments which correspondingly sunk the euro and creates lift in European futures. Of course the ECB policy meeting, rate decision and President Draghi press conference will move the euro, US dollar and stocks in a few hours.

Euro 1.0637. Dollar/yen 114.82. Pound 1.2261. Aussie dollar 0.7525. Dollar/yuan 6.8742. WTIC 51.44. Brent 54.36. Natty 3.34. Gold is fighting to hold the 1200 level. Silver is smacked -2% lower losing the 17 level to 16.92. Copper is up marginally at 2.62.

Treasury yields are; 2-year 1.22%, 5-year 1.94%, 10-year 2.43%, 30-year 3.01%.

At 3 AM EST (8 AM London; 9 AM Frankfurt and Davos; 5 PM Tokyo), European indexes begin trading with the DAX and CAC each up +0.2% but the FTSE down marginally at 7244. The banks lead the upside. Goldman Sachs says 50% of its UK workforce may be relocated to continental Europe.

Dutch international retailer Ahold jumps +3.1%. Mining stocks such as Anglo American sink lower. Total, Rio Tinto and AstraZeneca are a drag on the broad market. Safran jumps +2.6% and Zodiac Aerospace soars +21.4% higher on a takeover deal. Airbus gains +1.5%.

S&P -1. Dow -3. Nasdaq -3. Russell -1. VIX 12.48. DAX +0.1%. CAC +0.2%. FTSE -0.1%. WTIC 51.74. Brent 54.67. Gold 1201. Silver 16.96. Copper 2.62.

Euro 1.0649. Euro/yen 122.24. Dollar/yen 114.81. Pound 1.2301. Euro/pound 0.8657. Mexican peso 21.9386. Canadian dollar 1.3278. Dollar/yuan 6.8777. Aussie dollar 0.7536.

Treasury yields are; 2-year 1.22%, 5-year 1.93%, 10-year 2.43%, 30-year 3.01%.

At 4:07 AM EST, S&P -2. Dow -15. Nasdaq -4. Russell -2. VIX 12.57. DAX -0.1%. The banks are supporting European stock indexes. DB gains +0.3%. CAC -0.2%. FTSE -0.5%. MIB -0.4%. Spain’s IBEX is sinking -0.3%. Portugal’s PSI is down -0.666%.

Euro 1.0666. Dollar/yen 114.62. Pound 1.2319. Dollar/yuan 6.8674. Aussie dollar 0.7543. The US dollar index is slipping away from the overnight 101.20-101.30 range. USD 101.15.

WTIC oil 51.59. Brent oil 54.46. Natty 3.33. Gold 1203. Silver 16.98. Copper 2.62.

Treasury yields are; 2-year 1.21%, 5-year 1.93%, 10-year 2.43%, 30-year 3.01%.

At 4:18 AM EST (10:18 AM Davos, Switzerland), UK PM May speaks at the World Economic Forum. May says free trade, partnership and globalization between world nations have helped society. Many citizens, however, that have not benefited from globalization are pushing back. May says Brexit is a vote is to build a “global Britain.” May kisses Europe’s butt in the speech since there are difficult negotiations ahead with the European Union.

May says, “The UK must accept the road ahead will be uncertain.” She says, “The Brexit talks will be tough.” Pound 1.2327. May says, “Brexit is not an attempt to undermine the EU.” May repeats many of her themes from yesterday’s talk. “Brexit was a vote for parliamentary sovereignty.” May says trade deal discussions are underway with nations around the world. May wants to take a leading role in defending the free market. She is kissing India’s butt in her speech so obviously the UK wants to greatly expand trade with this Asian nation. Pound 1.2318. Euro/pound 0.8655. The FTSE is trading down -0.4% at 7217.

S&P -4. Dow -28. Nasdaq -11. Russell -3. VIX 12.75. WTIC 51.40. Brent 54.28.

Treasury yields are; 2-year 1.22%, 5-year 1.94%, 10-year 2.43%, 30-year 3.01%.

Euro 1.0660. Dollar/yen 114.70. Pound 1.2327.USD 101.13. Mexican peso 22.0147. USD 101.08.

At 7:37 AM EST minutes before the ECB decision, S&P -2. Dow -20. Nasdaq -3. Russell -2. VIX 12.41. WTIC 51.64. Brent 54.51. Gold 1204. Euro 1.0666. Euro/yen 122.26. Dollar/yen 114.66. Pound 1.2330. Euro/pound 0.8647. Mexican peso 22.0268. Canadian dollar 1.3271. Aussie dollar 0.7554.

DAX -0.1%. CAC -0.1%. FTSE -0.5%. MIB -0.1%.

Treasury yields are; 2-year 1.23%, 5-year 1.94%, 10-year 2.44%, 30-year 3.02%.

At 7:45 AM EST (12:45 PM London; 1:45 PM Frankfurt), the ECB decides to leave the rates unchanged. The main refinancing rate is at 0%, the deposit facility rate remains at -0.4% and the marginal lending rate is at 0.25%. The European Central Bank is maintaining the current QE bond-buying program through the end of the year. Bond purchases will continue at $80 billion per month through March but then drop to $60 billion per month from April through December. The decision is exactly in line with expectations. Euro 1.0662. President Draghi speaks at the press conference in 45 minutes.

Markets are unresponsive to the ECB announcement. DAX -0.1%. CAC -0.1%. FTSE -0.6%. S&P -2. Dow -16. Nasdaq -3. Russell -2. VIX 12.39. WTIC 51.61. Brent 54.47. Gold 1203. Silver 16.99. Copper 2.6065.

Euro 1.0664. Euro/yen 122.24. Dollar/yen 114.63. Pound 1.2331. Euro/pound 0.8648. The Mexican peso pair moves below 22 to 21.9742 reflecting a strengthening peso. Canadian dollar 1.3271. Dollar/yuan 6.8648. Indian rupee 68.1288. Aussie dollar 0.7556.

The northwest United States is hit with severe ice storms. Roadways in Washington and Oregon are closed. Business and commerce will be hampered in those states over the coming days.

NFLX is up +8% in pre-market trading after lat evening’s earnings release. KMI -2.4%. CHKP rallies +5% on earnings.

Bank earnings are on tap this morning resulting in the following moves. BK -3%. BBT -1.5%. KEY gains +0.4%. MTB +1.2%. Trucker JBHT drops -1.5% after missing on EPS but beating on the top line. PPG gains +0.3%.

Railroads are active. UNP rides the rails +4% higher after reporting earnings. CSX launches +16% on news that the Canadian Pacific Railway CEO Hunter Harrison may join CSX.

KO is knocked down -0.7% on a WFC downgrade. XOM drops -0.4% on a UBS downgrade. TSLA rides +4% higher n a MS upgrade and interest from Panasonic to expand their partnership with Tesla. AAPL is down -0.2% on news that making inroads into India are more difficult than thought.

COST is up +0.4% after Goldman Sachs adds Costco to the conviction buy list but RH sinks -0.6% after Restoration Hardware is removed from the list. HPQ is up +1.5% on a UBS upgrade. NKE is up +0.2% and LULU +03% despite a downgrade of the athletic apparel sector although Under Armour remains a buy. UAA +0.5%.

At 8:30 AM (2:30 PM Frankfurt), Housing Starts explode over +11% higher to 1.23 million units beating the 1.20 million expected and above the prior revised-higher 1.10 million units. The gains are in  multi-family units such as apartments while single-family home starts drop. A lack of inventory of new homes will continue. Permits are at 1.21 million missing the 1.23 million expected and in line with the prior 1.21 million.

Jobless Claims are down 15K to 234K far below the 255K expected. The four-week moving average is at 247K.

The Philadelphia Fed Business Outlook Survey is 23.6 much better than the 16.0 expected and prior revised-lower 19.7. Factory activity accelerates which is encouraging for the economy.

European Central Bank President Draghi walks onto the stage and begins the press conference. Euro 1.0666. Dollar/yen 114.70. Pound 1.2319. Draghi reads the statement that leaves the rates unchanged. Draghi repeats the current QE buying program through this year and stresses “beyond if necessary.” Draghi stretches his dovish wings.

Draghi continues flapping his dovish wings saying, “We stand ready to increase the asset purchases in size or duration.” The euro trails lower and the US dollar index moves higher. Euro 106.42. USD 101.30. Euro/yen 122.37. Dollar/yen 114.98. Pound 1.2302. Euro/pound 0.8648. Mexican peso 21.9932. Canadian dollar 1.3307. Dollar/yuan 6.8650. Aussie dollar 0.7543.

S&P -1. Dow -10. Nasdaq -1. Russell -1. VIX 12.35. Gold 1202.

Draghi says, “Inflation is likely to pick up in the short term but rise more gradually over the longer term.” He says, “The risks to the economic outlook remain on the downside.” Euro drops to 1.0611. Dollar/yen 114.93. The pound is under the 1.23 level to 1.2297.

Draghi begins the Q&A at 8:43 AM EST (2:43 PM Frankfurt). DAX +0.2%. CAC +0.2%. Euro 1.0604. The weaker euro sends European stocks higher. Dollar/yen 115.00. Pound 1.229. Euro/pound 0.8631. The FTSE is down -0.4% to 7222. The European Banking Index gains +0.8%.

Treasury yields are; 2-year 1.24%, 5-year 1.96%, 10-year 2.45%, 30-year 3.01%. 10-year yields are; US 2.45%, Italy 1.97%, UK 1.38%, France 0.85%, Germany 0.37%, Japan 0.07%.

WTIC oil 51.56. Brent oil 54.38. Natty 3.28. Gold 1201. Silver collapses -2.4% to 16.86. Copper 2.611.

At 8:50 AM, the euro recovers to 1.0639 and rising. Draghi says the December decision to extend the QE program was a “unanimous decision.” European Banking Index +0.4%. Draghi says, “Nominal wage growth remains subdued.” DAX and CAC are up +0.1%. FTSE -0.4%.

US futures remain flat not responding to Draghi’s comments or the moves in the euro and US dollar. Euro 1.0630. Dollar/yen 114.85. Pound 1.2308.

Draghi proclaims, “The risk of deflation has largely disappeared.” These words may come back to haunt Super Mario. The euro sinks to 1.0613. The euro is trading erratically traders are having difficulty assessing the ongoing ECB press conference.

At 9:03 AM, S&P -1. Dow -2. Nasdaq -1. Stocks and bonds are steady. Currencies are erratic. Euro 1.0608. Euro/yen 121.95. Dollar/yen 114.95. Pound 1.2296. Euro/pound 0.8629. Mexican peso 21.9666. Canadian dollar 1.3278. Dollar/yuan 6.8685. The ECB press conference ends at 9:18 AM EST (2:18 PM London; 3:18 PM Frankfurt).

Treasury yields are; 2-year 1.25%, 5-year 1.98%, 10-year 2.47%, 30-year 3.04%.

At 9:30 AM EST, US stocks begin trading flat to marginally higher. SPX 2274. INDU 19822. COMPQ 5563. DAX +0.1%. CAC +0.1%. FTSE -0.4%.

European Banking Index +1.1%. Commerzbank +4.3%. DB +1.8%. UBS +1.9%. XLF +0.3%. KRE +0.4%. BK -3.2%. BBT -1.6%. MTB +1.3%. JPM +0.7%. C +0.2%. BAC +0.6%. WFC +0.1%.

NFLX jumps +7.5% higher. CSX leaps +17% higher. CNI +0.6%. UNP +4.6%. COST -0.1%. JBHT -1.2%. RH -2.1%. The bread is rising at Panera. PNRA +1.1%. DLTR -0.5%. GRPN +0.6%. Steel company AKS is punished -5.6%. XOM -1.4%. S +2.8%. TMUS +2%.

The sectors are generally flat. Industrial win big with the bump higher in the rails. XLI +1.2%. PPG is up +1.4% pumping the industrials sector higher. Utilities tumble lower out of the gate. XLU -0.6%. UTIL drops to 659.75 losing the 50-week MA at 663.25 which is a big win for market bears for the intermediate term ahead as long as price stays below.

Bingo. The Nasdaq 100 prints a new all-time record high above 5067 and climbing higher. High-flying tech and biotech stocks such as AAPL, ADBE, AMZN, AVGO, BIIB, CELG, EBAY, EXPE, GOOGL, ILMN, MU, NFLX, NVDA, NXPI, QCOM, SBUX, SWKS, TXN and ULTA pump the NDX higher. CSX is up +20% today and is a component in the Nazzy 100 which explains the new record high. NFLX pops +4% also putting the NDX over the top.

At 9:43 AM, SPX 2272. INDU 19797. The Dow slips under 19.8K and is now 203 points from 20,000. COMPQ 5566.66. RUT 1359. VIX 12.28.

Euro 1.0612. Dollar/yen 115.20. Pound 1.2317. WTIC 51.69. Brent 54.53. Gold 1200.

President-elect Trump’s cabinet hearings continue on Capitol Hill. Wall Street and Goldman Sachs insider Steven Mnuchin, the nominee for Treasury Secretary, is on the hot seat this morning. Mnuchin’s comments will impact the US dollar index. He will be asked about Trump’s comments last weekend that “the dollar is too strong.” Mnuchin will be under fire for his involvement in seedy mortgage deals years ago at firms such as OneWest. The democrats will cite personal stories of people that were allegedly screwed by Mnuchin’s actions in the mortgage industry. Mnuchin says, “It is not true that I ran a foreclosure machine.”

Natural Gas Inventories are a humungous 243 BCF drawdown. The chilly weather has the furnaces going full tilt in America. Natty prices rise from 3.28 to 3.33 on the big drawdown and continues higher.

At 11 AM, EIA Oil Inventories are a 2.3 million barrel build. Gasoline inventories are a build and Distillates are a drawdown. Oil prices collapse on the inventory data. WTIC oil drops from 51.80 to 51.40. Brent oil falls from 54.60 to 54.20.

The S&P 500 is down 5 points, -0.2%, to 2266.66. The Dow Industrials are down 49 points, -0.3%, to 19755. The Nasdaq Composite loses 10 points, -0.2%, to 5545. The Russell 2000 small caps are down 12 points, -0.9%, to 1347. VIX 12.53.

DAX -0.1%. CAC -0.4%. FTSE -0.7%. MIB +0.7%. IBEX -0.1%. PSI -0.7%.

 Euro 1.0629. Euro/yen 122.40. Dollar/yen 115.16. Pound 1.2326. Euro/pound 0.8624. Indian rupee 68.1288. Mexican peso 21.8813. Canadian dollar 1.3323. Dollar/yuan 6.8720.

WTIC oil is up +0.6% to 51.39. Brent oil is up +0.5% to 54.16. Natural gas is up +1.1% to 3.34. Gold 1202. Silver 16.95. Copper 2.6085.

Treasury yields are stretching to and fro in very odd action; 2-year 1.23%, 5-year 1.96%, 10-year 2.47%, 30-year 3.05%.

European stocks end the day mixed. The DAX finishes flat at 11597. The CAC ends down -0.3% to 4841. The FTSE drops -0.5% to 7208. The MIB gains +0.7% to 19491. The IBEX finishes down -0.1% to 9379. The PSI ends down -0.6% to 4581.

Italy is the big winner helped by a banking deal where three small Italian banks are folded into Ubi Banca which bounces +7.3%. Central Italy is dealing with a catastrophe from the ongoing earthquakes this week, avalanches and landslides. Royal Mail collapses -6%. Ericsson is down -1.5% on a GS downgrade.

At 12:01 PM EST, SPX 2268. INDU 19772. COMPQ 5552. RUT 1349. VIX 12.42. A mililtary plane carrying Trump takes off from New York City flying to Washington, DC for tomorrow’s inauguration. The orange-headed leader will be living in the Whitehouse this time tomorrow. Trump will be sworn-in at noon only 24 hours away.

Euro 1.0629. Dollar/yen 115.31. Pound 1.2318. WTIC 51.42. Brent 54.26. Natural gas is up +2.3% to 3.38. Gold 1200. Silver 16.90. Copper 2.6085.

Treasury yields are; 2-year 1.23%, 5-year 1.97%, 10-year 2.48%, 30-year 3.06%. The 2-10 spread is 125 bips. Despite the steepening yield curve (the 2-10 spread widens), banks are weak. XLF -0.4%. JPM -0.6%. GS -1.1%. KRE -0.9%. RF -0.5%. KEY -2%. Keycorp loses the pre-market joy.

At 12:08 PM, Trump lands at Joint Base Andrews, Washington, DC. On Capitol Hill, Steven Mnuchin is being grilled like a hamburger by the Senate. The testimony is very heated and dramatic. Democratic senators are painting Mnuchin as a tax cheat setting up shell companies in the Cayman Islands. Mnuchin did not list himself as a director of a Cayman Islands company on the Senate forms under where it says ‘list your past positions’. Mnuchin looks like he is hiding something but he claims the omission is an innocent oversight. Mnuchin is tap dancing like Fred Astaire. As he discusses the GSE’s (government-sponsored enterprises), FMCC mini-crashes -3.7% and FNMA mini-crashes -4.8%.

Another hearing is occurring on Capitol Hill for Rick Perry, the former presidential candidate that Trump has chosen to run the Department of Energy. Perry should not have any trouble with his testimony and approval. Humorously, Perry will take control of the Department of Energy which is a department he wanted to abolish when he ran for president. Like a typical politician, Perry now touts the department as the greatest thing since sliced bread.

A 10-Year TIPS Auction goes off at 1 PM. SPX 2268. INDU 19774. COMPQ 5551. RUT 1347. VIX 12.49. Euro 1.0619. Dollar/yen 115.44. Pound 1.2295. WTIC 51.24. Brent 54.17. Gold 1199.

Treasury yields are; 2-year 1.25%, 5-year 1.99%, 10-year 2.49%, 30-year 3.07%.

CSX rides +21% higher. Other winners are MNK up +5.5%, NSC +4.8%, NFLX +4.6% and COG +3.7%. Losers include CHK -4%, WU -3.8%, NUE -3.2%. URBN -2.7%. PBI -2.7%. MU and STX are each down -2.2%. In the Dirty Thirty, UNH, CAT, BA and MMM lead higher while XOM, GS, PFE, MRK and AXP drag the Dow lower (oil/energy, financials and pharma are weak). IBB -0.7%.

Stocks tank in the afternoon from 2 PM on. The SPX flushes from 2267 to 2257 in a few minutes time. The SPX is down 13 points, -0.6%, to 2259. The Dow drops 117 points, -0.6%, to 19688. The Nasdaq Composite is down 25 points, -0.5%, to 5530. The Russell 2000 is down 16 points, -1.2%, to 1342. VIX 13.22.

WTIC 51.33. Brent 54.14. Natty 3.37. Gold 1203. Silver 16.99. Copper 2.6055.

Treasury yields are; 2-year 1.23%, 5-year 1.96%, 10-year 2.47%, 30-year 3.05%.

US stocks end the day lower but off the lows. The SPX loses 8 points, -0.4%, to 2264 under the 20-day MA at 2265. LOD 2258. The INDU finishes down 72 points, -0.4%, to 19732. LOD 19677. The RUT finishes down 13 points, -0.9%, to 1346.

The COMPQ loses 16 points, -0.3%, to 5540. The NDX is down 5 points, -0.1%, to 5051 failing to print a new all-time closing high but the Nasdaq 100 prints a new all-time record high at 5078.41. VIX 12.78. VIX HOD 13.28.

After the closing bell, AXP drops -0.4% on earnings. Big Blue is black and blue; IBM is beaten -2.4% after earnings. SWKS rocket launches +7.8% after earnings. Skyworks announces a stock buyback which provides upside fuel. Financial engineering rules the markets.

WTIC oil 51.39. Brent oil 54.20. AXP -0.8%. IBM -2.3%. SWKS +7.4%.

At 8 PM EST (1 AM London Friday morning; 2 AM Frankfurt; 10 AM Tokyo), Fed Chair Yellen is speaking in Stanford, California, repeating her talk from yesterday and planning to take Q&A. Australia and Asia markets are trading on Friday morning.

Tuesday, January 17, 2017

WEDNESDAY 1/18/17; C; GS; USB; SCHW; FAST; CPI (Consumer Price Index); Industrial Production; Beige Book; Fed Chair Yellen Speaks; KMI; NFLX Prints Record High on Earnings

Australia’s ASX 200 is down -0.6% to 5666. New Zealand stocks sink -0.3%. In Japan, the NIKK and Topix indexes begin trading down -0.5% on a stronger yen (the dollar/yen pair is under 113). Korea’s KOSPI trades down -0.2% as Samsung’s executive Jay Lee arrives for a hearing to face corruption charges.

US futures are flat. S&P flat. Dow +7. Nasdaq +1. WTIC oil 52.53. Brent oil 55.47. Natural gas 3.39. Gold 1216. Silver prints 17.18 on 1/18/17. Copper 2.62.

Euro 1.0699. Dollar/yen 112.94. Pound 1.2390. Aussie dollar 0.7549. Dollar/yuan 6.8450. Indian rupee 67.96. Indian rupee 100.43.

US Treasury yields are; 2-year 1.16%, 5-year 1.83%, 10-year 2.34%, 30-year 2.94%. The 2-10 spread is 118 bips. German bund 0.311%. Japan 10-year yield 0.042%.

Carmakers Hyundai and Kia announce a $3.1 billion investment in the US over the next few years. Many companies are choosing to front run the potential wrath of Trump by announcing big plans for US jobs before the orange-headed president-elect calls out the company on Twitter. King Trump has many companies shaking in their boots as they adjust to this new method of capitalism; it is unlike any capitalism that Adam Smith or any Austrian economist would ever recognize.

NIKK -0.2%. Topix -0.4%. SPASX200 -0.6%. KOSPI -0.1%. Chinese mainland stocks are trading flat while Hong Kong rallies strongly. SSEC flat. CSI300 +0.3%. HSI +1%. Straits Times -0.4%. Taiex -0.2%. Asia stocks recover off the lows as the session plays out. The dollar/yen pair moves above 113 (weaker yen). Aussie dollar 0.7544. Dolar/yuan 6.8634.

Japanese exporters rally intraday as the yen weakens. Nissan +1.3%. Toyota +0.3%. Honda +1.5%. Sharp +2.4%. Toshiba was down -2.1% in the early going but rallies +2.4% into the closing bell. Toshiba is exploring the option of selling off its semiconductor-related businesses to shore up its balance sheet against the nuclear facility (Westinghouse in the States) losses.

Other gaming stocks rise after MGM China slips -1.9% on news that the opening of its new Macau casino will be delayed until later this year. Wynn Macau +1.7%. Sands China +1.5%. Galaxy Entertainment +0.9%.

The NIKK ends the session up +0.4% to 18894. The yen weakened during the session, with the dollar/yen pair moving from sub 113 to 113.27, so Japanese stocks recover intraday. The SPASX200 drops -0.4% to 5679. The KOSPI ends down marginally -0.1% to 2071.

The SSEC is up a smidgeon +0.1% to 3113. The HSI gains +1.1%, the big winner in the Pacific theater overnight, to 23098. India trading continues with the Nifty up +0.2% to 8412.

European indexes are trading flat in the early going. DAX +0.2%. CAC -0.2%. FTSE +0.3%. US futures float slightly higher overnight. S&P +3. Dow +26. Nasdaq +8. Russell +3. VIX 11.84. The market bulls rule the markets with volatility remaining sub 12.

Euro 1.0688. Euro/yen 121.15. Dollar/yen 113.35. Pound 1.2313. Euro/pound 0.8631. Mexican peso 21.5891. Canadian dollar 1.3067. Dollar/yuan 6.8363. Aussie dollar 0.7550.

Oil is marginally higher. WTIC oil 52.64. Brent 55.72. Natural gas is down -1.5% to 3.36. Gold 1212. Silver 17.15. Copper 2.6250.

Treasury yields are; 2-year 1.16%, 5-year 1.85%, 10-year 2.35%, 30-year 2.95%. the 2-10 spread is 119 bips.

Deutsche Bank and the DOJ finalize the $7.2 billion settlement due to the bank’s nefarious activities in the mortgage servicing market before the 2007-2008 financial crisis. DB sinks -0.4%. The world’s largest education company, Pearson, crashes -25% losing one-fourth its value due to changes in the publishing industry. Chip equipment king ASML rallies +4% on earnings. Novozymes, a Danish biotechnology company, rallies +4% on earnings and axing 200 employees. Retailer Burberry jumps +1.6% after beating on sales forecasts.

In Davos, Ray Dalio, a highly respected market forecaster and owner of the world’s largest hedge fund, Bridgewater Associates, says the rise of populism around the globe is the biggest threat to markets. The wealthy have benefited greatly from eight years of central banker Keynesian monetary policies. Global citizens are pushing back against globalism since it is only designed to make the wealthy more filthy rich at the expense of the remainder of society. Simply look at the expanding gap between rich and poor over the last few years now the widest in 50 years. The huddled masses are beginning to rise up against the elite privileged class that have raped the global financial system for all its worth over the last few decades.

At 4:30 AM EST (9:30 AM London), UK November Unemployment Rate is 4.8% as expected. UK basic wage growth is up +2.7% on-year a slight beat of the +2.6% expected. Inflation, that the BOE and other central bankers have been trying to create for eight years, cannot exist without wage inflation. Wages typically need to rise from +4.0% to +4.5% on-year to truly reflect an inflationary environment.

DAX +0.2%. CAC -0.2%. FTSE +0.1%. MIB -0.1%. IBEX +0.1%. PSI +0.2%.

S&P +3. Dow +23. Nasdaq +7. Russell +3. VIX 11.86. WTIC 52.12. Natty 3.37. Brent 55.14. Gold 1213. Silver 17.17. Copper 2.62.

Euro 1.0690. Euro/yen 121.10. Dollar/yen 113.29. Pound 1.2330. Euro/pound 0.8670. Mexican peso 21.611. Canadian dollar 1.3072. Dollar/yuan 6.8346. Aussie dollar 0.7550. Indian rupee 68.01. USD 100.57.

Treasury yields are steady; 2-year 1.16%, 5-year 1.85%, 10-year 2.35%, 30-year 2.95%. the 2-10 spread is 119 bips. German bund 0.324%. Japan 10-year yield 0.051%. UK gilt 1.32%.

The German cabinet proposes a date for the election on Sunday, 9/24/17. This date, only eight  months away, will determine the fate of Chancellor Merkel. A 5.6 magnitude earthquake hits central Italy. Rome shakes.

At 5:50 AM EST (10:50 AM London; 11:50 AM Frankfurt, Paris and Davos), S&P +2. Dow +15. Nasdaq +7. Russell +2. VIX 11.94. Volatility sneaks upward by a touch so futures leak lower by a smidge. Euro 1.0683. Dollar/yen 113.41. Pound 1.2305. Aussie dollar 0.7552.

Oil is hammered as the North American shale producers ramp up production. The OPEC oil production cuts will be replaced by US producers. WTIC oil tanks -1.5% to 51.67. Brent oil loses -1.4% to 54.67. Soggy oil prices create a slight weight on US futures. Natural gas is down -1.4% to 3.36. Gold 1212. Silver 17.14. Copper 2.616.

In early US pre-market trading, CSX derails -4% after last evening’s earnings. UAL is down -1.7%. The railroad and airline sectors may trade lower today in sympathy. AGN sinks -0.4% on news that Allergan failed to disclose merger discussions as regulations dictate.

Home improvement retailer Lowe’s, LOW, announces plans to can 2,400 workers. Target cuts its forecast. TGT collapses -5%. Deutsche Bank is scrapping bonuses for senior executives.

The Investor’s Intelligence Survey is at 60.6% bullish sentiment an 18-month high. The bears fall to only 17.3%. Everyone expects the stock market to move higher this year (think of the data from a contrarian perspective). The excessive bullishness and euphoric optimism typically creates a stock market top.

Markets are quiet. The Goldman Sachs and Citigroup bank earnings will set the tone. US Mortgage Applications are flat. Mortgage loan applications are down -5% while refinancing applications pop +7% due to a slight change in lending rules favoring the mortgagee.

Goldman Sachs reports 5.08 on EPS but his isnot directly comparable to the 4.84 estimate. The release is the typical great numbers from Goldy and GS jumps +0.5% higher but then falls on its sword turning negative down -1.1%. Analysts must smell a rat in the release. The banks have had a phenomenal rally since the Trump election so perhaps it is a ‘sell the news’ event.

At 7:42 AM, S&P +1. Dow +4. Nasdaq +6. Russell +2. VIX 11.93. DAX flat. France is weak with the CAC down -0.6%. FTSE +0.1%. The Nifty finishes the session up +0.2% to 8417.

Euro 1.0683. Dollar/yen 113.38. Pound 1.2281. Aussie dollar 0.7557. WTIC oil is down -1.7% to 51.61. Brent 54.65. Natty 3.37. Gold is down 4 bucks to 1213. Silver 17.14. Copper 2.615.

Treasury yields are steady; 2-year 1.17%, 5-year 1.86%, 10-year 2.36%, 30-year 2.96%.

SCHW drops -1% on earnings. C beats on earnings but trades lower -0.5%. USB trades marginally lower after earnings. GS -0.2%.FAST quickly jumps +5% on earnings. TGT -3.7%. WMT -1.2%. DIS -0.8%.

At 8:30 AM, CPI (Consumer Price Index) is up +0.3% month-on-month bang in line with the estimate and a tick above the prior +0.2%. Year-on-year is up +2.1% higher than the previous +1.7%. Less food and energy is up +0.2% month-on-month in line with estimates and the  prior +0.2%. Year-on-year is up +2.2% versus the prior +2.1%. Energy prices rise for four straight months. House prices also sneak higher. A slight whiff of inflation is in the air but nothing to yet become excited about.

S&P +5. Dow +40. Nasdaq +11. Russell +5. VIX 11.73. DAX +0.2%. CAC -0.4%. FTSE +0.3%. WTIC oil is down -1.8% to 51.55. Brent oil is down -1.8% to 54.47. Natural gas tumbles -2.6% to 3.32. Gold 1213. Silver 17.19. Copper 2.62.

Euro 1.0669. Dollar/yen 113.45. Pound 1.2281. Mexican peso 21.6789. Canadian dollar 1.3113. Aussie dollar 0.7551. USD 100.82.

Treasury yields are; 2-year 1.18%, 5-year 1.87%, 10-year 2.37%, 30-year 2.97%.

15 minutes before the opening bell, Industrial Production is up +0.8% month-on-month versus the +0.6% expected and prior revised-lower -0.7%. Manufacturing is up +0.2% month-on-month missing the +0.3% expected but above the prior -0.1%. Capacity Utilization Rate is at 75.5% a tiny tick better than the 75.4% expected and above the prior 74.9%. Utilities outperform while mining is flat. Manufacturing remains weak.

At 9:30 AM EST, US stocks begin trading flat. SPX 2269. INDU 19801. COMPQ 5546. RUT 1356. VIX 12.39. WTIC 51.41. Brent 54.37. Natty 3.33. Gold 1216. Silver 17.24. Copper 2.6185.

DAX +0.3%. CAC -0.4%. FTSE +0.3%. Euro 1.0675. Euro/yen 121.03. Dollar/yen 113.36. Pound 1.2298. Euro/pound 0.8680. Mexican peso 21.7533. Canadian dollar 1.3090. Dollar/yuan 6.8537. Indian rupee 68.075. USD 100.67.

Treasury yields are; 2-year 1.17%, 5-year 1.86%, 10-year 2.36%, 30-year 2.97%. UK gilt 1.32.

Lower oil prices drive energy stocks lower. XLE -0.5%. Retail is also a drag on the broad market. TGT -4.3%. JCP -2.4%. WMT -0.7%. KSS -4.5%. Mattel bucks the negativity. MAT +0.2%. Retailers, toymakers and carmakers are sorting out the possibility of a border tax against their products entering the country.

Consumer staples and healthcare stocks lead higher. CSX jumps the tracks sliding -4.4% lower. UNP -0.5%. NSC -0.3%. UAL -1%. Airlines are mixed. After earnings, GS and C are each down -0.8% to begin the day. KBE -0.3%. Pearson, PSO, is punished -29%; the 401k plan just turned into a 201k.

CHTR prints a new record high at 307.32. AAPL trades higher printing at 120.50 the highest level since July and November of 2015. CNBC business television personality Jim Cramer performs a victory lap for calling the rise in AAPL from the 90’s. Cramer continues to tout Apple as a favorite long play and forecasts more gains ahead.

Chipmaker ASML launches +8%. SOX +1.3%. NXPI +0.5%. NVDA +0.8%. KLAC +1.3%. XSD +0.1%. AVGO +1.5%.

At 9:43 AM EST, SPX 2267. INDU 19781. COMPQ 5548. VIX 12.60. Euro 1.068. USD 100.67. Gold 1215. WTIC oil 51.48. Brent oil 54.46.

From Davos, Switzerland, at the Economic Forum, JPM CEO Jamie Dimon says, “Everything looks to be pretty good (for the economy).” Dimon says companies are flush with cash, the capital markets are wide open, jobs are increasing and wages are rising. Dimoin paints a rainbow mosaic of blue skies and sunshine for the stock market ahead.

SPX INDU 19779. Interestingly, the Dow Industrials briefly slip negative on the year. COMPQ 5546. VIX 12.52. Former President George Bush is hospitalized; he is 92 years old.

At 10 AM, the NAHB Housing Market Index is at 67 missing the estimate at 69 and prior revised-lower 69. The home builders remain confident, as they always do; you will not sell many houses if you are a Gloomy Gus or Debbie Downer. Building in the western States is strongest. The south and Midwest area activity is robust. The northeast continues to improve but lags the rest of the country. USD 100.68.

EIA Oil Inventories are delayed until tomorrow due to the holiday. Fed’s Kashkari says the fiscal outlook is not clear enough to alter his economic forecast. Kashari wants to wait and see the type of fiscal policies that Trump brings to the table.

European stocks end the day mixed. The DAX gains +0.5% to 11599. The CAC finishes down -0.1% to 4853. France and Spain are the skunks at the garden party. The FTSE gains +0.4% to 7248. The MIB is up +0.3% to 19358. The IBEX is down -0.1% to9386.  The PSI gains +0.2% to 4606.

The ECB policy meeting, rate decision and President Draghi press conference is on tap tomorrow morning. The euro will react which will impact the US dollar index and European and US stocks. Markets are quiet ahead of the European Central Bank’s decision and comments.

SPX 2270. INU 19819. COMPQ 5547. Euro 1.0683. Dollar/yen 113.45. Pound 1.2234. Gold 1213. Silver 17.27. Copper 2.62.

At 1:45 PM, SPX 2268. INDU 19786. COMPQ 5541. RUT 1354. VIX 12.60. WTIC oil is down -2.3% to 51.28. Brent 54.19. Gold 1212. Silver 17.25. Copper 2.617.

Euro 1.0671. Euro/yen 121.26. Dollar/yen 113.63. Pound 1.2292. Euro/pound 0.8681. Mexican peso 21.8651. Canadian dollar 1.3222. Dollar/yuan 6.8496. USD 100.87.

Treasury yields are; 2-year 1.18%, 5-year 1.88%, 10-year 2.39%, 30-year 3.00%.

Former President George Bush’s wife Barbara Bush is admitted to the hospital for a cough and fatigue. President Bush is placed into the IC (intensive care) unit. Therefore, he may be on life support.

At 2 PM, the Beige Book is released and says the economy is improving moderately. Wage gain is modest in most areas amid a tight job market. The report says a jump in manufacturing activity has occurred. Growth in the energy industry remains mixed. The Beige Book says companies cannot find the skilled workers to run sophisticated machinery. The report is mixed. The Fed says holiday retail sales were a hit or miss. The report says the minimum wage hikes are impacting economic activity in some regions.

The Beige Book does not impact markets. SPX 2268. INDU 19781. COMPQ 5541. RUT 1353. VIX 12.62. TRAN -0.1%. WTIC 51.29. Brent 54.16. PSO crashes -29%. Pearson, a textbook publisher, is going the way of the buggy whip.

Treasury yields sneak about one basis point higher across all durations; 2-year 1.19%, 5-year 1.89%, 10-year 2.40%, 30-year 3.00%.

At 2:30 PM, President Obama begins his final press conference. Humorously, he has had five final press conferences over the last two weeks. This is the final-final. President-elect Trump takes control of the Free World at noon on Friday only 45 hours away. Trump will be POTUS on Friday afternoon as the stock market moves into the closing bell.

President Obama thanks the press corp. Of course he does. They bent over and licked his shoes each day for eight years spinning the news in the president’s favor. The democrats control 80% of the media in the United States so it was easy for the president to receive cover for his unpopular policies. A President Trump will face a more difficult battle since he must fight the adversarial press over the coming four years. Fox News and other republican news outlets are supporting Trump and will spin the news in the orange-headed showman’s favor but the conservative-leaning press represents only 20% of the media in the US.

Markets are uninspired and are likely waiting for the ECB rate decision and Draghi press conference tomorrow morning. The central bankers are the market.

At 3 PM EST (8 PM London; 9 PM Frankfurt; 5 AM Tokyo Thursday morning), Fed Chair Yellen is set to speak in San Francisco and plans to take Q&A. The text of the speech is released and Yellen begins speaking about 3:15 PM. Chair Yellen remarks on the Fed goals. Yellen says, “The economy is  near maximum employment. I cannot tell you when the Fed will raise funds next since it depends on how the economy will evolve over the coming months.”

Utilities, UTIL, collapses through the 50-week MA at 663.25 at 3:06 PM EST. This is a bearish signal for the stock market if UTIL remains below.

Chair Yellen says, “Some measures show room for more job market progress. Wage growth only recently picked up and remains fairly low.” Yellen says, “The US economy is close to the Fed’s dual mandate.” Yellen says, “Rates will creep higher but gradually towards the 3% Fed Funds rate by the end of 2019.” The Fed is calling out 3% as the ‘neutral rate’. This is the rate that is not too high that would hurt the economy while at the same time not too low that would continue to support to the economy.

President Obama continues speaking proclaiming that “the administration helped society move in a better direction.”  That statement is delusional. Social unrest continues to ramp up in recent years in the United States including racial violence and violence against police. Terrorism has increased around the world and attacks are occurring inside the United States at a greater frequency.

The gap between rich and poor is the widest in 50 years due to President Obama appointing Federal Reserve Chair Yellen, Queen of the Doves, that has pumped the stock market to record highs to reward the wealthy at the expense of the common person. The president has hurt society over the last few years and social unrest and violence will likely accelerate once a long-overdue recession takes hold in the coming months. The president continues to paint copious amounts of red lipstick on that legacy pig.

Shamefully, the president invokes the name of ‘Jim Crow’ again. He cannot help himself. He stirs up racial hatred and ill feelings with his constant Jim Crow rhetoric. How appropriate for a man that has created social and racial unrest to finish his tenure screaming Jim Crow from the rooftops. He inflames people with his rhetoric instead of telling people for the last eight years that we are all the same.

President Obama would be better served to talk to Rodney King that was beaten senseless by the cops years ago in Los Angeles. King did not hold ill feelings or seek revenge. Instead he asked, “Why can’t we all just get along?” The president’s major failing is how he has created racial and ethnic ill will in the US rather than improving race relations.

Back at the Yellen event, she says, “The Fed is close to meeting the dual mandate of inflation and full employment but cannot provide timing on the next rate hike.” Yellen appears agreeable to the three-rate-hike path on tap for this year. Yellen says wages are picking up but she wants to see more growth in earnings.

Yellen discusses productivity growth. The productivity slowdown creates concern but the way the data is tallied may be impacting the numbers. Modern technology improvements may not be properly accounted for in the data.

SPX 2269. INDU 19792. COMPQ 5546. RUT 1354. VIX 12.53.

Winners today are; FAST +5.8%. MJN +5.3%. NUE +3.7%. URI +3.5%. QRVO +3.3%. Chips are strong. MU +2.7%. AVGO +3.3%. SOX +1.4%. Losers are; MNK -5.8%, TGT -5.8%, NTRS -4.7%, HBI -3.7%, UAA -3.2%.

Euro 1.0634. Dollar/yen 114.27. The USD runs higher from 100.3 to 101.1 since yesterday afternoon. The bump in the dollar sends the dollar/yen pair higher. Pound 1.2261.

Yellen finishes her statement at 3:33 PM and begins a question and answer period. The moderator reads questions to Yellen. The moderator asks Yellen about the growing income inequality in the United States. She says the Fed only has limited tools to help address inequality. Sounds like she is washing her hands of any fault for causing the increasing divide between rich and poor in America. She does not want such a dark stain on her legacy. The divide between rich and poor will lead to future social unrest in America.

The 4 PM EST closing bell rings to end the trading day as Yellen continues taking Q and A. Yellen says ‘credit growth is not increasing at a pace that has her concerned’. Yellen says, “The expectation is for gradual rate increases (this year).” She says ‘the Dodd-Frank regulations provide fantastic guidelines’. Yellen wants to see improved banking compliance. Yellen says the US still has a large number of community banks.

US stocks end the day mixed. The SPX finishes up 4 points, +0.2%, to 2272. LOD 2263.35. The 20-day MA support is 2265.13. The Dow ends down 22 points, -0.1%, to 19804. The Nasdaq Composite is up 17 points, +0.3%, to 5556. The RUT is up 6 points, +0.5%, to 1359. VIX 12.45.

Utilities, UTIL, continue to fight at the critical 50-week MA at 663.25. UTIL ends at 663.56 pennies above. The pivot up or down from this level will impact the broad stock market in the intermediate term (weeks and months).

After the closing bell, NFLX rocket launches +7.4% after beating on earnings and top line revenue. The Netflix streaming service reports strong upside gains. Traders believe that Netflix will grow going forward so they are feverishly buying shares. NFLX +6.5%.

At 4:14 PM EST, the Yellen event ends. Yellen was more dovish than expected. The economic data is encouraging and meeting her own goals but she remains hesitant to act with rate hikes. Yellen is Queen of the Doves. The three rate hikes remain on the table for this year but after her talk this afternoon, the Fed is perceived as a very tiny hair more dovish. Yellen signals the 3% level as the ‘neutral rate’ which is a little bit higher than the consensus of analysts so yields float slightly higher which is a hawkish reaction.

Treasury yields rise today more on the short end; 2-year 1.22%, 5-year 1.92%, 10-year 2.42%, 30-year 3.00%. The 2-10 spread is 120 bips.

KMI sinks -2.2% after reporting earnings. XOM is down -0.3% on a UBS downgrade. Mallinckrodt reaches a settlement with the FTC over antitrust violations. Usually stocks rise on the settlements but MNK sinks -0.2% adding to the -5.9% loss during the regular session.

NFLX is on fire gaining +8.2%. Traders are tripping over each other to buy Netflix stock in the afterhours. Bingo. Netflix prints a new record high above 144. Netflix will create a positive vibe in Asia and Europe overnight and the tech sector should be jolly tomorrow.

The TIC data continues to show that China is dumping US Treasuries. China sold a surprising $66 billion in Treasuries. Japan is the number one holder of US debt with China number two. China lost its number one ranking last month. Japan and China both shed US debt after yields rise higher after the Trump election in early November.

66 democrats now plan to boycott President-elect Trump’s inauguration on Friday. Order 66 diapers and baby blankets to comfort the whiners. Washington, DC, has the largest concentration of adult babies in the country and they are all located inside the beltway. Trump will be president in only 36 hours. The last of the Obama’s furniture is moved out the back door of the Whitehouse into a moving van.

API Oil Inventories are a drawdown of 5 million barrels far more than the 900K barrel drawdown expected. Gasoline and distillate inventories rise. WTIC  oil 51.38.

Assessing the holiday sales data, there are a few winners including LULU, URBN, PLCE and FIVE. There are far more losers during the holiday season including TGT, GME, TIF, EXPR, JCP, KSS, M, BKS, SMRT, ASNA, SIG and BONT.

The parties for the rich and famous continue in Davos. Pot-bellied billionaires pinch the bottoms of leggy waitresses that enjoy bending over while serving expensive brandy. A hilarious quote is being repeated by attendees at the event; “Davos is where the billionaires tell the millionaires what the middle class feels.”

Sunday, January 15, 2017

TUESDAY 1/17/17; UK May Speaks on Brexit; Pound Above 1.23; MS; UNH; Empire State Mfg Index; Fed Speak; CSX; UAL

US futures are trading soggy. S&P -6. Dow -48. Nasdaq -10. Russell flat. Australia’s ASX 200 is down -0.7% in the early going. Aussie banks are sinking -1% and more. Gold miners are a bright spot. Newcrest +1.3%. Cathay Pacific is overhauling its airline business which likely means canning employees so the stock jumps +3%.

Euro 1.0602. Euro/yen 121.01. Dollar/yen 114.13. The pound is holding on to the 1.20 level at 1.2036. Euro/pound 0.8809. Mexican peso 21.6893. Canadian dollar 1.3177. Dollar/yuan 6.9008. Indian rupee 68.095. Aussie dollar 0.7472.

WTIC oil 52.50. Brent oil 55.86. Natural gas 3.48. Gold 1204. Silver 16.85. Copper 2.66.

Treasury yields are set to resume trading after the holiday weekend; 2-year 1.20%, 5-year 1.90%, 10-year 2.40%, 30-year 2.99%. The 2-10 spread is 120 bips.

The Nikkei Index is online and promptly flushes -1%. The dollar/yen pair is moving lower at 114.14 which reflects a strengthening yen which slaps Japanese stocks. Topix -0.666%. The KOSPI is trading +0.6% higher with the Korean won at 1184.28.

Rio Tinto reports strong iron ore shipment numbers and the stock jumps +1.4%. The ASX 200 remains soggy down -0.8%. Aussie dollar 0.7467. The dollar/yen slips under 114 to 113.95 so Japanese stocks will be slapped around. NIKK -0.9%. Topix -1%. Sterling holds that 1.20 level at 1.2046.

Chinese trading begins negative with the SSEC marginally lower. The Shenzhen Index remains soggy collapsing -7.5% over the last week but the Beijing communists behind the curtain are keeping quiet about the stealth event. The Shenzhen is weighted with tech stocks. Hong Kong’s Hang Seng Index is trading higher in the early going.

During the last two hours of trading, the Chinese communists play their typical games and step in to pump the Shanghai Index higher from the 3074 LOD to 3110 printing positive on the day. The PBOC continues burning through reserves to maintain an elevated Chinese stock market and support the yuan currency.

The NIKK ends the session down -1.5% to 18814. The stronger yen hurts Japanese stocks the dollar/yen pair prints a 113-handle on its way to 112. The ASX 200 drops -0.9% to 5699. Aussie banks are slapped. The KOSPI gains +0.4% to 2072. The SSEC finishes up +0.2% at 3109 after spending the majority of the session negative. The HSI gains +0.5% to 22841.

In early European trading, the indexes are trading lower. DAX -0.6%. CAC -0.5%. FTSE -0.3%. SMI -0.4%. OMX -0.6%. India continues trading with the Nifty down 30 points, -0.4%, to 8382. Global markets are relatively quiet overnight waiting on UK PM Theresa May’s speech on Brexit from London at 11:45 AM UK time (6:45 AM EST). Chinese President XI speaks from Davos shortly.

S&P -10. Dow -70. Nasdaq -17. Russell -7. VIX 12.33. WTIC oil 52.57. Brent 55.85. Natural gas 3.48. Gold 1213. Silver is up +1.6% to 17.03. Copper loses -2.4% to 2.6250.

Euro 1.0662. Euro/yen 120.68. Dollar/yen 113.19. The pound is climbing higher above the 1.21 level to 1.2121. The majority consensus is calling for a weaker pound but instead sterling rises with May’s speech approaching quickly. Euro/pound 0.8796. Mexican peso 21.5816. Canadian dollar 1.3071. Dollar/yuan 6.8653. Indian rupee 68.00. Aussie dollar 0.7534.

Treasury yields are; 2-year 1.16%, 5-year 1.84%, 10-year 2.33%, 30-year 2.93%.

Credit Suisse -1.1%. British American Tobacco is marginally lower on news of a merger with Reynolds American. RAI jumps +4% in US pre-market trading. Rolls Royce rides +6.66% higher after paying a penalty to settle a bribery probe. Noble Energy buys Clayton Williams Energy for $2.7 billion. NBL and CWEI will trade actively in the States today.

At 4:30 AM EST (9:30 AM London), the pound is rising sharply to 1.2170 up over +1% on the session. UK December CPI Core Inflation rate is up +0.5% month-on-month above the +0.3% expected. UK inflation rises +1.6% year-on-year versus the +1.4% expected. A whiff of inflation occurs in the UK at the highest level since summer 2014. The RPI (Retail Price Inflation) is up +2.5% year-on-year and up +0.6% month-on-month slightly hotter than expected.

The lower pound in recent weeks assists in moving up UK prices. UK Import Prices are up +16.9% year-on-year the highest increase since July 2011. Pound 1.2175. Sterling is ramping higher as the majority of traders and analysts say a lower pound is guaranteed. May’s talk this morning will also move the pound. WTIC oil 52.80. Brent oil 56.09.

At 5:15 AM EST (10:15 AM London; 11:15 AM Davos), Chinese President Xi begins speaking. Xi says, “We live in a world of contradictions.” Xi says, “Regional conflicts, global terrorism, unemployment and the widening income gap are adding to the uncertainties around the world.” Xi says, “Economic globalization is blamed for causing the problems.” Of course Xi defends globalization since China has benefited the most over the last two decades; the communist is simply talking his own book.

Xi is the one creating regionally conflict because of his aggression in the South China Sea. It is humorous listening to a communist lecturing the West on fairness in trade and geopolitical matters. Xi continues with the globalization theme saying the world cannot turn back and must instead embrace global trade going forward. Of course he says this since China’s property bubble will likely burst and he will face serious economic headwinds in the months and few years ahead; he needs to take advantage of further globalization to help China weather this coming storm.

S&P -11. Dow -80. Nasdaq -22. Russell -9. VIX 12.48. WTIC 53.30. Brent 56.71. Gold is up 13 dollars to 1215. Silver 17.05. Copper trades -2.2% lower to 2.63 the sour spot in the metals and commodities arena.

Treasury yields are; 2-year 1.16%, 5-year 1.84%, 10-year 2.33%, 30-year 2.93%.

Xi says, “Say no to protectionism; pursuing protectionism is like locking oneself in a dark room.” Xi proclaims, “No one will win in a trade war.” The Davos audience applauds enthusiastically. The world’s privileged and global elite class is completely out of touch with the common man and woman.

Xi says China openly trades its technology and other innovative ideas with the rest of the world. Liar. Actually, China steals technology from other countries and exploits the information for their own benefit while closely guarding their own new and innovative ideas. Xi’s main message is for globalization to continue and not become sidetracked by the growing populism and protectionist movements around the world. Xi is talking his own book. The Chinese lunar new year begins in 10 days.

The German ZEW Investor Expectations data is 16.6 missing the 18.4 expected. DAX -0.7%. CAC -0.5%. FTSE -0.3%. MIB +0.3%. IBEX -0.1%. PSI +0.2%. SMI -0.5%. OMX -0.6%.

Euro 1.0673. Euro/yen 120.75. Dollar/yen 113.13. Pound 1.2157. Euro/pound 0.8779. Mexican peso 21.5741. Canadian dollar 1.3053. Dollar/yuan 6.8579. Indian rupee 67.9762. Aussie dollar 0.7534. USD 100.77.

S&P -10. Dow -70. Nasdaq -18. Russell -8. VIX 12.41. WTIC 53.18. Brent 56.54. Natty 3.46. Gold 1217. Silver 17.07. Copper 2.6365.

Treasury  yields are; 2-year 1.16%, 5-year 1.84%, 10-year 2.33%, 30-year 2.93%. The 2-10 spread is at 117 basis points so the yield curve is slightly flattening frustrating the traders that have bet large sums of dough on the banks going forward.

10-year yields are; Mexico 7.60%, Greece 6.83%, Portugal 3.78%, US 2.33%, Italy 1.86%, Spain 1.33%, UK 1.29%, France 0.76%, German bund 0.29%, Japan 0.046%.

At 6:25 AM EST, S&P -12. Dow -97. Nasdaq -25. Russell -10. VIX 12.64. Euro 1.07. Dollar/yen 112.86. Pound 1.2168. Euro/pound 0.8794. Dollar/yuan 6.8553. Aussie dollar 0.7552.

WTIC 53.19. Brent 56.60. Natty 3.46. Gold is up 15 bucks to 1218. Silver 17.11. Copper 2.6395.

DAX -0.9%. CAC -0.7%. FTSE -0.4%. Italy loses the early gains. MIB -0.1%. IBEX -0.3%. Portugal’s PSI is steady at +0.2%.

In US pre-market trading, UNH rises +0.4% after beating on earnings. RAI +3.7%. NBL +1.6%. CWEI +31%.

UK PM May begins speaking in London concerning Brexit. Pound 1.2174. Her words will move the pound (sterling), euro and FTSE stock market. May says, “I want the UK to emerge (from Brexit) stronger and more unified” and “I want us to be a global Great Britain.” May says, “The British people voted (for Brexit) with eyes wide open.”

S&P -13. Dow -100. Nasdaq -27. Russell -11. VIX 12.65. WTIC oil 57.02. Brent 56.44. Gold 1217. Silver 17.08. Copper 2.642.

Treasury yields are; 2-year 1.15%, 5-year 1.82%, 10-year 2.31%, 30-year 2.91%.

Euro 1.0709. Euro/yen 120.83. Dollar/yen 112.83. Pound 1.2173. May’s talk begins with the pound steady since some of the text from the speech was released over the last few hours. Euro/pound 0.8798.

DAX -1%. CAC -0.7%. The FTSE is down 28 points, -0.4%, to 7298. Pound 1.2187.

At 6:55 AM EST, May says, “It (Brexit) is the moment we chose to build a global Britain.” May stresses that she “wishes success for the EU.” DAX -0.8%. CAC -0.6%. FTSE -0.4%. May says, “I do not want the EU to unravel.”

Euro 1.0712. Euro/yen 120.98. Dollar/yen 112.94. Pound 1.2207. Euro/pound 0.8774. Aussie dollar 0.7555. WTIC 53.02. Brent 56.44. The Nifty ends the session down -0.2% to 8398 under the 8.4K level.
UK interest rates are; 2-year 0.16%, 5-year 0.53%, 10-year 1.27%, 30-year 1.94%.

Treasury yields are; 2-year 1.16%, 5-year 1.83%, 10-year 2.32%, 30-year 2.92%. The 2-10 spread is 116 bips.

At 6:57 AM EST (11:57 AM London), 12 minutes into May’s talk, she says the Brexit vote is “no rejection to the values we share with Europe” and there is “no attempt to do harm to the EU.” Brexit was a “vote to restore parliamentary democracy and sovereignty to Britain.” May says, “There will have to be compromises in Brexit” and “the government will put the final deal to a vote in parliament.”

S&P -11. Dow -78. Nasdaq -25. Russell -10. VIX 12.57. Pound 1.2215. Euro/pound 0.8768. DAX -0.8%. CAC -0.6%. FTSE -0.4%. The European Banking Index is up +0.2%. WTIC 52.98. Brent 56.42.
Morgan Stanley reports a healthy beat on earnings and MS pops +2%. Morgan Stanley fixed income (bond) trading is up big albeit in some part due to the easy year-on year comparison.

At 7 AM EST, the FTSE is down -0.6% at 7285. The sterling shorts are covering sending the pound +1.7% higher to 1.2262. Euro/pound 0.8770. The US dollar index is down -0.666% to 100.51.

Treasury yields are; 2-year 1.15%, 5-year 1.82%, 10-year 2.31%, 30-year 2.92%.

May discusses “cross-border crime.” She says, “Threats to security are becoming more serious.” May promises to “continue cooperating with the EU on crime and terrorism.” May calls for a phased implementation of the Brexit. Thus, the timeline is first the Article 50 must be invoked before the end of March as May promised. Then the two-year negotiation process begins for Britain to exit the European Union. Then May desires the plan to be implemented in steps going forward. The EU will push back vigorously against May’s comments and prefers a faster resolution to the Brexit drama. May is establishing a negotiation position.

The European Union will want Britain to exit the membership as fast as possible to minimize disruption and discourage other countries from leaving the EU. If another country leaves the EU, the organization will collapse. This is why the elections in Netherlands, France, Germany, and potential elections in Italy, are very important this year. LePen has already said if she wins the France elections she will pursue a referendum to leave the EU.

At 7:22 AM EST (12:22 PM London), May continues speaking proclaiming, “This is not a game; it is a critical and sensitive negotiation.” May says, “We do not want to undermine the single market or the EU.” Pound 1.2242.WTIC 53.03. Brent 56.47.

Treasury yields are; 2-year 1.16%, 5-year 1.85%, 10-year 2.34%, 30-year 2.94%.

May says, “More trade barriers mean fewer jobs.” European Bank Index +0.3%. Euro 1.0703. Euro/yen 121.27. Dollar/yen 113.31. Pound 1.2264. Euro/pound 0.8728.

May says, “Britain wants to guarantee rights of EU residents as a priority.” The EU wants acceptance of the ‘single market’ which ensures the free movement of goods, capital, services and people across borders. Britain wants fee and open trade but does not want to be a member of the single market. Immigration is a major sticking point and key issue. The EU forces member states to accept the Middle East refugees which are infiltrated with terrorists. The Brexit vote was successful because of the Brit’s pushing back against that insane approach of allowing tens and hundreds of thousands of low-skilled immigrants enter the country without proper vetting. Simply look at the ongoing social problems in Germany after the huge influx of migrants.

May says, “The UK needs to increase trade with the fastest growing markets around the world.” May says China, Brazil, the Gulf States and other nations have expressed interest in trade. May is talking her own book and trying to produce positive energy since the UK will need many new trade deals over the next couple years. May says, “No deal is a better than a bad deal.” May is taking a strong forceful stance ahead of the negotiations with the EU.

May mentions President-elect Trump’s words that ‘Britain is at the front of the line (concerning US-UK trade)’. This is a dig directed at President Obama that had rooted against the Brexit referendum and infamously told the British people that they would be “in the back of the queue (line)” if the Brexit vote won. President Obama backed the wrong horse but this is expected since he sides more with the global elite class rather than the common person.

At 7:15 AM EST, markets are relatively calm as May speaks. Euro 1.0706. Dollar/yen 113.09. Pound 1.2250. Euro/pound 0.8752. Mexican peso 21.5455. Canadian dollar 1.3039. USD 100.63. UK PM May concludes her talk at 7:31 AM EST (12:31 PM London; 1:31 PM Frankfurt and Davos; 9:31 PM Tokyo).

At 7:33 AM as the smoke clears after May’s talk, DAX -0.4%. CAC -0.3%. FTSE -0.6%. Euro 1.0705. Dollar/yen 113.21. Sterling continues higher. Pound 1.2274. Euro/pound 0.8721.

S&P -9. Dow -52. Nasdaq -18. Russell -9. VIX 12.41. WTIC oil 53.00. Brent oil 56.38. Gold 1214. Silver 17.04. Copper 2.638.

Treasury yields are; 2-year 1.16%, 5-year 1.84%, 10-year 2.33%, 30-year 2.93%.

At 7:38 AM EST, the FTSE is down -0.666% to 7279. The pound punches up through the 1.23 level as pound shorts are running for their lives creating upside rocket fuel. The pound is up +2.4% to 1.2332. The pound prints the strongest upside move in over eight years.

DAX +0.2%. CAC +0.1%. FTSE -0.7%. S&P -7. Dow -29. Nasdaq -14. Russell -7. VIX 12.30.

At 8 AM, DAX and CAC are flat. S&P -8. Treasury yields are; 2-year 1.16%, 5-year 1.85%, 10-year 2.35%, 30-year 2.94%. German bund 0.303%. Japan 10-year yield 0.045%.

Luxury retailer TIF loses -4.7% after reporting weak holiday sales down -4% year-on-year. The sales at the flagship Tiffany’s store near Trump Tower suffered due to the security presence and hassle with shopping in New York City. Many men around the US are unhappy as the year begins; they would be a lot happier if they would have given their honey a blue Tiffany box during the holiday season. Instead, they now spend chilly evenings with Fido in the doghouse out back.

Wal-Mart plans store expansions this year and will hire 10K workers plus employ construction contractors. TWTR is down -1.2% on a UBS downgrade. NFLX gains +1% on a Mizuho upgrade. DIS trades flat on a GS upgrade. JWN trades marginally higher despite a Stifel downgrade. CMG loses -1.3% on a downgrade.

The US dollar is weaker across all major currencies. Trump has made comments over the last two days about the dollar being too strong. USD 100.63. Euro 1.0684. Dollar/yen 113.30. Pound 1.2317.

US traders return after a long three-day holiday weekend. January OpEx week tends to trade weak in recent years. During OpEx week each month, stocks are usually bullish from a Tuesday low into Wednesday but this week is odd due to the holiday.

At 8:30 AM EST, the Empire State Mfg Index is 6.5 below the prior 7.6 and the expected 8.0. Manufacturing data takes a pause after the end-of-year optimism. New Orders are stalling.

MS is up only +0.2% as Morgan Stanley conducts a conference call. The other banks rallied strongly on the initial earnings releases and then faded as the hours tick by.

Fed’s Dudley says he is optimistic that the growth in the United States will continue improving. Dudley cautions, however, that the economic growth and recovery is “long in the tooth by historical standards.” A typical economist always talks out of both sides of his mouth. Dudley does not think that the Fed’s gradual interest rate hike path will hurt the expansion. The Fed members provide comments in the spirit of transparency but their words only create market confusion and uncertainty.

XOM drops -0.2% on news of buying Permian Basin assets. GM rises +0.2% after announcing a $1 billion investment in the US manufacturing operations which will produce 7,000 jobs. Some jobs will move from Mexico to the US so the protectionist wars deepen.

At 9:30 AM EST, US stocks begin trading lower as the futures indicate. The S&P 500 drops 8 points, -0.3%, to 2267. The Dow Jones Industrials are down 53 points, -0.3%, to 19834. No one is mentioning Dow 20K today. The Nasdaq Composite loses 32 points, -0.6%, to 5542. The Russell 2000 drops 11 points, -0.8%, to 1361. VIX 12.34.

Energy stocks are positive. XLE +0.6%. Traders seek perceived safety in the down tape so consumer staples catch a bid. XLP +0.8%. Technology is weak. XLK -0.4%.

Cigarette makers are coughing up big gains. RAI +3.7%. MO +0.4%. XOM flat. CWEI +40%. NBL +8%. DIS rallies +0.5%. TIF -5%.

Banks are weak. Morgan Stanley gave up the ghost. MS -1.2%. BAC -1.8%. RF -3.2%. C -1.2%. WFC -1.3%.

DAX -0.1%. CAC -0.3%. FTSE -1%. MIB +0.4%. IBEX -0.2%. PSI +0.4%.

Euro 1.07. Euro/yen 121.02. Dollar/yen 113.10. Pound 1.2362. Euro/pound 0.8655. Indian rupee 67.96. Mexican peso 21.55. Canadian dollar 1.305. Dollar/yuan 6.8476. USD 100.41.

WTIC oil is up +1.6% to 53.23. Brent oil gains +1.4% to 56.62. Natural gas is down -1.1% to 3.38. Gold 1216. Silver 17.11. Copper 2.644.

Treasury yields are; 2-year 1.15%, 5-year 1.82%, 10-year 2.32%, 30-year 2.92%. German bund 0.299%. Japan 10-year yield 0.045%. UK gilt 1.297%.

Retail stocks are on fire. Traders have shorted many names and are running for the exits this morning creating strong short-covering rallies. XRT +1.6%. XLP +0.9%. XLY +0.1%. RTH +0.8%. PVH +3.5%. BBY +3%. WMT +2.6%. TGT +1.7%. JCP +4.1%. GPS +2.7%. DLTR +3.4%. AEO +2.1%. ANF +3.8%. TJX +1%.

At 10:11 AM, SPX 2270. The S&P 500 is 30 points from 2300. INDU 19862. The Dow is 138 points from 20,000. COMPQ 5550. RUT 1359. VIX is 12.12 already retreating off the high at 12.75. The low volatility continues to favor the bulls despite the down tape.

Euro 1.0703. Dollar/yen 113.03. Pound 1.2381. USD 100.40. WTIC 52.99. Brent 56.39. Gold 1215.

Trump sends Anthony Scaramucci to Davos, Switzerland, for representation at the global elite’s party. In a Bloomberg interview, Scaramucci, a Wall Street insider, says that Trump will likely do away with the TPP (Trans-Pacific Partnership) trade deal.

SPX 2272. INDU 19871. COMPQ 5555. RUT 1361. VIX 11.99. DAX +0.1%. CAC -0.2%. The FTSE collapses -1.2% to 7237 weighed down by May. The banks are ugly. MS -2.6%. JPM -2.7%. BAC -2.8%. C is down -1.8% ahead of its earnings report tomorrow.

Treasury yields are; 2-year 1.16%, 5-year 1.83%, 10-year 2.34%, 30-year 2.94%.

Indonesia’s Mt Sinabung is erupting spewing ash and smoke a couple miles into the air. People are nervous since seven died in an eruption last May. Airlines are routing air traffic around the smoke and ash.

Fed’s Brainard says that fiscal policy should focus on the long-term rather than short-term demand. She says that Trump’s policies should target productivity and boosting the labor force. Brainard believes the economy is in good shape and any fiscal stimulus for the short-term would create inflation faster. This would cause the Federal Reserve to act faster with rate hikes. Brainard proclaims that the US economy is “resilient and gently improving.”

European stocks end the day lower except for Italy and Portugal but they were hammered yesterday. The DAX drops -0.1% to 11540. The CAC is down -0.5% to 4860. The FTSE is smacked -1.5% lower to 7220. There is no talk about new footsie highs today. The MIB gains +0.3% to 19296. Spain’s IBEX drops -0.2% to 9395. The PSI gains +0.5% to 4598.

British America Tobacco coughs and hacks its way -3.8% lower on the deal to buy Reynolds. RAI is blowing smoke rings gaining +3.6%. Luxottica -0.6%. Essilor +1.1%. Bayer says the merger with Monsanto should close by the end of the year. Bayer -0.6%. MON +0.5%.

Euro 1.0692. Euro/yen 120.86. Dollar/yen 113.04. Pound is up +2.7% to 1.2384 the biggest jump against the US dolar index since 2008. Euro/pound 0.8634. Mexican peso 21.6101. Canadian dollar 1.3065. Dollar/yuan 6.845. WTIC 52.60. Brent 55.73. Natty 3.39.

Consumer staples lead higher. XLP +1.2%. RAI +3.3%. MO +1%. Financials lead lower. XLF -1.7%. GS -2.4%. JPM -3.1%. C -1.7%. BAC -3.1%. KRE -2.7%. RF -4.5%. CMA -5.4%. CFG -4.7%.

The SEC levies small fines against 10 Wall Street firms for violating the pay-to-play rules with campaign donations. Bill Ackman’s Pershing Square is one of the companies named and on the hook for a $75K fine.

Boeing CEO Dennis Muilenburg visits Trump Tower to kneel and kiss the ring. After the meeting in the lobby, Muilenburg calls the talk “very productive.” Traders are selling off BA stock down -0.6%.

Facebook is twisted up in a $2 billion lawsuit where ZeniMax alleges that Occulus, which CEO Mark Zuckerberg purchased in 2014, stole intellectual property. Zuckerberg says, “The allegations are false.” Interestingly, it was thought that Zuckerberg paid $2 billion for Occulus but during court testimony it is revealed that the actual price tag was $3 billion. Facebook continues to receive negative press in recent weeks and months. The fake news problems persist on the site. Ditto privacy issues. FB -0.5%.

At 1:08 PM EST (6:08 PM London; 3:08 AM Tokyo Wednesday morning), SPX 2271. INDU 19849. 5547. RUT 1360. VIX 11.85.

The bullish prognostications continue. Northern Trust Wealth Mgmt strategist Katie Nixon is bullish on stocks proclaiming that “the risky move is being out of the market.” Nixon says, “Stay invested (in stocks).” Nixon likes US equities, high yield and natural resource plays.

At 2:07 PM, SPX 2270. INDU 19846. COMPQ 5547. RUT 1358.

 Utilities, UTIL, continues to play around at the 50-week MA at 663.25 an extremely important signal line for the broad stock market. Market bulls need UTIL above 663.25 and bears need the utes to fall below. The VIX is under 12 to 11.79; market bears got nothing despite the down tape.

The FTC and US regulators charge Qualcomm with employing anti-competitive tactics over licensing agreements. QCOM collapses -4%. Traders sell first and ask questions later.

Banks are crushed today. KBE -3.4%. RF -6.2%. WFC -2.8%. C -2.3%. BAC -4.1%. JPM -3.9%. GS -3..5%. MS -4%. UNH -0.8%. Consumer staples and utilities lead higher. XLP +1.4%. XLU +1.1%.

USD 100.35. The US dollar index may sink lower to a 99-handle this week. That would get everyone’s attention considering the consensus guaranteed an acceleration higher from 103-104 only a couple weeks ago.

US stocks end the day lower. The SPX drops 7 points, -0.3%, to 2268. The Dow loses 59 points, -0.3%, to 19827. The Nasdaq composite ends down 35 points, -0.6%, to 5539. The Russell 2000 finishes down 20 points, -1.4%, to 1352. Small caps are beaten senseless clearly leading the way lower. Tech also leads the broad market lower. XLK -0.4%. The chips are smacked. SOX -1.6%. VIX 11.87.

After the closing bell, CSX derails -3% after beating by a penny on EPS and beating on the top line. UAL sinks -1.6% after beating on the top and bottom line. Biopharma company NBIX is axed -4% adding to the -5% loss during the regular session on news that its Tourette Syndrome drug is not effective. Gigamon crashes -22% after reporting weak results.

Fed’s Williams says a gradual rate hike path ahead is appropriate. Williams says fiscal spending (Trump) could spur faster growth. Brainard commented a couple hours ago that fiscal spending may also spur faster inflation. Williams says risk are balanced between the upside and downside and the US has reached its jobs goal.

President-elect Trump will begin his four-year term with a 44% approval rating the lowest of any recent president entering office. President Obama, the first George Bush and Bill Clinton each enjoyed approval ratings at or above 80% when they took office. George W Bush had a 72% approval rating. This is not too surprising since Hillary Clinton received 3 million more votes than Trump (66 million versus 63 million, respectively) in the November election.

The United State is a bifurcated nation before and after the election. The reason that Trump received the top job is that he comically berated and insulted all other candidates into submission and one-half of the country enjoys this no-holds-barred approach to politics. Trump should be given a chance since he won fair and square dominating the electoral college vote.

The democratic-leaning media (CNN, MSNBC, ABC, CBS, NBC, New York Times, Huffington Post, Facebook, etc…) is touting the narrative about Trump’s low approval rating to destroy his credibility before he even enters office. It is a despicable and unpatriotic act since people are placing their political party affiliation ahead of what is good for the country. Everyone needs to give the orange-headed showman a few months before anyone begins to judge his presidency.

Shamefully, 58 democrats are boycotting Friday’s inauguration saying Trump is unpresidential. Americans are sick of this type of childish behavior. People want to see Washington, DC, function better so the democrats should be careful. By purposefully trying to hurt Trump before he takes the oath of office and acting like spoiled babies and whiners, the Democratic Party may actually be hurting themselves. The baby games continue inside the beltway.

Americans are realizing how they were sold down the river over the last 40 years by the demopublicans and republocrats. Both parties have created the country’s mess one is as guilty as the other. The wealthy elite class in concert with the political establishment, and of course the central bankers, collude in a greedy Keynesian money-printing scheme over the last eight years to enrich themselves after the 2008-2009 financial crisis. The huddled masses are becoming more educated concerning the ongoing games of the privileged class. The fastest growing business in America going forward will be pop-up pitchfork and torch stores.