Sunday, September 18, 2016

Quarterly Reminder September 2016

It's time for the Quarterly Reminder,

The KE Stone blogs (Keybot the Quant; Keystone Speculator; Keystone the Scribe) generate huge international interest with thousands of daily followers and continue to increase but the support does not match the strong interest. At the same time, ad blocking software continues to destroy free original content on the internet.

Daily updates to the Keystone the Scribe website are suspended but the Daily Chronology of Global Markets and World Economics monthly publications will continue through Amazon. The September Daily Chronology 2016-09 will be published and available internationally on 9/1/16. The October release is tentatively set for a 11/5/16 publication date.

The Keybot the Quant algorithm updates are suspended. Ditto all the charts and valuable technical analysis on the Keystone Speculator site. The support for the sites do not match the thousands of daily users. Proceeds from the blogs go to charity.

Saturday, September 17, 2016

SUNDAY 9/18/16; German Elections

The New York City bombing is a major focus of Americans as they wake on Sunday morning. Authorities are determining what links, if any, exist between the New York City bomb and the bomb found a couple blocks away and the bomb that detonated in New Jersey.

Elections are taking place in Berlin, Germany’s capital, and Chancellor Merkel may be dealt another blow as the CDU (Christian Democrat Union) may lose more ground to the anti-immigration AfD (Alternative fur (for) Deutschland) Party. Merkel’s popularity continues to suffer after the terrorist attacks in Europe and sexual assaults by migrants.

Merkel’s open door policy of allowing immigrants to freely enter Germany is very unpopular. Some immigrants, from a different cultural background, are sexually groping and raping German women. The migrants will also burden government budgets. Election results, that determine who governs Berlin over the next five years, are expected later this evening.

Global 10-year yields are; Brazil 12.23%, India 6.87%, Mexico 6.03%, Portugal 3.39%, New Zealand 2.54%, Australia 2.10%, Singapore 1.84%, US 1.69%, South Korea 1.57%, Italy 1.34%, Canada 1.19%, Spain 1.07%, Hong Kong 0.92%, UK 0.87%, France 0.30%, Netherlands 0.11%, Germany 0.00%, Japan -0.05%, Switzerland -0.45%.

The German 10-year yield moves up and out of negative territory this week. The US-German 10-year yield spread is 169 bips. The rise in the Portugal yields is a canary in the sick global economic coal mine. The Portugal 10-year yield was sub 3% a couple weeks ago. The German-Portugal 10-year yield spread is 339 basis points and widening. As the US Apollo 13 astronauts said in 1970 on their trip to the moon, “Houston, we have a problem.” The sick banks in the peripheral nations of Italy, Spain and Portugal, and especially Germany’s Deutsche Bank, may bring the entire global economy and markets to their knees. Pay attention to the Portugal 10-year yield.

Euro 1.1155. Dollar/yen 102.28. Pound 1.3001. US dollar index 96.02. WTIC oil 43.19. Brent oil 45.77. Natural gas 2.96. Gold 1313. Silver 18.84. Copper 2.16.

US Treasury yields will begin the new week of trading at; 2-year 0.76%, 5-year 1.20%, 10-year 1.69%, 30-year 2.45%. The 2-10 spread is 93 basis points up from the 70’s one month ago reflecting a steeper yield curve. The 5-30 spread is 125 bips.

SATURDAY 9/17/16; US Airstrikes Kill Syrian Troops; Bombs Detonate in New Jersey and New York City

SPX 2139. INDU 18124. COMPQ 5245. RUT 1225. NIKK 16519. SPASX200 5297. KOSPI 1999. SSEC 3003. HSI 23336. BSE 28599. DAX 10276. CAC 4332. FTSE 6710. MIB 16192. IBEX 8633. PSI 4471.

Typhoon Meranti is wreaking havoc in southeast China. Typhoon Malakas is hitting northern Taiwan and may spin off to the north missing the China mainland but heading for Japan. Fortunately, loss of life is minimal but damage to infrastructure and electric lines in Taiwan and China is extensive.

The ceasefire is shaky in Syria. Sporadic gun and mortar fire continues. Wounded people continue to show up at hospitals. The current ceasefire is fragile but holding.

Over 250K demonstrators take to the streets in Germany to protest trade deals with the United States and Canada. Protectionism increases around the world reminiscent of the 1930’s Great Depression. German elections are on tap tomorrow in the capital city of Berlin.

Protests grow more violent in Venezuela as citizens continue to demonstrate against rampant shortages in food, water and medical supplies. The government arrests individuals that are buying too much food (if the food is available). Hyperinflation is occurring with a dozen eggs now costing $150. The IMF says inflation is rising at 720% this year (if you purchased a food item for $10 in January, it now costs $82.

The United States will likely face hyperinflation in the 2020’s due to the many years of obscene Keynesian spending by the Federal Reserve. For now, a disinflationary and deflationary funk remains in the States since the Fed’s easy money is sloshing around in banks and only used to increase dividends and buyback programs which pump stock prices higher to make the wealthy filthy rich. There is no ‘velocity of money’.

The Fed’s years of stimulus spending was expected to boost capital equipment purchases and jobs. This behavior creates the velocity of money, a multiplier effect, where businesses thrive and jobs grow as loans increase. Many support businesses such as restaurants, print shops, dry cleaners are open and expand as the velocity of money takes over creating strong economic activity. This has not occurred and instead the wealthy simply use the Fed’s easy money to pump stock prices higher. This is why Wall Street has become filthy rich over the last eight years at the expense of Main Street; and the Federal Reserve continues down this path.

Once inflation kicks in, the velocity of money will increase and quickly become out of control leading to excessive inflation and hyperinflation in future years. The central bankers are very sick individuals only looking out for the elite class in America and of course themselves since they will be paid off with lucrative speaking engagements once they leave the Federal Reserve. The United States has become very corrupt in recent years.

The Zika virus continues expanding in Miami Beach, Florida. Nearly 100 non-travel cases of Zika are reported in the area. The republicans and democrats in the US Congress cannot agree on a funding bill to combat the terrible virus that causes birth defects and other neurological problems. Washington, DC, remains dysfunctional under demopublican and republocrat control.

Customers of Wells Fargo are preparing a class action lawsuit against the bank. Thousands of employees were fired due to creating false accounts using customer’s information to meet quotas set by management. Billionaire Warren Buffett is a major shareholder in WFC and has banked huge profits as the nefarious behavior took place in recent years. It is mind-boggling that many employees do not know the difference between right and wrong. Society is lost without a moral compass to lead the way. The bread and circus days are upon us.

Uber launches its driverless car program in Pittsburgh, Pennsylvania, USA. Pittsburgh is called the ‘double black diamond’ for autonomous cars (a black diamond ski slope is a dangerous run only attempted by skilled skiers; a double black diamond ski slope should only be attempted by expert skiers with many years of experience in the sport). The idea is that if self-driving cars can maneuver Pittsburgh’s many bridges, tunnels, windy roads and unusual terrain, then autonomous cars can function anywhere.

The Uber vehicles quickly experience two malfunctions. One when it was side by side two lanes of slow traffic and another when a car suddenly changed lanes in front of the driverless Uber vehicle. An Uber employee is in the car and ready to take over if problems arise so there is no danger to citizens or other drivers. Autonomous cars are likely many years away from becoming a mainstay in American transportation; far longer than industry cheerleaders will admit.

A leak in an Alabama gasoline pipeline is causing disruptions to supplies in the southern United States and East Coast. Gasoline prices will increase in these areas this weekend. Gasoline tanker ships are sailing towards New York to alleviate the oncoming supply disruptions. The pipeline repairs will not be completed until next week.

The Fox business block commentators remain bullish on the stock market proclaiming that NFLX will rise +50% over the next two years, GPRO up 20% over the next year and EWG (Germany ETF) up +15% over the next year. Other pundits say NXPI and XLV are great plays going forward.

US presidential candidates libertarian Johnson and green party Stein will not appear in the first debate on 9/26/16 since they did not reach the 15% threshold requirement in the polls. Of course they did not. The 15% number is set by the demopublican and republocrat establishment. The Washington, DC, bureaucrats and US media controls the narrative and wants to maintain the two-party republican and democrat system.

The press denigrates Johnson and Stein making them look foolish only providing media exposure to the candidates when they make a mistake. This is America in 2016. Interestingly, over 50% of Americans are libertarian and they do not even know it; they stand for fiscal conservatism and are liberal on social issues. The demopublicans and republocrats crush any opposition to the two-party system. Washington, DC, is a corrupt cesspool of crooked politicians and so-called journalists that are on the take spinning the news to benefit one party or the other.

The POTUS election is only 52 days away. The averaging of all polls places Clinton at 42%, Trump 41%, Johnson 9%, Stein 4% and undecided 4%. Sadly for America, whichever idiot wins, the democratic scandal-ridden liar in the pantsuit Clinton, or the republican orange-headed bloviating carnival barker Trump, will not receive a mandate. Over one-half of the country will be unhappy with the election results no matter who wins which indicates trouble for America going forward.

All empires and dynasties throughout history have lasted from 200 to 250 years. This is true for the Greek, British and Roman empires as well as the Chinese dynasties. Interestingly, the US is at the 240-year mark from its inception in 1776.

Boom. In New Jersey, a bomb detonates along the running route of the Seaside Semper Five race, a charity run for the Marines. The start of the race was delayed so the bomb, timed to detonate when runners were passing by, did not injure anyone. The incident is reminiscent of the Boston Marathon bombing terrorist attack on 5/15/13. Authorities are investigating.

The Middle East mess worsens. US airstrikes mistakenly kill 83 Syrian troops and wound 120 near the  Deir Airport in eastern Syria. The United States releases a statement regretting the accident and says ISIS militants were the presumed target. Russia and the United States are fighting a proxy war in Syria. President Putin entered Syria to defend Assad. The US is backing rebels that are trying to oust Assad.

Both Russia and the US are combating the ISIS Islamic radicals in Syria, however, at the same time, a proxy war is occurring between the two superpowers. It does not help that President Obama and President Putin dislike each other and rarely talk. The incident quickly escalates when Russia accuses the United States of siding with the ISIS Islamic radicals. Russia calls for a UN emergency meeting.

A war of words occurs between US Ambassador Samantha Powers and Russia UN representative Vitaly Churkin. Both are sniping at each other using inflammatory rhetoric. Putin continues to play three-dimensional chess, after all he is ex-KGB (Komitet gosudarstvennoy bezopasnosti; the security agency of the old Soviet Union comparable to the FBI and CIA in the States), while Obama plays checkers. The UN meeting concludes with no statement.

As the Middle East unravels, President Obama is campaigning for Hillary Clinton at a Congressional Black Caucus event in Washington, DC. The president tells the black community that it will be a personal insult to him and his legacy if black voters did not support Clinton in the upcoming election. Many Americans would find it offensive that the president tells people how to vote based on their skin color. The president says his progress over the last eight years is on the line depending on the upcoming election.

What progress? The Middle East and world is in terrible shape. Foreign leaders such as Russia and China use the US as a door mat; few countries show respect to President Obama due to his timid style. The president’s leading-from-behind strategy has created chaos around the world with increased terrorism both domestically and abroad. The West’s failure to effectively fight the ISIS Islamic radicals in Syria and Iraq has led to a mass human migration to Europe not seen since WW II. A new modern-day Holy War has begun pitting the ISIS Muslim militants against Christians and Jews. The 1400 years of Shiite-Sunni hatred festers with Arab on Arab relations in the worst shape in decades. And the proxy war between Russia and the US in Syria continues escalating this evening.

In the US, the economy remains weak and stagnant with only the wealthy benefiting over the last eight years due to the Keynesian spending by the Federal Reserve, of which Fed Chair Yellen was appointed by President Obama. The wealthy elite class takes care of their own. The president’s legacy is one of shame; he may have meant well and did what he thought was best but his ideas are an obvious failure. President Obama has created major problems for the next president and the country going forward.

The Syria ceasefire is in jeopardy as Russia-US relations are strained. Humanitarian aid is unable to reach many citizens in Aleppo due to resistance from Syrian troops. The coming hours are critical to see if calmer heads prevail or if the powder keg in Syria explodes.

Boom. In the Chelsea District of New York, a bomb detonates injuring 29 people one very seriously. A second bomb device is discovered a couple blocks away but did not detonate. The bomb is a pressure cooker device attached to wires and a cell phone. A four-block area is cordoned off in New York City as investigators begin to review surveillance footage from businesses.

Mayor Bill de Blasio proclaims that he “does not see a link to terrorism.” That is stupid. If a bomb detonates and injures people that is obviously terrorism. The political class in America has provided the worst leadership for citizens in decades; the inmates are running the asylum.

More mayhem. A deranged Muslim sympathizer goes on a stabbing rampage in a Minnesota mall. The slasher yells, “Allahu Akbar (God is Great!)!” as he stabs the victims. An off-duty police officer shoots the deranged man dead. It is great that law-abiding citizens are allowed to carry concealed weapons and can step up to save lives. The stabbing victims survive.

Thursday, September 15, 2016

FRIDAY 9/16/16; DB (Deutsche Bank) Crashes -10%; Italian Banks Collapse; German Bund Yield Turns Negative; EU Summit; OpEx Quadruple Witching; CPI (Consumer Price Index); Consumer Sentiment; MIB Mini-Crashes -2.4%; US Stocks Selloff; European Indexes Collapse this Week; AAPL (Apple) Carries US Major Indexes Higher this Week

Today is the peak in the Harvest moon at 3:07 PM EST and also a prenumbral eclipse. The full moon will appear very bright with the orange tint. There is 12 hours of light from the sun and 12 hours of light from the moon today. The stock market is typically bullish moving through the full moon each month. Earthquake activity may increase around the world due to the peak inflection of gravitational forces between the moon and the Earth.

Today is options expiration in the States a Quadruple Witching with the expiration of stock index futures, stock index options, stock options and single stock futures. Trading volume will be more robust on the opening and closing bells.

Australia and Asia trading begins on an optimistic note with the SPASX200 and NIKK indexes floating higher. Markets in South Korea, China, Hong Kong and Taiwan are closed for holidays so the session should trade quietly.

Energy stocks are recovering in Australia. Japanese banks are recovering from this week’s selling pressure. SMFG +2.2%. Mitsubishi UFJ +2.7%. Mizuho Financial +1.7%. Samsung begins the major recall of the Galaxy Note 7 phone. Typhoon Meranti smacks China.

The dollar/yen pair is sticky at 102. The US dollar index moves through the 95.34-95.50 range. Euro 1.1235. Aussie dollar remains above 0.75.

The NIKK ends the session up +0.7% to 16519. The ASX 200 finishes up +1.1% to 5297. India stocks continue trading with the Nifty up +0.9%. BSE +1.1%. The rumor mill says India may devalue the rupee.

For the week, the Nikkei Index loses -2.6%. The ASX 200 drops -0.8% this week. KOSPI -1.9%. The Shanghai Index loses -2.5% this week. The Hang Seng Index drops -3.2%. Asia trading is ugly this week. Traders should be glad the holidays stopped the indexes from falling further in South Korea, China and Hong Kong.

The Syria War cease fire is holding although there is sporadic gun and mortar fire. The United Nations (UN) says the Syria government troops are blocking aid trying to reach shell-shocked citizens in Aleppo.

At 3 AM (8 AM London; 9 AM Frankfurt), European indexes begin trading negatively. DB plummets -8%. The European Banking Index is down -1.5%. Italian banks are in collapse. Germany’s Deutsche Bank is the worst performer in European trading. The US Department of Justice (DOJ) has levied a $14 billion fine to settle Deutsche Bank’s nefarious behavior in selling mortgage securities.

Other banks fear that they face big fines and claims from the DOJ. RBS collapses -4.3%. Commerzbank -1.8%. UBS tanks -2.3%. BCS drops -2.1%. The banking sector is ugly. Deutsche Bank is the major worry this year that it will create global contagion and potentially bring down global markets. How ironic that DB is in collapse on the eight-year anniversary of the Lehman Brothers bankruptcy that accelerated the 2008-2009 financial crisis.

Deutsche Bank says it will not pay the $14 billion settlement fine. DB executives are in shock since the expectation was for a fine of $4 billion or lower. DB crashes more than -7% since the troubled bank will need to raise capital for any settlement over $4 billion. Deutsche Bank only has a market cap of $20 billion. Deutsche has lost one-half its value this year.

DB expected a large number from the DOJ since these claims are negotiated lower, however, the $14 billion number is extremely high causing angst and contagion with other European banks. Troubled Italian bank Monte dei Paschi, BMPS, plummets -5%. To reach a fine of $4 billion or lower, DB expected an intial DOJ fine in the $5 to $7 billion range which would be negotiated lower; the $14 billion number blows this thinking out of the water.

Usually the bank claim negotiations take place behind closed doors and are not played out in public. Any settlement above $4 billion is a problem for Deutsche Bank. The DB collapse is extremely serious and fears of global contagion are real. European officials and regulators may push for a delay in the Deutsche Bank fine negotiations. One solution to the dilemma is stretching the fine payment over a multi-year period to make it more palatable for DB. However, this would only guarantee sick European banks for many years forward. All European banks are suffering from a scarcity of capital.

DB -7.1%. BMPS -4.8%. The European Banking Index -1.4%. The German 10-year bund yield turns negative to -0.006% as traders seek safety.

European Union (EU) leaders meet in Bratislava, Slovakia. The leaders represent 27 nations down from the 28 when Britain was included. Interestingly, Britain has not yet invoked Article 50 to begin the two-year deadline process to exit the EU so technically they remain in the EU. This is the first EU meeting without Britain in over 40 years.

DAX -0.4%. CAC -0.2%. FTSE -0.2%. SMI -0.2%. US futures remain negative overnight. S&P -4. Dow -30. Nasdaq -7. VIX 16.39.

Euro 1.1231. Euro/yen 114.54. Dollar/yen 101.98. Pound 1.3196. Euro/pound 0.8512. Mexican peso 19.3180. Canadian dollar 1.3174. Dollar/yuan 6.6747. Aussie dollar 0.7503.

WTIC oil is down -1.1% to 43.44. Brent oil loses -1.1% to 46.08. Natty gas is down -0.9% to 2.90. Gold 1314. Silver 19.01. Copper is up +0.3% to 2.1655.

US Treasury yields are; 2-year 0.73%, 5-year 1.17%, 10-year 1.68%, 30-year 2.45%. The 2-10 spread is 95 basis points. The 5-30 spread is 128 bips.

At 4 AM EST (9 AM London), DAX -0.5%. CAC -0.4%. FTSE -0.3%. Fiat Chrysler collapses more than -2% due to the large 1.9 million vehicle airbag recall. Euro 1.1237. Dollar/yen 101.94. Pound 1.3199.
S&P -5. Dow -40. Nasdaq -10. VIX 16.48.

At 4:18 AM EST (9:18 AM London; 10:18 AM Milan, Paris and Frankfurt), Monte dei Paschi bank crashes -7.3% limit down and is halted from Milan trading.

At 4:34 AM EST, DAX -0.6%. CAC -0.6%. FTSE -0.3%. The peripheral nations are smacked hard since the banks are sick in these nations. Italy’s MIB -1.3%. Spain’s IBEX -0.8%. Portugal’s PSI tumbles -1.3% to 4494. Monte dei Paschi remains halted. CS -5%. RBS -3.5%. DB is down an ominous -6.66%.

S&P -7. Dow -51. Nasdaq -13. VIX 16.60. Euro 1.1234. Dollar/yen 102.00. Pound 1.3206. Aussie dollar 0.7501. Oil and metals are steady. WTIC 43.48. Brent 46.12. Gold 1315. Silver 19.04. Copper slips negative at 2.1555.

At 5:30 AM EST, S&P -6. Dow -41. Nasdaq -10. VIX 16.54.

Treasury yields are; 2-year 0.73%, 5-year 1.17%, 10-year 1.67%, 30-year 2.44%. German bund -0.007%. Japan 10-year yield -0.034%.

Enthusiasm for the iPhone 7 continues with a line forming in the early morning hours at the New York flagship store. Apple plays games with inventory to maintain tight supplies creating greater interest in the new smartphones. AAPL stock is up +12% this week and may add to those gains in US trading today.

At 6 AM EST, European indexes are recovering off the lows. DAX -0.3%. DB is exploring its lows for the session down nearly -8%. European Banking Index -1.7%. CS -5.2%. RBS -4.2%. Monte dei Paschi remains halted from trading. CAC -0.2%. The FTSE turns positive +0.1%.

S&P -5. Dow -35. Nasdaq -8. VIX 16.49. WTIC oil drops -1.4% to 43.31 unable to catch a bid. Brent oil is down -1.5% to 45.90 losing the 46 level. Natty 2.90. Gold 1314. Silver 19.00. Copper is down -0.1% to 2.1580.

At 6:30 AM EST, European stocks and US futures are dropping. DAX -1%. CAC -1%. FTSE -0.2%. The MIB tumbles -1.7% lower to 16306. The IBEX is down -0.7% to 8660. Portugal’s PSI is down -1.1% to 4502. DB -7.5%. RBS -4.3%. CS -5.2%. Monte dei Paschi begin trading again crashing -7.1%.

Euro 1.1226. Dollar/yen 101.84. Pound 1.3170. Canadian dollar 1.3207. Aussie dollar 0.7496. USD 95.44. WTIC oil 43.25. Brent 45.82. Natty 2.89.

S&P -11. Dow -85. Nasdaq -20. Russell 2000 index futures -7. VIX 16.90.

Treasury yields are; 2-year 0.73%, 5-year 1.16%, 10-year 1.67%, 30-year 2.43%. German bund -0.017%. Japan 10-year yield -0.034%. Russia’s central bank lowers its key rate to 10% as expected.

At 7 AM, S&P -10. Dow -75. Nasdaq -16. VIX 16.82. DAX -1.3%. CAC -1.3%. FTSE -0.3%. DB -7.7%. WTIC 43.20. Brent 45.79.

Treasury yields are; 2-year 0.72%, 5-year 1.16%, 10-year 1.66%, 30-year 2.43%.

DAX -1.4%. CAC -1.1%. FTSE -0.5%. MIB -2%. IBEX -1%. PSI -1.9%. SMI -0.8%. Germany, Italy and Portugal lead lower due to their sick banks. DB is exploring the day’s lows down -8.2%.

TWTR gains +3.1% after the successful launch of its NFL football game streaming last evening. INTC gains +3.8% on news that revenue targets are increased and PC sales are strong. GPRO gains +3.8% on an upgrade. DEPO leaps +11%. NVAX crashes -86% after last evening’s disappointing news on drug trials.

XOM drops -1% on news that New York Attorney General Schneiderman is investigating Exxon over its accounting methods for valuing assets. C is down -0.8% on a GS downgrade. LULU is upgraded by Susquehanna.

India stocks end the day on a positive note. The BSE gains +0.7% to 28599 a point shy of 28.6K. For the week, the BSE loses -0.7%.

Minutes before the CPI data, S&P -4. Dow -31. Nasdaq -6. VIX 16.48.

At 8:30 AM EST, the CPI is up +0.2% month-on-month besting the +0.1% expected and above the prior 0%. A tiny whiff of inflation appears. Year-on-year is up +1.1% versus the prior +0.8%. Less food and energy is up +0.3% versus the +0.2% expected and above the prior +0.1%. Year-on-year is up +2.3% above the prior +2.2%. Yields and the US dollar index will rise on the slight hint of inflation.

S&P -8. Dow -64. Nasdaq -14. VIX 16.61. DAX -1.3%. WTIC 43.10. Brent 45.75. Euro 1.1210. Dollar/yen 102.06. Pound 1.3158. USD 95.61.

Treasury yields pop higher after the data (lower prices higher yields); 2-year 0.74%, 5-year 1.19%, 10-year 1.69%, 30-year 2.45%. German bund is +0.007% back to the positive side. Japan 10-year yield -0.033%.

At 9 AM, S&P -4. Dow -30. Nasdaq turns a hair positive up +1 due to the joy in Intel and other tech stocks. DAX -1.1%. CAC -0.8%. FTSE -0.2%. Euro is under 1.12 to 1.1183. Dollar/yen 102.08. Pound 1.3131. European Banking Index -1.7%. DB -8.5%.

WTIC oil 42.94. Brent 45.60. Gold 1311. Silver 18.94. Copper 2.1545.

At 9:30 AM EST, US stocks begin trading on the negative side. After a few minutes of trading, the SPX is down 12 points, -0.5%, to 2135. The Dow loses 100 points, -0.6%, to 18111. The Nasdaq Composite is down 19 points, -0.4%, to 5230. The RUT drops 4 points, -0.3%, to 1222. The 50-day MA is 1225. VIX 16.92.

Energy is a drag with oil prices at one-month lows. WTIC oil loses -2.3% to 42.90. Brent oil is down -2% to 45.66. XLE -1.6%. XOM -0.5%. CVX -1.2%. NOV -1.4%. XOP -1.8%. OIS -2.2%. USO -2%. APC -1.1%. FCX -2.2%.

Banks are battered due to Deutsche Bank’s troubles. DB crashes -9%. CS -4.6%. UniCredit -4.6%. BCS -2.6%. US banks are sad. XLF -1.4%. C -1.3%. BAC -0.6%. WFC -1.3%. Regional banks are slapped. KRE -1.3%. ZION -1.5%. RF -1.4%.

Tech is a bright spot with INTC up +3.8%. WDC gains +3.5% due to the strong PC sales reported by Intel. GPRO is up +4.5%. SOX drops -0.6% to 797 sitting on its 20-day MA support for a bounce or die decision. MU +3.3%. STX +2%. QCOM +1.2%. RBC Capital analyst Mark Mahaney assigns a 1000 price target for Amazon. AMZN gains +0.8% to 776.

AAPL is up +0.2% near 116 enjoying its big rally this week that carried the broad indexes higher. BABA -0.2%. YHOO -0.3%. STZ 1.6%. MNST -0.7%. DEPO -9%. NVAX -85%. EVBG, a new IPO, comes to market and Everbridge rises a smidge +0.4% in its debut.

Fundstrat strategist Tom Lee remains an uber bull predicting that stocks will rally from +6% to +8% by year end. Wells Capital strategist Jim Paulsen says financials will lead stock market gains over the next two years. Paulsen says potential Fed rate increases will be perceived as a positive. He also expects earnings to rise which will support stocks. Paulsen favors materials, technology, energy and banks and suggests reducing exposure in utilities (utilities, UTIL, are already down -10% off the highs so this call was needed 2-1/2 months ago).

At 10 AM EST, Consumer Sentiment is 89.8 missing the 90.8 expected and matching the prior 89.8. The recent trend is for sentiment to print sub 90. The lack of consumer confidence relates to the weak retail sales reported yesterday.

Treasury yields are; 2-year 0.75%, 5-year 1.19%, 10-year 1.69%, 30-year 2.44%.

At 10:16 AM, stocks are sinking. The S&P 500 is down 15 points, -0.7%, to 2132. The Dow Industrials are down 110 points, -0.6%, to 18103. The Nasdaq Composite is down 22 points, -0.4%, to 5227 sitting on its 20-day MA at 5225 making a bounce or die decision. The Russell 2000 small caps are down 7 points, -0.6%, to 1220.

VIX is at 16.79 fighting at the 200-day MA at 16.73. Market bulls win below 16.73. Bears win above 16.73. The bears are growling this morning. WTIC 42.86. Brent 45.68. AAPL slips negative down -0.5%.
At 10:38 AM EST (3:38 PM London; 4:38 PM Frankfurt), DAX -1.6%. CAC -1.2%. FTSE -0.3%. MIB -2.2%. IBEX -1.2%. PSI -1.6%. Euro 1.1165. Dollar/yen 102.24. Pound 1.3094. USD 95.90.

 European indexes finish the session in a bloodbath. The DAX drops 155 points, -1.5%, to 10276. The CAC drops -0.9% to 4332. The FTSE loses -0.3% to 6710. The FTSE held up the best of the major European indexes as the fall in the pound helps support stocks. Italy’s MIB mini-crashes -2.4% to 16192.

The IBEX finishes down -1% to 8633 using the 50-day MA at 8629 as support. The 200-day MA is 8728. Price will bounce or die from the 50-day on Monday. Spain bears win under 8629 and bulls win above 8728. The PSI dumps -1.8% to 4471. Portugal stocks are at lows not seen since early July.

DB is crushed -8.5%. The Deutsche Bank problems need remedied quickly since global contagion hangs in the balance. RBS finishes down -4.6%. CS -4.1%. SocGen -2.8%. BCS -2.5%.

For the week, the DAX drops -2.8%. The CAC plummets -3.5% and loses its 200-week MA support at 4349. FTSE -1%. MIB -5.6%. IBEX -4.3%. Portugal’s PSI mini-crashes -4.8% this week. The peripheral nations Italy, Spain and Portugal are punished severely due to the weak banks.

The SPX is down 12 points to 2135. The Dow is down 100 points at 18113. The Nasdaq loses 18 points at 5231. VIX 16.44. Euro 1.1161. Dollar/yen 102.19. Pound 1.3082. The Mexican peso continues to weaken to 19.691 on its way to 20. The peso is down -12% against the US dollar this year. WTIC 43.25. Natty 2.91. TRAN -0.5%.

At 1 PM, US stocks remain weak. The BHI Oil Rig Count is up 2 rigs to 416 this week. The oil rig count is up 11 of the last 12 rigs creating more supply which will keep a lid on prices. WTIC oil continues to trade soft down -2% at 42.95.

At 2:15 PM, SPX 2135. INDU 18107. COMPQ 5234. RUT 1221. VIX 16.21.

LGF soars +5.6%. ORCL tanks -4.7%.Sugar is sweet gaining +6.2%. Corn and gasoline are each up +2%. JJG +2.2%.

Euro 1.1153. Euro/yen 114.23. Dollar/yen 102.41. Pound 1.3017. Euro/pound 0.8568. Mexican peso 19.6919. Canadian dollar 1.3217. Dollar/yuan 6.6747.

WTIC oil is down -2.3% to 42.91. Brent oil is down -1.8% at 45.76. Natty 2.95. Gold 1310. Silver 18.85. Copper 2.16.

Treasury yields are; 2-year 0.76%, 5-year 1.20%, 10-year 1.69%, 30-year 2.45%.

At 3 PM, DB crashes -9.6% which will likely add to further weakness in the troubled bank in European trading come Monday. Wells Fargo receives further beatings; WFC -1.8%.

The bullish prognosticators continue to tout more stock market highs for this year regardless of whether the markets are moving up or down in the near term. Oppenheimer technical analyst Ari Wald targets SPX 2250 for this year and says the historic behavior in the VIX suggest the SPX will gain +8% over the next six months (which targets SPX 2310).

US equities end the day in a sea of red but well off the lows. The S&P 500 finishes down 8 points, -0.4%, to 2139. The SPX uses the 100-day MA at 2122 as support all week long. A breach of 2122 will obviously lead to trouble ahead for the stock market. The Dow drops 89 points, -0.5%, to 18124. The INDU 100-day MA support is at 18093.

The Nasdaq Composite loses 5 points, -0.1%, to 5245 bouncing off its 20-day MA support at 5226. The RUT loses 2 points, -0.2%, to 1225. The Russell 2000 small caps end exactly at the 50-day MA support/resistance at 1225 and will bounce or die from this level on Monday.

For the week, the major indexes eke out small gains. SPX gains +0.5%, INDU +0.2%, COMPQ gains +2.3% and RUT +0.5%. The impact of Apple’s huge rally on the Nasdaq Composite is obvious. The Nasdaq 100, NDX, jumps +2.9% this week driven higher by the AAPL gains. The NDX is a hair away from all-time record highs.

The sectors finish mixed this week. Tech is the standout winner driven higher by Apple. XLK gains +2.7%. Chips are joyous. The SOX gains +4.3% at 802. INTC catapults +6.3% higher to new record highs.

Biotech prints big gains on the week with IBB up +4.7% which pumps the Nasdaq indexes higher. Utilities are a big winner with XLU gaining +2.5% recovering from a seven-week crash.

Healthcare, XLV, is up +1.2% this week. Retail stocks print gains on the week despite the weak retail sales data on Thursday. XLP +0.8%. XLY +0.5%. XRT +0.9%. RTH +0.1%. WMT leads the way higher gaining +3.7% this week.

Energy stocks sink this week as oil retreats. XLE -2.6%. Banks, XLF, sink -1.3% this week. WFC crashes -7% due to the ongoing scandal at the bank. KRE -1.6%. XLB -0.9%. XLI loses -0.4% this week. Homebuilders crumble this week with XHB down -1.2%.

The high-flying AGMANHASFUN (“A G-Man Has Fun”) stocks, that have carried the broad indexes higher over the last couple years, remain in favor carrying the stock market higher especially the Apple euphoria. GOOGL (Alphabet) +1.2%. GE -0.7%. MSFT gains +1.9% near record highs. AAPL leaps +11.4% higher a phenomenal week on robust iPhone 7 sales. NFLX +3.1%. HD -1.3%. AMZN jumps +2.4% closing the week at record highs. SBUX -1.1%. FB +1.6%. UA +1.4%. NKE -0.3%.

The skunks at the garden party are General Electric, Home Depot, Starbucks and Nike. Stocks run higher on the technology joy but sink due to weak industrials and housing stocks. Thus, virtual stocks rise (tech) while the physical nuts and bolts stocks, that make a country strong and prosperous for the long term, sink. What does this tell you about the markets and economy in 2016?

WTIC oil retreats -5% to 43.62 this week. Brent oil is down -4%. Natural gas is a winner exploding +5.4% higher to 2.95. Gold drops -1.8% to 1310. Silver is down -2.6% to 18.86. Copper floats +3.2% higher which helps create buoyancy in the broad stock indexes. The 10-year yield, TNX, gains +1.7% to 1.70% with a high at 1.75%. Investors avoid notes and bonds this week (lower prices higher yields).

After the closing bell, the TIC (Treasury International Capital) data indicates that purchases of long-term Treasuries far exceeds estimates this month.

There are several key developments occurring this week. Market participants believe that the global central bankers are running out of  ammunition after eight years of obscene Keynesian stimulus programs. Global yield curves steepen. Global stocks have lost over $2 trillion in market cap over the last week (mainly Europe).

Trump rises in the polls which creates angst in markets. Trump is an unknown entity in relation to the economy and stocks. The numbers in Trump’s economic plan do not add up. Trump promises tax cuts which is an easy way to gain votes. Clinton is more of a known entity since she is in the back pocket of the large investment banks and will perform their bidding if elected.

Apple is the standout this week with AAPL gaining +11.4% driving the Dow Industrials and Nasdaq indexes higher. Apple creates nearly 90 points of gains in the Dow Jones Industrials during the week and accounts for about 7 of the 11 points of gains in the S&P 500. The stock market rally occurs this week in the States due to Apple iPhone 7 joy. 

Wednesday, September 14, 2016

THURSDAY 9/15/16; BOE Policy Decision; PPI (Producer Price Index); Retail Sales; Philly Fed Survey; Empire State Mfg Survey; Industrial Production; Business Inventories; US Stocks Rally; AAPL +3%; ORCL

US futures are marginally higher. S&P +3. Dow +23. Nasdaq +5. Markets are closed for  holidays in China, Taiwan and South Korea. Taiwan is smacked by Typhoon Meranti that kills one person and injures 40 others. Electric lines are down. The typhoon moves on towards mainland China and is making landfall in the coming hours. Global traders are focused on the critical Federal Reserve and BOJ policy decisions less than one week away on 9/21/16.

WTIC oil 43.73. Brent oil 45.85. Natty 2.90. Gold 1326. Silver 19.03. Copper 2.15.

Euro 1.1245. Euro/yen 115.16. Dollar/yen 102.41. Pound 1.3251. Euro/pound 0.8486. Mexican peso 19.29. Canadian dollar 1.3198. Dollar/yuan 6.6747. Aussie dollar 0.7471.

US Treasury yields are; 2-year 0.76%, 5-year 1.21%, 10-year 1.70%, 30-year 2.45%. The 2-10 spread is 94 bips. German 10-year bund yield +0.25%. Japan 10-year yield -0.027%.

The Nikkei Index drops -0.8% to 16482 in the early going. The yen strengthens so Nissan drops -2.4%, Toyota is down -1.3% and Sony sinks -1.2%. The ASX 200 is down -0.2% to 5216. Aussie employment data is weaker than expected. Aussie dollar 0.7459. Energy stocks remain challenged. Santos -2.9%.

The NIKK ends the session down -1.3% to 16405. The SPASX200 ends up +0.2% to 5240. The HSI gains +0.6% to 23336. The Asia session is quiet with China and South Korea closed. Singapore and Malaysia trade lower. India trading continues with a negative tape. Nifty -0.1%.

At 3 AM (8 AM London), European indexes are off to a slightly negative start but stocks quickly reverse and stumble along the flat line. European new car sales rise +10% in August with Renault sales up +14.6% and Volkswagen up +6.3%. VW  loses market share in Europe every month over the last year due to the emissions scandal.

Monte dei Paschi bank, BMPS, is trading higher on the news that Marco Morelli is named the new CEO at the troubled Italian bank. Apple suppliers such as Dialog Semi, STMicro and Austria Microsystems trade higher on strong iPhone 7 sales but the joy fades as the session continues.

The British government approves the controversial $23 billion Hinkley nuclear power plant project in southwest England. French utility EDF (Electricite de France) will run the project that will take 10 years to construct. China is involved int he project. About 25K new jobs will be created to support the new plant during the next decade.

The Asia and European trading sessions are quiet ahead of the BOE policy decision and a deluge of economic data on tap in the States. UK 10-year gilt yield 0.93%.

DAX is flat. CAC is down -0.2%. FTSE -0.1%. S&P +2. Dow +15. Nasdaq +4. VIX 18.01. The Swiss National Bank keeps rates on hold. EUR-CHF is rising to 1.0956 and CHF-USD is falling to 1.0240 representing a weaker Swiss franc.

Euro 1.1222. Euro/yen 114.93. Dollar/yen 102.42. Pound 1.3217. Euro/pound 0.8491. Mexican peso is up to 19.3765 representing a weaker peso. The Mexican peso currency pair may move above 20 which would create global attention. The peso weakens as US republican presidential candidate Trump gains in the polls. Canadian dollar 1.3228. Dollar/yuan 6.6747. Aussie dollar 0.7452.

WTIC oil 43.68. Brent oil 46.05. Natty 2.88. Gold is down 4 bucks to 1319. Silver 18.98. Copper 2.1520.

US Treasury yields are; 2-year 0.76%, 5-year 1.21%, 10-year 1.71%, 30-year 2.46%.

At 4:06 AM EST, S&P +4. Dow +30. Nasdaq +7. VIX 17.84.

At 4:30 AM EST (9:30 AM London), UK August retail sales are up +5.9% year-on-year better than expected. Month-on-month is down -0.3% better than the -0.7% expected. Pound 1.3242.

S&P +2. Dow +8. Nasdaq +3. VIX 17.88. DAX -0.1%. CAC -0.3%. FTSE -0.1%. Euro 1.1233. Dollar/yen 102.42. Pound 1.3231. Canadian dollar 1.3216. The pound currency pair and Canadian dollar pair are at parity. Aussie dollar 0.7468.

WTIC oil 43.46. Brent oil 45.82. Natty 2.89. Gold 1320. Silver 19.01. Copper is up marginally to 2.16. The buoyancy in copper over the last two days helps support global stock markets.

US Treasury yields are; 2-year 0.75%, 5-year 1.21%, 10-year 1.71%, 30-year 2.47%.

At 5 AM EST, S&P +3. Dow +24. Nasdaq +9. VIX 17.94.

At 6:13 AM EST, S&P +6. Dow +48. Nasdaq +14. VIX 17.51. DAX +0.2%. CAC -0.1%. FTSE +0.1%. Euro 1.1240. Dollar/yen 102.40. Pound 1.32228. Aussie dollar 0.7475.

WTIC oil 43.90. Brent oil 46.31. Oil prices ramp higher taking futures higher. Gold 1321. Silver 19.05. Copper 2.15.

Treasury yields are; 2-year 0.75%, 5-year 1.20%, 10-year 1.70%, 30-year 2.46%.

At 6:53 AM EST, S&P +10. Dow +76. Nasdaq +20. VIX 17.28. WTIC 44.03. Brent 46.43. Natural gas is 2.88 with inventories on tap in 3-1/2 hours.

The Bank of England policy decision is imminent. The BOE is expected to hold rates and its policy measures steady after the strong stimulus provided after the Brexit vote. Governor Carney continues receiving criticism that he provided too much stimulus after Brexit especially with UK unemployment at a 5-year low.

At 7 AM EST (12 noon London), the BOE decides to keep the key rate at 0.25% and the asset purchase plan remains unchanged as expected. The members vote 9-0. The pound is unresponsive at 1.3237. UK gilt 0.91%. FTSE +0.3%. DAX +0.2%. CAC is flat.

The BOE will likely provide further stimulus at the November meeting. Euro 1.1242. Dollar/yen 102.42. Pound 1.3245. Euro/pound 0.8488.

S&P +9. Dow +73. Nasdaq +18. VIX 17.36. US futures are buoyant and traders are in a positive mood.
At 8:30 AM EST, very important economic data begins to hit the wires. PPI (Producer Price Index) is at 0% month-on-month less than the +0.1% expected but above the prior -0.4%. Inflation remains subdued. Year-on-year is at 0% compared to the prior -0.2%. Less food and energy is up +0.1% month-on-month matching consensus and above the prior -0.3%. Year-on-year is up +1.0% compared to the prior +0.7%. Less food, energy and trade is up +0.3% month-on-month compared to the prior 0%. Year-on-year is up +1.2% versus the prior +0.8%.

Retail Sales are a miss down -0.3% month-on-month versus the 0% expected and prior +0.1%. Less autos is down -0.1% month-on-month below the +0.3% expected and above the prior -0.4%. Less autos and gasoline is down -0.1% below the +0.4% expected and matching the prior -0.1%. The consumer is weak. Car sales and building materials and garden equipment are stalling. The Federal Reserve cannot hike rates with bleak retail sales.

The Philly Fed Business Outlook Survey is 12.8 better than the 2.0 expected and prior 2.0. The Empire State Mfg Survey is down -1.99 worse than the -1.00 expected but better than the prior -4.21.

Jobless Claims are up 1K to 260K less than the 265K expected. Companies have already cut staff to the bones and continue to hang on hoping the economy improves.

Fed Funds futures indicate only a 11% chance of a rate hike next Wednesday. The likelihood of a hike keeps dropping. It was 14% a couple hours ago. The weak retail sales indicate that the Fed will not hike rates. Fed Chair Yellen always intends to conduct live meetings where the possibility of a rate hike is on the table but the jury has returned the verdict this morning and a hike is not on the table. Only one in 10 market participants expect a hike next week.

Ford moves its small car production from Michigan to Mexico. SUV and light truck production will continue at the Michigan plants. The concern is that in another economic downturn or rise in gasoline prices, consumers may avoid buying SUV’s and light trucks and instead favor smaller cars which will benefit Mexico more than the United States. F is trading flat in the pre-market.

Today is the eight-year anniversary of the Lehman Brothers collapse that sunk the US market. Traders remember the LEH ticker symbol from late 2008. Lehman was overleveraged 40 to 1 so when the markets turned south the investment bank was wiped out creating global contagion and the 2008-2009 financial crisis worsened.

$2 trillion in market cap has been wiped out in global stock markets over the last week. The US stock market is set for a positive open.

At 9:15 AM, Industrial Production is down -0.4% versus the -0.2% expected and far below the prior revised-lower +0.6%. The Manufacturing component is down -0.4% under the -0.3% expected  and below the prior +0.4%. Capacity Utilization is 75.5% less than the 75.7% expected and below the prior 75.9%.

The full moon peaks for the month tomorrow at 3:07 PM EST. Stocks are typically buoyant moving through the full moon. Earthquake activity may increase since the gravitational forces between the moon and Earth are at an inflection point for the full moon.

At 9:30 AM EST, US stocks begin trading flat to marginally positive. VIX 17.39. All eyes are watching the critical 200-day MA at 16.72 since bulls win below and bears win above. Euro 1.1249. Dollar/yen 102.50. Pound 1.32. Mexican peso 19.2449. USD 95.40.

DAX -0.3%. CAC -0.5%. FTSE +0.3%. MIB -0.8%. IBEX -0.3%. PSI -0.4%.

WTIC 44.04. Brent 46.47. Natty 2.86. VIX 17.53. Gold is down 5 bucks to 1318. Silver 19.04. Copper 2.16.

Treasury yields are; 2-year 0.75%, 5-year 1.21%, 10-year 1.71%, 30-year 2.48%. The 5-30 spread is 127 bips widening for the last week representing a steepening yield curve. German bund 0.055%. Japan 10-year yield -0.047%.

AAPL continues a big run higher up +2.3% to 114.30. In only four days, Apple stock runs from 102.60 to nearly 115.00, an +12% increase. The boost comes as iPhone 7 sales are robust and the available inventory is sold out. This is a marketing trick that Apple performs for each product release.

The late Apple CRO Steve Jobs began this trick; he was a marketing genius. Apple purposely keeps inventory low so it will be sold out creating a buzz over the product. If you are on the fence concerning buying a new iPhone 7, would you be more likely to buy a new phone if you heard the iPhones are selling like hotcakes and sold out, or, if you  heard there is plenty of inventory remaining? Of course you would become caught up in the hype and go ahead with the purchase for fear of missing out.

Apple creates and keeps excitement levels high. It is very easy to manipulate human minds. Simply study the US presidential race where 80% of the media touts the democrat talking points for Clinton while the other 20% of media touts the republican line boosting Trump. At the same time, news outlets crush other candidates such as Johnson and Stein since the media, lobbyists, corporate executives and Washington, DC, politicians want to maintain the corrupt two-party republocrat and demopublican system.

Apple suppliers are joyous. NXPI +0.4%. AVGO +0.6%. QCOM +0.4%. TWTR gains +1.4%. Twitter catches a bid ahead of its streaming of a NFL (American football) game tonight. Monsanto sinks after the Bayer takeover news. MON -0.9%.

Energy and technology stocks lead higher. XLE and XLK are each up +0.4%. Chips are outperforming. SOX +0.5%. Retail stocks are soggy after the weak economic data. XLP -0.3%. XLY -0.4%. XRT -0.4%. WMT -0.3%. TGT -0.3%. DLTR -0.6%. KSS -1.5%. Trannies trade lower. TRAN -0.4%.

Treasury yields are; 2-year 0.76%, 5-year 1.22%, 10-year 1.73%, 30-year 2.50%. WTIC oil is up +0.7% at 43.89. Brent oil is up +1.5% to 46.55. Gold 1313.

10-year yields are; US 1.73%, UK gilt 0.94%, Germany 0.054%, Japan 10-year yield -0.047%.
At 10 AM, Business Inventories are at 0% versus the +0.1% expected and under the prior +0.2%. Lower inventories will adjust GDP slightly lower.

At 10:30 AM, Natural Gas Inventories are up 62 BCF versus the prior 36 BCF build last week. Natty gas runs higher from 2.84 to 2.92 since inventories were a stronger build at this time of the year last year. The warm weather continues in the States as the First Day of Autumn approaches next Thursday, 9/22/16.
The VIX drops under the 200-day MA at 16.72 sending US stocks higher.

European indexes finish the session higher; stocks ramp higher during the last 90 minutes of trading. The DAX finishes up +0.5% to 10431. The CAC gains +0.1% to 4373. The FTSE is up +0.9% to 6730. The MIB gains +0.3% to 16595. The IBEX is up +0.2% to 8721. The PSI ends the session up a smidge +0.1% at 4554.

US stocks spike higher after the European close printing the highs of the day. The SPX is up 20 points just shy of 2145. INDU 18195. COMPQ 5237. RUT 1225. VIX is at the lows at 16.1. The day turns into a big bull party.

At 11:45 AM EST, republican presidential candidate Donald Trump begins speaking at the New York Economic Club. Both Trump and democrat candidate Hillary Clinton receive criticism over the lack of health information provided to voters. Trump comically provides a couple pages of information that paints only a vague picture of his current health.

Clinton, after her collapse on Sunday, says her health is excellent. That is funny since she just collapsed in the street the other day. 80% of the US press provides news from the democrat perspective so outlets such as CNN, MSNBC and Bloomberg run cover for Clinton calling her health information a “comprehensive disclosure.” Humorously, she only releases a one-page report.

Clinton is about to turn 69 years old and Trump is over 70 years old. Both candidates are seniors and appear in poor health despite their claims. The presidency requires four years of stamina. There are 53 days remaining until the 11/8/16 election. Trump is lifted in the polls after Clinton’s health collapse on Sunday. Nearly 75% of America dislikes both candidates. The political games and lies by both candidates fuels this negative opinion.

At 11:54 AM, the SPX is up 17 points, +0.8%, to 2143. The Dow is up 140 points, +0.8%, to 18174. The Nasdaq Composite gains 59 points, +1.1%, to 5233. The RUT is up 13 points, +1.1%, to 1224. The Russell 2000 small caps are testing the 50-day MA at 1224 for a bounce or die decision. VIX 16.33.

Trump continues talking at 12:20 PM EST. The orange-headed showman says countries with unfair trade practices will be held accountable. Trump says currency manipulators, such as China, will face tariffs to level the playing field. This rhetoric is reminiscent of the 1930’s protectionism. China will not be happy. Stocks continue rallying.

At 12:30 PM, a ‘fireside chat’ begins with Trump at the economic club. The republican nominee will also take a couple of questions from the members.

At 12:52 PM, Trump finishes his talk, chat and questions at the New York Economic Club. The SPX is up 13 points to 2139. The Dow gains 114 points to 18148. COMPQ 5226. RUT 1222. VIX 16.62.

At 1:49 PM EST, stocks are spiking higher printing the highs of the day. The SPX is up 21 points above 2146. The INDU gains 170 points to 18204 reclaiming the 18.2K level. The Nasdaq Composite rallies a big 72 points, +1.4%, to 5246. The Russell 2000 small caps gain 14 points, +1.2%, to 1226 above the 50-day MA at 1223. VIX 16.05. Lower volatility fuels the upside gains. The central bankers maintain their jack boot on the throat of volatility to keep stock markets elevated.

Euro 1.1249. Dollar/yen 102.04. Pound 1.322. WTIC 44.04. Brent 46.73. Natty gas is up +1.3% to 2.93 after the inventory data. Gold is down 6 points to 1317. Silver 19.08. Copper gains +0.3% to 2.1615.

Treasury yields are; 2-year 0.73%, 5-yar 1.18%, 10-year 1.70%, 30-year 2.48%. The 2-10 spread widens to 97 bips and the 5-30 spread widens to 130 bips. Banks are higher as the yield curve steepens. XLF +0.6%. Regional’s outperform. KRE +0.9%.

Energy is joyous. XLE +1.7%. Tech is a leader. XLK +1.6%. Apple has created a positive mood in the stock market this week on the robust iPhone 7 sales. AAPL +3%. Food provider KR jumps +1.4% after hiking the dividend and offering a share buyback program. Financial engineering continues to rule the markets.

The bull rally party continues. The SPX is up 22 points, +1%, to 2148. The INDU gains 181 points to 18215. COMPQ 5246. RUT 1226. VIX 16.05.

At 2:20 PM, the Dow is up over 200 points. The SPX gains 25 ponits to 2151. The Nasdaq is up 79 points to 5253. RUT 1227. VIX drops under 16 to 15.81 so lower volatility creates more bull fuel. Amazon launches a beauty service so ULTA tanks -1.8%. AMZN +1.2%.

Hyundai recalls 41K vehicles due to a software glitch that causes unsuspecting acceleration. Fiat Chrysler recalls 1.4 million vehicles due to faulty seat belts. Three people have died and another five are injured from the problem necessitating the recall FCAU remains up on the day +1.8%.

The CPSC (Consumer Products Safety Commission) issues a recall on over one million Samsung Note 7 smartphones that are prone to catch fire. Samsung continues to deal with the major problem. Apple benefits from the recall.

Stocks remain elevated into the closing bell. The Fed will likely remain accommodative due to the weak data this morning. Bad news is good news. The central bankers are the market. At the same time, AAPL jumps +3.3% higher to 115.45 at highs not seen since the end of last year. Apple creates about 90 points in the Dow Industrials. NDX rallies +1.6% to 4820 a tiny whisker from a new all-time high. The high-flying stocks such as Apple send the Nasdaq !00 higher.

Apple suppliers are strong. SWKS +6.4%. AVO +2.1%. NXPI +2.4%. QCOM +1.5%. The SOX rallies above 800. Other standout winners today are INTC up +2.6% a hair from record highs. WMT +1.2%. PG +1.2%. MSFT +1.7%. Retail stocks recover during the session despite the weak data. XRT +1.3%. XLY +0.7%. XLP +0.8%. Emerging markets rally. EEM +1.7%.

Euro 1.124. Dollar/yen 102.14. Pound 1.3235. USD 95.29. All 10 S&P sectors are higher. Utilities rally with UTIL up +0.7% ending at 666.

US equities end the day with a big rally. The SPX gains 21 points, +1%, to 2147. INDU rallies 178 points, +1%, to 18212. The Dow has printed a triple digit day on four of the last five days. The Nasdaq Composite ends up 76 points, +1.5%, to 5250. The Russell 2000 finishes up 15 points, +1.3%, to 1227. VIX 16.27.

After the closing bell, ORCL drops -2% after missing on the top and bottom lines on earnings. The lackluster Oracle results may dampen the mood in tech stocks tomorrow. SANW sows the seeds of victory gaining +3% after earnings.

Tuesday, September 13, 2016

WEDNESDAY 9/14/16; European Commission President Juncker Speaks; Import/Export Prices; Oil Tanks -3%; Copper Rallies +3%

US futures are marginally higher. S&P +2. Dow +14. Nasdaq +3. Aussie and Asia index futures are pointing lower heading towards the opening bell for the regular trading session. South Korea markets are closed today for a holiday. The KOSPI sits at 1999 a hair shy of the psychological 2K level. Euro 1.1211. Dollar/yen 102.54. Pound 1.3189. USD 95.57.

WTIC oil is buoyant after the API Oil Inventories a couple hours ago at 45.20. Brent oil 47.10. Natural gas 2.90. Gold 1324. Silver 18.97. Copper 2.10.

Treasury yields are; 2-year 0.80%, 5-year 1.25%, 10-year 1.73%, 30-year 2.46%. German bund 0.073%. Japan 10-year yield -0.016%.

Asian and Aussie indexes are off to a mixed start. NIKK -0.4%. Topix -0.4%. Japanese banks are weak. Mitsubishi UFJ -3.2%. Mizuho and SMFG are each down -1%. The BOJ’s move into negative rates has hurt the banks. Seiko, the watch company, plummets -6% after cutting its profit guidance. ASX 200 +0.2%. Straits Times -0.1%.

S&P +6. Dow +41. Nasdaq +11. Euro 1.1220. Dollar/yen 102.93. Pound 1.3176. Aussie dollar 0.7475. Dollar/yuan 6.6795. USD 95.63.

WTIC oil is up +0.7% to 45.23. Brent oil gains +0.6% to 47.36. Natty is flat at 2.91. Gold 1318. Silver 18.91. Copper 2.1025.

US Treasury yields are; 2-year 0.79%, 5-year 1.24%, 10-year 1.73%, 30-year 2.46%.

Aussie energy plays are punched in the face. Santos -5.7%. Woodside Petro -0.7%. Oil Search -0.9%. Miners are digging a hole for themselves. Rio Tinto -1.3%. BHP Billiton -1%. Fortescue -1.7%.

Asian indexes trade lower into the closing bells for a mixed finish. The NIKK ends the day down -0.7% to 16614. The SPASX200 is up +0.4% to 5228. The SSEC is down -0.7% to 3003. The Beijing communists will direct the PBOC to goose markets higher with easy money to maintain the 3K level for the Shanghai Index. The Hang Seng Index is down marginally to 23205. India stocks are trading higher as the session continues. Nifty +0.2%.

At 3 AM (8 AM London), European indexes begin trading higher. DAX +0.3%. CAC +0.2%. FTSE +0.2%. SMI +0.3%. European Banking Index is down -0.5%. The UK 10-year gilt yield is 0.92%.

Luxury goods and watch providers Hermes drops -7% and Richemont is down -3.6%. Catering and food service company Compass Group leads higher up +1.4%. People have to eat. Monsanto provides a new offer for Bayer at 129/share. Bayer rises +0.7%. MON will see active trading in the States today and is up +3% in very early trading.

European Commission President Jean-Claude Juncker provides the State of the Union address. Juncker says, “The European Union does not have enough union.” He says, “Europe is not social enough.” Juncker says, “Debt is at too high a level.” He proclaims, “Europe will not become a nationalized area.” Juncker says Europe is not at risk after the Brexit vote. He wants the Brexit to occur “as quickly as possible (but UK PM May decides when the two-year  countdown clock begins after she declares Article 50 at some point in the months ahead).” Juncker states that there “can be no a la carte access to the single European market (directing this comment at Britain).”

US futures are buoyant overnight. S&P +5. Dow +35. Nasdaq +9. VIX 17.85.

Euro 1.1230. Euro/yen 115.95. Dollar/yen 103.26. Pound 1.3219. Euro/pound 0.8495. Mexican peso 19.0505. Canadian dollar 1.3144. Dollar/yuan 6.6713. Aussie dollar 0.7482.

WTIC oil is up +0.8% to 45.27. Brent oil is up +0.6% to 47.37. Natural gas 2.92. Gold 1322. Silver is up +0.6% to 19.09. Copper is up +0.5% to 2.1120.

Treasury yields are; 2-year 0.79%, 5-year 1.23%, 10-year 1.72%, 30-year 2.46%. The 2-10 spread is 93 bips.

The short-term Libor lending rates continue to climb higher. Junk-rated companies with big debt loads are more negatively impacted as Libor rises.

At 4:06 AM EST (9:06 AM London; 10:06 AM Frankfurt), DAX +0.1%. The CAC slips negative down -0.1%. FTSE +0.3%. MIB -0.2%. IBEX -0.3%. PSI is flat. Euro 1.1225. Dollar/yen 103.09. Pound 1.32. Aussie dollar 0.7480. USD 95.59.

S&P +1. Dow +6. Nasdaq +5. VIX inches higher to 17.96. WTIC oil 45.26. Brent oil 47.38. Natty 2.93. Gold 1322. Silver 19.12. Copper is up +1% to 2.1225.

Treasury yields are; 2-year 0.78%, 5-year 1.23%, 10-year 1.71%, 30-year 2.45%.

At 4:30 AM EST (9:30 AM London), UK unemployment rate is steady at 4.9%. Pound 1.3216. The Brexit vote continues to have a mild impact on the UK economy. Jobless Claims increase by 2.4K. UK Mortgage loans rise +3.4%.

S&P +5. Dow +33. Nasdaq +14. VIX 17.70. DAX +0.3%. CAC +0.3%. FTSE +0.5%. India stocks are trading marginally positive with the Nifty gaining a smidge +0.1%.

Euro 1.1223. Dollar/yen 103.21. Pound 1.3218. Aussie dollar 0.7478. WTIC 45.26. Brent 47.40. Copper is up +1.1% to 2.1245. The copper rally supports European stocks and US futures.

Treasury yields are; 2-year 0.79%, 5-year 1.23%, 10-year 1.71%, 30-year 2.45%.

Republican presidential candidate Trump announces plans to provide six weeks of maternity leave for women and other benefits. Humorously, Trump won the primary elections vowing to reduce the US debt but his new plan will add to the debt. Trump and Clinton cannot stop lying to the American people. How can you tell if politicians are lying? Their lips are moving. Trump is a republican comically espousing democratic and liberal ideas.

New York Attorney General Eric Schneiderman opens an investigation into the Trump Foundation for donations made in return for favors. The Clinton Foundation is far more corrupt but both the liar in the pantsuit and the orange-headed carnival barker are running charity organizations that allegedly serve as slush funds performing political favors. This is the American way in 2016. Why would anyone vote for a republocrat or demopublican? They have created the mess in the United States over the last 40 years.

The new Apple iOS 10 update is creating problems for users. The bug in the operating system is causing some devices to not function. A black screen is appearing that prevents access to the iPhone. Apple enthusiasts are told to not upload the new iOS 10 update. Both Samsung and Apple are experiencing headaches with their products. Cook says the new Apple AirPod, that fits into the ear, will not fall out or become lost. Comically, the AirPod looks like a cigarette butt that is stuck in your ear. AAPL gains +0.2% in early trading.

At 6:46 AM EST, S&P +3. Dow +16. Nasdaq +10. VIX 17.79.

US Mortgage Applications are up +4.2%. Refi’s gain +2.0% and mortgage loan applications gain a robust +9%. Low rates create an impetus for home buyers to jump off the fence and commit to a home purchase.

At 8 AM, S&P +4. Dow +20. Nasdaq +12. VIX 17.60. DAX +0.4%. CAC -0.1%. FTSE +0.6%. Euro 1.1223. Dollar/yen 102.76. Pound 1.3185. Aussie dollar 0.7471.

Oil slips negative with inventory data 2-1/2 hours away. WTIC oil 44.83. Brent oil 47.01. Natural gas jumps +2.1% to 2.97 running towards 3. Gold 1322. Silver 19.03. Copper is up +1.3% to 2.13.

Bayer buys Monsanto for $66 billion in cash and the deal will close by the end of next year. MON is up marginally giving up the earlier +3% gains. Bayer trades up +2.6% in Europe. HLF gains +3.2% after last evening’s announcement by Carl Icahn that he continues to add to his long position in the multi-level marketing company. ED is upgraded at Jefferies.

FB, TWTR, GOOGL and other social internet companies are partnering to prevent fake news from spreading over the internet. Humorously, they should start with their own news feeds. These three bigwigs present news feeds from the democratic and liberal perspective so they are already biased and any joint actions will likely increase the bias that praises democrats while snuffing republican and conservative news. This is America in 2016.

RT CEO James Buettgen resigns; he is actually forced out for poor performance with the restaurant chain. Perhaps employees will sing the Rolling Stones hit song “Goodbye Ruby Tuesday” as they drop kick the top man across the parking lot. Retailer COH drops -2.3% on a MS downgrade. Retailer M gains +2.2% on a C upgrade.

VTAE catapults +160% on news that Allergan, AGN, buys Vitae Pharma. SRPT jumps +16% on encouraging news for its MS drug. Activist investor Bill Ackman is selling off shares of APD the industrial gas giant. The Linde and Praxair, PX, merger in the industrial gas space was terminated early this week.

At 8:30 AM, Import Prices are down -0.2% month-on-month less than the -0.1% expected and below the prior +0.1%. Import Prices print the first decline in six months. Year-on-year is down -2.2% compared to the prior -3.7%. Export Prices are down -0.8% month-on-month below the -0.1% expected and under the prior +0.2%. Year-on-year is down -2.4% compared to the prior -3.0%. Inflation is not in play.

S&P +4. Dow +26. Nasdaq +15. VIX 17.50. USD 95.56. WTIC 44.63. Brent 46.75.

Treasury yields are; 2-year 0.79%, 5-year 1.23%, 10-year 1.71%, 30-year 2.45%.

Stocks are typically buoyant from a Tuesday low to a Wednesday high during OpEx week so it will be interesting to see if this occurs today.

At 9 AM, S&P +3. Dow +15. Nasdaq +12. VIX 17.59. DAX +0.4%. CAC -0.3%. FTSE +0.5%. Luxury goods providers are hit. Hermes is down -8% the biggest drop in six years. Richemont (Cartier jewelry) loses -3.3%.

WTIC oil is down -1.1% to 44.47. Brent oil loses -1.1% to 46.57. Natty 2.94. Gold 1322. Silver 19.08.

Treasury yields are; 2-year 0.78%, 5-year 1.22%, 10-year 1.71%, 30-year 2.45%.

At 9:30 AM EST, US stocks begin trading marginally higher. Utiliites and technology leads higher. XLU +0.3%. XLK +0.4%. The large money center banks are flat. XLF +0.1%. WFC -0.5%. Regional banks are weak. KRE -0.3%. Energy  is a drag on the broad indexes. XLE -0.5%.

The SPX gains 3 points to 2129. The INDU is up 17 points to 18084. The COMPQ gains 19 points to 5174. Euro 1.1226. Dollar/yen 102.82. Pound 1.3167. USD 95.55.

WTIC oil is down -1.2% to 44.37. Brent oil is down -1.3% to 46.51. Gold 1326. Silver 19.08. Copper is a standout winner today at 2.14.

AAPL is up +2% leading higher like yesterday. M +1.2%. JCP -0.6%. JWN -0.8%. TIF -0.3%. AMZN +0.5%. NFLX +2%. COH -4.6%. Luxury goods providers in Europe slide lower. Hermes -8%. Richemont -3.7%. Burberry -1.3%.

US Treasury yields are; 2-year 0.78%, 5-year 1.22%, 10-year 1.71%. 30-year 2.45%. German bund 0.035%. Japan 10-year yield -0.015%. UK gilt 0.91%.

At 10 AM, the S&P 500 is up 4 points, Dow Industrials are up 29 points and Nasdaq is up 21 points. VIX 17.38. DAX +0.1%. CAC -0.4%. FTSE +0.6%.

SPX jumps 7 points higher to 2134. The Dow gains 43 points and Nassdaq 27 points. The VIX drops to 17.08.

The SPX moves up through the strong price resistance at 2135 as the VIX drops to 16.90.

At 10:30 AM, EIA Oil Inventories area 559K drawdown. This is a huge surprise to traders that expected a 2.8 million and more barrel build. Jaws drop. Oil prices rise. WTIC is down -0.5% to 44.67. Brent is down -0.6% to 46.83. Natty 2.90.

The VIX falls under the 200-day MA at 16.71 to 16.46 giving the market bulls the all-clear signal. Stocks rally. The SPX is up 13 points to 2140. The Dow gains 88 points to 18153. The rise in oil quickly fades. WTIC drops to 43.94.

US Treasury yields are; 2-year 0.77%, 5-year 1.20%, 10-year 1.69%. 30-year 2.43%.

European indexes finish the session mixed. The DAX  is down a hair to 10378 sitting at the 50-day MA support at 10375. The CAC drops -0.4% to 4370. France was flat or weak the whole session and the CAC is under its important moving averages including the 200-day MA at 4385. The FTSE gains a smidge to 6673.

The MIB is down marginally to 16540 losing the 50-day MA at 16659. Troubled Italian bank Monte dei Paschi CEO Massimo Tononi resigns. Marco Morelli is the new CEO. The IBEX drops -0.3% to 8702. The PSI loses -0.1% to 4552. Hermes -8.8%. Richemont -3.9%. LVMH -2.2%. Burberry -1.8%. Bayer +0.4%.

The S&P 500 is up 7 points to 2133. The Dow gains 32 points, Nasdaq is up 35 points and Russell 2000 gains 2 points to 1214. VIX is at 17.13 back above the 200-day MA favoring the bears going forward.

WTIC oil is down -2% to 43.99. Brent oil is down -1.8% to 46.27. Gold 1325. Silver 19.10. Copper is up +1.6% to 2.155.

The stink grows more foul around Wells Fargo. Federal prosecutors launch an investigation into the bank. WFC drops -1% down seven of the last nine days losing -10%. The stock continues to lose about -1% per day for nearly two weeks. Warren Buffett cannot be too happy having his reputation start to stink as he is a major shareholder in the bank. BRKA stock is down -0.3% and moves lower in sync with WFC over the last two weeks.

Thousands of WFC employees were nefariously creating phony accounts to meet quotas. It boggles the mind that so many people could be dishonest and without a moral compass. The concern is that other banks are involved in the same type of dishonesty. More shoes may drop. The bread and circus days are upon us. Morality and ethics are quaint ideas from a time gone by.

At 1:43 PM, the SPX is up 5 points, Dow up 27 points, Nasdaq 28 points and Russell 2000 up 3 points. VIX 17.17. Euro 1.1252. Euro/yen 115.22. Dollar/yen 102.40. Pound 1.3224. Euro/pound 0.8509. Mexican peso 19.2265. Canadian dollar 1.3178. Dollar/yuan 6.6747.

Oil takes the wind out of the stock market. WTIC oil drops -2.3% to 43.88. Brent oil is down -2% to 46.14. Natural gas is down -0.5% to 2.90. Gold 1323. Silver 19.08. Copper is the big story today up +2.6% to 2.1555.

US Treasury yields are; 2-year 0.75%, 5-year 1.20%, 10-year 1.69%. 30-year 2.45%. The 2-10 spread is 94 bips.

At 2:14 PM, stocks retreat towards the flat line. The SPX and INDU are marginally negative. VIX 17.75. UPS announces plans to hire 95K temporary workers for the holidays in line with last year. UPS trades flat.

Oil collapses -3%. WTIC 43.56. Brent 45.86. Natty 2.90. Gold 1323. Silver 19.05. Copper 2.1505.

CNBC television commentator Jim Cramer says, “Stay the course (for the stock market).” Cramer says, “It is too hard to get out and then get back in.” Thousands of Cramer followers will remain long the stock market no matter what happens.

US equities end the day mixed. The SPX loses 1 point to 2126. The Dow drops 32 points, -0.2%, to 18035. The Nasdaq Composite is up 19 points, +0.4%, to 5174. The RUT ends down 1 point to 1212.

The VIX is at 18.14 above the 200-day MA at 16.72 signaling bearish markets ahead. Market bulls must push volatility lower and send the VIX under 16.72 to confirm a sustainable stock market rally. The CPCE put/call ratio is down to 0.55 indicating ongoing market complacency.

The US Census Bureau reports that median household income has increased +5.2% in 2015 to $56,516. This is the largest increase in 50 years. The percentage of Americans living in poverty decrease. The report paints a rosy picture and is the best economic news that President Obama has received in a long time.