Monday, March 27, 2017
TUESDAY 3/28/17; CCL; DRI; MKC; International Trade; Consumer Confidence; 5-Year Note Auction; PLAY; SONC
Australia and Asia stock indexes are
The NIKK ends
European indexes are
CCL cruises to a …. earnings……DRI, FDS, MKC, OREX, SOL,
At 8:30 AM EST, International Trade data indicates
The S&P/Case Shiller House Price Index is
US stocks begin trading
At 10 AM, Consumer Confidence is
The Richmond Fed Mfg Index is
The European trading session ends..
The DAX finishes
Fed’s George says
Fed’s Kaplan says
At 1 PM EST, the 5-Year Note Auction goes off at
US stocks end the day
After the bell, PLAY, SONC, VRNT
Sunday, March 26, 2017
MONDAY 3/27/17; World Markets Selloff to Begin the Week; VIX 15-Handle; CALM; CONN; GIII; 2-Year Note Auction; DGLY; RHT
Australia’s ASX 200 begins the week lower -0.4%. Basic materials are sinking the broad market. BHP Billiton, Rio Tinto and Fortescue drop from -1.8% to -3.0%. Iron ore collapses -4.3%. Iron ore is in oversupply. Steel prices move lower. Copper is trading down more than -1.5%. USD 99.32. The US dollar index drops so gold pops to 1252.
Thus, the industrial metals and commodities are sinking like a stone creating broad negativity but the precious metals (PM) such as gold pops as the US dollar moves lower. Gold miner Newcrest jumps +1.2% higher. The Trump reflation trade since November may be fading.
25,000 Aussie’s are evacuating Queensland as Cyclone Debbie creates stormy weather and intensifies to a CAT 4 storm. The cyclone will hit Queensland over the next day with winds at 280 KPH (174 MPH). Sustained winds at 165 KPH (103 MPH) are already wreaking havoc. A tourist dies in a car accident. Obviously, business and commerce will be hampered in northeastern Australia for the days ahead. The towns of Mackay, Airlie Beach and Townsville will be a direct hit when the storm fully hits land in the hours ahead. Brisbane and Sydney are south of the cyclone.
Japan begins trading with stocks collapsing. NIKK -1%. Topix -0.8%. Dollar/yen 110.55. Toshiba sinks -2% on news that the troubled Westinghouse nuclear unit will likely declare bankruptcy tomorrow. Korea Electric Power may step in to provide support. Westinghouse has many operating nuclear plants in South Korea. KOSPI -0.3%. SPASX200 -0.5%. Aussie banks are down from -0.5% to -0.6% across the board.
The South Korean government issues an arrest warrant for disgraced former President Park entangled in an influence peddling scam while in office. The chips and electronics makers in South Korea are a bright spot in the down tape. SK Hynix +2%. LG Display +1.2%. Samsung SDI +1.9%.
US futures are down out of the gate on Sunday evening in the States. S&P -12. Dow -78. Nasdaq -28. Russell -8. The luster is off the Trump rose after the AHCA healthcare bill failed on Friday. President Trump was supposed to be the expert deal maker but the entire process with Trumpcare was a disjointed mess from the start. The republicans bragged for seven years that they could fix the ACA (Affordable Healthcare Act; Obamacare) but did not have a proper plan after all that time. The negativity in the US futures and the falling US dollar are creating a soggy start to the new week of trading. The screens are red.
Euro 1.0836. The euro moves higher as the US dollar moves lower. Euro/yen 120.06. Dollar/yen 110.80. Pound 1.2495. Euro/pound 0.8672. Mexican peso 18.7675. Canadian dollar 1.3354. Dollar/yuan 6.8837. Indian rupee 65.415. Aussie dollar 0.7632.
WTIC oil 48.08. Brent oil 50.92. Natural gas is up +1.6% to 3.12. Gold gains 8 dollars, +0.666%, to 1252. Silver is up +0.6% to 17.86. Copper is flat at 2.63.
Treasury yields are; 2-year 1.26%, 5-year 1.95%, 10-year 2.41%, 30-year 3.01%.
S&P -15. Dow -102. Nasdaq -34. Gold 1253.
Chinese stocks are on line and the SSEC and HSI are each trading marginally lower. Property developer Kaisa Group rocket launches more than +58% after reinitiating trading after a two-year suspension. What a joke. The communists prop the company up and traders are buying with both hands. PBOC Governor Zhou Xiaochuan says China wants to open its markets and expand participation in the global economy but stipulates that it wants treated more fairly. Cry me a river.
In Hong Kong, Carrie Lam is elected as the new chief executive for the city in the phony election process where the Beijing communist leaders choose the candidates. The Hang Seng is down -0.5% trailing lower so the stock market is not excited about the new communist puppet in charge of Hong Kong.
Dollar/yen 110.24. Pound 1.2554. Aussie dollar 0.7627. WTIC oil 47.84. Brent oil 50.60.
Oil prices are sneaking lower after the OPEC meeting on the weekend. OPEC and non-OPEC members are trying to limit oil production to boost prices but the consortium is in disagreement about extending the quotas. Some members want a six-month extension of the production cuts, another idea is a three or four-month extension and Russia says it is too early to consider an extension. The North American shale producers keep ramping up their production as the Middle East tries to limit production so the world remains awash in oil. Save your milk and soda containers since they will be needed to store all the oil in the supply line.
India stocks are trailing lower like the rest of the global stock markets. The BSE drops 210 points, -0.7%, to 29211. The Nifty loses 71 points, -0.8%, to 9036. In Moscow, thousands of Russians take to the streets to protest against rampant corruption. President Putin’s henchmen will round up any of the key leaders in the resistance.
The NIKK finishes the day down 277 points, -1.4%, to 18986. The ASX 200 loses -0.1% to 5747. The KOSPI is down -0.6% to 2156. The SSEC drops -0.1% to 3267. CSI300 -0.3%. The Hang Seng Index loses 0.7% to 24194 not exactly a stellar greeting for the new Hong Kong chief executive Lam. Losses are marginal in Australia and China. South Korea and Hong Kong are weak. Japan leads the Pacific theater lower overnight. Taiex -0.3%. Straits times -0.6%.
S&P -20. Dow -137. Nasdaq -45. Euro 1.0852. Dollar/yen 110.24. Pound 1.2531. Aussie dollar 0.7630. Dollar/yuan 6.8725. South African rand 12.62. The euro is rising as the US dollar falls and also gains lift after German Chancellor Merkel’s Christian Democrats Union (CDU) party is handed a win in the Saarland State election.
The CDU is the German center-right party while the Social Democrat Party (SPD) is the center-left party that takes second place in Saarland. The right-wing AfD party takes 6% of the vote and appears to be weakening in Germany. Merkel’s reelection hopes improve with the election victory.
WTIC oil is down -1.2% to 47.40. Brent oil is down -0.9% to 50.36. Natural gas 3.12. Gold is up 14 bucks, +1.1%, to 1257. Silver 17.90. Copper sinks -1.3% to 2.597 which creates ongoing negativity in the broad stock market.
Treasury yields are; 2-year 1.23%, 5-year 1.89%, 10-year 2.36%, 30-year 2.97%. German bund 0.36%. Italy 10-year yield 2.19%. UK gilt 1.16%. France 10-year yield 0.97%.
S&P -24. Dow -170. Nasdaq -55. It is an ugly morning. Every screen you look at is red. DAX futures are down -0.8% and dropping. CAC futures are down -0.7%. Italy’s MIB futures are down -1% with the European open minutes away.
The global time zones adjust so London time is now five hours ahead of New York City. Frankfurt, Paris, Brussels and Central Europe are six hours ahead of the US East Coast.
At 3 AM EST (8 AM London; 9 AM Frankfurt), European indexes are sinking like a boat anchor. The DAX, CAC and FTSE begin the session down about -0.5% and the losses continue accelerating lower.
Basic resources, banks, insurance and construction stocks lead lower. Basic Resources Index -2%. ArcelorMittal -5%. Glencore -5%. BHP Billiton -4%. Antofagasta -3%. Anglo American -3%. Rio Tinto -3%. Banks such as HSBC, Lloyds, Banco Santander and BNP Paribas drag the broad stock market lower. Zurich Insurance trades lower. Experian is a bright spot up +0.6%. Ferrari, that trades as RACE in the States, drives higher.
S&P -23. Dow -162. Nasdaq -53. Russell -18. VIX 14.86.
The USD drops to a four-month low to 99.159 starting to tease a 98-handle. Euro 1.0862. Euro/yen 119.77. Dollar/yen 110.27. Pound 1.2548. Euro/pound 0.8656. Mexican peso 18.7981. Canadian dollar 1.3344. Dollar/yuan 6.8757. Indian rupee 65.0762. Aussie dollar 0.7620.
WTIC 47.53. Brent 50.46. Natty 3.12. Gold 1258. Silver 17.92. Copper 2.5955.
Treasury yields are; 2-year 1.23%, 5-year 1.89%, 10-year 2.35%, 30-year 2.96%. The 2-10 spread is down to 112 bips. The yield curve flattens. The yields keep dropping lower as traders seek safety bidding up Treasuries.
The DAX, CAC and FTSE are each down -0.9%. The German IFO Business Confidence is at 112.3 handily beating the 111.1 expected the strongest number since July 2011. The Business Climate component is also up nicely.
At 4 AM EST (9 AM London), one hour into European trading, the DAX and CAC are each down -1%. FTSE -1.1%. SMI -1%. OMX -1.4%. The Nordic stocks lead lower.
Treasury yields are; 2-year 1.23%, 5-year 1.90%, 10-year 2.36%, 30-year 2.97%.
US futures print the overnight lows. S&P -25. Dow -175. Nasdaq -55. Russell -20. The VIX is above 15 to 15.10. Higher volatility creates market negativity. The higher volatility and lower copper is a double whammy against stocks and futures. The Nifty is down 76 points, -0.8%, to 9032.
At 4:35 AM EST (9:35 AM London; 10:35 AM Frankfurt), DAX -0.666%. CAC -0.5%. FTSE -0.8%. The BOE is releasing criteria and scenarios for bank stress tests. MIB -0.6%. IBEX -0.6%. PSI -0.4%. Portugal is rising off the lows. The Nifty is down -0.5% to 9060.
S&P -20. Dow -130. Nasdaq -45. Russell -17. VIX is 14.86 backing away from the plus-15 numbers so markets are trying to stabilize. Euro 1.0865. Dollar/yen 110.26. Pound 1.2560. Aussie dollar 0.7673. US dollar index 99.10. The USD has dropped down to 99.03 overnight but not yet printing a 98-handle.
WTIC oil 47.54. Brent oil 50.47. Natty 3.12. Gold 1258. Silver 17.94. Copper is down -1.5% to 2.59.
Treasury yields are; 2-year 1.23%, 5-year 1.89%, 10-year 2.36%, 30-year 2.97%. The 2-10 spread is 113 bips.
Overnight, in a Bloomberg interview, Fed’s Lockhart says the fiscal boom in the US will likely take longer to materialize. The chance for an August rate hike is at 74%. Typically, a percentage of around 80% places a hike firmly on the table so the FOMC remains on track to hike perhaps in September and then in December for three hikes this year. Treasury yields, however, continue to move lower and the yield curve is flattening instead of steepening.
At 6:35 AM EST, S&P -20. Dow -140. Nasdaq -41. Russell -17. VIX 14.70. DAX -0.8%. CAC -0.3%. FTSE -0.7%. MIB -0.6%. The Nifty finishes down -0.7% to 9045.
Euro 1.0862. Dollar/yen 110.37. Pound 1.2591. Aussie dollar 0.7634. WTIC 47.58. Brent 50.50. Gold 1257. Silver 17.94. Copper is down -1.7% to 2.586.
Treasury yields are; 2-year 1.23%, 5-year 1.90%, 10-year 2.37%, 30-year 2.98%.
At 7:38 AM EST (1:38 PM Central Europe), S&P -19. Dow -135. Nasdaq -40. Russell -16. VIX 14.60. DAX -0.8%. CAC -0.3%. FTSE -0.7%. MIB -0.7%. IBEX -0.4%. PSI +0.2%. Portugal catches a bid and is the only major index higher across the pond. Markets are staggering sideways perhaps waiting for the US open to see how those markets trade. Silver is a couple pennies from 18.00. Copper tanks -1.9% to 2.58.
Treasury yields are; 2-year 1.23%, 5-year 1.89%, 10-year 2.36%, 30-year 2.97%.
CALM lays an egg losing -9% after reporting earnings. Apparel company GIII is bludgeoned -10% in the pre-market which may create negativity in the retail space. CONN,
At 9 AM,
The new moon peaks for the month this evening at 10:57 PM EST. Stocks are typically weak moving through the new moon. The EOM and EOQ1 is on Friday, 3/31/17, and the monthly charts receive new data points.
US stocks begin trading
The Dallas Fed Mfg Survey is
The European trading session ends..
The DAX finishes
At 1 PM, the 2-Year Note Auction goes off at….
Treasury yields are; 2-year…
The Federal Reserve heads are out in force blathering for another week with 13 separate speeches scheduled by nine Fed members. Fed’s Evans, the uber dove turned slightly less dovish, begins the parade of banker bloviating saying that
US stocks end the day
After the bell, DGLY, RHT
Hong Kong holds the first election for chief executive since the Umbrella Revolution in 2014 when mostly young people occupied the streets fighting for a democratic vote. The movement was crushed by the communist leaders in Beijing on the mainland. Communist China chooses the candidates for the Hong Kong election making a mockery of a free election process.
Carrie Lam is elected as Hong Kong’s new leader the first woman leader of the city. Lam kneels and worships at Beijing’s altar. The other candidates, John Tsang and Woo Kwok-hing come up short but what difference does it make when the Beijing communists on the mainland choose the candidates ahead of time guaranteeing that the winner will carry out the decrees from the mainland.
Lam says, “The priority is to heal the divide.” The Beijing communists remain in control of Hong Kong. Lam was not the people’s choice. 777 votes in the election committee of 1,194 votes decides the outcome. 1,163 votes were cast. 31 votes were not placed instead supporting a future where truly fair elections would occur. Those 31 souls better hope the voting was anonymous; otherwise, the Chinese leadership will seek them out and make them ‘disappear’. Hong Kong is a metropolitan city of 7 million people. 1,163 privileged communists in Hong Kong decide how 7 million people shall live their lives.
Several pro Umbrella Movement protestors continue to fight for “one person one vote” and a true democratic process rather than voting for a commie figurehead that will perform the bidding of the Beijing leaders like a dancing monkey. This handful of protestors will likely go missing as the weeks play out. Lam is known as a a pragmatist and will do what Beijing tells her to do going forward. The Hang Seng Index, HSI, should trade actively tomorrow.
In Kuwait, OPEC and non-OPEC oil producers meet to discuss the ongoing oil production agreement. The joint committee recommends extending the production cuts for six more months. Members in the consortium encourage producers to continue striving for 100% compliance with the oil production quotas. Humorously, a short time after the extension recommendation, Russia says it is too soon to consider an extension.
OPEC says compliance on the oil production freeze and cut agreement is at 94%. Pause for laughter. If the producers were actually paring back production, the oil tanks would not be sloshing over filled to the brim. The Einstein’s in the Middle East neglect to mention the impact of North American oil producers ramping up production. Oil prices will be in focus this evening into tomorrow morning.
President Trump blames the Freedom Caucus in the Republican Party for the failure of Trumpcare. These are the Tea Party republicans that believe in conservatism. It is comical that the conservatives, which is what the Republican Party used to stand for, are in the minority and being muscled out of a now more-mainstream establishment-based party. Both the republican and democrat parties support the obscene monetary policies by the Federal Reserve that serve to make the wealthy filthy rich. The conservatives in the Republican Party are the only politicians remaining that care about balanced budgets and a stable financial system.
By Trump now pointing the finger at the conservatives, the split in the Republican Party will widen. The president’s words will now open the door to republican infighting. The Republican Party has to decide if it wants to become more mainstream or remain true to conservative ideals; there is no middle ground.
The Democratic Party is split between a very liberal and progressive branch versus mainstream establishment democrats while the Republican Party is split between the conservatives and the mainstream establishment republicans. The elected babies play their games while average families and common Americans struggle year after year dealing with a sick, stagnant economy without opportunity. Many Americans declare a pox on both political houses.
President Trump continues assigning blame for the failure of Trumpcare. Questions develop about House Speaker Paul Ryan’s future after the AHCA bill went down in flames yesterday. The republicans bragged for eight years that they knew how to fix Obamacare and when they stepped up to bat they struck out. A Fox News show hosted by Jeanine Pirro calls for Ryan to step down. Trump promotes and appears to be endorsing the show. Pirro is a long-time personal friend of Trump that worships at the orange-head’s altar. The split in the Republican Party will widen further as the knives come out.
The NCAA college basketball tournament continues in the United States with the Elite Eight games on tap (the last eight teams remaining will be whittled down to the Final Four). Employers will be happy when the tournament ends over the next week since employees can get back to work without the distraction.
Uber suspends its autonomous ride-sharing programs in Arizona, Pittsburgh and San Francisco after a crash in Arizona. Two other vehicles are involved. No one is seriously injured. Google and Tesla have experienced accidents with their driverless vehicle names in the past. Perhaps all the hype around driverless cars is overblown. Autonomous vehicles on public streets are likely closer to 20 years away rather than a couple years away.
Euro 1.0798. Euro/yen 120.22. Dollar/yen 111.34. Pound 1.2473. Euro/pound 0.8657. Mexican peso 18.7579. Canadian dollar 1.3378. Dollar/yuan 6.8837. Indian rupee 65.415. Aussie dollar 0.7623.
WTIC oil 47.97. Brent oil 50.80. Natty 3.08. Gold 1243. Silver 17.78. Copper 2.63.
Treasury yields are; 2-year 1.26%, 5-year 1.95%, 10-year 2.41%, 30-year 3.01%. The 2-10 spread is 115 basis points. Global investors ae buying banks with both hands for the last five months proclaiming a steeper yield curve ahead instead it flattens as shown by the 2-10 spread dropping.
President Trump downplays the loss of the healthcare bill. He says the democrats own the ACA law (Obamacare) and republicans are not involved with health care. Trump proclaims that “Obamacare will explode.”
Americans will not be happy hearing that the president, who is in charge of handling difficult matters, is now proclaiming to ignore healthcare and let the ACA system collapse. Like President Obama, Trump is more concerned about where blame or credit is assigned and this overrules doing what is right for the country. The demopublicans and republocrats are all the same; the establishment elite class rules America. The politicians only care about their own power and wealth. If the country is helped as they help themselves that is icing on the cake, if not, so be it. The top priority of the corrupt republican and democrat establishment class in Washington, DC, is always themselves.
Thursday, March 23, 2017
FRIDAY 3/24/17; European PMI’s; FINL; Fed Speak; Durable Goods; AHCA (Healthcare) Vote is Cancelled Before it Fails; Obamacare Trumps Trumpcare
Australia’s ASX 200 pops +0.9% in the early going. BHP gains +0.3%. Japan’s Nikkei Index is down -0.1%. Ditto Topix. Energy stocks are weak in Japan. The KOSPI is up +0.1%. Samsung Electronics slips -0.7%.
US futures are buoyant. S&P +4. Dow +40. Nasdaq +9. WTIC oil 47.79. Brent oil 50.64. Natural gas 3.05. Gold 1247. Silver 17.62. Copper 2.648. The ongoing strike at BHP Billiton’s Chile copper mine is ending with the prior labor contract in place. Both sides agree to resume talks next year. Copper prices should soften with more supply ready to come to market.
Euro 1.0780. Dollar/yen 110.89. Pound 1.2515. Indian rupee 65.53. Dollar/yuan 6.8863. Aussie dollar 0.7634.
Treasury yields are; 2-year 1.25%, 5-year 1.95%, 10-year 2.41%, 30-year 3.03%. German bund 0.43%. Japan 10-year yield 0.065%. UK gilt 1.24%. France 10-year yield 1.04%.
At 8:58 AM Tokyo (7:58 PM EST Thursday evening in the States), President Trump says he is done negotiating over the AHCA bill and wants a vote. The House GOP republican leadership is scheduling a vote for later this morning so there will be lots of drama on tap to end the week.
Asia stocks and US futures rally on the news that a vote for the AHCA healthcare bill will take place on Friday. NIKK +0.4%. Topix +0.5%. S&P +8. Dow +72. Nasdaq +17.
Euro 1.0773. Dollar/yen 111.14. Pound 1.2506. USD 99.75. Oil gains a smidge. WTIC 47.88. Brent oil 50.72. OPEC and non-OPEC producers plan to meet on Sunday to discuss the oil production cut agreement. Gold is steady at 1246.
Treasury yields are; 2-year 1.26%, 5-year 1.96%, 10-year 2.43%, 30-year 3.04%.
Chinese Premier Li and Aussie PM Turnbull conduct a joint press conference announcing trade deals especially focusing on the chilled meat and food producers. Both leaders will then depart to visit Sydney and attend a sporting event this weekend. Li then plans to travel to New Zealand.
The Shanghai Index is flat in the early going. CSI300 +0.2%. The Hang Seng Index is up +0.2%. A Hong Kong election occurs for the first time on Sunday since the Umbrella Revolution in 2014 where young people were fighting for a democratic selection and voting process. The Beijing communist leaders on the mainland crushed the movement like a thumb crushes a bug. There are still young people ‘missing’ after the movement; a communist nation rules the minions with an iron fist.
The PBOC, China’s central bank, tightens home lending rules to tamp down the ongoing real estate bubble. The milk goes sour as Chinese company Huishan Dairy crashes -90%. Shares are halted from trading after over $4 billion in market cap disappears in a heartbeat. Short-seller Carson Block at Muddy Waters research firm said the company was worthless; now it is.
Japan catches a bid as the yen drops. NIKK +0.9%. ASX 200 +1%. KOSPI -0.2%. SSEC -0.1%. CSI300 +0.2%. HSI +0.2%. Taiex -0.2%. Straits Times +0.1%.
S&P +7. Dow +69. Nasdaq +16. Dollar/yen 111.36. Dollar/yuan 6.8939. Aussie dollar 0.7632. WTIC 47.79. Brent oil 50.63. Copper is down -0.666% to 2.627.
USD 99.96. The dollar/yen currency pair moves from a 110-handle to 111.40 which reflects a weaker yen which pumps Japanese stocks higher. Global markets are idling sideways watching the political drama in the United States.
The Asia session ends with the major indexes higher sans South Korea. The NIKK ends up +0.9% to 19263. The SPASX200 finishes up +0.8% to 5754. The KOSPI is down -0.2% to 2169. The SSEC rallies +0.6% to 3269. The HSI is up +0.1% at 24342. Asia stocks and US futures are buoyant overnight. European futures point to a flat open not participating in the bullish bias. The Nifty gains 25 points, +0.3% to 9111 as the India session continues.
For the week, the Nikkei Index finishes down -1.3% using the 20-week MA at 19047 as support. Australia’s ASX 200 loses -0.8% this week. The KOSPI ekes out a tiny +0.2% gain. The Shanghai Index is up +0.9% the winner in the Pacific theater this week. The PBOC keeps intervening to support and manipulate the Chinese stock and currency markets. The central bankers are the market. The Hang Seng Index finishes the week up +0.2%.
S&P +4. Dow +43. Nasdaq +11. Russell +4. VIX 12.94. WTIC 47.93. Brent 50.76. Natty 3.04. Gold 1245. Silver 17.62. Copper is down -0.2% to 2.6385.
Euro 1.0773. Euro/yen 119.88. Dollar/yen 111.28. Pound 1.2488. Euro/pound 0.8626. Mexican peso 18.9493. The peso remains stronger with an 18-handle on the currency pair. Canadian dollar 1.3358. Dollar/yuan 6.8931. Indian rupee 65.46. Aussie dollar is 0.7619 teasing down towards a 0.75 handle perhaps on tap next week.
Treasury yields are; 2-year 1.27%, 5-year 1.96%, 10-year 2.43, 30-year 3.04%. The 2-10 spread is 116 bips.
At 4 AM EST (8 AM London), European indexes are open for trading and moving sideways at the flat line. Global traders are waiting for the AHCA healthcare vote in the United States later today since the result will impact President Trump’s stature and political capital going forward. The House may schedule the vote for this afternoon instead of this morning. The drama in the States will ramp up from 7 AM EST forward since that is when the first meetings between republican politicians will begin.
The banks lead the upside with BCS up +0.9%. HSBC and CS are trading over +1% higher. Energy stocks such as Total lag. Rio Tinto +0.5%. Merck is up +2.3% on success with its skin cancer drug. Novo Nordisk trade lower. Biotech Biotest collapses -5%. Nestle is trading lower. Engineering company Smiths Group rallies +3.7%. Holding company Bollore -4.4%.
British police announce two more significant arrests in the London terror attack. The authorities say nine arrests are made thus far concerning the terrorist attack. A woman that was arrested is released from custody. Business is getting back to normal in London.
France Q4 GDP is up +1.1% missing the +1.2% expected. On the positive side, the France PMI Mfg Index is 53.4 above the 52.4 expected. Services PMI is up a big 58.5 versus the 56.1 expected. The France Composite PMI is 57.6 versus 55.8. The PMI data is strong.
In the French presidential race, disgraced Fillon accuses President Hollande of plotting to destroy his presidential candidacy. Fillon did it to himself with the ongoing corruption scandal where his wife and kids allegedly received money from the government for not performing any work. Fillon was on his way to the presidency but was harpooned by the scandal and he cannot let go of the fact that his hopes of becoming president are likely dashed forever.
S&P +5. Dow +51. Nasdaq +14. Russell +5. VIX 12.89. Euro 1.0780. Dolar/yen 111.33. Pound 1.2484. Mexican peso 18.965. Aussie dolar 0.7615. USD 99.84.
Treasury yields are; 2-year 1.27%, 5-year 1.97%, 10-year 2.43%, 30-year 3.04%.
At 4:30 AM EST (9:30 AM Frankfurt), German Mfg Index is up a solid 58.3 versus 56.5 expected. President Trump will likely step up the rhetoric that Germany is taking advantage of the rest of Europe. Germany Services PMI is 55.6 beating the 54.5 expected. The Composite PMI is 57.0. The PMI data is joyous in Europe this morning. The euro moves from 1.0780 to 1.0793. Dollar/yen 111.26. Pound 1.249. Aussie dollar 0.7617.
Markets are steady and quiet. S&P +5. Dow +50. Nasdaq +14. Russell +5. VIX 12.87. DAX flat. CAC -0.2%. FTSE flat. The Nifty is up +0.4% to 9124.
At 5 AM EST (9 AM London; 10 AM Central Europe), the Euro-area March PMI Mfg Index is 56.2 versus the 55.3. The PMI’s print solid gains this month. DAX -0.1%. CAC -0.4%. FTSE -0.1%. MIB -0.2%. IBEX -0.3%. PSI +0.1%. Portugal is the lone bright spot, albeit by a hair, as the other major indexes sink into the ooze despite the positive economic data. SMI -0.2%. OMX -0.3%.
S&P +4. Dow +42. Nasdaq +12. Russell +4. VIX 12.90. Volatility moves a smidgeon higher so futures move a touch lower. Euro 1.0798. Dollar/yen 111.21. Pound 1.2490. Aussie dollar 0.7620. The Nifty is up +0.4% to 9124.
Treasury yields are; 2-year 1.27%, 5-year 1.96%, 10-year 2.43%, 30-year 3.04%. The 2-10 spread is 116 bips.
The Nifty ends the day up +0.2% to 9108. The BSE loses 89 points, -0.3%, to 29421. The Bombay Sensex loses -0.8% this week. Shed no tears for the hot India market. The BSE has launched from 22.5K to nearly 29.8K over the last year a huge +25%. The United States and other countries are seeking and sealing more business deals in India. The recent regional elections favored PM Modi better than expected so India is riding a wave of optimism.
In a surprising move, Russia lowers its key rate to 9.75% versus the 10.00% expected. Russian ruble 57.4936. WTIC oil is up +0.666% to 48.02. Brent oil 50.87. Gold 1246. Silver 17.63. Copper 2.64.
At 7 AM, S&P +2. Dow +23. Nasdaq +7. Russell +1. VIX 12.95. DAX -0.2%. CAC -0.5%. FTSE -0.2%.
Euro 1.0805. Euro/yen 119.97. Dollar/yen 111.03. Sterling remains steady after the London terrorist attack. Pound 1.2484. Euro/pound 0.8656. Mexican peso 18.9463. Canadian dollar 1.3362. Dollar/yuan 6.886. Indian rupee 65.4113. Aussie dollar 0.7614. USD 99.66.
Finish Line is finished after FINL crashes -15% on earnings. Chip favorite MU catapults +13% higher. KBH +0.2%. GM -12%. TWTR +1.4%. Twitter is considering a subscription-based service for the platform for professional users.
Retailer M loses -1.3% after the executive changes with Terry Lundgren moving from CEO to chairman. UAA bounces +4% on a Jefferies upgrade. Charts indicate that Under Armour should develop a basing pattern going forward and recover from its 21-month crash. AAPL is up +0.3% on a Nomura upgrade. SKX runs +2.7% higher after Cowen upgrades Skechers.
Four Fed heads are yapping today beginning with Evans the uber dove that has turned a hair hawkish. Evans provides a message for a childhood education conference in Washington, DC, but does not discuss monetary policy.
Fed’s Williams says raising rates three or four times (including the March hike) this year “makes sense.” Fed’s Bullard is against two more rate hikes this year but is open to one additional hike. Bullard expresses concern over the Federal Reserve becoming too aggressive with rate hikes this year.
Durable Goods Orders are up +1.7% for February beating the +1.5% expected but below the prior revised-higher 2.3%. These New Orders are up +5.0% year-on-year above the prior -0.1%. Ex transportation is up +0.4% month-on-month versus the +0.8% expected and prior +0.2%. Ex transportation is up +4.6% year-on-year above the prior +2.7%. Core capital goods are down -0.1% month-on-month missing the +0.5% expected and below the prior +0.1%. Year-on-year is up +2.7% above the prior +0.7%.
The new moon peaks on Monday evening and stocks are typically weak moving through the new moon. There may be slight seasonal softness at the beginning of next week moving into Tuesday. Conversely, counteracting the negative seasonality is end-of-quarter (EOQ1) window dressing. Money managers may trim back on positions that rallied strongly this month which would reinforce weakness due to the new moon.
Other managers, however, that missed the recent rally in stocks such as Apple, will buy AAPL to dress-up the quarterly report and show clients that they are in the stock (even though they missed the ride higher). This window dressing activity typically creates buoyancy in the stock market.
AAPL is up from 115 to 142 in Q1 (January, February, March) with another week to go an astounding +24% gain in three months. Traders are throwing money at Apple with reckless abandon. Billionaire Warren Buffett, who once said he would never invest in tech stocks since he does not understand the sector, is building a huge and growing position in the tech giant and all-in for AAPL stock. No doubt that those worshipping at Buffett’s altar each day are chasing into Apple stock believing that the Oracle of Omaha knows the path forward. Are the blind following the blind?
The EOM and EOQ1 is next Friday, 3/31/17, and the monthly charts will print final numbers for March. The S&P 500 started March at 2364 and with the SPX at 2346 the month is currently down -0.8%.
US stocks begin trading higher. The SPX jumps from 2346 to 2351. The PMI Mfg Index Flash is 53.4 a five-month low missing expectations and below the prior 54.6. Services PMI is 52.9 missing estimates and below the prior 54.0. The Composite PMI is 53.2 missing the estimates and below the prior 54.3. Three strikes and you’re out. The purchasing manager data is disappointing. Backlogs are falling. Company plans for hiring employees are waning. Business and customer sentiment is turning cautious. This data is troubling but it is only one data set.
Stocks remain buoyant with the SPX at 2354 and the bulls running the show with the AHCA vote ahead. The House tentatively schedules the vote on Trumpcare for this afternoon. The situation is very fluid. The AHCA bill does not appear to have the votes required for passage so it is a mystery why President Trump and Speaker Ryan keep pushing the matter forward. Stocks peak at 11 AM and begin rolling over as the AHCA bill will probably fail today. SPX 2352.
Fed’s Dudley says, “The US economy will cope just fine” with further rate hikes. Dudley says, “We want to make monetary policy less accommodative.” Humorously, since the Federal Reserve and other central bankers are the market for the last eight years creating a perceptual stock market rally, why stop now?
The European trading session ends mixed. The DAX finishes up +0.2% to 12064. The CAC drops -0.2% to 5021. The footsie is down marginally to 7337 a palindrome. The MIB ekes out a tiny gain to 20188. The IBEX loses -0.2% to 10309. The PSI gains +0.4% to 4688. The action is flat with Portugal leading the way higher.
For the week, Germany’s DAX loses -0.3%. France’s CAC is down a tiny -0.2% this week. London’s FTSE drops -1.2%. Italy’s MIB gains +0.6% this week. Spain’s IBEX gains +0.6%. Portugal’s PSI rallies +1.6%; the sick man of Europe outperforms all others this week. Traders are chasing into beaten-down stocks.
At 1 PM, the BHI Oil Rig Count is up 21 rigs to 652 rigs up for 10 consecutive weeks and up every week this year except one. The Saudi’s wipe beads of sweat off their foreheads as the North American oil fields continue to ramp up production. WTIC 47.79.
At 2 PM, the GOP does not believe it has the votes to pass a bill. The S&P 500 is up 1 point at 2346. The HOD before lunch was 2356. Stocks are sinking on news that the AHCA bill may be delayed otherwise it will fail on a vote. The Dow is down 30 points to 20625. The Nasdaq Composite is up 17 points, +0.3%, to 5835. The Russell 2000 is up 3 points, +0.2%, to 1356. VIX 13.36.
Treasury Secretary Mnuchin repeats his prior proclamation that tax reform will be approved by Labor Day (9/4/17). Healthcare stocks are trading all over the map up one minute and down the next reacting to political soundbites. XLV is down -0.1% but was up +0.6% a couple hours ago. CYH jumps +7% and THC jumps +6%.
WTIC oil is up +0.7% to 48.05. Brent oil is up +0.6% to 50.87. Natural gas is up +0.666% to 3.07. Gold 1248. Silver 17.74. Copper is down -0.4% to 2.6335. Euro 1.0803. Euro/yen 119.83. Dollar/yen 110.93. Pound 1.2493. Euro/pound 0.8647. Indian rupee 65.415. Mexican peso 18.7979. Canadian dollar 1.3371. Dollar/yuan 6.8837.
Treasury yields are; 2-year 1.25%, 5-year 1.93%, 10-year 2.41%, 30-year 3.01%.
The negativity around the likely failure of the AHCA vote accelerates. Stocks begin dropping like a stone. The House leadership continues to say a 3:30 PM vote on Trumpcare will occur.
The SPX sinks 4 points, -0.2%, to 2341 and continuing lower. The Dow drops 69 points to 20587. COMPQ 5817. RUT 1352. The Russell 2000 takes out yesterday’s lows. VIX 13.92. WTIC oil 48.01. Brent 50.88. Natty 3.07. Gold 1250. Silver 17.77. Copper 2.6325.
Treasury yields are; 2-year 1.24%, 5-year 1.93%, 10-year 2.40%, 30-year 3.00%.
Euro 1.0806. Euro/yen 119.72. Dollar/yen 110.78. Pound 1.2498. Euro/pound 0.8647. Indian rupee 65.415. Mexican peso 18.8031. Canadian dollar 1.3383. Dollar/yuan 6.8837.
SPX 2339. INDU 20561. COMPQ 5871. RUT 1351. The VIX tags 14.00.
Treasury yields are; 2-year 1.25%, 5-year 1.93%, 10-year 2.40%, 30-year 3.00%. The 2-10 spread is down to 115 bips representing an ever-flattening yield curve.
At 3:12 PM EST, the Dow Jones Industrials are down more than 100 points at 20557. The SPX collapses 10 points to 2336.
Stocks bottom and begin recovering as traders realize that, if the AHCA bill fails, President Trump will move on to reforming tax laws which is Wall Street’s number one preference.
At 3:24 PM, there are debates occurring on the floor of the House that will continue for another hour so the vote may not occur until around 5 PM. If it continues to appear that the vote on Trumpcare will fail, House Speaker Ryan will likely pull the bill to avoid further humiliation for the republicans. SPX 2339.
At 3:30 PM, a GOP conference is occurring and minutes later insiders are saying the Trumpcare bill will be pulled. There are not enough votes for passage. Speaker Ryan plans to comment at 4 PM. The republican conservatives called Trump’s bluff and the president blinked. The president did not seem to know what was even in the new American Healthcare Act he touted. It is a big republican mistake to pull the bill twice in two days. It was as if President Trump was hoping and wishing the bill would pass, or, perhaps he thought strong-arming the conservatives would win the day. Either way, the president loses and American voters are scratching their heads since the troubles with the ACA will continue.
Healthcare stocks are trading erratically all over the map. CYH jumps +9%. THC +7%. LPNT +3.5%. XLV +0.1%. UNH is up +2% but rolling over.
SPX 2341. INDU 20572. COMPQ 5824. RUT 1352. VIX 13.60.
Fed’s Williams, speaking for the second time today, says, “We need to get inflation back to 2% and keep it there.” Williams prefers to see elevated inflation to make up for the past years of low inflation a hawkish view.
Stocks rally higher on news of the cancellation of the Trumpcare vote. Global traders are already focused on tax reform that is promised by the end of the summer.
SPX 2347. The Dow is down only 46 points, well off the lows, at 20610. COMPQ 5832. RUT 1355.
At 3:40 PM, the VIX plummets from 14.12 down to 13.05 helping to boost stocks higher into the closing bell. Euro 1.0813. Dollar/yen 110.88. Sterling 1.25.
Altaira Capital Partners technician Ralph Acampora continues to tout the upside for stocks proclaiming a Dow 22K target for this year. No matter what occurs in markets or geopolitics, investors remain bullish on the stock market with a ‘buy the dip’ mentality.
At 3:42 PM, the VIX drops to 12.86. The four major averages are flat or positive on the session. SPX 2348. INDU 20631. COMPQ 5840. RUT 1358. The stock market continues to react to news bites from politicians.
Treasury yields are; 2-year 1.26%, 5-year 1.94%, 10-year 2.41%, 30-year 3.02%. German bund 0.40%. Japan 10-year yield 0.066%. UK gilt 1.20%. France 10-year yield 0.99%.
It is stupid that President Trump forced a vote to occur today, which is cancelled again. He did not have the votes so it made no sense. Now he looks weak having to cancel the vote for the second time in two days. It is as if he was hoping and wishing that the conservative branch of the republicans would magically change deep principles they believe in just to hand him a winning vote on a weak and convoluted healthcare bill that does not replace Obamacare; it is simply a revision to the ACA.
In Moscow, Russia, French presidential candidate Le Pen meets with President Putin and says she would be willing to lift sanctions and perhaps accept the annexation of Crimea. Le Pen proclaims, “It is the world of Trump and Putin.” She is lying down in bed with the Ruskie murderer and obviously wants it to be a world of ‘Trump, Putin and Le Pen’. Le Pen believes the bold move will help her poll ratings and election chances. Time will tell. People may be disturbed by her coziness with Putin. President Trump remains under scrutiny due to his friendliness towards Putin during the US campaign and transition period.
In Kiev, Ukraine, Denis Voronenkov, a Kremlin critic, is murdered in broad daylight on the street and his bodyguard wounded. The assassination smells of Russians state-sponsored terrorism. Voronenkov was once part of the Russian hierarchy and defected to Ukraine one year ago. Voronenkov knew many details about Russian corruption including money laundering and illegal smuggling. Russia denies that they target political opponents; of course they do. Putin is an ex KGB (Russian spy agency) agent that can order the killing of any detractor that is gaining opposition power. Once KGB, always KGB.
MU +7.4%. Semiconductors lead higher this week. CNC +5.2%. UAA +4%. HCA +3.5%. TSLA +3.3%. WDC +2.6%. CERN +2.2%. REGN +2.2%. NKE runs +1.8% higher.
MLM -2.9%. FLR -2.5%. NUE -2.4%. VMC -2.3%. CI +2.3%. MYL -1.6%. NCLH hits a reef sinking -1.2%. GS loses -1.5% dragging the Dow Industrials Index lower. DD -1.2%. NBR -2%. ELY -1.8%. SEE -1.7%. TXT -1.6%. Defense bigwig and missile maker RTN loses -1.4%.
US stocks end the day mixed with the S&P 500 and Dow lower but the Nasdaq Composite and Russell 2000 higher. The SPX ends down 2 points, -0.1%, to 2344. The 50-day MA support is at 2331. Price is in the neighborhood of the 50-day so it may want to kiss that level before bouncing with a strong relief rally. The S&P 500 lost more than -1% in one day on Tuesday for the first time in 110 days (since October 11). The bulls have ruled the stock market since the Trump election in early November 2016 five months ago.
INDU loses 60 points, -0.3%, to 20597. The 50-day MA support is at 20449. The COMPQ finishes 11 points higher, +0.2%, to 5829 back-kissing its 20-day MA resistance at 5857 during the session and spanked lower. The RUT finishes up 1 point, +0.1%, to 1355.
Copper started the downward slide in equities this week. Retail stocks and banks fell next. Volatility then spiked sustaining the negativity. The VIX ends the week at 12.96 under 13. The high for the week is at 14.16 above the 200-day MA at 13.56 which is an important short-term market signal. Market bears always win with the VIX above the 200 while bulls always win below the 200. Obviously, the most negative price action occurs this week with the VIX above 14 a short time ago. The bears, short-sellers, need the VIX back above 13.56 if they want to create stock market mayhem next week.
For the week, the S&P 500 loses -1.4%. The Dow Jones Industrials drops -1.5% this week. The Nasdaq Composite loses -1.2%. The Russell 2000 finishes the week down -2.7%. The small caps took it on the chin. Tech held up the best in the down week.
Sectors are mixed this week. Chips, biotech and utilities lead the upside. SOX +0.8%. IBB +0.5%. XLU +0.4%. XLK +0.1%. XLV +0.1%. XLF -0.1%. XLRE -0.1%. XHB -0.2%. XLI -0.3%. XLB -0.9%. XLE -1.8%. Healthcare is flat. Basic materials and energy stocks lead the markets lower this week.
The AGMANHASFUN (“A G-Man Has Fun”) stocks, that have led the gains in the broad stock market over the last three years, finish the week mixed. Alphabet is the big loser. GOOGL (Alphabet) -4.3%. GE -0.5%. MSFT +0.2%. AAPL +0.5%. NFLX -2.1%. HD -1.3%. AMZN -0.8%. SBUX +1.9%. FB +0.4%. UAA +1.4%. NKE -2.5%. This week in the ’at-leisure’ apparel and sportswear arena, Under Armour takes the prize as Nike is slapped. LULU is down -0.5% this week as the ladies have enough pairs of yoga pants in their closets.
It is interesting to note that the stocks most impactful on the physical world, General Electric and Home Depot, sink lower while the virtual world of stocks such as Facebook and Apple float higher. Starbucks is a winner this week. During what should be the most productive hours of the day, tech savvy young adults are drinking coffee lattes with their heads buried in smartphones messaging and tweeting to each other how hip, cool and intelligent they all are.
West Texas Intermediate Crude oil slips -2.7% this week to 47.97 under the 50-week MA at 48.43. Price will pivot from this level early next week depending on how the Sunday OPEC meeting goes. Brent oil loses -1.2% to 51.12 bouncing off its 50-week MA at 50.30. NATGAS explodes +7% higher this week with natty prices running from 2.97 to 3.15 wall-to-wall. The very long-term 200-week MA resistance is at 3.24. The 20-week MA resistance is at 3.18 which price is currently testing and will likely bounce or die from here.
Gold gains +1.5% to 1249 this week. The yellow metal jumps from 1197 to 1253 over the last two weeks a +4.7% gain in that period. Silver gains +1.9% this week to 17.75. Both the 50-week and 200-week MA resistances are at 17.85-17.91 so this is a strong ceiling and it would be a big deal if the silver price shines above.
Copper loses -2.3% to 2.63. Price dances between the 20-week MA at 2.62 (support) and 200-week MA at 2.71 (resistance). Copper will choose the direction ahead by exiting this bracket in one direction or the other. Copper is extremely important to broad stock market direction currently.
After the bell, economic data shows a US stock market median PE at 19 which is at or above the October 2007 market top and the 2000 dotcom bubble top. No one notices since they are too busy drinking central banker wine and buying stocks.
S&P Global and CNBC report that S&P 500 share buybacks (stock repurchase programs) fell -6.3% in 2016. Buybacks, fueled by central banker easy money, are the mother’s milk of higher stock market prices for the last few years. The central bankers are the market. As buybacks fade over the intermediate term forward, overall stock market prices should fade.
President Trump does not take responsibility for the failure of the Trumpcare bill. No one should be surprised at that; his personality would never admit failure. Obamacare trumps Trumpcare. The president instead blames the democrats for not supporting the new AHCA bill. Trump does not speak badly about anyone in the Republican Party (the conservative Tea Party Freedom Caucus would not support the bill) since he will need them going forward for other legislation such as tax reform.
House republican Speaker Ryan admits defeat of the bill and says, “Obamacare is the law of the land” and “We will be living with Obamacare for the foreseeable future.” The republicans had said for eight years they had a plan to fix the ACA mess and they did not. President Trump promised to repeal and replace the Affordable Care Act but he failed. Of course the democrat-leaning news outlets, which account for 70% of the US media, are ridiculing Trump and hyping the president’s failure.
President Trump says, “I never said (I would) repeal and replace (Obamacare) in 64 days.” The orange-headed dolt is on tape on the campaign trail touting those exact words. These types of statements hurt the president’s credibility. It is easy to bring up the tape on YouTube where Trump clearly says, many times, he will repeal and replace Obamacare. He should admit defeat and move on instead of playing baby games. Obviously, the president does not want to be tainted by the failure of the AHCA bill. Trump squandered political capital on the new American Healthcare Act bill and ended up with bupkis.
30% of the US media provides the news with a republican slant and supports the president’s decision to pull the bill. The republican’s stress that President Trump will move on to tax reform which is the favorite topic of Wall Street, big business and any American. The promise to pivot towards tax reform helps water down the negativity around the failure of the Trumpcare bill.
President Trump will be given a free pass for now. Most Americans realize that the Affordable Healthcare Act is a complex disaster and mess created by President Obama. However, there is a new five-month timer that begins ticking for President Trump that will impact his presidency. Treasury Secretary Mnuchin promised that tax reform will be passed through Congress by Labor Day (early September) and stuck to that proclamation today.
If President Trump’s tax reform bill is delayed in the coming weeks, or if the tax reform bill becomes bogged down in committee squabbles, that would seriously damage the president going forward. If the president provides tax reform by Labor Day, signed and sealed, more Americans will jump on the Trump train and cheer the orange-headed showman’s negotiating skills and his popularity would improve. President Trump has five months to produce tax reform and this test is completely on his shoulders. He better get busy. Tick tock.
The government has missed the boat on healthcare since they never sat down to understand the problems. President Obama has created a mess for America with the ACA healthcare act. The Einstein’s in the government need to understand that there are millions of Americans that will never use or seek healthcare even if insurance was offered for a few dollars. Millions of people live life each day unconcerned and when they become ill or injured they simply go to the emergency room. This behavior will never change. If you do not properly understand the problem that you are trying to fix, you will never find the best solution.
THURSDAY 3/23/17; London Terror Attack Aftermath; Fed Speak Including Fed Chair Yellen; New Home Sales; AHCA (Trumpcare) Vote is Delayed
S&P +4. Dow +29. Nasdaq +9. Euro 1.0794. Dollar/yen 111.25. Pound 1.2474. Dollar/yuan 6.8819. Aussie dollar 0.7671.
WTIC oil 48.22. Brent oil 50.64. Natural gas 3.02. Gold 1247. Silver 17.54. Copper is up +0.3% to 2.638.
Treasury yields are; 2-year 1.25%, 5-year 1.94%, 10-year 2.40%, 30-year 3.02%.
Chinese Premier Li arrives in Australia for a visit to discuss trade and other matters. Concern increases that iron ore demand will trail off going forward. Aussie dollar 0.7658.
Australia’s ASX 200 begins trading +0.1% higher. Aussie banks remain soft. New Zealand NZ50 is down -0.3%. The RBNZ leaves the official cash rate unchanged at 1.75%.
Five people are killed in the London terrorist attack yesterday including the attacker and 40 others are injured several critically. There is lots of police presence around London and the city promises to open the Westminster Bridge and carry on with business as usual.
The terrorist drove a car across the Westminster Bridge critically injuring people and killing many others. Cars are the new favorite weapon of the radical Islamists. Just like you should never blame guns for a nutcase going on a murderous rampage, you cannot blame cars. It is equally stupid to expect to remove all guns from society as it would be to remove all cars.
The man then jumped from the car wielding a knife murdering a bobby (police officer) and was shot dead by another bobby. The flags in London are flying at half-mast. UK authorities are raiding several locations connected to the mass murderer and making arrests. Unofficial reports say the killer was a Muslim man but authorities will not release a name or discuss the suspect. London Mayor Sadiq Khan, a Muslim, stresses the need to “protect our values” and “stand against terrorism.”
The NIKK is trading flat with the Topix marginally negative. ASX 200 -0.1%. KOSPI +0.3%. Asia stock indexes are trading sideways in a quiet and uninspiring session and finish the session on the positive side.
S&P +4. Dow +5. Nasdaq +3. Russell +3. VIX 12.65. WTIC 48.28. Brent 50.86. Natty 3.03. Gold 1247. Silver 17.56. Copper 2.638.
Euro 1.0793. Dollar/yen 111.22. Pound 1.2482. Dollar/yuan 6.8878. Aussie dollar 0.7646. The Aussie dollar moves lower on worries that iron ore and other commodities are rolling over to the downside.
Treasury yields are; 2-year 1.26%, 5-year 1.95%, 10-year 2.41%, 30-year 3.02%.
The NIKK ends up +0.2% to 19085. The ASX 200 gains +0.4% to 5708. The KOSPI is up +0.2% to 2173. The SSEC gains +0.1% to 3249. The HSI is up a hair, call it flat, at 24328. The Nifty is up +0.3% to 9061.
At 4 AM EST (8 AM London; 9 AM Frankfurt), European indexes are trading flat at the open. Banks and pharma stocks lead the upside. Miners are soft in the early going. Fingerprint Cards gains +3.2%.
Euro 1.0793. Euro/yen 120.05. Dollar/yen 111.23. Pound 1.2479. Euro/pound 0.8649. Mexican peso 19.0175. Canadian dollar 1.3344. Aussie dollar 0.7641. USD 99.75.
S&P +2. Dow -6. Nasdaq flat. Russell +2. VIX 12.70. WTIC 48.25. Brent oil 50.82. Natty 3.03. Gold 1247. Silver 17.56. Copper 2.64.
The ECB is staging its final TLTRO (Targeted Long-Term Refinancing Operation) today. Demand for this fourth and final TLTRO should hit 100 billion euros ($108 billion). Banks have gorged on the program taking on big loans. The easy money sends European stocks higher. The central bankers are the market.
The Philippines central bank maintains its key rate unchanged at 3%. In India, the Nifty is up +0.6% to 9086.
US Treasury yields are; 2-year 1.26%, 5-year 1.94%, 2.41%, 30-year 3.02%.
At 5 AM EST (9 AM London), London officials are asking media outlets to not reveal the identity of the terrorist. Hiding the Muslim identity from the public only serves to fuel further distrust of governments.
The UK and France have created a nightmare for themselves going forward by allowing cloistered Muslim communities, no-go zones, where police are afraid to enter, to exist. The Islamic terrorists receive support from the Muslim communities. The United States will learn from the mistakes of the UK and France over the last 40 years.
The US must enforce a strong assimilation program for any Muslims coming to America and make sure they realize the Constitution always supersedes Sharia law with zero exceptions. The Muslim communities in the UK and France are operating as a country within a country. The stupid and irresponsible politicians allow Sharia law to take precedence over Western laws in the UK and France leading to their problems. It is difficult for the authorities to ferret out the Islamic terrorists from these cloistered communities but rest assured that law enforcement has already inserted undercover agents and are paying off informants to gain intelligence.
The no-go zones in areas of France and the UK are so dangerous that police will not enter the areas at night. If a Western woman wearing a skirt would walk into these zones she would likely be beaten, raped or worse.
At 5:30 AM EST (9:30 AM London), police (bobby’s) assemble on the Westminster Bridge and conduct a moment of silence to honor the slain bobby that honorably performed his job by preventing the deranged Muslim from entering parliament yesterday.
UK Retail Sales are up +1.4% handily beating the +0.4% expected. The pound rises to 1.25. DAX +0.2%. CAC -0.1%. FTSE -0.1%.
US futures catch a bid as global traders ignore the UK terrorism. S&P +4. Dow +10. Nasdaq +4. Russell +4. VIX 12.68. Traders know that central bankers will continually support markets so there is never any need to be concerned about stock markets selling off. The central bankers are the market.
At 6:30 AM EST (10:30 AM London), S&P +2. Dow -9. Nasdaq -2. Russell +2. VIX 12.76. DAX +0.2%. CAC -0.2%. FTSE -0.1%. MIB +0.4%. IBEX +0.1%. PSI +0.2%.
Euro 1.0782. Euro/yen 119.66. Dollar/yen 110.99. Pound 1.2505. Euro/pound 0.8621. Mexican peso 19.0097. Canadian dollar 1.3332. Dollar/yuan 6.8877. Indian rupee 65.50. Aussie dollar 0.7653.
WTIC oil is up +0.6% to 48.34. Brent oil gains +0.6% to 50.92. Natural gas is up +0.5% to 3.03 with inventory data four hours away. Gold 1248. Silver 17.60. Copper 2.64.
Treasury yields are; 2-year 1.25%, 5-year 1.94%, 10-year 2.41%, 30-year 3.02%. The 2-10 spread is 116 bips.
At 6:33 AM EST (10:33 AM London), UK PM Theresa May begins speaking at parliament. May discusses the terrorist attack. May proclaims, “We are not afraid; our resolve will not waiver.” May says, “The terrorists will not win.” Pound 1.2506. Sterling is resilient helped by the strong retail sales report.
May says the injured people in the terrorist attack on Britain includes three French children, four Romanian’s, one Irish, one Chinese, one Italian, one American and two Greeks. The UK government is in contact with all countries impacted by the Islamic radicalism.
Authorities continue raids in Birmingham and London arresting eight suspects. The UK continues to refuse to release the murders name. The mass murderer is a British-born citizen that had become radicalized from Islamic teachings.
In the States, the drama with the AHCA healthcare bill vote is coming down to the wire. The republicans are working on a last-minute deal to find agreement to pass the bill but it remains shaky with the clock ticking. The vote on the new American Healthcare Act will likely take place late this evening.
At 7:24 AM EST, S&P +5. Dow +18. Nasdaq +7. Russell +4. VIX 12.61. DAX +0.4%. CAC +0.2%. FTSE flat. MIB +0.666%.
Euro 1.0786. Dollar/yen 111.04. Sterling 1.2505. Mexican peso 18.9757. The peso strengthens with the currency pair moving from a 19-handle to an 18-handle. Canadian dollar 1.3327. Dollar/yuan 6.8877. Indian rupee 65.52. Aussie dollar 0.7636. The Nifty finishes the session up +0.6% at 9086.
ACN drops -2.4% after reporting earnings that beat on the top and bottom lines. Ag king CAG slumps -1.9% after beating on EPS but missing on the top line.
TEVA rises +0.7% after confirming that 6K employees will be axed and new hires will not be brought on as workers retire or quit. Less employees performing the same amount of work increases productivity and sends the stock price higher. No wonder many parents miss their kid’s soccer game, however, it is better to have a job than not.
PPG slips -0.5% on news that the paint king may go hostile in its bid for Akzo Nobel. RACE races +2.1% higher on a C upgrade. WFM will need a clean-up in aisle four after dropping -1.4% on a UBS downgrade.
Cybersecurity company FEYE catapults +8% higher on a GS upgrade. Do you think that Goldman Sachs built a large position in FireEye on recent weakness knowing that the stock would pop big once they issued a buy rating? Wall Street is a rigged insider’s game.
Discount retailer DLTR gains +1.1% on a CS upgrade while DG sinks -1.1% on a downgrade. Grocer KR rises +2.2% and SVU jumps +6.9% on RBC upgrades. After last evening’s earnings releases, PVH leaps +7.1%. FIVE +6.8%.
Jobless Claims are up 15K to 258K well above the expectations. Companies drop-kicked lots of employees out the door last week. The four-week moving average is at 240K, however, remaining subdued and at multi-decade lows.
Euro 1.0777. Dollar/yen 110.97. Pound 1.2493. Mexican peso 19.0169. Aussie dollar 0.7640. USD 99.81.
WTIC oil 48.21. Brent oil 50.82. Natural gas is up +1% to 3.04. Gold 1249. Silver 17.62. Copper is 2.64.
S&P +5. Dow +16. Nasdaq +8. Russell +5. VIX 12.65.
Federal Reserve Chair Yellen speaks in Washington, DC. Yellen is speaking about childhood poverty and how the poor can face economic challenges ahead. Yellen avoids commenting on monetary policy. The chair says growing up poor makes it harder to succeed. Of course it does. She neglects to mention, however, that her direct actions at the Federal Reserve over the last nine years has focused on making the wealthy filthy rich through big stock gains at the expense of common and poor Americans.
The Fed’s obscene money-printing schemes have pumped stocks higher for eight years. The central bank’s easy money is used to finance stock repurchase programs (buybacks) that pump stocks higher creating even more wealth for the rich. Too bad that only one-half of the country owns stocks. Yellen should save her crocodile tears for something else rather than wax faux concern for the huddled masses. Her policies and actions go directly against the concern she espouses. In the basement of the Eccles Building, the Federal Reserve members, greedy investment bankers and corrupt politicians comingle in a sick and obscene financial orgy that would make Caligula blush.
S&P -1. Dow -30. Nasdaq -4. Russell +1. VIX 12.80. Euro 1.0788. Dollar/yen 110.72. Pound 1.2502. Aussie dollar 0.7633.
DAX +0.2%. CAC -0.1%. FTSE -0.2%. Copper turns negative down -0.3% to 2.623 which creates sogginess in futures and stocks.
Treasury yields are; 2-year 1.24%, 5-year 1.92%, 10-year 2.39%, 30-year 3.01%.
US stocks begin trading lower. The S&P 500 is down 5 points, -0.2%, to 2343. The Dow sinks 35 points, -0.2%, to 20626. The Nasdaq Composite is down 14 points, -0.2%, to 5807. The Russell loses 2 points, -0.2% to 1343. The major indexes are driven uniformly lower by the computer algorithms. The robots are firmly in charge this morning as markets idle until news occurs concerning the AHCA vote in the House.
VIX 12.98. The 200-day MA is at 13.56. The stock market will collapse if the VIX moves above 13.56 but the bulls are okay if they can keep volatility under 13 and moving lower.
Healthcare stocks are in focus with the AHCA vote on tap. XLV +0.1%. UNH -0.7%. ANTM -0.6%. CI +0.1%. HUM -0.2%. CNC -4%. MOH -1%. Centene and Molina are impacted by any changes in Medicare. Automakers drive into a ditch. F -1.5%. GM -1%. Fiat hits a tree. FCAU -2.8%.
Retail stocks are strong. XRT +0.7%. NKE +2%. PVH +8.2%. FIVE +8.8%. WFM -1%. DG -1.9%. DLTR +1.1%. Tech is soft. XLK -0.3%. AAPL -0.3%. Materials are higher. XLB +0.3%. Utilities jump higher with XLU up +1.1% at record highs. Markets are biding their time until the AHCA vote.
Euro 1.0784. Dollar/yen 110.87. Pound 1.2511. USD 99.7666.
DAX +0.1%. CAC flat. FTSE -0.2%. MIB +0.3%. Credit Suisse is contemplating selling stock to boost capital reserves (dilution). Deutsche Bank, the sick bank of Europe that may bring the whole shooting match down in the future, DB, trades -0.9% lower. RBS +1.9%.
WTIC 47.80. Brent 50.45. Natural gas 3.03. Gold 1252. Silver is down 0.666% to 17.69. Copper 2.62.
Treasury yields are; 2-year 1.24%, 5-year 1.92%, 10-year 2.39%, 30-year 3.00%. The 2-10 spread is 115 bips. German bund 0.397%. Japan 10-year yield 0.05%. UK gilt 1.18%. France 10-year yield 1.00%. The France-German spread is down to 60 basis points indicating that Macron is favored to win the French presidency over Le Pen. The France 10-year yield may want to slip below 1%.
The US-German 10-year yield spread is 199 bips under the 200 bip level. The bund is remaining steadier as the US 10-year yield drops from 2.62% to 2.39% over the last eight days.
At 10 AM, New Home Sales explode +6.1% higher to 592K units blowing out the 565K units expected and prior 555K units and at a seven-month high. Midwest sales outperform while the Northeast sales lag. The average price is a bubblicious $390,400 obviously reflecting the high-end buyers building McMansions.
Existing Home Sales yesterday were disappointing but New Home Sales are joyous. The common Americans struggle to find a nice small home to live in while the wealthy, made filthy rich by the central banker’s easy money over the last eight years are living in luxury without a care or worry. The gap between rich and poor in America is the widest since the 1970’s.
Kansas City Fed Mfg Index is 20 versus the prior 14. New Orders and Backlogs are strong which is encouraging for the economy. WTIC oil 47.63. Gold 1248.
US stocks are flat on the session. The VIX is at 12.86 remaining elevated. Traders are awaiting the fate of the AHCA bill later this evening. More importantly, over the coming hours, the question is whether the vote for Trumpcare is delayed; if so, stocks will likely sell off.
If the AHCA passes the House, it moves on to the Senate for approval and that is a tougher battle than the House. However, President Trump can blame the Senate for stopping Trumpcare if the bill fails and not lose face. The president will be dealt a negative blow if he cannot get the bill through the House.
If the AHCA is approved in the Senate, and it will have modifications, the healthcare bill is sent back to the House. At this point, both chambers will have to agree on the final version of the bill so there is lots of sausage-making that is needed going forward. Markets await the first big test of Trumpcare today.
European indexes begin ramping strongly higher after the final TLTRO program attracts a record 234 billion euros (252 billion) over twice the expectation. 474 banks participate in the free long-term loans. The number is astounding. The easy money pumps the banks and stocks higher. European Banking Index +0.8%. As always, the central bankers are the market.
Treasury yields are; 2-year 1.25%, 5-year 1.94%, 10-year 2.41%, 30-year 3.02%.
Natural Gas Inventories are a 150 BCF draw down. Natty is up +0.5% to 3.03 but begins to reverse and run out of gas. WTIC oil is down -0.7% to 47.70. Brent oil is down -0.6% to 50.36.
SPX 2349. INDU 20666. COMPQ 5820. RUT 1353. VIX 12.92. Natural gas slips -0.6% to 2.99 under 3 after the inventory data.
At 10:43 AM, stocks float higher. Banks and real estate stocks are driving the upside gains. XLF +1.1%. XLRE +0.8%. Regional banks are joyous. KRE +1.8%. STI +2.3%. RF +2.3%. HBAN +2.6%. The SPX is up 5 points to 2353. INDU 20690. COMPQ 5832. VIX 12.76. Mexican peso 18.9792. Natural gas cannot make up its mind up +0.7% to 3.03.
The European trading session ends the session with a strong rally. The DAX finishes +1.1% to 12040. The CAC gains +0.8% to 5033. The FTSE rallies +0.2% higher to 7341. The MIB finishes up +1.1% to 20167. The IBEX jumps +0.9% to 10325. The PSI gains +1% to 4668. Europe is one big party with the final installment of the TLTRO. CS is whacked -2.6%.
UK Metro Police name Khalid Masood as the Muslim murderer in yesterday’s heinous attack near the parliament. The ISIS Islamic radicals claim responsibility for the terror attack and say that Masood is a “soldier for the Islamic State.” ISIS always claims responsibility. The deranged Muslim may have simply radicalized himself by following the teachings in the Quran. The man likely had support and accomplices in the Muslim community that may or may not be caught by police. The cloistered Islamic communities in countries such as Britain and France are breeding grounds for terrorism and serve as a safe place for those seeking to carry out terror attacks.
At noon, Fed’s Kashkari says a stock market drop will likely not trigger a financial crisis. He probably said the same thing in 2008. He says the plan to handle the Fed’s massive balance sheet should be developed “as soon as possible.” Kashkari discusses potential changes that would help the US education system. A 10-Year TIPS Auction takes place at 1 PM.
Stocks peak between 11 AM and 1 PM and roll over to the downside hugging the flatline. SPX 2349. VIX 12.75.
At 3:00 PM, House Majority Leader Ryan cancels a press conference that was planned at the bottom of the hour. There is no word on whether a vote for the AHCA will occur tonight, or not, although it is looking bleak. Markets are flat and steady on the day.
At 3:30 PM, House Majority Leader Ryan delays the vote for the AHCA. Stocks sink on the news. The SPX drops 6 points, -0.2%, to 2342. The Dow drops 28 points, -0.1%, to 20632. The Nasdaq loses 12 points, -0.2%, to 5808. The Russell 2000 is up 6 points, +0.5%, to 1352. VIX 13.15.
XLV -0.4%. UNH -1%. ANTM -0.6%. CI -0.8%. HUM -1.6%. CNC -4%. MOH -2.9%.
Euro 1.0783. Euro/yen 119.48. Dollar/yen 110.80. Pound 1.2519. Euro/pound 0.8613. Mexican peso 18.9764. Canadian dolar 1.3354. Dollar/yuan 6.8863.
WTIC drops -0.666% to 47.72. Brent oil 50.58. Natty gains +1.4% to 3.05 so the result after the inventory data is a few pennies gain.
Treasury yields are; 2-year 1.24%, 5-year 1.93%, 10-year 2.40%, 30-year 3.01%. The 2-10 spread is 116 bips.
PVH +8.5%. TRIP +2.7%. COG +2.7%. NKE +2.7%. DD +1.7%. AAL +2.6%. JD +2.3%. MU +1.6%.
ACN -4.5%. CNC -4%. FDX -3.4%. HRB -2.5%. DG -2.5%. GOOGL -1.4%. MNST -1.2%. FAST -1.4%. UNH -1%.
US stocks end the day lower except for the small caps. The SPX is down 2 points, -0.1%, to 2346. The INDU is flat at 20656. The COMPQ is down 4 points, -0.1%, to 5818. The RUT gains 8 points, +0.6%, to 1353. VIX 13.12.
After the bell, it is game over for GameStop; GME crashes -8.5% after reporting earnings. KBH gains +1.7% on earnings. Homebuilders will have lift tomorrow. MU launches +9.5% on an earnings beat. Micron is up over +150% over the last year. Chips will likely trade higher tomorrow. Micron is a top stock in the top semiconductor sector.
Fed’s Kaplan repeats themes from yesterday saying the FOMC is working towards its goals of full employment and inflation at +2%. Kaplan repeats Kashkari’s earlier statement about the need for a plan to gradually trim the balance sheet. Kaplan says the balance sheet should be reduced in a manner to not unduly affect financial markets.