Sunday, April 15, 2018
WPP CEO Sir Martin Sorrell steps down from the media giant as investigations continue into potential misconduct. After 33 years, Sorrell leaves in potential shame. Roberto Quarta steps into the chief executive post until a replacement can be found. WPP will trade actively in Europe tomorrow.
The new moon peaks at 9:57 PM EST. This is the darkest time of the month. Military forces with superior night vision technology carry out covert raids in these dark overnight periods. The Earth and Moon are at a gravitational inflection point so earthquake activity may increase.
The stock market is typically weak moving through the new moon. The successful Syria airstrikes, however, may instead create market joy to begin the new week of trading.
In the US, today is typically the deadline for filing taxes. When April 15th falls on a weekend the deadline is moved to Monday. However, tomorrow is the Emancipation Day holiday in the District of Columbia. Thus, the deadline for filing taxes this year is Tuesday, 4/17/18.
Many Americans spend the entire weekend trying to complete the Rubik’s Cube of tax forms. Papers and tax receipts are sprawled across the kitchen table. Citizens long to be outside enjoying the spring weather but instead are enslaved by Uncle Sam in a quiet room with a calculator, black pens and blank forms.
Cybercurrencies continue floating higher off multi-month bottoms. Bitcoin 8363. Ethereum 523. Ripple 0.6825. Bitcoin cash 778.44. Litecoin 132.33.
Saturday, April 14, 2018
SPX 2656. INDU 24360. COMPQ 7107. RUT 1550. NIKK 21779. SPASX200 5829. KOSPI 2455. SSEC 3159. HSI 30808. BSE 34193. DAX 12442. CAC 5315. FTSE 7265. MIB 23330. IBEX 9767. PSI 5478.
At 9:30 PM EST Friday evening in Washington, DC (2:30 AM London; 3:30 AM Paris and Frankfurt; 4:30 AM Damascus), President Trump announces precision airstrikes on Syria in response to the use of chemical weapons last week by Syria President Bashar Assad. The UK and France join the United States in the military response.
Trump says the United States “does not want an indefinite presence” in Syria. He calls Syrian President Bashar Assad a monster for gassing his own people. The president proclaims, “We are prepared to sustain this response until the Syrian regime stops its use of prohibited chemical agents.”
US Secretary of Defense Mattis says the airstrikes targeted Syria’s chemical weapons infrastructure and is a “one time shot.” Mattis says, “Right now, we have no additional attacks planned.” Mattis says the strikes “send a message” and the US used about double the missiles as the strike on Syria last year. That strike used 59 Tomahawk cruise missiles and many other smaller missiles. Mattis says the US has gone to great lengths to limit civilian casualties.
Video shows Syrian President Assad casually walking to work at 9 AM local time (2 AM EST; 7 AM London; 8 AM Frankfurt and Paris) pretending all is fine obviously managing the situation with propaganda.
Russian Ambassador Anatoly Anonov says, “A pre-designed scenario is being implemented. Again, we are being threatened. We warned that such actions will not be left without consequences. All responsibility for them rests with Washington, London and Paris.”
At 4:08 AM EST (9:08 AM London), Prime Minister Theresa May speaks concerning the airstrikes on Syria. She says 75 people including children were murdered by chemical weapons in Syria a week ago and hundreds of others injured. The goal of the airstrikes is to stop the use of chemical weapons. The prime minister takes questions from the press. May says, “It was both right and legal to take military action against the Syrian regime.”
May says the airstrikes send a clear message to anyone manufacturing or using chemical weapons. She says, “We are confident of the strikes success.” May concludes her press conference at 4:46 AM EST (9:46 AM London; 10:46 AM Pairs; 11:46 AM Damascus). It is daylight across Europe and the Middle East. Americans begin to rise from slumber on the US East Coast.
Syrian state television shows jubilant troops saying they have thwarted the US attack. The propaganda war begins on both sides.
Iran says the US, UK and France attacks on Syria are a “blatant violation of international laws.” The Russians claim that most of the US Tomahawk cruise missiles were intercepted. Of course they do.
A closed-door meeting of NATO takes place in Brussels to discuss the Syria situation. The UN Security Council calls a meeting to convene in a few hours to discuss Syria. Russia will attend this meeting.
To President Trump’s credit, many nations are unifying against Syria’s use of chemical weapons including the US, UK, France, Jordan, Egypt, Saudi Arabia, UAE and Qatar. The Middle East nations are finally becoming proactive in solving the region’s problems.
Markets will not be able to react to the Syria airstrikes until tomorrow (Sunday) evening US time which is Monday morning in Australia and Asia.
General Motors axes half the employees at its Lordstown, Ohio, plant. Where are all the high-paying jobs that were promised? And the raises? Most people making lower wages are not noticing any significant increases in their pay.
After the tax bill passage at Christmastime, President Trump promised that all American workers would receive pay increases starting in February two months ago. Perhaps this is why consumer sentiment is slipping away under 100 as reported this morning. The have not’s may be losing optimism but the high wage earners, the wealthy, the have’s, dance with glee.
The privileged class in America benefit the most from the tax bill. The rich get richer. The poor poorer. The divide between rich and poor in America is at five-decade highs and only growing wider. Social unrest and other consequences will follow in the United States likely timed when the recession appears.
The UN meeting takes place with only two other countries joining Russia’s side claiming chemical attacks never occurred in Syria; China and Bolivia a client state of China. The filthy communists always stick together.
US Vice President Pence directs a statement at Russia, “You are on the wrong side of history.”
Ambassador Nikki Haley talks to President Trump and communicates a message to all members at the United Nations, “If the Syria regime uses poisonous gas again, the United States is locked and loaded.” Haley proclaims, “When our president draws a red line, our president enforces the red line.”
The US military says 105 missiles were launched at Syria by the US, UK and France. 66 were Tomahawks. The missile numbers are typically unreliable and the military may be releasing misinformation to make it harder for Russia and China to understand the extent of Western fire power. The attack was a slight increase over last year’s strike against Syria. More importantly, the Western Allies unite and coordinate the response.
President Trump says the Syria strike was “perfectly executed” and “mission accomplished.” As the dust settles in Syria and the back-slapping ends, the president needs to communicate a long-term strategy concerning Syria.
FRIDAY 4/13/18; Friday the 13th; Syria Drama; Trade War Rhetoric Softens; VIX 17-Handle; Q1 Bank Earnings Season Begins; JPM; C; WFC; PNC; Fed Speak; Consumer Sentiment; JOLTS Report; US Banks and Stocks Roll Over Intraday; US, UK and France Strike Syria
Today is Friday the 13th so if you are superstitious do not walk under any ladders, or let a black cat cross your path or break any mirrors. Stock, bond and currency traders are a superstitious lot and will be looking over their shoulders all day long.
The day is viewed as bad luck because in the Middle Ages in October 1307, on Friday the 13th, King Philip IV of France rounded up over 600 Knights Templars. The King tortured and murdered the Templars taking their wealth. Greed is a common theme among humans. The remaining noble Knights Templar fled to other lands including America.
Euro 1.2328. Dollar/yen 107.24. Pound 1.4234. Aussie dollar 0.7758. Indian rupee 65.255. Dollar/yuan 6.2915.
S&P -9. Dow -80. Nasdaq -20. WTICoil 66.87. Brent oil 72.02. Natty 2.69. Gold is up 3 bucks to 1338. Silver 16.47. Copper 3.0565.
Treasury yields are; 2-year 2.35%, 5-year 2.67%, 10-year 2.84%, 30-year 3.04%. The 2-10 spread is 48.6 bips.
Asia and Aussie indexes are trading higher. Japan stocks rise on the weaker yen. Banks and materials stocks rally. Amorepacific feels love up +3.6% in South Korea trading.
NIKK +0.8%. Topix +0.6%. ASX 200 +0.2%. KOSPI +0.3%. NZX +0.8%.
Asia stocks are buoyant after President Trump said he is open to reentering the TPP trade negotiations. Trump tweets a new message saying he will only pursue a TPP agreement if the deal he receives is better than the deal offered to President Obama. Trump has an obsession to reverse Obama’s executive orders and other legislation to the greatest extent possible.
The US and Allies are deciding on a response to the Syria chemical attack. On Wednesday, President Trump said an airstrike was imminent but he has backed off that bluster. Secretary of Defense Mattis is pushing back against the president. Inspectors are trying to access the area of the attack in Syria to confirm 100% that chemical attacks occurred and can be linked to President Assad. France says it already has firm proof that Assad’s regime performed the nerve gas attack on its population.
For now, there is calm concerning the pending Syria attack by the West. Trump likely did not want to act when the stock market was trading. The new moon peaks tomorrow night the darkest time of the month when military forces with the superior night vision technology prefer to strike. The attack will probably occur at nighttime in Syria so there is a window each evening of 5 PM EST to 10 PM EST (US East Coast time) for the Tomahawks to begin flying. If the retaliation against Syria does not occur tonight, then Saturday night would be the next window.
The liberal-leaning media such as CNN, MSNBC, the broadcast television channels ABC, CBS and NBC, and other outlets NPR, PBS, Bloomberg, New York Times, Washington Post and Facebook have been slamming President Trump the last few days over the pending Syria attack saying the orange-headed leader is a loose cannon starting World War III. This is no surprise.
Illustrating the bias that controls the American media, these same liberal and progressive talking heads now proclaim that Trump is waiting too long to act against Syria which shows weakness and allows time for Syria, Russia and Iran to prepare for the attack. Trump is always wrong no matter what he does according to the liberal media. The republican media treated President Obama the same way. Such is the United States in 2018. 70% of the media in the US reports the news with the democrat slant while 30% of the news in America is reported with the republican slant.
The republican-leaning media such as Fox News, Breitbart, Drudge, Rush Limbaugh and others cheerlead the president each day saying the imminent air strike on Syria was the best path forward and now saying a patient approach illustrates Trump’s calm leadership skills. All these two-bit television pundits are so predictable. The media hacks cheer their democrat or republican team like adolescent school girls; they contort the news to fit their political beliefs.
Always reference the source of any news article since that tells you whether the information is biased towards the democrats, liberals and progressives or to the republicans and conservatives. More smart Americans are declaring a pox on both the democrat and republican houses.
40% of the US now identifies themselves as independent no longer wanting to connect themselves to the democrat and republican stink. There will always be 20% of the country firmly in the democrat camp and 20% of the US in the republican camp. The remaining 20% support other parties such as the libertarians and Green Party or prefer to stay away from politics all together and not even vote. A decade and more ago, the breakdown was generally 40% democrat, 40% republican and 20% independent. Times are a changin’ as Bob Dylan sings.
The trade war rhetoric between China and the United States is quieter. Also, the US is talking nicer about the ongoing TPP trade negotiations with other Asian nations. The calmness with the Syria situation and trade wars creates a quiet trading session in the Pacific theater to finish the week.
USD 89.80. WTIC 66.92. Brent 71.86. Singapore tightens monetary policy. Moody’s upgrades Indonesia’s sovereign debt.
China reports a surprise trade deficit for March the first in a year. Chinese Exports are down -2.7% and Imports are up +14.4%. The trade war rhetoric may be creating softness in the exports. Chinese stocks trade soft.
India stocks are higher with the Nifty up 30 points, +0.3%, to 10490. BSE +0.3%.
The Asia session is quiet as the trade war rhetoric and Syria attack bluster subsides. The NIKK finishes the session up +0.6% to 21779. The ASX 200 gains +0.2% to 5829. The KOSPI rallies +0.5% to 2455. The SSEC drops -0.7% to 3159. The HSI loses -0.1% to 30808.
For the week, Japan’s Nikkei Index gains +1%. Australia’s SPASX200 rallies +0.7%. South Korea’s KOSPI gains +1% this week. China’s Shanghai Index +0.9%. Hong Kong’s Hang Seng Index rallies +3.2% this week leading Asia higher. The SSEC is struggling to hold its 200-week MA support at 3167 while the Hang Seng fights to hold the 20-week MA support at 30617.
There is an active shooting in incident at a US military base Camp Humphreys in South Korea. A short time later, the incident is verified as a false alarm. On the Korean Peninsula, everyone must be strung as tight as a drum with their buttocks puckered. People make mistakes when they are jumpy.
European indexes are trading flat. DAX +0.2%. CAC +0.1%. FTSE -0.1%. SMI -0.3%. OMX -0.1%. Sage crashes -15%. Hammerson is hammered -12%. Galapagos +3%.
Volkswagen holds a news conference announcing the appointment of Herbert Diess as the new CEO. Muller is out. VW +2.1%. Volkswagen is up +8% on the week.
US futures recover off the overnight lows. S&P -1. Dow flat. Nasdaq -20. Russell -2. VIX 18.27. The Nifty is up 13 points at 10473.
Euro 1.2341. Euro/yen 132.79. Dollar/yen 107.61. Pound 1.4268. Euro/pound 0.8649. Mexican peso 18.1309. Canadian dollar 1.2561. Dollar/yuan 6.2886. Indian rupee 65.225. Aussie dollar 0.7798.
WTIC 67.01. Brent 71.98. West Texas is sticky at 67 and Brent at 72. Natty 2.69. Gold is up 5 dollars to 1340. Silver 16.51. Copper 3.0725.
Treasury yields are; 2-year 2.35%, 5-year 2.666%, 10-year 2.83%, 30-year 3.03%.
India stocks finish the day higher. The Nifty ends up +0.2% at 10481. The BSE Sensex rallies +0.3% to 34193. For the week, India’s BSE jumps +0.8%.
S&P +6. Dow +58. Nasdaq flat. Russell +1. VIX is at 18.06 briefly printing a 17-handle. As volatility drops, futures and stocks pop.
Treasury yields are; 2-year 2.35%, 5-year 2.666%, 10-year 2.83%, 30-year 3.03%. the 2-10 spread is 47.8 bips.
WTIC 67.41. Brent 72.36. Natty 2.68. Gold 1341. Silver 16.53. Copper 3.082.
JPM is up +0.8% after reporting earnings and officially kicking off the Q1 earning season. JPM fluctuates from +0.5% to +1.4%. PNC drops -2% on earnings. FHN +0.5%.
C is up +0.5% on earnings. WFC gains +1.4% on earnings. Five banks report earnings and all five trade higher. The bank earnings are off to a positive start. Futures are buoyant.
S&P +8. Dow +68. Nasdaq +7. Russell +3. VIX 18.06. JPM +0.1%.
DAX +0.7%. CAC +0.4%. FTSE +0.1%.
NFLX rises +1.7% on a glowing upgrade from DB. In a note to clients, Deutsche Bank analyst Kraft proclaims, “What’s evolved with respect to our view on the stock is that Netflix has changed the industry in a profound way and in doing so has given itself a significant lead, making it very difficult for the traditional media companies, or even other big tech companies, to catch up.” NFLX +1.8%.
SLA +2.2%. Tesla CEO Elon Musk says the car company will be profitable in Q3 and Q4. Will this happen or is it more Musk bluster? The chatter about taking Qualcomm private continues. QCOM +2.5%.
AVGO pops +4% which will pump the chip sector higher. Broadcom bounces on a buyback announcement. Financial engineering rules the stock market. The stock repurchase programs continue fueled by easy money from the central bankers. The wealthy cheer the buybacks as stock prices run higher.
Rising equity prices do nothing for one-half of America that do not own stocks. The huddled masses sit on the sidelines watching the rich get richer. Class wars are in America’s future and coming to a town near you.
ZG crashes -6.66% despite providing upbeat guidance. Traders are not buying what Zillow is selling. A barrister spills a café latte onto the dirty linoleum floor at Starbucks after Cowen announces a downgrade. SBUX -1.3%.
DBX drops -5.3% on a Nomura downgrade. LLY rises +0.9% on a BMO upgrade. SEAS drowns -1.4% on news the SEC is investigating violations at SeaWorld.
At 8:30 AM EST, S&P +13. Dow +120. Nasdaq +30. Russell +5. VIX 17.90. WTIC 67.04. 10-year yield 2.84%. DAX +0.8%.
Three Federal Reserve members speak today; Rosengren, Bullard and Kaplan. Fed’s Rosengren is concerned about the US economy overheating. He says more rate hikes may be needed that currently expected. Rosengren is concerned about trade negotiations which pose risks to the economy but he continues flapping his hawkish wings.
Fed’s Bullard highlights the CPI number this week that moves above +2.0% to +2.1%, the Fed’s goal, but says this level held for much of 2016 before retreating. Bullard pushes back against the FOMC Minutes this week that say “all” Fed members expect rate hikes to continue this year. Bullard says he argued against additional hikes at the meeting and is not sure why the minutes stated otherwise. He thinks further hikes may be counterproductive. Chairman Powell’s first meeting is a stutter-step.
JPM +1.3%. C +1.1%. WFC +0.2%. The banks are buoyant after earnings but Wells Fargo is losing ground. PNC is down -2.3%.
S&P +15. Dow +153. Nasdaq +34. Russell +5. VIX 17.81.
Euro 1.2322. Euro/yen 132.76. Dollar/yen 107.75. Pound 1.426. Euro/pound 0.869. Mexican peso 18.0784. Canadian dollar 1.2571. Dollar/yuan 6.2819. Indian rupee 65.215. Aussie dollar 0.7791.
DAX +0.8%. CAC +0.5%. FTSE +0.2%.
At 9:30 AM, US stocks begin trading higher as the futures indicate. The S&P 500 pops 15 points, +0.6%, to 2679. The Dow is up 160 points, +0.666%, to 24645. The Nasdaq Composite rallies 38 points, +0.5%, to 7179. The Russell 2000 gains 5 points, +0.4%, to 1562. VIX 17.80.
As the Apollo astronauts said decades ago, “Houston, we have a problem.” The banks are reversing the pre-market joy. JPM +0.7%. C +1.3%. WFC -1.2%. PNC collapses -3%. CLF +0.4%. KRE +0.3%. The bank earnings look good but traders are selling the initial pop.
Chips are joyous with AVGO up +5% and QCOM +2.1%. SOX +2%. TSLA is up +2.3% after Musk says he does not need additional capital. AAPL is up +0.5% on a Longbow upgrade. NFLX gains +2.4% on the DB upgrade. SBUX -1%.
Treasury yields are; 2-year 2.36%, 5-year 2.68%, 10-year 2.84%, 30-year 3.04%.
SPX 2673. INDU 24559. COMPQ 7158. JPM -0.6%. C -0.7%. WFC -1.4%. DAX +0.4%. CAC +0.3%. FTSE flat.
At 10 AM, Consumer Sentiment is 97.8 missing the 101.0 expected by a mile and well below the prior 101.4. Sentiment falls off a cliff. Gasoline prices are rising so consumers become less optimistic and spend less.
The JOLTS Report is 6.05 million job openings missing the 6.14 expected and well below the prior revised-lower 6.23. Job openings are down -2.8% month-on-month. Job openings are up +7.7% year-on-year while hirings up +4.6%. Employees are staying where they are at and choosing not to look for another job.
The Quits Rate, one of former Fed Chair Yellen’s favorite metrics, is at 2.2% holding steady. If the economy was as strong as touted, the Quits Rate should be driving strongly higher. Instead, over recent months, it is sideways and stagnant. People are not confident about their jobs and the prospect of finding a new job. The Trump administration, Federal Reserve members and television pundits on business news networks, however, profess rainbows and blue skies each day for the economy and markets.
SPX 2661. INDU 24450. COMPQ is at the 7117 palindrome. RUT 1550. VIX 18.26. TRAN +0.4%. WTIC 67.15. Brent 72.24.
In the Syria saga, the US, UK and France have independently tested and verified samples from the Duomo nerve gas attack and verified the chemical attack. Russia, however, says it has tested samples which show no sign of a chemical attack. Of course they do. Russia says the chemical attack never happened and is a story fabricated by the US and Western allies.
The banks kickoff the earnings season by laying eggs. JPM -1.7%. C -1.7%. WFC -2.8%. PNC -3%. The turnaround in the banks creates a negative mood on trading floors.
At 11:30 AM EST (4:30 PM London; 5:30 PM Frankfurt), European indexes finish marginally higher sans Portugal. The DAX gains +0.2% to 12442. The CAC gains +0.1% to 5315. The FTSE ekes out a +0.1% gain to 7265. Ditto the MIB to 23330. The IBEX gains +0.2% to 9767. Portugal is the skunk at the garden party with the PSI finishing down -0.2% at 5478.
For the week, Germany’s DAX gains +1.6%. France’s CAC finishes the week up +1.1%. London’s FTSE gains +1.1% this week. Italy’s MIB is up +1.1%. Spain’s IBEX is up +0.9%. Portugal’s PSI is up +1.1% this week.
SPX 2661. INDU 24421. COMPQ 7123. RUT 1552. VIX 17.80. WTIC 67.71. TRAN +0.6%. FB +0.4%. SNAP -2.9%.
US equities roll over at lunchtime turning negative. The SPX is down 5 points to 2658. The Dow loses 91 points to 24387. The COMPQ loses 24 points to 7116. The RUT slips 5 points to 1552. VIX 17.58. Both volatility and stocks are lower so one of them is wrong.
WTIC 67.48. Brent 72.68. Natty 2.75. Gold 1346. Silver 16.68. Copper 3.0695. Corn -0.9%. Wheat -2.3%.
Treasury yields are; 2-year 2.36%, 5-year 2.666%, 10-year 2.82%, 30-year 3.03%.
At 1 PM, Fed’s Kaplan says two more Fed hikes are likely this year and then perhaps a slowing from there forward. Kaplan says economic growth may be moderating.
The BHGE North American Rig Count is down 4 rigs with US rigs up by 5 and Canadian rigs down by 9. In the US, 7 oil rigs are brought on line with 2 natty gas rigs deactivated. In Canada, oil rigs are down 7 and gas rigs down by 2. Canada is slipping into the muddy spring season when it is difficult to move oil drilling equipment and rigs.
President Trump signs an order to study how the operations at the USPS can be improved to avoid a future bailout. Trump’s detractors immediately say the action is targeting Amazon. The president says Amazon unfairly benefits from the US Post Office. He says America is Amazon’s “delivery boy.”
King Trump and King Bezos battle. AMZN CEO Bezos owns the liberal-leaning Washington Post which often prints derogatory articles on the president. AMZN -1.2%. STMP, a company that provides stamp services, crashes -7.2%. UPS +0.2%. FDX +1.1%. WMT +0.7%.
Former FBI Director Comey, that was fired by President Trump for incompetency and dishonesty, begins a book tour. Comey is a prima donna that loves the spotlight. The small man further damages and disgraces the Federal Bureau of Investigation by hawking a book discussing ongoing investigations. FBI agents cringe as Comey dishes on his final days in office like an adolescent school girl at the cafeteria lunch table.
President Trump wastes no time firing back at Comey saying he is a “proven leaker and liar.” President Trump calls the disgraced FBI director a “slime ball.” The reputations of the spook agencies such as the FBI, CIA, NSA, have suffered a serious blow over the last few years.
Confidence was lost in the spy agencies when it was discovered that the NSA routinely spies on Americans without warrants. In addition, National Security Agency Director James Clapper lied under testimony on Capitol Hill saying data was not collected on US citizens. In truth, all electronic communications by Americans are monitored, recorded and archived.
US citizens cannot trust anything the government spy agencies say. After all, they are spooks; they spy on any one at any time ignoring the US Constitution. This is life is in America in 2018. The US is not a free country it is simply more free than other nations.
Banks collapse after the pre-market joy. XLF -1.5%. JPM -2.7%. The institutions are selling off blocks of JP Morgan Chase stock which is not a good sign for the markets. C -1.6%. WFC -3.4%. GS -1.4%. MS -1.6%. KRE -1.6%. ZION -2.4%. PNC -4.1%. FHN -1.5%. STI -2.5%. STT -1.3%.
At 2:16 PM, stocks are sliding lower. SPX 2662. At 3 PM, SPX 2656. At 3:18 PM, SPX 2646. The computer screens are blood red. It is not a good sign for the stock market to finish the week negative. JPM -3.1%. C -2.4%. WFC -3.4%.
Stocks bottom at 3:18 PM and recover into the closing bell. Many investors likely do not want to hold stocks since airstrikes are imminent against Syria.
GE feels some love up +2.4% in the down tape leading the Dow components. KO +1.1%. XOM +0.8%. MRK +0.8%. PG +0.7%. ALK +6.1%. FFIV +4.5%. CXO +3.2%. APA +3.1%. AVGO +3.1%. TSLA +2.1%. BKNG +1.6%. ULTA +1.4%. STX +1.2%. VRX +3.1%. BHGE +1.4%. ALDR +2.4%.
UAA -4%. PNC -4.1%. GS -1.4%. AAP -3.6%. IBM -1.9%. BA -2.4%. SHPG -3.6%. CTRP -3.2%. WDAY -2.7%. ROST -2.5%. ADSK -2.3%. TXN -2%. AABA -1.8%. ZIOP -4%. ONVO -3.8%.
SPX 2656. INDU 24352. COMPQ 719. RUT 1550. XLF -1.7%. XLE +1.1%.
Euro 1.2336. USD 89.77. Gold 1348. Silver 16.64. WTIC oil 67.24. Brent oil 72.41. Natural gas 2.74. Bitcoin 7950.
At 4 PM EST, US stocks finish lower. The SPX drops 8 points, -0.3%, to 2856. INDU, or DJI, retreats 123 points, -0.5%, to 24360. The Dow Industrials were up 163 points and down 239 points an over 400-points intraday range. COMPQ loses 34 points, -0.5%, to 7107. The RUT drops 8 points, -0.5%, to 1550.
The VIX drops to 17.41 the lowest in three weeks below the 20 and 50-day MA’s. Bulls cannot rejoice until the VIX drops below the 200-day MA at 13.17. Volatility drops today and the stock market drops so one of them is wrong. Either stocks selloff next week with the VIX running higher above 20, or, stocks will rally as the VIX continues sinking towards a test of the critical bull-bear line in the sand at 13.17.
For the week, the S&P 500 gains +2%. The Dow is up +1.8%. Nasdaq Composite +2.8%. Nasdaq 100 gains +3% this week as the FAANG stocks rally. The RUT rallies +2.4% this week. NYA +1.6%. TRAN +2.2%. Chips jump higher this week. SMH +4.4%. SOX +5.1%. XSD +5%. AVGO +8%. NVDA +8%.
The sectors finish mixed on the week. Oil-related stocks catapult higher this week. XOP +7.9%. XLE +6%. Chips lead the parade higher. SOX +5.1%. IBB +4.9%. XLK +3.5%. XLB +2.8%. XLV +2.5%. IYT +2.2%. XLI +1.7%. KRE +1.6%. ITA +1.5%. XLF +1.1%. VNQ +0.5%. XLY +0.5%. XLP +0.3%. XRT flat. VOX -0.4%. XLRE -1.1%. XLU 1-.3%. Airlines nosedive. XAL -1.4%. Homebuilders crumble this week. XHB -2. ITB -2.8%.
The 23 high-flying stocks that have led the broad stock market higher for several years finish the week higher sans Home Depot, Nike, Constellation Brands and Under Armour. 19 are up and 4 down creating the higher broad stock indexes this week. AAPL +3.8%. AMZN +1.8%. AVGO +7.9%. BA +1%. BKNG +2.6%. CELG +2.8%. CRM +2.5%. FB +4.666%. GE +3.3%. GOOGL +2.6%. HD -1%. JPM +1.1%. MA +2.7%. MSFT +3.2%. NFLX +7.9%. NKE -0.4%. NVDA +8.1%. RTN +3.2%. SBUX +1.5%. STZ -1.5%. ULTA +6.1%. UAA -2.9%. V +2.6%.
The chips are on fire as seen by Broadcom and NVIDIA each up +8%. Facebook rallies +5% after the red-haired CEO Zuckerberg musters-up courage and holds his own at the hearings on Capital Hill concerning the data scandal. The credit card darlings MasterCard and Visa remain favorites. Netflix explodes +8% higher on analyst upgrades including cheers from Deutsche Bank. Ulta Beauty is looking pretty. Under Armour is mowed under. Ditto Nike so the at leisure trend is slapped around this week.
WTIC oil is up a huge +8.6% to 67.39 the highest since November 2014. Brent oil pops +8.2% to 72.62 also the highest in 3-1/2 years. Natural gas is up +1.3% to 2.73.
Gold gains +0.9% this week to 1348. Silver gains +1.8% on the week to 16.66. Copper ekes out a +0.4% gain to 3.07. Aluminum has the largest weekly rally since 1987. The US and allies impose sanctions on Russia including Rusal the large aluminum producer. Aluminum rallies 13% this week.
The 10-year yield ends the week at 2.83% after moving through the 2.75% to 2.85% range. The 2-year yield moves higher this week to 2.36% on the hawkish Fed talk. The 5-year yield is sticky at 2.666%. The 30-year yield oscillates above and below the 3% level at 3.03%.
Global 10-year yields are; Brazil 9.88%, India 7.44%, Mexico 7.33%, Greece 4.04%, US 2.83%, New Zealand 2.81%, Australia 2.73%, South Korea 2.60%, Singapore 2.36%, Canada 2.24%, Italy 1.79%, Portugal 1.63%, UK 1.43%, Spain 1.22%, Germany +0.51%, Japan 0.03%, Switzerland -0.04%. The US and New Zealand are at par. Switzerland is negative.
USD 89.80. Euro 1.2329. Dollar/yen 107.33. Pound 1.424.
Bitcoin 7973. Ether 494. Ripple 0.6326. Bitcoin cash 732. Litecoin 126.
After the bell, General Electric reduces its earnings and revenue numbers for 2016 and 2017 as expected. The adjustments are relatively in line with prior statements. GE is down -1% in late trading on thin volume reversing its +2.4% gain in the regular session in the down tape. Perhaps General Electric may finally place a near-term bottom. JPM will probably bash GE on Monday morning as it does every week for the last couple months. JPM CEO Jamie Dimon must hold a boatload of GE shorts.
News sources say the FBI has acquired audio tapes from the raid on President Trump’s lawyer’s office, apartment and home last week. Michael Cohen apparently taped conversations between himself and the president. That cannot be good for the president, the country and especially attorney Cohen.
FBI Special Counsel Mueller appears dead-set on bringing Trump down. Russia collusion, the initial reason for the special counsel, is not proven after over one year of multiple investigations. Mueller has likely moved on to digging-up other things to use against Trump.
At 9:30 PM EST (2:30 AM London Saturday morning; 3:30 AM Paris and Frankfurt; 4:30 AM Damascus), President Trump speaks to the nation announcing that an airstrike is underway in Syria in response to the use of chemical weapons by Syria president Assad. The UK and France join the United States in the military response.
Trump calls Syrian President Bashar Assad a monster for gassing his own people. The president proclaims, “We are prepared to sustain this response until the Syrian regime stops its use of prohibited chemical agents.”
Trump calls out Russia and Iran directly as supporters of Assad. The president says, “To Iran and Russia, I ask: What kind of a nation wants to be associated with the mass murder of innocent men, women and children? In 2013, President Putin and his government promised the world that they would guarantee the elimination of Syria’s chemical weapons. Assad’s recent attack, and today’s response, are the direct result of Russia’s failure to keep that promise.”
The president says, “So today, the nations of Britain, France and the United States of America have marshaled their righteous power against barbarism and brutality. Tonight, I ask all Americans to say a prayer for our noble warriors and our allies as they carry out their missions.”
Trump finishes, “We pray that God will bring comfort to those suffering in Syria. We pray that God will guide the whole region toward a future of dignity and of peace. And we pray that God will continue to watch over and bless the United States of America. Thank you, and goodnight. Thank you.”
French President Macron says, “The red line set by France in May 2017 has been crossed.” Macron references the 4/7/18 chemical attack in Douma, Syria.
Saturday, April 7, 2018
FRIDAY 4/6/18; Trade Wars Escalate After US Imposes New Tariffs Against China; US Monthly Jobs Report Only 103K Jobs; Federal Reserve Chairman Powell Speaks; Consumer Credit; US STOCK MARKET CRASHES; SPX -2.2%; INDU, or DJI, -2.3%; COMPQ -2.3%; NDX -2.5%; RUT -1.9%; NYA -1.8%; TRAN -2.9%; SOX -3.1%; IBB -3%
At 6:52 PM EST Thursday evening in the States (7:52 AM Tokyo Friday morning), President Trump creates drama in global markets after announcing an additional $100 billion in proposed tariffs against China. The bottom falls out of US futures. S&P -11. Dow -106. Nasdaq -28.
Trump orders the USTR (United States Trade Representative) to consider $100 billion in additional tariffs targeting China. President Trump slaps President Xi in the face. Trump hits back twice as hard against the communists. The United States announced $50 billion in tariffs this week and China immediately retaliated with $50 billion in tariffs against the US. Trump ups the ante now with $100 billion more.
How will China respond? The communists are probably surprised since the Whitehouse staff and especially National Economic Advisor Larry Kudlow have been talking nice over the last day and one-half. It is questionable if China has $100 billion in tariffs ready to immediately announce and retaliate again.
The Beijing leadership may be caught by surprise. The trade wars escalate. Adding more drama, China’s SSEC and other exchanges are closed for the Ching Ming Festival. Hong Kong’s Hang Seng Index will trade today.
Treasury yields are; 2-year 2.30%, 5-year 2.64%, 10-year 2.83%, 30-year 3.07%.
WTIC oil 63.64. Brent 68.33. Natural gas 2.68. Gold 1329. Silver 16.38. Copper 3.062. Corn +2.2%. Wheat +2%. Soybeans +1.6%.
Euro 1.2246. Euro/yen 131.28. Dollar/yen 107.20. Pound 1.4006. Euro/pound 0.8743. Mexican peso 18.2146. Canadian dollar 1.2759. Dollar/yuan 6.3033. Indian rupee 64.9625. Aussie dollar 0.7669.
S&P -13. Dow -133. Nasdaq -35. Here we go again like the other day. US futures are collapsing. King Trump’s words move markets.
At 6:54 PM EST Thursday evening on the US East Coast (7:54 AM Tokyo Friday morning), S&P -21. Dow -230. Nasdaq -57.
At 7:55 AM Tokyo, S&P -24. Dow -260. Nasdaq -66.60.
At 7:56 AM Tokyo, S&P -22. Dow -231. Nasdaq -60.
At 7:58 AM Tokyo, S&P -26. Dow -280. Nasdaq -69.
At 7:01 PM EST Thursday evening (8:01 AM Tokyo), S&P -29. Dow -317. Nasdaq -75. The clock just fell off the wall in Larry Kudlow’s office.
At 8:02 AM Tokyo, S&P -36. Dow 402. Nasdaq -93. Futures are getting ugly. Cover the children’s eyes. A dramatic escalation in the trade wars begins.
Euro 1.2241. Dollar/yen 107.17. Pound 1.4002. Aussie dollar 0.7664. Indian rupee 64.9625. Dollar/yuan 6.3033.
At 8:26 AM Tokyo, boom. S&P futures are down -40. Dow -420. Nasdaq -96.
The New Zealand and Australia stock indexes started marginally higher but slips away to the flat line. Aussie dollar 0.7659. Dollar/yen 107.14. Aussie 10-year yield 2.666%.
The NIKK begins trading flat. Topix -0.1%. ASX 200 -0.3%. KOSPI -0.6%. Samsung Electronics dips -1.2% after reporting earnings. LG Electronics +3.3%. Seven & I, that runs the 7-Eleven convenience stores, rallies +3% on robust sales. Blue Sky crashes -13.2% and has lost half its value in recent days pounded by short-sellers that smell blood in the water.
China says the US may learn a “painful lesson.” Dollar/yuan 6.304. China vows to ‘fight the US tariffs until the end’. The communists fight back with rhetoric.
China says, “We’re ready for a trade war.” If the communists were actually ready for a trade war, they would have had a quicker and more detailed response to the $100 billion escalation. China may be caught flat-footed and does not know how to respond to the Trump theatrics. Trump takes a dump in the punch bowl at the Ching Ming Festival.
The USTR will provide details on the new $100 billion in tariffs in the days ahead and at that time China will likely retaliate again. Time will tell who blinks first.
Markets are trying to stabilize after the bombshell tariff announcements from the United States. S&P -38. Dow -424. Nasdaq -101. Every time that China or the US utters a negative comment, the S&P futures dip.
Euro 1.2254. Dollar/yen 107.04. Pound 1.4011. Aussie dollar 0.7678. WTIC 63.04. Brent 67.87. Natural gas 2.69. Gold is up 6 dollars to 1332. Silver 16.42. Copper is down -1.2% to 3.0385.
Treasury yields are; 2-year 2.29%, 5-year 2.61%, 10-year 2.81%, 30-year 3.05%. The 2-10 spread is 51.6 bips.
Hong Kong is not impacted by the trade war rhetoric with the HSI rallying +0.8%. Tencent pops +2%. Japan, Australia and South Korea are trading marginally lower.
US Trade representative Robert Lighthizer softens the trade war rhetoric saying the tariffs will not be implemented until the two-month comment process plays out. The news bites send markets to and fro.
Samsung Electronics -0.7%. Takeda Pharma loses -5% on news that the drugmaker continues to pursue Shire for a takeover. USD 90.47. Dollar/yen 107.38.
India stocks are trading marginally lower. The Nifty is down a few points at 10314.
The NIKK finishes the day down -0.4% to 21567. The ASX 200 finishes dead flat at 5789. The KOSPI loses -0.3% to 2430. The HSI rallies +1.1% to 29845.
For the week, Japan’s Nikkei Index rallies +1.9%. Australia’s SPASX200 gains +0.5% this week. South Korea’s KOSPI finishes the week with a small -0.2% loss. China’s SSEC is down -0.9% and did not trade the last two days due to the holiday. Hong Kong’s Hang Seng Index loses -0.8% this week despite today’s rally. Global investors took profits in their favorite sons; South Korea and Hong Kong.
European indexes begin trading down about -0.5% across the board. The auto sector is weak losing -1.5%. Materials and basic resource stocks lead lower on the trade war escalation. Rio Tinto is smacked lower on a BNP Paribas downgrade.
Norwegian Air flies +3.6% higher. Bang & Olufsen +2.8%. Swiss retailer Dufry gains +3% on a buyback announcement. Financial engineering, fueled by never-ending central banker accommodation, rules the markets for the last several years. The central bankers ae the market.
Retailer M&S is whacked -3% on a downgrade from C. Orkla is harpooned -5% on a downgrade.
DB is down -1.666%. Deutsche Bank CEO Cryan is cryin’ in his café latte this morning as the news wires report the names of other bankers that are considered as a replacement for the embattled executive. The writing is on the wall for Cryan. Revenues at the bank continue sliding south.
DB says it prefers a new CEO that speaks German. It is a tough job to fill since the new CEO knows that he or she will be used as a punching bag. Further, if Deutsche Bank slides down the rabbit hole it may create contagion across Europe perhaps around the entire financial world. No one wants that future blood on their hands.
At 3:34 AM EST (8:33 AM London; 9:33 AM Central Europe), S&P -20. Dow -220. Nasdaq -57. Russell -6. VIX 20.35.
DAX -0.6%. CAC -0.4%. FTSE -0.1%. SMI -0.6%. OMX -0.9%. The Nifty is down 15 points, -0.2%, to 10310.
Euro 1.2224. Euro/yen 131.36. Dollar/yen 107.46. Pound 1.3991. Euro/pound 0.8738. Mexican peso 18.2397. Canadian dollar 1.2789. Dollar/yuan 6.3033. Indian rupee 65.0075. Aussie dollar 0.7673.
WTIC oil is down -0.7% at 63.07. Brent oil loses -0.7% to 67.86. Natty is up marginally at 2.68. Gold loses 4 dollars to 1322. Silver is down -0.6% to 16.25. Copper loses -1.1% to 3.0415.
Treasury yields are; 2-year 2.29%, 5-year 2.62%, 10-year 2.82%, 30-year 3.06%. The 2-10 spread is 52.3 bips.
At 4:21 AM EST, S&P -22. Dow -234. Nasdaq -60. Russell -8. The Nifty is down 16.66 points, -0.2%, to 10308.
DAX -0.8%. CAC -0.6%. FTSE -0.2%. MIB -0.4%. IBEX -0.6%. PSI -0.8%. SMI -0.8%. OMX -1.1%.
Euro 1.2223. Dollar/yen 107.40. Pound 1.3994. WTIC 63.16. Brent 67.95. Gold 1324. Corn -0.8%. Wheat -0.7%. Soybeans -1.1%. Sugar and coffee are trading flat.
Bitcoin is down -3% at 6593 far under the 7K level. Cybercurrencies continue receiving bad press in recent days and weeks. Ether is down -4% to 368. Ripple 0.4631. Bitcoin cash 609. Litecoin 114.50.
The Nifty finishes the day up 6 points at 10332. The BSE Sensex gains 30 points, +0.1%, to 33627. For the week, the BSE gains +2% up for two consecutive weeks bouncing off the 50-week MA at 32582.
WTIC 63.27. Brent oil 68.08. Gold 1326. Silver 16.28. Copper is down -1.2% to 3.0365. Corn -1%. Wheat -1%. Soybeans -1.5%. Sugar -0.2%. Coffee -0.1%.
S&P -17. Dow -175. DAX -0.5%. CAC -0.5%. Euro 1.224. Dollar/yen 107.33. Pound 1.4011. USD 90.43.
At 7:30 AM, S&P -25. Dow -250. Nasdaq -70. Russell -8. VIX 20.72.
Treasury yields are; 2-year 2.30%, 5-year 2.63%, 10-year 2.82%, 30-year 3.06%. The 2-10 spread is 51.666 bips.
Global traders await the all-important US job report. The consensus expects 175K versus the prior blowout 313K jobs. The Unemployment Rate is expected to drop from 4.1% to 4.0%. Private Payrolls are forecasted at 175K versus the big 287K last month.
The key Average Hourly Earnings are expected at +0.3% month-on-month versus the prior +0.1%. Year-on-year is expected at +2.7% a pinch above the prior +2.6%. The Average Workweek is expected to remain steady at 34.5 hours.
S&P -25. Dow -245. Nasdaq -68. Russell -9. WTIC oil 62.97. Brent oil is down -0.666% to 67.88. Gold 1323. Silver 16.26. Copper 3.035. Corn -1%. Wheat -0.7%. Soybeans -1.8%.
Treasury yields are; 2-year 2.30%, 5-year 2.63%, 10-year 2.82%, 30-year 3.06%. The 2-10 spread is 51.5 bips.
DAX -0.6%. CAC -0.4%. FTSE -0.2%. SMI -0.5%. OMX -0.6%.
Euro 1.2232. Euro/yen is at 131.31 a palindrome. Dollar/yen 107.35. Pound 1.4005. Mexican peso 18.26. Canadian dollar 1.28. USD 90.47.
S&P -19. Dow -202. Nasdaq -56. Russell -6. WTIC 63.10. Brent 68.04. Gold 1324. The jobs numbers hit the wires.
At 8:30 AM EST, the US Monthly Jobs Report is 103K jobs missing the 175K expected by a mile. Jaws drop. Where are all the jobs everyone keeps bragging about? The Unemployment Rate remains steady at 4.1%. Private Payrolls are 102K jobs missing the 175K expected. The weak job numbers provide a counterbalance to the blowout numbers last month. The last two months are revised for a net loss of 50K jobs (January is revised down 63K jobs and February is revised up 13K jobs). On average, the US has added 202K jobs per month for the last three months.
Retail loses 4K jobs and Construction loses 15K jobs. Construction added 65K jobs last month. Manufacturing jobs gain 22K. Healthcare gains 22K jobs. Professional and Business Services jobs are up 33K.
The important Average Hourly Wages are up +0.3% month-on-month and +2.7% year-on-year exactly in line with forecasts. Wages remain benign. Inflation cannot exist without wage inflation.
The Labor Participation Rate is 62.9%. The Average Workweek is 34.5 hours as expected. The U-6 Rate is at 8.0%. There is not a lot of job creation but there is also not a lot of job losses.
US futures are holding steady. S&P -19. Dow -193. Nasdaq -54.
At 8:33 AM EST, S&P -24. Dow -255. Nasdaq -75. The US issues more sanctions against Russia targeting seven oligarchs.
DAX -0.8%. CAC -0.5%. FTSE -0.3%. SMI -0.6%. OMX -0.9%.
Euro 1.2253. Dollar/yen 107.19. Pound 1.4035. USD 90.33.
WTIC 63.14. Brent 68.11. Natty 2.70. Gold 1329. Silver 16.41. Copper 3.0375. Platinum 913.
Treasury yields are: 2-year 2.28%, 5-year 2.61%, 10-year 2.80%, 30-year 3.05%. The 2-10 spread is 51.8 bips.
At 8:47 AM, S&P -18. Dow -188. Nasdaq -50. Russell -5. VIX 20.28.
Euro 1.2222. Dollar/yen 107.38. Pound 1.4009. USD 90.49. US 10-year yield 2.81%.
Treasury yields are: 2-year 2.29%, 5-year 2.61%, 10-year 2.81%, 30-year 3.06%.
Railroad company GBX rallies +3.1% on earnings. WDFC is down -5% after last evening’s earnings. PSMT +2.8%. VRX is up +0.2% on a Mizuho upgrade.
F drops -0.4% on news of recalling 350K F-150 pick-up trucks and Expeditions for transmission problems. AMZN is down -0.9% after the president bashed Amazon last evening. URBN drops -1.5% on news that a top executive departs. GT is roadkill losing -2.1% on news that the tiremaker may have manufactured a defect in RV tires resulting in deaths and injuries.
S&P -22. Dow -230. Nasdaq -64. DAX -0.6%. WTIC oil 63.49. 10-year yield 2.80%.
US stocks begin trading lower. The S&P 500 sinks 22 points, -0.8%, to 2640. The Dow loses 217 points, -0.9%, to 24288. The Nasdaq Composite loses 64 points, -0.9%, to 7012. The Russell 2000 small caps are down 12 points, -0.8%, to 1531. VIX 20.06.
DAX -0.5%. CAC -0.2%. FTSE flat. SMI -0.5%. OMX -0.8%. WTIC 63.59. Brent 68.51. Gold 1333. Copper 3.05.
At 9:38 AM, National Economic Advisor Kudlow appears on Bloomberg and says “negotiations (with China over tariffs) have not begun.” In the next breath, however, he says there is lots of time to discuss the proposed tariffs and trade policy with China. Kudlow tries to water down the trade rhetoric which has been his job the last couple days.
The Bloomberg interview grows teste and Kudlow makes the point that “we are considering” the tariffs. He emphasizes the word ‘considering’ and proclaims, “Blame China (for any potential trade war) not the president.”
At 10:01 AM, boom. LongFin Corp, LFIN, a pseudo-cybercurrency play, is halted from trading by the SEC. The regulators freeze profits that were claimed in the stock mainly to stop three key investors from moving that money overseas. Something smells at LongFin. The cryptocurrencies suffer another bloody nose. LFIN was up +47% today before the halt but is down -90% off its peak. OSTK +4.3%. RIOT -7.5%. KODK +0.9%. BLOK -1.6%.
Bitcoin 6623.77. Ethereum 369.10. Ripple 0.4674. Bitcoin cash 606.53. Litecoin 114.20.
SPX 2650 INDU 24381. COMPOQ 7046. RUT 1540. VIX 19.61.
Round two begins at the Masters golf tournament. Jordan Spieth, sponsored by Under Armour, is leading the first major tournament of the year. Tiger Woods, sponsored by Nike, is underperforming. UAA is down -0.7% but up +6% this week. NKE is down -0.8% but up +3.9% this week.
Disgraced former South Korean President Park is sentenced to 24 years in prison for her corruption. She plans to appeal the sentence. Throughout time, all criminals proclaim their innocence.
Markets are quiet this morning despite the escalating trade war. Perhaps most market participants are getting used to the bombastic tweets and inflammatory rhetoric from President Trump that turn into whimpers as the days and weeks play out.
At 10:27 AM, SPX 2652. INDU 24376. COMPQ 7052. RUT 1536. VIX 19.20. All 11 S&P 500 sectors are negative.
FB flat. AAPL -0.7%. AMZN -0.6%. NFLX +0.5%. GOOGL -0.3%.
At 10:40 AM, boo. President Trump drops another tape bomb. He tweets that China has taken advantage of its developing status in the WTO. The president loves to stir the pot. Stocks collapse.
The SPX is down 23 points, -0.9%, to 2639. The Dow is down nearly 300 points at 24210. COMPQ 7019. RUT 1533. VIX 19.89.
At 10:46 AM, the S&P is down 27 points at 2635. INDU 24175. COMPQ is at 7007 a palindrome. VIX is at 20.02 a palindrome.
WTIC oil is down -1.1% to 62.86. Brent oil loses -0.6% to 67.94. Natural gas is up +0.9% to 2.70. Gold 1334. Silver 16.40. Copper 3.048.
Treasury yields are; 2-year 2.27%, 5-year 2.59%, 10-year 2.78%, 30-year 3.03%.
Euro 1.2270. Euro/yen 131.41. Dollar/yen 107.10. Pound 1.409. Euro/pound 0.8708. Indian rupee 64.975. Mexican peso 18.3042. Canadian dollar 1.2776. Dollar/yuan 6.3033.
SPX 2635. INDU 24184. COMPQ 7005. RUT 1531. VIX 20.06.
CAT is down -3%, BA -2.4% and NKE -2.1% which creates about 110 negative points in the Dow Industrials. All 30 stocks in the Dirty Thirty are lower.
At 11:30 AM EST (4:30 PM London; 5:30 PM Frankfurt), European indexes finish lower. The DAX drops -0.5% to 12241. The CAC dips -0.4% to 5258. The FTSE loses -0.2%, to 7184. The MIB finishes the session down -02% to 22930. The IBEX loses -0.6% to 9683. The PSI is pummeled -1.2% to 5417. Portugal is slapped hard.
For the week, Germany’s DAX gains +1.2%. France’s CAC rallies +1.7% this week. The UK’s FTSE gains +2% this week. Italy’s MIB +2.5%. Spain’s IBEX gains +0.9% this week. Portugal’s PSI ekes out a tiny +0.3% gain this week. European indexes rally this week off the weaker euro.
SPX 2634. LOD 2626. INDU 24142. LOD 24082. COMPQ 7010. RUT 1527. VIX 20.52. VIX HOD 20.95. Fed Chairman Powell speaks shortly.
At noon, the S&P 500 is down 33 points, -1.2% to 2631. INDU 24126. COMPQ 7012. RUT 1529. VIX 20.37.
The NYA is at 12444 testing the key 40-week MA at 12437. The stock market will flush lower if the 12437 level is lost. Market bulls can recover and live to fight another day as long as they keep the NYSE Composite above the 40-week moving average at 12437. This key level separates a cyclical bull market from a cyclical bear.
At 12:27 PM, equities take out the lows of the day. The SPX drops 38 points, -1.4%, to 2624. The Dow Jones Industrials tank 449 points, -1.8%, to 24063. The Nasdaq Composite plummets 87 points, -1.2%, to 6990. The Russell 2000 collapses 18 points, -1.2%, to 1524.
The VIX is at the highs of the day at 20.90. The TICK registers -1000 verifying the extreme negativity.
The NYA is at 12438 and has not yet lost the critical bull-bear line in the sand, the 40-week MA, at 12437. It is a game of pennies now. If the NYSE Composite loses, 12437, the stock market may go into free fall. This is a key inflection point for stocks; prices will bounce or die.
At 12:33 PM, the bulls and bears battle for stock market control. The NYA is dancing to and fro from the critical 12437 level and cannot yet decide which way to go. The tension mounts.
SPX 2626. INDU 24076.66. COMPQ 6992. RUT 1523. Small caps are falling apart. The Russell 2000 is taking out lows. It is ugly. The VIX is at 20.84 not yet spiking wildly higher.
At 12:19 PM, the NYA loses the 40-week MA. Stocks bump along sideways. CAT -2.7%. FLR -1.9%. IR -2.1%.
At 12:36 PM, the NYA rises back above the 40-week MA at 12437. The drama continues. Stocks stumble choppy sideways. SPX 2631. INDU 24140.
At 12:38 PM, the NYA pops higher to 12443. SPX 2633. INDU 24155. The bulls are recovering. The bears may not have enough juice to rupture that NYA 40-week MA support. NYA is at 12451 and rising.
At 1 PM, the BHGE North American Oil Rig Count is down 13 rigs with a 10 rig increase in the US but a 23 rig decrease in Canada. In the United States, oil rigs are up by 11 with 1 less miscellaneous rig. In Canada, oil rigs are down 23 with gas rigs unchanged. The US plans to pump more oil (higher supply) so price may become soggy. WTIC oil 62.30.
Treasury Secretary Mnuchin is interviewed on CNBC business television. Mnuchin declares, “Our objective is to not be in a trade war with them (China).” Mnuchin, like Kudlow, tries to calm the markets downplaying any potential trade war. SPX 2634. INDU 24170. COMPQ 7008.
Mnuchin says it does not make sense that Amazon does not collect taxes from third-party sellers. AMZN -1.5%. Mnuchin joins Trump in slapping Amazon around. Market participants are growing tired of the Whitehouse confusion and receiving slightly different messages from the president and his underlings.
Stocks deteriorate after Mnuchin’s comments and leading into Fed Chairman Powell’s speech. The SPX is down 34 points, -1.3%, to 2628. The wheels are starting to fall off. The Dow drops 395 points, -1.6%, to 24110. The Nasdaq Composite sinks 83 points, -1.2%, to 6992.
At 1:30 PM, Federal Reserve Chairman Powell speaks on the state of the economy at the Economic Club of Chicago. Powell says further gradual rate hikes is the best way to promote the Fed’s goal. He says balance sheet reduction is going smoothly. Powell is wishy-washy saying both holding rates too low too long and hiking rates too fast may create risks to the economy.
Powell says the labor market is near full employment. He says economic growth has increased. He expects inflation to reach the +2% goal in the months ahead. Powell says wage growth is moderate.
At 1:37 PM, the NYA loses the critical 40-week MA at 12437. The stock market is in big trouble and may go into a mini-free fall. The NYA collapses below 12400. The wheels are falling off the stock market.
SPX 2633. INDU 24158. COMPQ 7003. RUT 1526.66. VIX 20.30. TRAN -1.9%.
The 10-year yield is at 2.79%. USD 90.19. WTIC oil 62.33. Brent oil 67.37.
Chairman Powell proclaims, “We (Fed) will not be swayed by market volatility.” The stock market does not respond well when Powell speaks. Stocks have sold off during his last three public appearances. Today is no different. Equities perform a 90-minute swan dive starting at 1:30 PM. The more Powell talks the more stocks drop.
Powell says tariffs can push prices higher but he is a two-handed economist and declares that it is too early to know the impact. Powell does not instill confidence in the markets. Powell is speaking while holding a crumpled-up piece of paper containing notes. He looks like a rookie. Stocks slide down the rabbit hole.
The Dow Jones Industrials are down 767 points at the low at 3 PM. There is blood and carnage on Wall Street.
The SPX tumbles from 2636 at 1:30 PM to 2586 at 3 PM a 50-handle drop. A bullish trader that was telling everyone to buy the dip is taken off the trading floor on a stretcher. Equities try to stabilize.
The S&P 500 is down 63 points, -2.4%, to 2600. The Dow is down 644 points, -2.6%, to 23852. The Nasdaq Composite is down 165 points. -2.3%, to 6911. The RUT loses 35 points, -2.3%, to 1508. VIX 22.44. Powell is not good for the stock market. Humorously, he should consider shorter appearances.
FB -1%. AAPL -2.3%. AMZN -3.2%. NFLX -1.8%. GOOGL -2%.
Euro 1.2287. Euro/yen 131.32. Dollar/yen 106.88. Pound 1.4091. Euro/pound 0.8719. Indian rupee 64.975. Mexican peso 18.3113. Canadian dollar 1.2773. Dollar/yuan 6.3033.
WTIC oil is down -2.5% to 61.96 below the 62 level. Brent oil is down -1.9% to 67.02. Natty 2.70. Gold rises 7 points to 1333. Silver 16.34. Copper is down -1.1% to 3.041. Platinum 916. Corn -0.3%. Wheat +1.6%. Soybeans +0.2%. Sugar -0.8%. Coffee -0.1%. Lumber -0.3%.
Treasury yields are; 2-year 2.27%, 5-year 2.59%, 10-year 2.78%, 30-year 3.02%. The 2-10 spread is 50.1 bips.
Consumer Credit is $10.6 billion below the $15.1 billion expected. The bulk of the increase in loans is due to student and vehicle debt. Consumers pull back on credit card spending. The economy will not grow with consumers pinching pennies and shunning retail stores.
SPX 2599. INDU 23866.60. COMPQ 6913. RUT 1511. VIX 21.92.
Euro 1.2282. Dollar/yen 106.88. Pound 1.4092. USD 90.11.
WTIC 61.94. Brent 67.00. Natty 2.70. Gold 1333. Silver 16.35. Copper 3.0395.
Treasury yields are; 2-year 2.27%, 5-year 2.58%, 10-year 2.77%, 30-year 3.02%. The 2-10 spread is 50.2 bips.
The major indexes are in corrections down more than -10% from the record tops. The bulls bring stocks off the lows during the last hour of trading but it is nothing to write home about.
The SPX drops to 2586 testing the important 12-month MA support at 2581. Price bounces. This 2581 is a cliff-edge for the stock market where the indexes have potential to crash. It looks like the bulls may have dodged a bullet even though the day is extremely ugly.
XLK -2.5%. Chips are crushed. SOX -3.1%. XRT -1.7%. M -3.7%. JWN -4.1%. XLY -2.1%. XLP -1%. XLE -1.8%. XOP -2.7%. XHB -2.3%. Biotech is bludgeoned. IBB -3%. XLV -2.4%. XLU -0.8%. VOX -1.1%. XLB -2.4%. XLI -2.8%. XLF -2.4%. KRE -2.8%.
There are winners in the down tape. VTR +0.8%. ULTA looks pretty gaining +0.6%. The Campbell’s Soup is ‘mmm, mmm, good’. CPB +0.6%. GIS is marginally higher.
INCY crashes -23%. NKTR crashes -8%. Nektar is not attracting investors. ALGN -4%. XLNX crashes -6.2%. KLAC -4.3%. CF is stinking down -4.5%. ETN -4.1%. DOV -5%. DE -3.9%. PYPL -4%. TTWO -4.1%. Industrials, biotech and tech stocks are smacked hard.
All 30 Dow stocks are negative. Caterpillar bulldozes a negative path that the other Dow components follow. CAT -3.5%. INTC -3.2%. BA -3.1%. MM -2.9%. NKE -2.9%. The Masters golf tournament is not helping Nike today. Nor Under Armour or Lululemon. UAA -2.8%. LULU -1.8%.
The day finishes ugly. Trade war rhetoric sinks stocks. Chairman Powell did not create confidence. The jobs number is a paltry 103K jobs and Powell says the economy is growing.
At 4 PM EST, US stocks finish in a bloody mess. The S&P 500 collapses a huge 58 points, -2.2%, to 2604. LOD 2586. The 200-day MA is at 2594 and was successfully tested by the bulls despite the huge losses. Price finishes the week above the 200-day.
The S&P 500 did not drop below the important 12-month MA at 2581 which will bring on stock market bear activity for many months ahead. However, the SPX finishes at 2604 below the 10-month MA at 2614 also a very important level. Bulls must move the S&P 500 above 2614 pronto or further negativity will occur.
INDU, or DJI, sinks 572 points, -2.3%, to 23 933. LOD 23738. The COMPQ finishes down 161 points, -2.3%, to 6915. LOD 6877. The NDX tumbles 162 points, -2.5%, to 6433. The RUT drops 30 points, -1.9%, to 1513. LOD 1502.
The NYA loses 223 points, -1.8%, to 12349, falling below the 200-day MA at 12395. At 1:30 PM-ish, the broad stock market fell apart after the NYSE Composite lost the critical 40-week MA at 12437 which ushers in a cyclical bear market. TRAN drops -2.9% to 10146 with the LOD at 10036. The 200-day MA support is 10017. The chips are down today. SOX -3.1%.
For the week, the SPX loses -1.4%. The Dow Industrial are down -2.3% this week. COMPQ -2.3%. NDX -2.3%. RUT -1.1%. TRAN -2.4%. SOX loses -4.8% this week. It is surprising to see a week of losses for a new month and quarter. Semiconductors are crushed. Small cap hold up better than the broad market.
The Dow Jones Industrials, Nasdaq 100 Index and Dow Jones Transports are officially in correction territory down more than -10% off the record tops. Many sectors are in corrections with chips, biotech and energy sectors notable losers. The following percentages are the drops off the record tops for 10 important indexes. SPX -9.4%. INDU -10.1%. COMPQ -9.5%. NDX -10.5%. RUT -6.4%. NYA -9.4%. TRAN -11.2%. SOX -13.1%. BB -16%. XLE -13%.
The sectors finish lower this week. Biotech, chips, trannies, tech, industrials and healthcare are slapped lower. IBB -5.4%. SMH -4.6%. IYT -2.5%. XLK -2.1%. XLI -2.1%. XLV -1.9%. XOP -1.6%. KRE -1.6%. XLF -1.5%. RTH -0.9%. XLB -0.8%. ITA -0.666%. XLY -0.6%. XLRE -0.6%. XAL -0.5%. XLP -0.4%. VNQ -0.3%. XLU -0.2%. XLE -0.1%. XHB +0.1%. XRT +0.4%. VOX +0.4%. ITB +1.9%. As Treasury yields drop, interest rate sensitive sector hold up better this week.
The 23 high-flying stocks that have carried the broad stock market higher the last several years finish the week negative except for Apple, Nike, Under Armour, Raytheon, Starbucks and Ulta Beauty. Americans like electronic devices, at leisure sportswear and colorful tennis shoes, Tomahawk missiles, coffee, and beauty supplies so they look good for those smartphone selfies. AAPL +0.4%. AMZN -2.9%. AVGO -2.9%. BA -0.5%. BKNG -2.3%. CELG -2.5%. CRM -0.2%. FB -1.6%. GE -3.1%. GOOGL -2.6%. HD -2.1%. JPM -0.3%. MA -3%. MSFT -1.1%. NFLX -2.2%. NKE +1.666%. NVDA -7.5%. RTN flat. SBUX +0.8%. STZ -0.3%. ULTA +2%. UAA +3.9%. V -1.6%. NVIDIA took the pipe.
Facebook remains under fire for the data scandal. CEO Zuckerberg appears on Capitol Hill on Wednesday, 4/11/18. The event will be a media circus. Zuck admits that most of the 2 billion Facebook users have had their data compromised. Americans realize that when a social internet site is free it really isn’t. The user’s data and information is the product that Facebook sells.
CAT is bulldozed -3% this week. DE -6.4%. CF -2.4%. DBA -0.5%. ADM +2.2%. CAG -0.4%. JJG +1.4%.
WTIC oil finishes the week down -4.4% to 62.06. The 20-week MA support has held since last September and is now at 61.72. It would be a big deal if this failed. Brent oil loses -3.2% this week to 67.11 with its 20-week MA at 66.40. Natural gas, NATGAS, drops -1.2% to 2.70.
Gold gains +0.666% this week to 1336. Silver rallies +0.6% to 16.36. Copper gains +1.1% to 3.06. Copper bounces off the 50-week MA at 2.96 over the last couple weeks.
Treasury yields are; 2-year 2.27%, 5-year 2.59%, 10-year 2.78%, 30-year 3.02%. The 10-year yield moves through the 2.71% to 2.83% range and finishes in the middle.
US dollar index 90.14. Euro 1.2281. Dollar/yen 106.91. Pound 1.4091.
After the bell, Fed’s Williams speaks supporting the FOMC’s gradual rate hike path ahead. Williams supports three or four rate hikes this year. He says, “This is the right direction for monetary policy.” Williams was appointed to head the New York Fed this week.
President Trump retains bragging rights for a higher stock market after his election. The SPX ran from 2126 to the 2873 record top on 1/26/18 a huge +35.1% gain. The S&P 500 then collapses to 2604 right now; a -9.4% loss off the record top. Overall, from November 2016, the presidential election, until now, the SPX is up +22.5%.
Trump hangs his hat on this +22% gain saying that the stock market rally from his election remains in place. The S&P 500 would have to lose about 500 points from the present level to wipe out President Trump’s election rally.