TUESDAY 1/28/14

The global currency worries subside as the Turkey central bank intervention strengthens the lira to 2.2615 (from above 2.33) and other troubled currencies recover higher. Argentine peso is 7.98, under the 8 level reflecting a strengthening peso. The RBI announces a surprise rate hike moving the Indian benchmark rate from 7.75% to 8.00%. The rupee stabilizes at 62.77. The Korean won is 1081. Asian markets trade flat. The dollar/yen climbs to 102.93 so the weaker yen sends US futures higher with the S&P +9 and Dow +91. The Nasdaq is -13 due to the AAPL earnings disappointment. The producer of Apple products, Foxconn, says they are looking at sites in the US to expand factories. Apple-associated companies are slammed across the glove. Dialog Semi dumps -5%.

Steel-maker Posco’s profit falls but a better 2014 is promised. Platinum stockpiles and inventories are increased to provide a cushion if plant strikes continue. Metals and oil markets trade higher. A senior Egyptian ministry official is shot dead in front of his home by Islamist extremists. Ukraine PM Azarov offers his resignation as parliament convenes in an attempt to bring the protestors to the table. A solution is difficult since the government has chosen to associate the Ukraine with Russia rather than the EU so there is no wiggle room for either side.

UK GDP is 2.8% as the consensus expected the highest growth in six years. RBS loses -1%. European markets move marginally higher with Spain’s IBEX up +1%. Siemens trades higher +1% after beating on EPS but missing on top line revenue. The dollar/yen moves above 103 to 103.11. Banzai! 




[Text is Redacted: Purchase January 2014-01 to Read the Complete Chronology]

Global markets react positively to Turkey’s shock and awe. Emerging markets jump over one percent and US futures move strongly higher. The dollar/yen jumps to 103.32. Banzai! Weaker yen = higher dollar/yen = higher stock market.

Further disclosure occurs concerning NSA spying that the popular Angry Birds video game is targeted to gather information on American citizens. Anyone playing Angry Birds has had their personal information hacked including family names, addresses, telephone numbers and contacts. What is very disturbing and causing serious concern is that the NSA uses the location function of mobile devices and tracks your movement in addition to monitoring, recording and archiving all your messages and actions. George Orwell’s 1984 world becomes scarier each day.

President Obama provides the State of the Union speech in the evening. He vows to act alone on the US economy using executive powers to bypass Congress all together. Americans want to see cooperation between the president and Congress rather than this constant conflict. This is why the presidents poll ratings continue to fall since the people see a completely dysfunctional government. The president says the US is becoming a leader in solar technology, just what the long traders in solar stocks were hoping to hear.

The president complains about lack of jobs and how the middle class and poor are disadvantaged, but ironically, it is his policies that are causing the situation he complains about. After all, he has been driving the bus for five years and his programs are ongoing. The higher taxes and regulations, Obamacare, business bashing, confrontational rather than cooperative behavior between himself and Congress, and support of the Fed that encourages a higher stock market at the expense of the little people, create the structural unemployment and continuing poor economic environment. The speech has no effect on global markets.