WEDNESDAY 1/15/14

Asia markets bounce higher. NIKK gains +2.5%. Dollar/yen is 104.35. SSEC is flat. The World Bank says the global economy is at a “turning point” and raises its growth forecast to 3.4% but warns that emerging markets may struggle if the US decreases stimulus. Egypt votes for the second and final day on a new constitution. Europe is up from +0.3% to +0.9% with the DAX strongly higher. German GDP disappoints. Luxury goods maker Burberry is up +5.6%. 30 AMZN technicians and mechanics in Delaware are voting on unionization today. The 10-year yield is 2.88% and 2-year 0.38%. The NSA has placed a spy pathway in 100K computers that are currently operating in foreign nations. Recently legalized New Jersey on-line gambling is not receiving the interest expected. BAC beats on earnings and pops +2.3%. US futures are higher with the S&P +4.  Mortgage Applications bounce almost 12% (off multi-year lows) forecasting a stronger than expected spring season for the housing sector. INTC delays the opening of the new “Fab 42” chip facility in Arizona that President Obama touted as a shining example of state-of-the-art manufacturing. WTIC crude oil moves above 93. PPI is up +0.4% with core up +0.3%. Empire State Mfg Index is 12.51 much stronger than expected for manufacturing activity in and around New York. The dollar/yen is higher to 104.40 so the futures remain elevated due to the weaker yen.

Equities run higher after the opening bell. TRAN prints a new all-time high above 7506. The Dow is up triple digits but not making new all-time highs. Dow Theorists will want to see a new all-time high to confirm the robust trannies. The SPX prints a new all-time intraday high at 1850.84 at 11 AM, punching into positive territory for the year, and may close at an all-time new high. FAST, a construction and industrial parts company, drops -2.6% on lower sales. NFLX dumps -3.2% since the court ruling against net neutrality will likely increase operating costs. The dollar/yen runs to 104.63 so the weaker yen creates the upside stock market orgy. The BOJ and Fed are the markets. The 10-year yield pops to 2.92% then settles in at 2.90%. European markets all close higher with gains of well over 1% and higher in the DAX, MIB and CAC. European stocks are at the highest levels since the spring of 2008 pumped by the World Bank’s positive outlook. A surge in bank stocks, with the European bank index up about +8% this year, is helping fuel the upside. In addition, regulators are already watering down the requirements for the European banking stress tests ongoing this year which creates the upside in the banks. P prints a new all-time high above 35 up 3%. Equities remain elevated about +0.6% to +0.7% into the Beige Book at 2 PM. The report is positive stating increases in economic activity for 5 of the 12 districts. Holiday sales are in line or a bit better than expected. The report has something for everyone reporting steady growth in manufacturing but slowing activity in home sales and construction. Equities are non-responsive to the data. Dow remains up triple digits and the SPX remains at new all-time highs at 1848-1850. Fed’s Evans says tapering should continue at a steady pace. Evans is a dove so it is surprising to hear him comment this way but even more surprising, the markets ignore his comments. The stock market does not sell off on the hawkish comments by hawks yesterday and also not on the hawkish comments from a dove today. Traders have full faith and trust that the Fed will keep pumping the stock market higher forever. The CPC put/call ratio prints another low at 0.68, at multi-year lows, continuing to signal a significant market top at hand due to the rampant complacency and lack of fear in the stock market. WTIC oil moves above 94 and Brent oil is above 107. Copper recovers strongly today well into positive territory. CAT gains +2%.

The bulls keep equities elevated into the closing bell with the SPX printing a new all-time closing high at 1848.38 (overtaking the previous record high from 12/31/13 by two pennies). The new all-time intraday high is 1850.84 printed this morning. The SPX gains 10 points, +0.5%. The SPX is now officially up on the year—by 2 cents. The Dow gains 108 points, +0.7%, to 16481 but did not print new all-time highs. The Nasdaq is up 32 points, +0.8%, to 4215 printing new 13-year highs. The RUT jumps 8 points, +0.7%, to a new all-time intraday high at 1171.96 and new all-time closing high at 1170.95. XLF leaps +1.2% to 22.15. BAC +2.3%. MS +3.6%. GS is +1.2% ahead of earnings tomorrow. Traders are convinced that financials will lead the markets higher and the action bolsters their theory. Semiconductors receive a strong bid with the SOX up +0.9%. Tech and financials are leading markets higher. AAPL jumps +2%. XONE drops -9% as the 3D printer punishment continues. AA +2.7%. FEYE gains +11%. NUS collapses -16% on news that the company may be a potential Ponzi scheme (similar to the ongoing HLF drama). After the bell, CSX misses on EPS and is in line with revenue. Coal shipments slump. CSX drops -1.7%. JCP announces a plan to close 33 stores and can 2K employees. Typically a stock would pop on this news but JCP drops -2%. The dollar/yen is 104.59 remaining elevated all day long so the weaker yen provided the stock market fuel. The DuckDuckGo search engine is gaining strong popularity in light of the constant news about NSA spying. The search engine provides privacy since it does not record your information like GOOG does. YHOO drops -0.3% after sending COO de Castro packing. Mayer hired de Castro away from GOOG and now will have to pay him a hefty severance package of $40 million or more. The House approves a $1.1 trillion funding bill that the Senate will also pass ending four years of government dysfunction operating without a proper budget. This clears the deck for the debt ceiling limit fight that will heat up in February and March.