FRIDAY 3/28/14; Consumer Sentiment; Russian Troops Mass at Ukraine Border

The Aussie dollar teases four-month highs near 0.93. A Sydney property agency is accepting bitcoin to lure in Chinese and other buyers. The NIKK gains +1.5% over the last two days to near 14700 a fresh two-week high. The dollar/yen moves flat across 102.15. Japanese sentiment is improving with folks believing that the two-decade deflation funk can be overcome. Japanese retail stocks continue to pump higher with Fast Retailing, Aeon and Takashimaya each up +2%. April is a key meeting for the BOJ but the central bank may not provide as much QE if inflation is on the rise. Yahoo Japan collapses -10% after agreeing to a deal to buy eAccess from Softbank.

Chinese Premier Li hints at monetary stimulus on tap so the Asian region takes on a positive mood. The major indexes are all up except for the SSEC slightly lower. HSI is up+1.1%. ICBC +2.2%. One of China’s largest automobile manufacturer’s, SAIC Motor, jumps +13% higher on strong earnings. Chinese banks and shipping companies remain challenged moving forward. Chinese President Xi continues the European tour traveling from France to Germany to meet with PM Merkel. China is Germany’s third largest trading partner. The Uber car service expands to Hong Kong, Beijing and Jakarta. The KOSPI is now positive on the year as foreign money keeps rotating from place to place around the world. Global investors are holding more cash in accounts than 2012 so there is caution developing as asset prices inflate to lofty levels.

European indexes open about +0.5% higher across the board encouraged by the Chinese leaders promising contracts and stimulus. The euro is 1.3747 trailing lower. Italy’s second largest bank Intesa Sanpaulo reports lackluster results but pops +2%. Tire maker Pirelli misses earnings numbers but promises to increase margins moving forward so traders pump it +3.2% higher. US futures move steadily higher over the last couple hours with S&P +6 at 4:30 AM. The euro drops to 1.3715. Germany’s 10-year yield drops to 1.51%, a four basis point drop in the last few hours, as European money seeks perceived safety. Spain 10-year yield is 3.20% the lowest in many years. Spain is slipping deeper into deflation keeping Draghi up at night. Portugal 10-year yield drops toward 4% the lowest yield since 2010. Gold 1296.

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The VIX climbs higher in the early afternoon sending equities lower. The dollar/yen drops from the near 103 number to 102.84 so the stronger yen creates weakness in the broad indexes. Copper is strongly higher today which helps maintain an elevated stock market. The China stimulus talk also creates market buoyancy. Many traders refer to today as a short-covering rally that faded.

The Nasdaq and RUT small caps lose all the earlier gains and briefly turn negative. The Nasdaq was up 52 points earlier with tech and the high-flying stocks all recovering but now they are selling off again. The healthcare sector was leading the way higher this morning but has reversed course and is the leading sector lower. Utilities and telecom are also leading lower. NFLX drops -1.5% selling off 16 of the last 18 days down over -20% off the top in a bear market. AMBC is downgraded and collapses -2.6%. CTSH is upgraded and catapults +5.6% higher. ELY drives higher gaining +6.2% on encouraging analyst words as golf season swings into play.

At the bell, the SPX gains 9 points, +0.5%, to 1858 one-point under the starting number for March at 1859 with Monday the EOM. The Dow jumps 59 points, +0.4%, to 16323. The 20-day MA support is 16301. The Nasdaq gains 5 points a hair positive on the day to 4156. The 20-week MA support is 4153. The RUT is dead flat on the day closing exactly at the 20-week MA support is 1152. The RUT lost the 50-day MA support at 1163. The price action is bearish today since prices leap strongly higher only to collapse as the day plays out closing below the halfway point on the price candlesticks for all four indexes.

For the week, the SPX loses -0.5%. The Dow is flat a hair positive on the week. The Nasdaq dumps -2.8% and RUT loses -3.5%. Tech and small caps are bludgeoned painting a dire picture for the stock market. Geopolitical risk continues to be ignored for the most part. Even the massing of 50K to 80K Russian troops on the Ukraine border does not appear to cause any worry or angst. A tentative date for an iPhone 6 release that will finally have a larger screen to catch up with Samsung and other smartphones is planned for September about six months away.