MONDAY 3/17/14; Empire State Mfg Survey; Industrial Production

Asian markets are weak to begin the week but the Shanghai and Kospi finish higher. NIKK -0.4%. SoftBank, affiliated with the Alibaba IPO, jumps +5% on news the listing may occur in the States. SSEC +1%. Construction stocks push the Shanghai above the 2K level. KOSPI +0.4%. Dollar/yuan 6.1785. Traders are viewing the yuan trading band increase calmly. Dollar/yen rises to 101.57 so US futures recover. S&P +3. Indian markets are closed for holiday.

Happy St Patrick’s Day. UK housing prices continue running higher. Asking prices on London homes are at all-time record highs. UK housing stocks jump from +3% to +6% as the housing bubble expands. Telecom consolidation continues with VOD agreeing to buy Spain’s Ono. Labelux plans to split off Jimmy Choo shoes, a very popular brand with ladies, into an IPO offering. European markets move higher in the early going. The euro drops under 1.39.

Ukraine parliament activates 40K reserve troops and mobilizes 15K volunteers to prepare for fighting Russia. Ukraine will need help from the West to defend its land. The West warns Russia to not annex Crimea but the jawboning has no effect on Russian aggression. Russia says it is receiving requests for help from Russian citizens in eastern Ukraine which would escalate the turmoil. EU foreign ministers meet and discuss sanctions against Russia. The bank accounts of Russian political leaders will be frozen and travel prohibited to Europe. The sanctions may not have any bite since no plans are made to place pressure on the Russian oligarchs. The Russian Micex Index is higher gaining +1.2% to 1252. The dollar/ruble continues to weaken to 36.6906. Crimea formally asks Russia for annexation.

The Flight 370 missing airplane mystery is over one week old. The search continues but appears futile. One or both pilots are suspected to be involved in the hijacking but without finding the plane there are many scenarios possible. A Libyan oil tanker is taken over and sailed out to sea by pirates. Libyan authorities request help from the US. Navy Seals storm the ship and retake control. The oil tanker is returning to Libya.

At 4:30 AM, S&P futures receive a strong bid moving from +3 to +8 then +11. Dow +100. Nasdaq +26. S&P futures cover a 16-point range from -5 to +11 overnight. Traders are very relaxed about the Ukraine situation and continue to look at the glass half full for any negative news. Complacency continues with social unrest and economic worries in Ukraine, South Africa, Turkey, Syria, Venezuela and China having very little negative impact. Higher volatility will create wilder and wilder points swings in equities.

The 10-year yield moves a couple ticks higher to 2.68%. The German 10-year yield is 1.56% a very wide 112 basis point spread against the US Treasury. The dollar/yen is moving higher to 102.75 so the weaker yen sends futures higher. At 5 AM, dollar/yen 101.82. Banzai! The BOJ is weakening the yen to pump the US stock market higher....




[Text is Redacted: Purchase March 2014-03 to Read the Complete Chronology]

Traders likely expect dove Chair Yellen to swoop in and sprinkle QE happy dust on markets this week so they want to get a head start on the rally. Putin is scheduled to speak tomorrow but traders already forgot about Crimea and Ukraine. Ukraine, schmoocraine. The BOJ bludgeoned the yen since last evening, sending the dollar/yen currency pair from 101.30 up to 101.80 creating the bull fuel for equities. VIX remains elevated from recent levels at 15.68 and above the 200-day MA which is a bearish market signal. Copper is flat at 2.95 remaining under 3. Traders refer to today as a ‘reluctant rally’. Equities are typically bullish moving through a full moon, which occurred yesterday, and this eclectic indicator is correct again.

After the bell, JASO pops 4%. HLF collapses -8%. QCOM jumps +3%. Sally Beauty is working with the FBI and other authorities concerning a computer security breach affecting 25K customers. 24 States team-up to apply pressure on WAG, WMT and others to stop selling cigarettes at their pharmacies.

The Whitehouse announces 5 million sign-ups for Obamacare with 13 days remaining before the 3/31/14 deadline. A penalty will be levied against individuals that do not sign up. The president’s goal, backed by the CBO, needs 7 million enrollees, mainly young healthy adults, to make the ACA program financially viable. The president moved the goal post to an easier 6 million target due to the ongoing problems with Obamacare and said this would satisfy goals. The sign-ups are about 70 to 80% of the goal, however, there are mainly older ill folks signing up rather than young healthy folks (that cannot find jobs and do not have the money to buy health insurance).

The previously uninsured that are signing up for the ACA may only be a few million far short of the 30 million uninsured that are targeted as the basis for Obamacare. Insuring a few million that were uninsured could have been accomplished in many far easier ways than disrupting the entire medial system with an ongoing debacle that mandates more bureaucracy, regulation and paperwork. The Whitehouse will not provide other data including how many new sign-ups actually paid the premium to become officially enrolled. California’s payment rate is about 85% so using this estimate, perhaps about 4 million are actually enrolled in Obamacare, far short of the 7 million. The taxpayers will bailout Obamacare in a few years.