MONDAY 3/31/14; EOM; EOQ1; Yellen Rally

China takes into custody and seizes $15 billion in assets of over 300 family members, relatives, friends and associates of Zhou Younkang, the oil and gas magnet that has been under investigation for corruption for a few years. Zhou promotes a more transparent and capitalistic path for China which is not in favor with the ruling party so the move is likely centered in retribution. The danger of investing in Russian and China is that on any given day you may wake and find company assets seized.

China Construction Bank reports strong earnings. IPO mania hits China just like the US with 48 IPO’s hitting the market thus far this year. If you have an idea and can fog a mirror and your company does not make money, it may be worth billions. The dollar/yen is 102.91 remaining under 103. Investor Jeffrey Laydon alleges widespread fraud occurred at 20 global banks and develops a class action lawsuit to seek damages. Banks will not comment on the action. JPM offices are searched in Hong Kong by the ICAC corruption authorities. J P Morgan Chase refuses to comment. Protestors march against a chemical plant in the southern Chinese city of Maoming throwing rocks and bottles. The rioters are sick, literally, of living in all the pollution.

Australia begins the week higher with the Aussie dollar at 0.9253. US futures are higher. S&P +6. Japan’s Abe is concerned that foreign money is leaving the country. About $10 billion was pulled from Japan in recent weeks. Japan Industrial Production and Factory Output surprisingly drop. The new sales tax comes into effect tomorrow and the expectation was actually for a pop in economic activity ahead of the tax. NIKK gains +0.9%. Asian markets trade higher all bulled up expecting a China stimulus announcement after the PMI data this evening. North and South Korea trade artillery fire directed towards their respective western oceans with each side balming the other for the escalation. The North test fired a missile across the demarcation line creating the melee. South Korea scrambles F-15 fighter jets. The KOSPI finishes positive.

Turkey’s Erdogan wins reelection. Of course he did since he squashed the Internet. Erdogan vies to track down the “traitors” and discipline anyone involved in placing negative comments on Twitter, Facebook and YouTube. The Turkish Lira is 2.1623 rallying to a 2-month high. Turkish GDP is 4.4% better than expected. In France, the Hollande Socialists lose ground in the elections. Voters shift to the right slapping Hollande in the face. The Socialists, however, elect a female mayor for Paris. The French economy is sick and people simply want jobs and opportunities.

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

The broad indexes remain elevated with a strong up day but copper remains weak. At the closing bell, the SPX is up 15 points, +0.8%, to 1872. The Dow is up 135 points, +0.8%, to 16458. The Nasdaq gains 43 points, +1%, to 4199 remaining under the 50-day MA at 4221. The RUT gains 21 points, +1.8%, to 1173. Yellen creates a big up day to end the month and quarter and begin the new week. MU, that benefits from the collusion of funds holding the stock long, jumps +8%. ORCL gains +3.4%. Today’s losers are TSLA finishing down -1.9% and GMCR spilling the coffee losing -2.4%. GM drives into the ditch losing -0.9%. CMI drives +2.1% higher as the truck market remains robust requiring diesel engines which is an encouraging sign for the global economy if it continues.

The month of March is an up month. For the month, the SPX is up +0.7% and the Dow +0.8%. March is not as kind to tech and small caps with the Nasdaq puking -2.5% and RUT -0.8%. During Q1, the high-flying stocks and biotech’s were sold off in favor of old school tech stocks like HPQ and MSFT. S&P prints its fifth quarterly gain.

After the bell, GM dumps -1% after announcing yet another recall. GM’s Barra will be answering questions before Congress tomorrow. Documents indicate that General Motors had two different fixes planned for the faulty ignition switches but chose not to do either. This revelation probably creates long-lasting negativity and damage to the brand since GM may have placed profits before human life. Many politicians, including the president, kept bragging about ‘saving’ GM a few years ago but now they are all quiet. Caterpillar is in hot water with the Senate concerning tax dodges the company may have employed. CAT loses -1.1% in AH’s trading but remains at the lofty 99-100 level. VRNT beats on earnings and bounces +3%.

The popular future IPO Weibo, the Twitter of China, will list on the Nasdaq under the symbol WB. Bitcoin drops -10% to 455 as China’s PBOC slams the virtual currency as a casino play. Michael Lewis’s book Flash Boys creates lots of discussions today about the pros and cons of high-frequency trading. The FBI announces ongoing investigations into HFT for a few months. The confessional season is in swing for companies to announce bad news before the actual earnings release. Earnings warnings maintain a record high pace the opposite of what is expected for a global economy supposedly in recovery.