THURSDAY 3/6/14; ECB Rate Decision and Press Conference

Australia GDP and retail sales data are better than expected and the SPASX200 closes at 5446 a near 6-year high. AORD prints at the 5457 a near 6-year high. Asian markets are higher. The dollar/yen moves higher to 102.75. Banzai! The weaker yen sends the NIKK up +1.6% and provides a boost to European and US futures. S&P +4. The BOJ provides stock market fuel by printing and weakening the yen. Sony, Toyota, Fast Retailing and Softbank all run over +2% higher. SSEC and Hang Seng Index’s are higher. China coal mining stocks drop since the government announced the war on pollution. Violence in India is increasing after the announcement of upcoming elections starting 4/7/14.

EU leaders hold emergency talks today concerning the Ukraine crisis. Russia’s Lavrov refuses to meet with the Ukrainian ambassador since Russia does not recognize the new government. The West, Europe, US, Ukraine and Russia, however, all agree to pursue a diplomatic course and try to solve the problem through dialogue which continues to calm the situation. The United Nations envoy was chased out of Crimea. He was on a fact-finding mission but was escorted and forced off the peninsula by Russian soldiers. WTIC crude oil drops under 101 and Brent oil is under 108.

Fed’s Plosser says, “I’m worried about unintended consequences of policy action.” Hawk Plosser says “exiting stimulus will be challenging.” The Challenger Job Report shows layoffs decreasing by 7.3% month over month. Heavy job losses are occurring in the financial sector and 10K more cuts are planned in the near future due to a weak mortgage market. Companies in general are reducing physical branch and store locations to simplify operations like SPLS above. The building, store and office closures will continue and produce a steady flow of job losses.

Business supply outlet Staples closes 225 stores to lower expenses by one-half billion dollars. If the economy is doing so well why are stores that supply all the office needs for small businesses closing? SPLS is puking -11% pre-market. Costco misses on earnings reporting a 15% drop in profit. COST is beaten -3%. PLCE collapses -10% on weak earnings and an 18% drop in profits. The retail sector is hit with a triple whammy of losses; Staples, Costco and Childrens Place.

Euro 1.3723. Pound 1.6718. The BOE maintains the benchmark interest rate at 0.50% as expected. The ECB Rate Decision at 7:45 AM EST (12:45 PM local) results in no change maintaining the benchmark interest rate at 0.25%. The euro moves above 1.38. In the press conference at 8:30 AM EST (1:30 PM local), Draghi ignores the 900-pound elephant in the room, deflation, and stays the course with policy. The euro leaps higher to 1.3844. Dollar/yen moves above 103. The 10-year Treasury yield is 2.73%. Futures remain elevated. Traders are willing to ditch bonds and move money into riskier stocks....






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

Only 1 in 10 people that are uninsured in the US, and would qualify for Obamacare, have signed up. So 90% of these uninsured are simply not interested. These folks probably think that if they become ill they will simply go the emergency room like they always did. Why would they bother with all the Obamacare confusion? America is turned upside down by the ACA law with higher costs and hassles for many and the new law is not even accomplishing its main stated goal. The CDC warns about the increase in ‘superbugs’ which are viruses and illnesses that cannot be treated effectively with antibiotics. 23K folks died in the US last year from superbug infections. MRSA is an especially serious and deadly drug-resistant bacteria extracting a human toll. Ridiculously, big pharama benefits by producing drugs to treat the detrimental effects caused by other drugs.

The US freezes Ukraine assets and is limiting travel of Russian oligarchs. Presidents Obama and Putin talk on the telephone and attempt to find a diplomatic solution, although with Crimea succeeding from Ukraine, the situation is more likely to escalate negatively. The US and Europe unite on Russian sanctions. Putin must choose the path forward. The Crimea succession is adding fuel to the fire.