Saturday, May 31, 2014

SATURDAY 5/31/14

The US warns China over the ongoing territorial water disputes among Asian nations. The increased aggression is resulting in skirmishes that may escalate into something far more dangerous. China PMI data is released this weekend and will impact trading to begin the new week.

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

Reuters reports that activist investor Carl Icahn, golfer Phil Mickelson and gambler William Walters may be under investigation for potential violations of insider trading laws concerning CLX. The trio will need some Clorox to scrub the matter clean. Mickelson says he did nothing wrong and is fully cooperating with authorities.

Friday, May 30, 2014

FRIDAY 5/30/14; EOM; Chicago PMI; Consumer Sentiment; SPX New All-Time Intraday and Closing Highs; TRAN New All-Time High

Asia markets are weak overnight. Japan CPI inflation is the highest since 1991; 23 years ago! Perhaps Japan is exiting from its two-decade deflationary funk after all? Dollar/yen 101.62. NIKK loses -0.3% ending a one-week winning streak and printing the first monthly gain in five months. China markets idle sideways ahead of the PMI data on the weekend. The Jakarta Composite dumps -1%. The Thailand SET gains +0.7% despite weak economic data. KOSPI loses -0.9%. Iron ore prices are at 20-month lows and Aussie miners weaken another day.

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

Equities log another positive month for May. For the month, the SPX gains +2.1%, INDU +0.8%, COMPQ +3.1% and RUT +0.7%. Clearly the tech and biotech stocks led higher in May. XLK is up +3.8% and IBB gains +4.1%. Airlines outperform flying +7.4% higher. Selective natty gas stocks outperform in May. EOG gains +8%. Utilities print negative numbers for the month. UTIL -1.6%. XLU -1.1%. So folks chasing yield by running into dividend stocks gave up from -1% to -2% of their capital in May.

Retailers are slapped in May such as TGT -7.4%, TJX, a darling of long traders, -6.1%, WMT -3.1% and AVP -6.1%. TIF, however, bucks the trend and leaps +14% during the month. JWN also pops +12% in May showing that the wealthy have money to spend thanks to the Fed’s policies that make the wealthy wealthier while the middle class and poor struggle.

The 10-year yield is 2.48% recovering from the 2.40% handle print this week. The 200-week MA is 2.39% very strong support. Gold dumps -3.3% this week the largest weekly decline in eight months to 1250.

Next week is sure to create fireworks with a boatload of economic data, the ECB rate decision and press conference on Thursday morning and the Monthly Jobs Report on Friday morning. The stock market continues to shake off the Ukraine turmoil, mixed economic and earnings data and the lower Treasury rates. The bulls appear unstoppable running higher while waving the Fed’s easy money flag. The VIX is at 11.40 at multi-year lows. Put/call ratios remain low. Traders remain very complacent and are without fear.

Thursday, May 29, 2014

THURSDAY 5/29/14; GDP; SPX and TRAN New All-Time Intraday and Closing Highs

Japan retail sales disappoint falling more than expected at a negative pace not seen in four years. Fast Retailing and Aeon lose their shirts both down about -1%. China stocks float higher as fiscal and monetary policies remain on a steady course. The Chinese Yuan continues to hover around multi-week lows near 6.2623. Iron ore prices continue to collapse dragging Aussie mining stocks lower. Philippines growth is disappointing at 5.7% when over 6.4% was expected so its stock index falls -1%. India’s Infosys continues to lose top executives as the internal fight for the lead CEO position continues. Asia is in a wait and see mode for US GDP due out in a few hours.

Germany’s Merkel meets with the leaders of Ukraine, Moldova and Georgia in preparation for the signing of association agreements in the weeks ahead. The trouble in Ukraine began once an association was formed with the EU and West. Russia then stepped up aggression to stop the creep of the EU towards Russia. Merkel stresses the importance of countries determining their own fates. She says the ongoing and threat of future sanctions are successful and Russian troop aggression is stalled at the East Ukraine border. Russia’s largest lender Sberbank drops -0.7% after reporting lackluster earnings and an increase in bad loans. The IMF says Russia is in recession.

At 2 AM EST, the 2-year Treasury yield is 0.37%. The 5-year yield is 1.49%, 10-year 2.43% and 30-year 3.29%. The dollar/yen is 101.67 moving lower as the euro weakness creates yen strength. US futures are flat to higher. S&P +2. Gold drops to 1252.

At 3 AM, European indexes open mixed .......

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

Google begins complying with the European ‘right to be forgotten’ rule and provides a web page where folks can request that links to their personal information not be used in search results. Larry Page says he wishes he would have talked to officials years ago when Google was developing search tools but plans to now become “more European.”

Phablets account for 11% of smartphone sales and is growing stronger. Last year phablets made up less than 4% of smartphone sales. People want the larger screens for hand-held devices. AAPL’s Eddy Cue that heads up the software and services division says that this year Apple will release the best product line in 25 years. He has raised the bar so AAPL must deliver as the year proceeds.

Another near-miss airliner mishap occurs in the States with two airplanes passing within a couple hundred feet of each other narrowly avoiding a crash. This is the fourth near-miss in the skies in the last month. If you fly, make sure your insurance policy is paid up. In the Ukraine civil war, a Ukraine helicopter is shot down killing 14 troops and a general. The US says the pro-Russian separatists are using advanced weaponry that is supplied by Russia. Large-scale fighting is ongoing in East Ukraine.

Wednesday, May 28, 2014

WEDNESDAY 5/28/14; TOL; KORS; SPX New All-Time Intraday High; TRAN New All-Time Intraday and Closing Highs

Asia markets run higher across the board. KOSPI gains +1%. NIKK is flat. Dollar/yen 101.90. Aussie dollar 0.9278. Gold miners are hit today across the board with many losing -5%. Chinese Yuan is near an 18-month low. GSK drops -1.6% on serious allegations brought by UK authorities against the sales practices of Glaxo in China. The charges allege that GSK sales representatives may have bribed physicians and other officials to push their drugs.

Ukraine troops continue the mission against the pro-Russian separatists. The separatists say that nearly 100 of their fighters were killed in bloody skirmishes around Donetsk. This would be the highest casualties thus far but perhaps the pro-Russian separatists are ginnin’ up the numbers so Russia will come in and take over like Crimea. The Ukraine turmoil continues to create very little impact on global markets.

European indexes trade flat. The euro drops to 1.3618 as more and more traders anticipate and expect Draghi to act with stimulus measures next week although the downside may be limited until the goods are delivered. European nations wrestle over selecting the next commission president. German unemployment increases surprising analysts; the first rise in six weeks. Spain prints an all-time record low for the 10-year yield at 2.80%. It is a world gone mad where a country in such deep economic trouble is raised in exaltation. The global central banker intervention has greatly distorted price discovery across all asset classes.

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

After the bell, PANW jumps +9% on a patent settlement with JNPR that bounces +1.2%. Palo Alto Networks announces strong sales and guidance. Retailer TLYS collapses -23% after earnings are in line but the forward guidance is weak. The retail sector remains challenged and the elevated gasoline prices at the pump are not making for happy consumers. AAPL announces the deal to buy Beats Electronics, the headphones maker, for $3 billion. The number of new millionaires in China is decreasing.

Tuesday, May 27, 2014

TUESDAY 5/27/14; Durable Goods; Consumer Confidence; SPX and TRAN New All-Time Intraday and Closing Highs

The steady drumbeat of stimulus talk from Draghi over the weekend sends global markets marginally higher. China continues to apply stimulus to the economy which keeps copper elevated. Pakistan’s Nawaz Sharif visits newly-elected India PM Narendra Modi the first visit by Pakistan at this level in 23 years. Perhaps relations will improve between these two nations. The 300 missing Nigerian school girls are located but not recovered. Violence continues in Nigeria. South Africa’s economy contracts for the first time since 2009.

The drama in the South China Sea continues with China sinking Vietnamese fishing vessels in disputed waters. US and China relations are strained after the US charged the five Chinese military officers with spying. China is urging companies to not use US consultants and for banks to drop IBM servers in favor of Chinese servers. 23% of IBM’s business is in the Asia-Pacific region. A tit for tat game begins. The US tries to draw a distinction between spying between countries versus industrial spying to steal trade secrets.

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

TRAN is up +0.4% printing a new all-time intraday high at 8044.32 and new all-time closing high at 8017.84. Drilling company NADL jumps +14%. ARO leaps +15% but it lost -30% last week. SPLS -2%. IBM loses -0.7% on the China talk about avoiding IBM servers. On the food merger drama, HSH +22%, PPC +1.7% and PF -5.4%. After the bell, WDAY jumps over +5% higher after beating on top and bottom lines.

Owners of One World Trade Center (One WTC), the replacement building for the Twin Towers destroyed in the 9-11 terrorism attack, is slashing prices on rent since finding trenants is difficult. One WTC is only 55% leased. There is plenty of office space in the city and the capacity is simply not needed. People build excessive monuments to honor historic events without ever thinking of the operational costs to maintain such colossal endeavors.

The Libya situation is deteriorating and has been for months. Regional conflicts are rampant throughout the troubled country. A US Navy ship is cruising off the Libyan coast standing ready to evacuate any Americans if necessary. The Libya turmoil has been overshadowed by Ukraine drama and helps create the ongoing elevated crude oil prices.

In recent US State primary elections, the Tea Party candidates are losing out to traditional republican candidates who will proceed to the general election in November. Analysts proclaim that the Tea Party is dead. One of the main reasons that the Tea Party gained popularity was the 2007-2009 financial meltdown. Now that the living is easy five years later with Fed easy money, folks are back in ‘bread and circus’ mode. When the stock market turns south, the Tea Party movement will come roaring back. Humans are very predictable.

Edward Snowden is interviewed and says he was trained as a spy and is not a ‘low-level’ analyst as the NSA and CIA state. Secretary Kerry calls Snowden a “coward” and says he should come home to the US to face the music. 66% of the US is on Snowden’s side rather than the government’s side. People are glad that they now at least know the government is monitoring, recording and archiving all electronic transmissions on computers and smartphones.

Monday, May 26, 2014

MONDAY 5/26/14; Memorial Day Holiday; US Markets Closed

The pro-Russian separatists take over an airport near Donetsk which may prohibit a trip to the region by the new leader-elect Poroshenko. The pro-Russian separatists maintain a strong wedge between East Ukraine and West Ukraine and do not recognize the election results where Poroshenko is the winner with about 55% of the vote. Crude oil remains flat with WTIC sticky at 104 and Brent sticky at 110.

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

As Italy’s 10-year yield teases 3%, Spain is already under at 2.91%. France’s 10-year yield is 1.82% and Germany 1.42%. The US 10-year yield sits at 2.54%.

ECB’s Draghi speaks and says he “will not permit inflation to stay low for long.” (It should be worrisome to world citizens that arrogant central bankers believe they can ‘permit’ and ‘not permit’ the way so-called ‘free’ markets and the economy function). He says stay alert for “disinflationary conditions” and a “negative spiral.” Draghi can still not bring himself to utter the ‘D’ word; deflation. He says he is “prepared for action” if any risks develop. The euro is 1.3636 floating higher so his lip service no longer weakens the euro. Traders appear to have the pending Draghi easing announcement on 6/5/14 priced into markets so the risk appears to be that Draghi under delivers.

US markets are closed today in observance of Memorial Day. The US celebrates the day with parades, ceremonies for veterans at the cemeteries and of course, hot dogs, apple pie, fireworks and plenty of flag-waving. The California wild fires are wrestled under control but the Arizona wild fires are only 25% contained and expected to continue burning for a few days or weeks. S&P futures +6. Dow +60. Nasdaq +12. Gold 1293. Global markets are revved up and ready to print more record-breaking all-time highs. Ukraine, schmoocraine.

SUNDAY 5/25/14; Poroshenko Wins Ukraine Election

Millions vote in West Ukraine and Kiev but the pro-Russian separatists prevent any voting in East Ukraine. The separatists are destroying ballot boxes with clubs and sledge hammers. At 1 PM EST, Poroshenko’s optimistic message wins the elections as he is projected to win the presidency according to exit polls (unofficial results).

Pope Francis performs mass in Bethlehem ...........

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

................ The Bangkok SET drops -1%.

PFE is near abandoning the AZN bid. Warren Buffett’s Chinese battery-maker BYD Company is halted from trading on news it plans to issue more shares. The dilution is expected to whack the stock about -15%.

Saturday, May 24, 2014

SATURDAY 5/24/14

TM recalls 50K SUV’s for seat belt problems. The Thailand military coup continues with schools, universities and television stations shut down until tomorrow to restore calm. A curfew is imposed on Thai citizens from 10 PM to 5 AM local time. UK elections show a growing majority of citizens want to steer away from the European Union. Election results for other European nations are out tomorrow.

One-half of the East Ukraine polls are shut down by pro-Russian separatists. Putin calls the Ukraine violence a “civil war”. Petro Poroshemko, nicknamed the ‘Chocolate King’ since his billion dollar net worth is built on candy, is expected to win the Ukraine presidency. His name should be Rich-oshenko. Poroshenko speaks optimistically about Ukraine’s future and promises to visit Donetsk and other East Ukraine regions to unify the country. He boasts that he is capable of dealing with Russia. Pope Francis travels to the Holy Land for a three-day trip and plans to visit Jordan, Bethlehem and Jerusalem.

Friday, May 23, 2014

FRIDAY 5/23/14; New Home Sales

The dollar/yen leaps higher from the 100.83 low up to 101.95 over the last day gaining one full point. The weaker yen fuels the Japan and US stock markets higher. NIKK +0.9% near 14.5K. Australia, China and South Korea stocks are all higher. China property stocks jump +2% to +4% higher, keeping the real estate bubble alive, as housing purchase restrictions are eased. The Indian Rupee continues to strengthen to 58.45 printing an 11-month high at 58.36. Copper moves strongly higher up +0.8% to 3.17 encouraging market bulls.

The Thailand unrest continues with the military now in full control .......

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

TRAN prints a new all-time closing and intraday high at 7987 and 7995, respectively, so the Dow needs to keep moving higher to print new all-time highs above 16720 to verify the continuing rally from a Dow Theory perspective. Semiconductors, SOX, gain +1%. HPQ is an outperformer today up +6.1%. ARUN loses -11%.

For the week, the SPX gains +1.2%, the INDU is up +0.7%, COMPQ gains +2.3% and RUT +2.1%. Tech and small caps lead higher this week but note that tech outperforms small caps. The tech and semiconductor stocks did a lot of the heavy lifting this week. The weekly volume is the lowest of the entire year thus far. Financials are instrumental in creating the market upside this week. XLF +1.4%. Regional banks feel lots of love and create broad market upside. KRE +2.3%. The banks gaining in the back half of the week greatly helped the market bulls. AAPL gains +2.8% this week leading the Nasdaq higher.

American consumers are in shock over the high beef prices as they plan the weekend barbeque so many opt for chicken instead. The pre-holiday stock market bullishness played out yesterday and today. Markets are closed until Tuesday. WTIC oil is 104.35 and Brent crude oil is 110.44 ahead of the Ukraine elections. The 10-year yield is 2.54%. Gold 1292. Copper gains +0.8% to 3.17. Studies on the oil shale energy boom in the US are showing that the potential oil reserves may be vastly overestimated. The road to US energy independence may become more difficult.

Thursday, May 22, 2014

THURSDAY 5/22/14; Global PMI's; Retail Earnings Barrage; Existing Home Sales; Leading Indicators

China manufacturing HSBC PMI is 49.7 beating estimates and the best number in five months. Last month was 48.1. Copper moves higher. Analysts are quick to say that China is stabilizing. The positive manufacturing data along with the happy Fed mood from yesterday sends Asian stocks higher. The dollar/yen is 101.56 and climbing so the weaker yen fuels a higher stock market. The NIKK jumps +2.1% to 14338. The SSEC is flat and HSI gains +0.5%. Australia’s SPASX200 gains +1% since basic materials are back in vogue with a stronger China. India continues the post-election positivity with the BSE Sensex moving +0.8% higher.

Putin continues saying that Russian troops are withdrawing from the Ukraine borders ahead of the Sunday elections but no movement is seen. Russia’s Defense Ministry says troops will remain in a stand-down mode until 6/1/14 to reduce tensions. The hope is that a new Ukrainian president will be elected on Sunday that can deal with Russia moving forward. SPIEF, Russia’s biggest economic summit, begins. WTIC crude oil remains sticky at 104 and Brent at 110.

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

The day ends with the SPX up 4 points, +0.2%, to 1892. The Dow gains a marginal 10 points, +0.1%, to 16543. The Nasdaq is up 23 points, +0.6%, to 4154. The RUT gains 10 points, +0.9%, to 1114 remaining under the 200-day MA at 1118. BBY gains +3.4%. SHLD +4.2%.

After the bell HPQ meets EPS on the dot but misses on the top line. Hewlett-Packard plans to fire between 11K to 16K workers bringing the total job cuts to 50K as HPQ becomes lean and mean. GPS and ROST earnings are in line. ARO misses. GME beats on earnings. The retail earnings are a mixed bag with the BBY and SHLD heavy-hitters swinging and missing this morning (but the stocks recover strongly today). BRCD and MRVL post earnings in line so these results may offset the HPQ news and keep the Nasdaq steady.

Penny stocks are rallying the fastest on record and more so than previous multi-year market tops. OTC activity is very robust as traders chase into the riskiest stocks. A small business slowdown is occurring globally and creates the sluggish lackluster world economy. Small business is the engine for employment growth but the formation of new businesses is on the decline currently.

Wednesday, May 21, 2014

WEDNESDAY 5/21/14; TIF; TGT; Fed Speakers; FOMC Minutes

The BOJ maintains the current monetary policy and refrains from announcing additional stimulus at the conclusion of the two-day central banker meeting. Governor Kuroda surprises traders since inflation is nowhere near the 2% target. Kuroda says Japan can continue recovering despite the sales tax increase. The dollar/yen drops through the 101 level to 100.83 since the yen strengthens. Money printing weakens a country’s currency and pumps the stock market higher as the easy money is used to buy stocks. When the money printing levels off, decreases or stops, the currency gains strength which sends its stock market lower. The lack of additional stimulus from the BOJ sends the yen higher, dollar/yen lower down through 102, and the NIKK lower losing -0.2%.

The Fukishima nuclear disaster continues with Japan stifling any news flow. A fire occurs at the troubled triple-melt down facility but there is no way to verify the incident. Musician Paul McCartney cancels his Japan tour due to illness but maintains his schedule for Seoul, South Korea, on 5/28/14 as well as the US gigs. McCartney is very health conscious so perhaps he wanted to avoid any nuclear exposure? The California Coastal Commission says the threat to health from the Fukishima contamination in the Pacific Ocean waters is minimal. The commission is also quick to report, however, that the long term effects to health due to low doses of radiation over a long period are unknown. In other words, you can swim in it but the writers of the report will likely not.

Iron ore prices are at multi-year lows .....

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

HRL hurls -1.4% on lackluster earnings and a weak outlook. INTU dumps -4% after reducing its guidance. Target earnings are 70 cents versus 71 cents expected. Top line is barely on the mark and the 2014 forecast is cut. TGT trades flat. GM recalls more automobiles; 220K Chevy Aveos due to potential fires. GM trades flat. EBAY experiences a cyber attack and directs all users to change passwords. Petsmart reports weak earnings. Times are bad if the pets cannot feel some love. PETM collapses -7%. Futures remain robust since the dollar/yen recovers to 101.35. S&P +7. Dow +65. Nasdaq +11.

The session begins with equities moving higher the Dow is up nearly triple digits. The SPX jumps to 1883 gaining over ten points. The 10-year yield is up to 2.55% five basis points higher over the last few hours. The VIX drops under 12 to 11.96 providing bull fuel. Copper remains weak. Financials jump strongly higher. XLF +0.8%. TGT gains +1% despite the disappointing results. LOW -0.2%. TSL is up a sunny +22%.

Markets remain elevated as Fed speakers Dudley, Yellen, George and Kocherlakota speak. Fed Chair Yellen provides a graduation address at New York University at Yankee Stadium which sounds like an infomercial to promote the Fed. Yellen defends former Fed Chair Bernanke’s decisions. What else is she going to do? She is a co-conspirator along with Bernanke and Dudley, the dovish triumphant at the Fed the last few years that have forced the ongoing Keynesian monetary policies down everyone’s throats.

The dollar/yen remains above 101.40 supplying bull juice for equities. Ditto the low volatility. A low TRIN under 0.70 also provides bull fuel for equities. WTIC oil moves above 104. The equity bulls are in party mode pushing stocks higher but on light volume.

President Obama speaks concerning the developing VA scandal and promises to get to the bottom of the trouble at the veteran’s hospitals and fix the problems. To become reelected in November 2012, the president promised that everyone could keep their health insurance and doctor under Obamacare but that was a lie. The president also promised to investigate the Benghazi and IRS scandals but instead the Whitehouse is stonewalling and delaying the investigations; these two promises qualify as hollow rhetoric. So no one is holding their breath about the president fixing the VA especially when he has been aware of all the problems the last few years. Veterans deserve to be treated with far more respect.

At 2 PM, the FOMC Minutes show that Fed members are debating the slack in the economy (low employment). The Fed discussed rate hike procedures but do not plan action any time soon. The Fed does not plan to raise the benchmark rate until spring or summer 2015 and some analysts believe summer or Fall 2015 is more likely. The comments are viewed dovishly at first blush with a highly accommodative Fed in play so stocks run higher and print at the highs of the day. The Dow is up over 150 points and SPX prints above 1887. The 10-year yield drifts lower towards 2.53%. Equities reverse course in quick order with the SPX dropping to 1881 at 2:15 PM, then rebounding again and the SPX runs back up to 1887 at 2:45 PM. The choppy sideways whipsaw market behavior continues.

12 more Russian oligarchs are targeted with new sanctions from Europe and the US. OIS pops +2.5% on an upgrade. PEGA bounces +5.5% on an upgrade. The US Dollar, USD, moves above 80 to 80.18. The dollar/yen remains elevated at 101.4 The VIX dips under 12 again at 3:10 PM so this provides another push higher for equities printing at the highs of the day again. TIF, SNDK and WMB print new highs and lead the broad market higher. Retail bounces back today. TGT recovers from this morning’s doldrums and prints +0.7% higher.

Markets remain buoyant into the closing bell due to the low volatility, weaker yen and low TRIN. At the closing bell the SPX gains 15 points, +0.8%, to 1888, recovering all of yesterday’s losses then some. The Dow leaps 159 points higher, +1%, to 16533. The Nasdaq gains 35 points, +0.9%, to 4132. The RUT gains 6 points, +0.5%, to 1104, and was actually negative for the first half of the day. Volume is anemic on the same order as Monday’s buying volume which was the second lowest day of the year. Yesterday’s selling volume outpaces both up day’s volume this week. TRAN +0.6%. XLF +0.6%.

TSN loses -2.2% as meat supplies remain tight. SHLD is smacked -3.7% citing difficult operating conditions for the Canada stores. Retailers are now blaming Canada as much as the weather for poor sales. CSCO gains +1.5% developing into a tech favorite after the positive earnings announcement. DAL gains +1.4% as the airline joy continues from last year.

Tuesday, May 20, 2014


The dollar/yen is trading wildly dropping to 101.10 (stronger yen) which is a four-month support level and near the 200-day MA. The dollar/yen then jumps higher to 101.57 (weaker yen) but then drops again to 101.35. Euro/yen is at a 3-month low at 138.787 going back to early February. The NIKK ignores the erratic currency moves and gains +0.5%. Japan utilities move higher supporting the market. A two-day BOJ meeting begins. The Aussie dollar drops below 0.93 to 0.9271. Asian indexes are mixed each side of the flat line.

China reacts angrily against the spying allegations from the US yesterday. China says the government and military has never conducted cyber spying against the US. The relationship between the US and China is damaged from the spying allegations and China plans to retaliate. China says the US is a thief calling other countries thieves. Russia’s Putin is in Shanghai discussing a joint 30-year China-Russia gas deal. The negotiations are continuing as both sides fight over price.

Thailand’s army declares martial law. The Bangkock SET drops -1.1%. The Thai Baht loses value. The army says this is not a coup and the government is functioning but if it quacks like a duck, it’s a duck. The army says it is keeping peace and order as the political factions sort out their differences and work towards a transitional government. The turmoil is destroying Thailand’s tourism industry. Indonesia’s Jakarta loses -2.7% as worries surface over elections within two months. There are a huge number of elections this year in emerging market countries across Asia. India has set a happy tone so far.

Russia’s Medvedev says the US and Europe sanctions can lead to a new cold war. On the African continent, questions grow over the safety of doing business in Nigeria which is Africa’s strongest economy. Suicide bomber blasts are targeting Christians in Nigeria. The school girl kidnapping and ransom drama by Boko Haram, now called the Al-Qaeda of West Africa, continues.

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

The session ends with the SPX down 12 points, -0.7%, to 1873, sitting between the 20-day MA resistance ceiling above at 1879 and the 50-day MA support floor below at 1868. The standard deviation bands on the SPX daily chart are very tight indicating that a very sharp, quick and strong move is about to occur, up or down, of about 20 or 30 handles or more. The Dow loses 138 points, -0.8%, to 16374. The COMPQ drops 29 points, -0.7%, to 4097. The RUT loses 17 points, -1.5%, to 1098, remaining under its 200-day MA. Surprisingly, a Tuesday is lower. The 5-month trend is for 90% of the Tuesday’s to finish positive. The 10-year yield is 2.50%.

The retail sector is crushed today due to the weak earnings releases. People are not buying apparel and have less money to spend since food inflation and higher gasoline prices are cutting into budgets. RTH -0.9%. XRT -2.1%. TGT -3%. WMT -1.2%. SPLS -13%. DKS -18%. HD bucks the trend gaining +1.9%. Biotech is bashed with IBB losing -1.4%. Internet stocks tumble lower with FDN -0.7%. Regional banks are slapped with KRE -1%.

After the bell, beats by a penny on EPS 11 cents versus 10 cents and the top line is 1.23 billion versus the 1.21 billion expected. CRM bounces +0.6%. ADI pops +2% on better than expected earnings. 

Monday, May 19, 2014

MONDAY 5/19/14; CPB

The Indian Rupee is at a one-year high at 58.7825 continuing to strengthen after Modi’s election. ICN continues higher. Indian banks ICICI and HDFC catapult +10% and +6% higher, respectively. TTM +2.6%. The BSE is at 24122 and climbing with the Nifty above 7.2K. Nearly all assets are higher in India. Modi says he is “doing God’s work.” Indian ETF’s such as EPI and IFN move higher. S&P futures are +3.

Japan Machinery Orders jump strongly higher +16.1% far above expectations. The positive data dampens the expectations for more easing from the BOJ so the yen strengthens and the dollar/yen leaks lower. Dollar/yen 101.40. The NIKK dumps -0.6% overnight. The SSEC loses -1.1% and Australia’s SPASX200 is beaten -1.3% the worst performer in Asia. Iron ore prices continue to drop and miners lose from -1% to -4% across the board. The top Aussie banks drop about -1%. Thailand’s growth numbers are shrinking more than expected.

China property market data shows that a slowdown in the housing sector may be accelerating. New regulations are implemented in the banking sector to crack down on shadow banking. Chinese banks and property stocks tumble from -2% to -3% lower. Asia trades lower across the board with the exception of the KOSPI printing positive by a hair building on last week’s big +3% bounce.

Russia’s oil and gas giant Gazprom is up for eight consecutive days. Sanctions are a joke. NATO says there are no signs that Russian troops are pulling back from East Ukraine border areas but Putin says they have pulled back. BOE’s Carney says the UK house prices are the number one worry. European indexes open and trade flat to lower. Healthcare, basic resources and banks are lower. Qatar investors, the Royal Family, take a major stake in DB which trades -0.4%. CS drops -1.2% as talks to settle the fines from US regulators continue. Euro 1.3720. At 4 AM, S&P futures leak lower to -4.

PFE makes a final offer for AstraZeneca to $117 billion which is refused. AZN plummets -14%. T buys DTV for $48.5 billion the third largest deal this year. The global M&A in the telecom sector continues. GE continues to jump through hoops now seeking partners to win French approval for the Alstom deal.

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

The SPX gains 7 points, +0.4%, to 1885. The Dow gains 21 points, +0.1%, to 16512. The Nasdaq leaps 35 points, +0.9%, to 4126. The RUT jumps 12 points, +1%, to 1114. The high-growth biotech stocks outperform. IBB +1.4%. Semiconductors also provide bull juice. SOX +1.1%. Utilities are sold off today with UTIL dropping -1.5%. TRIP gains +5.2%. WAG jumps +3.1%. AZN collapses -12%. CPB -2.4%. LifeLock dies with LOCK collapsing -18%. Pepsi announces and demonstrates the ‘Spire’ kiosk beverage dispenser innovation. Spire permits the consumer to mix their beverage of choice through a touch-screen selection process. PEP loses -0.5% but was lower earlier in the session. HD loses -1.1% with earnings on tap in the morning. Does someone know something ahead of time?

After the bell, Urban Outfitters misses on earnings with a 20% profit drop. The retailer is slow to embrace the new trend of ‘fast retailing’, which speeds the process of bringing fashion from the catwalk to the consumer. URBN is beaten -4.6%. GoPro, the head-mounted camera-maker popular with athlete’s, files for an IPO.

Sunday, May 18, 2014

SUNDAY 5/18/14

A study shows that America is moving more towards a plastic and mobile payment world with 80% of the people now carrying $50 or less in their wallets or handbags. An astonishing one-half of all Americans now carry $20 or less in their pockets on any given day. 24K acres burn in San Diego but the wild fires are finally coming under control in southern California. Concern grows over the drought and decreasing water supplies in the southwest US.

The Veterans Administration scandal ...........

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

Riots turn ugly in Vietnam with several people dying from clashes between pro-Vietnam and pro-China workers. China’s aggression in taking control over territorial waters in and around the South China Sea are causing protests and destabilizing neighboring Asian countries. Thousands of Vietnamese are protesting against China and the police are attempting to restore calm. China is recalling its foreign nationals in Vietnam for fear of their safety. South Korean auto maker Hyundai Motor recalls 140K vehicles due to faulty air bags.

Saturday, May 17, 2014

SATURDAY 5/17/14

Portugal exits the bailout program but the economic problems remain. The BOJ stabbing the yen during 2013 created the huge rally to six-year highs for the European stock markets as well as the record low yields on notes and bonds. The rise in these asset prices creates the illusion that all is well but if you travel to Portugal, panhandlers will hound you for loose change. The youth unemployment is shamefully 37% but leaders say the skies are blue.

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

A large orange box sitting at a busy intersection in San Francisco, California, placed by AMZN, creates a mystery. Social media is abuzz as to what is inside the large garage-sized box. The giant locker is revealed as a promotional gimmick by Nissan and Amazon to promote a new SUV model.

A third person in America contracts the deadly MERS virus. This is the first case in the US where MERS is transmitted to another person (the two other cases are health care workers that were exposed in Saudi Arabia) from a simple handshake.

Friday, May 16, 2014

FRIDAY 5/16/14; Housing Starts; Consumer Sentiment

Japan’s NIKK drops -1.4% as the dollar/yen drifts lower to 101.30. Japan’s blue-chips such as SoftBank and Sony are slapped hard over the last couple days. China markets trade flat. China’s bad bank loans are rising. Australia’s SPASX200 loses -0.6%.

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

The session ends with the SPX up 7 points, +0.4%, to the strong resistance at 1878, unable to close above the critical 20-day MA at 1879. The two-day selloff ends. The Dow gains 45 points, +0.3%, to 16491. The Nasdaq moves 21 points higher, +0.5%, to 4091. The RUT is up 7 points, +0.6%, to 1103. Much of the day had the major indexes moving in unison up about +0.3% higher indicating that the robots are doing the trading today. TRAN gains +0.8%. GM -1%. DRI -4.3%. All-time record market highs are printed this week for SPX and Dow. David Tepper comments create market negativity mid-week.

For the week, the SPX is dead flat losing less than one point, -0.03%. The Dow is down -0.6%. The Nasdaq gains +0.5% on the week and RUT loses -0.4%. Telecom is the winner this week and financials the loser. XLF loses -0.8%. The drop in Treasury yields hurt the banks due to a flatter yield curve. Tech is obviously a winner with the positive Nasdaq. CSCO earnings create the oomph in tech. The retail sector is a mixed bag. WMT and KSS earnings misses cause a drag on stocks while the M earnings create lift. Iron ore prices hit a 20-month low as traders sort out China’s growth numbers and need for steel moving forward.

US Treasury note and bond yields are trending lower warning that the economy is not healthy. Investors are willing to remain in Treasuries for the perceived safety rather than invest in the stock market at all-time highs. The bond market anticipates the first Fed rate hike to occur in the October 2015 time frame but the general consensus and even the Fed itself is currently targeting April-July 2015. The bond market is typically correct so the economy is likely weaker than thought but plenty of bullish traders and analysts say it is different this time and the stock market is correct and the bond market is wrong.

European note and bond yields are creeping higher over the last couple days in Europe. The Spain and Italy yields are above 3% moving higher hinting that traders are becoming concerned over the slow pace of Europe’s recovery. The easy money, mainly cheap yen created by the BOJ, that pumped European stock and bond prices artificially higher over the last year, is losing its punch.

April's Market Chronology 2014-04 Available from Amazon

Keystone the Scribe, one of Keybot's sister blog sites, releases the latest issue of the Daily Chronology of Global Markets and World Economics April 2014-04 available on Amazon's Kindle. A handy link is provided in the left margin. All the recent eBook links are provided in the margins.

If you are a seasoned professional trader or a novice wanting to learn how and why markets move in real-time, the daily chronology series are the books for you. The eBooks detail market reactions to the Monthly Jobs Reports, Fed meetings, economic data, earnings releases and geopolitical events. Business and economic teachers and students enjoy the chronologies since textbook theory comes to life. Read about how the IPO frenzy and global M&A orgy are affecting markets. Become educated on how Ukraine turmoil affects global markets and currencies.

As always, special thanks to the international support for the K E Stone Blog Series of Web Sites especially the strong following from major money centers in New York, Chicago, London, Frankfurt, Paris, Singapore, Hong Kong, Tokyo and Sydney and the loyal following from the US, Canada, Mexico, Australia, UK, Germany, France, Russia, China (yes, Russia and China) and Malaysia. The blog sites only continue with the ongoing support of the entire readership, all followers large and small, professional and novice. Keystone the Scribe is the respected world leader in providing historical context for global markets and world economics. Read the Daily Chronology of Global Markets and World Economics April 2014-04 issue today to gain a vital market edge.

Thursday, May 15, 2014

THURSDAY 5/15/14; WMT; KSS; CPI; Empire State; Industrial Production; Philly Fed; JCP; JWN

Japan Q1 GDP is a huge 5.9%, the strongest in over two years, as shoppers ramped up purchases ahead of the sales tax increase so expect a big drop-off going forward. Dollar/yen 101.90. NIKK loses -0.8%. Financials are hit with Sumitomo Mitsui down -3% on weak profits and Credit Saison down almost -13% due to weak earnings. SSEC -1.1%. HSI +0.7%. China property shares are down about -2% across the board. Tencent catapults +6% on strong earnings. India markets are higher with the BSE gaining +0.4% ahead of the final election results due out tomorrow. KOSPI trades sideways with Posco Steel losing -1%.

The Russian Ruble is 34.7035 ................

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

Traders are shaken-up over the failure of the 2.50% level on the 10-year Treasury yield. The 2.46%-2.48% level is strong support where the yield bounced intraday. Gasoline prices at the pump are not moving lower as many analysts promised one month ago.

Fed Chair Yellen speaks in the evening and highlights that US small business confidence is at a six-year high. Notable technical analyst Ralph Acampora says the stock market may drop from -10 to -15% or more. The small caps may drop -20% to -25%. Acampora says, “I have a sick feeling.” The Israeli Defense department says chemical attacks are continuing to occur in Syria.

Latest SEC filings show David Tepper’s Appaloosa Management buying GOOG, FB, EXPE and PCLN and exiting EMC and VZ. David Einhorn of Greenlight Capital likes NOK, CONN and HTS and exits his entire position in GM. Leon Cooperman has also ditched his shares of GM. Cooperman continues to call for SPX 2000 this year. Warren Buffett bets big on WMT going forward. Jim Chanos continues to short CAT and is also shorting VRX.

Wednesday, May 14, 2014

WEDNESDAY 5/14/14; M; DE; PPI; CSCO; Tepper Selloff

WTIC crude oil is at 102 rising a couple bucks over the last couple days. Brent is 109.70 approaching 110. Gasoline prices at the pump in the US are rising towards four dollars per gallon and will remain elevated with the elevated oil price. Australia releases the federal budget and stocks trade flat. Future rate hikes by the RBA may not occur until late 2015 and beyond. The dollar/yen leaks lower to 102.08 so the stronger yen pushes the NIKK lower. The global M&A orgy continues with comic book and media publishers and distributors Kadokawa and Dwango gaining +10% after announcing a merger deal. SNE gains +1% ahead of earnings which show that a disappointingly large half-billion loss is on tap for this year.

The Bank of China jumps +1.7% after announcing that it will raise $16 billion by offering preferred shares. The SSEC is down -0.1% and HSI up +1%. Asia markets in general are mixed finishing on each side of the flat line. The KOSPI is the big winner gaining +1.7% and South Korea is the new favorite flavor for international traders. Car makers Hyundai and Kia jump +2% and +4%, respectively, as traders chase into South Korean stocks buying up the blue-chip names.

China’s 10-month investigation into GSK bribery charges ........

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

David Tepper, Appaloosa Management, the top-producing hedge fund last year, speaks at the SkyBridge Capital’s SALT 2014 conference in Las Vegas, and says it is time to be nervous concerning the equity markets. Tepper says, “I’m not saying go short, I’m just saying don’t be too fricking long right now. I am nervous. I think it‘s nervous time.” Back in 2010, Tepper encouraged everyone to go long when there was rampant fear in the markets. He said the obscene money printing by the Fed will continue to send stock prices higher and he was correct. The stock market push higher from 2010 into 2011 was dubbed ‘The Tepper Rally’.

Tepper remained bullish last year but started to express caution. He clearly thinks markets are topping. Tepper says he is, “afraid of deflation.” His comments move the stock market lower in the afternoon; many of Tepper’s wealthy hedge fund friends likely knew what he was going to say and have been throwing stocks overboard since the opening bell. The Treasury yields are dropping like a stone today and the Tepper comments exacerbate the move lower.

Equities move sharply lower beginning at 2:30 PM EST and drop into the closing bell. The session ends with the SPX down 9 points, -0.5%, to 1889. The Dow loses 101 points, -0.6%, to 16614. The Nasdaq loses 30 points, -0.7%, to 4101 hanging on to the 4.1K level. The RUT drops 18 points, -1.6%, to 1103 hanging on to the 1.1K level. Tech and small caps lead lower. A weak retail sector and financials create market weakness. RTH -0.8%. XLF -0.7%. The 10-year yield is 2.54% collapsing from 2.65% only one day ago.

After the bell, SEAS misses on earnings and drowns -4% in AH trading. CSCO beats on earnings and leaps +7%. Rival JNPR shares also bounce. The upbeat Cisco news will help elevate the Nasdaq tomorrow. Agilent guides lower so A is smacked -2%. JACK sells off after missing on earnings. SHLD drops on news that suppliers for Sears are voicing concern over payments and the Canada stores are reporting very weak sales. SHLD lost -6% today.

Tuesday, May 13, 2014

TUESDAY 5/13/14; Retail Sales; Business Inventories

The dollar/yen is 102.33 well above the sub 102 numbers reflecting the weaker yen that creates the stronger stock market. The NIKK gains +2% following the US lead. Singapore, Malaysia and Thailand markets are closed today. China retail sales and other data show a continued slowdown occurring. Secretary Lew is in China discussing the yuan exchange rate and policy. FB explores the idea of opening an office in China to reverse years of non-activity. The SSEC is flat with HSI up +0.4%. KOSPI gains +0.9%.

India’s exit polls show that Narendra Modi’s Bharatiya Janata Party is the winner which will create a more business-friendly environment; hence the BSE pops +2% higher continuing to print record highs. Pro-Russian separatists in East Ukraine.................

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

The Nasdaq and RUT indexes sell off today losing -0.3% and -1.1%, respectively. Small caps are thrown out the window so yesterday’s joy hints of more short-covering than anything. The Bundesbank comments about supporting the ECB to stimulate the European economy greatly helped keep the broad stock market elevated today. The ECB appears locked in to providing stimulus on 6/5/14.

A tragic coal mine explosion in Turkey kills 205 miners with the death rate rising. 100 other miners are trapped. $745 million in art sells at a two-day Christie’s auction. The demand is robust with wealthy world citizens bidding prices higher and higher. Obviously the art bubble is expanding to epic proportions.

Monday, May 12, 2014

MONDAY 5/12/14; East Ukraine Regions Vote for Self Rule; Stocks Rally; SPX, Dow and TRAN Print New All-Time Highs

Two Ukraine regions Luhansk and Donetsk vote in favor of self-rule and a break from the Kiev government. Russia respects the decision and says the regions should be allowed to choose their direction without violence. 89% of the vote is for secession with 10% voting no and a 75% voter turnout. Since there are few election records, the results are questionable. About 50% to 70% of East Ukraine is actually in favor of the Kiev government not Russia. The voter turnout is suspected to be about 30% rather than the 75% cited. The results are not recognized by the Kiev government.

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

NAT pops +4% after beating on earnings and sends other shipping stocks higher in AH trading. RAX beats on earnings and catapults +12% which will help continue the Nasdaq happiness tomorrow. Medical supplier MCK beats on earnings and trades higher. With the exception of RDEN, the earnings releases are positive across the board.

Television personality James Cramer proclaims “We shouldn’t be talking bubbles. We should be talking incredible shrinking bubbles. The idea that we are about to see a hideous 2000-like bubble collapse smack more of fiction than of fact.” Cramer further adds, “And while the averages are currently hitting all-time highs, understand that the valuations are pretty tame.” A second case of the deadly MERS virus is reported in Orlando, Florida. A health care provider working and living in Saudi Arabia is infected.

SUNDAY 5/11/14

Happy Mothers Day. Fed’s Lockhart provides his once per month speech from Dubaii and is concerned over low inflation (central bankers cannot bring themselves to say the ‘D’ word; deflation). He is worried over the tepid growth but says “ther is a very high bar to change the tapering decision.” Thus, QE is on track to end later this year. Lockhart says H2 of 2015 is his targeted area for a rate hike but this scenario is not cast in stone.

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

London is the city with the most billionaires more than Moscow or New York. Interestingly, however, only one-third are British so obviously the wealthy seek out the lower tax areas.

Saturday, May 10, 2014

SATURDAY 5/10/14

China’s PBOC Governor Zhou Xiaochuan comments on the expectation that the central bank will provide more stimulus, especially a relaxation of the triple R requirements (the amount of money a bank must maintain in reserves), saying China has no plans to implement any large-scale stimulus programs. This news is a nasty surprise in trader’s Cheerio’s this morning. Global investors are expecting continued stimulus from the PBOC. China is placing more concern on the long term rather than short term fixes but they must weigh the problem of growing unemployment and food inflation. Food inflation occurred and resulted in the downfall of all Chinese dynasties throughout history.

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

The Times, WSJ and publish a list of the best-selling products of all time in order from one through ten; PlayStation, Lipitor, Corolla, Star Wars, iPad, Mario Brothers Franchise, Michael Jackson’s Thriller, Harry Potter, iPhone, and the Rubik’s Cube. This creates an image of America as folks hooked on prescription meds while playing video games, watching movies, listening to music and talking on the phone. They prefer to drive Toyota’s and place a Rubik’s Cube on the end table to impress guests. Mom’s everywhere should have a happy Mother’s Day tomorrow since TIF had a good week gaining +0.5%. Lots of little blue boxes must be planned as gifts.

Friday, May 9, 2014

FRIDAY 5/9/14; RL; Wholesale Trade

China inflation in April rises 1.8% the lowest reading in 18 months and the slowest pace of rising since 2008. The global disinflationary and deflationary shadow continues to stalk the world. The low China inflation does not jive with the strong 7% to 8% GDP growth constantly reported. Asian markets trade mixed on each side of the flat line. US futures are flat. Dollar/yen 101.72. The NIKK prints a slight gain but is down -1.8% on the week. Rakuten, an e-commerce company, plummets -5% on weak results. Canon announces a buyback and bounces +2%. Anti-government protests continue in Thailand. India markets rise ahead of election results to be announced in a few days.

Russia celebrates Victory Day (when Russia defeated Nazi Germany in WW II) by displaying its military hardware and might. Ukraine tensions are expected to increase due to Victory Day. Pro-Russian separatists plan to go ahead with the referendum secession vote this weekend. The EU threatens the serious Level III sanctions but both sides know that Europe will be hurt as well. Putin plays a cagey game saying he is pulling back troops from Ukraine borders but Russia troops remain in place according to the UN and satellite imagery. Putin arrives in Crimea to review Russia’s fleet.

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

President Obama speaks from a WMT store embracing the big-box non-union culture that he vehemently opposed a few short years ago. Union leaders cry foul since it appears the president is throwing organized labor under the bus. The EPA plans to increase regulations on fracking chemicals. Beef prices are at highs not seen since 1984 and pork prices are at highs not seen since 1998. Smaller cattle herds are maintained due to the drought conditions in recent years. The PEDv hog virus is limiting supply in the pork industry.

Thursday, May 8, 2014

THURSDAY 5/8/14; ECB Rate Decision; Draghi Sends Euro Lower; PCLN; 30-Year Bond Auction

China’s trade data is better than expected with both imports and exports increasing. Asian indexes run about +0.5% higher on the news. The Aussie dollar is 0.9382. Australia’s jobs data is far more positive than expected with over 14K jobs created in April. Nickel is at a 2-year high due to Indonesia limiting supply. Chinese energy stocks bounce strongly higher following the US lead. NIKK rebounds +1.3%. Dollar/yen 101.82. TM reports a blowout 90% increase in profit over the last year. Softbank drops -2% adding to the prior days -5% loss. Chinese ships intentionally ram into Vietnamese ships in the South China Sea so the Vietnamese market drops -5%.

Ukraine turmoil continues and Russia does not appear to be ............

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

Housing data shows that cash sales are making up a huge 45% of the sales transactions in Q1. In some major cities such as New York, the cash buyers are over one-half the market even towards 60% of the sales. The cash buyers keep home prices elevated and out of reach for the young starter family. Wealthy Chinese and Russians, as well as the rich in the US, made richer by the Fed’s policies, are taking obscene stock gains and buying real estate, art, collectibles, wineries and other high-end investments. The Fed and central banker intervention causes market disruptions and distortions, destroys price discovery and is not helping the common folks that remain unemployed. Folks are cashing out of their 401k plans using the money to meet monthly bills.

The House approves the formation of a select Benghazi committee to investigate this potential cover-up in more detail. The vote for the Benghazi committee passed on a vote of 232 to 186 with seven democrats voting in favor of the committee. Minority House Speaker Pelosi instructed all democrats to vote against forming the committee. The IRS plans to turn over all of Lois Lerner’s emails in light of the contempt vote last evening. The IRS has audited 10% of the Tea Party donors. This is shameful since 1% is the average. Ten times as many Tea Party folks are audited than everyone else. What happened to the US? Perhaps the Lerner emails will help the ongoing IRS scandal investigation.

Wednesday, May 7, 2014

WEDNESDAY 5/7/14; Fed Chair Yellen Speaks; 10-Year Note Auction; TSLA

Asian markets fall the most in seven weeks with all indexes down about -1% or more. Japan and South Korean markets are trading again after the holiday. The NIKK drops -2.9% to the 14K level. Dollar/yen 101.45. Financials are slapped silly with Mitsubishi UFJ plunging -3% and Sumitomo Mitsui collapsing -4.5%. The weak Asian banks follow the lead of the weak US banks. Australia’s retail sales are weaker than expected. KOSPI -1%. The Korean Won is at a six-year high against the dollar. The New Zealand Dollar remains elevated but pulls back after central bank governor Graeme Wheeler warns that the currency can be sold to stem the rise. India loses -0.6% as the country prepares for election results on 5/16/14 only nine days away.

Analysts say a correction is underway for Chinese property stocks. China services data ..................

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

SCTY’s EPS loss is bigger than expected but revenue is better and it pops +7%. TSLA collapses -8% despite beating on top and bottom line earnings. Tesla’s forward guidance is disappointing. Z jumps +3.6% after missing on EPS but beating on top line sales. Companies that are beating on the top line number are being rewarded since they show that growth is possible going forward. FOXA jumps +3.4% on an earnings beat with the media company benefiting from the Super Bowl advertising and cable growth. So the earnings releases are generally positive except for Tesla. This should help global markets continue a bullish party.

The House votes to hold Lois Lerner, the figure at the heart of the IRS scandal, in contempt. A resolution also passes asking for a special counsel to investigate the scandal. The voting is along partisan lines but 26 democrats do cross the line and call for further investigation into the IRS scandal.

Global citizens are rising up to strike on 5/15/14 against MCD and other fast-food restaurant companies such as BKW and YUM  to protest low wages. The world becomes smarter each day realizing the central bankers are simply making themselves and their wealthy friends wealthier at the expense of everyone else.

The Nigeria girl abduction tragedy continues with the radical Boko Haram leader selling girls into slavery for as little as $12. Nigeria is a major economic power in Africa. The Boko Haram trouble is mainly in northern Nigeria. The oil fields are in southern Nigeria nearer the coast and remain somewhat unaffected by the ongoing tragedy. The Muslim population is greater in the north while the Christian population is greater in southern Nigeria. International aid is arriving in Nigeria to help locate the missing girls.

The US Department of Transportation orders all rail carriers to notify communities if transporting volatile Bakken crude oil. There are no restrictions placed on rail car design as yet. From the strange but true department, a man is denied a marriage license because he wants to marry his Apple MacBook computer.

Tuesday, May 6, 2014

TUESDAY 5/6/14; International Trade; DIS

RBA maintains the key interest rate at the record low 2.5% as expected. Glencore Xstrata earnings are in line and trades down -0.9%. Glencore expands copper production by 25% in the face of a slowing China. Asia markets trade mixed. Bangkok SET drops -0.7% as the Thailand violence continues. Thai PM Yingluck Shinawatra faces the courts over corruption and abuse of power charges. Dollar/yen remains above 102 at 102.09.

European markets open higher and the S&P futures are +5 with Dow +40. The Treasury yields are; 2-year 0.42%; 5-year 1.69%; 10-year 2.62%; 30-year 3.41%. It remains absolutely remarkable that the Spanish 5-year yield is below the US 5-year yield and the German 10-year yield is under the US 5-year yield. And even more remarkable, no one cares. The BOJ’s weak yen fueled European stock and bond markets over the last year to faux levels.

Barclay’s profits are cut in one-half with a large slump in fixed income investments and the bank warns of continuing weakness in Q2. Construction company Balfour Beatty collapses -20% after lowering its earnings number and warns on profits. Adidas misses on earnings and drops -0.4%. BMW trades higher on strong earnings and outlook but after the data is studied more closely analysts are not as joyful and the stock retreats to the negative side. Car-part maker Continental reports strong results. UBS trades higher after earnings but says the banking sector remains challenging. CS trades lower after its earnings results are impacted by US regulatory fines. France’s Hollande rejects GE’s offer for Alstom and wants to pursue other higher bids. Alstom drops -1.3%.

UK Services PMI ...............

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

The day ends with the SPX losing 17 points, -0.9%, to 1868, a strong support level. The Dow drops 130 points, -0.8%, to 16401. The COMPQ loses 57 points, -1.4%, to 4081. The RUT drops 18 points, -1.6%, to 1108. Clearly tech and small caps lead lower. The Tuesday market winning streak logs a rare down day. Tuesday’s are up 15 of the last 18 weeks. The choppy sideways market action may continue. XLF loses -1.4% so weak financials are creating concern and driving the downside. Sectors are down across the board but XLE finishes a hair positive. VIX 13.80. AAPL drops -1.1% losing the 600 level closing at 594. TWTR collapses -18% dragging down the social media stocks. FB -4.4%. YELP pukes -13.4%. LNKD -5.7%.

After the bell, the gamers win big. EA pops +15% on strong earnings and guidance. ATVI reports blowout earnings and bounces +3.3%. Guidance is light but the stock jumps higher. Folks must be sitting at home playing video games since there are no jobs available. WFM collapses -15% after missing EPS by three cents and also misses on the top line. Whole Foods cuts the sales forecast moving forward. Folks without jobs cannot buy more expensive healthy food instead they are eating franks and beans each evening. TRIP misses by one penny on EPS and also missing on the top line. GRPN is punished -5.2% even though earnings are in line.

The Mouse House (Walt Disney) earnings beat on top and bottom lines so DIS pops +1.5% and will create lift in the Dow Industrials tomorrow. The Disney-movie Frozen and associated merchandise is wildly successful. Disney parks are doing well as the wealthy, made wealthier by the Fed policies, take their families on expensive vacations for fun and frolic, while middle class and poor families worry about putting food on the table.

ZU misses on EPS but beats on the top line. Alibaba files for an IPO in the US and may be worth as much as $20 billion (of a total $168 billion). Alibaba can be described as a mix between an EBAY and an AMZN and is far ahead of any competition. CEO Jack Ma exhibits a rock-star personality. Christies sells $256 million modern and impressionist art at a New York auction. The worlds wealthy continue to invest and hide money in high-price real estate, art, collectables, wineries and antique cars fueling these bubbles.

France’s Hollande says everything must be done to avoid a civil war in Ukraine. Someone needs to tap him on the shoulder and divert his attention away from his lady friends since Ukraine is already in a civil war.

Sunday, May 4, 2014

MONDAY 5/5/14; PMI's; PFE; ISM Non-Mfg Index

The holiday theme continues. Japan (Childrens Day), Thailand and South Korean markets are closed. Dollar/yen 102.21. Australia shares move flat. Westpac reports strong profits and trades higher. China service-sector index rises slightly. The dollar/yuan is 6.2594 the worst performing currency this year. The HSBC PMI decreases for four consecutive months at 48.1 missing estimates and signaling a deepening economic slowdown in China. The Aussie dollar weakens and the ASX 200 slips negative. Oil is in a tug-o-war with the China slowdown wanting to pull oil prices lower but the ongoing Ukraine and other geopolitical unrest wanting to send prices higher. WTIC oil is above 100 to 100.41. Brent crude oil moves up towards 109.

BOJ’s Kuroda ..................

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

The session ends with the SPX up 4 points, +0.2%, to 1885 closing near the highs. The LOD is 1866 so the bulls mount a near 20-handle turnaround. Tuesdays are very bullish days over the last few months but the positive shift is now beginning on Mondays lately. The Dow gains 18 points, +0.1%, to 16531 recovering off its intraday low at 16377, a 154-handle turnaround. The Nasdaq gains 14 points, +0.3%, to 4138. The RUT small caps finish on the negative side down -0.2% to 1126. XLF is down -0.4% so the bank weakness lingers. XLV is up +0.7% so healthcare leads. XLU +0.9%. VIX is 13.29 up slightly so volatility and the broader market are both up. One of them is wrong.

The dollar/yen 102 level and 2.58% support level for the 10-year yield are two key pivot points that held today to favor bulls. Dollar/yen 102.18. 10-year yield 2.62%. AAPL gains +1.4% finishing the day above 600 for the first time since October 2012. The divvy and buyback bull juice is powerful. The Fed supplies the easy money that is used for buybacks to pump stock prices higher. Long-trader darling RLGY collapses -9% down far more intraday. RMAX dumps -2% recovering off its lows. XHB loses -1.3% on Gundlach’s comments. PFE -2.6%. GM -0.6%. TWTR -0.7%. Cloud computing stocks are weak.

After the bell, AIG beats on EPS but misses on the top line and trades lower. Do you notice the ongoing weak top line sales number trend for companies across all sectors? EOG announces strong results. DATA trades higher after reporting better than expected earnings. APC bounces +2% on an earnings beat. VNO trades higher after their earnings release.