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.