WEDNESDAY 6/18/14; FDX; FOMC Rate Decision, Forecasts and Fed Chair Yellen Press Conference; RHT; Yellen Rally; SPX, UTIL and XLU All-Time Record Highs

Brent crude oil is back above 113 to 113.24 as the Iraq turmoil continues. WTIC crude oil is 106.67. Dollar/yen 102.12. Japan’s trade data is disappointing showing drops in both exports and imports but the NIKK moves higher. The dollar/yen jumps to 102.25 so the weaker yen fuels a happy Nikkei party overnight with the NIKK gaining +0.9%. The remainder of Asia is not so lucky.

China’s House Price Index is a 5.6% rise but slowing from the prior month’s pace higher.  China, Aussie, Korea and India markets all trade lower. The Bank of Thailand maintains a 2% benchmark rate. The new military government has its hands full trying to restore confidence and reignite the flailing tourism industry.

Copper trades flat. The platinum strikes in Johannesburg, South Africa, continue for 21 weeks as workers increase demands. US futures are flat as global markets await the FOMC circus this afternoon.

The BOE Minutes show universal agreement of 9-0 for recent decisions and hints that a rate hike may be coming sooner than expected. The pound is at 1.6977 trading erratically between 1.69 and 1.70. Governor Carney’s credibility is under fire since one month ago he hints that the projection for a rate hike is likely too soon but now is hinting that the markets may not be pricing the rate hike in soon enough. Current market projections are that the BOE raises rates in September to 0.75%, then up to 1.00% in December and then 1.15% in March 2015. The central bankers have a five-year party going where the stock market goes straight up due to the obscene money printing. Now that the printing presses are winding down and rate hike talk is increasing, the waters are becoming choppier.

European indexes trade higher. Swedish retailer H&M reports robust sales and profits and trades +0.5% higher. The French government continues to play Siemens against General Electric wanting to see higher bids for Alstom.






[Text is Redacted: Purchase June 2014-06 to Read the Complete Chronology]

After the close, RHT, the Linux software distributor, beats on earnings and jumps +5%. MRKT, the Markit economic data IPO, prices at $24 which makes the new offering worth over $4 billion.

Television personality James Cramer says that market skepticism is not profitable despite the stock market at record highs. Cramer cites positive news events including the Fed as reasons that the skeptics, market bears, are losing money. Cramer says that the skeptics must switch sides and scramble to get back in the market at a higher price point than where they left. He says the traders that remain optimistic on the stock market are not getting shaken from their positions and are laughing at the skeptics all the way to the bank.

The rampant complacency and bullishness continues. The VIX prints at 10.61 the lowest number in 7-1/2 years. The CPCE put/call is at an astonishing 0.38 indicating off the charts euphoric bullishness. There are no bears remaining in the markets. Everyone is long. As Cramer’s comments indicate, television analysts and pundits continue to tell folks to buy, buy, buy, with reckless abandon. The low put/call ratios indicate that a significant top is in place or finishing right now and many folks are going to be very seriously hurt. Aunt Edna and Uncle Johnny just placed their entire life savings into dividend stocks in the utility sector like the man on television told them. A major black swan market event and/or flash crash is definitely on the table moving forward and over 95% of the folks in the market will laugh at this notion calling it complete ridiculousness.

Canada approves the Keystone XL pipeline project and remains disappointed that President Obama continues to prevent the approval for the project in the States that would bring much-needed higher-paying jobs to the Midwest including a broad range of support jobs such as restaurants and housing.

AAPL is spoofed on Twitter and other hip media sources after CEO Tim Cook tweets a photo of the Texas production line for Mac Pro’s clearly showing MSFT’s Windows operating system running on the computer that helps manufacture the Mac. The incident is particularly embarrassing since Cook was berating Microsoft’s software in a recent presentation. Apple proponents fight back and say a Mac computer can run any operating system.