FRIDAY 7/4/14; Independence Day Holiday US Markets Closed

Asian stocks drift higher on the back of the Dow 17K milestone. EEM, the emerging markets ETF, is at levels not seen since 2011, three years ago. The NIKK gains+0.6%. Electronic retailers run higher. The SPASX200 is up +0.6% as the Aussie dollar prints 0.9358. Iron ore prices and the mining stocks appear to be stabilizing. The BSE gains +0.5%. The SSEC and KOSPI finish marginally lower.

The US embassy in Uganda (eastern Africa) receives a direct terrorism threat. The Egypt violence increases on the one-year anniversary of when Morsi was pulled from power. A bomb explodes at the Alexandria train station. Over 200 people are arrested across the troubled country. Egypt has destroyed their tourism industry and remains in chaos.

ISIS militants take over more towns in Syria and Iraq and take control of the Deir al-Zor oil field a the Syria-Iraq border. ISIS calls for Muslims all over the Middle East to join the fight and support the new Islamic State. The Middle East is a quagmire but global traders do not care since central bankers are pumping stocks higher. WTIC oil 104.04. Brent 111.04.

Germany Chancellor Merkel arrives in China to meet with PM Li and President Xi to discuss business opportunities. Germany’s Bundesbank’s Weidmann says “rates should not be kept too low too long.” Euro leaders express concern over folks that are now abandoning the path of fiscal prudence and instead running euphorically into the stock market with central banker easy money. Traders are raping the upside, especially after Fed Chair Yellen said stocks were undervalued, and will jump ship only when confidence is lost in the central banker money printing programs.

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For the July 4th holiday, gasoline prices are at the highest level since 2008 averaging 3.67 per gallon in the US. Recent fund inflow and outflow data shows the average retail investor pulling funds out of investments for the first time this year. Is the dumb money now the smart money? Hurricane Arthur loses energy and is downgraded to a CAT 1.

One person is killed and almost one dozen more injured when a bridge overpass collapses in Brazil only a couple miles from the Mineirao stadium; one of the hosting venues for the World Cup matches. The rush to build infrastructure in Brazil for the games likely results in shoddy construction for many bridges, roads and buildings. Wear a hard hat if you visit.

European indexes end the day lower with the FTSE flat. Spain’s IBEX loses -0.7% and France’s CAC is down -0.5%. Europeans stocks end positively on the week. The DAX ends at 10009 maintaining the 10K level by a hair.