MONDAY 7/7/14

Asian indexes are soft overnight finishing flat to lower. Japan’s Kuroda promises to maintain a steady course with stimulus until the 2% inflation target is achieved but the dollar/yen actually drifts lower (stronger yen not weaker yen) through 102 and down to 101.94 so the NIKK drops -0.4%. Casino stocks are weak. Samsung leaks -1% lower ahead of earnings tomorrow. Japan braces for Typhoon Neoguri that is about to hit the islands of Okinawa (south of Japan’s mainland). Winds are clocked at 125 MPH (200 KPH). On-line travel company EXPE buys Australian company Wotif.com for $660 million.

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AA is down -1.6% ahead of the earnings release tomorrow after the closing bell that kicks off the Q2 earnings season. Surprisingly, natural gas drops to 4.23 losing -3.6% and at multi-month lows. A boost in natty price would be expected with the hot humid summer weather ahead but the weather projections in the near-term call for cooler temperatures than normal. Crude oil drifts lower with WTIC at 103.43 and Brent at 109.90.

The bullish market sentiment continues. Investor Laszlo Birinyi continues calling for a bullish market ahead and says SPX 2100 is on tap this year. BAC strategist Mary Ann Bartels remains bullish saying “fireworks will continue through the summer.” Bartels says, “There is no sign of a market pull back until Fall.”

Over 60 of the 300 kidnapped school girls and women abducted in Nigeria over the last month have escaped their Islamic extremist captors. The remaining school girls are somewhere in northern Nigeria or neighboring countries perhaps hidden in caves. The Islamic extremists are active in the northern Muslim-populated region while bombings and other terrorist activities occur against the Christians in southern Nigeria where the oil fields and terminals are located.

Passengers flying into the US must now power-up their electronic devices before boarding the airplane. Terrorists are replacing the batteries inside smartphones, tablets and computers with difficult-to-detect explosives so powering up all devices proves the batteries are functioning properly.

The immigration crisis on the southern US border is spinning out of control. Americans are protesting for and against the massive influx of children and adults crossing the border. Demonstrations in California are becoming very heated. Citizens are complaining that the immigrants will be supported with their tax money. Criminals, gang members, sick and infected children and adults and perhaps terrorists are freely crossing into the US. The States and local governments simply do not have the money to handle the ongoing humanitarian crisis.

President Obama remains distant from the crisis unwilling to become involved but folks on both sides of the immigration issue are pleading for leadership. The president is creating an image of not caring about the immigration crisis since he is conducting a democratic fund raiser in Texas and not visiting the border area to assess the crisis even though he is a stone’s throw away. This may be the president’s Katrina moment (when President Bush’s popularity plummeted for mishandling the Hurricane Katrina disaster) fiddling while Rome is burning. The country is lacking presidential leadership and this perception is likely causing President Obama’s approval ratings to drop.