THURSDAY 7/3/14; ECB Rate Decision and Press Conference; Monthly Jobs Report; Dow Prints 17000 First Time in History; SPX, INDU, RUT and TRAN New All-Time Highs; Nasdaq New 14-Year Highs; VIX at 7 1/2-Year Low; Last Day of Trading Before Independence Day Holiday

Asia trades flat as global markets await the US jobs report. The NIKK is down marginally. Dollar/yen 101.90. Toshiba bounces more than +2% on news that a $5 billion Bulgaria nuclear reactor project will likely move forward. The SPASX200 gains +0.7%. India’s BSE experiences an outage for three hours blaming a network problem for the event. Trading resumes and shares move sideways. China’s official services PMI is 55.0 below expectations and off the six-month high. The HSBC services PMI is 53.1 versus last month’s 50.7 and at a 15-month high. Analysts quickly comment that China is engineering a long slow successful landing for the economy. The Hong Kong pro-democracy demonstrations continue. Protestors (mainly students) are arrested but vow to keep fighting for a society free from Beijing’s heavy hand.

Kiev (Ukraine) and Moscow (Russia) are talking in Berlin with the pro-Rusian separatists hoping to agree on a long-lasting mutual cease-fire in East Ukraine. Security is increased at airports that plan US-bound flights. The terrorism alert has been increased in recent days since there is increased communications chatter, the Independence Day holiday is tomorrow and July is a peak month for international travel where terrorists can hide easier among the crowds.

President Obama discusses the Sunni ISIS aggression in Iraq with Saudi King Abdullah (Sunni). King Abdullah pledges $500 million in aid for the Iraqi people from one pocket while at the same time likely funding the Sunni uprising out of the other pocket. Saudi Arabia, Kuwait and the Emirates sympathize with the Sunni while Iran is Shiite and the majority of the Iraq population is Shiite. Iraq PM al-Maliki, who clings to power and governs the country favoring the Shiite, hopes to form a new government by next week. The Sunni minority in Iraq and the Kurds from the north walk out of meetings unable to reach an agreement with Shiite over a new government.

WTIC oil is at 104 only pennies from falling into the 103’s. Brent crude oil collapses down to 110.67 well under the sticky 114-115 area over the last couple weeks. Libyan oil exports are increasing as rebels relinquish control of the oil ports so the increased supply sends oil prices lower.

Israel continues targeting Hamas with air strikes. The Hamas group is suspected of murdering the three Israeli youths. The UN condemns the air strikes against the Palestinians. European markets begin trading and move about one-half percent higher across the board. Euro zone retail sales are flat missing estimates. UK services PMI is better than expected. VOD pops +1.4% after the European Commission approves the acquisition of Spain’s Ono. Auto-maker VW drops -0.6% on news it plans to take out Paccar but VW denies the rumors.

[Text is Redacted: Purchase July 2014-07 to Read the Complete Chronology]

The Nasdaq gains 28 points, +0.6%, printing a new 14-year intraday and closing high at 4485.92. The RUT is up 9 points, +0.7%, printing a new all-time closing high at 1208.15 but not a new all-time intraday high. The VIX collapses to 10.32 at a 7 1/2-year low. There is zero fear in the markets. Most everyone is raping the long side taking advantage of the central banker’s easy money policies. Energy and utilities, recent high flyers, lag the broad market today. Healthcare is in melt-up mode with XLV gaining +0.4%. Biotech jumps higher with IBB +0.6%.

For the week, the SPX gains +1.3%. INDU +1.3%. COMPQ +2%. RUT +1.6%. XLE underperforms this week as oil price drops. XLE is up only +0.4% this week but is up +25% since February. Utilities finally pull back from their vertical spike higher. XLU loses -3.2% this week. UTIL -3.1%. Healthcare leads the parade higher with XLV gaining +2.1% this week. Semiconductors are a big leader with SOX catapulting +3.4% pumping tech and the overall markets higher. Copper is also a key to the market rally with the other yellow metal gaining +3.5%. Semi’s and copper are key economic bellwethers and along with the uber low volatility the equity markets have nowhere to go except higher.

President Obama takes a swipe at the large financial institutions, perhaps to regain some favor in light of non-stop bad news for the country, saying that the “banks are an unfinished piece of business.” Sounds like more rules, regulations and enforcement actions are planned against the banks.