TUESDAY 7/1/14; Q3 and H1 Begin; Ukraine Cease-Fire Ends; PMI's; ISM Mfg Index; SPX, INDU, TRAN and RUT New All-Time Highs; Nasdaq New 14-Year High

The RBA decides to leave interest rates on hold at the 2.5% level as expected. The Aussie dollar continues higher to 0.9455. The NIKK gains +1% printing above 15.3K despite the disappointing business sentiment reported in Japan’s Tankan survey. The dollar/yen moves higher to 101.50 so the weaker yen pumps the Japan stock market and US futures higher. Gold and copper miners move strongly higher. Gold is at 1327 and silver 21.09. Copper trades lower but has rallied strongly in recent days to 3.20 and is at a three-month high. Japan’s government cabinet approves the use of collective self-defense reversing the 60-year passive path of the country after the atom bombs dropped to end WW II. The rising sun rises again.

China’s official purchasing managers index (PMI) for June is 51 beating the 50.8 expectations at a six-month high. The HSBC PMI, a better reflection of the economy since it is represents smaller manufacturing companies and is broader-based, is 50.7 a hair below the 50.8 estimates. The SSEC recovers to the flat line after the data. On the negative side, Chinese house prices continue to fall. The PBOC is pushing for more lending with targeted stimulus programs but the arrows appear to be missing the target.

Asia markets are mixed as tensions ramp up in Ukraine. President Poroshenko ends the cease-fire with the pro-Russian separatists in East Ukraine and now says, “Attack!” The Russian Ruble weakens and the Micex Index drops -0.3%. WTIC crude oil moves higher to 105.70 and Brent oil is 112.39. Russian computer hackers are attacking US energy interests with malware for the last few weeks in retaliation for the ongoing Ukraine-related sanctions.

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

Interestingly, many viruses are hitting the human population all at once which has not happened in the past. The world is simultaneously dealing with outbreaks of the H1N1 flu strain, ebola, the MERS epidemic in the Middle East, anthrax and the PEDv pig virus problems. What happens if the viruses cross-mutate? Adding further concern, immigrants crossing the southern US border in the midst of the ongoing humanitarian crisis are testing positive for wide-spread tuberculosis and other diseases and even limited cases of H1N1 and leprosy.

Tragically, the GM worker injured in the chemical explosion dies. The UK bans the use of Google Glass in cinemas (theatres). The goofy glasses continue to struggle for acceptance and GOOGL keeps trying to reverse the pervert vibe associated with the glasses. S&P rating agency warns that it may downgrade Argentina debt and places the troubled nation on credit watch negative. S&P is indicating that a credit default event is likely.