WEDNESDAY 7/16/14; China GDP; BAC; BLK; PPI; Fed Chair Yellen Testifies; INDU and TRAN New All-Time Highs; NDX New 14-Year Highs; EBAY; Russia Sanctions

China engineer’s its GDP to 7.5% for Q2 a hair above the 7.4% estimate but exactly in line with what China predicted would occur for this year. June industrial output is 9.2% year over year above the 9% forecast. Retail sales are also up at a 9% annual pace. The softness in recent weeks in China reverses as new rounds of stimulus goose the economy. Global economies are given life only through central banker easy money. The SSEC loses -0.2% despite the encouraging economic data. The Hang Seng Index gains +0.3%.

Asian indexes are mixed overall on each side of the flat line. Australia receives a slight lift on the China data. Rio Tinto announces an 11% increase in iron ore production in Q2 and trades higher. Iron ore prices, however, remain down nearly -30% this year. Japan’s NIKK finishes down -0.1%. Dollar/yen 101.70. Philippine markets are closed due to Typhoon Rammasun.

The Israel-Hamas conflict is in day nine as the rocket fire continues across Gaza and Israel and the cease-fire a distant memory. Israel takes the first casualty as a man delivering food to troops is killed in a mortar attack. The Palestinian death count hits 200.

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

Oil Inventories are down more than expected so oil price bounces. WTIC crude oil is above 101 to 101.20 recovering from sub 100 yesterday. Equities maintain a positive bias into the afternoon. Dollar/yen 101.71. Copper rolls over to the downside losing -1%.

Portugal shamefully institutes a short-selling ban on Banco Espirito Santo, the troubled bank creating the ongoing banking crisis. The US enforced a short-selling ban on financials during the 2008-2009 stock market crash busting short trades that were working as they should have in a free market. The rules are changed in a crisis and short-selling bans serve as another example verifying that free markets do not exist. Of course after the short-selling ban is announced, Banco Espirito Santo catapults +18% higher busting the shorts out of the trade. The central bankers are the markets. Portugal’s PSI 20 Index leaps almost +3% higher. Say no more.

Tesla announces a new Model 3 electric car that will be available in 2017. TSLA drops -0.3%. BMW announces a recall of 1.6 million vehicles due to faulty airbags. The auto recalls continue verifying that citizens are driving around in four-wheel death traps.

At 2 PM, the Fed Beige Book says the economy is expanding at a moderate to modest pace. All districts report job growth. The districts say wage pressures are modest. Consumer spending is on the rise and manufacturing activity is picking up. One-half of the districts report higher costs being passed on to consumers. Equities are printing at or near the highs for the day.

The day ends mixed with the SPX up 8 points, +0.4%, to 1982. The Dow gains 78 points, +0.5%, printing a new all-time record intraday high at 17139.35 and new all-time closing high at 17138.20; the 15th record closing high this year. The bulls are unstoppable and the volume is more robust than recent days. The COMPQ gains 10 points, +0.2%, to 4426. The NDX prints a new 14-year intraday high at 3947.49 and new 14-year closing high at 3932.33. The RUT small caps lose 2 points, -0.2%, to 1151.55, sitting directly on the 150-day MA at 1152.36 ready to make a bounce or die decision tomorrow. TRAN gains +0.6% printing a new all-time intraday high at 8403.57 and new all-time closing high at 8397.21.

Financials took a breather. XLF -0.2%. BAC -1.9%. Chip machinery maker ASML lost -2.5%. The SOX continues printing new highs now up at 652. Retail stocks took it on the chin with XRT dropping -1%. XLP loses -0.5% so the consumer staples stocks are hit but the consumer discretionary stocks held up. XLY +0.2%.Everyone knows that the rich, made richer by the Fed, have money to spend. The 10-year yield is 2.52% so traders bought both stocks and bonds today. Gold sits at 1300 on the dot.

After the closing bell, eBay earnings EPS beats by a penny but top line revenue is a hair light at $4.37 billion versus $4.38 billion. EBAY trades +1.5% higher recovering some of the -6% loss this year. Yum! Brands reports EPS of 73 cents a one-cent miss and $3.20 billion versus $3.24 billion top line revenue also a miss. YUM is the operator of Pizza Hut, Taco Bell and Kentucky Fried Chicken. YUM is a great proxy for China’s economy since the Colonel’s chicken (KFC) is very popular there. China sales continue to recover from this year’s malaise but remain challenged showing a lackluster economy. India sales are very weak and the Pizza Hut franchise is experiencing light traffic. The middle class and poor do not have the money to buy overpriced pizza. YUM trades lower losing -2%.

SanDisk beat on earnings but lowers forecasts. SNDK is taken out to the shed and bludgeoned -9.5%. LVS rolls snake-eyes with disappointing earnings and loses -1.4%. PLXS and URI beat on earnings and both pop +3.5%. United Rentals may continue to receive a bid since hurricane season continues. SCSS beats on earnings and catapults +10%.

The bullish euphoria continues in the stock market. JP Morgan’s Mary Callahan Erdoes, referring to the lofty stock market and potential credit bubble, says, “It’s not a bubble if we grow into it, it’s a bubble if it stops right now.” The CPC drops to 0.80 at a one-month low and the CPCE drops to 0.50 showing continued market complacency. The multi-year low CPCE print under 0.40 one month ago has not yet created a market top and significant sell but this outcome would be expected. The VIX drops to 11 verifying ongoing complacency. Traders are fearless since the Fed will support the stock market forever. Forget worry, equities are ‘climbing a wall of Fed’ instead.

During financial interviews, note how journalists and reporters routinely refer to CEO’s and other money managers by first names verifying the incestuous relationship between the top one percent and the media, as well as politicians, bankers and  hedge fund managers. What happened to the days of reporters maintaining a non-bias posture and asking “Mr” or “Ms” tough direct questions? Nowadays CEO Harry or Jane responds to softball questions sharing a laugh with the journalist. After all, the journalists do not want to miss an invite to the next party.

President Obama announces further sanctions against Russia to help seek a diplomatic solution to the Ukraine civil war. The economic sanctions targeting Russian energy companies such as Rosneft and Novatek and financial firms such as Gazprombank are backed by the European leaders. Four Russian big wigs close to Putin are also targeted with sanctions.

A five-hour cease-fire is to take place in Israel and Gaza starting at 10 AM local time (3AM EST) to provide time for humanitarian aid to reach Palestinians in need. Israel provides a stiff warning, however, that attacks will immediately continue if Hamas fires any rockets at Israel during the short cease-fire. Syria’s President Bashar al-Assad is sworn-in for another term and appears stronger than ever. President Obama said Assad would be defeated a couple years ago. Assad watches as over 160K citizens are killed during this ongoing bloody civil war. WTIC Crude oil is 101.51 and rising steadily. Brent oil 107.25.

CareerCast announces the most endangered jobs including mail carriers, farmers, meter readers, newspaper reporters, travel agents, lumberjacks, drill press operator, printing worker, tax examiner and collector and flight attendants. Perhaps CareerCast forgot to list coal miners since President Obama has single-handedly destroyed the coal industry in America; our cheapest fuel for generating large-scale electric power. The least endangered jobs, in other words the jobs expected to be in the greatest demand, are mathematicians, statisticians, engineers and healthcare workers.