THURSDAY 8/7/14; Global Food Fight; Euro Zone Deflation Fears; Germany 2-Year Yield Falls Below Zero; BOE Rate Decision; ECB Rate Decision and Press Conference; CTB; WPP; DUK; Consumer Credit; ED; NVDA; SCTY; ZNGA; ISIS Radicals Exile Christians in Northern Iraq Escalating Holy War

The world’s largest food fight begins with Russia’s retaliatory sanctions. Putin is banning fish, beef, fruits and vegetables from the US, Europe (especially Norway), Canada and Australia. Putin suspends US poultry imports into Russia so Americans will have to eat more chicken. There are no restrictions placed on baby food or wine. The Russians will be left to eat bread washing it down with Vodka. Putin threatens that the next round of sanctions will limit t











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wn -0.5%, to 1120. The computer algorithms are in control today uniformly moving stocks lower.

Trannies were trading higher early in the day on lower oil prices but once the geopolitical tensions increased oil prices run higher and TRAN drops -0.2%. XLE pukes -0.6% so energy leads lower. XLF is down -0.5% so financials lead lower. Airlines nosedive into a mountain with XAL down -1.9%. Utilities are a bright spot with XLU gaining +1.2% due to lower Treasury yields. Homebuilders that also benefit from lower rates move flat today avoiding the heavier losses in the broad market.

The 10-year yield is 2.415% losing the multi-month support at 2.44%. Disinflation and deflation may be here to stay no matter what the Fed and other central bankers do or say. If deflation rears its ugly head, the near six-year QE experiment implemented at the end of Fed Chair Greenspan’s tenure and at the beginning of Fed Chair Bernanke’s term, and now continued by Fed Chair Yellen, Keynesians all, will prove a failure.

After the closing bell, Zynga earnings meet on the zero EPS expectation but miss by a wide margin on the top line. ZNGA collapses -7% in the AH trading. CBS Corp beats on EPS at 78 cents versus 71 cents but revenue is light. CBS announces a buyback but this does not help the stock price that tumbles almost -3% lower. News Corp misses on EPS but beats on revenue by a hair. NWSA trades flat to higher. GPS gains +4.6% after reporting stronger than expected sales. NVDA is up +3.5% on an earnings beat. ED trades +1% higher in the session and up +0.4% after the closing bell on its earnings release.

LGF bounces +1.5% after missing on EPS but beating on top line sales. Lululemon founder Chip Wilson agrees not to wage a proxy battle so LULU stretches +8% higher on the news. TKMR bounces +7% after the FDA will allow testing on its ebola drug to proceed. Telmira Pharma is up and down like a ping pong ball as the ebola headlines dominate the news. Elon Musk’s SCTY shines +2.5% after earnings. SUNE gains +12%.

Six of the 30 Dow Industrials Average Index stocks are in correction mode down more than -10% off the top including AXP -11%, BA -17%, MCD -10%, PFE, -15% UTX -14% and V -11%. Five more of the Dirty Thirty are down more than -9% knocking on the correction door including GE, JPM, UNH, VZ and WMT. 28 of the 30 Dow stocks are down -5% or more and the Dow is down -4.8% (from 17160 to 16330 in 16 days; an 830 point drop thus far). The Dow is negative on the year and testing the 20-day MA support at 16343.

The Obamacare debacle ramps up again as evidence shows that important emails sent and received from Administrator Marilyn Tavenner were deleted. The destruction of evidence rhymes with Lois Lerner and other IRS employees destroying emails pertinent to the ongoing IRS scandal investigation. The ongoing Whitehouse scandals, which President Obama calls “phony scandals,” are very reminiscent of the Nixon years and the missing 15 minutes of audio tape. People under investigation tend not to destroy evidence unless it will send them, and perhaps higher ups, up the river. Foreign and domestic matters are a mess with the world spinning out of control.

At 5 PM EST, the New York Times says that US airstrikes have begun in northern Iraq. At 5:30 PM the Pentagon denies the US press reports concerning air strikes. Global traders prepare for a shaky night ahead. Oil climbs as the geopolitical situations deteriorate. WTIC crude oil 97.34. Brent 105.81. The 40K Christians exiled on a mountain top in northern Iraq by ISIS Sunni militants are dying. A genocide event may occur where the Christians are slaughtered by ISIS or they will die from thirst and starvation. Iraq is Hell on Earth incarnate where evil is belching from the planet’s loins. The new Holy War begins in earnest.

At 6:45 PM, the humanitarian effort to aid the Christians stranded on the mountain top in northern Iraq is underway. The US is helping with the air flights dropping water, food, medical supplies and survival gear to the 40K refugees. Geopolitical tensions escalate.