WEDNESDAY 8/20/14; LOW; SPLS; TGT; BOE and FOMC Minutes; HPQ; LB

The dollar/yen explodes above 103 to 103.20. The dollar (USD) moves higher to 82 printing at a one-year high and the yen drops fueling the stock market gains both sending the dollar/yen pair higher. The dollar moves higher off the stronger housing data. A higher dollar will pressure commodities but copper is trading higher recovering from yesterday’s losses. The NIKK only finishes


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er. President Obama is considering sending 300 ground troops into Iraq to expand the operation against ISIS after the beheading of the American journalist and threats of another beheading of an American captive.

The session ends with the SPX up 5 points, +0.3%, to 1987 only one point shy of the all-time closing high at 1987.98 and four points shy of the all-time intraday high at 1991.39 from 7/24/14 four weeks ago. The INDU gains 60 points, +0.4%, to 16979. The Nasdaq loses one point to 4526 not printing another 14-1/2 year record high. The RUT loses 5 points, -0.4%, to 1158 so the small caps and tech lead lower rather than higher like the broad market.

The VIX finishes under 12. The 10-year yield is 2.43%. Gold is 1292. Silver 19.46. Copper greatly helped push the broad indexes higher today gaining +2.6% to 3.17 as traders buy the other yellow metal due to perceived strength in the housing sector from yesterday’s data. The housing and auto sectors are the greatest users of copper. WTIC crude oil sits at 96 and Brent at 102 moving higher today after the inventory data in the States show a far larger draw down than expected. Oil supplies, however, remain very robust and should maintain downward pressure on oil prices.

AAPL prints an intraday high at 101.09 a new all-time record high. HAIN gains +11% after strong earnings and an M&A buzz surrounding the stock.

After the closing bell, Hewlett-Packard reports EPS exactly in line at 89 cents and the top line sales beat at $27.6 billion versus $27.0 billion expected. HPQ pops over +1% in AH trading on the knee-jerk reaction but leaks lower as the minutes tick by. L Brands (Victoria’s Secret) earnings beat by a penny on EPS and top line sales are a smidge higher than expected so there are big profits in that tiny lingerie. LB guides higher and trades higher rising +1.4% as the lovely and leggy ladies strut their wares along the catwalk. The peep show ends, however, as LB begins trading lower and turns negative following a path lower like HPQ. Tech, semi and electronic stocks CACI, SMTC and SNPS, respectively, beat on top and bottom lines for earnings.

A US truck driver shortage continues as trucking companies cannot replace the older drivers fast enough. Lots of excuses are provided for the lack of interest in truck driving as a career such as too much time away from home, odd hours, boredom, dangers involved in driving and even physical aches and pains from bouncing in an uncomfortable seat all day long even though truck drivers make from $50K to $60K per year and higher a very attractive wage. The reason for the lack of truck drivers is plain as day for those that understand societal trends.

The majority of young men in their 20’s, 30’s and 40’s that are ideal candidates as truck drivers smoke pot (marijuana). Since driving trucks requires drug and alcohol testing and even random testing and most definitely testing if an accident occurs, these potential drivers never entertain the thought of truck driving since they do not plan to give up “getting high.” Truck drivers typically hold only high school diplomas which is a demographic more prone to smoking pot. The truck driver shortage will likely continue for the foreseeable future and the aging drivers in their late 50’s, 60’s and even 70’s, that prefer to drink alcohol and typically do not smoke pot, will continue driving longer which may lead to a greater number of trucking accidents in the years ahead.