Dollar/yen 104.95. The BOJ ends a two-day meeting
maintaining the ongoing record easing program as expected. Since the dollar/yen
drops under 105, the stronger yen sends the NIKK -0.3% lower. The central
bankers control the stock market through money printing. Asia is mixed overall
with the SSEC the big winner gaining +0.8%. Global traders anticipate more PBOC
stim
[Text is Redacted: Purchase September 2014-09 to Read the Complete Chronology]
money bazooka; central bankers can create higher stock
markets simply by edict. The ECB’s move into quantitative easing is called QE
Light since Draghi will not purchase sovereign government debt but instead
private debt. The German bund drifts higher to 0.97%. US equities leak lower
off the top since the VIX moves above 12. The dollar/yen runs to 105.34 as the
dollar index runs higher.
Oil Inventory data shows less of a loss in inventory than
expected so global demand remains challenged at the same time the world is
awash in oil supply. A gallon of oil remains cheaper than a gallon of milk. WTIC
is down -1% to 94.55. Ditto Brent oil sitting at 102. Natty gas is also down
-1% to 3.81. BP slips on an oil spill losing -5%. A US court rules that BP is
grossly negligent concerning the 2010 Gulf oil spill disaster so the oil giant
may be subject to greater penalties. BP plans to file an appeal.
Appaloosa Management’s notable bullish investor David Tepper
who has accurately called the bullish stock market based on the central banker
easy money policies, tells CNBC business television that today marks the
“beginning of the end for the bond rally.” Strategists, analysts and traders
have called the top in the 30-year bond rally for the last five years; all have
been wrong. Tepper also says the ECB move today “can’t be bad for stocks”
worldwide. Thus, Tepper expects the US stock market to continue higher while
bonds are sold off (Treasury yields moving higher); higher stocks with higher
yields. Typically, Tepper’s words would instantly impact the stock market
(several handles of SPX upside would be expected since Tepper is bullish the
stock market) but oddly, the SPX is unaffected ignoring his comments.
Consumer discretionary leads the upside with XLY gaining
+0.5%. AMZN is up +2.2%. DHI gains +1.3% after this morning’s upgrade and the
homebuilders move higher. TSLA moves higher from this morning up +1.7% as excitement
increases over the battery factory announcement. GPRO drops -5.4% but is
already a double in its short two-months of trading.
At 2 PM, the VIX is leaping higher towards 13 pounding
equities lower. The luster is off the Draghi rose. At 2:30 PM, equities
accelerate lower. The broad indexes place the low at 3:15 PM and recover
slightly into the closing bell. Energy is smacked in the face which hurts a
significant number of long traders that continue to tout the energy story for
this year. XLE loses -1.4% and is down from above 101 to 96 over the last two months.
The day ends with the SPX down 3 points, -0.2%, to 1998,
well off the LOD at 1992.54. The SPX prints a new all-time intraday high at
2011.17. The Dow drops 9 points, -0.1%, to 17070, printing a new all-time
intraday record high at 17161.55, but remains unable to print a new all-time closing
high above 17138.20. TRAN prints new all-time intraday and closing highs at
8550 and higher but the Dow Industrials are not yet able to close at a new
all-time high to verify the upside market rally from a Dow Theory perspective.
The COMPQ drops 10 points, -0.2%, to 4562 and ends the
streak of new 14-1/2 year highs. The RUT drops 5 points, -0.4%, to 1167. Equity
markets began the day happy after Draghi fired the QE money bazooka but faded
lower from 11 AM forward after the European markets closed. The lower euro will
benefit European companies but at the expense of US multinational companies.
After the bell, fast-food restaurateur LOCO goes crazy
leaping over +6% higher on its first-ever earnings report that meets on EPS and
beats by a hair on top line revenue. Long traders are tripping over each other
to buy the tasty chicken and the hot El Pollo Loco stock. Retailer ZQK is in
quicksand dropping -13% in the AH trading. GPS falls into the gap losing -6% ruining
the recent positivity. ZUMZ drops -7% after meeting on earnings but guiding
lower. KORS drops -4% after announcing a secondary stock offering (dilution). So
Quiksilver, Gap, Zumiez and Michael Kors are all taking the pipe and will weigh
negatively on the retail sector tomorrow. Contact lens maker COO misses on
earnings.
The Financial Stability Oversight Council (FSOC) designates MET a
non-bank systemically important financial institution (SIFI). Metlife fights the
declaration since increased regulation and holding a larger capital position
will cut into profits. Metlife says they are a simple insurance company but the
government says otherwise. MET will see active trading tomorrow as the
ramifications of the new designation are identified.
Idiots begin forming a line in front of AAPL’s flagship New
York store ahead of the new iPhone 6 release on Tuesday. Publicity seekers are in
line to promote web sites or other business offerings since they will be
interviewed and others are paid to stand in line by wealthy individuals that
want to be first to show off the new iPhone.
Fed data shows that the wealthiest 10% of society was the
only social class that became wealthier over the last three years. Middle class
and poor families see their incomes drop during the same time period. As often
cited in the chronology, the wealthy are becoming wealthier due to the Fed’s
Keynesian money printing at the expense of the middle class and poor. The
funny, and sick, part of it all is that the banker and other corporate greed caused
the financial collapse in 2008 but these folks never paid a price for their nefarious
deeds and are now richer than ever.
The average American is making about 25% less than a few
years ago while the wealthy elite class is making 25% more than a few years ago
and enjoying huge stock market gains. The Fed created this mess, fully endorsed
by rich democratic and republican politicians, and President Obama since he
appointed Chair Yellen, which will lead to future social unrest in America as
the have not’s seek retribution against the have’s.
