TUESDAY 1/20/15; China GDP; IMF Lowers Global Growth Forecast; Japan 5-Year Yield Goes Negative; MS; BHI; HAL; DAL; JNJ; XLP (Consumer Staples) All-Time Record High; IBM; NFLX; President Obama's State of the Union Address

Japan begins trading with the NIKK climbing higher. The dollar/yen moves higher to 117.80 boosting the Nikkei towards a +1% gain. The KOSPI begins trading up +0.4% and climbing. Rio Tinto is down -1% after reporting robust iron ore production numbers.

US futures are back to the flat line. US Treasuries are; 2-year 0.47%, 5-year 1.27%, 10-year 1.81%, 30-year 2.43%. The 2-10 spread is 134 basis points.

Spokesperson Deng Ge of the China Securities Regulatory Commission (CSRC) is defending the suspension of new margin accounts for the country’s top three brokerages. The explosion of margin debt over the last one year is spectacular; the chart is exponential and parabolic showing a tripling quadrupling and more of margin debt. Chinese are borrowing every penny possible and leveraging that debt to buy stocks. This type of behavior never ends well. For yesterday’s Shanghai Index -8% crash, 300 Chinese companies lost $290 billion of total market cap in only a few hours time.

S&P -2. Dow -18. Nasdaq -1. Dollar/yen 117.93. Euro 1.1584. Pound 1.5076. Aussie dollar 0.8184. WTIC oil is 47.50 receiving a -3% beating. Brent oil 48.91. Natty gas 2.97. Gold 1275. Silver 17.66. Copper 2.5750.

[Text is Redacted: Purchase January 2015-01 to Read the Complete Chronology]

The most interesting tidbit of the entire State of the Union was President Obama finally embracing the economy and stock market. Up to now the president would not take credit for the higher stock market (created by the Federal Reserve money printing) but now brags that he oversees “a stock market that has doubled.” The president says his “policies work.” Destiny is a funny thing. How ironic it would be for the stock market to top out right now and early this year and head lower into 2018 after he stands on a pedestal exalting his success in front of America and the world?

The speech is one hour in duration. Global markets are unresponsive. The president highlights tax reform, infrastructure projects, Obamacare and the free community college education plan so stocks in these sectors may move tomorrow. The president’s speech was ‘big picture’ without providing details or specifics so the reaction in stocks may be muted.