MONDAY 4/20/15; China Stimulus Creates European and US Stock Rally; MS; HAL; HAS; RCL; IBM; PKG; ZION

As Asian indexes prepare for the new week of trading (7 PM EST Sunday evening in the States), China futures are down from -3.4% to -6.0%. The HSI futures are down -2.6%. S&P futures are +5. Dow +38. Nasdaq +7. Euro 1.0790. Dollar/yen 118.99. Pound 1.4951. Aussie dollar 0.7796.

WTIC oil 56.18. Brent oil 64.03. Natural gas 2.59. Gold 1204. Silver 16.26. Copper is up +1.5% to 2.8095 receiving a big boost from China’s triple R cut that should spur bank lending and increase economic activity.

US Treasury yields are; 2-year 0.51%, 5-year 1.31%, 10-year 1.87%, 30-year 2.52%. The 2-10 spread is 136 points.

New Zealand inflation data surprises with the indicators showing disinflation rather than inflation. Taco Bell opens a store in Japan and is exploring other markets going forward; YUM will respond to the new plan in Monday’s trade.

March house sales rise in China. VW auto sales in China miss expectations. Chinese auto sales remain robust at +7% per year but are flatlining and no longer growing. Chinese real estate developer Kaisa remains in bankruptcy trouble with a large payment due today. China and Pakistan meet and agree on $28 billion in military and infrastructure trade deals. China is providing eight submarines to Pakistan.

Asian indexes finish red except for South Korea. NIKK -0.1%. Panasonic gains +2% on robust sales and profits. SPASX200 -0.8%. KOSPI +0.2%. India stocks are trading down -1% at three-week lows. Copper is on fire up +1.7% to 2.8165. Euro 1.0804. USD 97.437.

Chinese stocks are down but not as bad as the futures reactions late Friday and a few hours ago. SSEC -1.6%. The HSI is down -2% the largest loss in four months. The triple R cuts temper the negativity created by the new margin requirements for over-the-counter stocks. Chinese bank and brokerages stocks are slapped from -2% to -7%.

European indexes run higher out of the gate. Mining stocks are strong. The China stimulus announced yesterday (triple R cuts) boosts stocks. Greece remains a thorn in the side of Europe. ECB President Draghi says, “Greece must try to save itself” and their fate is in the “hands of the Greek government.” Greece FM Varoufakis warns that if Greece exits the euro contagion will occur across Europe.

Eurogroup head and Dutch Minister of Finance Jeroen Dijsselbloem says Greece is only 2% of the European economy. An emerging view may be that the ECB and European officials are viewing a Grexit (Greece exiting the euro) as manageable. They may be playing with fire. The Greece drama continues with two large debt payments due in early May. Greece has not yet provided a detailed reform package. The European finance ministers meet on Friday to discuss Greece.

At 4 AM, European indexes are up about +1% across the board including Greece. S&P +13. Dow +106. Nasdaq +22. Euro 1.0781. Dollar/yen 118.71. Pound 1.4960. WTIC oil 56.18. Brent oil 63.74. Natural gas 2.59. Gold 1207. Silver 16.28. Copper loses its overnight luster up +0.2% to 2.775 but threatening to slip negative.

Treasury yields are; 2-year 0.51%, 5-year 1.30%, 10-year 1.86%, 30-year 2.52%.

Millionaire Juha Sipila 












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 Islamist radical beheadings continue across Libya and the Middle East. The Whitehouse spokesman finally acknowledges that Christians are targeted by the Islamist militants but President Obama continues to refuse to call out Muslims for the escalating Holy War across the Middle East and northern Africa. No president wants a legacy of creating a Holy War in the Middle East. The president’s decision to pull all troops from Iraq created the growth of Islamist radicalism in Syria and Iraq that is now spreading internationally.

The Whitehouse continues to downplay the Islamist radicalism insisting that ISIS is not spreading to Libya, Yemen and Afghanistan but the news reports on the ground and group assassinations say otherwise. The Obama administration appears out of touch or in denial saying that ISIS is only active in Syria and Iraq.