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At 7 PM EST Sunday evening in the States, US futures are
marginally higher. S&P +1. Dow +17. Nasdaq +7. Euro 1.0968. Dollar/yen
124.16. Pound 1.5288. Aussie dollar 0.7638. WTIC oil 59.95. Brent oil 65.19.
Natural gas 2.61. Gold 1193. Silver 16.74. Copper 2.73.
New cases of MERS (Middle East Respiratory Syndrome) occur
in Hong Kong after an infected South Korean man travels from Seoul (he had
spent time in Saudi Arabia). Over two dozen people are placed in quarantine
that came in contact with the man and another two dozen are under surveillance.
Concern increases across South Korea, Hong Kong and mainland China that the
deadly MERS virus will spread
[Text is Redacted: Purchase June 2015-06 to Read the Complete Chronology] Trucking company ODFL drops -2% after lowering
guidance which is not a good sign for the economy. Propane company FGP drops
-3% after announcing a secondary offering.
The INTC and ALTR deal sends merger activity to new highs. M&A
activity in May exceeds $226 billion a record high with the only larger month
in May 2007 at $243 billion. Typically, the stock market tops out when M&A
The average US auto loan is nearly $500 per
month at record levels. The average lease rate is lower at $405 per month.
Americans are preferring larger and fancier cars and taking on larger loans.
The average loan amount is nearly $29K and loan durations are 67 months; nearly
six years. By then, all you are left with is a rusted bucket of bolts.
Vice President Joe Biden’s son, Beau Biden, 46, dies of
brain cancer. Secretary of State Kerry breaks his leg in a cycling accident
cutting his trip around Europe short returning to his hometown of Boston,
Massachusetts, for treatment. Kerry met with Iran officials one day ago to
further the nuclear negotiations.
Fed Chair Yellen announces plans to not attend the Jackson
Hole Symposium in August the first central banker to miss the event in recent
[Text is Redacted: Purchase May 2015-05 to Read the Complete Chronology] takeover of data center programmable chip maker ALTR overnight tonight. The
talks are very close so companies will typically push to close a deal so the
news can be announced first thing Monday morning. The Merger Monday M&A deal
news would boost the tech sector and overall market mood.
The NIKK finishes up +0.1% to 20563 another 15-year record
high and extending an 11-day winning streak not seen for 27 years. The Nikkei
Index gains +1.5% this week. For the month, the NIKK is up +5.5% extending a
five-month winning streak and up 11 of the last 13 months. The power of the BOJ
money printing is impressive. Unfortunately, easy money only serves to make the
wealthy, that own stocks, filthy rich at the expense of the rest of society.
Japan CPI inflation data is [Text is Redacted: Purchase May 2015-05 to Read the Complete Chronology]
says ‘ISIS is not a significant threat in Saudi Arabia’. The Whitehouse
continues to ignore the rise of the radical Islamist State and violent Holy
Wars flaring up across the Middle East over the last three years saying only
that the strategy against ISIS will be ‘fine-tuned’.
Treasury yields are; 2-year 0.61%, 5-year 1.49%,
10-year 2.12%, 30-year 2.88%. German bund 0.489%. The bund moves steadily lower
over the last month (investors seeking safety) and no one is noticing. Japan
10-year yield 0.401%.
At 10 AM Tokyo local time (9 PM in the States Wednesday
evening), the NIKK is setting new record 15-year highs fueled by the weaker yen.
US futures are flat. Euro 1.0911. Dollar/yen 123.71. The dollar/yen pair is
[Text is Redacted: Purchase May 2015-05 to Read the Complete Chronology] to 1253 sitting at the
50-day MA at 1251. The pivot off the 50-day for small caps will likely take the
broad indexes in the same direction. VIX 13.31.
URI loses -9.1%. SDRL drills a dry hole losing -6%. IMAX is
a big winner up +3.2%. CMG gains +2.8%.
After the closing bell, ULTA gains +2% after
beating on the top and bottom lines. DECK runs +4% higher after earnings. GME
explodes +6% higher after positive earnings. Industrial packing company GEF
drops -11% on weak earnings and guidance a troubling sign for the economy. If demand
for packing materials decreases, then companies are shipping less products.
SPLK loses -3% after earnings; Splunk goes splat. Specialty materials maker ATI
loses -2% due to a quality control problem.
The DoD (Department of Defense) is tracking Keystone the
Scribe’s daily chronology through its secure IP addresses. It is interesting to
know that this valuable daily global information that market participants, economists,
students, traders and investors rely on is viewed as useful intelligence by the
Asia indexes end mixed with Japan and China higher. The NIKK
gains +0.2% to 20473 another record 15-year high. BOJ meeting minutes show
concern remaining over the +2% inflation goal. The SPASX200 is down -0.8%. Fortescue
Metals retraces -2% after the big +11% up day. The weakness in commodity stocks
sends the Aussie broad market lower.
KOSPI -1.7%. Former Fed Chairman paints a rosy picture from
a forum in Seoul, South Korea, proclaiming that China will not experience a
hard economic landing. Bernanke says
[Text is Redacted: Purchase May 2015-05 to Read the Complete Chronology] PANW earnings are better than expected. Palo Alto Networks comments on
the CirroSecure acquisition and PANW trades flat to marginally higher. TEVA
discloses a 1.4% stake in MYL and both trade higher on the news. Chip maker ADI
trades down -1% on news of insider selling; vice president John Hassett sells
At 8 AM Tokyo time (7 PM EST Monday evening in the States),
the NIKK futures indicate another move higher and record high up +0.3%. S&P
futures -3. Dow
[Text is Redacted: Purchase May 2015-05 to Read the Complete Chronology] German bund 0.548%. Japan 10-year yield 0.412%.
The IRS says cyber criminals have accessed tax
information of 100K Americans. The IRS claims that the main computers are not
compromised but the ongoing corruption, incompetency and scandals at the
powerful tax collection agency does not instill confidence.
At 9 AM Tokyo local time (8 PM EST Sunday evening in the
States), Hong Kong and South Korea markets are not trading due to holidays. Australian
[Text is Redacted: Purchase May 2015-05 to Read the Complete Chronology] remains in denial saying that the US is “not
losing the fight against ISIL (ISIS).” Political commentators and republican
and democrat lawmakers say the president is either misinformed or in denial.
Major Iraqi cities such as Mosul, Tikrit and Ramadi are falling to the ISIS
militants; it is easy to see that the Islamic State is expanding its caliphate
across Syria and Iraq. The president says the US did not train the Iraqi troops
that cut and ran in Ramadi. This statement is patently untrue as military
leaders quickly say we did train and equip the troops that ran away and would
not fight. The Middle East and northern Africa is a mess.
Protestors take to the streets yesterday afternoon and
through the night in Cleveland, Ohio, USA, after a white police officer is acquitted
on charges of killing two blacks in a car riddled with bullet holes. In 2012,
the car may have backfired as it passed the police station and officers thought
there were gun shots. A huge 25-minute car chase developed and when the car
stopped it was riddled by 137 bullets by a dozen police officers. The courts
say they cannot pin the killings directly on
[Text is Redacted: Purchase May 2015-05 to Read the Complete Chronology] Bogle says a +7% annual return should be expected for long-term investors. As with all forecasts, it
depends on the beginning and end dates. Following Bogle’s advice in the first
decade of the 2000’s as the dollar dropped provided no net return on
investment. The only way to know if he will be correct is to look back 20 years
from now in 2035 to see if he was correct, or not. In the shorter term, few
investors can stomach perhaps a -50% haircut in their capital should a major
market event occur over the coming months and years.
The DOJ identifies potential criminal wrongdoing by GM
concerning the ignition switch debacle and General Motors faces more fines
perhaps $1.5 billion and more. Former and current GM employees may be charged
with crimes. GM stock prints a bullish week gaining +2.3% but drives into the
[Text is Redacted: Purchase May 2015-05 to Read the Complete Chronology] Fed Chairman Bernanke announced
QE1 to prevent the stock market from crashing further than it already had. Unfortunately,
stocks were never allowed to properly washout and correct as capitalism
dictates so the economy remains in a malaise while the wealthy, that own large
stock portfolios, have become filthy rich off the Fed’s Keynesian policies. Free
markets died in early 2009.
Asia indexes catapult higher with happy bullish action. The computer
screens are a sea of green. SPASX200 +0.1%. The NIKK is up +0.3% printing a 15-year
high at 20264. KOSPI +1.1%. The SSEC is up +2.8% printing a seven-year high at
4658. The HSI gains +1.7%. For the week, the NIKK is up +2.7%. The SSEC is up
nearly +8% as the Chinese stock market orgy continues. The HSI is up +0.6% on
the week lagging the mainland joy due to the worrying epic -50% collapses in
Hanergy and Goldin this week.
The BOJ leaves their 80 trillion yen stimulus program in
place and [Text is Redacted: Purchase May 2015-05 to Read the Complete Chronology]
Snowden shed light on the unconstitutional
spying by the NSA on Americans, remain aware that all communications you
perform on computers, smartphones and other electronic devices is continuously monitored,
recorded and archived. Americans must decide if they want to live free or live
under constant government surveillance. Living free means there is always risk
of a terrorist event negatively impacting your life; simply look at Israel’s
daily struggle. By giving up your freedom for the promise of security, however,
you are left with neither freedom nor security.
Asia indexes are mixed overnight. The SPASX200 gains +0.9%. Building
products company James Hardie Industries catapults +12% higher on strong
profits. The KOSPI drops -0.8% with heavy-hitters such as Kia Motors and
Samsung Electronics trading lower.
The NIKK finishes dead flat at 20202 after printing a HOD at
20320 at levels not seen in 15 years. Panasonic bounces +2.3% printing seven
year highs. The BOJ begins its two-day policy meeting.
China PMI is
[Text is Redacted: Purchase May 2015-05 to Read the Complete Chronology] ongoing theme of earnings
beats but weak top line sales numbers continues across all sectors for the last
couple years. Companies can continue meeting EPS by simply firing workers and
forcing the existing employees to pick up the slack but consumers remain hesitant
In the evening Fed’s Williams voices concern
that the meeting minutes are far too detailed and creating too intense a focus
by traders and investors. Reap what you sow. The Federal Reserve and other
central bankers have manipulated markets for the last six years and now
complain that investors pay too close attention to their every move. That’s
The NIKK is set to begin trading above 20K with traders
fixated on Japan’s GDP data. Troubled airbag maker Takata is expected to trade
lower after announcing a 34 million vehicle recall, the largest recall in
history, finally buckling under pressure by regulators to make good on their
faulty parts and manufacturing procedures.
Japan GDP comes in at [Text is Redacted: Purchase May 2015-05 to Read the Complete Chronology]
LB report a one penny beat on EPS
but top line sales are light. The sexy Victoria’s Secret lingerie is not dancing
off the shelves as joyously. L Brands also owns Bath & Body Works. Home
products retailer WSM bounces +4% after beating on earnings but guidance is
lowered for Q2 blaming the West Coast port shutdown.
The options market is pricing in a 7% move
either up or down for Salesforce upon its earnings release. CRM reports a beat
on the top and bottom lines and jumps +5% higher. NTAP collapses -9% after
reporting disappointing earnings and lowering guidance. NetApp is firing 500
employees. SNPS loses -1% after reporting earnings. YOKU rises +1.4% after earnings.
Asia indexes are set to follow the US euphoria and trade
higher. The RBA meeting minutes leave the door open to another rate cut so the
Aussie dollar drops to 0.795 but quickly recovers to 0.7995. The spike in the
US dollar index is placing pressure on Aussie commodities with gold, iron ore
and basic materials trading lower sending the SPASX200 down -0.8%. The Straits
[Text is Redacted: Purchase May 2015-05 to Read the Complete Chronology] oil pipeline ruptures in Santa Barbara, California, USA,
spilling 21000 gallons of crude oil (342 barrels) creating an environmental
crisis. A four-mile oil slick occurs along the ocean coast and the clean-up is
underway. Railroad tanker cars hauling dangerous chemicals derail in Baton
Rouge, Louisiana, USA. The train accidents continue.
Luxury goods maker Kering files another lawsuit against BABA
alleging the sale of counterfeit goods on the Alibaba website. Kering owns
famous brand such as Gucci and Yves Saint Laurent. In Australia, South32, the
spinoff from BHP Billiton and [Text is Redacted: Purchase May 2015-05 to Read the Complete Chronology]
Sunni versus Shiite which will likely destabilize
the Middle East and northern and western Africa for decades. The Iraqi soldiers
are incapable of fighting the ISIS Islamist radicals so the situation is
expected to deteriorate in Iraq and Syria. To this day, the president refuses
to refer to ISIS as “Islamist” radicals.
The St Louis Fed site was compromised by computer
hackers one month ago. The breach allows cyber criminals to create web pages
that look exactly like the official Federal Reserve site. Users of the Fed data
are exposed to computer attacks as they enter password and other information
into the phony sites. The Fed urges users to change passwords and exercise
caution when seeking economic information from the St Louis site.
25 tornado’s pummel the Midwest threatening wheat, corn and
grain crops. Homes and businesses are damaged across Oklahoma, Texas, Kansas,
Nebraska, Wyoming and Minnesota. The storms are creating flash floods and are
expected to continue today. Several areas are hit with hail the size of
UA is under fire after
[Text is Redacted: Purchase May 2015-05 to Read the Complete Chronology] 2-year 0.54%, 5-year 1.46%,
10-year 2.15%, 30-year 2.94%. The 2-10 spread is 161 basis points and the 5-10
spread is 148 bips. The US-German 10-year yield spread is 151 bips. German
10-year bund yield 0.635%. Japan 10-year yield 0.40%.
Today is Armed Forces Day with several cities planning
parades to honor the military including the air force, army, navy, national
guard and coast guard.
The big wig fund investors report their quarterly holdings.
Paul Tudor Jones buys the troubled LL and also ANGI, ZU, ORCL, AOL and ZNGA. Jones
sold stakes in AAPL, FB, MCD, T, TFM and S. Warren Buffett’s BRKA increases stakes
[Text is Redacted: Purchase May 2015-05 to Read the Complete Chronology] American Pharoah is a mudder (runs
well on a muddy track) while other horses struggled. American Pharoah will next
race in the Belmont Stakes in New York in a few weeks to make a run at the Triple
Crown; the horse is beautiful and powerful and perhaps unstoppable. The last Triple Crown winner was Affirmed in 1978.
Asia indexes are mixed. NIKK gains +0.8%. The Topix jumps
higher as many companies such as Mitsubishi Financial, Marui Group, Dai Nippon
Printing and Dentsu adopt buyback programs to pump stock prices higher. The
central banker easy money is used for financial engineering (stock repurchase
programs and dividend increases) to make the wealthy wealthier via rising stock
prices rather than companies buying capital equipment or
[Text is Redacted: Purchase May 2015-05 to Read the Complete Chronology] terrorist attacks on peaceful nations all over the world. A Holy War is
underway due to the president’s lack of proactive foreign policy; the ISIS goal
is to impose strict Sharia law around the world and kill all Christians and
Jews. The US foreign policy is weak with friendly Arab nations such as Saudi
Arabia, UAE, Kuwait, Bahrain and others losing confidence in the president’s
leadership ability especially since President Obama is more friendly to Iran
which is bank-rolling the terrorist activity across the Middle East and northern