Thursday, July 27, 2017

FRIDAY 7/28/17; Japan Economic Data; US Healthcare Bill Fails in Senate; European GDP's (Gross Domestic Product); CVX; XOM; ABBV; BCS; BT; COG; GT; MRK; COL; RUTH; WFT; WY; US Q2 GDP; Consumer Sentiment

S&P -2. Dow -12. Nasdaq -12. Euro 1.1682. Dollar/yen 111.18. Pound 1.3071. Aussie dollar 0.7971. Dollar/yuan 6.743. USD 93.94.

WTIC oil 49.14. Brent  oil 51.49. Natty 2.96. Gold 1259. Silver 16.57. Copper 2.87.

Treasury yields are; 2-year 1.36%, 5-year 1.85%, 10-year 2.31%, 30-year 2.92%.

Aussie and Asia stocks begin trading lower. NIKK -0.2%. Topix -0.2%. SPASX200 -0.3%. KOSPI -0.5%. S&P -3. Dow -24. Nasdaq -19.

Japan inflation is holding steady at +0.4% year-on-year matching the estimate. Core CPI is up +0.4% year-on-year matching expectations. Japan Jobless rate falls to 2.8% the lowest since 1994. Household Spending is up +2.3% month-on-month a big upside surprise a positive number for the first time in 17 months. Japan Retail Sales are up +0.2% month-on-month less than the +0.4% expected. Year-on-year is up +2.1% missing the +2.4% expected.

Inflation remains subdued and there is no wage growth. Overall inflation cannot exist without wage inflation. Interestingly, economic textbooks will tell you that wages should rise when the jobless rate is at record lows since it is harder to find workers and companies must pay higher wages.

However, in this near nine years of global central banker collusion, Keynesian money printing and market intervention, throw the textbook out the window. This same phenomenon is occurring in the United States and other Western nations. Unemployment rates and Jobless Claims are at record lows indicating a full employment situation but wages remain stagnant and are not rising; hence overall inflation remains on a milk carton (missing). Federal Reserve Chair Yellen tosses and turns each night unable to sleep worrying about why economic theory is no longer working as expected.

Japan’s defense minister resigns amid scandal. Prime Minister Abe’s approval ratings are dropping like a stone so he plans to reshuffle his cabinet to try and right the ship.

Euro 1.1688. Dollar/yen 111.10. Pound 1.3073. USD 93.83. The US dollar index is trying to firm-up and recover which creates soggy trading in the Pacific theater.

Nissan drives off into the weeds losing -4.2% after reporting lower profits. Samsung Electronics -3.6%. SK Hynix -5.7%. Toshiba plummets more than -8% as the Westinghouse nuclear debacle continues playing out. Hong Kong’s AIA Group drops -1.7%.

US futures dip lower as the Senate plans to work late into the night and early morning today to pass a repeal and replace bill for the Affordable Care Act (ACA; Obamacare). S&P -7. Dow -49. Russell -29. Perhaps the futures hint that the vote may not go the republican’s way.

Asia stocks sink lower. NIKK -0.6%. Topix -0.4%. SPASX200 -1.2%. KOSPI -1.2%. South Korea industrial output drops -0.2% missing the +1.0% gain expected.

S&P -9. Dow -56. Nasdaq -30. WTIC oil 48.99. Brent oil 51.45.

At 1:30 AM EST (6:30 AM London; 7:30 AM Central Europe; 2 PM Tokyo), the US Senate is working late to pass an Obamacare repeal bill but the procedure fails. Ironically, republican Senator John McCain, who is suffering from brain cancer and returned for the critical votes this week, dissented resulting in a 49-51 tally and the bill fails. A loud gasp occurs from the lawmakers and others in the chamber when McCain said no.

Republican Senators Susan Collins and Lisa Murkowski also did not vote for the repeal. Leader McConnell fails to deliver the senate and President Trump’s hope for a healthcare bill fails. Trump deserves blame since he sits on his throne each day and does nothing to push the ideas behind the new healthcare insurance plans or to show an interest that he wants to learn the details in the proposals.

The president has burned through a lot of political capital during the last six months trying to pass a new health insurance plan to replace Obamacare but it ends in failure. The republicans said for eight years they had a plan to replace Obamacare but they did not; it was a lie. Obamacare defeats Trumpcare. The president’s tax reform and infrastructure spending plans may face similar difficulties ahead.

Like a child, President Trump runs to Twitter and tweets, “3 Republicans and 48 Democrats let the American people down. As I said from the beginning, let Obamacare implode, then deal. Watch!” President Trump is a liar like the rest of the Washington politicians. During the campaign, Trump bragged that he would “repeal and replace Obamacare on day one” even boasting at one point he would do it ‘within the first hour of his presidency’.

For the last two years, Trump said it would be simple to repeal and replace the Affordable Care Act bragging that “it would be so easy.” Now he says he always said to let Obamacare fail; that is a lie. Trump’s ego takes a bruising since he is supposed to be ‘the art of the deal’ guy. Instead, the entire Trumpcare saga in the House and Senate has been a convoluted mess for the last six months. Disappointment in the Trump presidency increases.

S&P -7. Dow -20. Nasdaq -44. WTIC oil 48.89. Brent oil 51.34.

India stocks are trading lower. The Nifty is down 39 points, -0.4%, to 9982 under the 10K level. The BSE Sensex ends down 166 points, -0.5%, to 32218.

The NIKK ends the session down -0.6% to 19960 losing the 20K level. The SPASX200 drops a nasty -1.4% to 5703. The KOSPI ends down -1.7% to 2401 hanging on to the 2.4K level by a fingernail. The SSEC ekes out a +0.1% gain to 3254. Of course it does when rich uncle PBOC has his commie thumb on the scale each day. The HSI drops -0.6% to 26979.

For the week, Japan’s Nikkei Index finishes down -0.7%. Australia’s ASX 200 ends the week down -0.3%. South Korea’s KOSPI loses -2% with traders taking profits after the obscene parabolic rise over the last few months. From April to present, the KOSPI has catapulted +16% rising more than +5% per month for the last three months. South Korea and India are two favorite flavors of global traders this year.

China’s Shangha Index gains +0.5% this week. Hong Kong’s Hang Seng Index gains +1% this week. Chinese stocks print gains on the week while Japan, Australia and South Korea sink lower. European index futures are down from -0.3% to -0.7% across the board.

At 3:00 AM EST (8 AM London; 9 AM Frankfurt), European indexes begin trading lower as the futures indicate. DAX -0.666%. CAC -1%. FTSE -0.4%. SMI -0.5%. OMX -0.5%. Banks are a major focus of attention with UBS, BCS and BNP Paribas releasing earnings. European Banking Index -0.666%. UBS -3.8%. Barclay’s is jumping in and out of negative territory. BCS +0.6%. BNP Paribas -0.3%. CS +1.9%. BBVA -0.7%. SocGen -1.2%.

Adidas is a big winner after boosting profit guidance the stock runs +7.3% higher. Renault -5%. Luxotica -2.666%. Dialog Semi sinks -2% on CS and DB downgrades.

S&P -7. Dow -24. Nasdaq -44. Russell -5. VIX 10.62. India’s Nifty is down 36 points to 9985.

Euro 1.1706. Euro/yen 129.89. Dollar/yen 110.96. Pound 1.3082. Euro/pound 0.8948. Mexican peso 17.7052. Canadian dollar 1.2546. Dollar/yuan 6.7449. Indian rupee 64.1225. Aussie dollar 0.7989.

The euro/Swissy pair is on the move. EUR-CHF 1.1367. The massive Swiss franc strength over the last few years is finally reversing. The franc experiences the first weakening since January of 2015.

Spain Q2 GDP is +0.9% quarter-on-quarter as expected a tick better than the +0.8% in Q1. France GDP is +0.5% in Q2 matching estimates; export activity is strong. Austria and Sweden also report strong growth at a +2% and higher annual rate. Euro-area July economic confidence is 111.2 versus t he 110.8 expected. The European data is solid.

WTIC oil 49.02. Brent oil 51.50. Natty 2.97. Gold 1260. Silver 16.56. Copper 2.865.

Treasury yields are; 2-year 1.36%, 5-year 1.84%, 10-year 2.30%, 30-year 2.91%. UK gilt 1.19%.

European trading turns ugly. DAX -0.7%. CAC -1.3%. FTSE -0.6%. MIB -1%. IBEX -0.9%. PSI -0.9%. Euro 1.171. Dollar/yen 111.23. Pound 1.3096. USD 93.76.

Bloomberg business television commentator Tom Keene continues ridiculing anyone that is not long the stock market saying, “I’m in the double-leveraged all cash fund.” The euphoric bullish sentiment is touted across the television business channels day after day influencing inexperienced and novice investors to place their entire life savings in the stock market. This behavior typically does not end well.

Stock market bears are as rare as hen’s teeth; they simply no longer exist. Everyone is bullish as shown by the Investors Intelligence survey with over 60% of market participants enthusiastically optimistic about the stock market (an excessively high number). The last time the sentiment was this bullish was at the end of February resulting in a 70-point drop in the SPX (the boat was fully loaded to the bull side).

Russia orders the United States to reduce diplomatic staff in Russia no doubt a move in retaliation for additional sanctions that are planned against the Kremlin. Putin hinted that he would wait to see if the sanctions are approved and implemented but instead forges ahead with an aggressive posture against Trump.

At 5:24 AM, S&P -9. Dow -40. Nasdaq -57. Russell -5. VIX 10.81.

DAX -0.9%. CAC -1.4%. FTSE -0.7%. MIB -1%. IBEX -0.8%. PSI -1.1%. European Banking Index -1.1%.

Euro 1.1707. Dollar/yen 111.22. Pound 1.3093. Aussie dollar 0.7957. USD 93.72.

WTIC oil 49.01. Brent oil 51.70. Natural gas 2.96. Gold 1260. Silver 16.57. Copper 2.87.

Treasury yields are; 2-year 1.36%, 5-year 1.86%, 10-year 2.32%, 30-year 2.92%. The 2-10 spread is at 96 bips. German bund 0.57%. Japan 10-year yield 0.07%. UK gilt 1.22%. France 10-year yield 0.84%.

AMZN is down -2.5% in early US trading after last evening’s earnings release. FB -0.7%. AAPL -0.8%. NFLX -0.5%. GOOGL -0.6%. The FAANG stocks are defanged this morning.

The morning continues….

The large integrated oils report earnings. CVX XOM ABBV……earnings….BCS BT COG GT IMGN MRK COL RUTH WFT WY

At 8:30 AM, Q2 GDP is x.x% quarter-on-quarter versus the +2.6% expected and prior +1.4%. The GDP price index is x.x% quarter-on-quarter versus the +1.2% expected and prior +1.9%. Real Consumer Spending is at x.x% quarter-on-quarter compared to the +2.8% expected and prior +1.1%.

At 9:30 AM EST, US stocks begin trading

At 10 AM, University of Michigan Consumer Sentiment is 9x.x versus the 93.1 expected  and prior 93.1. Consumer Sentiment has been trending lower for the last three months…

European indexes end the session

The DAX

For the week, Germany’s DAX

At 1 PM, the BHGE (formerly ticker BHI) Oil Rig Count is

Fed’s Kashkari says

US stocks finish the session

The SPX

For the week, the S&P 500

After the closing bell, 

Wednesday, July 26, 2017

THURSDAY 7/27/17; MO; MA; PG; UPS; ALXN; AEP; AMT; ADP; BSX; BWA; BMY; GTLS; CLF; COP; COR; DB; DEO; DOW; DPS; DNKN; EVR; HUN; JCI; KERX; KKR; LAZ; MPC; MAS; MCK; MGM; PCG; PF; POT; PX; RS; RTN; SIRI; LUV; SAVE; TPX; TDC; VALE; VLO; VZ; XEL; ZBH; Durable Goods; International Trade; Amazon CEO Jeff Bezos Becomes the Richest Man in the World; WTIC Oil Above 49; SPX, INDU, COMPQ and NDX Print All-Time Highs; AMZN; INTC; BIDU; SAM; BYD; CERN; CY; DECK; DLR; EMN; EIX; EGO; AUY; EA; EXPE; FE; FSLR; GHL; HIG; MAT; MHK; NOV; SBUX; SYK; WDC

Australia and South Korea begin trading higher while Japan is flat. NIKK -0.1%. Topix +0.1%. ASX 200 +0.3%. KOSPI +0.6%. The Aussie dollar tags 80 cents at 0.8008, a palindrome. Dollar/yuan 6.7540. Euro 1.1736. Dollar/yen 111.03. Pound 1.3122.

US futures are higher continuing the joy from the Wednesday session. S&P +3. Dow +6. Nasdaq +22. US stocks continue making new all-time highs as traders euphorically celebrate. The Investors Intelligence survey reports 60.2% bullish sentiment versus 16.5% for bears. Th 60.2% is extremely bullish and euphoric and typically signals that a pull back in stocks is likely. High bullish sentiment in February led to a drop in the SPX from 2400 to 2330 about -3%.

The low CPC and CPCE put/calls verify ongoing market complacency and a near-term top in stocks is likely at anytime (the low signals have been in place for the last week). The VIX printed an 8-handle yesterday verifying the ongoing fearlessness in the stock market. The party is in full swing with the bulls loaded to one side of the boat singing and dancing without a care in the world.

The US dollar index was clobbered after the FOMC announcement yesterday afternoon. The USD drops from 94.2 to 93.4 after the Fed announcement. A lower dollar sends gold, silver, oil, copper and other commodities higher elevating the broad stock indexes. USD is hovering around 93.2-93.4 currently. There are a record number of short positions against the US dollar not seen since 2013. The Federal Reserve does not appear in a rush to hike rates so the dovishness sends US stocks higher. The central bankers are the market.

The US dollar index is down -9% off the January top and now testing the lower trend line of a long-term 2-1/2 year sideways channel through 93-101. The 200-week MA is at 92.30 for USD so the 92.30-93.50 area is strong support for the dixie.

WTIC oil 48.66. Brent oil 50.86. Natural gas 2.92. Gold 1263. Silver 16.64. Copper 2.8715.

Treasury yields are; 2-year 1.35%, 5-year 1.82%, 10-year 2.28%, 30-year 2.89%. The 2-10 spread is 93 bips.

China industrial profits are strong which a boost for the communist economy. Aussie dollar 0.8050. Samsung Electronics reports strong profits but trades marginally lower. Nintendo beats on earnings and jumps +7.6%. WTIC oil 48.69. Brent oil 50.90.

Trading in the Pacific theater is in the green continuing the joy from the States but Europe is set for a mixed open. The NIKK ends the session up +0.2% to 20080. The ASX200 gains +0.2% to 5785. The KOSPI finishes up +0.4% to 2443. The Shanghai Index ekes out a +0.1% gain to 3249. The Hang Seng Index leads Asia higher up +0.7% to 27131.

The Nifty is trading up +0.5% to 10074 well above the 10K level. Global traders are tripping over each other buying India stocks with both hands.

At 3:30 AM EST (8:30 AM London; 9:30 AM Frankfurt), one-half hour into European trading, markets are mixed. DAX -0.4%. CAC +0.4%. FTSE -0.1%.

Today is the busiest earnings season day in the US and UK. Diageo is drinking booze early celebrating a +6.3% stock gain on earnings. AB Inbev +5%. AstraZeneca crashes -16% on failed lung cancer trials. Billions of market cap disappear in a heartbeat. Roche +1.2%. CEO Cryan at Deutsche Bank is cryin’ after earnings. DB -4.7%. Food giant Nestle drops -1.5%. Airbus sinks -3.7%. Royal Dutch Shell +0.3%. Statoil +0.8%. Volkswagen -1.1%.

Scandinavia’s biggest economy, Sweden, is in political turmoil. The government has not properly handled a serious computer data breach. Information may land in the hands of unfriendly nations. Prime Minister Stefan Lofven may resign or call for early elections. The scheduled eletion is one year away. Sweden is reshuffling its government as the drama plays out. EUR-SEK 9.5871.

UK regulators announce the phase-out of the Libor (London Interbank Offered Rate) benchmark. Libor’s reputation took a hit due to the Forex  rate-rigging scandals. The financial system is corrupt. Any new benchmark will also be manipulated by nefarious traders.

Euro 1.1718. Euro/yen 130.28. Dollar/yen 111.18. Pound 1.3135. Euro/pound 0.8921. Mexican peso 17.5932. Canadian dollar 1.2448. Dollar/yuan 6.7355. Indian rupee 64.13. Aussie dollar 0.8027.
S&P +6. Dow +38. Nasdaq +33. Russell +5. VIX 9.32.

Oil is marginally lower. WTIC 48.65. Brent 50.84. Natural gas 2.91. Gold 1262. Silver 16.69. Copper 2.88.

Treasury yields are; 2-year 1.35%, 5-year 1.83%, 10-year 2.28%, 30-year 2.88%. The 2-10 spread is 93 bips.

At 5 AM, DAX -0.5%. DB is down -3.7% dragging the DAX lower. CAC +0.1%. FTSE -0.1%. The Nifty is up 56 points, +0.6%, to 10077.

S&P +4. Dow +29. Nasdaq +30. Russell +3. VIX 9.36. Euro 1.1722. Dollar/yen 111.25. Pound 1.3139. Aussie dollar 0.8018. The Aussie dollar sports the 0.8-handle. Gold 1263. Silver 16.72. Copper 2.884.

At 8 AM EST (2 PM Frankfurt), the DAX sinks -0.6%. CAC -0.1%. FTSE -0.1%. MIB +0.2%. IBEX -1.1%. PSI -0.4%. European indexes turn negative across the board except for Italy. Euro 1.1696. Dollar/yen 111.41. Pound 1.3144. Mexican peso 17.615. Canadian loonie 1.248. Aussie dollar 0.8001.

WTIC oil is down -0.8% at 48.37. Brent oi is down -0.7% to 50.62. Natty 2.93. Gold 1262. Silver 16.74. Copper 2.89. Copper is very supportive of the stock market.

The huge day of earnings is off and stumbling resulting in the following stock moves. MO -0.3%. MA +1.6%. Consumer staple king PG bounces +2.5%. Global shipping bellwether UPS gains +1.5% after providing higher guidance; this is a good sign for the economy. VZ +3.2%. Verizon reports strong subscriber growth surprising analysts.

TWTR crashes -10% on earnings. The monthly active user (MAU) numbers are disappointing similar to Facebook last evening. Perhaps people are realizing they are wasting their lives trying to impress strangers on social internet platforms. Twitter’s strong suit is as a news source during major global events such as terrorist acts, war and natural disasters. President Trump’s daily tweeting provides support for the Twitter platform.

ALXN +6.66%. ALLY +3.6%. AEP AMT +0.5%. ADP -1.9%. SAN +0.2%. BSX +0.3%. BWA BMY -5%. COR DPS DNKN +0.9%. EVR JCI -4%. KERX +0.9%. LAZ +2.8%. MGM -3.3%. PCG PF
GTLS CLF +1%. VALE 0.6%. COP +0.7%. MPC -3.5%. VLO XEL DOW +1.6%. HUN KKR +3.6%. MCK -1.3%. POT +1.7%. PX RS RTN +0.3%.

Masco is an important key to the housing sector and matches on EPS but misses on the top line. MAS Mohawk, MHK, is another key housing sector barometer reporting earnings after the closing bell.

SIRI +3.9%. LUV does not feel love dropping -1.7% on earnings. SAVE nosedives -5.8%. TPX TDC WWE ZBH

The bullish prognostications continue. Analyst James Cakmak proclaims that Amazon will be the first trillion-dollar company and says AMZN stock will double to 2000. Amazon does consume and dominate any business sector it decides to enter. AMZN +1.7%.

Billionaire Howard Marks at Oaktree Capital expresses caution on the FAANG (FB, AAPL, AMZN, NFLX, GOOGL) stocks warning of overvaluation. Marks says the low volatility indicates complacency in markets. The VIX is trading at 9.30 this morning.

Five economic data releases occur at 8:30 AM EST starting with Durable Goods. New Orders are up +6.5% month-on-month beating the +3.5% expected and prior -1.1%. This data set is typically jumpy. Year-on-year is up +16.1% versus the prior +3.8%. Ex transportation is up +0.2% month-on-month weaker than the +0.4% expected but above the prior revised-higher +0.6%. Year-on-year is up +6.8% above the prior +6.1%. Core capital goods are down -0.1% less than the +0.3% expected and prior revised-higher +0.7%. Year-on-year is up +5.6% less than the prior +6.0%.

International Trade data reports the trade balance at a $63.9 billion deficit. Exports are up +1.4% more than the prior +0.1% that was revised lower. Imports are down -0.4% worse than the prior revised-higher -0.3%.

Jobless Claims are up 10K to 244K above the 240K expected and prior 234K. The layoffs are a small surprise. Chicago Fed National Activity Index is 0.13 versus the 0.10 expected and prior -0.30. Wholesale Inventories (Advance) are +0.6% versus the prior +0.3%.

Markets take the data in stride. USD 93.72. Euro 1.1697. Dollar/yen 111.43. Pound 1.3145. Aussie dollar slips under 0.8 to 0.7997.

S&P +5. Dow +21. Nasdaq +42. Russell +1. VIX 9.35. DAX -0.6%. CAC flat. FTSE -0.2%.

WTIC oil 48.48. Brent oil 50.74. Natty is down -0.4% at 2.91 with inventory data on tap in a couple hours. Gold 1264. Silver 16.78. Copper 2.888.

Treasury yields are; 2-year 1.35%, 5-year 1.84%, 10-year 2.30%, 30-year 2.92%. The 2-10 spread is 95 bips the yield curve steepens so the banks will be happy.

MRK +4%. TWTR -11%. FB +6.66%. PG is up +2.2% and will boost the consumer staples sector. VZ gains +3.5% providing lift to the telecom sector.

S&P +7. Dow +48. Nasdaq +44. Russell +3. VIX 9.26.

At 9:30 AM EST, US stocks begin trading higher with new all-time highs for the SPX, INDU, COMPQ and NDX. The S&P 500 gains 6 points to 2484. The Dow is up 50 points to 21759. The Nasdaq Composite gains 36 points to 6459. The NDX prints above 5995. The RUT is up 1 point at 1443 so small caps underperform.

FB is up +5%. DB -3.6%. TWTR crashes -12%. DISCA -2.1%. SNI +2.5%. SNAP -1.7%. AMZN is up +1.4% and CEO Jeff Bezos overtakes Bill Gates as the wealthiest billionaire.

The Dow Transports collapse. TRAN -1.9%. UPS loses the pre-market joy and collapses -2.4%. The global bellwether sinks representing a potentially sick economy. FDX is down -0.8% in sympathy. Traders do not care that the economy may be sick. In fact that is good news since the central bankers will keep goosing the stock market higher with easy money. The financial world has become sick and twisted after nine years of global central banker collusion and intervention.

Euro 1.1698. Euro/yen 130.41. Dollar/yen 111.49. Pound 1.3136. Euro/pound 0.8906. Indian rupee 64.11. Mexican peso 17.6205. Canadian dollar 1.2489. Dollar/yuan 6.74. USD 93.74.

DAX -0.666%. CAC -0.1%. FTSE -0.2%. Oil trades marginally higher. WTIC oil 48.84. Brent oil is above 51 at 51.06. Natural gas 2.93. Gold 1263. Silver 16.79. Copper 2.89.

Treasury yields are; 2-year 1.36%, 5-year 1.86%, 10-year 2.31%, 30-year 2.93%.

20 minutes into trading stocks are marginally higher. SPX 2481. INDU 21770. COMPQ 6450. RUT 1442. VIX 9.34. UPS -3.3%. AZN -16%.

EIA Natural Gas Inventories are a 17 BCF build less than expected. Natty prices should float higher. The summer is a bit cooler than expected in many of the northern states and this keeps natty price under 3. It is better to leave the windows open while sleeping instead of listening to the noisy air conditioner. Natural gas is up +1.3% to 2.963.

At 11 AM, the Kansas City Mfg Index is 10 a tick below last month’s 11. Manufacturing activity in the Midwest is steady.

The tech sector prints another record high. XLK +0.7%. SOX flat. FB +5.5%. MU +4%. AVGO +0.3%. NVDA -0.6%. AAPL flat. NFLX -0.8%. GOOGL +0.2%.  UPS -3.1%.

AMZN +1.8%. Amazon CEO Jeff Bezos becomes the richest billionaire in the world with the rise in stock price. Bexos overtakes Microsoft founder Bill Gates.

SPX 2482. INDU 21777. COMPQ 6455. NDX 5987. RUT 1446. VIX 9.20. NYA +0.1%. TRAN -2%.

European indexes end the session lower except for Italy and Spain. The DAX  loses -0.8% to 12212. The CAC slips -0.1% to 5187, The FTSE loses -0.1% to 7443. The MIB gains +0.3% to 21635. The IBEX finishes up +0.3% to 10603. The PSI ends down -0.4% to 5251.

Euro 1.1666. UniCredit says the euro will reach 1.20 this year and 1.25 next year. DB -6.6%. Anglo American gains +3% after reinstating the dividend. Mining stocks are feeling some love after many months of beatings. Glencore +0.6%. Nestle -1.8%. Danone +0.3%. Diageo +5.7%. AB Inbev +6.3%.

Iran launches a missile that reaches space. The radical Muslim state says the missile carries a satellite into space but US intelligence says no such satellite was deployed. Iran stirs the Middle East pot.

ADP rises +9.1% on news that  activist investor Bill Ackman takes a larger stake. Ford announces a 117K vehicle recall for faulty seat belts. F +1.1%. TWTR -12%. ASML -0.8%. Gold is at a six-week high up +0.666% to 1258.

SPX 2479. INDU 21761. COMPQ 6422. RUT 1438 VIX 9.67. Euro 1.1666. Dollar/yen 111.40. Pound 1.3073. WTIC oil 49.05. The HOD is 49.24. Brent oil 51.43.

Treasury yields are; 2-year 1.36%, 5-year 1.85%, 10-year 2.32%, 30-year 2.93.

Between 12:50 PM EST and 1 PM, stocks dip lower. The S&P 500 is down 5 points at 2473. The Dow is up 33 points at 21742. The COMPQ is down 39 points at 6385. The RUT is down 5 points at 1436. The VIX prints above 10 at 10.09. The 10-day streak of the VIX closing under 10, an epic trend, may end today.

At 1 PM, the 7-Year Note Auction goes off at 2.126% with lackluster demand. The other auctions this week were stronger.

Treasury yields are; 2-year 1.36%, 5-year 1.85%, 10-year 2.31%, 30-year 2.92.

At 2:30 PM, SPX 2467. INDU 21721. COMPQ 6360. Euro 1.1685. Dollar/yen 111.02. Pound 1.3073. Gold 1261. Silver 16.59. Copper is a hair negative at 2.869.

WTIC oil is up +0.6% to 49.04. Brent oil is up +1.1% to 51.51. Natty gas is up +1.5% at 2.987 climbing back towards 3. USD 93.83.

Lawmakers say the tax reform package under development will not have a border tax. Retail stocks rally since they will not have to pay extra fees for goods crossing borders. XRT +1%. WMT +1.1%. TGT +2%. DLTR +1.9%. PG +1.6%. XLP +1%. XLY +0.7%. United Parcel Service is delivered a slap to the face. UPS -4.5%.

VZ +7.7%. BA +3.2%. MRK +3.1%. DIS +2.9%. PG +1.5%. ADP +9.1%. TSCO +7.7%. ORLY +7.4%. SIRI +8.2%. CHTR +5.2%. T +3.6%. IP +2%.

AAPL -1.9%. AXP -1.7%. V -1.3%. MSFT -1.2%. UNH -1%. CA -10%. JCI -7.3%. FFIV -7.2%. WHR -6.3%. VRTX -4.4%. CSX -4%. NFLX -3.4%. NVDA -3.3%. TER -6.66%.

Stocks recover off the lows into the closing bell. The SPX finishes down 2 points to 2475 printing a key reversal day where price printed above yesterday’s high but then closed below yesterday’s low. This typically hints that the upside rally is running out of gas. The S&P 500 prints a new all-time record high at 2484.04.

The Dow Industrials gain 86 points, +0.4%, to 21796.55 a new all-time closing high and 21798.47 a new all-time high. The COMPQ drops 41 points, -0.6%, to 6382. The HOD is 6460.84 a new all-time record high. The Nazzy Comp prints a key reversal day. The NDX loses -0.6% printing a key reversal day after a new all-time high at 5995.77.

The Russell 2000 drops 9 points, -0.6%, to 1433. The LOD is 1427 with price bouncing off its 20-day MA. Small caps are weak the last two days. NYA trades flat today. TRAN mini-crashes -3.1%. The Dow Industrials are printing new highs while the trannies are collapsing. Dow Theorists are pulling their hair out (the Dow Transports are no longer confirming the higher highs with the Dow Industrials).

TRAN has crashed -6% over the last nine days. UPS is bludgeoned -4% today. FDX is thwacked -2.9%. UNP -3%. DAL -2.1%. YRCW -1.6%. Shippers, trains, planes and truckers trade lower.

After the closing bell, retail behemoth Amazon reports earnings and provides lackluster guidance. AMZN sinks -3%. Humorously, CEO Bezos slips back to number two on the billionaire list. INTC rallies +2.2% on earninigs. BIDU +7.2%. SAM gains +12% so shareholders pour a cold one to celebrate. SBUX -2.6%. FSLR +10%. MAT -4.7%.

BYD -2.1%. CERN +2.4%. CY +4.2%. DECK beat on the top and bottom lines and Ugg footwear continues selling. DLR beats on the top and bottom lines. Chemical king EMN beats on the top and bottom line. KWR trades flat. EIX meets on EPS. FE -0.3%.

AUY -0.4%. EA -3.1%. EXPE +2.8%. GHL falls down the hill -4%. HIG +1.4%.  IMPV flat. MHK +0.4%. NOV +0.9%. SYK +0.8%. WDC +0.9%.

SBUX -4.2%. Starbucks popped on earnings and then falls on its sword. AMZN -2.7%. INTC +0.9%. BIDU +7%. MAT -4%.

Tuesday, July 25, 2017

WEDNESDAY 7/26/17; India’s Nifty Above 10,000 and BSE Sensex Above 32.4K; BA; KO; GLW; DHI; F; NSC; NOC; ALK; ANTM; DTE; FLIR; GSK; HSY; HES; HLT; IR; LH; OC; ROK; ROL; R; STM; TUP; USG; New Home Sales; VIX (Volatility) Prints 8-Handle; 5-Year Note Auction; FOMC Meeting Announcement; US Dollar Index 93-Handle; Euro Above 1.17; SPX, INDU, COMPQ and NDX Print All-Time Highs; FB; PYPL; LRCX; XLNX; FFIV; FTNT; VRTX; GILD; AEM; ABX; GG; BWLD; EW; ETH; IMAX; KS; NTRI; ORLY; PKG; RCII; TER; TSCO; WLL; WFM

Aussie and Asia stocks begin trading higher following the US lead. NIKK +0.8%. ASX 200 +0.9%. KOSPI +0.1%. Topix +0.6%. Euro 1.1641. Dollar/yen 112.00. Pound 1.3025. Aussie dollar 0.7934. Australia releases CPI data shortly and the RBA Governor Lowe is expected to make comments on the labor market and monetary policy.

Global stocks may trades sideways waiting on the Federal Reserve announcement later today. According to the Fed Funds futures, there is a 0% chance of a rate hike today. There is only a 42% chance of a hike in December and the bond traders do not expect another rate hike by the Fed until March 2018.

US futures are flat. S&P +1. Dow +12. Nasdaq +2.

WTIC oil 48.37. Brent oil 50.56. Oil prices run higher on the big inventory drawdown reported by the API a few hours ago. The EIA Oil Inventories are released at 10:30 AM EST. Gold 1247. Silver 16.41. Copper 2.845.

Treasury yields are; 2-year 1.39%, 5-year 1.89%, 10-year 2.33%, 30-year 2.92%. German bund 0.57%. Japan 10-year yield 0.08%. UK gilt 1.26%. France 10-year yield 0.81%.

Mitsubishi Motors leads the upside gaining +6%. Komatsu +3%. Wynn Macau is losing -6.3%. Evergrande jumps +13%. Aussie dollar 0.7928.

Australia CPI is +0.2% quarter-on-quarter versus the +0.4% expected a big miss. Year-on-year is +1.9%. Aussie dollar 0.7899. The ASX 200 is up +1%.

Chinese stocks are trading with the Shanghai Index up +0.2% and the Hang Seng Index up +0.4%. The KOSPI slips lower -0.2% so traders are taking profits in South Korea and putting the money to work elsewhere. Chip king SK Hybnix sinks -2.8% creating a soggy vibe in South Korea. Aussie dollar 0.7910.

The NIKK ends the session up +0.5% to 20050. The ASX 200 gains +0.9% to 5777. The KOSPI finishes down -0.2% to 2435. The SSEC finishes up +0.1% to 3248. The HSI gains +0.3% to 26941. South Korea is the skunk at the garden party.

India prints another milestone. The Nifty is up 37 points, +0.4%, at 10001.15. Strike up the band. The Nifty tags 10K. Humans and cows dance joyously in the streets.

In the US, the deliberations in the Senate continue for a new healthcare bill. The Senate approved a procedural vote to discuss and debate the matter. A new proposal to repeal and replace Obamacare is shot down in a vote. Senate Majority Leader McConnell has a tough row to hoe as he tries to cobble together a healthcare plan by the end of the week.

At 3:00 AM EST (8 AM London; 9 AM Frankfurt), European indexes begin trading higher. DAX +0.2%. CAC +0.5%. FTSE +0.5%. SMI +0.6%. OMX +0.2%. UniCredit says it was hit with data breaches late last year and early this year. If the computer attacks are occurring with frequency at the Italian lender, the technicians do not have a handle on the problem.

Peugeot drives +4.3% higher on robust profits. Daimler gains +0.9% boosted by strong Mercedes Benz sales. BMW +0.6%.

British American Tobacco +1.8%. Novartis +1.3%. Nestle +0.6%. Anheuser-Busch +1.3%. Swiss pharma Lonza is a big winner up +6.4%. Subsea7 floats +4% higher. Tullow Oil +3%. Chip company ASML crashes -7%. LafargeHolcim trades flat after lowering guidance.

S&P +2. Dow +14. Nasdaq +1. Russell flat. VIX 9.24.

Euro 1.1639. Euro/yen 130.20. Dollar/yen 111.85. Pound 1.3020. Euro/pound 0.8941. Mexican peso 17.7666. Canadian dollar 1.2508. Dollar/yuan 6.7564. Indian rupee 64.3987. Aussie dollar 0.7896.

WTIC oil is up +1.3% to 48.50. Brent oil is up +1.1% to 50.74. Natural gas 2.96. Gold is down 4 bucks to 1245. Silver is down -1.2% to 16.33. Copper is up +0.6% to 2.864.

Treasury yields are; 2-year 1.38%, 5-year 1.88%, 10-year 2.32%, 30-year 2.90%.

The euro sits at 1.1644 on the 5-year anniversary of when European Central Bank President Draghi proclaimed that he would “do whatever it takes” to support the euro and markets. The global central bankers have been colluding for the last five years to maintain elevated stock market prices allowing the wealthy and privileged elite class, their masters, to become more filthy rich. The Western nations do not employ a free market system; instead they cheer crony capitalism and a central banker-controlled financial system.

S&P +2. Dow +22. Nasdaq +2. Russell flat. VIX 9.18.

At 4:30 AM EST (9:30 AM London), UK Q2 GDP is +0.2% for the quarter matching the estimate and a hair above the prior +0.2%. There is a noticeable slowdown occurring in the UK this year. Q1 was weak and that lackluster activity continues into Q2. Services push the number one tick higher while other components remain sick. Pound 1.3028.

DAX +0.4%. CAC +0.7%. FTSE +0.6%. MIB +0.5%. IBEX +0.3%. PSI -0.1%. SMI +0.7%. Portugal is the skunk at the garden party. France, the UK and Switzerland lead higher. The pound slips from 1.303 to 1.301 after the data which helps boost the footsie.

S&P +2. Dow +21. Nasdaq +1. Russell flat. VIX 9.22. The Nifty is up 33 points, +0.3%, to 9997 slipping from the 10K pedestal.

Euro 1.1618. Euro/yen 129.97. Dollar/yen 111.87. Pound 1.3014. Euro/pound 0.8928. Mexican peso 17.7876. Canadian dollar 1.2514. Dollar/yuan 6.7554. Indian rupee 64.40. Aussie dollar 0.79.

WTIC oil is up +0.9% to 48.31. Brent oil gains +0.6% to 50.52. Traders anxiously await the inventory data in six hours to see if a huge drawdown is reported like last evening’s API data. Natural gas 2.96. Gold 1245. Silver 16.33. Copper 2.862.

Treasury yields are; 2-year 1.38%, 5-year 1.88%, 10-year 2.31%, 30-year 2.90%. The 2-10 spread is 93 basis points widening a few bips over the last day. The 10-year yield moved 5 bips higher yesterday. The 5-year auction goes off in 8-1/2 hours.

The BSE Sensex ends the session up +0.5% to 32382 at record highs. HOD 32414. The Nifty gains 56 points, +0.6%, to 10021 closing above the 10K level a record high. India is the favorite flavor of international traders. Also South Korea.

S&P +3. Dow +25. Nasdaq +5. Russell +1. VIX 9.21. DAX +0.4%. CAC +0.7%. FTSE +0.5%. WTIC oil 48.18. Brent oil 50.41. West Texas Intermediate Crude oil remains above the 48 level and Brent above the 50 level.

US Mortgage Applications are a paltry +0.4% despite the lower mortgage rates. Refinancing applications rise +3.0% but mortgage loan applications sink -2.0% over the last week.

Euro 1.1642. Dollar/yen 111.78. Pound 1.3049. USD 94.10.

A huge parade of earnings begin hitting the tape resulting in the following stock moves. BA +6.66%. KO +0.3%. F +1.6%. GLW -2.4%. DHI -2.5%. NSC -1.9%. NOC -1%.

ALK -2.8%. ANTM -1.9%. BLMN -7.1%. DTE +0.2%. FLIR -1%. GSK -1.2%. HSY -0.3%. HES -1%. HLT +1.1%. IR -2.8%. LH +3.4%. OC +2.8%.

ROK -1.9%. ROL +1.9%. R +3.5%. STM +1.9%. TUP crashes -9.1%.The Tupperware party is cancelled. Drywall maker USG crashes -6.2%. IRBT +20%.

US futures are pointing to more record highs for the stock market. Stocks are bullish 80% of the time moving into the Fed announcements. S&P +5. Dow +85. Nasdaq +19. Russell +2.

Euro 1.1649. Euro/yen 130.16. Dollar/yen 111.75. Pound 1.3049. Mexican peso 17.7646. Canadian dollar 1.2527. Dollar/yuan 6.754. USD 94.11.

DAX +0.4%. CAC +0.6%. FTSE +0.5%. MIB +0.1%.

WTIC 48.25. Brent 50.44. Natty 2.92. Gold 1248. Silver 16.44. Copper 2.8585.

Treasury yields are; 2-year 1.38%, 5-year 1.87 %, 10-year 2.32%, 30-year 2.90%. The 2-10 spread is up to 94 bips.

At 9:30 AM EST, US stocks begin trading higher. The SPX gains 3 points to 2480. The Dow is up 90 points to 21703 a new record high above 21.7K. The Nasdaq Composite is up 14 points to 6427 a new record high. The Russell 2000 gains 1 point to 1451. VIX 9.35.

Euro 1.1642. Dollar/yen 111.85. Pound 1.3044. USD 94.13. WTIC oil 48.30. Brent oil 50.45. Natty 2.93. Gold 1247. Silver 16.44. Copper 2.8625.

DAX +0.3%. CAC +0.5%. FTSE +0.4%. MIB +0.3%. IBEX +0.5%. PSI -0.2%. SMI +0.666%. OMX +0.3%.

Treasury yields are; 2-year 1.39%, 5-year 1.88%, 10-year 2.33%, 30-year 2.92%. The 2-10 spread is 94 bips.

IBB +0.4%. XLV -0.3%. XLU +0.3%. XLK +0.5%. SOX +1.4%. XRT -0.5%. XLF +0.2%. TRAN -0.2%.

BA soars 16 points higher, +7.3%, moving above 228. Boeing has doubled in price in only 1-1/2 year. BA creates 110 positive points in the Dow Industrials index (multiply any Dow component by 7 to note its impact on the index). T +3.4%. VZ +1.9%. X +9.1%. USG crashes -7.4% which is not a good sign for the housing sector. KO -0.4%.

The new record highs continue. The SPX prints 2481.69. The Dow prints 21708.09. The Nasdaq Composite prints 6428.42. The NDX, NYA and RUT are each a hair away from record highs. The stock market is an orgy of lust and greed so obscene that even Caligula would blush. Central bankers are the Viagra.

SPX 2480. INDU 21727. COMPQ 6427. RUT 1447. The Russell 2000 slips negative after printing only 7 pennies from a new all-time high above 1452. VIX 9.41.

At 10 AM, New Home Sales are up +0.8% for June at 610K units missing the 611K expected by a hair but above the prior revised-lower 605K. The number is disappointing. The median home price is $310,800 below the May and June record highs. There is a 5.4 month supply of homes remaining steady at the low inventory.

EIA Oil Inventories are a big 7.2 million barrel draw down but not as large as last evening’s API data. WTIC oil is up +1.4% to 48.53. Gasoline and Distillate inventories are drawdowns.

The NDX, Nazzy 100, prints a new all-time record high above 5954. Telecom and real estate stocks lead higher. VOX +1.2%. T +4.6%. PII is down -3% after Polaris recalls ATV problems that had resulted in injuries. AMD +9%. SOX +1.2%. TXN +1.9%. KO +0.3%. F -1.8%. WYNN -6.4%.

SPX 2478. Five of 11 S&P sectors are higher. INDU 21720. COMPQ 6422. RUT 1447. WTIC oil 48.43. Brent oil 50.63.

European indexes end the session higher sans Portugal. The DAX gains +0.3% to 12305. The CAC gains +0.6% to 5190. The FTSE is up +0.2% to 7452. The MIB gains +0.6% to 21578. The IBEX finishes up +0.5% to 10575. The PSI loses -0.3% to 5270.

AMZN, EXPE, NVDA, MSFT and many others print new record highs. AKAM, IBM and BBBY sink to new lows. BA soars +8.3% higher and is single-handedly pumping the Dow Jones Industrials index higher. T +5.1%.

At 1 PM, the 5-Year Note Auction goes off at 1.884% with solid demand. Traders are waiting on the FOMC announcement in one hour and are interested in comments on inflation and on the balance sheet reduction methodology.

Semiconductors are strong. XSD +0.9%. AMD +5.7%. NVDA +0.6%. AVGO +1.1%. Biotech stocks trade higher. IBB +0.666%. Energy stocks move higher with oil prices. XLE +0.8%. X +7.2%. The hospitals are sick. UNH -6.66%. THC -3.2%. ANTM -2%.

The asset managers trade higher to new record highs. The rich become richer. TROW +1.4%. AMP +0.4%. BEN +0.4%. IVZ +0.2%.

At a Whitehouse event, Foxconn, the Apple supplier, announces plans to build a $10 billion manufacturing plant in Wisconsin creating 3,000 jobs. The facility plans to expand to 13K employees and as many as 32K other support and construction jobs will occur within one-half hour’s drive of the new facility. Sometimes these big announcements end in a whimper years later.

Foxconn is the Asian assembler and supplier for Apple and many other tech companies that overworked employees to the point that they leaped from windows committing suicide. The problem became so serious that nets were installed around the buildings to save the troubled souls. Over the last couple years, working conditions are improving and the insanity from prior years subsides. Think of the blood, sweat and people’s souls that went into the making of your electronic device.

Euro 1.1633. Dollar/yen 112.06. Pound 1.3050. WTIC oil 48.56. Brent oil 50.76. Gold 1250. Silver 16.46. Copper 2.872.

Treasury yields are; 2-year 1.38%, 5-year 1.87%, 10-year 2.32%, 30-year 2.92%.

SPX 2477. INDU 21689. COMPQ 6419. Gold 1250.

Whoosh. A minute before the statement, the bottom falls out of volatility. The VIX plummets to 8.84 an epic low. The VIX has an 8-handle.

At 2 PM EST (7 PM London; 8 PM Frankfurt; 3 AM Tokyo Thursday morning), the Federal Reserve decides to leave the key rate unchanged at 1.00%-1.25% as expected. The FOMC says the unwinding of the balance sheet will begin “relatively soon” as long as the economy continues developing (probably an announcement will be coming at the September meeting concerning the balance sheet).

The Fed says inflation has declined and runs under the +2% goal and will remain there in the near-term but move up to the +2% target over the medium term. The statement is in line with expectations without any surprises. Markets are calm.  t is more of the same-o, same-o from the Federal Reserve.

SPX 2479. INDU 21710. COMPQ 6423. RUT 1445. VIX 9.35. WTIC 48.60. Brent 50.82. Natty 2.91. Gold 1252. Silver 16.50. Copper 2.866.

Euro 1.1666. Euro/yen 130.54. Dollar/yen 111.91. Pound 1.3062. Euro/pound 0.8932. Indian rupee 64.3663. Mexican peso 17.7008. Canadian dollar 1.2491. Dollar/yuan 6.754.

Treasury yields are; 2-year 1.37%, 5-year 1.85%, 10-year 2.31%, 30-year 2.91%.

At 2:05 PM, SPX 2480. INDU 21717. The Dow is up 104 points. COMPQ 6424. The Russell 2000 small caps are down 4 points at 1446. VIX 9.26. Gold 1252. The dollar is dropping with USD at 93.83 moving lower. Euro 1.1685. Dollar/yen 111.74. WTIC oil 48.64. Brent 50.85.

The US dollar index drops so the euro pops above 1.17 to 1.1702. USD 93.73. Euro/yen 130.55. Pound 1.3082. Gold 1254. Silver 16.54. Copper 2.8645.

The FOMC statement is viewed as hawkish for the balance sheet reduction plan but dovish concerning future rate hikes. The dovishness pumps the stock market higher. The central bankers are the market.
The USD drops like a stone from 94.2 to 93.4 after the Fed announcement. A lower dollar sends gold, silver, oil, copper and other commodities higher elevating the broad stock indexes.

The Senate votes on another repeal and replace Obamacare bill but that fails. Senators are trying to come up with a well thought-out plan but they look like the Keystone Kops stumbling and bumbling. The Republican Party has several conservatives on one side that believe in balanced budgets and fiscal responsibility all that old-fashioned stuff. On the other side, there are several moderate republicans, sometimes called RINO’s (republican in name only), that are sympathetic to some democrat ideals and may vote with democrats often.

The balance of the Republican Party is made up of the mainstream republicans that are like the mainstream democrats in that they are part of the establishment political structure in the United States and have a vested interest to maintain the status quo (the establishment demopublicans and republocrats are most concerned about retaining their power and money rather than doing what is right for the American people). The republicans do not have any margin for error in the Senate on voting matters since the body is evenly split between republicans and democrats.

Therefore, if the new healthcare insurance proposal pleases conservatives in the Republican Party, it alienates the moderates. If a plan placates the moderates, the conservatives are not on board. It does not appear likely that the Senate can cobble any health insurance plan together under this scenario. The Republican Party does not hold enough seats in the senate to override the typically conflicting views of the conservatives versus the moderates.

BA +9.9%. KO +1.1%. VZ +1%. V +0.9%. CVX +0.7%. T +5%. AMD +4.6%. AMAT +2.3%. SIGM +10%. BIIB +4.5%. AMP +4.2%. EA +3.8%. ATVI +2.8%. CTRP +3.2%. JD +3.2%. IRBT catapults over +21% higher with robots proclaiming they will take over the world.

AKAM crashes -15%. STX -2.6%. JNPR -6.3%. GLW -5.3%. DDD -5.7%. UHS needs an emergency room down -8.2%. RHI -7.4%. AMGN -2.8%. ULTA is ugly down -3.7%. WYNN is losing down -5%. KMB -2%. TRN -4.2%. FIT -6.4%.

There are several notable losers on the Dow. NKE -1.7%. MCD -1.6%. McDonalds was the hero yesterday and the zero today. Hot money moves from stock to stock and from sector to sector. CSCO -1.4%. TRV -1.1%. JPM -0.9%.

FB is down -0.2% with earnings on tap after the bell. BA soars +10% higher into the closing bell. One stock, Boeing, carried the Dow Jones Industrials higher all by itself today.

US stocks finish the session printing more new all-time record highs. The SPX ends up 1 point at 2477.83 a new all-time closing high and 2481.69 a new all-time high. The S&P 500 prints its 29th record closing high this year. The Dow Jones Industrials finish up 98 points, +0.5%, to 21711.01 a new all-time closing high and 21742.70 a new all-time high. INDU prints its 27th record high this year.

The COMPQ is up 11 points, +0.2%, to 6422.75 a new all-time closing high and 6432.38 a new all-time high. The Nasdaq Composite prints the 44th record closing high this year. The NDX gains 20 points, +0.3%, to 5950.73 a new all-time closing high and 5954.38 a new all-time high. The Nasdaq 100 prints the 53rd record closing high this year.

The RUT finishes down 8 points, -0.6%, to 1442. The Russell 2000 HOD is 1452.02 only 7 cents from a new all-time high. The NYA finishes flat pennies from all-time highs. TRAN -1.2%.

VIX 9.60. The VIX drops to an epic low today at 8.84. The VIX closes under 10 for 10 consecutive days a record that will live on for many decades. These are historic times.

After the closing bell, FB sinks -3.7% on earnings. The Facebook results are solid across the board. The monthly active users (MAU) are a touch soft. Average revenue per user (RPU) is slightly lower than expected, however, with the number of users increasing overall, this number would be soft. Facebook proclaims 2 billion monthly users a phenomenal milestone above expectations. 2 billion people use Facebook each month and about two-thirds of these folks are on FB daily. FB begins recovering in late trading back to the flat line and turning positive. As the afterhours play out, FB is up nearly +4% staging a wild +8% turnaround after the earnings release.

Gold miners report earnings. AEM +1.3%. ABX +1.1%. GG +1.5%. BWLD crashes -8%. EW +2.4%. FFIV crashes -8%. FTNT collapses -6%. GILD +1.7%. IMAX +3.9%.

A couple of key packaging companies report earnings. KS +1.5%. PKG trades unchanged. Chip darling LRCX bounces +1%. XLNX +3.6%. NTRI +7.3%. ORLY drives +4.6% higher. PYPL +2.1%. RCII -4%. TER -2.5%. TSCO -2.6%. The hottest stock of the year Vertex Pharma reports earnings. VRTX -0.9%. WLL -4.2%. WFM -0.2%.

Hedge fund manager Dan Loeb at Third Point announces holdings in BABA and BLK. FB +3.5%. PYPL +4%. LVS -1%. BWLD -9.2%.

The US House and Senate are in the process of approving new sanctions against Russia, Iran and North Korea. President Trump will have to decide if he wants to sign the sanctions into law. Iran says it will retaliate. Russia says it will wait to see if the sanctions are implemented before discussing a response.

Monday, July 24, 2017

TUESDAY 7/25/17; MMM; UTX; CAT; DD; GM; LLY; MCD; AKS; ATI; BIIB; DPZ; FCX; GPK; HCA; JBLU; KMB; MDR; NEM; PCAR; PHM; SVU; German IFO Business Sentiment Strong; Copper and Oil Rally +4%. Brent Oil Above 50; VIX (Volatility) Plummets to Historic Low 9.04; Euro Prints Above 1.17; FOMC Two-Day Policy Meeting Begins; Housing Data; Consumer Confidence; 2-Year Note Auction; SPX, COMPQ, RUT and NYA Print All-Time Highs; AMD; AKAM; AMGN; T; CMG; ESRX; JNPR; TRN; TXN; UHS; WYNN; X; ZION

Aussie and Asia stocks begin trading higher. NIKK +0.2%. Topix +0.1%. The BOJ releases meeting minutes that do not contain any surprises. ASX 200 +0.6%. All sectors trade higher in Australia except for energy and telecom. Aussie healthcare stocks jump +1.6% and industrials are up +1%.

South Korea is a hair negative. KOSPI -0.1%. South Korea is not helped by SK Hynix reporting strong Q2 earnings. Memory chip demand remains very robust.

US futures are flat as GOOGL sinks in late trading Monday night in the States. S&P -1. Dow -2. Nasdaq -4.

Euro 1.1635. Dollar/yen 111.27. Pound 1.3018. Dollar/yuan 6.7512. Aussie dollar 0.7925.

Oil remains buoyant after the Saudi’s pledge to limit production to maintain elevated prices. WTIC oil 46.44. Brent oil 48.68. Natural gas 2.91. Gold 1253. Silver 16.45. Copper catches a bid rising to 2.74.

Treasury yields are; 2-year 1.36%, 5-year 1.82%, 10-year 2.25%, 30-year 2.83%. The 2-10 spread is 89 bips.

Dollar/yen 110.93. The weaker US dollar and stronger yen sends the dollar/yen pair lower and sinks Japanese exporters and manufacturers. The automakers, however, buck this outcome since earnings season overrules the currency push. Honda drives +0.8% higher. Mazda Motor +0.2%. Toyota gains +0.5%.

Euro 1.1656. USD 93.85. WTIC oil 46.44. Brent oil 48.83.

The Pacific theater registers another quiet day like yesterday as global traders anticipate the US Consumer Confidence data this morning, the FOMC decision tomorrow and US GDP on Friday. The US Senate plans to vote on another healthcare bill today which adds more drama.

S&P -1. Dow -8. Nasdaq -8. Euro 1.1666. Dollar/yen 110.89. Pound 1.3032. Dollar/yuan 6.7464. Aussie dollar 0.7941.

Oil is up +0.5%. WTIC 46.58. Brent 48.83. Natural gas 2.91. Gold 1257. Silver 16.48. Copper leaps +1.7% higher to 2.78. Copper will maintain buoyancy in the stock market.

In India trading, the Nifty drops 8 points to 9959. The BSE Sensex is down 15 points at 32230 taking a rest after yesterday’s record high.

Treasury yields are; 2-year 1.36%, 5-year 1.82%, 10-year 2.25%, 30-year 2.84%.

The NIKK ends the session down a smidgeon at 19955. The SPASX200 rallies +0.7% to 5727. Australia is the winner on the session. The KOSPI drops -0.5% to 2440. The SSEC is down -0.2% at 3244. The HSI finishes up +0.1% at 26866.

At 3:00 AM EST (8 AM Frankfurt; 9 AM Frankfurt), European indexes begin trading marginally higher. DAX +0.2%. CAC +0.3%. FTSE +0.3%. Greece’s AEX +0.1%. Greece returns to the bond market after dealing with its financial crisis for many years with a 5-year bond offering planned.

Euro 1.1653. Euro/yen 129.35. Dollar/yen 111.00. Pound 1.3024. Euro/pound 0.8948. Mexican peso 17.723. Canadian dollar 1.2503. Dollar/yuan 6.7487. Indian rupee 64.359. USD 93.93.

US regulators join the investigation into potential collusion between European car manufacturers over the last decade. The auto makers may have been conspiring to set steel prices as well as comparing nefarious notes concerning emissions technology. Volkswagen -0.4%. Daimler +0.6%. BMW -0.2%. European carmakers were slaughtered across the board yesterday losing from -2% to -5%.

Consumer staples are the only industry group trading lower. Utilities, real estate and basic materials stocks lead higher. Anglo American +3.4%. Antofagasta +2%. Glencore +1.6%. Covestro +1.6%. Informa +6.1%. DB gains +1.1% on news that Deutsche Bank holdings may be moved from the UK to Frankfurt (because of Brexit).

In the retail space, US company Michael Kors buys Jimmy Choo. Handbags and shoes go together. Jimmy Choo clicks its heels jumping +17.3% higher.

Finnish paper manufacturer UPM is crushed -7.4%. The world’s largest chocolate maker Lindt sinks -3.6%. Quick, run out and buy a box of Russell Stover chocolates for your honey to help them out. Akzo Nobel -1.3%. Norsk Hydro -3.4%. British American Tobacco -1.3%. Recky Bencky -0.4%. Novo Nordisk -0.3%. Siemens -0.3%.

S&P -2. Dow -9. Nasdaq -8. Russell -1. VIX 9.39. Oil is up +0.4%. WTIC oil 46.54. Brent oil 48.81.

Treasury yields are; 2-year 1.36%, 5-year 1.82%, 10-year 2.25%, 30-year 2.83%. German bund 0.50%.

Global traders are awaiting the FOMC rate decision tomorrow afternoon in the States. The Fed Funds futures indicate a 0% chance of a rate hike. There is only a 10% paltry chance of a Federal Reserve rate hike in September, a 42% chance for December and 43% chance in January. The bond market does not expect another rate hike this year since the chances for the hike are less than 50/50. The Fed is in conflict with the bond market continuing to tout at least one more hike this year and three or four hikes next year.

At 4 AM EST (10 AM London), German IFO Business Confidence is 116.0 better than the 114.9 expected. Euro 1.1657. Dollar/yen 111.30. Pound 1.3023. Aussie dollar 0.7931. USD 94.00.

S&P -1. Dow -6. Nasdaq -4. Russell +1. VIX 9.33.

Oil is up +0.6%. WTIC oil 46.61. Brent oil 48.87. Gold 1253. Silver 16.39. Copper is a standout winner rallying +1.6% to 2.7805. Global investors believe in a robust economy ahead buying copper with both hands.

Treasury yields are; 2-year 1.37%, 5-year 1.83%, 10-year 2.26%, 30-year 2.84%. German bund 0.51%. Japan 10-year yield 0.07%. UK gilt 1.19%. France 10-year yield 0.75%.

DAX +0.4%. CAC +0.5%. FTSE +0.6%. India’s Nifty loses 12 points, -0.1%, to 9955.

At 5 AM EST, S&P +1. Dow +4. Nasdaq -1. Russell +1. VIX 9.28. US futures and European stocks are becoming more buoyant as copper is launching like a rocket. Copper is up +2.1% at 2.7925 knocking on the 2.80 door. Volatility remains at all-time record lows and the VIX is approaching an astonishing, ridiculous and mind-boggling 8-handle. That print would be epic. The current market action is historic.

Oil is up over +1% pumping futures and stocks higher. WTIC oil 46.85. Brent oil 49.09. Natty 2.92. Gold 1253. Silver 16.38.

DAX +0.4%. CAC +0.6%. FTSE +0.7%. MIB +0.6%. IBEX +1.1%. PSI +0.2%. India stocks turn positive approaching the closing bell. The Nifty is up 8 points at 9974.

Euro 1.1654. Dollar/yen 111.26. Pound 1.3026. Mexican peso 17.7581. Canadian dollar 1.2514. Aussie dollar 0.7929. USD 93.98.

Treasury yields are; 2-year 1.37%, 5-year 1.84%, 10-year 2.27%, 30-year 2.85%. The 2-10 spread is 90 bips. German bund 0.512%. UK gilt 1.20%.

A US warship in the Persian Gulf fires warning shots at an Iranian boat that approaches to close. The game of chicken continues. It is all fun and games until someone gets an eye poked out.

S&P +3. Dow +17. Nasdaq +1. Russell +3. VIX 9.22. DAX +0.6%. CAC +1%. FTSE +0.8%. Market bears are staying in bed hiding under the covers as copper and oil rally and volatility sinks.

The bullish market euphoria continues. Bloomberg television commentators continue laughing and making fun of anyone that is holding cash. Commentator Tom Keene scoffs at the idea of holding cash as a position and proclaims that the stock market is the “most unloved bull market in history.” The bullish cheer leading is off the charts. There is no one remaining on Wall Street that thinks stocks will selloff. Aunt Agnes is caught up in the bullish euphoria and decides to place her entire life savings into dividend stocks.

Canaccord strategist and permabull Tony Dwyer keeps calling for more stock market upside and equities continue higher. Dwyer repeats his thesis that a “recession is nowhere in sight.” He says, “Earnings drive stocks.” Dwyer expects the upside party in the stock market to continue. The bullish prognosticators parade across business television screens every 10 minutes.

S&P +4. Dow +34. Nasdaq +2. Russell +5. VIX 9.18. DAX +0.6%. CAC +1.1%. FTSE +0.9%. The Nifty ends the session down 2 points at 9965.

Euro 1.1649. Dollar/yen 111.41. Pound 1.3026. Aussie dollar 0.7927. USD 94.01.

Oil gains +1.4%. WTIC 46.97. Brent 49.27. Natty gains +0.666% to 2.92. Gold is down 4 dollars at 1251. Silver 16.32. Copper 2.80.

The Q2 earnings season hits full stride beginning today with many heavy-hitters on tap that will move markets. Nearly 170 companies in the S&P 500 report this week. MMM collapses -5%. UTX tumbles -2.2%. CAT +5.9%. MCD +5%. DD +1.4%. GM -0.7%.

AKS +12%. ATI +11.5%. BIIB -0.6%. CVLT +3.5%. DPZ -10.1%. FCX jumps +15% boosted by earnings and copper’s rally today. GPK sinks -3.1%. A packaging company sinking like a stone is not a good sign for the economy. HCA -4.5%. JBLU flat. KMB +07%. LLY -3%. MDR -4%. NEM +6.9%. PCAR -0.7%. PHM +0.5%. SVU +15.1%. WAT -5.4%.

GOOGL is down -2.666% after last evening’s earnings. KORS -0.3%. LULU drops -1.5% on a Stifel downgrade. UAA trades flat after receiving a downgrade. VFC +0.6%. Financials are strong in the pre-market. PNC +1.9%. Energy stocks move higher with the rise in oil. SLB +1.3%. APC +1.7%.

The S&P Case-Shiller House Price Index is up +0.1% month-on-month for the 20-city seasonally-adjusted less than the +0.3% expected but above the sharply revised-lower prior month at -0.2%. The 20-city non seasonally-adjusted is +0.8% month-on-month matching the expectation but below the prior +1.0%. Year-on-year is up +5.7% less than the +5.8% expected and below the prior +5.8%. Home prices are moderating.

FHFA Home Price Index is up a small +0.4% month-on-month less than the +0.6% expected and below the prior +0.6%. Year-on-year is up +6.95 matching last month’s number. Both sets of housing data are weaker than expected.

The two-day FOMC meeting begins with the Fed’s rate decision announced tomorrow afternoon at 2 PM EST (7 PM London; 8 PM Frankfurt; 3 AM Tokyo Thursday morning). Traders are looking forward to the Federal Reserve’s comments on the lack of inflation.

After the earnings releases and with copper and oil running higher, US futures catch a bid. S&P +7. Dow +112. Nasdaq +8. Russell +8. VIX 9.10.

DAX +0.666%. CAC +1.2%. FTSE +0.8%. Euro 1.1695. Euro/yen 130.26. Dollar/yen 111.35. Pound 1.3080. Euro/pound 0.8941. Mexican peso 17.7029. Canadian dollar 1.2490. The peso and loonie continue to weaken the Canadian dollar pair now sporting a 1.24-handle. Dollar/yuan 6.7489. Indian rupee 64.3813. Aussie dollar 0.7966.

Oil jumps +1.9%. WTIC 47.21. Brent 49.50. old 1253. Copper 2.81.

Treasury yields are; 2-year 1.37%, 5-year 1.85%, 10-year 2.28%, 30-year 2.86%.

Futures are joyous. S&P +10. Dow +116. Nasdaq -6. Russell +9. VIX 9.09. Euro 1.1692. The euro briefly touches the 1.17 level.

At 9:30 AM EST, US stocks begin trading higher except for the Nasdaq. The S&P 500 is up 9 points and prints a new all-time high above 2479. The Dow gains 150 points, +0.666%, to 21657. The COMPQ drops 6 points to 6405. The RUT is up 7 points to 1445.

Oil is up over +2%. WTIC oil 47.31. Brent oil 49.58. Natty 2.94. Gold 1252. Silver 16.51. Copper gains +3.1% to 2.8220.

Treasury yields are; 2-year 1.38%, 5-year 1.86%, 10-year 2.30%, 30-year 2.88%.

Financials and elenrgy stocks lead higher. XLF +1.8%. XLE +1.6%. XLB +0.8%. XLK -0.5%. UTX -2.3%. MMM -4.8%. CAT +4%. STX crashes -19.1%. APC -1.8%. PHM -1.2%. TRAN +1%. VIX 9.32.

About 25% of the companies have reported Q2 earnings thus far. There is a +8.8% rise year-on-year in earnings and the top line revenues are increasing +4.6%.

SPX 2477. INDU 21638. CAT, DD and MCD carry the Dow Jones Industrials Index higher. COMPQ 6403. RUT 1445. VIX 9.23.

At 10 AM EST, Consumer Confidence is up to 121.1. Strike up the band. The consensus is 117.0 and the prior number is 117.3 so the beat is big and nearly at the March high at 124.9.

The Richmond Fed Mfg Index is +14 blowing out the +8 expected and prior revised-higher +11. The 9 AM data was sad but the 10 AM data is joyful. Banks are happy. JPM +2.2%. GS +1.8%. BAC +2.7%. C +3.1%.

European indexes end the session higher. The DAX gains +0.5% to 12264. The CAC finishes up +0.7% to 5161. The FTSE is up +0.8% to 7435. The MIB gains +0.6% to 1457. The IBEX finishes +0.7% higher at 10523. The PSI is up +0.4% at 5284. France, the UK and Spain lead higher.

The euro tags the 1.17 level not seen since 2015. Euro 1.165. Anglo American finishes up +6.1% on news that the dividend will increase. Jimmy Choo dances +17.1% higher on the Michael Kors deal. KORS -0.5%.

At noon, the SPX is up 10 ponts at 2480. INDU 21639. COMPQ 6414. RUT 1452. VIX 9.17. Biotech trades lower. IBB -1.1%.  XLV -0.7%.

At 12:40 PM, the COMPQ prints above 6418 a new all-time high. The market bulls are unstoppable. Traders high-five each other and sing the praises of global central bankers. The Russell 2000 is at all-time highs. Ditto the NYSE Composite.

Treasury yields are; 2-year 1.39%, 5-year 1.88%, 10-year 2.32%, 30-year 2.90%.

Oil explodes +3% higher. WTIC 47.76. Brent oil hits 50.00. Copper is above 2.83 at highs not seen in two years.

President Trump’s surrogates are out and about bashing Attorney General Sessions. Trump wants Sessions to resign but the embattled attorney general remains quiet. Sessions was the first big-time politician that endorsed Trump creating legitimacy to his run for president. The orange-headed carnival barker wins the election and gives Sessions the job he always wanted but now Trump is stabbing him in the back. Trump professes that “loyalty” means a lot but apparently it is a door that only swings one way. Trump is trying to throw Sessions under the bus.

The US Senate assembles to vote on a ‘bill to proceed to debate’ with the healthcare bill. The Senate is a joke. The repeal and replacement of Obamacare situation has become confusing and convoluted. This vote is only a procedural matter that will begin debate on a potential healthcare bill. The republicans are desperate to deliver a winning vote to President Trump. Republican Senator McCain, stricken with brain cancer, returns for the vote.

President Trump promised to immediately repeal and replace the Affordable Care Act (ACA; Obamacare) if elected but as it turns out the Republican Party did not have any plan to improve or replace Obamacare. Trump desperately needs a win and has pressured all republicans to vote in favor of the procedural bill. The vote is scheduled for 2:15 PM EST and should result in a yes although the tally may be very close.
At 1 PM, the 2-Year Note Auction goes off at 1.395% with a solid auction.

MCD is up 8 points, +5.2%, to 159.72 a record high. Mickey D’s is up +30% this year. McDonalds adds 60 positive points to the Dow Jones Index all by itself. Stocks remain elevated and bullish in the afternoon.
At 2:28 PM, the Senate is set to begin the vote. The gallery erupts in shouting. Spectators begin chanting, “Kill the bill! Kill the bill!” Security personnel usher the protestors outside. The brief disorder in the chamber is resolved and the voting begins.

SPX 2480. INDU 21629. COMPQ 6419. VIX 9.38. Oil is up +3.4%. WTIC 47.91. Brent 50.23. Gold 1250. Silver 16.48. Copper 2.842.

Two republicans vote the Senate bill to proceed to debate down; Susan Collins and Lisa Murkowski vote no. The republicans cannot lose any more votes.

SPX 2479. INDU 21635. COMPQ 6420. VIX 9.41. Markets are steady and elevated.

The Senate vote ends at a 50-50 split. When the 100 senator’s vote and it results in a tie, the vice president that presides over the Senate places the tie-breaker vote. VP Pence votes in favor and the bill passes. President Trump will breathe a sigh of relief, for now. The bill sets up 20 hours of debate time split between the republicans and democrats. A bill must be developed before the end of the week since the House is leaving for vacation. The lawmakers are offering amendments for the bill that will either be placed in the legislation or shot down. The Senate is trying to put together a healthcare bill and pass it this week so the House can also vote and then the bill will next go to conference. The healthcare insurance drama continues.

XLV -0.6%. HCA -3.9%. LLY -3.9%. ZTS -3.2%. GOOGL -2.9%. STX -17%. IPG -13%. MU -6%. VIAB -3.3%.

MCD +4.8%. CAT +5.9%. DD +1.4%. MMM -5.1%. XLE +1.3%. SIG +5.5%. TSCO +4%. FASR +2.4%. JD +2.3%. DLTR +1.9%. TGT +1.9%. JBHT +2%. HD +1.7%. Retail stocks catch a bid. XRT +2.6%. RTH +1.3%.

XLF +1.2%. C +2.9%. JPM +0.666%. KRE +1.6%. GS +1.6%. PNC +1.7%. ZION +0.7%.

US stocks finish the session in rally mode boosted by earnings beats, higher copper, higher oil, higher banks, higher retail stocks and lower volatility. Everything is going the bull’s way. Stocks are typically buoyant moving into the Fed meeting 80% of the time.

The SPX ends the day up 7 points, +0.3%, to 2477.13 a new all-time closing high and 2481.24 a new all-time high. The Dow Industrials finish 100 points higher, +0.5%, to 21613. The RUT gains 12 points, +0.9%, to 1450.39 a new all-time closing high and 1452.09 a new all-time high by 4 measly pennies.

The Nasdaq Composite gains 1 point enough for a new all-time closing high at 6412.17 and 6425.45 a new all-time high. The Nasdaq 100 finishes down -0.2% and did not print any new all-time highs. The NYA gains +0.5% to 11965.73 a new all-time closing high and 11985.80 a new all-time high. TRAN +0.6%. VIX 9.43. VIX LOD 9.04 only 4 pennies from an 8-handle. These are epic and historic times. Market history is being written each day but most people have a laissez-faire attitude. The non-stop upside in the stock market is taken for granted.

After the closing bell, AMD +7.4%. AKAM crashes -7.4%. AMGN -2.4%. T jumps +2.7% on earnings and higher subscribers. CMG +0.7%.  ESRX -1.7%. IRBT +24%. JNPR -2%. SFLY -2.3%. TRN +1.2%. TXN +2.7%. UHS -6.4%. X catapults +10% higher. ZION +3%. WYNN is a loser down -4%.

Blue Apron cofounder and COO Matthew Wadiak resigns. APRN -0.5%. This fledgling meal delivery service IPO is struggling ever since it came public. In less than one month after the IPO, Wadiak sneaks out the back door. Are the rats already leaving the sinking ship? Blue Apron should not have gone public. The bankers and underwriters look like fools. Quick, order an overpriced undersized meal that shows up in a cardboard box that you have to cook to help them out.

The API Oil Inventories are a huge 10.2 million barrel drawdown. Oil prices rise. WTIC oil jumps to 48.48. Brent oil 50.75.

CMG rises +2% so Chipotle is doing a good job on the conference call. Patrons became sick at a restaurant last week and the burrito-maker has tracked the incident to an ill worker. CMG +2.7%.

President Trump says Janet Yellen and Gary Cohn are the front runners for the Federal Reserve top job next year. Yellen’s term ends in January-February only six months away. Trump releases this information probably to distract away from the ongoing Whitehouse drama. Yellen does not appear interested in another term. Her health may not be the best. Trump likely realizes he will need a dovish Fed for the next few years to keep goosing stocks higher and continue the illusion that the economy is doing well.