Sunday, June 18, 2017

MONDAY 6/19/17; French Parliamentary Election Aftermath; London Terror Attack; Japan Trade Data; NIKK (Japan) 20K; China Home Prices; Brexit Negotiations Begin; Cascading Global Stock Market Rally; SPX (S&P 500), INDU (Dow Industrials Above 21.5K) and AMZN (Amazon) New All-Time Record Highs; Natural Gas Mini-Crashes -5%; WTIC Oil at 2017 Lows

Euro 1.1197. Euro/yen 124.08. Dollar/yen 110.81. Pound 1.2762. Euro/pound 0.8775. Mexican peso 17.9274. Canadian dollar 1.3213. Dollar/yuan 6.8105. Indian rupee 64.4275. Aussie dollar 0.7621.

US futures are off to a positive start Monday morning in Asia and Sunday evening in the States. S&P +3. Dow +28. Nasdaq +7. Russell +2.

WTIC oil 44.71. Brent oil 47.32. Natural gas is down -2.8% to 2.95. Gold 1254. Silver 16.66. Copper 2.5815. Iron ore trades +1% higher to 55.23.

US Treasury yields are; 2-year 1.32%, 5-year 1.74%, 10-year 2.15%, 30-year 2.78%. The 2-10 spread is 83 bips.

South Korea and China finance ministers meet this weekend with the countries kissing and making up after one year of rough relations. Both countries agree to cooperate more on trade policies which creates market positivity to begin the week.

France President Macron’s En Marche! (Republic on the Move; LREM) Party secures a strong majority in parliament as expected. France’s CAC may trade happily today as Macron receives a mandate to forge ahead with his policies. How supportive and how much time will the young 39-year old leader be given to improve the nation’s economy?

The French unions are well known for street demonstrations against the government that may test Macron and stall the economy. The turnout for the France legislative election is the lowest in history at only 42.6% not exactly a ringing endorsement that citizens are supporting all of President Macron’s ideas. The 356 seats for the LREM Party are not as large as was expected. Many French remain disgusted and turned-off by politics and the never-ending baby games.

Asia and Aussie indexes begin the session on the positive side. Computer screens are lighting up green to start the new trading week. The NIKK, ASX 200 and KOSPI are each trading up more than +0.4% and climbing higher.

After midnight in North London, a deranged nutcase in a white van runs over Muslims leaving a mosque. Recent terrorist attacks are carried out by radical Muslims using vehicles to kill infidels so the event is a surprising twist in the ongoing global saga. The incident shows that there are deranged nutcases on all sides of the terrorism issue.

One person is dead and 10 injured in the London attack. British authorities say the incident is a potential terror attack. Mayor Sadiq Khan, a Muslim, runs to a microphone and proclaims the event as a “horrific terrorist attack.” After the many terrorist attacks targeting Westerners, Khan is typically telling everyone to remain calm and not judge the situation too quickly but not this time. Terrorism becomes commonplace in London and the UK.

The 48-year old driver of the van is arrested by London police and taken away for a mental evaluation. A witness says the man was screaming, “I’m going to kill all Muslims.” UK PM May calls an emergency meeting to address the incident. London police believe the man acted alone although the situation is ongoing and developing. Police are urging for calm in a city that is plagued with increased terrorism.

China May home prices are up +10.4% less than the +10.7% expected. Home values gain in 56 of 70 cities versus 58 cities the prior month. Prices fell in 9 cities and are unchanged in 5 cities. The home-price growth in China is subsiding slightly and next month’s data takes on added importance.

Japan trade data is released reporting a trade deficit instead of a surplus expected. Japan Exports are up +14.9% missing the +16.1% expected. The dollar/yen pair moves from 110.88 up through 111.00 reflecting a weaker yen that pumps Japanese stocks higher.

As announced last week, Takata is expected to declare bankruptcy this week which is the largest corporate collapse in Japan since WW II. 11 people died from the defective airbags.

USD 97.14. Euro 1.12. Pound 1.2781. Aussie dollar 0.7613. Oil trades down -0.4%. WTIC oil 44.55. Brent oil 47.20.

Tech stocks are running higher after last week’s selloff. The stock markets refuse to sell off since the global central bankers keep providing easy money stimulus. In South Korea, Samsung Electronics launches +2.2% and SK Hynix jumps +4% higher. Nomura upgrades the chip maker.

In Singapore, Noble Group catapults +12% higher after an agreement is reached with creditors to extend repayment deadlines for the troubled commodities logistics company. Aussie and Asia indexes are a sea of green as a cascading global stock market rally begins. European index futures point to a +0.8% gain for the DAX, CAC and FTSE.

India trading is off to a positive start with the Nifty up 34 points, +0.4%, to 9622. The BSE Sensex gains 134 points, +0.4%, to 31192.

US futures are joyous joining the upside party around the world. S&P +7. Dow +53. Nasdaq +29.

The NIKK finishes up +0.6% to 20068 above the 20K level. The SPASX200 finsihes up +0.5% at 5805. The KOSPI gains +0.4% to 2371. The SSEC gains +0.7% to 3145. The HSI ends up +1.2% to 25925.

The Portugal wild fires continue with over 60 people dead trapped in cars by the flames. The search continues for more bodies. A three-day mourning period is ongoing in Portugal to honor the dead. The Iberian Peninsula is burning.

Euro 1.1204. Dollar/yen 111.07. Pound 1.2779. Aussie dollar 0.7611. Dollar/yuan 6.8136.

WTIC oil 44.56. Brent 47.71. Natty 2.96. Gold is off 2 bucks to 1252. Silver 16.61. Copper is up +0.3% to 2.5855.

Treasury yields are; 2-year 1.32%, 5-year 1.75%, 10-year 2.16%, 30-year 2.78%.

At 3 AM (8 AM London; 9 AM Frankfurt), European indexes launch higher at the opening bell. DAX +0.9%. CAC +1%. The CAC runs higher after the French legislative elections yesterday. FTSE +0.8%. SMI +0.7%. OMX +0.8%.

Most European stocks are higher across the board. Banco Santander +1.4. HSBC +0.666%. BNP Paribas +1.2%. %. CS +3.4%. DB, MS and C upgrade CS so the banks will spend the next few weeks upgrading each other to try and jump start a new rally in financials. This is how the game is played.

Novartis +0.7%. Royal Philips +4.1%. Total +0.9%. The gains are broad-based with banks, pharma, energy and telecom stocks leading higher. Danone is up +1.4% on takeover chatter. Ocado launches +7% higher.

UK and European Union officials are meeting to begin the Brexit negotiation process. Humorously, they will conduct negotiations today to determine how the negotiations will proceed. Rightmove reports that London home prices are dropping. In some communities, prices are falling to levels not seen since 2013.

London officials report that 79 people died in the horrific Glenfell Tower fire last week. PM May is bombarded and overwhelmed with political drama. More world travelers are canceling plans to visit London as the city appears to be spiraling out of control.

The Paris Airshow is underway this week so Boeing and Aibus will receive large orders for airplanes which typically create joy in the airline sector.

Euro 1.1201. Euro/yen 124.50. Dollar/yen 111.13. Pound 1.2788. Euro/pound 0.8760. Mexican peso 17.9111. Canadian dollar 1.3236. Dollar/yuan 6.8146. Indian rupee 64.3963. Aussie dollar 0.7615.

S&P +8. Dow +70. Nasdaq +34. Russell +5. VIX 10.59.

Moody’s downgrades the four large Australian investment banks Commonwealth Bank, Westpac, NAB (National Australian Bank) and ANZ Banking Group, from Aa3 to Aa2. Eight other smaller Aussie banks are downgraded. The news may weigh on Aussie trading tomorrow.

At 3:25 AM EST (8:25 AM London), London police conduct a news conference on the van attack against Muslims leaving the mosque. Officials say the event is being treated as a terrorist attack and no other suspects have been identified or reported to the police. Extra police are deployed around London. PM May is currently chairing an emergency meeting addressing the attack.

Several Muslims at the scene of the attack say the van had other people inside that ran away. However, authorities find no proof of these statements and the city is under camera surveillance which does not support the claims that others were in the van.

European stock indexes and US futures remain steady and positive as a global cascading rally makes one loop around the world from Asia to Europe to the US. DAX +1%. CAC +1%. FTSE +0.666%. MIB +0.4%. IBEX +0.7%. PSI +0.4%.

S&P +7. Dow +75. Nasdaq +33. Russell +3. VIX 10.59. The Nifty is up 40 points, +0.4%, to 9627.

Euro 1.1193. uro/yen 124.38. Dollar/yen 111.12. Pound 1.2794. Euro/pound 0.8749. Mexican peso 17.952. Canadian peso 1.3249. Dollar/yuan 6.8175. Indian rupee 64.39. Aussie dollar 0.7593. USD 97.24. The US dollar index moves sideways through 97.1-97.5 since Thursday. Dollar bulls win above 97.5 while dollar bears win under 97.1.

Treasury yields are; 2-year 1.32%, 5-year 1.74%, 10-year 2.15%, 30-year 2.78%.

At 6 AM, S&P +7. Dow +70. Nasdaq +36. Russell +3. VIX 10.56. Oil and copper move higher supporting the upside move in stocks and futures. WTIC oil gains +0.5% to 44.94. Brent 47.61. Natty 2.95. Gold 1251. Silver 16.64. Copper is up +0.9% to 2.601. The Nifty finishes the day up 70 points, +0.7%, to 9658 continuing the global stock market rally around the world.

VRX bounces +6% in the pre-market a minor rally after a -95% crash over the last two years. Valeant was over 200 and now prints under 13. Activist investor John Paulson joins the board of directors. Pharma and bank stocks are off to a strong start this week.

It is a Merger Monday with EQT buying Rice Energy. RICE catapults 25% higher on the takeover news while EQT sinks -9%. BA rallies +1.5% after unveiling a new 737 MAX 10 airplane at the Paris Airshow.
The aftermath of the Amazon and Whole Foods buyout continues in the food space. KR trades +0.3% higher despite a downgrade from MS. COST is down -1.8% on a DB downgrade.

Clovis reports success with its ovarian cancer drug. CLS jumps +52% as takeover chatter immediately begins. Rival TSRO drops -11%. VRX +3%.

S&P +8. Dow +73. Nasdaq +42. Russell +4. VIX 10.50. DAX +0.8%. CAC +0.9%. FTSE +0.5%. MIB +0.1%. European Stoxx 600 Index +0.666%.

Federal Reserve members are out in force this week jawboning their economic forecasts. At least nine Fed appearances and talks are on tap this week. Dudley kicks off the parade this week and Evans is on tap this evening. Fed Vice Chairman Fischer speaks overnight tonight in Amsterdam. Three Fed speakers will pontificate on Friday.

Fed’s Dudley is speaking in Pittsburgh, Pennsylvania, USA. He says, “Inflation is a little lower than the Fed wants.” Dudley says the economy is “growing reasonably well.” Dudley expects wage inflation to increase (which will send overall inflation higher).

The 10-year yield jumps from 2.13% to 2.17% so Dudley’s words are viewed as hawkish. Dudley and Chair Yellen treat the lack of inflation as a transitory condition and expect inflation to ramp up again in the very near future.

Treasury yields are; 2-year 1.33%, 5-year 1.77%, 10-year 2.18%, 30-year 2.79%. The 2-10 spread is at 85 bips.

S&P +7. Dow +71. Nasdaq +47. Russell +2. VIX 10.53. WTIC 44.83. Brent 47.52. Natty 2.90. Gold 1249. Silver 16.58. Copper 2.60.

At 8:46 AM EST, S&P +8. Dow +75. Nasdaq +47. Russell +3. VIX 10.46. Futures rise as volatility slips lower. DAX +1%. CAC +1%. FTSE +0.6%.

Treasury yields are; 2-year 1.34%, 5-year 1.76%, 10-year 2.17%, 30-year 2.78%. The 2-10 spread is at 85 bips.

At 9:30 AM EST (2:30 PM London), US stocks gap higher. The cascading global stock market rally is in full swing looping around the world. The SPX is up 10 points, +0.4%, to 2443. The Dow gains 54 points, +0.3%, to 21438.17. The HOD is 21457.19 in the opening minutes a new all-time record high for the Dirty Thirty. The COMPQ gains 43 points, +0.7%, to 6195. Traders are buying tech stocks after last week’s drubbing. The RUT gains 6 points, +0.5%, to 1413. Small caps feel love.

VIX 10.49. Market bulls cheer the low volatility. Every day is another day of easy stock market gains with the central bankers maintaining their jack boots on the throat of volatility.

BA gains 0.4% and Airbus is up +2.1% on the Paris Airshow chatter. GE -0.1%. NKE is up +1.2% enjoying all the weekend publicity as the golfers that Nike sponsors win and place in the prestigious US Open golf championship. The Nike swish logo was plastered on television screens all weekend.

Tech and semiconductors are rallying creating joy in the stock market. XLK +1.1%. AAPL +1.9%. FB +1.6%. NFLX +1.1%. GOOGL +1.8%. SOX +1.666%. MU +3.2%. NVDA +2.8%.

WFM rallies +1.6% and AMZN +1.2% after last week’s deal. Amazon prints a new record high at 1017.00. Every day is fun and euphoric joy in the stock market.

The SPX HOD is 2445.78 only 42 pennies away from the all-time record high at 2446.20 on 6/9/17.

At 10 AM, SPX 2446. INDU 21470. COMPQ 6214. RUT 1414. VIX 10.26. Volume is light in the S&P 500 and Dow indexes but above average in the Nasdaq indexes. Tech and banks are driving stocks higher. XLF +0.8%. KRE +0.7%. BAC +1.6%. JPM +1.666%. Pharma and biotech stocks are rallying. PPH +0.7%. IBB +1.1%. CELG +1%. CLVS +43%. TSRO -4%.

WTIC oil 44.94. Brent 47.66. Gold is down 6 dollars to 1248. Silver loses -0.8% to 16.53. Copper is up +0.9% to 2.603.

Stocks thrust higher as the SPX prints a new all-time record high at 2450.24 at 10:06 AM EST. Once the S&P 500 price hit the prior high at 2446.20 the machine buy programs shot price 4 points higher in a heartbeat. The SPX and INDU print record highs today.

During last week, the stock market bottomed each day between 10:30 AM and 11:00 AM. Many algorithms separate the trading day into six 65-minute segments. The first segment is 9:30 AM to 10:35 AM. The second segment is 10:35 AM to 11:40 AM so the machines keep buying late in the first segment and early in the second segment to ride US stocks higher that tend to rally through the European close (into the third segment). The buying occurs earlier than expected today. Equities gapped higher at the opening bell and have not looked back.

The SPX is up +0.666% to 2449. INDU 21490. COMPQ 6222. RUT 1414. VIX 10.10. Market bears have no hope with volatility remaining low. Market bulls are unstoppable celebrating each day of never-ending central banker easy money and politicians promising the world and nothing but blue skies ahead.

European indexes end the session in rally mode. The DAX finishes up +1.1% to 12889 with a HOD at 12913 teasing the record high only a few points away. Global stock market indexes continue printing record highs. France’s CAC gains +0.9% to 5311 providing a positive nod for President Macron and his parliamentary election win.

London’s FTSE ends the session up +0.8% to 7524. Investors are not rattled by terrorism anymore; it has become commonplace. Italy’s MIB gains +0.4% to 21014. The IBEX gains +0.8% to 10849. The PSI is up +1.1% to 5331 as traders ignore the ongoing Portugal wild fire tragedy and instead buy stocks with both hands.

USD 97.44. Euro 1.1158. Dollar/yen 111.42. Pound 1.2738.

Silicon Valley and other CEO’s descend on the Whitehouse for a tech outreach meeting with President Trump. Cybersecurity, trade and jobs are topics of discussion. CEO’s from AAPL (Cook), AMZN (Bezos), MSFT (Nadella), GOOGL, ORCL, INTC, IBM (Rometty), QCOM, and ADBE plan to attend.

SPX 2451. INDU 21501. The Dow is over 21.5K another milestone falls by the wayside. COMPQ 6230. RUT 1419. VIX 10.23. AAPL is up a big +2.6% which pumps the major indexes strongly higher. A select few stocks continue to jerk the overall stock market around to and fro.

Floor traders are drinking and partying like its 1999 toasting glasses with each new record high. The SPX prints a new all-time record high at 2452.25 at 1:10 PM EST. Market commentators and pundits on the business channels keep screaming, “Buy! Buy! Buy!” Nearly every talking head is advising clients and investors to buy tech and bank stocks. Money managers say the slump last week in equities was a great buying opportunity. The future is so bright that you have to wear shades.

A US F-18 Super Hornet military jet shoots down a Syrian SU-22 fighter bomber over Syria. Russia says that US military jets will be targeted as enemy planes if they fly west of the Euphrates. The Middle East tension increases.

WTIC oil 44.42. Brent oil 47.10. Natty 2.91. Gold 1248. Silver 16.52. Copper 2.59.

Treasury yields are; 2-year 1.36%, 5-year 1.79%, 10-year 2.18%, 30-year 2.79%. The yield curve continues to favor flattening rather than steepening but investors keep buying banks with both hands anyway. The 2-10 spread is 82 bips.

The biotech sector explodes higher. IBB gains +2.666% to 300.54 at highs from March and last November. The IBB weekly chart is forming an ascending triangle pattern which would target 340-360 if IBB breaks solidly above the 300 level.

After 2 PM EST, oil begins slip-sliding away to the downside. Analyst reports say oil demand in Asia is decreasing while production is ramping higher in Libya and Nigeria. WTIC oil tumbles -1.3% to 44.17 a new low for this year and at levels not seen since November. Brent oil is down -1% to 46.88. Natty gas is crashing -5% at 2.89. USO drops -1%. XOM -0.9%. CVX -0.8%. NBR +2.3%. NOV -0.7%. XOP is flat. RRC -3.3%. COG -1.6%. CHK -0.9%. XLE -0.6%.

SPX 2450. INDU 21505. COMPQ 6230. RUT 1415. VIX 10.40. Financials are strong. XLF +1%.

Five key Dow winners send the Dirty Thirty index to new record highs. AAPL +2.9%. JPM +2.2%. GS +1.9%. NKE +1.8%. HD +1.4%. There are losers in the Dow despite the big rally. TRV -0.9%. XOM -0.9%. CVX -0.8%. GE -0.7%. IBM -0.3%.

CLVS +47%. MNK +4.7%. MU +4.5%. AMD +4.3%. NTES +5.4%. JD +4.1%. NVDA +3.8%. INCY +3.6%. EMN +3.6%. SNE +3.5%. EW +3.3%.

EQT -9%. RRC -5.1%. TRIP  -4.8%. COG -2.3%. COST -1.7%. MAT -1.4%. TGT -1.7%. BHI -1.3%. LVLT -0.9%. XOM -0.9%.

US stocks end the day in happy rally mode. The SPX gains 20 big points, +0.8%, to 2453.46 a new all-time record closing high and 2453.82 a new all-time high. Stocks are melting-up. The bulls are unstoppable. Floor traders cheer the Power and Glory of the Federal Reserve and other central bankers. They are the modern-day money Gods bestowing riches and wealth on the elite privileged class in society.

The Dow Industrials gain 145 points, +0.7%, to 21528.99 a new all-time record closing high and 21528.99 a new all-time high. Traders are singing, “Happy Days Are Here Again!” TRAN is up +0.666% to 9477 only 162 points from the record high that would confirm the stock market rally from a Dow Theory perspective.

The COMPQ finishes up 87 points, +1.4%, a big gain, to 6239. The NDX rocket launches +1.6% so traders are obviously rushing into the high-flying tech stocks after last week’s selloff. AAPL +2.8%. The RUT gains 11 points, +0.8%, to 1418. VIX 10.37.

After the bell, CMG sinks -2% after pre-announcing higher costs than expected. PLCE is down -1% on news of expanding Children’s Place stores into Asia. CTL drops -1% on news of fraud allegations from a former employee.

President Trump is late to the meeting with tech executives due to news that Otto Warmbier has died. North Korea had imprisoned Warmbier for a few years due to the student tearing down a propaganda poster and just returned him in a comatose state to the United States last week. Warmbier had brain damage likely due to asphyxiation from the sick communist bastards (physical abuse).

North Korea returned the young man because they knew he was a vegetable and likely about to die and did not want this to occur on their soil. President Trump says, “It (North Korea) is a brutal regime” and “we will handle it.”

In the evening, Fed’s Evans speaks at New York University.

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