Thursday, June 15, 2017

THURSDAY 6/15/17; Global Stock Market Indexes at Record Levels; BOJ 2-Day Policy Meeting Begins; WTIC Oil 44-Handle; Brent Oil 46-Handle; BOE Rate Decision; KR; BOBE; Philly Fed Survey; Empire State Mfg Survey; Import and Export Prices; Industrial Production; US Stocks Selloff; Bitcoin Crashes -19%; FNSR

Global all-time and multi-year record highs continue printing for the world’s major stock indexes over the last month. Six of the seven major US stock indexes, SPX, INDU, COMPQ, NDX, RUT and NYA, are at all-time highs with TRAN trying to move higher to confirm the stock market rally from a Dow Theory perspective.

Germany’s DAX, France’s CAC and London’s FTSE are all enjoying record highs. Japan’s NIKK is at record highs not seen since 2015. Australia’s ASX 200 is teasing record highs from nine years ago. South Korea’s KOSPI has gone parabolic at record highs. India’s BSE continues strongly higher printing record highs day after day above 31.1K. The joyous upside stock market party is in full swing.

Nearly nine years of coordinated global central banker money printing has pumped all asset classes into the stratosphere. The stock market bulls are unstoppable and believe the Keynesian easy money party will never end. Central bankers are pulling levels and pushing buttons behind the curtain printing money like madmen. The PBOC continues to burn its reserves on keeping the Shanghai Index above 3K.

The Bank of Japan, led by Governor Kuroda, begins a two-day policy meeting with a rate decision and statement released tomorrow. The Bank of England rate decision and Governor Carney press conference is on tap later this morning.

Asia and Aussie indexes are trading lower after the Federal Reserve rate decision and press conference a few hours ago. The FOMC decided to hike the key rate by 25 basis points as expected, the second hike of the year, however, Fed Chair Yellen is taking rates higher into an economy that is non-inflationary.

Australia’s SPASX200 sinks like a stone down -1% driven lower by energy and materials stocks tumbling more than -2% across the board. Mining and banking stocks are trading lower. Australia jobs numbers are strong with unemployment at a four-year low. 42K new jobs were created trouncing the 10K expected. There is strength in full-time positions. The Aussie dollar strengthens to 0.7625. New Zealand Q1 GDP is soft up +0.5% quarter-on-quarter missing the +0.7% expected and +2.5% year-on-year missing the +2.7% expected.

In Hong Kong, rates are raised in response to the Federal Reserve so property stocks trade lower. New World Development crumbles -2.5% and Hang Lung Group is smacked nearly -4% lower. In South Korea, Samsung Electronics trades higher on news that chip production is increasing.

In the States, FBI special investigator Mueller is expanding his probe and the possibility that President Trump may have interfered in the Flynn investigation. US futures slip on the news. The never-ending Washington, DC, political drama is creating nervousness in markets. S&P -3. Dow -19. Nasdaq -18.

Asia indexes are trading negativity except for Taiwan’s Taiex. India is trading mixed with the Nifty down 8 points to 9610 but the BSE Sensex is up 15 points to 31171. Toshiba loses -1.1%. Tencent -1%. Bellamy’s Australia launches +12% higher.

S&P -5. Dow -27. Nasdaq -28. WTIC oil 44.71. West Texas Crude drops to a low at 44.46. Brent Oil 47.04. Brent prints below 47 down to 46.70 but recovers back above. Natural gas is at 2.94 with inventory data on tap later this morning. Gold 1264. Silver 16.98. Copper 2.5760.

Euro 1.1221. Dollar/yen 109.61. Pound 1.2747. Aussie dollar 0.7613. Dollar/yuan 6.7938. USD 96.90.

US Treasury yields are; 2-year 1.34%, 5-year 1.72%, 10-year 2.13%, 30-year 2.77%. The 2-10 spread is 78.7 basis points falling below 80 bips yesterday. The US yield curve flattens with the short end yields rising while the long end remains relatively anchored.

Global 10-year yields are; Brazil 10.62%, Mexico 6.98%, India 6.45%, Greece 5.68%, Portugal 2.79%, New Zealand 2.70%, Australia 2.35%, US 2.13%, South Korea 2.11%, Singapore 2.03%, Italy 1.93%, Canada 1.49%, Spain 1.36%, Hong Kong 1.19%, UK 0.92%, France 0.58%, Netherlands 0.43%, Japan 0.05%, Switzerland -0.23%. The UK gilt sinks well below 1%. France is under 0.60%. The US and South Korea are at the same yield. Switzerland yield remains negative with investors willing to pay for the privilege to park money in a safe place.

China directs the banks to stop doing business with Anbang an insurance and financial holding company. Six banks heed the government’s warning and stop dealings with Anbang. Chairman Wu Xiaohui, who has sought a business relationship with Jared Kushner (the top advisor and son-in-law of President Trump), is detained by Chinese authorities. Anbang may be involved in nefarious financing deals. China may be the catalyst that takes the entire global financial system down like the US in 2007-2009.

India stocks sink lower. The Nifty is down 26 points, -0.3%, to 9610. The BSE Sensex is down 30 points, -0.1%, to 31171. The Taiex remains positive, barely, up +0.1%. Straits Times sinks -0.6% lower. The Pacific theater is a sea of red computer screens overnight.

The NIKK ends the day down -0.3% to 19831. Topix -0.2%. The ASX 200 finishes down -1.2% to 5763. The happy jobs numbers could not overcome the weakness in energy and resource stocks. The KOSPI loses -0.5% to 2362. The SSEC ekes out a +0.1% gain to 3133. The HSI drops -1.1% to 25584.

European index futures point to a lower open. The Nifty continues trading lower at 9610.

At 3 AM (8 AM London; 9 AM Frankfurt), European indexes begin trading lower. DAX -0.1%. CAC -0.3%. FTSE -0.1%. US futures are lower. A cascading global selloff is developing with weakness from Asia flowing into Europe that is then feeding into the US.

Persimmon sinks -4.6%. Paddy Power -3.9%. Fresnillo -3.1%. Next -3%. Petrofac +2.2%. DB is up +1% after Deutsche Bank releases its reorganization plan.

S&P -7. Dow -35. Nasdaq -31. Russell -6. VIX 11.03. The Nifty is down 23 points to 9595 losing the 9.6K level.

Oil is flat. WTIC 44.67. Brent 47.01. Natural gas 2.95. Gold 1261. Silver is down -1.6% to 16.87. Copper is slipping lower to 2.5735.

Euro 1.1210. Euro/yen 122.91. Dollar/yen 109.64. Pound 1.2739. Euro/pound 0.88. Mexican peso 17.9839. Canadian dollar 1.3238. Dollar/yuan 6.7942. Indian rupee 64.29. Aussie dollar 0.7610. USD 96.93.

Treasury yields are; 2-year 1.35%, 5-year 1.73%, 10-year 2.14%, 30-year 2.77%.

15 minutes into European trading, the mood turns sour. DAX -0.3%. CAC -0.7%. FTSE -0.5%. Miners create the underperformance in the footsie. SMI -0.2%. OMX -0.8%. The SNB leaves its key rate unchanged at -0.75% as expected. The Swiss National Bank is leaving its expansionary monetary policy unchanged and says it will remain active in the Forex market as necessary. The SNB says the Swiss franc remains overvalued.

S&P -9. Dow -53. Nasdaq -39. Russell -8. VIX 11.20.

WTIC oil 44.56. Brent oil 46.88. Natty 2.94. Gold 1262. Silver 16.86. Copper drops -0.4% to 2.5630 making market bears salivate.

Euro 1.1191. Dollar/yen 109.53. Pound 1.2731. Euro/pound 0.879. Mexican peso 17.9666. Canadian dollar 1.3253. Aussie dollar 0.7606.

At 3:50 AM EST (8:50 AM London; 9:50 AM Frankfurt), US futures sink. S&P -11. Dow -64. Nasdaq -53. Russell -11. VIX 11.31.

European indexes drift lower. DAX -0.6%. CAC -1%. FTSE -0.666%. MIB -0.9%. IBEX -1%. PSI -1%. France, Italy, Spain and Portugal stock indexes are each down about -1% and sinking.

US Treasury yields are; 2-year 1.34%, 5-year 1.72%, 10-year 2.13%, 30-year 2.77%.

At 5:24 AM EST, S&P -11. Dow -57. Nasdaq futures sink -56. Russell -10. VIX 11.35. DAX -0.6%. CAC -0.8%. FTSE -0.7%. The Nifty is down 42 points, -0.5%, to 9575.

Euro 1.1175. Dollar/yen 109.72. Pound 1.2696. Euro/pound 0.88. Mexican peso 18.0445. Canadian dollar 1.3258. Aussie dollar 0.7605. USD 97.16.

WTIC oil 44.68. Brent oil 47.04. Natural gas 2.95. Gold 1261. Silver 16.85. Copper 2.5675.

At 6:19 AM EST, S&P -18. Dow -100. Nasdaq -71. Russell -15. VIX 11.66. The morning turns ugly. Gold 1259. Copper 2.5666. The Nifty ends the session down 40 points, -0.4%, to 9578.

DAX -1%. CAC -1.1%. FTSE -0.8%. MIB -0.4%. IBEX -1.2%. PSI -0.5%. SMI -0.5%. OMX -1.2%. Spain and the Nordic states lead lower.

Euro 1.1162. Dollar/yen 109.70. Pound 1.27. Aussie dollar 0.7586. USD 97.29.

Treasury yields are; 2-year 1.35%, 5-year 1.73%, 10-year 2.14%, 30-year 2.78%. The 2-10 spread is at 79 bips. Other 10-year yields are; UK 0.93%, France 0.63%, German bund 0.26%, Japan 0.04%.

At 7 AM EST (12 noon London; 8 PM Tokyo), the Bank of England decides to keep the key rate unchanged at 0.25% maintaining record low interest rates. The vote is 5-3 a surprise split at the BOE. Saunders, McCafferty and Forbes are in favor of a rate hike. Forbes is stepping down from the BOE and she was the lone dissenter last month.

Euro 1.1170. Euro/pound 0.8749. Pound 1.2775. FTSE -1.1%. UK 10-year gilt yield jumps to 1.00%. 2-year yield 0.17%. 30-year 1.72%.

The BOE holds the asset purchase plan at 435 billion pounds ($554 billion). Governor Carney and Treasury chief Philip Hammond plan to speak later today at Mansion House.

European Banking Index -0.4%. Pound 1.2782. UK gilt 0.99%. Turkey’s central bank leaves its key overnight borrowing rate at 7.25%.

S&P -15. Dow -85. Nasdaq -59. Russell -14. VIX 11.57. DAX -0.9%. CAC -1.1%. FTSE -1.1%. OMX -1.1%. Euro 1.1162. Dollar/yen 109.76. Pound 1.279. Aussie dollar 0.7588.

WTIC 44.54. Brent 46.88. Natty 2.95. Gold is down 4 dollars to 1257. Silver slips -1.8% to 16.82. Copper 2.568.

Treasury yields are; 2-year 1.35%, 5-year 1.74%, 10-year 2.15%, 30-year 2.79%.

Pound continues higher to 1.2794. UK gilt yield 1.02%. FTSE -1.2%.

The VIX rises to 11.94 so market bears in the United States are ready to create some downside damage to the stock market this morning.

A few companies are reporting earnings this morning. JBL +2.2%. BOBE +1.4%. KR crashes -9.5%; a clean-up is needed in aisle three. AAPL is down -1.4% on news that Apple’s goal is for the iPhone to be the central hub for the user’s medical information. UTX announces a divvy hike. EAT is downgraded.

WFC sinks -1.2% on more allegations of nefarious banking activities. BAC trades -1.4% lower despite reporting more layoffs. The banks are on pace to get hit at the opening bell with the XLF down -0.9% in the pre-market.

GT drops -2% after lowering guidance. Rubber is a key indicator of the strength of the global economy so the wet blanket news from Goodyear Tire is not a good sign for the economy. Rubber makes the world go round.

S&P -16. Dow -91. Nasdaq -63. Russell -14. VIX 11.81.  The DAX, CAC and FTSE are each down -1.1%.

WTIC oil 44.48. Brent oil 46.85. Gold 1255. Euro 1.1159. Dollar/yen 110.18. Pound 1.2737.

At 8:30 AM, Jobless Claims are down 8K to 237K less than the 243K expected. Claims remain at multi-decade lows. The Philadelphia Fed Business Outlook Survey is 27.6 better than the 26.0 expected but below the prior 38.8. New Orders and Backlogs are encouraging. Hiring is steady. Empire State Mfg Survey is +19.8 far better than the +5.0 expected and prior -1.0 and at a three-year high.

Import Prices are down -0.3% month-on-month below the -0.1% expected and prior revised-lower +0.2%. Year-on-year is up +2.1% below the prior +3.6%. Export Prices are down -0.7% month-on-month far below the +0.1% expected and prior +0.2%. Year-on-year is up +1.4% below the prior +3.2%. Export Prices are a nasty drop month-on-month.

Nike announces plans to cut 2% of its workforce. NKE drops -1.2% which is odd since canning employees is typically bullish for stock prices. Companies that ax workers tell the remaining workers to pick up the slack which increases efficiency and earnings. Sneaker king Nike must have other problems under the hood.

15 minutes before the opening bell, Industrial Production is 0% month-on-month below the +0.2% expected and prior revised-higher +1.1%. Manufacturing is down -0.4% month-on-month missing the +0.2% expected and prior +1.1%. Capacity Utilization Rate is 76.6% versus the 76.8% consensus and prior 76.7%.

At 9:30 AM EST (2:30 PM London), the stock market collapses out of the gate. The SPX gaps down from 2440 to 2422. Whoosh. The Dow Industrials collapse from 21390 to 21275.

The S&P 500 is down 13 points, -0.5%, at 2425. The INDU drops 54 points, -0.3%, to 21320. The Nasdaq Composite collapses 56 points, -0.9%, to 6139. The Russell 2000 loses 9 points, -0.6%, to 1409. Tech and small caps take it on the chin while the blue chips hold up better in the selling event.

NKE trips on its oversized and overpriced shoes losing -2.5%. GOOGL sinks -2.5% on a Cannacord downgrade. SNAP loses -5%.

Euro 1.1151. Euro/yen 123.10. Dollar/yen 110.40. Pound 1.2744. Euro/pound 0.8749. Indian rupee 64.535. Mexican peso 18.1169. Canadian dollar 1.3279. Dollar/yuan 6.8063.

DAX -1.2%. CAC -1%. FTSE -1.1%. OMX -1.2%.

WTIC oil 44.55. Brent oil 46.95. Natural gas 2.94. Gold 1254. Silver 16.71. Copper 2.5665. VIX 11.27.

Treasury yields are; 2-year 1.36%, 5-year 1.75%, 10-year 2.16%, 30-year 2.79%.

SPX 2423. INDU 21323. COMPQ 6130. RUT 1407. The VIX is up +6.66% to 11.36.

At 10 AM, the NAHB Housing Market Index is 67 below the 70 expected and prior revised-lower 69. Homebuilders are a touch less optimistic this month. The housing data is weak. Buyer traffic dips to a 49 number which is under 50 and now in contraction.

The wealthy, that have been made filthy rich by the central bankers over the last few years, have bought all the houses they need while common people cannot afford a home. The huddled masses are straddled with student loans and car debt and are unable to save for a down payment on a home. Average Americans continue navigating through an economy of unemployment and underemployment, working for low wages, as they watch the elite class gain massive wealth each day.

The stock market bottoms for the day at 10:20 AM. Dip-buyers remain anxious to buy equities and they step in to send stocks higher the rest of the day into the closing bell.

In the UK, the Mansion House gathering in London this evening is cancelled so BOE Governor Carney and Chancellor Hammond will not speak. The event is cancelled out of respect for the Grenfell Tower fire tragedy.

The EIA Natural Gas Inventories are a 78 BCF build with inventories rising for the last 11 consecutive weeks. The build is less than 89 BCF expected and well under the 106 BCF build from last week. Natural gas prices will rise on the smaller build than expected. The summer air conditioning season is at hand so demand for natty will increase over the next couple months. Whoa. Natty gas jumps from 2.94 to 3.01.

Technology and consumer discretionary stocks are beaten this morning. XLK -1.1%. XLY -1%. Real estate is a winner. XLRE +0.4%.

SPX 2424. INDU 21319. COMPQ 6133. RUT 1405. VIX 11.43. DAX -1.1%. CAC -0.8%. FTSE -0.9%.

Treasury yields are; 2-year 1.35%, 5-year 1.75%, 10-year 2.15%, 30-year 2.78%.

Homebuilders are whacked lower on the weak housing data. LEN -1.7%. XHB -1%. TOL -1.3%. DHI -1.6%. The FAANG stocks are trading lower taking the Nasdaq indexes lower. Amazon is down -1.666% to 960. Engineering and building supply companies are hit. CBI -6.66%. JCI -1.8%. USG -2.2%.

European indexes end the session lower. The DAX drops -0.9% to 12692. The CAC sinks -0.5% to 5217. The FTSE loses -0.7% to 7419. Italy’s MIB is down -0.5% to 20848. The IBEX drops -0.7% to 10699 under the 50-day MA at 10762. The PSI is down -1% to 5262 sitting on the 20-day MA.

Greece and creditors reach an agreement with the euro finance ministers for a bailout for the financially-troubled island nation.

Bitcoin crashes -19%. Bitcoin falls to 2162 and is now printing 2299. Bitcoin drops $900 after printing the record high above 3K on Sunday. Over $17 billion in market cap is erased off all the cryptocurrencies this week. Those that chased the hype have now received their heads in a basket.

Stocks recover during the afternoon. SPX 2429. INDU 21348. COMPQ 6149. RUT 1409. VIX 11.17. Volatility moves lower intraday which sends stocks higher. Euro 1.1149. Dollar/yen 110.89. Sterling 1.2759.

WTIC 44.53. Brent 46.96. Natural gas is up +4% to 3.05. Gold 1254. Silver 16.73. Copper 2.565.

Treasury yields are; 2-year 1.35%, 5-year 1.76%, 10-year 2.16%, 30-year 2.78%.

SPX 2431. INDU 21355. COMPQ 6161. RUT 1407. VIX 11.02. WTIC oil 44.40. Brent oil 46.89.

HRB +3%. HOG +3%. ADS +2.8%. CHRW +2.4%. PCAR +2%. NLCH cruises +1.4% higher. MNST +1.1%. FAST +1.1%. PAYX +1.1%. GE +1.7%. BA +1.6%. CMI +1.4%. CBS +1.3%. ROK +1.1%. CAT +1.6%. PG +1.1%. TRV +0.8%.

KR crashes -19%. Quick, run out and buy a can of baked beans to help Kroger out. NUE crashes -8% dropping a hot ingot on its foot. WFM loses -6.66%; perhaps consumers are no longer willing to spend their whole paycheck at Whole Foods. MAT is not playing games as it drops -6.66%. FCX -5%. DLTR -3.4%. TGT -4.1%. WMT -1.2%. NKE -3.2%. LRCX -3%. AMD -2.3%. MYL -2.4%. SYMC -2.4%. NBR -4.3%. GS -1.4%. V -1.2%. DD -0.8%.

US stocks end the day lower but well off the lows. The SPX finishes down 5 points, -0.2%, to 2432 bouncing off the 20-day MA at 2418. The Dow drops 15 points, -0.1%, to 21360. The Nasdaq Composite finishes down 29 points, -0.5%, to 6166. The NDX loses -0.5% to 5700. The RUT drops 7 points, -0.5%, to 1410. VIX 10.90. VIX HOD 12.37.

After the bell, FNSR leaps +8% on earnings. BAH crashes -13.3% on news that Booz Allen Hamilton is under government investigation for potential nefarious accounting and financing practices.

The best pro golfers in the world are playing at the US Open Championship, the second major golf tournament of the year, at Erin Hills, Erin, Wisconsin, USA. Rickie Fowler is leading after the first round.

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