Thursday, July 13, 2017

FRIDAY 7/14/17; Global Markets at Record Highs; Japan Industrial Production; US Bank Q2 Earnings Season Begins; C; JPM; WFC; PNC; INFY; CPI (Consumer Price Index); Retail Sales; Industrial Production; Business Inventories; Consumer Sentiment; SPX (S&P 500), INDU (Dow), TRAN (Dow Transports), RUT (Russell 2000) and NYA (NYSE Composite) New All-Time Record Highs

Global stock markets continue printing at or near record highs as the world’s central bankers maintain accommodative monetary policies. India’s BSE Sensex is trading above 32K. South Korea’s KOSPI keeps printing new records. The EEM Emerging Markets ETF is printing at multi-year highs. US stock markets are led higher by the Dow Jones Industrials and Dow Jones Transports printing new all-time highs providing Dow Theory confirmations forecasting far more upside ahead.

The seven major indexes in the United States have all printed record all-time highs and record all-time closing highs across the board during June and July as follows. The S&P 500 (SPX) all-time high is 2453.82 and all-time closing high is 2453.46 both printing on 6/19/17.

The Dow Jones Industrials (Dow; INDU; DJI; the Dirty Thirty; the blue chips) all-time high is 21580.79 on 7/12/17 and all-time closing high at 21553.09 on 7/13/17 (yesterday). The Dow Jones Transportation Index (TRAN; DJT; trannies; transports) all-time high is 9742.76 on 7/13/17 (yesterday) and all-time closing high is 9716.32 on 7/12/17.

The Nasdaq Composite (COMPQ; IXIC; Nazzy; the tech stocks) all-time high is 6341.70 on 6/9/17 and all-time closing high at 6321.76 on 6/8/17. The Nasdaq 100 (NDX; the high-flying tech stocks; the index most impacted by the FAANG stocks (FB, AAPL, AMZN, NFLX, GOOGL)) all-time high is 5897.69 on 6/9/17 and 5885.30 on 6/8/17.

The Russell 2000 (RUT; small caps; the Russell) all-time high is 1433.79 on 6/9/17 and 1426.68 on 7/3/17. The NYSE Composite (NYA) all-time high is 11869.82 on 7/3/17 and 11844.79 on 7/13/17 (yesterday). How long will the party continue? The technical analysis on the monthly charts for the high-flying AAPL and NFLX stocks indicate that a major multi-year top is likely at hand. The party continues as long as the central bankers keep printing money and this is accepted by market participants as a good thing.

S&P +1. Dow +4. Nasdaq +4. Euro 1.1393. Dollar/yen 113.42. Pound 1.2942. Dollar/yuan 6.7835. Aussie dollar 0.7736.

WTIC oil 46.02. Brent oil 48.36. Natty 2.97. Gold 1217. Silver 15.64. Copper 2.666. Aluminum prices rally +1.1%. Iron ore prices sink -1.5%. President Trump threatens steel tariffs and quotas against China yesterday.

Treasury yields are; 2-year 1.37%, 5-year 1.90%, 10-year 2.35%, 30-year 2.92%. The 2-10 spread is 98 basis points.

Aussie and Asia stocks begin trading higher. NIKK +0.1%. Topix +0.3%. Fast Retailing quickly loses -4%. SPASX200 +0.4%. KOSPI +0.5%.

Japan Industrial Production for May drops -3.6% month-on-month but is up +6.5% on-year. Singapore Q2 GDP is up +0.4% quarter-on-quarter missing the +1.1% expected by a mile. Year-on-year is up +2.5% missing the +2.8% forecast. Sing dollar 1.3734.

The National Work Conference begins in China a forum that promotes the economy and addresses business concerns. The Beijing communist leadership is focused on key problems in the financial system including the rapid pace of credit growth, the housing bubble and the shadow banking system. The shadow banking system has tripled over the last five years which creates great concern to the commie leadership. The increased use of risky investment products by common citizens is also creating worries about the stability of the financial system.

Nobel laureate, writer, activist and political prisoner Liu Xiaobo dies like a dog at 61 years old in a Chinese prison. Liu has lobbied for non-violent resistance against the China’s communist regime all his life. Liu had spent one-quarter of his life in prison. China is a communist nation. When the Beijing leaders tell you to jump, you ask how high? If you do not jump, then you receive a bullet in the side of your head and your family is charged the cost of the bullet. This is China.

Liu died of multiple organ failure and liver cancer. President Xi does not acknowledge Liu’s passing. Of course he does not; he is a communist and does not want to show respect for someone that fights for human rights and decency.

Relations between the Philippines and China are tested as President Duterte considers drilling for oil and gas in the South China Sea. Several proposed drilling locations are in the disputed island areas that China is claiming. Duterte receives the backing of the people on this issue as Filipinos openly protest China’s aggressive takeover of disputed islands in the South China Sea.

China is center stage these days also dealing with the North Korea issue. President Trump is obviously unhappy with President Xi dragging his feet with the North Korea problem and threatens steel tariffs and quotas against China. The communists are busy dealing with a shaky economy and potential housing bubble. At the same time all this drama is occurring in China, President Xi must exude power and confidence in front of the 19th Party Congress in three months. The heat in the Chinese kitchen is becoming hotter each day.

India stocks are trading lower. The Nifty is down 17 points to 9874. The BSE is down 39 points, -0.1%, at 31998 back under the 32K level that was breached yesterday. India Wholesale Prices are up +0.9% in June missing the +1.4% expected. The world remains mired in disinflation and deflation despite central bankers touting hawkishness. Inflation is Godot.

USD 95.74. Dollar/yen 113.41. Aussie dollar rises to 0.7740 this week. WTIC oil 46.11. Brent oil 48.45.

In South Korea, Hyundai gains +2.4% and Kia +1%. Hyundai employees are considering a strike but perhaps this will be averted judging by the move in the stock price. Asia chip king Taiwan Semi sinks -0.7% despite guiding revenue higher. European index futures are flat.

The trading week in the Pacific theater ends on an upbeat. Computer screens are green into the weekend. The NIKK ends the session up +0.1% to 20119. The SPASX200 gains +0.5% to 5765. The KOSPI finishes up +0.2% at 2415. HOD is 2421 so the Kospi remains at record highs. The SSEC gains +0.1% to 3222. The HSI finishes up +0.1% to 26359.

For the week, Japan’s Nikkei Index gains +1%. Australia’s ASX 200 finishes the week up +1.1%. South Korea’s KOSPI gains +1.4%. China’s Shanghai Index ekes out a tiny +0.1% gain this week. The PBOC is very skilled at manipulating the Chinese markets. Hong Kong’s Hang Seng Index is the big winner on the week leaping +4.2% higher. The HSI prints the best week of the year thus far.

At 3:00 AM EST (8 AM London; 9 AM Frankfurt), European indexes begin trading flat as the futures indicate. DAX +0.1%. CAC +0.1%. FTSE -0.1%. Roche +0.5%. Novo Nordisk +0.666%. Sanofi -0.4%. AstraZeneca -2.3%. Lloyds +0.8%. HSBC -0.2%. Daimler -0.5%. Hays +1.2%. Biotech company Morphosys Ag gains +9% on drug approval. The Sky is falling -2%.

European Central Bank President Draghi announces plans to attend the Jackson Hole Economic Forum in Wyoming, USA, in late August. The last time Draghi attended the event was in 2014. The world’s central bankers, Nobel laureates and other economic bigwigs meet once per year in this very rural, remote and scenic setting to discuss markets, economics and policy.

Draghi becomes the main attraction for the Jackson Hole event on 8/24/17 through 8/26/17 and will likely speak Saturday as is the tradition for the key speech. The ECB chief may be signaling that he is confident in the European economic recovery and plans to pare back the stimulus program. Two weeks after Jackson Hole in early September, Draghi will announce the ECB’s plan for monetary policy going forward. Inflation, or actually the lack thereof, is the major concern of all global central bankers and will likely become the key focus at Jackson Hole.

The UK publically acknowledges that a break-up fee will have to be paid to the European Union for Brexit. The Brexit bill will likely total somewhere between $50 billion and $120 billion. UK gilt 1.27%.

Sadly, recent data shows that Italy’s poor have tripled over the last decade. At the same time, the global central bankers have made the privileged elite class, that own large stock portfolios, filthy rich with their obscene Keynesian money printing. The huddled masses continue buying pitchforks and torches preparing for future social unrest that will likely begin when the world slips into recession. Italy 10-year yield 2.28%.

The same situation occurs in America over the last nine years. The divide between rich and poor in the United States is the widest in five decades (and the 1960’s and 1970’s were filled with social unrest, protests, demonstrations and riots). The Federal Reserve is focused on taking care of the investment banks and the elite privileged class in America.

The wealthy bankers, politicians and corporate executives have amassed huge profits courtesy of the easy money policies from the Federal Reserve and other global central bankers. The FOMC members perform the bidding of the investment banks since they are rewarded with huge kickbacks once they leave public office. This is the way the crony capitalism system works in America.

US Treasury yields are; 2-year 1.36%, 5-year 1.88%, 10-year 2.34%, 30-year 2.91%.

S&P -2. Dow -5. Nasdaq -5. Russell -2. VIX 10.02. The Nifty is down 16 points, -0.2%, at 9876.

Euro 1.1417. Euro/yen 129.26. Dollar/yen 113.22. Pound 1.2962. Euro/pound 0.8808. Mexican peso 17.701. Canadian dollar 1.2731. Dollar/yuan 6.7796. Indian rupee 64.453. Aussie dollar 0.7754.

WTIC oil 45.90. Brent oil 48.27. Natty 2.95. Gold 1218. Silver 15.62. Copper 2.669.

At 4 AM EST (10 AM Paris), Presidents Macron and Trump attend the Bastille Day parade with their wives. Only the French know how to put on such a flamboyant and colorful show. Humorously, the French enjoy a day of music, fanfare and relaxation smoking cigarettes, drinking wine and eating baguette; kind of like every other day.

S&P -3. Dow -14. Nasdaq -4. Russell -3. VIX 10.10. Oil continues losing ground down -0.5%. WTIC oil 45.86. Brent oil 48.22.

At 5 AM, markets are steady. S&P -3. VIX 10.09. DAX -0.1%. CAC +0.1%. FTSE -0.3%. MIB flat. IBEX +0.3%. Portugal’s PSI sinks -0.4% to 5300. SMI +0.2%. OMX +0.2%. India trading is moving into the final stretch with the Nifty down 21 points at 9870.

Euro 1.1411. Dollar/yen 113.20. Pound 1.2963. Mexican peso 17.666. Canadian dollar 1.2734. Aussie dollar 0.7757. USD 95.71.

Treasury yields are flat; 2-year 1.36%, 5-year 1.89%, 10-year 2.34%, 30-year 2.91%.

Oil recovers in choppy trading. WTIC oil 46.14. Brent oil 48.54. Natty 2.98. Gold 1219. Silver 15.64. Copper 2.669.

At 5:43 AM EST, S&P -3. Dow -15. Nassdaq -5. Russell -2. VIX 10.12. The DAX, CAC and FTSE each slip negative on the session. WTIC oil is up +0.666% to 46.39. Brent oil 48.77.

Treasury yields are; 2-year 1.36%, 5-year 1.88%, 10-year 2.34%, 30-year 2.91%. Global 10-year yields are; Brazil 10.33%, Mexico 6.82%, India 6.46%, Greece 5.22%, Portugal 3.07%, Australia 2.71%, US 2.34%, Italy 2.26%, South Korea 2.24%, Singapore 2.08%, Canada 1.91%, Spain 1.63%, Hong Kong 1.45%, UK 1.28%, France 0.84%, Netherlands 0.70%, Germany 0.58%, Japan 0.07%, Switzerland -0.03%.

On Bloomberg television, commentator Tom Keene is joking and laughing at anyone that is in cash insinuating that these people are fools that are missing out on the stock market rally. The bullishness, market euphoria and complacency are verified by the VIX below 10, the low CPC and CPCE put/call ratios and the elevated NYMO. Every day is a party.

Blackrock strategist Kate Moore, always a raging bull, says the bull market is unloved. She claims that people do not understand volatility (VIX) saying, “We do not see (the markets) losing the low volatility regime.” Moore proclaims, “Valuations do not look as extended as they could be” and equities “have really good prospects” going forward.

Moore says even if volatility spikes it will be a short-lived event and there will be not be any sustained multi-month or quarter move for volatility. Everything is sunshine and roses. Moore is cheerleading the stock market expecting low volatility to remain in place and equities to continue moving higher.

The India trading session ends with the Nifty down 5 points to 9886. The BSE Sensex finishes the day down -0.1% to 32021 holding on to the 32K level breached this week. The BSE is up +0.6% this week.

At 6:30 AM EST, S&P -2. Dow -11. Nasdaq -3. Russell -1. VIX 10.10. Euro 1.1416. Dollar/yen 113.20. Pound 1.2965. USD 95.68. WTIC oil 46.34. Brent 48.71.

The bank earnings parade begins today with Citigroup, JP Morgan, Wells Fargo and PNC reporting. JPM begins the party beating as usual and JPM pops +1.3% higher. Trading revenue is not as strong as expected and JP Morgan appears hesitant on future guidance. The initial pop fades away and JPM is trading down -1%.

Citigroup beats on the top and bottom lines but C is slapped -0.9% lower. WFC is down -1.4% on the Wells Fargo release. PNC drops -1.3% on earnings. Four important banks report earnings and each one trades lower. Top line revenue growth at the money center banks is lackluster.

S&P -1. Dow -2. Nasdaq +4. Russell -1. VIX 10.04.

DAX +0.1%. CAC +0.1%. FTSE -0.3%. Euro 1.1419. Euro/yen 129.10. Dollar/yen 113.06. Pound 1.2980. Euro/pound 0.8797. Mexican peso 17.6605. Canadian dollar 1.2728. Aussie dollar 0.7761. USD 95.64.

WTIC oil 46.44. Brent oil 48.81. Natural gas 2.95. Gold 1222. Silver 15.75. Copper 2.68.

Treasury yields are; 2-year 1.36%, 5-year 1.88%, 10-year 2.33%, 30-year 2.91%.

Fed’s Kaplan says wage growth pressures will increase going forward. Kaplan touts the ‘transitory inflation’ line but that is becoming less convincing with each passing day. The CPI data hits shortly which will provide another read on inflation. The Federal Reserve believes that the lack of inflation is only temporary and it should pick up quickly in the near future.

Kaplan says he wants to see the U-6 unemployment rate at the 8.1% level to become confident that the recovery is firm and sustaining. He considers this level to reflect full employment. The U-6 rate currently sits at 8.6%.

FHN beats on earnings. INFY -0.2%. Arconic, that made the faulty exterior building tiles for the doomed Grenfell Tower in London, will be mired in lawsuits going forward. ARNC sinks -1.1%. CYBR crashes -18% after lowering guidance; CyberArk Software receives a pre-announcement season bludgeoning.

Fiat Chrysler recalls 1.33 million vehicles due to a developing emissions scandal. FCAU drops -0.8% giving back one-quarter of yesterday’s +4% rally. SNAP loses -1.5% on a Cowen downgrade. GPS is up +3.2% on a JPM upgrade. WMT is up +1.666% on a GS upgrade. ULTA is looking pretty up +3.5%.

At 8:30 AM, a huge data dump begins this morning now through 10 AM. CPI is flat at 0% month-on-month below the +0.1% expected and above the prior -0.1%. Year-on-year is up +1.6% versus the +1.7% expected and prior +1.9%. There is no inflation. Less food and energy is up +0.1% month-on-month less than the +0.2% expected and matching the prior +0.1%. Year-on-year  is up +1.7% matching the expectation and prior +1.7%.

The CPI data is weaker for four consecutive months. The Federal Reserve says the lack of inflation is transitory. This defines transitory as at least four or five months of time. Perhaps Fed Chair Yellen is wrong about the lack of inflation. Perhaps disinflation and deflation have a structural hold on the global economy. Someone needs to ask the chair how long is transitory? Comically, when does transitory turn into a trend?

Retail Sales are a disappointment down -0.2% month-on-month below the +0.1% expected and prior revised-higher -0.1%. Less autos is down -0.2% missing the +0.2% expected but above the prior -0.3%. Less autos and gas is down -0.1% far below the +0.4% expected and below the prior 0%. The Control Group is -0.1% below the +0.4% expected and prior 0%.

S&P +1. Dow +7. Nasdaq +13. Russell flat. VIX 10.00. Oil rallies as the dollar drops. USD 95.39. WTIC 46.62. Brent oil 48.92. Gold jumps 11 dollars, +1%, to 1229. Silver is up +1.4% to 15.91. Copper 2.6775.

Euro 1.1437. Dollar/yen 112.58. Pound 1.299. The Mexican peso pair drops to 17.58 reflecting a stronger peso. Canadian dollar 1.2699.

Treasury yields are dropping after the data; 2-year 1.33%, 5-year 1.84%, 10-year 2.30%, 30-year 2.89%.

S&P +3. Dow +14. Nasdaq +27. Russell flat. VIX 9.87. The central bankers maintain their jack boots on the throat of volatility. The Fed did not receive the inflation data they expected so rates will stay low for longer. The easy money will continue flowing like wine on a Saturday night so futures move higher. The weakness in the banks after the earnings releases is quickly and easily papered-over. The central bankers are the market. PNC -0.7%. C -0.5%. WFC -1.6%. JPM -1.666%.

Treasury yields are; 2-year 1.32%, 5-year 1.82%, 10-year 2.28%, 30-year 2.87%. The 2-10 spread is at 96 bips so the yield curve remains consistent as yields across all durations are moving relatively in sync. Yields drop about 5 basis points from early this morning. The lower rates will send the interest rate sensitive stocks like utilities, staples and REIT’s higher.

At 9:15 AM, Industrial Production is up +0.4% versus the +0.3% expected and the prior revised-higher +0.1%. Manufacturing is up +0.2% matching expectations and above the prior -0.4%. Capacity Utilization Rate is 76.6% below the 76.8% expected and above the prior revised-lower 76.4%. Mining activity is strong but overall the economic data is very disappointing for the market bulls.

At 9:30 AM EST, US stocks begin trading flat. SPX 2448. INDU 21537. The COMPQ gains 16 points, +0.3%, to 6291. RUT 1424. VIX 10.10.

Banks are weak as the Q2 earnings season is officially underway. JPM -2.6%. JP Morgan CEO Jamie Dimon goes off on a rant against the Washington, DC, bureaucracy. Dimon says he is tired of “listening to the stupid sh*t” and he wants the politicians to work on tax reform and other legislation that can help the economy. In response to a question concerning the disappointment in the JPM trading revenue last quarter, he blames the weather. Humorously, the retail sector always blames the weather if sales are light; now the banking industry is adopting this excuse. C -2%. WFC -2.3%. PNC -1.5%. XLF -1.7%. KRE -1.8%. BAC -2.7%. MS -2%. GS -1.9%.

REIT’s, utilities and consumer staples run higher because rates move lower. VNO +0.8%. SPG +0.8%. XLU +0.8%. XLP 0.5%.

FCAU -0.8%. XLK +0.3%. SOX +0.6%. NVDA +1.2%. XRT +0.3%. WMT +1.3%. XLE +0.3%. XOM +0.5%. SLB +0.4%.

The US dollar index sinks to 95.27 the low for the year which pumps metal and oil prices higher. WTIC 46.42. Brent 48.75. Natty 2.96. Gold 1231.

Treasury yields are; 2-year 1.36%, 5-year 1.83%, 10-year 2.29%, 30-year 2.88%. German bund 0.57%.

SPX 2452. INDU 21573. COMPQ 6288. RUT 1427. VIX 9.94.

At 10 AM, Business Inventories are up +0.3% matching expectations and above the prior -0.2%. Auto inventories remain robust.

Consumer Sentiment is 93.1 below the prior and expected 95.1. The Expectations index is down to 80.2 the lowest since before the November election. This morning’s data is disappointing and indicate a slowing economy. Inflation remains on a milk carton (missing).

SPX 2451. INDU 21557. COMPQ 6284. RUT 1426. VIX 9.91. The NYA is above 11870 a new all-time record high for the NYSE Composite. Other major indexes such as the S&P 500, Dow Industrials, Russell 2000 and Dow Transports (TRAN) are a hair away from all-time record highs.

SPX 2450. INDU 21565. COMPQ 6294. RUT 1428. VIX 9.87. JPM -1.3%. C -0.9%. WFC -1.9%. PNC -0.6%.

European indexes end the session flat to lower. The DAX loses -0.1% to 12632. France’s CAC is dead flat at 5235. The FTSE finishes down -0.5% to 7378. The MIB drops -0.1% to 21492. The IBEX ends flat at 10655. The PSI loses -0.3% to 5303.

For the week, Germany’s DAX gains +1.9%. The CAC ends the week up +1.8%. London’s FTSE is up +0.4% this week. Italy’s MIB +2.3%. Spain’s IBEX gains +1.6% this week. Portugal’s PSI is the big winner on the week up +3.2%. Europe is joyous this week.

SPX 2453. INDU 21571. COMPQ 6293. RUT 1428. VIX 9.93. Market bears do not have a chance with the VIX under 10. WTIC 46.50. Brent 48.85.

Treasury yields are; 2-year 1.36%, 5-year 1.86%, 10-year 2.33%, 30-year 2.92%. The Fed Funds futures indicate only a 13% chance for a rate hike in August, 26% chance in September and less than a 50% chance in December at year end. The dovish Federal Reserve plans to remain accommodative so stocks rally and the VIX is under 10.

USD 95.24. LOD 95.18. The US dollar index is down to levels not seen since September 2016. Humorously, at the start of this year, over 90% of Wall Street analysts and Forex traders proclaimed that the USD would punch above the 103-104 area and run to 110, 115 and a couple analysts called out 120. As always happens when the boat is fully loaded to one side, the dollar went the other way now threatening a 94-handle.

The Dow Jones Industrials HOD is 21580.68 falling 11 cents short of overtaking the all-time high at 21580.79 from 7/12/17 (Wednesday). If the market bulls are strong they should print a new record high today.

At 12:28 PM EST, the SPX prints 2453.85 a new all-time high taking out the 6/19/17 high by 3 cents. The market bulls are unstoppable. VIX 9.86.

At 12:39 PM, the Dow prints above 21581 a new all-time high. The bulls are drinking Fed wine and partying into the weekend buying stocks at the ask.

At 1 PM, the BHI Oil Rig Count is up 2 rigs to 765 rigs. WTIC oil is up +0.9% at 46.50. Brent oil is up +0.9% to 48.87. Natty 2.98. Gold 1228. Silver 15.92. Copper 2.69.

The SPX is up 9 points at 2457. INDU gains 74 points to 21627. Stocks are melting-up. COMPQ gains 27 points to 6302. The RUT is up 3 points at 1428. VIX 9.75. Volatility is at multi-decade lows pumping stocks higher.

Euro 1.1460. Euro/yen 129.06. Dollar/yen 112.61. Pound 1.3073. Sterling is at a nine-month high. Euro/pound 0.8766. Indian rupee 64.4475. Mexican peso 17.5686. Canadian dollar 1.2651. Dollar/yuan 6.7753.

Treasury yields are; 2-year 1.35%, 5-year 1.86%, 10-year 2.32%, 30-year 2.91%.

President Trump and First Lady Melania are flying back to the United States from France. The Trump’s will spend a couple days in New Jersey then fly back to the Whitehouse.

Sprint sprints higher on deal chatter. S +2.5%. Rumors hit trading floors that Buffett met with Sprint and may invest in the telecom. S jumps +4% as the news hits the wires. TEVA collapses -4.2% and AZN leaps +4% on news that CEO Pascal Soriot will remain at AstraZeneca and not leave to join Teva.

At 3 PM, stocks are ramping higher. Bulls are buying stocks with reckless abandon and ignoring the need to buy any downside protection. SPX 2459. INDU 21631. COMPQ 6312. RUT 1431. VIX 9.69.

WTIC 46.56. Brent oil 48.95. Gold 1229. Silver gains +1.6% to 15.95. Copper gains +1.2% to 2.693. USD 95.11.

Banks are weak in today’s up tape with financials the only negative S&P sector. Real estate and utilities sectors are strong. XLF -0.5%. C -0.5%. JM -1%. WFC -1.2%. KRE -0.6%. PNC -0.3%. BAC -1.7%. MET -0.7%. GS -0.8%. XLRE +1%. XLU +0.5%. XLV +0.666%.

Tech leads higher. XLK +0.9%. NTAP +5.5%. STX +3.1%. AMD +2.9%. NVDA +2.7%. MU +2.1%. HPQ +1.9%. TXN +1.8%. MSFT +1.4%. INTC +1.3%. TWTR +1.666%. NRG +4.7%. GGP +2.9%. CTRP +2.4%. TSCO +2.3%. BA +1.1%. WMT +1.7%.

FFIV -3.5%. WYNN -3.4%. XLNX -2.4%. SYMC -0.9%. HRB -2.3%. CME -2.3%. NCLH +1.4%. PYPL -1.3%.

US stocks finish the session higher. The weak economic data and weak banks harpoon the idea of rate hikes ahead. The Federal Reserve will delay rate hikes since inflation is nowhere in sight. The central banker Keynesian money printing continues so stocks are pumped higher and the wealthy become more filthy rich each day. Isn’t America great! All Hail the Power and Glory of Fed Chair Yellen and the Federal Reserve! Rejoice in the glorious Fed light and kneel before the modern-day money Gods! The central bankers are, and remain, the market.

The SPX finishes the day rallying 11 points, +0.5%, to 2459.27 a new all-time closing high and 2463.54 a new all-time high. The Dow Industrials end up 85 points, +0.4%, to 21637.74 a new all-time closing high and 21681.53 a new all-time high. The Dow Transports gain +0.4% to 9742.76 a new all-time closing high and 9763.66 a new all-time high. The Dow Theory confirmations continue. Everything is going the bull’s way.

The COMPQ gains 38 points, +0.6%, to 6312 about 10 points shy of a record closing high. The HOD is 6322 about 20 points from an all-time high for the Nazzy Composite. The NDX gains 45 points, +0.8%, to 5838 about 50 points shy of a record closing high. The HOD is 5845 about 53 points from an all-time high for the Nazzy 100.

The Russell 2000 finishes up 3 points, +0.2%, to 1428.82 a new all-time closing high. The HOD is 1433 within 1 point of a new all-time high. The NYA is up 53 points, +0.4%, to 11897.33 a new all-time closing high and 11918.17 a new all-time high. It is interesting that the indexes pertaining to tech and small caps do not print all-time highs but the indexes pertaining to the broad market, blue chips and trannies do print all-time highs. Ideally, for a strong stock market, the expectation would be for the tech and small caps to lead higher.

The VIX finishes at 9.51. Wow. The VIX is at its lowest numbers in history. Traders are the most complacent and fearless in stock market history. The expectation is for the party to continue and even if a big selloff occurs no one cares since the central bankers will step in and pump equities higher to make sure the wealthy become wealthier.

For the week, the S&P 500 rallies +1.4%. INDU +1%. TRAN +0.5%. COMPQ +2.6%. NDX +3.2%. RUT +0.9%. The NYA finishes up +1.2% this week. On the weekly basis, tech outperforms led by the chips. Biotech stocks also drive the Nazzy indexes higher. Small caps lag as the US dollar index trails lower.

The sectors are higher across the board this week sans the financials. The semiconductors, tech stocks, energy stocks, basis materials, real estate and biotech stocks are the big winners. SOX +4.7%. XLK +3.4%. XLE +2.2%. XLB +2.1%. XLRE +1.6%. IBB +1.3%. XLI +1.2%. XLV +1.1. XLY +1.1%. XLU +0.8%. XHB +0.5%. XRT +0.5%. XLP +0.4%. XLF -0.6%. Banks are the skunks at the garden party.

The high-flying ‘Elite 18’ stocks that have accounted for a major portion of the broad stock market gains over the last few years finish the week higher except for Nike, Ulta and Under Armour. AAPL +3.4%. AMZN +2.4%. CELG +1.5%. CRM +2.4%. FB +5.6%. GE +2.4%. GOOGL +3.8%. HD +0.4%. MA +3.9%. MSFT +4.8%. NFLX +7.3%. NKE flat. NVDA +12.4%. PCLN +1.7%. SBUX +1.2%. ULTA -5.5%. UAA -1.2%. V +3.2%. Facebook and Mr Sofy print record highs.

Netflix catapults over +7% higher this week. Apple prints big gains. Interestingly, the NFLX and AAPL monthly chart indicators are negatively diverging hinting that these two tech heavyweights may be printing a multi-year top during the coming days and weeks. The banks may be weak after the earnings releases this morning but the credit card companies MasterCard and Visa are joyous this week. Even the piece of garbage General Electric catches a bid this week.

Traders shun the at-leisure sportswear makers this week with NKE and UAA trading lower but the ladies love their yoga pants with LULU rallying +2.5% this week. Ulta Beauty finishes the week ugly despite today’s pretty +3% rally.

WTIC oil gains +5.2% this week to 46.54. Brent oil gains +3.666% to 48.42. Natty gas, NATGAS, gains +4.1% to 2.98. Gold is up +1.5% to 1228 sitting at the 200-week MA resistance at 1232. Gold will bounce or die from this 1228-1232 level on Monday. Silver is up +3.3% this week to 15.93. Copper shines +1.666% higher to 2.69 above its critical 200-week MA support at 2.66. Copper may continue to wrestle at this 2.66-ish level. Higher semiconductors and copper, along with lower volatility, create a melt-up in the stock market today.

The 10-year Treasury yield is at 2.32% moving through a range of 2.27% to 2.39% this week. Treasury yields lose 5 to 6 basis points today across all durations. The TNX sits on the 20-week MA support at 2.32% so yield will bounce or die from this level early next week. The 20, 50 and 200-day MA’s are all at 2.26%-2.27% so yield may want to come back down to test this confluence and make a bounce or die decision from this level at some point next week.

Treasury yields are; 2-year 1.36%, 5-year 1.87%, 10-year 2.33%, 30-year 2.92%. German bund 0.59%. Japan 10-year yield 0.076%. UK gilt 1.309%. France 10-year yield 0.86%.

After the closing bell, David Einhorn’s Greenlight Capital reports negative returns to his clients. The hedge fund lost -4% in Q2. Einhorn calls the quarter a “head-scratcher.” AER, Bayer, CNX, GM and MYL are longs held by Greenlilght while AMZN, NFLX, TSLA and CAT are shorts. The short plays gave Einhorn a wedgie during Q2.

The Donald Trump, Jr, Russia meeting may become more of a full-fledged scandal. Another Russian individual was at the meeting that Trump, Jr, attended where he was supposed to receive damaging negative information on Hillary Clinton. Trump, Jr, did not disclose that this other individual was at the meeting and is less than forthcoming with details concerning the meeting.

Don Jr’s story changes slightly each time a new fact is uncovered. The slow peeling back of the onion layers may eventually cause Donald, Jr, to cry. President Trump appears insulated from the problem although he obviously does not want to see his son sink deeper into trouble.

Later in the evening, a couple other people are identified as attending the Donald Trump, Jr, meeting one is reportedly a Russia intelligence agent. Don Jr will have to change his story again.

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