Saturday, January 4, 2014
Keystone's Daily Chronology of Global Markets and World Economics and Path Forward 1/4/14
On Friday, 12/27/13, the dollar/yen touches 105. Japan inflation is 1.2%, higher than forecast, working towards the 2% target. Analysts claim Abenomics is a huge success citing the NIKK gains, stronger factory output and increased retail sales. NIKK finishes flat overnight but prints another new 6-year high at 16179. The SSEC is up +1.4%. The Turkish lira hits a record low against the dollar at 2.1645. Turkey ISE 100 drops -4%. Investors are dumping Turkey’s bonds as the unrest continues. Bombings in Lebanon (the former Lebanon finance minister is murdered) and Egypt, and attacks against Christians, further destabilize the Middle East and Northern Africa regions. Crude oil hits 3-week highs due to the violence. WTIC oil is near 100 and Brent oil is at 112. The 10-year yield is 3.0% and 2-year yield climbs to 0.42% which provides an attractive 2-10 spread of 258 points and higher for the banks, if it holds. The pound prints another record high at 1.6486. The UK 10-year yield moves above 3%. The euro hits 1.38 the highest level since November 2011. European markets are up from +0.6% to +0.9%. The France and Germany economies continue to diverge. France teeters on recession while the DAX prints another new all-time high above 9565. The 2014 predictions game continues on Wall Street with universal agreement among analysts and traders that stocks will continue higher in 2014. Investors Intelligent Sentiment shows bulls at a euphoric near 60% level (59.6%) and bears at an uber low near 14% level (14.1%). The bull-bear spread has never been this wide since the 1980’s ahead of the 1987 market crash. Only one-fourth of financial advisors expect a market correction. This data verifies the low VIX and CPC and CPCE put/call ratios signaling trader complacency and a significant market top in place. There are no bears remaining in the markets. The bulls are selling stock to other bulls pushing markets higher in thin volume. It is a fun party until the music stops. The prudent move is to cash out of all long positions and to sit in cash for a month or three to see if a serious negative market event occurs in the near future. S&P futures are flat. Copper is lower but experiences a strong positive +10% gain from 3.10 to 3.40 over the last month. GM recalls over 1.5 million China automobiles due to a faulty fuel pump bracket. DAL honors low fares to customers that took advantage of a computer glitch. TXT, maker of Cessna airplanes, buys Beechcraft for $1.4 billion in cash. WTIC crude oil tops 100. Equities pop higher at the opening bell. The 5-year yield is above 1.75%. WTIC crude oil is 100.58 and the higher oil sends the airline stocks down -2% to -3% across the board. Trannies (TRAN) are lower as well on higher oil. Equities move flat into the lunch hour. A Federal judge rules that the NSA cell phone metadata collection is legal contradicting the Federal judge from last week that said these NSA spying was likely unconstitutional. In other words, George Orwell’s 1984 world is here to stay. Realize that all your communications on any electronic device including cell phones, tablets, desktops and tablets are monitored, recorded and archived forever. The mess is likely headed to the Supreme Court. Equities remain flat all day and end slightly negative. The SPX prints a new all-time intraday high at 1844.89 but not a new all-time closing high. The Dow prints a new all-time intraday high at 16529.01 but not a new all-time closing high. The Nasdaq leads lower losing -0.5% but prints a new 13-year intraday high at 4175.36. TWTR collapses -13%. For the week, the SPX gains +1.3%, the Dow +1.6%, Nasdaq +1.3% and RUT +1.3%. Interestingly, tech and small caps are not leading higher and also the broad indexes are up about the same percentage across the board hinting at steady programmed trading from the robots. On CNBC business television, Josh Brown, The Reformed Broker, advises folks to go long and “embrace stocks.” He says “the economy is doing better; embrace better economic times.” He also recommends shorting gold and says BAC is the best bank to own and should be over 20. Anthony Scaramucci, SkyBridge Capital, says buy the broad market as well and FDX should be 175. Strategist David Darst, MS, repeats Morgan Stanley’s call for a SPX target of 2014 in 2014. The rampant bullishness continues in the markets. The CPC put/call ratio prints a 3-year low this week verifying the complacency and complete lack of fear in the markets. Case-Shiller’s PE is 24 which is the level where significant market pull backs occur.
On Saturday, 12/28/13, extended unemployment benefits end for 1.3 million Americans. Benefits return to their base 26-week period. Many of these folks will go on Welfare or disability. The loss of benefits should hurt retail and food sales (WMT, DG, SVU, KR, etc…) since the checks immediately flow into the economy to meet daily needs. Interestingly, the unemployment rate will probably tick lower under 7%, towards the Fed’s 6.5% target, since these folks will no longer be counted as seeking employment. Typically, these folks would be prompted to look for work more diligently once benefits end, sending the unemployment rate higher, however, the ongoing structural unemployment problem in the States removes any hope of finding a job, so many folks will simply give up on life. The Fed’s easy money policies make the rich richer and the poor poorer and Congress now throws the unemployed under the bus and then backs up over the veterans as well with the budget bill (also approved by the president). Credit cards are showing up on the Internet with stolen numbers from the TGT debacle. The banks are buying up any suspect cards to minimize the ongoing damage from the huge security breach. An advisor to the Saudi royals says President Obama has lost credibility over Syria. Egypt violence increases as police clash with the Muslim Brotherhood. Hundreds are arrested and five die in the riots. Ukraine and Turkey violence continues. President Obama continues vacationing in Hawaii golfing each day. Congress is on holiday vacation as well.
On Sunday, 12/29/13, Obamacare enrollment is 1.1 million after 3 months. The Whitehouse needs 7 million to sign up by March to make the program economically viable, otherwise, taxpayers will have to provide another bailout. France approves the 75% tax on high wage earners. The tax is not on individuals but instead targets companies that pay more than $1.4 million in salaries. France’s problems continue with high unemployment and a sick economy and it is difficult to imagine that taxes could be increased any further. A suicide bombing occurs at Volgograd (Stalingrad) train station in Russia, a major transportation hub, killing 16 people and increasing tension and worries ahead of the Sochi Olympics (Volgograd is only 400 miles from Sochi). Americans now feel 2 to 1 that there is no longer fair opportunity provided to get ahead of you work hard. Of course not, the Fed makes the wealthy wealthier at the expense of the common folks. These negative changes in attitudes and perception are hard to turn around once they begin and may lead to future social unrest.
On Monday, 12/30/13, a second suicide bombing occurs at Volgograd killing 14 on a trolley bus. Residents are staying indoors afraid of further bombings. These bombings may deter people from traveling to Russia for the Olympics. A first bombing occurred in October so today’s tragedy marks the third bombing event in the last couple months. The dollar/yen reaches 105.41 so the NIKK gains +0.7% to 16291. China is flat to lower ahead of the PMI data in a few hours. China’s local debt hits $3 trillion. China says Japan PM Abe’s visit to the war shrine is hypocrisy and further weakens China-Japan relations. U.K. home prices increase for another month. The pound is 1.65. WTIC crude oil 100.29. JPM Chief Strategist Thomas Lee is predicting double-digit returns for 2014 with an SPX target of 2075. Lee predicts a “couple more years of very good markets.” Brian Belski, BMO, says the SPX will move up through 2000 in 2014 and end the year higher with equities remaining in a secular bull pattern moving forward. Each day there is a new parade of non-stop market bulls; there are no bears remaining in the market. The icy cold winter weather and power outages continue in the north and northeast US. Natty gas pops +2% to 4.46. Equities are flat to lower after the opening bell but the Dow keeps moving higher. Pending Home Sales are lackluster weaker than expected but copper moves higher anyway. VIX moves above 13. The CTB and Apollo Tyre takeover falls apart with both sides now suing each other instead. CTB pukes -4% but an hour later CTB is up +4%. HIMX, the Google glass maker, pops +5.4%. Gunman fire at the German ambassador’s house in Athens with Kalashinikov assault rifles. No one is injured but bullets are lodged in the residence. The tensions between Germany and Greece grow since many Greeks feel the austerity imposed under terms of its bailout is making life too miserable. Greece’s depression continues. WTIC crude oil drops under 100 to 99.66. The 10-year drops 3 basis points to 2.97%. TWTR drops -6%. GRPN -4%. FB -3%. The social stocks are selling off, however, TWTR, GRPN, FB, YELP, and others, are up well over 100% in 2013. A crude oil train derails in Castleton, ND, and creates a large burning fireball. Since Congress and the president do not want to approve the Keystone pipeline project, more oil must be transported by rail which is less safe. Keystone would also provide high-paying jobs but the politicians do not care; they are too busy playing in the sun on holiday vacations. NQ pops +18% on a short squeeze when MS discloses a 5.2% stake. Muddy Waters, the short-selling firm, says NQ is in bad financial shape. CROX gains +21% today on news it receives $200 million from BX. The day ends with equities flat or negative. The Dow prints another new all-time closing high, the 51st this year, at 16504.29. The SOX, semiconductors, close at a new all-time high. Traders buy the chips since the consensus believes a strong economic recovery is well underway and guaranteed in 2014. VIX ends at 13.56 up +9% today. INVN +11.3%. TSL +6.5%. After the bell, MRVL jumps +3.6% when KKR discloses a 6.8% stake. HTZ pops +3.3% on news it is adopting a poison pill. Perma-bull television personality Jack Bouroujian says the SPX will run to 2050 in 2014 and jobs will print 300K per month. It’s all blue skies with no peep from bears. The dollar/yen drops under 105. The euro is above 1.38. 2 million folks sign up for Obamacare, far short of the 3 million plus goal needed now to attain the 7 million goal by March, but surprisingly only 75K have paid the premium.
On Tuesday, 12/31/13, Singapore GDP is 4.4% below expectations. New Year’s celebrations begin in Australia and New Zealand and now rotate around the globe. The NIKK is up +57% to 16291, the best gain since 1972, and the top global index performer for 2013, all courtesy of the BOJ destroying the yen. The PBOC says China will keep the current policies in place and continue with reforms. Shanghai continues to suffer through the worst air pollution in its history. The renminbi (yuan) is printing records against the dollar at 6.0969. The PBOC sets the yuan rate, now at 6.1024, and allows a 1% move above or below. European markets are moving flat and closing early for the New Year’s celebrations. European retail companies such as Debenhams have too much inventory remaining after the holiday season, especially shoes. Latvia becomes the 18th member of the euro this evening. Most citizens are not in favor of the union. FDX is sued by New York City for shipping cigarettes illegally across State lines. HPQ plans on cutting 35K workers in 2014 instead of the 29K originally planned. REV decides to leave China axing 1100 workers. Instability and ethnic tensions continue in the Congo with violence killing more than 50 people. Putin vows to crush any terrorism behind the bombings. 33 folks are dead and 60 wounded from the Russia bombings the last few days. Syria misses a chemical weapons disposal deadline. The Afghanistan war is the longest war in U.S. history. The US population growth is the slowest since 1937. S&P Case-Shiller shows a near 14% rise in home prices. Shiller, however, warns of the possible formation of a housing bubble. Data shows that 42% of the real estate transactions are in cash. Usually only 10% maybe 20% is expected to be in cash. This verifies that the young couple starting out is not in the picture and instead the hedge funds, investors, and other wealthy folks that the Fed made wealthier with easy money, are buying real estate with cash and this behavior fuels the move higher in house prices. In addition, wealthy Chinese and Russian investors are buying real estate as a means to hide money before their government confiscates it further pumping prices and short-term demand. Marijuana shops open in Colorado and the new industry is expected to pull in $600 million in sales. Equities open and move higher printing new all-time highs in the major indexes. Consumer Confidence is strongly higher than expected at 78.1 as folks become more positive about the jobs market. Perma-bull Professor Jeremy Siegel, Wharton School of Business, says the Dow would be fairly valued at 18K and may even hit 21K in 2014. Television Trader Stephen L. Weiss says there is “nothing to fear in 2014.” Weiss says the bond market will drop (yields higher) and there is nowhere else to put money so buy the stock market. Everyone is bullish. The bond market closes early today with the 5-year Treasury yield at 1.75%. The 10-year yield is 3.04% closing the year at a high not seen since July 2011. The 30-year yield is 3.98%. The dollar/yen remains elevated at 105.26. Equities drift lower all day long after the new all-time intraday highs were printed this morning, but at 3:15 PM, the stock market catapults higher. The SPX launches from 1842 to near 1850 in one-half hour’s time printing new all-time highs. The bullish euphoria is unstoppable. Equities finish up on the last day of trading for 2013. Today is EOM, EOQ4 and EOY2013. The SPX prints a new all-time intraday high, in the final minutes, at 1849.44 and new all-time closing high at 1848.36. The Dow prints a new all-time intraday high at 16588.25 and new all-time closing high at 16576.66. The Nasdaq prints a new 13-year intraday high at 4177.73 and new 13-year closing high at 4176.59. The RUT prints a new all-time closing high at 1163.64 but not a new all-time intraday high. The VIX jumps to 14.35 intraday and in the final minute it is jammed from 14.11 down to the 13.72 closing print. Gold drops to test the 1180 low and bounces strongly. Gold is down on the year for the first time this century; the 12-year gold rally is over. For the year, the Dow is up 26%, SPX +29.6%, Nasdaq +38% and RUT +37%. The Dow prints the best year since 1997. All 10 S&P 500 sectors finish up on the year. Stocks in general move higher the entire year from beginning to end. The best performing commodity in 2014 is natty gas. For the year, big winners are NFLX +300% (with a shameful 105 PE and traders keep buying), BA +80%. Winning sectors are airlines, biotech, healthcare, tech in general, media, consumer discretionary and automobiles. All the rich folks that the Fed policies make richer purchase new cars and luxury items. IBM loses -2% in 2013 (IBM the only Dow stock lower this year) and NEM is the worst loser in the S&P dumping -50%. The top performing hedge funds include Glenview Opportunities Fund up +97% due to healthcare plays, Glenview Flagship up +43%, Paulson Recovery fund +60% and Dan Loeb’s Ultra Fund up +39%. But looking at the stock market with a wider lens, shamefully, earnings are up 6% this year but the broader indexes are up a huge 30%. Ponder that. Market bulls are touting historical data saying a great stock market year is typically followed by a good year. The consensus predictions for 2014 by traders and analysts target SPX 1950-2050. The more well-known analysts all have SPX targets above 2000 for 2014. At least this makes it easy when looking back months from now to assess individual performance since nearly every analyst and trader is uber bullish and all telling you to buy stocks with both hands. They will be either really really right for 2014, or really really wrong. CPCE put/call ratio prints another uber low at 0.46 indicating a market top at hand.
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On Wednesday, 1/1/14, Markets are Closed in Observance of the New Year’s holiday. The Palestinian ambassador to the Czech Republic is killed in an explosion after opening a safe at his residence in Prague. Obamacare coverage begins for the new year. How long before a lawsuit is filed by someone who thought they had coverage but they do not? Interestingly, more folks are now uninsured than insured as a result of Obamacare. About 5 million have lost their health insurance because of the new law and 2 million have signed up (although the majority have not paid the premium) for a net loss of about 3 million, and many of these folks without insurance think they have insurance. Tuna on the West Coast are showing radiation poisoning and deformities as a result of the Fukishima nuclear disaster. Japan is limiting and controlling any news about the ongoing nuclear disaster. Fuel rods are melted prohibiting removal, contaminated water storage tanks are full with several leaking and radioactive water is discharged into the Pacific Ocean daily. The nuclear disaster is worsening and is the most tragic environmental accident in world history. The main stream media ignores the story. The TGT problems continue when gift cards, purchased as gifts, will not work properly since they were not activated correctly. The PR nightmare continues for Target; people want an easy fun shopping experience not a continuing hassle. Over 40 million credit and debit cards are affected by Target’s ongoing security breach debacle. An M-9 class solar flare is emitted from the sun with no appreciable communications disruptions expected on Earth. Happy New Year.
On Thursday, 1/2/14, radioactive steam is rising from Unit 3 at Fukishima contaminating the atmosphere. The main stream media does not care. The dollar/yen is 105.37. China PMI drops to a 3-month low and sends SSEC down -0.3%. The Yuan is 6.0508. The Aussie dollar is 0.8894. The Kospi dumps -2.2%. Thailand’s SET pukes -5.2% as the snap elections are delayed and the political unrest continues. India Sensex is at a 2-week low at 20862. Turkish Lira weakens against the dollar. Ex-Israeli PM Sharon, 85, in a coma for the last 7-1/2 years, takes a turn for the worst with organ failure. Sharon’s passing will increase tensions in the Middle East especially since many believe his death will dictate bible prophecy moving forward. Egypt violence continues with 2 killed in Alexandria. Italian auto maker Fiat buys the remaining 41.5% stake in Chrysler. Fiat jumps +15% higher. At 5:30 AM EST, the Eurozone PMI is 52.7 showing the fastest expansion in 2-1/2 years although only moderately above 50. The UK PMI surprises slightly lower than expected at 57.3 but remaining well above 50 for the last 9 months. Nonetheless, the UK economy may be stalling. Large parts of the Eurozone, such as France, print weak PMI’s under 50 indicating continuing economic contraction. European indexes are generally negative to begin the new year. The UK and Germany are both down about -0.5%. The euro is 1.3741. The pound 1.6553. European electricity prices oddly turn negative in recent days due to low demand, a robust wind power supply and warmer temperatures. Europeans, however, will not receive lower utility bills. European retailer John Lewis boasts of a 7.2% sales increase for the holidays as they successfully meshed the physical store, Internet and mobile experiences into sales. Other retailers, such as Debenhams, however, are not expected to announce as rosy news. Consumers are now programmed to wait until the last few days before Christmas to buy since retailers become desperate and have to strongly discount merchandise. Therefore, retailing margins should drop across the board. Vitamin E is found to slow down the onset of Alzheimer’s. Funny how last month the medical industry said vitamins were worthless. Computer hackers post 4.6 million user names and phone numbers on line that were taken from the popular Snapchat web site. Snapchat allows users to send messages and photos that are destroyed seconds after the message is received. Young folks prefer Snapchat instead of FaceBook, now comically called MomBook. The hackers also post a message on Skype’s twitter feed saying; “Don’t use Microsoft emails, they are monitoring your accounts and selling the data to the governments. More details soon. #SEA” MSFT owns Skype. The tweet references hotmail and outlook email accounts. The government spying practices are destroying the Internet. The northeast US braces for a severe winter storm that will dump as much as one foot of snow (0.3 meter) on New York State. To begin the new year, the 10-year yield is 3.03% and 2-year yield is 0.38%. Gold and silver move higher. U.S. futures are weak with S&P -4, Dow -20 and Nasdaq -10 but very jumpy and erratic. Economist Nouriel Roubini, typically known for his bearish prognostications on the global economy, begins the year as a raging bull looking for gains in global markets and a healthy US stock market. The bullish euphoria continues and many perma-bears have capitulated to the bull side. The rampant complacency is verified by the CPC put/call ratio dropping to a multi-year low at 0.46. This behavior indicates that a serious and substantial market top is in place. Jobless Claims fall for the second week. AAPL is downgraded and dumps -1.5%. Markets reopen for trading. Equities sell off at the opening bell with the dollar/yen dropping under 105 to 104.88. The ISM Mfg Index is better than expected showing expansion. Bill Gates adds $16 billion to his nest egg in 2013 and retakes the top of the billionaires list at $79 billion. The wealthy are all sending thank you notes to the Fed for making them all wealthier with the obscene money-printing, pumping the stock market higher, while common folks suffer. WTIC oil drops under 97. Gold prints above 1225 and silver above 20. The 10-year moves under 3% to 2.99%. The Dow drops triple digits and the SPX drops to the gap at 1833-1835, and falls through. CLR drops -5% since it is the most active company in the Bakken shale. Scientists are analyzing data from the railroad accident a few days ago and say the oil from the Bakken shale may be more flammable than other oils. CNBC business television’s Jim Cramer, host of Mad Money, is hawking a new book on air and speaking very bullishly on the markets, providing accolades to Chairman Bernanke and encouraging folks to go long equities. Other analysts say the sell off today is nothing to worry about. Jeff Saut, Raymond James, says to ignore any sell off today or tomorrow and equities will move higher in 2014. The rampant bullish euphoria continues; there are only bulls remaining. The US plywood industry is hurting from China dumping their plywood in North America at one-half the cost or better as demand lessens. This type of behavior fuels protectionism wars. Equities languish lower all day long but traders laugh it off and say it does not matter. Today is the first opening day since 2008 (the year of the crash) where the major indexes finish lower. As the first day of January goes, so goes the first week, and so goes the month of January, and so goes the year. Ben Willis, floor trader with Albert Fried, says “hit the buy button today and go long the market” since equities will finish higher this year. The bullish euphoria continues. There is not a bear to be found anywhere even with today’s pull back. The SPX finishes down 16 points, -0.9%, to 1832. The Dow loses 135 points, -0.8%, to 16441. The Nasdaq loses -0.8% and the RUT dumps -1.1%. Small caps lead the way lower to begin the year. The Apple downgrade hurt the tech sector today. Volatility moves higher to VIX 14.22 causing market weakness. Utilities were beaten today with UTIL down -1.6%. LNKD collapses -4.2%. FEYE, a popular IPO in 2013, dumps -5.7% on the acquisition of Mandiant, a computer forensics firm. 11 Attorneys General send a letter to HHS Secretary Sebelius and the Whitehouse expressing concern over the unconstitutional behavior of the Obama administration that is changing the Obamacare law, sometimes on a daily basis, operating like a dictatorship. Lawsuits are filed to stop the Whitehouse’s behavior. FB faces a class-action lawsuit concerning monitoring private messages and selling the data to advertisers. Manhattan apartment sales are at a record pace as Chinese, Russian and other wealthy global investors buy real estate to hide their money from the government. A major Bradley turn date occurs 1/1/14 so the weak market action hints at a potential market directional change lower.
On Friday, 1/3/14, emerging markets and copper sell off strongly. The dollar/yen is 104.37 more than one point lower from 24 hours ago so the yen is strengthening. Turkish Lira weakens past 2.18 per the dollar. George Soros says the world faces major uncertainty due to potential economic trouble in China this year. UK car sales continue higher for 21 consecutive months. UK mortgage approvals surge higher. 3 of 4 people say UK house prices will continue higher. BOE’s Carney has his hands full since potentially higher rates will stifle the recovery. The pound is 1.647. NEXT jumps +9% on robust holiday sales in Europe. The results verify John Lewis results yesterday and the common thread is that these retailers told consumers that there would be no discounts during the holiday season. Other retailers slashed each other’s throats lowering prices day after day. Marks and Spencer gains +3.4%. Telecom Italia jumps +5.4% since the Brazilian unit may be sold off. 70% of Spaniards do not believe PM Rajoy concerning the strength of the economic recovery. The euro/dollar is 1.3634 and euro/yen 142.45. GIS is stopping the use of genetically modified organisms (GMO’s) in Cheerios. GE is downgraded which may identify trouble ahead for industrials. Mortgage rates are increasing in the US. GS raises executive salaries since the Fed, which hires and employs many ex-GS employees, makes the rich richer with their policies. A blizzard hits the northeast cancelling thousands of airline flights. The wind chill readings create sub zero temperatures. The 10-year yield is 2.98%. WTIC crude oil drops to 95.25 from over 100 only a few days ago. Motor Vehicle Sales disappoint for December with GM and TM sales negative and F and Chrysler sales up but below expectations. Auto sales are at 6-year highs but the negative news is cause for concern since it is a main driver of the economy. Interestingly, Mercedes announces record-breaking sales. Chairman Bernanke makes the rich richer so the wealthy are buying new cars with all their stock gains courtesy of the Fed. Equities bounce at the opening bell due to lower volatility. Natty Gas Inventories remain well stocked so price drops -2.5% to 4.216. RAD jumps +9%. FEYE catapults +28%. Utilities remain weak. Fed’s Plosser, a hawk, warns of the potential for rapidly rising rates and will become a voting member this year. Equities drift lower as the day proceeds. At 2:30 PM, Chairman Bernanke speaks at perhaps the last public speech of his tenure. He cheerleads and pumps the stock market as usual saying the Fed is no less committed to stimulus despite the cutback on bond-buying purchases. Bernanke says the Fed will remain accommodative. His token QE taper move in the Fall, but at the same time more importantly committing to ZIRP Forever, created the rally into the end of 2013. The taper move is meaningless since the Fed wants to maintain zero interest rates forever. The stock market catapults higher, the SPX jumping from 1830 to 1837 in one-half hour’s time. The market action is sickening since it shows that free markets do not exist. Price discovery is destroyed by the Fed over the last few years. The Fed is the markets. Perhaps the Fed’s cheer leading is losing luster since the sellers return and crush the SPX from 1837 back down to 1831 at the closing bell. The broad indexes finish flat on the day. The Nasdaq loses -0.3% due to weakness in AAPL and chips but the RUT small caps gain +0.5%. AAPL dumps -2.2%. FEYE +39%. For the week, the SPX loses -0.5% to 1831. The Dow is flat, losing -0.1% to 16470. The Nasdaq drops -0.6% to 4132. The RUT loses -0.4% to 1156. Tech and small caps lead the markets lower. WTIC crude oil drops to 93.96. Brent crude is 106.89. Gold recovers over the last two days from under 1200 to 1237. BA will build the 777X aircraft in Seattle since the machinists approve a new labor contract. Liberty Media is making SIRI a wholly owned unit which should not dramatically affect price. Kentucky Senator Rand Paul plans to file a class-action lawsuit against the Obama administration concerning the NSA spying and abuse of power. Anyone with a cell phone may join the legal action and 700K folks are already on board. The government is illegally spying on Americans violating the Constitution. Many true patriot Americans do not want to give up their liberty for some token promise of security that cannot be properly verified. The extreme bitter cold and ice and snow storms continue across the US resulting in 16 deaths. Police kill 4 people in Cambodia as garment workers protest for higher wages. Social unrest increases around the world as the classes separate with the rich becoming richer and the poor poorer due to global central banker money-printing.
On Saturday, 1/4/14, China reports that over 8 million acres of farmland is too polluted to farm. China is drowning in industrial filth that poisons their atmosphere and soil. The Obamacare drama continues. Anecdotal stories are increasing with folks worrying that they do not have health coverage since they have not received their insurance cards. The pay button on the Obamacare web site is not working properly. Doctor’s offices are spending hours on the phone trying to receive approvals for surgeries. Iraq violence is increasing dramatically as the country falls back into chaos. Al-Qaida raises a flag above the government offices in Fallujah declaring an independent Islamic state. This negative development makes the loss of American lives, as well as the wounded that must now live with physical and mental problems, a wasted effort. George “Jerry” Goodman, 83, passes. He was a respected business journalist and television host of Adam Smith’s Money World laying much of the groundwork decades ago for modern-day business reporting. Asia and Europe Services PMI.
On Sunday, 1/5/14, the Bradley turn date from 1/1/14 maintains an open window for a potential market trend change. This is followed by another Bradley turn date on Thursday so wild erratic market moves may be on tap for the week ahead.
On Monday 1/6/14, HSBC China PMI. Yellen is confirmed as the new Fed Chair and will replace Bernanke on 1/31/14. Equities may pop on the news? Today begins the first full week of trading in 2014. Factory Orders. ISM Non-Mfg Index.
On Tuesday, 1/7/14, International Trade. Fed’s Rosengren speaks. 3-Year Note Auction. Fed’s Williams speaks. MU.
On Wednesday, 1/8/14, ADP Jobs Report. Oil Inventories. 10-Year Note Auction. FOMC Minutes at 2 PM will create a market pivot point. Consumer Credit. BBY. MON. The first five days of January end so the January barometer can be assessed (an up week for the first week of the year forecasts an up January and up year, and, visa versa).
On Thursday, 1/9/14, ECB Rate Decision 7:45 AM EST and Press Conference 8:30 AM. Chain Store Sales. Jobless Claims. Natty Gas Inventories. 30-Year Bond Auction. Fed’s George speaks. Fed’s Kocherlakota speaks in the evening. AA kicks off Q4 earning season. A Bradley turn date occurs where a market directional move is expected in the 1/2/14 through 1/16/14 time frame. The Bradley turn does not predict direction, only that a strong move will occur one way of the other.
On Friday, 1/10/14, Monthly Jobs Report—are wages increasing? Inflation cannot exist without higher wages. Wholesale Trade. Fed’s Bullard speaks.
On Saturday, 1/11/14, ….
On Sunday, 1/12/14, …
On Monday, 1/13/14, Treasury Budget.
On Tuesday, 1/14/14, NFIB Small Business Optimism. Retail Sales. Import and Export Prices. Business Inventories. Fed’s Plosser speaks.
On Wednesday, 1/15/14, Mortgage Applications. PPI. Empire State Mfg Survey. Beige Book at 2 PM will create a market pivot point.
On Thursday, 1/16/14, CPI. Jobless Claims. TIC data. Philly Fed. Housing Market Index. Natty Gas Inventories. A full moon occurs. Markets are typically bullish moving through the full moon. Markets are also typically bullish moving into a 3-day holiday weekend.
On Friday, 1/17/14, Housing Starts. Industrial Production. Consumer Sentiment will create a market pivot point at 9:55 AM. JOLTS Job Opening Report.
On Saturday, 1/18/14, …
On Sunday, 1/19/14, ..
On Monday, 1/20/14, Markets are closed in observance of Martin Luther King Jr. Day.
On Tuesday, 1/21/14, Markets reopen for trading.
On Wednesday, 1/22/14, does BOJ decide to implement additional stimulus? If so, the yen will weaken with the dollar/yen currency pair running strongly higher to 105 and higher and the NIKK, DXJ and U.S. equity markets all running higher. If not, the dollar/yen will drop as well as Japan and U.S. stocks. Mortgage Applications.
On Thursday, 1/23/14, Jobless Claims. Existing Home Sales. FHFA House Price Index. Leading Indicators. Natty Gas Inventories. Oil Inventories. 10-Year TIPS Auction.
On Friday, 1/24/14, Asia and Europe Flash PMI’s.
On Saturday, 1/25/14, …
On Sunday, 1/26/14, the cost of a US postage stamp is raised from 46 cent to 49 cents.
On Monday, 1/27/14, New Home Sales. Dallas Fed Mfg Survey.
On Tuesday, 1/28/14, FOMC meeting begins. Durable Goods Orders. S&P Case-Shiller House Price Index. Consumer Confidence will create a market pivot point at 10 AM. Richmond Fed Mfg Index. 2-Year Note Auction. President Obama provides the State of the Union speech in the evening.
On Wednesday, 1/29/14, Mortgage Applications. Markets are typically bullish after the State of the Union since promises to spend money are typically provided by the president. Oil Inventories. Chairman Bernanke conducts his last official two-day meeting as Chair of the FOMC. The FOMC meeting announcement will create a market pivot point at 2 PM.
On Thursday, 1/30/14, GDP. Jobless Claims. Pending Home Sales. Natty Gas Inventories. Kansas City Fed Mfg Index. 5-Year Note Auction. 7-Year Note Auction. A new moon occurs. Markets are typically weak moving through the new moon.
On Friday, 1/31/14, Japan PMI. China’s New Year begins with the Year of the Horse. Will the horse win the race this year, or, end up at the glue factory? Chairman Bernanke’s term ends at the Fed. New Chair Yellen takes over. Personal Income and Outlays. Employment Cost index. Chicago PMI. Consumer Sentiment will create a market pivot point at 9:55 AM. Farm Prices 3 PM.
On Saturday, 2/1/14, China PMI.
On Monday, 2/3/14, Europe PMI’s. New money typically enters the markets to begin the new month. Motor Vehicle Sales. ISM Mfg Index. Construction Spending.
On Friday, 2/7/14, Monthly Jobs Report—watch for any odd affects to the rate due to the elimination of extended unemployment benefits. The initial Debt Ceiling Limit date is hit but Secretary Lew will take extraordinary measures to extend the deadline until the end of the month. Congress must agree to a solution quickly. Winter Olympics begin in Sochi, Russia, running through 2/23/14.
On Friday, 2/28/13, the Final Debt Ceiling Limit Deadline is hit where the U.S. will default on obligations unless Congress reaches a solution today.
On Wednesday, 3/19/14, new Fed Chair Yellen talks at the conclusion of her first FOMC meeting (3/18 and 3/19). Perhaps Yellen will conduct press conferences and Q&A sessions for each Fed meeting forward instead of only the quarterly meetings?
On Monday, 3/31/14, the deadline for the Obamacare sign up period ends. The Whitehouse needs 7 million people (mainly healthy young people) to sign-up by today or the program will be bleeding money profusely and require a taxpayer bailout.
In February/March, Fed Chair Yellen testifies before Congress.
In February/March, Congress discusses and develops a privacy code agreement since face recognition software is quickly gaining use across all levels of society, as is other privacy-stripping technologies.
In February/March, the German High Court must rule on the constitutionality of the OMT program. The decision is delayed from the Fall 2013. Many German citizens believe the OMT is simply a backdoor mechanism to fund other countries.
In February/March and forward, European bank stress tests are ongoing and will take one year to complete (there are likely 10% of the 128 banks undercapitalized with no clear way on how to recapitalize these troubled institutions). The one-year timeline is chosen to keep stretching things out in the hope that the European economy recovers before further bad news occurs.
In March, Europe must finalize all plans for the new banking union and the ESM is officially “fully operational.” The Euro banking union is in place after delays from January 2013 to January 2014 and now to March 2014.
In April, MSFT no longer supports Windows XP.
In June, employer mandate provisions begin for Obamacare with many workers likely forced into part-time 30 hours per week or less employment.
On Tuesday, 11/4/14, mid-term elections. The 2-year presidential race for 2016 begins.
On Saturday, 11/15/14, the enrollment period for Obamacare in 2015 begins pushed forward from 10/15/14 by the Whitehouse and democrats so voters will not experience the sticker shock of higher insurance premiums before the elections. Premiums will rise since too few healthy young people are signing up to support the program.
On Wednesday, 12/31/14, the grandfathered health care plans expire affecting approximately 20 million people that will now have to become involved in Obamacare.
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