On Friday, 8/9/13, China economic data meets or beats expectations; however, robust
automobile sales are actually due to heavy discounting. AAPL
iPhone sales are lagging in China. Greek youth unemployment is 65%.
The broad
indexes sell off at the opening bell but maintain a flat posture as the day
plays out. Semiconductors
are causing equity weakness. The VIX moves back above 13. The Eiffel Tower (France) is evacuated due to a bomb
threat but it was a hoax. SAC Capital is allowed to continue operating
while the legal problems continue. Courts and regulators make this decision
since SAC adds a lot of liquidity to markets daily and that will have a
negative impact on markets if the company is shut down; the markets are very
incestuous. President
Obama conducts a press conference since
Jay Leno the comedian asked why there are no press conferences anymore. The
president says his relationship with Putin is fine and then slams the Russian leader describing his
body language as a bored kid in the back of the room. The president says Snowden is not a patriot
although half of the country disagrees. Snowden’s action to alert the American people that they are being spied
upon by the government has caused the president to now reassess the NSA spying
program but the cat is already out of the bag. Everything you do electronically, cell phone conversations, emails,
instant messages, photographs, Internet usage, etc… is all monitored and permanently
archived, just like George Orwell (1984)
predicted decades ago. President Obama comments on the new Fed head
decision mentioning ‘Mr. Yellen’, who of
course is Mrs. Yellen, an obvious Freudian slip likely showing that the
decision is already made to choose Summers as Bernanke’s replacement. Equities finish flat to down on the
day. For the
week, the SPX loses -1.1% to 1691,
the Dow is off -1.5% to 15426 (ending a
6-week winning streak), the Nasdaq
loses -0.8% to 3660 and the RUT is
down -1.1% to 1048.
On Saturday, 8/10/13,
Egypt violence continues. Ditto Syria. A terrorism
event does not occur over the last week
as was threatened. The American embassies reopen with the exception of Yemen. China is
investigating Sanofi, the French drug maker, on bribery charges. The
protectionism behavior between nations continues.
---------------------------------------------------------
On Sunday, 8/11/13,
the Egyptian
army threatens to remove Morsi-supporters
but continues to back away to avoid bloodshed and violence. Muslim’s are split across the Middle East
between those that want to continue the strict laws and conduct that have been
followed for generations as opposed to those that want to embrace the modern
world and technology. Japan’s GDP is less than expected. Fukishima
nuclear disaster continues with cesium
releases now surpassing the Chernobyl meltdown.
On Monday, 8/12/13, the
dollar/yen
is at 96.08 continuing the big drop in
recent years representing a stronger yen. The Greece economy continues to contract for 20 straight quarters (5
years) but at a slower pace of contraction. The 10-year yield is 2.58%. S&P futures are
-6. Equities drop at the opening bell with the SPX touching 1683 but the
dip-buyers rush in and the markets recover quickly. The broad indexes stumble sideways all day long due to weakness in semiconductors and financials. Markets
end flat on the day but the VIX is also down ending at 12.81. The 10-year yield climbs to 2.62% which hurts
the utilities sector today. BBRY is
exploring buy-out options since the new Blackberry offerings do not appear
to be gaining traction. BBRY is likely worth more split up and sold off in
parts rather than its current price. World
governments are talking negatively about bitcoin and other digital currencies
saying that criminals use digital currencies to launder money and conceal
profits. Obviously, nations see
digital currencies as a threat and the negative rhetoric should increase moving
forward.
On Tuesday, 8/13/13, Japan core machinery orders are down. Abe pledges to
implement a lower corporate tax rate which
places markets in a happy mood. The dollar/yen bounces to 97.90 well off
the 96 low yesterday so the weaker yen
boosts the Asian markets, provides lift to Europe, and sends U.S. stock futures
higher. S&P’s are +6. Bellwether YUM profits continue to drop in
China. U.K.
home prices are at a 7-year high. The euro
is 1.33. German ZEW sentiment is 42 above
expectations. DAX is up almost 1% on
stronger company earnings. The U.S. 10-year yield is 2.66% climbing about 7 basis points over the last
day. Hedge fund activist Ackman resigns from the JCP board while billionaire
Soros supports the board. Dollar/yen
moves above 98. NFIB Small Business Optimism Survey is
lackluster for another month. Retail Sales are slightly disappointing dropping the S&P
futures to +2. Equities move higher at the opening bell but roll over to
the downside in quick order along with weaker
semiconductor and retail stocks. The SPX bounces along the important 1685 S/R. BBRY is up 10%. The U.S. DOJ
(Department of Justice) files an anti-trust lawsuit against LLC (US Air) which
would block the AMR-US Air merger. LLC tumbles -10%. Hedge fund guru Icahn tweets
that he holds a large position in AAPL and the stock jumps +4% higher. Markets
bottom at the 10-11 AM hour, as usual, when the Fed’s
POMO easy money pumping begins. The SPX languishes at 1688 into noon
time, unable to gain any more upside from the weaker yen and Fed pumping when Fed’s Lockhart
says there is not enough data to make a September taper decision. Equities
catapult higher since traders anticipate more Fed easy money will continue.
The broad indexes close up on the day due
to all the central banker pumping. It is plain as the nose on your face, the Fed, BOJ and
other central bankers are the market. The 10-year yield moves higher to 2.72%. Police and
protestors clash in Brazil. Quarterly
SEC filings are released over the next couple days for the big players. Tepper, Appaloosa Management, buys more C and
sold some AAPL. The CPC and CPCE
put/call ratio charts show complacency in the markets where traders do
not believe that equities will sell off ever again. Of course this is typically where a market top occurs.
On Wednesday,
8/14/13, the Egypt security forces and army use tear gas to remove the
Morsi-supporters from Nahda Square protest camp. The death count steadily rises as the day proceeds with 300 killed with 1400 injured. A dusk-to-dawn curfew is imposed and a State
of Emergency is declared. Germany and France Q2 GDP growth is positive and the
Eurozone as a whole shows signs of pulling out of recession. Recent PMI’s
indicate a challenging environment, however, so Q3 GDP may not continue the
rosiness. European indexes, at 5-year
highs, sell off on the positive news. The euro drops from 1.3275 to 1.3240. BOE’s
Weale is a dissenting vote against offering forward guidance for markets which
shakes confidence in Carney. The pound strengthens. The broad indexes
trail lower all day long as semiconductors weaken. At 3 PM, Fed’s Bullard cautions against over optimism about the
overall economy. Two ex-JPM traders are charged with criminal and civil
charges in the London Whale trading debacle. The whale, Bruno Iksil, is
cooperating with authorities in the investigation and will not be prosecuted.
Iksil, who receives the bulk of the blame for the big losses, and is by no
means blameless, actually sounded the alarm bells about the problem trades
several times internally within JPM. The
SPX ends the day
down -9 points, -0.5%, to 1685. The major indexes, SPX, INDU (Dow),
COMPQ (Nasdaq) and RUT (small caps), are all down the same percentage
indicating that the robot’s and algorithm’s are in control of trading. After
the closing bell, CSCO earnings are in
line but guidance is weak. Cisco plans to axe
4,000 workers, about 5% of the workforce. CEO
Chambers says the macro global economic environment remains ‘challenging and
inconsistent’. CSCO drops -10% AH’s and this will negatively impact the tech sector and Nasdaq tomorrow. M earnings miss which will hurt the
retail sector. On the hedge fund quarterly filing beat, Paulson, who only a month ago continued to pump gold, has cut his gold positions in one-half in
the recent quarter. Paulson is likely a good fade for gold trading (sell
gold when he says buy and buy gold when he says to sell) Loeb sold out of his
GLD holdings. Soros increases his stake in JCP and HLF. Ackman buys APD. Icahn
buys AAPL.
On Thursday, 8/15/13,
the Whitehouse
calls for calm in Egypt but the U.S.
has no influence abroad; foreign policy is viewed as weak. The Egypt death toll is now at 421 with 3,500
injured. Oil prices rise on the continuing Egypt turmoil with Brent approaching 111 and WTIC crude over
103. The Suez Canal remains open. Get ready for sustained higher gasoline
prices. The dollar/yen is under 98. The Nikkei drops -2% overnight. Lenovo, the world’s number one PC maker,
reports strong earnings and a robust Smartphone market. Much of Europe is closed for business today on holiday
but the northern Europe markets are trading in thin volume. Copper is weak after several days of strong
upside. Buffett’s Berkshire Hathaway
reduces its stakes in AXP and WFC which causes both stocks to sell off sharply
pre-market but Buffet’s office then says there is a miscommunication in the
release. The updated release shows no
change to AXP and KO shares and WFC holdings actually increased slightly. WMT earnings miss which piles on to the CSCO
negativity. S&P futures are -12. Dow -100. Nasdaq -25. Jobless
Claims are the lowest since 2007. The futures
drop further (traders think the Fed’s easy money will end due to better data) and
Treasury yields move higher with the
10-year hitting 2.82% printing a 2-year new high. Philly Fed Mfg Survey
disappoints. S&P’s
-15. Dow -120. Nasdaq -31. Industrial
Production is in line. The broad indexes drop
like a stone at the opening bell. The SPX plummets from 1685 to 1669 in the first couple
minutes. The LOD is 1658.59. The SPX stumbles sideways through 1659-1666 all day long ending at 1661. The SPX lost -24
points, -1.4%. The Dow dropped from
15340 to 15170 in the opening minutes, ending the day at 15112, down -225
points, -1.5%. The Dow loses the 50-day MA at 15281 and stops at the 100-day MA
at 15098. The Nasdaq lost -63 points, -1.7%, to 3606. The RUT lost -20
points, -1.9%, to 1028. Weakness in semiconductor, retail and financial sectors, and
higher volatility, create the market negativity. The VIX jumped to near 15 during the
session. Home builders were actually up
on the day. The 10-year yield is 2.77%.
President Obama cancels planned joint military
maneuvers with Egypt but does not cancel aid to the military. Gold
rallies above 1350 to a 2-month high. Interestingly, gold popped big in the
afternoon but the dollar index did not drop until one-half hour later. After
the bell, DELL beats by a penny but Q2
profit plummets. Icahn and founder Dell battle over this fading star whose
main business is the waning PC. JWN
lowers sales and forecasts and is sold off. The wealthy are not spending as much if Nordstrom’s is weak and this
will further negatively impact the
retail sector. Ditto JOSB that warns
of lower earnings moving forward; proof positive that the ‘5 suits for the
price of 1’ special may not be a good business strategy. AMAT, a chip equipment supplier, lowers guidance. No wonder the
semiconductors have fallen off a cliff over the last couple days. This is a
negative signal for the economy since most every product nowadays needs a chip.
The Hindenburg Omen registers another
signal, now 3 days in a row, and continues the strong omen cluster of about 7
triggers in the last 10 trading sessions.
The Omen forecasts that a
significant market top is in place.
On Friday, 8/16/13, shenanigans occur in the China stock market with the
Shanghai popping, then dropping, in what
appears to be market manipulation
although others are saying it was a fat finger trade. Authorities are
investigating. The Indian Rupee hits
all-time low against the dollar. Tanks seal off Tahir Square, the epicenter of political change in recent years, the
center of the city of Cairo, to prevent protestors from entering. The Muslim Brotherhood calls for a Million-Man
March today, after Friday prayers, calling for a ‘Friday of Anger’. There are now over 600 dead and thousands wounded in the violence. Companies such as Shell
are now pulling out of Egypt as conditions deteriorate. Oil prices
remain elevated. European markets trade flat. Merkel says “the EU debt crisis is not
over.” Today is Opex. YHOO’s
Marissa Mayer appears on a sexy Vogue magazine cover lying seductively across a
lounge chair. Housing Starts are in line now setting up a sideways range through 850K-950K for the last year. Thus, the housing recovery will be real if Starts
print above 950K moving forward but troubling economic times are ahead if sub
850K Starts begin printing next month and beyond. Markets
drop at the open with dip-buyers jumping in to create a bounce into noon time. Consumer Sentiment is weaker than expected. Financials and
utilities roll over to the downside and volatility spikes higher,
sending markets down to the LOD at 1653. The SPX closes at 1656 under the 50-day MA at 1657.
For the week, the SPX loses -2.1%, the Dow drops -2.2%, the Nasdaq -1.6% and
RUT -2.3%. Financials, XLF, that have led the markets higher, drop -2.0%
this week. The retail sector, RTH, was bludgeoned -3.1% since
the low-end (WMT), middle (M) and
high-end (JWM) consumers are all decreasing their spending. The 10-year yield is 2.83%. Fed’s Fisher says yields are rising as the economy
improves and traders realize that QE Infinity will not last forever. Utilities lost their 50-week MA (UTIL 483) which signals
extended and serious broad market selling ahead. Gold is 1375. AAPL
has the best week in two years. Traders
remain complacent and not particularly concerned about the market selloff
(this typically indicates further downside ahead).
On Saturday, 8/17/13,
Egypt prepares for more violence and bloodshed as
conditions deteriorate. Oil
prices remain elevated which will keep gasoline prices elevated. GM recalls
300K Chevy Cruze models. The new Steve Jobs movie is released, starring Ashton
Kucher, and is slammed by critics with lousy reviews.
---------------------------------------------------------
On Monday, 8/19/13,
….
On Tuesday, 8/20/13,
…
On Wednesday,
8/21/13, Existing Home Sales. Oil Inventories. FOMC Minutes.
On Thursday, 8/22/13,
PMI Manufacturing Indexes. Jobless Claims. Natty Gas Inventories. Jackson Hole Economic Summit begins with a focus on Yellen.
On Friday, 8/23/13, New
Home Sales.
On Saturday, 8/24/13, Jackson Hole Summit ends.
On Saturday, 8/24/13, Jackson Hole Summit ends.
---------------------------------------------------------
On Monday, 8/26/13, Durable
Goods.
On Tuesday, 8/27/13, Consumer Confidence. 2-Year Note Auction.
On Wednesday,
8/28/13, Oil Inventories. 5-Year
Note Auction.
On Thursday, 8/29/13,
Jobless Claims. GDP. Natty Gas Inventories.
On Friday, 8/30/13, EOM. Chicago PMI. Consumer
Sentiment.
---------------------------------------------------------
On Monday, 9/2/13, Markets are Closed in Observance of Labor Day. China and Asia PMI’s. European PMI’s.
On Tuesday, 9/3/13, Markets Reopen for trading. Congress returns from August recess to address the fiscal
problems within the next 4 weeks. ISM Mfg Index.
On Wednesday, 9/4/13,
Beige Book.
On Thursday, 9/5/13,
Jobless Claims. Factory Orders. Natty Gas Inventories. Oil Inventories.
On Friday, 9/6/13, Monthly Jobs Report.
---------------------------------------------------------
On Monday, 9/9/13,
…
On Tuesday, 9/10/13,
…
On Wednesday,
9/11/13, Anniversary of 911. Wholesale Trade. Oil Inventories. 10-Year Note Auction.
On Thursday, 9/12/13,
Jobless Claims. Natty Gas Inventories. 30-Year
Bond Auction.
On Friday, 9/13/13,
PPI. Retail Sales. Consumer
Sentiment. Business Inventories.
---------------------------------------------------------
On Monday, 9/16/13,
Industrial Production.
On Tuesday, 9/17/13, FOMC meeting begins as traders listen for ‘QE taper’.
CPI.
On Wednesday,
9/18/13, Housing Starts. Oil Inventories.
FOMC Meeting Announcement, Forecasts and
Chairman Bernanke Press Conference.
On Thursday, 9/19/13,
Jobless Claims. Philly Fed. Leading Indicators. Existing Home Sales.
Natty Gas Inventories.
On Friday, 9/20/13, OpEx Quadruple
Witching.
---------------------------------------------------------
On Sunday, 9/22/13, Germany reelects Merkel and now there is no longer a need
to keep countries like Greece or Cyprus in the euro, or even Germany itself.
On Monday, 9/23/13, Flash
PMI’s.
On Tuesday, 9/24/13, Consumer Confidence. 2-Year Note Auction.
On Wednesday, 9/25/13,
Durable Goods Orders. New Home Sales. Oil Inventories. 5-Year Note Auction.
On Thursday, 9/26/13,
Jobless Claims. GDP. Natty Gas Inventories.
On Friday, 9/27/13, Consumer Sentiment.
---------------------------------------------------------
On Sunday, 9/29/13, the Debt Ceiling Limit and CR Continuing Resolution to
fund the U.S. government deadlines occur. Perhaps last minute antics
occur today which is typical for the politicians. The Whitehouse scandals are distracting politicians from addressing the
fiscal problems.
On Monday, 9/30/13, EOM. EOQ3.
On Tuesday, 10/1/13, Q4 begins.
China and Asia PMI’s. European PMI’s.
Construction Spending. ISM Mfg Index.
On Wednesday, 10/2/13,
ADP Jobs Report. Oil Inventories.
On Thursday, 10/3/13,
Jobless Claims. Factory Orders. Natty Gas Inventories.
On Friday, 10/4/13, Monthly Jobs Report. European
bank stress tests will occur in Q4.
----------------------------- 2014 ----------------------
On Friday, 1/31/14,
Chairman
Bernanke’s term ends at the Fed. Yellen, Summers and Kohn are
candidates. Yellen is the front runner, very
dovish and will likely continue QE indefinitely which is happy news for
stock market bulls.
On Friday, 2/7/14,
Winter Olympics begin in Sochi, Russia, through 2/23/14.
In February/March
2014, the new Fed Head testifies before Congress.
In March 2014, the
ESM is
officially “fully operational.” The banking union schedule has been delayed from January 2013 to January
2014 and now to March 2014.
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