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.
----------------------------- 2014 ----------------------
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, …
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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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