S&P and DOW futures up a wee bit. NDX futures better as market bids up the mega-cap names early after a decent drubbing yesterday.
REMINDER…END OF QUARTER AND JULY 4TH NEXT WEEK. NORMALLY A POSITIVE BIAS. Wouldn’t know it by yesterday.
BUT….as you know, before this week, more than half the market worrisome and now the other half gets distributed. What we are watching:
XLF better hold right in here. FINANCIALS matter.
The DOW right here at the 200 day average.
The SOX with a potential big top being put in place. Of course, we see a few timely upgrades by analysts this morning to try and save the day.
Central banks…yes, we are watching central banks as they cannot afford markets going down. We suspect we will hear some dovish crap soon. China has already loosened some bank requirements.
The biggest issues:
Foreign markets, to put it nicely, remain screwed. Just a big bludgeoning in EMERGING (SUBMERGING) MARKETS and many other countries around the globe. The election out of Turkey was quite Venezuelan!
Tariffs…not only do we not like tariffs, the administration is now becoming confusing with their words. And it provides no solace that the administration is watching markets as they pushed Navarro out on tv yesterday to quell markets. Yippee!
The yield curve. While we think all the fed intervention has changed this playing field, a yield curve is negative for banks and potentially for the market as the competition for money heats up.
Debt/deficits…no one gives a crap! Another $21 billion will be added to OUR debt this week and again, no one gives a crap.
The Trump tweets…We wonder what tweet going forward will really affect markets. The feeling of omnipotence creates vulnerability.
The Mets…after a magnificent start, wondering if they will win 60 games this year.
Well that was interesting.
To take the positive side…it is still end of quarter window dressing coming up along with the July 4th holiday…usually a decent bias.
The DOW again on the 200 day average where is held April 2 and May 3. Best hold.
The XLF back to the important lows for the 5th time. Best hold.
Other than that…nausea.
Futures down decently. They turned down when the president talked about more tariffs and all that crap. Harley Davidson said they are going to lose up to $100 million they otherwise wouldn’t have lost because of the EU tariffs which came about because of Trump tariffs…about $2,200/bike. They also announced they plan on shifting a portion of its U.S. motorcycle manufacturing capacity to foreign markets because of this. Yippee! The trade situation slowly becoming a mess. Imagine if more companies have to move or eat higher costs.
First Krauthammer! Charles Krauthammer passed away after a long bout with cancer. I noticed something in the past few days. Many people wrote about him starting with “I never met Charles Krauthammer but” or “I only met Charles Krauthammer once but.” I could not find one even remotely negative opinion on a man that so many didn’t even know. In fact, they all loved him. I am one of them. I never met Charles Krauthammer but he was a tremendous influence on me. There are certain tv rules in my home. No one can watch a “housewife” show. No one can watch a Kardashian show though after what Kim Kardashian just did for the incarcerated woman, I may relax that rule. The other rule was I never miss Charles Krauthammer. If I could not watch live, I would DVR and always fast forward to him. If someone would start talking while he was talking, there would be a loud shush. No…I am not a bad person, maybe just a tv dictator. I loved the man’s thought. I loved his humor. I loved his tempo. I loved that he never had to shout someone down. I loved that he could completely disagree with the next person but do it with class and do it with a smile. I loved his logical conservatism. I loved his tone. He was a great inspiration as I whine when I catch a cold while this man not only lived but a lived a great life after a terrible accident. I would tell you we could only hope that all the nastiness going on in politics can learn a lesson from this man but not sure that can happen at this point. It seems the words Nazi and Hitler are used more than the words hot dog and beans these days. We can only hope. I wish I could have met this man. May he rest in peace.
This week is end of month and then July 4th…which usually has a positive bias….or at least, not negative.
The tape remains very split as over 50% of the market still not working. We have listed all those areas for you in the past week. We do not think this is going to change but we must tell you there are a few things sticking out now you need to know about.
JP MORGAN, BANK AMERICA and a few others now join a decent sized list of big financials moving below longer term support. There is no rule that they cannot rally back quickly but there has been nothing but deterioration in this important area while other areas remain strong. This is a must watch.
Important TRANSPORT FEDEX cracked badly on numbers. Just another important name that has to be watched.
The leading NASDAQ/NDX “feels like it is finally getting tired. It has been led by a select few big cap tech names that have been doing the job. Keep in mind, they all report during July.
Many world markets continue to act like my beloved Mets. Actually, it is worse knowing how well the Yankees are playing. Emerging markets are submerging with many markets basket cases of dictatorships and debt. Russia, China, Turkey, Brazil, Argentina for starters.
The DOW continues to be worse than all. Not sure replacing GE with Walgreens will help. Big Dow leader BOEING looks topped but that’s after a long run. It may be caught up in the tariff issue with other names like Caterpillar, Deere and agriculture names.
Would love to tell you we can find new leadership but not yet. About the only group showing up really strong here is the RESTAURANTS. Not much else!
Whatever OPEC decided to do has energy prices spiking. ENERGY STOCKS are gapping up nicely. There has been a lot of deterioration in this area recently, the opposite of what it did into the highs of mid-May. If a low is in, this would be a big help to some indices. Of course, will not help airlines and cruise lines.
Futures bouncing but our themes do not change.
The DOW remains worse than everything…S&P better…NASDAQ/NDX/RUSSELL lead. The best pulled back yesterday.The worst has been ugly. Let’s just add in a lot of world markets are under severe pressure. Notwithstanding bounces, look at EEM, EFA, RSX, FXI, EWZ, TUR and others. Wow!
This is what happens when half the markets are not working. The good are gooder. The bad are badder. We don’t see it changing yet.
Only standout this morning is RHT…recent leaders goes bye bye on numbers. DRI gapped up yesterday to a high.
The Supremes decide states can collect internet taxes. For a change, we are in between. Normally, we take a definitive side. We hate more taxes. Government (federal, state, local) takes over $6 trillion out of us every year….yes…$6 trillion. One would think that’s enough. But the other side says all retail should be taxed and that bricks and mortar retail is at a disadvantage. We understand that side also. But again…we hate more taxes.
Charles Krauthammer passed away after a long bout with cancer. We will have thoughts on this great man over the weekend. We never met him but never missed him when he was on the tube.