The Morning Look

Stock Market Overview: 

Stock futures are down on Wednesday as the market digest’s Tuesday strong rally and waits for the Fed’s meeting later today. Gary has nailed this market for you perfectly.

Gary’s Thoughts:  Apple and Boeing will not help this morning but we still believe last Wednesday’s lows holds sway. Just keep in mind the word we used…”jagged” when talking about any further gains. Lots more earnings to come. 

Economic Data:

  • MBA Mortgage Applications 7:00 AM ET
  • New Home Sales 10:00 AM ET
  • EIA Petroleum Status Report 10:30 AM ET
  • FOMC Meeting Announcement 2:00 PM ET

Highlights Of The Day:

    • God and His Angels Can’t Fix Greece: Varoufakis
      Gary’s Thoughts: The country is bankrupt…covered up by issuing more credit cards.
    • The Surge in U.S. Mansion Prices Is Now Over
      Gary’s Thoughts:  As we have said, we believe you will see housing prices, especially rebubbled areas…peak!
    • New Drone Racing League Wants to Be the Next Nascar
      Gary’s Thoughts: Really!

The Closing Look

Stock Market Commentary:

Stocks fell on Monday as the market paused to digest last week’s big oversold bounce. Oil prices fell again which dragged a slew of energy stocks lower.  Oil plunged more than 7% which is not an insignificant sum. Economic data was thin on Monday. The Dallas Fed January manufacturing index fell to negative -10.2 vs 12.7 in December. The business activity index was minus 34.6 which missed estimates for -14 and last month’s reading of -21.6 the previous month.

Gary’s Thoughts: At 11 am, I looked at my peeps in the office and told them there was something wrong. A/D was again horrid, the small caps were again being trashed and the financials couldn’t get a life. In fact, several big financials have already broken into new low ground. This is less than thrilling for a nascent rally off of last Wednesday’s reversal.  The bear market rally already sucking wind after 3 days…

And lastly, the WSJ has an article this morning titled “SOME MARKET SIGNALS START FLASHING RED!” Really! Really! NOW they are flashing red? 

The Morning Look

Stock Market Overview:

Stock futures are down on flattish as we write this but have been all over the map throughout the night. This comes  after Wednesday’s late day reversal to the upside. Overnight, China injected $16.7B to prop up markets. That was their largest injection in three years and the second one this month. Even with that massive injection Chinese stocks fell on Thursday. Gary has been telling you the market has been VERY stretched to he downside and way overdue to bounce. Let’s see if the market can actually bounce here.

Gary’s Thoughts: Dow futures were up between 150 and 200 points last night but Asia reversed badly to the downside…thus our giving back of gains. We continue to be amazed at governments interfering with markets and thinking it is a good thing in the long run. We are of the belief that yesterday’s reversal could be meaningful in the short run but expect jagged action. If you want to know what jagged means, here are some synonyms: ragged,rough,uneven,irregular,sawtooth!

Jobless Claims 8:30 AM ETEconomic Data:

  • Philadelphia Fed Business Outlook Survey 8:30 AM ET
  • Bloomberg Consumer Comfort Index 9:45 AM ET
  • EIA Natural Gas Report 10:30 AM ET
  • EIA Petroleum Status Report 11:00 AM ET
  • Fed Balance Sheet 4:30 PM ET
  • Money Supply

Highlights Of The Day:

    • China injects $16.7B to stimulate their market. That was their largest injection in three years and the second one this month.
      Gary’s Thoughts: The more they interfere, the more they scare the masses. Get the hell out of the way and let markets find their real price.
    • Rumors spreading that Twitter ($TWTR) may be acquired.
    • Gary’s Thoughts: Someone who owns a lot of stock probably floating the rumor. 
    • Deutsche Bank Sees Fourth-Quarter Loss, Takes Additional Charges
      Gary’s Thoughts: More of that to come!

The Closing Look

Stock Market Commentary:

At one point, the Dow fell 565 points on Wednesday before reversing around noon and rallying sharply into the close. Oil prices fell to $27/barrel, plunged over 6% and hit a fresh multi-decade low but also bounced and closed off their lows. Japan’s stock market officially entered bear market territory (decline >20% from a recent high) and MSCI all-country world stock market index is also flirting with a bear market as well.  Overall, the stock market remains very extended to the downside and is way overdue to bounce in the near term.

Gary’s Thoughts:  We wrote to you a couple of times on Wednesday telling you the market was ripe for a washout day and we may just have seen one. NOTHING IS SET IN STONE especially when dealing with the nuts at central banks as well as all the fast money but today’s wide daily price bars finishing near highs for several indices reminds us (notwithstanding the fake open) of August 24th. After that washout, markets stopped going down, edged up before retesting successfully weeks later…that is until the market recently cracked. We do not like micromanaging but micromanage we must right now. Just keep in mind, any rally from here comes out of weakness and is way overdue after 2250 Dow points in 14 days. In no way has the big picture changed. Earnings coming out in droves now so pay attention!

 

The Morning Look

Stock Market Overview:

Stock futures are down sharply before Wednesday’s open as investors continue to unload their positions. Oil prices fell overnight to a new multi-year low and continue to implode. This relentless selling further signals what Gary has been telling you for months: markets across the globe are forecasting a recession.

Gary’s Thoughts:  Soon the rest of Wall Street will be telling you what we have been telling you for months.

Economic Data:

  • Housing Market Index 10:00 AM ET
  • MBA Mortgage Applications 7:00 AM ET
  • Consumer Price Index 8:30 AM ET
  • Housing Starts 8:30 AM ET
  • Redbook 8:55 AM ET

Highlights Of The Day:

    • Earnings still a mixed bag as most companies still are not able to beat already lowered estimates
      Gary’s Thoughts: Earnings will be blah…and that’s being nice. 
    • A slew of Central Banks are meeting this week. Starting with the Bank of Canada and Brazil’s Central Bank on Wednesday
      Gary’s Thoughts: Playing space invaders.
    • Atlantic City mayor warns of possible bankruptcy
      Gary’s Thoughts: Possible? Probable!

The Closing Look

Stock Market Commentary:
Stocks ended mixed after trading between positive and negative territory on Tuesday as the S&P 500 retested Aug’s low. Oil negatively reversed and closed down on the day which is not ideal. Overnight, China said its GDP grew by 6.9% for 2015 which was the slowest pace since 1990! Additionally, China said Q4 2015 GDP grew by 6.8% year-over-year which matched estimates. In the U.S., December retail sales grew by 11.1%. Meanwhile, industrial production rose by 5.9%. Both came in below estimates. In other news, The International Monetary Fund (IMF) cut its global economic growth forecast for 2016 on Tuesday. The IMF now believes the global economy will grow by 3.4% in 2016, lower than the last forecast of 3.6%. The fact that the market can’t bounce from these deeply oversold levels continues to show you how weak the market is right now.

Gary’s Thoughts:  We must tell you that even with the stretched, extended and oversold condition this market has…and even though a good bounce would be normal, so far, bounces have lasted a day and rolled over quickly. Due to the fact  Monday’s action was again very suspect underneath the surface of a Dow that was up, we are thinking price may just have to move lower to attract any buying of consequence. The big picture remains gross…and we are being nice.

The Morning Look

Stock Market Overview:

U.S. stocks were closed on Monday in observance of the MLK holiday. Stock futures and oil are up nicely before Tuesday’s open. Overnight The People’s Bank of China set their currency (yuan) parity rate against the U.S. dollar to 6.5590. Since March 17, 2014, the yuan has been “allowed” to move 2% either side of the daily fixing against the dollar. In other news, China’s GDP fell to +6.8% which matched the Street’s estimate but was lower than the last reading of 6.9%. Stepping back the market remains very extended to the downside and it is way overdue to bounce from here. Gary has expressed caution and has been telling you about how the market has been getting weaker not stronger over much of 2015.

Gary’s Thoughts:  Counter trend rally in the makings. One has to happen…right? Last week’s bounces lasted a day. Also, massive amount of earnings the next 3 weeks. Pay attention!

Economic Data:

  • Housing Market Index 10:00 AM ET
  • 4-Week Bill Announcement 11:00 AM ET
  • 3-Month Bill Auction 11:30 AM ET
  • 6-Month Bill Auction 11:30 AM ET
  • Treasury International Capital 4:00 PM ET

Highlights Of The Day:

    • Another Debt Crisis Looming: Puerto Rico Says Shortfall to Increase to $23.9 Billion
      Gary’s Thoughts: They cannot possibly pay all the debt back.
    • Geopolitical Tensions Remain Elevated: Iran Captured U.S. Sailors at Gunpoint, Defense Department Finds and Prisoner Swap May Help Iran Arm Assad
      Gary’s Thoughts:  Such a deal!
    • Supply Glut Continues – Saudi Oil Exports Climb to Seven-Month High as Refineries Return
      Gary’s Thoughts:  Still amazed where oil sits.

The Closing Look

Stock Market Commentary:
Stocks fell hard on Friday as oil prices plunged nearly 5%. Stocks tried to bounce on Thursday but the fact that they can’t bounce from deeply oversold levels shows you how weak the market is right now. Stocks will be closed on Monday for the holiday but markets overseas will be open.

Gary’s Thoughts:  Yuck…but happy 3 day weekend!

The Morning Look

Stock Market Overview:

U.S. stock futures are down big on Friday giving back most Thursday’s strong upside reversal. Once again oil prices are tumbling and global markets are selling off. We have mentioned countless times that the market was deeply oversold and way over due to bounce. The inability to bounce speaks volumes to how weak the market is right now. Gary has expressed caution and has been telling you about how the market has been getting weaker not stronger over much of 2015 and has nailed it again for you in 2016.

Gary’s Thoughts:  “Bear market rallies are sharp, quick, make you feel good, suck you in and bury you soon after.” That’s our quote. But rallies are right now…ONLY LASTING A DAY before selling off sharply. Do we need to say this is the worst of all worlds for the bulls? Lastly, the esteemed Larry Fink of Blackrock said this morning that he doesn’t think this is a real bear market. With all due respect, either he is not telling the truth or he is living in Fantasy Land. If this is not a bear market, we hate to see what a bear market looks like.

Economic Data:

  • PPI-FD 8:30 AM ET
  • Retail Sales 8:30 AM ET
  • Empire State Mfg Survey 8:30 AM ET
  • William Dudley Speaks 9:00 AM ET
  • Industrial Production 9:15 AM ET
  • Consumer Sentiment 9:55 AM ET
  • Business Inventories 10:00 AM ET
  • John Williams Speaks 11:00 AM ET
  • Baker-Hughes Rig Count 1:00 PM ET
  • Rob Kaplan Speaks 1:00 PM ET

Highlights Of The Day:

    • The oversold bounce we have told you about finally happened on Thursday and we’ll see if it continues…
      Gary’s Thoughts: Ain’t happening!
    • Fed’s Bullard Did a 180 and Said Oil’s Fall May Delay Inflation Return to 2%
      Gary’s Thoughts: Gee…had no idea the Fed would start their flip-flopping.
    • The 6th GOP was hosted by Fox Business on Thursday
      Gary’s Thoughts: Marvelous debate!

The Closing Look

Stock Market Commentary:
The long over due bounce finally occurred on Thursday after the S&P 500 came in within a few points of “re-testing” August and September 2015’s low. All week, we have been telling you the market was very oversold and way overdue to bounce. That is exactly what happened on Thursday. The key now is to analyze the health of this bounce and see if it can last more than a few days.

Gary’s Thoughts: Best guess…think August 26th…more upside, back and fill, possible retest but think low is in for right now…but I do not think there is a ton of upside…but stretched, extended and oversold as all heck will now get worked off.