The Closing Look

On Wednesday, stocks were higher but fell after the Fed released the minutes of its latest meeting. The minutes showed the Fed would entertain a potential June rate hike if economic conditions improved. The USD rallied hard on the news and a slew of commodities fell. Financial stocks were bid higher all day after the bulls showed up and defended the 50 day moving average.

Gary’s Thoughts: The fed is changing with the wind! No comment! Not thrilled!

“RATE HIKES? AND THE KNICKS WILL WIN THE NBA TITLE!”

“RATE HIKES? AND THE KNICKS WILL WIN THE NBA TITLE!”
By Gary Kaltbaum
May 19,2016
Headline: “In a clear message to the market, the Fed says rates may rise again in June.” Say what? Clear message? What clear message? Wasn’t it just a few weeks ago these same people said they were worried about international issues and had to stand pat for now? Didn’t Mrs. Bubble just state that they could print more money if need be? Wasn’t everybody saying they’ll be no more rate hikes this year? So we are now to believe that while around the time they were telling everybody they need to sit on rate hikes, they were also stating the opposite in meetings. Kids…we suggest to you these people would fall over in a 3 MPH wind. They change their tune on every data point, every market move and every change in the wind. They change their words based on what day it is. Clear message? We guarantee you by the time the next meeting comes around, we will hear 50 different thoughts from 10 different Fedheads all contradicting each other and all changing their tune at least once. These are people that are flying by the seat of their pants. These are people that wake up every morning and see the market go down and say one thing and then see the market go up the next day and say another thing. They get one report that looks good and it’s time to hike. They get another report that looks bad and it’s time to sit. Unfortunately, we continue to deal with a bunch of ex-tenured professors that have no understanding of markets or the economy…yet, they have their finger on trillions to try and move markets and the economy. $20 trillion of printed money, 0% rates for 8 years, negative rates and the outright buying of markets….and what have we got…nothing but a massive increase in debt and leverage built up around the globe, enabled by these same people. It is this debt that continues to undermine economies going forward. It is this debt that eventually leads to the comeuppance! Clear message? Who are they trying to kid?

 

We were going to report on this but this covers it all! Wither Venezuela!

SOURCE: http://www.zerohedge.com/news/2016-05-18/venezuelan-police-unleash-tear-gas-rubber-bullets-amid-violent-anti-government-prote

The Morning Look

Market Update:
Futures are lower ahead of Thursday’s open as investors digest another volatile week on Wall Street. Stocks were up big on Monday, down big on Tuesday, then were up most of Wednesday before turning lower after the Fed minutes were released. Lots of areas of the market are beginning to roll over and any further selling will signal real trouble for the market. And airplane crash (most likely terrorism) does not help.

Gary’s Thoughts:

  • Jobless Claims 8:30 AM ET
  • Philadelphia Fed Business Outlook Survey 8:30 AM ET
  • Chicago Fed National Activity Index 8:30 AM ET
  • Bloomberg Consumer Comfort Index 9:45 AM ET
  • Leading Indicators 10:00 AM ET
  • EIA Natural Gas Report 10:30 AM ET
  • William Dudley Speaks 10:30 AM ET
  • Fed Balance Sheet 4:30 PM ET
  • Money Supply 4:30 PM ET

Highlights:

  • The US dollar rallied after the Fed minutes left the door open for a June hike
    Gary’s Thoughts: Enough on the Fed this morning.
  • Wells Fargo Cuts Target on Valeant Citing Potentially ‘Brazen’ Executive Pay Packages
    Gary’s Thoughts: Valeant a criminal operation.

The Morning Look

Market Update:
Futures are lower ahead of Wednesday’s open as investors pause to digest Monday’s strong rally and Tuesday’s steep decline. Lots of areas of the market are beginning to roll over and any further selling will signal real trouble for the market.

Gary’s Thoughts: Nothing thrilling to talk about this morning and now another retailer (Target) coughs one up.

  • MBA Mortgage Applications 7:00 AM ET
  • Atlanta Fed Business Inflation Expectations 10:00 AM ET
  • EIA Petroleum Status Report 10:30 AM ET
  • FOMC Minutes 2:00 PM ET

Highlights:

  • LendingClub Tumbles After Investors Suspend Debt Purchases
    Gary’s Thoughts: Party over. We have been skeptical of these types of companies for a couple of years.
  • Bill Clinton Says He’s Asked for Role in Wife’s Administration
    Gary’s Thoughts: Go away!

The Closing Look

Stocks ended lower on Tuesday as investors continue to digest the latest round of economic and earnings data. On the economic front, the consumer price index (CPI) rose to 0.4%, beating estimates for 0.3%. That was the highest increase since 2013 and was the first real sign that inflation may be increasing. If inflation accelerates from here, that may put pressure on the Fed to raise rates at some distant point in the future. A separate report showed that housing starts picked up at a moderate pace in April and rose to 1.172M, beating estimates for 1.135M. Meanwhile, earnings failed to impress as Home Depot (HD) fell after reporting Q1 results.

Gary’s Thoughts: Ick! Not sure it is good news when market bounces back and forth 200 points each day. Not a good day technically. Even the Transports, which were up 160, finished only up in the 40s. And do not believe any noise about good economy. And really do not believe a fedhead coming out saying they will raise rates 3 times this year. No chance.

The Closing Look

Stocks rallied nicely on Monday as investors showed up and defended key levels of support (50 DMA line) for the Dow Jones Industrial Average, the S&P 500 and several other important sectors. Overnight, China said industrial production, retail sales and investment data all missed estimates. China also said that measures of money creation and credit growth also came in below estimates. Separately, in his quarterly filings, Warren Buffet said he bought $1 billion of Apple (average price $102) in Q1 2015.

Gary’s Thoughts: Good up day after a bad down day. Seems we are getting a lot of this. But still running in place with a decent amount of areas that had just broken support.

The Morning Look

Market Update:
Futures are lower ahead of Tuesday’s open as investors pause to digest Monday’s strong rally. Lots of areas of the market were beginning to roll over last week so yesterday was an important day for the bulls to defend support.

Gary’s Thoughts: Watch the 50 day on the Dow and S&P. Watch them financials at support.

Economic Data:

  • Consumer Price Index 8:30 AM ET
  • Housing Starts 8:30 AM ET
  • Redbook 8:55 AM ET
  • Industrial Production 9:15 AM ET
  • E-Commerce Retail Sales 10:00 AM ET
  • John Williams Speaks 12:00 PM ET
  • Robert Kaplan Speaks 1:15 PM ET

Highlights:

  • ‘Captain America: Civil War’ Gives Disney Fifth Straight Win
    Gary’s Thoughts: Everyone loves superheroes.
  • Sheldon Adelson may spend more than $100M to boost Trump campaign
    Gary’s Thoughts: The dude throws around the cash!

Thine weekend report!

First…the Trumpster. We will say it again…and will report why in a future report…but unless it is found out Donald Trump is a member of Isis, like it or not, get used to “President Trump” for the next few years. And every time another celebrity says they are moving out of the U.S. is Trump wins, he gets more votes.
And the market:
On April 21, we started thinking and reported to you that the markets were hitting their highs for now. Since, nothing has happened to change that stance. In fact, everything that has happened has confirmed that stance as more and more areas and more and more stocks are breaking down.

For starters, retail, which we have been bearish on even during the rally…is crashing. We do not use a word like that lightly. Retail stocks are simply crashing.

On top of that, the all important semiconductors topped on April 28th and broke down badly the next day.

Biotechs, which never got going, are crumbling with many close to new yearly lows.

Small caps continue to under-perform large caps. This seems to have been going on forever.

The transports have rolled over badly and broke badly below the 50 day average.

The strongest groups remain the most defensive of areas in utilities, reits and consumer staples.

Other problems:

Foreign markets have completely under-performed with many breaking down.

New yearly highs never got going. In fact, there have been more yearly lows than yearly highs on the Nasdaq the past few days.

Financials, which also have lagged, have been rolling over a bit the past few days. If they head lower, markets will head lower.

The Dow and S&P just broke a midge below the 50 day. A goal-line stand is quite needed here.

All this and the same Dow and S&P are just off their highs telling you that again, underneath the surface, the internals have been deteriorating rapidly.

Have we thrilled you yet? Stay tuned! Markets are shorter-term oversold with bearishness picking up, so bounces are due…but this second, that’s all the market has going for it right now. Of course, QE4 can be announced at any time. No…not kidding!

The Closing Look

It was an ugly day and week on Wall Street. Stocks fell hard on Friday and several important areas of the market broke below important levels of support. Before Friday’s open, the government said Retail Sales rose by 1.3%, which was the highest jump since March 2015. Meanwhile, in the real-world, retail stocks are getting mauled. Elsewhere, The Dow, S&P 500, and a slew of financials, broke below their respective 50 DMA lines.

Gary’s Thoughts: TEETERING!