The Closing Look

Stocks slid on Wednesday, dragged lower by a steep decline in Gold and Silver. Gold and Silver stocks have been one of the strongest areas in the market all year but are now in pullback mode as they recently placed a near term top and broke below their respective 50 DMA lines on Wednesday. Economic data was mixed. Existing home sales slid by -3.2% last month to 5.39 million units, missing the Street’s estimate for 5.52 million. A separate report showed that home prices edged higher by 0.2%, also missing estimates for a gain of +0.3%.

Gary’s Thoughts: Crummy day. Our thoughts on gold/silver coming to fruition but that was ugly in the stocks. Market hit decently, especially healthcare. Probably on Hillary yapping about Mylan. We are actually complimenting her (really) as Mylan took advantage of a monopoly. Egregious and greedy come to mind.

The Morning Look

Market Update:

Stock futures are lower ahead of Thursday’s open as the market pulls back ahead of GDP and Yellen’s speech on Friday.

Gary’s Thoughts: A little more downside off of yesterday. Tomorrow, Yellen speaks. Hope she gets laryngitis.

Economic Data:

  • Durable Goods Orders 8:30 AM ET
  • Jobless Claims 8:30 AM ET
  • Bloomberg Consumer Comfort Index 9:45 AM ET
  • EIA Natural Gas Report 10:30 AM ET
  • Kansas City Fed Manufacturing Index 11:00 AM ET
  • Fed Balance Sheet 4:30 PM ET
  • Money Supply 4:30 PM ET

Highlights:

  • Gold and Silver stocks fell hard on Wednesday
    Gary’s Thoughts: Saw it coming but that was harsh.
  • Ford to Recall 91,000 Cars to Fix Fuel-Pump Issue
    Gary’s Thoughts: Recall city!

The Closing Look

Stocks rallied on Tuesday as investors digested the latest round of mixed economic and earnings data. Shares of Best Buy Co. Inc. ($BBY) gapped up after the retail giant reported earnings. The company said online sales helped last quarter and they are going to do more to win market share back from Amazon.com (AMZN). On the economic front, a few European PMIs were released and they did not show a major post brexit slowdown, as so many people had feared. In the U.S., new home sales in July unexpectedly jumped to the highest level in almost nine years. New home sales came in at 654k, beating estimates for 580k. A slew of housing stocks rallied on the news. Separately, the Markit Manufacturing PMI for August, came in at 52.1, missing estimates for 53.2.

Gary’s Thoughts: BBY sales growth…a big fat 0%. Otherwise, market better than Dow up 17 but not as good as Dow up 100. Gold/silver stand out as a continued topping process (for now). A few too many names now below 50 day.

The Morning Look

Market Update:

Stock futures are quiet ahead of Wednesday’s open as the market continues trading in a relatively tight trading range.

Gary’s Thoughts: Quiet is the word. Not much to add.

Economic Data:

  • MBA Mortgage Applications 7:00 AM ET
  • FHFA House Price Index 9:00 AM ET
  • Existing Home Sales 10:00 AM ET
  • EIA Petroleum Status Report 10:30 AM ET
  •  2-Yr FRN Note Auction 11:30 AM ET
  • 5-Yr Note Auction 1:00 PM ET

Highlights:

  • Tesla Unveils New Model S, Its Quickest Production Car
    Gary’s Thoughts: Stock down…make an announcement. In case you did not know, Tesla loses $20,000 every time they make a car.
  • McMansions Define Ugly in a New Way: They’re a Bad Investment
    Gary’s Thoughts: Jealousy?

The Closing Look

Stocks were quiet on Monday as oil prices fell by over -3%. In recent sessions, oil flirted with resistance near $50/barrel and is now pulling back a bit. In M&A news, Pfizer ($PFE) said it will acquire Medivation ($MDVN) for $81.50/share, or about $14 billion in cash. Medivation has one big cancer drug that attracted Pfizer to the deal. Pfizer out bid four other firms. A few biotech stocks rallied on the news. Technically, the market continues acting well as it remains perched just below record highs.

Gary’s Thoughts: Biotech bump on another buyout. Expect more as easy money makes it easier. We are perplexed why some claim the tight action in the indices was bearish. After a move up, it is normal to consolidate. No matter what, with tight action, the next good move wins.

The Morning Look

Market Update:

Stock futures are higher ahead of Tuesday’s open as the market remains strong.

Gary’s Thoughts: Futures are up just beacause. Watch financials and watch major indices from the past few week’s tight action. A move above and ….

Economic Data:

  • Redbook 8:55 AM ET
  • New Home Sales ]10:00 AM ET
  • Richmond Fed Manufacturing Index 10:00 AM ET
  • 4-Week Bill Auction 11:30 AM ET
  • 2-Yr Note Auction 1:00 PM ET

Highlights:

  • New Batch of E-Mails Add to Clinton Woes Over Server, Foundation
    Gary’s Thoughts: Criminal activity in plain sight but media says nothing here. If it was a Republican, there would be 24 hour investigations and colonoscopies.
  • Student Loan Refinances Are Not Easy To Get
    Gary’s Thoughts: Another government mess.

Weekend report!

None of our themes have changed.

The breakout of the 18 month trading range in the Dow and S&P was nothing but bullish. We said that based on precedent. Whenever a couple of major indices break out of long ranges, it usually works for a while. But there was something else that was also very bullish and that was the 11 percent cash in mutual funds and pension funds. A breakout combined with that kind of ammo is a great one-two punch. Just remember, as markets go higher, managers that have too much cash feel the breathing down their necks…thus things tend to feed on themselves.

Another one of our themes confounds the masses and that is that earnings and sales growth continues to stink. Economies here and around the globe remain subpar at best. Debt and deficits continue to explode upwards. Normally this would be a problem for markets but there are other forces at work. We continue to expect a day of reckoning but have no idea on what day or from what price it starts.

Lastly, we continue to believe this market move is the result of another ramping up and is a continuation of the huge, gargantuan, humongous, monolithic and unfathomable easy money policies by just about every player around the globe. We have highlighted for you the 0% rates, the printing of (depending on what abacus you are using) over $20 trillion and counting, negative rates and the outright buying up of markets by central banks.  We could have never predicted how far these maniacs would raise the bar or should we say lower the bar when it comes to manipulating and rigging of markets. They will never be able to roll this back. They wouldn’t even dare. Since the low of February, we have seen lower negative rates, more printing of money, more buying up of markets and that is just what they tell us. By our count, the globe is printing more than $250 billion/month in order to keep markets and economies afloat.

Near term:

Feels like gold/silver are on pause. After a good move up, this is normal. We actually saw some names breaking the 50 day for the first time in a while.

Semis remain en fuego as there seems to be a buyout every week.

Financials still lag but are set up here to move higher. One good day takes them out of range. If that occurs, another point for the market.

Defensive areas are no longer leading as reits and utilities act poorly. Also seeing some suspect action in consumer staples though some names look just fine.

Indices have been very tight over the past couple weeks. A good day takes them topside but a bad day takes them in pullback mode.

Lastly, for the first time in a couple years, beta is picking up. We are also seeing some strong action in recent IPOs. This is good news. We read others saying this is not good for markets…disagree.

The Morning Look

Market Update:

Stock futures are a little lower ahead of Monday’s open as the market remains strong.

Gary’s Thoughts: No biggie. Indices remain tight.

Economic Data:

  • Chicago Fed National Activity Index 8:30 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

Highlights:

  • Promised prosperity never arrived in Russian-held Crimea, locals say
    Gary’s Thoughts: Ya think!
  • Turkey Blames ISIS For Child Suicide Bombing at Wedding Over The Weekend
    Gary’s Thoughts: Ya think part 2!

The Morning Look

Market Update:

Stock futures are lower ahead of Friday’s open as the market pulls back from record highs.

Gary’s Thoughts: No way…futures down? Of course, it will get bought up as market never goes down. Bazinga! Watch oils. Watch financials…and for a chancge, those numbers for AMAT were very good.

Economic Data:

  • Baker-Hughes Rig Count 1:00 PM ET

Highlights:

  • Stocks On Track For First Real Down Week Since Brexit
    Gary’s Thoughts: Down? We know down? That’s not down!
  • Oil Rallies on the Back of Frozen Hope
    Gary’s Thoughts: Say what?
  • NBC’s $12 Billion Olympics Bet Stumbles, Thanks to Millennials
    Gary’s Thoughts: We believe many of the Olympic announcers were subpar and unexciting. Also not thrilling to see such empty stands. IOC needs to rethink things!