The Morning Look

Market Update:

Stock futures are down ahead of Friday’s open as investors digest a busy week of economic and earnings data.

Gary’s Thoughts: Futures worsening as we get near open. MSFT big gap off of flat sales…go figure. MCD beats and rallies…been a terrible stock. Very interested to see if as usual, buyers stop any bleeding preventing indices from breaking another area of important support.

Economic Calendar:

  • Daniel Tarullo Speaks 10:15 AM ET
  • Baker-Hughes Rig Count 1:00 PM ET
  • John Williams Speaks 2:30 PM ET

Highlights:

  • ECB Does Not Announce “More” Easy Money
    Gary’s Thoughts: Wanna make a bet?
  • Wells Fargo just lost its accreditation with the Better Business Bureau
    Gary’s Thoughts: Stupid! Wells Fargo is a great company that screwed up badly. They will pay the price for their indiscetions. Most of its business is sound and they will fix this up. We have no skin in the game defending them.

The Closing Look

Stocks ended mixed on Wednesday, helped by a huge rally in crude oil. Crude oil broke out to a 15-month high after the Energy Information Administration reported a 5.3 million draw-down in inventory. Tighter supply concerns helped crude oil breakout and hit a fresh high for the year ahead of OPEC’s meeting next month (where they are projected to cap or cut supply). Elsewhere, earnings continued to be a mixed bag while economic data failed to impress. Housing starts came in at 1.047M, missing estimates for 1.180M which put pressure on a slew of housing stocks. Finally, the Fed’s Beige Book showed moderate economy activity.

Gary’s Thoughts: Financials and oils day with a somewhat disappointing finish. Intel did not affect the semis in the least as the SOX bounced right off the 50 day moving average. Major indices remain nauseatingly range-bound.

The Morning Look

Market Update:

Stock futures are flat ahead of Thursday’s open as investors digested the final Presidential Debate, the latest ECB meeting (they did not add more easy money), and the latest round of earnings data.

Gary’s Thoughts: Futures down a wee bit after being up most of the night. Earnings have been blah but many companies smart enough to guide down during quarter in order to beat the number.

In election news, you obviously know what we think but the big story is that Trump does not have a good ground game, has not been spending money like Clinton and is not campaigning in the right states. If the election was held today, we believe the crook would get at least 300 electoral votes putting this woman into the White House for 1460 days. We think there is a decent chance of a 50-50 tie in the Senate thus the tiebreaker goes to the Dems but we do not think the Dems get the house. Of course, there is just under 3 weeks left so things could change.

Economic Calendar:

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

Highlights:

  • Investor Cash Levels Jump Toward Levels Not Seen Since 9/11
    Gary’s Thoughts: This is actually potentially bullish as cash is potential ammo.
  • Presidential Election Enters The Final Stretch…
    Gary’s Thoughts: Can’t wait til it is over.

The Morning Look

Market Update:

Stock futures are higher ahead of Tuesday’s open as investors wait for a slew of earnings to be announced this week.

Gary’s Thoughts: Not just higher…very much higher. As you know, markets have edged down to vital support…and this morning, that support holds as markets up almost 1% BEFORE THE OPEN.

NFLX nice gap up on better numbers. Dow names GS and UNH also up. Dow names IBM and JNJ are down.

Keep in mind, the tape has become a mess but the major indices only dropped to support. Let’s hope this is a launching pad-type move into the end of the year. We are getting near the November/December period.  Also keep in mind, every strong up day has been met with a bad down day and vice-a-versa.

Economic Calendar:

  • Consumer Price Index 8:30 AM ET
  • Redbook 8:55 AM ET
  • Housing Market Index 10:00 AM ET
  • 4-Week Bill Auction 11:30 AM ET
  • Treasury International Capital 4:00 PM ET

Highlights:

  • Apple Dramatically Scales Back Its Big Automotive Plans
    Gary’s Thoughts: Good!
  • Rents Are Down in Manhattan. You Still Can’t Afford to Live There
    Gary’s Thoughts: Bubble!
  • Goldman Says U.S. Bondholders Risk a $1.1 Trillion Hit if Rates Spike
    Gary’s Thoughts: You damn straight. Bubble!

The Closing Look

On Monday, stocks were mostly lower as investors digested the latest round of economic and earnings data. Before the open, Bank of America (BAC) reported earnings and beat estimates but the stock didn’t rally. Around mid-day, Fed Vice Chair Stanley Fischer warned investors that if rates stay low for a long time it could lead to a deeper recession and make the economy more vulnerable in the future. Economic data was weak. The Empire State Manufacturing survey fell to -6.8, missing estimates for 1.0. Elsewhere, industrial production slid to 0.1%, missing estimates for 0.2%.

Gary’s Thoughts: NFLX strong after the close.. IBM yuck. But after scanning 1500 stocks tonight, there continues to be lots going wrong with this market as we enter the meat of earnings season. Hopefully, that turns it around but not so sure. 18000 DOW and 2119 S&P better hold.

But don’t worry…there is no bubble!

We love how the media describes the gargantuan printing of money, the gargantuan monetizing, the gargantuan creation of debt out of thin air. They describe it as assets. Let’s be clear. It is not an asset. It is a big, gargantuan ass that is causing major bubbles, major distortions and who knows what else. These select few central bankers that do not have a clue how markets and economies work continue with their unprecedented experiment. Their only move now is when anything gets in trouble, just print more. Why not $30 trillion? Why not $50 trillion? Why not $100 trillion? We have news for you…that’s where we are headed unless a savior shows up and shuts them down. We do not expect that to happen. We do expect the markets to have the final word.

Source:http://www.bloomberg.com/news/articles/2016-10-16/big-central-bank-assets-jump-fastest-in-5-years-to-21-trillion

THE FLIM FLAM ADMINISTRATION

 “THE FLIM FLAM ADMINISTRATION!”

By Gary Kaltbaum -10/16/2016
President, Kaltbaum Capital Management
Fox News Business Contributor
While everyone is talking about the election…whether it is the sleaze coming out of one side or the corrupt, influence peddling, criminal enterprise coming from the other side, we have news for you. There is something much more important that is not being talked about…and that is the con artists from the current administration on the state of the economy and its underlying termites that are eating away at its structure. To be clear…who do you think just said this?
“The Obama Administration’s agenda has spurred durable economic growth and the longest streak of job growth on record, while sharply reducing the deficit to a sustainable level! We have built a solid foundation for continued investment in economic growth and opportunity for all, while maintaining fiscal discipline and using fiscal space appropriately to grow the economy.”
It’s none other than Jack Lew, our fantastic Treasury Secretary. In case you did not know, here is the mission statement of his job:
“Maintain a strong economy and create economic and job opportunities by promoting the conditions that enable economic growth and stability at home and abroad, strengthen national security by combating threats and protecting the integrity of the financial system, and manage the U.S. Government’s finances and resources effectively.
I know some of you are thinking, where has Jack Lew been? Good question because I think I have only seen him a couple of times over the past couple of years. The one thing we did not know about his mission is that he is supposed to lie about the state of the economy, the state of employment and the state of the deficits. It just goes down under the heading…we think no one is watching, we think no one is listening and we think no one is paying attention so we will just make it up. The facts are:
Durable economic growth? Durable economic growth should not take 0% rates for 8 years, the printing of almost $5 trillion, the buying up of bonds to rig interest rates down to the bone and the increasing of easy money every time markets go down. Durable economic growth? Not 1 year with over 3% growth and now they take victory laps with GDP in the 1 percents even with the most gargantuan easy money policy in history not only here but from the lemmings around the globe.
Deficits at a sustainable level? Fiscal discipline?This year’s stated fiscal deficit is almost $600 billion. That’s $600 billion! Sustainable my —! Think about this…even though the government took in $3.3 trillion…the most ever, they had the grapefruits to spend $3.9 trillion. Did you know the last year of Bill Clinton’s presidency saw federal spending at $1.8 trillion? So an increase of $2.1 trillion since 2000 and they still say there isn’t enough and they need more for the holy grail of infrastructure. This makes anyone with a decently working abacus want to vomit. And by the way, the dirty little secret is that deficits are now heading back to about $1 trillion each year. And let us not forget, they can’t even get it under control with 0% rates. If rates start heading north, that’s going to be yummy as the costs to fund the gargantuan debts skyrocket. And let us not forget part 2…Mr. Lew forgets to mention that under this administration, total debt has gone up a humongous, monolithic, gargantuan $9 trillion. Yup Jack…a solid foundation and a sustainable level. Why do you think Yellen is loathe to raise rates? 
Protecting the integrity of the financial system?  By screwing savers? By creating massive bubbles by interfering with free markets? By watching leverage in the system grow to higher levels than the 07-08 debacle? That sure is integrity Jack!
Job growth? Hey Jack…who are you trying to kid?  Maybe you are trying to kid the 90 million-plus that you tell us are out of the workforce which easily distorts the real unemployment rate? Those of us that are really watching know a con when we see one.
Nothing personal but this is nothing more than flim flam in action…out front and center for a flim flam administration and a compliant media that has no interest in mentioning these numbers the past 8 years.  His words were an insult to all of our intelligence and an outright lie to the American public on behalf of the worst administration in history on the handling of our treasure, our hard earned dollars. Jack Lew and this administration has overseen a termite infested fiscal mess that will 100% come back to haunt all of us. But lucky for Jack Lew and the rest of this administration that they will all be  be long gone when the chickens come home to roost. I am sure they will all be back in either Wall Street jobs or become lobbyists, lobbying their good friends in Washington in order to screw the taxpayer even more…just from the other side. Sorry for the harsh but it is well deserved. We all know the ultimate outcome! Don’t we? It is just a matter of when!

The Morning Look

Market Update:

Stock futures are lower ahead of Monday’s open as investors digest wait a slew of earnings to be announced this week.

Gary’s Thoughts: Will have our weekend report tonight as we were traveling. Futures basically flat but after reversing up Thursday, we reversed down Friday with more deterioration. But indices have not broken support yet. But to be clear, watch it closely as more deterioration will certainly get them. Earnings come out in droves now. Not thrilling that gaps to the upside in financials on Friday were sold off. Will keep watching as well as watching the SOX. Held 50 day again but action starting to look suspect. Still have good relative bid in oils as oil prices remain firm.

Economic Calendar:

  • 3-Yr Note Settlement
  • 10 Yr Note Settlement
  • 30-Yr Bond Settlement
  • Empire State Mfg Survey 8:30 AM ET
  • Industrial Production 9:15 AM ET
  • Stanley Fischer Speaks 12:00 PM ET

Highlights:

  • Yellen’s Talk of Hot Economy Sinks Long-Bonds
    Gary’s Thoughts: Hot economy? Maybe in Albania!
  • More Than 1 Million to Lose Obamacare Plans as Insurers Quit
    Gary’s Thoughts: As we told you 3 years ago, there is only one outcome of a government healthcare plan that had no chance because it never had logical economics…history!

The Closing Look

Stocks opened higher but closed mixed on Friday after JPMorgan Chase (JPM), Wells Fargo (WFC) and Citigroup (C) all reported stronger-than-expected quarterly results. Sellers showed up shortly after the open and the market spent the rest of the day drifting lower. Janet Yellen gave a speech and said easy money is prudent whenever the economy gets in trouble. Next week, over 80 S&P stocks are scheduled to report earnings, including Bank of America, Netflix, BlackRock, Goldman Sachs, United Continental, just to name a few. For the week, stocks fell hard and are flirting with important support (Sep’s low).

Gary’s Thoughts: Yesterday…market opens poorly…reverses up. Today…market opens hot…reverses down. Supposed good banking earnings get sold off after strong open. Hmmm! Major indices remain BELOW support/moving averages with a decent amount of deterioration. A ton of earnings to come out in the next 3 weeks.

The Closing Look

Stocks opened sharply lower on Thursday after China said exports plunged 10% overnight. China is a major exporter so the fact that exports are down 10% reflects poorly on the health of the already fragile global economy. Right after the open, the Dow Jones Industrial Average & the S&P 500 briefly undercut important support (September’s low that Gary has highlighted for you) before buyers showed up and helped defend that important level by the close.

Gary’s Thoughts: Mr Market had a chance to break some vital support but the pixie dust sprinkled down and support held after undercutting. This is quite important. Doesnt mean we are going anywhere to the upside but goal-line stand held. Tomorrow, a few important financials report. Pay attention. We did want to mention a few leading names bounces tepidly off of the 50 day average and we may have a group trying to actually emerge in the airlines as many now trying to come up the right side of bases. Normally, when markets have washouts, you get some upside testing.