The Closing Look

Stocks fell hard on Monday as the post Brexit selling continued from Friday. We have no idea how these rating agencies are still in business (after missing all of 2008) or why anyone listens to them, but stocks sold off after Standard & Poor’s lowered the United Kingdom’s sovereign credit rating from “AAA” to “AA.” S&P cited last week’s referendum as the catalyst. In the short term, stocks are very extended to the downside.

Gary’s Thoughts: Put buying spiked indicating heavy fear and bearishness. It is end of quarter as well as pre-holiday. And…the market is about as stretched and extended to the downside in 2 days as we have ever seen…so would not be surprised to see some relief back up. It would be quite normal. We cannot begin to tell you what kind of damage we have seen in foreign markets affected. Wow!

The Morning Look

Market Update:

Stock futures are up nicely ahead of Tuesday’s open as the market bounced from oversold levels and investors digest Friday and Monday’s steep sell-off.

Gary’s Thoughts: We wrote at the close yesterday: “Put buying spiked indicating heavy fear and bearishness. It is end of quarter as well as pre-holiday. And…the market is about as stretched and extended to the downside in 2 days as we have ever seen…so would not be surprised to see some relief back up. It would be quite normal. We cannot begin to tell you what kind of damage we have seen in foreign markets affected. Wow!”

AND THIS MORNING…we get the obligatory big gap to the upside. Central banks are coordinating. The G-7 is talking. All the people that have caused the massive debt, leverage and deficits are now going to mend things. Feel better? Just remember, on a short-term basis, at the close yesterday, things basically could not get any worse (well maybe), thus we rally back up some. Do not forget, we are end of quarter, pre-holiday.  We will know a lot more on how this nausea and how this nonsense bounces. DON’T BLINK! Just remember…the only goal by those in charge is to keep markets from tanking!

Economic Data:

  • GDP 8:30 AM ET
  •  Corporate Profits 8:30 AM ET
  • Redbook 8:55 AM ET
  • S&P Case-Shiller HPI 9:00 AM ET
  • Consumer Confidence 10:00 AM ET
  • Richmond Fed Manufacturing Index 10:00 AM ET
  • State Street Investor Confidence Index 10:00 AM ET
  • 4-Week Bill Auction 11:30 AM ET

Highlights:

  • Cameron Rejects Repeat Brexit Vote
    Gary’s Thoughts:  You never know with socialists.
  • S&P Rating Agency Cut U.K.’s Rating by Two Notches
    Gary’s Thoughts: To our eyes, that is nothing more than…”here’s what you get for being stupid!”

Thoughts on brexit and markets

If you want to know what happened last week on why most were on the wrong side of the vote, we think the following quote may just be appropo!
“There is no such thing as public opinion. There is only published opinion.” – Winston Churchill
The following would be our normal report based on normal market occurrences based on what we saw last week:
Before Friday, markets were already less than meets the eye considering the Dow and S&P were a stone’s throw away from their yearly highs.
Retail has been trashed. Travel-related has been trashed. Biotech has been trashed. Financials cannot get out of the starting blocks. Asset managers remain weak. Autos and auto parts yuck. Apparel smoked. Airlines at yearly lows. Most foreign markets terrible. Emerging markets gross. New highs vs new lows not keeping up…not nearly enough. Small caps continue to underperform badly. We simply should not be able to say all this in a very strong market.
And then there was Friday. The outcome:
Everything (except gold,silver,utilities and some defensive names) has topped. The worse got worser and the best came down hard…
The DOW sliced through 14 weeks of range.
The S&P did the same.
The TRANSPORTS broke 4 months support.
The FINANCIALS topped and broke  2 month support.
The NASDAQ rolled over badly…ditto the NDX.
The EAFE index crumbled and we mean crumbled.
Asia and Europe went splat. They were already weak.
Big top in INDUSTRIALS.
Big top in TECHNOLOGY.
The SOX goes from new highs to giving back all its recent gains in a day.
We can go on but you get the point. In a normal world, a major top has been put in place…BUT:

That all said, there is absolutely nothing normal about the outside influences in the market. Keep in mind, what you are seeing in Britain is the outcome of distant, unaccountable bureaucrats dictating to others how they should be, what they should do and how they should act. We expect the news to be fluid. Article 50 is a treaty where anyone who wanted to leave the EU has 2 years of negotiating  and also needs the rest of the nations to vote yes…so more uncertainty lies ahead. We expect the people in power to say stupid things and more than likely do stupid things. Didn’t you know everyone who voted to leave was racist and xenophobic? Remember this is all about people wanting power. This is all about people wielding that power. 

We expect the maniacs in government and central banks to take more crazy action if markets continue to swoon. We do not know how much or in what form but unfortunately they stand at the ready. Just remember what we’ve been telling you. Central bankers have one goal in mind and that’s to prevent markets from going down. They have interfered in every way, shape and form and expect that to continue. Whether or not that turns the tide is another story. Stay tuned.  
The positives are that we are entering end of quarter as well as a holiday while a big dose of bearishness has picked up…but that may not matter right now.

The Morning Look

Market Update:

Britain voted to LEAVE the EU and shocked investors. Stocks around the world are plunging and U.S. futures are sharply lower ahead of Friday’s open as invest digest the Brexit vote. Gold is surging and the British Pound is crashing! It will be very interesting to see how this plays out.

Gary’s Thoughts: Hey…how’s your morning? Surprise, surprise, surprise! We are being inundated with questions about what we think about markets off of today’s reaction…ANSWER…don’t know. Will be watching. The optimist in us says that central banks will be in there doing what they usually do, intervene…and things will stabalize but that’s just a guess. Keep in mind, markets have been bleh! coming into today. Just remember, this is AN OUTLIER MARKET EVENT. Our job is to just sit back, settle down and see how things flush out. We will have a big report on the markets as well as what we think of the BREXIT over the weekend. Also, we are posting a webcast this weekend. You can get it at garyk.com.

Economic Data:

  • Durable Goods Orders 8:30 AM ET
  • Consumer Sentiment 10:00 AM ET
  • Baker-Hughes Rig Count 1:00 PM ET

Highlights:

  • Led Zeppelin Wins ‘Stairway to Heaven’ Lawsuit
  • Gary’s Thoughts: Greatest song ever.
  • BofA to Pay $415 Million Over Claims It Misused Client Funds
    Gary’s Thoughts: How much more are these banks going to pay in fines?

The Morning Look

Market Update:

Futures are higher ahead of Thursday’s open as investors wait for the outcome of the much anticipated Brexit vote. The United Kingdom will vote in a referendum to decide whether Britain will remain in the European Union (the referendum is known as the “Brexit”). Polls will open at 2 a.m. EDT and close at 5 p.m. EDT on June 23. There is no official exit poll. The final result is expected at approximately 1 a.m. EDT on Friday, June 24

Gary’s Thoughts: As we told you yesterday, futures up nicely off of new polls showing REMAIN in the EU. We hate the fact we have to be held hostage with something like this and beleive the masses have used scare tactics on how bad things would be if the UK decided to leave. But looks like that isnt going to happen. So another gap to the upside….stay tuned!

Economic Data:

  • Jobless Claims 8:30 AM ET
  • Chicago Fed National Activity Index 8:30 AM ET
  • PMI Manufacturing Index Flash 9:45 AM ET
  • Bloomberg Consumer Comfort Index 9:45 AM ET
  • New 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
  • Robert Kaplan Speaks 6:30 PM ET
  • Brexit Vote

Highlights:

  • Clinton Foundation Said to Be Breached by Russian Hackers
    Gary’s Thoughts: Even the Russians are holding their nose!
  • Trump Bashes Clinton, Clinton Bashes Trump
  • Gary’s Thoughts: 6th grade nonsense!
  • Burger King Jumps Into Snack-Brand Hybrids With Mac ’n Cheetos
    Gary’s Thoughts: Why not? Chocolate cheetos?

The Closing Look

Stocks fell on Wednesday as Yellen wrapped up her testimony on Capitol Hill and investors waited for Thursday’s Brexit vote. Stocks were mostly quiet with a little bounce in health care stocks early in the day on a favorable court ruling. But sellers showed up by the close and erased some of the gains by the close. After Tuesday’s close, Tesla (TSLA) made a bid to acquire Solar City (SCTY) and Tesla gapped down on the news.

Gary’s Thoughts: Don’t worry. Today’s reversal has already reversed back up in the aftermarket as another poll says Brexit will not happen. Dont you just love this? Brexit announcement will be Friday night et at 1 am. Yippee!

Gary on stuff!

By Gary Kaltbaum- June 22,2016
A few thoughts one having nothing to do with the other:
We think the dreaded Brexit is not the big deal pundits are making it out to be. A) We think odds favor the vote will go against leaving. Human psychology does not like change. But to our bleary eyes, even if the vote is a “yes” to leave, what changes? Are people not going to wake up and go to work? Is the world really going to end? After all, the U.K. is quite the self-sustaining place with their own currency. Of course, this is just guessing but how many times have we heard the call for “end of the world”-type scenarios and then…crickets!
Leave no doubt, this proposed Tesla for Solarcity incestuous buyout is an owner saving a company from extinction. Nothing more!
Oooops…Janet is all of a sudden again worried about the global economy. Nope…she is worried about global markets but firstly, she is worried about the upcoming election. As we have stated, there will be no rate hikes the rest of this year and if things turn down meaningfully, you did notice she said it was completely legal for the Fed to go to negative rates?
Two weeks ago on the weekend Fox News show, “Cavuto On Business”, we simply stated that things are going to be different for Donald Trump moving forward. During the primary, he was up against Republicans…thus the media played nice-nice. We went on to state that now that he was up against Hillary, that same “nice-nice” media would go after him with sharp teeth and a fervor we had not seen in ages.

At that time, the big news was that there was a criminal investigation into Clinton’s emails…crickets. What did the media report? The only headline we saw was about Donald Trump supposedly not paying bills decades before. Well, we woke up this morning to a CBS Trump interview. Amazingly, a CBS head honcho told Trump that some economists believed his economic policies would create trillions of dollars of debt. Really! They are actually asking that question of a candidate that has never run the show but they do not ask that same question of those who created the last $20 trillion of ACTUAL debt. NOW they care about debt?

We do not remember one question being asked by the mainstream media to Barack Obama about his $8-9 trillion of new debt that he created during his administration. We do not remember asking him about the bold -faced lie that he lowered the deficit in half when the fact is President Obama first more than doubled the deficit before it came down. We do not see them asking him about the fact that future debt and deficits are set to skyrocket directly because of his policies. We do not remember one question about what those deficits and debt do to the future of the economy but all of a sudden, it matters.
Ladies and gentlemen, this is just the start. There will be no more Hillary scandals to report.  There will be no more Hillary troubles to talk about. We are already hearing about a network blackout of an ex-secret service’s opinion of her. Do you think there would be a blackout if those opinions were for someone in the other party? For the next few months, Donald Trump caused the Chicago fire, the San Francisco earthquake, the Zika virus and the downfall of civilization. And for the record, we did not vote for Mr. Trump.

“HEY SAVERS…GO SCREW YOURSELF!”

By Gary Kaltbaum- June 21,2016

We have been talking and writing about the sickening Fed policy that for years, has completely ripped off savers, completely destroyed the riskless income investment, completely forcing these saved dollars into risky income investments and for that matter, into the markets.

This morning, Mrs. Bubble was asked by Rep Jeb Hensarling about the Fed’s legal authority to go to negative rates.

” WE DO HAVE A LEGAL BASIS TO PURSUE NEGATIVE RATES!”

Granted, Mrs. Bubble then went on to say that it was not in their plans but then again, several weeks ago, she just about assured the world that a rate hike was coming in June.

That answer is Mrs. Bubble again trying to goose markets with even more easier money. As we have stated forever, their only goal is to keep markets up because if markets crater, the curtains come down on their enabling of massive debts and deficits around the globe which will continue to block the potential for any economy to get going and reach its full potential.

So to the saver…Mrs. Bubble is again telling you to go screw yourself! Just because they have taken any riskless income investment away from you and gave your money away to the good folks at the banks and lenders…don’t worry because as the main culprit, Mr Bubble Bernanke said…any income not made by savers will be made up by a better economy. Yes…this maniac did say that.

We expect that eventually, this maniacal Fed will enter the negative rate zone even though negative rates around the globe have done nothing to help the cause. These maniacs are addicted. There is no number too high to print and no number to low to go on rates. (We actually believed they could not go below 0%) We had better never, ever, ever get to the point where their easy, easier and easiest money talk does not move markets up and instead sends them down. It will be at this time where as Mr Buffett said, “It’s only when the tide goes out that you learn who has been swimming naked!”

Depending on what abacus you are using, there has been $15-20 trillion of printed money, $10 trillion of negative rates, 0% rates for almost 8 years, the outright buying up of markets and who knows what else…all the while telling us they are in control and everything will be fine. But all this has only enabled the highest leverage and debt in history, government (taxpayer) deficits that will never be paid back and the continued centralized power in just a few hands with no accountability. And the Knicks still suck!

The Morning Look

Market Update:

Futures are higher ahead of Tuesday’s open as investors digest Monday’s strong rally. Janet Yellen will testify to Congress on Tuesday and Wednesday and the Brexit vote is Thursday.

Gary’s Thoughts: Smaller gap to upside this morning. We hear it is all bout the Brexit. A poll of 50 people says… We have no clue what happens but figure as usual, they are overdoing it. Market did get distributed yesterday off the huge gap with financials still horrid.

Economic Data:

  • Redbook
    8:55 AM ET
  • Janet Yellen Speaks
    10:00 AM ET
  • Jerome Powell Speaks
    2:30 PM ET

Highlights:

  • Cleveland’s NBA Finals Victory Draws Record Audience for ABC
    Gary’s Thoughts: What about my Knicks?
  • A Quick Trip to the Oil Patch Shows Energy-Related Losses Rising
    Gary’s Thoughts: That will continue.
  • Trump Removes Corey Lewandowski as Campaign Manager
    Gary’s Thoughts: The Donald had better get act in gear or it will be President crook!

The Closing Look

Stocks opened higher on Monday after the latest Brexit poll came out over the weekend and hinted they will stay. But sellers showed up by the close and stocks ended well off their highs. The British Pound (FXB) gapped up on the news. JD.Com ($JD) rallied after Wal-Mart ($WMT) said it would sell its online business to the Chinese e-commerce company. Elsewhere, Boeing ($BA) opened higher after news broke that Iran had reached a deal to buy 100 planes. On Tuesday and Wednesday, Fed Chair Janet Yellen is going to testify in front of Congress and the actual Brexit vote is on Thursday.

Gary’s Thoughts: Huge gap…sold into…which means gap to upside again tomorrow. No…really! The game is on.