The Closing Look

Stocks fell on Thursday as investors digested the latest round of economic and earnings data. Before the open, the government said U.S. GDP rose 1.4% in the second quarter, beating estimates for 1.1%. Mid-day, stocks were slammed after some Deutsche Bank clients reduced collateral on trades. Separately, shares of Wells Fargo (WFC) took out their Feb 2016 low.

Gary’s Thoughts:

By Gary Kaltbaum September 29,2016
Greetings from the Ryder Cup where to be clear, the atmosphere is electric. We will have a bigger report for you this weekend, especially on the goings on with Deutsche Bank. So to be brief, just remember what we have told you for a very long time. It’s never bad until the market says so. The action in Deutsche Bank stock is now saying so. Whether or not it flows over into others remains to be seen. We suspect we are getting very close to some sort of action taking place to stanch the bleeding.
We just want you to be aware that Wamu, Countrywide, Lehman, Bear Stearns, Wachovia and the rest did not go out of business. The market put them out of business with crashing stock prices. We are in no way saying the same will happen now. BUT…we are saying and repeating to you that the leverage and debt in the system is much higher than it was in 08 (no one again learned any lessons) and the amount of derivatives cannot even be counted at this point. But don’t worry, Janet Yellen says there is no bubble. Feel better now!

The Closing Look

Stocks rallied on Wednesday as investors digested a rather busy day. Six Fed heads spoke, including Janet Yellen, with the big headline coming from Mr. Evans. Mr. Evans said, rates should stay low for a long time, and that sparked a nice afternoon rally. Elsewhere, oil surged after rumor spread that OPEC will cut production in November. Shares of Nike ($NKE) and Tempur Sealy International ($TPX) both fell after reporting earnings. Finally, economic data was mixed. Durable Goods Orders, were unchanged last month, beating estimates for a decline of -1.9%. Year-over-year, orders fell -1.3%, beating estimates for a decline of -4.1%. Elsewhere, MBA Mortgage Applications fell -0.7%, which was better than last week’s reading of -7.3%.

Gary’s Thoughts: Oil…oil…and more oil. And OPEC still hasn’t met yet.

The Morning Look

Market Update:

Stock futures are flat ahead of Thursday’s open as investors approach the end of the month and the end of quarter.

Gary’s Thoughts: Energy on radar screen now.

Economic Calendar:

  • Patrick Harker Speaks 5:00 AM ET
  • GDP 8:30 AM ET
  • International Trade in Goods 8:30 AM ET
  • Jobless Claims 8:30 AM ET
  • Corporate Profits 8:30 AM ET
  • Dennis Lockhart Speaks 8:50 AM ET
  • Bloomberg Consumer Comfort Index 9:45 AM ET
  • Jerome Powell Speaks 10:00 AM ET
  • Pending Home Sales Index 10:00 AM ET
  • EIA Natural Gas Report 10:30 AM ET
  • Neel Kashkari Speaks 2:30 PM ET
  • Esther George Speaks 4:15 PM ET
  • Fed Balance Sheet 4:30 PM ET
  • Money Supply 4:30 PM ET
  • Janet Yellen Speaks 5:10 PM ET


  • Oil surges after OPEC agrees to cut production in November
    Gary’s Thoughts: We shall see if this sticks.
  • Fed’s Evans said, Rates Will Stay Easy For A Very Long Time
    Gary’s Thoughts: So 8 years at 0% is not a long time?

The Closing Look

Stocks rallied on Tuesday after investors digested the first Presidential debate and the latest round of economic data. The S&P Case-Shiller index showed home prices were flat last month, missing estimates for a gain of 0.1%. Meanwhile, year-over-year, home prices rose by 5% which is a decent gain. A few home-builders rallied on the news. Separately, the PMI services flash index came in at 51.9, higher than the last reading of 50.9. Consumer confidence rose to 104.1, beating estimates for 98.8. The Richmond Fed Manufacturing Index fell to -8, which was higher than the last reading of -11. Stanley Fischer, the second in command at the Fed gave a speech which focused on more diversity and steered clear on policy.

Gary’s thoughts: Market gets back almost what it lost Monday but leading growth names set up well in here. Nothing wrong with narrow markets as long as growth leads.

The Morning Look

Market Update:

Stocks futures are flat ahead of Wednesday’s open as we approach the last few days of the month and quarter.

Economic Data: We see the head honchos at Wells Fargo are now giving back money…but making $100 million and giving back $15 million will not suffice. Markets almost gets back what it lost on Monday.

  • Bank Reserve Settlement
  • MBA Mortgage Applications 7:00 AM ET
  • Durable Goods Orders 8:30 AM ET
  • Neel Kashkari Speaks 8:45 AM ET
  • Janet Yellen Speaks 10:00 AM ET
  • James Bullard Speaks 10:15 AM ET
  • EIA Petroleum Status Report 10:30 AM ET
  • Charles Evans Speaks 1:30 PM ET
  • Loretta Mester Speaks 4:35 PM ET
  • Esther George Speaks 7:15 PM ET


  • Blackstone’s Top Dealmaker Says Now Is the Most Difficult Period He’s Ever Experienced
    Gary’s Thoughts: Because valuations are a joke.
  • More Than 50% of Shoppers Turn to Amazon First When Looking For A New Product
    Gary’s Thoughts: Thus the new world.

The Closing Look

Stocks fell on Monday as investors waited for the first Presidential debate to begin at 9pm EST. The latest polls show that Donald Trump has surged in recent weeks and a Bloomberg poll released Monday morning showed both candidates were deadlocked. Economic data was relatively light, new home sales hit 609K in August vs. 597K estimate. Mario Draghi, the head of the ECB, spoke in Europe and 12 Fed heads are slated to speak this week which, at this point, is beyond ridiculous.

Gary’s Thoughts: FINANCIALS-FINANCIALS-FINANCIALS…starting to act suspect. Pay attention. Goldman (GS) acts poorly and breaking support badly.

The Morning Look

Market Update:

Stocks futures gave back earlier gains and are now relatively unchanged ahead of Tuesday’s open as the market digests Monday night’s first Presidential Debate.

Economic Data: Futures were up nicely overnight but now flat. We will have a complete wrap up on our thoughts on the debate tonight. Market icky here.

  • Redbook 8:55 AM ET
  • S&P Case-Shiller HPI 9:00 AM ET
  • PMI Services Flash 9:45 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
  • Stanley Fischer Speaks 11:15 AM ET
  • 4-Week Bill Auction 11:30 AM ET
  • 5-Yr Note Auction 1:00 PM ET


  • 1st Presidential Debate Is Finally Over
    Gary’s Thoughts: Should have watched football.
  • Shares of Germany’s Deutsche Bank Hit A New Record Low
    Gary’s Thoughts: This is important…very important.

26 Not so amazing facts on the state of our state!

 by Michael Snyder via The Economic Collapse blog,

#1 When Barack Obama entered the White House, the U.S. government was 10.6 trillion dollars in debt.  Today, the U.S. government is 19.5 trillion dollars in debt, and Obama still has several months to go until the end of his second term.  That means that an average of more than 1.1 trillion dollars per year will be added to the national debt during his presidency.  We are stealing a tremendous amount of consumption from the future to make the economy look much, much better than it otherwise would be, and we are systematically destroying the future in the process.

#2 As Obama prepares to leave office, the rate at which we are adding to the national debt is actually increasing.  During the fiscal year that is just ending, the U.S. government has added another 1.36 trillion dollars to the national debt.

#3 It isn’t just the federal government that is on a massive debt binge.  Total U.S. corporate debt has nearly doubled since the end of 2007.

#4 Default rates on U.S. corporate debt are the highest that they have been since the last financial crisis.

#5 Corporate profits have fallen for five quarters in a row, and it is being projected that it will be six in a row once the final numbers for the third quarter come in.

#6 During the month of August, commercial bankruptcy filings were up 29 percent compared to the same period a year ago.

#7 The rate of new business formation in the United States dropped dramatically during the last recession and has hovered at that new lower level ever since.

#8 The Wall Street Journal says that this is the weakest “economic recovery” since 1949.

#9 Barack Obama is on track to be the only president in all of U.S. history to never have a single year when the U.S. economy grew by at least 3 percent.

#10 In August, the Cass Freight Index dipped to the lowest level that we have seen for that monthsince 2010.  What this means is that the total amount of stuff being shipped around the country by air, by rail and by truck is really dropping, and this is a clear sign that real economic activity is slowing down in a major way.

#11 Capital expenditure growth has turned negative, and history has shown that this is almost always followed by a new recession.

#12 The percentage of Americans with a full-time job has been sitting at about 48 percent since 2010.  You have to go back to 1983 to find a time when full-time employment in this country was so low.

#13 The labor force participation rate peaked back in 1997 and has been steadily falling ever since.

#14 The “inactivity rate” for men in their prime working years is actually higher today than it was during the last recession.

#15 The United States has lost more than five million manufacturing jobs since the year 2000 even though our population has become much larger over that time frame.

#16 If you can believe it, the total number of government employees now outnumbers the total number of manufacturing employees in the United States by almost 10 million.

#17 One study found that median incomes have fallen in more than 80 percent of the major metropolitan areas in this country since the year 2000.

#18 According to the Social Security Administration, 51 percent of all American workers make less than $30,000 a year.

#19 The rate of homeownership in the U.S. has fallen every single year while Barack Obama has been in the White House.

#20 Approximately one out of every five young adults are currently living with their parents.

#21 The auto loan debt bubble recently surpassed the one trillion dollar mark for the first time ever.

#22 Auto loan delinquencies are at the highest level that we have seen since the last recession.

#23 In 1971, 61 percent of all Americans were considered to be “middle class”, but now middle class Americans have actually become a minority in this nation.

#24 One recent survey discovered that 62 percent of all Americans have less than $1,000 in savings.

#25 According to the Federal Reserve, 47 percent of all Americans could not even pay an unexpected $400 emergency room bill without borrowing the money from somewhere or selling something.

#26 The number of New Yorkers sleeping in homeless shelters just set a brand new record high, and the number of families permanently living in homeless shelters is up a whopping 60 percent over the past five years.

Markets, debate and Arnold Palmer.

Was going to post weekend report but want it to be short. Tonight is the debate. But yesterday, Arnold Palmer passed away. Mr. Palmer was my idol when I was a young child along with Willie Mays in baseball. I had heard of his failing health but one still does not want to hear the news. In case you do not know, I believe Mr. Palmer will be remembered much more for what he did after his golfing career than during.  Go google Arnold Palmer and the word “hospital!” Go google Winnie Palmer and the word “hospital” and see what comes up. The man lived to help. He lived to do for people he needed absolutely nothing from. We watched Rory Mcilroy win $13 million yesterday. There would have been no chance of that if not for Mr. Palmer. RIP good man.

Markets remain rangebound with internal deterioration underneath. We say this because there are fewer and fewer areas working, fewer and fewer stocks working and a clear lack of new yearly highs even though we have bounced back up into range after the Fed non-move. That said, small cap definitely leading large cap right now and the Nasdaq/Ndx the strongest indices led by tech/internet/semis and the resurgence of a bunch of very speculative biotechs off of a few very speculative buyouts. We will have more as the week progresses.

And tonight’s debate. Look for our live tweeting and a report late tonight. We are still  trying to figure out how we got here.

The Closing Look

Stocks rallied on Thursday one day after the Bank of Japan and the U.S. Federal Reserve fired their latest easy money bazooka’s. Economic data was mixed. Weekly jobless claims came in at 252k, beating the Street’s estimate for 261k. The Chicago Fed National Activity Index fell to -0.55, missing estimates for 0.15. The FHFA House Price index rose by 0.5%, beating estimates for 0.4%. Existing Home Sales fell 0.9% and came in at 5.33M, missing estimates for 5.38M. Leading indicators also missed estimates and fell -0.2%, missing estimates for +0.1%. Finally, the Kansas City Fed Index came in at 6, which beat the last reading -0.4.

Gary’s Thoughts: Good day…but feeling overbought…and in the midst of resistance. NASDAQ new highs is good news. We head into end of month window dressing.