The Morning Look

Market Update:

Stock futures are up triple digits ahead of Thursday’s open as investors look for more easy money from the Bank of England and the latest round of earnings.

Gary’s Thoughts: As we wrote last night: “A sit day…nothing wrong with that…and tomorrow, the UK will announce more easing…thus…?” Thus means another gap to the upside. The breakout from 18 months of nausea still in gear. Don’t forget a Fedhead talked about “helicopter money” yesterday.

Economic Data:

  • Jobless Claims 8:30 AM ET
  • PPI-FD 8:30 AM ET
  • Bloomberg Consumer Comfort Index 9:45 AM ET
  • James Bullard Speaks 10:00 AM ET
  • EIA Natural Gas Report 10:30 AM ET
  • Dennis Lockhart Speaks 11:15 AM ET
  • Esther George Speaks 1:15 PM ET
  • Fed Balance Sheet 4:30 PM ET
  • Money Supply 4:30 PM ET
  • James Bullard Speaks 6:40 PM ET
  • Robert Kaplan Speaks 7:00 PM ET

Highlights:

  • Investors Now Pay Germany to Borrow for 10 Years
    Gary’s Thoughts: This will end well!
  • Poll: Trump, Clinton Are Neck-and-Neck in Ohio and Iowa
    Gary’s Thoughts: Considering the media mauling Trump, amazing. Tells you quality of other candidate.

Helicopter money…it is coming!

“HELICOPTER MONEY! IT’S COMING!”

By Gary Kaltbaum-July 13,2016

My goodness! In case you did not know, in the past few days, Mr. Bubble (Bernanke) was sent to Japan to cure their ills. His remedy…”helicopter money.” We are not making this up. Mr. Bubble is now urging Japan to go to the next level. 0% rates? Not enough. The printing of trillions? Not enough. Negative rates? Not enough. The outright buying up of markets? Not enough. Mr. Bubble is now telling Japan central bankers to just hand out money to consumers and businesses in order to goose spending. In other words, go deeper into massive, uncontrollable debt to cure the ills of a country, who’s problems have been caused by that same uncontrollable debt. We expect Japan to announce something very soon along these lines.

But that’s Japan. Overnight in Australia, Fedhead Loretta Mester now says “helicopter money” could be considered to stimulate America’s economy if conventional monetary policy fails. In other words, direct payments to households and businesses. AND THIS WOMEN IS SUPPOSEDLY IS A HAWK!

“We’re always assessing tools that we could use,” Mester told the ABC’s AM program. “In the US we’ve done quantitative easing and I think that’s proven to be useful. “So it’s my view that [helicopter money] would be sort of the next step if we ever found ourselves in a situation where we wanted to be more accommodative.

We do not know where to start and we certainly do not know where to end on all this. This spiral of debt,deficits, 0% rates, negative rates and the rest of this monetary hijinks is again lifting markets, papering over what will eventually and certainly come back to haunt things in ways unimaginable. The fact it could possibly come from higher levels will not help things. Debt and deficits matter…ULTIMATELY. Ultimately has not been hit yet!

Markets act well here. As we have stated, breakouts of major indices from 18 month ranges are usually good things in the near term. And the fact that there is 11% cash in mutual funds and pension funds only could add fuel as managers cannot sit on that much cash as markets move higher. Earning’s season straight ahead!

The Morning Look

Market Update:

Stock futures are edging higher ahead of Wednesday’s open as the market continues its strong post Brexit rally.

Gary’s Thoughts: Earnings in droves soon. Pay attention. Yesterday, lagging areas got the good bid. When the floor picks up…everything picks up.

Economic Data:

  • MBA Mortgage Applications 7:00 AM ET
  • Import and Export Prices 8:30 AM ETRobert Kaplan Speaks 9:00 AM ET
  • Atlanta Fed Business Inflation Expectations 10:00 AM ET
  • EIA Petroleum Status Report 10:30 AM ET
  • 30-Yr Bond Auction 1:00 PM ET
  • Beige Book 2:00 PM ET
  • Treasury Budget 2:00 PM ET
  • Patrick Harker Speaks 6:00 PM ET

Highlights:

  • Dow hits new all-time intraday high as market puts Brexit fears behind
    Gary’s Thoughts: Brexit…what’s that?
  • Five people suspected of shooting at police arrested in Washington DC
    Gary’s Thoughts: War on police will continue…sickening.

The Closing Look

Stocks raced higher as earnings season officially began and investors embraced more stimulus from global central banks. The Bank of England and the Bank of Canada are set to meet this week. Japan already said more easy money will be coming and that helped stocks break out of range and hit new record highs. After Monday’s close, Alcoa (AA) kicked off earnings season and the stock rallied 5% after reporting their Q2 results.

Gary’s Thoughts: Less said…the better…S&P above big breakout…Dow a smidge above. Keep fingers crossed it holds.

The Closing Look

The S&P 500 broke out of its very long trading range and hit a fresh record high on Monday. Overnight, Japan’s ruling party won their election by a large margin and announced more stimulus. That sparked a huge rally in Japan’s stock market (up almost 4%) and that lead to more gains across the globe. Current U.K. Prime Minister David Cameron said that he will stand down from his position on Wednesday. Interior minister Theresa May will replace him and she will be the first woman to hold that post since Margaret Thatcher.

Gary’s Thoughts: Just about broke out. Japan had Mr Bubble visit and akll of a sudden, Japan announces MORE stimulus. 20 years of failure isnt enough…but juices are flowing again. S&P just about there. One more day would confirm. Foreign markets are even perking up.

The Morning Look

Market Update:

Stock futures are higher ahead of Tuesday’s open as the recent and strong post Brexit rally continues.

Gary’s Thoughts: And away we go. Don’t argue. Foreign markets, which had been horrible, are quickly popping back up some.

Economic Data:

  • NFIB Small Business Optimism Index 6:00 AM ET
  • James Bullard Speaks 8:45 AM ET
  • Redbook 8:55 AM ET
  • JOLTS 10:00 AM ET
  • Wholesale Trade 10:00 AM ET
  • Neel Kashkari Speaks 5:30 PM ET
  • Loretta J. Mester Speaks 10:30 PM ET

Highlights:

  • Multiple people shot at courthouse in southwest Michigan
    Gary’s Thoughts: We think someone better put the hammer down on all this.
  • Britain’s Theresa May wins PM race after pro-Brexit rival quits. She’s the first woman to take over since Margaret Thatcher.
    Gary’s Thoughts: Good luck!

And the market is:

“WE MAY ACTUALLY BREAK OUT TO THE UPSIDE”

By Gary Kaltbaum-July 11,2016

We could give you a few dozen reasons why the markets should be in trouble. How about:

Bond yields plunging.
Negative rates.
Brexit.
Social unrest!
Massive deficits.
Massive debt.
Dysfunctional governments.
Elections!
Earnings heading south.
Sales heading south.
Valuations historically very high.

But we continue to get massive injections of easy money whether it be 0% rates, negative rates, the printing of trillions and outright buying of markets. In fact, just recently around the Brexit plunge, German Finance Minister Wolfgang Schaeuble said and we quote: “G7 agreed to avoid market chaos!” and “Measures to avoid market chaos have been successful!”

We do not make this stuff up. But at the end of the day, we do not rationalize. The fact is the Dow and S&P are now knocking on the door of a big breakout from a multi-multi-multi month trading range and we will not argue it. Remember, if major indices break out, that’s a lot of stocks and a lot of sectors. So here are those important numbers: Dow 18,355, S&P 2136. Keep in mind, other major indices are not close to their highs but are close to next resistance levels. As we have told you, there is a stark contrast between the Dow and S&P and the others. Next areas of resistance for the others are NASDAQ 4980, NDX 4574, NYSE 10,648 and the RUSSELL at 1190. Regardless of all the “news,” do not argue if the markets want to move out. And to add one other important part of the equation, it is being reported that mutual fund and pension fund cash is at a very high 11%, which means lots of cash can potentially come off the sidelines if managers feel like they are missing the boat. A breakout may just cause that.

 

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The Morning Look

Market Update:

Stock futures are higher ahead of Monday’s open as investors add to the post Brexit rally.

Gary’s Thoughts:

Economic Data:

  • Esther George Speaks 10:00 AM ET
  • Labor Market Conditions Index 10:00 AM ET
  • Loretta J. Mester Speaks 9:30 PM ET

Highlights:

  • Obama Urges a ‘Thoughtful’ Tone Amid Protests in the U.S.
    Gary’s Thoughts: With all due respect, this Prez has mishandled this situation since inauguration.
  • Serena’s Wimbledon Prize Worth $380,000 Less After Brexit
    Gary’s Thoughts: Greatest athlete…ever!

The Closing Look

Stocks rallied on Friday after the government reported a stronger than expected jobs report. The major indices are now flirting with fresh record highs.

Gary’s Thoughts:  DOW/S&P poised to move out of range. This would be a looooong base breakout….in spite!

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