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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The Morning Look

Market Update:

Stock futures are slightly higher ahead of Friday’s open as investors wait for the always fun (and fake) jobs report.

Gary’s Thoughts: The fake job’s number was much better than expected after being much owrse than expected last month. Futures have jacked to the upside as we write this. We think markets wanted to edge up no matter what from here but don’t blink. But that pales this morning as we have a tragedy in Dallas this morning as our courageous police community was attacked. Luike anyone who is targeted or anyone who is innocently targeted, our prayers are with you.

Economic Data:

  • Employment Situation 8:30 AM ET
  • Baker-Hughes Rig Count 1:00 PM ET
  • Consumer Credit 3:00 PM ET
  • Treasury STRIPS 3:00 PM ET

Highlights:

  • Jobs Report in U.S. to Get Extra Scrutiny in Post-Brexit World
    Gary’s Thoughts: Fake numbers!
  • Minnesota Governor Dayton Seeks DOJ Inquiry of Police Shooting
    Gary’s Thoughts: Absolutely!

The Closing Look

Stocks opened higher but closed mixed to lower on Thursday as investors waited for Friday’s always fun jobs report. Before the open, ADP, the country’s largest private payrolls company, said U.S. employers added  172,000 new jobs in June, beating estimates for 150,000. A separate report showed that weekly jobless claims slid by 16,000 to 254,000 last week, beating estimates for 269,000. Around 11am EST, crude oil plunged after the latest inventory data was released.

Gary’s Thoughts: Market “feels” like a ping pong game right now. Will be back after fake job’s number tomorrow.

The Closing Look

Stocks opened lower but turned higher after the bulls showed up and defended the 50 DMA line for the major indices. The ISM non-manufacturing PMI rose to 56.5 last month versus 52.9 in May. Markit’s U.S. services PMI edged higher to 51.4 in June, up fractionally from 51.3 in May. At 2pm EST, the Fed released the minutes of its latest meeting which showed Fed officials are going to hold off until the economy improves.

Gary’s Thoughts: Fed found another excuse to not raise rates even to a whopping 1/2%. Amazing! Market acted nothing but bullish Wednesday. Evena  coupl eof housing names appearing. Please do not argue with price action. It is the only thing that matters in markets.

The Morning Look

Market Update:

Stock futures are quiet ahead of Thursday’s open as global markets digest this week’s action. The jobs report will be released before Friday’s open and then we enter earnings season.

Gary’s Thoughts: Flat as flat open can be…but we are back to a couple of indices nearer to highs and we must say, the market is stronger than the last time we were here. (pre brexit) There remains a ton of problems. Debt, deficits, European banks and that’s just the start. We urge you to pay attention to price as that is all that matters. The market will eventually decide when all the negatives matter. Leave no doubt, the fed stands pat and others ease more…and that has buffered markets for a loooooong time.

We are asked every month about our feelings on the next job’s number. We never answer because we do not know and are not privy but if form holds true, we get a good number tomorrow after a bad number last month. Yippee!

Economic Data:

  • Chain Store Sales
  • Challenger Job-Cut Report 7:30 AM ET
  • ADP Employment Report 8:15 AM ET
  • Jobless Claims 8:30 AM ET
  • Gallup Good Jobs Rate 8:30 AM ET
  • Bloomberg Consumer Comfort Index 9:45 AM ET
  • EIA Natural Gas Report 10:30 AM ET
  • EIA Petroleum Status Report 11:00 AM ET
  • Fed Balance Sheet 4:30 PM ET
  • Money Supply 4:30 PM ET

Highlights:

  • Fed Officials Held Rates in June as Job Slump Raised Uncertainty
    Gary’s Thoughts: Blah blah.
  • Ryan Calls for Barring Clinton From Classified Briefings
    Gary’s Thoughts: You know our stance.