The Closing Look

Stocks were quiet on Friday as investors digested the strong post brexit rally and the latest round of economic and earnings data.
Gary’s Thoughts: No complaints and certainly no sellers just yet. Earnings are not very good but beat the number is at hand.

NO SELLERS JUST YET

“NO SELLERS JUST YET!”

By Gary Kaltbaum July 18,2016

When you leave just 1% daylight between the backing of our men and women in uniform and those that would do harm, you get those that would do harm, doing harm! That is all we are going to say on this…for now!

It is earning’s season. Typically, we take a step back and wait as earnings come out. There are a ton in the next two weeks…and we mean a ton. So far, as expected, earnings are blah! But guidance had already come down markedly. Example…CSX reports earnings DOWN 16% and sales DOWN 12% but that”s good enough to send the stock up over 5%.

Do not forget the main thesis this second: the combination of the DOW and S&P breaking out of 18 months ranges combined with a gargantuan 11% cash in mutual funds and hedge funds…needs to be respected…until or unless the breakout fails. Notice how the market is ignoring all bad news this second.

The worst thing we can say is that the overall market is now overbought but overbought can continue. It is also a wee bit stretched. As we have told you, we actually white out the two days down on the Brexit and then the 4 days up. We consider it a sucking out because of scare tactics. To our eye, before the Brexit, markets were going to break out anyhow…Brexit just stalled it.

Just remember, we continue to believe this is about a gargantuan, humongous, mammoth effort on the part of central banks to keep the bubble in tact. Just when we thought they could do no more, they have added a ton of QE, went negative with rates, went more negative with rates and now the rumor of what they call “helicopter money” is now in the realm. We continue to be 1000% sure this ends badly…but do not know from what price or what time this occurs. Bubbles can last a while and go to places unfathomable.

And to answer everyone’s question…what they are doing with interest rates…IS THE BUBBLE. Imagine, people lending others at less than 0% for a long period of time. Why? What basis? How is it good you get nothing on your money when lending far out in time? The answer…IT IS A BUBBLE! Just remember…
economics 101 states when your debt skyrockets, in order to float more debt, you must pay a higher yield because investors demand a higher yield for the time and the risk. NOT ANY MORE! And of course, the other part of the bubble is the outcomes of those lower rates. We can spend a few hours on that!

The Morning Look

Market Update:

Stock futures are a little higher as the market adds to the big post brexit rally and enters the heart of earnings season.

Gary’s Thoughts: Earning’s season! Stay tuned!

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:

  • Investors Still Uneasy About Turkey
    Gary’s Thoughts: Investors couldnt care less about Turkey!
  • The market prepares for earnings season, a slew of earnings will be released over the next few weeks.
    Gary’s Thoughts: It will not be pretty but it will be better than the expected numbers that have already been taken down.

The Closing Look

Stocks rallied on Thursday as investors digested the latest round of economic data. JP Morgan (JPM) rallied after the company easily beat estimates. Shares of BlackRock (BLK) slid after the asset manager reported results that matched estimates. Overseas, the Bank of England decided to keep rates steady and suggested they may cut rates in August which means the easy money is here to stay. Several Fed heads came out today and said the Fed should remain patient in normalizing rates because of Brexit and other economic concerns.

Gary’s Thoughts: Another gap to the upside on more easy money. JPM good reaction to mediocre numbers. Normally, would say market tired and needs rest but we just may have successfully broke out of more than an 18 month range. Tons of earnings continue to come out next week.

 

The Morning Look

Market Update:

Stock futures are a littler higher ahead of Friday’s open as the market continues the very strong post-brexit rally.

Gary’s Thoughts: Retail numbers just came out…pretty pretty good last month but of course, the big story is Nice, France…an iconic tourist destination where another scumbag uleashed hell on an iconic promenade. We will leave it at that for now. Will have big technical report over the weekend.

Economic Data:

  • Consumer Price Index 8:30 AM ET
  • Retail Sales 8:30 AM ET
  • Empire State Mfg Survey 8:30 AM ET
  • Industrial Production 9:15 AM ET
  • Business Inventories 10:00 AM ET
  • Consumer Sentiment 10:00 AM ET
  • Baker-Hughes Rig Count 1:00 PM ET
  • John Williams Speaks 1:00 PM ET
  • Neel Kashkari Speaks 1:15 PM ET

Highlights:

  • As Markets Reach New Highs, World’s Top Investors Ring Alarm
    Gary’s Thoughts: Very weird. Normally, all the head honchos go with a bullish phase but theya re talking like it is 08.
  • Another horrific terror attack in France
    Gary’s Thoughts: Prayers and thoughts!

WE AINT MAKING THIS S—T UP! BERNANKE GOES MORE CERTIFIABLE!

SOURCE: http://www.bloomberg.com/news/articles/2016-07-14/bernanke-floated-japan-perpetual-bonds-idea-to-abe-adviser-honda

THE EASY MONEY ANTE IS UPPED

“AND THE EASY MONEY ANTE IS UPPED”

 

By Gary Kaltbaum-July 14,2016

 

We just wanted to repeat what we just told you.

 

Do not shrug off an 18 month breakout of major indices. They typically work. Then combine the fact that mutual funds and pension funds have 11% cash, a gargantuan amount, and you have a lot of ammo that has to come off the sidelines as markets move higher. There is always a chance the breakout can fail and the market tucksits head in like a frightened turtle…but as of this second, that ain’t happening. Bears are scratching their forehead as to how this can be happening. We will give you the same answer we have been giving you for years…a renewed ramping up of maniacally easy monetary policy.

 

In case you did not know,

 

The Bank of England has announced more rate cuts…notice the S on the end of cut. But that is pedestrian because:

 

The ECB is buying up corporates, junk and even the cracks in the sidewalks. German 10 year yields are now negative. Who the hell would lend money for 10 years and get nothing? Well, those that believe the printing will continue and negative rates will get more negative. Keep in mind, these people are buying their own bonds with negative rates.

 

The BOJ, in the wake of Mr.Bubble’s visit, is now prepared for “HELICOPTER MONEY!” Frankly, that can mean anything at this point.

 

And lastly, a Fedhead with the last name Mester came out yesterday also saying that we can resort to “helicopter money” if need be. Unreal!

 

Bottom line…the ante has been upped and in ways unimaginable. We suggest not arguing unless the breakouts fail. So far earnings have been blah but as usual, better than expected. We get another gap to the upside this morning.

 

 

 

 

The Closing Look

Stocks were quiet Wednesday as the market paused to digest the recent and strong ~8% post Brexit rally. Economic data was relatively light, U.S. import prices rose +0.2% last month and missed estimates. Meanwhile, export prices rose +0.8%. The Fed’s Beige Book showed the economy continued to moderately grow. Elsewhere, oil prices fell after the International Energy Agency (IEA) warned that the supply glut will adversely affect prices and U.S. crude and product supplies hit a record.

Gary’s Thoughts: A sit day…nothing wrong with that…and tomorrow, the UK will announce more easing…thus…?

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!