The Morning Look

Market Update:

Stock futures are a little lower ahead of Friday’s open as investors digest the latest round of earnings and economic data. The Bank Of Japan decided to not make any changes to monetary policy which disappointed some investors (who were looking for more easy money).

Gary’s Thoughts: But Japan announces they will buy up more stock ETFs and amazingly says they can take negative rates even lower. THEY WILL NEVER BE ABLE TO NORMALIZE. WE WILL NEVER BE ABLE TO NORMALIZE…AS MARKETS HAVE BECOME USED TO AND ADDICTED TO THIS MANIACAL MONETARY POLICY.

And GOOG and AMZN have gaps to upside this morning. Both with good numbers. Will be very interested in seeing whether the gaps are held.

Economic Data:

  • GDP 8:30 AM ET
  • Employment Cost Index 8:30 AM ET
  • John Williams Speaks 9:30 AM ET
  • Chicago PMI 9:45 AM ET
  • Consumer Sentiment 10:00 AM ET
  • Baker-Hughes Rig Count 1:00 PM ET
  • Rob Kaplan Speaks 1:00 PM ET
  • Farm Prices 3:00 PM ET

Highlights:

  • DNC Convention is finally over…
    Gary’s Thoughts: 102 days to election!
  • Apple, Netflix, Facebook, Google and Amazon have now all reported earnings…
    Gary’s Thoughts: Overall…earnings not good…but great companies continue to be great.

The Closing Look

Stocks ended mixed on Thursday as investors digested the latest round of earnings and economic data. Economic data was mixed. Jobless claims came in at 266, compared to the Street’s estimate for 264k. The Kansas City Manufacturing index came in at negative -6, missing estimates for positive 2. Overnight, The Bank of Japan is scheduled to announce its decision on monetary policy and Friday morning U.S. GDP will be announced. Alphabet (GOOG) and Amazon (AMZN) were some of the stocks that reported earnings after the bell.

Gary’s Thoughts: Since many asking…Facebook gap sold off…AAPL gap holding for the most part. FB into highs…AAPL has tons of resistance to deal with. Facebook numbers incredible…AAPL numbers terrible. Go figure!

The Morning Look

Market Update:

Stock futures are a little lower ahead of Thursday’s open as investors digest the latest round of earnings data and wait for Friday’s Bank of Japan Meeting.

Gary’s Thoughts: Tons of earnings. Interesting that FB had what we consider a monster quarter…was $132-plus but now trades under $128. Amazon and Google after the close. Two important names.

Economic Data:

  • International Trade in Goods 8:30 AM ET
  • Jobless Claims 8:30 AM ET
  • Bloomberg Consumer Comfort Index 9:45 AM ET
  • EIA Natural Gas Report 10:30 AM ET
  • Kansas City Fed Manufacturing Index 11:00 AM ET
  • Fed Balance Sheet 4:30 PM ET
  • Money Supply 4:30 PM ET

Highlights:

  • Fed Begins Crawl Toward Rate Hike With Near-Term Risks Diminishing – Bloomberg
    Gary’s Thoughts: Horsecrap!
  • Berkshire’s Apple Bet Is Back in the Black After Rally
    Gary’s Thoughts: We forgot to mention Apple…little distribution off the gap. Numbers still stink but will be watching how it trades after the gap.

The Closing Look

Stocks ended mixed on Wednesday as investors digested the latest round of economic and earnings data. Overnight, Japan fired another 28T Yen easy money missile to help stimulate their market and their lackluster economy. That came a few days before their central bank meeting on Friday. Meanwhile, The U.S. Fed held rates steady and the latest round of earnings roulette continued. Apple (AAPL), Garmin (GRMN) and Edward Life Sciences (EW) gapped up after releasing their Q2 results while shares of Twitter (TWTR) and Coca-Cola (KO) were some of the names that gapped down on earnings. Elsewhere, pending home sales grew by 0.2%, missing estimates for a gain of 1.2%.

Gary’s Thoughts: We are thrilled that the market ignored the Fed. We cannot wait for the day where markets stick a certain finger up at them.  Gold/Silver reacted to the nonsense.  Markets spinning wheels right here.

The Closing Look

Stocks were quiet on Tuesday as investors digested the latest round of earnings and economic data as the Fed began its two day meeting. On average economic data was somewhat positive with some strong data coming from the housing market. Separately, earnings data continues to be mixed as earnings roulette continues (some stocks gap up and some gap down after reporting earnings).

Gary’s Thoughts: Market much better than the indices. All’s fine. Steels now showing up. Big news is the ADI for LLTC. Another overpriced buyout of a no growth company because easy money makes it easy.

The Morning Look

Market Update:

Stock futures are a little higher ahead of Wednesday’s open as investors wait for the Fed and the latest round of economic and earnings data to be released.

Gary’s Thoughts: But NDX futures up nicely off of crappy Apple numbers…but they said things will get better. Apple up $7…which helps Dow and NDX…with suppliers also up. Earnings were down 27%…sales down 15%…but all’s well!

  • MBA Mortgage Applications 7:00 AM ET
  • Durable Goods Orders 8:30 AM ET
  • Pending Home Sales Index 10:00 AM ET
  • EIA Petroleum Status Report 10:30 AM ET
  • 2-Yr FRN Note Auction 11:30 AM ET
  • FOMC Meeting Announcement 2:00 PM ET

Highlights:

  • The DNC convention or as we say…Fantasyland is underway. People who keep telling us how bad things are keep telling us Trump paints a bleak picture. People who always tell us how badly we need them continue to tell us how badly we need them. We’ll have more on this in a couple days.

Insider alert on Netflix

Netflix Director Jay Hoag bought 600K shares worth $51.9 mln  disclosed last night, purchases made 7/21-7/25 at average price of $87.66.
Remember, just because insiders buy, does not mean the stock has to cooperate. We are just always interested when we see sizable purchases.
Positions-NONE!

The Morning Look

Market Update:

Stock futures are a relatively quiet ahead of Tuesday’s open as investors wait for another busy week of earnings and economic data. A slew of companies are reporting earnings this week, the Bank of Japan and the U.S. Fed are both meeting. Then, GDP will be released on Friday. Most importantly, the market is pausing to digest the strong post Brexit rally.

Gary’s Thoughts: Quiet indices but lots of earnings moves…MCD,MBLY,GILD,SANM,NDLS,UA,MMM on the downside..LVS,MAS on the upside…

Apple after the close.

estimates are $1.38 vs last years $1.85…a big drop. Estimates been coming down throughout the qtr in order for them to beat the number…sales   $42.1  vs $49.6 billion…a huge year over year drop…

 

  • FOMC Meeting Begins
  • Redbook 8:55 AM ET
  • S&P Case-Shiller HPI 9:00 AM ET
  • PMI Services Flash 9:45 AM ET
  • New Home Sales 10:00 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

Highlights:

  • Dems in chaos. Berning up protesters take to Philly streets at Democratic convention
    Gary’s Thoughts: It is a socialist paradise!
  • More Violence over the past few days. This time it was in Japan. Before that a nightclub in Fort Myers and before that a shooting spree in Munich, Germany.
    Gary’s Thoughts: And now another attack in France.

The Closing Look

Stocks fell on Monday led lower by falling energy prices. Over the weekend, the G20 said it will use ‘all policy tools’ to lift growth after the Brexit vote. Later this week, The Bank of Japan (BOJ) and The U.S. Federal Reserve are slated to meet and a slew of earnings will be announced. Central banks continue to throw everything (including the kitchen sink) at markets and for now it is working. Gary has told you, eventually, it will end badly.

Gary’s Thoughts: No biggie day…unless you own Gold and Oil. More oil stocks breaking down as oil prices continue to swoon. Gold just in pullback mode.  Remember, crapload earnings coming out…many Dow names this week…and yes…the Fed.

Weekend Notes!

None of our themes have changed.

The breakout of the 18 month trading range in the Dow and S&P was nothing but bullish. We said that based on precedent. Whenever a couple of major indices break out of long ranges, it usually works for a while. But there was something else that was also very bullish and that was the 11 percent cash in mutual funds and pension funds. A breakout combined with that kind of ammo is a great one-two punch. Just remember, as markets go higher, managers that have too much cash feel the breathing down their necks…thus things tend to feed on themselves.

Earnings and sales growth continue to stink. BUT guidance came down so far that we are seeing the “beat the number” game successful. We continue to see a ton of down earnings and sales but as we have always said, “it’s not the news, it’s how the market reacts to the news. The fact is it is bullish when perceived news is bought up.

Lastly, we continue to believe this higher market remains a continuation of the huge, gargantuan, humongous, monolithic and unfathomable easy money policies by just about every player around the globe. We have highlighted for you the 0 percent rates, the printing of (depending on what abacus you are using) over $20 trillion and counting, negative rates and the outright buying up of markets by central banks.  We could have never predicted how far these maniacs would raise the bar or should we say lower the bar when it comes to manipulating and rigging of markets. They will never be able to roll this back. They wouldn’t even dare. The bubble continues…with the bond market being the biggest bubble in history…much bigger than the 99 internet bubble.

We have seen nothing but improvement. We have seen many base breakouts. We are now seeing lagging areas turning the corner.  We have felt a clear lack of selling. And to add some fuel, we don’t think many believe this is happening. As technicians first, believe it. Price first. Everything else second. Now watching to see if the NYSE, Russell 2000, mid caps and others move above resistance. Odds favor they do.

A few other notes:

Foreign markets remain much weaker than U.S. markets.

Large caps continue to outperform small caps but small caps are coming on.

If oils and financials can go topside, expect more fireworks. These two important areas remain range bound.

Gold/silver remain very bullish but look to be in pullback mode.

Yields have crashed again. We think this is a good part of the reason for better markets. It is no accident that the interest rate sensitive utilities and reits continue to lead.

Shorter-term, pullbacks can happen at any time. Many of our bull/bear stats have turned decidedly bullish (this could be near term bearish) but we think if any pullback occurs, it will be nominal, controlled and rotational at this time.