The Morning Look
Market Update:
Stock futures are quiet ahead of Tuesday’s open as the market continues trading near record highs.
Gary’s Thoughts: Apple told to pay billions in taxes. Not much else happening!
Economic Data:
- Redbook 8:55 AM ET
- S&P Case-Shiller HPI 9:00 AM ET
- Consumer Confidence 10:00 AM ET
- State Street Investor Confidence Index 10:00 AM ET
- 4-Week Bill Auction 11:30 AM ET
Highlights:
- Apple Invitation Announces Sept. 7 Event
Gary’s Thoughts: New Iphone…yippeeee! - Chinese Drug Sales to the U.S. Grow Despite Safety Concerns
Gary’s Thoughts: Headache anyone?
As long as the banks are going up, on anticipation of ( ….higher interest rates !!!!! ), this market has no where to go, but to hold, or go higher..
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Bank stocks going up on higher interest rates, hum,, interesting theory…
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Theory: As interest rates go higher, the banks can make loans for a greater rate of return, and their stocks go higher on the anticipation of increasing profits. And as the bank stocks go higher so goes the market.
Hummm…..higher interest rates, driving the market higher ….hummm,,,a fundamental change in the laws of economics ??????
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The only problem is; higher interest do not stimulate an economy, they slow it, thus reducing profits for banks, not increasing them.
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So if the theory of rising interest rates increasing profits for banks is fundamentally flawed;
Q; why are the bank stocks going up ?
A; I dunnoo… my best guess is, the fed is rigging the banks to go higher, so when/if they raise interest rates, the banks will fall with the rest of the market, …..but they will fall from a leadership position, and from such a high level, that the fall will be only on to 50d/ma support, and the world will greet the fall with a shrug/yawn.
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Butt, then again , maybe the bankers ( the money printers ) have found a new fundamental law of economics; that being, every interest rate increase, leads to higher profits for banks, leading their stocks higher, …..leading the market higher, …..and stimulating the national economy.
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If yes, …..if the money printers have discovered a new fundamental law of economics, then as interest rates rise, the economy will accelerate, and over heat, to the point where the fed will be forced to lower rates, ………………….. to cool off the economy !
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Or as the Russian people used to say before they were liberated from communism, “They pretend to tell us the truth, and we pretend to believe them.”
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Fart.