The Morning Look

Market Update:

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

Gary’s Thoughts: We are back in the states and will have a full technical report for you tonight…on teflon market. Really starting to see beta here. So the short version:

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.

Another one of our themes confounds the masses and that is that earnings and sales growth continues to stink. Economies here and around the globe remain subpar at best. Debt and deficits continue to explode upwards. Normally this would be a problem for markets but there are other forces at work. We continue to expect a day of reckoning but have no idea on what day or from what price it starts.

Lastly, we continue to believe this market move is the result of another ramping up and is 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% 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. Since the low of February, we have seen lower negative rates, more printing of money, more buying up of markets and that is just what they tell us. By our count, the globe is printing more than $250 billion/month in order to keep markets and economies afloat.

 

 

 

Economic Data:

• 3-Yr Note Settlement
• 10 Yr Note Settlement
• 30-Yr Bond Settlement
• Empire State Mfg Survey 8:30 AM ET
• Housing Market Index 10:00 AM ET
• Treasury International Capital 4:00 PM ET

Highlights:

• Beleaguered Pound About To Break Support Of Big Bear Flag Amid Raft of Post-Brexit Data
  Gary’s Thoughts: Sure looks lower.

• Venezuela Just Increased the Minimum Wage by 50%
  Gary’s Thoughts: Basket case is being too nice.