STILL NO ISSUES

Gary Kaltbaum

April 19,2016

We continue to be asked  how can markets go up with earnings and sales going down. We repeat:

Since the lows, Europe has increased and extended the printing of money to 1 trillion/year. They have also stated they have more they can do…and are now buying up markets.

Japan has extended and added to their printing of money. They have also stated there was more they could do and continues to buy up its markets.

China has eased, eased, and eased more. China continues to buy up its markets.

The UK prints. Norway prints. Others print!

And just last week India, Indonesia, Turkey, Hungary and Taiwan all lowered rates.

And lastly, Yellen completely rolled back any chance of rate hikes and floated more printing of money here in the United States.

All this on top of the fact 0% rates pervades the globe and now, negative rates are becoming the new normal.

So…a quiet but coordinated worldwide effort to get asset prices going again is working again. Trillions of dollars into the system works.

Just a few tidbits on earnings:

Morgan Stanley earnings down 35…sales down 20%.

Citigroup earnings down 27…sales down 10%.

JP Morgan earnings down 15…sales down 2%.

Goldman earnings and sales way down.

Netflix earnings down 45%.

Blackrock earnings down 13…sales down 4%.

We could go on! Bottom line. EASY MONEY is again doing the trick. When we called for a good low back on Feb 11-12, we thought we would rally a few weeks and rally into resistance…but resistance is now slowly getting taken out. As we told you, everything that led the market down for 18 months was turning the corner. This included energy, steel, copper, aluminum, metals, mining, industrials, emerging markets and now this morning, Europe is moving above some important resistance.

Regardless of the news you continue to read. (You are now hearing GDP for QTR 1 will be near flat), this market continues to act well. As technicians first, watch the S&P and DOW here closely. A break above all time highs would be a big,long trading range breakout…and frankly, it would not be smart to fight it. We do suspect old high resistance could provide a fight but time will tell.

Gold and especially gold stocks continue to act well and now silver is coming on very quickly.

And lastly, a crapload more earnings to come out. Stay tuned but right now, looks like it does not matter. We do recognize the “sell in May and go away” period is coming up.