The Morning Look
Market Update:
Stock futures are relatively quiet ahead of Wednesday’s open one day after the major indices hit fresh record highs and topped psychologically important levels. The stock market will be closed all day on Thursday (in observance of Thanksgiving) and close at 1pm EST on Friday.
Gary’s Thoughts: Futures down…nah, that can’t be. Market never going down again. BIIB and LLY smoked on negative drug news. We remain bearish on drugs/biotech. DE reports earnings down, sales down…but MUCH BETTER NUMBERS THAN EXPECTED. Up 10% pre market.
Hope all have a terrific Thanksgiving. Do something for someone you need absolutely nothing from.
Economic Calendar:
- MBA Mortgage Applications 7:00 AM ET
- Durable Goods Orders 8:30 AM ET
- Jobless Claims 8:30 AM ET
- FHFA House Price Index 9:00 AM ET
- PMI Manufacturing Index Flash 9:45 AM ET
- Bloomberg Consumer Comfort Index 9:45 AM ET
- New Home Sales 10:00 AM ET
- Consumer Sentiment 10:00 AM ET
- EIA Petroleum Status Report 10:30 AM ET
- EIA Natural Gas Report 12:00 PM ET
- 7-Yr Note Auction 1:00 PM ET
- FOMC Minutes 2:00 PM ET
Highlights:
- Dow and S&P 500 Top 19k and 2,200 respectively
Gary’s Thoughts: Yippee! - Judge blocks Obama administration rule extending overtime pay
Gary’s Thoughts: Another mandate shot down. We have had just about enough of government dictating everything in sight.
Fundamental economics:
The greater the fall in the US T- bonds, the higher the interest rate.
The higher the interest rate, the stronger the dollar.
The stronger the dollar, and the higher the interest rate, the greater are the profits are for the banks…
…..( fart ).
The greater the profits for the banks, the higher the bank stocks go, and ….
as the banks rally on interest rate lead profits, so does rally higher the stock market.
As interest rates go up, so goes up the banks, followed up by the stock market.
It’s all simple economics.
……(fart).
x
x
Q: How high can the stock market rally, as interest rates go higher ?
A; ………………… dunno, but if interest rates keep going up, the banks stocks will keep going up , and as bank profits go up, the stock market could rally all the way to the moon..