Weekend market report!

By Gary Kaltbaum
@GaryKaltbaum
garyk.com
Fox News Business Contributor

The first number is earnings. The second number is sales.

The fundamental side!

EBAY…-7,-2…the stock gaps up and continues.
COKE…-4,-5…the stock rallies.
MMM…+4,-5…$6 gain on the news…and they warned going forward.
CATERPILLAR…-55,-19…the stock reverses up. Yes…that was -55 and -19.
INTEL…-3,-1…reverses up and continues up.
JPMORGAN…-19,-6…initially down, reverses up and continues up.
GOLDMAN…-37,-16…reverses up…hanging in.
MICROSOFT…+3, -12…huge gap up for a stock like MSFT.
TEXAS INSTRUMENTS…0,-2…gaps up big and continues up.
UNTITED TECH…-2,-6…rallies 4 days in a row.

We can go on and on. Earnings and sales stink and they are not getting any better. So what is going on? The same thing that has been going on since Mr. Bubble went into the easy money playbook…more easy money. Think about this. We have had 0% rates for about 7 years. We have not hiked rates in about 9.

0% rates pervade the globe with many areas now having negative rates. According to my faulty abacus, there has been $15-20 trillion printed with many areas still printing. So what happens? MORE EASING! Europe and China announce more easing…and again, markets buy into it. China cut rates for the 6th time even though they say they are still growing at 7% and Europe announces an extension of QE as well as telegraphing more QE…so away we go. Do not forget, China arrests people if they just say the wrong thing about markets and has admitted to printing big Yuan to buy up stocks. Do not forget, Japan is still printing a ton and has been buying up their market with debt.

So how does this all end? We will let the predictors deal with that. We have our own opinion but we do not want it to get in the way of what is currently happening. And what is currently happening is the market buying up bad news and gapping up good news in names like Google and Amazon.

Markets are near term stretched to the upside and quite overbought. One would suspect pullbacks are now in order but in bubbleland, anything is possible. Keep in mind, there is a crap load more earnings ready to come out with the big enchilada in Apple reporting on Tuesday.And now we get to be held hostage again by the egomaniacal Fed that has to be front and center on a daily basis. Hike…no hike…hike…no hike…blah blah blah.

Large caps are completely outperforming small and mid-caps right now. In the past two weeks, the Dow is up 600 points while the Russell 2000 is flat. The same for mid-caps. It should be obvious by now the Nasdaq and NDX continue to be led by just a few large names. Keep in mind, there are still plenty of areas not working…with Retail actually breaking down badly late last week. Massive overhead resistance straight ahead.

The METS in 5 or 6.