Welcome Stockaholics to the trading week of July 11th! This past week saw the following moves in the S&P: Bird's Eye view of the Markets on Friday: Economic Calendar for the Week Ahead: Sector Performance WTD, MTD, YTD: What to Watch in the Week Ahead: Monday Earnings: Alcoa 10 a.m. Kansas City Fed President Esther George on economy Tuesday Earnings: Fastenal, Adtran 6 a.m. NFIB survey 9:15 a.m. Fed Gov. Daniel Tarullo on shadow banking 9:35 a.m. St. Louis Fed President James Bullard 10 a.m. Wholesale trade; Jolts 1 p.m. Three-year note auction 6:30 p.m. Minneapolis Fed President Neel Kashkari 9:30 p.m. Cleveland Fed President Loretta Mester on financial stability Wednesday Earnings: CSX, Yum Brands 8:30 a.m. Import prices 9 a.m. Dallas Fed President Rob Kaplan on economy 1 p.m. 10-year note auction 2 p.m. Federal budget; Beige book 6 p.m. Philadelphia Fed President Patrick Harker on economy 10:30 p.m. Cleveland Fed's Mester on economy Thursday Earnings: JPMorgan Chase, BlackRock, Delta Air Lines, Taiwan Semiconductor, Progressive, First Republic Bank 8:30 a.m. Initial claims; PPI 10 a.m. St. Louis Fed President James Bullard 11:15 a.m. Atlanta Fed President Dennis Lockhart 1 p.m. 30-year bond auction 1:15 p.m. Kansas City Fed's George on economy 7 p.m. Dallas Fed President Rob Kaplan on economy and policy Friday Earnings: Citigroup, Wells Fargo, US Bancorp, PNC, Shaw Communications 8:30 a.m. Retail sales, CPI, Empire State survey 9:15 a.m. Industrial production 10 a.m. Consumer sentiment; Business inventories 1:15 p.m. Minneapolis Fed's Kashkari and St. Louis Fed's Bullard in discussion
Spoiler: Jobs Bounce Sends Stocks Soaring To Record High As Bond Yields Hit Record Lows Well punk, "do you feel wealthy?" First things first, there is this... (2130.82 record close, 2134.72 record intra high) *S&P 500 RALLIES 1.6% TO 2,130.83, RISING ABOVE RECORD CLOSE And then there is this... for 2016... And since Brexit... And today... While on the topic - cash indices reached pre-Brexit levels... Stocks went sideways after Europe closed... And S&P Futures managed to run the stops above the Brexit peak... But financials remain below pre-Brexit levels... Despite the best efforts to mash VIX, S&P cash couldn't hold above the record close... Since June's dismal payrolls print, Gold is the major outperformer... But today's "goldilocks" data meant buy everything... Trannies rose most in 4 months today - having "death-crossed" on Wednesday... VIX has dropped over 48% in the last two weeks... the biggest collapse in fear ever.... And stocks and oil decoupled... Only short-dated yields rose on the day and week as the long-end continued to plunge.. 2s30s has flattened for 6 straight days, crushing the yield curve by 28bps in the last 2 weeks - the biggest crash since the US downgrade in 2011 So curve is collapsing... BUY BANKS??!! 30Y Yields closed on the lows today... at an all-time record low... Stocks-to-Bonds yield spread near 8 year highs... On the day, the USD Index ended unchanged, despite some significant swings around the payrolls print... Commodities were mixed with PMs gaining but crude and copper getting crushed... Copper's worst week in 6weeks Crude's worst week in 6 months Gold up for the 6th straight week...longest streak since Aug 2011 Silver up for the 6th straight week...longest streak since April 2011 So - to summarize - Buy Stocks, Buy Bonds, Buy Gold, Fade the Dollar, Sell VIX... sounds an aweful lot like front-running QE4 trades. Charts: Bloomberg
Spoiler: Weekend Reading: Central Banks Save The World Submitted by Lance Roebrts via RealInvestmentAdvice.com, You have to admit it is really quite amazing. Two weeks ago, Central Bankers and leading politicians were exclaiming that if Britain left the E.U. it would be a catastrophic economic event on the magnitude of a “Lehman” moment. However, despite all of the “hand-wringing,” if you had been asleep over the last month, as shown in the chart below, you wouldn’t know something had happened. Of course, it was the “rapid response” team of the Federal Reserve, Bank of England and ECB that provided “bulls” the fuel to push asset prices back to recent levels as I discussed last weekend. For now, Central Banks have seemingly accomplished the rescue of the entire global financial system by one again lofting asset prices higher. The problem, however, remains the underlying fundamental issues of weak earnings, slowing economic growth and a collapsing Chinese economy. There is a point, unknown to anyone currently, where the failure of monetary policy will occur. The resulting impact will likely be one of the worst financial disasters in human and financial history. But that is a topic for later. For now, here is your reading list for the weekend. “Things are shaky and feeling dangerous.” – Jeff Gundlach BREXIT BIOPSY Brexit: Breaking Bullish or Bearish? by Dr. Ed Yardeni via Dr. Ed’s Blog The World Is Rebelling Against Experts by Joel Kotkin via The Daily Beast Worst Is Over For Brexit? by Ben Chu via Independent Blindsided By Brexit Bias by Timarr via Psy-Fi Blog We Are All Keynesians Now by Jeremy Warner via The Telegraph Markets Never Saw It Coming by Leo Chen via Cumberland Advisors The Second Domino by Scott Sumner via Econlog Something Big Is Coming by Tyler Durden via Zerohedge End All The Myths: Italian Version by Jeffrey Snider via Alhambra Partners THIS, THAT & THE OTHER THING Clinton/Trump Are Both Wrong by Danielle DiMartino-Booth via Money Strong 5 Bricks In Wall Of Worry by Macro Man Central Bank Bubble Worst Of All by Comstock Partners 13 Thoughts About Bear Markets by Ivaylo Ivanov via Ivanhoff Capital What I Learnt From Paul Tudor Jones via What I Learnt On Wall Street Retirement Is Making People Miserable by Catey Hill via MarketWatch Commercial Bankruptcies Skyrocket by Wolf Richter via Naked Capitalism 4% Withdrawal Rate, Don’t Bet On It by Wade Pfau via Forbes Buffett Indicator Giving False Signal? by Luke Kawa via Bloomberg Fasten Your Seatbelt by Mark Hulbert via USA Today Stocks To Bonds: “I Can’t Hear You.” by James Mackintosh via WSJ When A Storm Is In The Offing via Research Affiliates 3-Things About Record Low Yields by Mohamed El-Erian via Bloomberg What The Bond Market Is Telling You by Norman Mogil via Sober Look Fed: It’s Just A Game Of Monopoly by Bill Gross via Janus Funds $10 Trillion About To Be Wiped Out by John Hussman via Hussman Funds Dividend Cut Warning by IronMan via Political Calculations Bubble In Search Of A Pin by John Hussman via Hussman Funds Here We Go Again. 2007 Redux by David Stockman via Contra Corner Dow-Utility Divergence A Bullish Setup? by Dana Lyons via Tumblr Long Bonds Enter Blowoff Stage by Jesse Felder via The Felder Report Risk Can Happen Fast by Doug Kass via Real Clear Markets “Half the plowing is in the planning.” – Arthur Cutten
July’s Typical Trading Pattern Last 21-Years With about an hour left in today’s trading session, the fifth trading day, DJIA is up 1.24%, S&P 500 1.48%, NASDAQ 2.32% and Russell 2000 2.19% so far this July. This is well above the average gain over the past 21 years at this point in July. At this point in July’s typical trading pattern (black dashed line), some weakness could be expected early next week followed by strength around mid-month and some additional weakness thereafter. Q3 is the WORST DJIA Quarter of Election Years since 1952 At StockTradersAlmanac.com we have been discovering, studying, analyzing, updating and testing the validity of historical stock market patterns, or seasonality, since before the first Stock Trader’s Almanac was published in 1967 by Yale Hirsch. Some patterns withstand the test of time, some slowly fade away and others just abruptly end. Some patterns and trends are the result of law, but most are the result of human behavior and slow changes in society over time. One point that is continually misunderstood by some is the drastic, market impacting changes that took place in the United States following the end of World War II. Prior to about 1950, farming was a major portion of the U.S. economy and from 1901-1950, August was the best performing month of the year, up 36 times in 49 years (market closed in August 1914 due to World War I) with an average gain of 2.3%. July was the second best month, up 31 of 50 with an average gain of 1.5%. June was fourth best, averaging 0.9%. Why, you may ask. In a single word, harvesting. As crops were brought to market and sold cash began to move and so did the stock market. Agriculture’s share of GDP began to shrink post World War II as industrialization created a growing middle class that moved to the suburbs where hard-earned salaries would be spent filling new homes with all the modern conveniences we all take for granted now. Farming became more efficient and fewer and fewer people worked on the farm. Suddenly, summer was less about the hard work of harvesting crops and more about vacations and relaxing. As the economy evolved and peoples’ lives changed, the market evolved. June and August went from being top performing months to bottom performing months. August went from #1 to #10 in 1950-2015 with an average loss of 0.2%. June went from #4 to #11 (–0.3% average loss). The shift in DJIA’s seasonal pattern is clear in the above chart. The drop off in August’s performance, the second month of the third quarter, also caused a sizable decline in the third quarter’s performance. Looking at just election years in the following table, you can see Q3 (grey shading) towered above all from 1904 through 1948 with an 11.08% average gain. A 67.04% advance in 1932 contributes greatly. Going from 1904 to 2012, Q3(grey shading) is still the best quarter of the year however, when you begin in 1952 and move forward, Q3 in election years goes from best to worst. Q4 (grey shading) is now the best quarter of election years. DJIA back signaling an incumbent party victory this November Last week’s rally had virtually erased all losses from the Brexit vote market rout. As of last Friday, DJIA had bounced back and was effectively following the historical seasonal pattern associated with incumbent party victories. This would suggest Hillary Clinton will be the next President. S&P 500 is back on track and following the typical all-election year pattern. NASDAQ continues to lag DJIA and S&P 500 and is still negative year-to-date.
This week's market Wrap and Sector Watch Caution Flag moved to Yellow >Impressive week for the bulls Video
This week's stocks to watch for next week http://ticker.tv/vegastrader66/57826e1bf72261bb65f50f7d $ESI $DGLY $MXL $NEO And many more
Since it's the weekend I'll go off topic for a minute. Check this out, Sony is working on contact lenses that playback video. Man that is cool!
Great another thing I'll need to recharge. Thinking of investing in USB ports. Or battery companies...imagine if someone can come up with solar batteries that can fit into fitness bands and the like. That will be the technological breakthrough.
/ES +10 handles tonight looks to be enough for a brand spanking new bull market high at long last if this holds through cash open tomorrow morning big time props to those of you who were calling for new highs this summer ... now the question i have is will this breakout of new highs on the sp500 eventually lift the other majors into new high territory as well ... usually i'd like to see the nasdaq, russell, and dow transports/industrials to join in as well ... we shall see but thus far looking like a good start here
i'll have to go check out the stats on this one ... but honestly i can't say i can remember a period where the market has gone this long between new highs and did not pull at least a minimum -20% draw down in price ... interesting ... this is already the 2nd longest bull market ever in history ... personally i'll be damned if this makes a run for the longest bull market in history which was during the raging 90's bull run ... but who knows it could happen lol hard to think anything stops this train at this point when you have the likes of the fed, ecb, boj, and others back stopping the markets every time there is sizable decline ... at some point the music will end ... but timing it and trying to predict when that is truly is a fool's errand as we have witnessed time and time and time again
China stocks rise on stimulus optimism; Hong Kong up SHANGHAI, July 11 China stocks rose on Monday after inflation data over the weekend raised hopes the government may deploy more stimulus in the second half of the year to prop up the sluggish economy. http://in.reuters.com/article/china-stocks-midday-idINL4N19X1WA
hmm, yea thats the real issue, its just the S&P playing with new highs, if the nasdaq and dow arent there, then this could be just a hit a high and run back down or another way to look at it could also be hit a high and now the others play catch up, which would be crazy bullish, but i dont see that one happening, depends on earnings.
Europe shares rise; FTSE hits 11-month highs; Japan stimulus eyed European stocks posted strong gains during Monday's trade as investors contemplated more monetary stimulus from Japan and continued to cheer the positive jobs data from the U.S. on Friday. The pan-European Stoxx 600 index extended gains, up 1 percent with most sectors in positive territory.
