Monday, June 09, 2014

Good Morning America, How Are You?

I live in a rural area on 2+ acres of land.  I have two next door neighbors one on each side that live on the same amount of land.  This weekend, my neighbor on the right hand side decided to have a huge over the weekend party with loud music, drugs and alcohol.  When I use to live downtown SF, we would have called the cops, and made them stop the noise.  Not in the country, though.  And that is particularly true when 1. the owners are an old 3rd to 4th generation family of the area, 2. The wife is a politically elected official of the county, 3. The elected sheriff was part of the party. 

Not a good weekend, I'm sad to say. 

Have a great day.  Enjoy your food, wine and your family. 

Summary: 

1.   There is little news until Thursday that will drive the market this week.  On Thursday, we will get the retail sales report.  Trading volume will likely be limited (to miniscule) until Thursday. 

2.   The Chinese Renminbi appreciated overnight.  The size of the appreciation was unexpected, as it was the largest appreciation in years.  China printed a very strong Trade Surplus for May. Chinese imports fell, however, but many analysts are concluding this was due to Chinese enforcement cracking down on copper and aluminum shipments into ports where the people were counting the inventory as double and triple the amount received.  The conclusion was that imports falling was not a reflection of internal domestic demand.

3.   BLS (Bureau of Labor Statistics) showed 217,000 jobs were created.  Looking closer, BLS added 205,000 jobs that were pulled out of thin air by whatever it is that BLS assumes (not reality) happened.  205,000 out of the 217,000 was added by BLS, and that makes a total of 439,000 jobs added by BLS that are assumptions - not reality. 

4.   This fooling the people all the time shows up in currency valuation.  If the labor report was so good, then the $$$ should have shot up particularly against the Euro.  The dollar could not find a bid, and the dollar was taken to the woodshed by almost every currency in the world.  Foolishness - but BLS fools the citizens of the USA all the time.

5.   Canada printed a lukewarm job report on Friday.  Unemployment rate ticked up to 7% from 6.9%.  Basically, Canada's employment is barely keeping its nose above water (and nothing else).  How did that affect the currency?  The Canadian dollar lost against most currencies, but held steady against the US dollar.  

6.   The Bulls are in charge of the US equity markets at this point. The S&P 500 is trading a P/E of 17.4.  That is at the very high end of the range of normal economy in the USA.  The market is being asked to go up, which may be very difficult to do. 

7.   Maybe the breakout to the upside that started May 16 is real, and we will get a RARE summertime rally. 

The US Equity markets should be very choppy today.  The volume should be on the extreme side of low.

Be very careful today if you are a day trader.  The NY boys and girls can do almost anything to the market they want when volume is low.

 

Remember: For the first time in recorded history, we have the USA, Japanese, EuroZone, and British printing money at a historic rate.  We have a OCEAN (absolutely unbelievable) of liquidity.  This liquidity is making the European and USA stock market do well, but there are very few signs that it is doing anything for the economies of those countries (except Germany in the EuroZone).  What is the price the vast majority of people will pay when money printing ends?  Study history, and wonder how Dr. Paul Krugman can continue to support economically the devaluation of the USA currency.