Tuesday, June 17, 2014

Tuesday, June 17, 2014

Good Morning America, How Are You?


Listening is not easy for me anyway.  I did not talk to anyone yesterday except my wife.  I tried to give my full attention to her day.  My mind wandered.  Sigh... Today I hope to do better, although I don't expect to talk to anyone but my wife again today.

It rained hard off-and-on yesterday.  My early peonies have the petals lying in a puddle on the ground.  The life-cycle starts again, and the shiny green of the leaves are still attractive in the overall garden (or so I think).  My Tree Peonies look so sad after having huge 24 inch blooms all over them.  I look forward to next year.   My late peonies are just blooming. 

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

Small Business Outlook


The NY Times had several articles and opinions on immigration today.  The one that caught my was "Migrants Flow in South Texas, as Do Rumors".  Carmen Avila recently came to the US, seven months pregnant and with a 4 year old son. 

" I heard in Guatemala that people were caught by immigration, but then they let them go and gave them a permit. The word got around, and that's why so many people are coming."

To immigrate in the way many from Central America are immigrating is a tough and dangerous journey.  And yet, where are the jobs?  For if they come, then there must be jobs. 

Are not nearly all of these immigrants basically untrained for anything but menial jobs?  If so, then what are the young USA citizens trained for? (meaning why are the large majority of young people unemployed? Is it not because there are only a few jobs for the untrained vs the amount of people willing to take those jobs?)

The articles in the NY Times pull at your heartstring, but they don't explore the other side of the issue for the USA citizens themselves.

Small Business is where most of these people that are allowed to stay will be employed.  Yet, irrespective of the White House's rhetoric, the government is not helping the really small businesses that must employee these folks. 

Summary: 

Did you know that the stock market is nuts.  Looking at the news from yesterday, (not just financial news, but all news) does the market move make sense? 

Here is a 5 minute chart of NQ mini futures starting at the opening in NY from yesterday.

  
The market went up, then collapsed, then went up and chopped.  What does that tell you?

Possibly, the news on Industrial Production drove the market until the housing report at 7:00Am PDT. 

No, the housing report was not that bad.  It actually beat consensus.  New Home sales were showing improvement. 

Then what happened at 8:30 that made the market reverse with no consolidation?  Who knows, but the DOW, S&P 500 and the Nasdaq all closed in positive territory. 


Somewhat the market is waiting on the 2 day FOMC meetings that start today.  Are investors, banks and traders expecting any earth shaking news?  No, but it is the rule now to wait for the Federal Reserve and the European Central Bank to tell us how they are planning to rule the world.

This morning, the consumer price index is showing warmer inflation than expected.  The inflation Genie is trying to escape the bottle, and the Genie is not benign. 

However, if the Genie is anywhere near escaping, would we find metals exploding to the upside?  Well the Gold Bugs would certainly want you to believe that, and if you follow them, then Gold is being hammered down yesterday and today.  Copper is also moving lower with only a couple of days of respite.  What does that say about inflation?  Actually, nothing... If you don't get irate over "nothing", think about what leads? Does inflation lead Gold and Silver, or does Gold and Silver forecast inflation? 

Central Banks are still fighting deflation, and have chosen to ignore any inflation. Investors worldwide will very likely be looking for Janet Yellen to clarify the global economy and the USA strategic position on QE.  If so, look for the market to be choppy until Wednesday's FOMC announcement and Dr. Yellen's statement on the meeting. 

Maybe, just maybe, markets go down sometimes simply because there is more selling interest among traders and investors than buying interest.  And on the flip side, markets sometimes go up because there is more buying interest than selling interest.  There can be all kinds of opinion on why markets are doing what they are doing.  But in the end, price goes up and it goes down; sometimes without any information that explains why. 

This morning the S&P futures market were higher.  Then the CPI report and housing reports were released.  CPI was higher than expected (as noted).  However, housing starts were lower.  CPI caught the trader's ears in Treasuries which fell to a new session low after the release of the CPI. 

Housing starts fell 6.5% in May.  Single family starts declined 5.9%.  Building permits are used as leading indicator of future housing data.  Building permits were down. 

Overall, I can't help but wonder if the economic news is mixed, and the markets will chop (once NY is open for trading) until FOMC minutes on Wednesday.  Things are just too confused at the moment.  
  

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