(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers. )
BLOW OUT JOBS NUMBER, BRAZIL ROCKETS 6% ON LULA ARREST
This is what you need to know today.
Nonfarm Private Payroll came at 230K vs. 180K consensus.
This number is known as the mother of all numbers because the stock market pays the most attention to this number. It is important to note that this is a lagging indicator.
In Brazil stocks rocketed about 6% on the news about the arrest of ex-president Lula. Charges against Lula are corruption. Yesterday morning we wrote:
Brazil is in the worst recession in three decades, GDP declined 1.4% in the final quarter of 2015. Budget deficit is running at 10.8% of GDP. The country continues to be hampered by corruption scandals.
Brazil’s central bank has left the benchmark Selic interest rate at 14.25%, compare this to negative interest rates in certain parts of the world.
The reason for stock market rocketing is that the president Rousseff is a protégée of Lula. The thinking is that the Lula arrest may facilitate impeachment of Rousseff. The Brazilian stock market does not like Rousseff because of her leftist policies and mismanagement of the economy.
Oil is range bound.
Interest rates are ticking up on strong jobs report and bonds are falling.
Currencies are range bound.
Gold first fell on strong jobs report as it should have, then the momo crowd stepped in and started buying it aggressively.
Our very, very short-term early stock market indicator is neutral but can turn quickly.
Gold futures are at $1266, silver futures are at $15.55, and oil futures are $34.63.
S&P 500 resistance levels are 2000, 2017, and 2038; support levels are 1962, 1920, and 1900.
DJIA futures are up 31 points.
What To Do Now?
It is important for investors to look ahead and not in the rear view mirror.
Consider continuing to hold existing positions. Based on individual risk preference, consider holding cash 26 – 42%, and short to medium-term hedges of 25%.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
A Reminder
As our long time subscribers know well, that during the 2008 and early 2009 market crash, when stock market lost about 50%, subscribers to The Arora Report made money by the boat load. For long only investors, this remarkable performance was achieved by using inverse ETFs.
Our models do not expect a repeat of 2008. In the most likely worst case, there may be a garden variety bear market that typically occurred every 18 to 24 months prior to the recent six-year market run.
Individual Trades
Please click on Home on the left side of the Menu. Scroll down on the Home Page for individual trades.
Click on the Search by Symbol/Tag on the right hand side and click on the symbols of interest.
FEAR INDEX CAPITULATES AHEAD OF THE MOTHER OF ALL NUMBERS, BRAZIL STUMBLES TO A THREE DECADE LOW
This is what you need to know today.
VIX, also known as the fear index has capitulated to about 17 ahead of the mother of all numbers. Recently, VIX traded above 29.
The mother of all numbers is the employment report that will be released by the U. S. Department of Labor tomorrow at 8:30 am ET. This is likely to be a market moving event.
Initial Jobless Claims came at 278K vs. 270K consensus. As our long time subscribers know, this is a leading indicator and has heavy weight in our models.
Brazil is in the worst recession in three decades, GDP declined 1.4% in the final quarter of 2015. Budget deficit is running at 10.8% of GDP. The country continues to be hampered by corruption scandals.
Brazil’s central bank has left the benchmark Selic interest rate at 14.25%, compare this to negative interest rates in certain parts of the world.
The momo crowd still refuses to believe that the stock market has rallied and continues to aggressively buy gold. Smart Money is beginning to lightly sell gold.
Oil, currencies and interest rates are range bound.
Our very, very short-term early stock market indicator is neutral.
Gold futures are at $1243, silver futures are at $14.99, and oil futures are $34.45.
S&P 500 resistance levels are 2000, 2017, and 2038; support levels are 1962, 1920, and 1909.
DJIA futures are down 14 points.
What To Do Now?
It is important for investors to look ahead and not in the rear view mirror.
Consider continuing to hold existing positions. Based on individual risk preference, consider holding cash 26 – 42%, and short to medium-term hedges of 25%.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
A Reminder
As our long time subscribers know well, that during the 2008 and early 2009 market crash, when stock market lost about 50%, subscribers to The Arora Report made money by the boat load. For long only investors, this remarkable performance was achieved by using inverse ETFs.
Our models do not expect a repeat of 2008. In the most likely worst case, there may be a garden variety bear market that typically occurred every 18 to 24 months prior to the recent six-year market run.
Individual Trades
Please click on Home on the left side of the Menu. Scroll down on the Home Page for individual trades.
Click on the Search by Symbol/Tag on the right hand side and click on the symbols of interest.
BEST MARCH 1ST EVER, NO CLARITY FROM SUPER TUESDAY, BLOW OUT ADP AND REDUCE CASH
This is what you need to know today.
In terms of S&P 500 gain, yesterday was the best March 1st ever. In yesterday’s morning capsule, we had shared with you that the first five days of March are seasonally positive. Yesterday S&P 500 gained 2.39%. The next biggest gain ever on March 1st was in 2002 of 2.36%. In 2002, the rest of the month S&P 500 gained 1.38%.
Super Tuesday provides no clarity for the presidential race. On the Democratic side, Sanders wins four states and has no reason to drop out. On the Republican side, Cruz, Rubio and Kasich got enough encouragement to not drop out.
In the U. S., ADP employment change came at 214K vs. 190K consensus. This is a blow out number and falls on the side of no recession in the U. S.
At 2:00 pm ET, Fed’s Beige Book will be released. This may be a market moving event.
API oil inventory build came at 9.9 million barrels vs. 3 million consensus. DOE will release its inventory numbers at 10:30 am ET. Oil started falling after API data but then found support from a statement from Russia that 75% of oil producing nations have agreed to a tentative freeze deal.
Moody’s downgrades China debt to negative.
Australia is beginning to show early signs of economy growing in spite of weakness in exports to China. In the last quarter, Australian GDP rose 0.6% vs. 0.4% consensus.
Gold continues to levitate as the momo crowd aggressively buys refusing to believe the stock market rally.
Interest rates are ticking up and bonds are ticking down.
Dollar is gaining strength.
Our very, very short-term early stock market indicator is neutral.
Gold futures are at $1233, silver futures are at $14.86, and oil futures are $34.03.
S&P 500 resistance levels are 2000, 2017, and 2038; support levels are 1962, 1920, and 1909.
DJIA futures are down 53 points.
What To Do Now?
It is important for investors to look ahead and not in the rear view mirror.
Consider continuing to hold existing positions. Based on individual risk preference, consider holding cash 26 – 42%, and short to medium-term hedges of 25%.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
A Reminder
As our long time subscribers know well, that during the 2008 and early 2009 market crash, when stock market lost about 50%, subscribers to The Arora Report made money by the boat load. For long only investors, this remarkable performance was achieved by using inverse ETFs.
Our models do not expect a repeat of 2008. In the most likely worst case, there may be a garden variety bear market that typically occurred every 18 to 24 months prior to the recent six-year market run.
Individual Trades
Please click on Home on the left side of the Menu. Scroll down on the Home Page for individual trades.
Click on the Search by Symbol/Tag on the right hand side and click on the symbols of interest.
POSITIVE SEASONALS AND SUPER TUESDAY MAY HELP THE STOCK MARKET
This is what you need to know today.
Historically, the first five days of March are positive for the stock market. Today is Super Tuesday and primaries are being held in several states. Markets hate uncertainty. Today may bring some clarity to the Presidential race and this will be positive.
There is more awful economic data from China; factory and services activity dipped to the lowest levels since 2008.
In Europe things are looking a little bit better; the Eurozone Manufacturing PMI came at 51.2 vs. 51.0 consensus.
After first reacting negatively to the budget in India, the Indian stock market has second thoughts. On prospects of a rate cut, Indian market soared over 500 points.
Oil is holding on to its gains.
There is no significant movement in currencies.
Poor Chinese PMI has triggered heavy buying in gold.
Bonds are range bound.
Our very, very short-term early stock market indicator is positive.
Gold futures are at $1241, silver futures are at $14.93, and oil futures are $34.13.
S&P 500 resistance levels are 1962, 2000, and 2017; support levels are 1920, 1909, and 1900.
DJIA futures are up 88 points.
What To Do Now?
It is important for investors to look ahead and not in the rear view mirror.
Consider continuing to hold existing positions. Based on individual risk preference, consider holding cash 28 – 44%, and short to medium-term hedges of 30%.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
A Reminder
As our long time subscribers know well, that during the 2008 and early 2009 market crash, when stock market lost about 50%, subscribers to The Arora Report made money by the boat load. For long only investors, this remarkable performance was achieved by using inverse ETFs.
Our models do not expect a repeat of 2008. In the most likely worst case, there may be a garden variety bear market that typically occurred every 18 to 24 months prior to the recent six-year market run.
Individual Trades
Please click on Home on the left side of the Menu. Scroll down on the Home Page for individual trades.
Click on the Search by Symbol/Tag on the right hand side and click on the symbols of interest.
G20 DISAPPOINTS, DEFLATION UP FRONT AGAIN, SURPRISE CUT FROM PBOC AND INDIA BUDGET
This is what you need to know today.
G20
The markets are very disappointed over G20 statement that includes no actionable steps. However this is in line with our expectations as we shared with you last week.
Deflation
Deflation is up and center again.
CPI in Eurozone fell to -0.2% vs. +0.2% consensus. This number is going to put considerable pressure on ECB to act, paradoxically such action may turn out to be positive for stocks.
China
China is talking from both sides of the mouth. China issued a statement that it is not planning to devalue yuan but then it set yuan to 6.5585 against the dollar, a fresh three week low.
Shanghai markets slipped on concerns of capital outflows on weakening yuan.
Then PBOC came to the rescue as it cut the reserve ratio. Shanghai market partially recovered but still ended the day down over 2%.
India Budget
Revelation of budget in India is often the biggest economic event of the year.
India matters because India has overtaken China as the fastest growing major economy in the world.
The budget was somewhat disappointing. We will publish a detailed analysis in ZYX Emerging and ZYX Allocation as there are positions in India in these two services.
Markets
The big news of the day is in currencies. Euro is weakening considerably on deflation data. Yen is strengthening as safe haven money continues to flow in.
Gold is attempting a rally on safe haven money.
Oil is holding on to its gains.
Bonds are slightly weaker as interest rates tick up.
Our very, very short-term early stock market indicator is neutral but can turn quickly.
Gold futures are at $1229, silver futures are at $14.77, and oil futures are $33.21.
S&P 500 resistance levels are 1962, 2000, and 2017; support levels are 1920, 1909, and 1900.
DJIA futures are up 6 points.
What To Do Now?
It is important for investors to look ahead and not in the rear view mirror.
Consider continuing to hold existing positions. Based on individual risk preference, consider holding cash 28 – 44%, and short to medium-term hedges of 30%.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
A Reminder
As our long time subscribers know well, that during the 2008 and early 2009 market crash, when stock market lost about 50%, subscribers to The Arora Report made money by the boat load. For long only investors, this remarkable performance was achieved by using inverse ETFs.
Our models do not expect a repeat of 2008. In the most likely worst case, there may be a garden variety bear market that typically occurred every 18 to 24 months prior to the recent six-year market run.
Individual Trades
Please click on Home on the left side of the Menu. Scroll down on the Home Page for individual trades.
Click on the Search by Symbol/Tag on the right hand side and click on the symbols of interest.
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