(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers. )
BLOWOUT JOBS NUMBER, THE U. S. HEADING TOWARDS FULL EMPLOYMENT
The Department of Labor reported a blowout jobs number. Non-farm Private Payrolls rose 262K vs. 225K consensus. At this rate, the U. S. is heading towards full employment, which for practical purposes we define as unemployment rate of 5% or lower.
Perma-bears on U. S. economy will point to low labor participation rate. The labor participation rate has not been this low since 1988. In our view, those advocating doom and gloom based on labor force participation rate are simply failing to comprehend the realities of the present economy and are stuck in older times.
The employment report is great news for the U. S. and Americans. It is debatable if this is bad news for the U. S. stock market and international stock markets. It is certainly bad news for bonds, gold, silver, and other commodities with the exception of oil. This is certainly good news for the U. S. dollar.
OPEC left its quota unchanged in line with our predictions. The momo crowd aggressively bought oil on the news just to be slammed by the Smart Money.
Our very, very short-term early stock market indicator is negative.
Gold futures are at $1167, silver futures are at $16.00, and oil futures are $58.11.
S&P 500 resistance levels are 2100, 2111, and 2132; support levels are 2063, 2038, and 2017.
DJIA futures are down 58 points.
INTEREST RATES RISE ACROSS THE WORLD, WILD RIDE IN CHINA
Interest rates are rising across the world. In the past, the U. S. stock market has thrown a tantrum when interest rates have risen. Will this time be different or the same?
Overnight Chinese shares went on a wild ride, losing 5.4% and then coming back to close with a gain of 0.8%.
Aggressive selling by Smart Money is taking place in gold, silver, oil and other commodities.
Our very, very short-term early stock market indicator is negative.
Gold futures are at $1180, silver futures are at $16.33, and oil futures are $58.97.
S&P 500 resistance levels are 2132, 2150, and 2200; support levels are 2100, 2063, and 2038.
DJIA futures are down 80 points.
OPEC LIKELY TO LEAVE OIL PRODUCTION QUOTAS UNCHANGED, U. S. ECONOMY DOWNGRADED
OPEC is meeting on June 5th. From our sources, OPEC is likely to leave oil production quotas unchanged. In the last OPEC meeting, Iran and Venezuela pushed hard for oil production cuts. It appears that this time both Iran and Venezuela are falling in line to keep production quotas unchanged.
The Organization for Economic Cooperation and Development (OECD) has downgraded U. S. growth forecast to just 2% this year from its previous forecast of 3.1%.
OECD also downgrades world economy growth to 3.1% this year from its previous forecast of 3.6%.
Over years, we have found that OECD does excellent work and its analysis should be carefully followed.
The momo crowd is aggressively buying gold, silver, and oil. Smart Money is selling silver and lightly selling oil. Only time will tell who wins the battle.
Our very, very short-term early stock market indicator is positive.
Gold futures are at $1188, silver futures are at $16.55, and oil futures are $60.24.
S&P 500 resistance levels are 2132, 2150, and 2200; support levels are 2100, 2063, and 2038.
DJIA futures are up 89 points.
DRAMA IN BERLIN MOVING THE MARKETS
Last night an emergency meeting in Berlin between Merkel, Hollande, Juncker, Lagarde, and Draghi has apparently resulted in a new proposal from creditors of Greece.
Optimism over Greece has made euro surge against the dollar. Weakness in the dollar is causing up moves in oil, gold, silver, and interest rates.
Stocks seem oblivious to everything that is happening around them.
Our very, very short-term early stock market indicator is neutral.
Gold futures are at $1192, silver futures are at $16.73, and oil futures are $60.65.
S&P 500 resistance levels are 2111, 2132, and 2150; support levels are 2063, 2038, and 2017.
DJIA futures are down 35 points.
WEAK MANUFACTURING DATA ACROSS ASIA CAUSES GLOOM ABOUT GLOBAL ECONOMIC GROWTH
Just released PMI numbers across large exporting countries in Asia are weaker than the consensus. Since most of the exports are to Europe and the United States, this is an indication of weak demand in the West. These numbers are generating gloom about economic growth. Expect economists and market strategists at banks and consulting firms to advise their institutional clients with downgraded forecasts. The result may be pressure on stock and commodity prices over the coming weeks. Over the first three days of the month, the new money coming into the market may cushion selling.
Oil is pulling back after a massive short squeeze on Friday.
Silver, gold and interest rates are range bound.
Our very, very short-term early stock market indicator is neutral.
Gold futures are at $1186, silver futures are at $16.67, and oil futures are $59.77
S&P 500 resistance levels are 2132, 2150, and 2200; support levels are 2100, 2063, and 2038.
DJIA futures are up 72 points.
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