Overnight Nikkei fell 1.4% as the market did not like 8% fall in household spending vs. consensus of -0.2%.In sympathy, stocks are weaker in early trading in the U.S.Expect window dressing related pre-weekend shenanigans; we will take the opposite side of ant extreme move. A major Russell rebalancing may also provide opportunities.Interest rates are weaker.
Oil is staying below $106.
Gold futures are at $1318, silver futures are at $21.09, and oil futures are $ 105.90.
S&P 500 resistance levels are 1950 ,1975 , and 2000 ; support levels are 1925 ,1900 and 1875 .
DJIA futures are down 33 points.
MORNING CAPSULE: PERSONAL SPENDING LESS THAN EXPECTATIONS, A DANGER SIGN IN A CONSUMER ECONOMY
70% of the U.S. economy is based on consumer spending. May consumer spending increase came at 0.2% vs. consensus of 0.4%. This is an early danger sign that is worth watching.On the positive side, personal income rose 0.4% vs. 0.4% consensus.In early trading, gold is pulling back., interest rates are falling, oil and stocks are range bound.Gold futures are at $1316, silver futures are at $21.02, and oil futures are $106.09.
S&P 500 resistance levels are 1950, 1975 and 2000; support levels are 1925, 1900 and 1875 .
DJIA futures are up 2 points.
STINKY GDP NUMBER QUASHES BUDDING RALLY IN STOCKS
‘Stinky’ is the right word to describe this morning’s GDP number for the Q1 . GDP estimate came at -2.9% vs. consensus of -1.8%. This number killed the early budding rally in the stocks after yesterday’s drubbing.I t is important to note that GDP is a lagging indicator; it is like looking in the rear view mirror.Let us look ahead. Our leading indicators show that economy is improving. Consider simply ignoring the GDP number.Gold was losing its gains when the GDP number came and the momo crowd started buying gold.
Interest rates are falling on the GDP number.
Oil is range bound.
Gold futures are at $1317, silver futures are at $20.94, and oil futures are $106.13.
S&P 500 resistance levels are 1950, 1975, and 2000 ; support levels are 1925, 1900 and 1875 .
DJIA futures are down 38 points.
MORNING CAPSULE: 2011 REDUX, SELLING DOLLAR AND STOCKS TO BUY GOLD
In early trading it is 2011 redux. Investors are selling the dollar and stocks to buy gold and silver.
Let us carefully watch to see if this is a one day wonder. It is worth noting that in 2011 there was a sharp and quick stock market correction.Interestingly oil, which is most affected by geo political crisis in Iraq and Ukraine, is pulling back.Gold futures are at $1324, silver futures are at $21.08, and oil futures are $106.30.S&P 500 resistance levels are 1950, 1975, and 2000 ; support levels are 1925, 1900 and 1875 .
DJIA futures are down 24 points.
QUARTER END WINDOW DRESSING AHEAD
Expect to see lots of quarter end window dressing this week. Expect strong stocks to be bought and weak stocks to be sold; astute investors will take advantage of the window dressing and do the opposite, scale in on weakness and scale out on strength. Expect a number of portfolio actions on our part.Gold futures are at $1314, silver futures are at $20.85, and oil futures are $106.54.S&P 500 resistance levels are 1975 and 2000 ; support levels are 1925 , 1900 and 1875 .
DJIA futures are down 6 points.
June 27, 2014
