Morning Market Report
Futures were pretty flat to 'meh' until the ECB said it would act in September (I actually thought there was about a 20% chance they would do it by 10 basis point now and then hold in september-but they are doing it that way, at least giving off the perception they are.
On the news of the ECB holding our futures went up to +102 however the cash open showed a flat to down bias-see Cap#2. This is the roller-coaster at work. Love to see who shorted into that rise.
ECB is on hold but sets the stage for a September rate cut. The ECB did not cut rates at today's rate cut, but in a move that was widely expected, the ECB did hint that rate cuts are coming,
by adding the "or lower" language, when saying that "Governing Council expects the key ECB interest rates to remain at their present or lower levels at least through the first half of 2020."
Translation: a 10bps rate cut is now assured. I don't think it was expected to hold as the system had already been pining for a rate cut. The euro currency has spiked as a result as well.
late last week for the ECB to "buy" assets was but one example. Either way Euro bonds are doing the swan dive on that news while ours have a butt plug inserted and yields are climbing on it.
AS a result while yields are sliding and the curve flattening, EU banks are bid large. This helps them with the perception that "all is well".
And while Greece has been trading inside the UST 10Y for a few days, Poland has now joined the sub-UST club…for the first time ever.Of note: ALL EU bonds TRADE BELOW US T Note yields
Gold popped after that announcement and it has since given back what it initially gained-See Cap#5. It popped right before the NYMEX open only to be 'met' with a deluge of paper on that open.
This reflects the folly of having a physical market controlled by a paper mechanism. Silver has dropped but not as much ($16.4x at present), pressure still being applied. The gold silver/ratio also movign downward too.
Data Release: U.S. trade patterns in June points to a slight narrowing in the nation’s trade deficit at the end of the second quarter. The advance trade deficit in goods narrowed 1.2% to $74.2 billion, according to the government report.
Both imports and exports sank in June, but imports declined at a faster pace: de-coupling from globalism.
The Commerce Department said orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, jumped 1.9% last month. Orders in June increased across the board, with demand for machinery rising by the most in nearly 1-1/2 years.
This will take time to rectify as it will not be solved overnight or in 1-2 qtrs. Most likely over a period of a few years. It took many years to get it here so. The data is tied to the concept of globalism so it will always reflect this until…it does not.
Raytheon reported earnings and no surprise here, it beat and raised it's full year guidance. Weapons are a good business unfortunately. Not against them overall as we need to protect ourselves, speaks moar to how they have been used in the past.
The defense spending bill is the major factor here: $733-billion defense bill for fiscal year 2020, representing an about 2% higher spending over the previous year.
DOW chemicals lowered it's forecast and said it would cut 2019 spending as chemical companies grappled with the prolonged U.S-China trade dispute and an oversupply of chemicals used to make plastics.
And then there is TSLA-what a shit show this is. Shares plummeted in AH trading last night as it's earnings were released. Wha it showed was a lower cash burn however they stopped spending on projects to achieve that.
Then it's CTO walked out the door to boot. They also had a drop in registrations for it's Model 3 to the tune of 54% in california-you know all these idiot 'save the planet' liberal idiots this pepe has to live around. It's cash open this morning was…..poor-kek and will be exceeding daily average volume soon.
It is already down -13% as this is typed but will probably be bid as the dip(shit) buyers think the can flip it for a quick ride up-perhaps. Overall, it's ded. Another lawsuit by a short-seller is moving forward too.
Nevermind that it should be shut off if it spends a certain amount of time at -10% or greater. This is a sore subject for this pepe. You have a rule yet refuse to enforce it. Can look up that one for yourselves- see trading curbs.