The markets continue to roll higher on the “Perfect Storm” of Moderate Growth, No Inflation and an Accommodating Federal Reserve, so for the time being, the only place to secure some kind of return on CASH, is the Equity markets and that’s why the averages keep marching higher, no matter what nonsense, come out of our Elected Idiots in Washington. For awhile, the Talking Heads of the Media, tried to convince Investors, that if Congress couldn’t do this or do that, the Presidents pro-growth agenda, would fall by the wayside and the markets, which ran up on anticipation of all the goodies, that would come out of Washington, would collapse, when it didn’t happen.
Well as everyone now knows, it didn’t happen, but fortunately for Investors, the basic reality of why markets go up or down, is simply that, if the U.S. and Global Economies experience Moderate Growth, No Inflation and Easy Money from the Central Bankers, companies will EARN, MO MONEY, MO MONEY and even MO MO MONEY, which will justify higher Equity Prices and that’s why all the Indexes are at record highs and Investors are as happy as “pigs in $#!+”.
Technically, the averages are due for a correction, but recently we are seeing Individual stocks come under profit taking, plus some issues are winning and losing big, on their earnings statements, which in effect is taking some steam and risk out of the market rally. Anytime the markets can continue to roll higher and at the same time, lose some risk, its a good thing, because it gives Investors an opportunity to buy a good company at a better price.
Overnight, the Global markets were mixed and in early trading today, the DOW is up 30pts, the Yield on the 10 Yr has dropped down to 2.28%, the Dollar is lower and Commodities are higher with Oil looking to break through $49.00. Today we have the Weekly Jobless Claims and June Durable Goods reports at 8:30. The May Durable Goods report was terrible, so the Street is expecting a rebound in June, so pay attention.
Today’s Early Markets
DOW Futures— up 30.00 London – up 5.58
S&P – up 500 DAX – down 58.56
GOLD—$1261 August Nikkei — up 29.84
OIL— $48.90 Sept HangSeng — up 190.78
DOW RESISTANCE 21,730/21,800 S&P RESISTANCE 2484
DOW SUPPORT: 21,600 S&P SUPPORT: 2470
$NASDAQ RESISTANCE 6444
$NASDAQ SUPPORT 6380