Wednesday, May 24, 2017
Yesterday the markets shrugged off the terror attack in the U.K. and rolled higher for the 4th day in a row,
which has got to be the longest winning streak in 2017. The markets rebound has the Indexes within spitting
distance of last Mondays highs at DOW 21,000, S&P 2404 and NASDAQ 6160 and if nothing was going on,
the DOW, S&P and NASDAQ all could be setting new highs by the end of this week.
Unfortunately, there is always something going on and aside from the Brits, raising their Terror Threat Level
to “Critical”, over in Asia, Moody’s has decided to cut China’s Debt Rating, because their Economy is slowing
and their Debt stands at 250% of the GDP, higher than the U.S. and that isn’t even the bad part! The bad part
is that the recent surge in Debt, isn’t coming from Government Spending, it is coming from Corporate and
Household Debt, which is way worse, because the PBOC, can always print more money to pay their Debt,
but Corporations and Mr & Mrs Wang,Li, Liu, Lin or Zhang, cannot print money and will go Bankrupt. Right now,
the Chinese are pooh, poohing the situation, but it is something to be concerned with. In addition to China’s
woes, the EU has been enjoying some solid economic growth, which is great, except that the ECB, is starting
to think about tapering their Stimulus Program and if you recall what happen when Ben Bernanke tried that
in June 2013, it wasn’t pretty.
I know that the U.S. and the Global Economies are good for now and everyone is focused on the wonderful
Budget fantasies coming out of Washington, but the realities of the World, are still out there and you always
have to be concerned about what’s next. Speaking of what’s next, what’s next is the FOMC Minutes from the
Fed’s May 3rd Meeting at 2:00 today and we will get a good idea if the Fed will raise rates at the June 13-14 meeting.
Overnight the Global markets were mixed and in early trading the DOW is flat along with Bonds, the Dollar
and Commodities as everyone is waiting to hear from the Fed this afternoon. This means that we are in for
a very long quiet day, but with the OPEC meeting tomorrow and a Credit Suisse upgrade in the Steels we might see a rebound in these battered sectors.
Today’s Early Markets
DOW Futures— up 10.00 London – up 8.58
S&P – up 100
DAX – down 20.56
GOLD—$1250 July Nikkei — up 129.84
OIL— $50.70 July HangSeng — up 25.78
DOW RESISTANCE 21,000 S&P RESISTANCE 2405/2112
DOW SUPPORT: 20,800 S&P SUPPORT: 2388/2380
$NASDAQ RESISTANCE 6160
$NASDAQ SUPPORT 6100