Last week, the DOW continued to chug higher, led by a 30 pt, earnings induced surge, by DOW component BA, which
added a total of 240pts to that Index and has added a whopping 920 pts to the DOW since Sept 2016 or about 30% of all
the DOW’s gains. Unfortunately, the rest of the averages had no champions and they closed out the choppy earnings week, with a small gain for the S&P, the Russell off slightly and the Transports down hard, even though the Airlines and Railroads, reported pretty good earnings.
Overall, the markets remain in good shape, with slow, but steady growth in the U.S. and Global Economies, Inflation is nowhere to be found , which means that the FED and the World’s Central Bankers, can take their time on raising rates and allow Equity Investors to enjoy their prosperity, for now. However, this “Goldilocks” scenario, could end quickly if there’s a slowdown in growth or an increase in Inflation, which would force the FED to step on the brakes, or if this business with North Korea, which has now launched its 11th ICBM Missile test escalates. Right now the U.S. and Global markets are in the sweet spot, so for now, party on, but always know where the exits are.
Technically, the Indexes are a mixed bag with the DOW going parabolically higher, while the S&P, NASDAQ, Russell and Transports are rolling over. I would love to see an across the board 3-5% correction just to clear the air, but unless there is a serious event (think North Korea, China, Russia, or Washington), that the markets can’t shrug off, Investors may just have to take increasing risk to stay invested and that really is no fun at all.
Overnight, the Global markets were mostly higher and in early trading the DOW is up about 40pts. the Yield on the 10 Yr Treasury is flat at 2.28%, the Dollar is up slightly and Commodities are mixed with Oil testing Major Resistance at $50.0, Gold and Sliver lower, but Copper is on a tear now back over $2.90 for the first time since May 2015.
We have a full week of data this week that includes the July Jobs report on Friday, for today we have the July Chicago PMI Manufacturing report at 9:45am, followed by the June Pending Home Sales numbers at 10:00am. Remember, for the markets prices to remain at these levels, the Economy has to continue to grow, so you have to pay attention to the data.
Today’s Early Markets
DOW Futures— up 40.00 London – up 45.58
S&P – up 300 DAX – up 28.56
GOLD—$1267 Sept Nikkei — down 34.84
OIL— $49.69 Sept HangSeng — up 344.78
DOW RESISTANCE 21,870 S&P RESISTANCE 2482
DOW SUPPORT: 21,720 S&P SUPPORT: 2470
$NASDAQ RESISTANCE 6420
$NASDAQ SUPPORT 6350