US Sector ETF Performance – July 14

Posted on July 15, 2017 by macromon

ETF_DETF_WeekETF_MonthETF_YTD

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Global Risk Monitor – July 14

Posted on July 15, 2017 by macromon

Click on table to enlarge and for better resolution

RiskMon_1RiskMon_2RiskMon_3

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A National Treasure Wins The ESPY Icon Award

Posted on July 15, 2017 by macromon

Here is actor, Bryan Cranston, presenting  Vin Scully with the ESPY Icon Award on Wednesday night.    Make sure to listen to Cranston’s  wonderful introduction.  It is nothing less than beautiful poetry.

“Vin Scully’s narative of Sandy Koufax’s perfect game in 1965 is Citizen Kane.  His description in 1981 of rookie sensation Fernando Valenzuela’s storybook season was Casablanca.  And his unforgettable call of Kirk Gibson’s unlikely home run in the 1988 World Series is Gone With The Wind.”  – Bryan Cranston

Vinnie’s son, Mike, who grew up to become a geologist for Arco Oil and sadly was killed in a helicoptor crash in 1994,  was a good friend of mine when I was teenager.  I would go swimming at Vinnie’s house in Pacific Palisades in Los Angeles.

Just listening to Vinnie’s voice was therapeutic.  What a class act.
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COTD: China’s Financial System

Posted on July 13, 2017 by macromon

China Banks_July12

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China’s financial system consists of six major entities: The People’s Bank of China, governments, commercial banks, financial institutions, enterprises, and individuals. The People’s Bank of China is a national bank, invested by the government. Though the People’s Bank of China and the major Chinese commercial banks are all owned by the government, only the People’s Bank of China has the right to issue and repatriate currency in China. – TFASasia

Source: infzm.com Retrieved from: http://www.infzm.com/content/74810

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China Financial System_July12

(COTD = Chart of the Day)

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How Brazil’s Once Mighty “Lula” Has Fallen

Posted on July 12, 2017 by macromon

There doesn’t seem a day that goes by without a political scandal in some emerging market rocking the tape.  Check that.  Add also developed markets.    Brazil, Pakistan, Mozambique, and, yes, even the United States.

But today’s nine and half year prison sentence handed down by a Brazilian court to former, and very popular, President Luiz Inacio Lula da Silva, widely known as “Lula”, was, what Bloomberg called “seismic.”

The Brazilian judge who ordered the imprisonment of former President Luiz Inacio Lula da Silva set off a seismic event in a culture accustomed to impunity for its rich and powerful, and battered the resurgent left.

Judge Sergio Moro on Wednesday gave the man universally known as Lula nine and half years for taking 3.7 million reais ($1.1 million) worth of benefits from a construction company in exchange for favors. The three-year Carwash probe swept scythe-like through Brazil’s ruling class, and came to focus on the former factory worker who once was the nation’s most popular politician — and a strong contender to regain office.

…  Investors welcomed the prospect that Lula may be out of the race. Brazil’s real and benchmark stock exchange accelerated gains after the decision was announced, each closing up about 1.5 percent stronger. Meanwhile, Brazil’s five-year credit default swap spread, a gauge of investor risk perception, dropped to the lowest in nearly two months.  –Bloomberg

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Recall President Obama saying to Lula, “you are the most popular politician on earth,” at the 2009 G20 Summit.   Go to the 42 seconds mark in the video.
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The markets are trying to guess what and when will prick the global asset bubble.   We are starting to think it will be some sort of Black Swan geopolitical event.

Central bank tightening?  Necessary, but not sufficient.  It is going to take a lot more rate hikes to reach a tipping point, where yield seekers return to their caves.  Furthermore it will take a long period of draining the overflowing  reservoir of central bank global base money — a major difference from the 2007 excess credit based “money”, which evaporated overnight with the “Lehman Moment” — before “global liquidity” in markets reach drought conditions.

Polical risk analysis, all the rage.

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Crude Oil Gets C- On Today’s Test

Posted on July 12, 2017 by macromon

We were looking for better price action in crude oil after this morning’s EIA release, which did confirm last night’s  API monster draws in inventories and showed that Cushing inventories at their lowest levels since Nov 2015.   But U.S. production continues to ramp.

Very similar trading action to last week’s inventory data dump and about the only positive is it did close off the lows and held some of last night’s gain on the API data.   What a freaking  widow maker.

Crude_July12

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Guest Post: Random Acts of Kindness

Posted on July 12, 2017 by macromon
Here’s a very moving piece and a nice time out from the random acts of the market.
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 Posted by a beloved college girl very close to us.
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The In Her Honor Project

I was best friends with Takeimi Rao, who passed away six years ago yesterday. January 11, 1997-July 10, 2011. 

I came up with an idea yesterday to do “Random Acts of Kindness in Honor of Takeimi.”   My friends and family have been sharing the small acts that they have been doing, and I would love to get you all involved doing random acts of kindness and participating in “The In Her Honor Project.”

Please share the your random acts of kindness you have created by emailing me at inherhonorproject@gmail.com.  I have been handwriting every random act of kindness in a notebook to give to Takeimi’s mother, Aleae.

Yesterday, in her honor, my little sister, spent the entire day doing random acts!! We started off at Valero/7-11. We dropped off $10 at the cash register (and left notes for each person we did something for) and told the cashier to give the money towards the next person who came in to buy gas.

After, we went to buy ice cream, and we paid for the person behind us in the drive thru, the cashier gave him a note as well!

After that, we went to Cold Stone, I bought my coworkers a cake (we LOVE cake,) and a note for them.

Then, we went and bought four pizzas, paper plates & napkins, and hand delivered them to the homeless who live in tents under a bridge by the mall. It was SO humbling, they were so incredibly grateful, and just wanted to talk to us. They went on and on about how sorry they were for our loss, and had the biggest hearts, I wish we could have done more for them. “I love your heart,” was what one man said to us when we left, it broke my heart to know that he would be sleeping on the cold cement that night.

The day before, I went to Fosters, and when I asked the man where his tip jar was, he told me someone stole it; I still gave him a tip, but the fact that someone stole his tip jar stuck in my mind. So, Grace and I bought him a new one and put a few dollars in it. (He was very rude and didn’t accept it, he told us he didn’t want it and he’s better off without it. Lol) It’s okay though, we kept going!!

Grace [my little sister], who is fourteen, bought with her own money, a dozen roses for a dozen strangers. We put them on the dash boards of cars at Lucky’s along with a note!

We ran into a woman who remembered Tiki’s story, she was so incredibly kind and started to tear up when we told her what we were doing in her memory as her granddaughter is 14 and going in to high school. (Our age when we lost her.)

I then met up with her mother and closest friends for dinner.

It was possibly the most humbling experience of my life; I have never felt so good inside and happy to be the person that I am. My little sister, who is 14 now, Takeimi’s age, when she passed, is an amazing sister. She took the time out of her summer, when she could have been out, hanging out with her friends, to come out and do these random acts of kindness with me.

I am asking the community to come together and do random acts of kindness in honor of “Tiki”, it is something that she would absolutely love, and something that would touch the heart of her mother and family.

You can see the link to my Facebook post here, you are more than welcome to use the photo if you end up covering this story!

Thank you so much,

Lexi Evans

 

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TOTD: Today’s Rare Market Feat

Posted on July 12, 2017 by macromon

This would be the 4th time in 20 years that stocks, bonds and gold all up by > 0.25% on the Fed Chair’s semi-annual testimony.  – Sentimen Trader

Table_July12

(TOTD = Table of the Day)

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Crude Faces Key Test Today

Posted on July 12, 2017 by macromon

After a monster draw on inventories in the API data released last night,  crude oil faces a key test on the EIA inventory release today.   If EIA confirms API and the oil price can’t hold its gains,  trouble in River City, folks.   It likely $42 won’t hold and Goldman may be right that crude trades with a $30 handle.

However,  there are some short-term bullish factors at play:

  • Sentiment is negative, almost to an extreme (see Commitment of Traders chart below).  We even posted a negative piece on the secular forces driving the oil price just a few days ago,  but didn’t rule out a short-term pop, however.
  • There is no geopolitical risk premium built into the oil price and the Middle East is a mess.  The $42 level held in the recent downdraft, making a lower low, and the price might be finally starting to build in some of that political risk
  • WTI futures traded over $46 in overnight trading and is approaching key levels:
  1. The 5-day high at $46.53
  2. The 50-day moving average at $46.90
  3. The key level is the 1-month high at $47.32.  The recent lower high (see price chart).

The market is thus set-up for a nice squeeze.

A break above $46.53 takes us to the 50-day moving average and puts in play the key level of the recent lower high at $47.32.  If that is taken out,  its a new short-term ballgame and could firm up a short-term $45 to $52 trading range.

This analysis will be irrelvant at 10:31 AM after the EIA data is released and the market will do what it is going to do.

Just remember, folks, oil is the new widow maker.   Its been a very difficult call and trade for both the longs and the shorts.

Crude_July12

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CFTC_July 12

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Political Scandal Makes Pakistan EM Odd Man Out

Posted on July 11, 2017 by macromon

The political scandal rocking Pakistan, where a Supreme Court investigation found evidence of possible corruption against Prime Minister Nawaz Sharif,  has taken the Karachi Stock Exchange down 17.69 percent from its May high, returning almost -10 percent for the year.   This compares to the iShares MSCI Emerging Markets ETF (EEM), which is up almost 20 percent year-to-date.

The rupee took a big dive on July 5th, slumping 3.1 percent within hours,  its sharpest drop in a single day since 2008, causing panic in south Asia’s-second-largest economy.  There seems to a disagreement on FX policy between the country’s central bank and finance ministry.   The rupee has reclaimed almost all of its losses, however.

The country is struggling with a growing current account deficit,  more than doubling to $8.9 billion between July 2016 and May 2017 due to weak exports and the real appreciation of the rupee.

Nevertheless, according to the Times of India, the fate of the Sharif government may rest on a Microsoft Word font,

On page-55 of the investigative team’s final report submitted on Monday, it says Maryam’s [the PM’s daughter] documents had on them sentences typed in the “Calibri” font which was not available before January 31, 2007, said The Express Tribune report. The documents themselves, though, were from 2006. – Times of India

Pakistan_July11

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