Futures vs FV: SP +17.12; DJ _156.88; NADSAQ +35.28
Futures have surged again after just a one-day pause that was just a sort of pause.
Japan helicopter money has markets excited. Bernanke proposed to Japan 'perpetual' bonds. Basically helio money is where the government prints bonds and the central bank buys them, thus directly underwriting government spending. There is a hitch: lawmakers are saying that Japanese law prohibits such direct financing/funding of government spending by . . . the government. Doesn't seem to matter; world stocks are surging again.
BOE: Put something of a governor on the upside as it did not cut rates the 25BP expected. Instead it promised stimulus in August. Okay, post Brexit vote it said there would be stimulus in the summer and August is still the summer though deferred.
CPI, June: 0.5% vs 0.3% vs 0.4% prior. Year/year 1.3%. Biggest mo/mo since 2012.
Core: 0.4% vs 0.1% exp vs 0.3% prior. Year/year 0.9%
Prices are going up, up even with China supposedly exporting deflation around the world.
Jobless claims (if anyone cares): 254K vs 265K exp vs 254K prior
Earnings: JPM beats estimates on stronger lending (wow) and fixed income trading.
Bonds: Japan bought the most foreign bonds ever in June, helping drive yields lower.
OTHER MARKETS
Bonds: 1.531% vs 1.51% 10 year. Still struggling after that gap lower Tuesday that looked to be an island reversal downside.
EUR/USD: 1.1144 VERSUS 1.1089. Euro stronger as BOE does not cut.
USD/JPY: 105.70 vs 104.03. Dollar continues higher versus the yen as Helicopter Money in Japan is set to proceed.
Oil: 45.64, +0.89
Gold: 1322.60, -21.00
Okay stocks are set for new record highs again on SP500, DJ30. Perhaps SP400 joins in on the move. We took some gain Wednesday anticipating a near term pause, but with the central banks fully committed, all things are possible, at least near term, including markets that can rally without really needing to take a break.
A gap open after an already solid run is a hard thing to chase, but there are stocks out there that are not extended and we will look at how the early move holds and see if we want to move into any. Further, with more upside, more current positions will be pushing toward targets and we will continue looking at taking gain when it presents. The market is still running, still getting extended, so if the gain is there we want to take some.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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