Need to Know: Don’t fight the central bank gang that might hand us Dow 20,000
It was only a matter of time before Facebook Live brought us an act of violence, or at least its aftermath. The live-streaming of Philando Castile’s suffering, just after he was shot by a cop — fatally, it turned out — is understandably shaking people up this morning.
In markets, by contrast, the mood has turned somewhat more chipper, and traders are dreaming again about the stock market topping its May 2015 peak.
“It would just be one monster day higher and there we go,” says financial blogger ChessNwine.
S&P futures have been flattish today after the index yesterday exchanged its morning drop for an afternoon pop.
We’ve just seen a “melt up into what could only be described as ‘the very worst news flow’ possible,” writes The Fly over at iBankCoin.
“Walls of worry are very fun to climb, until giant blades cut you in half,” he adds.
Today’s call is unabashedly bullish despite the ongoing Brexit distress, suggesting market bears at the moment can’t win in a battle against the world’s central banks.
Our chart of the day highlights how when it comes to scoring all-time highs, FANG component Amazon is already there.
Key market gauges
S&P ESU6, -0.11% and Dow futures YMU6, -0.10% have been little changed in the early going, after the S&P SPX, +0.54% yesterday rose to within 1.5% of its record close. Europe SXXP, +1.20% and the U.K.’s FTSE 100 UKX, +1.26% are higher, while Asia finished mixed.
Oil CLQ6, +1.01% and the Brexit-hit pound GBPUSD, +0.4949% are in the green. Gold GCQ6, -0.20% and the ICE U.S. Dollar Index DXY, +0.03% aren’t moving much.
There is a feeling of “how I stopped worrying and learned to love central banks” in the latest take from Zor Capital’s Joe Fahmy.
Fahmy — who three months ago called for the Dow to hit 20,000 this year — reiterates that he thinks that level is “a real possibility.”
Many smart investors have made bearish market calls, but they are too early because the Fed is on the market’s side and not raising rates anytime soon, Fahmy says.
“As they say, ‘don’t fight the Fed,’ so good luck fighting all the globally coordinated Feds,” he writes. That refers to the world’s big central banks all working together.
The market could be showing resilience in anticipation of a more business-friendly president, and watch for a “chase trade” if the S&P breaks out to a record high, Fahmy says.
“This is when under-invested and bearish fund managers are forced to put money to work so they don’t risk losing their jobs,” he writes.
Go here to read his full blog post.
4 — That’s how many runners ended up in the hospital today after the first bull run in Pamplona, Spain, according to a Telegraph report. But there was “no major goring” in the early going at this year’s daredevil San Fermin festival.
Amazon.com AMZN, +1.31% has been closing at record highs this week, and many chart watchers are talking about the e-commerce giant’s upbeat action that’s shown above.
“If you’ve been buying this thing …. you’re doing well, and hopefully we get some follow through there,” says T3Live’s Scott Redler.
“You need some stocks making highs,” Redler also says.
Amazon just said Brexit hasn’t hit its U.K. sales, and its second “Prime Day” is scheduled for Tuesday.
Pepsi PEP, -0.47% and Samsung 005930, +2.04% have posted better-than-expected earnigns, while WhiteWave Foods WWAV, +0.94% is jumping premarket after news that French dairy giant Danone will buy the company.
In big-investing-names news, Jeff Gundlach has been praising gold GLD, +0.59% and warning about European banks EUFN, -1.08% , while Jim Chanos has been comparing Tesla TSLA, +0.21% to troubled Valeant VRX, +15.59% .
On the Brexit front, seven U.K. property funds have now been frozen.
In the presidential race, Trump’s fundraising has improved, Clinton got a pass from the attorney general and the two candidates have been fighting over “Frozen” and star shapes:
Do you want to build a strawman? https://t.co/AoeNTJOGpo
— Hillary Clinton (@HillaryClinton) July 7, 2016
“Please don’t tell me my boyfriend’s gone. … He don’t deserve this, please. He works for St. Paul Public Schools. He’s never been in jail, anything.”—Philando Castile’s girlfriend can be heard in a graphic video that went viral following another officer-involved shooting, this one in Minnesota.
Ahead of tomorrow’s monthly jobs report, ADP’s release showed that private-sector employment picked up a bit in June — suggesting the weak May nonfarm-payroll report may be an anomaly.
Initial jobless claims fell by 16,000 last week to a nearly three-month low of 254,000, showing no evidence of rising layoffs. Also before the U.S. market’s open today, European Central Bank minutes said risks to eurozone growth remain tilted to the downside.
A report on U.S. oil supplies will come later in the day.
The NBA shifts continue with Dwayne Wade headed to Chicago.
A Connery-Cage movie may have inspired some Iraqi weapons claims.
Germany’s soccer team is making use of big data again, helped by SAP.
Russia’s military expansion plans along its European frontier dwarf NATO’s.
Man uses drone to grill steak, is overwhelmed with emotionhttps://t.co/0hBZwMwFM4 pic.twitter.com/l459DyE690
— Mashable (@mashable) July 6, 2016
Two viral videos show dramatic rescues in flood-hit central China.
It’s the anniversary of the attack on the London Underground:
11 years ago today. 7/7. We will remember them. #LondonBombings #LestWeForget pic.twitter.com/8CcUoqP8AB
— Casey Christie (@Casey_Christie) July 7, 2016
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