Morning Roundup

By Mark Masterson on March 3, 2015

Good morning,

Below are the news items moving markets today…..

 

Executive Summary:

Quiet start to the day with US markets in a rare red color (slightly lower), Europe lower, and Asian markets lower across the board as well.  Not much expected today in terms of important economic data, Fed speakers, or notable events.  Having said that, a few points to mention….

Yesterday’s rally was sparked by the rumor that a third bailout for Greece is in the works.  Of course we have no idea if this is the case, and after the contentious negotiations over the last few weeks, you would think Europe would at least see if Greece intends to follow through on any of the promises it made to secure the lending for four months.  Yet, Europe is hard pressed to let Greece default or leave the Eurozone due to its large 300 billion Euro debt load sitting at the IMF, ECB, and European banks.  Anything is possible.  Plot thickens over third bailout for Greece  /  http://www.cnbc.com/id/102471533?trknav=homestack:topnews:6

Another side note – the US is sending troops to the Ukraine.  “The United States will deploy personnel by the end of this week to train the Ukrainian national guard, US 173rd Airborne Brigade Commander Colonel Michael Foster said at the Center for Strategic and International Studies in Washington, DC on Monday.  “Before this week is up, we’ll be deploying a battalion minus… to the Ukraine to train Ukrainian forces for the fight that’s taking place,” Foster stated. “What we’ve got laid out is six United States companies that will be training six Ukrainian companies throughout the summer.”  The current plan is for US forces to stay six months, he said, and noted there have been discussions about how to increase the duration and the scope of the training mission.  The current channels for military training set up between Ukraine and the United States would not be used for transferring defensive lethal aid if the United States decided to provide arms to Ukraine, Foster told Sputnik on Monday.”  This might need to be watch in the coming weeks as it certainly will be viewed as provocative by Russia, especially on the heels of England also sending troops to the region.

Finally, the Nasdaq hit 5000 again for the first time since 1999.  Of course, back then we were in a raging bubble. Today – views are mixed on the bubble.  In many ways we are in a bubble.  Stocks are at all-time highs, bonds are at/near all time highs, central bank balance sheets are at all-time highs, debt loads/credit is at all-time highs, etc.  Yet, investor sentiment – while high – does not seem to be at the bubble levels we saw during the tech bubble.  What makes it all the more intriguing is the daily rising equity market is happening at the same time as a slowing economy and consistently weaker than expected data…..See below articles all from today…

• US Consumer Spending Falls, Inflation Pressures Are Muted
• US Manufacturing Hits 13-Mo Low
• US Q4 GDP Cut to 2.2% from 2.6%
• US Inflation Trend Turns Negative For First Time Since 2009

 

We discuss the Nasdaq further in the charts below….

 

 

Articles of Interest:

• Bloomberg:      Company Cash Bathes Stocks as Monthly Buybacks Set Record (BBG)
• Israel’s      Netanyahu to address Congress in speech that has strained ties with Obama      (Reuters)
• Risks      Diplomatic, Political Pain If Speech Falls Flat (BBG)
• Before Key      Speech, Netanyahu Hails U.S. Ties (WSJ)
• Obama says      Iran must halt key nuclear work for at least a decade (Reuters)
• Yellen      Turning from Friend to Foe for Dollar Bulls (BBG)
• Europe Is      the Market To Watch Right Now – David Rosenberg, National      Post
• The      Stock-Market Herd Can Be Blind – Peter Schiff, Euro Pacific      Capital
• Has Bill      Gross Officially Gone To the Dogs? – Tom Huddleston,      Fortune
• Plan to Exit Stocks      Within the Next 8 Years?
  Exit Now

 

 

Charts of the day:

 

Wow. The Nasdaq surged back to the 5000 level yesterday, hitting the milestone last seen in the late stages of the tech bubble in 1999.  The chart below shows the current position.  Frankly, it needs to break higher, as it is now back at the resistance of the previous high, and is hitting the top side of a rising wedge pattern that you can see below.

 

This Time NASDAQ 5,000 Actually Is Different – Dave Callaway, USA Today

 

A closer look at the same chart from above…..

Lance Roberts highlights some of the bullishness in the below article and charts….Stock Market Exuberance In Pictures – Lance Roberts, StreetTalk Live

 

S&P 500 now overbought again after a very strong February….

 

“It is also worth noting that the S&P 500 is currently 19.3% above its 3-year monthly moving average which is the second largest deviation in price since the turn of the century.”

 

Finally, Jesse Felder posted the below chart on Twitter….It shows a composite of market indicators that – when combined – are all at extremes today in sendiment……  very, very optimistic.

 

 

Quote of the day:

Behind every great man is a woman rolling her eyes.

Jim Carrey