Each day I scan and synthesize market-moving news. I look at macro themes, currency moves and global economic indicators that support or challenge my thinking on the Big Picture and help me take the mood of the market. I like to assemble these data points so I can turn them into operational trade ideas for my clients in my Live Trading Room. Some may even make it into my Brokerage-Triggered, Trade Alerts!

You are getting this Free Bait (Daily Market Thoughts) as part of LaDucTrading’s Free Fishing Lessons! Take the next step: Come Fish With Me.


(Meant to hit Publish on this post Monday – apologies – I was working on a big piece: Indices are Hanging Out Not Breaking Out, which is going out next!)

Market Thoughts

Generally, I am expecting markets to trade lower but recent snake-like action has been chopping me and others up as we expected Fall trading volumes and direction to resume. As of Monday it hadn’t! SPY volumes were the lowest on Monday for the year!

Here’s my thinking in one chart from last week and why I shorted Small Caps IWM: Above is Bullish, Below is Not

You can follow my actual trades here:

Brokerage-Triggered Trade Alerts!


On the main geo-political stage coming up:

Trump Goes to UN and Meets with Japanese PM Abe:

President Trump will meet with Japanese Prime Minister Shinzo Abe in the week ahead at the annual United Nations General Assembly amid high expectations that a trade deal will be finalized. Heading into the meeting, Tokyo reportedly wants written assurances from Washington that it will not impose hefty tariffs on its auto exports before a finalized deal on farm goods and digital trade is inked.  Seeking Alpha

Earnings Calendar

NKE and MU are the headliners this week;  BB, RAD + CAG are also of interest to me as ‘oversold value plays’.
Other Stocks Of Interest: Seeking Alpha

AMZN hosts its Hardware Media Event on September 25. A refresh of the Amazon Echo family and some Amazon Fire hardware announcements are anticipated.

Analyst/investor day events: BABA, BBY, DELL, GPK…

FDA and drug updates: A FDA action date arrives for Johnson & Johnson’s (NYSE:JNJ) Darzalex combo for certain multiple myeloma patients. A FDA Advisory Committee meeting is also scheduled on Merck’s (NYSE:MRK) montelukast allergy treatment. At the World Sleep Congress in Vancouver, Jazz Pharmaceutical (NASDAQ:JAZZ) and Avadel (NASDAQ:AVDL) are due to present trial data.

Barrons Mentions:   The impact of the opioid crisis for investors is broken down in the cover story. In a sobering appraisal, liability from opioid lawsuits is estimated to range from the hundreds of millions to double-digit billions for Johnson & Johnson (JNJ), Teva Pharmaceutical Industries (NYSE:TEVA), Endo International (NASDAQ:ENDP), Mallinckrodt (NYSE:MNK), Abbott Laboratories (NYSE:ABT), Amneal Pharmaceuticals (NYSE:AMRX), Mylan (NASDAQ:MYL), McKesson (NYSE:MCK), Cardinal Health (NYSE:CAH), AmerisourceBergen (NYSE:ABC),Walgreens Boots Alliance (NASDAQ:WBA) and CVS Health (NYSE:CVS).

Economic Calendar

Monday –Markit’s flash Global PMIs, Chicago Fed activity index and a speech from New York Fed President Williams (think REPO guy!). Also hear from Fed’s Daly and Bullard plus Draghi.
Tuesday –Flash PMI for Japan and speech from BOJ Governor Kuroda. In the US, we have Case Shiller house prices, the house price index, and Richmond Fed manufacturing. Also, the Conference Board Consumer Confidence Index plus API data afterhours.
Wednesday– BoJ meeting minutes, US mortgage applications, new home sales, EIA Crude Inventories and speech by Fed Evans.
Thursday – Revision to the Q2 GDP report, pending home sales, Jobless claims, and the Kansas City Fed index. Another speech by BoJ governor Kuroda and Draghi not to mention Fed heads: Bullard, Clarida, Daly, and Kashkari.
Friday – China’s industrial profits and US consumer confidence is out along with Durable goods, PCE, personal spending data.

Macro Matters

Negative Interest Rates are just plain negative. This, just in:

And my repeated warnings past few weeks about holding Unicorns – specifically companies as part of IGV + FFTY sectors:

WeWork Business Model Is Systemic Risk To Economy, Fed’s Rosengren

And why I published this chart Friday to show how post-September Quad Witching had some rather ominous history lessons for us:

Image

Remember, I run a LIVE Trading Room and offer Day or Week Passes so set sail any day! 

Looking Ahead: BOJ

I will be interviewed by DailyFX on Wednesday so I wanted to update my Yen call that I made last time I was interview June 6.

I can say I am still spying a Yen Nearing Escape Velocity, so naturally, I’m watching the USDJPY. And with that, these two articles caught my attention last week.

Along that theme, I grabbed these insights from Twitter:

The JPY has huge money offshore which repatriates and that pushes the yen higher. @RaoulPal

There’s been a large surge in FX unhedged outflows from Japan in recent months with estimates suggesting 25-40% foreign bond exposures unhedged. A rise in hedging will push USDJPY significantly lower. 100 beckons! @GauravSaroliya

My Interpretation: Right now we have a strong US Dollar. When this trend reverses, it will be negative for Bond holders. The result will also be bad for JGB as investors unwind their long JGBs & Bunds, forcing UST yields higher. We shall see!

 


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