July 6th Update – S&P & Dow futures break 3k and 27k; Markets holding despite strong jobs report; All eyes on Powell next week; new ECB crew to carry on stimulus

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S&P futures briefly traded above 3,000 before Friday’s report. Higher prices later this year. The Fed and TPTB need them rising.

-As predicted, the S&P futures broke 3,000. Despite Friday’s strong domestic employment report, they remain very close to that number.

Dow futures hit 27,000. A bullish base is ready to lift prices higher. Lower global rates will be nearly impossible for bears to overcome.

-The Dow futures briefly traded above 27,000. More to come. Now that the S&P futures hit 3,000, I see Dow 28,500 as likely by the end of the year.

Global 10-year yields remain stable despite strong U.S. job report

 

Bonds across the globe traded lower as yields rose. This shows how big of an influence the Fed’s actions have on the rest of the world. Despite the strong employment report, yields did not rise as much as I feared.
Jerome Powell speaks three times next week. Traders will take note of his House and Senate testimony on Wednesday and Thursday.
-The FOMC minutes come out on Wednesday afternoon, but I do not see them as a huge market mover. All will be paying attention to what Powell says about the employment report and his current path.
-Despite the strong employment numbers on Friday, the market traded off their lows. If the Fed doesn’t make a big deal about them, the markets will shrug them off and higher highs will come soon.
Gold didn’t react as poorly as usual to a strong employment report. Rather than trading down all day, it rebounded $10 off its lows. This sets it up to trade higher tomorrow evening.
-Futures COT reports are delayed due to July 4th holiday.
Bitcoin putting in a daily bullish pennant flag. I am still long here.
-Christine Lagarde has only one option available; carry on the same program of lower rates and bond buying. We said three years ago that the central banks can never stop stimulus. Although higher asset values lessen the immediate need to lower rates, eventually they have to step back in. The ECB can never stop, regardless of whatever Lagarde says.
-I feel bad for those who are trapped in their economic-collapse confirmation bias. Trying to fight this secular trend in interest rates will be nearly impossible. TPTB want higher asset values and will get them.