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DOW + 23 = 18,579
SPX + 4 = 2187
NAS + 11 = 5240
10 Y – .02 = 1.53%
OIL + 1.44 = 48.23
GOLD + 3.70 = 1353.10

The US stock market hit all-time highs this week despite the second quarter of 2016 being another quarter with negative earnings growth. While there are still a few more earnings announcements to be released before the quarter is closed out, it looks as if earnings were down approximately 5% from the same quarter a year ago. This will be the sixth consecutive quarter with declining earnings – not the stuff of which record high stock prices are made.

The stock market continues to sleep walk. The S&P 500 finished up 0.2% today at 2187, making today our 29^th straight day without a 1% move. Energy stocks led the way. The Russell 2000 outperformed by a significant margin, and transports also impressed.

On August 3^rd, oil hit a low of $39.96 per barrel; since then it has gained more than 20% – technically a bull market in oil. Although it should be noted that bull and bear markets in oil are becoming the norm; we’ve seen 20%-plus swings in January, April and June this year. We have seen an oil glut push prices lower, pushing some producers out of business, shutting down rigs in the oil patch; we have heard OPEC jawbone about freezing output.

When we hear about production cuts we also hear that Saudia Arabia has increased output to an all-time high to gain leverage in those OPEC talks. You might be forgiven if you believe the wild swings in oil are a result of supply-demand changes, but the fundamentals haven’t changed enough to justify the dramatic price changes.

It seems like everyone forgot that OPEC disappointed at the June meeting, when many market observers were looking for a production freeze. Traders remain encouraged by the Fed’s dovish twist yesterday, which is pushing down the dollar. But at the heart of the big price moves in oil, is pure speculation – gambling.

Still, the price of oil is approximately half what it was 2 years ago, and that is having some very real repercussions. During the second-quarter earnings season, several companies that aren’t in the energy sector continued to mention declines in their businesses in oil-producing areas.

Harley Davidson saw a jump in the number of people in oil-heavy regions who were defaulting on loan payments. Caesars Entertainment said a lot of weakness was in the southeastern US. And Popeyes demonstrates that it’s not only consumer spending on big-ticket items that has fallen. Seems workers in the oil patch are less likely to buy fried chicken and biscuits. It’s a pretty good excuse anyway.

The Fed is worried about a couple of things. The minutes from the July FOMC meeting had a little bit of everything, suggesting the Fed still wasn’t sure when the next rate hike would occur. While there were numerous positives, the Fed suggested it was particularly worried about banks in Italy and stretched valuations in the US commercial real estate market. That left Fed fund futures implying balanced odds that there’ll be a rate hike by the end of 2016 — a probability that’s not much changed from before the minutes.

Jobless claims last week fell by 4,000 to 262,000, representing a one-month low, marking the 76th straight week that claims have been below 300,000 – that hasn’t happened since 1970, when the economy and the population was much smaller.

Employment figures for Arizona for the month of July showed the state lost 14,800 jobs and the unemployment rate increased two-tenths of a percentage point from 5.8% in June to 6.0% in July; the national rate is at 4.9%. Still, Arizona Nonfarm employment grew by 3.0% (76,100 jobs) over the year in July.

Meanwhile, the Federal Reserve Bank of Philadelphia’s barometer of regional manufacturing activity rebounded slightly into positive territory in August.

Five years after the housing recovery began, 5.9 million borrowers still owe more on their mortgages than their homes are worth. The negative equity rate is falling, now at 12 percent of all mortgaged homeowners, according to Zillow, down from more than 14 percent a year ago and more than 30 percent at the worst of the crisis. The numbers, however, are still well above normal levels and equally spread across urban and suburban communities.

Walmart (WMT) got even bigger during the second quarter, as the company’s revenue and earnings topped Wall Street forecasts, and it reported its biggest same-store sales gain in four years. Walmart raised its full-year outlook in wake of the strong results after reporting earnings of $1.07 a share in the fiscal second quarter, slightly lower than last year’s $1.08 a share. Revenue grew 0.5 percent to $120.85 billion.

Cisco is cutting jobs. The company announced adjusted earnings of $0.63 a share on a 2% jump in revenue to $12.64 billion. Both numbers were ahead of estimates. Additionally, Cisco (CSCO) said it would eliminate 5,500 jobs, or 7% of its workforce, well below the job cuts of 14,000 job that were reported on Tuesday.

Nestlé (NSRGF) had a distinctly average first half. The Switzerland-based maker of Kit-Kat candy and DiGiorno frozen pizza reported first-half revenue of $45 billion, and 3.5% organic growth. Net profit fell to $4.2 billion, missing estimates despite healthy sales in North America.

Lenovo had a stellar first quarter. The world’s biggest PC maker enjoyed a 64% leap in profit from the same time a year ago, boosted by $132 million from the sale of some Beijing real estate. It’s not all sunshine: Lenovo (LNVGF) reported a 30% slowdown in global smartphone sales, and doesn’t expect its mobile division, which includes Motorola handsets, to make a profit before October 2017.

Just six months after it emerged from Chapter 11 bankruptcy, American Apparel (APP) has hired investment bank Houlihan Lokey to explore a sale. At least eight teen apparel retailers filed for bankruptcy this year amid fierce competition and stagnating sales, including Aeropostale (ARO), PacSun and the Wet Seal.

As earnings season winds down, you may have noticed that earnings reports are almost impossible to decipher. The Securities and Exchange Commission also noticed and they are cracking down on made-up numbers and vague language in U.S. companies’ earnings filings, sending the first of what is expected to become a steady flow of letters to finance heads requesting more information for investors.

The new letters also address issues regarding how metrics are defined by individual companies, as well as violations of rules about the kind of metrics allowed. The SEC updated its guidelines after becoming concerned that the proliferation of non-GAAP metrics and difficult-to-follow releases was confusing investors.

Shares of private-prison providers plunged in trading on Thursday following news that the Department of Justice plans to end the use of such facilities. Corrections Corporation of America, the largest publicly traded prison provider, fell 50% before trading was halted. Geo Group, a Florida-based provider of corrections facilities, also tanked by as much as 40% and was halted.

Deputy Attorney General Sally Yates instructed officials in a memo to withdraw or not renew contracts for private-prison operators when they expire. The goal is to scrap their use completely because the Justice Department found them to be less safe than those run by the Federal Bureau of Prisons and the private prisons are not cost effective.

The move won’t dislodge private prisons altogether from the American criminal justice system because they can still contract with states. Also, the Department of Homeland Security runs more than 100 immigration detention centers around the country, many of which are owned and operated by the same companies that run private prisons.

Sixteen banks, including JPMorgan (JPM), Citigroup (C) and Morgan Stanley (MS), are being sued by funds in the U.S. for allegedly manipulating a key Australian interest rate benchmark to generate hundreds of millions of dollars in illicit profits. The class action claims they sought to fix the bank bill swap rate, the local equivalent of Libor, which is used to price floating-rate bonds and syndicated loans.

The Department of Justice and the Environmental Protection Agency announced that motorcycle manufacturer Harley-Davidson (HOG) has agreed to pay a $12 million civil fine after selling illegal after-market devices, called super tuners, that increased vehicles’ emissions. The settlement also requires that Harley-Davidson pay $3 million in a deal with the EPA to help mitigate air pollution caused by the super tuners, buy them back from its dealers, and destroy them.

Starting later this month, Uber will allow customers in downtown Pittsburgh to summon self-driving cars from their phones, crossing an important milestone that no automotive or technology company has yet achieved. Uber’s Pittsburgh fleet, which will be supervised by humans in the driver’s seat for the time being, consists of specially modified Volvo XC90 sport-utility vehicles outfitted with dozens of sensors that use cameras, lasers, radar, and GPS receivers.

Aerospace giant Airbus is designing a flying driver-less taxi that you can summon via an app on your smartphone. Airbus believes the global demand for the “flying cars” will run in to millions of vehicles and that demand will help reduce development costs. Airbus chief executive Tom Enders says, “In a not too distant future, we’ll use our smartphones to book a fully automated flying taxi that will land outside our front door – without any pilot.”

The vertical-takeoff-and-landing (VTOL) air taxi would use electric propulsion and multiple-ducted propellers, and would be piloted initially, before transitioning to fully autonomous operations. The prototype is scheduled to take flight sometime next year. Meanwhile, Airbus said it was also developing a drone-like helicopter which could ferry multiple passengers around a city. CityAirbus is slated to have a pilot on board at first but would switch to full autonomous operations when the technology developed.