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09Mar2015 Market Close: Apple Soars Higher, SP500 Closes In The Green And Greek Talks Become Technical

Written by Gary

New high end Apple watch to cost $10K as Q1 GDP is tracking 1.2%. The SP500 made a dead cat bounce today from Fridays down session, but today's close in the green is thanks to Apple.

Todays S&P 500 Chart

The U.S. Dollar remains in the high 97's, WTI oil is still trading sideways at 50 and needs to fall below 48 to penetrate support. So far there is little evidence that the oils are going to start testing their supports soon. When they do, the averages are sure to follow.

Our medium term indicators are leaning towards Hold portfolio of non-performers and the session market direction meter (for day traders) is 3 % bullish.

The Market in Perspective

Here are the headlines I think are moving the markets.

Apple Watch in stores on April 24, high-end version costs $10,000

SAN FRANCISCO (Reuters) - Apple Inc will begin selling its new watch in stores on April 24, with the high-end model starting at $10,000, the company said, rolling out its first new product in five years in a bid to extend its preeminence in mobile devices.

Wall St. rebounds on deal activity; Apple up after watch news

NEW YORK (Reuters) - U.S. stocks bounced back on Monday, helped by merger and acquisitions activity, while Apple shares ended slightly higher following the long-anticipated rollout of its watch.

Real-Time Q1 GDP Update : 1.2%

Last week, first Goldman and then JPMorgan cut their GDP forecasts, in the case of the latter by 0.5% to 2.0% from 2.5%. The JPM report cited the Atlanta Fed GDPNow model we first exposed earlier last week. And unfortunately for the Wall Street consensus, which is still hoping for some dramatic surge in US "growth" in the 3 remaining weeks of the first quarter, things are looking bad, because according to the most recent update to the Atlanta Fed model which mimics the methodology used by the BEA to estimate real GDP growth and which will be revealed in less than 2 months when the preliminary Q1 GDP number is revealed, the economy in the first quarter is tracking at just 1.2%, smashing any recent momentum, and the lowest since the Polar Vortex. "Here we go again" indeed.

Here is the latest from thbe Atlanta Fed, whose revised GDP forecast has not budged from a week ago.

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2015 was 1.2 percent on March 6, unchanged from its March 2 reading. The nowcast for the contribution of net exports to first-quarter real GDP growth fell from -0.5 percentage point to -0.8 percentage point following this morning's international trade report from the U.S. Census Bureau. This was offset by increases in the nowcasts of equipment investment and inventory investment.

...

Bonds Bid All Day But Stocks Shrug Off Apple's "Turlington Turmoil"

Overheard on CNBC many times today as Apple unleashed the Apple Watch and a gold Macbook...

Ugly Chinese data and worse German data were trumped by USDJPY-ignited momo to dead cat bounce stocks today with Apple dominating the headlines...

Futures show the overnight moves (and intraday swings) - note NASDAQ plunge stalled perfectly at unch and was rescued higher...

On the day The (soon to include AAPL) Dow outperformed...

Since the jobs data...

But some context for today's move... S&P around a Fib 38.2% dead cat bounce...

Of course today was all about AAPL... and the "Turlington Turmoil"

Quiet Start to Central Bank Bond-Buying Program for the Eurozone

The purchases, known as quantitative easing, are meant to stimulate the economy and help reignite the region's dangerously low inflation rate.

51 Guns, A Chihuahua, And Investing Inertia

Via ConvergEx's Nick Colas,

The current set of dominant market narratives are so well known as to be cliché. Invest where central banks are pumping liquidity, and short the currency of those countries or regions. Look for growth, and pay any valuation multiple that seems half way reasonable in today's market. Expect any spike in volatility to wilt like cut flowers in the hot sun, and the Fed to care intensely about stock prices. And maybe that will continue to work in this last month of the first quarter... But it always pays to question the foundations of market assumptions, and today we do just that.

"51 Loaded Firearms and a Chihuahua" isn't an invitation to a wild party; it is the headline for the U.S. Transportation Security Administration's blog post this week. In the seven days ending March 6th, 2015 the TSA found all those guns and the one dog in various flyers' carry on and checked luggage. The dog was evidently taking a nap when its owner zipped up her bag. Security at LaGuardia found the dog and reunited pooch and owner.

Now, let's talk about the guns. Since the beginning of 2015, the TSA has found 365 loaded firearms in the carry-on luggage of U.S. travellers - an average of 6/day. Some other odds and ends from this week's TSA haul: 4 other guns (unloaded), 13 stun guns, and 2 large hooked machetes measuring 10 inches apiece. Yes, all in baggage that the owner fully expected to pass through security.

A few other fun facts about what the TSA has discovered passing through their x-ray machines:


In 2014, the TSA found a total of 2,212 guns in carry-on luggage across 224 domestic airports. The vast majority (83%) were loaded, many with a round in the firing ch ...

What We Read Today 09 March 2015

Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary "reading list" which will include very brief summaries (and sometimes longer ones) of why each item has gotten our attention. Suggestions from readers for "reading list" items are gratefully reviewed, although sometimes space limits the number included.

This feature is published every day late afternoon New York time. For early morning review of headlines see "The Early Bird" published every day in the early am at GEI News (membership not required for access to "The Early Bird".).

BECOME A GEI MEMBER - IT's FREE!

Every day most of this column ("What We Read Today") is available only to GEI members.

To become a GEI Member simply subscribe to our FREE daily newsletter

Boeing to improve current 777 jet, weighs up middle of market

PHOENIX (Reuters) - Boeing announced measures to help secure a smooth transition to a new model of 777 jetliner on Monday, saying it would improve the fuel efficiency of the existing version by two percent from the third quarter of 2016.

Greece's Debt Talks Will Move to More Technical Level

On Wednesday, Greece will begin talks in Brussels directly with representatives of the three creditor groups, the European Commission, the European Central Bank and the International Monetary Fund.

Repeat Foreclosures Triple Since Crisis

As delinquencies rise to worrisome levels in the now $1 trillion market for auto loans and as the two biggest players in the consumer loan space prepare to merge into a multi-billion dollar ABS machine, January data on foreclosures suggests there may be trouble in the real estate world as well.

According to Black Knight Financial, both new and repeat foreclosures hit a 12-month high during the first month of the year with repeats (i.e. the borrower was rescued but has since entered the foreclosure process again) jumping 11% M/M. More troubling is the trend in repeat foreclosures which accounted for only 15% of total foreclosures during the crisis but now make up a startling 51%.

Trouble in HAMP-land anyone?

GM's Barra bets she can deliver where predecessors fell short

DETROIT (Reuters) - General Motors Co Chief Executive Officer Mary Barra's deal on Monday to return up to $10 billion to investors is a career-defining bet that she can reverse the automaker's history of doubling down on money-losing products and failed expansion strategies.

I'm the right person to fix HSBC, says CEO Gulliver

LONDON (Reuters) - HSBC Chief Executive Stuart Gulliver said he was the right person to run Europe's biggest bank and fix problems of the past after British lawmakers berated it for allowing "industrial-scale tax avoidance" at its Swiss arm.

Why Greek Shipping Billionaires Are Sweating

When one thinks of Greece, images of social and economic devolution, depression-era GDP, tear-gas heavy protests, an insolvent, flip-flopping government that has no choice but to be a pawn of the Eurozone, rising ultra-nationalist sentiment buoyed by over 50% youth unemployment, 25% total unemployment and where over 36% of the population is at risk of poverty or exclusion from social benefits, is what typically come to mind.

It may therefore come as a surprise that across from the stark Greek economic calamity is an industry that has swam, so to say, while everything else has sunk, because while virtually every other aspect of the Greek economy is in shambles, its shipping industry is not only the pride of the nation, but has created more Greek billionaires than any other aspect of the economy.

As Bloomberg recounts, Greeks have long dominated the shipping business. The nation's fleet, numbering 3,669 vessels in 2013, is the largest in the world, according to the annual report of the Union of Greek Shipowners, making up more than 7 percent of the Greek economy and providing 192,000 jobs in 2013.

Greece's shipping magnates control 23 percent of the world bulk carrier fleet, according to the report, even as their home country accounts for less than 0.4 percent of the world economy.

And, perhaps most relevant, Greek shipping has also made billionaires of the country's four largest ship owners by tonnage: John Angelicoussis, George Prokopiou, Peter Livanos and George Economou< ...

Q&A: Fighting Back Against Malware

A flurry of pop-up ads, an unfamiliar search toolbar and a changed home page are just some of the symptoms of malicious software.

Bill Gross's fund at Janus saw first monthly outflow in February

NEW YORK (Reuters) - Investors pulled $18.5 million from Bill Gross's Janus Global Unconstrained Bond Fund in February, the first such cash withdrawal since the closely watched investor took on the portfolio in October, Morningstar said on Monday.

Airbus sales chief says well placed for further output hikes

PHOENIX (Reuters) - Airbus, which recently announced an output increase for its A320 jet family, has amassed enough excess orders through overboooking to justify further production increases at some point in the future, its sales chief said on Monday.

Price Range for Apple Watch: $349 to Over $10,000

Apple designed its device, which will be available for preorder on April 10, to suit the tastes of various consumers, from fitness buffs to collectors of luxury watches.

How Christy Turlington Cost Apple $17 Billion: The Annotated Apple Watch Event

Well that escalated quickly.

AAPL stock surged exuberantly on news of a gold Macbook - ran Friday's high stops... then started to tumble on the Apple Watch release, but things got really bad once the Christy Turlington cheesey infomercial kicked in:

The commentary in The Verge was harsh:


And Christy Turlington Burns is here!
"She is incredibly impressive. She is Christy Turlington Burns."
I can't even with this video. It's about maternal health in Africa, with Apple Watch product placement.
Christy Turlington Burns sadly does not ride a giraffe onto the stage.
This is so embarassing I want to die.
"This is my fashion favorite I have to say." "Yes, oh yes."
Christy wants to beat her marathon record, and the Apple Watch is going to help her get there. Because it injects dopamine directly into your bloodstream.

Christy is going to do a blog on Apple.com about running omg.

And the punchline:

Apple has reached the "forced fake Q&A with celebrities" portion of its keynote lifecycle.

End result not good, now that even the fanboys appear to be turning off:

ISIS Unveils Video To Recruit Deaf & Mute Jihadists

While some may ISIS is 'deaf' to the new world as it spreads its message of Shariah Law across The Middle East, the terrorist organization appears to be trying to broaden the appeal of the militant group. As Newsweek reports, ISIS has released a video in which a pair of disabled sibling militants use sign language in an apparent bid to recruit fighters from the (apparently under-served) deaf and mute community. The video shows the brothers directing traffic in a busy road saying: "We will strike you soon, by Allah's permission," and ends with a scene of the brothers setting up rockets.

Deaf? Mute? ISIS Wants You!!

As Newsweek reports,

The video which is titled, From Who Excused To Those Not Excused, addresses Muslims in Europe. It features two fighters, one who claims to be deaf-mute and names the other as his brother Abu Abdur-Rahman, who say they are traffic officers in the Islamic State.

...

The video lasts for almost six minutes and includes Arabic and English subtitles and the pair are dressed in black jumpsuits and are armed with assault rifles, ammunition pouches and handcuffs.

...

The video has been seen as an attempt to broaden the appeal of the militant group by reaching out to those with similar impairments. Alex Kassirer, researcher at global security firm Flashpoint Intelligence, told NBC that the video "represents an attempt by the group to recruit other phys ...

The New Normal Of "Anything Goes" And "Nothing Matters" Is Turning Lethal

Submitted by James H. Kunstler via Kunstler.com,

Nothing is stable, nothing is straightforward, everything is fixed, and nothing is fixed. O nation of busboys and WalMart greeters, awake and sing!

Can an empire founder on sheer credulousness? After last Friday's jobs report, I think so. For a culture that luxuriates in statistical analysis (and the false idea that if you measure enough things, you can control them), it is rather amazing that we absolutely don't care whether the measurements are truthful or not. Hence, an economist (sic) such as Paul Krugman of The New York Times might ask himself how it is that Zero Interest Rate Policy only trickles down to places where hamburgers are sold. PK was at it again in his Monday column, yammering about "rapid job growth," "partying like it was 1995." Wise men like him are pounding this country down a rat hole faster than you can say Romulus Augustulus.

Apparently the US Bureau of Labor Statistics missed the job bloodbath in the oil industry, especially over in Frackville where the latest western phenomenon is the ghost man-camp (along with ghost pole dancing parlors). It's a veritable hemorrhagic fever of job layoff announcements: 9,000 here, 7,000, there, thousands of thousands everywhere â€" Halliburton, Schlumberger, Baker Hughes â€" like an Ebola ward in the oil services sector. Not to mention the cliff-drop of capital expenditure, meaning even steeper job losses ahead, Casey Jones. But nobody notices, I guess because they're out at Ruby Tuesdays eating things bigger than their heads. Are the portions getting smaller, or are their heads shrinking?

Finance is complicated, but not as complex as the wizards employed in it would have you believe. They would have you think it is an order of magnitude more ...

EU urges Greece to 'stop wasting time' on reform

BRUSSELS (Reuters) - The head of euro zone finance ministers urged Greece on Monday to "stop wasting time" and buckle down to serious talks on implementing a reform programme to secure urgently needed fresh funds from its international creditors.

Apple Unveils World-Changing Wrist-Band - Live Feed

Judging by the euphoric exaggeration and fanboyism on mainstream media this morning, today's Apple Watch (not iWatch, definitely not iWatch) unveiling promises to be "world-changing" for the 'wearables' industry (as well as numerous "first time ever..." comments). Of course, there are 'watches' on the market already, but as Reuters Jason Fields 'jokes', the Apple Watch, of course, does more. The face is high resolution and in color. It even has apps that allow you to do a few of the things you'd be able to do if only you could muster the strength to dig your hand into the front pocket of your jeans, or do a little digging in your handbag.

Netflix crushed...

*HBO SAYS APPLE WILL BE EXCLUSIVE LAUNCH PARTNER FOR STAND ALONE

Apple TV sales are doing so well, they are cutting prices?


*APPLE HAS SOLD 25 MLN APPLE TV UNITS TO DATE
*APPLE LOWERING APPLE TV ENTRY PRICE TO $69, FROM $99

Everything else...


*APPLE SAYS 700M IPHONES SOLD SO FAR: THE VERGE
*COOK: APPLE PAY OFF TO `MOST AMAZING' START
*COOK SAYS APPLE PAY SUPPORTED BY MORE THAN 2,500 BANKS
*COOK SAYS APPLE TRIPLED NUMBER OF PLACES ACCEPTING APPLE PAY
*APPLE SAYS EVERY MAJOR CAR BRAND HAS COMMITTED TO CARPLAY
*APPLE: MORE THAN 40 MODELS WITH CARPLAY SHIPPING BY YEAR END
*APPLE SAYS MORE THAN 900 APPS TRACKING HEALTH, FITNESS
*APPLE SAYS 'RESEARCH KIT' TURNS IPHONES INTO DIAGNOSTIC TOOL
*APPLE SAYS WORKED WITH MEDICAL INSTITUTIONS
*APPLE SAYS USERS DECIDE HOW MEDICAL DATA SHARED
*APPLE SAYS IT WON'T SEE MEDICAL DATA

The Bubble Is Complete: 'Smart Money' Buys Into Bespoke Tranche "Opportunity" (Again)

Last month we noted that Goldman's "hawking" (to use Bloomberg's rather derisive terminology) of an "opportunity" in synthetic CDOs symbolizes the culmination of central bankers' and Wall Street's collective effort to return the financial world to the pre-crisis glory days of Dr. Frankenstein-like financial engineering. To truly understand how we've come full circle since the collapse, we need to look at exactly what it is Goldman is pushing (and what Citi is still, as of last Friday, pitching as a good opportunity for 2015).

Goldman is marketing what the bank calls a "bespoke tranche opportunity", which is in many ways financial engineering taken to its logical extreme, as it allows the customer (or, as banks will call him/her, the "investor") to actually participate in the creation of Frankenstein by choosing the credits that are included in the tranche on which protection is being bought/sold. Why would anyone want to do this? Well, there are a few reasons, but it basically comes down to whether you, the investor, think you either have a particularly good read on the outlook for a specific set of credits, or believe that a customized basket of credits offers a better risk/reward profile than standardized IG/HY indices, or both. As Citi notes, if you can find a mix of credits you're comfortable with, you can juice the yield well above what you'd be getting on a pure IG portfolio and still be happy with the level of risk. If you're in the equity tranches and you're good at selecting credits that hold up, you can take advantage of structural leverage.

So, in a nutshell, this is the synthetic CDO equivalent of a Build-A-Bear Workshop.

The problem for the investor here is that this hinges almost entirely on the ability to ...

Dear Mr. Market, "It's Not Different This Time"

Via Gerard Minack's Downunder Daily,

Dear Mr. Market,

I'm writing to you about the sharp lift in equity valuations over the past month (Exhibit 1).

I know you sometimes move in ways to cause maximum pain to investors, but I'm not sure that's the case now. Investors may not have expected the sharp rally, but sentiment surveys suggest that most investors are long stocks. Most, in fact, dislike bonds a lot even if they don't love equities.

I know you are forward-looking, so perhaps the PE expansion is anticipating a sharp lift in earnings. That would be brave. In any case, it's unusual for equity markets to rally when earnings are being downgraded as sharply as they are now (Exhibit 2).

Trying to forecast valuation changes is always difficult. I remember my old colleague, Adam Parker, Morgan Stanley's US equity strategist, did a lot of work on how to forecast PE changes and concluded there was no reliable model. (Your MS contact can forward Forecasting the Forward Multiple: A Hubristic Statistic? 29 October 2012.)

Despite Adam's warning, I had expected that valuations would stop rising this year, so equity gains wo ...

Mall owner Simon pushes rival Macerich to do a deal

(Reuters) - Simon Property Group Inc offered to buy Macerich Co for $14.39 billion in a deal that would join the No. 1 and No. 3 U.S. shopping mall owners.

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