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16Mar2015 Market Update: Markets Open Up, Melt Up To One Percent, WTI Trending Down

Written by Gary

The U.S. Dollar is in full retreat this morning slipping below 100.00 for the first time in several sessions but is not expected to stay there for long. The markets climbed to one percent as WTI oil trended sharply down from the weekend highs which should reverse course for the equities shortly.

The DOW was at 178 at one point and the averages appear to be rolling over on falling volume.


Here is the Market Open from CNN Money

North and South American markets are mixed today. The S&P 500 is up 0.91% while the Bovespa gains 0.52%. The IPC is off 0.12%.

If you are one of the investors wondering if the Saudi's really want oil to fall then why would they put more rigs into production? As of February 2015 the oil rig count jumped by19 pushing even more crude out to the already flooded markets. Where are we going to store all of this oil production becomes the big question as the US storage tanks are just about filled?

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 65
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 43
Investors Intelligence sets the breath Above 50 bullish 57.5%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. -37.90
StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 53.11
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 60.80
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 71.00
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 20.75
StockChart.com Consumer Discretionary ETF (XLY) As long as the consumer discretionary holds above [66.88], all things being equal, it is a good sign for stocks and the U.S. economy 75.86
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10,842

What Is Moving the Markets

Here are the headlines moving the markets.

Home builder sentiment dips in March -NAHB

NEW YORK (Reuters) - U.S. homebuilder sentiment declined for a third straight month in March but still showed more builders view market conditions as favorable, the National Association of Home Builders said on Monday.

Middle East OPEC Oil Rig Count Jumps 14%

As if to rub salt in the wounds of the US shale industry, Middle East OPEC oil-rig count has jumped by 19 rigs to 155 units in February 2015 setting a new rig count record for the region. Since 2005, the super giant oil fields of the region developed symptoms of mortality and increased drilling has been required to combat natural production declines in order to maintain production at static levels. More on international and US rig counts below the fold.

OPEC says low oil prices may hit U.S. output by late 2015

LONDON (Reuters) - U.S. oil output could start to take a hit by late 2015 due to low prices, OPEC said on Monday, suggesting the exporter group will have to wait beyond its next meeting in June to see if its strategy to defend market share will dent the shale oil boom.

Valeant Fends Off Rival BId for Salix

Faced with the prospect of letting another deal slip through its fingers, the drug maker increased its bid, and Endo International withdrew.

Wall Street rises as euro recovers against dollar

(Reuters) - U.S. stocks opened higher Monday and the benchmark S&P 500 rebounded after three weeks of losses as the euro strengthened against the dollar, easing some concerns over the impact of a robust greenback on corporate earnings.

Trian says DuPont's shareholders show strong interest for Trian nominee

(Reuters) - Trian Fund Management LP said there was "strong interest" among large DuPont shareholders for a representative from the hedge fund to join the chemical conglomerate's board.

The Last Time This Happened, The Fed Launched QE 2

The prospects of a rate hike by the Fed are looking increasingly shaky and downright laughable, not just because the start to 2015 for the US economy has been the worst in "negative surprises" terms since Lehman, or because the Atlanta Fed Q1 real-time GDP forecast is about to go negative (consensus originally expected this print to be 3.5% if not higher), but because the last time this happened, the Fed launched QE2.

What is "this"? Bank of America explains.

Trimmed mean measures of inflation had appeared stable when cited by some FOMC participants in the January minutes, supporting the idea that soft inflation largely reflected transitory factors. But, the 12-month change in the Dallas Fed's trimmed mean PCE measure has dropped below 1.5% after running between 1.6 and 1.7% for much of 2014. The annualized 3-month change, illustrates how sudden and sharp the deterioration has been. The last time this measure was so weak was in early 2010, when persistently low inflation helped convinced the Fed to launch QE2 later that year.

So add tumbling personal consumption expenditures (but... but... plunging gas prices are unambiguously good) to the list of items the Fed will sternly refuse to observe as it moves from "patient" to "impatient", if as so many now expect, it starts hiking interest rates as soon as June.

February 2015 Industrial Production: This Was a Very Weak Report

Written by Steven Hansen

The headlines say seasonally adjusted Industrial Production (IP) improved. This is misleading as manufacturing declined - and has declined for the last 3 months (now evident due to backward revision) - and the reason for the increase in IP was due to a massive jump in utilities. This is a weak report, and under expectations.

Valeant trumps Endo with increased bid for Salix Pharma

(Reuters) - Valeant Pharmaceuticals International Inc said it increased its offer for Salix Pharmaceuticals Inc to $10.96 billion in cash, topping Endo International Plc's bid of $10.93 billion in cash and stock for the bowel drug maker.

US Manufacturing Output Falls For 3rd Month - Worst Since Lehman

Along with a massive revision for January (from +0.2% to -0.3%), February's Factory Output fell 0.2% (missing expectations for the 3rd month in a row). This is the 3rd drop in a row for factory output - the worst run since 2009. Overall industrial production missed for the 3rd month in a row but managed a meager 0.1% rise on the back of the biggest rise in utility output ever. Auto vehicles and parts production tumbled 3.0% MoM.

Overall IP rose less than expected...

But Factory Output was even worse with the 3rd drop in a row, major downward revisions, and worst since the great recession

Manufacturing output decreased 0.2 percent in February.

The production of durable goods moved down 0.6 percent, with widespread losses among its components, and the production of nondurable goods moved up 0.2 percent. The motor vehicles and parts industry posted a loss of 3.0 percent, the largest decrease among durable goods manufacturers; most other industries moved down more than 0.5 percent. Only the aerospace and miscellaneous transportation equipment industry recorded a significant increase in production, advancing 1.2 percent

Manufacturing output takes surprise dip in February

WASHINGTON (Reuters) - U.S. manufacturing output fell in February for the third straight month as automobile production tumbled, pointing to slower economic growth in the first quarter.

Sotheby's Names Tad Smith as Auction House Chief

Sotheby's hired Madison Square Garden's co-chief executive after more than a year of demands from activist investors for big changes.

Madison Square Garden CEO Tad Smith to head Sotheby's

(Reuters) - Sotheby's named Madison Square Garden Co Chief Executive Tad Smith its CEO, after more than a year of demands from activist investors for big changes that could make the centuries-old auction house more competitive.

Oil, dividends, cheap assets - return to Russia rewards investors

LONDON (Reuters) - Fund managers who bet on beaten-down Russian stocks and bonds have been rewarded with some of the best returns in emerging markets so far in 2015.

When It Becomes Serious, First They Lie - When That Fails, They Arrest You

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

When lying is no longer enough to gain compliance, then the organs of security are unleashed on dissent and resistance.

"When it becomes serious, you have to lie." Jean-Claude Juncker simply gave voice to what the world's leaders practice on a daily basis, because now it's always serious. And why is it now serious? Persuading tax donkeys and debt serfs that everything is going their way is now impossible without lies. Persuading the populace that the leadership is working on their behalf was jettisoned in the wake of the 2008 bailout of bankers and parasites. Stripped of the artifice that they care about anything other than preserving the wealth of their cronies, global political leaders now rely on propaganda: narratives designed to manage expectations and perceptions, bolstered by carefully tailored official statistics. Reliance on lies erodes legitimacy. As the rich get richer and the burdens on tax donkeys and debt serfs increase, the gulf between the official happy-story narrative and reality widens to the breaking point, and faith in the narrative and the leadership espousing it declines. When 20% of the populace no longer believe the lies and begins questioning the state's enforcement of the status quo, the government devotes its resources to punishing dissenters and resisters. Whistleblowers are charged with trumped-up crimes; those publicly refuting the status quo's narrative of lies are harassed and discredited, and those who resist state enforcement of parasitic cronyism ...

Banco Madrid files for bankruptcy as money laundering scandal swirls

MADRID (Reuters) - Small Spanish bank Banco Madrid has filed for bankruptcy after the United States accused its Andorran parent of laundering money for organised crime groups.

Holcim's Demand for New Terms Endangers Merger Deal With Lafarge

They planned to combine on equal terms to form the world's largest cement and construction materials company, but diverging results and currency concerns put the agreement at risk.

SolarCity, a Vocal Critic of the Utility Industry, Joins It

SolarCity will design and operate small, independent power networks called microgrids for cities, remote communities, campuses and military bases.

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To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

gary@econintersect.com

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