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30Mar2015 Market Close: Relative Quiet Day On Wall Street, Oil Experiences Volatility, U.S. Dollar Sky Rockets, Equities End Session On A Whimper

Written by Gary

The averages rose to over one percentage point at the opening, then trader sideways for the entire session on very low volume. Both WTI and Brent experienced wide swings of volatility, becoming more volatile as the afternoon session progressed which usually results in a breakout, any guesses which way? The U.S. Dollar steadily climbed throughout today's session and that usually means a movement in the equities, any guess which way?

By 4 pm there was a fractional, and normal, selloff on slightly increased volume, but it lacked any kind of real direction. Investors are waiting for news on Greece, Iran and oil prices, tomorrow is another day coming closer, some say, to a slaughter of the 'Sheeples'.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Just One Chart

If you ever doubted that bad news is good news... have faith!

Don't think, Buy!

As we noted previously, Jim Bullard broke the narrative...

Bullard's comments changed all that. Having been conditioned to 'know' that money-printing means rising stocks (over the past few years), his comments provided support for the view that if things get worse economically, then The Fed will be back with moar money-printing and stocks will rise.

In other words, the fact that equity valuations and fundamentals are entirely decoupled is not irrational exuberance, it's a rational conditioned reflex to a Fed that will never - ever - as Alan Greenspan noted - be able to remove itself from the equation.

"Bad News is Good News" - Thank you Mr. Bullard.

Let's just hope that this week's jobs number is terrible, or this wealth-creating idiocy will come to a rapid end.

Chart: Bloomberg

Greece Looks to Russia as Deal With Europe Stumbles

A meeting next week between Greece's prime minister and Russia's president raises questions as European leaders said a reform plan had fallen short.

Goldman's "Excel Fat Finger" - Says Earlier GDP Estimate Was A Mistake, Lowers Q1 GDP Tracking To Just 0.8%

Back in 2014, Goldman's Jan Hatzius was proud to announce he anticipated the US economy growing solidly in 2015, at a so-called "above consensus" pace, somewhere in the 3%-3.5% range. Then, a few months ago, the same Goldman strategist unabashedly declared that the US economy would grow by 3% in Q1.

Then... it snowed, leading to the worst economic contraction for the US economy since, well, last winter. It snowed then too, but nobody could possibly anticipate it snowing two years in a row.

And, earlier today, after the BEA's latest report that US consumer failed to spend as much as expected for yet another month (meaning spending contracted during both the gas price-plunge phase and the subsequent rebound), Goldman came out with this.

As a result of the weaker-than-expected spending numbers, we reduced our Q1 GDP tracking estimate by two-tenths to +1.2%.

Not surprising: we said as much would happen a month ago when we first reported that much to the shock of the world, the Atlanta Fed itself was expecting a 1.2% GDP growth in Q1. Since then, the Atlanta Fed has crushed its own forecast and now expects only 0.2% growth.

Which probably explains why Goldman "accidentally" suffered an excel fat finger, and moments ago Hatzius' subordinate, David Mericle, was trotted out to advise Goldman's clients that the firm had a glitch with its earlier GDP forecast, and what it meant to revise Q1 GDP to was 33% lower, not from 1.2% but 0.8% (down from 1.4% previously, and down from 3.0% two months ago).

To wit:

We made an error in our original estimate of the GDP tracking implications of the February PCE report. We have now reduced o ...

"It's Not Bearish, It's Simply Sane"

Submitted by Tim Price vai The Cobden Centre blog,

March 17 - Bloomberg (Kelly Bit): "Ray Dalio, founder of the world's largest hedge fund firm, Bridgewater Associates, told investors there's a risk that the Federal Reserve could create a market rout similar to that of 1937 if it raises interest rates too fast... 'We don't know — nor does the Fed know — exactly how much tightening will knock over the apple cart,' Dalio and Dinner wrote. 'We think it would be best for the Fed to err on the side of being later and more delicate than normal.'"

"Sometimes I feel as if I'm living on a different planet. As much as I respect the intelligence and market acumen of Jeffrey Gundlach and Ray Dalio, I take strong exception with some of their comments on Fed monetary policy. Dangerously flawed policymaking is only perpetuated by further delays in rate normalization. I also reject the comparison to 1937. Even at its 1937 highs, the Dow remained about half the 1929 peak. Unemployment sat above 14%. Today's parallels are much closer to 1929. Regrettably, the Fed drew the wrong lessons from the "tech" and mortgage finance Bubble episodes. Now, everyone wants this party to last forever."

- Doug Noland, Credit Bubble Bulletin. (Bridgewater's $169 billion under management might have something to do with it.)

When In Need Of Humor, NYMEX Close Delivers

Because nothing screams un-broken and un-rigged market like a completely unjustified $1+ spike in the world's most important commodity as it nears the NYMEX close, just because at the very same instant every algo decided to frontrun every other algo.

Perfect algo-inspired run-stop hunt to above Friday's NYMEX close.

...and fade.

Chart: Bloomberg

Meet Andorra: Europe's Next Failed State

Nestling idyllically between France and Spain in the foothills of the Pyrenees, Andorra - which has enjoyed the benefits of European borders without the restrictions of EU membership - has seen its risk "increase beyond our expectations," according to S&P. As a reminder, when Cyprus was "templated" and depositors awoke with a 47% haircut, its total financial assets to GDP was around 8x, Andorra is now at a stunning 17x. As The Telegrpah explains, in the last three weeks, the state has been gripped by a banking crisis that threatens to take it to the brink; and Andorra, which is not a member of the eurozone but uses the single currency on an informal basis, would have no way of bailing them out (with no central bank or lender of last resort). In short, the country faces a catastrophe if its banks fall apart.

Andorra has for many years enjoyed the benefits of European borders without the restrictions of EU membership, allowing light-touch regulation that has brought in tourism and wealthy expats from its bordering countries. However, as The Telegraph reports< ...

Atlanta Wants to Keep Its Airport the World's Busiest

The city's officials believe its bustling hub has been crucial to local economic growth and have intensified efforts to attract businesses.

China Appears to Attack GitHub by Diverting Web Traffic

The attack on GitHub, a code library that includes code for viewing Internet sites blocked in China, comes as China has increased its censorship.

U.S. Consumer Spending Gains, but Slightly

Consumer spending edged up just 0.1 percent last month, half what economists had forecast, after dropping 0.2 percent in January.

Tesla CEO Musk's upbeat tweets about China boost stock

DETROIT (Reuters) - Elon Musk, the widely followed chief executive of electric car maker Tesla Motors Inc, tweeted several optimistic statements about the company's sagging China operations on Monday, sparking a sharp rebound the company's stock.

WTI Tumbles To $47 Handle; Energy Stocks Don't Care At All

Presented with no comment...

One of these things is not like the other...

Not good... apart from... for stocks?

Charts: Bloomberg

SocGen Asks The $4.5 Trillion Question

Call it the $4.5 trillion (the size of the Fed's balance sheet) question: in a report released overnight, titled "Reducing Risk in an Expensive World", SocGen strategists ask what is perhaps the most important question right now: "Will the Fed allow Irrational Exuberance, Season 2?" and point out that based on CAPE valuations, the US equity market now has two choices: it will either proceed to another round of irrational exuberance, or it will correct sharpy and dramatically.

Then again, perhaps this question should have been asked back in March 2009 when instead of doing the right thing and letting bloated, overindebted companies fail, the Fed decided to fix a record debt problem with even more debt, in the hopes of ultimately spurring just enough inflation to wipe away this massive debt overhang, in the process making equity holders richer than they have ever been, and leading such "establishment" thinkers as Guggenheim's Scott Minerd to declare "The long-term consequences of global QE are likely to permanently impair living standards for generations to come while creating a false illusion of reviving prosperity."

SocGen then tries to answer its own question by pointing out that the future of the market, driven entirely by trillions in excess liquidity, does not look very hot when extrapolating the S&P based on the size of the Fed's balance sheet.

Well: GNC to Strengthen Supplement Quality Controls

The action comes after the New York State attorney general's office accused GNC and three other major retailers of selling herbal supplements that were fraudulent or contaminated with unlisted ingredients.

UnitedHealth to buy pharmacy benefit firm Catamaran for $12.8 billion

(Reuters) - Health insurer UnitedHealth Group Inc agreed to buy Catamaran Corp in a deal worth about $12.8 billion to boost its pharmacy benefit business as it competes with bigger rivals such as Express Scripts Holdings Co.

How To Lock And Unlock Airbus A320 Cockpit Door - Description And Procedures

In response to the report that says the aircraft audio shows a pilot was locked out of cockpit: "(...) A senior military official says, "Then the audio indicated that one of the pilots left the cockpit and could not re-enter. 'The guy outside is knocking lightly on the door, and then he hits the door stronger, and no answer. There is never an answer. You can hear he is trying to smash the door down.'

Teva to buy U.S. drug developer Auspex Pharma for $3.5 billion

TEL AVIV (Reuters) - Israel's Teva Pharmaceutical Industries said it would buy U.S. neurology drug company Auspex Pharmaceuticals Inc for an equity value of $3.5 billion to boost its portfolio of treatments for the central nervous system.

New York Times Co. Appoints Kinsey Wilson to Expanded Digital Role

Mr. Wilson, an editor for strategy and innovation, will become executive vice president for product and technology.

Wall Street higher as biotechs rally on M&A deals

NEW YORK (Reuters) - U.S. stocks rallied more than 1 percent on Monday, with biotech stocks among the most active names amid a number of major deals in the space.

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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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