U.S. stocks eased today as a pair of weaker-than-expected economic indicators spurred concerns over economic growth.
The Fed's GDPNow model forecast for real GDP growth in the first quarter of 2015 has been downgraded once again to zero percent on April 1 which is no April Fools Day joke.
By 4 pm the markets down having been in the red all session on mostly low volume. Friday's jobs report, Iran and the possible 'Grexit' is weighing heavily on the pocketbooks of investors not wanting to or are unable to jump on the bull train.
Todays S&P 500 Chart
WTI oil is at 49.66 rising from morning lows of 47.06 (Chart Here), Brent has risen to 56.72 from its low of 54.70 (Chart Here), and the U.S. Dollar has lost ground now at 98.52, down from its high at 98.96 (Chart Here).
Our medium term indicators are leaning towards Hold portfolio of non-performers and the session market direction meter (for day traders) is 88 % bullish up from 14 % bullish at the opening bell. We remain mostly conservatively bullish, but with a bearish slant. I am very concerned any downtrend could get very aggressive in the short-term and any volatility may also promote sudden reversals that will only please the day traders. The SP500 MACD has turned down, but remains below zero at -2.57. It is expect to move lower over the next few sessions before turning back up.
Having some cash on hand now is not a bad strategy as negative market changes are happening everyday. Many investors are starting to take in some profits from 'high-fliers' as a precaution and to build a better cash base for the 'dips'.
As of now, I do see some leading indicators that are warning of a 'long-term' reversal within six months. I believe one is most likely to occur later in 2015, but any market fluctuations we see now are more of a internal market rectification than a bear market. If you are not worried, then at least be cautious. A good rule is that one cannot be prepared for a situation if you do not anticipate the possibility of that situation materializing.
"Forward indicators are now suggesting the economy will be slowing . . . The problem is that there can be little exactness because of weather and labor issues occurring simultaneously . . . I am concerned because rail traffic is very weak.
What I am currently watching is rail counts which look ugly. Rail is a real-time reflection of economic activity. But carloads (chemicals, coal, oil, motor vehicles, grain, farm products, etc.) are struggling. Even removing coal and grains from the analysis shows a CONTRACTION.
I believe the clues are too abundant to poo-poo that the USA has entered an economic soft spot. Many long view economic sectors we watch remain in positive territory, so there is no evidence that the USA is headed towards a recessionary cycle. But one always worries that economies are ripe for an economic shock when there is economic softness."
The Market in Perspective
Here are the headlines moving the markets. xxxxxxxxxxx
(Reuters) - GoDaddy Inc's shares rose as much as 34 percent in their debut on Wednesday following a $460 million initial public offering, as investors spotted a bargain in a company making a shift from Internet domains to small-business services.
Moments ago, the Tesla twitter feed and blog reported that the company was announcing a new car Model, the "W":
Announcing the Tesla Model W
Tesla today announced a whole new product line called the Model W. As many in the media predicted, it's a watch. That's what the "W" stands for.
This incredible new device from Tesla doesn't just tell the time, it also tells the date. What's more, it is infinitely adjustable, able to tell the time no matter where you are on Earth. Japan, Timbuktu, California, anywhere! This will change your life. Reality as you know it will never be the same.
Warning, current version requires wrist strength of an Orangutan.
Studies have shown the Model W will dramatically improve your health. If you work out. And it's available in platinum!
No longer will you need to rudely examine your phone to read text messages. Now you can politely stare at the tiny screen on your wrist without anyone noticing.
This is in no way a competitive response to what some other company is doing.
Clearly, the above was an April fool's joke as anyone who reads more than just the headline would immediately guess. The problem is that Bloomberg's fast response team did not have the time ...
WASHINGTON (Reuters) - As the U.S. Supreme Court on Wednesday considered the case of a Massachusetts homeowner battling his mortgage lender over a bankruptcy plan, several justices focused their attention on his unlikely ally: Bank of America Corp.
Submitted by Pam and Russ Martens via Wall Street On Parade blog,
Barron's should have published its gushing cover story on Jamie Dimon's stewardship of JPMorgan today - as an April Fool's joke.
The nation's largest bank is operating under a deferred prosecution agreement until at least next January for two felony counts it received in the Madoff swindle, the largest Ponzi scheme in history. It's under a current criminal investigation over potential rigging of the foreign exchange markets with the New York Times reporting on February 10 that federal prosecutors had informed JPMorgan and three other banks "that they must enter guilty pleas to settle the cases." Barron's sister publication, the Wall Street Journal, reported on February 24 that JPMorgan is one of the 10 banks being investigated by the U.S. Justice Department for potential rigging of gold and other precious metals.
Against that backdrop, Barron's comes up with this: JPMorgan is "Back on Top." Back on top of what - its serial crime spree? The article, by Associate Editor Andrew Bary, goes downhill from there. Here's a few howlers.
Jamie Dimon, Chairman and CEO of JPMorgan, who has kept his job through a rising tide of scandals at the bank, says in the article:
WASHINGTON (Reuters) - U.S. private employers added the smallest number of workers in more than a year in March and factory activity hit a near two-year low, fresh signs that economic growth slowed significantly in the first quarter.
To be sure, the good folks at Santander Consumer and American Credit Acceptance (among others) are doing everything they can possibly do to get underqualified borrowers into used cars even if it means extending terms that will land some of these proud new owners in vehicles they absolutely cannot afford given their financial circumstances. This is all made possible of course by the Wall Street securitization machine which has churned out some $5 billion in subprime auto-backed issuance YTD, with a recent deal from Santander Consumer (DRIVE 2015-A) marking the lender's return to the frightening world of "deep" subprime. As a reminder, here are two recent ABS deals which epitomize what's wrong with this industry:
From American Credit Acceptanceâ€¦
From Santander Consumerâ€¦
Despite the fact that most mainstream commentators are in a complete state of denial about the space â€" with some anchors on everyone's favorite "we don't need Nielsen" financial network even going so far as to
Amid the "cruelest winter ever," with the lowest snowpack on record, and with 98.11% of the state currently in drouight conditions, California Governor Jerry Brown orders mandatory water cuts in California for the first time in history...
Lowest snowpack on record...
And finally some action...
Gov. Jerry Brown orders mandatory water cuts in California after snowpack shrinks to record low http://t.co/Wdy2SYFV0V
— WSJ Breaking News (@WSJbreakingnews) April 1, 2015
For several years in a row, GM's favorite deus ex trick to "boost" sales and fool most of the people all of the time, also happened to be the oldest: channel stuffing. As we showed previously, as recently as year ago, GM had some 800,000 vehicles parked on dealer lots.
Eventually, GM got enough questions from outside sources (here and here), to where it was forced to taper its aggressive channel stuffing only to find a second "deus ex" - subprime loans. This lasted for a little over a year before none other than the government itself yanked the subprime bubble from under the car-makers in the second half of 2014, leading companies such as Goldman to admit "subprime was responsible" for the subsequent collapse in auto sales.
While above the 27 year average, Snow fall this year is 30% below last year's.
Source: Goldman Sachs
So, while it helps the narrative and provides an easy crutch for Keynesian apparatchiks from being forced to admit their philosophy's utter failure; as the collapse in oil, the plunge in world trade, and the "worst since Lehman" drops in macro data simply do not fit the 'weather' meme...
Perhaps, just perhaps, there is only so much future demand that can be dragged into the present before the whole ponzi collapses...
Submitted by David Stockman via Contra Corner blog,
Blogger Ben's work is already done. In his very first substantive post as a civilian he gave away all the secrets of the monetary temple. The Bernank actually refuted the case for modern central banking in one blog.
In fact, he did it in one paragraph. This one.
A similarly confused criticism often heard is that the Fed is somehow distorting financial markets and investment decisions by keeping interest rates "artificially low." Contrary to what sometimes seems to be alleged, the Fed cannot somehow withdraw and leave interest rates to be determined by "the markets." The Fed's actions determine the money supply and thus short-term interest rates; it has no choice but to set the short-term interest rate somewhere.
Not true, Ben. Why not ask the author of the 1913 Federal Reserve Act and legendary financial statesman of the first third of the 20th century—-Carter Glass.
The then Chairman of the House Banking and Currency Committee did not refer to the new reserve system as a "banker's bank" because he was old-fashioned or unschooled in finance. The term evoked the essence of the Fed's original mission. Namely, to passively rediscount good commercial collateral (receivables and inventory loans) brought to its window by member banks—priced at a penalty spread floating above the market rate of interest.
Notwithstanding Bernanke's spurious claim that the Fed has to "set the short-term rate somewhere", the reserve system designed by ...
The Atlanta Fed's GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2015 has been downgraded once again... to 0.0 percent on April 1, down from 2.3 percent on Feb 13th.
Following this morning's construction spending release from the U.S. Census Bureau, the nowcast for real residential investment growth increased from -1.1 percent to 1.8 percent. This was more than offset by declines in the nowcasts for real nonresidential structures investment growth (-19.3 percent to -22.5 percent) and real state and local government spending growth (0.3 percent to -0.8 percent).
A video showing the chaotic final seconds on board the Germanwings flight that crashed in the French Alps last week has been discovered near the site, according to Reuters, who note that Germany's Bild daily reported on Wednesday that it had seen the footage. The video, which Bild described as being "indisputably authentic", was reportedly found on a mobile phone belonging to one of the passengers killed on the flight suggested passengers were fully aware of what was happening...
"It comes from the people who were investigating on the site. That is as much as we're going to say about it," he said, adding that a senior French reporter got it from his sources and then "went through the process of verifying it."
"There is no doubt that what we saw are the final seconds of what happened on board," Reichelt said.
As Reuters reports, the scenes seen on the video were chaotic and very wobbly, said Bild, adding screams and shouts of "My God" could be heard in variuous languages, indicating the passengers knew what was happening.
Prosecutor Brice Robin, who is handling the case in France, said none of the mobile telephones collected at the crash site had been sent for analysis.
"All are for now being kept at Seynes-Les-Alpes. If people at the site have picked up mobile phones, I am not aware of it," he told Reuters by telephone. France's BEA investigation authority could not immediately be reached for comment.
SAN FRANCISCO (Reuters) - Delta Air Lines Inc has become the first U.S. airline to accept payments via Alipay, the PayPal-like service run by an Alibaba Group Holding Ltd affiliate that is used by hundreds of millions of Chinese consumers.
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