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06Apr2015 Market Update: Markets Rise Off Morning Lows, DOW Up Triple Digits, Oil Up, U.S. Dollar Sinking

Written by Gary

Amid collapsing macro data and earnings expectations, the ISM non-manufacturing index continues its growth cycle, but declined marginally from 56.9 to 56.5. Important internals mixed but still remained in expansion. On the other hand, Market PMI Services Index was released this morning and says the opposite.

Against the worst payrolls data in over 2 years, Markit's employment index rose by most since June. Furthermore, the business outlook tumbled to 8-month lows.

Oil rises higher as the U.S. Dollar sinks on higher than usual volume as the averages continue to climb off the morning lows pushing the DOW up triple digits.

Here is the current market situation from CNN Money

North and South American markets are higher today with shares in Brazil leading the region. The Bovespa is up 0.98% while Mexico's IPC is up 0.77% and U.S.'s S&P 500 is up 0.74%.

Traders Corner - Health of the Market

Index Description Current Value Members Sentiment: % Bullish (the balance is Bearish) 52%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 39
Investors Intelligence sets the breath Above 50 bullish 58.4% Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. +12.14 NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 58.73% NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 63.95% S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 70.00% 10 Year Treasury Note Yield Index ($TNX) ten year note index value 18.94 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 76.22 NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 11,036

What Is Moving the Markets

Here are the headlines moving the markets.

Fed watching recent weakness; rate-hike timing unclear: Dudley

NEWARK, N.J. (Reuters) - The timing of U.S. interest rate hikes are uncertain and the Federal Reserve must watch that the surprising recent weakness in the U.S. economy does not foreshadow a more substantial slowdown, an influential Fed official said on Monday.

U.S. March services sector activity rises to highest since August: Markit

NEW YORK (Reuters) - The U.S. services sector expanded in March at its fastest pace since August, an industry report showed on Monday.

Wall Street up as Fed seen delaying move; utilities jump

NEW YORK (Reuters) - U.S. stocks edged up on Monday as expectations the Federal Reserve will push any interest rate increases further into the year offset concerns over faltering economic growth spurred by a surprisingly weak jobs report on Friday.

Consumer Spending Hits Three-Year March Low For Average Americans

In "sad but true" news, we recently reported that even as wage growth for 80% of America's workforce has sputtered and stalled, there's never been a better time to be a "supervisor":

With more than three quarters of US workers trapped in what we will call "wage growth hell," and whose only chance at seeing a pay hike appears to rest on holding out for a promotion that's probably not forthcoming, it doesn't exactly come as a surprise that self-reported consumer spending hit a three-year low for March last month and has trended sharply lower this year when compared to 2014.

Of course those with higher incomes hiked their spending by 75% more than those with middle- and lower-incomes. Here's more via Gallup:

Average self-reports of spending in March increased by $7 among upper-income Americans -- those with annual househ ...

March 2015 Conference Board Employment Index Declined But "Unlikely that Job Growth Will Fall Below 200,000 Jobs per Month"

Written by Steven Hansen

The Conference Board's Employment Trends Index - which forecasts employment for the next 6 months - declined. This is the problem with trend based indexes at turning points.

U.S. service sector growth slips in March: ISM survey

NEW YORK (Reuters) - The pace of growth in the U.S. services sector fell in March to its lowest level in three months but exports rose to the highest level in over two years, according to an industry report released on Monday.

Great News! Labor Market Conditions Collapse Sends Stocks To Strongest Opening Rally Of 2015

We can't make this up. Following Friday's dismal payrolls, today's Fed Labor Market Conditions Index (the aggregate index of all Yellen's indicators) collapsed to its lowest in almost 3 years. That was just the news that stocks needed to complete the biggest opening rally of the year so far...

Worst labor market conditions in almost 3 years...

So buy the bad news...

Strongest rally in eMini from 9:30 EDT for 2015 so far.. $ES_F $SPY

Eric Scott Hunsader (@nanexllc) April 6, 2015

March 2015 ISM Services Index Again Declines Marginally But Remains in Expansion

Written by Steven Hansen

The ISM non-manufacturing (aka ISM Services) index continues its growth cycle, but declined marginally from 56.9 to 56.5 (above 50 signals expansion). Important internals mixed but still remained in expansion. On the other hand, Market PMI Services Index was released this morning and says the opposite.

US Services Confusion: Good (PMI 7 Mo Highs), Bad (ISM 9 Mo Lows), & Ugly (Business Activity 12 Mo Lows)

Amid collapsing macro data and earnings expectations, Markit's US Services PMI smashed expectations and surged to 59.2 (its highest in 7 months) - just like Markit's Manufacturing PMI 'surprised'. Against the worst payrolls data in over 2 years, Markit's employment index rose by most since June. Furthermore, the business outlook tumbled to 8-month lows. And then following ISM Manufacturing's miss and tumble to near 2-year lows, ISM Services met expectations at its lowest since June... as Business Activity tumbled to one-year lows.

Mass confusion...

Markit PMI "Soft" survey vs "hard" macro data...

But ISM was more 'sensible' - hovering at its lowest since June

And business activity tmbled to one-yearlows...

In summary:

Virtu's Second Attempt At Going Public Reveals Why FX Trading Is Now Impossible

A year ago, when Virtu shelved its plans to go public, everyone knew it was only a matter of time. Sure enough, nobody can contain an machine that has Virtu's trading record, which as a reminder, is now one trading loss day in 6 years of trading, or as Virtu said "The overall breadth and diversity of our market making activities, together with our real-time risk management strategy and technology, have enabled us to have only one overall losing trading day during the period depicted, a total of 1,485 trading days."

It wasn't just Virtu's trading perfection, it was the fact that in a time of collapsing trading revenues for everyone else, Virtu had managed to once again grow its own order frontrunning top-line. As we reported back in February, "not only did Virtu not have a trading day loss in all of 2014, but on its "worst" trading day, the firm made "only" $800,000 to $1,000,000, the highest "worst" bucket in its history, suggesting that even as trading volumes continue to collapse, Virtu gets more and more aggressive with its "strategies", something that can be seen on the chart below showing the increasing preponderance of higher profitable trading days in 2014 vs 2013."

Oil up more than $1 after Saudi's Asia price hike

LONDON (Reuters) - Oil futures climbed more than $1 a barrel on Monday, after Saudi Arabia raised its prices for crude sales to Asia for the second month running, signaling improved demand in the region.

Guaranteed Financial Security Is A Fantasy

Submitted by Charles Hugh-Smith of OfTwoMinds,

Guarantees based on extracting higher taxes, borrowing trillions of dollars and creating trillions more out of thin air only guarantee eventual systemic implosion.

It is difficult for those living through tectonic social and economic shifts to recognize the passing of one era and the emergence of a new era. We are clearly in such a tectonic shift, yet it is slow enough and uneven enough that those who hope the old era will somehow endure despite the erosion of its foundations can find evidence to support their beliefs.

One such cherished belief is the faith that financial security can be guaranteed. This faith has two components:
1. The faith that risk can be identified and managed to the point it cannot disrupt the payment of promised pensions, benefits, yields, etc.
2. The faith that the system can pay what has been promised by one means or another.
If tax revenues are inadequate, taxes can always be raised. If tax revenues fail to rise, then the money needed to pay the promised pensions, benefits, etc. can be borrowed. If the money cannot be borrowed, then it can simply be created out of thin air by central banks or printed by government treasuries.
Before the advent of high finance, lowering risk could only be achieved by spreading the risk over a large populace. To lower the risk to individuals that their house would burn down in an accidental fire, insurance was sold to 1,000 homes. If one or two of the 1,000 homes burned down each year, the insurance could pay the claims and still build up reserves f ...

Big Data: If Algorithms Know All, How Much Should Humans Help?

Data science offers a lot of promise in many fields, but for now, it seems wise to keep human beings in the loop.

Greek Minister Slams Troika's "Unbelievable Prejudice" As EU Proclaims Tsipras' Government "Cannot Survive"

The rhetoric, threats, and promises continue to increase as Greece, its international creditors (i.e. Troika), and its potential pivot partners from Russia to China to Iran all vie for attention.

Greek FinMin Varoufakis 'promised' Christine Lagarde this morning that Greece will repay the IMF loan on April 9th (though was unable to explain how)...

Though it is unclear where he will get the cash from...

Even as energy minister Panagiotis Lafazanis denounced Greece's international creditors for treating the country with "unbelievable prejudice and as a colony." As The Guardian reports,

With Greece's cashflow problem deteriorating with every passing day, rumours of Athens' overtures towards the unlikeliest of sources have the sprung up. The latest comes form the country's former prime minister, Atonis Samaras.

Mr Samaras has accused the current incumbent of "sending his cousin to Iran to ask the Tehran government to buy Greek bonds".

"When you are in Europe and ask Chinese, Iranians, Russians to finance your deficit, don't you send a signal to the rest of Europe that you are not really a serious pro-European?," was the refrain of the leader of the much diminished New Democracy party.

Key Events In The Coming Week

The week after NFP is traditionally quiet, with the biggest event in the coming days is the FOMC Minutes report due this Wednesday (or Tuesday if one is on the Fed's "special" email distribution list, speaking of which hi Brian Gross, any chance we can get on that list?)

Here is the summary of the key US events via BofA:

And, from Goldman Sachs, here is the detailed breakdown of what to expected.

In DMs, highlights of next week include US FOMC Minutes, MP Decisions in UK, Japan and Australia, Composite and Services PMI in DMs, IP in Euro area.

[Tuesday] Australia MP Decision; Composite and Services PMI in DMs.

[Wednesday] US FOMC Minutes, Japan MP Decision.

[Thursday] Germany IP; UK MP Decision.

[Friday] IP in Denmark, France, Norway, Spain and UK.

In EMs, highlights of next week include MP Decisions in India, Singapore, South Korea and Peru; Minutes in Hungary, Israel, Mexico and Chile, China CPI.

[Monday] Minutes in Israel and Chile, Chile Economic Activity.

[Tuesday] India MP Decision.

[Wednesday] Hungary Minutes; IP in Hungary and Turkey.

[Thursday] MP Decisions in South Korea and Peru, Mexico Minutes.

[Friday] China CPI, IP in Malaysia, Czech Republic and Mexico.

Greece moves to quell default fears, pledges to meet 'all obligations'

WASHINGTON (Reuters) - Greek Finance Minister Yanis Varoufakis said on Sunday that Greece "intends to meet all obligations to all its creditors, ad infinitum," seeking to quell default fears ahead of a big loan payment Athens owes the IMF later this week.

A Case Study in Failed Journalism

With "A Rape on Campus," Rolling Stone's widely discredited article, traditional safeguards broke down at pretty much every level of the editorial process.

ZenPayroll Start-Up Raises $60 Million From Group Led by Google Investment Arm

The funding round valued the payroll processor, which was created in 2012, at $500 million.

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