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09Apr2015 Market Close: Markets Volatile Closed In The Green, Oil Closing In On Major Support, U.S. Dollar Near Record Highs

Written by Gary

Very volatile session as oil dropped off to new recent lows, then climbed back up higher than morning highs only to fall 6% to lower lows just at the support level. The U.S. Dollar climbed higher, near record highs, worrying a lot of investor of a weaker market ahead. The U.S. Equities climbed up into the green only to fall back solidly in the red and then melt up slowly to the green once again, closing modestly up.

By 4 pm the closing volume was very light and the short-term indicators were neutral down from 38% bullish this morning. The DOW was up 56, the $RUT was down 4 and WTI oil was still falling rapidly.

Todays S&P 500 Chart

WTI oil is at 50.52 falling from morning highs of 51.86 (Chart Here), Brent has fallen to 56.62 from its high of 57.40 (Chart Here), and the U.S. Dollar is regaining lost ground now at 99.30, up from its low at 98.30 (Chart Here).

The Market in Perspective

Here are the headlines moving the markets.

"I'm The First To Say: I Can't Do It" - The Energy Junk-Bond Implosion Just Claimed Its First Victim

The universe of entities who have blown up in the past year trading oil and commodities is getting increasingly more crowded and includes among them such former luminaries as one-time oil trading god (if mostly in the eyes of Citigroup) Andy Hall. However, until now there not been any prominent casualties among the group of indirect investors in the energy space, those investing in the stocks or debt of energy names, and especially those most at risk from the oil price collapse: junk bond investors.

That changed today when as WSJ reported earlier, Kamunting Street, which managed about $1 billion at its peak, announced it was returning capital to investors, as a result of plunging oil prices and wrong way junk bond bets tied to hard-hit energy companies which had gone sour over the past nine months.

Allan Teh, Kamunting Street's founder and a former Citigroup trading star, said "I'm the first to say: I can't do it. I just don't think in this environment I can have a portfolio that mirrors what was done in the past."

And with that he joins another list of illustrious hedge fund managers who applied such Old Normal concepts as fundamentals, logic and reason to a broken and manipulated "market", which due to the Federal Reserve's central planning, has become merely a policy tool designed to "restore confidence" and which does precisely the opposite with every passing day.

More from the WSJ:

Modest Advances in the Market After Mixed Earnings Reports

Alcoa's quarterly report disappointed, but the energy sector was rising. And in Europe, stocks rose to nominal highs.

Greek Finance Minister Steers Debt Talk His Way

Rather than concede any missteps by Athens, Yanis Varoufakis is seeking to assess the flaws of the eurozone.

Word of Oil Find Near Gatwick Excites Britain

While UK Oil and Gas executives were enthusiastic, energy experts were more skeptical about the potential of the find.

GE close to selling nearly all its real estate holdings - source

(Reuters) - General Electric Co is nearing a deal to sell practically all of its $30 billion real estate assets to a consortium led by Blackstone Group and Wells Fargo & Co, according to a person familiar with the matter.

Google anti-trust foes see friend in new EU competition chief

BRUSSELS (Reuters) - After waiting more than four years for Brussels to resolve his anti-trust complaint against Google while traffic to his website plunged by 80 percent, Michael Weber of German online mapping service held out little hope of success. Until now.

"Saudi Arabia Is Going For it" - Why The Saudis Just Boosted Oil Production To A Record High

Several days ago, oil spiked when headlines hit that Saudi Arabia's oil minister Ali al-Naimi said he was "optimistic" about the future of the price of oil. The spike was confusing because what Saudi Arabia also said, but got no air time, is that the current excess oil production would persist indefinitely, and assure that the scariest chart for oil bulls, namely crude oil inventories in the US ...

... would continue to be the only thing in the US economy that has achieved "escape velocity."

Actually, we take that back: Saudi did not say it would keep production flat - what it did say is that it is boosting its output even higher in what is now a clear confrontation with the US "marginal producer", namely the shale patch, which so far has survived thanks to cheap funding from naive bondholders who are willing to fund US shale on hopes that an oil rebound is imminent, and increasing consolidation in the space which will cut overhead thus bringing the breakeven cost of production lower.

As Globe and Mail reported, instead of leaving its own production flat in an attempt to stabilize oil prices and hit its "optimistic" outlook sooner rather than never, Saudi Arabia would boost production quite sharply to claw back market share. Specifically al-Naimi, revealed that the kingdom's oil production in March was 10.3-million barrels a day â€" a record high. "Saudi Arabia is going for it," Olivier Jakob of the Swiss energy consultancy PetroMatrix said on Wed ...

Unemployment Figures Contradict Signs of March Weakness

The Labor Department said that in contrast to March's slowdown, new claims rose less than expected last week and a moving average of claims fell.

Wall Street edges up as energy rebounds; early earnings weak

NEW YORK (Reuters) - U.S. stocks edged higher on Thursday as a rebound in the price of crude oil lifted energy shares, though strength in the U.S. dollar and uncertainty over the coming earnings season limited the day's gains.

Another Electric Car Bites The Dust: Current Chevy Volt To Go The Way Of The Aztek Due To Plunging Sales

A week ago when observing the latest GM deliveries, we noticed something troubling:

Chevy Volt deliveries -56.8% Y/Y

zerohedge (@zerohedge) April 1, 2015

Here is the unpleasant detail for a car that five years ago was among the biggest hopes for the recently bankrupt auto maker:

It was thus inevitable that the car which first went on sale in 2010 amid very high expectations, and whose lackluster sales of 70,000 to date, far below initial company forecasts amid low gasoline prices and the release of more capable electric models from competitors, was about to be mothballed. Today Reuters confirmed as much when it reported that GM will "halt production of the Chevrolet Volt electric car for the summer to whittle down about seven months of unsold inventory and smooth the way for the next generation of the plug-in hybrid sedan."

Production of the current model, which costs $34,000 and up before federal tax credits, will halt early next month, the Detroit auto maker has said. It will be replaced by a 2016 model with a sleeker design and up to 50 miles range on an electric charge. That second generation Volt will go into production at the end of the summer.

Alas, absent a surge in the price of gasoline back into the high $3 range, the prospects of this "upgrade" will hardly be any better.

From Reuters:

The production hiatus comes after a first quarter in which s ...

Russian Consumers Reflect the Pinch of Economic Sanctions

After years of insatiability, consumers are curbing their spending, leaving shopping centers and other retail space with high vacancies.

Presenting The "Biggest Consensus Trade, Ever"

Back in September, when we summarized the sentiment behind the "Long-dollar trade in one chart" we used the following representation of the euphoria that had built up behind the greenback.

Then, four months later, when updating the biggest consensus trades as we entered 2015, we showed the following image to indicate the current status of the long-USD trade.

At this point we have run out of vivid images of trains overflowing with people on them.

So instead we will leave it up to a less picturesque, but just as accurate, SocGen to show why, once again, Long dollar, is "already the biggest consensus ever."

Hedge fund positions, either long or short, tend to provide valuable insight on financial market trends. We track their behaviour in terms of asset classes, performance and favourite strategies.

Long dollar, especially versus the euro. ...

Ugly 30 Year Auction Tails Big As Direct Bid Tumbles To Lowest Since March 2013

Yesterday's 10 Year auction was impressive, but one can't say the same about the just concluded, and final for the week, 30 Year reopening auction of Cusip RK6 which saw a whopping tail 3 bps to the 2.567% When Issued, when the the High Yield priced at 2.597% (still, about 8 bps tighter than the March 30 auction). The main driver of this subpar demand was not the Bid to Cover ratio, which while very low in historical terms was unchanged from last month at 2.18%, but the collapse in the Direct bid, which took down just 7%, the first single digits Direct take down since May of 2014, and the lowest overall since the 4.9% in March of 2013. However, the Direct slack was more than eagerly sopped up by foreign central banks which took down a near record 51.3%, just shy of the all time high of 53.2%. Dealers were left with 41.8%.

Some more statistics from Stone McCarthy:

The 30-year bond auctions have stopped through their respective bidding deadlines by an average of 0.2 basis points over the past year, but there have been significant tails at the most recent three auctions, and the second reopening auctions over the past year have also stopped with an average tail of 0.4 basis points. The average bid/cover for 30-year bond auctions over the past year was 2.43, and the average for the four second reopening auctions was little different at 2.41. The bid/covers have been significantly smaller, however, at the bond auctions so far this year.

BlackRock bullish on emerging markets debt

(Reuters) - BlackRock sees opportunities to invest in emerging markets debt, despite the rising U.S. dollar and an expected increase in U.S. interest rates this year, executives said Thursday.

GM mulls $1.3 billion expansion of Texas assembly plant

(This April 8 story corrects second paragraph to say GM is adding 589 jobs, raising the required minimum to 3,179 at the plant, not adding 589 jobs to existing 3,179)

Bernanke Supercycles

By Jeffrey Snider of Alhambra Investment Partners

Bernanke Supercycles

The frightening possibility that the US economy, and the world with it, remains still bound by a single "cycle" dating back to at least 2007 (and you could even argue 2000 or 1995) brings with it nothing good about future prospects. If 2009 wasn't really the ultimate end then that would mean the true trough is still to be found. The surface of that problem is that the Great Recession itself counted as a huge subtraction, but ultimately not conforming to symmetry in the recovery stage. Thus, the economy is less and has remained less despite the appearance of positive numbers.

To put more specificity to it requires more than just anomalous figures â€" though 14 million failed labor potential will suggest nothing less than a serious break with past tendencies. In some ways, the early 1980's offers a distant template as the initial 1980 recession was created by "inflation" and then re-recession through the very same. In other words, the same problem that existed at the outset of the first event existed entirely through it even if some of the economic figures suggested a comprehensive resolution. To complete the cycle actually meant a second and greater contraction.

The distinctive problem of our own period is not one of "inflation" but of a shortage of demand (oversupply). In orthodox terms, that has meant "aggregate demand" which leads policy towards "stimulating" spending for the sake of spending through the courses of financial redistribution (with some fiscal re ...

LinkedIn to buy online education company for $1.5 billion

(Reuters) - Professional social network operator LinkedIn Corp said it would buy privately held online education company in a cash-and-stock deal valued at about $1.5 billion.

Fukushima Chiefs: The Technology Needed To Decommission 3 China-Syndromed Reactors Doesn't Exist ... Maybe In 200 Years?

Preface: As you read this post, please keep in mind:

The reactors didn't just suffer a melt down, or even a China syndrome type melt-through, but a series of melt OUTS. Scientists have no idea where the cores of the nuclear reactors are. Well actually, maybe they have found them ... scattered all over kingdom come.

In response to the Fukushima crisis, Japan banned journalism, and Japan has once again gone fascist. If the heads of Fukushima are publicly telling mainstream media such as NHK that things are bad - and the government is letting them do it - you know things are really bad ...

We reported in 2012 that top nuclear experts say that the technology does ...

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