The averages closed down in various degrees with the large caps leading the way south. The volume has be uniquely moderate across the board and through out the session as a real battle of ideological views was won in the end by the bearish crowd. The oils were volatile, but ended up sideways as did the U.S dollar after falling off the morning highs.
By 4 pm the markets closed down after 3 sessions in the green mostly because of caution growing about the dollar's impact on U.S. Earnings. Also, new fears of Greece preparing for an eventual default unless it can reach a deal with its international creditors by the end of April has created a poisonous atmosphere in the minds of many investors.
Todays S&P 500 Chart
WTI oil is at 51.95 falling from morning highs of 53.05 (Chart Here), Brent has fallen to 59.08 from its high of 60.56 (Chart Here), and the U.S. Dollar is now at 99.72, down from its high at 100.26 early this morning (Chart Here).
Our medium term indicators are leaning towards SELL portfolio of non-performers and the session market direction meter (for day traders) is 8 % bullish down from 36 % bullish this morning. 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 up, but remains above zero at +2.84. Watch the WTI oil prices as anything below $50 will be the first sign of a declining market in the works. Below $44 you had better put on your seat belt as the encroaching roller coaster ride may be be very bumpy.
Having some cash on hand now is not a bad strategy as negative market changes are happening everyday, 99% of them are minor, it is that 1% I am worried about. 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."
There's nothing like a little complacency to make an already precarious situation even more precarious and if IG volumes are any indication, bond traders are getting mighty bored. As a reminder, the current environment in corporate credit â€" which Gundlach deputy Bonnie Baha recently described as offering one of the "most unattractive risk/return propositions" she's ever seen â€" doesn't offer much in the way of opportunities as central banks have succeeded in herding so many yield-starved investors into IG and HY (i.e. away from government debt which in the best case yields you nothing and in the worst case will guarantee you a loss) that spreads are pitiably low.
Meanwhile, the new regulatory regime has done an admirable job of making the system "safer" by encouraging dealers to shrink their inventories, meaning that while we're all safe from evil prop traders (because we're sure prop trading is dead and the Goldmans of the world didn't find a way around Volcker the very instant it was proposed), secondary market liquidity has evaporated, meaning the door to the proverbial crowded theater is getting smaller even as the number of yield seekers inside is getting larger so when someone finally yells fire, well, let's mix our metaphors here and say we're all up a creek.
Given the above, it's not terribly surprising that bond traders have, in Barclays' words, made "Monday the new Friday." Here's more (from a Friday note):
Activity in credit was muted this week. Investors were slow to return to trading from the Easter holiday, and volumes were sha ...
The Fed Can Be Patient About Raising Interest Rates
As the Federal Reserve's Open Market Committee prepared to meet last month, no one was wondering what the Fed would do. Everyone knew it would do nothing. There would be no rate hikes, no balance sheet shrinkage, nothing.
Instead, financial eyes were glued to what it would say. In particular, would the FOMC continue to characterize itself as "patient" about raising interest rates? Or would the word "patient" be dropped, sounding alarms of higher rates to come?
On Wednesday, March 18, the financial world got its answer: The Fed is still patient, in fact extremely patient. But it's not going to use that p-word anymore. Instead its language is now more specific. "The Committee anticipates that it will be appropriate to raise the . . . federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective."
The most important word in this sentence got little attention: and. The Fed wants to see two things before it is ready to raise interest rates: "further improvement in the labor market" (even though the unemployment rate is now back to spring 2008 levels), and convincing evidence that inflation (which has been running below target) is heading back to 2%. Waiting for both may require a lot of—well—patience.
Then why jettison the p-word? As devout Fed-watchers know, Chair Janet Yellen had defined being "patient" as waiting at least two more Fed meetings—roughly a quarter—before raising rates. She said "at l ...
It's getting serious for the academic hacks who meet every two months in Basel to drink $5000 bottles of wine and regale each other with their stupidity, most of whom have never held a job outside of academia, and for whom the only solution to the second great global depression is simply to buy assets and specifically stocks in a bid to restore confidence, oblivious that everyone now understands that the greater the central bank intervention, the greater the confidence destruction.
So serious, in fact, that the Fed is now on the defensive not only from tinfoil bloggers who said QE would ultimately lead to war, revolution, and global catastrophe, but very serious people who say QE will "Permanently Impair Living Standards For Generations To Come" other very serious people who are asking whether "was QE worth it?"
Even more serious people (and self-made billionaires) who observe that the Fed is "Destroying the Value Of Money" And "Uprooting The Basic Stability Of Society" other billionaires who note that "It's Tempting To Invest, But This Will End Very Badly" its supervsiors who accurately point out that "
ROME (Reuters) - Greece is not moving fast enough to draw up and implement structural reforms and there is limited time to prevent it running out of cash, European Commission Vice President Valdis Dombrovskis said on Monday.
Last week we saw another 10MB massive crude oil build domestically at a time when US production is flattening, refinery capacity is rising and gasoline demand is growing (5% year over year vs. 3% or lower in the recent past). This divergence can be explained in part from the rising import of heavier oil which accounted for 6.1MB (869,000 B/D) of the 10MB build last week. Imports for the week rose a whopping 6.5% sequentially and 8.5% vs. the 4 week moving average! Once again the chase to create sensationalistic headlines to drive down oil is self-evident as US production rose a meager 14,000B/D and was not the main cause of the rise. So why, month after month since 2014, have imports risen when there exists a "glut" in US oil inventories?
In 2014 according to the EIA, API Gravity (the weight of oil) steadily increased and rose 2.84% which is very significant in adding to the oversupply of US oil. In January 2015 that number rose to nearly 3.1% year over year, according to the latest data point we have from the EIA. Given the recent surge in imports last week the bet it has risen even more.
Source: EIA (Click Image To Enlarge)
Imports generally have a higher API vs. US lighter produced oil. If refinery capacity is skewed towards processing heavy imported oil vs. lighter US produced oil, as demand rises you will, as a result, be short heavy and lon ...
One of America's biggest banks is going to be protested by an unlikely group today: its employees. As The Guardian reports, Wells Fargo bankers are protesting the bank's alleged predatory practices - mainly the sales quotas imposed on some of its workers (which have led to at least 30 employees opening duplicate accounts, sometimes without customers' knowledge, in order to inflate their sales numbers). One worker warns, "it is not in Wells Fargo's best interest for customers to purchase products and services they don't use or need." Now where have we seen this kind of activity before? Wells Fargo bank workers are not the only ones struggling to make ends meet without breaking ethical standards as bank tellers have collected as much as $105m in food stamps.
"Basically, what I do all day is look at people's bank statements," said Michael Lewis, 46, who works as a financial crime specialist at Wells Fargo in Chandler, Arizona... "I have kind of an unique experience knowing how America spends its money and knowing how broke everyone is."
As The Guardian reports, the quotas, first exposed in a lawsuit filed by a long-term Wells Fargo customer, David Douglas, have led to at least 30 employees opening duplicate accounts, sometimes without customers' knowledge, in order to inflate their sales numbers. The ...
Update: as always is the case in Europe, nothing is confirmed until it is officially denied by officials, so here you go: GREEK GOVT OFFICIAL DENIES FT REPORT GREECE PLANNING DEFAULT
There was no explanation from the government official where Greece would get the â‚¬2.5 billion it needs to fund upcoming IMF interest and principal payments.
* * *
It should hardly come as a surprise that after the latest round of Greek pre-negotiation negotiations with the Troika, in which the Greek representative was said to behave like a taxi driver, who "just asked where the money was and insisted his country would soon be bankrupt" and in which the Eurozone members "were disappointed and shocked at Athens' lack of movement in its plans, and in particular its reluctance to talk about cutting civil servants' pensions" that the next Greek step is to fall back - yet again - to square zero: threats of an imminent default. Which is precisely what, according to the FT, has happened "Greece is preparing to take the dramatic step of declaring a debt default unless it can reach a deal with its international creditors by the end of April, according to people briefed on the radical leftist government's thinking."
A word of advice: now that the Eurozone, foolishly, thinks it is insulated from the consequences of a Grexit due to the ECB's QE, it does not take to ultimatums or blackmail very well. In fact, it takes these very badly.
In any event, here again is the same old song, sung one more time,
SAN FRANCISCO (Reuters) - San Francisco-based startup Planet Labs, a company that aims to blanket the skies with low-cost satellites, has raised nearly $140 million from investors that include Russian billionaire Yuri Milner and SpaceX backer Draper Fisher Jurvetson. Now, the company has raised an additional $20 million from an unlikely contender: the venture arm of the International Finance Corporation, a multilateral lending organization that's part of the World Bank.
FRANKFURT (Reuters) - Deutsche Bank's management board aims to decide on its future business model next week and present its strategy at an extraordinary meeting of its supervisory board on April 24, Handelsblatt newspaper reported on Monday without citing sources.
Any year in which two of the best performing hedge funds are two of our old-time favorites, the aptly named Keynes Leveraged Quantitative Strategies and even more aptly named Tulip Trend Fund, you know is going to be one of "those" years. Only this time joining them at the top after the first quarter is also the Russian Prosperity Fund, while making an unexpected and welcome appearance in the top 10 is none other than everyone's favorite outspoken, if rather timid in recent years, scot: Hugh Hendry's Eclectica, which has returned 14% YTD.
Here are the best performing hedge fund indices according to BofA: up top YTD are the CTAs returing over 6% while at the bottom continue to be Market Neutral funds who are barely above 1%.
HF performance down by strategy:
And here are the top marquee hedge fund names broken down by performance on a March/MTD basis...
SAN FRANCISCO (Reuters) - Federal Reserve policymakers should not read too much into financial market prices to glean the views of investors on interest rates or inflation because prices are hard to decipher, according to research released Monday by the San Francisco Fed.
Who could have seen that coming? With Treasury yields pressing lows of the day since the US open, and AAPL in the red; the stop-hunt in stocks this morning is now starting to fade back into reality as Crude oil prices gave up gains and went red and reports appear that Greece is preparing to default... The Dow and S&P are now red on the day.
And so, from the dormant volcano that is American politics, out flies Hillary, like Rodan the Flying Reptile pretending to be Granny Goose. Now that she is officially flapping around the electorate, the excitable mainstream press reports the initial caw-caw-cawing of her campaign: it will be "based on diversity, discipline and humbleness." These are endearing qualities in any giant flying reptile, and reassuring to voters who might otherwise fear something a bit darker on the wing.
The Elmer Fudd in the piece at the moment, former Maryland Governor Martin O'Malley, did get off a clever first shot at the flying behemoth when he cracked that "the presidency of the United States is not some crown to be passed between two families," but it seems to have only provoked a deeper show of humility from the target. She'll be starting a "listening campaign" to detect rustles of discontent as she banks over the cornfields of Iowa cawing platitudes across the sky, e.g. "Americans have fought their way back from tough economic times."
Point of fact: no they haven't. They are still strewn over the landscape with the economic equivalent of sucking chest wounds, but perhaps a few of them have noticed with vicarious satisfaction the astounding rise of the S & P stock index as they lie in a roadside ditch scanning the skies. It must give them some comfort as their lights go out. Just maybe, their children will also have the chance to become Goldman Sachs employees as history marches on. The flying reptile wants to be their champion! She wants to earn their votes — the old fashioned way, by purchasing as much TV air-time as possible to put across the illusion of ...
NEW YORK (Reuters) - Crude futures edged up but relinquished early gains and briefly turned lower in choppy trading on Monday as a global supply glut continues to cap gains and traders took profits after oil's earlier push higher.
As the "revolver raids" gather steam and as the market prepares to digest what are likely to be a slew of writedowns as Q1 earnings begin to come in, the BTFD-ers of the world are keen on picking a bottom for crude. Unfortunately, the "crude" reality (to use a pun that becomes more of a cliche with each day that oil prices remain in the doldrums) is that a number of factors will likely conspire to keep prices depressed, not the least of which is storage capacity, something we've covered extensively and something which, geopolitical shocks notwithstanding, is likely to weigh on prices for the foreseeable future. Here, courtesy of Citi are all the visuals you need to comprehend the crude storage conundrum.
Already at record levels, US storage capacity may be tested in 2Q as production shows no signs of slowing yet. Prices should bottom if capacity limits are reached, then recover but in previous episodes such as shale gas when the market has expected the US to hit a wall, it hasn't. Any price recovery will likely be short lived as higher prices should re-start shale drilling, once again increasing supply and sending prices back downâ€¦
US crude oil mid-continent inventories are expected to draw down mildly from May to August, and the next problem could well arise come fall when refinery maintenance begins with seasonally highest level stocksâ€¦
And by autumn, the US Gulf Coast could also see storage constraints when refiners go into what could be deeper and lon ...
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