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15Apr2015 Market Update: Markets Opened Higher, Intel Posts Higher, Industrial Production Recorded Largest Drop

Written by Gary

Intel and CSX reported results that pleased the markets, and oil prices were on the rise as the equities volumes fall.

U.S. stocks opened higher this morning as expected, with Intel Corp leading the advance a day after the chipmaker gave a reassuring revenue outlook.

Industrial production recorded its biggest drop in more than 2-1/2 years in March, weighed down by a decline in mining and utilities output, fresh evidence that economic growth slowed sharply in the first quarter.


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 0.87% while U.S.'s S&P 500 is up 0.55% and Mexico's IPC is up 0.51%.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 59%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 57
Investors Intelligence sets the breath Above 50 bullish 61.1%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. +14.68
StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 62.12%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 67.03%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 73.20%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 18.85
StockChart.com 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 76.50
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 11,165

What Is Moving the Markets

Here are the headlines moving the markets.

Wall St. Rises as Investors Assess Earnings

Intel and CSX reported results that pleased the markets, and oil prices were on the rise.

Home builder sentiment rises to 2015 peak: NAHB

NEW YORK (Reuters) - Homebuilder sentiment reversed a three-month slide in April and rose to its best monthly showing of 2015, the National Association of Home Builders said on Wednesday.

ECB committed to full QE program, sees stronger recovery

FRANKFURT (Reuters) - The European Central Bank has no plans to curb or curtail its money-printing program although it expects euro zone economic recovery to broaden and strengthen.

Bank of America profit beats expectations as legal expenses fall

(Reuters) - Bank of America Corp, the No. 2 U.S. bank by assets, reported a better-than-expected first-quarter profit, reversing from a year-earlier loss, as legal costs fell steeply and the bank earned more from mortgage lending.

The Changing World of Work 3: "Full-Stack" Skills

Submitted by Charles Hugh-Smith of OfTwoMinds blog, (Part 1 and Part 2 here)

More important than being a full-stack employee is owning a full stack of skills.

My longtime friend G.F.B. sent me an article on the emerging value of tech-savvy generalists: The full-stack employee by Chris Messina:
Nearly two years after I left Google, I'm starting to understand what's going on in the professional sphere. The conventional seams between disciplines are fraying, and the set of skills necessary to succeed are broader and more nebulous than they've been before. These days, you've gotta be a real polymath to get ahead; you've got to be a full-stack employee.
If you have a low tolerance (as I do) for breathless techno-buzzword dropping--worked at Google, UI, CSV file, Kickstarter, social apps, Vine, self-promotion, always-on connectedness, blah blah blah--you will have to shoulder through the techno-hip chatter.
(Is there no inoculation against peppering content with these cliches? If email is dead, please tell that to the 16,000 non-spam emails that pile up on my server every year.)
But the core point of the essay is worth ...

Wall St. opens up; Intel rallies on outlook

NEW YORK (Reuters) - U.S. stocks opened higher on Wednesday, with Intel Corp leading the advance a day after the chipmaker gave a reassuring revenue outlook.

March 2015 Industrial Production: Another Weak Report

Written by Steven Hansen

The headlines say seasonally adjusted Industrial Production (IP) declined. The manufacturing portion of this index did improve insignificantly - but the other portions of industrial production declined. This is another weak report, and again under expectations.

EU charges Google in Internet search anti-trust case

BRUSSELS (Reuters) - The European Union accused Google Inc on Wednesday of cheating competitors by distorting Internet search results to favor its shopping service, and launched another antitrust investigation into its Android mobile operating system.

Fed's Bullard repeats view of hiking 'now', cites asset bubble risk

WASHINGTON (Reuters) - Falling unemployment and an improving U.S. economy are evidence that the Federal Reserve should start raising interest rates, a top Fed official said on Wednesday, citing risks of asset bubbles if the central bank keeps rates too low for too long.

US Industrial Production Plunges By Most Since Aug 2012, Utility Output Drops Most In 9 Years

Mortgage Apps tumble, Empire Fed slumps, and now Industrial Production plunges... Against expectations of a 0.3% drop MoM, US Factory Output was twice as bad at -0.6% - the worst since August 2012 (and lamost worst since June 2009). This is the 4th miss in a row. What is even more stunning is that despite the coldest of cold winters that crashed the US economy, Utilities saw their output crash 5.9% - the most in 9 years (explained as follows - largely reversing a similarly-sized increase in February, which was related to unseasonably cold temperatures). Motor Vehicles saved the data from being a catastrophe with a 3.2% rise (following a 3.6% drop In Feb).

Not a pretty picture...

With Utilities output dropping by the most since 2006...

Charts: Bloomberg

In China, Weak Growth Is Expected to Push Beijing into Action

The country will probably cut interest rates and encourage banks to increase lending, after the pace of economic expansion was its slowest in six years.

Industrial output falls on mining, utilities

WASHINGTON (Reuters) - Industrial production recorded its biggest drop in more than 2-1/2 years in March, weighed down by a decline in mining and utilities output, fresh evidence that economic growth slowed sharply in the first quarter.

Weakest Chinese Economy In 6 Years Sends WTI Crude Surging To Highest Since Dec 2014

So the Chinese economy is weakest in 6 years, there is a record inventory, near-record production, and record drop in rig count... and now WTI Crude has surged to its highest since Dec 2014 (running stops above last week's highs).

WTI highest since Dec 2014

Which all started after Chinese data hit...

Charts: Bloomberg

Toyota ends expansion freeze with new plants in Mexico, China

TOKYO (Reuters) - Toyota Motor Corp announced plans for new factories in Mexico and China on Wednesday, ending a self-imposed expansion freeze to fend off rivals racing to overtake it as the world's top-selling automaker.

German FinMin Schaeuble Sees "No Contagion" From Grexit, Don't Show Him This Chart

Because all that matters is what some elite says, we are sure the following propaganda from German FinMin Schaeuble will be regurgitated by the mainstream media:


*SCHAEUBLE SAYS "YOU CAN'T SEE ANY CONTAGION"

However, if one actually looks at the data - European peripheral bond risk premia have soared in the last week as Grexit fears resurge.

Charts: Bloomberg

Martin Armstrong - Gold Bullion To "Max Out At $5,000 Per Ounce"

Martin Armstrong - Gold Bullion To "Max Out At $5,000 Per Ounce"

- Fall 2015 turning point - civil unrest and riots globally says forecaster Armstrong
- Fed have to raise rates - due to pressure from congress and media
- By 2020 the cost of servicing U.S. debt will outpace defence spending
- European banks will collapse and "blood in the streets"
- Higher rates will also devastate emerging markets who have issued dollar-based debt
- Gold to "max out at $5000 per ounce"
- Advocates diversification and holding bullion coins familiar to public such as $20 gold coins
- "Your portfolio has got to include everything … including bullion"

Renowned financial analysts and trends forecaster Martin Armstrong has said that gold will "probably max out at $5,000 per ounce" as "people lose confidence in government" and that we will see riots and unrest globally in the coming months - the fall of this year.

It a very interesting interview with Greg Hunter of the excellent USAWatchdog.com, Armstrong says:

"Gold rises when people lose confidence in government. It has nothing to do with inflation. So, when you start to worry about government is not going to survive or who's going to win, that's when gold rises. Short term, we still have the risk of it going under $1,000 per ounce. It's going to flip when everything is righ ...

E.C.B. Says Bond Buying Is Making Its Mark and Leaves Rates Steady

The central bank president, Mario Draghi, was interrupted in his remarks by a protester who tossed confetti and yelled "end E.C.B. dictatorship."

ECB President Mario Draghi Attacked By Protester Screaming "End ECB Dick-tatorship"

It was bound to happen sooner or later: moments ago Mario Draghi was attacked by what appears to be a female (non-Greek) protester screaming "End ECB Dick-tatorship" while delivering his prepared remarks.

April 2015 Empire State Manufacturing Index Now Showing Manufacturing Contraction

Written by Steven Hansen

The Empire State Manufacturing Survey declined from last month and is now in contraction. Key internals are also in contraction.

April Empire Fed Manufacturing Plunges, New Orders Crash To Jan 2013 Lows

But it's April... the weather-bounce is supposed to be here. Empire Fed Manufacturing tumbled to -1.2 in April (missing expectations of a post-weather-bounce to 7.17) from 6.9 in March. Across the board the report was painful as Prices Paid surged, employment plunged, and work hours tumbled. Hope rermains as the business outlook improved (but even there capex and new orders were weak) New Orders stood out as it crashed to its lowest since Jan 2013. It appears there is more afoot than just weather...

No Weather Bounce!!

As New Orders collapsed...

Charts: Bloomberg

All or nothing gives way to new deal for fund 'star' wantaways

LONDON (Reuters) - After watching billions of dollars of investor cash follow "star" managers exiting rivals, some Britain-based fund firms have taken a novel step to help cushion the blow: let the manager take their fund's assets with them.

Euro zone downbeat on chances of Greek deal next week

BERLIN/ATHENS (Reuters) - The euro zone is doubtful that a deal will be struck with Greece next week on economic reforms for bailout funds, potentially leaving the country perilously short of money.

Greek Bonds Tumble, Yield Highest In 2 Years On Report Germany Prepares For Greek Default

When everyone begins to draw up the contingency plans you know the end may well be nigh.

Just two days ago FT reported that the Greek government â€" which has reportedly resorted to "acting like a taxi driver" when it comes to asking for money from creditors â€" has "come to the end of road" and is prepared to declare a default on its debt to the IMF (so no gas for Kiev?) if no agreement is struck between Syriza and the people who are not to be called "the troika" by the end of this month. Of course, Athens denied the "rumor," without explaining how it planned to find enough money to make good on its obligations coming due in May.

As FT noted, "a default would almost certainly lead to the suspension of emergency European Central Bank liquidity assistance for the Greek financial sector, the closure of Greek banks, capital controls and wider economic instability." Couple this with unpaid pensions and salaries and you have the recipe for what we'll call a "domestic issue" and by that we mean a popular uprising. In what may be an early attempt to head off (or at least ameliorate) such a scenario, Germany is reportedly prepping a plan to support Greek banks in the event Greece does in fact take the plunge.

From Die Zeit (via Google translate):

[Berlin] is working on a plan that would allow it to keep Greece in the case of a sove ...

Abu Dhabi's Etihad Airways CEO warns Europeans against protectionism

ABU DHABI (Reuters) - The boss of Abu Dhabi's Etihad Airways has warned Europe that it will suffer if it restricts the access of foreign carriers to its market, in a fresh effort by fast-growing Gulf airlines to head off what they see as Western protectionism.

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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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