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29Apr2015 Market Update: Averages Off 1% Ahead Of Fed Meeting, Oil Reserves Lower Than Expected, Prices Climb

Written by Gary

According to some analysts stocks slipped today after data showed that economic growth braked more sharply than expected in the first quarter, and ahead of the U.S. Federal Reserve's likely decision to maintain historically low interest rates. Big news is that oil reserves are not a full as expected pushing oil prices higher and the averages are down on moderate volume.

DOW is off triple digits, small caps off one percent ahead of the Fed meeting, however this may be a taste of things to come.

Here is the current market situation from CNN Money

Traders Corner - Health of the Market

Index Description Current Value Members Sentiment: % Bullish (the balance is Bearish) 60%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 59
Investors Intelligence sets the breath Above 50 bullish 62.0% Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. +6.09 NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 64.81% NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 67.18% S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 72.40% 10 Year Treasury Note Yield Index ($TNX) ten year note index value 20.67 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 75.94 NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 11,125

What Is Moving the Markets

Here are the headlines moving the markets. reports:

  • To put to rest any semblance of speculation, market hasn't been pricing in a June rate hike since the Fed's March 18 meeting.
  • Any talk of Fed raising rates in June is NOT market-borne; it's been driven by media and subjective economists' estimates.
  • Fed futures contract implied probability still showing December 2015/January 2016 as most likely periods for Fed's first rate hike.

McDonald's tests custom burger program with drive-thru option

LOS ANGELES (Reuters) - McDonald's Corp , working to revive sales in an era of mounting fast-food competition, is testing "TasteCrafted," a more modest version of a new custom sandwich program that will cost franchisees less to install and can be offered through drive-thru windows, an analyst said on Wednesday.

The oils went skyhigh into the mid 59's on the news below and the U.S. dollar sank into the high 94's reported this morning financial's. The first column is what was reported this morning. The second is what was expected and the third column is the last report.

The Financial Markets Now Control Everything

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

The entire economic and political structure is now dependent in one way or another on the continued expansion of financial markets.

The financial markets don't just dominate the economy--they now control everything. In 1999, the BBC broadcast a 4-part documentary by Adam Curtis, The Mayfair Set ( Episode 1: "Who Pays Wins" 58 minutes), that explored the way financial markets have come to dominate not just the economy but the political process and society. In effect, politicians now look to the markets for policy guidance, and any market turbulence now causes governments to quickly amend their policies to "rescue" the all-important markets from instability. This is a global trend that has gathered momentum since the program was broadcast in 1999, as The Global Financial Meltdown of 2008-09 greatly reinforced the dominance of markets. It's not just banks that have become too big to fail; the markets themselves are now too influential and big to fail. Curtis focuses considerable attention on the way in which seemingly "good" financial entities such as pension funds actively enabled the "bad" corporate raiders of the 1980s by purchasing the high-yield junk bonds the raiders used to finance their asset-stripping ventures. This increasing dependence of "good" entities on players makin ...

Greece prepares reform bill, lenders seek concessions

ATHENS/BRUSSELS (Reuters) - Euro zone officials sought to wring policy concessions from Greece on Wednesday to unlock urgently needed aid after Athens said it would present a list of reforms for legislation to show it is serious about implementing its promises.

GoPro Doesn't Look Down

Action-camera maker GoPro is upping the ante with its outlook.

Wall St. falls as economic growth stalls; Fed meeting eyed

(Reuters) - Stocks slipped on Wednesday after data showed that economic growth braked more sharply than expected in the first quarter, and ahead of the U.S. Federal Reserve's likely decision to maintain historically low interest rates.

Turner, HBO drive Time Warner revenue beat

(Reuters) - Time Warner Inc reported a better-than-expected 4.8 percent rise in first-quarter revenue, boosted by its Turner division and Home Box Office network.

NSA Whistleblower: "We Are No Longer Afraid Of The Police State Happening. It's Here"

First Bill Binney - the high-level NSA executive who created the agency's mass surveillance program for digital information, the 32-year NSA veteran widely who was the senior technical director within the agency and managed thousands of NSA employees - told Washington's Blog that America has already become a police state.

Then Thomas Drake - one of the top NSA executives, and Senior Change Leader within the NSA - told us the same thing.

Now Kirk Wiebe - a 32-year NSA veteran who received the Director CIA's Meritorious Unit Award and the NSA's Meritorious Civilian Service Award - agrees (tweet via Jesselyn Radack, attorney for many national security whistleblowers, herself a Department of Justice whistleblower):

#Wiebe: we are no longer afraid of the police state happening. It's here. In small ways and big ways.

It's not just NSA officials ... Two former U.S. Supreme Court Justices have warned that America is sliding into tyranny. A former

To Commerzbank, German Bunds Are "Flash Crashing"

As first Bill Gross and then Jeff Gundlach suggest shorting German bonds, so it appears the message has sunk in that at 4.9bps 10 days ago, 10Y Bund yields were the short of a lifetime. Since then they have soared, with a dramatic doubling today from 14bps to over 29bps - the highest yield in 7 weeks. As Commerzbank warns, "a cascade of small events is creating a large splash in a structurally ever-thinner market," which has led to a plunge "similar to US Treasury flash crash of Oct. 15."

Yields are crashing higher...Doubled in a day!

And prices therefore lower...

As Commerzbank's Christoph Rieger, head of fixed-rate strategy, explained,

A cascade of small events is creating a large splash in a structurally ever-thinner market.

Cites among factors behind sellof ...

Volkswagen's Overhaul May Not Upgrade Profit Engine

Hopes that Volkswagen will focus more on profitability following board upheaval may be too optimistic, with potential improvements already priced into the stock.

Twitter's growth seen hinging on luring advertisers

(Reuters) - Twitter Inc's slowing revenue and user growth has raised further doubts about its ability to entice advertisers to spend more on its platform - at least in the near term.

The Great Unwind Begins: US Dollar Plunges To 2-Month Lows

Just when you thought it was safe to pile all your money (at maximum leverage) into USD-denominated assets, the greenback plunges... The last 4 days have seen the 2nd biggest drop in 6 years. This has very significant consequences for a world that has become entirely consensus-based across at least 5 major themes... This poses a problem for talking-heads: if USD strength as indicative of US economic strength... what does a plunging USD imply?

The Strong Dollar regime has changed...

This suggests the huge consensus trades surrounding the inexorable USD strengthening are all in trouble also...

Charts: Bloomberg and Cornerstone Macro

U.S. economy nearly stalls in first-quarter as weather, lower energy prices bite

WASHINGTON (Reuters) - U.S. economic growth braked more sharply than expected in the first quarter as harsh weather dampened consumer spending and energy companies struggling with low prices slashed spending, but there are signs activity is picking up.

Time, and oil prices, ticking for Shell-BG deal

LONDON (Reuters) - Rising oil prices are putting Royal Dutch Shell under pressure to execute its landmark $70 billion deal to buy rival BG as soon as possible before investors in BG start to take a more critical look at the terms.

March 2015 Pending Home Sales Index Again Improves

Written by Steven Hansen

The National Association of Realtors (NAR) seasonally adjusted pending home sales index again improved and remains deeply in expansion. Our analysis of pending home sales agrees - and we are projecting a relatively good month for existing home sales in April 2015.

Read more ...

Crude Spikes After First Cushing Inventory Draw Since November

For the first time since November 2014, Cushing saw an inventory decline (-514k) last week. This has promopted a spike up to yesterday's highs in WTI Crude. The total inventgory build was 1.9mm bbl (less than the expected 3.2mm bbl) but continues the record streak to 16 weeks.

Cushing "Draw"...

But total inventories rose for the 16th week in a row...

WTI shot up to run yesterday's stops near $58...

Charts: Bloomberg

The Harsh Winter Actually Boosted The US Economy In Q1, As Did Obamacare

Even as the rest of the US economy was a major disaster with the clear exception of inventory accumulation, which at some point will have to be sold unleashing the next deflationary wave and forcing the Fed's helicopter to finally take off, another question is what happened to the US consumer: after all, in the US one can use Amazon in the comfort of one's snowed in home, and while the crash in oil turned out to be unambiguously bad (just as we warned) for CapEx, some 70% of the US economy was and is in the hands of the relentless spending habits of Joe Sixpack.

Which is why a quick look at what said Joe spent in the harsh winter reveals something stunning: no, not that the most consumed "service" was again healthcare - mandatory spending on Obamacare will be with us for a long, long time, "boosting" the US economy by this mandatory spending item.

No, what surprised even us is that far from subtracting from GDP growth, the harsh winter actually boosted consumption, in the form of Utility (i.e., heating) spending, which made up the second largest increase in personal consumption in the first quarter. Because, to every economist's cries of horror, freezing weather while perhaps reducing discretionary spending actually boosts spending on such mundane, if very expensive, tasks as utilities which, to the same economists, also translates into growth.

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