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30Apr2015 Market Update: Volatile Markets Provide Action For Traders, Not So Much For Investors, DOW Down Triple Digits

Written by Gary

Midday market action is volatile, in the red but going nowhere with wide sea-saw swings that can only be appreciated by the traders in the crowd. The same can be said about the oils and the U.S. Dollar; gold just fell 20 points and is trading sideways. DOW is down triple digits and the markets trend is down.

Sorry for the late review but our Comcast connection was down again.

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) 62%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 56
Investors Intelligence sets the breath Above 50 bullish 61.7% Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. -13.48 NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 64.07% NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 65.75% S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 69.20% 10 Year Treasury Note Yield Index ($TNX) ten year note index value 20.78 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 75.64 NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 11,089

What Is Moving the Markets

Here are the headlines moving the markets.

Berkshire Prepares for Life Without Buffett

For years, Warren Buffett has elicited both admiration and envy for the deals he has pulled off, but a related question has long weighed on Berkshire investors' minds: What happens when he is gone?

U.S. Stocks Decline

U.S. stocks fell Thursday, as mixed economic readings offered further signs that the U.S. economy has hit a rough patch.

Exxon profit slips but beats forecasts on refining, output

(Reuters) - Exxon Mobil Corp's first-quarter profit dropped less than expected in results posted on Thursday as margins at the refining unit of the world's largest publicly traded oil company surged on tumbling crude prices.

Greece signals concessions in crunch talks with lenders

ATHENS (Reuters) - Greece's government signaled the biggest concessions so far as crunch talks with lenders on a cash-for-reforms package started in earnest on Thursday, but tried to assure leftist supporters it had not abandoned its anti-austerity principles.

N.Y. Fed's Sarah Dahlgren to Resign as Head of Supervision

Sarah Dahlgren will resign as the New York Fed's head of supervision Oct. 1 but will stay on as an adviser to President William Dudley through year's end.

Wall Street Pushes Back on Foreign Bribery Probe

Banks are embroiled in a dispute with the U.S. government over what they term its "aggressive" interpretation of foreign-bribery laws. The probe has broad implications for how corporations do business overseas.

When Will Apple Stop Screwing The US Economy?

Submitted by Andrew Zatlin via Moneyball Economics,

Ty Cobb was a famous baseball player. Infamous, really. He set 90 Major League baseball records, some of which continue today. He was skillful but also mean; he had a reputation for playing dirty. Cobb was known for spiking other players: sharpening his cleats and sliding into them. Nobody much liked playing against him.

Apple is the Ty Cobb of corporate America. Like Cobb, Apple has set some impressive records. Nine years, a trillion dollars in sales, and almost no taxes paid. Apple risks having a legacy of tainted success and isolation.

The Apple Way

There's a story I heard about electronics company Sharp. The company was about to go bankrupt and default on some major debt. This put Apple at risk, since Sharp was a major source of Apple's LCD screens. The story goes that rather than come to Sharp's aid, Apple instead approached the bankers and offered to buy the factory assets after bankruptcy - for pennies on the dollar of course. Talk about kicking someone when they're down! True or not, when I share that story with others who have dealt with Apple, they shrug their shoulders and say that they aren't surprised. That's the Apple way.

Business is not a popularity contest, but when the winner-take-all, cripple-the-other-guy approach goes too far and begins to damage the economy, it's time to rein things in.

The issue at hand is the way Apple's relentless greed has undermined the US economy and damaged its future industrial competitiveness. All so Apple can make $5 more per phone.

After oil and cars, smartphones are the US' biggest import. Almost $100B of phones was imported in 2014 (per the Census Bureau). Hal ...

CRC bullish on long-term prospects of Monterey Shale: CEO

NEW YORK (Reuters) - California Resources Corp expects that, as oil prices recover, technology may enable extraction of Monterey Shale reserves previously thought to be unrecoverable, the company's chief executive said this week.

Wall St falls on mixed economic data; Apple weighs

(Reuters) - Wall Street was lower in midday trading on Thursday as Apple weighed on major indexes and investors digested a mixed batch of economic data.

NY Fed Head Of Banking Supervision, And Person Who Handed Over Billions In AIG Profits To Goldman, Resigns

The name Sarah Dalgren is well-known to long-term Zero Hedge readers: back in January 2010 we revealed that, just before the Great US banking system backdoor bailout by way of getting a par return on AIG CDS, back in August 2008 Goldman was willing to tear up AIG Derivative Contracts, and had in fact offered to take a haircut. It was the Fed who turned Goldman's offer down! And the person who made the decision would become the Fed's head of Special Investments [AIG] Management Group: Sarah Dahlgren.

We said that Dahlgren "not only did not save US taxpayers' money, but in fact ended up costing money, when they funded the marginal difference between par (the make whole price given to all AIG counterparties after AIG was told to back off in its negotiations) and whatever discount would have been applicable to the contract tear down that had been proposed by Goldman a mere month earlier. This, more so than anything presented up to now, is the true scandal behind the New York Fed's involvement."

In other words, Sarah not only did Goldman a huge favor, but in effect made sure that Goldman Sachs would make a massive profit on what would end up being the world's biggest bailout program and the launch of a series of QE4 program that have led to the destruction of the US middle class.

Obviously, in exchange for her action giving Goldman shareholders billions in undeserved rewards, she was promptly promoted to the role of executive vice president and head of the Financial Institution Supervision Group (FISG), aka the head of Bank Supervision at the NY Fed, a bank which a ...

GM to invest $5.4 billion in U.S. plants over next three years

DETROIT (Reuters) - General Motors Co said on Thursday it will spend $5.4 billion over the next three years on its U.S. manufacturing plants to boost production and vehicle quality.

Exclusive: Pfizer is mystery bidder for rare disease drugmaker Sobi - sources

NEW YORK/LONDON (Reuters) - Pfizer Inc is the mystery bidder for Swedish Orphan Biovitrum AB , the rare disease specialist which disclosed this week that a potential buyer had made a preliminary offer, people with knowledge of the situation said.

U.S. data suggest economy picking up steam after weak first-quarter

WASHINGTON (Reuters) - The number of Americans filing new claims for jobless benefits tumbled to a 15-year low last week and consumer spending rose in March, signs the economy was regaining momentum after stumbling badly in the first quarter.

Europe's Investment Banking Changes Don't Stick to Script

European banks including BNP Paribas, Deutsche Bank and Credit Suisse have reported a good first quarter in trading, helped by fixed-income. For some of them, that doesn't look part of the plan.

Nokia's network profits drop, raise concerns over Alcatel deal

HELSINKI/PARIS (Reuters) - Finland's Nokia reported quarterly profits well below market forecasts at its telecom network equipment business, sending its stock tumbling 10 percent and raising concerns over its planned takeover of smaller rival Alcatel-Lucent .

Albert Edwards On What Happens Next: "More QE - Everywhere!"

Overnight the Bank of Japan disappointed liquidity addicts everywhere when instead of boosting its QE by a modest JPY 10 trillion (why not: it already monetizes 100% of net issuance, what is another 15%, or 50%, or more?), it did nothing, sending the JPY briefly higher, until the GPIF came right along and proceed to sell a few yards, buy USD and then go ahead and buy more stocks.

But even more disappointing for liquidity addicts was that, as Goldman put it, the BOJ "unexpectedly, the BOJ significantly rolled back timeframe to achieve 2% inflation." This is what Goldman said:

For us, the biggest surprise in today's Outlook Report was that the BOJ rolled back the timing for achieving 2% inflation to "around the first half of fiscal 2016" (ie, end of September 2016), from "in or around fiscal 2015". We had expected the bank to hold off revising its target timing until the July interim assessment on the grounds that rolling back the timing just as the new fiscal year had begun was not desirable from the standpoint of potentially fostering expectations for inflation.

Governor Kuroda repeatedly mentioned that the underlying inflation trend is one of improvement, based on the oil price, which is tracing an upward path as envisaged by the bank since the January interim outlook, developments in output gap and inflation expectations, and observations on this year's spring wage negotiations. Furthermore, Governor Kuroda reiterated that he has no intention to change the bank's "commitment to achieve 2% inflation in 2 years time". These messages are clearly inconsistent with today's BOJ decision to roll back the timing of attaining 2% inflation. Our reading of the situation is that, due to a lack of confidence in inflation developments going forward, the BOJ has decided to buy itself additional ti ...

Wall St. Is Lower, With Weak Earnings as Anchor

Nokia, Harman International and Yelp all reported results that disappointed investors.

Exxon Mobil and Shell Earnings Reflect Oil Prices' Plunge

Both companies reported huge drops in profit: a 46 percent decline at Exxon and a 56 percent drop at Shell.

Time Warner Cable Results Fall Short of Predictions

First-quarter earnings were reported a week after Comcast abandoned its planned takeover of Time Warner Cable

Exclusive: EU regulators to clear Orange deal to buy Jazztel - sources

BRUSSELS/MADRID (Reuters) - French telecoms group Orange is set to secure European Union approval for its 3.4-billion-euro ($3.79 billion) deal to acquire Spanish fixed line network operator Jazztel after offering to strengthen rivals in Spain, four people familiar with the matter said on Thursday.

Did The Japanese Just Save The World Again?

Suddenly, and with no catalyst whatsoever, "someone" decided to sell JPY, buy EUR and USD and aggressively bid for US equities and European peripheral bonds... just as they headed for an ugly day... Paging GPIF?

We assume this means The Fed (or Citadel) will be buying NKY futures following that index's biggest drop in 3 months overnight... you keep my market afloat and I'll keep yours alive... quid pro quo.

We Are Witnessing A Fundamental Change In The Oil Sector

Submitted by Arthur Berman via,

The U.S. oil production decline has begun.

It is not because of decreased rig count. It is because cash flow at current oil prices is too low to complete most wells being drilled.

The implications are profound. Production will decline by several hundred thousand barrels per day before the effect of reduced rig count is fully seen. Unless oil prices rebound above $75 or $85 per barrel, the rig count won't matter because there will not be enough money to complete more wells than are being completed today.

Tight oil production in the Eagle Ford, Bakken and Permian basin plays declined approximately 111,000 barrels of oil per day in January. These declines are part of a systematic decrease in the number of new producing wells added since oil prices fell below $90 per barrel in October 2014 (Figure 1).


Figure 1. Eagle Ford, Bakken and Permian basin new producing wells by month. Source: Drilling Info and Labyrinth Consulting Services, Inc

(Click image to enlarge)

Deferred completions (drilled uncompleted wells) are not discretionary for most companies. Producers entered into long-term rig contracts assuming at least $90 oil prices. Lower prices result in substantially reduced cash flows. Capi ...

Kansas City Fed: Manufacturing Continues to Contract in April 2015

Of the five regional manufacturing surveys released to date for April, one shows weak manufacturing growth while four are in contraction.

Read more ...

Stocks Bubble Right As the Economy Rolls Over: Next Up the Bloodbath

The Fed's FOMC meeting over. The Fed has removed the word "patient" from its verbiage concerning future rate hikes, so traders will have to find some other minutia to obsess over.

Speaking of traders, Wall Street has tried desperately to gun the markets. Stocks have been in rising wedge pattern since November. Thus far Wall Street has failed to generate the desired breakout. And they are running out of time.

The old adage "sell in May and go away" has a kernel of truth to it. Historically, the period from May to November has been a very weak one for stocks. All traders and trading models know this. If they cannot mount a breakout to the upside for stocks in the next two weeks, intense selling pressure will commence.

One positive for the bulls is that both the S&P 500 and the NASDAQ managed to eek out new all time highs last week. Unfortunately, the last time this happened was 1999, right at the peak of the Tech Bubble. We all remember what came after that.

As far as the economy goes, Fed's own GDPNOW model shows the US economy growing a measly 0.1% in the first quarter of 2015. There will be loads of excuses ranging from the weather to who knows what, but the reality is that the Fed has failed miserably to generate any sustainable economic growth.

So... we have stocks bubbling right as they enter a seasonably weak period as the economy is rolling over. None of these things bodes well for the market. We believe stocks are actually putting in ...

G.M. to Invest $5.4 Billion to Modernize Factories

The company has been methodically upgrading and expanding its manufacturing plants in the United States and elsewhere since its bankruptcy in 2009.

Deal questions loom as Time Warner Cable reports subscriber uptick

(Reuters) - Time Warner Cable Inc on Thursday reported a bigger-than-expected rise in video subscriptions for the first quarter but gave no indication of any merger deals after Comcast Corp withdrew its bid to buy the company.

The Swiss National Bank Is Long $100 Billion In Stocks, Reports Record Loss

When the Swiss National Bank revealed its long awaited Q1 financials earlier today, everyone was eagerly looking at the number showing just how massive the quarterly P&L loss would be to the central bank following its shocking decision from January 15 to remove its EURCHF 1.20 floor, which sent the CHF soaring and by implication caused huge losses to the mostly EUR-denominated SNB assets.

The loss was indeed, massive, coming in at CHF 29.3 billion, or $32 billion.

This was the biggest quarterly loss for the Swiss central bank to date, dwarfing that of CHF18.5 billion incurred in the second quarter of 2013, when the price of gold plummeted, and certainly one of the biggest central bank losses in history, if of course, the others tracked their P&L the way the SNB does.

This is how the SNB described its loss:

The Swiss National Bank (SNB) reports a loss of CHF 30.0 billion for the first quarter of 2015.

The loss on foreign currency positions amounted to CHF 29.3 billion. A valuation loss of CHF 1.0 billion was recorded on the gold holdings.

The SNB's financial result depends largely on developments in the gold, foreign exchange and capital markets. Strong fluctuations are therefore to be expected, and only provisional conclusions are possible as regards the annual result.

Loss on foreign currency positions

The negative result on foreign currency positions amounted to CHF 29.3 billion in total.

On 15 January 2015, the SNB decided to discontinue the minimum exchange rate of CHF 1.20 per euro with immediate effect. This led to an appreciation of the ...

One Heckuva Bull Market

Submitted by Erico Matias Tavares via Sinclair & Co.,

The current equities bull run seems unstoppable. No amount of geopolitical concerns, Greek default fears, rate hikes, US dollar strength, crude oil price volatility, Russian sanctions or whatever else you can think of can put a dent on it.

We got a little cautious in mid-February given some pretty significant divergences with key market internals and credit indicators. For instance the advance-decline line (cumulative weekly up issues minus down issues in NYSE and NASDAQ combined) was suggesting caution, as it lagged the market in making new highs. Since then the S&P 500 advanced a paltry 0.9%, with the Dow Jones Industrial basically flat; the Russell 2000 and NASDAQ were a bit perkier, increasing 2.5% and 3.4%, respectively.

All that churning now seems to be getting resolved to the upside, particularly if we use the advance-line as (an imperfect) leading indicator once again. This is shown in the graph below.

Weekly S&P 500 Index (LHS) and Advance-Decline Line (blue, RHS):
30 May 13 - 24 Apr 15

In fact, in its latest push the NASDAQ broke to new all-time highs - the only major US equity index which had not done so - surpassing the "bubblelitious" peak of 2000. Momentum and break ...

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