$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.
On Monday afternoon, news broke that the IMF looked to be splintering from the rest of the Troika over just what conditions must be met in order for Greece to receive a â‚¬7.2 billion tranche of aid the country desperately needs to pay salaries, pensions and, ironically, the IMF. According to FT, Christine Lagarde and company are set to demand that Athens' European creditors write-off enough of their Greek debt to bring the country's debt-to-GDP ratio down to a â€'sustainable' (whatever that means in the Greek context) level over the next several years. Otherwise, the organization argues, disbursing aid to Athens is equivalent to throwing money into a black hole, as the country's fiscal situation is still in dire need of reform.
Of course much of what Greece owes in May is due to the IMF itself and so, as we remarked yesterday, "Greeks are expected to smile and nod knowingly at this latest hollow IMF threat, in which it is now unclear if Lagarde is the Troika's good cop (demands a debt haircut) or bad cop (refuses to pay Greece any more)."
Today, we get yet another indication that negotiations are now not only complicated by Greece's unwillingness to cross Syriza's "red line" campaign promises, but by friction between the country's creditors who, in an irony of ironies, now appear to be at odds over their own set of "red lines."
More via Bloomberg:
EU, IMF failing to coordinate means compromise in Greek talks not possible, a Greek govt official says in e-mail.
A quick recap to the trade data released today shows a mixed picture. The general situation is that both imports and exports grew - but imports grew a lot more. The unadjusted value of imports three month rolling averages accelerating month-over-month, while exports decelerated. Many care about the trade balance (which was worse than last month and well above expectations), but trade balance simply has little correlation to economic activity. The growth in trade balance is a headwind to 1Q2015 GDP.
WASHINGTON (Reuters) - Netflix Inc officials urged the U.S. Federal Communications Commission to reject the pending $48 billion merger of AT&T Inc and DirecTV in a recent meeting, according to regulatory disclosures posted on Tuesday.
ATHENS/BRUSSELS (Reuters) - Greece stepped up diplomacy with euro zone partners on Tuesday to try to avert a potentially catastrophic funding crunch this month, when it must make a big debt repayment to the IMF as cash reserves dry up.
As many investors have found over the past year, the oil market is a tough nut to crack when it comes to predicting price moves.
For those seeking guidance from Saudi Arabia's oil minister, Ali al-Naimi, just follow his gaze to a higher authority. Asked by CNBC on Tuesday if there was a level for oil prices that would force the Saudis to cut production, he replied: "No one can set the price of oil — it's up to Allah."
As for the potential for supplies coming to the market from other countries, such as Iran, he held firm in refusing to talk about oil prices. "I'm not worried about Iran crude nor will I try to predict where the price is. If I were to predict, I would be somewhere else, gambling."
Oil prices surged after a protest in Libya shut down one of the nation's crude-export hubs and Saudi Arabia's national oil company raised prices for the U.S. and Europe, a bullish signal of strengthening demand.
The ISM non-manufacturing (aka ISM Services) index continues its growth cycle, and improved marginally from 56.5 to 57.8 (above 50 signals expansion). Important internals improved and remained in expansion. On the other hand, Market PMI Services Index was released this morning and declined.
The hope-strewn bounce in Services PMI over the last 3 months (despite collapsing macro data) has ended. Markit Services PMI dropped in April to 57.4, weakening notably from preliminary expectations of 57.8. Markit remains convinced that their survey implies 3% GDP growth and all is well in the world. ISM Services however smashed expectations, printing 57.8 vs 56.2, its highest since November - despite a plunge in new export orders into contraction.
The bounce is over...
Markit remains very upbeat though...
"Together with the expansion signalled by the manufacturing survey, the service sector PMI so far points to the economy growing at an annualized rate of 3% in the second quarter, representing a nice rebound from the first quarter's soft-patch.
"Hiring has also remained resilient, boding well for monthly non-farm payroll growth to return above 200,000.
"Price pressures have also ticked higher, suggesting we may see some further upwards pressure on core inflation in coming months."
David Einhorn, the famous billionaire hedge fund manager, just found his next target: U.S. onshore E&Ps or the oil fracking companies. He laid out his short thesis during the annual Sohn Investment Conference in New York. The share price of Pioneer Natural Resources (PXD), EOG Resources (EOG), Concho Resources (CXO), Continental Resources (CLR) and Whiting Petroleum (WLL) dropped just as he mentioned them in his speech at the conference .
He called shale oil fracking a "business that burns cash and doesn't grow anything." "The banks are clearly incentivized to help the frac-addicts" by financing "The most expensive method of extracting oil, the industry simply can't withstand lower oil prices". He specifically cited Pioneer Natural Resources as the 'Mother Fracker' (and EOG Resources, the 'Father Fracker', if you are wondering).
Hope springs eternal. The S&P Energy sector is surging once again this morning as crude prices top $60 with stocks now back at Nov 2014 levels (up 12% in the last month). What most do not realize as they blindly follow the momentum, excited that 'something is working' is that the valuations - based on analysts' forward earnings projections - have only been marginally higher than this once... right at the peak in 1999. The S&P Energy sector trades at a 28x Fwd P/E!
NEW YORK, (Reuters) - The pace of expansion in the U.S. services sector eased from a seven-month high in April on a dip in new business growth, but hiring in the sector accelerated to its highest since June, an industry report showed on Tuesday.
(Reuters) - Walt Disney Co's quarterly revenue beat analysts' expectations, helped by increased spending by visitors at its theme parks and higher ad sales and affiliate fees in the company's media networks business.
After the Saudis allegedly halted their air campaign against Yemen's Houthi rebels on April 21 (allegedly because it promptly resumed the very next day to almost no public announcement), the Yemen civil war and the "skirmishes" by Houthi rebels along the border with the world's biggest oil exporter were quickly forgotten. Until this morning, when the Saudi press and social media has been overrun with reports that the Saudi city of Najran was shelled by Houthi mortars, an attack which Saudi advisor to the armed forces Ahmed Asiri said "will not pass without a response".
From Al Riyadh, google translated:
Najran saw Tuesday afternoon fall of several mortar shells at different locations within the city, and according to sources RiyadhÂ, the number was 6 shells, targeting some civilian sites, government buildings and One landed on the housing guard compound for the memorization of the first Koran fifth Secondary School for Girls Schools hospitality district .
Riyadha» attended some of those sites to monitor these explosions that caused a power outage in a number of districts of Najran city, and met with some of the citizens who have expressed their support with the leadership to deter Alhothin and ousted president rebels, saying they will not be intimidated by such random shells, said the compound guard citizen Yahya Dahmha I was surprised by the fall of the shell at my house in the compound and praise be to Allah that the home and the sch ...
Submitted by Lance Roberts via STA Wealth Management,
Over the weekend, Sam Ro at Business Insider wrote "The Truth About 'Sell In May And Go Away'," stating:
"It's May. And one of the oldest 'rules' on Wall Street is 'sell in May and go away.'
Based on some rough historical observations, someone decided that it might be a great idea to stay out of the stock market between May and sometime in the fall. The truth is that the market doesn't tank during that period. Returns are just lackluster, not negative."
The article goes on to discuss analysis by FBN Securities' JC O'Hara who ran numbers for the past 20 years. In my opinion, twenty years of history is too short of a time-frame to properly analyze the historical tendencies of the markets particularly given the impact of Central Bank interventions over more than a quarter of that time frame.
Therefore, using the monthly data provided by Dr. Robert Shiller, let's take a look at the seasonally strong versus weak periods of the year going back to 1900. The table below, which provides the basis for the rest of this missive, is the monthly return data from 1900-presen ...
WASHINGTON (Reuters) - The U.S. trade deficit surged to its highest level in nearly 6-1/2 years in March as imports rebounded strongly after being held down by a labor dispute at key West Coast ports, suggesting the economy contracted in the first quarter.
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