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07May2015 Market Update: Averages Trending Fractionally Upwards As Oil And The U.S. Dollar Remain Quiet

Written by Gary

The averages have trended fractionally upwards as the dollar and oil have remained relatively quiet after choppy trading earlier in the morning session. Volume levels started out at moderate levels at the opening bell and have since trended down. The rise is being contributed to U.S. jobless claims coming in stronger-than-expected and technology stocks also rebounded.


Here is the current market situation from CNN Money

North and South American markets are mixed today. The S&P 500 is up 0.56% while the IPC gains 0.26%. The Bovespa is off 0.87%.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 69%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 52
Investors Intelligence sets the breath Above 50 bullish 57.7%
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.

-60.41

StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 57.40%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 62.08%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 64.80%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 22.00
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 75.85
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 11,042

What Is Moving the Markets

Here are the headlines moving the markets.

Blackstone raises $17 billion for global buyout fund: sources

(Reuters) - Blackstone Group LP has secured $17 billion from investors for its latest global private equity fund in just seven months, the biggest so-called first close of a buyout fund ever, according to people familiar with the matter.

Greece defies euro zone on pension, labor reform

ATHENS/BRUSSELS (Reuters) - Greece defied its international creditors on Thursday, refusing to cut pensions or ease layoffs to meet their demands, dimming prospects of progress next week toward securing desperately needed financial aid.

Wary of bond 'cliff,' Fed plans cautious cuts to portfolio

NEW YORK/SAN FRANCISCO (Reuters) - The Federal Reserve is sketching out plans to prevent an abrupt contraction in its massive balance sheet next year, when as much as $500 billion in bonds expire and risk disrupting markets and the U.S. economic recovery.

Airbus surges past Boeing in orders, lags in deliveries

PARIS/DUBAI (Reuters) - Airbus has moved ahead of U.S. rival Boeing in their race for aircraft orders thanks to a large Latin American win, setting the tone for what could be a fiercely competitive Paris Airshow next month.

Does Russia Really Own 20% Of The US' Uranium Reserves?

Submitted by Colin Chilcoat via OilPrice.com,

Yes, well, sort of - and they have for some time now. It's relatively old news, but a recent Times report and an upcoming book from the Hoover Institute's Peter Schweizer have refocused attention on a 2008 blockbuster uranium deal involving Russia, the United States, and a Canadian company Uranium One. Pushing connections and presidential candidacies aside - the Clintons' complicity is still very much speculation at this point - lets return to the deal and take a look at the US nuclear industry and, globally, the rise of Rosatom.

The saga begins in 2009 when, after roughly a year of negotiations, Russian state nuclear corporation Rosatom, acting though its subsidiary and Mining Division platform ARMZ, purchased a nearly 20 percent stake in Toronto-based Uranium One. The following year, ARMZ increased its stake to more than 51 percent - a deal that required Kazakh and Canadian regulatory approvals in addition to clearance by the US Committee on Foreign Investment. In 2013, ARMZ paid roughly $2.8 billion for the remaining 48 percent and full control of Uranium One. Finally, in that same year, Rosatom ass ...

Firms Vie to Set Up New Ways to Trade Treasurys

A host of companies are vying to set up new electronic networks for trading U.S. Treasurys, the latest upheaval in a $12.5 trillion market already being reshaped by some large banks' pullback and the growth of fast-trading firms.

U.S. Stocks Rebound

U.S. stocks rose Thursday, a day after they fell in the wake of the Federal Reserve chief's warning over high equity valuations.

BT's Retail Strategy Could Rattle U.K. Mobile Market

BT's quarterly earnings hinted at its strategic advantages in bundling mobile with other telecoms services at discounts that will be tough for rivals to replicate.

Europe's Big Bond Rally Evaporates

A weeklong selloff in European bonds has wiped out much of the price rally sparked by the European Central Bank's massive stimulus program.

Fed 'Liftoff' Won't Send Banks Into Orbit

Big-bank stocks may have to yield to the Federal Reserve's caution on interest-rate moves.

U.S. to Issue More Short-Term Debt

The U.S. Treasury Department said it plans to increase the supply of short-term debt, in a bid to ease investors' concerns about difficulty trading in global bond markets.

Citi, JPMorgan target market-share gains in equities

LONDON (Reuters) - U.S. banks Citigroup and JPMorgan Chase expect to gain market share in equities this year, executives told Reuters, pointing to technology investment and new hires as financial-market trading picks up.

Wall St. rises on positive jobs data; tech stocks rebound

(Reuters) - Wall Street rose in late morning on Thursday after choppy trading earlier in the session as U.S. jobless claims came in stronger-than-expected and technology stocks rebounded.

Prepare for 'triple taper tantrum' in 2016, says Morgan Stanley

LONDON (Reuters) - Investors spooked by the "taper tantrum" of 2013, when global markets took fright at the U.S. Federal Reserve's first hint that it might taper its monetary expansion policy, take note: 2016 could be the year of the "triple taper tantrum".

Bitcoin Exchange Receives First License in New York State

The exchange, itBit, said it was taking on customers after receiving a banking trust charter from Benjamin Lawsky, the state's financial regulator.

Guess Who Owns $1.1 Billion In Apple Stock

The Swiss National Bank had a rough quarter in Q1 as the decision to abandon the increasingly unsustainable EURCHF floor (an event which marked an implicit admission that central banks are not all-powerful after all) blew a $32 billion hole in the central bank's euro reserves. That, however, wasn't the most remarkable takeaway from the SNB's quarterly report.

More interesting than the massive loss was the line item in the SNB's balance sheet which shows that 18% of the bank's assets are held in foreign stocks.

As we noted last week, that amounts to around $100 billion â€" 15% of Switzerland's GDP â€" in equities. This prompted us to praise the bank for its sheer brazenness in owning up to its equity holdings in a world where all plunge-protection-providing central banks are buying stocks but in which no one dares to admit it.

Just what does the SNB hold in its $100 billion stock portfolio? Quite a lot, and more than one-third of its holdings are in US equities. More specifically, the bank owns some $37 billion worth of shares in 2,548 US-listed companies, up an impressive 40% Q/Q. Here are the top 20 holdings:

And here's a look at the Q/Q change (basic ...

Jobless claims hover near 15-year low, boost growth outlook

WASHINGTON (Reuters) - The number of Americans filing new claims for unemployment benefits held near a 15-year low last week in a sign that the labor market was strengthening despite moderate economic growth.

Banks Expected to Settle FX Probes

Citigroup, Barclays, J.P. Morgan Chase and Royal Bank of Scotland Group are expected to plead guilty to rigging foreign-currency exchange rates and pay billions in combined penalties as part of settlement agreements expected to be announced as early as next week.

Alibaba appoints new CEO as it reports strong fourth quarter

SHANGHAI/HONG KONG (Reuters) - Alibaba Group Holding Ltd named a new chief executive on Thursday, as the Chinese ecommerce group's blistering growth faces headwinds and less-lucrative mobile transactions surpassed those from personal computers for the first time.

The Texas Job Recession Is Now Literally "Off The Chart"

The paradoxical, utterly nonsensical "data" releases continue.

On one hand, the government's Department of Labor reported earlier today that in the past week just 265K people were laid off: the lowest number since early 2000. On the other, private data aggregator Challenger reported that in April, there were a whopping 61,582 job cuts, a 68% surge from March, and up 53% from a year ago. This was the highest monthly total since May 2012 and the highest April total since 2009!

Smoothing out the noise reveals that in the first 4 months of 2015, employers announced 201,796 planned job cuts, which marks a 25 percent increase from the 161,639 layoffs tracked in the first four months of 2014. This is the largest four-month total since 2010.

To say that something does not add up here between the public and private data releases is quite evident.

But while there may be massive confusion when it comes to the data propaganda and the clear agenda behind the seasonally-adjusted, policy-specific government data, there is no confusion when it comes to one thing: the job recession in Texas has not been this bad since the last of the second Great Depression.

Recall what we said last month when we "welcomed" Texas to the recession with some 47,043 layoffs through March:

... when broken down by state, things get bad for Texas, very bad. As in recession bad, because with 47K total layoffs, or 10K more than all energy-related layoffs, in just this one state so far in 2015, it means that the energy sector weak ...

SEC Wins With In-House Judges

The SEC prevails against around 90% of defendants when it sends enforcement cases to its administrative law judges rather than to federal courts.

Continental raises outlook as car markets recover

BERLIN (Reuters) - Germany's Continental has raised its profit and sales guidance as auto demand in core European markets keeps growing while raw material prices and the weak euro provide momentum.

What Happens When Trian Comes on Board

As activist investor Nelson Peltz battles for a board seat at DuPont, a look at his tenure at other companies showcases his style: dive into details and drive debate.

Bank Reserves & Loans: The Fed is Pushing On A String

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

The money multiplier effect no longer works.

As you (hopefully) know, we live in a fractional reserve banking system: if the bank is required to have $1 in cash reserves for every $10 in loans, it means the bank creates $10 of new money when it issues a $10 loan. When the $10 loan is paid off, that money vanishes from the system. The problem with fractional reserve lending is the leverage. A 10-to-1 reserve ratio means that if the bank issues a $10 loan, the borrower defaults and the borrower's collateral (home, auto, etc.) only fetches $8 on the open market, the bank lost $2, which is more than the bank's cash reserves ($1). At that point, the bank is insolvent, i,e, its losses exceed its assets. In credit bubbles, the reserve requirements may reach absurd levels of leverage. At a reserve ratio of 100-to-1, a $2 loss of value in a $100 loan will push the bank into insolvency, as it only held $1 in cash as reserves against the $100 loan. Reserve requirements and leverage are one set of constraints on new loans; the other constraint is the income, creditworthiness and willingness of the borrower.If households and businesses decide not to borrow more, regardless of the interest rate, then raising or lowering the reserve requirements will have no effect. This is where the Federal Reserve finds itself today. The Fed is anxious to spark more lending/borrowing, and i ...

MasterCard doubles card numbers in Middle East, Africa

(This story has been refiled to correct figure to 2.2 billion from 1.4 billion in second paragraph)

Dan Loeb Slams Buffett For Being Habitual Hypocrite

Last week, we highlighted the latest example of billionaire hypocrisy, as Bloomberg suggested that George Soros â€" who ostensibly believes higher taxes on the wealthy would be good for society and for the economy â€" may owe nearly $7 billion in taxes. Soros, Bloomberg said, has for years exploited a loophole that allows him to delay paying taxes on management fees which, when reinvested tax free, have helped his fund grow to six-and-a-half times what it would have grown to had taxes been paid on the fees when earned. On Wednesday, another billionaire was called out for being a hypocrite and this time it was a fellow billionaire doing the finger pointing.

In an interview at the SkyBridge Alternatives Conference yesterday, Dan Loeb â€" who no one ever accused of mincing words â€" committed what to many hero worshippers will likely be seen as financial market heresy by accusing Omaha's favorite octogenarian of habitual hypocrisy both in word and in deed. Here's more from NY Times:

Mr. Loeb, who runs the $17.4 billion hedge fund Third Point, told an audience of hedge fund faithful on Wednesday that Mr. Buffett "has a lot of wisdom, but I think we need to be aware of the disconnect between his wisdom and how he behaves."

He was taking aim at a public bet that Mr. Buffett made against the hedge fund industry, which Mr. Buffett believes cannot outperform the broader market and, specifically, the Standard & Poor's 500-stock index.

Speaking to shareholders at an annual ...

Shale Stocks Slammed As Crude Cracks Back Below $60

But just two days ago everything was awesome after the biggest inventory draw since 2014: Einhorn didn't know what he was talking about, the energy sector's 28x Fwd P/E was 'fine' and oil prices were on their way back to levels that save the US Shale industry... now, not so much...

Oil is not "up"...

Despite "commodity king" Gartman's insistence that Einhorn is "terribly terribly" wrong...

It seems maybe Einhorn was on to something after all... (remember all those talking heads decrying his comments?)

Charts: Bloomberg

Did The World's Central Banks Hit The Panic Button This Morning?

If there is one thing more worrisome for the world's central planners than a stock sell-off, it is a bond rout 'proving' that they have lost control. The overnight carnage across global bond markets appears to have triggered someone (or someones) to step in - in dramatic size - to rescue bonds and save the world once again.

Rescue Me!! (Futures prices)

And what that looked like for German Bund yields...

What is becoming increasingly clear to the central bankers, as we noted earlier, is that since the bond market is now massively illiquid and everyone is on the same side there is no way to orchestrated a controlled decline.

Be careful what you wish for, stock 'investors'.

Charts: @NanexLLC

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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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