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15Jul2015 Market Close: Markets Closed Flat, Oil Fell To A Three Month Low And The Beige Book Is Mostly Positive

Written by Gary

Some trading was modestly profitable, but much of today's session was just plain boring. Volume was sometimes anemic, mostly low as the markets opened flat and closed flat with the exception of $RUT which was seriously in the red all day. Hard to tell but it appears that WTI oil prices sank to a fresh three-month low, closing below its support and that is bearish for the equities.

Oil apparently fell on concerns that the global glut of crude oil is being processed into a glut of refined products.

Todays S&P 500 Chart

The Federal Reserve's Beige Book said the U.S. economy continued to expand at a modest to moderate pace across all of its 12 districts. The central bank noted that low energy prices helped boost spending in some districts, while the strong dollar continued to weigh on others. Additionally, the Fed noted employment levels either held steady or increased in most sectors, though layoffs were reported in manufacturing and energy industries.

The Market in Perspective

Here are the headlines moving the markets.

Wall St. down slightly; energy decline outweighs financials' gain

(Reuters) - U.S. stocks edged lower on Wednesday in the wake of comments from Federal Reserve Chair Janet Yellen, as a decline in energy shares outweighed gains in the financial sector.

BofA profit soars as costs fall to lowest since 2008

(Reuters) - Bank of America Corp , the No. 2 U.S. bank by assets, reported its biggest quarterly profit in nearly four years as expenses fell to their lowest since the financial crisis.

July 2015 Beige Book: Economy Continues to Grow (No Relative Words On Rate of Growth Provided)

Econintersect: The consolidated economic report from the 12 Federal Reserve Districts (Beige Book) said that "economic activity expanded from mid-May through June". The previous report said "overall economic activity expanded during the reporting period from early April to late May". It is hard to tell if overall growth rate went up or down - and the usefullness of the Beige Book is diminished when the Fed does not "guess" whether there was a change in the rate of growth.

Yellen stands by Fed's transparency as lawmakers turn up heat

WASHINGTON (Reuters) - Federal Reserve Chair Janet Yellen on Wednesday resisted calls for more congressional oversight, as members of a House of Representatives panel criticized the central bank's policies and pressed it to be more accountable.

General Mills hopes natural ingredients will boost U.S. cereal sales

NEW YORK (Reuters) - By removing artificial colors and flavors and selling gluten-free cereals, General Mills Inc Chief Executive Officer Ken Powell is betting his company can buck a broader decline in U.S. cereal sales.

Economic Confidence Hovers Near 8-Month Lows, Majority See Things Getting Worse

With Small Business Optimism cratering to 15 month lows and CFO's skepticism at 2 year lows, it is no surprise that 'average joe' is also feeling a little less confident (despite the exuberance in equity markets). Gallup's U.S. Economic Confidence Index registered at -11 this week, which marked an eight-month low for the index. While current conditions are weak, more worryingly, the economic outlook has tumbled to its lowest since October with 56% of Americans saying "the economy is getting worse."

The weekly index made significant gains in the latter half of 2014, coincident with the decline in gas prices, and peaked in January at +5. Since then, scores have generally declined, with the latest figures representing the index's lowest since late October.

The economic outlook score was also unchanged, at -16, the result of 40% of Americans saying the economy is "getting better," while 56% said it is "getting worse."

Delta Air beats second-quarter profit estimates, expects unit revenue drop

(Reuters) - Delta Air Lines Inc on Wednesday reported that second-quarter profit jumped 85 percent, topping expectations, but forecast a third-quarter drop in unit revenue as the carrier continued to see weaker demand abroad due to the strong U.S. dollar.

U.S. producer inflation firming; industrial output rises

WASHINGTON (Reuters) - U.S. producer prices increased more than expected in June as the cost of gasoline and a range of other goods rose, indicating the recent oil-driven downward spiral in prices was abating.

Reluctant Tsipras fights to pass reforms in Greek parliament

ATHENS (Reuters) - Prime Minister Alexis Tsipras fought to contain a backlash from his own leftwing party on Wednesday as parliament prepared to vote on a sweeping austerity package European partners have demanded for a new bailout to keep Greece in the euro.

"The Stock Market Is Too Important To Leave To The Vagaries Of An Actual Market"

Submitted by Babar Rafique of Setter Capital,

As equity markets have become increasingly critical to the global financial and economic system, we're actively subverting them into meaninglessness.

Equity markets are efficient, rational, and accurately reflect the value of assets, we're told. Sure, there might be bouts of euphoria or panicked selling, but those are short-term anomalies in an otherwise rational system.

The simplicity of this idea is undeniably appealing -- if we can trust in markets to broadly be an efficient allocator of value and accurately representative of short-term economic potential, then we can use it for a range of economic decision-making. An investor who wants exposure to a particular country can buy ETFs linked to that country's stock market(s), for example, with the confidence that the investment outcome will bear a meaningful relationship with that of the economy invested in.

This requires, of course, that the price numbers on global stock indices mean something. The trouble is, to an increasing degree, they mean nothing at all. And we are busy creating more meaningless stock markets precisely because we need the ticker numbers to be more and more meaningful.

The equity market is a leading indicator for an economy, we're told, and from TV talking-heads to academics to wealth managers, we all conduct ourselves as if that's the case. A rising stock market thus means that confidence is improving and economic performance should shortly be rising as well. By that measure, the US economy should be doing fantastically well, matching or at least meaningfully correlated with the eye-popping performance of its major stock indices since 2008. Unfortunately, that's just not the ...

Ex-Libor trader says made mistakes in interviews with investigators

LONDON (Reuters) - Tom Hayes, a former trader on trial on Libor manipulation charges, told a London court on Wednesday he had made mistakes and "educated guesses" during interviews with investigators while he was cooperating with Britain's Serious Fraud Office (SFO) in 2013.

Traders pounce as doubts grow about Halliburton-Baker Hughes deal

(Reuters) - Growing doubts that regulators may not approve Halliburton Co's $35-billion takeover of fellow oilfield services company Baker Hughes Inc this year has thrown up a high-reward opportunity for investors with an appetite for risk.

One Of These Things Is Not Like The Other

US equities are exuberantly holding on to their 2-3% gains this week following the "Greek deal" - which is falling apart. Treasury yields have collapsed from kneejerk swings. Greek stocks have plunged since the agreement.. and the Euro has nosedived. Who is right?

Charts: Bloomberg

Macy's Shares Jump on Starboard Investment

The activist investor Jeffrey Smith told an investing conference that he liked the retail chain in part for the value of the properties it owns.

U.S. Stocks Drift as Big Banks Report Solid Results

Investors assessed deal news and comments from Janet L. Yellen, the Fed chairwoman. Bank of America's second quarter beat Wall Street expectations.

Amazon Lands Spike Lee's â€'Chi-Raq' as Its First Original Movie

The film, about gun violence in Chicago, was acquired by Amazon Studios, which hopes to create a dozen movies a year.

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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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