U.S. markets opened low and climbed close to the unchanged line before sliding down again. Oil is seriously testing its support, gold has stopped its fall for now but were on track for their 10th straight day of losses and the U.S. dollar is trending up again. Short term indicators modestly bearish as the averages trend fractionally downward.
Here is the current market situation from CNN Money
$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.
I realized that our mentally-challenged, differently-abled bullish friends will refuse to accept it for a long, long time, but their welfare-sponsored bull-run ended last December. The breakdown has been subtle since then, and the Silicon Valley stocks that are keeping my house valued at preposterous levels just keep shooting higher (GOOGL, etc.)
But the cold fact of the matter is that there's rot beneath the surface, and the failure of JNK today - - a chart I've been watching with great zeal and interest - - seals the deal. A major bear market truly has started, and we're going to see the fraud from the past six years unwind in a glorious, albeit inconsistent, fashion.
Despite the absence of bad weather, good weather, port strikes, and snow, The National Retail Federation today slashed its retail sales forecast for 2015 from 4.1% growth to just 3.5%. Sales grew at a 2.9% pace in the first half of 2015 and hope remains that the next 5 months show growth of 3.7% (with same store sales growth revised lower). The excuse reason for this markdown..."spending has been hampered by lackluster growth in our economy. Much of that blame can be shifted to Washington where too much time has been spent crafting rules and regulations that almost guarantee negative consequences for consumers and American businesses alike."
As The NRF details,
The National Retail Federation today lowered its retail sales forecast for 2015 because of unexpected slow growth recorded during the first half of the year, similar to the industry's experience in 2014. However, NRF expects sales will steadily increase through the remainder of the year. NRF forecasted in February that retail sales would grow 4.1 percent in 2015 over 2014, but today's revision lowers the forecast to 3.5 percent.
"A confluence of events, including treacherous weather throughout the United States through most of the winter, issues at the West Coast ports, a stronger U.S. do ...
The US Treasury sold $25 billion of one-year T-bills at an interest rate of 33bps yesterday, the highest since June 2010. It appears the short-end of the yield curve is increasingly pricing in 'liftoff' sooner rather than later (and the long-end is responding by rallying - lower in yield - as medium term growth expectations fade) but it raises significant questions about the economic trajectory after the hike (and the ebbing confidence in The Fed).
This makes sense, given the majority now forecast a rate hike in September...
Which raises the question - if everyone expects rates to go up 25bps in September and 1Y bills are at 33bps... is it one-and-done for The Fed as the market is pricing a return to economic weakness?
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
This seemingly inexhaustible credit line is now drying up, with severely negative consequences for oil producers with debt that's coming due.
Could the oil patch bust triggered by oil plummeting from $100/barrel to $50/barrel kick the U.S. into recession? Longtime correspondent B.C. recently observed: The question is whether the incipient recession in the energy and energy-related transport sectors is sufficient this time around to be the proximate cause of a US/global recession and real estate bust.
To help answer the question, B.C. sent this FRED chart of key measures of economic activity in Texas, America's GDP and industrial production and the price of oil. The chart may look busy but the key indicators are oil (the blue line that fell off a cliff and has formed a fish hook), the red line (GDP adjusted for inflation, i.e. real GDP), the dotted line (industrial production) and the remaining two lines that reflect the leading indicators and economic activity in Texas.
Six months into the energy bust, the leading index for Texas has hit the zero line, U.S. industrial production has rolled over but real GDP hasn't budged. So far, the impact of dramatically lower oil revenues has been limited to the oil patch, but the potential for contagion is still present.
As B.C. noted:
The last time the energy sector experienced a similar bust as is emerging today and clearly evident in Texas was in 1985-86, which occurred coincident with the crash in the price of oil and the onset of the S&L Cr ...
The headlines for existing home sales claim "Buyers have come back in force, leading to the strongest past two months in sales since early 2007". Our analysis of the unadjusted data shows that home sales did rebound - but that the rolling averages did not improve. Overall, existing home sales appear to continue in the long term improvement trend channel..
Following yesterdsy's API data, DOE has confirmed a 2.5 million barrel build in crude inventory - the highest stocks of crude at this time of year in at least 80 years. This was accompanied by a very small drop in production and has squeezed WTI back below $50 (although there was an algo flash-smash up to $50.50 right after the data).
Crude inventories rose by the most in 3 months...
US EIA: REPEATS CRUDE STOCKS HIGHEST IN AT LEAST 80 YRS, RTRS
Starting Wednesday, Wall Street banks have to comply with perhaps the most significant new restriction on their activities since the aftermath of the Great Depression, but the change was greeted with a shrug.
Within 50 minutes of the US cash market open, the S&P 500 has been ridiculed all the way back to unchanged - erasing all the losses from tech titan turmoil overnight. The reason is simple! USDJPY was manhandled up to 124.00 just as we predicted... the question is - how much further will the BoJ push it?
with AAPL in major turmoil...
You'd think aggressive buyers/sellers in $AAPL would meeting in the middle and EXCHANGE stock pic.twitter.com/7DbaA2tmTJ
â€" Eric Scott Hunsader (@nanexllc) July 22, 2015
All because of the BoJ and USDJPY's ramp...
Who could have seen this farce coming...
Just another 15 USDJPY pips until green. You can do it Har-Kur
zerohedge (@zerohedge) July 22, 2015Another SDJPY ig ...
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