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23Jul2015 Market Update: Oil Takes A Plunge, DOW Off Triple Digits, Disappointing Results From Bellwether Equities

Written by Gary

Oil has plunged this morning taking the averages with it and now are trading quietly in a sideways fashion. Wall Street fell for the third straight day, with the DOW off triple digits after disappointing results from bellwethers such as 3M and Caterpillar.


Here is the current market situation from CNN Money

North and South American markets are mixed today. The S&P 500 is up 25.09% while the IPC gains 0.01%. The Bovespa is off 2.19%.

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 20%
Investors Intelligence sets the breath Above 50 bullish 46.4%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. -8.87
StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 43.75%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 52.31%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 54.80%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 22.84
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 79.09
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10,845

What Is Moving the Markets

Here are the headlines moving the markets.

American Express, 3M Weigh on Dow Industrials

The Dow Jones Industrial Average slipped Thursday following disappointing earnings reports from a handful of big U.S. companies.

Japan's Nikkei buys Financial Times in $1.3 billion deal

LONDON (Reuters) - Japanese media group Nikkei agreed on Thursday to buy the Financial Times from Britain's Pearson in a $1.3 billion deal that brings together two leading financial news operations from Europe and Asia.

Wall Street slumps for third day as earnings disappoint

(Reuters) - Wall Street fell for the third straight day, with the Dow Jones industrial average lower for the year after disappointing results from bellwethers such as 3M and Caterpillar .

The Hunt For The "Mystery" Gold "Bear Raid" Leader Begins

In the immediate aftermath of Sunday night's massive gold slam, which was oddly reminiscent of the great silver crash of 2011 when on May 1 just around 6:25pm, silver plunged by 15%, from $48 to $42 with no news or catalyst...

... marking the all time high price of silver in the current precious metals cycle (that particular 'malicious seller' has never been identified) the promptly arranged narrative was that because the gold crash took place in the span of 30 seconds just before Chinese stocks opened and broke the gold futures market not once but twice, that it has to be a China-based seller with Reuters taking the lead and quickly pointing the finger with an article titled "Gold hits five-year low, under $1,100 on Chinese selling."

Ironically, the very

Ford, UAW, formally begin labor talks; jobs to Mexico at issue

DETROIT (Reuters) - Leaders of the United Auto Workers union and Ford Motor Co started talks on a new labor contract on Thursday, with the specter of jobs fleeing to Mexico hanging over the proceedings.

How a Chinese Firm Slipped on Canada's Oil Sands

Chinese oil firm Cnooc bought Canada's Nexen in 2013 for global reach. Now Nexen's poor productivity and a July spill place it high among soured bets by China's state-controlled oil companies.

GM earnings more than doubles on U.S. truck demand; shares jump

DETROIT (Reuters) - General Motors Co shares surged in premarket trading Thursday after the automaker reported adjusted net income that more than doubled in the second quarter, driven by North American truck sales and continued strength in China.

Luxury sportscar maker Ferrari files for New York listing

MILAN (Reuters) - Italian sportscar maker Ferrari has taken a step closer to a stock market listing in New York, as its parent Fiat Chrysler Automobiles (FCA) seeks to boost its own coffers to fund an ambitious 48 billion euro ($53 billion)investment plan.

Nikkei to Buy Financial Times in $1.3 Billion Deal

The sale of the FT Group to the Japanese media company comes after the financial newspaper's British owner, Pearson, decided to focus on its growing education business.

Central Banks Have Shot Their Wad - Why The Casino Is In For A Rude Awakening, Part I

Submitted by David Stockman via Contra Corner blog,

There has been a lot of chatter in recent days about the plunge in commodity prices - capped off by this week's slide of the Bloomberg commodity index to levels not seen since 2002. That epochal development is captured in the chart below, but most of the media gumming about the rapidly accelerating "commodity crunch" misses the essential point.

To wit, the central banks of the world have shot their wad. Accordingly, the 12-year round trip depicted in the chart is not about the end of some nebulous "commodity supercycle" that arrived from out of the blue after the turn of the century. Nor, most certainly, is it evidence of the Keynesians' purported global shortage of "aggregate demand" that can be remedied by an even more extended spree of central bank monetary stimulus.

No, the Bloomberg Commodity index is a slow motion screen shot depicting the massive intrusion of worldwide central bankers into the global economic and financial system. Their unprecedented spree of money printing took the aggregate global central bank balance sheet from $3 trillion to $22 trillion over the last 15 years.

The consequence was a deep and systematic falsification of financial prices on a planet-wide scale. This unprecedented monetary shock generated a double-pumped economic boom—-first in the form of an artificial debt-fueled consumption spree and then a sequel of massive malinvestment.

Now comes the deflationary aftermath. Soon there will follow a plunge in corporate profits and collapsing prices among the vastly inflated ri ...

Kansas City Fed: Manufacturing Contraction Continues in July 2015

Of the three regional manufacturing surveys released to date for July, two show weak manufacturing growth and one is in contraction.

Vedanta Doesn't Have to Be Too Sweet on Cairn

Talk is rising that Vedanta Ltd. may be forced to up its offer for Cairn India, though perhaps not as much as Cairn India shareholders hope.

Commodity Carnage Continues - Copper Crashes To 6 Year Lows

Across the board commodities are weak again today as CCFD unwinds and mal-investment booms collapse across the world. Copper is under the most pressure today, plunging to its lowest since June 2009... but of course, Dr.Copper now knows nothing about economics because eyeballs trump reality in the new normal...

In July, things are not going well...

Smashing copper to its lowest since June 2009...

Ignore this chart... it's different this time

And meanwhile, Goldman has turned decisively bearish with a forecast that's some 30% below consensus as macro and micro factors conspire to create a veritable perfect storm:

Though we have been bearish on copper on a 12-mo forward basis for the past two and a half years, we have maintained a more bullish medium to long-term stance on the assumption of Chinese copper demand growth of 4% per annum and a major slowing in supply growt ...

Wall St. Turns Lower as Earnings Roll In

Shares of General Motors and Southwest Airlines rose after the companies reported strong results, but Union Pacific stock dropped because of poor earnings.

U.S. Jobless Claims Drop to 41-Year Low

The number of Americans filing new applications for unemployment benefits last week fell to its lowest level since November 1973.

U.S. jobless claims lowest since 1973; leading index rises

WASHINGTON (Reuters) - The number of Americans filing new applications for unemployment benefits last week dropped to its lowest level in more than 41-1/2 years, suggesting the labor market maintained a sturdy pace of job growth in July.

Dow Dumps 350 Points From Monday Highs, Nears Crucial Support Level

US equity prices are back below yesterday's lows leaving The Dow down over 350 points off its "everything is awesome" highs on Monday (nearing its 200-DMA at 17,743). It's not just the Dow, as the rest of the major indices have given up all the post-Greferendum gains from a month ago...

Nearing its 200-DMA...

Leaving stocks giving up their Greece is good gains...

Charts: Bloomberg

Regional Bank SunTrust Makes Silicon Valley Push

SunTrust is breaking into Silicon Valley, where investment banking is largely dominated by big Wall Street banks and boutiques focused on technology or media, not regional commercial banks.

Dow Chemical warns of softness in China, shares fall

(Reuters) - Dow Chemical Co warned of soft demand in China, raising concerns that the largest U.S. chemical maker by revenue would not be able to maintain its growth rate in the key market.

Has The Land War Begun: Turkish Tanks Are Firing Into Syria

After Monday's tragic terrorist attack in the Turkish town of Suruc, just across from the Syrian border and kilometers away from ISIS-controlled Kobani, which left dozens dead in what authorities claim was due to an ISIS-linked 20 yhear old suicide bomber, hostilities have dramatically escalated in the past few days culminating with news that one Turkish soldier killed and one was wounded in border province of Kilis by gunfire from Syria, according to state-run Anadolu Agency reports.

According to the Guardian, "one Turkish solider has been killed and another wounded in clashes with Islamic State across the Syrian border, a senior Turkish official said. The clashes continued as the Turkish army returned fire on the militants in Syria. Earlier, a Turkish police officer was shot and killed and a second wounded in the mainly Kurdish city of Diyarbakir. Violence along Turkey's 560-mile (900km) border with Syria has spiked in recent days, beginning with a suicide bombing blamed on Isis in the town of Suruç on Monday. The Diyarbakir shooting came a day after two police officers were killed in an attack in Ceylanpinar on the Syrian border claimed by militants from the Kurdistan Workers Party (PKK)"

Bloomberg added that Turkish forces returned fire across the border, killing an Islamic State militant, and thatt clashes across border region continue, Anadolu says in story published at 5:08pm Istanbul time.

Then DHA reported moments ago, that Turkish Armed Forces have begun shooting into Syrian terri ...

Apple Watch Debut Exhibits Familiar Path to Success

Some technology pundits declared the device a flop, but Apple has a history of using incremental improvements to make its products indispensable.

Coca-Cola Profit Up 19%, Despite Lower Sales

The company attributed its higher earnings in part to strong growth in sales of small and "specialty" packages like eight-ounce cans.

Diesel Prices Tank Amid Global Glut

Pump prices are cheaper than regular gasoline in 21 states.

"No Longer Confined To The Lunatic Fringe": SocGen Admits Markets Are Completely Manipulated

Perhaps the most interesting thing about China's "unprecedented" plunge protection efforts - which, as we outlined on Wednesday, have succeeded in making China Securities Finance Corp. a top-10 shareholder in at least eight firms - is that in some ways, they aren't "unprecedented" at all. That is, while some of what we've seen out of Beijing over the past month - notably the sweeping trading halts and the Politburo agitprop campaign aimed at "malicious" foreign short sellers - was more overt than what we might expect to see in more "developed' markets, there's certainly nothing terribly unusual about a central bank propping up equities.

After all, the BoJ is well on its way to cornering the ETF market in Japan and, as a matter of policy, steps in to support Japanese stocks when sentiment appears weak, while the SNB has amassed a stock portfolio worth nearly $100 billion. As for the US, well, we've made no secret of our feelings about the slightly more than arms-length arrangement between the NY Fed and Citadel.

Meanwhile, US corporate management teams are also in the business of propping up stocks as buybacks have served to replace the monthly flow lost to the taper.

Considering the above, one is certainly left to believe that the term "market" may have lost all meaning in the seven years since the crisis. Here with a rather shockingly honest lament on manipulated markets, the disappearance of Benjamin Graham's "voting machine", and perhaps most importantly, ...

Greece faces recession warning as bailout talks set to open

ATHENS (Reuters) - Greece's most influential think tank warned on Thursday of a sharp drop back into recession in a report that came hours after parliament approved a second package of reform measures aimed at securing a new bailout from international lenders.

WTI Crude Tumbles To $48 Handle, Energy Stocks At Dec 2012 Lows

WTI gave up earlier gains and is tumbling once again to 4-month lows, back into the $48 handle range... S&P Energy stocks are now back at Dec 2012 levels.

Smashing stocks back to Dec 2012 lows...

As Fwd P/Es collapse back to reality...

Charts: bloomberg

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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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