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24Jul2015 Market Update: Gold And Global Markets Having An Off Day

Written by Gary

There is little good news today for any investment.


Here is the current market situation from CNN Money

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 72 %
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 12
Investors Intelligence sets the breath Above 50 bullish 45 %
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. -24
StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 41 %
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 51 %
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 54 %
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 2.27
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 61

What Is Moving the Markets

Here are the headlines moving the markets. xxxxxxxxxxx

Median Household Income Falls $371 But Not Statistically Significant in June 2015.

from Sentier Research

According to new data derived from the monthly Current Population Survey (CPS), median annual household income in June 2015 was $55,132. The apparent decrease in the median by $235 from May 2015 was not statistically significant. The Sentier Household Income Index for June 2015 was 96.2 (January 2000 = 100).

Clinton to Propose Doubling Capital Gains Tax Rate

Hillary Clinton will propose a sharp increase in the capital-gains tax rate for the highest earners for investments held only a few years.

Fed staff sees one U.S. rate hike this year, inflation stuck in low gear

WASHINGTON (Reuters) - Staff at the Federal Reserve board see a single quarter-point U.S. rate hike by year's end, inflation stuck in low gear for five more years, and an economy growing more slowly than expected by U.S. policymakers.

Nikkei's 'pink 'un' buy highlights need to escape greying Japan

HONG KONG (Reuters) - In splashing $1.3 billion for Britain's Financial Times, media group Nikkei is just the latest in a string of Japanese companies driven to look overseas to escape poor growth prospects from a rapidly aging domestic population.

Security worries delay start of Greece's new bailout talks

BRUSSELS/ATHENS (Reuters) - Talks on tying up a new bailout deal for Greece failed to start on Friday as had been expected, with officials blaming security worries for delaying the negotiations with international creditors who are detested by many Greeks.

New home sales at seven-month low; manufacturing stabilizes

WASHINGTON (Reuters) - New U.S. single-family home sales fell in June to their lowest level in seven months and May's sales were revised sharply lower, in what appeared to be a minor setback for the housing market recovery.

Fed Accidentally Released Confidential Staff Forecasts, Blames "Glitch"

First The 'unaudited' Fed leaks its FOMC minutes. Then they leak 'inside-information' to Nikkei's latest addition, Medley Global advisors (and remain "above the law" with regard consequences. And now, The Fed admits it leaked full blown confidential economic projections (due to a code glitch)... strongly suggesting rate hikes are coming soon.

As Bloomberg notes,



*FED SAYS IT INADVERTENTLY RELEASED STAFF ECONOMIC PROJECTIONS

*FED SAYS PROJECTIONS POSTED TO PUBLIC WEBSITE ON JUNE 29

The leaked projections were...



*FED STAFF PROECTIONS SHOW YEAR-END FED FUNDS OF 0.35% 2015

*FED STAFF PROJECTIONS SEE FED FUNDS AT 1.26% 4Q 2016

*FED STAFF PROJECTIONS SEE GDP 2.31% 2015, 2.38% 2016

The reason for the leak - simple - same as every other leak - a technical glitch...

Economic projections prepared by Federal Reserve Board staff as background for the June 16-17, 2015, meeting of the Federal Open Market Committee (FOMC) were inadvertently included in a computer file posted to the Board's public website on June 29. Because the information has already been released, the Federal Reserve is today providing general public notification and making ...

Fiat Chrysler U.S. to Recall Vehicles to Prevent Hacking

The company is recalling about 1.4 million vehicles in the United States to update software for radios to prevent hacking.

Gold Extends Rout as Dollar Strengthens

Gold prices fell on Friday, extending their five-year low, and silver neared a six-year low as a stronger dollar and expectations for higher interest rates in the U.S. spurred investor exit from precious metals.

Wall Street lower amid mixed earnings, fall in commodities

(Reuters) - Wall Street was lower in late morning trading on Friday for the fourth straight day after a mixed bag of earnings from big companies and the downward spiral of commodities.

Fiat Chrysler US to recall vehicles to prevent hacking

(Reuters) - Automaker FCA US LLC, formerly Chrysler Group LLC, is recalling about 1.4 million vehicles in the United States to update software for radios to prevent hacking.

Jim Grant On Gold's Liquidation Sale: A "Vexing But Wonderful Opportunity"

Via Valuewalk,

Don't tell Jim Grant, the publisher of Grant's Interest Rate Observer, that gold is a hedge.

The author and publisher said the metal is much more dynamic; providing a trifecta of price, value and sentiment, and investors should have exposure to it.

"[G]old is an investment in monetary and financial disorder - not a hedge. You look around the world and you see exchange rates are properly disorderly, when you look around the world of lending and borrowing -- we are in a regime of price control by another name, so-called zero percent rates and quantitative easing by the world central banks - we are in one of the most radical periods of monetary experimentation in the annals of money," Grant told Kitco News Thursday.

Grant added that it could be that it all works out, albeit a very "low probability."

"You want to have exposure to the reciprocal asset of the paper assets that are the most popular - so gold, to me, is now the conjunction of price, value and sentiment, and I am very bullish indeed."

Gold prices are on track for its longest run of losses since 1996. After reaching five-year lows this week, the metal was relatively quieter on Thursday with prices slightly rebounding on some bargain hunting in the spot market. Kitco's spot gold was last up $0.60 at $1094.60 an ounce.

Grant summed up the gold selloff as "Mr. Market having a sa ...

Boeing looks at pricey titanium in bid to stem 787 losses

SEATTLE (Reuters) - Boeing Co , which loses about $23 million on every 787 Dreamliner passenger jet that leaves the factory, is trying to stem the losses by cutting the use of one of its signature ingredients: titanium.

U.S. investigating possible price-gouging by four U.S. airlines

WASHINGTON (Reuters) - U.S. authorities are investigating possible price gouging by four American airlines while train service was disabled between New York and Washington after a deadly Amtrak crash in Philadelphia in May, the Transportation Department said on Friday.

U.S. Stocks Down as Biotech Drags

U.S. stock indexes fall as investors dump shares of biotechnology companies after disappointing results from Biogen.

American Airlines Beats 2Q Profit Forecasts

Dramatically cheaper jet fuel helped American Airlines nearly double its second-quarter profit to $1.7 billion despite lower revenue.

On the Runway: Converse Dares to Introduce the Chuck Taylor II

Tweaking an icon is always a dangerous move, just consider the branding controversies surrounding New Coke, or even Saint Laurent.

June 2015 Coincident Indicator Trends Show Flat to Declining Rate of Growth

The year-over-year rate of growth of the US Coincident Index declined marginally. A comparison of US Coincident Index, Aruoba-Diebold-Scotti business conditions index, Conference Board's Coincident Index, ECRI's USCI (U.S. Coincident Index), and Chicago Fed National Activity Index (CFNAI) coincident indicators follows. In general, most coincident indices are showing constant to declining rate of growth.

Presenting The "Glamour" Bubble In All Its Glory

There are those who say that the second coming of the tech bubble "is different." And perhaps, if only in the realm of semantics, it is. Which is why Bank of America has a more digestible term for the new bubble: it is not so much pure tech as "glamour" a concept which consists of "Internet Software, Biotech and Computers & Peripherals."

But nowhere is this new "glamour" bubble more visible than in the divergence between these "sexy" names built up on nothing but hype, or as David Einhorn would call them "story" stocks, and good old "resource" companies: those engaging in such "old economy" activities as energy and materials.

One dramatic representation of the "glamour" bubble at least as opposed to "old economy" resource stocks is shown below.

But a far better one, one which needs no explanation is the following chart comparing Netflix vs AngloGold:

And in other news, now that "capitulation" is finally raging among the commodity sector, overnight that other "Anglo" gold miner, Anglo American, reported a $3 billion loss for the first half of 2015 and said it would cut 53,000 jobs over the next few years, as plunging commodity prices continue to wreak havoc on the botto ...

Cloud services seen growth driver for Amazon

(Reuters) - Amazon.com Inc's shares surged more than 20 percent in early trading on Friday, adding more than $46 billion to the company's market value, after strong growth in the e-commerce giant's cloud business drove a surprise quarterly profit.

17 July 2015: ECRI's WLI Continues In Positive Territory Insignificantly Declining

ECRI's WLI Growth Index which had spent 28 weeks in negative territory - is now in its 12th week in positive territory but is creaping back towards contraction.. ECRI also updated their lagging index this week.

Facebook defeats shareholder litigation over IPO

NEW YORK (Reuters) - A federal appeals court has upheld the dismissal of litigation by Facebook Inc shareholders who accused Chief Executive Mark Zuckerberg and other officials of deceiving them about the social media company's growth prospects prior to its May 2012 initial public offering.

Wealth Matters: How to Connive a Reservation at That Oh So Popular Restaurant

It takes more than money to get seated at the trendiest dining establishments in places like New York, Los Angeles and Miami.

Earnings And Guidance Suddenly Matter? Say It Ain't So...

Submitted by Pater Tenebrarum via Acting-Man.com,

A Disturbance in the Farce

Corporate revenues and earnings have been weak for quite some time. In big cap stocks this has been masked by the stock buyback effect, which supports earnings per share, even if the underlying trend of a business sucks. Unfortunately, stock buybacks are a horrible use of capital when stocks are trading at bubble valuations. Ironically, managers of listed companies have a great knack for boosting buybacks to record highs right when prices are at their peak. After a crash like the one in 2008 when prices are actually cheap, buybacks tend to dry up almost completely.

Palpatine_disturbance

Image credit: George Lucas

Moreover, many companies are levering up their balance sheets to finance these buybacks. So not only are they buying at absurd prices, they are incurring a mountain of debt to do so. Corporate debt has rushed from one record to the next in recent years. Future regret is absolutely guaranteed.

Hitherto, the stock market has largely ignored weak earnings and so-so guidance. However, it seems the patience of investors is running out, in spite of the fact that money supply growth remains brisk and in spite of the incessantly repeated mantra of the "magical second half" in which the economy is held to finally attain "escape velocity" - whatever that is actually supposed to mean (apparently many economists believe the economy is a space-ship).

Further below is a chart showing the stocks of three companies of very different quality. The f ...

Nasdaq Plunges Into Red, Gives Up All AMZN Gains

Well that escalated quickly...


...

Fund's Gamble on Health Law Pays Off Big

Larry Robbins's Glenview Capital Management has made realized and paper gains of more than $3.2 billion since it started betting on hospitals and insurers in the wake of the health-care overhaul.

U.S. factory activity inches up in July: Markit

NEW YORK, (Reuters) - Growth in the U.S. manufacturing sector edged up in July after slowing for three months in a row, according to an industry report released on Friday.

June 2015 New Home Sales Rate of Growth Softens, and Below Expectations

Written by John Lounsbury and Steven Hansen

The headlines say new home sales declined from last month. The rolling averages smooth out much of the uneven data produced in this series - and this month there was an improvement in the rolling averages.The data was revised downward in the previous months making the bad headlines even worse than first glance.

Retiring: Technology, While Not a Fountain of Youth, Can Make Aging Safer

Devices that monitor vital signs and remind people to take medicine can help older people stay in their homes longer and more cheaply.

Earnings Summary for Today

Earnings Calendar provided by Investing.com.

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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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