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24Jul2015 Market Close: Bad Week For Gold And Stocks.

Written by Gary

Sometimes one wishes all your investments were cash under your mattress. This was a bad week for metals and stocks.

Todays S&P 500 Chart

All major averages were down over 2% for the week.

The Market in Perspective

Here are the headlines moving the markets.

Gold Extends Rout as Dollar Strengthens

Gold prices fell near a 5½-year low, and silver closed in on 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 St falls as biotechs, materials lag

NEW YORK (Reuters) - The S&P 500 and Nasdaq posted their largest weekly drops since March on Friday as slowing global growth dragged commodity-related stocks lower, while an earnings-related drop in Biogen took down the biotech sector.

A few big winners keep U.S. stock market afloat in 2015

(Reuters) - Amazon's stock price surge into Friday made it the latest of a series of companies to boom following results, and its performance this year, along with a few others, has basically kept the S&P 500 above water.

Fiat Chrysler Recalls 1.4 Million Vehicles to Fix Hacking Issue

After security experts discovered the problem, the company made a software fix, but the National Highway Traffic Safety Administration felt a recall was needed.

Fed inadvertently publishes staff forecast for 2015 rate hike

WASHINGTON (Reuters) - Staff economists at the Federal Reserve see a quarter-point U.S. interest rate increase this year, according to forecasts the Fed mistakenly published on its website in a gaffe that drew criticism about its ability to keep secrets.

AT&T's $48.5 billion DirecTV purchase gets final U.S. okay

WASHINGTON (Reuters) - AT&T received final U.S. regulatory approval on Friday to buy DirecTV for $48.5 billion, combining the country's No. 2 wireless carrier with the largest satellite-TV provider.

U.S. Approves Drug That Can Sharply Lower Cholesterol Levels

The drug, Praluent, developed by Sanofi and Regeneron, is expected to become the next flashpoint in the growing controversy of escalating pharmaceutical price.

This Has Never Happened To Gold Before

For the first time since records began, hedge funds are net short gold futures, according to CFTC data...

This is what happened the last time gold saw a 'low' net long position...

Is this why Gold is spiking this afternoon?

Fiat Chrysler U.S. to recall vehicles to prevent hacking

DETROIT/SAN FRANCISCO (Reuters) - Fiat Chrysler will recall 1.4 million vehicles in the United States to install software to prevent hackers from gaining remote control of the engine, steering and other systems in what federal officials said was the first such action of its kind.

Friday Humor: Buy High, Sell Low

Gartman does it again... In the words of one seasoned veteran exclaimed "I am speechless."

h/t @NorthmanTrader


What Would Clinton's Capital Gains Tax Mean for You?

Hillary Clinton has proposed changes to capital-gains tax rates and holding periods in hopes of encouraging corporate managers to focus on long-term growth. What exactly would the changes mean for individual investors?

Chicago's Pension Overhaul Plan Tossed Out by Judge

An Illinois circuit court judge rejected Chicago Mayor Rahm Emanuel's 2014 pension overhaul on Friday, a blow to the city's attempts to patch up one of the nation's worst-funded retirement systems.

Breakingviews: The Regulatory Hurdles to Health Insurance Mergers

Anthem and Cigna are the latest health insurers to forge a deal, but they and their peers need to satisfy many regulators before pairing up.

Bank of America Set For More Changes in Executive Ranks

More changes are coming at the top of Bank of America. The bank is looking for a replacement for Gary Lynch, the general counsel who guided it through a storm of legal crises.

Dear CFTC: Here Is Today's Illegal "Spoofing" In Gold Futures

The last time we presented unmistakable spoofing in gold futures on April 28 of this year, which happened just days after the CFTC came down on Nav Sarao as the scapegoat for the May 2010 flash crash in which he was accused of spoofing the E-mini future and as a result has been in prison ever since - it resulted, literally 2 days later, to the CME accusing Nassim Salim and Heet Khara of rigging the gold market using precisely this manipulative method.

The CME said on May 1:

[O]n multiple trade dates during the time period of March 1, 2015 through April 28, 2015, Salim engaged in a pattern of activity in which he repeatedly entered orders or layered multiple orders for Gold and Silver futures contracts without the intent to trade. Specifically, Salim entered these orders or layered multiple orders to encourage market participants to trade opposite his smaller orders resting on the opposite side of the book. After receiving a fill on his smaller orders, Salim would then cancel the resting order or layered multiple orders that he had entered on the opposite side of the order book.

Salim introduced Heet Khara ("Khara"), who is also the subject of a summary access denial action, to his first FCM and Salim had an account at the second FCM at which Khara traded in a disruptive manner. Further, it appears that on multiple occasions Salim and Khara coordinated efforts to engage in disruptive activity. In an example from April 28, 2015, Salim entered small-lot orders on one side of the market in Go ...

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.

Fair Game: Fidelity Seen as Muscling Investors Out of Upside in a Telecom Deal

The asset management giant's plans to buy the Colt Group is angering minority shareholders who feel forced to sell at a bargain-basement price.

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.

F.C.C. Approves AT&T-DirecTV Deal

The $48.5 billion deal will create the nation's largest television distributor.

Clouding a Blue-Sky View of Amazon

The cloud business has puffed up Amazon's bottom line, but the company's spending habits make that difficult to count on.

The Death of Gold... Or Not!

Submitted by Jordan Eliseo via ABC Bullion,

Precious metal investors suffered yet another rude shock early this week, with the price of gold plunging below USD $1100oz, with a nearly USD $50oz sell off occurring in a matter of minutes in early Asian trading on Monday the 20th July.

In total, some 5 tonnes of gold was dumped on the Shanghai market in this two minute window, an extraordinary amount when one considers DAILY trading volume is typically in the vicinity of 25 tonnes.

At the same time, according to ANZ Bank, there was also 7,600 August 2015 gold contracts traded on the COMEX, equivalent to another 23 tonnes of metal.

The market has since bounced around, trading back above USD $1100oz at one point, though this morning we see that the metal has eased again, currently sitting at USD $1,091oz, whilst silver has fallen below USD $15oz, with the gold/silver ratio now sitting at 73.82

Australian dollar investors have not been spared this time around, with the AUD price falling back below AUD $1500 per oz. Year to date, this has reduced gains (yes, investors are still UP for the year in local terms, albeit mildly) to just 2%, though the recent sell off has also led to marked increase in trading volumes for bargain hunting physical buyers.

China Gold Announcement

Whilst the majority of the sell off in gold reflects extreme pessimism and aggressive short positioning in the markets (more on this below), perhaps some of the weakness in gold prices this week can be tied back to the Chinese announcement on Friday the 17th regarding their updated physical gold holdings.

To recap, on the 17th Juy 2015 the Chinese government announced that national gold holdings had increased to 1658 tonnes, up some 57% in the past 6 years. Based of ...

Did The Canary In The Credit Coalmine Just Croak: Capital One Credit Loss Provisions Soar By 60%

Everyone knows Capital One's trite soundbite: "What's in your wallet?"

Overnight, the market found out what's in Capital One's balance sheet, and it didn't like it one bit.

Yesterday, Capital One Financial reported earnings that fell well short of consensus: the $311 billion-company's Q2 profit was $863 million, down 28% Y/Y. EPS was an ugly $1.50, $0.47 cents below the consensus estimate. Surprisingly this earnings plunge took place even as overall revenue rose 4% to $5.7 billion.

So what gives: a closer read through the numbers reveals that while average wages across the US are barely rising enough to cover inflation, Capital One felt the need to really incentivize its workfore with an increase in salaries and benefits 10 times higher than the national average, up 21%, to $1.4 billion, while marketing costs increased 16%, and professional-services fees grew 13%.

At the same time headcount increased 7%, to 47,500 even though COF concurrently took a $147 million charge for the restructuring its benefits plan "as a result of the realignment of our workforce." COF did not provide details on the workforce changes that led to the charge.

End result: in moments, the stock wiped out all of its hard-earned gains for the year, and then some:

But the biggest shocker was something else found between COF's top and bottom line: a surge in provisions for credit losses: at $1.1 billion this was a jump of 21% from Q1 and up a whopping 60% from the year prior. It was also the biggest credit loss provision the credit card company has taken since Q2 2012.

U.S. probing possible price-gouging by airlines after rail crash

WASHINGTON/NEW YORK (Reuters) - The U.S. Transportation Department is investigating possible price gouging by the five biggest U.S. airlines while train service was disabled between New York and Washington following a deadly Amtrak crash in May, it said on Friday.

Dow Dumps 600 Points From Monday's Jubilant Highs

From 18,075 highs, The Dow Industrials - hit by a smorgasbord of missed earnings and weak guidance - has collapsed 600 points from its highs a week ago... This is the worst week for the Dow since January...

Fed "Accidentally" Released Dovish Confidential Market-Moving 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), whose summary assessment is shown below as per the leaked file.

While superficially, and as expected, the Fed is assuming a 1.26% fed funds rate in one year, suggesting about 3-4 rate hikes until then, with the first one according to the leaked documents taking place in Q3:

... the overall strength of the economy is well weaker, and thus more dovish, than many of the permabulls had expected.

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

And these are the key projections as revealed in t ...

Market Continues to Fade, Heading to Another Weekly Loss

If Friday's losses hold, the S.&P. 500 will have had its fourth losing week out of the last five.

Facebook defeats shareholder litigation over IPO

NEW YORK (Reuters) - A federal appeals court on Friday said Facebook Inc officials including Chief Executive Mark Zuckerberg cannot be sued by shareholders who said the social media company concealed threats to its growth prospects before its May 2012 initial public offering.
...

Anthem Strikes Right Note With Cigna Deal

Anthem successfully held the line in merger talks with Cigna. But antitrust issues should keep investors from celebrating for now.

Summary of Economic Releases this Week

Real Time Economic Calendar provided by Investing.com.

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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