econintersect .com

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.

18Aug2015 Market Close: Averages Close Down On Investor Worries Regarding China And Other Possible Contagious Global Financial Issues

Written by Gary

The averages closed down fractionally from the mornings highs and then traded sideways for most of the afternoon session on sometimes anemic volume. WTI oil settled higher, but sub-$40 levels may be on tap in the coming week say analysts following steep losses in Chinese stocks and a downbeat outlook from Wal-Mart Stores Inc.

Todays S&P 500 Chart

"We're in the summer doldrums," said Jim Paulsen, chief investment strategist at Wells Capital Management. "Most people are staying cool on the lake somewhere." Another reason for the general aimlessness of the market, Paulsen said, is that the news hasn't been all that surprising. "People know about China's problems, they know about falling commodity prices," he said. "They've digested a lot of the news that's out there already."

Richard Hastings, macro strategist at Global Hunter Securities, said that the bias for oil is lower. "Fears of a sustained slowdown in China is oil's biggest hurdle," said Phil Flynn, senior market analyst at Price Futures Group. But "China is throwing a lot of money and stimulus which could keep oil demand strong," and that's likely providing some support to oil prices, he said. He said $39 a barrel is "easily achievable for WTI crude oil in the coming week."

The Market in Perspective

Here are the headlines moving the markets.

JPMorgan may settle with SEC on investment-steering case: WSJ

(Reuters) - JPMorgan Chase & Co is in advanced talks with U.S. regulators to pay more than $150 million to resolve allegations that it steered private-banking clients to its own products without proper disclosures, the Wall Street Journal reported, citing people familiar with the matter.

U.S. Stocks Inch Lower

U.S. stocks slipped Tuesday, following steep losses in Chinese stocks and a downbeat outlook from Wal-Mart Stores Inc. that eclipsed strong earnings from other retailers.

Housing Builds Case for Rate Rise

The strong report on July housing starts sets the stage for a Fed rate increase in September.

Wells Fargo adding car loan branches to boost less risky lending

(Reuters) - Wells Fargo is building more branches devoted to car loans and financing for auto dealers in an effort to increase its auto lending business without taking bad credit risk, the bank's head of car lending told Reuters.

Inside Amazon: Wrestling Big Ideas in a Bruising Workplace

The company is conducting an experiment in how far it can push white-collar workers to get them to achieve its ever-expanding ambitions.

BNY Mellon to pay $14.8 million to settle intern bribery probe

(Reuters) - Bank of New York Mellon Corp will pay $14.8 million to settle U.S. civil charges it gave internships to family members of officials linked to a Middle Eastern sovereign wealth fund, violating federal bribery laws.

Default Wave Looms As Energy Sector Credit Risk Surges To Record High

With oil prices pushing cycle lows and Shale firms as loaded with debt as they have ever been, the spike in energy sector credit risk should come as no surprise as the hopes of the last few months are destroyed. At 1076bps, credit risk for the energy sector has never been higher. As UBS recently warned, more defaults are looming and, as we discussed this week, private equity is waiting to pick up the heavily discounted pieces.

As we noted previously, as for the defaults well, they're on their way UBS thinks, as evidenced by recent events such as American Eagle Energy's "Movie Gallery" moment:

Where are the defaults? They're coming: we've seen Quicksilver Resources and Dune Energy, are likely to see American Eagle Energy, RAAM Global Energy, Venoco and thereafter perhaps Connacher Oil & Gas, Samson and Sabine Oil & Gas. Most E&P firms had hedges in place for 2015; defaults typically lag by about 12 months and the clock started ticking late last year.

We'll close with the following from "Is The Stage Set For A High Yield Meltdown?":

Wal-Mart profit misses estimates; cuts outlook as pharmacy margins bite

(Reuters) - Wal-Mart Stores Inc reported weaker quarterly earnings and lowered its annual forecast on Tuesday, as it copes with higher labor costs, a squeeze on pharmacy margins and sliding sales at its British supermarket chain.

Target reaches agreement with Visa over data breach

(Reuters) - Target Corp said it has reached an agreement with Visa Inc card issuers to reimburse up to $67 million in costs related to a data breach at the retailer in 2013, according to a source familiar with the matter.

Only The Date Is Unknown

Via Monty Pelerin's World,

The US and world economies are frauds that are coming unraveled. The Greek bailout is the most recent example of "kick the can down the road" solutions. The US housing bubble was an attempt to cover up/recover from the dot-com bust. Now the US is in a financial bubble engineered to recover from the housing bubble debacle. Soon this bubble will burst. Only the date is unknown.

Two predictions can be made with reasonable confidence:

The stock market is likely to be halved and that might be optimistic. Only the date is unknown.

The economy will eventually resemble the Great Depression. Only the date is unknown.

Nothing is ever certain. An experienced CFO told me at the beginning of my career that "even the impossible has a 20% probability." In deference to him and years of empirical evidence, I put the the above two events as virtually certain, i.e., an 80% probability.

The Current Problem

Phoenix Capital provided reasons to expect horrible outcomes:dow death cross

The REAL problem for the financial system is the bond bubble. In ...

German lawmakers debate Greek bailout, Merkel faces rebellion

BERLIN (Reuters) - German lawmakers broke off their holidays on Tuesday to debate Greece's third bailout plan before approving it, though Chancellor Angela Merkel faces a rebellion in a vote shaping up as her last chance to keep Athens in the euro zone.

Housing starts near eight-year high, but permits fall

WASHINGTON (Reuters) - U.S. housing starts rose to a near eight-year high in July as builders ramped up construction of single-family homes, suggesting that the economy was firing on almost all cylinders.

Summary of Economic Releases this Week

Real Time Economic Calendar provided by

Earnings Summary for Today

Earnings Calendar provided by

leading Stock Positions

Leading Stock Quotes powered by

Current Commodity Prices

Commodities are powered by

Current Currency Crosses

The Forex Quotes are powered by

To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

Click here for Historical Releases Listing

Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.

Econintersect Live Market

Print this page or create a PDF file of this page
Print Friendly and PDF

The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.

Keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Middle East / Africa
USA Government

 navigate econintersect .com


Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2018 Econintersect LLC - all rights reserved