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14Sep2015 Market Close: Markets Closed Down, Investors Edgy And Cautious Regarding The Federal Reserve Rate Increase And China Slipping

Written by Gary

U.S. markets traded sideways all afternoon on low to moderate volume as concerned investors sat mostly on the sidelines awaiting the Fed's rate decision on Thursday. The oil's tested their supports early and melted up in a halfhearted fashion, closing in the low 44's.

With China apparently starting to do the slow dance and with no clear signs on what the Federal Reserve is going to do on Thursday have investors and traders on edge and cautious.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Without Government, Who Would Force A Men's Barbershop To Cut Women's Hair?

Submitted by Ryan McMaken via The Mises Institute,

A barbershop that is set up specifically to serve men, must now pay $750 dollars after a Pennsylvania state investigation into "discriminatory" practices on the part of the barbershop owners.

The owner, John Interval, was fined $750 after he declined to cut a woman's hair. According to Interval:

"I didn't really consider it so much a discrimination thing as - it's a barbershop... for guys. You know, I'm not opposed to doing women's hair...just not in this shop. I don't even have [the equipment] to do women's hair." Interval said.

The potential customer, who was forced to endure the hardship of finding an establishment that cuts women's hair, filed a complaint with the state, and following a taxpayer-funded investigation and interview period with the barbershop owners, the state levied a fine against the shop.

The shop will pay the fine, of course, because to refuse to pay would likely bring armed government agents to the establishment to serve further warrants and additional methods of state coercion including fines, lawsuits, and possible imprisonment and/or impoverishment for the owner.

An alternative to this, of course, would be to allow shop owners to d ...

As Airbus opens U.S. factory, CEO sees plane output soaring

MOBILE, Ala. (Reuters) - Airbus Group SA opened its first jetliner factory on U.S. soil on Monday and does not anticipate taking a hit to aircraft orders from the economic slowdown in China, Chief Executive Tom Enders said.

The Fed Shouldn't Worry About Losing Credibility: It Already Lost It

This Thursday the Fed may or may not hike: either outcome has become a losing proposition. If the Fed hikes, the market will tumble (regardless of the initial PPT and algo-driven spike designed to set the mood that this is the "right thing to do") after the Fed unleashes the next step in the Emerging Markets currency crisis, and the Chinese hard landing goes global. If the Fed does not hike, it will admit all its caveats about data-dependency (in an economy with 5.1% unemployment and a record high number of job openings) was nothing but a lie, and again expose itself as a muppet of the wealthiest market participants.

In other words, perhaps more than concerns about the market's reaction, the Fed may be just as worried about losing any more credibility with a global market where QE has increasingly less impact.

But is it?

As RBS summarizes it, "the Fed's dilemma is a trade-off between shaking the tree today, risking that volatility and capital flight in EM may â€'spill-back' into developed economies, or waiting and watching the fault lines deepen. Claudio Borio uses some economist humour to describe the issue: "All this is reminiscent of the old joke about the stranded tourist who, having asked for directions, was told: "If I were you, I wouldn't start from here."

What should the Fed do?

The choice is tough, and major policymakers are telling Janet Yellen to hold (IMF, World Bank, Summers and others). The arguments tend to be similar, mostly, worries about inflation being persistently low. This is true: inflation is low, from a mixture of commodity downward pressures, and structural imbalances in the labour market. But the real reason to hike is another one: preventing the debt $-denominated overhangs from building up further â€" the burst of which would be, in turn, even more deflationary (and the same imb ...

Wall St. falls after weak Chinese data; Fed meeting eyed

(Reuters) - U.S. stocks were lower on Monday afternoon as some investors stayed on the sidelines ahead of the Federal Reserve's policy meeting this week and others worried about slowing growth in China after weak data.

Airbus says U.S. factory is several weeks behind schedule

MOBILE, Ala (Reuters) - Airbus Group said on Monday that production of its first U.S.-built jetliner is several weeks behind schedule, but that the planemaker expects to deliver it on time to JetBlue Airways Corp in the second quarter of 2016.

Here's a Way Yellen Can Raise Rates Without Spooking Markets

There are risks to the Federal Reserve raising rates this week and risks to it standing pat. The central bank needs a way out.

Exclusive: Deutsche Bank to cut workforce by a quarter - sources

FRANKFURT (Reuters) - Deutsche Bank aims to cut roughly 23,000 jobs, or about one quarter of total staff, through layoffs mainly in technology activities and by spinning off its PostBank division, financial sources said on Monday.

Credibility, 'gradual' approach at stake as Fed weighs rate rise

NEW YORK/SAN FRANCISCO (Reuters) - The U.S. Federal Reserve, facing this week its biggest policy decision yet under Chair Janet Yellen, puts its credibility on the line regardless of whether it waits or raises interest rates for the first time in nearly a decade.

The Fate Of The Bursting Tech Bubble Is In The Hands Of Just One Company

In a world in which everything is up if only one excludes all the things that are down, a favorite pastime of "strategists" has become announcing how high S&P500 earnings would be if only one excluded energy companies... and the impact of the dollar... and China's economic slowdown... and the Emerging Markets currency crisis... and the [cold|hot|just right] weather... and rising labor costs... and everything else that stands between revenue (non-GAAP of course, just ask Tesla) and the bottom line.

What if one does the inverse: what if instead of eliminating the worst performing sectors (and all other factors that detract from performance in a priced to centrally-planned perfection world) one eliminates the biggest company in the world, Apple?

The result is troubling. As can be seen in the chart below, when it comes to second quarter earnings, Apple made all the difference in the world, literally, between gains and losses for what was otherwise one of the "best" performing sectors. In fact, AAPL provided a whopping 6% swing in IT sector EPS for Q2, pushing them from down 1.5% Y/Y without AAPL to +4.4% with AAPL.

Q2 is now in the past, with everyone focused on Q3. What can one expect here?

According to Factset "Apple is currently expected to be the largest positive contributor to year-over-year earnings for the Information Technology sector for Q3 2015." The bad news, however, is that for the first time in over two years, without and with the contribution of AAPL, the IT sector will p ...

Goldman Sachs - Perpetuator Of The Fed's Jihad Against Savers

Submitted by David Stockman via Contra Corner blog,

You can't blame Janet Yellen entirely for the growing prospect that the Fed will take a powder on Wednesday and opt for the 81st straight month of ZIRP. After all, she's basically a fuddy duddy school marm caught in a 1970s labor economics time warp—-a branch of the "home" economics taught by John Maynard Keynes after he turned protectionist in 1930.

Accordingly, she does apparently believe that the US economy resembles a giant bathtub, and that it is the Fed's job to see that employment and output rise full to the brim. Nor does that mission take much special doing——-at least according to the primitive macroeconomic plumbing theories of Keynes' disciples like her PhD supervisor, Professor James Tobin of Yale. Just crank the interest rate valve lower until the economic ether thereby released——-called aggregate demand——works its magic.

Indeed, the good professor did help ignite a rip-roaring inflationary boom in one country during the Kennedy-Johnson years. Back then the world economy was still segmented and unmonetized enough to at last partially encompass a closed economy model of state managed pump-priming. That was especially possible because more than a billion potential workers were trapped in the economic Gulag of Mao's China and the post-Stalinist Soviet bloc.

Never mind that today the US GDP bathtub leaks like a sieve and that massive trade, capital and financial flows transmit economic and financial impulses from around the globe. Accordingly, the marginal price of labor is set in ...

Pimco's Ivascyn says below 50 percent chance Fed hikes rates this week

NEW YORK (Reuters) - Pacific Investment Management Co, one of the world's largest asset managers and advised by former Federal Reserve chairman Ben Bernanke, puts a "below 50 percent chance" the Fed will raise short-term interest rates this week, Pimco Group Chief Investment Officer Dan Ivascyn told Reuters on Monday.

August 2015 Sea Container Exports Still Lagging

Written by Steven Hansen

The data for this series continues to be less than spectacular - but imports improved this month while exports degraded. The year-to-date volumes are contracting for exports but imports are now in the green.

Credit Suisse to pay $80 million to settle dark pool allegations: Bloomberg

(Reuters) - Credit Suisse Group AG will pay more than $80 million to settle allegations that it did not disclose how it operated its dark pool private share trading exchange to clients, Bloomberg reported, citing a person familiar with the matter.

Consumers Expectations August 2015 Shows Inflation Expectations Decreased Slightly

from the New York Fed

The August 2015 Survey of Consumer Expectations results indicate that median inflation expectations decreased slightly at both the one-year ahead and the three-year ahead horizons. Median expected one-year ahead earnings growth remained stable at 2.4 percent, while both perceived layoff and job finding probabilities improved slightly. Median expected household income growth increased slightly but expected household spending growth remained flat at its series low.

Trump Sells Miss Universe Organization to WME-IMG Talent Agency

The announcement comes just days after NBC, which had owned part of the organization, sold its stake to Mr. Trump.

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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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