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16Sep2015 Market Update: Averages Climb Higher, DOW Over 100, Oil Prices Jump 5%, Rumors Persist On No Rate Hike

Written by Gary

The markets and oil prices surged amid signs that U.S. oil producers are starting to make serious cutbacks in response to the dramatic slump in prices.

Investors remained upbeat approaching the U.S. Federal Reserve's decision on whether to raise interest rates for the first time in nearly a decade.


Here is the current market situation from CNN Money

North and South American markets are broadly higher today with shares in Brazil leading the region. The Bovespa is up 2.27% while Mexico's IPC is up 1.03% and U.S.'s S&P 500 is up 0.67%.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 62%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 16%
Investors Intelligence sets the breath Above 50 bullish 30.8%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. +20.50
StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 22.81%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 38.18%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 39.00%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 22.78
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 76.59
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10,224

What Is Moving the Markets

Here are the headlines moving the markets.

Brewer AB InBev seeks $275 billion tie-up with SABMiller

BRUSSELS/LONDON (Reuters) - Anheuser-Busch InBev has approached rival SABMiller about a takeover that would form a brewing colossus producing a third of the world's beer.

HP to cut up to 33,300 jobs over next three years

(Reuters) - Hewlett-Packard Co , which plans to split into two listed companies this year, said it expected to cut about 33,300 jobs over three years as the tech pioneer adjusts to falling demand.

Dow Up 400 Points From Monday Lows As Bad-News-Is-Good-News Rally Extends

More bad news - proving The Fed's projections wrong once again - appear to have enabled yet another USDJPY-inspired ramp ahead of tomorrow's FOMC statement.

The Only Thing That Matters For The Rate-Hike Decision

A week ago, we noted Goldman Sachs' 'strawman' that Janet should "think about easing," despite the world's misplaced confidence that rates will rise "inevitably" since the US economy is doing so well. Today, we get to hear what 'god' thinks as the only thing that matters for The Fed's decision is - keep Lloyd happy - and Goldman CEO Blankfein just said "U.S. economic data doesn't support the case for higher interest rates."

As Bloomberg reports,

The Federal Reserve's end of quantitative easing and higher taxes have acted as a brake on the economy and a form of tightening, Blankfein said Wednesday at a breakfast in New York sponsored by the Wall Street Journal.

U.S. economic data doesn't support the case for higher interest rates, Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein said.

Any decision to increase interest rates should be driven by economic data, he said.

And as we previously concluded, there you have it: the "above trend growth" is dead and buried - because 24 months after Goldman's prediction that the economy is now roaring, Goldman admits the Fed can't hike even 25 bps.

Oil Boosted by Heavy Draw on Stockpiles

Oil prices surged amid signs that U.S. oil producers are starting to make serious cutbacks in response to the dramatic slump in prices.

The Last Time This Happened Was... Never

Submitted by Simon Black via SovereignMan.com,

Every few centuries a new technology is invented and adopted that fundamentally changes everything about how a society is structured and organized.

The Agricultural Revolution allowed early humankind to stop being nomadic hunters and establish the roots of civilization in a single location.

The invention of the moveable type printing press in the 1400s (the Internet of its day) created a rapid spread of ideas that spawned lasting political revolutions across Europe.

The Industrial Revolution lifted millions of people out of poverty, empowered the middle class, and finally ended the feudal system.

Today it's the Digital Revolution, which, along with robotics, genomics, and AI, is already creating fundamental changes in society.

Now, to say that the world is constantly changing is a statement of the obvious.

But the changes we're experiencing right now have never been seen before in all of history.

Because in addition to major social changes, we're also seeing a change in the world's dominant superpower.

This happens from time to time throughout history.

The Italian city-states. The Ottoman Empire. Spain. France. Britain. All of these great empires held the top spot in the world for a time. Sometimes centuries.

But each was ultimately displaced by another rising power. Nations, like people, have natural life cycles. They rise, peak, and decline. It's completely normal.

The United States as the world's dominant superpower today is in its own period of decline.

Over the past 55 years, the US government posted a budge ...

CVS Health in $48 million settlement of lawsuit over hiding loss

(Reuters) - CVS Health Corp reached a $48 million settlement of a lawsuit accusing the U.S. drugstore operator of fraudulently concealing a big loss of revenue in its pharmacy benefits manager business, culminating in a plunge in its stock price.

Wall St. higher as energy stocks lead

(Reuters) - Energy stocks lifted Wall Street on Wednesday after a 5 percent jump in oil prices, even as investors braced for the Federal Reserve's decision on an interest rate hike.

FedEx profit misses expectations, lowers earnings forecast

CHICAGO (Reuters) - Package delivery company FedEx Corp posted a higher quarterly profit on Wednesday, but missed Wall Street expectations due to weak global economic conditions and the strong U.S. dollar.

Weak U.S. inflation complicates Fed rate decision

WASHINGTON (Reuters) - U.S. consumer prices unexpectedly fell in August as gasoline prices resumed their decline and a strong dollar curbed the cost of other goods, pointing to tame inflation that complicates the Federal Reserve's decision whether to hike interest rates.

FedEx Lowers Outlook After Mixed Results

FedEx reported disappointing results for its latest quarter, and the delivery giant cut its full-year profit forecast on weaker demand for freight services and higher costs in its ground division.

For Canadian Oil Sands It's Adapt Or Die

Submitted by Alexis Arthur via OilPrice.com,

That low oil prices are squeezing out oil sands producers is not breaking news. But in spite of a grim oil price outlook, production out of Calgary has continued to grow, defying both expectations and logic. The implications are serious, not just for the future of Canada's energy industry and economy, but also North American energy relations.

In June 2015, the Canadian Association of Petroleum Producers (CAPP) revised down its 2030 production forecast to 5.3 million barrels per day (mbd). A year earlier the group predicted Canada would be able to produce 6.4 mbd by 2030. This is compared to the 3.7 mbd produced in 2014. Most experts agree that capital intensive oil sands projects are marginal - if not loss-making - in the $45 - $60 range. Yet production continues apace.

Of course, the nature of capital intensive operations such as the oil sands is that they are also prohibitively expensive to shut down. Producers are left in limbo, praying that prices will rise.

The implications for Canada should not be understated. Of the nation's estimated 339 billion barrels of potential oil resources, oil sands account for around 90 percent. The Canadian dollar is at a decade low, which softens the blow for exporters in the short term but the long-term economic consequences are less rosy.

Projects are being delayed, and many experts wonder if the current oil sands model has a future. Peter Tertzakian of ARC Financial told Alberta Oil Magazine t ...

Exasperated U.S. appeals court tosses bigger Argentina bond class

NEW YORK (Reuters) - A U.S. appeals court on Wednesday rebuked the federal judge overseeing litigation stemming from Argentina's sovereign debt default nearly 14 years ago, and threw out his expansion of one class action of bondholders suing the country.

WTI Crude Soars Above $47 As Algos Finally Read DoE Report

It appears the machines decided to read the whole DOE report after all... and run some more stops.

WTI is up over 6% - back to 2 week highs

Seemingly running stops again...

and as goes crude, so goes US equities...

Charts: bloomberg

Great Stagnation: Why Americans Still Think the Economy Is Terrible

A middle-income family is making less money in inflation-adjusted terms than 15 years ago, and new census numbers show no sign of progress.

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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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