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24Sep2015 Market Close: Today Marked The Third Day Of Declines, EU Markets Slide To Eight Month Low, DOW Down 79 Points

Written by Gary

The averages did unexpectedly recover from the deep morning losses to close down, but near the unchanged line prolonging the sideways jaunt the markets have been in since 8-25-2015 - 21 sessions. The DOW closed down only 79 points nowhere near the -200 plus early this morning facing the third day of declines on waning investor confidence. The markets were also dragged down by declines among big industrial firms and auto makers.

Todays S&P 500 Chart

The negative economic news today also includes European stocks sliding to an eight-month low and today's big news is that Caterpillar plans job cuts saying it would reduce 10,000 jobs by the end of 2018.

WTI oil made a serious attempt to test its support and then rebounded to yesterday's resistance where it sits now (Chart Here). The volatile conditions remain, but for now longs can hang their hats on the 43 area for support. The question remains however, for how long, in light of some analysts view of a $20 bottom!

The Market in Perspective

Here are the headlines moving the markets.

Caterpillar slashes revenue forecast, cutting up to 10,000 jobs

(Reuters) - Caterpillar Inc slashed its 2015 revenue forecast on Thursday and said it will cut as many as 10,000 jobs through 2018, joining a list of big U.S. industrial companies grappling with the mining and energy downturn.

U.S. business spending slips, new home sales rise in August

WASHINGTON (Reuters) - U.S. business investment fell slightly in August, excluding spending on aircraft and defense equipment, but new home sales rose, suggesting that global economic headwinds were doing little to impede U.S. growth.

Boeing chairman believes U.S. Export-Import Bank will be reauthorized

NEW YORK (Reuters) - Boeing Co chairman Jim McNerney said on Thursday he believes the U.S. Export-Import Bank, which recently lost authorization to engage in new business, will be reauthorized.

Oil up 1 percent; Cushing draw data offset by Wall Street drop

NEW YORK (Reuters) - Oil prices rose as much as 1 percent on Thursday, boosted by inventory draws at the U.S. crude futures' delivery hub although gains were capped by tumbling equity prices on Wall Street.

The VW Scandal Is Bad News For Diesel

Submitted by Tom Kool via,

The outlook for diesel looks grim after U.S. regulators found that the world's second biggest car manufacturer cheated on its emission tests.

Last Friday, the U.S. Environmental Protection Agency reported that Volkswagen violated the U.S. Clean Air Act. The German auto maker deliberately rigged the so called emission control systems in several models of their cars in order to reduce nitrogen-oxide emissions when tested in the lab.

However, when tested on the road, the size of the 'diesel deception' proved to be bigger than many could have imagined. Bloomberg reported on September 22 that on an open road test both the 'Jetta' and 'Passat' models exceeded U.S. nitrogen-oxide emissions standards by up to 35 times.

It was Volkswagen CEO Martin Winterkorn who admitted that the company 'betrayed the trust' of millions of people in a mea culpa on September 21. He announced his decision to resign two days later.

Winterkorn must ...

U.S. appeals court upholds Shire's patents on hyperactivity drug

(Reuters) - A U.S. appeals court has upheld drugmaker Shire's patents for its top-selling drug Vyvanse, blocking five generic drug makers from launching cheaper versions of the drug to treat attention deficit hyperactivity before 2023.

Why Caterpillar Investors Could Go Hungry

Caterpillar is getting closer to a cyclical bottom, but don't try to call it.

Wall Street falls as Caterpillar, health stocks weigh

(Reuters) - Key U.S. stock indexes fell in afternoon trading on Thursday, weighed by tumbling healthcare stocks and shares of market heavyweight Caterpillar after a cut in its sales forecast added to worries over sluggish global growth.

Bubble Machine Timeline: Visual Evidence Of The Fed's "Third Mandate"

If there's one lesson the world's central planners should have learned by now, it's that using monetary policy to micromanage economic outcomes leads directly to crises.

Make no mistake, that's not some theory that can be written off as a one-line rant by an angry sound money advocate. It's a demonstrable fact, and the truly scary thing about it is that not only do central bankers steadfastly refuse to understand it, they ardently believe the exact opposite to be true.

Indeed, the headlong plunge into unconventional monetary policy in the wake of the financial crisis quite clearly indicated that Ben Bernanke either did not understand, or more likely, understood fully and just didn't care, that the Greenspan Fed played an outsized role in creating the conditions that led directly to the housing bubble.

The problem with rushing to combat any sign of economic or financial market turmoil by resorting immediately to counter-cyclical policies is that the creative destruction that would normally serve to purge speculative excess isn't allowed to operate and so, misallocated capital is allowed to linger from crisis to crisis, making the next boom and subsequent bust even larger than the last.

This is one of the most important dynamics to understand when seeking to explain why the past two decades have seen the world careen from one crisis right into another and then into another with each one more terrifying than the last. For those who need proof of the above, we present the following chart from RBS which shows that even if one wants to argue that Keynesian tinkering can manage to slightly smooth out the business cycle (and trust us, the jury is still out on that), what it most certainly cannot do is smooth out financial cycles (defined by the IMF as "self-reinforcing interactions between perceptions of value and risk, attitudes towards risk and financing constraints, which translate into boom ...

Wells Fargo has biggest energy exposure among large U.S. banks: Raymond James

(Reuters) - Wells Fargo & Co has the largest exposure to loans to energy companies among major U.S. lenders, a report from Raymond James said, amid concerns that banks may have to set aside more money to cover bad loans to the industry.

GE agrees export financing from UK, may create 1,000 jobs

(Reuters) - General Electric Co said on Thursday it reached an agreement with Britain's export credit agency for up to $12 billion in financing, possibly creating as many as 1,000 jobs in the country.

Exclusive: Pivoting after failed Syngenta bid, Monsanto to build big data business

CHICAGO/KANSAS CITY (Reuters) - With its shares trading at three-year-lows since it abandoned a $46 billion bid to buy Syngenta AG last month, Monsanto Co plans to offer its shareholders a new corporate vision: a future in big data.

Bears Beware, JPM's Head Quant Just Flipped To Bullish: "The Technical Buying Begins"

In late August, and early September, a previously unknown name, JPM's head quant Marko Kolanovic, emerged from relative obscurity, after he successfully called imminent market moves with uncanny precision, to wit:

August 21, just before the Black Monday flash crash: "Why The Market Is Crashing Into The Close: JPM Explains"

August 27: "JPM Head Quant Warns Second Market Crash May Be Imminent: Violent Selling Could Return On Thursday"

September 3, before the next leg lower in stocks: "Home JPM Head Quant Is Back With New Warning: "Only Half The Selling Is Done; Expect More Downside""

So after punishing the bulls like clockwork, many were wondering when will Kolanovic flip bullish and dole out some overdue pain for the bears.

The answer: moments ago, when in a note providing an "Update on Technical Buying/Selling" he concludes that the technical selling is now officially over and the same technical sellers, among which the much maligned risk parity funds that pushed stocks in late August and early September, are now "expected to buy Equities."

Incidentally, the market started rallying the note was sent out just after 1:40pm Eastern.

F.D.A. Panel Weighs Complaints on Essure Contraceptive Implant

The public meeting was called after claims accumulated that the device, inserted into the fallopian tubes, caused pain and possibly even death.

Caterpillar, Feeling Global Slump, Plans to Cut Up to 10,000 Jobs

The announcement from Caterpillar, which has been a symbol of American exporting might, helped drive down major stock indexes.

The Shale Party's Over: "Closed" Bond Market Means "Restructuring Is Inevitable"

With the market's perceived risk of default across the energy space at record highs, it should be no surprise that willingness to lend (even for the greater-fool reach-for-yielders) is collapsing. As Bloomberg reports, oil services companies are finding alternative ways to raise cash and repay debt after falling crude prices has made it difficult for them to get funding from traditional sources. As one restructuring firm warned, "bond markets are closed for these companies, especially small ones, and banks may not be lending to them at this stage," with another ominoulsy warning, "getting new liquidity in this market could be a painful exercise. For many companies, financial restructuring seems inevitable."

Credit risk for Energy firms has exploded...

As Bloomberg Briefs reports, energy companies are being shut out of bond markets and lenders are reducing credit lines after prices dropped about 60 percent from last year's peak.

Services companies in Europe are starting to run out of cash as producers from Royal Dutch Shell Plc to Petroleo Brasileiro SA cut their own investments and delay projects.

"Bond markets are closed for these companies, especially small ones, and banks may not be lending to them at this stage," said Nigel Thomas, partner at law firm Watson Farley & Williams in London. "Services companies need to buy time to survive during the downturn and alternative ...

Coca-Cola to sell nine U.S. bottling plants, set up new supply system

NEW YORK (Reuters) - Coca-Cola Co said on Thursday it plans to sell nine production facilities to three of its largest independent bottlers as it seeks to unload low-margin assets and reduce manufacturing costs in the United States.

Caterpillar To Cut 5,000. May Grow To 10,000.

from Challenger Gray and Christmas

Today's announcement from Caterpillar that it will shed 5,000 workers by the end of 2016, with the possibility of adding another 5,000 job cuts by the end of 2018, places it among the top 15 private-sector job cut announcements of the year.

Q2 Earnings Decline Exposes The Illusion Of Profitability

Submitted by Lance Roberts via STA Wealth Management,

With the 99% of second quarter earnings reports for the S&P 500 now in, I can update my quarterly analysis of earnings and estimate trends through the 2nd quarter of 2015.

Second quarter's results improved over Q1 as activity rebounded following the exceptionally cold winter season. For the quarter, operating earnings rose from $25.81 per share to $26.14 which translates into a quarterly increase of 1.28%. More importantly operating earnings FELL from 29.60 per share in Q3 of 2014 or 11.69% from the peak.

While operating earnings are widely discussed by analysts and the general media; there are many problems with the way in which these earnings are derived due to one-time charges, inclusion/exclusion of material events, share buybacks and accounting gimmickry to "beat earnings." (For a complete discussion read "The Earnings Season Scandal.")

Therefore, from a historical valuation perspective, reported earnings are much more relevant in determining market over/undervaluation levels. On a reported basis, earnings improved from $21.81 to $22.80 or 4.54% from the first quarter. But as with operating earnings, reported earnings fell 17% from their Q3 peak in 2014.

The rise in both operating and reported earnings for the quarter brought trailing twelve months operating earnings per share to ...

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