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29Sep2015 Market Close: Markets Closed Mixed, DOW Up 0.3%, Nasdaq Closed Down -0.6%, Global Growth Remains A Strong Negative Factor

Written by Gary

A selloff in stocks eased today after testing lows, although investors said lingering concerns over global growth are likely to keep markets under pressure.

Most indexes closed near the bottom Bollie Band which could be viewed as bearish, but to me it isn't enough to jump ship just yet. We are still within the sideways channel and no major supports have been broken. Be patient.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Fiat Chrysler reveals problems with U.S. safety reporting

WASHINGTON (Reuters) - Two months after receiving a record $105 million fine for lapses in U.S. auto safety recalls, Fiat Chrysler Automobiles NV on Tuesday revealed problems with safety data that could lead to additional financial penalties for the Italian-U.S. automaker.

House lawmakers seek documents from Volkswagen, EPA

WASHINGTON (Reuters) - U.S. lawmakers on Tuesday asked Volkswagen AG to turn over documents related to the company's diesel emissions scandal, including records concerning the development of a software program intended to defeat regulatory emissions tests.

Want to Measure Economic Climate? Watch the Chicago Barometer

The Chicago Business Barometer could confirm worrying weakness in U.S. manufacturing.

Emerging Markets See Biggest Exodus Since 2008

Global investors are estimated to have pulled $40 billion from emerging-market stocks and bonds during the current quarter, the most for a quarter since 2008.

Volkswagen to refit cars affected by emissions scandal

BERLIN (Reuters) - Volkswagen announced plans on Tuesday to refit up to 11 million vehicles and overhaul its namesake brand following the scandal over its rigging of emissions tests.

The Anatomy Of A Retesting Of The Low

Submitted by Eric Bush via Gavekal Capital blog,

The S&P 500 is now only about 1% off its 8/25 low. Have the market internals deteriorated as much as the headline price index has? Lets take a quick tour through our chart library to find out.

On 8/25, 17% of US stocks were trading below its 200-day moving average. As of yesterday, this series has dropped back to 19% after increasing to 33% on 9/17. Unfortunately, we haven't seen a trend shift in momentum yet. Through yesterday, 33% of US stocks had its 50-day moving average trading above its 200-day moving average. On 8/25, 51% of stocks had its 50-day moving average trading above its 200-day moving average

JPEG 1

Large declines in stocks are ticking up again but still below the 8/25 level. The number of stocks with a one-day 5% decline was 83 yesterday. On 8/25, there were 150 US stocks that declined by at least 5%. It's hard to imagine that we went through a period in 2008 where we regularly were seeing 200-500 US stocks decline by 5% in a day.

JPEG 2

The median stock performance over the past year is unchanged. Over the past 200-day, the median stock performance YTD is -8%. This is the same level as it was on 8/25 and is the worst YTD performan ...

Wall Street turns lower as global worries weigh

(Reuters) - U.S. stocks moved lower on Tuesday as concerns about the health of the global economy kept investors cautious after more than month of turbulence.

Boeing studies plan to offer 737 freighter conversions

LUXEMBOURG (Reuters) - Boeing is looking at offering conversions of its most popular passenger jet, the 737-800, into freight haulers in a move aimed at express parcel firms, a senior executive said.

Wal-Mart expands grocery pickup in battle with Amazon

(Reuters) - Wal-Mart Stores Inc is expanding free grocery pickup service to several markets in the U.S. as it seeks to capitalize on its network of physical stores amid growing competition with Amazon.com and others investing in home delivery.

Hudson's Bay cutting 265 jobs, streamlining North American operations

TORONTO (Reuters) - Hudson's Bay Co plans to eliminate 265 headquarter and other corporate jobs and cut costs to save C$75 million (US$55.86 million) as it streamlines its North American operations, the department store operator said on Tuesday.

LPC-AB InBev lining up $70 billion debt for SABMiller offer

LONDON (Reuters) - Anheuser-Busch InBev is asking banks to underwrite up to $70 billion in debt financing to back its potential takeover of SABMiller , banking sources said.

U.S. consumer agency slams student loan servicers, eyes reforms

WASHINGTON (Reuters) - The U.S. consumer watchdog reported widespread failures in the servicing of student loans on Tuesday and urged new rules to protect borrowers.

BofA Issues Dramatic Junk Bond Meltdown Warning: This "Train Wreck Is Accelerating"

On Tuesday, Carl Icahn reiterated his feelings about the interplay between low interest rates, HY credit, and ETFs. The self-feeding dynamic that Icahn described earlier this year and outlined again today in a new video entitled "Danger Ahead" is something we've spent an extraordinary amount of time delineating over the last nine or so months. Icahn sums it up with this image:

The idea of course is that low rates have i) sent investors on a never-ending hunt for yield, and ii) encouraged corporate management teams to take advantage of the market's insatiable appetite for new issuance on the way to plowing the proceeds from debt sales into EPS-inflating buybacks. The proliferation of ETFs has effectively supercharged this by channeling more and more retail money into corners of the bond market where it might normally have never gone.

Of course this all comes at the expense of corporate balance sheets and because wide open capital markets have helped otherwise insolvent companies (such as US drillers) remain in business where they might normally have failed, what you have is a legion of heavily indebted HY zombie companies, lumbering around on the back of cheap credit, easy money, and naive equity investors who snap up secondaries.

This is a veritable road to hell and it's not clear that it's paved with good intentions as Wall Street is no doubt acutely aware of the disaster scenario they've set up and indeed, they're also acutely aware of the fact that when everyone wants out, the door to the proverbial crowded theatre will be far too small because after all, that door is represented by the Street's own shrinking deal ...

U.S. Home Prices Rose 5% in July

The Standard & Poor's/Case-Shiller 20-city home price index climbed 5 percent in July from a year earlier. It increased at a 4.9 percent annual pace in June.

Glencore fightback over debt fears lifts shares

JOHANNESBURG/LONDON (Reuters) - Glencore said on Tuesday it was strong enough to ride out current volatility in commodity markets, helping to lift the mining group's shares by a fifth.

Forget Glencore: This Is The Real "Systemic Risk" Among The Commodity Traders

Back in July, long before anyone was looking at Glencore (or Asia's largest commodity trader, Noble Group which we also warned last month was due for a major crash, precisely as happened overnight) which everyone is looking at now that its CDS is trading points upfront and anyone who followed our suggestion last March to go long its then super-cheap CDS can take a few years off, we had a rhetorical question:

Which will be first: Trafigura, Mercuria or Glencore

â€" zerohedge (@zerohedge) July 22, 2015

Judging by what happened less than two months later, it appears that we have our answer: for now at least, Glencore, which is now flailing and which Bloomberg reported moments ago is set to meet with its bond investors tomorrow (supposedly to allay their fears of an imminent insolvency), is firmly the "answer" to our rhetorical question.

And yet, something stinks.

First, a quick look at Trafigura bonds reveals that the contagion from the Glencore commodity-trader collapse, which "nobody could possibly predict" two months ago and which has rapidly become the market's biggest black swan, has spread and we now have a new contender. And while Trafigura's equity is privately held, it does have publicly-traded bonds. They just cratered:

Flexjet gets first Embraer Legacy jet anchoring mid-size program

SAO PAULO (Reuters) - Flexjet, which offers fractional ownership and leasing of private jets, is counting on Embraer's new Legacy 450 and 500 for the bulk of a mid-size business jet program that could grow beyond a quarter of its fleet, Chief Executive Mike Silvestro said on Tuesday.

With Shell's Failure, U.S. Arctic Drilling Is Dead

Submitted by Nick Cunningham via OilPrice.com,

Arctic Drilling in the U.S. is dead.

After more than eight years of planning and drilling, costing more than $7 billion, Royal Dutch Shell announced that it is shutting down its plans to drill for oil in the Arctic. The bombshell announcement dooms any chance of offshore oil development in the U.S. Arctic for years.

Shell said that it had completed its exploration well that it was drilling this summer, a well drilled at 6,800 feet of depth called the Burger J. Shell was focusing on the Burger prospect, located off the northwest coast of Alaska in the Chukchi Sea, which it thought could hold a massive volume of oil.

On September 28, the company announced that it had "found indications of oil and gas in the Burger J well, but these are not sufficient to warrant further exploration in the Burger prospect. The well will be sealed and abandoned in accordance with U.S. regulations."

After the disappointing results, Shell will not try again. "Shell will now cease further exploration activity in offshore Alaska for the foreseeable future." The company cited both the poor results from its highly touted Burger J well, but also the extraordinarily high costs of Arctic drilling, as well as the "unpredictable federal regulatory environment in offshore Alaska."

Shell will have to take a big write-down, with charges of at least $3 billion, plus another $1.1 billion in contracts it had with rigs and supplies.

Sh ...

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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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