Midday U.S. markets dropping after ISM Manufacturing report this morning was a 'not so good (50.2 vs. 50.6 expected), lowest level since May of 2013. The health of the US economy has been in question for some time now, despite what the Fed heads want us to think.
Here is the current market situation from CNN Money
North and South American markets are lower today with shares in U.S. off the most. The S&P 500 is down 0.87% while Mexico's IPC is off 0.47% and Brazil's Bovespa is lower by 0.45%.
Thinking we were going to have a quiet session and closing in the green has to be retracted. As long as we remain in a downward trend in this sideways channel, anything could happen.
$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.
LONDON (Reuters) - British tech entrepreneur Mike Lynch on Thursday said he would file a claim against Hewlett-Packard for $150 million in damages over allegations the U.S company made about his role in the acquisition of his software company Autonomy in 2011.
LONDON (Reuters) - Katherine Garrett-Cox, one of the City of London's most high profile women CEOs, is to step down from the board of Alliance Trust in an overhaul of the fund manager which has faced pressure from activist investor Elliott to make changes.
In August, hedge funds blamed risk-parity funds for their dramatic underperformance.
In September, the underperformance continued however this time, with risk-parity funds supposedly buying stocks, one can't blame them. To be sure, some such as Ackman whose 20 million shares of Valeant are hurting badly, will blame the Martin Shkrelis of the world for the biggest biotech tumble in years, but others may have to bite the bullet and admit it is their own lack of ability to come up with alpha in a centrally-planned "market" that is the reason.
That, and idea "clustering", of course, because over the past few years the best performers have been the "hedge fund" hotels - stocks that have dozens if not hundreds of hedge funds invested and piggybacking on each other. The problem is that in the past two months it was the hedge fund hotels that have led to the biggest losses. Even the mainstream media finally discovered this little "short cut" to creating if not alpha, then levered beta.
A few days ago, Reuters reported that "new data shows that some of the industry's biggest firms' top 10 stock picks bear striking resemblances to each other."
You don't say....
The same four holdings appear on the top 10 lists of John Paulson's Paulson & Co and Nehal Chopra's Ratan Capital, according to a report Symmetric IO released on Monday.
The data also showed Coatue Management had five of the same top 10 picks as Whale Rock Capital Management, and four listings in the top 10 list of Stephen Mandel's Lone Pine were a ...
BERLIN (Reuters) - Volkswagen said on Thursday it would take longer than expected to investigate its rigging of vehicle emissions tests, raising the prospect of months of uncertainty as it grapples with the biggest business crisis in its 78-year history.
MILFORD, Mich. (Reuters) - General Motors Co told Wall Street on Thursday that its recovery is gathering momentum with improving margins, strong brands, new markets for high-tech vehicles, and prospects for stronger profits in coming years.
(Reuters) - The big three U.S. automakers - General Motors Co, Ford Motor Co and the U.S. operations of Fiat Chrysler Automobiles NV - reported a jump in September sales on Thursday as cheap gasoline and ultra-low interest rates drove demand for sport utility vehicles and pickup trucks.
Submitted by Andrew Zeitlin of Moneyball Economics
Connect the Dots
The University of Michigan's Consumer Sentiment dropped from 91.9 to 85.7 â€" the lowest level in a year.
Meanwhile the S&P 500 remains down, -5% year over year and -10% since July.
It's no coincidence that consumer sentiment stumbled at the same time that the stock market plunged.
Coming back from Summer vacations, households saw:
The deepest drop in 401K wealth in years
The most prolonged drop in years
It has been a shock because investors have been conditioned to ignore the dips; or better still, to buy the foolish dips (BTFD) because time-after-time the dips reverse within a few weeks and the market plows onward and upward. In July last year, the market tumbled 3% and then fully recovered within four weeks.
This time is very different. Household 401Ks tumbled 10% and remain down after ten weeks â€" deeper and longer. That's a big break from the normal routine. Another difference is that previous market drops had identifiable causes: a government sequester, a Greek bond collapse, and so on. Not this time, and that will create a lot more anxiety and uncertainty because without a clear reason for the collapse there can be no clear remedy.
Investors are asking what's wrong and they can't help but notice reports of negative economic news, from a slump in payrolls to slowing ...
The pace of growth at U.S. factories slowed in September while new jobless claims pointed to a tightening labor market, giving mixed messages on the economy's health that could complicate the Federal Reserve's plans to raise interest rates.
Both September and Q3 were market bloodbaths, periods most asset managers wish they could have completely avoided - perhaps they should have just sold in May? But it was not all red. As the following breakdown by Deutsche Bank shows there were quite a few asset classes that did quite well not only in September but in the third quarter. Here is the full breakdown.
* * *
Q3 2015 proved to be the weakest quarter for risk assets for some years and most market participants are probably glad to see the back of it. Indeed Q3 saw the poorest quarterly performance for the S&P 500 (-6.4%) and the Stoxx600 (-8.4%) since Q3 2011. It was also the worst quarter for the Nikkei (-14%) since 2010 whereas in EM the Shanghai Composite (-28%) and Bovespa (-15%) posted their worst quarterly scorecard since 2008.
In many ways September picked up many of the unresolved issues that we left behind in August. The sell-off in commodities and EM gained further momentum as recessionary fears deepened. That was enough to raise further questions around sustainability of global growth and DM valuations were certainly tested at various points. Macro themes aside, micro stories added their fair share of uneasiness for investors. The sharp sell-off in VW and Glencore were just two of those that amplified the weaknesses into the quarter end. Putting all those aside, the center stage event for September was clearly the seminal FOMC decision, in which the Fed decided against a hike even though it had been flagging it repeatedly earlier in the summer. This lower central bank confidence in the outlook has perhaps added further uncertainty to global markets.
Taking a closer look at the specific moves in Sept ...
WASHINGTON (Reuters) - The pace of growth at U.S. factories slowed in September while new jobless claims pointed to a tightening labor market, giving mixed messages on the economy's health that could complicate the Federal Reserve's plans to raise interest rates.
The headlines say construction spending grew. The backward revisions make this series very wacky - but the backward revisions this month were downward making the data worse than the headline view. In any event, construction spending is growing much faster than the economy in general.
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