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06Oct2015 Market Close: DOW Up 14 Points, Rest Of Averages In The Red On Low Volume And Fears Of A China Hard Landing Persist

Written by Gary

Dow ends 14 points higher, primarily because of the DuPont rally and WTI oil marked its highest settlement in 5 weeks. Healthcare companies lost ground and investors eyed upcoming quarterly reports that are expected to show a dip in corporate earnings. NASDAQ ended down 0.7%, but the averages as a whole remained in the sideways channel beginning 8-25-2015. Most of the remaining technical indicators are neutral to slightly bearish.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

S&P 500, Nasdaq end down as investors await earnings

NEW YORK (Reuters) - The S&P 500 and Nasdaq ended lower on Tuesday, ending a five-day winning streak, as investors eyed upcoming quarterly reports that are expected to show a dip in corporate earnings.

UAW threatens strike at Fiat Chrysler U.S. operations

DETROIT (Reuters) - United Auto Workers members are planning to strike at Fiat Chrysler Automobiles NV U.S. manufacturing plants as soon as Wednesday evening, threatening to bring manufacturing to a halt.

Exclusive: Bombardier offered majority stake in CSeries jet to Airbus - sources

MONTREAL/WASHINGTON/PARIS (Reuters) - Bombardier has approached European planemaker Airbus about selling a majority stake in the Canadian company's CSeries jet in order to shore up its depleted balance sheet, people familiar with the matter said.

Oil jumps $2, breaking range as supply seen ebbing

NEW YORK (Reuters) - Oil prices jumped more than $2 a barrel on Tuesday, breaking out of a month-long trading range on a mix of technical buying and industry talk as well as U.S. government data suggesting the global supply glut could be ebbing.

Santander evacuates Madrid office after likely 'white powder' hoax

MADRID (Reuters) - Spanish lender Santander evacuated the main building at its Madrid headquarters on Tuesday after envelopes containing white powder were sent to senior executives in what police said looked to have been a hoax.

Big U.S. firms hold $2.1 trillion overseas to avoid taxes -study

WASHINGTON (Reuters) - The 500 largest American companies hold more than $2.1 trillion in accumulated profits offshore to avoid U.S. taxes and would collectively owe an estimated $620 billion in U.S. taxes if they repatriated the funds, according to a study released on Tuesday.

Faint corporate praise greets TPP trade deal

SYDNEY/BRUSSELS (Reuters) - Early industry reaction to a long-sought trade agreement reached between 12 Pacific Rim countries on Monday amounted to faint praise that it could have been worse and umbrage that the United States appeared to be the biggest winner.

IMF cuts global growth forecasts again, cites commodity and China worries

LIMA (Reuters) - The International Monetary Fund cut its global growth forecasts for a second time this year on Tuesday, citing weak commodity prices and a slowdown in China and warned that policies aimed at increasing demand were needed.

How and Why Banks Will Seize Deposits During the Next Crisis

As we noted last week, one of the biggest problems for the Central Banks is actual physical cash.

The financial system is predominantly comprised of digital money. Actual physical Dollars bills and coins only amount to $1.36 trillion. This is only a little over 10% of the $10 trillion sitting in bank accounts. And it's a tiny fraction of the $20 trillion in stocks, $38 trillion in bonds and $58 trillion in credit instruments floating around the system.

Suffice to say, if a significant percentage of people ever actually moved their money into physical cash, it could very quickly become a systemic problem.

Indeed, this is precisely what caused the 2008 meltdown, when nearly 24% of the assets in Money Market funds were liquidated in the course of four weeks. The ensuing liquidity crush nearly imploded the system.

Because of this, Central Banks and the regulators have declared a War on Cash in an effort to stop people trying to get their money out of the system.

One policy they are considering is to put a carry tax on physical cash meaning that your Dollar bills would gradually depreciate once they were taken out of the bank. Another idea is to do away with actual physical cash completely.

Perhaps the most concerning is the fact that should a "systemically important" financial entity go bust, any deposits above $250,000 located therein could be converted to equity... at which point if the company's shares, your wealth evaporates.

Indeed, the FDIC published a paper proposing precisely this back in December 2012. Below are some excerpts worth your attention.

This paper focuses on the application of "top-down" resolution strategies that involve a single resolution authority applying its powers to the top of a financial group, that is, at the parent company level. The paper discusse ...

The Phrase That Launches Recessions

Submitted by Pater Tenenbrarum of Acting Man

It Can't Get Any Worse?

On Friday, shortly after the release of the payrolls report, we asked half in jest whether the time had finally come for the market to interpret bad news as bad news, and not as an opportunity to speculate on more central bank largesse. As someone remarked to us later: You had to ask!.

Photo credit: Paul Cross

Apparently a slightly later released news item informing us that factory orders hit the skids was taken as a buy signal of the 'it can't get any worse' sort. Normally it is considered bullish when the market rises on ostensibly bad news and very often, this is actually the correct interpretation of such market action. However, one must be careful when the fundamental backdrop is subject to severe deterioration. Readers may recall that commentary on the markets was brimming over with the same type of argument in late 2007 and early 2008. In October 2007, the market in its unending wisdom priced the shares of Fannie Mae at $73 for instance.

Is Overmedication The Culprit Behind America's Mass-Killing Spree?

On Friday, we profiled Chris Harper-Mercer, the 26-year old posthumously accused of murdering nine people at an Oregon community college last week.

The episode was the latest in a string of mass shootings in the US, all of which raise serious questions about whether the social fabric in America is beginning to rip apart at the seams.

As was the case with every similar scenario that’s unfolded on American soil over the past decade, what happened at Umpqua Community College has intensified the debate regarding how these types of events can be avoided. As the Washington Post notes, the US has seen more "mass" shootings than it has days in 2015:

There have been only 274 days this year. The shootings are captured in this calendar, drawn from the the Mass Shooting Tracker. The tracker draws some criticism because its definition is broader than the FBI's definition, which requires three or more people to be killed by gunfire. But the broader definition is nonetheless a useful one, because it captures many high-profile instances of violence â€" like the Lafayette theater shootings â€" that don't meet the FBI's criteria.

Democrats are quick to pounce on the gun control narrative, which of course leads directly to what they don't want to see. Case in point (via

California Mayor Forced to Hand Over Electronics and Passwords at Airport, Compares U.S. To Nazi Germany

Submitted by Mike Krieger of LibertyBlitzkrieg

California Mayor Forced to Hand Over Electronics and Passwords at Airport â€" Compares U.S. to Nazi Germany

“I think the American people should be extremely concerned about their personal rights and privacy. As I was being searched at the airport, there was a Latino couple to my left, and an Asian couple to my right also being aggressively searched. I briefly had to remind myself that this was not North Korea or Nazi Germany. This is the land of the Free.

â€" Anthony Silva, Mayor of Stockton, California

Just in case you’re still under the infantile illusion that you reside in a free country.

From ArsTechnica:

Stockton, California Mayor Anthony R. Silva attended a recent mayor's conference in China, but his return trip took a bit longer than usual. At the San Francisco International Airport (SFO) this week, agents with the Department of Homeland Security detained Silva and confiscated his personal cell phone among other electronics. According to comments from the mayor, that may not even be the most alarming part.

Unfortunately, they were not willing or able to produce a search warrant or any court documents suggesting they had a legal right to take ...

Global Stocks Lose Momentum

A selloff in health-care stocks deepened in afternoon trading Tuesday, threatening to overshadow a crude-oil rally that lifted energy shares.

Tech Debut to Test Appetite for IPOs

The outlook for the U.S. initial public offering market, and technology startups in particular, may hinge on the first tech deal to come this quarter, investors say.

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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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