US averages moved lower on moderate volume and traded sideways in an exaggerated sea-saw fashion for most of the morning on very low investor participation. WTI oil is trading sideways in the mid 44's and the US dollar is testing mid 99 levels.
Here is the current market situation from CNN Money
$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.
NEW YORK (Reuters) - Verizon Communications Inc is exploring a sale of its enterprise assets which could be worth as much as $10 billion, according to people familiar with the matter, as the largest U.S. wireless carrier seeks to focus on its core business.
WASHINGTON (Reuters) - U.S. President Barack Obama on Friday rejected the proposed Keystone XL oil pipeline from Canada in a victory for environmentalists who have campaigned against the project for more than seven years.
(Reuters) - U.S. stock indexes were slightly lower in afternoon trading on Friday after a stronger-than-anticipated jobs report hardened the chance that the Federal Reserve would finally raise interest rates in December.
WASHINGTON (Reuters) - U.S. job growth surged in October and the unemployment rate hit a 7-1/2-year low of 5.0 percent in a show of economic strength that makes it much more likely the Federal Reserve will raise interest rates in December.
HAVANA (Reuters) - About 50 American businesses came to Havana this week for a trade expo, many of them intrigued but still unclear how to make money in a Communist-ruled country of 11 million people who have little purchasing power.
NEW YORK (Reuters) - Oil prices were down for a third straight day on Friday, on track to their third weekly decline in four, as the dollar rallied on expectations of a rate hike before the year-end after strong U.S. jobs growth for October.
By now it is common knowledge that over the past two years the primary source of stock buying have been corporations themselves (recall Goldman's admission that "buybacks have been the largest source of overall US equity demand in recent years") with two consecutive years of near record stock repurchases. However, now that a December rate hike appears practically certain following the "pristine" October jobs report, suddenly the question is whether the recent strong flows into bond funds will continue, and generously fund ongoing repurchase activity.
The latest fund flow report from BofA puts this into perspective
The increase in interest rates is starting to impact US mutual fund and ETF flows. Hence, the inflow into the all fixed income category declined to +$0.96bn this past week (ending on October 4th) from a +$2.80bn inflow the week before... Outflows from government funds accelerated further to -$2.43bn this past week from -$1.73bn and -$1.00bn in the prior two weeks, respectively.
But more concerning for corporations than even fund flows, which will surely see even bigger outflows now that both yields are spreads are set to blow out making debt issuance far less attractive to corporations whose cash flows continue to deteriorate, is what the NY Fed reported as activity by Primary Dealer, i.e., the most connected, "smartest people in the room" who indirectly execute the Fed's actions in the public markets, in the most recent week.
As the charts below show, the Primary Dealers aren't waiting for the December announcement to express how they feel about their holdings of both Investment Grade and Junk Bond (mostly in the longer, 5-10Y, 10Y+ maturity buckets where duration risk is highest).
The dollar surged against its peers Friday, after a report showed that the U.S. economy created more jobs than expected last month, paving the way for the Federal Reserve to raise interest rates in December.
Valeant Chief Executive Michael Pearson was forced to sell a big chunk of his company stock Thursday after a lender called in a loan backed by the shares, in the latest twist for the companyâ€™s battered stock and embattled leader.
ECRI's WLI Growth Index which forecasts economic growth six months forward - again declined and remains in negative territory. This index had spent 28 weeks in negative territory, then 15 weeks in positive territory - and now is in its 12th week in negative territory. ECRI also updated their inflation gauge and is discussed below.
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