After riding high with a fake-out bullish run the averages are sliding back to the unchanged line on low volume. Crude has taken a dip into the high 42's sending bearish signals to investors while the US dollar, on the other hand, has traded sideways in a consolidation mode. Short-term session indicators are modestly bearish and investors might want to choose to sit on their hands.
Here is the current market situation from CNN Money
North and South American markets are mixed. The Bovespa is higher by 1.87%, while the S&P 500 is leading the IPC lower. They are down 0.12% and 0.05% respectively.
$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.
BRUSSELS/LONDON (Reuters) - Anheuser-Busch InBev , the world's biggest brewer, launched its $100 billion-plus offer for nearest rival SABMiller on Wednesday and agreed to sell the latter's stake in U.S. venture MillerCoors to help win regulatory approval.
BEIJING (Reuters) - Alibaba Group Holding Ltd's total value of goods transacted during its Singles' Day shopping festival was 91.2 billion yuan ($14.32 billion), the Chinese e-commerce giant said in Beijing on Thursday.
(Reuters) - Britain's BAE Systems Plc is in advanced talks to sell its U.S. manpower and services businesses to private equity firm Veritas Capital Management LLC for more than $1 billion, according to people familiar with the matter.
FRANKFURT (Reuters) - The world's top two central banks accept they will face periodic market jolts as they move in opposite policy directions, senior officials say, with such risks inevitable given the hugely differing fortunes of the U.S. and European economies.
COPENHAGEN (Reuters) - Carlsberg , the Danish brewer that has long been struggling in Russia, said it would take $1.4 billion in charges and cut 2,000 jobs to position the business for a return to growth.
Today Macy's dropped a bomb with results that were nothing short of abysmal, and which confirmed that not only the "legendary" U.S. spender, the driving force behind 70% of US GDP, but also foreign shoppers have hunkered down to a greater extent than at any other time during the so-called recovery.
Quickly the apologists said that this is not an indicator of overall consumer weakness as much as it is lack of retail strength: the argument being that more spending goes to online markets.
There is just one problem: if that were the case, one would see a pronounced deterioration in spending uniformly across US cities. However, not only is that not the case, but there is a very clear distinction in which cities US consumers are doing well, versus cities in which they have been tapped out.
We know this courtesy of Bank of America's latest credit and debit card usage data which showed a dramatic divergence among the top 10 US metro areas.
As the chart below shows, there is a very distinct slow down in spending in various cities such as Atlanta and Washington DC, both of which saw a sudden and unexpected plunge in retail sales in October compared to their prior 6 month average; sales in Houston on the other hand continue to weaken â€" the region has experienced essentially no growth in nominal sales over the prior six months. On the upside, the US financial centers, Boston and New York, were the strongest as one would expect.
So for those wondering where the US consumer is all spent out, look no further than the cities at the bottom of this chart.
Submitted by Doug Noland via Credit Bubble Bulletin,
Bloomberg: "The October Jobs Report Gives Fed Officials a Green Light to Raise Rates."
With global "risk on" back in full swing, the focus of U.S. monetary policy belatedly shifts back to fundamentals. October's 271,000 was the largest jobs gain since last December. The unemployment rate is down to 5.0%, the low since April 2008. Average hourly earnings were up 2.5% y-o-y in October, the strongest performance since July 2009. The private sector added an eye-opening 268,000 jobs during the month, with Services employment up 241,000. Indicative of an extraordinarily unbalanced economy, no manufacturing jobs were created during October.
Existing home sales are on track for the strongest year since 2007. Automobile sales are booming as well. Monthly auto sales last month posted the strongest October since 2001 (from Dow Jones), with annual sales poised to test the all-time record. Kelley Blue Book is expecting 2015 sales 12% above 2014.
My point is not that the U.S. economy is robust - or even sound. From my perspective, booming home and auto sales reflect the upshot from years of ultra-loose financial conditions and a resulting "Bubble Economy". Importantly, the Federal Reserve's extreme monetary accommodation is grossly inappropriate considering U.S. financial and economic backdrops. Keep rates at zero, print a few Trillion, backstop booming financial markets long enough and spur unprecedented inflation in (perceived) Household Net Worth - and Bubble Economy Dynamics will eventually prevail. They have.
The Yellen Fed is now expected to raise rates next month. And, suddenly, there's some trepidation that "one and done" ...
Some of Americaâ€™s best-known companiesâ€"names like AT&T, CVS Health and Delta Air Linesâ€"likely will soon have to effectively boost the debt they report on their balance sheets by tens of billions of dollars.
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