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24Nov2015 Market Close: Markets Close Mostly Up, DOW Up 20 Points, Oil Remains In The 42's And Other Global Worries Haven't Gone Away

Written by Gary

Not much happened in this afternoon session, not surprising for a Holiday week. The averages did close up in the green, but flat and not very exciting as the oil glut, weak global finances and a host of other worries take front and center of the investors dinner plat. This is one of those weeks where it becomes a wait and see to what Mr. market has up his sleeve.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Roy Harvey to head Alcoa's commodities business post split

(Reuters) - Aluminum producer Alcoa Inc said it named Roy Harvey chief executive of its traditional aluminum smelting and refining operations, which would be separated from its faster growing plane and car parts business.

Indexes recover in cautious trade amid global tensions

(Reuters) - U.S. shares were up slightly in afternoon trading, driven by a rise in the S&P energy sector as oil prices rose, as investors focused on global politics after Turkey shot down a Russian warplane near the Syrian border.

Exclusive: Shire prepares to make new bid for Baxalta - source

ZURICH/LONDON (Reuters) - Drugmaker Shire is preparing to make a new takeover offer for U.S. biotech firm Baxalta that if successful will create one of the world's leading specialists in rare diseases, a source with direct knowledge of the situation said on Tuesday. The London-listed group has asked its advisers to renew its bid effort, the source said, almost four months after Baxalta rejected an unsolicited $30 billion offer that it said significantly undervalue

U.S. consumers and stores face off over depth of holiday discounts

NEW YORK/CHICAGO (Reuters) - Target Corp's 10 percent discount on a $30.49 pair of embroidered curtains was not nearly enough to entice Valerie Jenkins, shopping in Chicago the weekend before Thanksgiving.

Nine Fed banks called for discount rate hike: minutes

WASHINGTON (Reuters) - The number of regional Federal Reserve banks pushing for a hike in what commercial banks are charged for emergency loans rose to nine in October, a sign the U.S. central bank may be close to tightening monetary policy, minutes from its discount rate meeting showed on Tuesday.

German prosecutors launch tax evasion probe at Volkswagen

HAMBURG (Reuters) - German prosecutors have launched an investigation into suspected tax evasion in connection with cheating on emissions tests by Volkswagen , adding to the intense scrutiny of Europe's biggest carmaker.

Saks to start Black Friday sales early: Hudson's Bay CEO

(Reuters) - Black Friday comes early to Saks Fifth Avenue stores this year.

Pfizer to buy Allergan in $160 billion deal

NEW YORK (Reuters) - Pfizer Inc on Monday said it would buy Botox maker Allergan Plc in a deal worth $160 billion to slash its U.S. tax bill, rekindling a fierce political debate over the financial maneuver.

Fedex, TNT win U.S. approval to merge

WASHINGTON (Reuters) - Tennessee-based Fedex Corp and Dutch counterpart TNT Express have won U.S. antitrust permission to merge, according to a listing of approved deals the Federal Trade Commission issued on Tuesday.

Presenting SocGen's 5 Black Swans For 2016

If you’re the type who likes black swans this has been the month for you.

On the political front, Portugal’s Socialists, led by Antonio Costa, formed an alliance with the Left Bloc and the Communists on the way to overthrowing the Passos Coelho government and presaging a repudiation of Berlin’s brand of fiscal rectitude. This throws the country’s austerity program into doubt and sets up not only a confrontation with the troika, but also the potential loss of access to ECB QE should a deteriorating fiscal situation prompt a DBRS downgrade.

In Spain, Catalonia is in the midst of a secession bid which, depending on Catalan political infighting and how far Rajoy wants to push things ahead of national elections set for next month, could see a fifth of Spain’s GDP separate, causing Spanish debt-to-GDP to jump by some 25%.

As far as geopolitics goes, ISIS Sinai downed a Russian passenger plane killing all 224 people on board and then, not even two weeks later, ISIS proper waged war in the streets of Paris killing 130 people. As if those two bombshells weren’t enough, Turkey decided to shoot down a Russian fighter jet this morning.

Finally, 12 month forwards for the Saudi riyal seem to indicate that the market believes the three decade-old dollar peg is about to fall under pressure from slumping crude and falling FX reserves. BofAML calls the possibility of a Saudi depeg the “number one black swan event for the global oil market in 2016.â€

And those are just the black sw ...

Distressed-Debt Losses Worst Since 2008 - "It's Not Just Energy, It's Everything"

When buy the dip doesn't work. "Most distressed situations have not worked out in 2015," exclaims one distressed hedge fund manager facing significant losses on the year, "It wasn't just energy. It was anything with loads of leveraged debt on it." As Bloomberg reports, distressed hedge funds dropped 5% in 2015 through October, putting them on pace for their worst year since 2008, when they lost 25%... and November isn't looking like it will be much better.

Ugly!!

Hedge funds that specialize in the debt are grappling with their worst declines in seven years. As Bloomberg reports, funds managed by Knighthead Capital Management, Candlewood Investment Group, Mudrick Capital Management and Archview Investment Group all posted losses through October. And year-end bonuses at Wall Street desks that trade distressed debt could be slashed by a quarter, Options Group said.

After six years of easy-money central-bank policies kept over-leveraged companies afloat and left scant opportunities for traders who profit off the market's scrap heaps, a rout in commodities prices in 2014 presented what had seemed like a perfect chance to buy again. Instead, those prices only declined further this year, causing the debt of eve ...

"We're Now Just One Big Shock Away From A Global Downturn"

Submitted by Bill Bonner via Bonner & Partners (annotated by Acting-Man.com's Pater Tenebrarum),

Big Shock

The financial news continues to confound and confuse investors. The Fed is telling one story. The world economy is telling another.

What happens next?

The Fed is talking about increasing the federal funds rate - eventually getting rates back to "normal" - because the U.S. economy is so healthy. Meanwhile, the world heads toward deflation.

Says Ruchir Sharma, head of emerging markets and global macro at Morgan Stanley Investment Management:

"We are now just one big shock away from a global downturn, and the next one seems most likely to originate in China, where heavy debt, excessive investment, and population decline are combining to undermine growth..."

But it looks to us as though the global downturn is already here. First, the Baltic Dry Index is at a record low.

BDI

The Baltic has been hung out to dry - click to enlarge.

Here's Bloomberg ...

Oil Prices Rise on Turkey Jet Shooting

Oil prices rose on Tuesday after the Turkish military shot down a Russian jet fighter along the Syrian border and the dollar weakened.

U.S. Stocks Turn Higher, Buoyed by Energy Sector

U.S. stocks drifted higher in afternoon trading Tuesday, as concerns around the Turkish military shooting down a Russian jet fighter along the Syrian border subsided.

Marwood Group Settles SEC Charges

Marwood Group on Tuesday settled Securities and Exchange Commission charges over its handling of government information.

Deep Dive: 13 'Dividend Aristocrat' stocks with yields over 4%

These are investments to hold for the long run, regardless of rising official interest rates, writes Phil van Doorn.

The Wall Street Journal: Most Fed regional banks wanted discount-rate hike in October, minutes show

Nine of the Federal Reserve’s 12 regional reserve banks in October called for an increase in the central bank’s interest rate on discount-window loans, the latest sign that the Fed may be getting closer to raising short-term rates.

10 dividend stocks for 2016 with yields up to 15.6%

If income is your main objective, investment bank FBR has some ideas for you, says Phil van Doorn.

Summary of Economic Releases this Week

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Earnings Summary for Today

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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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