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09Dec2015 Market Close: Markets Closed Down For Third Session, US Dollar Slips Further And Tests Support With WTI Oil

Written by Gary

U.S. stocks closed to finish down today, led by a selloff in technology and consumer discretionary sectors. The major indexes posted losses for a third straight day after failing to continue a mid-day rally because of a short-lived crude rebound. Small caps closed down over 1.5% while the large caps fared slightly better.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Wall St. falls on profit taking ahead of expected Fed rate hike

(Reuters) - U.S. stocks were down late on Wednesday after reversing course earlier in the day as oil resumed its decline and investors took profits ahead of a Federal Reserve meeting next week that is expected to result in an interest rate hike.

Dow, DuPont soar on prospect of $130 billion chemicals merger

(Reuters) - Merger talks between Dow Chemical Co and DuPont to create a chemicals titan with a $130 billion market value lifted Dow shares to a record on Wednesday and put DuPont on track for its biggest daily gain in more than six years.

Yahoo reverses course on plan to spin off Alibaba stake

SAN FRANCISCO/BENGALURU (Reuters) - Yahoo Inc shelved plans to spin off its stake in Chinese e-commerce giant Alibaba Group Holding Ltd on Wednesday, under pressure from activist investors worried about billions of dollars in taxes, and said instead it is looking at creating a separate company to hold the rest of its assets.

Citi to take $300 million 'repositioning charge' in fourth quarter

(Reuters) - Citigroup Inc will take a $300 million "repositioning charge" in the fourth quarter, Chief Financial Officer John Gerspach said on Wednesday.

El Nino investment options range from pest control to ski resorts

NEW YORK/CHICAGO (Reuters) - As the El Niño weather phenomenon makes the U.S. Northeast warmer, the Midwest drier, and the South and the West wetter this winter, Eric Marshall, portfolio manager of the $2 billion Hodges Small Cap fund, is not one of those people who just talks about the weather. He's doing something about it.

Baker Hughes deal likely to close in 2016: Halliburton executive

HOUSTON (Reuters) - Oilfield services company Halliburton's proposed $35 billion acquisition of rival Baker Hughes Inc will likely close in 2016 instead of this year as talks with U.S. regulators continue, a Halliburton executive said on Wednesday.

Morgan Stanley begins layoffs in credit division

NEW YORK (Reuters) - Morgan Stanley this week cut staff covering short-term credit and regional broker-dealers, after a quarter in which the bank posted a 42 percent drop in bond trading, several sources told Reuters.

United Airlines to stop flying to Dubai

(Reuters) - United Airlines on Wednesday said it will cancel flight service between Washington and Dubai starting in late January, meaning no U.S. passenger carrier will fly direct to the Gulf states.

Exclusive: Credit Suisse, Julius Baer eye bids for BTG Pactual's Swiss unit - sources

LONDON/SAO PAULO (Reuters) - Credit Suisse and Julius Baer are among a handful of banks vying to buy the Swiss private-banking arm of embattled Brazilian investment bank Grupo BTG Pactual SA in a cut-price deal, sources with direct knowledge of the talks told Reuters on Wednesday. Zurich-based Credit Suisse is exploring an offer that would value BSI at less than 1 billion Swiss francs ($1.01 billion), one of the sources said, speaking on condi

Carnage In Currency-Land - Dollar Dump Sparks Stock Slump

Well that escalated quickly...

The big story of the day - as long as you don't watch CNBC - was the bloodbath in currencies. China's devaluation to 4 year lows overnight...

Appears to have acccelerated a shift away from the USDollar across all the majors... (biggest USD drop ex-ECB since the post-China devaluation collapse) - the only thing saving the USD modestly was weakness in commodity currencies (AUD and CAD)...

Slamming the USD to 6-week lows... with the biggest 5-day drop since China devalued

Some context for that move are evident in the world's most used carry currency - USDJPY crashed...

And in EURUSD, which h ...

Something Did Blow Up In Junk

Submitted by Jeffrey Snider via Alhambra Investment Partners,

Now that Kinder Morgan has come out with a massive dividend cut, I think it will get harder to ignore that this isn't just about crude oil prices and the death of "transitory." There is a financial element here that is perhaps even more important.

Kinder Morgan Inc., the biggest North American oil pipeline operator, cut its 2016 dividend by 74 percent as the free-fall in crude markets reduced cash flow needed to cover payments on $41 billion of debt.

Kinder Morgan stockholders will receive a payouts totaling 50 cents per share next year, the Houston-based oil and natural gas shipper said Tuesday in a statement. As recently as Nov. 18, the company was promising investors a 6 percent to 10 percent increase from the $2 per share it budgeted for this year, which would have meant payouts of $2.12 to $2.20. [emphasis added]

In the space of just three weeks, the company went from expanding its dividend to cutting it by three-quarters? That is far, far more serious than just oil trading below $40 once more. Again, as noted from Anglo American's earlier statement, you have to believe that the huge and dramatic turmoil in junk right now is playing a role in these decisions. That includes not just 2008-level prices recently, but also much, much more discrimination in trying to float anything (cov ...

Corporate Loan Charge-Offs And Delinquencies Surge

Submitted by Pater Tenebrarum via Acting-Man.com,

Another Bump Higher

In one of our recent updates on the weakness in the manufacturing sector we have mentioned the surge in the sum of charge-offs and delinquencies of commercial and industrial loans at US banks (hat tip to our friend BC, who inspired the chart below). As we were arguing at the time, this is a sign that inflationary US bank credit expansion to businesses will likely continue to stall and as a result US money supply growth should continue to decelerate.

It turns out that this particular growth rate has recently increased further:

Charge-offs and Delinquencies

Growth in charge-offs and delinquencies in commercial and industrial loans (black line, left hand scale) continues to accelerate - in spite of the fact that the Federal Funds rate (red line, rhs) has officially not even been hiked yet - click to enlarge.

What makes this chart so interesting is that similar accelerations in charge-offs and delinquencies have previously occurred shortly before recessions, whereby "shortly" is an elastic term: the lead times are obviously varying from case to case. Noteworthy is also the speed of the recent acceleration in this trend. We don't think this is a good sign for the US economy.

Transportation Sector Woes

Note i ...

Looking for an Oil Play? Try the Permian Basin

Shares of Permian energy producers are among the top-performing energy stocks in an otherwise woeful year for the sector.

U.S. Stocks Lose Steam as Oil Turns Lower

U.S. stocks fell Wednesday as the price of oil struggled to stabilize.

Investors Keep Faith in Southern European Bonds

Investors are betting that the European Central Bank's massive money-printing effort will bridge fissures in the eurozone's fiscal landscape.

November 2015 Thumbtack Small Business Sentiment Improved Marginally.

from Thumbtack

-- this post authored by Jon Lieber

Our November survey of nearly 18,000 small business owners showed that the current sentiment of these professionals is up slightly, and the sharp decline in expectations about the future that we have seen since March of this year has flattened out:

63.6% Of The Population Worked At Some Point In 2014. Little Changed From 2013.

from the Bureau of Labor Statistics

A total of 159.1 million persons worked at some point during 2014. The proportion of the civilian noninstitutional population age 16 and over who worked at some time during 2014 was 63.6 percent, little different from 63.5 percent in 2013.

Market Snapshot: Stocks fall for third straight session on unrelenting oil rout

U.S. stocks fell for a third-straight day Wednesday, with the S&P 500 joining the Dow industrials in negative territory for the year.

America's middle class has lost nearly 30% of wealth

There are now more middle income families' with less of the country's wealth.

Will Yahoo be bought by a big media company?

Yahoo's best suitors might be media conglomerates, one analyst says

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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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