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10Dec2015 Market Close: US Indexes Close Higher Breaking Three Day's Of Losses, Crude Continues To Slide, Market Showdown Coming Soon

Written by Gary

U.S. indexes finish higher, snapping 3 days of losses as many investors shrugged off a persistent slide in the oil markets that has sent the price of crude to multi-year lows.

Todays S&P 500 Chart

The testing of the SP500 resistance at 2070 and support at 2055, but on low volume, is sending caution messages to investors that are still long and ignoring how crude is helping move the markets in a negative manner. WTI continues to slide further to test the 2008, ~$32 levels in forthcoming sessions. The Bulls and Bears are soon to have a serious tug-o-war as Mr. Market hints at further losses.

The Market in Perspective

Here are the headlines moving the markets.

Ford R&D chief says automaker wants to develop ride hailing services

Dearborn, Mich. - (Reuters) - Ford Motor Co wants to develop ride hailing services that could compete with existing players such as Uber or Lyft, the company's head of research said Thursday.

Wal-Mart marketing head Stephen Quinn to retire: WSJ

(Reuters) - Wal-Mart Stores Inc's marketing head Stephen Quinn is expected to retire in January, the Wall Street Journal reported, citing people familiar with the situation.

Wall Street rises after three down days, tracks oil

(Reuters) - U.S. stocks were higher on Thursday after three days of declines but pared some gains as oil prices fell to near seven-year lows.

Special Report: Buybacks enrich the bosses even when business sags

NEW YORK(Reuters) - When health insurer Humana Inc reported worse-than-expected quarterly earnings in late 2014 " including a 21 percent drop in net income " it softened the blow by immediately telling investors it would make a $500 million share repurchase.

Morgan Stanley in $225 million deal with U.S. regulator over mortgage bonds

NEW YORK (Reuters) - Morgan Stanley has agreed to pay $225 million to settle claims that it sold toxic mortgage-backed securities to credit unions that later failed, the National Credit Union Administration said on Thursday.

Renault-Nissan edging toward compromise with France: sources

PARIS (Reuters) - Eleventh-hour talks to resolve a power struggle over French government influence at Renault are making headway, sources said, ahead of a Friday deadline set by the carmaker and Japanese alliance partner Nissan .

Boeing books $1.1 billion in orders, races to hit sales target

NEW YORK (Reuters) - Boeing Co booked 11 new jetliner orders worth about $1.1 billion at list prices on Thursday, leaving it with about 180 more sales to land this month to meet its 2015 target.

VW says only small group to blame for emissions scandal

WOLFSBURG, Germany (Reuters) - Volkswagen said on Thursday only a small group of employees was responsible for cheating U.S. diesel emissions tests and there was no indication board members were involved in the biggest business crisis in the carmaker's history.

Southwest Airlines saw 'unusual' discounting by rivals in November: CEO

NEW YORK (Reuters) - Southwest Airlines Co saw a lot of "unusual" discounting by larger U.S. rivals after bookings were lower than expected for last-minute travel around Thanksgiving, Chief Executive Gary Kelly told reporters in New York Thursday.

With One Week Left Until The Fed's Rate Hike, Nobody Knows If The Fed Can Actually Do It

One month ago, when the market was getting excited about the imminent Fed rate hike, now due less than one week from today, Jefferies analysts flagged a red flag about the imminent rate liftoff: fed, even at the Fed, know precisely how it will take place.

We cited Jefferies economists Ward McCarthy and Thomas Simons who in their December 16 note wrote that "indeed the liftoff date, the Fed is running out of time to be 'well before' raising rates." They added that as per the July 29-30 minutes, FOMC participants agreed the committee should provide additional information to the public regarding details of normalization well before first steps in reducing policy accommodation.

And yet, aside from some vague reassurance that the Reverse Repo - IOER corridor "should" work, and an extensive profile by the WSJ of the person tasked with conducting the liftoff, Simon Potter, there has been no detail on the topic. To Jefferies this is a glaring problem: "The lack of any discussion of liftoff logistics is puzzling to us and a potentially significant communication snafu."

Jefferies added that the Fed has never attempted to raise fed funds rate under "IOER regime" so lack of confidence "is not unreasonable." In the note, the authors write that still unresolved issues about liftoff logistics and normalization process include:

Issues include how to communicate liftoff, spread between IOER and RRP, as well as spread between RRP rate and fed funds

FOMC members still struggling with risks associated with RRP facility, including œappropriate size that would limit Fed's role in financial intermediation

And then there is u ...

Artist's Impression Of Obamacare's "Success"

Read my lips, no new 'taxes'...


Marissa Mayer's Value "Added": Yahoo Is Now Worth A Negative $13 Billion

The last time we looked at the "value" of Yahoo's core business was nearly a year ago, when the stock was trading at a comfortable $50/share, which however was entirely due to the result of YHOO's non-core business. This is how Citi estimate the value of Yahoo's core operations.

Yahoo! shares are down meaningfully during the last two trading days due to the decline in BABA shares, even though Yahoo! announced this week the best-case scenario for its shareholders in the form of a tax-free spin-off of its entire equity position in BABA (see our note here). The trading has created an unusual dislocation, in our opinion. Assuming 1) that the BABA stake trades at a 10% discount to BABA as a SpinCo (and, therefore, is worth $33/YHOO share at current BABA levels), and 2) that its 35% equity stake in Yahoo! Japan is valued using a 44% discount to the current market value (i.e., a 38% tax rate plus a 10% liquidity value), then the core Yahoo! business is currently valued at nearly a negative enterprise value of $1bn.

Citigroup then proceeded to explain how it makes no sense for the stock to trade as low as it did, noting that "BABA would have to drop below ~$74/sh in order for there to be further downside in YHOO shares from here, all else equal."

As of today, BABA is trading at $84 and YHOO stock is down more than 30% since Citi's "analysis."

But we are not here to mock Citi's equity strategists, who are merely placeholders to allow Citigroup to collect soft dollars from Citi clients. We are here to check on the updated enterprise value of Yahoo's core business, especially in the aftermath of news earlier this week that contrary to long-running expectations, Yahoo has decided not to spin off its BABA ...

High-Yield-Debt Fund Blocks Investor Withdrawls

Third Avenue Focused Credit Fund is blocking investors from withdrawing their money as it seeks to liquidate, in a rare and jarring move amid a severe downturn in the high-yield-debt market.

U.S. Stocks Climb, Paced by Energy Shares

U.S. stocks rose Thursday as investors snatched up beaten-down energy-company shares.

Junkyard Dog: How Oil-Fueled Debt Caught Up With Chesapeake

In the prolonged slump in commodity prices that is rattling the market for junk-rated energy debt, few firms have been hit harder than Chesapeake Energy.

December 2015 Livingston Survey: Forecasters Predict Steady Growth and Unemployment Rate Declines

from the Philadelphia Fed

The 25 participants in the December Livingston Survey predict fairly persistent output growth through the end of 2016. The forecasters, who are surveyed by the Federal Reserve Bank of Philadelphia twice a year, project that the economy's output (real GDP) will grow at an annual rate of 2.1 percent for the second half of 2015.

Currencies: Dollar snaps 3-day losing streak

The dollar edged higher against its main rivals Thursday, snapping a three-session streak of losses, as investors were seen turning their attention back to next week's widely anticipated Federal Reserve meeting.

Bond Report: Treasury yields climb to highest level of the week as rate-hike looms

Treasury yields climbed Thursday to their highest level this week as investors' expectations that the Federal Reserve will raise interest rates next week remained elevated.

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