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11Dec2015 Market Update: US Averages Slip 1.5%, Crude Oil Testing 7 Year Lows, Expect Volatility

Written by Gary

Wall St. slumps more than 1.5 percent as all major indexes extended losses today, falling more than 1.5 percent, and were on track for their worst weekly performance in a month as growing oversupply concerns dragged down crude oil prices to their 7-year lows.


Here is the current market situation from CNN Money

North and South American markets are broadly lower today with shares in U.S. off the most. The S&P 500 is down 1.60% while Mexico's IPC is off 1.18% and Brazil's Bovespa is lower by 0.28%.

What Is Moving the Markets

Here are the headlines moving the markets.

Wall St. slumps more than 1.5 percent as oil plumbs seven-year low

(Reuters) - All three major indexes extended losses on Friday, falling more than 1.5 percent, and were on track for their worst weekly performance in a month as growing oversupply concerns dragged down crude oil prices to their 7-year lows.

Wells Fargo to move securities arm to New York's West Side

(Reuters) - Wells Fargo & Co is moving the New York headquarters of its Wells Fargo Securities arm to Manhattan's West Side, to 30 Hudson Yards, which is currently under development, the company said in a statement.

Which stock sectors will Fed rate hike help most? History no guide

NEW YORK (Reuters) - It has been so long since the Federal Reserve raised interest rates that U.S. stock market investors probably should not look to past rate hike cycles for clues about potential winners and losers.

Dow, DuPont set $130 billion megamerger, could spark more deals

(Reuters) - Chemical titans DuPont and Dow Chemical Co agreed to combine in an all-stock merger valued at $130 billion, a move that could trigger more consolidation, please activist investors and generate tax savings while drawing scrutiny from regulators.

U.S. regulators weigh limiting funds' use of derivatives

WASHINGTON (Reuters) - U.S. regulators are considering restrictions on how mutual, exchange-traded and other funds can use derivatives, with the Securities and Exchange Commission head saying she is concerned that investors are exposed to too much risk.

Renault-Nissan reaches deal with France, ending power struggle

PARIS (Reuters) - Renault said on Friday it had reached agreements with Japanese partner Nissan and the French government to end an eight-month dispute over increased state influence on the carmaking alliance.

U.S. consumer spending gauge rises strongly; producer prices up

WASHINGTON (Reuters) - A gauge of U.S. consumer spending rose solidly in November, suggesting enough momentum in the economy for the Federal Reserve to raise interest rates next week for the first time in nearly a decade.

China's Fosun billionaire founder Guo assisting authorities with investigation

HONG KONG (Reuters) - Fosun International said on Friday its Chairman Guo Guangchang, one of China's best-known entrepreneurs, is assisting authorities with an investigation, after an earlier report said the group lost contact with its billionaire founder.

The Fed Awakens

LONDON (Reuters) - After years of waiting, it's finally here. No, not the new "Star Wars" movie: Fed week.

Mystery "You Know It's A Top When" Chart Of The Day

Presented with no comment...

The Answer is here (don't look until you have had a guess!)

Carl Icahn Warns "Meltdown In High Yield Is Just Beginning"

Amid the biggest weekly collapse in high-yield bonds since March 2009, Carl Icahn gently reminds investors that he saw this coming... and that it's only just getting started!

As we warned here, and confirmed here, something has blown-up in high-yield...

With the biggest discount to NAV since 2011...

The carnage is across the entire credit complex... with yields on 'triple hooks' back to 2009 levels...

As fund outflows explode..

And here's why equity investors simply can't ignore it anymore...

What China's Stunning Announcement Means

One of the catalysts for today's selloff was the thoroughly unexpected announcement by the Chinese Foreign Exchange Trade System (part of the PBOC), which as we said earlier, hints at substantially more devaluation of the Chinese currency, a currency which as is well-known, is pegged to a dollar which has been soaring in the past year, and which many believe will continue to soar after the Fed hikes rates.

This is what the CFETS said:

... it is consistent with international practice that CFETS publishes its RMB exchange rate index. Since the beginning of 2015, the trend of this index has been relatively stable. The index is 102.93 on November 30th, appreciated 2.93% from the end of 2014. This shows that, even though RMB has depreciated against USD since the beginning of this year, it has appreciated modestly against a basket of currencies. Therefore, RMB is relatively a strong currency among the major international currencies.

Lots of words to say one thing, China has revealed its own trade-weighted index, and this is how we explained why first thing this morning: "the Trade-Weighted Yuan is still too strong."

Yes, China will henceforth look at the Yuan not only relative to the USD but relative to the currencies of all its trade partners (since the USD keeps surging and on a relative basis, China's deval to the USD means nothing at all relative to all other currencies).

Why is this a big deal? Because as frequent readers will recall, as we noted on August 11, just hours after Chin ...

The Least Surprising Stat Of The Week: Corporate Insiders Are Dumping Their Stock

Submitted by John Rubino via DollarCollapse.com,

Here's one for the "actions speak louder than words" file:

Massive insider selling spurs stock market concerns

(CNBC) - Corporate insiders have been selling their shares at near-record levels, and according to some, this could be a sign for outside investors to start selling as well.

Investment research firm TrimTabs reported on Wednesday that insider selling reached $7.6 billion for the month of November, the fourth-highest monthly level on record. For some this may be an alarming indicator, as corporate insiders tend to have more knowledge than public shareholders on the inner workings of the company, and what may drive stock prices up or down.

"Historically when insiders are selling heavily it's not the greatest sign," TrimTabs' chief executive, David Santschi, told CNBC in a phone interview Wednesday. "I'm surprised given the valuations in the market that they're not selling more than they are."

According to Todd Gordon of TradingAnalysis.com, this combined with widening disparities in stock leaders and laggers could spell some short-term trouble for the market.

Why isn't it a surprise that insiders are bailing? Because they see the reality of their businesses up close and personal. Revenues have been falling for the past ye ...

U.S. Oil Falls Below $36 a Barrel

Oil tumbled to fresh lows Friday, with the U.S. benchmark price slipping below $36 a barrel after a top energy watchdog said low prices are taking a toll on supply but that isn't yet enough to relieve the global crude glut.

Chinese Move Would Loosen The Yuan's Peg to the Dollar

China's central bank signaled its intention to change the way it manages the yuan's value by potentially loosening its peg to the U.S. dollar and instead letting it track the currencies of its broader trading partners.

DuPont-Dow Deal Aims for Cost Cuts Totaling $3 Billion

Dow Chemical and DuPont announced Friday that they have agreed to merge, fusing two of the U.S.'s oldest companies into a chemical giant currently worth about $130 billion.

04 December 2015: ECRI's WLI Growth Index Again Has Moderate Improvement But Remains In Contraction

ECRI's WLI Growth Index which forecasts economic growth six months forward - improved but remains in negative territory. This index had spent 28 weeks in negative territory, then 15 weeks in positive territory - and now is in its 17th week in negative territory.

London Markets: FTSE 100 ends below 6,000, marks biggest weekly fall since August

U.K. stocks were mauled Friday as commodity shares and oil prices tank.

5 things that show the junk-bond market is in big trouble

Capital flight, spiking yields, rising defaults and a lack of liquidity are all flashing red lights in the market for risky debt.

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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