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17Dec2015 Market Update: Averages Headed Lower After Fed's Rate Decision, Oil Fractionally Lower, US Dollar Melting Up, Something Has To Give

Written by Gary

U.S. stocks fell today almost a percentage point as an energy-sector selloff clipped gains following the Federal Reserve's decision to raise interest rates for the first time in almost a decade.


Here is the current market situation from CNN Money

North and South American markets are mixed today. The Bovespa is up 1.07% while the IPC gains 0.06%. The S&P 500 is off 1.15%.

What Is Moving the Markets

Here are the headlines moving the markets. xxxxxxxxxxx

PayPal boosts maternity leave, sick time for U.S. employees

NEW YORK (Reuters) - Electronic payment company PayPal Holdings Inc said on Thursday it will increase its paid maternity and sick leave programs and offer time off for U.S. employees to volunteer and care for ill family members.

Apple names Apple Watch project head Jeff Williams as COO

(Reuters) - Apple Inc said it promoted Apple Watch project head Jeff Williams to the role of chief operating officer, filling a position that had been vacant since Tim Cook took over as chief executive in 2011.

Delta says fourth-quarter passenger unit revenue to fall less than expected

(Reuters) - Delta Air Lines Inc said it expected its passenger revenue per available seat mile (PRASM) to decline about 2 percent in the current quarter, less than it had expected.

Turing CEO Martin Shkreli arrested for securities fraud

NEW YORK (Reuters) - Martin Shkreli, a lightning rod for growing outrage over soaring prescription drug prices, was arrested in New York by the FBI on Thursday on securities fraud charges involving his former hedge fund and a pharmaceutical company he previously headed.

Ding-dong: Cerberus comes calling at Avon with $605 million investment

(Reuters) - Avon Products Inc said Cerberus Capital Management LP would take a 16.6 percent stake in the company and buy 80.1 percent of its North American business, in a $605 million deal that throws a lifeline to the struggling cosmetics maker.

U.S. labor market strengthening, factories struggling

WASHINGTON (Reuters) - The number of Americans filing for unemployment benefits last week fell from a five-month high, suggesting sustained labor market healing that could lead to further Federal Reserve interest rate hikes next year.

IMF chief Lagarde to face French trial over Tapie affair

PARIS (Reuters) - A French court has ordered Christine Lagarde, the head of the International Monetary Fund (IMF), to face trial over her role in a payout of some 400 million euros ($434 million) to businessman Bernard Tapie, her lawyer said on Thursday.

Wall Street lower as energy, materials stocks drag

(Reuters) - Wall Street looked set to snap a three-day rally on Thursday, dragged down by energy and materials stocks, a day after the Federal Reserve raised interest rates for the first time in nine years.

Oil prices down again on fresh supply build worry, dollar spike

NEW YORK (Reuters) - Oil prices fell as much as 2 percent on Thursday, with Brent trading not far from 11-year lows, as data showing fresh supply builds at the delivery point for U.S. crude futures added to worries about a global glut.

"In Short Janet, It's Too Late" - Albert Edwards Calls It With These Seven Charts

In the aftermath of the Fed's first rate hike, SocGen's famous skeptic and "Ice Age" deflationista, Albert Edwards, who formerly called Alan Greenspan an "economic war criminal", unloads on Yellen and says that not only is the Fed's hike too late, but that the "Yellen Fed will soon be treated with the same contempt the Greenspan Fed was in the aftermath of the 2008 financial crisis."

Cutting right to the chase, Edwards thinks the "Yellen Fed will go down in infamy as deliberately stoking up yet another massive financial bubble. But unlike the start of the last tightening cycle in 2004, this time the corporate bond market is already severely stressed and it may take just a tiny pin-prick to burst open the putrid excess."

To prove his point, Edwards shows the following chart which demonstrates the rampant bank credit growth unleashed by ZIRP, most of which has gone to fund stock buybacks as we showed in the past...

... and says that "in the wake of the 2001 recession, an extended period of corporate de-leveraging to unwind the excess of the tech bubble led the Fed to maintain loose monetary policy for far too long. By the time it eventually began to tighten, in June 2004, household debt growth rampant and eventually blew up the economy. This time around it will be no different, credit growth has already reached peak historical rates. In short Janet ?- It?s too late!"

He then attempts to answer what is perhaps the most important question: where in the business cycle is the US economy, for which he uses several charts, chief among which is the following which "nicely sums up the failure of the Fed?s strategy: the househol ...

"That's Not Supposed To Happen" - Yield Curve Slumps To Flattest In 9 Months

The Fed hiked... and the Treasury market threw up all over it, flattening the curve over 10bps in the last 16 hours (to 9 month lows). The reaction screams "policy error" as rate cut odds for January remain above rate-hike odds. Financials - who will benefit greatly from this rate hike if all the talking heads are to be believed - appears not to have got the flattening curve joke yet.

Not exactly an overwhelming vote of confidence!!!

Smashing 2s30s back below 200bps to 9-month lows...

Financials remain bid (just like they were in August...)

It's different this time.

Charts: Bloomberg

U.S. Stocks Fall After Fed-Inspired Rally

U.S. stocks fell Thursday as an energy-sector selloff clipped gains following the Federal Reserve's decision to raise interest rates for the first time in almost a decade.

Argentina's Peso Depreciates Sharply After Currency Controls Lifted

The peso lost nearly a third of its value against the U.S. dollar Thursday, a day after the new government of President Mauricio Macri said it was lifting currency controls to attract investors and kick-start the economy.

Beijing Probes Architects of Stock-Market Rescue

Having already investigated investors and brokerages in connection with a bungled summer stock-market rescue totaling more than $200 billion, Beijing is now probing the rescuers.

November 2015 Leading Economic Index Improved

Written by Steven Hansen

The Conference Board Leading Economic Index (LEI) for the U.S.improved this month - and the authors believe "the economic outlook for the final quarter of the year and into the new year remains positive".

Slide Show: Reagan's eagle gift to Thatcher and 4 other 'Iron Lady' items auctioned off for big bucks

Items given by Ronald Reagan to former U.K. Prime Minister Margaret Thatcher have grabbed the spotlight this month.

The Margin: New Orleans council votes on purging city of Confederate monuments

After months of heated public debate, the New Orleans City Council is holding a special meeting Thursday to vote on whether to remove four monuments tied to its Confederate past.

Europe Markets: European stocks rally after Fed 'strikes right balance'

European stock markets rally as the Federal Reserve's decision to raise U.S. interest rates for the first time since 2006 is seen as an expression of confidence in U.S. economy's strength.

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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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