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22Dec2015 Market Update: Large Caps Seeking Higher Ground, Crude Moderately Higher, Looking To Pare Gains, Investors Remain Leary Of Santa Making A Visit This Year

Written by Gary

Markets opened higher, but immediately became 'weak' and started a sideways dance. Small caps remain flat and the DOW is up 65 points and climbing. Crude has spent the morning melting further up into the low 36's and the US dollar has leveled out in the low 98's. Volume is up moderately, but volatility is not high enough for trading, might as well go home early.


Here is the current market situation from CNN Money

North and South American markets are higher today with shares in Mexico leading the region. The IPC is up 0.57% while U.S.'s S&P 500 is up 0.33% and Brazil's Bovespa is up 0.18%.

What Is Moving the Markets

Here are the headlines moving the markets.

Top 2015 U.S. stock funds stay defensive heading into 2016

NEW YORK (Reuters) - Top stock-picking fund managers won 2015 by aiming for brand name companies and avoiding the sector bets that brought down biotech and energy investors.

Exclusive: Seven big investment banks in UK paid just $30 million tax in 2014

LONDON (Reuters) - Seven of the biggest investment banks operating in London paid little or no tax in Britain last year, despite reporting billions of dollars in profits, a Reuters analysis of corporate filings shows.

Black box hedge funds lead winners from oil collapse

LONDON/NEW YORK (Reuters) - To make money from the sharp fall in oil prices this year, it helped if you weren't human.

Wall Street higher as crude edges up

(Reuters) - Wall Street was higher on Tuesday morning as crude oil prices recovered from multi-year lows and data showed that the U.S. economy grew at a healthy clip in the third quarter.

Ford recalls 313,000 cars for lighting failures

WASHINGTON (Reuters) - Ford Motor Co said on Tuesday it will recall 313,000 older cars for headlight failures linked to 11 crashes, as well as 4,700 vans, pick-ups and mid-sized trucks for assorted issues.

UAW says Volkswagen refuses collective bargaining for Tennessee workers

DETROIT (Reuters) - The United Auto Workers union has filed charges against Volkswagen AG, claiming the company is refusing to enter into collective bargaining for a portion of workers at its Chattanooga, Tennessee, factory, the union said on Tuesday.

U.S. existing home sales plunge; new rules seen as drag

WASHINGTON (Reuters) - U.S. home resales posted their sharpest drop in five years in November, a potential warning sign for the health of the U.S. economy although new regulations on paperwork for home purchases may have driven the decline.

Oil prices edge up from 11-year lows

LONDON (Reuters) - Oil prices on Tuesday were just above the lows reached in the previous session, as a bearish outlook for 2016 and weaker profits for refining oil products capped gains.

Abercrombie appoints Hollister brand chief its merchandising head

(Reuters) - Abercrombie & Fitch Co has promoted Fran Horowitz, the president of its Hollister brand, to the newly created role of chief merchandising officer in another effort by the company to make its apparel more attractive to teen shoppers.

China's Cost To Delay A Working Class Revolution: CNY11.1 Trillion And Rising

Ever since 2010 we have explained that one of the biggest risks facing the world is China's gargantuan mountain of debt, seen in its consolidated state in the following McKinsey chart...

... a mountain which has doubled from its 2007 levels of 158% of GDP and which as of Q4 2015 is well over 300%, as China races to catch up with world-record holder Japan and its 400%+ total debt/GDP.

As we have also explained repeatedly, the problem with China's debt load is that while it was China's historic leveraging spree in the years of the great financial crisis, the world's most populous nation, where debt has been rising exponentially, appears to be approaching its debt capacity load, and as such when the developed (and emerging) world slides into its next recession, there will be no "growth dynamo" which can add trillions in new debt to kick start world growth once more.

Another problem with China's financial system is that in mid/late 2014, Beijing decided to implement a purge of the country's shadow banking system, where "anything used to go", and which while long overdue resulted in the shuttering of one of the country's most permissive lending channels and led to a dramatic slowdown in the non-loan growth of China's Total Social Financing, its broadest consolidated monthly credit creation tracker. The immediate result was the global growth swoon from the winter of 2014 which was i ...

WTI Crude Trades At Premium To Brent For First Time In Over 11 Months

Just as we warned, since the US export ban 'lift' loomed, so WTI prices have shifted notably, having today converged to Brent's price for first time since January. It may have a lot further to fall as some analysts suggest the lifting of the export ban "is going to end up ultimately being bearish everything."

Last week we said...

Brent-WTI set to converge as US begins exporting oil

— zerohedge (@zerohedge) December 16, 2015

And 5 days later...

Brent-WTI has converged...


As commented last week,

As for the impact on global markets, OPEC's Secretary-General Abdalla El-Badri said Tuesday that "any change in U.S. oil policy will have 'zero' impact on global mkts because the country remains an impor ...

Do We Need The Fed? (Spoiler Alert: No!)

Submitted by Ron Paul via The Ron Paul Institute for Peace & Prosperity,

Stocks rose Wednesday following the Federal Reserve's announcement of the first interest rate increase since 2006. However, stocks fell just two days later. One reason the positive reaction to the Fed's announcement did not last long is that the Fed seems to lack confidence in the economy and is unsure what policies it should adopt in the future.

At her Wednesday press conference, Federal Reserve Chair Janet Yellen acknowledged continuing "cyclical weakness" in the job market. She also suggested that future rate increases are likely to be as small, or even smaller, then Wednesday's. However, she also expressed concerns over increasing inflation, which suggests the Fed may be open to bigger rate increases.

Many investors and those who rely on interest from savings for a substantial part of their income cheered the increase. However, others expressed concern that even this small rate increase will weaken the already fragile job market.

These critics echo the claims of many economists and economic historians who blame past economic crises, including the Great Depression, on ill-timed money tightening by the Fed. While the Federal Reserve is responsible for our boom-bust economy, recessions and depressions are not caused by tight monetary policy. Instead, the real cause of economic crisis is the loose money policies that precede the Fed's tightening.

When the Fed floods the market with artificially created money, it lowers the interest rates, which are the price of money. As the price of money, interest rates send signals to businesses and investors regarding the wisdom of making certain types of investments. ...

Even The Rich Are Cutting Back - Swiss Watch Exports Continue Collapse Despite Price Cuts

You know it's bad when... Following a dismal October, Swiss watch exports continued to collapse in November. As we noted previously, not only are luxury jet values dropping for the first time since 2009, London mansion prices plunging, San Francisco home sales collapsing, and Sotheby's laying people off, but, despite desperate major price cuts, Swiss watch exports tumbled 11% YoY (in USD terms), the worst November since 2008.

In Swiss Francs, this is the biggest November plunge in Swiss watches since 2009...

And in USD, the largest collapse since 2008...

As RBC's Rogerio Rujimori reports, it appears driven by the collapsing Chinese wealth bubble outflows via Hong Kong...

By region, the focus is likely to be on Hong Kong which registered declines of -28% despite the comparative easing by 19ppt (vs. -39% in Hong Kong, -18% in September and -18% in August), which suggests an underlying deceleration of 11 ppt. China expanded by 17% given the comparative also eased by 19ppt (vs. +5% in October, -13% in September and -39% in August), whilst USA declined by 5% and the UK expanded by 14% and Japan expanded by 9%.

All major regions experienced value and volume ...

U.S. Stocks Edge Higher as Oil Stabilizes

U.S. stocks gained on Tuesday amid a stabilization in commodity prices.

Tepper's Appaloosa Asks to See Terraform Power's Books

David Tepper's hedge fund Appaloosa Management LP has asked to see the books of Terraform Power Inc., the latest salvo between the hedge fund and affiliate company of SunEdison Inc.

SEC Pares Back Case Against SAC's Cohen

The Securities and Exchange Commission said it pared back its case against Steven A. Cohen and disclosed settlement talks with him, a reversal that reflects a major shift in the legal landscape since the government declared victory in its long pursuit of the hedge-fund billionaire's firm.

Richmond Fed Manufacturing Survey Jumps Into Expansion in November 2015.

Of the four regional Federal Reserve surveys released to date, three are in contraction and one is in expansion.

Deep Dive: 10 dividend stocks for safe income as interest rates rise

Verizon, Altria and eight other companies probably will be less hurt by the Fed's policy change, says Phil van Doorn.

London Markets: FTSE 100 stages comeback as oil majors, miners rise

Advances in commodity shares are guiding the benchmark FTSE 100 to for its first win in three sessions.

NewsWatch: Dow at the brink of rare feat for first time since 1939

Pre-election years are historically quite bullish for stocks, but that's not what we're seeing as 2015 winds down.

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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