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27Jan2016 Market CloseMarkets Down, WTI Crude Up, Tomorrow Will Probably Be Down Too

Written by Gary

U.S. markets closed sharply lower after the FOMC minutes were published. No changes were made and investors unhappy that Ms. Y didn't offer 'Hopium' of some sort. The DOW was down over 222 points, Spooz was down 1.1% and the small caps were down over 2%. WTI crude was volatile and is difficult to decide what it is going to do next.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Wall Street drops in wake of Fed statement

NEW YORK (Reuters) - Wall Street dropped sharply on Wednesday after the U.S. Federal Reserve frustrated investors hoping for a strong sign it might scale back future interest rate hikes because of recent financial and economic turmoil.

Oil jumps after Russia dangles prospect of OPEC cooperation

NEW YORK (Reuters) - Oil futures surged on Wednesday after Russia indicated there was a possibility of co-operation with OPEC, fanning hopes for a deal to reduce a global oversupply that sent prices to the lowest levels in over a dozen years last week.

Russians want to talk to OPEC about output, pipeline chief says

MOSCOW (Reuters) - Russian officials have decided they should talk to Saudi Arabia and other OPEC countries about output cuts to bolster oil prices, the head of Russia's pipeline monopoly said on Wednesday, remarks that helped spur a sharp rise in world prices.

Before arrest, U.S. sought Shkreli's communications with lawyer

NEW YORK (Reuters) - Days before Martin Shkreli's arrest for securities fraud, U.S. prosecutors obtained a secret court order ruling that communications between the former pharmaceutical executive and a corporate lawyer also under investigation were not protected by attorney-client privilege.

New U.S. single-family home sales race to 10-month high

WASHINGTON (Reuters) - New U.S. single-family home sales surged in December to their highest level in 10 months, the latest indication that the housing sector remains on a firmer footing despite a massive stock market sell-off and slowing economic growth.

Goldman CEO Blankfein to speak at one of first public events since cancer diagnosis

(Reuters) - Goldman Sachs Group Inc Chief Executive Lloyd Blankfein will speak at an upcoming financial services conference, marking one of his first public appearances since being diagnosed with lymphoma in September.

Fed keeps interest rates steady, closely watching global markets

WASHINGTON (Reuters) - The Federal Reserve kept interest rates unchanged on Wednesday and said it was "closely monitoring" global economic and financial developments, but maintained an otherwise upbeat view of the U.S. economy.

Fiat Chrysler 200 plant to shut six weeks on slack demand

DETROIT (Reuters) - Fiat Chrysler Automobiles will shut its Sterling Heights, Michigan plant, which makes the midsize Chrysler 200 sedan, for six weeks starting on Monday, the company said on Wednesday.

Fiat Chrysler ups 2018 financial targets, Jeep sales goal

MILAN (Reuters) - Fiat Chrysler Automobiles (FCA) raised the financial targets of its turnaround plan on Wednesday following a better-than-expected performance in North America and Europe and strong sales of its Jeep SUVs.

"Let Them Eat CaQE": Yellen Abandons Markets; Stocks Plunge

"F'ed Up"

Fed vs Mawkets https://t.co/VRiEASX4y9

— Dick Darlington (@Darlington_Dick) January 27, 2016

Let's start with the obvious - The Fed f##ked up... as September is now the next meeting when rates are evenb "maybe" expected to hike.

Post-Fed - things did not go well...

Nasdaq was the worst today, crushed by AAPL but The Dow was double-whammied by Boeing also... Dow lost 121 points from BA (-77) and AAPL (-44)

Absolute chaos in the volatility complex as The Fed statement hit...

...

Alberta Loses Most Jobs In 34 Years As Oil Crunch Cripples Labor Market

Times are tough in Alberta and to be sure, we've piled it on heavy when it comes to cataloguing the long list of pitiable outcomes that have accompanied crude's steep slide.

The province is at the center of Canada's dying oil patch and as crude extended its seemingly endless decline last year, Alberta saw oil and gas investment plunge by a third. That's bad news for authorities who count on resources for 30% of provincial revenues.

Rig activity fell by half in the first seven months of 2015 and as the job losses mounted, the sorrow deepened - literally. Suicide rates jumped by 30% and in Calgary commercial break-ins almost doubled from a year earlier, while bank robberies were up 65% and home invasions increased 52% (read more here).

Meanwhile, food bank usage spiked as those who used to be donors found themselves depending on the free meals for subsistence.

And speaking of food, prices for fresh fruit and vegetables are seeing double-digit inflation thanks to the plunging loonie.

All in all, a very bad situation indeed and on Tuesday we learned that the picture was actually materially worse than an initial round of statistics led us to believe.

œStatscan's annual revisions of its national Labour Force Survey data ratcheted up Alberta's net job losses last year to 19,600, from the 14,600 the statistical agency originally reported in its final 2015 survey released in early January, The Globe And Mail reports, adding that the losses ...

Wall Street Economists React To The Fed's Statement

After the Fed's statement, one thing was clear: the career economists at the Marriner Eccles building are very confused, admitting to hiking rates for the first time in nine years "even as economic growth slowed late last year". But more confused are the Wall Street economists who follow the Fed and are expected to interpret what the Fed says, means and hints, especially when said Fed has no clue what is going on, like right now - the same people who a month ago said, for example, predicted that a rate hike was bullish; the same people who blamed the economic slowdown in the winter of 2014/2015 due to China on... snow in the winter.

So while their opinions are utterly worthless, for the record, here is what the economisseds see in today's 558 words of sheer Fed confusion:

"When it comes to the statement, what's most obvious is the absence of content, not the presence. Nowhere did Yellen & Co. reference 'market volatility,' a euphemism for the global equity declines experienced in 2016....There's only one thing to learn from this barrel-of-oil-sized hole in the rather terse [Federal Open Market Committee] statement: March depends on job markets (still running strong) and inflation theory (no data, but the Fed believes)."

- Guy LeBas, Janney Montgomery Scott

"The first line of the statement leads with 'labor market conditions improved further even as economic growth slowed l ...

Why Lower Gasoline Prices Are Not Stimulating The Economy

Submitted by Tom McClellan via MCOscillator.com,

Fed officials and financial news reporters are collectively wondering why the economy seems to be slowing down, even though lower oil and gasoline prices ought to be a stimulative factor. If consumers are spending less of their money on gasoline, then they ought to have more to spend on other stuff, or so goes the reasoning. So why is it not working?

The problem is one of magnitude, and most analysts fail to take the time to do the math. So at the risk of boring you with arithmetic, let's look at some important numbers, with a bit of back-of-the-envelope math.

The EIA publishes data on consumption for a variety of energy products, including gasoline. In November 2015 for example (the most recent month for which there are data), Americans consumed gasoline at a rate of 358 million gallons per day. The 12-month average is 360 million gallons. That sounds like a really large number, but when you realize that there are roughly 322 million resident Americans, that works out to 1.11 gallons per day for every American.

The chart above shows the trend for that data. The high prices of just a couple of years ago sent people into dealerships to ...

Stocks Slide as Fed Keeps March on the Table

U.S. stocks fell after the Federal Reserve raised concerns about market turbulence and slow overseas growth, but didn't rule out a March rate increase.

Why the Fed Has the Stock Market Spooked

That the Federal Reserve may still raise rates this year amid a profits recession shows U.S. corporate performance is no longer a clear indicator of the domestic economy's strength.

Oil Surges on Speculation of Production Cuts

Oil prices gained Wednesday amid speculation about output cuts from the world's leading exporters.

27 January 2016 FOMC Meeting Statement: Economy Slowed and Federal Funds Rate Was Not Changed.

Econintersect: The Federal Open Market Committee (FOMC) - the board of directors of the Federal Reserve did NOT adjust the federal funds rate. This is likely because:

.... economic growth slowed late last year.

How much does it cost to go to the Super Bowl?

Average ticket price for Super Bowl 50 tops $5,000

Market Snapshot: Stocks fall as Fed acknowledges worry, but keeps rate hike on table

U.S. stocks erases earlier gains and turns lower Wednesday after the Federal Reserve left interest rates unchanged but said that œeconomic growth slowed since its last meeting in December

Summary of Economic Releases this Week

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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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