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09Feb2016 Market Close: US Markets End Tumultuous Session Dropping Just Into The Red, DOW Down 13 Points, Crude Settles In The 28's

Written by Gary

US markets closed down, but significantly off morning lows ending a choppy and struggling market. WTI crude sold off dramatically this afternoon as warnings of serious oversupply and tumbling stock markets around the world spooked investors. U.S. stocks reached into the solid green late in the session, but investors remained cautious and pushed the averages into the red.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

In cloud stock tumult, investors give valuations a reality check

SAN FRANCISCO (Reuters) - Global economic uncertainty and worries about weak spending on information technology are forcing investors in cloud computing stocks and related enterprise companies to take a reality check.

Monsanto to pay $80 million in SEC settlement over Roundup earnings

WASHINGTON (Reuters) - Monsanto Co will pay $80 million to settle civil accounting violations after it allegedly misstated its earnings in connection with its top-selling Roundup product, U.S. securities regulators said on Tuesday.

Daimler recalls 840,000 vehicles in U.S. for airbag concerns

WASHINGTON/FRANKFURT (Reuters) - German automaker Daimler said on Tuesday it would recall 840,000 U.S. vehicles with Takata airbag inflators that could be defective, a step that would result in a charge of 340 million euros ($383.96 million).

Amazon expands logistics reach in China

SAN FRANCISCO/SHANGHAI (Reuters) - Amazon.com Inc is aggressively expanding its logistics operations in China as part of a broader effort to control the rising cost of shipping billions of packages.

More Americans quitting jobs as labor market strengthens

WASHINGTON (Reuters) - U.S. job openings surged in December and the number of Americans voluntarily quitting work hit a nine-year high, pointing to labor market strength despite a slowdown in economic growth.

Yellen faces tough sell on Fed rate hikes in Congress

WASHINGTON/SAN FRANCISCO (Reuters) - Federal Reserve Chair Janet Yellen will defend the U.S. central bank's first rate hike in a decade and likely insist that further rises this year remain on track, albeit at a slower pace, when she addresses Congress on Wednesday.

Wall Street rallies late; biotechs, materials boost

(Reuters) - U.S. stocks rose in a late-day rally on Tuesday afternoon, helped by gains in biotechs including Gilead and in materials shares.

Burberry sues J.C. Penney for trademark infringement

NEW YORK (Reuters) - Burberry Group Plc , the British luxury fashion brand, sued J C Penney Co Inc on Tuesday, accusing the U.S. retailer of selling "scarf coats" and jackets featuring exact copies of its trademarked "Burberry check."

WTI Crashes To $27 Handle As US Energy Credit Risk Spikes Above 1500bps To Record Highs

BTFD?

Because nothing says stability like record high credit risk...

And the effective yield on US HY Energy credits has broken above 20% - 400bps above 2008 crisis highs...

Woeful 3 Year Auction: Tailing Yield, Plunging Bid To Cover, Sliding Indirects

One would imagine that in a market as skittish for risk as this one, that selling $24 billion in 3 Year paper would be if not as easy as pie, then as simple as last month's issuance, when not a cloud was visible when the Treasury sold 3 Year paper. One would be wrong, because moments ago the US Treasury managed to sell precisely that amount in February 2019 paper, however at a notable concession to the When Issued, with the high yield of 0.844% tailing the When Issued by 0.7 bps, while the Bid to Cover of 2.742 was the lowest since July of 2009.

The internals were likewise ugly: while the Directs of 15% were modestly higher than the 11% TTM average, the Indirect takedown tumbled from 62.8% to 41.5% the lowest since November, while Dealers were left holding 43.5% of the final auction, far higher than last month's near record low 27.8%, and suggesting the foreign central banks may have had their fill of short-term paper.

The question then is why was demand for the short-end so weak at a time when the Fed itself may be relenting and not only halting its rate hike, but proceeding with outright NIRP, something which would lead to major capital gains for anyone who bought into today's auction. The answer may be revealed as soon as tomorrow during's Yellen's semi-annual congressional testimony.

World Equity Market "Wealth" Crashes $6 Trillion Below 2007 Highs

Global equity market investors have lost a stunning $16.5 trillion of their newfound CB-fueled "wealth" in the last six months. This has erased half of the gains from the 2011 lows (but of course leaves all the debt created still in place). However, what is perhaps more troubling given the unprecedented money-printing since the last crisis peak, is that global equity market "wealth" is now down 10% from its November 2007 prior highs.

Trillions of money printed and debt created and equity "wealth" is now down $6 trillion from the 2007 highs...

Put another way - your plan failed CBs!

U.S. Stocks Waver

U.S. stocks steadied late in the session, but investors remained cautious after a sharp selloff this year.

Japan Markets Shaken as Investors Seek Shelter

Japanese stocks tumbled and the benchmark government bond yield fell into negative territory for the first time, as a global flight to safety threatened to unravel the delicate market balance that Prime Minister Shinzo Abe and the Bank of Japan have tried to build.

Oil Settles Below $28 a Barrel

Oil sold off dramatically all of Tuesday afternoon as warnings of oversupply and tumbling stock markets around the world highlight the worst-case possibilities for a struggling market.

Ackman's latest Herbalife stab fails to thwart stock

Herbalife was the target of Bill Ackman once again on Tuesday " this time via a 20-minute mini-documentary.

Currencies: Dollar falls to 15-month low vs. yen

The dollar plummeted Tuesday to its weakest level against the yen since November 2014 as anxious investors bought into perceived haven assets like gold, government bonds and the Japanese currency.

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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