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18Feb2016 Market Update: Wall Street Lower Today, Crude Falls After A Rise In Inventories, Oil Bulls Say Nothing To Worry About, Party On!

Written by Gary

US averages fell solidly below the unchanged line at the opening, but rose above the morning lows to remain in the red, but flat. Today's retreat snaps a three-day rally after a slump in Wal-Mart weighed on retail stocks and that oil prices have retreated. An expected jump in inventories reported by the EIA, along with a story that the Saudis say they won't cut production soured oil bulls.


Here is the current market situation from CNN Money

North and South American markets are lower today with shares in Brazil off the most. The Bovespa is down 0.46% while U.S.'s S&P 500 is off 0.39% and Mexico's IPC is lower by 0.24%.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 53%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 49%
Investors Intelligence sets the breath Above 50 bullish 31.8%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold.

62.06

StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 23.12%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 35.76%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 45.80%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 17.85
StockChart.com Consumer Discretionary ETF (XLY) As long as the consumer discretionary holds above [66.88], all things being equal, it is a good sign for stocks and the U.S. economy 72.75
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 9,522

What Is Moving the Markets

Here are the headlines moving the markets.

Citigroup plans to exit retail banking in Argentina, Brazil - Bloomberg

(Reuters) - Citigroup Inc plans to exit retail banking in Argentina and Brazil, Bloomberg reported, citing a person familiar with the matter.

Wal-Mart forecasts tepid sales growth; stock slides

(Reuters) - Wal-Mart Stores Inc on Thursday reported a lower quarterly profit and gave a lackluster sales outlook as declining prices for grocery products and sluggish apparel demand took a toll, and its shares fell more than 3 percent.

Exclusive: EU set to clear Dell's $67 billion deal to buy EMC - sources

BRUSSELS (Reuters) - Dell Inc [DI.UL], the world's third-biggest maker of computers, is set to gain unconditional EU antitrust approval for its $67 billion bid for data storage company EMC Corp, two people familiar with the matter said on Thursday.

Oil pares gains as U.S. stock rise eclipses output freeze plan

NEW YORK (Reuters) - Oil prices surrendered much of Thursday's early gains after a build in U.S. crude inventories despite higher refinery runs stole attention from a global oil producer pact that had sharply boosted the market in recent days.

FCC approves proposal to boost TV set-top box competition

WASHINGTON (Reuters) - The Federal Communications Commission approved on Thursday a proposal to let consumers swap pricey cable boxes for cheaper devices and apps, to boost competition in the $20 billion television set-top box market.

Wall Street dips as oil retreats, Wal-Mart weighs

(Reuters) - Wall Street was lower on Thursday, snapping a three-day rally, after a slump in Wal-Mart weighed on retail stocks and oil prices retreated.

Credit Suisse to fast-track top junior bankers to retain talent: sources

LONDON (Reuters) - Credit Suisse will establish a fast-track program for top-performing investment banking juniors, sources familiar with the situation told Reuters, as major banks step up efforts to attract and retain their lower ranks.

U.S. job market firming; manufacturing still on the ropes

WASHINGTON (Reuters) - The number of Americans filing for unemployment benefits unexpectedly fell last week, pointing to labor market strength that could keep Federal Reserve interest rate hikes on the table this year.

Insight: Parmesan bonds replace bank loans in Italy's new credit order

ROME/MILAN (Reuters) - When Parmesan prices proved too volatile for Italy's strained banks a dairy cooperative near Bologna came up with a novel solution to its funding needs, bonds backed by wheels of cheese.

Cushing Is Denying Storage Requests: Some Troubling Data From Genscape And Goldman

Yesterday, one of the best-known providers of energy market intelligence thanks to its massive private and patented network of land, sea, and satellite monitors, Genscape, held a webinar titled the "Current state of the global oil market" in which it covered all the core aspects that investors in the oil space find concerning, among which the following:


Global oversupply of oil

OPEC's dilemma with Saudi Arabia keeping up pressure to not cut production


North American crude oil production forecast

Impact of sustained weakness in crude oil prices on U.S. production

What does the decline in U.S. production mean for the storage glut and refinery supply?

U.S. oil storage

Cushing, OK, storage record-highs in April 2015 and January 2016

Where will the crude oil go?

Expectations for additional storage coming online


While some the key topics discussed focused on the most followed issue, namely total US supply and commercial oil stocks, which as can be seen are now at a record high and rising...

... and in fact at 504 million as of today's DOE update which saw the addition of another 2.1 mmb last week, pushing total stocks to 78mmb (18%) above year ago levels...

...two charts stood out for us, perhaps the most important ones when it comes to the near-term trajectory of oil prices: namely storage ...

OECD Demands "Urgent" Policy Response As Global Growth Heartbeat "Flatlines"

Last year, virtually all the very œserious people threw in the towel on global growth and trade.

It's been apparent for quite some time (like say, a couple of years) that the slump in trade growth has likely become structural and endemic as opposed to transient and cyclical in the post crisis world.

As WSJ noted last autumn, 2015 marked the third year in a row that the rate of growth in global trade trailed the already sluggish expansion of global GDP. œIt's almost like the timing belt on the global growth engine is a bit off or the cylinders are not firing as they should, WTO chief economist Robert Koopman remarked.

Part of the shift is due to China's transition from an investment-led, smokestack economy to a consumption and services led model and the rest is attributable to the fact that things simply œain't what they used to be in terms of economic fundamentals.

All of this led the OECD to cut its forecast for global growth last September to 3% for 2015. œGlobal growth prospects have weakened slightly and the outlook is clouded by important uncertainties, the organization said, adding that œemerging economies have vulnerabilities that could be exposed by rising US interest rates and/or a sharper-than-expected slowdown in China, giving rise to financial and economic turbulence that could also exert a significant drag on advanced economies.

Make no mistake, 2016 has certainly demonstrated that EM is vulnerable to liftoff and that a Chinese hard landing (and the attendant devaluation of the yuan) has indeed precipitated œfinancial and economic turbulence with the potential to spill over into advanced economies.

Given that, we weren't surprised to see the OECD cut their 2016 growth forecast to 3% from 3.3% in November. œ

Americans' Economic Expectations Slump Near 2 Year Lows (And The Stock Ramp Is Not Helping)

Americans have been increasingly disgruntled with the economic outlook since March 2015 and today's Bloomberg confidence print at 42.5 sends hope back to near 2-year lows. The early year bounce in expectations has been erased as US equity rallies have done nothing to stymie the growing realization across the states that something dismal this way comes.

Aug 2015 and Jan 2016 both show the dramatic and sudden realization of equity market investors crashing down to "real" economic expectations. The last few days have sent stocks soaring once again to re-engage animal spirits... because 3rd time is the charm right?

U.S. Stocks Lower After Rally

U.S. stocks slipped Thursday following a rally that sent them to their biggest three-day rise since August.

Oil Gives Up Gains as Inventories Build

Oil prices gave up their earlier gains Thursday as the U.S. government's oil-inventory report showed another increase in stockpiles of crude oil.

Oligarch Claims Credit Suisse Mismanaged His Money

Bidzina Ivanishvili, a former prime minister of Georgia, is pursuing a legal claim in Geneva that his Credit Suisse private banker mishandled his portfolio and caused significant losses.

January 2016 Leading Economic Index Declined Again

Written by Steven Hansen

The Conference Board Leading Economic Index (LEI) for the U.S.declined again this month - and the authors believe " its six-month growth rate remains consistent with a modest economic expansion through early 2016.".

The Fed: Here's why Fed's Bullard is now leery of more interest-rate increases

After pushing the Federal Reserve to hike rates in December, St. Louis Fed President James Bullard thinks more rate hikes would be unwise. Here's why.

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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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