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22Feb2016 Market Update: US Markets Trade Sideways And May Melt Higher Before Session Ends, Crude Climbs To 33.82 Before Settling In The Mid 33's, Short-Term Indicators Bullish

Written by Gary

US markets opened higher (+1.5%) and have traded sideways for the morning session. It seems that the large caps have moved out of correction territory and are poised to climb higher in spite of investors misgivings and mistrust.

Crude also moved higher and WTI is trading in the mid to higher 33's as we enter the afternoon session on renewed hopes over a production freeze between Russia and key members of OPEC.

Here is the current market situation from CNN Money

North and South American markets are broadly higher today with shares in Brazil leading the region. The Bovespa is up 4.00% while U.S.'s S&P 500 is up 1.47% and Mexico's IPC is up 0.65%.

What Is Moving the Markets

Here are the headlines moving the markets.

Western Digital investor Alken pushes to cancel SanDisk deal

(Reuters) - Alken Asset Management, one of the biggest shareholders of hard-disk drive maker Western Digital Corp, has asked the company to consider cancelling its deal to buy SanDisk Corp, citing a high purchase price.

Apple urges U.S. government to form commission on encryption issues

(Reuters) - Apple Inc on Monday urged the creation of a government panel on encryption to help resolve a standoff over national security and data privacy that erupted last week after the technology company refused a U.S. government demand to unlock an iPhone linked to one of the killers in a mass shooting in California in December.

Energy, materials stocks drive Wall Street rally

(Reuters) - Wall Street was higher on Monday as prices of oil and other commodities surged, pointing to an uptick in investors' risk appetite following a rout in global markets.

IBM inks deal with VMWare, tries to bolster cloud credentials

SAN FRANCISCO (Reuters) - Computing giant IBM has expanded its partnership with VMWare , one of several initiatives it plans to announce Monday as it works to carve out a bigger role in the fast-growing field of cloud computing.

Starbucks tightens rewards program rules

LOS ANGELES (Reuters) - Starbucks Corp on Monday announced changes to its loyalty program that will mean some customers will have to spend more money at the coffee chain to earn free food and drinks.

Allergan's revenue beats on higher U.S. brand sales

(Reuters) - Allergan Plc reported better-than-expected quarterly revenue, helped by strong performance in its U.S. brands segment, and said it continues to expect its takeover by Pfizer Inc to close in the second half 2016.

Goldman scales back estimate of legal costs

(Reuters) - Goldman Sachs Group Inc has scaled back its estimate of the legal costs it may face, beyond what it has set aside, by more than half to $2 billion.

Vodafone CEO talks up benefits of going Dutch with Liberty

BARCELONA (Reuters) - The chief executive of Vodafone underlined the benefits of the company's plan to work with Liberty Global in the Netherlands, an arrangement being closely watched by analysts and investors who hope the two firms will one day reach a wider deal.

Barrick to spend about $2 billion on Nevada, Peru projects

(Reuters) - Barrick Gold Corp , the world's largest gold miner, said it would spend a total of about $2 billion on projects in Nevada and Peru for construction starting 2019.

Are Central Banks Setting Each Other Up?

Authored by Mark St.Cyr,

There are times you try to connect the dots. There are others where those connections warrant adorning your trusted tin-foiled cap of choice; for you just can't get there unless you do. This I believe is one of those times. And if correct? What at first might appear apocryphal, may in fact, be down right apocalyptic. And besides, what good is a tin-foil capped conspiracy theory anyhow if it doesn't have the potential for doom, correct?

So, with that in mind, let's venture down some roads full of conjecture where if it's found to have more of a footing in fact as opposed to fiction? The implications for everything we now take for granted such as: money, enterprise, global commerce, and a whole lot more may be far closer to a "Minsky moment" than any of us dared to imagine.

Today, one can't begin without scrutinizing the latest example of monetary flip-flop. e.g., The Bank of Japan's (BOJ) surprise announcement of implementing negative interest rates.

Although "surprise" is the correct word, it is also an understatement. For it was only days prior current Governor Haruhiko Kuroda made statements to the contrary implying that he was not even thinking about adopting such a policy as of now. Then; he did precisely that. And the fallout is still being registered and assessed via the shock-waves continuing to resonate throughout the global markets, let alone, Japan's own Nikkei™ and currency.

For those that watch the markets daily, you know what happened next. For those who don't, I can best explain it this way: It had the exact opposite reaction that many (especially the so-called "smart crowd) believed would happen. I.e., More easing i ...

Valeant 'Dead-Cat-Bounce' Dies On Double-Downgrade, Chanos Concerns

Just when you thought it was saffe to pile back into the hedge fund hotel that is Valeant Pharma, the stock prices collapses 18% in 2 days back to 3-month lows. Following a Wells Fargo downgrade on Friday to underperform (due to concerns over the firm's ability to pay back its debt), Deutsche Bank piled on implicitly today with a downgrade for Express Scripts in light of Anthem's over-paying arguments which Jim Chanos claims will weigh on the entire PBM space.

More pain for the hedge fund hotel...As it plunges 18% in 2 days...

With the dead-cat-bounce dying...

Wells Fargo hit them on Friday...

The firm initiated coverage with an "underperform" rating and price target between $65 and $68. Shares plunged more than 8% on Friday.

Valeant will need to use basically all of its free cash flow to pay down its $30 billion in debt, Wells Fargo wrote in a note, the Wall Street Journal reports.

If the pharmaceutical company's tax rate changes or if the company is faced with further investigations, it could struggle to pay back its debt.


Has The German Manufacturing Juggernaut "Lost Its Mojo?"

Earlier today, we highlighted the noticeable weakness in European PMIs which largely missed expectations on - what else? - sluggish global demand and generally anemic economic growth.

Specifically, Germany's PMI fell for the second month in a row in February, declining to 53.8 from 54.5 the previous month. Worryingly, the manufacturing PMI slumped 50.2, missing estimates by a wide margin and hitting its lowest level in 15 months.

Services looked ok, but as anyone who follows global macro knows, it's all about manufacturing for the world's fourth largest economy. The health of Germany's manufacturing sector serves as a useful barometer not only for the health of the European economy for the pace of global growth and trade in general. Indeed, that's one of the reasons why the Volkswagen emissions scandal was (and still is) so troubling. It has the potential to dent Germany's manufacturing juggernaut.

In the wake of Monday's data, Goldman is out asking if perhaps German manufacturing œhas lost its mojo.

œGerman real GDP grew a moderate 0.3%qoq in the fourth quarter of last year, and by 1.5% for the whole of 2015, Goldman writes, adding that œpart of the relative disappointment can be located in the manufacturing sector, which has shown a sub-par performance since 2011.

What's to blame, you ask? Why sluggish global growth of course:

The relative sluggishness of German manufacturing can be partly explained by slower global growth, which has resulted in weaker German export growth (Exhibit 2). In real terms, German exports have grown on average by only 3.5%pa over the past four years, compared with 8.8% in the four years prior to the financial crisis.

Using a mod ...

"There Is Definitely Something Strange Going On" In Sweden

Submitted by Erico Matias Tavares via Sinclair & Co.,

Dr. Tino Sanandaji is an economics researcher at the Stockholm School of Economics, Sweden. He holds a PhD from the University of Chicago. A Kurd from Iran who moved to Sweden at the age of 9, he has written extensively about immigration policy as a researcher and contributor to prominent Swedish journals such as the National Review and Real tid.

E. Tavares: Thanks for being with us today. We would like to talk about a very sensitive topic at the moment - mass immigration in Sweden, something that you have researched extensively. You have publicly expressed some pretty serious concerns about current trends and what might unfold as a result.

We studied in your country back in the mid-1990s and it was a great experience. There was already a sizeable immigrant population but for the most part everyone seemed to get along fine. Middle Eastern girls dressed like any native origin Swedish girl and were very open and friendly. The only place where we ever witnessed any major tension between communities was in a nightclub. What has changed since then?

T. Sanandaji: I don' think that anything has happened in the relationship between migrants and native Swedes. On the contrary, there has been even a slight improvement.

However, in 1990 non-European immigrants accounted for only 3% of the population and any problems could be isolated and managed within the bigger framework of society. That figure has increased to some 13-14% now, and is growing at perhaps 1-2 percentage points from last year, with persistent gaps in income, unemployment and education. It's really a question of scale rather than degree of divisions.

You still have a sizeable number of ...

Stocks Gain on Rising Commodities Prices, China

Stocks gained Monday as rising commodities prices and signs of stability in China markets helped rekindle a rally that stalled at the end of last week. In currencies, the pound fell sharply against the dollar.

Crude Glut May Take Years to Disappear, IEA Says

New data from the International Energy Agency show that even if U.S. shale production is cut this year as expected and big oil nations are able to strike a deal to cap their output in the coming weeks, it could take years for the current crude glut to disappear.

British Pound Falls on EU Exit Fear

The British pound fell by 1.8% to near a seven-year low against the dollar after London's popular mayor, Boris Johnson, became the most prominent politician to say he would back the campaign for Britain to leave the European Union in a June 23 referendum.

The Fed: Fed official touts 'excellent' control over interest rates

Simon Potter, the person at the Federal Reserve in charge of raising interest rates, said he was pleased with the performance of the new tool-kit.

Europe Markets: European stocks end at nearly 3-week high as oil rallies

European stock markets log broad-based gains on Monday, as a rally in oil prices and some metals prices calms investor nerves after the recent commodity rout.

Earnings Outlook: What to expect from Home Depot earnings

Home Depot will report earnings on Tuesday with results relying on the housing market and consumer confidence.

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