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22Feb2016 Market Close: Markets Close Up Just Short Of Major Resistances, Crude And US Dollar Stop Short Of Their Resistances, Investors At Cross-Road Dilemma Of Indecision

Written by Gary

US markets closed higher with the DOW up almost 230 points and the Spooz up 1.5% tickling the upper resistance line. Will it penetrate it tomorrow is the BIG question investors are asking obviously concerned with poor Global financial problems. Crude oil settled near its solid resistance in the 34's as did the US dollar. A lot has to happen before the markets continue to trend up and medium-term indicators don't agree with the bulls.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Honeywell, United Tech held merger talks: sources

(Reuters) - Aerospace component suppliers Honeywell International Inc and United Technologies Corp have held talks about a possible merger, but United Tech was convinced U.S. antitrust authorities would reject the deal, sources familiar with the talks said on Monday.

Wall St. jumps as oil rallies

NEW YORK (Reuters) - Wall Street surged on Monday, helped by a robust rally in oil prices that lifted recently-crushed energy stocks, including Chevron and Schlumberger.

As U.S. shale sinks, pipeline fight sends woes downstream

WILMINGTON, Del. (Reuters) - Within weeks, two low-profile legal disputes may determine whether an unprecedented wave of bankruptcies expected to hit U.S. oil and gas producers this year will imperil the $500 billion pipeline sector as well.

United orders 25 more Boeing 737 worth $2 billion: sources

PARIS (Reuters) - Boeing Co has won an order for 25 current-generation Boeing 737 aircraft from United Continental Holdings , beating rivals including Canada's Bombardier for the second time in a month, two industry sources said.

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.

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.

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.

"Everything Changes At Zero" - Investors "Obligated" To Fight The Fed

Submitted by Tim Price via SovereignMan.com,

For the benefit of non-subscribers, there are two versions of the Financial Times newspaper. One of them is the hard copy edition, still printed on pink paper, an exact digital replica of which is available on the paper's website to subscribers. The second is the website itself, at www.ft.com. The difference between the two is subtle, but crucial.

In the formal, hard copy edition, 'reader response' is strictly edited and controlled. Occasionally a despatch critical of one of the paper's columnists (normally and deservedly Martin Wolf) will make its way through enemy lines, but as the 'edition of record', hostility to and criticism of the newspaper's editorial staff is, as you might expect, strictly rationed.

On the website, however, the gloves come off.

Last week the FT published an article, 'Central banks: negative thinking', co-authored by Robin Wigglesworth, Leo Lewis and Dan McCrum, that was atypically sceptical of the received wisdom on QE (i.e., that it works). The article began, as is probably compulsory these days, in Japan:

"Forums have seen a flood of commentary from Japan's retirees decrying negative rates and the "torture" that the BoJ's policy is already inflicting..

"The Japanese can be conservative at the best of times, and few think these are the best of times."

Oil Market Shrugs At OPEC Jawboning

Either the algos aren't paying attention or the market's just too focused on the roll to care about another round of headline hockey from OPEC, but crude hasn't budged in the face of a barrage of one-liners from OPEC's secretary general Abdalla Salem El-Badri who spoke from the annual IHS CERAWeek conference in Houston.

Here's the headline dump:


EL-BADRI SAYS OPEC DOESN'T KNOW HOW TO TACKLE OIL OVERHANG

OPEC'S EL-BADRI SAYS 70% OIL SUPPLY OVERHANG IN U.S.

EL-BADRI SAYS OIL SPENDING CUTS SEED FOR 'VERY HIGH PRICE

OIL OUTPUT FREEZE IS FIRST STEP, EL-BADRI SAYS

IF SUCCESSFUL, 'MAYBE WE CAN TAKE OTHER STEPS':EL-BADRI

OPEC'S EL-BADRI SAYS SHALE OIL WILL COME BACK WITH PRICE HIKE

OPEC SECRETARY GENERAL BADRI SAYS DAYS THAT OPEC WAS RESPONSIBLE FOR CUTTING OUTPUT ALONE 'ARE OVER'

It's all shale's fault then, and the Saudis are powerless to support prices. Got it.

One suggestion for OPEC members who just can't seem to figure out how to "tackle the overhang," would be to cut production. Or you could just freeze it - at record levels. That should work.

Crude is, for whatever reason, not interested.

These Are The Two Canadian Banks Most Exposed To A Severe Oil Shock According To Moody's

Two weeks ago we asked if, in the aftermath of the dramatic selloff suffered by European banks over commodity exposure concerns, whether Canadian banks would not be next in line. The reason was that according to an RBC report, while US banks had already taken significant reserves against future oil and gas loans, roughly amounting to 7% of their exposure, Canadian banks were stuck in denial.

As RBC grudgingly noted, "The small negative moves in credit would normally not evenregister were it not for plenty of evidence of issues surround the oil and gas sector and the impact it could have on the oil producing provinces in Canada." Yes, well, China already advised its media to stick to "positive reporting" - sadly for the energy-rich or rather energy-por province of Alberta it is now too late.

As for ths reason for this surprising reserve complacency, RBC said the following:

Canadian banks like to wait for impairment events to book PCLs rather than build reserves (called sectoral reserves in the past) for problematic industries.

In other words, let's just wait with the reserves until the losses are already on the book: hardly the most prudent approach which may be why today, with its usual several week delay, Moodys opined on which Canadian banks it views as most susceptible to a "severe oil slump."

As quoted by to Bloomberg, Moody's said that "Canadian Imperial Bank of Commerce and Bank 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.

Oil Prices: Don't Expect a Quick Score

The global oil market resembles a soccer match with wild back-and-forth swings but no capitulation as speculators make it more volatile.

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.

The Tell: Watch all of the government debt in the world grow in real-time

As of Monday, governments around the world collectively owe $59.66 trillion in debt and by the time you finish reading this story, they will owe another few million dollars in just interest alone, according to the NationalDebtClocks.Org.

Currencies: Dollar jumps as pound, yen unravel

The dollar climbed on Monday, helped by the pound falling on heightenedBrexit worries and the yen dropping amid Tokyo stocks' steady gains.

Earnings Outlook: What to expect from HP Inc. earnings

HP Inc. is scheduled to report fiscal fourth-quarter results, the first since the cloud business was spun off, after the stock market closes on Wednesday.

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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