US markets open lower and after the 'morning dip' (because of crude falling) have remained where they first traded, but showing signs of becoming weaker WTI crude fell from testing its resistance ($38 +) this morning to testing is support in the mid 36's and 'weak' indicators show it may not hold. All things considered, if the various supports hold today, we could see a temporary resurgence in this weak bull rally.
Here is the current market situation from CNN Money
$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.
WOLFSBURG, Germany (Reuters) - German insurer Allianz plans to sue Volkswagen over the sharp drop in its shares as a result of the carmaker's diesel emissions scandal, a source familiar with the situation told Reuters.
(Reuters) - Two investment funds with significant stakes in United Continental Holdings Inc nominated a slate of six directors for the airline's board, increasing the chances of a proxy fight as the company digs in to defend against the attack.
NEW YORK (Reuters) - Oil prices fell about 3 percent on Tuesday, retreating after six days of gains for benchmark Brent crude, as Goldman Sachs suggested the rally was unsustainable and analysts expected data likely to show another record high in U.S. stockpiles.
(Reuters) - iHeartMedia Inc has hired Moelis & Co as a financial adviser, the most significant step yet by the largest owner of U.S. radio stations to deal with its $21 billion debt pile, according to people familiar with the matter.
Just two days ago, everything was awesome - oil was up, stocks were up, financials were 'winning' - and then question started about why credit risk hadn't rallied like stocks.
But today we get our slap back to reality as Citi CFO unleashes the following: CITIGROUP SEES INVESTMENT BANKING REVENUE DOWN 25%, FIXED INCOME, EQUITY TRADING REV DOWN 15% YOY. The stock is rapidly giving up its "everything's fine" gains as Citi "hopes" for more rate hikes... but does not expect them.
Citigroup's CFO Gerspach is speaking at the RBC Conference in NYC... (live feed here)
"In fixed income, we see spread products continuing to have pressure," Gerspach said. "That's been a story for the last 18 months."
*CITICORP EXPECTS $400 MLN REPOSITIONING RESERVE, GERSPACH SAYS
*CITIGROUP SAYS OTHER THAN ENERGY SECTOR, CREDIT PERFORMING WELL
*CITIGROUP CFO SAYS STILL 'HOPE' FED WILL RAISE RATES 2X IN 2016
Amid a strong 30 year auction overnight, long-dated Japanese Government Bond yields utterly collapsed. 30Y yields dropped 21bps - the biggest absolute drop in over 3 years and biggest percentage drop ever - to a record low 47bps. Since Kuroda unleashed NIRP, the entire JGB has been crushed and last night's rush for long duration debt (well at least there is some yield there?) has flattened the curve to record lows. For context, Japan's 30Y yield is now below US 2Y yield...
Nothing to see here...
As Reuters reports,
Japanese government bond yields tumbled to fresh record lows on Tuesday after a firm 30-year auction fuelled a rally for debt instruments that still offer positive yields, which have become scarce under the Bank of Japan's negative interest rate policy.
Weaker Tokyo stocks also increased the allure of the bond market, with the Nikkei falling to a one-week low.
The benchmark 10-year yield fell to a new record low of minus 0.100 percent.
The 30-year yield plummeted 21 basis points, the biggest one-day fall in three years, to a life-time trough of 0.470 percent.
The rally by super long JGBs was triggered by strong results in a 30-year auction, underlining solid investor demand for the maturities that offer positive yields but also entailing greater duration risk.
"There were some concerns that the 30-year auction may not garner sufficient demand and t ...
Submitted by David Stockman via Contra Corner blog,
The casino is incorrigible. After a monumental short squeeze that has lifted the averages right into the jaws of danger, Goldman Sachs has the temerity to print the following:
"Our model suggests SPX calls are more attractive than at any time over the past 20 years".
There must have been a mullets' breeding frenzy awhile back because it's hard to fathom how Goldman has any real customers left. Then again, its current preposterous call is just indicative of the horrible threat heading menacingly toward what remains of main street's 401k investments.
To wit, the Fed and other central banks have thoroughly falsified financial market prices and destroyed all of the ordinary mechanisms of financial discipline. Foremost among these are short sellers and a meaningfully positive cost of carry trades.
Markets are therefore unhinged from any connection to fundamental economic and financial reality, meaning that they are capable of an extended period of spasmodic deadcat bounces that will have only one end result.
Namely, the naÃ¯ve and desperate among main street investors who still, unaccountably, frequent the casino will presently be taken out back and shot yet another time. The market technicians are pleased to call this "distribution". Would that someone on Wall Street man-up and amend the phrase to read " distribution.......of losses to the mullets" and be done with the charade.
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