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16Mar2016 Market Close: Markets Advance After Fed Hold Rates And Signal Only Two More Hikes This Year, WTI Crude Settled At Mid $38's, But Nothing Has Changed

Written by Gary

Markets sea-sawed their way back up to new session highs as did WTI crude and gold. The Fed's 'non-event' evidently was appreciated by some bullish investors as the DOW closed up 75 points and the SPY up 0.6% on moderate volume. The tea-leaves on my desk remain bullish for the near-term of three weeks, but serious bearish concerns remain after that.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Facing investor unrest, Viacom names lead independent director

NEW YORK (Reuters) - Viacom Inc has named Frederic Salerno, former vice chairman of Verizon Communications Inc and chair of the board's compensation committee, as the media company's first lead independent director as it looks to counter investor criticism of its corporate governance.

Pimco's Callin, head of equity product management, retiring in second quarter

NEW YORK (Reuters) - Sabrina Callin, managing director and head of equity product management at Pacific Investment Management Co, has decided to retire from the firm in the second quarter, Pimco said on Wednesday.

Wall St. gains as Fed signals fewer rate hikes for year

NEW YORK (Reuters) - Wall Street gained on Wednesday after the U.S. Federal Reserve left interest rates unchanged and signaled fewer rate hikes for the year.

Fed holds steady, rate-setters now see two hikes this year

WASHINGTON (Reuters) - The Federal Reserve held interest rates steady on Wednesday and indicated that moderate U.S. economic growth and "strong job gains" would allow it to tighten policy this year, with fresh projections showing policymakers expected two quarter-point hikes by the year's end, half the number seen in December.

Major automakers to announce pact to install auto-braking systems by 2022

WASHINGTON (Reuters) - Major automakers will announce Thursday they have agreed to install automatic emergency braking systems in nearly all U.S. vehicles by September 2022, three sources briefed on the plans said.

U.S. data points to firming economy, inflation

WASHINGTON (Reuters) - Underlying U.S. inflation increased more than expected in February as rents and medical costs maintained their upward trend, which could keep the Federal Reserve on course to gradually raise interest rates this year.

Frankfurt and London seal $30 billion trading tie-up to counter U.S. threat

FRANKFURT/LONDON (Reuters) - Deutsche Boerse AG and London Stock Exchange Group Plc (LSE) agreed to combine in a $30 billion deal to create a European trading powerhouse better able to compete with U.S. rivals encroaching on their turf.

EU regulators want more info on Apple's Irish tax deal

BRUSSELS/DUBLIN - European Union antitrust regulators have asked Ireland to provide further details on the country's tax deal with Apple before deciding whether this constitutes illegal state aid to the iPhone maker.

SEC chief says may have to 'rein in' some non-GAAP disclosures

WASHINGTON (Reuters) - The head of the Securities and Exchange Commission on Wednesday said her agency is examining whether companies could mislead investors through some of current accounting rules.

"We Choose The Nominee, Not The Voters" - Republican Party Split Looms

Submitted by Martin Armstrong via ArmstrongEconomics.com,

A Republican Party split is looking much closer after Tuesday. Trump won Florida, Rubio's home state, and that led Rubio to drop out. However, Trump was denied a victory in Ohio, which was won by its own sitting governor, John Kasich. This will make it very difficult for Trump to win the necessary delegates for a first ballot in the Republican Convention. This Ohio victory doesn't make Kasich a likely nominee in the least; it is just a spoiler to help the establishment pick who they want to be their nominee and that is certainly not Trump. Kasich has now won just one state so it appears that Ohio has sealed the fate of the Republican Party.

Without Ohio's 66 delegates, Trump now faces an extremely difficult path to reach the majority of delegates he needs to avoid a "contested" GOP convention. So the establishment looks like it will win and no candidate will enter the convention with a majority of delegates locked up. So after the first ballot, they are free to vote for whoever the establishment wants. It looks like the computer may be right after all. This is beginning to appear to be a very insane situation. The last time no candidate had the required amount for a nomination was 1976. Under the rules of the GOP, all these primaries were pointless. Delegates can choose one of the candidates who ran, or someone else entirely - Romney?

With the people voting for Trump, the Republican Party may have to face a huge, strong anger backlash from his supporters.

We are more likely to see a third p ...

Former Fed Employee Avoids Jail, Gets $2,000 Fine For Stealing Fed Secrets On Behalf Of Goldman Sachs

One of the biggest scandals at the end of 2014 was the dramatic confirmation courtesy of 48 hours of declassified tapes by former NY Fed staffer Carmen Segarra that not only Goldman Sachs controls the New York Fed (headed by former Goldman managing director Bill Dudley), but that disturbingly one of Goldman Sachs' then-employees, former NY Fed regulator, then 29-year old Rohit Bansal was routinely being provided with confidential NY Fed documents.

As the NYT reported then, "from his desk in Lower Manhattan, a banker at Goldman Sachs thumbed through confidential documents " courtesy of a source inside the United States government. The banker came to Goldman through the so-called revolving door, the symbolic portal that connects financial regulators to Wall Street. He joined in July after spending seven years as a regulator at the Federal Reserve Bank of New York, the government's front line in overseeing the financial industry. He received the confidential information, lawyers briefed on the matter suspect, from a former colleague who was still working at the New York Fed."

The "colleague", and source of the stolen information, was another NY Fed employee, Jason Gross, whose official role was "bank examiner" ("bank leaker" would have been more appropriate).

Prior to joining the Fed, had had worked as a p ...

Goldman Does It Again: Dollar Plummets After Goldman FX Says "Dollar Rally Far From Over"

Goldman's Robin Brooks has to be a sadist: that is the only way we can explain his ability to crush the greatest number of Goldman clients at every possible opportunity.

First, of course, it was his call to go very short the EURUSD ahead of the December ECB meeting, which however led to the biggest EURUSD surge since the announcement of QE1.

Then, last week, ahead of the ECB meeting he "doubled down" on calls to short the EUR ahead of the ECB, the result again was a EUR super surge, the biggest since December.

And then, as we reported first thing this morning, Robin Brooks released a note titled the "The Dollar Rally Is Far From Over" in which he said the following:

Today brings the latest FOMC meeting. We expect the Fed to signal that it wants to continue normalizing policy, which means three hikes this year and four in 2017, with the statement referring to the risks as œnearly balanced, reverting to phraseology used in October, just before December lift-off. Overall, our sense is that the outcome will be more hawkish than market pricing, in particular given that the FOMC may leave open the option of tightening at the April meeting.

Wrong on every account. But Brooks did not stop there.This is what he predicted woudl happen today:

Implicitly, our estimates for Dollar strength are largely a reflection of the divergen ...

The Fed Decision Explained In 1 Simple Chart

Tumbling US unemployment and surging US inflation is not what really matters to 'Global' Janet. She knows what happened the last time "market" expectations were so disclocatedly bullish relative to "economic" expectations... and doesn't want to be driving the current bus off the great-er depression cliff...

A 'hold' in Sept - rally; a 'hike' in Dec - plunge; and this time 'hold' because everything is so decoupled...

"Boxed In" much? "Global uncertainty" is a suddenly very convenient truth - The Fed knows that any move to tighten ripples through the entire world's collateral chains; and with the global economy already bleeding its deflationary collapse into US economic expectations, a hike is simply piling on - i.e. no moar rate hikes.

Stocks Gain, Yields Lower on Fed

U.S. stocks jumped immediately after the Federal Reserve kept interest rates on hold and cut its expectations for rate hikes this year to two rather than four.

Fed Lowers Outlook for Further Rate Increases This Year

Federal Reserve officials reduced estimates of how much they expect to raise short-term interest rates in 2016 and beyond, nodding to lingering risks to the economic outlook posed by soft global economic growth and financial-market volatility.

Oil Prices Rise on Plan to Discuss Output Limits

Oil prices surged Wednesday on word from OPEC officials that Saudi Arabia and other leading exporters will limit their output even if Iran doesn't cooperate.

16 March 2016 FOMC Meeting Statement: Global Risks Loom and Federal Funds Rate Was Not Changed.

Econintersect: The Federal Open Market Committee (FOMC) - the board of directors of the Federal Reserve again did NOT adjust the federal funds rate. There was dissent as one member believed the federal funds rate should have been increased. The prime reason for NOT raising this rate:

.... global economic and financial developments continue to pose risks..

Market Snapshot: Stocks climb as Fed stands pat on rates, signals gradual hikes

U.S. stocks turned higher Wednesday afternoon after the Federal Reserve kept its key interest rates unchanged and slashed its projections for rate increases in 2016.

Market Extra: 59% of fund managers see an economy in its final innings - highest percent since 2008

Fund managers increasingly think it's the late innings of the global economic expansion, according to a survey of big managers by Bank of America Merrill Lynch.

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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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