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28Mar2016 Market Update: Markets Move Sideways, Sea-Sawing Between Small Gains And Losses, WTI Crude Slips To Low 39's

Written by Gary

U.S. stocks swung between small gains and losses on Monday as consumer shares rose after encouraging data, offsetting the impact of a dip in crude oil prices on the energy sector. U.S. consumer spending barely rose in February and inflation retreated, suggesting the Federal Reserve could remain cautious about raising interest rates this year even as the labor market rapidly tightens.


Here is the current market situation from CNN Money

North and South American markets are mixed today. The Bovespa is up 2.38% while the S&P 500 gains 0.19%. The IPC is off 0.08%.

What Is Moving the Markets

Here are the headlines moving the markets.

Wall St. flat as consumer stocks gain, energy dips

(Reuters) - U.S. stocks swung between small gains and losses on Monday as consumer shares rose after encouraging data, offsetting the impact of a dip in crude oil prices on the energy sector.

China's Anbang raises offer for Starwood to $14 billion

(Reuters) - China's Anbang Insurance Group Co raised its offer for Starwood Hotels & Resorts Worldwide Inc to almost $14 billion, Starwood said on Monday, in the latest challenge to the U.S. hotel operator's merger with Marriott International Inc .

Pandora Media's founder returns as CEO; shares fall

(Reuters) - Online music streaming service Pandora Media Inc appointed founder Tim Westergren as its chief executive to replace Brian McAndrews, who left the company on Monday, sending its shares down 10 percent.

U.S. consumer spending, trade data signal sluggish growth

WASHINGTON (Reuters) - U.S. consumer spending barely rose in February and inflation retreated, suggesting the Federal Reserve could remain cautious about raising interest rates this year even as the labor market rapidly tightens.

Valeant CEO subpoenaed to testify before U.S. Senate panel

WASHINGTON (Reuters) - The chief executive of Valeant Pharmaceuticals International Inc, which is under scrutiny for dramatically hiking the price of older drugs, has been summoned to testify at a U.S. congressional hearing on April 27, the panel said on Monday.

Oil down in thin holiday trading; banks warn of $30 levels

NEW YORK (Reuters) - Crude futures fell on Monday as European markets observed the Easter break while U.S. data showed hedge funds and other big speculators still slow to build long positions after the oil price rebound of the past two months.

U.S. gives antitrust approval to GM's purchase of Cruise Automation

(Reuters) - General Motors Co has won U.S. antitrust approval for the purchase of Silicon Valley startup Cruise Automation Inc, the Federal Trade Commission said on Monday.

Japan's NTT Data agrees to buy Dell's IT services unit for $3 billion

(Reuters) - Japan's NTT Data Corp said on Monday it has agreed to buy Dell Inc's information technology consulting division for over $3 billion to expand in North America and bolster its services business.

As earnings loom, McCormick tied to M&A as acquirer, target

NEW YORK (Reuters) - There is nothing bland about betting on McCormick.

Bid To Cover Plunges, Foreign Central Banks Flee From 2 Year Auction

On the surface, today's 2Y auction was not too bad: pricing at a 0.877% high yield, this stopped 0.5 bps through the 0.882% When Issued.

That was as good as it got, because the internals were a disaster: the Bid to Cover plunged from 2.907 to just 2.578, the lowest BTC since Dec 2008 and clearly well below the 12TTM average of 3.17. Almost as if investors are no longer too sure in the short end... which makes sense: neither is the Fed, at least until it too unleashes NIRP.

The takedown was also ugly, with Indirects taking down just 47.4% of the auction, the lowest of 2016, leaving 37.4% to Dealers and some 15.2% to Direct Bidders, which was the highest since December.

Overall, a poor auction which however may be explained by the fact that international bidders, namely those out of Europe, were still out on holiday: this week's remaining auctions - the 5 and 7Y will be far more indicative of the market tone.

Is This Fed President An Idiot? Read These Two Headlines And Decide

As if The Federal Reserve's credibility was not already circling the drain faster than Kanye West's, San Francisco Federal Reserve President John Williams just dropped the ultimate tape-bomb of ignorance and flip-flopping.

In January, as the market begain to accelerate to the downside, a confident Fed explains why it is "not too concerned" about China's collapse: "We've built in a weakening path for China. I don't see that as a significant risk to the forecast" for the U.S. economy, China doesn't affect the US market that much at all."

While he fell one short of using the 'c' word, the implicit statement was that China risk was "contained," and would not lead to any pain in the US.

And then, less than 3 months later, Williams utters the following painfully hypocritical comments:"We have a domestic mandate...but that said, we understand that we're in a global economy so what happens in Brazil or China has a huge impact on the U.S. in terms of our inflation and employment goals

The Hits Just Keep On Coming: Valeant CEO To Tesity Under Oath, Following Accusation Of Merger Agreement Violation

It's been a terrible month for investors in Valeant (and Pershing Square) and it is about to get even worse following news that the outgoing CEO of the troubled company, which is under scrutiny for dramatically hiking the price of older drugs, has been summoned to testify at a U.S. congressional hearing on April 27, the panel said on Monday.

According to Reuters, the Senate Special Committee on Aging hearing comes as the Canadian-based company is coping with a variety of federal investigations into its accounting practices that led to a restatement and delays in the filing of its annual report.

Valeant said last week CEO Michael Pearson would step down, after a board committee probing the company's ties to specialty pharmacy Philidor Rx Services had found accounting problems dating back to December 2014. Billionaire William Ackman, whose Pershing Square Capital Management owns a 9 percent stake in Valeant, has joined the company's board.

Pearson's testimony under oath will take places as prosecutors in Massachusetts and Manhattan are probing Valeant's pricing and distribution channels, while the Securities and Exchange Commission is investigating its accounting and disclosure issues.

The Senate committee is one of two congressional bodies that are looking into aggressive prescription drug pricing.

Both committees are particularly focused on Valeant and Turing Pharmaceuticals, a private company founded by Martin Shkreli, a 32-year-old entrepreneur who has come under fire for raising the price of the drug Daraprim by more than 5,000 percent to $750 a pill.

In February, the U.S. House Committee on Oversight and Government Reform held a long and contentious hearing on drug pricing. At that hearing, Shkreli, who is facing unrelated securities fraud charges, asserted his Fifth Amendment right against self-incrimination.

Pearson did not tes ...

U.S. Stocks Edge Higher

U.S. stocks were calm Monday ahead of a flurry of the end-of-month positioning and data-heavy trading that is expected to end the week.

China's Anbang Escalates Battle for Starwood Hotels

The battle for Starwood Hotels continued as the group led by China's Anbang increased its bid for the hotelier to $14 billion, threatening Starwood's deal with Marriott.

Banks Ramp Up Push for Home-Equity Lines

Lenders are trying to offset faltering mortgage originations and a fizzling refinancing wave. For borrowers, the move comes as home values continue to rise.

Dow transports on track for worst losing streak since August swoon

The Dow Jones Transportation Average drops sharply, bucking the gains in the broader market, led by weakness in the shares of Avis Budget Group and railroad operators.

Market Snapshot: U.S. stocks struggle to rise as Fed incites confusion

U.S. stocks struggle to push higher as a guessing game over the Federal Reserve's monetary policy dampened investors' interest in equities while a drop in oil prices also weighed on shares of energy companies.

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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