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21Apr2016 Market Update: DOW Down 86 Points With More Downside To Come, Crude Off Fractionally With Outlook To Rise Again, Volume Low As Some Bulls Retire To The Sidelines

Written by Gary

US markets are currently down fractionally. Yesterday's spinning top Doji was correct in that we are experience a market reversal and will probably see several more down days before returning to a bullish stance.

Here is the current market situation from CNN Money

North and South American markets are mixed. The IPC is higher by 0.16%, while the S&P 500 is leading the Bovespa lower. They are down 0.43% and 0.15% respectively.

What Is Moving the Markets

Here are the headlines moving the markets.

VW, Justice Department reach diesel emissions deal

(Reuters) - Volkswagen AG and the U.S. Justice Department have reached a deal in principle to address excess diesel emissions in nearly 600,000 polluting vehicles that will include buyback offers and a possible fix, a federal judge in San Francisco said on Thursday.

Once fast-growing solar company SunEdison files for bankruptcy

(Reuters) - SunEdison Inc , once the fastest-growing U.S. renewable energy company, filed for Chapter 11 bankruptcy protection on Thursday as years of debt-fueled acquisitions proved unsustainable.

Weak earnings, drop in oil weigh on Wall Street

(Reuters) - A slew of mixed earnings reports by bellwethers and a drop in oil prices piled pressure on stocks with the three major indexes trading slightly lower on Thursday.

Oil slides as dollar rebounds; glut worry grows after rally

NEW YORK/LONDON (Reuters) - Oil prices slid on Thursday, reversing early gains as a rebounding dollar weighed on commodities denominated in the U.S. currency.

Viacom shares leap after accord to renew Dish contract

(Reuters) - Viacom Inc said on Thursday reached an agreement with Dish Network Corp, averting a blackout of its programs on the satellite TV network.

GM earnings beat estimates on strength in North America

DETROIT (Reuters) - Demand for big trucks in North America and an improved performance in Europe propelled General Motors Co's quarterly results well past investors' expectations, and company executives on Thursday affirmed their bullish outlook for the year.

Mitsubishi Motors shares dive, Japan officials raid facility

TOKYO (Reuters) - Japanese officials raided a facility belonging to Mitsubishi Motors Corp on Thursday after the carmaker admitted to overstating the fuel efficiency of 625,000 cars, a revelation that has sent its shares into a tailspin.

No handouts, but ECB's Draghi pledges loose policy 'as long as needed'

FRANKFURT (Reuters) - European Central Bank President Mario Draghi brushed off German criticism of his ultra-loose monetary policy on Thursday and vowed to use all the tools at his disposal for "as long as needed".

U.S. jobless claims hit 42-1/2-year low as labor market firms

WASHINGTON (Reuters) - The number of Americans filing for unemployment benefits unexpectedly fell last week, hitting its lowest level since 1973, suggesting an apparent sharp slowdown in economic growth in the first quarter could be temporary.

Pimco Economist Has A Stunning Proposal To Save The Economy: The Fed Should Monetize Gold

Back in December 2014, just before the ECB officially launched its initial phase of QE in which it would monetize government bonds, Mario Draghi was asked a very direct question: what types of assets could the ECB buy as part of its quantitative easing program. He responded, "we discussed all assets but gold."

The reason for his tongue in cheek response was because over the past few weeks speculation had arisen that gold could be part of the central bank's asset purchases after Yves Mersch, a member of the ECB executive board and former Governor of the Central Bank of Luxembourg, said on November 17 that "theoretically the ECB could purchase other assets such as gold, shares, ETFs to fulfill its promise of adopting further unconventional measures to counter a longer period of low inflation."

Mario Draghi promptly shot down that idea.

But according to a provocative paper released by none other than Pimco's strategist Harley Bassman, Yves Mersch's inadvertent peek into what central bankers are thinking, may have been on to something.

In "Rumpelstiltskin at the Fed", Bassman goes down the well-trodden path of proposing Fed asset purchases as the last ditch panacea for the US economy, however instead of buying bonds, or stocks, or crude oil, Bassman has a truly original idea: "the Fed should unleash a massive Fed gold purchase program that could echo a Depression-era effort that effectively boosted the U.S. economy."

He is of course, referring to FDR's 1933 Executive Order 6102, which made it illegal for a citizen to own gold bullion or coins or risk prison time. Americans promptly sold their gold to the gover ...

Alexander Hamilton: Defender of Property Rights

Authored by Steve H. Hanke of the Johns Hopkins University. Follow him on Twitter @Steve_Hanke.

At about the same time I posted "Hamilton's Good for the Ten-Spot," Treasury Secretary Jack Lew announced that Alexander Hamilton's image would be retained on the ten dollar bill. Even though the Secretary spent a good deal of time yesterday denying that the Broadway production Hamilton played much of a role in his decision, he was not too convincing. In fact, Broadway's soft power saved Hamilton.

Why Is The Stock Market So Strong?

Submitted by Pater Tenebrarum via,

Dismal Earnings, Extreme Valuations

The current earnings season hasn't been very good so far. Companies continue to "beat expectations" of course, but this is just a silly game. The stock market's valuation is already between the highest and third highest in history depending on how it is measured.


Corporate earnings are clearly weakening, and yet, the market keeps climbing. The rally is a bit of a "wall of worry" type of phenomenon actually, since many of the negatives are of course widely known.

1-SPX and COMP

The S&P 500 and the Nasdaq Composite, daily. The vertical blue bar on the right shows the range we expected the rebound to be contained in - this has now clearly been exceeded. However, the technology sector continues to underperform the broader market in this rally - click to enlarge.

After the immediate crash danger receded in February, we expected that a sizable rebound would be in the offing, but it is fair to say that the rebound has by now gone quite a bit further than we expected, if not by much yet. In fact, the S&P 500 Index is almost back at the level of early November as we write this.

Note though that the Nasdaq continues to u ...

ECB Corporate Bond Buying: Size Will Matter

The ECB is looming over the eurozone corporate bond market. Investors face a competitor with deep pockets.

Why This Reinsurer Looks More Reliable in Tough Times

Munich Re has more capital and less risk, which should help protect its ability to return cash to shareholders.

Negative Rates and Patches of Trouble for Japanese Insurers

Insurers' menacing realities began bubbling below the surface before negative rates came to be.

Market Snapshot: Stocks edge lower as defensive plays lead declines

U.S. stocks were under pressure Thursday, as big declines in defensive sectors such as consumer staples, telecoms and utilities weighed on the main indexes.

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