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22Apr2016 Market Update: US Averages Lower, Crude Wandering, US Dollar Poised To Break Out Upwards And Investors Sitting On Hands Today

Written by Gary

US markets opened lower as expected, climbed into the green for the briefest of moments and then plunged a half of a percentage point where the averages are trading sideways in an abbreviated sea-saw fashion. The US dollar is testing its resistance and WTI crude is down from its high (44.38) earlier. Short-term indicators are flat to fractionally negative.

Here is the current market situation from CNN Money

North and South American markets are mixed. The IPC is higher by 0.14%, while the Bovespa is leading the S&P 500 lower. They are down 1.16% and 0.35% respectively.

What Is Moving the Markets

Here are the headlines moving the markets.

Wall St. lower as earnings take sheen off oil surge

(Reuters) - Wall Street was lower on Friday after a slew of disappointing earnings reports from Microsoft and other major companies eclipsed a surge in oil prices which boosted energy shares.

Fed to hold rates in April but raise again in June: Reuters poll

(Reuters) - The U.S. Federal Reserve will keep interest rates steady at its policy meeting next week but economists held firm to their expectations for a rate hike in June and then another by the end of this year, a Reuters poll showed on Friday.

GE underlying revenue falls, but company sticks to target

NEW YORK (Reuters) - General Electric Co reported lower first-quarter underlying revenue, citing weak sales of oil and gas drilling equipment, but it forecast a second-half upturn for power generation products that should help it meet its full-year target.

Volkswagen takes $18 billion hit over emissions scandal

WOLFSBURG/FRANKFURT (Reuters) - Volkswagen (VW) said on Friday it would take a 16.2-billion-euro ($18.2 billion) hit to its 2015 results and slash its dividend to help pay for its emissions-test cheating scandal.

GM CEO Barra's compensation $28 million for 2015, up 72 percent

DETROIT (Reuters) - General Motors Co Chief Executive Mary Barra's compensation for 2015 rose 72 percent from the prior year as she guided the company to record profits, the company said on Friday.

All-day breakfast, promotions drive McDonald's profit beat

(Reuters) - McDonald's Corp's quarterly earnings jumped more than expected in the latest quarter, as all-day breakfasts and new meal deals lured more diners to its U.S. restaurants which contribute about 40 percent of overall profit.

Oil rises, heads for third week of gains

NEW YORK (Reuters) - Oil prices rose on Friday and were poised for a third week of gains as market sentiment turned more upbeat amid signs a persisting global supply glut may be easing.

Alphabet stock slips after results but brokerages stay bullish

(Reuters) - Ruth Porat couldn't have been clearer: Alphabet Inc's chief financial officer said on Thursday that Google's parent needed to step up investment to boost traffic.

Caterpillar cuts 2016 sales, earnings outlook, first-quarter profit slumps

(Reuters) - Caterpillar Inc. on Friday chopped its 2016 earnings outlook and posted a lower first-quarter operating profit, hurt by steep declines in revenue from its construction, oil and gas and rail business segments.

The Metal Ratios Are An Ominous Sign For US Inflation Trends

Submitted by Eric Bush via Gavekal Capital blog,

The gold/silver ratio recently took out 2009 highs and the gold/copper ratio is at its highest level since 2009. This is a negative signal that US inflation, using CPI, could be headed for another leg lower. Since 2008, the gold/silver ratio has had a -73% correlation to the year-over-year change in US CPI (with a 2-quarter forward lag for the gold/silver ratio) . So as the gold/silver ratio increases, the year-over-year change in the CPI tends to fall.

1 - Copy - Copy (2)

A similar relationship exists between the gold/copper ratio and US CPI. Over the past 20-years, the year-over-year change in US CPI has a -58% correlation to the gold/copper ratio (lagged forward one quarter). The current level of the gold/copper ratio suggests that the year-over-year change in CPI could fall below 0%.

1 - Copy - Copy

And all of this needs to be understood in the context that deflation remains a major fear in the stock and bond market. This fear can been visualized through the correlation between stocks and bonds. The four-year rolling correlation between US stocks and 10-year treasury yields has fallen from the all-time historic high seen from 2013-2015, however, it is st ...

Crude Pops After Rig Count Tumbles To New Lows

Crude prices had been sliding ahead of today's Baker Hughes rig count data but the slide stalled as the total rig count fell 9 to 431 - a new low (from over 2000 rigs at the cyclical peak). As the oil rig count continues to perfectly track lagged oil prices, we note that this week's 8 rig decline to a fresh cycle low of 343 could be the low. This year has still only seen one week in which rig counts did not decline.


Is this the low for the oil rig count, for now?


New record lows.

Charts: Bloomberg

Valeant's Makeover Is Just Beginning

Valeant's big move to replace outgoing CEO Michael Pearson has won the stock a well-deserved rally. The road won't get easier.

Google's Earnings Missed: Why You Shouldn't Worry

Google parent Alphabet has a history of falling short of Wall Street expectations. What is happening with the business is more important

Everyone Wants a Raise -- Except Investors

The price for strong bond and stock markets may be anemic wage growth.

The Margin: Don't be like Jon Snow: How not to miss out on 'Game of Thrones' premiere

When it comes to the œGame of Thrones, the viewer is the clear winner. HBO will air the œGame of Thrones season six premiere at 9 p.m. Eastern on Sunday.

The real cost of shopping at Whole Foods vs. Trader Joe's

Between Target, Safeway, Whole Foods and Trader Joe's, this grocery store is the cheapest.

London Markets: U.K. stocks erase weekly gain as miners slump

U.K. stocks drop for a second straight day on Friday, tracking a downbeat sentiment in Europe where fresh fears of another car emission-test scandal and mixed earnings sent markets lower.

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