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05May2016 Market Update: Afternoon Markets Trading Sideways As Investors Weigh The Probabilities Of An Impending Market Decline, Crude Prices Lower For Now, US Dollar Melting Back Up

Written by Gary

US markets opened up fractionally as expected and the Spooz has traded above and below the 2055 support/resistance for the entire morning session. WTI crude has slipped off its $46 high this morning and is trading quietly in the high 44's for now, but is expected to rise again and place immediate bearish pressure on Wall Street. Global financial data continues to be on the weak side worrying investors.


Here is the current market situation from CNN Money

North and South American markets are mixed. The S&P 500 is higher by 0.15%, while the Bovespa is leading the IPC lower. They are down 1.78% and 0.28% respectively.

What Is Moving the Markets

Here are the headlines moving the markets.

U.S. stocks gain as oil rebounds

(Reuters) - The S&P 500 and the Dow were higher in late morning trading on Thursday as a rise in oil boosted energy shares, but gains on Nasdaq were limited as Tesla dragged.

U.S. jobless claims rise; planned layoffs surge

WASHINGTON (Reuters) - The number of Americans filing for unemployment benefits rose more than expected last week, posting the biggest gain in more than a year, but the underlying trend continued to point to a strengthening labor market.

Alibaba's revenue soars, but new ventures hit profit

(Reuters) - Alibaba Group Holding Ltd, China's biggest e-commerce company, said fourth-quarter sales rose 39 percent after its core online shopping business grew, but profit fell for the first time as it spent on ventures like food delivery.

Oil up 3 percent as Canada fire, Libya violence unleash supply fears

NEW YORK (Reuters) - Oil prices jumped 3 percent on Thursday, resuming their rally from last week, as a raging wildfire near Canada's oil sands region and escalating Libyan violence raised more worries about immediate oil supplies than a longer-term glut.

FCC majority backs Charter purchase of Time Warner Cable

WASHINGTON (Reuters) - A majority of the five-member U.S. Federal Communications Commission has voted to approve Charter Communications Inc acquisition of Time Warner Cable Inc and Bright House networks, which would create the second-largest U.S. broadband provider and third-largest video provider, two sources briefed on the matter said Thursday.

Fed's Bullard says global headwinds appear to have waned

(Reuters) - Global headwinds that have partly prevented the U.S. central bank from raising rates again may have dissipated, St. Louis Federal Reserve President James Bullard said on Thursday.

Oil rivals cooperate to slash equipment costs: Shell

LONDON (Reuters) - Ten oil companies including Royal Dutch Shell , Chevron and BP are working together to develop standard production equipment, a rare cooperation among rivals to save money as low oil prices put pressure on budgets.

Merck sales disappoint as Januvia, Remicade fall short

(Reuters) - Merck & Co Inc on Thursday reported lower-than-expected quarterly revenue, hurt by disappointing sales of its Januvia diabetes treatment and Remicade arthritis drug.

Striking union workers protest at Verizon shareholder meeting

NEW YORK (Reuters) - Dozens of Verizon Communications Inc landline workers, on strike since mid-April after contract talks hit an impasse, marched on the company's annual shareholder meeting in Albuquerque, New Mexico, on Thursday and several people were arrested for blocking traffic, unions said.

Party's Over - High Yield Bond ETF Crushed By Largest Outflows Ever

It appears the credit market's dead-cat-bounce party is over. Following the almost unprecedented bounce off the February lows, the last few days have seen HYG (the largest high yield bond ETF) tumble back below its 200-day moving average as credit spreads (in IG and HY) start to widen significantly. The driver of this sudden weakness is now clear - a $2.3bn 4-day outflow which is the most sudden and largest redemption ever.

HYG tumbles below its 20-day moving average after the panic buying off the lows...

Driven by the largest 4-day cumulative fund outflows ever...

Which has smashed HYG back to a 'zero' premium to NAV as HY spreads push back to 2-month highs. We had argued previously that HYG (and the bond ETFs) had become cash storage facilities for credit funds unable to find enough cash bonds and new issuance to dump their flows into and so the massive outflows this last 4 days could be a sign of a preparation for a heavier HY calendar going forward (silver lining) or perhaps it is just time to get back to cash and reduce exposure after the biggest v-shaped recovery on record (amid tumbling earnings and macro).

Why Gazprom's 'Monopoly' In Europe Is Far From Over

Submitted by Irina Slav via OilPrice.com,

The first U.S. shipment of liquefied natural gas (LNG) arrived in Portugal last week and Gazprom did not immediately cut its own gas prices for Europe. While European media has hailed the entry of U.S. gas into the market as a game-changer and a monopoly-breaker, in the short term, nothing has changed at all.

Let's first get things straight: Gazprom is not a monopolistic supplier for Europe, though it's often called that. The Russian state giant actually supplies about one-third of the gas that Europe consumes. Norway supplies another quarter; so together, the two countries satisfy less than 60 percent of European gas needs. That's not a monopoly, although the current supply mix means that Gazprom is the single biggest player on the European market.

The U.S., on the other hand, has quickly turned into the world's biggest natural gas producer thanks to the shale boom. With prices pressed down hard by oversupply, U.S. gas producers are looking for international markets—and Europe is one obvious choice, but not the most lucrative.

According to calculations from one energy industry expert, the price for U.S. LNG landed in Europe could come in at $3.59 per MMBtu. Gazprom's average price this quarter was $180 per 1,000 cm3, or about $5.14 per MMBtu.

Numbers can be misleading, however, as different calculations make different price assumptions as evidenced by an Oxford Institute for Energy Studies estimate for U.S. and Gazprom prices laid out in

Surprise! Baltic Dry Index Plunges Most Since November As Commodity Bubble Bursts

Who could have seen this coming? Remember a week ago when TV entertainers crowed about the surge in The Baltic Dry Freight Index was a "clear signal" that 'China is back' baby and that escape velocity growth was just around the corner as global growth was destined to pick up...

Well, just as we warned very explicitly, the ramp in the index merely reflected the frenzied speculation in industrial metals by the Chinese and as authorities have cracked down on that idiocy, so the Baltic Dry has plunged by the most since November... as real demand punches back.

This was never going to end well.

Alibaba Earnings: Strong at the Core, But Side Bets Hurt

Alibaba's main e-commerce businesses continued to excel last quarter. But myriad investments in new areas dragged down results.

Tesla Earnings: It's All About the Dream

Enthusiasm for the Model 3 mass-market car has powered Tesla Motors to lofty heights. But first-quarter results should remind investors that the future isn't too far away.

Fitbit: The Cost of Competing With Apple

Fitness band maker expects earnings to recover by year's end, but the heavily shorted stock is unforgiving.

Capitol Report: Trump turns to Goldman Sachs veteran as finance chairman

Donald Trump has turned to a veteran of the investment bank he frequently criticized on the campaign trail to head up his finances for the presidential campaign.

Fitbit CEO says increased spending is necessary for growth

Fitbit CEO James Park said the company is spending on research and marketing as it rolls out new products and expands overseas.

Europe Markets: European stocks break four-day losing run as oil prices rally

European stock markets rise for the first time in five sessions, with optimism over a rally in oil prices outweighing concerns over a slowdown in growth in China's services sector.

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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