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09May2016 Market Update: Crude Prices Down 3%, DOW Down 2%, Major Averages In The Green, Healthcare Up, Factory Sector Appears To Be Stabilizing, Short-Term Indicators Mildly Bearish

Written by Gary

The DOW is down 0.2% and the other major averages are in the green, mostlu up a half percentage point. Declines in energy, oil prices fell more than 3 percent, and materials stocks being offset by a bounce in healthcare shares, which has boosted NASDAQ. Investors and traders took in their stride the impact of wildfires on Canada's oil output and after another inventory build at the U.S. delivery hub for crude futures.


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 1.27% and 0.16% respectively.

What Is Moving the Markets

Here are the headlines moving the markets.

Health stocks help Wall Street limit losses as energy drags

(Reuters) - The Dow and the S&P 500 were little changed in early afternoon trading on Monday, with declines in energy and materials stocks being offset by a bounce in healthcare shares, which boosted the Nasdaq.

Redstone competence trial ends as judge tosses lawsuit

LOS ANGELES (Reuters) - A trial over Sumner Redstone's mental competence abruptly ended on Monday when a California judge threw out a lawsuit brought by the 92-year-old's former girlfriend, Manuela Herzer, saying Redstone's deposition made clear the media mogul knew what he wanted.

Fed's Kashkari says accommodative policy needed to bring workers back

MINNEAPOLIS (Reuters) - Minneapolis Federal Reserve Bank President Neel Kashkari on Monday signaled his support for the cautious and patient approach to rate hikes laid out by Fed Chair Janet Yellen, saying the current stance of monetary policy is "about right."

Tribune Publishing adopts poison pill to stop Gannett bid

(Reuters) - Newspaper publisher Tribune Publishing Co said its board had adopted a shareholder rights plan - popularly known as a "poison pill" - in a bid to thwart Gannett Co Inc's unsolicited takeover offer.

Hopes of factory jobs rebound fade in U.S. heartland

(Reuters) - The U.S. factory sector appears to be stabilizing after a long and painful slide, but not when it comes to jobs.

Oil down 3 percent as market reappraises Canada wildfire impact

NEW YORK (Reuters) - Oil prices fell more than 3 percent on Monday after traders took in their stride the impact of wildfires on Canada's oil output and after another inventory build at the U.S. delivery hub for crude futures.

China curbs Baidu healthcare ads business after student's death

BEIJING (Reuters) - Chinese regulators have imposed limits on the number of lucrative healthcare adverts carried by Baidu Inc following the death of a student who underwent an experimental cancer treatment which he found using China's biggest Internet search engine.

Fed's Evans favors 'wait and see' on more rate hikes

LONDON (Reuters) - The U.S. economy's fundamentals are solid and growth this year should pick up to around 2.5 percent, but the Federal Reserve's current 'wait and see' approach to monetary policy is appropriate, a Fed policymaker said on Monday.

Americans see slightly higher inflation, uncertainty grows: NY Fed survey

NEW YORK (Reuters) - An increasingly important gauge of U.S. inflation expectations edged higher last month but remained broadly depressed, as Americans said they were less certain about prices in the years ahead.

Tesla Enters Bear Market (Again) - Drops 23% In A Month

Chanos 1 - 0 Musk...

"Capitalism Has A Crisis" - Deutsche Sees No Light At The End Of The Tunnel "Until There Is A Recession"

In recent months unexpected calls have emerged from unexpected sources questioning whether capitalism is even working any more in a world in which corporate profits refuse to drop leading to paltry wage gains and thus, lack of the all-important wage inflation. Most recently it was none other than Goldman who wrote in February that "we are always wary of guiding for mean reversion. But, if we are wrong and high margins manage to endure for the next few years (particularly when global demand growth is below trend), there are broader questions to be asked about the efficacy of capitalism."

Maybe Goldman should ask the Fed about its thoughts on mean reverting "capitalism" in a world in which creative destruction is no longer possible.

Over the weekend, it was Deutsche Bank's rather outspoken credit strategist Dominic Konstam who, in a post-script to a note in which he ominously warned that
the "worst kind of recession" may have already started (based on Friday's nonfarm payrolls report), goes on to conclude that the crisis facing the "developed" world is a far deeper one than just that of profits and demographics. It is a crisis of capitalism itself.

This is what he said.

The reason that inflation is the historical exception rather than the rule is because of the over-supply issue. Say's Law says that supply creates its own demand, but only until it doesn't! This truism created Keynes' theory to work off deficient demand. It also includes the logic of negative rates to reduce the attractiveness of profits into cash that is superior to "goods" that will lose their value if hoarded, i.e. profits not being reinvested in the business.

Capitalism can be successful for long periods when it can id ...

Oil's Blazing Canadian Wake-up Call

Wildfires near Canada's Fort McMurray have temporarily brought the global oil market back into balance and should serve as a sign the glut isn't permanent.

Volkswagen: Why Turnaround Hopes Are Building

After months of gloom, glimmers of hope are emerging that the German car maker might tackle the governance obstacles blocking its road to recovery.

Brexit and Sterling: The Phoney War Could Yet Get Real

The pound's rally against the dollar looks fragile in the face of the U.K.'s Brexit debate.

Capitol Report: Trump right in theory, wrong in practice, that U.S. can avoid default by printing money

Presumptive Republican Presidential candidate Donald Trump may be technically correct that the U.S. could avoid default on its debt by printing money but the results would be ruinous, one analyst said.

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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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