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09May2016 Market Close: DOW Down, Major Averages Up, Crude Settles Down Over 2% And Short-Term Indicators Remain Mildly Bearish

Written by Gary

The S&P 500 and the Nasdaq Composite logged modest gains today, but the DOW ended lower as a slide in crude futures weighed on Wall Street. The Dow closed down 35 points, or 0.2% lower at 17,783. Crude oil prices erased all of Friday's gains and more, as June futures ended the pit session 2.7% lower to $43.55 bbl even as the wildfires in Canada's oil sands continue to spread. The sacking of Ali al-Naimi as head of Saudi Arabia's oil ministry also may be a reason why oil prices failed to maintain early gains.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Fed's Kashkari says current U.S. interest rates 'about right'

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."

Wall Street mixed as energy falls, Allergan rallies

(Reuters) - Wall Street was mixed on Monday, with declines in energy and materials stocks offset by a bounce in Allergan Plc and other healthcare companies.

Redstone competence trial ends as judge tosses lawsuit

LOS ANGELES (Reuters) - Media mogul Sumner Redstone never set foot in the Los Angeles courtroom where his mental competency was on trial in recent days.

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.

Exclusive: Medivation succumbs to pressure to explore sale - sources

(Reuters) - U.S. cancer drug maker Medivation Inc has decided to explore a sale following a $9.3 billion acquisition offer from France's Sanofi SA and interest from other companies, people familiar with the matter said on Monday.

U.S. Fed awards $23.24 billion in reverse repos

NEW YORK (Reuters) - The Federal Reserve on Monday awarded $23.24 billion of one-day, fixed-rate reverse repurchase agreements to 17 bidders at an interest rate of 0.25 percent, the New York Fed said on its website.

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.

SWIFT rejects Bangladeshi claims over $81 million cyber heist

(Reuters) - SWIFT on Monday rejected allegations by officials in Bangladesh that technicians with the global messaging system made the nation's central bank more vulnerable to hacking before an $81 million cyber heist in February.

Lending Club CEO resigns after internal probe, shares plummet

(Reuters) - Renaud Laplanche, founder and chief executive of online lender Lending Club Corp , resigned after an internal probe found that the company had knowingly sold an investor $22 million of loans that the investor did not want, the company said on Monday.

Biotech-Buying Spree Helps Stocks Shrug Off China Crash, Commodity Collapse, & Credit Crunch

There is some serious turmoil going on in credit, commodities, and FX.. but stocks shurugged it all off because jobs were shitty enough to warrant a bid??

China Commodities crashed....With Iron Ore now down 22% from the meltup highs, entering a bear market...

And Steel Rebar down 25%, extending losses in the US session...

Stocks were caught between a rallying JPY carry trade and a tumbling crude correlation...

And traded in a very narrow range around VWAP all day...

Dow ended the day red and Trannies cluing to unch at the close...Seems like the momnent Europe closed everything was awesome. ...

Morgan Stanley: "Creative Destruction, Once The Backbone Of Capitalism, Is No Longer Considered"

The following brief comment by Morgan Stanley's chief FX strategist Hans Redeker is one of the best summaries of the sad state the centrally-planned world finds itself in after 7 years of constant central bank manipulation to push risk assets higher no matter the cost.

Global imbalances have stayed strong but these imbalances are no longer expressed by current account differences and worries concerning foreign funding needs. Instead, current account differentials have developed into output gap differentials. Concretely, Asia's current account surpluses have converged into supply, which within a world of demand deficiency has created overcapacity and falling investment returns.

Theoretically, there are three possible outcomes to deal with overcapacity. Austrian School-like destruction, increasing exports and finally providing debt-funded domestic demand. Creative destruction, once the backbone of a functioning capitalist system, is no longer seriously considered as the social costs of this approach appear unacceptably high. What remains are adjustments via exports and increasing local demand against ever-rising balance sheets.

Translation: since politicians are spineless cowards (and would much rather have the Fed do their work for them) and will never agree to kill zombie companies (or capital markets) and be exposed to the ire of their newly unemployed constituents, the only options are currency devaluation (exports) and even recorder debt, which makes the original problem even worse.

Oh, and next time Deutsche Bank laments that "capitalism is in a crisis", please first read the bolded sen ...

About Those "One-Time, Non-Recurring" Litigation Expenses...

A few years ago we asked why anyone would exclude litigation charges from bank EPS. While we are still waiting for someone to explain that to us, we'd like to show an update on just how dilutive to shareholder value these "one-time, non-recurring" litigation charges have been over the past six years.

The top three banks alone have taken $107.7 billion in litigation charges from 2010-2015, with Bank of America head and shoulders above its competition in the race to see just how much legal expense can be incurred before anyone other than Zero Hedge cares.

Chart: Goldman Sachs

Unsurprisingly, Citigroup, JP Morgan, and Bank of America all decided to reward their CEOs for the uncanny ability to erode shareholder value, by giving significant raises in 2015.

Citigroup's Michael Corbat received a 27% raise in 2015, bringing his total compensation to $16.5 million.

JP Morgan gave Jamie Dimon a 35% raise, bringing his total comp to $27 million in 2015.

LendingClub: When the Disrupter Gets Disrupted

LendingClub's problems run deeper than just-reported issues with a loan sale.

Disney's Tale Finds a Happy Ending

Even with all eyes on ESPN, other aspects of Disney's business should give investors reasons to cheer.

Oil: What the Saudi Shake-Up Means

The removal of Saudi Arabia's oil minister isn't bearish in and of itself for oil prices because policy was already set by the palace. But the pace of reforms bears much more watching.

The Wall Street Journal: High-end Morgans hotel chain dealt to hospitality company SBE for $82 million

A long saga in which the two companies have held on-and-off-again merger talks to draw to a close with SBE paying $2.25 a share in cash for the outstanding shares of Morgans.

'We are on the brink of a catastrophe': 9 highlights from Bill Ackman's Valeant emails

As Valeant's pricing and accounting crises played out last year, Ackman and management were scrambling to reframe the issues.

These Brooklyn college students have a message for Congress

The most important issue for these students may surprise you.

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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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