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10May2016 Market Update: US Averages Up One Percentage Point, Crude Climbing And Investors Putting Worries Aside For Now

Written by Gary

US averages solidly in the green, up over one percentage point, with the DOW up almost 200 points, crude trending up and the US dollar steady in the low 94's. The biggest one-day gain in about a month, helped by a rally in financial shares and with commodity prices boosting energy and industrial stocks.

Here is the current market situation from CNN Money

North and South American markets are broadly higher today with shares in Brazil leading the region. The Bovespa is up 2.46% while U.S.'s S&P 500 is up 1.03% and Mexico's IPC is up 0.55%.

What Is Moving the Markets

Here are the headlines moving the markets.

Exclusive: Say goodbye to OPEC, powerful Putin pal predicts

MOSCOW (Reuters) - Internal differences are killing OPEC and its ability to influence the markets has all but evaporated, top Russian oil executive Igor Sechin told Reuters in some of his harshest remarks ever about the oil cartel.

Wall Street on track for best one-day gain in a month

(Reuters) - U.S. stocks were up more than 1 percent on Tuesday, putting them on track for their biggest one-day gain in about a month, helped by a rally in financial shares and with commodity prices boosting energy and industrial stocks.

Exclusive: U.S. investigates market-making operations of Citadel, KCG

NEW YORK (Reuters) - Federal authorities are investigating the market-making arms of Citadel LLC and KCG Holdings Inc, looking into the possibility that the two giants of electronic trading are giving small investors a poor deal when executing stock transactions on their behalf.

SWIFT rejects Bangladeshi claims in cyber heist, police stand firm

(Reuters) - SWIFT has 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.

Saudi Aramco finalizes IPO options and plans global expansion

DHAHRAN, Saudi Arabia (Reuters) - Saudi Arabia's state-owned oil giant Aramco is finalizing proposals for its partial privatization and will present them to its Supreme Council soon, its chief executive said about the centerpiece of the kingdom's efforts to overhaul its economy.

Allergan profit beats estimates, share buybacks planned

(Reuters) - Allergan Plc , whose $160 billion merger with Pfizer Inc collapsed last month, reported a higher-than-expected quarterly profit and said it would buy back up to $10 billion in company stock, helping lift its shares 4 percent.

U.S. Fed awards $31.04 billion in reverse repos

NEW YORK (Reuters) - The Federal Reserve on Tuesday awarded $31.04 billion of one-day, fixed-rate reverse repurchase agreements to 24 bidders at an interest rate of 0.25 percent, the New York Fed said on its website.

U.S. job openings hit eight-month high, skills mismatch emerging

WASHINGTON (Reuters) - U.S. job openings increased in March to the highest level in eight months and layoffs continued to decline, indicating the labor market remains fairly robust despite April's slowdown in employment gains.

Oil up 3 percent; Canada, Nigeria outages offset U.S. stockbuild worry

NEW YORK (Reuters) - Oil prices rose about 3 percent on Tuesday, recovering most of the previous session's losses, as supply disruptions of 2.5 million barrels per day in Canada and elsewhere offset concerns about growing record high U.S. crude stockpiles.

This Amazing Silver Trend Will Make Short Term Price Movements Irrelevant

srsrocco icon

By the SRSrocco Report,

While precious metals investors are concerned about the short-term price movements in silver, the real focus should be on this interesting silver market trend. When the silver market data finally came out in the new 2016 World Silver Survey (released May 5th), it really surprised me. And, it takes a lot to surprise me.

Not only did physical Silver Bar & Coin demand hit a new record in 2015, it did so in a huge way. Physical Silver Bar & Coin demand jumped 24% in 2015 versus the prior year reaching a record 292.3 million oz (Moz). Part of the reason for the higher record was the addition of "Private Bars & Rounds" to the statistics.

global silver bar coin demand

I had mentioned in prior articles that I had an email exchange with the GFMS Team at Thomson Reuters about the Private Bars & Rounds figure. The GFMS Team stated that they were working on including this amount, but I thought it would be in the next few years. However, they updated all their past Silver Bar & Coin demand to include Private Bars & Rounds in the 2016 World Silver Survey.

For example, the GFMS Team revised North American Silver Bar demand in 2014 from 10.8 Moz to 42.2 Moz, due the addition of private bars & rounds. The revision was even higher in 2015 as Official Silver coin sales were in severe shortage from July to October. When the GFMS Team first put out their 2015 Silver Interim Report in November 2 ...

The Washington Post Accuses Stingy Americans Of Ruining Obama's Recovery

Every year it's the same: some legacy mainstream media mouthpiece muses on how great Obama's recovery would be... if only it wasn't for stingy US consumers refusing to spend like the drunken sailors of days gone by. Last June, it was the WSJ's Jon Hilsenrath who actually wrote a letter to American consumers, confused by their unwillingness to spend and explicitly accused them of being "stingy" even as the "Federal Reserve was counting" on them to spend, spend, spend. For those who have forgotten this absolute pearl, here it is again:

Dear American Consumer,

This is The Wall Street Journal. We're writing to ask if something is bothering you.

The sun shined in April and you didn't spend much money. The Commerce Department here in Washington says your spending didn't increase at all adjusted for inflation last month compared to March. You appear to have mostly stayed home and watched television in December, January and February as well. We thought you would be out of your winter doldrums by now, but we don't see much evidence that this is the case.

You have been saving more too. You socked away 5.6% of your income in April after taxes, even more than in March. This saving is not like you. What's up?

We know you experienced a terrible shock when Lehman Brothers collapsed in 2008 and your employer responded by firing you. We know stock prices collapsed and that was shocking too. We also know you shouldn't have taken out that large second mortgage during the housing boom to fix up your kitchen with granite countertops. You've been working very hard to pay off this debt and we admire your fortitude. But these s ...

The EU's Kiss Of Death

Submitted by Judith Bergmann via The Gatestone Institute,

The European Union may yet come to realize that this latest ill-concealed jab at the Central- and Eastern European members of the European Union may signal the beginning of the unraveling of the European Union, an event which, considering the authoritarian structure of the organization, might be a good thing. The EU's authority comes, undemocratically, from the top down, rather than from the bottom up; it is non-transparent, unaccountable and there is no mechanism for removing European Commission representatives.

"We especially do not like it when people who have never lived in Hungary try to give us lectures on how we should cope with our own problems. Calling us racists or xenophobes is the cheapest argument. It's used just to dodge the issues." -- Zoltán Kovács, spokesman for Hungary's Prime Minister Viktor Orban.

By persisting in pushing their agendas on European Union member states that still consider themselves sovereign and not merely provinces of the EU, Timmermans and his European Commission bureaucrats may just have given the European Union its kiss of death.

The European Union is hell-bent on forcing member states to take "their share" of migrants. To this end, the European Commission has proposed reforms to EU asylum rules that would see enormous financial penalties imposed on members refusing to take in what it deems a sufficient number of asylum seekers, apparently even if this means placing those states at a severe financial disadvantage.

The European Commission is planning sanctions of an incred ...

"Stellar" 3 Year Auction Leaves Shorts Running For Cover

We had a feeling there would be a squeeze into today's 3Y auction after this morning reports of that the OTD was trading tight, and quite "special" at -0.5% in repo, traditionally indicative of a notable lack of deliverable and underlying on the day of the auction.

The repo market is also why just before the auction we wondered if there would be another tradtional repo-driven squeeze into today's auction:

3Y was -0.50% in repo today. Squeeze?

" zerohedge (@zerohedge) May 10, 2016

And, sure enough, just moments later we got confirmation of precisely such a squeeze because the $24 billion in 3Y paper which according to the When Issued was supposed to price at 0.89%, instead printed at 0.875%, stopping through the WI by a whopping, for this tenor, 1.5 bps.

The internals were, in the words of Stone McCarthy, "stellar", with the Bid to Cover rising to 2.933, the highest since January, but it was once again the take down where the surprise was because as the chart below shows, the Indirects took down a whopping 61.5%, the highest also sicne January, and with Directs taking down 10.2%, it left only 28.3% for the Dealers, the second lower allottment to the group since 2009.

The market reaction upon the news was to be expected: a sharp pull back in yields especially on the short end.

Amd so, once again, we find that it remains all about positioning and investors being left wrongfooted heading into auctions that have a substantial short overhang.

Tesla: The Cost of Elon Musk's Model 3 Vision

Elon Musk's electric ambition could turn into a problem for Tesla shareholders.

How Credit Suisse Gained From Its Stock Price Collapse

The Swiss bank got a rare and peculiar boost in its corporate center, which drove the lower than expected losses in the first quarter.

Why the Eurozone May Avoid a Greek Crisis This Summer

The eurozone finally started discussing more debt relief for Greece. That may avert a summer showdown.

The post office lost $2 billion in 3 months

The U.S. Postal Service says it lost $2 billion in the latest quarter, but most of that was because of mandated employee benefits that are out of its control.

ESPN and Verizon reach settlement over distribution dispute

Walt Disney Co.'s sports network ESPN said on Tuesday it has reached a settlement with cable provider Verizon Communications Inc. over distribution methods for the network.

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