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13May2016 Market Update: Averages Melting Downward, SP500 Below 2055 Resistance, Global Worries Keep Investors Sitting On Hands

Written by Gary

US markets have sea-sawed all morning from red to green and back to negative values. As we trade in the afternoon session, the averages are melting down (SPY -0.5% and below S1), Crude consolidating and slightly volatile and the US dollar off session highs fractionally. Short-term indicators modestly bearish with falling volume.

Here is the current market situation from CNN Money

What Is Moving the Markets

Here are the headlines moving the markets.

U.S. retail sales rise strongly, boost economic outlook

WASHINGTON (Reuters) - U.S. retail sales in April recorded their biggest increase in a year as Americans stepped up purchases of automobiles and a range of other goods, suggesting the economy was regaining momentum after growth almost stalled in the first quarter.

Wall Street lower as oil price drop adds to consumer stock woes

(Reuters) - U.S. stocks were lower on Friday afternoon as a decline in oil prices added to the pressure from consumer stocks after strong April retail sales data was overshadowed by gloomy earnings reports from retailers.

Apple invests $1 billion in Chinese ride-hailing service Didi Chuxing

(Reuters) - Apple Inc said on Thursday it has invested $1 billion in Chinese ride-hailing service Didi Chuxing, a move that Apple Chief Executive Tim Cook said would help the company better understand the critical Chinese market.

Oil slips as dollar strengthens but traders eye Nigerian outages

NEW YORK (Reuters) - Oil prices slipped on Friday, ending a three-day rally, as a strong dollar weighed and investors cashed in on recent gains, but losses were cushioned by outages in Nigeria that have slashed output to the lowest in over two decades.

Warning of downward spiral, IMF sees no economic upside to Brexit

LONDON (Reuters) - International Monetary Fund chief Christine Lagarde said on Friday there were no economic positives to Britain leaving the European Union and that the impact would range from "pretty bad to very, very bad".

Exclusive: Iraq oil projects face delays as companies resist spending cuts

BAGHDAD (Reuters) - International oil firms have warned Iraq that projects to increase its crude output will be delayed if the government insists on drastic spending cuts this year, a senior Iraqi oil official said on Friday.

Sanofi presses on with threat to oust Medivation's board

(Reuters) - France's Sanofi SA was moving ahead on Friday with preparations to replace Medivation Inc's board of directors after the U.S. cancer drug maker refused to engage with it in sale talks based on a $9.3 billion acquisition offer.

Mitsubishi Motors deal may help Nissan crack emerging Asia at last

NEW DELHI/BEIJING (Reuters) - Despite years of trying, Asia's fast-growing emerging markets have proved elusive for Japan's Nissan Motor Co , one reason behind its $2.2 billion move this week to take control of scandal-hit Mitsubishi Motors Corp .

Silicon Valley venture capitalists raise more money, give less away

SAN FRANCISCO (Reuters) - Venture capitalists are raising money at the fastest rate in a decade, raking in about $13 billion in the first quarter of 2016.

US Rig Count Continues To Crash

The total US rig count declined yet again this week, down 9 to 406 - a new record low. The last four times rig counts collapsed anything like this, the US economy was in recession.

Oil rigs dropped 10 to a new cycle low at 318, but appear near a turning point if lagged oil prices remain any indication...

Drug Prices Soar Most In The 21st Century

Back in 1998, when Pfizer introduced Viagra it charged so much for the novelty, much needed drug (which millions of men would literally pay anything for) that it sent the entire pharma/drug price index soaring by nearly 15% for about a year. This can be seen, appropriately enough, in the spike on the chart below.

But, what is more troubling for Americans these days is while the 1998 Viagra "spike" came and went, in recent years, pharmaceutical preparation, i.e., drug prices have been soaring higher with every passing year, and according to today's PPI report, at the wholesale level, drug prices in April surged by 9.6% over the past year, the biggest increase since 1982 when excluding the Viagra outlier, and certainly the most in the 21st century.

This is an issue, because while much of these prices are passed on to consumers at the individual level, this is not reflected in broader core inflation. In fact, when comparing core CPI with drug prices, one sees that while in the early 1980s the two series were both astronomically high, since then - according to the BLS - core inflation has been tame and subdued even as drug prices have been rising, initially slowly and in recent months, exponentially.

And while one can debate how much of PPI has or should be reflected in CPI - in this case virtually none of it - despite exploding Obamacare premiums (which also magically are never accounted for ...

Bond Yields Are Plunging

After some early selling - on the "great" retail sales data, bond yields are plunging now with the long-end dramatically outperforming with 2s30s 10bps flatter on the week so far...the biggest drop since August 2015

And stocks are starting to catch down...

What happens next?

Charts: bloomberg

The Last Time This Happened, Home Prices Collapsed

The number of people who believe now is a "good time to buy a home" has been stagnant for the last 6 months, but, according to University of Michigan's latest survey, there has not been more people who believe now is a "good time to sell" since March 2006... which marked the absolute peak in US home prices...

What happens next...When everyone knows it's a bubble?

Seems like a surge in "good time to sell a home" since The Fed 'unleashed' its rate rise environment... maybe time to back off that rhetoric before they implode another welath-destructing bubble.

Retail Troubles: It Isn't Just About Amazon

A strong retail-sales report reveals just how deep a funk traditional retailers are in.

Apple Takes Billion Dollar Detour to Fix Troubles in China

Apple's Didi Chuxing investment shows the company is looking to change its fortunes in China. Investors should now factor in that the cost of doing so has risen.

Why Europe's Investment Banking Pain is Here to Stay

Big banks on the continent are falling further behind U.S. rivals and there's little hope for improvement.

Market Extra: Hedge funds blame the Fed for their poor performance

The SALT hedge fund conference " an annual Las Vegas event put on by Skybridge Capital, which has become the industry's biggest yearly event " hasn't fully exuded the sort of bluster and bravado one would associate with the business.

Deep Dive: 22 U.S. companies that just keep getting more profitable

With most S&P 500 member companies beating analysts' estimates for earnings per share, a better gauge " gross profit margins " helps investors understand the real story, says Phil van Doorn.

Economic Report: Retail sales leap 1.3%, biggest gain in a year

Sales at U.S. retailers jumped 1.3% in April to mark the biggest gain in a year, with auto dealers, gas stations and online vendors spearheading the charge.

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