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16May2016 Market Close: DOW Closes Up Triple Digits, Crude Closes Higher, US Dollar Remains Weak, Apple Jumps Higher

Written by Gary

DOW closed higher, triple digits, but off its session highs as did the SP500 closing up 1%. WTI trading pit settled at $47.89 and the US dollar remained in the mid 94's. Wall Street rallied sharply today, primarily by a jump in Apple shares and gains from energy stocks that were backed by stronger oil prices.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Wall St. rallies on Apple, energy boost

NEW YORK (Reuters) - Wall Street rallied sharply on Monday, juiced by a jump in Apple shares and gains from energy stocks that were backed by stronger oil prices.

Domestic focus may limit clout of $2 trillion Saudi fund

DUBAI (Reuters) - Saudi Arabia aims to create the world's biggest sovereign wealth fund, a $2 trillion behemoth that can throw its weight around global markets, but the fund's growth abroad is likely to be slowed by its responsibility for aiding the economy at home.

Oil hits six-month highs on supply outages, Goldman forecast

NEW YORK/LONDON (Reuters) - Oil prices hit six-month highs on Monday on worries about global supply outages and as long-time bear Goldman Sachs sounded more positive on the market, although a stockpile build at the U.S. storage hub for crude futures limited gains.

Buffett's Berkshire invested $1 billion in Apple

(Reuters) - Warren Buffett's Berkshire Hathaway Inc revealed a more than $1 billion stake in Apple Inc , a rare foray into the technology sector that the billionaire has largely shunned, apart from a poorly performing investment in IBM .

Pfizer to buy Anacor in $5.2 billion deal for access to eczema gel

(Reuters) - Pfizer Inc is buying Anacor Pharmaceuticals Inc in a $5.2 billion deal to add an eczema gel to its portfolio, just a month after the U.S. drug major scrapped plans to acquire Allergan Plc .

HSBC axes 840 IT jobs in Britain in first big wave of planned cuts

LONDON (Reuters) - HSBC , Europe's largest bank, started laying off 840 information technology workers in Britain on Monday, the first big tranche of redundancies under a restructuring plan that will eliminate 8,000 British jobs by the end of next year.

Verizon, striking unions set talks after meeting with U.S. official

(Reuters) - Verizon Communications Inc and representatives from two striking unions will return to the negotiating table on Tuesday after a weekend meeting with U.S. Secretary of Labor Thomas Perez.

Delta trims growth in flights as rivals' expansion hurts prices

(Reuters) - Delta Air Lines Inc on Monday said it will fly fewer seats this winter than it had planned and defer the 2018 delivery of four large aircraft, as extra flights by rivals threaten to depress its ticket prices.

German state refused to clear VW management but relented: source

BERLIN (Reuters) - Volkswagen shareholder Lower Saxony wanted to withhold its backing for the carmaker's top management at a supervisory board meeting but relented to avoid further damaging the firm, a source close to the German federal state said.

Investors Dump Bonds, Bullion For Safety Of Biotech Stocks After Dismal China Data

A broad-based miss across the spectrum of Chinese data with loan growth collapsing was just what the bullish algos needed to BTFD at Sunday night's open...

You knew it was going to be an odd day after China's flash-crash overnight...

Deja vu all over again from last Tuesday...No Volume meltup off VWAP

Futures show the day's reality best...

Nasdaq and Small Caps led the way today..

As VIX was smashed back to a 14 handle...

ETF Gold Holdings Rise At The Fastest Pace Since 2009 As Central Banker Credibility Plunges

As Eric Peters explained a few days ago, by pushing prices to overvaluation and reducing yields on every investment asset, central banks have destroyed investors ability to create a portfolio that can withstand even the slightest economic disruption. Peters correctly describes it as "the most obvious disaster in finance."

By reducing the yield on every investment asset, pushing prices to overvaluation, this policy also destroyed the ability of investors to build diversified portfolios capable of withstanding even the slightest economic disruption. Which ultimately results in reduced private sector risk-taking; the lifeblood of every economy. "This is the most obvious disaster in finance. Central bankers don't quite understand it."

As a result of such practices Peters touched upon (ie: negative interest rate environment and concerns over a struggling global economy), two things have occurred. First, gold has become one of the top performing assets YTD through April.

Secondly, total gold ETF holdings is seeing its fastest rise since 2009, with total holdings at a level not seen since 2013.

"Markets Have No Purpose Any More" Mark Spitznagel Warns "Biggest Collapse In History" Is Inevitable

After making over $1 billion in one day last August, and warning that "the markets are overvalued to the tune of 50%," Mark Spitznagel knows a thing or two about managing tail risk.

The outspoken practitioner of Austrian economic philosophy tells The FT, "Markets don't have a purpose any more - they just reflect whatever central planners want them to," confirming his fund-management partner, Nassim Taleb's perspective that "being protected from fragility in the financial system is a necessity rather than an option."

"This is the greatest monetary experiment in history. Why wouldn't it lead to the biggest collapse? My strategy doesn't require that I'm right about the likelihood of that scenario. Logic dictates to me that it's inevitable."

While some money managers are critical of a strategy that "sells fear," The FT reports there are others who share Mr Spitznagel's views that another reckoning is imminent.

Among those who share his wo ...

Falling Chinese Demand Could Intensify The Oil War

Submitted by Jacob Hess via OilPrice.com,

China Oil Demand

The Chinese slowdown did more than drag down its own economy, it singlehandedly created financial tremors throughout the global financial markets. With consistent growth rates well over 6 percent, China's economic health is an integral part of global expansion.

But just last year, investors saw the disintegration of billions of dollars' worth of wealth on the Asian giant's stock market. The globalized economy experienced economic withdrawals with lagging Chinese demand, a substance to which both foreign and local industries have become addicted. It goes without saying that industrial and manufacturing demand in the Chinese economy acts as a relevant indicator of the world's financial condition, similar to the status of the United States. For that reason, investors have no choice but to realize the implications that can come from changes in demand for Chinese goods, services, and capital.

A country's stock market is often a leading indicator of its economic performance. In China, two dramatic corrections occurred in the middle of 2015 which translated to the weakness that would infect the global economy. From its peak last year, the Shanghai CSI 300 Industrial Index has lost over 50 percent of its value in a downtrend that has depressed sentiment surrounding the industrial and manufacturing sectors in China. The downtrend has softened but continues to devalue large-cap industrial shares approaching values seen in mid-to-late 2014. As far as projections go, the stock market appears to be a ...

Apple as a Value Play: Buffett's Berkshire Approves

Warren Buffett may have passed on Apple before, but its valuation has become too compelling to ignore.

Biotech M&A: Pfizer Bets on Growth

Pfizer's purchase of Anacor shows the biotech M&A window is still open.

TJX's Success Breeds Imitators and Challenges

Off-price retailer TJX has been a bright spot in retail, but its success will be put to the test.

Deep Dive: This is why Apple is a classic Warren Buffett value investment

Apple's stock is cheap, according to two measures used by Buffett, writes Phil van Doorn.

The Ratings Game: J.C. Penney upgraded on turnaround strategy that steers away from apparel

J.C. Penney was upgraded at Robert W. Baird & Co. on its plan to improve business by reaching its $1 billion EBITDA goal.

Bond Report: Treasury yields log largest daily gain in 3½ weeks

Treasury prices fell Monday, pushing yields to log their largest daily gain since April 20, as a rally in risk assets, mainly oil and equities, dampened demand for investment perceived as safe, most notably Treasury bonds.

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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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