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19May2016 Market Update: Wall Street Down Continuing Worries Of A June Interest Hike, Crude Recovers Fractionally And Short-Term Indicators Bearish

Written by Gary

US markets down fractionally, DOW off triple digits, SP500 down -0.8% as daily volume slips to low. Federal Reserve signaled the possibility of an interest rate hike as early as June and a stronger dollar and oversupply concerns pressured oil prices. Midday short-term indicators moderately bearish and a recovery to higher levels is highly unlikely today.


Here is the current market situation from CNN Money

North and South American markets are broadly lower today with shares in Mexico off the most. The IPC is down 1.30% while Brazil's Bovespa is off 1.04% and U.S.'s S&P 500 is lower by 0.88%.

What Is Moving the Markets

Here are the headlines moving the markets.

Golfer Mickelson says returning Dean Foods trading gains

(Reuters) - Professional golfer Phil Mickelson said on Thursday he has agreed to return gains he made in 2012 from trading in Dean Foods Co stock and said he felt "vindicated" that U.S. authorities have not charged him with violating securities laws.

U.S. economic data point to second-quarter GDP rebound

WASHINGTON (Reuters) - The number of Americans filing for unemployment aid fell from a 14-month high last week, the latest sign the economy was picking up speed in the second quarter and likely would be healthy enough for the Federal Reserve to raise interest rates in June.

Wal-Mart profit beats expectations; stock jumps

(Reuters) - Wal-Mart Stores Inc on Thursday reported a higher-than-expected quarterly profit as increased drug prices and solid demand for basic apparel items boosted sales, and its shares jumped more than 9 percent.

Wall Street sharply lower amid rate hike bets, fall in oil

(Reuters) - U.S. stocks fell sharply on Thursday after the Federal Reserve signaled the possibility of an interest rate hike as early as June and a stronger dollar and oversupply concerns pressured oil prices.

Fed's Dudley says rate hike might be needed in June or July

NEW YORK (Reuters) - The U.S. economy could be strong enough to warrant an interest rate increase in June or July, New York Federal Reserve President William Dudley said on Thursday, in the latest sign Wall Street may be underestimating the chances of near-term monetary tightening.

AEP says spin offs won't be hit by closure of McClendon's firm

HOUSTON (Reuters) - The closure of American Energy Partners after the sudden death of founder Aubrey McClendon will not affect companies it formed and spun off with Texas-based private equity firm Energy & Minerals Group, according to an AEP statement seen on Thursday.

Adidas sets sights on soccer stars in big U.S. drive

BERLIN (Reuters) - Adidas wants to sign dozens of deals with U.S. sports stars in coming years, hoping that will provide a more lasting boost to sales than the current fashion fad for its retro sneakers, its North America head told Reuters.

Group calls on U.S. to speed up favorable regulations for autonomous cars

WASHINGTON (Reuters) - A group seeking to reduce U.S. dependence on foreign oil on Thursday called on policymakers to remove regulatory hurdles in order to accelerate the deployment of self-driving cars, as well as revise tax incentives to boost sales of less expensive electric vehicles.

Oil down over 2 percent as dollar soars on U.S. rate hike fears

NEW YORK (Reuters) - Crude oil prices fell more than 2 percent on Thursday as the dollar's surge on U.S. rate hike expectations drove players from the oil market.

Fed Up With The Fed

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Destroying our ability to discover the real cost of assets, credit and risk has not just crippled the markets--it's crippled the entire economy.

Is anyone else fed up with the Federal Reserve? To paraphrase Irving Fisher's famous quote about the stock market just before it crashed in 1929, we've reached a permanently high plateau of Fed mismanagement, Fed worship and Fed failure.

The only legitimate role for a central bank is to provide emergency liquidity in financial panics to creditworthy borrowers. Once the bad debt (credit extended to failed enterprises and uncreditworthy borrowers) is written off, the system resets as asset valuations adjust to reality--how ever unpleasant that might be for the credulous participants who believed the ever-present permanently high plateau shuck and jive.

Just to state the obvious: Fed policies are not just insane, they're destructive:

-- Bringing future sales/demand forward by lowering interest rates to zero just digs a gigantic hole in future sales/demand. Funny thing, the future eventually becomes the present, and instead of a brief recession of low demand we get an extended recession of weak demand and over-indebted households and enterprises.

-- Enabling massive systemic speculation by those closest to the Fed's money spigot is insane and destructive, as capital is no longer allocated on productive returns and risk but on the speculative gains to be reaped with the Fed's free money for financiers

-- Buying assets to artificially prop up markets completely distorts the markets' ability to price assets b ...

"What The Hell Just Happened" - To Gartman "Yesterday Was Our Worst Day Of The Year Thus Far"

Some abnormally amusing market commentary from everyone's favorite "commodity guru", Dennis Gartman.

[W]e are reminded of a day many, many years ago when as a member of the Chicago Board of Trade we had come home, beaten and thoroughly exhausted as the bond futures had traded both limit up and limit down only to have closed the day unchanged. The trading activity was violent; random and huge, and our wife at the time ¦ with whom we are still very good friends ¦ having seen on the television that the bond market had closed unchanged on the day greeted us at the door by saying œIt must have been a boring day. It was anything but boring! It was almost life changing. To many on the floor with us, it was life threatening; to very, very few it was life affirming. To everyone it was frightening.

Yesterday was that day relived, except this time it was in the equities market. Having been 150 Dow points higher and then only moments later to have traded down to where the Dow was suddenly 150 lower, the market finished effectively unchanged, with the Bulls and the Bears left scratching their heads and wondering aloud, œWhat the hell just happened?

* * *

Yesterday was our worst day of the year thus far, as that which we were long of fell and that which we were short of closed unchanged. Long ago we learned that when things go awry and do so as œmajestically as they did yesterday it is best to simplify, simplify and to simplify again. Getting smaller; getting less involved; curtailing positions in numbers and sizes is the only proper way to respond and so we did exactly that. We exited everything other than our positions in GEUR, GYEN and our short derivatives position ¦ and even that we cut back upon to leave ourselves net short of equities ...

Preet Bharara Press Conference On Dean Foods Insider Trading Scandal That Snagged Phil Mickelson

Over a decade ago, the US cracked down on Marth Stewart as an example of all that is wrong with the US financial system. The same US which did not put any bankers in prison after the financial crisis. We now get a repeat. The United States Attorney for the Southern District of New York Preet Bharara announces charges against William œBilly Walters and Thomas Davis, the former Chairman of the Board of Directors of Dean Foods Company, for insider trading.

Meanwhile, the real criminals, the real central banks, the HFTs, all continue to rig and manipulate markets day after day...

Global Markets: Is the Calm After the Storm Over?

The U.S. Federal Reserve's renewed appetite for rate increases challenges the status quo in markets.

Time to Put China's Currency Back on Worry List

The factors supporting a stable yuan "a weakening dollar and a stabilizing Chinese economy "are reversing.

How Google's Dreams Power Its Reality

Home automation and virtual reality seem far from Google's core, but the company needs to keep expanding its platform.

April 2016 Leading Economic Index Improves. Above Expectations.

Written by Steven Hansen

The Conference Board Leading Economic Index (LEI) for the U.S improved this month - and the authors believe "despite a slow start in 2016, labor market and financial indicators, and housing permits all point to a moderate growth trend continuing in 2016.".

London Markets: FTSE 100 slides to 2-month low after Fed hints at rate hike

U.K. stocks move sharply lower on Thursday after the U.S. Federal Reserve signals an interest-rate increase in June is still on the table if the economy continues to improve.

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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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