Markets closed mixed with the DOW down 92 points, the Spooze down 0.2% and the Nasdaq up 0.1%. Crude prices tumbled after scare rumors and settled with a loss at $49.10 a barrel. The SP500 remains below 2100, closing today at 2096 dashing any hopes the bulls might have had for climbing above the resistance seemingly unable to break decisively above 2090.
WASHINGTON (Reuters) - U.S. consumer spending recorded its biggest increase in more than six years in April as households stepped up purchases of automobiles, suggesting an acceleration in economic growth that could persuade the Federal Reserve to raise interest rates soon.
NEW YORK (Reuters) - Michael Pearson, the former chief executive officer of Valeant Pharmaceuticals International , will receive a $9 million severance payment and agreed to a consulting agreement worth hundreds of thousands of dollars, according to a document filed with regulators.
NEW YORK (Reuters) - U.S. stock prices fell on Tuesday on weaker-than-expected economic data, while expectations of a possible Federal Reserve interest rate increase lifted the dollar to near a two-month high against a basket of currencies.
BERLIN (Reuters) - Volkswagen's mass-market VW brand returned to profit in the first quarter, in a sign deep cost cutting is starting to revive the business at the heart of the German carmaker's emissions test cheating scandal.
BRUSSELS/LONDON (Reuters) - European Union governments should not ban services like home-rental site Airbnb or ride-hailing app Uber except as a last resort, the EU says in new guidelines, seeking to rein in a crackdown on the "sharing economy".
There's just no other way to describe how cheap South Africa is right now.
Between the worldwide decline in commodities prices, and a major crisis of confidence in the national government here, the local currency (South African rand) remains at the lowest level it's been... ever.
And that's made nearly EVERYTHING here dirt cheap if you're spending foreign currency... especially US dollars.
Just doing something simple like eating out at a restaurant or going to the grocery store can be startling.
Once you do the math and convert the prices back to US dollars, it almost seems like you're missing a zero.
This also carries over into many asset prices, including certain areas in the property market.
Here in Johannesburg, I saw an amazing home for sale in one of the nicest, upscale neighborhoods with an asking price of about $515,000 US dollars.
Now, half a million bucks might not sound terribly cheap- until you find out what you're getting for the money.
The house is an enormous seven-bedroom compound of nearly 13,000 square feet.
Pool. Courtyard. Fountains. Private chef's kitchen. Parking for eight. Separate home for live-in staff. Wonderful neighborhood with top schools, shops, and restaurants.
Something like this would go for at least 20 times that price in Los Angeles, and 40 times the price in London.
Much of this price mismatch is due to the currency anomaly- that the South African rand is so undervalued, AND that the US dollar is so overvalued.
With the S&P500, seemingly unable to break decisively above 2090, investors are wondering what are the main catalysts that can push the market higher, and are asking questions. To help with the confusion, Deutsche Bank has laid out the top five recurring questions asked by investors who are trying to figure out what will push stocks higher. Among these are whether European (and global) equities will rally as Brexit fears are being priced out; is there scope for earnings upgrades and will value stocks finally start outperforming.
However, the two most important questions by far, those whose answer will determine not only the near term return of the S&P, but also global equity markets as well as that all-important commodity, oil, are the following:
Can the oil price hold up even as the dollar rises?
Can the CNY depreciate without hurting asset prices?
Let's take a look at these in sequence; first: will the recent disconnect between rising oil and a rising dollar persist? This is Deutsche Bank's answer:
Can the oil price hold up even as the dollar rises? The oil price has risen above $50/bbl this week, despite a number of negative catalysts: a) the broad dollar TWI is up 3% since the start of May on increased market expectations for a Fed rate hike - consistent with oil below $40/bbl, according to historical correlations; b) iron ore has already dropped by 30% from its late April peak as the China rebound has faded (historically the correlation with the oil price has been very strong at around 60%); and c) the oil price has rallied far ahead of what sluggish global economic momentum would have suggested. Oil remains crucial, given that it has been the key driver of US high-yield credit spreads in this cycle, with the risk premium ...
In his op-ed in The Washington Post, Chris Grayling, leader of the House of Commons, made the case for British withdrawal from the European Union — in terms Americans can understand.
Would you accept, Grayling asks, an American Union of North and South America, its parliament sitting in Panama, with power to impose laws on the United States, and a high court whose decisions overruled those of the U.S. Supreme Court?
Would you accept an American Union that granted all the peoples of Central and South America and Mexico the right to move to, work in, and live in any U.S. state or city, and receive all the taxpayer-provided benefits that U.S. citizens receive?
This is what we are subjected to under the EU, said Grayling.
And as you Americans would never cede your sovereignty or independence to such an overlord regime, why should we?
Downing Street's reply: Prime Minister David Cameron says leaving the EU could cost Britain a lot of money and a loss of influence in Brussels.
The heart versus the wallet. Freedom versus security.
While Barack Obama, Cameron and Angela Merkel are pulling for Britain to vote to remain in the EU, across Europe, transnationalism is in retreat, and tribalism is rising.
As Britain's Independence Party and half the Tory Party seek to secede from the EU, the Scottish National Party is preparing a new referendum to bring about Scotland's secession.
The strongest party in France is the National Front of Marine Le Pen. In Austria's presidential election, Norbert Hofer of Jorg Haider's Freedom Party came within an ...
Econintersect wants your comments,
data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.
Econintersect Live Market
Print this page or create a PDF file of this page
The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.
Take a look at what is going on inside of Econintersect.com