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08Jul2016 Market Close: SP 500 Closes Above 2100 Which Is A Big Deal For Investors, WTI Crude Remains Down As Analysts See More Decline, Short-Term Indicators Remain Bearish In Spite Of Spectacular Jobs Report

Written by Gary

US markets closed up +1.5%, DOW up 251 points, SP500 up +1.5% and WTI closed down in the low 45's. The benchmark S&P 500 stock index traded above its record close at 2130 as US job growth surged in June as manufacturers and other employers boosted hiring.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

S&P 500 index nears record high after blowout jobs report

NEW YORK (Reuters) - The benchmark S&P 500 stock index traded above its record close on Friday as Wall Street rallied after a much-larger-than-expected print in jobs growth confirmed the U.S. economy has regained speed after a first-quarter lull.

U.S. economy posts largest job gains in eight months in June

WASHINGTON (Reuters) - U.S. job growth surged in June as manufacturers and other employers boosted hiring, confirming the economy has regained speed after a first-quarter lull, but tepid wages suggested the Federal Reserve will probably not raise interest rates soon.

NHTSA to probe Harley-Davidson motorcycles for brake failure

(Reuters) - The National Highway Traffic Safety Administration (NHTSA) said it would investigate some motorcycles made by Harley-Davidson Inc after complaints of brake failure without warning.

Theranos CEO Holmes barred from operating lab for two years

(Reuters) - Theranos Inc founder and CEO Elizabeth Holmes, once touted as the Steve Jobs of biotech for her company's innovative blood-testing technology, has been barred by a U.S. regulator from owning or operating a lab for at least two years.

U.S. recession risk rises on auto sales fall: J.P. Morgan

NEW YORK (Reuters) - The risk of the U.S. economy slipping into a recession in the next 12 months increased to its highest level during the current expansion following a drop in auto sales in June, J.P. Morgan economists said on Friday.

Goldman Sachs hires former EU chief Barroso

LONDON (Reuters) - Goldman Sachs has hired former European Commission President Jose Manuel Barroso to be an advisor and non-executive chairman of its international business, the U.S. bank said on Friday, as it grapples with the fallout from Britain's exit from the European Union.

Germany denies investigating Tesla over software updates

BERLIN (Reuters) - Germany's Transport Ministry denied a media report on Friday that it was investigating Tesla Motors Inc for updating driving assistance software without informing authorities, but said it was "clarifying technical issues" on the matter.

Oil edges up but biggest weekly drop in Brent since January

NEW YORK (Reuters) - Crude prices inched up in choppy trading on Friday but Brent notched its largest weekly drop in nearly six months, as strong U.S. jobs data and bargain hunting by investors pitted against seasonally weak consumption of oil.

DuPont must pay extra $500,000 in lawsuit over Teflon-making chemical

NEW YORK (Reuters) - U.S. jurors ordered DuPont on Friday to pay an additional $500,000 in punitive damages to a man who said he developed testicular cancer from exposure to a toxic chemical used to make Teflon at one of its plants, according to a lawyer for the plaintiff.

Goldeja-vu - How The Bear Ends

Submitted by Pater Tenebrarum via,

Gold Continues to Mimic the 1970s

Ask and ye shall receive... we promised we would update the comparison chart we last showed in late November in an article that kind of insinuated that it might be a good time to buy gold and gold stocks (see: "Gold and Gold Stocks - It Gets Even More Interesting" for the details). We are hereby delivering on that promise.


A Lydian gold stater from the time of the famously rich King Croesus, approx. 570 BC. It seems they already had this bull/bear thing going at the time...

It is actually interesting to revisit both past articles speculating about a potential gold bottom that turned out to be correct (those would be the many articles we penned on the topic from August 2015 onward) as well as those that turned out to be incorrect (which would e.g. include a number of articles written in late 2014. Although they managed to catch a playable rally in timely fashion, it ultimately turned out to be a bear market rally).

If you do that you will notice how much more careful we got over time - even when we definitely saw good potential for at least a short term move, we always stressed that the turn might still not be at hand. Apart from such psychological considerations, it is of course also well worth comparing the fundamental, technical and sentiment signals we have tr ...

Trader Asks: "Remember The All Time Highs After Bear's Subprime Funds Blew Up?"

One of the most enduring legacies of the financial crisis is the death of the credible notion that traders flock in and out of "safe havens." As Bloomberg's Richard Breslow notes, investors don't particularly care to seek safety. Why waste the effort when the central banks will be buying the dip if you don't.

It's also true that no one knows what is a haven. It's become little more than a parlor game to advise what won't be affected or will benefit from this or that calamity in an utterly interconnected world.

Rushes into safe assets represent no more than the private sector flow equivalent of front-running central banks. They just have a shorter shelf life.

Investors tumbled even further down the rabbit hole of ridiculous sovereign bond yields after the U.K. referendum.

They realized that, at worst, rate hikes were off the table. And at best, the base-case scenario, even more extraordinary monetary policy is coming.

Ten-year Italian BTPs look like a steal at 1.25%. Forget an imploding financial sector and political uncertainty, I hear Draghi's a buyer.

Shrewd investors are flocking to the Japanese yen because if the rest of the world falls apart, Sony will just sell more Walkmans domestically?

In 2007, after Bear Stearns shuttered its two subprime funds there was the quaint theory that everyone should pile into simple stuff like the S&P 500 to avoid those misbehaving and suddenly not understood derivatives that had nothing to do with the broader economy. Remember the new all-time highs, or what happened after?

Consumer Credit Jumps $19 Billion In May Thanks To New All Time Highs In Student And Auto Loans

The latest consumer credit report confirmed what we have now known for years: revolving credit remains stagnant at best, with just $2.3 billion in credit card debt added in May, a modest rebound from last month's $1.4 billion but certainly nowhere near pre-crisis monthly increase levels. Why not? Because US consumers once again found a way to "fungibly" convert non-revolving credit, namely auto and mostly student loans, into purchasing power.

And sure enough, in May another $16.2 billion in non-credit card debt was added, bringing the total monthly increase to $18.55 billion, above the $16 billion consensus.

What this means is that for one more month Americans became even more encumbered by record amounts of student debt and car loans.

Finally, when it comes to the all too generous sources of consumer credit, one entity sticks out.


The Bearish David Rosenberg Reemerges: "What If I Told You Employment Actually Declined 119,000 In June"

After several years of trying to put a positive spin on economic data in an attempt to validate the success of Fed policies, which in light of recent events have clearly failed with bond yields today touching new all time lows and market-derived inflation expectations about as low as they have ever been while even CNBC now admits that the only policy target of the Yellen Fed is to keep stocks as high as possible (there it is clearly succeeding for now), it was somewhat surprising to see Rosie "the bull" vaporize, and be replaced by the bearish side of David Rosenberg in such vigorous fashion today after years of hibernation.

The metamorphosis took place in what was a rather scathing take on today's jobs report, about which he said that "it makes little or no sense that the business sector would be so cautious over committing capital to the real economy and at the same time embark on a sustained hiring spree."

We agree. Here are the highlights:

What if I told you that employment actually declined 119,000 in June and has been faltering now for three months in a row? Yes, that is indeed the case.

Of course, the focus, as always is on the non-farm payroll report but keep in mind that while this is the data series that moves markets, it does not necessarily have the final word on how the labor market is truly faring.

Okay, so let's get the pablum out of the way first. Nonfarm payrolls surprised yet again but this time to the upside — surging 287,000 in the best showing since last October and again making a mockery of the consensus economics community which penned in a 180,000 bounce.... when taking May and June together, they average out to be less than 150,000 versus the twelve-month average of 200,000 so even as the June data pulled a major upside surprise, the overall ...

The Good News on Jobs

The June jobs report was an occasion for investors to celebrate rather than fret about the Federal Reserve.

Brexit and the Hit to U.K.'s Consumer Culture

Consumer confidence has been slammed by the Brexit vote. More headwinds are in store for the U.K. economy

China's Banks Are Sitting on a Lumpy Cushion

Chinese banks are issuing tens of billions in Tier 2 capital to absorb losses, and investors are snapping up the instruments—but they provide less protection to investors than they may realize.

This is No. 1 financial regret of older Americans

The most significant money regrets that Americans have.

The Money Makers: The inventor of the 401(k) says he created a 'monster'

Ted Benna helped turn a little-noticed new subsection of the tax code into the least likely of household names: the 401(k).

5 things rich people do with money — that you should be doing

You can learn a lot from how rich people handle their money.

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