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26Jul2016 Market Update: US Markets Mixed, Large Caps In The Red And Trending Down, Crude Prices Steady And The US Dollar Melting Up

Written by Gary

US markets opened flat and rose to fractionally higher before sliding into negative territory. Prices for long-dated US Treasuries fell after the morning financial data, while the dollar rose against the euro. U.S. stocks were trading mixed in the unchanged zone by noon. WTI crude prices have been steady in the high 42's, but are expected to slip further in the next week.


Here is the current market situation from CNN Money

North and South American markets are mixed today. The Bovespa is up 0.37% while the IPC gains 0.11%. The S&P 500 is off 0.06%.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 76%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 84%
Investors Intelligence sets the breath Above 50 bullish 65%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. -4.41
StockChart.com NYSE % of stocks above 200 DMA Index ($OEXA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Following a major market correction, the conditions for safe re-entry are when:
a) Daily $OEXA200R rises above 65%
Secondary Bullish Indicators:
a) RSI is POSITIVE (above 50)
b) Slow STO is POSITIVE (black line above red line)
c) MACD is POSITIVE (black line above red line)
82%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 69%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 74%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 15.71
StockChart.com Consumer Discretionary ETF (XLY) As long as the consumer discretionary holds above [66.88], all things being equal, it is a good sign for stocks and the U.S. economy 81.73
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10,752

What Is Moving the Markets

Here are the headlines moving the markets.

Weak earnings weigh on Wall Street; Fed awaited

(Reuters) - U.S. stocks fell on Tuesday after weak results from a number of companies, including McDonald's and Gilead, dented investor sentiment.

Fed seen holding rates steady as inflation watch continues

SAN FRANCISCO (Reuters) - The U.S. Federal Reserve is expected to keep interest rates unchanged this week, deferring any possible increase until September or December, as policymakers hold out for more evidence of a pickup in inflation.

Verizon posts subscriber gain shortfall, says Yahoo to fuel media push

(Reuters) - Verizon Communications Inc disappointed Wall Street on Tuesday by reporting a smaller-than-expected subscriber gain for its main wireless business, while its CEO gave few details about plans to increase revenue from its planned purchase of Yahoo Inc's internet assets.

Goldman is sued in U.S. over merger linked to Malaysia's 1MDB

NEW YORK (Reuters) - Goldman Sachs Group Inc was sued on Tuesday by a major shareholder of a Malaysian bank it once advised, and which accused the Wall Street bank of fraudulently shortchanging it in a merger to curry favor with that country's prime minister.

The identity crisis that led to Yahoo's demise

SAN FRANCISCO (Reuters) - When senior Yahoo executives gathered at a San Jose hotel for a management retreat in the spring of 2006, there was no outward sign of a company in crisis.

Caterpillar shares up on earnings beat; cuts 2016 outlook

(Reuters) - Caterpillar Inc reported better-than-expected second quarter earnings on Tuesday, lifting its shares, but the heavy machinery maker also lowered its full-year forecast amid sluggish demand in mining and other industries.

U.S. consumer confidence steady; new home sales near eight-and-a-half-year high

WASHINGTON (Reuters) - U.S. consumer confidence held steady in July and new single-family home sales hit their highest level in nearly 8-1/2 years in June, suggesting sustained momentum in the economy that could allow the Federal Reserve to raise interest rates this year.

Special Report: In Venezuela's murky oil industry, the deal that went too far

CARACAS/BOGOTA (Reuters) - Even for Venezuela's notoriously opaque economy, it was a sweetheart deal that went too far.

Brewer AB InBev seeks to nail SABMiller bid with sweetened offer

BRUSSELS/LONDON (Reuters) - Anheuser-Busch InBev raised its $100 billion-plus bid for rival brewer SABMiller on Tuesday in an attempt to quash investor dissent over an offer made less attractive by a post Brexit vote fall in the pound.

Why Swap Spreads Are Suddenly Blowing Out And Why This Is Good For Treasuries

Over the past week, market watchers have noticed something which otherwise could be seen as a warning signal: there has been a dramatic move in swap spreads space, notably a substantial widening in recent days from what was until recently record tight - and negative - levels, coupled with a blow out in FX swaps, where the EURUSD has seen its cross-currency swap slide -3 bps today to -48 bps, the widest since July 2012. And, as UBS puts it in a report by Chirag Mirani overnight, "the recent move wider in swap spreads warrants attention."

However instead of reflecting funding pressures or financial market stress (more on that in a subsequent post), the move can be attributed to something more innocuous: money market reform, which according to UBS has played an important role in reversing the tightening trend in spreads that began in 2014. "In essence, the demand from prime money market funds for commercial paper is shrinking and is moving to USTs."

The impact is two-fold: while $300-500bn in outflows has been seen from prime money market funds, causing about 10-12bp of widening in front-end swap spreads, this development is also "effectively, a new source of balance sheet has been created for USTs via regulation."

For those who need some more background, it has been long documented that UST swap spreads tightened (see Figure 2) over the past few years as dealer balance-sheet for USTs shrunk, corporate issuance increased and as foreign central banks sold USTs to defend their currencies. This long standing swap spread tightening move was led by the long-end spreads and coincided with the October, 2014 UST flash crash (see Figure 2).

However, more recently, UST swap spreads have enjoyed a widening resurgence led ...

Oil Is Going Down To 15 Dollars A Barrel (Video)

By EconMatters

Demand is not going to be enough to rebalance the oil market, we still need a major supply rebalancing, as the oil market has been oversupplied for a decade.

EconMatters All Rights Reserved | Facebook | Twitter | YouTube | Email Digest | Kindle

Nigeria Says "Don't Panic, Banks Are Fine" Amid Currency Collapse, Inflation Spike Concerns

A month ago we warned of the looming hyperinflation coming to Nigeria (as well as much of Africa). It appears, following the central banks' rate hike to a record 14% (reach for yield anyone) in an attempt to stall the ongoing currency collapse, that Emefiele is worried, warning of "concern over headline inflation spike." Perhaps most worrying though, amid the chaos, Emefiele advised depositors in banks "to go about your business," adding that there was "no need to panic or worry." Hhhmm..

The rate hike is not working, Spot Naira is tumbling on the day to record lows, and forward rates are signaling much more to come... but don't let that stop Emefiele from jawboning... *NIGERIA'S EMEFIELE:`SO FAR, SO GOOD' ON NEW FX REGIME

Emefiele had plenty to say...


*NIGERIA'S EMEFIELE: CONCERNED OVER HEADLINE INFLATION SPIKE

*NIGERIA'S EMEFIELE: INFLATION SPIKE IS STRUCTURAL

*NIGERIA'S EMEFIELE: FOREIGN INVESTORS REMAINED LUKEWARM

And this little gem:


*NIGERIA'S EMEFIELE: MORE LIQUIDITY WILL CURB INFLATION (wait what?)

But he saved the best for last...


*NIGERIA'S EMEFIELE: BANKING SYSTEM REMAINS STRONG

*NIGERIA'S EMEFIELE: NO PANIC OR WORRY IN BANKING SECTOR

*NIGERIA'S EMEFIELE: NO NEED TO PANIC THAT A BANK IS IN DISTRESS

Why Sand Is the Oil Industry's Bellwether

Sand miners have rebounded, bolstering evidence that fracking and the oil and gas market have bottomed.

Why Investors Are Too Wary of Some Brexit Blows

Virgin Money may be too optimistic in its outlook, but investor pessimism is also overdone.

What the Democrats Mean for the Stock Market

The rule of thumb that Republicans are better for investors and big business needs more nuance now.

Why lower gas prices are making college students suffer

Most college students probably don't pay too much attention to the fluctuations in oil and gas prices, but perhaps they should.

The Technical Indicator: Bull trend intact, S&P 500 stages garden-variety pullback

The U.S. markets' bigger-picture technical backdrop continues to support a firmly-bullish view. Consider that each major stock benchmark has reached less-charted territory, amid broadening sector participation, while selling pressure remains conspicuously absent.

Earnings Summary for Today

Earnings Calendar provided by Investing.com.

leading Stock Positions

Leading Stock Quotes powered by Investing.com

Current Commodity Prices


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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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