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%.
$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)
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.
(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.
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.
(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.
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.
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.
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 ...
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
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.
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