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01Aug2016 Market Close: Stocks And Bonds Both Slip, Dragged Down By Energy Sector, Except For NASDAQ Closing At 52-Week High

Written by Gary

The S&P 500 and the Dow closed slightly lower on Monday, as a drop in oil prices dragged down energy stocks, while tech names Apple and Alphabet helped lift the Nasdaq to its highest close in over a year. The S&P 500 had hit a record high earlier in the session, but was unable to hold gains as U.S. crude (CLc1) slumped to below $40 a barrel, its lowest level since April, before settling at $40.06. (from Reuters)

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

U.S. factory activity slips; construction spending hits one-year low

WASHINGTON (Reuters) - U.S. manufacturing activity eased in July amid shrinking order backlogs and declining employment, while an unexpected drop in construction spending in June suggested second-quarter economic was probably even weaker than reported last week.

Wall St. edges lower as energy sector weighs

(Reuters) - The S&P 500 and the Dow closed slightly lower on Monday, as a drop in oil prices dragged down energy stocks, while tech names Apple and Alphabet helped lift the Nasdaq to its highest close in over a year.

AB InBev and SABMiller expect megabrew merger to complete October 10

BRUSSELS (Reuters) - Anheuser-Busch InBev and SABMiller , the world's two largest brewers, set out a timetable on Monday for the final stages of their $100 billion-plus merger, with completion of the deal expected in a little more than two months.

SolarCity accepts Tesla's $2.6 billion offer; both shares fall

(Reuters) - SolarCity Corp agreed to Tesla Motors Inc's $2.6 billion offer to buy the solar panel installer, the companies said on Monday, clearing one obstacle in the way of Elon Musk's ambitious plans for a carbon-free energy and transportation company.

U.S. crude breaks below $40, oil ends down more than 3 percent

NEW YORK (Reuters) - U.S. crude tumbled below $40 per barrel on Monday for the first time since April, as oil prices settled down nearly 4 percent on heightened worries of a crude glut despite peak summer fuel demand.

Gawker Media founder files for personal bankruptcy

NEW YORK (Reuters) - Gawker Media Chief Executive Nick Denton filed for personal bankruptcy protection on Monday, according to court documents that name his largest creditor as Hulk Hogan, a former professional wrestler who won a $140 million court judgment against the news website over a sex tape it posted.

Brexit could add to European banking costs: JPMorgan's Dimon

(Reuters) - JPMorgan Chase & Co Chief Executive Jamie Dimon said on Monday that Britain's decision to leave the European Union could lead to duplicate costs to provide banking services to European customers.

After bruising China battle, Uber cedes to rival Didi

(Reuters) - After a bruising two-year battle, ride-hailing firm Uber is selling its China operations to bigger local rival Didi Chuxing in a deal that will give Uber a one-fifth stake in Didi.

Verizon to buy vehicle management company Fleetmatics for $2.4 billion

(Reuters) - Verizon Communications Inc said on Monday it would buy GPS vehicle tracking firm Fleetmatics Group Plc for about $2.4 billion in cash to bolster its expansion into the connected vehicle and fleet management market.

Deutsche Bank, Credit Suisse Kicked Out Of Stoxx Europe 50 Index

What do you do when you are one of the biggest indices in Europe and are unable to rise simply because two of your biggest constituents, if not so much in market cap any more but certainly in terms of systemic importance, just can't catch a bid? Why you delete them, of course even if the two names in question happen to be Europe's two largest banks, Deutsche Bank and Credit Suisse.

Moments ago, STOXX Ltd, the operator of Deutsche Boerse Group's index business, announced component changes in the STOXX Europe 50 Index due to the fast-exit rule. All changes become effective with the open of markets on Aug. 8, 2016.

What is the Fast Exit rule? "The rule states that a component is deleted from the Dow Jones EURO STOXX 50 or Dow Jones STOXX 50 indexes if it ranks 75 or below on the respective index's monthly selection lists for a consecutive period of two months. Deleted components for all three indexes will be replaced by the highest ranking non-components on the monthly selection list. Component changes will be announced on the first trading day of the month following the publication of the monthly selection lists, implemented on the close of the fifth trading day and effective the next trading day."

In other words, someone did not like how DB and CS were trading and decided to kick them out.

And here are the replacements.

What does this really mean from a price index standpoint? Simple: the following.

Slippery Oil Prices Plunge Over Cliff into Bear Market

This article by David Haggith was first published on The Great Recession Blog. By fernost (Self-photographed) [Public domain], via Wikimedia Commons

Oil today plunged unrestrained below $40 per barrel, taking oil prices down more than 20% from their high a little over a month ago. That officially defines a bear market in oil. As of today, oil has also moved below its 50-day, 100-day and 200-day moving averages. July has again turned out to be a huge disappointment for oil producers who mistakenly thought price recovery had come to stay.

5 Questions Market Bulls Must Answer

Submitted by Lance Roberts via RealInvestmentAdvice.com,

There has been a litany of articles written recently discussing how the stock market is set for a continued bull rally. The are some primary points that are common threads among each of these articles which are that interest rates are low, corporate profitability is set to recover and the Central Banks monetary accommodations continue to put a floor under stocks. I do not disagree with any of those points.

The concern with each of those points, which are supporting higher asset prices, is they are all artificially influenced by outside factors. Interest rates are low because of the Federal Reserve's actions, corporate profitability is high due to accounting rule changes following the financial crisis and Central Banks globally are pushing liquidity directly into the financial system.

The stock market has rallied sharply in direct correlation to the expansion of the Fed's balance sheet yet economic growth has floundered much to the dismay of the Federal Reserve.

Fed-BalanceSheet-SP500-080116

Dow Suffers Longest Losing Streak In A Year As Crude Crashes, Credit Craters

It appears the market thinks Janet is the net...

After a multi-decade record 9 up-days in a row, The Dow is now down 6 days in a row - the longest losing streak since August 2015...

The S&P 500 managed to make intraday record highs once again, thanks to a VIX smash to 12.00... but then the machines ran out of stops again...

As investors rushed for the safe haven triple-digit P/Es of FANG stocks...

Which sent Nasdaq higher on the day.. and thanks to an utterly farcical panic bid into the close, Small Caps managed green too...

We're gonna need another stress test...

Uber in China: Why Foreigners Never Win in Tech

Ride-hailing service Uber was smart to bolt China while it could still get a ride out of town.

A Double Dose of Risk for Tesla in SolarCity Deal

Elon Musk's two cash-burning companies agree to merge, testing the entrepreneur's ability to keep valuation high and funding costs low.

America's Booming Auto Market Is Showing Its Age

Ford Motor last week jolted the U.S. auto industry, saying industry sales have peaked following six years of growth. The warning reverberated across the market.

01Aug2016 Market Update: Wall Street Falling Off Sharply After New Highs, WTI Crude Falling Over 2%, Investors Pounder Over Helicopter Money Possibilities

Written by Gary

Wall Street hit new historic highs this morning and then fell sharply to mixed status leaving the $NDX high and dry at +0.5%. WTI crude has plunged into the 40 handle support and may seek lower prices. Despite weak economic data and the sell-off in crude, as investors chewed over remarks from Fed officials.

The Language Of Lying

We hear anywhere from 10 to 200 lies a day. And although we've spent much of our history coming up with ways to detect these lies by tracking physiological changes in their tellers, these methods have proved unreliable. Is there a more direct approach? Noah Zandan uses some famous examples of lying to illustrate how we might use communications science to analyze the lies themselves.

The Tell: Jamie Dimon questions accuracy of GDP data

Jamie Dimon is in it for the long haul and isn't being hassled by short-term data, even to the point of questioning whether quarterly GDP numbers are accurate anymore.

Outside the Box: Why Wall Street's discrimination against women has no future

The ways in which women are mistreated and discriminated against on Wall Street are well-known, and ready for change, writes Lotte Bailyn.

Market Snapshot: U.S. stocks end lower as crude oil re-enters bear market

U.S. stocks lose momentum Monday as crude-oil prices fell deeper into bear-market territory while weaker-than-expected manufacturing data weighed on sentiment.

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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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