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18Aug2016 Market Update: Wall Street Flat And Mixed, WTI Crude Rising, US Dollar Falling, Investors Still Sitting On Hands Waiting For Mr. Market To Make A Move

Written by Gary

US markets are in the mixed and flat zone of trading. The DOW is down 12 points and the Spooze is up +0.05% while the US dollar continues to fall. WTI crude has inched its way up into the 48 handle as it continues to trends upward to the 5o resistance. Short-term indicators remain moderately bearish


Here is the current market situation from CNN Money

North and South American markets are mixed. The S&P 500 is higher by 0.04%, while the Bovespa is leading the IPC lower. They are down 0.46% and 0.18% respectively.

What Is Moving the Markets

Here are the headlines moving the markets.

Labor market firming; factories still struggling

WASHINGTON (Reuters) - The number of Americans filing for unemployment benefits fell more than expected last week, reinforcing views of labor market strength that could encourage the Federal Reserve to raise interest rates soon.

Wall Street flat as drop in tech stocks offsets oil gains

(Reuters) - Wall Street pared earlier gains and was little changed in early afternoon trading on Thursday, as a drop in technology stocks offset gains in energy companies on the back of higher oil prices.

Exclusive: Monte dei Paschi CEO, former chairman under investigation - source

FLORENCE, Italy (Reuters) - The chief executive of Monte dei Paschi di Siena , Fabrizio Viola, and the Italian bank's former chairman, Alessandro Profumo, are under investigation for alleged false accounting and market manipulation, a source with knowledge of the matter said.

Uber buys self-driving truck startup Otto; teams up with Volvo

(Reuters) - Ride service Uber Technologies Inc said on Thursday it has acquired the self-driving trucks startup Otto, and it also announced that Volvo Car Group has agreed to a $300 million alliance to develop self-driving cars.

Wal-Mart draws more shoppers, raises fiscal-year outlook

(Reuters) - Wal-Mart Stores Inc reported higher-than-expected quarterly earnings on Thursday, saying employee wage increases led to an improved shopping experience that helped draw more customers to its U.S. stores.

Harley-Davidson to pay $12 million fine over motorcycle emissions

WASHINGTON (Reuters) - Harley-Davidson Inc agreed to pay a $12 million civil fine and stop selling illegal after-market devices that cause its motorcycles to emit too much pollution, the U.S. Justice Department said on Thursday.

United Air names new CFO, chief commercial officer in shuffle

(Reuters) - United Continental Holdings Inc said on Thursday it appointed a new chief financial officer and chief commercial officer in the first major management shuffle since Oscar Munoz took the helm of the airline last September.

Philly Fed business index rises, job gauge hit seven-year low

(Reuters) - Business activity in the U.S. mid-Atlantic region improved in August, but local employment deteriorated to its worst level in seven years, a survey from the Philadelphia Federal Reserve released on Thursday showed.

Citi CEO seen asking for more patience as targets still elusive

NEW YORK (Reuters) - Earlier this year, an analyst asked Citigroup Inc Chief Executive Michael Corbat what he would do if activist investors tried to shake things up after what seems like eons of underperformance.

Gawker Gone - CEO Denton Says Site Will Shut Down Next Week

Thiel 1 - 0 Denton

As Gawker's J.K Trotter writes on the site's main page - Gawker to end operations next week...

After nearly fourteen years of operation, Gawker.com will be shutting down next week.

The decision to close Gawker comes days after Univision successfully bid $135 million for Gawker Media's six other websites, and four months after the Silicon Valley billionaire Peter Thiel revealed his clandestine legal campaign against the company.

Nick Denton, the company's outgoing CEO, informed current staffers of the site's fate on Thursday afternoon, just hours before a bankruptcy court in Manhattan will decide whether to approve Univision's bid for Gawker Media's other assets.

The near-term plans for Gawker.com's coverage, as well as the site's archives, have not yet been finalized.

What Janet Yellen Will Say At Next Week's Jackson Hole Meeting: BofA's Preview

Now that even the WSJ has written about the "Fed's 'Schizophrenic' Debate", explaining that If you listen to Fed officials this week, the economy is either "strong enough to absorb not one but two rate hikes in the last four months of 2016", or "on a such a new path that the central bank needs to entirely scrap and "rethink" its policy outlook because economic reality is simply not in line with their expectations", and yesterday's dovish FOMC Minutes doing nothing to help the confusion unveiled by Bill Dudley's most recent surprisingly hawkish tone (reiterated moments ago when he said that his "view on a hike hasn't changed since his Tuesday interview"), all eyes turn to Yellen's speech next Friday at Jackson Hole, with the hope that she will provide at least some clarity, whether hawkish or dovish.

That will likely not happen - after all the Fed is now entirely dependent on the market, which due to the reflexive relationship between monetary policy and risk assets, the Fed is unable to predict - but here, courtesy of BofA's brand new chief economist, Michelle Meyer, is what one can expect from Janet at a meeting where historically the Fed chair has made major policy announcements, traditionally serving to push the market higher.

Yellen goes to Jackson Hole

The focus will be on the future

On August 25-27, many key economists and policymakers will be gathering in a serene mountainside resort in Jackson Hole, Wyoming, for the annual economic symposium. The topic is "Designing Resilient Monetary Policy Frameworks for the Future", which will likely include lessons learned from the crisis and expectations for the future conduct of monetary policy. Although market participants will be on the lookout for clues about the timing of the next hike ...

Another Market Descends Into Chaos: "It's Madness. The Market Makes Major Moves For No Reason"

While that is indeed the quoted lament of a living, breathing market participant, it does not refer to what takes place in the stock or - increasingly more often - the bond or FX market. Instead, what Blake Alberts, cited by the WSJ, is furious about are the wild swings in the cattle futures market, which as a result of its recent unprecedented moves, has been dubbed "the meat casino" by traders.

In response, the WSJ writes, the world's largest futures exchange has refused to list new contracts, leaving ranchers with fewer tools to hedge the $10.9 billion market. The reason is one painfully familiar to traders across all other product segments: a lack of collateral, only in the case of physical cattle it is much worse. According to the CME Group trading of physical cattle has become so scant that the futures market can't get the signals it needs to set prices.

While we have long expected market-moving disconnects between a rapidly shrinking collateral base, and an exponentially growing universe of derivatives referencing this shrinking pool of underlying securities, we did not anticipate this would take place in this relatively quiet market.

According to the WSJ, the decision to delay new contract listings is the culmination of alarms raised by the exchange and industry groups this year that problems in the physical marketplace have affected futures—a highly unusual meltdown in a market that has attracted more speculators.

As the chart below shows, live-cattle futures climbed as high as $1.4155 a pound before free-falling to $1.1580 over seven weeks this spring. That represents a more than $10,000 drop in income for a single contract. Many producers have lost money as prices tumbled to a five-year low of $1.07525 a pound this summer.

Venezuela Confiscates Guns As Murder Rates Soar

Just to prove the US isn't the only place where governments seek to cure symptoms rather than diseases for political benefit, Venezuela's Interior Minister, Nestor Reverol, launched a campaign in Caracas to "disarm" citizens in an effort to curb rampant violence. Venezuela has the world's second highest murder rate which Reverol attributes, at least in part, to heavily armed gangs roaming the streets with guns that they apparently acquire from "corrupt" police officers. To address the violent crime issue, Venezueala has decided to chop up over 2,000 shotguns and pistols and laser tag ammunition as apparently the majority of ammunition used for violent crime in the country is manufactured by the state and "sold by corrupt police" as well. We're noticing a trend here. Per Reuters:

"We are going to bring disarmament and peace," Reverol told reporters, while police officers drilled and sawed at rusty shotguns, home made pistols and some newer weapons.

Other guns were crushed in truck-mounted presses. Some members of the public watched, although more danced to a nearby sound system playing salsa music.

Venezuela has also bought laser technology to mark ammunition, Reverol said, in an attempt to keep a registry of the bullets given out to the South American nation's many state and municipal police forces.

Experts say that much of the ammunition used in crimes in Venezuela is made at the country's government munitions factory and sold on by corrupt police.

Cisco: Life by a Thousand Cuts

Cisco wrapped its latest fiscal year by announcing another round of layoffs. But workforce size isn't the main challenge for the network equipment giant.

Yield Seekers Can Have it Both Ways With Banks

U.S. bank stocks offer safe dividend yields and attractive valuations.

As Markets Move Past Brexit, Central Banks Keep Hanging On

Despite market calm, Brexit remains a source of potential disruption. That means easier monetary policy, at least at the margins.

Market Snapshot: Stocks struggle to rise as oil re-enters bull-market territory

U.S. stocks on Thursday flip between small gains and losses as investors digest a Federal Reserve divided about the timing of an interest-rate hike and a batch of upbeat economic data.

The New York Post: Lochte, U.S. swimmers made up robbery to cover up gas station brawl, Brazilian officials say

Brazilian authorities have video of a brouhaha involving American swimmers Ryan Lochte, Jack Conger, Gunnar Bentz and Jimmy Feigen and a rent-a-cop, ABC News reported.

Victoria's Secret and American Eagle battle for the bralette business

Bralettes are the latest trend in lingerie, and both Victoria's Secret and American Eagle Outfitters are vying for the top spot.

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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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