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26Aug2016 Market Close: US Markets Close In The Red, US Dollar Remains Higher, Crude And Gold Back Down Where They Started Yesterday

Written by Gary

The US markets closed down, but just a notch below flat and uninteresting (SPY -0.16%). Should I mention that volume remains at low levels not see prior to 2005? Ms. Yellen has spoken and left the door open for an interest rate increase as early as next month. Short-term indicators have from neutral to fractionally bearish and we will have to wait until next week for better market direction.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Fed's Yellen says case for interest rate hike has strengthened

JACKSON HOLE, Wyo. (Reuters) - The case for a U.S. interest rate hike has strengthened in recent months, Federal Reserve Chair Janet Yellen said on Friday in a speech that left the door open for such a move as early as next month.

For the Fed's Yellen 'conventional' unconventional policy is enough

WASHINGTON (Reuters) - For all the talk of a radical shift in central banking policy, from the permanent use of negative rates to helicopter money drops, Federal Reserve Chair Janet Yellen appears to believe she can tackle any future downturn using the tools currently at her disposal.

Wall Street falls after Fischer, Yellen comments

NEW YORK (Reuters) - U.S. stocks were lower in a choppy session on Friday, with stocks bouncing between gains and losses as investors grappled with the possible timing of a U.S. interest rate hike after comments from Federal Reserve officials, including Chair Janet Yellen.

Judge in Redstone hearing urges attorneys to reach agreements

CANTON, Mass. (Reuters) - A Massachusetts judge on Friday told attorneys to see if they could agree to resolve at least parts of a lingering family dispute over the fate of the empire built by Sumner Redstone, the controlling shareholder of Viacom Inc .

St. Jude says report by short sellers 'false and misleading'

(Reuters) - Medical device manufacturer St. Jude Medical Inc said on Friday that a report by short-selling firm Muddy Waters and a cyber-security researcher alleging its heart devices were riddled with bugs was "false and misleading."

Exclusive: Sycamore Partners, liquidators bid on bankrupt U.S. teen retailer Aeropostale

NEW YORK (Reuters) - Bankrupt U.S. teen retailer Aeropostale Inc received bids this week for its business from private equity firm Sycamore Partners, as well as liquidators, firms that wind down businesses, according to people familiar with the matter.

Ackman approached to buy Herbalife shares owned by Icahn

(Reuters) - Herbalife Ltd's biggest critic, hedge fund manager Bill Ackman, said he had been approached to buy shares in the nutritional supplements maker from billionaire investor Carl Icahn.

Uber wins halt to N.Y. price-fixing lawsuit during appeal

NEW YORK (Reuters) - A federal judge on Friday granted a request by Uber Technologies Inc and its chief executive officer to put a passenger's price-fixing lawsuit against them on hold, while they appeal his refusal to let them arbitrate the dispute.

PwC reaches mid-trial deal in lawsuit by Taylor Bean trustee

(Reuters) - PricewaterhouseCoopers has settled a lawsuit accusing the auditing firm of failing to detect the fraud that brought down Taylor, Bean & Whitaker Mortgage Corp in 2009, a lawyer for the mortgage lender's bankruptcy trustee said on Friday.

Caption Contest: Virtually President

Sometimes 'life'... "wow, the economy looks great"

h/t @Stalingrad_Poor

Imitates 'art'...

Source: MichaelPRamirez

And, just this morning, White House propagandist Earnest exclaimed "Obama's economic optimism is widely shared." The problem is... that's total bullshit...

The professionals don't believe it...

And the broad American people don't believe it...

But as the green line above shows, there is one cohort that has not been as optimistic as this in 18 months.

The Reckoning Looms - Central Bankers Really Don't Know What They're Doing

Submitted by Michael Snider via Alhambra Investment Partners,

As I have written many, many times, the "unexpected" events of January and February were a dramatic wake-up call for central banks. Last August's global liquidation they could at least try to ignore because it could possibly fit within the paradigm of "transitory", a one-off aberration that was some mysterious Chinese viral contagion and thus of not any great, lingering importance. The recurrence in the first part of 2016, though, destroyed those assertions and a lot of people noticed; and you can bet the Fed noticed that a lot of people noticed.

What is happening this year is astounding. After saying year after year after year that the recovery is coming, and even doing so to the point of condescension, the admissions of wrongfulness are starting to roll in, if only softly at first. How ludicrous does "transitory" look now? Though that word remains attached to official policy statements, official policymakers themselves have begun to act otherwise.

There was the brief flirtation with NIRP even in the United States, though fortunately disabused by clear Japanese example of the utter harm such monetary "stimulus" actually offers. Of late, economists having floating the idea for raising the inflation target, but they have yet to offer an explanation as to why that might be needed (even before they try to argue why it might work in a way the current on ...

Bank of Japan Prepares for Crash Triggered by Fed Tightening

By Wolf Richter, WOLF STREET

No central bank of a developed country equals the Bank of Japan in trying to manipulate the stock market up by buying equities. The BOJ has done this for years. With breath-taking ineffectiveness.

So on July 28, the BOJ announced another stock market pump-up scheme: it would nearly double its annual purchases of equity ETFs from about ¥3.3 trillion to ¥6 trillion ($60 billion).

Hedge funds and other speculators expected for the BOJ to instantly throw its weight around in the stock market, and hopes were riding high that the Nikkei would surge, or at least rise in a visible manner. Alas, on Friday in Tokyo, the Nikkei dropped to 16,361, down a smidgen from where it had been on July 28.

The debacle was right in line with the BOJ's prior stock-market pump-up schemes. While it managed with its negative interest rate policy to totally kill off all money market funds in Japan, with the last 11 shuttering earlier this year, and while it managed with its gigantic purchases of Japanese Government Bonds to completely freeze up the JGB market, the BOJ has failed to accomplish much of anything in the stock market. The Nikkei stock index is down 21% from its recent peak in June last year, and is down 57% from its all-time peak in 1989.

But nearly doubling the ETF purchases should have done something. So why did the highly anticipated pump-up-scheme rally flop?

Now an answer is seeping to the surface. It seems the BOJ is worried about a stock market crash, triggered by Fed tightening, and has decided to keep its power dry to be able to put a floor under plunging stocks later this year.

According to the

Hillary Thinks "Mr. Brexit" Is Just Another "Right-wing, Xenophobic, Sexist, Bigot" That You Should Promptly Ignore

It seems that a speech made by Nigel Farage (or "Mr. Brexit" as the Trump campaign has named him) at a Trump rally a couple of days ago in Jackson, Mississippi may have struck a nerve with the Clinton camp.

If you haven't seen it...it's worth a view:

Well, Clinton was not amused by Mr. Brexit. As pointed out by Breitbart, Clinton took the opportunity at an event yesterday to seemingly suggest that Farage is just another "right-wing", xenophobic, sexist, bigot that you should all promptly ignore. Frankly, we're in awe of how succinctly Clinton is able to identify all of Farage's multiple character flaws...it really is masterful speech writing.

"Just yesterday, one of Britain's most prominent right-wing leaders, a man named Nigel Farage, who stoked anti-immigrant sentiments to win the referendum to have Britain leave the European Union, campaigned with Donald Trump in Mississippi."

"Farage has called for a ban on the children of legal immigrants from public schools and health services, has said women are quote "worth less" than men, and supports scrapping laws that prevent employers from discriminating based on race — that's who Trump wants by his side."

Lest we forget, Hillary pointed that, because his opinions differ from her own, Farage is necessarily just another one of Putin's "

Yellen Cries Wolf

Fed chairwoman tries to convince the market that a rate rise is coming but investors aren't listening.

Vivendi: Why Empire Building Is No Strategy

French media group Vivendi is benefiting from the growth of music streaming, but investments in struggling Italian companies are puzzling.

The Price of the Calm After the Storm

Markets are calm this August. Policy makers have ensured that, but distortions are rife.

The Fed: Fed's Fischer: Yellen's speech consistent with possibility of 2 interest-rate hikes this year

Fed Vice Chairman Stanley Fischer said Friday that Janet Yellen's speech was consistent with possible two hikes this year

The Fed: Fed's Mester says 'it makes sense' to start moving interest rates higher

Cleveland Fed President Loretta Mester said she wants gradual rate hikes but demurs when asked about the exact timing of the moves.

The Fed: Fed's forecast of gradual rate hikes is damaging its credibility and the economy, Bullard says

The Fed's own forecast of 200 basis points in rate hikes is damaging the economy and the central bank's credibility, said St. Louis Fed President James Bullard on Friday.

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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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