US markets opened higher before the disappointing ISM report at 10 am and now are moderately in the green (SPY +0.1%). The ISM said its non-manufacturing purchasing manager's index fell to 51.4 from 55.5. Analysts had expected the index to drop to 55.0. The potential for the Fed's to raise rates fell to 47%, compared to 56% before the ISM data arrived.
Here is the current market situation from CNN Money
North and South American markets are mixed today. The Bovespa is up 0.16% while the S&P 500 gains 0.13%. The IPC is off 0.68%.
$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)
FRANKFURT/NEW YORK (Reuters) - German pharmaceutical and crop chemicals manufacturer Bayer AG says talks with Monsanto Co have advanced and it is now willing to offer more than $65 billion, a 2 percent increase on its previous offer for the world's largest seeds company.
BRUSSELS (Reuters) - European Union countries should better coordinate tax rules to avoid hitting corporations too hard, the Slovak presidency of the European Union proposed, in an effort to provide more balance to an EU campaign against tax avoidance by multinational companies.
PARIS (Reuters) - Renault expects diesel engines to disappear from most of its European cars, company sources told Reuters, after the French automaker reviewed the costs of meeting tighter emissions standards following the Volkswagen scandal.
FRANKFURT (Reuters) - Volkswagen has agreed a wide-ranging technology and purchasing deal with U.S. truck maker Navistar in exchange for a 16.6 percent stake, an alliance forged in part by the need to meet stringent emissions regulations.
COPENHAGEN (Reuters) - LEGO A/S reported a decline in revenue growth and profits for the first half of 2016, but only because the Danish toymaker needed time to add production capacity to meet increased demand for its colorful building bricks in North America, the company said on Tuesday.
Silver is up almost 8% from last week's lows, surging back towards $20 and above its 50-day average ($19.70). Gold is also rising but we note that the post-Fed-Minutes outperformance of gold over silver (as both fell) has been erased...
Silver has outperformed Gold (back under 68x) in the last 2 weeks, erasing the shift after the Fed Minutes...
WTI crude has dropped back to a $43 handle this morning - erasing the Saudi-Russia statement hype ramp - after China inventories and disappointing 'freeze' talk but for now the plunge has stalled as Saudi Arabia is set to review thousands of contracts aiming to cancel up to $20 billion of projects. This suggests hope for higher oil prices (improved revenues) are fading.
Crude resumed its fall
As Bloomberg reports, Saudi Arabia is intensifying efforts to shrink the highest budget deficit among the world's biggest 20 economies, aiming to cancel more than $20 billion of projects and slash ministry budgets by a quarter, people familiar with the matter said.
The government is reviewing thousands of projects valued at about 260 billion riyals ($69 billion) and may cancel a third of them, three people said, asking not to be identified as the discussions are private. The measures would impact the budget for several years, two of the people said.
A separate plan includes merging some government ministries and eliminating others, two people said, also speaking on condition of anonymity.
The world's biggest oil exporter has taken unprecedented steps to rein in a budget shortfall that ballooned to 16 percent of gross domestic product last year, curtailing fuel and utility subsidies as well as cutting billions of dollars in spending. The International Monetary Fund expects the shortfall to drop to below 10 percent of GDP in 2017.
Submitted by John Mauldin via MauldinEconomics.com,
The NYSE and NASDAQ stock markets have been on a historic bull run since 2009. The NYSE has bounced back to just under 11,000 from a low of 4,716 during the Financial Crisis. The other major indices have put in similar performances.
There was a 10% or so correction early this year, but US stock markets rebounded strongly.
It's rare for stocks not to see a major market correction in more than eight years. Many analysts also argue that macroeconomic fundamentals aren't strong enough to support stock valuations... even if the US is performing better than Europe and other global economies.
The stock markets, though, have ignored these analysts and have moved up steadily.
Nothing lasts forever. It seems more and more likely that stock markets will begin a correction phase soon. The presidential election is coming up. Historically, this event has been a catalyst for major market moves.
With a bear bias in mind, let's look at five worries about US stock markets.
US stock indices are approaching all-time highs
With the Dow topping 18,500, the S&P 500 pushing close to 2200, and the NASDAQ breaking through 5200, US stock markets keep flirting with all-time highs. Some technicians might argue this is a good sign, as the markets are basing for an upside breakout.
The Conference Board's Employment Trends Index - which forecasts employment for the next 6 months declined and its authors state "with the ongoing massive retirement of baby boomers, even moderate job growth is enough to continue to tighten the US labor market"
The ISM non-manufacturing (aka ISM Services) index continues its growth cycle, but declined from 55.5 to 51.4 (above 50 signals expansion). Important internals declined but remain in expansion. Markit PMI Services Index also declined but remains in expansion..
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