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22Sep2016 Market Update: Wall Street Marched Higher Today, Investors Pleased With Fed's No To Higher Interest Rates, Single Family Homes Fell 0.9%, Unemployment Unexpectedly Fell

Written by Gary

US markets are up (SPY + 0.7%), Crude and gold prices are up and the US dollar is down, with the Nasdaq hitting a record intraday high, as investors cheered the Federal Reserve's decision to not raise interest rates. Short-term indicators are bullish.


Here is the current market situation from CNN Money

North and South American markets are broadly higher today with shares in Mexico leading the region. The IPC is up 1.37% while Brazil's Bovespa is up 0.83% and U.S.'s S&P 500 is up 0.70%.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 65%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 59%
Investors Intelligence sets the breath Above 50 bullish 63%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold.

+12.48

StockChart.com NYSE % of stocks above 200 DMA Index ($OEXA200R) $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 $OEXA200R rises above 65%
Secondary Bullish Indicators:
a) RSI is POSITIVE (above 50)
b) Slow STO is POSITIVE (black line above red line)
c) MACD is POSITIVE (black line above red line)
81%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 67%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 71%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value

16.22

StockChart.com Consumer Discretionary ETF (XLY) As long as the consumer discretionary holds above [66.88], all things being equal, it is a good sign for stocks and the U.S. economy 80
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors

10,800

What Is Moving the Markets

Here are the headlines moving the markets.

Wall Street extends rally after Fed rate decision

(Reuters) - U.S. stocks marched higher on Thursday, with the Nasdaq hitting a record intraday high, as investors cheered the Federal Reserve's decision to not raise interest rates.

U.S. job market firming; tight inventories constraining housing

WASHINGTON (Reuters) - The number of Americans filing for unemployment benefits unexpectedly fell last week to a two-month low, pointing to labor market strength that could pave the way for the Federal Reserve to raise interest rates by December.

Fed keeps rates steady, signals one hike by end of year

WASHINGTON (Reuters) - The U.S. Federal Reserve left interest rates unchanged on Wednesday but strongly signaled it could still tighten monetary policy by the end of this year as the labor market improved further.

Yahoo to provide details on massive data breach: Recode

(Reuters) - Yahoo Inc this week will disclose a data breach that compromised the details of several hundred million users, technology news site Recode reported on Thursday, citing unnamed sources familiar with the company's plan.

OPEC in new push to clinch first deal to curb output since 2008

DUBAI/LONDON (Reuters) - As far as OPEC decision-making is concerned, Algeria, which plays host to oil ministers next week, has always been the land of surprises.

Tesla sues Michigan officials over state bar on sales

WASHINGTON (Reuters) - Tesla Motors Inc Thursday sued Michigan Governor Rick Snyder and other state officials in federal court over the state's refusal to allow the Palo Alto, California automaker to sell vehicles directly to consumers.

WTO says EU failed to rein in Airbus subsidies

GENEVA (Reuters) - The World Trade Organization said on Thursday the European Union had failed to rein in billions of dollars in subsidies to planemaker Airbus , prompting Washington to call for an immediate halt to support to unwind damage to U.S. jobs.

Reduce 'huge sums' paid to VW bosses, says activist investor TCI

LONDON (Reuters) - Volkswagen should reduce the "huge sums of money" paid to executives and any bonuses should be given in shares, activist investor TCI Fund Management said in a letter to the car company seen by Reuters.

Europe's shadow bank sector needs closer scrutiny: Draghi

FRANKFURT (Reuters) - Financial services are shifting away from banks in the euro zone to the so-called 'shadow banking' sector, requiring fresh rules across a range of areas to mitigate risk, European Central Bank President Mario Draghi said on Thursday.

Trump Sides with "Lyin Ted" - Blasts Obama's Internet Transition Plan

Donald Trump and Ted Cruz, after a brutal Republican primary season with a whole lot of name calling and allegations, may have finally found some common ground. According to The Hill, Trump is now siding with Cruz and other House Republicans in speaking out about the Obama administration's plan to relinquish the Department of Commerce's oversight of the Internet Corporation for Assigned Names and Numbers (ICANN).

"Donald J. Trump is committed to preserving internet freedom for the American people and citizens all over the world," Trump campaign senior policy director Stephen Miller said in a statement.

"The Republicans in Congress are admirably leading a fight to save the internet this week, and need all the help the American people can give them to be successful," he added. "Congress needs to act, or internet freedom will be lost for good, since there will be no way to make it great again once it is lost."

For those not familiar with the particulars, Conservative lawmakers in Congress are leading an effort to block the Obama administration's "internet transition" plans by inserting language into a funding measure that would result in another government shutdown if not passed by September 30th.

ICANN stands for the Internet Corporation for Assigned Names and Numbers. ICANN is a California nonprofit that has supervised website domains since 1998, essentially under subcontract from the Commerce Department. Under the Obama transition plan, in October, oversight by the U.S. Commerce Department would end and be replaced by a multi-stakeholder community, which would include the technical community, businesses, civil society and governm ...

In Dramatic Twist, Wells Fargo Said To Retaliate, Fire Whistleblowers Who Exposed Bank's Illegal Practices

While the recent congressional hearing targeting John Stumpf, in which Elizabeth Warren suggested he should resign and be criminally charged, was nothing more than a "kangaroo court" meant to refocus public anger on banks, with good reason, the reason why we concluded that nothing would actually change is that ultimately there was no evidence the bank's executive management was aware of the bank's illegal, fraudulent tactics involving the creation of some 2 million fake customer accounts to "sandbag" retail banking fees. That assumption, however, may need revision now that CNN reports that it has heard from former Wells Fargo workers - some of whom were named - around the country, who tried to put a stop to the bank's illegal tactics only to be met with harsh, prompt and severe retaliation by the bank.

"Almost half a dozen workers who spoke with us say they paid dearly for trying to do the right thing: they were fired", CNN says, which if confirmed would promptly make this a criminal case, which implicate virtually every senior management member, as such retaliatory practices would suggest not only awareness of what was happening at the bank, but also an even more dramatic response by management seeking to keep these practices under wraps.

Some of the named witnesses made it very clear that the narrative spun by Stumpf in Senate was a lie:

"I endured harsh bullying ... defamation of character, and eventually being pinned for something I didn't do," said Heather Brock, who was fired earlier this month as a senior business banker at a Wells Fargo branch in Round Rock, Texas.

"They ruined my life," Bill Bado, a former Wells Fargo banker in ...

Just Plain Pathetic

Submitted by David Stockman via Contra Corner blog,

We are speaking, of course, of the Fed's decision to punt yet again, and for a reason that is not mysterious at all. To wit, our financial rulers are petrified of a stock market hissy fit, and will go to any length of dissimulation and double-talk to avoid triggering a crash of the very bubbles their policies have inflated.

So now the money market rate will be pinned to the zero bound for 96 months running—-through at least December. Indeed, hell itself could freeze over before these cowardly fools would raise rates at their next meeting a week before the elections—-and most especially not when the Donald is remonstrating loudly and correctly that the whole thing is rigged.

Not that any more evidence was needed, but today's decision surely proves that our financial rulers have wandered so deep into their monetary puzzle palace that they have now lost touch with every vestige of the real world. That's because there is not a shred of evidence that more free money for the Wall Street gamblers will do anything except further inflate financial asset values that are already tottering in the nosebleed section of history.

So the entirety of what they are doing is simply paving the way for an even bigger crash. Yet to hear Janet Yellen tell it, they decided to keep their Big Fat Thumb on money market rates because "there is still slack coming out of the labor market" and because the Fed is still "undershooting our inflation goals".

But so what!

There is not a single thing the Fed can do about either of these macro ...

An Analysis of Deutsche Bank's Likely Recapitalization - German Tax Payer Bailout or German Bank Depositor Bail-in?

Deutsche Bank is going to need some money, and it's going to need some quite soon. The next two or three articles that I write will focus on why there is such a need. In a concerted effort to reduce or potentially eliminated the risk of taxpayer-funded bail-outs of European banks, the EU implemented a new "bail-in" regime beginning on January 1, 2016. As such, rules which require banks and certain systemically significant market participants in EU member states will have to write-down, cancel, convert into equity or otherwise modify certain unsecured liabilities if such steps are required to recapitalize the institution. What is the most bountiful unsecured liabilities of a bank?

Screenshot 20160922-081728-picsay


More than 50% of the total derivative contracts are going to be matured within 1 year and more than 80% within 5 years. So, in the current sluggish economic environment it is quite possible that Deutsche Bank will experience some losses in their derivative exposure as most of their counterparties having higher degree of exposure are in Europe and The USA. And this will impact the financial conditions of their counterparties also.

Investors Stuck Between Two Central Banks

The Federal Reserve will tighten as the Bank of Japan loosens, potentially disrupting markets.

A Market-Timing Strategy That Just Might Work

Two professors developed a hypothetical trading strategy around earnings announcements that, with hindsight, has a formidable track record.

Samsung's Fires Unlikely to Warm Apple

Samsung's Galaxy Note recall is unlikely to heat up sales for Apple's latest iPhone.

Rex Nutting: Immigration, not a wall, makes America great

Immigrants are good for our economy, but try telling that to native-born high-school dropouts, writes Rex Nutting.

Capitol Report: It doesn't take long for Hillary Clinton to 'regret' this 'Between Two Ferns' interview

Hillary Clinton, in an interview posted on Thursday, was relentlessly grilled about her decision-making, her bout with pneumonia, the email scandal and her flip-flop on the Trans-Pacific Partnership.

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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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