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23Sep2016 Market Update: US Markets Fall Further On KSA's No Deal Report, Crude Prices Slip 3 Percent, US Dollar And Gold Steady

Written by Gary

US markets remain lower (SPY _0.4%) after KSA does not see any deal on output agreement. Crude Prices Fall 3% after did not expect a decision at Algiers next week. Traders and investors were also awaiting a U.S. oil rig count report (+2) to ascertain if more drillers were returning to the well pad. Indicators fractionally bearish.


Here is the current market situation from CNN Money

North and South American markets are mixed today. The IPC is up 3.91% while the Bovespa gains 0.62%. The S&P 500 is off 0.42%.

What Is Moving the Markets

Here are the headlines moving the markets.

Oil slumps 3 percent on report Saudis do not see output deal

NEW YORK (Reuters) - Oil prices fell about 3 percent on Friday, paring weekly gains, on a report that Saudi Arabia did not expect an agreement at talks next week among major crude exporters aimed at freezing production.

Twitter begins discussions to explore a sale: source

(Reuters) - Twitter Inc has initiated talks with several technology companies to explore selling itself, a person familiar with the matter said on Friday, as the social media company grapples with its slowest revenue growth since going public in 2013.

Wall Street falls as investors assess valuations after rally

(Reuters) - Wall Street was lower in early afternoon trading on Friday as investors assess valuations after a three-day rally spurred by optimism that the Federal Reserve will hold off from raising interest rates in the near term.

N.Y. Fed lowers outlook on U.S. GDP growth for third and fourth quarters

NEW YORK (Reuters) - The New York Federal Reserve on Friday lowered its forecast on U.S. economic growth in the third quarter and fourth quarters from what it estimated a week earlier following weaker-than-expected housing starts data for August.

Saudis offer oil cut for OPEC deal if Iran freezes output: sources

DUBAI/LONDON (Reuters) - Saudi Arabia has offered to reduce oil production if rival Iran caps its own output this year, four sources familiar with the discussions told Reuters, as Riyadh tries to strike an elusive OPEC deal to curtail supply and boost prices.

Exclusive: Goldman Sachs cutting nearly 30 percent of Asia investment banking jobs - sources

LONDON (Reuters) - Goldman Sachs is cutting almost 30 percent of its 300 investment banking jobs in Asia outside Japan in response to a slowdown in activity in the region, two sources familiar with the matter told Reuters.

Exclusive: Japan's antitrust watchdog considers action against Apple, carriers - sources

TOKYO (Reuters) - Japanese regulators are considering taking action against Apple Inc over possible antitrust violations that may have helped it dominate the nation's smartphone sales, government sources said, a move that could hit the company's profit margins in one of its most profitable markets.

Federal Reserve proposes new limits on Wall Street energy bets

WASHINGTON (Reuters) - The Federal Reserve on Friday outlined a plan to limit Wall Street bets on the energy sector by forcing enterprises like Goldman Sachs and Morgan Stanley to hold more capital against such investments.

U.S. lawmakers have 'grave concern' over Boeing, Airbus Iran licenses

WASHINGTON (Reuters) - Senior Republican U.S. House of Representatives lawmakers made clear on Friday they will keep campaigning against Boeing and Airbus jetliner sales to Iran, despite the Treasury Department's announcement that it had begun issuing licenses for the exports.

Jackie, Timmy, and Bill

Yesterday, I was intrigued to see on how Bill Fleckenstein called Tim Seymour "a jerk" on the air, since Tim was needling Bill about missing out on the Fed-created stock market rally.

0923-jerk

I was immediately reminded of what happened just over two years ago, on the exact same network, with Bill and - - this time - - Jackie D. I did a snarky post abou ...

NY Fed Slashes GDP Forecast, Now Sees Weakest Growth Since Financial Crisis

Just in case the Fed needed an "out" to its "hawkishly holdish" December rate hike, it got it moments ago when the NY Fed slashed its Q3 and Q4 GDP estimates, and now expects just 2.3% annualized growth in Q3 and 1.2% Q4, down 0.5% each from the previous forecasts of 2.8% and 1.7%.

In its latest report, the NY Fed explained that "negative news since the report was last published two weeks ago pushed the Nowcast down 0.5 percentage point for both Q3 and Q4. The largest negative contributions over the last two weeks came from manufacturing, retail sales, and housing and construction data." So, pretty much everything.

As usual, the forecast was overly optimistic, and as a result has been sharply dragged down for both Q3...

.... and Q4.

But what is most troubling is not that in the quarter in which the Fed is expected to hike rates for only the second time since the financial crisis, the US economy is now expected to grow only 1.2%, but that when taking into account the already abysmal Q1 and Q2 GDP prints of 0.8% and 1.1%,, US GDP - according to the NY Fed - is set to grow a paltry 1.4% for the entire year. This would be the lowest growth rate since the financial crisis.

Hillary Emailgate: How One Twitter User Proved The "Intent" That The FBI Missed After Months "Investigating"

Earlier this week, a twitter user named "Katica" seemingly proved the "intent" of the Hillary campaign to destroy and/or tamper with federal records by revealing the Reddit thread of Paul Combetta (aka the "Oh Shit" guy; aka "stonetear"). But what's most crazy about this story is that "Katica" was able to discover the greatest "bombshell" of the entire Hillary email scandal with just a couple of internet searches while the FBI, with unlimited access to government records, spent months "investigating" this case and missed it all. The only question now is whether the FBI "missed" this evidence because of gross incompetence or because of other motivating factors?

Now, courtesy of an opinion piece posted on The Daily Caller, we know exactly how "Katica" pieced her "bombshell" discovery together...the folks at the FBI may want to take some notes.

Per the twitter discussion below with @RepStevenSmith, "Katica" discovered Combetta's Reddit thread on September 16th. But while she suspected that Paul Combetta and the Reddit user known as "stonetear" were, in fact, the same person, she had to prove it...

Katica

...which she was able to do easily enough with a couple of extra searches. First there is this FaceBook pic which refers to Combetta ...

Oil Tumbles To $44 Handle After Saudis Confirm "No Decision" Next Week, Fed Crackdown On Bank Commodity Holdings

We hinted earlier and now Saudi Arabia has confirmed that it "doesn't expect any decision" next week when oil producers meet in Algiers. Oil's reaction was swift with WTI tumbling to a $44 handle very quickly:



SAUDI ARABIA SAID TO SEE ALGIERS MEETING AS CONSULTATION

SAUDI ARABIA DOESN'T EXPECT DECISION AT ALGIERS: DELEGATE

This move was exaggerated by the report that The Fed is clamping down on bank holdings of commodities:



FED PROPOSES AGGRESSIVE RULE ON WALL STREET COMMODITY HOLDINGS

As we detailed previously...

1) the ban on 'investing in non-financial companies', which is highly ironic given that other central banks are directly buying massive stakes in the world's corporate entities; and

2) restrictions on physical ownership of commodities, which raises eyebrows on both oil manipulation and the hoarding of precious metals ahead of The Fed losing control.

But The Fed expanded it today:

The Federal Reserve Board on Friday invited public comment on a proposed rule that would strengthen existing requirements and limitations on the physical commodity activities of financial holding companies. The proposal would help reduce the catastrophic, legal, reputational, and financial risks that physical commodity activities pose to financial holding companies.

A limited number of firms supervised by the Board engage in physical commodity activities and investments. Some firms are permitted by law to engage in a broad range of physi ...

Seconds Matter a Lot for Facebook Valuation

Facebook's overstatement of one video viewing metric could undermine the highly optimistic assumptions underlying its valuation.

Don't Fade the Fed

Investors are skeptical about whether the Federal Reserve will raise rates at all this year. There is reason enough for that, but it is also dangerous.

Why Sheds Are the New Shops---For Now

E-commerce has made distribution warehouses hot property, but investors shouldn't forget the usual real-estate risks.

It's strike three for Warren Buffett as Wells Fargo faces investigation

Two other incidents lead to questions about the billionaire investor's wholesome reputation, writes Jonathan Rochford.

Market Extra: Buy bonds, buy stocks, sell risk, blame the Fed

It happened—again. Stocks rally to records and government bond prices jump, pushing yields toward the lows.

Futures Movers: Losses for oil intensify as Saudis play down chances of an output deal

Losses for oil intensify as jawboning ahead of next week's oil-producer meeting continues.

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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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