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23Sep2016 Market Close: US Indexes Close Lower As Crude Prices Slip, Fed Lowers Economic Growth Prospects, Indicators Melting Into Bearish Territory

Written by Gary

Wall Street closed lower (SPY - 0.5%) as lower oil prices weighed on energy shares and tech giants Facebook and Apple declined. The NY Fed lowered its forecast on U.S. economic growth in the 3rd and 4th quarters from what it estimated a week earlier. Crude prices tumbled 4 percent, the US dollar and gold volatile.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Fed's internal split tied to dueling views on jobs outlook

SAN FRANCISCO (Reuters) - The split at the Federal Reserve over when to next raise interest rates appears to hinge largely on disagreements over the labor market outlook, comments from policymakers on Friday suggest.

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, signaling the start of what is likely to be a slow-rolling auction of the high-profile but money-losing social media company.

Wall Street falls as Apple, energy shares weigh

NEW YORK (Reuters) - Wall Street retreated on Friday as lower oil prices weighed on energy shares and Facebook and Apple declined, but major indexes still posted gains for the week.

Takata failed to report 2003 air bag rupture to NHTSA

WASHINGTON (Reuters) - Japanese air bag supplier Takata Corp said it failed to inform U.S. auto safety regulators of a 2003 rupture of one of its air bag inflators in Switzerland, according to an internal report released on Friday.

Hanjin says cargo owners withholding $80 million in payments

WILMINGTON, Del (Reuters) - Failed South Korean container carrier Hanjin Shipping Co Ltd told a U.S. judge on Friday that cargo owners were withholding up to $80 million in payments for completed shipments, complicating the company's ability to move stranded freight.

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.

IBM, China UnionPay complete block chain pilot project on bank loyalty points

NEW YORK (Reuters) - IBM said on Friday it completed a pilot project with Chinese credit card company China UnionPay that will facilitate the sharing of loyalty bonus points among banks using block chain technology.

Oil slumps 4 percent as no output deal expected for OPEC

NEW YORK (Reuters) - Oil prices tumbled 4 percent on Friday on signs Saudi Arabia and arch rival Iran were making little progress in achieving preliminary agreement ahead of talks by major crude exporters next week aimed at freezing production.

Caesars awaits creditor nod on sweetened deal for bankrupt unit

CHICAGO (Reuters) - Shares of Caesars Entertainment Corp slid on Friday, a day after hitting a 16-month high, as investors awaited a midnight deadline for creditors to accept a sweetened $5 billion deal that could finally extract the casino company from a costly bankruptcy.

Traveling Circus

Submitted by Paul Brodksy Of Macro Allocation.com

After Wednesday's policy statements by the Fed and Bank of Japan, a harsh light is being shined on the incredible nature of their communications. It would be wise in the current environment to structure investment portfolios with a pro-volatility bias.

Central banks in G7 economies have been carrying a heavy load for a very long time, especially noticeable to all since 2009. Zero and negative sovereign interest rates, asset purchase programs and whack-a-mole currency devaluations have avoided a counterfactual that would have included credit exhaustion, debt deflation and economic contraction.

Their now conventional unconventional monetary policies have been overlaid by communications policies that have fostered a narrative of economic normality and cyclicality. It all seems rather disingenuous given their successful coup de marché, and maybe a bit delusional too given their serious demeanors discussing Philips curve stuff in the face of balance sheet time bombs.

And now...central banks seem exhausted too, not only in terms of being able to stimulate consumption and levitate asset prices, but also in terms of their communications policies that suggest they can.

The BOJ may have jumped the shark when it embarked on a new program called "QQE with yield curve control" whereby it will pin 10 year JGB yields at 0%. The BOJ also signed on to a new program called "inflation overshooting commitment" whereby it will keep creating sufficient base money until CPI inflation exceeds 2%. Let there be no mistake: this is formalized QE Infinity.

It was a tacit admission that lowering funding rates further would have no stimula ...

Bloomberg: Let Corporations Manage Immigration

Via: The Daily Bell

Time to Privatize Immigration ... The West, it's obvious, faces a migration crisis. Across the aging, stagnating economies of the developed world, citizens are revolting against what many perceive as an uncontrolled influx of foreigners. The U.S. apart, most of these economies are also facing a prolonged crisis of growth. Under other circumstances, the solution would be obvious: restore vitality by taking in more creative and productive people from India, China and other parts of the developing world. But how to do so, given the fraught politics of immigration? -Bloomberg

Ted Cruz Endorses Donald Trump: "After Many Months Of Prayer I Have Decided I Will Vote For Donald Trump"

After endless animosity between Ted Cruz and Donald Trump, with the former calling the latter, among many other things, a "pathological liar", a "narcissist", "serial philanderer", "utterly amoral" and of course, a "sniveling coward", not to mention the infamous spat at the RNC where Cruz failed to openly endorse Trump (who two months ago said "I don't want his endorsement"), and even worse...

Donald Trump can't be trusted with common sense. Why would we trust him in the White House? #ChooseCruzhttps://t.co/Xf0sXbuwcH

— Ted Cruz (@tedcruz) April 22, 2016

... moments ago Cruz had another phrase with which to describe Trump: America's next president.

While it is unclear what really prompted Cruz to change his mind so drastically and engage in a move that many believes is career suicide no matter if Trump wins or loses, in a Facebook post released moments ago, Cruz said that "our country is in crisis. Hillary Clinton is manifestly unfit to be president, and her policies would harm millions of Americans. And Donald Trump is the only thing standing in her way. A year ago, I pledged to endorse the Republican nominee, and I am honoring that commitment. And if you don't want to see a Hillary Clinton presidency, I encourage you to vote for him"

The full endorsement is below:

Like Everything Else, History Repeats (Almost Exactly) Because Power Truly Corrupts

Submitted by Jeffrey Snider via Alhambra Investment Partners,

With both the Bank of Japan and Federal Reserve this week undertaking policy considerations at the same time, it is useful to highlight the similarities of conditions if not exactly in time. As I wrote this morning, what the Fed is attempting now is very nearly the same as what the Bank of Japan did ten years ago. In the middle of 2006, after more than six years of ZIRP and five years of several QE's, the Bank of Japan judged economic conditions sufficiently positive to begin the process of policy "exit" by first undertaking the rate "liftoff."

If you read through the policy statement from July 2006 it sounds as if it were written by American central bank officials in July 2016. Swap out the year and the country and you really wouldn't be able to tell the difference.

Japan's economy continues to expand moderately, with domestic and external demand and also the corporate and household sectors well in balance. The economy is likely to expand for a sustained period...The year-on-year rate of change in consumer prices is projected to continue to follow a positive trend.

With incoming data judged as meeting predetermined criteria (they were somewhat "data dependent", too), the Bank of Japan voted to raise their benchmark short-term rate but were careful, just like the Fed ...

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.

Ousted or not, Wells Fargo CEO John Stumpf will enjoy a comfortable retirement

Stumpf has earned at least $74 million in stock awards during his tenure.

Currencies: Pound slumps after Boris Johnson hints at Brexit timing

The pound resumes its slide on Friday, heading sharply lower after U.K. Foreign Secretary Boris Johnson said he expects his country will start formal Brexit negotiations early next year.

Capitol Report: Ted Cruz says he will vote for Donald Trump

Ted Cruz said Friday he'll vote for Donald Trump in November, in a major turnaround for the Texas senator who heatedly clashed with the real-estate mogul during the Republican presidential primary.

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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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