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29Sep2016 Market Close: Wall Street Bracing For Major Turn Down If German Bank Fails, Crude Prices Rise Towards 50 Handle And US Dollar Showing New Strength

Written by Gary

US markets closed lower (SPY - 0.9%), investors concerned that Wall Street is getting ready for the 'Big Fall'. Crude Remains Higher Along With US Dollar. Indicators bearish, maybe very bearish.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

U.S. economy less sluggish in second quarter; companies investing more

WASHINGTON (Reuters) - U.S. economic growth was less sluggish than previously thought in the second quarter as exports grew more than imports and businesses raised their investments, hopeful signs for the economic outlook.

Wall Street dragged lower by Apple and banks

(Reuters) - Wall Street dropped on Thursday, weighed down by Apple as well as selling in Wells Fargo, Citigroup and other major banks as investors worried about the health of Deutsche Bank.

If elected, Clinton under pressure to appoint tough Wall Street sheriffs

WASHINGTON (Reuters) - Democratic Party progressives intent on reining in Wall Street are pushing Hillary Clinton to choose people to head the Treasury, SEC and other agencies who will crack down on big banks if she wins the White House on Nov. 8.

Relief arrives for U.S. shale firms as OPEC folds in price battle

HOUSTON (Reuters) - It was a moment U.S. shale oil producers have been waiting on for more than two years: OPEC nations finally agreed to cut production on Wednesday in a move that lifted low prices ravaging their budgets.

U.S. House panel lambasts Wells Fargo boss over phantom accounts

WASHINGTON/NEW YORK (Reuters) - U.S. lawmakers called for Wells Fargo & Co chief John Stumpf to resign on Thursday and a top House Democrat demanded the bank be broken because it is too big to manage.

Dunkin' partners with Coca-Cola on bottled coffee

(Reuters) - Dunkin' Brands Group Inc said on Thursday its doughnut chain will partner with Coca-Cola Co to launch a line of bottled coffee beverages in the United States, its first foray into the ready-to-drink coffee market dominated by rival Starbucks Corp .

Fed's Lockhart wants to see more improvement before hiking U.S. rates

ORLANDO, Fla. (Reuters) - A top U.S. Federal Reserve official said on Thursday he supported the U.S. central bank's decision to leave interest rates unchanged at its policy meeting earlier this month until there was more evidence the economy is approaching the Fed's goal of full employment and 2 percent inflation.

U.S. reaches $4 million settlement with Wells Fargo over car repossession

WASHINGTON (Reuters) - Wells Fargo Bank, a unit of Wells Fargo & Co , has agreed to pay more than $4.1 million to resolve allegations it illegally repossessed cars owned by members of the U.S. military, the Justice Department said on Thursday.

Boeing nears wide-body jet sale to Qatar Airways: Bloomberg

(Reuters) - Qatar Airways is in late-stage talks to buy at least 30 Boeing Co wide-body jets, valued at more than $6.7 billion at list prices, Bloomberg reported, citing people familiar with the matter.

BofA Stunned By Record VIX Roundtrip; Fears "Fragile Market"

In recent months, BofA notes that the speed of mean reversion in the VIX has been particularly striking by historical standards. Since the end of QE3, VIX spikes have had very little persistence, generating low cumulative volatility relative to the previous 25 years, underscoring BofA's thesis of a fragile market that features rapid jumps from states of calm to states of stress and back.

As BofA details, markets are hyper-sensitive today to central bank action / rhetoric, with the beta of global equity, commodity, fixed income, FX, and corporate credit markets to 10yr US Treasuries near 26+ year highs.

Hence it is perhaps not surprising that as 10yr Treasury yields fell swiftly following last week's FOMC decision to not raise rates, the S&P 500 rallied back to 2180 (~35bps away from its pre-selloff high) and the VIX dropped under 12 (to within 0.1 vol points of its pre-spike low).

However, the speed of mean reversion in the VIX has been particularly striking by historical standards. Chart 7 (above) plots the relationship between the magnitude of a VIX spike and the total amount of volatility subsequently generated before the VIX retraces back to near pre-spike levels. It shows that since Oct-14, VIX spikes have had very little persistence, generating low cumulative volatility relative to how comparably sized spikes evolved from Jan-90 to Oct-14. Moreover, the recent shock was particularly fleeting, recording the smallest total amount of volatility (i.e., lowest y-axis reading).

You Want To Fix The Economy? Then First Fix Healthcare

Submitted by Charles Hugh-Smith via OfTwoMinds blog,

We don't just deserve an affordable, sustainable healthcare system - we're doomed to bankruptcy without one.

What is blindingly obvious to employers but apparently invisible to the average zero-business-experience mainstream pundit is this: if you want to fix the economy, you must first fix healthcare. If you want to pinpoint a primary reason why U.S. enterprises shift jobs overseas, you have to start with skyrocketing healthcare costs.

According to a report by the St. Louis Federal Reserve, real (adjusted for official inflation) wages have risen a mere 3% since 1970. (No wonder wage earners don't feel wealthier; if we use a more realistic measure of inflation, we haven't gained 3%--we've lost ground.)

But if we look at total compensation costs paid by the employer (health insurance, workers' compensation, employer's share of Social Security, etc.) we find that these costs have soared 60%. In other words, if these labor overhead costs had remained stable (i.e. gone up only as much as inflation), employers could have distributed raises of 60%.

These labor overhead costs are the reason why wages have been stagnant for 46 years, and the dominant overhead expense is healthcare insurance. Why has healthcare soared from 6% of GDP to 18% in four decades?

One reason is we have the worst of all possible worlds: we have a healthcare (what I call sickcare, because sickness is profitable but health is not) system in which for-profit corporations--cartels with immense politica ...

Investors Often Sell First and Ask Questions Later (Video)

By EconMatters

This European Bank Solvency issue has been festering in the background for awhile, is this just a little positioning into quarter end, or does it spill into the start of earning`s period next week is this big question for investors. Things could get worse overnight at the European Market open if rumors start spreading.

EconMatters All Rights Reserved | Facebook | Twitter | YouTube |

How to Play the Viacom-CBS Sibling Rivalry

For Viacom and CBS, a no-premium deal may be the most likely outcome.

Why Markets Are Riding Such a Long and Narrow Path

There been much talk about policies that might wake up markets, such as helicopter money, fiscal stimulus, or structural reforms. But little or no action.

Wells Fargo Illustrates Case for Splitting Board From Management

The fracas over Wells Fargo is resurrecting an old debate over whether bank chiefs should also serve as board chairmen.

Tim Burton's peculiar new film expected to lead weekend box office

"Miss Peregrine's Home for Peculiar Children," opening in 3,520 theaters this weekend, marks the quirky director's first big-budget film since "Dark Shadows" in 2012.

The Tell: Trump's 'ugly' claim about stocks is backed by Morgan Stanley economist

"We are in a big fat ugly bubble and we better be careful," declared Republican presidential nominee Donald Trump at the first of three debates with Democratic rival Hillary Clinton on Monday.

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