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05Oct2016 Market Close: US Markets Close Higher, Crude Prices Higher, US Dollar Still Fighting Its Resistance, Gold Recovered Fractionally, Investors Still Worried About Global Finances

Written by Gary

US markets closed moderately higher displacing some analysts belief the markets would backtrack for the next several sessions. Crude prices settled up about 2 percent, hitting their highest since June, after the fifth unexpected weekly drawdown in U.S. crude inventories.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Wall Street advances as energy, bank stocks rally

(Reuters) - Wall Street rose after two days of losses on Wednesday after strong economic data boosted financial stocks and a surge in oil prices helped the energy sector.

U.S. top court leans toward making insider trading prosecutions easier

WASHINGTON (Reuters) - U.S. Supreme Court justices hearing a closely watched insider trading case indicated on Wednesday they were likely to make it easier for prosecutors to pursue such charges against traders, but questioned where to draw the line.

U.S. services sector activity surges to 11-month high

WASHINGTON (Reuters) - U.S. services sector activity rebounded to an 11-month high in September, an encouraging sign for economic growth that may increase the prospect of a Federal Reserve interest rate hike this year.

Oil up two percent to June highs after another U.S. crude draw

NEW YORK (Reuters) - Oil prices settled up about 2 percent on Wednesday, hitting their highest since June, after the fifth unexpected weekly drawdown in U.S. crude inventories added to support on hopes that major producers will agree to cut output next month.

Southwest flight evacuated after replaced Note 7 catches fire: Verge

(Reuters) - A Southwest Airlines Co flight to Baltimore was evacuated on Wednesday after a replaced Samsung Electronics Co Ltd Note 7 device started emitting smoke while the plane was at the boarding gate, according to the Verge.

OPEC, non-OPEC producers plan informal meet in Istanbul to discuss Algiers deal: Algeria

ALGIERS (Reuters) - OPEC and non-OPEC oil producers plan an informal meeting in Istanbul Oct. 8-13 to discuss how to implement a production deal OPEC members reached in Algiers last month, Algerian Energy Minister Nouredine Bouterfa has told local Ennahar TV.

Berlin pursues discreet talks with U.S. officials on Deutsche Bank

BERLIN (Reuters) - The German government is pursuing discreet talks with U.S. authorities to help Deutsche Bank secure a swift settlement over the sale of toxic mortgage bonds, according to sources in Berlin.

Chicago latest to sanction Wells Fargo for defrauding customers

CHICAGO (Reuters) - The Chicago City Council on Wednesday approved a one-year suspension for Wells Fargo & Co from city business because of its scandal over phony accounts, joining the states of Illinois and California in punishing the bank.

Fed's Lacker says there are signs inflation is heating up

HUNTINGTON, WV (Reuters) - Inflation appears to be heating up in the United States, part of a strong case for the Federal Reserve to raise interest rates more quickly, Richmond Fed President Jeffrey Lacker said on Wednesday.

Six-Sigma Services-Sector Survey Surge Sparks Buying Panic In Stocks

ADP weakest in 4 years, Factory Orders 22nd straight month of annual declines, Services PMI employment at 2010 lows,...ISM Services (survey) biggest jump in history... priceless

The Biggest jump in ISM Services ever (a 6 sigma beat)...

Buy it! Just buy it, stupid!

VIX and S&P traded in a very narrow range... with a false breakout

But a late-day sellofff back to VWAP spoiled the party...

Pushing Dow, Small Caps back into the red along withg S&P on the week...

"It Cannot Be Allowed To Fail": Germany Pursuing "Discrete Talks" With The US Over Deutsche Bank

So much for last week's rumor of an imminent reduction in the DOJ $14 billion settlement, which sent the price of DB soaring, and propelled the global stock market higher.

Moments ago, Reuters reported that the German government is pursuing "discreet talks" with U.S. authorities to help Deutsche Bank secure a swift settlement over the sale of toxic mortgage bonds.

German officials have, until now, played down their role in the standoff, saying it is up to Deutsche to work out a deal with the DOJ, which is demanding $14 billion to settle RMBS misselling claims. But now it has been confirmed that Berlin government officials are hoping to "facilitate a quick deal that would buy Deutsche Bank time to regain its footing."

One senior government official told Reuters there was "contact at all levels" between German and American officials. Another source said Finance Minister Wolfgang Schaeuble was not planning to meet DOJ officials during a trip to Washington this week for International Monetary Fund meetings, but added: "You can hold talks. It doesn't have to be the minister."

Admitting also that, as has been widely known, Germany would not let DB sink, Reuters adds that "officials recognise that Germany's biggest bank, which employs around 100,000 people, cannot be allowed to fail."

However, there is a time constrain as the resolution of the crisis through a prompt - and reduced - settlement is crucial for Chancellor Angela Merkel, who faces a federal election next year. It could be "political poison" for her government to rescue a bank that got into trouble through speculating. Which is why Berlin has been hoping that the US will endorse a near-term settlement, somewhere well below the original $14 ...

President Obama To Explain How He Just Thwarted The World's Greatest Threat - Live Feed

The world will sleep better tonight as President Obama has achieved the impossible - thwarted the world's greatest threat. With today's ratification of The Paris Climate Accord - passing a threshold among European nations - the scourge of global warming has met its match.

As Reuters reports, a global agreement to combat climate change by shifting the world economy away from fossil fuels will take force next month after passing a threshold for ratification on Wednesday with support from European nations.

Support for the Paris Agreement has widened to nations representing 56.75 percent of world greenhouse gas emissions, above the 55 percent needed for implementation, a U.N. website showed. The deal will formally start in 30 days.

European Union countries including Germany, France and Slovakia, which have completed domestic ratification, helped trigger the formal entry into force after a green light from the European Parliament on Tuesday.

The agreement, reached in December 2015, already has support from other major emitters led by China, the United States and India. In total, 72 countries out of 195 have ratified the agreement, according to the U.N. website.

Obama needs a win for his legacy... and a distraction... So cue victory lap.

Live Feed (due to speak at 1530ET):

* * *

Mission Accomplished?

The IMF Sounds An Alarm As Global Debt Hits A Record $152 Trillion Or 225% Of World GDP

Another record for the history books.

In addition to reporting on the dangers facing global banks as a result of declining profits in the current low rate environment, today the IMF also released its latest Fiscal Monitor report which sounded a loud alarm when it revealed something disturbing: at 225 percent of world GDP, the global debt of the nonfinancial sector, comprising the general government, households, and nonfinancial firms, is currently at an all-time high of $152 trillion.

Add financial debt and you will need a far bigger chart.

With global nonfin debt/GDP growing from 200% in 2002 to 225% in 2015, it is obvious that debt growth has vastly outpaced the rate of economic growth as a result of the collapsing marginal value of every dollar of debt which result in increasingly less "bang for the growth buck."

As the IMF warns, "two-thirds, amounting to about $100 trillion, consists of liabilities of the private sector which, as documented in an extensive literature, can carry great risks when they reach excessive levels. However, there is considerable heterogeneity, as not all countries are in the same phase of the debt cycle, nor do they face the same risks. Nevertheless, there are concerns that the sheer ...

Shiller's Powerful Market Indicator Is Sending a False Signal About Stocks This Time

A close look at a Nobel Prize winner's valuation metric shows that the market isn't as highly valued as it appears.

Salesforce Should Leave This Bird in the Bush

The idea of buying Twitter has erased billions in Salesforce's market cap. That may be only the start.

Election Says Only So Much About Stocks

Election forecasts and politically focused investment portfolios are saying different things about who will become the next U.S. president.

How Apple could bring overseas cash home to help fix America's crumbling infrastructure

Standard & Poor's argues that a program that would allow companies bring back cash on a tax-free basis but invest 15% in infrastructure bonds would help the economy and create jobs.

Market Extra: Dow, S&P 500, bonds trade like a Fed rate hike isn't cause to stress out

Is the stock market getting comfortable with the prospect of a rate hike?

Key Words: European Parliament wants 18-year-olds riding the rails and exploring the continent

The European Parliament is open to the idea of giving every new 18-year-old a free train pass as a birthday gift.

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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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