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11Oct2016 Market Update: US Markets In Trouble As Total NYSE Margin Debt Is Just Below All Time High, WTI Crude Slips Into 50 Handle, US Dollar Climbs Higher

Written by Gary

Wall Street is down sharply (SPY -1.4%) after Alcoa's revenue misses expectations third quarter profit. Red volume is picking up as we enter the afternoon session. Analysts are talking about a serious market correction in the making. Indicators very bearish.


Here is the current market situation from CNN Money

What Is Moving the Markets

Here are the headlines moving the markets.

Wall Street drops as earnings season begins on dour note

(Reuters) - U.S. stocks tumbled on Tuesday, with the S&P 500 and the Nasdaq on track for their worst day in one month, after Alcoa kicked off the earnings season on a dour note.

Samsung scraps Galaxy Note 7 over fire concerns

SEOUL (Reuters) - Samsung Electronics Co Ltd scrapped its flagship Galaxy Note 7 smartphone on Tuesday less than two months after its launch, dealing a huge blow to its reputation and outlook after failing to resolve safety concerns.

Exclusive: Russia's Rosneft boss Sechin says no to OPEC oil cap

ISTANBUL (Reuters) - Igor Sechin, Russia's most influential oil executive and the head of state-controlled energy giant Rosneft, said his company will not cap oil production as part of a possible agreement with OPEC.

Oil down 2 percent on mixed Russian response to OPEC

NEW YORK (Reuters) - Oil fell almost 2 percent on Tuesday, retreating from one-year highs, after mixed responses by Russian oil industry officials toward an OPEC call for all major crude producers to cut output.

OPEC chief says freeze deal likely to last six months, then be reviewed

ISTANBUL (Reuters) - OPEC Secretary General Mohammed Barkindo said on Tuesday that any deal to freeze oil production was likely to last an initial six months and then be reviewed.

U.S. inflation expectations retreat in September: NY Fed survey

NEW YORK (Reuters) - Two measures of U.S. inflation expectations fell in September, with one hitting a low water mark, according to a Federal Reserve Bank of New York survey that also found Americans predicted less earnings growth in the year ahead.

Activists arrested after shutting five Canada-U.S. oil pipelines

CALGARY, Alberta (Reuters) - Climate-change activists were arrested on Tuesday after they shut down five pipelines carrying crude from Canadian oils sands into the U.S. market, the latest move by environmental groups to disrupt movement of oil across North America, an activist group said.

LVMH says no way will do business with Amazon

(Reuters) - Luxury goods group LVMH said there was "no way" it would do business with Amazon even though the Internet retailer was keen to take on more high-end brands.

U.S. top court grapples with Apple-Samsung iPhone patent feud

WASHINGTON (Reuters) - The U.S. Supreme Court on Tuesday signaled a willingness to reduce the potentially huge penalties imposed for ripping off a patented design as it heard arguments in the legal fight over the amount Samsung should pay Apple for copying the iPhone's distinctive appearance.

Barclays Warns The Party Is Almost Over As Payouts Exceed Cash Flow By $115 Billion

Over the past several years, there have been two primary sources of upside for the stock market: trillions in corporate buybacks, as companies themselves engaged in record repurchases of their own stock, often at price indiscriminate levels in a bid to not only raise the stock price but also the stock-linked compensation of management , and a similar amount of dividend payments which in a time of negligible yields, became one of the main drivers for buyers to scramble into the "safety" of dividend paying stocks. Collectively these account for an unprecedented amount of payouts to shareholders.

Today, Barclays' head of equity strategy Jonathan Glionna quantifies just how much corporate cash flow has and will be used to fund these payouts.

Glionna finds that in aggregate the companies within the S&P 500 are returning a record amount of cash to shareholders through dividends and buybacks. Since 2009 dividends have increased by more than 100%, reaching $98 billion in the most recent quarter. Meanwhile, gross buybacks have tripled and Barclays forecasts that they will reach $600 billion in 2016. In fact, buybacks plus dividends could surpass $1 trillion in 2016, for the first time ever.

Just like Goldman Sachs, Glionna says that "we believe the substantial increase in distributions is one of the primary justifications for the gains in the price of the S&P 500 during this business cycle (Figure 1).

However, this unprecedented surge in distributions may be coming to an end and as Barclays puts it, "alas, nothing continues forever. The growth rate of payouts, which has averaged 20% since 2009, will all but disappear in 2 ...

Cable Is Crashing... Again

"Pounded"...

Cable has retraced back down over 60% of its flash crash collapse...

"The sentiment on sterling is closely tied to expectations of hard Brexit," said Georgette Boele, a currency and commodity strategist at ABN Amro in Amsterdam.

BOE officials' "comments are not helpful at all. Saunders said that he was concerned about volatility in sterling as it pushed up inflation. Despite this, we think that the BOE is more focused on growth than on inflation at this point in time."

US Retailers Blame "Election Preoccupation" For Slumping Sales

While record food-stamps, sinking real wages, and soaring healthcare and shelter costs are all in the realm of peddled fiction; US Retailers are never shy of alternative excuses for their underperformance. It's too-hot, it's too-cold; it's too-low gas prices; it's too-high gas prices; but now, as Bloomberg reports, US retailers and restaurants are floating another excuse to explain their lackluster performance - it's the election, stupid!

To hear retail executives tell it, the battle for the presidency between Republican Donald Trump and Democrat Hillary Clinton is causing Americans to put off buying everything from romance novels at Barnes & Noble and jeans from the Gap to burritos at Yum! Brand Inc.'s Taco Bell. They might even be delaying wedding engagements, not good news for companies like Signet Jewelers Ltd.

"The preoccupation with this election is keeping them at home, glued to their TVs and at their desktops," said Len Riggio, the founder and chief executive officer of Barnes & Noble Inc. This election is "unprecedented in terms of the fear, anger and frustration being experienced by the public."

Retailers and restaurants have used a handful of well-worn excuses over the years with varying levels of legitimacy. There's the usual culprit, the weather, and shifts in the calendar, such as Easter coming early. Now they've added presidential politics.

Interestingly, the relative underperformance of retail stocks has tracked rather closely with Clinton's lead over Trump...

Why Samsung's Dud Phones Will Cause Lasting Damage

Samsung's latest recall will test the patience of its smartphone-addicted customers.

America's Fling With Bling Is Getting Old

A post-election rebound in U.S. luxury spending could prove wishful thinking.

Alcoa stock slammed by earnings 'disaster' as season gets off on the back foot

Aluminum giant missed on profit and sales and lowered its full-year outlook. Meanwhile, the flow of profit and sales warnings continued.

The Sniff Test: Alcoa's earnings report missed the mark, in more ways than one

Alcoa's last earnings report before it split into two companies wasn't its best, in more ways than one.

Hurricane Matthew victims beware: That insurance repair check could mean trouble

The "mortgage clause" can mean you'll need your bank's OK before you cash that check and make repairs to your home.

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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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