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17Oct2016 Market Update: US Indexes Falling Fractionally As Fed MFG Gauge Falls, Crude Fall Into $49 Handle, Gold Climbs Modestly

Written by Gary

US markets opened lower and have been trading sideways for most of the morning. Afternoon session show weakness (SPY -0.3%) which might show additional downside Wall Street downside. TheNY Fed's manufacturing activity fell to a negative reading of 6.8 from a negative reading of 1.99, not good!

Here is the current market situation from CNN Money

North and South American markets are mixed today. The Bovespa is up 0.93% while the IPC gains 0.19%. The S&P 500 is off 0.29%.

What Is Moving the Markets

Here are the headlines moving the markets.

Wall St. dips as energy, consumer stocks weigh

(Reuters) - Wall Street was near session lows on Monday afternoon as energy stocks slipped along with oil prices, and Amazon and Netflix weighed on consumer stocks.

Weak utilities demand restrains U.S. industrial production

WASHINGTON (Reuters) - U.S. industrial production barely rose in September as a rebound in manufacturing and mining output was offset by surprisingly weak demand for utilities, pointing to a moderate acceleration in economic growth in the third quarter.

Lack of new blood casts doubt over Wells Fargo's change plan

NEW YORK (Reuters) - Wells Fargo & Co's decision not to introduce new names onto its board or into the ranks of its senior management in the wake of a sales scandal has raised questions about whether it can truly fix the culture which caused its problems.

Carl Icahn on CNBC says a lot of companies are 'way overvalued'

NEW YORK (Reuters) - Billionaire investor Carl Icahn told CNBC on Monday that many S&P 500 companies are "way overvalued" considering the risk in emerging markets.

Bank of America profit rises on bond trading, cost cuts

(Reuters) - Bank of America Corp , the second-largest U.S. bank by assets, reported its first profit increase in three quarters on Monday, foiling expectations for another drop, as bond trading surged and expenses fell.

Deutsche Bank's options to solve capital dilemma seen to be limited

FRANKFURT (Reuters) - Deutsche Bank needs to move quickly to boost capital and deliver healthy profits if it is to restore investor confidence, but its room for maneuver appears limited, bankers, analysts and investors say.

Dutch regulator says Tesla's 'Autopilot' name a concern

AMSTERDAM (Reuters) - The Dutch agency that approved electric carmaker Tesla's "Autopilot" driver assistance system for use throughout Europe is concerned the name could be misleading, a spokeswoman said on Monday, after Germany asked the company to stop using the term in advertising.

Hasbro revenue, profit beat as Disney Princess dolls dazzle

(Reuters) - Hasbro Inc reported better-than-expected quarterly revenue and profit, helped by strong demand for Disney Princess, Frozen and Trolls dolls, and said it was seeing "strong sales trends" heading into the holiday shopping season.

Fed's Fischer: downshift in potential means 'not that simple' to raise rates

NEW YORK (Reuters) - The U.S. economy may face longer and deeper recessions in the future if interest rates remain stuck at current low levels, Fed Vice Chair Stanley Fischer said on Monday as he mapped out a world in which low growth hamstrings central banks from effective recession-fighting.

Perception Vs. Reality

Submitted by Michael Lebowitz via,

Perception versus Reality

When asset valuations are extended well beyond historical norms, as they are today, some investment managers elect to take a more defensive and cautious posture than the consensus. In "Bubbles and Elevators", we discussed how behavioral instincts to follow the herd dominate human nature, but fighting those instincts is necessary to limit exposure to, or avoid entirely, market situations that pose abnormally high risks. Rational judgement, not emotion, should guide investment decisions, and investment professionals need to effectively impart this rationale to clients. As if this task is not hard enough, it is frequently made more challenging when their client's perspective on market returns is not supported by the facts. At such times, it is incumbent upon the manager to help clients understand reality.

Currently, with equity markets sustained near all-time highs, there is a common perception that the equity market is "running". As a result, many investors harbor concern of getting left behind. The reality is that equity markets are not surging, or "running", and have actually been consolidating for almost two years.


Human perception is based on an incredible amount of sensory information. Some of our perception may be based on fact but quite often it is more heavily influenced by the opinions of other people - friends, strangers, the media, and the so-called "experts".

Currently, many investors have a perception that the equity markets are exhibiting powerful momentum higher and generating above average ret ...

Iran Disagree With OPEC Production Estimates As Hedge Fund Oil Longs Hit 2 Year High

As we reported last week, just as OPEC announced a new monthly production record, with total cartel output rising by 220kbpd to a record 33.4mmbpd...

... driven by a jump in production in Iraq, Nigeria and Libya, more confusion emerged regarding the recently concluded OPEC Algiers "deal", according to which production would be cut back to 32.5-33.0 mmbpd, as opposition to OPEC's secondary production estimates rose, as Venezuela join Iraq in disagreeing with the cartel's third-party production estimates. To wit: Venezuela reported crude output of 2.33m b/d in Sept. to OPEC, 245k more than secondary source estimates, while Iraq reported 4.78m b/d in Sept., 320k above secondary source estimates.

Making matters worse, during last week's Istanbul meeting, OPEC secretary general Mohammed Barkindo told reporters that "OPEC has still hasn't decided yet whether OPEC and non-OPEC would make cuts at the same time, or OPEC would move first" while adding to the confusion, Putin said that Russia would only join OPEC if the organization agreed on a freeze, while Rosneft suggested it would only join a price freeze, not cut.'

Today, the rising OPEC discord hit a crescendo when Iran, one of the few nations exempt from the OPEC production freeze agreement, said it plans to boost its oil output from the current 3.89 mmbpd to 4 mmbpd by the end of the year, complicating the producer group's plan to cut supply in an effort to prop up prices. Shortly thereafter Oil Minister Bijan Namdar Zangane ...

Paul Ryan Blasts FBI: "Mishandling Bears All The Signs Of A Cover-Up"

Yesterday we noted a potential "quid pro quo" arrangement between the FBI and State Department whereby Patrick Kennedy, a senior executive at the State Department, offered "additional slots for the FBI at missions overseas" in return of "altering the classification" of certain Hillary Clinton emails (see "Lawmakers Find "Quid Pro Quo" Between FBI And State Over Altered 'Classified' Clinton Emails"). Now, House Speaker Paul Ryan released the following statement saying that efforts of the State Department to pressure the FBI "bears all the signs of a cover-up" which, he says, is exactly why he called on the Director of National Intelligence to deny Hillary access to classified information.

WASHINGTON—House Speaker Paul Ryan (R-WI) today responded to new documents released under a Freedom of Information Act request related to the FBI investigation of former Secretary of State Hillary Clinton's private email server:

"These documents further demonstrate Secretary Clinton's complete disregard for properly handling classified information. This is exactly why I called on DNI Clapper to deny her access to classified information. Moreover, a senior State Department official's attempt to pressure the FBI to hide the extent of this mishandling bears all the signs of a cover-up. This is why our aggressive oversight work in the House is so important, and it will continue."

Clinton and Trump Supporters Both Agree On One Thing: The Election Could Be Hacked

73% of Republicans - and according to one poll, 41% of all voters - believe the election could be stolen by Clinton and her lackeys in the media.

Democrats urgently warn that there's a real threat that Russia could hack our election to steal it for Trump.

While these sound like opposites that are so different that they cannot be reconciled, there's a bigger picture: our voting systems are so insecure that elections can be stolen.

The alternative media has been warning for years that America's voting systems are so poorly-designed that it would be child's play to steal an election.

(Indeed, Democratic president Carter and Republican Supreme Court Justice O'Connor said that the 2000 presidential election was stolen. And some experts - including the ...

The Biggest Pharma Election Risk Is in California

Political risks surrounding high drug prices aren't limited to the presidential campaign.

The End of Monetary Policy Ushers in a Messy New Age

Central banks have ruled the roost in markets. Investors might find that frustrating, but what comes next?

China's Crown Affair Puts Pressure on Casinos Everywhere

The world's casinos need China's money. They just have to be very coy about asking for it.

September 2016 Industrial Production Remains In Contraction Year-over-Year

Written by Steven Hansen

The headlines say seasonally adjusted Industrial Production (IP) marginally imrpoved. Headline manufacturing also improved.

The Tell: Billionaire David Tepper is 'pretty cautious' on the stock market

Billionaire hedge-fund manager David Tepper is "pretty cautious" on the stock market as investors await the outcome of November elections.

In One Chart: Here's what happens to stocks in election years when one party wins big

Investors are more certain about the Election Day outcome but less certain about the policy outlook.

Capitol Report: State Department official pressured investigators to change email status, FBI documents show

A State Department official pressured the Federal Bureau of Investigation to change the classification status of one of Hillary Clinton's emails as part of a "quid pro quo," according to documents released by the FBI on Monday.

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