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15Nov2016 Market Update: US Markets Mixed And Trading Sideways, Gold Remains Weak, US Dollar Strong And Crude Prices Rising

Written by Gary

US indexes have drifted sideways with the DOW down -0.2% and the other major indexes fractionally in the green (SPY +0.3%). Crude prices jumped as much as 5 percent today and are now trading in the mid 45 handle as the US dollar is stable in the 100+ range. Indicators are bullish with a neutral slant.


Here is the current market situation from CNN Money

North and South American markets are mixed today. The S&P 500 is up 0.33% while the IPC gains 0.01%. The Bovespa is off 6.86%.

What Is Moving the Markets

Here are the headlines moving the markets.

Dow pauses after six-day rally; tech stocks rise

(Reuters) - The S&P 500 and the Nasdaq were higher in early afternoon trading on Tuesday as tech stocks were back in demand after a post-election drubbing, while the Dow took a breather following a six-day rally.

Strong U.S. retail sales reinforce December interest rate hike

WASHINGTON (Reuters) - U.S. retail sales rose more than expected in October as households bought motor vehicles and a range of other goods, pointing to sustained economic strength that could allow the Federal Reserve to raise interest rates next month.

Exxon in negotiations with Chad over record $74 billion fine: Bloomberg

(Reuters) - Exxon Mobil Corp is negotiating with Chad over a record $74 billion fine the U.S. oil company was told to pay by a court in the central African nation over unpaid royalties, Bloomberg reported on Tuesday.

Elon Musk-backed AI startup and Microsoft sign cloud agreement

(Reuters) - OpenAI, the non-profit artificial intelligence (AI) research firm backed by Tesla Motors Inc's Elon Musk and other prominent tech executives, has signed an agreement to run most of its large-scale experiments on Microsoft Corp's flagship cloud service, Azure.

Exclusive: Four large Wells Fargo shareholders want more action from board

NEW YORK (Reuters) - Several large Wells Fargo & Co investors say they are looking for changes on the board of directors in the wake of a sales scandal that has caused months of upheaval for the bank and cost its former chief executive his job.

Federal Reserve says will be more open about 'stress tests': GAO report

WASHINGTON (Reuters) - The Federal Reserve will be more open with Wall Street about how it conducts its annual "stress tests" of the largest U.S. banks, the central bank said on Tuesday.

EU starts marathon talks on budget review, Italy unhappy

BRUSSELS/ROME (Reuters) - European Union governments and institutions are set for intense budget negotiations ahead of a Thursday deadline, with Italy complaining not enough spending is planned for handling migration, security threats and youth unemployment.

Britain's Johnson: may have to leave EU customs union but can maintain free trade

PRAGUE (Reuters) - Britain may have to leave the European Union's customs union when it quits the EU but it can maintain free trade with the bloc, British Foreign Secretary Boris Johnson was quoted as saying on Tuesday.

Boeing shares fall as United Airlines defers 737 order

SEATTLE (Reuters) - Boeing Co shares dropped on Tuesday after United Continental Holdings said it will convert orders for 61 Boeing 737 jetliners, worth nearly $5 billion at list prices, into newer 737 MAX models for delivery in later years.

Saudi Arabia Warns Trump Not To Block Oil Imports

Saudi Arabia has had a bad week: the kingdom, having spent tens of millions in "donations" to fund not only the Clinton Foundation which is now irrelevant, but also allegedly to sponsor 20% of Hillary's presidential campaign, has suddenly found itself with no "influence" to request in exchange for its "generosity." Instead, it is forced to engage in something it loathes: open diplomacy.

As a result, its first attempt at engaging with the US president-elect, amounts to what is effectively a thinly veiled threat wrapped as a warning. As the FT reports, "Saudi Arabia has warned Donald Trump that the incoming US president will risk the health of his country's economy if he acts on his election promises to block oil imports."

In a sign of the difficulties Mr Trump faces over his campaign pledges to create "complete American energy independence" from "our foes and the oil cartels", Saudi Arabia's energy minister pointedly reminded the president-elect that the US "benefits more than anybody else from global free trade", adding, "energy is the lifeblood of the global economy".

The veiled threat is obvious: should you proceed to stimulate and subsidize the US shale industry - whose resurgence under Obama drastically cut the amount of US oil imports - in a bid for energy independence, there will be consequences. And just like that we can add Saudi Arabia to the long list of countries - like China first and foremost - that is engaging in veiled threats that preserving the status quo is in the best interest of America.

"At his heart President-elect Trump will see the benefits and I think the oil industry will also be advising him accordingly that blocking trade in any product is not healthy," Khalid al-Falih, who is also chairman of Aramco, the state-run oil company, told the Financial Times in Marrakesh, w ...

A Trump Doctrine - "America First"

Submitted by Patrick Buchanan via Buchanan.org,

However Donald Trump came upon the foreign policy views he espoused, they were as crucial to his election as his views on trade and the border.

Yet those views are hemlock to the GOP foreign policy elite and the liberal Democratic interventionists of the Acela Corridor.

Trump promised an "America First" foreign policy rooted in the national interest, not in nostalgia. The neocons insist that every Cold War and post-Cold War commitment be maintained, in perpetuity.

On Sunday's "60 Minutes," Trump said: "You know, we've been fighting this war for 15 years. ... We've spent $6 trillion in the Middle East, $6 trillion — we could have rebuilt our country twice. And you look at our roads and our bridges and our tunnels ... and our airports are ... obsolete."

Yet the War Party has not had enough of war, not nearly.

They want to confront Vladimir Putin, somewhere, anywhere. They want to send U.S. troops to the eastern Baltic. They want to send weapons to Kiev to fight Russia in Donetsk, Luhansk and Crimea.

They want to establish a no-fly zone and shoot down Syrian and Russian planes that violate it, acts of war Congress never authorized.

They want to trash the Iran nuclear deal, though all 16 U.S. intelligence agencies told us, with high confidence, in 2007 and 2011, Iran did not even have a nuclear weapons program.

Other hardliners want to face down Beijing over its claims to the reefs and rocks of the South China Sea, though our Manila ally is talking of tightening ties to China and kicking us out of Subic Bay.

In none of these places is ...

"Is The Market Wrong?": Financial Conditions Are Tightening At An Alarming Pace

As a result of the recent spike in yields, and surge in the dollar following the Trump victory, the market's reaction has been to assume that this is a harbinger of rising inflation due to a tidal wave of "imminent" fiscal easing, and has accordingly pushed up the December rate hike odds to above 90%. After all, the logical offset of the expected easing in fiscal conditions is for the Fed to tighten monetary policy, arguably the only source of market gains (and economy support) over the past 7 years (a good read on "monetary offsets" can be found here).

But is the market wrong?

After all, just today the BIS issued a warning that the stronger dollar - far from an "all clear" signal of confidence in the economy, may simply signal far greater financial system risk as a result of a substantial global dollar funding shorage.

On the other hand, rate hikes by Yellen could precipitate the same reserve liquidation selling by China which will be forced to keep the Yuan stronger on a surge in outflows, that was observed in late 2015 and early 2016, and which sent the S&P500 into a sharp, if brief correction.

A troubling answer for the bulls emerges when looking at the latest move in Goldman's Financial Conditions Index: as of Monday night, it has spiked above 100, the highest level since March and topping a brief spike seen in the aftermath of Brexit.

Oil Surges To 'Algiers' Lows After Obama Statement & Well-Timed OPEC Headline

Just as Morgan Stanley warned, be careful getting too bearish into the OPEC meeting as OPEC's ability to engineer a short-squeeze (via well-placed but meaningless headlines) trumps any dismal fundamentals. Sure enough, WTI is surging by the most in 7 weeks to pre-Algiers levels on spurious headlines today, which builds on a reversal yesterday that started as President Obama discussed the Iran Deal.

As a reminder, here is what MS said last week... Be Careful About Getting Too Bearish Ahead of OPEC Meeting

Poor fundamentals don't prevent headline-related price reversals. Skepticism about the ability for OPEC to execute on its Algiers agreement is warranted. A number of producers are claiming exemptions, OPEC production is rising, greater cuts may be required to achieve the top end of the range, and OPEC has a poor compliance history. Reuters also suggested that Saudi Arabia threatened to raise production, and former Saudi Energy Minister Ali Al-Naimi stated that OPEC can't cut by itself. Nevertheless, we would be nervous being short from these levels going into the meeting despite what appears to be a poor fundamental backdrop and our downbeat outlook for 2017.

Why Trump Means No Quick Fix for Insurers

A turn in yields will only help investment portfolios slowly at best.

Investors' Prognosis for Teva Seems Overly Bleak

A rough year in generic-drug industry offers investors opportunity.

Trump Trade Won't Break Emerging Markets

Donald Trump's election may have kicked up a storm, but emerging markets should sail through intact.

September 2016 Headline Business Sales and Inventories Improve

Written by Steven Hansen

Econintersect's analysis of final business sales data (retail plus wholesale plus manufacturing) shows unadjusted sales were not as good as last month - but the rolling averages improved. Unadjusted Inventories grew relative to the previous month and inventory-to-sales ratios remain at recessionary levels.

In One Chart: Online retailers tighten vice grip on department stores

Sales at U.S. retailers have risen at the fastest pace in the past two months since 2014 and internet stores get much of the (consumer) credit.

Market Extra: Trump is the black — make that orange — swan that Wall Street was bracing for

The billionaire real-estate developer is rocking markets around the globe. Few believed he had a chance at beating Democratic rival Hillary Clinton in a head-to-head race for the Oval Office—and that is a black swan event.

Mansion Global: Trump's childhood home could get tenfold price boost but no historical bump

The value of Donald Trump's childhood home in Queens, New York, has skyrocketed thanks to his triumph last week—but its historical worth, not so much.

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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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