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22Dec2016 Market Update: Wall Street Trending Lower, DOW At 20K Maybe Next Month, Investors Heading For Holiday Retreats As Volume Falls Off

Written by Gary

Wall Street trending down (SPY -0.2%) after opening lower. Crude Prices trending fractionally higher, gold is volatile and trading sideways. The Commerce Department reports durable goods orders fell 4.6% and third-quarter gross domestic product showed the U.S. economy grew at an annualized pace of 3.5%.


Here is the current market situation from CNN Money

North and South American markets are lower today with shares in Brazil off the most. The Bovespa is down 0.64% while Mexico's IPC is off 0.44% and U.S.'s S&P 500 is lower by 0.18%.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 72%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 67%
Investors Intelligence sets the breath Above 50 bullish 67%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. +15.20
StockChart.com NYSE % of stocks above 200 DMA Index ($OEXA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Following a major market correction, the conditions for safe re-entry are when:
a) Daily $OEXA200R rises above 65%
Secondary Bullish Indicators:
a) RSI is POSITIVE (above 50)
b) Slow STO is POSITIVE (black line above red line)
c) MACD is POSITIVE (black line above red line)
79%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 70%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 71%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 25.52
StockChart.com Consumer Discretionary ETF (XLY) As long as the consumer discretionary holds above [66.88], all things being equal, it is a good sign for stocks and the U.S. economy 82.62
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 11,112

What Is Moving the Markets

Here are the headlines moving the markets.

Wall Street lower in light trading as investors pause

(Reuters) - U.S. stocks were lower in early afternoon trading on Thursday, dragging the Dow Jones Industrial Average further away from 20,000, a level it has never breached.

U.S. consumer spending slows; business investment perking up

WASHINGTON (Reuters) - U.S. consumer spending increased modestly in November as household incomes failed to rise for the first time in nine months, suggesting the economy slowed in the fourth quarter after growing briskly in the prior period.

Nokia files more patent suits against Apple

HELSINKI (Reuters) - Finnish telecoms networks equipment maker Nokia said on Thursday it had filed a new set of patent lawsuits against Apple Inc in Asia, Europe and the United States.

Airbus seals deal with Iran for sale of 100 aircraft

PARIS (Reuters) - Airbus signed a firm contract on Thursday for the sale of 100 aircraft to Iran Air, as Tehran and Western companies race to re-open trade almost a year after sanctions against Iran were lifted.

'Regtech' startups see more business in Trump era

NEW YORK (Reuters) - President elect Donald Trump is pro-business and anti-red tape. But what if your business is red tape?

Exclusive: U.S. regulator poised to approve Abbott purchase of St Jude - sources

WASHINGTON (Reuters) - U.S. antitrust enforcers are poised to approve health care company Abbott Laboratories' purchase of medical device maker St. Jude Medical Inc , two sources knowledgeable about the deal said on Thursday.

Icahn says EPA, bank regulations hamper U.S. economy: CNBC

WASHINGTON (Reuters) - Billionaire investor Carl Icahn targeted environmental and banking regulations on Thursday as big drags on U.S. corporate investment and said revamping them would be a top priority in his role as adviser to President-elect Donald Trump.

Teva to pay U.S. government $519 million over foreign bribery charges

WASHINGTON (Reuters) - Teva Pharmaceutical Industries agreed to pay more than $519 million to settle U.S. criminal and civil allegations that the company bribed overseas officials to gain business for its medications, the U.S. Department of Justice said on Thursday.

ConAgra's profit beat sends shares to record high

(Reuters) - ConAgra Brands Inc , the maker of Chef Boyardee pasta and Orville Redenbacher's popcorn, reported a better-than-expected quarterly profit as the company benefited from less discounting and lower costs.

'Off The Grid' Economic Indicators Suggest Current Expansion "Has Run Out Of Gas"

Via ConvergEx's Nicholas Colas,

This last Morning Markets Briefing of 2016 is our quarterly look at "Off the Grid" economic indicators.

Out key takeaway: the U.S. economy is still growing but in the late stages of the current cycle. Workers are quitting their jobs like it's the peak of labor market cycle. Also, consumers register confidence more typical of peaks than troughs for this measure. Full sized pickup truck sales are running in line with prior periods of high demand. Used car prices are stable, but have not increased in 5 years. Food stamp enrollment hasn't declined since May 2016. Gallup's take on consumers' daily cash spend is modestly higher than last year, but largely in line with the average of the last 3 years.

Bottom line: this data explains why markets are so enthusiastic about the novelty of Trump presidency, for the current expansion feels very much like it is out of gas.

"After all, the chief business of the American people is business." That quote is not from President-Elect Donald Trump, but rather former President Calvin Coolidge. It is certainly his best known public statement and still cited to this day, a rare acknowledgment of a man whose nickname was "Silent Cal".

Given that U.S. eq ...

Trump Calls For Expansion Of US Nuclear Capability, Hours After Putin Urges Russia To Do The Same

In a curious convergence of superpower opinions, earlier on Thursday, Russian President Vladimir Putin called for the country to reinforce its military nuclear potential. In a speech that recapped military activities in 2016, Putin said the army's preparedness has "considerably increased" and called for continued improvement that would ensure it can "neutralise any military threat".

"We need to strengthen the military potential of strategic nuclear forces, especially with missile complexes that can reliably penetrate any existing and prospective missile defence systems," the Russian president said.

He added that Russia "must carefully monitor any changes in the balance of power and in the political-military situation in the world, especially along Russian borders, and quickly adapt plans for neutralising threats to our country."

Fast forward a few hours, when just before noon Eastern, Trump again took to Twitter and the president elect echoed virtually every word Putin said earlier, stating "The United States must greatly strengthen and expand its nuclear capability until such time as the world comes to its senses regarding nukes."

The United States must greatly strengthen and expand its nuclear capability until such time as the world comes to its senses regarding nukes

— Donald J. Trump (@realDonaldTrump) December 22, 2016

...

Are 3 Rate Hikes Really Possible Next Year?

Submitted by Eric Bush via Gavekal Capital blog,

The Fed has communicated that the plan for 2017 includes three rate hikes. The market isn't quite buying into that plan yet.

According to Bloomberg's WIRP function, the first meeting with over a 50% chance of a rate hike isn't until the June FOMC meeting (73% probability of a hike).

If the market is correct, then that would mean we would have to see two more additional hikes in the second half of 2017. The last time we had three hikes in a six month period was in 2006.

According to Dec 17 fed funds futures, the market does believe that the Fed will come through with two hikes next year, however. The current implied fed funds futures rate for December 17 is 116 bps.

Unruly Jet Blue Passenger Kicked Off Plane For "Accosting" Ivanka Trump - "Your Father Is Ruining The Country"

According to reports from TMZ, an unruly Jet Blue passenger has been kicked off a plane this morning after "accosting" Ivanka Trump and "verbally berating her and 'jeering' at her 3 kids."

Ivanka, Jared and their 3 children were departing from JFK when the out-of-control passenger apparently took issue with the fact they decided to fly commercial, and coach class at that...

"Your father is ruining the country."

"Why is she on our flight. She should be flying private."

What the chances that we'll hear outrage from the left about this angry LGBT man verbally assaulting a woman and her children?

Ivanka

Moments before the encounter happened, apparently Matthew Lasner, a professor at Hunter College, decided to tweet the following about his husband (Lasner's twitter account has since been deleted):

Really @mattlasner why did you delete this tweet about deliberately harassing the @IvankaTrump at the @JetBlue terminal? pic.twitter.com/Apm4M5XFjt

— Tammy Bruce (@HeyTammyBruce)

What Trump's Cabinet Picks Mean for Markets

The people in President-elect Donald Trump's administration are extremely shareholder friendly, but investors need to keep their enthusiasm in check.

Retailers Lose Willpower as Christmas Approaches

Even the full-price stalwarts cave in to discounts the week before Christmas, and those that have been cutting prices slash even more.

Euro-Dollar Parity: It's All About the Greenback

The euro parity party plans are being dusted off. But the rising dollar needs watching closely.

Market Extra: As Dow 20,000 nears, stock-market pundit says don't play it safe in cash

Has Wall Street hit peak stock-market elation? Exuberance has the Dow Jones Industrial Average on the brink of breaching a milestone of 20,000—a level it has never hit before.

The Margin: A $151,000 Trump iPhone—the most audacious gift this holiday season

Nothing says you care—and that you have more money than good taste—quite like the gift of a $151,000, diamond-encrusted, golden iPhone with Donald Trump's smile beaming on the back.

Capitol Report: Senate Dems say Wells Fargo not responding to fraud info requests

Senate Banking Committee Democrats say their letters to Wells Fargo have not yet been answered.

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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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