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22Dec2016 Market Close: Wall Street Closed Lower, But Off Its Session Lows, Crude Prices Slipped, US Dollar Settles Higher, US Economy Slowed In 4th Quarter

Written by Gary

U.S. stocks fell today (SPY -0.1%), weighed down by a dip in retailers, as investors stepped back from a recent rally fueled by optimism that President-elect Donald Trump will invigorate economic growth. U.S. consumer spending increased modestly as household income failed to rise, suggesting the economy slowed in the fourth quarter.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Wall St. dips as retailers lag

NEW YORK (Reuters) - U.S. stocks fell on Thursday, weighed down by a dip in retailers, as investors stepped back from a recent rally fueled by optimism that President-elect Donald Trump will invigorate economic growth.

U.S. sues Barclays for mortgage securities fraud

NEW YORK (Reuters) - The U.S. Department of Justice on Thursday sued Barclays Plc for fraud in the sale of mortgage securities in the run-up to the financial crisis.

Volkswagen reaches deal with 80,000 U.S. 3.0-liter vehicle owners

WASHINGTON (Reuters) - A federal judge said on Thursday that Volkswagen AG has reached an agreement in principle to provide "substantial compensation" to the owners of about 80,000 3.0-liter polluting diesel vehicles, a key hurdle to resolve the German automaker's emissions scandal.

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

WASHINGTON (Reuters) - U.S. consumer spending increased modestly in November as household income 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) - Europe's Airbus signed a firm contract on Thursday to sell 100 jets to IranAir, completing a return by Western plane giants and paving the way for deliveries to start next month, 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.

Retails Stocks Crash into the Hard, Cold Rocks; The Dow Trades Down a Smidge

Look at these god damned retail stocks. They're crashing I tell ya, crashing!

retail

But no one really cares anymore. Investors know the risks associated with hiking rates into a weak economy, but are consciously choosing to ignore said risks in order to partake in the grand experiment of a centrally planned global economy. We need slave labor, lots of it, and plenty of open borders.

In spite of the most important part of the U.S. economy getting nailed today, after November's consumer spending came in must less than expected, the Dow is hardly down. Everything is just meh.

Incidentally, President elect Trump will have his hands full come January 20th, specifically with a central bank whose stated goal is now to hedge against any fiscal stimulus he enacts in office. Janet Yellen just wants to fight inflation. There's nothing political about it, naturally.

Since election night, the 10yr bond yield has risen from 1.75% to 2.55% on the premise of stronger than expected American GDP under Trump. Pray tell me, how will this occur is the Fed continues to hike rates into a very meek consumer spending environment, one hampered by rising oil prices rigged by OPEC?

You do the math.

You do the math.

Content originally generated at iBankCoin.com

Investors 'Shocked' As Dow Suffers Longest Losing Streak Since Election

TWO DOWN DAYS IN A ROW...

The Dow Jones Industrial Average shocked investors today as it suffered a second consecutive day of losses - the first time since before the election...

Despite best efforts at slamming VIX once again (for the 5th day in a row), Dow 20k eludes...

Another disappointed trader...

DOW almost 20000#GIDDYUP be patient #EmeraldCity is getting closer and closer pic.twitter.com/tPLZONoVFS

— peter tuchman (@Ptuchmannyse) December 20, 2016

US Stock market breadth remains weak...

Small Caps an ...

Chart(s) Of The Week: 'Lombard Street' For A New Age

Submitted by Jeffrey Snider via Alhambra Investment Partners,

At one point in time not all that long ago, basic economics (small "e") ruled central banking. There was really no other choice, as out of necessity bred change and understanding. The English were perhaps first in that lead, as the Empire with greatest economic and financial reach. It is interesting what we take for granted today as if it had been intellectually settled for all human history, but in the revolutionary times of the 19th century they still struggled to understand what would be considered a modern economy.

Bank and money panics were nothing new, of course, nor were asset bubbles. For the first time, however, money and economy seemed to be more and more intertwined. In the agrarian roots of any economy, there was no business cycle to speak of. Widespread unemployment was a new development, with competing ideals setting out in all directions to explain it, and, if possible, eliminate it. At one end was people like Karl Marx and Friedrich Engels who thought they could do away with the business cycle by doing away with business; at the other end were those who sought out money and its role in revolution, industrial as well as social.

Walter Bagehot was one such researcher who in 1873 published Lombard Street: A Description of the Money Market. Written in part as a response to widespread panic in 1866, it is the first to have issued what was once central banking's great dictum: lend freely on good collateral at high interest rates. Bagehot never wrote those words, but his meaning resonated and still does. In 2014 when former Federal Reserve Chairman Paul Volcker called for a new Bre ...

Red Flag For Markets: Pension Funds To Sell "Near Record" Amount Of Stocks In The Next Few Days

One of the recurring comments about the "Trumpflation" rally, which has sent US stock markets to constant record highs and pushed the Dow Jones just shy of 20,000 has been that there is virtually nobody selling. According to a poll released today by Reuters, which surveyed 45 fund managers and CIOs around the globe, investors' equity holdings rose to six-month highs in December on bets that buying at all time highs would mean selling even higher.

"Be ready to buy dips," Trevor Greetham, head of multi-asset at Royal London Asset Management, told Reuters however that has proven difficult in the past two months as there have been largely no dips to buy. As Carl Icahn lamented earlier on CNBC, "nobody is selling."

However, according to a new analysis from Credit Suisse, a "seller" may emerge, and a very determined one at that.

In a report by the Swiss Bank's Victor Lin, pension funds that rebalance monthly and quarterly would need to sell $38 billion of U.S. equities in coming days to rebalance to prior asset allocation levels.

While regular readers are well aware, there has been a massive capital shift out of global bonds and into stocks in the 4th quarter, leading ironically to a mirror image result: while the value of global stocks has risen by $3 trillion since the US election according to Deutsche Bank, the value of debt has declined by an identical amount.

But while Mark-To- Market values of key asset holdings in pension portfolios have shifted violently, pensions have specific quotas to adhere to, which in this case means selling winners and buying losers to return to their mandat ...

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: And 2016's best-performing commodity is ... bitcoin?

After two years of lackluster returns, the price of a single coin soared more than 100% this year — leaving it on track for its best annual performance since 2013.

Personal Finance Daily: The most unaffordable place in the U.S. and how to be a guilt-free Grinch

Thursday's top personal finance stories

The Tell: Oprah Winfrey gained $3.6 million after saying she lost 40 pounds

Oprah Winfrey helped fatten the wallets of Weight Watchers investors, and her own, after saying in a new ad campaign that she lost more than 40 pounds.

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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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