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23Jan2017 Market Update: Wall Street Slides Along With Crude Prices And The US Dollar, Analysts Betting Trump Effect Is Over

Written by Gary

US stock market action is down (SPY -0.4%) from yesterday amid investor concerns over protectionist rhetoric by U.S. President Donald Trump. The U.S. dollar fell to a seven-week low against a basket of key world currencies and crude prices fell as signs of a strong recovery in U.S. oil drilling activity.


Here is the current market situation from CNN Money

North and South American markets are mixed today. The Bovespa is up 1.41% while the IPC gains 1.07%. The S&P 500 is off 0.43%.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 64%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 48%
Investors Intelligence sets the breath Above 50 bullish 68%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. -7.94
StockChart.com NYSE % of stocks above 200 DMA Index ($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 $OEXA200R rises above 65%
Secondary Bullish Indicators:
a) RSI is POSITIVE (above 50)
b) Slow STO is POSITIVE (black line above red line)
c) MACD is POSITIVE (black line above red line)
75%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 71%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 73%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 23.95
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 83.85
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 11,140

What Is Moving the Markets

Here are the headlines moving the markets.

Trump signs order withdrawing U.S. from Trans-Pacific trade deal

WASHINGTON (Reuters) - President Donald Trump signed an executive order formally withdrawing the United States from the 12-nation Trans-Pacific Partnership trade deal on Monday, following through on a promise from his campaign last year.

Federal judge blocks Aetna Inc's plan to buy rival Humana

WASHINGTON (Reuters) - A U.S. federal judge blocked on Monday health insurer Aetna Inc's proposed $34 billion merger with rival Humana, and Aetna said it was considering an appeal.

Trump pulls U.S. out of Pacific trade deal, loosening Asia ties

WASHINGTON (Reuters) - U.S. President Donald Trump formally withdrew the United States from the Trans-Pacific Partnership trade deal on Monday, distancing America from its Asian allies as China's influence in the region rises.

Wall Street turns defensive on Trump's protectionist stance

(Reuters) - The S&P 500 was on track for its worst day this year as President Donald Trump's protectionist stance on trade sent investors scurrying for safe-haven assets on Monday.

McDonald's U.S. sales drop for first time in six quarters

(Reuters) - McDonald's Corp's sales at established U.S. restaurants fell for the first time in six quarters as the novelty of all-day breakfast failed to overcome competition from supermarkets and other retailers.

Halliburton says North America revenue growth may beat rig count rise

(Reuters) - Halliburton Co , the world's No. 2 oilfield services provider, said its revenue growth this year would meet or outpace the increase in the number of drilling rigs in North America.

Japan's PM says will keep seeking Trump's understanding on TPP

TOKYO (Reuters) - Japanese Prime Minister Shinzo Abe said on Monday he believed U.S. President Donald Trump understood the value of free trade and that he would keep pitching a multinational trade pact that Trump's administration has vowed to exit.

Emirates to start Dubai-Athens-Newark flights, likely to irk U.S. carriers

DUBAI (Reuters) - Emirates plans to start flying to the United States with a stop for passengers in Greece, its second so-called fifth freedom flight and a move that could anger U.S. competitors who accuse it of competing unfairly through state subsidies.

Billionaire Dem Donor Thinks His Party Needs A New Message - "No One Votes For Polar Bears"

Tom Steyer, the Billionaire founder of the hedge fund Farallon Capital, spent $87mm funding liberal campaigns and ballot measures all across the country in 2016 and got absolutely nothing in return but a Republican-controlled Congress and White House. Something tells us the 2016 election cycle was one of the worst "investment" ROI's of Steyer's life.

But despite his stunning losses, like Obama, Steyer is convinced that Americans still overwhelming agree with liberal policies...it's just that those policies aren't being explained well enough for people to understand them. Per The Hill:

He said he still believes most voters agree with Democratic ideals, though the party didn't effectively convey them in November.

"I think there's no doubt that we reflect the will of the people to an overwhelming extent. I don't think we were successful in conveying the
spirit behind those policies, and I don't think we were successful in transmitting the urgency behind those policies," Steyer told The Hill.

While the economy added millions of jobs under former President Barack Obama, the recovery from the worst recession since the Great Depression brought with it stagnant wage growth. Steyer said that drove voters away from Democrats, who shepherded the slow-growth economy during Obama's eight years in office.

Steyer

Sure, bec ...

The Smoothest Transition Ever (For Markets)

By most mainstream media accounts, the first weekend of the Trump Administration wasn't good. Characterized as rocky, erratic, terrible, and full of false claims, the 'not ready for prime time' transition team is now the 'not ready for prime-time administration.' However, as Bespoke details, by at least one measure, though, the Trump Administration's transition has been pretty smooth... the smoothest ever for markets.

The table below was from this week's Bespoke Report newsletter and shows how the DJIA performed from Election Day through Inauguration Day for each newly elected President since 1896. Along with the DJIA's performance during each transition, we also show the maximum percentage decline the index saw from a closing high during each period.

With a gain of 7.62% during Trump's transition, the DJIA had its second best transition performance since 1896.

More importantly, with a maximum decline of 1.2% from a closing high, no other newly elected President has ever seen a less volatile transition period!

Call it whatever you want, but from the stock market's perspective at least, the Trump transition was the smoothest ever.

Trump Signs 3 Executive Orders: Withdraws From TPP, Freezes Federal Hiring, Limits Overseas Abortion Funding

As we previewed and was widely expected, President Trump has just signed 3 executive orders: one officially withdrawing the US from the Trans Pacific Partnership, a second one instituting a federal hiring freeze except for the military, and a 3rd executive order limiting abortion funding overseas.

Pres Trump signs 3 Exec Orders including federal hiring freeze "except for the military" and withdrawing US from Trans-Pacific Partnership. pic.twitter.com/XYxMFi8QDj

— Mark Knoller (@markknoller) January 23, 2017

"It's a great thing for the American worker, what we just did," Trump said on Monday after signing an order withdrawing the U.S. from the Trans-Pacific Partnership accord with 11 other nations. He didn't sign any actions to direct a renegotiation of the Nafta accord with Mexico and Canada, yet he said on Sunday he would begin talks with the two leaders on modifying the accord, BBG reported. "We've been talking about this a long time," Trump said.

Trump just signed executive orders to withdraw from TPP, limit abortion funding overseas, and limit federal hiring https://t.co/EYmHTvbi73 pic.twitter.com/uJ1crpIEyd

— Bloomberg TV (@BloombergTV) Janu ...

Aetna's Takeover Of Humana Blocked As Anticompetitive

Back in August, we reported of a fascinating case of crony capitalism, whereby Aetna gave the DOJ a not too subtle ultimatum which boiled down to the following: "If the Humana deal is blocked, we exit Obamacare."

Well, be careful what you wish for, because six months later, and with Obamacare well on its way out, moments ago a US federal judge blocked Aetna's $37 billion deal to buy rival insurer Humana, thwarting one of two large mergers that would reshape the U.S. health-care landscape. The judge's ruling, which was filed in Federal court in Washington, said the deal would be "anticompetitive"adding that the deal would have hurt competition among insurers.

U.S. District Judge John D. Bates ruled the Justice Department had proven its case that the merger would unlawfully threaten competition.

The judge said the transaction could mean higher prices and reduced services for seniors who purchase the private Medicare plans known as Medicare Advantage. He also said the merger would harm competition on public insurance exchanges in parts of Florida. With the deal now scrapped, Aetna will owe Humana a $1 billion breakup fee.

Of course, with Obamacare on its way out, it would not be a surprise if the insurance companies would not have quietly preferred that the deal was blocked. For now, however, the shareholders of Aetna are less than excited, sending the stock of the company nearly 3% lower, while Humana was rebounded to almost unchanged after plunging as much as 7% in kneejerk reation.

Big Telecoms Keep Investors on Hold

Telecom giants Verizon and AT&T have been losing ground to their smaller rivals.

Euro and Dollar Won't Be Equals Just Yet

The euro, far from heading toward parity with the dollar, is at a six-week high. Risk aversion is a supporting factor for the single currency.

More Babies in China Worth Celebrating---but Mind the Data

Official data shows Chinese women had the most children since 2000 in 2016, but questions remain over whether the data is reliable.

Robert Powell: Is Trump a threat to the fiduciary rule?

The financial services industry has spent the last seven months putting in place policies, procedures and technology in anticipation of April 10.

Key Words: The four things that would pull Obama back into the political fray

There are 'certain issues or certain moments where I think our core values may be at stake,' Barack Obama averred during his final press conference as president.

The Wall Street Journal: Aetna and Humana shares fall after federal judge blocks $34 billion merger

The judge said the transaction could have negative effects for consumers.

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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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