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27Jan2017 Market Update: Wall Street Down Fractionally, Crude Prices Slipping And The US Dollar Volatile While Investors Weigh So-So Corporate Earning Reports

Written by Gary

Wall Street is taking a breather and will forego any new attempt to make new historical highs today. US markets are trending down fractionally (SPY -0.2%) weighed down by underwhelming corporate earnings and gross domestic product data.


Here is the current market situation from CNN Money

North and South American markets are lower today with shares in Mexico off the most. The IPC is down 0.63% while Brazil's Bovespa is off 0.35% and U.S.'s S&P 500 is lower by 0.15%.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 68%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 57%
Investors Intelligence sets the breath Above 50 bullish 69%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. +15.97
StockChart.com NYSE % of stocks above 200 DMA Index ($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 $OEXA200R rises above 65%
Secondary Bullish Indicators:
a) RSI is POSITIVE (above 50)
b) Slow STO is POSITIVE (black line above red line)
c) MACD is POSITIVE (black line above red line)
76%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 72%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 74%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 25.08
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 85.33
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 11.313

What Is Moving the Markets

Here are the headlines moving the markets.

U.S. economy slows on wider trade gap; business spending rises

WASHINGTON (Reuters) - U.S. economic growth slowed sharply in the fourth quarter as a plunge in shipments of soybeans weighed on exports, but steady consumer spending and rising business investment pointed to sustained strength in domestic demand.

Wall St. slips as earnings, GDP data disappoint

(Reuters) - Wall Street was slightly lower on Friday, weighed down by underwhelming corporate earnings and gross domestic product data.

German prosecutors open fraud inquiry into former Volkswagen CEO

BERLIN (Reuters) - German prosecutors are investigating former Volkswagen chief executive Martin Winterkorn on suspicion of fraud, looking into when he first knew that the carmaker was rigging diesel emissions tests.

Exclusive: Ford braced for $600 million Brexit currency hit

PARIS (Reuters) - Ford's 2017 earnings will be hit by a delayed currency impact of at least $600 million from Britain's vote to leave the European Union, the U.S. carmaker told Reuters, putting last year's record European profit levels beyond reach.

GM to cut 625 auto jobs in Canada, move to Mexico: union

TORONTO (Reuters) - General Motors Co will cut 625 jobs at its auto assembly plant in Ingersoll, Ontario, by the end of July and move some production work to Mexico, the president of Canada's largest auto workers union said on Friday.

Microsoft's market value tops $500 billion again after 17 years

(Reuters) - Microsoft Corp's market capitalization topped $500 billion for the first time since 2000 on Friday, after the technology giant's stock rose following another quarter of results that beat Wall Street's expectations.

American Airlines stock plunges on rising labor costs

(Reuters) - American Airlines Group Inc shares plunged on Friday after the company's release of its fourth-quarter and full-year 2016 results, as mounting costs and growing wage pressures spooked investors.

In a corner, Patterson fights to keep BT transformation on track

LONDON (Reuters) - Just weeks before a high stakes auction for TV rights to top European soccer, the CEO of Britain's BT is locked in a fight on multiple fronts, leaving the communications giant with little room for manoeuvre.

Toshiba chairman Shigenori Shiga ready to step down: Nikkei

(Reuters) - Toshiba Corp Chairman Shigenori Shiga is ready to step down to take responsibility for the huge write-downs looming over the Japanese group's U.S. nuclear power unit Westinghouse Electric Co LLC, the Nikkei business daily reported.

Coincidence? Dow Hits 20,000 As National Debt Reaches $20 Trillion

Submitted by Michael Snyder via The Economic Collapse blog,

The Dow Jones Industrial Average provides us with some pretty strong evidence that our "stock market boom" has been fueled by debt. On Wednesday, the Dow crossed the 20,000 mark for the first time ever, and this comes at a time when the U.S. national debt is right on the verge of hitting 20 trillion dollars.

Is this just a coincidence? As you will see, there has been a very close correlation between the national debt and the Dow Jones Industrial Average for a very long time.

For example, when Ronald Reagan took office in 1991, the U.S. national debt had just hit 994 billion dollars and the Dow was sitting at 951. And as you can see from this chart by Matterhorn.gold via David St ...

Why is Silver is Up Today?

Silver is The Goldilocks of Metals

Via Soren K and MarketSlant. As more and more applications are found for Silver, its industrial use will bolster and complement its status as a precious metal. We're Silver Bulls relative to Gold for this reason.

Once upon a time, technology was the silver-killer through film elimination. Now technology is finding increasing applications for Silver. At this rate, we may yet see the 16 to 1 ratio for reasons not yet championed.

Self-heating windows have existed for decades. However, they've have always relied on near-invisible wires that can be a distraction when revealed by oncoming headlights. So instead of wires, the laminated glass used in Volkswagen's new windshields includes an ultra-thin invisible layer of silver connected to the vehicle's electrical system so that it heats up and melts away ice.- Gizmodo

When film died, we saw many other potential applications in technology and medicine. But the cost was just too high. Batteries for electrical cars were one. Chlorine replacement in pools another. Colloidal Silver suspensions for various ailments a third. Microwave blocking was another. None happened on a large scale for various reasons. But now it is starting to happen in heating elements. This is no aberration. It's the beginning of an application trend.

Despite being better than copper in many conductive applications, the price of silver was too high for heating elements. And so copper was used. Technology finally devised more efficient use of Silver in windshield heating to replace copper filament and decrease glare. ...

These Are Mexico's Top Exports

While readers are aware by now of the intricate trade link that binds Mexico to the US, it is more than merely autos and avocados. As the chart below shows, of the $302 billion in total Mexican exports (offset by $179 billion in imports), the largest two categories were electrical machinery & equipment, followed by nuclear reactors, boilers machinery & equipment, with motor only coming in third spot. But no matter the breakdown in categories, one thing is clear: Mexico needs the US - which imports over 80% of Mexico's net exports - and the NAFTA agreement far more than the US does (which is not to say that the US won't be impacted once NAFTA is eliminated).

Here are some further thoughts from SocGen's Dev Ashish on the trade relationship between Mexico and the US:

Apart from the rhetoric coming out of the US in the past two-three months, particularly after the US election results, this week's executive order by President Trump, essentially pulling the US out of the TPP trade agreement, has removed some of the uncertainty over the trade and investment outlook for Mexico. To a large extent this was already priced in by the market and few were hopeful of the deal going through under the new US regime.

What has become a greater uncertainty now is the likely path and shape of NAFTA. As we have said in the past, NAFTA has considerable value for the Mexican economy. Mexico's exports to the US over past 12 months were at USD302bn or 81% of its total exports. During the same time, however, Mexico's imports to the US were USD178.9bn or 46% of Mexico's total imports. Mexico runs a trade surplus of nearly USD123bn with the US while it runs significant trade deficit with rest of the world ...

Robots Over Roughnecks: Next Drilling Boom Might Not Add Many Jobs

Submitted by Tsvetana Parasova via OilPrice.com,

The inevitable advance of technology and automation has upended industries such as car manufacturing and food processing. Now robotics is making its way into the oil fields by helping drilling activities and putting together heavy pipes.

For companies, more automation would mean higher efficiency, safer operations, and ultimately, lower drilling and production costs. For oil rig workers, it would mean that part of the jobs lost during the oil price downturn would never return. Also, part of the new job openings would require a different type of skill set: for example, information technology and advanced computer skills.

But even if automation is expected to increase, and some day take over drilling sites and drillships, it is not the norm in the oil and gas industry today. While there have been early adopters, the oil and gas drilling business is still years away from becoming an automated activity.

Companies that had been lavishly spending on drilling at oil prices at $100 per barrel were too busy pumping oil and gas to think of efficiency and production costs. But the oil price bust has squeezed their budgets, and the firms are now seeking to cut costs while increasing efficiency.

Apart from reducing the human factor in drilling such as shifts or fatigue, or work-related accidents and incidents, automation can reduce headcount costs.

Automated drilling rigs may be able ...

Tesco's Steal Leaves Booker Investors Short

A big U.K. grocery merger seems a better deal for Tesco than its would-be partner.

UBS Shows Why U.S. Is Promised Land for Banking

The bounce in U.S. market activity is the big story for European private and investment banks, even as the rest of the world remains subdued. For UBS of Switzerland that's a mixed blessing.

Weak Yen Is Only Slight Reprieve for Bank of Japan

While a weaker currency gives the Bank of Japan a much-needed reprieve, it still isn't reason to celebrate.

20 January 2017: ECRI's WLI Growth Index Continues To Creep Up

ECRI's WLI Growth Index which forecasts economic growth six months forward remains in positive territory for the 44th week - after spending the previous 35 consecutive weeks in negative territory. This is compared to RecessionAlerts similar weekly leading index. ECRI also released their lagging indicator this week.

The 'housing culture war' reignites over $42 a month

A proposed small cut to the cost of FHA mortgage borrowing has conservatives and progressives sparring over the role of government in the housing market.

Deep Dive: Fund that almost tripled the S&P 500's gain last year is now big on health-care stocks

The Highland Small Cap Equity Fund made a killing on energy stocks in 2016, generating a 32% return for investors.

Called to Account: Ford's earnings report may leave investors with a lot of questions

Ford' fourth-quarter report was one of the most unclear seen so far this earnings reporting season, for several reasons.

Earnings Summary for Today

Earnings Calendar provided by Investing.com.

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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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