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17Feb2017 Market Update: US Stock Markets Trade Lower, Sideways On Lower Volume, WTI Crude Prices In The 53 Handle And The US Dollar Continues To Trend Upwards

Written by Gary

Wall Street took a much needed break ahead of the three-day weekend (SPY -0.1%), led by bank and energy stocks, as investors booked profits after a record-setting few days, while gains in Kraft Heinz helped keep the Nasdaq afloat.


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 0.25% while Mexico's IPC is off 0.24% and U.S.'s S&P 500 is lower by 0.14%.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 77%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 75%
Investors Intelligence sets the breath Above 50 bullish 69%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. +11.06
StockChart.com NYSE % of stocks above 200 DMA Index ($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 $OEXA200R rises above 65%
Secondary Bullish Indicators:
a) RSI is POSITIVE (above 50)
b) Slow STO is POSITIVE (black line above red line)
c) MACD is POSITIVE (black line above red line)
84%
StockChart.com NYSE Bullish Percent Index ($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 ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 76%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 24.22
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 86.35
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors

What Is Moving the Markets

Here are the headlines moving the markets.

Wall Street rally cools as banks, energy stocks weigh

(Reuters) - The Dow and S&P 500 dipped on Friday, led by bank and energy stocks, as investors booked profits after a record-setting few days, while gains in Kraft Heinz helped keep the Nasdaq afloat.

Kraft Heinz bids $143 billion for Unilever in global brand grab

LONDON (Reuters) - U.S. food company Kraft Heinz Co made a surprise $143 billion offer for Unilever in a bid to build a global consumer goods giant, although it was flatly rejected on Friday by the maker of Lipton tea and Dove soap.

Samsung chief Lee arrested as South Korean corruption probe deepens

SEOUL (Reuters) - Samsung Group chief Jay Y. Lee was arrested on Friday over his alleged role in a corruption scandal rocking the highest levels of power in South Korea, dealing a fresh blow to the technology giant and standard-bearer for Asia's fourth-largest economy.

S&P downgrade warning sends Toshiba shares falling

TOKYO (Reuters) - S&P Global Inc said in a report on Friday it could cut its rating of Toshiba Corp credit by several notches should the Japanese firm receive financial support that includes debt restructuring, sending Toshiba stock down 9 percent.

Snap IPO expected to price March 1 after market closes

(Reuters) - The initial public offering of Snap Inc, owner of the popular messaging app Snapchat, is expected to price March 1 after the market closes, Fidelity Investments told brokerage clients on Friday.

U.S. shale oil braces for the unfamiliar in 2017: inflation

(Reuters) - U.S. shale producers are facing their first production cost increase in five years in 2017 as industry activity picks up and energy service providers hike fees to take a bigger share of the profits generated by higher oil prices.

Merkel says to do all she can to secure Opel jobs in Germany

BERLIN/RUESSELSHEIM, Germany (Reuters) - Germany will do all it can to secure Opel plants and jobs in the country if Peugeot maker PSA buys the General Motors (GM) business, Chancellor Angela Merkel said on Friday, highlighting the political challenges the carmakers face in sealing a deal.

Exclusive: Kinder Morgan starts talks with investors for $5.2 billion Canada pipeline project - sources

TORONTO/NEW YORK (Reuters) - Kinder Morgan Inc has begun talks with institutional investors including major Canadian pension funds and private equity firms to raise capital for the C$6.8 billion ($5.2 billion) expansion of its Trans Mountain pipeline project, according to people familiar with the process.

Barclays, Citi helped South Africa with forex trading probe - sources

JOHANNESBURG (Reuters) - Barclays Plc and Citigroup approached South African competition regulator with information relating to the alleged rigging of the rand currency's exchange rate, two sources with direct knowledge of the matter said on Friday.

Why Hitting 2% Real GDP Growth Is Key For US Corporate Profits

Submitted by Eric Bush via Gavekal Capital blog,

While the myth that stock market returns are highly correlated to a country's GDP growth rate has largely been debunked, there remains a strong, and intuitive, relationship between corporate profits and GDP. GDP measures the output of an economy and corporate profits are simply the income to capital owners derived from that output (with some accounting adjustments made along the way). In the long-run, equity investors need to see growth in corporate profits in order to justify equity prices.

In the table below, we summarize the YoY change in before tax corporate profits (with IVA and CC adjustments) by various real GDP growth rates.

We are using quarterly data from the NIPA accounts from 3/31/1947-9/30/2016. Let us explain what the table is illustrating by looking at an example. For instance, when the YoY change in real GDP growth is between 1% and 1.5% for any given quarter (we have had 13 such occurrences since 1947), corporate profits on average have increased by a little more than 1% on a YoY basis. Additionally, we have calculated a profits "beta" by taking the growth rate of corporate profits divided by the growth ra ...

Permian Panic Continues As Rig Counts Rise Amid Record Glut In Crude

With a record glut of crude and gasoline, US crude production pushed to new cycle highs this week and continues to track lagged rig counts.

US crude inventories are at a new record high...

And so are Gasoline inventories...

And the rig ccount keeps rising with lagged oil prices...

*U.S. OIL RIG COUNT UP 6 TO 597 , BAKER HUGHES SAYS :BHI US

Highest since October 2015

Production keeps rising, and has a long way to go to catch up to the lagged rig count...

And the oil algo idiocy from DOE data has been erased with RBOB back below $1.50...

Allianz: Bumper Buyback Shows Insurer's Strength

People often complain their insurers don't pay out what they should: Investors in Allianz can have no such gripes.

Who Are Snap's Real Friends?

Snap is asking a lot of its investors in its coming IPO, and that may lead them to push back.

Toshiba and Japan's Struggling Banks

Despite Toshiba's negative shareholder equity, its creditors have reiterated their commitment to continuing support.

10 February 2017: ECRI's WLI Growth Index Moderately Declines

ECRI's WLI Growth Index which forecasts economic growth six months forward remains in positive territory for the 47th week - after spending the previous 35 consecutive weeks in negative territory. This is compared to RecessionAlerts similar weekly leading index. ECRI released their coincident and lagging indices this week and is discussed below.

Key Words: Guns are as easy to get as cellphones for kids in Chicago, Sen. Durbin says

As to his prescription for returning Chicago's murder rate to the downtrend in which it had been for decades, until a headline-making jump in 2016, the Democratic minority whip says the city needs all the federal, state and local resources that can be mustered.

Capitol Report: A look at the economy Trump inherited, which he calls a 'mess'

President Donald Trump on Thursday continued to poor-mouth an economy that others are becoming impressed with.

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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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