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08Mar2017 Market Close: Wall Street Closed Moderately Lower, DOW Down 70 Points, WTI Crude In The Low 50 Handle

Written by Gary

The SP 500 and the DOW dipped on today (SPY -0.2%) as a sharp drop in energy stocks offset gains in financials and drug stocks.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Snap perks up after initial rush of short sellers

SAN FRANCISCO (Reuters) - Shares of Snap Inc bounced back on Wednesday following a steep selloff while an initial rush to short sell the stock appeared to be slowing.

Wall Street dips as energy weighs

(Reuters) - The S&P 500 and the Dow Jones Industrial Average dipped on Wednesday as a sharp drop in energy stocks offset gains in financials and drug stocks.

Pimco revamps BOND ETF, changing fund's name and managers

NEW YORK (Reuters) - Pacific Investment Management Co (Pimco) is replacing the full slate of managers on its Total Return Active Exchange-Traded Fund and changing its name, a spokeswoman for the fund management company said on Wednesday, the latest transformation for what was once the largest actively managed ETF.

'It's like kumbaya:' Trump's genial private meetings with CEOs jar with public attacks

WASHINGTON (Reuters) - When the bosses of some of the world's largest pharmaceutical companies headed to Washington in January to meet U.S. President Donald Trump, it had all the makings of a potentially hostile meeting.

U.S. regulators push new ETF rules despite industry's howl

NEW YORK (Reuters) - U.S. regulators are advancing rules this week to tighten standards on the ballooning exchange-traded fund industry over the objections of asset managers including BlackRock Inc and Invesco Ltd .

Praxair merger likely to take several months: Linde CEO

MUNICH, Germany (Reuters) - Finalizing a merger with Praxair is likely to take "several months", the chief executive of Linde said in a letter to a shareholder association, reiterating he saw no need to ask shareholders to vote on the $65 billion deal.

Disney CEO says staying on Trump advisory council

LOS ANGELES (Reuters) - Walt Disney Co Chief Executive Bob Iger on Wednesday defended his seat on President Trump's business advisory council as an opportunity to voice opinions that will benefit the company and its shareholders.

Trump talks infrastructure with Musk, developers

WASHINGTON (Reuters) - U.S. President Donald Trump met with business leaders on Wednesday including Tesla Inc Chief Executive Elon Musk and real estate developers, as the administration seeks partnerships with the private sector to boost infrastructure spending.

Boeing says 737 MAX 10X jet has support from airlines, suppliers

SEATTLE (Reuters) - Boeing Co defended its proposed 737 MAX 10X aircraft on Wednesday, saying it has drawn plaudits from numerous airlines and interest from parts suppliers to rebut criticisms aired at an industry conference on Tuesday.

Stocks Suffer Longest Losing Streak Since The Election As Crude Crashes

Two clips for the price of one today...

Official Trailer Release: The Bursting.
Coming to a market near you. Rated R.
Release date: TBD. pic.twitter.com/jwPNzuLoT4

— Sven Henrich (@NorthmanTrader) March 8, 2017

SPOTTED: Complacency. pic.twitter.com/TMrYGJgfGt

— Sven Henrich (@NorthmanTrader) March 8, 2017

So let's count the breaks - first macro data, then VIX, then Emerging Markets, then Copper, then High Yield Credit, and now Crude - all snapped in the last month as stocks kept rising.

The last few days have seen everything sold as it seems a major tightening/derisking is occurring...

The post-Trump-Speech panic-bid in stocks, smashing The Dow through 21,000 (and 21,100) and proving how awesome the world is.. is almost gone.

Sm ...

"Trump Trade" Or Just A $200 Billion Liquidity Illusion?

Via Steven Vannelli of Gavekal Capital blog,

Since the election we've heard the rally in stocks characterized as a "Trump Trade" or a "reflation" trade. We think there is a really important element missing from this analysis that could change very quickly over the next several weeks.

On March 16, 2017 (the day after the Federal Reserve is expected to raise interest rates for the third time) the US Federal debt ceiling comes back into law at $20.1 trillion. At the end of January, total federal debt was $19.93 trillion, and in real-time using US Debt Clock (http://www.usdebtclock.org/) it is $19.93 trillion.

In anticipation of the debt ceiling coming back into force, since November, US Treasury deposits held at the Fed have dropped from over $400 billion to around $175 billion, unleashing over $200 billion of liquidity into the markets. In the chart below, one can see how US stocks leapt one week after the peak in US Treasury deposits at the FRB.

25 Years Of March Market Madness

It's not called 'The Ides of March' for nothing...

Wedbush Securities' Scott Skyrm reminds us:

Over the past 20 years, there was a series of market sell-offs during the month of March.

In 1998, it was the subject of a news story on CNBC. They claimed it's a combination of the market digesting the February refunding and Japanese investors preparing for Japanese year-end on March 31st.

These days, world markets are more complex than in 1998, but there continues to be a series of market panics and crashes coincidentally in March.

Don't believe the hype? Here's the last 25 years of March mishaps in stocks and bonds...

March 1992: Short-end sells-off, market prices a 75 bps tightening, but the Fed eases in April

March 1994: Fed tightens in February and March igniting a sell-off in the long-end of the curve. Mortgage and CMO markets crash. Kidder Peabody is sold

March 1995: U.S. dollar crashes. Central banks intervene to support the dollar with large operations

March 1996: Large employment number triggers a sell-off across the entire yield curve

March 1998: General market sell-off at the beginning of the month

Feb/Mar 1999: Bond market experiences a series of 1 point drops

March 24, 2000: NASDAQ (technology) market reaches a peak and begins major decline

March 2001: Sell-off in U.S. stock market after Fed fails to cut rates aggressively

March 2003: After Iraq War starts, bond market sells-off considerably

March 2005: After poor earnings from General Motors, corporate and emerging markets bonds sell-off

Feb/Mar 2007: Stock sell-off in China sparks global sell-off, flig ...

India: "No Toilets, But We'll Send Rockets Into Space"

Via Jayant Bhandari of Acting-Man.com,

India's Currency Ban - Part X

It has now been four months since Narendra Modi declared about 86% of monetary value of currency illegal. Linked here is the last in my series of updates, which was written soon after the deadline to deposit the demonetized currency. Most of the banned currency was eventually deposited, making a mockery of Modi, who had claimed that unaccounted money would not reach the banks. Perhaps 3% of the cash never reached the banks.

A cunning plan unravels

Those living outside India still have the option to return to the country, complete a number of formalities at the airport, and then hope that India's central bank, the Reserve Bank of India (RBI) will do the conversion.

Many of these people are unfortunately return empty-handed. In India, where stamps, signatures of bureaucrats, file-passing, attesting of documents, etc. go with everything, a lot of submitted paperwork is deemed incomplete by the RBI.

India's narrow money supply M1 has collapsed from 28.42 trillion rupees in September of 2016 to just slightly above 20 trillion rupees in December. This makes recently reported GDP growth data (se ...

U.K. Economy Bucks Brexit, But Don't Tell the Pound

The U.K. economy has performed much better than expected, but the government's budget still strikes a cautious tone.

Why Reaping IPO Riches Isn't a Snap

Investors wondering whether Snap is the new Facebook appear to have gained a healthy dose of skepticism. If history is any guide, that is the right response.

Can Adidas Keep Crushing Nike?

After a year of taking market share from its U.S. rival, shares in the German sneaker company come with the curse of high expectations.

Personal Finance Daily: You can invest based on your political and societal beliefs and why you shouldn't lie on your taxes

Wednesday's top personal finance stories

Trump Today: Trump Today: President talks infrastructure with Elon Musk

President Donald Trump met with business leaders including Elon Musk on Wednesday, talked about prescription drugs with a key Democratic lawmaker and hosted conservatives at the White House for a discussion about health care.

Express shares slide to record low after first-quarter outlook disappoints

Teen retailer's shares fall 12% to the lowest level since the company went public in May of 2010.

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Earnings Summary for Today

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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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