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09Mar2017 Market Close: Wall Street Closes Up, But Flat As Confused Investors Try To Understand Trump's Economic Plans, More Than Likely A Fed Rate Increase And Slipping Crude Prices

Written by Gary

US stocks dipped this afternoon as another drop in oil prices weighed on energy shares while financial shares pared some of their early gains. US markets enjoyed a short run in the green before turning down and closing flat.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

After Snap IPO, U.S. regulator questions unequal voting rights

WASHINGTON/BOSTON (Reuters) - One of two current members of the U.S. Securities and Exchange Commission raised questions on Thursday for companies like Snap Inc that offer shareholders unequal voting rights, saying the agency should "focus on how some innovations may prove detrimental to investors."

Bill Gross says investors should not be 'allured' by 'Trump bull market'

NEW YORK (Reuters) - Bond investor Bill Gross warned on Thursday that investors should not be tempted into buying high-flying equities and corporate bonds, given the possibility that U.S. President Donald Trump might fail to enact policies that fuel economic growth.

U.S. weekly jobless claims rise; layoffs fall in February

WASHINGTON (Reuters) - The number of Americans filing for unemployment benefits last week rebounded from a near 44-year low, but the labor market continues to tighten amid a sharp drop in job cuts in February.

Wall Street slips as energy shares fall further; banks pare gains

(Reuters) - U.S. stocks dipped Thursday afternoon as another drop in oil prices weighed on energy shares while financial shares pared some of their early gains.

Oil drops to lowest since OPEC deal, U.S. crude below $50/bbl

NEW YORK (Reuters) - Oil fell about 2 percent on Thursday, extending the previous session's slump to prices not seen since an OPEC-led pact to cut production was agreed, as record U.S. crude inventories fed doubts about the effectiveness of the deal to curb a global glut.

Top investors to back Deutsche Bank despite uncertain future

FRANKFURT (Reuters) - Deutsche Bank's top three investors, who together own almost 20 percent of its stock, are likely to back its latest capital hike, people familiar with the matter said, although smaller shareholders are skeptical about its turnaround plan.

On the stand, Corzine defends bet that led to MF Global demise

NEW YORK (Reuters) - Former New Jersey Governor Jon Corzine defended his big bet on European sovereign debt that was a major factor in the collapse of his company MF Global Holdings Ltd, and said the auditor of the futures and commodities brokerage should have flagged any accounting problems.

AIG CEO to resign in wake of loss, successor unclear

(Reuters) - American International Group Inc said on Thursday its Chief Executive Peter Hancock will step down, a decision he made after poor financial performance frustrated shareholders and the insurer's board of directors.

Bayer, Monsanto start $2.5 billion asset sale to get merger clearance: sources

FRANKFURT (Reuters) - German drug and crop chemical maker Bayer and U.S. seeds company Monsanto are launching asset sales worth roughly $2.5 billion as they seek regulatory clearance for their $66 billion merger, people close to the matter said.

3 Key Risk On/Off Barometers Turning Down?

Via Dana Lyons of The Lyons Share,

The following post originally appeared as a premium article on The Lyons Share on March 7, 2017.

A trio of metrics that normally fare well in good markets are faltering; but how serious is it?

We've been talking about a few sneaky barometers of "risk on/risk off" markets for a few weeks now. To clarify, stocks typically rally, and on firm footing, when these metrics are favorable as they indicate the willingness of investors to take on risk. And when they are fading, stocks tend to suffer, or are at least more vulnerable to weakness, as investors shy away from risk-taking. We have been discussing some of these risk on/off barometers lately (mainly in our daily strategy videos) because they have been threatening to switch to the "off" position. Action in the past few days has cemented that notion. Let's take a look at the 3.

Small-Cap Pure Value Stocks

The first is the S&P Small-Cap Pure Value Index (SPSPV). As we have discussed, this index typically has the highest beta of any of the market cap style categories. Therefore, during favorable markets, such as the initial post-election rally, the SPSPV will generally lead as it did in November — to the tune of about 30% in a month. Since topping in December, however, the index has been pulling back, indicating perhaps a less-sustainable rally in stocks over the past few months.

As we mentioned in a post on February 1, the SPSPV had pulled back enough that it was testing what we viewed as a significant confluence of support, including:

It Took $4 In New Debt To Create $1 In GDP

Bill Gross' letter discussing the credit deluge hitting the US came out at a convenient time: just as the Federal Reserve released its latest Flow of Funds report, which while most track to show the change in average household net worth - which is almost entirely a function of the stock market - we find it far more valuable for its nuanced information on the breakdown of US debt. And while it showed that in the fourth quarter, the net worth of US residents, mostly the wealthy ones as the bulk of financial assets is held by a small fraction of the total population, rose by $2 trillion to $92 trillion mostly as a result of a $1.5 increase in financial assets....

... we were more interest in the aggregate picture.

It wasn't pretty.

As a reminder, according to the latest BEA revision, nominal 2016 GDP was $18.86 trillion, an increase of $632 billion from 2015; the question is how much credit had to be created to generate this growth. Well, according to the Z.1, total credit rose to a new record high $66.1 trillion. This was an increase of $2.511 trillion in the past year. It means that in 2016, it "cost" $4 in new debt to generate just $1 in new economic growth!

Canada's New Blasphemy Laws

Via Khadija Khan of The Gatestone Institute,

Although these motions against "Islamophobia" are not legally binding, extremists have already started demanding them as laws.

People in hostile societies put their lives at risk by speaking against the majority; meanwhile, shutting out any criticism against hardliner behaviour in the West actually means giving extremists a license to keep on committing atrocities.

Motions such as these are how most Muslim societies -- and other authoritarian states -- were founded: by depriving citizens of the basic right to express a difference of opinion, and worse, on the pretense of "doing good." The blasphemy laws of Pakistan were introduced on the premise of protecting the sanctity of the people's religious beliefs, but the laws only ended up meting out public death sentences to innocent and marginalized victims.

A resolution, M-103, seeking to condemn so-called "Islamophobia," was introduced a few weeks ago in the peaceful country of Canada by Liberal Party MP Iqra Khalid in the House of Commons, sparking a controversy.

A similar motion, labelled M-37, was later tabled in the Ontario provincial legislature by MPP Nathalie Des Rosiers on February 23, 2017, and was passed by the provincial parliament.

M-37, like its predecessor, demanded that lawmakers condemn "all forms of Islamophobia" and reaffirm "support for gove ...

AIG Needs a New Boss, But at Least It Has a Plan

The insurer 's turnaround strategy was undermined by basic underwriting mistakes.

Jobs Report: Wages Will Set the Tone for Fed

Friday's jobs report shouldn't prevent the Federal Reserve from raising interest rates at next week's meeting.

Stock Buybacks Are So Yesterday

Companies are acting like there are better things to do with their money than buy back their shares.

Market Extra: S&P 500 and Dow have gone 102 days without a 1% drop

Buoyancy. That is what this indefatigable equity market has come to be known for over a four month stretch that has failed to yield a decline of at least 1% for either the S&P 500 or the Dow Jones Industrial Average.

Capitol Report: How low are layoffs? Lowest since Vietnam war

The U.S. economy isn't growing as fast as it once did, but most Americans are now more secure in their jobs than any time since the Vietnam War. Let's take a look.

Marathon Oil is a bright spot in oil stocks after Permian Basin buy

Marathon Oil buys a slice of West Texas' oil promise, and Wall Street rewards it.

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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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