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31Mar2017 Market Update: US Stock Markets Trade Higher, But On A Sideways Path, Crude Prices Continue To Slip, US Dollar Weakens Fractionally, Rig Count Up Ten

Written by Gary

Wall Street opened lower, but has gained fractional traction as gains in Amazon kept the SP 500 and the Nasdaq in the positive territory. U.S. consumer spending barely rose in February amid delays in the payment of income tax refunds. Crude prices fell on Friday after a three-day rally ran out of steam.


Here is the current market situation from CNN Money

North and South American markets are mixed today. The Bovespa is up 0.41% while the S&P 500 gains 0.09%. The IPC is off 0.30%.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 61%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 48%
Investors Intelligence sets the breath Above 50 bullish 64%
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.

+32.77

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 $OEXA200R rises above 65%
Secondary Bullish Indicators:
a) RSI is POSITIVE (above 50)
b) Slow STO is POSITIVE (black line above red line)
c) MACD is POSITIVE (black line above red line)
85%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 66%
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 24.04
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 88.13
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 11,513

Looking at the last three columns (below), the first one (Actual), is what was reported this morning. The second column (Forecast) is what analysts had forecast and the third column is the previous report. Full calendar HERE.

Stocks hold mixed as financials lag; Nasdaq poised for best quarter since 2013

What Is Moving the Markets

Here are the headlines moving the markets.

S&P, Nasdaq edge up on last day of strong quarter

(Reuters) - Gains in Amazon kept the S&P 500 and the Nasdaq in the positive territory on Friday, while a drop in Exxon weighed on the Dow as investors assessed their positions at the end of a strong quarter.

Fed signals it could promptly start shedding bonds from portfolio this year

NEW YORK (Reuters) - The Federal Reserve could begin shrinking its $4.5-trillion balance sheet as soon as this year, earlier than most economists expect, New York Fed President William Dudley said on Friday in the central bank's most definitive comments on the question that looms over financial markets.

DuPont in asset deal with FMC, delays close of Dow merger

(Reuters) - DuPont said on Friday it would buy a unit of FMC Corp and sell its crop protection business to the company to win European Union approval for its merger with Dow Chemical , and delayed the deal's closing for the third time.

Comcast says it will not sell customer browsing histories

WASHINGTON (Reuters) - Comcast Corp said Friday it would not sell customers' individual internet browsing information, days after the U.S. Congress approved legislation reversing Obama administration era internet privacy rules.

Consumer spending slows, but inflation is rising

WASHINGTON (Reuters) - U.S. consumer spending barely rose in February amid delays in the payment of income tax refunds, but the biggest annual increase in inflation in nearly five years supported expectations of further interest rate hikes this year.

Oil retreats, set to become worst-performing asset in first quarter

NEW YORK (Reuters) - Oil prices fell on Friday after a three-day rally ran out of steam, as investors waited for U.S. rig count data that could provide further evidence that U.S. production is continuing to grow, contributing to a global oil glut.

Toshiba likely to miss quarterly earnings deadline for third time: sources

TOKYO (Reuters) - Toshiba Corp will likely miss a third deadline to report its quarterly business results, two sources told Reuters, forcing the Japanese conglomerate to ask for a fresh extension or face a possible delisting from the Tokyo Stock Exchange.

Boeing's newest, largest Dreamliner jet makes first test flight

NORTH CHARLESTON, South Carolina (Reuters) - Boeing Co's newest and largest Dreamliner model, the 787-10, took off successfully on its first flight on Friday, kicking off a flight test program for the high-tech jet.

EU offers Brexit trade talks, sets tough transition terms

VALLETTA/BRUSSELS (Reuters) - The European Union offered Britain talks this year on a future free trade pact but made clear in negotiating guidelines issued on Friday that London must first agree to EU demands on the terms of Brexit.

China's Record Iron Ore Glut: Enough To Build 13,000 Eiffel Towers

Earlier this week we discussed the reason for the recent drop in iron ore prices, which had been attributed to the discovery of massive data fabrication and misrepresentation of commodity production cuts in China (think OPEC), whose biggest steel-producing province was found lying about mandatory output reductions, and instead of curbing was in fact accelerating production.

A steel factory in Wu'an, Hebei province

As Reuters reported at the time, Hebei, China's biggest steel-producing province, launched a probe into steel overproduction in the city of Tangshan "amid concerns that firms have continued to raise output despite mandatory capacity cuts."

Tangshan is the heartland of Chinese steel production. The city is home to the headquarters of the state-owned Tangsteel Group, which in 2006 merged with other companies to form Hebei Steel Group, the second-largest steel producer in the world. Located around 100 miles east of the capital Beijing, Tangshan is on the frontline of the country's "war on pollution", and was seventh on the list of China's ten smoggiest cities in the first two months of this year.

Hebei was ordered by China's central government to investigate firms in Tangshan that have "restricted but not cut production, restricted production but not actually cut emissions, and cut capacity but actually increased output," the provincial dated March 25 said, and circulated by traders on Monday.

The notice, se ...

Morgan Stanley: Used Car Prices May Crash 50%

For months we've been talking about the massive lending bubble propping up the U.S. auto market. Now, noting many of the same concerns that we've highlighted repeatedly, Morgan Stanley's auto team, led by Adam Jonas, has just issued a report detailing why they think used car prices could crash by up to 50% over the next 4-5 years.

Here's the summary (flood of supply, poor lending standards and desperate OEMs who need to keep new car sales elevated at all costs):


Off-lease supply: This has already more than doubled since 2012 and is set to rise another 25% over the next 2 years.

Extended credit terms: Auto loans are at record lengths and lease assumptions (residuals, money factor) are at record levels of accommodation.

Rising rates: Starting from record low levels in auto loans.

Overdependency on auto ABS: The outstanding balance of auto securitizations has surpassed last cycle's peak.

Record high deep subprime participation: 32% of subprime auto ABS deals were deep subprime (weighted average FICO < 550) in 2016 vs. 5% in 2010.

Record high units of new car inventory: 2016YE unit inventory levels were near 10% higher than 2015YE, and are continuing to trend higher in 2017

OEM price competitio ...

Germany (DAX); Monster bullish breakout test in play, says Joe Friday

Below looks at the DAX index from Germany over the past decade. The DAX index looks to be creating a bullish continuation pattern, that the Power of the Pattern feels, is important to investors in Europe and the St

Senator Grassley Asks Why "Extremely Careless" Hillary Still Has Access To Classified State Dept. Info

Chuck Grassley, Chairman of the Senate Judiciary Committee, would very much like to understand why Hillary Clinton and 6 of her closest "research aides" may still have access to classified State Department information despite FBI Director Comey's assertion that they were "extremely careless in their handling of very sensitive, highly classified information."

And, after sending numerous requests to John Kerry's State Department that 'shockingly' fell on deaf ears, Grassely has sent a letter to Secretary of State Tillerson asking why Hillary's security clearance hasn't yet been revoked given that "any other government workers who engaged in such serious offenses would, at a minimum, have their clearances suspended pending an investigation."

I have repeatedly asked the State Department whether Secretary Clinton and her associates had their clearances suspended or revoked to which the Obama Administration refused to respond. Recently, the State Department informed the Committee that six additional Secretary Clinton staff at State were designated as her research assistants which allowed them to retain their clearances after leaving the Department.

Director Comey stated that Secretary Clinton and staff were "extremely careless in their handling of very sensitive, highly classified information" and "there is evidence of potential violations of the statutes regarding the handling of classified information..."

Any other government workers who engaged in such serious offenses would, at a minimum, have their clearances suspended pending an investigation. The failure to do so has given the public the impression that Secretary Clinton and her associates received special treatment.

Fox News c ...

Westinghouse Bankruptcy Doesn't End Toshiba's Woes

Shares of Japan's venerable Toshiba have been rallying, but there are plenty of uncertainties ahead.

South Africa: Big Political Challenge Could Present Opportunity

Investors have seen South African finance ministers come and go before. But their recent bullishness on emerging markets makes the firing of Pravin Gordhan a bigger challenge.

Fed Sees Car Trouble Down South

Delinquencies on auto loans are rising to worrying levels in some southern cities.

Americans rekindle their deadly love affair with salt

Consumers get most of their daily sodium from processed food and restaurant food.

Market Extra: As Dow rallies 4,440 points in year and a half, debate about path for stock market rages

"All you need in this life is ignorance and confidence, and then success is sure," according to the eminently quotable Samuel Clemens, aka, Mark Twain. That may be the dynamic Wall Street has been applying lately.

The Wall Street Journal: On Deck Capital pushed to explore sale, cut costs by activity investor

On Deck Capital is being pushed by an activist investor to cut costs and explore a potential sale or other alternatives to boost shareholder value.

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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