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31Mar2017 Market Close: Wall Street Closes Lower As The Beat Of The Bears Drum Grow Louder, Crude Prices Edges Higher As The US Dollar Wallows In Volatile Trading

Written by Gary

The major US market indexes edged lower as anticipated earlier (SPY -0.3%), held down by Exxon and JPMorgan Chase. Investors are digesting the Fed's remarks that they could begin shrinking its $4.5-trillion balance sheet as soon as this year, earlier than most economists expect.

Todays S&P 500 Chart

Stocks close mixed but post strong quarterly gains; Nasdaq records best quarter since 2013

The Market in Perspective

Here are the headlines moving the markets.

Rock-solid quarter on Wall Street ending with a whimper

(Reuters) - Wall Street edged lower on Friday, held down by Exxon and JPMorgan Chase as investors wrapped up a strong quarter and weighed whether corporate earnings reports will justify the market's lofty valuations.

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.

Major internet providers say will not sell customer browsing histories

WASHINGTON (Reuters) - Comcast Corp, Verizon Communications Inc and AT&T Inc said Friday they would not sell customers' individual internet browsing information, days after the U.S. Congress approved legislation reversing Obama administration era internet privacy rules.

Snapchat adds more accessible search feature

(Reuters) - Snap Inc said on Friday its Snapchat messaging app would add an option for users to search through photos and videos that users have posted to the public.

BlackRock's active gambit ups pressure on rivals

NEW YORK/BOSTON (Reuters) - BlackRock Inc's decision to revamp part of its stock-picking business puts further pressure on active U.S. equity managers to cut fees, change products and merge to stem a relentless, 12-year decline in assets.

Fannie, Freddie may write down $21 billion due to U.S. tax cut: BMO

NEW YORK (Reuters) - U.S. mortgage finance giants Fannie Mae and Freddie Mac may write down $21 billion of tax-related assets if there is a deep cut in the federal corporate tax rate as promised by President Donald Trump, according to an analyst at BMO Capital Markets on Friday.

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.

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

NEW YORK (Reuters) - Oil prices fell on Friday after a three-day rally ran out of steam as a higher U.S. rig count signaled rising production from shale, contributing to the global supply glut.

Credit Suisse under fire as clients hunted for tax evasion

AMSTERDAM/ZURICH (Reuters) - Swiss bank Credit Suisse has been dragged into yet more tax evasion and money laundering investigations, after a tip-off to Dutch prosecutors about tens of thousands of suspect accounts triggered raids in five countries.

RBC Warns "Beware 'The April Effect'... Risk Of A Nasty 'Double Whammy'"

RBC's head of cross asset strategy Charlie McElligott dons his full wonksh equity analyst hat today, exposing "The April Effect," and the specific risk of "nasty double whammy" of levered long-short unwinds should momentum stall.

Quick note of warning as we transition into the new quarter, with potential for major thematic / sector / factor reversals in stocks. The following observation regarding April seeing a seasonal 'momentum' factor market-neutral strategy unwind is 'equities wonk-ish,' but with real potential cross-asset impact. As we know, the Fed watches equities because there are potential implications with regards to broad US 'financial conditions' on consumer and economic confidence. Thus, the scale of potential equities volatility does matter across macro, especially in light of general buyside portfolio 'crowding' / 'high beta' exposure (into 'growth' right now especially) which could exacerbate the dynamic.

COMMENTARY: I have been monitoring a phenomenon seen in recent years (notably of escalating 'violence') where 'momentum' factor market-neutral strategies experience tremendous volatility / drawdown. Huh? Basically this is saying that "the stuff that's been working" over the prior trail 12 months—both long and short—experiences a significant unwind. The Dow Jones Momentum M/N index has been -1.8% on average over the past five years and down -2.6% on average over the trailing 15 years...while the three year trailing average in the month of April is an absolutely b ...

Venezuela Bonds Crash As Political Situation Turns "Explosive"

Venezuela sovereign bonds crashed on Friday as a result of soaring political tensions after the annulment of the country's legislature by its high court on Wednesday, a move that ignited protests, invoked international condemnation and prompted the opposition to call for a military response to what it deemed a "coup."

One day after our report on the latest attempt by Maduro to seize unilateral control of the government and to isolate the opposition, the political situation turned "explosive" on Friday when Venezuela's powerful attorney general Luisa Ortega broke ranks with President Nicolas Maduro's government after the Supreme Court annulled congress, a rare show of internal dissent as protests and international condemnation grew. As a reminder, the pro-Maduro Supreme Court on Wednesday said it was assuming the legislature's functions because it was in "contempt" of the law. The opposition promptly slammed the decision as a "coup" against an elected body.

Luisa Ortega, appointed attorney general in 2007 and a staunch ally of the Socialists who have ruled for the last 18 years, made an unexpected ideological U-turn and rebuked the Supreme Court's controversial move to take over the opposition-led National Assembly's functions.

In a speech before reporters, Ortega said Wednesday's ruling against the congress "violates the constitutional order." She was speaking at a scheduled briefing on the state of her office. "It's my obligation to express my great concern to the country." Ortega added that she was speaking in the name of her office's 10,000 workers and 3,000 prosecutors. "We call for reflection, so that you take democratic paths that respect the constitution" and "guarantee peace," she said, receiving a standing ovation

At that moments, state television immediately cut off transm ...

American Healthcare - A Racket Of Rackets

Authored by James Howard Kunstler via Kunstler.com,

If you thought banking in our time was a miserable racket - which it is, of course, and by 'racket' I mean a criminal enterprise - then so-called health care has it beat by a country mile, with an added layer of sadism and cruelty built into its operations.

Lots of people willingly sign onto mortgages and car loans they wouldn't qualify for in an ethically sound society, but the interest rates and payments are generally spelled out on paper. They know what they're signing on for, even if the contract is reckless and stupid on the parts of both borrower and lender. Pension funds and insurance companies foolishly bought bundled mortgage bonds of this crap concocted in the housing bubble. They did it out of greed and desperation, but a little due diligence would have clued them into the fraud being served up by the likes of Goldman Sachs.

Medicine is utterly opaque cost-wise, and that is the heart of the issue. Nobody in the system will say what anything costs and nobody wants to because it would break the spell that they work in an honest, legit business. There is no rational scheme for the cost of any service from one "provider" to the next or even one patient to the next. Anyway, the costs are obscenely inflated and concealed in so many deliberately deceptive coding schemes that even actuaries and professors of economics are confounded by their bills. The services are provided when the customer is under the utmost duress, often life-threatening, and the outcome even in a successful recovery from illness is financial ruin that leaves a lot of people better off dead.

It is a hostage racket, in plain English, a disgrace to the profession that has adopted it, and an ins ...

The First Quarter is in the Books: Here Are the Winners and Losers

Year to date, the Dow is higher by 4.8%, S&P 500 +6% and the fag-heavy Nasdaq +10%. The top 5 performing sectors were Home Improvement stores ($BLDR, $LL, $LOW, $HD), Nuclear ($URRE, $UUUU, $UEC, $URG), Aluminum ($AA, $CENX), Semi Equipment ($AEHR, $LPTH, $COHU, $BRKS) and Hospitals ($CYH, $JYNT, $SSY, $THC)

The losers were Department Stores ($BONT, $JCP, $KSS, $SHOS), Oil and Gas Drillers ($NADL, $PACD, $PES, $BBG), Apparel Stores ($SMRT, $SSI, $CBK, $ASNA), Home Furnishing ($TPX, $FLXS, $HOFT, $ETH), Pollution and Treatment Controls ($CECE, $ERII, $HCCI, $FTEK).

The great thing about Presidential elections is the predictability of the policies and how they might affect share prices.

Take, for example, $PRSC. This is literally a play on American welfare and entitlements.

The Providence Service Corporation, through its subsidiaries, provides critical healthcare and workforce development services in the United States and internationally. It operates through three segments: Non-Emergency Transportation Services (NET Services), Workforce Development Services (WD Services), and Health Assessment Services (HA Services). The NET Services segment offers covered healthcare related transportation services for individuals with limited mobility and/or people with financial resources that hinder them from accessing necessary healthcare and social services. The WD Services segment offers workforce development and offender rehabilitation services, including employment preparation and placement, apprenticeship and training, and other health related services comprising employee assistance programs for unemployed, disabled, and unskilled individuals, as well as individuals coping with medical illnesses. The HA Services segment provides care optimization and delivery solutions, including comprehensive health assessments, as well as in-home and communi ...

Why Americans Aren't Spending Like They Used To

For many Americans, the big lesson from the financial crisis was that they needed to be more careful with their money. That pattern wasn't something they were going to unlearn just because of a changing of the guard at the White House.

YouTube May Need to Change its Tune

Google's embattled YouTube business could use all the friends it can get these days. In the music industry, it may need to buy some.

Westinghouse Bankruptcy Doesn't End Toshiba's Woes

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

April 2017 Economic Forecast: Outlook Continues to Improve Although Rate Of Improvement Slowing

Written by Steven Hansen

Econintersect's Economic Index improvement trend continues although the value remains in the territory of weak growth. The index remains below the median levels seen since the end of the Great Recession. Six-month employment growth forecast indicates modest improvement in the rate of growth.

Market Extra: Markets were full of green in the first quarter, with a few dashes of red

What gained in the first quarter of 2017? Nearly everything.

Market Extra: Dow's 4,440-point rally in a year and a half has Wall Street debating the stock market's next move

"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.

Commodities Corner: Gold, lumber buck rough first quarter for commodities

Year to date, natural gas, coal and oil are among the commodities that have suffered big declines, while lumber, lead, palladium, gold and silver are among notable gainers.

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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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