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05Apr2017 Market Update: DOW Up Triple Digits, Wall Street In Good Spirits For Now, Doubts Remain About Trump Xi Meeting

Written by Gary

US stock indexes rose moderately (SPY +0.7%) in a broad-based rally, spurred by a blowout private employment data (ADP) that reinforced the strength of the economy. The Dow rose triple digits (165 points), Nasdaq hits all-time high after the strong ADP report.

Here is the current market situation from CNN Money

North and South American markets are mixed. The S&P 500 is higher by 0.69%, while the Bovespa is leading the IPC lower. They are down 0.18% and 0.05% respectively.

Traders Corner - Health of the Market

Index Description Current Value Members Sentiment: % Bullish (the balance is Bearish) 63%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 48%
Investors Intelligence sets the breath Above 50 bullish 64% 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.

+18.67 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 $OEXA200R rises above 65%
Secondary Bullish Indicators:
a) RSI is POSITIVE (above 50)
b) Slow STO is POSITIVE (black line above red line)
c) MACD is POSITIVE (black line above red line)
87% NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 66% S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 74% 10 Year Treasury Note Yield Index ($TNX) ten year note index value 23.64 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 88.20 NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 11,525

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.

What Is Moving the Markets

Here are the headlines moving the markets.

Solid ADP data propels Wall Street rally; Nasdaq at new high

(Reuters) - U.S. stocks rose on Wednesday in a broad-based rally, spurred by a blowout private employment data that reinforced the strength of the economy.

Taser changes name in shift to software, police services

SAN FRANCISCO (Reuters) - Taser International Inc , maker of the eponymous device used by police to stun and incapacitate a person temporarily, is changing its name to Axon as it pushes further into the software business.

Monsanto second-quarter profit jumps on strong demand for seeds

CHICAGO (Reuters) - U.S. seeds and agrochemicals company Monsanto Co , which is in the process of being bought by Germany's Bayer AG for $66 billion, reported a better-than-expected quarterly profit on Wednesday, helped by strong demand for its soybean and corn seeds.

EU clears ChemChina's $43 billion takeover of Syngenta with conditions

BRUSSELS (Reuters) - ChemChina [CNNCC.UL] won conditional EU antitrust approval on Wednesday for its $43 billion bid for Swiss pesticides and seeds group Syngenta , a deal that could help China boost its domestic agricultural output.

VW's Audi and Porsche to join forces on vehicle development

FRANKFURT (Reuters) - Volkswagen Group's Audi and Porsche brands will join forces on vehicle development, the two upmarket brands said on Wednesday, to help the world's largest carmaker save money in the wake of its costly emissions test cheating scandal.

Wells Fargo's aggressive sales tactics hit small firms: WSJ

(Reuters) - Wells Fargo & Co has restructured its credit card processing business after an internal probe found some employees had falsely reported customer sales numbers, the Wall Street Journal reported on Wednesday.

U.S. companies hire most workers in over two years: ADP

(Reuters) - U.S. companies added 263,000 workers in March, the most since December 2014, suggesting further tightening of the labor market, payrolls processor ADP said on Wednesday.

Toshiba fired Westinghouse chairman two days before bankruptcy filing

TOKYO (Reuters) - Toshiba Corp sacked Westinghouse Electric Co's chairman two days before the U.S. nuclear engineering subsidiary filed for bankruptcy protection last week, as the Japanese firm tries to draw a line under the travails of a business that has cost it billions of dollars.

Swiss making progress in 1MDB case despite Malaysia's silence: top prosecutor

BERN (Reuters) - Swiss Attorney General Michael Lauber said on Wednesday that his money laundering investigation into Malaysian fund 1MDB was making progress despite Malaysian authorities' refusal to cooperate.

Trump Meets Xi: Goldman Previews This Week's Main Event

With Trump set for his most important meeting with a foreign leader tomorrow,, when he will meet China's president Xi Jinping at Mar-A-Lago, Goldman's Alec Philips lays out the agenda for what to expect and key deliverables from tomorrow's meeting.

* * *

Markets are focused on the meeting this Thursday and Friday between US President Trump and Chinese President Xi, which stands as a key event in a vital global bilateral relationship--between the two countries that represent the world's two largest economies and two largest militaries. The meeting will mark the start of a new US-China dialogue but, in our view, the probability of significant breakthroughs seems low in light of the still-evolving nature of the Trump Administration's policy toward China and the limited amount of interaction to date. Indeed, comments from senior officials at a White House press briefing held yesterday described it as an "introductory meeting" and an opportunity to "set a framework for discussions on trade and investment", and indicated that "President Trump really views this meeting as a first step".

President Trump has signaled a desire to fundamentally shift aspects of the relationship, particularly regarding economic and trade-related issues. Chinese policy has become increasingly assertive, both economically and geopolitically, but in light of upcoming leadership changes ahead of this autumn's 19th Party Congress, President Xi is apt to be keen to preserve aspects of the status quo and avoid disruptive changes.

This meeting is also notable for its timing, as it comes much earlier than comparable US-China meetings in new administrations, which have tended to occur in the fall of the inaugural year; in the last three US administrations, the initial meetings occurred in November 1993, October 2001, and November 2009, for example. Unlike some of these prior meetings, at this early stage the Trump Administra ...

Productivity Myths Shattered: Is Productivity Rising Or Falling? Why?

Authored by Mike Shedlock via,

The debate over productivity rages on. Some believe productivity is understated. Others believe it is overstated.

Janet Yellen believes a lack of strong productivity gains may be responsible for tepid wage gains.

Financial Times writer Edward Luce is confused, as are many others. Luce discusses The Mystery of Weak US Productivity.

Osborne on Productivity

In 2105, then UK chancellor George Osborne made boosting UK Productivity a Priority.

"Let me be clear: improving the productivity of our country is the route to raising standards of living for everyone in this country," he said. "Our future prosperity depends on it."

Greenspan on Productivity

In an Interview with Gold Investor Alan Greenspan blamed the aging of baby boomers.

We have been through a protracted period of stagnant productivity growth, particularly in the developed world, driven largely by the aging of the 'baby boom' generation. Social benefits (entitlements in the US) are crowding out gross domestic savings, the primary source for fund ...

Steve Bannon Removed From Trump's National Security Council

In what the biggest shake-up at the White House since Mike Flynn resigned in February, moments ago Bloomberg reported that President Trump has reorganized his National Security Council on Wednesday, removing his chief strategist, Stephen Bannon as well as downgrading the role of his Homeland Security Adviser, Tom Bossert, while elevating national intelligence director, Dan Coats, and the chairman of the Joint Chiefs of Staff, Marine Corps General Joseph Dunford, who will again be "regular attendees" of the NSC's principals committee.

According to Reuters, Bannon's removal from the NSC was seen as a boost to national security adviser H.R. McMaster, who officials said has struggled to work together with Bannon.

McMASTER has made it clear inside WH that he wants NSC to be non-political, especially as he crafts NSC strategy for admin...

— Robert Costa (@costareports) April 5, 2017

Wednesday's change means Mr. Bannon is no longer part of the NSC. He is still permitted to attend such meetings but won't automatically be invited to each one.

The WSJ adds that "the decision to boot Bannon was made by Trump's new national security adviser, Lt. Gen. H.R. McMaster" while another senior administration official said Mr. Trump "signed off on all the ch ...

Are Mexico's Oil Reserves Almost Depleted?

Submitted by OilPrice

Mexico's oil and gas regulator said last week that the country's proved hydrocarbon reserves will drop by 10.6 percent in 2017. This forecast, coupled with the lower oil production that state company Petroleos Mexicanos (Pemex) reported for yet another year in 2016, is painting a rather bleak picture of Mexico's reserves.

Without resumption in investments and more drilling, and if no significant finds occur, Mexico will be running out of reserves within 9 years, according to an official from the National Hydrocarbons Commission.

However, the energy reform that ended Pemex's monopoly and allowed foreign companies to invest in Mexico's oil exploration and production is expected to start yielding results by the end of this decade. The deepwater bidding round last December attracted major international oil companies, and Mexico awarded blocks to consortia including Chevron, Exxon, Statoil, BP, Total, and China Offshore Oil Corporation.

In addition, the analysts are now largely calling the end of the downturn and expect deepwater investment to pick up in coming years.

Mexico's National Hydrocarbons Commission said last week th ...

Activist Investors Find More Fertile Ground in Europe

Activist investing is on the rise in the old world, but local rules demand a local game plan.

Opportunity Lurks Where Markets Diverge From Real Economy

The first quarter highlighted the gap between eurozone economic and political risk. The second quarter will bring important answers.

Hard to Figure How Corporate Bonds Rally From Here

Corporate bonds have had a strong run in the past year. There is little room for further gains.

March 2017 ISM and Markit Services Show Slowing Services Sector

Written by Steven Hansen

The ISM non-manufacturing (aka ISM Services) index continues its growth cycle,but growth slowed 2.4 to 55.2 (above 50 signals expansion). Important internals were mixed. Markit PMI Services Index declined also but is close to no growth..

This country sent the most foreign fiancées to the U.S. in 2016

The number of fiancée visas issued to foreign nationals has tripled since the late 1990s.

Would you bank at the post office?

If post offices offered banking services, it might help lower-income Americans.

The Wall Street Journal: Mallinckrodt leaves industry group PhRMA, expecting new membership criteria

PhRMA may require members to conduct significant medical and scientific research.

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