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07Apr2017 Market Update: US Stock Markets Have Been Trading Sideways And Are Expected To Continue Into The Closing Bell, The US Dollar Index Has Risen Sharply And The WTI Crude Remains Stable In The Low 52 Handle

Written by Gary

Wall Street lumbers along this Friday afternoon (SPY -0.03), mostly sideways repeating yesterday's lackluster trading performance. The unemployment rate ticked down to 4.5% from 4.7%, while the labor force participation rate remained at 63%.

Here is the current market situation from CNN Money

North and South American markets are broadly higher today with shares in Brazil leading the region. The Bovespa is up 1.43% while Mexico's IPC is up 0.48% and U.S.'s S&P 500 is up 0.02%.

Traders Corner - Health of the Market

Index Description Current Value Members Sentiment: % Bullish (the balance is Bearish) 65%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 39%
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.

22.52 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 $OEXA200R rises above 65%
Secondary Bullish Indicators:
a) RSI is POSITIVE (above 50)
b) Slow STO is POSITIVE (black line above red line)
c) MACD is POSITIVE (black line above red line)
84% NYSE Bullish Percent Index ($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 23.37 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 87.34 NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 11,465

Stocks hold mostly flat after Syria attack and mixed jobs report

What Is Moving the Markets

Here are the headlines moving the markets.

Weather dampens U.S. job growth; unemployment rate dives to 4.5 percent

WASHINGTON (Reuters) - U.S. job growth slowed sharply in March amid continued layoffs in the retail sector, but a drop in the unemployment rate to a near 10-year low of 4.5 percent suggested labor market strength remained intact.

Murdoch's Fox wins EU approval to take over Sky

BRUSSELS/LONDON (Reuters) - The European Commission cleared Rupert Murdoch to take over pay-TV group Sky on Friday, leaving a British investigation into the impact on the country's media landscape as the only remaining hurdle for the $14.5 billion deal.

Safe-havens up on missile strike; weak data drags banks

(Reuters) - U.S. stocks were little changed in choppy trading on Friday after a U.S. missile strike on Syria sent investors scurrying to safe-havens, while weak jobs data weighed on financial stocks.

Exclusive: Yum's KFC to curb antibiotic use in the chickens it buys

LOS ANGELES (Reuters) - Yum Brands Inc's U.S. KFC chain plans to curb the use of antibiotics in its chicken supply, making it the last of the big three chicken restaurants to join the fight against the rise of dangerous antibiotic-resistant bacteria known as superbugs.

Deutsche Bank CEO says shrinking is over, targets prudent growth

FRANKFURT (Reuters) - Deutsche Bank's Chief Executive said on Friday the era of downsizing Germany's flagship lender was over, after completing an 8 billion euro capital increase to pay legal penalties, keep regulators happy and make fresh investments.

BMO Financial Group promotes COO White to CEO role

(Reuters) - Bank of Montreal , Canada's fourth-biggest lender, said on Friday its Chief Operating Officer Darryl White will step up to be chief executive in November, succeeding Bill Downe who will retire.

Proxy adviser ISS urges votes against most of Wells Fargo board

BOSTON (Reuters) - Influential proxy adviser Institutional Shareholder Services recommended investors vote to replace the majority of directors at Wells Fargo & Co in the wake of the bank's phony-account scandal.

U.S. South, not just Mexico, stands in way of Rust Belt jobs revival

MOBILE, Ala. (Reuters) - In the years since the 2008 financial crisis, this southern U.S. port city has attracted a new Airbus factory, seen its steel industry retool, and gained thousands of jobs building the Navy's new combat vessel.

Hyundai, Kia to recall nearly 1.5 million vehicles over engine issue

SEOUL (Reuters) - Hyundai Motor Co and Kia Motors Corp said on Friday they plan to recall nearly 1.5 million vehicles in the United States and South Korea due to engine issues, the latest blow for two firms already struggling in key markets.

Neil Gorsuch Officially Confirmed To The Supreme Court

Update: After weeks of endless rhetoric and party bickering over the controversial usage of the 'nuclear option', Neil Gorsuch has officially been confirmed to the Supreme Court of the United States with a largely partisan vote of 54-45.


* * *

Following a series of procedural votes yesterday to invoke the so-called 'nuclear option', the Senate is expected to vote shortly to confirm Neil Gorsuch as the 113th justice to serve on the Supreme Court.

Given the rule changes implemented yesterday, Republicans require only a simple majority vote to confirm Gorsuch, and with Republicans holding a 52-48 majority in the Senate, today's vote is all but a foregone conclusion. And while it will mostly be a partisan vote, 3 Democrats are also expected to support Gorsuch for a final vote tally of 55-45.

The official roll call can be watched here:

* * *

Here is our summary from yesterday on the Senate's move to invoke the 'nuclear option':

In a historic vote, Senate Republicans on Thursday crushed "a Democratic blockade" - in Reuters' words - of Trump's Supreme Court nominee Neil Gorsuch, in a fierce partisan brawl, approving a rule change dubbed the "nuclear option" to allow for conservative judge Neil Gorsuch's confirmation by Friday.

The Senate voted 52-48 along party lines to repeal a rule allowing filibusters against Supreme Court nominees,invoking the so-called nuclear option, and clearing the way for Gorsuch confirmation who n ...

Atlanta Fed Slashes Q1 GDP To Just 0.6%, Lowest In Three Years

Remember when the Fed was "data dependent"? Well, if the Atlanta Fed is right, Janet Yellen will have hiked the Fed's interest rate in a quarter in which GDP has grown by a paltry 0.6%, down from 1.2% as of its latest estimate. If confirmed, this would be the lowest quarterly GDP growth in three years, since Q1 of 2014.

Incidentally, just over two months ago, the same forecast stood at 3.4%, it has since fallen by over 80%.

From the source:

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2017 is 0.6 percent on April 7, down from 1.2 percent on April 4. The forecast for first-quarter real GDP growth fell 0.4 percentage points after the light vehicle sales release from the U.S. Bureau of Economic Analysis and the ISM Non-Manufacturing Report On Business from the Institute for Supply Management on Wednesday and 0.2 percentage points after the employment release from the U.S. Bureau of Labor Statistics and the wholesale trade release from the U.S. Census Bureau this morning. Since April 4, the forecasts for first-quarter real consumer spending growth and real nonresidential equipment investment growth have fallen from 1.2 percent and 9.7 percent to 0.6 percent and 5.6 percent, respectively.


And now back to those "animal spirited" soft surveys which have also been sliding in the past few months.


IMF De-Cashing: Soft-Selling Financial Enslavement

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Italy's Target2 Deficit Hits Fresh All Time High, Above 25% Of Italian GDP

This morning, the Bank of Italy reported that Italy's Target 2 deficit rose to new highs in March at 420bn, from 386bn in February. As a way of comparison, during the peak of the EU Sovereign crisis in 2012 crisis, Italy's liabilities stood at Eur 290bn.

As Francesco Filia of Fasanara Capital notes, while we are told that record T2 balances are pure accounting values and should be viewed as a benign by-product of the decentralized implementation of the asset purchase program (APP) rather than renewed capital flight, and while Draghi refers to them as a form of solidarity within the European system, in a letter to Italian EU politicians Draghi also maintained that such debts should be settled in full should Italy decide to leave the euro. So, the number matters and represents a liability.

Target II liabilities are now above 25% of GDP In Italy (from 22% in January), and above 30% of GDP in Spain.

Similarly to what happened in 2012, it is imaginable for Germany to soon start to feel uncomfortable with such levels of exposure and demand more vocally a reversal of the trend. At the time, it sufficed for Draghi to cheap talk about the 'irreversibility' of the EUR for the trend to reverse. In contrast, this time around, the ECB is tapering, on the presumption of economic growth to take firm hold, and on evidence of inflation having resurfaced. Tapering can be seen as a way to reverse those Target II flows, or at least prevent them from ri ...

Samsung Is Cashing In on Its Chips

Korean technology giant Samsung has emerged from a tricky year in good shape, and the good news is set to continue.

War on Pay: Investors Are Right to Revolt Against Boardroom Excess

Norway's huge oil fund is the latest to take aim at complicated pay deals that don't reflect performance.

Global Bonds: Bears and Bulls Fight Over Scraps

Bonds unsurprisingly gained as news of the U.S. strike on Syria emerged. But the longer-term outlook points to disappointing returns.

31 March 2017: ECRI's WLI Growth Index Degradation Continues

ECRI's WLI Growth Index which forecasts economic growth six months forward remains in positive territory for the 54th week - after spending the previous 35 consecutive weeks in negative territory. This is compared to RecessionAlerts similar weekly leading index. ECRI also released their inflation index.

Capitol Report: Trump economy starting to look like same-old, same-old

Despite Trump administration pledges promises from the early days of the The U.S. economy is starting to look like reruns of 2014 and 2016 when growth struggled out of the gate and had to scrape and claw just to return to a 2% annual growth rate for the year.

Who's in the room as Trump is briefed on Syria strike

A photo tweeted out by White House press secretary Sean Spicer gives an unprecedented look at the key figures involved in the strike on Syrian targets.

'Sweden has been attacked': At least 3 dead in apparent Stockholm terror attack

At least three people in Stockholm have been killed and several injured after a truck ran into a crowd on a street in what the country's prime minister says has the indications of a terror attack.

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