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24Apr2017 Market Update: DOW Up Triple Digits, WTI Crude Trading In The Low 49's, US Markets Trading Mostly Sideways, US Dollar In The High 98's

Written by Gary

Wall Street skyrocketed on the opening bell (SPY +1.0%), tracking a relief rally that swept through European and Asian stock markets, after Centrist candidate Emmanuel Macron won the first round of the French presidential election. Crude, Gold and the US dollar remain low.


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 1.13% while U.S.'s S&P 500 is up 1.00% and Mexico's IPC is up 0.89%.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 74%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 35%
Investors Intelligence sets the breath Above 50 bullish 64%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. +6.88
StockChart.com NYSE % of stocks above 200 DMA Index ($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 $OEXA200R rises above 65%
Secondary Bullish Indicators:
a) RSI is POSITIVE (above 50)
b) Slow STO is POSITIVE (black line above red line)
c) MACD is POSITIVE (black line above red line)
80%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 65%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 71%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 22.37
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 88.25
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 11,389

The market 'sits on a powerful time bomb' as French election gooses risk-on assets

Perhaps, but evidence is mounting that the end is near. Wolf Richter of the Wolf Street blog says the market "sits blithely on a powerful time bomb" and "no one knows the full magnitude, but it's huge." The time bomb he's referring to is the explosive growth of margin debt, a trend that eventually leads to a bloodbath.

What Is Moving the Markets

Here are the headlines moving the markets.

Congress returns as Trump pressures Democrats ahead of funding deadline

WASHINGTON (Reuters) - With a deadline looming this week to avert a U.S. government shutdown, Congress returns to work on Monday as President Donald Trump leans on Democrats to include funding for his promised border wall with Mexico in spending legislation.

Wall Street surges in relief rally after French vote result

(Reuters) - Wall Street surged on Monday, tracking a relief rally that swept through European and Asian stock markets, after Centrist candidate Emmanuel Macron won the first round of the French presidential election.

Halliburton gains from rising oil well completions in North America

(Reuters) - Halliburton Co said on Monday that oil producers are completing nearly as many wells as they are drilling, a major reversal from when companies left wells unfinished in anticipation of higher oil prices.

Supreme Court rejects GM bid to block ignition switch suits

(Reuters) - General Motors Co's bid to block hundreds of lawsuits, potentially worth billions of dollars, over a deadly ignition-switch defect broke down on Monday when the U.S. Supreme Court refused to hear its appeal claiming the suits were barred by the No. 1 American automaker's 2009 bankruptcy.

Tesla's big Model 3 bet rides on risky assembly line strategy

(Reuters) - Tesla Inc Chief Executive Elon Musk took many risks with the technology in his company's cars on the way to surpassing Ford Motor Co's market value. Now Musk is pushing boundaries in the factory that makes them.

Exclusive: Fresenius nears deal to acquire Akorn - sources

(Reuters) - German healthcare conglomerate Fresenius SE & Co KGaA is close to acquiring generic drugmaker Akorn Inc in an all-cash deal valuing the company at more than $4 billion, people familiar with the matter said on Monday.

PPG raises offer for Akzo Nobel to $29 billion

AMSTERDAM (Reuters) - U.S. paint maker PPG Industries raised its proposed offer for Akzo Nobel by about 8 percent to 26.9 billion euros ($28.8 billion) on Monday, increasing the pressure on its Dutch rival to enter into talks.

NASH: The next untapped pharma market gives investors many options

(Reuters) - Large drugmakers with piles of cash are on the hunt for promising medicines being developed by small companies to treat NASH, a progressive fatty liver disease poised to become the leading cause of liver transplants by 2020.

Luxury shoe brands Jimmy Choo and Bally put up for sale

LONDON (Reuters) - British luxury retailer Jimmy Choo has put itself up for sale to try to maximize shareholder value as majority investor JAB increases its focus on consumer goods.

Fox News Anchor Heather Nauert Named State Department Spokeswoman

Confirming a Bloomberg report from early March, on Monday the State Department issued a statement that Former Fox News anchor and correspondent Heather Nauert will be the new U.S. State Department spokeswoman.

"The Department of State is pleased to welcome Heather Nauert as the new State Department spokesperson," the announcement said.

"Nauert comes to the department with more than 15 years of experience as an anchor and correspondent covering both foreign and domestic news and events, including the 9/11 terror attacks, the war in Iraq, and the genocide in Darfur, Sudan. Heather's media experience and long interest in international affairs will be invaluable as she conveys the administration's foreign policy priorities to the American people and the world."

Taking the job that CNBC's John Harwood would have been delighted to land had Hillary Clinton won, Nauert reportedly accepted the job last month although it was not confirmed until now.

Nauert has been a news anchor on "Fox & Friends" since 2012 and has been with the Fox News and local New York Fox affiliate Fox-5 for most of the past 20 years, save for a two-year stint at ABC News from 2005-2007. Before announcing his candidacy, President Trump had appeared on the Fox morning show as a weekly guest over the course of several years.

During a recent press conference, Trump specifically praised "Fox & Friends" for having "very honorable people."

Nauert's hiring would represent the second Fox journalist to jump to the State Department recently. Jonathan Wachtel, who served ...

Despite "Mega-Relief-Rally", RBC Warns Beware "The Reflation Trap"

The most widely-expected "base-case" outcome of the first round of the French election occurred... and yet, as RBC's head of cross-aset strategy Charlie McElligott notes, risk-markets have still screamed-higher in comedic relief rally fashion.

Why?

McElligott write, this sounds obvious, but two points:

1) the hedging-flows into the event-risk now come off (i.e. Japanese owners of OATs punting on their EURJPY downside hedges, thus EURJPY +2.7% on day as an example) and

2) we now see general investors 'unshackled' and able to add exposure to the region in what has rapidly become the world's favorite risk-region.

But, now is where it gets interesting though, as the 'risk-ON' / 'bond bear' catalysts by-and-large are again being priced back into the market, with little thought of downside. This is where expectations are again ripe for an overshoot.

So taking a step back from Euro-phoria for a hot-second...I wanted to touch on a concept that Mark and I have been discussing / working-on - this idea of a tactical "US reflation trap."

This move higher in rates is playing-out exactly as we expected and spoke to last week: the squeeze / capitulatory 'force-in' to that 2.15-18 level, then followed by a double-whammy of 1) event- / geopolitical- risk fade (France, Syria / Russia, and China now 'handling' NK) and 2) new hope on Trump fiscal progress (tax plan roll-out and 'trending' Freedom Caucus support of new ACA repeal & ...

The REAL New World Order

Interested in precious metals investing or storage? Contact us HERE ...

French Election Result Helps Euro Slip Political Shackles

When it comes to the euro, what doesn't kill it should make it stronger. The existential threat posed to the single currency by the French elections has faded. The focus should move to the economy and the European Central Bank.

French Election Results Let Markets Breathe---For Now

With political risk receding, Europe will look more attractive for investors than it has for some time. How much markets rally in response will be a measure not just of how scared investors were about France, but could reveal what deeper worries remain on the horizon.

What Credit Suisse Needs to Get Investors Back on Side

Europe's investment banks need a big first quarter, none more so than Credit Suisse, where tensions have grown over bonuses and performance.

Market Extra: European bank stocks ride to 16-month high on French election-relief rally

The Stoxx Europe 600 Bank Index charges to a 16-month high Monday, as investors cheered the prospect of market-friendly Emmanuel Macron becoming France's next president.

MarketWatch First Take: Trump and Macron share more in common than either would care to admit

The obvious French presidential candidate to compare with Donald Trump would be Marine Le Pen. But maybe not the only one, writes Steve Goldstein.

Sears tops list of retailers most vulnerable to defaulting on debt

Department store chain has raised its cost-savings target for 2017 and is evaluating offers for its real estate.

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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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