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04May2017 Market Update: Wall Street Falls Sharply After WTI Crude Prices Slip Into The Mid 45 Handle, Analysts Say We Could See Crude Prices Fall Further

Written by Gary

US stock markets declined sharply as oil prices continue to plunge and energy companies take sharp losses. Wall Street pared losses after the initial waterfall plunge, but still remain in the red (SPY -0.1%).In early afternoon trading, health insurers are a bit higher and hospitals are lower.


Here is the current market situation from CNN Money

What Is Moving the Markets

Here are the headlines moving the markets.

Tech, energy stocks weigh on Wall Street

(Reuters) - U.S. stocks were little changed on Thursday as a decline in energy and technology stocks erased some of the early gains following the Federal Reserve's upbeat comments about the economy.

U.S. labor market tightening; productivity drops in first quarter

WASHINGTON (Reuters) - New applications for U.S. jobless benefits fell sharply last week and the number of Americans on unemployment rolls hit a 17-year low, pointing to a tightening labor market that could allow the Federal Reserve to raise interest rates next month.

Kraft Heinz to cut jobs, shutter factories under integration plan

(Reuters) - Kraft Heinz Co said on Thursday it would cut about 13 percent of its workforce, close factories and consolidate its distribution network as part of its efforts to merge Kraft Foods and H.J. Heinz.

Viacom beats estimates but faces distribution headwinds

(Reuters) - Viacom Inc , the owner of MTV, Comedy Central and Nickelodeon, reported second-quarter profit that beat estimates on Thursday, but worry that it will lose revenue from a big cable distributor weighed on its stock.

Automakers betting on Trump infrastructure boost: Toyota North America CEO

Saline, Mich. - (Reuters) - Automakers could be betting on a potential boost in demand from a new federal infrastructure program to boost sagging sales and clear inventories of cars and trucks, the head of Toyota Motor Corp's North American operations said on Thursday.

Wall Street earnings strength enliven investors, industrials a surprise

NEW YORK (Reuters) - U.S. companies are reporting their strongest profit and sales growth in more than five years this earnings season, with more beating expectations and particular strength in the industrial sector.

OPEC likely to extend output pact, bigger oil cut unlikely: delegates

LONDON/DUBAI (Reuters) - OPEC and non-OPEC oil producers look likely to extend their agreement to limit supplies beyond its June expiry to help clear a glut, three OPEC delegates said on Thursday, downplaying the chance of additional steps such as a bigger cut.

Airlines 'self-inflicted' problems under glare of U.S. Senate panel

WASHINGTON (Reuters) - Chicago Aviation Commissioner Ginger Evans on Thursday apologized for the behavior of employees who forcibly removed a United Airlines passenger at a U.S. Senate hearing on the industry's customer service failures.

How drugmakers face global push-back on high prices

LONDON (Reuters) - Pharmaceutical companies are under fire around the world as a wave of new treatments for cancer and other serious conditions reach the market at ever rising prices, and the pressure looks set to increase.

"Let's Get This F--king Thing Done!" Republicans Rejoice, But Senate Warns Healthcare Bill Won't Pass

Ahead of today's 1:30pm-ish vote on Obamacare, Republican representatives are positively giddy that they finally have internal consensus and, absent some catastrophic last minute hurdle, will finally pass the Republican healthcare bill, beginning the process of repealing and replacing most of Obamacare. As the Hill reports, the scenes this morning in the Capitol were nothing short of a pep rally.

Speaker Paul Ryan and his GOP leadership team held what amounted to a pep rally for rank-and-file members in the Capitol basement Thursday morning as they predicted victory in their push to repeal and replace ObamaCare. Leaders played the "Rocky" theme song as lawmakers walked into the meeting. Majority Leader Kevin McCarthy (R-Calif.) put an image of George S. Patton on the screen and read inspirational quotes from the general.

"Let's get this f--king thing done!" Rep. Martha McSally (R-Ariz.) told her colleagues, according to sources in the room.

As discussed previously, following several prominent flips among holdouts, the House is expected to vote shortly after 1pm on the GOP's healthcare bill, which has been stalled in the lower chamber ever since leaders yanked it off the floor six weeks ago. Top House Republicans predicted they had the 216 votes necessary to pass, touting the expected victory as a win for the GOP's vision on healthcare.

House Majority Whip Steve Scalise touted the previously reported exit by all insurers from Iowa as proof "this law is in a death spiral" adding that "our bill rescues familie ...

Dow Dumps To 10-Day Lows As VIX Tops 11

USDJPY is rolling over, VIX is spiking (well it's over 11), and Dow futures are down over 170 points from their overnight highs...

Caterpillar, Chevron, Apple, and Exxon are the biggest drags on The Dow...

Dow has erased its post-fed gains...

Black Gold Bloodbath - WTI Crude Crashes To $45 Handle, 9-Month Lows

"Someone's liquidating" warns one veteran energy trader as the sudden heavy volume surge to the downside in WTI crude futures smashes oil prices back to the lowest since August 2016.

Surging US crude production (once again to August 2015 highs)...

And demand forecasts are tumbling:

And loss of faith from the hedge fund community..

and this is what OPEC gets...

"Someone Is Blowing Up": RBC Warns China-Induced Unwinds Are Escalating

"Something is off," warns RBC's head of cross-asset strategy Charlie McElligott in the introduction to his latest market noting that the swing in US fiscal policy optimism is coming at a critical time as the China's liquidity tightening is spooking the reflation story.

SUMMARY:

Movement on US fiscal policy is currently driving US rates and equities higher, counteracting the tremendous negative implications of this 'Chinese tightening / deleveraging' story and the impact this is having upon commodities (industrial metals & crude) and thus, 'inflation expectations.'

'Connecting the dots' between the crude oil / commodities selloff and a strong (negative) reversal in 'mean reversion strategies' both cross- and inter- sector (energy) within equities, as well as notable drawdowns in 'momentum' market-neutral strategies over the past few weeks.

* * *

FISCAL POLICY OPTIMISM SWING COMES AT CRITICAL TIME, AS CHINA LIQUIDITY TIGHTENING STORY IS SPOOKING REFLATION:

The big +++ story overnight: Republicans are planning a 'make or break' vote on the ACA repeal today, as the GOP feels they now have the votes to pass the Trump campaign healthcare promise. This sudden swing to 'movement' / optimism speaks to the 'pessimistic overshoot' seen across the Street with regards to the consensually negative view on &lsquo ...

Tesla's "Anti-selling" Has Investors Selling

Tesla Inc.'s adoption of the soft sell ahead of its most important product yet raised a few eyebrows.

Iron Buckles Under Tighter Chinese Credit

Tough talk on curbing credit rippled through commodities markets Thursday. But the much more gradual slowdown in actual lending tells a different story.

The Curious Case of Converging Yield Curves

What's the difference between Europe and the U.S.? Not that much, to judge by one bond-market measure.

March 2017 Manufacturing New Orders Improve

Written by Steven Hansen

US Census says manufacturing new orders improved. Our analysis is that inflation eats half of any gains. The rolling averages improved.

The Wall Street Journal: Trump to visit Saudi Arabia, Israel, and the Vatican

President Donald Trump announced Thursday he plans to visit Saudi Arabia, Israel and the Vatican later this month.

The Tell: Ed Yardeni has a simple reason why stock-market investors are so relaxed

Economist Ed Yardeni recounts the panic attacks that have punctuated the current bull market and sees little reason for stock-market investors to fret

The Tell: 5 things you don't know about Marine Le Pen—'France's Trump'

With France's presidential runoff election just days away, right-wing candidate Marine Le Pen has become known all over the world, even as she is projected to lose. Here are five things that you might not know about the 48-year-old politician.

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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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