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10May2017 Market Update: Wall Street Temporarily Climbing Out Of Bear Territory, Crude Inventories Down, Another Session Going Nowhere

Written by Gary

US stocks slipped this morning, but have pared losses climbing into the green in afternoon trading (SPY +0.2%). Earlier, they were weighed down by a string of weak corporate earnings and investors turned cautious after Trump fired Comey. WTI crude is trading higher in the mid 47 handle and gold slipped to 1219.


Here is the current market situation from CNN Money

North and South American markets are mixed today. The Bovespa is up 1.40% while the S&P 500 gains 0.06%. The IPC is even.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 76%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 59%
Investors Intelligence sets the breath Above 50 bullish 64%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. -16.23
StockChart.com NYSE % of stocks above 200 DMA Index ($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. 66%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 72%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 23.94
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 90.40
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 11,593

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.

Snap's first earnings to shed light on battle with Facebook, Twitter

NEW YORK (Reuters) - Snap Inc has many similarities with archrivals Facebook Inc and Twitter Inc , but shareholders are eager to avoid one in particular when the social media company reports earnings on Wednesday for the first time since its initial public offering: a plunging stock price.

Wall St. weighed down by weak earnings, Comey sacking

(Reuters) - U.S. stocks slipped on Wednesday, weighed down by a string of weak corporate earnings, while investors turned cautious after President Donald Trump fired his FBI chief.

Rosengren maps out hawkish Fed plan for U.S. rates, portfolio

(Reuters) - The Federal Reserve should hike interest rates three more times this year and at the same time start shedding its bond holdings, a Fed policymaker said on Wednesday, mapping out a somewhat hawkish option for the U.S. central bank.

Protectionism off the agenda but high in minds at G7 finance meeting

ROME (Reuters) - Europe, Japan and Canada hope a G7 meeting in Italy this week will give them a better picture of U.S. President Donald Trump's direction on key policies that he has yet to spell out.

Petroleum, motor vehicles boost U.S. import prices

WASHINGTON (Reuters) - U.S. import prices increased more than expected in April amid rising costs for petroleum products and a range of other goods, which could help boost domestic inflation and keep the Federal Reserve on course for further interest rate hikes.

Mylan disagrees with FDA over generic Advair rejection

(Reuters) - Generic drug maker Mylan NV said on Wednesday it disagrees with the U.S. Food and Drug Administration, which declined to approve Mylan's generic for GlaxoSmithKline Plc's blockbuster Advair in March.

U.S. PPG says could walk away from bid for Dutch firm Akzo Nobel

AMSTERDAM (Reuters) - Paint maker PPG Industries said on Wednesday it could walk away from its pursuit of Dutch peer Akzo Nobel , which has rejected three takeover bids from the U.S. firm.

Value meals drive Wendy's profit, sales beat; shares soar

(Reuters) - Wendy's Co reported quarterly same-restaurant sales and profit that topped estimates, driven by the popularity of its value meals and lower costs, sending its shares to their highest in nearly a decade in morning trading on Wednesday.

BNY Mellon advances artificial intelligence tech across operations

NEW YORK (Reuters) - The Bank of New York Mellon Corp has developed and deployed automated computer programs, or more than 220 "bots", across its businesses over the past 15 months seeking more efficiency and lower costs, as the adoption of artificial intelligence technology in banking increases.

Trader: "Equities Are In A World Of Their Own"

"You know what made yesterday so much fun? For a brief window of opportunity we were able to envision a lot of green shoots globally and talk in the context of a whole set of crystal champagne flutes half-full. Which central bank might be the next one to surprise with a hawkish spin was actually a topic. Speculation, idle or not, on widespread retractions of liquidity was good news, not of that soul-crushing bad news is good news variety."

Frankly, writes former trader and Bloomberg editor Richard Breslow "it was the first time in a long time, I could say markets were compelling."

As Breslow notes, The dollar was up, as were sovereign yields. Gold was through an important first line of support and equities more than kept their composure. Fed speakers stayed on message, Draghi's speech today was eagerly awaited. Sterling held near recent highs as traders debated how many dissenters there might be at Thursday's MPC meeting over keeping rates on hold. And then events tried to conspire to rob me of all of my sanguineness.

As I read the comments from the North Korean ambassador and then the reactions to the news from Washington, I kept crooning, "Mama, don't take my rosy glasses away."

It strikes me that the bellicose comments amount to little. Been there done THAAD. The market reaction, modest as it was, was more an end of day squaring after nice moves than any sort of sea change of opinion.

Chats Won't Prove Intent in Gold, FX Manipulation Cases- Vince Lanci

Writing from the road. Author Vince Lanci originally on Marketslant.com We have written many times about manipulation in this column. We seek justice and fairness in the markets that we continue to consider "free". First some thoughts on the trail of trader-speak I've been pouring over recently. The takeaway is this: getting over the circumstantial evidentiary bar to be permitted to get to discovery was a big deal. Rosa Abrantes has done much to get these cases as far as she has. But now, forensic work at the operational level is needed. And it just is not easy to prove the cases. Now, even with chats and trade logs, the facts can almost never be known. Within the constraints of our legal system, it is much harder to prove manipulation then the plaintiffs would have you think. This refers to the precious metals cases, the current FX cases, and the pending treasury cases. We are now at the discovery level, thousands of documents with chats and messages back-and-forth between traders are available for the plaintiffs to review. This is great. But can the lawyers understand intent from written words? PROVING INTENT IS NOT EASY This is because the facts needed to prove "intent" are in the traders heads. And without intent you cannot win. In the three legged stool that is the legal system, intent is hardest leg to establish. I think "means, and opportunity" are the other 2. Trader conversations are not prose, to say the least. It is near impossible without inflection and confirmation in chats to determine, or differentiate sarcasm from sincerity. How can one divine intent from a chat where a trader alternately asserts he's infallibly correct in an opinion, and then laughs at himself for having such an outrageous opinion? No, the burden of proof that the plaintiffs must satisfy is very difficult in this circumstance. Note my own spelling in these very articles that the Soren K group posts. My own trading messages were difficult to t ...

Days Before He Was Fired Comey Asked For "Significant Increase" In Funds For Russia Probe; DOJ Denies

With the political punditry debating whether Trump's real motive to sack Comey was the FBI Director's escalating probe into Trump's ties to Russia, despite - as Trump stated in his letter to Comey - the president allegedly being assured three times there was no investigation - the NYT reported moments ago that Comey had requested a significant increase in funds and personnel in connection with the Russia probe just days before he was fired.

From the NYT:

Days before he was fired, James B. Comey, the former F.B.I. director, asked the Justice Department for a significant increase in money and personnel for the bureau's investigation into Russia's interference in the presidential election, according to three officials with knowledge of his request.

Mr. Comey asked for the resources during a meeting last week with Rod J. Rosenstein, the deputy attorney general who wrote the Justice Department's memo that was used to justify the firing of the F.B.I. director this week.

Mr. Comey then briefed members of Congress on the meeting in recent days.

To be sure, this completes the circle of theories presented earlier by Politico and WaPo, both of which suggested that the real reason behind Comey's termination was not disappointment over handling of the Hillary scandal, but self-preservation ahead of the Russian probe.

Predictably, the a DOJ spokeswoman flatly denied the Times' report on Wednesday:

Turkey Warns US Decision To Arm Kurd "Terrorists" Is A "Crisis", Gives Trump Chance To "Reconsider"

Following yesterday's news that the White House had radically changed its strategy involving Syrian military intervention, and that it had decided to provide weapons to Kurdish militants in the region, we were curious to see just how livid Turkey would be when it inevitably responded to Trump's announcement. One day later we got the answer when the Turkish Defense Minister Fikri Isik was quoted by Reuters that the U.S. decision to provide weapons for Kurdish militants in the fight against ISIS "is a crisis" and warned it would not benefit the United States or the region.

Isik also said that Turkey should not be expected to support any potential operations in Syria involving "terrorist groups" which leaves open the question whether Turkey would prevent the US from using the critical for the region Incirlik air base, which is also ground zero for many US combat missions involving ISIS. As expected, Turkey urged the United States on Wednesday to reverse the decision, saying every weapon supplied to the YPG militia constituted "a threat to Turkey".

The decision to supply arms to Kurds would have "consequences" and a potentially "negative result" for Washington, warned Turkish Prime Minister Binali Yildirim warned on Wednesday.

"We cannot imagine [the US] making a choice between our strategic-level partnership and a terrorist organization," Yildirim said, quoted by the Sabah daily. "The ...

The Surprising Losers From the VIX's Decline

The low level of the market's so-called fear gauge is not only bad news for investors who bet on higher volatility, it is bad for conservative investing strategies that profit directly from market choppiness, too.

Watch Out for the 'Altice Way' of Doing Business

As telecom giant Altice prepares its U.S. IPO, prospective shareholders should pay close attention to the company's use of management fees that could sap resources from minorities investors.

AXA's U.S. IPO Looks Like the Start of a Long Goodbye

AXA's plan for a multibillion-dollar listing of its U.S. life arm looks like a step toward the exit by the French insurer even if it starts by selling only a minority stake.

April 2017 Import and Export Price Year-over-Year Inflation Lower

Written by Steven Hansen

Import and export price inflation continues although the year-over-year rate of increase slowed.

Wayfair short sellers are staying put after stock rockets 20% on a revenue beat

Short interest in Wayfair stock is at a record level and some investors are even adding to their positions.

Market Extra: Here's why the stock market isn't freaking out about the Comey firing

Investors ignore the political fallout from President Donald Trump's firing of FBI Director James Comey as they keep their focus on tax cuts and solid earnings.

Trump, Pence defend Comey firing, say move not about Russia probe

Vice President Mike Pence, and later, President Donald Trump, on Wednesday defended the decision to fire FBI Director James Comey.

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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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