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12May2017 Market Update: Consumer Prices Higher Amid Increases In The Cost Of Gasoline, Food And Rents, Inflation Is Rising

Written by Gary

US stocks edged lower today (SPY -0.2%) and were on track to book declines for the week, weighed down by financial and industrial sectors. For the 17th week in a row, the number of US oil rigs rose (by 9 to 712) but US gas rigs fell.


Here is the current market situation from CNN Money

North and South American markets are mixed. The Bovespa is higher by 1.02%, while the IPC is leading the S&P 500 lower. They are down 0.27% and 0.23% respectively.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 73%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 62%
Investors Intelligence sets the breath Above 50 bullish 65%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. -16.08
StockChart.com NYSE % of stocks above 200 DMA Index ($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 $OEXA200R rises above 65%
Secondary Bullish Indicators:
a) RSI is POSITIVE (above 50)
b) Slow STO is POSITIVE (black line above red line)
c) MACD is POSITIVE (black line above red line)
78%
StockChart.com NYSE Bullish Percent Index ($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 23.28
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 98.85
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 11,538

What Is Moving the Markets

Here are the headlines moving the markets.

Wall St. slips as bank, industrial stocks drag

(Reuters) - U.S. stocks edged lower on Friday and were on track to book declines for the week, weighed down by financial and industrial sectors.

U.S. consumer prices rebound on rising gasoline, rental costs

WASHINGTON - U.S. consumer prices rebounded in April amid increases in the cost of gasoline, food and rents, pointing to steadily rising inflation that could keep the Federal Reserve on track to raise interest rates next month.

GE's Immelt bets big on digital factories, shareholders are wary

GROVE CITY, Penn. (Reuters) - At a General Electric Co factory in this rural town, Keith Spahn, 60, used to take measurements of parts from railroad locomotives that are in for repair by hand.

Behind Kushner Companies, a Chinese agency skirts visa-for-investment rules

SHANGHAI (Reuters) - While Jared Kushner's family company apologized this week for mentioning the White House adviser's name when wooing Chinese investors to fund a New Jersey real estate project, one Chinese immigration agency was touting its role in the deal.

Switching sides, BlackRock helps pass climate resolution at Occidental

BOSTON (Reuters) - Asset manager BlackRock Inc on Friday said it voted in favor of a shareholder proposal calling on Occidental Petroleum to report on the impact climate change could have on the energy company's business, helping it to pass.

Fiat Chrysler recalls 1.25 million trucks over software error

WASHINGTON/DETROIT (Reuters) - Fiat Chrysler Automobiles NV (FCA) said on Friday it would recall more than 1.25 million pickup trucks worldwide to address a software error linked to reports of one crash death and two injuries.

U.S., China agree to first trade steps under 100-day plan

WASHINGTON/BEIJING (Reuters) - The United States and China have agreed to take action by mid-July to increase access for U.S. financial firms and expand trade in beef and chicken among other steps as part of Washington's drive to cut its trade deficit with Beijing.

U.S.-China trade deal serves up potential corporate winners

NEW YORK (Reuters) - Beef companies, credit card firms and liquefied natural gas exporters emerged as potential corporate winners on Friday in the wake of trade agreements reached between the United States and China.

Spotify, valued at $13 billion, to launch direct listing on NYSE: sources

(Reuters) - Music streaming service Spotify, most recently valued at $13 billion, will be the first major company to carry out a direct listing on the New York Stock Exchange when it goes public later this year or early next year, two sources familiar with the situation said on Friday.

Watch Live: Spicer Returns To Brief Press After "Missing" Two Days Of Comey Questions

After throwing Sarah Huckabee Sanders to the wolves over the past two days, which have been among the most chaotic two days of the Trump presidency (and that is really saying something) with the whole firing of FBI Director Comey thing, Sean Spicer will once again take the podium today for the White House's daily press briefing.

Tune in below or else you'll have absolutely no basis for understanding this weekend's episode of Saturday Night Live.

US Oil Rig Count Rises For 17th Straight Week As Crude Production Nears Record Highs

For the 17th week in a row, the number of US oil rigs rose (by 9 to 712) but US gas rigs fell.


*U.S. OIL RIG COUNT UP 9 TO 712 , BAKER HUGHES SAYS :BHI US

*U.S. GAS RIG COUNT DOWN 1 TO 172 , BAKER HUGHES SAYS :BHI US

Texas saw an additional 8 rigs added.

That's the highest level since the week of April 17, 2015, and the longest stretch of increases in six years.

US Crude production follows its lead to within 2% of record highs...

Just don't show Goldman (or OPEC).

Ray Dalio Goes Dr. Doom: "When The Next Downturn Comes, It's Going To Be Bad"

Over the past week, Twitter has suddenly become the preferred venue of financial giants to post their ad hoc thoughts and observations. We already noted the tweetstorm by Jeffrey Gundlach who launched a brand new twitter account on the same day as his Ira Sohn conference, and now it appears to be Ray Dalio's turn who after years of keeping quiet on the social network, blasted off 4 tweets in rapid succession - accounting for a quarter of his entire activity on Twitter - this morning, to wit:

This is new for me and a lot more fun than I imagined because of the back and forths. If you want to know what you'll see from me here...

I'm particularly interested in seeing the world through the eyes of smart people who see things differently from me, idea-meritocratic decision-making, economics/markets, ocean exploration, neuroscience, and music (especially the blues).

he concluded with the following link to his latest thoughts on the global economy:

If you want to know what I think is the big picture for the world economy and markets, it's linked here: https://t.co/HJ8pjWA0bH

— Ray Dalio (@RayDalio) May 12, 2017

So what does the man who several years ago predicted, incorrectly, a beautiful deleveraging think now about the "Big picture" state of the global economy? He is no longer quite as optimistic, because in his LInkedIn post, he writes that while "big picture, the near term looks good" ... "the longer term looks scary." His r ...

"Massive" Ransomware Attack Goes Global: "This Is Huge"

We earlier reported in the disturbing fact that hospitals across the United Kingdom had gone dark due to a massive cyber-attack. The situation has got significantly worse as The BBC reports the ransomware attack has gone global.

Screenshots of a well known program that locks computers and demands a payment in Bitcoin have been shared online by parties claiming to be affected.

It is not yet clear whether the attacks are all connected. One cyber-security researcher tweeted that he had detected 36,000 instances of the ransomware, called WannaCry and variants of that name.

"This is huge," he said.

There have been reports of infections in the UK, US, China, Russia, Spain, Italy, Vietnam, Taiwan and others.

The BBB details a number of Spanish firms were among the apparent victims elsewhere in Europe.

Telecoms giant Telefonica said in a statement that it was aware of a "cybersecurity incident" but that clients and services had not been affected.

Power firm Iberdrola and utility provider Gas Natural were also reported to have suffered from the outbreak.

China Trade Plan Is Big Deal for Natural Gas

Trump's 10-point China trade plan contains a plug for U.S. natural gas exports. Such an alignment of interests could have collateral impacts on other gas producers especially Australia and Russia.

OPEC Should Give Up on Production Cuts

Saudi Arabia has led oil-production cuts that have helped U.S. shale to rebound far more quickly than expected.

Stopping the Fire in Spain's Weakest Bank

The most remarkable thing about the troubles of Spanish lender Banco Popular Español is how little they seem to matter to the country or the wider eurozone. Italian policy makers must be seething with envy.

Futures Movers: Oil poised to gain more than 3% this week as hopes grow for output-cut extension

Oil prices inch lower, but are poised to finish the week more than 3% higher as hopes build for an extension of OPEC's production-cut deal.

The Moneyologist: Mother's Day Moneyologist: My mother wants to give me 70% of her estate — my sister is furious

She correctly suspects the family inheritance won't be split equally.

Market Extra: Why investors still aren't freaking out over the Comey firing

The growing controversy surrounding President Donald Trump's firing of FBI Director James Comey isn't doing much to rattle the stock market. Here's why.

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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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