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31Aug2017 Market Update: Wall Street Is Higher In Early Afternoon Trading, Upbeat Data Pointed To Strength In The Economy, Chances Of A Rate Hike In December Have Fallen To About 36 Percent From 43 Percent

Written by Gary

SP 500 and the Nasdaq are trending higher (SPY +0.5%) while the DOW is off session highs and trading sideways (+45 points). Crude prices have ...


Here is the current market situation from CNN Money

North and South American markets are mixed. The S&P 500 is higher by 0.49%, while the IPC is leading the Bovespa lower. They are down 0.27% and 0.22% respectively.

... risen 1 percent and US consumer spending rose slightly less than expected.

Traders Corner - Health of the Market

Index Description Current Value
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 60%
Investors Intelligence sets the breath Above 50 bullish 43%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. +11.56
StockChart.com NYSE % of stocks above 200 DMA Index ($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 $OEXA200R rises above 65%
Secondary Bullish Indicators:
a) RSI is POSITIVE (above 50)
b) Slow STO is POSITIVE (black line above red line)
c) MACD is POSITIVE (black line above red line)
66%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 60%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 66%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 21.33
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 89.63
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 11,861

What Is Moving the Markets

Here are the headlines moving the markets.

Oil claws back some losses; U.S. crude set for steepest fall in a year

AMSTERDAM (Reuters) - Oil prices rose 1 percent on Thursday, clawing back some of the losses made a day earlier, but U.S. crude is on track for the steepest monthly losses in more than a year on demand concerns after floods knocked out a quarter of U.S. refining capacity.

U.S. consumer spending rises modestly; inflation retreats

WASHINGTON (Reuters) - U.S. consumer spending rose slightly less than expected in July and annual inflation advanced at its slowest pace in more than 1-1/2 years, diminishing expectations of an interest rate increase in December.

"Safe-haven" euro could complicate ECB plan to roll back stimulus

LONDON (Reuters) - The euro's rise above $1.20 this week has prompted talk that it is becoming a safe haven for investors, posing a problem for the European Central Bank as it plans to roll back its huge economic stimulus in the coming months.

U.S. inflation data boosts stocks; yields slip

NEW YORK (Reuters) - An index of global equity markets rose to a three-week high on Thursday after data showed U.S. inflation increased at its slowest pace since late 2015, boosting expectations that the Federal Reserve will hold off from increasing interest rates again this year.

Facebook's Watch goes up against YouTube for ad dollars

(Reuters) - Facebook Inc launched its Watch video service to U.S. users on Thursday with plans to allow people to submit shows, as the No. 1 social media network vies with Alphabet Inc's YouTube for advertising revenue.

GE's new CEO preparing job cuts in bid to reduce costs: source

NEW YORK (Reuters) - General Electric Co is making plans to significantly reduce corporate staff in an effort to cut spending and boost profits under its new chief executive, and the company already has halted hiring in certain technology positions, a person familiar with the situation told Reuters.

NAFTA nations plan talks progress under barrage of Trump threats

MEXICO CITY (Reuters) - Trade negotiators plan to take small steps forward in a second round of talks to rework the North American Free Trade Agreement (NAFTA) this weekend, trying to ignore daily threats from U.S. President Donald Trump to tear it up if he does not get his way.

Yahoo must face litigation by data breach victims: U.S. judge

(Reuters) - A U.S. judge said Yahoo must face nationwide litigation brought on behalf of well over 1 billion users who said their personal information was compromised in three massive data breaches.

Wall Street higher as data points to strengthening economy

(Reuters) - Wall Street was higher in late morning trading on Wednesday as upbeat data pointed to strength in the economy.

Trump Admin Orders Russia To Shutter Consulate, Annexes In The U.S.

Tit for tat.

Exactly one month after Vladimir Putin ordered the expulsion of 755 US diplomats from Russia, as well as the seizure of two diplomatic compounds used by the US in Russia on July 31, moments ago the US State Department announced that "in the spirit of parity invoked by the Russians", the US has ordered the Russian government to close its San Francisco consulate, a chancery annex in Washington and a consular annex in New York City.


Russian consul general in SF

Russia was given two days, or until September 2, to complete the closures.

The State Department explains that "with this action both countries will remain with three consulates each."

And, in the spirit of "generosity", the US added that "while there will continue to be a disparity in the number of diplomatic and consular annexes, we have chosen to allow the Russian Government to maintain some of its annexes in an effort to arrest the downward spiral in our relationship."

Full statement below:

Achieving Parity in Diplomatic Missions

The United States has fully implemented the decision by the Government of the Russian Federation to reduce the size of our mission in Russia. We believe this action was unwarranted and detrimental to the overall relationship between our countries.

In the spirit of parity invoked by the Russians, we are requiring the Russian Government to close its Consul. General in Sa ...

"Rapidly Intensifying" Hurricane Irma Barreling Straight Toward The East Coast

The National Hurricane Center (NHC) has just updated its forecast for what it is now referring to as a "rapidly intensifying" Category 2 hurricane in the Eastern Atlantic ocean and the results look disastrous for a large swath of the Caribbean and Southeastern United States. Here is a brief summary of Hurricane Irma from the National Hurricane Center released at 11AM EST:

Satellite images indicate that Irma is rapidly intensifying. Very deep convection has formed in the central dense overcast, which is now displaying a small and clearing eye. Dvorak estimates were up to 77 kt at 1200 UTC, and since the cloud pattern continues to quickly become more organized, the initial wind speed is set to 85 kt.

At 1100 AM AST (1500 UTC), the center of Hurricane Irma was located near latitude 16.9 North, longitude 33.8 West. Irma is moving toward the west-northwest near 10 mph (17 km/h). This general motion is forecast through early Friday, followed by a generally westward motion on Saturday.

Maximum sustained winds have increased to near 100 mph (155 km/h) with higher gusts. Irma is forecast to become a major hurricane by tonight and is expected to be an extremely dangerous hurricane for the next several days.

Hurricane-force winds extend outward up to 15 miles (30 km) from the center and tropical-storm-force winds extend outward up to 80 miles (130 km).

A 50% chance that the northern Antilles experiences a Hurricane landfall next week; topography may cause models some issues with intensity.

As Babies are Prescribed Pharmaceuticals, Have We Reached Dystopia?

Via The Daily Bell

Would you let a five-year-old smoke a joint? I certainly hope not. Yet that would probably be less harmful than loading kids up on pharmaceuticals.

Currently, over a million American children UNDER SIX YEARS OLD are taking psychiatric drugs. Babies are literally being doped up by the pharmaceutical industry. Over 274,000 babies UNDER ONE-YEAR-OLD are given drugs, mostly for anxiety.

Anxiety drugs for babies. Have they tried motherly love? Or is that just an old fashioned, outdated concept?

You know, I like to mention society's similarity to Orwell's

Same Day FX Wars? Dollar Tumbles After Mnuchin Says "Weaker Dollar Better", Undoing Euro Losses

The smell of currency war is rising in the air.

Less than six hours after the ECB lobbed the first trial balloon of the day, when Reuters reported that ECB policymakers were "growing worried" about the recent rapid gains in the Euro, sending the EURUSD sharply, if briefly lower, the entire move is now a distant memory following jawboning from US Treasury Secretary Steven Mnuchin, who moments ago said on CNBC that "having a weaker dollar is somewhat better for trade", a statement which immediately spooked algos into dumping the USD...

... selling the USDJPY by 30 pips to 109.90...

... and sending the EURUSD right back to 1.19, where it was before the ECB's Reuters "intervention."

And while Mnuchin also added that a strong USD in the long-term "reflects confidence", algos decided to ignore that. His key statement below:

"As it relates to trade, having a weaker dollar is somewhat better for us. What I've said consistently is: Where the dollar is in the short-term is less of a concern for me. I do think over long periods of ti ...

Costco Stock at a Discount

One of the few ways for retailers to compete against the growing might of Amazon.com is to offer something different. Costco Wholesale does that, but the market has been unwilling of late to give it credit for its uniqueness.

Emerging-Market Bonds: The Stars Align

Low inflation is a puzzle in developed markets, but a pleasant and powerful phenomenon for emerging-market bonds

Beijing Shows Its Power With China's Latest Megamerger

The combination of the country's leading coal miner and power producer is the clearest sign yet of Chinese leaders' desire to enhance the role of big state-owned companies.

July 2017 Pending Home Sales Seasonally Adjusted Index Significantly Declines

Written by Steven Hansen

The National Association of Realtors (NAR) seasonally adjusted pending home sales index significantly declined. Our analysis is more positive. The quote of the day from this NAR release:

... The reality, therefore, is that sales in coming months will not break out unless supply miraculously improves. This seems unlikely given the inadequate pace of housing starts in recent months and the lack of interest from real estate investors looking to sell ...

The Tell: Be worried when the dollar and stocks rise together, analyst says

U.S. equities and the dollar have tended to enjoy an inverse relationship where if the one goes up the other points down. This equilibrium was breached this week, and it's sending a worrying message about investors' attitude toward risk and valuations, according to one analyst.

Project Syndicate: Does bitcoin threaten economic stability?

Bitcoin and other cryptocurrencies have the quality of a Ponzi scheme, threatening economic stability.

ETF Focus: Can Trump and the Republicans make you money? This new ETF bets on MAGA

The market for exchange-traded funds has gotten so large that investors can use them to express their views on essentially any region, asset class, strategy or sector. Increasingly, however, fund providers are trying to offer ways for investors to express their thoughts on politics through where they put their money.

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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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