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07Feb2018 Market Close: Wall Street Succumbs To Investor Uncertainty, DOW Down 19 Points, Crude And Gold Lower, US Dollar Up

Written by Gary

US stocks slipped in choppy trading today (SPY -0.5%) as technology and energy stocks fell. Investors had to adjust to a market with greater volatility following wild swings of the past few sessions.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Wall Street wobbles after week's wild start

(Reuters) - U.S. stocks slipped in choppy trading on Wednesday as technology and energy stocks fell, while investors adjusted to a market with greater volatility following wild swings of the past few sessions.

Amazon's market value on verge of beating out Microsoft

SAN FRANCISCO (Reuters) - Amazon.com Inc on Wednesday was on the verge of ending the day with a stock market value higher than Microsoft Corp's for the first time, as the online shopping behemoth weathered the recent turmoil on Wall Street.

Tesla Inc expected to post a loss of $3.12 a share: summary

(Reuters) - - Tesla Inc is expected to show a rise in quarterly revenue when it reports results.

Brazil gives conditional antitrust nod to $66 billion Bayer-Monsanto tie-up

BRASILIA (Reuters) - Brazilian antitrust agency Cade on Wednesday approved Bayer AG's proposed takeover of U.S. seeds company Monsanto Co , but imposed conditions to allow the two companies to combine operations.

Tronc to sell LA Times, other newspapers for $500 million

(Reuters) - Tronc Inc said on Wednesday it agreed to sell the Los Angeles Times, the San Diego Union-Tribune and some other newspapers to billionaire investor Patrick Soon-Shiong for $500 million cash.

Kalanick returns to court in Waymo-Uber autonomous car secrets trial

SAN FRANCISCO (Reuters) - Uber Chief Executive Travis Kalanick's famously competitive nature was the focus of questioning on Wednesday in a trade-secrets trial in which Uber Technologies Inc [UBER.UL] is accused of stealing self-driving car designs from rival Waymo.

Wynn Resorts shares climb after Maddox moves into CEO slot

(Reuters) - Wynn Resorts Ltd shares jumped 10 percent on Wednesday, as investors approved of the casino operator's decision to give company veteran Matt Maddox the top job, replacing casino mogul Steve Wynn who resigned following sexual misconduct allegations.

Swiss Re in talks with SoftBank, Japanese firm could take minority stake

ZURICH (Reuters) - Swiss Re is in preliminary discussions with Japan's SoftBank Group on a potential minority investment in the Swiss reinsurer, the Zurich-based group said on Wednesday.

Citigroup targets rapid Middle East, Africa growth in 2018

ABU DHABI (Reuters) - Citigroup expects 2018 to be its best year for investment banking in the Middle East and Africa in at least a decade, likely led by Saudi Arabia, a senior executive at the U.S. bank said.

Yield-Spike Spooks Stocks, Commodities Clubbed As Dollar & Bitcoin Bounce

Seriously...

It was ugly in Asia overnight (and US futures were weak before the open)...

Just as we saw last Friday, it appears that today's yield spike in Treasuries (driven by a weak auction and more fiscal largesse in the budget deal) spooked stock investors..

S&P, Dow, and Nasdaq ended the day red as the whole market slipped into the close (NOTE the idiotic swings in The Dow in the afternoon)...

Putting The Mean In "Mean Reversion"

Via Global Macro Monitor,

Asset valuations, including stock prices, eventually revert to their long-term mean (average) valuation or at least attempt to if not interrupted by outside intervention, such as central banks. It has been the major factor in the steep sell-off in stocks over the past few days, in our opinion.

Stock valuations are at extreme levels, are running way ahead of fundamentals, and sentiment and positioning were off the charts. Many investors even began to delude themselves that stocks can and never go down.

Moreover, it is the new Fed Chairman's, Jerome Powell, first day on the job. It is less than certain that the new regime at the Fed will step in to prop up stock valuations. Don't bet against it, however, as ever since the mid-1990's, the stock and asset markets have become the economy.

Macro Triggers

There are other short and medium-term macro factors at play that may have triggered the sell off: 1) the end of quantitative easing; 2) rising interest rates, inflation, and fears of bursting bond bubbles; 3) U.S. fiscal promiscuity and worries about how the government will finance itself, including $1 trillion in 2018 (stunning and gone unnoticed); 4) the botching of dollar policy by Secretary Mnuchin at Davos, which could spook off foreign buyers of U.S. Treasury debt; 5) fears central banks are way behind the curve as almost all

The Rhymes Of History

Authored by Sven Henrich via NorthmanTrader.com,

The Rhymes of History are present everywhere if you look closely. As I outlined in Retiring the Bear this week's drop was no surprise as it was well advertised in the charts and sentiment. As promised I wanted to share some structural charts that may put the drop in a historical context.

There's a lot of talk of who and what to blame for the drop. Searching for explanations is common practice following a big drop and i'll leave that to others, but my view is simply that it was technically based.

We were massively extended and a reconnect had to happen and did happen. In the same token the bounce off of the lows so far is also not a surprise as we had reached massive oversold readings on $NYMO as I outlined on Monday:

$NYMO -118. Lowest print since 2011.
Rivaling readings seen during the financial crisis.
Today was massive. pic.twitter.com/7i8XaZ4xEX

— Sven Henrich (@NorthmanTrader) February 5, 2018

Markets are obeying technicals nicely and allows us to navigate through the now much more volatile action. And that's a good thing. I don't know about you but 2-3 handle intra ...

Credit Card, Student And Auto Debt All Hit Record Highs In December

The US consumer closed out 2017 with a credit bang.

While we reported last month that in November US credit card debt had just surpassed the previous all time high hit in July 2008 just before all hell broke loose when Lehman filed for bankruptcy two months later, there was a slight chance that in December this number had declined after the record surge in November credit-funded spending (which was just revised from $28BN to $31BN).

Well, that did not happen, and while December total consumer credit increased by less than the expected $20BN, it was still an impressive $18.45BN, of which $5.1billion was credit card debt and $13.3 billion non-revolving - or student and auto - loans.

Market Plunge Lays Bare the Peril of 'FOMO'

The only thing investors have to fear, Franklin Delano Roosevelt might have said, is the fear of missing out. As investors struggle to grasp the recent sell-off, it is worth taking a look at popular recent advice.

Snapchat's Parent Sharpens Up

Snapchat parent finally pleases investors with accelerating user and revenue growth.

How the Bull Market's Greatest Trade Went Bust

A record increase in volatility blew up a trade that had been among the most lucrative of the entire bull market—betting the market would get calmer and stay calm.

CryptoWatch: Winklevoss: If you can't see bitcoin at $320,000, you just lack imagination

The Winklevoss twins are as bullish as ever when it comes to the future of cryptocurrencies.

The Ratings Game: Lululemon CEO's resignation opens the door for former Ralph Lauren CEO Stefan Larsson

Lululemon's CEO departure was unexpected, but there's opportunity for Stefan Larsson, who has held positions at Old Navy and Ralph Lauren, to step in, analysts say.

Bond Report: 30-year Treasury yield jumps to highest since March as stocks struggle for direction

Treasury yields jumped Wednesday as party leaders in the Senate agreed to a two-year budget deal that would increase defense spending and raise the government's borrowing cap.

Summary of Economic Releases this Week

Real Time Economic Calendar provided by Investing.com.

Earnings Summary for Today

Earnings Calendar provided by Investing.com.

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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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