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13Feb2018 Open Market Commentary: Wall Street Started The Day In Negative Territory, DOW Down Over 180 Points, WTI Slips Into The Mid 58 Handle, Wild Market Swings Expected To Continue

Written by Gary

The US equities main benchmarks opened fractionally lower (SPY -0.5%) after two days of gains. Fears of a crash in 'safe-haven' bonds send investors running for cover.


Here is the current market situation from CNN Money

European markets are mixed. The FTSE 100 is higher by 0.20%, while the DAX is leading the CAC 40 lower. They are down 0.19% and 0.11% respectively.

What Is Moving the Markets

Here are the headlines moving the markets.

Stock futures point to dip on Wall St. after two days of gains

(Reuters) - U.S. stock futures pointed to another dip at the open for Wall Street on Tuesday, halting two days of gains that had somewhat cooled investor nerves about a burgeoning market correction.

Investors await Goldman's $5 billion answers as trading picks up

NEW YORK (Reuters) - Last year, Goldman Sachs Group Inc executives met with some skepticism after unveiling an ambitious plan to grow revenue by $5 billion, whether or not markets remained subdued. Now that trading has picked up, Wall Street is hoping the bank can do even better.

Harley CEO asks investors for patience as sales, stock slide

MILWAUKEE, Wis. (Reuters) - To Harley-Davidson Inc's investors, its chief executive has a simple message - be patient with his strategy to turn around the slump in demand for its iconic motorcycles.

PepsiCo beats sales estimates on snacks boost

(Reuters) - PepsiCo Inc's sales topped Wall Street forecasts in the fourth quarter, as higher demand at its snacks business that makes Doritos and Cheetos made up for a decline in sales of sugary drinks.

Blue Apron ramps marketing back up, revenue drop smaller than feared

NEW YORK (Reuters) - Blue Apron Holdings Inc shares jumped 9 percent in premarket trading on Tuesday after the meal-kit maker reported a smaller-than-expected revenue drop and quarterly loss as a costly distribution hub switch forced it to slash marketing.

Under Armour revenue beats estimates, shares jump

(Reuters) - Under Armour Inc beat analysts' estimates for fourth-quarter revenue on Tuesday, as it sold more footwear and apparel through its own stores and online.

Icahn, Deason urge Xerox shareholders to oppose Fujifilm deal

(Reuters) - Xerox Corp's plan to sell itself to Japan's Fujifilm Holdings has come under further pressure with Carl Icahn and Darwin Deason urging fellow shareholders to oppose the $6.1 billion deal.

Wynn Resorts to expand board; board panel reviews policies

(Reuters) - A special board committee of Wynn Resorts Ltd said on Tuesday the board will be expanded and that an outside counsel has been retained to help probe accusations of sexual misconduct against former CEO Steve Wynn.

IBM sues former HR boss hired by Microsoft

(Reuters) - International Business Machines Corp sued its former executive Lindsay-Rae McIntyre, who was named Microsoft Corp's new chief diversity officer over the weekend, alleging violation of a one-year non-competitive agreement.

Whistleblower Exposes "Rampant Manipulation Of VIX"

We first exposed the "conspiracy fact" that VIX manipulation runs the entire market back in 2015 as the ubiquitous VIX-crushing algo-runs coincided with a non-stop shorting of VIX futures by a seemingly bottomless-pocketed player in the market... which happened to coincide with the arrival of Simon Potter as the head of The New York Fed's trading desk...

Probably just a coincidence, right?

Then, in May of last year we academic confirmation of the rigged nature the US equity market's volatility complex, when a scientific study found "systemic VIX auction settlement manipulation."

Two University of Texas at Austin finance professors found "large transient deviations in VIX prices" around the morning auction, "consistent with market manipulation."

Virtually Nobody Is Reporting Crypto Profits To The IRS

Despite the IRS's victory late last year in a lawsuit against Coinbase - the most popular cryptocurrency exchange in the US - that forced the organization to hand over transaction data pertaining to more than 14,000 users, surprisingly few Americans are reporting income from cryptocurrency trading as income this tax season.

That's even more surprising considering the astronomical gains realized, not just by bitcoin, but by dozens of coins.

Fewer than 100 people out of the 250,000 who have already filed federal taxes this year through Credit Karma reported a cryptocurrency transaction, Reuters reported Tuesday.

This, despite nearly 57% of the 2000 Americans surveyed by the credit score startup and research firm Qualtrics last month saying they had realized some gains from cryptocurrencies last year, according to a Credit Karma study. About the same percentage of respondents said they had never reported a crypto transaction to the IRS. Meanwhile, about half said they understood how cryptocurrency gains might impact their taxes.

Bitcoin

As Reuters explains, the IRS considers cryptocurrencies to be property for federal tax p ...

Frontrunning: February 13



GOP's Silence on Deficits Under Trump Marks Turnabout (BBG)

Investors start looking abroad (Reuters)

Cold War Rivals Risk Direct Conflict in Syria (BBG)

Ex-Prosecutors Take Frustrations With Trump to the Campaign Trail (WSJ)

Amazon's Latest Ambition: To Be a Major Hospital Supplier (WSJ)

In Shift, U.S. Signals Readiness to Talk With North Korea (WSJ)

Volatile Markets Make Tomorrow's CPI Report a Reason to Worry (BBG)

Shale Output Hasn't Grown This Fast Since Oil Was at $100 (WSJ)

Exxon Sues Its Antagonists in a Fierce Climate-Change Lawsuit (BBG)

PepsiCo beats sales estimates on snacks boost (Reuters)

OPEC Revises Crude Supply Fore ...

If This Correction Is Over, It Will Be Unique In Leaving Most Individual Stocks Unscathed

Authored by Bryce Coward via Knowledge Leaders Capital blog,

There are many different ways in which we can measure the severity of a market correction.

The absolute peak-to-trough decline is one way. Duration of the drawdown is another. But we can also measure corrections by taking note of the performance of individual stocks, in what is akin to looking under the hood. After most big equity market drawdowns (10% or more), what we typically find when we pop the hood is a shambles of beaten up individual stocks. It's a symptom of investors selling their most vulnerable holdings when things get hairy, and it's also a symptom of the type of selling exhaustion that causes markets to stop declining.

Luckily, we can measure the degree to which individual names have been beaten up by calculating things like the average stock's decline from a recent high (chart 1), the percent of stocks making new lows in price (chart 2), the percent of stocks in a bear market (chart 3), and the percent of stocks with positive performance over a given look back period (chart 4).

What we find interesting about this market correction (so far) is the lack of individual names that have taken it on the chin. When examining the charts below it's helpful to note all the previous substantial market drawdowns in the S&P 500 since the late 1990s (excluding the bear markets): Summer 2007 (8%), Spring 2010 (16%), Fall 2011 (18%), Spring 2012 (9%), Fall 2015-Winter 2016 (12%). In each chart, the price of our United States Index is plotted on the right axis (red line) as the indicator is plotted on the left axis (blue line).

As we can see in chart 1, the average stock's decline from its 65-day high was just 11% as of Friday the 9th. All previous significant market declines have been accompanied by this indicator ...

The Next Big Number Keeping Markets on Edge

Throughout last year, investors worried about a phantom menace that could upset markets: higher U.S. inflation. They were wrong, to their own pleasant surprise. Now they could be right, which creates its own complications.

Time to Put Alibaba's Ant Under the Microscope

Ant Financial has a big share of China's huge mobile payments market. That doesn't mean investors should swallow talk of a lofty valuation as it gears up for a possible IPO.

The Wayfair Riddle

The furniture retailer's business has serious flaws. But the stock keeps soaring.

Market Extra: Here's the nagging question at the heart of the stock-market selloff

Is this just a technical stock-market pullback amplified by the implosion of the short-volatility trade, or is there something wrong with the underlying outlook.

In One Chart: Here's a 10-step plan the stock market must complete to get back on track

The S&P 500 needs to follow the 10-step plan above to get back on track — and so far, it's completed just the first three steps, says Instinet's Frank Cappelleri.

CryptoWatch: Bitcoin may not be done collapsing, but it has bounced back from worse

The bitcoin bubble may not yet be done popping, but that doesn't mean the world's largest digital currency is headed for zero, as more Wall Street analysts seem to think.

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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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