Written by Gary
U.S. stocks fell, after a ninth straight quarterly gain as weaker U.S. data on hiring and manufacturing reinforced investor concerns that economic growth is be slowing.
Oil rose today on news that Crude production dropped this week for only the second time this year. A combination of Greek default fears rising and considerably weaker than expected data has sparked a surge in gold prices this morning. The U.S. Dollar has fallen fractionally and is in trading sideways, but is expected to recover.
March ISM Manufacturing tumbled, missing expectations, to its lowest since May 2013. It is even uglier, looking at the data, with the lowest New Orders since Jan 2014. US Manufacturing data has missed 5 of the last 7 months and dropped for 5 months in a row, which hasn’t happened since 2008.
Iran and world powers pressed ahead with talks for an outline agreement to end the 12-year standoff over the Islamic Republic’s nuclear program. However, diplomats saying there are major obstacles that must be overcome before any announcement of an agreement can be made.
Needless to say, investors are very concerned about a positive outcome regardless of bullish analysts opining differently.
Here is the current market situation from CNN Money | |
 | North and South American markets are mixed today. The Bovespa is up 2.37% while the IPC gains 0.67%. The S&P 500 is off 0.65%. |
Traders Corner – Health of the Market
| Index | Description | Current Value |
| Investors.com Members Sentiment: | % Bullish (the balance is Bearish) | 53 |
| CNN’s Fear & Greed Index | Above 50 = greed, below 50 = fear | 30 |
| Investors Intelligence sets the breath | Above 50 bullish | 58.2% |
| StockChart.com Overbought / Oversold Index ($NYMO) | anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. | -0.86 |
| StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) | $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% – 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. | 57.07% |
| StockChart.com NYSE Bullish Percent Index ($BPNYA) | Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. | 62.53% |
| StockChart.com S&P 500 Bullish Percent Index ($BPSPX) | In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. | 69.80% |
| StockChart.com 10 Year Treasury Note Yield Index ($TNX) | ten year note index value | 18.56 |
| 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 | 74.75 |
| StockChart.com NYSE Composite (Liquidity) Index ($NYA) | Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors | 10,888 |
What Is Moving the Markets
| Here are the headlines moving the markets. | |
| WTI Crude Tops $49.50 After Iran Talks Reportedly “Paused”Crude oil prices continue to push higher. Following the earlier drop in US crude production this week and PEMEX oil rig fire, we now have more substantive headlines from Switzerland: *IRAN TAKES PAUSE IN TALKS, NO DOCUMENT SEEN TODAY: TASS *TASS CITES UNIDENTIFIED EUROPEAN DIPLOMAT ON IRAN TALKS Of course, one wonders who really wants a deal now… with over-supply already a problem, any sanctions-lifting would boomerang back to US Shale firms and further destabilize the illusion of recovery in America.
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| Wall St. Is Down After Weak Economic Reports The payrolls processor ADP said 189,000 new jobs were created in March, fewer than expected. |
| Web hosting company GoDaddy valued at up to $5.48 billion (Reuters) – GoDaddy Inc’s shares rose as much as 34 percent in their debut on Wednesday, valuing the Web hosting and domain registration company at up to $5.48 billion, including debt. |
| A Shocking Admission: “The Federal Reserve Is A Criminal Conspiracy”Submitted by Charles Hugh-Smith of OfTwoMinds blog, A spokesperson assured the assembled media that the Fed Board was “deeply concerned” about the American people, inflation, and the unemployment rate, but he was heckled off the stage. In an extraordinary admission, the Board of Governors of the Federal Reserve conceded that the Federal Reserve is “at heart a criminal conspiracy of bankers.” The Board followed up this revelation with a breezy confession that the Fed “doesn’t really give a rat’s rear-end about the American people, and we’re tired of having to claim we do.” The Fed’s role was global, the Board explained; the American people played no part whatsoever in Fed policy or decisions. “Honestly, why would anyone think we waste a moment’s thought on the American people?” one commented. “We’re here to maintain the power and wealth of the banking sector on a global scale. We have zero interest in John Q. Citizen’s travails or his income. Our only interest in Mr. Citizen is that he continue to keep his mouth shut and not make waves.” The unprecedented display of bare-knuckled honesty was in evidence throughout the meeting. Asked if the Fed was confident that its policies were appropriate for the nation, one board member snapped, “We don’t really think about the nation, but yes, we are 99% confident that our policies are appropriate and correct. In fact, let’s dispense with the false modesty: we’re 100% confident we are correct.” When a reporter asked if the Board was familiar with the Dunning-Kruger effect, a Board member snapped, “We don’t concern ourselves wit … |
| Here Is The “Rate Hike Decision” Waterfall Analysis Goldman Gave To The FedThe cozy “relationship” between Goldman and the Fed has been documented on these pages and elsewhere for years. From our 2010 question “Why Does Brian Sack Interact With Goldman’s FX Committee?”, to the Carmen Segarra tapes, the fact that the Fed, and specifically the New York Fed, is merely a branch of Goldman has been firmly established. Of course, for a bank which has every other major global financial institution also firmly in its grasp, this is merely ordinary course of business. The main reason why this two-way relationship is so very critical, is because in a Fed dominated by career economists who are clueless about practical policies, the entity that comes up with said policies is none other than Goldman Sachs, and specifically head economist Jan Haztius. Conveniently, at this critical time to the Fed’s rate hike decision, it was none other than Hatzius who moments ago schooled the Fed during the “20th Annual Financial Markets Conference: Central Banking in the Shadows: Monetary Policy and Financial Stability Postcrisis.” Reuters reported the big picture: Jan Hatzius said on Wednesday he believed the Federal Reserve will likely raise interest rates late this year or early next year, given the amount of slack still present in the labor market. |
| Wall Street falls after data; first quarter’s winners weaken NEW YORK (Reuters) – U.S. stocks fell on Wednesday as a pair of weaker-than-expected economic indicators raised concerns that Friday’s impending jobs report could also point to worsening conditions. |
| PEMEX Oil Platform Explodes; Injuries Reported As Hundreds EvacuateMexico’s state-owned PEMEX says an oil platform has exploded in Campeche Bay. 300 workers have been evacuated and the company says 8 boats are attempting to bring the blaze under control. Here’s the company’s statement posted on Twitter (via Google translate):
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| Wal-Mart says it is looking at product sourcing to lower prices (Reuters) – Wal-Mart Stores Inc is looking at how it sources its products, especially considering falling commodity prices globally, in an effort to reduce its prices, the head of the retailer’s U.S. division said on Wednesday. |
| U.S. private payrolls, factory data point to weak economic growth WASHINGTON (Reuters) – U.S. private employers added the smallest number of workers in more than a year in March and factory activity hit a near two-year low, fresh signs that economic growth slowed significantly in the first quarter. |
| GoDaddy Shares Jump in Market Debut The shares opened at $26.15, about 30 percent above the initial public offering price of $20, a dollar more than the top end of the expected range. |
| Production Cut Sparks Crude Rally As Inventory Rise Reaches Longest Streak On RecordFollowing last night’s pump’n’dump after API inventories exceeded expectations (5.2mm vs 4.2mm exp.), WTI crude prices have dropped to almost a $46 handle and recovered as chatter of “no deal” from Switzerland picks up. DOE reports a 4.766mm barrel build, greater than expected, for the 12th week in a row – the longest streak since records began in 1982. Crude prices are however surging as production dropped wekk-over-week for only the 2nd time this year… Inventories hit a new record high and are up 12 weeks in a row – a 33 year record high…
But crude production fell WoW for only the 2nd time this year…
The end result.. a rally for now…
Charts: Bloomberg |
| Construction Spending Growth Mixed in February 2015. Private Sector Construction Improved.Written by Steven Hansen The headlines say construction spending declined this month – the data is volatile and backward revisions distort the picture. However, the rate of growth looking at the unadjusted rolling averages improved this month following a persistent decline in the rate of growth for the previous 12 months. This month private construction improved which has been the drag on new construction growth. |
| Greek Fears, Weak Data Send Gold Surging Over $1200A combination of Greek default fears rising (safety reach) and considerably weaker than expected data (moar easing) has sparked a $20 surge in gold prices this morning, back above $1200…
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| Detroit carmakers report mixed U.S. sales results in March DETROIT (Reuters) – U.S. consumer demand for new vehicles began to thaw in March, with Detroit automakers reporting mixed sales results on Wednesday. |
| Here’s Why Investment Banks Love The ECB’s QE Program
As we already explained in numerous columns and articles over the past few weeks and months, we had serious doubts whether or not the Quantitative Easing program whereby the European Central Bank would pump 60B EUR per month in the ‘economy’ would trickle down to the ‘real’ economy. We expected the majority of the liquidity to stay in the ‘system’ as the sticky fingers of the banks would very likely use the funds for their own benefit instead of effectively taking care of their task as middle man to use the funds to re-start the economy in the Eurozone.
And the banks will very likely win on several fronts. As the additional liquidity injection on the markets will cause the volatility to increase, investment banks stand to profit from this as their clients will very likely try to anticipate further liquidity injections. According to Citigroup , the revenues from trading fixed income securities has been decreasing since the end of the global financial crisis, but this trend might very well be reverted soon as invest |
| Wall Street and Silicon Valley Form an Uneasy Alliance Entrepreneurs and venture capitalists have done their best to resist or reduce Wall Street’s entreaties, but it appears that a new relationship has begun to develop. |
| March 2015 ISM Manufacturing Survey Again Declines But Remains in ExpansionWritten by Steven Hansen The ISM Manufacturing survey continues to indicate manufacturing growth expansion – however this index has been declining since November 2014. The key internal new orders also modestly declined (but still remains slightly in expansion). Backlog of orders returned to contraction. |
| ISM Manufacturing Tumbles To 22-Month Lows, Longest Losing Streak Since LehmanUS Manufacturing PMI beat expectations, printing 55.7 up from 55.3 prior to its highest since Oct 2014, once again flying in the face of the collapse in US hard-data-base macro. More in line with the underlying reality, Feb Construction Spending dropped for the 3rd month of the last 4 and March ISM Manufacturing tumbled to 51.5, missing expectations of 52.5, to its lowest since May 2013. Under the covers, it is even uglier with the lowest New Orders since Jan 2014 as US Manufacturing data has missed 5 of the last 7 months and dropped for 5 months in a row – which hasn’t happened since 2008. Everything is awesome…
Everything is NOT awesome…
The leading New Orders less Inventories indicator hinting that there is much more ISM pain to come: from @Not_Jim_Cramer
Respondents do not sound unequivocally happy…
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| U.S. construction spending falls for second straight month U.S. construction spending unexpectedly fell in February and the prior month’s outlays were revised to show a steeper decline than previously estimated, which could see economists further mark down their first-quarter growth forecasts. |
| Goldman economist says Fed hike likely late 2015 or early 2016 STONE MOUNTAIN, Ga. (Reuters) – Goldman Sachs Economist Jan Hatzius said on Wednesday he believed the Federal Reserve will likely raise interest rates late this year or early next year, given the amount of slack still present in the labor market. |
| Greece Hints At Default, Russian Pivot:”Will Not Respect IMF Deadline” – What Happens NextUpdate: GREECE GOVT DENIES PLAN TO DELAY APRIL 9 IMF PAYMENT: REUTERS For now the algos can’t decide if Greece is joking about making the payment or joking about not making the payment.
The hints are growing louder that the Troika-Greece standoff will not end well for either side. Spiegel is reporting that Greek Interior Minister Nikos Voutzis has stated:
In other words… *GREECE DOESN’T WANT TO RESPECT IMF APRIL 9 DEADLINE: SPIEGEL And adds:
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