29Apr2015 Market Close: Averages Remain In The Red After FMOC Report, Volatility Was Higher Than Usual

Stocks end volatile session lower as Fed leaves door open for rate hike

NEW YORK (MarketWatch) — U.S. stocks ended Wednesday’s volatile session lower after the Federal Reserve in a statement following its two-day policy meeting left open the chance of an interest-rate hike as early as June. However, market expectations remained for a rate hike later in the year following poor economic indicators over the past several months. The central bank said it expects the U.S. economy to rebound and attributed a slowdown in the first quarter to transitory factors. The S&P 500 SPX, -0.37% closed 7.91 points, or 0.4%, lower at 2,106.85. The Dow Jones Industrial Average DJIA, -0.41% dropped 74.61 points, or 0.4%, to 18,035.53. The Nasdaq Composite COMP, -0.63% ended the session down 31.78 points, or 0.6%, at 5,023.64.

US stocks drop as economy ekes out meager growth; Fed holds interest rates at record low

NEW YORK (AP) — U.S. stocks dropped Wednesday following news that the economy skidded to a near halt in the first three months of the year, battered by harsh weather, plunging exports and sharp cutbacks in oil and gas drilling. Stocks stayed lower after the Federal Reserve downgraded its assessment of the economy and kept its key interest rate unchanged. KEEPING SCORE: The Standard & Poor’s 500 index fell eight points, or 0.4 percent, to 2,107, as of 3:14 p.m. Eastern. The Dow Jones industrial average fell 76 points, or 0.4 percent, or 18,034 points. The Nasdaq fell 25 points, or 0.5 percent, to 5,030. US ECONOMY: The overall economy grew at a barely discernible annual rate of 0.2 percent in the January-March quarter, the Commerce Department reported Wednesday. That is the poorest showing in a year and down from 2.2 percent growth in the fourth quarter. Plummeting exports pulled growth down by nearly a full percentage point.

Fed downgrades its view on economy and appears no closer to raising rates from record lows

WASHINGTON (AP) — The Federal Reserve has downgraded its assessment of the economy after a winter in which growth nearly stopped. The Fed offered no sign that a rate increase might be coming soon. On a day when the government said the economy barely grew in the January-March quarter, the Fed appeared no closer to raising its benchmark rate from a record low near zero. The Fed noted in a statement that growth slowed, business investment softened and exports declined. It repeated previous language that it needs to be “reasonably confident” that low inflation will move back to its 2 percent target. Earlier Wednesday, the government estimated that the economy grew at a barely discernible annual rate of 0.2 percent in the January-March quarter, battered by harsh weather, plunging exports and scaled-back energy drilling. It was the poorest economic showing in a year and was down sharply from a 2.2 percent annual growth rate in the fourth quarter.

Apple Warns Of “Material Financial Damage” If Its $171 Billion In Offshore Cash Is Jeopardized

Despite the fact that Apple beat on both the top and bottom line on Monday on the back of better-than-expected iPhone sales (thank you China), and despite a near $20 billion increase in the company’s massive cash pile which now stands at around $193 billion, shares have languised this week, falling around 5% post-earnings.

Now, we have a possible explanation for the weakness. As FT reports, the company’s 10Q contains a warning that Apple could face “material” financial damage in the event the European Commission forces Ireland to reclaim a decade’s worth of tax advantages that have accrued to the company under a tax deal that may have accorded it a “selective” advantage. Here’s more:

Apple has warned investors that it could face “material” financial penalties from the European Commission’s investigation into its tax deals with Ireland — the first time it has disclosed the potential consequences of the probe.

Under US securities rules, a material event is usually defined as 5 per cent of a company’s average pre-tax earnings for the past three years. For Apple, which reported the highest quarterly profit ever for a US company in January, that could exceed $2.5bn, according to FT calculations.

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The Real Financial Crisis That Is Looming

Submitted by Lance Roberts via STA Wealth Management,

There is a financial crisis on the horizon. It is a crisis that all the Central Bank interventions in the world cannot cure. It is a financial crisis that will continue to change the economic landscape of America for decades to come.

No, I am not talking about the next Lehman event or the next financial market meltdown. Although something akin to both will happen in the not-so-distant future. It is the lack of financial stability of the current, and next, generation that will shape the American landscape in the future.

The nonprofit National Institute on Retirement Security released a study in March stating that nearly 40 million working-age households (about 45 percent of the U.S. total) have no retirement savings at all. And those that do have retirement savings don’t have enough. As I discussed recently, the Federal Reserve’s 2013 Survey of consumer finances found that the mean holdings for families with retirement accounts was only $201,000.

Mylan Raises Offer for Perrigo Again and Is Rejected Again

Seeking to fend off an unwanted bid from Teva, Mylan increased its cash-and-stock offer for Perrigo.

Emerging Markets Rally Amid Troubles

Stocks, currencies and bonds in the developing world have taken off, but difficulties that weighed them down early in the year are likely to return to the forefront, investors and analysts say.

Oil Prices Rise on Supply Data

Oil prices hit fresh 2015 highs on Wednesday after data showed a deceleration in the growth of U.S. crude stockpiles.

Salesforce working to field takeover offers: Bloomberg

(Reuters) – Cloud software company Salesforce.com Inc is working with financial advisers to help it field takeover offers after being approached by a potential acquirer, Bloomberg said, citing people with knowledge of the matter.

Lawsuit Dismissed on ‘Unfair Advantage’ for High-Frequency Traders

A federal judge dismissed three class-action lawsuits alleging stock exchanges gave high-frequency traders an unfair advantage, according to court documents.

Fed points to softer U.S. labor market, weak economic growth

WASHINGTON (Reuters) – The Federal Reserve pointed to weakness in the U.S. labor market and economy on Wednesday in a policy statement that came just hours after data showing tepid economic growth, suggesting the central bank may have to wait until the third quarter to begin raising interest rates.

Fed Sees Slowdown as ‘Transitory’

Fed officials attributed the economy’s sharp first-quarter slowdown to transitory factors, signaling an increase in short-term interest rates remains on the table although the timing has become more uncertain.

When Exactly Will The Fed Launch QE4?

Submitted by Bill Bonner via Acting-Man blog,

Money From Nowhere

On Friday, the S&P 500 and the Nasdaq closed at record highs. It’s the first time both indexes have done so since December 31, 1999. Why such optimism? High profits, you say. But where do profits come from?

Households have less money to spend than they did 15 years ago. And companies cannot make money just by selling things to each other. The only explanation is that customers – including the US government – continue to borrow and spend.

Corporations borrow money to buy their own shares. Consumers borrow to buy products. Either way, the money comes “out of nowhere” and falls on balance sheets like manna from heaven.

The great money temple, from whence fresh pronouncements shall issue today. How long before it floods us with fresh money again?

Photo credit: Susan Candelario

The Limits of Debt

US households appeared to reach “peak debt” in 2007. Now, the corporate and government sectors – not to mention students and auto buyers – are pulling up to their maximum debt limits, too.

U.S. Stocks Remain Lower

U.S. stocks, hit Wednesday by signs of slowing growth, held onto their losses after the Fed signaled that interest-rate increases are still possible in the coming months.

U.S. economy stumbles in first quarter as weather, low energy prices weigh

WASHINGTON (Reuters) – U.S. economic growth nearly stalled in the first quarter as harsh weather dampened consumer spending and energy companies struggling with low prices slashed spending.

Former Goldman banker acquitted of all charges in rape case

RIVERHEAD, New York (Reuters) – A former Goldman Sachs banker was found not guilty on Wednesday of charges that he raped an Irish student at his rental home while vacationing in Long Island in the summer of 2013.

Mylan Should Try Teva On for Size

Mylan is using a bid for Perrigo to avoid a hostile takeover by Teva. Given frothy valuations, it may be better to be a seller than buyer.

Bonds, Stocks Shrug As Hawkish Fed Sparks Dollar Surge, Commodity Purge

Bonds & stocks seem confused by the somewhat hawkish Fed statement with modest gains for both amid a lot of oscilation around unchanged. The Dollar, however, is quite sure and is surging (EURUSD -100pips) with crude and precious metals sliding.

Stocks undecided for now…

Bonds not sure…

But the dollar is surging (slamming EURUSD back from its big rally)

Commodities fell out of tyhe gate but copper now green post-FOMC…

Charts: Bloomberg