23Nov2015 Market Close: The Averages Close In The Red, Oil Closes Up And The US Dollar Finishes Strong

Wall Street falls after strong week, Pfizer and Allergan drag

(Reuters) – U.S. stock indexes turn negative in afternoon trading on Monday after a week of strong gains, while a record healthcare deal failed to impress investors.

Pfizer to buy Allergan in $160 billion deal

NEW YORK (Reuters) – Pfizer Inc on Monday said it would buy Botox maker Allergan Plc in a deal worth $160 billion to slash its U.S. tax bill, rekindling a fierce political debate over the financial maneuver.

CVC, Canada’s CPPIB to buy Petco for about $4.6 billion

(Reuters) – Petco Holdings Inc agreed to be acquired by CVC Capital Partners Ltd and the Canada Pension Plan Investment Board (CPPIB) in a $4.6 billion deal, after merger talks with market leader PetSmart Inc stalled last month due to antitrust concerns.

Tight inventories, rising prices hurt U.S. home sales

WASHINGTON (Reuters) – U.S. home resales fell in October as a persistent shortage of properties limited choice for potential buyers and pushed up prices, suggesting some softening in the pace of the housing market recovery after strong gains early this year.

Tyson Foods quarterly sales beat estimates; shares soar 10 percent

(Reuters) – Tyson Foods Inc , the biggest U.S. meat processor, reported better-than-expected quarterly sales on Monday, sending its shares up by over 10 percent as strong demand for chicken products and a boost from its purchase of sausage seller Hillshire Brands buoyed results.

NY probing alleged ‘ghosting’ of forex options

NEW YORK (Reuters) – New York Attorney General Eric Schneiderman’s office is investigating the posting of false bids and offers in the foreign exchange options market for emerging market currencies, a person familiar with the matter said on Monday.

E.coli outbreak looks set to infect Chipotle’s same-outlet sales

(Reuters) – Same-restaurant sales at Chipotle Mexican Grill Inc, hit by an E.coli outbreak at its restaurants, look set to decline for the first time since the burrito chain was spun off from McDonald’s Corp in 2006.

Elliott Management takes 6.4 percent stake in ‘undervalued’ Alcoa

(Reuters) – Hedge fund Elliott Management Corp disclosed a 6.4 percent stake in “undervalued” Alcoa Inc on Monday, sending the aluminum producer’s shares up as much as 6.3 percent.

Icahn says may push for new AIG director, discloses stake

(Reuters) – Activist investor Carl Icahn said he may propose adding a new director to American International Group’s board , saying Peter Hancock, AIG’s chief executive, was unlikely to “sincerely consider” his suggestion to split the company into three.

Swiss Bank “Goes There”, Applies Negative Rates To Retail Deposits

Back in September in “How Mario Draghi Can Force The Swiss National Bank To Go ‘Nuclear On Depositors,†we discussed the implications of the ECB’s (likely) decision to plunge further into NIRP-dom at the bank’s December meeting.

In short, DM central banks – with the possible exception of the Fed which is about to create a rather meaningful policy divergence with its core CB brethren – are in a proverbial race to bottom. It’s a beggar-thy-neighbor monetary policy regime and the more stubborn inflation expectations prove to be, the more aggressive the tit-for-tat easing, as everyone involved scrambles to protect their currency in the face of incessant competitive devaluations on all sides.

As we outlined in great detail in the post linked above, the ECB’s ultra dovish lean has the potential to create a lot of problems for the Riksbank, the Norges Bank, and the SNB.

Sweden is running out of options for a QE program that’s already broken once (see here and here) and although Stefan Ingves will probably tell you there’s more room to cut in the event Draghi moves on the depo rate, the Riksbank is already at -0.35 and the housing bubble has reached epic proportions. Of course staying on hold in the event of an ECB cut means the krona will soar and then, well, there’s goes any hope of hitting the elusive inflation target.

Norway, on the other hand, can’t even begin to think about QE because frankly, they’re too rich …

“Get Out Of Your Trucks And Run Away”: US Gives ISIS 45 Minute Warning On Oil Tanker Strikes

Last week, in the wake of Russian and US airstrikes on ISIS oil convoys, we asked three important questions:

1. Who are the commodity trading firms that have been so generously buying millions of smuggled oil barrels procured by the Islamic State at massive discounts to market, and then reselling them to other interested parties? In other words, who are the middlemen?

   Can it possibly be true, as officials now claim, that the Obama administration refrained from bombing Islamic State oil trucks because Washington thought the group was “only†making $100 million per year instead of $400 million?

   Is it likely, considering how cavalier the US is about collateral damage from drone strikes, that The Pentagon refused to take out Islamic State’s revenue stream because the military was afraid of killing a few “innocent†truck drivers who by definition knew they were transporting illegal crude for a terrorist organization?

The first question is, for now anyway, unanswerable. As to the second and third, here’s what we said:

Perhaps the US overestimated the effect its airstrikes were having on Islamic State’s oil production capabilities and perhaps The Pentagon was concerned with killing innocent truck drivers, but it could also be that, as Sergei Lavrov suggested earlier this month, the US has until now intentionally avoided hitting ISIS where it hurts in order to keep them in the game and ensure they can s …

Why Is The NY Attorney General Not Prosecuting The Real FX Spoofing Criminalgos

In a world where every market is rigged and manipulated – either by central banks, by algos, or by human actors eager to “get rich quick” – we doubt many will care that the New York Attorney General has finally figured that the FX market was also rigged by spoofing (something we have pointed out since 2013), and yet this latest development is worth pointing out.

The reason for that is not so much the companies which are named in this latest crackdown on widespread manipulation in the world’s most important market (now that all central banks are engaged in currency warfare) but which are not.

According to Bloomberg, the NYAG is investigating possible manipulation in foreign-exchange trading, according to a person familiar with the matter, aiming more scrutiny at a market already tainted by scandals that have led to billions of dollars in fines. The new investigation of foreign-exchange options comes after several banks paid nearly $6 billion earlier this year for colluding to rig currencies. Only there they rigged FX using the oldest trick in the book: anonymous bandwagoning using chat rooms. This time the focus is on what Nav Sarao was blamed for doing when he “caused” the 2010 Flash Crash.

The investigation centers on brokers who may be placing fake orders, a technique sometimes called spoofing, according to the person. These practices are also referred to as ghosting, because they create the impression of activity that isn’t really there.

Who is implicated? According to Bloomberg, Schneiderman has sent subpoenas for records to interdealer brokers including TFS-ICAP, Tullett Prebon Plc, BGC Partners Inc. and GFI Group Inc.

…

Saudi Arabia Sentences Poet To Death For “Renouncing Islam”

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

A Palestinian poet and leading member of Saudi Arabia’s nascent contemporary art scene has been sentenced to death for renouncing Islam.

Fayadh, 35, a key member of the British-Saudi art organisation Edge of Arabia, was originally sentenced to four years in prison and 800 lashes by the general court in Abha, a city in the south-west of the ultraconservative kingdom, in May 2014.

But after his appeal was dismissed he was retried last month and a new panel of judges ruled that his repentance did not prevent his execution.

Fayadh’s supporters believe he is being punished by hardliners for posting a video online showing the religious police (mutaween) in Abha lashing a man in public. “Some Saudis think this was revenge by the morality police,” said Kareem.

The case highlights the tensions between hardline religious conservatives and the small but growing number of artists and activists who are tentatively pushing the boundaries of freedom of speech in Saudi Arabia, where cinema is banned and there are no art schools.

– From the Guardian article: Saudi Court Sentences Poet to Death for Renouncing Islam

If ISIS had sentenced an internationally renowned poet to death on trumped u …

U.S. Stocks Edge Lower

U.S. stocks slipped Monday, giving back ground after last week’s sharp rally.

New York Opens Probe Into Currency Manipulation

The New York Attorney General has opened an investigation into possible manipulation of options contracts tied to currencies of developing nations, according to a person familiar with the matter.

Swiss Bank Data Thief: ‘I’d Do It Again’

Lutz Otte netted more than $600,000 from passing stolen Swiss bank client data to German tax authorities. Now Switzerland proposes easing bank-secrecy rules to allow cooperation with foreign agencies when data is stolen.

The Moneyologist: How to avoid a nightmare at Thanksgiving

What do you do when you have a big, ungrateful family?

How to stop Pfizer’s faux-Irish tax ripoff

The U.S. Treasury is going after inversions, but drug companies’ vulnerability is Medicare, says Tim Mullaney.

The Tell: Hedge-fund diversification shrinks after rout in health-care sector

As stocks favored by hedge funds turned in their worst three-month performance in seven years, more hedge funds are starting to put their eggs into fewer baskets, resulting in some of the least diverse portfolios in 30 years, according to Goldman Sachs.