07Jan2016 Market Update: Correction Or Bear Market, That Is The Question As Investors Watch The DOW Drop Over 300 Points

Written by Gary

US stocks are on their worst start since 2000. The DOW is down 338 points and falling, the Spooz is off 2% and the US dollar has slipped to the mid 98’s.

Investors are questioning whether Wall Street is headed for bear market? For now it is just a correction.

Here is the current market situation from CNN Money
	North and South American markets are sharply lower today with shares in Brazil off the most. The Bovespa is down 3.76% while U.S.’s S&P 500 is off 2.05% and Mexico’s IPC is lower by 1.71%.

What Is Moving the Markets

Here are the headlines moving the markets.
	Apple buys artificial intelligence startup Emotient: WSJ (Reuters) – Apple Inc bought Emotient Inc, an artificial intelligence startup that reads people’s emotions by analyzing facial expressions, the Wall Street Journal reported.
	Out of flavor: Wall Street slashes targets on Chipotle (Reuters) – From the carnitas crisis of early 2015 to the more recent E. Coli outbreak. And now, tough love from Wall Street. Chipotle Mexican Grill Inc’s shareholders have never had it so bad.
	Wall Street swoons on China shock, oil slide (Reuters) – U.S. stocks were sharply lower on Thursday as market volatility in China and a relentless slide in oil prices unnerved investors, extending the shaky start to the year.
	China suspends market circuit breaker mechanism after stock market rout SINGAPORE/SHANGHAI (Reuters) – China will suspend its new stock market circuit breaker as of Friday, the Shanghai and Shenzhen stock exchanges said on their websites on Thursday, after the mechanism sparked sharp falls in the country’s volatile markets.
	China lets yuan slide, starts fight to halt turbulence SHANGHAI/LONDON (Reuters) – China allowed the biggest fall in the yuan in five months on Thursday, pressuring regional currencies and sending global stock markets tumbling as investors feared it would trigger competitive devaluations.
	Boeing delivers 762 jetliners in 2015, topping forecast NEW YORK (Reuters) – Boeing Co said on Thursday that it delivered 762 jetliners in 2015, exceeding its target of 755 to 760 planes.
	For many stocks on Wall Street, it’s already a bear market NEW YORK (Reuters) – With U.S. stocks now on pace for their worst start to the year since 2000, investors are questioning whether Wall Street is headed for a bona fide bear market. The truth is, many stocks are already there.
	Oil pares losses after dive toward 12-year low seen too far, too fast NEW YORK/LONDON (Reuters) – Oil lurched to new 12-year lows before paring some losses on Thursday, with some traders betting a rout triggered by fears over China demand and swelling U.S. stockpiles had run its course, for now.
	Yahoo looking to slash 10 percent or more of its workforce – Business Insider (Reuters) – Yahoo Inc is working on a plan to cut its workforce by at least 10 percent and it could start the process as early as this month, Business Insider reported, citing sources.
	China Matters Submitted by Lance Roberts via RealInvestmentAdvice.com, China Matters Over the past few days I have repeatedly heard the following statement: “China isn’t that important as it is only 7% of the U.S. economy.” While that may be a true statement in relation to the economy, it is a far different matter when it comes to the financial markets. With financial markets so closely correlated, what happens in China has a direct and immediate impact on U.S. markets. Beginning in 2014, China financial markets went parabolic as investors levered up to speculate. This is not the first time this happened, and is a sharp reminder of why the perils of leverage should not be readily dismissed. The problem is, as shown in the chart below, that what happens in China is not isolated just to China. As money flees those markets, it also rapidly exits the U.S. markets as fears of contagion spread. While the Chinese government has injected liquidity, suspended trading in almost half of the listed equities and encouraged pension funds to buy securities, arrested short-sellers and “disappeared” corporate executives, these actions have done little to stem the decline as investors “panic sell” in a rush to safety. That collapse, if history is any guide, is likely not done as yet which suggests that the financial rout in other markets are only just beg …
	OPEC Basket Crude Price Crashes Below $30 – Lowest Since 2004 With WTI trading with a $32 handle, collapsing below December 2008’s $32.40 lows briefly overnight, OPEC’s broad basket price for crude has also reached a worrisome milestone. Amid Saudi price cuts to Europe, the basket price was set at $29.71 today – the first print below $30 since April 2004. WTI broke 2008 lows overnight… and then ran stops to overnight highs… and following the inclusion of Indonesia’s crude oil price, OPEC’s basket price is back below $30… For the first time since April 2004… Source: OPEC This won’t end well.
	Silver Surges To Key Technical Level While Gold has been grabbing the “safe haven” headlines in recent days, this morning it is Silver’s turn. Having rallied 2.5%, Silver just broke its 50-day moving average for the first time in 2 months… Silver touches key technical level… For the first time in 2 months…
	Why China Shifted Its Strategy for the Yuan, and How It Backfired China’s moves to guide the yuan lower have set off a free fall in the currency and global market reverberations as investors pile on the bets against the yuan “ultimately a no-win situation for Beijing.
	China Markets Closed for Second Time This Week China’s stock market tumbled and scored its shortest trading day in its 25-year history, as Beijing’s growing tolerance of a weaker currency intensified concerns about capital flight and the health of the economy.
	Stocks Tumble on China Volatility A steep fall in Chinese stocks spilled over to global markets Thursday, as widening concerns over the world’s No. 2 economy pushed investors out of equities and commodities, intensifying markets’ turbulent start to the year.
	02 January 2016 Initial Unemployment Claims Rolling Average Insignificantly Improves. Weekly Initial Unemployment Claims The market (from Bloomberg) was expecting the weekly initial unemployment claims at 260 K to 280 K (consensus 272,000) vs the 277,000 reported. The more important (because of the volatility in the weekly reported claims and seasonality errors in adjusting the data) 4 week moving average moved from 277,000 (reported last week as 277,000) to 275.750. The rolling averages generally have been equal to or under 300,000 since August 2014.
	Market Snapshot: U.S. stocks swing to session lows on China worries U.S. stocks slumped to session lows on Thursday on the back of persistent worries about the health of the Chinese economy.
	5 spooky headwinds expected to show up this earnings season The U.S. fourth-quarter earnings season is about to kick off, and it promises to be ugly.