07Jan2016 Market Close: Averages Close Down After China's Market 'Crash', WTI Closes At $33 As Many Investors Question If This Is A Just A Correction

Written by Gary

US markets closed down where the DOW settled at -392 after drifting to under 400 points this afternoon. The small caps closed down 3% and the Spooz was down 2.3%. MACD indicates we might see an up day tomorrow, but this time it may be different. Oil closed down at $33.17 and gold melted up to $1109.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.
	Wall Street tumbles on China worries NEW YORK (Reuters) – The S&P 500 posted its largest daily drop since September on Thursday as concerns over the health of the Chinese economy and a relentless slide in oil prices rattled investors.
	Fed’s Evans favors slower interest rate path in 2016 MADISON, Wis. (Reuters) – Chicago Federal Reserve President Charles Evans said on Thursday his view of the U.S. interest rate path in 2016 was consistent with two hikes, and cautioned that monetary policy must take into account the potential for lower economic growth in the long term.
	Fed watching China stocks rout, lawmakers mum on yuan slump WASHINGTON (Reuters) – The Federal Reserve was closely monitoring the Chinese equities selloff that shook world markets on Thursday, while U.S. lawmakers were uncharacteristically silent on a further deterioration in the value of the yuan currency.
	Oil down again to 12-year low; $30 handle looks more likely NEW YORK/LONDON (Reuters) – Oil prices fell for a fourth day on Thursday, lurching again to 12-year lows as new financial market tumult in China brought a $30 per barrel handle within view.
	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.
	Exclusive: Telecom Italia, Oi in talks as Brazil signals ease in rules – sources SAO PAULO/BRASILIA (Reuters) – Oi SA , Brazil’s most indebted phone carrier, has started talks with the controlling shareholder of rival TIM ParticipaÃ§Ãµes SA over a potential merger, with discussions initially focusing on governance issues, two sources with direct knowledge of the matter said on Thursday.
	Exclusive: Blackstone to launch hedge fund platform Senfina in Britain LONDON (Reuters) – Blackstone Group is planning to bring its multi-manager hedge fund platform Senfina Advisors to Britain, three sources with direct knowledge of the move told Reuters.
	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.
	Shire, Baxalta to announce merger as soon as Monday: sources (Reuters) – Rare disease drugmaker Shire Pharmaceuticals Plc is preparing to announce its roughly $32.5 billion acquisition of U.S. peer Baxalta International Inc as early as Monday, according to people familiar with the matter.
	Bloodbath You know it’s bad when… THERE IT IS 7pm ET pic.twitter.com/ufjczF1cYY — Ivan the K „¢ ? (@IvanTheK) January 7, 2016 But, but, but… Fed… FANGs… Decoupled… Services… Netflix… Unicorns… Cramer… The day started badly (as China devaluation stress crushed carry trades and sucked liquidity out of the world, slamming USDJPY, US stocks, bond yields, credit, crude, and copper lower)…no late-day rally today! *CANADA STOCKS ENTER BEAR MARKET AFTER 20% DROP FROM SEPT. 2014 All that hope as China lifted its circuit-breaker rule and crude briefly rallied… but stocks carnaged back to overnight lows late in the day… Another bounce into the European close then SELL MORTIMER SELL into NYMEX close
	These Are The 10 Companies Most Hated By Wall Street Two months ago, we revealed the list of stocks most hated by the buy-side: that increasingly clueless cabal of Hotel California groupies which, unable to do fundamental analysis (thanks to the Fed) is forced into the same trades and then, when a paradigm shift strikes (as happened ever so frequently over the past year) is crushed under their own and their peers’ weight leading to the worst hedge fund performance year since 2008. We said to go long these names in advance of hedge fund liquidations and collateral and margin calls. Incidentally, the trade generated substantial alpha in the past 6 weeks. The full list can be found here. Today we were not at all surprised to find that the buyside’s revulsion toward some of the worst (if better performing) stocks has spread and hit the sellside. Acording to Bloomberg, “analysts” are already ratcheting down their expectations for U.S. stocks, while various economic models are also moving downwards. As a reminder, we have been covering the gradual conversion of banks such as JPM, Citi, UBS and today, BofA, who have all said to no longer “buy the dip”, but to “sell the rip” …
	As The Saudi Economy Implodes, A Fascinating Solution Emerges: The Aramco IPO Earlier today we reported that when it comes to Saudi Arabia, things are going from bad to abysmal, with the market is clearly aware of it. Saudi riyal forwards hit their highest level in almost two decades as oil plummeted: twelve-month forward contracts for the riyal climbed 260 points, and set for the steepest close since December 1996 on growing speculation the world’s biggest oil exporter may allow its currency to slide against the dollar for the first time since 1986 (incidentally, Bank of America’s “Number One Black Swan Event For The Global Oil Market In 2016”). Alongside this, Saudi default risk has also been rising, and as of this morning Saudi CDS traded wider than Portugal: The reason for this suddenly quite dire outlook on Saudi Arabia is that as the kingdom has made very clear over the past year, it will continue with a strategy of oversupplying crude even if it means sending its fiscal deficit soaring, forcing the country to draw down on its reserves, and load up on debt.
	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.
	The December Jobs Report: Why China Matters If Friday’s jobs report shows a slowdown in hiring, it will likely be a blip rather than the beginning of a new trend.
	Oil Prices Finish Below $34 Oil prices slid to levels not seen in more than a decade Thursday, hammered by continuing market turmoil in China, the world’s second-biggest oil consumer.
	Market Extra: Here’s how China’s yuan drives the global selloff The weakening yuan has had such a pronounced impact on markets around the globe for one overarching reason: A weaker currency affects China’s ability to continue being the primary driver of global growth.
	Market Extra: Here’s why investors will be watching the yuan in 2016 A sudden, sharp drop by the Chinese yuan “and Chinese stocks “has far reaching consequences for global equity markets, as indexes from Asia to North America posted massive losses.