12Jan2016 Market Update: Markets Slip At The Opening, Oil Falls To Support, Analysts Looking For Upwards Pressure

Here is the current market situation from CNN Money

North and South American markets are mixed today. The IPC is up 0.41% while the S&P 500 gains 0.07%. The Bovespa is off 1.06%.

-70.79

31.25%

California board rejects Volkswagen’s diesel fix plan

(Reuters) – The California Air Resources Board said on Tuesday it had rejected Volkswagen AG’s plan to fix 2.0 liter diesel cars with software that allow them to emit up to 40 times legally allowable pollution.

Oil slump nears $30 a barrel mark on unabated output

NEW YORK (Reuters) – Crude oil prices lost more than 2 percent on Tuesday, extending a relentless selloff to trade within cents of $30 a barrel for the first time in 12 years on concerns about fragile Chinese demand and the absence of restraint in global production.

Wall St. rally loses steam as oil prices tumble

(Reuters) – U.S. stocks were flat in afternoon trading on Tuesday, after an early rally was wiped out as crude oil prices once again held the markets hostage.

Ford unveils resurrected Lincoln Continental, targets China market

(Reuters) – Ford Motor Co unveiled on Tuesday a new luxury flagship full-size Continental sedan aimed at Chinese and American consumers.

BlackRock reshuffles senior leadership of investment teams: memo

NEW YORK (Reuters) – BlackRock Inc on Tuesday informed staff that it was reshuffling the managers of some of its most important investment units, including its stock and bond-picking businesses, according to an internal memo seen by Reuters.

High U.S. job openings point to pick-up in wage growth

WASHINGTON (Reuters) – U.S. job openings rose in November and employers appeared to have trouble finding qualified workers, a trend that could trigger a pick-up in wage growth this year.

GM unveils technology to help avoid child heatstroke deaths

DETROIT (Reuters) – General Motors Co said on Tuesday it will introduce a new safety system to remind drivers to check for children in the rear seats, and that it could eventually develop features to detect forgotten children.

Airbus shrugs off China concerns after outselling Boeing

PARIS (Reuters) – Europe’s Airbus is unperturbed by China’s financial turmoil, sticking to robust demand forecasts on Tuesday after beating arch-rival Boeing in the annual tally of global aircraft orders, despite failing to close a gap on total deliveries with the world’s largest jetmaker.

Fed hikes need to be gradual, risk hurting emerging world: IMF chief

PARIS (Reuters) – Further interest rate hikes by the U.S. Federal Reserve should be gradual or they risk hurting already fragile emerging economies, where many companies borrow in dollars, the head of the International Monetary Fund said on Tuesday.

Sharp Squeeze, Highest Foreign Central Bank Demand Since 2009 Lead To Scorching 3 Year Auction

It just never fails.

Earlier today, the 3 Year was the only place on the curve that was trading special in repo, at a rate of -0.35% as shown in the Stone McCarthy chart below, with no shortages at any other point:

That, as regular readers know, has been a nearly flawless predictor of auction strength, and the potential for a short squeeze into the 1pm issuance.

Sure enough, moments ago with the When Issued for today’s $24 billion in 3 Year paper trading at 1.188%, we were confident that as a result of the substantial short overhang, the auction would price well through the WI. It did so, and by a mile: the final high yield print was a whipping 1.174%, stopping some 1.4 bps through the When Issued.

So much for the pricing dynamics.

However, demand itself was scorching as well. While the Bid to Cover dipped modestly from 3.14 a month ago to 2.944, it was the surge in Indirect interest, aka foreign central banks, that made this auction memorable: at 62.8%, it was the highest since November 2009. And with Directs taking down 9.4% of the auction, it meant that Dealers would end up with just 27.8% of the final allocation: this in turn was the lowest since November 2009.

And so, once again, we get vivid proof that whenever stocks are suffering from a Risk Off moment, investors continue to pile into the safety of US paper, be it in the primary or secondary market.

The Real Value Of A Powerball Ticket

Submitted by Matt McCaffrey via The Mises Institute,

Alex Tabarrok has a fun post calculating the monetary value of a Powerball ticket. He estimates that, as of the most recent drawing, each $2 ticket carries an expected monetary value of roughly $2.73. Superficially then, it’s worthwhile to buy one. However, Tabarrok also points out this is only true for a simple expected value calculation; after accounting for taxes and the possibility of a shared prize, a ticket’s monetary value is actually substantially lower (around $.75), making it a poor investment.

So why do people buy them? Are consumers hapless rubes throwing away their hard-earned money in exchange for nothing? Not necessarily.

The reason is simple: there’s much more to valuation and choice than expected monetary value. In fact, I suspect almost no one buys a ticket with any such calculation in mind. Rather than a cold estimate of the probability of future returns, the Powerball actually illustrates the subjective theory of value.

There are many ways for people find value in the Powerball beyond its expected monetary payoffs. Tabarrok observes, for example, that people find pleasure in anticipating the drawing. Such excitement is actually a major attraction of games of chance, where players have no control over the outcome.

In fact, I doubt most people playing the Powerball seriously believe they’ll win. Instead, people treat a ticket as the price of daydreaming about what they’d do with an enormous pile of cash. You can’t win without playing, so people pay a small amount as a way to justify spending their scarce time imagining their own Scroo …

The Arrests Begin: Sweden Police Scramble To Respond To Refugee Sex Assault Coverup

On Monday, we brought you œMassive Coverup Exposed In Sweden As Media, Cops Hid Migrant Sex Attacks in which we detailed an evolving story out of Stockholm where police and some members of the media stand accused of covering up a wave of sexual assaults that allegedly occurred at a festival in August of last year.

According to Nyheter Idag‎, a reporter for the prominent daily Dagens Nyheter had an opportunity to talk with police about the attacks but ultimately shied away from the story when it became apparent that many of the accused were migrants.

Just a day before the Nyheter Idag story was published, Dagens Nyheter ran its own account of the incident and blamed police for covering up the attacks.

That certainly looked like an effort to get out ahead of the Nyheter Idag exposé but whatever the case, someone (or several someones) apparently took it upon themselves to keep the festival assaults from getting publicized for fear of sparking an anti-migrant backlash. Here’s what we wrote on Monday:

If Nyeter Idag’s allegations are true, it certainly seems possible that Dagens Nyheter was under political pressure to avoid the story if possible. Meanwhile, if Dagens Nyheter’s account is accurate, it appears the police could have been under similar pressure. After all, it’s the politicians that set the agenda, the media simply perpetuate it and the police simply enforce it, so it’s difficult to believe that the media and the police conspired alone to cover up the attacks.

Long story short, the attacks in Cologne have made it impossible to sweep the Stockholm assaults under the rug and now, authorities and politicians are rushing to “investiga …

Oil Resumes Retreat as Dollar Rises

Oil prices flipped back down to losses, with a dollar rally helping a slate of traders betting on oil’s continuing fall toward $30 a barrel.

Stocks Pare Gains as Oil Turns Negative

U.S. stocks pared early gains Tuesday as a renewed drop in oil prices pushed energy shares down further. The move lower occurred even as Chinese stocks managed to eke out a gain.

How to Profit From Rising Rents: Build Apartments

After six years of rising apartment rents in U.S. cities, investors from all corners of the real-estate industry are piling into new projects in a bet the boom still has a long way to run.

November 2015 JOLTS Job Openings Year-over-Year Growth Rate Marginally Improved

Written by Steven Hansen

The BLS Job Openings and Labor Turnover Survey (JOLTS) can be used as a predictor of future jobs growth, and the predictive elements show that the year-over-year growth rate of unadjusted private non-farm job openings marginally improved from last month. The growth rate trends marginally improved in the 3 month averages, but the 2015 year-to-date averages continue to decline.

Alcoa’s stock plunges to near 7-year low

Alcoa Inc.’s stock tumbles to the lowest level since the Great Recession, as the aluminum giant kicks off fourth-quarter earnings season with mixed results.