25Jan2016 Market Close: Markets Down Over 1.5%, DOW Off 209 Points, Gold Up, Crude Down

Written by Gary

Markets closed down with the DOW down over 200 points. The Spooz closed down over 1.5% along with the small caps. Crude continued its slide settling in the high 29’s and gold settled higher above 1100. Regardless the short-term indicators are relatively bullish and several analysts are seeing the rebound to continue.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.
	Top Twitter executives to leave company, CEO Dorsey tweets SAN FRANCISCo (Reuters) – Four senior Twitter executives are leaving the media company, CEO Jack Dorsey tweeted late Sunday night, the biggest leadership changes since Dorsey returned as chief executive as he struggles to revive the company’s growth.
	OPEC, Russia talk of oil teamwork, but Saudi talks of investment LONDON (Reuters) – Senior OPEC and Russian oil industry officials stepped up vague talk on Monday of possible joint action to remedy one of the worst supply gluts in decades, while Saudi Arabia signaled its resolve to allow the market to balance itself.
	Oil selloff resumes as record Iraq supply adds to glut NEW YORK (Reuters) – Oil prices recoiled 6 percent on Monday, again nearing the pivotal $30-a-barrel threshold before the close, after news that Iraq’s output reached a record last month returned attention to a market glut that sent prices to 12-year lows last week.
	Johnson Controls to buy Ireland-based Tyco for $16.5 billion (Reuters) – Johnson Controls Inc , a U.S. maker of car batteries and heating and ventilation equipment, agreed to acquire Ireland-based peer Tyco International Plc in a $16.5 billion deal that will lower its tax bill, the companies said on Monday.
	Sprint cuts 2,500 jobs, mostly in call centers: report (Reuters) – Sprint Corp has cut at least 2,500 jobs and closed six customer care centers, the Kansas City Star reported on Monday, citing company officials.
	Wall Street weighed down by energy stocks (Reuters) – Wall Street stumbled on Monday after its first positive week of 2016, pulled lower by further weakness in oil prices as energy shares led declines.
	Short-seller Carson Block launches hedge fund NEW YORK (Reuters) – Short-seller Carson Block, founder of research firm Muddy Waters LLC who exposed accounting problems and wrongdoing at a slew of Chinese companies, has launched a hedge fund investment firm, a filing with the U.S. Securities and Exchange Commission showed.
	McDonald’s all-day breakfast a hit, investors lovin’ it (Reuters) – McDonald’s Corp reported better-than-expected quarterly same-restaurant sales as the launch of all-day breakfasts proved to be a hit with diners in the United States and demand continued to recover in China.
	Saudi Arabia presents plan to move beyond oil RIYADH (Reuters) – Saudi Arabia outlined ambitious plans on Monday to move into industries ranging from information technology to health care and tourism, as it sought to convince international investors it can cope with an era of cheap oil.
	Why You Should Question “Buy-And-Hold” Advice Submitted by Lance Roberts via RealInvestmentAdvice.com, I recently received an email from an individual that contained the following bit of portfolio advice from a major financial institution: “Despite the tumble to begin this year, investors should not panic. Over the long-term course of the markets, investors who have remained patient have been rewarded. Since 1900, the average return to investors has been almost 10% annually…our advice is to remain invested, avoid making drastic movements in your portfolio, and ignore the volatility.” First of all, as shown in the chart below, the advice given is not entirely wrong – since 1900, the markets have indeed averaged roughly 10% annually (including dividends). However, that figure falls to 8.08% when adjusting for inflation. It’s pretty obvious, by looking at the chart above, that you should just invest heavily in the market and “fughetta’ bout’ it.” If it was only that simple. There are TWO MAJOR problems with the advice given above. First, while over the long-term the average rate of return may have been 10%, the markets did not deliver 10% every single year. As
	Capital Formation Collapses – IPO Market Crashes To Post-Crisis Lows Zero… nada… zip! That’s how many IPOs have started trading on US exchanges in 2016 so far… As Bloomberg reports, at this rate, January is on track for the slowest month for IPOs since December 2008, when no companies filed after the bankruptcy of Lehman Brothers Inc. In fact, January 2016 was globally the worst month for capital formation (IPOs) since August 2008… And not even the insiders are particularly hopeful… An IPO market recovery may take a while, said Tom Farley, president of NYSE Group Inc. “They will, by and large, IPO eventually. The question is when,” Farley said in a Bloomberg TV interview at the World Economic Forum in Davos, Switzerland. “It is likely a matter of months, not days or weeks.”
	Jim Bianco: “The Markets Are Telling Us There’s A Severe Issue Out There” Via Finanz und Wirtschaft’s Christoph Gisiger, James Bianco, president of Bianco Research, expects more turmoil to come and warns that there will be no easy way out of zero interest rate policy. The sigh of relief could be well heard on Wall Street. After days of heavy selling the stock market has calmed down somewhat at the end of last week. But according to Jim Bianco it’s too early for an all-clear signal. The influential market strategist from Chicago who is highly regarded among institutional investors expects equity prices to drop further. He’s also quite skeptical about the heavy-handed interventions of the authorities in China. With respect to the United States, he believes that there is going to be a massive liquidation in the oil patch. Mr. Bianco, stocks have taken a big hit. Is the sharp drop in equity prices justified or is it an emotional overreaction? There is an old line in the market, first coined by the economist Paul Samuelson. It says that the stock market has predicted nine of the last five recessions. There is some truth to that phrase. But I would also point out that predicting nine of the last five recessions is a much better track record than the consensus of economists. We wish they were that accurate, but they’re far worse. Every time the financial markets get volatile and messy like this it deserves attention because the markets are trying to tell us that there is a severe issue out there. It’s been coming from all over the place: We got a collapse in commodity prices and we got financial markets across the globe selling off, includi …
	WalMart Store Closures Leave Elderly Villagers With No Grocery Stores, Pharmacies Last week, WalMart doubled down on the wage hike debacle when the world’s largest retailer decided to give everyone a raise in February. The all-in cost will be around $2.7 billion. While some were surprised at the move, it was easy to see coming. Indeed, we’ve long said that the company’s decision to hike wages for its lowest-paid employees would eventually necessitate similar raises for workers higher up the corporate ladder. œThe wage hierarchy has been distorted and that distortion had nothing to do with merit, we wrote, back in August. œHigher paid employees don’t understand why everyone under them in the corporate structure suddenly makes more money and if people who are higher up on the corporate ladder don’t receive raises that keep the wage hierarchy proportional, they may simply quit which means that, for Wal-Mart, raising the minimum for the lowest paid workers to just $9/hour will end up costing the company around $1.5 billion if you include the additional raises the company will have to give to higher paid employees in order to retain their ‘talents’ and avoid a mid-level management mutiny. Sure enough, that’s exactly what happened – only the cost is far higher than even we anticipated. The problem is that when your business model revolves around œeveryday low prices, each and every additional penny you give to your employees is a penny that’s not passed on to customers as savings. That’s a problem, given how competitive the discount retail space has become. On top of that, margins are already razor thin and pinching them further has a dramatic impact on profitability as evidenced by the
	U.S. Stocks Fall as Oil Resumes Slide U.S. stocks fell Monday after notching their first week of gains this year, as oil prices resumed their slide.
	Oil, Stocks in Tightest Lockstep in 26 Years Oil and stock markets have moved in lockstep this year, a rare coupling that highlights intensifying fears about global economic growth.
	Time to Say Goodbye to Long Bull Market? A turbulent January has sent investors scrambling to consult their charts, where many are seeing signs that a nearly seven-year-old bull market in U.S. stocks is nearing an end.
	February 2016 Economic Forecast: Outlook Barely Positive Written by Steven Hansen Econintersect’s Economic Index declined and is barely positive – and still remains at the lowest value since the end of the Great Recession. The tracked sectors of the economy which showed growth were mostly offset by the sectors in contraction. Our economic index remains in a long term decline since late 2014.
	The 2016 USA Federal Budget Deficit Will Increase, In Relation To The Size Of The Economy, For The First Time Since 2009 from the Congressional Budget Office In 2016, the federal budget deficit will increase, in relation to the size of the economy, for the first time since 2009, according to the Congressional Budget Office’s estimates. If current laws generally remained unchanged, the deficit would grow over the next 10 years, and by 2026 it would be considerably larger than its average over the past 50 years, CBO projects. Debt held by the public would also grow significantly from its already high level.
	What to expect from eBay’s earnings eBay is scheduled to report fourth-quarter earnings after the bell Wednesday.
	Capitol Report: Inversions like Johnson Controls-Tyco to hit corporate tax collection, CBO says The nonpartisan Congressional Budget Office said it expects corporate tax revenue as a percentage of the economy to fall to 1.6% in 2026 from 1.8% in 2016, and blamed ˜inversions’ partly for the lost receipts.
	How missing out on 25 days in the stock market over 45 years costs you dearly Investors who attempt to time the market end up losing spectacularly, says Michael Batnick.