12Apr2016 Market Update: DOW Up Triple Digits, WTI Crude Trading In The High 41’s, US Dollar Steady In The Low 94’s, Indicators Remain Bearish

Here is the current market situation from CNN Money

North and South American markets are broadly higher today with shares in Brazil leading the region. The Bovespa is up 2.41% while U.S.’s S&P 500 is up 0.73% and Mexico’s IPC is up 0.36%.

Wall Street jumps as oil surges on report of output freeze

(Reuters) – A surge in crude oil drove strong gains on Wall Street on Tuesday after a report that Russia and Saudi Arabia had agreed to freeze output ahead of a producers meeting on Sunday.

Rise in U.S. import prices below expectations; petroleum costs jump

WASHINGTON (Reuters) – U.S. import prices rose in March for the first time in nine months as the cost of petroleum products increased, but the lingering effects of a strong dollar suggested inflation will continue to increase gradually.

IMF cuts global growth forecast, warns of stagnation risk

WASHINGTON (Reuters) – The International Monetary Fund cut its global growth forecast for the fourth time in the past year on Tuesday, citing China’s slowdown, persistently low oil prices and chronic weakness in advanced economies.

Ford plans to move Michigan offices into two new modern facilities

DETROIT (Reuters) – Ford Motor Co said on Tuesday it will modernize and consolidate its sprawling Dearborn, Michigan, engineering and headquarters facilities over the next decade into two Silicon Valley-style locations.

Uber says gave U.S. agencies data on more than 12 million users

(Reuters) – Uber Technologies Inc [UBER.UL] on Tuesday released its first ever transparency report detailing the information requested by not only U.S. law enforcement agencies, but also by regulators.

AB Inbev offers concessions in bid to win EU okay for SABMiller buy

BRUSSELS/LONDON – Anheuser-Busch InBev has formally informed European Union antitrust regulators of its plan to sell SABMiller’s premium European brands to try to secure approval for its $100 billion-plus takeover of the London-based brewer.

Band plays on, as global oil glut leaves supertankers in a huge jam

SINGAPORE (Reuters) – It may be the world’s biggest traffic jam.

Privacy, what privacy? Many Nordic tax records are a phone call away

OSLO/STOCKHOLM (Reuters) – When top earners’ tax returns are published in Finland, they call it “national envy day”. In Sweden, one phone call will get you your lawmaker’s tax bill. Norwegians’ fascination with each others’ taxes has been labeled “financial porn”.

EU regulators resume scrutiny of Halliburton, Baker Hughes deal

EU competition regulators have resumed their scrutiny of U.S. oil industry services group Halliburton Co’s plan to acquire smaller rival Baker Hughes , a deal which U.S. authorities say is uncompetitive and wants to block.

Indirect Bidders Surge In Strong 3 Year Auction

One month ago, when the Treasury sold 3 Year paper the reception was rather lukewarm when ahead of the March FOMC there was some concern that the Fed may actually hike. Now that any speculation of a rate hike has been shelved indefinitely, there was no problem for the US Treasury to sell this month’s batch of 3 Year paper. With the WI trading at 0.894% at 1pm, the high yield printed 0.890%, stopping 0.4 bps through the When Issued.

The Bid To Cover was in line with last month’s 2.710 rising fractionally to to 2.721 and still relatively low for the series, but it was the internals which saw a dramatic surge in foreign central banks and official entities, as the Indirect takedown soared from 44.7% to a whopping 56.0%, the highest since June 2013. Dealers were allotted 32.6%, far below the TTM average of 49.2%, while Directs rose modestly from 9.1% to 11.5%.

The curve’s reaction has been favorable and resulted in a floor to the selling which has accompanied today’s dramatic risk on euphoria driven once again by the usual suspect: a headline attributed to an unnamed political source.

Active Managers Defeated… Globally… Again

Submitted by Salil Mehta via Statistical Ideas blog,

One would think that active managers would eventually outperform somewhere after the negative press that ensued a year ago. And now that 2015 performance data has been properly audited and tabulated, we can see what the new results are.

We normally don’t delve into the same topic twice, but as with some matters there is ample public curiosity to see what might have changed. This is one of those times where is it is critical to revisit our numerous warnings about the skill of active managers in outperforming their benchmarks, particularly now. Over the past year, through today, a number of interesting folks (too many to list here but will do so on social media) at the tip-top of the investment community and in journalism have taken a key interest in the Indomitable benchmarks article. In it we showed that in all 17 mutually-exclusive risky segments of the U.S. markets, active managers underperformed their benchmarks.

The gap was so wild that it was probabilistically a once in a multi-thousand year event due to chance alone. In other words, they were specifically bad for your money, can’t blame it on luck, and the government has listened. And the article was one of the most popular ever for this site. Today we take a unique look at the 2015 data recently released by S&P Indices. We scan not just U.S. fund managers, but also examine fund managers in …

A “Massive” New Headache For Banks Has Emerged

We have closely watched the spring borrowing-base redetermination period for US shale drillers because for many cash burning oil and gas companies it could mean the difference between survival and a quick death in bankruptcy court, as it represents the semi-annual event that determines if they have enough liquidity to sustain operations for the next few quarters or, alternatively, if they have to hand over keys to creditors.

As we previewed most recently on March 28, while many companies have already utilized the max of their revolver facility and are thus not immediately in danger of seeing their borrowing base yanked from underneath them (good luck to the banks who hope to see companies return funds following a net working capital redetermination without lots of legal costs) such as the names listed below…

… “the companies most at risk may actually be those with that currently have some of the most highly utilized borrowing bases, ranging anywhere from 62% for Contango to 94% for Vanguard. It is these companies that will suddenly find themselves with zero incremental sources of liquidity as the banks proceed to whack anywhere from 30 to 50% of their borrowing base, leaving them scrambling to preserve liquidity and ultimately leading to bankruptcy court, in no small part under the pressure of secured and soon to be DIP lenders (and in most cases, the post reorg equity) who will demand the least amount of Enterprise Value be wiped out in the months before bankruptcy. Here are the names.”

What Is Paul Ryan Up To?

While many establishment Republicans would love Paul Ryan to emerge in Cleveland to rescue the party from what they think is a doomed presidential bid, as The Hill reports, some among their number recognize that any effort to take the nomination away from Trump or Cruz, if either goes to Cleveland with far more delegates than anyone else, could hurt the GOP for years.

Having surged from nowhere to “a contender” during March’s fiascos, April has seen Speaker Ryan’s odds of a nomination decline substantially…

But as The Hill asks – What is Paul Ryan up to? Republicans inside and outside the Beltway see the young Speaker and 2012 vice presidential candidate as a shining star for the party and a stronger general election opponent against Hillary Clinton than either Trump or Sen. Ted Cruz. Many would love Ryan to emerge in Cleveland to rescue the party from what they think is a doomed presidential bid.

Still, there are a number of reasons to think that Ryan, a policy wonk who is no wink-and-a-nod politician, has no intention of being the GOP standard-bearer this year.

Rules in place would make it difficult. The GOP’s current rules state that the nominee must win the majority of delegates …

The Fed’s Inflation Puzzle: The Dollar Piece Changes Shape

The Federal Reserve may be wrong to think the dollar’s past strength will keep pushing inflation lower.

Bank Earnings: Where to Look for Silver Linings

Banks have been hit with low rates and energy-sector defaults, but there are some factors within their control.

Pharma Guidance Is Bad, Timing Is Worse

Recent sales guidance from a handful of pharmaceutical companies comes at a particularly bad time.

Market Snapshot: Dow climbs 150 points as soaring oil revs up energy stocks

U.S. stocks climbed Tuesday as oil futures were on track to close at their highest levels of 2016, which was boosting energy shares.