03May2016 Market Update: DOW Down Triple Digits, Crude Remains Weak, US Dollar Showed Strength This Morning, Short-Term Indicators Very Bearish, Sizable Selloff Possible

Here is the current market situation from CNN Money

Steven Cohen: hedge fund crowding caused major February loss

LOS ANGELES (Reuters) – Billionaire investor Steven Cohen said that too many hedge funds placing the same types of bets contributed to sharp losses for his $11 billion Point72 Asset Management earlier this year.

Wall Street drops more than 1 percent as growth fears resurface

(Reuters) – Wall Street was sharply lower, with the three major indexes falling more than 1 percent in late morning trading on Tuesday, after weak economic data out of China and Europe rekindled fears of a slowing global economy.

U.S. prosecutors consider more charges against ex-CEO Shkreli

(Reuters) – Former drug executive Martin Shkreli, who last year became a lightning rod for outrage over soaring prescription drug prices, may face additional U.S. charges of securities fraud, a federal prosecutor said on Tuesday.

New drugs fuel strong Pfizer results; company raises 2016 forecasts

(Reuters) – Pfizer Inc, which last month abandoned its $160 billion quest for Allergan Inc, reported quarterly results that blew past analyst estimates on sales of its new cancer and arthritis treatments and the acquisition last year of hospital products company Hospira.

Halliburton aims to boost weak businesses after failed Baker Hughes deal

(Reuters) – Halliburton Co said it would consider acquisitions to bolster its weaker businesses as the world’s No.2 oilfield services company looks to move on after abandoning a deal to buy smaller rival Baker Hughes Inc .

Global factory growth nearly stalled in April: PMI

LONDON (Reuters) – Global manufacturing growth almost stalled last month as rising price halted a pick-up in new orders, a survey showed on Tuesday.

Exclusive: Venezuela’s PDVSA quietly issues new debt to pay off suppliers

CARACAS/HOUSTON (Reuters) – Venezuelan state oil firm PDVSA has issued at least $310 million in debt to companies including General Electric Co as it negotiates private issuances to pay off its suppliers, industry sources told Reuters, stretching the finances of a company that bondholders already worry is on its way to default.

Fed’s Lockhart: Two rate hikes this year ‘certainly possible’, flags Brexit risk

AMELIA ISLAND, Fla. (Reuters) – The United States could see two further interest rate rises this year but uncertainties abound including the impact on the U.S. economy should Britain vote to leave the European Union, Atlanta Fed President Dennis Lockhart said on Tuesday.

Big pharma dominates ranking of stocks with best five-year returns

NEW YORK (Reuters) – U.S. pharmaceutical companies dominated an annual global ranking of top 10 large-cap stocks with the best five-year returns, according to an analysis released on Tuesday by Boston Consulting Group.

“We Expect A Sizeable Sell-Off” – One Hedge Fund’s Four Mega-Bearish Trades

From our friends at Fasanara Capital we get their latest contrarian – and very bearish – Investment Outlook, which can be summarized as follows: “Reflation Phase To Be Temporary, More Downside Ahead”, and which also contains four key conviction trade ideas over the next 12 months.

This is what fund manager Francesco Filia cautions about the market over the next year:

Earlier on in 2016, markets went off to panic mode out of (i) fears over China’s messy stock market and devaluing currency, (ii) plummeting oil price to levels where it could trigger covenant breaches/defaults, (iii) FED hiking rates and a strong US Dollar strangling Commodities and their producing countries. In response to such risks, market action was legitimate but exaggerated in magnitude and speed, leading us into calling for ˜random and violent markets’ (Read). ˜Random’ as they often refuse to follow the logic of fundamentals, ˜violent’ because they shift with great momentum when the narrative changes and the tide turns.

Today, we believe markets are similarly illogical and over-reacting, this time on the way up. Illogical in believing those underlying risks have abated, for the only difference is the actual price of Oil, Renminbi, US Treasury yields, while no fundamental change has occurred. To us, no game changer between now and then, just a narrative shift.

The narrative of reflation is today dominant and can continue to propel markets for a while longer. But as we know the narrative changes fast, and when it does we can expect a quick re-pricing. As we re-assess the validity of the underlying risks, we expect …

Ken Rogoff’s Shockingly Simple Advice To Emerging Markets: Hoard Gold

Authored by Kenneth Rogoff, originally posted at Project Syndicate,

Are emerging-market central banks overweight in dollars and underweight in gold? Given a slowing global economy, in which emerging markets are probably very grateful for any reserves they retain, this might seem an ill-timed question. But there is a good case to be made that a shift in emerging markets toward accumulating gold would help the international financial system function more smoothly and benefit everyone.

Just to be clear, I am not siding with those – usually American far-right crackpots – who favor a return to the gold standard, in which countries fix the value of their currencies in terms of gold. After all, the gold standard’s last reign ended disastrously in the 1930s, and there is no reason to believe that a return to it would turn out any differently.

No, I am just proposing that emerging markets shift a significant share of the trillions of dollars in foreign-currency reserves that they now hold (China alone has official reserves of $3.3 trillion) into gold. Even shifting, say, up to 10% of their reserves into gold would not bring them anywhere near the many rich countries that hold 60-70% of their (admittedly smaller) official reserves in gold.

For some time, the rich countries have argued that it is in everyone’s collective interest to demonetize gold. Sure, we hold a lot of gold, these countries say, but that is a vestige of the pre-World War II gold standard, when central banks needed a stockpile.

Indeed, back in 1999, European central banks, seeing no reason to keep holding so much gold, entered a pact to start reducing their stocks in an orderly fashion. The sales made sense at t …

“The TTIP Is Doomed” – France Threatens To Reject Obama’s Huge Transatlantic Trade Deal

Following this weekend’s leak by Greenpeace demonstrating not only that the TTIP is driven entirely by narrow corporate interests, but that Obama is openly willing to reneg on his pro-environment agenda just to pass the Transatlantic Treaty at any cost, the blowback arrived earlier today when France became the first major European nation which threatened to reject the huge free trade deal between the U.S. and the European Union, because according to AP “it’s too friendly to U.S. business and probably doomed.”

Signs of trouble have been dogging the Trans-Atlantic Trade and Investment Partnership, a U.S.-EU free trade zone encompassing half the world economy, for months but only today have we seen the accumulated tension bubble up to the surface.

French president Francois Hollande said Tuesday that France “will never accept” challenges to its farming and culture in exchange for better access to U.S. markets. “That’s why at this stage, France says no,” the Socialist leader said at a conference on left-wing politics.

Earlier Tuesday, French Trade Minister Matthias Fekl told Europe-1 radio that negotiations “are totally blocked” and that a halt to talks “is the most probable option.” He insisted on better farming and environmental protections, adding that “in its current state, France cannot sign it.”

“Europe is giving a lot … but receiving very little in return,” he said.

In an unexpected twist to what was supposed to be a smoothly implemented treaty, European officials appear to be toughening their rhetoric after Greenpeace leaked large amounts of co …

Apple: What Will Make the Stock Tick Again

As Apple’s recent share-price travails show, the tech giant needs to be about more than just the iPhone. But the company faces challenges in trying to diversify its business. In that regard, the performance of the Apple Watch is telling.

Why Pfizer Is Loving the Weak Dollar

Pfizer shareholders can finally count the dollar as a friend instead of foe.

OnDeck’s Tumble: Can Online Lenders Handle a Downturn?

OnDeck shares fell sharply after the company had difficulty selling loans to investors in the first quarter.

Earnings Outlook: What to expect from Whole Foods earnings

Whole Foods is trying to turn around its business amid fears of cannibalization with its new 365 stores and competition with other grocers.

Earnings Outlook: What to expect from Tesla’s earnings

Tesla is seen posting a wider quarterly loss, but investors may hear plenty of other good news.

Earnings Watch: What to look for in Time Warner earnings

Media and entertainment company Time Warner Inc. will report earnings for the first quarter on Wednesday, before the market opens.