02Aug2016 Market Update: US Indexes Continue Sliding In Afternoon Trading, WTI Crude Falls To The 39 Handle, US Dollar Falls Below 95 And Gold Continues To Melt Upward

Here is the current market situation from CNN Money

U.S. consumer spending exits second quarter with strong momentum

WASHINGTON (Reuters) – U.S. consumer spending rose more than expected in June as households bought a range of goods and services, showing underlying strength heading into the third quarter.

Wall Street pulled down by automaker, healthcare stocks

(Reuters) – Wall Street was lower on Tuesday following tepid economic data and losses in healthcare and consumer discretionary stocks.

Fed’s Kaplan urges patience in raising rates, points to global risks

BEIJING (Reuters) – A raft of global risks that could adversely affect the United States remains on the horizon and requires close monitoring, Dallas Federal Reserve Bank President Robert Kaplan said on Tuesday.

U.S. July auto sales miss estimates as pent-up demand slackens

DETROIT (Reuters) – Four major automakers in the U.S. market on Tuesday reported July vehicle sales slightly below expectations as the pent-up demand that has helped drive sales since 2009 plays itself out.

Pfizer in $486 million settlement of Celebrex, Bextra litigation

NEW YORK (Reuters) – Pfizer Inc on Tuesday said it has reached a $486 million settlement of litigation accusing it of causing big losses for shareholders by concealing safety risks associated with its Celebrex and Bextra pain-relieving drugs.

OpenTV owner settles patent dispute with Apple

NEW YORK/ZURICH (Reuters) – Swiss digital TV security company Kudelski on Tuesday reached a settlement with Apple Inc, ending a patent dispute in the United States and Europe and removing a threat to Apple’s video streaming features in devices sold in Germany.

Emerson Electric to sell businesses for $5.2 billion

(Reuters) – Emerson Electric Co , a maker of factory automation equipment, said it would sell two units for a total of $5.2 billion as the company focuses on its high-growth businesses.

China regulator says Didi, Uber deal will need Mofcom approval

BEIJING (Reuters) – A merger between Chinese ride-hailing firm Didi Chuxing and the China unit of U.S. rival Uber could face its first hiccup after China’s commerce ministry (Mofcom) said on Tuesday it had not received a necessary application to allow the deal to go ahead.

Mosaic CEO sees opportunities to buy miners’ fertilizer assets

(Reuters) – Miners that produce a diverse commodity mix may be willing to part with fertilizer assets, creating buying opportunities for producers of potash and phosphate, Mosaic Co Chief Executive Joc O’Rourke said on Tuesday.

ETF Inflows Soar To $43 Billion In July, Most Since 2014

According to our friends at TrimTabs, contrary to speculation that “money remains on the sidelines”, far from the “most hated rally ever”, the month of July saw a near-record $43.0 billion in new cash added to bond, commodity, and equity exchange-traded funds in July, the biggest monthly inflow since December 2014, when these funds hauled in $50.7 billion.

Why the dramatic allocation away from cash and to risk assets? “Fund flows suggest market participants are as confident as ever that central bank intervention will keep inflating asset prices,” said David Santschi, chief executive officer at TrimTabs.

As Santschi points out, “the only major asset class with significant outflows last month was European equities.” Europe-focused equity ETFs shed a record $4.5 billion, equal to 10.5% of their assets.

In a research note, TrimTabs reported that July’s inflow into ETFs was equal to almost half of the year-to-date inflow of $103.2 billion. U.S. equity ETFs alone took in $27.9 billion, equal to 2.0% of their assets, the biggest monthly inflow since December 2014.

“Several of the riskiest areas of the market, including emerging markets stocks and foreign bonds, had massive inflows,” said Santschi. “Such enthusiasm is a cautionary sign from a contrarian perspective.”

Perhaps that’s true, but keep in mind that in just three weeks that the buyback blackout period will be over and companies will rush to take the place of investors as marginal buyers, in the form of stock repurchases. And, as Goldman reiterated over the weekend, 2016 is about to be another record for buybacks, which are now expected to …

QE And Helicopter Money Questions Answered

By Chris at www.CapitalistExploits.at

I came up with the idea of “World Out of Whack” while out on a training run. With all the insanity in financial markets, documenting those which are weirder than a 3-dollar bill would make for an interesting exercise. And besides, we’re covering these markets for our own personal investment and trading purposes.

In last week’s edition we discussed helicopter money.

(if you haven’t read it yet, I encourage you to do so here)

I received a deluge of emails as a result. I do read them all but simply cannot respond to all of them – my apologies.

There were two main themes of questions emanating from the article, and in today’s podcast I cover them both. It is short and sweet and I hope you enjoy it.

– Chris

EU’s “Lyin'” Jean-Claude Juncker Keeps “Little Black Book” Of People Who Betray Him

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

Jean-Claude Juncker, head of the European Commission, is most famous for a 2011 quote about the Greek financial crisis, during which he stated:

When it becomes serious, you have to lie.

But that’s just one of many disturbing statements from the man. In 2014, The Telegraph published a list of his most outrageous quotes.

As such, here’s some additional evidence of what a sleazy weasel this man is.

Juncker on EU monetary policy

“I’m ready to be insulted as being insufficiently democratic, but I want to be serious … I am for secret, dark debates”

Juncker on British calls for a referendum over Lisbon Treaty

“Of course there will be transfers of sovereignty. But would I be intelligent to draw the attention of public opinion to this fact?”

Juncker on French referendum over EU constitution

“If it’s a Yes, we will say ‘on we go’, and if it’s a No we will say ‘we …

As Oil Crashes Under $40, How Much Further Can It Drop

Well that escalated quickly. Having toyed with the $39-handle yesterday, this morning’s plunge has erased those stops:

… and WTI is set to test the early April lows on the way back to 2016 lows…

What is next for oil now that key support is broken?: some thoughts from BofA’s chief technician, Paul Ciana:

Oil has reached the triangle top target (40.80) we reported on in early July. Today oil is extending its decline, breaking the 200d SMA and testing support at the round number of $40. Short term measurements shown in Table 1 and Table 2 suggest oil could bounce this week (as much as a 65% possibility) and test resistance at $43.18 or $44.50. However that bounce may be short lived and we think sold. The weekly chart shows momentum isn’t oversold yet and deeper Fibonacci retracement levels at $38.86 and $35.84 could be reached as a larger oil market bottom pattern forms. Oil in the mid $30’s which is near the 61.8% retracement and bottom of the weekly Ichimoku cloud would be a more technically convenient long trade scenario.

Price action has moved to the center of the weekly Ichimoku cloud. The cloud offers support as low as $35.40 and r …

Why Investors Everywhere Should Watch Japan’s Bond Market

Japan has become the land of the rising bond yields. Given the massive rally in bonds globally this year, it merits close attention.

Japanese Banks Show Glimmer of False Hope

Japanese banks reported strong trading income, generated by selling down a dwindling portfolio of government bonds. This won’t last.

BMW: Why It’s No Time to Mount This Motor Cycle

The German car maker is investing heavily to compete with the likes of Tesla, just as the consumer buying cycle hits an inflection point.

The Technical Indicator: Charting the S&P 500’s near-term technical test

The major U.S. benchmarks are off to a soft August start, pulling in from the 2016 peaks. Against this backdrop, the S&P 500 is pressing first support — spanning from about 2,155 to 2,159 — an area defining the immediate bull-bear battleground.

Amy Hoak’s Home Economics: Need to buy a house fast after selling yours? Don’t panic, here’s what to do

In fast-moving housing markets, many sellers worry that once they’ve found someone to buy their place, they won’t have enough time to secure another home for themselves.