20Dec2018 Market Close: Wall Street Slips Over 1.5%, DOW Fell 600 Points In Intraday Trading Closing Down 464 Points, Oil Renews Plunge, Sending Energy Sector Down 3%

Apple changes how it reports U.S. national security requests

Apple Inc on Thursday changed how it reports on U.S. national security requests for user data, bringing its procedures more in line with those of technology rivals such as Microsoft Corp and Alphabet Inc’s Google.

Apple to pull some iPhones in Germany as Qualcomm extends global wins

Chip supplier Qualcomm Inc won a second court skirmish in its worldwide patent battle with Apple Inc on Thursday, with the iPhone maker saying it would pull some older models from its German stores.

Treasury chief calls market reaction to Fed ‘overblown’

U.S. Treasury Secretary Steven Mnuchin said on Thursday that investors’ reaction to the Federal Reserve’s interest rate hikes was “completely overblown”, in an unusually direct comment on financial market activity.

Exclusive: China hacked HPE, IBM and then attacked clients – sources

Hackers working on behalf of China’s Ministry of State Security breached the networks of Hewlett Packard Enterprise Co and IBM, then used their access to hack into their clients’ computers, according to five sources familiar with the attacks.

U.S. senators write to regulators on Robinhood’s botched checking plans

A bipartisan group of U.S. senators sent a letter to regulators on Thursday expressing concern that financial technology startup Robinhood may not be offering full transparency to its customers over the botched launch of its new cash management service.

Nissan to lay off 1,000 Mexican workers, cites market challenges

Japanese carmaker Nissan Motor Co Ltd will lay off about 1,000 workers in Mexico at two factories, citing “challenging market conditions,” the company said on Thursday.

Oil prices tumble to lowest in more than a year as equities sell off

Oil prices fell about 5 percent on Thursday, hitting their lowest level in more than a year on worries about oversupply and the outlook for energy demand as a U.S. interest rate rise knocked stock markets.

GM to respond by January 7 to Canada union proposals to save Ontario plant

General Motors Co will respond by Jan. 7 to Canadian union proposals to keep an Ontario auto assembly plant open, the head of Canada’s largest private sector union said on Thursday.

ExxonMobil shelves Canada LNG export project

U.S. oil major Exxon Mobil Corp has withdrawn its WCC liquefied natural gas (LNG) export terminal in Canada from the environmental assessment process, it said on Thursday, signaling that the project has been shelved.

Shutdown Shudders Spark Dollar Dump As Powell Plunge Goes Global

No bounce after Powell crushed the Fed Put dream and then Fed’s Dudley chimed in today adding that “The Fed is not there to take away the market’s pain,” adding that The Fed “doesn’t care about market prices for themselves.”

In other words – to all the whiners who are seeing their ‘no brainer’ stocks sinking…

However, Dudley’s internal ‘bad cop’ quickly disappeared and out came the ‘good cop’ to rescue things: “if the economy starts to weaken, The Fed should definitely pause” and that sent stocks rocketing back higher… but then he spoiled it again “We need to slow the economy down, and so somewhat tighter financial conditions aren’t really a bad thing.”

So hike until you really break something…

* * *

China was relatively well behaved last night, but did extend the losses from Wednesday (SHCOMP -30% from highs)…

Americans Are Worried About The Economy (Even If The Fed Isn’t)

Fed Chair Jay Powell shrugged off the market’s recent drop (“not in our mandate”), completely ignored the collapse in US economic data (“yeah, but what about employment?”) and decided not to listen to their business contacts (“probably only transitory”), hiked rates, and only adjusted their rate-hike-trajectory modestly.

Just keep hiking…

However, as unelected a representative as Powell is, perhaps it is time to listen to “we, the people.”

Bloomberg’s weekly economic expectations index just put in its biggest two-month drop in five years with this week’s six-point tumble to the 50 level.

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Appeals Court Rules Colleges Must Censor, Block Online Services If They Offend Someone

Authored by Greg Piper via The College Fix,

Dissenting judge to university: Appeal this immediately…

Christmas celebrates the birth of Jesus Christ, not his death, which happens in the spring. When it comes to dead litigation, it’s apparently the opposite.

The 4th U.S. Circuit Court of Appeals has resurrected a lawsuit against the University of Mary Washington for not meddling enoughin its students’ lives.

Here’s some background:

A location-based social media app called Yik Yak used to exist. It let users post things anonymously in a given geographic area, such as around colleges.

Unsurprisingly, a lot of people posted boorish and offensive things. Even less surprisingly, people with fascist tendencies demanded their universities identify and punish those people.

A feminist group at UMW took this to the next level by

Deutsche Bank Unveils Its Favorite Market Timing Indicator

While it is probably not a pressing issue today with the Nasdaq just entering a bear market, and more than half the companies in the S&P well below 20% as the broader market has clearly peaked, Deutsche Bank’s quants recently published a note describing its favorite market timing indicator.

To determine if it is time to BTFD, or alternatively, to sell the rip, Deutsche Bank quant Ronnie Shah introduces one of his favorite contrarian indicators, dubbed the Variance Risk Premium (VRP) indicator, which measures market overreaction and underreaction to realized risk. In simple terms, VRP is the difference between options-implied risk (i.e., the VIX index) and realized risk (i.e., the actual risk in the market, historically measured over the last month).

If VRP is high, the biggest German bank sees this as a buying opportunity for risky assets, like equities and high-yield bonds, and explains his reasoning as follows: when VRP is high, VIX has typically shot up dramatically (i.e., the market is in panic mode). At the same time,
realized risk has probably also risen, but not to the same extent. In other words, the market has overreacted relative to what the actual realized data is telling traders.

Historical research shows that such episodes are good buying opportunities for risky assets on about a three-month horizon. On the other hand, when VRP is low, it tends to be a complacency indicator – investors are failing to price rising realized risk into the market, and as a result, favors selling risky assets like equities.

So it may come as a surprise to those bulls who consider every downtick as an invitation to buy, currently the VRP indicator is at 3.0, less than the long-term average of 12, and suggesting bearish sentiment, i.e., it is nowhere near an “all clear” signal to buy right now.

Outside the Box: Hemp and CBD now qualify for one of the most lucrative – and wasteful – government subsidies

Big pork for Big Ag.

BookWatch: These books show up most often on the nonfiction best-of-2018 lists

The next book you should read is on this list.

Bond Report: 10-year Treasury yield holds near 9-month low even as stocks continue post-Fed slump

Treasury yields are struggling for direction as bond traders digest the Federal Reserve’s policy decision, which had sent U.S. government bonds rallying.