Written by Gary
Wall Street closed up after brutal whipsaw trading over the past few sessions (SPY +0.8%). Some investors fear historic rebound is just a ‘wicked bear trap.’
The Market in Perspective
| Here are the headlines moving the markets. | |
 | Wall Street roars back late to end higherU.S. stocks ended positive on Thursday, with major indexes roaring back late from steep losses earlier in the session, as a late-year rebound in equities continued for a second day. |
| Exclusive: Chile to delay arbitration with top lithium producer AlbemarleChile will delay a previously announced arbitration with Albemarle Corp, the world’s top lithium producer, in anticipation that the U.S.-based miner will make a new offer to bring it into compliance with a 2016 contract, a source close to the negotiations told Reuters. |
| Oil prices drop as U.S. stock markets retreatOil prices fell on Thursday, retreating from an 8 percent rally in the previous session as Wall Street stocks also fell and the oil market focused on signs of faltering global economic growth and record production of crude. |
| New Mexico oil producers brace for tighter regulation as output jumpsCrude oil output has more than doubled in New Mexico over the last four years, making it the No. 3 producer among U.S. states, but a January change in state leadership to Democratic control has industry executives fearing tougher regulations are coming. |
| Venezuela cocoa growers fear new pest: the governmentVenezuela cocoa trader Freddy Galindo has battled highway robberies, kidnappings of family members and declining quality in his 19 years exporting the nation’s legendary beans. |
| Fed survey points to a scaling back of bets on emerging market gainsMost financial market credit officers surveyed by the Federal Reserve in November said their big clients were exposed to emerging markets but were scaling back bets emerging market assets would rise in value, the U.S. central bank said on Thursday. |
| Renault union calls for more transparency over Dutch holdingFrance’s CGT union has called for more transparency at Renault and its Dutch holding company and asked the French government, one of the carmaker’s shareholders, to try to shed light on its workings, a CGT representative said on Thursday. |
| FDA chief to meet e-cigarette makers amid crackdownThe U.S. Food and Drug Administration (FDA) plans to meet top-level executives of e-cigarette makers, the agency’s chief said on Thursday, hinting that some companies seem to be backing away from commitments related to youth’s access to e-cigarettes. |
| France’s Vinci in $3.7 billion swoop on UK’s Gatwick airportFrance’s Vinci is taking advantage of a Brexit hit to UK asset prices to buy a majority stake in Britain’s second-busiest airport, London’s Gatwick, for 2.9 billion pounds ($3.7 billion), the construction company said on Thursday. |
| 4th Biggest Buy Program Of All Time Sends Dow Soaring Over 900 PointsDow futures plunged over 760 points after tagging yesterday’s highs overnight, but those darn algos ripped the market higher in the last hour erasing the entire drop… with the biggest buy program since February…
And the 4th biggest buy program of all time…
In words… And pictures… Dow futs exploded over 900 points higher, taking out yesterday’s highs and ending like yesterday at the high … |
| Shutdown Drags On As House GOP Leaders Say No Vote This WeekThe partial government shutdown continues with no end in sight, as House GOP leaders said on Thursday that they do not expect a vote this week on a financial package that might reopen the government, according to The Hill.
House Majority Whip Steve Scalise (R-LA), who supports President Trump’s firm stance on $5 billion for his long-promised southern border wall, advised members “that no votes are expected in the House this week.” “As the House awaits Senate action on remaining FY19 appropriations, we will aim to provide 24 hours’ notice ahead of any expected votes in the House,” added Scalise’s office in a notice.
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| Trump Did Not Expose “Covert” SEAL Team In Iraq, Say Special Forces VetsIt’s the latest outrage fail after over a week of “outrage!” including Trump’s announcing the pullout of all American forces from Syria, a major reduction of troops from Afghanistan eventually leading to a full withdrawal, and his telling a seven-year old that belief in Santa is “marginal” at that age. During Trump’s Wednesday surprise Christmas visit to US troops in Iraq, he posed for a photo op with a Navy SEAL team deployed to Iraq; and after flying out of Baghdad posted the video to Twitter, yet the video was uploaded before the SEAL team members’ faces could be blurred out to protect their identities according to protocol.
This immediately prompted howls and headlines that Trump exposed “covert” and “classified” ops from pundits and the media; however, a number of military and special forces experts, including some members of American special forces themselves quickly pointed out this was hugely exaggerated given that SEAL team 5 — the unit Trump posed with while they wore full combat gear and night vision goggles — is a “white” unit (meaning not classified), whose deployment with Combined Joint Special Operations Task Force Iraq (CJSOTF-I) is public knowledge. |
| “Something Is Wrong”: Deutsche Bank Spots An Odd Market DivergenceOne of the closest correlations between major asset classes has been that between stocks and bonds. But not anymore, because as Deutsche Bank’s chief international economist notes in a Wednesday note, the historical relationship between stocks and bonds is breaking apart, prompting Slok to exclaim that “something is wrong”, as it could portend danger for those investors holding Treasurys in the hope these would cushion the slide in stocks. it is no secret that bond prices and stocks are inversely correlated, or at least have been in normal times, but all that changed this year as Treasury prices have largely failed to reflect the slump in stocks, as MarketWatch notes. “What is safe to say is that there is something driving equities lower, which is not impacting rates. Or there is something keeping long rates high, which is not impacting equities,” Slok wrote in a Wednesday note. This correlation breakdown has undercut the bond market’s status as a safe haven in a year in which few asset classes have eked out positive returns. This correlation “failure” was on full display yesterday when despite the record point surge in the Dow, Treasury yields posted a very modest move higher (one which has since been faded on Thursday). And, as MW notes, if traditional havens like U.S. government paper struggle to shield portfolios from a further selloff in equities it could mean investors will lack few reliable boltholes going forward. To show this regime shift, Slok charts the movement of the 10-year Treasury yield against percentage changes in the S&P 500 over the last five years. It shows the two correlating closely until 2018, when they split. |
| Economic Report: Americans’ confidence in the economy falls again and is at lowest level since summerThe confidence Americans feel in the economy fell for the second month in a row and touched the lowest level since last summer, perhaps a sign that worries about the nine-and-a-half year-old U.S. expansion have spread from Wall Street to main street. |
| The Ratings Game: Will a $350 Nike shoe make you a better basketball player?Nike announced a new basketball platform for 2019 with a $350 price point. |
| Economic Report: Jobless claims fall slightly to 216,000 in week before Christmas; layoffs still very lowThe number of Americans applying for unemployment benefits fell slightly in the week before Christmas, reflecting a vibrant U.S. labor market and the very low number of layoffs taking place during the holiday season. Initial jobless claims slipped by 1,000 to 216,000. |
Summary of Economic Releases this Week
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