27Mar2019 Midday Update: Wall Street, World Stocks, Yields Slip With Growth, Central Banks In Focus, DOW Down Triple Digits, WTI Crude Slips 55 Cents

Here is the current market situation from CNN Money

North and South American markets are mixed. The IPC is higher by 0.31%, while the Bovespa is leading the S&P 500 lower. They are down 0.78% and 0.73% respectively.

Global growth worries bog down Wall Street

Fears of a global economic slowdown weighed on Wall Street’s main indexes on Wednesday, and along with a prolonged inversion in the U.S. yield curve kept investors at bay.

World stocks, yields slip with growth, central banks in focus

A gauge of world stocks slipped on Wednesday amid new signs of concern for the global economy, while benchmark U.S. Treasury yields sank to fresh 15-month lows and German bond yields fell further below zero.

U.S. Health insurer Centene to buy smaller rival WellCare for $15.3 billion

U.S. health insurer Centene Corp on Wednesday said it would buy smaller rival WellCare Health Plans Inc for $15.27 billion in stock and cash, in a move to bulk up its government-backed Medicare and Medicaid businesses while reducing exposure to Obamacare healthcare exchanges.

Southwest trims first quarter outlook after 737 MAX groundings

Southwest Airlines Co on Wednesday was the first major airline to formally cut its financial outlook for the year after being forced to pull its new fleet of 34 Boeing 737 MAX planes out of service.

U.S. made progress in convincing EU on Huawei technology risks: Pompeo

The United States has made progress in convincing the European Union of the risks in using technology from China’s Huawei and will continue to push them on the issue, U.S. Secretary of State Mike Pompeo said on Wednesday.

U.S. transport chief: ‘Questionable’ why some Boeing safety features not required

U.S. Transportation Secretary Elaine Chao told a Senate committee on Wednesday it was “very questionable” why some Boeing 737 MAX safety features were not required, but she stopped short of saying the government would require retrofitting all aircraft.

U.S. authority probes Swedbank over money laundering allegations; headquarters searched

Swedish authorities searched the head office of Swedbank on Wednesday as part of an investigation into the bank’s handling of money laundering allegations at its Baltic branches.

Commerzbank management pay cuts contrast with Deutsche Bank

Commerzbank’s chief executive was paid 32 percent less in 2018, contrasting with sharp rises for the top management at its potential merger partner Deutsche Bank.

Swedbank under investigation by New York Department of Financial Services: Swedish TV

Swedbank is under investigation by the New York Department of Financial Services (DFS) for giving misleading information during a probe related to the Mossack Fonseca tax evasion and money laundering scandal, Swedish public service broadcaster SVT reported on Wednesday.

Beware Gamma Gravity: S&P 2,725 Opens Trapdoor To December Lows

Two weeks ago, when the market seemed stuck in a constant, daily meltup ahead of the March option expiration “quad witch”, Nomura’s Charlie McElligott had an explanation for the relentless bid in stocks which took place even as investors were consistently dumping shares for 12 consecutive weeks: in addition to another record year for stock buybacks and various daily short squeezes, it was the “extreme” dealer gamma that was providing support for the S&P, because the higher the market rose, the more risk dealers had to buy to hedge positions.

Since then, things have changed drastically, and not only is the S&P once again below its “sextuple top” of 2,800, a level it simply refuses to breach consistently since last October, but companies have also entered the buyback blackout period, as the most active buyer of stocks is on the sidelines for the next month as Q1 earnings start coming in.

But the biggest difference may be that as stocks continue to slide from YTD highs, the dealer pressure to keep buying is no longer present, and as JPMorgan writes in an overnight note, following the March expiry and the market’s ~2% sell-off on Friday (exacerbated by the Wedneday slide), the S&P 500 put-call gamma imbalance has moved close to flat.

This, to JPM’s Brad Kaplan, suggests that the long gamma position dealers have been running for most of the past couple of months has likely lightened (now close to neutral), and their hedging activity is proving less support or headwinds to market volatility. The sensitivity of the gamma imbalance to changes in spot prices is shown in the chart below.

Janet Yellen Suggests Strengthening The “Fed Put”

Authored by Jesse Colombo via RealInvestmentAdvice.com,

In a speech in Hong Kong this week, former Fed chair Janet Yellen stated that “global central banks don’t have adequate crisis tools.”

Saudi Aramco Buying 70% Of SABIC In $70 Billion Cash Injection For Mohammed bin Salman

Saudi oil giant Saudi Aramco is acquiring a 70% stake in the country’s petrochemcial firm Saudi Arabian Basic Industries Corporation – or SABIC – from the country’s sovereign wealth fund, Aramco reported on its Twitter account shortly after Bloomberg leaked the news on Wednesday morning. The remaining 30% publicly traded shares in SABIC will not be part of the transaction

#Saudi_Aramco is acquiring a 70% stake in @SABIC, the Saudi Arabian Basic Industries Corporation, creating new opportunities in fast-growing petrochemicals pic.twitter.com/EETRoJMqxO

— aramco | أرامكو (@Saudi_Aramco) March 27, 2019

The agreed purchase price for the shares is 123.40 riyals per share, totaling 259.125b riyals, which is just shy of $70 billion.

Swalwell Doubles Down: Maintains Trump Is A “Russian Agent” Despite Mueller Findings

Rep. Eric Swalwell – who sits on the House Intelligence Committee – has doubled down on his claim that President Trump is a Russian agent because nobody has been able to conclusively disprove all of the claims in the Steele Dossier.

The Margin: Newly single dad discovers the joys of wholesale in his first trip to Costco

By now, the shine of a 7-pound tub of Nutella and a $1.50 hot dog (soda included) has probably worn off for most of us veteran Costco shoppers. But let’s dial back the clock to the very first time we were introduced to bulk bacon, burgers and batteries. Once, we were all Tom Musto.

The Tell: The stock market often produces its strongest returns after yield curve inverts, notes top quant

Here’s another reminder that while an inversion of the yield curve is a reliable recession precursor, the signal tends to precede stock-market gains. In fact, some of the equity market’s strongest returns have come in the months and quarters after the curve inverts, reminds J.P. Morgan quant strategist Marko Kolanovic.

Ginger ale makers are slugging it out over who has more ‘real ginger’ in their drinks

Threats and accusations fly as the battle heads for Times Square.