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S&P 500 Index Movements
« on: January 09, 2016, 05:54:20 AM »

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S&P 500 Index Movements
« on: January 09, 2016, 05:54:20 AM »

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Re: S&P 500 Index Movements
« Reply #1 on: January 09, 2016, 05:59:31 AM »

2044 on 31/12/15

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Re: S&P 500 Index Movements
« Reply #2 on: January 09, 2016, 06:02:12 AM »


On the verge of

Death Cross ??

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Re: S&P 500 Index Movements
« Reply #3 on: January 09, 2016, 07:32:49 AM »



2015  high   2135

2015  low    1867

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Re: S&P 500 Index Movements
« Reply #4 on: January 09, 2016, 08:13:34 AM »



Goldman trims S&P 500 earnings forecast: Here's why
Holly Ellyatt   | @HollyEllyatt
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Goldman Sachs has lowered its S&P 500 earnings forecast and highlighted key issues for 2016 that investors should watch out for in the year ahead.

Goldman's U.S. equity team, led by chief U.S. equity strategist David Kostin, said in a note late on Thursday that it was lowering its S&P 500 earnings per share (EPS) forecast by $3 to $106, $117, and $126 for 2015, 2016, and 2017.

The revision reflected annual EPS growth of -7 percent in 2015, +11 percent in 2016 and +8 percent in 2018, the note stated, with the strategists expecting that 2015 was "the worst year for S&P 500 earnings since 2008."

Goldman said the energy sector was "the leading driver of its reduced profit outlook" and expected the sector to post a decline in operating EPS for the first time in 48 years. Energy companies in the U.S., and elsewhere, have taken a beating on the global decline in oil prices which have hit 12-year lows of around $32 this week.

Getty Images
A continuing glut in oil supply and the failure of demand to keep up signals no immediate respite for energy companies – particularly those in the U.S. that are part of the U.S. shale oil revolution. With oil prices falling below the break-even cost for many producers, U.S. shale oil operations have dwindled with producers cutting production, cancelling drilling projects and closing rigs. Earnings have suffered as a result.

"Energy EPS has collapsed along with crude oil prices" Goldman said in the note, warning of only a "modest recovery" in the "rollercoaster path of energy earnings" in 2016.

Workers on Endeavor Energy Resources LP's Big Dog Drilling Rig 22 in the Permian basin outside of Midland, Texas.
How US drillers are beating OPEC's new oil order
"The sector will post an annual operating loss for the first time since our data series began in 1967. Energy EPS are highly sensitive to oil prices but the impact on S&P 500 EPS is more limited. We assume Brent averages $44/barrel in 2016."

Topics to dominate 2016

Goldman said it expected three topics to dominate the earnings discussion in 2016: Margins having peaked, the path of energy EPS and the risk of further economic slowdown.

With energy driving Goldman's outlook lower, the equity team noted that S&P 500 margins had peaked and "plateaued" and that investors should buy stocks with expanding margins.

It noted that the IT sector had contributed to more than half of the total S&P 500 margin expansion since 2009, with Apple the leading contributor to that.

"Apple contributed 22 percent of overall S&P 500 margin expansion since 2009. We expect S&P 500 margins will stay high during next two years but technology margins will peak this year and then decline. We identify 34 firms forecast to raise margins by at least 50 basis points (bp) annually in 2016 and 2017," although they did not identify the companies.

On the wider economic outlook, the team forecast "muted economic growth." "Goldman Sachs Economics forecasts U.S. gross domestic product (GDP) growth will average 2.2 percent in 2016. A 100 bp shift in GDP growth translates to $6 per share in EPS." The team forecast China GDP growth of 6.4 percent in 2016 and World ex-U.S. GDP growth of 3.7 percent in 2016.

A construction worker passes a piece of framing up to a roofer at an apartment building being built by Anderson Communities Inc. in Lexington, Kentucky.
Can we avoid the Q1 freeze in 2016?
Goldman's S&P 500 top-down forecasts (which look at the overall market) for sales, margin, and EPS forecasts are below bottom-up consensus (which looks at the individual companies), it said.

For 2016, Goldman assumes 4 percent growth in sales per share, 8.8 percent profit margin expansion and 11 percent EPS growth on the S&P 500, versus bottom-up forecasts of 6 percent, 9.6 percent and 18 percent.

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Re: S&P 500 Index Movements
« Reply #5 on: January 09, 2016, 08:16:51 AM »



Keep calm and carry on: Investing in a sell-off
Matt Clinch   | @mattclinch81
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It's been a record week of selling for global stock markets: Some $2 trillion was been wiped off the value of shares in the last four days. But you won't have seen many professional investors panic-selling.

A cool head usually cashes in during moments like this and a range of top analysts and strategists have been giving their views on how to stay calm and ride this current wave of volatility.

Ramin Nakisa, global asset allocation strategist at UBS, recommends that investors shouldn't take directional bets on markets this year and instead seek out pockets of value in certain regions.


Traders work on the floor of the New York Stock Exchange.
Rough start to 2016? Here's how to trade it
A trader on the floor of the New York Stock Exchange, Jan. 7, 2015.
Correction protection: Where to hide right now

"I don't think it's a buy and hold year, I think you have to stay on your toes," he told CNBC Friday.

"We like risk in DM (developed markets), we like duration in DM. We like DM FX (foreign exchange) versus EM (emerging market) FX, so that's a kind of a hedge against these risk-off moves we've seen over the last week or so."
Nakisa and his team use a price-to-trend ratio to calculate valuations in equities which levels out the major market fluctuations seen in the last 30 years. On this basis, Nakisa said the pan-European Euro Stoxx 600 index was 30 percent below its long term average and still "cheap" compared to U.S markets. He added that Japan and Australia was also attractive due to more accommodative monetary policy and urged investors to steer clear of emerging markets.
Meanwhile, in the U.S. on Thursday, billionaire investor Mark Cuban revealed he was "doing nothing" about the market sell-off.

"While all the selling seems to be based on China and the price of oil, I really don't know what the long term implications for our stock market is," he wrote in a note. "So I follow the number one rule of investing. When you don't know what to do. Do nothing."
Mohammed El-Erian
Mohamed El-Erian: THIS dwarfs worries about China
These calming words come after a brutal start to the year for equities. The S&P Global Broad Market index, which tracks global stock performance, has lost $2.23 trillion in market value this year so far. Stark drops in Chinese markets, sliding crude oil prices and geopolitical concerns, among other factors, have contributed to selling across the globe.

Gina Martin Adams at Wells Fargo Securities - like Cuban – wasn't fretting about the sell-off and told CNBC Friday that investors hold "hold tight", "stick to your guns" and "wait it out."

Traders work on the floor of the New York Stock Exchange.
Investors dump US stocks, seek bond safe haven: BofA
There was even some optimism from Asia despite China being at the epicenter of this latest tremor. The Shanghai composite has already lost 11.7 percent year-to-date due to step fluctuations in the yuan and fears over the policy being implemented by the country's central bank.
However, Jing Ulrich, managing director and vice-chairman of Asia Pacific at JPMorgan Chase, urged investors to look at the volatile market, which is still relatively untouched by foreign buyers.
"At this juncture there is no point in being overly negative, because everyone in the market is already very negative. These are among the cheapest markets in the whole world," she told CNBC Friday.

—CNBC's Ritika Shah contributed to this article.

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Re: S&P 500 Index Movements
« Reply #6 on: January 09, 2016, 08:18:38 AM »



This China stock market is so different than we are used to
Eric Chemi   | Mark Fahey
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The one thing to remember about the Chinese stock market is that it operates so differently from U.S. and European markets. First off, the China market is dominated by retail investors, who treat it very much like a casino. Look at this chart:


There are more than 200 million trading accounts in China. That's the same size as America's adult population. And that's one of the main reasons we're seeing so much volatility. FIS Group in a recent report said that more than 90 percent of capital accounts are owned by retail investors, suggesting the wild moves in Chinese stocks is primarily driven by "their market structure" and "trade momentum."


Even though we've seen huge drops in the last week, let's not forget how massive the spikes up have been in the past 10 years. Chinese stock market volatility makes the S&P 500 look almost like a flat line.

Another way to see it: the difference between small and large caps.


Of course small caps anywhere tend to move more than large caps — but in China, that difference is bigger, especially in the past months.

Remember, many Chinese large-cap stocks are primarily state-owned enterprises, so retail traders generally look toward smaller companies to make their quick bucks.

Wu Jinglian, a veteran economist, has said comparing Chinese markets to a casino is actually unfair — to the casinos. He said that at least the casinos have stronger rules, and don't have price manipulation.
That's why when bad news in the economy happens, a spooked and scared set of retail traders will be much quicker to bail versus the more professionally dominated U.S. market.

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Re: S&P 500 Index Movements
« Reply #7 on: January 09, 2016, 08:20:13 AM »



The $6 million bet against emerging markets
Stephanie Yang
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On a week filled with China concerns and market turmoil, one trader is making a massive bet that it's going to get a lot worse for emerging markets.

"The largest trade in the options market today was in the EEM, the emerging markets ETF," RiskReversal.com's Dan Nathan said Thursday, when one trader bought 100,000 of the June 25-strike puts in EEM for 62 cents per share. Since each options contract covers 100 shares of stock, this is a $6.2 million bet that breaks even if EEM is below $24.20 by June expiration.

So far in 2016, EEM has slid more than 7 percent. A drop to $24.20 would be another 19 percent drop from where the ETF traded on Friday.

Nathan said the next level of support for EEM should come in at $25. However, he said the large trade likely isn't an outright bearish bet, given the targeted expiration date and the out-of-the-money options traded.

Read MoreMohamed El-Erian: THIS dwarfs worries about China

"This is a likely a hedge against an emerging market portfolio, or maybe there's an investor who thinks that puts are the best bang for your buck as far as hedging is concerned," he said on CNBC's "Fast Money."


If news from China gets worse, the EEM is likely to suffer further, given that China holdings make up more than 25 percent of fund's holdings.

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Re: S&P 500 Index Movements
« Reply #8 on: January 09, 2016, 08:27:29 AM »


Taking stock of an awful trading week on Wall Street

By Sue Chang
Published: Jan 8, 2016 6:02 p.m. ET

     42 
The global stock markets lost $2.3 trillion in market cap this week. How does that signal for the rest of year?
Time (EST)
8 Jan
4:00
8:00
12:00
4:00
US:DJIAUS:SPXCN:SHCOMP-2%0%2%4%
An earlier version of this story contained incorrect weekly comparison data. The error has been corrected.

Getty Images
Not a good start to the year!
The market meltdown in China reverberated across the globe in a week that punished U.S. stocks with major benchmarks recording their worst weekly performances in years.

Even after China’s Shanghai stock market recovered Friday to gain 2%, the U.S. market remained volatile with the S&P 500 posting its worst opening week ever.


And there could be more turbulence ahead as history indicates that the trading in the first week of a new year could influence the direction of the market for the remaining 51 weeks.

“For the S&P 500—the first 5 trading day of the new year has predicted the direction of the full year 68% of the time,” according to the WSJ Market Data Group.

The correlation is 66% for the Dow Jones Industrial Average DJIA, -1.02%

However, investors will be heartened to know that the predictive power of the first week of trading tends to be more relevant when the market is going up rather than down. In fact, during years when the market is down, the first week’s performance as an indicator is no better than 50/50, according to Wall Street Journal data.

Here is how miserable 2016 has been so far.

•The S&P 500 SPX, -1.08%  posted a weekly loss of 6% to close at 1,922.03 and the Dow Jones Industrial Average dropped 6.2% to 16,346.45. It was the worst week for stocks on a percentage basis since Sept. 23 2011.

•China’s Shanghai Composite Index SHCOMP, +1.97%  sank 10% to 3186.41 while the Hang Seng Index HSI, +0.59%  fell 6.7% to 20,453.71, both recording their biggest one-week decline since Aug. 21.

•Japan’s Nikkei 225 Index NIK, -0.39%  shed 7% to 17,697.96, its worst weekly percentage drop since Sept. 4. The index fell five out of the past six weeks.

•The Stoxx Europe 600 SXXP, -1.49%  skidded 6.7%, its steepest weekly fall since early August 2011.

Altogether, the global stock markets lost $2.3 trillion in market cap in the first four days of 2016, according Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch. Some $12 billion in funds fled U.S. equities, the largest in 17 weeks, he said. Tech-focused funds were the most severely hit, with $600 million exiting, the biggest in 19 weeks.

If there is any consolation to the miserable start to the new year, it may be that the sizable selloff has triggered a “buy” signal from a technical perspective with 88% of all global equity markets trading below their 200-day moving average and 50-day moving average, Harnett noted.

Bank of America Merrill Lynch
Still, despite the pervasive bearish sentiment, the strategist believes there is potential for a “multiweek” rally if the Chinese yuan and oil prices stabilize and the U.S. Federal Reserve pauses in its interest hike regime on a weaker U.S. dollar

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Re: S&P 500 Index Movements
« Reply #9 on: January 09, 2016, 08:30:11 AM »



U.S. stocks see worst opening week ever

By Ellie Ismailidou and Victor Reklaitis
Published: Jan 8, 2016 4:22 p.m. ET

     116 
Shares give up strong gains Friday as oil rout resumes
Getty Images
U.S. stocks are trying to recover after getting knocked down this week.
U.S. stocks relinquished an early advance Friday and finished deep in the red, posting their worst opening week in history.

The S&P 500 SPX, -1.08% closed 21.08 points, or 1.1%, lower at 1,922.02, with all 10 of its main sectors in negative territory. Financials and health care were leading the losses, down 1.6% and 1.4% respectively, followed by the energy sector, down 1.3%. The index booked a 6% weekly loss.

The Dow Jones Industrial Average DJIA, -1.02% dropped 167.65 points, or 1%, to 16,346.45 and reported a 6.2% weekly decline.


Meanwhile, the Nasdaq Composite COMP, -0.98% ended the day down 45.80 points, or 1%, at 4,643.63 and was down 7.3% over the week. This is the longest losing streak for the index since November 2011.

The strong U.S. jobs report and the stability in Chinese markets helped propel U.S. shares higher in early trade, but the indexes turned lower as oil prices tumbled to new lows CLG6, -1.17% suffering a steep decline in the last thirty minutes of trading.

Also read: Energy companies set for first earnings decline in 48 years: Goldman

The U.S. created 292,000 new jobs in December, the Labor Department said Friday, handily beating the consensus forecast of 215,000 new jobs from a survey of economists polled by MarketWatch. The unemployment rate remained at 5%, largely because almost a half-million people entered the workforce. Employment gains for November and October, meanwhile, were revised higher.

But the strong headline number didn't give stock markets a huge boost, given weakness in the pace of wage growth. Though the jobs data were “impressive,” the muted wage growth missed economists’ expectations, analysts said.

That, in turn, reflects subdued inflation expectations amid a strengthening dollar and falling commodity prices, said Joe Heider, president of Cirrus Wealth Management. “The number one pressure on inflation is wage growth—and we are not seeing any of that,” Heider said.

On Thursday, the S&P closed 2.4% lower, while the Dow DJIA, -1.02%  shed 392 points, or 2.3%.

The effects of the China-inspired selloff lingered Friday as worries about slowing growth in China weighed on oil prices because the world’s second-largest economy is a large importer of commodities, said Jason Pride, director of investment strategy at Glenmede.

China’s gyrations are expected to continue to affect sentiment despite the fact that the correlation between China’s stock market and the U.S. is low, Pride added.

Time
S&P 500 Index
Mar 15
May 15
Jul 15
Sep 15
Nov 15
Jan 16
US:SPX1,9002,0002,1001,8002,200
Other markets: China’s Shanghai Composite SHCOMP, +1.97%  closed 2% higher, undoing some of its decline from earlier this week, which had rattled global markets. The Shanghai index finished down 10% on the week.

European stocks SXXP, -1.49%  suffered their worst week since August 2011, and a key dollar index DXY, +0.08%  advanced. Gold futures GCG6, -0.33%  dropped, though the safety play stayed on track for a weekly gain.

Chinese stocks make a U-turn(1:40)
Chinese stock markets recovered Friday after a tumultuous week. But the WSJ's Andrew Peaple explains why few expect the relative calm to last.

Fed speakers: The strong jobs data now “clear the way for the Federal Reserve to continue its process for hiking rates at its projected pace,” said Chris Faulkner-MacDonagh, Market Strategist at Standard Life Investments.

The market-implied expectation is for two rate increases in 2016 whereas the Fed’s own projection is for four hikes. The market is “so far behind the Fed,” Faulkner-MacDonagh said, and the jobs data suggest that “the market is going to have to reprice, not the other way around.”

San Francisco Fed President John Williams said Friday that the baseline projection of four rate hikes in 2016 is more like a “gentle ascension” rather than rocket “shooting straight up.” Earlier in the week Williams said he expected a steady campaign of interest rate rises coming from the U.S. central bank this year, assuming steady growth, more job gains and a rise in inflation.

Individual movers: Apple Inc. shares AAPL, +0.53%  gained 0.5%, on track to snap a two-day losing streak which had brought the stock price under $100 on Thursday as investors worried about iPhone demand.

Apple supplier Cirrus Logic Inc. CRUS, +3.73%  rose 3.7% after falling earlier in the premarket session. The chip company late Thursday cut revenue guidance for its December quarter.

Alcoa Inc. AA, -2.42% lost 2.5% after the aluminum giant announced plans to shut smelter operations in Indiana and curtail refining capacity in Texas.

Gap Inc. GPS, -14.32%  shares plunged 14.3% after the company disclosed a drop in December sales.

FedEx Corp. FDX, +0.09%  shares rose less than 0.1% after European Union regulators approved the shipping company’s takeover of Dutch rival TNT Express NV TNTE, -0.14%

—Anora Mahmudova contributed to this report

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Re: S&P 500 Index Movements
« Reply #10 on: January 09, 2016, 08:32:22 AM »



Opinion: Don’t let a stock market bounce fool you

By Mark Hulbert
Published: Jan 8, 2016 5:08 a.m. ET

     87 
Market timers aren’t yet bearish enough to spark a solid rally
Hulbert Financial Digest
CHAPEL HILL, N.C. (MarketWatch) — Don’t be seduced by the U.S. market attempting to recover from its worst-ever start of a new year.

That’s because — quite unexpectedly, I might add — traders in recent sessions have stubbornly refused to become as bearish as they normally do at tradeable bottoms. I initially thought this might have something to do with the Christmas holidays, when many traders weren’t glued to their computer screens. Needless to say, that explanation no longer applies.

Which in turn means that traders must not be taking the market’s recent plunge as seriously as they did previous ones. Consider: even though many smaller-cap indices have now broken their August lows, and some larger-cap indices such as the NYSE Composite NYA, -1.26%   are less than 2% away, the average trader today is nowhere near as bearish as he was at the August lows.


Time
NYSE Composite Index
Aug 15
Sep 15
Oct 15
Nov 15
Dec 15
Jan 16
US:NYA9,50010,00010,50011,0009,00011,500
Hayes Martin, who has extensively and rigorously studied trend changes in the market, concludes from this and other evidence that the market is “dangerous” right now, and that traders therefore should “not jump in at the first sign of a bottom divergence.” Martin is president of Market Extremes, an investment consulting firm in New York.

It was a little more than a year ago when I last checked in with Martin about where the market was headed. He told me at the time that the stock market was “weaker than it looks.” The Dow Jones Industrial Average DJIA, -1.02%  today is about 1,000 points lower.

In his research, Martin focuses on a number of sentiment indicators. But one index that clearly illustrates what he is referring to is the average recommended equity exposure among short-term stock market timers (as measured by the Hulbert Stock Newsletter Sentiment Index, or HSNSI). At last August’s lows, this average fell to minus 20.3%, indicating that the average short-timer was allocating more than a fifth of his equity trading portfolio to going short — an aggressive bet that the market would keep going down.

Today, in contrast, the HSNSI stands at 5.7%, or 26 percentage points higher.

Dow, S&P off to their worst start ever for any year(3:12)
Steep falls in Chinese equities spilled over to global markets, driving U.S. markets to their worst-ever start to a year. The Dow Industrials fell nearly 400 points on Thursday. WSJ's Paul Vigna reports on what investors will be monitoring next. Photo:Getty

Contrarians believe that a tradeable bottom won’t be in place until the HSNSI, and other measures of sentiment as well, drop to within at least shouting distance of their August lows. In the meantime, contrarian analysis is mostly neutral on the market’s near-term outlook — not all that different than where the situation stood before Christmas.

One thing contrarian analysis does not do is hazard a guess about when sentiment will reach a bearish-enough extreme to signal a rally worth betting on. But it will most likely take more than just a day or two of low HSNSI readings to do so, since the most significant bottoms are often characterized by stubbornly-held bearishness on the part of the market-timing community.

One thing, though, is clear: We’re not there yet, since — if anything — the market-timers are more stubbornly bullish right now than stubbornly bearish.

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Re: S&P 500 Index Movements
« Reply #11 on: January 09, 2016, 08:36:03 AM »



This is how much the average American investor made last year

By Jessica Marmor Shaw
Published: Jan 8, 2016 1:18 p.m. ET

     100 
Visual Capitalist
Average investor performance by region in 2015, according to data from Openfolio.
How’d your portfolio perform last year?

All you had to see was a 1% rise on the year to beat the S&P 500 SPX, -1.08%  , which ended 2015 down 0.7% to snap a three-year winning streak.

But, judging from this Visual Capitalist chart based on data collected by Openfolio, a site on which investors share information about themselves and their investments, most Americans didn’t meet that low threshold. Only one-third of investors made money on the year, according to Openfolio, and the average American lost 3.1%.


There are some notable regional differences in this data, too: perhaps not surprising, given it’s the seat of Wall Street, the Northeast did the best over 2015 with an average decline of 1.7%. More interesting: The Southeast did the poorest.

In general, investors tend to invest in companies that have headquarters near where the live, a trend Openfolio data has shown in the past. Investors in the Northeast, for example, are more heavily invested in financial companies than are others; investors in the West in technology. And for investors in the South, it’s energy. Oil saw what felt like an unending crash in 2015 and took energy stocks along with it: Energy was -- by a huge margin -- the worst performing S&P sector, ending the year down 22%. Overexposure to energy in Southern investors’ portfolios is the main reason that region saw an average decline of nearly 4%.

See also: Man who nailed 2015 oil plunge is predicting a dismal 2016

Markets are off to a scary start in 2016. The average investor is already down 5.1% in 2016 through the end of yesterday’s trading day.


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Re: S&P 500 Index Movements
« Reply #12 on: January 09, 2016, 08:39:43 AM »



Market Massacre: Worst Ever First Week Of Trading
Tyler Durden's pictureSubmitted by Tyler Durden on 01/08/2016 16:03 -0500

Bear Market Book Value China Crude NASDAQ Reality Russell 2000 SocGen Yield Curve


 
inShare
8
 
What better analogy than this...



 

This was the worst first week of the year for US equities... ever!

Dow... (even worse than 2008)



 

S&P...



 

Europe was a disaster...



 

And epic for China...



 

And while only Trannies are in a bear market (down 20%) in the US, these 7 developed world markets are already there...(h/t SocGen's Andrew Laphthorne)



 

*  *  *

So let's look at the week in stocks...

It was all looking so awesome last night...



 

Futures show the swings better (with China weakness as an early week driver and US as late-week driver)...



 

Small Caps and Trannies are down around 7% this week, S&P best but still down over 5% (and down 6 of the last 7 days)



S&P down 5.3% - worst week since Black Monday
Dow Industrials down 5.6% - worst week since Black Monday
Small Caps down 6.9% - worst week since Nov 2011 - Russell 2000 lowest close since since Oct 2014
Dow Transports down 7.1% - worst week since Sept 2011 - lowest close since Nov 2013
The Dow is down 1400 points in a week (from 17,660 to 16,250)



 

Utes managed to end the week unchanged but Homebuilders collapsed... Financials and Materials were next worst...



Financials down 6.6% - worst week since May 2012
Materials down 7.4% - worst week since Sept 2011
Homebuilders down 8.6% - worst since Aug 2011
VIX broke back above 25... (VIX up 60% in 2 weeks - biggest jump since Black Monday)



 

What did Janet do? Post Fed rate-hike - S&P down 6.5%, Gold up 3%, 30Y Bonds up 1.6%



 

 

Stocks are about half-way there...



 

Since the end of QE3, Trannies are down 20% and only Nasdaq is holding any gains...



 

The FANTAsy stocks are all red since the end of 2015 (with TSLA and AMZN worst)...



 

Energy Stocks finally woke up to reality in the credit underlying commodity...



 

US financials have started to plunge back to credit/yield curve reality...



 

With MS and GS back below Tangible Book Value for first time in 2 years...



 

 

 

Away from stocks...

 

Treasury Yields tumbled, closing at their low yields of the year with the belly of the curve outperforming... 10Y yields dropped 14bps this week - the biggest drop in 3 months.



 

FX markets were volatile but by the end The Dollar Index closed unchanged (against the majors)...



 

But the USDollar surged 1.5% against Asian FX - its best week in 5 months... (Asian FX is its weakest since April 2009 against the USD)



 

But AUDJPY - probably the world's most-levered carry trades - collapsed 6.7% this week!! It's worst week since May 2010...



 

Commodities were very mixed this week...



 

Gold rallied 4% this week - its best 'first week of the year' since 2008... (best week in 5 months) - breaking 2 key technical levels...



 

Crude down 5 days in a row touching a $32 handle at the lows... biggest weekly drop since Nov 2014



In Summary - Sell The Dips!

See you all Sunday night!

Charts: Bloomberg

Bonus Chart: Investors seeking safety are greatly rotating from Triple AAA stocks to Gold stocks (h/t SocGen's Andrew Laphthorne)


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Re: S&P 500 Index Movements
« Reply #13 on: January 09, 2016, 08:58:39 AM »



"The Entire Risk Paradigm Is Shifting" - Stocks Join Global 'Reality' Adjustments
Tyler Durden's pictureSubmitted by Tyler Durden on 01/08/2016 15:35 -0500

Bear Market China Reality recovery Volatility Yuan


 
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Submitted by Jeffrey Snider via Alhambra Investment Partners,

The focus on China as if their problems were only Chinese is highly misplaced, though you can understand the appeal of the excuse. This sentiment was expressed over and over today (just as it was in August):

Do we all live in China now? Investors could be excused for thinking that, given that arcane indicators such as a Chinese manufacturing index and the value of the Chinese yuan are inducing nauseating drops in the U.S. stock market. And the surprise halt to trading in the latest Chinese session, a mere 30 minutes after markets opened, has thrown U.S. and European markets into a tailspin.
 
Last we checked, however, the Dow Jones and S&P 500 indexes were composed of U.S. companies that might do some business in China, but still earn the vast majority of their revenue elsewhere. And elsewhere, economic fundamentals are looking way better than the gloomy start to this year’s trading would suggest.
This is one of those forest and trees moments that get caught up on the surface of anachronistic thinking. Even if all that were true, the fact that China is an export economy having trouble finding any sustained and sufficient demand for its industrial capacity is a direct reflection upon global “demand”; which still includes the same business climate that US companies derive their revenue and earnings from.

But it never really is so much about business today as it is risks for business tomorrow. In raw terms, if Chinese firms and its economy can so struggle in this environment it stands to reason to at least contemplate why that might be – and how that might directly reflect on domestic considerations. Further, as noted earlier, risk perceptions have changed as the FOMC is no longer given blanket faith to declare whatever sky color they wish. Stocks really haven’t had much success, overall, in a year and a half; a pause that itself should register as complimentary to the Chinese struggles.

The S&P 500 is down just over 7 percent from its May high, but the average stock in the larger S&P 1500 was down 24 percent from its high as of yesterday’s close, according to new research from Bespoke Investment Group. A bear market is defined as a decline of 20 percent or more, meaning the average stock has already reached that threshold.
As Bespoke points out, the pain in stocks is not just energy-related shares. Small caps are among the hardest hit (the S&P 600 small cap is down an astounding 28% from its high!) as well as consumer discretionary stocks; the very sorts of economically-sensitive issues that should be leading the market if this was just China as China. Instead, they suggest China is, again, finding difficulty in no small part because of intensifying US struggles. That much has been obvious from trade figures which declare in no uncertain terms the great and ongoing lack of US “demand.”

From that visible contradiction, the entire risk paradigm is shifting more so than it already has. Commodities and “money” more broadly are winning the argument, so to speak, having declared long ago greater downside risks. Now that those are becoming rapidly the actual baseline, even for stocks, what is taking place in China is the connected realignment of monetary condition in that frightening direction. Stocks are finding more downside volatility because stock investors are being forced to recognize in truly comprehensive fashion that there is an actual and sizable downside.

ABOOK Jan 2016 Dollar HYG GSG SP500

This is increasingly taking on the proportions of a global reset. As such, the “dollar” stands right in the middle of it as both messenger and agent. You cannot separate China from the whole as China isn’t really the problem but rather the most visible symptom of it. If there were a full recovery as the FOMC claims in moving against the possibility of overheating, financial firms would be at the front of that greedily taking up the mantle of raw financial opportunity. They did so in times past, usually in direct relation to the QE’s – and were only burned for their trouble. There is no recovery opportunity, which is why they have been retreating in “money” in really precipitous fashion.

It is the very mechanism of discounting. The fact that stocks may also be participating is a very important indication of how much that has penetrated into broad and systemic perceptions. China matters, but not so much just for China. The US may look lackluster (to some, a narrowing minority) by comparison to the direction of China’s economy, but that really doesn’t tell us as much about tomorrow as is repeatedly claimed. A chronically ill economy is highly susceptible not to catching fire and taking off, but rather to converging with all the very real disasters already spreading globally – the risk that money markets are increasingly discounting and carrying out. Financial markets are obviously more and more worried that memories of lackluster will be all that there was of the QE-driven cycle.

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Re: S&P 500 Index Movements
« Reply #14 on: January 09, 2016, 01:18:40 PM »


Can Anything Prevent a U.S. Stock Market Crash in 2016?
By John Whitefoot, BA Published : October 7, 2015
39
1
 U.S. Stock Market CrashIs the U.S. stock market poised to crash in 2016? Absolutely. The writing has been on the wall for ages. It’s not as if anything has happened of late to point to a stock market crash, it’s just that the rest of the investing community is waking up to what we have been pointing out for years.
Stock Market Crash Getting Warmed Up
The stock market is supposed to be a barometer of how well the broader U.S. economy is doing. The stock market is a forward looking indicator. So, in theory, the stronger the stock market, the stronger the U.S. economy.
And by all accounts, the U.S. economy is doing great! Since bottoming in March 2009, the NASDAQ has soared more than 250% and the NYSE is up 130%, while the S&P 500 has gained 182% and the 30-company-strong Dow Jones Industrial Average is up more than 145%.
But that’s a little misleading. Those gains were fuelled by income-starved investors clutching at cheap money dangled in front of them by the Federal Reserve in the guise of multiple rounds of quantitative easing. This led to lower interest rates and the need for investors to pour more money into the stock market.
Seven years later, the stock market is still trending near record levels. This is in spite of years of underwhelming corporate earnings and revenue growth-or a lack thereof. Companies can only prop up their earnings by cutting costs for so long. And fickle investors can only prop up share prices for so long.
Eventually valuations have to be in sync. The only way that can happen is if investors wait patiently for that to happen. After seven years of easy gains, I doubt investors will wait in the pits. The other option? Investors will get scared and run for the exits, sending stocks reeling.
After years of being on fire, there are indications that this is starting to happen. Since the beginning of 2015, the once high-flying NASDAQ is down almost five percent; the NYSE has lost 11.5% of its value; the Dow Jones is down slightly more than 10%; and the S&P 500 is 8.5% in the red.
Interestingly, the 12-month average level of the S&P 500 has fallen for two straight months. That has only happened twice since 1995: ahead of the dot-com crash and the 2007-2009 bear market. (Source: Bloomberg.com, September 30, 2015.)
Corporate Earnings and Revenues Deteriorating
The deterioration in the stock market is a reflection of falling revenue and profits and the inevitability of higher interest rates courtesy of the Federal Reserve. Not the trifecta that Wall Street is looking for.
Let’s go back in time a little during the halcyon days of yore. 2013 was a fabulous year for the broader stock market; a year in which the S&P 500 soared approximately 30%. Sadly, that increase did not come on the heels of strong earnings and revenue, it was because quarterly results were not as bad as first predicted. And wide-eyed investors rewarded companies for avoiding a worst-case scenario.
In each successive quarter of 2013, a larger number of companies revised their earnings guidance lower. Yes, normally you’d hope for higher. During the first quarter, 78% of S&P 500 companies that provided preannouncements issued negative earnings guidance. That number climbed to 81% in the second quarter, a record 83% in the third quarter, and a new record 88% in the fourth quarter.
With interest rates at zero, the stock market was the only game in town. And investors played it hard and with reckless abandon.
Fast forward to 2015 and little has changed. Thanks to downward revision to earnings, the estimated year-over-year decline for the third quarter is 4.5%; higher than the expected decline of one percent at the start of the quarter. If the index reports a decline in earnings in the third quarter, no matter how small, it will mark the first back-to-back quarter of earnings decline since 2009. (Source: Factset.com, last accessed September 29, 2015.)
Estimates for third-quarter revenue are equally abysmal at -3.3%. This is also higher than earlier projections of a year-over-year decline of 2.5% at the start of the quarter. Just like earnings, if this holds, this will mark the first time the index has seen three consecutive quarters of year-over-year revenue declines since the first quarter of 2009.
Looking ahead, overly optimistic analysts who don’t know the price of a loaf of bread see earnings growth returning in the fourth quarter of 2015 along with record level EPS. And they project revenue growth in the first quarter of 2016.
Unless of course, it’s cold in the January to March period, in which case they’ll blame missed projections on the weather. Even in California.
Stock Market Wildly Overvalued
The stock market is only as strong as the underlying stocks. So is it a real surprise that the stock market is wildly overvalued?
The oft quoted Case Schiller CAPE/PE Ratio of the S&P 500 is overvalued by around 62.5%. Currently sitting at 23.96, the 10-year average is 15. For every $1.00 of earnings a company makes, investors are willing to pay $23.96. The ratio has only been higher three times: 1929, 2000, and 2007. Each time it was followed by a collapse in the stock market. (Source: Yale University, last accessed September 29, 2015.)
Warren Buffett’s favorite indicator is the Market Cap to GDP Ratio, which, as the name implies, compares the total price of all publicly traded companies to gross domestic product (GDP), the implication being that stocks and their valuations should bear some relationship to the benefits of investing or not investing.
A reading of 100% suggests U.S. stocks are fairly valued. The higher the ratio is over 100%, the more overvalued the stock market. Conversely, the lower the ratio under 100% the more undervalued. The current reading is 123.6%. The ratio has only been higher once since 1950, in 1999, it was at an eye-watering 153.6%.
A variant of the Market Cap to GDP Ratio is the Wilshire 5000 to GDP. The Wilshire 5000 is a market cap weighted index of all stocks actively traded in the U.S. Despite the grandiose 5000 number, the index contains around 3,690 components. This variant is currently at 124.2%. Since 1970, the ratio has only been higher once; in 2000, when it stood at 136.5%. (Source: Stlouisfed.org, last accessed September 30, 2015.)
Buffett’s two indicators suggest today’s markets are at lofty, unsustainable levels; and that the U.S. economy is not doing nearly as well as we’re led to believe. And it’s only going to get worse.
Rising Interest Rates Shock Global Markets
The U.S. stock market is not an economic island. And U.S. companies are relying more and more on foreign countries for growth. In fact, the percentage of sales from foreign countries for S&P 500 companies has increased for the last five years; to 47.82% in 2014 from 46% in 2009. (Source: spindices.com, last accessed September 22, 2015.)
But because the global economy is doing so poorly, S&P 500 companies will have to look elsewhere to pick up the slack. Global stock markets are being routed by growing fears for the global economy and a slump in commodity prices. Despite increasing consumer confidence, global markets are at a two-year low.
The International Monetary Fund (IMF) has sounded the alarm, warning of a possible new financial crisis. Especially in emerging markets, when central banks start to raise interest rates. The U.S. is to make its first move later this year.
That’s bad news for emerging markets anchored to American borrowing rates. Rising global interest rates could usher in a new credit crunch in emerging markets as businesses awash in cheap money (debt) are pushed to the limit.
The debt of non-financial firms in emerging market economies quadrupled from $4.0 trillion in 2004 to over $18.0 trillion in 2014. The ongoing result? Business debt as a share of economic output has soared from less than half in 2014 to almost 75%. (Source: imf.org, last accessed September 29, 2015.)
China has led the charge to higher debt followed closely by other emerging economies including Turkey, Chile, and Brazil-all of which are vulnerable in a higher interest rate environment.
Emerging markets are wholly unprepared to meet higher borrowing costs. And the world could experience a new rash of corporate failures. Just as it did in the U.S. (and still could), local banks who bought much of this new debt could tighten lending, putting a halt on potential growth. For a case study, consider the U.S. credit crisis of 2008-09.
Corporate stagnation could spill over to the financial sector as banks continue to reign in lending. This translates into reduced economic activity and ongoing losses to the financial sector.
Easy monetary policies might be advantageous to advanced economies, but the same cannot be said for emerging markets. In fact, rising interest rates in the United States could unleash an unforeseen economic crisis trilogy that started in U.S. mortgage markets, spread to the eurozone, and is heading to emerging markets. (Source: theguardian.com, September 18, 2015.)
That doesn’t mean advanced economies are in the clear. Borrowing has risen fastest in sectors most vulnerable to an economic downturn, including oil and gas and construction.
A Global Stock Market Crash in 2016
Indeed, the Federal Reserve’s easy monetary policy that was supposed to kick-start the economy has left the U.S. stock market wildly overvalued. On top of that, cheap money translated into an unprecedented borrowing binge from companies around the world most susceptible to an economic downturn and rising interest rates.
In the midst of a weakening global economy, stagnant wages, and non-existent savings, an increase in interest rates from zero to historical levels near three percent could cripple huge portions of the U.S. and global economies and stock markets around the world.
In 2016, interest rates will start to rise, cobbling cash poor Americans; negatively impacting corporate America, earnings, and share prices. Rising interest rates in the U.S. also have the potential to dismantle companies in emerging markets and seize up growth in places like the eurozone, Japan, and China.
What can central banks do to help combat the next downturn besides lower interest rates? Not much. And as we’ve seen, even that hasn’t helped.
The U.S. stock market has been living on borrowed time. And it’s time for payback. 2016 could very well be the year the U.S. stock market collapses.

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Re: S&P 500 Index Movements
« Reply #15 on: January 09, 2016, 01:22:30 PM »
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Re: S&P 500 Index Movements
« Reply #16 on: January 09, 2016, 02:49:14 PM »


Can Anything Prevent a U.S. Stock Market Crash in 2016?
By John Whitefoot, BA Published : October 7, 2015
39
1
 U.S. Stock Market CrashIs the U.S. stock market poised to crash in 2016? Absolutely. The writing has been on the wall for ages. It’s not as if anything has happened of late to point to a stock market crash, it’s just that the rest of the investing community is waking up to what we have been pointing out for years.
Stock Market Crash Getting Warmed Up
The stock market is supposed to be a barometer of how well the broader U.S. economy is doing. The stock market is a forward looking indicator. So, in theory, the stronger the stock market, the stronger the U.S. economy.
And by all accounts, the U.S. economy is doing great! Since bottoming in March 2009, the NASDAQ has soared more than 250% and the NYSE is up 130%, while the S&P 500 has gained 182% and the 30-company-strong Dow Jones Industrial Average is up more than 145%.
But that’s a little misleading. Those gains were fuelled by income-starved investors clutching at cheap money dangled in front of them by the Federal Reserve in the guise of multiple rounds of quantitative easing. This led to lower interest rates and the need for investors to pour more money into the stock market.
Seven years later, the stock market is still trending near record levels. This is in spite of years of underwhelming corporate earnings and revenue growth-or a lack thereof. Companies can only prop up their earnings by cutting costs for so long. And fickle investors can only prop up share prices for so long.
Eventually valuations have to be in sync. The only way that can happen is if investors wait patiently for that to happen. After seven years of easy gains, I doubt investors will wait in the pits. The other option? Investors will get scared and run for the exits, sending stocks reeling.
After years of being on fire, there are indications that this is starting to happen. Since the beginning of 2015, the once high-flying NASDAQ is down almost five percent; the NYSE has lost 11.5% of its value; the Dow Jones is down slightly more than 10%; and the S&P 500 is 8.5% in the red.
Interestingly, the 12-month average level of the S&P 500 has fallen for two straight months. That has only happened twice since 1995: ahead of the dot-com crash and the 2007-2009 bear market. (Source: Bloomberg.com, September 30, 2015.)
Corporate Earnings and Revenues Deteriorating
The deterioration in the stock market is a reflection of falling revenue and profits and the inevitability of higher interest rates courtesy of the Federal Reserve. Not the trifecta that Wall Street is looking for.
Let’s go back in time a little during the halcyon days of yore. 2013 was a fabulous year for the broader stock market; a year in which the S&P 500 soared approximately 30%. Sadly, that increase did not come on the heels of strong earnings and revenue, it was because quarterly results were not as bad as first predicted. And wide-eyed investors rewarded companies for avoiding a worst-case scenario.
In each successive quarter of 2013, a larger number of companies revised their earnings guidance lower. Yes, normally you’d hope for higher. During the first quarter, 78% of S&P 500 companies that provided preannouncements issued negative earnings guidance. That number climbed to 81% in the second quarter, a record 83% in the third quarter, and a new record 88% in the fourth quarter.
With interest rates at zero, the stock market was the only game in town. And investors played it hard and with reckless abandon.
Fast forward to 2015 and little has changed. Thanks to downward revision to earnings, the estimated year-over-year decline for the third quarter is 4.5%; higher than the expected decline of one percent at the start of the quarter. If the index reports a decline in earnings in the third quarter, no matter how small, it will mark the first back-to-back quarter of earnings decline since 2009. (Source: Factset.com, last accessed September 29, 2015.)
Estimates for third-quarter revenue are equally abysmal at -3.3%. This is also higher than earlier projections of a year-over-year decline of 2.5% at the start of the quarter. Just like earnings, if this holds, this will mark the first time the index has seen three consecutive quarters of year-over-year revenue declines since the first quarter of 2009.
Looking ahead, overly optimistic analysts who don’t know the price of a loaf of bread see earnings growth returning in the fourth quarter of 2015 along with record level EPS. And they project revenue growth in the first quarter of 2016.
Unless of course, it’s cold in the January to March period, in which case they’ll blame missed projections on the weather. Even in California.
Stock Market Wildly Overvalued
The stock market is only as strong as the underlying stocks. So is it a real surprise that the stock market is wildly overvalued?
The oft quoted Case Schiller CAPE/PE Ratio of the S&P 500 is overvalued by around 62.5%. Currently sitting at 23.96, the 10-year average is 15. For every $1.00 of earnings a company makes, investors are willing to pay $23.96. The ratio has only been higher three times: 1929, 2000, and 2007. Each time it was followed by a collapse in the stock market. (Source: Yale University, last accessed September 29, 2015.)
Warren Buffett’s favorite indicator is the Market Cap to GDP Ratio, which, as the name implies, compares the total price of all publicly traded companies to gross domestic product (GDP), the implication being that stocks and their valuations should bear some relationship to the benefits of investing or not investing.
A reading of 100% suggests U.S. stocks are fairly valued. The higher the ratio is over 100%, the more overvalued the stock market. Conversely, the lower the ratio under 100% the more undervalued. The current reading is 123.6%. The ratio has only been higher once since 1950, in 1999, it was at an eye-watering 153.6%.
A variant of the Market Cap to GDP Ratio is the Wilshire 5000 to GDP. The Wilshire 5000 is a market cap weighted index of all stocks actively traded in the U.S. Despite the grandiose 5000 number, the index contains around 3,690 components. This variant is currently at 124.2%. Since 1970, the ratio has only been higher once; in 2000, when it stood at 136.5%. (Source: Stlouisfed.org, last accessed September 30, 2015.)
Buffett’s two indicators suggest today’s markets are at lofty, unsustainable levels; and that the U.S. economy is not doing nearly as well as we’re led to believe. And it’s only going to get worse.
Rising Interest Rates Shock Global Markets
The U.S. stock market is not an economic island. And U.S. companies are relying more and more on foreign countries for growth. In fact, the percentage of sales from foreign countries for S&P 500 companies has increased for the last five years; to 47.82% in 2014 from 46% in 2009. (Source: spindices.com, last accessed September 22, 2015.)
But because the global economy is doing so poorly, S&P 500 companies will have to look elsewhere to pick up the slack. Global stock markets are being routed by growing fears for the global economy and a slump in commodity prices. Despite increasing consumer confidence, global markets are at a two-year low.
The International Monetary Fund (IMF) has sounded the alarm, warning of a possible new financial crisis. Especially in emerging markets, when central banks start to raise interest rates. The U.S. is to make its first move later this year.
That’s bad news for emerging markets anchored to American borrowing rates. Rising global interest rates could usher in a new credit crunch in emerging markets as businesses awash in cheap money (debt) are pushed to the limit.
The debt of non-financial firms in emerging market economies quadrupled from $4.0 trillion in 2004 to over $18.0 trillion in 2014. The ongoing result? Business debt as a share of economic output has soared from less than half in 2014 to almost 75%. (Source: imf.org, last accessed September 29, 2015.)
China has led the charge to higher debt followed closely by other emerging economies including Turkey, Chile, and Brazil-all of which are vulnerable in a higher interest rate environment.
Emerging markets are wholly unprepared to meet higher borrowing costs. And the world could experience a new rash of corporate failures. Just as it did in the U.S. (and still could), local banks who bought much of this new debt could tighten lending, putting a halt on potential growth. For a case study, consider the U.S. credit crisis of 2008-09.
Corporate stagnation could spill over to the financial sector as banks continue to reign in lending. This translates into reduced economic activity and ongoing losses to the financial sector.
Easy monetary policies might be advantageous to advanced economies, but the same cannot be said for emerging markets. In fact, rising interest rates in the United States could unleash an unforeseen economic crisis trilogy that started in U.S. mortgage markets, spread to the eurozone, and is heading to emerging markets. (Source: theguardian.com, September 18, 2015.)
That doesn’t mean advanced economies are in the clear. Borrowing has risen fastest in sectors most vulnerable to an economic downturn, including oil and gas and construction.
A Global Stock Market Crash in 2016
Indeed, the Federal Reserve’s easy monetary policy that was supposed to kick-start the economy has left the U.S. stock market wildly overvalued. On top of that, cheap money translated into an unprecedented borrowing binge from companies around the world most susceptible to an economic downturn and rising interest rates.
In the midst of a weakening global economy, stagnant wages, and non-existent savings, an increase in interest rates from zero to historical levels near three percent could cripple huge portions of the U.S. and global economies and stock markets around the world.
In 2016, interest rates will start to rise, cobbling cash poor Americans; negatively impacting corporate America, earnings, and share prices. Rising interest rates in the U.S. also have the potential to dismantle companies in emerging markets and seize up growth in places like the eurozone, Japan, and China.
What can central banks do to help combat the next downturn besides lower interest rates? Not much. And as we’ve seen, even that hasn’t helped.
The U.S. stock market has been living on borrowed time. And it’s time for payback. 2016 could very well be the year the U.S. stock market collapses.

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Re: S&P 500 Index Movements
« Reply #17 on: January 09, 2016, 02:51:31 PM »



Can Anything Prevent a U.S. Stock Market Crash in 2016?
By John Whitefoot, BA Published : October 7, 2015
39
1
 U.S. Stock Market CrashIs the U.S. stock market poised to crash in 2016? Absolutely. The writing has been on the wall for ages. It’s not as if anything has happened of late to point to a stock market crash, it’s just that the rest of the investing community is waking up to what we have been pointing out for years.
Stock Market Crash Getting Warmed Up
The stock market is supposed to be a barometer of how well the broader U.S. economy is doing. The stock market is a forward looking indicator. So, in theory, the stronger the stock market, the stronger the U.S. economy.
And by all accounts, the U.S. economy is doing great! Since bottoming in March 2009, the NASDAQ has soared more than 250% and the NYSE is up 130%, while the S&P 500 has gained 182% and the 30-company-strong Dow Jones Industrial Average is up more than 145%.
But that’s a little misleading. Those gains were fuelled by income-starved investors clutching at cheap money dangled in front of them by the Federal Reserve in the guise of multiple rounds of quantitative easing. This led to lower interest rates and the need for investors to pour more money into the stock market.
Seven years later, the stock market is still trending near record levels. This is in spite of years of underwhelming corporate earnings and revenue growth-or a lack thereof. Companies can only prop up their earnings by cutting costs for so long. And fickle investors can only prop up share prices for so long.
Eventually valuations have to be in sync. The only way that can happen is if investors wait patiently for that to happen. After seven years of easy gains, I doubt investors will wait in the pits. The other option? Investors will get scared and run for the exits, sending stocks reeling.
After years of being on fire, there are indications that this is starting to happen. Since the beginning of 2015, the once high-flying NASDAQ is down almost five percent; the NYSE has lost 11.5% of its value; the Dow Jones is down slightly more than 10%; and the S&P 500 is 8.5% in the red.
Interestingly, the 12-month average level of the S&P 500 has fallen for two straight months. That has only happened twice since 1995: ahead of the dot-com crash and the 2007-2009 bear market. (Source: Bloomberg.com, September 30, 2015.)
Corporate Earnings and Revenues Deteriorating
The deterioration in the stock market is a reflection of falling revenue and profits and the inevitability of higher interest rates courtesy of the Federal Reserve. Not the trifecta that Wall Street is looking for.
Let’s go back in time a little during the halcyon days of yore. 2013 was a fabulous year for the broader stock market; a year in which the S&P 500 soared approximately 30%. Sadly, that increase did not come on the heels of strong earnings and revenue, it was because quarterly results were not as bad as first predicted. And wide-eyed investors rewarded companies for avoiding a worst-case scenario.
In each successive quarter of 2013, a larger number of companies revised their earnings guidance lower. Yes, normally you’d hope for higher. During the first quarter, 78% of S&P 500 companies that provided preannouncements issued negative earnings guidance. That number climbed to 81% in the second quarter, a record 83% in the third quarter, and a new record 88% in the fourth quarter.
With interest rates at zero, the stock market was the only game in town. And investors played it hard and with reckless abandon.
Fast forward to 2015 and little has changed. Thanks to downward revision to earnings, the estimated year-over-year decline for the third quarter is 4.5%; higher than the expected decline of one percent at the start of the quarter. If the index reports a decline in earnings in the third quarter, no matter how small, it will mark the first back-to-back quarter of earnings decline since 2009. (Source: Factset.com, last accessed September 29, 2015.)
Estimates for third-quarter revenue are equally abysmal at -3.3%. This is also higher than earlier projections of a year-over-year decline of 2.5% at the start of the quarter. Just like earnings, if this holds, this will mark the first time the index has seen three consecutive quarters of year-over-year revenue declines since the first quarter of 2009.
Looking ahead, overly optimistic analysts who don’t know the price of a loaf of bread see earnings growth returning in the fourth quarter of 2015 along with record level EPS. And they project revenue growth in the first quarter of 2016.
Unless of course, it’s cold in the January to March period, in which case they’ll blame missed projections on the weather. Even in California.
Stock Market Wildly Overvalued
The stock market is only as strong as the underlying stocks. So is it a real surprise that the stock market is wildly overvalued?
The oft quoted Case Schiller CAPE/PE Ratio of the S&P 500 is overvalued by around 62.5%. Currently sitting at 23.96, the 10-year average is 15. For every $1.00 of earnings a company makes, investors are willing to pay $23.96. The ratio has only been higher three times: 1929, 2000, and 2007. Each time it was followed by a collapse in the stock market. (Source: Yale University, last accessed September 29, 2015.)
Warren Buffett’s favorite indicator is the Market Cap to GDP Ratio, which, as the name implies, compares the total price of all publicly traded companies to gross domestic product (GDP), the implication being that stocks and their valuations should bear some relationship to the benefits of investing or not investing.
A reading of 100% suggests U.S. stocks are fairly valued. The higher the ratio is over 100%, the more overvalued the stock market. Conversely, the lower the ratio under 100% the more undervalued. The current reading is 123.6%. The ratio has only been higher once since 1950, in 1999, it was at an eye-watering 153.6%.
A variant of the Market Cap to GDP Ratio is the Wilshire 5000 to GDP. The Wilshire 5000 is a market cap weighted index of all stocks actively traded in the U.S. Despite the grandiose 5000 number, the index contains around 3,690 components. This variant is currently at 124.2%. Since 1970, the ratio has only been higher once; in 2000, when it stood at 136.5%. (Source: Stlouisfed.org, last accessed September 30, 2015.)
Buffett’s two indicators suggest today’s markets are at lofty, unsustainable levels; and that the U.S. economy is not doing nearly as well as we’re led to believe. And it’s only going to get worse.
Rising Interest Rates Shock Global Markets
The U.S. stock market is not an economic island. And U.S. companies are relying more and more on foreign countries for growth. In fact, the percentage of sales from foreign countries for S&P 500 companies has increased for the last five years; to 47.82% in 2014 from 46% in 2009. (Source: spindices.com, last accessed September 22, 2015.)
But because the global economy is doing so poorly, S&P 500 companies will have to look elsewhere to pick up the slack. Global stock markets are being routed by growing fears for the global economy and a slump in commodity prices. Despite increasing consumer confidence, global markets are at a two-year low.
The International Monetary Fund (IMF) has sounded the alarm, warning of a possible new financial crisis. Especially in emerging markets, when central banks start to raise interest rates. The U.S. is to make its first move later this year.
That’s bad news for emerging markets anchored to American borrowing rates. Rising global interest rates could usher in a new credit crunch in emerging markets as businesses awash in cheap money (debt) are pushed to the limit.
The debt of non-financial firms in emerging market economies quadrupled from $4.0 trillion in 2004 to over $18.0 trillion in 2014. The ongoing result? Business debt as a share of economic output has soared from less than half in 2014 to almost 75%. (Source: imf.org, last accessed September 29, 2015.)
China has led the charge to higher debt followed closely by other emerging economies including Turkey, Chile, and Brazil-all of which are vulnerable in a higher interest rate environment.
Emerging markets are wholly unprepared to meet higher borrowing costs. And the world could experience a new rash of corporate failures. Just as it did in the U.S. (and still could), local banks who bought much of this new debt could tighten lending, putting a halt on potential growth. For a case study, consider the U.S. credit crisis of 2008-09.
Corporate stagnation could spill over to the financial sector as banks continue to reign in lending. This translates into reduced economic activity and ongoing losses to the financial sector.
Easy monetary policies might be advantageous to advanced economies, but the same cannot be said for emerging markets. In fact, rising interest rates in the United States could unleash an unforeseen economic crisis trilogy that started in U.S. mortgage markets, spread to the eurozone, and is heading to emerging markets. (Source: theguardian.com, September 18, 2015.)
That doesn’t mean advanced economies are in the clear. Borrowing has risen fastest in sectors most vulnerable to an economic downturn, including oil and gas and construction.
A Global Stock Market Crash in 2016
Indeed, the Federal Reserve’s easy monetary policy that was supposed to kick-start the economy has left the U.S. stock market wildly overvalued. On top of that, cheap money translated into an unprecedented borrowing binge from companies around the world most susceptible to an economic downturn and rising interest rates.
In the midst of a weakening global economy, stagnant wages, and non-existent savings, an increase in interest rates from zero to historical levels near three percent could cripple huge portions of the U.S. and global economies and stock markets around the world.
In 2016, interest rates will start to rise, cobbling cash poor Americans; negatively impacting corporate America, earnings, and share prices. Rising interest rates in the U.S. also have the potential to dismantle companies in emerging markets and seize up growth in places like the eurozone, Japan, and China.
What can central banks do to help combat the next downturn besides lower interest rates? Not much. And as we’ve seen, even that hasn’t helped.
The U.S. stock market has been living on borrowed time. And it’s time for payback. 2016 could very well be the year the U.S. stock market collapses.

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Re: S&P 500 Index Movements
« Reply #18 on: January 10, 2016, 10:01:54 AM »



MARKETS
A stock-market crash of 50%+ would not be a surprise — or the worst-case scenario
HENRY BLODGET MARKETS    JAN. 5, 2016, 12:47 AM
image: https://static-ssl.businessinsider.com/image/566d68882340f840008b54b3-912-669/screen%20shot%202015-12-12%20at%208.21.11%20am.png

Warren Buffett indicator
Doug Short, Advisor Perspectives
Doug Short, Advisor Perspectives
No one likes to be the bearer of bad news, especially when it comes to stock prices.

But someone has to do it!

So here goes:

By many, many historically predictive valuation meassures, stocks are overvalued to the tune of 75%-100%.

In the past, when stocks have been this overvalued, they have often “corrected” by crashing (1929, 1987, 2000, 2007, for example) . They have also sometimes corrected by moving sideways and down for a long, long time (1901-1920, 1966-1982, for example).

After long eras of over-valuation, like the period we have been in since the late 1990s (with the notable exceptions of the lows after the 2000 and 2007 crashes), stocks have also often transitioned into an era of undervaluation, often one that lasts for a decade or more.

In short, stocks are so expensive on historically predictive measures that the annual returns over the next decade are likely to net out to about 0% per year. 

How we get there is anyone’s guess. 

But…

A stock-market crash of ~50% from the peak would not be a surprise. It would also not be the “worst-case scenario,” by any means. The “worst-case scenario,” which has actually been a common scenario over history, is that stocks would drop by, say 75% peak to trough.

Those are the facts.

Why isn’t anyone talking about those facts?

Three reasons:

First, as mentioned, no one in the financial community likes to hear bad news or to be the bearer of bad news when it comes to stock prices. It’s bad for business.
Second, valuation is nearly useless as a market-timing indicator. 
Third, yes, there is a (probably small) chance that it’s “different this time,” and all the historically predictive valuation measures are out-dated and no longer predictive.
The third reason is the one that everyone who is bullish about stocks these days is implicitly or explicitly relying on: “It’s different this time.”

Just so you know, every time there is a long bull market like the one we’ve had, people come up with lots of reasons to explain why it’s different this time.  (And understandably so! Everyone wants the bull market to continue, and no one wants to miss further gains.) They did that in the late 1920s. They did that in the late 1990s. They did that in 2007. Usually, however, it isn’t different this time, and normality reasserts itself with a vengeance.

As for timing… Unfortunately, even if historical valuation measures are still valid, and stocks are poised to have another lousy decade,  today’s valuations won’t help you predict what the market will do over the next year or two.

And it’s almost as painful to miss further market gains by turning cautious too early than it is to get obliterated in a crash. (Almost.)

So that’s why almost everyone’s still bullish.

But what today’s valuations do tell us is that no one should be surprised if stocks crash 50% or more or are still trading around the current level in a decade.

 Now you know!

(None of this means that you should sell your stocks, by the way. I own stocks, and I’m not selling. It just means that you should be mentally and financially prepared for a major drawdown. You should also be diversified.)

Here are some of the valuation details…

Stocks are wildly overvalued on historically predictive measures
According to several historically valid measures, stocks are now more expensive than they have been at any time in the past 130 years, with the exception of 1929 and 2000 (and we know what happened in those years).

For example, the chart below is from Yale professor Robert Shiller. It shows the cyclically adjusted price-earnings ratio of the S&P 500 for the past 130 years.

As you can see, the current PE ratio of at least 26 is miles above the long-term average of 15. In fact, it is higher than at any point in the 20th century, with the exception of the months that preceded the two biggest stock-market crashes.

image: https://static-ssl.businessinsider.com/image/53b14625ecad040764867678-855-586/shiller%20pe%20with%20rates.jpg

Shiller PE with rates
Robert Shiller
Does a high PE mean the market is going to crash? No. Sometimes, as in 2000, the PE just keeps getting higher for a while. But, eventually, the rubber band snaps back. And in the past — without exception — a PE as high as today’s has foreshadowed lousy returns for the next seven to 10 years.

What about other valuation measures? Most of them paint the same picture.

Here, for example, are a few recent charts from Doug Short, one of the best market-chart makers around.

The first chart plots four valuation measures — the Shiller PE ratio above, another PE ratio (different calculation), the “Q ratio” (a measure of price to replacement cost), and a regression analysis for stocks themselves. Same message: Averaging the four suggests that stocks are ~80% overvalued.

image: https://static-ssl.businessinsider.com/image/566d67ef2340f855008b5458-916-668/screen%20shot%202015-12-12%20at%208.22.13%20am.png

Four valuation indicators
Doug Short, Advisor Perspectives
The average:

image: https://static-ssl.businessinsider.com/image/566d68412340f899008b5449-918-669/screen%20shot%202015-12-12%20at%208.23.06%20am.png

Average of four valuation
Doug Short, Advisor Perspectives
And for good measure, here’s another ratio — one that is ###### referred to as “Warren Buffett’s favorite valuation measure.” (Because he once said it was.)

This one charts the collective value of all stocks to the size of the economy (GDP). It recently hit its second-highest level ever.

image: https://static-ssl.businessinsider.com/image/566d68882340f840008b54b3-912-669/screen%20shot%202015-12-12%20at%208.21.11%20am.png

Warren Buffett indicator
Doug Short, Advisor Perspectives
Doug Short, Advisor Perspectives
You can quibble with any of these measures. But, collectively, they all say the same thing: Stocks are very expensive.

But isn’t it ‘different this time’?
Every time stocks get expensive, some people argue “it’s different this time.”

This time, they say, stock valuations like today’s are justified, and stock prices will just keep going up.

Usually, however, it’s not different.

Eventually, stock prices revert to the mean, usually violently. That’s why the words, “it’s different this time” are described as the “four most-expensive words in the English language.”

But, yes, it’s possible that it’s “different this time.” Sometimes things do change, and investors clinging to old measures miss big gains before they realize their mistake.

It’s possible, for example, that Shiller’s PE ratio is no longer valid. Shiller’s friend, Professor Jeremy Siegel from Wharton, thinks that several things have changed and that stocks are still undervalued.

It certainly seems possible that the future average of Shiller’s PE ratio will be significantly higher than it has been in the past 130 years. But it would take a major change indeed for the average PE ratio to shift upward by, say, 50%.

While we’re at it, please note something else in the Shiller chart above: Sometimes — as in the entire first 70 years of the past century — PEs (blue line) can be low even when interest rates (red line) are low. That’s worth noting, because today you often hear bulls say that today’s high PEs are justified by today’s low-interest rates.

Even if this were true — even if history did not clearly show that you could have low PEs with low rates — this argument would not protect you from future losses, because today’s low rates could eventually regress upward to normal. But it’s just not true that low rates always mean high PEs.

And in case some of your bullish friends have convinced you that Shiller’s PE analysis is irrelevant, check out the chart below.

It’s from fund manager John Hussman. It shows six valuation measures in addition to the Shiller PE that have been highly predictive of future returns. The left scale shows the predicted 10-year return for stocks according to each valuation measure. The colored lines (except green) show the predicted return for each measure at any given time. The green line is the actual return over the 10 years from that point. (It ends 10 years ago.)

Today, the average expected return for the next 10 years is slightly positive — just under 2% a year. That’s not horrible. But it’s a far cry from the 10% long-term average.


image: https://static-ssl.businessinsider.com/image/5304cd6169beddf64535d31d-775-754/screen%20shot%202014-02-19%20at%2010.13.47%20am.png

Chart of stock market valuation
John Hussman, Hussman Funds
 

In conclusion …
Stocks are priced to deliver lousy returns over the next seven to 10 years. I would not be surprised to see the stock market drop sharply from this level, perhaps as much as 50% over a couple of years.

None of this means for sure that the market will crash or that you should sell stocks. (I own stocks, and I’m not selling them.) It does mean, however, that you should be mentally prepared for the possibility of a major pullback and lousy long-term returns.


Read more at http://www.businessinsider.my/stocks-crash-2016-8/#h2Hso7M308ca1Qp4.99

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Re: S&P 500 Index Movements
« Reply #19 on: January 10, 2016, 10:03:52 AM »



S&P 500 'in a world of pain' so sell any rally: Technician
Re-Essa Buckels   | @ReessaBuckels
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Stocks are off to their worst ever start for a new year. But if investors think the sell-off is a buying opportunity, a top technician has one simple message for them.

No way.

"The calendar may have changed but the game remained the same, and that game is China…it's the single most important macro proxy we have" said Rich Ross of Evercore ISI on CNBC's "Fast Money" recently. This week, investors ran from a swooning Chinese stock market and a sharp fall in the yuan, China's currency.
In the past year, the S&P 500 Index and the yuan have traded together. But the Chinese government's decision to devalue its currency in August sparked a torrent of selling in the U.S. as investors feared a weaker Chinese economy could hurt U.S. corporate profits.
Read MoreChina 'riding a bronco' with its currency


According to Ross, continued weakness in the yuan should weigh on oil, U.S. transports and U.S. equities. Some have even argued it could spark a global currency war, as economies move to devalue their currencies in order to compete with cheaper Chinese goods.

"That's why you care about the currency, that's why you care about China" said Ross.


The transportation stocks are off 24 percent since its February 2015 high. "This is not a good sign for the broader markets" said Ross.

By Ross's chart work, the decline in the Chinese currency, along with the shift in investor sentiment could spell even more trouble for the S&P 500 Index. According to Ross, if the S&P 500 breaks below its key support level of 1990, it could retest the lows of 1900. "Even if there's a bounce, fade all rallies" said Ross.

At 1900, Ross expects the index to find support, as it would bump up against its 150-week moving average.


"I think we're all in a world of pain here. At a minimum, I think we test that 1900, we can cross that bridge when we get there" said Ross.
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Re: S&P 500 Index Movements
« Reply #20 on: January 10, 2016, 10:05:08 AM »



Something 'massive' is happening in the economy: Pal
Leanne Miller   | @LeanneBMiller
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China's market turmoil and an extended downturn in oil wreaked havoc on stocks this week, with the S&P 500 Index and the Dow Jones Industrial Average off to their worst start of a year.
The sell-off has some questioning the strength of the U.S. economy, but few think the world's largest growth center is at risk for a contraction. However, one widely regarded investor says there's little debate: the U.S. is likely already in a recession—and he claims to have hard numbers to bolster his case.
Looking at International Monetary Fund data, "the year-over-year change in global exports is at the second lowest level since 1958," Raoul Pal, Publisher of the Global Macro Investor told CNBC's"Fast Money"this week.

Basically, it means economies around the world are shipping their goods at near historically low levels. "Something massive is going on in the global economy and people are missing it," Pal added.

The steep decline in 2015 exports is second only to 2009, when the global recession led to a 37 percent drop in export growth.

Read MoreUS close to recession, world already in one: Pro


There are two main contributing factors to this recession, Pal told CNBC: A resurgent U.S. dollar and China's slowdown. The greenback's strength has helped keep a lid on energy prices, but it's had undeniable spillover effects, the investor said.

"It started unraveling in oil and all commodities, that impacted exports. Everyone had dollar debts and no one had money," Pal added.

The investor correctly predictedthe dollar's surge back in November 2014 on CNBC's "Fast Money". Since that call, the dollar has risen 15 percent—an ascent that Pal believes will only continue due to the shortage of dollars globally.

"I don't think I've ever been this right in my career," Pal said.

The dollar's sustained strength has called into question moves by the Federal Reserve and shaken commodity markets. For the time being, Pal believes the greenback's got nowhere else to go but up –and global markets are going to pay for it.


A man watches stock prices at a brokerage in Beijing, China.
Market sell-off triggers fears of 'Asian flu' again
Traders work on the floor of the New York Stock Exchange.
Why I'm worried about a recession: Citi strategist

"The markets are following a pattern. Growth has been revised down and it looks like the markets will have to" compensate for the adjustment, Pal said.
"China is certainly a big mess and it's likely to get worse," he said. "Even whether they devalue their currency sharply or slowly, there's still a big mess to work out with all of the debts in the system. I think it's a problem."

Despite the doom and gloom Pal predicted, he suggested one buying opportunity.

"Right now I think one of the best bets in the world is to own the TLT or bonds," Pal said, speaking of the iShares bond exchange traded fund and government debt. "No one is long of bonds and I think the most likely outcome is that the bond market has a huge rally, expressing inflation."

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Re: S&P 500 Index Movements
« Reply #21 on: January 10, 2016, 10:08:40 AM »



This isn't like 2008—but a correction IS coming
Jack Bouroudjian   | @JackBouroudjian
Friday, 8 Jan 2016 | 11:50 AM ET
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Stocks are in uncharted territory with volatility spikes and drops in all of the major equity indices to start the New Year. It has been ugly, with $2.5 trillion in market capitalization being wiped out in the first four trading days of 2016, and may signal a dramatic rise in cross-asset volatility for the rest of 2016.

Why is this all happening? Plain and simple, the path to Federal Reserve monetary-policy normalization will be painful. With divergent monetary policy, there is less scope for suppression of market volatility. The Fed is beginning to tighten and drain liquidity from the markets, utilizing reverse repurchases to provide a soft floor under short-term interest rates.



A trader works on the floor of the New York Stock Exchange.
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A trader works on the floor of the New York Stock Exchange.
The Fed said in its minutes that "even after the initial increase in the target range, the stance of policy would remain accommodative. Gradual adjustments in the federal-funds rate would also allow policy makers to assess how the economy was responding to increases in interest rates."

The statement suggests that the Fed will be data dependent and use current economic activity to determine the timing of the next rate increase.



NYSE Trader
A 20-30% correction is possible: Bouroudjian
One of the ancillary effects of this path to normalization is the effect on energy. Dollar strength has put pressure on all dollar-denominated asset classes including the most important geopolitical commodity: Crude.

Crude oil has remained below $40 and is now headed toward $30, which has not happened since 2008. The drop has been steep, but even more important is the velocity at which prices moved. WTI in recent trading broke through the lows from 2008 which immediately drew everyone's attention. Crude oil volatility will continue to affect equities in the U.S. and Europe. If China allows for faster currency depreciation than the financial markets expect, this will increase the downward pressure on crude.


Pumpjacks operated by XX pump petroleum from the ground on September 23, 2014 near Ruehlermoor, Germany.
Predictions: $70 oil, the winner of 2016 & more
Eventually, lower energy prices along with lower input costs for corporate America will be a tailwind for equities. But sovereign wealth funds that are from oil-producing states need to have oil much higher to meet their budgetary needs domestically. This market dynamic will drive the trajectory of global equities.

The level of sovereign wealth funds assets under management as of last week was at 7.2 trillion, with 4.4 trillion originating in commodity and oil-rich nations. With falling crude prices, the pressure on these sovereign wealth funds continues to mount. The need has arisen to repatriate the capital from sovereign wealth funds with spillover effects occurring for global equity markets. When markets move fast they leave no prisoners, it creates a global margin call; investors sell what they "can," not what they "want."


Stephen Weiss
China's problem? It's a teenager: Stephen Weiss
So what does this mean for the average investor? Be alert and defensive as the market corrects. One thing for sure is that we will continue to witness volatility in the capital markets for a prolonged period of time. A 20 percent to 30 percent correction in equity prices would be a healthy move after the recent run-up over the last few years. There will be continued earnings contraction in S&P 500 companies with a stronger U.S. dollar impacting manufacturers adversely.

The strong dollar will exacerbate lower prices for commodities in addition to crude oil. All of this will bring out the "doom and gloomers" including those who claim this is 2008 all over again. Wrong! Remember, bull market corrections are fast and vicious and it will look worst at the bottom. This is not 2008, it is a cyclical correction in a long term bull market. Be ready to put money to work as stocks go on sale throughout this year.

Commentary by Jack Bouroudjian, CEO of Index Futures Group LLC, a registered independent broker, and CIO of Index Capital Partners, a registered commodity-pool operator. He was also a three-term director of the Chicago Mercantile Exchange and founder and advisor of UCX (Universal Compute Exchange). Follow him on Twitter@JackBouroudjian.

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Re: S&P 500 Index Movements
« Reply #22 on: January 11, 2016, 08:33:02 AM »



Stock futures sink in pre-market trading, hinting at lower Wall Street open
Javier E. David   | @TeflonGeek
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Traders work on the floor of the New York Stock Exchange.
Lucas Jackson | Reuters
Traders work on the floor of the New York Stock Exchange.
U.S. stock futures fell on Sunday, indicating a lower open on Monday and extending a slide that began last week.

Days after Wall Street started the year on an ugly down note, Dow futures opened about 90 points lower, implying triple digit losses for the Dow Jones Industrial Average. S&P futures shed about 10 points in early Asia trading.

Last week, blue chip and technology shares inaugurated 2016 with their worst ever first week of trading. Investors took fright over the state of China's financial and economic turmoil, and a prolonged slump in crude that—while giving consumers cheaper energy prices—threatens the financial health of major energy producers.

The broad market, as represented by the S&P 500 Index, shed a whopping $1 trillion last week, according to one analyst's estimate.

Read MoreThe market's horrible week, by the numbers


Traders work on the floor of the New York Stock Exchange September 17, 2008 in New York City. The Dow Jones Industrial Average closed down 449 points today despite American International Group, Inc. (AIG) $85 billion government bailout.
Worried about US recession? It's already here: Pro
Traders work on the floor of the New York Stock Exchange.
If you're looking to buy the dip—don't: Analyst

Meanwhile, the Federal Reserve's campaign of interest rate hikes remains a wild card for investors. The U.S. is currently the only major economy that is still experiencing growth, albeit modest. A growing number of economists expect the pace of growth to soften this year.
Investors will also be watching movements in the currency markets, where the dollar has begun a modest consolidation. Flight-to-safety buying, as well as the prospect of higher rates have boosted the greenback, but the euro has clawed back some ground in recent sessions.

Among major currencies, the risk-averse environment has also broadly lifted the Japanese yen

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Re: S&P 500 Index Movements
« Reply #23 on: January 11, 2016, 02:10:50 PM »



Poll: Is the sell-off in equity markets overdone?
CNBC.com staff   | @CNBC
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Fred Dufour | AFP | Getty Images
Major stock markets saw significant sell offs on the first week of 2016, with renewed concerns over China exacerbated by rising tensions in the Middle East, lower commodity prices, and a threat to geopolitical stability after North Korea conducted an unexpected nuclear test.

Chinese stocks were suspended from trade twice in just four days, after the CSI300 saw losses exceeding 7 percent on Monday and Thursday, which triggered the new circuit breakers - a market calming regulatory tool introduced at the start of the year, only to be scrapped off by the end of the week. By Friday, the Shanghai composite erased its 2015 gains and fell by 9.97 percent for the week.

Barclays said in a note several factors were likely to have contributed to the sharp corrections in Chinese equity and foreign exchange markets.

A customer holds a 100 Yuan note at a market in Beijing.
This is what Goldman thinks about the yuan
They include the expiration of the share sale ban on major shareholders of listed companies, the introduction of the new circuit-breakers, subdued Purchasing Managers' Index (PMI) data, a measure of factory activities in the manufacturing and non-manufacturing sectors, and the devaluation of the yuan.
The volatility in Chinese markets spread beyond its borders and led to major indexes around the world registering significant losses for the week.
Stateside, the Dow Jones industrial average shed 6.1 percent, the S&P 500 lost 5.96 percent, and the Nasdaq composite was down 7 percent.
In London, the FTSE 100 was down 5.28 percent for the week.
In this week's Trader Poll, tell us if investors have jumped the gun and overdone the 2016 sell-off:

Is the 2016 sell-off overdone?

Yes
42%
No
27%
Too early to tell
31%
Total Votes: 481

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Re: S&P 500 Index Movements
« Reply #24 on: January 11, 2016, 06:09:20 PM »



5 reasons a 2007-style real estate meltdown is unlikely now

By Daniel Goldstein
Published: Jan 10, 2016 10:26 a.m. ET

     40 
The real-estate industry is on much more solid footing
Photo by Justin Sullivan/Getty Images
When it comes to investing in the stock market, you may lose your shirt, but you probably won’t lose your home. In fact, when the equity market gets rough, real estate tends to be a life raft for investors seeking safety.

“Real estate is Americans’ preferred investment for money that they won’t need for at least 10 years and that hasn’t changed,” said Greg McBride, chief financial analyst with New York-based Bankrate.com. “Nervous investors always look to real estate rather than shy away from it in times of volatility.”

While stocks around the globe are off to a rough start in 2016, it doesn’t necessarily mean déjà vu all over again, at least when it comes to a repeat of the real estate tumble that began in 2007 but accelerated sharply following the 2008 rout of the equities market, when home prices in late 2011 were down more than 20% from their peak in spring of 2007.


Here’s why you shouldn’t be panicking if you’re looking to buy or sell a home:


Interest rates should stay low

With the latest bout of declining equities, the pace of further Federal Reserve rate increases is likely to slow, according to Kevin Finkel, senior vice president of Resource America Inc. REXI, -1.48%  , a real-estate investment trust in Philadelphia. “It would take a lot more than the volatility we’re seeing now for them to get knocked off the current course of raising rates, but will they slow down [coming rate hikes]? Probably.”

The Federal Reserve raised interest rates a quarter point last month, the first time since 2006, but minutes from the Dec. 15 to Dec. 16 meeting showed that not all of the bankers were completely on board with the initial rate hike, despite the unanimous vote, because of concerns over inflation being less than expected.

The Fed isn’t “chomping to follow up last month’s rate hike as early as this month, or possibly even in March unless the economy, and possibly inflation, shows more ****** than shown recently,” said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto.

While the refinancing boom has slowed, that’s only because the majority of Americans who could refinance to a fixed rate have already done so, so the impact of “rate-shock” when short-term adjustable rate mortgages (ARMs) readjust will be minor compared with what happened between 2007 and 2012, when many Americans could no longer afford their new housing payments and defaulted.

Currently, despite an increase in bank repossessions rising almost 60% in November 2015 compared with a year earlier, the percentage of loans in foreclosure nationally is the lowest level since 2007, according to the Mortgage Bankers Association. Foreclosures reached a peak of 4.6% in 2011 at the height of the real estate bust.

“The recent rise in bank repossessions represents banks flushing out old distress rather than new distress being pushed into the pipeline,” said Daren Blomquist, vice president of Irvine, Calif.- based RealtyTrac, a real-estate research company.

There’s less risk of a new mortgage bubble

Unlike the 2005 to 2012 mortgage meltdown, when so-called liar loans and exploding ARMs flooded the market, the subsequent pullback in credit may have been overly tight, but it does mean in 2016 there are fewer real estate bubbles waiting to pop. While it’s true there are markets that have seen incredibly inflated real-estate values such as San Francisco and New York, it’s not fueled by unsustainably loose credit standards.

“The changes that have taken place over the past five to seven years have built a more stable foundation” in the mortgage industry, said Michael McPartland, a managing director and head of investment finance for North America at Citigroup’s C, -3.01%   private bank. “There just aren’t a lot of the exotic products like interest-only [loans] and super-high loan-to-value [mortgages],” he said. “If things slow down, there will be a contraction, but not a pop.”

McPartland says it may be harder for borrowers to afford a 20% down payment and monthly interest payments that are principal and interest, instead of just interest-only, but the flip side is increased home equity (the national average is 30% equity), so home buyers are less likely to leave the keys on the counter and walk away if things go bad. Foreclosure starts in July of just over 45,000 were the lowest level since November 2005, nearly a 10-year low, according to RealtyTrac.

Foreclosure starts in November 2015 of just over 36,000 were the lowest level since December of 2005, near a 10-year low, according to a Dec. 10 report from real estate data firm RealtyTrac. “What we can expect is for foreclosures to continue falling as banks clear through their backlog of inventory,” Matthew Gardner, chief economist at Windermere Real Estate in Seattle, told RealtyTrac last month.

Help for first-time home buyers

Last year, the Federal Housing Administration began reducing mortgage insurance premiums on loans by an average of $900 a year, in an effort to nudge first-time home buyers and millennial borrowers who might not have much cash for a down payment to finally enter the housing market. The effort appears to have worked, with FHA loans jumping to 23% of all financed purchases in the second quarter of 2015, up from 19% a year earlier, according to RealtyTrac data. The FHA and other federal moves to increase credit, along with a strengthening economy, may just help boost the market for new mortgages in 2016 as much as 10% over last year despite the increase in interest rates, Mike Fratantoni, the chief economist for the Mortgage Bankers Association, said in December.

Those other federal moves include Fannie Mae and Freddie Mac making lower down payment loan options available to more borrowers. In 2014, the agencies began to buy loans with just a 3% down payment, or 97% loan-to-value ratio. Fannie Mae also announced in 2015 that it would allow income from a non-borrower household members to be considered as part of a loan applicant’s debt-to-income ratio. That could help some borrowers, who might have family members on Social Security or disability living with them, or a renter in a basement apartment, to boost their income levels and help them qualify for a loan.

Lower oil prices

At the end of 2008, gasoline prices, which had risen to a record $4 a gallon nationwide that summer, had crashed to under $2 a gallon. In that case, the cheap gas (and diesel) wasn’t a good thing, as the worldwide economy was shuddering to a halt.

While China’s economy is still contracting, the U.S. economy isn’t, so the lowest gas prices since 2009, with the national average now under $2 a gallon, are likely to help the housing market.

“The continuing drop in gas prices is freeing up valuable disposable income,” says Resource America’s Finkel, which can help Americans absorb higher rent payments, or move up to a more expensive property.

Job growth

While jobs typically are a lagging indicator of an economic downturn, the U.S. has had a slow but steady rate of job creation for the past five years. Even with weakness seen during the summer, job gains in 2015 will top 2.5 million, making it the second-best calendar year for U.S. job growth in this millennium, after last year’s 3.1 million. The last time more jobs were created in a two-year period was at the height of the dot-com boom, in 1998-1999.

“The economy continues to create jobs, and the quality of jobs being created has improved as the economic recovery has progressed, with professional and business services leading the way,” said Bankrate’s McBride. “This is indicative of an economic recovery that is sustainable.” And while in this economy, wages have been slow to recover, and it’s been a challenge to get long-term unemployed Americans who no longer count in the official jobless statistics to return to the job market, the job growth has been good enough to boost the housing sector and lure millennial borrowers off the fence.

“If wage growth materializes in a broader way, this will be the catalyst for many existing homeowners to put their homes on the market and finally look for the move-up buy, boosting housing and alleviating the inventory shortage,” McBride said.

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Re: S&P 500 Index Movements
« Reply #25 on: January 11, 2016, 06:12:10 PM »



Why is everyone so bearish?

By Avi Gilburt
Published: Jan 10, 2016 12:34 p.m. ET

     105 
Getty Images
When I read many of the comments to columns I see posted, the pervasive bearishness is quite striking, whether it is negative about the economy, the market, or just simply overall negative. This applies whether the columns themselves are positive or negative, or whether the site is overall positively or negatively bent.

In my experience, it seems to be that the public (or at least those within the public that post comments) leans bearish much of the time. The only time you see them being bullish is about metals, and the only reason they are bullish metals, is because they think everything else around them is bearish and negative. Why is that?

As one who has always attempted to view markets from an unbiased perspective to determine what the next bigger move will be, it almost seems as though I am fighting an uphill battle whenever I determine we should be looking up in the stock market or down in the metals market. Whenever I write a bearish market column, I see a large number of posts in support of my perspective. But when I write a bullish market column, I am derided and demeaned by posts of how I don't know what I am talking about since the market is clearly going to crash.


Let's face it folks; bearishness sells. Bearishness seems to be what the public wants to see in print. Have you ever wondered why?

Focusing on the negative

Is there an old-timer to whom you have spoken lately who has not mentioned how things were "better back in the day?"

If one were to seriously consider history, on just about every metric, the world is in far better shape than almost any time in history. In fact, one of my favorite rides at Walt Disney World in Florida is the Carousel of Progress, and it was rumored to be Walt's favorite as well. That ride presents how we have technologically progressed through the 20th century, and one cannot deny those significant progressions from a period of time before electricity.

While we are very concerned about war and terrorism today, are we any worse than World War I, World War II, our own Civil War, etc.? We gripe about wages, poverty, and the value of the dollar, but poverty is at historic lows, and the poor have things today that rich people couldn't dream about 100 years ago. As much as we complain about our current health-care system, do you recognize the leaps and bounds we've taken in the past 100 years in medicine/health/science? Are we now living longer or shorter lives than we were 100 years ago?

From my perspective, we have clearly been on a long term path of progression. While we certainly have experienced periods of regressions, overall, we seem to have historically been on a positive path. Yet, most seem to only focus upon the negative regressions. Why?

Roy F. Baumeister, a professor of social psychology at Florida State University, captured the idea in the title of a journal article he co-authored in 2001, "Bad Is Stronger Than Good," which appeared in The Review of General Psychology.

In that article, he explained that those who are "more attuned to bad things would have been more likely to survive threats and, consequently, would have increased the probability of passing along their genes ... Survival requires urgent attention to possible bad outcomes but less urgent with regard to good ones."

This seems to cause man to become hyper-focused on the negative, which is driven by his innate desire to survive. Furthermore, when we consider that fear is the strongest emotion generated by our brain stem, we can develop a negativity loop that drives us to continually focus upon the negative by our strongest natural tendencies.

Now, we have a better understanding as to why fear or bearishness sells. Our innate tendencies seem to drive us in that direction, despite all the empirical data to the contrary. While our innate tendencies seem to have been pre-programmed within our brain stems to assist man to survive in a life and death struggle, I am not sure such hyper-focused tendencies help us in all aspects of our current lives in which we clearly allow them to reign.

The herd mentality

Man also has a natural tendency for herding. And just as in our financial markets, such tendencies for focusing upon the negative, as well as herding, do not always serve an investor in a manner which is positive for their investment account. Rather, there are times when an investor has to fight their natural tendencies to avoid adverse effects upon their investment account. I have spoken about this general perspective a bit more in this recent column.

It is for this reason that we recognize that contrarian thinking is much preferred to "group think" when dealing with financial markets.

Consider how many of you have maintained a bearish bias of the stock market since 2009? We have heard all the same reasons that feed our natural bearish tendencies. But one has to question if the fundamentals, which has many currently bearish, will foretell a long-term top in our market so that the majority of the market may prepare for the "crash." Well, has the market ever telegraphed such a market decline?

Think about it. Is it more fashionable to be bearish today than bullish? The Fed is taking away easy money. The economy is supposedly not doing so well. GDP has supposedly been anemic. Commodities have been in free fall. Real unemployment is still quite high. Government debt is increasing at an alarming rate. Insurance costs are rising by double-digit percentages annually. High-yield debt has been crashing. Is there any good news out there, or do we have a solid wall of worry being built?

Be a contrarian

I would like to remind you of what was said by Professor Hernan Cortes Douglas, former Luksic Scholar at Harvard University, former Deputy Research Administrator at the World Bank, and former Senior Economist at the IMF, regarding those engaged in "fundamental" analysis for predictive purposes:

“The historical data say that they cannot succeed; financial markets never collapse when things look bad. In fact, quite the contrary is true. Before contractions begin, macroeconomic flows always look fine. That is why the vast majority of economists always proclaim the economy to be in excellent health just before it swoons. Despite these failures, indeed despite repeating almost precisely those failures, economists have continued to pore over the same macroeconomic fundamentals for clues to the future. If the conventional macroeconomic approach is useless even in retrospect, if it cannot explain or understand an outcome when we know what it is, has it a prayer of doing so when the goal is assessing the future?”

So, do we sound like we have struck the top of our long-term bull market? Or are our natural tendencies simply driving us on the "bear bus?" While we may certainly still see another pullback down to the 1800s in the stock market, does the news flow suggest that we are topping in a long-term bull market, or does the news flow still seem too bearish to be at a major top?

I want to take this opportunity to wish you and your families a very happy and healthy new year. May the new year bring you and your families health, prosperity and growth, and may we continually strive together to uncover the truths within our financial markets so we can maintain on the correct side of the trend.

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Re: S&P 500 Index Movements
« Reply #26 on: January 12, 2016, 05:44:05 AM »



1923.67

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Re: S&P 500 Index Movements
« Reply #27 on: January 12, 2016, 05:47:33 AM »

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Re: S&P 500 Index Movements
« Reply #28 on: January 12, 2016, 07:03:48 AM »



Bearish J.P Morgan says sell stocks on any rally

By Sue Chang
Published: Jan 11, 2016 2:13 p.m. ET

     131 
For first time in seven years, advice moves away from buy the dips
AFP/Getty Images
The mood on Wall Street is decidedly bearish.
J.P. Morgan Chase has turned its back on the stock market: For the first time in seven years, the investment bank is urging investors to sell stocks on any bounce.

“Our view is that the risk-reward for equities has worsened materially. In contrast to the past seven years, when we advocated using the dips as buying opportunities, we believe the regime has transitioned to one of selling any rally,” Mislav Matejka, an equity strategist at J.P. Morgan, said in a report.

Aside from technical indicators, expectations of anemic corporate earnings combined with the downward trajectory in U.S. manufacturing activity and a continued weakness in commodities are raising red flags.


“We fear that the incoming fourth-quarter reporting season won’t be able to provide much reassurance for stocks,” he said.

Expectations for earnings are so bearish that the hurdle rate—the minimum rate of return on an investment that makes it worth the risk—for fourth-quarter results is now minus 4%, compared with plus 5% several months earlier.

“If this were to materialize, it would be the weakest quarter for EPS delivery so far in the upcycle,” said Matejka.

Further adding to the grim outlook is the slowdown in the manufacturing sector, which pushed J.P. Morgan’s profit-margin proxy — the gap between pricing power and the wage costs — into negative territory in the fourth quarter for the first time since 2008.

The Institute for Supply Management’s manufacturing index, released last week, dipped to 48.2% in December from 48.6% in November, the lowest since the Great Recession.

The positive correlation between oil prices and earnings on top of the sustained gains in the U.S. dollar — which has an inverse correlation to results — will also weigh on the market, he added.

J.P. Morgan
U.S. oil futures slid under $32 a barrel on Monday for the first time since December 2003 with February West Texas Intermediate crude CLG6, -6.12%  dropping 5.9% to $31.19 a barrel. February Brent crude, the global crude benchmark LCOG6, -6.71% was off 6% to $31.45 a barrel.

Meanwhile, the ICE U.S. Dollar index DXY, +0.55% a gauge for the greenback’s strength against a basket of six currencies, has risen more than 7% over the past 12 months, a trend it is expected to maintain until the middle of 2016.

Read: Oil could fall toward $20, but not for the reason you think

Among other analysts, Katie Stockton, chief technical strategist at BTIG, is likewise pessimistic.

“The SPX is set up for an oversold bounce this week, with seven of our market internal measures at contrarian extremes,” she said. “But we are unconvinced that a shakeout is underway.”

Stockton added that she is more cautious on the market’s intermediate outlook in the wake of last week’s 6% rout, as the sharp loss in momentum suggests that the next support level of 1,872 touched in September may be in jeopardy in the next couple of months.

BTIG
“Fortunately, we expect an oversold bounce to afford a better selling opportunity in the days ahead,” she said.

Goldman Sachs on Monday reiterated its S&P 500 target of 2,100 for 2016 despite the wobbly start.

“The prospective price gain from the current level equals 9% but rises to 11% when dividends are included,” said David Kostin, Goldman’s chief U.S. equity strategist.

Dividends have accounted for 78% of the market’s total return since 1965, he noted.

The S&P 500 SPX, +0.09%  is down 0.6% to 1,909, failing to hold early Monday gains. The Dow Jones Industrial Average DJIA, +0.32%  is down 0.4% to 16,280 and the Nasdaq Composite COMP, -0.12%   has dropped 1.1% to 4,594.

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Re: S&P 500 Index Movements
« Reply #29 on: January 12, 2016, 07:05:05 AM »



An ‘extremely normal and realistic’ 26% drop on the S&P 500 is taking shape

By Shawn Langlois
Published: Jan 11, 2016 12:11 p.m. ET

     24 
All Star Charts
It’s been a brutal start to 2016 in the markets. But the way this chart is setting up, there’s a lot more pain on the way, according to J.C. Parets of the All Star Charts blog.

“We’re down 9% from the all-time highs in the S&P 500 SPX, +0.09% and I see people acting like two-year-olds that just had their favorite toy taken away from them,” he said. “Why, because the market is down 9% from its highs last year after rallying over 220% over the prior 6 years? Please.”

He goes on to explain how this recent spate of selling action isn’t unusual and how “things get absolutely destroyed all the time.” Like the British pound, energy, emerging markets and agricultural commodities, to name just a few.


“And these are real collapses in prices, not this 9% nonsense that people are getting all worked up about because it’s the S&P 500, or Apple AAPL, +1.62% or something that they’re too sensitive about,” Parets wrote in his blog post.

He used the chart above to support his prediction that the S&P is headed toward the 1,570 level, which would be an “extremely normal and realistic” 26% correction from the top. Or another 20% from where it stands now.

“This is a ‘sell rallies’ market, not a ‘buy the dip’ environment,” he added.

That’s not to say there won’t be bounces. “Go look at a list of the best days in stock market history, they all come during massive selloffs,” Parets said. “I would expect this decline to be no different and the rallies we do get should be vicious.”

In another chart he posted on Monday, he pointed out the fact that, amid the declines, mega-cap stocks are crushing micro-caps lately, and that’s usually a sign that institutional dollars are flowing into the relatively safer corner of the market. It fits his bearish thesis.


One way to play what he sees as a continuing trend is to go long the Dow DJIA, +0.32%  while shorting an equivalent position in the Russell Micro-cap Index RUMIC, -0.80%  .

“This is not something that usually occurs when the market overall is going up, but normally on when it’s on its way down,” Parets said. “I’ve been pounding the table to be short, and that there is a lot more downside coming. So I have to say that I am happy to see this particular ratio confirm what we’re seeing elsewhere.”

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Re: S&P 500 Index Movements
« Reply #30 on: January 12, 2016, 07:06:20 AM »



Is it a crash, correction or capitulation for stocks and bonds?

By Michael A. Gayed
Published: Jan 11, 2016 1:15 p.m. ET

     19 
Getty Images
"Hindsight is wonderful. It's always very easy to second guess after the fact." - Helen Reddy

Everywhere I turn, there seems to be someone talking up their book arguing that "everyone" is bearish, or bullish, and that it's time to be contrarian. When asked further, the definition of "everyone" appears to change person by person. Some use a small sample size of column comments, friends or colleagues to extrapolate that the whole wide world is negative or positive on the S&P 500 SPY, +0.10%  or Russell 2000 IWM, -0.43%

None of this in my opinion is valid. In a world awash with information thanks to the Internet, often the most extreme and most negative sounding comments get the most attention. One of the things that stuck with me in taking a marketing course in college was that reviews tend to be skewed negative, because those with positive things to say often don't feel as compelled to voice their opinions. However, just because we see more negative comments, does not mean that "everyone" is negative.


As I referenced in my latest newsletter writing "On Stock Corrections, Hindsight, and Anger" (click here to read), weeks like last week happen no matter what strategy or indicators you use to mitigate risk. Use the 200-day/40-week moving average to decide when to get in and out of stocks? You'll find several instances in history of weeks down just as much, if not more.

The media is harping on what's happened to equities, but few are asking if we are on the verge of one of those rare instances where stocks and bonds fall together at the same time. Sometimes worst weeks happen even when using proven leading indicators of volatility, because no strategy or indicator can possibly get every single major move down right. This is especially true in extremes like last week.

Historically, bonds (more specifically Treasurys) are the "risk off" trade that benefit from stock market volatility on average. We show this in our award winning paper (click here to download). On average, however, doesn't mean every time. This move came out of nowhere, but more concerning is the behavior of Treasurys throughout as long-duration failed to significantly rally.

This makes me wonder if we are entering a period where everything goes down (with cash/short-duration Treasurys more isolated). Put simply, given the magnitude of the decline in stocks worldwide and sharpness of the move, the yield curve should have flattened a lot more.

Take a look below at the price ratio of the iShares Barclays 20+ Year Treasury Bond Fund ETF TLT, -1.09%  relative to the Vanguard Short-Term Bond ETF SHV, -0.01%  . As a reminder, a rising price ratio means the numerator/TLT is outperforming (up more/down less) the denominator/SHV. That ratio should have gone vertical last week. It didn't.


Either Treasurys are not confirming the decline, and we bounce in equities, or we are entering the worst of all worlds where stocks and bonds fall hard together. While rare, such instances have happened in the past, and may be on the verge of happening again. It is worth asking why exactly the 10-year Treasury yield isn't down more given on-going commodity pressure (deflationary) and falling stocks (deflationary).

So is it a crash, a correction, or are we on the verge of capitulation in stocks? I believe these are the wrong questions. The question is are we entering a crash, correction or capitulation in stocks and bonds together. Right now, it may be worth waiting for the dust to settle, and see if there are any aftershocks to come given macro events, and the abnormality of market behavior to start 2016.

This writing is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction, or as an offer to provide advisory or other services by Pension Partners, LLC in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Pension Partners, LLC expressly disclaims all liability in respect to actions taken based on any or all of the information on this wr

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Re: S&P 500 Index Movements
« Reply #31 on: January 12, 2016, 10:51:10 AM »
Stocks needs a "big title" or scandal to crash.

Such as "tech bubble", "george 傻佬", "subprime bubble", "lehman", ... to crash..
Never con anyone so don't blame me if you lose money.

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Re: S&P 500 Index Movements
« Reply #32 on: January 12, 2016, 02:36:03 PM »



Home
"Fasten Your Seatbelts" - UBS Warns Of "Record Spikes In Volatility" If This Level Breaks
Tyler Durden's pictureSubmitted by Tyler Durden on 01/11/2016 21:00 -0500

Bear Market Japan Mean Reversion Volatility


 
inShare
17
 
Having warned earlier in the week of the potential for a significant crash in US equities and the appeal of owning gold, UBS goes one further in their recent report warning of "record spikes" in volatility should the following levels break...

Generally, the late September bottom in equities has an absolutely pivotal character for a lot of markets. In Europe, the September low represents the 2009 bull trend. In the Russell-2000 or the MSCI World, it is the neckline of a huge head & shoulder formation and in the S&P-500 it is an obvious double bottom, which would be negated as well as breaking the 32-month moving average.



Analytically, this moving average has a very good track record in signaling whether the US market is still in a bull market or not. Even the 1987 crash was just a pullback and mean reversion to this moving average, whereas in 2001 and 2008 the break of the 32-month average was confirmation that a real bear market had started.

So regardless of when we get this signal, a break of the late September low at 1867 in the S&P-500 would be the ultimate confirmation that the US market is also in a real bear market and in this case we would recommend to fasten your seatbelts.



If we look into the macro world we are obviously living in a world of extremes. We have record debt in the Emerging Market complex, in Europe, in Japan and in the US; with margin debt in the US at record levels, M&A hitting record levels, record ETF holdings in corporate bonds, record auto loans in the US, and the list continues.

We would be surprised that in this highly leveraged world, in combination with a structural decline in market liquidity, a 7-year cycle decline would just be mild. We think it’s actually just the other way around and in this context we see last year’s rise in volatility as just the start of a period with exceptionally high volatility where we wouldn’t be surprised to see record spikes in volatility over the next 12 to 17 months. So another key call we have for the next 12 to 15 months is to be long volatility.

 



Particularly with regards to the ongoing bear market in high yields, we think that volatility in equities is too low and this will be one of the key charts for 2016.

Last year we argued that we generally see all these divergences as a leading indicator for an important top in global equities. 12 months later we are in the next phase of the global rolling over process, where we see more and more markets having already fallen into a bear market, and where on the other hand we can clearly say that without a new momentum impulse coming from the fundamental world the air for the remaining outperformer markets will get increasingly thin.

Source: UBS

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Re: S&P 500 Index Movements
« Reply #33 on: January 13, 2016, 05:40:22 AM »



1938.68

+15.01

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Re: S&P 500 Index Movements
« Reply #34 on: January 13, 2016, 07:12:04 AM »



This stock-market ‘screwdriver’ could be pointing to a ‘major bottom’ for the S&P

By Shawn Langlois
Published: Jan 12, 2016 12:38 p.m. ET

     93 
200-day moving average may be punching a hole in the bearish sentiment
Everett
Beware the screwdriver!
The 200-day simple moving average is like the screwdriver of the technical analysis toolbox, says Greg Harmon of the Dragonfly Capital blog. “You can use it to take things apart and put them back together as it was designed,” he said. “But it can also be used to pry things open, or punch a hole.”

And right now, it appears to be punching a hole in the prevailing bearish sentiment.

The 200-day moving average essentially identifies whether the price trend is rising, stalling or falling. It’s generally considered bullish if the price is above the average, and bearish if it’s below.


“For the S&P 500 SPX, +0.78%  this can be used as a barometer of the entire market. And it is widely used,” Harmon explained. “Even fundamental investors know that if the S&P 500 is over the 200-day SMA, they have a tailwind.”

Taking it a step further, as Harmon did with this chart, reveals even more about the current state of the market, if action in recent years is any indication.


The choppy red and black line represents the percentage of stocks in the S&P that are over their 200-day moving average. The green background is the S&P. Among the various trends that can be gleaned from the chart, one is particularly notable, he said.

Look what happens when the percentage of stocks above their 200-day moving average drops below 25%. We’ve seen it only four times in the past 12 years, Harmon said, and every time marked a major bottom for stocks.

Where did it stand on Tuesday morning? Right at 25%.

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Re: S&P 500 Index Movements
« Reply #35 on: January 13, 2016, 07:14:29 AM »



Strategist bets stock market poised for a V-shaped rebound

By Sue Chang
Published: Jan 12, 2016 3:55 p.m. ET

     20 
This is a ‘growth scare,’ not a recession

Fundstrat says things have been so awful that much of the bad news has been baked in to stock prices.
The bears are rampaging through the stock market as pessimism spreads. But at least one strategist is taking the carnage in stride and going as far as to predict a fairly robust recovery in the market.

“We believe downside pressure has been magnified by a ‘buyers strike’ as investors wait for a decisive data point in either direction,” said Tom Lee, managing partner and head of research at Fundstrat Global Advisors, in a Tuesday note.

“While investors wait, we believe the case is increasingly tilting towards ‘growth scare’—and as a consequence, with each passing day, we see the probability of a V-shaped recovery rising,” he said, adding that things have been so dismal that most of the bad news has been “baked in.”


Among the key reasons for the strategist’s optimistic call is his belief that the U.S. dollar’s strength, which he blames for hurting 2015 earnings by as much as $93 billion, will ease given the currency’s horizontal moves since the third quarter.


“Barring a sudden surge in the dollar in the next three months, the headwinds from the dollar should start fading,” he said.

Lee also noted that the long-term yield curve has steepened to 79 basis points from 70 basis points since the December interest-rate hike.

“The long-term yield curve has a great long-term track record predicting recessions—thus, a steepening curve argues the market turmoil is growth jitters, rather than presaging a recession,” he said.

Fundstrat
Furthermore, the U.S. market generally sets the tone for global markets, rather than the other way around. As a result, even though 52% of global markets are in bear market territory, the U.S. is not expected to follow suit.

Not only are U.S. stocks safe from foreign bear markets, the number of stocks trading above their 200-day moving average has fallen below 17% which is a traditional pivot point for a strong bounce back, he said. Since 1990, when the rate is below that level, equities are higher 87% of the time but jumps to 100% in the absence of a recession. Also see: Half of the S&P 500 is in a bear market.

“We think the best strategy in 2016 is to focus on value over growth—FANG—and stocks are the ‘new’ bonds [as] value is inversely correlated to the U.S. dollar and oil,” Lee said. FANG is an acronym for Facebook Inc. FB, -0.22% Amazon.com Inc. AMZN, +0.02% Netflix Inc. NFLX, +1.40% and Alphabet Inc. GOOG, +1.40% the parent of Google. The four stocks were top performers in 2015.

Still, he noted there is a slim chance that further market turmoil could trigger a credit tightening which in turn could result in a recession.

Lee’s confidence in the market contrasts with the generally funereal forecasts from various analysts in the wake of the dismal first trading week of the year.

In a recent report, Andrew Roberts, head of European economics at RBC, referenced the 2008 financial crisis in telling investors to head for the exit.

“We have been warning in past weeklies that this all looks similar to 2008. We dust off our old mantra: this is about ‘return of capital, not return on capital’,” he said. “Watch out. Sell (mostly) everything.”

J.P. Morgan, where Lee served as its chief equity strategist until 2014, on Monday also reversed its buy-on-dip recommendation to sell on any market rally, a first in seven years.

But as ominous as that sounds, Jeffrey Saut, chief investment strategist at Raymond James, notes that these “sell on bounce” comments may be a signal that the bottom is near.

“While they may be right if we are into a ‘selling stampede,’ on a short-term basis these are the kind of statements one typically sees at trading lows, which is where I think we are,” he said.

The S&P 500 SPX, +0.78%  and the Dow Jones Industrial Average DJIA, +0.72%  were on track for modest gains Tuesday

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Re: S&P 500 Index Movements
« Reply #36 on: January 13, 2016, 07:15:45 AM »



Here’s why timing may not be right to buy the dip

By Anora Mahmudova
Published: Jan 12, 2016 11:56 a.m. ET

     24 
Declining earnings, tighter Fed policy, global growth fears
Shutterstock, gregdx
The S&P 500 is down nearly 10% from its peak last May and the Russell 2000 index of small capitalization stocks is down about 19% from its peak last June, yet it might be premature to call this a buying opportunity, according to some analysts.

The American Association of Individual Investors, which conducts weekly surveys, said that bearish sentiment—when investors think market will fall over the next 6-12 months—rose to 38% last week and stayed above historical average of 30% in three of the past four weeks.

From declining earnings to high valuations to multiyear record low oil prices, these analysts still see plenty of reasons for investors to remain pessimistic.


Earnings and the economy

Earning growth is expected to be negative for the fourth quarter, while major banks have downgraded 2016 full-year earnings estimates to show virtually no growth from last year’s levels.

New Year’s hangover for Wall Street: Earnings season misery

The U.S. economy continues to grow at two different speeds: The services sector remains strong, with decent job gains to back it. Meanwhile, the manufacturing sector has been in contraction for the past year. While it is true that a growing economy is good for stocks, most of the profits on the S&P 500 come from the manufacturing sector.

One chart shows how U.S. businesses are falling flat

“Consumers and the services sector cannot offset declining manufacturing. Meanwhile, contrary to expectations, corporations will scale back buybacks, which have been propping up earnings per share so far,” said James Abate, chief investment officer at Centre Asset Management LLC.

No PE expansion

The S&P 500 SPX, +0.78%  saw double-digit gains from 2012 until 2014, primarily due to multiple (or price-to-earnings ratio) expansion—when investors are willing to pay more for each dollar of earnings. The major reason behind the P/E expansion in 2012-2014 was the pumping of extraordinary liquidity in the form of Federal Reserve bond-buying program.

In 2016, just like in 2015, not only there is no quantitative easing, but the Fed is on the path of normalizing interest rates, getting them off near-zero levels.

“Overall PEs are coming back down and things will get attractive, but it’s only a good opportunity if you have patience, at least a 12-month horizon,” said Karyn Cavanaugh, market strategist at Voya Financial, adding that markets are likely to improve in the second half of this year.

Opinion: Stocks still aren’t even close to being cheap

Oil and Dollar

Oil prices fell 45% in 2014 and another 16% in 2015—on a combination of increasing production and oversupply, waning demand from China and a strengthening dollar. Over the first six trading session of the new year, crude prices fell another 15% to below $32 a barrel. Morgan Stanley joined other banks forecasting oil to fall to $20 a barrel as the dollar is likely to rise due to tighter monetary policy.

Falling oil and stronger dollar will work as a double whammy for already weak corporate earnings. But predicting either of those is really difficult. Energy and materials companies may not have reached bottoms yet. See: One-third of U.S. oil companies could face bankruptcy.

“We are not looking at any energy companies no matter how cheap we think they are,” said Kim Forrest, portfolio manager at Fort Pitt Capital.

China and the rest of emerging markets

While it is true there is historically little correlation between Chinese equities and U.S. stock markets, investors remain jittery.

Sharp falls and trading halts in Shanghai last week and confusion over China’s policy intentions as it allowed the yuan to weaken did send shock waves through global financial markets. The events showed that nervousness over China and other emerging markets can serve as catalysts when nervous investors are looking for an excuse to sell.

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Re: S&P 500 Index Movements
« Reply #37 on: January 13, 2016, 07:16:51 AM »



Opinion: Stocks still aren’t even close to being cheap

By Mark Hulbert
Published: Jan 12, 2016 5:08 a.m. ET

     104 
Recent weakness has simply worked off an extreme overvaluation
Hulbert Financial Digest
Even with the recent plunge, the stock market has a long way to fall before stocks are even fairly valued, much less undervalued.

That is the depressing, but nevertheless undeniable, conclusion to emerge from a review of where six well-known valuation indicators currently stand. Each shows that recent weakness has done little more than work off some of the extreme overvaluation that previously existed.

To be sure, valuation indicators’ track records do a far better job forecasting the market’s direction over the intermediate and longer terms than they do as short-term market-timing tools. So the market is entirely capable of rising this year in the face of the current overvaluation.


Time
Dow Jones Industrial Average
Mar 15
May 15
Jul 15
Sep 15
Nov 15
Jan 16
US:DJIA16,00017,00018,00015,00019,000
But you may recall that it was precisely one year ago that I last reported on the stock market’s valuation, and since then the Dow Jones Industrial Average DJIA, +0.72%   has fallen 7%.

Consider the same six valuation indicators that I focused on in my year-ago column. As I did then, the list below contrasts their current readings to where they stood at all of the bull-market tops since 1900 (using the bull-and-bear-market calendar employed by Ned Davis Research).

As you will see in the listing below, the indicator that judges the stock market to be least overvalued is still showing that equities are more overvalued than at 71% of past bull-market peaks.

The other five of the six indicators show today’s market to be more overvalued than at between 82% and 89% of those peaks:

The price/book ratio, which stands at an estimated 2.6 to 1. The book value dataset I was able to obtain extends only back to the 1920s rather than to the beginning of the century, but at 23 of the 28 major market tops since then, the price/book ratio was lower than it is today.
The price/sales ratio, which stands at an estimated 1.1 to 1. I was able to put my hands on per-share sales data back to the mid-1950s; at 16 of the 18 market tops since, the price/sales ratio was lower than where it stands now.
The dividend yield, which currently is 2.2% for the S&P 500. At 30 of the 35 bull-market peaks since 1900, the dividend yield was higher.
The cyclically adjusted price/earnings ratio, which currently stands at 25.9. This is the ratio championed by Yale University’s Robert Shiller. It was lower than where it is today at 30 of the 35 bull-market highs since 1900.
The so-called Q ratio. Based on research conducted by the late James Tobin, the 1981 Nobel laureate in economics, the Q ratio is calculated by dividing market value by the replacement cost of assets. According to data compiled by Stephen Wright, an economics professor at the University of London, and Andrew Smithers, founder of the U.K.-based economics-consulting firm Smithers & Co., the market currently is more overvalued than it was at 31 of the 35 bull-market tops since 1900.
Price-to-earnings ratio. This is the one that is least bearish, and the one that is perhaps most-often quoted in the financial media. Nevertheless, according to data on as-reported earnings compiled by Yale’s Shiller, and based on S&P estimates for the fourth quarter, the P/E ratio currently stands at 20.1 to 1. It is higher than it was at 71% of past bull-market peaks.
How might bulls try to wriggle out from underneath the force of this data?

One way, up until recently, was to argue that the Federal Reserve’s record-low-interest-rate policy justified higher-than-normal valuations. As I've written before, I never thought that was a good argument. Nevertheless, with the Fed’s recent decision to begin raising rates, the bulls can’t fall back on even this questionable rationale.

The bottom line: The stock market has to fall a lot further before the valuation indicators will be blowing in the direction of higher prices.

Click here to inquire about subscriptions to the Hulbert Sentiment Indexes.

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Re: S&P 500 Index Movements
« Reply #38 on: January 13, 2016, 07:18:17 AM »



Nearly half of the S&P 500 is in a bear market

By Wallace Witkowski
Published: Jan 12, 2016 4:11 p.m. ET

     4 
S&P 500 flips in and out of 10% correction territory
Everett Collection
After the S&P 500 flirted with falling into a correction — defined a 10% drop from a recent high — nearly half the stocks on the index have losses that are double that, putting them firmly entrenched in bear-market territory.

At the end of Tuesday trading, 237 of the S&P 500 Index’s SPX, +0.78%  components were down 20% or more from their 52-week highs. Meanwhile, the index as a whole slipped in and out of correction territory. The index touched an intraday low of 1,915.45, with 1,921.24 marking that 10% threshold, but closed up Tuesday at 1,938.68.

The last time the S&P 500 closed with a 10% correction was Sept. 4.


Underscoring the breadth of the market’s recent losses, only one of five S&P 500 stocks isn’t in correction territory.

Here’s a breakdown of how some of the heaviest-weighted stocks have performed:

The megacap bears:
Company/ticker   Market cap (in billions)   % off 52- week high
Apple Inc. AAPL, +1.45%     $546   26%
ExxonMobil Corp. XOM, +2.05%     $307   20%
Wal-Mart Stores Inc. WMT, -0.93%     $206   30%
Chevron Corp. CVX, +1.71%     $152   28%
Oracle Corp. ORCL, +1.23%     $147   22%
Citigroup Inc. C, +0.06%     $140   23%
Gilead Sciences Inc. GILD, +0.62%     $139   21%
International Business Machines Corp. IBM, -0.25%     $129   25%
AbbVie Inc. ABBV, +1.78%     $88   23%
Kraft Heinz Co. KHC, +1.33%     $88   20%
The best-performing megacaps
Company/ticker   Market cap (in billions)   % off 52- week high
Alphabet Inc. GOOG, +1.40%     $498   7%
Microsoft Corp. MSFT, +0.92%     $418   7%
General Electric Co. GE, +0.21%     $289   9%
Johnson Johnson Inc. JNJ, +0.69%     $270   8%
AT&T Inc. T, -0.15%     209   7%
Coca-Cola Co. KO, +1.30%     $181   4%
Visa Inc. V, +1.14%      $179   8%
Home Depot Inc. HD, +1.36%     $159   6%
PepsiCo PEP, +0.18%     $142   6%
Philip Morris International Inc. PM, -0.09%      $138   1%
Altria Group Inc. MO, -0.13%     $117   4%

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Re: S&P 500 Index Movements
« Reply #39 on: January 14, 2016, 05:38:19 AM »


1890.28

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Re: S&P 500 Index Movements
« Reply #40 on: January 14, 2016, 05:42:17 AM »

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Re: S&P 500 Index Movements
« Reply #41 on: January 14, 2016, 05:44:37 AM »

On the verge of

Death Cross ??


Death Cross confirmed

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Re: S&P 500 Index Movements
« Reply #42 on: January 14, 2016, 07:05:19 AM »



Dow industrials, S&P 500 sink to 3-month low

By Ellie Ismailidou and Victor Reklaitis
Published: Jan 13, 2016 4:49 p.m. ET

     79 
Dow drops 360 points or 2.2%; S&P 500 sheds 48 points or 2.5%
Bloomberg
U.S. stocks rang up sharp losses Wednesday in a tough day of trading marked by investors unloading consumer-discretionary and health-care shares.

A renewed slump in crude-oil prices added to the selling pressure, driving the S&P 500 and the Dow Industrials to their lowest levels since Sept. 29, 2015.

The S&P 500 SPX, -2.50% closed 48.40 points, or 2.5%, lower at 1,890.28. All of the S&P 500’s 10 main sectors ended in negative territory. Consumer-discretionary led losses, down 3.4%, followed by health care, off 2.9% and information technology, down 2.8%.


The Dow Jones Industrial Average DJIA, -2.21% dropped 364.81 points, or 2.2%, to 16,151.41, with 29 of its 30 components in the red. Shares of Goldman Sachs Group Inc. GS, -4.06%  and Home Depot HD, -4.78%  contributed to nearly 90 points to the Dow’s drop.

Exxon Mobil Corp. XOM, +0.60%  was the only component that ended in positive territory, up 0.6%.

Meanwhile, the Nasdaq Composite COMP, -3.41% finished the bruising session down 159.85 points, or 3.4%, at 4,526.06, its lowest point since Aug. 25, 2015. And the Russell 2000 RUT, -3.30%  closed down 3.3% on the day, falling more than 13% over the past 10 sessions—its biggest 10-day drop since October 2011, according to FactSet data.

Earlier, the main indexes appeared to be on track to claw back some of their losses from an ugly first week of the year. But they turned lower as oil pulled back from an early rally following news that supplies of gasoline and distillates jumped last week.

The drubbing in consumer-discretionary stocks — which includes retailers, media services, household durable goods, textiles and apparel firms, among others — reflects the “expectation of a slowdown in the last-standing economic sector in the U.S.,” said Krishna Memani, chief investment officer at OppenheimerFunds.

With manufacturing already in recession, consumption was “the only sector that looked good,” based on growing consumer income and a tighter labor market, Memani said.

Meanwhile, stocks in the transportation sector DJT, -3.68% which are vulnerable to energy prices, seemed to bear the brunt of the decline, tumbling 3.4% to their lowest level in over two years, according to FactSet data.

Broader markets have recently been closely tracking the gyrations in oil prices CLG6, +0.39% said Aaron Jett, vice president of Equity Research at Bel Air Investment Advisors.

Read: Oil at $10 a barrel—maybe even under $0? Analysts play ‘how low can you go’

Read: Gundlach warns investors not ‘to be a hero’ in this wild market

Read: S&P could plunge 75% to 550, says SocGen perma-bear Albert Edwards

Obama's final State of the Union speech in 2 minutes(2:03)
President Obama's last State of the Union address to Congress, summed up in two minutes.


Other markets: Most Asian markets finished higher on Wednesday, but China’s Shanghai Composite SHCOMP, -2.42%  slumped 2.4%, closing below 3,000 for the first time since August. It is now less than 23 points off its summer low, hit on Aug. 26. European stocks SXXP, +0.41% gained, while gold futures GCG6, +0.75% inched higher. A key dollar index DXY, -0.12%  moved up. Treasury yields edged lower

Individual movers: CSX Corp. CSX, -5.70% shares fell 5.7% Wednesday, after the company late Tuesday delivered earnings that beat forecasts but reported weaker-than-anticipated revenue.

Supervalu Inc. SVU, -15.47%  stocks tumbled 15.5% after the company reported before the open profit and sales that matched estimates.

Netflix Inc. NFLX, +0.09%  finished 8.6% lower to lead consumer-discretionary and tech stocks lower. Shares of Amazon.com Inc. AMZN, +0.03% lost 5.8%, joining the tech rout.

Yum Brands Inc. YUM, -0.12%  fell 0.1% after the KFC parent said late Tuesday that same-store sales gained last month in China.

MetLife Inc. MET, +2.19%  shares jumped 2.2%, following news the insurer plans to spin off its U.S. retail business.

Microsoft Corp. MSFT, -2.16%  shares fell 2.2%, releasing earlier gains after the company officially abandoned Windows 8.

Medical technology company Stryker Corp. SYK, +0.65% shares rose 0.7% after the company hiked its profit outlook.

Economic news: The Federal Reserve’s Beige Book, which features anecdotal evidence on economic conditions in the U.S., offered Wednesday afternoon a mixed picture of the economy.

Earlier in the day, Dallas Fed President Robert Kaplan said that he is closely watching the “tough start” to financial markets in 2016, but said it was important not to overreact.

Meanwhile, Boston Fed President Eric Rosengren said the Fed’s forecast of four interest-rate hikes in 2016 has risks, citing weakness overseas and only “limited data” supporting the Fed’s forecast that inflation will rise to its 2% target by 2018.

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Re: S&P 500 Index Movements
« Reply #43 on: January 14, 2016, 07:08:16 AM »



Here’s when you should jump back into stocks this year

By Barbara Kollmeyer
Published: Jan 13, 2016 10:39 a.m. ET

     122 
Critical information ahead of the U.S. market’s open
AFP/Getty Images
Too soon, say some.
The number 666 crops up in plenty of horror movies, but it has also captured the attention of one of the biggest bears out there.

Albert Edwards, SocGen’s perma-growler, thinks the S&P 500 index SPX, -2.50%   could drop below the March 2009 bear-market low of 666. He says we’re likely to drop to around 550, a 75% slide from current levels. Mind you, Edwards is known for his super-dramatic calls.

But the bottom line is that he and his colleague Andrew Lapthorne, head of quantitative equity research, believe that thoughts of bargain-hunting in this stock market are way premature. Read more about what they said here.


That 75% stock-drop call fits nicely in what’s been a week of dramatic forecasts, such as RBS’s “sell (almost) everything” advice that surfaced Tuesday. No one seemed to be heeding the doomsters then, as Wall Street rode a roller coaster to solid gains. And a third-straight winning session could be on the cards today.

In short, the risk-to-reward trade has become just too compelling, said Chris Weston, chief market strategist at IG. He says you need to question whether the “‘sell everything’ call marks the low point in risks assets.”

But, the missing piece in the puzzle is a commodities rally. “Until this ferocious speculative attack abates and the leveraged funds start covering short positions, then one of the key pieces of the bullish puzzle is missing,” he said. And that’s as analysts play the “how low can you go” forecasting game for oil. Do I hear $0 a barrel?

Our call of the day stays on the theme of timing for this market and how eager beavers may want to do a gut check, while our chart of the day offers up what some believe is one workable idea for right now.

Key market gauges
Futures for the Dow YMH6, -1.78% and the S&P ESH6, -2.18%  are well in the green, along with oil prices CLG6, +0.39%  which are back atop $31 a barrel after dipping below $30 in New York yesterday. In Asia ADOW, +1.46% the Nikkei NIK, +2.88%  reversed Tuesday’s selloff and rallied hard. But China stocks SHCOMP, -2.42% gradually deteriorated throughout the day, even as a report on exports beat expectations. The Shanghai Composite closed below 3,000 for the first time since the summer meltdown.

European stocks SXXP, +0.41%  are again trading higher. Gold GCG6, +0.75% is off a little. The dollar DXY, -0.12%  is pulling ahead of the yen.

The call of the day
“The stock market is having a hard time (after the December rate hike). This is not a time to be a hero.” That’s DoubleLine Capital founder Jeffrey Gundlach in reference to buying on dips in this stock market.

“I think we’re going to take out the September low of the S&P 500,” he said in a webcast on Tuesday, according to Reuters. Gundlach, best known for doing his own howling about impending doom for junk bonds, said equity and corporate-credit markets are going to have a rough time in the first half of 2016. Watch for a “buying opportunity” later in the year, and, yes, the Fed needs to dial back its rhetoric on higher interest rates, he says.

Gundlach also expects a deeper rout in junk bonds as the credit market deteriorates, and thinks bullish bets on the dollar are getting awfully crowded. More on his thoughts here.

All this bearish talk is begging to be answered with a bull point of view. Meet Gerard Minack, Sydney-based investment consultant and former head of Morgan Stanley’s developed market strategy. He says the first half of the year is the time to buy stocks. That’s surprising given that Business Insider describes him as a notorious bear.

Minack’s rationale? Oil will find a floor, El Niño weather fallout will boost global output and markets are increasingly going to expect the Fed to back down. Read more here.

The economy
The Beige Book and the latest on the federal budget are both coming at 2 p.m. Eastern. It’s a light data day, much like tomorrow. Friday is when investors will get slammed with retail sales and other data. Check out our economic preview here

The buzz
Could Alphabet GOOGL, +0.00% GOOG, -3.51% formerly known as Google, get bigger than Apple AAPL, +0.04%  this year? Bespoke seems to think so, and points out that Alphabet’s market cap is less than $50 billion shy of Apple’s. A beat by Google and a miss by the iPhone maker in upcoming earnings could seal the deal, they say. More on that here.

GE GE, -1.40%  says it will cut 6,500 jobs in Europe after buying Alstom’s power equipment making unit last year.

Qualcomm QCOM, -0.90%  is up 1.1% in premarket on an analyst upgrade.

If crude prices are going to keep up the rebound pace, then stocks like National Oilwell Varco NOV, -4.44%  are your best bets, says MarketWatch’s Philip Van Doorn, who offers 9 other picks.

The movies seem to have a thing for financial markets this year. First up this year was “The Big Short.” Next up is “Money Monster” starring George Clooney and Julia Roberts, due for release in March. Clooney plays a “Wizard of Wall Street” financial TV commentator who gets taken hostage in his studio by a gunman, a blue-collar guy who lost his life savings investing in the market. Producer Jodie Foster says she wanted to make the movie to show how the system is “rigged for the elite.”

The trailer just hit last night:


The chart
Josh Brown, blogging at The Reformed Broker, says this form of property has been one popular investment spot this year. He cites data from Riskalyze showing flows to REITs jumping substantially in the first few days of 2016, against a big drop for U.S. equities.

Here’s a chart of the biggest REIT exchange-traded fund, the Vanguard REIT VNQ, -1.43% :

MarketWatch
“My thesis is that, given the train wreck in China and the resulting tumult everywhere else, plus the commodity crash’s acceleration and the weakening of U.S. manufacturing data, it’s becoming increasingly clear that rates aren’t going up in the first half of 2016,” he says in explaining the popularity for REITs.

Other pluses: Wall Street has been raising estimates on REITs, rising Treasury yields make them look even more attractive, and demand for office should be just fine as hiring and employment rise. A “really bullish story to tell, in a relative desert for positivity,” says Brown. Read his entire blog here.

Earnings
Not much on the earnings front today, but CSX CSX, -5.70%  may be active after posting a 13% drop in fourth-quarter revenue late Tuesday.

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Re: S&P 500 Index Movements
« Reply #44 on: January 14, 2016, 07:13:13 AM »



S&P will plunge 75% on China deflation: SocGen bear
Matt Clinch   | @mattclinch81
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A falling Chinese yuan will unleash a wave of global deflation that will send the U.S. into its next recession and pull the S&P 500 back down to 550 points, according to a strategist at Societe Generale.

Albert Edwards, the notoriously bearish analyst at the French bank, released a note on Wednesday in response to the recent currency devaluations by the People's Bank of China (PBoC). This depreciation - with reports last week that it's far from over - is a result of an asset price bubble that the U.S. central backed helped to create, according to Edwards.

"(Quantitative easing in the U.S.) may not have done much to boost U.S. growth, but it certainly inflated global asset prices into the stratosphere," he said in the note Wednesday.

"If I am right, the S&P would fall to 550 (points), a 75 percent decline from the recent 2,100 peak. That obviously will be a catastrophe for the economy via the wealth effect and all the Fed's QE hard work will turn (to) dust."


Spencer Platt | Getty Images
The U.S. dollar has already gained over 1 percent so far this year against its Chinese counterpart with Beijing officials manipulating the yuan by using foreign exchange reserves. Talk of "currency wars" have been put firmly back on the agenda with a weaker exchange rate just one way that a country can boost exports and thus growth. But, cheaper exports from China are seen as likely to spread deflation globally as consumers from developed economies buy cheap imports rather than domestically produced goods.

Some economists highlight that Chinese imports aren't on the scale they once were and that the U.S. economy could withstand any pressure from overseas. However, Edwards sees a full blown trade war in the offing "not unlike that in the 1930s."


"If I am right and we have just seen a cyclical bull market within a secular bear market, then the next recession will spell real trouble for investors ill-prepared for equity valuations to fall to new lows," he added, using the cyclically adjusted price-to-earnings ratio, known as Shiller P/E, for his gloomy prediction on the S&P 500. He gave no timeframe for his latest call.

"The Fed will fight the next bear market with every weapon available including deeply negative Fed Funds rates in addition to more QE. Indeed, negative policy rates will become ubiquitous," he said.

Janet Yellen
Yellen will 'go down in infamy': SocGen bear
Edwards believes his "Ice Age" thesis—economic cycles that deteriorate in ever decreasing circles—is drawing ever closer to its final stages. While his bearish thoughts and predictions are widely read by colleagues and rivals at fellow banking organizations, they do not always come true.

In September 2012, he announced the U.S. was in recession and Wall Street would soon react, and warned of an "ultimate" death cross for the S&P 500—where the 50-day moving average falls below the 200-day trend line. Instead the S&P 500 continued to rally, and has gained around 35 percent since Edwards' pronouncement.

Traders work on the floor of the New York Stock Exchange.
'Sell everything' or brace for a 'February rally'?
However, a slew of economists have voiced concerns about hefty valuations in U.S. equity markets, especially after several bouts of major volatility at the beginning of the year. RBS' analyst Andrew Roberts warned last week that "danger is lurking" for every investor and spoke of a compulsion to "sell mostly everything."

But where there's fear, there could also be a buying opportunity. Capital Economics on Wednesday said it had no fears of an "impending collapse" for U.S. equities and said in a research note that its year-end forecast for the S&P 500 was 2,200 points, from its current level of around 1,940 points.

Bob Parker, a senior advisor for investment strategy and research at Credit Suisse, told CNBC Tuesday that investors should actually be poised for a rally in February, suggesting equities will find a bottom later this month.

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Re: S&P 500 Index Movements
« Reply #45 on: January 15, 2016, 05:35:51 AM »



1921.84

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Re: S&P 500 Index Movements
« Reply #46 on: January 15, 2016, 05:39:45 AM »

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Re: S&P 500 Index Movements
« Reply #47 on: January 15, 2016, 07:02:13 AM »



The S&P 500 could go to 1,600: Merrill strategist
Tom DiChristopher   | @tdichristopher
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The S&P 500 sank below the key level of 1,900, and traders now have their eyes on the 1,867 support level.

But we could very well be heading for 1,600, said Stephen Suttmeier, chief equity technical strategist at Bank of America Merrill Lynch Global Research.

"What happens if we start to lose 1,867? You can basically say if we do that we may actually have a top in place that's formed over last year," he told CNBC's "Squawk Box."

"If that happens, what does that count to? It counts to about 1,600. That's what it counts to on the charts," he said. "If you take the chart pattern there and project it down, that's the risk."

He noted that some market signals are indeed flashing signs of a top, and overhang is apparent in indicators of breadth, volume, trend, and high yield.
Traders work on the floor of the New York Stock Exchange.
Ouch! Here's where stocks could go next
Should that happen, stocks would retest the 1,575 level, where the S&P broke out in April 2013.

Given the S&P's 2.5 percent drop on Wednesday, indicators of panic should have been higher, Suttmeier said, adding that he wasn't getting calls from clients to sell. Those panic indicators are what create tradable bounces, he noted.
While the secular stock trend is still bullish, Suttmeier said he sees suggestions a cyclical bear market has set in.

"Cyclically we are at risk if we break 1,867. We could go lot lower. Secularly, I think we've got to stay bullish. We've got a lot of support around 1,600 on the S&P," he said

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Re: S&P 500 Index Movements
« Reply #48 on: January 15, 2016, 07:04:09 AM »


2016 rout NOT end of stock bull market: Tom Lee
Matthew J. Belvedere   | @Matt_Belvedere
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Stocks may be off to their worst-ever start to a new year, but the correction does not show signs of the end of the six-year-plus bull market, said Tom Lee, co-founder of boutique equity research firm Fundstrat Global Advisors.

"You have to respect what the market's message is: ... Uncertain people are stepping back and risk is coming out. And we're deflating," he told CNBC's "Squawk Box" on Thursday. "[But] I would be surprised if this is the end of the bull market here."

Read MoreS&P 500 could go to 1,600: Merrill strategist

With Wednesday's severe slide, the Dow Jones industrial average, the S&P 500 index, and the Nasdaq composite were in correction territory. The Dow and S&P were on pace for their biggest monthly drops since May 2010, while the Nasdaq could suffer its worst monthly slide since November 2008.

But Lee, a longtime stock bull, remains undeterred. "This is maybe more like a 1982 moment, which means it's more the front end of a longer bull market, not the end of an existing bull market."

The S&P 500 sank below the key level of 1,900 level on Wednesday, with traders looking for support at 1,867, said Stephen Suttmeier, chief equity technical strategist at Bank of America Merrill Lynch Global Research.

If the S&P breaches 1,867 then the index could be headed to the 1,600 level, he told "Squawk Box" in an earlier interview Thursday.

Traders work on the floor of the New York Stock Exchange.
The S&P 500 could go to 1,600: Merrill strategist
But Lee said he'd be a buyer at S&P 1,867. "I would think it's a great time to be long equities."

Despite what's expected to be a rather gloomy earnings season, Lee actually sees stocks doing better. "I think you can kind of be bullish about how markets will behave because ... we can at least calibrate where fears are versus expectations."

"I think the dollar headwinds are fading. And I think buybacks resume after we get the earnings," he added.

Lee also called stocks the new bonds. "There are a lot of companies where their dividend yields are way above their own bond yields." He gave as examples Cisco Systems, Caterpillar, and Wal-Mart.

In another "Squawk Box" appearance, BMO Private Bank CIO Jack Ablin said he hopes stocks are just in a correction. "I still think we're part of an uptrend."

But late last year, there were signs of stocks beginning to crack, he said. "There were some indications that this bull market was weakening and the underpinning just weren't there."

"The last time the market was fairly priced was probably the first quarter of 2014. Investors definitively feasted on easy-money policies and this notion that central banks had our backs," Ablin said. The S&P closed at 1,872 on the last day of March 2014.

"I would say we probably need to a 'comeupins' of the nifty 50, if you will, from last year. And then maybe reset to fair value, and we can have a decent base to go higher," he said.

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Re: S&P 500 Index Movements
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Re: S&P 500 Index Movements
« Reply #49 on: January 16, 2016, 04:40:00 AM »