Author Topic: S&P 500 Index Movements  (Read 46823 times)

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Re: S&P 500 Index Movements
« Reply #100 on: January 24, 2016, 08:58:06 AM »


Buckle up! This economic doomsayer sees plenty more volatility
Bryan Borzykowski, special to CNBC.com
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The stock market may be taking a breather from its big fall — the S&P 500 was up about 1.5 percent on Jan. 22 — but one economist thinks that we're going to see plenty more volatility in the next few months and another big correction in about two years.

Alan Beaulieu, economist and co-principal of ITR Economics, a New Hampshire-based economics consultancy firm, thinks that macroeconomic fears will make investors jittery for some time, at least until China's government intervenes with a stimulus program.

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Looking further into the future, we'll see another decline, of at least 10 percent, in late 2018, when U.S. interest rates reach 3.5 percent, he said. That will make it more difficult for the consumer to continue propping up the economy with spending.

Beaulieu, who runs the firm with his twin brother Brian, also an economist, has a history of getting calls right. He predicted the current drop back in 2009. He also called the recession, and according to him, their predictions have come true 95 percent of the time over the last 60 years.

The Beaulieus use a proprietary mathematical equation called cycle theory, but a big part of their work focuses on the rate of change in leading indicators — or how fast indicators change from one month or one year to the next.

Most of its predictions are short term — a year out — but it does make much longer calls, too. Its firm has given advice to major companies, such as Honda, Caterpillar, J.P. Morgan, Wells Fargo and more.

"We thought there were would be a correction for two reasons," said Beaulieu. America's unprecedented quantitative-easing program would buoy the market, and it would take time before China's rapid growth came to a halt.

He believed that quantitative easing would end up driving inflation much higher, which would then sink the markets, but that part hasn't yet happened. "Money never really flowed through to the mainstream," he said in an interview this week. "Corporate holdings of cash have ballooned dramatically."

His thoughts on China, though, have come true. In 2009 he and his brother predicted that wage inflation would occur, costs to clean up the environment would increase, rising incomes would hurt its ability to manufacture goods cheaply, there would be blowback around intellectual property theft, and all of this would cause China's growth to slow down. In turn, they'd use less commodities, and that would impact oil and metal prices and everything in between.

Beaulieu also said that the shift from an export-led economy to a more domestic-led one — something China has been working on for years — has failed. "That grand decision has not worked out," he said. "The middle-class growth hasn't been able to sustain the economy." It's this slowdown that's been a major factor in the recent correction, he explained.

Half a year of volatility

While he doesn't think we'll experience a more than 20 percent market drop like we did in 2008 — America is in a much better position than it was back then, he said — we will likely see some more large swings and increased volatility until at least the middle of the year. Why only until the middle of the year? Because market ups and downs are usually related to people's fears, and those worries won't dissipate for a few months.

Investors are nervous about where the global economy is headed, and the cycle of mass sell-offs discount buying and then selling again will continue until people start feeling more comfortable, he said. It will take two things for people to feel calmer. They need to see America's economy growing — and it is, Beaulieu said — and an intervention in China.

"The U.S. is leading the way, economically speaking," he said. "The American consumer is doing yeoman's work. It's marvelous. We have low debt, low delinquencies, good savings in terms of dollars, and spending is at high levels. There's job creation, and the economy is strong."

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China will recover in 2016 and will see its GDP grow by 6.5 percent, he said. In the next quarter, the government will announce that it will spend billions on infrastructure, much like it did during the crisis. Programs likely won't get implemented until mid-year, which is when people will start to calm down.

"That will be enough to put the world into a better place in the second half of 2016," Beaulieu said.

More pain in 2018

Things will remain calm for about two years, except for another decline of at least 10 percent in the latter half of 2018 or early 2019, he said, thanks to rising U.S. interest rates.

The Federal Open Market Committee has said that it expects rates to rise to around 3.5 percent in 2018, which would put 30-year fixed mortgage rates at about 6.5 percent to 7 percent, while credit card variable rates would rise by about 3 percentage points, he said. While this is historically normal, it would be high for the majority of people who haven't ever had to deal with rates at that level.

Until then, job growth and consumer activity will do well, he said, but once consumers can't fuel the economy anymore, we'll start seeing layoffs, corporate profits declines and modest inflation. Then the stock market will suffer.

"[Rates] can be expected to have a negative impact on discretionary income and thus have a negative impact on home purchases and consumer spending," Beaulieu said.

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With all of this in mind, he thinks investors should pick the spots that will benefit from spending. Beaulieu suggests owning stocks that will benefit from good consumer activity and mild inflationary pressures, such as companies in the consumer staples, discretionary and real estate sectors. Commodities, like oil and gas, also tend to be more profitable in inflationary environments, he said.

By the end of 2018, though, and definitely into 2019, investors should get much more conservative in their portfolio. Own one of the more defensive stocks, such as utilities or staples, or companies that pay a dividend above or in line with the rate of inflation, he said. Bonds, unless they're held to maturity, are a risk as their prices fall when rates rise, he added.

Knowing that his predictions tend to come true, Beaulieu made sure that his own portfolio was set up to withstand any market shocks.

He won't say how much money he moved out of equities, but he did put stops on some of his stocks last year so if they fell too far, they'd sell automatically. Beaulieu also bought real estate in order to own some uncorrelated assets.

"We wanted to reduce the downside pressure on the stock market," he said. "So we put on the breaks."

— By Bryan Borzykowski, special to CNBC.com

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Re: S&P 500 Index Movements
« Reply #100 on: January 24, 2016, 08:58:06 AM »

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Re: S&P 500 Index Movements
« Reply #101 on: January 24, 2016, 08:59:33 AM »



Relief rally is here. Enjoy it while it lasts: Technician
Amanda Diaz   | @CNBCDiaz
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For the first time this year, the bulls are showing their horns.

The S&P 500 Index and the Dow Jones Industrial Average closed their first positive week in the last three, renewing confidence in the otherwise gloomy market environment. According to one technician, a bottom could be in place for the very near-term—at least for the time being.

"The first thing we see [on the charts] are the textbook signs of short-term trend exhaustion," Rich Ross, head of technical analysis for Evercore ISI, told CNBC's "Trading Nation" this week. The S&P 500 saw its best trading session in more than a month on Friday.

Looking at a chart of the S&P 500 exchange-traded fund (ETF), the SPY, Ross pointed what he calls a three-day pattern of "exhaustion, stabilization and follow through" that formed on the chart in recent days. He pointed to the low seen mid-week as the exhaustion phase, the rally on Thursday as the market trying to find footing, and the continued strength during Friday's session as a confirmation in trend.

"I think that sets the stage for some short-term relief that could take us higher," he said.

Read More Strategist: Market downturn is a 'buying opportunity'

For Ross, the S&P 500 rally another 5 percent over in the next several sessions, with the SPY going as high as $200 before resuming its downtrend. On Friday, the fund traded around $190.

Outlook still negative

Ross, who correctly called for a break below 1,900 in the S&P 500 a few weeks ago, ultimately believes that the market will retest its Wednesday low of roughly 1,812, which translates into $181 on the SPY.Looking at a longer-term picture, Ross noted that there could still be significant downside ahead.

"It looks to me like we're forming the neckline of a big head and shoulders top," said the analyst. "A break below that neckline gives us a confirmed breakdown that sets us up for a deeper pullback," he said.

For now, added Ross, enjoy the bounce while it lasts

Online king

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Re: S&P 500 Index Movements
« Reply #102 on: January 24, 2016, 09:04:08 AM »


1周10大驚奇:股樓見底未? 想知就要睇異象
01月22日(五) 19:34   

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【on.cc東網專訊】《1周10大驚奇》早於去年4月觀察到金融異象,直指港股恐要跌到今年4月,屆時或低見16,000點水平、去年5月首發股災警報後一直高呼小心、去年12月明言環球股市或在2015年上演「終極一彈」,2016年跌到你唔信、本月開首預言「美國總統魔咒」降臨;去年7月亦提醒港樓危殆,恐狠瀉5成。若仍譏諷《1周10大驚奇》只是事後孔明、斷章取義,只能說 閣下少留意《東網》的詳盡財經新聞。現時人人估底,金融異象又是否預示同一去向呢?

1、金融異象:要估底 必須留意油金走勢!
進入2016年,全球金融市場劇烈震盪,究竟見底未?美國金融博客Zerohedge本周發表了一張圖,預示現時不但不是撈底時機,反而是一個前所未有的「危機訊號」,這就是:黃金/油價比例創歷史新高,已飆升至37水平!(本文附圖)

對投資者而言,這是極壞消息,因歷史上每次黃金與油價比例飆升,就是金融危機發生之時。更驚的是,現時比例創新高,意味今次災難史無前例!

因此,要知幾時見底,必要留意金價及油價,只要金價跌、油價升;或其他情況令黃金/油價比例收窄,才是見底迹象。若以此推算,現時不要估底,股樓均未喘定!
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2、金融異象:要估底 必須留意油VIX走勢!
《1周10大驚奇》為何總要有10項?其中一個原因就是凡事不要片面地看!除了上述異象要留意,可配合以下異象,以增加猜中底部的機會。

這異象就是油價及俗稱「恐慌指數」的VIX指數兩者相交!現時油價處於每桶30美元左右;VIX指數亦處於30左右。兩者相交基本上是十分困難,尤其是若油價處於每桶40或50美元之上,因VIX指數很少高於40。故此,只有油價處於低水平,才能出現此情況,而剛巧此情況又預示股市見底。(本文附圖)

回顧上次出現油價與VIX指數相交是2015年8月24日,當日美股暴挫,道指曾瀉千點,但當此訊號出現後,美股已見全年最低位;再對上一次出現此訊號是2009年3月11日,當年3月9日是美股最低迷的時刻,之後美股展開長達7年升市。

這訊號本周又出現了!不過,若仔細地看,油價一日未能重返40美元,也不要太興奮。
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3、油價怎麼了? 有國家賣油低於20美元
以上兩大異象均涉及油價,可想而知為何它成為今次金融危機的風眼。油價本周雖然已跌穿每桶30美元,再創逾12年以來新低,為何低處未算低?據報道,原來產油國為了搶佔市場份額,加上應付伊朗解禁,已把原油出售價格大幅下調,其中尤以墨西哥、委內瑞拉、加拿大、伊拉克割價情況最明顯。

據悉,墨西哥原油每桶已低於13美元,去年12月初出口到亞洲的原油一度低至約12.5美元;加拿大每桶原油低於15美元,僅約14.3美元,但產油商成本需43美元;委內瑞拉及伊拉克亦把油價分別降至約每桶16.9及16.7美元。

大國不肯認輸互相博弈,油價有機會大幅回升嗎?
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4、經濟怎麼了? 「殭屍船」話你知弊!
除油價低迷,市場上仍有另一經濟寒冬訊號未停過!素有大宗商品市場及全球航運指標之稱的「波羅的海指數」持續低迷,截至本周四再跌0.8%,報355點,已連跌14日,再創歷史新低。該指數於1985年首度發布,即現水平最少是31年以來最弱,表明大宗商品及世界經濟面臨更艱難處境,相比2008年5月20日創11,793點的歷史紀錄,已由高位累瀉97%。

更驚的是,航運業連續多年快速擴張後遇上中國經濟放緩,正面臨業內人士有記憶以來最糟糕危機,愈來愈多「殭屍船」只要能賺到利息錢就願意起航,反映危機極為嚴重。

波羅的海交易所行政總裁Jeremy Penn說:「我們經歷過90年、80年代和70年代的考驗,但現時竟然是有記憶以來最糟糕。」反映現時航運危機最少是1970年代以來最嚴重,不要忘記,它是全球經濟的領先指標。

倫敦上市的船舶經紀公司Braemar Seascope行政總裁James Kidwell表示,很簡單,如果船隻比要運的貨還要多,運費自然就低迷了,於是「殭屍船」應運而生。

所謂「殭屍船」,就是那些只為賺取償還利息的錢而開工的船隻,它們根本不指望償還本金。Kidwell表示,損害航運業的就是「殭屍船」,因它們接受不正常的低價。
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5、去年焦點希臘 今年聚焦巴西!
去年拖累環球跌市的元兇之一是希臘!今年恐怕更凶!因已有大國成為「新希臘」,這就是巴西,該國有高達90%的政府開支不能削減,隨着經濟日益變差,情況已惹起外界關注。

巴西經濟千瘡百孔,由於通脹驚人但經濟負增長,早已陷入「滯脹」,央行已不能隨便放水救市,現時餘下的措施只有加稅及減少開支。

究竟巴西有幾大鑊?若經濟再無起色,2016年巴西經濟將較2014年收縮8%;人均GDP將較2010年高峰期跌1/5,雖然未至於差過希臘,但不遠矣。現時全球3大評級機構,已有兩家把巴西債務評級降至「垃圾級」;上任巴西財長在2015年1月才履新,去年12月已下台,理由是強行減少財赤失敗。

另一個巴西似希臘的地方是:約90%公共開支不能削減,其中受保障的退休金已佔GDP約11.6%,較日本更要高,2014年巴西財赤已高達325億雷亞爾(約139億美元)。該國的結構財赤、經濟表現、通脹達12%,已被外國傳媒稱為「新希臘」,今年恐引爆災難。
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6、末日博士:中國經濟恐僅增4% 債泡危
除了巴西,中國固然是主角。「末日博士」麥嘉華本周再度發表偉論,直言中國經濟增速實際應遠較官方公布數字為慢,料僅增長4%;官方數字則約7%。

麥嘉華說:「以我的見解,中國經濟實情最多僅增長4%左右,甚至更低,主因是很多可靠的指標已預示中國經濟非常疲弱,你可以看看台灣及南韓對中國的出入口數字。」

麥嘉華對中國債務情況十分關注,他說:「中國債務泡沫非常龐大,已到即將爆破的時候,銀行體系或債券投資者恐要面臨巨大損失。股市泡沫已率先爆破。」
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7、死硬派淡友:我有證據美國一定衰
除了新興市場,美國真的能獨善其身?據外國傳媒報道,現時市場再多一個經濟衰退指標預示衰退,而且鮮有失靈。(本文附圖)

基金經理、前身為大學教授的John Hussman,獨創了「投資氣候」理論,是一位「死硬派淡友」,如今他告知天下,有一個訊號接近「保證」美國經濟衰退!

他說得信心滿滿,持的是美國工業生產數據!該數據在上周五公布,結果令人失望,顯示美國工業處於收縮,但未被市場關注。他則直言,這應是「頭條新聞」!

據他創立的「投資氣候」理論顯示,原來自1919年起,只要統計1年的12個月工業生產數字,再經過數學計算,驚現工業生產收縮與美國經濟衰退是有關連的,而且一直沒有失靈,上次這訊號於2007年出現,領先經濟確認衰退的時間;再對上一次是2001年......

John Hussman為「死硬派淡友」,早於2013年唱淡美股而不斷被人恥笑,但去年5月終於估中美股見頂,引來外國傳媒目光。他去年預言美股要狂瀉40至55%,而且不是最壞情況。
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8、索羅斯:歐盟面臨崩潰! 正沽空美股
新興國家及美國均有危機,歐洲又怎樣?「國際大鱷」索羅斯本周警告,歐盟面臨崩潰!主因是受數以百萬計的難民潮所觸發的危機影響,直言有「逼上梁山」之勢。

索羅斯表示,情況非常值得緊張,因難民潮較希臘危機更嚴重,若真的引爆災難,情況恐難以收拾。

中國方面,索羅斯亦恐嚇,中國出現「硬着陸」是真實地不可避免。他驚言,油價和貨幣貶值,以及中國因素,將引發通縮,美國聯儲局加息時間遲了1年,若再度加息將令他感到非常驚訝,相反可能要減息。他透露,現時正在買入美國政府債券,沽空標指,直言不是買入時機。
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9、災難警報:睇實中國外儲「3萬億」底線
索羅斯是「舊鱷王」,「新鱷王」又怎說?全球最大對沖基金Bridgewater創辦人、號稱「鱷王」的達利奧本周重申,現時已沒有一個地方是經濟增長引擎,聯儲局恐重推量化寬鬆(QE)。

達利奧直言,人民幣走勢對全球十分重要,如果顯著貶值,將令美國輸入「通縮」,情況會變得更複雜,全球恐無樂土可言。

「鱷王」提到人民幣,恐怕人仔已成為了「大鱷」目標。據外國傳媒本周進行的調查顯示,直至今年底,中國外匯儲備將跌至3萬億美元或以下。市場人士普遍擔心,外儲縮水對人民銀行保衛匯率能力產生巨大影響。

事實上,去年中國外儲大跌5,130億美元,至3.33萬億美元,為1992年以來首次全年下跌。有經濟學家擔心,外儲「3萬億美元」底線是影響市場情緒的重要關口,若跌破3萬億美元,中國民眾肯定會變得更加警覺,屆時兌換美元的情況或加劇,恐引爆「信心危機」。更驚的是,距離這個關口,可能只有幾個月,甚至只有幾周的時間......
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10、咩話?道指若再瀉5千點 估值仍不便宜
去年《1周10大驚奇》指出,港股恐要跌至16,000點水平,當時無人理會,若以市帳率計,港股本周跌至18年以來最便宜,但奇在無人敢話見底。如果現時預言美國道指會再瀉5,000點,信的人又多不多?

據外國傳媒引述研究報道,倘若道指真的再狠瀉5,000點,原來估值仍未算便宜,這意味儘管短期美股會有反彈,但最終仍會有「終極一跌」。

經過最近的大跌市後,美股估值相對企業收入比例為1.4倍,根據研究公司FactSet數據顯示,自從2001年開始,平均為1.3倍,即代表道指仍有1,000點或7%下跌空間,即跌至14,700點左右亦不代表估值便宜,僅是合理而已。

FactSet數據亦顯示,若再計入企業債務,現時美國企業每股估值相對收入為2.4倍,較2001年以來平均值2.1倍為高,即道指恐怕要跌至10,000點才是合理值。

若道指再瀉5,000點,港股樓會大升?請緊記「淡市莫估底,現金最實際」

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Re: S&P 500 Index Movements
« Reply #103 on: January 24, 2016, 09:07:03 AM »


Cramer: Our situation is worse, despite the rally
Abigail Stevenson   | @A_StevensonCNBC
Friday, 22 Jan 2016 | 6:22 PM ET
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Investing has reached the point where it is at war. The opposing sides are the fundamentals versus the market, and Jim Cramer hasn't seen it this bad in ages.

The averages bounced back nicely on Friday, with the Dow rebounding triple digits. But, despite the rally, Cramer thinks the fundamentals of the market do not indicate that it is any better off than it was before.

Cramer's concerns all boiled down to three topics: the strong dollar, the price of oil and earnings.





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 strong dollar is worrisome to Cramer, because this is the quarterly earnings season where CEOs can no longer get a pass on currency. If earnings are too weak because of the strong dollar, too bad! It can no longer be dismissed as a valid excuse for earnings woes.

"This time the dollar has become a cost, just like labor, or interest payments or raw goods," Cramer said.

Read more from Mad Money with Jim Cramer

Cramer Remix: Snowstorms could make this a winner
Cramer: Oil's insane connection to rallying stocks
Cramer: Oil could go to $10

The second fundamental at odds with the rebounding market was the price of oil. Crude rallied back above $31, but that did not mean anything to Cramer. At the end of the day, the world is still flooded with oil and there is not enough demand to offset the supply.

Finally, the last concern for Cramer was the earnings for individual companies. On average, they have just been OK. Very few companies have benefited from the decline in oil prices, and many industries such as housing and autos have peaked.

So, despite the rally on Friday, when Cramer assessed where the stock market really was — he concluded that the macro situation has actually gotten worse, not better.

"I think we are witnessing an oversold rally that could be sowing the seeds of its own demise as it bulls its way higher to levels that just don't make a lot of sense given the fundamentals," Cramer said.

And while these three fundamental concerns are no reason to dump stocks wholesale, Cramer recommended that they are a reason to trim some positions into strength. He wants investors to be ready for more weakness, especially if the Fed continues to insist on raising rates this year.

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Re: S&P 500 Index Movements
« Reply #104 on: January 24, 2016, 09:58:50 AM »



The End Is Nigh For The Fed's "Bubble Epoch"
Tyler Durden's pictureSubmitted by Tyler Durden on 01/23/2016 15:15 -0500

Bear Market Bureau of Labor Statistics Central Banks Crude Crude Oil Germany Janet Yellen None Reality recovery Unemployment Wall Street Journal


 
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Submitted by Bill Bonner of Bonner & Partners (annotated by Acting-Man's Pater Tenebrarum),

Market Mythology

Twice in the last 15 years, markets have tried to correct the mistakes and excesses of the Bubble Epoch.

 



Business cycle trumps central planning again.

 

Each time, the Fed came back with even more mistakes and excesses. Trillions in new credit... lower lending rates... easier terms... ZIRP... QE... and the Twist!

 

MW-BX052_FOMC_m_MG_20140319160153

The gaggle of price-fixers the job of which is to regularly falsify one of the most important price signals in the economy. The idea that the economy can be “improved” by the interventions of a handful of people who have zero practical economic experience and rely on extremely dubious theories to guide their decisions is downright bizarre. Who can possibly believe that this works? It is a huge farce – one that is very dangerous for prosperity and economic progress.

 

Over the short run, markets respond to myths. Investors are ready to believe almost anything… for a while. But over the long run, there is death and destruction – a reality outside of what we believe.

No matter how badly investors want asset prices to go up, for example, asset prices don’t always comply.

The financial media don’t know what to do. Typically, they downplay a bear market as long as they can… explaining the many reasons why the sell-off is “overdone” and why the “bottom” has already been found.

The Wall Street Journal, for example, tells us that the “market’s panic is incongruent” with economic reality. Yahoo! Finance already sees “signs of capitulation.” It offers advice on “how to trade a bear market,” too.

 

1-DJIA and WTIC

The DJIA and crude oil. Over the past two days they have begun to bounce a little after becoming extremely oversold. Still, the market doesn’t care about anyone’s opinions – it will do whatever it needs to do – click to enlarge.

 

At the Diary, we don’t believe you should try to “trade a bear market.” Bears are treacherous and unpredictable. Our best advice is to stay out of its way. We don’t know whether it will get uglier now… or further down the road. But sooner or later, markets will retest the myths that support today’s asset prices.

They will begin by asking questions: Are stocks too expensive? Can investors repay their debt? Is the economy capable of real growth? Can a small bunch of PhD economists with no market or business experience really manage the entire world’s economy?

As to the first, second, and third questions, we don’t know the answers. But the answer to the fourth is an unhedged, undiluted “no.”

 

Only Human

Greenspan, Bernanke, and Yellen are, after all, only human. They respond to myths as much as anyone… maybe more. They’ve spent their entire careers studying the sacred texts of modern economics. Like Talmudic scholars late in life, they aren’t likely to convert to Baptists!

They say they want inflation at 2%. Not 1%. Not 3%. Two hundred basis points – no more, no less. What theory… what experience… what revelation leads them to think that an economy should have annual price increases of 2%? There is none. It is a modern myth. In reality, prices go up and down on supply and demand. There’s no more reason they should always go up by 2% than down by 2%.

 

2-CPI

The “era of price stability” under the Fed. As you can see, they are real masters at fulfilling their absurd mandate. Their inflation targeting theory is not only completely bereft of theoretical and empirical support, it is in fact plainly contradicted by both theory and the empirical studies that do exist (some of which have been undertaken by the Fed’s own economists!). In short, it is complete hokum – click to enlarge.

 

The PhDs at the helm of the world’s central banks also believe they can change people’s buying, selling, and investing decisions – for the better – by providing them with false data. We have no doubt the Fed can change behavior. It’s the “for the better” part that troubles us.

Interest rates by Fed diktat, for example, send completely phony signals, since they disguise the true cost of credit. The theory goes that low interest rates motivate people to borrow and spend. But where’s the evidence? Isn’t there an economic law somewhere that cutting incomes for savers has the opposite effect?

And there’s more to the story. There’s a reality, as well as a myth. Reality is that resources are limited. Prices tell us what we’ve got to work with. Falsify prices and you get errors of omission and commission. After a while, the system suffers from things it shouldna, oughtna done.

As Hjalmar Schacht, Germany’s minister of economics in the 1930s, put it: “I don’t want a low rate. I don’t want a high rate. I want a true rate.”

An honest interest rate tells the truth about how much savings are available and at what price. People still make mistakes; they still get up to some pretty weird stuff. But at least the ******** aren’t handing out candy on the playground.

 

hjalmar-schacht

“Old School” economy minister and later central banker, Hjalmar Schacht – not interested in manipulate interest rates.

 

Greasy Numbers

Then there’s the “unemployment rate.” The feds look at its figures and tell us the recovery has been a success… because the unemployment rate is back down to about 5%. They are citing as “fact” a statistic so greasy even a witchdoctor would be embarrassed by it.

In December, for example, the Bureau of Labor statistics announced that 292,000 Americans had found jobs. This was widely regarded as a triumph for the Fed. Many times has Janet Yellen said she feels the pain of the jobless. Naturally, she takes great pride in the current job picture as she has painted it.

 

3-payrolls

By the time the final revisions arrive, the numbers won’t be recognizable anymore. The initial release is usually so far removed from reality, one wonders why anyone should be interested in it at all. The main reason why governments gather these statistics is that they give them a reason to meddle with the economy – click to enlarge.

 

But as you have probably heard by now, only 1 out of every 28 of those new hires can buy you a beer to toast their new-found fortune. The others – 281,000 of them – don’t exist. The feds merely made a “seasonal adjustment.” The jobs were mythical, in other words.

Mythical facts. Mythical theories. Mythical recovery. Watch out. The market is a myth buster.

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Re: S&P 500 Index Movements
« Reply #105 on: January 24, 2016, 04:21:03 PM »



"But It's Only A Manufacturing Recession, What's The Big Deal" - Here's The Answer
Tyler Durden's pictureSubmitted by Tyler Durden on 01/23/2016 20:40 -0500

headlines Ludwig von Mises Monetary Policy Recession recovery


 
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Despite the services economy starting to turn down towards manufacturing's inevitable recessionary prints, there remains a hope-strewn crowd of status-quo face-savers desperately clinging to the linear-thinking "but manufacturing is only 12% of economic output and thus is no longer a good bellwether for the overall economy" narrative. Here is why they are wrong not to worry...

 

On the left below, we see the mainstream media's perspective on why a collapse in manufacturing "doesn't matter" and you should buy moar stocks.

On the right below, we see why it does... especially since the "doesn't matter" narrative is used only to justify buying moar stocks...



h/t @Spruce_gum

 

Which explains why this is happening!!



Self-destructing The Fed's very own wealth-creation scheme.

While it is hoped that the economy can continue to expand on the back of the "service" sector alone, history suggests that "manufacturing" continues to play a much more important dynamic that it is given credit for.

The decline in imports, surging inventories, and weak durable goods all suggest the economy is weaker than headlines, or the financial markets, currently suggest. And in fact, services are starting to follow...



 

Of course, as we previously concluded, while recessions are "needed," public opinion is generally quite simple in regard to recession: upswings are generally welcomed, recessions are to be avoided. The “Austrians” are however at odds with this general consensus — we regard recessions as healthy and necessary. Economic downturns only correct the aberrations and excesses of a boom. The benefits of recessions include:

Sclerotic structures in the labor market are broken up and labor costs decline.
Productivity and competitiveness increase.
Misallocations are corrected and unprofitable investments abandoned, written off, or liquidated.
Government mismanagement of the economy is exposed.
Investors and entrepreneurs who were taking too great risks suffer losses and prices adjust to reflect consumer preferences.
Recessions also allow a restructuring of production processes.
At the end of the corrective process, the foundation for a renewed upswing is more stable and healthy. We thus see deflationary corrections as a precondition for growth in prosperity that is sustainable in the long term. Ludwig von Mises understood this when he observed:

The return to monetary stability does not generate a crisis. It only brings to light the malinvestments and other mistakes that were made under the hallucination of the illusory prosperity created by the easy money.
However, in addition to leading to true temporary hardship for the malinvestment-affected areas of the economy, an economic recession in the near future would represent a harsh loss of face for central bankers. Their controversial monetary policy measures were justified as an appropriate means to nurse the economy back to health. That is, their efforts to end or avoid helpful recessions were claimed to contribute to the eagerly awaited self-sustaining recovery

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Re: S&P 500 Index Movements
« Reply #106 on: January 25, 2016, 08:49:43 AM »



Stockman: The markets are in store for a ‘thundering reset’
Amanda Diaz   | @CNBCDiaz
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Wall Street is breathing a sigh of relief after the S&P 500 Index managed to eke out its first weekly gain of the year. Despite the signs of strength, one prominent market watcher says stocks are still in store for a "thundering reset."

"I think we have a dead cat bounce in no-man's-land," David Stockman told CNBC's "Fast Money" last week. According to Stockman, the broad market has been trading in the abyss since breaking above 1,870 in 2014, seeing a meager 1 percent return since then.

"We're been there now for 700 days…we've had something like 35 attempts at rallies and all of them have failed for what I call the "four no's"," he added.

For Stockman, those "four no's" consist of a combination of no escape velocity, no earnings growth, no dry powder from the central banks and no reflation. Taken together, it leads him to believe the U.S. economy is on the cusp of a full-blown recession.

Read MoreMarket complacency reminds me of the year 2000: Acampora
"We're getting to a point where the chickens are coming home to roost. There's no help from the central banks and that's why these rallies are getting weaker and weaker and shorter and shorter," said Stockman, who was the former OMB Director under President Ronald Reagan.

'Nowhere to go but down'


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
NYSE New York Stock Exchange traders markets
Economic doomsayer sees plenty more volatility

Investors took heart last week from the prospect of more easing from the European Central Bank, which broadly lifted markets. By contrast, economists widely believe the Federal Reserve has all but exhausted the weapons in its economic war chest, with its balance sheet having exploded from $850 billion before the 2008 crisis to nearly $4.5 trillion currently.

Stockman believes that the flood of easy money from central banks around the world has formed a credit crisis so severe that it could take years to dig out of the hole that's been created. The market watcher pointed to a stunning $21 trillion collective balance sheet build up around the world, up from $2.1 trillion just 20 years ago.

"This is high powered money that caused an enormous expansion of credit and financial valuation bubble," he said. Stockman noted that the rapid increase of credit has resulted in debt around the world of more than $225 trillion. "We are at peak debt," he added.

At this point, Stockman believes that the Fed's hands are tied after sitting on zero interest rates for nearly a decade. "There's nowhere to go but negative," he said. "It's time to get out of the market completely."

Read More Three incredible facts about the market's horrible run

The S&P 500 has been steadily in correction territory in 2016. The large-cap index closed the week roughly 11 percent from its 52-week high, but Stockman believes it could plunge another 30 percent from where its trading now, which takes it back to levels not seen since 2012.

"It's a dangerous thing to catch a falling knife, the coming correction will come quickly in the next year," Stockman concluded.

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Re: S&P 500 Index Movements
« Reply #107 on: January 25, 2016, 08:54:21 AM »



After the selloff, stocks may actually be cheap
Alex Rosenberg   | @CNBCAlex
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The brutal sell off Wall Street has endured over the last few weeks may have a silver lining.

The S&P 500 Index is currently trading at about 15 times the earnings analysts expect constituent companies to post over the next year, according to FactSet. This reading on this popular measure of valuation, known as "forward P/E," compares to a 15-year average forward P/E ratio of 15.7.

Of course, the conclusion gleaned from a historical comparison depends on the timeframe considered. In this case, it is worth noting that the current valuation level still represents a premium to the average of 14.3 seen over the past five- and ten-year periods.
Meanwhile, and likely because the firm is using different earnings estimates, S&P Capital IQ's current forward valuation number is 15.7, although they also note that is below the 15-year average.

However one does his or her math, there is no escaping the conclusion that by traditional metrics, stocks are cheaper now than they were in the middle of 2014; as record highs were hit in 2015; or even a few weeks ago.

Broadly speaking, what appears to have happened is that even as some investors provide a variety of economic feas or selling stocks ("The recession is nigh!"), analysts haven't substantially reduced their earnings estimates.

That means that the numerator in the "P/E" ratio has fallen, even as the denominator remains relatively static.

Read MoreStockman: The markets are in store for a 'thundering reset'

Meanwhile, the first earnings to trickle in have verged on decent, as 73 percent of S&P 500 companies have beaten their earnings estimates.

Predicting the short-term fluctuations of a multifaceted and sentiment-driven market is probably a fool's errand. But for long-term-focused investors, the question appears to be: Is the economy actually getting worse, and will earnings subsequently drop?

If their answer to that second, more important question is "no," then increasing their allocation to stocks right now could be a decent proposition.

(A note: Some might prefer to consider a trailing earnings ratio instead, despite the fact that few investors pay today's dollars for last years' results, but this shows a similar result: The last-twelve months number currently shows a reading at 16.3 last-twelve-months' earning, compared to a 15-year average of 17.7, according to numbers provided by FactSet senior earnings analyst John Butters.)
—By CNBC's Alex Rosenberg

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Re: S&P 500 Index Movements
« Reply #108 on: January 25, 2016, 06:14:51 PM »



Investors: Keep your itchy finger off the trigger
What followed the 2008 mass exodus from stock funds? A five-year, cumulative 8.6 percent return for the S&P 500.
Eric Rosenbaum   | @erprose
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How about that 550-point intraday dive last week in the Dow! Did that finally get you to sell?

Or was it one of the many headlines about the trillions of dollars that have been wiped out of the stock market in the worst start for the Dow in history — since 1897! And worst start for the S&P 500 since the Great Depression began in 1929.

Oh, c'mon, that was "so last Wednesday." The panic and the paranoia are over now.

Surely, when all the major indices ripped higher on Friday, and stocks registered their first positive week of the year, and that diving-Dow had two straight days with triple-digit gains, you had plowed right back into the stock market and banked all those big gains.

Right?

Money hidden under Modern bed mattress
Zachary Scott | Getty Images
So far in January, investors have yanked near-$7 billion from stock funds, according to Thomson Reuters Lipper data. Investors have also put more than $3 billion into money market funds — the market's under-the-mattress cash equivalent. But the more alarming data comes from last month, when investors pulled $48 billion from stock funds. That is eerily similar to 2008, as the financial crash hardened: Investors took $49 billion out of stock funds in Sept. 2008 and $55 billion out of stock funds in October 2008.

Kudos to investors for the great timing. Except for the fact that from 2008 to 2012, the S&P 500 generated a cumulative return of 8.6 percent.

A trader on the floor of the New York Stock Exchange.
These investments do best in a market downturn
Here's the problem: If an investor missed the 36 percent drop in the S&P 500 in 2008 — or even worse, bailed on the markets mid-carnage — they probably also missed the 26 percent gain in the S&P 500 in 2009, and the next three positive years for the index that followed.

In 2011, investors pulled another $94 billion from stock funds, and in 2012 another $129 billion, when the S&P 500 was up 16 percent. Hundreds of billions of dollars pulled out of stocks during a period of time when a stay-the-course strategy would have netted an 8.6 percent cumulative gain. Not a shoot-the-lights-out strategy, but nothing to sneeze at either in today's low-return — not to mention nil savings rate — environment.
"The global financial crisis created such a high level of risk aversion that people didn't just wait for the start of the rebound. In some cases, they waited for years," said Kristina Hooper, U.S. investment strategist at Allianz Global Investors. "I can't tell you how many investors I came across in 2011, 2012 and even 2013 who had missed out on a lot of the comeback in the stock market and were still sitting in cash."

It's what Lipper's head of Americas Research, Jeff Tjornehoj, calls the dilemma of the do-nothing investor: More often than not, the do-nothing investor does better.
"It's a rocky ride, but the do-nothing investor would have been fine and avoided headaches," Tjornehoj said, referring to those who stayed invested through the crash. He added, "If you know precisely how to move between stocks and bonds and everything else, you would have done better, but how many investors know how to do that?"

Traders work on the floor of the New York Stock Exchange.
How much is your portfolio down? This much?
"The big issue is that when you go to cash, you have to be right twice," said Mitch Goldberg, financial advisor and president of Dix Hills, New York-based ClientFirst Strategy. "First, you have to be right about getting your timing correct when you sell. If you are selling because it is your panic reaction in a down market, I think it's fair to say you probably got that part of the decision wrong. The second part you have to get right is the timing of your buy orders. And if you are waiting for the perfect time to buy, you'll never pull the trigger."

And here's a key that many investors who plan to be smarter than the "herd" miss, especially in markets like the one investors faced last week, with huge swings in the norm day-to-day. A move to cash works against the investor to a greater degree when there is greater volatility.

"Friday's rally in global equity markets is a case in point of how investors who just binged on cash are missing out on a big rebound," Goldberg said. "It's tough to time, and missing out on the best days of the year has a restraining effect on long-term performance," Goldberg said.


Allianz Global Investors provided an example of just how much investors can lose out in just a few days. The Allianz economic research and strategy team looked at the period from 1973 to the end of 2014, comparing four different approaches to investing in the U.S. stock market. Investors who missed the three biggest days of each year see their gains go down dramatically.
In the first approach, $100 is invested on the first day of the year and another $100 dollars added at the start of each year thereafter. The total return over the four decades was $52,251.
In the market-timing approach, if an investor invests the same $100 at the start of each year but misses the top three days of the year, the total return was $2,953.

The best return of all came from investing $100 on the day of the lowest index level of the year — the best day of the year to invest — and adding $100 on the lowest-index-level days of subsequent years. That approach netted a total return of $54,355.

"The problem is that we can never predict when the best days will occur, so we have to stay fully invested all the time to experience them," Hooper said, adding that most days in any given year (both positive and negative) will typically produce a net flat performance.
Those "big day" misses, or gains, compound over the years.

The pleasure and pain of investing

The key problem I see when investors go to cash has a lot to do with procrastination," Goldberg said. "They think about getting back into the market in a conceptual way, but when it comes right down to it, they often don't because they didn't implement a disciplined strategy to get back in. If the stock market bounces and rips higher, they say to themselves, 'I could've gotten in lower, so now I'll wait for another pullback.' Then the market pulls back and they say to themselves, 'I'll wait to see if it goes lower.' And so on."
Tim Maurer, director of personal finance for The BAM Alliance of financial advisory companies, said that the field of behavioral finance has demonstrated how our brains often think (wrongly) when it comes to evaluating the pain of losses versus the pleasure of gains.
Maurer said to consider the decision between staying invested after a market decline or moving to cash as a four-step process:
The pain of staying invested is that I could lose even more.
The pleasure of moving to cash is that my worry is eliminated and I'm guaranteed not to lose any more.
The pain involved in moving to cash is that I'll miss the upside, thereby eliminating my opportunity to recoup recent losses in the next market up move.
The pleasure in staying invested is that I'm giving myself a better chance to achieve my financial goals in the long term — the reason I invested in the market in the first place.
He said the four-step process has one purpose: to bring the vast majority of investors back to the conclusion that they shouldn't get out of the market.
"The market has historically paid investors a premium over cash and bonds precisely because it requires investors to endure times of volatility," Maurer said. "Without volatility, we'd have no reason to expect higher long-term gains."

Investing decisions
A stock bet that's doubled index return since 1991
A few weeks ago — amid one of the many recent bouts of extreme daily selling — a friend asked me whether they should sell their Facebook shares. I asked, "And replace them with what?" She didn't have an answer.

Another friend, in his 40s, texted in a panic to ask if it was the time to get out of stocks. I asked him what stocks, in particular, he meant to sell. He said no stocks, just moving his retirement portfolio as a whole out of equities. I replied with several exclamation points — you can imagine the words that preceded the punctuation yourself.

"At the start of December, I addressed a roomful of high-net-worth financial advisors and asked them, 'How many of you expect the market to fall more than 10 percent in 2016?'" said Allianz' Hooper. "Nearly every hand in the room went up. And yet now that the market has experienced the sell-off, many are not viewing it as a healthy correction but are panicking and fearing the worst."

"The big issue is that when you go to cash, you have to be right twice."
-Mitch Goldberg, president of ClientFirst Strategy
Hooper said the psychology is easy to understand. Sell-offs are by nature disorderly and create a contagion of fear, and investors believe that when stocks go down 10 percent in value, there's something "the market knows" but a Main Street investor doesn't.
"In reality it is just a herd, and herding is a dangerous activity for investors," Hooper said.
There is always a good case to be made for rebalancing from stocks that have run up a lot into stocks that seem undervalued. Maurer said it's good to be "greedy" like Berkshire Hathaway chairman and CEO Warren Buffett through stock rebalancing. But when Lipper fund-flows data shows net negative flows in equity funds, that's not what's going on with the mass of retail investors.

Goldberg is a "big proponent" of raising cash at times, but said the time to do it is when stocks are rising and then wait patiently for new opportunities. "I never feel pressure to be fully invested at all times. But I do not believe in going to cash as an 'all or nothing' trade," he said.

Non-GMO corn is harvested with a John Deere & Co. 9670 STS combine harvester in this aerial photograph taken above Malden, Illinois
A way to match billionaires buying up our farmland
Cash proponents will argue that staying invested is a disaster-in-the-making for retirees. Goldberg said retirees are naturally the most fearful, but it's the cash mentality rather than staying in equities that is the "never-ending wealth destroyer pattern."

"You're now giving up on an asset class that historically has been a hedge against inflation," Goldberg said. "Sure, inflation is nonexistent according to headline statistics. But if you pay for health insurance, which as a senior could easily be sending a big proportion of your income on health care, you know you are ground zero for inflation pain."

In fact, if any retiree has a portfolio constructed with investments that would collectively go to zero in a stock market correction, the only question worth asking is, Who designed your portfolio, and how quickly can you fire them?

There's a reason that famed investors like Vanguard Group's Jack Bogle and Buffett sound like a broken record with the "stay the course" mantra.
It's not just because their millions and billions allow them to do so with comfort — though that helps.

It's because they're right

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Re: S&P 500 Index Movements
« Reply #109 on: January 26, 2016, 04:55:14 AM »



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Re: S&P 500 Index Movements
« Reply #110 on: January 26, 2016, 05:56:26 AM »



1877.08


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Re: S&P 500 Index Movements
« Reply #111 on: January 26, 2016, 07:12:46 AM »



Jim Bianco: "The Markets Are Telling Us There's A Severe Issue Out There"
Tyler Durden's pictureSubmitted by Tyler Durden on 01/25/2016 15:15 -0500

Bear Market China Crude Crude Oil Federal Reserve Greece High Yield Hong Kong Institutional Investors Jim Bianco Market Manipulation Paul Samuelson The Economist Volatility Warren Buffett Yuan


 
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Via Finanz und Wirtschaft's Christoph Gisiger,

James Bianco, president of Bianco Research, expects more turmoil to come and warns that there will be no easy way out of zero interest rate policy.

The sigh of relief could be well heard on Wall Street. After days of heavy selling the stock market has calmed down somewhat at the end of last week. But according to Jim Bianco it’s too early for an all-clear signal. The influential market strategist from Chicago who is highly regarded among institutional investors expects equity prices to drop further. He’s also quite skeptical about the heavy-handed interventions of the authorities in China. With respect to the United States, he believes that there is going to be a massive liquidation in the oil patch.

Mr. Bianco, stocks have taken a big hit. Is the sharp drop in equity prices justified or is it an emotional overreaction?

There is an old line in the market, first coined by the economist Paul Samuelson. It says that the stock market has predicted nine of the last five recessions. There is some truth to that phrase. But I would also point out that predicting nine of the last five recessions is a much better track record than the consensus of economists. We wish they were that accurate, but they’re far worse. Every time the financial markets get volatile and messy like this it deserves attention because the markets are trying to tell us that there is a severe issue out there. It’s been coming from all over the place: We got a collapse in commodity prices and we got financial markets across the globe selling off, including in the United States. So I’m going to pay a lot of attention to it.
What are the markets so worried about?

Two things: First, what they are worried about is a global slowdown. It’s a global slowdown in manufacturing. You see it in commodity prices, you see it in the GDP numbers out of China and you see it in the manufacturing numbers in the United States.
And second?

The heavy-handedness of central planning is going to be a lot harder to get rid of than people think. The big difference between now and any other hard sell-off since the financial crisis is that the Fed is raising rates. In 2011 for instance, the markets sold off a lot harder than they did now. But what did it take to end it? The Federal Reserve gave us Operation Twist which was a precursor to QE3. Now, that the markets are selling off the Fed is raising rates. So it’s doing exactly the opposite. Warren Buffett has a line that you don’t know who’s swimming naked until the tide goes out. We don’t know how dependent markets are on central bank policy until they start to reverse it. And now, as the Fed starts to reverse it, we’re finding it out and it’s a bigger problem than we think.
Meanwhile China is trying to move heaven and earth to calm down the markets. Do you think China’s economy can avert a hard landing?

China is a communist country. They’re communists and when their economy started to misbehave and when their markets started to get upset they went right into their communist thinking. They started throwing speculators in jail and  billionaires turned out missing. But this is not the way you handle a volatile market. The incompetent mismanagement of the Chinese markets and economy by the Chinese government makes it even worse. And by making it worse they make people lose their confidence. So this gross mismanagement results in a loss of confidence in the Chinese government of the wealthy. That’s why you have a giant capital outflow out of China.
How concerning is this flight of capital?

No one disputes the capital outflow. But the innocuous, “so I don’t get thrown in the Gulag”-way of saying it is: “The volatility in the markets are scaring investors out of China.” What’s been happening in China in the last couple of weeks is that as the markets have gotten volatile they have stepped up their market interventions, including last Thursday intervening in the currency market with the largest amount of money they have intervened with in the last three years. They’re trying to hold the currency steady but Chinese stocks were still down 2% on that day. They’re trying to make us all believe that there is nothing to see here. But there is still a lot of stress. You see it in the collapse of the Hong Kong Dollar to its lowest level in twelve years.
Tensions are also high in the energy sector. What’s going to happen if oil hovers around $30?

In the oil industry you have misallocation of capital, in part by seven years of zero interest rates. Especially in the United States the energy sector was grossly overbuilt with horizontal drilling and fracking. A lot of those companies borrowed a lot of money and have put themselves into a bad place. They have no choice but to keep drilling. In July of 2014 the price of crude oil was $107 per barrel and the US was producing 8.4 million barrels per day. Today, with the price at around $30 production is 9.3 million barrels per day. So more oil. If these companies stop drilling, they’re out of business. But if they keep drilling they are going to drive the price so low that they’re going out of business, too. In the oil industry the phrase to describe what’s happening now is called “dead man drilling”. That pretty much sums it up.
How low can oil go?

At the heart of the collapse of the oil price has been a slowdown of demand. That’s why we’re seeing inventories around the world blown up to the highest level ever. So to get a real bottom in oil prices we need to take production out of the market. That’s an euphemistic way of saying that oil companies have to go away. There has to be massive liquidation. For that, the oil price doesn’t have to go any lower. It doesn’t need to go to $20 or $15. If in June the oil price is at $35 it will be still too low for most of these companies and it will do the damage. It needs to get into the high forties for the industry to have a chance to survive. At this point this means it has to go up almost 70%.
The fear of bankruptcies in the oil patch is putting a lot of pressure on high yield bonds. How dangerous could this get for the financial sector?

Part of this misallocation of money in the oil industry was that a lot of these companies bought into the high yield market, partly because the Federal Reserve drove yields down so low. That made it economical enough for a risky project like oil drilling to finance itself.  Today, energy is maybe 7% of the high yield market. But at the high of July 2014 it was around 20%. That’s what happens if you kill the market: It is no longer a big weighting in the market. But the problem is it was a big weighting. And now you’ve got chaos in the high yield sector driven largely by the error investors have made in energy.
So what are the ramifications of that?

Many experts pretend that this is no big deal. But the same experts also said subprime doesn’t matter, Greece doesn’t matter, the Yuan doesn’t matter or volatility in the stock market doesn’t matter. Well, some of those things mattered and some mattered a lot. This is the way all these crises have started. They always start with something you think is small and then they metastasize in ways you cannot begin to understand. This is going to impair everybody in the high yield market from borrowing. Everybody is going to pay a higher cost of capital because of the energy error in high yield. How much does it affect everybody? Well, tell me when it stops. I don’t know how much wider spreads on high yield bonds are going to get. But I think they’re going to continue to get wider. We’re not done yet.
Wider spreads on junk bonds are usually also a sign for trouble in the economy.  How robust is the economy in the United States?

Most economists will tell you that the US economy is okay and everything looks good. That is correct if you take a view backwards. But the market is telling you that from this moment forward things are maybe not as good as we think they are. Forward looking measures are not that good and one of the best forward looking measures are earnings which are terrible right now. So the question is: Is the marketplace telling us that going forward from here we should expect a different type of economy? The low interest rates on treasury bonds, the falling expectations for inflation that the tips market is showing us and the volatility in the stock markets makes me believe that the answer is yes. We should expect something different.
What does that mean for the Federal Reserve?

The Fed wanted to get out of the market manipulation game. They knew that QE didn’t work anymore for the economy. It just served to push up stocks and they didn’t want to be in that game. So a month ago they raised rates and they promised us that they were going to raise rates four times this year according to the dot chart. But nobody else believes that they are going to move four times. So the Fed has a very difficult choice in front of them: Do they cave to market expectations and then be forever branded as being reactionary to the financial markets. Or do they stick to their guns and then be branded as the people that caused undue market stress. There is no win in this situation. I don’t know which way they are going to go on this. But I wouldn’t be surprised if we saw some kind of moderation out of the Fed so that they talk about less rate hikes.
What does all this mean for the outlook on the stock market?

Ironically, one of the better performing markets has been the S&P 500. The index had its low point on the 20th of January when it was down 14% from its peak. Nevertheless, it’s been performing a lot better than most of the other stock markets around the world, Most of them are down more than 20% which is the general definition of a bear market. I suspect that in the first half of this year the S&P 500 will get to  that, too. Maybe we’re ready to have a little bit of a relief rally over the next couple of days or a week. But we have yet to find a situation where the markets sells off for ten days real hard. So at the minimum we will revisit the lows of last Wednesday one more time.

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Re: S&P 500 Index Movements
« Reply #112 on: January 26, 2016, 07:14:36 AM »


Even The Wall Street Journal Is Worried About A Looming Recession
Tyler Durden's pictureSubmitted by Tyler Durden on 01/25/2016 14:40 -0500

Auto Sales BLS Dow Jones Industrial Average Janet Yellen New York Times Recession Unemployment Unemployment Claims Wall Street Journal


 
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Submitted by Jeffrey Snider via Alhambra Investment Partners,

If the Wall Street Journal meant to reach for reassuring comfort, they fell far short. After spending late summer last year and into the fall proclaiming that manufacturing didn’t matter (12%), the newest round of talking points are “false positives.” In other words, manufacturing and industry does matter, after all, but just “not enough” to tip into full recession. That would seem to suggest some kind of balance on the plus side, but what they give us is actually the opposite.

The case for a downside is quite compelling, a point very grudgingly accepted in the article. In the truly forward-looking case, there are industrial production, corporate profits and the stock market (that latter is and has been dubious, but this is the Wall Street Journal).



 

On those three counts there is nothing but growing concern rather than “transitory” irrelevance.

Industrial production has declined in 10 of the past 12 months, and is now off nearly 2% from its peak in December 2014. Corporate profits peaked around the summer of 2014 and were off by nearly 5% as of the third quarter of last year, according to the Commerce Department. Stocks have fallen viciously so far this year, with the Dow Jones Industrial Average down 7.6%, despite a rally late last week.
The economy is in much worse shape than just those, however, as the Journal makes no mention of the supply chain at any level other than production. That matters greatly because industrial production has already declined significantly (enough to suggest recession) without making the slightest difference in inventory. Retail sales just experienced the worst holiday season outside of 2008 and 2009 – and that includes auto sales. Wholesale sales continue to slump and inventory across the economy remains, despite production cuts to this point, elevated in the extreme.

These are truly forward-looking indications, where businesses will have no choice but to scale back now that “confidence” has been shaken enough to even dent the heretofore invulnerable stock market. The Journal dutifully reports the role of confidence in recession, being an organ of orthodox persuasion, after all. When confidence is lost in terms of rational expectations theory, that is saying something to an economist.

Again, however, the point of the article was clearly meant for encouragement. In transitioning to the “bright side”, it points out that false positives have occurred in the past with IP, profits and stocks; indeed they have, but in either 1986 or 1965 there wasn’t this tide of inventory, not even close (nor “dollar”, commodities crashing or very real global economic strain all tied together). But the real foundation of optimism is exactly what you would expect from economists:

On the bright side, the U.S. job market is perhaps the best recession indicator of all, and it isn’t flashing trouble.
 
In the past 50 years, every recession has seen the number of jobs in the economy decline by at least 1%. And jobs have never declined by that much outside of a recession.
 
Today, the number of jobs in the U.S. has been growing briskly—up 292,000 in December and up 2.7 million over the past year. This is why many economists remain confident the U.S. can avoid recession.
That’s it; false positives and the unemployment rate to balance out not just stocks but commodities, funding, and especially credit; not just corporate profits but actually revenue; not just industrial production but sales, trade and inventory. The US job market is not “perhaps the best recession indicator” at all because it is at best a lagging measure. It may not suggest that full-scale recession is in progress right now, but at the very least it tells us nothing about the immediate future. Even on its own terms, the purported level of job gains has failed to live up to itself for years now.

The very basis for this persistent over-optimism has been the BLS figures, both the Establishment Survey and the unemployment rate. Yet, despite robust numbers on either account we are in this mess already. And it was economists and their unemployment rate devotion who told us last year that the “best jobs market in decades” would almost guarantee nothing but the best for the rest of it. It was in many ways the entire basis for the assertions of “transitory.”

In viewing labor market statistics so very charitably, the Journal article points to one of its regular economists:

“I just don’t buy for a second the idea that U.S. households are so terrified by what’s happening that they’re going to behave like Germans and wean themselves off buying stuff,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics, referencing the high-saving and low-consumption German economy.
Mr. Shepherdson has been very faithful to that interpretation of the unemployment rate for some time. Last April, he was quoted in the New York Times again suggesting that labor data in no way indicated any kind of rough economic future:

“The [jobless] claims numbers simply do not support the idea that the first quarter slowdown in growth is indicative of some underlying malaise in the economy,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
And in February 2015, Shepherdson was named the Wall Street Journal’s “most accurate economic forecaster in 2014” largely on the strength of what he said were interpretations of labor statistics. It isn’t surprising, however, that despite being given that honor by the Journal, Shepherdson’s expectations were still quite conventional in this same respect:

Like many economists, Mr. Shepherdson was too optimistic about overall economic growth. The ranking was based on a survey conducted in early January 2014, before it became obvious that a very harsh winter would cause economic activity to contract in the first quarter.
Based on his view of the labor market at that time, he was, like all economists, undeniably enamored by the idea of “transitory” being completely overwhelmed by this fountain of job growth:

What do the numbers say about 2015? Mr. Shepherdson is forecasting the real GDP will grow a blistering 3.7% in 2015 and the unemployment rate will end this year at 5.2%.
 
“When oil was at $100 [a barrel] I thought we would see more growth from capital spending,” he said. “Now with cheap oil, we will see more consumption and less capital spending, hurt by oil companies cutting back.”
After suggesting about a year ago that the labor market would push the economy up into a real growth trajectory because of jobs, after factoring a collapse in oil to that point no less, now that the economy is falling far, far short of that and may actually be in danger of recession he now claims that same labor statistic is enough for the economy to actually avoid it? If the unemployment rate was not nearly enough of a positive factor last year, why would it be this year after significant damage already taken and spreading?

I am in some ways being quite unfair to Mr. Shepherdson in singling him out as his view was shared widely by economists up and down the line, not any different than the views expressed by Janet Yellen and the FOMC. It is the backwards priorities of economics; to view all modeled outlooks as if “more real” than observed condition including market prices. Such Aristotelian process raises more questions than confidence, especially surrounding labor statistics. If the labor market is so robust, why are there no wage gains? To the orthodoxy, it’s not a puzzle but an article of faith; there have to be wage gains, just pushed off to some point in the future. Thus, no matter what happens right now, that future expectation is all that is meaningful in economics; every negative until that future is just “transitory.”

Like Mr. Shepherdson, I looked at unemployment claims last April and came to a far different conclusion.

That would further explain as to why Janet Yellen and the FOMC are so confused about the economy, as they view the Establishment Survey with all its adjustments and stochastic processes as hardened gospel, unchallenged as to whether past assumptions still apply. Despite the dynamic nature of the real world, after all made more so by the“neutral” efforts of the Greenspan/Bernanke/Yellen complex, orthodox economics exists exclusively upon static assumptions, “laws” and “rules.”
 
If there is no longer a solidified link between jobless claims and the actual economic cycle, the FOMC and orthodox economists are relying, almost exclusively, upon a false signal. Again, that would expound on their “ability” to see an economy that no one else does, nor certainly not one of majority experience.
The weight of lackluster wages, increasingly dour spending and the spread of consumer irregularity suggested not a robust jobs market at all, but one increasingly divorced as a statistical regime. If there were actual job growth, then it would be easily observed someplace other than the unemployment rate. Instead, the Establishment Survey seemed to tick only with jobless claims, suggesting not a labor market trend in the real economy but more so a statistical anomaly devoid of historical circumstance with which to draw upon for a baseline (or benchmark).

A broad survey of the economy outside of the BLS jurisdiction suggested something very wrong with the mainline payroll estimates, and that they would become even more divergent than the actual economic conditions signaled by funding markets, then credit markets, then commodities markets and now stock markets. The jobs number became a meaningless and tortured imputation shorn of any relevant context. I think that still the most likely explanation as to how the labor market might seem so tantalizingly robust yet in only that one, very narrow place. It is uncorroborated all across the statistical spectrum of economic accounts; a feature that grows rather than conforms.

Last year was supposed to be “the” year because of faith in only the BLS’ numbers. It was advertised as full deliverance of the promises of QE and ZIRP, but instead 2015 delivered only recessionary impressions. That contrast is itself enough to call into great doubt the reliance on the unemployment rate and Establishment Survey for suggesting real economic circumstances and, more importantly, what is to come. Yet, as noted by this Journal article clearly meant to reassure, that is all that remains on that account. If all the optimists have left to stand upon is the unemployment rate, we are in much worse shape than even I thought.

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Re: S&P 500 Index Movements
« Reply #113 on: January 26, 2016, 07:15:54 AM »



美股反覆下跌 道指收跌208點
01月26日(二) 05:04   

 
【on.cc東網專訊】受累油價下跌,能源股受壓,美國股市低開,抵銷上周部分升幅。道指收報15,885點,跌208點,標普500指數收報1,877點,跌29點,納斯達克指數收報4,518點,跌72點。

材料及能源股顯著下跌,大型建築設備生產商卡特彼勒跌3.07美元,跌幅逾5%,是跌幅最大工業股,埃克森美孚、雪佛龍股價跌逾3%,美國銀行下挫4.4%,是去年9月以來最大單日跌幅。連鎖快餐店麥當勞公布第4季盈利升16%,至每股1.31美元,刺激股價做好,為道指收復部分失地。獲Johnson Controls Inc.收購的Tyco International股價急升12%。

市場人士指出,美股繼續受油價下跌拖累,即使有大型收購合併活動正在進行,對大市的刺激依然有限,反映宏觀因素目前左右大市氣氛,個別市場消息已不能產生作用。

美股繼續向下,可能成為自2009年以來表現最差的1月份,市場關注中國經濟放緩對全球經濟增長的影響,油價回落,令市場的憂慮情緒更甚,標普500指數上周已跌至21個月新低,技術上出現超賣,以今日收市價計,本月以來的跌幅已達8.16%,比去年5月高位更已回落超過1成。

美股業績期展開,投資者關注寶潔、3M、蘋果公司、波音公司及facebook等公司本周公布的業績表現,以此判斷美股未來的投資前景。投資者亦會評估本周公布的經濟數據,包括消費者信心、新屋銷售、耐用品訂單及第4季經濟初值等。市場估計美國上季經濟增長0.8%,而第3季的增幅則為2%。

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Re: S&P 500 Index Movements
« Reply #114 on: January 26, 2016, 07:17:00 AM »



貝萊德:機構客戶部署減少股市投資比重
01月26日(二) 03:39   

【on.cc東網專訊】全球最大資產管理公司貝萊德發表調查報告,顯示投資者正由股票市場轉移至流動性較低的資產市場,例如房地產及私募信貸,藉此提高投資回報,及減少受股市波動的影響。

調查訪問貝萊德170家最大的機構客戶,顯示超過一半的受訪者計劃增加調撥至私募信貸或房地產等類的資產市場。投資者亦部署減少在股市的投資比重,有33%受訪者表示計劃減少在股市的投資。

事實上,今年股市表現確實不濟,美股標普指數今年以來累計下跌6.7%,有可能錄得2009年以來最差的1月表現。股市風險增加,迫使投資者尋求其他回報更佳及更穩健的投資工具。

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Re: S&P 500 Index Movements
« Reply #115 on: January 26, 2016, 07:33:46 AM »



These charts show why investors should be worried
Yahoo Finance By Lawrence Lewitinn
5 hours ago
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The market’s recent bounce back from a brutal selloff may have some investors complacent. But one technician sees more trouble ahead for the markets.

“Indices are trying to carve out a bottom,” said Mark Newton, chief technical strategist at Greywolf Execution Partners. “The lows are near. However, the damage that's been done makes it look like there's a lot more volatility in store in the months ahead and we could have more downside into the fall.”

Newton bases it outlook on several charts, including those of the NYSE Composite (^NYA) Index, the Shanghai Composite (000001.SS) Index, and the Dow Jones Transportation Average (^DJT).


View gallery
.Source: Mark Newton, Greywolf Execution Partners
Source: Mark Newton, Greywolf Execution Partners
Unlike the S&P 500 (^GSPC), which is comprised of the largest publicly-traded U.S. companies, the NYSE Composite Index is made up of all the stocks trading at the New York Stock Exchange. “Why this is interesting is because this is very much a much more broad-based index than just looking at the S&P,” said Newton.
Both indices saw a bull market starting in 2009 and both faced major selloffs in January. But the NYSE Composite has broken below its August 2015 lows and remains there. That concerns Newton, who sees the 9,550 price as a key level. The index closed at 9,426.91 on Friday after a 2% rally.

“It's important that we regain that 9,500 level,” he said. “Failure to really get up back above these highs is going to suggest we likely have a little bit further to go into sometime this fall and get down at least down ... near 2011 highs which lies slightly down right above 8,000.”


View gallery
.Source: Mark Newton, Greywolf Execution Partners
Source: Mark Newton, Greywolf Execution Partners
Newton doesn’t see much of a direct, long-term relationship between U.S. and China’s markets. But the collapse in indices such as the Shanghai Composite beginning last summer led to uncertainty in global markets, including that of the United States.
An important technical support level for the Shanghai Composite is 2,800, according to Newton. That’s about 4% lower than Friday’s close.

“This level has already been tested once,” he said. “If it can hold that, potentially we can try to rally off this. But a break of that level could be far more negative for China.”

Should that happen, Newton predicts U.S. stocks will follow suit.


View gallery
.Source: Mark Newton, Greywolf Execution Partners
Source: Mark Newton, Greywolf Execution Partners
Another index showing concerning signals is the Dow Jones Transportation Average. Dow Theory, one of the oldest ones in technical analysis, holds that transportation and utility stocks should confirm rallies in industrial shares.
As Newton points out, the Dow Transports have underperformed the major market indices for well over a year. Similar to the NYSE Composite Index, the Transports broke a long-term trend line and also broke below its August 2015 lows.

“This caused some real acceleration on the downside,” Newton said. “It is an intermediate term negative with the Dow Jones Transports down now more than 20%. Structurally, having broken a six-year uptrend, it does suggest further weakness between now and the months of September and October which historically is when a lot of these markets tend to bottom out.”


View gallery
.Source: Mark Newton, Greywolf Execution Partners
Source: Mark Newton, Greywolf Execution Partners
Yet he sees a few signs of some near-term stabilization in the Transports, such as “hammer” formations in the index’s candlestick chart in the past week.
“A hammer pattern is when you have an extreme move to the downside but it rallies and recoups all that to close unchanged or slightly positive,” explained Newton.

“That’s really interesting given the fact that markets have become so oversold,” he said. “Pessimism has been on the rise. We've seen extreme bearish sentiment. And now the Dow Jones Transports, along with a lot of other indices, have suggested signs that things are starting to hold.”

For Newton, that means the market could stage an oversold bounce in the weeks ahead but the only way the rally would have legs would be if it the index broke back above its August 2015 lows of 7,458.99. The Transports closed at 6,778.54 on Friday.

“The longer-term view is a little bit more negative based on what happened,” he said. “We have seen some extreme trend damage that should lead to further weakness going forward over the next 6 to 8 months.”

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Re: S&P 500 Index Movements
« Reply #116 on: January 26, 2016, 06:15:38 PM »



工業生產、企業獲利、股市跌‧美國經濟驚現衰退3警訊
2016-01-26 14:57     

 
(美國‧紐約26日訊)自二次世界大戰以來,美國每次經濟衰退都會出現工業生產、企業獲利大幅下滑以及股市重跌的警訊,如今美國再度浮現這三個跡象,但由於此次主要是受到油價衝擊,景氣仍受就業市場強力支撐,意味美國不一定走向衰退。

美國經濟前景堪慮的原因之一,在於全球許多地區深陷成長衰退或低成長的困境。(圖:法新社)
大摩:今年衰退機率20%
摩根士丹利也預測,今年美國陷入衰退的機率為20%。
由美商務部資料顯示,美國過去12個月工業生產,有10個月呈現下滑,並較2014年12月的高峰水準減少將近2%。企業獲利在前年夏季達到高點後,到去年第三季已跌落近5%。美股近日重挫,儘管上週反彈,但今年道瓊指數仍累跌7.6%。
德意志銀行駐紐約首席美國經濟學家拉佛納表示:“經濟就像6缸引擎的汽車,已有愈來愈多汽缸壞掉了。”
美國經濟前景堪慮的原因之一,在於全球許多地區深陷成長衰退或低成長的困境。上週國際貨幣基金(IMF)預期2016年歐元區經濟僅成長1.7%,日本成長1%。該機構提及中國經濟放緩的挑戰,並預料俄羅斯和巴西可能陷入衰退。
渣打銀行資深經濟學家科斯特格表示:“製造業向來領先經濟循環,是景氣波動指標。美國製造業正面臨挑戰。”
不過,美國企業獲利和工業生產下滑,主要歸因於油價重跌,導致能源業者產出和獲利走下坡。
從歷史來看,這3項經濟警訊浮現,也不盡然一定走向衰退。此外,美國就業市場穩健的表現,則反映美國經濟仍受強力支撐。
摩根士丹利預期,去年第四季美國國內生產總值(GDP)幾乎持平,2016年增長1.8%。
由路透調查經濟學家看法,去年第四季GDP成長年率預測中值為0.8%,2016年GDP擴張預測中值為2.5%。
摩根士丹利經濟學家表示,倘若美國GDP在2016年的擴張幅度降至1到1.5%,聯儲局今年可能不會升息。
本週議息料不升息
美國聯邦公開市場委員會(FOMC)週二(26日)稍晚開始為期兩天的政策會議,市場廣泛預期將維持聯邦基金利率目標區間在0.25-0.50%不變,因全球經濟與股市年初劇烈動盪,可能限制聯儲局今年升息的次數與幅度。
雖加薪情況普遍
美企對未來營收趨悲觀
知名研究機構美國商業經濟協會(NABE)發佈的最新調查,儘管有近5成受調企業表示已在去年第四季調高薪資,比例創逾10年新高。但調查同時發現,企業對未來的營收獲利表現趨於悲觀,預測美國經濟走緩的比例也有升高之勢。
NABE這份2016年1月商業景況調查,係自12月17日至1月5日,針對旗下企業成員的經濟師進行,148位經濟師做出回應。
NABE主席馬汀利在為調查結果總結時指出,商業界加薪現象越來越普遍,不過受調企業的營收和聘僱展望平平,他們同時下修對美國整體經濟的預期。
調查顯示,49%受調企業經濟師回應,他們公司在去年第四季有調薪動作,為自2005年1月來最高比例。此外,58%受訪經濟師預期公司未來3個月還會加薪,比例也比前6次調查來得高。
根據美國勞工部資料,勞工平均時薪去年10月與11月份別有0.3%、0.2%增幅,12月陷入停滯,但NABE的最新調查顯示薪資可望走揚。
但看好公司第一季營收成長的受訪者,比例從去年10月調查的51%跌到47%,另有近20%受訪者預期獲利下滑。對整體經濟的看法,超過25%受訪經濟師預測,未來1年美國經濟成長率恐滑落到2%之下。
去年4月NABE調查,有30%受訪者看好未來1年美經濟成長突破3%,但最新調查,受訪者比例卻驟降至4%。(星洲日報/財經)


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Re: S&P 500 Index Movements
« Reply #117 on: January 27, 2016, 04:57:44 AM »



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Re: S&P 500 Index Movements
« Reply #118 on: January 27, 2016, 05:43:03 AM »



1903.63


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Re: S&P 500 Index Movements
« Reply #119 on: January 27, 2016, 06:53:09 AM »


Don’t expect dovish sentiment from the Fed

By Greg Robb
Published: Jan 26, 2016 8:58 a.m. ET

     22 
Fed will stick to forecast of steady growth and rate hikes despite market sell-off
Reuters
Federal Reserve Chairwoman Janet Yellen at her last news conference in Washington
WASHINGTON (MarketWatch) — Despite the volatile financial markets since the turn of the year, Federal Reserve officials will stick to their guns this week and repeat their confidence in the underlying fundamentals of the economy, thus keeping the door open for rate hikes beginning as early as March.

“There is a good chance the January statement will be less dovish than market participants hope,” said Michael Hanson, economist at Bank of America Merrill Lynch.
Fed officials will brave the snow and gather for two days of talks on Tuesday and Wednesday and release a policy statement at the conclusion at 2 p.m. Eastern.


Read more: Monster storm to make life difficult for Fed

Staying the course is seen as the most attractive policy option as it is still too soon to know whether the decline in the U.S. stock market is signalling something different about the outlook.

“They are not going to make a fundamental reassessment of economic prospects of the U.S. based on 14 trading days,” said Chris Probyn, chief economist for State Street Global Advisors in an interview.

“It is too early to admit defeat,” agreed Ellen Zentner, chief economist at Morgan Stanley, in a research note.

The general view of economists is that the market is too focused on the decline in the price of oil and weakness in China.

They note the U.S. labor market has been strong, and consumer spending has been chugging along.

That’s not to say there are no pessimists around.

For instance, Komal Sri Kumar, president of Sri-Kumar Global Strategies, said that the market is signalling the Fed that its December rate hike was a mistake and the central bank will be forced to reverse course later this year.

A rate hike in January was not expected even before the market sell-off.

After the U.S. central bank hiked rates in December for the first time in almost a decade, Fed Chairwoman Janet Yellen stressed that the pace of rate hikes would be “gradual.” For practical-minded market participants, this immediately translated into a firm no-rate-hike-in-January consensus.

The next Fed meeting is set for March 15-16. It will remain a “live” meeting even after the Fed’s new statement is released, Hanson of Bank of America said.

Fed officials have penciled in four rate hikes this year, but the market now sees only one move.

Read more: Market barely expects Fed to hike once this year.

Traders who bet on Fed moves now see September as the first meeting with greater than a 50% chance of a rate hike.

Probyn said that is one reason the Fed will stay the course.

“They’ve got their work cut out for them,” trying to get market expectations more in line with the Fed’s own views about the likely path of rates, he said.

The U.S. central bank is likely to tweak the policy statement to give it “a more sober tone,” Zentner said.

But key parts of the statement will remain unchanged. For instance, the Fed is likely to repeat that the risks to the outlook are balanced, despite the storm clouds from the volatile market.

However vague the Fed statement, the central bank won’t be able to avoid difficult questions for long. Yellen is set to testify about monetary policy to Congress on Feb. 10-11.

She won’t be able to duck the question about how the market has turned sour in the wake of the Fed’s first rate hike.

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Re: S&P 500 Index Movements
« Reply #120 on: January 27, 2016, 06:54:40 AM »



S&P 500’s dead-cat bounce remains underway

By Michael Ashbaugh
Published: Jan 26, 2016 12:21 p.m. ET

     2 
Focus: Gold sustains a breakout, GLD, QQQ, XLF, IYT
Editor’s Note: This is a free edition of The Technical Indicator, a daily MarketWatch subscriber newsletter. To get this column each market day, click here.

The U.S. markets’ recovery attempt remains underway with Tuesday’s firmly higher start.

Still, the January bounce remains technically lackluster — as measured by volume and breadth — and the rally attempt’s sustainability remains an open question.




Before detailing the U.S. markets’ wider view, the S&P 500’s SPX, +1.41%  hourly chart highlights the past two weeks.

As illustrated, the S&P rallied from 23-month lows, thus far stalling near the 1,900 mark, matching its first notable resistance.

On further strength, the S&P’s 10% correction mark holds around 1,920 (not illustrated) and is followed by significant overhead at 1,950.


Meanwhile, the Dow Jones Industrial Average DJIA, +1.78%  has staged a lukewarm rally from the January low.

From current levels, the 15,980 area remains an inflection point, better illustrated on the daily chart, and is followed by resistance at last week’s high of 16,172.

More broadly, the Dow’s first significant overhead rests just under the 16,600 mark.


And the Nasdaq Composite’s COMP, +1.09%  near-term backdrop is slightly stronger.

Consider that its breakdown point rests at 4,517 — better illustrated below — and the index closed Monday just one point higher.

Looking ahead, gap resistance rests at 4,540, and is followed by last week’s high, just above 4,590.

On further strength, the Nasdaq’s next significant resistance rests at its two-week range top of 4,714.


Widening the view to six months adds perspective.

On this wider view, the index has reclaimed its breakdown point — Nasdaq 4,517 — an area that pivots to support.

It’s traversing less-charted territory, capped by notable overhead slightly above the 4,700 mark.


Similarly, the Dow Jones Industrial Average has whipsawed from the low.

As detailed previously, the 15,980 area remains an inflection point, and is followed by last week’s high, around 16,170.

More broadly, the January breakdown has inflicted major damage, and an extended basing period would be expected before the next durable leg higher. The Dow’s first notable overhead rests just under the 16,600 mark, better illustrated on the hourly chart.


And the S&P 500 has staged a shaky, but thus far successful, test of the August low.

Consider that last week’s closing low held at 1,859 — just eight points lower — and the S&P subsequently reversed respectably.

The bigger picture
The U.S. markets’ recovery attempt remains underway with Tuesday’s firmly higher start.

Still, the January bounce has been technically unimpressive — at least thus far — and the rally attempt’s sustainability remains an open question.


Moving to the small-caps, the iShares Russell 2000 ETF has rallied from 30-month lows.

Still, the initial reversal has been flat, fueled by decreased volume. First resistance rests at last week’s high, around 101.60, and is followed by the October 2014 low, just above 103.50.

A close higher would mark technical progress, opening the path to the small-cap benchmark’s breakdown point.


Similarly, the SPDR S&P MidCap 400 has staged a flattish, light-volume lift from the low.

Near-term resistance holds around 234.50, and a close higher would extend the mid-cap benchmark’s rally attempt.

More broadly, consider that the MDY is teetering on its 200-week moving average, while the IWM has violated its corresponding 200-week moving average. Each benchmark’s last sustained posture under these trending indicators concluded in September 2010.


Meanwhile, the SPDR Trust S&P 500 SPY, -0.46%  has rallied from 23-month lows.

Here again, its reversal has been comparably flat versus the initial breakdown, punctuated by decreased volume.

Separately, consider that resistance rests at 190.73 (the Sept.1 low), and the SPY topped last week just three cents higher. This area remains the immediate hurdle.


And returning to the S&P 500’s three-year view highlights a headline issue. Each bar on the chart above represents one week.

Recall that major support spans from the August low of 1,867, to its former weekly closing low of 1,886.

The S&P closed Monday at 1,877 — within the support band — and broadly speaking, this area defines an important bull-bear battleground.


Against this backdrop, a corrective bounce is underway, though it continues to lack quality as measured by volume and breadth. Sustainability, and meaningful upside follow-through, remain an open question.

Beyond corrective bounces, the S&P 500’s longer-term bias supports a firmly bearish view pending technical repairs. An eventual rally atop the 1,950 resistance, and more distant overhead spanning from 1,981 to 1,993, would mark technical progress.

Looking ahead, the Federal Reserve’s next policy directive is due out Wednesday, and the markets’ response should add color to the backdrop.

Tuesday’s Watch List
The charts below detail names that are technically well positioned. These are radar screen names — sectors or stocks poised to move in the near term. For the original comments on the stocks below, see The Technical Indicator Library.


Drilling down further, the SPDR Gold Trust GLD, +1.14%  is acting well technically.

Consider that gold started the year with a breakout, knifing atop well-defined resistance and the 50-day moving average.

It’s subsequently sustained its gains, drawing buyers near first support. The GLD’s breakout point rests at 104, and its technical bias supports a bullish view barring a violation.


Meanwhile, the PowerShares QQQ ETF QQQ, -0.57%  remains a source of relative strength. The group has maintained its range bottom, an area matching the September low.

Still, its violation of the 200-day moving average was fueled by a sustained volume spike, while the ensuing rally attempt has been flat, driven by decreased volume. The QQQ’s technical bias is currently neutral to bearish-leaning, and the shares remain vulnerable to an incremental leg lower.

Consider that its breakdown point closely matches the major moving averages, and a close higher would strengthen the bull case.


Looking elsewhere, the Financial Select Sector SPDR XLF, -0.24%  has broken down technically.

And notably, the XLF notched a 23-month closing low on Monday, its worst since February 2014.

More plainly, the initial rally attempt has not only been flat, the group has extended its downturn on a closing basis. Significant resistance rests at its breakdown point (22.05), and a close higher would mark an early step toward stabilization.


Perhaps not surprisingly, the transports have paced the broad-market downdraft.

As illustrated, the iShares Transportation Average ETF IYT, +2.38%  has plunged to its worst levels since October 2013.

The group’s breakdown also stands out on the weekly chart, and though due a corrective bounce, its longer-term bias points lower. Consider that the transports’ persistent weakness — even amid crude oil’s pronounced slide — supports a bearish broad-market view.

Modest resistance rests at 123.30, and a close higher would mark near-term progress.

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Re: S&P 500 Index Movements
« Reply #121 on: January 28, 2016, 04:49:30 AM »



-26

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Re: S&P 500 Index Movements
« Reply #122 on: January 28, 2016, 05:35:19 AM »



1882.95


-20.68

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Re: S&P 500 Index Movements
« Reply #123 on: January 28, 2016, 06:41:34 AM »


Stocks fall as Fed acknowledges worry, but keeps rate hike on table

By Anora Mahmudova and Sara Sjolin
Published: Jan 27, 2016 4:21 p.m. ET

     
Leaves rates unchanged, monitoring market turbulence
Bloomberg
Janet Yellen and the Federal Reserve are in focus on Wednesday
U.S. stocks fell Wednesday after the Federal Reserve left the door open to a March rate increase despite acknowledging that “economic growth slowed” since its last meeting in December.

“Inflation is expected to remain low in the near term,” the Fed said in new, more cautious language, that some saw as a suggestion the central bank won’t be quick to raise interest rates again. But others saw the Fed refusing to rule out a move as early as March after paying lip service to increased global market turmoil and reiterating that it saw downside pressure on inflation as unlikely to last.

Read the text of the Federal Reserve decision to leave interest rates unchanged.


“The makers of monetary policy were not as dovish as the markets would have liked to see, although the committee did include that they are monitoring global economic and financial developments, said Steven Ricchiuto, chief economist at Mizuho Securities, in emailed comments. “However they also maintained the notion that the things keeping inflation from returning to their 2% target are transitory.”

“The result is an equity market that has little to be optimistic over,” he said.

The Dow Jones Industrial Average DJIA, -1.38% which was up 150 points at session highs, fell 222.77 points, or 1.4% to close at 15,944.64. The S&P 500 SPX, -1.09%  declined 20.68 points, or 1.1%, to settle at 1,882.95, led by a 2.5% fall in tech stocks.

Large losses from corporate heavyweights Apple Inc. and Boeing Company after disappointing earnings accounted for much of the drop in the Dow industrials.

Shares of Dow industrials component Boeing Inc. BA, -8.93% sank 9.8% after the plane maker gave 2016 guidance that fell short of Wall Street expectations, while Apple Inc. AAPL, -6.57% another component, fell 6.6%. Apple late Tuesday said iPhone sales grew at the slowest pace since the handset’s introduction in 2007.

Opinion: Here’s why the news about Apple is so bad

As Apple’s share price drops, Alphabet Inc. GOOG, -1.83% GOOGL, -2.21%   is closing the gap in stock-market value and could soon challenge for the crown of world’s most valuable company.

The Nasdaq Composite COMP, -2.18%  lost 99.51 points, or 2.2%, to finish at 4,468.17. Among hardest hit shares were biotechnology stocks, with the iShares Nasdaq Biotechnology ETF IBB, -3.08%  finishing down 3.1%.

“There is simply not a lot of optimism among big institutional investors this year. Every rally so far has been an opportunity to sell and overall sentiment is bad,” said Michael Antonelli, equity sales trader at R.W Baird & Co.

Recent market selloffs had been triggered by concerns over slowing growth in China and precipitous falls in commodity prices.

“Investors are perhaps thinking that problems in China and Europe are not temporary and will not be fixed easily,” Antonelli said.

U.S. crude oil futures CLH6, +2.26% which were lower in the morning, rebounded to settle 2.7% higher at $32.33 a barrel on Wednesday after news reports that Russia and OPEC discussed production cuts. Oil prices have been extremely volatile over the past few months, setting the tone in stock and bond markets. However, on Wednesday, for the first time since December, a rally in oil prices did not translate into a rally in stocks.

In other economic news Wednesday, sales of new homes rebounded handily in December, a signal of continued strength in the housing market. However, markets appeared to ignore economic data releases.

Apple: iPhone sales grew at slowest pace ever(1:49)
Apple said iPhone sales grew at the slowest pace since its introduction in 2007 and forecast revenue declining in the current quarter, its first such drop since 2003.

Movers and shakers: The earnings season continues at full speed on Wednesday.

Biogen Inc. BIIB, +5.15% jumped 5.2% after the biotech company’s fourth-quarter profit and sales beat expectations.

Caterpillar Inc. CAT, -1.42%  slumped 1.4% Wednesday, after the agricultural equipment maker reported sharp declines in machine sales in December.

Shares in VMware Inc. VMW, -9.82%  lost 9.8%, even after the software company’s earnings topped Wall Street estimates late Tuesday and made good on reports of layoffs.

Other markets: The dollar traded lower against most other major currencies with the ICE Dollar Index DXY, -0.10%  off 0.6% while Treasury yield tumbled after the Federal Reserve took a more dovish tone in its policy statement.

Asian markets closed mostly higher, although China’s Shanghai Composite Index SHCOMP, -0.52%  ended with losses yet again. European stocks SXXP, +0.31%  closed mixed.

Gold settled lower ahead of the conclusion of the Fed meeting, but later regained ground in electronic trade as markets reacted to the statement.

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Re: S&P 500 Index Movements
« Reply #124 on: January 28, 2016, 06:43:59 AM »



Fed Back-Pedals Hawkishness, Hints At Policy Error: "Monitoring Global Developments", Admits "Growth Slowed Last Year"
Tyler Durden's pictureSubmitted by Tyler Durden on 01/27/2016 15:01 -0500

headlines Market Conditions Monetary Policy Steve Liesman


 
inShare
10
 
Surging bonds and bullion and slumping stocks was not what Janet had in mind so she had some 'splaining to do. Hopes for a "passive hawkish" note appear to be met as confirmation of dismal data dependence offers just enough dovishness for the stock bulls and just enough hawkishness for economy bulls.

*FED REPEATS ECONOMY EXPECTED TO WARRANT ONLY GRADUAL RATE RISES
*FED ASSESSING GLOBAL DEVELOPMENTS FOR ITS BALANCE-OF-RISK VIEW
*FED CLOSELY MONITORING GLOBAL ECONOMIC, FINANCIAL DEVELOPMENTS
Treading a fine line between losing all credibility and exposing their total devotion to the stock market, it appears The Fed is maintaining its delusion that everything will be fine as they unwind the largest and most experimental monetary policy of all time, and yet for the first time we get proof that the Fed admits it made an error by hiking into a slowing economy: "labor market conditions improved further even as economic growth slowed late last year.

Pre-Fed: S&P Futs 1901.75, 10Y 2.04%, Gold $1115, WTI $31.95, EUR1.0875

Before the statement hit, rate odds this year were as follows:



 

Since the last meeting - and the historic rate hike - things have not panned out for The Fed...



 

Nanex explains the liquidity situation right before the statement:



 

Further headlines:

FOMC: REMOVES 'REASONABLY CONFIDENT' RE 2% MED-TERM INFL
*FED: MKT-BASED INFLATION COMPENSATION MEASURES DECLINED FURTHER
*FED: SURVEY-BASED INFLATION EXPECTATION MEASURES LITTLE CHANGED
Except that is a total lie..



 

*FED SAYS INVENTORY INVESTMENT HAS SLOWED
Here's why!!



*  *  *

Full Redline Statement below:



There was some verbal "normalization" in the statement, which at 558 words had the fewest words since the July statement

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Re: S&P 500 Index Movements
« Reply #125 on: January 29, 2016, 04:49:35 AM »



+13

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Re: S&P 500 Index Movements
« Reply #126 on: January 29, 2016, 05:36:56 AM »



1893.36

+10.41

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Re: S&P 500 Index Movements
« Reply #127 on: January 29, 2016, 07:02:06 AM »



財經
標普1500指數「空軍」比例創3年新高
01月29日(五) 03:52   

【on.cc東網專訊】根據Bespoke投資集團的資料顯示,標普1500指數空頭未平倉合約的浮動比例(SIPF),去年12月份為6.48%,升至2012年6月份以來新高,意味投資者在近期股市持續下挫期間,雙倍沽空股市,其中以能源板塊所受衝擊最為嚴重,消費及保健板塊的空頭情況亦嚴重

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Re: S&P 500 Index Movements
« Reply #128 on: January 30, 2016, 04:56:02 AM »



+42

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Re: S&P 500 Index Movements
« Reply #129 on: January 30, 2016, 05:37:01 AM »



1940.24

+46.88

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Re: S&P 500 Index Movements
« Reply #130 on: January 30, 2016, 08:27:11 AM »



Opinion: This reliable indicator says we’re in a bear market for stocks

By Mark Hulbert
Published: Jan 29, 2016 5:12 a.m. ET

     16 
Margin debt is heading lower, suggesting bearishness is setting in

CHAPEL HILL, N.C. (MarketWatch) — One of the darkest clouds on Wall Street’s horizon is declining margin debt.

I’m referring to the total amount investors borrow to purchase stocks, which historically has risen during bull markets and fallen during bear markets. And that’s what is so ominous: The New York Stock Exchange reports that total margin debt hit its peak last April, and is now nearly 10% lower, as you can see from the chart above. (Note that the latest data is from December; January’s total will undoubtedly be lower.)

In fact, according to research conducted by Norman Fosback, the former president of the Institute for Econometric Research and current editor of Fosback’s Fund Forecaster, a good long-term indicator can be created by comparing total margin debt with its 12-month moving average. “If the current level of margin debt is above the 12-month average, the series is deemed to be in an uptrend, margin traders are buying, and stock prices should continue upwards,” Fosback wrote in his investment textbook “Stock Market Logic.”


“By the same line of reasoning, sell signals are rendered when the current monthly reading is below the 12-month average. This is evidence of stock liquidation by margin traders, a phenomenon which usually spurs prices downward.”

Fosback introduced this indicator to clients in the mid-1970s, based on research extending back to 1942. He calculated that there is an 85% probability that a bull market is in progress when the indicator is bullish, in contrast to only a 41% probability when the indicator is bearish.

This indicator acquitted itself well in the 2007-2009 bear market: Total margin debt hit its peak in July 2007, three months prior to the bull market peak that year (which occurred Oct. 9). And it dropped below its 12-month moving average in December of that year, and stayed below until the summer of 2009, early in the bull market that began in March of that year.

Four stocks that are too cheap(4:17)
The indicator didn’t do quite as well during the 2011 bear market, which according to the calendar compiled by Ned Davis Research, lasted from April 29 through Oct. 4. Though total margin debt that year did indeed hit its high in April, it didn’t drop below its 12-month moving average until August.

It’s also important to acknowledge that the indicator sometimes sounds false alarms. One such time came in January of last year, when total margin debt briefly dipped below its 12-month moving average before quickly climbing back on top. Even so, however, the indicator might not be considered a total failure, since the broad stock market today is 10% lower than where it stood when I announced the bear market signal in an early-March column.

In any case, unlike the early-2015 dip below the 12-month moving average that lasted for just one month, margin debt currently has been below its trend line for five straight months. It therefore is sounding a strong alarm today

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Re: S&P 500 Index Movements
« Reply #131 on: January 30, 2016, 08:28:59 AM »



Why 2016 keeps getting uglier for US economy
Jeff Cox   | @JeffCoxCNBCcom
5 Hours Ago
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When it comes to economic growth, 2016 is looking a lot like 2015 — and probably even worse.

Friday's report showing that gross domestic product grew just 0.7 percent in the fourth quarter brought to a conclusion another year of dashed hopes for economic liftoff — "escape velocity," as it is sometimes called.

Seven years of zero interest rates, $3.7 trillion worth of Fed money printing and more than $6 trillion piled onto the public debt resulted in an economy still struggling to break 2.5 percent full-year growth. In fact, if the first reading on GDP holds up on revision, the U.S. economy will have expanded just 2.4 percent for the full year, according to the Commerce Department.

At the start of 2015, most economists expected U.S. growth of 3 percent or better, predicated on sizable gains in consumer spending, business investment and construction. Instead, the year featured consumers mostly hanging onto their gas savings, weak capital expenditures (including a decline of 1.8 percent in the fourth quarter) and slumping oil prices battering investment instead of lifting spending.

Read MoreBuy stocks when everyone's miserable: CEO
Looking ahead, the early indicators are not good, with chances of a recession gaining more traction on Wall Street.

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.
While many of the latest economic numbers, including the GDP reading, are a pretty good distance from recession, troubles are brewing in some less obvious places.

Most notably, the bond market has been screaming recession for weeks.

Spreads on high-yield bonds have widened beyond 800 basis points (8 percentage points), gaps that for the past 30 years always have presaged either a recession or "growth scare," according to Tom Lee, managing partner at Fundstrat Global Advisors.

The high-yield market is pricing in a 9 percent default rate, something akin to the 1990 recession, a comparatively shallow downturn that nevertheless helped sink President George H.W. Bush's re-election bid in 1992. Standard & Poor's said its current corporate bond distress level of 29.6 percent is at its highest level since July 2009. S&P said it downgraded 165 issuers in the fourth quarter compared with just 38 upgrades.

Read MoreGoldman: Recession fear overblown, 11% gain on way
The plunge in oil prices is spreading a deflationary reaction across the fixed income market, with Treasury Inflation-Protected Securities funds seeing their biggest outflows in 33 weeks last week, according to Bank of America Merrill Lynch. Fed officials have insisted the current inflation retreat is based on "transitory" factors like the oil bear market, but the market isn't a believer, reflected in part by the exodus from inflation protection in fixed income.

In fact, the market-Fed divide is growing at a rapid pace.

The Federal Open Market Committee at its December meeting indicated there likely would be four hikes in its interest rate target in 2016. Traders, though, are pricing in almost no chance of a move this year, with the first better-than even possibility for February 2017 and the first increase not fully priced in until June 2017. That's a huge communication gap the Fed will have to find a way to bridge at its March meeting, which was supposed to see a rate hike that now is almost certain not to happen.

For the Fed to move forward on a rate-hiking cycle, or to do any policy normalization during 2016, a good deal would have to change.

Read More Fed vs. the market: 'Tension is fairly evident'
Goldman Sachs reported Thursday evening that its analyst index of economic indicators is at its lowest level since mid-2012. The most recent decline was fueled by drops in sales, exports and manufacturing in general. More importantly, Goldman reported that indicators for future activity are "quite low," an indication of "softer business activity to start 2016."

At the same time, Thursday's durable goods shock (a 5.1 percent decline) led Deutsche Bank to conclude that even its modest 1.8 percent GDP growth rate for 2016 may be too ambitious.

"The risks to our growth and interest rate projections are distinctly to the downside," Deutsche said in a note to clients.

Of course, a falling market and weak economy are not necessarily poison to stocks.

The disappointing GDP data in the U.S. was drowned out almost completely by news that the Bank of Japan instituted negative interest rates in hopes of resuscitating its own moribund economy. Wall Street rallied on the view that more currency debasement in Asia would add another layer of pressure to the Fed to avoid tightening policy.

And Fundstrat's Lee, a relentless stock market bull, points out that negative years for junk bonds, such as 2015, are historically followed by great years for stocks, with the average annual return of 22 percent for the S&P 500.

The main danger to that outlook, of course, is recession. JPMorgan is pricing in a 22 percent chance of a recession, while BofAML said the risk is about 20 percent — both figures fairly close to their historical norm for any year.

"Headwinds from an appreciating dollar, transitioning Chinese economy and inventory overhang are weighing on growth. We can see the impact of this slowdown in the industrial-sector data," BoAML said in a note. "However, leading indicators of economic activity suggest only a slowdown, not a downturn or recession.

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Re: S&P 500 Index Movements
« Reply #132 on: January 30, 2016, 08:33:54 AM »


A month to forget: Biggest losers in January turmoil
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So much for the New Year heralding optimism and a brand new start for markets: Major indices around the world have been through a tumultuous month in January with single to double-digit declines to show for it.

Concerns over a slowdown in China's economic growth, a renewed fall in oil prices that saw the price of a barrel of benchmark Brent fall below $30 and general market uncertainty about central bank monetary policy have all shaken global investors.

China's stocks rebounded on Friday but the market is still on track to post its biggest monthly fall since the global financial crisis in 2008-2009 following marked volatility earlier this month. The Shanghai composite is down 22.65 percent since the start of the year and China's CSI300 index has also declined around a similar amount.

Read MoreAsian stocks steeply lower after China suspends trade early
Traders work on the floor of the New York Stock Exchange.
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Traders work on the floor of the New York Stock Exchange.
Meanwhile in Asian economic powerhouse Japan, there was volatile trade on Friday after the Bank of Japan decided to extend its monetary stimulus program by introducing a negative interest rate policy. The Nikkei 225, which was down 0.6 percent before the announcement, surged as much as 3.51 percent soon after, before tumbling as much as 1 percent. It then surged to close up 2.80 percent. Since the start of 2016, Japan's Nikkei is down 7.96 percent, however.


Bank of Japan adopts negative interest rate policy
Europe has not been immune to the tumult with oil prices playing the dominant role in declines over the last month,

There is also reason to hope for a better start to February, however, as oil prices are set for their fourth straight session of gains. Global benchmark Brent crude futures rose on Friday, having moved 6.5 percent higher so far this week, buoyed by hopes that oil-producing countries could come to some kind of deal to tackle a glut in supply.

While the price of a barrel of Brent at $34 and U.S. crude at $33.45 on Friday might be cold comfort for oil producers, particularly those in the U.S. who have higher production costs, the rebound has appeared to buoy markets in Europe, offering a reprieve from the declines seen mid-month when Brent futures hit an intraday low of $27.10.

Despite all the market volatility and concerns over oil prices, London's FTSE index – down almost 5 percent since the start of the year -- has not suffered as much as its German counterpart, the DAX, which has declined 10 percent in January.

Germany's significant export exposure to China fueled the selloff – the country's key automotive industry was the biggest contributor to exports in 2014 but Volkswagen and BMW sales have started to slow, not helped by the emissions scandal that has engulfed the former. For the EU as a whole, China was the EU's second-biggest trade partner in 2015.

Meanwhile, France's CAC index has lost 6.7 percent this month. France exports products such as luxury goods and aircraft to China.

As markets in the U.S. were poised to open for the last trading day of the month, futures pointed to a higher open on Wall Street as traders anticipated the release of fourth quarter gross domestic product (GDP) data, despite fears of a weaker-than-expected 0.8 percent growth.

U.S. stocks could do with a boost. The S&P 500 is down 7.4 percent this month, but the heaviest losses have been seen on the tech-heavy index, the Nasdaq, which has declined 10 percent this year so far.

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Re: S&P 500 Index Movements
« Reply #133 on: January 30, 2016, 08:38:14 AM »




"Reset" Or "Recession"?
Tyler Durden's pictureSubmitted by Tyler Durden on 01/29/2016 13:40 -0500

Bear Market Capital Repatriation China Ethan Harris Housing Starts Japan Nikkei OPEC Real estate Recession Unemployment Unemployment Claims Yen


 
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Following years of QE-inspired excess returns, investors in 2016 suddenly find themselves embroiled in a broad and brutal bear market. As BofAML's Michael Hartnett notes, the 10-year rolling return loss from commodities (-5.1%) is currently the worst since 1938...



Oil peak-to-trough -80% past four years, EM currencies trading 15% below their 2009 lows, yield on US HY bonds up from 5% to 10% in past 18 months, and equal-weighted US stock index down 25% from recent highs...



1470 global stocks (59% of the MSCI ACWI) are down >20% from their peak, and 913 are down >30% from their recent highs.

“Reset” or “Recession”?

In our view, the pertinent question for investors is whether the current bear market represents a healthy “reset” of both profit expectations and equity and credit valuations, or more ominously, the onset of a broader economic malaise that will require a major policy intervention in coming months to reverse.

The reset view:

The BofAML base case veers more toward the “reset” view and runs as follows:

On profits: lower trend GDP growth (Ethan Harris recently revised his forecast for US trend growth down from 2.0% to 1.75%), at a time of historically high profit to GDP levels, is inconsistent with the further strong advance that the consensus has penciled in the EPS (for example, consensus forecasts US EPS to rise 20% in the next 24 months would leave profits/GDP close to an all-time high – Chart 4); investor disbelief has caused the multiple to fall back in-line with its historical averages.



On policy: the Fed is likely to be as dovish as it needs to be to keep the economy and markets moving forward; the ECB and BoJ will do more; and the bear market "canaries in the coalmine", the oil price and the US$, have recently stabilized thanks to Fed hesitancy on rates and hopes that OPEC will cut supply.

On positioning: investors have already reset positioning… cash levels are high, uber-crowded longs in peripheral Euro-area debt, Euro-area banks, NKY, FANG stocks have been spanked; as is capitulation in "Illiquid" yield plays (EMB, HY, MLPs). Using the S&P 500 as our risk proxy, multiples have thus already adjusted from a peak of 17.2X, to 15.2X; using a historical average multiple of 14.4X, and leaving EPS levels broadly unchanged thus leaves investors with a reset target of 1795 (Table 4), which should act as a rough entry point for investors looking to add risk.



The Recession view:

The recession view remains a more minority view. But it is nonetheless a big risk and, should it come to pass, would be expected to elicit a major policy response. The recession view runs as follows:

On profits: the 4C’s of China, Commodities, Credit, Consumer are all likely to deteriorate further, pushing the ISM index below 45, cementing recession expectations; China exports, China capital flows, a weak supply response from oil producers, as well as the reduced ability of corporations to issue debt to buyback stocks can all conspire to take economic data lower; in particular, the US consumer weakens (initial unemployment claims rise above 300k, US housing starts fall below 1 million, small business confidence falls below 95).

On policy: Quantitative Failure becomes more visible...since Japan expanded ETF purchases Dec 18th the Yen is +1.9%, Nikkei -10.3%; since ECB cut rates Dec 3rd the Euro is -0.1%, Euro Stoxx 600 -10.0%; since Fed hiked on Dec 16th the S&P 500 is -8.7%, 2yr yields are -18bps, 10yr yields -31bps; investors reduce exposure to risk assets in order to provoke a reversal of Fed policy (as was the case in 1937) or a bolder coordinated policy response (Chart 5).



On positioning: investors still OW stocks; a China/EM/oil/commodity "event" yet to create "entry point" into distressed assets; the long US$ trade yet to be unwound via a short-end collapse/Fed priced-out; and private clients are not yet in risk-off mode; in addition, the bid to global risk assets from Sovereign Wealth Funds falls sharply (there is currently $7.2tn in AUM at global SWFs, $4.4tn directly from commodity-producing countries), as capital repatriation back to distressed oil-producing countries reduce the bid for US Treasuries, prime real estate in London, New York, Geneva, luxury goods and services, hotels and "trophy assets" around the world (e.g. English Premier League and European football clubs – Table 5).



The recession result? Again using the S&P 500 as a risk barometer, in a recessionary scenario where EPS falls 10% and PE contracts 20% peak-to-trough, a target for SPX would be 1575-1600

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Re: S&P 500 Index Movements
« Reply #134 on: February 01, 2016, 05:47:24 AM »


JPMorgan slashes outlook for stocks, citing Fed's 'diverging pressures'
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Is growth for U.S. equities in serious jeopardy thanks to the Federal Reserve's interest rate policies?

JPMorgan Chase says yes. Among Wall Street's largest banks, the firm now has the most bearish position on the S&P 500 Index. Having previously ended 2015 with an S&P price target of 2,200, JPMorgan recently cut that number to 2,000.

Citing poor earnings, the banks believes stocks will continue to stall in the new year. To date, a third of the S&P 500 has reported negative growth in both earnings and revenue.
Last week, JPMorgan's head of U.S. equity and quantitative strategies Dubravko Lakos-Bujas told CNBC's "Fast Money" that the Fed was the primary impetus behind bank's call. "We've had diverging pressures from the central bank and a Fed that's trying to tighten while the rest of the world is trying to ease," he said.

"The more that the Fed tries to tighten, it pressures the dollar upwards and it pressures commodity prices lower," he added.


Marc Faber
Dr. Doom: Not another bull market in my lifetime
Liz Ann Sonders
Panicky sellers will be sorry: Schwab strategist

The brutal start to the year, one of the worst in history, has sent Wall Street bears on a rampage and mauled major benchmarks. On Friday, the S&P was down 5.1 percent for its worst month since August 2015, and its worst January since 2009.
The uncertain global economy has made an increasing number of observers worry about the Fed making a policy mistake by hiking interest rates.

With what could be described as a hawish policy, Lakos-Bujas feels the Fed is fueling the potential for an earnings recession, and that the risk-reward for equities could deteriorate. Fearing more volatility, he's hoping for a change in Fed Chair Janet Yellen's approach. "If the Fed takes a more dovish view, I think it will provide a relief [for the U.S. economy]," he said.
As Fed policy for 2016 continues to develop, Lakos-Bujas is keeping expectations low.

"As far as this quarter is concerned, we're calling for anywhere from a 2-3 percent earnings surprise. Buyback activity is likely going to start picking up as late January to early December was a quitter period," the analyst said. "So all of these elements in the short-term might support equities." Additionally, he noted that nearly 70 percent of earnings reports have come in above estimates.
However, Lakos-Bujas was quick to mention that this data is overshadowed by concerns for the next three to six months.

As it stands, stocks have been down on the final trading day in each of the past three months, as well as down in ten of the past twelve months. JPMorgan has cited multiple hurdles to the outlook, including widening credit spreads, a deteriorating macroeconomic backdrop, and a struggling U.S. manufacturing sector as reasons for more pain to come.

In his coverage, Lakos-Bujas said that the "U.S. manufacturing sector is already in recession territory and that the non-manufacturing sector continues to decelerate."

Despite these risks, Lakos-Bujas did not call for a new crisis. A recession "is a possibility, but I wouldn't say that. I would more so say that [there's] concern over a bear market. With the S&P around 1,900 right now, that could mean we maybe see 1,700 at some point.

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Re: S&P 500 Index Movements
« Reply #135 on: February 01, 2016, 05:55:16 AM »


Forget About "Stocks For The Long Run"
Tyler Durden's pictureSubmitted by Tyler Durden on 01/31/2016 10:40 -0500

Bear Market ETC Japan Meltdown Robert Shiller Volatility


 
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Submitted by Bill Bonner of Bonner & Partners (annotated by Acting-Man.com's Pater Tenebrarum),

No Shame in Cash

After a year of wandering the globe, we are back in the homeland… and ready to turn in our passport. Travel can be fun. It can also be “broadening.” But the most interesting thing about it is not so much what you find out about other places. It’s what you discover about your home.

You return to the land you once knew, as T.S. Eliot put it, and know it for the first time. So, we are ready to rediscover Baltimore – a place where children refer to handguns as “school supplies.”

 

back-to-school sale-1

The new school year begins in Baltimore…

 

But, let’s move on. First, we return to questions put to us in Mumbai two days ago.

“What should an investor do?” asked an old man in a Nehru jacket.

“Should I stay in the stock market? After all, staying in the stock market always seems to pay off over the long term. Or should I move to gold and cash?”

We have been telling people there is “no shame in staying in cash” until the market finds a bottom. If we’re wrong and prices shoot upward, we will miss the upside. But the risk of missing substantial gains seems slight. Earnings are going down. Almost all the signals from industry and commerce seem to be pointing down, too.

Meanwhile, U.S. stocks are still expensive. The CAPE ratio looks at the inflation-adjusted average of the previous 10 years of earnings relative to stock prices. On that basis, the S&P 500 has been a worse deal only three times in the last 100 years. Those were just before the 1929 Crash… the dot-com bust in 2000… and right before the 2008 meltdown – hardly auspicious precedents.

 

1-PE10-percentiles

Where we are: the current PE/10 is in the 92nd percentile of market valuations since 1871 – exceeded only by 1919, 2007 and 2000.

 

Not only that, but also global debt levels are higher today than ever in history. Wouldn’t it make sense to stay in cash… on the sidelines… until prices go down and debt issues are resolved?

 

March to Hell

Not according to the newsletter writers at The Motley Fool. The Fool’s Matthew Frankel gives us “three reasons you shouldn’t worry about the stock market in 2016.”

“Don’t panic,” he goes on. The late Richard Russell, of Dow Theory Letters, taught us there are short cycles and long cycles. The long cycles are the ones that count. You can miss a rally now and then; it won’t make much difference. But miss a major, long-term bull market, and you have missed an opportunity of a lifetime.

On the other hand, riding through a major bear market can seem like a march to Hell. The worst thing that can happen, Russell used to say, is that you take a “ruinous loss” – one you can never recover from.

Major market swings take time. The Dow reached a peak in 1929. It didn’t regain that peak again until the late 1950s. Since then, we’ve cycled through booms and busts, reaching the latest top in 2015, when the Dow rose over 18,000.

 

2-DJIA - 1920-1956-ann

The DJIA from 1920 to 1956 – in nominal terms, the average only regained its 1929 peak level in 1954. Apart from a short time in the 1950s-1960s, it only got back to its 1929 valuation in real terms in the mid 1990s. The vast bulk of the stock market’s nominal gains are simply a reflection of monetary inflation – click to enlarge.

 

The questions to ask yourself: Where are we now? Have we passed the top? Are we in a long decline? Then there are the personal questions: How long will you live? When will you need the money? How much volatility can you withstand?

Although top to top is a long time, it can also take a long time just to break even. The 1929 high was not reached again until 1956 – 27 years later. In Japan, they’re still waiting to recover half the losses from the crash of 1989 – 26 years on. How would you feel about waiting until 2042 before we return to last year’s high?

 

3-Nikkei

Whenever someone tells you that “stocks always go to new highs in the long run”, be sure to ask for a precise definition of “long run”, because it can sometimes be a lot longer than you’d expect – click to enlarge.

 

No Mountain Left to Climb

The other thing to realize is that the long-term performance of the stock market is mostly a myth. Yes, you could have made about 10% a year if you’d gotten in 100 years ago and stayed in. But that figure is subject to some important qualifications.

First, you don’t really make a steady 10% a year. That’s just what you get when you go back and average out your annual gains over a century. It looks as though you have steadily marched up the mountain and now sit high and dry. But when you’re at the top, the only way to go is down! Do the math again when you get to the bottom. You will find your average rate of return looks awful.

Second, who lives long enough to make it work? Compounding is great in theory. But it only works its magic at the end. Compound a penny at a 100% a year – from one to two… two to four… four to eight, etc. – and at the end of 10 years, you have just $10.24.

Compound $1,000 at 10% a year, and after 10 years, you have $2,593. Not bad. But hardly the sort of stuff dreams are made of. And that assumes that you get 10% a year. At today’s prices, stocks are already so high, there’s not much mountain left to climb.

Nobel Prize-winning economist Robert Shiller estimates the average annual return on U.S. stocks the next 10 years at only 3%. Vanguard Group founder Jack Bogle puts it at a little more than 1%. And Rob Arnott at Research Affiliates looks for a return of less than 1%. At those levels, you can forget about the magic of compounding.

 

4-wmc160125b

Dr. Hussman’s market cap/GVA valuation parameter with actual subsequent S&P returns overlaid predicts a 12-year nominal S&P 500 return of 2.5% following the recent market losses. As you can see, this is abjectly low from a long term historical perspective – even the 2007 projection looked better.

 

Whacked by the Big Bear

Then, you have to worry about those drawdowns – the peak-to-trough losses you experience in your portfolio. If you compound at a rate of 10% a year but have a 40% drawdown in year three, you have to go for another three years just to get back where you started.

Worse, your lifetime of savings and investing gets whacked by a big bear market. You take the “ruinous loss” Russell warned about, with no time to recover. Most investors don’t have enough time to make compounding work as advertised. Most are already over 50 when they begin investing. They don’t have 100 years. They’re lucky if they have 15 or 20.

Over that kind of time frame, if there are any substantial setbacks, they’re finished. That’s why it’s so important to get in when the market is low. Then double-digit gains, compounded over many years, can at least be a theoretical possibility.

But if we’re right about where the economy is… how expensive the stock market is… and how difficult it will be to sustain further gains, then this is probably not the best time to begin a program of retirement financing via stocks.

On our scales, the balance between risk and reward in U.S. stocks falls heavily toward the risk. We see a reasonable likelihood of a ruinous loss against a remote possibility of a big gain.

So go ahead and panic. You may be glad you did

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Re: S&P 500 Index Movements
« Reply #136 on: February 02, 2016, 05:00:46 AM »



+2

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Re: S&P 500 Index Movements
« Reply #137 on: February 02, 2016, 05:42:34 AM »



1939.38

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Re: S&P 500 Index Movements
« Reply #138 on: February 02, 2016, 07:07:10 AM »



Hated market has 97% chance to rally: Citi
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Traders work on the floor of the New York Stock Exchange.
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Traders work on the floor of the New York Stock Exchange.
Hatred of the U.S. stock market is near levels last seen during the financial crisis, according to a Wall Street sentiment measure. And that, ironically, increases the chances the selling is almost over.
Citi Research strategist Tobias Levkovich said his time-tested sentiment model shows there is a 97 percent chance of market gains over the next 12 months. This probability is nearly 20 percent higher than historical average.

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Re: S&P 500 Index Movements
« Reply #139 on: February 02, 2016, 07:15:44 AM »


Total U.S. Debt Surpasses $19 Trillion; Rises $8.4 Trillion Under President Obama
Tyler Durden's pictureSubmitted by Tyler Durden on 02/01/2016 16:47 -0500

Congressional Budget Office Debt Ceiling National Debt President Obama


 
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Two months ago, when we calculated that the US would need a new "debt ceiling" of $19.6 trillion to last until after Obama's tenure, we may have been too optimistic: since the increase in the hard debt limit of $18.15 trillion which was raised at the end of October, the US appears to be growing its debt at a far faster pace than we had originally expected, and according to the latest public debt data, as of the last day of January, total US debt just hit 19,012,827,698,417.93.

This means that if the nominal US GDP as of December 31 which was $18.12 trillion grows at the 1.2% rate expected by the Atlanta Fed, total debt to GDP is now on pace to hit 105% at the next GDP tabulation, and rising fast from there.

It also means that since his inauguration in January 2009, the US debt has now risen by a whopping 78.9%, or $8.4 trillion. It was $10.6 trillion when Obama came into office.

Indicatively, the Congressional Budget Office forecasts that the national debt will hit $22.6 trillion by 2020 and will rise to $29.3 trillion by 2026.

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Re: S&P 500 Index Movements
« Reply #140 on: February 02, 2016, 10:53:19 PM »



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Re: S&P 500 Index Movements
« Reply #141 on: February 02, 2016, 11:02:58 PM »



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Re: S&P 500 Index Movements
« Reply #142 on: February 03, 2016, 05:01:16 AM »



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Re: S&P 500 Index Movements
« Reply #143 on: February 03, 2016, 05:48:54 AM »



1903.03

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Re: S&P 500 Index Movements
« Reply #144 on: February 03, 2016, 06:56:34 AM »


Banks report drop in demand for loans
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Investors aren't the only ones running for safety as the market tumbles and the economy wobbles.

Businesses, too, are indicating an unwillingness to take on risk as loan demand declined for the first time in about four years, according to the Federal Reserve's Senior Loan Officer Survey released this week.

Demand for commercial and industrial loans has plunged in 2016, with declines happening across business sizes. Large- and medium-sized businesses had an 11.1 percent decline, while demand from small businesses fell 12.7 percent.

Read MoreWhy 2016 keeps getting uglier
For large and medium businesses, the decline was the first since the fourth quarter of 2012 — demand was flat in the second quarter of 2015 — and tracking for the biggest three-month decline since the fourth quarter of 2011.


The decline comes as the U.S. economy emerges from a fourth quarter that saw gross domestic product gain just 0.7 percent. The Institute for Supply Management reported that its index tracking manufacturing registered a 48.2 in January, with a number below 50 representing contraction.

In short, business investment is unlikely to help lead the economy out of its doldrums.

Read MoreForecast sees big plunge in Treasury yields
"The weakening in demand for business loans suggests that the growth rate of actual commercial and industrial lending will grind to a halt this year," Paul Ashworth, chief U.S. economist at Capital Economics, said in a note to clients.
"Furthermore, banks reported that the weakness in demand for loans from businesses was primarily because the latter were scaling back their investment plans," he added. "That suggests any rebound in investment in equipment in the first half of this year will be muted at best. With the mining, manufacturing and agriculture sectors all hurting, we hadn't expected much from business investment this year, but the drop off in loan demand is worse than we would have expected."
In addition to the falling demand, banks also reporting that standards tightened for large- and middle-market firms while premiums also rose for riskier loans.

On the positive side, banks reported that demand for commercial real estate loans had increased in January and that lending standards for households had eased. But they also expect lending standards to tighten both for commercial real estate and commercial and industrial loans

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Re: S&P 500 Index Movements
« Reply #145 on: February 03, 2016, 06:58:35 AM »


Recession risks warn of ‘severe’ drop in the stock market

By Tomi Kilgore
Published: Feb 2, 2016 1:08 p.m. ET

     94 
Most S&P 500 stocks could fall 50% or more if a ‘worst-case’ recession unfolds
Romina Amato/Red Bull via Getty Images
Another brokerage firm has used the “R” word on Tuesday, warning investors to wake up to the idea that rising risks of a recession could send the stock market over a steep cliff.

Based on current valuations, the prices of most stocks don’t appear to have factored in a recession scenario, “hence the downside should we see a recession could be rather severe,” RBC Capital Markets’ global equity team wrote in a research note to clients.

Don’t miss: Apple could offer investors shelter in a recessionary storm.


Applying a stress test to their coverage universe, using worst-case, price-to-earnings valuations seen during the 2008-to-2009 recession, RBC analysts said they believe the shares of most companies could still fall another 50% or more from current levels.

The concern for RBC analysts stems from the recently volatility in the stock market, caused by macro weakness, softness in China and commodity market challenges.

On Monday, Deutsche Bank strategist David Bianco said the second-half of 2015 was “clearly a profit recession” for S&P 500 companies, and suggested it probably won’t be until the second half of this year that “healthy” growth returns.

FactSet
Nearly half of S&P 500 companies have now reported fourth-quarter results through Tuesday morning, and earnings-per-share is headed for a 5.8% decline on the year, according to FactSet, compared with an estimated 5.7% decline as of Friday. That’s the data provider’s blended growth rate, which combines those companies that have reported with the estimates for the rest.

That would be the third-straight quarter of an EPS decline, the longest such streak since the Great Recession.

Among Tuesday’s culprits for the earnings decline, Exxon Mobil Corp. XOM, -2.23%  reported a 58% profit plunge and Pfizer Inc. PFE, -0.10%  reported a 50% earnings drop. Royal Caribbean Cruises Ltd. RCL, -15.17%  reported earnings that nearly doubled, but the stock plunged 16% after the company provided a weak first-quarter outlook.

Don’t miss: These earnings suggest we may be headed for recession.

Deutsche Bank fixed income analysts said last week that given dollar strength, the selloff in stocks and the widening of credit spreads so far this year, their financial conditions index “is now firmly at levels consistent with recession,” and is likely to continue to deteriorate as global liquidity declines.


Based on their analysis of Treasury yield spreads, adjusted for current artificially low yields, they place the probability of a recession in the next 12 months at 46%. That’s well above the Federal Reserve’s model, which estimates a 4% probability of recession.

Also last week, Goldman Sachs gave investors a blueprint to follow if the economy suffered a recession in 2016, and Credit Suisse revisited lessons learned from past recessions

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