Wednesday, July 5, 2017

THURSDAY 7/6/17; President Trump in Poland then Germany for G20; France 30-Year Bond Auction Fails; German 10-Year Bund Yield Runs Above 0.56%; Global Bond Rout (Yields Rising); Challenger Job-Cut Report; ADP Employment Report; International Trade; US PMI Services Index; ISM Non-Mfg Index; Fed Vice Chairman Fischer Speaks

Australia’s ASX 200 futures are up +0.3% but Japan’s Nikkei Index futures are lower. Yum China earnings were reported in the States after the closing bell and in line with estimates but YUMC collapses -7% in late US trading.

US futures are mixed. S&P +2. Dow +13. Nasdaq -2. Euro 1.1349. Dollar/yen 113.19. Pound 1.2935. Aussie dollar 0.7602. Dollar/yuan 6.8019.

WTIC oil 45.56. Brent oil 47.79. Natty 2.86. Gold 1228. Silver 16.07. Copper 2.661.

US Treasury yields are; 2-year 1.40%, 5-year 1.91%, 10-year 2.32%, 30-year 2.85%. The 2-10 spread is 92 bips.

Global 10-year yields are; Brazil 10.50%, Mexico 6.81%, India 6.55%, Greece 5.26%, Portugal 2.93%, New Zealand 2.93%. Australia 2.64%, US 2.32%, South Korea 2.26%, Singapore 2.15%, Italy 2.14%, Canada 1.79%, Spain 1.55%, Hong Kong 1.44%, UK gilt 1.26%, France 0.81%, Netherlands 0.65%, German bund 0.47%, Japan 0.08%, Switzerland -0.08%.

The US and South Korea are at the same yield levels and their stock markets are at robust highs. Portugal and New Zealand yields are at the same level. Singapore and Italy are at the same yield level. The US-German 10-year yield spread is 185 bips. The German bund keeps threatening to break out above the top rail of the multi-month channel at 0.47%-0.50% and the US 10-year yield is trying to move above the 2.31-2.35% resistance level.

Ahead of the G20 Summit this week, countries and companies are making deals. Japan is setting up trade deals with Europe. Germany and China are consummating trade deals. Airbus wins a $22 billion order for new airplanes from China.

Aussie and Asia stocks begin trading mixed. Japan’s NIKK is down -0.1%. Topix -0.1%. The ASX 200 is up +0.1%. Aussie healthcare stocks are strong but financials weak. South Korea’s KOSPI gains +0.1%.

US futures slip negative. S&P -2. Dow -6. Nasdaq -15. Euro 1.1330. Dollar/yen 113.11. The dollar/yen pair slips lower reflecting a stronger yen which sends Japanese stocks lower. Pound 1.2922. Aussie dollar 0.7587. Dollar/yuan 6.8028.

President Trump says 90% of North Korea’s trade comes from China and Chinese exports to North Korea are rising strongly. Trump plans to ratchet up the pressure on China since the communists are obviously providing lip service to the West saying they are working to find a solution to the North Korea problem but in reality are enabling the rogue nation to develop missiles and nuclear warheads. North Korea receives its parts and supplies from China so the Beijing communists hold the key to the troubling and escalating situation in the Pacific rim.

Trading continues in Asia. NIKK -0.3%. Topix -0.1%. SPASX200 -0.3%. KOSPI -0.3%. Chinese stocks are trading marginally lower. SSEC -0.1%. CSI300 -0.2%. HSI -0.2%. Taiex -0.5%. Straits Times -0.2%. Taiwan leads Asia lower.

WTIC oil 45.32. Brent oil 47.98. Natty 2.86. Gold 1224. Silver 15.99. Copper 2.655.

Japan’s JGB 10-year yield is teasing 0.90% the highest level in five months. In Hong Kong, carmaker Geely trades down -0.4% on the news that Volvo (which it owns) is abandoning the internal combustion engine and going completely to electric and hybrid cars by 2019.

WTIC oil 45.70. Brent oil 48.37. USD 96.26. Dollar/yen 113.27. Aussie dollar 0.76. Coal exports are strong in Australia.

Asia stocks finish lower except for mainland China that ekes out a tiny gain. The NIKK ends the session down -0.4% to 19994 losing the 20K level. The ASX 200 finishes down -0.1% at 5759. The KOSPI prints a tiny loss, call it flat, at 2388. The SSEC finishes up +0.2% to 3213. The HSI ends down -0.2% at 25467. The India session continues with the Nifty up 40 points, +0.4%, to 9678.

At 3:00 AM EST (8 AM London; 9 AM Frankfurt), European indexes begin trading marginally lower. DAX -0.1%. CAC -0.4%. FTSE -0.1%. MI -0.4%. OMX -0.3%.

Commerzbank jumps +1.5% on news that Cerberus is considering buying a large stake in the German bank. DB gains +0.6% after Deutsche Bank announces plans to move employees from London to Frankfurt.
Reckitt Benckiser sinks -2.5% after cutting guidance due to cyber attacks. Associated British Foods jumps +4.6%. French caterer Sodexho Alliance chokes on a fried chicken leg coughing up -5.4%.

Euro 1.1353. Euro/yen 128.62. Dollar/yen 113.29. Pound 1.2935. Euro/pound 0.8777. Mexican peso 18.3978. The peso is weakening over the last couple days (Mexican peso currency pair number moves higher). Canadian dollar 1.2970. Dollar/yuan 6.8035. Indian rupee 64.7675. The Aussie dollar is at 0.7596 sticky at the 0.76 level.

WTIC oil gains +1.2% to 45.66 recovering one-fourth of yesterday’s losses. Brent oil is up +1.1% to 48.31. Natural gas gains +1% to 2.87. Gold loses 2 bucks to 1225. Silver is up +0.5% to 15.98. Copper is down marginally to 2.6570.

S&P -5. Dow -20. Nasdaq -14. Russell -3. VIX 11.26.

Treasury yields are steady overnight; 2-year 1.41%, 5-year 1.92%, 10-year 2.34%, 30-year 2.86%. The 2-10 spread is 93 bips. Global traders are watching the US 10-year yield and German 10-year bund to see if the yields are going to break out to the upside or collapse lower (yields at an inflection point). German bund 0.49%.

At 4 AM EST (10 AM Frankfurt), the DAX trades flat. The German 10-year bund yield is 0.49% continuing to tease the 0.50% breakout level that has held for several months.

During President Trump’s visit to Poland today, the European nation provides a missile contract to Raytheon. RTN should catch a bid perhaps with other defense stocks such as OA, LMT, NOC and GD in US trading. Raytheon is cranking up missile production, including the tomahawks, as the world becomes more dangerous each day.

At 4:30 AM EST (9:30 AM London; 10:30 AM Frankfurt), DAX +0.1%. CAC -0.2%. FTSE +0.1%. MIB +0.4%. IBEX -0.3%. PSI -0.1%.

S&P -2. Dow -7. Nasaq -13. Russell -2. VIX 11.21. India’s Nifty keeps moving higher up 53 points, +0.6%, to 9690 teasing the 9.7K level.

Euro 1.135. Dollar/yen 113.34. Pound 1.2939. Mexican peso 18.2458. Aussie dollar 0.7612. The US dollar index is at 96.21 moving through the 96.1-96.4 range since Monday. Dollar bulls win above 96.4 while dollar bears win under 96.1.

The bulls are pumping oil and copper higher to provide support for stock and futures markets. WTIC oil gains +1.5% to 45.81. Brent oil 48.46. Natty 2.88. Gold 1224. Silver 15.98. Copper is up +0.3% at 2.666.

Treasury yields are; 2-year 1.41%, 5-year 1.92%, 10-year 2.34%, 30-year 2.86%. German bund 0.491%. Japan 10-year yield is moving higher above 0.09%. UK gilt 1.28%. France 10-year yield 0.84%. The US-German 10-year yield spread is 185 bips.

President Trump and Poland President Andrzej Duda conduct a joint press conference in Warsaw. President Trump congratulates and commemorates the bravery of the Polish people in WW II and says the current challenges must be met with the same resolve. Trump says Poland is a great help in fighting the radical ISIS Muslims in Iraq and Syria. President Trump invites President Duda to the Whitehouse next year and the invitation is accepted.

President Trump says, “I will confront North Korea very strongly” due to their recent behavior. Trump is considering serious options against North Korea in the coming weeks and months but does not draw a line in the sand.

A US female reporter asks Trump about Russia’s potential meddling in the US presidential election last November. The president criticizes former President Obama for not doing anything about Russia potentially interfering in the US presidential election last Fall. Obama knew that Russia was attempting to impact the US election last summer months before the election and chose not to act on the information since the former president thought his fellow democrat, Hillary Clinton, would win the election.

Trump says that if Obama thought he would win the election rather than Clinton, Obama would have likely stepped in to address the situation. The president says Obama’s own staff says the former president “choked (should have acted against Russia but did not).” The female reporter ignorantly interrupts President Trump several times asking numerous questions when only two questions were permitted under the rules of the press conference. The reporter is quieted by Polish officials.

Trump says he seeks reciprocal trade agreements with all nations including Poland and the United States is becoming a “great exporter of energy.” The US is exporting LNG to Poland with the first shipment arriving last month. LNG is liquefied natural gas the liquid form of natty gas.

Natural gas is cooled to -260 degrees F (-162 C) to turn the gas into a liquid (extremely cold liquid). The liquid state takes up only 1/600th of the volume of the same amount of gas allowing for less expensive transportation. In Poland, import terminals accept the LNG and store it in special insulated tanks beefed up with high nickel-content steel. The LNG is then revaporized into gas form and piped to users. Poland now has another reliable energy source besides relying on natural gas from Russia.

At 5 AM EST (11 AM Frankfurt), the DAX is trading flat. S&P -3. VIX 11.23. WTIC 45.85. Brent 48.49. Copper 2.667. US 10-year yield 2.35%. The German bund prints 0.504% above the 0.50% level for the first time since January 2016. The US and German yields continue to tease a break out higher.

In France, a 30-year bond auction fails. The bid-to-cover ratio is 1.53 times versus 1.93 from the prior auction on 1/5/17. Bonds are shunned across Europe sending yields higher. Trading volumes are accelerating in the German bund as yield jumps higher. Investors are throwing bonds overboard and the move is impacting all bonds around the world in a domino effect.

The quiet morning ends as European indexes and US futures quickly deteriorate. S&P -7. Dow -41. Nasdaq -32. Russell -5. VIX 11.52. The Nifty is up 29 points to 9666.

DAX -0.6%. CAC -0.8%. FTSE -0.4%. MIB +0.2%. IBEX -0.7%. PSI -0.7%. SMI -0.8%. OMX -0.6%.

Euro 1.1365. Euro/yen 128.81. Dollar/yen 113.34. Pound 1.2946. Euro/pound 0.8779. Mexican peso 18.3501. Canadian dollar 1.2944. Dollar/yuan 6.8037. Indian rupee 64.77. Aussie dollar 0.76. USD slips to 96.16. The dollar sinks and the euro rises.

WTIC 45.68. Brent 48.35. Natty 2.87. Gold 1225. Silver 15.99. Copper 2.665.

Treasury yields are; 2-year 1.42%, 5-year 1.95%, 10-year 2.36%, 30-year 2.87%. The US 10-year yield prints above 2.36% for the first time since mid-May. The 2-10 spread widens to 94 bips representing a steeper yield curve. The German bund is jumping higher to 0.53% after poking up through the 0.47%-0.50% resistance area the highest yield (lower bund prices) in 17 months.

The Kremlin releases a statement refuting President Trump’s comments in Warsaw. Moscow says Russia did not meddle in the US presidential election. China President Xi arrives in Hamburg, Germany, ahead of the G20 Summit.

At 6:11 AM, US futures are dropping like a stone as volatility rises. S&P -10. Dow -61. Nasdaq -44. Russell -8. VIX 11.77. DAX -0.7%. CAC -1%. FTSE -0.7%.

The India trading session ends with the indexes slipping slightly into the close. The Nifty finishes up 37 points, +0.4%, to 9675. The BSE Sensex finishes up +0.4% at 31369.

In Europe, Banco Santander drops -0.7% on news that it wants to sell 51% of the recently acquired Banco Popular assets. The global financial engineering and central banker games continue.

Japan PM Abe is speaking in Brussels ahead of the G20. World leaders descend on European capitals. Trump is in Warsaw. Xi just landed in Hamburg.

At 6:45 AM, S&P -9. Dow -67. Nasdaq -42. Russell -10. VIX 11.81. DAX -0.9%. CAC -1.1%. FTSE -0.8%. MIB -0.2%. The US 10-year yield is above 2.36%. The German bund yield is at 0.54%. The France 10-year yield rises to 0.89%.

At 7 AM, US Mortgage Applications, delayed one day due to the holiday, are up +1.4% even as rates rise. Refinancing applications fall -0.4%. Mortgage loan applications are up +3%. The average 30-year fixed-rate mortgage rate is 4.20% the highest level in two months.

President Trump speaks in front of a crowd of over 20K people in Krasinski Square in Warsaw, Poland. The president’s speech is very well received. Politicians and dignitaries are in attendance for the event. The enthusiastic crowd is waving Polish and American flags. Trump enjoys the good feelings in Poland ahead of a couple expected difficult days at the G20.

The June Challenger Job-Cut Report is down -6% month-on-month to 31,105 job cuts. Companies are operating at bare bones staff levels optimistic that the economy will improve. The job cuts are down -19.3% compared to last year. The retail sector continues axing employees.

At 7:50 AM EST (1:50 PM Warsaw), President Trump is finishing his speech in Krasinski Square. S&P -11. Dow -85. Nasdaq -46. Russell -12 VIX 11.95.

DAX -1%. CAC -1.2%. FTSE -0.8%. MIB flat. IBEX -0.9%. PSI -0.9%.

Euro 1.1380. Dollar/yen 113.31. Pound 1.2952. Mexican peso 18.3414. Aussie dollar 0.7593. USD is at 96.09 slipping below the 96.1-96.4 sideways channel range since Monday. WTIC 45.81. Brent 48.45.

Treasury yields are rising; 2-year 1.43%, 5-year 1.96%, 10-year 2.38%, 30-year 2.89%. The 2-10 spread is 95 bips. German bund 0.56%. Japan 10-year yield 0.09%. UK gilt 1.32%. France 10-year yield 0.91%. The failed 30-year auction in France this morning creates a bond selloff. The money pulled from bonds, however, is not flowing into stocks. Investors are cashing-out and taking money out of the markets.

The ADP Employment Report is 158K jobs missing the 180K expected and well under the prior 253K. There is a lack of hiring in small businesses. The expectation for tomorrow’s important Monthly Jobs Report is 170K. Analysts may decrease this number slightly considering the weak ADP numbers.

S&P -10. VIX 12.08. USD 95.96. 10-year yield 2.37%.

COST gains +2.2% in the pre-market on strong sales numbers. F rises +0.2% after reporting strong China auto sales. TSLA drops -3.4% adding to yesterday’s -7.4% loss as crash tests for the Model S are not as positive as previously reported. Tesla crashes -11% over the last 22 hours.

YUMC is down -5.5% after last evening’s earnings. MLHR +4.5%. PSMT crashes -9%. MRK -1.1%. CELG drops -0.6% on news that Celgene is buying Chinese-based BeiGene. BGNE catapults +14% higher.

XOM gains +0.2% and CVX is down -0.4% after RBC downgrades the two integrated oil giants. The Federal Reserve provides an extra year of time for insurers AIG and PRU to submit living wills which explain how the financial companies will handle adverse market conditions. Of course they do. The central bankers are the market. What happens if a financial crisis occurs within the next year?

Jobless Claims are up 4K to 248K above the 243K expected. International Trade data reports a trade balance gap at $46.5 billion. USD 95.96.

At 9:30 AM EST, US stocks begin trading falling like a rock as the futures indicate. The S&P 500 loses 10 points, -0.4%, to 2422. The Dow Jones Industrials are down 58 points, -0.3%, to 21421. The Nasdaq Composite loses 45 points, -0.7%, to 6106. The Russell 2000 sinks 8 points, -0.6%, to 1412. VIX 11.92. USD 95.99. 10-year yield 2.36%.

DAX -0.8%. CAC -0.8%. FTSE -0.5%. MIB flat. IBEX -0.8%. PSI -1.1%. SMI -1.1%. OMX -0.8%. Portugal and Switzerland lead lower. German 10-year bund yield is up to 0.55%. UK gilt 1.30%. France 10-year yield 0.90%.

Euro 1.1385. Euro/yen 128.86. Dollar/yen 113.19. Pound 1.2943. Euro/pound 0.8796. Indian rupee 64.7777. Mexican peso 18.315. Canadian dollar 1.2933. Dollar/yuan 6.8007. USD 95.98.

WTIC oil is down -1.7% to 45.90. Brent oil sinks -1.6% to 48.57. Natural gas 2.87. Gold 1225. Silver 15.98. Copper 2.66.

Treasury yields are; 2-year 1.41%, 5-year 1.94%, 10-year 2.37%, 30-year 2.90%. In only seven sessions, the 10-year yield, TNX, rises from 2.12% to 2.37% a huge 25 basis point move. The 2-10 spread is up to 96 bips. The banks, however, are trading flattish despite the steepening yield curve. XLF flat. KRE -0.3%. JPM flat. BAC +0.2%. C +0.1%. WFC +0.666%.

Global yields are on the rise representing lower note and bond prices. Traders believe that the global central bankers are beginning to lessen the accommodative monetary policies (but this may or may not actually occur going forward). The German bund yield has doubled from0.26% a couple weeks ago. German bund yield 0.56%. Once the yield took out the multi-month resistance at 0.47%-0.50%, the bund yield pops another 6 basis points.

Chips lead lower. SOX -0.7%. XLK -0.6%. IBB -0.5%. XLY -0.5%. XHB -0.4%. XLB -0.3%. XRT -0.3%. XLV -0.3%. XLP -0.2%. XLU -0.2%. XLI -0.2%.IYT -0.2%.

LB crashes -11%. Quick, run out and buy some skimpy lingerie for your honey at Victoria’s Secret to help L Brands out. Liberty Interactive buys the remaining shares of the Home Shopping Network that it does not own. QVCA +0.9%. HSNI +29.3%. Online and television shopping is big business these days. AMZN -1%.

At 9:40 AM EST, SPX 2419. INDU loses 100 points to 21378. COMPQ 6098. RUT 1411. Decliners are outpacing advancers 4 to 1. Tech stocks lead lower. XLK -1%. Banks slip lower despite the steeper yield curve. Bank earnings for Q2 are on tap beginning next week. XLF -0.3%. Consumer discretionary stocks are slapped lower. XLY -0.666%.

VIX is at 12.22 moving towards the important 200-day MA at 12.44. The stock market will fall apart if the VIX moves above 12.44. WTIC 45.98. Brent 48.62.

CAT and NKE are the only two Dow components trading higher (marginally). GE collapses -1.3% the biggest loser on the Dow. General Electric is a piece of garbage this year which is concerning since it is a stalwart industrial company. JPM downgrades GE.

The PMI Services Index is 54.2 above the 53.0 expected and prior 53.6. New Orders and Employment components are higher. President Trump departs from Poland and lands in Hamburg for the G20 Summit.

At 9:50 AM, the SPX sinks 15 points to 2417. The Dow drops 117 points to 21361. COMPQ 6096. RUT 1409. VIX 12.46. The VIX sneaks a hair above the 200-day MA at 12.44 which signals extreme trouble for the stock market if it holds. The VIX slips lower to 12.36.

At 10 AM, the ISM Non-Mfg Index is 57.4 versus the 56.5 expected a nice beat printing near the highest numbers for this year. USD 95.96. 10-year yield 2.38%.

At 10:04 AM, the VIX moves above its 200-day MA at 12.44. Stocks sink lower. This battle for the 200-day MA may continue all day long. The stock market will cascade lower if the VIX remains above 12.44. At 10:17 AM, the VIX falls back below 12.44.

SPX 2416. INDU 21372. COMPQ 6090. RUT 1406. VIX 12.34.

Fed’s Powell is concerned about the government-sponsored enterprises (GSE’s) putting taxpayers at risk. Powell says further reforms are needed for the unsustainable government-backed housing finance system. Powell highlights the concentration of mortgages in Freddie Mac and Fannie Mae. Powell says reforms are needed to create stability in the industry.

At 11 AM EST, delayed one day due to the holiday this week, the EIA Oil Inventories are a big drawdown of 6.3 million barrels. This should pop oil prices. Gasoline and Distillates are also draw downs. Oil leaps 60 cents higher to 46.30 on the news. Natural gas inventories are delayed one day due to the holiday and will be released tomorrow.

European indexes end the session lower sans Italy. The DAX loses -0.6% to 12381. France’s CAC drops -0.5% to 5152. The FTSE finishes down -0.4% to 7337. The MIB gains +0.7% to 21084. The IBEX drops -0.2% to 10498. The PSI finishes down -0.666% to 5169.

US stocks trend higher from 10:00 AM to 1:18 PM then the bottom begins to fall out. The SPX is at 2424 and quickly rolls over to the downside as television screens are showing riots in Germany at the G20 Summit.

In Hamburg, anti-capitalist protestors clash with police. Bottles and rocks are thrown at police. The riot police move in with water cannons and deploy flash-bank grenades and tear gas. Thousands are in the streets demonstrating. People are running. Part of a building is set on fire. Smoke billows across the tv screens as police beat protestors with batons. The violent rioters are mainly anti-government anarchists protesting the G20. Some are protesting against President Trump.

The G20 leaders, and especially Chancellor Merkel, are off to a shaky start at the summit. Merkel is up for election in September and does not want to deal with riots in the streets. The huddled masses around the world are fighting back against the elite privileged class that has raped the global financial system for their own benefit. Social unrest will increase around the world especially when the recession hits in the weeks and months ahead. The tense drama in the streets of Hamburg continues well into the evening.

At 1:42 PM, the S&P 500 is at 2417. At 2:14 PM, the SPX is at 2414.14 testing the critical 50-day MA at 2414.

At 2:42 PM, the SPX is at 2412. The SPX drops 12 points in 100 minutes. TSLA drives -5.8% lower. Beads of sweat appear on CEO Elon Musk’s forehead as a meme develops that Tesla is a bubble stock.

Amazon and Dish discuss a partnership. AMZN -0.6%. DISH +0.9%. QVCA -2%. YUMC crashes -15%. UAA sinks -7%. Biotech stocks are ill. XBI -1.9%. GILD -2%. BIIB -2.1%. IBB -1.666%.

As rates rise, the telecom sector sinks -2%. T -1.2%. VZ -1.3%. Ditto real estate and REIT’s. XLRE drops -1.8%. XHB -1.4%. General Electric is beaten severely. GE -3.9%. AAPL -0.9%.

At 2:49 PM, the SPX is down 18 points, -0.8%, to 2414. The INDU loses 125 points, -0.6%, to 21353. The COMPQ is down 49 points, -0.8%, to 6102. The RUT is down 15 points, -1%, to 1405. VIX 12.56.

Euro 1.1422. Euro/yen 129.33. The euro pops and dollar drops. USD 95.81. Dollar/yen 113.23. Pound 1.2974. Euro/pound 0.8804. Indian rupee 64.7775. Mexican peso 18.2707. Canadian dollar 1.2954. Dollar/yuan 6.8015.

WTIC oil is up +0.6% at 45.39. Brent oil is up +0.3% to 47.95. Natural gas is up +1.666% to 2.89. Gold is down 3 bucks to 1224. Silver is down -0.6% to 15.99. Copper 2.6605.

Treasury yields are; 2-year 1.40%, 5-year 1.94%, 10-year 2.37%, 30-year 2.90%.

At 3 PM, SPX 2410. The S&P 500 loses the 50-day MA at 2414 an important development. INDU 21326. COMPQ 6089. Telecom stocks are beaten like a rented mule. T -2.1%. VZ -2.2%.

Bond guru Jeffrey Gundlach says the 10-year yield will move towards 3% into bond bear territory. Gundlach takes credit for calling the bottom in bonds last summer and expects lots more upside in yields going forward.

ALXN tanks -5% on news that Alexion is under investigation by the HHS inspector general. There may be nefarious activity with their sales practices. GILD -2.3%. MRK -1.666%. BMY -2%. The banks roll over as the day moves along. JPM -0.1%. MS -0.2%. BAC -0.666%.

Berkshire Hathaway (billionaire investor Warren Buffett) is very close to a deal to buy bankrupt Oncor Electric. Texas regulators do not permit NextEra Energy to buy Oncor. It looks like Texas wants to lay out the red carpet for Buffett. BRKA -0.8%. NEE +0.6%.

OKE +3.6%. MNST =1.7%. AAL +1.5%. UAL +1.5%. AVGO +1.5%. PCAR +1.2%. DISH +1%.

LB -14.1%. MNK -4.4%. TEVA -2.9%. TSLA -5.6%. STX -4.4%.ALXN -3.2%. AKAM -3.1%. TSCO -2.8%.  NCR -4.1%. Lumber king WY is whacked -3.5%. INTC -2.1%. DIS -1.4%. AXP -1.4%.

At 3:35 PM, stocks sink to the lows. The SPX is down 23 points, -0.9%, to 2409. The Dow sinks 155 points, -0.7%, to 21323. The Nasdaq Composite loses 64 points, -1%, to 6087. The Russell 2000 sinks -1.4% to 1400. VIX 12.92. Energy stocks sink. XLE -1.1%. XOM -0.9%. NBR -3.5%.

Euro 1.1421. Euro/yen 129.25. Dollar/yen 113.17. Pound 1.2975. Euro/pound 0.8802. Indian rupee 64.7775. Mexican peso 18.2994. Canadian dollar 1.2966. Dollar/yuan 6.8015. USD 95.82. WTIC oil 45.23. Brent oil 47.84.

Treasury yields are; 2-year 1.40%, 5-year 1.93%, 10-year 2.36%, 30-year 2.90%. The 2-10 spread is 96 basis points. German bund 0.57%. Japan 10-year yield 0.09%. UK gilt 1.32%. France 10-year yield 0.92%.

The SPX finishes the session down 23 big points, -0.9%, to 2410 under the 50-day MA. The Dow sinks 158 points, -0.7%, to 21320 under its 20-day MA at 21371. The Dow was down 173 points at the lows. The Nasdaq Composite finishes down 61 points, -1%, to 6089. The RUT drops 19 points, -1.4%, to 1401. The small caps are bludgeoned.

The VIX finishes at 12.54 above the 200-day MA at 12.44 a bigtime negative market signal. Very simply, stocks will collapse lower if the VIX remains above 12.44 but stocks will rally and begin a relief rally if the VIX slips back under 12.44.

After the closing bell, QCOM sues AAPL over patent infringement. QCOM briefly pops +0.7%. AAPL -0.1%. These patent cases are a long ongoing battle between Qualcomm and Apple. Qualcomm is asking the courts to ban imports of iPhones.

DISH +2%. CPB gains +2% on news that Campbell Soup is buying Pacific Foods of Oregon. Staying in the food arena, Mondelez lowers guidance blaming a recent cyber attack so MDLZ is whacked -1.2%.

Analysts, money managers and pundits parade across business television screens in the evening telling viewers to “buy the dip.” The television talking heads say the stock market selloff is no big deal and stocks will recover.

Federal Reserve Vice Chairman Fischer says the US government must take measures with fiscal policy to boost the lackluster productivity growth. Fischer says business investment is needed to spur innovation and employee training and education will also increase productivity. Fischer does not directly comment on monetary policy.

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