More Slippage Ahead Of Earnings Season; Europe Retreats On Mixed Data

[Chart courtesy of]

US equities extended modest losses into a second straight session as investors braced for the start of corporate earnings season. I did not know that two down days in a row were still permitted in this centrally planned economy, but I stand to be corrected…

In economic news, US consumers expanded their debt to $16.1 billion in November, raising credit at an annual clip of seven percent, a Federal Reserve report showed in Washington. Credit had grown by $14.2 billion in October.

Separately, the small business optimism index edged higher in December, the National Federation of Independent Business said Tuesday. The latest reading is still the second-worst since March 2010.

The Dow Jones Industrial Average (DJIA) slipped 55 points and the index was evenly matched with 15 of its 30 components finishing the day lower.

The S&P 500 Index (SPX) shed 5 points with telecommunications pacing losses and materials gaining the most among its 10 business groups.

Treasuries rose for a third session, pushing yields down from their highest since May as investors moved fast to take advantage of last week’s price fall amid concerns that corporate profits may show economic activity has dropped below forecast supporting my long-held view that the global slowdown is here to stay.

The euro turned lower Tuesday, shedding modest gains after Japanese Finance Minister said Tokyo would buy bonds issued by the Eurozone’s emergency bailout fund, the ESM.

Meanwhile, most European stocks posted small losses after German exports showed signs of easing, and investors turned their focus on the unofficial beginning of the US fourth-quarter earnings season.

Separately, German exports slipped 3.4 percent in November, the steepest drop in more than a year, beating economists’ estimate of a 0.5 percent decline.

The DAX 30 index shed 0.5 percent in Frankfurt, dragged down by a 1.2 percent loss in Munich Reinsurance. Bank of America cut the reinsurer’s rating to under-perform from neutral.

Our Trend Tracking Indexes (TTIs) changed only slightly with the Domstic TTI moving to +2.29% while the International TTI slipped to +8.86%.

About Ulli Niemann

Ulli Niemann is the publisher of "The ETF Bully" and is a Registered Investment Advisor. Learn more
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