Markets Face New Headwinds

After two weeks and more of furious rallies, markets now face old and new serious and diverse challenges.

Stocks were hit today by lower earnings from Nike (NKE) and the prospect of weak earnings ahead commencing next month.

A stronger dollar hit commodities, especially in energy markets. Crude oil inventories jumped to 9.4 million bbls compared with prior supplies of only 1.3 million bbls. Further, EIA stated that any oil production freeze, and as we’ve been saying, “would have no impact on price levels”.

Geopolitical risks have soared given Belgium terror attacks. Given Paris attacks previously bulls now take into consideration the prospect of more attacks, especially after authorities revealed a network of nearly 400 operators in Europe. Further, it isn’t just any coincidence that American Airlines was the target of Belgium at the company’s area. Therefore, these facts have investors and authorities alike now fearing a long period of more and longer lasting campaign strikes. War is now at hand and Europe and other countries (including the USA) are now paying the price for loose emigration policies that beget a Trojan Horse of terrorists.  

Below is the heat map from Finviz reflecting those ETF market sectors moving higher (green) and falling (red). Dependent on the day (green) may mean leveraged inverse or leveraged short (red).