US averages close down fractionally (SPY -0.1%), DOW down 20 points, loosing grip on 18K level and WTI crude trading pits settle in the mid 50's. Banks led Wall Street lower today, mirroring global stocks, as oil prices fell and bond markets rallied amid demand for safe haven assets. Short-term indicators have turned bearish and the medium ones reflect a possible market correction soon.
WASHINGTON (Reuters) - The number of Americans filing for unemployment benefits unexpectedly fell last week, pointing to sustained strength in the labor market despite a sharp slowdown in hiring last month.
(Reuters) - Valeant Pharmaceuticals International Inc is considering the sale of Egyptian drugmaker Amoun Pharmaceutical Co to accelerate its debt-reduction plan, Bloomberg reported, citing people with knowledge of the matter.
WASHINGTON (Reuters) - A bill to slash funding for the U.S. Securities and Exchange Commission, Internal Revenue Service and other financial regulators passed a key committee in the U.S. House of Representatives on Thursday after a long partisan fight.
Moments ago TSLA shares slid following headlines from a Reuters report that the US Auto Safety Agency is probing an issue involving Tesla suspensions:
U.S. AUTO SAFETY AGENCY LOOKING AT TESLA MODEL S: REUTERS
TESLA MODEL S PROBE FOCUSED ON REPORTED SUSPENSION ISSUE: RTRS
What's going on here?
As it turns out, and as reported extensively on the Daily Kanban website overnight, not only has there been a chronic issue involving the safety Tesla Model S suspensions, but there are allegations that Elon Musk's company has been actively trying to cover these up.
As the website notes, "where Tesla crosses the line here is not the "crime" itself, but the coverup. If Tesla used a TSB rather than a recall to fix a safety problem, if it has an institutional bias against ordering recalls and if it uses NDAs as a matter of course to prevent owners from reporting defects, this could become the biggest auto safety scandal since the GM ignition switch affair. That's a lot of "ifs," but thus far the evidence indicates that these are very real possibilities. Watch this space for further developments in this troubling story."
Here is the full report from the Daily Kanban:
Tesla Suspension Breakage: It's Not The Crime, It's The Coverup
For several months now, reports have circulated in comment sections and forum threads about a possible defect in Tesla's vehicles that may cause suspension control arms to break. Many of those r ...
One month after Goldman strategists downgraded equities to neutral on growth and valuation concerns, the firm has turned up the heat on the bearish case with a report by Christian Mueller-Glissmann in which he says that equity drawdown risk "appears elevated" with S&P 500 trading near record high, valuations stretched, lackluster economic growth and yield investors being "forced up the risk curve to equities."
As Goldman notes,
"one large drawdown can quickly erase returns that were accumulated over several years."
"since the 1950s most equity markets had several large drawdowns of more than 20%, which have taken several years to recover from. For example in the 1970s the FTSE All-Share had an 80% drawdown in real terms and the DAX declined 69% during the Tech Bubble. One of the largest equity drawdowns across markets was during the GFC, when most global equity markets lost around half their value. And not to forget, the TOPIX has still not recovered from the large drawdowns of the late1980s/early 1990s."
Goldman also points out that large drawdowns are not only relatively frequent, but becoming more global in nature.
Spain's political parties are set to begin campaigning on Friday ahead of Parliamentary elections on June 26. Investors hope that the election will result in a clear-cut majority for Spain's People's Party, the ruling conservative party led by Prime Minister Mariano Rajoy. But recent polls suggest its current gridlock will persist.
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