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19Jul2016 Pre-Market Commentary: Wall Street Fractionally Lower This Morning, The US Dollar Shoots Higher Along With Bond Prices As Rally Fatigue Sets In

Written by Gary

US stock future indexes are fractionally lower (SPY -0.2%), government bond prices higher and the US dollar sharply higher as U.S. equity futures ease from record levels. WTI crude still in the high 45's, Housing Starts came in at an annual rate that topped estimates and Building permits, which are a sign of future activity, also came in higher.


Here is the current market situation from CNN Money

What Is Moving the Markets

Here are the headlines moving the markets.

Global stocks slip as rally fatigue sets in

LONDON (Reuters) - World shares dipped for only the second time in nine days on Tuesday, sapped by a drop in oil prices and data that showed Britain's vote to quit the European Union dented German business confidence.

Goldman's profit jumps as bond trading revenue rises

(Reuters) - Goldman Sachs Group Inc's quarterly profit jumped 78 percent, handily beating market expectations, as the Wall Street bank earned more from bond trading and its expenses fell.

Lockheed Martin raises forecast as quarterly revenue beats

(Reuters) - Lockheed Martin Corp , Pentagon's No. 1 weapons supplier, reported better-than-expected quarterly revenue, as the company benefited from the acquisition of helicopter maker Sikorsky Aircraft and increased sales of its F-35 fighter jet.

J&J raises 2016 forecast; shares on track for record high

(Reuters) - Johnson & Johnson raised its 2016 sales and earnings forecast and reported quarterly results that beat Wall Street estimates, helped by strength in its prescription drugs business.

UnitedHealth profit beats on Optum unit strength

(Reuters) - UnitedHealth Group Inc , the largest U.S. health insurer, reported a better-than-expected quarterly profit due to strength in its pharmacy benefit management business, and technology and consulting divisions.

Truckmaker Volvo beats earnings forecast, sees U.S. market weaken

STOCKHOLM (Reuters) - Swedish truckmaker Volvo reported better than expected second-quarter earnings on Tuesday as cost cuts and rising European sales helped fortify it against slumping U.S. demand for commercial vehicles.

Henderson calls for investor vote on Bayer's takeover of Monsanto

LONDON (Reuters) - Henderson Global Investors, a minority investor in Bayer has demanded a vote on the firm's $64 billion-plus proposed takeover of Monsanto, which it said threatened the long-term strength of the German chemicals group.

EU fines truckmakers record $3.2 billion over 14-year cartel

BRUSSELS - Daimler , Paccar and two other truckmakers were fined a record 2.9 billion euros ($3.2 bln) by EU antitrust regulators on Tuesday for taking part in a 14-year cartel.

Nintendo's market cap doubles to $42 billion since Pokemon GO launch

TOKYO (Reuters) - Shares of Japan's Nintendo Co soared another 14 percent on Tuesday, more than doubling the firm's market capitalization to 4.5 trillion yen ($42.5 billion) in just seven sessions since the mobile game Pokemon GO was launched in the United States.

Trading The Chaos: One Hedge Fund Manager's Strategy

By Chris at www.CapitalistExploits.at

Today I have for you a recorded conversation with Harris Kupperman (Kuppy), a friend of mine who manages Praetorian Capital, a Florida-based hedge fund. Kuppy is one of a clutch of guys who I call on to stress test my views and vice versa. Sometimes we disagree, though more often than not we don't.

Either way, Kuppy's views are always, always valuable to me.

In this conversation we discuss, among other things:


  • What Kuppy bought the weekend after Brexit.

    A trade you can still put on to profit from the Brexit fallout.

    Kuppy's current views on emerging markets.

    What asset Kuppy thinks is "gold on acid".

    How he's positioned and has been playing repeated crisis events.

    Harris Kupperman(click on the image to listen to the podcast)

    In addition to the above, I've got some thoughts on the failed coup in T ...

This 'Market' Discounts Nothing Except Monetary Cocaine

Submitted by David Stockman via Contra Corner blog,

Another one of the Hedge Fund high rollers, Marc Lasry of Avenue Capital, recently confessed on bubblevision that 2200 on the S&P 500 doesn't make sense to him, either.

But his reasoning went right to the crux of the bubble implosion lurking just ahead. According to Lasry, the market may be discounting a "stronger-than-expected" economic rebound and thus only appears to be ahead of itself:

The U.S. stock market, making a string of recent record highs, "doesn't make much sense," distressed debt specialist Marc Lasry told CNBC Monday, sharing the view of fellow billionaire investment titan Larry Fink.

"Everyone is a bit surprised," said Lasry, co-founder of Avenue Capital, which has $11.3 billion of assets under management. "But the market is telling us what's going to happen next year [or] the next two years."

While questioning the advance in stocks, Lasry said on "Squawk Box" the market may be signaling a stronger-than-expected U.S. economy, with a growth rate somewhere in the 2 to 3 percent range...."

Ah, the hoary myth of a market that processes information, discovers price and discounts the future. Apparently, no one told Lasry what the bereavers for free markets and honest money had long ago confessed. To wit, ...

Goldman Beats On Rebound In FICC, Prop Trading As Headcount, Comp Slashed

After last quarter's brutal results, which saw the worst revenue for Goldman Sachs since Q4 2011, the question about Goldman's Q2 earnings report was not if it would beat but by how much. Moments ago we got the answer when the company reported Q2 EPS of $3.72, handily beating consensus estimates of $2.68, but down 21% from last year's $4.75 (ex-charges) EPS. The reason for the rebound was stronger top-line growth which at $7.93 billion, was the best print in one year, if still down 12.5% from a year ago.

The top-line rebound was not uniform however, with revenues from Equities declining once again, down to $1.754 billion from last quarter's 1.789 billion, while Investment management was roughly flat, at $1.353 billion. The upside surprise came from investment banking which rose from $1.46 billion to $1.79 billion, as well as FICC, which at $1.93 billion was above the consensus estimate of $1.8 billion, and higher than both Q1 2016 ($1.66BN) and the year-prior print of $1.6 billion. The final wildcard, Goldman's prop trading group, Investing and Lending, surged to $1.1 billion from just $87 million last quarter if down substantially from the $1.8 billion a year ago.

But while the revenue side was stronger than expected, if still double-digits lower than a year ago, what was perhaps more interesting was the slashing of overhead. According to Goldman, in Q2 it had only 34,800 full time employees, a whopping - for the bank - cut of 1,700 from 36,500 a quarter ago, the biggest monthly drop in employment since the crisis.

Finally, confirming Goldman's dedication to cost-cutting was the flattish compensation expense, which at $3.3 billion in the quarter, meant that Goldman's ...

How Baidu's Video Deal Shortchanges Shareholders

Neither Baidu nor the management team leading the iQiyi buyout has given a compelling reason why shareholders should want the deal to go ahead at this price.

Bank of America Is a Low-Rate Loser

Bank of America's investments make it especially vulnerable to falling rates.

Why Last Quarter Was a Horror Show for Netflix

Netflix's struggle to add subscribers amid a price increase raises questions about its ability to grow into its lofty multiple.

June 2016 Import Sea Container Count Trends Are Conflicting

Written by Steven Hansen

The rolling averages are now decelerating for exports but accelerating for imports. Under normal situations, this is signalling an improving USA economy with a slowing global economy.

Market Extra: Pound's Brexit-driven slump sets U.K. companies up for an M&A wave

SoftBank's deal for ARM Holdings may well be the starting gun for a rush of U.K. takeovers, analysts suggest, as the Brexit-battered pound gives prospective buyers a reason to act now.

Economic Report: Housing starts rise 4.8% to annual 1.19 million pace in June

Builders broke ground on more homes in June but construction remains well below pre-recession levels.

Mark Hulbert: Investors should get ready for U.S. stocks to slide‚Äč

Sentiment conditions in the stock market now are just as unfavorable as they were favorable only a couple of weeks ago, writes Mark Hulbert.

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To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

gary@econintersect.com

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