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20Jul2016 Market Close: US Markets Close In The Green, Crude And The US Dollar Go Nowhere And Investors See Bears In The Financial Forest

Written by Gary

Wall Street gained today, sending the SP 500 and Dow to new historic records, as Microsoft's strong results boosted the indexes and marked the latest sign that U.S. corporate earnings season may be less dour than feared. The DOW closed up +0.2%, SP 500 at + 0.4% and the $NDX up +1.2%. After some serious gyrations WTI crude closed exactly where it closed yesterday.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Microsoft propels Wall Street to new record highs

(Reuters) - Wall Street gained on Wednesday, sending the S&P 500 and Dow industrials to fresh records, as Microsoft's strong results boosted the indexes and marked the latest sign that U.S. corporate earnings season may be less dour than feared.

AB InBev says wins U.S. Antitrust Approval for SABMiller Deal

(Reuters) - The world's top two brewers, Anheuser-Busch InBev and SABMiller , have won U.S. antitrust approval to merge, Ab InBev said on Wednesday.

U.S. sues to seize $1 billion in assets tied to Malaysian state fund

WASHINGTON (Reuters) - U.S. prosecutors sued on Wednesday to seize more than $1 billion in assets they said were tied to an international scheme to launder money stolen from the Malaysian state fund 1MDB, which was overseen by Prime Minister Najib Razak and used to finance the Hollywood film "Wolf of Wall Street" and to buy property and famous works of art.

Pokemon Go seen making billions for Apple

(Reuters) - Apple Inc stands to rake in $3 billion in revenue from the Pokemon Go craze in the next one to two years as gamers buy "PokeCoins" from its app store, brokerage Needham & Co said.

Morgan Stanley hits CEO's bond trading target, surprising analysts

(Reuters) - Morgan Stanley , which has struggled for years to improve its bond-trading business, may finally be turning the corner.

Goldman Sachs under spotlight in Malaysian fund scandal

NEW YORK (Reuters) - Goldman Sachs' work with Malaysian sovereign wealth fund 1MDB is under the spotlight over U.S. government allegations that billions of dollars were diverted for the personal use of officials in the southeast Asian country.

Wal-Mart identifies eight chemicals to be removed from products

(Reuters) - Wal-Mart Stores Inc said on Wednesday it was pushing suppliers to remove eight hazardous chemicals from products including household cleaning, personal care and beauty items.

Daimler AG, Ferrari selling some new vehicles with faulty air bags: U.S. Senate report

WASHINGTON (Reuters) - Daimler AG's Mercedes-Benz and Daimler Vans units and Ferrari NV are among a small group of automakers selling some new vehicles with faulty Takata airbags that will be subject to recalls by the end of 2018, a U.S. Senate report said on Wednesday.

U.S. charges two HSBC executives over forex-related scheme

NEW YORK (Reuters) - A senior HSBC Holdings Plc manager has been arrested and charged alongside a former foreign exchange executive with engaging in a scheme to front-run a $3.5 billion transaction by one of the bank's clients, U.S. prosecutors said on Wednesday.

Another Bad Month For Truck Shipping

Submitted by Michael Shedlock via MishTalk.com,

Truck shipments were up in June from May. So were expenditures.

That sounds pretty good, but it really isn't. Shipments are normally up in June and the Cass Freight Index report from which I get numbers is not seasonally adjusted.

The best way to compare June is to prior years, and that picture isn't pretty.

Cass Freight Index

Cass 2016-07A

Shipments

Cass 2016-07B

Expenditures

Cass 2016-07C

Truck shipments and expenditures are below the June level of 2015, 2014, and 2013.

Cass notes

"The June freight shipments index climbed 1.7 percent. This was 4.3 ...

Milo Yiannopoulos Responds To Twitter Ban

As noted earlier, Twitter caused a stir overnight among the political commentariat when late yesterday it reported that it had permanently banned conservative commentator Milo Yiannopoulos from using its service.

Twitter said in a statement Tuesday that it had seen an "uptick" in the number of accounts violating its abuse and harassment policies over the past 48 hours, noting it had enforced its policies either by issuing warnings or permanently suspending users. "We know many people believe we have not done enough to curb this type of behavior on Twitter. We agree," Twitter said in the statement. "We are continuing to invest heavily in improving our tools and enforcement systems to better allow us to identify and take faster action on abuse as it's happening and prevent repeat offenders."

Twitter continued: "People should be able to express diverse opinions and beliefs on Twitter. But no one deserves to be subjected to targeted abuse online, and our rules prohibit inciting or engaging in the targeted abuse or harassment of others. We have been in the process of reviewing our hateful conduct policy to prohibit additional types of abusive behavior and allow more types of reporting, with the goal of reducing the burden on the person being targeted," the official said. "We'll provide more details on those changes in the coming weeks."

Moments ago, in his first official interview since the ban, Milo spoke to CNBC's Michelle Caruso-Cabrera to give his take on what happened.

"The company is entitled to do what it likes. The problem is it's lying to users. Jack Dorsey says that twitter is the place you go if you want to express yourself. That's a lie. There is a systematic campaign against conse ...

VIX Hits 11 Handle - Crashes At Fastest Pace In History

In the 17 trading days since Brexit, VIX has fallen 15 of them plunging from almost 27 immediately after the British vote to 11.4 lows this morning - the lowest since August 2014.

This collapse is the fastest in the 26 year history of VIX.

Leaving the VIX term structure at its 3rd steepest in history (i.e. spot complacency relative to out months)...

The last time this happened, the S&P fell 11% before Bernanke swooped in a J-Hole with QE2.

Charts: Bloomberg

The ECB May Run Out Of German Bonds To Buy In Just A Few Months: Here Is How It Can Fix This

With the monthly ECB governing council meeting and press conference due on Thursday morning, many market participants have turned their attention to a major problem we flagged nearly two years ago which has re-emerged as a result of the global collapse in yields: Mario Draghi may run out of eligible German debt to buy as soon as a few months from now, which has prompted speculation of what the ECB can do to address this issue.

As UBS' Nishay Patel writes, market participants have questioned whether the ECB will be able to source enough German bonds to help meet the monthly target of 80bn of asset purchases due to the eligibility criteria applied on bond purchases. "Under the current rules, we estimate the Eurosystem may hit holding limits of German debt within the next 6 months. In all likelihood this could prompt the ECB to change the eligibility criteria on asset purchases."

This contrasts sharply with what Mario Draghi said last month when asked about whether the purchasing program was facing roadblocks, stressing that he saw "ample liquidity." He said the program "continues to proceed smoothly" and has enough "flexibility" to deal with any limits that might come up.

That appears to no longer be the case.

As a reminder, the problem facing the ECB is that the securities that yield less than the ECB's minus 0.4% deposit rate have grown to more than 60% based on a $1.13 trillion Bloomberg German bond index. That means they're ineligible for the purchases (see figure 3). And as Bloomberg adds, "analysts from UBS Group AG and SEB AB are estimating the central bank may run out of German targets within six months, and as soon as August, unless the rules are broadened."

The full eligibility criteria is as follows:

"for a bond to be eligible for purchase in the PSPP, it ...

Why the Price Is Right for Drug Companies

Investors should still be able to count on big pharmaceutical companies' pricing power.

Short Sellers Are Craving Chipotle as Shares Slump

Short interest in Chipotle hit its highest level since December 2009 ahead of second-quarter results.

Pimco Finds a Good Man Manager for Tough Task

Pimco has poached Manny Roman, a talented chief executive from the world's biggest listed hedge-fund manager, Man Group of the U.K.

Capitol Report: Trump says he never personally asked Kasich to be his running mate

Donald Trump said Wednesday he never personally made an offer to Ohio governor John Kasich to be his vice president.

Apple stands to make billions from Pokémon Go

Apple could make as much as $3 billion in revenue from Pokémon Go over the next two years, analyst predicts.

Market Extra: 3 charts show Dow, S&P 500 overheating—and Wall Street is freaking out

A number of analysts and strategists over the past few days are cautioning that worrisome trends are starting to crop up as equities take the elevator higher, pointing to a market that is getting overheated.

Summary of Economic Releases this Week

Real Time Economic Calendar provided by Investing.com.

Earnings Summary for Today

Earnings Calendar provided by Investing.com.

leading Stock Positions

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Current Commodity Prices


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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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