US stock future indexes pointed to a higher open (SPY +0.4%) as market investors awaited corporate earnings this week with eyes also on Friday's publication of the third quarter U.S. gross domestic product. The US dollar hovers near 8-month highs on rate hike expectations, while crude has slipped lower. Gold Shot Up to 1271 this morning.
Here is the current market situation from CNN Money
European markets are higher today with shares in Germany leading the region. The DAX is up 0.90% while France's CAC 40 is up 0.90% and London's FTSE 100 is up 0.03%.
(Reuters) - TD Ameritrade Holding Corp said on Monday it and Toronto-Dominion Bank would buy privately held Scottrade Financial Services Inc [SCTRD.UL] in a deal valued at $4 billion, combining two of the biggest U.S. discount brokerages.
BRUSSELS (Reuters) - Prime Minister Charles Michel said he had told European Council President Donald Tusk on Monday that Belgium could not agree to sign an EU-Canada trade deal because he had failed to secure the agreement of regional authorities.
WASHINGTON (Reuters) - AT&T Inc's proposed $85 billion takeover of Time Warner Inc generated skepticism among both Democrats and Republicans on Sunday, making it more likely that regulators will closely scrutinize the effort to create a new telecommunications and media giant.
LONDON (Reuters) - Oil prices fell on Monday as Iraq said it wanted to be exempt from an OPEC deal to cut production, though losses were capped by Iran saying it would encourage other members to join an output freeze.
With Q3 earnings season looking unexpectedly strong after the first 2 weeks of reporting, which granted have focused on the otherwise strong banks and tech companies with energy and retail still to come, with some 80% of companies beating expectations and hope returning that this may be the quarter when the 1+ year long earnings recession find ends, moments ago Goldman's David Kostin poured cold water over the S&P's earning prospects when earlier this morning the strategist announced that he is "trimming our S&P 500 earnings forecasts" for the next three years.
We cut our S&P 500 earnings estimates for each of the next several years. Our revised operating EPS forecasts now equal $105 (2016), $116 (2017), and $122 (2018) reflecting annual growth of 5%, 10%, and 5%, respectively. Low interest rates and peaking margins constrain profit growth in Information Technology, Financials, and Telecom and drive the reduction in our index-level EPS forecast.
Our earnings model projects 5% sales growth and 8.5% margins for the S&P 500 in 2017 with margins peaking next year and starting to decline in 2018.
We maintain our S&P 500 price targets of 2100 for year-end 2016, 2200 at the end of 2017, and 2300 at the end of 2018, implying price changes from the current market level of -3%, +2%, and +6%, respectively.
From a valuation perspective our unchanged year-end 2016 target of 2100 represents a forward P/E multiple of 18x our 2017 top-down operating EPS estimate of $116 and 17x our 2017 top-down adjusted EPS estimate of $123, ranking at the 85th percentile relative to the past 40 years.
Key issues for investors in 2017: (1) secular stagnation and (2) peaking margins.
Summary of Goldman Sachs US Portfolio Strategy forecasts, 2015-2019E
The Telegraph's Ambrose Evans Pritchard reports that "the risk of a US recession next year is rising fast" and that "the Federal Reserve has no margin for error".
AEP is quite well connected and very well informed on such matters and hence the need to consider what he is saying and more importantly prepare:
"Liquidity is suddenly drying up. Early warning indicators from US 'flow of funds' data point to an incipent squeeze, the long-feared capitulation after five successive quarters of declining corporate profits.
Yet the Fed is methodically draining money through 'reverse repos' regardless. It has set the course for a rise in interest rates in December and seems to be on automatic pilot."
"We are seeing a serious deterioration on a monthly basis," said Michael Howe ...
It's one thing for the right-wing press to accuse the Clinton foundation of cronyism, corruption, and scandal (especially if the facts, and internal admissions by affiliated employees, confirm as much) - it tends to be generally ignored by the broader, if left-leaning, media. But when the Watergate scandal's Bob Woodward, associate editor at the liberal Washington Post, says very much the same, Hillary Clinton's campaign has no choice but to notice. This is precisely what happened today when journalist Bob Woodward told a Fox News Sunday panel that the Clinton Foundation is "corrupt" and that Hillary Clinton has not answered for it.
Here, courtesy of RealClearPolitics, is the transcript of today's exchange:
CHRIS WALLACE, FOX NEWS SUNDAY: Then there are the allegations about the Clinton Foundation and pay to play, which I asked Secretary Clinton about in the debate, and she turned into an attack on the Trump Foundation.
But, Bob, I want to go back to the conversation I was having with Robby Mook before. When -- when you see what seems to be clear evidence that Clinton Foundation donors were being treated differently than non-donors in terms of access, when you see this new -- new revelations about the $12 million deal between Hillary Clinton, the foundation, and the king of Morocco, are voters right to be troubled by this?
BOB WOODWARD, THE WASHINGTON POST: I -- yes, it's a -- it's corrupt. It's -- it's a scandal. And she didn't answer your question at all.
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