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15Nov2016 Market Close: Major Indexes Closed Moderately Higher, WTI Melting Higher, US Dollar Index Pushing Upward As Investors Cautiously Play The Wall Street Casino

Written by Gary

Wall Street closed higher, melting upwards from the morning sideways trading (SPY +0.8%) with the DOW finally squeaking out a gain (+0.3%). WTI crude settled in the high $45's, the US dollar index at 100.15 and gold steady at 1227. Indicators bullish with a neutral slant.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Wall Street rises, helped by tech and energy

(Reuters) - The major three U.S. stock indexes were higher on Tuesday as tech stocks rebounded from a post-election drubbing and energy stocks were boosted by a rise in oil prices.

Strong U.S. retail sales reinforce December interest rate hike

WASHINGTON (Reuters) - U.S. retail sales rose more than expected in October as households bought motor vehicles and a range of other goods, pointing to sustained economic strength that could allow the Federal Reserve to raise interest rates next month.

Exxon in negotiations with Chad over record $74 billion fine: Bloomberg

(Reuters) - Exxon Mobil Corp is negotiating with Chad over a record $74 billion fine the U.S. oil company was told to pay by a court in the central African nation over unpaid royalties, Bloomberg reported on Tuesday.

Exclusive: Ahead of CBS/Viacom deal talks, sticking points emerge - sources

(Reuters) - Possible sticking points have emerged ahead of negotiations between media companies CBS Corp and Viacom Inc about a potential merger, including who will be on the board of the combined company and what it would be called, people familiar with the situation told Reuters.

Elon Musk-backed AI startup and Microsoft sign cloud agreement

(Reuters) - OpenAI, the non-profit artificial intelligence (AI) research firm backed by Tesla Motors Inc's Elon Musk and other prominent tech executives, has signed an agreement to run most of its large-scale experiments on Microsoft Corp's flagship cloud service, Azure.

Exclusive: EU regulators expected to clear $25 billion Abbott, St Jude deal: source

(Reuters) - EU antitrust regulators are expected to give conditional clearance to U.S. medical device maker Abbott Laboratories' bid for peer St Jude Medical Inc , a person familiar with the matter said on Tuesday.

Incoming Nasdaq CEO says Trump policies may benefit Wall Street

NEW YORK (Reuters) - Nasdaq Inc's incoming chief executive officer, Adena Friedman, said on Tuesday that President-elect Donald Trump's economic policies may boost trading and allow banks to take more risks, including lending more to businesses.

Google announces artificial intelligence group for Google Cloud

(Reuters) - Alphabet's Google announced the formation of an artificial intelligence group for Google Cloud, the tech company's latest gambit to increase its market share in the lucrative cloud computing business.

Ford going ahead with moving small car production to Mexico: CEO

LOS ANGELES (Reuters) - Ford Motor Co is moving ahead with plans to shift production of small cars to Mexico from Michigan, while "two very important products" will be built in its U.S. factories, Chief Executive Officer Mark Fields told Reuters on Tuesday.

Trump Could Radically Transform The Supreme Court For Decades And Dems Are Terrified

Trump has the potential to fundamentally transform the Supreme Court of the United States for decades to come and the left is absolutely terrified. As of right now, only Justice Scalia's seat is open and Trump's replacement there will simply restore the previous 5-4 conservative vs. liberal balance. That said, 3 other justices are near/in their 80's and could be replaced during a Trump presidency. If all three judges are replaced, it would massively shift the balance of power to 7-2 conservative vs. liberal. Something tells us that the DNC is going to provide Ginsburg and Breyer with very regular health checkups over the next 4 years.


For his part, Trump has vowed to appoint conservative judges that are "pro-life" and "pro-gun." On his website, Trump released the following comment about his choices for Supreme Court and provided a list of 21 potential selections (see full list at the end of this post).

"We have a very clear choice in this election. The freedoms we cherish and the constitutional values and principles our country was founded on are in jeopardy. The responsibility is greater than ever to protect and uphold these freedoms and I will appoint justices, who like Justice Scalia, will protect our liberty with the highest regard for the Constitution. This list is definitive and I will choose only from it in picking future Justices of the United S ...

"If You Like Your Legacy..."

Presented with no comment...


As The Yen Crashes, Here's Why "The Move Is Just Getting Started"

One of the biggest moves across asset classes in the aftermath of the Trump presidency, has been the Yen, which since last Wednesday's panic lows has now seen a nearly 8% drop in less than a week: by comparison, it took the USDJPY substantially longer to rise by a similar magnitude following the BOJ's announcement of the QQE expansion in November 2014, suggesting that when it comes to monetary policy, Trump has had a greater impact on Japan's economy than QE and the BOJ's printing of trillions in yen (we doubt Trump has gotten a thank you note from either Abe or Kuroda).

And while the Dollar-Yen pair is now massively overbought by virtually every metric, the move is set to extend according to Richard Breslow, a former FX trader and fund manager who writes for Bloomberg.

Here are Breslow's arguments why the "USDJPY move is just getting started."

While some consolidation in U.S. yields is perhaps overdue, it's very unlikely they've peaked on a long term basis. This has severe consequences for currency markets; most notably USD/JPY.

The power of the correction in U.S. Treasuries has been breathtaking: 10-year yields climbing more than 40 basis points in just three trading sessions. And yet, they've only just recovered to levels seen at the start of 2016, despite the outlook being completely transformed since then.

Remember that the drumbeat of improving U.S. and global data that preceded the election was already starting to put upward pressure on yields -- the rate on the 10-year added 23 basis points in October, a third month of advance, and the two-year yield climbed eight basis points.

Even allowing for structur ...

Are Inflation Trades About to Begin The Next Big Leg Up?

The last week has been something of a sucker punch for the "inflation trade."

A sucker punch is when someone hits you unexpectedly, often in the gut. It initially knocks the wind out of you and puts you into crisis mode.

However, sucker punches rarely if ever result in a knock out or KO. Once you get your breathe back, you're ready to fight.

I believe the markets are in precisely this state. The Trump election win was a sucker punch that the markets didn't see coming. And the random chaos in the financial system (I'm talking about Emerging Markets, the $USD, Gold and the like) was the result of the markets not being sure of themselves.

That period is now ending. And the inflation trade is ready for its next leg up.

With that in mind, consider that inflation expectations are erupting higher

H/T Jeroen Blokland

Meanwhile, core inflation has been above the Fed's target of 2% for 12 months.

Brazil is THE commodity play of the world. If EWZ holds, commodities will be exploding higher.

Right now EWZ looks to have found support. I believe this signals the chaos is ending in the markets.

This is a MAJOR signal. Inflation is coming. And the biggest opportunities will be in inflation hedges such as Gold and Gold miners, rather than stocks.

On that note, we just published a Special Investment Report to our clients concerning a unique play on Gold that less than 1% of investors know about.< ...

Why Trump Means No Quick Fix for Insurers

A turn in yields will only help investment portfolios slowly at best.

Four Midsize Banks With Room to Run Under Trump

The postelection bank rally is starting to look tired, but there is upside left for a select few lenders.

Investors' Prognosis for Teva Seems Overly Bleak

A rough year in generic-drug industry offers investors opportunity.

Trump carnage in bonds spells trouble for stocks

Stocks have raced to record levels on the back of hope that President-elect Donald Trump can make—not just America great again—but the stock market. But a jarring selloff in bonds is a bad sign for Wall Street and could mean problems for equities, at least in the short term.

The Tell: Trump-inspired bond rout may have exhausted itself—for now

After a violent selloff following Donald Trump's presidential election victory, the bond market appears due for some "mean reversion," says one technical analyst.

Post office losses widen to $5.6 billion this year

The U.S. Postal Service posted a $5.8 billion loss in fiscal 2016, bringing its 10-year cumulative total loss to $62.4 billion.

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