Wall Street closed mostly down (SPY +0.5% 7 DJI -0.1%) and the S&P 500 ended a choppy session slightly higher. Janet Yellen said the American economy is gaining momentum, giving central bankers leave to start raising interest rates.
(Reuters) - Netflix Inc's international and U.S. subscriber additions sped past analysts' estimates as the video streaming service released shows including the award-winning British drama "The Crown" and a revival of "Gilmore Girls".
NEW YORK (Reuters) - The S&P 500 ended a choppy session slightly higher on Wednesday, helped by gains in financials following comments by Federal Reserve Chair Janet Yellen that it "makes sense" to gradually lift interest rates.
NEW YORK (Reuters) - Credit Suisse has formally agreed to pay $5.3 billion to settle with U.S. authorities over claims it misled investors in residential mortgage-backed securities it sold in the run-up to the 2008 financial crisis.
SAN FRANCISCO (Reuters) - With the U.S. economy close to full employment and inflation headed toward the Federal Reserve's 2 percent goal, it "makes sense" for the U.S. central bank to gradually lift interest rates, Fed Chair Janet Yellen said on Wednesday.
SEOUL (Reuters) - A South Korean court on Thursday dismissed a warrant to arrest the head of the Samsung Group [SAGR.UL], the country's largest conglomerate, a court spokesman said, amid a graft scandal that led to the impeachment of President Park Geun-hye.
NEW YORK (Reuters) - JPMorgan Chase & Co has agreed to pay $55 million to settle a U.S. Justice Department lawsuit accusing it of discriminating against minority borrowers by allowing mortgage brokers to charge them more for home loans, a person familiar with the matter said on Wednesday.
(Reuters) - Goldman Sachs Group Inc reported a nearly fourfold rise in quarterly profit on Wednesday thanks to a surge in bond trading revenue, with its finance chief offering a sunny outlook for business in 2017.
WASHINGTON (Reuters) - A pickup in manufacturing, "widespread" reports of labor shortages and improving business investment set the stage for the Federal Reserve's December rate hike amid signs of steady economic growth across the country, the Fed reported Wednesday in its latest Beige Book compendium of economic conditions.
(Reuters) - Citigroup Inc Chief Executive Michael Corbat asked investors for more patience on Wednesday in explaining how the bank failed to meet four-year-old performance targets, even as vibrant markets drove profits higher in the fourth quarter.
And there it is, the unvarnished, raw, truth about how everything went wrong for middle class America.
Since the Vietnam war, more than 45 years ago, the US has embarked on a neocon strategy of war in an effort to build a global empire. The result of that strategy has left American infrastructure second rate, its school system in shambles, and its healthcare system a complete and utter joke.
Just imagine what America could've done with $14t of investable dollars, instead of waging wars.
Aside from the wars, America spends more than 50% of its discretionary budget on the military, per annum, 16% of its overall budget.
That's the main issue, the sordid topic that is rarely discussed in American politics, for fears of crossing the military-industrial complex.
Jack Ma from Alibaba doesn't share those same fears, being a Chinese national worth $27b of zero f*cks
In a very rare glimpse into what the Chinese really think about American imperialism and how it shaped the global economy, all the better for China might I add, Jack Ma spoke candidly today in an interview with CNBC's Andrew Ross Sorkin.
"It's not that other countries steal jobs from you guys," Ma said. "It's your strategy. Distribute the money and things in a proper way."
Following up on his note from yesterday in which he discussed the unwind of the Trumpflation trade and the beginning of the "pain trade", and having received feedback from clients following yesterday's sudden reversal in the US Dollar (which is fading fast following the latest hawkish comments from Janet Yellen), RBC's Charlie McElligott writes that the general tone is "downplaying fear of a larger VaR-episode (see: last Jan / Feb in the market neutral community via an excruciating factor rotation) developing at this point beyond the "now regularly scheduled" January mean-reversion, largely due to the remarkably-tight range now built-into US rates (as they ping between 2.30 and 2.40 for 10s and 2.90 to 3.00 for 30s).
That said, he notes that government bond shorts are staying firm as "leveraged funds are impressively adding to shorts last week despite the rally", while 'real money' has continued to add duration, forcing a price stalemate. His conclusion "there is no clearer example of this positioning standoff than by looking at the CFTC 5Y UST futures positioning data-- somebody is going to get hurt badly"
Additionally, below we present some additional commentary on other asset classes from the head of RBC's cross-asset strategy.
* * *
As I've been stating over the past few weeks, there are multiple fronts with regards to answering the "what inning are we" question and the 'reflation trade.' Per expectations, we see the 'slow-to-turn super tanker' real money commu ...
Submitted by 720Global's Michael Lebowitz via RealInvestmentAdvice.com,
As we dig through S&P 500 price forecasts for the year 2017, we discover that a majority of "Wall Street's top strategists", are calling for a year-end S&P 500 price in the 2,300-2,450 range. None of the forecasters expect a down year, but that's an article for another day. Not surprisingly, a year-end index price in the aforementioned forecasted range would put growth in line with that experienced since 2012. While the strategists will claim they have extensive multi-factor models that help them arrive at their estimate, it is quite likely many of them rely on extrapolating prior price performance into the future based on the dangerous assumption that the future will be like the past.
Such a forecasting strategy may seem logical, and has worked well for the last four years, but it fails to acknowledge that earnings growth, which have repeatedly been grossly over-estimated, have been relatively flat over the same period. Since 2012, the S&P 500 has risen almost 70% while earnings are up a mere 2%. The graph below plots the S&P 500, earnings per share and their respective trend lines.
Data Courtesy: Bloomberg and Standard & Poor's
When price increases are not accompanied by earnings increases, it indicates that multiple expansion has occurred. In other words, the ratio of price-to-earnings (P/E) is expanding almost entirely because of its numerator- price increases.
Less than two days before Donald Trump is inaugurated as the 45th president of the United States, Fed chair Janet Yellen takes to the stage at the Commonwealth Club of San Francisco to explain (after all these years), what "the goals of monetary policy are... and how we pursue them." We can't wait to hear how increasing asset prices to untenable levels, depriving savers of income, and driving the largest wedge between rich and poor since the great depression have been part of the solution...
Headlins from her prepared remarks include:
*YELLEN: U.S. NEAR MAX EMPLOYMENT, INFLATION MOVING TOWARD GOAL
*YELLEN: FED CLOSE TO DUAL GOALS; CAN'T GIVE TIMING OF NEXT HIKE
*YELLEN: SHE AND MOST COLLEAGUES EXPECT `A FEW' RATE HIKES A YR
*YELLEN: NEXT RATE HIKE DEPENDS ON ECONOMY `OVER COMING MONTHS'
*YELLEN: MAKES SENSE TO GRADUALLY REDUCE MONETARY POLICY SUPPORT
*YELLEN SAYS SHE'S HEARING FROM BORROWERS WHO WANT LOWER RATES
*YELLEN SAYS U.S. WAGE GROWTH REMAINS FAIRLY LOW
*YELLEN: WANT TO ENSURE ECONOMY STRONG ENOUGH TO ABSORB SHOCKS
Live Feed (Yellen due to speak at 1500ET)...
Full speech here:
Good afternoon. It is a pleasure to join all of you at the Commonwealth Club for lunch today, not the least because the club and the Federal Reserve have a few things in common. Both organizations, as it happens, have a board of governors and a chair. And both the club's and the Fed&# ...
The consolidated economic report from the 12 Federal Reserve Districts (Beige Book) stated "the economy continued to expand at a modest pace across most regions from late November through the end of the year". The previous report stated the economy expanded at "that the economy continued to expand across most regions from early October through mid-November".
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