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20Jan2017 Market Update: US Markets Are Relatively Quiet, Crude Prices Trending Up While The US Dollar Trends Down

Written by Gary

Wall Street has trended down from the opening, but remains fractionally in the green (SPY +0.2%). WTI crude prices are trading in the 53's, US dollar trading in the 100's and Donald J. Trump is now the 45th President of the United States of America.

Here is the current market situation from CNN Money

North and South American markets are mixed today. The Bovespa is up 0.84% while the S&P 500 gains 0.22%. The IPC is off 0.08%.

What Is Moving the Markets

Here are the headlines moving the markets.

U.S. stocks pare gains after Trump's inaugural speech

(Reuters) - Wall Street pared gains sharply on Friday after Donald Trump made his inaugural speech as the 45th president of the United States.

U.S. bankers tell Europeans to think positively on Trump

DAVOS, Switzerland (Reuters) - U.S. bankers, buoyed by a resurgence in profits, are advising their counterparts in Europe to think positively about the new administration of U.S. President-elect Donald Trump.

Investment Focus: History suggests Trump month will be stocks down, dollar up

LONDON (Reuters) - For financial markets, the Trump era begins on Monday, and if history is any guide the following month should be a rocky one for Wall Street but positive for the dollar.

AIG to pay Buffett's Berkshire about $10 billion in insurance deal

NEW YORK (Reuters) - American International Group Inc has agreed to pay roughly $10.2 billion to Warren Buffett's Berkshire Hathaway Inc to take on many long-term risks on U.S. commercial insurance policies it has already written.

Fed's Williams says need to raise rates before economy overshoots

SAN FRANCISCO (Reuters) - San Francisco Federal Reserve Bank President John Williams on Friday repeated his view that the U.S. central bank needs to reduce monetary stimulus before the economy overshoots the Fed's employment and inflation goals and the Fed has to "slam on the brakes."

Goldman Sachs rejects Indonesian businessman's $1.1 billion claim over share trade

JAKARTA (Reuters) - Goldman Sachs has rejected allegations by an Indonesian businessman who is seeking $1.1 billion in damages from the U.S. bank for making what he called "unlawful" trades in the shares of a property firm.

Odebrecht group ready to return $5 billion pipeline contract to Peru

LIMA (Reuters) - A consortium controlled by Brazilian builder Odebrecht S.A. will miss a financing deadline on Monday for a natural gas pipeline project in Peru and awaits government notification that it will lose the $5 billion contract, the company said on Friday.

Nasdaq backs trading illiquid stocks only on listing exchange

NEW YORK (Reuters) - Nasdaq Inc will ask U.S. regulators under the Trump administration to limit the trading of shares of small companies and illiquid exchange-traded funds to the exchanges on which they are listed, the market operator said in a note to clients.

Societe Generale to pay $50 million to settle U.S. fraud claims

NEW YORK (Reuters) - Societe Generale agreed to pay a $50 million civil fine to settle U.S. claims that it defrauded investors in connection with the marketing and sale of residential mortgage-backed securities.

Violent Scenes From Washington D.C. As America's Snowflakes Riot

Last night we noted that anti-Trump protesters had their first confrontation with police as American's violent, disaffected youth threw eggs at guests and set fires outside of Trump International Hotel as people attempted to make their way to the new administration's "Deploraball." But with the inauguration now over, protesters are showing no signs of slowing down as chaotic scenes of rioters destroying private property are flooding twitter.

BREAKING NEWS: Protests have turned violent, Riot police respond. #Inauguration

— TheAnonMessage (@TheAnonnMessage) January 20, 2017

A riot breaks out in Washington, D.C. #Inauguration #TrumpInauguration #Inaugurationday

— Today'sLoop (@TodaysLoop) January 20, 2017

Smashing the windows of a @McDonalds #Inauguration #DC #riot

US Financial Markets - Alarm Bells Are Ringing

Submitted by Pater Tenebrarum via,

A Shift in Expectations

When discussing the outlook for so-called "risk assets", i.e., mainly stocks and corporate bonds (particularly low-grade bonds) and their counterparts on the "safe haven" end of the spectrum (such as gold and government bonds with strong ratings), one has to consider different time frames and the indicators applicable to these time frames. Since Donald Trump's election victory, there have been sizable moves in stocks, gold and treasury bonds, as the election result has strongly boosted certain market expectations.

The chart below compares three of the associated ETFs, namely SPY, TLT and GLD:

SPY, TLT and GLD - after the election, stocks rallied while treasuries and gold sold off. The main (but not only) driver of these moves were surging inflation expectations. Since mid December, treasuries and gold have quietly rallied though, in what seems to be widely considered a "technical bounce" one is usually advised to ignore (we won't) - click to enlarge.

As we have mentioned late last year, US true money supply growth rates have accelerated sharply again. Since the stock market has concurrently broken out to new all time highs ...

Oil Slides After Rig Count Spikes Most Since April 2013

While a desperate Saudi Arabia jawbones how well OPEC production cuts are going, the road ahead looks like a surge in US Shale supply is coming. Following a brief dip in the previous week, US oil rig counts soared 29 to 551 last week - the biggest weekly rise sicne April 2013 - to the highest since Nov 2015.


Which signals to OPEC that more production is coming...

And WTI prcied are leaking lower...

President Trump's Inaugural Address Was The Shortest Since Carter

Trump's 16 minute, 12 second, 1455 word inaugural address is the shortest since President Carter in 1977 (and second shortest to Kennedy since the end of World War II). The brevity, however, did not hide the tone...

Carter and Kennedy were the closest in terms of brevity...

Source: The American Presidency Project

Butthe following word cloud makes it very clear what the focus of his speech was...

h/t @BBCBarbaraPlett

America, First!

American Express Feeling the Heat From Competition

The writing is on the wall for American Express, but investors can't see it. Like a lifelong Platinum-card holder oblivious to the better options now available, the company's investors are oddly unconcerned about worsening competition.

Washington Uncertainty May Give GE an Unhealthy Glow

Add General Electric to the list of businesses concerned about the risks from health policy uncertainty. Chief Executive Jeffrey Immelt noted on the fourth-quarter earnings conference call that the U.S health-care business faces some risks as a result.

Apparel Industry Enters No-Man's Land Under Trump

Apparel retailers could be among the hardest hit by tax proposals being weighed by the Trump administration.

Market Extra: President Donald Trump is set to unleash a cascade of stock-market anxiety

The day of reckoning for the Wall Street is here. Donald Trump has been sworn in as leader of the free world and the level of consternation in the market is palpable.

Market Extra: Investing legend Jim Rogers says dump stocks if Trump launches trade war

Well-known investor Jim Rogers worries President Trump will follow through on hostile trade rhetoric.

Commodities Corner: How gold tends to perform in presidential inauguration years

Uncertainty in the markets runs high as Donald Trump becomes President of the United States, but the history of inauguration years favors gold.

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