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31Jan2017 Market Close: US Stock Markets Closed Mixed As Crude Prices Slipped While Investors Await The Fed's Decision On Interest Rates

Written by Gary

Wall Street closed lower, but off the morning lows (SPY -0.06%). Crude prices slipped and the US dollar remained in its weakened position settling below 100.he S&P 500 for a fourth consecutive session, weighed by sectors sensitive to economic growth amid disappointing earnings.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Trump pushes drugmakers for lower prices, more U.S. production

WASHINGTON/LOS ANGELES (Reuters) - U.S. President Donald Trump in a meeting on Tuesday with pharmaceutical executives called on them to manufacture more of their drugs in the United States and cut prices, while vowing to speed approval of new medicines and ease regulation.

S&P dips for fourth straight decline

NEW YORK (Reuters) - The S&P 500 fell on Tuesday for a fourth consecutive session, weighed by sectors sensitive to economic growth amid disappointing earnings and lingering concern over the priorities of the Trump administration.

Fed likely to keep rates steady as it awaits Trump economic plan

WASHINGTON (Reuters) - The U.S. Federal Reserve is expected to keep interest rates unchanged on Wednesday in its first policy decision since President Donald Trump took office, as the central bank awaits greater clarity on his economic policies.

Warren Buffett: I bought $12 billion of stock after Trump won

(Reuters) - The failure of Warren Buffett's favored candidate to capture the White House has not dimmed the billionaire's appetite for stocks.

As Trump thunders, investors watch for rain

BOSTON (Reuters) - A dizzying stream of market-moving tweets and policy talk by President Donald Trump is finding a hopeful but anxious audience among professional investors looking to make stockpicking great again.

Exxon boosts capital budget but takes $2 billion charge from XTO deal

HOUSTON (Reuters) - Exxon Mobil Corp boosted its 2017 capital budget on Tuesday on a bet that oil prices have stabilized, but posted its lowest quarterly profit since 1999 as it took a $2 billion charge against the value of natural gas reserves from its buyout of XTO Energy.

U.S. oil producer ConocoPhillips raises quarterly dividend

(Reuters) - ConocoPhillips , the largest U.S. independent oil producer, raised its quarterly dividend by 6 percent to 26.5 cents per share.

Electronic Arts revenue rises 7.4 percent

(Reuters) - Video-game publisher Electronic Arts Inc reported a 7.4 percent rise in third-quarter revenue, helped by strong sales of first-person shooter games "Battlefield 1" and "Titanfall 2".

Insurer Aetna sees Obamacare changes ahead; no word on Humana

(Reuters) - Health insurer Aetna Inc said on Tuesday it lost more money than expected on the Obamacare individual insurance plans, one of the main pillars of the Affordable Care Act that President Donald Trump is working to "repeal and replace."

The Other 'Ban' That Was Quietly Announced Last Week

Submitted by Simon Black via SovereignMan.com,

Most of the world is in an uproar right now over the travel ban that Donald Trump hastily imposed late last week on citizens of seven predominantly Muslim countries.

But there was another ban that was quietly proposed last week, and this one has far wider implications: a ban on cash.

The European Union's primary executive authority, known as the European Commission, issued a "Road Map" last week to initiate continent-wide legislation against cash.

There are already a number of anti-cash legislative measures that have been passed in individual European member states.

In France, for example, it's illegal to make purchases of more than 1,000 euros in cash.

And any cash deposit or withdrawal to/from a French bank account exceeding 10,000 euros within a single month must be reported to the authorities.

Italy banned cash payments above 1,000 euros back in 2011; Spain has banned cash payments in excess of 2,500 euros.

And the European Central Bank announced last year that it would stop production of 500-euro notes, which will eventually phase them out altogether.

But apparently these disparate rules don't go far enough.

According to the Commission, the presence of cash controls in some EU countries, coupled with the lack of cash controls in other EU countries, creates loopholes for criminals and terrorists.

So that's why the European Commission is now working to standardize a ban on cash, or at least implement severe rest ...

JPMorgan Is Not Looking Forward To Today's Apple Earnings

While hardly any analysts or traders expect Apple to report blockbuster earnings today on the back of slowing smartphone sales, challenging iPhone 7 adoption, rising competition in China, and generally a loss of Apple's trademark creative spark under the "new management" which is far more interested in stock buybacks and M&A, few are as skeptical as JPM's Rod Hall who, following last week's downgrade by Barclays, came this close to losing his faith in the world's largest company (he still has an Overweight rating... of course).

This is what he said to expect in today's AAPL earnings:

Expecting a weak iPhone unit guide with variability from ASPs, FX and Airpods

We believe guidance for FQ2 to March is likely to be lower than many expect on weaker iPhone unit volume. ASPs could partially offset this but the negative FX impact is probably enough to make the two effects a wash. Airpods, however, could add a little kick as the tiny things are nearly impossible to find with leadtimes at 6 weeks globally. At the current share price we doubt Apple deals with short term hiccups well.

Having said that we believe the stock remains a strong value opportunity assuming the board will eventually pay a higher dividend. We also buy into the consensus view that the iPhone cycle should be better this year.

Higher Plus version mix could boost ASPs: Our supply chain checks indicate that the mix of the Plus version could be 45% - 50%, higher than our previous estimate of ~40%. A 10% increase in Plus version mix would result in an ASP boost of ~1.4%, as shown in the sensitivity analysis in Table 2.

FX headwind. We estimate that the US dollar strengthening since the last earnings could drive a ~1.5% negative impact to revenues, as shown in Table 3.
...

The First Firestorm

Submitted by Patrick Buchanan via Buchanan.org,

That hysterical reaction to the travel ban announced Friday is a portent of what is to come if President Donald Trump carries out the mandate given to him by those who elected him.

The travel ban bars refugees for 120 days. From Syria, refugees are banned indefinitely. And a 90-day ban has been imposed on travel here from Iraq, Syria, Iran, Libya, Sudan, Somalia and Yemen.

Was that weekend-long primal scream really justified?

As of Monday, no one was being detained at a U.S. airport.

Yet the shrieking had not stopped. All five stories on page one of Monday's Washington Post were about the abomination. The New York Times' editorial, "Trashing American Ideals and Security," called it bigoted, cowardly, xenophobic, Islamophobic, un-American, unrighteous.

This ban, went the weekend wail, is the "Muslim ban" of the Trump campaign. But how so, when not one of the six largest Muslim countries — Indonesia, India, Pakistan, Bangladesh, Egypt, Turkey — was on the list? Missing also were three-dozen other Muslim countries.

Of the seven countries facing a 90-day ban, three are U.S.-designated state sponsors of terror, and the other four are war zones. Clearly, this is about homeland security, not religious discrimination.

The criterion for being included in the travel ban appears to be that these places are the more likely breeding grounds for terrorists.

Yet there are lessons for the Trump White House in the media-stoked panic and outrage at the end of his first week in office.

First, Steve Bannon's observation that the media are "the opposition party," is obviously on target. While Sen. Chuck Schumer was crying on camera that ...

Divergence Between Dumb And Smart Money Confidence Is Approaching Record Levels

Not to be confused with Bloomberg's Smart Money index, one of the more popular proprietary indicators is Sentiment Trader's Smart Money/Dumb Money confidence index. For those unfamiliar, this is how ST explains this useful market timing metric.

The Smart Money Confidence and Dumb Money Confidence indices are a unique innovation that allows subscribers to see, in one quick glance, what the 'good' market timers are doing with their money compared to what 'bad' market timers are doing.

Our Confidence indices use mostly real-money gauges - there are few opinions involved here.

The Confidence Spread subtracts the Dumb Money from the Smart Money. So when the Spread is very high (above 0.25), that means the Smart Money is looking for a rally, and the Dumb Money is looking for a decline; we should expect stocks to rise after those conditions.

When the Spread is very low (below -0.25) then the Smart Money is anticipating a decline and the Dumb Money a rally; we should expect stocks to decline after that.

While using a backtested model with these two signals provides some interesting result, the one more notable observation from the creators is that "Dumb Money being more optimistic tends to highlight moves lower in the market." And, as one would expect, vice versa.

So where are the two confidence indicators currently? As the following chart demonstrates, the spread between the "smart" and "dumb" money confidence is about as wide as it has ever been, and perhaps just as notable, the "Smart Money" is at or near the lowest level of "confidence" ...

Surviving a Trump Meeting Doesn't Mean All Clear for Drug Industry

A relatively calm meeting with President Trump doesn't eliminate drug-pricing risks.

Under Armour's Reckoning

Under Armour shares are slammed after its stunning growth streak ends.

Why Executives Are Speaking Out on Travel Ban and Why More Might Follow

President Trump's immigration order has mostly drawn criticism from companies with employees directly affected, but others may join them as they see international reputations threatened.

5 Questions To Ask Your Protectionist Friends

by FEE, fee.org

-- this post authored by Daniel J. Mitchell

I was recently interviewed on Fox Business Network about Trump's policies and the economy, and the discussion jumped around from issues such as border-adjustable taxation to energy regulation.

Though the central theme of the discussion was whether Trump had good ideas for American jobs and business competitiveness.

container.cargo.ship

UPS stock suffers biggest drop in 2 years as e-commerce surge is still causing problems

UPS's stock suffers its biggest plunge in two years after disappointing results, as a bigger-than-expected spike in e-commerce business came at a cost to the company, just like it did two years ago.

Robo advisers are picking up human advisers for clients

Why robots can't do it alone

Earnings Outlook: Chipotle earnings: Digital ordering could be the next step in the company's turnaround

Chipotle's recovery still has a way to go, analysts say, but digital ordering could be a key player going forward.

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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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