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01Mar2017 Market Close: New Historic Highs As The Trump Rally Roars On, DOW Climbs To 21,169, Crude Prices Slip Sharply And The US Dollar Settles In The High 101's

Written by Gary

Wall Street closed higher (SPY +1.4%) just under the new historic all-time highs set this morning. Crude prices have slipped and the US dollar has remained relatively unchanged. We are again in uncharted territory and guessing will remain futile for the time being.

Todays S&P 500 Chart

Dow closes above 21,000 as stocks post best day of 2017 after Trump's speech

The Market in Perspective

Here are the headlines moving the markets.

Snap to price long-awaited IPO on Wednesday amid signs of brisk demand

(Reuters) - Snap Inc, owner of popular messaging app Snapchat, will price its initial public offering after the U.S. stock market closes on Wednesday in the most eagerly awaited technology IPO since Chinese e-commerce giant Alibaba went public in 2014.

More Wells Fargo customers may be affected by sales scandal: filing

(Reuters) - More Wells Fargo & Co customers may have been affected by a scandal over phony accounts than previously believed, the third-largest U.S. lender said in a regulatory filing on Wednesday.

Oil pares gains after U.S. crude stocks build to record high

NEW YORK (Reuters) - Oil prices were largely steady on Wednesday, paring gains and briefly turning negative, after crude inventories in the United States rose to a record high.

Murdoch's Fox set to request EU approval for Sky takeover bid

LONDON (Reuters) - Rupert Murdoch's Twenty-First Century Fox will seek approval from the European Commission for its $14.4 billion bid for European pay-TV firm Sky in the coming days, a person familiar with the matter said.

U.S. consumer spending slows; inflation pressures firming

WASHINGTON (Reuters) - U.S. consumer spending cooled in January as demand for automobiles and utilities fell, but inflation recorded its biggest monthly increase in four years, raising the probability of an interest rate hike from the Federal Reserve this month.

U.S. truck, SUV sales stay strong in February, but at a price

DETROIT (Reuters) - February U.S. auto sales, an indicator of consumer spending, fell slightly even as automakers stepped up discounting to sustain sales, major manufacturers reported on Wednesday.

McDonald's turns to technology, value to win back lost customers

CHICAGO (Reuters) - McDonald's Corp later this year will give U.S. customers the opportunity to order and pay via their cell phones as it fights to win back customers lost to other fast-food rivals.

PepsiCo to cut jobs in Philly as sales lose fizz after soda tax

(Reuters) - PepsiCo Inc said on Wednesday it would cut 80 to 100 jobs in Philadelphia as the city's new sugar-sweetened beverage tax hurts demand for its products.

The Fed Has Now Set The Stage For An 'Ides Of March' Moment

Via Mark St.Cyr,

Whether or not one agrees that the Federal Reserve is preparing to raise rates again at its upcoming meeting this March, one thing is certain: The Fed has done everything shy of setting its hair-on-fire to leave little doubt that they are seriously considering it.

As of this past Friday the consensus (or odds) for such a possibility stood in the high 30's signaling little to no chance. On Monday those odds started to nudge up ever so slightly, yet, by late Tuesday those odds were pushing past the 70's and heading for 80. Guess what happened next?

We're now sitting as of this writing at an 82% expectancy rate for the odds of another rate hike in about two weeks time. And the "markets" are setting ever higher records as the day progresses. It would appear the "market" either A: doesn't believe the Fed. Or, B: no longer cares. I believe it's A, and that's a very big problem.

Just yesterday I wrote an article stating that the time to watch China ever-the-closer was right now in light of recent Fed. pile on for March "live" considerations. One of the references I used was the addition of two more Fed. presidents taking to the airwaves to project the idea that March indeed was, and should be, taken as "live."

I hadn't but hit the publish button when two additional Fed. presidents wade into the fray,

Can 'Soft' Become 'Hard'? - RBC Explains The Market's "Longer-Term Battle"

The last few days have seen the yawning chasm between 'soft' survey and confidence data (soaring) and 'hard' real macroeconomic data (tumbling) widen still further.

And while The Fed jawbones rate-hike expectations into the market and stocks follow PMIs blindly, RBC's Charlie McElligott explains that the market is now in a longer-term battle between "economic (data) escape velocity" against the prospects for "financial tightening ahead of growth." It will continue coming-back to "soft data converting to hard," and for now, it's very difficult to fade the PMIs despite the fiscal policy implementation delays and challenges ahead.

"Best-case scenarios" abound overnight for "reflation" trades, broad risky-assets and fixed-income shorts, between:

1) Fed speakers messaging "statements of intent" on March hikes

2) a "Presidential" speech from the POTUS low on bluster (and details), big on 'vision' and spending and

3) +++ global PMI ("animal spirits" ascendancy continues) and inflation data.

USD up (almost entirely against Yen, Euro and Sterling weakness), stocks up, crude and industrial metals up, gold and global sovereign bonds HAMMERED (US front-end hammered with 100k contracts liquidated in over 2 days), as the reapplication of the macro narrative trades begins anew with the "ref ...

All Central Banks Need To Raise Rates Significantly (Video)

By EconMatters

We discuss the fact that All Central Banks are a lot behind both the inflation and interest rate curve and need to hike rates immediately and by a significant amount in this video. There was no "New Normal" a bunch of low interest rate money creates asset bubbles that always end very badly for markets. When I watch the markets do things they haven`t done since the 2000, and 2007 Financial Market Bubbles I know Interest Rates are Far Too Low, and we risk a 6-Sigma Stock Market Crash on the downside when this Obvious Bubble Pops!

Arora Report: "Three-Quarters Of Today's Market Surge Is From A Massive Short Squeeze"

For those wondering what unleashed today's ferocious post-Trump, post-hawkish Fed speeches rally, the reason may have nothing to do with optimism in the economy or another inflow of retail funds via ETFs, and everything to do with a buildup of bearish short positions ahead of Trump's speech last night.

According to an analysis by the Arora Report, flagged first by Market Watch, and substantiated by various Wall Street comments early in the morning, ahead of Trump's speech various "large players" were positioned bearishly, assuming that the market rally has been based on hope and that, and that unless the president gave details about plans for the economy, there would be a big selloff. The reasoning, broadly echoed by strategists until yesterday, is that by looking at past speeches of presidents before Congress, the details are almost never there. So it appeared a perfect setup to short sell. And, according to algorithms used by The Arora Report, major traders did just that, building up substantial short positions ahead of Trump's speech, as shown on the chart below.

However, just like after the Brexit vote, and after the Trump election, following Trump's speech, when the market did not fall, shorts were forced to cover their positions, sending prices soaring. The initial squeeze and its progression are shown on the chart. This forced-buying made futures run up prior to the 9:30 a.m. start of trading in New York. When the stock marke ...

How Google Does TV

Google's bet on web TV with YouTube involves a much smaller wager than AT&T's with DirecTV.

Palo Alto Networks Frightens Again

Sales woes and rising competition are crimping the growth of one-time cybersecurity star Palo Alto Networks.

A Surprising Clue About Oil Prices Today

Surging U.S. crude oil exports don't mean that OPEC is winning, but a shift in customers would.

March 2017 Beige Book: Reading Between The Lines - Some Economic Improvement

Written by Steven Hansen

The consolidated economic report from the 12 Federal Reserve Districts (Beige Book) stated "the economy expanded at a modest to moderate pace from early January through mid-February". The previous report stated the economy expanded at "the economy continued to expand at a modest pace across most regions from late November through the end of the year".

Market Extra: Dow 21,000 powered by Apple's 15% rally since Jan. 25

Investors in the Dow can thank Tim Cook in part for Dow 21,000.

Bond Report: Treasury yields see largest one-day increase since November

Treasury yields on Wednesday notched their largest one-day increase since mid-November after the perceived probability of a March rate hike increased dramatically following hawkish remarks from several Federal Reserve officials.

ETF Focus: An ETF focused on LGBT-friendly companies doubled the gain of its benchmark

A recently launched ETF based on "biblical values" is a thematic inverse of the Workplace Equality ETF, which chooses its holdings based on the company's support of LGBT employees and policies and has been outperforming the broader market.

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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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