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06Mar2017 Market Close: Wall Street Closed Down But Way Above The Support Line, Crude And The US Dollar Remained Relatively Stable, Is This The Beginning Of The Rally Ending

Written by Gary

US stocks retreated today (SPY -0.3%) in a broad decline as investors took a dim view of the latest turbulence surrounding the Trump administration along with geopolitical tensions emanating from Asia.

Todays S&P 500 Chart

Market Remains Overvalued

by Jill Mislinski, 3/3/17

Here is a summary of the four market valuation indicators we update on a monthly basis: the Crestmont Research P/E Ratio, the cyclical P/E ratio using the trailing 10-year earnings as the divisor, the Q Ratio, which is the total price of the market divided by its replacement cost, and the relationship of the S&P Composite price to a regression trendline.

The Market in Perspective

Here are the headlines moving the markets.

Investor group seeks to bar Snap from indexes over voting rights

BOSTON (Reuters) - A group representing large institutional investors has approached stock index providers S&P Dow Jones Indices and MSCI Inc, looking to bar Snap Inc and any other company that sells investors non-voting shares from their stock benchmarks.

Wall Street slips on wiretap accusation, geopolitical worries

NEW YORK (Reuters) - U.S. stocks retreated on Monday in a broad decline as investors took a dim view of the latest turbulence surrounding the Trump administration along with geopolitical tensions emanating from Asia.

PSA targets Opel turnaround as GM exits Europe

PARIS/FRANKFURT (Reuters) - France's PSA Group plans to buy Opel from General Motors in a deal valuing the business at 2.2 billion euros ($2.3 billion), creating a new European car company to challenge market leader Volkswagen .

Wells Fargo names Allen Parker general counsel

(Reuters) - Wells Fargo & Co named Allen Parker general counsel on Monday, at a time when the third-largest U.S. lender looks to restore its battered reputation following a scandal over phony accounts.

Exxon to invest $20 billion on U.S. Gulf refining projects

HOUSTON (Reuters) - Exxon Mobil Corp , the world's largest publicly traded oil producer, said on Monday it would invest $20 billion through 2022 to expand chemical and refining plants on the U.S. Gulf Coast.

Publicity looms over PwC, MF Global trial in New York

NEW YORK (Reuters) - Publicity over the recent Academy Awards and Wall Street hung over a Manhattan courtroom on Monday as lawyers struggled to find jurors to decide whether PricewaterhouseCoopers helped cause the collapse of MF Global Holdings Ltd, a commodity brokerage once headed by former New Jersey Governor Jon Corzine.

Deutsche Bank tests investor patience with $8.5 billion cash call

FRANKFURT (Reuters) - Deutsche Bank's chief executive pledged on Monday to see through a strategic turnaround as he sought to persuade weary shareholders to sign an 8 billion euro ($8.5 billion) cheque to back his plans.

Trump adviser Navarro: U.S, Germany should discuss trade outside EU

WASHINGTON (Reuters) - Trump administration trade adviser Peter Navarro said on Monday the $65 billion U.S. trade deficit with Germany was "one of the most difficult" trade issues, and bilateral discussions were needed to reduce it outside of European Union restrictions.

Oil majors reverse decade of stalled growth to beat supply crunch fears

HOUSTON (Reuters) - Oil majors have long been passive watchers of the pump war between OPEC and U.S. shale producers, but not any more.

Valuation (Alone) Doesn't Matter

Via ConvergEx's Nicholas Colas,

Valuation won't ever tell you if a stock is heading higher or lower. Valuation is math, and math is not an investment edge; it is only helpful because it tells you what the market believes. Figure out why that's wrong (and it generally is), and now you have something useful. Take the companies of the Dow Jones Industrial Average. On average, they trade for 18.6x 2017 consensus earnings, and 16.6x next year's estimates. Built into those numbers is expected earnings growth of 11% from 2017 to 2018.

Since corporate earnings have been relatively stagnant for the last 3 years, that's the first hurdle to jump. Beyond that, you need a point of view on how much better/worse things will be. The best case scenario (every Dow stock earns what the most optimistic Street analyst thinks they can earn) leaves us with US equities trading at 14.8x next year. That is clearly cheap. And if every Dow stock earns only what the most pessimistic analyst has in their model? Then US stocks trade for 18.6x next year. With US rates as low as they are, that is expensive but not horribly so.

Bottom line: if you believe that some parts of the "Trump agenda" will pass at any point this year, the upside earnings case is correct (if not low). And if you don't, sell. Now.

"T ...

CNN Airs 'Spy Cam' Footage Of Trump Oval Office Meeting As If It's Perfectly Acceptable

Over the weekend, CNN released 'spy cam' footage of a "fiery" meeting in the oval office and used it to report that an angry President Trump lashed out at his senior staff in an "expletive-laced" tirade over their "fumbling" of the Sessions recusal which he thought was premature and overshadowed his speech to Congress.

Of course, while the mainstream media was all too eager to spread the word of more dysfunction in the Trump White House, no one seemed to care to ask the obvious question of why it is suddenly ok for CNN to be filming private, and potentially classified, meetings in the Oval Office. Moreover, if it is somehow permissible to film potentially classified meetings, which we can't imagine it is, we do wonder where all of CNN's footage is of Obama's oval office meetings? We're sure they "do not recall."

Meanwhile, it's painfully obvious that CNN completely fabricated the narrative around the meeting as their own 'news' anchor even admits that their "anonymous" sources were not aware of what the meeting was even about. Moreover, since the meeting was 'closed door', it's difficult to understand how CNN's source could have possibly known Trump's demeanor and/or whether he used "a lot of expletives", as the story states, unless that source was actually in the meeting.

That said, here is the narrative that CNN linked to the meeting:

President Donald Trump is extremely frustrated with his senior staff and communicat ...

Great Expectations (Not)

Via Howard Kunstler of,

Halloween's coming super-early this year and it will be a shocking surprise to those currently busy looking for Russians behind every potted plant in Washington DC. First, accept the premise that your country has lost its mind.

This is what happens when societies (and individuals) can't face the true quandaries of a particular moment in their history. All of their attention gets channeled into fantasy: spooks, sexual freakery, conspiracies, persecution narratives, savior fairy tales. It's been quite a cavalcade of unreality for the past six months, with great entertainment value for connoisseurs of the bizarre — until you're reminded that the fate of the nation is at stake.

The questions Americans might more profitably ask ourselves: can we continue living the way we do? And by what means? These matters of home economics have been sequestered in some forgotten storage unit of the collective mind for at least a year while a clock ticks in the time-bomb that sits on the national welcome mat. That bomb is made of financial plutonium and it's getting ready to blow. When it does, all the distracting spookery and freakery will vaporize and the shell-shocked citizens will have a clear view of the bleak, toxic, devastated landscape they actually inhabit.

March 15 is when the temporary suspension of the national debt ceiling — engineered in a 2015 deal between Barack Obama and then House Speaker John Boehner — finally expires, meaning the government loses its authority to continue borrowing money. The chance that congress can pass a bill raising the debt ceiling to enable further borrowing is about the same as the chance that Xi Jinping will send every American household a dim sum bre ...

Trump's Closest Advisers Spend Millions On Washington Real Estate

It's not just the Obamas that are moving into swanky mansions across Washington D.C.. This last weekend saw two $12-million-plus homes sold in the D.C. area with realtors noting "Trump's bringing people from outside a local market...and they're coming from a much more expensive market."

Treasury Secretary Steven Mnuchin is the buyer who shelled out $12.6 million for a nine-bedroom home overlooking Rock Creek Park.

As The Washington Business Journal's Sara Gilmore reports, this is just the latest in the string of multimillion dollar home sales fueled by Trump administration officials.

Mnuchin, a former Goldman Sachs official, bought the house Feb. 14, according to real estate sources. Public records list the buyer as Rock Creek Drive Revocable Trust. Washingtonian reported in January that Mnuchin had a home under contract but the exact location wasn't known.

The Cheap Resource That Worries Oil Shale Drillers

The rising cost of fracking sand shows how drillers of oil and gas are facing rising costs and capacity constraints.

What a Catch: Dick's Sporting Goods Is Set to Break Out of Its Stock Slump

Wall Street is undervaluing the sporting-goods retailer, which is positioned to continue stealing market share from weaker competitors.

ECB's Next Trick? Acknowledge Europe's Improving Economy

A stronger eurozone economy with high political risks is a difficult mix for the ECB.

The Ratings Game: Snap stock suffers first major selloff since going public

Snap stock, plagued by brokerage initiations rating the stock as sell, suffered its first selloff Monday since IPO.

Market Extra: Nvidia's stock falls briefly into bear-market territory

Shares of Nvidia Corp. drops briefly into bear-market territory Monday for the first time in over a year. The company's stock managed to rebound from that nadir but still was on course to book a three-month low.

Key Words: Ben Carson likens slavery to immigration

Newly confirmed Housing and Urban Development Secretary Ben Carson on Monday met his charges for the first time — and didn't discuss housing.

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