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27Mar2017 Market Close: US Dollar Falls Into The 98 Range, WTI Crude Slips Into The 47 Handle, Wall Street Generally Sour And Down

Written by Gary

The S&P 500 ended slightly lower today (SPY -0.1%), cutting earlier losses, while the Dow declined for an eighth consecutive session ($DJI -0.2%) as investors assessed how the defeat of President Donald Trump's first major legislative action would impact the rest of his agenda.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Wall Street falls as 'Trump Trade' questioned

NEW YORK (Reuters) - The S&P 500 ended slightly lower on Monday, cutting earlier losses, while the Dow declined for an eighth consecutive session as investors assessed how the defeat of President Donald Trump's first major legislative action would impact the rest of his agenda.

After healthcare loss, investor faith wavers as Trump turns to taxes

(Reuters) - U.S. stocks slid on Monday amid concerns that Republican President Donald Trump may struggle to push a sweeping overhaul of the tax code through Congress in the wake of his party's failure last week to pass broad healthcare legislation.

Asset sales plan secures EU backing for $130 bln Dow, DuPont merger

(Reuters) - Dow Chemical and DuPont won the blessing of the European Union for their $130 billion merger on Monday by agreeing to sell substantial assets including key research and development activities.

Bill Gross, Pimco settle lawsuit over his exit for $81 million: sources

NEW YORK (Reuters) - Bill Gross has reached a roughly $81 million settlement of his lawsuit against Pacific Investment Management Co, ending a bitter 2-1/2-year drama over the well-known bond investor's abrupt departure from one of the world's biggest asset managers.

Saudi Arabia sweetens huge Aramco IPO with tax cut

JEDDAH, Saudi Arabia/RIYADH (Reuters) - Saudi Arabia's government has cut the income tax paid by national oil giant Saudi Aramco to smooth the company's initial public offer of shares next year, which is expected to be the world's largest equity sale.

Samsung Electronics says to sell refurbished Galaxy Note 7s

SEOUL (Reuters) - Tech giant Samsung Electronics Co Ltd said on Monday it plans to sell refurbished versions of the Galaxy Note 7 smartphones that were pulled from markets due to fire-prone batteries.

U.S. top court considers changing where patent cases may be filed

WASHINGTON (Reuters) - The U.S. Supreme Court on Monday struggled over whether to upend nearly 30 years of law governing patent lawsuits that critics say allows often-baseless litigants to sue in friendly courts, giving them the upper hand over high-technology companies such as Apple Inc and Alphabet Inc's Google.

Snap surges after IPO banks give flurry of 'buy' ratings

(Reuters) - Shares of Snap Inc jumped over 5 percent on Monday after several of the Snapchat owner's IPO underwriters handed it badly-needed "buy" ratings.

Facebook's Messenger app adds live location-sharing

MENLO PARK, Calif. (Reuters) - Facebook Inc added a feature to its Messenger app on Monday to allow users to share their locations continuously for up to an hour, ramping up competition with tools offered by Apple Inc and Alphabet Inc's Google Maps.

Paul Ryan "Begged On One Knee" For Obamacare Repeal Vote

In September 2008, Treasury Secretary Hank Paulson reportedly begged House speaker Nancy Pelosi on one knee to support his bailout plan.

The day began with an agreement that Washington hoped would end the financial crisis that has gripped the nation. It dissolved into a verbal brawl in the Cabinet Room of the White House, urgent warnings from the president and pleas from a Treasury secretary who knelt before the House speaker and appealed for her support...

It Worked.

* * *

Nine years later, faced with a crisis of his own, Speaker Ryan reportedly got down on one knee to plead with Rep. Don Young of Alaska - the longest-serving Republican in Congress - to support the bill.

He was unsuccessful...

How To Beat Warren Buffett Working Just 40 Days A Year

Want to beat Warren Buffett's investment returns? Don't want to spend a lot of time working at it? Bloomberg's macro strategist Cameron Crise has just the investment process for you...

Last week I wrote about a simple model that is surprisingly effective at profiting from the rebalancing tendencies of passive investors. This in turn brought to mind another well-known instance of behavioral herding that has led to consistent profits -- the so-called "pre-FOMC drift," wherein U.S. equities tend to rally just before and just after FOMC meetings.

What would happen if we combined the rebalancing model with a strategy designed to profit from the pre-FOMC drift? I assessed the performance of going long the S&P 500 on the close two days before each FOMC meeting and exiting the trade on the close of each FOMC day. In measuring the historical performance of such a model, it's important that we don't include any forward-looking information. Some of the best daily S&P 500 returns have come on days featuring intra-meeting easings. Alas, we have to exclude them from our study given our inability to pre-position for them.

Regardless, the performance of the combined model is still pretty fantastic. Since 1994, it has generated an annual return of 8.6% with a volatility of 9.3%. That ratio (0.92) trounces the equivalent for a passive investment in the S&P 500, including dividends (0.69). Not too shabby for 40 days of work per year (two days a month for the rebalancing model plus 2 days for each of the eight annual Fed meetings)! Given that the rebalancing model in particular is a mean-reversion strategy, it stands to reason that it should be a diversifier against a standard passive portfolio. What h ...

Questions Grow Over Devin Nunes' Mystery White House Visit

The mystery surrounding President Donald Trump's claim that he was wiretapped by Barack Obama during the 2016 election campaign deepened on Monday, when it was revealed that House Intel Committee Chair Devin Nunes was on the White House grounds where he reviewed classified information the day before he announced he had seen intelligence that showed members of President Trump's transition team had been caught up in surveillance operations.

U.S. Representative Devin Nunes, who has been embroiled in a firestorm of controversy over the past week, visited the White House the night before announcing on Wednesday that he had information that indicated some Trump associates may have been subjected to some level of intelligence activity before Trump took office on Jan. 20. According to a Daily Beast report, Nunes "went off the grid" that night to meet a source and view dozens of intelligence reports, including accounts of meetings involving President Donald Trump's advisers.

Nunes admitted he was on White House grounds, but not in the White House itself, for meetings "to confirm what I already knew," and he noted no one in the White House knew he was there. Nunes then declined to comment further because he didn't want to "compromise sources and methods."

Then it gets weirder.

As Bloomberg's Eli Lake adds, "CNN is reporting that Nunes had in fact slipped off to the White House grounds last Tuesday to view the documents. And then on W ...

Rand Plunges Most Since US Election After Zuma Aborts International Investor Roadshow

The South African Rand erased its advance to become the worst performer in emerging markets after we detailed earlier that President Jacob Zuma ordered an international investor roadshow aborted - serving as a wake-up call to the country's political risks.

Finance Minister Pravin Gordhan and his deputy, Mcebisi Jonas, were instructed to pull out of meetings in London and the U.S. with investors and ratings companies, the presidency said in a statement Monday, without giving a reason.

"There are some conclusions now being drawn that there's possibly an imminent cabinet reshuffle," said Manisha Morar, an analyst at ETM Analytics in Johannesburg.

"It puts into question our credit rating and the possibility of a downgrade coming sooner than later."

Speculation that Gordhan is on the verge of being fired has swirled for months, as he clashed with Zuma over the management of state companies and the national tax agency. But those concerns were overshadowed by an emerging-market rally this year spurred by a decline in the U.S. dollar.

Today's 3.2% plunge in the Rand is the biggest since the US election.

China Tanked Oil Once, It Can Do It Again

In late 2013, oil was range trading, U.S. drillers were ramping up and China was entering a tightening cycle—much like today. Six months later, the oil market collapsed.

Time to Redo the Math on Tax Reform Prospects

Any investors who think the failure of health-care reform was somehow a positive because it cleared the way for tax reform may be about to be rapidly disabused of that notion.

U.K. Banks Need to Show They Can Withstand a Pound Crisis

U.K. stress tests this year will measure how banks will weather a pound crisis and sharply higher interest rates. That should give a clear view of the risks in U.K. lenders' recent rush into unsecured consumer lending, which has kept the U.K. economy humming since the Brexit vote.

Market Extra: Dollar direction depends on oil prices as well as Trump policies

The greenback is on track to be the worst performing major currency this quarter, and not all of it is due to Trump trade unwinding. Volatility in oil prices has been playing quite a role, according to analysts

Bond Report: Treasury yields fall to 1-month low as Trump's agenda seen faltering

Treasury yields tumble Monday to their lowest levels in a month after President Donald Trump capitulated to a fractious Republican caucus by withdrawing his proposal to repeal and replace Obamacare.

Personal Finance Daily: United Airlines says it's okay to wear leggings and 3 things you should know about your credit score

Monday's top personal finance stories

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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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