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21Apr2017 Market Close: US Stocks Slipped Moderately, WTI Crude Slips On Renewed Concerns Of Increasing U.S. Production, Industrial Businesses' Cash Outflows Concern Investors

Written by Gary

Wall Street closed lower in mostly sideways trading (SPY -0.3%) as investors exercised caution ahead closely contested French presidential election. General Electric Co beat analysts estimates quarterly sales and adjusted earnings and crude prices tumbled more than 2 percent.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

S&P 500 edges lower ahead of French election

NEW YORK (Reuters) - U.S. stocks edged lower on Friday as investors exercised caution ahead of the first round of the closely contested French presidential election, although the S&P 500 remained on track for its first weekly gain in three.

U.S. judge sentences Volkswagen to three-years' probation, oversight

DETROIT (Reuters) - A federal judge in Detroit on Friday sentenced Volkswagen AG to three years' probation and independent oversight for the German automaker's diesel emissions scandal as part of a $4.3 billion settlement announced in January.

Wells Fargo expands settlement to include more customer accounts

(Reuters) - Wells Fargo & Co said it would expand its class action settlement related to the lender's retail sales practices to include customer accounts as early as May 2002.

Exclusive: BT files criminal complaint over Italy accounting scandal

MILAN (Reuters) - British Telecom has filed a criminal complaint with Italian prosecutors over an accounting scandal at its Italian unit and has handed them computer records and also dispatched its head of compliance to Milan to give evidence.

GE shares fall on cash, business worries though profit beats

NEW YORK (Reuters) - General Electric Co reported quarterly sales and adjusted earnings results that beat analysts estimates on Friday, but its shares fell on concerns about some of its industrial businesses and its cash outflow.

Oil dives, U.S. crude below $50 for first time in two weeks

NEW YORK (Reuters) - Oil prices tumbled more than 2 percent on Friday, on track for the biggest weekly drop in a month, on renewed concerns that increasing U.S. production and high inventories will thwart OPEC's attempts to reduce the global crude glut.

Elon Musk on mission to link human brains with computers in four years: report

(Reuters) - Tesla Inc founder and Chief Executive Elon Musk said his latest company Neuralink Corp is working to link the human brain with a machine interface by creating micron-sized devices.

Investors not yet ruffled by looming government shutdown

NEW YORK (Reuters) - U.S. stocks have struggled since the timeline for the Trump administration's pro-growth agenda came into question, but investors appear confident that next week's deadline that could shut down the federal government will not become another market hurdle.

Honeywell profit beats; shares hit record high

(Reuters) - Honeywell International Inc said on Friday its commercial aviation after-sales business was benefiting from robust air travel, while its energy division was getting a lift from stable oil prices, sending shares to a record high.

Stocks Surge On The Week As Investors Shrug Off France Fears, Crude Carnage, & Macro Massacre

Seriously!!

Stocks soared on the week... (2nd biggest short-squeze in 4 months)

Trannies (orange) best week in 4 months

Small Caps (red) best week in 4 months

Nasdaq (black) best week in 2 months

S&P (green) best week in 2 months

Dow (blue) best week in 7 weeks

Seemingly completely ignorant of the fact that this week saw the biggest drop in US Macro data in 6 years...

'Soft' Data suffered the worst week since August and 'Hard' Data tumbles for the 3rd week in a row, remaining well below pre-Trump levels...

VIX saw its biggest weekly drop (over 1ppt) since the first week of January...

Stock Markets Sit Blithely On A Powerful Time Bomb

Authored by Wolf Richter via WolfStreet.com,

No one knows the full magnitude, but it's huge.

How big is margin debt really, and how much of a threat is it to the stock market and to "financial stability," as central banks like to call their concerns about crashes? Turns out, no one really knows.

What we do know: Margin debt, as reported monthly by the New York Stock Exchange, spiked to another record high of $528 billion. But it's only part of the total outstanding margin debt - which is when investors borrow money from their broker, pledging their portfolio as collateral.

An example of unreported margin debt: Robo-advisory Wealthfront, a so-called fintech startup overseeing nearly $6 billion, announced that it would offer its clients loans against their portfolios.

"The dream house. The dream wedding. The dream kitchen. The dream vacation." That's how it introduced it in a blog post this week. "We want you to have your cake and eat it too," it said.

Instant debt "without the hassle of paperwork," it said. "We want our clients to be able to borrow what they need, when they need it, directly from their smartphones." Secured by "your own investments."

It's a great deal as long as stocks are soaring. Clients with at least $100,000 in their account can borrow up to 30% of the account value. It's seductive: No required monthly payments and no payoff date, though interest accrues and is added to the monthly balance. The rate is as low as 3.25%. "How's that for flexibility?" it says.

That's how margin debt is being pushed ...

Freedom Caucus May Be Ready To Flip As New ObamaCare Bill Sports "Significant Changes"

Representative Dave Brat (R-Va), a Freedom Caucus member who voted against the first TrumpCare bill, appeared on CNN earlier this morning to suggest that he may be ready to support a new version of the bill that allows individual states to opt out of certain components of Obamacare that require minimum coverage levels and restrict insurers from charging more to patients with pre-existing conditions. Per The Hill:

"It's not really a new bill — it's the same fundamental bill, but a few pretty significant amendments to it," he said during an appearance on CNN's "New Day."

He said the new plan, the text of which has not been written yet, would lower the cost of health insurance and return responsibility to individual states.

Changes to the new bill would let states apply for waivers for certain ObamaCare regulations, such as a provision preventing insurers from raising an individual's premium based on that person's health.

"It just allows states to opt out of some of the [regulations] to bring down price. And so those are two of the big pieces. A couple little pieces on the regulatory framework, and then I think we can all get to yes," said Brat, who came to Congress after defeating former House Majority Leader Eric Cantor in a primary.

.@RepDaveBrat: New health care plan in GOP pipeline "the same fundamental bill" as one that faltered last month https://t.co/kK1lWALm5T

— New Day (@NewDay)

When Low-Wage Workers Are Better Than Robots

Authored by Justin Murray via The Mises Institute,

Time and time again, these pages have listed numerous benefits of automation and robotics. The discussions point out that mechanization doesn't make us poor, that attempting to tax machines is counter-productive. Automation even makes our jobs safer as we can offload dangerous tasks to a metal creation.

However, automation is not always the best course of action and, as cost effective as automation has proved in many areas of our life, we are finding a rise of businesses beginning to automate for reasons other than improved productivity or cost effectiveness.

The latest news is that a company called Miso Robotics has developed an automatic burger flipper called Flippy. Naturally, media outlets are already writing headlines of how this is replacing jobs. The issue in this case is that this particular form of automation isn't being driven by any kind of cost effective plan but as a result of government action.

When Should Companies Automate?

Before we go any further, we first need to understand where and how automation works and why it works effectively in those areas it is currently u ...

Are Markets Prepared for a French Election Surprise?

Political surprises in 2016 mean investors have taken greater precautions ahead of the French presidential vote—but there could still be fireworks on Monday.

Trump's Steel Battle Looks Unwinnable

A big steel tariff is unlikely do much to boost U.S. growth or employment, given China's advantages.

Banks and Borrowers Are Waiting on Washington

Regional banks are seeing both optimism and angst in the American heartland, reporting that their customers are waiting for clues from Washington before taking action.

February 2017 Leading Index Review: Trends Are Mixed

Written by Steven Hansen

This post is a review of all major leading indicators follows - and their trends are mixed.

Economic Outlook: Twitter earnings: ignore monthly user numbers, hope for a daily increase

With social competition heating up, investors are bracing for unexciting results from Twitter Inc.

Legendary technical investor Robert Prechter is awaiting a depression-like shock in the U.S.

He tells Avi Gilburt in a Q&A that today's mood of optimism will give way to a funk that will rival that of the 1930s.

iHeartRadio parent warns it may not survive another year

The biggest operator of radio stations in the U.S., the iHeartRadio parent headed by Bob Pittman of MTV fame, will include language in its next quarterly report warning investors that it may not survive another year, according to a regulatory filing.

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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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