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26Apr2017 Market Update: Wall Street Trending Upward Along With Oil And The US Dollar

Written by Gary

US stocks hovered near record levels (SPY +0.3%) ahead of a highly anticipated tax plan, while a flood of quarterly earnings reports kept investors busy.

Here is the current market situation from CNN Money

North and South American markets are mixed. The S&P 500 is higher by 0.30%, while the IPC is leading the Bovespa lower. They are down 1.09% and 0.42% respectively.

What Is Moving the Markets

Here are the headlines moving the markets.

Trump administration to unveil tax plan with big cuts for business

WASHINGTON (Reuters) - President Donald Trump will release a tax plan on Wednesday that proposes to sharply slash rates on businesses and overseas corporate profits returned to the United States, officials said.

Congress scrambles to wrap up deal averting government shutdown

WASHINGTON (Reuters) - The U.S. Congress moved closer to a deal to avoid a government shutdown at the stroke of midnight on Friday, as negotiators worked to clear away remaining disputes in a massive spending bill.

Wall Street flirts with record highs; tax plan in focus

(Reuters) - U.S. stocks hovered near record levels on Wednesday ahead of a highly anticipated tax plan, while a flood of quarterly earnings reports kept investors busy.

Twitter posts strong user growth, shares soar

(Reuters) - Shares of Twitter Inc soared on Wednesday after the microblogging service reported better-than-expected user growth in the first quarter, although its revenue fell for the first time since the company's market debut.

P&G profit falls on strong dollar, slow consumer spending

(Reuters) - Procter & Gamble Co , maker of Tide detergent and Gillette razors, reported an 8.3 percent fall in third-quarter profit hurt by a strong dollar and slowing economic growth that dampened consumer spending in several countries.

PepsiCo profit beats but lower margins weigh on shares

(Reuters) - PepsiCo Inc's quarterly revenue and profit beat estimates on demand for its healthier drinks and snacks and higher pricing in North America, but a contraction in the company's gross margins weighed on shares.

Exclusive: Austria investigates Airbus CEO over suspected fraud

VIENNA (Reuters) - Airbus was plunged deeper into legal wrangling over past business dealings on Wednesday when Vienna prosecutors announced a fraud investigation into its chief executive in connection with a $2 billion fighter order over a decade ago.

Tesla offers more sweeteners to try quell unrest at key German supplier

PRUEM, Germany (Reuters) - Luxury electric carmaker Tesla has offered more sweeteners to try to quell unrest at a key German supplier, whose founder and chief executive has not been seen at work for weeks, German labor officials said on Wednesday.

SEC working 'diligently' on plan to test lower exchange fees

NEW YORK (Reuters) - The U.S. Securities and Exchange Commission is preparing a proposal for a pilot plan to test how lowering stock exchange fees would affect market quality and the behavior of market participants, a senior official at the regulator said on Wednesday.

Trump Individual Tax Plan To Have 3 Brackets: 35%, 25%, & 10%

As the minutes tick by ahead of the announcement of "the greatest tax cut in human history," we are getting more information on the personal tax rates (something Treasury Secretary Mnuchin failed to mention earlier). As Fox News reports, in addition to raising deductions, the Trump administration will collapse the current seven-tier bracket system into just three tax brackets under the new plan, taxed at rates of 35 percent, 25 percent and 10 percent.

As Fox News reports, President Donald Trump's tax plan, which will be unveiled Wednesday, calls for a sizable increase to the standard deduction Americans can take when filing taxes, potentially allowing taxpayers to keep more of their income - to the tune of a couple thousand dollars, White House sources told Fox News.

A piece of the proposed tax overhaul would nearly double the standard deductions that both individuals and families can claim on their returns, Fox News reported. Under the proposal, the tax cuts for individuals and married couples filing separately will increase from $6,300 to $12,600. The standard deduction for a married couple filing jointly will jump from $12,700 to approximately $24,000.

White House sources also said the plan would eliminate the marriage pen ...

Canada Housing Regulator Warns Of "Strong Evidence Of Housing-Market Problems"

In an perculiar coincidence, just hours after Home Capital Group imploded in what we dubbed Canada's "New Century" moment, Canada's housing regulator, the Canada Mortgage And Housing Corporation, which describes itself as "contributing to the stability of the housing market and financial system" moments ago the CMHC issued a report, warning that there is "strong evidence of overall problematic conditions."

In the report, the Housing regulator again warns that while conditions in Canada's housing markets are showing some signs of improvement, the official overall rating from the Canada Mortgage and Housing Corporation (CMHC) will be held at "strong evidence of problematic conditions".

Every quarter, the CMHC issues its Housing Market Assessment (HMA) "to provide Canadians with both expert and impartial insight and analysis, based on the best data available in Canada." The report is meant to serve as an "early warning system" for the country's housing markets "an important tool supporting financial and housing market stability." Or lack thereof because as the CMHC said while "conditions in Canada's housing markets are showing some signs of improvement" the official overall rating from the Canada Mortgage and Housing Corporation (CMHC) will be held at "strong evidence of problematic conditions".

As noted in the press release, some of the report highlights are the following:

Overall rating to be held at "strong evidence of problematic conditions".

Evidence of overvaluation at the national level has been downgraded from strong to moderate. It is now present in six centers instead of eight.

Evidence of overvaluation has increased from moderate to strong in Vi ...

Bubble Alert: We've Passed 2007 and Are On Our Way to 1999

The US stock market is officially in a massive bubble based on the one valuation metric that cannot be faked.

Corporations can engage any number of accounting gimmicks to juice their earnings, cash flow, and dividends... for this reason P/E, P/CF and P/DY ratios are all suspect when it comes time to value a corporations.

Sales cannot be gimmicked. Either money comes in the door, or it doesn't. And if a company is caught messing around with its sales numbers, someone is going to jail.

For this reason, Price to Sales is perhaps the single most objective and clear means of measuring stock valuations.

This metric, above all others, you can point to and say, "this is definitively accurate and has not been messed with."

On that note, as Bill King recently noted, today the S&P 500 is sporting a P/S ratio that is massively higher than it was in 2007 and is only marginally lower than it was during the Tech Bubble (the single largest stock bubble of all time for most measures).

(Source: The King Report)

There is simply no way to look at this and not call it a bubble. It is well above the 2007 bubble and only slightly smaller than the Tech Bubble (which everyone now looks

This bubble, like all bubbles, will burst. And when it does, the market will crash, just as it did in 2000 and 2008.

To pick up a FREE investment report outlining three investments that you could make you a ton of money when the bubble bursts...


Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

&n ...

Peso Plunges As White House Plans NAFTA Withdrawal Executive Order

The Mexican Peso is tumbling (and Loonie extending yesterday's timber-tariff-driven losses), as Politico reports, the Trump administration is considering an executive order on withdrawing the U.S. from NAFTA, according to two White House officials.

Politico reports that a draft order has been submitted for the final stages of review and could be unveiled late this week or early next week, the officials said. The effort, which still could change in the coming days as more officials weigh in, would indicate the administration's intent to withdraw from the sweeping pact by triggering the timeline set forth in the deal.

The approach appears designed to extract better terms with Canada and Mexico, and judging bvy the FX market's reaction, they agree...

Trump in recent weeks has stepped up his rhetoric vowing to terminate the agreement all together.

"NAFTA's been very, very bad for our country," he said in a speech last week in Kenosha, Wis.

"It's been very, very bad for our companies and for our worker ...

There's Trouble in Capital One's Wallet

Worries over credit-card indebtedness rise as Capital One Financial raises its estimate for loan losses this year.

Credit Suisse's Smarter Plan to Raise Capital

Credit Suisse capital raise is a better alternative to its now abandoned spinoff plan. But claims that the bank has money to invest in growth and to pay better cash dividends from this year onward should be taken with a pinch of salt.

Google's Costs Don't Always Click

How Google generates advertising revenue that now totals nearly $80 billion a year is no easy feat—especially at the double-digit rates the company has been reliably pulling off for years.

Project Syndicate: The real reason for the trade deficit? Put spending habits

It's easy to blame foreign governments instead of our own spending, savings and investment choices/

Project Syndicate: Trump calls Nafta the 'single worst trade deal' — but here's the truth

Negative effects on U.S. manufacturing employment have been small to non-existent, says Laura Tyson.

MarketWatch First Take: Here's how much Trump tax reform is already built into stocks

As President Donald Trump releases the "principles" of his tax reform, it's worth delving into how much is already baked into the stock market.

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