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28Apr2017 Pre-Market Commentary: Wall Street Expected Top Open Fractionally Higher, But Trading Will Mirror Yesterday's Session And Remain In A Tight Band, Crude Prices Starting To Move Upward

Written by Gary

U.S. stock index futures were little changed this morning (SPY +0.1%) as investors absorb not-so-good news that the US Q1 GDP grew at 0.7% pace vs. 1.2% estimate.


Here is the current market situation from CNN Money

European markets are mixed. The CAC 40 is higher by 0.15%, while London's FTSE 100 is off 0.46%. Shares in Germany are unchanged with the DAX at 12,442.55.

Looking at the last three columns (below), the first one (Actual), is what was reported this morning. The second column (Forecast) is what analysts had forecast and the third column is the previous report. Full calendar HERE.

Wall Street expected to open mixed as Trump warns of conflict with North Korea

What Is Moving the Markets

Here are the headlines moving the markets.

Frugal U.S. consumers seen holding back first-quarter GDP

WASHINGTON (Reuters) - The U.S. economy likely hit a soft patch in the first quarter as an unseasonably warm winter and rising inflation weighed on consumer spending, in a potential setback to President Donald Trump's promise to boost growth.

Futures little changed ahead of first-qtr GDP data

(Reuters) - U.S. stock index futures were little changed on Friday as investors awaited the first-quarter report on gross domestic product, while assessing quarterly earnings.

U.S. truck, crossover sales spark jump in GM first-quarter profit

DETROIT (Reuters) - General Motors Co on Friday reported a much better-than-expected first-quarter net income driven by strong sales of its profitable large pickup trucks and crossovers in the United States, sending its shares up nearly 2 percent in premarket trading.

Exxon Mobil profit more than doubles on cost cuts, oil price rise

HOUSTON (Reuters) - Exxon Mobil Corp , the world's largest publicly-traded oil producer, said on Friday its quarterly profit more than doubled due to rising crude prices and cost cuts.

Tech firms race to spot video violence

SINAGPORE (Reuters) - Companies from Singapore to Finland are racing to improve artificial intelligence so software can automatically spot and block videos of grisly murders and mayhem before they go viral on social media.

Google's search for non-ad revenue puts spotlight on cloud, Pixel

(Reuters) - Alphabet Inc's non-advertising business, which houses its cloud unit, Pixel smartphones and the Play store, has long been sandwiched between Google's advertising juggernaut and its moonshot ventures that have captured popular imagination.

U.S. refiners bet on strong exports to balance market

NEW YORK (Reuters) - U.S. refiners have come out of maintenance season betting that big exports to Mexico and South America will help alleviate high product inventories and boost margins as the critical summer driving season nears.

Fed moving appropriately; ECB too hesitant: El-Erian

(Reuters) - The U.S. Federal Reserve is moving appropriately on the path to unwind asset purchases and normalize rates, while the European Central Bank (ECB) may be too hesitant, said Mohamed El-Erian, chief economic advisor at the Allianz Group.

Exclusive: Tesla's Klaus Grohmann ousted after clash with CEO Musk - sources

FRANKFURT (Reuters) - Tesla executive Klaus Grohmann was ousted last month after a clash with Chief Executive Elon Musk over the strategy of Grohmann's firm, which Tesla had acquired in November, a source familiar with the matter told Reuters.

Frontrunning: April 28



World stocks pause near record highs (Reuters)

'If there's a shutdown, there's a shutdown,' Trump says (Reuters)

Trump's Tax Plan Hits First Land Mine: Blue State Republicans (BBG)

Congress to Vote on Stopgap Bill to Keep Government Open (WSJ)

Tillerson Seeks to Boost Pressure on North Korea at UN Meeting (BBG)

Why Trump Decided to Back Off Nafta Threat (WSJ)

China's Didi Raises Over $5.5 Billion in Record Tech Funding (BBG)

Trump spurns Taiwan president's suggestion of another phone call (Reuters)

Anything-But-Soft Earnings Data Starting to Smack of Rally Years (BBG)

How North Korea gets its oil from China: lifeline in question at U.N. meeting (Reuters)

Sun and Sand Back in Style as New Yorkers Flock to Booming South (

Regulation fears may impede silver manipulation

Fear of regulation may impede bank's from manipulating London's silver benchmark


  • New regulations in 2018 have spooked bullion banks and silver fix operators

    Lack of liquidity in silver fix auction has lead to high volatility in the market

    Silver benchmark has strayed from spot price multiple times since 2016

    No new silver benchmark operator lined up to take over in the Autumn

    No smoke without fire as actions point to silver price manipulation

    Silver remains suppressed and at a low price for investors stocking up

    Gold fixing in London at NM Rothschild and Sons began in September 1919

    Sim ...

Just These Five Companies Account For 28% Of The S&P's 2017 Returns

On the last day of the busiest earnings week in a decade, here is a striking statistic from Goldman Sachs, showing just how dominant a handful of large cap companies have become in terms of both overall profitability and market impact:

Year to date the top 10 contributors have combined to account for 37% of the S&P 500 index return (more than double their market cap representation of 17%). The concentration among the top five is even greater, with those firms - AAPL, FB, AMZN, GOOGL, and MSFT - accounting for 28% of the return and 12% of market cap.

Some further perspective, courtesy of the WSJ, which notes that the combined market capitalization of AMZN, MSFT, INTC and GOOG makes up about 8% of the Index's total.

Throwing in Apple and Facebook puts about 13% of the S&P 500's combined market cap into the hands of just six companies. This wasn't always the case. Ten years ago, Apple, Amazon, Google, Microsoft and Intel made up just 5% of the S&P 500's market cap, while Facebook was four years away from becoming a public company.

...

Global Stocks Pause Ahead Of GDP Report; Nasdaq Hits Fresh Record High

Despite yesterday's whopping beats by Amazon and Google which sent the Nasdaq to new record highs after hours, and brought Jeff Bezos "this close" to overtaking Bill Gates as the world's richest man, this morning futures S&P futures are little changed ahead of the closely watched Q1 GDP report, European stocks and Asian equities are slightly lower, oil is higher after Russia's energy minister Novak said Russia had reached the 300kbpd oil cut per the OPEC pact, and the dollar was modestly in the red.

Concern about global trade and Trump's "America First" policies kept appetite for risk at bay on Friday, setting world stocks on the path to a sluggish end to what will still be their fifth straight month of gains, per Reuters. Key overnight data included a disappointing GDP print out of the UK, where Q1 growth came in at 2.1%, below the 2.2% expected, which however failed to dent the ongoing short squeeze in sterling, as well as the hot Eurozone CPI print, with headline inflation rising more than expected at 1.9%, while core CPI printed at a 4 year high of 1.2%.

Economic data and earnings took a back seat, and global equities retreated, trimming a sixth straight monthly advance, as geopolitical concerns lingered following the main overnight news which was a soundbite from a Trump interview with Reuters in which he warned that a "major, major" conflict with North Korea is possible.

In an interview with Reuters, Trump called the five-year-old trade pact with South Korea "unacceptable" and said it would be targeted for renegotiation after his administration completes a revamp of the North A ...

Pressure Mounts on Barclays in More Ways Than One

UBS appears to grab more of U.S. investment banking recovery than its U.K. rival.

Sony Finds Success in All the Right Places

Sony reported strong results Friday but what should excite investors are the rosy forecasts for the future.

Tech's Titans Go From Big to Bigger

The newfound prominence of big tech companies now can be chalked up to a few factors.

Woman shot, six arrested in London as police foil terror plot

Six people have been arrested and a woman remains in the hospital after London police late Thursday raided a house in the U.K. capital as part of an ongoing counter-terrorism investigation.

The Ratings Game: This is 'as good as it gets,' says Pacific Crest as it downgrades Amazon

With 84% of brokers on FactSet rating Amazon a buy, a lower rating than that seems a rare thing. But on the heels of blockbuster results, Pacific Crest analysts have spotted some concerning trends and cut shares to sector weight.

Need to Know: The most over-loved investments as tech and Trump keep stealing the spotlight

The S&P 500 might end up stuck below its March 1 record close as the Trump 100-day milestone passes, even Alphabet and Amazon leaping. Tech stocks are overbought, says today's call, along with European equities, copper and other areas.

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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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