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03May2017 Market Update: Wall Street Fractionally Lower, Closing Expected To Be In The Red, WTI Crude Slips Into The 47 Handle, Weak First Quarter Reported

Written by Gary

US stocks were lower in late morning trading today (SPY -0.3%) as index-heavyweight Apple's disappointing report put a dampener on what has been a largely upbeat earnings season.


Here is the current market situation from CNN Money

North and South American markets are lower today with shares in Brazil off the most. The Bovespa is down 0.93% while Mexico's IPC is off 0.83% and U.S.'s S&P 500 is lower by 0.33%.

What Is Moving the Markets

Here are the headlines moving the markets.

Wall St. lower as Apple weighs

(Reuters) - U.S. stocks were lower in late morning trading on Wednesday as index-heavyweight Apple's disappointing report put a dampener on what has been a largely upbeat earnings season, with major stock indexes hovering near record highs.

U.S. private hiring slows, services growth speeds up in April

(Reuters) - U.S. companies hired workers at a slower but still-solid pace in April, while the domestic services sector grew more than expected, supporting the notion the economic expansion remains on track despite a weak first quarter, private data released on Wednesday showed.

Time Warner beats estimates; sees lower advertising

(Reuters) - Time Warner Inc reported a better-than-expected quarterly profit, as revenue from box office hits including "The LEGO Batman Movie," and "Kong: Skull Island" helped offset declining ad sales.

Taco Bell Naked Chicken Chalupas, lower taxes boost Yum's profit

(Reuters) - Yum Brands Inc posted a better-than-expected quarterly profit, helped by lower taxes, vigorous sales of Taco Bell's Naked Chicken Chalupas and lower costs at KFC restaurants.

American Air cuts two inches of legroom on some seats in new jets

NEW YORK (Reuters) - American Airlines is shaving off an additional two inches of economy class legroom on some of the seats in its new Boeing Co 737 MAX jets, just as relations between U.S. airlines and their passengers sink to a new low.

GM expands car-sharing program Maven to get a bite of 'gig' economy

(Reuters) - General Motors Co said on Wednesday it would expand its car-sharing operation, Maven, in the U.S. ride services market as the automaker looks to benefit from a growing 'gig' or freelance economy.

Caterpillar says probe related to tax, export activities

(Reuters) - Caterpillar Inc said on Wednesday said that the ongoing investigation related to its tax and export activities will not have a material adverse effect on its results.

Uber in U.S. court reckoning on possible shutdown of self-driving program

SAN FRANCISCO (Reuters) - Uber Technologies Inc [UBER.UL] goes before a U.S. judge on Wednesday to fight for the right to continue work on its self-driving car program, the latest phase in a courtroom battle over trade secrets that threatens to topple a central pillar of Uber's growth strategy.

Oil dips on small U.S. crude stock drop, weak gasoline demand

NEW YORK (Reuters) - Oil prices edged lower Wednesday after U.S. government data showed a smaller-than-expected decline in domestic crude inventories and weak demand for gasoline, feeding concerns about a supply glut.

Chris Whalen: "The Dollar Super-Cycle Ends"

Authored by Chris Whalen via InstitutionalRiskAnalyst.com,

What do the US residential housing market, the stock market and the dollar all have in common? All of these markets represent bubbles created and driven by the aggressive social engineering of the Federal Open Market Committee.

We live in an age of asset bubbles rather than true economic growth. The investment world is skewed by the latest round of monetary policy experimentation by the Fed, including years of artificially low interest rates and trillions of dollars in "massive asset purchases," to paraphrase former Fed Chairman Ben Bernanke.

These bubbles are caused and magnified by supply constraints, not an abundance of credit. Whether you look at US stocks, residential homes in San Francisco or the dollar, the picture that emerges is a market that has risen sharply, far more than the underlying rate of economic growth, due to a constraint in the supply of assets and a relative torrent of cash chasing the available opportunities.

Likewise with the dollar, the image of the financial markets is one of constraints rather than policy ease. Since the middle of 2014, the value of the dollar against major currencies has risen sharply, suggesting a shortage of liquidity or at least a relative preference for dollars vs other fiat currencies.

Carmageddon: After Abysmal April Sales, Auto Workers Prepare For "Extended" Summer Shutdowns

Auto OEMs typically shut down plants once a year during the summer to retool for model changeovers and whatever general maintenance is required. But this year summer shutdowns will be about much more than just retooling plants. With inventory soaring on dealer lots, auto OEMs will likely have no choice but to extend their typically summer shut down schedule and it will take a 'yuge' toll on the 1,000s of auto workers that are considered "short term" employees and not eligible for unemployment benefits...the folks who pretty much single-handedly voted Trump into the White House.

As we noted yesterday (see "Auto Bloodbath: Every OEM Misses April Sales Estimates As Inventories Continue To Soar"), after an abysmal March print and growing speculation on wall street that auto sales are looking less like a "plateau" (Ford's label not ours) and more like a debt-fueled bubble on the verge of an epic collapse, auto investors were looking toward April auto sales for signs of hope. Unfortunately, the "hope" trade failed to materialize as every single, major auto OEM missed their April sales estimates in fairly spectacular fashion.

The total auto SAAR came in at 16.8mm for April, compared to hopes of 17.1mm, and the YoY change in unit sales was the worst since 2011.

Auto

Meanwhile, inventory days continued to soar to multi-year highs with GM leading the pack on "channel stuffing" with over ...

Germany Hit By Merkel's Imported Crime Wave

Authored by Vijeta Uniyal via The Gatestone Institute,



According to the Germany's annual crime report, compiled by the Federal Crime Bureau (BKA), there has been a more than 50% rise in migrant crime in the country compared to the year before.

They not only indulge in petty crime but have come to dominate serious and violent crime in Germany.

European mainstream media may keep on putting a positive spin on Merkel's "courageous" and "selfless" stance, but her policy continues to incur heavy economic, social and human cost, not only on Germany, but on the cultural future of European civilisation.

At the height of the European migrant crisis in early 2016, when masses of migrants were pouring into Europe, the German Green Party Chairwoman Katrin Göring-Eckardt could not control her joy. "We have just received an unexpected gift in the form of people," she told her fellow Germans, reminding them to be grateful. This gift, she said, was going to make the country "more religious, more colourful, more diverse and younger." It was gift, it turns out, that keeps on giving.

According to the country's annual crime report, compiled by the Federal Crime Bureau (BKA), there has been a more than 50% rise in migrant crime in the country compared to the year before.

The German newspaper Die Welt, which received an advance copy of the annual crime report, wrote:

Obamacare Repeal Suddenly Looks Possible After Two Key GOP Holdouts Flip

In what may be a critical flip for the passage of the Republican healthcare bill - not to mention boosting Trump's image as dealmaker - moments ago Republican reps. Fred Upton and Billy Long both said Wednesday they will support the GOP's ObamaCare repeal-and-replace bill with the addition of a new amendment Upton drafted. Until this morning, both had opposed the bill, and prompted us to write on Monday that Republicans are just one vote away from failure again.

The two Republicans told reporters at the White House after a meeting with President Trump that they are ready to vote for the bill once a new amendment Upton helped devise - which would boost funding for people with pre-existing conditions - is added. The amendment would provide $8 billion over the next 5 years to reduce premiums and other costs for those with pre-existing conditions who have a gap in coverage and reside in states that received waivers from some of Obamacare's requirements.

Quoted by Bloomberg, Upton said that "I think it is likely now to pass the House" but hedged, adding that he's "not in the whip count" and can't definitively say there are enough votes for the bill to pass. Upton said a vote could be held as soon as Thursday.

Majority Whip Steve Scalise told The Hill that the Upton amendment meant that he was putting both Upton and Long back in the "yes" column for his internal whip count. House GOP Conference Chairwoman Cathy McMorris Rodgers (R-Wash.) told The Hill the late change "absolutely" added net votes to the GOP tally.

Then again, m ...

What Apple Can't Buy

In the case of Apple's growing cash hoard, there is actually less than meets the eye because most of it resides offshore.

Drug Pricing Gets Worse, a Raid by the Feds Doesn't Help

Price declines appear to be accelerating ahead of earnings for big drug companies.

Reliability Pays for BNP Paribas Investors

French bank boosted by stronger investment banking recovery than European rivals.

April 2017 ISM and Markit Services Mixed Views of the Service Sector

Written by Steven Hansen

The ISM non-manufacturing (aka ISM Services) index continues its growth cycle and improved. Markit PMI Services Index marginally improved showing little expansion.

In One Chart: America will soon be overrun by senior citizens. Yes, that includes you

A financial breakdown of the almost 47 million Americans aged 65 and older.

Market Extra: European equities a buy, but Trump policy inaction a risk: Eaton Vance

European equities are a buy, but there's a risk posed from the U.S. if Trump can't deliver on campaign promises including bolstering growth in the world's largest economy, says Eaton Vance.

Retirement-age Americans are failing this financial literacy quiz

Less than 1% earned an A and only 5% got a B.

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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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