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11May2017 Market Close: Wall Street Closed Lower With The DOW Down 24 Points, Both Crude And The US Dollar Slipped Off Session Highs, But Appear To Be Stable

Written by Gary

US stock markets fell today (SPY -0.2%) after worse-than-expected sales drops at Macy's and Kohl's sparked a selloff in shares of department stores and stirred fears that consumers are not spending enough to drive strong economic growth.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Wall Street drops as investors worry about retail

(Reuters) - U.S. stocks fell on Thursday after worse-than-expected sales drops at Macy's and Kohl's sparked a selloff in shares of department stores and stirred fears that consumers are not spending enough to drive strong economic growth.

In Trump's shadow, Fed official says trade barriers a 'dead end'

MUMBAI/NEW YORK (Reuters) - Trade protectionism is a "dead end" that may score political points but will ultimately hurt the U.S. economy, one of the most influential Federal Reserve officials said on Thursday in the central bank's strongest defense yet of open borders in the face of a skeptical Trump administration.

Goldman Sachs to launch new 'dark pool' for stocks on Friday

NEW YORK (Reuters) - Goldman Sachs Group Inc will launch a new private stock-trading venue, known as a "dark pool," on Friday, that is run by exchange operator Nasdaq Inc , according to a note to clients obtained by Reuters.

Macy's and Kohl's weak sales weigh on department store shares

(Reuters) - Macy's and Kohl's reported bigger-than-expected declines in sales in the latest quarter, underscoring department store operators' continued struggle to attract customers amid a slump in demand for apparel and the shift to shopping online.

Less than picture perfect: Snap slumps on slowing user growth

(Reuters) - Snap Inc shares plunged as much as 23.5 percent on Thursday after the owner of the wildly popular Snapchat app's user growth and revenue numbers failed to show that it was adequately dealing with rising competition from Facebook.

U.S. candymakers band together to reduce calories

NEW YORK (Reuters) - Five major chocolate and candy companies announced a joint commitment on Thursday to reduce calories in many sweets sold on the U.S. market, a rare example of cooperation in a competitive industry and testament to a rising consumer distaste for sugar.

U.S. judge approves Volkswagen 3.0 liter, Bosch diesel settlements

(Reuters) - A federal judge on Thursday granted final approval to a plan for Volkswagen AG to pay at least $1.22 billion to fix or buy back nearly 80,000 3.0-liter vehicles in the United States linked to the German automaker's diesel emissions cheating scandal.

CFM says Boeing has engines for 737 MAX that are cleared to fly

SEATTLE (Reuters) - Aircraft engine maker CFM International said on Thursday that Boeing Co has engines in stock for its grounded 737 MAX that are cleared to fly.

Whole Foods board overhaul fails to satisfy activist Jana: source

NEW YORK (Reuters) - The board overhaul announced by Whole Foods Markets Inc on Wednesday has failed to satisfy Jana Partners, according to a person familiar with the matter, signaling that the month-long battle between the organic grocer and activist hedge fund is no nearer to a conclusion.

Spot The Odd One Out

After this week's mixed inflation data, China's 10Y bond yield rose to its highest since Dec 2014, industrial metals stumbled to 2017 lows, and Chinese stocks slumped.

This leaves China under-water in 2017, dramatically decoupled from the rest of the world... something that has not ended well in the past.

Spot The Odd One Out...

And tightening Chinese Monetary Conditions signal trouble ahead for VIX...

Probably nothing.

What Would US Stocks Do If President Trump Suddenly Resigned?

The "Trump trade" in U.S. stocks that was spurred by President Donald Trump's November election has come and gone, according to Tony Dwyer, Canaccord Genuity Group Inc.'s chief market strategist.

As Bloomberg reports, Dwyer compared a "pro-Trump" indicator of the S&P 500's financial, industrial, materials and energy indexes with an "anti-Trump" barometer, based on the benchmark's health-care and technology groups, in a report Wednesday. The ratio between them climbed 16 percent between Sept. 27 and Dec. 8, a month after Election Day, and then gave back almost the entire gain.

Which made us wonder, as ConvergEx's Nicholas Colas asks "what would US stocks do if President Trump suddenly resigned?"

Based on recent price action the answer is clear: rally 3-5%, at least, over a day or two.

The reasoning here is simple. US equities see through the headlines (like the Comey firing) and essentially believe two things.


First, corporate earnings are growing ni ...

The Last Time Greece Did This, Its Stock Market Crashed 70%

It was April 2014 and global equity markets were breathing a sigh of relief as Greece just returned to the international bond markets "proof that the country was recovering from the crisis." 18 months later, Greek stocks had crashed 70%, yields had exploded and bailout 3 (or 4) was necessary. Whichbrings us to today... WSJ reports that Greece Eyes Bond Sale Amid Optimism Over Debt Deal.

Here is the Boston Globe from April 11 2014:

Greece's return to the financial markets with a five-year bond offering Thursday was met with overwhelming demand from investors, and government officials hailed the sale as proof that the country was recovering from a wrenching five-year economic crisis.

Greece raised $4.2 billion on an offering that attracted more than $27.77 billion in orders, the government said. The majority of buyers were foreign pension and investment funds, which received a 4.75 percent interest rate on the bonds.

The relatively low rate signaled a degree of renewed confidence in a country that only a few years ago was on the verge of exiting ...

"You Look Remarkably Calm For Someone Who Issues 2.5 Trillion Out Of Thin Air" - Dutch Politician To Draghi

Used to a fawning press corps and clueless politicians, perhaps Mario Draghi was expecting a warm greeting, a series of softball questions from Dutch lawmakers, and some late night entertainment on Wednesday when the ECB president made a rare visit to the Hague. Instead, what followed, was an "unenviable grilling" from Dutch MPs for nearly two hours in the country's parliament today which, as the FT said, left the usually implacable Italian confrontational and riled up as tempers flared and Dutch politicians probed Draghi on the ECB's record of transparency, and attacked policies they said subsidized southern European countries and harmed Dutch pensioners.

The reason Draghi occasionally travels to national capital cities is to defend the bank's actions: most recently to Berlin, in late September. That trip helped to soothe German lawmakers as the ECB prepared to extend its stimulus again. Draghi was hoping to do the same with Dutch lawmakers who have been far less critical of the ECB's actions compared to their German peers, in the past.

He was in for a surprise.

"You still believe this [QE program] is fully within [the ECB's] framework and you have not been doing any government financing, even though you [will have] bought 2.5 trillion of debt by the end of the year?" asked Pieter Omtzigt, a member of the center-right Christian Democratic Appeal, a sarcastic look spreading on his face.

Naturally, Draghi strongly defended the ECB's decisions, which he said had helped support households throughout the region, including in the Netherlands. He also brushed off calls for a swift exit from QE.

"It is too early to declare success," Mr. Draghi said quoted by the WSJ. "Maintaining the current very ...

AIG Gets a CEO Who Can Stand Up to Icahn

American International Group is poised to choose a strong hand to restore confidence in the insurance giant. AIG plans to name industry veteran Brian Duperreault as chief executive, The Wall Street Journal has reported.

Investors Are Losing Patience With Teva

Teva Pharmaceuticals Industries has gone one quarter too many without taking the drastic action needed to reverse its decline. It risks losing investor confidence, which is a bad thing for a heavily indebted company.

European Stocks Should Break on Through to the Other Side

European stocks have been trying for two decades to rise above current levels. This time, they may succeed.

Key Words: Old guy says demise of 'time-sapping hobby' Snapchat is good for the market

Yes, as many had predicted/hoped for, a dark cloud is hanging over sunny Venice, California. Nobody captured the schadenfreude wafting around Wall Street quite like Dennis Gartman, editor and publisher of the Gartman Letter:

These are the U.S. sports scholarships most likely to go to foreigners

A third of all U.S. tennis scholarships go to athletes born in other countries.

Currencies: Dollar slips against Japanese yen, but gains on euro and British pound

The dollar strengthened against the pound and euro but weakened against the yen on Thursday as economic data offered signs that the labor market is holding steady and inflation is picking up in the U.S.

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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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