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17May2017 Market Update: Wall Street Falls Sharply On Slow News Day, Crude Prices Higher And Volatile, US Dollar Give Way To Euro

Written by Gary

US markets gaped down over one percent at the opening and have been trading mostly sideways (SPY -1.1%) during the early afternoon session. The SP 500 and the Dow (-245 points) experiencing their worst day in eight months as a leaked memo by former FBI chief Comey spooked investors.


Here is the current market situation from CNN Money

North and South American markets are sharply lower today with shares in Brazil off the most. The Bovespa is down 1.53% while U.S.'s S&P 500 is off 1.13% and Mexico's IPC is lower by 1.02%.

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.

What Is Moving the Markets

Here are the headlines moving the markets.

S&P, Dow set for worst day in eight months on Trump turmoil

(Reuters) - The S&P 500 and the Dow were headed for their worst day in more than eight months as reports of a leaked memo by former FBI chief James Comey spooked investors, raising questions about whether President Donald Trump tried to interfere with a federal investigation.

Judge may reject parts of Wells Fargo account abuse settlement

(Reuters) - A federal judge signaled that he may reject parts of Wells Fargo & Co's proposed $142 million settlement with customers for whom it opened millions of unauthorized accounts.

Ford to cut 1,400 white-collar jobs in North America, Asia

(Reuters) - Ford Motor Co said on Wednesday it plans to cut 1,400 salaried jobs in North America and Asia through voluntary early retirement and other financial incentives as the No. 2 U.S. automaker looks to boost its sagging stock price.

Target optimistic on full-year forecast after profit beat

(Reuters) - Target Corp reported higher-than-expected quarterly profit and sales and set an optimistic tone for the year, saying its full-year profit could come in at the higher end of its forecast.

Ralph Lauren names P&G executive Patrice Louvet as CEO

(Reuters) - Ralph Lauren Corp named Procter & Gamble executive Patrice Louvet as chief executive, more than three months after his predecessor left the firm, following differences with founder Ralph Lauren over the direction of the company.

Wall Street regulator detects fewer signals of illegal 'layering'

WASHINGTON (Reuters) - A surveillance program by Wall Street's self-funded regulator has seen a huge decline in alerts that may indicate potential market manipulation, after it launched a new initiative last year to help brokerages spot problematic clients.

Germany's Lidl to price groceries up to 50 percent below U.S. rivals

NEW YORK (Reuters) - German discount grocery chain Lidl, which is opening its first U.S. stores this summer, said its products would be up to 50 percent cheaper than competitors, which are already caught up in a price war.

Qualcomm sues four Apple contract manufacturers

(Reuters) - Qualcomm Inc filed a complaint against Foxconn Technology Group and three other Apple Inc contract manufacturers for not paying royalties, firing the latest salvo in its fight with the iPhone maker.

Chinese state media says U.S. should take some blame for cyber attack

BEIJING (Reuters) - Chinese state media on Wednesday criticized the United States for hindering efforts to stop global cyber threats in the wake of the WannaCry "ransomware" attack that has infected more than 300,000 computers worldwide in recent days.

"Look At The Way I've Been Treated Lately" Trump Tells Coastguard Grads "Don't Let Critics Get You Down"

The speech was going great.. and then out of nowhere...

*TRUMP: LOOK AT THE WAY I'VE BEEN TREATED LATELY

*TRUMP: NO POLITICIAN IN RECENT HISTORY HAS BEEN TREATED WORSE

*TRUMP: DON'T LET CRITICS GET IN THE WAY OF YOUR DREAMS

*TRUMP: DON'T GIVE IN, DON'T BACK DOWN

"Things are not always fair... things happen to you that are not always warranted, but you have to put your head down and fight, fight, fight..."

In his first public appearance since the "memo-gate" debacle dropped, President Trump is scheduled to speak at commencement ceremonies at the U.S. Coast Guard Academy on Wednesday morning.

Live Feed...

Jack Welch Warns: "An Impeachment Proceeding Would Blow The Market Away"

Appearing on CNBC's Squawk Box this morning, the former CEO of General Electric, Jack Welch, offered some rather ominous market predictions in the event of a Trump impeachment:

"An impeachment proceeding would blow the market away."

And while he doesn't seem to be in the impeachment camp, Welch also took aim at Trump saying that he's "on the right agenda" but has "crappy management practices."

Welch also said Trump's firing of James Comey as FBI director was a "rookie mistake." He added, "You don't make any friends doing it the way [Trump] did it."

"I think without question we have a guy that's on the right agenda with crappy management practices," Welch said, giving the president a "D minus" on his management skills.

Meanwhile, in a comment that won't earn him any new friends with his former employer, Welch also weighed in on the non-stop witch hunt for Trump's alleged collusion with Russian officials to throw the 2016 election, saying that "Democrats and the press are tearing the fabric of this economy apart."

Forward to the 1:25 mark for the relevant comment:

Of course, the market's reactions to Trump's missteps so far would seem to confirm Welch's sentiments...

Paper Vs. Physical: The Amazing Amount Of Leverage In The Silver Market

Authored by Steve St.Angelo via SRSroccoReport.com,

While many precious metals investors realize the massive amount of paper trading leverage taking place in the gold market, they should see what is going on in the silver market. In a previous article, I provided data showing that an amazing $9.8 trillion of notional gold paper trading took place on the world's exchanges in 2016 versus $42 billion in actual physical gold investment. This was a paper to physical ratio of 233 to 1.

However, the amount of paper trading leverage in the silver market is much higher than that.

But, before I get into the specifics of the paper silver market trading leverage, let's take a look at the pathetic amount of physical silver investment versus Central Bank asset purchases. According to the data in the recently released 2017 World Silver Survey, total physical silver investment for 2016 came in at a whopping $4.4 billion:

That's correct. When we add up all the global silver investment demand last year, it adds up to a measly $4.4 billion. It was nearly ten times less than all physical gold investment in 2016. The analysts who wrote 2017 World Silver Survey, arrived at the $4.4 billion figure by using the following data:

Global Silver Investment 2016 (in million oz - Moz):

...

Republican Amash Breaks With Party, First To Raise Trump Impeachment

In what may be the most material development of the day, moments ago GOP Representative Justin Amash (R-Mich.) said the report that President Trump pressured ousted FBI Director James Comey to end an investigation would merit impeachment if true, becoming the first Republican lawmaker to break from the party and hint at impeachment.

Amash tells reporters that if Comey memo allegations are true, it's grounds for impeachment. Says he trusts Comey more than Trump.

— Katie Bo Williams (@KatieBoWill) May 17, 2017

Subseqeuentlly, when asked by The Hill if the details in the memo would merit impeachment if they're true, Amash reiterated "Yes.... But everybody gets a fair trial in this country," Amash added as he left a House GOP conference meeting.

When asked by another reporter whether he trusted Comey's word or Trump's, Amash said: "I think it's pretty clear I have more confidence in Director Comey."

According to the Hill, Amash has been one of only two House Republicans to cosponsor a Democratic bill to establish an independent commission to investigate Russia's role in the election. Rep. Walter Jones (R-N.C.) has also endorsed the legislation.

Amash is a frequent conservative critic of the Trump administration, and in the past has broken with the White House on a variety of issues, including healthcare reform, NSA surveillance and the Justice Department's new tougher sentencing guidelines.

And now all eyes on John McCain who many speculated would be the most vocal Republican opponents of Trump, and the first GOPer to recommend impeachment of his old nemesis.

Following the report, the USD tumbled to fresh intraday lows.

Move Over Dollar, the Euro Is in the Driver's Seat

U.S. political turbulence and economic disappointment, combined with unrealized election fears in Europe, mean the euro could gain further against the dollar.

Tencent Faces Rising Costs to Grab Audience

Chinese internet giant Tencent is doing a great job keeping its users glued to their smartphones, but to meet increased investor expectations, that screen time has to turn into more money.

Banks Can Go Higher Even Without Trump's Help

Fundamental trends still argue in favor of owning bank shares, even if the Trump presidency disappoints.

Best memorial ever? Send ashes into orbit on Elon Musk's SpaceX rocket for $2,500

San Francisco-based Elysium Space said this week that its craft will soon shoot into space as part of a ride-share mission aboard Elon Musk's SpaceX Falcon 9 — and your loved one's ashes can go along for $2,490.

Market Extra: Wall Street's 'fear gauge' threatens largest daily pop in 8 months

A popular gauge of fear on Wall Street on Wednesday is on track to see its biggest daily jump in eight months, according to FactSet data.

Currencies: Dollar falls as Trump worries grow; yen spikes 1.5%

The dollar fell against its major rivals Wednesday, extending its recent weakness amid escalating U.S. political concerns following a report that President Donald Trump tried to influence an FBI probe into links between his inner circle and Russia.

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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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