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19May2017 Pre-Market Commentary: Wall Street To Open Higher, WTI Crude Trading In The Lower 50 Handle, The US Dollar Has Passed The Torch Back To The Euro

Written by Gary

US stock future indexes point to a higher opening (DOW +2%). Oil is over $50/bbl and global equities are flashing green as President Trump visits Saudi Arabia, Israel and the Vatican. The US dollar limped toward its worst week since last July.


Here is the current market situation from CNN Money

European markets are higher today with shares in France leading the region. The CAC 40 is up 0.49% while London's FTSE 100 is up 0.34% and Germany's DAX is up 0.21%.

Thursday's Key Earnings

Alibaba (NYSE:BABA) +0.5% on mixed results.
Applied Materials (NASDAQ:AMAT) +0.4% AH on record profits.
Gap (NYSE:GPS) +4.1% AH helped by Old Navy.
McKesson (NYSE:MCK) +8.2% AH on fiscal Q4 beat.
Salesforce (NYSE:CRM) +1.4% lifting its outlook.
Wal-Mart (NYSE:WMT) +3.2% on solid comparable sales.

Today's Markets

In Asia, Japan +0.2%. Hong Kong +0.2%. China flat. India +0.1%.
In Europe, at midday, London +0.5%. Paris +0.5%. Frankfurt +0.1%.
Futures at 6:20, Dow +0.1%. S&P +0.2%. Nasdaq +0.2%. Crude +1.2% to $50.26. Gold +0.1% to $1253.50.
Ten-year Treasury Yield flat at 2.24%

Today's Economic Calendar

9:15 Fed's Bullard: U.S. Monetary and Economic Policy
1:00 PM Baker-Hughes Rig Count
1:40 PM Fed's Williams Speech

Companies reporting earnings today »

What Is Moving the Markets

Here are the headlines moving the markets.

Dollar remains weak as beating eases for global stocks

LONDON (Reuters) - The dollar limped toward its worst week since last July on Friday and world stocks headed for their first weekly fall in five, as storms surrounding Donald Trump's U.S. presidency and Latin America's biggest economy, Brazil, began to calm.

Bain, KKR, Broadcom among suitors lining up for Toshiba's chips business

TOKYO (Reuters) - Suitors including private equity firms KKR & Co LP, Bain Capital and U.S. chip maker Broadcom Ltd are lining up for Toshiba Corp's semiconductor business, sources familiar with matter said ahead of a deadline for second-round offers on Friday.

Oil heads for second week of gains as output cut extension expected

LONDON (Reuters) - Oil prices were heading on Friday for a second week of gains on growing expectations that big crude exporters will extend output cuts to curb a persistent glut in inventories.

SoftBank boss follows Trump to Saudi to launch $100 billion fund

TOKYO (Reuters) - Some six months after his visit to Donald Trump's Manhattan mansion cheered investors, Masayoshi Son, Japan's richest man, is set to follow his friend to Saudi Arabia as the new U.S. president makes his first overseas trip since taking office.

Campbell Soup misses profit, sales estimates; trims sales forecast

(Reuters) - Campbell Soup Co reported lower-than-expected quarterly sales and profit, hurt by higher promotions and weak demand for condensed soups, broths and V8 vegetable juices, and warned that its full-year sales could decline.

Four car makers settle claims over Takata inflators for $553 million

WASHINGTON/TOKYO (Reuters) - Four automakers agreed to a $553 million settlement to address class-action economic loss claims covering owners of nearly 16 million recalled vehicles with potentially defective Takata airbag inflators, court documents filed on Thursday showed.

Treasury's Mnuchin: 'We do not support breaking up banks'

WASHINGTON (Reuters) - U.S. Treasury Secretary Steven Mnuchin told lawmakers on Thursday that the Trump administration does not support separating investment and commercial banks.

BofA opens debate on lowering mortgage down payments

(Reuters) - The head of Bank of America Corp , the United State's fourth-biggest mortgage lender, said on Thursday banks would be able to supply a bigger share of funding for home purchases if the standard down payment for buyers was cut to 10 percent from 20 percent.

Time up on Trump trade, hedge funds look abroad

LAS VEGAS (Reuters) - Hedge fund managers said they are looking beyond the United States for investment ideas as the so-called Trump bump stock market rally shows signs it may be fizzling.

Bitcoin Soars Above $1950 (Despite Losing Crypto Dominance)

Despite Bitcoin dropping below 50% of total cryptocurrency market cap for the first time, the dominant virtual currency has continued to soar this week, breaking above $1950 this morning (as the dollar drifts lower).

Bitcoin is now up 110% against the dollar in 2017...

And this comes as Bitcoin loses its dominance. As the first of its kind to emerge, bitcoin has become synonymous with "cryptocurrency". But lately it's been joined by a lot of others - which together now account for more than half of the cryptocurrency ecosystem:

For First Time, Bitcoin Accounts for Less Than Half Of Market Cap Of All Cryptocurrencies

(Forbes) - For the first time, Bitcoin's market capitalization as a percentage of all cryptocurrencies has dropped to below 50%.

It is a symbolic turning point for the first cryptocurrency, which for a long time accounted for more than 90% of the value of all blockchain-based assets combined, particularly through a period when so-called alt-coins that were only minor tweaks to bitcoin proliferated.

Its market capitalization then comprised over 80% of all cryptocurrencies for years, a range that held true until two months ago when it dipped below 80% and not only did not recover but did a quick dive straight down.

Gold and Silver Bullion Coins See Sales "Explosion" In UK On "Wave Of Political Turmoil"

Gold and Silver Bullion Coins See Sales "Explosion" In UK On "Wave Of Political Turmoil"

by Jan Harvey of Reuters

In a warehouse a dozen miles to the northwest of Cardiff, the Royal Mint is running its machines through the night to keep up with demand for one of the big beneficiaries of the last year's political turmoil - gold and silver bullion.

Gold Sovereigns

The 1,100-year-old Mint, based here since the 1960s, is producing 50 percent more gold bullion coins and bars than it was this time last year, director of bullion Chris Howard says, while its sales in January rose by a third.

...

Purchased In 1984 For $19,000, Basquiat Painting Sells For "Mind-Blowing" $111 Million

It could be the single best unlevered investment in recent history.

A portrait by New York artist Jean-Michel Basquiat sold for a remarkable $110.5 million - nearly double the $60 million expected take - during a Sotheby's auction Thursday night in New York, according to Bloomberg. The sale set a new record for an American artist, and has become one of now 10 paintings in the "$100 Million Club," according to the New York Times.

The sale of the painting, "Untitled," made for a thrilling moment at Sotheby's postwar and contemporary auction as at least four bidders on the phones and in the room sailed past the $60 million level at which the work — forged from oil stick and spray paint — had been guaranteed to sell by a third party.

The Basquat is now among the most-expensive pieces of contemporary art ever auctioned. It set a new record for any U.S. artist at auction, besting the $105.4 million paid four years ago for Andy Warhol's "Silver Car Crash (Double Disaster)."

"It's a really historical moment," said Larry Warsh, a longtime Basquiat collector. "It does cement this artist once again." Warsh also said that the sale was "mind-blowing" and added that "I'm not usually impressed by numbers, but this is really out of the boundaries."

But what's even more striking is that the painting, created in 1982, was first bought at

Bill Blain: "Take The Red Pill, And Let's See How Deep This Rabbit Hole Takes Us"

From "Blain's Morning Porridge - May 19" by Bill Blain of Mint Partners

""I'm shocked - shocked - to find that gambling is going on in here.."
"Your winnings sir.""

Wow. My current bearishness got me well and truly Bull-Pimp Slapped yesterday!

Couple of clients actually called me - rather than just emailing - to tell me how absolutely wrong I was about Global Markets being on the verge of something quite horrid. I was told the global economy and outlook remains in positive shape: stock markets are not overvalued, stocks have fully discounted Trump, fundamentals remain resolutely bullish, earnings are strong and rising, and broadly that I should shut-the-***k up and stop upsetting the readership.

"For God's sake Blain.. you are scaring the horses.." said one.

Fair enough... if you wish to believe whatever you wish to believe. Take the Blue Pill.

But, but and but again... the bottom line is yesterday's slight bounce back in what remain Risk-Off markets feel about as solidly supported as an alligator in the Washington Mirror Pond..

If there is a theme to what's really going on, its "tedious inevitability". So, with due respect, "bear" with me (geddit? see what I did there?). Take the Red Pill, and let's see how deep this Rabbit Hole takes us.

Before turning our focus towards the veritable cataclysm of tweets out the White House as The Donald petulantly wonders why we all dislike him so, (and we ponder just who is advising him!), perhaps a quick word on Brazil and Europe, and a conspiracy theory around them.

Oh dear.

Should we be surprised Brazil has spiralled into yet another FUBAR on allegations the government has approved pay-offs? The government may fall, stocks ar ...

What Delinquent Auto Loans Say About Loose Lending

Auto loans are getting worse, and while the delinquency rate remains low, the increase is surprising given the strong employment picture.

Do China's Iron-Ore Futures Mean Anything?

In recent weeks, global investors have been fixated on the extreme gyrations in China's commodity markets, especially iron ore. That attention would be better invested elsewhere—at least for iron futures traded on the ultraspeculative Dalian exchange.

Applied Materials: Plenty of Flash Left in the Pan

Applied Materials, a maker of semiconductor-manufacturing gear, posted another strong quarterly report, along with a forecast that easily topped Wall Street's expectations.

Here's what you should do when markets are crumbling

It remains to be seen whether Wall Street's drop Wednesday was a one-day occurrence or the start of a more protracted period of volatility, but in either case, a riskier environment is something investors should know how to deal with.

ETF Focus: Here's how much ETF fees have dropped since the financial crisis

Exchange-traded funds have long been touted as a cost-efficient way for investors to get easy access to basically any asset class, sector, or region of the global economy, but investors may not appreciate how cheap they've gotten in recent years, nor how rapidly fees have been falling.

Market Extra: Why young investors should embrace volatility

Volatility on Wall Street scares a lot of investors and for a good reason, but for most it should simply be embraced, according to financial advisors

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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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