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19May2017 Market Update: Wall Street Investors Happy With Latest Batch Of Corporate Earnings Reports, WTI Crude Climbs Into The Mid 50 Handle As The US Dollar Trends Further Downward

Written by Gary

US stocks are trending higher (SPY +0.9%) in early afternoon trading. The DOW is up triple digits after a set of strong corporate earnings lifted investor spirits. The Fed's expected plans is making the case for a go-slow approach as inflation progress stalls.


Here is the current market situation from CNN Money

North and South American markets are broadly higher today with shares in Brazil leading the region. The Bovespa is up 2.28% while Mexico's IPC is up 1.63% and U.S.'s S&P 500 is up 0.88%.

What Is Moving the Markets

Here are the headlines moving the markets.

Strong earnings lift investor spirits after Trump slump

(Reuters) - U.S. stocks were higher late Friday morning as a set of strong corporate earnings lifted investor spirits in a week dominated by uncertainty surrounding Donald Trump's presidency.

U.S. regulators to approve VW diesel fix for 84,000 vehicles: sources

WASHINGTON (Reuters) - The U.S. Environmental Protection Agency and California Air Resources Board on Friday are expected to announce approval of a fix for about 84,000 older Volkswagen diesel vehicles that can emit excess emissions, two sources briefed on the matter said.

St. Louis Fed's Bullard says expected rate hikes 'aggressive'

ST. LOUIS (Reuters) - The Fed's expected plans for rate increases may be too fast for an economy that has shown recent signs of weakness, St. Louis Federal Reserve President James Bullard said on Friday, making the case for a continued go-slow approach as inflation progress stalls.

WannaCry attack is good business for cyber security firms

SAN FRANCISCO (Reuters) - For Kris Hagerman, chief executive of UK-based cyber security firm Sophos Group Plc, the past week could have been bad. The WannaCry "ransomware" attack hobbled some of its hospital customers in Britain's National Health Service, forcing them to turn away ambulances and cancel surgeries.

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.

Campbell Soup misses profit, sales estimates; trims sales forecast

(Reuters) - Campbell Soup Co's quarterly sales and profit missed analysts' estimates, hurt by higher promotions and weak demand for its condensed soups, broths and V8 vegetable juices, and the company warned that its full-year sales could decline.

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.

Ford to invest $350 million in Livonia transmission plant in Michigan

WASHINGTON (Reuters) - Ford Motor Co said Friday it would invest $350 million to upgrade its Livonia transmission plant in Michigan as the company expands its lineup of powertrains.

Boeing defense unit seeks talks with Canada over jets threat: source

OTTAWA (Reuters) - Boeing Co's defense unit is seeking talks with Canadian officials as it tries to fend off a government threat to scrap the purchase of 18 Super Hornet jets, a source familiar with the situation said on Friday.

Rosenstein Resists The Resistance: It Was "Appropriate" For Trump To Fire Comey

While careful to hedge himself, it appears Deputy Attorney General Rod Rosenstein has broken the back of The Democrats' desperate narrative by confirming that he stands by his memo that was initially used as the reason for former FBI Director James Comey's firing.

As The Hill reports, Rosenstein told lawmakers, according to a released copy of his opening statement...

"It is a candid memorandum about the FBI Director's public statements concerning a high-profile criminal investigation, I wrote it. I believe it. I stand by it."

As a reminder, the memo came under criticism after the White House initially pointed to the document as the justification for Comey's firing last week. President Trump later said last week he would have fired Comey regardless, although on Thursday he again cited the memo as his main reasoning.

With Senators desperate to leak whatever they could to further their narrative from the "closed-door" meeting, Rosenstein's testimony crushes one side's arguments... (via The Hill)

Rosenstein added during the closed-door meetings that the document "is not a statement of reasons to justify a for-cause termination."

If Wannacry cyber attack didn't make you wannacry, the next one will!

The following article by David Haggith was published first on The Great Recession Blog:

The Real 'Monster' Eating The Nation

Authored by Howard Kunstler via Kunstler.com,

Is there any question now that the Deep State is preparing to expel President Donald Trump from the body politic like a necrotic organ? The Golden Golem of Greatness has floundered pretty badly on the job, it's true, but his mighty adversaries in the highly politicized federal agencies want him to fail spectacularly, and fast, they have a lot of help from the NY Times / WashPo / CNN axis of hysteria, as well as such slippery swamp creatures as Lindsey Graham.

There are more problematic layers in this matter than in a Moldavian wedding cake. America has been functionally ungovernable for quite a while, well before Trump arrived on the scene. His predecessor managed to misdirect the nation's attention from the cumulative dysfunction with sheer charm and supernatural placidity — NoDrama Obama. But there were a few important things he could have accomplished as chief exec, such as directing his attorney general to prosecute Wall Street crime (or fire the attorney general and replace him with someone willing to do the job). He could have broken up the giant TBTF banks. He could have aggressively sponsored legislation to overcome the Citizens United SOTUS decision (unlimited corporate money in politics) by redefining corporate "citizenship." Stuff like that. But he let it slide, and the nation slid with him down a greasy chute of political collapse.

Which we find embodied in Trump, a sort of tragicomic figure who manages to compound all of his weaknesses of character with a childish impulsiveness that scares folks. It is debatable whether he has simply been rendered incompetent by the afflictions heaped on by his adversaries, or if he is just plain incompetent in, say, the 25th Amendment ...

Here Are The Three Choices Facing OPEC Next Week

The last time OPEC (and Non-OPEC) member nations sat down to attempt a coordinated increase in oil prices by cutting production they succeeded... for about three months. Every since then, oil has been on a gradual declining path, boosted by a surge in US shale output and declining global demand, with WTI recently even sliding sliding below OPEC's implicit price floor of $50/barrel. Which is why on May 25, after the failure of the first 6 month production cut, the same nations will try the same exercise, this time looking to cut output for 9 months, and hoping for a different outcome.

At least that is the general expectation. Overnight, BofA's Francisco Blanch has released a note previewing next week's OPEC meeting titled "OPEC: extend and pretend", and which boils down to the 3 choices faced by OPEC: maintain, curb, or hike output. For its part, BofA believes that OPEC will extend cuts and hope demand recovers. Additionally, Blanch also states that oOPEC's goal for the oil market is to reach backwardation, not a specific price level and does not believe that OPEC will proceed with deeper cuts as this would likely mean ceding more market share to U.S. shale production.

As Blanch explains in the summary, the global oil market deficit is smaller than the bank thought (see the dramatic, 500kb/d downward revision to global demand growth in chart 2 below) and as a result the cartel is struggling to bring down global stocks. This situation presents a major challenge for the cartel, as OPEC is targeting a shift in the term structure of global crude markets and not a specific oil price band according to Blanch: the idea is to penalize forward sellers and squeeze refiners. But soft demand in India and Mexico, a warm US winter, and an OPEC crude oil production overhang from 4Q16 have gotten in the way of a good plan.

Which brings up a question ...

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.

U.S. vs Europe: The Political Risk Reverses in Markets

U.S. political turmoil, set against relative eurozone calm, is steadily narrowing the gap between U.S. and German bond yields.

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.

Carnage in retail sector means more pain to come for shareholders and bondholders

The bloodletting in the retail sector is expected to create a wave of bankruptcies, debt restructurings and defaults in the next 12 months.

Retiree finds her encore career—as an actress

Despite her love of theater, Judi Schindler chose a career in public relations. Now, at 75, she's back onstage.

Don't pass up these job benefits—they can save you thousands

Here's how much you could save by taking advantage of seven common work perks.

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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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