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23May2017 Market Close: Wall Street Closes With A Fractional Gain, Both WTI Crude And The US Dollar Settle Higher

Written by Gary

US stocks sea-sawed all today ending with a fractional gain (SPY +0.2%). The DOW closed 48 points in the green with investors relieved by the release of Trump's budget plan, but gains were tempered by declines in consumer discretionary stocks.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Trump seeks to slash $3.6 trillion of spending in austere budget

WASHINGTON (Reuters) - U.S. President Donald Trump wants lawmakers to cut $3.6 trillion in government spending over the next decade, taking aim in an austere budget unveiled on Tuesday at healthcare and food assistance programs for the poor while boosting the military.

Wall Street ends higher following budget plan

NEW YORK (Reuters) - Wall Street edged higher on Tuesday with investors relieved by the release of President Donald Trump's budget plan, but gains were tempered by declines in consumer discretionary stocks.

Housing recovery intact despite drop in new home sales

WASHINGTON (Reuters) - New U.S. single-family home sales tumbled from near a 9-1/2-year high in April, but the housing recovery likely remains intact amid a tightening labor market.

Patent plaintiffs see way around U.S. Supreme Court ruling

(Reuters) - Corporations are cheering a U.S. Supreme Court decision limiting where they can be sued for patent infringement, but some intellectual property lawyers say loopholes in the ruling likely mean lawsuits will continue to be filed in plaintiff-friendly jurisdictions.

Uber inadvertently underpaid New York City drivers for over two years

(Reuters) - Uber Technologies Inc [UBER.UL] said on Tuesday it underpaid its New York City drivers for the past two-and-a-half years, an error that could cost the ride-hailing company tens of millions of dollars.

U.S. government sues Fiat Chrysler over excess emissions

WASHINGTON (Reuters) - The U.S. government filed a civil lawsuit Tuesday accusing Fiat Chrysler Automobiles NV of illegally using software to bypass emission controls in 104,000 diesel vehicles sold since 2014.

Westinghouse reaches deal for $800 million U.S. bankruptcy loan

(Reuters) - Westinghouse Electric Co told a U.S. court on Tuesday the nuclear power company had reached a deal to borrow $800 million after allaying creditors' concerns that the money would be flowing to non-bankrupt affiliates overseas.

U.S. plan to sell oil reserve shows declining import needs

SINGAPORE/VIENNA (Reuters) - President Donald Trump's proposal to sell half of the U.S. strategic oil reserve highlights a decline in the biggest oil user's reliance on imports - and a weaning off OPEC crude - as its domestic production soars.

OPEC set to prolong oil output cuts by nine months

VIENNA (Reuters) - OPEC is likely to extend production cuts for another nine months, ministers and delegates said on Tuesday as the oil producer group meets this week to debate how to tackle a global glut of crude.

Stocks Near Record Highs As US Economic Data Crashes To 15-Month Lows

So the most deadly terror attack in Britain in 12 years, US economic data collapses, a terrible T-Bill auction, and Trump's budget hits... sending stocks to record highs...

Stocks bounced back for the 4th day following the Trump Dump, reaching back near record highs...

On another short squeeze open...

And no volume...

As US macro data crashed to its weakest since Feb 2016 (when the world was worried about global recession)...

And while Hard data has been weak, it is the 'soft' data that is now collapsing (surprise!!)

The Big Short 2.0: BlackRock's Consumer Asset-Backed Securities ETF

Submitted by Daniel Drew via Dark-Bid.com,

Scanning the horizon for the next big short has become the ultimate pastime for doomsday investors who relish the twisted pleasure of profiting from others' losses. While some recent "big shorts" have worked out rather well, such as department store ABS, other big shorts have been downright disastrous, such as David Stockman's bubble call of Amazon in January 2016. Rightly so, he lamented Amazon's 985 P/E ratio, but nonetheless, here we are 18 months later with another $140 billion added to Amazon's market capitalization.

In the hunt for the next big score, where can the humble short seller turn next? Look no further. BlackRock has announced their intention to form the iShares Consumer Asset-Backed Securities ETF, which will invest in notes supported by consumer loans, such as student debt and credit cards. If approved, it will be the first ETF that holds asset-backed securities.

One chart shows exactly why BlackRock has decided now is the opportune time to start repackaging student loans into ETFs:

Nonrevolving Consumer Loans

From the collateralized debt obligations ...

Goldman: "We Have Entered The Slowdown Phase", But Stocks Don't Care

Under normal circumstances, we would say it is strange, if ironic, that the same day the S&P is trading just shy of an all time high 2,400 again, Goldman comes out with a note warning that "global growth momentum appears to be slowing. The ISM has likely peaked, and the US labor market has tightened further. We appear to be in the "slowdown" phase." It goes without saying that circumstances are anything but normal, and that if the US economy is in a slowdown phase after a quarter in which GDP rose 0.7%, we would hate to see what an all out contraction would look like.

Sarcasm aside, echoing some of the confusion voiced by Bank of America earlier today, Goldman notes that "so far equities and credit are holding up well relative to historical slowdown phases, while other assets (USD, commodities and Treasuries) are underperforming relative to history."

Why the disconnect? Goldman suggests that even though the economy has peaked, "Historically, slowdowns have not necessarily been bad for risky assets, unless a recession results."

Wait, isn't that what markets do: they discount the future? The answer here, obviously, is not under central planning when the market's only reaction function to any move lower is to buy the dip (see: "Bank Of America: "These Markets Are Very Weird"). However, it would not be politically correct for Goldman to admit that the market's primary function, anticipating and reaction to the future, no longer works, so it provides some other ideas, claiming that "some asset prices, primarily the Treasury term structure and US HY spreads, tend to reflect recession risk early, while equity momentum tends to fade. The ISM and the unemployment rate also appear to give some advance warning.

But first things first: why has Goldman, which traditionally ...

Silver "Undecided Spreaders" at 4 Year Highs - Time to Buckle Up?

via Wall St. Whisperer and Marketslant.com

What's going on with silver?

If you've been bullish silver, you might feel the same angst some investors have felt over the past two months.

But, according to one anonymous analyst from Simple Digressions, it may be time to look at the grey metal again.

"For the last two months the silver market has been sending very mixed signals. Its physical segment is, in my opinion, very strong now but the paper segment is not," the analyst explained in a Seeking Alpha post Monday.

"In my opinion, these facts support a bullish thesis on silver prices. If the opposite thesis (bearish) were at play, the strong hands would not have been adding silver in such an aggressive way (it looks like they are in a hurry)," the author added.

According to his/her research, JPMorgan and SLV (or "strong hands") have been "hoarding" silver since April 2017. "When nearly everybody was furiously selling silver, JPMorgan, and then SLV, were agg ...

Nokia Uses Lawsuit to Make Apple Its Friend

The Finnish technology group has signed a novel legal settlement with Apple that involves business collaboration as well as royalties.

Xilinx: A Cloudier Chip Play

Xilinx chips are in demand among cloud-service providers, but the outlook is still subdued.

Why European Companies Could Really Miss London

Most industries need access to raw materials: In finance and markets that raw material is savings.

AutoZone's stock suffers record price plunge after profit and sales miss

AutoZone's stock suffers the biggest price decline since it went public 26 years ago, as disappointing profit and sales prompted a longtime bullish analyst to downgrade the stock for the first time in 10 years.

Imagine if everyone in the world had a fiduciary duty to act in your best interest

What life might be like if the fiduciary rule even applied to Starbucks baristas, barbers, real-estate agents and others.

In One Chart: Why it's hard to believe anybody rode Netflix from IPO to where it trades today

Are you the proud owner of Netflix shares going all the way back to the IPO? If so, you're either a liar, or you've got some serious stock-market huevos.

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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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