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07Jun2017 Opening Market Commentary: Wall Street Opens Fractionally Higher, WTI Crude Slips 1%, US Dollar And Gold Retreat From Previous Highs

Written by Gary

US stock markets opened fractionally higher (SPY +0.2%) as Wall Street awaits key political events tomorrow. Crude prices are slipping ahead of inventory data figures at 10:30 am.


Here is the current market situation from CNN Money

What Is Moving the Markets

Here are the headlines moving the markets.

European bank bailout soothes anxious markets

LONDON (Reuters) - A smoothly executed rescue of Spain's struggling Banco Popular drove European banking stocks higher on Wednesday in financial markets dominated by caution ahead of a trio of major events on Thursday.

Exclusive: Apple makes iPhone screen fixes easier as states mull repair laws

SAN FRANCISCO(Reuters) - Hey Siri, where can I get my cracked iPhone screen fixed?

Uber fires 20 employees after harassment probe

SAN FRANCISCO (Reuters) - Uber Technologies Inc [UBER.UL] said on Tuesday it fired 20 employees and was improving management training following an investigation by a law firm into sexual harassment allegations and other claims at the ride-hailing company.

Goldman Sachs boost rates for savers in bid to attract deposits

(Reuters) - U.S. savers who routinely scour personal finance sites for the best deposit rates are soon going to see an unusual bank at the top of the list: Goldman Sachs Group Inc.

Justice Dept. halts settlements funding out outside groups

WASHINGTON (Reuters) - The U.S. Justice Department has barred any legal settlements in federal investigations that include donating funds to community organizations or other third-party groups, rather than to those directly harmed by the wrongdoing or involved in the cases, in a change that could impact banks and other corporations.

Delphi, Transdev to develop self-driving shuttle service in Europe

DETROIT (Reuters) - Delphi Automotive PLC will partner with Paris-based Transdev Group, a public transport service controlled by the French government, to develop an automated on-demand shuttle service in Europe, the companies said on Wednesday.

Oil dips on concern over rising U.S. output, OPEC tensions

LONDON (Reuters) - Oil prices dipped on Wednesday on renewed concerns about the efficacy of OPEC-led production cuts due to rising tensions within the export group over Qatar and growing U.S. output.

Tankers load Qatari crude along with UAE oil as shipping ban eases

SINGAPORE (Reuters) - Exports of Qatari crude oil have not been hindered by a port ban imposed by other Gulf states as tankers are loading Qatari grades along with cargoes from the United Arab Emirate, shipping data in Thomson Reuters Eikon showed on Wednesday.

Sony's PlayStation VR headset sales top one million units

TOKYO (Reuters) - Sony Corp has sold more than one million units of its virtual reality (VR) headset globally, the Asia chief of the Japanese firm's gaming unit said on Wednesday, as a relatively low price helps push the product into an early lead.

Warning: The Last Two Times Stock Did This Were 2000 and 2007

The number of S&P 500 companies reporting negative earnings is rising rapidly.

Why does this matter?

It matters because this usually signals right before a stock market peak.

Below is a chart illustrating the percentage of S&P 500 companies reporting negative earnings running back to 1999.

As you can see, we are now at levels that have usually occurred just before stock market peaks (the last two times we were at these levels were 2007 and 2000, respectively).

Both of those times (like today), investors believed that stocks could never go down... that the economy was roaring... that we'd reached a kind of financial utopia.

And both times the whole mess came crashing down.

By the way, this time stocks are in an even larger bubble.

A Crash is coming... and it's going to horrific.

And smart investors will use it to make literal fortunes from it.

To pick up a FREE report outlining how to profit from the coming crash...

CLICK HERE NOW!

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

What Europe's First Official Bail-In Looks Like

"If you think this has a happy ending, you haven't been paying attention," warns MINT Partners' Head of Capital Markets Bill Blain, as he reflects on what just happened in Europe (that US equities seem happy to brush off as yet another fleshwound to global instability).

There is a rule in Financial Institutions that any bank that calls itself "popular" generally isn't. This was proved last night. But, congratulations if you were a holder of Spain's Banco Popular's Senior Debt - they did a Zebedee "boing!" on the basis last night's last minute Santander rescue makes the bonds money good.

Bad news for the Equity and COCO AT1 holders - who have the distinction of holding the first major bank capital bonds to be bailed-in/wiped out under EU regulations. Banco Popular senior debt is 12 points higher this morning.

The AT1 perps are trading at 2.6%, down 50 points!!,and even that price looks optimistic. Ahah. We've not seen crashes like that since 2008.

Popular has been desperately seeking a rescue for the last few weeks, but everyone looked the other way. So last night the ECB triggered the "Single Resolution Mechanism" when it determined the Popular's liquidity crisis was such its equity would be unable to cover debts or other liabilities.

The Single Resolution Board agreed the sale of Popular for One Euro to Santander. Santander will launch a Euro 7 bln rights issue to recapitalise t ...

The Fog Of Markets

Authored by 720Global's Michael Lebowitz via RealInvestmentAdvice.com,

"The year 1915 was fated to be disastrous to the cause of the Allies and to the whole world. By the mistakes of this year the opportunity was lost of confining the conflagration within limits which though enormous were not uncontrolled. Thereafter the fire roared on till it burnt itself out. Thereafter events passed very largely outside the scope of conscious choice. Governments and individuals conformed to the rhythm of the tragedy, and swayed and staggered forward in helpless violence, slaughtering and squandering on ever-increasing scales, till injuries were wrought to the structure of human society which a century will not efface, and which may conceivably prove fatal to the present civilization." - Winston S. Churchill - The World Crisis: 1915

After reading that quote several times, it remains shocking that the politicians and individuals of that era unconsciously "conformed to the rhythm of the tragedy." The paragraph above from Winston Churchill, describes the mass mindset of World War I when it was still in its infancy. War-time narratives, nationalism, destruction and the tremendous loss of life led most people to quickly accept and acclimate to an event that was beyond atrocious. Amazingly, less than a year before the period Churchill discusses, the same people likely would have thought that acceptance of such a calamity would be beyond comprehension.

Wars and markets are obviously on two different planes, and we want to make it clear the purpose of t ...

Trump Nominates Christopher Wray As New FBI Director

The wait is finally over, and moments ago - one day ahead of James Comey's much anticipated Congressional testimony - Trump announced that he will nominate King and Spalding litigation partner and former DOJ Assistant AG, Christopher Wray to be the new FBI director.

I will be nominating Christopher A. Wray, a man of impeccable credentials, to be the new Director of the FBI. Details to follow.

— Donald J. Trump (@realDonaldTrump) June 7, 2017

Here is a quick look at Wray's profile:

He's a litigation partner for King and Spalding in Atlanta and D.C., and he worked as a prosecutor in the U.S. attorney's office in Atlanta before President George W. Bush nominated him to be an assistant Attorney General in charge of the Department of Justice's criminal division.

He also played a key role in several high-profile cases -- Wray was Chris Christie's lawyer during the "Bridgegate Scandal," has represented a number of Fortune 100 companies, was a major part of the DOJ's response to the 9/11 attacks and oversaw the Enron task force.

"He's more concerned about the mission than his own personal career," said Joe Robuck, a former FBI special agent. Robuck worked with the FBI for 30 years and said he collaborated with Wray on a major corruption case. He called him a "patriot."

"A lot of people when they're in high profi ...

Some Inconvenient Facts for the Fed

The Federal Reserve is primed to raise rates next week despite a slow-growth economy showing weak wage gains for workers, cooling inflation and dimming prospects for near-term fiscal stimulus.

The Rising Stakes for Tesla in China

Elon Musk hasn't said much in presentations or earnings calls about the China strategy, a glaring omission given China's increasing importance.

Banco Popular Shows Europe Can Handle Failure

Banco Popular's failure, and Santander's role in picking up the pieces, shows that Europe's new regime for dealing with failing banks can function quickly and cleanly.

Four big events that are prompting investors to sell stocks and buy bonds and gold

Three of them take place Thursday, so be prepared for opportunities with cash on hand, says Nigam Arora.

BookWatch: What killed retail may also save it

Is Jeff Bezos killing bricks-and-mortar retail? Or is it the millennials? Or maybe the retailer stores themselves?

Need to Know: 6 red flags for markets from a $160 billion fund manager

How to pass the time before "Super Thursday" arrives? A subset of investors is busy worrying while waiting on James Comey, British voters and Mario Draghi & Co.

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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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