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08Jun2017 Market Close: Wall Street Closed In The Green After A Volatile Session Involving Comey's 'confessional' On Capitol Hill

Written by Gary

US stock markets made a comeback (SPY +0.05%), but major indexes were in and out of negative territory. The large caps ended flat and the small caps ended fractionally up. The Nasdaq closed up +0.4%, the DOW up 9 points and WTI crude settled in the mid 45 handle.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

'Trump trade' comeback not enough to boost Wall Street

NEW YORK (Reuters) - The 'Trump trade' made a comeback on Thursday on Wall Street but major indexes were in and out of negative territory as former FBI director James Comey said President Donald Trump fired him to undermine an investigation into Russian meddling into last November's U.S. election.

Verizon plans to cut 2,000 jobs at Yahoo, AOL: source

(Reuters) - Verizon Communications Inc is expected to cut about 2,000 jobs when it completes its $4.48 billion acquisition of Yahoo Inc's core assets next week, a person briefed on the matter said.

Jobless claims drop; labor market slack shrinking

WASHINGTON (Reuters) - The number of Americans filing for unemployment benefits fell last week, unwinding half of the prior period's jump and suggesting the labor market was tightening despite a recent slowdown in job growth.

Wilbur Ross sees 'genuine' national security concern on steel

WASHINGTON (Reuters) - U.S. Commerce Secretary Wilbur Ross said on Thursday that a national security review of the U.S. steel industry will be completed "very shortly" and will seek to protect the interests of both domestic steel producers and consumers.

Automakers diverge on how fast to deploy automatic braking

DETROIT (Reuters) - Big automakers are rushing to launch self-driving cars as early as 2021, but the industry's major players are moving slowly when it comes to widespread deployment of a less expensive crash prevention technology that regulators say could prevent thousands of deaths and injuries every year.

Exclusive: China's WH Group targets beef and poultry assets in U.S. and Europe

CHICAGO/HONG KONG (Reuters) - Smithfield Foods Inc's owner, China-based WH Group Ltd , is scouting for U.S. and European beef and poultry assets to buy, in a move that would sharpen its rivalry with global meat packers Tyson Foods Inc and JBS SA.

General Motors sale of Opel to PSA could be completed by end July

FRANKFURT (Reuters) - Opel, the European arm of General Motors , said its sale to France's PSA Group could be completed as early as July 31, pending regulatory approval from antitrust authorities.

Oil shrugs off geopolitical tensions but some see red flags

LONDON (Reuters) - The oil price has ignored rising geopolitical tensions in the Middle East, as a three-year old crude surplus has wiped out any real fear over supply, but one of the world's largest security consultants says there are red flags the market cannot ignore.

Nordstrom family explores taking retailer private, shares surge

(Reuters) - Department store operator Nordstrom Inc said on Thursday that some members of the Nordstrom family were considering taking the company private as it struggles with an industry-wide sales slowdown.

BMO: "This Is The Beginning Of The End" For Junk Bonds

One month ago, Goldman made an interesting observation: unlike the first big drop in oil prices in 2015/2016 when junk bonds, mostly those of energy companies, dropped alongside oil and in many cases decline with an even higher beta than energy equities, in 2017, the relationship had flipped, and it was HY Energy was resisting lower crude, even as stocks are sliding far more than the recent drop in oil would suggest. This is what Goldman said:

Spot crude prices have declined by over 12% since their peak on April 11, touching levels last seen prior to the OPEC's decision to cut production in November. The sell-off has been even more pronounced for longer-dated contracts (on a beta-adjusted basis), reflecting increasing concerns over future balances in 2018 and beyond. In the HY market, the Energy sector has again outperformed its beta to crude over the past few weeks, a pattern that is reminiscent of previous oil sell-off episodes in the second half of 2016 and early 2017 (Exhibit 3).

This outperformance also contrasts with the sharp underperformance of Energy equities since the beginning of the year (Exhibit 4).

Why have energy junk bonds shown so much more resiliency than
equities in 2017, compared to 2015 and 2016? Again, Goldman believes it has an
answer: "We think the much stronger resilience of Energy credits
both vs. their own recent history and vs. their equities counterparts
reflects three key factors."

Whatever the reason for this surprising "junk" resilience, one bank believes that this skewed relationship is ...

Comey Slams NY Times' Fake News On Russia Probe: "Story Was Almost Entirely Wrong"

For those of you who continue to consume anonymously-sourced news from the likes of CNN, NYT, WAPO, etc, as pure fact and a perfect substitute for actual, unbiased journalism, while blindly ignoring the overwhelming evidence which continues to suggest these outlets are simply pushing a sensationalized narrative aimed at bringing down an administration of which they disapprove, please consider Comey's testimony from earlier today in which he describes a February NY Times story, which alleged numerous contacts between Trump associates and Russia, as "almost entirely wrong"

Cotton: "On February 14 the New York Times published a story, the headline of which was "Trump Campaign Aides Had Repeated Contacts With Russian Intelligence."

You were asked earlier whether that was an inaccurate statement and you said you said 'in the main.' Would it be fair to characterize the story as 'almost entirely wrong?'"

Comey: "Yes."

#Comey says that NYT story claiming that the Trump campaign had repeated contacts with Russia was "ENTIRELY WRONG" #FakeNews ...

David Rosenberg: This Is The Most Profound Shift The US Economy Has Ever Seen

Authored by Stephen McBride via MauldinEconomcis.com,

This year, the first Baby Boomers turned 70, and that spells trouble for the economy and financial markets.

Speaking at Mauldin Economics' Strategic Investment Conference, chief economist and strategist for Gluskin Sheff, David Rosenberg, dissected the wide-ranging implications of the wave of Baby Boomers now retiring.

Fifty Million Americans Aged Over 70 By 2030

"1.5 million Boomers turn 70 [each year] for the next 15 years. This is a depressant for growth. Research has shown once you hit this age, you cut back on your spending."

Findings from RAND Corporation show that on average, a person's consumption drops by 37.5% when they enter retirement. Given that consumption accounts for 70% of US economic activity, this is a major deflationary force.

Rosenberg goes on to say, "what makes this situation more acute is that only half of the Boomers that would like to retire, and this is why they can't retire, have less than $100,000 in liquidity."

This huge funding gap in pensions has two major consequences for the economy and financial markets in the near term.

The B ...

In "Major Escalation", Syrian Drone Attacks US-Coalition Forces

One day after a pro-Assad military alliance threatened to strike US forces in Syria in retaliation for a US bombing of an Iran-backed militia operating in an allegedly "no-go zone" near a US garrison in southern Syria, near the town of At Tanf, the Syrians allegedly followed through on their promise, and according to Reuters, a pro-Syrian regime armed drone attacked U.S.-led coalition forces in Syria, for which it was promptly shot down in what the Pentagon dubbed "a major escalation of tensions between Washington and troops supporting Damascus."

The armed drone "hit dirt" and there were no injuries or damage done to the coalition patrol in southern Syria, but U.S. Army Colonel Ryan Dillon, a spokesman for the U.S.-led coalition fighting Islamic State, told reporters the drone meant to attack them and dismissed the possibility it had fired a warning shot.

"This clearly showed a threat even if it were a warning shot; it was something that showed a hostile intent, a hostile action and posed a threat to our forces because this drone still had munitions that were still on it," Dillon said and added that "it was the first known time that pro-Syrian government forces had fired at coalition forces in that region."

Dillon said the MQ-1 like armed drone was destroyed after it fired upon coalition forces carrying out a patrol outside a deconfliction zone in southern Syria. Dillon said there were no coalition casualties.

A U.S. official, speaking on condition of anonymity, said the munition landed a few hundred yards from coalition ...

Citigroup Shares: Big, Cheap and a Good Value

Citigroup, the last truly cheap major bank in the U.S., is approaching two key turning points that should help its shares close in on a better valuation.

Nordstrom Buyout: Watch the Debt

Nordstrom could fare well as a private company as long as its buyers don't take on too much debt.

Mario Draghi Moves ECB in Ultraslow Motion

The European Central Bank dropped its easing bias on interest rates—a cheap concession, since no one expected a further rate cut.

Consumer Watch: Someone hacked my credit card and bought $15,001 of American Girl dolls

$15,001. That was the staggering total attempted. It would typically take me three or four months to accrue that kind of bill; this jerk did it in seven minutes.

Market Extra: Here's how to trade the 'new abnormal': State Street

U.S. stock market valuations are stretched, economic growth is tepid, there are unprecedented political uncertainties, and yet volatility is basically nonexistent. Is such an environment a "new abnormal" on Wall Street?

The New York Post: Concerns increase about John McCain's health after Comey hearing

Speculation about Sen. John McCain's health increased after his questions at the Comey hearing on Thursday.

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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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