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14Jun2017 Market Update: US Stock Markets Mixed And Mostly Flat, DOW Sets New Record High, Crude Prices Fall Three Percentage Points, US Retail Sales Recorded Their Largest Drop In Sixteen Months

Written by Gary

US stocks were flat in late morning trade today (SPY -0.04%) as a set of weak economic data weighed on bank shares. Crude prices sank 3% to the lowest levels of the session in North American trading, underlining worries over a global supply glut.

Here is the current market situation from CNN Money

North and South American markets are mixed today. The IPC is up 0.58% while the Bovespa gains 0.47%. The S&P 500 is off 0.04%.

Traders Corner - Health of the Market

Dow hits record high as Fed decision looms

Looking at the last three columns (below), the first one (Actual), is what was reported this morning. The second column (Forecast) is what analysts had forecast and the third column is the previous report. Full calendar HERE.

What Is Moving the Markets

Here are the headlines moving the markets.

Weak U.S. retail sales, consumer prices put spotlight on Fed

WASHINGTON (Reuters) - U.S. retail sales in May recorded their biggest drop in 16 months and consumer prices unexpectedly fell, suggesting a softening in domestic demand that could limit the Federal Reserve's ability to continue raising interest rates this year.

Weak data weighs on bank stocks; Fed rate decision looms

(Reuters) - U.S. stocks were flat in late morning trade on Wednesday as a set of weak economic data weighed on bank shares, while investors waited for the Federal Reserve to pull the trigger on a second interest rate hike this year.

Uber director David Bonderman resigns from board following comment about women

SAN FRANCISCO (Reuters) - Uber Technologies Inc director David Bonderman said on Tuesday that he has resigned from the company's board following a remark he made during an Uber staff meeting that was widely seen as offensive to women.

French court advisor says Google not liable for back taxes

PARIS (Reuters) - U.S. internet giant Google should not be held liable for over one billion euros ($1.13 billion) in back taxes in France, an independent court advisor recommended to French judges, a court official said on Tuesday.

Trump's Wall Street game plan needs players

Washington (Reuters) - Wall Street banks on Tuesday cheered U.S. President Donald Trump's plans to loosen the leash put on them in the wake of the 2008 financial crisis but they do not expect significant change any time soon.

GE merges power units as executive who lost out on GE CEO job retires

SEATTLE (Reuters) - General Electric Co said it will combine its power and energy distribution businesses to create its largest unit by revenue as the top executive at GE Power announced his retirement after failing to win the conglomerate's chief executive job.

Volkswagen to offer extended guarantee but no money back: EU official

BRUSSELS (Reuters) - Volkswagen has agreed to offer an extra two-year guarantee but no compensation to European customers in talks with Europe's consumer rights chief after the German carmaker was caught cheating on emissions tests, a European Commission spokesman said on Wednesday.

Bank of America targets growth in international cash management

(Reuters) - Bank of America Corp. sees room to grow in international cash management, a low margin business that can lead to lots of other revenue opportunities with corporate clients, COO Tom Montag said at an industry conference Wednesday.

Nike, Sanrio, Universal Studios face EU probe over online sales

BRUSSELS (Reuters) - EU antitrust regulators will investigate whether Nike , Comcast's Universal Studios and Hello Kitty owner Sanrio illegally block some cross-border sales or ban certain online retailers from selling their products.

When Will Janet Live Up To Her Reputation?

Authored by Kevin Muir via The Macro Tourist blog,

I am asking you to put aside all your notions about monetary policy for a moment, and think about the next couple of points with an open mind. Forget about scary Central Bank balance sheets. Fight the urge to worry about the unprecedented quantitative easing programs. Dismiss the warning cries of the frightening levels of debt. Ignore the apocalyptic forecasts of coming stock market crashes. Let's just have a look at the data. And most of all, let's not worry about what should be done, but think about what will be done.

Rightly or wrongly, the Federal Reserve has a dual mandate. They are tasked with maximizing employment and maintaining price stability. Although many will debate what constitutes price stability, the Federal Reserve has interpreted it as a 2% inflation rate. You might think this absurd, so be it. It is what it is. Complaining will get you about as far as yelling at clouds.

When Janet Yellen took the reins of the Federal Reserve, many pundits predicted a period of exceptionally easy monetary policy as she was widely viewed as a uber dove. But has her reputation proved deserved?

The Fed's preferred inflation gauge is the PCE Core Index. Don't forget the 2% rate is a target over the long run. So if the Fed was meeting their objective, we should see half the observations above 2%, with the other half below 2%. Just for kicks, I put together a histogram of the PCE YoY% rate since Yellen took over.

< ...

Your Last Minute FOMC Preview: "Will It Be A Dovish Hike Or Not"

Courtesy of RanSquawk

The FOMC is seen raising the Fed Funds Rate target by 25bps to 1.00-1.25% at 1400EDT, but the main focus will be on the hike trajectory

Updated economic projections will be published, and there will be a post-meeting press conference with Chair Janet Yellen

Analysts aren't expecting any dramatic changes in the Fed's updated forecasts and 'dot-plots'

Traders will be looking out for details on how the Fed intends to begin shrinking its balance sheet

Rate decision announced at 1400EDT (1900BST) along with updated forecasts; press conference with Chair Yellen begins at 1430EDT


The FOMC is expected to raise its overnight federal funds rate (FFR) target by 25bps to 1.00% to 1.25%, in what would be its second hike of 2017. Fed Funds Futures were pricing in a 95% implied probability that rates will be lifted - at one point last week, that probability was over 99%.

With the rate rise pretty much a done deal, the focus is likely to be on the Fed's rate hike trajectory. Currently, Fed Funds futures aren't buying into the Fed's forecasts which looks for a total of three hikes per annum in 2017, 2018 and 2019. The December 2017 contract implying a rate of 1.25% (suggesting just two hikes in 2017); 1.51% at the end of 2018 (suggesting just two hikes between now and the end of 2018); and 1.695% by the end of 2019 (suggesting three hikes between now and then).

Given that the rate hike is so heavily discounted, the market reaction isn't likely to take its cues from the rate hike; instead it will look to the FOMC's projections of the rate path, and perhaps its balance sheet reduction pace. Consequently ...

10-Year Treasuries Break Key Trendline As Yield Curve Collapses

10-year US Treasury yields just broke to 2.10% for the first time since November 10th, and more importantly tumbling through a key trendline support from a year ago...

h/t @RaoulGMI

Sending the yield curve near cycle flats...

The entire post-Trump-Election reflation trade is collapsing...

This does not look like the plan Janet!!

Trump Delivers Statement On Steve Scalise Shooting

At 11:30am President Trump will deliver a statement following this morning's shooting of House Majority Whip Steve Scalise and several others at a congressional baseball practice game ahead of an annual charity game tomorrow.

Earlier in the day, Trump said in a statement, "The Vice President and I are aware of the shooting incident in Virginia and are monitoring developments closely. We are deeply saddened by this tragedy. Our thoughts and prayers are with the members of Congress, their staffs, Capitol Police, first responders, and all others affected."

Trump also tweeted "Rep. Steve Scalise of Louisiana, a true friend and patriot, was badly injured but will fully recover. Our thoughts and prayers are with him."

Trump has canceled his speech today at the Department of Labor and Vice
President Mike Pence has canceled a speech he had set for this morning.

Senate Majority Leader Mitch McConnell said this morning, "I know the entire Senate will join in echoing the sentiments of the president this morning. We're deeply saddened. We're all concerned for those injured. We'll keep them in our prayers and send them our wish for a quick and full recovery." He added, "The Congressional baseball game is a bipartisan charity event. I know the Senate will embrace that today as we come together to express our concern and our gratitude."

Sen. Chuck Schumer added that he was with Paul, who had been at the practice earlier, in the Senate gym. Schumer said Paul repeated his gratitude that Scalise's protective detail was present or that it would have been a "massacre." "Their bravery is exemplary of all Capitol Police forces and we thank them," Schumer continued.

Gabrielle Giffords, the last member of Congress to be shot, surviving a shooting ...

Beijing Gives Banks the Go-Ahead for Yet Another Lending Binge

Encouraging more lending to small companies may only worsen China's problem of too much badly priced debt.

Hexagon Is for Sale, But Are There Any Buyers?

The natural buyers for the Swedish industrial-technology giant have their own issues with which to contend.

Alexion's Housecleaning Should Continue to Pay Off

Beleaguered drugmaker Alexion Pharmaceuticals is showing signs of getting its act together.

April 2017 Headline Business Inventories Declined

Written by Steven Hansen

Econintersect's analysis of final business sales data (retail plus wholesale plus manufacturing) shows both unadjusted sales and inventories declined. This is in contrast to the headlines which showed sales unchanged and inventories declining.

Market Extra: Dow can hit 22,900—as long as tech doesn't 'roll over', says godfather of chart analysis

Prominent market technician Ralph Acampora thinks the stock market, specifically the Dow Jones Industrial Average, has more than 7% left to climb by the end of the year, if the technology sector doesn't buckle under the weight of persistent worries about valuations.

Why these people first felt like an adult when they were 60 years old

They already had grown children and they had yet to reach this milestone.

Earnings Outlook: Kroger earnings: Walmart, Aldi and Lidl aren't a problem, but same-store sales are

Analysts say Kroger is in a dominant position against a crowded grocery field, but same-store sales have been a problem.

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