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19Jun2017 Market Close: Wall Street Closes At New Highs, Tech Stocks Gobbled Up And Strength In Healthcare Stocks, Crude Prices And Gold Slip Further

Written by Gary

US stock markets closed at or near new historic highs (SPY +0.8%). Both the DOW and SP 500 closed at their new highs helped by a technology sector rebound and strength in healthcare and financial stocks. Crude prices take another tumble and the US dollar is looking strong again.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Wall St. at record highs on technology, health stocks strength

NEW YORK (Reuters) - U.S. stocks rose on Monday, with the S&P 500 and the Dow Jones Industrial Average hitting record highs helped by a technology sector rebound and strength in healthcare and financial stocks.

Trump to meet with tech CEOs on government overhaul

WASHINGTON (Reuters) - U.S. President Donald Trump will meet with the chief executives of technology companies including Apple Inc and Amazon.com Inc on Monday as the White House looks to the private sector for help in cutting government waste and improving information technology services.

U.S. bank investors hope Fed stress test results lead to big payouts

(Reuters) - Investors are hoping the Federal Reserve will allow big U.S. banks to put an estimated $150 billion in idle capital toward stock buybacks, dividends and profit-boosting investments in the coming weeks after conducting a regular examination of financial strength.

Boeing launches new jet with flurry of orders

PARIS (Reuters) - Boeing unveiled a new version of its bestselling 737 aircraft on Monday, injecting life into a faltering civil aviation market as French President Emmanuel Macron flew in to open the world's biggest air show in Paris.

U.S. to seek to block DraftKings, FanDuel fantasy sports merger

WASHINGTON (Reuters) - The U.S. Federal Trade Commission said on Monday it will seek to stop the merger of DraftKings and FanDuel, because the combined company would control more than 90 percent of the U.S. market for paid daily fantasy sports contests.

Blue Apron launches IPO roadshow under shadow of Amazon's Whole Foods deal

(Reuters) - Blue Apron Holdings Inc began marketing an initial public offering (IPO) on Monday, as an already competitive meal-kit industry faces a potential threat from Amazon.com Inc's plan to buy Whole Foods Market Inc .

Judge wants more details on ex-drug executive Shkreli's finances

(Reuters) - Former drug company executive Martin Shkreli should reveal more about his finances if he wants his $5 million bail cut to $2 million, a Brooklyn federal judge said Monday, a week before Shkreli is set to face trial on securities fraud charges.

Whole Foods shares keep rising in bidding war speculation

(Reuters) - Whole Foods Market Inc shares rose on Monday for the second straight trading session after Amazon.com Inc announced plans to buy the upscale grocer, with investors betting that rivals could step in to create a bidding war.

Supreme Court again limits where companies can be sued

WASHINGTON (Reuters) - The Supreme Court on Monday slapped limits on where injury lawsuits may be filed for the second time in three weeks, again siding with businesses that want to prevent plaintiffs from "shopping" for friendly courts for their cases.

South African Mining Stocks Crash To 5-Year Low Valuations After Policy Shock

South Africa's new mining charter (that all local mines should be 30% black-owned) is scaring away investors.

The charter revision comes shortly after Africa's most industrialised economy entered its first recession since 2009, with investor confidence already shaken by infighting within the ANC over the scandal-hit presidency of Jacob Zuma.

The proposal was unveiled by the Department of Mineral Resources which said it intends to raise the minimum black-ownership level from the current 26% to ensure more proceeds from the country's natural resources flow to the black majority, Mining Minister Mosebenzi Zwane told reporters on Thursday in Pretoria. The charter will also require companies to pay 1% of annual revenue to communities and new prospecting rights will require black control, Zwane said.

"The mining sector does not exist in a vacuum," Zwane said as he unveiled the charter on Thursday. South African miners needed "strong legislative regimes" to thrive, he added.

"We have listened to miners who have not seen real economic benefit; people who don't see benefit of transformation structures," he said.

And the reaction is clear, as Bloomberg notes, the average price-to-earnings ratio of the country's miners has fallen to the lowest level in five years...

The End Of Pretend Looms As "The Well Is Going Dry This Summer"

Authored by Howard Kunstler via Kunstler.com,

It ain't bragging if it's true. I've said repeatedly on this blog for years that the federal government would only become more impotent, more incompetent, and more ineffectual as The Long Emergency rolled out. And here we are now, at just such pass in history.

The process has been well underway since the beginning of the century. Even the attempts to expand its scope and reach — such as the post 9-11 addition of God-knows-how-many new intelligence services — has only produced an epic clusterfuck of cross-purposed mission creep that threatens the federal government's existential legitimacy.

After nearly a year of investigating, the FBI, the CIA, the NSA, the DIA, DHS, et. al. haven't been able to leak any substantial fact about "Russian collusion" with the Trump election campaign - and, considering the torrent of leaks about all manner of other collateral matters during this same period, it seems impossible to conclude that there is anything actually there besides utterly manufactured hysteria.

Now, one might imagine that this intelligence community could have manufactured some gift-wrapped facts rather than just waves of hysteria, but that's where the incompetence and impotence comes in. They never came up with anything besides Flynn and Sessions having conversations with the Russian ambassador — as if the ambassadors are not here to have conversations with our government officials. You'd think that with all the ...

Goldman Warns Of Rising "Potential For Rate Shocks"

Just in case you are not sick of reading about record low volatility yet (yes, the WSJ had another piece on it this morning "Market Volatility Has Vanished Around the World"), here is Goldman's Ian Wright pointing out that "central bank meetings didn't jolt rate vol" (in case anyone didn't notice), and is the latest to warn that "the potential for rate shocks has increased over longer-term horizons as more pressure builds for rates to rise."

Yes, eventually vol will rise, or rather explode, and shocks will emerge, not just in rates, but when? And will DB's Aleksandar Kocic be right when predicting that the longer vol remains suppressed, the more "cataclysmic" the market reaction will be.

Anyway, here's Goldman's Ian Wright with yet another observation (and forecast) on what central planning does to "markets."

In the past two weeks, there were four major DM central bank meetings and statements. Among them, the BOE, BOJ and ECB did not make changes to policy rates, while the Fed hiked its policy rate by 25 bp and signalled that balance sheet normalisation is likely to start soon. Notably, downward revisions to inflation forecasts came from the Fed (for 2017) and the ECB (over the medium term). Our US economists expect the strong job market and the Fed's dual mandate to lead to an additional hike this year and quarterly hikes in 2018 amid balance sheet normalisation starting in September. Our European economists expect taperi ...

New Mexico Health Insurer Seeks 80% Premium Increase As Senate Ramps Up Repeal Efforts

As Democrats continue their efforts to 'Resist 45,' which apparently includes throwing their unwavering support behind Obamacare, we get yet another sign of just how broken the healthcare exchanges around the country are. According to the Associated Press, New Mexico Health Connections will seek an 80% increase in premiums for the 2018 plan year:

All four health insurance providers on New Mexico's state-run exchange have submitted rate proposals for the coming year, despite uncertainty about key federal subsidies.

New Mexico Health Connections CEO Martin Hickey said Thursday his cooperative is proposing a nearly 80 percent premium increase for individuals. The proposal may be lowered in July.

Health Widler of the Office of the Superintendent of Insurance says detailed descriptions of proposed rate increases will be made public later this month.

Of course, as we pointed out last month (see "Two Simple Charts Explain The Devastating Consequences Of Obamacare"), New Mexico's Obamacare premiums had already increased nearly 100% between 2013 and 2017. Therefore, adding an incremental 80% to the 2017 rates would imply an over 250% increase in just 5 years.

That sai ...

Amazon Shops Locally, But Spreads Fear Globally

The tech giant's $13.7 billion acquisition of Whole Foods has set alarm bells ringing around the world—perhaps prematurely.

The Fed's Poor Record on Soft Landings

There are two things investors should keep in mind about the Federal Reserve: One, it is in a tightening cycle. Two, tightening cycles almost always end badly.

The Dark Side of Good News in Biotech

Deal making is a staple of the biotech industry, but betting on mergers and acquisitions is much harder than it looks for investors.

Blue Apron seeks IPO valuation boost despite Amazon-Whole Foods fears

As Amazon.com Inc. dives harder into food, Blue Apron Holdings Inc. is showing little fear in seeking a higher valuation for its initial public offering.

Bond Report: 2-year Treasury yield at highest in 3 months as Dudley reinforces Fed plan, stocks rise

U.S. Treasury yields climb on Monday, with the two-year note hitting its highest level since March, as so-called risk assets draw bidders and one Fed official emphasizes the central bank's plan to normalize monetary policy—factors that should theoretically push yields higher.

Key Words: Jason Chaffetz says Team Trump is 'almost worse' than the Obama administration

Rep. Jason Chaffetz (R-Utah) is apparently not a big fan of the Trump administration, and he made that pretty clear in an interview that aired over the weekend.

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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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