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22Jun2017 Market Update: Wall Street Fractionally Higher In Early Afternoon Trading, Unemployment Benefits Increased Slightly, Tight Labor Market Remains

Written by Gary

US stock markets opened lower and moved higher in the late morning trading (SPY +0.2%) today as health stocks got a boost after Republicans unveiled a bill to repeal Obamacare. The energy sector also took a breather with oil prices edging up from multi-month lows.


Here is the current market situation from CNN Money

North and South American markets are higher today with shares in Brazil leading the region. The Bovespa is up 0.88% while U.S.'s S&P 500 is up 0.21% and Mexico's IPC is up 0.02%.

Traders Corner - Health of the Market

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.

Stocks tick higher as health care jumps 1%

What Is Moving the Markets

Here are the headlines moving the markets.

Gains in healthcare stocks lift Wall Street

(Reuters) - Wall Street was higher in late morning trading on Thursday as health stocks got a boost after Republicans unveiled a bill to repeal Obamacare and the energy sector took a breather with oil prices edging up from multi-month lows.

U.S. jobless claims rise, labor market still tight

WASHINGTON (Reuters) - The number of Americans filing for unemployment benefits increased slightly last week, but remains at levels consistent with a tight labor market.

Exclusive: China Unicom counts Alibaba, Tencent among investors in drive to raise $10 billion - sources

HONG KONG (Reuters) - Chinese tech giants Alibaba Group Holdings and Tencent Holdings will be among new investors pouring a total of around $10 billion into mobile carrier China Unicom, sources said, part of efforts by Beijing to rejuvenate state behemoths with private cash.

Qatar Airways wants to buy 10 percent stake in American Airlines

(Reuters) - American Airlines Group Inc said on Thursday that Qatar Airways, the Gulf country's state-owned airline embroiled in a airspace row, had expressed interest in buying as much as a 10 percent stake worth at least $808 million in the U.S. airline.

Foxconn plans U.S. display making plant for over $10 billion, scouting for location

TAIPEI (Reuters) - Foxconn , the world's largest contract electronics maker and a major Apple Inc supplier, plans to invest more than $10 billion in a display-making factory in the United States and will decide on the location of the plant next month.

Boeing wins hot Paris order race

PARIS (Reuters) - Boeing won a race for new business at the Paris Airshow, rolling out a new model of its best-selling 737 airliner that helped it claim back the order crown from rival Airbus

Tesla moves a step closer to building electric cars in China

(Reuters) - Tesla Inc took a step closer toward establishing an electric vehicle manufacturing plant in China with its announcement on Thursday that it is in exploratory talks with the Shanghai municipal government.

Home Capital to get C$2 billion loan from Berkshire Hathaway

(Reuters) - Home Capital Group Inc said billionaire Warren Buffett's Berkshire Hathaway Inc will provide a new C$2 billion ($1.50 billion) line of credit to its unit Home Trust Co, ending the Canadian lender's strategic review process.

Oil bounces up off 10-month lows; crude glut still weighs

NEW YORK (Reuters) - Oil rose on Thursday, a day after sliding to 10-month lows, but market sentiment remained negative due to ongoing pressure from a persistent supply glut despite OPEC-led efforts to balance the market.

Trump Trade Tsar Warns Of "Cataclysmic" Consequences If China Gets "Market" Status

Trump's trade tsar, Robert Lighthizer, aka the US Trade Representative speaking before Congress on Wednesday, fired a warning shot at both Beijing and the World Trade Organization, warning that any decision to label China a "market economy" would have "cataclysmic" consequences for the body which has governed over international trade for decades. The statement comes in the context of a possible trade war over steel imports, further distancing the Trump administration from the WTO, and as UBS wryly adds, "President Xi of China may not be getting the return he expected on his investment of political capital in the US."

As the FT details, Lighthizer said the US was eager to see changes in the WTO's dispute resolution system, arguing that the country had unfairly ended up as the top target for complaints in the global trade court. But the US trade rep singled out a dispute brought last December by China against the EU and US over whether it should be deemed a market economy as the "most serious litigation that we have at the WTO right now".

"I have made it very clear that a bad decision with respect to the non-market economy status of China . . . would be cataclysmic for the WTO," he said.

While the trade tzar did not elaborate what US action that would lead to and he added he was "assuming . . . that the WTO is going to do the right thing", the warning pointed to how the Trump administration is chan ...

Real Gold or Paper Proxies: What Billionaire Gold Investors Actually Buy

Submitted by Ronan Manly, BullionStar.com

Infographic website Visual Capitalist recently published an eye-catching infographic on behalf of Sprott Physical Bullion Trusts which featured 4 well-known billionaire investors and their supposed investments in gold. The infographic is titled "Why the World's Billionaire Investors Buy Precious Metals" and can be seen here.

The 4 investors profiled in the infographic are:

  • Jacob Rothschild (Lord), chairman of London-based investment trust RIT Capital Partners Plc
  • David Einhorn, president of Manhattan-based hedge fund firm Greenlight Capital
  • Ray Dalio, chairman and CIO of hedge fund firm Bridgewater Associates, Westport (Connecticut)
  • Stanley Druckenmiller, chairman and CEO of Manthattan-based Duquesne Family Office (and formerly of Duquesne Capital Management)

Trump: "I Did Not Make Any Comey Tapes"

Update: President Trump confirms he did not make a tape of his conversation...

With all of the recently reported electronic surveillance, intercepts, unmasking and illegal leaking of information, I have no idea...

— Donald J. Trump (@realDonaldTrump) June 22, 2017

...whether there are "tapes" or recordings of my conversations with James Comey, but I did not make, and do not have, any such recordings.

— Donald J. Trump (@realDonaldTrump) June 22, 2017

* * *

Having teased the world, and bluffed Comey and his Democratic Party supporters about the possibility of recordings of his conversations with the former FBI Director, Bloomberg reports that a 'source familiar with the matter' confirms that President Trump does not have any tapes.

Trump raised the possibility of tapes in a strategic fashion to ensure that Comey told the truth, said the person, who spoke on condition of anonymity.

Stocks Of China's Serial Foreign Acquirors Crash Amid "Systemic Risk" Crackdown

Last February we described some of the "horror stories" of corporate leverage that emerged as a result of China's unprecedented offshore M&A spree that emerged in 2015 and raged through most of 2016: after all, with over $100 billion in foreign acquisitions, the bulk of the funding would inevitably come from debt. These were some of the examples we highlighted:


Take Zoomlion, a lossmaking Chinese machinery company that is partially state-owned: its total debt stands at 83 times its EBITDA. "Zoomlion's bid is a desperate attempt to remain relevant," said Mr Pillay.

Or how about Fosun, a serial Chinese acquirer that spent $6.5bn on stakes in 18 overseas companies during a six-month period last year, had a a 55.7x total debt/EBITDA in June 2015. "Fosun has bought brand names such as Club Med and Cirque du Soleil as well as a host of other assets including the German private bank Hauck & Aufhaeser."

Or maybe the highly publicized purchase of China Cosco Holdings of the Greek Piraeus Port Authority for 368.5m. Cosco has promised to invest 500m in the Greek port despite having total debt at 41.5x its EBITDA!

Or Cofco Corporation, which recently reached an agreement with Noble Group under which its subsidiary, Cofco International, would acquire a stake in Noble Agri for $750m (in the process preventing the insolvency of the biggest Asian commodities trader), has total debt equivalent to 52 times its EBITDA!

Or how about Bright Food, which bought the breakfast group Weetabix for $1.2bn last year, and has total debt at 24 times EBITDA!

The visual summary was far more stunning, and showed some Chinese foreign acquirers ompanies had levered up as ...

What Could Go Wrong in the Fed's Stress Tests

The Federal Reserve will reveal on Thursday which of the 34 banks it tests have passed hypothetical negative scenarios while maintaining required capital levels.

Uber: Too Big to Flail

The investors who have sunk many billions into Uber can take at least some comfort in the reality that scale still matters—by a lot.

Goodbye for Now to China's Biggest Deal Makers

China's crackdown on lending to its biggest deal makers means the "China bid," which has kept global deal making humming, will take an even longer breather than previously thought.

May 2017 Leading Economic Index: Economic Expansion to Continue and Possibly Strengthen

Written by Steven Hansen

The Conference Board Leading Economic Index (LEI) for the U.S again improved this month - and the authors state "the economy is likely to remain on, or perhaps even moderately above, its long-term trend of about 2 percent growth for the remainder of the year".

Grow: 7 easy tricks to help you save money

These seven savers prove that you don't have to make a painful lifestyle change to save thousands.

Your Digital Self: Startup accelerators are aiming to disrupt these industries

Airbnb was helped by a startup accelerator, which provides funding for a chunk of equity.

Here's one way women should be more like men in the workplace

A new report says women are making a mistake in the way they look for role models

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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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