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26Jun2017 Market Update: Wall Street Pare Gains From Morning Highs, Nasdaq In The Red, Investors Being Cautious Regarding Future Market Gains

Written by Gary

US stock markets opened moderately higher as expected, but a weak durable goods report, recovery in technology stocks and oil prices stalled sent the Nasdaq down. The large caps are fractionally higher, but are seen to be slipping into the red before this session closes.


Here is the current market situation from CNN Money

North and South American markets are broadly higher today with shares in Brazil leading the region. The Bovespa is up 1.49% while Mexico's IPC is up 0.36% and U.S.'s S&P 500 is up 0.16%.

What Is Moving the Markets

Here are the headlines moving the markets.

Wall St. pares gains as recovery in tech, oil pauses

(Reuters) - U.S. stocks pared gains in late morning trading on Monday, as a recovery in technology stocks and oil prices stalled.

Google set to face record EU antitrust fine as soon as Tuesday: sources

PARIS (Reuters) - EU antitrust regulators are likely to impose a record fine on Alphabet unit Google over its shopping service as soon as Tuesday, two people familiar with the matter said on Monday, concluding one of three cases against the company.

Oil rebounds but still threatened by growing U.S. supply

NEW YORK (Reuters) - Oil prices rebounded on Monday after last week's seven-month lows, but were hemmed in by a relentless rise in U.S. supply and a surge in demand for short sale contracts that signal investors see potential for a price fall.

Japanese airbag maker Takata files for bankruptcy, gets Chinese backing

TOKYO/WASHINGTON (Reuters) - Japan's Takata Corp , at the center of the auto industry's biggest-ever product recall, filed for bankruptcy protection in the United States and Japan, and said it had agreed to be largely acquired for $1.6 billion by the Chinese-owned U.S.-based Key Safety Systems.

U.S. auto sales seen down 2 percent in June: JD Power and LMC

DETROIT (Reuters) - U.S. auto sales in June likely fell 2 percent from a year earlier despite large discounts for consumers, presenting a fresh sign that automakers are heading into a downturn, industry consultants J.D. Power and LMC Automotive said on Monday.

U.S. activist presses for 'bold action' at Nestle

LONDON/NEW YORK (Reuters) - U.S. activist shareholder Third Point LLC has targeted Nestle by taking a $3.5 billion stake in the food maker and urging Europe's most valuable company to boost returns as demand for its products weakens.

U.S. core capital goods orders, shipments decline in May

WASHINGTON (Reuters) - New orders for key U.S.-made capital goods unexpectedly fell in May and shipments also declined, suggesting a loss of momentum in the manufacturing sector halfway through the second quarter.

'Pharma bro' Martin Shkreli heads into fraud trial

NEW YORK (Reuters) - Martin Shkreli, the pharmaceutical entrepreneur vilified as the "pharma bro" for raising the price of a life-saving drug by 5,000 percent, will go on trial on Monday for what U.S. prosecutors called a Ponzi-like scheme at his former hedge fund and a drug company he once ran.

U.S. top court buries CalPERS lawsuit over Lehman collapse

WASHINGTON (Reuters) - Nearly 30 banks that underwrote billions in debt offerings by Lehman Brothers before Lehman collapsed in 2008 will not have to defend a securities fraud lawsuit by a big California pension fund, the U.S. Supreme Court ruled on Monday.

Joe LaVorgna Has Left Deutsche Bank

Two years after correctly abandoning his long-held bullish perspective on the US economy's growth prospects, Deutsche Bank's chief economist Joe LaVorgna has reportedly left the bank, "planning to work elsewhere in financial services."

Some may recall, that back in 2013, we noted that when it comes to forecasting the future, even one Groundhog Phil has a success rate of 71%, or over a standard deviation more accurate compared to Joe "Coin Toss" LaVorgna's 51%.

LaVorgna had long been optimistic about U.S. economic expansion. About two years ago he changed his view by correctly predicting a deceleration in gross domestic product growth. After Donald Trump was elected president of the U.S., the economist said the new leader was a "game changer" and that if the tax rate were lowered, stocks in the S&P 500 would rally.

Bloomberg reports that he left the German lender last week and is planning to work elsewhere in financial services, said one of the people, who asked not to be identified discussing personnel matters. Peter Hooper who worked alongside LaVorgna, will continue to handle duties tied to economic forecasts and analysis, said another person.

...

US Destroyer Ignored Warnings Ahead Of Deadly Collision

The latest update on the mysterious circumstances surrounding a collision between a Philippines' flagged container ship and a Navy destroyer that left seven sailors dead has arrived, courtesy of Reuters.

The news agency is reporting exclusively that the USS Fitzgerald ignore the much-larger cargo ship's repeated warnings to get out of its path of travel.

"In the first detailed account from one of those directly involved, the cargo ship's captain said the ACX Crystal had signaled with flashing lights after the Fitzgerald "suddenly" steamed on to a course to cross its path.

The container ship steered hard to starboard (right) to avoid the warship, but hit the Fitzgerald 10 minutes later at 1:30 a.m., according to a copy of Captain Ronald Advincula's report to Japanese ship owner Dainichi Investment Corporation that was seen by Reuters."

The incident has spurred no fewer than six investigations, including two internal hearings by the US Navy and a probe by the United States Coast Guard (USCG) on behalf of the National Transportation Safety Board. The Japan Transport Safety Board, the JCG and the Philippines government are also conducting separate investigations.

However, the details of what transpired during the June 17 collision remain sketchy because, as Reuters, noted, nobody is talking.

Trump Responds: "Unanimous Supreme Court Decision A Clear Victory For Our National Security"

Many have been waiting with bated breath all morning for Trump's response on the Supreme Court's decision regarding his travel ban. While we expected that response would come in the form of a snarky tweet, it has unfortunately been revealed via a more carefully crafted official statement.

pic.twitter.com/MW1ZddE7CZ

— Maggie Haberman (@maggieNYT) June 26, 2017

Here is the full text:

Statement from President Donald J. Trump

Today's unanimous Supreme Court decision is a clear victory for our national security. It allows the travel suspension for the six terror-prone countries and the refugee suspension to become largely effective.

As President, I cannot allow people into our country who want to do us harm. I want people who can love the United States and all of its citizens, and who will be hardworking and productive.

My number one responsibility as Commander in Chief is to keep the American people safe. Today's ruling allows me to use an important tool for protecting our Nation's homeland. I am also particularly gratified that the Supreme Court's decision was 9-0.

Of course, we're sure that today's ruling is also "particularly gratifying" for the Trump administration in light of their previous accusations that rulings by the 9th district court in San Francisco were politically motivated.

Well, as predicted, the 9th Circuit did it again - Ruled against the TRAVEL BAN at such a dangerous time in the history of our c ...

The Fed's Third Mandate Is Official

Authored by Kevin Muir via The Macro Tourist blog,

There has been a whole lot of ink spilled on the reason for the Fed's recent break from data dependence. Many pundits believe the Federal Reserve's hawkish guidance, even in the face of low inflation readings, is a partisan attempt by Yellen & Co. to derail the weak recovery. I don't buy that argument. To think the FOMC board would leave rates easy for Obama or Hillary, but raise them for Trump is just foolish. The Fed might be incompetent, but they aren't so blatantly biased.

I have speculated the Federal Reserve's deviance from data dependence can better be explained by the adoption of a third mandate - financial conditions (Rejoining the Dark Side), but my theory involved a fair amount of reading in between the lines. Until now...

This morning, at a speech at the BIS Annual General Meeting, Bill Dudley came right out and stated unequivocally that the Federal Reserve was targeting financial conditions.

Why Italy's Bank Rescue Looks a Backward Step for Europe

A sweetheart deal to wind down two small banks raises wider questions about state support for lenders.

Shale Produces Oil, Why Not Cash?

Producers of oil and natural gas from places like the Permian Basin have been burning more cash than they produce for the history of the business and an expected turnaround this year is starting to look less impressive.

Easy Money Gone, Loeb Has a Tough Road at Nestlé

A soaring share price and changes in the works before the activist's arrival mean smaller gains and more time to get them at Swiss food company.

May 2017 CFNAI Super Index Moving Average Down

Written by Steven Hansen

The economy's rate of growth declined based on the Chicago Fed National Activity Index (CFNAI) 3 month moving (3MA) average - but economic growth remained above the historical trend rate of growth.

BookWatch: 5 ways to tell if you belong to the 'aspirational class'

It's not about your income or how much you spend — it's what you spend your money on, says author Elizabeth Currid-Halkett.

Store Capital enjoys biggest one-day boost after Warren Buffett buys stake

Shares of the real-estate investment trust jump 10% on the news that Buffett's Berkshire Hathaway has purchased a 9.8% stake.

The Wall Street Journal: China sentences 16 Crown Resorts employees to prison for gambling crimes

A senior executive of Australian casino company Crown Resorts pleaded guilty to gambling crimes in China and was sentenced to 10 months in prison.

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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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