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26Jun2017 Market Close: Wall Street Closed Near Opening, Well Off Morning Highs, DOW Up 15 Points, Durable Goods Slips Again, US Dollar Gains Strength

Written by Gary

US stock markets closed higher today (SPY +0.1%), but gains were muted by a fall in technology stocks which nudged the Nasdaq lower as investors turned to more defensive sectors. Crude prices crept higher on Monday in quiet trade that featured bargain hunting (W.T.I. 43.38).

Todays S&P 500 Chart

US durable goods orders fell in May by the most in 18 months

Demand for long-lasting U.S. factory goods fell by the most in 18 months, and a key category that tracks business investment also slipped, evidence that manufacturing output is barely growing.

The Market in Perspective

Here are the headlines moving the markets.

S&P 500 edges up; tech weighs on Nasdaq

(Reuters) - The S&P 500 and the Dow were slightly higher on Monday but gains were muted by a fall in technology stocks which nudged the Nasdaq lower as investors turned to more defensive sectors.

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 edges higher; growing U.S. supply limits gains

NEW YORK (Reuters) - Oil prices crept higher on Monday in quiet trade that featured bargain hunting after prices slid last week and hit seven-month lows, but gains were limited by rising crude supply in the United States and other countries.

Japanese airbag maker Takata files for bankruptcy, gets Chinese backing

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. 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.

Amtrak names former Delta executive as next CEO

WASHINGTON (Reuters) - Amtrak on Monday named a former Delta Air Lines chief executive as its next president and CEO as the U.S. passenger rail carrier makes major repairs at its busiest U.S. hub.

'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.

Exclusive: Aston Martin electric car goes limited edition after LeEco exit

PARIS/DETROIT (Reuters) - British sports car maker Aston Martin has scaled back production plans for its first electric model after cash-strapped investment partner LeEco pulled out of the project, Chief Executive Andy Palmer told Reuters on Monday.

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.

Congress Explained

...goes round in circles but accomplishes nothing...

Source: Townhall.com

"Tick, Tick, Tick" Comey Ally Scrambles To Explain Why "Next Trump Bombshell" Didn't Arrive Today

As we noted late last week, Benjamin Wittes, the Brookings Institution senior fellow and noted ally of former FBI Director James Comey, took to twitter to claim that another "bombshell" story, presumably related to the multiple investigations into whether the Trump camp colluded with the Russians, was in the works. However, unlike previous warnings from Wittes, this one contained a caveat: the "fuse" on the story is of an uncertain length, and that the next salvo could arrive as soon as Monday.

But with no major bombshell forthcoming, Wittes returned to Twitter Monday to offer a few clarifications.

3 things:
1) Not all ticks are related to Comey.
2) Fuse length remains uncertain.
3) Interesting preemptive defense of collusion happening.

— Benjamin Wittes (@benjaminwittes) June 26, 2017

Not only did Wittes reiterate that the timing of the next bombshell story remains uncertain, he also offered a few more clues: The, he says, isn't necessarily related to Comey, who was spotted walking into the New York Times office in Times Square last week.

He also noted that there's "an interesting preemptive defense of collusion happening," likely referrin ...

GM Will Raise $3 Billion In Debt To Fund Pensions

One of the primary reasons why GM files for bankruptcy back in 2009, much to the chagrin of the Obama administration not to mention the company's creditors, was because its pension and retirement benefits had become untenable (ignoring that the GM bankruptcy inverted the liquidation analysis on its head with bondholders crammed down at the expense of unions and pensioners who are a much bigger portion of the US voting population than a few bondholders on Wall Street).

And one of the main promises made by management upon emergence was that going forward the company's OPEB and various other retirement benefits would never get out of hand again. Less than ten years later this promise appears to be cracking because moments ago, GM posted slides ahead of its earnings call next month, in which it made several notable disclosures among which:


GM sees a $5.5 billion charge on Opel disposition, which transaction it now sees closing this year instead of by July

Sees 2017 vehicle sales in the low 17 million range, down from the previous plan of mid-17 million units.

It noted a weakness at the low end of the market (primarily passenger cars)

Warned that residual values continue to be a headwind, although it said it had not changed its view of a 7% decline in residual values during 2017.


Sees inventory rising to a record 110 days of supply by midyear, however promises that this number would decline - somehow - to 70 days by year end (not immediately clear how it would achieve this without dumping autos currently on dealer lots).

But most importantly, it unveiled that the company hopes to raise $3 billion in debt in the US to fund its pension obligations, and that it intends to draw on the revolver at close, and issue new debt to repay the revolver.

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.

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.

Get ready for the busiest IPO week so far this year

The initial public offering market is heating up, with 10 IPOs, including Blue Apron, expected to price just this week—so far the year's busiest.

Key Words: Biden tells Ackman 'never disrespect' memory of his dead son

The hedge-fund manager, who runs Pershing Square and boasts a net worth of $1.4 billion, reportedly locked horns with former Vice President Joe Biden at a dinner in Las Vegas.

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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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