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27Jun2017 Market Close: Wall Street Closes Sharply Down, DOW Off 99 Points, Nasdaq Off 1.6 Percent, Crude Rises Almost 2 Percent, Senate Delays Health-bill Vote

Written by Gary

US stock markets closed lower (SPY -0.8%) as big tech names weighed (Nasdaq sinks 1.6%) and losses steepened after a healthcare bill was delayed in the U.S. Senate. Crude prices rose nearly 2 percent and wishful thinking Yellen said there will not be another financial crisis in her life-time.

Todays S&P 500 Chart

Stocks close lower after Senate delays health-care vote, tech sells off

The Market in Perspective

Here are the headlines moving the markets.

Wall St. drops as Senate delays healthcare vote

(Reuters) - Wall Street dropped on Tuesday as big tech names weighed and losses steepened after a healthcare bill was delayed in the U.S. Senate, raising fresh questions about President Trump's domestic agenda.

Fed's Yellen expects no new financial crisis in 'our lifetimes'

LONDON (Reuters) - U.S. Federal Reserve Chair Janet Yellen said on Tuesday that she does not believe that there will be another financial crisis for at least as long as she lives, thanks largely to reforms of the banking system since the 2007-09 crash.

Google faces years of EU oversight on top of record antitrust fine

BRUSSELS/FRANKFURT (Reuters) - Beyond a headline-grabbing 2.4 billion euro ($2.7 billion) fine EU antitrust regulators have leveled against Google, the internet giant is likely to be shackled for years by Tuesday's precedent-setting decision defining the company as a monopoly.

Nestle plans $20.8 billion share buyback amid Third Point pressure

LONDON/ZURICH (Reuters) - Nestle plans to buy back as much as 20 billion Swiss francs ($20.8 billion) worth of shares over three years, it said on Tuesday, days after U.S. activist shareholder Third Point LLC began a campaign to boost performance at the company.

U.S. antitrust lawsuit against Qualcomm to proceed, judge rules

(Reuters) - The Federal Trade Commission's antitrust lawsuit against Qualcomm Inc can proceed, a federal judge ruled late on Monday, meaning the iPhone chip supplier must now wage a fight with U.S. regulators even as it contests a separate $1 billion lawsuit filed by Apple Inc .

Sprint shares jump on cable wireless talks, T-Mobile sinks

(Reuters) - Sprint Corp shares jumped as much as 6 percent on Tuesday on news the carrier is in talks with Charter Communications Inc and Comcast Corp about a wireless partnership, a move that added a new dimension to speculation about possible telecom sector tie-ups.

Oil prices up 2 percent on weaker dollar, short-covering

NEW YORK (Reuters) - Oil prices rose nearly 2 percent and hit a one-week high on Tuesday, boosted by a weaker dollar, short covering and expectations that crude inventories in the United States may decline for a third consecutive week.

Delaware top court rules for Chicago Bridge in Westinghouse dispute

WILMINGTON, Del. (Reuters) - The Delaware Supreme Court ruled in favor of Chicago Bridge & Iron Co on Tuesday in a $2 billion dispute with Westinghouse Electric Co that stems from cost overruns at a pair of unfinished U.S. nuclear power plants.

Wells Fargo to sell commercial insurance business

(Reuters) - Wells Fargo & Co said on Tuesday it agreed to sell its commercial insurance business to private insurer USI Insurance Services, as the third-largest U.S. bank plans to focus on core banking products and services.

Fed Alert & TrumpCare Turmoil Slams Tech Stocks, Bonds, & Dollar

Fed to market...

If you believe in the maxim, don't fight the fed, then today was a problem for you...

Yellen - "We have been in an economy with low interest rates for some time, and that influences asset prices... Asset valuations are somewhat rich by traditional valuations like price-earnings ratios... Some asset valuations look high. There is no certainty about that.''

Williams - "I am somewhat concerned about the complacency in the market. If you look at these measures of uncertainty, like the VIX measure, or other indicators, there seems to be a priced-to-perfection attitude out there... The stock market still seems to be running very much on fumes..."

Fischer - Calls for "close monitoring" of rising risk appetites..."Equity P/E ratios are near top of historical levels... it would be foolish to think all risks eliminated... Sees notable uptick in risk appetites in asset markets... Corporate sector notably leveraged..."

Add to that Draghi, The BIS, Carney, and Dudley all noting financial stability concerns.

Nasdaq tumbled to the lows of the tech wreck day, as VIX topped 11...

With a second big daily loss...

Why The Fed Will Fail Once Again

Authored by James Rickards via The Daily Reckoning,

John Maynard Keynes once wrote, "Practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist."

Truer words were never spoken, although if you updated Keynes today, the quote would begin with "practical women" to take account of Fed Chair Janet Yellen. The "defunct economist" in question would be William Phillips, inventor of the Phillips curve, who died in 1975.

In its simplest form, the Phillips curve is a single-equation model that describes an inverse relationship between inflation and unemployment. As unemployment declines, inflation goes up, and vice versa. The equation was put forward in an academic paper in 1958 and was considered a useful guide to policy in the 1960s and early 1970s.

By the mid-1970s the Phillips curve broke down. The U.S. had high unemployment and high inflation at the same time, something called "stagflation." Milton Friedman advanced the idea that the Phillips curve could only be valid in the short run because inflation in the long run is always determined by money supply.

Economists began to tweak the original equation to add factors — some of which were not empirical at all but model-based. It became a mess of models based on models, none of which bore any particular relationship to reality. By the early 1980s, the Phillips curve was no longer taken seriously even by academics and seemed buried once and for all. RIP.

But like a zombie from The Walking Dead, the Phillips curve is baaaack!

And the person who has done the most to revive it is none other than Janet Yellen, the 70-year-old liberal labor economist who also happens to be chair of the Federal Reser ...

Spot The Odd One Out

Presented with little comment...

Top-Down...

Bottom-Up...

Bonds ain't buying it...

Commodities have given up hope...

But then there's this...

And unless The Fed, ECB, and/or BoJ step up their purchases soon, China's credit impulse is going to smash volatility higher...

California To Add Monsanto's RoundUp To List Of "Cancer-Causing" Herbicides

Back in March, we highlighted official evidence divulged in unsealed court documents which seemingly revealed collusion between senior executives at the $60 billion ag-chemicals powerhouse, Monsanto, and the Environmental Protection Agency (EPA) to kill "inconvenient" research which suggested that Monsanto's key herbicidal product, RoundUp, might be literally killing people.

We've shared the entire sordid tale below but here is one of the key emails from Jess Rowland, the EPA's Deputy Division Director for the Office of Chemical Safety and Pollution Prevention, to a Monsanto executive regarding a piece of damaging research that was pending release:

"If I can kill this I should get a medal."

Apparently those rather unsettling court documents were all that California needed for the state's Office of Environmental Health Hazard Assessment (OEHHA) to add RoundUp's key ingredient, Glyphosate, to a list of chemicals known to cause cancer. Per Reuters:

Glyphosate, an herbicide and the active ingredient in Monsanto Co's (MON.N) popular Roundup weed killer, will be added to California's list of chemicals known to cause cancer effective July 7, the state's Office of Environmental Health Hazard Assessment (OEHHA) said on Monday.

Environmental groups cheered OEHHA's move to list the chemical.

"California's decision makes it the national leader in protecting people from cancer-causing pesticides," said Nathan Donley, a senior scientist at the Center for Biological Diversity.

And while agriculture may no ...

Why Central Banks Need to Worry About Falling Oil Prices

The effect of declining oil prices on inflation raises some awkward questions for markets and policy makers.

Google's EU Fine a Small Price to Pay for Scale

For Big Tech like Google, the benefits of scale come with a price.

Micron Will Keep Defying the Skeptics

It's telling that just when Micron is back to making serious money, the first question is: how long can that last? A strong memory market has boosted sales and earnings for the chipmaker, and the shares are still worth buying.

Hedge fund move irks other J. Crew creditors as battle heats up

A move by some hedge funds to influence an exchange offer by preppy retailer J. Crew in their own favor is irking other creditors and putting their chances of recovering their investment at risk.

MarketWatch First Take: How Fed's Williams can say stock market's on fumes while Yellen says another crisis won't happen 'this lifetime'

There's a curious combination of messages that came from Federal Reserve officials on Tuesday.

See the stunning new Ritz-Carlton yacht — it's an anti-cruise ship

Ritz-Carlton announced this month that it's launching a luxury cruise service with three yachts in the fourth quarter of 2019.

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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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