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30Jun2017 Market Update: Wall Street Up, Trading At Snails Pace, US Oil Rig Count Drops, Feds Possibly To Raise Interest Rates By The End Of The Year

Written by Gary

The SP 500 and the DOW were higher in afternoon trading (SPY +0.3%), boosted by Nike's decision to sell on Amazon, while a fall in biotechnology stocks capped gains on the Nasdaq. US consumer spending rose modestly in May and inflation cooled.


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 1.03% while Mexico's IPC is up 0.98% and U.S.'s S&P 500 is up 0.32%.

What Is Moving the Markets

Here are the headlines moving the markets.

Nike lifts S&P, Dow; biotechs limit gains on Nasdaq

(Reuters) - The S&P and the Dow Jones Industrial Average were higher in early afternoon trading on Friday, boosted by Nike's decision to sell on Amazon, while a fall in biotechnology stocks capped gains on the Nasdaq.

U.S. consumer spending rises modestly, inflation cools

WASHINGTON (Reuters) - U.S. consumer spending rose modestly in May and inflation cooled, pointing to a slow-but-steady economic expansion that could still lead the Federal Reserve to raise interest rates by the end of the year.

Buffett's company to become Bank of America's top shareholder

(Reuters) - Warren Buffett's company will become the biggest shareholder in Bank of America Corp , after Berkshire Hathaway Inc on Friday invoked its right to acquire 700 million shares of the second-largest U.S. bank.

U.S. fund managers seek consumer stocks that Amazon can't conquer

NEW YORK (Reuters) - Amazon.com Inc's game-changing move to upend the grocery business with a surprise deal to buy Whole Foods Market Inc compounds a problem already vexing fund managers: how to play U.S. consumer spending when the Seattle-based e-commerce giant is threatening to take over retail.

Walgreens deal offers no lasting relief to Rite Aid

(Reuters) - A slimmed-down Rite Aid Corp could lose much of its bargaining heft with insurers and makers of branded drugs at a time when it is trying to turn around its flagging pharmacy business, analysts said.

Race to buy $10 billion-valued GLP narrows down to two groups: sources

SINGAPORE/HONG KONG (Reuters) - The race to buy Global Logistic Properties narrowed to between a Chinese consortium backed by the company's management and a rival group led by Warburg Pincus, sources said, as bidders submitted offers for the $10 billion-valued firm.

Dollar set for biggest quarterly drop in nearly seven years

NEW YORK (Reuters) - The U.S. dollar recovered slightly on Friday but remained set for its biggest quarterly decline against a basket of rival currencies in nearly seven years after hawkish signals from foreign central banks this week pressured the greenback further.

Exclusive: Airbus CEO Enders to take control of plane sales in new shake-up

PARIS (Reuters) - Airbus is launching a reorganization of its commercial aircraft sales operations in a move likely to focus fresh attention on a delicate balance of power at Europe's largest aerospace company, people familiar with the situation said.

Siemens holds up new R&D site as evidence of commitment to U.S.

FRANKFURT (Reuters) - German engineering group Siemens broke ground on a new $300 million research and development facility in Walpole, Massachusetts on Friday that it said underlined its commitment to manufacturing in the United States.

Stockman: Debt Is the Third Benjamin Franklin 'Certainty'

Authored by David Stockman via The Daily Reckoning,

Benjamin Franklin supposedly said, "In this world nothing can be said to be certain, except death and taxes."

If old Ben were still around he would surely add "debt" to his famous saying. Indeed, a recent Experian study of its 220 million consumer files actually proves the case.

It turns out that 73% of consumers who died last year had debts which averaged nearly $62,000. In addition to the kind of debt that apparently always stays with you — credit cards and car loans — it also happened that 37% of the newly deceased had unpaid mortgages and 6% still had student loans with an average unpaid balance of $25,391!

Once upon a time people used to have mortgage burning ceremonies when later in their working years the balance on the one-time loan they took out in their 30s to buy their castle was finally reduced to zero.

And there was no such thing as student loans, and not only because students are inherently not credit worthy. College was paid for with family savings, summer jobs, work study and an austere life of four to a dorm room.

No more. The essence of debt in the present era is that it is perpetually increased and rolled-over. It's never reduced and paid-off.

To be sure, much of mainstream opinion considers that reality unremarkable — even evidence of economic progress and enlightenment. Keynesians, Washington politicians and Wall Street gamblers would have it no other w ...

US Oil Rig Count Drops For First Time In 24 Weeks As Trump Unveils US-Mexico Petroleum Pipeline

Last week saw US crude production decline by the most since Aug 2016 (perhaps affected by 'Cindy') and given the lagged response to WTI prices, many expected the oil rig count to drop this week. As WTI heads for its 7th up-day in a row - the longest streak in 6 months - it is supported as the US oil rig count dropped 2 to 756, the first drop in almost 6 months.

"Is it possible we'd have our first negative number in 24 reports? Unlikely but it's possible" when you see production down 3 of the past 7 weeks, Bob Yawger, director of the futures division at Mizuho Securities USA in New York, says by telephone

*U.S. GAS RIG COUNT UP 1 TO 184 , BAKER HUGHES SAYS :BHI US

*U.S. OIL RIG COUNT DOWN 2 TO 756 , BAKER HUGHES SAYS :BHI US

WTI is extending gains on the print...

As a reminder, Citi's head technician Tom Fitzpatrick, explained yesterday why oil is now due for a rebound, or as Citi puts it...

"Oil hits the floor and is now set to soar!"



We believe that WTI Crude has posted a short term bottom. Previous short term bottoms have typically seen strong upside follow through with ...

Bob Rodriguez: "We Are Witnessing The Development Of A Perfect Storm"

Authored by Robert Huebscher via AdvisorPerspectives.com,

Robert L. Rodriguez was the former portfolio manager of the small/mid-cap absolute-value strategy (including FPA Capital Fund, Inc.) and the absolute-fixed-income strategy (including FPA New Income, Inc.) and a former managing partner at FPA, a Los Angeles-based asset manager. He retired at the end of 2016, following more than 33 years of service.

He won many awards during his tenure. He was the only fund manager in the United States to win the Morningstar Manager of the Year award for both an equity and a fixed income fund and is tied with one other portfolio manager as having won the most awards. In 1994 Bob won for both FPA Capital and FPA New Income, and in 2001 and 2008 for FPA New Income.

The opinions expressed reflect Mr. Rodriguez' personal views only and not those of FPA.

I spoke with Bob on June 22.

In a recent quarterly market commentary Jeremy Grantham posited that reversion to the mean may not be working as it has in the past. What are your thoughts on mean reversion?

There will be a reversion to the mean. We are in a very difficult and challenging time for active managers, and in particular, value style managers. Many of these managers are fighting for their economic lives.

Given that I am no longer involved professionally in managing money, I believe the standards in the industry ar ...

"You Want To Play Chicken? Let's Play Chicken" Maine Governor Threatens Shutdown Over Proposed Tax Hike

Connecticut isn't the only state in New England that's facing a budget showdown today. As Reuters reports, Maine is bracing for a possible partial government shutdown on Friday - what would be the first in the state since 1991 - as Republican Governor Paul LePage has warned he will reject any budget deal that does not cut income taxes.

LePage, a second-term Republican who faced national scrutiny and calls to resign earlier this year after making an allegedly racist comment about out-of-state drug dealers worsening the heroin epidemic in Maine, said he would declare a state of civil emergency if a budget is not reached by midnight, which would keep state police, prisons, parks and tax collection services but close most other aspects of state government, according to Reuters.

"I will tell you this: If they put a tax increase, ready for a shutdown. End of story," LePage said in a Thursday interview on Maine's WGAN radio. "They're playing chicken at 100 miles per hour and I'm telling you something, you want to play chicken, let's play chicken."

The conflict at the center of the budget showdown is the issue of funding the state's schools, as Reuters explains.

...

Time to Choose Sides in Global Markets

The first half of 2017 has ended with big moves in global bond yields and exchange rates, sparked by a belated realization that central banks are increasingly edging toward reining in extraordinary policy measures. The stage is set for a scrappier second half.

Economy Is Losing a Big Booster

The oil-price rebound gave capital spending a boost, but weakening prices means it will likely be short-lived.

China to Markets: Relax, Global Growth is Fine

While global bond and stock markets are under pressure, the latest data from China contained some encouraging news.

The sports with the oldest — and youngest — TV audiences

Of 24 professional sports looked at, all but women's tennis has seen the average age of viewers increase.

Blue Apron's stock falls below IPO price, but all isn't lost

Blue Apron Holdings Inc.'s stock has fallen below its initial public offering issue price in just its second day of trading, but that doesn't seal the meal-kit delivery company's fate for investors.

The Ratings Game: Olive Garden grabbing market share with value, takeout and millennials

Analysts say Darden Restaurants' Olive Garden is taking market share from other casual dining chains thanks to its focus on value and takeout.

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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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