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03Jul2017 Market Update: Wall Street Closes Mixed, ISM Manufacturing PMI Higher Than Expected, WTI Crude Settles In The High 46 Handle, US Dollar Grows Stronger, Gold Down 1.7 Percent

Written by Gary

US stock markets closed mixed (SPY +0.2%) with the DOW up triple digits and the Nasdaq down a half percentage point. Ford and General Motors reported weaker U.S. sales in June . . .


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 0.38% while Mexico's IPC is up 0.30% and U.S.'s S&P 500 is up 0.23%.

. . . as the industry looks to avoid its sixth consecutive month of negative results. Crude prices climbing higher, be prepared to pay more at the gas pump next week.

What Is Moving the Markets

Here are the headlines moving the markets.

Dow hits record as energy, bank stocks gain

(Reuters) - The Dow Jones Industrial Average hit a record high in late morning trading on Monday as energy and bank stocks gained, but a fall in tech stocks dragged down the Nasdaq.

Tesla's Musk says Model 3 on track, shares rise

(Reuters) - Tesla Inc's shares rose 1.5 percent on Monday after Chief Executive Elon Musk said late on Sunday that the electric carmaker was set to start production of its new Model 3 sedan this month and was on track to produce 20,000 per month by December, in line with its previous targets.

GE closes Baker Hughes deal, becomes No. 2 oilfield service provider

HOUSTON (Reuters) - General Electric Co on Monday completed its buyout of Baker Hughes Inc, merging it with its own oil and gas equipment and services operations to create the world's second-largest oilfield service provider by revenue.

Broadcom wins U.S. antitrust consent to buy Brocade: FTC

WASHINGTON (Reuters) - Chipmaker Broadcom Limited has won U.S. antitrust approval to buy Brocade Communications Systems , the Federal Trade Commission said on Monday.

Facebook beats privacy lawsuit in U.S. over user tracking

(Reuters) - A U.S. judge has dismissed nationwide litigation accusing Facebook Inc of tracking users' internet activity even after they logged out of the social media website.

U.S. factory activity jumps to near three-year high, construction spending flat

WASHINGTON (Reuters) - U.S. factory activity rose sharply in June to its highest level in almost three years suggesting economic growth in the second quarter gained some steam, while construction spending held steady in May.

Exclusive: Mexico's Pemex sees October selection of refinery coking plant partner - sources

MEXICO CITY (Reuters) - Mexican state oil company Pemex plans to choose a partner at the end of October to finish the development and operate a $2 billion coking plant at its Tula refinery, government and Pemex sources told Reuters.

Oil up 1.5 percent as U.S. crude output slows

NEW YORK (Reuters) - Oil rose about 1.5 percent on Monday, resuming its longest stretch of daily gains in more than five years after data pointed to moderating U.S. output, though analysts said news of rising OPEC production could cap gains.

UBS rejigs structure for European, emerging market wealth management

ZURICH (Reuters) - Swiss bank UBS is further reorganizing its wealth management businesses in European and emerging markets to simplify its structure, according to a memo seen by Reuters on Monday.

Goldman Sees Bitcoin Soaring As High As $3,915

Last week former Fortress principal Michael Novogratz made headlines in the cryptocurrency world when he told attendees at the CB Insights Future of Fintech conference that he has cut holdings (in Bitcoin and Ethereum) after the cryptocurrencies' latest "spectacular run," warning that "Euthereum had likely hit its highs for the year," and "cryptocurrencies were likely the biggest bubble of his lifetime."

However, while this all sounds rather downbeat, Novogratz said he remained very "positively constructive" on the space overall, as he should: he still has 10% of his net worth invested in the sector. And, as Bloomberg reported, Novogratz says cryptocurrencies "could be worth north of $5 trillion in five years - if the industry can come out of the shadows."

So fast forward to Sunday evening Goldman's chief technician, Sheba Jafari, issued only his second forecast of where bitcoin is headed next which may accelerate Novogratz' crypto price target.

Recall, that as we first reported three weeks ago, Jafari said that "due to popular demand, it's worth taking a quick look at Bitcoin here" and warned that "the market has come close (enough?) to reaching its extended (2.618) target for a 3rd of V-waves from the inception low at 3,134." He concluded that he was "wary of a near-term top ahead of 3,134" and urged clients to "consider re-establishing bullish exposure between 2,330 and no lower than 1,915."

He was right: on the v ...

Welcome To The Dark Side Of "It's Different This Time"

Authored by Mark St.Cyr,

There has not been a mantra that's emulated a teenagers go-to excuse of "Because!" for both tactical effect, as well as childish reasoning than the term "it's different this time." And for nearly the last 10 years that phrase has meant something entirely different to two distinct groups.

The issue at hand is that one side (i.e., "The Valley", Wall St., and its sycophantic chorus of enablers throughout the financial/business media) is going to suddenly become aware that this once reliable sword against any and all reasoning not only had an ominous double entendre like quality, but also a double-edged-sword. And the cleaving of reputations, along with investment dollars and sense has only just begun.

So what about the other side you may be wondering since I said there were two? Fair point, and it is this:

The other-side as we'll now call them (where you can place me if you wish) also understood that, yes, it was different this time, but not in the way that the prior believed. And that is the key. e.g., Believed.

The prior truly believed and embraced that it was different this time. In other words, fundamentals of any sort whether they be tried and true business metrics, paying customers, profits, net profits, __________(fill in the blank) were suddenly immaterial for measuring a business for what its valuation could, would, or should be.

Business 101 was reduced to: Get an idea, Get funded, Get listed, Get out, rinse repeat. And if you didn't "get out?" Then the only metric that mattered is "eyeballs for ads." i.e., Spend (or lose) $100mm per quarter is perfectly acceptable, and even encouraged, as long as you can show 102 million eyeballs came for free. Why? ...

Tillerson: Russia Should Decide Assad's Fate

And so, three months after the US State Department famously flip-flopped, when first at the end of March Rex Tillerson said at a news conference that "the longer term status of President Assad will be decided by the Syrian people" adding that "our priority is no longer to sit and focus on getting Assad out" only to follow one week later with Tillerson's warning to Russia that "coalition steps are underway to remove Assad" which in turn segued into the first US attack on Syrian soil with the launch of no less than 59 cruise missiles, the US has done it again and according to Foreign Policy, Secretary of State Rex Tillerson has once again told the U.N. Secretary General Antonio Guterres that the fate of Syrian leader Bashar Al-Assad now lies in the hands of Russia, and that the Trump administration's priority is limited to defeating the Islamic State.

The striking reversal was announced during a private State Department meeting last week, according to three diplomatic sources cited by FP.

And, as FP adds, "the remarks offer the latest stop on a bumpy U.S. policy ride that has left international observers with a case of diplomatic whiplash as they try to figure out whether the Trump administration will insist that Assad step down from power. Nearly three months ago, Tillerson had insisted that Assad would have to leave office because of his alleged use of chemical weapons."

The news, which will again be met with an angry response by neocons like John McCain - as happened in March - signaled the Trump administration's increasing willingness to let Russia take the driver's seat in ...

Bond Bloodbath Continues, Tech Stocks Sink To 2-Month Lows

It all started off well, dip-buyers moved in on quiet volume and everything was awesome. But then the cash market opened and selling started in both bonds and stocks, slamming both to 2-month lows...

The dead cat bounce in FANG stocks is over...

And the bond bloodbath continues...

As the dollar strengthens...

Finally, Something Good From Yahoo

An investment in its offspring, Altaba, offers a high reward if management can reduce its tax liability, and it has limited downside.

China's Bond Market Is Attractive---for the Wary

The world's third-largest bond market offers some moneymaking opportunities, but the biggest risks are hard to price.

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.

May 2017 Headline Construction Spending Growth Unchanged?

Written by Steven Hansen

The headlines say construction spending was unchanged and below expectations. Our view is worse than the headlines..

June 2017 Manufacturing Survey Growth Mixed

Written by Steven Hansen

The ISM Manufacturing survey improved and remained in expansion. The key internals correlated and remained in expansion. The Markit PMI manufacturing Index, also released today, is in positive territory and marginally declined.

In One Chart: The top 10 cities in the world for luxury home buyers

England's capital city, with its posh Belgravia and South Kensington neighborhoods, has dominated the list of luxury markets for years, but there's a new king in the gilded world of high-end real estate.

Economic Report: Even with construction spending zigzagging, outlays in first 5 months are up 6%

Spending on construction projects is running about 6% higher so far in 2017 than last year, even as monthly data remain choppy.

This is how many fatal traffic accidents happen on July 4th weekend

As gas prices hit a low not seen since 2005, more people hit the road for Independence Day.

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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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