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05Jul2017 Pre-Market Commentary: Wall Street To Open Higher, Investors Await Fed's Policy Minutes, Crude Prices Fall This Morning, US Dollar Showing Strength Again

Written by Gary

The SP 500 and the Dow futures were fractionally higher (SPY +0.2%) as investors awaited minutes of the Feds last meeting for clues on interest rate hikes. Possible new historic highs are . . .

Here is the current market situation from CNN Money

European markets are higher today with shares in France leading the region. The CAC 40 is up 0.21% while London's FTSE 100 is up 0.20% and Germany's DAX is up 0.15%.

. . . possible for the DOW this morning. The Federal Reserve will release minutes of its most recent policy meeting today at 2:00PM ET (1800GMT).

Ahead of the Fed minutes and factory orders, the dollar was steady against a basket of the other major currencies as U.S. traders returned to their desks on Wednesday after the Independence Day holiday.

Oil prices fell more than 1% this morning with 'Texas Tea' trading in the low 46 handle, ending their longest bull-run in over five years, as climbing OPEC exports and a stronger dollar turned sentiment more bearish and markets kept a watchful eye on trends in the commodity.

Today's Markets

In Asia, Japan +0.3%. Hong Kong +0.5%. China +0.8%. India +0.1%.
In Europe, at midday, London flat. Paris +0.1%. Frankfurt +0.1%.
Futures at 6:20, Dow flat. S&P flat. Nasdaq -0.2%. Crude -1.5% to $46.36. Gold steady at $1219.14.
Ten-year Treasury Yield flat at 2.35%

Today's Economic Calendar

7:00 MBA Mortgage Applications
8:30 Gallup U.S. Job Creation Index
8:55 Redbook Chain Store Sales
10:00 Factory Orders
2:00 PM FOMC minutes
2:00 PM Gallup US ECI

Companies reporting earnings today »

What Is Moving the Markets

Here are the headlines moving the markets.

S&P, Dow futures flat as Fed minutes awaited

(Reuters) - The S&P and the Dow futures were little changed on Wednesday as investors awaited minutes of the Federal Reserve's last meeting for clues on interest rate hikes.

Global stocks recover as eyes shift to Fed minutes

LONDON (Reuters) - Stock markets rode out the latest rise in tensions around North Korea on Wednesday, main markets in both Europe and Asia inching higher as attention moved to minutes from the U.S. Federal Reserve's last meeting.

GM China says sales rebound in June, promises 10 models in second half

BEIJING (Reuters) - General Motors Co on Wednesday said sales rose in China in June after two consecutive months of decline, and promised to rebuild momentum in the world's largest car market with 10 new or refreshed models in the second half of 2017.

Geely's Volvo to go all electric with new models from 2019

STOCKHOLM (Reuters) - All Volvo car models launched after 2019 will be electric or hybrids, the Chinese-owned company said on Wednesday, making it the first major traditional automaker to set a date for phasing out vehicles powered solely by the internal combustion engine.

Monte Paschi looks to leave 'emergency room' and return to profit

MILAN (Reuters) - Italian bank Monte dei Paschi di Siena set out plans to get out of the "emergency room" and return to profit on Wednesday, clearing the way for a state bailout that should remove the biggest threat to the country's financial stability.

Poland says close to missile launchers deal with Lockheed Martin

WARSAW (Reuters) - Poland will probably sign a supply deal with Lockheed Martin very soon for its long-planned HOMAR mobile artillery missile launcher project, defense minister Antoni Macierewicz said on Wednesday, ahead of a visit to Warsaw by U.S. President Donald Trump.

Oil retreats after bull run, on rising OPEC exports, strong dollar

LONDON (Reuters) - Oil prices fell more than 1 percent on Wednesday, ending their longest bull-run in more than five years, as climbing OPEC exports and a stronger dollar turned sentiment more bearish.

Airbus signs deal to sell 140 planes worth $23 billion to China

BERLIN (Reuters) - Airbus has signed an agreement to sell 140 aircraft to China, it said on Wednesday, in a deal worth almost $23 billion at list prices.

Deutsche Bank CEO says he has no plans step down: Die Zeit

FRANKFURT (Reuters) - Deutsche Bank Chief Executive John Cryan said he has no plans to step down from the helm of Germany's biggest lender, he told German weekly Die Zeit in an interview.

Tesla Price Target Cut To $180 At Goldman; Warns Of "Demand Plateau" For Model S/X

First came the insult.

In the pre-holiday confusion, Elon Musk reported that Tesla had missed consensus estimates for Model S/X deliveries in Q2, when the electric car company sold just 22,000 vehicles, below the 22,912 expected, and just barely above the bottom end of its own range. As he always does, Musk blamed the disappointing data on production bottlenecks in this case a "severe battery production shortfall", yet that did not explain why i) Tesla produced nearly 4k more vehicles in the quarter, or 25,708 suggesting the problem was not on the supply but demand side, and ii) Musk - who enjoys tweeting almost as much as the president - never mentioned said production hurdle in public previously, either on the social network, in an 8K, or during the recent earnings call.

There was an even bigger problem: after topping at 11.5k deliveries in Q1, the coolness factor behind the Model X appears to have fizzled, with just 10K Model X deliveries in the second quarter.

Now comes the injury, because moments ago Goldman, which has a "Sell" rating on the most overhyped stock of all time, said it was cutting its 6-month price target to $180 from $190 due to a "volume tweak" as "Model S/X" appear to have plateaued. Here is Goldman's David Tamberrino explaining what's changed:

Following TSLA's 2Q17 delivery and Model 3 announcements, we update our net volume forecasts as we believe that Model S and Model X demand is plateauing in the 24k range per quarter. However, with July being the soft launch date for the Model 3 (per company announc ...

Italy Openly Discusses Euro Exit In Parliament: Debt Restructuring Or "Italeave" On The Way?

Authored by Mike Shedlock via,

In Europe, where it is essentially taboo to publicly discuss anything deemed politically incorrect, some interesting conversations are taking place in the Italian parliament regarding the future of Italy in the eurozone.

Via email, Eurointelligence asks Is Italy heading for debt restructuring or euro exit?

We are reporting from an important conference in Rome yesterday that has caught the Italian news headlines this morning - on the future of Italian public debt. It was organized by the Five Star Movement, held in the Italian chamber of deputies, and openly discussed issues such default mechanism inside the eurozone, sovereign debt restructuring mechanisms, parallel payment systems, and of course euro exit.

What is important about this debate is that it is now taking place in public - you can't be more public than inside the parliament. Italians, not only the Five Star Movement, are openly talking about these issues.

One of us was on the podium, where we reiterated our criticism of the Five Star Movement's previous-held cavalier notion of a euro referendum. The essential point we were trying to make in the debate, well reflected in this morning's coverage by the main newspapers, is that euro exit is not a decision to be taken lightly. The announcement of a referendum would produce a financial crisis and might turn into a self-fulfilling prophecy. Euro exit belongs to the category of things that, citing Shakespeare's Macbeth, "if it were done when 'tis done, then 'twere well It were done quickly".< ...

Frontrunning: July 5

U.S. Warns North Korea It's Ready for War Over Missiles (WSJ)

U.S., South Korea stage show of force against North Korea (Reuters)

UN to Meet on North Korea as U.S. Confirms Rocket Was ICBM (BBG)

Trump talks tough, options limited (Reuters)

North Korea, Putin Meeting Top Agenda For Trump's Tripa (WSJ)

Ahead of fractious G20, Germany and China pledge new cooperation (Reuters)

Crude Tumbles After Russia Opposes Deeper Production Cuts (BBG)

Fed Signals Autumn Decision on Balance-Sheet Reduction (WSJ)

Euro zone businesses lost some momentum in June but still strong (Reuters)

Shopping-Mall Owners Pay Up to Stay Relevant in the Amazon Era (BBG)

Traders Brace for Comeback of Volatility (BBG< ...

Buy Gold Near $1,200 "As Insurance" - Swiss Bank

Buy Gold Near $1,200 "As Insurance" - Swiss Bank

- Buy gold near $1,200 "as insurance" - UBS Wealth
- UBS believe investors should take advantage of gold's first monthly decline
- "We like the insurance qualities for gold" on uncertainty
- Strong demand, weak output and low dollar to support
- Warning as North Korea tests intercontinental ballistic missile
- Launch of ICBCM is a "new escalation ...

How to Solve Problems of Misaligned Executive Pay

Investors should focus less on executive share awards and more on executive shareholdings

Dollar Doom and Gloom Looks Overdone

Emerging-market currencies have benefited from positive economic surprises this year. Their luck may not have much room left to run.

Volvo and China Charge Up Electric-Car Drive

Recent policy moves suggest Beijing is looking for quality, as well as quantity, when it comes to green cars.

Americans in this state are the biggest users of e-cigarettes

There's a burgeoning vaping community on social media.

Mark Hulbert: The oldest stock-market indicator sends a fresh 'buy' signal

Dow Theory says a healthy bull market is one in which both the Dow Industrials and Dow Transports are more or less equally participating.

Metals Stocks: Gold given light boost on North Korea angst but Fed uncertainty persists

Gold prices tipped higher Wednesday, edging off their lowest point in nearly eight weeks hit earlier this week, as geopolitical rumblings off set the effects on the metal from a modestly higher dollar.

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