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05Jul2017 Market Close: Wall Street Closed Mixed, The Fed Grows Worried Its Loose Policy Threatens US Financial Stability, US Crude Sinks 4.1%, Settling At $45.05 And Ending Longest Winning Streak Since 2012

Written by Gary

US markets closed mixed with the DOW down one point, the Nasdaq up +0.7% and the SP500 up +0.15%. The Fed's policymakers were increasingly split on the outlook for inflation and . . .

Todays S&P 500 Chart

. . . and a sharp drop in oil prices dragged the energy sector lower and kept the Dow and SP 500 near the unchanged mark today (SPY +0.2%), while gains in technology stocks lifted the Nasdaq.

The Market in Perspective

Here are the headlines moving the markets.

Fed minutes suggest increasing tensions on inflation shortfall

WASHINGTON (Reuters) - Federal Reserve policymakers were increasingly split on the outlook for inflation and how it might affect the future pace of interest rate rises, according to the minutes of the Fed's last policy meeting on June 13-14 released on Wednesday.

Energy weighs on Dow, S&P 500; tech lifts Nasdaq

(Reuters) - A sharp drop in oil prices dragged the energy sector lower and kept the Dow and S&P 500 near the unchanged mark on Wednesday, while gains in technology stocks lifted the Nasdaq.

'Pharma bro' Shkreli barred from discussing trial around courthouse

(Reuters) - A U.S. judge on Wednesday ordered Martin Shkreli to stop talking about his fraud case in or around the Brooklyn courthouse where he is standing trial, five days after the former drug company executive burst into a room full of spectators and attacked the credibility of a government witness.

U.S. card firm Vantiv goes global with $10 billion Worldpay buy

(Reuters) - U.S. credit card processor Vantiv agreed to buy Britain's Worldpay for 7.7 billion pounds ($10 billion) on Wednesday in a move expected to trigger further deals.

Exclusive: Energy giants court Qatar for gas expansion role despite crisis

LONDON (Reuters) - The West's three biggest energy corporations are lobbying Qatar to take part in a huge expansion of its gas production, handing Doha an unintended but timely boost in its bitter dispute with Gulf Arab neighbors.

Exclusive: EU considers record fine as panel checks Google Android case - sources

BRUSSELS (Reuters) - EU antitrust regulators are weighing another record fine against Google over its Android mobile operating system and have set up a panel of experts to give a second opinion on the case, two people familiar with the matter said.

Jana values EQT break-up at $4.5 billion: securities filing

(Reuters) - Jana Partners LLC on Wednesday detailed its criticism of natural gas producer EQT Corp's plan to buy Rice Energy Inc , laying out its argument as to why the hedge fund believes an EQT break-up would be better for shareholders than the pending $6.7 billion deal.

Mexico says Trump-Pena Nieto meet unlikely to lead to big deals

MEXICO CITY (Reuters) - A meeting between Mexican President Enrique Pena Nieto and U.S. President Donald Trump on Friday at the G20 summit in Germany will last about 30 minutes and probably not lead to any major agreements, Mexico's foreign minister said on Wednesday.

U.S. accounting watchdog probes PwC's audits of BT Italy: source

MILAN (Reuters) - The U.S. accounting watchdog is investigating accounting firm PricewaterhouseCoopers's [PWC.UL] audits of British telecoms group BT's Italian business, which has been hit by a book-keeping scandal, a source close to the matter said.

Pimco CIO Says Firm Is "Reducing Risk Across The Board"

Mark Kiesel probably isn't the first name that springs to mind when Pimco's investment strategies are being discussed. That honor, ironically, still resides with Bill Gross even though he departed the firm for Janus over 3 years ago.

That said, as the manager of the $10.4 billion Pimco Investment Grade Corporate Bond Fund and the firm's CIO of global credit, you should probably at least take notice when Kiesel says that he expects returns on financial assets to "be much lower for the next 3-5 years" and that, as a result, he's "reducing risk across the board"...which is exactly the message he delivered on Bloomberg earlier this morning.

"We actually think over the next three to five years the returns on financial assets are going to be much lower."

"We're concerned about monetary policy eventually reversing."

"Number two, the fiscal expectations are too high in the U.S."

"And number three, we're worried about geopolitical tension."

"In general, we have been reducing risk across the board."

So where is Kiesel hiding Pimco's $10 billion of capital under his management? Apparently, it's flowing into South America and 10-year U.S. Treasuries. Per Bloomberg:

Zimbabwe 2.0: South Africa President Proposes Land "Expropriation Without Compensation"

With every passing day the formerly booming nation of South Africa is getting ever closer to the formerly banana republic of Zimbabwe.

On Wednesday, South Africa's ruling African National Congress proposed at its 5th annual national policy conference that in addition to potentially nationalizing the country's central bank, that land expropriation without compensation should be allowed where it is "necessary and unavoidable," President Jacob Zuma said.

There was a hard push from supporters of President Jacob Zuma for a decision on the redistribution of land without compensation‚ which would necessitate a change to the constitution. But as the Sunday Times reported, according to the ANC's economic transformation subcommittee head‚ Enoch Godongwana‚ both this proposal and the current system of redistribution with compensation remain on the table for debate by branches. Zuma‚ however‚ hinted in his closing address that there could be legislative changes for expropriation without compensation.

"We agree on the imperative to accelerate land redistribution and land reform. Again we had robust discussions on the modalities to achieve this. We agree that using the fiscus for land redistribution must be accompanied by other measures if we are to achieve the goal at the required pace," said Zuma in his closing remarks at the six-day conference held in Johannesburg.

"Where it is necessary and unavoidable this might include expropriation without compensation‚" Zuma said.

As

Haley: US Will Use Military In North Korea "If It Must"

The war drums are beating louder, and as US Ambassador to the UN Nicky Haley said moments ago as she speaks live (webcast), the North Korea launch is clear, sharp military escalation and the US will use the full range of its capabilities in North Korea including military force, "if it must." Her key soundbites from Reuters and Bloomberg:



HALEY: PREPARED TO USE THE FULL RANGE OF ITS CAPABILITIES TO DETER NORTH KOREA, INCLUDING MILITARY FORCE "IF WE MUST"

HALEY: U.S. WON'T HAVE PATIENCE FOR WATERED DOWN UN RESOLUTION

She also said that an escalated response needed in wake of ICBM launch, and sent a clear warning to China over supporting N. Korea whose launch shows North Korea "does not want to be part of a peaceful world":



HALEY SAYS COUNTRIES ALLOWING TRADE WITH NORTH KOREA IN VIOLATION OF U.N. SANCTIONS WILL NOT BE ALLOWED TO CONTINUE TRADE WITH U.S.

In the speech she said that "today is a dark day - it is a dark day because yesterday's actions by North Korea made the world a more dangerous place."

Amb. Nikki Haley: "Today is a dark day - it is a dark day because yesterday's actions by North Korea made the world a more dangerous place." pic.twitter.com/TZiHcRLOBS

— CBS News (@CBSNews) July 5, 2017

She also added that North Korea's "actions are quickly closing off the possibility of a diplomatic solution," and explained that previous sanctions against NK "have been insufficient to get them to change their destructive course."

There is still some hope that war may be avoided: Haley said that the U.S. will introduce a new UN resolution in coming days to increase ...

The Global Oil Demand Driver That Is Being Ignored

Authored by Nick Cunningham via OilPrice.com,

When looking at oil demand, oil market analysts focus overwhelmingly on passenger vehicles. One of the hottest debates today is over the prospect of peak oil demand: whether or not electric vehicles along with general trends towards more fuel efficiency will ultimately lead to a peak and decline of total oil demand worldwide. No doubt the upcoming release of Tesla's Model 3 will spark more than a few columns on how it could be the beginning of the end for oil.

But the conversation often overlooks the role that heavy trucks and freight play in driving demand. The International Energy Agency just published a report arguing that the world needs to get a handle on fuel efficiency for freight, or else oil demand will continue to rise, regardless of how many Tesla's are on the road.

Freight transit is crucial for economic growth, and indeed, it tends to be correlated with GDP. The IEA says that only four countries - Canada, the U.S., China and Japan - have fuel efficiency standards for heavy trucks, one-tenth of the 40 countries that have rules for passenger vehicles.

"For far too long there has been a lack of policy focus on truck fuel efficiency. Given they are now the dominant driver of g ...

How to Solve Problems of Misaligned Executive Pay

Excessive, opaque pay packages for company bigwigs are a perennial problem for shareholders. A few U.K. companies are embracing a new approach: Scrap targets and make bosses long-term shareholders. U.S. boards should take note.

Reality Bites for Tesla Shares

Investors started to lose patience with Tesla this week after another unkept promise: the jolt from Volvo that all its cars would be electric or hybrid by 2019.

Payments Business Gets a $10 Billion Jolt

Proposed major cross-border deal between U.S. and U.K. payments leaders propels industry into spotlight.

AMD's stock rockets to snap long losing streak as upbeat data fuels chips rally

AMD's stock shot higher, snapping the longest losing streak in 18 months, as upbeat industry sales data helped spark a broad rally in chip stocks. Nvidia shares also get a boost from news from new and existing technology partners.

Personal Finance Daily: Americans spend $100 billion on summer vacations and here's something else e-commerce is killing

Wednesday's top personal finance stories

Plus-size model confronts seatmate on plane for fat shaming her

One of the biggest anxieties of travelers today is sitting next to an 'unpleasant' seatmate.

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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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