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07Jul2017 Market Update: Wall Street Climbing Higher In Late Afternoon Trading, Investors Not Too Interested In North Korea Drama Today As WTI Crude Falls Into The Low 44 Handle, Gold Sinks Lower As Investors BTFD On Wall Street

Written by Gary

Wall Street extended gains in late afternoon trading (SPY +0.7%) today, powered by robust jobs data and a rebound in technology stocks. Crude prices fell more than 3 percent . . .


Here is the current market situation from CNN Money

North and South American markets are mixed. The S&P 500 is higher by 0.70%, while the Bovespa is leading the IPC lower. They are down 0.31% and 0.17% respectively.

. . . after data showed U.S. production rose last week just as OPEC exports hit a 2017 high.

The Federal Reserve stuck to its script, forecasting a gradual increase in interest rates and the imminent wind-down of its balance sheet in an economy that's still expanding eight years into a recovery.

There's still one giaif nt problem with the US jobs picture

What Is Moving the Markets

Here are the headlines moving the markets.

Wall Street climbs further on jobs data, gains in tech

(Reuters) - Wall Street extended gains in early afternoon trading on Friday, powered by robust jobs data and a rebound in technology stocks.

Amazon cornered Whole Foods into not seeking more bids, filing shows

(Reuters) - Amazon.com Inc told Whole Foods Market Inc it would not engage in a sale process for the U.S. grocer that involved other bidders, a regulatory filing showed on Friday, shedding new light on the $13.7 billion acquisition.

Buffett bets big on power infrastructure with $9 billion Oncor deal

(Reuters) - Warren Buffett's Berkshire Hathaway Inc said on Friday it would pay $9 billion to pick up the parent of Texas power transmission company Oncor Electric Delivery Co from bankruptcy, stepping up its pursuit of steady returns in utilities.

Boeing delivers fewer planes in second quarter

(Reuters) - Boeing Co said on Friday it delivered 183 jetliners in the second quarter, down from 199 a year earlier.

Stocks heading for 'Humpty Dumpty' big fall: BAML

LONDON (Reuters) - If you know your nursery rhymes, analysts at Bank of America Merrill Lynch think over-pumped stocks are heading for a Humpty Dumpty-style fall in the coming months.

Tesla says 3,500 in transit vehicles to be counted as third-quarter deliveries

(Reuters) - Tesla Inc said on Friday that about 3,500 vehicles were in transit to customers at the end of the second quarter and they would be counted as deliveries in the third quarter.

U.S. job growth accelerates in June, wages continue to lag

WASHINGTON (Reuters) - U.S. job growth surged more than expected in June and employers increased hours for workers, signs of labor market strength that could keep the Federal Reserve on course for a third interest rate hike this year despite sluggish wage gains.

Fed sees steady economy, only 'moderate' financial vulnerabilities

WASHINGTON (Reuters) - The U.S. economy continues to churn out jobs and grow at a steady pace, with investment and consumer confidence both healthy and only moderate signs of risk in financial markets, the U.S. Federal Reserve said on Friday in its semiannual report to Congress.

Deutsche Bank sees progress toward IPO of asset management arm: memo

ZURICH (Reuters) - Deutsche Bank said that it is making progress in its planned partial initial public offering (IPO) of its asset management unit, according to a recent memo to staff.

Putin Reveals What He Discussed With Trump In Two-Hour Long First Meeting

Following their first ever, 2+ hour meeting which was originally supposed to last only 30-40 minutes, the question on everyone's mind was what did the two discuss.

And, speaking at the beginning of his meeting with Japanese Prime Minister Shinzo Abe, Putin said that during his first meeting with US President Donald Trump, the two world leaders discussed the situation in Ukraine, Syria, the fight against terrorism and, surprisingly, cybersecurity.

"I had a very lengthy conversation with the President of the United States, there were a lot of issues such as Ukraine, Syria, other problems, some bilateral issues" according to Interfax.

"We again returned to the issues of fighting terrorism and cybersecurity," Putin added.

Until now, Putin and Trump had only spoken on the phone. They were not alone: Russian Foreign Minister Sergey Lavrov and US Secretary of State Rex Tillerson were also present at the talks.

* * *

Earlier, during the press photo session, Trump told the media that "President Putin and I have been discussing various things, and I think it's going very well."

"We've had some very, very good talks, we are going to have a talk now and obviously that will continue," Trump added, saying there are hopes of "a lot of very positive things happening."

"It's an honor to be with you, thank you," Trump concluded, offering his hand to Putin.

"Spasibo [thank you]," the US leader added in Russian.

US Oil Rig Count Rises But "Must Drop 150 For Oil Markets To Balance"

After falling for the first time this year last week, Baker Hughes reports US oil rig count rose once again (as perhaps Cindy impacted drilling last week) for the 23rd week in the last 24.



*U.S. TOTAL RIG COUNT UP 12 TO 952 , BAKER HUGHES SAYS :BHI US

*U.S. OIL RIG COUNT UP 7 TO 763 , BAKER HUGHES SAYS :BHI US

*U.S. GAS RIG COUNT UP 5 TO 189 , BAKER HUGHES SAYS :BHI US

This week saw a resurgence in US crude production (as Cindy's effects wear off)...This is the highest Lower 48 production since Aug 2015...

And it is that production spike that poured coled water on the short-lived rally after DOE showed inventories dropping. However, as OilPrice.com's Tsvetana Paraskova notes, the rig count needs to drop drastically further if any equilibrium in the global oil market is possible...

Analysts and investors have been growing increasing ...

Japanese Equity Market Outflows Spike To 8 Year High

With The Fed is full 'taper' mode and The ECB hinting, the world is left to rely on Kuroda to single-handedly buy-the-dip in stocks and maintain bond yields at the mandated level. With Japanese stocks fading in the last two weeks (as bond yields spike), it appears the ubiquitous 'hand of god' has disappeared...

And judging by the biggest Japanese equity fund outflows in 8 years, the fear is spreading...

As Bloomberg notes, it appears a single institutional investor likely triggered the largest outflow from the iShares MSCI Japan exchange-traded fund, ticker EWJ, since the depths of the financial crisis.

The benchmark $16.5 billion ETF, which has notched a 9.2 percent return so far this year, was hit by a $759 million withdrawal Thursday, the biggest one-day outflow among U.S.-listed ETFs, and the most since September 2009.

"The volume data show this was likely one big investor, who is unnerved by Japan's recent shakiness and wants out before it gets worse," said Eric Balchunas, ETF analyst at Bloomberg Intelligence, referring to Prime Minister Shinzo Abe's election defeat Sunday that calls into question the economic reform agenda.

US, Russia Agree On Ceasefire In Southwest Syria

With Presidents Trump and Putin having spoken for over two hours on the sidelines of the G-20 meeting in Hamburg, well over the 30 minutes initially scheduled, the US press was going berserk with speculation what the two asre discussing for so long - surely CNN's anonymous sources had already disclosed that Trump was about to announce some tax-efficient handover of the US to Moscow...

... there was a surprise announcement, because as AP reported, the US and Russia did announce a cease-fire agreement in southwest Syria.

As the WSJ adds, the U.S. and Russia have been "meeting secretly in recent months to discuss setting up what officials call a de-escalation zone in southwest Syria", in which Syrian government forces and rebels would be separated in hopes of ending hostilities in the region.

Officials hope that the first such zone will help reduce violence and that the U.S. and Russia can work to set up other zones around the country.

As AP adds, the cease-fire is set to take effect July 9 at noon Damascus time, and "the deal marks a new level of involvement for the U.S. in trying to resolve Syria's civil war."

A separate deal to create "de-escalation zones" was brokered between Russia, Turkey and Iran, but not the U.S., but follow-up talks this week in Kazakhstan to finalize a cease-fire in those zones failed to reach a deal.

The U.S. and Russia have been backing opposing sides in Syria's war.

This is a positive sign that there is some rapprochement between th ...

Markets Not Ready for Jump in Jobs

The June employment report was good news for American workers. For investors, the message is mixed.

Stick With European Stocks Even as Bonds Wobble

After a strong start to the year, European stocks have come off the boil. In particular, the bond-market turmoil of the past two weeks has jolted the market. But a decent growth outlook means investors shouldn't be too nervous about Europe.

The World's Most Profitable Tech Company? Not Apple

The South Korean tech giant has surpassed Apple in profitability, but needs its U.S. peer's fortunes to stay healthy.

GE's latest acquisition highlights need to boost earnings and cash flow

Buying Baker Hughes will create a leader in oil-field services, but it also raises the company's leverage and weakens cash flows, according to Moody's.

The Fed: Fed sticks to rate rise forecast, pushes back on policy rules

The Federal Reserve stuck to its script in its semiannual monetary policy report, forecasting a gradual increase in interest rates and the imminent, if gentle, winddown of its balance sheet in the face of an economy that's still expanding eight years into a recovery.

Market Snapshot: Stock market poised for weekly gains as U.S. adds 222,000 jobs in June

The S&P 500 and the Nasdaq on Friday erase losses for the week following an employment report that showed the U.S. added 222,000 jobs in June.

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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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