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13Jul2017 Market Close: Wall Street Closes Higher, DOW Up 21 Points, Not Much Change Seen For Tomorrow

Written by Gary

US equities posted fractional gains today (SPY +0.2%), with financials giving the S&P 500 a bump a day ahead of earnings reports from several big U.S. banks.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Banks lead Wall Street higher ahead of earnings

NEW YORK (Reuters) - U.S. stocks posted muted gains on Thursday, with financials giving the S&P 500 a bump a day ahead of earnings reports from several big U.S. banks.

Snap shares draw bullish options bets after slipping below IPO price

NEW YORK (Reuters) - Options traders were placing bets this week that shares of Snap Inc were primed for a rebound after slipping below their initial public offering price of $17.

Yellen says 3 percent U.S. growth 'quite challenging' in coming years

WASHINGTON (Reuters) - It would be "quite challenging" for the United States to reach the 3 percent growth target set by President Donald Trump, Federal Reserve Chair Janet Yellen told a Senate panel on Thursday in a hearing focused on regulatory reform and a discussion of lagging productivity.

FanDuel, DraftKings scrap troubled merger

WASHINGTON (Reuters) - Daily fantasy sports companies FanDuel and DraftKings scrapped a plan to merge on Thursday following a legal challenge by U.S. antitrust enforcers.

Tale of two factories: hope, anguish ahead of Trump's steel tariff call

GRANITE CITY, Ill. (Reuters) - The blast furnaces and slab casters at United States Steel Corp's Granite City Works have been idle for 18 months, and laid-off workers here are pinning their hopes on President Donald Trump imposing broad new restrictions on imported steel.

Massive copper mine tests Trump's push to slash regulation

SUPERIOR, Arizona (Reuters) - Rio Tinto's proposed Resolution Copper Mine in Arizona would tunnel 7,000 feet underground, where rocks radiate heat from the earth's molten core. It would suck up enough water to supply a city and leave a crater a mile and a half wide and 1,000 feet deep.

Murdoch's Fox unlikely to offer remedies in Sky deal: source

LONDON (Reuters) - Rupert Murdoch is unlikely to offer any new concessions to protect the editorial independence of Sky , increasing the chance that the $15 billion takeover deal goes to a lengthy investigation, a person familiar with the situation said.

Investors bullish on financials ahead of bank earnings

NEW YORK (Reuters) - Over the last seven trading days, investors have more than doubled the amount of cash invested in a key financial sector fund, in a bet that second-quarter bank earnings will be robust.

Delta's profit tumbles on higher costs; passenger unit revenue rises

(Reuters) - Delta Air Lines Inc on Thursday reported a 21 percent drop in second-quarter profit because of sharply higher labor and fuel costs, despite higher passenger unit revenue, sending its shares down 2 percent.

Treasury Turmoil Returns As Fed-Flip-Flop Sends Stocks To Record Highs, VIX Below 10

Yellen's speaking again... give it all you've got!!

Stocks stalled early on (around 1010ET) thanks to inflation comments from Yellen, but that dip was bid back to the highs...then they took a little spill when Fed's Brainard admitted "asset valuations do look a bit stretched" around 1400ET. Once again the rally-monkeys came out - even as it became clear that GOP will not have the votes for the revised healthcare bill...

Nasdaq up 5 days in a row - the longest streak since May... Early Small Caps weakness was ramped all the way back into green...

Futures show that in general markets went nowhere today...

On the week, Trannies are hovering just into the green as Nasdaq outperforms...

Retail was bid today (best day of the year), because suddenly they're all fixed, and financials were higher ahead of tomorrow's earnings..

VIX To Double Within A Year, Natixis Warns

Vol-sellers beware. That's the message from Natixis Global Asset Management's Brett Olsen and Nicholas J. Elward, in their latest note, as they warn "it stands to reason that the market will see a reversion to the mean and find the VIX trading in the 20+ range before too long."

There has been much discussion lately about how stock market volatility is at near historic lows. The Chicago Board Options Exchange Volatility Index® (or VIX), a measure of implied or future volatility, is at a level of roughly 10 as of June 30, 2017. If one looks at the history of the VIX, it has typically averaged closer to 20.

Over the last 20 years, there has been only one other period of volatility this low, over the 2004-2006 timeframe. This period was characterized by economic expansion and a strong stock market as the economy moved out of the 2000-2003 tech bubble burst. This period of calm came to an end with extremely high volatility as we entered the Great Recession of 2008.

There are several factors that could cause the VIX to increase in the coming months; personally, we believe it may double. Here are four reasons why:

1) Geopolitical unrest - There continues to be concern among many market analysts around North Korea, Russia and a variety of Middle Eastern nations - including Turkey, Iran, Saudi Arabia, Syria, and Iraq. Dep ...

The Striking Reason Why The US Just Spent A Record $429 Billion In One Month

On Thursday morning the CBO released a surprisingly upbeat assessment of Donald Trump's proposed budget, calculating that it would cut the cumulative US deficit by 30% over the next decade, preventing the US debt from spiraling out of control (even further).

That however. may be an overly optimistic assessment, especially following the release of the latest monthly budget data, which showed that not only did the US deficit surge to $90 billion, far above the $38 billion consensus estimate, and a "NM" compared to the $6.3 billion budget surplus in June of last year, but the US also saw the biggest one month outlay on record, at $429 billion, 33% higher than the $323 billion in outlays one years ago.

What prompted this massive surge in outlays?

The biggest reason for the outlier print is that according to Stone McCarthy, outlays increased by roughly $60 billion in "other" items relative to baseline because the Treasury revised up its estimates of the subsidy cost of student loans, and to a lesser extent housing, it guarantees.

Here is the CBO explanation:

Outlays for the Department of Education rose by $31 billion (or 51 percent), because the department revised u ...

Is Wall Street Funding A Shale Failure?

Authored by Nick Cunningham via OilPrice.com,

The latest figures from the EIA show that despite some hiccups, the shale rebound is still on track. Last week, the sharp drawdown in inventories made headlines, but buried within the weekly figures was a bounce back in oil production, reigniting fears that the market will take much longer to balance.

(Click to enlarge)

The U.S. shale industry has already added almost a half million barrels per day since the end of last year, taking production up to 9.3 million barrels per day (mb/d). But production is expected to continue to grow rapidly, with projections putting output at a record-high 10 mb/d by next year.

The coming wave of new supply will only be possible with the generous help of Wall Street. According to the Wall Street Journal, major banks and investors have showered the industry with credit and equity, pouring an estimated $57 billion into the sector over the past 18 months. All of that money is being translated into a sharp rise in drilling even as oil prices slump.

But while individual companies hope to attract investors and boost profits by ratcheting up production, the industry as a whole is shooting itself in the foot. Some less efficient drillers are increasing production but losing money on every barrel produced.

There is a growing recognition that loose money an ...

A One-Two Combination for Stocks

A great time to buy stocks is when interest rates are falling and profit growth is accelerating. As earnings season kicks off, rates and earnings are doing the opposite, and that tends to be a bad time to own shares.

Intel: Lonely At The Top

Intel's dominance in key chip makers has created a unique vulnerability. As challengers emerge in PCs and servers, Intel seems to have nowhere to go but down.

You Can't Build a Low-Cost Airline Without Low Costs

Norwegian Air wants to upend the market for travel between the U.S. and Europe. But rapid expansion has come at a cost.

Bond Report: Global bond selloff resumes as Draghi set to signal shift away from QE

Government bonds on Thursday sell off across major developed markets, driving yields higher, as investors anticipate further evidence of a tapering of longstanding easy-money policies that have supported prices of sovereign paper.

Why back-to-school sales tax holidays could actually cost you money

Critics say these temporary tax breaks don't have their intended effect.

Venus Williams, at 37 years old, is just one win from the Wimbledon title

Williams will play for her sixth Wimbledon trophy on Saturday.

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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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