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14Jul2017 Market Close: Wall Street Investors Happy With The 'not-So-Good' Morning Financial News, Crude Prices Climb In Spite Of World Glut

Written by Gary

US stocks closed near record levels today (SPY +0.5%), as weak economic data dimmed chances of another rate hike this year and tech stocks gained. WTI crude settled . . .

Todays S&P 500 Chart

US stocks closed near record levels today (SPY +0.5%), as weak economic data dimmed chances of another rate hike this year and tech stocks gained. WTI crude settled . . .

. . . near its session high in the high 46 handle and the US dollar is still sinking.

Sue Chang points out that U.S. stocks haven't seen a major selloff in over a year

The Dow Jones Industrial Average (DJIA) hit new highs on Wednesday and Thursday . But Mark DeCabre pointed out that the oldest stocks index — which includes only 30 companies — has become increasingly disconnected from the S&P 500 (SPX).

The Market in Perspective

Here are the headlines moving the markets.

U.S. lawmaker calls for hearing on Amazon's Whole Foods deal

WASHINGTON/NEW YORK (Reuters) - The top Democrat on the U.S. House of Representatives' antitrust subcommittee has voiced concerns about Amazon.com Inc's $13.7 billion plan to buy Whole Foods Market Inc and is pushing for a hearing to look into the deal's potential impact on consumers.

Wall St. at record as data dulls rate hike chances

(Reuters) - U.S. stocks were trading at record levels in early afternoon trading on Friday, as weak economic data dimmed chances of another rate hike this year and tech stocks gained.

JPMorgan posts higher profit; shares dip on net interest income view

(Reuters) - JPMorgan Chase & Co reported a better-than-expected quarterly profit on Friday due to strong loan growth and higher interest rates, but said net interest income for the year would be lower than expected, sending its shares down about 2 percent.

Loan growth, better spreads fail to impress U.S. bank investors

NEW YORK (Reuters) - U.S. banks are starting to see some long-awaited benefits of higher interest rates, with four of the largest lenders beating analysts' quarterly profit expectations on Friday by raising loan prices without paying much more for deposits.

AT&T to run wireless, media as separate units - source

(Reuters) - AT&T Inc will run its wireless and DirecTV satellite television businesses separately from Time Warner Inc's media assets following its $85.4 billion acquisition of the entertainment group, a source told Reuters on Friday.

Exclusive: Toyota made UK investment decision after Brexit reassurances - sources

LONDON (Reuters) - The British government helped to secure a more than 240-million ($310 million) pound investment from Toyota in its English plant with a letter reassuring the Japanese carmaker over post-Brexit trading arrangements, two sources told Reuters.

Sprint chairman engages Warren Buffett for possible investment: WSJ

(Reuters) - Sprint Corp's chairman, Masayoshi Son, has engaged in talks with Berkshire Hathaway Inc's Warren Buffett and media mogul John Malone to discuss a potential investment in the U.S. wireless company, the Wall Street Journal reported on Friday.

AstraZeneca offers no comment after report saying CEO staying

LONDON (Reuters) - Anglo-Swedish pharmaceutical firm AstraZeneca declined to comment on speculation about the future of its chief executive Pascal Soriot on Friday, after a report quoted Bloomberg news agency saying he would stay in his post.

Mercedes cars to face more emissions tests in Germany

FRANKFURT (Reuters) - Germany has found no signs so far that Mercedes-Benz used illegal software to manipulate diesel emissions but a new round of tests is being conducted, the transport ministry said on Friday.

Why Has The Thinking Class Of America Abandoned Thinking?

Authored by James Howard Kunstler via Kunstler.com,

The abiding enigma of this tormented era remains: why has the thinking class of America abandoned thinking?

The answer is: it's the reaction to their own failure.

Failure to do what? To produce the utopia that Gnostic liberalism promised - a perfect world based on altering human nature.

The result is an essentially religious hysteria, like the witch frenzies of Medieval Europe that were sometimes provoked by ergot poisoning — a fungus with toxic psychotropic properties that grew on the harvested rye, inducing frightful hallucinations in the villagers, who then lashed out at their perceived supernatural antagonists. Trump in our time is the ergot on the bread of our politics. And Russia is the witch.

Like other operations of the human mind, this collective fugue-state has a big subconscious module in it: the deep, poorly articulated fear that the single notion of Progress behind progressive politics in the industrial era has reached a dead end. The world is clearly not becoming a better place, but rather reeling into disorder and ecological crisis, despite all the rational programs and politics of modern democracy, and political failure is everywhere.

The "peace dividend" promised by the end of the cold war has degenerated into endless war. The miraculous promises of medicine have been hijacked by "health care" racketeering now institutionalized under ObamaCare. The Civil Rights campaign begun in the 1950s with the most earnest, hopeful intentions (and generous policies) has produced off-the-charts black crime rates, educational defeat, ruined cities, and epic rancor. The middle class has been left economically shipwrecked ...

Congress Begins To Ask If Amazon Is Getting Too Big, Antitrust Hearing Called

Is Amazon getting too big?

While that question has yet to be formally asked by the US government, on Friday we got a hint that it may be next on the agenda after the top Democrat on the House antitrust subcommittee, David Civilline, voiced concerns about Amazon's $13.7 billion plan to buy Whole Foods Market and in a letter to the House Judiciary Committee, Reuters reports that the antitrust specialist has requested a hearing to look into the deal's potential impact on consumers. And, as MarketWatch adds, "fresh off its biggest Prime Day yet, the Whole Foods Market Inc. bid, and a slew of announcements including Amazon Wardrobe, Amazon.com Inc. was the subject of two investor calls Thursday that raised concerns that it is getting too big."

In what could be the start of a wider investigation into Amazon's impact on the market, Cicilline said in a a statement that "Amazon's proposed purchase of Whole Foods could impact neighborhood grocery stores and hardworking consumers across America," adding that "Congress has a responsibility to fully scrutinize this merger before it goes ahead." The deal must be approved by U.S. antitrust enforcers, in this case most likely the Federal Trade Commission. While Congress plays no formal role in that process, hearings are often used to highlight the possible impact of deals on consumers. Still, without Republican support, even a hearing is unlikely to happen.

To be sure, Amazon's dominance across increasingly more sectors - from online retail, to books, to cloud computing, and more recently, groceries and fashion - has not gone unnoticed. In ...

Spitznagel Slams "The Part-Time Critics Of Central Banks" - "You're Too Late"

Authored by Mark Spitznagel via The Mises Institute,

There seems to be no shortage today of investors and pundits criticizing the market interventions of the world's central banks.

Monetary stimulus in the form of artificially low interest rates and bloated central bank balance sheets ($18.5 trillion, to be exact), the argument goes, have created another dangerous financial bubble (evidenced by ubiquitously bubbly stock market valuation ratios) that ultimately threatens the financial system yet again. The author shares wholeheartedly in this criticism.

The ethical problem is, where were these voices when this all started, with Greenspan in the 1990s and, more specifically, with Bernanke in 2008? The central bank critics today who were not critics of - and in most cases were even sympathetic to - the great bailouts and stimulus that started almost a decade ago have reserved their criticisms only for those interventions that appear to hurt their interests, as opposed to those that have helped them.

After all, no one would disagree that bailouts and monetary stimulus got us out of the last financial crisis, but they also certainly got us to where we are today, vulnerable to another even bigger one.

We are so concerned about our friend the strung-out junkie, though we paid little mind when they were but a casual user. It is so easy to care when problems become obvious and critical, so hard when they are subtler and nascent.

Artificial stimulus in an economy is the same: it is easily ignored as a problem in its infancy, but it always develops into a huge problem. Economies and markets are structurally altered and distorted by such stimulus, such that it cannot be removed without breaking those new ...

JPMorgan Warns S&P Faces Large "Negative Gamma", Could Exaggerate Any Drop Next Week

Earlier in the week we noted the 'odd' surge in downside protection demand even as tech stocks were soaring, and now JPMorgan is noting the S&P has shifted to a large 'negative gamma' underhang which "could boost volatility if we were to sell off."

As Bloomberg notes, options markets suggest a lack of confidence in the rally. Traders are piling into downside hedges on every uptick in prices...

And JPMorgan derivatives desk writes:

Equity realized volatility increased moderately since June expiry (e.g. 15-day S&P 500 volatility increased from 4.5% to 9%), in line with our view, as much of the long gamma overhang heading into June rolled off.

The market has been oscillating around the level where the P-C gamma imbalance is flat (Figure 2) over the past few weeks.

Next Friday ~$550Bn of S&P 500 options are set to expire.

Banks Get a Wake-Up Call

J.P. Morgan's downgraded expectations, delivered on a busy day when Citigroup and Wells Fargo also reported quarterly results, serves as a warning for a sector that has rallied strongly in recent weeks.

More Bad News for Retailers

Retail sales were weak last month. The Commerce Department on Friday reported that overall sales in May fell 0.2% on the month after slipping 0.1% in April. Compared with a year earlier, they were up just 2.8%.

How to Prepare When Central Banks All Row in the Same Direction

The risk to markets is that investors get too comfortable with the idea that by moving gradually central banks won't create much disturbance.

Trump Today: Trump Today: President says Senate 'must come through' on Obamacare replacement

President Donald Trump ramped up pressure on the Senate to pass its Obamacare replacement, spoke with Saudi King Salman about the dispute between Qatar and four Arab countries and returned to the U.S. from Paris after meeting French President Emmanuel Macron.

The Tell: J.P. Morgan's Dimon launches into expletive-tinged rant, saying 'almost an embarrassment to be American'

J.P. Morgan Chase & Co.'s outspoken CEO Jamie Dimon said the U.S. economy is being held in check by a lack of policy momentum in Washington, D.C., that has failed to deliver a spate of pro-growth legislation that could help to boost an otherwise sluggish economy.

Key Words: Technology that seems 'nonsensical' gets Ashton Kutcher's money

Ashton Kutcher, who once played the role of Apple co-founder Steve Jobs, told Stephen Colbert on "The Late Show" Thursday that he's interested in startups when they're little more than "two guys, a dog and a Power Point."

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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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