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17Jul2017 Pre-Market Commentary: Wall Street Flat, WTI Crude Trading In The 45 Handle, US Dollar Remains Weak

Written by Gary

US stock index futures were little changed this morning (SPY -0.04%) as investors treaded water ahead of a busy earnings week from big U.S. companies.


Here is the current market situation from CNN Money

European markets are mixed. The FTSE 100 is higher by 0.40%, while the DAX is leading the CAC 40 lower. They are down 0.28% and 0.13% respectively.

What Is Moving the Markets

Here are the headlines moving the markets.

U.S. stock futures little changed ahead of big earnings

(Reuters) - U.S. stock index futures were little changed on Monday as investors treaded water ahead of a busy earnings week from big U.S. companies.

Trian seeks seat for Peltz on P&G board

(Reuters) - Nelson Peltz's Trian Fund Management LP said on Monday it was seeking a seat for its billionaire chief executive at Procter & Gamble Co's board as it looks to push the company to take more drastic steps to revive sales.

Lack of voting rights may keep Snap, others from MSCI indexes

BOSTON (Reuters) - MSCI Inc has proposed leaving shares of Snap Inc and other companies including Eaton Vance Corp out of stock indexes because they lack voting rights, a sign of the rising skepticism facing corporate structures that boost the power of insiders.

Low-fee BlackRock funds rake in cash but revenues disappoint

NEW YORK (Reuters) - BlackRock Inc, the world's biggest asset manager, reported a massive influx of cash into its low-cost funds but nonetheless fell short of Wall Street's forecasts as price cuts and lower performance fees dented revenue.

Major tech firms urge U.S. to retain net neutrality rules

WASHINGTON (Reuters) - A group representing major technology firms including Alphabet Inc and Facebook Inc urged the U.S. Federal Communications Commission on Monday to abandon plans to reverse the landmark 2015 rules barring internet service providers from blocking or slowing consumer access to web content.

Didn't pay your Macy's bill? Expect a text from Citigroup

NEW YORK (Reuters) - When consumers have trouble making ends meet, bills from retailers that have gone bankrupt or closed tend to go toward the bottom of the pile.

China's strong second-quarter GDP growth paves way for deeper reforms

BEIJING (Reuters) - China's economy expanded faster-than-expected in the second quarter, setting the country on course to comfortably meet its 2017 growth target and giving policymakers room to tackle big economic challenges ahead of key leadership changes later this year.

Not so fast: U.S. restaurant workers seek ban on surprise scheduling

NEW YORK (Reuters) - The text message came as Flavia Cabral walked to a McDonald's restaurant in Manhattan for her 6 p.m. shift on a May evening. It was from her manager. Business was slow and she was not needed.

BNY Mellon names former Visa CEO to top job

(Reuters) - Bank of New York Mellon Corp , the world's largest custodian bank, appointed former chief executive of Visa Inc Charles Scharf as its CEO, effective immediately.

America's Disneyland Economy

Authored by Michael Snyder via The Economic Collapse blog,

Disneyland is known as a place "where dreams come true" and where every story always has a happy ending. But there is going to be no happy ending for the U.S. economy.

Wishful thinking has resulted in one of the greatest stock market rallies in history in recent months, but like all childhood fantasies, it won't last. The real economy continues to deteriorate, and we can see this even right outside of the gates of Disneyland. Every night growing numbers of homeless people sleep on the pavement just steps away from "the happiest place on Earth". It can be fun to "play make believe" for a while, but eventually reality always catches up with us.

Without a doubt, the stock market has been on a tremendous run. Since Donald Trump's stunning election victory in November, the market has been setting record high after record high, and it is now up a total of 17 percent...

The Dow Jones Industrial Average recorded its 23rd all ti ...

There Has Been Just One Buyer Of Stocks Since The Financial Crisis

When discussing Blackrock's latest quarterly earnings (in which the company missed on both the top and bottom line, reporting Adj. EPS of $5.24, below the $5.40 exp), CEO Larry Fink made an interesting observation: "While significant cash remains on the sidelines, investors have begun to put more of their assets to work. The strength and breadth of BlackRock's platform generated a record $94 billion of long-term net inflows in the quarter, positive across all client and product types, and investment styles. The organic growth that BlackRock is experiencing is a direct result of the investments we've made over time to build our platform."

While the intention behind the statement was obvious: to pitch Blackrock's juggernaut ETF product platform which continues to steamroll over the active management community, leading to billions in fund flow from active to passive management every week, if not day, he made an interesting point: cash remains on the sidelines even with the S&P at record highs.

In fact, according to a chart from Credit Suisse, Fink may be more correct than he even knows. As CS' strategist Andrew Garthwaite writes, "one of the major features of the US equity market since the low in 2009 is that the US corporate sector has bought 18% of market cap, while institutions have sold 7% of market cap."

What this means is that since the financial crisis, there has been only one buyer of stock: the companies themselves, who have engaged in the greatest debt-funded buyback spree in history.

"Bigger Systemic Risk" Now Than 2008 - Bank of England

"Bigger Systemic Risk" Now Than 2008 - Bank of England

- Bank of England warn that "bigger systemic risk" now than in 2008
- BOE, Prudential Regulation Authority (PRA) concerns re financial system
- Banks accused of "balance sheet trickery" -undermining spirit of post-08 rules
- EU & UK corporate bond markets may be bigger source of instability than '08
- Credit card debt and car loan surge could cause another financial crisis
- PRA warn banks returning to similar practices to those that sparked 08 crisis
- 'Conscious that corporate memo ...

Frontrunning: July 17



Americans Feel Good About the Economy, Not So Good About Trump (BBG)

GOP Leaders Brace for CBO Estimate on Revised Health-Care Bill (BBG)

From $2 Billion to Zero: A Private-Equity Fund Goes Bust in the Oil Patch (WSJ)

Turkey Building Up Army Base in Qatar, Erdogan Adviser Says (BBG)

U.S. Companies Have a New 401(k) Fix: Spend More (WSJ)

Plastic-Versus-Cash Battle Heats Up After Visa, Mastercard Deals (BBG)

China's strong second-quarter GDP growth paves way for deeper reforms (Reuters)

China Just Made the Most Steel Ever as Trump Gets Set to Act (BBG)

Wanda Deals in Jeopardy as China Scrutiny Mounts (BBG)

Not so fast: U.S. restaurant workers seek ban on surprise scheduling (Reuters)

China's Economy Charges On as Officials Target the Risk 'Rhino' (

The Vanishing Reward for Buying High-Yield Bonds

A closer look at high-yield bonds shows the reward on offer isn't quite what it seems.

Buffett Could Be Costly Option for Sprint and SoftBank

Softbank's Masayoshi Son met with Warren Buffett to talk about an investment in Sprint—but that's not likely to come cheap.

China's Growth Is Still on Borrowed Time

The Chinese economy is performing better than expected—that gives regulators more time to crack down on leverage. Donald Trump or the Fed could upset the party, however.

July 2017 Empire State Manufacturing Index Declined

Written by Steven Hansen

The Empire State Manufacturing Survey declined but remains in positive territory. Important internals likewise declined.

Outside the Box: 7 real ways for millennials to save money (not by brownbagging and skipping Starbucks)

The real way to take control of your finances is by focusing on the big-ticket items in your life, says Ben Carlson.

Outside the Box: You're paying a high price for a 40-hour workweek and an iPhone

'Progress' in technology is making people less secure, writes Satyajit Das.

Outside the Box: China is playing a weak hand with the U.S.

Regional divides threaten China's social stability, writes George Friedman.

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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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