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18Jul2017 Pre-Market Commentary: Wall Street Is Mostly Lower, Pulled Down By Another Setback To U.S. President Trump's Agenda, US Dollar Weaker Yet, WTI Crude Flies To The High 46 Handle

Written by Gary

US stock market index futures point to a negative, but flat opening this morning (SPY -0.03%). The dollar index touched . . .


Here is the current market situation from CNN Money

. . . its lowest since September at 94.50 in overnight trade. It was last at 94.41 at 8:45 am est, down 0.4%. Asian shares stepped back from more than two-year highs, with Japanese stocks falling in reaction to a stronger yen, while Chinese stocks stabilized after Monday's slump.

Netflix Inc.'s earnings-driven leap was offset by drops for Harley-Davidson Inc. and Bank of America Corp. following their results.

But Harley-Davidson HOG, -9.87% fell 9% before the open for the S&P's biggest premarket loss, as the motorcycle maker's better-than-expected earnings for the second quarter were overshadowed by lowered guidance for Bank of America BAC, -0.58% gave up 0.7% premarket as the banking giant's profit and revenue topped Wall Street's estimates, but trading slumped.

Today's Markets

In Asia, Japan -0.6%. Hong Kong +0.2%. China +0.3%. India -1.1%.
In Europe, at midday, London -0.1%. Paris -0.6%. Frankfurt -0.8%.
Futures at 6:20, Dow +0.1%. S&P flat. Nasdaq flat. Crude +0.8% to $46.38. Gold +0.3% to $1237.20.
Ten-year Treasury Yield flat at 2.3%

Today's Economic Calendar

8:30 Import/Export Prices
8:55 Redbook Chain Store Sales
10:00 NAHB Housing Market Index
4:00 PM Treasury International Capital

Companies reporting earnings today »

Wednesday -- Morgan Stanley (MS), American Express (AXP), T-Mobile US (TMUS) earnings
Thursday -- Microsoft (MSFT, Tech30), eBay (EBAY) and Visa (V) earnings; Carrier layoffs begin; European Central Bank and Bank of Japan announce policy decisions
Friday -- General Electric (GE) and Honeywell (HON) earnings

What Is Moving the Markets

Here are the headlines moving the markets.

U.S. stock futures flat as investors gauge big companies' earnings

(Reuters) - U.S. stock index futures were little changed on Tuesday as investors waited for earnings from big U.S. companies to set the tone for the markets.

Bank of America beats estimates as higher rates boost revenue

(Reuters) - Bank of America Corp, the second-largest U.S. lender by assets, reported a higher-than-expected quarterly profit on Tuesday as revenue rose in three of its main businesses, more than offsetting a fall in trading.

Goldman's bond trading revenue slumps 40 percent

(Reuters) - Goldman Sachs Group Inc reported a 40 percent slump in bond trading revenue, mirroring a broader weakness in trading activity that has plagued big U.S. banks in the latest quarter.

Fed to announce balance sheet unwind in September, hike rates in fourth quarter: Reuters poll

BENGALURU (Reuters) - The U.S. Federal Reserve will announce plans to shrink its more than $4 trillion balance sheet in September, according to a Reuters poll of economists who also said the central bank will wait until the fourth quarter before raising rates again.

Lockheed Martin beats profit estimates, raises FY forecasts

(Reuters) - Lockheed Martin Corp , the Pentagon's No. 1 weapons supplier, reported a better-than-expected quarterly profit, helped by higher sales in its aeronautics division that makes fighter jets.

Netflix wins international Crown with original shows

(Reuters) - Twenty years after Reed Hastings co-founded Netflix Inc, and a decade after the company introduced video streaming, it hit another milestone - one that is key to its ability to sustain its scorching pace of growth.

U.S. makes lower trade deficit top priority in NAFTA talks

WASHINGTON (Reuters) - The United States on Monday launched the first salvo in the renegotiation of the 23-year-old North American Free Trade Agreement (NAFTA), saying its top priority for the talks was shrinking the U.S. trade deficit with Canada and Mexico.

Johnson & Johnson lifts 2017 profit forecast; second-quarter earnings beat Street

(Reuters) - Johnson & Johnson on Tuesday raised its full-year profit forecast and reported better-than-expected quarterly earnings, helped by strong demand for its newer products.

U.S. hotels bank on loyalty programs in push for direct booking

(Reuters) - Hotel loyalty programs have helped U.S. chains such as Hyatt, Hilton and Marriott score more bookings on their own websites, luring customers from online travel agents that had seen commissions balloon to an estimated $3.5 billion a year.

Why 2017 Is Like 1969

Authored by Charles Hugh Smith via OfTwoMinds,

1969-2017: and here we are again, in so many ways.

A deeply polarizing new president, a disastrously misguided official narrative that the political Establishment doggedly supports despite a damning lack of evidence, and an economy teetering on the edge of recession--and worse.

Sound familiar? Welcome to 1969 redux. The similarities between the crises unfolding in 1969 and the present-day crises are not just skin-deep--they're systemic.

Consider the basic parallels.

1. Nixon was if anything more polarizing than Trump. If there was any politician Democrats loved to hate, it was Nixon. Yet Nixon won a close race against an Establishment Democrat, at least partly because he ran as a "peace candidate" and because he spoke to the Silent Majority who disagreed with the nation's direction. The Silent Majority was mocked and ridiculed by the mainstream media as racist, close-minded deplorables.

2. The Democratic Party had become the Establishment bastion of war-mongering. The Democratic White House had been obscuring its devastating strategic and tactical miscalculations behind a slick PR campaign and a pervasive and often illegal program of suppressing dissenters and whistleblowers.

3. At the behest of the Establishment, an immense propaganda machinery had been running full-tilt to paper over foreign-policy failures and tragedies (including but not limited to the Vietnam War). In 2017, this immense propaganda machine is focused on discrediting the Trump presidency by unearthing or fabricating evidence of collusion with our default Bad Guy, Russia.

4. The political Establishment had decided to tamp down discontent with the Vietnam War by borrowing vast sums to pay for both ...

Goldman FICC Revenue Plunges 40%, Worst Since 2015, Blames "Low Client Activity"

While Goldman's overall results reported moments were generally solid, with the bank reporting Q2 revenue of $7.89 billion (exp. $7.52 billion) and net earnings of $1.83 billion, or EPS of $3.95, above the $3.39 expected, compared with $3.72 for Q2 of 2016 and $5.15 in Q1 2017, there was just one number everyone was focused on: the bank's most profitable segment, its FICC revenue, which however was painfully disappointing, at just $1.159 billion, down 40% Y/Y and roundly missing expectations of $1.47 billion, the bank's worst performance in this segment going back to Q4 2015. Also, despite the top-line beat, overall Goldman revenues were the lowest going back to Q1 2016.

Breaking down the key revenue segments:

2Q trading rev. $3.05 billion, est. $3.13 billion

2Q FICC sales & trading revenue $1.16 billion, est. $1.47 billion

2Q equities sales & trading revenue $1.89 billion, est. $1.71 billion


2Q investment banking revenue $1.73 billion, est. $1.59 billion

And visually:

Discussing the disappointing performance, Goldman said: "net revenues in Fixed Income, Currency and Commodities Client Execution were $1.16 billion for the second quarter of 2017, 40% lower than the second quarter of 2016, due to significantly lower net revenues in interest rate products, commodities, credit products and currencies, partially offset by higher net revenues in mortgages. During the quarter, Fixed Income, Currency and Commodities Client Execution operated in a challenging environment characterized by low levels of volatility, low c ...

McConnell Abandons 'Replace' Plan, Calls For ObamaCare 'Repeal & Delay' Vote; Trump Tweets "We Will Return!"

President Trump just tweeted who he sees as responsible for the failure...

We were let down by all of the Democrats and a few Republicans. Most Republicans were loyal, terrific & worked really hard. We will return!

— Donald J. Trump (@realDonaldTrump) July 18, 2017

As I have always said, let ObamaCare fail and then come together and do a great healthcare plan. Stay tuned!

— Donald J. Trump (@realDonaldTrump) July 18, 2017

* * *

As we detailed earlier, with the tweeted support of President Trump - "Republicans should just REPEAL failing ObamaCare now" - Senate Majority Leader Mitch McConnell has called for a vote to repeal Obamacare with a two-year delay.

After two more Republican senators announced their opposition to the Republican health care bill on Monday night, leaving the party leadership short of the required votes to move the legislation forward, President Trump expressed his view clearly...

Republicans should just REPEAL failing ObamaCare now & work on a new Healthcare Plan that will start from a clean slate. Dems will join in!

— Donald J. Trump (@realDonaldTrump) July 18, 2017

Despite having said before this was not his preferred path.And as ABC reports, Senate Majority Leader Mitch McConnell has ...

Silver Analysts Forecast $20 In Bloomberg Silver Price Survey

Silver Analysts Forecast $20 In Bloomberg Silver Price Survey

- Bloomberg silver price survey - Large majority bullish on silver
- Silver median "12 month-forecast" of $20
- Precious metal analysts see silver "24 percent rally from current levels"
- Investors are pouring money into silver ETFs
- Speculative funds bearish even as ETF assets rise to record
- Spec funds being bearish is bullish as frequently signals bottom
- Important to focus not just on silver price but on silver value
- "Important to note that all portfolios under all conditions actually perform better with exposure to gold and silver" - David Morgan (see video)

Gameday for Disney to Boost ESPN Growth

Disney's upcoming round of contract negotiations with pay-TV companies could help improve the outlook for ESPN and revive the media company's stock.

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.

Who Gets Hit Next in China's Financial Crackdown?

At hand is an ever-growing asset management industry and the deepening nexus of banks, brokers, trusts and insurance companies.

Mark Hulbert: The shockingly subdued 'fear index' doesn't mean what you think it means

Contrarians are wrong about what this VIX level means for the stock market's future returns, says Mark Hulbert.

Metals Stocks: Gold aims for 3rd straight gain as dollar slips to September lows

Gold prices on Tuesday is on track for its third straight gain as a weakening U.S. dollar offers a path higher for the yellow metal.

The Wall Street Journal: Judge rules Google to turn over smaller set of gender-pay data

A judge has ruled against the Labor Department request for 19 years of pay data from Google, part of an investigation into whether the internet company has been underpaying women.

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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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