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19Jul2017 Market Update: Wall Street Investors Say Yes To Tech Stocks And No To IBM, Lower Crude Inventories Push Oil Prices To The Low 47 Handle, US Dollar Steady, But Volatile

Written by Gary

US indexes, Nasdaq and the SP 500, were trading at new historical highs in late afternoon trading today (SPY +0.4%), powered by technology stocks, while gains on the Dow were capped by a sharp drop in shares of IBM.


Here is the current market situation from CNN Money

North and South American markets are mixed. The S&P 500 is higher by 0.39%, while the Bovespa is leading the IPC lower. They are down 0.51% and 0.26% respectively.

What Is Moving the Markets

Here are the headlines moving the markets.

Tech lifts Nasdaq, S&P to record; IBM weighs on Dow

(Reuters) - The Nasdaq and the S&P were trading at record levels in early afternoon on Wednesday, powered by technology stocks, while gains on the Dow were capped by a sharp drop in shares of IBM.

Exclusive: Three sides agree on seven rounds of NAFTA talks - sources

MEXICO CITY/OTTAWA (Reuters) - U.S., Mexican and Canadian trade officials plan to hold seven rounds of talks at three-week intervals in a bid to wrap up the renegotiation of the North American Free Trade Agreement (NAFTA) rapidly, Mexican sources familiar with the situation said.

Morgan Stanley claims another trading victory over rival Goldman Sachs

(Reuters) - Morgan Stanley beat Wall Street's profit expectations on Wednesday, reporting gains across most of its businesses and producing more trading revenue than rival Goldman Sachs Group Inc, a rare feat.

Murdochs warn UK a delay to Sky-Fox deal could hit inward investment

LONDON (Reuters) - James and Lachlan Murdoch urged the British government to let their company buy pay-TV group Sky , saying on Wednesday that further delays to the $15 billion deal could sour the climate for foreign investment in Britain after Brexit.

United Air shares slide on outlook for passenger unit revenue

NEW YORK (Reuters) - Shares of United Continental Holdings Inc fell more than 5 percent on Wednesday, a day after the airline forecast "disappointing" passenger unit revenue in the third quarter.

New York's DiNapoli asks Dimon to back off a proxy reform

BOSTON (Reuters) - JPMorgan Chase & Co CEO Jamie Dimon, who has faced tough shareholder resolutions, is being asked to save them.

Russia will struggle to turn on Siemens turbines in sanctions-bound Crimea

MOSCOW (Reuters) - Russia outfoxed European Union sanctions by delivering gas turbines made by Germany's Siemens to the annexed Ukrainian region of Crimea. Now for the hard part, switching them on.

German regulator to assess suitability of Deutsche Boerse management

FRANKFURT (Reuters) - A German regional exchange regulator will assess the suitability of Deutsche Boerse's management board after allegations of insider trading against the company's chief executive officer earlier this year.

Morgan Stanley chooses Frankfurt as EU hub post Brexit: source

FRANKFURT/LONDON (Reuters) - Morgan Stanley has chosen Frankfurt to be a new base for its European Union operations as Britain prepares to leave the bloc, according to a source familiar with the matter, becoming the latest U.S. bank to pick the German city.

The Over-Quantification Of Life

Authored by Charles Hugh Smith via OfTwoMinds blog,

The idea that all endeavors can be distilled down to statistics has put us in the Over-Quantification Box.

Correspondent Chad D. recently submitted a thought-provoking commentary on the Over-Quantification of Life:

"I think you could constructively explore the over-QUANTIFICATION of the US. Or we could call it the Wal-Martization of the US. The only that that counts is a number (i.e. price, sales, clients, patients, tickets, arrests, convictions, fines, sex partners, scores, averages, etc.).

What is missing is quality. I think you've mentioned something similar before talking about junk products with a short lifespan, but this way of doing things pervades our society.

I would argue that in nearly every area of society, quantity rather than quality rules the day. In the Criminal Justice system, officers and their immediate supervisors are evaluated based on how many tickets/arrests are made and/or how many complaints are answered. Prosecutors are judged by how many defendants go to jail. Judges are judged by how many cases they clear and how many cases are on their docket. Prisons want more prisoners. Legislators are rated on how many laws they passed. I remember Ron Paul was castigated for not passing many if any laws while in office.

I could go on with banking, investing, medicine, education, sports, farming, etc. Quality has been left in the dust by the system. The quality that remains is due to the good people who are still in the system. I don't know what really drives this phenomena, but I would say that usury is part of it. Usury demands that ...

One Bank's Surprising Finding: "It's Not Complacency But Paralysis"

Complacent: Contented to a fault; self-satisfied - The American Heritage Dictionary

Three weeks after the volatility-obsessed Deutsche Bank derivatives expert Aleksandar Kocic went so far as to not only qualify what he said was pervasive market complacency, but to also quantify it, and observe the exact moment when the market stopped caring and reacting to macro developments, some time in 2012...

... Canaccord Genuity's Brian Reynolds is out with a new report that takes conventional wisdom about prevailing market sentiment and flips it on its head.

In "does low volatility mean that investors are complacent" the Canaccord analyst writes that it has become common wisdom that the current low level of volatility as measured by the VIX is an indication investors are "complacent," and that the complacency is a potential negative for financial markets. Making his case known up frong, Reynolds promptly notes that he "completely disagrees with this notion."

In the last month, Bloomberg has published over a dozen stories quoting noted investors about their worries over complacency. These worries have spread to policymakers. Three weeks ago, the president of the San Francisco Fed said he was "somewhat concerned about the complacency in the market...there seems to be a priced-to-perfection attitude out there..." and "the stock market is very much running on fumes." That same day, the vice chair of the Fed said, "We know that complacency must be ...

How Trump Is "Putting The Valuation Bubble In Equities At Risk"

Authored by Komal Sri-Kumar via Bloomberg.com,

Donald Trump's appeal last November was linked to two factors. Both are now putting the valuation bubble in equities at risk.

The first factor was his emphasis on stimulus -- tax reform, infrastructure spending and fewer regulations -- that has pushed markets to higher and higher levels. The new administration was targeting at least 3 percent annual growth in real gross domestic product, well in excess of levels that the U.S. economy has experienced since the financial crisis.

Investors reasoned that properly directed fiscal spending would create employment and cause consumer demand to increase, while the reforms would validate a rise in market measures of valuation -- lower corporate taxes would be like valuing a company at 17 times earnings rather than 20 times, for example. Expectation of fewer regulations was a major factor in the increase in bank share prices.

The second component of the Trump campaign presented the U.S. trade deficit as a sign that the country was being treated unfairly by its trading partners. The remedy was to impose higher tariffs on imports, with China and Mexico mentioned as specific targets.

Fear that the trade restrictions the candidate threatened during the campaign would dominate the incipient administration was the reason U.S. equity futures plunged during the hours immediately after the election results were known. Retaliation by trading partners to new tariffs would have slowed global economic growth and demand, resulting in a headwind for equities.

In the first months of the Trump adm ...

The Inside Story Of How The Saudi King's Son Plotted To Oust His Rival

Less than a month after the Saudi king stunned the world when on the morning of June 21 he unexpectedly announced a "historic shakeup" in which he removed the existing successor to the royal line, his nephew Mohammed bin Nayef - the country's counterterrorism czar - and instated his eldest son, the 31-year-old Mohammed bin Salman and de facto "OPEC's most important man" as Saudi Arabia's crown prince, and following a surprising report ten days later that the "deposed" Mohammed bin Nayef has been barred from leaving the kingdom and confined to his palace in the coastal city of Jidda, the full story of what really happened in this transition of power has finally emerged.

As a reminder, the conventional timeline of this dramatic power transition focused on how "seamless" it was and unopposed:

In response to questions from The Times, a written statement by a senior Saudi official denied that Mohammed bin Nayef had been pressured and said that the Allegiance Council, a body of senior princes, had approved the change in "the best interest of the nation."

The statement said Mohammed bin Nayef was the first to pledge allegiance to the new crown prince and had insisted that the moment be filmed and broadcast. The former crown prince receives guests daily in his palace in Jidda and has visited the king and the crown prince more than once, the statement said.

As it turns out, nothing could be further from the truth of what really happened: as the NYT details, contrary to the widely-accepted narrative it was Mohammed bin Salman, or MBS as he is also cal ...

Morgan Stanley Is the Winner This Earnings Season

Morgan Stanley is on a roll. The investment bank's trading business put competitors in the shade in the second quarter even as its stodgy wealth management division has become a source of growth.

The Last Market Still Betting on Trump

Bonds, the dollar and some stock sectors have given up, but the overall stock market is still hoping for tax cuts and stimulus spending.

Vertex Shares Haven't Hit Their Apex

The ferocious rally in Vertex Pharmaceuticals shares on results in early stage data for its new cystic fibrosis treatment will surely tempt some investors to exit. That may not be wise, though, as the rally is likely to continue.

The Tell: Bitcoin may have reached a tipping point, if 'Downtown' Josh Brown just invested

When prominent financial blogger 'Downtown' Josh Brown announces that he is making his entree into the realm of digital currencies, it may be worth taking notice.

So much for the 'Trump slump' — visitors to the U.S. are up in 2017

Experts anticipated a drop in travel, but the U.S. Department of Commerce says otherwise.

Deep Dive: Attention, shoppers: 'Amazon effect' is creating bargain stocks

Jefferies analysts say investors are discounting some consumer stocks too much.

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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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