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19Jul2017 Market Close: Wall Street Nasdaq And The SP 500 Closed At Their New Historic Highs, WTI Crude Settles Higher At The Low 47 Handle, The Trump Bull Train Rumbles On, But On Anemic Volume

Written by Gary

The major stock market indexes closed at or near new historical highs (SPY +0.5%) as investors are betting for Trump tax cuts and stimulus spending. Crude prices settled . . .

Todays S&P 500 Chart

. . . near session highs. Oil extended its gains after data shows big drop in U.S. crude, gas stockpile.

The U.S. West Texas Intermediate crude August contract was at $47.16 a barrel by 10:35AM ET (1435GMT), up 76 cents, or around 1.6%. Prices were at around $46.66 prior to the release of the inventory data.

The Market in Perspective

Here are the headlines moving the markets.

S&P, Nasdaq at records as Vertex rallies; IBM slips

NEW YORK (Reuters) - The Nasdaq Composite and the S&P 500 hit record highs on Wednesday, powered by technology stocks and a more than 20 percent jump in Vertex Pharmaceuticals, while gains on the Dow were capped by a sharp drop in IBM shares.

Exclusive: U.S., Canada, Mexico agree on fast-paced NAFTA talks - sources

MEXICO CITY/OTTAWA (Reuters) - U.S., Mexican and Canadian officials have agreed to an aggressive timetable to renegotiate the North American Free Trade Agreement (NAFTA), sources said, aiming to conclude early next year to avoid Mexico's 2018 presidential elections.

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.

GM cleared in first case over updated ignition switch

NEW YORK (Reuters) - A federal jury in New York on Wednesday found General Motors was not to blame for a crash of an Arizona man who alleged that his accident was caused by an updated version of the carmaker's ignition switch that did not adequately fix the flaws of a previous model.

U.S. judge allows VW bondholder suit to continue

WASHINGTON (Reuters) - A federal judge in California on Wednesday allowed some claims to proceed by bondholders who sued Volkswagen AG over its diesel emissions scandal, but agreed to the German automaker's request to dismiss parts of the lawsuit.

NAFTA exit, border tax would raise U.S. carmakers' costs: study

DETROIT (Reuters) - A U.S. exit from NAFTA or implementation of a border tax would result in many billions of dollars in additional costs for automakers and their suppliers and add hundreds of dollars to each car's production costs, according to a study released on Wednesday.

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.

"The Most Dangerous Moment": Why Every Bank Is Suddenly Talking About Q3 2018

By now everyone is probably familiar with one of the scariest financial charts created recently by Bank of America: it shows that not only have central banks injected a record $15.1 trillion in liquidity since the crisis, but in 2017 alone - a time when the global economy is supposedly improving - they added a record $1.5 trillion, or as BofA's Michael Hartnett calculated, $3.1 trillion annualized.

Or maybe not: in a little noticed comment from Hartnett made later in June, Hartnett observed that "central banks in aggregate still printing: bought $350bn in April, $300bn in May, <$100bn in June...big 5 central banks buying less but not yet selling."

And while the ECB quietly tapered from 80 to 60BN last December (even though Mario Draghi went to great lengths to described the tapering as a non-event) and is expected to announce a formal tapering again, most likely during Jackson Hole , nowhere is this quiet slowdown in central bank purchases more evident than in the balance sheet of the BOJ, whose average purchases have declined sharply in recent months from a JPY80trillion average to a far lower level:

Indeed, it is safe to say that the topic of the liquidity injection by central banks, or rather its removal, has become one of the most discussed topics within the financial commun ...

El-Erian Exposes The Good, The Bad, & The Ugly Of Trumponomics

Authored by Mohamed El-Erian via The Financial Times,

As we near the six-month mark of Donald Trump's presidency, the US economy continues to create lots of jobs but is yet to unleash its full economic potential. It is an evolving economic record that points to the opportunities and challenges facing the administration.

The good: growth focus

President Trump's economic narrative has focused the debate on the importance of increasing economic growth to 3-4 per cent annually, and of ensuring that the benefits accrue to many more segments of the population. To this end, the administration has identified three economic pro-growth policy priorities: tax reform, deregulation, and infrastructure.

Also consistent with the growth objective, Mr Trump has stepped back from the protectionist threats advanced during the election campaign. There has been no dismantling of the Nafta trade agreement, no crippling tariffs on China and no cancellation of bilateral trade agreements.

As a consequence, measures of household and corporate sentiment, including consumer confidence, have surged concurrent with the multiyear improvement in balance sheets. A Bloomberg national poll published this week shows that 58 per cent of American surveyed feel they are getting closer to meeting their "career and financial aspirations", a level that this poll started in February 2013 has registered just once before.

Yet all this remains to be reflected in "hard" data and Mr Trump's ambitious growth objectives remain elusive. The less positive aspects of the record explain why.

Pentagon Furious After Turkey Leaks U.S. Base Locations In Syria: "Hard Not To See This As A F-You"

So much for NATO-alliance members working for the common good.

In a move that has angered the U.S. for obvious reason, Turkey's state-run news agency Anadolu Agency has leaked the precise locations of U.S. bases in northern Syria. The move - which exposes the exact locations of American soldiers on the front lines in the war-torn nation - has sent the ongoing feud between the two NATO allies to new lows. As Bloomberg details, in reports published in both Turkish and English on Tuesday, Anadolu provided detailed information about 10 U.S. bases in northern Syria, including troop counts and a map of the U.S. force presence in the Turkish version.

#AA'n?n 'PKK/PYD'ye ABD deste?i' haberi uluslararas? bas?nda yank? uyand?rd? https://t.co/8IJbm9w16D pic.twitter.com/svt4u9v5CD

— ANADOLU AJANSI (@anadoluajansi) July 19, 2017

Without citing specific sources, the state-run news agency unveiled the ten US outposts located in areas controlled by "terrorist" Kurdish militias in the provinces of Aleppo, Hasakah and Raqqa. The reports said that the military outposts are "usually hidden for security reasons, making it hard to be detected." It said they were located "in the terrorist PKK/PYD-held Syrian territories," a reference to Kurdish groups that Turkey's government considers terrorist organizations.

While locations of two of the bases, in Rmeilan district (in Hasakah province) and Harab Isk village (near Kobani, in Aleppo province), had already been widely publicized, the ot ...

WSJ Stunned By "Lack Of Market Dips To Buy"

Having previously reflected on how "easy" this market has been in 2017, it appears The WSJ has finally noticed something is different this time, pointing out that major indexes haven't gone a calendar year without a pullback of at least 5% in at least 30 years.

We noted previously that there hasn't been a single instance when the U.S. equity benchmark pulled back 5 percent from its highs in 2017. The last time the market slumped at least that much was in the aftermath of the June 2016 Brexit vote -- marking a 267-day streak that's the longest since 1996, according to data compiled by Bloomberg. The last time equity markets went this deep into a year without all three of those benchmark indexes suffering at least 5% pullbacks was nearly a quarter-century ago, in 1993.

Furthermore, we pointed out that this year's 2.8% drawdown (for now), continues a 6 year streak of drawdowns that are dramatically below the longer-term average of 14.1% drops intra-year.

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.

Trump Today: Trump Today: President says senators shouldn't take summer break without finishing health bill

President Donald Trump turned up pressure on senators on Wednesday to cancel their summer recess so they can repeal and replace Obamacare, and kicked off the first public meeting of his advisory commission on election integrity by saying voter fraud "undermines democracy."

Capitol Report: Trump's HHS: Non-compliant insurance plans would come with $12,000 deductibles

A draft of a report from the Trump administration shows the Senate bill that would've created low-cost insurance plans estimates that deductibles would run as high as $12,000.

More Americans are renters now than at any time in the last 50 years

There haven't been this many households renting since 1965.

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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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