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20Jul2017 Market Update: Wall Street Trading Near Session Highs, DOW Is In The Red Near The Unchanged Line

Written by Gary

US market indexes have taken the Trump Train on a roller coaster ride from the opening bell confusing investors World wide (SPY +0.1%). Late afternoon trading has the markets . . .


Here is the current market situation from CNN Money

North and South American markets are mixed today. The IPC is up 0.27% while the S&P 500 gains 0.09%. The Bovespa is off 0.10%.

. . . trading mostly sideways near their session highs, except for the DOW that remains in the red.

What Is Moving the Markets

Here are the headlines moving the markets.

S&P, Dow flat as retailers weigh; Nasdaq edges higher

(Reuters) - The S&P and the Dow traded little changed in early afternoon session on Thursday, weighed by a drop in retailers and tepid earnings from some big names, while the tech-heavy Nasdaq edged higher.

U.S. fines Exxon Mobil over Russia sanctions violations

WASHINGTON (Reuters) - The U.S. Treasury Department on Thursday said it was fining global oil company Exxon Mobil Corp $2 million for violating sanctions on Russia in May 2014.

Bill Gross warns of recession risk if highly levered economies hike rates

NEW YORK (Reuters) - Highly levered domestic and global economies including the United States, which have "feasted" on easy monetary policies in recent years, cannot withstand a normalizing of short-term interest rates without running the risk of a recession, influential bond investor Bill Gross of Janus Henderson Investors warned on Thursday.

Murdoch made to wait few more weeks for Britain's Fox-Sky decision

LONDON (Reuters) - Rupert Murdoch will have to wait a few more weeks to know whether Twenty-First Century Fox's bid for Sky will be referred for a lengthy British investigation.

UAW chief: U.S. Nissan workers would vote for union right now

DETROIT (Reuters) - The president of the United Auto Workers said on Thursday he feels "very strongly" that workers at Nissan Motor Co Ltd's plant in Canton, Mississippi, would support union representation if they voted now, but added that reports of intimidation by the automaker could change that. "A campaign can change from day to day and this will depend on employees at the plant," UAW President Dennis Williams said at a news conference in Detroit.

Citigroup, Deutsche Bank beef up Frankfurt presence in Brexit response

LONDON/FRANKFURT (Reuters) - Two global banks, Citigroup and Deutsche Bank , are beefing up their presence in Frankfurt to deal with the impact of Britain leaving the European Union.

Exclusive: U.S. Cardinal Health puts $1.5 billion China business on block - sources

HONG KONG (Reuters) - U.S. drug distributor Cardinal Health has put its China business up for sale, drawing keen interest from state-backed Chinese pharmaceutical firms in a deal that may be worth up to $1.5 billion, sources familiar with the matter said.

Bombardier wins dismissal of Comerica aircraft payments lawsuit

NEW YORK (Reuters) - Bombardier Inc has won the dismissal of a U.S. lawsuit in which Comerica Inc sought millions of dollars after the Canadian aircraft maker was unable to find buyers for four planes whose leases had expired.

Sears to sell Kenmore appliances on Amazon; shares jump

(Reuters) - Sears Holdings Corp's shares soared 20 percent after the struggling retailer said it would sell its Kenmore home appliances on Amazon.com and integrate the brand's smart gadgets with the online giant's Alexa digital assistant.

Crazy Fed Cartoons From 1912 Versus Today

Authored by Mike Shedlock via MishTalk.com,

Inquiring minds may be wondering what economic cartoons from 1912 looked like. I can help.

It seems silly now, but in 1912 some nuts thought the Fed would become an all-powerful Wall Street/Bank/Gov't cartel. pic.twitter.com/rFjCf4KElx

— Rudolf E. Havenstein (@RudyHavenstein) February 22, 2014

It's almost spooky how these cartoons are as fitting today as they were in 1912. pic.twitter.com/JYczWQWDa9

— Rudolf E. Havenstein (@RudyHavenstein) April 12, 2016

Flash Forward to Today

People's QE is the same transfer of wealth from the middle class to government as any QE. https://t.co/Pqco0QYbpH pic.twitter.com/FxEOMuW7o2

— Daniel Lacalle (@dlacalle_IA) July 2, 2017

Cartoon of the Day: All Th ...

Treasury Volatility Crashes To Record Lows

Another day, another record low for volatility gauges, with Bank of America's MOVE Index (considered Treasury Market 'VIX') falling to an unprecedented 48.26.

As Bloomberg notes, the slide back down in volatility comes as the Treasury term premium looks to be failing in its latest attempt to climb back above zero.

So investors in the world's biggest bond market don't want to pay for protection against price swings and they don't care about getting paid for time risk -- that can only add to concerns expressed by commentators including the Federal Reserve that markets are dangerously complacent.

Why Wage Growth Will Remain Elusive

Authored by Lance Roberts of Real Investment Advice,

Just recently, Bloomberg ran a fascinating article discussing a new study from the McKinsey Institute.

"American manufacturing could be poised to rebound as technological disruption shakes up global production chains, but that will offer little relief to displaced factory workers, according to new research by the McKinsey Global Institute.

Now, McKinsey sees conditions changing in a way that could favor U.S. producers: automation is weakening the case for labor arbitrage as wages rise in emerging market economies and developing market residents are coalescing into a new consumer class, among other factors.

While the U.S. could seize on those manufacturing growth opportunities, especially if the government and companies invest to make production more competitive, there are catches. Importantly, production might bounce back without bringing a lot of jobs in tow.

'Even if we rebuild factories here and you build plants here, they're just not going to employ thousands of people — that just doesn't happen,' said report co-author and McKinsey Global Institute Director James Manyika. 'Find a factory anywhere in the world built in the last 5 years — not many people work there.'"

McKinsey is absolutely correct. While the President recently started a discussion on "Buy American," most of the root belief in the efficacy of tax cuts, tax reform, and nationalism is rooted in the history of "Re ...

CBO Says McConnell Healthcare Bill Would Slash Deficits By $420 Billion, Leave 15 Million Uninsured

Another day, another CBO score for another version of the GOP's healthcare bill. This time, the agency estimates that McConnell's "Better Care Reconciliation Act" legislation would lower the federal budget deficit by $420 billion over the next 10 years by reducing spending for Medicaid and subsidies for nongroup health insurance.

As The CBO notes, those effects would be partially offset by the effects of provisions not directly related to health insurance coverage (mainly reductions in taxes), the repeal of penalties on employers that do not offer insurance and on people who do not purchase insurance, and spending to reduce premiums and for other purposes.

Compared with the June 26 cost estimate for a previous version of the legislation, this cost estimate shows savings over the next 10 years that are larger - as well as estimated effects on health insurance coverage and on premiums for health insurance that are similar. The current version of the legislation would result in greater deficit reduction mostly because it would retain certain taxes that the previous version of the legislation would have eliminated. The description of the legislation and of CBO and JCT's methodology and results that appeared in the agencies' previous estimate largely applies to this one as well.

Effects on the Federal Budget

CBO and JCT estimate that enacting this legislation would reduce federal deficits by $420 billion over the 2017-2026 period (see figure below). That reduction is the net result of a $903 billion decrease in direct spending partly offset by a $483 billion decrease in revenues.

How Quants Calm the Stock Market

One factor helping to keep the VIX and realized volatility extremely low is quant funds that are discovering surprises before they can create big stock-market moves.

Strong Euro Can't Wait as Mario Draghi Plays for Time

The European Central Bank is playing for time on extreme monetary policy. But markets know a decision on winding down its bond-purchase program can't be put off forever.

The Saga Isn't Over for Dalian Wanda

Dalian Wanda Group may hope a last-minute tweak to a deal to sell nearly $10 billion of hotel and amusement park assets can solve some its near-term problems. Yet Beijing may still not be applauding.

The dark side of cruises: Since 2000, nearly 300 people have gone overboard

How and why people go missing from cruise ships and ferries is an issue of intense debate.

Market Extra: Oil tycoon T. Boone Pickens says he is wrestling with failing health, mortality after strokes

Prominent oil investor T. Boone Pickens says that he is struggling with failing health after a series of strokes during Christmas that briefly hampered his speech.

The Sniff Test: YogaWorks IPO pulled on valuation concerns, not market conditions

YogaWorks Inc. said Thursday that it was postponing its IPO citing "market conditions" through a spokesperson, but it's not the market that is holding it back.

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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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