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20Jul2017 Market Close: Wall Street Closes Virtually Unchanged After Reaching New Historic Highs, WTI Crude Slips Again To The 46 Handle, US Dollar Index Settles At The Low 94 Level

Written by Gary

The SP 500 and the DOW were little changed in late afternoon session today and ended flat (SPY +0.02%). US markets were weighed by a drop . . .

Todays S&P 500 Chart

. . . in retailers and tepid earnings from some big names, while the tech-heavy Nasdaq edged higher.

Home Depot's biggest stock price plunge in 17 years shaves $7.5 billion off market cap

S&P 500 ends virtually unchanged

The Market in Perspective

Here are the headlines moving the markets.

U.S. says Exxon under Tillerson violated Russia sanctions in 2014

WASHINGTON/HOUSTON (Reuters) - The United States on Thursday admonished Exxon Mobil Corp for "reckless disregard" of U.S. sanctions in dealings with Russia in 2014 when Secretary of State Rex Tillerson was the global oil company's chief executive, and fined it $2 million.

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.

Snap under pressure as Wall Street eyes share lock-up expirations

SAN FRANCISCO (Reuters) - A potential flood of newly available Snap shares is weighing on Wall Street's already shaky support for the owner of the Snapchat social media app.

Corning vows new jobs as part of Trump's 'Made in America' week

NEW YORK (Reuters) - Corning Inc said at an event with U.S. President Donald Trump on Thursday that it plans to spend $500 million and create 1,000 jobs in the United States making a new kind of glass for vials and cartridges to hold injectable drugs.

Trump administration's NAFTA demands make sense: Union Pacific CEO

DETROIT (Reuters) - The list of priorities U.S. Trade Representative Robert Lighthizer released this week for the renegotiation of NAFTA with Mexico and Canada is reasonable and in line with what the Trump administration has promised to focus on, the head of America's largest railroad said on Thursday.

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.

EU examines emissions collusion by German car makers: Handelsblatt

BERLIN (Reuters) - The European Commission is examining whether German automakers colluded in systems they used to clean exhaust emissions as part of investigations triggered by the Volkswagen scandal, the Handelsblatt daily reported on Thursday.

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.

"Probably Nothing..."

Yesterday we warned of the growing anxiety in short-term Treasury-Bill markets over the looming debt-ceiling. Today, the tension has worsened with the 10/19 bill now up a shocking 13bps in 3 days leaving the curve extremely inverted around the potential debt-ceiling deadline.

As Bloomberg notes, short-term investors aren't waiting for Treasury Secretary Steven Mnuchin to inform Congress of the exact date the U.S. will run out of cash.

Traders are already willing to pay more for bills maturing after Oct. 19 to avoid being caught holding securities vulnerable to a technical default -- in line with Congressional Budget Office forecasts that predict the federal government will hit the debt ceiling around early- to mid-October.

Because of the anxiety surrounding the debt limit, bills maturing Oct. 19 are yielding 1.15 percent, versus 1.09 percent for securities due two weeks before or after.

Germany Blocks Defense Exports To Turkey In "Worst Crisis Since World War II"

The "worst crisis between Germany and Turkey since World War II" just took another turn worse, after German media reported that in the latest escalation to date between Berlin and Ankara, Chancellor Angela Merkel will freeze present and future Turkish orders of defense goods amid souring diplomatic relations between the two nations, Bild Zeitung said citing unidentified govt officials.

This effective trade embargo comes just hours after Germany's issued a safety warning to tourists traveling to Turkey and warned investors against doing business there. As discussed this morning, in unusually bold language Germany's foreign minister Sigmar Gabriel announced a "re-orientation" of German policy towards Turkey, saying Berlin would reconsider the economic aid and export credit guarantees it provides for the country.

"We can't go on as before," he said at a press conference. "We have to be clearer than before so the authorities in Ankara understand that their policies are not without consequences." As the FT adds, "the measures will have a tangible impact on a country that welcomes millions of German tourists every year and is one of Germany's closest trading partners. Germans make up 15% of the country's tourism arrivals and trade volumes between the countries stand at 37bn a year."

And, as relations between the two NATO members "slumped to their lower since World War II", Turkey's Foreign Minister Mevlut Cavusoglu responded saying his country wouldn't give in to what he said were German thre ...

How To Hedge Volatility With Gold... And Make Up To 92%

While some it as a yellow pebble, it seems Goldman Sachs recognizes other 'value' in gold suggesting that amid the chaotic complacency of markets, precious metal derivatives could provide an attractive broad multi-asset hedge.

Via Goldman Sachs,

Gold implied volatility is at the 0th percentile and implied volatility is close to 1-month realised. As a broad portfolio hedge for both equity drawdown and rate shock risk, straddles on Gold appear attractive.

The price of a 1-month straddle is close to all-time lows at 2.2% (the low since 2002 was 1.9%), and this is also the breakeven, i.e., how much Gold needs to move in the next month for a positive P&L.

A positive hold-to-expiry P&L has historically come nearly twice as often from a positive than from a negative move. On average, the payoff of a straddle is negative but from the current low price of a 1-month S&P 500 straddle, the average payoff for a hold-to-expiry trade was positive and the probability of a positive P&L was 60%.

Moreover, this is a c ...

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.

June 2017 Leading Economic Index: Maybe There Will Be A Moderate Improvement In Economic Growth

Written by Steven Hansen

The Conference Board Leading Economic Index (LEI) for the U.S again improved this month - and the authors state there will be "continued growth in the U.S. economy and perhaps even a moderate improvement in GDP growth in the second half of the year".

Deep Dive: Why you might want to avoid these 30 dividend stocks

Management CV gauges financial and management performance to anticipate which companies might cut their dividends.

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

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

The New York Post: Linkin Park singer Chester Bennington commits suicide

Linkin Park singer Chester Bennington committed suicide Thursday morning, the New York Post reports, citing TMZ.

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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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