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25Jul2017 Market Commentary: New Record For The SP500, Nasdaq Down, Fed's To Likely To Leave Interest Rates On Hold, WTI Crude Moves Higher Into The Mid 47 Handle

Written by Gary

US stock markets gaped up at the opening with the SP 500 recording a new record high (SPY +0.2%). A set of strong earnings ...

Here is the current market situation from CNN Money

European markets are higher today with shares in France leading the region. The CAC 40 is up 0.94% while London's FTSE 100 is up 0.94% and Germany's DAX is up 0.57%.

... from companies, including Caterpillar and McDonald's, lifted the large caps, but the tech-heavy Nasdaq was dragged lower by losses in Google parent Alphabet Inc.

The Federal Reserve is widely expected to leave policy on hold at the end of its two-day meeting on Wednesday.

The focus is expected to be on any further clues on the Fed's plans to trim its holdings of bonds in the statement it issues after the meeting.

U.S. inflationary pressure remains subdued despite the economy being at or close to full employment.

In her testimony to Congress earlier this month, Fed Chair Janet Yellen appeared to link the timing of further tightening to progress on the inflation front.

What Is Moving the Markets

Here are the headlines moving the markets.

McDonald's, Caterpillar power S&P to record

(Reuters) - A set of strong earnings from companies, including Caterpillar and McDonald's, lifted the Dow and drove the S&P 500 to a record high, but the tech-heavy Nasdaq was dragged lower by losses in Google parent Alphabet Inc.

Michael Kors to buy luxury shoemaker Jimmy Choo for $1.2 billion

LONDON (Reuters) - U.S. retailer Michael Kors has agreed to buy luxury shoemaker Jimmy Choo for $1.2 billion, snapping up a British company whose towering stilettos have been made famous by celebrity customers from Princess Diana to Kendall Jenner.

Caterpillar bulldozes expectations, raises 2017 forecast again

(Reuters) - Caterpillar Inc's results smashed expectations and the company raised its full-year forecast for the second time, underscoring strength across its businesses and a steady recovery in demand from China.

Investors unhappy as Alphabet shells out more to drive traffic

(Reuters) - There are very few things that make Alphabet Inc's investors unhappy. A rising TAC - the cost of driving traffic to its site - is one of them.

Toshiba board to meet Wednesday, weigh offers for chip unit: source

TOKYO (Reuters) - Toshiba Corp's board is set to meet on Wednesday to weigh three offers for its chip unit, including bids from Western Digital and Taiwan's Foxconn in addition to one by a consortium which was previously a clear favorite, a source familiar with the matter said.

U.S. home prices for May rise slower than expected

NEW YORK (Reuters) - U.S. single-family home prices accelerated at a slower pace in April, falling short of forecasts, a survey showed on Tuesday.

Elliott says Akzo Nobel 'flouting' basic shareholder rights

LONDON (Reuters) - Hedge fund Elliott Advisors on Tuesday criticized Akzo Nobel for dismissing its request yesterday for shareholders to add items to the agenda of a Sept. 8 extraordinary general meeting.

GM profit beats expectations, promises to cut high inventory

DETROIT (Reuters) - General Motors Co on Tuesday reported a better-than-expected quarterly net profit, helped by cost cuts, and promised to cut production in the second half to curtail its burgeoning U.S. inventory of unsold vehicles.

Norwegian Air under pressure to boost finances

OSLO/LONDON (Reuters) - Norwegian Air , the fast-growing budget airline trying to crack the transatlantic market by undercutting established rivals, faces mounting pressure to control costs and shore up its balance sheet to weather fierce competition.

Paid To Wait... "I Bought It For The Dividend"

Authored by Lance Roberts via,

Okay, I have to discuss something this week that has been bugging me. I have had several emails as of late suggesting one of the biggest investing fallacies stated during late stage bull market advances.

"I don't care about the price, I bought it for the yield."

First of all, let's clear up something.

Company ABC is priced at $20/share and pays $1/share in a dividend each year. The dividend yield is 5% which is calculated by dividing the $1 cash dividend into the price of the underlying stock.

Here is the important point. You do NOT receive a "yield."

What you DO receive is the $1/share in cash paid out each year.

Yield is simply a mathematical calculation.

The distinction will become important in just a moment. But first, I need to touch on one of the primary issues currently being ignored by the markets which is the inherent risk of mean reversions.

Mean reversions are one of the most powerful forces in the financial markets as, like gravity, moving averages provide the gravitational forces around which prices oscillate. The chart below shows the long-term view of the S&P 500 as related to its long-term 6-year moving average.

Conference Board Consumer Confidence Soars To 2nd Highest Since 2000

Second only to March's highs, The Conference Board's Consumer Confidence printed at its highest level since the year 2000 (ironic given where Nasdaq is trading). Despite a tumble in 'hard' data, and a plunge in Bloomberg's economic expectations, it appears record high stocks are working to pump Americans up.

"Consumer confidence increased in July following a marginal decline in June," said Lynn Franco, Director of Economic Indicators at The Conference Board. "Consumers' assessment of current conditions remained at a 16-year high (July 2001, 151.3) and their expectations for the short-term outlook improved somewhat after cooling last month. Overall, consumers foresee the current economic expansion continuing well into the second half of this year."

Consumers' assessment of current conditions improved in July. Those saying business conditions are "good" increased from 30.6 percent to 33.3 percent, while those saying business conditions are "bad" was virtually unchanged at 13.5 percent. Consumers' appraisal of the labor market was also more favorable. Those stating jobs are "plentiful" rose from 32.0 percent to 34.1 percent, while those claiming jobs are "hard to get" decreased slightly from 18.4 percent to 18.0 percent.

Consumers were also more optimistic about the short-term outlook in July. The percentage of consumers expecting business conditions to improve over the next six months increased from 20.1 percent to 22.9 percent, while those expecting business conditions to worsen declined from 10.0 percent to 8.2 percent.

Consumers ...

Warning: the Biggest Trend of the Next 12 Months Has Hit

The single biggest trend for the next year or so will be the collapse of the $USD.

The fact is that the Fed will be forced to walk back its hawkishness. Indeed, this process has already begun with Janet Yellen testifying before Congress that the Fed was just about done with rate hikes.

Bear in mind, the $USD had already dropped 8% year to date during a period in which the Fed had hiked rates TWICE.

So what will happen to the $USD when the Fed walks back its hawkishness and slows down the pace of rate hikes... or even STOPS hiking altogether?

Again... the $USD is set to collapse. And as it does, inflation plays will be EXPLODING higher.

If you're not taking steps to actively prepare your portfolio for this, you need to so now.

We just published a Special Investment Report concerning a secret back-door play on Gold that gives you access to 25 million ounces of Gold that the market is currently valuing at just $273 per ounce.

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Today there are just 87 left.

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Best Regards

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Chief Market Strategist

Phoenix Capital Research

Daily Trading Volume In Bitcoin Surpasses GLD

Several weeks after Goldman's chief technician started covering bitcoin, overnight Bank of America has released what some may call an "initiating coverage" report on bitcoin which notes that while the cryptocurrency remains very volatile and risky, bitcoin has experienced a spectacular surge in liquidity in the last six months. However, BofA remains stumped when it comes to making any official forecasts BofA's commodity strategist Francisco Blanch writes that bitcoin is uncorrelated to any financial asset, "so there is no way to explain let alone predict returns."

While we will present some of the more notable findings from the report shortly, one observation caught our attention, namely that in at least one regard, bitcoin has already surpassed gold: the total daily trading bolume for bitcoin has now surpassed that of the biggest gold ETF, the GLD.

As BofA notes, "it is hard to ignore that trading volumes for major digital currencies like bitcoin and ethereum have skyrocketed in recent years. For example, daily trading volumes for bitcoin were $400mn in 2012 and have now moved up to about $2bn a day at present" which also means that - at current BTC prices - the total ADV of BTC traded is higher than that of GLD.

BofA continues:

Meanwhile, ethereum had daily trading volumes of $1.5mn when it first launched in 2015 and it is now experiencing daily trading of about $1bn. Most importantly, for a digital token to become a currency, it must build to a certain scale, a bit like the silver mine in Bolivia found by the Spanish. In some ways, this is exactly what h ...

SoftBank Tries to Grab the Ride-Hailing Market

The Japanese tech giant is spreading its bets on the market. Its returns may depend on big changes in consumer behavior.

Akzo Nobel's Poor Results Increase Chances of a Deal

The paint giant's shares look like a one-way bet. Weak growth makes a fresh takeover bid from U.S. peer PPG ever more probable.

Traffic Costs Jam Up Google

Google's sharp jump in paid clicks came at a high cost. Traffic acquisition spending outpaced revenue growth for the first time in five years.

Case-Shiller 20 City Home Price Index May 2017 Shows 5.7 % Year-over-Year Growth

Written by Steven Hansen

The non-seasonally adjusted Case-Shiller home price index (20 cities) year-over-year rate of home price growth was declined from 5.8 % (was reported as 5.7 % last month) to 5.7 %. The index authors stated "The small supply of homes for sale, at only about four months' worth, is one cause of rising prices. New home construction, higher than during the recession but still low, is another factor in rising prices."

Rex Nutting: Eisenhower built more infrastructure than Trump ever will

President Trump seems to have given up rebuilding America's infrastructure, even though the unmet needs are huge, writes Rex Nutting.

The Ratings Game: Alphabet's latest quarter looks 'TACky' due to Google parent's traffic acquisition costs

Shares in Alphabet slump in Tuesday morning, even after the Google parent posted better-than-expected quarterly results. Analysts have focused on negatives, especially its higher traffic acquisition costs, or TAC.

Capitol Report: Who President Trump can pardon, and who he can't

President Donald Trump has the power to pardon his family and staff, but perhaps not the power to pardon himself.

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