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27Jul2017 Pre-Market Commentary: Wall Street To Open Higher, Crude Prices Slip Fractionally, Today Is The Busiest Day Of Earnings Reports

Written by Gary

US stock market index futures are pointing towards another strong opening (SPY +0.2%), but thoughtful if new highs are going to be seen.


Here is the current market situation from CNN Money

European markets are mixed. The CAC 40 is higher by 0.03%, while the DAX is leading the FTSE 100 lower. They are down 0.62% and 0.16% respectively.

What Is Moving the Markets

Here are the headlines moving the markets.

Exclusive: Not Made in America - Wal-Mart looks overseas for online vendors

CHICAGO (Reuters) - Walmart.com, trailing Amazon.com Inc in the number of goods for sale on its website, is recruiting vendors in China and other countries to boost its online offerings in a pivot away from Wal-Mart's Made-in-America campaign.

Jobless claims rise from three-month low

WASHINGTON (Reuters) - The number of Americans filing for unemployment benefits rebounded from a three-month low last week, but remained below a level consistent with a tightening labor market.

Twitter shares tumble on weaker-than-expected user growth

(Reuters) - Twitter Inc shares tumbled in premarket trading on Thursday after the social media platform reported weaker-than-expected growth in monthly active users in the second quarter.

Verizon quarterly subscriber additions jump; shares up

(Reuters) - Verizon Communications Inc on Thursday reported quarterly revenue that topped expectations as the No. 1 U.S. wireless carrier attracted more subscribers with its unlimited data plan.

Exclusive: 'High Times' ready to roll with public offering - sources

(Reuters) - The publisher of iconic marijuana enthusiast magazine, "High Times," plans to take the company public in the fall, two sources familiar with the situation told Reuters this week, as an increasing number of U.S. states legalize the drug.

Comcast results top estimates on film, theme parks growth

NEW YORK (Reuters) - Comcast Corp's quarterly results topped Wall Street analysts' estimates on higher revenue in its filmed entertainment and theme parks businesses, even as the No. 1 U.S. cable operator lost video subscribers.

Worldwide price gains help Dow Chemical beat estimates

(Reuters) - Dow Chemical Co's results beat Wall Street estimates on Thursday, as the chemicals company raised prices of its products and cut costs.

Starbucks to buy remaining stake in East China JV for $1.3 billion

(Reuters) - Coffee chain Starbucks Corp said on Thursday it would buy the remaining 50 percent share of its East China business from its joint venture (JV) partners for about $1.3 billion, in its biggest ever acquisition.

Dollar steadies after Fed skid, shares hit new highs

LONDON (Reuters) - Stocks, bonds and commodities were all on a roll on Thursday, as market bulls scented a softening in the Federal Reserve's confidence on inflation that promised to keep U.S. interest rates low for longer.

Core Durable Goods Orders Disappoint But Aircraft Orders Surge 131%

A huge upside surprise for durable goods orders (+6.5% MoM vs +3.9% MoM) was dominated by a 19% spike in transportation (with non-defense aircraft orders up 131.2% MoM)

Up from $11bn to $25.3bn...

New orders for manufactured durable goods in June increased $14.9
billion or 6.5 percent to $245.6 billion, the U.S. Census Bureau
announced today. This increase, up following two consecutive monthly
decreases, followed a 0.1 percent May decrease.

Excluding transportation, new orders increased 0.2 percent.
Excluding defense, new orders increased 6.7 percent. Transportation
equipment, also up following two consecutive monthly decreases, led the
increase, $14.6 billion or 19.0 percent to $91.6 billion.

However, away from this unsustainable surge in orders, Core Durable Goods Orders disappointed (+0.2% vs +0.4% exp) and Capital Goods New Orders Nondefense Ex Aircraft & Parts fell 0.1% - the biggest drop since Dec 2016.

Let's just hope Boeing can sell a few more planes in July or this picture won't look so rosy.

Bill Blain: "Are We In A Bubble About To Burst, Or Are We Facing Massive Equity Upside?"

Submitted by Bill Blain of Mint Partners

Are We In A Bubble About To Burst, Or Are We Facing Massive Equity Upside?

"A liberal is a conservative who has been arrested."

No surprises from the Fed last night. Unchanged rate talk and hints about reducing the balance sheet "relatively soon". We can go figure what "relatively" means when inflation picks up. The stock market soared and VIX tumbled to a record low. Was that a warning about complacency? Since the 2008 crisis we've been here many times before - worrying about signals the economy is strengthening when suddenly its dived weaker.

But, those us with longer memories can recall when the US economy has turned dramatically stronger - and in 1994, (yes, I remember it well), when the Fed acted prematurely, spiked the recovery and triggered what we'd now call a massive Treasury market TanTrum. This time it feels very different. I suspect we are very much still on course towards normalisation - a new kind of new normal: low rates, low inflation and steady state low growth.



Stuff to watch today: Dovish Fed boosts stocks (record Dow) and dollar crashes. Lots of corporate results to wonder and worry about!

Stuff the think about: Deutsche Bank results show it's taken yet another thumping - difficult to see how it plays catch up and regains market relevance when it's still swinging the headcount axe. Where is the US economy when inflation remains so low? What are the risks to Europe of the low dollar?

Listening to the flow from our trading desks, clients and what I read on blogs and research, there are two distinct views on current markets:


  1. Everything is a bubble about to burst. Financial asset prices are massively vulnerable to correction as Central Banks normalise and cut the market distortions of QE policies. Yada yada yada, been ...

Krona Sinks After Swedish PM Refuses To Resign, Reshuffles Cabinet Over "Disastrous Leak"

A brief (ECB/Fed-driven) sigh of relief yesterday in the Krona has ended as Sweden's embattled PM has refused to resign over the government's "disastrous leak" of the nation's citizens' information. Lofven has instead chosen to reshuffle his cabinet, ading "I don't want political chaos in Sweden, that's not what we need right now, I will take responsibility and ensure we don't get a political crisis."

However, as Bloomberg reports, opposition members were already signaling they weren't satisfied with the steps taken, and Lofven's government remains far from secure.

The prime minister said Home Affairs Minister Anders Ygeman and Infrastructure Minister Anna Johansson will leave the Cabinet, as parties representing a majority in parliament prepared no-confidence motions against them.

Defense Minister Peter Hultqvist will stay, Lofven told reporters in Stockholm on Thursday, arguing the specific motion against him was "not serious."

The announcement follows speculation the prime minister would himself be forced to resign, or call an early election, in response to the deepening scandal. With the reshuffle, Lofven is buying himself time to negotiate with parliament.

Anna Kinberg Batra, head of the Moderate Party that leads the opposition, on Wednesday blamed Lofven for throwing Sweden into "a serious securit ...

Scaramucci Implicates Priebus In Now-Deleted Tweet Following 'Felony' Leak Of Financial Disclosures

Content originally published at iBankCoin.com

White House Communications Director Anthony Scaramucci set of a firestorm of speculation last night with a now deleted tweet following a Politico article containing information he claimed was leaked - revealing his net worth at $85 million.

Scaramucci stated that he "will be contacting @FBI and the @TheJusticeDept #swamp @Reince45," oddly tagging White House Chief of Staff Reince Priebus.

In response, Twitter exploded with rumors that Priebus was a White House leaker - an implication which Ryan Lizza of The New Yorker (and contributor to CNN) somehow confirmed.

In case there's any ambiguity in his tweet I can confirm that Scaramucci wants the FBI to investigate Reince for leaking.

— Ryan Lizza (@RyanLizza) July 27, 2017

Wait really?

— Christopher Hayes (@chrislhayes) July 27, 2017

Deutsche Bank No Longer Reeling, but Recovery Out of Sight

Deutsche Bank is finding firmer ground, but first-half revenues disappointed and there was little to suggest investors have anything other than a long wait for better returns.

Nestlé's Slow Growth Plays Into Dan Loeb's Hands

The activist investor is agitating for higher margins at the world's largest food company. Disappointing growth lends weight to his arguments.

Noble's Shriveled Asian Roots Won't Catch Much Rain

Noble's share price fell nearly 50% after it warned of another big loss and said it planned to sell of most of its global oil-and-gas assets. What's left may have trouble surviving on its own.

Project Syndicate: Why tax cuts for the rich solve nothing

Cutting taxes on corporations and the wealthy won't solve any of our nation's problems, writes Joseph Stiglitz.

AstraZeneca's late-stage trial failure sends its shares down 16% and Bristol-Myers, Merck stocks seesawing

The three pharmaceutical companies are competing to be leaders in treating lung cancer.

Economic Report: U.S. jobless claims climb 10,000 to 244,000

The number of Americans who applied for unemployment benefits rose in late July but remained near the lowest level in decades, mirroring a red-hot labor market that shows little sign of cooling.

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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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