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28Jul2017 Pre-Market Commentary: Wall Street To Open Lower, US Economy Accelerated In The Second Quarter, WTI Crude In The Low 49 Handle, Gold Index Rises Sharply To The 1266 Level

Written by Gary

US stock market index futures are pointing towards a negative opening (SPY -0.2%) as Amazon's profit miss took a toll on technology shares.


Here is the current market situation from CNN Money

What Is Moving the Markets

Here are the headlines moving the markets.

Consumers, businesses lift U.S. economic growth in second-quarter

WASHINGTON - The U.S. economy accelerated in the second quarter as consumers ramped up spending and businesses invested more on equipment, confirming that the sluggish performance early in the year was temporary.

Futures lower as tech stocks take a beating

(Reuters) - U.S. stock index futures were lower on Friday as Amazon's profit miss took a toll on technology shares.

Wall Street braces for end of Snap share lockup

SAN FRANCISCO (Reuters) - A flood of Snap Inc shares held back since the Snapchat owner's initial public offering could start to trade freely next week, pressuring a stock that has already plunged far below its debut price.

Amazon plows ahead with high sales and spending; profit plunges

(Reuters) - Amazon.com Inc on Thursday reported a jump in retail sales along with a profit slump, as its rapid, costly expansion into new shopping categories and countries showed no sign of slowing.

Exxon profit nearly doubles, but falls short of expectations

(Reuters) - Exxon Mobil Corp, the world's largest publicly traded oil producer, said on Friday its quarterly profit nearly doubled on surging margins at its operations outside the United States, but results fell shy of Wall Street's expectations.

American Airlines revenue rises 7.2 percent

(Reuters) - American Airlines Group Inc reported a 7.2 percent rise in quarterly revenue, helped by strong passenger demand and improving average fares.

Merck profit beats as Keytruda sales soar, expenses drop

(Reuters) - Merck & Co Inc's quarterly profit blew past analysts' estimates on Friday as demand surged for its key immuno-oncology drug, Keytruda, and the company reined in expenses.

AbbVie's profit rises 19 percent on Humira demand

(Reuters) - U.S. drugmaker AbbVie Inc reported an 18.9 percent rise in quarterly profit on Friday on strong demand for its flagship rheumatoid arthritis drug, Humira.

JPMorgan plans cost cuts in Sapphire Reserve card unit: WSJ

(Reuters) - JPMorgan Chase & Co is pushing for fresh cost cuts of about $200 million in the unit that oversees Sapphire Reserve credit card, the Wall Street Journal reported on Friday.

Pakistan Plunges Into Political Turmoil After Prime Minister Ousted For Corruption

Pakistan plunged into political turmoil when its Prime Minister Nawaz Sharif resigned shortly after the Supreme Court ousted him from office on Friday following an investigation into allegations of corruption centering on undeclared offshore assets. As Reuters notes, The court disqualified Sharif for not being "honest", a requirement for lawmakers under Pakistan's constitution, something the US sorely needs to amend as well. The court also ordered a corruption trial against Mr. Sharif, whose family is accused of amassing wealth through corrupt means and purchasing expensive overseas properties with that money.

The case against Mr. Sharif centers on four upscale apartments in London, which the opposition party alleges were bought with money made from corruption. Details of the property, held in the name of Mr. Sharif's children, were disclosed in the huge leak of documents from the Panamanian law firm Mosack Fonseca last year, known as the "Panama Papers", detailing the undisclosed offshore holdings of people around the world. The Prime Minister said the apartments belonged to his children, not him, and were acquired as part of a settlement of an old family business deal with a Qatari prince.

Nawaz becomes the second casualty of the "Panama Papers" after the Iceland prime minister resigned in April of 2016 under similar circumstances.

A statement from Sharif's Pakistan Muslim League-N party said he had stepped down as prime minister immediately following the verdict but added that "constitutional and legal requirements for a fair trial were trampled over." His party is now expected to name ...

Q2 GDP Preview

Ahead of today's key economic release, the US Q2 GDP number due at 8:30am ET, here is what some of the key players expect, via RanSquawk:



Sellside Consensus: 2.6%

Atlanta Fed: 2.8%

NY Fed: 2.0%

Goldman Sachs: 2.2%

JPM: 3.5%

Barclays: 2.7%

Citi 2.9%

A more detailed preview and market reaction courtesy of the analysts at FX Daily.



In the wake of the strong durable goods number yesterday, where the Jun rise of 6.5% was over double what the market was expecting, projections for today's Q2 GDP have been revised higher by some of the leading bank research teams. Forecasts have bee raised by some 3-5 tenths of a % point based on the latest data read, which has been heavily bolstered by the size orders for the Boeing 737 jets previewed at the Paris air show.

The median consensus for today's number is around 2.4% rise, 1 percent higher than the final Q1 GDP print of 1.4% but it is worth taking into account the wide range of forecasts which stretch from 1.8% to (now) 3.5%, so there is still room for some sizeable deviation. The core durable goods orders were not as stong for the Jun number, but were more than tempered by the upward revisions in May.



We also have to take note of the stronger earnings on balance, and these wil also feed into a healthy number, or at least further substantiate the consensus calls in the mid 2.0%'s.

The weaker USD may also have helped over these months. Trade looks to have benefited, and this has been reflected in the narrowing of the deficit from $65.9B in May to just under $64B in Jun. Q1 is also tradit ...

US Orders Venezuela Embassy Families Out As Crisis "Showdown" Arrives

On Thursday, the U.S. government ordered family members of employees at its embassy in Venezuela to leave as the nation's political crisis deepened ahead of a controversial vote critics contend will end democracy in the oil-rich country. Similarly, Canada warned its nationals against non-essential travel to Venezuela and urged citizens already there to leave. As well as ordering relatives to leave, the U.S. State Department on Thursday also authorized the voluntary departure of any U.S. government employee at its compound-like hilltop embassy in Caracas, where hyperinflation is about to hit 1,000%.

Meanwhile, as France 24 notes, Venezuela careened towards a "showdown" on its streets Friday between anti-government protesters and security forces, raising international alarm at worsening deadly unrest. The opposition called fresh nationwide demonstrations to defy a new government ban on rallies ahead of a controversial vote Sunday to elect a body to rewrite the constitution.

As protests mount, culminating with a two-day general strike that ended on Thuesday, violence has continued to rage on the street, with Reuters reporting that another seven people were killed during the latest opposition-led strike against President Nicolas Maduro's planned election for a powerful new Constituent Assembly on Sunday. Four months of protests against unpopular leftist President Nicolas Maduro have already claimed 112 lives, according to prosecutors.

This Is Why Shrinkflation Is Making You Poor

This Is Why Shrinkflation Is Making You Poor

- Shrinkflation has hit 2,500 products in five years
- Not just chocolate bars that are shrinking
- Toilet rolls, coffee, fruit juice and many other goods
- Effects of shrinkflation been seen for "good number of years" - Consumer Association of Ireland
- Shrinkflation is stealth inflation, form of financial fraud
- Punishes vulnerable working and middle classes

The Great Transatlantic Bond Divergence Unwind

For more than two decades after the fall of the Berlin Wall, U.S. and German bonds were like soldiers marching in step. That changed a few years ago, but signs are for this important trade to reassert itself.

The Bull Market's Growth Problem

Under the hood of the stock market rally, signs the 8-year bull market may be nearing its end.

Investors Don't Believe in Twitter's Turnaround

Twitter has found a way to moderate its revenue declines, but it told investors not to get too excited about it.

Economic Report: U.S. GDP speeds up to 2.6% in 2nd quarter

Americans got out and spent more in the spring, nursing the U.S. economy back to good health after a feeble start to the year. GDP rose at a 2.6% rate in the second quarter vs. 1.2% in the first three months of 2017.

Capitol Report: McConnell blames Democrats after health-care loss | House approves border-wall money

Senate Majority Leader McConnell blames Democrats after health-care loss; House approves border-wall funding; Trump tweets 'let Obamacare implode' after health bill fails; and more.

HPE CEO Meg Whitman says she won't be Uber's next CEO

As Uber Technologies searches for its next chief executive, Hewlett-Packard Chief Executive Meg Whitman wants to make clear that it won't be her.

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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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