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03Aug2017 Market Close: Wall Street Closes Down, DOW Closes Up 10 Points, WTI Crude Waterfalls To The 48 Handle, ISM Non-Manufacturing PMI Fell Unexpectedly To 53.9 From 57.4

Written by Gary

US stock markets closed moderately in the red (SPY -0.2%) after the DOW rose briefly to make another new high (22,044.85) before sharply turning down.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Apple and Amazon weigh on S&P 500; Dow heads for record

(Reuters) - The S&P 500 and the Nasdaq fell on Thursday, weighed down by Amazon.com, Apple and other top-shelf technology stocks, while the Dow Jones Industrial rose marginally and was on track for a record high close.

Exclusive: Goldman Sachs buys into Aramco $10 billion loan as it seeks IPO role - sources

DUBAI (Reuters) - Goldman Sachs has bought a slice of Saudi Aramco's $10 billion credit facility as it seeks a role in the historic listing of the oil company, sources familiar with the matter told Reuters.

U.S. labor market tightening; services sector growth slowing

WASHINGTON (Reuters) - The number of Americans filing for unemployment benefits fell last week, pointing to a tightening labor market that likely keeps the Federal Reserve on course to announce plans next month to start reducing its massive bond portfolio.

Tesla surges as Wall Street bets on Model 3

SAN FRANCISCO (Reuters) - Tesla Inc jumped 6 percent on Thursday as its quarterly report fueled bets that its new Model 3 sedan will propel the luxury electric carmaker into the mainstream.

MetLife sees charges of $1 billion in third quarter; shares down

(Reuters) - MetLife Inc's shares were down 2.6 percent on Thursday after the largest U.S. life insurer said it expected charges of about $1 billion in the third quarter related to the spinoff of its U.S. retail business, Brighthouse Financial.

Dish misses profit expectations but limits subscriber losses

(Reuters) - Dish Network Corp's shares declined on Thursday after the satellite television provider's quarterly results missed analysts' estimates, and its chief executive declined to give specifics on merger discussions, saying that the company was focused on building its new wireless network.

Toyota to take 5 percent stake in Mazda: Nikkei

(Reuters) - Toyota Motor Corp would take a roughly 5 percent stake in Mazda Motor Corp to establish a U.S. auto plant and develop key electric vehicle technologies, the Nikkei reported.

Senate reauthorizes FDA to collect fees from drugmakers

(Reuters) - The U.S. Senate on Thursday passed a bill allowing the Food and Drug Administration to continue collecting fees from drug companies to review new product applications.

Bats takes a swing at NYSE and Nasdaq in closing auctions spat

NEW YORK (Reuters) - Bats, the CBOE Holdings Inc-owned exchange operator, lambasted the New York Stock Exchange and Nasdaq Inc over their criticism of a Bats plan to compete for end-of-day stock orders, calling it disingenuous in a letter to regulators.

How Banks Hurt The Real Economy - FDIC's Hoenig To Senate

Authored by Wolf Richter via WolfStreet.com,

"The real economy has little to gain, and much to lose."

When tighter regulations were imposed on the banks after the Financial Crisis, the largest among them, the very ones that threatened to bring down the financial system, began squealing. Those voices are now being heard by Congress, which is considering deregulating the banks again. In particular, they claim that current capital requirements force banks to curtail their lending to businesses and consumers, and thus hurt the economy.

Nonsense! That's in essence what FDIC Vice Chairman Thomas Hoenig told Senate Banking Committee Chairman Mike Crapo and the committee's senior Democrat, Sherrod Brown, in a letter dated Tuesday, according to Reuters. The senators are trying to find a compromise on bank deregulation.

If banks wanted to increase lending, they could easily do so without lower capital requirements, Hoenig pointed out.

Rather than blowing their income on share-buybacks or paying it out in form of dividends, banks could retain more of their income, thus adding it to regulatory capital. Capital absorbs the losses from bad loans. Higher capital levels make a bank more resilient during the next crisis. If there isn't enough capital, the bank col ...

Mueller Impanels Grand Jury In Russia Probe

Stocks slumped, and VIX spiked following news that Special Counsel Robert Mueller has impaneled a grand jury in Washington to investigate Russia's interference in the 2016 elections, the WSJ reports, adding that "this is a sign that his inquiry is growing in intensity and entering a new phase." The grand jury is said to have begun work in recent weeks, suggesting Mueller's inquiry is ramping up and "that it will likely continue for months."

Some details: "grand juries are powerful investigative tools that allow prosecutors to subpoena documents, put witnesses under oath and seek indictments, if there is evidence of a crime. Legal experts said that the decision by Mr. Mueller to impanel a grand jury suggests he believes he will need to subpoena records and take testimony from witnesses."

"This is yet a further sign that there is a long-term, large-scale series of prosecutions being contemplated and being pursued by the special counsel," said Stephen I. Vladeck, a law professor at the University of Texas. "If there was already a grand jury in Alexandria looking at Flynn, there would be no need to reinvent the wheel for the same guy. This suggests that the investigation is bigger and wider than Flynn, perhaps substantially so."

Speaking to the WSJ, Ty Cobb - special counsel to the president - said he wasn't aware that Mueller - who is investigating Russia's efforts to influence the 2016 election and whether President Donald Trump's campaign or associates colluded with the Kremlin - had started using a new grand jury. "Grand jury matters are typically secret," Mr. Cobb said. "The White House favors anything that accelerates the conclusion of his work fairly. ...

Wikileaks Reveals "Dumbo": Tool That Allows CIA To Shut Down Cameras And Microphones

Since Wikileaks began releasing classified CIA documents back in March as part of its "Vault 7" series of leaks, purportedly the largest document dump in the agency's history, it has publicly unveiled programs with innocent sounding names like "Marble", "Scribbles" and "Archimedes" that the agency employs to help execute its operations, or to cover its tracks.

On Thursday, the group released the 19th installment in its series by publishing a series of documents detailing how the agency uses a custom-designed hacking exploit called "Dumbo" to destroy, or manufacture, evidence during field operations, according to a Wikileaks press release.

The CIA filed a request that such a tool back in 2012, according to a powerpoint presentations describing what capabilities it would need.

In a field guide for the tool, dated July 2015, the agency says "the intelligence ...

'Hotel California': The VC Market's Investment-To-Exit Ratio Is A Record High... Is This Why?

While Silicon Valley's technorati may be "living it up," new data from Pitchbok suggests the Venture Capital world is stuck in 'Hotel California' and "can never leave."

As Pitchbook.com's Katie Clark reports, opting to raise more funds rather than prioritizing an exit seems to be an increasingly popular route for startups.

According to data from the 2Q PitchBook-NVCA Venture Monitor, the number of US venture capital investments for every VC-backed exit reached a record high in the first half of 2017 - landing at 11.3x. For the 3,917 VC investments completed in 1H, there were just 348 exits.

If the trend continues in 2H, the US VC industry will experience the lowest exit levels since 2010. Similarly, but to a lesser extreme, investment count may end the year at the lowest mark in five years - 2012 was the last year the total number of financings in the US fell below 8,000.

Why is this happening? Companies are choosing to stay private longer as is evidenced by the data shown below: The average time to exit has hit roughly six years through 1H 2017. More specifically, median time to IPO now exceeds eight years, time to buyout is hovering around six-and-a-half years and time to acquisition has landed at about four-and-a-half years.

No Cure in Sight for Teva

Don't be fooled by the low valuation. Teva Pharmaceutical Industries is a dangerous stock to own.

A Ferrari SUV? Investors Should Hope So

Ferrari is speeding toward a fork in the road. It shouldn't hesitate to take the more ambitious path.

China's Latest Bubble Is Its Most Serious Yet

The problem for Beijing isn't just the asset-management industry's sheer size, it is the evolving relationships between key players and the ever-changing nature of the products they sell.

The Wall Street Journal: Mueller impanels grand jury to investigate Russian interference

Special Counsel Robert Mueller has impaneled a grand jury in Washington to investigate Russia's interference in the 2016 elections, a sign that his inquiry is growing in intensity and entering a new phase, according to two people familiar with the matter.

America's pets are responsible for 30% of the environmental impact of meat eating

If America's pets were their own country, their meat consumption would rank fifth in the world

The Fed: All of a sudden, Gary Cohn is seen as shoo-in to be next Fed chairman

White House economic adviser Gary Cohn now is seen as the likely next chairman of the Federal Reserve

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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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