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08Aug2017 Pre-Market Commentary: Wall Street Poised To Open Fractionally Lower, Crude Prices Holding Steady, US Dollar Index Down One Percent, Trump Rally To Take A Breather

Written by Gary

U.S. stock index futures are down fractionally (SPY -0.2%) after the DOW achieved a ninth consecutive high and record close, while the SP 500 notched a new all-time closing high.


Here is the current market situation from CNN Money

European markets are mixed to lower. Shares in Germany are off as the DAX drops 0.43%. The FTSE 100 is down 0.08% while the CAC 40 in France is unchanged.

What Is Moving the Markets

Here are the headlines moving the markets.

Time Inc misses revenue estimates as advertising sales slip

(Reuters) - Time Inc , the publisher of Fortune, People and Time magazines, reported a lower-than-expected quarterly revenue on Tuesday, hurt by declines in magazine sales and advertising revenue.

World stocks shrug off slowing China trade growth to hit record

LONDON (Reuters) - Global stocks inched up to a new record high on Tuesday, shrugging off weaker-than-expected Chinese trade data that clouded an otherwise bright outlook for global growth.

Google fires employee behind anti-diversity memo

(Reuters) - Internet giant Google has fired the male engineer at the center of an uproar in Silicon Valley over the past week after he authored an internal memo asserting there are biological causes behind gender inequality in the tech industry.

Envision to sell ambulance business to KKR in $2.4 billion deal

(Reuters) - Envision Healthcare Corp said on Tuesday it would sell its ambulance business to buyout firm KKR & Co in an all-cash deal valued at $2.4 billion as it sharpens its focus on its core businesses.

Exclusive: British banks' turnaround plans frustrated by U.S. justice delays

LONDON (Reuters) - Legal and investigative delays at the U.S. Department of Justice are thwarting efforts by three of Britain's biggest banks to rehabilitate themselves after the global financial crash and other problems, the banks' chief executives have said.

Ralph Lauren's quarterly sales down 13.2 percent

(Reuters) - Ralph Lauren Corp reported a 13.2 percent fall in sales as the company's move to sell more items at full price discouraged shoppers in North America.

Exclusive: Toshiba auditor to split opinion on finances, governance - sources

TOKYO (Reuters) - The auditor for Toshiba Corp is likely to sign off on the conglomerate's annual results while giving a thumbs down on the group's corporate governance during a series of crises, people with direct knowledge of the discussions said on Tuesday.

Michael Kors lifts revenue forecast, shares soar

(Reuters) - U.S. fashion accessories maker Michael Kors Holdings Ltd posted a better-than-expected quarterly profit and revenue on Tuesday and lifted its annual revenue forecast.

Autonomous cars race narrows on doubts about clear path to profit

FRANKFURT/DETROIT (Reuters) - BMW and Daimler, the world's top luxury carmakers, have announced alliances with suppliers, talking up the virtues of having a bigger pool of engineers to develop a self-driving car.

Gundlach Is Quietly Heading For The Exit: "Volatility Is About To Go Up"

DoubleLine Capital's Jeff Gundlach has become one of the most visible critics of market complacency, revealing his purchase buy five- and eight-month S&P 500 put options. Now, the legendary bond investor is touting his bet on a spike in equity market volatility as one of his "highest conviction" trades, according to an interview with Bloomberg.

"Volatility is about to go up," he said. "That's my highest-conviction trade right now."

As a result, Gundlach - who does not anticipated a crash (yet) - says his fund is quietly moving toward the exits on riskier assets, which is also his recommendation to traders.

"I don't see the big drop, unless there's something out of left field, like some sort of really escalating conflict," he said. "I think you're supposed to be gradualistically moving toward the exits."

Speaking to Erik Shatzker, Gundlach says he's reducing DoubleLine's positions in junk bonds and EM debt and moving to safer high-yield credits. With US equities looking increasingly overvalued with each successive all-time high, Gundlach says being defensively positioned is worth sacrificing a few quarters of higher returns.

In the interview, Gundlach echod recent bearish views expr ...

Here Comes Zuma's Critical No Confidence Vote: What To Expect

Yesterday, the rand soared on the unexpected announcement by the national assembly speaker (and purported Zuma replacement) Baleka Mbete that a no-confidence vote for president Jacob Zuma would take place in secret. The vote is set to take place shortly. For those willing to take a sizable gamble, here is what to expect.

Superficially, a secret vote increases the odds of Zuma's ouster - a market friendly event and one which would send the rand surging even more - because members of the ruling party can vote him out without risking party alliances; motion requires the backing of a majority of the 400 lawmakers to pass. However, some have speculated that while Mbete, Zuma's likely successor, has every incentive to allow a secret ballot to happen, it is rarely a good idea to be the one seen to be doing the ousting. And, as Citi notes, "she stands more to gain from being loyal to Zuma if she wants to keep her party onside." Thus, the cynical view would perhaps be that the ANC has been whipping votes and believe they have the necessary numbers for Zuma to survive - he would be absolved and allowed to continue as leader, and Mbete, by allowing the secret ballot, would look like a paragon of truth and justice, putting country above party.

"We are not convinced that the opposition, the ANC and the market are adequately prepared for a successful vote, which would require 201 of the 400 MPs to vote in favor of the motion irrespective of how many abstain from voting," Rand Merchant Bank says in note to clients

Nonetheless, Bloomberg reports that opposition parties reported to have identified more than 50 ANC MPs who have indicated their willingness to vote in favor of the motion; if correct "market reaction will be a swift rally." At the same time, RMB expects both the rand and bonds to give back a ...

North Korea May Be In Possession Of A Miniature Nuclear Warhead, Japan Warns

One day after Kim Jong Un's regime balked at this weekend's UN sanctions, promising retaliation and threatening to attack the US with a nuclear weapon, Japan's government has released a new 500-page report in which it warns that the threat from North Korean nuclear weapons has reached a "new stage" and that Pyongyang's weapons program had "advanced considerably," to the point where it was possible that the regime had acquired the ability to miniaturize nuclear warheads.

The white paper, approved by Japan's cabinet on Tuesday morning, was published less than two weeks after North Korea test-fired its second ICBM, which US experts have said may be able to reach most of the continental United States.

According to the Guardian, "Japan's defence ministry said that security threats had reached a new stage after the North conducted two nuclear tests and more than 20 ballistic missile launches last year."

The report went on to speculate that North Korea had improved its technological expertise to the point where it could theoretically marry a nuclear warhead with a missile.

"It is conceivable that North Korea's nuclear weapons programme has already considerably advanced and it is possible that North Korea has already achieved the miniaturisation of nuclear bombs into warheads and has acquired nuclear warheads," the ministry said.

"North Korea's development of ballistic missiles and its nuclear p ...

Global Stocks Hit Another Record High, Ignore Slowing Chinese Trade

Following a sleepy overnight session, US futures are flat as are markets in Europe, while Asian stocks rose despite overnight trade data from China which unexpectedly missed across the board. As reported last night, Chinese export growth was the slowest since February while Import growth the weakest since Dec 2016, as both missed consensus estimtes.

Paradoxically, the bad report sent the MSCI EM Asia stock index higher for a third day to its highest since November 2007, with the poor Chinese trade data promptly spun as positive: "It looks like China's trade data is taken as a half-full omen with the softer (than expected) exports mitigating risks of U.S. protectionism," said Vishnu Varathan, head of economics and strategy at Mizuho Bank in Singapore."

Continuing an unprecedented run of record highs, global stocks inched up to a new all-time high on Tuesday, shrugging off China's data. The MSCI's all-country world index ticked up to set a new record high at 480.76 points. It was last up less than 0.1 percent at 480.54 points. The index, which tracks shares in 46 countries, is on track for longest monthly winning streak since 2003. According to Reuters, "shares across the globe have been hitting record highs in record low volatility supported by a benign environment for global growth."

"Data continue to suggest a synchronized global expansion across both advanced and emerging market economies. Spill-overs from the rebound in emerging market demand are reflected in the fastest growth in world trade since 2010," said Fitch chief economist Brian Coulton.

The Chinese trade data was so poor, pardon great, the Chinese yuan (and South Korean won) led gains as ...

Cash-Hungry Tesla's Missed Opportunity

Tesla chief Elon Musk's choice of debt to finance his Model 3, while the company's share price is so strong, may turn out to be a mistake.

Iron and Copper Rallies Are Getting Overheated

One takeaway from China's latest trade data: Excitement in metals markets over capacity cuts and global growth is running ahead of the fundamentals.

A Gusher of Cash at Suncor

Canada's Suncor Energy is among the world's higher-cost producers of oil. By all rights it should have scaled back its ambitions during the last few difficult years. Instead, it did the opposite, buying out partners on the cheap and plowing ahead with projects that could pay off for decades.

Market Snapshot: Dow set to struggle to extend win streak as futures point lower

U.S. stock-index futures trade slightly lower on Tuesday, with investors finding few reasons to keep pushing shares higher following a session where both the Dow and the S&P 500 ended at records.

The GOP has your mortgage tax break in its sights

These three potential provisions will tell you just how serious Republicans are about budget-neutral tax reform, writes Tim Mullaney.

Mark Hulbert: This pack of dividend-paying stocks outruns the 'Dow Dogs'

Top-performing newsletter taps 10 stocks with fat yields.

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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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