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16Aug2017 Market Update: Wall Street Slips Just Ahead Of Fed's Release Of The July Minutes, WTI Crude Slips To The Low 47 Handle, US Dollar Falls From Perch And Remains Volatile

Written by Gary

Late afternoon trading points to a weaker market place just before the Fed's minutes at 2 p.m. ET (SPY +0.2%). The Fed might start balance-sheet drawdown in September, FOMC minutes hint.


Here is the current market situation from CNN Money

North and South American markets are mixed today. The Bovespa is up 0.61% while the S&P 500 gains 0.21%. The IPC is off 0.61%.

What Is Moving the Markets

Here are the headlines moving the markets.

Wall Street rises as consumer stocks gain; Fed minutes eyed

(Reuters) - The S&P and the Dow rose higher in late morning trading on Wednesday on gains from consumer discretionary stocks, with investors awaiting the minutes on the latest Federal Reserve meeting.

U.S. talks tough as NAFTA negotiations get under way

WASHINGTON (Reuters) - The United States on Wednesday laid down a tough line for modernizing the North American Free Trade Agreement, demanding major changes to the pact that would reduce U.S. trade deficits with Mexico and Canada and increase U.S. content for autos.

Trump, in tweet, hits Amazon over taxes, jobs

WASHINGTON (Reuters) - U.S. President Donald Trump on Wednesday criticized Amazon.com on Twitter over taxes and jobs and accused the global retailer, without offering evidence, of hurting U.S. localities and causing job losses.

Exclusive: China's Belt and Road acquisitions surge despite outbound capital crackdown

HONG KONG (Reuters) - Mergers and acquisitions by Chinese companies in countries that are part of the Belt and Road initiative are soaring, even as Beijing cracks down on China's acquisitive conglomerates to restrict capital outflows.

Maersk upbeat on shipping outlook, faces hefty cyber attack bill

COPENHAGEN (Reuters) - Denmark's A.P. Moller Maersk gave an upbeat outlook for container shipping on Wednesday, lifting its shares by as much as 4.5 percent as investors looked beyond one-off second-quarter charges and a costly cyber attack on its operations.

U.S. judge in Takata bankruptcy halts lawsuits vs automakers

(Reuters) - A U.S. judge overseeing the bankruptcy of Japanese auto supplier Takata Corp's U.S. business has halted for 90 days the lawsuits brought by victims of its faulty air bag inflators against automakers, a ruling that temporarily smooths its efforts to exit bankruptcy.

Sale of Air Berlin slots offers rare German entry ticket

BERLIN/FRANKFURT (Reuters) - Air Berlin's administrators will focus on selling its attractive take-off and landing slots in Germany, a source familiar with the process said, potentially opening up the market to new players.

Ireland rejects EU's demand that it collect 13 billion euros from Apple

BERLIN (Reuters) - Ireland's finance minister rejected the European Commission's demand that it retroactively collect 13 billion euros in taxes from Apple , saying this was not Dublin's job in an interview with Germany's Frankfurter Allgemeine (FAZ) newspaper.

U.S. regulators charge bank employee, six others with insider trading

NEW YORK (Reuters) - U.S. securities regulators on Wednesday accused an employee of a large multinational bank and six other people of taking part in an insider trading scheme that reaped more than $5 million in profits.

President Trump's Strategic Policy Council To Disband; Pence Ends LatAm Trip Early

With CEOs dropping like flies (3M and Campbell Soup Company most recently), CNBC is reporting that a conference call is under way that is discussing the disbandment of President Trump's Strategic Policy committee.

Bloomberg reports that President Donald Trump's council of senior business leaders who advise on strategy and policy is said to be disbanding, according to a person familiar with the matter.

The executive council, which is led by Blackstone Group LP's Stephen Schwarzman, planned to inform the White House Wednesday before making the announcement public, according to the person, who wasn't authorized to discuss the matter publicly.

The strategy group is one of several the White House convened earlier this year to advise the president.

Several CEOs from a manufacturing council have quit this week, following blowback over Trump's remarks about racially charged violence in Virginia on Saturday.

This follows the mass exodus of CEOs, most recently 3M and Campbell CEOs.

Inge Thulin, the chairman and CEO of 3M , on Wednesday announced his resignation from President Donald Trump's manufacturing council.

"Sustainability, diversity and inclusion are my personal values and also fundamental to the 3M Vision. The past few months have provided me with an opportunity to reflect upon my commitment to these values," he said in a statement. "I joined the Manufacturing Jobs Initiative in January to advocate for policies that align with our values and encourage even stronger investment and job growth - in order to make the United States st ...

"March On Google" Protest Postponed Due To "Credible Terrorist Threat"

A protest march planned for Saturday at Google in Mountain View has been postponed, according to a blog post by its organizers, who said they had received "credible" terrorist threats.

As the Mercury News reports, the "Peaceful March on Google" has been postponed "due to credible Alt Left terrorist threats for the safety of our citizen participants," the group wrote in a blog post. The group is protesting against the recent termination of engineer James Damore over a memo claiming which slammed the search giant for its "anti-conservative" bias and claimed a biological basis for the gender gap in tech.

From the blog:

Despite our clear and straightforward statements denouncing bigotry and hatred, CNN and other mainstream media made malicious and false statements that our peaceful march was being organized by Nazi sympathizers. Following the articles, credible threats from known Alt Left terrorist groups have been reported to and relevant authorities have been notified.

In one instance, an Alt Left threat was made to use an automobile to drive into our peaceful march.

The blog also notes that in addition to the Mountain View campus, there were protests planned at Google offices in eight other cities, including New York City, Washington D.C., Boston, Austin, Atlanta, Los Angeles, Pittsburgh, and Seattle. The group hopes to hold its protest in a few weeks.

Complicating scheduling, the original protest was announced before violence erupted over the weekend in Virginia episode. That violence has now led to a counterprotest scheduled for the same time this Saturday, about three miles away from Google's headquarter ...

The Two Things To Look For In Today's FOMC Minutes

There are two, also known as non-GAAP four, things to look forward to in today's FOMC Minutes: inflation, and balance sheet, balance sheet, balance sheet.

At 2pm, the FOMC will release the minutes of the July 25-26 meeting when, as expected, the Fed left its rate unchanged and gave few surprises in its characterization of the outlook. It did surprise many, however, by noting that it expects to begin implementing balance sheet normalization "relatively soon", language which most had not expected to be introduced until September; this, as UBS notes, is the condition the FOMC set for unwinding its balance sheet, so we now see the Fed announcing its balance sheet normalization policy in September. While there will be no earthshattering revelations, look to the Minutes to shed additional light on the Committee's debate on this timing and views on the outlook for inflation, which will determine future rate hikes.

Going back to the July 26 statement, the FOMC's characterization of inflation was uninformative, merely reflecting the softness in the last several prints. In the minutes, some hope to find if the language reflects strongly held views that the softness is transitory, or if there were participants that wanted to raise more alarm about the inflationary outlook, but were outnumbered. Chair Yellen has been explicit that the outlook for inflation will determine the timing of future rate hikes.

Leading up to the meeting, Fed officials were explicit that they believe that inflation weakness is transitory but that they need to see evidence that inflation is rising before hiking again. Further complicating matters, the July CPI print - the fifth miss in a row - did not provide sufficient evidence. As a result, the breadth of inflation views within the Committee should inform the sellside's calls on the next hike.

As for the Fed's balance sheet "normalization", the Fed has made a distinction between announcing and implementi ...

This Auto Lender Won't Pay Off

Subprime auto lender Credit Acceptance has run circles around short-sellers, but it shares are now looking expensive and vulnerable.

Beijing's Heavy Hand in Chinese Business

China's big internet companies are investing in its No. 2 telecom provider though the reason isn't clear beyond the government wants it.

How Fast Can Europe Really Grow?

The eurozone is consistently growing faster than estimates of its potential

Apple issues Canadian-dollar bond for first time — and sets a record

The iPhone maker sold C$2.5 billion of maple bonds to raise funds to pay dividends and buy back shares.

Raising the minimum wage spurs these companies to replace workers with automation

Some workers are more likely to be replaced by robots than others.

In One Chart: The two 'most important charts in the world' point to more fun for stock-market bulls

The S&P 500 generally steals the most ink when it comes to the performance of the stock market. But, in the current climate, there's a pair of indexes that perhaps deserve more attention, writes J.C. Parets of the All Star Charts blog.

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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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