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18Aug2017 Market Close: Wall Street's Trump-fed Rally Is Showing Signs Of Faltering Could Herald A Stormy Fall For U.S. Stocks, WTI Crude Settles At The High 48 Handle

Written by Gary

US stocks closed lower after another White House shake-up kept investors jittery about the outlook for the Trump agenda. The stock market's relentless rally to records may be facing its fiercest test of late.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Wall Street ends down after White House shakeup

NEW YORK (Reuters) - U.S. stocks closed lower after another volatile session on Friday as the latest White House shake-up kept investors jittery about the outlook for the Trump agenda.

Summer rumblings could herald a stormy fall for U.S. stocks

NEW YORK (Reuters) - The Trump-fed rally in stocks, lately showing signs of faltering as the long Wall Street summer nears its end, faces a key test in the weeks ahead with the approach of a historically unkind season for equities and a clutch of issues - such as raising the debt ceiling - awaiting the return of lawmakers to Washington.

NAFTA negotiators hone in on origin rules, dispute settlement

WASHINGTON (Reuters) - U.S., Canadian and Mexican negotiators on Friday began digging into some of the thorniest issues in modernizing the North American Free Trade Agreement, including rules of origin for goods produced in the region, services trade and a controversial dispute settlement system.

Stability concerns focus at Fed ahead of Yellen speech

WASHINGTON (Reuters) - The stock market's steady rise, still low long-term bond yields and a sagging dollar are girding the Fed's intent to raise interest rates again this year despite concerns about weak inflation, according to comments this week from Fed officials and analysts anticipating remarks next week by Chair Janet Yellen.

Elliott Management lawyer says utility may top Buffett's Oncor bid

(Reuters) - A lawyer for Elliott Management told a U.S. bankruptcy judge on Friday that an unidentified utility could pay $9.3 billion to buy Texas power transmission company Oncor, topping a $9 billion bid by Warren Buffett's Berkshire Hathaway Inc.

Exclusive: Citigroup tops eight-bank group for Petrobras unit IPO - source

SAO PAULO (Reuters) - Citigroup Inc and seven other banks will underwrite the initial public offering of Petróleo Brasileiro SA's fuel distribution unit, which will likely occur in November, a person with direct knowledge of the plan said on Thursday.

N.Y. Fed raises U.S. third-quarter GDP growth view above two percent

NEW YORK (Reuters) - The New York Federal Reserve on Friday raised its estimate of U.S. gross domestic product growth for the third quarter above 2 percent based on this week's data on retail sales, industrial output and regional manufacturing.

U.S. dollar stores stand their ground in escalating retail price war

U.S. dollar stores have not become collateral damage, as feared, in a price war among big retailers including Wal-Mart Stores Inc and Kroger Co , which has pushed down prices of key items such as eggs and laundry detergent.

Wells Fargo troubles shift from phony bank accounts to real ones

(Reuters) - After paying customers millions of dollars for opening phony accounts they did not want, Wells Fargo & Co has said it is now grappling with the possibility it harmed customers by closing real accounts they needed, leaving them without access to funds.

'Bannon Bounce' Fails To Correct 'Cohn Crash' As Nasdaq Drops For 4th Straight Week

Well that was a week...

Roller-coaster day for stocks - 2 overnight pump efforts failed; stocks sank into and beyond the US cash open, then went bid as Bannon headlines hit... only to slide as reality struck that with Bannon gone, the probability of war is considerably higher...and an ugly close into OPEX

All major cash indices close lower today... as it appears no one wants to hold risk into the weekend...

VIX across all major indices rose on the week...

Small Cap stocks actually dipped into the red year-to-date in this morning's initial flush, before bouncing on Bannon headlines...

...

"Almost Cataclysmic": Barclays Reveals Which Restaurants Are Most Exposed To Collapsing Malls

We've spent a lot of time this year discussing the complete collapse of mall-based retailers, a collapse which has resulted in more store closures in Q1 2017 than all of 2016 and will likely claim more victims by the end of this year than any year since the great recession nearly a decade ago. Here are a couple of recent examples:

Visualizing America's Retail Apocalypse

2017 Will Be The Worst Year For US Retail In History

"The Retail Bubble Has Now Burst": A Record 8,640 Stores Are Closing In 2017

But those mall-based apparel companies aren't the only ones suffering the dire consequences of collapsing mall traffic. For years, the casual dining space has become more and more saturated with new concepts resulting in thinner and thinner margins for the restaurant industry. Now, with foot traffic in malls collapsing these same restaurants are about to experience the brutal realization that declining traffic, massive fixed costs, rising minimum wages and razor thin margins aren't a great combo.

Thankfully, Barclays' restaurant team, led by Jeffrey Bernstein, has identified which publicly-traded restaurants are about to get screwed the most. Here's a summary:

Of the large publicly-traded casual dining chains, Cheesecake Factory 'wins' the 'most screwed' award with 93% of their locations heavily dependent on mall traffic.

Financial Times: "America Is Now A Dangerous Nation"

The Financial Times reminds readers of something that has occurred numerous times throughout history when leaders lose the support of their people... "The president may exploit an overseas conflict to distract from problems at home..."

Authored by Gideon Rachman via FT.com,

The claim that America is a "threat to world peace" has been a staple of Russian and Iranian propaganda for many years. For believers in the western alliance, it is painful to acknowledge that there is now some truth to this idea. Under Donald Trump, America looks like a dangerous nation. Over the past week, Mr Trump has indulged in nuclear brinkmanship in North Korea, issued vague threats of military action in Venezuela and flirted with white supremacists at home. He is offering the very opposite of the steady, predictable and calm leadership that American allies seek from Washington.

Mr Trump's swiftly notorious threats that North Korea risks "fire and fury" from a "locked and loaded" America were particularly irresponsible. Even if the threat is a bluff, it puts American credibility on the line and risks triggering escalation from the Kim Jong Un regime, which is threatening to fire missiles near the US territory of Guam. Even more alarming, the Trump administration is openly flirting with the idea of a pre-emptive strike on North Korea — arguing that a nuclear-armed Mr Kim cannot be deterred. But if America could rely on deterrence to contain the nuclear threat from Stalin's Russia and Mao's China — it can certainly do the same with Mr Kim's North Korea. All previous presidents have rejected the idea of pre-emptive attacks on nuclear-armed states — for obvious reasons.

The international crisis that Mr T ...

Jack Ma Works His Magic With MassMutual Bid

For Alibaba's Jack Ma, joining in a $1.7 billion bid for the Hong Kong and Macau businesses of MassMutual looks like a slick way to get into the insurance line.

Biogen Treads Tricky Path Between Politicians, Investors

Biogen is taking a political risk with aggressive multiple sclerosis drug pricing, but the company is under pressure to boost its share price.

A Pillar of Chinese Growth Starts to Show Cracks

Housing prices rose more slowly in China's interior for the second time in two months—a potentially worrying sign for growth following a raft of weak data in July.

The Ratings Game: Foot Locker shares plunge 28% as brands like Nike and Adidas go direct-to-consumer

Foot Locker shares tumbled more than 26% after the retailer reported disappointing earnings amid a shift to online and direct-to-consumer channels

Capitol Report: Trump dumps Bannon, but White House wounds fester with little cure in sight

Steve Bannon is the latest White House adviser to lose his spot on President Trump's island — and one can almost hear a collective sigh of relief in Washington. Here's why.

Market Extra: 7 signs the stock market is ready to run smack into a wall

The stock market's relentless rally to records may be facing its fiercest test of late.

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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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