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23Aug2017 Pre-Market Commentary: Wall Street Investors Now Worry About A Government Shutdown, Dow Rally Poised To Fade As Jackson Hole Comes Into Focus

Written by Gary

US stock market index future point towards a steep reversal at the opening (SPY -0.3%) Trump threatened a government shutdown if Congress didn't present him with a spending bill for the next fiscal year.

Here is the current market situation from CNN Money

European markets are lower today with shares in Germany off the most. The DAX is down 0.34% while London's FTSE 100 is off 0.12% and France's CAC 40 is lower by 0.04%.

What Is Moving the Markets

Here are the headlines moving the markets.

Euro, bond yields rise on buoyant business surveys

LONDON (Reuters) - The European single currency and euro zone government bond yields rose on Wednesday after a survey showed the bloc's manufacturing businesses had their best month of growth in six-and-a-half years.

True price of an Uber ride in question as investors assess firm's value

SAN FRANCISCO (Reuters) - What is the true cost of an Uber ride?

Lowe's misses earnings estimates, forecasts slower margins growth

(Reuters) - Lowe's Companies Inc on Wednesday reported lower-than-expected quarterly earnings and warned of slower growth in profit margins, as it spends more on marketing to boost sales in a robust home improvement market.

Wal-Mart to enter voice-shopping market via Google platform

CHICAGO (Reuters) - Wal-Mart Stores Inc is teaming up with Alphabet Inc's Google to enter the nascent voice-shopping market, currently dominated by Inc , adding another front to Wal-Mart's battle with the online megastore.

Trump's comments dent U.S. stock futures

(Reuters) - U.S. stock index futures were lower on Wednesday as investors appeared to be in a risk-off mode a day after President Donald Trump said he will shutdown the U.S. government if necessary to build a wall along the border with Mexico.

Toshiba prioritizes talks with Western Digital on chips business sale: Nikkei

TOKYO (Reuters) - Japan's Toshiba Corp is prioritizing talks with Western Digital to sell its memory chip business, as negotiations with a previously preferred bidder have stalled, the Nikkei business daily reported on Wednesday.

Massive California verdict expands J&J's talc battlefield

NEW YORK (Reuters) - A massive California verdict in a lawsuit alleging Johnson & Johnson's talc-based products cause cancer has opened a new front in the litigation, upending the company's hopes that the cases were only gaining traction in Missouri, legal experts said.

Toshiba sells $58.5 million in shares of Mitsubishi UFJ: source

TOKYO (Reuters) - Japan's Toshiba Corp sold $58.5 million worth of shares in Mitsubishi UFJ Financial Group on Wednesday, a source told Reuters, as the conglomerate struggles with losses from its bankrupt U.S. nuclear business.

Mutual funds mark down investments in Uber by as much as 15 percent

NEW YORK (Reuters) - Four mutual fund companies have marked down their investments in Uber Technologies Inc [UBER.UL] by as much as 15 percent following a scandal-ridden year for the ride-hailing company.

Egypt Snubs Kushner, Cancels Meeting After US Yanks $300 Million In Aid

Trump's son-in-law and the White House "global peace" adviser, Jared Kushner, arrived in Cairo on Wednesday only to learn that his top-level meeting with Egyptian officials had apparently been cancelled, as Egypt lashed out at the Trump administration's decision to slash aid to the country.

One day after Reuters reports that the US canceled (or at least delayed) nearly $300 million in aid meant for Egypt on the grounds that its strongman ruler Abdel Fattah al-Sisi "hasn't been respecting human rights and democratic norms" the Egyptian government responded by canceling a meeting between its foreign minister and Trump son-in-law Jared Kushner that was set for today. Kushner is famously responsible for the administration's dealings in the Middle East. However, President Abdel Fattah al-Sisi's office said the president would still meet the U.S. delegation, led by Kushner, later in the day as scheduled, according to Reuters.

Top Egyptian officials believe the US' decision to deny the aid package was "insensitive" to the valuable strategic relationship that the two countries have shared for decades. Or, simply stated, Egypt wants the periodic handouts established under the Obama administration to continue.

In a statement released Wednesday, just prior to the confusion over Kushner's meetings with the foreign minister, the Ministry of Foreign Affairs hin ...

Global Financial Crisis 10 Years On: Gold Price Rise Over 100%

Global Financial Crisis 10 Years On: Gold Price Rise Over 100%

- Gold price up over 100% in major currencies since financial crisis
- Has outperformed majority of equity and bonds
- Global debt continues to increase despite claims of 'recovery'
- Gold remains an important safe-haven in long term

A Peak Above All Others

Authored by 720Global's Michael Lebowitz via,

"Valuations are still well below the peak of 1999" say the bulls. They are certainly correct from an absolute basis but we caution that the current level of market euphoria is in a league of its own when compared to prior peaks on an "apples to apples" basis.

The following table compares earnings growth and implied market expectations for earnings growth from the two prior CAPE (Cyclically-Adjusted Price-to-Earnings) peaks to today. CAPE is the price of an equity index, such as the S&P 500 in this case, divided by the average of ten years of earnings adjusted for inflation. Implied market earnings growth is the rate of earnings growth required for the next ten years to return CAPE to its historical average assuming no price changes.

Earnings over the last ten years have grown significantly slower than during the prior episodes. Despite the weak trend in earnings per share (EPS) and economic growth (GDP), the market is implying earnings will grow at a much faster rate in the future. In fact, the table highlights that EPS must grow almost 4x faster in future quarters than it has over the last ten years if CAPE is to normalize without price losses. That rate is more than double what investors required in 1999.

The table above makes an assumption worth noting. The data includes implied earnings growth under the assumption that the price of the S&P 500 will not change for ten years. ...

Frontrunning: August 23

Trump Tries to Recharge His Base in Arizona Rally (WSJ)

Trump Threatens Government Shutdown Over Border Wall Funding (BBG)

Trump defends response to Charlottesville violence (Reuters)

Trump Assails Media in Angry Defense of Charlottesville Response (BBG)

North Korea presses rocket program, but amid signs of drama easing (Reuters)

Military conflict with North Korea can be avoided: Germany's Merkel (Reuters)

ECB chief Draghi: QE has made economies more resilient (BBC)

Wage Hikes in China Bring Jobs, Factories Back to Japan (BBG)

U.S. Navy Relieves Admiral of Command After Collisions (WSJ)

U.S. Readies New Steps to Pressure Pakistan (WSJ)

Wall Street Banks Warn Downturn Is Coming (BBG)

The Case for Buying Venezuelan Bonds (

The Price Isn't Right for Home Builders

Shares of home builders look pricey and vulnerable to a correction as costs rise and affordability is strained.

Chip Gear Makers Perfect the Earnings Machine

Makers of semiconductor manufacturing equipment are more profitable than ever, which poses an interesting dilemma for investors accustomed to buying low and selling high.

Why the ECB Can't Catch a Break on the Euro

At the start of July, both German bond yields and the euro were moving higher. But in August they have diverged, with bond yields off the boil but the euro maintaining its poise. The answer to the conundrum may lie outside the eurozone.

Trucking Data Improves In July 2017

Written by Steven Hansen

Headline data for truck shipments improved in July.

How Herbalife's share buyback could force Bill Ackman to trim his short position

Herbalife's $600 million share buyback will reduce the number of shares available for short sellers to borrow and sharply increase the cost of Ackman's $1 billion short position.

The Margin: FA Cup stardust sprinkled on lower-division sub as he nearly enters match while tweeting

England is home to soccer's — and, indeed, the whole professional sporting world's — richest league. But that's the Premier League, populated by such famed clubs as Manchester United, Chelsea and Liverpool. Many rungs lower, you'll find a club like Baldock Town. It plays in Division 1 of the South Midlands League.

Market Snapshot: Dow rally poised to fade as Jackson Hole comes into focus

Wall Street is set for a slightly downbeat open on Wednesday, pulling back after a solid rally as the countdown to the closely watched powwow of global central bankers in Jackson Hole that starts later in the week.

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