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28Aug2017 Market Update: Nasdaq Trading Sideways And Higher, DOW Down 30 Points And The US Dollar Edges Down Fractionally

Written by Gary

Late afternoon trading has made its mark as a mixed market (SPY -0.1%). The large caps are down fractionally and the small caps are up moderately. Interestingly, WTI has slipped 3% to the low 46 handle.

Here is the current market situation from CNN Money

North and South American markets are mixed. The Bovespa is higher by 0.04%, while the IPC is leading the S&P 500 lower. They are down 0.53% and 0.10% respectively.

What Is Moving the Markets

Here are the headlines moving the markets.

S&P, Dow edge lower as Harvey batters oil market

(Reuters) - The Dow and the S&P were slightly lower in early Monday afternoon after oil stocks slipped further as Tropical Storm Harvey bore down on the U.S. energy hub.

CEO Khosrowshahi poised to take Uber job: Expedia memo

(Reuters) - Expedia Inc Chief Executive Dara Khosrowshahi is poised to accept an offer to be Uber Technologies Inc's [UBER.UL] CEO, according to an internal memo sent to Expedia staff, ending a drawn-out search for the next head of the ride-services company.

Oil falls but gasoline jumps as Harvey hits U.S. refiners

NEW YORK (Reuters) - U.S. crude oil futures fell more than 3 percent on Monday but gasoline prices surged to two-year highs as Tropical Storm Harvey kept hammering the U.S. Gulf Coast, knocking out several refineries which backed up crude supplies and disrupted fuel production.

GE shifts strategy, financial targets for digital business after missteps

NEW YORK (Reuters) - General Electric Co wants its industrial software business to cut costs and lift profits next year under new chief executive John Flannery, and is considering expanded partnerships and the possible sale of some equity in the unit, according to people familiar with the business.

Fitbit takes aim at Apple with new smartwatch launch

(Reuters) - Wearable device maker Fitbit Inc on Monday launched its newest device, the Ionic smartwatch, with features ranging from fitness tracking to contactless payment, as it gears up to compete with rivals such as Apple Inc .

U.S. goods trade deficit widens in July; retail inventories fall

WASHINGTON (Reuters) - The U.S. goods trade deficit increased in July as exports fell, suggesting that trade would make a modest contribution to economic growth in the third quarter.

Western Digital group finalizing $17 billion deal for Toshiba chip unit: source

TOKYO (Reuters) - A consortium led by Western Digital Corp is close to an agreement to buy Toshiba Corp's $17.4 billion chip business, with the U.S. firm's CEO in Tokyo to finalize the long and contentious talks, a person familiar with the matter said.

CBS agrees to buy embattled Australian customer Ten Network

SYDNEY (Reuters) - CBS Corp , the United States' most-watched television network, on Monday said it plans to buy its biggest customer in Australia, Ten Network Holdings Ltd , and launch its streaming service in the country.

Harvey throws a wrench into U.S. energy engine

HOUSTON (Reuters) - A hurricane in the heart of the U.S. energy industry is set to curtail near-record U.S. oil production for several weeks, with the impact expected to reverberate throughout the country and across international energy markets.

Gas Station Shortages Expected In Texas As Gulf Coast Premiums Hit Record Highs

According to retail fuel supplier Mansfield Oil, short-term fuel supplies for Houston and San Antonio are significantly impacted by Tropical Storm Harvey.

Bloomberg reports that San Antonio and Houston supplies are at code red, while Corpus Christi was downgraded to code orange as terminals have come online already and limited spot supplies are available.

For now, reports a number of stations are still open, though prices are rising...

However, the Gulf Coast CBOB gasoline spread to NYMEX futures rose 9.50c to a 16.50c/gal. premium - the highest on record in data from 2012.

The U.S. could see 30 percent of refining capacity shut on Harvey and if the storm moves up the Texas coast toward Louisiana, then additional shutdowns could occur in Port Arthur and Beaumont as well as in Lake Charles, Louisiana, Tudor Pickering Holt & Co. LLC analysts said. Port Arthur is home to the nation's largest refinery operated by Motiva Enterprises LLC.

"There's a big drop-off suddenly in crude oil demand," John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, said by telephone. "We have a supply di ...

Lowest Dealer Award On Record In Blistering 5Y Auction

The poor 2Y Auction that concluded just 90 minuets ago is a distant memory, because while the market, and especially Indirect bidders, appeared to balk sale of $26 billion in 2 Year paper, there appeared to be no concerns involving the just concluded sale of $34 billion in 5Y new paper, buyside demand for which could be described as "blistering."

The high yield of 1.742% stopped through the 1.75% When Issued by 0.8bps, with an 18.98% allocation at the high yield. It was the lowest 5Y yield going back to October of last year.

The internals were even more impressive: while the Bid to Cover was unchanged from last month at 2.58, and above the 6 month average of 2.43, the Indirect takedown was just shy of a record at 69.1% (vs 64.7% for the past 6 auction average), and only the jump in the Direct Bid award from 6.2% in July to 13.5%, the highest since July 2014, prevented Indirects from getting an all time high allotment. At the same time, the Dealer award dropped from an already low 24.1% in July to just 17.5%, the lowest in 5Y auction history.

In summary: an odd day in which in the span of 90 minutes we saw one poor and one stellar auction, for reasons that are not exactly clear.

Looting Begins In Houston As Distracted Police Rescue Over 2,000 From Floodwaters

With Houston's police force desperately spread across the city, having rescued an estimated 2,000 people so far from floodwaters, Houston PD Chief Art Acevedo has announced that Houston PD officers have arrested looters.

While the scenes of devastation across Houston are depressing, the following clip could be the most depressing...


Looting at Get directions
Tidwell Rd & Homestead Rd, Houston, TX 77016.@TrumpTrain45Pac

— VM (@myhtopoeic) August 28, 2017

The video shows two males carrying televisions over their heads. It is not clear which store the goods were stolen from.

Houston PD Chief Acevedo tweeted...

Some people thought they'd loot and find themselves in jail thanks to the men and women of @houstonpolice.

— Chief Art Acevedo (@ArtAcevedo) August 27, 2017

And as Blue Lives Matter reports, the city of Houston is facing catastrophic flooding, which looters see as an opportunity. Houston PD Chief ...

Gold Finds a Way: $1315 -$1323 Next -Analysis

As we write this, Gold is on its highs at $1309.90 with room to move. It would seem buyers 2 Fridays ago were indeed trapped longs who likely sold it in the hole last Friday when the market held. We wanted a bull flag to form starting with a selloff early last week, as opposed to the one at week's end, and said as much on Aug 21st;

Ideally, over the next 3-5 days: we wanted to see Gold fill the Comex gap underneath, and in the process shaking out some weak longs and luring some shorts to pile in. First touching the $1285 area, close with a positive settlement on a lower day. Then we could see a nice orderly rally out of a bull flag. But so far that is not the case. Instead we have more buying at the top end of a range that has earmarkings of Friday's behavior.

Our time frame was good. Our order of events was not. The rally / dump 2 Fridays ago did spook us, but last Friday's sell-off and rally undid that. The Comex gap got filled underneath as we wanted, and the market closed positive on the 25th, leaving a tail of sellers trapped below. Happy to be wrong timing wise here about the momo money bailing. from the same post:

If we do not close higher today, they may bail given their gnat-like tolerance in metals. Traders with a 6 month horizon may find themselves annoyed by the funds with a 6 minute horizon right here, right now. We fear the supernova spike/reversal right here and feel the market is much more likely to extend higher on a more sustainable basis if it consolidates a bit here and takes ...

Gilead Has Earned Benefit of the Doubt

When taking a big chance, it helps to have a good track record. Such is the case at Gilead Sciences.

A Surprise Lift From China for U.S. Steel

Signs of incremental progress on steel overcapacity are pushing Chinese steel margins higher for the first time in nearly a decade. U.S. Steel and other western steel firms could benefit.

Evergrande's Ever More Risky Bet on Chinese Housing

A gigantic bet on China's housing market by its biggest property developer seems to have paid off—but only by it putting off a day of reckoning once again.

Energy stocks slammed after hurricane Harvey strikes heart of U.S. oil industry

Deadly Hurricane Harvey struck at the heart of the U.S. oil industry over the weekend, and the effects of the powerful storm and its floodwaters are likely to ripple across the sector for weeks to come.

Project Syndicate: China's PBOC should unwind its ever-more-complicated exchange-rate system

With its latest rules, the central bank has backpedaled on its 2015 transparency, a former Chinese central banker writes.

In One Chart: One look at this chart and even the haters might be tempted to buy some gold

Michael Batnick of the Irrelevant Investor blog readily admits that, when it comes to gold, he's been "a pretty vocal critic of the barbarous relic." So why is he about to buy a bunch of it?

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