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05Sep2017 Market Update: Wall Street Lower As North Korea Tensions Rise, Orders For US Made Goods Recorded Their Biggest Drop In Nearly Three Years, WTI Crude Trading In The High 48 Handle

Written by Gary

US stock markets were sharply lower in early afternoon trading (SPY -1.0%), with the DOW shedding more than 250 points as tensions around NOKO continued to weigh.


Here is the current market situation from CNN Money

North and South American markets are lower today with shares in U.S. off the most. The S&P 500 is down 0.97% while Mexico's IPC is off 0.66% and Brazil's Bovespa is lower by 0.22%.

What Is Moving the Markets

Here are the headlines moving the markets.

United Tech defends $23 billion Rockwell deal as shares slide

NEW YORK (Reuters) - Aerospace and industrial company United Technologies Corp defended its $23 billion acquisition of avionics maker Rockwell Collins Inc on Tuesday, saying it would yield cost savings and not force it into quick sales of other big businesses.

U.S. factory orders post biggest drop in nearly three years

WASHINGTON (Reuters) - New orders for U.S.-made goods recorded their biggest drop in nearly three years in July, but orders for capital goods were stronger than previously reported, pointing to a faster pace of business spending at the start of the third quarter.

Wall St. lower as North Korea tensions weigh

(Reuters) - U.S. stocks were lower in late morning trading on Tuesday, with the Dow Jones Industrial Average shedding more than 150 points as tensions around North Korea continued to weigh.

Exclusive: Western Digital offers to exit Toshiba chip bid for better JV terms

TOKYO (Reuters) - Western Digital Corp has offered to drop out of a group bidding for Toshiba's coveted flash memory chip business to take a stronger position in their joint venture instead, two sources familiar with the matter said on Tuesday.

Exclusive: EPA eyes limits for agricultural chemical linked to crop damage

(Reuters) - The U.S. environmental agency is considering banning sprayings of the agricultural herbicide dicamba after a set deadline next year, according to state officials advising the agency on its response to crop damage linked to the weed killer.

L.A. Times, Chicago Tribune owner buys New York Daily News

(Reuters) - Newspaper company Tronc Inc , which owns the Chicago Tribune and the Los Angeles Times, said it acquired the New York Daily News from media and property mogul Mort Zuckerman.

Exclusive: Under pressure, Hyundai clashes with China partner over suppliers - sources

BEIJING/SEOUL (Reuters) - Hyundai Motor Co is at loggerheads with its Chinese partner over efforts to cut supplier costs, as they grapple with cut-throat competition and the impact of a stand-off between Beijing and Seoul, four people familiar with the dispute said.

Florida insurers shares tumble as Hurricane Irma looms

(Reuters) - Shares in Florida home insurers such as Heritage Insurance Holdings tumbled on Tuesday as investors braced for losses as Hurricane Irma appeared set to hit the state on Saturday.

Facebook takes the next step to monetize WhatsApp: WSJ

(Reuters) - Facebook Inc is gearing up to make money from WhatsApp, the messaging service used by more than a billion people every day, the Wall Street Journal reported on Tuesday.

Latest NAFTA Talks End In Disappointment As Attendees Question Lack Of U.S. Engagement

President Trump has threatened a quick termination of NAFTA a countless number of times, with the latest coming just last weekend via twitter:

We are in the NAFTA (worst trade deal ever made) renegotiation process with Mexico & Canada.Both being very difficult,may have to terminate?

— Donald J. Trump (@realDonaldTrump) August 27, 2017

Of course, like with most Trump deals, it's often very difficult to differentiate between bombastic rhetoric utilized for establishing negotiating power and actual desired results. According to Bloomberg, so far the speed of U.S. negotiations, led by Trade Representative Robert Lighthizer, have failed to live up to the President's rhetoric leaving many to question whether a "deal" is the desired outcome for this administration.

The latest Nafta talks are nearing conclusion without a major breakthrough or agreements on even the least-contentious topics, officials familiar with the negotiations say, fueling doubts among observers that a deal can be reached this year.

U.S. Trade Representative Robert Lighthizer is scheduled to speak publicly alongside Mexican Economy Minister Ildefonso Guajardo and Canadian Foreign Minister Chrystia Freeland Tuesday to conclude the second round of talks toward a new North American Free Trade Agreement. Their appearance will cap a five-day session in Mexico City.

While negotiators have made some progress, they have yet to agree on any major contentious issue and are far from a ...

Does Government Spending Create More Economic Growth? (Spoiler Alert: No, Silly!)

Authored by Frank Shostak via The Mises Institute,

After the 2007-2009 global financial crisis, fears of ballooning public debt and worries about the drag on economic growth pushed authorities in some countries to lower government spending, a tactic that economists now think may have slowed recovery. Note that in the United States the total debt to GDP ratio stood at 349 in Q1 this year.

In a paper presented at the Kansas City Federal Reserve's annual economic symposium on August 26 2017, Alan Auerbach and Yuriy Gorodnichenko from the University of California suggested that "expansionary fiscal policies adopted when the economy is weak may not only stimulate output but also reduce debt-to-GDP ratios". (Fiscal Stimulus and Fiscal Sustainability, August 1,2017, UC - Berkley and NBER).

Some commentators are of the view that these findings may be welcome news to central bankers who face limited options of their own to combat a future downturn, given existing low interest rates and low inflation rates in their economies. "With tight constraints on central banks, one may expect — or maybe hope for — a more active response of fiscal policy when the next recession arrives," the University of California researchers wrote.

These findings are in agreement with Nobel Laureate in economics Paul Krugman, and other commentators that are of the view that an increase ...

Furious North Korea Slams US As "Heinous Aggressor Who Is Begging For War", Vows To "Respond In Our Own Way"

North Korea said Tuesday it will "respond in our own ways" to any new sanctions that may be put in place following Pyongyang's latest nuclear test.

According to Yonhap, In a Q&A session with the state-run Korean Central News Agency, the North Korean foreign ministry spokesman blasted the United States for leading the international efforts to adopt a fresh sanctions resolution. Flipping the table on Nikki Haley's Monday Statement that North Korea is begging for war, North Korea said that it was the US that a "heinous aggressor who is begging for war."

"Testing an H-bomb for an intercontinental ballistic rocket is a normal process that we must carry out to accomplish our policy of byongjin," the spokesman said, referring to the North's signature policy of seeking nuclear armament and economic development.

"In the face of the U.S. scheme of putting pressure through sanctions, we'll respond in our own ways," he added. "And the U.S. will be fully responsible for the catastrophic consequences that follow."

KCNA also said that the US "should not forget even for a moment about the presence of the DPRK, the full- fledged nuclear power in possession of ICBM as well as A-bomb and H-bomb"

As a reminder, the U.S. and South Korea reportedly want new sanctions to include a cutoff of oil supplies to the North, though China appears reluctant to take a measure that it worries would lead to the collapse of its neighbor.

Earlier on Tuesday, North Korea said its recent missile launch and other "self-defense" measures were a "gift package" to the United States and warned other such gifts are on the way if Washington continues its "reckless provocations."

"The recent self-defense measures by my country, the DPRK, are a gift package addressed to none other than ...

A Jobs Pause That Refreshes

If payroll growth is indeed cooling, then the Federal Reserve can focus on hard data without worrying about labor market slack and could well be on hold for the rest of 2017.

Meg Whitman Has a Different Mess to Clean Up

Hewlett Packard Enterprise faces many challenges, including earnings next week and the question of why its CEO was looking elsewhere.

Wait Before Investing in Music Industry's Recovery

Upbeat results from the world's largest music company aren't enough to make parent company Vivendi an appealing investment.

July 2017 Manufacturing New Orders Decline

Written by Steven Hansen

US Census says manufacturing new orders slowed. Out analysis agrees - but the rolling averages improved..

August 2017 Conference Board Employment Index Growth Rate Accelerates

Written by Steven Hansen

The Conference Board's Employment Trends Index - which forecasts employment for the next 6 months improved with the author's saying "While Friday's job numbers were slightly disappointing, the ETI does not provide any indication of slowing employment growth".

Market Extra: On its first anniversary as a stock-market exchange, IEX draws both critics and praise

A year after becoming a full-fledged exchange platform, IEX Group Inc. still finds itself a maverick stock-trading venue attempting to disrupt a clubby, entrenched Wall Street system.

Meet the new real estate cycle sector that plays offense and defense

Real estate investment trusts that buy single-family houses for rent have the economic and market fundamentals that analysts prize

Apple will tap the debt market yet again — and this deal will include a 30-year bond

Apple Inc. is back in the corporate bond market Tuesday, funding share buybacks with a five-part debt deal that includes 30-year maturities.

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gary@econintersect.com

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