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06Sep2017 Market Close: Wall Street Bounces Back As Energy, Financials Lead, DOW Up 54 Points, WTI In Limbo In The Low 49 Handle, Irma Is Going To Wreak Havoc In Fla

Written by Gary

US stock markets climbed today (SPY +0.3%), lifted by energy and financial's and to extend the National debt limit. Disappointing data this morning was trump'd by some de-escalation with NOKO.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Wall St. bounces back as energy, financials lead

(Reuters) - Wall Street climbed on Wednesday, fueled by energy and financial shares and helped by news of an agreement to extend the debt limit, as stocks bounced back modestly from a day-earlier selloff.

Fed sees pickup in economic growth, but inflation remains muted

WASHINGTON (Reuters) - The U.S. economy expanded at a modest to moderate pace in July through mid-August but signs of an acceleration in inflation remained slight, the latest survey conducted by the Federal Reserve showed on Wednesday.

U.S. services sector growth accelerates; trade deficit edges up

WASHINGTON (Reuters) - U.S. services sector activity accelerated in August amid strong gains in new orders and employment, suggesting that a slowdown in job growth last month was probably temporary.

Madoff trustee recoups $687 million in biggest settlement since 2011

NEW YORK (Reuters) - The trustee recovering money for Bernard Madoff's victims on Wednesday announced his biggest settlement in six years, recouping $687 million from an Irish fund that began sending client money to the imprisoned Ponzi schemer in the 1990s.

Goldman suspends work on U.S. IPO of HNA's Pactera unit: sources

HONG KONG (Reuters) - Goldman Sachs has suspended its preliminary work on a planned U.S. initial public offering (IPO) for Chinese conglomerate HNA Group's IT outsourcing unit Pactera, four people familiar with the matter told Reuters.

Ackman's hedge fund to sell out of Nomad Foods after two-year run

BOSTON/LONDON (Reuters) - Billionaire investor William Ackman has decided to exit his large stake in Nomad Foods, selling out of one of his handful of investments at a time he is waging a proxy fight to push for change at another portfolio company.

U.S. Senate panel to look at self-driving commercial trucks

WASHINGTON (Reuters) - The U.S. Senate Commerce Committee plans a hearing next Wednesday on the future of self-driving commercial trucks that will include the chief executive of Navistar International Corp and safety advocates.

China's Anbang, HNA had sights set on insurer Allianz: sources

HONG KONG (Reuters) - China's Anbang Insurance Group and HNA Group both considered buying into German insurer Allianz SE this year as part of plans to become global financial powerhouses, people with direct knowledge of the matter said.

Lower Saxony premier candidate calls for outsider as next VW boss

HANOVER, Germany (Reuters) - Someone from outside the auto industry should succeed Volkswagen chief executive Matthias Mueller, the man expected to lead the German state which is the carmaker's second-biggest shareholder told Reuters on Wednesday.

Stocks Pop, Gold Drops After 'Calmed' Korea, Debt-Ceiling Delay, & Dismal Data

Disappointing Data this morning was trump'd by some de-escalation with North Korea and a short-term debt-ceiling can-kicking - stocks rallied, bonds & bullion leaked lower, and the dollar was unable to get back into the green...

The biggest headlines of the day came out of DC (as usual) with Trump seeming to de-escalate his rhetoric with North Korea (prompting a drop in gold)...

And then Trump acquiescing to Democrats' demands on the debt-ceiling, sending gold lower and crushing October bill yields...

However, it merely kicked the can from October bills...

to December bills...

Some context for today's bounce however...

Hurricane Irma Could Destroy Oil Demand

Authored by Nick Cunningham via OilPrice.com,

About half of the shuttered refining capacity along the Gulf Coast could be back up and running by Thursday, assuaging concerns about the possibility of acute gasoline shortages in much of the U.S.

The disruptions of more than 4 million barrels per day of refining capacity have been cut in half, with major refineries restarting operations in Corpus Christi and Houston. ExxonMobil is ramping up operations at its Baytown facility, the second largest in the country. Valero Energy brought two refineries in Corpus Christi and Texas City back online, with another large one in Port Arthur scheduled to resume operations soon.

The massive Motiva refinery - the largest in the country with 600,000 bpd of capacity - is still offline, but is getting closer to resuming operations. The large volume of restarts led to a spike in crude oil prices on Tuesday, with WTI up more than 3 percent. Gasoline futures fell back as the Colonial Pipeline restarted shipments.

Goldman Sachs predicts that as of Thursday, half of the shuttered refining capacity will have resumed.

But what about the rest? An estimated 1.4 mb/d could remain offline through mid-September at least, the investment bank predicts. Goldman says the lingering effects will be "modestly bearish," projecting a 40-million-barrel increase in crude oil inventories. But the quick comeback of some larger refineries led Goldman to lower its projected demand impact from -750,000 bpd in the first month after the storm to just -600,000 bpd.

However, the effects could actually become slightly bullish over time as t ...

Here's How Much Your Credit Score Is About To Crash If You're In Hurricane Irma's Path

If you count yourself among the unlucky residents of Southern Florida where Hurricane Irma looks likely to make her continental U.S. landfall, you may want to take notice of a new study just published by Kelly Edmiston of the Federal Reserve Bank of Kansas City which details the devastating toll that hurricanes can take on your hard-earned credit score.

Edmiston's study, entitled "Financial Vulnerability and Personal Finance Outcomes of Natural Disasters," limited its analysis to the effects of category-1 storms but still found that credit scores are typically crushed by 50 points for the average household and even more for families that are already on weaker financial footing before storms roll through.

In general, the results suggest that those who are financially better prepared for a natural disaster tend to have better financial outcomes. The cumulative effect of the interaction variables is significant, even for relatively mild storms Tracts with low share of the population with unpaid bills (arbitrarily set at 1 percent), the aggregate effect of a category 1 hurricane on credit score was a reduction of 16.2 percent. For a tract with an especially high rate of unpaid bills (arbitrarily set a 5 percent), the effect is strikingly larger in magnitude at -81.2 points. The median (3.09 percent) yields an average reduction in credit score of 46.4 points. Thus, half of tracts affected by category 1 hurricanes saw an average reduction in credit score of more than 46.4 points. This result would drop an average credit score of 700 to just over 650, which would likely significantly affect credit terms on a new loan. These cumulative effects were significantly higher than expected ex-ante. Results from Specification 2 s ...

Dow Jones Changes "Hoax" Index Divisor For First Time In 2 Years

For the first time in two years, the owners of the Dow Jones Industrial Average have changed the benchmark's divisor, the number used to determine how moves in the share prices of individual Dow components affect the level of the index.

The new divisor is now 0.145233969 from 0.146021281. With the new divisor, a $1 price move in any Dow component will translate to a swing in the level of the Dow between 6.8854 and 6.8483 points.

MarketWatch reminds us, is a price-weighted index, which means its level is decided by the absolute price changes in its component shares, not percentage-point swings like other indexes.

Here's a more in-depth explanation of how the divisor works, from MarketWatch.

"The so-called divisor, or in this case multiplier, is the figure used to determine the influence of any of the 30 components that make up the price-weighted Dow industrials.

The Dow isn't exactly an average of its components, as its name might imply; instead, the value of the Dow is determined by calculating the sum of the prices of its components using a divisor that factors when a company splits its shares. Stock splits can swing the balance of influence for any one blue-chip component."

The latest change in the di ...

Harvey's Destroyed Cars Give Auto Industry Hope

Why insurers' losses from Hurricanes Harvey and Irma could be Detroit car makers' gains.

China's Most Dangerous Bank

Investors love China Merchants but the bank looks vulnerable as Beijing cracks down on aggressive tactics.

United Technologies's Big Bet Leaves Investors on the Runway

United Technologies' deal to buy Rockwell Collins will create an airplane parts supermarket. Benefits to shareholders aren't clear.

Trump Today: Trump Today: President stuns Republicans, delights Democrats by agreeing to brief debt-ceiling deal as he eyes Hurricane Irma

President Trump sided with Democrats to back a temporary increase in how much the U.S. can borrow, spoke to the Chinese president over the North Korean nuclear threat and prepared to respond to a massive hurricane, Irma, threatening the East Coast.

Your Digital Self: This vaccine could help stem the opioid-addiction epidemic

It works on lab animals by preventing opioid molecules from entering the brain, as Jurica Dujmovińá explains.

MarketWatch First Take: Trump's deal with 'Chuck and Nancy' may improve chances for his legislative agenda

The surprise debt-ceiling deal reached Wednesday may represent a small step by President Donald Trump in moving toward his real legislative aims: cutting taxes, putting up a border wall and increasing infrastructure spending.

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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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