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15Sep2017 Market Close: Wall Street Touched Intra-day Record Highs, Oil Marks Biggest Weekly Gain Since July But Crude Prices Ended Flat

Written by Gary

US stock markets celebrated new historic highs and the SP 500 closed above 2,500 for the first time helped by technology stocks bouncing back after two days of declines.

Todays S&P 500 Chart

Baker Hughes Rig Count: U.S. -8 to 936 rigs

U.S. Rig Count is down 8 rigs from last week to 936, with oil rigs down 7 to 749, gas rigs down 1 to 186, and miscellaneous rigs unchanged at 1.

U.S. Rig Count is up 430 rigs from last year's count of 506, with oil rigs up 333, gas rigs up 97, and miscellaneous rigs unchanged at 1.

The U.S. Offshore Rig Count is up 1 rig from last week to 17 and down 3 rigs year-over-year.

The Market in Perspective

Here are the headlines moving the markets.

Wall Street hits record high, S&P 500 teases 2,500-mark

(Reuters) - Wall Street touched intra-day record highs on Friday, with the S&P 500 approaching the 2,500 mark as technology stocks bounced back after two days of declines.

Hurricane Harvey slams U.S. retail sales, industrial output

WASHINGTON (Reuters) - U.S. retail sales unexpectedly fell in August and industrial output recorded its biggest drop since 2009 as Hurricane Harvey disrupted activity, suggesting the storm could dent economic growth in the third quarter.

Rising credit card delinquencies to add to U.S. banks' worries

(Reuters) - U.S. banks, already under pressure from slower loan growth and low interest rates, could be facing yet another challenge as a rising number of Americans fall behind on their credit card payments.

Drug industry on tenterhooks as Maryland price-gouging law nears

(Reuters) - As U.S. consumer outrage grows over prescription drug prices, state authorities and patient advocates in Maryland are preparing to enforce the nation's first law designed to punish drugmaker price-gouging.

Morgan Stanley to handle mortgage originations in home-loan push: sources

(Reuters) - Morgan Stanley plans to bring its mortgage origination business in-house to improve customer service and generate more business, two people familiar with the matter told Reuters on Friday.

Exclusive: Canada sought to resolve Boeing military, trade disputes at meeting - sources

OTTAWA/MONTREAL (Reuters) - Canada last month attempted to end a deepening dispute with Boeing Co by suggesting it could withdraw a threat not to buy Super Hornet jets if the U.S. firm dropped a trade challenge against Canadian planemaker Bombardier Inc , three people with knowledge of the matter told Reuters.

Bitcoin bounces 20 percent after dipping below $3,000

LONDON (Reuters) - Bitcoin bounced by more than 20 percent in the space of just four hours on Friday, having skidded below $3,000 earlier as Chinese authorities ordered Beijing-based cryptocurrency exchanges to stop trading.

Ahead of Brexit, tax perks tempt Italian bankers back to la dolce vita

LONDON/MILAN (Reuters) - Italian financiers who handle some of their country's biggest deals out of London are moving to Milan, lured by bumper tax breaks at a time of deep uncertainty about Brexit, sources familiar with the plans said.

Accenture sees 'secular downward' trend in bank fees

SAO PAULO (Reuters) - Bank's services fees face "secular downward" pressure in the long run, which will drive lenders back toward credit transactions whose margins are resilient to competition and new technologies, a senior executive at management consultants Accenture Plc said.

UK Terror Threat Level Raised To "Critical": Another Terrorist Attack May Be Imminent

British Prime Minister Theresa May has raised the country's threat level to "critical" from "severe" following today's subway explosion attack at Parsons Green tube station in south-west London. A "critical" level typically means that the British government believes a terrorist attack is imminent.

Theresa May says UK terror threat level raised to critical, highest possible level, after London Tube blast https://t.co/HCBPJZo8XY pic.twitter.com/liMAODY2IV

— BBC Breaking News (@BBCBreaking) September 15, 2017

As reported earlier in the day, at about 8 AM local time, a homemade bomb was detonated in a London metro station, injuring approximately 30 people. Following the bombing, Westminster raised the national threat level to "severe." Now, it has been raised again to "critical," the highest threat level possible.

The escalation in the terror level comes shortly after the Islamic State claimed responsibility for an explosion at the Parsons Green underground station in London which injured 22 people on a packed rush hour train. The claim was made through its propaganda wing, the Amaq News Agency, stating that an IS "detachment" was responsible for the blast.

Police have launched a manhunt for a suspect thought to be behind the attack, which they have identified through CCTV footage. British Prime Minister Theresa May condemned the "cowardly" attack "intended to cause significant harm." She announced the deployment of more armed police around the London's transport network.

< ...

Hundreds Of Tanks And Howitzers From The United States Arrive In Poland

One day before Russia kicked off its "Zapad 2017" military exercise, dubbed the "biggest display of Russian military power since the end of the Cold War", on September 13 American military equipment arrived in the port of Gdansk, Radio Poland reports, where more than a thousand pieces of American military equipment from the Second Anti-tank Brigade Combat Team were unloaded at the port, including Abrams tanks, Bradley combat vehicles, Paladin howitzers and other combat equipment. This is the first shipment of equipment to arrive in Poland under the initiative Operation Atlantic Resolve according to UA Wire.

According to the General Commander of Poland's Armed Forces, General Jaroslaw Mika, the equipment will be used during military exercises.

"This military equipment, which we see today, will be located in the western part of Poland. I mean, first of all, in such areas as Boleslawiec, Zagan, Torun, Swietoszow, and Skwierzyna. This equipment will be used in various maneuvers and training. This is a brigade fighting group. At this point, I want to emphasize the scale of the Dragon 17 exercises. This is 17,000 soldiers from 11 countries. I think that these figures are quite impressive if we are speaking about the activity of the NATO member countries, as well as the use of America's potential," he said.

On Thursday, the first train with American weapons departed for the place of permanent deployment.

The goal of Operation Atlantic Resolve,

"You Should Take The Fed At Their Word"

Authored by Wolf Richter via WolfStreet.com,

Flip-flopping killed its credibility. That's a problem for the markets.

"They're getting more worried about the negative consequences of QE": Fitch Chief Economist

The markets have been brushing off the Fed and have done the opposite of what the Fed has set out to accomplish. The Fed wants to tighten financial conditions. It's worried about asset prices. It's worried that these inflated assets which are used as collateral by the banks, pose a danger to financial stability. It has mentioned several inflated asset classes by name, including commercial real estate, which backs $4 trillion in loans heavily concentrated at regional banks.

And yet, markets have loosened financial conditions since the Fed started its tightening cycle in earnest last December.

Markets are hiding behind "low" inflation, when the Fed is focused on asset prices.

So longer-term yields have been falling even as short-term yields have moved up in line with the Fed's target rate, and thus the yield curve has flattened. The dollar has been falling. Equities have been soaring to n ...

Yesterday's "Watershed" Central Bank Announcement Which Everybody Missed

In what may have been a watershed moment in monetary policy - which awkwardly was missed by almost everyone as a result of the concurrent launch of the latest North Korean ballistic missile which immediately drowned out all other newsflow - late on Thursday, the Bank of Canada held a conference on inflation targeting and monetary policy titled "Bank of Canada Workshop "Monetary Policy Framework Issues: Toward the 2021 Inflation-Target Renewal" in which, in a stunning shift of monetary orthodoxy, BoC Senior Deputy Governor Carolyn A. Wilkins said that Canada was open to changes in the BoC mandate.



WILKINS: OPEN TO LOOKING AT `SENSIBLE' ALTERNATIVES TO MANDATE

Or in other words, lowering or outright abolishing the central bank's inflation target, or explicitly targeting financial conditions and asset prices.

While still early in the process, the BOC may be setting a precedent, one which other DM central banks may have no choice but to follow: If the Bank of Canada is going to look at alternatives to their mandate (with an emphasis on inflation), it - as several trading desks have suggested - could become the first central bank to officially change its mandate to reflect financial conditions that are too loose in the context of the current low r-star lowflation environment.

In practical terms, this would mean that instead of seeking chronically easier conditions to hit legacy inflation targets around ~2.0% while inflating ever greater asset bubbles, one or more central banks could simply say that 1.5% (or less) is sufficient for CPI and call it a day, in the process soaking up record easy financial conditions and bursting countless asset bubbles. In the context of a "new supply paradigm" in retail (where even FOMC members now blame Amazon for lack of inflation) and ...

Why P&G Investors Should Want Nelson Peltz on the Board

After some serious missteps, the once irreproachable consumer-goods giant has lost the right to say: Just trust me.

Why U.S. Consumers Are Feeling Spent

The weak August retail sales report reflects the limited wherewithal Americans have to spend more.

Drug Stocks Benefit from the Sound of Silence

A movement to crack down on high drug prices appears to have fizzled, giving stock prices a lift.

What this past week taught us about investing in stocks

Don't always follow the herd when trading around big events, such as Hurricane Irma and the iPhone launch, advises Nigam Arora.

Market Extra: Bitcoin needs to be worth $1,000,000 to be a legitimate currency

Think bitcoin has been in bubble territory? You ain't seen nothing yet, as the cryptocurrency needs to surge about 300 times it value over the next several years to be considered a legitimate currency or risk retreating into obscurity and obsolescence, says one industry expert.

Futures Movers: Oil marks biggest weekly gain since July

Oil prices ended flat on Friday, but marked their biggest weekly gain since late July.

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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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