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20Sep2017 Market Update: Wall Street Expects No No Rate Hike From The Fed's, WTI Crude Trends Fractionally Higher To The High 50 Handle

Written by Gary

US stock markets opened higher with the SP 500 and DOW making new historic highs ahead of the FOMC meeting (SPY +0.04%) while the other major indexes were in the red or flat.


Here is the current market situation from CNN Money

North and South American markets are mixed today. The IPC is up 0.09% while the S&P 500 gains 0.04%. The Bovespa is off 0.73%.

Traders Corner - Health of the Market

Looking at the last three columns (below), the first one (Actual), is what was reported this morning. The second column (Forecast) is what analysts had forecast and the third column is the previous report. Full calendar HERE.

What Is Moving the Markets

Here are the headlines moving the markets.

S&P, Dow flat ahead of Fed decision; Apple weighs on Nasdaq

(Reuters) - The S&P and the Dow were little changed on Wednesday but hovered near record levels as investors waited to hear from the Federal Reserve on future interest rate hikes this year while the tech-heavy Nasdaq was pulled lower by a drop in Apple.

Toshiba to sell chip unit to Bain Capital-led group for $18 billion

TOKYO (Reuters) - Japan's Toshiba Corp agreed on Wednesday to sell its prized semiconductor business to a group led by U.S. private equity firm Bain Capital LP, a key step in keeping the struggling Japanese conglomerate listed on the Tokyo exchange.

Pfizer files suit against J&J over Remicade contracts

(Reuters) - Drugmaker Pfizer Inc on Wednesday filed a lawsuit against Johnson & Johnson , saying its rival's contracts with health insurers for blockbuster rheumatoid arthritis drug, Remicade, were anticompetitive and blocked sales of Pfizer's new biosimilar.

How $5 billion of debt caught up with Toys 'R' Us

(Reuters) - Toys "R" Us Inc has been making $400 million in interest payments on its debt every year, largely due to its $6.6 billion leveraged buyout in 2005. This week, it succumbed to its debt burden, leading to the biggest bankruptcy of a U.S. retailer since that of Kmart in 2004.

As Apple slows, fast-moving Chinese rivals gain in wealthy markets

HONG KONG/SINGAPORE (Reuters) - Slowing innovation at iPhone maker Apple gives Asian rivals their best chance yet to conquer developed markets, retailers and consumers say - thanks to better designs and lower prices.

General Mills profit misses as U.S. yogurt sales sour

(Reuters) - General Mills Inc reported a smaller-than-expected quarterly profit as yogurt and cereal sales declined in North America, sending the company's shares down 9 percent to their lowest levels in nearly two years.

Clariant short-sellers squeezed as activist Corvex doubles-down

LONDON (Reuters) - Hedge funds have trimmed bets on a fall in shares of Clariant , just as activist investor Corvex increases pressure on the Swiss chemicals company to ditch a $20 billion M&A deal with rival Huntsman .

UPS expects to hire about 95,000 workers for holiday season

(Reuters) - U.S. package delivery company United Parcel Service Inc said on Wednesday it expected to hire about 95,000 seasonal employees for the upcoming, crucial peak holiday season.

BlackRock's Fink says he is committed to gender parity

NEW YORK (Reuters) - BlackRock Inc Chief Executive Larry Fink on Wednesday said he is committed to gender parity and that his company must mirror customers, especially with a large proportion of household wealth managed by women.

Venezuela's Grim Reaper: A Weekly Report

Authored by Steve H. Hanke of the Johns Hopkins University. Follow him on Twitter @Steve_Hanke.

The Grim Reaper has taken his scythe to the Venezuelan bolivar. The death of the bolivar is depicted in the following chart. A bolivar is worthless, and with its collapse, Venezuela is witnessing the world's worst inflation.

As the bolivar collapsed and inflation accelerated, the Banco Central de Venezuela (BCV) became an unreliable source of inflation data. Indeed, from December 2014 until January 2016, the BCV did not report inflation statistics. Then, the BCV pulled a rabbit out of its hat in January 2016 and reported a phony annual inflation rate for the third quarter of 2015. So, the last official inflation data reported by the BCV is almost two years old. To remedy this problem, the Johns Hopkins - Cato Institute Troubled Currencies Project, which I direct, began to measure Venezuela's inflation in 2013.

The most important price in an economy is the exchange rate between the local currency and the world's reserve currency — the U.S. dollar. As long as there is an active black market (read: free market) for currency and the black market data are available, changes in the black market exchange rate can be reliably transformed into accurate estimates of countrywide inflation rates. The economic principle of Purchasing Power Parity (PPP) allows for this transformation.

Iran's Rouhani Responds To "Rogue Newcomer" Trump's "Ugly, Ignorant Words"

Following President Trump's words yesterday and reports that he has "made his decision" on what to do about the Iran nuclear deal, Iranian President Rouhani just responded to "rogue newcomer" Trump, speaking at The United Nations, and also did not pull any punches...

As he spoke, his words were transcribed into a Tweetstorm...

In text:

We never threaten anyone and we do not tolerate threats from anyone. Unmoved by intimidation our discourse is one of dignity &respect.

Historically backing the oppressed Iran upholds the right of the Palestinian people as it did those of the Jewish people centuries ago.

Iran does not seek to restore its ancient empire; impose its official religion on others; or export its revolution with force of arms.

We opened our doors to engagement & cooperation. Missing this opportunity, some imposed sanctions on themselves and now feel betrayed.

It's disgraceful that the Zionist regime not committed to any intl instrument or safeguard has the audacity to preach peaceful nations.

Iran won't be the first country to violate the agreement but it will respond decisively and resolutely to i ...

FX Traders Haven't Been This Worried About An FOMC Meeting Since Last Year

While equity implied vols are compressed to record lows - what could possibly go wrong with unwinding a $4 trillion balance sheet? - it appears FX traders are a little less sanguine about the market's reaction to today's FOMC decision.

And more specifically, one-day volatility in euro-dollar options surged to the highest level for the day of a Federal Reverse monetary-policy decision this year, suggesting elevated expectations among investors.

As Bloomberg notes, the raised level of the gauge suggests traders see a good chance of the euro breaking out of its recent range should Chair Janet Yellen surprise the markets on the outlook for Fed policy.

The probability of another U.S. interest-rate increase by year-end is over 50 percent, according to the overnight indexed swap curve.

Financialization & The Destruction Of The Real Economy

Authored by Charles Hugh Smith via OfTwoMinds blog,

Strip an economy of capital, productive incentives, talent and yes, ethics, and what are we left with? An economy spiraling toward an inevitable collapse.

Financialization is destroying the real economy, but few in power seem to notice or care. The reason why is painfully obvious: those in power are reaping vast fortunes from the engines of financialization--for example, former President Obama: Obama Goes From White House to Wall Street in Less Than One Year.

This is not to single out President Obama as a special case; politicos across the spectrum depend on the engines of financialization to fund their campaigns and make them multi-millionaires, and corporate managers and financiers have skimmed billions of dollars in gains not from producing new, better and more affordable goods and services but by playing financialization games such as borrowing billions to buy back stocks, leveraged buyouts, and so on--all of which have reaped the insiders gargantuan fortunes while hollowing out the real economy.

Financialization necessarily hollows out the real economy, as Gordon Long and I detail in this new video program: The Results of Financialization - Part I (34 minutes)

The key dynamic is that financialization creates irresistible incentives to ramp up debt and leverage at the expense of the real economy. Those who fail to exploit financializati ...

German Election: For Markets, Wages Are What Matter Most

Angela Merkel appears on course to win a fourth term as Germany's leader. For markets, the political stability allows a focus on more fundamental changes going on in Europe's most important economy.

Thyssenkrupp: A Success Story for European Activism

Thyssenkrupp's move to join its European steel operations with those of Tata Steel paves the way for a more investor-friendly structure but investors shouldn't bank on speedy results.

The Hidden Obamacare Detail That Could Cost Hospitals Billions

A seemingly arcane detail of Obamacare could put significant cost pressure on hospital companies and eventually drug and medical device makers.

August 2017 Headline Existing Home Growth Slows Again

Written by Steven Hansen

The headline existing home sales growth slowed with the authors saying "What's ailing the housing market and continues to weigh on overall sales is the inadequate levels of available inventory and the upward pressure it's putting on prices in several parts of the country". Our analysis of the unadjusted data agrees.

Swiss startup says high-tech water filter can remove bacteria, viruses and plastic

As people unfortunate enough to find themselves in the path of the recent string of hurricanes and other natural disasters scramble to access clean water, a Swiss startup says it has a product that could help.

London Markets: FTSE 100 ends choppy day lower as pound, Fed decision take center stage

U.K. stocks close slightly lower Wednesday as a brief surge in the pound yanks the benchmark FTSE 100 to session lows, but retail shares add to gains after monthly British retail sales leapt past expectations.

'Extremely dangerous' Hurricane Maria makes landfall in Puerto Rico

Puerto Ricans were warned to evacuate or risk their lives as Hurricane Maria barreled toward the U.S. territory, brining life-threatening winds, storm surges and rainfall.

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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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