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21Sep2017 Market Update: Wall Street Mostly In The Red Slipping From Record Levels, Trump Imposes Fresh Sanctions Against NOKO, WTI Crude Remains In The Mid 50 Handle

Written by Gary

The DOW opened lower and 'scooted' up to a new historical high and has since trended lower (SPY -0.1%). Investors eyeing Apple and the hawkish stance of the Federal Reserve.


Here is the current market situation from CNN Money

North and South American markets are mixed. The IPC is higher by 0.21%, while the Bovespa is leading the S&P 500 lower. They are down 0.40% and 0.11% respectively.

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.

Wall Street slips from record levels as Apple, Fed view weigh

(Reuters) - U.S. stocks slipped from their all-time highs on Thursday, weighed down by Apple and the hawkish stance of the Federal Reserve, which hinted at raising interest rates for a third time this year despite low inflation.

U.S. jobless claims fall; hurricanes still affecting data

WASHINGTON (Reuters) - The number of Americans filing for unemployment benefits unexpectedly fell last week, but the near-term outlook for the labor market was muddied by the continuing impact of Hurricanes Harvey and Irma.

Daimler to invest $1 billion in Alabama plant, create over 600 jobs

BERLIN (Reuters) - Germany's Daimler said it will invest $1 billion to expand its U.S.-based Mercedes-Benz plant in Alabama to start building electric sport-utility vehicles there from about 2020.

Hack of U.S. securities regulator rattles investors, stirs doubts

WASHINGTON/NEW YORK (Reuters) - Wall Street's top regulator faced questions on Thursday about its defenses against cyber criminals after admitting hackers breached its electronic database of corporate announcements and may have used it for insider trading.

Exclusive: Macquarie leapfrogs Goldman to join top tier of commodity banks

LONDON (Reuters) - Australia's Macquarie Group Ltd has overtaken Goldman Sachs to break into the top three banks for commodities business, having significantly expanded its U.S. energy operations in recent years while rivals cut back.

Toys 'R' Us plans holiday hires including toy demonstrators

(Reuters) - Toys "R" Us Inc, the U.S. toy retailer that filed for bankruptcy protection this week, said on Thursday it is hiring part-time seasonal workers to staff its stores for the holidays, including for a new position of toy demonstrator.

Wells Fargo CEO to testify before Senate as questions linger over scandal

WASHINGTON (Reuters) - Wells Fargo Chief Executive Tim Sloan is due to testify before Congress on Oct. 3 as the bank deals with fallout from a sales scandal a year ago that continues to spark new revelations.

Exclusive: Chipmaker GlobalFoundries asks EU to investigate bigger rival TSMC - source

BRUSSELS (Reuters) - U.S. electronic chipmaker GlobalFoundries has asked European antitrust regulators to investigate market leader TSMC , accusing the Taiwanese firm of unfair competition, an industry source said on Monday.

EU eyes solo move to increase tax on online giants, risking U.S. anger

BRUSSELS (Reuters) - The European Commission said on Thursday it may seek to implement tax reform to raise more revenue from online giants without the backing of the United States and other rich nations, in a move that could spark a new transatlantic dispute.

World's Richest Woman Dies Age 94

Alice Walton, of Wal-Mart family infamy, is now the richest woman in the world, as The FT reports Liliane Bettencourt, the heiress of cosmetics giant L'Oreal and world's richest woman, has died at the age of 94.

The FT details that Bettencourt was the daughter of chemist Eugène Schueller, who founded the company in 1909. According to Forbes magazine's ranking of global billionaires, she topped the list of the world's richest women for the second year in a row in 2017 with an estimated net worth of $39.5bn. She stepped down from L'Oreal's board in 2012 following a 17-year tenure, and her shareholding has been under the guardianship of family members since 2011, when a court concluded that she was unfit to look after it herself.

Bettencourt was the richest woman in the world but only the 15th richest person in the world. And with Bettencourt's passing, Wal-Mart's Alice Walton (19th overall in the world) becomes the richest woman in the world...

L'Oreal chairman and chief executive Jean ...

Trump Launches New Sanctions On North Korea Through Executive Order

As Gen. McMaster previewed earlier in the day, moments ago President Trump announced a new executive action that "significantly expands" US authority to target individuals, companies and financial institutions that finance or facilitate trade with North Korea.

"I am announcing a new executive order to sign that significantly expands authorities to target individuals, companies, financial institutions that finance and facilitate trade with North Korea," Trump said.

While details remains scarce, among the notable big picture actions to be taken include:



TRUMP SAYS CHINA'S CENTRAL BANK HAS ORDERED THEIR BANKS TO STOP DOING BUSINESS WITH NORTH KOREA

TRUMP SAYS EFFORT WILL ALSO TARGET NORTH KOREAS SHIPPING, TRADE NETWORKS

The official announcement, which was made just before a United Nations summit with Japanese Prime Minister Shinzo Abe and South Korean President Moon Jae-in.

Here's Trump introducing the new executive order pic.twitter.com/IG0qOO6mRv

— Meg Wagner (@megwagner) September 21, 2017

Japan was happy with the announcement":



JAPAN'S SHINZO ABE WELCOMES NEW ACTION BY UNITED STATES

JAPAN'S ABE: `NEW STAGE OF PRESSURE' AGAINST NORTH KOREA

That said, as discussed earlier, Trump has once again refused to push the boundary too far and anger China, and as a result the president once again refused to implement any oil-linked sanctions, potentially limiting the only trade flow between China and North Korea that matters.

The Fed Balance Sheet Reduction is a Distraction From the REAL Crisis

Everyone is making a big deal about the Fed's so-called "balance sheet reduction" which starts next month.

Let's assess some facts.

First of all, the Fed plans on shrinking its balance sheet by $10-$30 billion per month. The Fed balance sheet is currently $4.5 trillion. So at this pace of unwinding it would take somewhere between 13 and 33 years for the Fed to normalize its balance sheet back to pre-2008 levels.

So the notion that this is significant is off base. It borders on irrelevant.

Second of all, the only reason the Fed is even discussing a balance sheet reduction is because stocks are soaring. The second that stocks begin to correct, multiple Fed officials will appear on TV talking about how it's time to "slow the pace" or even "halt" its balance sheet reduction.

Let's get real here.

The reality is that the stock market is the ONLY thing the Fed can point to as a success. The economy from 2008 to 2016 was in the weakest recovery in 80+ years. Indeed, the Fed has all but given up on the farce that it cares about the economy: yesterday, Fed Chair Janet Yellen herself admitted publicly yesterday that the Fed takes account of "asset prices" when it comes to rate hikes.

In Fed-speak, asset prices=stocks. And that's the #1 focus for the Fed when it comes to monetary policy.

So what does this mean?

The Fed is going to engage in some symbolic shrinking of its balance sheet, but the second things get messy for stocks, the Fed will start walking back this policy.

And THAT opens the door to the REAL crisis.

A crisis of inflation.

The $USD is imploding. It bounced a bit courtesy of the Fed announcement yesterday, but it's in SERIOUS trouble having taken out critical support.

Equifax Accidentally Directs 200,000 Customers To Fake Phishing Website

And the hits just keep coming for Equifax, the once-trusted credit-monitoring firm that has been embroiled in one of the biggest corporate public-relations disasters in recent memory since disclosing that hackers had penetrated its cyber security defenses and absconded with sensitive personal and financial data belonging to 143 million Americans. Because of the types of data that were stolen, including drivers' license, social security and credit-card numbers, experts have described the hack as possibly the most damaging corporate hack yet.

As if this weren't enough to permanently sully the firm's reputation (amid cries of "you had one job!") - the staggering irony of a credit monitoring firm inadvertently divulging the sensitive information that it was supposed to safeguard hasn't been lost on consumers) a series of subsequent disclosures have portrayed the firm's executives as bungling, at best, and nefarious, at worst.

In the nearly two weeks since the story broke...



It was revealed that three of the firm's executives, including its CFO, cashed out of stocks and options worth some $2 million in the month between when the company first learned about the hack, and when it was disclosed to the public. A federal prosecutor in Atlanta has opened a criminal investigation into Equifax that will focus both on whether the firm was criminally negligent in failing to patch a hole in its cybersecurity systems, as well as whether the suspect stock sales constitute securities fraud.

The company's head of cyber security was revealed to have no background in computer science or security - a fact the company tried to hastily cover up by scrubbing her social-media profiles.

Fed Paves the Way for the ECB to Follow

The Federal Reserve's persistence in signaling rising interest rates may help the European Central Bank by tempering the euro's strength.

What Google Wants With HTC's Smartphone Business

Google's $1.1 billion deal with HTC carries risks, but the internet giant needs more scale if it is to maintain its influence in the smartphone business.

What China's Downgrade Signals to Investors

A global rating agency has once again downgraded China, and there is little new information for investors to digest. It may however be worth reading between the lines.

August 2017 Leading Economic Index: Improvement Cycle Continues

Written by Steven Hansen

The Conference Board Leading Economic Index (LEI) for the U.S again improved this month - and the authors suggest that the "While the economic impact of recent hurricanes is not fully reflected in the leading indicators yet, the underlying trends suggest that the current solid pace of growth should continue in the near term".

AMD could be a perfect fit for Tesla

AMD has experience and products like no one else in the industry, says Ryan Shrout.

The Ratings Game: Nvidia investors should 'ignore the noise' about a Tesla-AMD partnership

Nvidia's stock sinks, but analysts say investors should fret over a report that Tesla was working with rival AMD to develop self-driving chips.

The Tell: How the 'great central bank unwind' could ignite the next financial crisis

As the Fed prepares to start slowly paring the size of its $4.5 trillion balance sheet, analysts at Deutsche Bank are warning about could shape up to be the next financial crisis.

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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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