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26Sep2017 Market Update: Wall Street Slips On Mounting North Korea Tensions, Crude Is Back In A Bull Market, But China Is Slowing Down, Investors Wait Fed Chair Janet Yellen's Speech

Written by Gary

US stock market indexes are in the green (SPY +0.1%) as U.S. consumer confidence falls; new home sales hit eight-month low. Large caps flat and the small caps fairing moderately better.


Here is the current market situation from CNN Money

North and South American markets are mixed today. The Bovespa is up 0.36% while the S&P 500 gains 0.05%. The IPC is off 0.12%.

What Is Moving the Markets

Here are the headlines moving the markets.

U.S. consumer confidence falls; new home sales hit eight-month low

WASHINGTON (Reuters) - U.S consumer confidence fell in September and home sales dropped to an eight-month low in August due to the impact of Hurricanes Harvey and Irma, supporting the view that the storms would hurt economic growth in the third quarter.

Wall St. slips on mounting North Korea tensions

(Reuters) - U.S. stocks gave up early gains on Tuesday as rising tensions between the United states and North Korea weighed, while investors awaited Fed Chair Janet Yellen's speech for more clarity on interest rate hikes.

U.S. homes in on NAFTA labor, investment as top officials join talks

OTTAWA (Reuters) - Talks to modernize NAFTA kick into higher gear on Tuesday when top officials from Canada, the United States and Mexico join the negotiations in Ottawa where the U.S. is expected to propose draft text on labor, investment and intellectual property.

Fed's Brainard: Labor market disparities reducing U.S. economy's potential

WASHINGTON (Reuters) - Labor market disparities in the U.S. economy are curbing the nation's long-run potential growth, Federal Reserve Governor Lael Brainard said on Tuesday, as she urged the central bank to undertake more research to help diminish inequality.

Toyota to invest $373.8 million in five U.S. plants

(Reuters) - Toyota Motor Corp said on Tuesday it would invest $373.8 million in five manufacturing plants in the United States to produce its first American-made hybrid powertrain, as it looks to build more vehicles in the market which it sells.

Commerce Secretary Ross tells China to guarantee fairness for U.S. firms

BEIJING (Reuters) - U.S. Commerce Secretary Wilbur Ross said China needed to "guarantee fair and reciprocal treatment for U.S. firms" as he tried to strike an upbeat tone on a visit to Beijing amid trade tensions between the two countries.

U.S. companies urge EU to refrain from unilateral moves on Web tax

BRUSSELS (Reuters) - The European Union's plans to increase taxes on digital firms risks undermining the bloc's growth and stifle global efforts to find common solutions, U.S. companies operating in the EU said on Tuesday.

Uber to withdraw from Quebec

TORONTO (Reuters) - Ride-hailing service Uber Technologies Inc [UBER.UL] said on Tuesday that it will stop operating in the Canadian province of Quebec next month, pulling out to avoid following tough new regulations announced last week.

Western Digital to seek injunction to block Toshiba's $18 billion chip unit sale

TOKYO (Reuters) - Western Digital Corp said on Tuesday it will seek an injunction to block the sale of Toshiba Corp's prized semiconductor business to a rival group, upping the ante in an acrimonious battle with its chip venture partner.

NFL Posts Job Ad For "Crisis Communications Strategist" To Advise League Executives

As the NFL's feud with President Trump continues to dominate headlines, a feud which has effectively turned ESPN into a politically-themed talk show, the league has decided to recruit additional talent to "provide crisis communications counsel to leagues executives." Per a job listing posted to Daybook, the NFL says they're looking for a "Senior Communications Strategist" to be based out of New York City who can assist with "crisis communications" and "devise a strategy and long term vision to strategically position the NFL in the sports marketplace." Here are some highlights:

Responsibilities:

The senior communications strategist will be responsible for proactively developing plans and strategies aimed at publicly positioning the NFL to key audiences through all communication channels, both traditional and emerging media. They will work closely with communications department leadership to create messaging to reflect the league's wide variety of priorities and expedite organizational decision-making.

Additionally, the strategist will:



Provide crisis communications counsel to leagues executives.

Devise strategy and long term vision to strategically position the NFL in the sports marketplace.

Provide guidance to senior leadership, including executive vice presidents and COO to achieve desired reputational results and develop metrics to measure success.

Uber To Cease Operations In Quebec

Just days after Uber lost its license to operate in London, the online ride-hailing service that has been at the centre of various controversies and scandals for the past year, announced it would cease operations in Quebec as of Oct. 14. According to the Montreal Gazette, the final straw for Uber, which has been negotiating with the Quebec government for months in an effort to co-exist with the taxi industry, reportedly was a government demand that its drivers submit to a 35-hour training program already imposed on taxi drivers.

Montreal #uber GM Jean-Nicolas Guillemette says the company can't operate under the new rules the province wants. Last day Oct 14. pic.twitter.com/SepE3u2Z0d

— Jason Magder (@JasonMagder) September 26, 2017

Uber reportedly felt such a program was incompatible with its business model, which relies on part-time drivers who would presumably not be ready to undertake the course. Other government demands included mandatory vehicle inspections every 12 months and background checks on drivers performed by police rather than a private firm.

In short, all hurdles that the company decided were a dealbreaker for its future operations.

As the Gazette adds, the stage seemed to be set for some kind of push back from Uber last Friday, after Quebec Transport minister Laurent Lessard announced the new conditions, describing them as merely an extension of a year-old pilot project permitted under the current rules.

That led Uber Quebec spokesperson Jean-Christophe de le Rue to accuse the government of adh ...

Trump Will Visit Puerto Rico To "Survey Damage" As Locals Plead For Aid: "We Are Americans Too"

President Trump announced on Tuesday morning that he will travel to Puerto Rico next week to survey damage from Hurricane Maria, however he said that next Tuesday is the earliest he is able to travel to the island due to the damage. Trump said the island is "literally destroyed" but expressed confidence "they'll be back." He said the people of Puerto Rico "are important to all of us."

.@POTUS: "Puerto Rico is very important to me...These are great people and we have to help them." pic.twitter.com/bnBjyILJQr

— Fox News (@FoxNews) September 26, 2017

And while Trump added that federal authorities are landing relief supplies "on an hourly basis", Trump's act may come as too little, too late for some of the locals, who felt the urge to remind the White House they are also Americans. That's just what Governor Ricardo Rossello and the commonwealth's government have done, over and over, in the wake of Hurricane Maria. "There needs to be unprecedented relief for Puerto Rico so that we can start the immediate effort right now," Rossello said Tuesday on MSNBC.

As Bloomberg writes, Puerto Rico, an island of 3.4 million American citizens without a vote in Congress, is lobbying Washington for what could be billions in funding to rebuild its infrastructure, including its decimated energy grid. And it's doing so amid an already costly hurricane season.

The island was crawling with 10,000 federal relief workers who were conducting search-and-rescue missions, helping bring electricity to hospitals, and providing aid packages, baby food and more. But with the Washington visitors on hand, Rossello's team missed no opportunity to remind them of why ...

Trump Tax Plan Latest Leak: Lowest Tax Rate Rises To 12%, But Standard Deduction Doubles

Continuing the recent flurry of leaks of the Trump tax plan set to be unveiled tomorrow, Axios reports that "GOP leaders have agreed to raise the lowest individual tax rate from 10 to 12 percent, paired with doubling the standard deduction."

As previously leaked, the plan will also collapse the number of brackets from seven to three, while the standard deduction is set to almost double to $12,000 for a single filer and $24,000 for married couples, which means that Trump can correctly argue that many more low income earners would pay no tax under his plan. Also, as previously noted, the top tax bracket would fall from 39.6% to 35%.

According to Axios, Trump plans to sell the proposal tomorrow as a populist "tax cut" but notes that "as recently as yesterday top Republicans on Capitol Hill were nervous as they got word that Trump wasn't entirely thrilled with the product that had been hashed out in immense secrecy for weeks with two members of his administration, Gary Cohn and Steven Mnuchin, working with GOP leaders." However, that changed last night when Trump reportedly has come around to supporting the framework, "despite his misgivings about the corporate rate not being low enough and about the political risks of raising the lowest rate."

The bottom line is that many more people will now pay no tax because of the increased deduction, which will allow Trump to pitch the proposal as a tax cut for the middle class as well as for the wealthy.

It was not immediately clear what the projected impact on the budget deficit will be as a result of said tax cut for both the middle class, for the highest earners, and for corporations and "pass thru" entities.

A Tax Cut's Unintended Consequences

What a tax cut could give the economy the Federal Reserve could take away. Republican leaders on Wednesday are expected to release a tax plan that would lower tax rates on individuals and corporations and allow companies to repatriate earnings held overseas at a low rate.

Why Emerging Markets Aren't Too Hot to Handle

The Fed's apparent desire to push on with tightening policy may give emerging markets a pause. But if global growth continues, then a pause is all it should be.

Why Biotech's Retreat Won't Be as Dramatic This Time

The failure of a high-profile clinical trial to treat Alzheimer's disease means that the biotech market is about to get a big test. But Axovant's stock meltdown is unlikely to spread.

The Tell: Here's why the stock market is still the 'cleanest dirty shirt'

Global equities are far from overpriced, say analysts at Barclays, though they admit to being "uncomfortably bullish."

Europe Markets: European stocks close mixed as euro weakens

European stocks end mixed on Tuesday as the euro softened a second straight session following Germany's general election on Sunday and as traders get the first opportunity to react to the latest threat of armed conflict in the Korean Peninsula.

: Now that the 'smart money' has stopped selling hot tech stocks, look for a bounce

Look most closely at AMD, Facebook and Apple, writes Nigam Arora.

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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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