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29Sep2017 Open Market Commentary: Wall Street Slips, Crude Prices In The Mid 51 Handle, US Dollar Falling Rapidly

Written by Gary

US markets opened fractionally lower (SPY -0.1%) and new highs are not out of the question later in the session.


Here is the current market situation from CNN Money

European markets are mixed today. The FTSE 100 is up 0.58% while the DAX gains 0.37%. The CAC 40 is even.

What Is Moving the Markets

Here are the headlines moving the markets.

Trumpflation strikes back: dollar set for best week of the year

LONDON (Reuters) - The dollar was set for its biggest weekly rise in 2017 and stocks rose across the world after U.S. President Donald Trump proposed the biggest tax overhaul in three decades in the United States.

U.S. consumer spending barely rises; core inflation moderates

WASHINGTON (Reuters) - U.S. consumer spending barely rose in August likely as Hurricane Harvey weighed on auto sales and annual inflation increased at its slowest pace since late 2015, pointing to moderation in economic growth in the third quarter.

VW's dieselgate bill hits $30 billion after another charge

HAMBURG/BERLIN (Reuters) - Volkswagen is taking another $3 billion charge to fix diesel engines in the United States, lifting the total bill for its emissions test cheating scandal to around $30 billion.

New Uber CEO to meet London transport boss in license battle

LONDON (Reuters) - The new chief executive of Uber Technologies [UBER.UL] will meet the head of London's transport system next week to try to retain the license for its ride hailing service in the British capital.

Murdoch opponent challenges UK regulator over Sky deal

LONDON (Reuters) - Activist group Avaaz stepped up its battle to stop Rupert Murdoch buying Sky , launching a legal challenge to the regulator's view that the pay-TV group would still be a "fit and proper" owner of a broadcasting license if the deal goes ahead.

China's bitcoin market alive and well as traders defy crackdown

SHANGHAI (Reuters) - Weeks after Beijing banned fundraising through token launches and ordered some bitcoin exchanges to shut, casting a chill over the cryptocurrency industry, traders say that the market is far from dead.

Lyft IPO puts investors in self-driving cars as well as ride services

DETROIT (Reuters) - An initial public offering by Lyft Inc will give investors a way to jump into self-driving cars, although the ride services company and rival Uber Technologies Inc may have to wait years before sending a driverless robotaxi to a customer.

Exclusive: South Africa's central bank tells lenders that KPMG is 'too big to fail'

JOHANNESBURG (Reuters) - South Africa's central bank has told top lenders they cannot fire auditor KPMG [KPMG.UL], entangled in a scandal involving friends of President Jacob Zuma, because it might undermine financial stability, two sources with knowledge of the matter said.

China sets 2019 deadline for automakers to meet green-car sales targets

BEIJING/SHANGHAI (Reuters) - China has set a deadline of 2019 to impose tough new sales targets for electric plug-in and hybrids vehicles, slightly relaxing an earlier plan to launch the rules from next year that had left global automakers worried about being able to comply.

Congressman Attacks "Disloyal" John Kelly For Quashing Possible Trump-Assange Deal

As we reported last week, California Rep. Dana Rohrabacher earlier this year tried to broker a deal between the Trump administration and Wikileaks founder Julian Assange whereby Assange would furnish purportedly conclusive evidence that Russia wasn't responsible for the DNC leaks in exchange for a presidential pardon.

Well, apparently Trump isn't an avid reader of the Wall Street Journal (the newspaper that originally reported on the Rohrabacher-Assange deal), because when asked about it over the weekend, he responded that he'd "never heard" of the deal.

That's not surprising. As WSJ initially reported, Rohrabacher was stymied by Chief of Staff John Kelly when he tried to take the deal to the president. Trump's chief of staff, who's efforts to impose "discipline" on the West Wing in part by limiting access to the president have been widely publicized, suggested that Rohrabacher first clear the deal with the intelligence agencies, which, of course, would be a non-starter.

So, in what's likely another attempt to circumvent Kelly's influence via the media (after all, it's not out of the question that Rohrabacher was behind the initial leaks to WSJ) Rohrabacher complained to the Daily Caller that certain disloyal aides are creating "a wall around" the president.

Kass: "Sell The FANGs"

Authored by Doug Kass via RealInvestmentAdvice.com,

I expect comparisons between the FANG stocks and Dr. Evil of the Austin Powers film series to be an ongoing investment storyline over the next year given these digital gatekeepers' increased dominance over the U.S. economy. This idea might receive a lot more play in U.S. political and antitrust circles — and produce more legal challenges — than most investors currently presume.

For those unfamiliar with Austin Powers, Mike Myers' character Dr. Evil is a parody of the James Bond villains. He hatches schemes to take over the world with his sidekick Mini-Me and his cat Mr. Bigglesworth. He's also assisted by Number 2 (played by Robert Wagner), who fronts for his evil corporation, Virtucon Industries. A natural businessman, Number 2 is often more concerned about the financial aspects of world domination than in world domination itself. That sounds a lot like the FANG stocks — Facebook, Amazon , Netflix and Alphabet/Google.

Now, the FANG shares have been slipping recently despite Wednesday's strength. However, investor sentiment remains almost universally optimistic as it relates to the intermediate term for these names.

Here are just two examples of that enthusiasm:



Based on expectations of the FANGs' glorious future and continued popularity, the Intercontinental Exchange this week announced an early November launch of a "FANG+" ETF. This will combine the FANGs with other hot stocks like Alibaba, Nvidia and Tesla.

Frontrunning: September 29



Republican Tax Plan Hits First Hurdle (WSJ)

A $6.4 Billion Windfall Awaits Big U.S. Banks in Trump's Tax Cut (BBG)

How Does the Trump Tax Plan Affect You? WSJ Answers Your Questions (WSJ)

Twitter suspends Russia-linked accounts, but U.S. senator says response inadequate (Reuters)

Flight ban on Iraqi Kurds imposed after independence vote (Reuters)

Elon Musk's New Vision: Anywhere on Earth in Under One Hour (BBG)

Kurdistan region refuses to hand over border crossings to Iraqi government: Rudaw (Reuters)

Independence Vote Tests Catalonia's Police Force (WSJ)

Uber CEO Khosrowshahi to Visit U.K. to Rescue London License (BBG)

Chinese Money Is Still Leaking Into the World's Hous ...

Ethereum Tumbles After South Korea Bans ICOs, Margin Trading

Ethereum and bitcoin tumbled overnight, after South Korea banned local initial coin offerings and margin trading in cryptocurrencies. According to Joongang and Bloomberg, the Financial Services Commission in Seoul said all forms of ICOs are prohibited in the country, including "projects that share profits, rights, dividends, and other "coin-style" offerings, according to a statement."

The commission also banned margin trading, i.e., the practice of loaning funds to trade currencies including bitcoin and ethereum, according to an official who clarified the statement. The government plans to investigate any violations and deal with them strictly even before its measures are legislated, it said in the statement.

The announcement triggered a sell-off in crypto markets with Ethereum, which has become a platform for most ICOs, dropping 5.7% while bitcoin fell as much as 3.5%.

"They saw that the best practice was just to ban it before allowing any major crisis to occur, which would have impacted a lot of retail investors there," Thomas Glucksmann, head of marketing at Hong Kong-based bitcoin exchange Gatecoin told Bloomberg. "Similar to China, they probably didn't want to ban it, but they didn't want to take any risk about it getting out of hand."

"The majority of ICO tokens are being issued through the ethereum platform," said Glucksmann. "At any sign of vulnerability, the first reaction would be a mass selloff in ether. That's why the price of ether is susceptible."

...

What Barclays Should Do to Win Back Shareholder Love

Banks need a good story to explain what they are about. Barclays wants to tell a tale of growth, but its audience is struggling to suspend its disbelief.

The Long-Haul Airline Disruptor Isn't Built For Turbulence

If you've booked a cheap trans-Atlantic flight with Norwegian Air Shuttle, you can relax: It probably isn't about to go bust. Whether the Oslo-listed airline's high-risk business model can withstand more difficult market conditions is doubtful.

Screen Blues Aren't Over for Many of Apple's Suppliers

Display makers such as Japan Display, LG Display and Sharp are falling behind in the screen arms race as Apple shifts to OLED technology.

August 2017 Headline Personal Income and Spending Growth Lower

Written by Steven Hansen

The headline data this month showed some decline in consumer income and spending - and the savings rate continues to be low historically.

Metals Stocks: Gold ticks higher as traders weigh tax-cut prospects, rate hikes

Gold futures trade slightly higher on Friday, but was on track for a modest weekly loss, as traders weighed the likelihood of success for Republican tax-cut proposals and continued to factor in expectations for another rate increase by the Federal Reserve before year-end.

Slow pace of Puerto Rico relief brings heat on Trump administration

More than a week after Hurricane Maria delivered its direct hit to Puerto Rico, reports from the ground Friday say relief is still trickling in as some basic services return but many of its residents continue to struggle even for fresh water.

Key Words: Gary Cohn apparently doesn't know what things cost

Gary Cohn, President Donald Trump's chief economic adviser, defended the Republicans' tax plan Thursday, but some of his comments left people wondering if he's out of touch with reality — or has ever watched HGTV.

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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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