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29Sep2017 Market Close: Wall Street Closes With Fresh Records; Tech Boosts, Outlook Is Foggy, Investors See Sunshine

Written by Gary

US markets closed moderately higher (SPY +0.4%) and new highs from Nasdaq and the SP 500. Buoyed by gains in technology stocks, and each of the major indexes closed out the quarter with solid gains.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Wall Street closes with fresh records; tech boosts

(Reuters) - The S&P 500 and the Nasdaq advanced to record levels on Friday, buoyed by gains in technology stocks, and each of the major indexes closed out the quarter with solid gains.

Hurricane Harvey curbs U.S. consumer spending; inflation muted

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

Bankers anxious over consumer reactions to Equifax breach

(Reuters) - U.S. lenders are concerned their consumer loan and credit card businesses could be stymied if large numbers of people lock or freeze their credit reports to protect themselves in the wake of the Equifax Inc hack.

Lagging U.S. online giants, Europe calls on them to pay up

TALLINN (Reuters) - French, Italian and other European leaders upped the pressure on mostly U.S. tech giants to pay their fair share of taxes in the European Union and abide by the bloc's rules when they met on Friday, but were still far from a consensus on the issue.

Fed fines HSBC $175 million for lack of forex trading oversight

WASHINGTON (Reuters) - The Federal Reserve on Friday fined HSBC Holdings PLC $175 million for "unsafe and unsound practices" in its foreign exchange trading business, the latest in a series of fines for banks' failures to prevent market manipulation.

Deutsche Bank in $190 million currency-rigging settlement

NEW YORK (Reuters) - Deutsche Bank AG agreed to pay $190 million to settle U.S. litigation accusing it of rigging prices in the roughly $5.1 trillion-a-day foreign exchange market.

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.

U.S. auto sales for September to be highest in 2017: JD Power and LMC

(Reuters) - Americans in hurricane ravaged cities are replacing their damaged vehicles and that is set to lift the pace of vehicles sales for September to its highest level this year, according to consultancies J.D. Power and LMC Automotive.

ISS says P&G investors should vote Peltz on to board

NEW YORK (Reuters) - Institutional Shareholder Services, the influential proxy adviser, said on Friday shareholders in Procter & Gamble Co should vote activist investor Nelson Peltz to the board of the consumer goods giant.

Dollar & Stocks Jump; Bonds & Bullion Dump In Lowest Volatility September Ever

It has now been 318 trading days since the S&P 500 suffered a 5% drawdown - the 4th-longest streak since 1928... So everything is awesome...

BUT...US 'hard' economic data has not been this weak (and seen the biggest drop) since Feb 2009...

* * *

Q3 Was a Roller-Coaster...

Q3 was the 8th straight quarterly gain in a row for The Dow - the longest streak since Q3 1997.

The Long bond was unch, gold up 3.2%,. but stocks outperformed in Q3...

Nasdaq just outperformed Small Caps on the quarter as stocks reversed their down-trend seemingly around Yellen's J-Hole speech...

Treasury Yields are mixed for Q3 with 2Y notably higher but the rest of the curve barely budged...reversing early gains on Draghi's hawkish comments...

NFL Favorability Crashes

According to a new POLITICO/Morning Consult poll, the National Football League is seen as more unfavorable than ever before.

"The NFL's net favorability has dropped from 30% on September 21 to 17% on September 28," the poll shows.

Do you have a favorable or unfavorable impression of the following - National Football League?

Source: Morning Consult Intelligence

Among Trump supporters, as would be expected, the collapse is remarkable...

Source: Morning Consult Intelligence

On September 21, 25% of Trump supporters said they had a very favorable view of the NFL and 11% had a very unfavorable view.

As of Sept 28, those numbers have dramatically changed wit ...

US Economic Data Has Never Done This Before

While 'hope'-strewn survey data (see today's Chicago PMI) are staging a self-reinforcing resurgence in the last week or two, 'hard' economic data (that doesn't rely on the emotional responses of humans) has collapsed to its weakest since Feb 2009.

This is the 6th monthly drop in 'hard' economic data in a row, something that has never happened before, pushing the spread between 'hope' and 'reality' to a record high.

Of course, for now, stocks and 'soft' survey data remain locked in a tight mutually reinforcing uptrend of hope - ignoring reality...


What's The Matter With Inflation?

Via Global Macro Monitor,

What's The Matter Kansas inflation?

The divergence of official inflation as measured by the government versus inflation realized by the consumer and businesses has never been greater, in our opinion. Go ask anybody on the street in America and Europe if think "doing life or business" is getting more expensive.

We have some thoughts on what is the matter with the inflation data:

1. Defining inflation

What is your definition of inflation? What are we trying to measure? The prices in a consumer basket of goods and services? Wages? Asset prices?

2. Measurement problems

The official measurement procedures seem archaic given the advent of big data in the past few years. Even Bloomberg is out with a recent piece warning the Fed about low-balling inflation due to measurement errors.

Low-Balling Inflation Puts the Fed at Risk

Beware of any metric that doesn't fully reflect housing prices.

The U.S. has an inflation problem. It has nothing to do with inflation being too high or too low. Unlike the raging inflation of the 1970s, it doesn't need to be solved with a lengthy and painful recess ...

Outlook Is Foggy, Investors See Sunshine

The market is acting like the economy is about to take off, though hurricanes and tax cut debate make it hard to see the future.

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.

More Borrowing Is Not the Answer at Valeant

Valeant Pharmaceuticals International is considering a new round of borrowing. That is one reason investors should consider cashing in after the stock's big recent rally.

These Americans are most likely to fear an unexpected financial crisis

One unexpected bill could wreak havoc on millions of people.

Project Syndicate: The Kurds meet all the criteria to have their own country

The Kurds have earned the right to have their own state, writes Richard N. Haass.

Market Extra: What rose in the third quarter? Stocks, bonds—basically everything

Once again, a "set it and forget it" strategy has paid off for investors.

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