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02Oct2017 Market Close: Wall Street Hits Record Highs Again In Afternoon Trading As Materials And Financials Rally, The DOW Starts Off The Final Quarter With A Bang

Written by Gary

US stock market 'Trump Rally' lives on, but for how long Howard Marks Warns (SPY +0.4%). Whatever the reason though, stocks continue to levitate and not just in the US, but across the world.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Hurricanes Harvey, Irma lift U.S. factory activity index to 13-year high

WASHINGTON (Reuters) - A measure of U.S. manufacturing activity surged to a near 13-1/2-year high in September as disruptions to the supply chains caused by Hurricanes Harvey and Irma resulted in factories taking longer to deliver goods and boosted raw material prices.

Wall Street starts quarter higher; data signals strength

NEW YORK (Reuters) - U.S. stocks started the fourth quarter on a strong note on Monday, with all three major indexes touching record highs as data pointed to underlying strength in the economy.

Fed's rate hikes causing low inflation, Kashkari says

(Reuters) - The Federal Reserve's own actions, not transitory factors, are responsible for weak inflation, a Fed policymaker argued on Monday, and the U.S. central bank should wait to raise rates again until inflation hits its 2-percent goal.

United States renews WTO complaint over Canadian wine retailing

GENEVA (Reuters) - The United States has kept trade friction with Canada simmering by filing a new version of a trade complaint over Canadian wine retailing, a document published by the World Trade Organization showed on Monday.

Uber board seats two directors named by Kalanick: sources

SAN FRANCISCO (Reuters) - Uber Technologies Inc's [UBER.UL] board added two new directors nominated by co-founder Travis Kalanick, two sources familiar with the matter said on Monday, giving the former chief executive new allies as the board considers measures that would decrease his influence.

Trump says hopes to improve U.S. trade with Thailand

WASHINGTON (Reuters) - U.S. President Donald Trump told the prime minister of Thailand on Monday he wants to improve the U.S. trade relationship with Thailand.

Roku slumps 11 percent, on track for first down day

SAN FRANCISCO (Reuters) - Roku's stock tumbled 11 percent on Monday and was on track for its first loss since the music streaming company's public listing last week, even after it unveiled a lineup of new devices.

Takata says $1.6 billion KSS deal to be signed in within two weeks

WILMINGTON, Del. (Reuters) - Key Safety Systems has agreed to terms on the $1.6 billion purchase of assets of Takata Corp , stricken by a recall of its faulty vehicle air bags, and final documents will be signed in less than two weeks, a lawyer for Takata's U.S. unit said on Monday.

Tesco's ex-chairman to give evidence in trial of former executives

LONDON (Reuters) - Former Tesco chairman Richard Broadbent will be a witness in the trial of three former executives accused of fraud and false accounting at Britain's biggest retailer, a court heard on Monday.

SocGen: "Global Earnings Are Back To 2014 Levels; Stocks Are 15% Higher"

Is it QE or is it earnings?

With the Dow starting off the final quarter with a bang, surging to new all time highs alongside the S&P, few care what is prompting the latest surge in risk assets, which is a problem because as One River CIO Eric Peters noted yesterday, we have gotten to the point where measures of market performance have mutated into trading vehicles (and price targets) - such as the VIX, which drifted lower after an early spike today that appeared to briefly break the Nasdaq, and launch today's buying spree. And with everyone selling vol, the implication is that there is nothing to be worried about, even if the actual indicator of implied vol is no longer relevant as it itself has become the most actively traded product by retail and institutional investors alike (hardly surprising to anyone who has read Soros' 10+ year old ruminations on market reflexivity).

Whatever the reason though, stocks continue to levitate and not just in the US, but across the world, with SocGen's Andrew Lapthorne reporting that the MSCI World index surpassed 2000 for the first time and in turn has delivered its eleventh successive month of positive total returns. This ranks as the second longest period of consecutive gains for MSCI World since its formation in 1969, with realised volatility collapsing as a consequence.

Echoing his

The Bitcoin "Smile" - Cryptocurrencies Surge As Dollar Purchasing Power Plunges

Authored by Anthony Saunders via Snake Hole Lounge blog,

The Federal Reserve was created by an act of Congress in 1913 and a stroke of the pen by President Woodrow Wilson. And the purchasing power of US consumers has never been the same.

Enter Bitcoin, the worldwide cryptocurrency and digital payment system. Currently, one Bitcoin equals $4,423.

While this looks like a volatility smile, it is not. It does show the erosion of the purchasing power of the US Dollar and the rise of an alternative currency: the cryptodollar.

In a remarkably frank talk at a Bank of England conference, the Managing Director of the International Monetary Fund, Christine Lagarde, speculated that Bitcoin and cryptocurrency have as much of a future as the Internet itself.

It could displace central banks, conventional banking, and challenge the monopoly of national monies.

This the polite version of Dennis Hopper's preference for Pabst Blue Ribbon beer.

Auto OEMs Plan To Flood Market With New Electric Car Models Despite Massive Losses

Last month we noted that Tesla really outdid itself in 2Q 2017 by posting a record cash burn of $1.2 billion, or roughly $13 million every single day. Per the chart below, Tesla's Q2 cash burn was just a continuation of the company's money-losing trend that goes back at least 6 years and seems to be getting worse with each passing quarter.

But Tesla isn't alone in burning cash on "EV's" as pretty much every electric vehicle offered to customers loses money on a per unit basis.

At this point, expensive battery technology still makes them money drains. General Motors Co. loses about $9,000 on every Chevrolet Bolt electric car it sells. Tesla had record sales of its EVs last year -- and still lost $675 million on $7 billion in sales. Fiat Chrysler Automobiles NV loses $20,000 on every electric version of its 500-model subcompact sold in the U.S., Chief Executive Officer Sergio Marchionne said in a speech in Italy on Monday. Battery-powered models should be marketed based on consumer demand and not depend on incentives, he said.

Of course, with statistics like that, it should come as no surprise that auto OEM's all around the world are tripping over themselves to introduce dozens of new electric models in the coming years. Even Bloomberg was somewhat perplexed to report that OEMs will introduce 50 new electric vehicle models over the next 5 years despite the industry's staggering cash burn.

Howard Marks Warns "Nobody Knows What Will Happen"

Authored by Christoph Gisiger and Mark Dittli via Finanz Und Wirtschaft,

Howard Marks, Co-Chairman of the US investment firm Oaktree Capital warns that valuations in the financial markets are uncomfortably high and that investors are acting too complacent.

When Howard Marks speaks, financial markets listen. The renowned value investor and co-founder of Oaktree Capital looks back at almost fifty years on Wall Street and has seen a thing or two during his successful career. His «Memos from the Chairman», which he sends sporadically to Oaktree's clients are a must read for investors.

Mr. Marks welcomes the journalists in his corner office on the 34. floor in Midtown Manhattan with a partial view over Central Park: On the wall hangs a huge, gloomy oil painting showing two sailing ships in a severe storm. On the couch table lies a heavy volume with old issues of the «New York Times» from October 1929: the month of the historic stock market crash.

Today, Howard Marks is concerned. He sees growing complacency in the financial markets, high valuations and investors mindlessly shouldering bigger and bigger risks. He warns that central banks have distorted the risk curve and that we have no idea about what's going to happen next, when they start to unwind their extreme policy measures. But one thing he knows for sure: «As long as people are involved in the process, and given their tendency to take everything to the excess in the ...

Catalonia: A Headache for Spain, Not Europe

Spain wasn't supposed to be on the list of political risks for investors in 2017. The violence in Catalonia is an ugly reminder of Europe's complexities, but it is a bigger problem for Spain than for Europe.

Nordstrom's Deal Hiccup Exposes a Bargain

Reports that Nordstrom's deal to be taken private may falter present a buying opportunity no matter what happens.

China Throws Its Sinking Private Sector a Life Vest

Private capital in China is reeling from a one-two punch of forced factory closures and higher borrowing costs. This weekend's move by China's central bank to boost small enterprise lending-the first real monetary easing since 2016-won't do much to improve the dark mood among Chinese entrepreneurs.

Market Snapshot: Nasdaq ISE halted trade following failed reopenings

Nasdaq ISE on Monday said a decision had been made to keep its market halted for the remainder of the day, following a technical issue that had stymied the exchange throughout the day.

Trump Today: Trump Today: President says he'll visit Las Vegas in wake of 'pure evil' mass shooting

President Donald Trump on Monday called the mass shooting in Las Vegas an "act of pure evil," and said he would visit the city on Wednesday, as he rearranged part of his schedule following the deadliest gun massacre in U.S. history.

The Fed: Republican tax-cut plan would add pressure on Fed to hike interest rates: analysts

The Republican tax-cut plan would add pressure on the Federal Reserve to raise short-term rates, analysts said.

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