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03Oct2017 Pre-Market Commentary: Wall Street To Open Higher, New Historic Highs Expected

Written by Gary

US stock market future indexes are flat this morning (SPY +0.07%), but the DOW and SP 500 are expected to create new highs again. Crude and the US dollar slide fractionally.

Here is the current market situation from CNN Money

European markets are higher today as French and British shares show gains. The CAC 40 is up 0.24% while the FTSE 100 is up 0.14%. The German DAX is closed.

What Is Moving the Markets

Here are the headlines moving the markets.

Tesla shares fall on warning of Model 3 bottleneck

(Reuters) - Shares in Tesla Inc were down 2 percent in trading before the bell on Tuesday after the luxury electric vehicle maker said its planned ramp-up for the new Model 3 mass-market sedan faced production bottlenecks.

Global shares score latest record high, dollar flexes muscle

LONDON (Reuters) - World shares hit their latest in a run of record highs on Tuesday, while the dollar was at it loftiest in 1-1/2 months as encouraging U.S. data lifted it in tandem with global bond yields.

Former Equifax chief will face questions from U.S. Congress over hack

WASHINGTON (Reuters) - U.S. lawmakers are due to question the former head of Equifax Inc at a Tuesday hearing that could shed light on how hackers accessed the personal data of more than 140 million consumers.

Fiat Chrysler recalls 646,394 SUVs for brake issue

(Reuters) - FCA US LLC, Fiat Chrysler Automobiles NV's U.S. arm, said it was voluntarily recalling about 646,394 SUVs in the United States to check shields that protect brake boosters for proper installation.

Berkshire Hathaway invests in truck stop operator Pilot Flying J

(Reuters) - Warren Buffett's Berkshire Hathaway Inc on Tuesday said it is buying a 38.6 percent stake in Pilot Flying J, one of the largest U.S. operators of truck stops, and will eventually take a controlling stake.

Consumer lending, insurance issues to weigh on Wells' CEO's Senate appearance on Tuesday

(Reuters) - Wells Fargo & Co CEO Tim Sloan will be questioned about sales practices, mischarging customers for auto insurance, and complaints about mortgage fees at the bank's consumer lending unit when he testifies before U.S. senators on Tuesday.

Uber boss to meet London transport chief in bid to keep license

LONDON (Reuters) - Uber's new global boss Dara Khosrowshahi will meet London's transport regulator on Tuesday as the taxi hailing app fights to keep its license in one of its most important foreign markets.

Whole Foods price cuts hit hardest at Trader Joe's, Sprouts: report

LOS ANGELES (Reuters) - Whole Foods rivals Trader Joe's and Sprouts Farmers Market Inc have been hit hardest by customer defections since Inc's price cuts at the premium grocer, Whole Foods price cuts, a data analytics firm said on Tuesday.

South African regulator to fast-track KPMG investigation

CAPE TOWN (Reuters) - South Africa's audit regulator will fast-track an investigation into global auditor KPMG over work done for business friends of President Jacob Zuma, the regulator's chief executive told lawmakers on Tuesday.

Vegas Killer Purchased Guns Legally, Used "Bump-Stock" To Create Automatic Fire

Before any information had been released about the shooter's identity, or where and how he acquired the arsenal of 42 guns, 23 of which were eventually discovered in his hotel room, one Connecticut senator was already making headlines by exhorting Congress to "get off its ass" and pass gun-control legislation, officially marking the beginning of another contentious chapter in America's perennial gun-control debate.

"This must stop," Murphy said. "It is positively infuriating that my colleagues in Congress are so afraid of the gun industry that they pretend there aren't public policy responses to this epidemic."

He added: "The thoughts and prayers of politicians are cruelly hollow if they are paired with continued legislative indifference. It's time for Congress to get off its ass and do something."

Meanwhile, the White House, warned lawmakers not to turn the shooting into a "political debate" about gun control before all the facts are in. This turned out to be a prescient, because, as the public later learned, it appears that Steve Paddock, the shooter, purchased his guns legally.

Paddock, who was described by his brother as a millionaire real-estate investor, had no criminal history nor a history with mental illness. When purchasing guns from two licensed dealers earlier this year, Paddock passed federally mandated ba ...

"Total Stoppage": Barcelona Paralyzed By General Strike, Barricades As Protesters Take To The Streets

The Catalan rebellion escalated on Tuesday, resulting in a day of "total stoppage" for the Catalan capital, in which Barcelona metro stations were closed, pickets blocked main roads and civil servants walked out on Tuesday in response to a strike called by pro-independence groups as separatist activists took to the streets of Barcelona to press home their demands for independence after winning an referendum on Sunday which despite a violent crackdown by the Spanish government, saw nearly 90% of the vote cast for splitting away from Madrid.

According to Bloomberg, public transport and shops were closed as demonstrators gathered in the center of the Catalan capital to protest the police violence that marked Sunday's vote and reinforce their demands for a split with Spain. Photographs showed traffic backed up behind protesters on one of the main highways connecting Catalonia with the rest of Spain. Roads are blocked in 48 places in the region, the Spanish traffic agency said.

Demonstrators in Barcelona, Oct. 3.

Regional traffic authorities in Catalonia told The Spain Report on Tuesday morning that more than 50 barricades or protests had blocked roads across the region, including major toll roads and motorways used for commercial traffic to and from France.

Normally busy metro stations in Barcelona were deserted as services were cut back sharply, pickets blocked traffic on Gran Via s ...

Global Stocks Hit Fresh Record High As Dollar Rally Fizzles

It's deja vu all over again.

In a repeat of yesterday's session, where US equities and the dollar levitated in a one-way trade, Tuesday's muted session - where in addition to closed China and South Korean markets, Germany's Dax is also shut for holiday - has seen early dollar and European equity strength, while the S&P is set for new record highs amid higher E-minis and a VIX that is again lower after 5 consecutive days of declines.

It is also another day for global records: world shares hit their latest all time high on Tuesday, while the dollar was the highest in 6 weeks as encouraging U.S. data lifted it in tandem with global bond yields. MSCI's 47-country 'All-World' index was pushed to the fresh peak as Europe's main bourses added to gains made in Asia and after Wall Street set its own record close again overnight. It was the tenth new high since late July alone and extends the year's blizzard of records that started in February to more than 40 according to Reuters, with no sign it is about to run out of steam yet.

That said, both European stocks and the dollar lost some momentum on Tuesday as concerns reemerged about the probability of Trump's tax cuts. The euro drifted as tensions bubbled in Catalonia, with the common currency sliding briefly below 1.16 before rebounding.

Europe's Stoxx 600 Index was mixed, and unchanged so far on Tuesday despite US stocks hitting new all time highs and amid a rally in Asian markets. Materials found a bid in Europe, as the sector
outperforms, led by Anglo American, buoyed by its upgrade at HSBC. Yesterday's volatility seen in Spain, and in the IBEX has slowed, with the Spanish stock index trading marginally ...

Why One Trader Thinks Rumors Of The Dollar's Rebirth Have Been Greatly Exaggerated

Even as Wall Street appears to have flipped in its view on the dollar, which bottomed hard on the day the PBOC announced its revised foreign policy nearly one month ago when it invited speculators to once again short the Yuan, one analyst, Bloomberg's Mark Cudmore, thinks rumors of the dollar's rebirth and upcoming surge, are greatly exaggerated.

He explains why in his latest Macro View note released overnight, and republished below.

There are many flaws in the bullish argument for the greenback.

The Bloomberg Dollar Spot Index is testing the nine-month downtrend from January's multi-year high. Based on momentum and market sentiment, a break seems inevitable.

Fundamentals aren't supportive though, and suggest that even technicians may want to wait for the end of the week before getting excited about this being a sustained rally.

A lot of the latest dollar euphoria is based on Donald Trump's proposed tax reform. We can have little confidence in when it might come into law, even if passed, or what the final bill will look like. The health-care experience doesn't inspire confidence.

Even if such a bill passes soon and largely in accordance with current proposals, there's no reason for it to be dollar positive beyond a short-term sentiment bump. Almost all analysis agrees that it will widen the budget deficit significantly. That's normally negative for the currency.

This seems particularly worrying for the U.S. given that it's one of the few highly indebted countries that seems to be making no progress on reducing its debt-to-GDP ratio.

And the latest U.S. quarterly current-account deficit was the largest in nominal terms since 2008.

It's hard to dispute that the dollar is gaining support from the Fed's hawkishness. But even here the dyn ...

Hurricane Maria Packs a One-Two Punch for Insurance

The losses in Puerto Rico as a result of Hurricane Maria may surpass the more than $50 billion caused by Harvey and Irma, proving very costly for insurers.

Did Hurricanes Blow Profit Expectations Off Course?

Up until the hurricanes hit, the third-quarter was shaping up to be pretty good for U.S. companies. And now? That's hard to know.

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.

This common bank fee has soared 55% over the past decade

There are still avoidable ways customers are getting nickel-and-dimed,

Market Extra: Independence vote slams Spanish bonds but leaves rest of Europe unscathed

Dismissed as a non-event by investors, the Catalonian independence referendum turned out to be the worst outcome for the Spanish government and its bondholders after its sovereign paper saw significant selling on Monday.

In some U.S. states, it's harder to purchase Sudafed than a gun

.After Las Vegas shooting, here are things trickier to buy than guns.

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