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11Oct2017 Market Update: Wall Street Flat, DOW Climbs To New Record High, Financials Drop Ahead Of Earnings, WTI Crude Continues To Trade In The 51 Handle, Central Bankers Struggle To Resolve The Big Questions

Written by Gary

US major stock indexes treaded water in a narrow range today (SPY +0.04%), with slight gains in technology and consumer staple stocks offset by a drop in financials on the eve of earnings by Wall Street banks.


Here is the current market situation from CNN Money

North and South American markets are mixed today. The IPC is up 0.33% while the S&P 500 gains 0.07%. The Bovespa is off 0.53%.

What Is Moving the Markets

Here are the headlines moving the markets.

Delta refuses to pay tariffs on Bombardier CSeries jets

NEW YORK (Reuters) - Delta Air Lines Inc on Wednesday said the carrier would not foot the bill of a 300 percent tariff that the U.S. Commerce Department wants to impose on Canadian-built Bombardier CSeries, leaving the future of the planemaker's jets in limbo.

Loyalists unhappy as Coach becomes Tapestry Inc

(Reuters) - Iconic luxury handbag maker Coach Inc risked Wall Street and social media ire on Wednesday by announcing a change of its corporate name to Tapestry Inc, as it evolves into a multi-brand upscale retailer.

Exclusive: Despite sanctions, Russian organizations acquire Microsoft software

By Gleb Stolyarov, Anastasia Teterevleva and Anastasia Lyrchikova

Goldman creates 'brain trust' in effort to boost deals business

(Reuters) - Goldman Sachs Group Inc is betting it can get its money-making mojo back by pitching creative deals to big, complex clients, marking a return to its investment banking roots as trading revenue slows.

Wall Street flat; financials drop ahead of earnings

(Reuters) - U.S. stock indexes treaded water in a narrow range on Wednesday, with slight gains in technology and consumer staple stocks offset by a drop in financials on the eve of earnings by Wall Street banks.

Taiwan Fair Trade Commission fines Qualcomm more than $700 million

HONG KONG (Reuters) - The Taiwan Fair Trade Commission said on Wednesday it will fine U.S. chipmaker Qualcomm Inc T$23.4 billion ($774.14 million) for anti-trust violations of its chip technology.

Microsoft, Apple among companies urging U.S. Supreme Court to weigh gay workers' rights

(Reuters) - Dozens of companies including Alphabet Inc's Google, Apple Inc, Microsoft Corp, and Viacom Inc have asked the U.S. Supreme Court to address whether a law banning sex discrimination in the workplace provides protections to gay employees.

Union presses post-bankruptcy Caesars on benefits, worker protections

CHICAGO (Reuters) - A union representing casino workers on Wednesday asked Caesars Entertainment Corp's new board of directors to consider safety, protections against discrimination and other concerns during contract negotiations set to kick off next year.

Kroger exploring sale of convenience stores, shares rise

(Reuters) - Kroger Co said on Wednesday it is exploring the sale of its nearly 800 convenience stores as the No. 1 U.S. supermarket operator strengthens its Web business in a market share war that has intensified after Amazon.com Inc's purchase of Whole Foods.

North Korea: "U.S. Will Pay With Hail Of Fire" After Trump Lit "Wick Of War"

It had been several weeks since we had the familiar verbal jawboning back and forth between North Korea and Donald Trump, and so to break the monotony, North Korea's foreign minister decided to lob several provocations at Donald Trump, whom Pyongyang is clearly trolling at this point, claiming that it was Trump's speech at the UN last month that "lit the wick of war", and that North Korea will make the US pay "with a hail of fire." The diplomatic also said that North Korea has "almost achieved a balance of power" with the US.



N.KOREA FOREIGN MINISTER SAYS TRUMP 'LIT THE WICK OF WAR' WITH SPEECH AT UN - TASS

NORTH KOREA FOREIGN MINISTER SAYS NORTH KOREA WILL MAKE U.S. PAY WITH HAIL OF FIRE

NORTH KOREA FOREIGN MINISTER SAYS N.K. HAS ALMOST ACHIEVED BALANCE OF POWER WITH USA: TASS

He also told TASS that to "strengthen sanctions is an act of war & attack" against North Korea.

Separately, North Korea crushed any hopes for de-escalation and de-nuclearization, something which even China has recently been asking for, and claimed that North Korea's "nuclear program guarantees peace and safety in the region" and more apropos, that the country's nuclear program will "never be a matter of discussion while the US is intent on crushing North Korea."



N.KOREA FOREIGN MINISTER TELLS RUSSIA'S TASS THAT N.KOREA NUCLEAR PROGRAMME GUARANTEES PEACE AND SAFETY IN REGION

N.KOREA FOREIGN MINISTER SAYS NUCLEAR PROGRAMME WILL NEVER BE MATTER OF DISCUSSION WHILE U.S. INTENT ON CRUSHING N.KOREA - TASS

Which covers the words, as for the deeds, earlier today the Seoul-based Asia Business Daily reported that North korea is preparing to fire "multiple short-range rockets around the opening of the Chinese Communist Party's twice-a-decade congress on Oct. 18" and added that

Media Says You're to Blame for Shootings Unless You Report Odd Behavior

Via The Daily Bell

"How do we fit the latest tragedy into our political agenda?" The media wondered. "Gun control is so cliché. And even though the tragedies get bigger and bigger, we still have little luck!"

"I have an idea!" Exclaimed one outlet, "We can convince people that if they don't report their neighbors and family members to authorities for acting subjectively crazy, then they are to blame for crazy people's actions!"

"Yes!" Agreed another, "And we can tell them that 'micro-aggressions', criticism of the government, and just getting a bad feeling from someone are all worthy of reporting to the authorities!"

And just like that, the media was able to turn their frowns upside down. They exploited the good crisis in the name of the progressive dream. It's easy to keep citizens under strict watch when fellow citizens do the policing for you! And they all lived happily ever after, sewing fear and mistrust into the fabric of society. The End.

"It Is Pretty Rare That Emerging Markets See This Type Of Euphoria"

For all "doom and gloom" predictions of an imminent crash in Emerging Markets (here and here, among many others), not only have these not materialized, but as of last week the average yield on corporate junk bonds issued by emerging markets dropped to 5.53% late last week, the lowest on record, according to the WSJ citing J.P. Morgan. Indicatively, two years ago, that yield was over 9%.

For a case study of the yield-chasing insanity unleashed by central bankers, look no further than Tajikistan.

The central Asian country last month raised $500 million in its first-ever international bond sale, paying just 7.125% in annual interest on the debt after the U.S.-dollar offering drew a swarm of American and European buyers. Bankers had earlier shopped the 10-year bonds from the former Soviet satellite with an 8% yield, which was pulled down by strong investor demand.

The reason for the scramble into any piece of yielding debt, even Tajik junk bonds is simple: as the IMF shows today in its latest financial stability report, there are virtually no IG bonds left with yields above 4%, and in the junk bonds space, whether in the US or offshore, it isn't much better.

3 Year Auction Stops At Highest Yield In Over 7 Years

In this week's first TSY auction, moments ago the US Treasury sold $24.0BN in 3-year paper at a yield of 1.657 percent, matching or "on the screw" with the 1.657 When Issued. This was the highest stop on a 3Y auction in over 7 years, or since April 2010.

And unlike last month's poor 3Y auction which saw one of the lowest Indirect takedowns in recent year, today's auction saw solid bid-side demand, with the Bid to Cover rising to 2.83 from last month's disappointing 2.70 if still below the 6 month average of 2.85.

The internals were solid as well, with Indirect bidders awarded 54.3%, also above last month's 46.2%, but below the previous six auction average of 55.2%. There was a small drop in the Direct award to 7.1%, from 10.4% last month and below the 6MMA of 9.0%, leaving Dealers holding 38.6%, less than last month's 43.4%, and in line with the auction average of 35.8%.

Ultimately, a solid auction and one which sets the stage for tomorrow's 10Y reopening.

China's Next Five Years---Squeezing the People to Feed the State

China's twice-a-decade Communist Party reshuffle this month will hand even more power to President Xi Jinping, whose emerging grand strategy for managing the economy—and avoiding a debt crisis—will shape global asset markets for years to come.

Liquor Makers Need to Sober Up to the Decline in Teenage Drinking

Move over millennials: Today's smartphone-obsessed teens, Generation Z, are the consumers of the future. Worryingly for liquor producers, they're shaping up to be an antisocial lot.

How Nvidia Keeps Driving Higher

Richly valued chipmaker Nvidia benefits from a consolidated industry with more diverse growth opportunities ahead.

August 2017 Headline JOLTS Job Openings Little Changed

Written by Steven Hansen

The BLS Job Openings and Labor Turnover Survey (JOLTS) can be used as a predictor of future jobs growth, and the predictive elements show that the year-over-year growth rate of unadjusted private non-farm job openings modestly improved. The headline view shows little change.

Europe Markets: Spanish stocks rally to the close as worries over Catalan independence ease

The IBEX stock benchmark bounces higher after Catalan leader Carles Puigdemont suspends an official declaration for a split for now.

Deep Dive: There's a link between CEOs who torture the English language and poor stock performance

Research by S&P Global Market Intelligence connects executives' comments on conference calls to subsequent stock action. By Phil van Doorn.

Harry Boxer's four stocks to watch today

In focus: Diodes, Nutanix, Pure Storage and Abeona Therapeutics.

Earnings Summary for Today

Earnings Calendar provided by Investing.com.

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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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