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12Oct2017 Pre-Market Commentary: Wall Street To Open Moderately Lower, Crude Prices Slide Off Yesterday's Highs, US Dollar Builds Strength,JPMorgan Chase And Co. Led The Nation In Total U.S. Deposits

Written by Gary

US stock market future indexes are pointing to a lower opening this morning (SPY -0.2%). Initial U.S. jobless claims fell by 15,000 to 243,000 marking the lowest level in six weeks.


Here is the current market situation from CNN Money

European markets are mixed. The FTSE 100 is higher by 0.37%, while the CAC 40 is leading the DAX lower. They are down 0.21% and 0.05% respectively.

Looking at the last three columns (below), the first one (Actual), is what was reported this morning. The second column (Forecast) is what analysts had forecast and the third column is the previous report. Full calendar HERE.

What Is Moving the Markets

Here are the headlines moving the markets.

Bond trading slump clouds JPMorgan earnings beat

(Reuters) - JPMorgan Chase & Co's quarterly profit and revenue easily trumped Wall Street's expectations on Thursday, but a slump in bond trading clouded gains from loan growth and higher interest rates.

Exclusive: Alphabet's Waymo demanded $1 billion in settlement talks with Uber - sources

SAN FRANCISCO(Reuters) - Alphabet Inc's Waymo sought at least $1 billion in damages and a public apology from Uber Technologies Inc as conditions for settling its high-profile trade secret lawsuit against the ride-services company, sources familiar with the proposal told Reuters.

Citigroup profit rises on asset sale gain, lower costs

(Reuters) - Citigroup Inc reported a higher quarterly profit as it kept costs lower, recorded a large gain from an asset sale and had a smaller-than-expected decline in trading revenue.

Asia stocks reach 10-year peak on global equity surge, dollar sags

TOKYO (Reuters) - Asian stocks reached a 10-year high on Thursday, riding the bull run in global equity markets, while the dollar sagged after the Federal Reserve showed a more guarded view towards inflation.

London regulator will defend decision not to renew Uber's license in court: mayor

LONDON (Reuters) - London Mayor Sadiq Khan said on Thursday that the city's transport regulator will defend its decision in court not to renew Uber's license to operate in the British capital.

Airbus board backs CEO after reviewing top management

PARIS (Reuters) - Airbus directors publicly backed Chief Executive Tom Enders on Thursday in the face of European investigations into the use of middlemen in airplane sales and a $2 billion fighter deal.

Delta refuses to pay tariffs on Bombardier CSeries jets

NEW YORK (Reuters) - Delta Air Lines Inc on Wednesday said it would refuse to pay a 300 percent U.S. tariff on Canadian-built Bombardier CSeries jets, raising doubts about its purchase of 75 of the new aircraft at a list price of more than $5 billion.

Sports car maker Aston Martin counts on an SUV to drive its future

DETROIT (Reuters) - The arrival of Aston Martin's DBX sport utility vehicle in 2019 could help more than double sales of the British sports car maker by early next decade, its chief executive told Reuters.

HSBC picks insider John Flint as new chief executive

LONDON (Reuters) - HSBC has chosen John Flint as its next chief executive, it said on Thursday, with its recently-hired chairman opting for an insider to pursue a turnaround at Europe's biggest bank.

Mad, Mad, Mad, MAD World: News in Charts

Global Outlook - Mad, Mad, Mad, MAD World: News in Charts

Alarm bells are ringing for economic fundamentalists such as Fathom Consulting.

Asset prices look increasingly out of step with fundamentals, and in some cases they look downright bubbly. And other geopolitical developments are similarly alarming. One might even describe them as...

Mad:

Equity prices in developed economies, and specifically in the US, are more than one standard deviation higher than their long-run average in relation to nominal GDP.

Mad:

The "Missing Slide": JPM Credit Card Charge-Offs Just Shy Of Four Year Highs

While JPM was quick to provide all the favorable data in its earnings presentation (and not so favorable when it comes to the unexpectedly sharp, 27% drop in its fixed income revenues) one thing was conspicuously missing: the slide on "Mortgage Banking And Card Services" which has traditionally been part of the bank's earnings presentation and was certainly featured prominently in Q1, if dropped last quarter.

Of course, it is possible that JPM simply forgot to include it, or perhaps it did not want to bring attention to a troubling trend: the concerning increase in net credit card charge-offs, which earlier in the year rose to just shy of $1 billion, and which prompted JPM to report an unexpected increase in credit costs (driven also by JPM's write-down in its student loan portfolio).

So we decided to recreate the chart using data JPM disclosed in its earnings supplement, and which may explain why JPM "forgot" to add that particular slide. It shows that after rising to the highest level since March 2013 last quarter, JPM's net credit card chargeoffs remained over $1 billion as of Sept 30, at $1.019BN to be precise, and just shy of the highest level going back to March 2013, suggesting that contrary to Jamie Dimon's commentary, the US consumer is not doing all that hot after all.

Twitter Suspends Account Of Weinstein Accuser Rose McGowan

In a move tha may to trigger an outpouring of rage from the company's Silicon Valley milieu, Twitter has frozen some features of Rose McGowan's account after she tweeted "You Lie" at Ben Affleck following the latter's apology for groping actress Hilarie Burton during an appearance on "TRL" in 2003.

The actress, who is at the center of the storm of sexual misconduct allegations against producer Harvey Weinstein, took to her Instagram and Facebook accounts to relay the news of her suspension, writing cryptically that: "TWITTER HAS SUSPENDED ME. THERE ARE POWERFUL FORCES AT WORK. BE MY VOICE. #ROSEARMY."

I acted inappropriately toward Ms. Burton and I sincerely apologize

— Ben Affleck (@BenAffleck) October 11, 2017

You want to play let's play #ROSEARMY pic.twitter.com/uqd26Z78gc

— rose mcgowan (@rosemcgowan) October 10, 2017

She added a screenshot from a message from Twitter telling her that she had violated their terms of service and she would be locked out for 12 hours.

JPMorgan FICC Revenues Plunge 27%, "Low Volatility" Blamed

Launching Q3 earnings season, moments ago JPM reported third quarter Net Income of $6.7 billion and EPS of $1.76, beating expectations $1.67 and 18 cents, or 7% higher than a year ago, on "managed" revenue of $26.2 BN, beating consensus expectations of $25.7 BN, up 3% from the $25.5BN in Q3 2016 revenue .

JPM reported average core loans up 7% Y/Y and 2% Q/Q, with net interest income up $1.2Bn Y/Y to $12.5bn, "primarily driven by the net impact of rising rates and loan growth" even as average NIM missed.

Commenting on the results, if not on this morning's new all time high in bitcoin, Dimon said "JPMorgan Chase delivered solid results in a competitive environment this quarter with steady core growth across the platform. And for the first time, the Firm led the nation in total U.S. deposits, as consumers and businesses continue to view us as their partner of choice.

The global economy continues to do well and the U.S. consumer remains healthy with solid wage growth. Unfortunately, natural disasters in the U.S. and abroad have impacted many of our customers and we have responded with enormous financial support as well as the expertise and generosity of our employees to help these customers, clients and communities. Building on our success to-date in Detroit, we have announced new initiatives in Chicago and Washington, D.C. to drive inclusive economic growth in those communities. We will be there to do our part. And this is in addition to the $1.7 trillion of credit and capital supplied this year to consumers and small and mid-sized busi ...

Say Goodbye to the China Bid

The flow of Chinese money into assets around the world is coming to an end.

Some Inconvenient Truths About 7-Eleven's Owner

Shares in Japan's Seven & I haven't budged much since activist shareholder Dan Loeb won a boardroom battle there last year.

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.

07 October 2017 Initial Unemployment Claims Rolling Average Improves Again

Hurricanes Harvey, Irma and Maria impacted this week's claims - but significantly less than previous weeks. The market expectations for weekly initial unemployment claims (from Bloomberg / Econoday) were 250 K to 275 K (consensus 252,000), and the Department of Labor reported 243,000 new claims. The more important (because of the volatility in the weekly reported claims and seasonality errors in adjusting the data) 4 week moving average moved from 267,000 (reported last week as 268,250) to 257,500. The rolling averages generally have been equal to or under 300,000 since August 2014.

Capitol Report: Trump threatens to pull FEMA from Puerto Rico

President Donald Trump said Thursday that the Federal Emergency Management Agency can't stay in Puerto Rico "forever," as most residents of the island remain without power.

Economic Report: Unemployment rolls shrink to 44-year low, jobless claims show

Initial U.S. jobless claims fell by 15,000 to 243,000 in the first week of October to mark the lowest level in six weeks. And the number of people collecting benefits is the lowest since 1973.

Economic Report: U.S. wholesale inflation zooms higher in September

Wholesale inflation in the U.S. jumped 0.4% in September and the yearly rate hit a 5 ½-year high, partly reflecting a runup in gasoline prices after Hurricane Harvey knocked some refineries off-line.

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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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