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12Oct2017 Market Update: Wall Street Scores New Highs Before Slipping, Trump Signs Executive Order To Begin Unwinding Obamacare, Fed Officials Frantically Play Dumb To The Coming Inflationary Storm

Written by Gary

US stock market indexes are now falling below unchanged line after the DOW, SP 500 and Nasdaq squeezed out new historical highs (SPY -0.1%). Wall Street has paused following lackluster earnings from JPMorgan and Citigroup.

Here is the current market situation from CNN Money

North and South American markets are lower today with shares in Mexico off the most. The IPC is down 0.43% while Brazil's Bovespa is off 0.31% and U.S.'s S&P 500 is lower by 0.04%.

Traders Corner - Health of the Market

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.

GM to scale back production at Detroit sedan plant

DETROIT/WASHINGTON (Reuters) - General Motors Co said on Thursday it plans to scale back production at an assembly plant in Detroit starting later this month as it tries to deal with declining U.S. sedan sales

AT&T subscriber losses highlight cord-cutting threat: analysts

NEW YORK (Reuters) - AT&T Inc's third-quarter video losses sent pay-TV industry shares down on Thursday after Wall Street analysts raised concerns about the continued threat of consumers cancelling their cable and satellite television subscriptions.

Wall Street rally pauses as tepid bank earnings, media stocks weigh

(Reuters) - A rally on Wall Street paused on Thursday following lackluster quarterly earnings from JPMorgan and Citigroup and as media stocks dropped for the second straight day.

Loan growth helps JPMorgan beat expectations despite trading decline

(Reuters) - JPMorgan Chase & Co easily beat Wall Street's third-quarter profit expectations on Thursday, with loan growth and higher interest rates more than offsetting weakness in its markets-related unit.

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.

Richard Branson takes another bet on the future with Hyperloop One

(Reuters) - British billionaire Richard Branson on Thursday placed another bet on the future with an investment in Hyperloop One, which is developing super high-speed transportation systems.

Airbnb targets business travelers to France

PARIS (Reuters) - Business travelers to France are in the sights of online rental marketplace Airbnb, according to a senior official on Thursday at the company best known for hosting holidaymakers.

Tight leash on costs helps Citigroup trump Wall Street view

(Reuters) - Citigroup Inc's quarterly profit and revenue beat Wall Street expectations as the bank kept a tight lid on costs, booked a gain from an asset sale and saw strength in equity underwriting.

Amazon to keep U.S. holiday hiring flat at 120,000 workers

(Reuters) - Inc said it would hire 120,000 workers in the United States this holiday season, same as last year, joining a list of U.S. retailers cautious about their hiring plans amid an improving job market.

Twitter Labels Ben Affleck "Buttman" After Women Accuse Him Of Groping Them

Nearly two dozen women have accused Harvey Weinstein of crimes ranging from sexual harassment to groping and even rape in a scandal that's upended the entertainment industry's power structure and threatening to tarnish the reputations of several other public figures, including politicians like Manhattan Attorney General Cyrus Vance Jr., who killed an investigation into Weinstein back in 2015.

But of all the Hollywood figures who've been criticized for tacitly condoning Weinstein's behavior, none have sustained quite as much reputational damage as Ben Affleck, who's been branded as a hypocrite by Weinstein accuser Rose McGowan for his half-hearted condemnation of Weinstein's actions.

Soon after Weinstein accused Affleck of lying in a statement disavowing Weinstein, twitter users brought up a 2003 incident where Affleck appeared to grope actress Hilarie Burton live on camera, which in turn prompted several women to come forward to allege that Affleck groped them during a party years ago.

Twitter users gleefully responded by branding Affleck with a hilarious new epithet: The Buttman.

Affleck famously played Batman in a widely panned "Batman vs. Superman."

He also grabbed Hilarie Burton's breasts on TRL once. Everyone forgot though.

— Shanice Brim (@ShaniceBrim) October 10, 2017

Affleck has apologized to Burton...

I acted inappropriately toward Ms. Burton and I sincerely apologize

— Ben Affleck (@BenAffleck)

Curve Flattens After Blistering 30Y Auction Stops Through, Highest Bid To Cover In Two Years

After yesterday's stellar 10Y auction, today at 1pm the Treasury sold the last of three weekly auctions, by offering $12 billion in 30Y paper to eager buyers. And eager they were, with the high yield of 2.870% stopping through the When Issued 2.874% by 0.4 bps. This was the biggest strop through on a 30Y auction going back to October 2016.

It wasn't just the stop out that was strong, but the Bid to Cover as well, which at 2.530 was the highest going all the way back to September 2015. The internals were similary impressive, with Indirects taking down 62.8%, up from 58.8% in September, and on top of the 6 month average of 62.4%. Directs ended up with 10.6%, the highest award since March, higher than the 6.1% average, while Dealers were left holding 26.6% of the auction, the lowest dealer takedown since March, suggesting once again that even a modest increase in yields and foreign duration seekers crawl out of the woorwork and buy any US paper they can find.

Overall, while not a strong as yesterday's 10Y auction, there were blistering demand for today's last weekly auction, which was observed earlier courtesy of the 5s30s which has been flattening all day, sending the yield curve to the flattest in years.

Trump Signs Executive Order To Begin Unwinding Obamacare

Having failed to repeal (or replace) Obamacare in the Congress on three separate occasions, on Thursday morning Trump took matters into his own hands, when as previewed last night, the President signed an executive order to begin the process of unwinding Obamacare, paving the way for sweeping changes to health-insurance regulations that would allow an expansion of less-comprehensive health plans.

"We've been hearing about the disaster of Obamacare for so long," Trump said in signing the order at a White House ceremony. "For a long time, I've been hearing repeal, replace, repeal, replace."

He then said that the order is "starting that process" to repeal ObamaCare. It will be the "first steps to providing millions of Americans with ObamaCare relief."

JUST IN: Pres. Trump signs health care executive order, taking his first steps to fulfill vow to dismantle Obamacare

— CNN International (@cnni) October 12, 2017

The order will direct federal agencies to take actions aimed at providing lower-cost options and fostering competition in the individual insurance markets, according to the Wall Street Journal. The specific steps included in the order will represent only the first moves in his White House's effort to strike parts of the law, the officials said adding that the order is just the beginning of the administration's actions related to the health law. Furthermore, it will be months, rather than weeks, for even the most simple changes in the executive order to take e ...

Fed Officials Frantically Play Dumb to the Coming Inflationary Storm

The Fed is baffled as to why inflation remains so low.

It's a clever move, given that the reason inflation is believed to be "low" is because the Fed has been purposefully understating inflation for years.

Perhaps the biggest fraud ever committed in financial history concerns the understating of inflation in the Unites States post-1971.

By the Fed's own admission, the US Dollar has lost some 84% of its purchasing power since 1971, and yet the Fed has routinely claimed that inflation has been "subdued" or "under control" throughout that time period (with the brief exception of the inflationary spikes of the '70s).

With this level of currency depreciation, incomes would have to rise exponentially to compensate for Americans' higher cost of living. They haven't. As a result of this, Americans have increasingly relied on two parents working instead of one, while supplementing their incomes with credit cards and other debt instruments.

The below chart is possibly the single best argument against any claim by the Fed or others than the official inflation numbers are accurate. If income growth was indeed greater than the rise in inflation post-1971 as the below chart suggests, most families would currently have only one parent working and STILL be saving money. Instead, today the norm is for both parents to work and the average US household to be sitting on over $137,000 in debt.

Put simply, the official inflation numbers are garbage.

The Fed purpo ...

Big Banks' Credit Card Woes Spell Trouble for Smaller Issuers

J.P. Morgan and Citigroup reported solid earnings, but also flashed a warning signal on consumer debt that investors in some other companies should heed.

Say Goodbye to the China Bid

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

Flying High Isn't the Time to Buy Europe's Largest Airline

Lufthansa's deal for Air Berlin's assets effectively creates a local airline hegemon in Europe's largest economy. Analysts see an echo of the M&A wave that has transformed the profitability of U.S. airlines.

People are selling their Tesla Model 3 reservations for a 300% profit

Ads offering to sell $1,000 Model 3 reservations have surfaced, carrying heavy markups.

The uncanny economic relevance of a new Broadway revival of an 80-year-old forgotten play

Turns out J.B. Priestley captures the economic spirit of the age 80 years ago

FA Center: The odd trick that helps investors avoid damaging habits: nagging

Investors significantly increased returns upon being reminded of the all-too-human tendency to behave irrationally.

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