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12Oct2017 Market Close: Wall Street Closes Lower As Banks Fall, Uncanny Stock-market SP 500 'quietness', WTI Crude Slips From Its Perch Into The Mid 50 Handle

Written by Gary

US stocks edged lower today (SPY -0.2%), slipping fractionally, after AT&T said it lost subscribers in the last quarter, while banks fell following corporate financial results.

Todays S&P 500 Chart

The Market in Perspective

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 slips as banks fall after results, AT&T sinks

NEW YORK (Reuters) - U.S. stocks edged lower on Thursday, pausing after recent gains, after AT&T said it lost subscribers in the last quarter, while banks fell following results.

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.

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.

Viacom launches TV ads in dispute with Charter

(Reuters) - Viacom Inc , parent of networks including MTV and Nickelodeon, launched TV ads this week urging its viewers to call customer service at cable company Spectrum ahead of a deadline that may result in a costly blackout for 16.6 million customers.

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.

Consumer credit casts cloud over JPMorgan and Citi

NEW YORK (Reuters) - JPMorgan Chase & Co and Citigroup Inc on Thursday said they had set aside more money for credit card lending losses in the third quarter, stoking concerns about consumer indebtedness and overshadowing profits that topped analyst estimates.

Ohio extends ban on Wells Fargo business by six months

WASHINGTON (Reuters) - Ohio will extend its ban on doing business with Wells Fargo & Co because the bank has not done enough to help consumers and clean up its culture, the state's governor said on Thursday.

Did Bannon Just Take Down Harvey Weinstein?

Authored by Tom Luongo via TomLuongo.me,

The biggest open-secret in Hollywood was that Harvey Weinstein was a Grade-A pervert. And his 'coming out party' this week is incredibly intriguing. Hollywood is a dirty place.

It's Chinatown, squared.

And, at this point it's what we don't know that is more interesting than what we've heard so far. But, staying focused on Harvey Gropeman, Producer at Large, his position has been to act as one of the main enforcers of the status quo in all of the power centers of the United States.

From the casting couches of Hollywood to the banks on Wall St. to the grubby think tanks in D.C., this story won't have all the twists and turns of L.A. Confidential, but it will have the same implications.

Weinstein, in effect, was perfectly suited for his role. He is a man of infinite appetites with poor impulse control. A pathetic loser with power over hot, young women desperate for fame.

And these women made the trade willingly. "Small price to pay, right?" Wrong.

Look at the women most opposed to Trump, the Ashley Judds, the Gwynneth Paltrows. They were all used by Weinstein or someone like him. More will come out every day.

Ben Affleck is next because he couldn't handle fame and power any better than the rest of them did. He's also Batman and Disney will not pass up the opportunity to bloody Warner Bros. nose.

The story is perverted by the desperate need of the powerful to maintain their power at all costs. ...

Tesla Recalls 11,000 Model X SUVs Because "Rear Seat May Not Lock Into Place"

While Tesla may or may not be partially assembling its Model 3 by hand, resulting in massive production delays, a problem has emerged involving its fully automated SUV, the Model X, and as the AP reports, Tesla is recalling 11,000 Model X SUVs worldwide because their rear seats might not lock into place.

According to the notice, Tesla is recalling vehicles with fold-flat second row seats made between Oct. 28, 2016, and Aug. 16, 2017. Tesla believes only about 3 percent of the recalled vehicles have the issue.

Tesla says some cables in the seat may have been improperly tightened, which prevents the left seat from locking in an upright position, and if it's not properly locked, it could move forward during a crash, which as the snapshot of the Model X crash test below shows, could be a problem.

The good news: the Palo Alto, California-based automaker says it has seen no reports of injuries from the issue, which was discovered during internal testing. Tesla began informing customers about the recall Thursday. Owners can take their Model X to a dealer for repairs or contact Tesla's mobile repair units.

The bad news: with every incremental recall, the reputation of Tesla's quality control will erode, which sooner or later may adversely impact the car's coolness factor; if that is gone, then Elon Musk will have a big problem. For now, however, the market does not appear too worried.

JPMorgan, Citi Just Boosted Their Loan Loss Reserves By The Most In 4 Years

Four months ago, when looking at the latest S&P/Bankcard data, we first reported that credit card defaults had surged the most since June 2013, a troubling development which ran fully counter to the narrative that the economy was recovering and the US consumer's balance sheet was improving.

The troubling deterioration prompted Moody's to pen its own report titled "Spike in Charge-off Rates Indicates a Slide in Underwriting Standards" and as Moody's analyst Warren Kornfelf wrote, the steep increase in credit card charge-off rates in 1Q'17 and 4Q'16 was the largest since 2009, and indicates that "strong underwriting standards in place since the financial crisis have deteriorated, potentially rapidly."

Then, following JPM's results earlier today, we showed that this concerning trend had persisted, with JPM reporting the second highest net credit card chargoffs in Q3 since the summer of 2013, and only a modest decline since the previous quarter.

It wasn't just the charge offs however: there was another red flag in JPM's results this morning in addition to the sharp 27% drop in the bank's FICC revenues: with ...

'Hawkish' Fed Minutes Crush Yield Curve To Flattest Since Start Of Last Recession

The persistent flattening of the Treasury yield curve appears to still have legs, and that may be a sign of economic trouble ahead.

As Bloomberg details, on Wednesday, the minutes of the Federal Reserve's September meeting revealed policy makers' resolve to stick to their tightening path.

The yield curve's reaction to that un-data-dependent hawkishness is very evident... (worsened by today's strong 30Y auction)

The difference between five- and 30-year yields fell below 92 basis points, near the lowest since the start of the last recession.

Policy Error?

Five-year Treasury notes are among the most sensitive to Fed policy.

Who needs an inverted curve for a recession after all?

Furthermore, banks don't seem to need a steeper curve either...

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.

Market Extra: S&P 500 is poised to make uncanny stock-market history—for doing almost nothing

How quiet is this stock market? By at least one measure, the S&P 500 is on pace to register is lengthiest period of quiescence in more than two decades.

First step in curbing income inequality isn't taxing the rich, IMF's Lagarde says

The first step toward reducing income inequality is to empower women and close the gender pay gap, Lagarde says.

4 unusual things to expect this earnings season

Investors can expect mention this quarter of some of the unusual and possibly one-off events of the last three months, including the three hurricanes that devastated parts of Texas, Florida and the Caribbean, and caused major damage in Puerto Rico.

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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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