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13Oct2017 Market Update: Wall Street Rally Full Steam Ahead, Apple And Other Technology Stocks Sent The Three Major Wall Street Indexes To Record Highs

Written by Gary

US stock markets record new historic highs boosted by Technology stocks (SPY +0.2%). U.S. Rig Count is down 5 rigs from last week to 734.


Here is the current market situation from CNN Money

North and South American markets are higher today with shares in Brazil leading the region. The Bovespa is up 0.28% while U.S.'s S&P 500 is up 0.23% and Mexico's IPC is up 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.

Baker Hughes Rig Count: U.S. -8 to 928 rigs

U.S. Rig Count is down 8 rigs from last week to 928, with oil rigs down 5 to 743, gas rigs down 2 to 185, and miscellaneous rigs down 1 to 0.

U.S. Rig Count is up 389 rigs from last year's count of 539, with oil rigs up 311, gas rigs up 80, and miscellaneous rigs down 2 to 2.

The U.S. Offshore Rig Count is down 2 rigs from last week at 20 and down 3 rigs year-over-year.

What Is Moving the Markets

Here are the headlines moving the markets.

Technology stocks boost Wall Street to record highs

(Reuters) - A jump in Apple and other technology stocks sent the three major Wall Street indexes to record highs on Friday, but a drop in health insurers and hospital operators kept the rally in check.

Wells Fargo revises expense target, signaling profit difficulties ahead

(Reuters) - Wells Fargo & Co management signaled on Friday that the bank may struggle to hit expense targets through next year, raising questions about how much a sales scandal is weighing on the bottom line.

Goldman exploring options for stake in Weinstein Co

(Reuters) - Goldman Sachs Group Inc said on Friday it was exploring options for the stake it holds in the Weinstein Co following allegations of sexual harassment against co-Chairman Harvey Weinstein.

BofA profit rises on higher rates, lower costs

(Reuters) - Bank of America Corp beat expectations with a 15 percent rise in third-quarter profit on Friday as the second-largest U.S. lender kept a tight leash on costs and benefited from higher interest rates.

First spending boost in years set to pad tech stock earnings

NEW YORK (Reuters) - The first global increase in corporate spending since 2012 will likely boost the earnings of technology companies outside of the so-called FAANG group of Facebook Inc , Amazon.com Inc , Apple Inc , Netflix Inc and Google , adding momentum to a 25 percent rally in the sector for the year to date.

Gasoline boosts U.S. consumer prices, underlying inflation tame

WASHINGTON (Reuters) - U.S. consumer prices recorded their biggest increase in eight months in September as gasoline prices soared in the wake of hurricane-related production disruptions at oil refineries in the Gulf Coast, but underlying inflation remained muted.

Wall Street raises targets on Netflix, citing price increases

NEW YORK (Reuters) - Netflix Inc shares hit an all-time high on Friday as Goldman Sachs and other brokerages raised their price targets on the world's biggest online-streaming company, citing its ability to raise fees without scaring away customers.

Facebook launches U.S. food order and delivery service

(Reuters) - Facebook Inc on Friday launched a service through which its U.S. users can order food for take-away or delivery directly through its app or website.

Amazon Studios chief Roy Price suspended following harassment allegation

SAN FRANCISCO (Reuters) - Amazon Studios chief Roy Price was put on an immediate leave of absence Thursday, the company said, following allegations that he harassed a producer and ignored an actress's claim of a sexual assault by producer Harvey Weinstein.

Bank of America: "This Is The Most Consensus Trade In The World"

One week ago, BofA chief investment strategist Michael Hartnett laid out his reasoning for why a market correction is imminent:



Global stock market cap up a massive $18.5tn (= US GDP) since Feb'16 lows

3P's (Positioning, Profits, Policy) thus closer to peak than trough: BofAML Bull & Bear Indicator was 0 in Feb'16, now 6.9; global EPS growth was -6% YoY in early- 2016, now 14% YoY; $2.0tn of asset purchases by central banks YTD but Fed & ECB will taper next 6 months

Q4 "top" in equities and credit driven by:

a. pricing-in of US tax reform (= peak Policy),

b. rise in MOVE index (= peak Positioning),

c. rally in oil + trough in Chinese RMB + upgrades to global GDP (= peak Profits)



Tax reform = "peak policy" = buy rumor, sell fact; passage of reform or cuts = quicker Fed balance sheet reduction + less share buybacks as capex accelerates; US equities lose 2 big tailwinds next year (since 2009 lows S&P equity market cap up $15.3tn, Fed's balance sheet up $4.5tn, share buybacks up $3.5tn)

Big jump in the MOVE index of US Treasury market volatility (i.e. "bond shock") catalyst for cross-asset volatility (QE has neutered impact of bond volatility on equity prices but the negative correlation will return as monetary policy normalizes)

Fast forward to today when... nothing at all has happened, again: stocks are at new all time highs, the VIX is back to a whisker above 8, junk bonds issued by "emerging" countries with unpronouncable names are 5x oversubscribed, and complacency abounds despite the world being one tweet away from nuclear war.

There ar ...

Buchanan Asks "Is Trump The Heir To Reagan?"

Authored by Patrick Buchanan via Buchanan.org,

Three decades ago, as communications director in the White House, I set up an interview for Bill Rusher of National Review.

Among his first questions to President Reagan was to ask him to assess the political importance of Barry Goldwater. Said Reagan, "I guess you could call him the John the Baptist of our movement."

I resisted the temptation to lean in and ask, "Sir, if Barry Goldwater is John the Baptist, who would that make you?"

What brings the moment back is Laura Ingraham's new book: "Billionaire at the Barricades: The Populist Revolution from Reagan to Trump." Thesis: Donald Trump is a conservative populist and direct descendant and rightful heir to Ronald Reagan.

To never-Trumpers this is pure blasphemy. Yet the similarities are there.

Both men were outsiders, and neither a career politician. Raised Democratic, Reagan had been a Hollywood actor, union leader and voice of GE, before running for governor of California.

Trump is out of Queens, a builder-businessman in a Democratic city whose Republican credentials were suspect at best when he rode down that elevator at Trump Tower. Both took on the Re ...

Wells Fargo Falls Further Behind

Wells Fargo's third-quarter earnings were a disappointment. Far from digging itself out of trouble, the bank is making a deeper hole.

Inflation Unfriends the Fed

Low inflation is making the Federal Reserve's plan to raise rates one more time this year look a bit iffy.

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.

Capitol Report: U.S. renters still not getting much price relief

Renters still can't catch a break: Prices are still rising rapidly despite a rush by builders to finish more apartments in the past few years.

Project Syndicate: Trump is dismantling U.S. alliances, and that's not good for the dollar

People have been predicting the demise of the dollar for decades, but if Donald Trump manages to weaken long-standing political and military alliances, it could come true, writes Barry Eichengreen.

Hurricane Ophelia is headed for an unlikely place — Ireland

Ophelia is on track to move near or even over Ireland and the western U.K. in the next three to four days and strong winds and rain are looking increasingly likely for both, the National Hurricane Center said.

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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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