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13Oct2017 Market Close: Stocks And Commodities Rose While The Dollar Faded. Lower Than Expected Inflation Raised Fed Questions.

Written by Gary

U.S. stocks closed the week in record setting style as investor optimism for a solid third-quarter earnings season sparked a broad based rally in equities. Crude oil prices settled higher on signs of bullish Chinese demand while geopolitical uncertainty in the Middle East raised the threat of supply disruptions. Gold prices surged above $1300 on Friday supported by a dip in the dollar following inflation data that fell short of expectations sparking uncertainty about the presumed December Fed rate hike.

Todays S&P 500 Chart


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The Market in Perspective

Here are the headlines moving the markets.

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.

Data, tech stocks boost Wall Street

NEW YORK (Reuters) - U.S. stocks rose on Friday and the Nasdaq notched a record high, helped by upbeat economic data and gains in technology shares.

Weinstein Co said to explore sale or shutdown, but company denies report

(Reuters) - The Weinstein Co, the film production company part-owned by Harvey Weinstein, is exploring a sale or shutdown and is unlikely to continue as an independent entity, The Wall Street Journal reported on Friday, but the company's co-chairman, Bob Weinstein, denied the report.

Qualcomm files lawsuits in China to ban iPhones

(Reuters) - Qualcomm Inc confirmed an earlier report that the chipmaker had filed lawsuits in China, seeking to halt the manufacture and sale of Apple Inc's iPhones in the country.

Wells Fargo revises expense outlook, 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.

Wall Street raises targets on Netflix, citing price increases

(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.

Blackrock's Fink warns global surprise could drive major market correction

WASHINGTON (Reuters) - Blackrock Inc Chief Executive Officer Larry Fink warned on Friday that the market could face a "big correction" if a major world event occurred.

Saudi Aramco in talks to shelve international IPO: FT

(Reuters) - Saudi Aramco is considering shelving plans for an international public offering in favor of a private share sale to world sovereign funds and institutional investors, the Financial Times reported, citing people familiar with the matter.

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.

The 'Blade Runner 2049' Future (Not!)

Authored by James Howard Kunstler via Kunstler.com,

I took myself to the new movie Blade Runner 2049 to see what kind of future the Hollywood dream-shop is serving up these days. It was an excellent illustration of the over-investments in technology with diminishing returns that are dragging us into collapse and of the attendant techno-narcissism that afflicts the supposedly thinking class in this society, who absolutely don't get what this collapse is about. The more computer magic Hollywood drags into the picture, the less coherent their story-telling gets. Hollywood is collapsing, and it's not just because of Harvey Weinstein's antics.

Movies of this genre are really always more about the current moment than about the future, and Blade Runner 2049 is full of hilarious retro-anachronisms - things around us now which will probably not be in the future. The signature trope in many sci-fi dystopias of recent times is the assumed ever-presence of automobiles.

The original Mad Max was little more than an extended car chase - though apparently all that people remember about it is the desolate desert landscape and Mel Gibson's leather jumpsuit. As the series wore on, both the vehicles and the staged chases became more spectacularly grandiose, until, in the latest edition, the movie was solely about ...

Fed To Trump: It's Our Stock Market Bubble, Not Yours

President Trump continues to exuberantly promote the "unprecedented" stock market rally since his election...

It would be really nice if the Fake News Media would report the virtually unprecedented Stock Market growth since the election.Need tax cuts

— Donald J. Trump (@realDonaldTrump) October 11, 2017

But just how 'unprecedented' is it?

The answer is not simple.

For the 'Never-Trump'ers - always looking for a 'lie'... President Trump's post-election stock market gain does not make the Top 5.

As Bloomberg reports, going by the pace of gains, the 19 percent increase in the S&P 500 since Trump's victory trails Franklin Roosevelt, Bill Clinton, Herbert Hoover, George H. W. Bush and John F. Kennedy.

However.

For the #MAGA crowd - cheering Trump on... Global equity markets have gained over $22.5 trillion since President Trump was elected.

Weinstein Company Exploring Sale Or Shutdown

Hollywood film studio The Weinstein Company promptly jettisoned disgraced producer Harvey Weinstein following last week's New York Times bombshell, which documented the mogul's 30-year history of sexual harassment and assault abetted by the silence of his peers and colleagues. But given the shocking scope of Weinstein's alleged crimes (more than 30 victims have come forward to accuse him of harassment, groping or rape) and the pervasive speculation that everyone at his company was well-aware of Harvey's transgressions, the Weinstein name has been irreparably tarnished.

Therefore, rather than risk an embarrassing bankruptcy - one where stakeholders can demand discovery and expose even more dirty laundry - Weinstein Co.'s board is reportedly exploring a sale or shutdown, the WSJ reports. In any case, the studio is almost certainly not going to continue as an independent entity.

The board previously had been considering appointing co-chairman Bob Weinstein, Harvey Weinstein's brother, and President David Glasser to continue operating Weinstein Co. with a new name, but that plan is no longer on the table.

However, the board could face resistence if Harvey Weinstein has his way. TMZ is reporting that Weinstein plans to challenge his firing at the company's upcoming Oct. 17 board meeting. The topic of his firing is reportedly on the agenda for that meeting, which Weinstein - who is presently staying at a live-in rehab center in Arizona - will attend via call-in. Weinstein's civil lawyer, Patty Glaser, will be present at the meeting as well to make her client's case.

Weinstein plans to argue that he did not violate his current contra ...

The Rally's Relentless Bid Is "Unprecedented"

Via Dana Lyons' Tumblr,

The persistence of the recent stock rally is nearly unprecedented in the past 50 years.

Perhaps the most impressive aspect to the stock market rally over the past several months has been its relentlessness. Much to the bears' chagrin, it has felt as if the market is on a one-way ticket higher. If you have observed this reluctance on the part of stocks to go down, you are not imagining things. By some quantitative measures, the recent bid is among the most relentless the market has seen in the past half century.

For example, it's been our recent observation that, no matter how the market opened, it has consistently closed the day strongly. We took a look at that apparent trend more objectively and found some evidence to back up our observation.

Specifically, we looked at the recent intra-day behavior in the S&P 500. We did this by measuring the index's closing price minus its opening price on a daily basis. Positive readings indicated strong intra-day action while negative readings signaled weakness. We, in turn, tallied all of the negative intra-day readings (e.g., days when the S&P 500 closed below its open) over rolling 25-day periods.

Going back 55 years, the average cumulative intra-day losses over a 25-day period is about 660 basis points, or 6.6%. As of yesterday (October 10), the last 25 days have seen a grand total intra-day loss of just 96 basis points, or 0.96%. If that seems small, it is.

In fact, outside of the perio ...

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.

What We Read Today 13 October 2017

Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary "reading list" which will include very brief summaries (and sometimes longer ones) of why each item has gotten our attention. Suggestions from readers for "reading list" items are gratefully reviewed, although sometimes space limits the number included.

This feature is published every day late afternoon New York time. For early morning review of headlines see "The Early Bird" published every day in the early am at GEI News (membership not required for access to "The Early Bird".).

BECOME A GEI MEMBER - IT's FREE!

Every day most of this column ("What We Read Today") is available only to GEI members.

To become a GEI Member simply subscribe to our FREE daily newsletter.

Social Security Payments Up 2% Next Year

from the Social Security

Monthly Social Security and Supplemental Security Income (SSI) benefits for more than 66 million Americans will increase 2.0 percent in 2018, the Social Security Administration announced today.

The New York Post: 'Friday Night Lights' and 'Parenthood' actress Minka Kelly regrets Weinstein silence

Actress regrets the way she handled an uncomfortable situation with Harvey Weinstein.

Commodities Corner: Oil trades with 'caution and uncertainty' as Trump announces new strategy on Iran

President Donald Trump refuses to certify Iran's compliance with the nuclear deal and oil prices back off earlier gains.

The Ratings Game: Box shares close at 4-month high as new products make case for $1 billion revenue target

Box Inc. shares rally Friday for their highest finish in more than four months after the cloud enterprise software company said its rollout of new products and partnerships puts it on track to reach $1 billion in annual revenue in four years.

Summary of Economic Releases this Week

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Earnings Summary for Today

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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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