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18Oct2017 Market Update: Wall Street Posting New Highs In Early Afternoon Trading, US Dollar Slips Marginally, Housing Probably Remains A Drag On Economic Growth In The Q3

Written by Gary

US major indexes remain near new highs as the DOW hovers above 23,000, with solid support from IBM (SPY +0.1%). US housing starts hit one-year low; building permits tumble


Here is the current market situation from CNN Money

North and South American markets are mixed today. The Bovespa is up 0.28% while the S&P 500 gains 0.15%. The IPC is off 0.13%.

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.

Dow hovers above 23,000, boosted by IBM

(Reuters) - The Dow Jones Industrial Average stayed above the 23,000-mark in late morning trading on Wednesday with solid support from IBM, which reported strong earnings.

U.S. housing starts hit one-year low; building permits tumble

WASHINGTON (Reuters) - U.S. homebuilding fell to a one-year low in September as Hurricanes Harvey and Irma disrupted the construction of single-family homes in the South, suggesting housing probably remained a drag on economic growth in the third quarter.

U.S. bankers hold onto hopes that Trump will boost profits

NEW YORK (Reuters) - Top U.S. bankers are still hoping that President Trump's administration will make policy changes to boost profits, but made clear in public comments in recent days that they are not seeing any signs of progress so far.

Ford to recall about 1.3 million trucks in North America for door latch fix

WASHINGTON (Reuters) - Ford Motor Co said on Wednesday it would recall about 1.3 million 2015-17 Ford F-150 and 2017 Ford Super Duty trucks in North America to add water shields to side door latches at a cost of $267 million.

UPS CEO says updated NAFTA better for economy than no trade treaty

DETROIT (Reuters) - The top executive of United Parcel Service Inc said on Wednesday he is optimistic the U.S., Canadian and Mexican governments can successfully renegotiate NAFTA, and said not having a free trade agreement in place would not be good for the three countries' economies.

Native American tribe holding patents sues Amazon and Microsoft

(Reuters) - A Native American tribe sued Amazon.com Inc and Microsoft Corp in federal court in Virginia on Wednesday for infringing supercomputer patents it is holding for a technology firm.

McDonald's South Korea office raided in burger probe: reports

SEOUL (Reuters) - South Korean investigators raided the Seoul office of McDonald's Corp on Wednesday following a series of complaints that children fell ill after eating hamburger patties alleged to have been undercooked, Yonhap News Agency and other media said.

Nasdaq, Singapore Exchange sign pact for collaborative listings

(Reuters) - Singapore Exchange Ltd and Nasdaq Inc announced a pact on Wednesday that will allow firms to tap the capital markets possibly simultaneously under the two exchange operators' namesake exchanges.

IBM shares head for biggest gain in eight years

(Reuters) - Shares in International Business Machines Inc surged 9 percent on Wednesday after it beat expectations on revenue and gave an outlook that hinted one of the world's first big computing names was back on a growth track after six years in retreat.

Is Bitcoin A Tower Of Monetary Babel?

Authored by Antonius Aquinas,

The promoters of crypto currencies have gushingly touted them as the mechanism by which the present central banking cabal and the system of nation states which derive much of their power from will be brought down and replaced by digital money.

Despite their meteoric rise as speculative "assets," there are fundamental economic reasons why they will never act as a general medium of exchange despite the wild enthusiasm for them by the crypto-currency cultists.

Money - a general medium of exchange - is the most marketable (exchangeable) commodity in an economy. As a good, money is not sought after for its direct use - to satisfy individual wants - but to satisfy wants indirectly through exchange for other goods. Over time, one good becomes money since it possesses qualities superior to all other goods as a money. When gold became demanded not for its "use value," but for its "exchange value," it became a general medium of exchange - money.

As a consumer good, gold possessed a value or a "price" prior to it becoming a money, as the eminent monetary theorist Murray Rothbard explains:

...embedded in the demand for money is knowledge of the money-prices of the immediate past; in contrast to directly-used consumers' or producers' goods, money must have pre-existing prices on which to ground a demand.

Critical Threats To 2017's Bull Market - Part 2: Over-hyped Risks?

With The Donald J. Industrial Average surpassing new record highs every day, questioning this bull market's continued existence remains heresy outside of dark little corners of the internet.

However, continuing his series, Bloomberg's macro strategist Mark Cudmore dares to mention a few of the more prescient 'known unknowns' that could hamper the meltup for the rest of the year... and in the case of today, some that may not.

Via Bloomberg,

Overhyped market risks provide just as many trading opportunities as genuine ones. It's crucial to delineate what matters and when.

Yesterday's piece highlighted threats that could cause a material correction before year-end.

Today's column argues that other oft-cited concerns can be safely ignored for the moment.

Nafta is prominent in the news and any move by President Donald Trump to abandon talks and exit the deal would have global repercussions. Still, that worst-case scenario won't be a 2017 issue. Even if Trump jumps, he has to give six months notice and Congress will fight to keep the U.S. in.

...

Happy Black Friday

Amsterdam | As the financial world happily fixates on who will be the next Fed Chairman, I am in Europe celebrating the 30th anniversary of Black Friday, October 19, 1987. Three decades ago, I was on a trading desk at Bear, Stearns & Co in London along with David, Joey, Gregory, Peter and Paul, among others. We had just finished a remarkable four year run, but the party was over.

That fateful day, our Treasury/MBS trader Matt got his eyes ripped out early in the day. His big mistake was answering the phone. Investors lifted every offer for US Treasury paper to be found. We were short a couple of bucks before 10 AM with no offers to be found. We stopped answering the phone way before lunch. Fortunately, we had large sell orders from several Japanese insurance companies so by the close Matt was flat and went home to have a couple of well-deserved pints.

This story is relevant today because the markets seem to have forgotten how it feels to be physically molested without the protection of Mother Fed. As I told Frank W. from Handelsblatt earlier today, the crash in 1987 was the last financial crisis where the private markets were allowed to function without government support. We had manipulated markets when I worked at the Fed of New York, but only on the margins.

Since 1987, however, the US government (i.e. the Federal Reserve) has turned market stability into an entitlement. The degree of government intervention in the markets has grown enormously since Black Friday 1987, with no authority or even acknowledgement from Congress, begging the question as to whether the United States can any longer be described as a free-market democracy.

Whether we admit it or not, the global markets are in the hands of a cadre of "experts" at the various central banks, who make decisions based upon private deliberations and questionable reasoning. The markets depend upon these experts to provide the expected stability, making the entir ...

China's Xi to World: Party First, Reform Second

The Chinese leader laid out a vision for a nation well on its way toward achieving "moderate prosperity"—one that is guided by the steady hand of the state.

Investors Need to Watch This Nasty Drug-Price Feud

Pharmacy-benefit managers are supposed to reduce drug prices but haven't, and their customers are pushing back.

Reckitt Makeover Clears Way for Pfizer Bid

The London-listed consumer group is doing what activist Nelson Peltz wants Procter & Gamble to do—but M&A may be an ulterior motive.

September 2017 Residential Building Slowing Cycle Continues

Written by Steven Hansen

The headline residential building permits declined and construction completions improved. But we keep our eyes on the rolling averages because of the significant monthly fluctuations.

Market Extra: 3 things investors need to know about Japan's snap election this Sunday

Japan is going to the polls to vote in a snap election. Though the result will likely give more power to the incumbent Prime Minister Shinzo Abe, there is a tail risk that could derail the yen.

Anthem dumps Express Scripts in favor of starting its own pharmacy-benefit manager

Anthem's entry is notable in a highly concentrated industry dominated by just a few large players.

Market Extra: 30 years after Black Monday, could stock market crash again?

It has been three decades since the most disastrous single day in U.S. stock market history, and investors can be forgiven for wondering if Wall Street learned its lesson.

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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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