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20Oct2017 Pre-Market Commentary: Wall Street Futures Up After Senate Clears A Hurdle To Tax Cuts, Trump Tax Reform Hopes Boost Dollar, Stocks, Bond Yields, WTI Crude Slips

Written by Gary

US stock market future indexes point to a higher opening this morning (SPY +0.2%) continuing investors appetite for risk. Senate Republicans approved a $4T budget measure late Thursday.


Here is the current market situation from CNN Money

European markets are higher today with shares in London leading the region. The FTSE 100 is up 0.23% while Germany's DAX is up 0.15% and France's CAC 40 is up 0.15%.

What Is Moving the Markets

Here are the headlines moving the markets.

Trump tax reform hopes boost dollar, stocks, bond yields

LONDON (Reuters) - European stocks, the dollar and bond yields climbed on Friday as investors speculated that the "Trumpflation trade" could be back in play, after the U.S. Senate approved a budget blueprint that paves the way for tax cuts.

Schlumberger warns of moderating North American activity

(Reuters) - Schlumberger Ltd posted a bigger quarterly profit on Friday as its North American business continues to be helped by strong shale drilling, but the oilfield services giant said that investments in the region was moderating.

GE stock drops as profit misses, CEO cuts forecast

NEW YORK (Reuters) - General Electric Co's third-quarter profit missed Wall Street estimates by a wide margin on Friday and the industrial conglomerate slashed its earnings forecast, sending the year's worst-performing Dow stock down another 6 percent.

P&G's profit beats Wall Street on higher sales of beauty, home care

(Reuters) - Consumer goods giant Procter & Gamble Co , which recently declared victory in an historic proxy fight with activist investor Nelson Peltz, reported a better-than-expected quarterly profit on Friday but sales slightly missed Wall Street estimates.

Low pay, no bonus: U.S. retailers struggle with hiring

(Reuters) - U.S. retailers are finding it increasingly difficult to hire employees for stores and for middle and higher management as low pay and a feeling of uncertainty clouds the industry following a spate of bankruptcies and store closures.

UK business minister travels to Canada for talks on Bombardier deal

LONDON (Reuters) - British Business Secretary Greg Clark will hold talks in Canada on Friday to discuss Airbus SE's plans to buy a majority stake in Bombardier's C-Series jetliner program aimed at helping it avoid high U.S. import tariffs.

Futures up after Senate clears a hurdle to tax cuts

(Reuters) - U.S. stock index futures edged higher on Friday after the Senate cleared a budget blueprint, taking the Trump administration a step closer to fulfilling its promise of lowering taxes to stimulate growth.

Singapore Airlines to finalize $13.8 billion Boeing order next week

SINGAPORE (Reuters) - Singapore Airlines Ltd said on Friday it will finalize an order for 39 Boeing Co aircraft worth $13.8 billion at list prices when Singaporean Prime Minister Lee Hsien Loong visits Washington D.C. next week.

Japan's Kobe Steel says violated statutory standards, losing customers

TOKYO (Reuters) - Kobe Steel Ltd sank deeper into crisis on Friday as the embattled company said it had lost some customers to competitors because of widespread data falsification that had extended to its mainstream steel sheet business.

Gold Up 74% Since Last Market Peak 10 Years Ago

Gold Up 74% Since Last Market Peak 10 Years Ago

- 10 year anniversary of pre-Global Financial Crisis market peak in S&P 500 on October 9th
- Gold up 74% since the last market peak a decade ago; 11% pa in USD, 9.4% pa in EUR and 12.4% pa in GBP
- Precious metal has climbed $736/oz on Oct 9th 2007 to $1278.75 ten-years later
- S&P 500's 102% climb is thanks to asset-pumping policies by central banks, rather than value
- Gold's performance is slowly forcing mainstream to re-consider gold
- "Notion of gold as a hedge against serious risk aversion is tr ...

General Electric Plunges 5% After Slashing Guidance

While it may not have slashed its dividend, yet, General Electric shares plunged 5% in the pre-market after the company cut its 2017 profit forecast while its new CEO grapples with one of the deepest slumps in the iconic US manufacturer's history. The company reported that adjusted earnings this year are expected to be only $1.05 to $1.10 per share, down over 30% from a previous range of $1.60 to $1.70 a share. This is also sharply lower than the sellside consensus of $1.54 a share.

For the current quarter, the industrial conglomerate and maker of jet engines and gas turbines reported adjusted Q3 EPS of 29 cents, nearly 50% below the 50 cent consensus estimate.

As Bloomberg reports, the revision underscores the severity of the challenges facing Chief Executive Officer John Flannery, who took over Jeffrey Immelt's longtime post in August. With hurdles from poor cash flows to slumping power-generation markets, GE is by far the biggest loser on the Dow Jones Industrial Average this year and has seen a quarter of its market value evaporate.

The cut is the latest step in what is shaping up to be a dramatic repositioning of GE under its new leadership. Flannery this month welcomed a representative of activist investor Trian Fund Management to GE's board and announced several management changes. He is seeking deep cost cuts and has said he will consider all options, including portfolio changes.

In addition to GE no longer using a " ...

Stocks Hit New Record Highs, Dollar Jumps On Senate Vote; Japan Has Longest Winning Streak In History

Global stocks hit new all time highs overnight, with US stock-index futures, Asian and European stocks all rising overnight after the Senate adopted a fiscal 2018 budget resolution, paving the way for Trump's $1.5 trillion in tax cuts, while news that "dove" Jay Powell may be the next Fed chair added to the risk-on sentiment.

Among key macro trades, the USD rallied on optimism Trump tax cuts are a step closer, with USD/JPY close to 113.50 and USD/CHF back above 200DMA. USTs push through overnight lows dragging bunds and gilts lower; short Sterling strip initially bid higher after dovish Cunliffe comments before unwinding due to steepening in Eurodollars. European equity markets opened higher but ground back towards flat, as mining stocks and banks outperform. The euro slipped as investors awaited the next move in Spain's Catalan crisis, and the yen fell ahead of Japan's election. Gold dropped along with European bonds as safe havens lost favor. WTI crude fell as Iraq sought to restore flows from fields in a disputed region. Spanish banks Sabadell and Caixabank weigh on IBEX after Catalan separatists target them for deposit withdrawals; not reflected in Spanish bonds, however, which actually outperform. ZAR weakest in EMFX due to speculation Deputy PM could be fired; crude futures pressured by the strong USD.

In the top overnight event, the Senate voted to adopt budget resolution through 51-49 vote, which paves the way for a tax overhaul and shields a future tax reform bill from a Democrat filibuster. To be sure, this is only the first step in a process that only now becomes fraught with disagreement among republicans. Sure enough, "the budget still has to pass the House, but near-term, it should be supportive for the dollar," said Shinichiro Kadota, a senior foreign-exchange strate ...

Box Stacks Up its Cloud Gains

Young tech companies like to move fast and break things, but humbled upstart Box has discovered the value of taking things slow and steady.

How the Stalled Aramco IPO Could Hamper Hong Kong's Dreams

An Aramco listing in Hong Kong would stoke the city's ambitions to become the place where Chinese capital meets international companies.

Chenault's Unfinished Business at AmEx

American Express CEO Ken Chenault is going out on a high note, but his successor will have to contend with fundamental questions about the company's business.

The Conversation: A quarter of American drivers might be better off using Uber or Lyft than owning a car

Add up the full cost of ownership, including your time, to see where you stand.

Mark Hulbert: This tech giant is the No. 1 stock for top newsletter advisers

IBM's shares are outperforming Apple's and getting investors' attention, writes Mark Hulbert.

Why you shouldn't trust the recent gains in oil prices

While a warming of relations between Saudi Arabia and Russia is a positive for crude prices in the long term, but serious risks remain in the short term.

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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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