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30Oct2017 Market Update: Wall Street Extends Loss After Report Of Gradual Tax Cuts, U.S. Consumer Spending Grows At Fastest Pace Since 2009, Savings Drop

Written by Gary

US stocks extended losses in early afternoon trading today after a report that the House was discussing "a gradual phase-in" for President Trump's corporate tax cut plans.

Here is the current market situation from CNN Money

What Is Moving the Markets

Here are the headlines moving the markets.

Wall Street extends loss after report of gradual tax cuts

(Reuters) - U.S. stocks extended losses in early afternoon trading on Monday after a report that the House of Representatives was discussing "a gradual phase-in" for President Donald Trump's corporate tax cut plans.

U.S. consumer spending grows at fastest pace since 2009, savings drop

WASHINGTON (Reuters) - U.S. consumer spending recorded its biggest increase in more than eight years in September, likely as households in Texas and Florida replaced flood-damaged motor vehicles, but underlying inflation remained muted.

Apple touches record as brokerages bullish on iPhone X demand

(Reuters) - Several analysts downplayed concerns about Apple Inc's iPhone X production issues and were bullish on demand and sales, pushing the company's shares to a record on Monday.

U.S. regulator wants to loosen leash on Wells Fargo: sources

WASHINGTON (Reuters) - A leading U.S. regulator wants to make it easier for Wells Fargo to pay employees when they leave, loosening a restriction in place since a phony accounts scandal hit the bank last year, according to people familiar with the matter.

New Akzo Nobel boss pursues $30 billion deal with Axalta

AMSTERDAM/FRANKFURT (Reuters) - Dutch paints maker Akzo Nobel, seeking to recover after rejecting a takeover offer and issuing two profit warnings, is discussing a merger with smaller U.S. rival Axalta Coating Systems Ltd to create a $30 billion company.

Goldman CEO has high hopes for London HQ post-Brexit, much outside his control

LONDON (Reuters) - Goldman Sachs chief executive Lloyd Blankfein expects to fill the firm's new European headquarters which is currently under construction in London, but said Britain's exit from the European Union left much outside the bank's control.

Wall Street 2017 profits set to surpass last year's: report

(Reuters) - Wall Street profits for 2017 are set to exceed that of 2016, according to a report on Monday from New York State Comptroller Thomas P. DiNapoli.

Apple's Cook, Facebook's Zuckerberg meet China's Xi in Beijing

SHANGHAI (Reuters) - Apple Inc chief executive Tim Cook and Facebook Inc's Mark Zuckerberg met Chinese President Xi Jinping on Monday at an annual gathering of advisers to Beijing's Tsinghua University business school.

Cancer-drug setback sends Merck shares down again

NEW YORK (Reuters) - A setback for Merck & Co's key cancer drug sent the drugmaker's stock swooning on Monday for a second straight session, putting the shares on track for their biggest two-day decline in more than eight years.

FBI Is Probing Puerto Rico's $300 Million Power Contract With Whitefish Energy

Just a day after Puerto Rico's cash-strapped power authority on Sunday canceled its controversial $300 million contract with Whitefish Energy, a small Montana company tasked with rebuilding the island's power grid after it was completely destroyed by Hurricanes Maria and Irma, the WSJ is reporting that the FBI is looking into the circumstances surrounding the contract.

The contract was canceled on orders from Puerto Rico Gov. Ricardo Rossello, who pointed to the burgeoning controversy surrounding the company - including its relationship with Secretary of the Interior Ryan Zinke, who is from the same small Montana town where Whitefish is based.

Zinke issued a statement last week denying any involvement in the deal. Zinke is reportedly friends with Whitefish CEO Andy Techmanski.

The company has been criticized for moving too slowly in its efforts to restore power to the island. To date, only 30% of power customers on the island have had electricity restored, more than a month after Maria first made landfall along the island's southeastern coast.

As WSJ explains, the firm had more than 350 workers and 2,500 tons of heavy equipment on the ground for rebuilding electrical lines destroyed in Hurricane Maria. But the firm's small size and limited track record, as well as the terms of the contract, ignited concerns around Puerto Rico's management of the flow of federal disaster-relief dollars to the island.

The Federal Emergency Managem ...

Attention Deficit Nation

Authored by James Howard Kunstler via,

[Published before Mueller's charges were released]

I'm obliged to file this blog before Robert Mueller's office releases the name of the first winner in the Russian Election Meddling tribunal indictment lottery. Most of the betting is on Paul Manafort, the Swamp-creature-fixer-lobbyist-grifter who spent his summer vacation of 2016 managing Donald Trump's election campaign.

Before that unfortunate summer internship, Manafort was just a shadier-than-average influence-peddler. It happened that many of his clients were bigshots in foreign lands - Mobuto Sese Seko (Congo), Jonas Savimbi (Angola), and Ferdinand Marcos (Philippines), as well as interests in Equatorial Guinea, Kenya, the Dominican Republic, Pakistan, Nigeria, Ukraine, and other world beauty spots. Also, most notably, Russia where the wicked Mr. Putin dwells and incessantly plots evil against our shining city of a republic.

Over the years, Manafort took large sums of money to the DC laundry room and then distributed bales of it around town to other lobbyist subcontractors, but he left quite a trail. And he overlooked the requirement to register as an agent for foreign interests. So, indicting him looks like a no-brainer. An entry-level US Attorney could, figuratively speaking, hitch him up to the rear bumper of a Chevy Yukon and drag him over five miles of broken Coke bottles.

If I am right, his indictment will provoke a five-column headline in The ...

Why Goldman Just Downgraded GM To Sell

After GM's stock surged over 35% in the past two months, Goldman finally decided they had seen enough this morning and downgraded the stock to sell with a $32 price target.

So what caused the downgrade? Well, Goldman figures GM is facing just a few 'minor' headwinds over the next couple of years which include collapsing industry volumes and declining margins on crossover products which should result in a ~22% decline in EBIT next year...oh, and the fact that the company suddenly trades at an historically high multiple, just as earnings are about to collapse, was also viewed negatively by Goldman's auto team. Here's the summary of their downgrade:

"Looking ahead into 2018 and given the current valuation level, we see a downward infection in GM earnings and consequently downgrade shares to Sell. We expect that a normalization in SAAR coupled with the company's product launches in 2018 will weigh on GMNA pro?tability. Our work on pickup trucks and crossovers suggest that GM likely experiences volume and mix headwinds that exacerbate the cyclical pro?t headwinds. Combined, we see this driving 2018E EBIT -adjusted down by 22% yoy and compressing overall corporate margins. We see 28% downside to our 12-month price target of $32."

On overall industry volume, Goldman sees a 15% decline in U.S. SAAR over the next couple of years to 15mm which they think will be prompted by, among other things, "challenging consumer affordability" which will result from rising interest rates and a tightening of auto credit.

US cycle peaked, and production cuts likely continue: We believe cleared through pent-up demand (given sales above normalized l ...

A Stock Market Where the Rally is Actually Deserved

European stocks have rallied sharply this year, but based on companies actually making more money, not investor appetite for ever increasing earnings multiples.

HSBC Finally Finds a Taste of Growth in China

HSBC has been promising growth in China and now it seems to have found some with a chunky slug of extra lending in the southern Chinese province near its Hong Kong stronghold.

Millennials Have Fallen in Love With Gucci, for Now

Classic brands often blame millennials for sales downturns, but the younger generation is giving Gucci a sensational boost. This could assure the luxury goods maker years of growth, or leave it grumbling like everyone else about that fickle group.

September 2017 Headline Personal Savings Rate Plummets

Written by Steven Hansen

The headline data this month showed some growth in consumer income and spending - with expenditures far outpacing income growth. - all at the expense of the savings rate.

Europe Markets: Spanish stocks finish with their biggest daily gain in more than 3 weeks

European stocks achieved a fresh five-month closing high Monday, with much of the action centered around Spanish stocks after the central government in Madrid took control of the Catalonia region following its push for independence

Earnings Outlook: Apple earnings: iPhone X supply is the question, but the answer may not matter

Apple Inc. investors and analysts are convinced that the $1,000 iPhone X will lead to a return to revenue growth for the world's most valuable company, and questions about when it will actually make it into willing buyers' hands don't appear to have an effect.

Market Snapshot: Stock market retreats as health-care, consumer-staples shares slump

U.S. stock indexes on Monday trade lower, weighed by a slump in health-care and consumer-staples shares.

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