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31Oct2017 Market Update: Consumer Staples Lead Gains On Wall Street, WTI Crude Trends Higher, Gold Index Slides Fractionally

Written by Gary

US stock market index futures are slated to open fractionally higher (SPY +0.2%), after following new earnings reports. Investors also waiting on an announcement for the new Federal Reserve head.


Here is the current market situation from CNN Money

North and South American markets are mixed. The S&P 500 is higher by 0.13%, while the Bovespa is leading the IPC lower. They are down 0.47% and 0.39% respectively.

What Is Moving the Markets

Here are the headlines moving the markets.

Consumer staples lead gains on Wall Street

(Reuters) - Upbeat earnings from consumer companies Mondelez and Kellogg put the benchmark S&P index on track for its best monthly gains since February.

Apple could drop Qualcomm components in next year's iPhones, iPads -sources

(Reuters) - Apple Inc has designed iPhones and iPads that would drop chips supplied by Qualcomm Inc , according to two people familiar with the matter.

U.S. business group worries Trump unprepared for commercial talks with China

BEIJING (Reuters) - A top U.S. business lobby in China said on Tuesday it was concerned U.S. President Donald Trump's administration was not making sufficient preparation for talks on imbalances in the bilateral economic relationship ahead of his November visit.

Mastercard posts record profit on higher global spending

(Reuters) - Mastercard Inc on Tuesday posted a record profit and trounced Wall Street expectations, as it battled for consumers and global market share over other payment channels including its bigger rival Visa Inc .

Trump says he is not looking to phase in corporate tax cut

WASHINGTON (Reuters) - President Donald Trump said on Tuesday that he was not looking for the corporate tax rate reduction that the White House is seeks to be phased in over time.

Exclusive - Orange is the new bank? Telecoms giant ventures into lending

PARIS/LONDON (Reuters) - Telecoms giant Orange launches its own bank on Thursday, aiming to win 25 percent of France's online banking market by capitalizing on the rising use of smartphones to steal share from established lenders with inferior technology.

ADP, ISS reject Ackman's claims they exchanged non-public data

(Reuters) - Automatic Data Processing Inc rejected as "false and misleading" on Tuesday the accusation by billionaire investor William Ackman that the company gave proxy adviser Institutional Shareholder Services non-publicly disclosed information.

Kellogg's surprise sales increase cheers investors

(Reuters) - Kellogg Co surprised investors on Tuesday with its first quarterly sales increase in more than two years, showing it was turning a corner after massive cost cuts and a shift to healthier products, sending its shares up 7 percent.

Google ditched autopilot driving feature after test user napped behind wheel

ATWATER, Calif. (Reuters) - Alphabet Inc's self-driving car unit stopped developing features that required drivers to take control in dangerous situations, its chief executive said Monday, as autopilot reliance left users prone to distractions and ill-prepared to maneuver.

The Scariest Charts In The World

Authored by Anthony Doyle via BondVigilantes.com,

Investment markets have been remarkably resilient over the course of 2017. Sure, the geopolitical environment has thrown up a few frightening days which saw markets sell-off but on the whole volatility has been muted and most asset classes have generated solid total returns. That said, any horror movie fan will tell you that the scariest part of a horror film happens when things are relatively calm. With that in mind, here are a few charts that shine a light on a number of threats that are lurking just below the surface of the global economy.

1. ECB quantitative easing has propped up government bond markets

The strength of the European economy, and signs of labour market healing across the euro area, has been the surprise story of 2017. It is undeniable that the ECB, and its quantitative easing programme, has played a huge part in the economic success seen to date. Many point to the fall in yields on peripheral area debt as a sign that the euro sovereign debt crisis is well and truly over. The question is, do falling yields signify increasing confidence in the ability of euro area nations to repay their debt, or do they simply reflect the asset purchases that the ECB has conducted since the QE programme started? The above chart, published in the most recent IMF Global Financial Stability Report, shows that official purchases of euro area debt has eclipsed net issuance since May 2015. Indeed, ECB Q ...

What Kentucky's Retirement Rush Says About The Future of State Pensions

Via The Daily Bell

Just because a Ponzi scheme is run by a government doesn't mean it won't collapse.

The situation in Kentucky serves as a dire warning about larger pension systems including Social Security.

What Kentucky is currently facing in like a bank run. When people hear that a bank is failing, they all scramble to get their money out before it goes bust. This snowballs and the bank runs out of cash that much quicker.

Kentuckians are retiring in droves, hoping to get a piece of the pension funds they were promised. Worried that the money might not be there in a few years, they are opting to start collecting now, lest they get nothing. But this is causing a run-on-the-bank effect. The pension system is collapsing that much quicker.

Podesta Fires Back: "I'm The Victim Of A Big Lie"

Earlier this morning we noted a pair of Trump tweets which seemingly called on the Podesta brothers to "Drain the Swamp" by dishing whatever "earth shattering" dirt they have on Democrats to Special Counsel Mueller (see: Trump Calls On Podesta Bros To "Drain The Swamp" By Revealing "Earth Shattering" Dirt On Dems).

Now, it seems as though one of the embattled Podesta brothers, Hillary's former campaign chair John Podesta, is more than ready to engage in a twitter war with the President after firing back that he's the "victim of a big lie campaign by the American President."

"Not bad enough that I was the victim of a massive cyber crime directed by the Russian President."

"Now I'm the victim of a big lie campaign by the American President "

Not bad enough that I was the victim of a massive cyber crime directed by the Russian President (1/3)

— John Podesta (@johnpodesta) October 31, 2017

Now I'm the victim of a big lie campaign by the American President (2/3)

— John Podesta (@johnpodesta) October 31, 2017

Of course, Podesta's tweets come after his brother, Tony Podesta, was forced to resign from a firm that the two founded together in 1988 after it was ...

Goldman: "Short-Term Unemployment Is At Levels Not Seen Outside Of Major Wartime Mobilizations"

When it comes to the US labor market, it's a tale of two extremes according to a recent report by Goldman Sachs.

At one end, the rate of short-term unemployment, defined as those unemployed fewer than 15 weeks, is lower than at any point since the Korean War and is already 0.4% below the bottom reached in the late 90s boom, with half of the gap likely due to demographic change. According to Goldman economists, "from the perspective of workers transitioning briefly between jobs whose attachment to employment is high, this is already a very tight labor market."

At the other end, the pool of struggling workers at the margins of the labor market remains larger than in past expansions. In particular, the rate of medium- to long-term unemployment, defined as those unemployed at least 15 weeks, remains 0.75% higher than the low reached in the late 90s boom, and almost none of that gap is attributable to demographic change.

The delta between the two labor markets is shown in the chart below.

Without going to much into the reasons behind this divergence here (we will cover them in a subsequent post), the current state of the labor market presents a difficult trade-off for monetary policymakers, Goldman claims. On one hand, the pool of struggling workers on the margins of the labor force is still noticeably higher than in past expansions, and the possibility of bringing some of them back into employment is not an entirely lost cause. Quantified, this would represent a potential influx of millions of potential workers who have mostly fallen out of labor force for one reason or another. Their return could be catalyzed by a hotter labor market which would likely raise their probabilit ...

Startups That Never Grow Up

The flood of cash into startups has allowed companies to stay private for far longer than in the past, raising the question of whether many companies are worth the $1 billion-plus values private investors have attached to them.

The Wild Card in This $66 Billion Health-Care Deal

Long-term investors tend not to put much weight on daily share price gyrations. CVS Health shareholders don't have that luxury.

Samsung Needs to Keep Pushing the Reform Button

The Korean tech giant is raising its dividends and improving its corporate governance. It needs to do more to unlock the discount at which it trades to global peers.

November 2017 Economic Forecast: Marginal Improvement Relative To Last Month's Forecast

Written by Steven Hansen

Econintersect's Economic Index marginally improved and squeaked back into territory associated with normal growth. Economic growth in 2017 has remained in a very narrow band.

To take the fight to Nike, Under Armour got too big too fast

Under Armour's growth, an attempt to keep up with well-established companies like Nike and Lululemon, has driven down results, experts say.

The Technical Indicator: S&P 500's powerful bull trend meets seasonal tailwind

The U.S. stock benchmarks' best six months seasonally — November through April — are poised to kick off amid an already powerful 2017 bull trend, writes Michael Ashbaugh.

Europe Markets: European stocks close at 5-month high as October ends with 1.9% gain

Europe's benchmark stock index scored a more-than-five-month closing high on Tuesday, capping off October with a monthly gain as traders welcomed earnings reports from the likes of airline Ryanair Holdings and oil major BP.

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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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