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06Nov2017 Market Update: Wall Street Higher, DOW Up 16 Points, Dealmaking In Chip Sector Lifts Nasdaq To Record Level, WTI Crude Rises Into The 57 Handle

Written by Gary

The three major US stock market indexes set new historic highs this morning after opening lower (SPY +0.1%). Early afternoon trading has the large caps trading sideways and flat while the small caps are fractionally higher.


Here is the current market situation from CNN Money

North and South American markets are higher today with shares in Brazil leading the region. The Bovespa is up 0.44% while U.S.'s S&P 500 is up 0.11% and Mexico's IPC is up 0.06%.

What Is Moving the Markets

Here are the headlines moving the markets.

Broadcom offers $103 billion for Qualcomm, sets up takeover battle

(Reuters) - Broadcom Ltd made an unsolicited $103 billion bid for Qualcomm Inc on Monday, setting the stage for a major takeover battle as the chip maker looks to dominate the fast-growing market for semiconductors used in mobile phones.

Dealmaking in chip sector lifts Nasdaq to record level

(Reuters) - The Nasdaq rose to hit a new intraday high on Monday, buoyed by the news of a potential $103-billion megadeal in the chip sector, while gains on the S&P and the Dow were capped by losses in the telecom sector.

Supreme Court rejects Samsung appeal of patent loss to Apple

(Reuters) - The U.S. Supreme Court on Monday refused to step back into the years-long feud over patents between the world's top smartphone makers, declining to hear Samsung's appeal of a lower court ruling that reinstated a jury award of about $120 million in favor of Apple.

Sprint shares plunge after T-Mobile merger talks called off

NEW YORK (Reuters) - Sprint Corp's shares fell more than 13 percent on Monday after the No. 4 U.S. wireless carrier called off merger talks with T-Mobile US Inc and a wireless partnership with cable company Altice USA failed to appease investors.

U.S. truck firms accelerate into the merging lane

The consolidation of the U.S. trucking industry is picking up speed, with big trucking companies and private equity funds scooping up smaller firms as a U.S. regulatory mandate is set to go into effect and as drivers push for higher wages.

Goldman Sachs, China's CIC to launch up to $5 billion fund: sources

HONG KONG (Reuters) - Goldman Sachs is partnering with sovereign fund China Investment Corp (CIC) to jointly launch an up to $5 billion fund to invest in U.S. manufacturers, according to people familiar with the situation.

EU resumes Bayer-Monsanto deal review; new deadline March 5

FRANKFURT/BRUSSELS (Reuters) - The European Commission has resumed its antitrust review of Bayer's planned takeover of U.S. seed maker Monsanto after the companies were given time to provide more information.

Rebuffed by American Airlines, Qatar Airways buys into Cathay Pacific

DUBAI/SINGAPORE (Reuters) - Qatar Airways has broadened its global reach by purchasing a 9.61 percent stake in Cathay Pacific , adding another strategic investor to the Hong Kong carrier's complicated share register at a time when it is looking to cut costs.

Wells Fargo launches robo-adviser to target new investors

(Reuters) - Wells Fargo Inc on Monday launched a new robo-adviser to give first-time investors a low-cost option to invest, joining other financial firms in the hunt for tech-savvy customers looking to enter the markets.

Tech Stocks Accounted For 75% Of The Market's October Return

For some context on the unprecedented dominance of the tech sector on the overall market, here is some perspective from BofA's Savita Subramanian on October returns, when Tech continued to lead the other ten sectors, generating +7.8% on a total return basis. This translates into a whopping 75% of the S&P 500's return last month!

Furthermore, with virtually every lagging hedge fund rushing to buy the tech sector, chasing such activist central banks as the SNB, the sector's 24.5% weight in the S&P 500 is now the highest since October 2000.

That said, considering tech companies reported some of the strongest 3Q earnings results, the best revision trends, and rank at the top of BofA's quant model, is there anything to be concerned about?

According to BofA, the biggest risk is the extreme crowding and positioning by fund managers. As Subramanian expains: "we hear frequently from clients, 'you don't want to sell Tech until year end.' And funds certainly reflect this sentiment: Tech is the most overweighted sector by large cap active managers, displacing Discretionary whose relative weight dropped for the sixth consecutive month." As noted above, the recent Tech rally means the sector now represents 24% of the S&P 500 index - a post-tech bubble high - and a remarkable 30% of all active fund holdings today, the highest levels in BofA data history since 2008 (Chart 1).

Gold Spikes Above Key Technical Level As USDJPY Tumbles

As European markets closed this morning, all bids disappeared from USDJPY and the pair dropped back below 114.00. In its mirror-like manner, gold reflected this tumble and surged above its 100-day moving average over $1280.

If you're looking for a catalyst, good luck. Fed'd Dudley was speaking but focused on regulation with no monetary policy comments. No new headlines from Asia/Trump. It seems the closing bell in Europe is all that is needed to panic-buy Yen.

Perhaps it's just a delayed reaction to the chaos in the middle-east this weekend?

Divergences sending bearish message to stocks?

The 2-pack below compares the Cap weighted and Equal weighted performance year to date of the S&P 500 and Nasdaq 100-

Saudi Crackdown Doesn't Guarantee Aramco IPO -- Or Higher Oil

Oil markets are rising after the Saudi heir apparent - a big proponent of state oil firm Aramco's planned IPO - rounded up a swathe of potential rivals on Saturday night. Investors should be careful not to interpret this as the all-clear for oil prices or Aramco.

SoftBank's Blurry Vision

The Japanese tech giant's boss Masayoshi Son likes control. The collapse of the Sprint/T-Mobile deal talks suggests that is slipping from his grasp.

Why Companies Are Betting Big on Growth

Investors are rewarding companies that are investing to boost growth, and with ample cash available, the trend of strong business investment should persist.

October 2017 Conference Board Employment Index Growth Rate Significantly Improves

Written by Steven Hansen

The Conference Board's Employment Trends Index - which forecasts employment for the next 6 months improved with the author's saying "The bounce back in the Employment Trends Index in October was one of the largest monthly increases ever".

Experts say this is the ideal retirement savings timeline

Experts say this is the ideal retirement savings timeline.

Capitol Report: Trump says Texas shooting due to 'mental health problem' | Voters favor Democrats over Republicans in 2018 House midterms: poll

President Donald Trump pins Texas shooting on 'mental health problem,' not gun laws; voters favor Democrats over Republicans by wide margin in poll; Sen. Bob Menendez could stay in office even if convicted; and more.

Grow: How interval training improved my finances

I used it to boost my race time—and my income.

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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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