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20Nov2017 Market Close: Wall Street Climbs Fractionally Higher With Telecoms Rise, Most Dangerous Moment For Markets Will Come In 3 Or 4 Months, Says BofA's Michael Hartnett

Written by Gary

US major indexes rose today (SPY +0.2%), with some of the year's under performing sectors leading the way. BofA's Apocalyptic forecast: stocks flash crash, bond bubble bursts in H1 2018, war may follow.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Telecoms rise, buoy Wall St. as quiet week kicks off

NEW YORK (Reuters) - U.S. stocks rose on Monday, with some of the year's underperforming sectors leading the way, while high-performing tech shares were boosted by a deal in semiconductors.

U.S. to sue to stop AT&T from buying Time Warner: source

WASHINGTON (Reuters) - The U.S. Department of Justice will file a lawsuit aimed at blocking AT&T Inc's $85.4 billion acquisition of Time Warner Inc , a source familiar with the matter told Reuters on Monday.

Canada, Mexico to question U.S. auto content demands at NAFTA talks

MEXICO CITY (Reuters) - Canada and Mexico will not make counterproposals to U.S. demands for tougher NAFTA automotive content rules but instead will question and rebut them on Monday, people familiar with the talks said.

Marvell Technology to buy rival chipmaker Cavium for $6 billion

(Reuters) - Chipmaker Marvell Technology Group Ltd said on Monday it would buy smaller rival Cavium Inc for about $6 billion, as it seeks to expand its wireless connectivity business in a rapidly consolidating semiconductor industry.

Amsterdam, Paris win post-Brexit EU agencies in lucky dip

BRUSSELS (Reuters) - Amsterdam and Paris won the right to host two EU agencies that must leave London because of Brexit after an extraordinary ministerial meeting in Brussels that left both results decided by drawing lots from a fishbowl.

Nebraska clears path for Keystone XL pipeline, in boost for Trump

LINCOLN, Neb./CALGARY, Alberta (Reuters) - Nebraska regulators approved a route for TransCanada Corp's Keystone XL pipeline through the state on Monday, lifting the last big regulatory obstacle for the long-delayed project that U.S. President Donald Trump wants built.

CBS warns of blackout in dispute with Dish

NEW YORK (Reuters) - CBS Corp said on Monday that satellite television provider Dish Network Corp could black out its programming, including holiday weekend sports events, if the companies fail to resolve a dispute over the fees Dish pays to carry its content.

Bitcoin hits record high after smashing through $8,000 for first time

LONDON (Reuters) - Bitcoin hit a new record high on Monday after smashing through the $8,000 level for the first time over the weekend, marking an almost 50 percent climb in just eight days.

BlackRock plans new active sector ETFs curated by robots

NEW YORK (Reuters) - BlackRock Inc is turning to the robots for its next big investment idea.

BofA's Apocalyptic Forecast: Stocks Flash Crash, Bond Bubble Bursts In H1 2018, War May Follow

Having predicted back in July that the "most dangerous moment for markets will come in 3 or 4 months", i.e., now, BofA's Michael Hartnett was - in retrospect - wrong (unless of course the S&P plunges in the next few days). However, having stuck to his underlying logic - which was as sound then as it is now - Hartnett has not given up on his "bad cop" forecast (not to be mistaken with the S&P target to be unveiled shortly by BofA's equity team and which will probably be around 2,800), and in a note released overnight, the Chief Investment Strategist not only once again dares to time his market peak forecast, which he now thinks will take place in the first half of 2017, but goes so far as to predict that there will be a flash crash "a la 1987/1994/1998" in just a few months.

Contrasting his preview of 2018 with the almost concluded 2017, Hartnett sets the sour tone early one, and says that he believes "2018 risk asset catalysts are much less bullish than in 2017" for the simple reason that the bearish positioning going into 2017 has been completely flipped: "positioning now long, not short; profit expectations high, not low; policy close to max stimulus; peak positioning, peak profits, peak policy stimulus means peak asset returns in 2018." He also goes on to point out that the historical omens are poor:



Bull market in S&P500 would become the longest ever on August 22, 2018 (and the second biggest ever at 2863 on S&P500).

Equities have only outperformed bonds for seven consecutive years on three occasions in the past 220 years (the last time was 1928 - Chart 1).

US To Announce "Major Antitrust Matter" Involving AT&T, Time Warner Merger; Shares Tumble

Just minutes after the DOJ announced that it would be unveiling a major anti-trust action late Monday, Bloomberg reported that AT&T will be the target of said action (as Amazon sneaks by one more day). Late last year, AT&T announced that it had agreed to buy Time Warner in another controversial merger of content creators and distributors.

The news hammered shares of Time Warner, which dropped nearly 2% as investors realized that the White House is preparing to act on President Donald Trump's campaign-season threat to block the $85.4 billion merger. Meanwhile, shares of AT&T climbed.

The reports are the culmination of more than a week of sparring over the deal and dealing a major blow to the carrier's bid to create a media and telecommunications empire, Bloomberg reported. NBC also confirmed the news.

The challenge would derail a deal that had appeared to be sailing toward approval as recently as a month ago. That was before the new US antitrust chief Makan Delrahim took up his position and took over the investigation. During negotiations he pushed for the companies to sell the Turner broadcasting unit or DirecTV, a request that AT&T rejected. Last week, reports emerged that the DOJ had asked Time Warner to sell cable news network CNN. Later, the DOJ said AT&T and Time Warner had offered to sell CNN if that would cause DOJ to drop its opposition to the deal.

Hyperinflation in Zimbabwe - It's back, but maybe not for long

Submitted by BullionStar.com

When a nation adopts a foreign currency it will typically face significant hurdles when it tries to rid itself of that currency, or de-dollarize. But Zimbabwe's autocratic ruler Robert Mugabe has appeared to have done the impossible. After dollarizing ten years ago, over the course of the last year or two he and his cronies have managed to throw off the U.S. dollar and re-introduce a Zimbabwean replacement.

We can see evidence of this new currency in Zimbabwe's stock market. Below I've charted the country's main equity index, the Zimbabwe Industrial Index, going back to 2011. What an incredible rise over the last year, right? Beware; these returns have nothing to do with real economic growth. Zimbabwean equities have switched from being claim on an a stream of cash flows denominated in U.S. dollars to a stream denominated in Zimbabwe's new currency. Because investors expect inflation of the new currency to drive up future cash flows, they have responded by bidding stock prices up. In real terms (i.e. U.S. dollar terms), stock prices are probably flat-and may have even declined.

The US Has Quietly Deployed More Than 500 Troops To Somalia

Authored by Jason Ditz via AntiWar.com,

One of the many quiet escalations in countries where US military operations on the ground hadn't really been well publicized in the first place, officials say that the US has more than doubled the number of ground troops in Somalia this year, and now have over 500 troops there.

This is the most troops the US have had in the country since 1993, when the Black Hawk Down incident killed 18 US soldiers and led to a quick withdrawal from the nation.

This year was also the first year since 1993 that any US troops died in Somalia.

This escalation has involved a soaring number of US airstrikes in Somalia, not to mention a number of joint ground operations with Somali forces, mostly against al-Shabaab fighters, but many of them with very unclear goals.

But the goals of the whole US operation in Somalia aren't exactly clear anyhow, with some vague interest in fighting al-Shabaab, and possibly the ISIS affiliate in Puntland, but little sign that the operation is anything but escalation for escalatio ...

Top of the Market? That Could Be a Good Thing

When is it going to end? And how? In a year when asset prices have surged, those are questions that should be nagging at investors' minds.

How to Spot a Market Top

With central banks scaling back stimulus in a world filled with money, the current investing nirvana is facing its biggest threat in years. Heard on the Street walks through the risks and likely scenarios for markets in the coming months.

Borrowing Bonanza in Emerging Markets

A decade of loose monetary policy from the Federal Reserve has sent gushers of cash to emerging markets. One big impact has been to reduce funding costs for a host of riskier, first-time borrowers such as Maldives and Tajikistan.

Tesla's biggest news last week was not the truck, says this fund manager

Tesla Inc. surprised Wall Street last week with a commercial truck with larger-than-expected battery range and a reboot of its iconic Roadster ultra-luxury sports car, but Michael Kramer, a fund manager with Mott Capital Management, thinks there's even bigger news.

Mark Hulbert: This chart on research productivity is bad news for the stock market

"Just to sustain constant growth in GDP per person," the professors behind this chart argue, "the U.S. must double the amount of research effort searching for new ideas every 13 years to offset the increased difficulty of finding new ideas."

Amazon's sketchy health products could hurt its big pharmacy ambitions

The online retailer sells supplements making grandiose health claims and medical devices that don't appear to have government oversight.

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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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