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07Dec2017 Market Update: Wall Street Advances As Tax Overhaul Looms Over Market, DOW Up Triple Digits, WTI Crude Shows Strength As The Gold Index Declines Further

Written by Gary

The US equities main benchmarks, in a reversal from this mornings prognostication, are modestly in the green (SPY +0.3%) as tax overhaul looms over market. Boeing, Merck, GE, Visa, Nike, Cat power Dow advance.


Here is the current market situation from CNN Money

North and South American markets are mixed today. The S&P 500 is up 0.37% while the IPC gains 0.30%. The Bovespa is off 1.03%.

Traders Corner - Health of the Market

What Is Moving the Markets

Here are the headlines moving the markets.

General Electric to cut 12,000 jobs in power business revamp

ZURICH (Reuters) - General Electric Co said Thursday it is axing 12,000 jobs at its global power business, the struggling industrial conglomerate's latest effort to shrink itself into a more focused company.

Bitcoin surges above $15,000 after climbing $2,000 in 12 hours

LONDON (Reuters) - Bitcoin rocketed above $15,000 for the first time on Thursday, after adding more than $2,000 to its price in fewer than 12 hours.

Technology stocks lead Wall Street's rise

(Reuters) - The three major U.S. indexes rose in late morning trading on Thursday with stocks of technology companies leading the pack, followed by industrials.

Uber's license suspended in British city of Sheffield

LONDON (Reuters) - Uber's license to operate in the northern English city of Sheffield was suspended last Friday after it failed to respond to requests about the management of its taxi app, the local authority said.

Ford to test new self-driving vehicle technology in 2018

DETROIT (Reuters) - Ford Motor Co will begin testing its latest self-driving vehicle technology next year in at least one city but has not changed its plan to begin commercial production until 2021, the company said.

AT&T/Time Warner antitrust hearing to focus on trial date

WASHINGTON (Reuters) - The U.S. Department of Justice and AT&T Inc will meet in court for the first time on Thursday as the antitrust regulator attempts to stop the U.S. No. 2 wireless company's $85 billion purchase of media company Time Warner Inc .

Apple suppliers gain after Broadcom hint on iPhone

(Reuters) - Shares in Skyworks Solutions Inc , Cirrus Logic Inc , and Qorvo Inc traded higher on Thursday after fellow Apple supplier Broadcom Ltd hinted the late launch of iPhone X would help revenue rise.

Key to Pandora's turnaround: a better advertising platform

(Reuters) - Kevin Kleinman, a trader at Watchhimtrade.com, listens to music on Pandora every morning as he executes trades worth millions of dollars. But he will not bet a dime on the music streaming company.

Budweiser maker Anheuser-Busch reserves 40 Tesla electric trucks

(Reuters) - Budweiser beer maker Anheuser-Busch has reserved 40 of Tesla Inc's all-electric Semi trucks as it seeks to reduce fuel costs and vehicle emissions, the brewer said on Thursday.

Watch Live: Senator Al Franken Addresses Senate Amid Calls For His Resignation

Yesterday, following the "retirement" of John Conyers (D-MI), the chants for Senator Al Franken to follow suit reached a fevered pitch on the suggestion that anything less would simply be racist. The chaos gradually escalated throughout the day with Minnesota Public Radio eventually "confirming" that Franken would resign today...a confirmation that Franken subsequently denied (we covered the chaos here).

Now, The Hill is seemingly once again "confirming" an imminent resignation by reporting that Minnesota Governor Mark Dayton would likely tap Lt. Governor Tina Smith to replace Franken should he choose to resign in the wake of sexual misconduct allegations.

Alas, the back and forth suspense over Franken's future in the Senate has nearly come to an end as he is set to deliver a speech on the Senate floor at 11:45AM EST.

Senator Franken is scheduled to deliver a speech from the Senate floor at 11:45 AM ET.

— Sen. Al Franken (@SenFranken) December 7, 2017

So what say you? Will Franken remain defiant amid growing calls for his resignation or step down in disgrace? Tune in below to find out...

Bitcoin Hits $19,500; Tumbles $3,000

And now the giveback...Bitcoin is down $3000 from its $19,600 highs...but is still up 30% on the day

Bwuahahaha... $19k...on GDAX

After tagging $19,697, Bitcoin prices tumbled to $17,900...

Prices are varying dramatically across exchanges with $2000 differences.

For those keeping track, this is how long it has taken the cryptocurrency to cross the key psychological levels:



$0000 - $1000: 1789 days

$1000- $2000: 1271 days

$2000- $3000: 23 days

$3000- $4000: 62 days

$4000- $5000: 61 days

$5000- $6000: 8 days

$6000- $7000: 13 days

$7000- $8000: 14 days

$8000- $9000: 9 days

$9000-$10000: 2 days

$10000-$11000: 1 day

$11000-$12000: 6 days

$12000-$13000: 17 hours

$13000-$14000: 4 hours

$14000-$15000: 10 hours

$15000-$16000: 5 hours

$16000-$17000: 2 hours

$17000-$18000: 10 minutes

$18000-$19000: 3 minutes

Coinbase is struggling to keep up...

< ...

One Of Bank of America's "Guaranteed Bear Market" Indicators Was Just Triggered

It is undisputed that the last 2 quarters have demonstrated an impressive jump in corporate earnings growth, if mostly due to a beneficial base effect from plunging 2016 earnings which pushed them below levels reached in 2014. And naturally, this rebound has been more than priced into a market which has seen substantial multiple expansion since the Trump election to boot. But what is much more important for the market is what corporate earnings look like in the future, and it is here that Bank of America has just raised a very troubling red flag.

According to BofA's Savita Subramanian, in November the S&P 500's three-month earnings estimate revision ratio (ERR) fell for the fourth consecutive month to 0.99 (from 1.03), indicating that for the first time in seven months, there were more negative than positive earnings revisions, needless to say a major negative inflection point in the recent surge in profits. The bank's more volatile one-month ERR also weakened to 0.94 (from 1.16).

A breakdown of EER by sector showed a sudden and broad-based deterioration, as the three-month ERR weakened across eight of the 11 sectors, with Materials, Health Care, and Financials seeing the biggest declines while, not surprisingly, Tech and Energy have the highest three-month ERRs, with Energy's ERR expanding the most on the back of rallying oil prices. Meanwhile, Telecom, Real Estate, and Discretionary have the weakest ratios, and November saw a drop in the Health Care and Industrials' EER ratio below 1.0 (meaning more cuts than raises to earnings forecasts) for the first time since March. Furthermore, while two sectors have been "improving" in recent months: namely Energy and Tech whose ERRs have been rising; all other sectors have seen their ERRs roll over.

< ...

Earnings Don't Matter After All!

Via The Knowledge Leaders Capital blog,

Our long-time readers are familiar with the work of Professor Baruch Lev of the NYU Stern School of Business, whose research forms the basis for the Knowledge Leaders investment strategy. In his decades-long study of financial records, Lev first discovered a link between a firm's knowledge capital and its subsequent stock performance, ultimately identifying a market inefficiency that leads highly innovative companies to deliver excess returns. We call this market anomaly the Knowledge Effect.

In a new article in Financial Analysts Journal, Lev and co-author Feng Gu continue to advance the findings on intangibles. The article, "Time to Change Your Investment Model," identifies that earnings prediction has lost "much of its relevance in recent years."

As a form of predicting corporate results, "earnings no longer reliably reflect changes in corporate value and are thus an inadequate driver of investment analysis."

The basis for this shift, the authors explain, occurred after the emergence of the semiconductor.

"Starting in the early 1980s, investment in traditional, tangible assets (structures, factories, machinery, inventory) - considered assets by accountants and reported accordingly on the balance sheet - dropped precipitously from 15% of gross added value in 1977 to 9% in 2014, a 40% drop.

In contrast, the investment rate in intangible capital (R&D, patents, information systems, brands, media content, business proc ...

Actually, Here's Why Stocks Can Keep Going Up

The environment still looks more friendly for stocks than bonds. Global growth is broad and momentum appears good. Earnings have recovered and are forecast to rise further around the world in 2018.

Samsung's Rally Can't Keep Living on Memories

The Korean tech giant's stock price and profits have doubled in the past two years. Industry fundamentals suggest it will struggle to maintain that pace.

Pharma's Helping Hand May Pinch Investors

Scrutiny of patient-assistance charities, a key profit source for the drug industry, is increasing. That means it is getting harder for investors to forecast industry growth.

02 December 2017 Initial Unemployment Claims Rolling Average Improves Marginally

Hurricanes continue to impact claims taking procedures in the Virgin Islands. The market expectations for weekly initial unemployment claims (from Bloomberg / Econoday) were 234 K to 245 K (consensus 240,000), and the Department of Labor reported 238,000 new claims. The more important (because of the volatility in the weekly reported claims and seasonality errors in adjusting the data) 4 week moving average moved from 242,250 (reported last week as 242,250) to 241,500. The rolling averages generally have been equal to or under 300,000 since August 2014.

Time magazine names 'The Silence Breakers' 2017 person of the year

Time magazine named "The Silence Breakers" as its 2017 person of the year on Wednesday, referring to the many individuals who helped expose the prevalence of sexual harassment and gender discrimination in the world of entertainment, technology, the media and other sectors this year.

Sage Therapeutics stock rockets 70% on high hopes for depression drug

Sage Therapeutics Inc. stock soared more than 70% Thursday to mark its biggest-ever one-day price and percentage gain, after the company reported positive results in a mid-stage trial of a treatment for severe depression that could offer doctors a new mechanism to treat the disease.

Europe Markets: European stocks seesaw into the close, but end slightly higher

Stocks across Europe wobbled into the close on Thursday, settling slightly higher as traders digested M&A news and economic growth data.

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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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