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14Dec2017 Market Close: Wall Street Falls As Investors Fret About Tax Bill Passage, DOW Down 77 Points, SP 500 Down 0.4 Percent, WTI Crude Up In Low 57 Handle

Written by Gary

The SP 500 and the DOW were lower at the closing today (SPY -0.4%) as investors worried about the Republicans' tax overhaul. With McCain in the hospital and Lee and Rubio questioning the child-care credit, investors are anxiety about just how "done deal" this deal is.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Disney buying Fox film, TV units for $52 billion in digital push

(Reuters) - Walt Disney Co has struck a deal to buy film, television and international businesses from Rupert Murdoch's Twenty-First Century Fox Inc for $52.4 billion in stock, giving the world's largest entertainment company an arsenal of shows and movies to combat growing digital rivals Netflix Inc and Amazon.com Inc.

Wall Street falls as investors fret about tax bill passage

(Reuters) - The S&P 500 and the Dow were lower on Thursday as investors worried about potential roadblocks to Republicans' tax overhaul, offseting their optimism over strong retail sales data.

Hackers halt plant operations in watershed cyber attack

(Reuters) - Hackers likely working for a nation-state recently invaded the safety system of a critical infrastructure facility in a watershed attack that halted plant operations, according to cyber investigators and the firm whose software was targeted.

Teva Pharm to lay off a quarter of workforce, suspends dividend

TEL AVIV (Reuters) - Teva Pharmaceutical Industries is to cut its workforce by more than a quarter, give up many of its manufacturing plants and suspend its dividend on ordinary shares in a much-anticipated overhaul to help pay off its debts.

Airbus planemaking chief Bregier to step down: sources

PARIS (Reuters) - Airbus Chief Operating Officer and planemaking chief Fabrice Bregier is expected to step down following a board meeting on Thursday to tackle management tensions at the aerospace group, two sources familiar with the matter said.

Exclusive: Luxottica, Essilor tie-up on track for unconditional EU okay - sources

BRUSSELS (Reuters) - Italian eyewear maker Luxottica and French lens manufacturer Essilor are set to win unconditional EU antitrust approval for their 48 billion-euro ($57 billion) merger, two people familiar with the matter said on Thursday.

Steinhoff says Christo Wiese steps down as chairman

BERLIN (Reuters) - South African retail group Steinhoff , which is fighting for survival following its disclosure of accounting irregularities, said tycoon and major shareholder Christo Wiese has stepped down as chairman.

Leadership of New York Times passes to next-generation Sulzberger

NEW YORK (Reuters) - The New York Times on Thursday named a new publisher in 37-year-old A.G. Sulzberger, a fifth-generation descendant of Times leaders whose internal report on innovation has guided a newspaper known as "The Gray Lady" into the digital era.

Pier 1 Imports slumps 30 percent; holiday optimism disappears

SAN FRANCISCO (Reuters) - Pier 1 Imports Inc's stock lost nearly a third of its value on Thursday and its main competitors' shares also fell after the furniture and home decorations retailer warned the holiday shopping season was not going well.

Kolanovic Unveils His 2018 Outlook: The "Frogs Are Almost Boiled" So Start Hedging

Barely two months after JPMorgan's Marko Kolanovic previewed the next financial crisis, which he dubbed the "Great Liquidity Crisis", and which would be catalyzed by the following liquidity disrupting elements:



Decreased AUM of strategies that buy value assets

Tail risk of private assets

Increased AUM of strategies that sell on "autopilot"

Liquidity-provision trends

Miscalculation of portfolio risk

Valuation excesses

... the quant wizard is back in a more conventional form, this time summarizing JPM's 2018 outlook for equities, volatility and tail risk.

Starting at the top, it may seem otherwise paradoxical - although in the new normal nothing surprises any more - that JPM which holds a near apocalyptic long-term forecast for the world in a derivative context, is also the bank with the highest 2018 S&P target among its bank peers. Here's Kolanovic:

Our price target for S&P 500 at the end of 2018 is 3,000 and our earnings forecast (including tax reform) is $153. Half of the earnings upside (~$10) is due to tax reform, and the other half due to top line growth (~$7), margin expansion (~$1.50) and buybacks (~$2.50). To reach the price target, bond yields should not rise too much as that would destabilize the equity multiple. Yesterday's Fed announcement did not indicate an increased pace of tightening. Opinions differ on the number of hikes in 2018, level of long term rates and impact of G4 central bank normalization. We think that risks for equities will start rising significantly mid-next year as the monetary accommodation is re ...

Bonds Versus Economists: Reality & The Echo Chamber

Authored by Jeffrey Snider via Alhambra Investment Partners,

As part of its effort to stress its own self-importance, the Federal Reserve conducts a survey of the Primary Dealer members through its New York branch. A written questionnaire is sent out to each bank in advance of every monetary policy meeting. The purpose is for monetary policymakers to make sure that there aren't any big surprises, that the market, or, in this case, orthodox Economists working for one part of the market, is seeing things consistent with how the Fed wants them to.

In September 2013, the Primary Dealer Survey questions included a few pertaining to the then ongoing "taper tantrum" roiling markets around the world. It was "reflation" #2 and like the others, both the one before and the one after, it came on rather quickly and harshly. On the issue of benchmark interest rates, in the form of the UST 10s, the Primary Dealers all saw interest rates rising still further into the foreseeable future.

Of those surveyed, 65% believed that the 10-year yield would be above 3% by the end of 2014; more than three-quarters, 78%, thought the same for the end of 2015, including 15% who were expecting the 10s to get above 4.50% compared to just 6% who guessed, correctly, 2.01% to 2.50%.

With the long end of the treasury curve trading sideways to slightly lower over t ...

Court Filing Confirms Fusion GPS Hired DOJ Official's CIA Wife To Dig Up Dirt On Trump

The head of opposition research firm Fusion GPS admitted in a court filing this week that his firm paid the wife of a senior Justice Department official to help dig up damaging information on then-candidate Donald Trump.


Bruce Ohr, Glenn Simpson, Nellie Ohr

Glenn Simpson, co-founder of Fusion GPS, filed the signed declaration in a D.C. court this week affirming that Nellie Ohr, wife of demoted DOJ official Bruce Ohr, was contracted by Fusion through the summer and fall of 2016 "to help our company with its research and analysis of Mr. Trump," according to the filing. The House Intelligence Committee determined that in November 2016, Simpson met with Bruce Ohr shortly after the election to discuss their findings regarding Russia and Trump. Bruce Ohr lost his senior-level position at the DOJ as associate deputy attorney general after his meetings with Simpson and British spy Christopher Steele, who assembled the Trump-Russia dossier, were discovered.

And why would Fusion GPS hire Nellie Ohr? Aside from the obvious connection to her DOJ husband who was in a position to provide Fusion GPS with information on Trump gathered by US intelligence agencies, Nellie Ohr also represented the CIA's "Open Source Works" group in a 2010 "

Stocks Slammed As Rubio, Lee Spark Tax-Reform-Deal Anxiety

With McCain in hospital and now Lee and Rubio questioning the child-care credit, markets are showing some anxiety about just how "done deal" this deal really is...



GOP SENATOR LEE UNDECIDED WHETHER TO SUPPORT TAX BILL; SEEKS CHANGES TO CHILD TAX CREDIT - AIDE: RTRS

RUBIO SAID TO VOTE `NO' UNLESS CHILD TAX CREDIT CHANGED: POST

The reaction is clear...

And the High Tax companies are continuing to see profit-taking...

Financials are also struggling...

No Sequel to 'Massacre at the Shopping Mall'

Amazon didn't stop retailers' Christmas from coming. Somehow or other, it came just the same.

Fox Gives Disney Muscle for Next Net Fight

Getting bigger as Disney is doing gives it improved leverage to negotiate favorable distribution terms with cable and wireless companies, which stand to gain by the rollback of net neutrality.

How to Tell If Disney Is Getting Fox for a Good Price

Rupert Murdoch is selling out to Disney and getting a fairy-tale ending. Disney shareholders shouldn't be too worried about overpaying though.

The Conversation: Get over the idea that admission to top universities is a meritocratic process

Are there any discernible patterns between who gets in and students who were seriously considered but rejected? Probably not.

In One Chart: The last time stocks were this quiet was the year the Beatles went on Ed Sullivan

For a U.S. stock-market investor, the most remarkable thing that happened in 2017 may have been the fact that so little happened, at least from the point of what used to be normal day-to-day fluctuations.

The Wall Street Journal: Business Insider drops 'business' from company name

Businessinsider.com, the website dedicated to business, financial, tech and media news, among other topics, will not change its name in the rebrand, according to Chief Executive Henry Blodget.

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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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