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15Dec2017 Market Close: Stocks Rally On Positive Tax Change News; Oil Rally Continues To Fade And Gold Struggles To Stay Flat

Written by Gary

The Dow Jones Industrial Average closed higher at 24651. The S&P 500 closed 0.9% higher, while the Nasdaq Composite closed at 6936.58, up 1.17%. The major averages rose sharply as uncertainty over the progress of tax reform eased following reports that Republicans secured enough votes for the bill's passage. CNBC, citing two sources, said Marco Rubio will support the final Republican tax bill after the GOP made changes to win his vote.

Todays S&P 500 Chart


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The Market in Perspective

Here are the headlines moving the markets.

Tesla largely responsible for slide in U.S. home solar sales

(Reuters) - After years of double-digit growth, home solar installations in the United States are poised to fall for the first time this year, according to a report released on Thursday by GTM Research.

Wall Street closes at records with tax overhaul in sight

NEW YORK (Reuters) - Wall Street's three major indexes climbed to record closing highs on Friday with broad-based gains as a long-awaited bill to cut corporate tax rates looked like it would win enough support from lawmakers to pass.

Bitcoin hits new record high as warnings grow louder

LONDON (Reuters) - Bitcoin blasted to another all-time high of almost $18,000 on the Bitstamp exchange on Friday, up 9 percent on the day, as warnings grew over the risks of investing in the highly volatile and speculative instrument.

U.S. Justice Department, AT&T settlement talks failed: court filing

WASHINGTON (Reuters) - The U.S. Department of Justice and AT&T Inc have held unsuccessful settlement talks over the wireless and pay-TV company's bid to buy movie and TV show maker Time Warner Inc , the two sides said in a court filing on Friday.

Big U.S. banks engage universities to fill unglamorous banking jobs

(Reuters) - Banks are grappling with how to recruit young people into businesses like trade finance and cash management, which are increasingly important drivers of revenue but perceived to be un-sexy compared with investment banking and trading.

Wall Street rally sets the stage for big IPO year in 2018

(Reuters) - A relentless bull-run in U.S. stock indexes this year has set the stage for a strong IPO market in 2018, with several multi-billion dollar firms including Airbnb and Spotify widely expected to grab headlines with their offerings.

Unilever to sell spreads business to KKR for $8 billion

(Reuters) - Unilever has agreed to sell its margarine and spreads business to U.S. private equity firm KKR for 6.83 billion euros ($8.04 billion) to concentrate on faster growing products.

Exclusive: Aston Martin owners rev up for 2018 exit with Lazard hire

LONDON (Reuters) - Aston Martin's owners have hired Lazard to prepare for a stock market listing or sale of the British sportscar maker made famous by fictional spy James Bond, sources familiar with the matter told Reuters.

Exclusive: FCC plans to fine Sinclair $13.3 million over undisclosed commercials

WASHINGTON (Reuters) - The Federal Communications Commission plans to fine Sinclair Broadcasting Corp $13.3 million after it failed to properly disclose that paid programming that aired on local TV stations was sponsored by a cancer institute, three people briefed on the matter told Reuters.

Scheme To Pay Off Trump Accusers Emerges, One Woman Was Offered $750,000

California woman's rights Attorney Lisa Bloom operated behind a scheme to compensate Trump accusers and potential accusers using money from donors and tabloid media outlets during the final months of the 2016 presidential race, in an effort which intensified as the election neared, report John Solomon and Alison Spann of The Hill.

Lisa Bloom's efforts included offering to sell alleged victims' stories to TV outlets in return for a commission for herself, arranging a donor to pay off one Trump accuser's mortgage and attempting to secure a six-figure payment for another woman who ultimately declined to come forward after being offered as much as $750,000, the clients told The Hill. -The Hill

The various accounts of Bloom's scheme were detailed in documents, emails and text messages reviewed by The Hill, and come on the heels of Bill O'Reilly's claim that there is a secret tape of a women who was offered $200,000 to file sexual harassment charges against Trump. It is unknown whether or not O'Reilly's claim is related to Bloom's activities.

Crypto Envy? Beware Greed and FOMO - Jeff Tomasulo

Crypto Envy

To us, Jeff is describing what he knows from his years of experience and some call the "psychology of regret". It is also closely related to the concept of a Giffen good in economics. That is an item in which its demand goes up as its price does, like perfume. Cryptos are right now exhibiting Giffen Good qualities because of the press and hype surrounding the launch of futures for sure. This is why it is all the more important to not forget your discipline. When the world is telling you to buy something because it went up, the Fear of Missing Out (FOMO) that Jeff describes so well can be overwhelming.

The message is clear to us. There will be other opportunities, don't chase the last one. Ignore the fact that your next door neighbor who just bought a Rolls with his Bitcoin winnings is just lucky, not good. Stick to your rules, and remember trading, as well as investing, is a marathon, not a sprint. The market will be there tomorrow - Soren K.

GREED and FOMO

Written by Jeff Tomasulo, CEO Vespula Capital

Every month, I speak to around a hundred retail investors at a conference in Utah. Over past six months, I've been getting pretty much the same two questions. "Where do you think the market will go?" and "Would you invest in Bitcoin?" keep coming up. Both questions are obviously very subjective. The more interesting question, the one that has plagued me at times throughout my career, is about the thought processes of investors. Why do investors find it so compelling to invest in assets and projects where the risks are hard to measure and the probabilities of success are so low? It mainly comes down to two consistent killers of returns, Greed and Fear ...

Weekend Reading: Ignorance Is No Excuse

Authored by Lance Roberts via RealInvestmentAdvice.com,

The "tax bill cometh." According to the press, this is going to be the single biggest factor to jump-starting economic growth since the invention of the wheel.

Interestingly, even the Fed's economic projections are suggesting that economic growth will pick up over the next two years from the impact of tax cuts. (Chart is the average of the range of the Fed's estimates.)

Of course, you should note the Federal Reserve has NEVER accurately forecasted future economic growth. In fact, it has become an annual tradition of over-estimating growth and then slowly ratcheting down estimates as reality failed to achieve overly optimistic assumptions.

However, despite the Administrations hopes of long-term economic growth rates of 3% or more, in order to pay for the deficits created by cutting revenue, even the Fed has maintained their long-run outlook of less that 2% annualized growth. (Down from 2.7% in 2011) Hardly the supportive stamp of endorsement for the "greatest tax cut" of all-time.

But for economic growth to blossom, the consumer will have to pull their weight given consumption makes up roughly 70% of GDP. The problem, as witnessed by the latest retail sales report, is that consumptive spending is far weaker than headlines suggest.

On Thursday, the retail sales report for November clicked up 0.8%. Good news, right?

Not so f ...

US Yield Curve Crashes Most In 6 Years As Stocks, Bitcoin Hit Record Highs

What could go wrong?

Small Caps exploded higher today, driven by financials, presumably on tax reform hype.. but after Bob Corker said "yes" there was some notable "sell the news"...

Notably, as soon as the cash market closed, futures ripped to the highs of the day...

On the week, Nasdaq (green) and Dow (red) outperformed as Trannies (blue lagged)...

Tech outperformed on the week but financials lagged...

Oddly, high-tax companies notably undeperformed low-tac companies on the week....

Bank Stocks Can Fight the Fed, for Now

At some point, higher interest rates may become a negative for banks, but not for a while. Despite the flattening of the yield curve, banks' net interest margins have been rising, and their stocks have fared well.

Can the Tax Cut Boost Stocks?

Businesses are getting a profit windfall from the Republican tax bill, but after this year's stock market rally, the gains won't make their shares look cheap.

CSX's First-Class Ticket to Chaos

Railroad CSX paid a princely sum to snag an infirm new CEO this year, and now it faces service woes and has installed an interim chief.

What We Read Today 15 December 2017

Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary "reading list" which will include very brief summaries (and sometimes longer ones) of why each item has gotten our attention. Suggestions from readers for "reading list" items are gratefully reviewed, although sometimes space limits the number included.

This feature is published Monday, Wednesday, and Friday in the late afternoon New York time. For early morning review of headlines see "The Early Bird" published Monday through Friday in the early am at GEI News (membership not required for access to "The Early Bird".).

BECOME A GEI MEMBER - IT's FREE!

Most of this column ("What We Read Today") is available only to GEI members.

To become a GEI Member simply subscribe to our FREE daily newsletter.

08 December 2017: ECRI's WLI Growth Index Rate Improves

ECRI's WLI Growth Index which forecasts economic growth six months forward remains in expansion. This is compared to RecessionAlerts similar weekly leading index.

CryptoWatch: TD Ameritrade to open trading on bitcoin futures

TD Ameritrade on Friday said it would open trading for the recently launched bitcoin futures contract on Cboe Group Inc., following what it said was "standard protocol" for granting access to any futures product.

Market Extra: Why betting on risk can be—well—risky business

When volatility is already very low, equity valuations high, monetary policy on a tightening path and lots of geopolitical uncertainty, it is only logical to expect more pullbacks along the way.

Market Extra: Bitcoin futures settle above $18,000; spot prices rise

U.S. bitcoin futures rebound to above $18,000 on Friday, booking a solid 20% gain in the first week of trading.

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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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