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21Dec2017 Market Update: Wall Street Fractionally Higher As Investors Await Tax-cut Benefits, Major Indexes Trading Near Record Levels, WTI Trading In The Low 58 Handle

Written by Gary

All three benchmarks indexes rose this morning (SPY +0.4%) as investors expected lower corporate tax rates to encourage companies to spend their additional capital on dividends, new projects and wage hikes.


Here is the current market situation from CNN Money

North and South American markets are broadly higher today with shares in Brazil leading the region. The Bovespa is up 1.87% while Mexico's IPC is up 0.53% and U.S.'s S&P 500 is up 0.35%.

Traders Corner - Health of the Market

10 things you need to know about life under the new tax law

What Is Moving the Markets

Here are the headlines moving the markets.

U.S. third-quarter economic growth trimmed; jobless claims rise

WASHINGTON (Reuters) - The U.S. economy grew at its fastest pace in more than two years in the third quarter, powered by robust business spending, and is poised for what could be a modest lift next year from sweeping tax cuts passed by Congress this week.

Toys 'R' Us plans new playdate with U.S. shoppers

WALLKILL, NEW YORK (Reuters) - Joshua and Amy Hightower drive 40 minutes to a Toys 'R' Us Inc store in a blue collar neighborhood in Wallkill, one of the farthest reaches of the New York City suburbs, so their children can try toys at an amusement area dubbed the "play lab."

Wall Street higher as investors await tax-cut benefits

(Reuters) - Wall Street's main indexes rose on Thursday as investors expected lower corporate tax rates to encourage companies to spend their additional capital on dividends, new projects and wage hikes.

Accenture's digital push boosts earnings, shares hit record

(Reuters) - Consulting and outsourcing services firm Accenture Plc's quarterly earnings and revenue topped Wall Street forecasts, as investments in fast-growing digital and cloud services paid off.

Facebook, Universal Music strike multi-year licensing deal

(Reuters) - Facebook Inc and Universal Music Group signed a global agreement that will give users access to Universal's music catalogs to be used in videos uploaded across the social media network as well as Instagram and Oculus.

Boeing held takeover talks with Embraer: WSJ

(Reuters) - Boeing Co has held takeover talks with Brazilian planemaker Embraer SA , the Wall Street Journal reported on Thursday, citing people familiar with the matter.

Swiss find serious shortcomings at JPMorgan in 1MDB case

ZURICH (Reuters) - Swiss financial watchdog FINMA said on Thursday the Swiss subsidiary of U.S. bank JPMorgan had committed serious anti-money laundering breaches in relation to Malaysian sovereign wealth fund 1MDB.

Kobe Steel says senior executives knew about data tampering

TOKYO (Reuters) - Kobe Steel Ltd , at the centre of a data-falsification scandal that has shaken Japan's manufacturing industry, admitted for the first time that executives were aware of the cheating, and reassigned three senior officials.

Fannie Mae, Freddie Mac receive $3 billion capital cushion

WASHINGTON (Reuters) - The U.S. regulator overseeing Fannie Mae and Freddie Mac has reinstated a $3 billion capital cushion for each of the mortgage guarantors, citing the imminent tax overhaul.

These PE Firms Are About To Get Crushed By Their Subprime Auto Bets

In the aftermath of the 'great recession,' private equity firms placed massive bets on subprime auto finance companies with the typical "thesis" going something like this: "well, people have to get to work don't they?"...genius, if we understand it correctly.

Of course, the "thesis" seemed to be confirmed when auto securitizations performed relatively well throughout the financial crisis, amid a sea of mortgage bonds getting wiped out, and private equity titans were off to the races with wall street titans from Perella Weinberg to Blackstone and KKR scooping stakes in small niche lenders.

Unfortunately, as Bloomberg points out today, the $3 billion bet on subprime auto lenders hasn't played out precisely to plan as the "well, people have to get to work" thesis has proved to be somewhat less than full proof.

A Perella Weinberg Partners fund has been sitting on an IPO of Flagship Credit Acceptance for two years as bad loan write-offs push it into the red. Blackstone Group LP has struggled to make Exeter Finance profitable, despite sinking almost a half-billion dollars into the lender since 2011 and shaking up the C-suite multiple times. And Wall Street bankers in private say others would love to cash out too, but there's currently no market for such exits.

Since the turn of the decade, buyout firms, hedge funds and other private investors have staked at least $3 billion on non-bank auto lenders, according to Colonnade. Among PE firms, everyone from Blackstone and KKR & Co. to Lee Equity Partners, Altamont Capital and CIVC Partners waded in.

Many targeted smaller finance companies that ofte ...

Finra Issues Warning On Crypto-Related Stock Scams

Yesterday morning we explained the latest and greatest get rich quick scheme in the stock market as follows:

Now that it is abundantly clear that for a stock to explode higher, all that is necessary - and sufficient - is a press release mentioning the company's name and throwing in the word "blockchain" in the same sentence (see Riot Blockchain, LongFin Corp, Net Element, and Nova Lifestyle) other public microcaps have decided that if that's all it takes, then by all means they will gladly take investors' money."

This morning, the microcap formerly known as Long Island Ice Tea did just that when it changed its name to Long Blockchan Corp, sending its stock 500% higher.

Needless to say, idiocy like this will end in tears, and when the various sequential bubbles burst, they will sweep away with them any value-adding and non-fraudulent products and services that have emerged out of the cryptocurrency and blockchain technology. Which is why it's about time for the regulators to step in and start halting such examples of manic investory stupidity before more people get hurt, or worse, suicided.

This morning, the market's sel ...

Holiday Spending Set To Hit 12-Year High Thanks To...Debt

Even though consumer confidence cooled for a second straight month in November, CNBC is reporting that holiday spending for the average American household is on track to be the highest in 12 years.

Amazingly, the CNBC All-America Survey found that the average family will spend $900 for the first time in the 12-year history of the poll, eclipsing last year's estimate of $702 by a wide margin.

Furthermore, the survey of 800 American households - which has a margin of error of plus or minus 3.5 percentage points - found a surge in the percentage of Americans planning to spend more than $1,000. The number climbed to 29%, up from 24% last year.

But before economists and retail analysts begin recalibrating their expectations, it's worth noting that much of this spending will be funded by debt. Another study by RentCafe which examined spending habits of American renters discovered that, in the 50 largest US metropolitan areas, the average renting fa ...

The Ultimate In Irony: Syrian Army Rolls Into Idlib With US Weapons Captured From ISIS

Authored by Leith Fadel and Andrew Illingworth of Al-Masdar News,

The Syrian Arab Army's (SAA) Tiger Forces arrived in northern Hama this week with a big surprise from their previous operations in the Deir Ezzor Governorate. Units from the Tiger Forces were seen armed with US-manufactured weapons that were seized from the Islamic State (ISIS) during the two month long battle in Deir Ezzor.

According to a military source in Hama, the Syrian Army's Tiger Forces are planning to use the US-manufactured weapons against the jihadist rebels in the upcoming battle for the Idlib Governorate. Among the US-manufactured weapons transferred to the Idlib front were a large number of TOW missiles that were previously supplied by Washington to the rebel forces in Syria before they were later sold to the Islamic State.


Screenshot via Conflict Armament Research video documentation of weapons recovered from ISIS initially supplied through a CIA program to arm anti-Assad militants.

The rapid defeat of Islamic State forces in eastern Syria over the last several months has seen the Syrian Arab Army capture untold quantities of military equipment from the terrorist group, most of which will likely go into the raising of new pro-government formations. As Syrian pro-government forces chased ISIS out of its main strongholds along the western shore of Euphrates River, the jihadist faction never had ...

Tax Bill Makes 2018 the Year of the Deal

With tax uncertainty in the rear-view mirror, pressure on companies to combine will keep growing.

Big Tech Unlikely to Blow its Tax Bonus

Big tech companies face a high-quality problem heading into the new year: All that money, and not much good to do with it.

Risky Plan to Keep London as Europe's Financial Hub

London's position as Europe's financial center after Brexit is definitely under threat. The Bank of England is doing its bit to protect its status, but risks leaving itself at the back of the queue when banks get into trouble.

November 2017 Leading Economic Index Suggests Solid Growth Into 2018

Written by Steven Hansen

The Conference Board Leading Economic Index (LEI) for the U.S improved this month - and the authors say "that solid economic growth will continue into the first half of 2018".

November 2017 CFNAI Super Index Moving Average Continues to Improve

Written by Steven Hansen

The economy's rate of growth again improved based on the Chicago Fed National Activity Index (CFNAI) 3 month moving (3MA) average - and economic growth is significantly above the historical trend rate of growth.

Capitol Report: House's stopgap budget would allow Trump to sign tax bill before January

The House's bill to keep the government open for roughly another month would also allow President Donald Trump to quickly sign the tax bill Congress has sent to him.

CryptoWatch: Here are seven new bitcoin-related stocks — most are bonkers

Applying blockchain technology to any industry could be a thing of the future, but the investing risks today are extremely high. By Nigam Arora.

Market Snapshot: U.S. stocks trade near records after GDP data, energy leads on the day

U.S. stocks rise, with major indexes trading near record levels, although market action could be quiet as traders look for fresh catalysts following the recent approval of the tax bill in Washington.

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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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