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26Dec2017 Market Update: Apple's 2.8 Percent Drop Drags Wall Street Lower, WTI Trades In The High 59 Handle, Gold Index Trends Higher

Written by Gary

WTI crude moved higher almost to $60 a barrel today on Libyan pipeline blast (SPY -0.1%), Bitcoin rises 10 percent, Apple's shares fall on weak iPhone X demand.


Here is the current market situation from CNN Money

North and South American markets are mixed today. The IPC is up 0.66% while the Bovespa gains 0.58%. The S&P 500 is off 0.10%.

Traders Corner - Health of the Market

What Is Moving the Markets

Here are the headlines moving the markets.

Bitcoin holds overnight gains after last week's rout

NEW YORK (Reuters) - Bitcoin held its overnight gains in early U.S. trading on Tuesday as the world's biggest and best-known cryptocurrency rebounded on light trading volume from its worst week since 2013.

Apple suppliers drop on report of weak iPhone X demand; analysts' views mixed

BEIJING (Reuters) - Shares in several of Apple Inc's Asian suppliers fell for a second straight day on Tuesday, hurt by a report from Taiwan's Economic Daily and some analysts saying that iPhone X demand could come in below expectations in the first quarter.

Top small-cap funds of 2017 focus on healthcare, tech in year ahead

NEW YORK (Reuters) - Healthcare, technology and Japanese small-cap stocks look poised to outperform the broader market in the year ahead, according to some of the best performing U.S.-based stock fund managers of 2017.

Apple drags Wall Street lower

(Reuters) - Wall Street's main indexes came under pressure on Tuesday following a 2.8 percent drop in Apple's shares on a report of weak iPhone X demand.

Oil rises on Libyan pipeline blast, Forties restart weighs

LONDON (Reuters) - Oil moved higher above $65 a barrel on Tuesday, within sight of its highest since mid-2015, supported by an explosion on a crude pipeline in Libya and voluntary OPEC-led supply cuts.

Aston Martin to recall over 5,000 vehicles in U.S.: safety agency

(Reuters) - British sportscar maker Aston Martin is recalling around 5,500 vehicles in the United States due to problems with powertrains and battery cables, according to documents posted on the National Highway Traffic Safety Administration's (NHTSA) website.

Hyundai Heavy Industries Group to list Oilbank, issue $1.2 billion rights shares

SEOUL (Reuters) - South Korea's Hyundai Heavy Industries Group plans to list its refining arm Hyundai Oilbank in an IPO in 2018 and raise about $1.2 billion via a share issue by shipbuilder Hyundai Heavy Industries , in a move to bolster its finances.

South Korea's Hyundai Motor union rejects tentative wage deal

SEOUL (Reuters) - South Korean automaker Hyundai Motor Co's labor union said on Tuesday its members have rejected the tentative wage deal its leadership had agreed with management last week.

Google looking to launch stores in India to boost Pixel sales: report

(Reuters) - Alphabet Inc's Google is looking to launch brick-and-mortar stores in India to boost sales of its Pixel smartphones, the Economic Times newspaper reported on Tuesday, citing three people with knowledge of the matter.

One Bank Is Unsure If Any Humans Still Trade Stocks In Japan, Or Have All Moved To Bitcoin

While the wholesale disappearance of retail traders from stock markets is hardly a novel observation, it has taken on a whole new meaning in Japan, where the lack of carbon-based investors has prompted Deutsche Bank to ask if "Japan's stocks are still traded at all by humans."

As Deutsche strategist Masao Muraki writes, since the US presidential election, Japanese stocks (in this case the TOPIX index) have been almost entirely defined by just three things: US stocks (S&P 500), the implied volatility (VIX), and USDJPY. This is shown in the model correlation chart below.

And while some observers think that foreigners are buying Japanese stocks on hopes for Abenomics following the Lower House election, this aspect is not apparent in the Figure above according to Deutsche. Instead, according to the German bank, it is the 10Yr US yields that determine relative performance of Japanese and US financial stocks most directly. Additionally, interest rates, forex, and option prices (implied volatility) are defining absolute share prices for Japanese life insurers and banks, as shown in the charts below.

Furthermore, while financial institutions delivered some surprises in earnings announcements and shareholder returns and major developments took place in bank and insurers capital regulations in 2017 too, Deutsche notes that it "cannot find any indications of active change in ...

Bubble Watch: The Fed KNOWS We're in a 1999-Type Mania...

The Fed raised rates another 0.25% the week before last.

This marks the 5th rate hike since the Fed embarked on its policy tightening in December 2015 and the fourth rate hike in the last 12 months. The Fed's latest statement also indicates it plans on raising rates three more times in 2018.

It is easy to gloss over the significance of this, but the Fed's actions are indeed unusual; other major Central Banks (the Swiss National Bank, Bank of Japan, European Central Bank and Bank of England) are all currently running QE programs (the BoJ, ECB and BoE) or openly printing new money to buy stocks outright (the SNB).

What precisely is the Fed doing? Why the urge to tighten when other banks are all printing new money by the billions?

The following quotes from Fed offer us clues.

Fed Monetary Policy Report, June 2017:

"Forward price-to-earnings ratios for equities have increased to a level well above their median of the past three decades,

Fed minutes, July 2017:

"Since the April assessment, vulnerabilities associated with asset valuation pressures had edged up from notable to elevated, as asset prices remained high or climbed further, risk spreads narrowed, and expected and actual volatility remained muted in a range of financial markets."

Janet Yellen response to question from IMF Panel, October 2017:

Market valuations "are at high level in historical terms" when assessed on metrics akin to price-earnings ratios,

Star Wars For The Splitting Soul Of America

Via GEFIRA,

The last episode of the successful movie - Star Wars - is actually a lot less about the stars in space and much more about culture and class. Most importantly, it reflects the dangerously growing disenfranchisement of the race-and-gender obsessed liberal upper class and everyone else.

The movie finally came out, the money started flowing and eventually the reviews arrived. The result? On the primary review sites Metacritic and Rotten Tomatoes the critics loved it, the public did not, which left many wondering why.

Some explanations came out already: the good results are scientific, the bad ones are there because of internet trolls. Nope, there's nothing scientific about subjective opinions, even if they (allegedly) represent the majority of those who express them. Science is, or should be, objective.

Trolls, more trolls, and finally, Russian interference.

That's the cue to solving the enigma of the different ratings: the standard profile of the movie critic is a liberal arts graduate, easily identifiable by the verbosity of his writing and by the fact that he is easily impressed by cheap virtue-signalling elements like token ethnic minority leading characters and a strong female lead. As the movie panders (not even that much to be fair) to his ideological preferences, he gives high scores based on diversity and e ...

Amazon And Google Employees Busted In Asian Sex Trafficking Sting

Several Seattle employees of both Google and Amazon were busted after using their corporate accounts to send emails to local brothels and pimps looking to purchase services from sex workers trafficked from Asia, according to emails obtained by Newsweek.

"[E]mails obtained by Newsweek reveal another sordid corner of the tech sector's treatment of women: a horny nest of prostitution "hobbyists" at tech giants Microsoft, Amazon and other firms in Seattle's high tech alley."

Many of the emails were swept up in a 2015 sting operation which targeted online chat rooms and message boards in which customers rate sex workers - resulting in the arrest of 18 of these "prostitution hobbyists," including several high level Amazon and Microsoft directors - two of which are currently scheduled for trial in March.

Seattle brothels had been catering to Microsoft employees through several "backpage.com" ads located nearby the company's Redmond, WA headquarters, in what is becoming a booming business.

A study commissioned by the Department of Justice found that Seattle has the fastest-growing sex industry in the United States, more than doubling in size between 2005 and 2012. That boom correlates neatly wit ...

China's Bid to Dominate Oil Pricing Will Fail

Chinese regulators say they are on the cusp of launching their own oil futures contract, priced in yuan. Chinese future markets are already key in setting iron and coking coal prices—but a yuan denominated oil contract will struggle.

The Next Deal Target in Health Care

The deal boom in the health-care industry is showing no signs of slowing. That could help one beaten down stock reverse its fortunes.

Investors Diving Into Risky Bank Bonds

Cocos are hot again. The junior bonds that are designed to help shore-up banks during a crisis are ending 2017 with yields near record lows but they can become risky in sudden and unexpected ways.

Key Words: Utah's Orrin Hatch honored by not-quite-honor as state's most impactful person

On the face of it, which is to say on the front page and only on the front page, Sen. Orrin Hatch of Utah was honored as "Utahn of the Year" by the Salt Lake Tribune.

Futures Movers: Oil trades near July 2015 highs on supply disruptions

Oil prices hover around a 2½-year high Tuesday, with Brent, the international crude benchmark, supported by the pipeline outages in the North Sea and Libya.

Six Chinese stocks to buy while they're on sale

It's worth buying the dip in Chinese stocks, according to T. Rowe and Davis fund managers. By Michael Brush.

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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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