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27Dec2017 Market Close: Wall Street Little Changed As Tech Offsets Energy, DOW Closes Down 28 Points, Department Stores Had A Bad 2017, Expect More Closures

Written by Gary

US stocks were little changed today (SPY +0.06%), as gains in the technology sector offset losses in energy and helped keep major indexes nearly flat. Gold rose for an eighth straight session as a retreat in the dollar encouraged investors to buy into the metal.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Wall Street little changed as tech offsets energy

NEW YORK (Reuters) - U.S. stocks were little changed on Wednesday, as gains in the technology sector offset losses in energy and helped keep major indexes nearly flat.

Apple faces lawsuits after saying it slows down aging iPhones

SAN FRANCISCO (Reuters) - Apple Inc defrauded iPhone users by slowing devices without warning to compensate for poor battery performance, according to eight lawsuits filed in various federal courts in the week since the company opened up about the year-old software change.

South Korea prosecutors seek 12 years jail for Samsung heir Lee in corruption case

SEOUL (Reuters) - South Korean prosecutors sought a 12-year jail term on Wednesday for Samsung Electronics Vice Chairman Jay Y. Lee, in a corruption case that led to the ouster of the nation's president earlier this year.

No Trump windfall for private prisons yet, but some bet on gains

(Reuters) - Investors who bet on private prison operators as big winners from Donald Trump's tough line on crime and illegal immigration are looking back at a bruising year of high hopes and disappointment. Some, however, say the stocks still offer good value even though an anticipated windfall under the Trump administration so far has failed to materialize.

GE raises stake in Sweden's Arcam by buying shares from hedge funds

(Reuters) - General Electric Co said on Wednesday it would raise its stake in Swedish 3D printer maker Arcam AB to around 95 percent from 77 percent after buying shares from hedge funds Elliott and Polygon.

Creditors seek bankruptcy for U.S. media entrepreneur Sillerman

WILMINGTON, Del. (Reuters) - Creditors of American media entrepreneur Robert F.X. Sillerman are seeking to force the onetime billionaire into bankruptcy to try and collect on a $7.36 million judgment against him, according to court documents.

JPMorgan pays $2.8 million fine over improper safeguards for customers

NEW YORK (Reuters) - JPMorgan Chase & Co will pay $2.8 million to settle charges that a broker-dealer unit lacked sufficient controls to safeguard customer securities from several countries over more than eight years, a U.S. regulator said on Wednesday.

Tesla's Model 3 deliveries point to slower ramp up: KeyBanc

(Reuters) - Tesla Inc is likely to deliver about 5,000 Model 3s in the fourth quarter, KeyBanc Capital Markets analysts said on Wednesday, far below the brokerage's estimate of 15,000.

As online shopping grows, UPS sees record holiday package returns

SEATTLE (Reuters) - United Parcel Service Inc is on track to return a record number of packages this holiday shipping season, a sign that e-commerce purchases surged to new heights over the past month.

Tax Plan Jitters Cause Sudden Collapse In Manhattan Apartment Prices In 4Q

Apparently the combination of a massive flood of excess supply in the form of new luxury developments and a Trump tax plan that penalizes people living in expensive cities by capping SALT, mortgage interest and property tax deductions was simply too much for the Manhattan real estate market to ignore in 4Q 2017. After reaching an all-time high of nearly $1.2 million in 2Q 2017 (chart per Douglas Elliman)...

...the Wall Street Journal this morning notes that median Manhattan apartment prices have dropped to $1.08 million in 4Q 2017, down 9.8% compared to the peak set earlier this year.

Not surprisingly, Pamela Liebman, the president of New York real estate broker The Corcoran Group, attributed the pause by Manhattan buyers to the tax bill and said that folks are increasingly convinced that prices peaked in 2017 and may continue to be under pressure.

"We lost a lot of deals in the fourth quarter, while people waited to see the outcome of the tax bill," she said. "Now that the uncertainty is gone they will be able to make a decision."

She said buyers were active but "focused on value and reasonable pricing."

"The good news is there are a lot of buyers who are ready to purchase next year," Ms. Liebman said. "Sellers who don't overshoot the mark should do well."

Squeezing The Consumer From Both Sides

Authored by 720Global's Michael Lebowitz via RealInvestmentAdvice.com,

The Federal Reserve raised the Federal Funds rate on December 13, 2017, marking the fifth increase over the last two years. Even with interest rates remaining at historically low levels, the Fed's actions are resulting in greater interest expense for short-term and floating rate borrowers. The effect of this was evident in last week's Producer Price Inflation (PPI) report from the Bureau of Labor Statistics (BLS). Within the report was the following commentary:

"About half of the November rise in the index for final demand services can be traced to prices for loan services (partial), which increased 3.1 percent."

While there are many ways in which higher interest rates affect economic activity, the focus of this article is the effect on the consumer. With personal consumption representing about 70% of economic activity, higher interest rates can be a cost or a benefit depending on whether you are a borrower or a saver. For borrowers, as the interest expense of new and existing loans rises, some consumption is typically sacrificed as a higher percentage of budgets are allocated to meeting interest expense. On the flip side, for those with savings, higher interest rates generate more wealth and thus provide a marginal boost to consumption as they have more money to spend.

This article focuses on borrowers and savers to show how the current interest rate cycle is squeezing consumers. Said differently, the rising cost of borrowing is ...

Trump To Rollback Deepwater Horizon Regulations

Authored by Nick Cunningham via OilPrice.com,

The Trump administration is hoping to slash regulations on offshore oil drilling that were implemented after the 2010 Deepwater Horizon disaster that killed nearly a dozen people and led to an oil leak that spewed for months.

According to the Wall Street Journal, the Bureau of Safety and Environmental Enforcement (BSEE), which is the agency housed in the Interior Department that regulates offshore oil drilling, is proposing a rollback of a series of changes made after the 2010 disaster.

BSEE says that the cuts will save the oil industry $900 million over ten years. The proposal has not been made public, but the WSJ reports that some of the changes include easing rules that require the streaming of real-time data of oil production operations to facilities onshore, which allows regulators to see what is going on. Another rule that would be removed requires third-party inspectors of equipment, such as the blowout preventer, to receive certification by BSEE.

Another example includes alterations to the "well-control rule," one of the signature regulations that was implemented by the Obama administration after years of review following BP's oil spill. The well-control rule required the use of certain safety equipmen ...

Emerging Markets: Growing in Maturity?

The MSCI Emerging Markets stock index is turning 30. Huge political shifts and globalization have changed the face of the index over time.

What Can Dislodge Tencent as King of the Videogames?

Predicting the success of videogames is a bit like predicting how movies will fare—much relies on the fickle winds of public taste. How, then, has China's Tencent—now the world's largest games company—survived and prospered?

Why Volvo Cars' Chinese Owner Is Betting Big on Volvo Trucks

Do cars and trucks belong in the same corporate garage? By bringing the two Volvos closer together again, Chinese car giant Geely is betting they do.

Bond Report: 10-year Treasury yield sees biggest one-day drop in more than 3 months

Treasury prices rise as yields fall across the board on Wednesday after investors plow back into long-term debt.

Therese Poletti's Tech Tales: The government tried to encourage IPOs, but it helped create The Age of the Unicorn

When legislation dubbed the JOBS Act was signed into law by President Barack Obama in 2012, it was heralded as a faster on-ramp to an initial public offering. Instead, the act has added to the cascade of factors helping tech companies stay private longer.

Tesla shares slide after KeyBanc slashes Model 3 sales estimates

Tesla Inc. shares slid about 2% Wednesday, after KeyBanc analysts slashed their fourth-quarter estimates for Model 3 deliveries to about 5,000 from 15,000.

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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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