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03Jan2018 Market Close: Wall Street Sets New Closing Highs, WTI Crude Surges More Than 2%, Settling At $61.80, Gold Slips From 3-1/2 Month Peak As Dollar Edges Higher

Written by Gary

The SP 500 index rose above 2,714 for the first time today (SPYT +0.6%) as the other major indexes hit record highs helped by technology stocks climbing amid indications of robust economic growth in the United States and overseas.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Spotify makes confidential filing for U.S. IPO: source

NEW YORK/SAN FRANCISCO (Reuters) - Music streaming service Spotify has filed confidentially with U.S. regulators for an initial public offering and is targeting a direct listing in the first half of 2018 that would allow some longtime investors to cash out, a source familiar with the matter said on Wednesday.

Fed policymakers see future rate rises guided by inflation, fiscal stimulus

WASHINGTON (Reuters) - U.S. Federal Reserve policymakers showed worry over the fate of currently low inflation and saw recent tax changes as providing a boost to consumer spending, according to the minutes of the U.S. central bank's last policy meeting on Dec. 12-13 released on Wednesday.

S&P tops 2,700 on tech advance, holds gains after Fed minutes

NEW YORK (Reuters) - The S&P 500 index rose above 2,700 for the first time on Wednesday and other major indexes hit record highs as technology stocks climbed amid indications of robust economic growth in the United States and overseas.

AmEx to post fourth-quarter loss on $2.4 billion hit from tax legislation

(Reuters) - American Express Co said it expects to report a fourth-quarter loss due to a $2.4 billion hit from the tax legislation which makes it cheaper for U.S. companies to repatriate profits.

Brazilian agency requires Apple to inform consumers on batteries

SAO PAULO (Reuters) - A Brazilian state agency responsible for consumer issues notified Apple Inc on Wednesday that it must explain how Brazilian owners of iPhones will be able to buy battery replacements at lower prices.

Petrobras to pay $2.95 billion to settle U.S. corruption lawsuit

NEW YORK (Reuters) - Brazil's state-controlled oil company Petroleo Brasileiro SA on Wednesday agreed to pay $2.95 billion to settle a U.S. class action corruption lawsuit, in what was said to be the biggest such payout in the United States by a foreign entity.

Howard Hughes shares hurt as Ackman trims stake to invest in own fund

BOSTON (Reuters) - Shares in Howard Hughes Corp dropped more than 3 percent on Wednesday after billionaire investor William Ackman, who chairs the real estate company's board and called it an attractive buy in May, said his firm would sell 2.5 million shares.

Design flaw found in Intel chips; fix causes them to slow: report

FRANKFURT (Reuters) - A design flaw has been found in microprocessors made by Intel Corp that requires updates to computer operating systems, a tech publication reported, adding that the fix causes the chips to operate more slowly.

Automakers post lower December U.S. sales, weaker year lies ahead

DETROIT (Reuters) - Most major automakers on Wednesday reported lower December U.S. sales as they look ahead to weaker sales in 2018 that will test pricing discipline in an industry where consumer discounts are already at elevated levels.

Dan Zwirn Prepares To Profit From Coming "Tidal Wave Of Consumer Debt Charge-Offs"

The coming wave of consumer debt defaults, from the subprime auto market to credit cards and student loans, has been a frequent topic for us over the past several months...here are just a couple of examples:



Carmageddon: Deep Subprime Auto Delinquencies Spike To 10-Year Highs

New Warning Signs Emerge For Subprime Auto Securitizations

Is The Bubble About To Burst? Student-Loan Delinquency Rates Rise For First Time In Years

Baby Boomers Borrowed $100BN In Student Loans For Their Children And Now Defaults Are Soaring

Of course, while it's relatively easy to recognize the signs of debt bubbles (deteriorating underwriting standards, rising delinquencies, etc.) it's almost impossible to know precisely when, where or how they will pop...as anyone who lived through the 'great recession' can tell you. Which is precisely why Daniel Zwirn (formerly of the now defunct DB Zwirn hedge fund) and currently of Arena Investors, says he's taking steps today to position his fund to invest in the inevitable "tidal wave of consumer charge-offs" when the various consumer debt bubbles do finally burst. Per Bloomberg:

"We're about to hit a tidal wave of consumer charge-off activity," Zwirn says in an interview. "We're working on positioning ourselves to buy a lot of that. That whole defaulted subprime consumer finance ecosystem is going to be ...

Firefighters Respond To Fire At Clintons' House In Chappaqua

In a day that turned from boring, to bizarre, to berserk in just a few short hours, the newsflow continued when Lohud, a news source for Rockland and Westchester counties in New York, reported that firefighters were responding to a fire at Bill and Hillary Clinton's house in Chappaqua.

#BREAKING: Firefighters responding to a fire at Bill and Hillary Clinton's house in Chappaqua.

— lohud.com (@lohud) January 3, 2018

New Castle police have confirmed a fire at the Clintons' home in Chappaqua, however, it was not immediately clear if the Clintons were at home when the fire erupted just before 3 p.m.

Police declined to give further details on the fire at 15 Old House Lane where Bill and Hillary Clinton have lived for nearly 20 years after buying it for $1.7 million in 1999.

But scanner reports said it was a bedroom fire and has been extinguished.

The house, built in 1889, features five bedrooms over 5,232 square feet and a pool on its 1.1 acres.

In August 2016, the former president and past presidential hopeful bought the four bedroom house next door, at 33 Old House Lane, for $1.16 million. In October, they got in trouble for not having a permit for a kitchen renovation and filling in the in-ground pool.

The following video reveals the Clinton's house in Chappaqua on Old House Lane.

Putting it all together: ...

Paul Manafort Sues DOJ, Robert Mueller And Rod Rosenstein: Full Lawsuit

Paul Manafort, who served as the campaign chair for then-candidate Donald Trump's presidential campaign from March to August 2016, on Wednesday filed a lawsuit against the US Department of Justice (DOJ), Special Counsel Robert Mueller and Deputy Attorney General Rod Rosenstein.

The suit brought Wednesday in US District Court in Washington where Manafort and another former Trump campaign aide, Robert Gates, were charged, contends that the order Rosenstein signed to appoint Mueller "exceeds the scope of Mr. Rosenstein's authority to appoint special counsel as well as specific restrictions on the scope of such appointments" and challenges Mueller's decision to charge Manafort with alleged crimes that they say have nothing to do with the 2016 campaign, but rather relate to lucrative lobbying work Manafort and his deputy did for a former Russia-friendly government in Ukraine. That work ended in 2014, the suit says. Manafort and his deputy Rick Gates deny the allegations in the charges.

The focus is on a part of the Rosenstein order that says that Mueller may investigate "any matters that arose or may arise directly from the investigation." The Manafort lawyers say that goes beyond what the law allows Rosenstein to empower Mueller to do.

Further, the Rosenstein order gives Mueller "carte blanche to investigate and pursue criminal charges in connection with anything he stumbles across while investigating, no matter how remote from the specific matter identified as the subject of the appointment order," the lawsuit says.
Manafort and Gates was arrested in October and charged with money laundering and acting as an unregistered foreign agent during his work as a lobbyist for former Ukrainian president Viktor Yanukovych and his party of regions. None of the charges brought against Manafort pertain to his work with the Trump campaign.

The legal action represents the late ...

VIX Crashes To 8 Handle As S&P Tops 2710

Because nothing says sell volatility like an uncertain Fed, unbelievable Trump-related headlines, and an unbullish bond market...

This is the lowest VIX print since the flash crash on 12/20...

Utility Bid Is a Deal Maker's Delight

Dominion Energy's bid for Scana comes partly at the expense of ratepayers and shareholders stung by a nuclear plant debacle.

Ant-Moneygram's Demise Spells the End for China-U.S. Deal Making

CFIUS's decision to block the proposed $1.2 billion deal shows that Beijing's recent efforts to relax foreign investment rules aren't going to meet with much reciprocity.

Can Amazon Do With Clothes What It Did With Books?

Amazon.com is 24 years old but certainly isn't acting its age. With its shares up 57% last year and a forward price to earning ratio of 276, the company looks more like a fast-growing teenager than an adult. Its biggest challenge is how to stay young.

13 December 2017 FOMC Meeting Minutes: When Will The Next Federal Funds Rate Increase Occur?

Fed-sealSMALL-- this post authored by Steven Hansen

The 01 November 2017 meeting statement presented the actions taken. This post covers the economic discussion during this FOMC meeting between the members (minutes were released today). There was considerable discussion on inflation and timing on the next federal funds rate increase, and an interesting quote:

... Participants discussed several risks that, if realized, could necessitate a steeper path of increases in the [federal funds] target range; these risks included the possibility that inflation pressures could build unduly if output expanded well beyond its maximum sustainable level, perhaps owing to fiscal stimulus or accommodative financial market conditions ...

Bond Report: Treasury yields pare decline after Fed minutes highlight divide over pace of rate hikes

Treasury prices pared modest gains Wednesday, leaving yields slightly lower, after minutes of the Federal Reserve's December policy meeting highlight a division over the central bank's forecast for three rate increases in 2018.

Ulta Beauty and Adidas rank among Wells Fargo's top retail-stock picks for 2018

Wells Fargo is optimistic about retail in 2018, and has put Ulta Beauty, Adidas, Coach parent Tapestry and PVH Corp. on its list of top picks.

Market Extra: The hidden reason why stock market volatility has been so low

The U.S. stock market in 2017 was notable for two trends that were related, but separate: gains were pretty much consistent throughout the year, and so-called risk assets didn't see the kind of fluctuations they historically do.

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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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