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05Jan2018 Market Update: Wall Street Sets New Historical Record Highs, WTI Crude Slips From The 62 Handle, US Job Growth Cools As Labor Market Nears Full Employment

Written by Gary

The US equities main benchmarks trend higher as investors shrug off weak December jobs data (SPY +0.3%). US job growth slowed more than expected in December amid a decline in retail employment.


Here is the current market situation from CNN Money

Traders Corner - Health of the Market

What Is Moving the Markets

Here are the headlines moving the markets.

Wall Street higher as investors shrug off weak December jobs data

(Reuters) - Wall Street's major indexes rose to record highs on Friday after weaker-than-expected U.S. job additions in December lifted hopes that the Federal Reserve would stick to its policy of gradual interest rate hikes in 2018.

U.S. job growth cools as labor market nears full employment; wages up

WASHINGTON (Reuters) - U.S. job growth slowed more than expected in December amid a decline in retail employment, but a pick-up in monthly wage gains pointed to labor market strength that could pave the way for the Federal Reserve to increase interest rates in March.

Apple, researchers eye patches to solve Intel chip flaws

FRANKFURT/BENGALURU (Reuters) - Security issues with Intel Corp microchips are only slowing computers slightly, technology companies said, as researchers played down the need for mass hardware replacements to protect millions of devices from hackers.

U.S. factory orders rise for fourth straight month

(Reuters) - New orders for U.S.-made goods increased in November for a fourth straight month, but business spending on equipment appeared to be cooling after robust growth in 2017.

Uber ex-CEO Kalanick selling nearly a third of stake for $1.4 billion: source

(Reuters) - Uber Technologies Inc co-founder Travis Kalanick, who was ousted as chief executive in June, is selling nearly a third of his 10 percent stake in the ride-services company for about $1.4 billion, a person familiar with the matter said on Thursday.

Morgan Stanley to take $1.25 billion hit in the fourth quarter from the tax bill

(Reuters) - Morgan Stanley said on Friday it would take a $1.25 billion hit in its fourth-quarter earnings due to a cut in corporate tax rate as part of the U.S. tax code overhaul.

Saudi Arabia converts Aramco into joint-stock company ahead of historic IPO

DUBAI (Reuters) - Saudi Arabia has changed the status of its national oil giant Aramco to a joint-stock company as of Jan. 1, in a key step for an initial public offering (IPO) planned for later this year.

Airbus in talks to sell at least 100 jets to China: sources

PARIS (Reuters) - Airbus is in talks to sell 100 or more jetliners to China during a visit by French President Emmanuel Macron to Beijing next week, people familiar with the negotiations said.

Constellation misses on sales, wine and spirits disappoint

(Reuters) - Corona maker Constellation Brands Inc missed Wall Street estimates for third quarter sales on Friday and said wine and spirit volumes for the full-year would be at the low end of its prior forecast.

Quantitative Tightening Is The Biggest Economic Threat In 2018

Authored by John Mauldin via MauldinEconomics.com,

In response to the 2008 financial crisis, the Fed and other central banks deployed zero or near-zero interest rates, quantitative easing, and assorted other interventions.

These may have averted an even worse disaster, but their impacts were far from ideal. Nonetheless, the economy slowly lifted off as consumers rebuilt their balance sheets and asset values rose.

The asset values climbed in large part because the Fed practically forced everyone with money to invest it in risk assets: stocks, real estate, corporate bonds, etc. But as my long-time Thoughts from the Frontline readers know, the Fed's trickle-down monetary policy hasn't really worked.

The resulting wealth effect theoretically enabled more spending, at least by those in the top income quintile.

But the recovery has been slow and ugly, and too many people still don't feel the progress.

QE Benefits Were Not Evenly Distributed

Those who gripe about income inequality actually have points to make.

Even if you filter out the top one half of 1% (the tech billionaires, Warren Buffett, et al.), there is still a large imbalance in how much the top and bottom earners have benefited from the Fed's lopsided monetary policy.

The chart below shows that the share of unmarried adults in double-up households has increased in all age brackets, and especially among Millennials.


Source:

As Steinhoff Liquidates, This Gulfstream Can Be Yours For Only $25 Million

The last time we checked in on Steinhoff - the scandal-plagued South African retailer laid low by an accounting scandal and which many have called the next Enron - the company admitted that its lines of credit were being withdrawn or suspended, while the company's largest shareholder and former Chairman, Christo Wiese, was caught in a vicious margin call, forcing him to sell increasingly more shares in various related entities as both the stock price of Steinhoff - and his net worth - continued to disintegrate.


Christo Wiese: largest Steinhoff shareholder and 4th richest South African

The Amsterdam-registered retailer also said it would restate earnings for 2015, 2016 and 2017, with figures for prior years also "likely" to need restating.

Meanwhile, the liquidity crunch that emerged over the past month, has accelerated and has forced the company to resort to dramatic "high-flying" liquidations to keep itself alive.

On Thursday, Steinhoff warned it's seeking "significant near-term liquidity" for some of its business units. And, as Bloomberg reports, among the first casualties is the company's private jet:

Steinhoff said it took delivery of the jet in April last year. It was advertised by Global Jet, an operator of business aircraft, for $24.75 million in 20 ...

"We Are In Your Home" Threatens ISIS-Scarved Man In Selfie Outside New York Met

A man wearing an ISIS face scarf posted a chilling selfie outside New York's Metropolitan Museum of Art with the caption: "We are in your home, O slaves of the cross"

https://www.zerohedge.com/sites/default/files/inline-images/47B3B48800000578-5229231-image-a-1_1514912633809.jpg

The photo was uploaded to a pro-ISIS channel on the messaging app Telegram, reports the Mail Online, which was provided the photo by terror-monitoring group MEMRI, which said it could not verify the authenticity of the image.

The image is eerily reminiscent of a photo posted days before the deadly Manhattan truck attack, killing eight and wounding eleven.

In late October, 29 year old Uzbecki immigrant Sayfullo Saipov drove a Home Depot rental truck into a Manhattan crowd, killing eight and injuring eleven - including children.

https://www.zerohedge.com/sites/default/files/inline-images/47B3FACA00000578-5229231-image-a-18_1514919385779_0.jpg

After the attack, Sayfullo was shot in the stomach by police and arrested. An ISIS flag and a document pledging allegiance to the terror-group was found in the truck.

FBI Launches New Investigation Into The Clinton Foundation

Exactly two weeks after we reported that Attorney General Jeff Sessions instructed DOJ prosecutors to dig into the FBI's handling of the Uranium One investigation, we learn that the FBI has opened a new investigation of the Clinton Foundation launched by the DOJ - spearheaded by its Little Rock, Arkansas field office, according to John Solomon of The Hill.

aaFBI Offices, Little Rock, Arkansas

The probe will focus on pay-for-play schemes and tax code violations, according to law enforcement officials and a witness who wishes to remain anonymous.

The officials, who spoke only on condition of anonymity, said the probe is examining whether the Clintons promised or performed any policy favors in return for largesse to their charitable efforts or whether donors made commitments of donations in hopes of securing government outcomes.

The probe may also examine whether any tax-exempt assets were converted for personal or political use and whether the Foundation complied with applicable tax laws, the officials said. -The Hill

The witness who was interviewed by Little Rock FBI agents said that questions focused on "government decisions and discussions of donations to Clinton entities during the time Hil ...

The Dow Has What Investors Want

The Dow Jones Industrial Average has done very well lately, with a total return of 27% since the end of 2016, versus 24% for the S&P 500. And that has less to do with the quirk of how the Dow is constructed than what is in it.

Drug Industry Is Ripe for a Wave of Deals

Big pharma and biotech aren't benefiting as much from higher drug prices. That raises the possibility of large deals.

Now Italy Is Growing, Can It Lighten Its Huge Debt Load?

Italy, Europe's most indebted large economy, is at the crossroads again. Growth has picked up finally, and the country's bank cleanup is in progress. But the national election due in early March puts the country's debt back in focus.

London Markets: FTSE 100 powers to fresh record as Dow 25,000 inspires European stock rally

U.K. stocks scored a fresh record on Friday, driving higher after another round of all-time highs in the U.S. in the previous session. Stocks stayed higher after the closely watched U.S. jobs report missed expectations.

ETF Focus: Expect 'elevated volatility' in 'the vast majority of U.S. ETFs' in 2018

The U.S. stock market was historically quiet in 2017—daily moves were slight, volatility was near record lows, and major indexes have gone a nearly unprecedented length of time without even mild pullbacks.

Market Extra: The S&P 500 is poised to do something it hasn't done since 1964

The U.S. stock market hasn't just started 2018 off on a good footing, it has started it with what is by one standard the best out-of-the-gate performance in more than 50 years.

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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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