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10Jan2018 Market Update: Wall Street Lower, DOW Up Single Digit And Climbing After Report China May Slow U.S. Bond Purchases, Wholesale Sales Improved

Written by Gary

The US equities main benchmarks are climbing out of the morning opening lows (SPY -0.1%) and might make it to positive territory before the closing bell.


Here is the current market situation from CNN Money

Traders Corner - Health of the Market

Looking at the last three columns (below), the first one (Actual), is what was reported this morning. The second column (Forecast) is what analysts had forecast and the third column is the previous report. Full calendar HERE.

What Is Moving the Markets

Here are the headlines moving the markets.

Wall Street lower after report China may slow U.S. bond purchases

(Reuters) - Wall Street's major indexes fell on Wednesday, stalling the rally that marked the start of 2018, after a report that China is considering slowing its purchases of U.S. government debt.

Exclusive: Saudi Aramco working to raise cheap loans before IPO - banking sources

DUBAI (Reuters) - Saudi Aramco is working to secure billions of dollars in cheap loans from banks seeking to strengthen their ties with the oil giant before its stock listing, banking and export credit agency (ECA) sources said.

Microsoft says security patches slowing down PCs, servers

(Reuters) - Microsoft Corp said on Tuesday that software patches released to guard against microchip security threats slowed down some personal computers and servers, with systems running on older Intel Corp processors seeing a noticeable decrease in performance.

U.S. wholesale inventories rebound strongly in November

WASHINGTON (Reuters) - U.S. wholesale inventories rose slightly more than initially estimated in November, suggesting that inventory investment will probably contribute to economic growth in the fourth quarter.

Pimco's Ivascyn says Pimco would consider adding Treasuries on further weakness

NEW YORK (Reuters) - Dan Ivascyn, group chief investment officer at Pimco, said on Wednesday that Pacific Investment Management Co would consider adding U.S. Treasuries on further weakness in the bond market.

Canada takes United States to WTO in complaint over trade remedies

GENEVA (Reuters) - Canada has launched a wide-ranging trade dispute against the United States, challenging Washington's use of anti-dumping and anti-subsidy duties, Canada said in WTO filing dated Dec. 20 and published on Wednesday.

U.S. import prices post smallest gain in five months; inventories rise

WASHINGTON (Reuters) - U.S. import prices recorded their smallest increase in five months in December and underlying imported price pressures were muted amid declining costs for food and consumer goods.

Teva Pharm directors cut their salaries in half: board member

JERUSALEM (Reuters) - The board of directors at Teva Pharmaceutical Industries , which is reducing its workforce by more than a quarter as part of a global overhaul, has taken a 50 percent pay cut, a board member said on Wednesday.

U.S. law firm accuses Ford of rigging trucks to cheat emission tests

(Reuters) - A U.S. law firm accused Ford Motor Co of rigging its F-250 and F-350 Super Duty trucks with emissions-cheating devices to ensure they passed tests, according to a lawsuit filed on Wednesday.

Bankruptcy Looms As Sears Warns "Will Consider All Options" If New Financing Process Fails

Sears Holdings, the one-time giant retailer that has been teetering on the edge of bankruptcy for years now, announced this morning that, following yet another disappointing holiday season (shocking), they've initiated new discussions with lenders aimed at renegotiating terms on some $1 billion of "non-first lien debt."

According to a press release from the company, the debt concessions would be accompanied by another $200 million of cost cuts.

Sears Holdings Corporation announced today it has raised $100 million in new financing and is pursuing an additional $200 million from other counterparties. In addition, Sears Holdings has amended its existing second lien notes, maturing October 15, 2018, to increase their borrowing base advance rate for inventory and defer their collateral coverage test and restart it with the second quarter of 2018, and is in discussions with certain lenders regarding additional transactions to improve the terms on potentially more than $1 billion of its non-first lien debt.

The Company also outlined incremental actions to further streamline its operations to drive profitability, including cost reductions of $200 million on an annualized basis in 2018 unrelated to store closures.

Rob Riecker, Sears Holdings' Chief Financial Officer, said: "As previously announced, we are actively pursuing transactions to adjust our capital structure in order to generate liquidity and increase our financial flexibility. The new capital we have secured represents meaningful progress towards those objectives and demonstrates that we continue to have options to finance our business."

Of course, the most important part of this morning's press release is the following statement which serves as a not so thinly-veiled threat to junior creditors that any failure to grant financial co ...

On-Duty Police Deaths Were Near A 50-Year Low In 2017

Authored by Ryan McMaken via The Mises Institute,

The number of police officers killed on duty dropped to near a 50-year low in 2017. As of December 28, 2017, 128 officers died in the line of duty. That's down 10% from 2016, when 143 officers died, according to new data from National Law Enforcement Officers Memorial Fund.

The only other year with fewer deaths in the past five decades was 2013, when 116 officers were killed.

These deaths should not all be interpreted as the result of attacks from members of the public. Traffic accidents are the leading cause of police-officer deaths, although shootings play a significant role.

Although we continue to hear complaints about a "war on cops" from police labor unions, government institutions, and their allies, there is no evidence to support the claim.

https://www.zerohedge.com/sites/default/files/inline-images/20180110_cops.png

As Tate Fegley noted in October, the most recent data continues a decades-long trend:

[T]here has been a downward trend in of ...

Goldman Explains How "Bitcoin Could Succeed As A Form Of Money"

Yes, we all know the recurring complaints: it's volatile, it's new and untested, it can be hacked, and it has no central bank backing it; most established pundits hate it - today's comments by Warren Buffett a case in point - and as Goldman writes in a note released today by its economic team, "cryptocurrencies can seem like a solution in search of a problem."

Specifically, Goldman notes that "money derives its value from its usefulness in facilitating transactions and diversifying portfolios. The US Dollar serves both purposes relatively well—or at least better than the main alternatives—so it is in high demand around the world."

asd

Then again, the real reason why Goldman is unable to grasp the utility of Bitcoin, is that the bank - like so many of its peers - is unwilling and unable to admit that there is a problem which bitcoin is addressing, a problem which as Deutsche Bank's Jim Reid and Macquarie's Viktor Shvets explained back in September, is that "Modern Finance, Not Bitcoin, Is The Real Fraud."

Hong Kong's Hang Seng Index Posts Longest Rally In History

For 12 straight days (and 14 of the last 15), Hong Kong's Hang Seng Index has gone up. That is the longest win streak for the index since its inception in 1969.

https://www.zerohedge.com/sites/default/files/inline-images/20180110_hk1.png

Interestingly, Hang Seng has risen non-stop since The Fed hiked rates...

https://www.zerohedge.com/sites/default/files/inline-images/20180110_hk2.png

As Bloomberg reports, Linus Yip, a Hong Kong-based strategist with First Shanghai Securities Ltd., said flows into Hong Kong stocks accelerated as moderating interbank rates in the city and in China soothed investor concerns, though he warned the rally's momentum may wane.

Real News on Fake Data in China

Another big Chinese province has admitted to falsifying economic data. That doesn't mean all Chinese economic data is useless. It does mean investors need to educate themselves on where to look, or risk missing big the boat on key shifts in global markets as China's heft grows.

Is the Great Bond Blowout Finally Happening?

The bond market has had an early alarm call in 2018. The 10-year U.S. Treasury yield has risen to its highest since March; bond guru Bill Gross says the move confirms a bear market. Bonds still have support, but that could erode quickly.

Earnings May Temper the Bank Rally

Bank shares have been riding high, seen by investors as among the biggest beneficiaries of tax reform and a strengthening economy. But this enthusiasm could soon collide with just mediocre fundamentals.

December 2017 Headline Wholesale Sales Improved

Written by Steven Hansen

The headlines say wholesale sales were up month-over-month with inventory levels remaining elevated. Our analysis essentially agrees.

December 2017 Import and Export Price Year-over-Year Inflation Rate Decreased

Written by Steven Hansen

Year-over-year import and export price inflation decreased.

Kids in America are far more at risk of dying than in other wealthy countries

Children are more likely to die in the U.S. than in other wealthy OECD nations.

Why women are turning their backs on jobs in Silicon Valley

A new Pew report reports that women are opting out of some lucrative jobs

Project Syndicate: Politics is still a threat, but the biggest risk in 2018 is a spike in interest rates

The best guess is that the global economy will perform strongly in 2018, but the threat of populism looms large while the risk of higher interest rates could be a surprise, writes Kenneth Rogoff.

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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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