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10Jan2018 Market Close: Wall Street Rally Halted Over Concerns About China And US Bonds, WTI Crude Settles In The Mid 63 Handle, Gold Index Slips Fractionally From Session Highs

Written by Gary

US equities markets hoping to close in the green (SPY -0.2%) continued to trade in the red as investors worried that China would slow US government bond purchases and that President Trump would end a key US trade agreement.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Concerns about China, NAFTA halt Wall St. rally

NEW YORK (Reuters) - Wall Street's major stock indexes ended lower on Wednesday after a choppy trading session as investors worried that China would slow U.S. government bond purchases and that U.S. President Donald Trump would end a key U.S. trade agreement.

Nestle to pick U.S. chocolate business buyer by end of week: sources

MILAN/LONDON/NEW YORK (Reuters) - Food giant Nestle plans to pick a buyer for its U.S. chocolate business by the end of this week, three sources close to the matter said on Wednesday, in a deal expected to top $2.5 billion.

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 could add U.S. Treasuries if market weakens further: Ivascyn

NEW YORK (Reuters) - Pimco, one of the world's biggest money managers, sees this week's U.S. bond market selloff as a buying opportunity and is not ready to call the spike in 10-year Treasury yield to a nine-month high a bear market precursor.

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.

Canada takes U.S. to WTO, U.S. says case helps China

GENEVA (Reuters) - Canada has launched a wide-ranging trade complaint against the United States, the World Trade Organization said on Wednesday, in a dispute that Washington said would damage Canada's own interests and play into China's hands.

Ford sued by truck owners alleging diesel emissions cheating

(Reuters) - Ford Motor Co installed emissions-cheating software in its F-250 and F-350 Super Duty trucks to ensure they passed federal tests, according to a lawsuit by truck owners filed on Wednesday.

Toyota, Mazda announce $1.6 billion plant for Huntsville, Alabama

MONTGOMERY, Ala. (Reuters) - Toyota Motor Corp and Mazda Motor Corp announced Wednesday they will build a $1.6 billion joint assembly plant in Alabama that will employ up to 4,000 workers, a boost for President Donald Trump who wants automakers to expand U.S. production.

U.S. import prices barely rise; wholesale inventories rebound

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.

Dip-Buyers Dominate As Bonds, Stocks, Dollar Shrug Off China Threats

The day started off with some excitement...

But by the close all was forgotten...

https://www.zerohedge.com/sites/default/files/inline-images/20180110_eod12.png

China put the fear of god into a few bond traders this morning...(30Y spiked 5bps higher only to close down 1bps on the day)

https://www.zerohedge.com/sites/default/files/inline-images/20180110_eod13.png

And prompted the herd-like response proclaiming that this is it - bond yields are blowing out. However, thanks to a super-strong 10Y auction, bonds were bid back into the green leaving 10Y yields lower on the day...

Democrats Humiliate Themselves With Their Own Study On Illegal Online Gun Sales

Authored by Mac Slavo via SHTFplan.com,

Gun-hating democrats who demanded a study into the sale of guns online were smacked with a dose of reality. They wasted two years attempting to buy guns illegally on the 'dark web', and the group of Democrats failed every single time.

Senator Elizabeth Warren joined with Senator Brian Schultz, D-Hawaii, and Representative Elijah Cummings, D-Md., to commission the GAO report.

https://www.zerohedge.com/sites/default/files/inline-images/20180110_warren.jpg

An embarrassing attempt to try to regulate guns further went horribly wrong when Democrats took it upon themselves to try to skirt the law to prove it can be done. Over the course of the two-and-a-half year investigation, agents tried to buy firearms illegally on the "Surface Web" and the "Dark Web," generally by sharing their status as "prohibited individuals" or trying to buy across state lines.

The NRA described the study as an attempt to replicate the findings of former New York City Mayor Michael Bloomberg's 2015 report, titled "Point, Click, Fire: An investigation of illegal online ...

O'Keefe Strikes Again: Twitter Engineer Admits Willingness To Share Trump DMs Without A Warrant

Project Veritas (PV) founder James O'Keefe has struck again with yet another bombshell undercover video which takes direct aim at the political bias, and generally creepy behavior, at Twitter.

In the first video below, an undercover PV journalist records a conversation with a Senior Network Engineer at Twitter, Clay Haynes, who seemingly admits that he would be perfectly happy to share Trump's private 'Direct Messages' with the DOJ without the hassle of a pesky warrant.

PV Journalist: "So, you're not a Trump lover?"

Haynes: "No."

PV Journalist: "Like, we're going to go into nuclear warfare because of him, like, what are you doing at your job to kind of quiet him or to downplay some of the things that he comes up with because, honestly, he's going to get us into so much trouble."

Haynes: "...we're more than happy to help the Department of Justice in their little investigation..."

PV Journalist: "Ok, like how?"

Haynes: "Basically, giving them every single tweet that he's posted. Even the ones he's deleted. Any direct messages, any mentions, oh yeah..."

So @jack do you have any response to this video of your engineer @dark_15 admitting that @Twitter will offer all of @realDonaldTrump's tweets and private DMs "even the ones he's deleted" to @TheJusticeDept?

"We Are 90% Through The Cycle": David Rosenberg's 2018 Outlook

From David Rosenberg of Gluskin Sheff

As we take out the crystal ball once again to provide our forecasts for the year ahead, it pays to drum up the old adage that to know where you are going you have to know where you have been.

With that in mind, I have to wonder what it means to be heading into a new year with the global economy in sync, the Fed tightening policy, the U.S. Treasury curve flattening, the equity markets hitting new highs, the credit cycle peaking out, extremely low volatility and investor complacency equally high, excessive valuations across most asset classes, and a U.S. labour market that is drum tight. As I dig into my memory bank, this backdrop is eerily similar to 1988, 1999, and 2006. And what we know about each of those years is that the one that followed was the last of the cycle.

So if the past is a precedent, we had better enjoy the next twelve months. The economic expansion and bull market won't necessarily end in 2018, but they will be on their last legs, nonetheless. Expect strains to emerge as the lags from the tightening in Fed policy expose the excesses in various corners of the financial markets. Constantly thinking of how to invest late in the cycle is the most prudent advice we can give, and how we are positioning our asset mix and portfolios.

Ten Late-Cycle Signposts



Expansion turning nine in June

Full employment

Decade-low savings rate

Cycle-high consumer confidence

Fed tightening

Flattening yield curve

Excessive P/E multiples

Very tight credit spreads

M&A boom

Peak autos/housing


We also have a new and untested Federal Reserve (with a virtually unprecedented four of seven Governor seats on ...

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.

A Bright Christmas Reignites Nordstrom Buyout Hopes

The Nordstrom family tried to do a $10 billion buyout in the fall but pessimism on retailers killed the deal. Now they would have to pay more to take the namesake department store chain private.

Trump Today: President says interview with Mueller 'unlikely' and attacks Feinstein over Fusion GPS testimony

President Donald Trump said Wednesday it's unlikely he'd talk with Special Counsel Robert Mueller, attacked Sen. Dianne Feinstein for releasing testimony by Fusion GPS's co-founder, and blasted the federal court system.

Market Extra: Investors are getting a taste of China's 2018 policy agenda

China this week took steps to let its currency trade more freely while also sending what might have amounted to a subtle warning on trade issues to Washington.

San Francisco doesn't even crack the top 10 on this list of best places for STEM workers

WalletHub studied the best metro areas for STEM employees, and San Francisco doesn't even come in the top 10.

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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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