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11Jan2018 Market Close: All Three Major Indexes Hit All-time Highs, Rising Oil Prices Lifted Energy Stocks, US Dollar Index And Crude Prices Slip Fractionally

Written by Gary

All three major benchmarks achieved record closing highs today (SPY +0.7%), led by Boeing and other big economic growth plays and surging energy shares.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Wall St. rises with oil prices, earnings optimism

(Reuters) - Wall Street surged to record highs on Thursday as rising oil prices lifted energy stocks and investors bet on a strong U.S. corporate earnings season.

Lower taxes and tight labor market prompt Walmart to hike U.S. wages

NEW YORK (Reuters) - Walmart will raise entry-level wages for U.S. hourly employees to $11 an hour in February as it benefits from last month's major overhaul of the U.S. tax code and competes for low wage workers in a tight labor market.

Ford urges 2,900 pickup owners to stop driving after new Takata death

WASHINGTON (Reuters) - Ford Motor Co said on Thursday it had confirmed a second death in an older pickup truck caused by a defective airbag inflator of Takata Corp and urged 2,900 owners in North America to stop driving immediately until they can get replacement parts.

More layoffs at Indiana factory Trump made deal to keep open

INDIANAPOLIS (Reuters) - More than 200 workers clocked in for their final shifts on Thursday at Carrier Corp. in Indianapolis in the latest round of layoffs at a plant President Donald Trump toured in December 2016 to trumpet a deal to save jobs and prevent its closure.

Berkshire energy unit names CEO to replace potential Buffett successor

(Reuters) - Berkshire Hathaway Inc's energy unit on Thursday named William Fehrman as its new chief executive to replace Gregory Abel, who was promoted a day earlier to oversee more Berkshire units, and potentially succeed Warren Buffett.

Peter Thiel submits bid for Gawker, faces challenges

NEW YORK (Reuters) - Venture capitalist Peter Thiel has made an offer for Gawker, hoping to overcome legal hurdles and rival bidders for the online news site the billionaire helped shutter by funding litigation against it, people familiar with the matter said on Thursday.

Luxury group Kering to spin off Puma to its own shareholders

FRANKFURT/LONDON (Reuters) - Gucci-owner Kering plans to spin off German sports brand Puma to the French conglomerate's shareholders to focus squarely on its luxury brands.

Hong Kong, London, New York shortlisted for Aramco IPO: sources

DUBAI/LONDON (Reuters) - Saudi Arabia has shortlisted New York, London and Hong Kong - singly or in a combination of two or even all three - for the international portion of the listing of national oil company Aramco, two sources with knowledge of the discussions said.

Wal-Mart's Sam's Club to shut some stores after review

(Reuters) - Sam's Club, a unit of Wal-Mart Stores Inc , said it had closed a series of stores following a review, the membership-only store chain said in a tweet on Thursday.

Trannies Soar Most Since 2001, Treasury Yields Tumble, Dollar Dumped

After a brief pause, everything is awesome again...

Trannies exploded higher today (2nd best day since Trump election)... S&P record high, Dow above 25,500 for first time... and on and on...

https://www.zerohedge.com/sites/default/files/inline-images/20180111_Eod15.png

Despite equity market exuberance, VIX rose on the day, testing back above 10...

https://www.zerohedge.com/sites/default/files/inline-images/20180111_Eod14.png

Today was among the biggest short squeezes in recent years...

Bipartisan Senate Group Reaches "Agreement In Principle" On DACA

Update: In another embarrassing example of the White House's disorganized messaging, Sen. Tom Cotton said President Trump told a group of senators during a Thursday meeting to go back to the drawing board - just as Press Secretary Sarah Huckabee Sanders was confirming that the group was close to a deal.

Sen Cotton says Pres Trump basically told a bipartisan group of lawmakers to go back to the drawing board during a meeting at the WH today.

— Frank Thorp V (@frankthorp) January 11, 2018

...Marc Short, the administration's legislative director, also added that a DACA deal was a long way off.

Marc Short asked if they had a deal on #DACA.

Short: "A long ways to go..."

— Frank Thorp V (@frankthorp) January 11, 2018

Lindsey Graham, also a member of the bipartisan group, also confirmed that there's no deal...

Q from @GarrettHaake: Deal or no deal Senator?@LindseyGrahamSC: "There's no deal yet!"

— Frank Thorp V (@frankthorp)

Fed's Dudley Is Worried About "Elevated Asset Prices", Sees "Real Risk" Of US Overheating, Hard Landing

In today's most anticipated Fed speech, outgoing NY Fed president Bill Dudley delivered keynote remarks at a SIFMA event in New York, titled "The Outlook for the US Economy in 2018 and Beyond", in which he warned bluntly that the prospect of U.S. economic overheating "is a real risk over the next few years" and cautioned that one area he is "slightly worried about is financial market asset valuations, which I would characterize as elevated."

But before algos read too much into it and decide to sell on yet another "irrational exuberance" moment, the head of the most important regional Fed immediately hedged that even a "significant" market drop would not have the "destructive impact" we saw a decade ago, to wit:

I am also less worried because the financial system today is much more resilient and robust than it was a decade ago. Thus, even if financial asset prices were to decline significantly—which presumably would occur if the economic outlook were to deteriorate—I don't think such declines would have the destructive impact we saw a decade ago.

Is he right? We will let readers decide...

asd

He then reverted back to rates, saying that "I will continue to advocate for gradually removing monetary policy accommodation. As I see it, the case for doing so remains strong."

The reason for that is the same one

One Trader Warns "Don't Be Ashamed If Your Treasury View Is Wrong"

Following yesterday's strong auction and carefully-worded denial by China, US Treasury yields are back to unchanged (despite bond gurus everywhere calling for the end of days). Given the massive net speculative short position, we suspect the lack of follow-through today has many disappointed but as former fund manager Richard Breslow explains, don't be upset if your Treasury view is "wrong."

https://www.zerohedge.com/sites/default/files/inline-images/20180111_Eod6.png

Via Bloomberg,

It's a shame that talking at cross purposes has become the norm rather than an unfortunate, sometimes amusing, more often annoying, characteristic of modern discussion. Participants like to set up straw men and then declare a gotcha moment when the other side doesn't meet the criteria. Another manifestation of this problem is the insistence on willingly eschewing nuance and context. Such is the state of debate regarding what is or isn't happening with the U.S. bond market.

Treasuries are unlike any other asset in the world. They don't move the same way as other instruments. They serve multiple purposes for a hugely diverse group of people. Buyers and sellers can match up and both be satisfied. Without knowing precisely who is on one side or the other of a trade it is virtually impossible to understand their motivation. In shor ...

Will Airlines Blow Their Tax Windfall?

U.S. airlines are among the biggest beneficiaries of the tax plan. But investors worry that they also may be at the greatest danger of competing their tax gains away.

Xerox Should Look to Copy Fujifilm's Success

The venerable U.S. company Xerox could find a tie-up with its longtime joint-venture partner Fujifilm helps it to reinvent itself.

How to Punish Auditors Behaving Badly

A two-year ban in India for PwC makes a good headline, but the impact may be light. Auditors of public companies often fall short of investor expectations—as do their punishments.

Trump Today: President reverses his own criticism of FISA before House vote

President Donald Trump on Thursday suggested he was opposed to a surveillance program that his own administration said it supported just a day earlier, but quickly reversed himself.

CryptoWatch: The prospects for a bitcoin ETF look dead in the water

The digital currency bitcoin is one of the hottest things on Wall Street, just as exchange-traded funds have become the most popular investment vehicle around. However, despite what is seen as heavy interest and pent-up demand, investors shouldn't expect the two to be combined soon.

Capitol Report: Mnuchin says 90% of workers will get more take-home pay under withholding change

The great majority of American workers will see a boost in their paychecks due to the tax bill President Donald Trump signed last month, Treasury Secretary Steven Mnuchin said Thursday.

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Earnings Summary for Today

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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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