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17Jan2018 Market Update: Wall Street Higher, Banks Drop,Tech, Industrials Lead, DOW Up 200 Points Plus, A Protracted Cryptocurrency Crash Would 'spill Over' Into Stocks, Wells Fargo Warns

Written by Gary

The US equities main benchmarks are higher, but no new highs have been recorded (SPY +0.5%). Gains in technology and industrial stocks has pushed the DOW up triple digits.


Here is the current market situation from CNN Money

North and South American markets are higher today with shares in Brazil leading the region. The Bovespa is up 0.97% while U.S.'s S&P 500 is up 0.59% and Mexico's IPC is up 0.10%.

What Is Moving the Markets

Here are the headlines moving the markets.

Tech, industrials lead Wall Street higher, banks drop

(Reuters) - Wall Street's main indexes rose on Wednesday, led by gains in technology and industrial stocks, but losses in Goldman Sachs and Bank of America dragged down bank shares.

BofA takes one-time tax hit, vows longer term boost

(Reuters) - Bank of America Corp's quarterly profit nearly halved due to tax-related charges, though net income excluding that hit topped estimates and management promised the new U.S. tax system would eventually benefit shareholders.

Bitcoin slumps below $10,000, half its peak, as regulatory fears intensify

LONDON/TOKYO (Reuters) - Bitcoin skidded below $10,000 on Wednesday, halving in value from its peak price, with investors gripped by fears regulators could clamp down on the volatile cryptocurrency that sky-rocketed last year.

Utilities, mining boost U.S. industrial production

WASHINGTON (Reuters) - U.S. industrial production increased more than expected in December as unseasonably cold weather at the end of the month boosted demand for heating, but manufacturing output barely rose, pointing to moderate growth in the industrial sector.

Rolls-Royce shares jump as commercial marine unit goes on block

LONDON (Reuters) - Britain's Rolls-Royce is considering the sale of its commercial marine business, which has been hit by weak demand in offshore oil and gas markets, as part of a restructuring of the company into three core units.

In replacing Dudley, New York Fed aims to avoid political pitfalls

NEW YORK (Reuters) - Unions and groups advocating for retirees, teachers, housing, and workers' benefits are among those visiting the ornate conference rooms of the Federal Reserve Bank of New York to lobby for a less conventional candidate to serve as its next president.

Goldman investors rattled by latest plunge in bond trading

(Reuters) - Goldman Sachs Group Inc on Wednesday reported a sharp drop in trading revenue that renewed questions about its ability to revive a moribund profit driver or find business to replace it, sending shares down 3 percent.

Banks expected to share tiny proportion of mammoth Saudi Aramco IPO

LONDON (Reuters) - The banks that will advise and execute Saudi Aramco's stock market listing are expected to share a tiny proportion of the $100 billion Riyadh hopes to raise in its initial public offering, according to banking sources and industry insiders.

SandRidge to meet with investor Icahn to quell rising tensions

HOUSTON (Reuters) - SandRidge Energy Inc plans to meet with activist investor Carl Icahn on Wednesday over his demands for a board shake-up and other governance changes, part of a bid by the U.S. shale oil producer to quell tensions with its largest shareholder and most outspoken critic.

VIX Surges To Highest Since 2015's Flash-Crash Versus Europe

Yesterday's 'spike' in VIX - to its highest since Dec 1st - is continuing this morning...

https://www.zerohedge.com/sites/default/files/inline-images/20180117_VIX1.png

(note: this is highly unusual relative to the recent regime of instant reversion lower in vol)

But what is most unnerving for many is relative to European volatility, this is the highest since August 2015...

https://www.zerohedge.com/sites/default/files/inline-images/20180117_VIX.png

As U.S. stocks failed to hold a fresh record, VIX jumped 15% on Tuesday, while the VStoxx Index remained near a record low.

The last time US VIX was this high relative to European equity VIX was in August 2015 - when the S&P crashed 11% in 4 days after China's surprise devaluation...

"For Your Consideration..."

Authored by 720Global's Michael Lebowitz via RealInvestmentAdvice.com,

https://www.zerohedge.com/sites/default/files/inline-images/20180117_cons.png

Consider the following:


  1. The current U.S. economic expansion has lasted 103 months and counting. Based on data since 1945 covering 11 business cycles, the average is 58 months and the longest was 120 months (1991-2001).

    The unemployment rate is at 4.1%, the lowest level since January 2001.

    For the first time on record, the S&P 500 produced positive total returns in each month of last year.

    The S&P CoreLogic Case-Shiller 20-City Home Price Index is at 203.84, the highest level since December 2006 and less than 3 points shy of the all-time high seen at the peak of the housing bubble in July 2006.

    Small Business Optimism is at the highest level since September 1983 and the Michigan Current Consumer Sentiment gauge is at 17-year highs.

    Recent corporate earnings growth is strong at 9-10% and running above the historical average (6%).

    Tax reform legislation reduces taxes for corporations from a statutory rate of 39% to 21%.

    The current U. ...

Yemen's Houthi Rebels Claim Successful Ballistic Missile Attack On Saudi Millitary Base

Yemeni Houthi rebels claim to have struck targets inside Saudi Arabia after launching two ballistic missiles on Tuesday, according to Houthi military media. Some pro-Houthi sources also reported the destruction of a Saudi military base in Najran, which lies in southwest Saudi Arabia near the border with Yemen.

Meanwhile, Saudi Arabia disputes that the missiles hit their targets, with Saudi state TV Ekhbariya reporting that Saudi missile defense has intercepted one near Jizan Regional Airport, a busy transport hub in southern Saudi Arabia, though it is unclear what happened to the reported second missile.

asd
An image from a video released by Yemeni military media shows the Qaher M-2 ballistic missile.

According to Middle East based Al Masdar News:

First, a short-range ballistic missile was launched at the Jizan Regional Airport, an important transport hub in southern Saudi Arabia. Following this, Yemeni Missile Forces have fired a Qaher M-2 missile, a modern and domestically produced Yemeni surface-to-surface missile based on the Soviet S-75 Dvina design, on a military command center in the Najran province of Saudi Arabia.

According to the Yemeni Armed Forces, both targets hit their intended targets with high precision and to full effec ...

Oil Speculators Back Up The Truck

Via Dana Lyons' Tumblr,

Speculators have established their largest ever net long position in crude oil futures; are they about to get drilled?

https://www.zerohedge.com/sites/default/files/inline-images/20180117_oil1.jpg

While all of the attention is on the feats of levitation being displayed by the stock market, lots of other things are rallying as well.

That includes crude oil, which is up about 7% to start the year, and roughly 50% in the past 7 months. And while the rally still leaves the price of oil nearly 50% below its highs of just 4 years ago, by some measures, the excitement surrounding the commodity surpasses even that of stocks.

At least one might make that argument based on trader positioning in the crude oil futures market. There, we see via the CFTC's Commitment Of Traders (COT) report that Non-Commercial Speculators currently hold a net-long total of over 650,000 contracts, far and away the largest net-long position on record.

image

As a refresher, Speculators are by and large commodity pools and he ...

Fear the Unknown at General Electric

GE's nasty surprise raises deeper fears about the company and doubts about whether a breakup would preserve value for investors.

UnitedHealth Cashes In on Tax Cut

Tax reform lived up to the hype for health insurers, as industry bellwether UnitedHealth reported higher-than-expected revenue in the fourth quarter and raised its forecast for 2018 by 17%.

Where Banks and Tech Are Going Head to Head

New rules in Europe have opened a battleground between big tech and big banks over who will control consumers' wallets.

December 2017 Headline Industrial Production Improvement Trend Continues

Written by Steven Hansen

The headlines say seasonally adjusted Industrial Production (IP) was up. The manufacturing segment of industrial production also improved.

Market Extra: Stock-market investors wonder if 'euphoria' stage has arrived

Stocks are on fire to start 2018, but some longtime bulls question whether the market is really entering the final "euphoria" stage.

London Markets: FTSE 100 ends lower for third straight day as Burberry, Pearson drop sharply

U.K. stocks close lower Wednesday, with a slide in shares of fashion house Burberry Group PLC and publisher Pearson PLC leading the blue-chip market to its third consecutive drop.

Wal-Mart offers customers a new opioid crisis solution: Get rid of old meds safely, at home, for free

Safe medication disposal, though a key facet of the opioid crisis, has been tough to tackle.

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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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