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18Jan2018 Pre-Market Commentary: Wall Street Taking A Breather After DOW's Momentousness Push Above 26 K, US Housing Starts And Jobless Claims Down Sharply, WTI Crude In The Low 64 Handle

Written by Gary

Stock futures are pushing the opening to be down fractionally (SPY -0.05%). US jobless claims fall to 45-year low and US housing starts down sharply on drop in single-family units.


Here is the current market situation from CNN Money

European markets are mixed. The DAX is higher by 0.42%, while the FTSE 100 is leading the CAC 40 lower. They are down 0.42% and 0.05% respectively.

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.

Stock futures edge higher after Morgan Stanley results

(Reuters) - Bullish global economic signals and gains for Morgan Stanley drove a rise in U.S. stock futures on Thursday, a day after the Dow extended a new year rally to close above 26,000 for the first time.

Exclusive: Trump considers big 'fine' over China intellectual property theft

WASHINGTON (Reuters) - President Donald Trump said on Wednesday the United States was considering a big "fine" as part of a probe into China's alleged theft of intellectual property, the clearest indication yet that his administration will take retaliatory trade action against China.

Morgan Stanley's wealth management business helps bank top estimates

(Reuters) - Morgan Stanley's quarterly profit dropped almost 60 percent on a provision related to the new U.S. tax law, but adjusted profit beat analyst expectations as strength in wealth management offset a drop in trading revenue.

BMW aims to outsell Mercedes by 2020: CEO tells Manager Magazin

FRANKFURT (Reuters) - BMW aims to overtake rival Mercedes-Benz in terms of annual deliveries within two years, Chief Executive Harald Krueger told German monthly Manager Magazin.

Emirates hands Airbus A380 superjumbo lifeline with $16 billion order

NANTES, France (Reuters) - Emirates announced a deal for up to 36 Airbus A380 aircraft on Thursday worth as much as $16 billion at list prices, saving the world's biggest passenger jet from death row and securing its future for at least another decade.

Lexus, Infiniti luxury car brands test ways to fight Tesla, German rivals

DETROIT (Reuters) - Japanese luxury auto brands Lexus and Infiniti are using the Detroit auto show to test new ways to regain momentum against Germany's prestige automakers and Silicon Valley's Tesla Inc .

Intel: Problem in patches for Spectre, Meltdown extends to newer chips

(Reuters) - Data center computers with Intel Corp's newer chips might reboot more often than normal because of problems with the patches issued to fix the so-called Spectre and Meltdown security flaws, the company said on Wednesday.

Old hands in South Korea Bitcoin market unfazed by threats of ban

SEOUL/HONG KONG (Reuters) - Threats of a potential cryptocurrency trading ban in South Korea have scared many investors away, but some veterans of the young market are defiant, saying restrictions would be relatively easy to circumvent.

Regulatory fears hammer bitcoin below $10,000, half its peak

LONDON/TOKYO (Reuters) - Bitcoin fell as much as 20 percent on Wednesday, piercing below $10,000, while other cryptocurrencies took similar spills due to investor fears that regulators could clamp down on them in an effort to curb speculation.

Crypto Rebound Continues As South Korean Officials Face Insider-Trading Charges

The rebound from yesterday's lows ahead of the Bitcoin futures expiration continues across the crypto space with Ripple soaring over 50% in the last 24 hours. South Korean headlines continue, ranging from insider-trading accusations to admissions that shutting down crypto is "realistically impossible."

Bitcoin hit $12,000 this morning...

https://www.zerohedge.com/sites/default/files/inline-images/20180118_btc3.png

Quite a rebound...

https://www.zerohedge.com/sites/default/files/inline-images/20180118_btc1_0.png

As headlines pour out of South Korea:

Insider-Trading:

South Korean official bought bitcoin and sold it right before the false claim of Justice Minister about a cryptocurrency trading ban.

Investigation ongoing. Negligence and market manipulation. The official needs to be jailed.

Hawaiians Flood Pornhub Moments After Doomsday Threat Revealed False

Following last weekend's erroneous ballistic missile alert - an accident that sent crowds of people fleeing restaurants and stores in a frenzied panic - millions of Hawaiians took to Pornhub.com to ease their tension.

In the minutes after the fraudulent missile alert was sent at 8:07 am, traffic plunged some 77% below its level from a typical Saturday.

"Based on real-time, per-minute page-views, and compared to levels on the previous two Saturdays, our statisticians found a precipitous drop in traffic at 8:07am immediately after the warning was sent out. By 8:23 am, traffic was a massive -77% below that of a typical Saturday," Pornhub said.

Hawaii on alert! https://t.co/JzqpXe5ejz pic.twitter.com/4AeOpDDaZ6

— Pornhub ARIA (@Pornhub) January 17, 2018

As the Daily Mail pointed out, the website experienced its lowest traffic from Hawaii at 8:23 am. The number of viewers started surging back at around 8:45 am, when citizens were informed that it had been a false alarm.

In the minutes after the alert was canceled, traffic from Hawaii soared. By 8:50 am, traffic had climbed nearly 50% above normal levels, as RT pointed out.

"Traffic began to return to normal and Hawaiians collectively breathed a sigh of relief," Pornhub said. "Those seeking further relief headed back to Pornh ...

Morgan Stanley Beats, Joins Peers In Plunging Trading, Debt Revenue

Morgan Stanley just became the latest bank to announce a major tax hit to Q4 earnings, while beating on both the top-line and adjusted EPS (net of tax charge), even as debt and trading revenues tumbled, offset by rising investment banking fees.

In 4Q, Morgan Stanley recorded a net discrete tax provision of $990MM, including $1.2BN provision due to tax law, primarily from remeasuring deferred tax assets (DTA), partially offset by $168MM benefit for remeasuring reserves and related interest relating to status of multi-year IRS tax examinations.

Tax charge aside, James Gorman's bank announced that in Q4 it made $9.5BN in revenue, up from $9.02BN a year ago and above the $9.24BN expected, earning $686 million, or $0.29 GAAP EPS, a number which however rose to $0.84 when adding back the $1 billion tax provision, above the consensus estimate of $0.77. Full year 2017 revenue was $37.9BN, up 10% from the previous year.

Just like Goldman, the bank reported strong Investment banking revenue, which rose to $1.55BN, up 12% from a year ago and beating estimates of $1.3BN. However, and just like Goldman again, the problem was the company's FICC, or mostly fixed-income trading, a former problem division that Morgan Stanley sharply cut two years ago in an effort to improve profitability and focus, where revenue tumbled 45%, failing for the first time in nearly two years to clear a $1 billion bar set by CEO James Gorman: FICC was only $808MM, below the $1.03BN estimate, and down from $1.5BN a year ago. By comparison, Goldman was down 50% in FICC, plunging to the lowest level since the financial crisis.

Overall trading revenue was $2.246BN, a sharp 19% lower than the $2.789 reported one year ago this time.

Unlike Goldman, however, and some of its peers, Morgan Stanley held its ground in stock-trading, where it remains Wall Street's market share leader: equities sales & trading revenue dipped to $1.92b, however above the ext. $1.89b

Trump Rebukes Kelly: "The Wall Is The Wall, It Has Never Changed Or Evolved"

In a rare rebuke to hiw Chief of Staff Gen. John Kelly, President Trump Thursday morning repudiated claims Kelly had reportedly made during a meeting with the Congressional Hispanic Caucus that the president's views on the wall had "evolved" since taking office.

The details from the closed-door meeting were reported by the Washington Post yesterday, prompting Kelly to take to Fox News to offer a few clarifications. After being quoted as describing the president's original vision for the wall as "ill-informed", Kelly explained that, after meeting with experts from the Border Patrol, the administration had decided that building a wall across the entirety of the southern border would be inadvisable.

As Kelly explained, Trump's views on the wall have "evolved", as have his views on DACA, because Trump, like any other politician, has seen his views "evolve" since the days of the campaign.

"...Even the wall. Once we briefed him and told him the real experts...came in and did a survey of the border and there are places where hydrographically or geographically a wall would not be realistic...there are other parts of the southwest border that are so wild or untamed that no traffic that goes through them.

"But there's other places we think about 800 miles additional wall, to include the 600 miles of fencing in place, would suffice. This president is very very flexible in terms of what is within the realm of the possible."

Today, Trump appears to have taken issue with Kelly's phrasing, insisting that "The Wall is the Wall, it has never changed or evolved from the first day I conceived of it." Trump added that the wall had never been meant to be built in an area where natural borders already exist.

GE, Victim of a Short-Term Mind-Set

The pressure for action and results that affects U.S. corporations is to blame for the series of poor decisions taken by General Electric's bosses in recent years.

Apple's Home Court Disadvantage

For Apple, bringing billions of overseas earnings home is one thing. Keeping it there is quite another.

A Crowded, Clustered and Potentially Very Disruptive Bet on Central Banks

Clear guidance about future policy has become a powerful tool for the world's central banks. But that may simply be at the cost of deferring market disruption for another day.

As Fannie and Freddie reform talk heats up, their regulator speaks up

The regulator of the two mortgage giants under government control weighed in with recommendations on what the future housing-finance system should look like.

Merck leaps past rivals with latest lung cancer drug results

Smoking, which causes many lung cancer cases, has made advanced lung cancer a big market for pharmaceutical companies, and the competition has been fierce.

Alnylam stock more than tripled last year — and the company says 2018 will be big

The company has a number of product launches, clinical trials and expansion plans in the works.

Earnings Summary for Today

Earnings Calendar provided by Investing.com.

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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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