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18Jan2018 Market Update: Wall Street's Main Indexes Edge Lower, DOW Still Above Landmark 26 K, Energy Sectors Slip, Crude Oil Inventories Slip 7 Million Barrels

Written by Gary

US equities markets decline in healthcare and energy stocks paused a rally that had driven the Dow Jones index to its fastest ever 1,000 point gain (SPY -0.1%).

Here is the current market situation from CNN Money

North and South American markets are mixed. The IPC is higher by 0.13%, while the Bovespa is leading the S&P 500 lower. They are down 0.44% and 0.12% respectively.

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.

U.S. housing starts fall; jobless claims hit 45-year low

WASHINGTON (Reuters) - U.S. homebuilding fell more than expected in December, recording its biggest drop in just over a year, amid a steep decline in the construction of single-family housing units following two months of hefty gains.

Wall Street slips from record as healthcare, energy drag

(Reuters) - Wall Street's main indexes edged lower on Thursday as declines in healthcare and energy stocks paused a rally that had driven the Dow Jones index to its fastest ever 1,000 point gain.

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.

Apple's U.S. tax payment does not change EU's Irish tax ruling

BRUSSELS (Reuters) - Apple's announcement that it will pay $38 billion in U.S. tax on its overseas cash will not reduce the $16 billion tax bill the company owes Ireland following a European Union ruling, the EU's executive said on Thursday.

Exclusive: Blackstone's Hill hands hedge fund reins to McCormick

BOSTON (Reuters) - After nearly two decades of growing Blackstone Group into the world's biggest hedge fund investor with some $74 billion in assets, J. Tomilson Hill is passing the baton.

Morgan Stanley tops estimates on underwriting, wealth management

(Reuters) - Morgan Stanley's adjusted quarterly profit topped Wall Street estimates on Thursday as strength in underwriting and wealth management offset a sharp but expected decline in bond trading revenue.

EU antitrust regulators clear Qualcomm purchase of NXP

BRUSSELS (Reuters) - EU antitrust regulators have approved U.S. smartphone chipmaker Qualcomm's planned $38 billion acquisition of NXP Semiconductors subject to a series of commitments Qualcomm has made.

Nigeria sues JP Morgan for $875 mln over Malabu oilfield deal

LONDON (Reuters) - Nigeria has filed a claim against JP Morgan Chase for more than $875 million, accusing it of negligence in transferring funds from a disputed 2011 oilfield deal to a company controlled by the country's former oil minister.

WhatsApp inches closer to revenue plan with accounts for businesses

SAN FRANCISCO (Reuters) - Messaging application WhatsApp said on Thursday that it would begin allowing business accounts for the first time, a step that brings the free service closer to a plan that would make money for its corporate parent, Facebook Inc .

How The Media Made ISIS Into Something Bigger Than What It Was

Submitted by Elijah Magnier, Middle East based chief international war correspondent for Al Rai Media

Terrorism and counter-terrorism experts and analysts, even the genuine ones (plus the hundreds of others who mushroomed during the last years of the war in Syria), rushed to explain "Islamic State's" (ISIS) power and ability to expand. This biased its beginning, disregarded its real defeat, and - most importantly - downplayed the major role played by Washington. The US supported the proliferation of this terrorist group in the past and continues to do so in the present.

Myth, Reality, and Opportunism

Those terror analysts live off the promotion of ISIS's capability, celebrating its possible "rebirth", and advertising its "expansion". They recall the 2009-2011 period in Iraq when the group was reduced to few hundred militants only, and how ISIS managed to occupy large territories in Iraq and Syria few years later. This is exactly where this article will start, and argue that ISIS was merely a capable opportunistic group, not a strong group: it benefitted from many elements and opportunities but was much weaker than the world believed. Hence ISIS's fall was quick and miserable, revealing the reality behind the group's apparent power.

It all began with Afghanistan in 1979 when Russia invaded the country and the US thought it could defeat Moscow without considering that it needed a strategy that could not backfire against the world (and itself) later. The US Ambassador to Saudi Arabia, Hume Alexander Horan, confirmed that the "US and Saudi Arabia financed, trained and equipped Mujahedeen in ...

Trader Fears Dollar's Drop "Represents A Crisis Of Confidence About The Country"

The dollar index broke down to its weakest level since Dec 2014 yesterday. Despite Fed rate hikes and hawkish forward guidance, every bounce is sold as former fund manager Richard Breslow warns, for get all that, "This looks like the far more worrisome and potentially long-lasting effects of global reserves being consciously built up and allocated in a more widespread fashion."

Via Bloomberg,

As a gross generalization, I think it's fair to say that I tend to put a dollar positive spin on things.

Which is kind of odd, since I'm sure I have made more money over the years being short rather than long.

With the absolute exception of that great fun for dealers, not so much for anyone else, episode of the Asian financial crisis. My ...

If Interest Rates Spike, Here's Who Will Be Hurt The Most

Interest rates are finally rising, and as we observed this morning, the 10Y - now above 2.60% and the highest since last March...


... is now on the cusp of breaking above the 2.63% level which Jeff Gundlach said last week is where stocks will be negatively impacted.

And while the financial sector is poised to benefit from this increase, although not if the curve flattens and eventually inverts, something which would unleash havoc among the banks, there are many parts of the US economy that will be unequivocally and negatively impacted from the rise in interest rates. Among them are housing, business investment and, of course, consumer spending: with credit card already at record highs, increase in the APR will crush America's purchasing power.

But which one will be hurt the most? That's the question Goldman's economist team set to answer when it asked overnight "which sector is likely to experience the largest drag from higher rates." Goldman then analyzed the Fed's FRB/US model as well the slowdown in housing activity following the rate spikes in mid-2013 and late-2016, and find that "housing activity is several times more rate-sensitive than business investmen ...

Stocks, USDJPY Tumble After McConnell Reportedly "Planning For Govt Shutdown"

Update: After President Trump earlier criticized the stopgap spending bill, saying provisions to extend CHIP should only be included in a long-term plan, a White House aide told Bloomberg that the president does, in fact, support the stopgap spending measure which is coming for a vote in the House tonight.

The clarification follows a warning from Senate Democratic leader Chuck Schumer, who warned that the chances of the House plan clearing in the senate "don't look good." Specifically, Schumer cited a lack of funding for the opioid crisis as one reason it likely won't pass - but of course the biggest obstacle is the impasse on a plan to enshrine the DACA protections for 690,000 undocumented immigrants who were brought to the US as minors into law.

News of Trump's support helped mitigate a drop in the dollar and US stocks, which are becoming increasingly sensitive to the notion that there's a strong chance of a shut down this weekend.


* * *

While it has been clear that the government shutdown deadline is looming, stocks haven't cared.. until now. Politco reports that Senate majority leader Mitch McConnell is making contingency plans for the growing possibility of a government shutdown.

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.

January 2018 Philly Fed Manufacturing Survey Weaker

Written by Steven Hansen

The Philly Fed Business Outlook Survey declined but remains in expansion. Key elements significantly declined.

What poker sharks have in common with Wall Street traders

A top pro poker player has joined the world's largest hedge fund.

MarketWatch First Take: Amazon releases its HQ2 shortlist, and this is what we've learned from it

Amazon has already won with its HQ2 process, and big bucks, big airports and big universities are swaying the company's decision.

Don't be fooled: Stock picking is still a loser's game

The expensive myth of active management.

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