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26Jan2018 Market Update: Wall Street Moves Nicely To New Historic Highs, DOW Trading At 100 Point Level, WTI Crude Trends Back Up To The 66 Handle, US Dollar And Gold Trading Sideways

Written by Gary

US stocks rose to new records today (SPY +0.6%), propelled by strong earnings from Intel and drugmaker AbbVie as well as a weaker dollar, putting the three main indexes on track for their best four-week rally since 2016.

Here is the current market situation from CNN Money

North and South American markets are broadly higher today with shares in Brazil leading the region. The Bovespa is up 1.70% while U.S.'s S&P 500 is up 0.56% and Mexico's IPC is up 0.07%.

Traders Corner - Health of the Market

What Is Moving the Markets

Here are the headlines moving the markets.

S&P, Dow hit records on upbeat Intel, AbbVie earnings

(Reuters) - U.S. stocks rose to fresh records on Friday, propelled by strong earnings from Intel and drugmaker AbbVie as well as a weaker dollar, putting the three main indexes on track for their best four-week rally since 2016.

Honeywell to repatriate $7 billion over two years

(Reuters) - U.S. industrial conglomerate Honeywell International Inc said on Friday that it expected to bring back at least $7 billion of the $10 billion in cash held overseas in the next two years, taking advantage of the newly enacted tax law.

U.S. economic growth slows in fourth quarter on surging imports

WASHINGTON (Reuters) - U.S. economic growth unexpectedly slowed in the fourth quarter as the strongest pace of consumer spending in three years resulted in a surge in imports.

U.S. wage growth, tax-bonuses spark shopping in retail stocks

NEW YORK (Reuters) - U.S. fund managers are betting that rising wages and the effects of the Republican-led corporate tax cut will prove a lifeline to middle-market retailers who have struggled to remain relevant in the age of Amazon.

As NAFTA talks drag, Mexico suggests timeline could be extended

MONTREAL (Reuters) - A senior Mexican official on Friday suggested talks to modernize the North American Free Trade Agreement could be extended to give officials more time to address major disagreements threatening to undermine the $1.2 trillion trade pact.

Exclusive: HSBC side-steps high-profile Qatar deals in Gulf gauntlet

DUBAI/LONDON (Reuters/IFR) - A boycott of Qatar by its neighbors has prompted HSBC to turn down a leading role on Doha's new dollar bond as the bank treads a political tightrope in the Gulf, four banking sources familiar with the decision told Reuters.

BNP Paribas pleads guilty in U.S. to currency rigging, fined $90 million

NEW YORK (Reuters) - A unit of BNP Paribas SA agreed to plead guilty and pay a $90 million criminal fine in the United States for conspiring to rig foreign currency markets, the U.S. Department of Justice said on Friday.

Starbucks' 2018 may not be as bitter as some fear: analysts

(Reuters) - Starbucks Corp shares fell 5 percent on Friday after the company reported weak holiday-quarter sales, indicating near-term troubles were far from over, but analysts said the brand's strength and a growing Chinese fanbase would help it ride out the rough patch.

FedEx commits $3.2 billion to raise pay, expand hubs after U.S. tax overhaul

(Reuters) - Package delivery company FedEx Corp said on Friday it will spend more than $3.2 billion on wage increases, bonuses, pension funding and capital investment, taking advantage of the U.S. tax overhaul signed into law in December.

Investor Cash Just Hit An All Time Low

While Bank of America may or may not be right in its forecast that as a result of the market meltup, buying panic and sheer euphoria to get into stocks, which just pushed the bank's proprietary "Bull and Bear" indicator to a level which on 11 out of 11 prior occasions always presaged a ~12% selloff...


... a market correction or worse is imminent, one thing that is indisputable is the funding status of the Private Clients served by BofA's Global Wealth and Investment Management (GWIM) team. What it shows is that investor cash allocation has just dropped to a record low of just 10%...

... while investor equity exposure is rising at fastest pace in 10 years.

Is Gold About To Break-Out?

Over the last five years the (negative) correlation between USDJPY and Gold has risen and risen to its highest on record - as USDJPY rises, gold sinks and vice versa...

So why did today's Kuroda-driven crash in USDJPY not spark a precious metal bid?

He's no help!

So what happens next?


"This Is 1987": Some "Haunting Math" On Today's GDP Number From David Rosenberg

When discussing today's unexpectedly weak Q4 GDP print, which came in at 2.6%, far below consensus and whisper estimates in the 3%+ range, and certainly both the Atlanta and NY Fed estimates, we pointed out the silver lining: personal spending and final sales, which surged 4.6% Q/Q (vs 2.2% in Q3), although even this number had a major caveat: "as we discussed previously, much of it was the result of a surge in credit card-funded spending while the personal savings rate dropped to levels last seen during the financial crisis."

Indeed, recall the stunning Gluskin Sheff chart we presented a month ago, which showed that 13-week annualized credit card balances in the U.S. had gone "completely vertical" in the last few months of 2017 which we said "should make for some great Christmas."

Meanwhile, even more troubling was the ongoing collapse in the US personal savings rate, which last month tumbled to the lowest lev ...

Making Sense Of The Mnuchin-Trump Currency War Confusion

The Dollar is tumbling once again today, erasing President Trump's rescue bid yesterday, and pushing FX volatility up to its highest in 4 months.

Here's why...

Trying to make sense of the Mnuchin-Trump confusion, DB's FX Strategist Alan Ruskin believes that what you have here is two officials who like a weak(er) USD in the short-term that will help the US trade accounts and support growth, albeit to the point where strong growth will eventually support a strong USD longer-term.

In Alan's view this is a way of saying that in the short-term a weak USD is good for US trade, and in the long-term a strong USD is good because it is indicative of strong growth a healthy economy.

Alan highlights that this is clearly a very confusing message to convey and it's unlikely to either be reported or understood correctly, which doesn't really help the message.

Notably, as we saw yesterday (with stocks slammed as Trump jawboned the dollar higher), BofA is also warning that a reversal of the dollar's recent weakness could also spark a sharp correction in stocks.

A Huge Bet That Movie Theaters Aren't Going the Way of the Dodo

The takeover of Regal Entertainment by a much smaller European cinema chain is turning into a financial thriller. Working title: "The Big Long."

Colgate's Checkup Doesn't Go Well

A disappointing fourth quarter at Colgate-Palmolive shows the company isn't immune to the weak pricing and intense competition that has dogged rivals like Procter & Gamble.

Here's Where There Could Still Be Value in Global Stocks

Stocks are expensive, but global factories are suddenly running very hot. Investors still looking for an entry point might want to take a look at the big beneficiaries.

Durable Goods New Orders Improve in December 2017

Written by Steven Hansen

The headlines say the durable goods new orders and backlog improved. The unadjusted three month rolling average improved.


Advance Estimate 4Q2017 GDP Quarter-over-Quarter Growth at 2.6 Percent.

Written by Steven Hansen

The advance estimate of fourth quarter 2017 Real Gross Domestic Product (GDP) is a positive 2.6 %. This growth is marginally worse than the previous quarter's 3.2 % if one looks at quarter-over-quarter headline growth.Year-over-year growth improved modestly so one could say economic growth was better.

Grow: From Buffett to Beyoncé: 7 low-wage worker success stories

How they went from minimum wage to millions.

Earnings Outlook: Microsoft earnings: Turning AI-backed cloud computing into more cash

Microsoft Corp. hit a $600 billion valuation in October for the first time since 2000, and crossed the $700 billion market cap threshold in January, as investors continued to bank growth off the massive, global shift to cloud computing. Now, Microsoft will have to prove its cloud growth is worth that much.

The Ratings Game: Intel stock soars to highest prices since dot-com bust as analysts cheer cloud opportunity

Intel's stock is on track to post its largest single-day gain in almost nine years following a strong earnings report and a wave of analyst target hikes.

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