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30Jan2018 Market Update: Wall Street Sinks On Interest Rate Jitters, DOW Down 400 Points As Bears Take Control, Exxon Mobil Plans To Triple Production In The Hottest US Shale Oil Field By 2025

Written by Gary

US equities markets slide precipitously as rising bond yields and a sell-off in healthcare shares spook investors (SPY -1.1%). DOW's triple digit tumble is steepest in eight months.


Here is the current market situation from CNN Money

Traders Corner - Health of the Market

What Is Moving the Markets

Here are the headlines moving the markets.

Amazon, Berkshire, JPMorgan create healthcare company to cut costs

(Reuters) - Amazon.com Inc, Berkshire Hathaway and JPMorgan Chase & Co will form a healthcare company aimed at cutting costs for their U.S. employees, they said on Tuesday, sending shares in the broad healthcare sector sharply lower.

Wall St. succumbs to rising bond yields, sinking health stocks

(Reuters) - Rising bond yields and a sell-off in healthcare shares sent the U.S. stock market sliding on Tuesday, with the Dow Jones Industrial Average's 352-point tumble its steepest in eight months.

Amid angst over iPhone X, Wall Street braces for weak forecast from Apple

SAN FRANCISCO (Reuters) - When Apple Inc announces its first-quarter earnings on Thursday, investors will seek signs of whether the company's $999 iPhone X launched last autumn was a Steve Jobs-style hit or, as more analysts suspect, a letdown.

Pfizer sees upbeat 2018 on lower tax rate, shares dip after highs

(Reuters) - Pfizer Inc forecast 2018 profit and revenue well ahead of analysts' estimates on Tuesday as it expects to benefit from reduced tax rate following the recent changes to the U.S. tax code, and recorded an $11 billion gain from the overhaul.

Exclusive: Coincheck hackers start moving stolen cryptocurrency - executive

LONDON (Reuters) - Hackers behind last week's $530 million cryptocurrency heist -- one of the biggest ever -- have started to move and are trying to sell some of the stolen "XEM" coins, the vice president of the foundation behind the digital currency said on Tuesday.

Reuters News to get $325 million annually under Blackstone offer: sources

LONDON (Reuters) - Blackstone Group LP has agreed that annual payments of $325 million would be made for 30 years to the Reuters News business as part of an offer by the U.S. private equity firm to buy a majority stake in Thomson Reuters' Financial and Risk unit, two sources familiar with the matter said on Tuesday.

World markets can absorb some trade turbulence as Trump digs in

LONDON/GENEVA (Reuters) - Booming global trade and economic growth have cushioned world markets against the political turbulence of Donald Trump's first year in the White House, but that resilience will be tested if the U.S. president wants protectionism to define 2018.

U.S. washer tariffs put Samsung, LG supply chains through the wringer

SEOUL (Reuters) - When South Korea's Samsung Electronics and LG Electronics last year announced plans to build home appliance factories in the United States, they hoped to sidestep any fallout from President Donald Trump's "America First" manufacturing and jobs mantra.

Walmart to share inventory data with suppliers in battle with Amazon

NEW YORK (Reuters) - Wal-Mart Stores Inc said on Tuesday the company will share more data with suppliers to move faster in replenishing out-of-stock items as it tries to better compete with rivals like Amazon.com Inc

Bitcoin Battered Below $10k After Bitfinex, Tether Subpoena'd

Update 1255ET: Bloomberg reports that U.S. regulators are scrutinizing one of the world's largest cryptocurrency exchanges as questions mount over a digital token linked to its backers. This follows reports of the company severing its relationship with its auditor.

As Bloomberg details, the U.S. Commodity Futures Trading Commission sent subpoenas last week to virtual-currency venue Bitfinex and Tether, a company that issues a widely traded coin and claims it's pegged to the dollar, according to a person familiar with the matter, who asked not to be identified discussing private information.

The firms share the same chief executive officer.

"We routinely receive legal process from law enforcement agents and regulators conducting investigations," Bitfinex and Tether said Tuesday in an emailed statement. "It is our policy not to comment on any such requests."

The reaction in cryptos was modest but lower as Bitcoin tumbled below $10k once again...

Could Bitfinex, the world's largest, Hong-Kong based cryptocurrency exchange, be headed for a Mt. Gox-style collapse? It's starting to look that way.

As we detailed here, when Mt. Gox first halted customer withdrawals in February 2014, it waited more than two ...

Rising Social Disorder Is Inevitable: Here's Why

Authored by Charles Hugh Smith via OfTwoMinds blog,

We can do better, and if we don't, the only possible output of such an unequal system is increasing social disorder.

We are in a very peculiar point in history. On the one hand, we're reassured that all is well because Every One of the World's Big Economies Is Now Growing. (NY Times)

Yet at the same time, we read that "Something Is Very Wrong With The Global Economy": Richest 1% Made 82% Of Global Wealth In 2017 and are asked, Can the World Survive a Winner-Take-All Global Economy?

Even the authors of the rah-rah NY Times piece on the wonderfulness of the global economy expressed concern that this "growth" may not be distributed any more equally than the previous 10 years of "recovery."

We already know absolutely nothing will change because neither the inputs nor the feedback loops in the economy have changed. As Donella Meadows explained in her seminal paper

Nomura: "What Was That?"

Submitted by Charlie McElligott, managing director in cross-asset strategy at Nomura

Today's talking-point is the buy-side head-scratching on widespread 'minor but curious' performance wobbles experienced yesterday, as numerous consensual trades (largely concentraded in equities though) reversed course and disrupted the placid 'momentum' / 'carry' market of the past month +(basically everywhere but credit markets, where despite paper and duration risk, stuff traded 'just fine'). Here are my thoughts:

WHAT WAS THAT?: Many have asked if there was an obvious impetus behind yesterday's 'wonky' moves in everything from equities themes to crowded momentum and macro trades. Four thoughts--two macro, one market structure, one positioning-related:



Perhaps it was the 'gap down' in rates (Sunday overnight) ahead of US trader arrival Monday morning, as the new incremental sellers of USTs from the MBS space (convexity) hedging and its concurrent options dealer (short gamma) hedging spooked the market again with yields to multi-year highs. Concern that the 'too much rate vol' transitions the environment from the 'slow-and-steady' repricing growth and inflation 'goldilocks' state, to instead, one where suddenly folks are worrying about "financial conditions tightening faster than we're growing," which has been a phrase I've been using since early last year to characterize 'smart' macro views on the "when the rates move is too much" concerns.

Perhaps, too, from a 'butterfly flapping its wings' perspective, is what I mentioned in yesterday morning's 'Nomura Cross-Asset' note: the US Dollar as a 'pain trade reversal risk,' after seeing only modest squeeze on the day, yet clearly having an outsized impact on numerous popular trades on the 'other side.'

Jim Rickards: Why This Bond Bull Market Still Has Legs

Authored by James Rickards via The Daily Reckoning,

I started in the Treasury bond business in 1985 after a 10-year career in commercial banking. I retired as a senior officer of Citibank that year at a relatively young age and made the move to Wall Street.

My firm was Greenwich Capital Markets, one of a select group of "primary dealers" allowed to transact directly with the Federal Reserve. Monetary policy is conducted through open-market operations run by a trading desk at the Federal Reserve Bank of New York.

Being a primary dealer just means you have passed rigorous screening by the New York Fed in terms of credit, capital, operations, management and other criteria.

Importantly, as a primary dealer you have to make a continuous two-way market in all maturities of U.S. Treasury and government-backed mortgage securities across the yield curve. You are expected to buy when others are selling and to sell when others want to buy.

That market-maker role is how the Fed insures liquidity in the Treasury market and is the price a firm must pay for the privilege of being named a primary dealer.

Greenwich Capital was small but mighty. We did not have the capital size of other primary dealers like Goldman Sachs or Morgan Stanley, but we did have a reputation as having some of the smartest sales and trading staff around. We punched above our weight as a market maker.

As the firm grew, we were frequently ranked in the top five and sometimes No. ...

The Good News in Bond Market Wake-Up Call

The recent move in may make some investors nervous, but looks more like a belated recognition that the global economy is in a better place.

Amazon, Berkshire, JPMorgan Partner to Pare Health Costs

Amazon.com, Berkshire Hathaway and JPMorgan are forming a company to figure out how to reduce health-care costs for their hundreds of thousands of U.S. employees.

Why It Isn't Yet Time to Worry About Emerging-Market Bonds

Despite yields on benchmark 10-year U.S. Treasurys ticking higher, edging above 2.70% this week, the reaction in emerging-market bonds has been muted.

Case-Shiller 20 City Home Price Index November 2017 Now at 6.4 % Year-over-Year Growth

Written by Steven Hansen

The non-seasonally adjusted Case-Shiller home price index (20 cities) year-over-year rate of home price growth grew from a downwardly revised 6.3 % to 6.4 %. The index authors stated "Given slow population and income growth since the financial crisis, demand is not the primary factor in rising home prices."

Chesapeake Energy cuts 13% of workforce, mostly at Oklahoma City headquarters

Shares of Chesapeake Energy Corp. sank Tuesday, after the natural gas and oil exploration company laid off 13% of its workforce, primarily at its Oklahoma City campus.

Tax overhaul will have a limited effect on U.S. economy, Moody's says

The U.S. tax bill signed into law in December will have a limited effect on the U.S. economy, as companies are unlikely to spend the money saved on growth initiatives and the tax cut for the wealthy will not trickle down.

The Sniff Test: Here's what we actually know about the Amazon, Berkshire and J.P. Morgan health initiative (hint: very little)

The Tuesday announcement was short on details but sent a wide range of industry stocks shuddering in morning trade.

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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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