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01Feb2018 Market Update: Wall Street Can't Seem To Stay Down, DOW Up Triple Digits, Bitcoin Drops Below Key $9,000 Level On Coinbase, US Dollar Trends Down

Written by Gary

The US equities main benchmarks are trading in the green after starting today's session deep in the red (SPY +0.3%). The DOW rebound sharply from lows as Facebook hits all-time high.

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 1.09% while Mexico's IPC is up 0.90% and U.S.'s S&P 500 is up 0.29%.

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.

Bitcoin slides as Facebook ad ban, India clampdown unnerve investors

LONDON (Reuters) - Bitcoin, the world's largest cryptocurrency, skidded 11 percent on Thursday to its lowest since November, as a Facebook ban on cryptocurrency adverts and a growing regulatory backlash against the nascent market frightened investors.

Wall Street slips on hawkish Fed, tepid earnings

(Reuters) - U.S. stocks were lower in late morning trading on Thursday, following a string of lackluster earnings and after the Federal Reserve raised its inflation outlook for the year.

Wells Fargo loses big client after dialing up risk in retirement funds

BOSTON (Reuters) - After Wells Fargo & Co decided to ramp up risk in its flagship age-based retirement funds last year, one of its largest customers decided to call it quits, unhappy with the new investment strategy and how the bank handled the transition.

U.S. factory activity slows; labor market tightening

WASHINGTON (Reuters) - U.S. factory activity slowed in January amid a fall in new orders, but an unexpected drop in the number of Americans filing for unemployment benefits last week pointed to sustained labor market strength that should underpin domestic demand.

In Aramco IPO, China talks crucial for choice of listing venue: sources

LONDON/DUBAI (Reuters) - Saudi Arabia wants to complete talks with strategic investors such as China, Japan and South Korea before deciding where to list shares in state oil company Saudi Aramco, three sources familiar with the discussions said.

Exclusive: Etihad scrambles to shore up $1.2 billion bonds before coupon crunch - sources

DUBAI (Reuters) - Etihad Airways is urgently examining ways to avert a technical default of some $1.2 billion in bonds indirectly linked to the Gulf airline, sources close to the situation told Reuters.

Lowe's to pay U.S. staff $1,000 bonus following tax reform

(Reuters) - Lowe's Cos Inc on Thursday said it would pay a one-time bonus of $1,000 for over 260,000 hourly U.S employees, as the home improvement chain takes advantage of changes in the U.S. tax code.

CBS board meets, set to discuss Viacom merger: sources

(Reuters) - CBS Corp's board is set to discuss a merger with Viacom Inc on Thursday, sources have told Reuters, possibly starting the process of reuniting the two media companies split by mogul Sumner Redstone more than a decade ago.

Trucks, SUVs shine in U.S. January sales; cars not so much

DETROIT (Reuters) - Major automakers posted mixed U.S. new vehicle sales figures for January, as American consumers showed little sign of halting their shift away from passenger cars in favor of the larger, more comfortable, pickup trucks, SUVs and crossover models that manufacturers also love because they are far more profitable.

Introducing "The 3R": Why Goldman Thinks Oil Is Going To $82

It may not be Goldman's historic(ally wrong) "oil to $200 super-spike" call from the spring of 2008 which has so far top-ticked the highest price of crude in history, but in the grand scheme of things, Goldman's call from this morning was not that much different when the world's central banker incubator boosted its price forecast by a third and said global crude markets have probably rebalanced.

So now that the rebalancing narrative is over, Goldman needed a new, catchy narrative, ideally packaged in a handy mnemonic, ala "BRICs." It got just that in the form of, drumroll.... "The 3Rs", or "reflation, releveraging and reconvergence" which letters supposedly "reinforce our bullish overweight commodity outlook."

And not just bullish: "the most bullish in a decade on the 3Rs"

Here is the 30,000 foot summary behind Goldman's rediscovered commodity euphoRRRia, which the bank frames as follows: "The 3R's unlikely to repeat 2008, but will likely rhyme in 2018."

Strong demand growth against limited supply growth due to OPEC and Chinese supply curtailments created significant reflation in commodity prices last year. During 2H17, commodities were the best performing asset class, posting a solid 18% return. Given the high level of debt held by commodity producers, not only do higher commodity prices reduce the number of bad loans and free up capaci ...

"5 Things I Learned From Davos 2018"

Authored by Huw van Steenis via,

The mood at Davos was the most upbeat for over a decade. Synchronous global growth, surging markets, ultra loose monetary policy and some pro-business policies are unleashing animal spirits. In fact, so good was the sentiment some were giddy it may be getting too good.

Whilst Trump, Macron, Modi naturally captured the headlines, it was the nature of the big transitions - the implications of AI, Blockchain, Big Tech power, quantitative tightening, rise of impact investing and the populist revolt against globalisation -which dominated business and investor debates

1 The End of Easy Money?

Central banking is meant to becoming boring - and yet for many investors and financiers, how central banks may tighten financial conditions always came up. As most investors are bullish on public and private equity, they wanted to explore whether there could be a sharper repricing of the expectations on rates. Will $7.3trillions of bonds with negative yields get repriced smoothly? And if the positive correlation that asset prices have had with central bank expansion on the way up, may play outa on the way down as central banks start to reel in their $15trillion expansion. The debate pivoted on 3 issues:

Most chemical reactions can be hastened with an accelerant -and there was much discussion about two possible accelerants: US fiscal policy and the financial channel. The potentia ...

Bridgewater Unveils Its Biggest Short In Years

Last October, the financial world was caught by surprise when it emerged that Ray Dalio's Bridgewater, traditionally bullish, had amassed a sizable $713 million short against Italian financial stocks, its biggest disclosed bearish bet in Europe.

In addition to shorting five banks and one insurer, public filings disclosed that the $160 billion hedge fund was also betting on a decline in the stock price of Milan-based Prysmian SpA, the world's largest cable maker, as well as shorting Italian mega banks Intesa Sanpaolo and UniCredit as well as insurer Assicurazioni Generali, all names very familiar to anyone who covered the endless European crisis from 2010 until the launch of QE by the ECB, and which were constantly on the verge of collapse.

Fast forward to today when just one month before Italy's elections - which the broader market stubbornly refuses to acknowledge are a risk factor - Bridgewater has tripled down on its bearish bets against Italian banks and insurers, making the position the largest short carried by the world's biggest hedge fund in years, if not ever.

According to

Trump Has Read Nunes Memo, Will Sign Off And Send To Congress By Tomorrow


As Reuters adds, the White House was working on Thursday to clear the release of a secret Republican memo. As White House legal and national security experts reviewed the document, the Senate's No. 3 Republican, John Thune, urged his House of Representatives colleagues to allow the Senate Intelligence Committee to review the document and to heed the FBI's concerns before they made it public.

The administration official told Reuters earlier the memo was likely to be released on Thursday. The timing, however, remained in flux.

Nunes has dismissed the objections to the memo's release as "spurious."

Thune, attending a political retreat in West Virginia with other lawmakers in Trump's party, urged fellow Republicans to slow down regarding the memo's release.

"I think the Senate Intelligence Committee needs to see it, for sure," Thune said. "They need to pay careful attention to what our folks who protect us have to say about what this, you know, how this bears on our national security."

Thune also said he believed that a counterpoint memo written by Democrats on the House Intelligence Committee should be made public if the Republican document is released.

* * *

Update 1120ET: Minutes after Pelosi's tantrum, Bloomberg reports that The White House plans to sign off on the memo's release today and send it back to Congress with a declaration that is has been declassified. The committee would then release the memo.

The release is likely to come Friday morning, Fox News is told.

No Bill Yet for Facebook's Fixes

The social network's changes slow user growth but financials stay strong.

5G Coming Sooner, But Who Will Reap Benefits?

Silicon Valley companies have reaped most of the benefits of the smartphone revolution, leaving network builders and operators running to stand still. It seems unfair, but the 5G era might not be any different.

How Alibaba Built Its Way to Record Sales

China's e-commerce giant Alibaba delivered another record quarter, though investors should worry about how it got there.

December 2017 Headline Construction Spending Growth Improves?

Written by Steven Hansen

The headlines say construction spending was up and within expectations. Our view is that this does not consider inflation, or the fact that the previous month's data was revised down.

January 2018 Manufacturing Survey Growth Remains In Expansion

Written by Steven Hansen

The ISM Manufacturing survey insignificantly declined but remained in expansion. The key internals are in expansion. The Markit PMI manufacturing Index is in positive territory and insignificantly improved.

Deep Dive: This stock might be your best bargain investment in China's growth

Decline in Ctrip shares sets up a long-term opportunity, says Di Zhou of the Thornburg International Value Fund.

Eating this can help the elderly fight chronic illness

Twice as many older people will suffer four or more chronic diseases, but there are nonmedicinal ways to help them.

Market Snapshot: Dow rallies by 150 points, scores Boeing-fueled lift as stock market pivots higher

The Dow Jones Industrial Average takes a firm leg higher Thursday afternoon on the back of gains in Boeing Co., as the broader stock market follows financials and technology shares up.

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