22Aug2017 Market Update: Wall Street Is Trading Higher Led By A Jump In Technology And Materials Companies, DOW Up Triple Digits, WTI Crude Volatile In The Mid 47 Handle

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 2.18% while U.S.’s S&P 500 is up 0.82% and Mexico’s IPC is up 0.30%.

Wall Street rises, led by tech and materials stocks

(Reuters) – U.S. stocks were higher in late morning trading on Tuesday, with the three major indexes poised for their best one-day percentage gains in more than a week, led by a bounce in technology and materials companies.

Coca-Cola, PespiCo and others agree to cap sugar in drinks in Singapore

SINGAPORE (Reuters) – Seven major drinks companies including Coca-Cola and PepsiCo will limit the sugar content of drinks they sell in Singapore, as part of the city-state’s campaign to fight diabetes.

Hyundai will launch pickup, more SUVs to reverse U.S. sales slide

DETROIT/SEOUL (Reuters) – Hyundai Motor plans to launch a pickup truck in the United States as part of a broader plan to catch up with a shift away from sedans in one of the Korean automaker’s most important markets, a senior company executive told Reuters.

Great Wall says watching Fiat Chrysler; no talks yet

HONG KONG/SHANGHAI (Reuters) – Chinese automaker Great Wall Motor Co Ltd reiterated its interest in Fiat Chrysler Automobiles NV on Tuesday, but said it had not held talks or signed a deal with executives at the Italian-American automaker.

Threat of price war clouds horizon for Maersk shipping business

COPENHAGEN (Reuters) – A.P. Moller-Maersk has been fortified by the $7.5 billion sale of its oil and gas business to France’s Total, but the company’s main sea freight business faces the threat of a new price war in a consolidating industry.

Brazil to sell Eletrobras control in boldest privatization yet

SAO PAULO/BRASILIA (Reuters) – Brazil on Monday floated a proposal to cede control of the country’s biggest power utility, Eletrobras, in the boldest privatization yet by a government struggling to close a record budget deficit, sending Eletrobras’ shares soaring in after-market trading.

EU starts in-depth probe of Bayer, Monsanto deal

BRUSSELS/FRANKFURT (Reuters) – The European Commission has started an in-depth investigation of Bayer’s planned $66 billion takeover of U.S. seeds group Monsanto, saying it was worried about competition in various pesticide and seeds markets.

South Korea, U.S. fail to reach agreement on possible revision to FTA deal

SEOUL (Reuters) – South Korean and U.S. officials failed to agree on Tuesday on how to move forward on discussions over their five-year-old free trade agreement that Washington is seeking to change to help cut its trade deficit with Asia’s fourth-largest economy.

U.S. trade panel begins patent probe against Caterpillar

WASHINGTON (Reuters) – The U.S. International Trade Commission said on Tuesday it would begin a patent infringement probe of road milling equipment by Caterpiller and several subsidiaries after a complaint by Wirtgen America, the U.S. subsidiary of a German firm.

Trader Warns Jackson Hole’s “Hesitantly Optimistic” Chatter Will Be “Nothing But Buying Time”

Hawkish, dovish, hawkish, dovish? As many market participants suspect, this week’s Jackson Hole ‘retreat’ wil be a nothing-burger with perhaps a side-dish of temporary volatility as machines quibble over various words in headlines. Former fund manager Richard Breslow warns not to expect much…

Via Bloomberg,

Expect to Hear Jackson Hole Is Great in August

At some level, I hope I’m wrong. This week would end up being far more interesting if we do indeed get some juicy policy announcement out of one, or, why not be greedy, two, of the big kahunas headlining Jackson Hole. But it’s unlikely and markets may well end up having to figure out what they want to do between now and autumn on their own.

As much as these folks love to talk, they probably have little intention of communicating.

What do we know?

The Fed doesn’t pre-commit. But has essentially done so on a taper announcement and commencement in the fall. Their best laid plans call for as benign a start to this process as possible. Whether Chair Yellen mentions it again is largely irrelevant. They want to do it and think they can. And they won’t if something untoward happens.

If her base case is transitory inflation and one more hike this year, this is neutral not …

Phoenix Police And FBI On “High Alert” Ahead Of Trump Rally Tonight

There is no shortage of controversies surrounding Trump’s appearance tonight in Phoenix that could turn what is supposed to be a peaceful political rally into complete chaos. With Trump’s reaction to the Charlottesville tragedy still fresh in the minds of political activists on the left, there are expected to be as many protesters outside the Phoenix Convention Center as there are inside watching the President’s speech. Sprinkle on top of that the fact that Trump could comment on a potential pardon of Sheriff Joe Arpaio and/or blast Arizona Senators John McCain and Jeff Flake and you have all the ingredients of another national disaster in the making.

As The Hill points out, the Phoenix Police Department has planned for “maximum staffing” during Trump’s visit and the FBI and DHS are also coordinating on the event.

Political leaders and law enforcement officials in Arizona are on high alert ahead of President Trump’s campaign rally Tuesday night in Phoenix.

The big question is whether there will be more supporters of Trump inside the Phoenix Convention Center, which holds 29,000, or protestors outside.

Phoenix Police Chief Jeri Williams said in a statement that her force will have “maximum staffing during the visit.”

The department is “working 24/7 with our partners to ensure all of our resources are in place,” Williams said.

Stanton said the city is committed to keeping everyone inside and outside the arena safe.

“The Phoenix police is always professional and the FBI and Department of Homeland Security have been great about coordinating with local law enforcement,”

More Peak Shale: World’s Largest Miner Is Selling Its Shale Assets

Over the past several months, we have wondered if despite new all time high shale production, whether the US shale sector in the has peaked. Some of our recent thoughts can be found in the following articles:

Why Some Hedge Funds Believe The Shale Boom Is Coming To An End (Again)

Shale Efficiency Has Peaked For Now As Rig Count Surges For 22nd Straight Week

Is The Second Shale Boom Grinding To A Halt?

Has Permian Productivity Peaked?

Peak Shale: Anadarko Just Became The First US Oil Producer To Slash CapEx

The “peak shale” narrative got a boost in late July when one of the world’s most bearish hedge funds, Horseman Global, announced it was aggressively shorting shale companies on the thesis that funding is about to “run dry”, resulting in a sharp drop in production and with the lack of capex, would lead to another round of industry defaults (while sending the price of oil higher).

More evidence was revealed in the latest Baker Hughes data, which showed that both active Horizontal and Permian oil rigs had finally peaked and were now declining, while the number of oil rigs funded by Public junk bond deals had plateaued, suggesting little interest in future funding:

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A 3% Drop Is All It Takes…

A 2.8% drop in stocks is all it takes…

…to convert sheer near full euphoria into outright panic…

Source: CNNMoney

Quite a collapse in confidence for a ‘blip’ in stocks… (NOTE – this collapse in sentiment is bigger and faster than the plunge in Aug 2015 following China’s devaluation and the US flash crash)

At the same time, the ‘plunge’ in stocks has hammered BofAML’s Global Panic-Euphoria index out of ‘Euphoria’…

On a global basis, put-call ratios signal less euphoria than a month ago, and volatility has risen, taking Global Risk-love indicator from a protracted period in euphoria to barely inside the neutral zone.

With most of CNN’s Fear & Greed factors sudde …

The Price Isn’t Right for Home Builders

Shares of home builders look pricey and vulnerable to a correction as costs rise and affordability is strained.

Chip Gear Makers Perfect the Earnings Machine

Makers of semiconductor manufacturing equipment are more profitable than ever, which poses an interesting dilemma for investors accustomed to buying low and selling high.

Why the ECB Can’t Catch a Break on the Euro

At the start of July, both German bond yields and the euro were moving higher. But in August they have diverged, with bond yields off the boil but the euro maintaining its poise. The answer to the conundrum may lie outside the eurozone.

Rex Nutting: Retailers aren’t hurting because people are buying ‘experiences’ instead of stuff

We are spending a smaller portion of our budget at the mall, but the money we’re saving is mostly paying for the most expensive health care in the universe. says Rex Nutting.

The Margin: Treasury secretary wife Louise Linton wants you to know her life is better than yours

Somebody like this probably already takes up way too much space in your social-media feeds. She flashes only the finest bling, wouldn’t be caught dead in anything short of couture, travels in style to the most exotic locales, and, most important, wants you to know all about how fabulous it all is.

Europe Markets: European stocks snap 3-day losing run as miners jump on ‘Turnaround Tuesday’

European stocks push higher Tuesday, with investor optimism returning ahead of the closely watched gathering of central bankers in Jackson Hole, Wyo., later this week.