14May2018 Midday Update: Wall Street Trades Moderately Higher, WTI Crude Trading In The 71 Handle, Brent Prices Expected To Go Higher

Here is the current market situation from CNN Money

North and South American markets are mixed today. The Bovespa is up 0.48% while the S&P 500 gains 0.22%. The IPC is off 0.24%.

Trump’s pledge to help China’s ZTE spurs backlash in Washington

WASHINGTON (Reuters) – President Donald Trump’s pledge to help a Chinese telecommunication company that broke U.S. sanctions law sparked a backlash from lawmakers who said the move could weaken the U.S. hand in upcoming trade talks with Beijing.

Tesla planning ‘thorough reorganization,’ CEO Musk says in email

(Reuters) – Tesla Inc’s

Wall Street climbs on easing U.S.-China trade tensions

(Reuters) – U.S. stocks notched up gains on Monday on signs of easing trade tensions between the United States and China after President Donald Trump softened his stance on Chinese technology company ZTE Corp.

NAFTA math may not add up to more U.S. auto jobs

DETROIT (Reuters) – Trump administration demands in NAFTA trade negotiations meant to push auto jobs back to the United States may not be enough to spark a shift in where automakers build cars and trucks.

CBS sues controlling shareholder Redstone to stop Viacom merger plan

(Reuters) – CBS Corp on Monday filed a lawsuit to stop controlling shareholder Shari Redstone continuing with her plan to merge it with Viacom Inc , saying such a deal would harm its shareholders.

Facebook suspends 200 apps over data misuse investigation

(Reuters) – Facebook Inc has so far suspended around 200 apps in the first stage of its review into apps that had access to large quantities of user data, in a response to a scandal around political consultancy Cambridge Analytica.

Xerox abandons planned deal with Fujifilm in victory for Icahn and Deason

NEW YORK/TOKYO (Reuters) – Xerox Corp has scrapped a planned $6.1 billion deal with Fujifilm Holdings Corp in a settlement with activist investors Carl Icahn and Darwin Deason that also hands control of the U.S. photocopier giant to new management.

China says will work with U.S. for positive outcome in trade talks

BEIJING (Reuters) – China said on Monday it is willing to work with the United States for a positive outcome in trade negotiations this week.

HSBC says performs first trade finance deal using single blockchain system

HONG KONG (Reuters) – HSBC Holdings Plc said on Monday it has performed the world’s first trade finance transaction using a single blockchain platform, in a push to boost efficiency in the multi-trillion-dollar funding of international trade.

Retirees Face A “Pension Crisis” Of Their Own

Authored by Lance Roberts via RealInvestmentAdvice.com,

A couple of weeks ago, I discussed the coming “Pension Crisis.” The important point made was the unrealistic return assumptions used by pension managers in order to reduce the contribution (savings) requirement by their members.

“However, the reason assumptions remain high is simple. If these rates were lowered 1-2 percentage points, the required pension contributions from salaries, or via taxation, would increase dramatically. For each point reduction in the assumed rate of return would require roughly a 10% increase in contributions.

For example, if a pension program reduced its investment return rate assumption from 8% to 7%, a person contributing $100 per month to their pension would be required to contribute $110. Since, for many plan participants, particularly unionized workers, increases in contributions are a hard thing to obtain. Therefore, pension managers are pushed to sustain better-than-market return assumptions which requires them to take on more risk.

But therein lies the problem.

The chart below is the S&P 500 TOTAL return from 1995 to present. I have then projected for using variable rates of market returns with cycling bull and bear markets, out to 2060. I have then run projections of 8%, 7%, 6%, 5% and 4% average rates of return from 1995 out to 2060. (I have made some estimates for slightly lower forward returns due to demographic issues.)”

Is This Why Trump Folded: China Holds Up U.S. Pork, Auto Imports

President Trump surprised pundits and assorted watchers of the ongoing simmering trade war between China and the US on Sunday, when he pledged to help China’s telecom giant ZTE Corp “get back into business, fast” after a U.S. ban crippled the technology company, offering a job-saving concession to Beijing ahead of high-stakes trade talks this week.

President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!

— Donald J. Trump (@realDonaldTrump) May 13, 2018

What surprised most, however, is that Trump appears to make this concession out of the blue, without any obvious pressure out of China which has been patiently biding its time until the US implements sanctions under Section 301.

Maybe not: according to Reuters, on Monday China’s customs said it had ramped up inspections of U.S. pork and had taken unspecified regulatory steps on high-risk waste imports. In a move that could potentially cripple another group of exporting US farmer, China’s General Administration of Customs said it has increased inspections of U.S. pork imports “after finding problems recently”, according to a fax it sent to Reuters.

Today’s news confirms a report from Reuters which last week, according to which Beijing had stepped up inspections of pork imported from the United States, a move that many saw as a warning …

Traders “Have Lost The Thread Of Their Own Narratives”

The dollar weakens as Trump retreats from China trade wars; Malaysia stocks soar on election of anti-market leader; the most anti-establishment government looms in Italy and BTP spreads compress; Argentine peso plummets despite massive intervention and promises; VIX hits a 12-handle as Trump reportedly “unleashes global chaos” by abandoning the Iran deal; bonds and bullion are down as the Middle-East erupts in chaos around Gaza.

But apart from all that – stocks are up. However, as former FX trader and fund manager Richard Breslow notes, it may only be Monday, but the markets have a curious feel of capitulation about them.

“Let’s hope we are just off to a slow start or we are in for a very long week. The price action is reminiscent of traders who have lost the thread of their narratives.”

Via Bloomberg,

Someone has put Schrodinger’s cat back into the box. The world can justifiably be described as simultaneously growing and slowing, dangerous as all get-out and lurching toward greater geopolitical calm or being run by the inmates of a lunatic asylum yet benefiting from tho …

Can We Blame The Bankers? (Spoiler Alert: Yes!)

Authored by Ann Pettifor via RethinkingEconomics.com,

At a Rethinking Economics conference in Oslo last month I pointed out that western politicians and economists are repeating policy errors of the 1930s. The pattern of a global financial crash, followed by austerity in Europe and the UK, led in those years to the rise of populism, authoritarianism and ultimately fascism. The scale of economic and political failures and missteps led in turn to a catastrophic world war.

image source: @alecmonopoly and @bigg_antt

Today that pattern – of a global financial crash, austerity and a rise in political populism and authoritarianism – is evident in both Europe and the US. And talk of war has risen to the top of the US political agenda. Why have we not learnt lessons from the past?

The “fount and matrix” (to quote Karl Polanyi) of the international financial system prior to its collapse in 1929, was the self-regulating market. The gold standard was the policy …

Venezuela’s Oil Meltdown Is Getting Worse

Death spiral is an overused term, but it is justified when describing Venezuela’s oil industry right now. Energy consumers and investors should pay attention.

Investors Shouldn’t Be So Quick to Swipe Left on Tinder’s Owner

IAC and Match.com, the owners of Tinder and other dating services, were rattled by Facebook’s plans to launch a dating service. But there’s room for two in this market.

Startups Show Insurers They Need to Get Smarter

Established insurers will struggle to boost profits while the property and casualty industry is flooded with capital and investment returns remain depressed. Their only option is to get quicker and smarter.

Tesla to restructure management as more executives depart

Tesla Inc. was in the headlines again on Monday with a series of announcements and news stories that include a restructuring to flatten the company’s management structure.

The Moneyist: My sister wrote $10,000 checks from our late mother’s bank account—what can I do?

This woman believes her sister took advantage of their ailing mother’s last days.

Project Syndicate: Cryptocurrencies won’t lead us to a bright future, they’re taking us back to the Stone Age

Nouriel Roubini says cryptocurrency charlatans would take us not to the futuristic world of “The Jetsons,” but to the modern Stone Age world of “The Flintstones.”