23May2018 Pre-Market Commentary: Wall Street To Slide At The Opening, U.S.-China Trade Deal ‘Too Hard To Get Done’, Says Trump, Crude Prices Down Fractionally, NOKO Meet May Be Off

Here is the current market situation from CNN Money

European markets are broadly lower today with shares in Germany off the most. The DAX is down 1.68% while France’s CAC 40 is off 1.38% and London’s FTSE 100 is lower by 0.61%.

Stock futures dip as Trump’s comments spark trade talk uncertainty

(Reuters) – U.S. stock index futures were lower on Wednesday on fresh uncertainty over U.S.-China trade talks and ahead of a Federal Reserve report that would be watched for cues on pace of future interest rate hikes.

Comcast prepares to challenge Disney for Fox assets

(Reuters) – Comcast Corp on Wednesday confirmed that it is considering and is in advanced stages of preparing an offer for the businesses that Twenty-First Century Fox has agreed to sell to Walt Disney Co .

Tesla trims up to $14,000 off Model X in China after tariff cuts

BEIJING (Reuters) – Tesla Inc has slashed up to $14,000 off its Model X in China after Beijing announced major tariff cuts for imported automobiles, a potential sales boost for the U.S. firm as the world’s largest auto market pivots towards electric cars.

Small banks trump Wall Street on Dodd-Frank rewrite

WASHINGTON (Reuters) – Congress on Tuesday rolled back some of the restraints imposed on banks after the 2007-2009 global financial crisis, but big players like Goldman Sachs Group Inc , Morgan Stanley and JPMorgan Chase & Co , will not be breaking out the champagne.

U.S.-China trade deal ‘too hard to get done,’ Trump says

WASHINGTON (Reuters) – U.S. President Donald Trump on Wednesday signaled a new direction in U.S. and China’s trade talks, saying the current track appeared “too hard to get done” and that any possible deal needed “a different structure.”

Consumer groups ask U.S. agency to probe Tesla ‘Autopilot’ ads

SAN FRANCISCO (Reuters) – Two U.S. consumer advocacy groups urged the Federal Trade Commission on Wednesday to investigate what they called Tesla Inc’s “deceptive and misleading” use of the name Autopilot for its assisted-driving technology.

Trump floats management changes instead of sanctions for China’s ZTE

WASHINGTON (Reuters) – U.S. President Donald Trump on Tuesday floated a plan to fine ZTE Corp and shake up its management as his administration considered rolling back more severe penalties that have crippled the Chinese telecommunications company.

Tesla Model 3 registrations zip past rivals in California

(Reuters) – Tesla Inc’s Model 3 sedan recorded more registrations in California than its class rivals BMW 3-Series and Mercedes C-Class in the first quarter, according to a report by the California New Car Dealers Association (CNCDA). Model 3 registrations totaled 3,723, or 14.3 percent of the near-luxury segment, compared with 3,323 for the Mercedes variant and 3,260 for the BMW model, the CNCDA report said.

Why Caterpillar can’t keep up with a boom in demand

EAST PEORIA, Ill. (Reuters) – Orders for the mining machines and construction bulldozers made at this sprawling Caterpillar Inc. factory in central Illinois have jumped, in general, three-fold over the past year.

The Next Recession Will Be Devastatingly Non-Linear

Authored by Charles Hugh Smith via OfTwoMinds blog,

The acceleration of non-linear consequences will surprise the brainwashed, loving-their-servitude mainstream media.

Linear correlations are intuitive: if GDP declines 2% in the next recession, and employment declines 2%, we get it: the scale and size of the decline aligns. In a linear correlation, we’d expect sales to drop by about 2%, businesses closing their doors to increase by about 2%, profits to notch down by about 2%, lending contracts by around 2% and so on.

But the effects of the next recession won’t be linear–they will be non-linear, and far more devastating than whatever modest GDP decline is registered. To paraphrase William Gibson’s insightful observation that “The future is already here — it’s just not very evenly distributed”: the recession is already here, it’s just not evenly distributed– and its effects will be enormously asymmetric.

Non-linear effects can be extremely asymmetric. Thus an apparently mild decline of 2% in GDP might trigger a 50% rise in the number of small businesses closing, a 50% collapse in new mortgages issued and a 10% increase in unemployment.

Richard Bonugli of Financial Repression Authority alerted me to the non-linear dynamic of the coming slowdown. I recently recorded a podcast with Richard on one sector that will cascade in a series of non-linear avalanches once the current asset bubbles pop and the current central-bank-created “recovery” falters under its staggering weight of debt, malinvestment and speculative excess.

“There Is A Sense Of Panic In The Air”: Italian Bond Carnage Returns

Update: The speculation of “will he, won’t he” is over as Italy’s president Mattarella gives Conte the green light to form a populist government, one which will blow out the Italian budget, and set the country on collision course with Brussels and Berlin:

ITALY PRESIDENT TO ASK CONTE TO TRY TO FORM GOVT: REPUBBLICA

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The blow out in Italian yields has returned after taking a brief one day hiatus, with the 10Y BTP yield hitting a fresh 2018 high of 2.46%, the highest going back to 2014…

… as the carnage in the short end resumes, send the 2Y to 0.28%…

Trump Gloats: “Look How Things Turned Around On The Criminal Deep State”

Continuing his gloating from late Tuesday evening, President Trump taunted the FBI in an early Wednesday tweet musing “how things have turned around on the Criminal Deep State.” Trump remarks on the irony of the FBI “getting caught in a major SPY scandal the likes of which this country may never have seen before” after they went after “Phony Collusion with Russia,” which he called “a made up Scam”.

Look how things have turned around on the Criminal Deep State. They go after Phony Collusion with Russia, a made up Scam, and end up getting caught in a major SPY scandal the likes of which this country may never have seen before! What goes around, comes around!

— Donald J. Trump (@realDonaldTrump) May 23, 2018

Since the New York Times and Washington Post on Friday confirmed speculation that the FBI did, in fact, have a mole inside the Trump campaign, the president has repeatedly questioned the legitimacy of the Mueller probe, stating that if there was any evidence of collusion, the FBI’s mole would’ve discovered it during the campaign.

Instead, the Mueller probe has dragged on for more than a year, with the intelligence community insisting they never deliberately spied on Trump. But in an embarrassing revelation, we now know that the bureau FBI enlisted Stefan Halper, a US citizen, political veteran and longtime US Intelligence asset, to befriend and spy on three members of the Trump campaign during the 2016 US election. In another reference to the spying revelations, Trump quoted Fox’s Andrew Napolit …

Global Stocks, US Futures Slammed By Quartet Of Risks

It is a “risk off” sea of red in global markets this morning, with US equity futures tumbling (Dow -191, ES -18) following European and Asian market sharply lower, as a quartet of growing risks spooks traders, among them i) the ongoing Turkish lira meltdown, ii) unexpectedly weak European PMIs which missed across the board, iii) the ongoing Italian political quagmire where president Matarella is stalling the formation of a new government, and iv) the return of geopol/trade war fears rose after Trump cast doubts over the North Korean summit and expressed dissatisfaction regarding trade talks with China.

While risk assets slumped and treasuries rose alongside the dollar as while oil dropped with most commodities, the main story overnight remains the unprecedented collapse in the Turkish lira, which started with a flash crash just as futures reopened for trading overnight, with many blaming Japanese flows suggesting domestic retail traders – i.e. Mrs Watanabe – were stopped out in TRYJPY, with the consequent spillover pushing USDJPY lower.

Why the Property Industry Isn’t Buying WeWork

WeWork has convinced tech investors that short-term office rentals are the next big thing, and well worth a high price. Savvy real-estate investors also like that business, but not at WeWork’s valuation.

The Sea of Leverage in Chinese Markets

Passive investors are about to get more involved in Chinese stocks thanks to MSCI’s decision to include several of them in its key indexes. They will find themselves exposed to a market swimming in leverage.

Why Rush of Overseas Dealmaking Is Risky for U.S. Companies

Global corporate deal making is on fire. The danger is that a lot of value ends up getting burned.

The Moneyist: My mom, 60, lives with a con artist with a history of theft, deception and bad credit

This daughter is concerned her mother is being taken for all she is worth.

Market Extra: Why overpaid CEOs may be a red flag for stock-market investors

At first glance, observers might think that the most highly paid corporate executives earn their money through the kind of leadership that leads to strong performance and gains in the company’s stock. That may not be the case.

Key Words: Sen. Bob Corker laments that ‘nobody cares’ about fiscal responsibility anymore

The man who, according to President Trump, “couldn’t get elected dog catcher in Tennessee,” was asked by a reporter if he’s just given up on his push for fiscal responsibility from the federal government. His answer caused a bit of a stir.