24Jul2018 Midday Update: Wall Street Stocks Advance On Strong Earnings, Google Parent Powers Nasdaq To Record High, WTI Crude Trends Higher Into The 69 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 1.72% while Mexico’s IPC is up 1.14% and U.S.’s S&P 500 is up 0.63%.

Alphabet lifts Nasdaq to record high; oil, metal prices boost

The Nasdaq Composite hit a record high on Tuesday as Alphabet’s blowout results sparked a rally in high-growth stocks and bolstered expectations of a robust earnings season, while a rise in oil and metal prices boosted energy and material companies.

Factbox: Strong U.S. dollar hurts U.S. firms across multiple industries

A rapid rise in the dollar has hurt second-quarter financial results and some U.S. companies are warning that the pressure could persist in future quarters.

Verizon beats profit, revenue estimates, misses on subscribers

Verizon Communications Inc on Tuesday reported quarterly profit and revenue that topped estimates but added fewer-than-expected monthly subscribers amid a dearth of special promotions.

China’s caffeine war: Fast-growing Luckin brews up a threat to Starbucks

(The online version of the story corrects the spelling of the brand to Luckin in paragraphs 12, 28 and 30; fixes typo in paragraph 18)

London taxi drivers mull class action suit against Uber

London cab drivers are examining the possibility of bringing a class action suit against Uber, their association said on Tuesday, after the mobile app was granted a temporary licence renewal to operate in the British capital.

Ford to invest $4 billion in new self-driving vehicle unit

Ford Motor Co said it would invest $4 billion through 2023 in its newly formed autonomous vehicle unit, Ford Autonomous Vehicles LLC, as it looks to produce self-driving cars in the next three years.

Harley-Davidson’s profit beats estimates, shares rally

Harley-Davidson Inc’s shares rallied on Tuesday after the motorcycle maker forecast a lower-than-expected hit to profit margins from President Donald Trump’s trade tariffs and its quarterly earnings topped Wall Street estimates.

Biogen easily tops Street estimates on Spinraza sales, raises forecast

Biogen Inc reported far better-than-expected second quarter profit on Tuesday, driven by strong demand of its Spinraza muscle disease treatment, and the U.S. biotech company raised its full-year profit forecast.

Facebook quietly sets up subsidiary in China despite hardening censorship

Facebook has set up a subsidiary in China with registered capital of $30 million, according to an official business registration, hinting that the U.S. firm may be ramping up its presence in the restrictive market where its social media sites remain blocked.

Trump “Very Concerned” Over Russian Election Meddling In MidTerms “For The Democrats”

Having sheepishly admitted that Russia did ‘meddle’ in the 2016 elections (but no collusion), President Trump is now keeping an eagle eye on ‘Russian meddlers’.

In his latest tweet – on what is already nearing a record tweet frequency day – Trump said he was “very concerned” that Russia will attempt to interfere in this year’s midterm elections, claiming “they will be pushing very hard” to support Democrats.

I’m very concerned that Russia will be fighting very hard to have an impact on the upcoming Election. Based on the fact that no President has been tougher on Russia than me, they will be pushing very hard for the Democrats. They definitely don’t want Trump!

— Donald J. Trump (@realDonaldTrump) July 24, 2018

Trump has regularly claimed that no president has been tougher on Russia than him, but he has drawn bipartisan criticism for his reluctance to call out Putin, particularly on the matter of election interference.

EU To Pay Countries 6,000 For Every Migrant They Accept

After a number of European governments refused to ratify a controversial and notoriously ambiguous EU migrant deal struck behind close doors in late June which Deutsche Welle referred to as a “heavily-coded text, in which each phrase has a specific meaning for the individual parties,” the European Commission on Tuesday announced a surprise proposal to pay European governments 6,000 (or about $7,000) for each migrant they take in.

The proposal also comes as the migrant crisis has hit a peak for Europe’s Mediterranean nations, and has become politically disastrous for others like Germany, causing Italy’s new government to make the dire move in June of closing the country’s ports to rescue vessels.

Image via Human Rights Watch

Reuters reports the drastic EU initiative as follows:

Under the proposal, the Union’s common budget would pay out 6,000 euros ($7,000) for each migrant taken in, as well …

Third-World America: The ‘Bottom Half’ “Bolsters” The Economy By Going Into Debt

Authored by John Rubino via DollarCollapse.com,

For maybe the best example of how financial trends are diverging at the opposite ends of the wealth spectrum, contrast the cash flowing into the accounts of the already-rich with the debt accumulating in the accounts of the “bottom half”:

Mortgage, Groupon and card debt: how the bottom half bolsters U.S. economy

(Reuters) – By almost every measure, the U.S. economy is booming. But a look behind the headlines of roaring job growth and consumer spending reveals how the boom continues in large part by the poorer half of Americans fleecing their savings and piling up debt.

A Reuters analysis of U.S. household data shows that the bottom 60 percent of income-earners have accounted for most of the rise in spending over the past two years even as the their finances worsened – a break with a decades-old trend where the top 40 percent had primarily fueled consumption growth.

With borrowing costs on the rise, inflation picking up and the effects of President Donald Trump’s tax cuts set to wear off, a negative shock – a further rise in gasoline prices or a jump in the cost of goods due to tariffs – could push those most vulnerable over the edge, some economists warn.

That in turn could threaten the second-longest U.S. expansion given consumption makes up 70 percent of the U.S. economy’s output.

The Reuters analysis reveals growing financial stress among lower-income households even as their contribution to consumption and the broad economy grows.

The data shows the rise in median expenditures has outpaced before-tax income for the …

Vertical Group: “TSLA May Have Admitted To Actionably False Statements In Prior Filings”

From Gordon Johnson of The Vertical Group

TSLA may have Admitted to Actionably False Statements in Prior 10-Q Filings

One of the key concerns surrounding TSLA, in our opinion, is the idea that the company could currently be in receipt of a Wells Notice (as we’ve published multiple times before), rendering its ability to raise capital difficult (we are not aware of such an action, but continue to question why TSLA has not tapped the capital markets given our expectation that its cash balance will fall below the critical $1bn threshold in 2Q18, w/ ~$500mn in overseas cash [based on our analysis/opinion] that it does not have ready access to, and its decision, days after 1Q18 closed, to drain its money market account to pay out suppliers $700mn-$800mn [based on our analysis/opinion] suggesting the company, assuming our analysis is accurate, is in desperate need of cash [and its end-of-quarter cash balance could be inflated (again, based on our analysis/opinion)]; our analysis is based on: [a] our analysis/opinion of post quarter financial SEC filings, and [b] our understanding of accounting).

Thus, based on the comments below from a new July 11th, 2018 plaintiff filing (we found just today, and we do not believe is widely known by Consensus), it seems our concerns around TSLA’s inability to raise capital, at present, via an equity raise and/or 144A debt filing, could be justified. Below, without comment, we provide a few excerpts from the new July 11th, 2018 filing we just obtained (we remind our readers that TSLA is the defendant).

Exhibit 1: Page 5 of July 11th, 2018 Filing

Google’s Costly Traffic Jam Eases

The internet giant’s strong results help offset growing worries about costs and political risks.

China Stimulates Again, but Don’t Expect Fireworks

China analysts have spent the past three months arguing about whether Beijing will stimulate the economy as growth slows. The answer is now apparent, but what does that mean for markets?

Market Snapshot: Stocks advance on strong earnings; Google parent powers Nasdaq to record

U.S. stocks climb, with the Nasdaq and a number of bellwether technology names hitting a record after the parent company of Google posted results that came in well ahead of expectations, the latest example of an earnings season that is pointing to strength in U.S. corporations.

Market Extra: European luxury stocks face a 30% drop in an all-out trade war, says UBS

An all-out trade war could set off a 30% slide in shares of European makers of luxury goods, according to analysis from UBS.

The Wall Street Journal: Trump to offer emergency aid to farmers hurt by trade disputes

The Trump administration on Tuesday will announce a plan to extend some $12 billion in emergency aid to farmers amid growing concerns that the U.S. agricultural sector could suffer from President Donald Trump’s escalating trade disputes with allies, a person familiar with the matter said.