12Dec2018 Midday Update: Wall Street Soars Investors Cheer US-China Trade Talks, DOW Jumps 380 Points, WTI Extremely Volatile At The Low 52 Handle, US Consumer Prices Flat, Underlying Inflation Firm

Here is the current market situation from CNN Money

North and South American markets are mixed today. The S&P 500 is up 1.69% while the Bovespa gains 1.40%. The IPC is off 1.11%.

China’s Tencent Music jumps 11 percent in U.S. debut

Shares of China-based music streaming company Tencent Music Entertainment rose about 11 percent in their U.S. debut on Wednesday, as investors shrugged off volatile markets to grab a piece of the fast-growing music streaming industry.

U.S. consumer prices flat; underlying inflation firm

U.S. consumer prices were unchanged in November, held back by a sharp decline in the price of gasoline, but underlying inflation pressures remained firm amid rising rents and healthcare costs.

Amazon aims at office workers with compact cashier-less food store

Amazon.com Inc on Wednesday opened a compact version of its cashier-less Amazon Go food stores, broadening its footprint in the bricks-and-mortar world in a move to add shops in places such as office lobbies and hospitals.

Stocks cheered by trade talk, sterling rises on May bets

Stock markets around the world rose along with U.S. Treasury yields on Wednesday as U.S. President Donald Trump sounded upbeat about a China trade deal and sterling bounced on bets that UK Prime Minister Theresa May would keep her job.

U.S. not swayed by WTO reform proposals

Proposals for reforming the World Trade Organization fail to deal with problems raised by the United States, the U.S. envoy to the WTO told its General Council on Wednesday.

China preparing plan to increase access for foreign companies: WSJ

China is planning to replace an industrial policy with a new program that promises greater access for foreign companies, the Wall Street Journal reported https://www.wsj.com/articles/china-is-preparing-to-increase-access-for-foreign-companies-11544622331?mod=breakingnews on Wednesday, in a move to resolve trade tensions with the United States.

Germany seeks to assist potential bank merger: Bloomberg

Germany is holding high-level talks to facilitate a possible merger of the nation’s two largest private banks – Deutsche Bank and Commerzbank – Bloomberg reported on Wednesday.

Wall Street climbs 1 percent on trade optimism

U.S. stocks rose 1 percent on Wednesday, boosted by technology stocks, as a report about China planning to increase access for foreign firms added to optimism fuelled by President Donald Trump’s upbeat comments on trade.

Canada frees CFO of China’s Huawei on bail; Trump might intervene

A top executive of Chinese telecoms giant Huawei Technologies Co Ltd was granted bail by a Canadian court on Tuesday, 10 days after her arrest in Vancouver at the request of U.S. authorities sparked a diplomatic dispute.

US Financials “Trade Like Death”, Need To Stabilize Soon Or “End Is Nigh”

DataTrekResearch’s Nick Colas notes this morning that:

” US large cap Financials trade like death itself. Looking at the weighting of this sector in the S&P 500, they should be nearing a bottom. At a current weight of 12.5%, they are back to trading at their June 2000 low”

And eyeballing the charts, he is absolutely not wrong…

The problem, Colas points out, is that markets may be pricing in something worse than a garden-variety slowdown and the February 2009 low weight was 9.7%, implying, this group needs to stabilize soon, or “the end is nigh” crowd will have one more arrow in their quiver.”

In fact, as Colas details details, Large cap Financials are the only reason the S&P 500 is down for the year to date. Not Tech (still up 2.5%). Not Consumer Discretionary (+4.9%). And those two sectors’ returns are enough to offset declines in lesser-weighted sectors like Industrials (-10.4%), Materials (-14.3%) and Energy (-12.7%).

Here is the math:

• Financials are 13.1% of the S&P 500 and the group is down 12.5% YTD.

  • The group’s average weighting …

Chinese High-Tech Researchers Told “Not To Travel To US Unless It’s Essential”

Just a few days after Cisco “erroneously” advised its employees to avoid non-essential travel to China, Beijing has returned the favor, and according to the SCMP, Chinese researchers working in sensitive hi-tech sectors have been warned not to take any unnecessary trips to the United States “as unease grows in the business community following the arrest of a tech executive in Canada.”

Workers at a research agency who can’t avoid crossing the Pacific were also told in an internal memo that if they did have to travel to the US, they should remove any sensitive information from their mobile phones and laptops, the SCMP reported citing an anonymous source. The soft travel ban is the result of tensions following the arrest of Huawei Technologies CFO Sabrina Meng Wanzhou in Canada, who despite being released on bail was not allowed to leave the country.

The South China Morning Post reported last month that the US embassy in Beijing had revoked 10-year multiple-entry visas issued to some researchers specialising in China-US relations at government-backed institutions without explanation amid tightened visa scrutiny. Some researchers also had their computers and mobile phones subjected to checks by US customs officers.

An academic who frequently travels across the Pacific feared changing sentiment in the United States, from engagement to disengagement with Beijing, could lead to a US strategy of full-scale containment of China.

At the request of the US authorities, Huawei executive Meng was arrested on December 1 in Vancouver and was released on bail on Tuesday. She could be extradited to the US to face fraud charges relating to alleged violati …

Kass: Top 10 Reasons Why We May Be Entering A Bear Market

Via RealInvestmentAdvice.com,

“It’s okay to be wrong; it’s unforgivable to stay wrong.” – Marty Zweig, (October 16, 1987 Wall Street Week – at six minute and 40 second mark!)

As observed on Wall Street Week 31 years ago by Lou Rukeyser, the Dow Jones Industrial Average “crashed” by more than 230 points in the week ending October 16, 1987 – knocking out all previous records. In the aforementioned video (above) Lou cited a tumbling in Treasury bonds, jitters in the Persian Gulf, an discouraging political situation, scary layoffs on Wall Street and, of course, the mindless computer based (“portfolio insurance”)selling. (Full disclosure I managed some of the family’s wealth while a General Partner at Glickenhaus and Co.)

Sound familiar? It is (as last week’s market dive was also conspicuous in it’s character)!

But the worst was yet to come on the following Monday (October 19, 1987) , when the DJIA dropped by 22% on the day.

As I have often noted history rhymes – though history doesn’t necessarily repeat itself. And (as Benjamin Disraeli reminded us), what we have learned about history is that we have not learned about history.

Beginning early this year I argued that the market was in the

What’s Next For The Market: Here Are The Key CTA Buy/Sell Levels

Another day, another early ramp higher in stocks amid a flurry of optimistic headlines/news that the trade war with China is slowly moving toward a potential resolution, including ii) Trump’s pledge to intervene in the Huawei CFO arrest – who yesterday was granted bail in a Canadian court – if it helps the trade deal with China; ii) Trump’s statement he could meet with Xi again; iii) reopening of Soybean trade with China (pushing prices 13% higher off Sept. lows), iv) a WSJ report China may be scrapping “Made in China 2025” strategy which has been widely criticized by US trade hawks; v) ongoing work behind the scenes by China related to ease “implicit FX control”, vi) optimism by Pompeo that he expects positive headlines regarding China in the coming weeks.

There were further bullish signals out of Italy which according to media reports is ready to propose a 2% deficit target to the EU (which however were denied by the prime minister’s office), and today’s CPI print where the core number confirmed that there is little reason for the Fed to step off the rate hiking gas for now, iii) Theresa May will supposedly survive the vote of no-confidence today (which however will leave Brexit in continued limbo as the proposed deal still has little chance of passing).

Alas, just like yesterday’s early ramp (which was fully reversed and then some as aggressive sellers emerged in the afternoon), as Nomura’s Charlie McElligott writes, today’s latest move higher in Equities comes to the chagrin of investors (particularly in US stocks) “who have purged net exposures / leverage and are watching this latest ~+3.4% S&P futures rally off the Monday lows from the sidelines, due to the horrible run of performance and proximity to year-end effectively “shutting-down” most funds—with zero willingness to “hold risk” in light of the headline violence (not just US / China but with Brexit, France and Italy all remaining “in play” as well) and into increasing …

November 2018 CPI: Year-over-Year Inflation Rate Moderates to 2.2%

Written by Steven Hansen

According to the BLS, the Consumer Price Index (CPI-U) year-over-year inflation rate was 2.2 % year-over-year (lower than the 2.5 % last month) – unchanged month-over-month. The year-over-year core inflation (excludes energy and food) rate marginally grew from 2.1 % to 2.2 %, and continues to be above the target set by the Federal Reserve.

Market correction or midterm speed bump? Here’s what real-estate agents are saying about the housing market

A survey of real estate agents showed signs of life in the housing market after all, as well as some new trends that bear watching.

After colleges helped banks hawk products, students paid $27 million in fees

A former CFPB official says the CFPB suppressed a report detailing the problem.

Love & Money: How to plan your retirement when you have children with special needs

Some parents are planning two retirements: theirs, and their child’s.