22Feb2017 Market Update: DOW Rises To New High, Are Investors Betting That Nothing Will Go Wrong In Next Few Months, Crude Prices Slip Further, Investors Are Way Too Optimistic

Here is the current market situation from CNN Money

North and South American markets are lower today with shares in Brazil off the most. The Bovespa is down 0.95% while Mexico’s IPC is off 0.59% and U.S.’s S&P 500 is lower by 0.05%.

81%

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S&P, Nasdaq dip ahead of Fed minutes; Dow hits record high

(Reuters) – The S&P 500 and the Nasdaq slipped on Wednesday as investors awaited the Federal Reserve’s minutes from its most recent meeting for clues on the timing of the next interest rate hike.

U.S. existing home sales rise to 10-year high

WASHINGTON (Reuters) – U.S. home resales surged to a 10-year high in January as buyers shrugged off higher prices and mortgage rates, a sign of growing confidence in the economy.

Unilever spurred into speedy value review by Kraft bid

LONDON (Reuters) – Unilever sought to show shareholders it can go it alone on Wednesday after rejecting Kraft Heinz’s $143 billion bid, with the promise of a swift, far-reaching review.

Peugeot seeks up to 2 billion euros savings from Opel deal: sources

LONDON/FRANKFURT (Reuters) – French carmaker PSA Group aims to generate annual cost savings of between 1.5 billion and 2 billion euros ($1.6 billion-$2.1 billion) from its proposed acquisition of Opel from General Motors , two sources told Reuters on Wednesday.

Saudi Aramco recruits JPMorgan, Morgan Stanley for IPO, HSBC a contender: source

(Reuters) – Oil giant Saudi Aramco [IPO-ARMO.SE] has asked JPMorgan Chase & Co and Morgan Stanley to assist with its mammoth initial public share offer and could call on another bank with access to Chinese investors, a source with direct knowledge of the matter said.

Exclusive: China state firm in preliminary deal to buy Chevron’s Bangladesh gas fields – oil executives

BEIJING/DHAKA (Reuters) – China’s state-run Zhenhua Oil has signed a preliminary deal with Chevron to buy the U.S. oil major’s natural gas fields in Bangladesh that are worth about $2 billion, two Beijing-based Chinese oil executives said.

German lawmakers call for inquiry into VW compliance chief exit

BERLIN (Reuters) – Lawmakers from Volkswagen’s home region called on Wednesday for an inquiry into the sudden departure of the German carmaker’s compliance chief last month, saying they were concerned the supervisory board was not overseeing the business effectively.

OPEC cuts, weak freight rates help traders profit on Asia crude routes

SINGAPORE (Reuters) – Oil traders from around the world, including the United States, Britain and Brazil, have tripled their sales to Asia as they take advantage of an emerging supply gap following OPEC-led production cuts announced late last year.

UK economy picks up in late 2016 but signs of Brexit hit appear

LONDON (Reuters) – Britain’s economy sped up at the end of 2016, data showed, but over the whole year it was weaker than previously thought and there were signs that the Brexit vote will increasingly act as a brake on growth in 2017.

Philadelphia Soda Tax Leads To 30-50% Plunge In Sales, Mass Layoffs

When Philadelphia became the first US city to pass a soda tax last summer, city officials were eagerly looking forward to the surplus-tax funded windfall to plug gaping budget deficits (and, since this is Philadelphia, the occasional embezzlement scheme). Then, one month ago, after the tax went into effect on January 1st we showed the tax applied in practice: a receipt for a 10 pack of flavored water carried a 51% beverage tax. And since PA has a sales tax of 6% and Philly already charges another 2%, the total sales tax was 8%. In other words, a purchase which until last year came to $6.47 had overnight become $9.75.

What happened next? Precisely what most expected would happen: full blown sticker shock, and a collapse in purchases.

According to Philly.com reports, two months into the city’s sweetened-beverage tax, supermarkets and distributors are reporting a 30% to 50% drop in beverage sales and – adding insult to injury – are now planning for layoffs.

One of the city’s largest distributors told the Philadelphia website it would cut 20% of its workforce in March, and an owner of six ShopRite stores in Philadelphia says he expects to shed 300 workers this spring. “People are seeing sales decline larger than anything they’ve seen up to this point in the city,” said Alex Baloga, vice president of external relations at the Pennsylvania Food Merchants Association.

Since all of this is taking place as previewed i …

The 5 Key Things To Watch For In Today’s Fed Minutes

Despite desperate attempts to jawbone March rate-hike-odds higher, because as Master said last night “we don’t want to surprise the markets”, Fed Funds Futures imply just a 36% chance (down from a week ago).

That suggests, if The Fed is serious about March, that today’s minutes must be spun towards that narrative. Here are the five key areas that The Wall Street Journal thinks are most critical…

A March Signal

Since the meeting, Fed officials have sounded increasingly comfortable about raising rates, perhaps as soon as the next gathering, on March 14-15. Philadelphia Fed President Patrick Harker said a move in March is possible, and Dallas Fed chief Robert Kaplan said rates should rise “sooner rather than later.” Chairwoman Janet Yellen said last week the Fed would consider raising rates “at our upcoming meetings,” a phrase that left open the possibility of a March move without committing to one. The minutes could offer a better sense about policy makers’ readiness to raise rates next month.

Balance Sheet Blues
What to do about the Fed’s roughly $4.5 trillion portfolio of assets, or balance sheet, has become one of the year’s biggest questions. Some officials have hinted at a willingness to begin shrinking the balance sheet in the near future, but the February meeting statement didn’t address the topic. Speaking before Congress last week, Ms. Yellen said she was unwilling to use the balance sheet as a monetary policy tool, a contr …

McCain Fingered as Major Trump Leaker

Via The Daily Bell

White House Fingers John McCain As Media Leak; Believes U.S. Senator Eavesdropped on Trump’s Classified Phone … This could be the beginning of the end for embattled Sen. John McCain’s life in politics. – True Pundit

Just the other day we wrote an article about John McCain and how he was trying to undermine President Donald Trump.

We suggested that if Trump could do something to rein in McCain that would be a net positive because McCain was being so destructive, not just to Trump but to the country generally.

McCaine tends to concentrate on areas that make him a male form of Hillary Clinton. Like Hillary he badly wants a war or vastly escalated tensions with Russia. He wants to stitch Ukraine firmly to the Soviet Union and wants to strip Russia of Crimea as well.

One reason McCain is so focused on international policy is because that’s where the wars are. For last 75 years, and even before that, America has been turned into a kind of beast of burden for international banking. It’s been made to shoulder numerous wars that were stalemated at best.

Trump To Revoke Obama’s Transgender Bathroom Rule

‘He, she, and ze’ will be not be happy. The Trump administration is set to revoke President Obama’s controversial transgender bathroom rules.

In yet another leak, a draft of a letter to the nation’s schools obtained by The Washington Post, administration officials plan to say they are withdrawing guidance issued by the Obama administration that found that denying transgender students the right to use the bathroom of their choice violates federal prohibitions against sex discrimination.

“This interpretation has given rise to significant litigation,” states the two-page draft, which indicates that the Education and Justice departments plan to issue it jointly. The draft says administrators, parents and students have “struggled to understand and apply the statements of policy” in the Obama-era guidance.

As a result, the departments “have decided to withdraw and rescind the above-referenced guidance documents in order to further consider the legal issues involved.”

The letter makes clear that schools must protect all students and that the withdrawal of the guidance “does not diminish the protections from bullying and harassment that are available to all students. Schools must ensure tha …

Air Products Bid for Chinese Rival Has Investors Pumped

Air Products bid for Yingde Gases is a major test of U.S.-Chinese cross border investing.

Lloyds Bank’s Escape From Crisis Era Pays Broad Dividends

The U.K.’s market-leading lender has little room to grow its business, but that won’t hold back payouts.

The Inevitable Turn in World’s Most Important Property Market

China’s housing prices are weakening once again. While the bubble may not be getting bigger, the problems haven’t gone away.

January 2017 Headline Existing Home Sales Surprisingly Good

Written by Steven Hansen

The headlines for existing home sales smartly improved saying “January’s sales gain signals resilience among consumers even in a rising interest rate environment”. Our analysis of the unadjusted data agrees.

ETF Focus: Dow ETF suffers abrupt outflows even as the index scores repeat records

The Dow Jones Industrial Average is trying for nine straight positive sessions, hitting records in every one of them, but some investors have been pulling back from the most popular way to invest in the average.

The Number One: Bill Gates supposedly has long way to go to catch the real richest man in the world

Coming in at around $86 billion, Bill Gates has ridden his Microsoft fortune straight to the top of the Forbes list of the world’s richest men. Then again, the business magazine doesn’t take into account the likes of Vladimir Putin.

Market Extra: Why investors shouldn’t ‘just buy everything’

Lately, when traders have glanced at their Bloomberg terminals, they’ve been greeted by a sea of green.