23Feb2017 Market Commentary: US Markets Gap Up At The Opening, Crude Prices Move Higher, Some Analysts Are Getting Cold Feet On The Market Relentless Climb To New Highs

Here is the current market situation from CNN Money

European markets are mixed today. The CAC 40 is up 0.28% while the FTSE 100 gains 0.08%. The DAX is off 0.03%.

Wall Street set to open near record highs on oil rally

(Reuters) – U.S. stocks looked set to open near record highs on Thursday as a rally in oil prices added to rising optimism about U.S. President Donald Trump’s proposed tax reforms.

Tech breakthroughs take a backseat in upcoming Apple iPhone launch

SAN FRANCISCO (Reuters) – When Apple Inc launches its much-anticipated 10th anniversary iPhone this fall, it will offer an unwitting lesson in how much the smartphone industry it pioneered has matured.

Jobless claims up, four-week average lowest since 1973

WASHINGTON (Reuters) – The number of Americans filing for unemployment benefits rose slightly more than expected last week, but the four-week average of claims fell to its lowest level since 1973, pointing to strengthening labor market conditions.

Trump to seek jobs advice from firms that offshore U.S. work

WASHINGTON (Reuters) – President Donald Trump, who has vowed to stop U.S. manufacturing from disappearing overseas, will seek job-creation advice on Thursday from at least five companies that are laying off thousands of workers as they shift production abroad.

Norwegian Air steps up transatlantic pressure with $65 fares

(Reuters) – Norwegian Air Shuttle ASA on Thursday announced plans to offer transatlantic flights on 10 new routes between the United States and Europe starting at $65, ramping up pressure on U.S. and European rivals.

PSA boss says Opel deal would find ‘speedy’ savings

PARIS (Reuters) – PSA Group’s proposed acquisition of Opel would swiftly create savings and value from the General Motors European division’s turnaround and complementary brands, the French carmaker’s Chief Executive Carlos Tavares said on Thursday.

Ghosn cedes Nissan CEO role to focus on alliance with Renault, Mitsubishi

TOKYO (Reuters) – Nissan Motor Co said Carlos Ghosn will step aside as CEO after leading the company for 16 years, allowing him to concentrate on deploying his cost-cutting expertise across its alliance with Renault SA and newly added Mitsubishi Motors Corp .

Tesla says Model 3 on track for volume production by September

SAN FRANCISCO (Reuters) – Tesla Inc said on Wednesday its mass-market Model 3 sedan was on track for volume production by September, encouraging investors who see the electric vehicle as the avenue to profitability for the young company.

Audi CEO not facing immediate dismissal by supervisory board: sources

BERLIN/HAMBURG (Reuters) – Audi Chief Executive Rupert Stadler is not facing immediate dismissal by the carmaker’s supervisory board, two sources said, despite growing criticism of his role in the investigation into the emissions scandal.

China Prepares For “Regime Collapse” In North Korea

Over the weekend, following reports that China has banned all North Korean coal imports which marked a troubling escalation in relations between the two formerly “amicable” nations in the aftermath of last week’s North Korean ballistic missile launch, we noted that the move not only led to Kim Jong-Un potentially losing a “very big ally”, but that it could also result in jeopady for his regime, and a potential political coup in the dictatorship.

Now, it appears that the likelihood of a regime collapse in North Korea is being taken seriously by none other than the country’s formerly largest trading partner, China, which as SCMP reports, will take the “necessary measures” to safeguard national security in the event of the collapse of the neighbouring North Korean regime, a defence official said on Thursday. The recent assassination of North Korean leader Kim Jong-un’s half-brother Kim Jong-nam has sparked renewed concerns over the stability of Pyongyang and the possibility of a collapse of the reclusive regime.

Beijing – long seen as the guarantor of Pyongyang’s security – has stayed largely silent on the incident. However in the aftermath of the abrupt coal import suspension, Beijing was no longer able to avoid the topic.

Asked whether China had a contingency plan for a North Korean collapse, defence ministry spokesman Ren Guoqiang said Beijing has maintained its usual policy towards Pyongyang, and urged the “relevant parties to refrain from any actions that will escalate tensions”.

“We are re …

Trump’s Top Econ Guy Just ANNIHILATED the Market’s Growth Fantasy

The single biggest story this morning is Treasury Secretary Steve Mnuchin pouring ice-cold water on the market’s mania.

Since Trump was elected November 8th 2016, the market has gone almost straight up on the notion that an economic utopia has arrived and that GDP growth of 5% (yes, CNBC ran numerous stories on this) was just around the corner.

The mania has been incredible. The last time the market had a 1% down day was OCTOBER 11! From a daily RSI reading the S&P 500 is more overbought today than at any point since the 2009 bottom.

But not for much longer.

Treasury Secretary Steve Mnuchin appeared on numerous media outlets this morning. And NOTHING he had to say supported stocks’ current lofty levels.

First and foremost, Mnunchin stated point blank that the Trump administration HOPES to implement tax reform by August.

Not two weeks from now. Not even two months from now. But AUGUST.

And that is their hope, not a hard deadline.

Then Mnunchin announced that there was “not much administration can do to affect growth in short term”.

Wait, what?

For weeks we’ve been told by the financial media that 5% GDP growth is just around the corner… that the US has already entered an economic utopia… and that stocks are correct to be rallying to all -time highs based on this belief.

Consider the following headlines:

· Americans brimming with optimism …

John McCain Makes “Unusual” Secret Trip To Syria As Trump Prepares Plans To Defeat ISIS

In an unusual move for a sitting senator, John McCain (R-AZ) secretly traveled to northern Syria last weekend to speak with American military officials and Kurdish fighters at the forefront of the push to drive Islamic State out of their de facto capital of Raqqa. The short visit came in the middle of a regional trip that took McCain from Saudi Arabia to Turkey, where he discussed evolving plans to counter the Islamic State in the Middle East. Per the Wall Street Journal:

U.S. officials familiar with Mr. McCain’s trip said that the senator traveled to Kobani, the Syrian town on the Turkey border controlled by Kurdish forces since 2012.

In a statement, Mr. McCain’s office confirmed that a trip took place, saying the senator “traveled to northern Syria last week to visit U.S. forces deployed there and to discuss the counter-ISIL campaign and ongoing operations to retake Raqqa.”

Mr. McCain is believed to be the first U.S. lawmaker to travel to the Kurdish-controlled area of northeastern Syria since it became a hub for American special-operations forces who are aiding local forces in the fight against Islamic State.

Of course, this trip came just a couple of weeks after Trump issued a Presidential Memorandum giving his new Secretary of Defense, James Mattis, 30 days to draw up a military plan to “defeat ISIS” declaring definitely that “it is the policy of the United States that ISIS be defeated.”

Market Sours On Tesla’s “Phantom” Beat, Stock Slides

We were surprised at how gingerly the market digested Tesla’s “beat” last night, which as we noted was apples to oranges as consensus estimates did not incorporate the cash-draining SolarCity acquisition results, meanwhile completely ignored the biggest concern, namely the nearly $1 billion in record cash burn the company suffered in the quarter, a number that is only set to rise in the coming quarters as Tesla rolls out even more unprofitable growth initiatives.

This morning, however, things appear to be changing as Tesla has not only faded its after hours gains, but at least check was down as much as 2.4%.

What gives?

According to brief Bloomberg summary, Tesla shares have quickly given up all gains from the better-than-expected earnings as the sell-side awaits more clarity on the cost and capital raise plans. One analyst specifically took aim at the fourth quarter results, calling out the beat as “phantom” given the exclusion of the SolarCity acquisition from consensus estimates. Still, even with the stock poised for a decline, shares are still up more than 40% since the beginning of December.

Here is a sampling of select sellside analysts reactions (TSLA has 8 buys, 10 holds, 6 sells with average price target $242) to the company’s earnings report:

MOR …

Big Investors Are Too Scared to Run, Too Scared to Fight Trump Rally

Some big investors are worried about what President Donald Trump’s actions might do to the stock market. That doesn’t mean they will bet against the rally. At least not yet.

Barclays Leaves Investors Behind on Road to Recovery

Barclays returned to profit in 2016 but investors aren’t getting to share in the recovery yet, even as its bankers are doing just fine.

GM’s European Exit Could Spawn New Rival at Home

Potential buyer Peugeot could use GM’s Opel and its German engineering pedigree to push into the U.S.

January 2017 CFNAI Super Index Moving Average Statistically Unchanged

Written by Steven Hansen

The economy’s growth was statisically unchanged based on the Chicago Fed National Activity Index (CFNAI) 3 month moving (3MA) average – but remains marginally below the historical trend rate of growth (but well above levels associated with recessions). If one views the single month index to grasp what is going on – it declined.

Market Extra: Is Yellen trolling Trump and the stock market’s record run?

Slow your record roll, Wall Street! That appears to be the message that Janet Yellen’s Federal Reserve is conveying to investors Wednesday.

FA Center: Why I’m taking the CFP exam — and you should too

MarketWatch columnist Bob Powell has headed back to school.

Need to Know: Only ‘blind faith’ sees Dow’s record run roaring onward, says storied hedge fund manager

The Dow’s streak of record closes is up to 9 and it’s about to run against some historical factoids, says our Chart of the Day. Meanwhile, our call says don’t short oil now, it’s far too dull.