Written by Gary
U.S. stock opened lower open today after the Dow Jones hit its 10th straight record close yesterday, its longest streak since 1987, as a drop in oil prices weighed and investors assessed if the “Trump rally” had gone too far too soon.
Here is the current market situation from CNN Money | |
 | European markets are sharply lower today with shares in Germany off the most. The DAX is down 1.79% while France’s CAC 40 is off 1.64% and London’s FTSE 100 is lower by 1.01%. |
What Is Moving the Markets
| Here are the headlines moving the markets. | |
 | Wall Street set to open lower as oil prices fall(Reuters) – U.S. stocks were set to open lower on Friday as a drop in oil prices weighed and investors assessed if the “Trump rally” had gone too far too soon. |
| China says no intention of using currency devaluation to its advantageBEIJING (Reuters) – China said on Friday it had no intention of using currency devaluation to its advantage in trade, responding to U.S. President Donald Trump’s description of the Asian giant as the “grand champions” of currency manipulation. |
| J.C. Penney reports comp sales drop, to shut 130-140 stores(Reuters) – Department store operator J.C. Penney Co Inc said on Friday it would close 130-140 stores over the next few months, and reported a bigger-than-expected drop in same-store sales for the holiday quarter. |
| Exclusive: Trump says Republican border tax could boost U.S. jobsWASHINGTON (Reuters) – U.S. President Donald Trump on Thursday spoke positively about a border adjustment tax being pushed by Republicans in Congress as a way to boost exports, but he did not specifically endorse the proposal. |
| Peugeot boss offers UK union reassuring words on Vauxhall plantsLONDON (Reuters) – The head of French carmaker PSA played down the threat to British plants as he discussed his potential takeover of GM’s European operations during a visit to London on Friday. |
| Oil futures suggest bullish funds’ big bet on price may pay offLONDON (Reuters) – Oil investors have placed the biggest bet in history that prices will rise, as the world’s largest exporters cut output to reduce a glut in supply, and the futures market is suggesting for the first time in a year that they could be onto a winner. |
| Unilever says Kraft’s shock bid to spur focus on short-term valueLONDON (Reuters) – Unilever said the shock of Kraft Heinz’s opportunistic approach had jolted it to re-examine its strategy, and all aspects of the consumer goods giant’s business were up for review to increase shareholder value. |
| Hilton sets $1 billion share buyback program(Reuters) – Hilton Worldwide Holdings Inc , owner of the Waldorf Astoria hotel chain, said on Friday it would buy back up to $1 billion of its shares, and that it would change its corporate name to ‘Hilton Inc’, effective March 6. |
| Samsung Electronics tightens donation rules; report says two group executives offer to quitSEOUL (Reuters) – Tech giant Samsung Electronics is tightening board oversight on donations while two senior Samsung Group [SAGR.UL] executives reportedly offered to resign, as the conglomerate struggles with the fallout from a graft scandal that led to its leader’s arrest. |
| The US Stock Market Is Highly Overvalued. Here’s Why…Submitted by Simon Black via SovereignMan.com,
This is really starting to get out of control. No doubt you’re familiar with the S&P 500, the stock index that measures the performance of the largest US companies. And as we’ve discussed before, one of the most important benchmarks in measuring whether stocks are overvalued or undervalued is the Price/Earnings, or P/E ratio. Looking back through more than a century of financial data, the long-term average P/E ratio for the S&P 500 has been about 15. As of yesterday afternoon, the P/E ratio for the S&P 500 stock index reached 26.5. That’s high- more than 75% higher than the long-term average. More importantly, since the 1870s, there have been a total of THREE periods in which the average stock P/E ratio was above 26.5.
See the pattern? Whenever financial markets get overheated, bad things tend to happen. It’s also important to consider that economic growth worldwide has been slowing. Global trade growth, for example, is at its lowest level since the financial crisis. And … |
| Starwood REIT CEO: “The Manhattan High-End Condo Market Is A Catastrophe”Not all is well in the luxury segment of the US housing market, manifested best through Manhattan’s luxury condo segment, where as reported here over the last few months, there has been a sharp deterioration. A quick sampling of recent stories on the topic reveals that the situation is indeed bad, and getting worse: NYC Real Estate Bubble Bursts As Apartment Sales Crash 20% More Troubling Signs For NYC Real Estate As Rent Concessions Soar More Bad News For NYC Real Estate As Luxury Co-Op Contracts Collapse 25% Manhattan Apartment Prices Collapse Most In Four Years New York Real Estate Prices Plunge In 4Q As Listing Days and Discounts Soar Yet while all these external observations are troubling, nothing compares to the perspective of a real insider. Overnight we got just that, courtesy of Barry Sternlich, CEO of the Starwood Property Trust. As a reminder, Starwood Property Trust isn’t a traditional mortgage REIT plowing its capital into mortgage-backed securities, but instead, its primary business is the direct financing of real estate projects, and as such it is far more familiar with the nuances of a given real-estate market than those who transact in bulk. It is what Sternlicht said during yesterday’s STWD conference call that caught our attention, and which confirms that while the market may be at all time highs, that optimism … |
| Good As Gold (Again)? Bitcoin Soars To New Record HighsBitcoin topped $1200 overnight for the first time, bringing it ever closer to the price for an ounce of gold… As Bloomberg notes, a ten-day rally for the cryptocurrency has narrowed its gap with the precious metal to the smallest on record.
Each asset has been touted as an alternative to regular currencies, because of constraints on their supply and the capacity they offer to sidestep governments.
Partity looms once again…
But, as GoldMoney’s Stefan Wieler previously noted, the price of Bitcoin is closing in on the price of gold again this week; however, this comparison is completely arbitrary. Gold is measured in weight, while Bitcoin, much like currency, is an abstract form of money and can only be measured in units of itself. One Bitcoin is worth a lot more than 1 gram of gold, but a lot less than 1 tonne. Despite Bitcoin’s stellar performance in 2016, the size and depth of the cryptocurrency market is dwarfed by the $7 trillion gold market. < … |
| Beijing Responds To Trump Charge China Is A “Grand Champion At Currency Manipulation”When it comes to the latest US stance vis-a-vis China’s currency manipulation, the jury is out, and based on two recent statements it is more confused than ever. The reason why is that shortly after Treasury Secretary Mnuchin said in a Bloomberg TV interview that there is “no urgency to brand China a currency manipulator”, and that no announcement on currency manipulation will come before the Treasury’s April report (which contradicted an October pledge by candidate Donald Trump to direct his Treasury secretary to name China a manipulator on the first day of his administration), hours later Reuters released an interview with Trump in which he accused China of being a “grand champion” at currency manipulation, adding he had not “held back” in his assessment that China manipulates its yuan currency. “I think they’re grand champions at manipulation of currency. So I haven’t held back. We’ll see what happens.” This morning China responded Trump’s accusation, when Beijing said it has no intention of using currency devaluation to its advantage in trade, which presumably excludes China’s August 2015 devaluation which unleashed a period of acute market volatility. Chinese Foreign Ministry spokesman Geng Shuang said he hoped the United States could “fully and correctly” view the exchange rate issue. Quoted by Reuters, Shuang said “China has no intention of seeking foreign trade advantages via an intentional devaluation of the renminbi. There is no basis for the continued devaluation of the renminbi,” he told a daily media briefing in Beijing. Geng said there was no basis for the continued devaluation of the renminbi and he hoped “the relevant side can fully and correctly view the renminbi exchan … |
| Stocks are Frothy, but There’s No BubbleStocks have soared but except for valuation there are few signs of a bubble. That doesn’t mean the market can’t fall. |
| Why Chinese Men Are DyingMortality rates among Chinese men aged 41 to 60, who account for nearly three-quarters of the working-age population, increased by 12% over the past decade. |
| ‘Tailored’ Accounting Takes Companies Into Alternate RealityRecent moves by the Securities and Exchange Commission serve as a reminder that non-GAAP corporate results should be digested with a grain of salt. |
| NewsWatch: Break out the pompoms, because this asset is leaving stocks in its dustThe reflation trade is looking a little nervous for a Friday, but that’s not bad news for this asset, which is sitting in the wings and ready to take off. |
| Need to Know: Break out the pompoms, because this asset is leaving stocks in its dustThe reflation trade is looking a little nervous for a Friday, but that’s not bad news for this asset, which is sitting in the wings and ready to take off. |
| Apple, Uber and Google say they’re against Trump’s transgender policyNotable technology companies spoke out against a rollback of Obama-era policies that protect transgender students. |
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