02Oct2017 Market Update: Wall Street Remains Strong In The 'trump Rally' On Boost From Tech And Healthcare, US Factory Activity Surged To A 13-year High, US Dollar Higher

Written by Gary

All the three major U.S. stock indexes recorded new historic record highs this morning (SPY +0.3%). Indexes were boosted by technology and healthcare stocks.

Here is the current market situation from CNN Money
	North and South American markets are mixed today. The IPC is up 0.38% while the S&P 500 gains 0.28%. The Bovespa is off 0.10%.

Looking at the last three columns (below), the first one (Actual), is what was reported this morning. The second column (Forecast) is what analysts had forecast and the third column is the previous report. Full calendar HERE.

Traders Corner – Health of the Market

What Is Moving the Markets

Here are the headlines moving the markets.
	U.S. manufacturing activity hits 13-year high; construction spending up WASHINGTON (Reuters) – U.S. factory activity surged to a more than 13-year high in September amid strong gains in new orders and raw material prices, pointing to underlying strength in the economy even as Hurricanes Harvey and Irma are expected to dent growth in the third quarter.
	Wall Street hits record high on boost from tech, healthcare (Reuters) – All the three major U.S. stock indexes were hovering near record highs on Monday morning, in a strong start to the fourth quarter, boosted by technology and healthcare stocks and after data pointed to underlying strength in the economy.
	Fed’s rate hikes causing low inflation, Kashkari says (Reuters) – The Federal Reserve’s own actions, not transitory factors, are responsible for weak inflation, a Fed policymaker argued on Monday, and the U.S. central bank should wait to raise rates again until inflation hits its 2-percent goal.
	United States renews WTO complaint over Canadian wine retailing GENEVA (Reuters) – The United States has kept trade friction with Canada simmering by filing a new version of a trade complaint over Canadian wine retailing, a document published by the World Trade Organization showed on Monday.
	Trump says hopes to improve U.S. trade with Thailand WASHINGTON (Reuters) – U.S. President Donald Trump told the prime minister of Thailand on Monday he wants to improve the U.S. trade relationship with Thailand.
	Oil falls more than 2 percent on signs of higher output NEW YORK (Reuters) – Oil fell more than $1 a barrel to below $56 on Monday as a rise in U.S. drilling and higher OPEC output put the brakes on a rally that helped prices to register their biggest third-quarter gain in 13 years.
	Wells Fargo says rehires workers wrongly fired in accounts scandal WASHINGTON (Reuters) – Tim Sloan, the chief executive officer of Wells Fargo & Co , apologized for a phony accounts scandal and said the bank has hired back more than 1,000 workers wrongly fired or who left due to the wrongdoing, according to prepared Congressional testimony.
	European airline failures play into hands of richer rivals BERLIN (Reuters) – First Alitalia, then Air Berlin and now Monarch Airlines: Europe’s struggling carriers are falling like dominoes and the region’s biggest airlines are set to chalk up bigger profits.
	GM promises more electric vehicles, paid for by SUVs DETROIT (Reuters) – Detroit automaker General Motors Co outlined plans on Monday to add 20 new battery electric and fuel cell vehicles to its global product lineup by 2023, financed by robust profits from sales of gasoline-fueled trucks and sport utility vehicles in the United States and China.
	“The End Of The QE Trade”: Why Bank of America Expects An Imminent Market Correction Last Friday, when looking at the historic, record lows in September volatility and the daily highs in US and global equity markets, BofA’s chief investment strategist Michael Hartnett said that the “best reason to be bearish in Q4 is there is no reason to be bearish.” That prompted quite a few responses from traders, some snyde, a handful delighted (some bears still do exist), but most confused: after all what does investors (or algo) sentiment have to do with a “market” in which as Hartnett himself admits over $2 trillion in central bank liquidity has been injected in recent years to prop up risk assets. To explain what he meant, overnight Hartnett followed up with an explainer note looking at the “Great Rotation vs the Great DIsruption”, in which he first reverted to his favorite topic, the blow-off market top he dubbed the “Icarus Rally”, which he defined initially nearly a year ago, and in which he notes that “big asset returns in 2017 have been driven by big global QE & big global EPS.” But mostly “big global QE.” And with global QE continuing, Hartnett, who two months ago predicted a volatile fall (and winter), now sees that Icarus “long risk” trade extended into autumn “by low inflation, big liquidity ($2.0tn central bank buying), high EPS, and promise of US tax reform.” As a result, Hartnett’s “blow off top”, or Icarus, targets for Q4 are: S&P 2630, Nasdaq 6666, 10-year Treasury 2.85%, EUR 1.15. At this rate, the S&P could hit BofA’s target in about 3-4 …
	An Accountant Smells a Rat An Accountant Smells a Rat Written by Peter Diekmeyer, Sprott Money News Twenty years ago, Doug Noland was so worried about imbalances surrounding the dot.com boom that he began to title his weekly reports “The Credit Bubble Bulletin. Years later, he warned the world about the impending 2008 crisis. However a coming implosion, he says, could be the biggest yet. “We are in a global finance bubble, which I call the grand-daddy of all bubbles,” said Noland. “Economists can’t see it. They can’t model money and credit. However, to those outside the system, the facts are increasingly clear.” Noland points to inflating real estate, bond and equity prices as key causes for concern. According to the Federal Reserve’s September Z.1 Flow of Funds report, the value of US equities jumped $1.5 trillion during the second quarter to $42.2 trillion, a record 219% of GDP. Noland’s Credit Bubble thesis Noland may be right. A report by the International Institute of Finance released in J …
	Dow Tops 22,500 As Nasdaq Slumps Thanks to Goldman, Disney, and3M, The Dow has surged this morning, topping 22,500 for the first time as Nasdaq has suffered since Europe closed… Nasdaq dipped red briefly.. It seems European markets closing prompted selling in Tech stocks… It appears Europe’s close also sparked a buying panic for value stocks… And here’s why… A broken market fixes all ills.
	“We Can’t Wait for Government.” Pop Star Daddy Yankee Saves Puerto Rican Food Bank and Delivers Aid Via The Daily Bell Puerto Rican authorities are blaming the White House for not properly responding to the disaster caused by Hurricane Maria. Trump, in turn, tweeted that about the poor leadership within Puerto Rico and claimed the politicians were just trying to score political points. There have been unverified reports that officials in Puerto Rico were, in fact, holding back supplies unless there were accompanying photo opportunities. And among all the pointing fingers and he said she said, the people of Puerto Rico are getting at least some aid. That is because while governments fight, obstruct, and grandstand to advance their political careers, real people help. Puerto Rican native and pop star
	Catalonia: A Headache for Spain, Not Europe Spain wasn’t supposed to be on the list of political risks for investors in 2017. The violence in Catalonia is an ugly reminder of Europe’s complexities, but it is a bigger problem for Spain than for Europe.
	China Throws Its Sinking Private Sector a Life Vest Private capital in China is reeling from a one-two punch of forced factory closures and higher borrowing costs. This weekend’s move by China’s central bank to boost small enterprise lending-the first real monetary easing since 2016-won’t do much to improve the dark mood among Chinese entrepreneurs.
	Why Food CEOs Are Rushing for the Exits Packaged food companies are in trouble, squeezed by changing consumer preferences, more aggressive supermarkets and stagnant prices. More mergers may be on the way.
	August 2017 Headline Construction Spending Growth Up Written by Steven Hansen The headlines say construction spending was up and near expectations. Our view is that this does not factor in inflation.
	September 2017 Manufacturing Survey Growth Remains In Expansion Written by Steven Hansen The ISM Manufacturing survey improved and remained in expansion. The key internals improved and remained in expansion. The Markit PMI manufacturing Index, also released today, is in positive territory and also improved.
	Currencies: Euro holds losses after Catalonia independence vote stirs Spanish turmoil The euro tumbled on Monday, notably against the dollar but also against other rivals, a day after an independence referendum in Spain’s Catalonia region turned violent.
	Robert Powell: What I’ve learned after 14 years at the most ‘depressing’ job in America Six lessons for planning a better retirement.
	BookWatch: How having ADHD was the secret to this man’s success 8 ways to become more productive and improve your life