01Nov2017 Market Close: Wall Street Ends Higher As Fed Keeps Rates Steady, Small Caps Take Losses, DOW Closes Up 78 Points, US Factory Activity Index Eases Off 13-1/2-year High

Fed keeps rates unchanged, remains on road to December rate hike

WASHINGTON (Reuters) – The Federal Reserve kept interest rates unchanged on Wednesday and pointed to solid U.S. economic growth and a strengthening labor market while playing down the impact of recent hurricanes, a sign it is on track to lift borrowing costs again in December.

Dow, S&P 500 end higher as Fed keeps rates steady

NEW YORK (Reuters) – The Dow and S&P 500 ended modestly higher on Wednesday after the U.S. Federal Reserve kept interest rates unchanged and gave encouraging comments about the economy.

U.S. factory activity index eases off 13-1/2-year high

WASHINGTON (Reuters) – A measure of U.S. factory activity retreated from a 13-1/2-year high in October as some of the boost from hurricane-related supply disruptions faded, but continued to point to strengthening manufacturing conditions.

Record Thanksgiving air travel could boost U.S. airlines

NEW YORK (Reuters) – U.S. airline profits in the first nine months of 2017 fell 20 percent year over year, but the busiest Thanksgiving travel period in more than a decade could give carriers a boost, according to an industry trade group on Wednesday.

Luxury auto brands are scrambling to avoid a blue Christmas

DETROIT (Reuters) – When financial markets surge to new records, sales of luxury cars usually rise, too. Instead, October U.S. auto sales reports on Wednesday showed that a collapse in sales of luxury sedans is accelerating.

Siemens Gamesa needs more wind in its sails as Vestas stretches U.S. lead

FRANKFURT/MADRID (Reuters) – Siemens Gamesa has fallen behind biggest rival Vestas in the race for orders in the United States, hurt by a perceived lack of technology investment and a less centralized supply chain in the world’s second-biggest wind turbine market.

OPEC likely to keep oil supply curbs for whole of 2018: sources

DUBAI (Reuters) – OPEC is likely to stay the course by keeping its current curb on oil production in place for the whole of 2018 despite potential output disruptions next year, Gulf OPEC sources said.

Ackman makes new bet against Herbalife with options

(Reuters) – William Ackman said on Wednesday he has bought options to sell shares of Herbalife Ltd as a new way to bet against the nutritional supplement company he has described as a pyramid scheme.

Exclusive: Shareholder in Brazil’s Oi leans on distressed debt funds for support

SAO PAULO (Reuters) – An influential shareholder in Brazil’s Oi SA is working with U.S. and UK distressed debt hedge funds to maintain his central role at the telecoms provider as it struggles to emerge from bankruptcy protection, four sources said.

Hurricane Surge Fades: October Auto Sales Mixed As GM Inventory Starts To Tick Back Up

U.S. auto sales for the month of October came in mostly mixed with Fiat and GM being the biggest losers relative to street estimates and Ford beating on strong truck and fleet sales. GM forecasts that the overall SAAR for the month ended up around 18mm units, versus 17.5mm expected, as sales remain elevated due to hurricane-related replacements. Here’s more from Detroit News:

General Motors Co. and Fiat Chrysler Automobiles NV on Wednesday reported sales declines in October, while Ford Motor Co. saw sales jump 6.2 percent compared to the same month a year ago thanks to strong truck and fleet sales.

Fiat Chrysler reported a 13 percent drop compared to the same month a year ago, due to a 43 percent decline in fleet sales compared to last year. GM sales fell 2.2 percent due largely to slumping Buick and Chevrolet deliveries; only the automaker’s GMC brand saw a bump in sales last month, up 4.6 percent.

But overall, analysts expect a relatively strong sales month due to buyers in the Texas and Florida replacing storm-damaged vehicles, and generous sales incentives being offered by carmakers.

GM reported it sold 252,813 vehicles last month, with pickups up 9 percent to 84,902, and crossover sales were up 12 percent. Fiat Chrysler sold 153,373 vehicles in October. Retail sales fell 4 percent, though the company’s Ram and Jeep brands had strong months, according to the automaker. Ford sold 200,436 vehicles; 93,248 of those were trucks.

Iran Is Preparing Infrastructure For Bitcoin Adoption

Amid rising speculation whether Catalonia will adopt some cryptocurrency should it follow through with plans for independence, and in the context of articles such as this from Vice that “Russia is going all in on bitcoin”, one country appears to be preparing to accept bitcoin as digital legal tender: Iran.

In an interview published last week with the Farsi newspaper Shargh, the Iranian Deputy Minister of Information and Communication Technology, Amir Hossein Davaee said that”The ministry of communications and information technology has already conducted a number of research studies as part of efforts to prepare the infrastructure to use Bitcoin inside the country.”

He went on saying the crypto currency has two aspects: Economic and infrastructural. “We as the main center in Iran dealing with the country’s technology developments have taken very seriously the issue of preparing the infrastructure for the new currency.”

Quoted by the Iran Front Page, the Iranian official went on to say that such digital infrastructure is part of the soft power of each country and said entrance of the currency into Iran will end up in the general interests of the country. “Arrangements are being made with the related organizations to put together the infrastructure as early as possible.”

One reason for Iran’s eagerness to escape a dollar-denominated world is that as part of the original sanctions against the country four years ago, SWIFT removed Iran from its network, cutting off the country’s banking system from global networks and making dollar-denominated transactions impossible, in the process crippling Iran’s oil expo …

Chinese “Ghost Collateral” Scam Leads To Market “Shockwaves”, Huge Loss For Giant Commodity Trader

Back in 2014, a scandal erupted when media reports confirmed what many had previously speculated about China’s banking system: namely that much of China’s staggering loan issuance had been built (literally) upon air and that trillions in loan collateral had been “rehypothecated” between two, three or many more debtors – or never even existed – forcing banks to accept that they would never recover much if any of the pledged collateral – in most cases various commodities – if the economy were to suffer a hard-landing resulting in mass defaults. The most famous example involved collateral fraud at China’s 3rd largest port, Qingdao, where numerous borrowers were found to have “pledged” the same collateral of steel and copper to obtain funding from various banks.

For those unfamiliar there is an extensive selection of stories covering the topic, which peaked three years ago, and then quietly faded away as China did everything in its power to deflect attention from what some have said is the biggest threat facing its economy: a giant hole . Below we link to some of our more comprehensive articles on the topic:

China’s “Evaporated” Collateral Scandal Spreads To Second Port

What Is The Common Theme: Iron Ore, Soybeans, Palm Oil, Rubber, Zinc, Aluminum, Gold, Copper, And Nickel?

Another House Dem Files Articles Of Impeachment Against Trump

The grand jury indictments of former Trump campaign executive Paul Manafort and his longtime deputy Rick Gates (as well a billionaire Tom Steyer’s World Series Ad pushing for Trump Impeachment) have apparently emboldened another progressive House Democrat to file articles of impeach against Trump, as murmurs about bringing the bill to a floor vote grow steadily louder despite Nancy Pelosi’s desperate insistence that they would risk politicizing the Mueller probe and damaging the Dems during the 2018 midterms.

This time, it’s Rep. Luis Gutiérrez (D-Ill.), who’s leading the charge. Gutierrez, who told the Hill he’s planning to file the articles but didn’t specify a timeline, is the third House Dem to file articles of impeachment, joining Trump antagonists Brad Sherman (Calif.) and Al Green (Texas) who both filed the articles earlier this year. While none of the proposals are likely to gain traction, Green has taken his the furthest by pushing – unsuccessfully- last month to bring it to the floor for a vote.

By introducing the articles, which also followed the revelation that former Trump policy adviser George Papadopoulos had turned state’s witness over the summer, the Hill says support for a group of renegade Democrats to defy Pelosi and bring the bill to the floor is growing.

As a reminder, here’s what an impeachment would look lik …

What to Do if You Inherit $150 Million in Bitcoin?

SoftBank has stumbled into a bitcoin treasure in buying Fortress Investment. With the CME launching bitcoin futures, SoftBank may hang on to its digital ducats.

Startups That Never Grow Up

The flood of cash into startups has allowed companies to stay private for far longer than in the past, raising the question of whether many companies are worth the $1 billion-plus values private investors have attached to them.

Razer’s IPO Looks an Expensive Game

Will people buy new keyboards and mice the way they buy iPhones? That’s the question investors should ask before they jump into Razer’s initial public offering.

FireEye earnings beat for third straight quarter, but forecast sends shares down 15%

FireEye Inc. announced better than expected financial results for the third consecutive quarter Wednesday, but the security company’s guidance for the final three months of the year was slightly below expectations as the company seeks to close out a year of transition.

Market Extra: Why the stock-market rally may be entering the FOMO stage

With stocks slipping through the dreaded month of October unscathed, the biggest risk is missing out on the rally, an economist says.

Bond Report: 2-year Treasury yield notches 52-week high, but Fed draws mostly muted response

U.S. Treasurys register a muted reaction to the Federal Reserve’s updated policy statement, which suggested that the central bank remains on track to raise interest rates once more in December.