Written by Gary
US stock market major index’s closed lower today (SPY -0.5%) in a session that trended sharply downwards after the release of the minutes from the Fed.
Todays S&P 500 Chart
The Market in Perspective
| Here are the headlines moving the markets. | |
 | Wall Street gives up gains as Treasury yields climbNEW YORK (Reuters) – U.S. stocks closed lower on Wednesday in a rocky session after the release of the minutes from the Federal Reserve’s January meeting pushed yields on the benchmark 10-year U.S. Treasury note to a four-year high. |
| GM proposes $2.8 billion, 10-year investment in South Korea: government officialSEOUL, Feb 21 (Reuters) – General Motors (GM) has proposed an investment of $2.8 billion into its loss-making South Korean operations over the next 10 years and has asked Seoul to provide its share of the funds, a South Korean government official said on Wednesday. |
| Broadcom cuts Qualcomm offer to $117 billion after new NXP deal(Reuters) – Microchip maker Broadcom Ltd cut its bid for Qualcomm Inc on Wednesday by 4 percent to $117 billion as it objected to Qualcomm’s decision to raise its own bid for NXP Semiconductors NV to $44 billion. |
| U.S. Intel plans $5 billion investment in Israeli plant: ministerJERUSALEM (Reuters) – Intel Corp plans to invest $5 billion to expand production at its Kiryat Gat plant in southern Israel, Israeli Economy Minister Eli Cohen said on Wednesday after talks with the U.S. chipmaker. |
| Tight supply, rising prices undercut on U.S. home salesWASHINGTON (Reuters) – U.S. home sales unexpectedly fell in January, leading to the biggest year-on-year decline in more than three years, as a chronic shortage of houses lifted prices and kept first-time buyers out of the market. |
| Netflix, Amazon win new favor after Wall Street sell-offSAN FRANCISCO (Reuters) – Netflix Inc, Amazon.com Inc and technology companies poised to benefit from U.S. corporate tax cuts are attracting fresh attention on Wall Street after their shares shrugged off recent market turbulence. |
| GE CFO says no plans for an equity raise; “not discussed”NEW YORK (Reuters) – General Electric Co Chief Financial Officer Jamie Miller said on Wednesday that the industrial conglomerate has no plans to raise equity to strengthen its balance sheet, dismissing speculation about such a move. |
| Americans prefer bank branches over mobile apps for opening new accountsNEW YORK (Reuters) – Mobile banking apps keep getting better, but 60 percent of Americans would still rather open a new checking account in person at a bank branch than on a phone, tablet or desktop computer, according to a new survey. |
| Volkswagen reaches German deal on wages, leave, pensionsFRANKFURT (Reuters) – Volkswagen has agreed to raise the wages of around 120,000 workers in Germany by 4.3 percent from May, resolving a dispute that had prompted its first strikes since 2004. |
| “Goldilocks” Is Dead: Stocks, Bonds, Bitcoin Dump As Hawkish Fed Spoils Recovery PartyAs @Yogi_Chan exclaimed (correctly) amid today’s chaos: “This stupid fucking market reaction to the Fed is making it incredibly hard to write market wraps.”
Lots of desperate hand-waving on CNBC… As the apparently “goldilocks” Fed Minutes were really anything but…Total flip-flop in opinion…
An exciting higher open and ramp post-Fed Minutes evaporated as stocks dropped back into the red from Friday |
| Libor-OIS Blowing Out On Rising Repatriation Concerns, Collapsing Front-End FundingWhile trader attentions have been focused on more conventional risk indicators like equities, yields and bonds spreads in the aftermath of the February VIX eruption, a less followed – if perhaps far more informative indicator – the USD Libor-OIS spread has been blowing up, widening to 32.7bp – the most since last Feb. 22 – as Libor sets higher for the 11th straight session, while commercial paper rates for financials are also rising as more issuers have been selling longer-dated obligations, and moving closer on the curve.
So is there another dollar shortage quietly forming behind the scenes? As it turns out, the answer may be yes, and the culprit is the same “echo taper” discussed here last year (and recently by Credit Suisse’s Zoltan Pozsar) , when we commented on the impact repatriation would have on rates, and especially the front-end. Overnight, Bank of America reminds us that one of the biggest stories of 2018 for high grade credit is overseas cash repatriation as part of tax reform.
Among th … |
| YouTube Apologizes For Promoting Video That Fueled “Florida Shooting Conspiracy”Alphabet proved once again on Wednesday that the algorithms it relies on to promote “credible” content while burying videos produced by “unreliable” (read: conservative or antiestablishment) sources are far from perfect. As Bloomberg reported, gun-control advocates heaped criticism upon YouTube after it promoted a video with a title that suggested a teenage survivor of last week’s school shooting in Parkland, Fla. was a paid actor. The teen, David Hogg, has been making the media rounds since the shooting, even turning down an invitation to meet with President Donald Trump in favor of attending a CNN-hosted town hall. The video shows David Hogg, a student who has spoken out for gun control after the attack that killed 17 in Parkland, Florida, in a Los Angeles TV news clip from last summer. A description of the video read, “DAVID HOGG THE ACTOR….” Below the video, YouTube’s algorithm suggested viewers watch a clip with similar claims. The first video spent several hours at the top of YouTube’s “Trending” section before being removed on Wednesday. But not only did the video make it into the trending section, it was briefly the No. 1 top trending video in the entire US.
“This video should never have appeared in Trending. Because the video contained footage from an authoritative new … |
| Frac Sand Shortage Threatens Shale BoomAuthored by Nick Cunningham via OilPrice.com, Higher drilling costs could threaten the recent surge in United States shale production.
Halliburton said last week that its earnings could be negatively impacted because of bottlenecks related to the supply of frac sand used in shale drilling. The Wall Street Journal reported that Halliburton’s shares were briefly halted on February 15 after Halliburton’s CFO Chris Weber told an audience at the Credit Suisse Energy Summit that the company’s first quarter earnings could take a hit by a whopping 10 cents per share. The reason, he said, was because of delays by Canadian rail companies that would slow the delivery of frac sand. Halliburton saw its shares drop by more than 2 percent on a day that saw broader gains to the S&P 500. Frac sand is integral to growing shale production, increasingly so these days with more and more sand pumped down into a well. Shale drillers have credited the heavy doses of sand with squeezing out more oil and gas from the average well. Demand … |
| Glencore Rewards Those Who WaitGlencore is riding high, lifted by a wave of economic optimism and high expectations for an electric-powered future. But high leverage remains a vulnerability. |
| BHP Is Still Caught Between a Rock and an Oil WellBHP is emerging as a copper powerhouse, which helped buoy its first-half earnings. That strength conceals some troubling signs in oil and coal, however. |
| Hotels Check Into Technology Arms RaceIn a wake-up call to investors, Holiday Inn owner InterContinental Hotels said it won’t return extra cash this year. |
| 31 January 2018 FOMC Meeting Minutes: Trump Tax Changes May Accelerate The Economy And The Next Federal Funds Increase
The 31 January 2018 meeting statement presented the actions taken. This post covers the economic discussion during this FOMC meeting between the members (minutes were released today). There was considerable discussion on inflation and timing on the next federal funds rate increase, and an interesting quote:
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| Sorry, America, but you have to pay taxes on your bitcoin — here’s howEven if you made just one transaction, you likely have to pay. |
| Trump Today: President suggests Sessions should investigate Obama in Russia probePresident Donald Trump challenged his attorney general to investigate what he said was former President Barack Obama’s failure to stop Russian meddling in the 2016 election, as he prepared to meet with students from the Florida high school where a mass shooting took place last week. |
| The Moneyist: My father is moving to a retirement community — what do we do with his $1.8 million home?This son and daughter wonder whether they should sell, rent or wait to inherit it. |
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