27Feb2018 Pre-Market Commentary: Wall Street To Open Flat, But On The Positive Side As Investors Mull Over Fed Chair Powell’s Morning Statements, WTI Crude Remains In The High 63 Handle

Here is the current market situation from CNN Money

European markets are mixed. The FTSE 100 is higher by 0.02%, while the DAX is leading the CAC 40 lower. They are down 0.34% and 0.02% respectively.

Comcast challenges Murdoch and Disney with $31 billion offer for Sky

LONDON (Reuters) – U.S. cable giant Comcast offered to buy Sky for $31 billion in an unsolicited approach, taking on Rupert Murdoch’s Fox and Bob Iger’s Walt Disney in the battle for Europe’s biggest pay-TV group.

Stock futures dip ahead of Powell’s testimony

(Reuters) – U.S. stock index futures pointed to a pause in Wall Street’s recovery on Tuesday as investors turned cautious ahead of Federal Reserve Chairman Jerome Powell’s first congressional testimony.

Exclusive: Secretive U.S. security panel discussing Broadcom’s Qualcomm bid – sources

WASHINGTON (Reuters) – A national security panel that can stop mergers that could harm U.S. security has begun looking at Singapore-based chipmaker Broadcom Ltd’s plan to take over rival Qualcomm Inc, according to three sources familiar with the matter.

JPMorgan raises profit goal on lower taxes, higher rates

(Reuters) – JPMorgan Chase & Co raised its key profit goal on Tuesday, and said lower taxes and higher interest rates could help increase its annual pretax net income by up to 17.5 percent in three years.

Macy’s same-store sales growth trounces analyst estimates, shares jump

NEW YORK (Reuters) – Macy’s Inc on Tuesday reported higher-than-expected same-store sales growth for the fourth quarter, fueled by higher holiday sales and a marketing and loyalty program overhaul, sending shares surging in premarket trading.

Homebuilder Toll Brothers profit beats on higher demand

(Reuters) – Toll Brothers Inc reported on Tuesday a first-quarter profit that beat analysts’ estimates, as it sold more luxury homes at higher prices, mainly in the Western United States.

No sign of violations in Geely purchase of Daimler stake: Merkel

BERLIN (Reuters) – Germany is open towards its trading partners and at a first look, there are no obvious violations linked to Geely’s acquisition of a $9 billion stake in Daimler , Chancellor Angela Merkel said on Tuesday.

Walt Disney to invest 2 billion euros in Disneyland Paris

PARIS (Reuters) – The Walt Disney Company on Tuesday announced a 2 billion euro ($2.47 billion) investment drive to expand its French theme park Disneyland Paris, which it took full control of last year.

Discovery’s revenue tops estimates on higher advertising

(Reuters) – Discovery Communications Inc’s revenue topped analysts’ forecasts in the fourth quarter as the owner of Discovery Channel and Animal Planet benefited from higher advertising income across its networks.

Trump Tweets: Russia Probe Is A “Witch Hunt” With “No Evidence Of Collusion”

After taking a notable break from Twitter early this week, President Donald Trump sent out a flurry of tweets this morning on one of his favorite topics: Special Counsel Robert Mueller’s Russia probe.

The tweets come after Mueller secured a guilty plea from former Paul Manafort deputy Rick Gates, who is now believed to be cooperating with the investigation. Mueller also recently secured a guilty plea from Dutch lawyer Alex van der Zwaan for lying to investigators about his interactions with Gates.

In a series of tweets, Trump offers several quotes from an appearance by Fox judicial analyst Judge Andrew Napolitano on Fox News last night where he the judge opined that “written answers” would be a victory for the president, referring to a report last week that Trump’s lawyers are pushing for Mueller to accept limited testimony from Trump, including the possibility of offering written answers to the Mueller team’s questions.

Napolitano soon turned the conversation to Hillary Clinton’s criminality and any evidence that might remain at the DOJ, saying “somebody in the Justice Department has a treasure trove of evidence of Mrs. Clinton’s criminality…” which Trump quoted…

“He’s got a very good point. Somebody in the Justice Department has a treasure trove of evidence of Mrs. Clinton’s criminality at her own hands, or through others, that ought to be investigated. I fully agree with the President on that.” @judgenapolitano on @marthamaccallum Show

— Donald J. Trump (@realDonaldTrump)

Blain: “Here’s Why Many Think The Market Looks Unsustainable”

Blain’s Morning Porridge, submitted by Bill Blain of Mint Partners

February nearly behind us – where does that leave the rest of the year?

“And if the band you’re in starts playing different tunes….”

It’s a pleasure to be writing the Porridge this morning after London was hit by the vicious “Beast from the East” Whiteout last night, with nearly 2 whole snowflakes causing mass train cancellations and panic consumer buying. Thankfully the authorities had prepared us all with their “yellow snow alert”, (what’s the first thing a baby polar bear learns?), and so we were all prepared and wrapped up warm. London survived Snowmaggedon! The next Blizzard hits Thursday – we shall be wearing shorts and sunglasses. (US readers – extreme sarcasm alert..)

February looks like its closing on constructive tone. So much for the VAR/VIX Volatility Crash. It almost feels like it didn’t happen. Don’t be fooled. Markets are in “wait and see” mode rather than convinced on direction. Volumes (particularly in stocks) are suspiciously low.

This week’s key issues are the Italian Elections – where we’re effectively blind because of 2 week no-polling regulations, German coalition concerns – where we simply can’t guess how the SPD membership will vote, and what the new Fed-Hed is going to say. Its just more of the same – apparently. Most folk are breathing a sigh of relief that February’s early slides didn’t turn into market rout and ruin.

With US stocks total market capitalisation now trading right up to 143% of US GDP – the Buffet Chart (attached), a number of folk have warned the market looks unsustainable. However, the structure of the market has also changed. The stock market is more balanced across sectors (in 2000, 40% of value was in Tech, today its 27%). My macro-economist col …

Dollar Spikes After Weidmann’s ECB Rate-Hike Comments

The euro is weakening and Dollar Index spiking (back above pre-FOMC Minutes level) following headlines from Buba President Jens Weidmann on ECB rate-hike guidance.

When asked about prospects for ECB interest rates, Bloomberg reports that Weidmann pointed to investor expectations built on the economic situation and communication by the central bank. Given the current economic backdrop, expectations for hikes to begin in mid-2019 are “not completely unrealistic,” he said.

Weidmann’s comments come as the ECB debates how to wind down QE after September and amend language that currently includes a pledge to keep interest rates unchanged “well past” that time. With the 19-nation economy expanding strongly and confidence increasing that inflation will sustainably pick up, officials have signaled that a shift could come early this year.

“This could probably be one part of our discussion — whether to complement any decision on the asset-purchase program and on communication regarding the asset-purchase program with a bit more specificity with respect to the interest-rate guidance,” Weidmann said in an interview with Bloomberg Television in Frankfurt. “‘Well past’ is a rather vague time dimension so it could be about specifying what well past means.”

The reaction was EUR selling, USD buying…

Self-Proclaimed Bitcoin Inventor Craig Wright Sued For $5 Billion

Submitted by CoinTelegraph

Chief scientist of nChain and self-proclaimed mind behind the Satoshi Nakamoto pseudonym, Craig Wright, is being sued for $5 bln. The suit is brought to the United States District Court of the Southern District of Florida by the estate of David Kleiman.

David Kleiman was a computer scientist and cyber-security expert, whom many suspect to have been one of the developers behind Bitcoin and the Blockchain technology.

In documents which surfaced on Reddit, the plaintiff claims that Wright stole hundreds of thousands of BTC, worth over $5 bln dollars at today’s rate, from David Kleiman’s estate. The statement by the plaintiff alleges that Wright recognized that Kleiman’s friends and family were initially unaware of the wealth he accumulated.

The official complaint states that Wright took advantage of this and “forged a series of contracts that purported to transfer Dave’s assets to Craig and/or companies controlled by him. Craig backdated these contracts and forged Dave’s signature on them.”

The plaintiff continues in the document, stating that following David Kleiman’s death on April 26, 2013, Wright contacted Kleiman’s estate and disclosed that he and David had

The Other Risk From Rising Wages

If higher labor costs don’t cause inflation, it means they probably will cut profit margins, hurting profits and share prices.

AIA Is an Insurer to Back in China

Hong Kong-based AIA’s earnings surged last year thanks to its rapid growth in mainland China.

Filling the Toys ‘R’ Us Void

As Toys ‘R’ Us closes more stores, other retailers have an opportunity to seize market share.

Economic Report: Durable-goods orders sink 3.7% in January and businesses trim investment again

Durable-goods orders plunged 3.7% in January, largely because of a big drop in contracts for passenger planes. Potentially more worrisome, a key measure of business investment fell for a second straight month, the first time that’s happened since early 2016.

And the best state in America in 2018 is…

The official 2018 Best States rankings from U.S. News & World Report are in.

The Fed: Powell says Fed will ‘balance’ between growing but not overheating economy

Fed Chairman Jerome Powell said the goal of policy is to get inflation to 2% without overheating economy.