01Mar2018 Market Close: Wall Street Falls More Than 1 Percent On Trump Tariff Comments, DOW Recovers From 400 Point Fall To Close Down 24 Points, US Dollar Slips As Gold Index Gains

Trump says U.S. to impose steep tariffs on steel, aluminum imports

WASHINGTON (Reuters) – President Donald Trump announced on Thursday he would impose hefty tariffs on imported steel and aluminum to protect U.S. producers, risking retaliation from major trade partners like China and Europe and helping trigger a large selloff on Wall Street.

Wall St falls more than 1 percent on Trump tariff comments

NEW YORK (Reuters) – Major U.S. stock indexes dropped more than 1 percent on Thursday after President Donald Trump said the United States would impose import tariffs on steel and aluminum, raising concern about higher prices and a trade war.

U.S. monthly inflation picks up; jobless claims at 48-year low

WASHINGTON (Reuters) – U.S. consumer prices increased in January, with a gauge of underlying inflation posting its largest gain in 12 months, bolstering views that price pressures will accelerate this year.

Comcast’s bid for Sky could lure Disney in bidding war

(Reuters) – U.S. cable company Comcast Corp’s proposal to buy Sky Plc for $31 billion has raised the specter of a potential bidding war between with Rupert Murdoch’s Twenty First Century Fox and Walt Disney Co .

More banks set to join financing for Blackstone’s TR buyout

NEW YORK (LPC) – The three banks leading the US$13.5bn-equivalent loan and bond financing backing US private equity firm Blackstone Group’s acquisition of a majority stake in Thomson Reuters’ Financial and Risk (F&R) unit are set to sign more banks into the deal.

GM, rivals chase luxury pickups’ fat margins as U.S. market dips

DETROIT (Reuters) – General Motors Co on Thursday unveiled a revamped luxury pickup truck, intensifying the battle among Detroit’s Big Three automakers for fat profits at the top end of a highly lucrative segment even as overall U.S. new vehicle sales decline.

How Geely’s Li Shufu spent months stealthily building a $9 billion stake in Daimler

SHANGHAI/BEIJING (Reuters) – When Daimler announced that Li Shufu had acquired almost 10 percent of the automaker last Friday, it caught financial markets – and German regulators – by surprise.

Icahn bets on Newell, praises Herbalife management

(Reuters) – Activist investor Carl Icahn said he owns a “large position” in Newell Brands Inc where a rival activist is already fighting to remove the entire board from the company that makes matches, markers and candles.

Fed’s Powell says no evidence U.S. economy overheating

WASHINGTON (Reuters) – Federal Reserve Chairman Jerome Powell said on Thursday the U.S. economy does not appear to be running hot, even as the influential head of the New York Fed suggested a faster pace of interest rate increases may still be in the offing for 2018.

Stocks Slammed Into Red For 2018: Powell Plunge, Dudley Dump, Or Trump Turmoil?

Gluskin Sheff’s David Rosenberg summed it all up nicely…”Hmmm. Let’s see. Tariffs. Sharp bond selloff. Weak dollar policy. Massive twin deficits. New Fed Chairman. Cyclical inflationary pressures. Overvalued stock markets. Heightened volatility. Sounds eerily familiar (from someone who started his career on October 19th, 1987!).”

h/t Doug Kass

Only The Nasdaq remains green for 2018…

A very chaotic day across asset classes today amid headlines from Powell, Dudley, and Trump (note the post-Trade-War move sent USD, Bond yields, and stocks all lower together – a different regim …

Wells Tumbles After DOJ Orders Investigation Into Wealth Management Division

Wells Fargo – Warren Buftett’s largest investment – is once again making headlines for customer abuses. According to the Wall Street Journal, in the latest alleged criminal violation by the recidivist bank, whistleblowers within Wells Fargo Advisors flagged several issues related to products and services sold to customers “with an eye toward earning more compensation than finding the best fit for the customer.”

In response, the DOJ asked Wells Fargo to assess “whether there have been inappropriate referrals or recommendations, including with respect to rollovers for 401(k) plan participants, certain alternative investments, or referrals of brokerage customers to the company’s investment and fiduciary-services business,” revealed the bank in a Thursday regulatory filing.

The claims include Wells Fargo’s brokerage division, which is known as Wells Fargo Advisors , these people said. Wells Fargo’s former head of that division, Mary Mack, was tapped in July 2016 to clean up its retail banking business. More recently, she was promoted to also lead its consumer lending unit. -WSJ

The bank has hired Shearman & Sterling LLP to look into the allegations, according to people familiar with the matter. In April 2017, Shearman released a 113-page report on the bank’s sales and practices issues in the wake of widespread reports into questionable sales conduct affecting up to 3.5 million customers dating back to 2002.

VIX Carry Traders Stunned That “There’s No Free Lunch In The New World Order”

“The volatility ‘tail’ is once again wagging the US equities ‘dog’,” warns Nomura’s Charlie McElligott adding that US equities behavior is super idiosyncratic right now.

There is of course this fundamental “earnings- / revenue- growth” case which has continue to power the Tech sector (and with it, the performance of “Momentum” factor), which especially in light of its enormous buyside overweight / index weight, huge overseas cash and thus, potential for MASSIVE buyback upgrade potential, has made it the hands-down “winner” YTD, despite the larger rates selloff and reflationary environment seemingly creating an environment where historically, “cyclicals” and “value” would expect to benefit.

Obviously from a macro perspective, we have made the case that SPX regime is now being driven by the “financial conditions” theme – with the largest price-sensitivities now being shown as interest rate volatility, real yields, credit spreads and USD liquidity. As such, you can pretty-much determine the direction of Spooz on most-days based upon whether “real yields” are higher or lower. The Quant-Insight model shows us that the R-Square of said SPX regime is at 85%, near the highs of the last year and meaning prices are highly explainable based upon these factors.

A Market Crash Flowchart

On February 5, a 28-sigma surge in VIX driven by a massive short squeeze in inverse VIX ETFs, catalyzed a 1000 point Dow drop, leading to the worst week for stocks in years.

Today, Trump’s unofficial declaration of trade war – or at least the intent thereof – has sparked another 500 point Dow drop, just as the “experts” were giving the all clear .

However, while both events have discrete causal factors, what is behind the recent market instability is neither a Vol problem nor a trade problem, but a “years of pent up ultra low rates” problem, which after years of central bank vol suppression and market manipulation, is finally manifesting itself.

As Deutsche shows in the chart at the bottom, the background of the risk-off shift started in January, with the Trump administration’s moves to depreciate the dollar ahead of mid-term elections, together with a shift of the type of interest rate rise from favorable to unfavorable, which in turn triggered the drop in share prices and the dollar. Deutsche describes the rise in rates that triggered risk-off as “unfavorable rise”.

Reflecting the sudden reflationary burst, 10y UST yields rose sharply from 2.32% on 22 November 2017 to 2.92% on 22 February. As a result, DB’s US rates research team raised its end-2018 10y UST forecast from 2.95% to 3.25%, and sees further upside potential in the terminal real rate of Fed funds, the inflation risk premium and the term premium. It is also possible that a sudden burst of inflation could hit asset prices, as in the 1960s.

And while higher rates initially catalyzed the move lower in risk assets, stocks have subsequently been more influenced by the VIX. As shown in the chart below, recently the S&P500’s P/E (more specifically, its risk premium) was determined by VIX.

U.S.-China Trade War Could Hinge on Feeding Pigs

President Trump looks poised to ratchet up the trade spat with Beijing using new restrictions on steel and aluminum imports. The blowback could hit U.S. soybeans, a key export a feedstock for the China’s pig population.

Are Best Buy and Kohl’s Good or Just Lucky?

For a certain group of retailers—the winners, as they might like to think of themselves—there is an awful lot of optimism in the air. How much of that success is due to their efforts and how much comes from the strong economy is the big question for investors.

Can Celgene Save Itself?

Celgene’s hard-won status as a biotech blue chip has unraveled in just months.

Retailers’ creepy efforts to be BFFs with customers can reap big rewards

Recent data shows that retailers know they’re making customers uneasy in an effort to give them service with a personal touch

Trump Today: President tells steel, aluminum executives they’ll have ‘protection’ as he announces tariffs

President Donald Trump on Thursday announced planned tariffs on steel and aluminum imports, as he held another discussion on gun-related violence in schools, and said policies to combat the opioid crisis would be rolled out over the next three weeks.

The Tell: Hedge fund boss who predicted the 1987 stock crash warns of a selloff in bonds

Paul Tudor Jones, a hedge-fund icon, said investors should steer clear of bonds, saying that he viewed prices of government paper as “overvalued and overowned” and primed to tumble.