17Apr2018 Midday Update: Wall Street Rises Sharply, DOW Up 200 Points, Nasdaq Surges As Netflix Powers Higher

Here is the current market situation from CNN Money

North and South American markets are broadly higher today with shares in Brazil leading the region. The Bovespa is up 1.03% while U.S.’s S&P 500 is up 0.97% and Mexico’s IPC is up 0.52%.

Tech stocks, Netflix power Wall Street’s gains

(Reuters) – U.S. stocks rose more than 1 percent on Tuesday, helped by gains in technology companies and as strong earnings from Netflix and UnitedHealth boosted optimism over what is expected to be the strongest earnings season in seven years.

Exclusive: China seeks trade firewall with U.S. allies in rush of ambassador meetings – sources

BEIJING/BRUSSELS (Reuters) – China’s international trade representative held a series of meetings with the ambassadors from major European nations last week to ask them to stand together with Beijing against U.S. protectionism, according to four sources familiar with the discussions.

U.S. ban on sales to China’s ZTE opens fresh front as tensions escalate

LONDON/NEW YORK/HONG KONG (Reuters) – The United States has banned American firms from selling parts and software to China’s ZTE Corp for seven years, potentially devastating for the telecoms equipment maker and exacerbating tensions between the world’s two largest economies.

Exclusive: Russia’s drive to replace Western power technology hits snag

MOSCOW (Reuters) – Russia’s drive to build a large power-generating turbine to lessen its dependence on Western technology has suffered a major set-back after a prototype broke beyond repair, two sources familiar with the project told Reuters.

U.S. top court rules that Microsoft email privacy dispute is moot

WASHINGTON (Reuters) – The U.S. Supreme Court on Tuesday dropped Microsoft Corp’s privacy fight with the Justice Department over whether prosecutors can force technology companies to hand over data stored overseas after Congress passed legislation that resolved the dispute.

Goldman trumps profit estimates as bond trading shines

(Reuters) – Goldman Sachs Group Inc blew past Wall Street’s expectations for quarterly profit on Tuesday, as volatility in global markets powered a surge in bond and stock trading.

Tech firms, including Microsoft, Facebook, vow not to aid government cyber attacks

SAN FRANCISCO (Reuters) – Microsoft, Facebook and more than 30 other global technology companies on Tuesday announced a joint pledge not to assist any government in offensive cyber attacks.

Investors cut exposure to tech stocks: BAML survey

LONDON (Reuters) – Alarm bells are ringing over valuations of the world’s leading technology stocks with worries over regulation causing many investors to cut exposure to the sector, Bank of America Merrill Lynch (BAML)’s April fund manager survey found.

China’s Huawei Tech retrenches in U.S. after years of criticism

WASHINGTON (Reuters) – China’s Huawei Technologies Co Ltd [HWT.UL], viewed with suspicion in congress as a potential threat to U.S. national security, has laid off five employees at its Washington office and slashed lobbying expenditures, according to sources familiar with the matter and government filings.

The IRS Tax-Payment Site Is Down

While for some, today’s Twitter outage is a big deal; a potentially far more problematic outage is hitting the Internal Revenue Service’s page for paying your tax bill…

With less than 12 hours to go until the Tax Day deadline, The IRS’s “Direct Pay” page – which allows filers to draft funds from their checking or savings account to pay the taxman what they owe – is unavailable…

Perhaps even more ironic, the New York State Tax Department announced on its Twitter page that its Personal Income Tax Extension web app is experiencing system problems.

The Personal Income Tax Extension web app is currently experiencing intermittent system issues. We’re working to restore access quickly. Please try again later. Note: if you file & pay your extension by midnight, we’ll consider it to be timely. We apologize for the inconvenience.

— NYS Tax Dept (@NYSTaxDept) April 17, 2018

How long before the blame for this utter debacle is pinned on Putin?

Majority Of Investors Starting To Cash Out, Convinced Market Peaks In Second Half

One month ago, Morgan Stanley ominously predicted that the market hit its 2018 – and perhaps cycle – highs in the late January melt up. And, according to roughly 18% of respondents in the latest, April, Global Fund Manager Survey conducted by Bank of America, (in which 176 participants with $543bn AUM responded to the Global FMS questions), that’s exactly what will happen.

However, according to no less than 40% of global financial “smart money”, the market peak won’t hit until the second half of 2018, and while 39% of respondents answered that the market won’t peak until 2019, what is notable, is that nearly two thirds of respondents believe that the central-bank inspired and funded bull market, which started in March 2009, will end shortly before its 10 year anniversary.

As a result of this growing skepticism that the market peak is just around the corner, the survey respondents’ allocation to equities fell to an 18-month low of just 29% (net), down from net 41% overweight in March.

Pat Buchanan Asks “Is Trump Now A Prisoner Of The War Party?”

Authored by Patrick Buchanan via Buchanan.org,

“Ten days ago, President Trump was saying ‘the United States should withdraw from Syria.’ We convinced him it was necessary to stay.”

Thus boasted French President Emmanuel Macron Saturday, adding,

“We convinced him it was necessary to stay for the long term.”

Is the U.S. indeed in the Syrian civil war “for the long term”?

If so, who made that fateful decision for this republic?

U.N. Ambassador Nikki Haley confirmed Sunday there would be no drawdown of the 2,000 U.S. troops in Syria, until three objectives were reached. We must fully defeat ISIS, ensure chemical weapons would not again be used by Bashar Assad and maintain the ability to watch Iran.

Translation: Whatever Trump says, America is not coming out of Syria. We are going deeper in. Trump’s commitment to extricate us from these bankrupting and blood-soaked Middle East wars and to seek a new rapprochement with Russia is “inoperative.”

The War Party that Trump routed in the primaries is capturing and crafting his foreign policy. Monday’s Wall Street Journal editorial page fairly blossomed with war plans:

“The better U.S. strategy is to … turn Syria into the Ayatollah’s Vietnam. Only when Russia and Iran began to pay a larger price in Syria will they have any incentive to negotiate an end to the war or even contemplate a peace based on dividing the country into ethnic-based enclaves.”

Apparently, we are to bleed Syria, Russia, Hezbollah and Iran until they cannot stand the pain and submit to subdividing Syria the way we want.

But suppose …

Gartman Goes Short Oil

Having been blown out of his momentum-chasing stock positions so many times in the past few months it made our readers’ heads spin, this morning “world-renowned commodity guru” Dennis Gartman has decided to turn his attention to a new asset class. Oil.

The reason for this is that Gartman is confident he has spotted something which will, or at least should, send the price of oil sharply lower. He explains:

CRUDE OIL PRICES ARE ONLY SLIGHTLY WEAKER THIS MORNING when compared to the levels marked here yesterday; however, after we had written and had sent TGL to our clients around the world yesterday crude rose rather sharply and then collapsed, forging a “reversal” to the downside in the process and very much capturing our attention as evidenced by the chart the page following of nearby Brent crude. The chart of nearby WTI obviously looks identical and because we always at minimum “respect” reversals and often trade them we are drawing very clear attention to what has happened here. This is material and we would be remiss in not noting so.

Further, the term structures have moved decisively and materially in a bearish manner as the backwardations in Brent and WTI have imploded in the course of the past twenty-four hours. Yesterday, on our mark, the averaged one-year front month backwardation for Brent and WTI had gotten to $6.50/barrel; this morning that has narrowed to $5.70/barrel and although that may not be a record narrowing in one trading session, certainly it is material. It is still wider than where it was one week ago when it stood at $4.67 and so crude is still being bid out of storage rather than bidding for storage, but the fact that it has narrowed 80 cents/barrel clearly has our attention… especially in light of the “reversal” noted above.

If we must point to a “fundamental” reason for the sharp downward movement we can and we will blame it upon the fact that there …

How Long Until China Cranks Up the Debt Engine?

The country’s first-quarter growth was strong, boosted by a seasonal industry rebound. But it masked some worrying signs.

U.S. Tech Caught in Crossfire of China Trade Fight

One of China’s most successful global companies has been punished by the U.S. government. That means trouble for its suppliers too.

Is This as Good as It Gets for the Big Banks?

The laggards of American banking are at last producing unambiguously good results. The challenge for the banks now is to prove they can deliver healthy profits in less than ideal conditions.

March 2018 Industrial Production Improvement Trend Continues

Written by Steven Hansen

The headlines say seasonally adjusted Industrial Production (IP) improved month-over-month. Our analysis agrees.

Capitol Report: Sugar high? Two new reports say economic boost from tax cuts may be fleeting

Enjoy the economic impact from the tax cuts while you can, because they won’t last for long, according to two reports released Tuesday.

The Ratings Game: These are the 2 things Netflix investors still need to worry about, analysts say

Netflix wows analysts with another blowout quarter that sends its stock to a record high, but cash burn and the need to raise subscription prices are highlighted as concerns.

The Tell: The tax bill accelerated the bull market — and may make its end more painful

The recently passed tax-reform package was seen as one of the most significant pieces of legislation for the U.S. stock market in years, resulting in an immediate boost to corporate profitability and providing another tailwind for equity prices.