19Apr2018 Midday Update: Wall Street Slides Moderately, DOW Down Triple Digits, WTI Crude Higher And Volatile In The 69 Handle

Here is the current market situation from CNN Money

North and South American markets are lower today with shares in Mexico off the most. The IPC is down 0.77% while U.S.’s S&P 500 is off 0.71% and Brazil’s Bovespa is lower by 0.15%.

Apple, Philip Morris, chip stocks lead Wall Street slide

(Reuters) – U.S. stocks dropped on Thursday, weighed down by a broad-based decline in technology stocks from Apple to chipmakers as well as a tumble in consumer staples such as Philip Morris and P&G.

Exclusive: China looks to speed up chip plans as U.S. trade tensions boil – sources

BEIJING (Reuters) – China is looking to accelerate plans to develop its domestic semiconductor market amid a fierce trade stand-off with the United States and a U.S. ban on sales to Chinese phone maker ZTE that has underscored the country’s reliance on imported chips.

Allergan moves in as Shire rebuffs $63 billion Takeda bid: sources

NEW YORK/LONDON (Reuters) – Drugmaker Shire has rejected a third takeover bid worth nearly $63 billion from Japan’s Takeda Pharmaceutical , although talks are continuing, while sources said Allergan was also in competing negotiations.

Trump launches effort to boost U.S. weapons sales abroad

WASHINGTON (Reuters) – The Trump administration rolled out a long-awaited overhaul of U.S. arms export policy on Thursday aimed at expanding sales to allies, saying it will bolster the American defense industry and create jobs at home.

TSMC’s smartphone warning points squarely at Apple: analysts

(Reuters) – Shares in Apple Inc and its suppliers fell on Thursday after a raft of analysts read a prediction of softer smartphone sales from Taiwan Semiconductor Manufacturing Co Ltd as driven chiefly by concern about demand for iPhones.

U.S. ban on sales to ZTE triggers patriotic rhetoric in China

HONG KONG (Reuters) – A U.S. ban on sales of American components to ZTE Corp has unleashed a patriotic backlash in China’s cyberspace, highlighting the growing tension between the world’s two largest economies.

European utilities retrench as cross-border deals lose appeal

PARIS/FRANKFURT (Reuters) – European utility companies are retrenching in their home markets and looking to unwind debt-financed cross-border mergers deals as increasingly nationalist governments balk at foreign ownership of strategic power supplies.

GM Korea, union fail to reach agreement before Friday deadline

SEOUL (Reuters) – Wage talks between General Motors’ South Korean unit and its labor union ended without an agreement on Thursday, a day before the deadline the company had set for filing for bankruptcy.

The great Russian oil game in Iraqi Kurdistan

LONDON (Reuters) – Last October, at the height of a political crisis in Iraq’s Kurdistan region, a letter arrived at the Iraqi oil ministry in Baghdad from Igor Sechin, head of Kremlin oil major Rosneft .

The Only Question That Matters: “Is The Credit Cycle About To Crack” – Two Banks Respond

When trying to determine the fate of equities over the next few months (or years) and whether – as some speculated recently – the bull market has already peaked, investors should divert their attention from the stock market and focus on a different asset class: credit.

Why? Because as the sharp swoon in Goldman’s stock this week demonstrated, when it comes to the marginal buyer of stocks, it is all about corporate buybacks, or more importantly, their absence. Recall that last month JPM forecast that thanks to low rates and Trump’s tax reform, in 2018 there will be over $800 billion in corporate buybacks this year, a truly staggering, record number.

But for that to happen, one thing has to be present: a vibrant credit cycle which allows companies to issue hundreds of billions in net IG and junk debt. After all, the bulk of buybacks are funded with new debt issuance (see the

The Peso Is Getting Pounded

The Mexican peso has been sliding for a couple of days as NAFTA negotiations continue but, as Citi notes, today’s tumble – the biggest drop in 4 months – is not about NAFTA…

This does not appear to about NAFTA since the Loonie is trading well today and with no announcements expected today, it looks like the peso move is to do with AMLO and positioning more than anything.

Citi FX explains:

On this point, recall that USDMXN found a bid late Wednesday as markets began to reconsider the risk premium for AMLO. The presidential frontrunner has a comfortable lead in polls and recently threatened to kill the next Mexico City USD13bn airport project.

At this juncture, it looks like some unwind of crowded MXN longs is taking place. We have seen decent outflows pick up in the latest leg of the move from both fast money and real money names.

Large speculators are extremely long the peso…

Saxo Bank Quarterly Outlook: The End Of A Cycle Like No Other

Authored by Mike Shedlock via MishTalk,

Saxo Bank’s provides an ominous economic outlook in its second quarter report.

What follows below are snips from a 35-page report by Saxo bank. I condensed the report for readability. Any emphasis in italics is mine. Until the final paragraph what follows are snips from various Saxo Bank analysts.

Enjoy.

End of a Cycle Like No Other – Steen Jakobsen – CIO

We are nearing the end of the largest monetary policy experiment of all time, and ascendant nationalism, staggering inequality, and a widespread loss of hope among the younger generation are among its varied fruit. The good news? Things only change when they absolutely must.

Q1’s brief volatility spasms notwithstanding, today’s capital markets are in a zombie-like state, with low volatility and extreme valuations in all assets with no net increase in growth and productivity, and a massive increase in inequality.

The benefits from the globalised system and particularly from the central bank’s asset-pumping response accrued near-entirely to the already wealthy, while the average economic participant lost out. This is the process that drove the advent of Brexit and Trump.

So now we have our first great new showdown since the Cold War, which saw the victory of capitalism over communism. Now comes the fight between nationalism and globalism. Nationalism is winning big, as country by country the outlook is turning inwards, with an increase in placing the blame on external forces from immigrants to the real and imagined misbehaviour of trade par …

Stocks & Bonds Recouple – Now What?

Historically, when stocks have risen and decoupled from bonds, and bonds have then sold off to catch up to stocks; the recoupling has led to extended selling pressure in stocks.

Will we see the same this time?

Something else has shifted today: Tech is underperforming financials…

Qualcomm Is in the Eye of U.S.-China Storm Again

China has said issues with the U.S. chip maker’s proposed $44 billion tie-up with NXP Semiconductors may be “hard to resolve.” That isn’t a good sign either for this deal or broader global deal-making

Why Volatile Markets Are Good News for Careful Investors

Managing money involves a balancing act that trades off risk against return. This year is proving more challenging, with stocks and bonds swinging about. But it also shows how a return to a more normal level of market volatility might be good news for careful investors.

Will ‘Fortnite’ Ambush Profits at Rival Videogames?

The impact of the surprise gaming phenomenon “Fortnite” on rival video-game makers should become more clear over the next couple of weeks when quarterly results are reported.

March 2018 Leading Economic Index Points To Solid Growth For the Rest Of The Year

Written by Steven Hansen

The Conference Board Leading Economic Index (LEI) for the U.S improved this month – and the authors say “labor market components made negative contributions in March and bear watching in the near future.”.

Currencies: Dollar picks up steam as Treasury yields head higher

The U.S. dollar gained ground against its rivals as the session went on as the 10-year Treasury yield edged higher, flirting with the psychologically important 3%-mark.

Therese Poletti’s Tech Tales: SEC: Tell us more about all this money; Amazon and Google: Nope

The U.S. Securities and Exchange Commission has tried hard to force Alphabet Inc. and Amazon.com Inc. to disclose more information about their fast-growing businesses, but the tech giants aren’t playing along.

Amazon Prime’s 100 million members can get this credit card — but it comes with some pitfalls

The Amazon Prime card has a lot of the same drawbacks as other brick-and-mortar store cards.