23Apr2018 Midday Update: Wall Street Edges Higher, DOW Down 3 Points, WTI Takes Nose Dive And Recovers In The Low 68 Handle, Bitcoin Backs Off 9K, US Dollar Trend Higher

Here is the current market situation from CNN Money

North and South American markets are broadly higher today with shares in Mexico leading the region. The IPC is up 1.02% while U.S.’s S&P 500 is up 0.17% and Brazil’s Bovespa is up 0.10%.

Wall Street edges higher as earnings optimism eases bond worries

(Reuters) – Wall Street edged higher on Monday, led by technology stocks, as optimism about strength of the earnings season helped ease concerns on rising U.S. Treasury yields.

U.S. extends deadline for Rusal sanctions, aluminum prices dive

WASHINGTON/MOSCOW (Reuters) – The U.S. government on Monday gave American customers of Russia’s biggest aluminum producer more time to comply with sanctions, sending aluminum prices into a tailspin but lifting shares of the company, United Company Rusal Plc.

Hasbro blames Toys ‘R’ Us for poor first quarter

(Reuters) – Hasbro Inc reported worse than expected results for the first quarter on Monday, blaming the bankruptcy of Toys ‘R’ Us for a slide in revenue but also promising the worst would be over in the first half of 2018.

Trump’s revenge: U.S. oil floods Europe, hurting OPEC and Russia

MOSCOW/LONDON (Reuters) – As OPEC’s efforts to balance the oil market bear fruit, U.S. producers are reaping the benefits – and flooding Europe with a record amount of crude.

U.S. existing home sales rise; inventory remains tight

WASHINGTON (Reuters) – U.S. home sales increased for a second straight month in March amid a rebound in activity in the Northeast and Midwest regions, but a dearth of houses on the market and higher prices remain headwinds as the spring selling season kicks off.

China may backslide on deleveraging if trade war looms

BEIJING (Reuters) – China’s efforts to reduce its reliance on debt and find a more sustainable route to grow its economy may be derailed by the simmering trade dispute with the United States, economists warn.

U.S. fund managers brace for trade war with focus on pricing power

NEW YORK (Reuters) – Investors’ fears of an all-out trade war between the United States and China is prompting U.S. stock fund managers to hunt for companies that can easily pass on higher costs to their consumers.

Halliburton revenue jumps on higher North American demand

(Reuters) – Oilfield services provider Halliburton Co reported a 34 percent jump in first-quarter revenue on Monday as North American companies boosted oil and gas production amid rising oil prices.

Newell, Starboard end proxy fight with Icahn’s backing

(Reuters) – Consumer products maker Newell Brands Inc and hedge fund Starboard Value LP have agreed to end a months-long proxy fight through a deal brokered by fellow activist investor Carl Icahn that will add three new independent directors to the board.

“There’s No Safety Valve” Mark Mobius Warns Of Massive Market Slump

81-year-old investing legend Mark Mobius believes that the US market is on the verge of a 30% collapse that would essentially wipe out the gains of the last two years.

The renowned fund manager, who left Franklin Templeton after more than 30 years in January, said “all the indicators” point to a large fall in the markets.

“I can see a 30% drop,” said Mobius, who launched one of the world’s first emerging market funds. “When consumer confidence is at an all time high, as it is in the US, that is not a good sign.

“The market looks to me to be waiting for a trigger that will cause it to tumble. You can’t predict what that event might be — perhaps a natural disaster or war with North Korea.”

The Return Of The Bond Vigilantes

Authored by Doug Kass via Seabreeze Partners,

With mounting private and public debt, the U.S. economy is poorly positioned to reach consensus economic growth expectations

The Bond Vigilantes are saddled up and ready to make a comeback – and it’s market unfriendly

“I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody.”
– James Carville

In “The Great Bond Massacre” from late 1993 to late 1994, the yield on the US ten year note rose from 5.2% to 8.0% as investors grew fearful about the implications of large federal spending increases.

For the first time in years the bond vigilantes, “a self-appointed group of citizens – the bond vigilantes – who undertake law enforcement in their community without legal authority, typically because the legal agencies are thought to be inadequate” have surfaced – with the ten year U.S. note yield now approaching three percent.

This morning the yield on the ten year U.S. note has hit a new four year high of 2.99%.

Deutsche: Another $5 Rise In Oil Would Unleash Market Turmoil

While traders have been closely following the push higher in 10Y yields, which this morning rose as high as 2.996%, as well as the dramatic short squeeze in the dollar, they may be ignoring the one asset class that is responsible for both moves: crude oil.

Recall, it is the ongoing move higher in crude prices that has sent 10Y breakevens surging to 4 year highs, while expectations of rising inflation have in turn boosted nominal yields as well as sent odds for 4 rate hikes to cycle highs…

… translating into a relentless dollar bid, which is creating a feedback loop forcing the record number of dollar shorts to aggressively cover their positions.

Analysts’ Estimates Go Parabolic – Is The Market Next?

Authored by Lance Roberts via RealInvestmentAdvice.com,

At the end of February, I discussed the impact of the tax cut and reform legislation as it related to corporate profits.

“In October of 2017, the estimates for REPORTED earnings for Q4, 2017 and Q1, 2018 were $116.50 and $119.76. As of February 15th, the numbers are $106.84 and $112.61 or a difference of -$9.66 and -7.15 respectively.

First, while asset prices have surged to record highs, reported earnings estimates through Q3-2018 have already been ratcheted back to a level only slightly above where 2017 was expected to end in 2016. As shown by the red horizontal bars – estimates through Q3 are at the same level they were in January 2017. (Of course, “hope springs eternal that Q4 of this year will see one of the sharpest ramps in earnings in S&P history.)”

That was so yesterday.

Despite a recent surge in market volatility, combined with th …

AT&T’s Defense Invokes Big Tech Terror

In the U.S. government’s lawsuit to block the merger of AT&T with Time Warner, the two companies say the deal needs to be approved for them to survive an onslaught from big tech. Yet, the imminent doom they conjure doesn’t entirely hold up.

Still Waiting for the Tax-Cut Boost

The economy weakened in the first quarter despite stimulus, leaving it unclear how much government stimulus will ramp up growth.

Why The Fun Is Already Fading for Investment Banks

UBS’s first quarter was boosted by strength in its investment-banking division, but activity has already slowed.

Retire Better: You’re probably going to live longer. What if you can’t afford it?

You may never be able to retire.

Earnings Outlook: Caterpillar earnings: Fears of trade-war impact appear overdone

When Caterpillar reports first-quarter results before Tuesday’s open, the maker of mining and farm equipment will get a chance to prove to investors that the stock’s recent underperformance doesn’t reflect the bullish fundamental outlook.

Key Words: BOJ’s Kuroda sees potential end to QE, says no currency manipulation in Japan

Japan will consider ditching its ultraloose monetary policy as soon as inflation meets the 2% inflation target, Bank of Japan Gov. Haruhiko Kuroda told CNBC in a weekend interview.