Written by Gary
US stocks turned seriously negative in early afternoon trading (SPY -0.8%), weighed down by shares of Alphabet and 3M. The yield on the 10-year Treasury notes has risen to 3 percent for the first time in more than four years.
Here is the current market situation from CNN Money | |
 | North and South American markets are mixed. The Bovespa is higher by 0.41%, while the S&P 500 is leading the IPC lower. They are down 0.81% and 0.60% respectively. |
Traders Corner – Health of the Market
Looking at the last three columns (below), the first one (Actual), is what was reported this morning. The second column (Forecast) is what analysts had forecast and the third column is the previous report. Full calendar HERE.
Dow turns negative, off more than 1%, whacked by disappointing earnings
10-year Treasury yield tops 3% for first time since 2014, a key interest rate milestone that should ripple through the financial markets
Apple loses $64 billion in stock value as Wall Street is in ‘full panic mode’ on iPhone demand
What Is Moving the Markets
| Here are the headlines moving the markets. | |
| Wall Street lower as yields, Alphabet weighs(Reuters) – U.S. stocks turned negative on Tuesday, weighed down by shares of Alphabet and 3M and as yield on the 10-year Treasury notes rose to 3 percent for the first time in more than four years. |
| U.S. consumer confidence rebounds; new home sales riseWASHINGTON (Reuters) – U.S. consumer confidence rebounded in April and new home sales increased more than expected in March, pointing to underlying strength in the economy despite signs that growth slowed in the first quarter. |
| “Very good chance” of a U.S.-China trade deal: TrumpWASHINGTON (Reuters) – U.S. President Donald Trump on Tuesday said the United States would likely reach a trade agreement with China and that officials from both sides would sit down for negotiations in a few days. |
| Coca-Cola sales surge after Diet Coke reboot(Reuters) – Coca-Cola Co beat Wall Street estimates with quarterly results on Tuesday, citing more demand for Coke Zero Sugar and new flavors under its Diet Coke brand as overall revenue topped expectations by around $300 million. |
| Google-owner Alphabet’s shares dip on rise in costs(Reuters) – Shares of Google parent Alphabet Inc lost almost 5 percent on Tuesday as a surge in costs drove what analysts said was its biggest ever contraction in gross margins, overshadowing strong first-quarter ad sales. |
| Verizon first-quarter results beat estimates(Reuters) – Verizon Communications Inc reported better-than-expected first-quarter results on Tuesday as the No. 1 U.S. wireless carrier lost fewer monthly phone subscribers than feared, and the company’s chief financial officer said it was continuing to explore a new video service. |
| Mexico seeks flexibility for new NAFTA deal as ministers meetWASHINGTON (Reuters) – Mexican Economy Minister Ildefonso Guajardo said on Tuesday that flexibility will be needed to hash out an agreement on a new NAFTA deal, as he prepared to meet with his U.S. and Canadian counterparts later in the day. |
| Salesforce announces $2.2 billion French investment as Macron meets TrumpPARIS (Reuters) – U.S. software company Salesforce will invest more than $2.2 billion in its French business over the next five years, it said on Tuesday, in another sign of America Inc’s new love affair with France since President Emmanuel Macron’s election. |
| Citi chairman says all options being considered for his replacementCHICAGO/BENGALURU (Reuters) – Citigroup Inc Chairman Mike O’Neill said on Tuesday all options were being considered for his replacement, when he will retire in the next 12 months. |
| Russia Buys 300,000 Ounces Of Gold In March – Nears 2,000 Tons In ReservesSubmitted by GoldCore, Russia buys 300,000 ounces of gold in March and nears 2,000t in gold reserves Russia now holds just over 1,890 tonnes, more than officially reported by China at 1,842t Both Russia and China have the power to destabilise US dollar by dumping dollar-denominated assets Turkey has removed all gold held in the U.S. opting for Bank of England and BIS Turkey follows trend set by both Germany, Netherlands and others to remove gold reserves stored in the United States Central bank decisions regarding gold reserves are examples of countries becoming nervous about the outlook for the dollar under the Trump administration Russia bought another 300,000 troy ounces of gold in March bringing Russia’s total gold reserves to 1,891 tonnes or 60.8 million troy ounces as of the start of April, the central bank announced loudly at the weekend.
The continuing robust and steady accumu … |
| Caterpillar Plunges, Wiping Out 5% Gain After Surprising GuidanceIt was supposed to be Caterpillar’s day. Early this morning, the CAT reported another set of blowout numbers, with Q1 EPS of $2.82 on Exp. $2.11, on revenue of $12.90, also smashing estimates of $12.07BN. The company’s commentary was stellar, seeing growth across all verticals: Construction: “expects broad-based growth in all regions in 2018, with the biggest drivers being strength for construction activity in North America and infrastructure development in China” Mining: “global economic conditions and favorable commodity price levels will drive miners to increase capital expenditures in 2018 for both equipment replacement cycles and expansions” Energy: “continued strong demand for reciprocating engines for well servicing and gas compression applications in North America. The current turbines backlog remains healthy in support of the midstream Oil and Gas business” And sure enough, the market rewarded the stock by sending it 5% higher out of the gate, and pushing the Dow Jones higher. The sellside rushed to gush about the company’s stellar, if backward looking, results, without even bothering to listen to the conference call, such as this brave Citi analyst did.
Commentators, such as Bloomberg’s markets live team … |
| Trump Says There’s A “Good Chance” Of Trade Deal With ChinaDuring a brief meeting with reporters following the first part of his White House meeting with French President Emmanuel Macron, President Trump said the two were making good progress toward an agreement to keep the US from walking away from the Iran deal. Then Trump’s comments quickly turned to the subject of the US’s simmering trade war with China, with the president revealing that there’s a “good chance” the US will reach an agreement to quash the trade beef in the near future. Trump affirmed that Treasury Secretary Steven Mnuchin would head to China in a few days to conduct face-to-face negotiations with senior Chinese officials. Trump added that the US is engaged in serious trade talks with the EU, and that negotiations with Mexico and Canada over the North American Free Trade agreement were progressing nicely. Speaking on Saturday in Washington at the IMF’s spring meeting, Mnuchin said he’s “cautiously optimistic” of reaching an agreement with China on trade. Still, any possibility of a quick truce remains remote, Mnuchin admitted, saying “I’m not going to make a comment on timing, nor do I have anything confirmed.” On Sunday, China’s Commerce Ministry responded that it welcomes plans by top US officials to travel to China to negotiate on trade. |
| Technically Speaking: 5 Key Indicators To WatchAuthored by Lance Roberts via RealInvestmentAdvice,com, In this past weekend’s newsletter I discussed the market hitting “the wall” last week. This failure at the downtrend resistance keeps us on a defensive posture for now, but still allocated to the market as the longer-term bullish trend remains intact. I know. It’s confusing. However, this is the difficultly in navigating potential turning points in the market. It is also the juncture where the majority of investing mistakes are made. This week, I want to review 5-indicators we are currently watching very closely. Importantly, these are NOT “market-timing” indicators as they are based on longer-term time frames and are slow to change. However, they do have a very strong record of determining important turning points in the market from “bull” to “bear.” Since we are longer-term investors, our portfolio management process is driven less by short-term volatility, although we do hedge for such, and more towards changes in the trend of prices. While such analysis is “less predictive” and “more reactive” it is important to act accordingly within the portfolio management process when “signals” are issued. The Stock-Bond Ratio Something that should be of little surprise to anyone is the relationship between interest rates and equities. When interest rates rise, particularly sharply, it negatively impacts the costs of borrowing, the valuation of capital expenditures from the return on investment, and consumption. This eventually translates into slower rates of economic growth, not to mention recessions, which ultimately translates into … |
| Google Can’t Keep Its Success SecretStrong advertising growth shines fresh light on a controversial business, as spending jumps. |
| Elliott’s New Korean Target May Prove WillingThe activist investor has published its proposal to revamp Hyundai. It may not get everything it asks for, but it could still generate some good returns. |
| Handicapping the Next China BubbleChina’s central bank is embarking on a new easing cycle, and the nation’s bond market is suddenly on a tear. But in the past, China has had trouble easing without blowing big bubbles in more dubious assets than government bonds. |
| Case-Shiller 20 City Home Price Index February 2018 Now Rises To 6.8 % Year-over-Year GrowthWritten by Steven Hansen The non-seasonally adjusted Case-Shiller home price index (20 cities) year-over-year rate of home price growth rose from 6.4 % to 6.8 %. The index authors stated “With expectations for continued economic growth and further employment gains, the current run of rising prices is likely to continue.”
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| Project Syndicate: The weak case against China shows America has become a nation of whinersThe weak case against China is an embarrassing symptom of a scapegoat mentality that has turned America into a nation of whiners, writes Stephen Roach. |
| Is the free food offer at Walt Disney World really worth it?Visitors to the Florida theme park should read the fine print. |
| Hate crimes against U.S. Muslims have jumped since 2016Hate crimes targeting U.S. Muslims rose 15% in 2017, a second year in a row for a sharp rise. |
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