26Apr2018 Market Close: Wall Street Gains On Strong Earnings, Tech Resurgence

Amazon’s first-quarter revenue, profit trounce estimates

(Reuters) – Amazon.com Inc reported first-quarter revenue and profit on Thursday that trounced analysts’ estimates, driven by a surge in online shopping and higher demand for its cloud services.

Microsoft’s quarterly profit rises 35 percent

(Reuters) – Microsoft Corp’s quarterly profit rose 35 percent, as more businesses signed up to its Azure cloud computing services and Office 365 productivity suite.

Wall Street gains on strong earnings, tech resurgence

NEW YORK (Reuters) – U.S. stocks advanced on Thursday with each of Wall Street’s major indexes ending the session up 1 percent or higher, boosted by solid earnings results and a rebound in technology stocks as U.S. bond yields pulled back.

Musk’s ‘no new capital’ promise faces scrutiny when Tesla reports results

SAN FRANCISCO (Reuters) – Investors are accustomed to the bold promises of Tesla Inc’s Elon Musk, but his assertion that the electric vehicle maker will not need more funds this year has many scratching their heads. How can the chief executive deliver on his many goals without a fresh infusion of outside cash?

U.S. business spending on equipment cooling; labor market strong

WASHINGTON (Reuters) – New orders for key U.S.-made capital goods fell in March, weighed down by the biggest decline in demand for machinery in nearly two years, and a drop in shipments cemented expectations that business spending on equipment slowed in the first quarter.

Southwest Airlines expects bookings to drop after deadly explosion

(Reuters) – Southwest Airlines Co on Thursday warned the consequences of a mid-air engine explosion last week will weigh on second-quarter bookings, as investigators continued to probe the events that led to the first passenger death in the airline’s history.

MetLife trims compensation for CEO, CFO in year marked by errors

(Reuters) – MetLife Inc reduced total 2017 compensation for its chief executive and chief financial officer, a year marked by two key errors, including payments it failed to make to pensioners whom it could not locate, according to a filing on Thursday.

Airbus heads for dogfight with UTC over CSeries costs

PARIS/MONTREAL (Reuters) – Airbus is preparing to cross swords with United Technologies over the price of components and services for the Bombardier CSeries in a bid to make it easier to market the jet it agreed to bail out last year, people close to the matter said.

Wall Street seeks rule changes to encourage IPOs, staying public

NEW YORK/WASHINGTON (Reuters) – Wall Street lobby groups urged U.S. policy makers and regulators to revamp rules to encourage more initial public offerings and to reduce the regulatory cost of staying public, in a white paper issued on Thursday.

Facebook Feeding Frenzy Saves Market From Draghi Doldrums

Coming into today, in its preview of the day’s main event, the ECB decision and presser, UBS’ Paul Donovan said that “the main point of interest at today’s ECB press conference is what color tie ECB President Draghi will wear. That is a far more uncertain outcome than the policy decision.” He was right: Mario Draghi downplayed the recent collapse in European economic data, said the ECB is not concerned about the EUR and promised that the ECB is not engaging in a stealth taper.

And while the market’s initial read was of a hawkish take by Draghi, just before 10am ET something snapped, and the EURUSD tumbled…

… sending the dollar index surging.

Worldwide Wine Output Collapses To 60-Year Low, Sparks Fears Of Major Shortage

The Director-General of the International Organization of Vine and Wine (OIV), Jean-Marie Aurand, presented breathtaking information on the collapse of global wine production, assessment of the worldwide harvest, and the state of the overall wine industry at the organization’s headquarters in Paris on Wednesday.

During the presentation, Aurand warned that global wine production collapsed in 2017, with a contraction of 8.6 percent compared with 2016 figures. In fact, global wine output dropped to its lowest levels since 1957, primarily due to poor weather conditions in the Eurozone which slashed production across the entire bloc.

For instance, French winemakers were hit with the worst frost in 25-years, during the 2017 growing season. Vinters reported “widespread damage in Bordeaux, Burgundy, and Champagne, with some losing their entire 2017 crop,” said Wine Spectator.

“We can already estimate that we have lost nearly half of the potential crop,” s …

Who Was Yesterday’s Mystery Massive Bond-Curve Player?

Authored by Kevin Muir via The Macro Tourist blog,

Yesterday afternoon some big shooter put on a monster U.S. steepening / German flattening bond trade.

The specifics of the trade were;

buy 100,174 US five-year treasury futures

sell 63,887 US ten-year treasury futures

sell 65,362 German bobl futures (5-year)

buy 29,145 German bund futures (10-year)

I did get a few pings asking if I was busy writing some tickets, but alas, the ‘Tourist’s positions have a lot less digits. According to Bloomberg, this position has $4.7 million of DV01 risk (dollar-value per basis point). That’s way above my pay grade, but it’s worth thinking about the rationale behind this whale’s trade.

Let’s break the trade into two parts. The first is the US side. The trader bought the five-year US treasury future and sold the ten-year US treasury future. This half of the trade will profit if the U.S. treasury yield curve steepens between the 5 and 10 year portion of the curve.

The trade was executed at around 18 basis points. But where does this stack up c …

Blain: “Millennials Aren’t Buying Cars Or Homes Because They Are Indentured Slaves”

Submitted by Bill Blain of Mint Partners

“It takes a big hearted girl from the North Country you can tell how you payed those bills and went through heaven and hell…”

Let’s not worry about US stocks dancing around the 200 day moving average, or Deutsche Bank’s miserably miserable (anticipated) results, or the 3.01% US treasury yield (only some 90 bp lower than Greece (and yes I know they are different currencies, but that’s not the point!) And, yes, the main news today will be whatever ECB head Draghi says. Don’t expect any insights into the disturbing signals of European slowdown, but prepare for the usual kick-ra-can-down-the-road obstification about when rates are going to rise. Yawn.

Instead, let’s start with credit where credit is due.

Last night I was at the 20th Birthday Party for the UK Debt Management Office. Founded by Gordon Brown on April 1st 1998, the small and highly professional DMO staff raised nearly £150 bln for the UK last year, prompting Chancellor Philip Hammond to wonder if this made them the most productive workers in the UK? I suppose it’s no wonder my old friend, reformed banker and head of the DMO, Sir Robert Stheeman, did the maths and idly pondered: since they raise something like £800,000 for the UK every minute, perhaps its time to ask for commission based pay packages for his staff?

The success of the DMO is illustrated by the fact so many other countries have since followed the model, and by the number of bankers at last night’s do in the Treasury. Great to see so many old friends there, and thanks for the many kind words about the porridge. I really have no idea how many people read it as its distributed over a larger number of media outlets including Bloomberg, Euromoney and other financial wires – which proves its freely available commentary and therefore not subject to MiFID restrictions.

The other side of …

Facebook Stays in the Friend Zone

The social network’s first-quarter report showed that about 48 million daily active users signed up during the period, suggesting that the world’s largest social network isn’t easily unplugged despite its recent problems.

Shell Will Win on Gas But Is Losing on Oil​

Shell’s first-quarter net profit surged thanks to higher prices and natural gas output. The company’s strategic shift into natural gas makes sense long term, but has a cost now as oil rebounds.

A Healthier Viacom Makes a CBS Deal Trickier

Struggling media company Viacom’s revival won’t make reaching a deal with CBS any easier.

26Apr2018 Midday Update: Wall Street Opens Higher, Trades Mostly Sideways, DOW Up Over 200 Points, Nasdaq Up 1.5%, US Dollar Index Trending Higher

Written by Gary

US major stock market indexes rallied today (SPY +0.8%), led by a surge in shares of Facebook. Traders are now focused on the latest run of earnings from major tech companies and easing US bond yields helping the sentiment on Wall Street.

April 2018 Kansas City Fed Manufacturing Matching Highest Level in Survey History

Of the four regional manufacturing surveys released for April, 3 were in expansion and one was in contraction.

Market Extra: Facebook results show that FAANG stocks still have bite

Over the past several weeks, one of the biggest questions in the U.S. stock market was whether major internet and technology companies were at the end of a major multiyear rally, one that single-handedly lifted the broader market over the course of 2017.

Pepsi, Hershey, UPS and other earnings reports hint that inflation pressure is mounting

Inflation is beginning to show up in first-quarter earnings with a slew of reports on Thursday highlighting the pressure on margins from the rising costs of a range of raw materials, from fuel to freight costs to food and even wages.

The Wall Street Journal: Mike Pompeo confirmed as secretary of state

The Senate on Thursday confirmed Mike Pompeo to be the next secretary of state, ending one of the most divisive confirmation battles for the nation’s top diplomatic job in recent memory.